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https://www.courtlistener.com/api/rest/v3/opinions/8487741/	J-S37013-22 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 COMMONWEALTH OF PENNSYLVANIA : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : EFRAIN MIRANDA III : : Appellant : No. 226 EDA 2022 Appeal from the PCRA Order Entered December 22, 2021 In the Court of Common Pleas of Lehigh County Criminal Division at No(s): CP-39-CR-0004828-2016 BEFORE: BOWES, J., LAZARUS, J., and OLSON, J. MEMORANDUM BY BOWES, J.: FILED NOVEMBER 18, 2022 Efrain Miranda III appeals from the order dismissing his petition filed pursuant to the Post Conviction Relief Act (“PCRA”). We vacate the PCRA court’s order and remand with instructions. While serving a prison sentence on a prior conviction, Appellant developed the plan of soliciting certain individuals to burglarize a judge’s house, then afterwards providing information to the authorities about those individuals in the hopes of having his own sentence reduced. After two unsuccessful attempts, Appellant’s plot was uncovered. On June 6, 2017, Appellant entered an open guilty plea to conspiracy to commit burglary and received a sentence of eight and one-half to twenty years of imprisonment. The sentence was imposed consecutively to the sentence Appellant was already serving. J-S37013-22 Appellant filed an untimely direct appeal, which this Court quashed. On July 5, 2018, Appellant filed a pro se PCRA petition seeking reinstatement of his post-sentence motion and direct appellate rights, which the PCRA court granted after appointed counsel filed an amended petition. Appellant filed a timely post-sentence motion, which the trial court granted in part and denied in part. Specifically, the trial court granted Appellant’s request to impose a recidivism risk reduction incentive (“RRRI”) minimum sentence but denied his request to otherwise modify the sentence. A timely direct appeal followed. On February 26, 2020, this Court affirmed Appellant’s judgment of sentence. See Commonwealth v. Miranda, 227 A.3d 441 (Pa.Super. 2020) (non- precedential decision). On March 5, 2021, Appellant filed the pro se PCRA petition that is the subject of this appeal. Therein, Appellant claimed that he received a statement from an individual who plotted the burglary which would prove his innocence. On June 30, 2021, the PCRA court issued Pa.R.Crim.P. 907 notice of its intent to dismiss Appellant’s “second” PCRA petition without a hearing as untimely and insufficiently pled. Appellant filed a response, attaching the statement he received and claiming that his petition should be considered a timely first PCRA petition. Appellant also requested that the court appoint counsel to assist him. The PCRA court dismissed the PCRA petition as untimely, and this timely appeal followed. On March 7, 2022, this Court directed the trial court to determine Appellant’s eligibility for court-appointed counsel. See Pa.R.Crim.P. 904(C) -2- J-S37013-22 (providing that when an unrepresented defendant demonstrates an inability to afford counsel, the PCRA court must appoint counsel to represent the defendant on his first PCRA petition.). On March 28, 2022, the PCRA court entered an order finding Appellant ineligible for appointed counsel as this was a second or subsequent petition. On April 14, 2022, Appellant informed this Court that he would proceed pro se with this appeal due to the PCRA court’s March 28, 2022 order. Both Appellant and the PCRA court complied with Pa.R.A.P. 1925. Appellant raises the following issue for our review: “Whether the court erred as a matter of law in dismissing Appellant’s first PCRA petition as untimely and as his second subsequent PCRA petition without the assistance of counsel.” See Appellant’s brief at 4. We consider Appellant’s question mindful of the following. “This Court is limited to determining whether the evidence of record supports the conclusions of the PCRA court and whether the ruling is free of legal error.” Commonwealth v. Diaz, 183 A.3d 417, 421 (Pa.Super. 2018). It is well- established that a PCRA petition, including a second or subsequent petition, must be filed within one year of the date that the petitioner’s judgment becomes final. See 42 Pa.C.S. § 9545(b)(1). A judgment becomes final “at the conclusion of direct review, including discretionary review in the Supreme Court of the United States and the Supreme Court of Pennsylvania, or at the expiration of time for seeking the review.” 42 Pa.C.S. § 9545(b)(3). However, “[t]his court has explained that when a PCRA petition’s direct appeal rights -3- J-S37013-22 are reinstated nunc pro tunc in his first PCRA petition, a subsequent PCRA petition will be considered a first PCRA petition for timeliness purposes.” Commonwealth v. Turner, 73 A.3d 1283, 1286 (Pa.Super. 2013) (citation omitted). In these circumstances, the one-year PCRA time clock does not begin to run until the direct appeal nunc pro tunc renders the appellant’s judgment of sentence final. See Commonwealth v. Fowler, 930 A.2d 586, 591 (Pa.Super. 2007). In the case sub judice, the court granted Appellant’s request for an appeal nunc pro tunc. The direct appeal concluded on February 26, 2020, when this Court affirmed Appellant’s judgment of sentence. Accordingly, Appellant’s judgment of sentence became final thirty days later, on March 27, 2020, when the time for filing a petition of allowance of appeal to our Supreme Court expired. See Pa.R.A.P. 1113(a). Thereafter, Appellant had until March 27, 2021, to file a timely first PCRA petition. See 42 Pa.C.S. § 9545(b)(1). Therefore, on March 5, 2021, when Appellant submitted his petition, the filing should have been construed as a timely first PCRA petition and the PCRA court erred by concluding otherwise. The PCRA court further erred when it denied Appellant’s request for the appointment of counsel to assist him with the litigation of his first PCRA petition. It is well-settled that criminal defendants who demonstrate an inability to afford counsel have a right to representation of counsel for the litigation of their first PCRA petition. See Pa.R.Crim.P. 904(C). Herein, Appellant proceeded with court-appointed counsel during his plea and direct -4- J-S37013-22 appeal. Additionally, the PCRA court granted Appellant in forma pauperis (“IFP”) status in its order denying this petition. See Order, 12/22/21. Accordingly, Appellant has already made the necessary showing that he cannot afford counsel and is entitled to court-appointed counsel for the duration of his first PCRA petition. Based on the foregoing, we vacate the order dismissing Appellant’s first PCRA petition and remand for the appointment of counsel.1 Appointed counsel shall either file an amended PCRA petition or submit a “no-merit” letter that complies with the requirements set forth in Commonwealth v. Turner, 544 A.2d 927 (Pa. 1988), and Commonwealth v. Finley, 550 A.2d 213 (Pa.Super. 1988) (en banc). The PCRA court shall then review counsel’s submission, provide the Commonwealth with the opportunity to file an answer, and decide whether an evidentiary hearing is warranted. Order vacated. Case remanded with instructions. Jurisdiction relinquished. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 11/18/2022 ____________________________________________ 1 The Commonwealth concedes that the PCRA court erred and that remand for the appointment of counsel is required. See Commonwealth’s brief at 5. -5-	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487739/	J-S32025-22 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 COMMONWEALTH OF PENNSYLVANIA : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : JAMES STEPHEN PAVLICHKO : : Appellant : No. 324 MDA 2022 Appeal from the PCRA Order Entered January 25, 2022 In the Court of Common Pleas of Schuylkill County Criminal Division at No(s): CP-54-CR-0000802-1996 BEFORE: PANELLA, P.J., BENDER, P.J.E., and LAZARUS, J. MEMORANDUM BY BENDER, P.J.E.: FILED: NOVEMBER 18, 2022 Appellant, James Stephen Pavlichko, appeals pro se from the post- conviction court’s January 25, 2022 order dismissing, as untimely, his petition filed under the Post Conviction Relief Act (PCRA), 42 Pa.C.S. §§ 9541-9546. We affirm. The facts of Appellant’s underlying convictions are not pertinent to our disposition of his present appeal. We only briefly note that “[i]n order to avoid the death penalty, Appellant pled guilty[, in July of 1997,] to criminal homicide generally, aggravated assault, and conspiracy in connection with the brutal beating death of Dale Nelson.” Commonwealth v. Pavlichko, No. 1522 MDA 2018, unpublished memorandum at 1 (Pa. Super. filed April 17, 2019) (affirming the denial of Appellant’s fifth PCRA petition). “Appellant proceeded in 1997 to a degree-of-guilt hearing along with co-defendant Daniel Petrichko.” Id. Ultimately, “[t]he trial court found both Appellant and J-S32025-22 Petrichko guilty of first-degree murder” and it “sentenced Appellant to life imprisonment, followed by fifteen to forty years of imprisonment.” Id. “This Court affirmed Appellant’s judgment of sentence on direct appeal[,]” and our Supreme Court denied his subsequent petition for allowance of appeal. Id. at 2 (citing Commonwealth v. Pavlichko, 724 A.2d 959 (Pa. Super. 1998) (unpublished memorandum), appeal denied, 734 A.2d 393 (Pa. 1998)). Over the following two decades, Appellant litigated five unsuccessful PCRA petitions. On August 27, 2021, he filed a pro se “Writ of Habeas Corpus Ad Subjiciendum,” which underlies the present appeal. The PCRA court treated Appellant’s writ of habeas corpus as his sixth PCRA petition. On November 8, 2021, Appellant filed an amended, pro se petition. The PCRA court aptly summarized the claims raised in Appellant’s initial and amended petitions, as follows: [Appellant] contends that he is entitled to relief because[,] prior to his entering a general plea to homicide on July 16, 1997, the Commonwealth had offered him a plea deal to third[-]degree murder[,] which was contingent upon his providing information to police to assist them in another murder investigation. [Appellant] claims that he provided the requested information to police in 1996 but that thereafter the District Attorney’s Office did not comply with the plea deal; [Appellant]’s attorneys did not properly represent [Appellant] so [as] to enforce the deal[;] and, [Appellant]’s subsequent plea of guilty to homicide generally was unlawfully induced as a result of his reliance on the plea deal[,] which was not mentioned by anyone to the judge. Following a degree of guilt hearing, [Appellant] was found guilty of first[- ]degree murder and sentenced to life in prison. In his amended petition filed on November 8, 2021[, Appellant] additionally [avers] that his current claim is timely because his parents had consulted with Attorney Gordon — who became -2- J-S32025-22 [Appellant’s] trial counsel — to inquire about the lawyer’s representing [Appellant] in the murder case; that the attorney entered into a written agreement1 for a fee of $ 30,000.00 based upon [Appellant’s] pleading to third[-]degree murder; that a written copy of the fee agreement was in possession of [Appellant’s] parents; and, that it was only recently located by [Appellant’s] brother[,] who found it among [Appellant’s] now[-] deceased parents’ effects. [Appellant] further contends that he previously had tried to obtain a copy of the fee agreement from his attorney, and that the latter has since died. 1 The alleged agreement[,] dated September 17, 1996[,] states, in part, “$30,000.00 for attorney fees, third[- ]degree murder negotiated guilty plea with prosecution and sentencing. $15,000.00 upon signing this agreement, balance due four (4) weeks later.” PCRA Court Opinion (PCO), 1/25/22, at 2. After the PCRA court issued a Pa.R.Crim.P. 907 notice of its intent to dismiss Appellant’s petition without a hearing, it entered a final order on January 25, 2022, dismissing his petition. Appellant filed a timely, pro se notice of appeal, as well as a Pa.R.A.P. 1925(b) concise statement of errors complained of on appeal. Herein, he states one issue for our review: “The PCRA court abused its discretion in denying an evidentiary hearing noting[,] among other reasons[,] that the newly[-]discovered evidence did not fall within the exceptions pursuant to 42 Pa.C.S.[] § 9545(b)(1) [and], therefore[,] the court lacked jurisdiction to rule on the merits of the issues raised in Appellant’s amended PCRA petition.” Appellant’s Brief at 1 (unnecessary capitalization and quotation marks omitted). This Court’s standard of review regarding an order denying a petition under the PCRA is whether the determination of the PCRA court is supported -3- J-S32025-22 by the evidence of record and is free of legal error. Commonwealth v. Ragan, 923 A.2d 1169, 1170 (Pa. 2007). We must begin by addressing the timeliness of Appellant’s petition, because the PCRA time limitations implicate our jurisdiction and may not be altered or disregarded in order to address the merits of a petition. See Commonwealth v. Bennett, 930 A.2d 1264, 1267 (Pa. 2007). Under the PCRA, any petition for post-conviction relief, including a second or subsequent one, must be filed within one year of the date the judgment of sentence becomes final, unless one of the following exceptions set forth in 42 Pa.C.S. § 9545(b)(1)(i)-(iii) applies: (b) Time for filing petition.-- (1) Any petition under this subchapter, including a second or subsequent petition, shall be filed within one year of the date the judgment becomes final, unless the petition alleges and the petitioner proves that: (i) the failure to raise the claim previously was the result of interference by government officials with the presentation of the claim in violation of the Constitution or laws of this Commonwealth or the Constitution or laws of the United States; (ii) the facts upon which the claim is predicated were unknown to the petitioner and could not have been ascertained by the exercise of due diligence; or (iii) the right asserted is a constitutional right that was recognized by the Supreme Court of the United States or the Supreme Court of Pennsylvania after the time period provided in this section and has been held by that court to apply retroactively. 42 Pa.C.S. § 9545(b)(1)(i)-(iii). Additionally, section 9545(b)(2) requires that any petition attempting to invoke one of these exceptions “be filed within one -4- J-S32025-22 year of the date the claim could have been presented.” 42 Pa.C.S. § 9545(b)(2). Here, Appellant’s judgment of sentence became final in 1999, after the expiration of the time for him to file a petition for writ of certioriari with the United States Supreme Court. See 42 Pa.C.S. § 9545(b)(3) (stating that a judgment of sentence becomes final at the conclusion of direct review or the expiration of the time for seeking the review); Commonwealth v. Owens, 718 A.2d 330, 331 (Pa. Super. 1998) (directing that under the PCRA, petitioner’s judgment of sentence becomes final ninety days after our Supreme Court rejects his or her petition for allowance of appeal since petitioner had ninety additional days to seek review with the United States Supreme Court). Thus, Appellant’s present petition, filed in 2021, is patently untimely. For this Court to have jurisdiction to review the merits thereof, Appellant must prove that he meets one of the exceptions to the timeliness requirements set forth in 42 Pa.C.S. § 9545(b). Instantly, Appellant fails to meet this burden. First, Appellant argues that he has satisfied the new-fact exception of section 9545(b)(1)(ii). Specifically, he contends that on February 12, 1997, he entered into a plea agreement with the Assistant District Attorney (ADA), by which the ADA agreed to permit him to plead guilty to third-degree murder if he provided information leading to the arrest and conviction of a man named Harry Harley in an unrelated case. Appellant’s Brief at 3-4. According to Appellant, he -5- J-S32025-22 provided the requested information to the ADA, but he was never notified if that information led to Harley’s arrest and conviction. He insists that he exercised due diligence[,] as he sought for years from [his trial counsel] and [the] ADA … to know if the information/names he provided led to the arrest of Harley[,] but his inquiries went unanswered. Without [the] ADA[’s] … providing this evidence, Appellant could only surmise the information/names he provided did not led [sic] to the arrest of Harley. Id. Appellant further claims that, “[i]n August [of] 2021, [he] returned to his [prison] cell … and found a note on … [the] floor threatening his life for the names he provided … to the State Police and [the] ADA…[,] which led to the arrest and conviction of Harry Harley….” Id. (footnote omitted). He avers that this note was the first time he learned the ‘new fact’ that the information he had provided to the ADA had actually led to Harley’s arrest and conviction. Thus, Appellant contends that his discovery of this ‘new fact’ proves that he was entitled to the agreed-upon plea deal to third-degree murder. Id. He maintains that the ADA violated Brady v. Maryland, 373 US 83 (1963), by withholding this exculpatory information from Appellant to avoid honoring the plea agreement. Id. Appellant contends that he filed his present PCRA petition raising this claim on August 27, 2021, thereby meeting the timeliness requirement of section 9545(b)(2) and the newly-discovered-fact exception of section 9545(b)(1)(ii). Id. After reviewing Appellant’s initial and amended PCRA petitions, we conclude that Appellant never raised this claim before the PCRA court. At no -6- J-S32025-22 point in those filings did Appellant discuss the note purportedly left in his prison cell, or state that he was unaware, until he received it, that Harley was convicted based on the information Appellant had provided, thus entitling him to a third-degree murder plea. Therefore, his claim that the note revealed a ‘new fact’ that meets the timeliness exception of section 9545(b)(1)(ii) is waived. See Pa.R.A.P. 302(a) (“Issues not raised in the lower court are waived and cannot be raised for the first time on appeal.”).1 Instead, in his PCRA petitions, Appellant essentially claimed that he was promised that his guilty plea to criminal homicide would be graded as third- degree murder if he provided police with information about Harley’s case. According to Appellant, he pled guilty based on this understanding, yet his homicide conviction was subsequently graded as first-degree murder. He contended that his plea was therefore invalid, and his trial counsel was ____________________________________________ 1 In any event, even if not waived, we would conclude that Appellant has not met the due diligence requirement of section 9545(b)(1)(ii). Namely, Appellant only vaguely claims that he “sought for years” to obtain information from his trial counsel and the ADA about whether the information he provided had led to Harley’s arrest and conviction. Appellant does not discuss when, or how many times, over the 20 years between his providing information to the authorities about Harley, and his receiving the note in his cell, that he asked his counsel and/or the ADA about the outcome of Harley’s case, or about his alleged plea deal to third-degree murder. He also does not claim to have made any other efforts to ascertain if Harley had been convicted during the decades after Appellant’s homicide conviction was graded as first-degree murder and he realized he was not getting the benefit of his ostensible plea deal to third-degree murder. Therefore, we would conclude that Appellant’s bald and undeveloped assertion of due diligence is not adequate to meet the requirements of section 9545(b)(1)(ii), even had he preserved this claim before the PCRA court. -7- J-S32025-22 ineffective for failing to object to the grading of Appellant’s homicide conviction, or seek to withdraw Appellant’s involuntary guilty plea. Appellant points to the “written fee agreement” as evidence that his counsel knew that Appellant had a plea agreement for third-degree murder, yet counsel did nothing to ensure that Appellant pled guilty to that offense. Appellant claimed that the ‘new fact’ of this written fee agreement “just came to light” when his brother was “going through a filing cabinet of paperwork of their deceased parents….” Amended PCRA Petition, 11/8/21, at 3. Appellant’s arguments do not satisfy any timeliness exception. The written fee agreement did not reveal any ‘new fact.’ Instead, it simply set forth the plea agreement that Appellant claims he negotiated with the ADA in 1996. Because Appellant was aware in 1996 of the alleged agreement with the ADA that his homicide conviction would be graded as third-degree murder, the written fee agreement does not contain any ‘new fact.’ Moreover, Appellant clearly became aware, at the moment his homicide conviction was graded as first-degree murder, that he was not receiving the plea deal to which he was purportedly entitled. He could have raised this claim in a motion to withdraw his plea, on direct appeal, or in any of his five prior PCRA petitions, yet failed to do so. Likewise, Appellant could have challenged, in a timely PCRA petition, his trial counsel’s failure to ensure that he received the plea -8- J-S32025-22 deal to third-degree.2 Because Appellant did not do so, he has not proven that he acted with due diligence is discovering and raising this claim for purposes of overcoming the timeliness requirement of section 9545(b)(1). Order affirmed. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 11/18/2022 ____________________________________________ 2 We also note that Appellant claims, for the first time on appeal, that his guilty plea was invalid because he had mental health conditions for which he was taking medication that prevented him from comprehending the plea he was entering. He also claims that his medication inhibited him from explaining to the court that he had negotiated with the ADA a plea agreement to third- degree murder. Again, Appellant could have raised these claims in a motion to withdraw his plea, on direct appeal, or during one of his prior PCRA proceedings. He does not explain why he failed to do so. Thus, his arguments cannot satisfy any timeliness exception. -9-	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487736/	J-S24025-22 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 COMMONWEALTH OF PENNSYLVANIA : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : : v. : : : ARLET URRUTIA : No. 743 EDA 2021 Appeal from the Order Entered March 15, 2021 In the Court of Common Pleas of Delaware County Criminal Division at No(s): CP-23-CR-0000997-2020 BEFORE: PANELLA, P.J., LAZARUS, J., and PELLEGRINI, J.* JUDGMENT ORDER BY LAZARUS, J.: FILED NOVEMBER 18, 2022 The Commonwealth of Pennsylvania appeals from the order, entered in the Court of Common Pleas of Delaware County, denying its motion in limine seeking permission to present testimonial evidence with respect to defendant Arlet Urrutia’s 2011 driving under the influence (DUI)1 charge in Philadelphia County. After careful review, we quash the appeal. Urrutia entered into the Accelerated Rehabilitative Disposition (ARD) Program for his 2011 DUI charge and successfully completed the program. On October 5, 2019, Urrutia was charged with the instant DUI offense. On February 5, 2020, the Commonwealth filed a motion in limine seeking to introduce evidence of the 2011 offense. The trial court denied the motion in ____________________________________________ * Retired Senior Judge assigned to the Superior Court. 1 75 Pa.C.S. § 3806(a). J-S24025-22 accordance with Commonwealth v. Chichkin, 232 A.3d 959 (Pa. Super. 2020), which held unconstitutional that portion of the DUI statute equating prior acceptance of ARD with a prior conviction for purposes of imposing a mandatory minimum sentence for a second or subsequent DUI offense. By order dated August 17, 2022, this panel stayed disposition of the Commonwealth’s appeal pending this Court’s en banc decision in Commonwealth v. Moroz, --- A.3d ---, 2022 PA Super 169 (Pa. Super. filed Oct. 4, 2022) (en banc). In Moroz, our Court overruled Chichkin, holding that the portion of section 3806(a) that equates prior acceptance of ARD to a prior conviction for purposes of imposing a section 3804 mandatory minimum sentence passes constitutional muster. Consequently, the Commonwealth is no longer barred from presenting evidence of a prior ARD at a sentencing hearing. 2 Therefore, the Commonwealth can no longer demonstrate that its prosecution has been ____________________________________________ 2 We note that this case has a unique procedural posture due to the pre-trial nature of the underlying order denying the motion in limine. When the Commonwealth’s appeal was filed, Chichkin was still controlling, and, thus, the Commonwealth’s case was substantially handicapped by the trial court’s denial of its motion in limine because trial was the only time the Commonwealth could present evidence of Urrutia’s 2011 DUI and ARD acceptance. See Chichkin, supra. However, during the pendency of this appeal, Chichkin was overruled by Moroz and now the Commonwealth is expressly permitted to present a prior ARD at the sentencing hearing to enhance mandatory minimums of second or subsequent DUI convictions. See Moroz, supra. Thus, the Commonwealth’s case is no longer substantially handicapped, and the appeal can no longer be taken as of right. See Pa.R.A.P. 311(d). -2- J-S24025-22 terminated or substantially handicapped, as required by Pa.R.A.P. 311(d). 3 Accordingly, we lack jurisdiction to entertain this interlocutory appeal, and we quash. Appeal quashed. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 11/18/2022 ____________________________________________ 3 Appellate review of any court order is a jurisdictional question. See Commonwealth v. Parker, 173 A.3d 294, 296 (Pa. Super. 2017). We may raise the issue of jurisdiction sua sponte. See Commonwealth v. Yarris, 731 A.2d 581, 587 (Pa. 1999). -3-	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487742/	J-S16018-22 2022 PA Super 195 COMMONWEALTH OF PENNSYLVANIA : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : JOHN WILLIAM COLLINS : : Appellant : No. 1419 MDA 2021 Appeal from the Judgment of Sentence Entered September 9, 2021 In the Court of Common Pleas of Huntingdon County Criminal Division at No(s): CP-31-CR-0000227-2020 BEFORE: PANELLA, P.J., KUNSELMAN, J., and COLINS, J.* OPINION BY COLINS, J.: FILED: NOVEMBER 18, 2022 John William Collins appeals from the judgment of sentence of 15 days’ incarceration and a fine of $600 after his non-jury conviction on two counts of harassment.1 Upon careful review, we affirm. This case involves a “wanted poster” and five letters that Collins authored and distributed through the United States Postal Service. The poster identifies the “wanted” man as Alan Hoffman, “an individual with whom [Collins] has apparently had a long-running dispute.” Trial Court Opinion, 1/5/22, at 2. The trial court described the poster, letters, and facts of this case as follows: ____________________________________________ * Retired Senior Judge assigned to the Superior Court. 1 See 18 Pa.C.S. § 2709(a)(3). J-S16018-22 The posters were copies of the same document . . . on letter-size paper, featuring a copy of Mr. Hoffman’s mug shot and basic booking information for a January 26, 2018, arrest for controlled substance DUI, next to which had been written: “I crossed a Billy goat with a pig. What did you get? See for yourself; it’s got a goat face and smells like a pig. $500.00 reward to capture and put in a cage. Call nearest police agency for reward. Trying to impersonate a human being.” The letters were copies of the same package of documents, consisting of: (1) a handwritten note stating the following: “Alan Goat-Face Hoffman, [street address] Three Springs, PA 17264 drives a yellow [car, which] is same color as he is.”; and (2) five copies of a page from Mr. Hoffman’s Bedford County Court of Common Pleas Court Summary. * * * The matter came before this Court for a bench trial on September 8, 2021 . . . The Commonwealth’s first witness was April Snyder, who, in late February of 2020, was employed as a clerk at the United States Post Office in Three Springs Borough, Huntingdon County, Pennsylvania. She was familiar with [Collins] as a customer at that location. Ms. Snyder initially received a report from one of her mail carriers that someone had put “flyers” in approximately 15 mailboxes along the mail carrier’s route. The mail carrier removed the “flyers” from the mailboxes and brought them to Ms. Snyder. [She] identified the “flyers” found by the mail carrier as being copies of the poster. Based on other information provided by the mail carrier, Ms. Snyder had reason to suspect [Collins] had placed the posters in the mailboxes, but she had no direct evidence. That changed a few days later when Ms. Snyder personally witnessed [Collins] enter the Three Springs Post Office and post something on the bulletin board. She went out to investigate, saw that it was another copy of the poster, and immediately took the poster down and threw it in the trash. A few days after that, [Collins] came in to mail five letters. He had Ms. Snyder weigh them, and all five required -2- J-S16018-22 additional postage, which he paid. One of the letters was addressed to Steve Heester, who has a P.O. Box at the Three Springs Post Office along with his wife, Dee Heester. Ms. Snyder processed the letter to Mr. Heester along with the other mail and placed it in the Heesters’ box. Dee Heester came in to get their mail later that same day, and the letter instantly caught her attention, prompting her to hold it up for Ms. Snyder’s attention and ask what it was. Mrs. Heester then opened it in front of Ms. Snyder, revealing the contents to be the letter. Ms. Snyder took possession of the letter from Mrs. Heester and intercepted the other four letters that had been mailed by [Collins] at the same time before they had been delivered. Subsequent inspection revealed each one to be a copy of the letter as well. Ms. Snyder reported the incidents to the U.S. Postal Inspection Service and the Pennsylvania State Police . . . State Trooper Christopher Bourne investigated the incidents. He initially interviewed Mrs. Heester in response to a complaint she filed regarding the letter. He further interviewed Ms. Snyder, who provided him with the letters and posters (along with additional information regarding [Collins’] distribution of the posters). Trooper Bourne confirmed that the copies of the letter and poster entered into evidence were the documents he received from Ms. Snyder . . . [Collins] elected to testify and admitted that he sent the letters and put the poster on the bulletin board at the Three Springs Post Office. He denied placing copies of the posters in mailboxes in the Three Springs Area, instead attempting to blame the mail carrier who discovered them. [He] testified that his intent was to alert people living in the immediate area that [Hoffman] had been convicted of DUI and was driving on a suspended license, so that if they saw [him] driving they would call the police. [Collins] had apparently contacted the State Police many times himself with respect to [Hoffman] driving with a suspended license and was frustrated that the State Police had not arrested [him]. However, [Collins] also testified he distributed the letters and posters in order to retaliate against [Hoffman] -3- J-S16018-22 for perceived wrongs [as the following exchange between Collins and his attorney revealed:] Q: I’m showing you [the poster]. Where did you get this document? A: It was from a website.4 4 [The poster] appears to have been obtained from a website titled “BUSTED NEWSPAPER,” which contains a searchable database of arrest mugshots and booking information. The information on the [poster] shows it was obtained from the “Bedford County Mugshots” subsection of the website, under the “Pennsylvania Mugshots” section. Q: And that photograph on there, what is important about that to you? A: Well, it identifies who he is and also identifies that he was in custody when the picture was taken. Q: Now there is some writing on there that you have already admitted you wrote on there? A: Yes. Q: It says, “I crossed a Billy goat with a pig. What do you get? See for yourself.” It’s got an arrow pointing over to his picture. “It’s got a goat face and smells like a pig. $500 reward to capture and put it in a cage. Call nearest police department for reward.” You wrote that on there yourself? A: Yes. Q: That didn’t come from that website? A: No, it did not. Q: Why did you put that on there? A: Well, [Hoffman] and his father both were going through the community spreading lies about me, and he was continuously bragging about the fact that he could get away with driving with no license. And I just felt somebody needed to let people know -4- J-S16018-22 what the truth was about him; that his license was suspended, and he is a menace to the area. Q: But to be fair, none of what you wrote on here talks about his suspended license, does it? A: No. Q: And you don’t actually believe that you crossed a Billy goat with a pig to produce that man, do you? A: No. Q: So, you’re not wanting anybody to believe that’s the truth? A: No. Q: Would it be fair to say you wrote all this down there because you wanted to get back at him for spreading lies? A: Yes. Q: You were upset, and you wanted to take him down a peg? A: Yes . . . Q: Is it fair to say then, kind of summarizing what you were saying, you were wanting to tell people about the fact that man is a criminal and is driving without a license? Is that what you’re saying? A: Yes. Q: But it’s also fair to say that you wanted to get back at him for spreading lies about you and flaunting the law? A: Yes. On cross-examination, [Collins] admitted that he had not included anything on the poster that indicated the reason he was distributing it was because [Hoffman] was driving without a license. -5- J-S16018-22 Id. at 2-7 (citations to record and some footnotes omitted; some formatting altered). At the close of the trial, the court convicted and sentenced Collins as related above. He sought post-sentence relief, which the trial court denied. This timely appeal followed. On appeal, Collins raises three issues. First, he argues that the Commonwealth could not prosecute his conduct under the First Amendment to the federal constitution. Second, he asserts the Commonwealth did not produce sufficient evidence to sustain the conviction, as a matter of law. In this regard, Collins argues the harassment statute demands proof that his poster and letters reached the intended victim of the harassment, i.e., Hoffman. Finally, Collins contends that his sentence was manifestly excessive as it was not based upon any real injury to Hoffman and instead was based upon the court’s frustration at the behavior of both Collins and Hoffman.2 ____________________________________________ 2 We derive these issues from the headings of the argument section of Collins’ brief rather than the statement of questions involved, the first two of which are largely duplicative of each other and do not correspond to the manner in which the argument is laid out in the brief. Compare Collins’ Brief at 7-8 with id. at 13-24. To the extent Collins appears to assert in his statement of questions that he is challenging the denial of his omnibus pretrial motion based upon the Commonwealth’s failure to present a prima facie case of harassment, this argument is waived as he fails to develop this issue beyond his mere recitation of the issue in the prefatory portion of his brief. See Wirth v. Commonwealth, 95 A.3d 822, 837 (Pa. 2014) (“[W]here an appellate brief fails to provide any discussion of a claim with citation to relevant authority or fails to develop the issue in any other meaningful fashion capable of review, that claim is waived.”) (citation omitted). -6- J-S16018-22 We address Collins’ sufficiency claim first, because, if he correctly interprets the Pennsylvania harassment statute, this Court can thereby avoid the constitutional question that he raises. Under the doctrine of constitutional avoidance, “we ought not to pass on questions of constitutionality . . . unless such adjudication is unavoidable.” Spector Motor Service v. McLaughlin, 323 U.S. 101, 105, (1944); see also In re Stevenson, 12 A.3d 273, 275 (Pa. 2010) (per curiam) (“[A]s a general matter, it is better to avoid constitutional questions if a non-constitutional ground for decision is available.”). Sufficiency of the Evidence Collins argues that, “[to] obtain a valid conviction against [him], the Commonwealth was required to prove that his statements were received by the alleged victim,” Hoffman. Collins’ Brief at 17. While Collins acknowledges that “communication of the statements to the alleged victim is not listed as an essential element of the statute charged here,” he asserts that because the Commonwealth alleged that Hoffman was the victim of Collins’ actions, “the Commonwealth was required to prove that [] Hoffman received [] Collins’[] statements.” Id. at 17-18. Because “Hoffman specifically testified [] that he did not receive” the poster or letters, the convictions must be overturned based upon insufficiency of the evidence. Id. at 18-19. A challenge to the sufficiency of the evidence presents a question of law and is subject to plenary review under a de novo standard. Commonwealth v. Smith, 234 A.3d 576, 581 (Pa. 2020). When reviewing the sufficiency of -7- J-S16018-22 the evidence, we must determine whether the evidence admitted at trial and all reasonable inferences drawn therefrom, viewed in the light most favorable to the Commonwealth, were sufficient to prove every element of the offense beyond a reasonable doubt. Id. “[T]he facts and circumstances established by the Commonwealth need not preclude every possibility of innocence.” Commonwealth v. Bowens, 265 A.3d 730, 740 (Pa. Super. 2021) (en banc) (citation omitted). “The Commonwealth may sustain its burden of proving every element of the crime beyond a reasonable doubt by means of wholly circumstantial evidence.” Id. (citation omitted). The issue before us is whether the harassment offense of which Collins was convicted, see 18 Pa.C.S. § 2709(a)(3), requires that the harassing, annoying, or alarming communication reach its victim in order for a crime to occur. The trial court concluded that no such connection to the intended victim is required. Trial Court Opinion, 1/5/22, at 8-11. Our review of the statute confirms the trial court’s interpretation.3 Under Section 2709(a)(3), the crime of harassment occurs “when, with intent to harass, annoy, or alarm another, the person . . . engages in a course ____________________________________________ 3 Because the trial court—the factfinder in this case—determined that Section 2709(a)(3) does not require proof of communication of a message directly to the individual being harassed and did not address whether the evidence at trial showed that Collins’ message was received by Hoffman, we likewise do not focus on the Commonwealth’s proof on this issue. However, we note that Hoffman did in fact testify that he ultimately discovered a different version of the poster on a bulletin board at another business in the community approximately one week after the incident at the post office. N.T., 9/8/21, at 40-42. -8- J-S16018-22 of conduct or repeatedly commits acts which serve no legitimate purpose.” 18 Pa.C.S. § 2709(a)(3). Unlike other subsections of the harassment statute, the text of subsection (a)(3) does not require the defendant to interact with his intended victim in order to commit the offense. For example, subsection (a)(1) applies if the defendant “strikes, shoves, kicks or otherwise subjects the other person to physical contact . . . .” 18 Pa.C.S. § 2709(a)(1) (emphasis added). Similarly, subsection (a)(2) applies when the defendant “follows the other person in or about a public place or places[.]” 18 Pa.C.S. § 2709(a)(2) (emphasis added). Finally, subsection (a)(4) applies if the defendant “communicates to . . . such other person any lewd, lascivious, threatening, or obscene words, language, drawings, or caricatures[.]” 18 Pa.C.S. § 2709(a)(4) (emphasis added). When “a section of a statute contains a given word, the omission of such word from a similar section of the statute shows a different legislative intent.” Commonwealth v. Berryman, 649 A.2d 961, 965 (Pa. Super. 1994) (en banc); see also Commonwealth v. Johnson, 125 A.3d 822, 830-31 (Pa. Super. 2015). “Where a legislature includes specific language in one section of a statute and excludes it from another, that language should not be implied where excluded.” Berryman, 649 A.2d at 965. Here, as the various subsections of statute demonstrate, the legislature could and did specify when the crime of harassment requires that the Commonwealth prove interaction between harasser and victim. Based upon the omission of any language in subsection (a)(3) requiring that the -9- J-S16018-22 defendant’s course of conduct or repeated acts actually be communicated to or reach “the other person,” we agree with the trial court’s interpretation of this subsection. Engagement between harasser and victim is not an element of Section 2709(a)(3). This Court “may not add provisions which the legislature has omitted unless the phrase is necessary to the construction of the statute.” Berryman, 649 A.2d at 965. Thus, Collins’ attempt to have this Court add a new element to the harassment statute fails. The General Assembly did not see fit to make interacting with the victim an element of Section 2709(a)(3). Therefore, it is not an element of that offense. Collins’ sufficiency argument affords him no appellate relief. First Amendment Collins next argues that his prosecution for distributing the poster and letters to third parties rather than to Hoffman himself violates the free speech clause of the First Amendment to the United States Constitution. 4 Collins asserts that criminal punishment based upon a defendant’s speech is permissible only when it falls within certain narrow exceptions to the First Amendment and here none of those exceptions are applicable. He contends ____________________________________________ 4 Collins’ brief does not contain any reference to the corresponding free speech right set forth in Article I, Section 7 of the Pennsylvania Constitution and therefore we solely address whether his conviction violates the First Amendment. See Pa. Const. Art I, § 7 (“The free communication of thoughts and opinions is one of the invaluable rights of man, and every citizen may freely speak, write and print on any subject, being responsible for the abuse of that liberty.”). - 10 - J-S16018-22 that the poster and letters were not obscene as they did not relate to sexual matters or appeal to prurient interests; he cannot be punished for defamation as Pennsylvania has chosen not to criminalize false statements in the harassment statute; and his comments regarding Hoffman were not “fighting words” as they were not the type of comments that would incite an immediate breach of the peace. As his conduct does not fall within any of the defined exceptions to free speech, Collins argues that “[t]o prosecute [him] for expressing his opinion of the alleged victim to third parties cannot be considered compatible with the freedom of expression safeguarded by our First Amendment.” Collins’ Brief at 16. When a defendant challenges the constitutionality of a criminal statute, he raises a pure question of law for which our standard of review is de novo, and our scope of review is plenary. Commonwealth v. Bradley, 232 A.3d 747, 756 (Pa. Super. 2020). [A]cts passed by the General Assembly are strongly presumed to be constitutional, including the manner in which they were passed. Accordingly, a statute will not be declared unconstitutional unless it clearly, palpably, and plainly violates the Constitution. If there is any doubt that a challenger has failed to reach this high burden, then that doubt must be resolved in favor of finding the statute constitutional. Id. (quoting Pennsylvania State Association of Jury Commissioners v. Commonwealth, 64 A.3d 611, 618 (Pa. 2013)). Collins does not argue here that Section 2709(a)(3) is unconstitutional on its face but rather challenges the application of the statute to his conduct - 11 - J-S16018-22 in this case. This Court has explained the distinction between facial and as- applied constitutional challenges to criminal statutes as follows: A facial attack tests a law’s constitutionality based on its text alone and does not consider the facts or circumstances of a particular case. An as-applied attack, in contrast, does not contend that a law is unconstitutional as written but that its application to a particular person under particular circumstances deprived that person of a constitutional right. A criminal defendant may seek to vacate his conviction by demonstrating a law’s facial or as- applied unconstitutionality. Id. at 757 (quoting Commonwealth v. Brown, 26 A.3d 485, 493 (Pa. Super. 2011)). In his brief, Collins relies on the seminal United States Supreme Court decision of Chaplinsky v. New Hampshire, 315 U.S. 568 (1942), in which the Court stated as follows: [I]t is well understood that the right of free speech is not absolute at all times and under all circumstances. There are certain well- defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane, the libelous, and the insulting or ‘fighting’ words—those which by their very utterance inflict injury or tend to incite an immediate breach of the peace. Id. at 571-72 (footnotes omitted). Collins then proceeds to address the three First Amendment exceptions recognized by Chaplinsky for obscenity, - 12 - J-S16018-22 criminal libel, and “fighting words,”5 arguing that his posters and letters fit none of these exceptions. Collins is correct that his speech does not fall within the identified exceptions to the First Amendment set forth in Chaplinsky: his posters and letters did not contain obscenities; no proof was offered that Collins’ description of Hoffman was untrue, and in any event, Section 2709(a)(3) does not target defamation; and his speech did not technically constitute “fighting words” as Hoffman was not present when Collins distributed the posters or letters were distributed and therefore it was unlikely that they would have led to “an immediate breach of the peace.” Chaplinsky, 315 U.S. at 572. However, the Chaplinsky exceptions do not purport to be an exhaustive list of the categories of speech that may be prosecuted under the First Amendment. Indeed, additional categories of offenses that criminalize speech—including solicitation, extortion, and other speech “integral to criminal conduct”—have been deemed to pass constitutional muster. See United States v. Williams, 553 U.S. 285, 297 (2008) (“Offers to engage in illegal transactions are categorically excluded from First Amendment protection.”); United States v. Hobgood, 868 F.3d 744, 748 (8th Cir. 2017) (explaining that extortionate speech is not protected by the First Amendment); In the ____________________________________________ 5 Regarding the other First Amendment exception noted in Chaplinsky for “profane . . . words,” the High Court has subsequently held that the use of profanity or vulgarities, by itself, is not punishable. See, e.g., Mahanoy Area School District v. B. L., 141 S.Ct. 2038, 2046-47 (2021); Cohen v. California, 403 U.S. 15, 25-26 (1971). - 13 - J-S16018-22 Interest of J.J.M., 265 A.3d 246, 254 (Pa. 2021) (noting that child pornography, fraud, true threats, and other speech “integral to criminal conduct” are not immunized from prosecution under the First Amendment) (citation omitted). In addition, our Supreme Court has upheld a criminal statute prohibiting harassment by unwanted, repeated communications in the face of a First Amendment challenge, noting that the state has a legitimate interest in preventing harassment and that the offense was directed at the harassing conduct rather than the speech itself. See Commonwealth v. Hendrickson, 724 A.2d 315, 318 (Pa. 1999) (rejecting facial overbreadth challenge to former 18 Pa.C.S. § 5504, now set forth in 18 Pa.C.S. § 2709(a)(4)-(7) and 18 Pa.C.S. § 2709.1). Viewed in its totality, we conclude that Collins’ public dissemination of the poster and letters falls outside the bounds of constitutionally protected speech. The communications were clearly intended to be insulting, attacking Hoffman’s appearance (“it’s got a goat face and smells like a pig”), parentage (stating that Hoffman was “a Billy goat [crossed] with a pig”), and character (stating that Hoffman was “yellow,” i.e., cowardly). Trial Court Opinion, 1/5/22, at 2. Hoffman is not, by any account, a public figure in the town in which he and Collins live, and the communications related to matters that are not of public concern. See Snyder v. Phelps, 562 U.S. 443, 452 (2011) (“Not all speech is of equal First Amendment importance, [] and where matters of purely private significance are at issue, First Amendment protections are often less rigorous.”) (brackets and quotation marks omitted). Although - 14 - J-S16018-22 Collins testified that he was publicizing Hoffman’s criminal record in order to advise the public that Hoffman was driving with a suspended license, his purpose was not evident on the face of the poster or letter and Collins admitted that his real motivation was to “get back at [Hoffman] for spreading lies about [him] and flaunting the law.” N.T., 9/9/21, at 13, 16-19, 22. There is no question that Collins’ publication of Hoffman’s criminal record and the insults directed towards him were part and parcel of the two men’s long- running feud. Also crucial in our determination that Collins was engaged in unprotected speech is the fact that he identified Hoffman’s home address and the make, year, color, and license plate number of Hoffman’s vehicle. The inclusion of this information in the posters and letters served no other apparent purpose than as an invitation for the public to confront Hoffman at his residence or during his travels in the community. See Frisby v. Schultz, 487 U.S. 474, 486 (1988) (upholding ban on residential picketing where picketing did not “seek to disseminate a message to the general public, but to intrude upon the targeted resident, and to do so in an especially offensive way”). The belligerent nature of the communication was only accentuated by the juxtaposition of Hoffman’s mug shot photograph with Old West-style “wanted poster” language, with an offer of a “$500.00 reward to capture” Hoffman and “put [him] in a cage.” Trial Court Opinion, 1/5/22, at 2. Moreover, Collins did not simply resort to announcing his criticisms of Hoffman to passersby in a public forum, but he also directed his injurious message to - 15 - J-S16018-22 various unwilling and unsuspecting recipients through the United States Postal Service, at least one of whom submitted a complaint to law enforcement. N.T., 9/8/21, at 35; see Rowan v. United States Post Office Department, 397 U.S. 728, 737-38 (1970) (upholding federal statute that permits household to remove address from mailing lists and stating that “no one has a right to press even ‘good’ ideas on an unwilling recipient” through the mail). In sum, we conclude that Collins’ actions here fall outside the ambit of the protection of the First Amendment. The evidence at trial was clear that Collins’ poster and letters were not intended to advise the public of Hoffman’s potentially dangerous driving as a result of his DUI convictions nor did they contain an educational or symbolic message regarding the harm caused to society by drunk drivers. See Texas v. Johnson, 491 U.S. 397 (1989) (holding that government cannot criminalize symbolic speech or expressive conduct merely because it might prove controversial or lead to a breach of the peace). Instead, Collins’ speech was simply intended to shame and provoke Hoffman and direct the ire of the public on him based upon his status as an offender. That Collins’ speech was not communicated directly to Hoffman and did not result in a breach of the peace is not dispositive of our analysis, as it was only the intervention of post office personnel that prevented the flyer from being distributed widely throughout the small town in which the two men - 16 - J-S16018-22 lived, and such early action likely avoided further conflict between the two men.6 Accordingly, we reject Collins’ argument that his prosecution violated the free speech clause of the First Amendment. Sentence Collins finally argues that the sentence imposed by the trial court of 15 days’ imprisonment is manifestly excessive as “the only real injury was . . . in the nature of defamation of [Hoffman’s] character, rather than actual harm redressable by the criminal justice system.” Collins’ Brief at 20. Collins contends that the trial court’s comments at sentencing, including that the behavior of Collins and Hoffman was “petty grade school nonsense,” N.T., 9/9/21, at 30, were evidence that the sentence was based upon the trial court’s frustration and bias towards him rather than permissible sentencing factors. A challenge to the discretionary aspect of a sentence is not appealable as of right. Commonwealth v. Akhmedov, 216 A.3d 307, 328 (Pa. Super. 2019) (en banc). ____________________________________________ 6 As stated above, Hoffman testified that he did ultimately discover the flyer at another business in the community a week after the incident at the post office. N.T., 9/8/21, at 40-41. We further note that, while the exact nature of their interaction is unclear from the record, Collins and Hoffman were each charged with harassment based upon contact between the two prior to trial, despite the terms of Collins’ pre-trial release forbidding contact with Hoffman. N.T., 9/9/21, at 26; Trial Court Opinion, 1/5/22, at 13. - 17 - J-S16018-22 Rather, an appellant challenging the sentencing court’s discretion must invoke this Court’s jurisdiction by (1) filing a timely notice of appeal; (2) properly preserving the issue at sentencing or in a motion to reconsider and modify the sentence; (3) complying with Pa.R.A.P. 2119(f), which requires a separate section of the brief setting forth “a concise statement of the reasons relied upon for allowance of appeal with respect to the discretionary aspects of a sentence[;]” and (4) presenting a substantial question that the sentence appealed from is not appropriate under the Sentencing Code[.] Id. (citation omitted). Here, Collins has filed a timely notice of appeal, preserved his issue in a post-sentence motion, and complied with Rule 2119(f) by setting forth the basis for his allowance of appeal in a separate section of his brief. Therefore, we must determine whether Collins has raised a substantial question that warrants our review of his sentencing claim. A substantial question is present where the appellant advances an argument that the sentence was inconsistent with a specific provision of the Sentencing Code or contrary to the fundamental norms underlying the sentencing process. Id. Collins’ argument that his sentence was the product of trial court’s bias against him constitutes a substantial question. See Commonwealth v. Lucky, 229 A.3d 657, 664 (Pa. Super. 2020); Commonwealth v. Corley, 31 A.3d 293, 297 (Pa. Super. 2011). Our standard of review for challenges to the discretionary aspects of sentencing is as follows: Sentencing is a matter vested in the sound discretion of the sentencing judge. The standard employed when reviewing the discretionary aspects of sentencing is very narrow. We may reverse only if the sentencing court abused its discretion or - 18 - J-S16018-22 committed an error of law. A sentence will not be disturbed on appeal absent a manifest abuse of discretion. In this context, an abuse of discretion is not shown merely by an error in judgment. Rather, the appellant must establish, by reference to the record, that the sentencing court ignored or misapplied the law, exercised its judgment for reasons of partiality, prejudice, bias or ill will, or arrived at a manifestly unreasonable decision. Commonwealth v. Rosario, 248 A.3d 599, 613 (Pa. Super. 2021) (citation omitted). Furthermore, When imposing [a] sentence, a court is required to consider the particular circumstances of the offense and the character of the defendant. In considering these factors, the court should refer to the defendant’s prior criminal record, age, personal characteristics and potential for rehabilitation. Commonwealth v. Summers, 245 A.3d 686, 693 (Pa. Super. 2021) (citation omitted). “We must accord the sentencing court’s decision great weight because it was in the best position to review the defendant’s character, defiance or indifference, and the overall effect and nature of the crime.” Rosario, 248 A.3d at 613 (citation omitted). The 15-day term of incarceration imposed by the trial court was well within that permitted by law. Collins was convicted of two counts of harassment graded as summary offenses, each of which carried a maximum sentence of 90 days’ imprisonment. 18 Pa.C.S. § 1105, 2709(a)(3), (c)(1). Although Collins emphasizes that he had no prior record, the sentencing guidelines do not apply to summary offenses, see 204 Pa. Code § 303.1(a), and therefore provide no basis on which to conclude that the sentence constituted an abuse of discretion. - 19 - J-S16018-22 Furthermore, upon our review of the record, we fail to discern any evidence that the sentence imposed was based upon the trial court’s animus or bias towards Collins. In imposing the sentence, the trial court noted Collins’ conduct towards Hoffman as well as Collins’ lack of cooperation with the Pennsylvania State Police in refusing a request to avoid contact with Hoffman prior to trial. N.T., 9/9/21, at 30-31. In its opinion, the trial court emphasized that Collins refused to accept responsibility for his actions, his violation of the terms and conditions of bail while on pre-trial release by engaging in further harassment of Hoffman,7 and the unnecessarily protracted nature of the trial based upon Collins’ failure to appear on the first day of trial and his late arrival on the second day. Trial Court Opinion, 1/5/22, at 13; N.T., 9/8/21, at 1-2, 55; N.T., 9/9/21, at 1-4, 28-31. The nature of the offense, Collins’ character, his defiance of the requests of law enforcement to stay away from the victim, and his indifference to the effect of his crimes were proper factors on which ____________________________________________ 7 Collins asserts that the trial court’s imposition of a sentence of incarceration in part on his separate conviction before a magisterial district judgment of harassment towards Hoffman during the pendency of the case is an inappropriate basis for the sentence as the charge was withdrawn at the de novo trial. See Collins’ Brief at 23-24, Appendix; see also N.T., 9/9/21, at 26 (District Attorney noting that Collins and Hoffman had both been convicted of summary harassment after the charges were filed in the present case but prior to trial, although Collins intended to appeal to the court of common pleas). However, the trial court did not base its sentence explicitly on the fact of his conviction but rather cited it in its opinion merely as evidence of Collins’ violation of the terms of his pre-trial release, see Trial Court Opinion, 1/5/22, at 13, and, in any event, the charges were not withdrawn until after Collins was sentenced in the instant matter and the certified record was transferred to this Court for the instant appeal. - 20 - J-S16018-22 the trial court based the sentence. See Rosario, 248 A.3d at 613; Summers, 245 A.3d at 693. While Collins focuses in his brief on the trial court’s statement that Collins and Hoffman were engaged in “petty grade school nonsense,” N.T., 9/9/21, at 30, we do not find this description to be inapt nor does it show the type of hostility towards Collins that is characteristic of the types of cases where we have vacated a sentence based upon bias or animus against the defendant. Cf. Lucky, 229 A.3d at 665-70 (vacating sentence where trial judge increased defendant’s sentence for a technical probation violation to the maximum sentence after becoming frustrated with him during sentencing and expressed hostility toward district attorney’s office when it advocated a lesser sentence); Commonwealth v. Williams, 69 A.3d 735, 744-49 (Pa. Super. 2013) (vacating sentence of approximately 24 to 48 years for bias where trial judge made unsupported characterizations of the defendant as a “pathological liar” and “classic sociopath” and indicated that he was judging the defendant based on her gender). Moreover, despite Collins’ assertion that he was punished for both his own and Hoffman’s conduct, the trial court clearly distinguished Collins’ actions from those of Hoffman and emphasized that the sentence was being imposed on Collins alone. See N.T., 9/9/21, at 31 (“I’m not saying Alan Hoffman is any better than you. But you’re the one on trial, and you’re the one that I’m sentencing.”). - 21 - J-S16018-22 Therefore, we conclude that the trial court’s sentence was not based upon bias towards Collins and he is not entitled to relief on his discretionary sentencing claim. Judgment of sentence affirmed. President Judge Panella joins this Opinion. Judge Kunselman files a Dissenting Opinion. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 11/18/2022 - 22 -	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487744/	J-S23043-22 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 COMMONWEALTH OF PENNSYLVANIA : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : : v. : : : JONATHAN ANTONIO CAMACHO : No. 100 MDA 2022 Appeal from the Order Entered December 15, 2021 In the Court of Common Pleas of York County Criminal Division at No(s): CP-67-CR-0003420-2021 COMMONWEALTH OF PENNSYLVANIA : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : : v. : : : SHARAYA NICOLE JONES : No. 101 MDA 2022 Appeal from the Order Entered December 15, 2021 In the Court of Common Pleas of York County Criminal Division at No(s): CP-67-CR-0003911-2021 BEFORE: STABILE, J., McLAUGHLIN, J., and COLINS, J. MEMORANDUM BY COLINS, J.: FILED: NOVEMBER 18, 2022 In this consolidated case, the Commonwealth appeals from the orders that granted the suppression motions of both Jonathan Antonio Camacho and Sharaya Nicole Jones. On appeal, the Commonwealth chiefly contends that the lower court erred in granting the appellees’ suppression motions because ____________________________________________  Retired Senior Judge assigned to the Superior Court. J-S23043-22 the affidavit of probable cause utilized in obtaining the search warrant contained legally sufficient personal observations of contraband. Specifically, the affidavit incorporated information from a police officer who, based on his training and experience, saw Camacho possess and smoke marijuana and then go into the residence that was the subject of the search warrant. We reverse the at-issue orders and remand for further proceedings. Following the execution of the search warrant at 520 South Queen Street in York, Pennsylvania, Camacho was charged with possession with intent to deliver cocaine, possession of a small amount of marijuana, and conspiracy to commit possession with intent to deliver cocaine. 1 Similarly, Jones’s charges included possession with intent to deliver cocaine and conspiracy to commit possession with intent to deliver cocaine.2 After both appellees filed their suppression motions, contending that the affidavit supporting the search warrant lacked probable cause, the court held a suppression hearing. Ultimately, the court granted both motions to suppress because, in conducting an inquiry limited to the four-corners of the affidavit of probable cause, it determined, inter alia, there to be no sufficient nexus between the allegations asserted in the affidavit and the residence that was thereafter searched. See Order, dated 12/15/21. The affiant’s name is Detective Vincent Monte, who, according to the ____________________________________________ 1See 35 P.S. § 780-113(a)(30); 35 P.S. 780-113(a)(31), and 18 Pa.C.S.A. § 903(a)(1), respectively. 2 See 35 P.S. § 780-113(a)(30); and 18 Pa.C.S.A. § 903(a)(1), respectively. -2- J-S23043-22 affidavit, had been employed by the York City Police Department for ten years, performing hundreds of drug investigations in that span of time. The affidavit of probable cause states: Within the last month this officer received neighborhood complaints of a light skinned heavy set [male] suspected of selling drugs from 520 South Queen Street in York City. The complaints referenced various people meeting the male after he exited 520 South Queen Street. The male suspect would do a hand-to-hand transaction with the people he met then he would return to 520 South Queen Street. The male suspect was observed holding/count[ing] money after doing a hand-to-hand with the people that approached him. From surveillance on 520 South Queen Street over the last month I identified the male subject as Jonathan Camacho . . . . Camacho is known to me through multiple prior felony and misdemeanor drug investigations. Camacho is currently on York County Probation for a drug violation. I also discovered through Pennsylvania JNET that Sharaya Jones … has a listed address of 520 South Queen Street in York City. I know from prior investigations involving Camacho that Jones and Camacho are in a relationship together and have children together. While I conducted surveillance on 520 South Queen Street, and within the last 72 hours, I observed Camacho exit the rear of the residence and have in his possession a clear plastic sandwich bag containing a green leafy substance that I know based on my training and experience to be marijuana ([S]chedule I). Pennsylvania Medical Marijuana (MMJ) has rules for the original packaging of medical marijuana to include that it must be kept in the original package in which it is dispensed. The bag I observed in Camacho’s possession did not have any labels/markings on it to indicate that it was medical marijuana. I watched Camacho take marijuana from the clear plastic bag and roll it into a cigar wrapper. Camacho placed the clear bag that still contained marijuana into his pocket, and then began to smoke the marijuana cigar. Medical [m]arijuana is not permitted to be -3- J-S23043-22 smoked/consumed in cigar/cigarette form in Pennsylvania. After lighting and smoking the marijuana cigar Camacho went back inside 520 South Queen Street with the bag of marijuana still in his pocket. Camacho was convicted/plead[ed] guilty to felony drug offenses in York County in 2011, 2018, and 2019 all for crack cocaine ([S]chedule II). Based on the information above I respectively request a search warrant be issued for 520 South Queen Street York City Pennsylvania to search for additional quantities of illegal marijuana and illegal narcotics as well as materials and items used to package, sell and possess illegal narcotics, such as plastic bags and scales; records or other documentation of past narcotics transactions, and cell phones utilized to facilitate narcotics transactions. I am also requesting that all persons present during the service of the warrant be searched. I am requesting all persons to be searched based on this officer’s ten years of experience that narcotics can be easily concealed on a person and later destroyed. Affidavit of Probable Cause, dated 6/27/21. The text of the search warrant identified that it primarily sought seizure of marijuana “along with any other drugs or paraphernalia, packaging materials, scales, business records, official funds, firearms, ammunition, identification and other documentary and physical items relating to the possession, distribution and sale of narcotic and dangerous drugs.” Application for Search Warrant and Authorization, dated 6/27/21. In reaching its conclusion that suppression was warranted, the lower court found that [b]ased on the totality of the circumstances, there were not enough facts to support probable cause to search the Queen Street house. There was no police corroboration of the neighborhood complaints regarding confirmation of identify or -4- J-S23043-22 hand-to-hand transactions by [Camacho] The [a]ffidavit did not contain any information regarding length of stay by [Camacho] at the Queen Street house. The amount of marijuana, only seen stored on [Camacho’s] person, was not enough to show more would be present within the Queen Street house. Therefore, [the lower] court granted [appellees’ motions], finding there was not probable cause within the four concerns of the [a]ffidavit for the search and seizure inside the Queen Street house. Suppression Court Opinion, dated 3/25/22, at 8-9 (citations omitted). Correspondingly, the Commonwealth filed a timely notice of appeal, inclusive of a certification pursuant to Pennsylvania Rule of Appellate Procedure 311(d) stating that the lower court’s determination would terminate or substantially handicap the prosecution of the appellees. Thereafter, the relevant parties complied with their obligations under Pennsylvania Rule of Appellate Procedure 1925. As such, this matter is ripe for review. On appeal, the Commonwealth asks: 1. Did the suppression court err in finding that the application for a search warrant lacked probable cause within its four corners where the officer directly observed Camacho visibly enter into the location to be searched while in possession of marijuana and marijuana paraphernalia, and, in addition to the officer’s own observations, the officer had received numerous reports of Camacho engaging in hand-to-hand transactions outside the residence to be searched? Commonwealth’s Brief, at 4. As this is a Commonwealth appeal from a suppression order, we apply the corresponding standard of review: [We] consider only the evidence from the defendant's witnesses together with the evidence of the prosecution that, when read in the context of the entire record, remains uncontradicted. As long as there is some evidence to support them, we are bound by the -5- J-S23043-22 suppression court's findings of fact. Most importantly, we are not at liberty to reject a finding of fact which is based on credibility. Commonwealth v. Goldsborough, 31 A.3d 299, 305 (Pa. Super. 2011) (citation omitted) (bracket in original). However, the lower court’s conclusions of law are not binding on this Court, as it is this Court’s duty to ascertain whether the lower court correctly applied the law to the facts. See Commonwealth v. Keller, 823 A.2d 1004, 1008 (Pa. Super. 2003) (citation omitted). While our review is limited to the evidentiary record that was created at the suppression hearing, see In re L.J., 79 A.3d 1073, 1087 (Pa. 2013), it does not appear that anything evidentiary other than the affidavit of probable cause and search warrant were provided to the suppression court in the present matter. The burden is on the affiant to demonstrate that the warrant’s execution will likely lead to the recovery of contraband or evidence of a crime. See Commonwealth v. Janda, 14 A.3d 147, 157 (Pa. Super. 2011) (citation omitted). Relatedly, in making its probable cause determination for the issuance of a warrant, a magistrate may not consider any evidence outside the four-corners of the affidavit. See Commonwealth v. Sharp, 683 A.2d 1219, 1223 (Pa. Super. 1996) (citations omitted). As to what constitutes probable cause: The legal principles applicable to a review of the sufficiency of probable cause affidavits are well settled. Before an issuing authority may issue a constitutionally valid search warrant, he or she must be furnished with information sufficient to persuade a reasonable person that probable cause exists to conduct a search. -6- J-S23043-22 The standard for evaluating a search warrant is a ‘totality of the circumstances' test as set forth in Illinois v. Gates, 462 U.S. 213, … (1983), and adopted in Commonwealth v. Gray, 503 A.2d 921 ([Pa.] 1985). A magistrate is to make a ‘practical, common sense decision whether, given all the circumstances set forth in the affidavit before him, including the ‘veracity’ and ‘basis of knowledge’ of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place.' The information offered to establish probable cause must be viewed in a common sense, non-technical manner. Probable cause is based on a finding of the probability, not a prima facie showing of criminal activity, and deference is to be accorded a magistrate's finding of probable cause. Commonwealth v. Ryerson, 817 A.2d 510, 513-14 (Pa. Super. 2003) (citation and internal parallel citations omitted). “The duty of a court reviewing [a magistrate’s decision] is to ensure that the magistrate had a substantial basis for concluding that probable cause existed.” Commonwealth v. Gindlesperger, 706 A.2d 1216, 1219 (Pa. Super. 1997); see also Commonwealth v. Leed, 186 A.3d 405, 413 (Pa. 2018) (requiring deference from reviewing courts when analyzing a magistrate’s probable cause determination). Here, the Commonwealth concedes that “the seemingly anonymous reports of drug sales out of the residence [described in the affidavit] would not have provided the requisite probable cause by themselves[.]” Commonwealth’s Brief, at 12-13. Despite that concession, “Detective Monte saw … Camacho exit the residence, roll and smoke a marijuana cigar, return a portion of marijuana still in the bag to his pocket, and reenter the residence.” Id., at 11; see also 35 P.S. § 10231.304(b)(1) (establishing that it is unlawful -7- J-S23043-22 to smoke medical marijuana); Commonwealth v. Barr, 266 A.3d 25, 41 (Pa. 2021) (stating that the Controlled Substance, Drug, Device and Cosmetic Act, see 35 P.S. §§ 780-101-133, “still renders possession of marijuana illegal for those not qualified under the [Medical Marijuana Act, see 35 P.S. §§ 10231.101-10231.2110]”). When distilled down, the question before this Court is whether an affiant’s personal observation of a specific illicit act, i.e., the unlawful possession and attendant consumption of marijuana, can provide probable cause in support of a search warrant, when juxtaposed against these particular facts. As noted, supra, the Detective described Camacho’s movements as having exited the at-issue residence and then, after smoking marijuana in short proximity, returning to the inside of the same residence with some amount of contraband still on him. Moreover, this observation occurred within seventy-two hours of when the search warrant was sought. We agree with the premise that “[p]robable cause to believe that a man has committed a crime on the street does not necessarily give rise to probable cause to search his home.” Commonwealth v. Kline, 335 A.2d 361, 364 (Pa. Super. 1975) (emphasis added). In addition, the affidavit of probable cause must establish a “substantial nexus” between the criminal activity or contraband sought and the place to be searched. Id. However, as evidenced by the text of the affidavit of probable cause, Detective Monte, through knowledge obtained in his prior investigations, -8- J-S23043-22 asserted that Camacho had more than a fleeting or temporary connection with the 520 South Queen Street property. Specifically, the Detective wrote that Camacho and Jones, the individual whose name was attributable to the property, were in a relationship together and had children together, implying, at a minimum, continual contacts with the location. The lower court, in its opinion, emphasizes that after the execution of the search warrant, Camacho was only found possessing a small amount of marijuana. See Suppression Court Opinion, dated 3/25/22, at 8. It then states that the marijuana was always on Camacho’s person and “is never attributed to the house.” Id. (citation to suppression hearing omitted). The court concludes: “[b]ecause the small amount of marijuana was in [Camacho’s] pocket, the belief more would be in the place to be searched, the Queen Street house, is not reasonable.” Id. (citation omitted). Stated differently, “[t]he amount of marijuana, only seen stored on [Camacho’s] person, was not enough to show more would be present within the Queen Street house.” Id., at 9. We disagree with the lower court’s analysis of the reasonability underpinning the magistrate’s probable cause determination. “The totality of the circumstances test is satisfied where the police officers have a reasonable belief that the items to be seized are related to criminal conduct and that those items are presently located in the place to be searched.” Commonwealth v. Waltson, 724 A..2d 289, 292 (Pa. 1998) (citation omitted). Furthermore, in -9- J-S23043-22 defining what can be searched, “the scope of a search warrant is limited by the items to be seized and where they may be found and not to a particular location within those premises.” Id. (citation omitted). Here, Detective Monte saw Camacho exit the South Queen Street residence, noted that he possessed and consumed a leafy green substance known to the Detective as marijuana that, in its observed form, is illegal, and then watched Camacho proceed back into the same residence with the contraband. Based on these events, it was reasonable for the Detective to believe that, at a minimum, marijuana and related materials would be found inside of the South Queen Street property given the high likelihood that the marijuana baggie would not remain in Camacho’s pocket in perpetuity. In other words, because the Detective emphasized Camacho’s connection to the South Queen Street location and sought the search warrant within seventy- two hours of observing him smoking the marijuana, it was reasonable to think that, based on the unbroken chain of Camacho reentering the house with contraband on him, some amount of marijuana would be found there. While the lower court correctly states that the unverified and unsubstantiated community complaints against the South Queen Street house that were described in the affidavit of probable cause would not have been sufficient, Detective Monte’s personal observation of criminal activity in the form of Camacho possessing an illegal substance, when considered in tandem with his movements directly back into the residence, meant that there was a - 10 - J-S23043-22 nexus between the illegal activity witnessed outside and the place that was requested to be searched as well as a corresponding high probability criminal activity, in the form of contraband, would be discovered via the execution of that search warrant. Governed by our standard of review, which requires both deference towards the magistrate as well as consideration of the affidavit of probable cause in a common sense and nontechnical manner, the magistrate’s finding of probable cause was supported by the affidavit’s contents, and it was not in error for the search warrant to be issued. Accordingly, we determine that the lower court erred in granting the appellees’ motions to suppress. As such, the orders of the lower court that suppressed the evidence uncovered from the search are reversed, and the matter is remanded for further proceedings. Orders reversed. Cases remanded. Jurisdiction relinquished. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 11/18/2022 - 11 -	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494116/	MEMORANDUM OPINION AND ORDER DOUGLAS O. TICE JR., Chief Judge. This matter came before the Court for trial on November 16, 2006, the Honorable Douglas O. Tice Jr., Chief Judge, presiding. Owaiian M. Jones, Esq., appeared on behalf of the plaintiff, Barbara Triplett; Rand L. Gelber appeared on behalf of the defendant, Educational Credit Management Corporation (“ECMC”); and Robert P. McIntosh, Assistant United States Attorney, appeared on behalf of the defendant, United States Department of Education. Upon consideration of the testimony and exhibits admitted into evidence at trial, the Court enters the following Findings of Fact and Conclusions of Law pursuant to Rule 7052(a) of the Federal Rules of Bankruptcy Procedure.1 For the reasons stated below, the Court denies a discharge of the student loans based on the debtor’s failure to establish an undue hardship under 11 U.S.C. § 523(a)(8). FINDINGS OF FACT The debtor is a 46-year-old female with no dependents. She received a General Educational Development (GED) diploma. Her post high school education consists of receiving a certificate as a computer operator. She received additional post-high school, college-level education that did not result in her receiving a degree. In connection with obtaining her education, the debtor incurred debts for student loans, which she seeks in this matter to have discharged as an undue hardship. As of June 22, 2006, the unpaid balance owed to the Department of Education is $24,283.26. As of October 24, 2006, the unpaid balance owed to ECMC is $9,135.35. The debtor has worked various jobs over the years, such as a grocery store cashier, restaurant waitress, commercial truck driver, receptionist and work team member for a regional commercial trucking company (Payne Trucking), and assistant store manager for a convenience store. As recently as January 2005, she was self-employed in home cleaning. Her employment with Payne Trucking, from May 1999 through June 2000, required her to perform such tasks as entering fuel purchases into the company computer, processing paper work involving bills of lading, truck driver logs, and receipts for fuel, tolls, and other expenses, as well as duties in handling payroll and dealing with customers. In that position, as with other jobs, she met her employer’s expectations. Indeed, she continually was given additional responsibility while at Payne. Ms. Triplett alleges that she suffers from bi-polar disorder. She states that she was diagnosed with the disorder in 7421994, and that she deteriorated to her present condition in about 1998. She maintained gainful employment after 1998 until 2005. She currently supports herself solely on disability income from Social Security. Her monthly payment is $712.00, with which she maintains a minimal standard of living. No expert testimony or other corroborating evidence was introduced beyond the debtor’s personal assessment of her condition. No expert testimony or evidence was submitted to establish the nature of the debtor’s alleged disabilities, the extent to which any disabilities may currently prevent her from maintaining employment, or the likely prognosis for the debtor’s condition over a substantial portion of the loan repayment period. The debtor voluntarily resigned from her employment with Payne Trucking in 2000, and subsequently with RaceTrac convenience store. She was not terminated by her employer, and was meeting her employer’s expectations at the time she quit. She was working 40 or more hours per week in both jobs at the time she quit, arriving to work on time, and not taking unusual amounts of sick leave. Since quitting her jobs, she has not made any efforts to find other employment. She has not completed any employment applications, attended any job fairs, consulted any employment services, updated her resume, contacted any potential employers, or made any phone calls. She states that she quit her job with Payne Trucking (as with other jobs) because of her “uncontrollable crying.” However, her first-line supervisor with Payne has no recollection of having seen the debtor cry while on the job. The debtor testified that, since receiving her discharge in bankruptcy, she has not incurred any new debt, and that she has paid all of her bills in full when due. The debtor made eight monthly payments to the Department of Education, each in the amount of $50.00, beginning on August 5, 2004 and ending on March 7, 2005. No other evidence of additional payments was introduced. CONCLUSIONS OF LAW Student loans are generally non-dis-chargeable. However, the exception to this rule allows student loans to be discharged when forcing repayment would impose an undue hardship on the debtor. 11 U.S.C. § 523(a)(8). Bankruptcy Code § 523 provides, in relevant part: (a) A discharge under section 727 ... of this title does not discharge an individual debtor from any debt— ❖ ❖ 'A' (8) for an educational ... loan made, insured or guaranteed by a governmental unit ..., unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor’s dependents.... 11 U.S.C. § 523 (emphasis added). Because Section 523(a)(8) creates a presumption of nondischargeability, the burden of establishing that student loans are dischargeable falls upon the debtor. United States v. Wood, 925 F.2d 1580, 1583 (7th Cir.1991). Congress did not define “undue hardship” in the Bankruptcy Code, see Brunner v. New York State Higher Educ. Servs. Corp., 46 B.R. 752, 753 (S.D.N.Y.1985), aff'd 831 F.2d 395 (2nd Cir.1987), choosing instead to leave the interpretation of the phrase to the courts. See Kapinos v. Graduate Loan Ctr., 243 B.R. 271, 274 (W.D.Va.2000). The Fourth Circuit has adopted the three part test set out by the Second Circuit in Brunner v. New York State Higher Educ. Servs. Corp., 831 F.2d 395, 396 (2nd Cir.1987), for 743determining whether an “undue burden” exists within the meaning of § 523. See Ekenasi v. Education Resources Institute, 325 F.3d 541, 546 (4th Cir.2003) (Chapter 13); Educational Credit Management Corporation v. Frushour (In re Frushour), 433 F.3d 393, 400 (4th Cir.2005) (Chapter 7). The Brunner test requires the debtor to prove: (1) that [she] cannot maintain a minimal standard of living for [her]self and [her] dependent[ ], based upon [her] current income and expenses, if [she] is required to repay the student loans; (2) that additional circumstances indicate that [her] inability to so do is likely to exist for a significant portion of the repayment period of the student loans; and (3) that [she] has made good faith efforts to repay the loans. Frushour, 433 F.3d at 400 (citing Brunner, 831 F.2d at 396). The evidence shows that the debtor maintains a minimal standard of living based solely on the monthly Social Security disability income she receives. She asserts that she would not be able to make payments on her educational loans if she obtained employment. Regardless of whether her assertion is correct, the debt- or has failed to show additional circumstances establishing that any current inability to pay will continue. The second prong of the Brunner test, that additional circumstances exist indicating that debt- or’s present inability to repay the student loans is likely to persist for significant portion of loan repayment period, requires a “certainty of hopelessness,” rather than simply a present inability to pay. In re O’Hearn, 339 F.3d 559, 564 (7th Cir.2003). See In re Weir, 296 B.R. 710, 716 (Bankr.E.D.Va.2002) (Undue hardship is not based on a present inability to pay but rather upon a “certainty of hopelessness that future payments cannot be made”) (quoting In re Love, 33 B.R. 753, 755 (Bankr.E.D.Va.1983)). The “certainty of hopelessness” in making future payments is “based on the ‘presence of “unique” or “extraordinary” circumstances which would render it unlikely that the debtor ever would be able to honor his [or her] obligations.’ ” In re Malloy, 155 B.R. 940, 945 fn. 5 (E.D.Va.1993) (quoting In re Ballard, 60 B.R. 673, 674-75 (Bankr.W.D.Va.1986)). Serious illness is generally recognized “as one of the most frequent bases for demonstrating unique or exceptional circumstances justifying a determination of undue hardship.” In re Hoskins, 292 B.R. 883, 887 (Bankr.C.D.Ill.2003) (citing Brunner); see In re Pace, 288 B.R. 788, 792 (Bankr.S.D.Ohio 2003) (“A significant focus regarding the undue hardship inquiry centers around medical conditions that are so serious, that they impair a debtor’s earning capacity for the duration of the repayment period”). The debtor has alleged that she suffers from a mental condition that makes it impossible for her to work. Consequently, in order to find that the second prong of the Brunner standard is satisfied, the Court must determine both that the debtor has a physical or mental condition that actually impairs her ability to work, and that the condition will likely persist for a significant portion of the repayment period of the student loans. In order to make these findings, it is necessary for the Court to have “substantial credible evidence” corroborating the debtor’s testimony. Swinney v. Academic Fin. Servs. (In re Swinney), 266 B.R. 800, 805 (Bankr.N.D.Ohio 2001). Supporting evidence does not necessarily have to consist of extensive expert testimony. Swinney, 266 B.R. at 805. Medical records, for example, may be sufficient. Hoskins, 292 B.R. at 888. However, where a claim for discharge 744based on undue hardship is based on a student loan debtor’s testimony, a court simply cannot make a discharge determination “without some corroboration of the medical conditions and how long they will persist.... The testimony of the Plaintiff alone is not sufficient.” Pace, 288 B.R. at 793 (emphasis added). The debtor failed to meet this prong. No expert testimony or medical records were admitted to corroborate the debtor’s assertions. Since there is no evidence to indicate that any disability is sufficiently serious to prevent the debtor from working — the debtor worked for approximately seven years after 1998 (the date she designated as the point her condition deteriorated) — and no evidence to indicate how long any condition will persist, the debtor failed to meet her burden. In order to be entitled to a hardship discharge under the Brunner standard, the debtor must demonstrate that she has made a good faith effort to repay the loans. This includes a showing of: (1) efforts to maximize the debtor’s income; (2) efforts to minimize the debt- or’s expenses; and (3) attempts to make payments on the loans, or negotiate deferrals, forebearanees, or other reasonable, affordable or flexible repayment plans. See In re Lohr, 252 B.R. 84, 88 (Bankr.E.D.Va.2000). In this case, the debtor has not made efforts to secure employment since 2005, and therefore, has failed to maximize her income. In addition, ECMC presented the Debtor with various repayment options under the William D. Ford Loan Consolidation Program, including the Income Contingent Repayment Plan (ICRP), whose payment is based, in part, upon a borrower’s income, and the Debtor declined the program despite an ICRP payment of zero (0.00) per month, based upon her income. Her failure to consider such a program is further evidence of her failure to show good faith under the third prong of Brunner. CONCLUSION For the foregoing reasons, the debtor’s request for a discharge of her student loans based on undue hardship is denied. Therefore, IT IS ORDERED that Debtor’s Complaint to Determine Dischargeability of Student Loan is hereby DISMISSED. . Any finding of fact more properly characterized as a conclusion of law, and any conclusion of law more properly deemed a finding of fact, should be so construed.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494117/	MEMORANDUM ON MOTIONS FOR SUMMARY JUDGMENT DAVID T. STOSBERG, Bankruptcy Judge. This proceeding comes before the Court on the cross motions for summary judgment filed by the debtor / plaintiff (“Plaintiff’) and the Defendants, the Estate of Ira Lee Roberts (“Roberts Estate”) and James A. Wethington, Individually and as Commonwealth’s Attorney for the Sixth (6th) Judicial District of Kentucky (“Wethington”). Upon consideration of the summary judgment motions and the supporting documentation, the Court holds that summary judgment should be granted in favor of the Defendants. I. STATEMENT OF JURISDICTION This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334, and it is a core proceeding under 28 U.S.C. § 157(b)(2)(K). Venue of this adversary proceeding in this Court is proper under 28 U.S.C. § 1409(a), as this proceeding arises in and relates to the Plaintiffs Chapter 7 case pending in this District. II. SUMMARY JUDGMENT STANDARD The Court can render summary judgment only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Summary judgment is appropriate when the record taken as a whole, and viewed in the light most favorable to the nonmoving party, could not lead a rational trier of fact to find for the nonmoving party. Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing First Nat’l Bank v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). The party seeking summary judgment bears the burden initially of showing that there is no genuine issue of material fact. Celotex v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party may rely on the pleadings, depositions, answers to interrogatories, and admissions on file. Id. When a party fails to make a showing sufficient to establish the existence of an element essential to that party’s case, summary judgment should be 758granted. Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 805, 119 S.Ct. 1597, 143 L.Ed.2d 966 (1999) (quoting Celotex, 477 U.S. at 322, 106 S.Ct. 2548). Once the moving party has made a proper motion for summary judgment, the non-moving party may not rely upon mere allegations to rebut the motion, but instead must set forth specific facts demonstrating that a genuine issue of material fact exists for trial. Fed.R.Civ.P. 56(e). The nonmoving party must produce more than a “mere scintilla” of evidence to support its claim, once a properly supported motion for summary judgment has been made. III. FACTS On September 17, 2004 the Plaintiff herein, in anticipation of criminal indictment for embezzlement, borrowed $29,000.00 from Ira Lee Roberts, now deceased. The Plaintiff used the proceeds of the loan to repay funds previously embezzled. Notwithstanding the repayment of the funds, the Plaintiff was indicted by a Grand Jury in Daviess County, Kentucky. On or about October 6, 2005, the Plaintiff was found guilty on two counts of embezzlement. On November 4, 2005 the Plaintiff was sentenced to two years imprisonment for each of the two counts of embezzlement. On or about February 21, 2006 Judge Henry M. Griffin, III, Daviess Circuit Court Judge, entered an order suspending the Plaintiffs sentence. The order suspending sentence included a restitution order requiring the Plaintiff to make restitution of $29,000.00, plus interest, to the Roberts Estate. On or about April 2006 the Plaintiff moved the State Court to set aside the restitution order, which was overruled on May 23, 2006. The state court ruled that the restitution ordered constituted money that was borrowed to make restitution on the fraudulent earned benefits of the crime. The state court further found that the restitution was a material part of the probation order and “connected to the criminal act....” To avoid revocation of his probation, the Plaintiff made payments pursuant to the state court’s restitution order. The Plaintiff filed a petition for Chapter 7 bankruptcy on October 16, 2005, and obtained his discharge on April 11, 2006. The Plaintiff included the debt to the Roberts Estate on his bankruptcy petition schedules. No party filed an action objecting to the dischargeability of any of the debts listed by the Plaintiff. IV. LEGAL DISCUSSION As stated above, under Rule 56(c) of the Federal Rules of Civil Procedure and Rule 7056 of the Federal Rules of Bankruptcy Procedure, a party is entitled to judgment only if that party can establish that there is no genuine issue as to any material fact and that the party is entitled to judgment as a matter of law. The Court must determine not whether it thinks the evidence unmistakably favors one side or the other, but whether a fair minded trier of fact could return a verdict for a nonmoving party on the evidence presented. Anderson v. Liberty Lobby, 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The Plaintiff seeks a judgment finding the Roberts Estate and Wethington in contempt for violating 11 U.S.C. § 524(a) (the discharge injunction). The Plaintiff also seeks an order enjoining these defendants from further actions to collect a discharged debt. The Plaintiff contends that since the Roberts Estate was not the victim of his crime, the order requiring repayment of the debt is not in actuality a restitution order, notwithstanding its characterization. Instead, the Plaintiff argues, it is an order requiring the payment of a discharged debt in violation of 11 U.S.C. § 524, and 759since the debt owed to the Roberts Estate was not excepted from discharge, any action to obtain repayment of that debt constitutes a violation of the discharge injunction. Finally, the Plaintiff contends that characterizing the repayment order as a restitution order is simply an “end run” around the discharge injunction. As an initial matter, the Court recites the general rule that there is a “fundamental policy against federal interference with state criminal prosecutions.” Younger v. Harris, 401 U.S. 37, 46, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). As the Supreme Court held, “the right to formulate and enforce penal sanctions is an important aspect of the sovereignty retained by the States.” Id. This Court is very reluctant to go against this policy and declines to do so, absent the most compelling of circumstances. Generally speaking, restitution obligations imposed as probation conditions are not dischargeable in bankruptcy proceedings. Kelly v. Robinson, 479 U.S. 36, 107 S.Ct. 353, 93 L.Ed.2d 216 (1986). As stated by the Supreme Court: The criminal justice system is not operated primarily for the benefit of victims, but for the benefit of society as a whole. Thus, it is concerned not only with punishing the offender, but also with rehabilitating him. Although restitution does resemble a judgment “for the benefit of’ the victim, the context in which it is imposed undermines that conclusion. The victim has no control over the amount of restitution awarded or over the decision to award restitution. Moreover, the decision to impose restitution generally does not turn on the victim’s injury, but on the penal goals of the State and the situation of the defendant. Id. at 52, 107 S.Ct. 353. Under this analysis, it makes no difference if the restitution payments go directly to the “victim of the crime,” or to a third party, who may also have been injured by the debtor’s actions. Under Kelly, a restitution order that directs payments to an entity other than a governmental unit is still non-dischargeable under Section 523(a)(7) so long as the restitution is designed to benefit “society as a whole” and furthers “the penal goals of the State and the situation of the defendant”. 479 U.S. at 52, 107 S.Ct. 353. Even though restitution may be calculated by reference to the amount of harm the offender has caused, the Supreme Court in Kelly held that restitution constitutes a “fine, penalty, or forfeiture” within the meaning of § 523(a)(7). Id. There can be no question here that the restitution order in the present case was issued to benefit “society as a whole” and was clearly part of the “penal goals” of the state court judge. To conclude, this debt was not discharged in the Plaintiffs bankruptcy and thus an attempt to collect this debt cannot be considered a violation of the discharge in junction. The Plaintiff makes several arguments as to how and why the state court erred in awarding restitution in this nature. Presumably these same arguments were made at the motion to set aside the restitution order heard before the state court. In any event, this Court is not an appellate court for the state circuit court. Any problems or errors the state court may have made with respect to the issuance of these restitution orders should have been pursued in the state court appellate system. Having said that, this Court would concur wholeheartedly with the conclusions and decisions of the state court. It is clear that the Plaintiff attempted to avoid the consequences of his criminal actions by borrowing money from Ira Lee Roberts to repay the embezzled funds. When this plan failed to work as hoped, he filed for bankruptcy to discharge *760the debt incurred to Roberts. Thus, while the Plaintiff is correct that the Roberts Estate is not the victim of his crime per se, it is clear it is the party who suffered financially from the Plaintiffs criminal conduct. Consequently, it would seem altogether appropriate for the state court to order any restitution be paid to the truly aggrieved party. Finally, the Court notes that the Plaintiff is free not to pay this debt. He is under no legal obligation to pay the restitution orders. Of course, choosing not to pay the restitution has consequences as well. That is, however, a matter between the state court and the Plaintiff. The Court shall enter an Order this same date in accordance with the holding of this Memorandum.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494118/	DECISION AND ORDER RICHARD L. SPEER, Bankruptcy Judge. This cause comes before the Court after a Trial on the Plaintiffs Complaint to Determine Dischargeability, and the Defendant’s counterclaim thereto. At the conclusion of the Trial, the Court took the matter under advisement so as to afford the opportunity to fully consider the evidence in light of the arguments presented by the Parties. The Court has now had this opportunity, and finds, for the reasons set forth herein, that the Plaintiffs Complaint has merit, and accordingly, the claim held by the Plaintiff against the Defendant is hereby found to be a nondischargeable debt. FACTS Beginning in 2000, the Defendant/Debt- or, Wendy Sharp (hereinafter the “Debt- or”) became a member of the Midwest Community Federal Credit Union, the Plaintiff/Creditor in this action (hereinafter the “Creditor”). During the course of their relationship, the Debtor made to the Creditor multiple requests for the extension of credit, with at least two of these requests being unsuccessful. First, in 2003, the Debtor was denied, on an unsecured basis, a loan request of $3,107.85; then in 2004, the Debtor was again denied a loan request of $32,500.00 for the purchase of real property. The basis for both of these denials of credit: the Debtor’s other obligations were too excessive. (PI. Ex. I & J). In March of 2005, the Debtor again sought an extension of credit from the Creditor for the purchase of a second automobile. In applying for the credit, the Debtor completed an “indirect loan application” at the dealership selling the vehicle, which was then forwarded to the Creditor. (Pl.Ex. A). This loan applica764tion, which contained details concerning the sources of the Debtor’s income, was largely consistent with her past two loan requests which had been denied. For example, in all the loan applications, the Debtor’s gross monthly salary was listed at around $3,000.00. However, as it concerned the Debtor’s income, there did exist this one notable exception: in the “indirect loan application” for the vehicle, unlike in the prior two loan applications which had been denied, the Debtor claimed also having a monthly rental income of $1,850.00. At the Trial, the Debtor related that this rental income had yet to be realized, but was included in the loan application at the direction of a salesperson. After receiving a copy of the Debtor’s most recent pay stub, the Creditor promptly approved the loan, finalizing the contractual paperwork with the Debtor on March 4, 2005. (Pl.Ex. G). The amount financed with the Creditor was $19,506.25, which took a security interest in the vehicle. However, just one week later, on March 11, the Debtor sought out the advice of legal counsel regarding the possibility of filing for bankruptcy relief. Six days later, on March 17, the Debtor filed in this Court a petition under Chapter 7 of the United States Bankruptcy Code. In her petition, the $1,850.00 in rental income, as just set forth in the loan application, was not disclosed. After filing for bankruptcy relief, the Debtor made one payment to the Creditor under the terms of the Parties’ agreement. Thereafter, the Debtor surrendered her vehicle to the Creditor. By all accounts the Debtor was cooperative in this process. On the vehicle loan, there presently exists a deficiency of $4,755.42, plus accruing interest and costs. The instant action seeks a determination that this obligation was incurred through fraud, and therefore is a nondischargeable debt. DISCUSSION Proceedings, such as this, to determine the dischargeability of a particular debt are deemed core proceedings over which this Court has been conferred with subject matter jurisdiction to enter final orders and judgments. 28 U.S.C. § 157(b)(2)(I); 28 U.S.C. § 1334. The Creditor’s complaint to determine dischargeability is brought pursuant 11 U.S.C. § 523(a)(2) which provides: (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 — ■ (2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by- (A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition; (B) use of a statement in writing— (i) that is materially false; (ii) respecting the debtor’s or an insider’s financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive[.] This provision implements the long-standing bankruptcy policy that only those debts which are honestly incurred are entitled to the benefits of a bankruptcy discharge. Mack v. Mills (In re Mills), 345 B.R. 598, 603 (Bankr.N.D.Ohio 2006). Against the Creditor’s action under § 523(a)(2), the Debtor filed a counterclaim pursuant to paragraph (d) of § 523, 765which requires the court to award costs, including attorney fees, in favor of the debtor if it is found that the position of the creditor was not “substantially justified.” As set forth above, the statutory structure of § 523(a)(2) makes a distinction between two types of fraudulent acts: those in writing “respecting the debtor’s or an insider’s financial condition,” and all other types of fraud. Subparagraph (B) of § 523(a)(2) governs statements regarding the debtor’s financial condition; while sub-paragraph (A), by explicitly excluding a statement of that type, operates congruously to encompass, by default, all other types of fraud. First Safety Fund Nat’l Bank v. Valley (In re Valley), 21 B.R. 674, 678 (Bankr.D.Mass.1982). At issue in this matter is subparagraph (B): a written statement respecting the Debtor’s financial condition. At the Trial held in this matter, the Creditor’s case-in-chief centered on the Debtor falsely setting forth in her written loan application that she received a monthly rental income of $1,850.00. For purposes of § 523(a)(2)(B), a written statement respecting a debtor’s financial condition may be described as one representing the debtor’s net worth, overall financial health, or ability to generate income so as to enable an accurate assessment to be made of the debtor’s creditworthiness. In re Joelson, 427 F.3d 700 (10th Cir.2005). Although not all loan applications will qualify, the Debtor’s fits squarely within this description; it contained detailed information concerning the sources of the Debtor’s income, thereby enabling an assessment of her creditworthiness. Once § 523(a)(2)(B) is shown to be applicable — that the alleged fraud arose as the result of a written statement respecting the debtor’s financial condition — a finding of nondischargeability hinges on the applicability of these three additional elements: (1) the existence of a materially false statement; (2) the creditor’s reasonable reliance on the false statement; and (3) the debtor’s intent to deceive by making the statement. Thorp Credit, Inc. v. Carmen (In re Carmen), 723 F.2d 16, 16-17 (6th Cir.1983). On the applicability of these three elements, the Creditor in this matter, as the movant, bears the burden to establish their existence by at least a preponderance of the evidence. See, e.g., In re McFarland, 84 F.3d 943, 946 (7th Cir.1996). The first element, a materially false statement, has been described as one that paints a substantially inaccurate picture of a debtor’s financial condition by misrepresenting information of the type which normally would affect the decision to grant credit. Blue Ridge Bank and Trust v. Cascio (In re Cascio), 318 B.R. 567, 573 (Bankr.D.Kan.2004); First Federal Sav. And Loan Assc. v. Kelley (In re Kelley), 163 B.R. 27, 35 (Bankr.E.D.N.Y.1993). At the Trial, the Debtor acknowledged that, at the time she completed her loan application, the $1,850.00 in monthly rental income she listed in the application was inaccurate, having yet to commence and, in fact, never commencing. This inaccuracy constitutes well over 50% of the $3,000.00 the Debtor disclosed as her monthly salary, otherwise her primary source of income.1 In looking to whether a statement is substantially inaccurate, the size of the discrepancy is a key factor, and becomes a dispositive consideration in this 766matter given the breadth of the inaccurate statement provided by the Debtor. Enterprise National Bank of Atlanta v. Jones (In re Jones), 197 B.R. 949, 960 (Bankr.M.D.Ga.1996) (“Materiality is determined in part by the size of the discrepancy.”). There is also no arguable doubt that the Debtor’s misstatement was a deciding factor in the Creditor’s decision to extend credit. Not only did a representative of the Creditor testify to that effect, the objective facts presented to the Court at the Trial bear this out; the Creditor had denied the Debtor credit on the past two occasions when the rental income was not listed. However, while the Creditor’s utilization of the materially false statement evidences actual reliance thereon, § 523(a)(2)(B)(iii), setting forth the second element supra, then goes a step further. Not only must the creditor actually rely on the false statement, but such reliance must be reasonable. This is in contrast to the level of reliance required under subparagraph (A) which adopts the lower, common-law standard of justifiable reliance. See, e.g., Redmond v. Finch (In re Finch), 289 B.R. 638, 644 fn. 4 (Bankr.S.D.Ohio 2003). The pertinent question in this regard is objective: did the creditor exercise the degree of care which would be exercised by a reasonably cautious person in the same business transaction under similar circumstances? Insurance Co. of N. Am. v. Cohn (In re Cohn), 54 F.3d 1108, 1117 (3rd Cir.1995); Signal Finance of Ohio v. Icsman (In re Icsman), 64 B.R. 58, 62 (Bankr.N.D.Ohio 1986). To this question, the Debtor, while strenuously denying that she actually intended to mislead, argued that the Creditor’s failure to verify the veracity of her rental income, despite the importance it admittedly attached to its existence, demonstrates that the Creditor failed to exercise the necessary degree of care for § 523(a)(2)(B)(iii)’s requirement of reasonable reliance. Against this, the Creditor called this Court’s attention to the measures it took to establish the Debtor’s creditworthiness — for example, obtaining an updated copy of the Debtor’s credit report and requiring the Debtor to produce a recent pay stub so as to corroborate her representation in the credit application regarding her salary. The Creditor also pointed to the relationship of trust which had been established between the Parties during the years they did business together. On the point made by the Debtor, whether a creditor makes an independent inquiry to verify the veracity of a statement upon which it relies to extend credit, while undoubtedly important, is not dispositive on the issue of the reasonableness of a creditor’s reliance. Bank of Washington v. Hunter (In re Hunter), 120 B.R. 117, 119 (Bankr.E.D.Mo.1990). Instead, in this Circuit, the question of reasonable reliance is to be answered by “considering all the facts and circumstances of the case, including the size of the loan.” Martin v. Bank of Germantown (In re Martin), 761 F.2d 1163, 1166-67 (6th Cir.1985). Other relevant considerations in this respect, and ones which align themselves with the points made by the Creditor, may include: (1) whether the creditor followed its established lending procedure in approving the loan; (2) whether the creditor used outside sources to verify the financial information provided by the debt- or, such as by obtaining a credit report; (3) whether the creditor had a previous relationship with the debtor; and (4) whether the writing contained any “red flags” that would have alerted the creditor of potential inaccuracies in the financial information provided. Id.; Agribank, 767FCB v. Gordon (In re Gordon), 277 B.R. 805, 810 (Bankr.M.D.Ga.2001). When these precautions are then combined with the nature and the character of the Parties’ transaction, things conclusively bend in the Creditor’s favor; at issue in this matter is a simple consumer loan involving a purchase money security interest. Furthermore, the measures taken by the Creditor, such as running a credit check and obtaining a copy of the Debtor’s pay stub, appear entirely reasonable in light of the two competing principles underlying the reasonable reliance requirement of § 523(a)(2) (B) (iii). The general policy that courts should exercise caution when second guessing the business judgment of a creditor in making loans and setting loan policy, versus the concern that creditors should not be able to shield themselves from the negative consequences that flow from facts that were readily ascertainable. Id. The final element in controversy, contained in clause (iv) of § 523(a)(2)(B), is whether the Debtor caused to be made or published the false statement in writing with the intent to deceive. The level of intent required here is that of actual fraud, which means that the debtor, by some direct and active operation of the mind, undertook to deceive; this is opposed to constructive fraud which arises by operation of law irrespective of intent, Accord United States v. Hercules, Inc., 929 F.Supp. 1418, 1426 (D.Utah 1996). Human nature, however, being what it is, actual intent is only rarely ascertainable by direct evidence as a debtor is unlikely to ever admit acting in a fraudulent manner. Consequently, like with other matters where the debtor’s state of mind is placed at issue, the use of circumstantial is usually necessary to determine whether the debtor acted with the requisite intent to deceive. See, e.g., Pittsburgh Police Fed. Cr. Union v. Lundy (In re Lundy), 165 B.R. 157, 163 (Bankr.W.D.Pa.1994). In assessing circumstantial evidence of intent, courts have traditionally relied upon certain indicia, commonly called “badges of fraud.” Barthlow v. More (In re More), 138 B.R. 102, 105 (Bankr.M.D.Fla.1992). One such indicium unique to § 523(a)(2)(B) occurs when, as has already been established here, the existence of the other elements of the statute are shown.2 Even this aside, a traditional indicium of fraud, and one whose existence looms large in this case, is the general chronology of the events and transactions under inquiry. See, e.g., Id. In an action brought under § 523(a)(2), a focus of the general chronology of events will often involve measuring the length of time between these two events: the petition date and the date of the transaction in question. The longer the lapse of time between these two events, the less likely an inference of fraud will arise, with the converse also being true; the shorter the lapse of time, the more likely it will be that an inference of fraud will exist. Rust v. Tellam (In re 768Tellam), 323 B.R. 661, 665 (Bankr.N.D.Ohio 2005); Autotruck Fed. Cr. Union v. Donald (In re Donald), 26 B.R. 521 (Bankr.W.D.Ky.1983). See also 11 U.S.C. § 523(a)(2)(c) (establishing a presumption of fraud for certain types of transactions conducted in the time immediately preceding the petition date). Significantly, with respect to this measurement, it may be presumed that fraud exists — that is, a prima facie case for fraud will arise — when the interval of time between the transaction and the petition date are so close in proximity that the distinction between the two events becomes blurred, thereby causing them to appear to be apart of the same transaction. Accord In re Donald, 26 B.R. 521, 523 (Bankr.W.D.Ky.1983). In this matter, such a presumption necessarily arises, with not even two weeks separating the time between when the Debtor received the loan with the Creditor and the time in which she sought to escape her liability on the obligation by filing for bankruptcy. It is difficult to fathom a shorter duration of time. Yet, this window of time becomes shortened even further when it is considered that just one week after obtaining the loan, the Debtor first contemplated discharging the obligation through bankruptcy, this being demonstrated by the Debtor’s consultation with a bankruptcy attorney at that time. See In re Tellam, 323 B.R. at 665 (pointing out that a fraud’s proximity to the petition date will frequently take into account the time at which the debtor first sought out the advice of legal counsel). The indicia of fraud that exists in this case are also not confined solely to the chronology of events. Another strong indicium of fraud, and one also prominent in this matter, is motive. C & H Electrical v. Newell (In re Newell), 321 B.R. 885, 890-91 (Bankr.N.D.Ohio 2005). On her two most recent transactions with the Creditor, when no rental income was shown, the Debtor had been denied credit based upon a lack of sufficient income to service her present debt obligations. The Debtor, therefore, had to be fully cognizant of the fact that, without the inclusion of the rental income in her credit application, she would have most likely been again denied an extension of credit. Just as troubling, the Debtor, just after claiming the rental income in her credit application, failed to disclose it in her bankruptcy schedules. In re Bailey, 145 B.R. 919, (Bankr.N.D.Ill.1992) (marked differences in figures placed in financial statement and bankruptcy petition may raise an inference of fraud where they are completed in relative proximity to the other) While the Debtor ascribed this to a misunderstanding, believing that only “earned income” not “unearned income” needed to be disclosed in a bankruptcy petition, this is a distinction without a difference. Bankruptcy schedule I, entitled “Current Income of Individual Debtor(s)” specifically requires in line eight that the debtor disclose any income received from real property. Moreover, if the Debtor was in doubt about her statutory obligations, honesty is demonstrated through disclosure, not by making a unilateral assumption that information may be hidden. As this Court has previously observed: when in doubt, disclose. In re McVay, 345 B.R. 846, 850 (Bankr.N.D.Ohio 2006); United States Trustee v. Halishak (In re Halishak), 337 B.R. 620, 630 (Bankr.N.D.Ohio 2005). To explain the existence of these highly persuasive indicia of fraud, the Debtor relied primarily on the existence of an intervening event: that immediately after completing her credit application, her lessee, upon whom she based her rental income, unexpectedly decided not to rent her property. This explanation, however, lacks in 769credibility. In the short term, at least, other options besides bankruptcy must have been available; for example, there is no evidence that the Debtor, before filing bankruptcy, made any attempt to re-rent her rental property. In this way, bankruptcy has always been a measure of last resort. Matter of Smith, 848 F.2d 813 (7th Cir.1988). The Debtor’s justification also does not mesh with those facts and circumstances normally associated with an immediate need to seek bankruptcy relief, a prime example being the imminent foreclosure or repossession of one’s property. But even if the Debtor’s explanation is taken at face value, it simply leads to another quandary. As applied to § 523(a)(2)(B), a finding that a debtor had the specific intent to deceive is not absolutely necessary to sustain a finding of fraud. Instead, in In re Martin, the Sixth Circuit Court of Appeals held that a § 523(a)(2)(B) cause of action may be sustained by showing that “the debtor either intended to deceive ... or acted with gross recklessness ...'' 761 F.2d at 1167 (emphasis added). While the term gross recklessness is an enigmatic term, the Debtor’s cavalier attitude toward the Creditor surely qualifies — -with the Debtor having financed a nonessential second car, relying on income not received, but which, according to her, was needed to stave off an immediate bankruptcy. To be sure, there do exist a couple of overall mitigating factors. First, there is no dispute that the Debtor was cooperative with Creditor after filing for bankruptcy, even going so far as to make one payment on her obligation. Additionally, the Debt- or, as she contends, may have very well been directed by a salesperson to list the rental income. However, these points are of insufficient weight to tip the balance in the Debtor’s favor. Insofar as it concerns her cooperation, such conduct is expected when a debtor seeks bankruptcy relief. United States Trustee v. Halishak (In re Halishak), 337 B.R. 620, 624 (Bankr.N.D.Ohio 2005). See also 11 U.S.C. § 521(a)(3); FED.R.BANK.P 4002. Thus, it would be improper to ascribe much weight for the Debtor simply complying with her statutory duty. Moreover, it is apparent that the Debtor possesses a reasonable degree of financial acumen, — for example, working in the human resources department at a county hospital. Thus, even if directed by a salesperson to list her rental income in the credit application, the Debtor was still, in the end, fully responsible for her statements. Smith v. Cunningham (In re Cunningham), 163 B.R. 657, 660-61 (Bankr.D.Mass.1994). In summation, the Court finds that the Creditor has sustained its burden with respect to the statutory requirements of § 523(a)(2)(B). Resultantly, the claim held by the Creditor against the Debtor is, for purposes of bankruptcy law, a nondischargeable debt. Additionally, based upon this holding, the Debtor’s counterclaim against the Creditor under § 523(d) must be dismissed as a matter of law. Household Bank, N.A. v. Sales (In re Sales), 228 B.R. 748, 752 (10th Cir. BAP 1999) (consumer debt must be discharged to bring action under § 523(d)). In reaching the conclusions found herein, the Court has considered all of the evidence, exhibits and arguments of counsel, regardless of whether or not they are specifically referred to in this Decision. Accordingly, it is ORDERED that, pursuant to 11 U.S.C. § 523(a)(2)(B), the deficiency claim held by the Plaintiff/Creditor, Midwest Community Federal Credit Union, be, and is hereby, determined to be a NONDISCHARGEABLE DEBT. *770IT IS FURTHER ORDERED that the counterclaim of the Defendant/Debtor, Wendy Sharp, be, and is hereby, DISMISSED. . The Debtor’s loan application also disclosed that she received $56.66 per week for child-support. . Some courts have held that proof of the other elements under § 523(a)(2)(B) creates a presumption that the debtor made the statement with intent to deceive. Other courts have held that a court may infer fraudulent intent where the debtor knew or should have known of the falsity of his statement. IFG Leasing Co. v. Vavra (In re Harms), 53 B.R. 134, 141 (Bankr.D.Minn.1985) (discussing the different approaches). Yet, regardless of how it is posited, the fact that a debtor causes a materially false statement to be published may be used as an indicator that the debtor intended to defraud. Making a statement in writing necessarily involves a reflective mental process which would, as compared to fraudulent conduct in general, make it less likely that the material misstatement was simply the result of a mistake or inadvertence.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494119/	783 MEMORANDUM OPINION JAMES G. MIXON, Bankruptcy Judge. On July 27, 2006, Russell Glenn Hurst (“Debtor”) filed for relief under the provisions of Chapter 13 of the United States Bankruptcy Code. The schedules, prepared by Kathy A. Cruz, Attorney, list U.S. Bank as an unsecured, nonpriority creditor on Schedule F. The schedules state that U.S. Bank’s claim, incurred in 2004, is a purchase money debt in the amount of $35,265.00. Under the heading “remarks” the schedules state that “[t]he approximate amount owed is listed as authorized by the U.S. Court’s Administrative Office. Credit Service — disputed as to the amount of late fees, over limit fees, interest fees, late charges, or any other additional fees or charges.” On September 9, 2006, the Debtor commenced this adversary proceeding against U.S. Bank. The complaint alleges that U.S. Bank filed a proof of claim in the bankruptcy case on or about September 15, 2006, for $24,660.30, alleging that the claim was secured by a security interest in a 2005 Dodge truck. The complaint asks for “redress and damages” for U.S. Bank’s violation of the automatic stay pursuant to 11 U.S.C. § 362, alleging U.S. Bank filed a claim that was false because “the collateral forming the basis of the secured allegation is in, or was in possession, of the creditor and did not become part of the bankruptcy estate.... ” The complaint stated that the Debtor, as a result of the false claim, has suffered emotional distress, was deprived of his fresh start, and is entitled to actual damages of $5,000.00, costs and attorney’s fees. The complaint also seeks an injunction against U.S. Bank from “attempting to take further actions to collect this debt as a secured debt.” U.S. Bank filed a timely answer and, on October 18, 2006, filed a motion for summary judgment together with supporting exhibits and a brief. The Debtor timely responded to the motion for summary judgment and attached a supporting affidavit in opposition to the motion for summary judgment. A hearing on the motion for summary judgment was held in Hot Springs, Arkansas, on October 31, 2006, and the matter was taken under advisement. The proceeding before the Court is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B), and the Court may enter a final judgment in this case. The following shall constitute the Court’s findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052. I. Facts U.S. Bank’s affidavit in support of its motion for summary judgment explains the sequence of events leading to the filing of the adversary proceeding. These facts are not controverted by the Debtor in any coherent way. Prior to bankruptcy, a Dodge truck, U.S. Bank’s collateral, was repossessed on June 26, 2006. The truck was sold by U.S. Bank on July 26, 2006 for $11,000.00, leaving a deficiency claim of $25,327.74 including expenses and attorney’s fees. (Ex. B.) The Debtor filed his bankruptcy petition on July 27, 2006. On August 3, 2006, U.S. Bank sent a report of sale to the Debtor showing the proceeds of the sale and the balance due. (Ex. C.) U.S. Bank had no knowledge on August 3, 2006, that the Debtor had filed his petition for bankruptcy on July 27, 2006. (Ex. C.) U.S. Bank received notice of the filing of the bankruptcy sometime between August 4, 2006, and August 7, 2006. (Ex. A.) 784The affidavit of Maria Thompson states that she filed a proof of claim in the Debt- or’s bankruptcy on September 5, 2006, erroneously designating the claim as secured. In her affidavit, she acknowledged the claim should have been listed as unsecured. (Ex. E.) U.S. Bank filed an amended claim on October 3, 2006. (Ex. D.) The amended claim is listed as unsecured and is in the amount of $25,237.74. (Ex. D.) The original claim is not part of the record and it is unclear whether the original claim and the amended claim were in the same amount. The Debtor attached an affidavit to his response to the motion for summary judgment, which does not dispute any of U.S. Bank’s exhibits and affidavits. The Debt- or acknowledges receiving a deficiency notice from U.S. Bank, but states that the amounts on U.S. Bank’s claim do not match the amounts on the deficiency notice. The affidavit does not state how much the deficiency was. The Debtor’s affidavit also does not mention any emotional damage. The Debtor offers no affidavit or other evidence of damages. The Debtor’s affidavit concludes that he is confused by the figures in the two proofs of claim, and he would like the bank to explain “how much I really owe the bank.” II Summary Judgment Standard Summary judgment is appropriate when there is no genuine issue of material fact and the dispute may be decided solely on legal grounds. Iowa Coal Mining Co. v. Monroe County, 257 F.3d 846, 852 (8th Cir.2001); Fed.R.Civ.P. 56(c). The initial inquiry is whether there are genuine factual issues that can be properly resolved only by a finder of fact because they may reasonably be resolved in favor of either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden is on the moving party to set forth the basis of its motion. Donovan v. Harrah’s Maryland Heights Corp., 289 F.3d 527, 529 (8th Cir.2002) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). The Court must view all facts and inferences in the light most favorable to the nonmoving party. Donovan, 289 F.3d at 529 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). However, “[w]hen a motion for summary judgment is made and supported by affidavits, the party opposing the motion may not rest on the allegations in his pleadings but must resist the motion by setting forth specific facts that raise a genuine issue of fact for trial.” Scherr Const. Co. v. Greater Huron Dev. Corp., 700 F.2d 463, 465 (8th Cir.1983) (quoting Burst v. Adolph Coors Co., 650 F.2d 930, 932 (8th Cir.1981)). The party moving for summary judgment does not bear the burden of proof at trial; however, the party must demonstrate that there is an absence of evidence to support the nonmoving party’s case. Buck v. F.D.I.C., 75 F.3d 1285, 1289 (8th Cir.1996) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). “If the moving party satisfies this requirement, the burden shifts to the non-movant who must set forth specific facts showing that there is a genuine issue for trial.” Buck, 75 F.3d at 1289 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). To establish a genuine issue of fact sufficient to warrant trial, the non-moving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., 475 U.S. at 586, 106 S.Ct. 1348. Instead, the nonmoving party bears the bur*785den of setting forth specific facts showing there is a genuine issue for trial. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Ill Discussion The Debtor’s argument set out in his response is difficult to follow. The first four pages of the response contain a diatribe about the recent amendments to the Bankruptcy Code. The response then states, “[a]n adversary complaint was warranted and necessary due to the unexplained discrepancies in the proof of claim,” and a substantial portion of the response is addressed to this issue. The balance of the response is simply incoherent. It addresses various subjects such as the Debtor’s fee agreement, debt relief agencies, use of after-hour recording devices, residency requirement for claiming homestead, Arkansas usury law, U.S. Bank’s reservation in its pleadings to file a Rule 9011 complaint, and comments concerning the case of In re Dove-Nation, “which precludes counsel from filing an objection to a claim without concrete proof.” 318 B.R. 147 (8th Cir. BAP 2004). In short, the response establishes beyond any reasonable doubt that the adversary proceeding is frivolous. The Debtor does not and cannot make a valid argument that the filing of a proof of claim, even when incorrect, violates the automatic stay set out in 11 U.S.C. § 362. Therefore, the motion for summary judgment is granted in favor of the U.S. Bank and the complaint is dismissed. A separate judgment consistent with this Memorandum Opinion will be entered pursuant to Federal Rule of Bankruptcy Procedure 7052. IT IS SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494121/	ORDER ELIZABETH E. BROWN, Bankruptcy Judge. THIS MATTER comes before the Court on Plaintiffs’ motion for summary judgment. Plaintiffs commenced this adversary proceeding, seeking to except their judgment from discharge under 11 U.S.C. § 523(a)(4), on the basis that their debt arises from Ms. Sukut’s company’s nonpayment of employee benefits owed under a collective bargaining agreement. Plaintiffs contend that their prior federal court judgnent against the Defendant bars re-litigation of the underlying facts and compels summary judgment in their favor. The Court being otherwise advised in the premises hereby FINDS and CONCLUDES: I. Background and Procedural History Ms. Sukut allowed the Plaintiffs to obtain a default judgment against her in federal district court. She was an officer and owner of Metro Concrete Works, Inc. (“Metro”). Metro was contractually obligated to make employee benefit contributions on behalf of its employees as required by a collective bargaining agreement. When the company experienced financial difficulties, it failed to make all of the required contributions. As the trustees of the unpaid multi-employer benefit plans, Plaintiffs (the “Trustees”) filed suit against both Metro and Ms. Sukut. Among their claims, they alleged that Ms. Sukut, as a person in control of Metro, had breached a fiduciary duty that she owed under the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 (“ERISA”). When she failed to respond to the complaint, the district court entered a default against Ms. Sukut. The Trustees then filed a Motion for Default Judgment. She again did not respond. Before entering judgment, the court held an evidentiary hearing at which the Trustees offered documentary evidence and proffered the testimony of three witnesses. For reasons unclear to this Court, Ms. Sukut appeared at the hearing, but she did not meaningfully participate. The district court advised Ms. Sukut of her opportunity to participate: The Court: Ms. Sukut, you are allowed to put on any evidence you want to. In addition, you would be allowed to cross-examine Mr. Mustacchio, Ms. Brown or Mr. Needles — they’re here — if there are questions you want to ask them. Is there anything you’d like to — any evidence you’d like to present? Ms. Sukut: No. The Court: Okay. Anything else? Ms. Hawkins: I have nothing further, Your Honor. The Court: Ms. Sukut, anything else we should talk about this morning? Ms. Sukut: No. Transcript of Evidentiary Hearing on July 19, 2005, at 9 (attached as Exhibit 2 to Brief in Support of Plaintiffs’ Motion for 843Summary Judgment). This was the extent of her participation in the hearing and in the district court case. On August 2, 2005, Ms. Sukut filed bankruptcy. Unaware of the filing, on August 10, 2005, the district court entered a Recommendation of the United States Magistrate Judge (“Recommendation”), in which it made detailed findings of fact and conclusions of law concerning both Ms. Sukut’s liability and the amount of damages owed. The Recommendation advised the parties that they had ten days to file written objections pursuant to 28 U.S.C. § 636(b)(1)(C) and Fed.R.Civ.P. 72(b). Ms. Sukut did not file an objection. Technically, the Recommendation had entered post-petition and, therefore, violated the automatic stay. To cure this defect, the Trustees filed a motion for relief from stay to allow them to obtain a final judgment against Ms. Sukut in the district court action. Ms. Sukut did not contest the motion, and this Court granted it in due course. Before entering final judgment, the district court again scheduled a hearing to afford Ms. Sukut another opportunity to participate. It offered this additional opportunity “[bjecause there may be some uncertainty as to the procedural effect of the filing of the magistrate judge’s recommendation after the bankruptcy filing and because Susan Sukut is not represented by counsel in this case and may not understand the procedural requirements in this matter, including her opportunity to object to the recommendation.” Order For Hearing on Recommendation for Entry of Default Judgment issued October 18, 2005. Nevertheless, she did not appear. On November 3, 2005, the district court entered final judgment against Metro and Ms. Sukut, jointly and severally, in the total amount of $85,345.70.1 Plaintiffs contend in this adversary proceeding that collateral estoppel should bar re-litigation of the issues decided by the district court, which include Ms. Sukut’s status as an ERISA fiduciary, her breach of fiduciary duty under ERISA, and the amount of the Trustees’ damages. If the Court were to apply collateral estoppel to the district court judgment, the only issue remaining for this Court would be a legal determination as to whether her breach of fiduciary duty under ERISA constitutes sufficient grounds for non-dischargeability under 11 U.S.C. § 523(a)(4). In her cross motion, she argues that: (1) collateral estoppel does not bar relitigation of the issues decided by the district court; (2) she was not an ERISA fiduciary; and (3) even if Ms. Sukut was an ERISA fiduciary, she was not a fiduciary for purposes of Section 523(a)(4) of the Bankruptcy Code. This Court has held the other issues raised in Ms. Sukut’s cross motion for summary judgment in abeyance until it has ruled on the application of collateral estoppel. II. Discussion A. Standards for Granting Summary Judgment 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.” Fed.R.Civ.P. 56(c). In applying this stan844dard, the Court examines the factual record in the light most favorable to the nonmoving party. See Wolf v. Prudential Ins. Co. of Am., 50 F.3d 793, 796 (10th Cir.1995). B. Elements of Collateral Estoppel The bankruptcy court ultimately determines whether a debt is non-dis-chargeable under Section 523,2 but a prior court judgment may preclude the re-litigation of settled facts under the doctrine of collateral estoppel. Klemens v. Wallace (In re Wallace), 840 F.2d 762, 764-65 (10th Cir.1988). The preclusive effect given in federal court to a prior federal decision is a question of federal law. Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 507, 121 S.Ct. 1021, 149 L.Ed.2d 32 (2001). In Dodge v. Cotter Corp., 203 F.3d 1190 (10th Cir.2000), the Tenth Circuit has held that collateral estoppel applies to prevent relitigation of the issues decided in a federal court where: 1. the issue previously decided is identical with the one presented in the action in question, 2. the prior action has been finally adjudicated on the merits, 3. the party against whom the doctrine is invoked was a party, or in privity with a party, to the prior adjudication, and 4. the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action. Id. at 1197-98. Collateral estoppel “attaches only ‘[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment.’ ” Arizona v. California, 530 U.S. 392, 414, 120 S.Ct. 2304, 147 L.Ed.2d 374 (2000) (quoting Restatement (Second) of Judgments § 27, at 250 (1982)). C. Analysis This matter raises the question of whether the issues were “actually litigated.” The primary purpose of the doctrine of collateral estoppel is to “protect parties from multiple lawsuits, prevent the possibility of inconsistent decisions, and conserve judicial resources.” Hill v. Putvin (In re Putvin), 332 B.R. 619, 624-25 (10th Cir. BAP 2005). In the case of the classic default judgment, in which a court enters default against a party due to a failure to answer the complaint, neither party has borne the expense of discovery and litigation, beyond the initial filing of the complaint and the motion for a default judgment. No time is wasted preparing for trial and awaiting a decision. In considering the application of collateral estoppel, some courts acknowledge that a defendant may be focused on preparing for a future bankruptcy filing, assuming that any default judgment entered can be discharged through his bankruptcy. See Evans v. Dunston (In re Dunston), 146 B.R. 269 (D.Colo.1992). Once the defendant is faced with a non-dischargeability proceeding, he may then have sufficient motivation to defend against the charges. As a result, the federal courts have held, as a general rule, that a default judgment entered in a federal court will not support the application of collateral estoppel. See Arizona v. California, 530 U.S. 392, 414, 120 S.Ct. 2304, 147 L.Ed.2d 374 (2000); McCart v. Jordana (In re Jordana), 232 B.R. 469, 476 (10th Cir. BAP 1999) aff'd, No. 99-6194, 2000 WL 783401 845(10th Cir. June 20, 2000) (unpublished disposition); Restatement (Second) of Judgments § 27 cmt. 2 (1982). Several circuit courts, including the Tenth Circuit, have recognized an exception to this general rule “where the losing party has had a full and fair opportunity to participate in the previous litigation, but has engaged in serious obstructive conduct resulting in a default judgment.” In re Jordana, 2000 WL 783401, at 1; Wolstein v. Docteroff (In re Docteroff), 133 F.3d 210 (3d Cir.1997); Bush v. Balfour Beatty Bahamas, Ltd. (In re Bush), 62 F.3d 1319 (11th Cir.1995); FDIC v. Daily (In re Daily), 47 F.3d 365 (9th Cir.1995) (applying federal principles of collateral estoppel). See also Pahlavi v. Ansari (In re Ansari), 113 F.3d 17 (4th Cir.1997); Gober v. Terra + Corp. (In re Gober), 100 F.3d 1195 (5th Cir.1996) (applying state court principles of collateral estoppel). Whether a debtor’s participation is extensive or abusive enough to take the case out of the general rule requires the court to consider the facts and circumstances of the particular case. Predictably, the parties’ assessments of the facts and circumstances in this case differ considerably. Plaintiffs contend that this is not a classic case of default judgment in which the district court entered default due solely to Ms. Sukut’s failure to answer the complaint. While Plaintiffs do not allege that Ms. Sukut engaged in obstructive behavior, they contend that her refusal to participate, despite the numerous opportunities afforded to her, causes this default judgment to fall into the exception to the general rule. They point out her refusal to cross examine witnesses or offer testimony in the evidentiary hearing and her decisions to not submit supplemental briefing, to not object to the Recommendation, to not participate in the relief from stay hearing, and to not attend the district court’s hearing regarding the entry of final judgment. Ms. Sukut maintains that she did not participate in the district court extensively and, therefore, this is merely a classic default judgment that should not be given preclusive effect under the general federal rule. This Court is guided in its determination by an examination of the facts of the circuit court decisions referred to above. In Jordana, the debtor did not simply default at the outset of the litigation, but rather “significantly participated in the litigation and engaged in serious obstructive behavior for more than two years before the default judgment was entered as a sanction.” In re Jordana, 2000 WL 783401, at 2. The debtor in Jordana retained counsel, filed an answer, filed documents with the court, and refused to participate in discovery. His serious obstructive behavior included absconding with an original deposition transcript, refusing to cooperate in discovery, and failing to adhere to warnings from the district court. In Docteroff, the debtor filed an answer, noticed a deposition, engaged counsel, filed papers with the court, corresponded with opposing counsel, and then “decided to frustrate orderly litigation by willfully obstructing discovery.” In re Docteroff, 133 F.3d at 215. In Bush, the debtor actively participated in litigation for three years. He engaged counsel, filed an answer, and filed a response to opposing counsel’s motion for sanctions. He also “engaged in dilatory and deliberately obstructive conduct” by failing to appear at a deposition and at court hearings and by failing to cooperate in discovery. Bush, 62 F.3d at 1324. In Daily, the debtor “actively participated in the litigation, albeit obstructively, for two years before the judgment was entered against him.” Daily, 47 F.3d at 368. The debtor in Daily had engaged counsel and filed an answer. The court entered default judgment as a sanction for his refusal to 846participate in discovery. In Ansari, the state court entered default judgment against Ansari as a discovery sanction after multiple depositions had been taken, after many documents had been exchanged, and after many hearings had been conducted in which Ansari appeared either in person or by counsel. In re Ansari, 113 F.3d at 21. Plaintiffs rely on Pacific Energy & Minerals, Ltd. v. Austin (In re Austin), 93 B.R. 723 (Bankr.D.Colo.1988). In Austin, the debtor engaged counsel and filed an answer, a counterclaim and a motion to continue the trial prior to filing for bankruptcy protection. The bankruptcy court “designated opportunities to have the issues raised by the Plaintiff tried in state court” by entering an order granting relief from stay and an order of abstention. In re Austin, 93 B.R. at 729. At trial in the state court, the debtor consented to the entry of a default judgment against him. The Court acknowledges some similarities between Austin and this case. In both cases, the non-bankruptcy forum entered clear and certain findings. In both cases, the bankruptcy court granted relief from stay to allow the entry of a final judgment. In both cases, the debtor was afforded an evidentiary hearing before default entered. In spite of these similarities, the facts in Austin are very different. In Austin, the parties had completed all pleadings and discovery in the state court action. They had completed all pre-trial procedures and preparation before the default entered. The debtor extensively and significantly participated in the state court litigation. Ms. Sukut’s limited participation in district court stands in stark contrast. It also differs significantly from each of the circuit cases above, in which the courts affirmed the entry of a default judgment post-answer as a discovery sanction. The circuit courts found that the defendants had not only significantly participated in the litigation, but had also engaged in obstructive behavior in the discovery process. In this case, Ms. Sukut did not meaningfully participate in the prior federal action in any fashion, let alone in an obstructive manner. She never filed an answer or any other document, never retained counsel, and never participated in discovery. Her only participation was her appearance at the evidentiary hearing on the default judgment motion, at which she spoke no more than ten words. This is a case in which Ms. Sukut defaulted at the outset and gave up, allowing the judgment to be entered against her. By way of contrast, in this adversary, she has retained counsel and has filed both an answer and a cross motion for summary judgment. She appears motivated to defend in this nondischargeability action. III. Conclusion Based on the facts and circumstances of this case, construed in a light most favorable to the opposing party, the Court concludes that Ms. Sukut’s limited participation and non-obstructive behavior in the district court do not support the application of collateral estoppel. Accordingly, this Court ORDERS that Plaintiffs’ motion for summary judgment is DENIED. FURTHER ORDERS that a status conference shall be held at 10:00 a.m. on Thursday, September 21, 2006, in Courtroom F to consider how the parties wish to proceed in this matter, including a discovery and briefing schedule on the remaining issues raised in the Defendant’s cross motion for summary judgment. Parties wishing to appear by telephone shall call 720-904-7499 immediately before the scheduled time of the hearing. The Meeting I.D. for the conference call is 1122, followed by the # sign. Please state your *847name clearly. If the hearing has not yet begun, you will hear hold music. Please stay on the line until the court operator takes the roll call and the hearing begins. The Court will not contact parties by telephone. If a party has not called in to the conference line or is not present in court, it will be deemed a failure to appear. USE OF A CELLULAR TELEPHONE IS NOT PERMITTED AT THIS TIME DUE TO TECHNICAL DIFFICULTIES IT CREATES WITH THE COURT’S CONFERENCE CALL EQUIPMENT. PLEASE USE A LAND LINE. . The $85,345.70 is comprised of $32,945 for unpaid employee contributions, $23,573.36 for interest, $23,573.36 for an additional amount of interest in lieu of liquidated damages and $5,253.98 for attorneys' fees and costs. The Trustees have not claimed that the attorneys' fees and costs are nondischargeable, and accordingly, they are presently seeking a determination that only $80,091.72 of their total claim is nondischargeable. . All references to "Section” herein shall mean Title 11, United States Code, unless otherwise specifically noted.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494122/	OPINION AND ORDER MICHAEL J. KAPLAN, Bankruptcy Judge. Although the procedural posture of this complex multi-million dollar' case is far more complicated than the following statement thereof, the Court deems the matter before it to be this: Does a Chapter 7 Trustee get past a Rule 12(b)(1) Motion to Dismiss that is based on the governing Second Circuit case law of Wagoner and its progeny,1 simply by alleging that one or more specific partners of the Debtor LLP, who previously had chosen not to be involved in the Management Group of the firm, would now attest that if they had they been fully informed, four years ago, that what the LLP was transacting was wrongful and injurious to the creditors of the LLP, they would have stopped the transaction by any available means? This question must be answered in the negative. Partners who willingly placed management control in the hands of a managing group of partners may not become “innocent insiders” for purposes of the Wagoner Doctrine, after they have either availed themselves of the perceived “fruits” of the transaction or have abandoned the LLP without endeavoring to stop its wrongful conduct. Such a partner may not be presented by the Trustee as an “innocent insider” for Wagoner Doctrine purposes simply upon such partner’s present attestation of what he or she could have done and would have done had he or she been more involved in what the managing group was up to. As the Defendants have ably argued, a contrary decision would eviscerate the Wagoner Doctrine, 47because no such “remote” partner would ever fail to jump at the opportunity to attest that he or she would never have participated in or permitted the perpetration by the LLP of a fraud upon its creditors, had he or she been fully-informed. The Facts as Alleged by the Trustee for Purposes of this Motion2 The Chapter 7 Debtor was an LLP composed of over a hundred physicians and other medical care providers. The LLP was formed to enter a “requirements” contract by which the LLP would meet the patient care needs of a non-insider HMO— Excellus/Univera. The Contract was executed and performed and the LLP met the needs of the HMO for a while. Then there arose a dispute about reimbursement rates. The LLP sued the HMO in State Court, and the HMO later countersued over such issues as “continuity of patient care” under the public health laws. At some point in the midst of the dispute, the LLP retained the Defendants, an out-of-state law firm and a particular member thereof, to help it extricate itself from the contract with the HMO. What evolved was a strategy to essentially disassemble the LLP and let its partners go off on their own, unaffiliated with the LLP. (There originally were no contracts directly between the HMO and the individual partners.) Some partners did not agree with the strategy, and they signed individual contracts with the HMO, abandoning the LLP. All of the management group and all of the remaining non-managing partners, however, implemented or enjoyed the strategy, which involved fraudulent transfers to those partners, leaving the HMO, and perhaps as much as $5 million in other LLP debt, to pursue an empty shell that voluntarily filed Chapter 7 in January of 2003.3 This Adversary Proceeding is against the law firm that was employed by the LLP (and later by some of the individual partners) to carry out the strategy, and against one member of the law firm. Though disputed, it is assumed, for Rule 12(b) purposes, that the Trustee’s allegation that the Defendants formulated the strategy is true. Under the Wagoner Doctrine the Law Firm moves to dismiss Causes of Action that are rooted in “Malpractice,” “Breach of Fiduciary Duty,” “Aiding and Abetting ... Violation of Law and Misconduct,” “Faithless Servant Doctrine,” and “Punitive Damages.” As noted above, the procedural posture of this matter has been intentionally understated by this writer. (For example, the Trustee seeks leave to amend the Complaint and seeks leave to conduct discovery to defend the Rule 12(b) motion.) The Court is satisfied that even if the Trustee’s Complaint suffers no defects of specificity and even if the Trustee were permitted to amend the Complaint, and even if the Trustee were eventually to produce the particular “evidence” of the “innocent insiders” that he wishes to pro48duce, the outcome would be the same. He still would not be able to get past an eventual Wagoner-Doetrme Motion to Dismiss, even on a Summary Judgment Motion after discovery. WAGONER AND CERTAIN OF ITS PROGENY The Second Circuit’s Wagoner Doctrine addresses the question of standing when the plaintiff is the bankruptcy trustee and the defendant is a third party, rather than the debtor’s principals. Shearson Lehman Hutton, Inc. v. Wagoner, 944 F.2d 114, 118 (2d Cir.1991) (“In our analysis of the question [of standing], the ‘case or controversy’ requirement coincides with the scope of the powers the Bankruptcy Code gives a trustee, that is, if a trustee has no power to assert a claim because it is not one belonging to the bankrupt estate, then he also fails to meet the prudential limitation that the legal rights asserted must be his own.”) (citing Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975) (internal citations omitted)). The controversy is often framed in terms of a defendant’s Rule 12(b) motion to dismiss. E.g. Hirsch v. Arthur Andersen & Co. 72 F.3d 1085 (2d Cir.1995) (F.R.Civ.P.12(b)(6) motion); Wechsler v. Squadron, Ellenoff, Plesent & Sheinfeld, L.L.P., 212 B.R. 34 (S.D.N.Y.1997) (F.R.Civ.P.12(b)(l) motion). The inquiry begins in determining whether the trustee’s cause of action is grounded in what the third party defendant had allegedly done to injure the innocent debtor. Barnes v. Schatzkin, 215 A.D. 10, 212 N.Y.S. 536, 538 (N.Y.App.Div.1925) (“The trustee in bankruptcy has a right to sue for anything that the bankrupt would have had a right to sue for[.]”). In such a case, the trustee, standing in the shoes of the debtor, as he does, is a viable plaintiff. For instance, in Wagoner the court allowed the trustee to go forward with that part of the complaint that alleged the third party brokerage firm had engaged in churning of the debtor’s brokerage account, viewing that allegation as distinct in law from aiding and abetting the debtor in injuring creditor’s of the debtor’s investment operation. Wagoner, 944 F.2d at 119. See Kalb, Voorhis & Co. v. Am. Fin. Corp., 8 F.3d 130, 132 (2d Cir.1993) (“Property of the estate does not belong to any individual creditor. If under governing state law the debtor could have asserted an alter ego claim to pierce its own corporate veil, that claim constitutes property of the bankrupt estate and can only be asserted by the trustee or debtor-in-possession.”) The third party has typically been a stock broker, attorney or accountant. See Wagoner, Hirsch and Wechsler, supra. The opposing inquiry is whether the wrongdoing the trustee complains of arose when the third party defendant acted in concert with the entity that later became the Title 11 debtor. In that setting, the trustee lacks standing, the presence of wrongdoing notwithstanding; the cause of action belongs to creditors alone. Wagoner, 944 F.2d at 120 (uncontested that debtor’s sole stockholder and decision maker knew of and actively advanced conduct that harmed creditors; claims belong solely to creditors); Barnes, 212 N.Y.S. at 537 (cause of action belong to creditors and not trustee where debtor and third party were joint tortfeasors in harming interests of creditors). A trustee cannot be permitted to expend estate assets pursuing claims in which the estate has no interest or where creditors may have their own independent actions. Barnes, 212 N.Y.S. at 538 & 539 (trustee denied standing to pursue causes of action merely assigned to him by creditors); Caplin v. Marine Midland Grace Trust Co. of N.Y., 406 U.S. 416, 429 & 434, 4992 S.Ct. 1678, 1686, & 1688, 32 L.Ed.2d 195 (1972) (plaintiff trustee neither argued, nor could argue, that debtor could make a claim against the third party; granting trustee standing to sue would be inconsistent with creditor’s independent right to sue same third party). Trustees may contend that the debtor’s agent acted, with the aid of the third party, in its own interest to the detriment of its principal. See Official Comm. of Unsecured Creditors of Grumman Olson Indus., Inc. v. McConnell, 329 B.R. 411, 425 (Bankr.S.D.N.Y.2005) (“[State] law will not impute [to the principal] the acts and knowledge of the agent where the agent engages in a scheme to defraud his principal on his own behalf or on behalf of another.”) (citing Wight v. BankAmerica Corp., 219 F.3d 79, 87 (2d Cir.2000)) and Center v. Hampton Affiliates, Inc., 66 N.Y.2d 782, 497 N.Y.S.2d 898, 488 N.E.2d 828 (1985). In undertaking this analysis, courts apply the law of agency. The Mediators, Inc. v. Manney (In re The Mediators, Inc.), 105 F.3d 822, 827 (2d Cir.1997) (analyzing effect on trustee’s standing of agency law, including adverse interest exception and sole actor exception to the adverse interest exception). The in pari de-licto doctrine has served as a component of the agency analysis without an alteration in outcome, as further discussed below. Indeed, the Caplin court introduced the principle into the analysis. 406 U.S. at 430, 92 S.Ct. at 1686 (assuming allegations of third party misconduct are true, trustee describing a situation where debt- or and third party were in pari delicto); Wechsler, 212 B.R. at n. 1 (in pari delicto and Wagoner rule are similar: application depends on a finding that all relevant shareholders and decision makers were engaged in the wrongdoing); Breeden v. Kirkpatrick & Lockhart LLP (In re Bennett Funding Group), 336 F.3d 94 (2d Cir.2003) (same). The inquiry must make sure that the trustee is only seeking recompense for the direct benefit of the bankruptcy estate, and not for the direct benefit of creditors. 11 U.S.C. § 541 (2006); Barnes, 212 N.Y.S. at 539 (“[Trustee] says he wishes to secure redress, whereas the Bankruptcy Act provides for following and recovery of property transferred in fraud of creditors and for an accounting for the value of such property.”) (emphasis in original). This rule has been criticized because of the perception that third party wrongdoers are escaping the consequences of their misconduct when their actions are alleged to contribute to the bankruptcy of the corporation to which they owed a duty. See Stephen J. Shimsak & Susan E. Wel-ber, Revisiting Rule on Trustee Standing: In New Economy, ‘Wagoner” Doctrine Takes On Added Significance, N.Y.L.J., Feb. 19, 2002 at 9; Jeffrey Davis, Ending the Nonsense: The In Pari Delicto Doctrine Has Nothing To Do With What Is § 511 Property of the Bankruptcy Estate, 21 Emory Bankr.Dev. J. 519. Nevertheless, the critics recognize that the doctrine cannot be said to strip creditors of their rights against those parties that ally with or render services to entities intent on breeching, with the assistance of others, their duties as debtors. Id. at 546. (The Trustee here joins the criticism and asks that this Court depart from the Wagoner Rule. Obviously, this Court has no power to depart, and that argument is rejected.) ANALYSIS The Court is convinced in this particular case, that “Johnny-Come-Lately” attestations by insiders to the effect that they would have been “Whistle Blowers” or would have otherwise sought to prevent 50harm to the Debtor’s creditors, cannot be permitted to establish “standing” in this Debtor (and therefore in the Chapter 7 Trustee) to overcome a Wagoner Defense. After the fact of a massive fraudulent transfer by an LLP, would any partner ever fail to jump at the chance to say that he or she chose to remain sufficiently “removed” to claim “innocence?” If what politics calls “plausible denial” were to suffice to defeat a Wagoner Defense, then Wagoner would have no meaning in any case of any debtor that is a partnership. As to the Wagoner Rule itself, this Court recited in open court during argument on November 15, 2006, the fact that Congress specifically rejected, in 1978, a proposal that would have become 11 U.S.C. § 544(c). It would have commanded that (c)(1) The trustee may enforce any cause of action that a creditor, a class of creditors, an equity security holder, or a class of equity security holders has against any person, if— (A) the trustee could not recover against such person on such cause of action other than under this subsection; (B) recovery by the trustee for the benefit of such creditor or equity security holder or the members of such class will reduce the claim or interest of such creditor or equity security holder or of such members, as the case may be, against or in the estate; (C) There is a reasonable likelihood that recovery against such person will not create an allowable claim in favor of such person against the estate; and (D) enforcement of such cause of action is in the best interest of the estate. (2) If the trustee brings an action on such cause of action— (A) the court, after notice and a hearing, may stay the commencement or continuation of any other action on such cause of action; and (B) the clerk shall give notice to all creditors or equity security holders that could have brought an action on such cause of action if the trustee had not done so. (3) A judgment in any such action brought by the trustee binds all creditors or equity security holders that could have brought an action on such cause of action. Any recovery by the trustee, less any expense incurred by the trustee in effecting such recovery, shall be for the benefit only of such creditors or equity security holders. 9 Bankr.Service, L.Ed. Legislative History Chapter 82, Appendix, H.R. 8200. Congress’ rejection of that proposal made necessary the analysis from which the Wagoner Doctrine emerged. The roots of the doctrine go back at least to 1925. See Barnes, 215 A.D. 10, 212 N.Y.S. 536, and Caplin, 406 U.S. 416, 92 S.Ct. 1678, 32 L.Ed.2d 195, supra. Causes of action that do not belong to the Trustee under 11 U.S.C. §§ 541-549, may not be pursued by the Trustee. It is important to recognize that the LLP was neither a corporation nor a Limited Partnership. It was a Limited Liability Partnership in which all partners agreed to give near-total management control to a managing group. Thus there were no “shareholders” to be injured by corporate decision makers, and any partner who was informationally “out-of-the-loop” chose to be so. It is also important to note that although the Wagoner Doctrine and the “in pari delicto ” doctrine have some elements in common, they are not the same. Wagoner addresses “standing” in the con51text of the “case or controversy” limitation on the exercise of Article III power under the Constitution, and the powers of a Chapter 7 Trustee are indeed a “federal question.” Such a dispute over “standing” is not to be conflated with an eventual trial on the merits of an affirmative defense: As stated in the Dissent in Committee v. R.F. Lafferty & Co., 267 F.3d 340, 361 (3rd Cir.2001), an opposite conclusion would lead to the anomalous result that if it were ultimately to be concluded, after discovery, and perhaps after trial, that the Trustee lacked standing, the Court would have to conclude that it had no jurisdiction in the first place, and nothing other than that ruling would have any binding effect. “In pan delicto,” on the other hand, is an equitable defense that often necessitates a trial on the merits. In the Court’s view, Wagoner and Bennett Funding require that the Court satisfy itself of its jurisdiction when the Trustee’s standing is challenged, though the Trustee’s burden of proof of standing is not heavy at the pleading stage. Wagoner, 944 F.2d at 117 (citation omitted); In re The Bennett Funding Group, 336 F.3d at 99 (citation omitted). The Court in Wechsler v. Squadron, viewed this as a “pleading requirement”: “To be valid, a complaint would have to identify [an innocent insider] and explain how he (sic) could and would have brought the fraud to an end.” 994 F.Supp. 202, 205 (S.D.N.Y.1998) (citing Wechsler, 212 B.R. at 36). And even if the Trustee here were given leave to amend the Complaint to comply with this standard, it is clear that he simply could not so comply. Amendment would be “futile.” Because this Adversary Proceeding is alleged to be a § 541 claim (it is not an “avoiding action”), it must be made clear to the Court that it is a claim that the LLP itself could have brought against the Defendant on the date that the LLP instead filed its Chapter 7 petition. An element in that analysis happens also to be an element of the “in pari delicto ” doctrine. That is the “innocent insider” concept. In Bennett Funding, the lower court conducted a four-day inquest into that and other matters that “went to” the question of standing. That happened to be after discovery, in the context of a Summary Judgment Motion. The lower court found “standing to be absent.” Breeden, 336 F.3d at 97 (citing Breeden v. Kirkpatrick & Lockhart, 268 B.R. 704, 714 (S.D.N.Y.2001)). The Trustee in Bennett complained on appeal that that inquest violated his right to a trial by jury on the defendant’s “in pari delicto ” defense. The Circuit disagreed. In the Bennett case, it was found by the lower court, affirmed by the Circuit, that it was true, as the Trustee there alleged, that there were members of the Bennett Funding Board of Directors who were not members of the Bennett Family, but they were “impotent” to have stopped the Bennett’s Ponzi Scheme. 336 F.3d at 101. And so the corporation was subject to the “Sole Actor” rule. The wrongdoing of the controlling persons — the Bennetts — was “imputed” to the corporation and the Trustee stood in no better shoes than the corporation in trying to aid the creditors of the corporation by pursuing professionals who “aided and abetted” the corporation’s fraudulent activities. Id. at 102-03. In the case at Bar, the Court might have ordered such an inquest were it alleged that there were partners who were thwarted in their efforts to uncover the strategy. Even now, in response to the Rule 12(b)(1) Motion based on Wagoner, there is no such assertion by the Trustee. Rather, it is asserted that there are partners who were “kept in the dark” and “not fully informed.” Deposition testimony is offered 52by partners who say that they asked, “What’s the plan” and were told “Don’t ask.” And so they didn’t. There is no assertion even now, 21 months after the filing of Defendant’s Wagoner Motion (the interim was taken up by § 542 turnover of the Debtor’s files from the Defendants, its lawyers) that there was any material denial of any partner’s rights under the partnership agreement or otherwise. There is, at the most, a representation that some of the fraudulent transfers required a partnership vote that never occurred. But it is not suggested that there was any partner who did not (1) participate in the fraud, or (2) accept the perceived fruits of the fraud, or (3) abandon the LLP and sign-up with Excel-lus/Univera. The Court holds that when a partnership is not a “limited partnership,” no partner who chose a “hear no evil, see no evil” approach to what the duly-empowered management group (under the Partnership Agreement) is engaged-in on behalf of the firm and its partners, may later be heard to be an “innocent insider” for the purpose of giving “standing” to the firm’s Chapter 7 Trustee. The claim belongs to creditors, not to the estate. To the extent that the “Adverse Interest” doctrine is implicated' — the doctrine that wrongful conduct of agents will not be imputed to the principal if the agents were acting adverse to the principal — we are led to the fact that “deepening insolvency” does not seem to be relevant here in New York, unlike Pennsylvania. (See Gru-mann). Certainly a decision by an entity to render itself insolvent would, under the laws of some states, give rise to a cause of action that is owned by the entity. In the Lafferty case, in Pennsylvania, that fact salvaged the Trustee’s “standing,” though the Trustee lost on the “in pari delicto ” defense. But the law in New York seems to be different. Claims akin to “aiding and abetting” a “deepening insolvency” seem not to be the debtor’s claim under New York law. It is a claim owned by creditors, presumably to be sued in intentional tort. (And in a suit by creditors, the Code of Professional Responsibility might be implicated where, as here, the defendant is a law firm. After all, it is this writer’s view that a lawyer asked or commanded by a client to formulate or implement or advise a massive fraud upon the client’s creditors, should refuse the case. The Defendant did not refuse, and admits all of the client’s wrongdoing.4) It is also asserted by the Trustee that once the strategy shifted from preservation of the well-being of the LLP to preservation of the well-being of its partners, both the management group and the Defendant breached a duty owed to the LLP. Certainly, if the Debtor were a “Limited Partnership,” rather than a “Limited Liability Partnership,” there might have been innocent “limited partners” injured by the stripping of assets from the firm. But under New York law, such limited partners may sue in their own right. See, for example, Lichtyger v. Franchard, 18 N.Y.2d 528, 535-36, 277 N.Y.S.2d 377, 223 N.E.2d 869 (1966). It is not so clear that they could sue in the name of the firm. Because this Debtor is a Limited Liability Partnership in which all non-managing partners chose, both by Agreement and by their conduct, to place distance between themselves and the managing partners, the dispositive fact is that even in the face *53of the Dismissal Motion, the Trustee is unable to produce the name of any partner who chose to refuse the perceived fruits of the Strategy but did not also choose to leave the firm for other perceived benefit. There is no hint or suggestion that any partner woke-up one day (one pre-petition day) and found herself left “holding the bag” for the firm — left having to vote herself into management and set out on the firm’s behalf to stop or reverse what had been done. There is no hint or suggestion that the Chapter 7 filing was anything other than the “end game” to the strategy rather than an opening salvo to redress the wrong done to the firm. Consequently, to this writer, the partnership is indistinguishable from its partners in this case. The partners were at all times served by the strategy, thought the firm’s creditors were not. There was no one left in the firm to complain, credibly, as of the petition date. Finally, assuming arguendo that the strategy was actually concealed from one or more partners, it was not concealed by these Defendants. It would have been concealed by the Partnership’s own management group. CONCLUSION The Court has no idea whether any creditor of the Debtor is or is not now time-barred from pursuing the Defendants in intentional tort on their own behalf. If the time has passed, then it is certainly understandable that those creditors and their counsel might not have anticipated this ruling and are disappointed. What the Debtor LLP seems5 to have done with assistance of the Defendants is also disappointing to the Court, to say the least. Though it emanated from a two-party dispute between the Debtor and the HMO, millions of dollars of claims held by persons who were not involved in that dispute have remained unpaid as of this date because of the strategy employed by the Debtor in the two-party dispute. This may be an unfortunate result for creditors. But it is a consequence of (1) Congress’ policy decision not to include the proposed § 544(c) in the 1978 Reform Act, and (2) the resulting Wagoner Doctrine (with its 80-year old roots), which binds this Court. This Court has no power to question Congress’ decision and is bound by the Second Circuit’s consequent decisions. The simple fact is that in some eases, Chapter 7 Trustees have not been empowered by law to undo everything that a debtor did on a pre-petition basis that injured the debtor’s creditors. Defendants’ Motion to Dismiss Causes of Action Numbers 1, 2, 8 and 4 is Granted. This is true also as to Cause 8, in so far as it is premised on Causes 1, 2, 3 and 4. Defendants’ Motion to Dismiss Cause Number 7 (Unlawful Practice of Law) is granted, and the Trustee’s request to re-plead that cause in other terms is Denied. All other requests by the Trustee are denied. This matter is restored to the Calendar as to the remaining Causes of Action (Preference and Fraudulent Transfer) on January 17, 2007 at 10:00 a.to., for Report and further scheduling. . Wagoner and certain of its progeny are summarized later in this Decision. . There is another Adversary Proceeding against others involving the same allegations. The Court makes no "findings of fact” that would have any effect in the other Adversary Proceeding. Rather, the Court simply assumes the truth of the Trustee’s allegations for purposes of this Motion in this Adversary Proceeding, as it must in the context of a Rule 12(b)(1) Motion. . The assets transferred included, in some instances, equipment, leaseholds, receivables, “injectables” inventory, patient records, and also "releases” by the LLP of unpaid "buy-in” obligations and restrictive covenants in favor of the LLP, against individual partners. . Of course, attorney-client privilege does not exist as against the Chapter 7 Trustee of the client. . See footnote 2, above.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494123/	Opinion STEPHEN RASLAVICH, Bankruptcy Judge. Background. The above adversary action arises in the Chapter 11 Bankruptcy case of Stone & Webster, Inc., et al. (“Stone & Webster”) In its complaint the Plaintiff, the Shaw Group, Inc., (“Shaw”) seeks a declaratory judgment on a variety of issues, including 1) a determination as to the amount and rightful owner of a certain claim against Shaw, and 2) a declaration that upon payment of the liquidated claim to its rightful owner, any and all other related claims asserted against Shaw for interest and attorneys fees are invalid. The Complaint was filed on September 25, 2001. Following a mediation, the ownership issue was resolved. The owner of the claim at issue is acknowledged to be Next Factors, Inc. (“Next Factors”). The remaining issues in the litigation are unresolved; although, as will be discussed not all outstanding issues will be determined herein. As might be expected in an adversary proceeding between two non-debtors that has been pending for over 5 years, the case has a rather involved procedural history. Piecing together the chronology and relevant facts is made somewhat difficult by the circumstances under which the litigation comes before this Court.1 The instant dispute stems from Shaw’s purchase of substantially all of the assets of Stone & Webster in the year 2000. The consideration for the purchase consisted of cash and an assumption of liabilities. Stone & Webster, although primarily in the engineering and construction business, apparently owned a subsidiary that operated cold storage warehouses. One such subsidiary was an entity known as Nordic Refrigerated Services, LP (“Nordic Refrigerated”). In 1999 Coastal Foods, Inc. (“Coastal”) contracted with Nordic Refrigerated to store various lots of frozen shrimp at the latter’s warehouse in Atlanta, Georgia. During that year discrepancies were found to exist between the records of Coastal and Nordic Refrigerated and the results of a physical inventory of the shrimp actually at the warehouse. A quantity of shrimp was determined to be missing. 106Coastal was insured by Gulf Insurance Company (“Gulf’) for such an event and was apparently paid $118,358.99 pursuant to the underlying policy. An entity known as Xabeque LLC (“Xabeque”) subsequently claimed that it was the transferee of Gulfs subrogation claim against Nordic Refrigerated. Stone & Webster filed its bankruptcy case on June 2, 2000. On or about July 14, 2000, it scheduled the claim in question as belonging to Xabeque, and being in the undisputed, liquidated and non-contingent amount of $125,358.99.2 Gulf disputed the alleged transfer of its claim to Xabeque and filed its own proof of claim in the unsecured, non-prioritized amount of $118,358.99. Prior thereto, however, Gulf had in fact transferred its claim to Next Factors, which filed two separate proofs of claim on its own behalf, each in the unsecured, non-prioritized amount of $125,358.99. Next Factors also filed a third proof of claim relating to the missing shrimp in an amount which cannot be determined from the record before the Court. The parties agree that all four claims relate to the subject of this litigation and they have chosen to denominate the claim at issue as the “Xabeque Claim.” The Court will do likewise. As noted above, all disputes relative to ownership of the Xabeque claim have been resolved in favor of Next Factors. Prior to paying Coastal, Gulf had hired an insurance adjusting firm named Matthews, Mattson & Kelley Ltd., (the “Matthews Firm”) to investigate the loss. The assignment was performed by J. Roger Parry. The Matthews Firm prepared a report, dated March 6, 2000, which is appended to the proof of claim filed by Gulf(the “Matthews Report”). The parties agree that Mr. Parry concluded that there was no explanation for the loss. (See Stipulated Fact No. 11 — Joint Pretrial Order) Next Factors is in the business of acquiring claims in bankruptcy proceedings throughout the country. It purchased 63 claims in the Stone & Webster case, including the Xabeque Claim. The Xabeque Claim is one of the liabilities which Shaw assumed as part of the consideration for its purchase of the assets of Stone & Webster. ' In the main Stone & Webster bankruptcy case, the Court had approved an agreement between the Debtors and Shaw under which Shaw was to identify disputes as to the amount of assumed liabilities on or before January 15, 2001, and was to file claim objections, if any, on or before January 31, 2001. Shaw did not file an objection to the Xabeque Claim by that date. However, on January 30, 2001, Shaw did file a First Omnibus Objection to various claims. The omnibus objection contained an explicit reservation of rights to file additional objections, as follows: Shaw expressly reserves the right to amend, modify or supplement this Objection, and to file additional objections to the claims or any other claims (filed or not) that may be asserted against Shaw. Should one or more of the grounds of objection stated in this Objection be overruled, Shaw reserves its rights to object to the proofs of claim on any other ground that bankruptcy and nonbankruptcy law permits. On April 17, 2001, Shaw filed a Second Omnibus Objection to claims which included an objection to the Xabeque Claim. The Second Omnibus Objection also contained a reservation of rights to file fur107ther objections. The proposed orders approving both omnibus objections recited that the entry of the Orders was “without prejudice to Shaw’s right to object to any other proofs of claim or interests filed in these Chapter 11 cases.” The proposed orders with respect to both omnibus objections were signed on May 22, 2001. Shaw based its objection to the Xabeque Claim on a contention that the claim had been “settled at closing.” Subsequently, Shaw determined that the Xabeque Claim had not been “settled at closing,” and abandoned its objection. Several months later Shaw initiated this adversary action. In its complaint Shaw contested the amount of the Xabeque Claim on the basis 1) that the claim lacked supporting documentation, and 2) that the claims was based on Coastal’s costs for the missing shrimp, but failed to take into account a contractual limitation on lost product under the warehouse agreements between Coastal and Nordic Refrigerated. In the latter respect, Shaw maintains that the reverse side of the warehouse receipts for the six lots of frozen shrimp unaccounted for contained the following language: If goods are damaged or lost through negligence of the warehouseman, the lesser of reasonable wholesale market price or storer’s cost at Atlanta, Georgia of the goods on the date of the discovery of damage or loss shall be the measure of damages, but in no case shall the liability of the warehouseman exceed fifty cents (50 cents) per pound unless excess value is declared by the storer at the time the goods are stored. This request must be made in writing. Rates quoted are on the basis of this maximum liability and in the event a storer desires to declare an excess value, proportionate rates to cover the added liability on the part of the warehouseman will be assessed on both Handling and Storage. Shaw asserts that Coastal never declared “excess value,” and that any liability on its part for the missing shrimp was therefore capped at 50 cents per pound. As noted above, Shaw sought, inter alia, a declaration as to the proper amount of the Xabeque claim.3 In its Answer to the Complaint, Next Factors included as a first affirmative defense, the following: Defendant asserts that the relief sought in the Complaint by Plaintiff has been, waived in full or in part, by Plaintiffs conduct and/or action(s) in connection with the claims asserted by Defendant. Alternatively, Defendant asserts that the Plaintiff is estopped from seeking the relief sought in the Complaint, in full or in part, by Plaintiffs conduct and/or action(s) in connection with the claims asserted by Defendant. Next Factors subsequently filed a Motion for Summary Judgment that was based in part on the above affirmative defense, and in part on its contention that under applicable Georgia law Shaw was barred from limiting its liability for an unexplained loss. Judge Walsh denied Next Factors’ Motion for Summary Judgment in an Opinion and Order dated December 16, 2005. In his decision, Judge Walsh, inter alia, rejected all of Next Factors’ arguments that principles of waiver and/or estoppel barred Shaw from objecting to the Xa-beque Claim after January 31, 2001. 108Judge Walsh additionally held that the underlying transaction was governed by Georgia law, and that under Georgia law a warehouse receipt may validly cap damages for a loss. He noted, however, that any such cap would be ineffective if the warehouseman converted the property for his use, citing the following relevant statutory language: (1) A warehouseman is liable for damages for loss of or injury to the goods caused by his failure to exercise such cars in regard to them as a reasonably careful man would exercise under like circumstances but unless otherwise agreed he is not liable for damages which could not have been avoided by the exercise of such care. (2) Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage, and setting forth a specific liability per article or item, or value per unit of weight, beyond which the warehouseman shall not be liable; provided, however, that such liability may on written request of the bailor at the time of signing such storage agreement or within a reasonable time after receipt of the warehouse receipt be increased on part or all of the goods thereunder, in which event increased rates may be charged based on such increased valuation, but that no such increase shall be permitted contrary to a lawful limitation of liability contained in the warehouse’s tariff, if any. No such limitation is effective with respect to the warehouseman’s liability for conversion to his own use. (3) Reasonable provisions as to the time and manner of presenting claims and instituting actions based on the bailment may be included in the warehouse receipt or tariff. Ga.Code Ann. § 11-7-203 (2005) (emphasis added in opinion) Next Factors sought to invoke the conversion exception, arguing that Georgia law required the Court to presume a conversion of the shrimp because the loss could not be explained. Judge Walsh rejected this argument, concluding instead that the transaction was a bailment, and that under such circumstances Georgia law created a rebuttable presumption of negligence upon proof of loss by a depository for hire. Conversely, he held that Next Factors bore the burden of proving a conversion of the shrimp, as opposed to negligence by the bailee, a burden which he determined Next Factors had failed to meet. Shortly before issuing his decision on Next Factors’ Motion for Summary Judgement, Judge Walsh issued another Order of significance for present purposes. Next Factors apparently has taken the position that alleged improper conduct by Shaw, together with Shaw’s failure to pay the Xabeque Claim and other claims purchased by Next Factors, has given rise to a claim on the part of Next Factors against Shaw for incidental damages, including, without limitation, interest and attorneys fees, which in the aggregate approximate 2.7 million dollars. In response to this, Shaw filed a Motion in Limine in which it argued that Next Factors had failed to provide any computation of the alleged damages as required by F.R.C.P. 26(a)(1)4 Consequently, said Shaw, Next Factors should be precluded from presenting any evidence of such damages in this adversary proceeding. At a 109hearing on the Motion held December 1, 2005, the parties and the Court mutually agreed that any issues as to incidental damages and the payment of other claims owned by Next Factors should be heard upon separate application to be filed in the main bankruptcy case, and that Next Factors would be precluded from presenting any evidence of such alleged incidental damages herein. (See Transcript hearing 12-1-05, pages 26-37). This decision was memorialized in an order of Court dated December 5, 2005. This Court held a pretrial conference call with counsel for the parties on September 14, 2006. Much, although not all, of the foregoing history was discussed. During the call it was determined that the issues in this adversary proceeding had been considerably narrowed by virtue of the resolution of the ownership issue and the ruling on Shaw’s Motion in Limine. At this point the issue sub judice is simply liquidation of the Xabeque Claim. This issue, however, subsumes two separate questions upon which the parties disagree. The first is the quantity of shrimp that went missing and the second goes to the existence and enforceability of the contractual waiver of damages beyond 50 cents per pound of missing shrimp. Upon inquiry by the Court, counsel advised that neither party intended to present live testimony in connection with this matter, and that the evidentiary record would consist entirely of documents and trial depositions. The ‘ Court thereupon entered a scheduling order on September 26, 2006, which provided for transmittal of the record and the submission of briefs. The parties’ reply briefs have been received and the matter is thus ripe for determination. Consistent with the Court’s verbal advices on September 14, 2006, the Court will not reconsider matters previously adjudicated by Judge Walsh, and this matter will be governed in accordance with the terms of the parties’ proposed joint pretrial order, which was submitted pursuant to an Order of Judge Walsh dated March 27, 2006, but apparently not signed by him prior to his recusal. Before turning to its discussion, the Court is constrained to observe that the disposition of an otherwise seemingly straightforward dispute is made considerably the more complex by reason of a plethora of objections interposed by the. parties (mainly Next Factors) to the admissibility of the evidence offered by the other. By way of example, Shaw, for instance, notes that Next Factors has objected to the admission of every exhibit which Shaw has offered. In making this observation, the Court notes likewise Judge Walsh’s observation in his letter to counsel dated August 15, 2006 that this adversary proceeding has been very contentious, and that in his view the parties had expended resources far out of proportion to the amount of the disputed claim. This suggests the possible existence of an agenda distinct from the resolution of the instant dispute. Needless to say, if so, that would be distressing. Notwithstanding, the Court will address, as necessary, the multitude of issues presented. Discussion. At the outset a brief review of the law applicable to the allowance of a claim against a bankruptcy estate seems appropriate.5 110The filing of a proof of claim constitutes prima facie evidence of the validity of the claim. 11 U.S.C. § 502(a). However, once an objecting party submits sufficient evidence to place the claimants entitlement at issue, the burden of going forward with the evidence to sustain the claim shifts to the claimant or its assignee. The burden of persuasion is always on the claimant to establish its entitlement to its claim. As our Circuit Court has explained: The burden of proof for claims brought in the bankruptcy court under 11 U.S.C.A. § 502(a) rests on different parties at different times. Initially, the claimant must allege facts sufficient to support the claim. If averments in his filed claim meet this standard of sufficiency, it is “prima facie” valid. In re Holm, 931 F.2d 620, 623 (9th Cir.1991) (quoting 3 L. King, Collier on Bankruptcy, § 502.02, at 502-22 (15th ed.1991)). In other words, a claim that alleges facts sufficient to support a legal liability to the claimant satisfies the claimant’s initial obligation to go forward. The burden of going forward then shifts to the objector to produce evidence sufficient to negate the prima facie validity of the filed claim. It is often said that the objector must produce evidence equal in force to the prima facie case. Id.; see In re Windsor Communications Group, Inc., 45 B.R. 770, 773 (Bankr.E.D.Pa.1985). In practice, the objector must produce evidence which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency. If the objector produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts to the claimant to prove the validity of the claim by a preponderance of the evidence. See In re WHET, Inc., 33 B.R. 424, 437 (Bankr.D.Mass.1983). The burden of persuasion is always on the claimant. Holm, 931 F.2d at 623 (quoting Collier § 502.02, at 502-22); Windsor Communications, 45 B.R. at 773. In re Allegheny Intern., Inc., 954 F.2d 167, 173-74 (3d Cir.1992). As an initial matter, Shaw argues that Next Factors’ proofs of claim relating to the Xabeque Claim all fail to allege facts sufficient to support a legal basis for its claim, because Next Factors’ claims simply state an amount and attach no documentation. Shaw acknowledges however that the claim in question is the Xabeque Claim filed by Gulf and that claim did have accompanying documentation. As a result, Shaw does not seriously maintain that the initial burden of going forward with evidence to challenge the amount of the claim rested with Shaw. As previously noted, Shaw’s position is that, quantity aside, the Xabeque Claim is subject to a cap of 50 cents per pound of missing shrimp. Next Factors disagrees. That question, however, would seem to have been disposed of in the December 16, 2005 Memorandum Opinion of Judge Walsh. Next Factors again disagrees, arguing that Judge Walsh was merely opining on “Georgia law generally” when he held 1) that damages may validly be limited by a term in a warehouse receipt, and 2) that Georgia law created a presumption of negligence (rebuttable) on the part of a warehouseman once a loss is proven and absent proof of conversion. Judge Walsh, says Next Factors, did not construe the specific limitation of liability language in the contracts at issue herein. Hence, says Next Factors, this remains an open issue. The Court, for its part, rejects this notion. Indeed, any fair reading of the December 16, 2005 memorandum opinion leads one to the opposite conclusion. That is to say that, in his opinion, Judge Walsh 111clearly addressed himself to whether in this particular litigation the Xabeque Claim was subject to a 50 cent cap. He concluded that it was, given that there was no proof of conversion, and denied Next Factors’ Motion for Summary Judgement. For instance, at page 11 of his opinion, Judge Walsh wrote: The final issue here is whether Next’s claim is capped by a warehouse receipt, which provides that claims for the lost frozen shrimp shall not exceed $.50 per pound. Again at page 13 of this opinion, Judge Walsh wrote: In this case, the warehouse receipt provides as follows: If goods are damaged or lost through negligence of the warehouseman, the lesser of reasonable wholesale market price of storer’s cost at Atlanta, Georgia of the goods on the date of discovery of damage or loss shall be the measure of damages, but in no case shall the liability of the warehouseman exceed fifty cents (50 cents) per pound unless excess value is declared by the storer at the time the goods are stored (Advs. Doc. # 72, p. 21) (Emphasis added) In order to conclude that Judge Walsh was not addressing himself to the heart of the matter, one must assume that Judge Walsh was about the business of issuing an improper advisory opinion on an abstract or • hypothetical question that might or might not have any relevance to the litigation before him.6 That is a highly doubtful proposition with no support in the record. The Court notes that in its summary judgement memorandum of law Next Factors referred to the limitation of liability clause as “alleged,” and further that in its summary judgment reply brief Next Factors purported to reserve its right to contest the text of the warehouse receipt at trial. Those insertions were gratuitous, self serving and accomplished nothing. There is no escaping the fact that the text of Judge Walsh’s opinion is not dicta, it is not couched in language of speculation or conjecture, and it is not advisory in nature. On the contrary, his writing is quite explicit-on the point at issue. That being the case, it appears to this Court that the question of a 50 cent cap on the Xabeque Claim is settled as the law of the case.7 As noted in a leading treatise: The law of the case doctrine states that “when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.” Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 1391, 75 L.Ed.2d 318 (1983), rehearing denied 462 U.S. 1146, 103 S.Ct. 3131, 77 L.Ed.2d 1381 (1983). The doctrine grew out of the need to “maintain consistency and to avoid reconsideration of matters once decided during the course of a single continuing lawsuit.” 18 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 4478, at 788 (West 1981). The doctrine “promotes the finality and efficiency of the judicial process by ‘protecting against 112the agitation of settled issues.’ ” Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 816, 108 S.Ct. 2166, 2177, 100 L.Ed.2d 811 (1988). Case law teaches that revisitation of a prior ruling should be limited to extraordinary circumstances such as where: 1) the decision is clearly erroneous and its enforcement would work a manifest injustice; 2) intervening controlling authority makes reconsideration appropriate; or 3) substantially different evidence was adduced at a subsequent trial. None of these circumstances are present herein. Accordingly, and as a threshold matter, this Court concludes that both the existence and the enforceability of a 50 cent limitation of liability cap have already been determined by Judge Walsh and are the law of the case. Application of the law of the case doctrine settles the main issue in this lawsuit and obviates a great many of the collateral evidentiary issues raised by Next Factors. In the interest of completeness, however, the Court will address Next Factors’ arguments assuming arguendo that the limitation of liability issue is not already foreclosed. As will be seen, the same result obtains. The Court will begin first however with the question of how much shrimp was lost. I. The Quantity of Missing Shrimp The parties’ dispute, to the extent it relates to the amount of missing shrimp, is truly puzzling. In the Joint Pretrial Order Shaw identifies this as a fact in dispute, whereas Next Factors does not. Shaw, however, urges the Court to adopt the very poundage of missing shrimp set forth in the documentation attached to the Xabeque claim, whereas Next Factors in its memoranda of law now argues that Shaw has failed to present evidence which sufficiently establishes the amount of missing shrimp. From the Court’s perspective this is really a non-issue. Next Factors misses the mark in that it fails to recall that the ultimate burden of persuasion lies with the claimant. If Next Factors contends that the documentation attached to the Xa-beque claim is inadequate, it is Next Factors and not Shaw which must establish the correct amount of the missing shrimp. Shaw, conversely, misses the mark by failing to recall that a claim is entitled to prima facie validity and that the burden of proof shifts only once an objector produces evidence sufficient to negate the prima facie validity of the claim. Far from doing that, Shaw argues in support of the missing poundage as set forth in the Xabeque Claim. The foregoing notwithstanding, the Court will nevertheless address the issue of the quantity of missing shrimp. The Court begins with the relevant proof of claim, which is Claim No. 3898. This is the claim filed by Gulf and transferred to Next Factors. It has appended to it various documents, including the Matthews Report. The record in these proceedings also consists of the trial deposition of J. Roger Parry. The synthesis of Mr. Parry’s testimony is that he was given the assignment to investigate the lost shrimp by his employer, the Matthews Firm. To do so he was furnished with the claim forms submitted to Gulf by Coastal. (These forms are also appended to Claim No. 3898) Armed with this documentation Mr. Parry eventually met at the warehouse, with an individual named Ernie Ferguson, who in 1999 was Vice President of Sales at Nordic Refrigerated. As previously noted, Mr. Parry concluded after his meeting with Mr. Ferguson that there was no explanation for the loss. 113He thereupon drafted a report which was issued by the Matthews firm after he had reviewed the final draft. He testified categorically that the proof of claim filed by Gulf was prepared based on his report and the documentation submitted by Coastal to Gulf. The Xabeque Claim is a joint exhibit of the parties. (JX-5) It has appended to it extensive documentation. As noted, far from offering evidence to negate the prima facie validity of the claim, Shaw has offered evidence which supports the amount of missing shrimp as detailed in the documents attached to the Xabeque Claim. As will be discussed infra, there is really no need for Shaw to do so, as there is no evidence in the record which negates the prima facie validity of the amount of missing shrimp as set forth in the Xabeque claim and accompanying documentation. Conversely, it is an anomaly bordering on the absurd for Next Factors to impugn its own claim by challenging the amount of missing shrimp as detailed in the Xabeque Claim. As previously noted, the three claims Next Factors filed on its own behalf attached no documentation. Next Factors acquired the Xabeque Claim from Gulf and its entitlement to be paid any amount stands or falls based on that claim. If the Court accepts Next Factors invitation to consider the poundage question unproven it is difficult to see how Next Factors could sustain a claim of entitlement in any amount. The documentation attached to the Xa-beque Proof of Claim, however, is quite detailed. In addition to the Matthews report it has appended to it the subrogation forms which reflect both the proceeds Gulf paid to Coastal on its insurance claim and the transfer of the claim for the missing shrimp from Coastal to Gulf. These forms, in turn have appended to them the claim adjustment forms which itemize the missing shipments by pounds and cases. The documentation reflects, in sum, that the loss in question consisted of the loss of six separate shipments from Coastal to Nordic Refrigerated, as follows: Claim No. Quantity in pounds 58747 144 59058 1,695 565 5,325 Fax 4/15 1,070 125678 4,420 126990 7,026 Total 19,680 lbs. The amounts recited on the two individual subrogation forms ($51,471.89 and $66,887.10) equal $118,358.99, which is the amount set forth on the face of the claim. Accordingly, without belaboring the question any further, the Court holds that the Xabeque Claim never lost is presumption of prima facie validity as to the amount of missing shrimp to which the claim pertains, but that even if it had, the evidence before the Court clearly establishes that the amount is that which the claim itself recites. Accordingly, the Court holds that the quantity of shrimp that was unaccounted for is 19,680 pounds. II. Cap on Liability In support of its position that the six missing shipments of shrimp are subject to a 50 cent liability cap, Shaw offers a variety of evidence, all of which Next Factors contends is inadmissible, leaving Shaw, says Next Factors, unable to sustain its burden of going forward on this issue. The Court disagrees. Shaw’s evidence consists of Exhibits PX 1 through PX 11, as well as additional exhibits submitted in a supplemental appendix to Shaw’s reply brief. Next Factors objects generally to the admission of PX 1 through PX 11 on the basis that “key evidence has been destroyed by Shaw or its predecessor or successor in this mat114ter.” The Court will separately address below Next Factors spoliation of evidence argument. Prior to that, the Court will address certain of the other evidentiary objections interposed by Next Factors to the Shaw exhibits. A. Exhibit PX-1 Exhibit PX-1 is an affidavit of Donald Schoenl, who was the chief financial officer and director of logistics of Nordic Refrigerated at the time the loss of the shrimp was discovered. It is dated November 11, 2005 and was offered by Shaw in its answer to Next Factors’ Summary Judgment Motion. Mr. Schoenl states in his affidavit that attached thereto as Exhibit “A” is a true and correct copy of the general terms and conditions which were contained in warehouse receipts issued to Coastal by Nordic Refrigerated’s for storage of the missing shrimp that are the subject of the Xabeque Claim.8 Next Factors’ first objection to PX-1 is that Exhibit “A” was not attached. That has been corrected, rendering that objection moot. Next Factors’ second objection invokes Federal Rule of Evidence 602. Mr. Schoenl, says Next Factors, lacked personal knowledge of the contents of the specific warehouse receipts for the loss at issue. Shaw disputes this. Both parties base their argument on deposition testimony given by Mr.. Schoenl on June 2, 2006. The issue is relevant for present purposes because, of the six missing shipments of shrimp, the only portion of the actual warehouse receipts which exist today are the front side of the receipts for two of the shipments. Having considered the parties’ competing positions the Court finds Shaw to have the better part of the argument. On direct examination Mr. Schoenl testified that he was familiar with the standard warehouse receipt form in use by Nordic Refrigerated in 1999. When he was shown a copy of such a form he stated that it appeared to him to be the form used in 1999 and issued in connection with every shipment received at Nordic Refrigerated. Shaw emphasized that on cross examination the following exchange occurred: Q. Okay. As you sit here today are you able to say that this exact language in Paragraph 9(c) was attached to the back of what were marked as Parry 12 and Parry 13? A. To the best of my knowledge, being a preprinted form, all receipts in that time frame would have had these terms and conditions attached to them. Q. With this exact language? A. Yes, ma’am. Q. So while it was Nordic Refrigerated Services, LP the terms and conditions never changed? A. Not to the best of my knowledge. Schoenl Dep., pp. 30-32 (A205) Next Factors counters that, the foregoing notwithstanding, on direct examination Mr. Schoenl also testified, as follows: Q. Has the standard form changed in any way from 1998, 1999 until today? A. Minor changes, obviously, with the names of the Company and the verbiage under the terms and conditions may have been — a word or two may have been changed here or there. Schoenl Dep. p. 7 Next Factors’ F.R.E. 602 challenge to Mr. Schoenl’s testimony hinges on the foregoing passage. Specifically, Next Factors contends that Mr. Schoenl’s testimony creates doubt about whether the exact language relied upon by Shaw is the language which appeared in the missing Coastal 115warehouse receipts, and is too conflicting on this issue to warrant the imposition of the liability cap. The Court disagrees, and finds instead that Next Factors’ argument not only vastly overstates the case, but also relies on an overly narrow reading of F.R.E. 602. It is true that admissible testimony is limited to matters of which the witness has acquired personal knowledge. See, generally, Russell, Bankruptcy Evidence Manual § 602.1 (2007 ed.) Absolute certainty of either observation or recollection, however, is not required, id. at § 602.2. M.B.A.F.B. v. Cumis, Ins. Soc., Inc., 681 F.2d 930, 932 (4th Cir.1982) The proponent of the evidence must simply introduce evidence sufficient, if believed, to support a finding by a reasonable trier of fact of personal knowledge of the matter related. Surely that is present here. The bulk of Mr. Schoenl’s testimony is clear and unequivocal. The passage Next Factors relies upon does not genuinely undermine his testimony, let alone eviscerate it. In the first place, Mr. Schoenl refers to any changes to the terms and conditions of the standard warehouse receipt as being minor. In the opinion of the Court, there is nothing minor about eliminating a cap on the Company’s liability for lost shipments, and thereby opening the door to potential liability of much greater magnitude. Rather, it is the opinion of the Court that such an alteration would represent a major sea change and that no reasonable trier of fact would conclude otherwise. In the second place, when referring to possible changes to the terms and conditions of the Company’s warehouse receipt, Mr. Schoenl stated that “a word or two may have changed here or there.” The passage of the warehouse receipt in which the 50 cent liability cap appears, and to which Mr. Schoenl addressed himself, is an entire discrete subparagraph of some length. It is unreasonable to infer from Mr. Schoenl’s reference to the possible change of a word or two that a key passage in the form was entirely eliminated, or materially altered. In sum, the Court finds PX-1 and Mr. Schoenl’s related deposition testimony admissible and overrules Next Factors F.R.E. 602 objection. The Court notes further that there is no evidence which contradicts Mr. Schoenl’s affidavit and testimony. Accordingly, the Court arrives again at the conclusion that, other things being equal, the Xabeque Claim is subject to a 50 cent per pound cap on liability. Having reached this conclusion it is unnecessary to consider the remainder of Shaw’s evidence on this point, or Next Factors objections thereto, as such evidence is merely corroborative and/or cumulative. The Court will therefore turn to Next Factors’ spoliation of evidence argument. III. Spoliation Next Factors objects to every one of Shaw’s exhibits on spoliation grounds. Next Factors argues that Shaw, directly or through its affiliate, Nordic Cold Storage, LLC (“Nordic”), has failed to preserve crucial evidence surrounding the 1999 loss of shrimp from the warehouse. In doing so, Next Factors identifies two categories of evidence that it claims Shaw destroyed: (1) documents relating to an internal undercover investigation that Nordic conducted regarding the loss; and (2) the original warehouse receipts relating to the lost shrimp.9 As a result, Next Factors 116argues alternatively for sanctions that include barring Shaw from objecting to the amount of the claim, excluding the limitation of liability evidence, drawing a negative inference that the loss of shrimp was not due to the warehouseman’s negligence but rather conversion by Nordic, or shifting the burden of proving the circumstances surrounding the loss to Shaw. Courts have the inherent power to impose sanctions against any party that has destroyed evidence that is relevant to a legal proceeding. See In re Wechsler, 121 F.Supp.2d 404, 427 (D.Del.2000). When determining whether to sanction a party for spoliation of evidence, the court must consider: (1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) what degree of sanction is necessary to avoid substantial unfairness to the opposing party and to deter such conduct by others in the future. See In re Quintus, 353 B.R. 77, 83 (Bankr.D.Del.2006) (citing Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir.1994)). When determining the degree of fault attributable to the party that destroyed the evidence, the court must consider whether the party intended to impair the other side’s ability to effectively litigate its case. Wechsler, 121 F.Supp.2d at 415. See also Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 334 (3d Cir.1995) (“[I]t must appear that there has been an actual suppression or withholding of the evidence. No unfavorable inference arises when the circumstances indicate that the document ... in question has been lost or accidentally de stroyed, or where the failure to produce it is otherwise properly accounted for.”). Applying these factors to the two categories of objections identified above, the Court finds that sanctions for spoliation are not warranted in this case. Internal Investigation With regard to documents relating to an internal undercover investigation by Nordic, the Court finds no evidence that any specific documents even existed, much less were destroyed.10 Next Factors’ objection stems from the June 2, 2006 deposition testimony of Mr. Schoenl. In that testimony, Mr. Schoenl indeed states that the former CEO hired an undercover investigator to investigate the loss of shrimp, that the former CEO handled the entire investigation, that he (Schoenl) had “heard of a report but [had] never seen it,”' and that he (Schoenl) was unable to locate the report upon a search of records. See Schoenl Tr., at 14-15; 35; 39^40. From this testimony, Next Factors argues that the Court ought to draw a negative inference from the purported destruction of the report, or alternatively, that the burden of proof as to the cause of the shrimp’s, disappearance should shift to Shaw. The Court disagrees. Based on the scant evidence before it, the Court is hard-pressed to find that a report was even issued, let alone destroyed. Consequently, the Court will not impose sanctions based on these grounds. Warehouse Receipts Turning next to the missing warehouse receipts, the Court finds neither evidence of intentional wrongdoing 117nor prejudice to Next Factors.11 Next Factors argues that it has been prejudiced by Nordic and Shaw’s failure to retain the original warehouse receipts, and that Shaw should not be able to rely on a sample form of the warehouse receipt containing the limitation of liability language. The Court disagrees with Next Factors on several grounds. First, the evidence demonstrates that the specific warehouse receipts in question were destroyed in the ordinary course of business and in accordance with Nordic’s document retention policy' — not by any intentional wrongdoing or malfeasance on the part of Shaw or Nordic. See Brewer, 72 F.3d at 334 (citing 31A C.J.S. Evidence § 156(2); 29 Am.Jur.2d Evidence § 177 (“Such a presumption or inference arises, however, only when the spoliation or destruction [of evidence] was intentional, and indicates fraud and a desire to suppress the truth, and it does not arise where the destruction was a matter of routine with no fraudulent intent.”)). Nordic’s document retention policy for these types of documents was five years. The loss occurred in 1999. Next Factors’ subpoena to Nordic was issued on May 26, 2006 — years after the documents had already been routinely destroyed.12 Moreover, there has been no evidence demonstrating that Shaw or even Nordic acted intentionally or recklessly in destroying evidence. See Sears Roebuck and Co. v. Midcap, 893 A.2d 542, 550 (De.2006) (“The decisions of [the Delaware Supreme Court] and of the federal courts require a preliminary finding of intentional or reckless destruction of evidence as a predicate to an adverse inference instruction.”) On these grounds, therefore, the Court finds sanctions inappropriate. Second, and equally as important, the Court finds that Next Factors has not been prejudiced by Shaw’s failure to produce the original warehouse receipts due to the existence of alternative sources of the same evidence. Mr. Schoenl testified that the standard warehouse form used in 1999 contained the 50 cent liability cap and a standard form has been produced (PX2). Although production of the original receipts would arguably be the best evidence, they are not the only evidence concerning such information, and this Court finds the corroborating testimony of Mr. Schoenl both credible and sufficient. Consequently, the Court will not impose sanctions based on these grounds either. Finally, it is questionable whether Shaw — as a 19.5% owner in Nordic — had sufficient control over the records in ques118tion in order for the spoliation rule to even apply. See Brewer, 72 F.3d at 334 (“For the rule to apply, it is essential that the evidence in question be within the party’s control.”) On these grounds as well, therefore, the Court finds that sanctions are not warranted. IV. Conclusion As discussed above, the Xabeque Claim relates to the loss of 19,680 pounds of shrimp. Shaw assumed liability for this claim, however, Shaw’s liability for this loss is subject to a 50 per pound cap. The Xabeque Claim is accordingly fixed in the amount of $9,840. An appropriate Order follows. Order And Now, upon consideration of the Plaintiffs Complaint for Declaratory Judgment, the Answer of Defendant thereto, the evidentiary record presented to the Court and the parties’ memoranda of law, it is hereby: Ordered, that for the reasons set forth in the accompanying opinion, the Court hereby declares that the Xabeque Claim is entitled to allowance in the amount of $9,840. . As discussed, infra, the main bankruptcy case originated in the District of Delaware and is presided over by the Honorable Peter J. Walsh. On August 10, 2006, at a pretrial conference in this adversary proceeding, Judge Walsh raised the question of recusal, after noting that in the parties’ proposed pretrial order the Defendant had identified Christopher J. Sontchi, a recently appointed Bankruptcy Judge in the District of Delaware, as a witness and had designated his 91 page deposition for inclusion in the record. Judge Walsh elaborated on his need to recuse himself in a letter to counsel dated August 15, 2006. In this letter he indicated that he had discussed the issue with Chief Bankruptcy Judge Mary Walrath, who agreed that Judge Walsh’s rationale re: the recusal issue would extend to the other judges of the Delaware Bankruptcy Court. Pursuant to 28 U.S.C. § 292(b) Chief Judge Walrath requested that the Chief Judge of the Circuit assign this adversary proceeding to a judge in another District. Chief Circuit Judge Anthony J. Siri-ca accommodated this request and designated the Chief Bankruptcy Judge of the Eastern District of Pennsylvania, the Honorable Diane W. Sigmund, to serve in the District of Delaware and preside over this litigation, with authority on her part, however, to refer the matter to another judge in this District as she deemed appropriate. In furtherance of that authorization, and following a random assignment policy, the case was transferred to the undersigned. . This figure apparently represents the adjusted Coastal claim after adding back the policy’s deductible. . Shaw specifically asserted the limitation of liability issue at Paragraph 14 of its complaint. Next Factors responded with a general denial which read "defendant lacks knowledge or information sufficient to form a belief as to the truth or falsity of the allegations contained in paragraph 14 of the Complaint." . The Proof of Claim filed by Next Factors relative to the Xabeque Claim included a footnote which made demand for such damages, ostensibly limited to the Xabeque Claim, although there is no such limiting language. . The Court recognizes that technically this is not a claim objection but a request for a declaratory judgment. Still, the principles applicable to the allowance of claims inform the outcome because, as a practical matter, this lawsuit is the functional equivalent of a claim objection, inasmuch as Shaw is asking the Court to liquidate and allow the Xabeque Claim in other than its filed amount. . The constitutional limitation of federal jurisdiction to actual cases and controversies stands as a direct prohibition to the issuance of advisory opinions. Armstrong World Industries, Inc. v. Adams, 961 F.2d 405, 410 (3d Cir.1992). . When a case is transferred from a Court in one District to a Court in another, the transferee Court may give law of the case effect to a determination made by the originating Court. See Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 816, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). . The Exhibit recites the 50 cent per pound cap on liability at issue herein. . A third category addressed in Next Factors’ papers, relating to records concerning Nor-die’s assumption of liability for the Xabeque claim, appears moot since Shaw is not con116testing that it is responsible — at least in some amount — for the Xabeque claim. . None of Exhibits PX1 through PX11 actually pertain to the alleged internal investigation. Rather, Next Factors generally objects and claims that, because relevant documents do not exist, the Court should find that they were destroyed, and then grant a negative inference as to the cause of the shrimp's loss. . Exhibits PX1 (the affidavit of Schoenl), PX2 (a blank invoice showing terms and conditions containing the 50 cent liability cap) and PX5 (insurance letter) pertain to the language of the warehouse receipts. Although Next Factors also objects to the remaining Exhibits (PX3, PX4 and PX6 through PX11) (representing various Coastal and Nordic invoices and forms) at least in part on the grounds of spoliation, the Court finds that those Exhibits pertain not to the warehouse receipt terms and conditions but rather to the amount of lost shrimp. . Although the law is clear that "a party who has reason to anticipate litigation has an affirmative duty to preserve evidence which might be relevant to the issues in the lawsuit” (see, e.g., In re Wechsler, 121 F.Supp.2d 404, 415 (D.Del.2000)), the law also requires an "actual suppression or withholding” (see Brewer, 72 F.3d at 334) of the evidence in order for a spoliation inference to apply. Putting aside for the moment that there has been no evidence of an actual suppression or withholding of evidence, the Court also finds questionable the argument that Shaw’s duty to preserve the 1999 warehouse receipts extended beyond the company's normal document retention period due to 2001 discovery requests seeking documents relating to Shaw’s omnibus objection that certain claims were "paid” or "settled at closing.” (DX20)	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494124/	MEMORANDUM OPINION WILLIAM S. HOWARD, Bankruptcy Judge. This matter has been submitted for decision on the Plaintiffs Motion for Summary Judgment and the Defendant’s Response. The Plaintiff commenced this action on February 6, 2006 by filing a Complaint to Determine Dischargeability of Debt pursuant to Bankruptcy Code sections 523(a)(2)(A) and (B) and 523(a)(6). The Defendant’s debt to the Plaintiff arises from his personal guaranty on a lease. The Plaintiff seeks $90,000.00 for non-payment of rental installments, $20,880.85 for the value of personal property the Defendant allegedly removed from the Plaintiffs property, and $11,180.40 for non-payment of ad valorem taxes. This court has jurisdiction of this matter pursuant to Judicial Code section 1334(b); it is a core proceeding pursuant to Judicial Code section 157(b)(2)(I). For the reasons set out below, the court will sustain the Plaintiffs Motion for Summary Judgment. 1. Factual and procedural history The Defendant owned and operated Red Snapper Corporation, d/b/a Furlong’s, a seafood restaurant (“Red Snapper”). In February 2004, he approached the Plaintiff about moving the restaurant’s location to property the Plaintiff owned, otherwise known as the Coach House, in Lexington. On February 25, 2004, the Defendant executed an Agreement to Lease whereby he agreed to lease the Coach House premises from the Plaintiff under certain terms and conditions, one of which was his providing a current financial statement. The Defendant provided such a financial statement which he prepared for the first quarter of 2003 (according to the Plaintiff), reflecting that he had assets of $1,695,000.00 and liabilities of $424,500.00 for a total net worth of $1,270,500.00. The Plaintiff states it did some research in regard to the Defendant’s home and ran a personal credit report. Some unpaid medical bills were attributed to the Defendant’s insurance company’s failure to pay. The Plaintiff discerned no other “red 159flags” that indicated the information the Defendant provided was inaccurate. The Plaintiff did not doubt the accuracy of the financial statement and was satisfied with the Defendant’s financial status as portrayed therein. On March 18, 2004, the Defendant executed a Land and Building Lease (“the Lease”) on behalf of Red Snapper in which he unconditionally guaranteed the full payment and performance of all Red Snapper’s obligations and responsibilities as set forth in the Lease. In December 2004, Red Snapper abandoned the Coach House, defaulted on the Lease and relinquished possession to the Plaintiff. The Plaintiff also alleges that the Defendant wrongfully removed various items of its personal property from the premises. The Defendant filed his Chapter 7 petition in this court on October 14, 2005. On December 6, 2005, he filed an amendment to his schedules which evidences liabilities of $1,348,056.16 and assets of $415,420.00, his liabilities therefore exceeding his assets by some $932,636.00. As stated above, the Plaintiff filed its Complaint on February 6, 2006. The Defendant apparently filed his Answer in his bankruptcy case, but never filed it in this proceeding. The Plaintiff filed its Motion for Summary Judgment on June 2, 2006, supported by the Affidavit of Ben H. Levy, managing member for the Plaintiff (“Levy Affidavit”). A hearing was conducted on June 27, 2006. By the time of the hearing the Defendant had not responded to the Motion for Summary Judgment. The court gave him eight days to respond, or have summary judgment entered for the Plaintiff. The Defendant filed his Response with Affidavit attached on July 5, 2006. The Plaintiff filed a Reply on July 10, 2006, and the matter was then taken under submission. 2. Discussion a. The summary judgment standard Federal Rule of Civil Procedure 56(c), made applicable in bankruptcy by Bankruptcy Rule 7056, provides that summary judgment is appropriate and “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” The Supreme Court has observed that this standard provides that 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 genuine issue of material fact. As to materiality, the substantive law will identify which facts are material. Only disputes over facts which might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)(emphasis in original). The summary judgment standard is set out in Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986): [T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, on which that party will bear the burden of proof at trial. In such a situation, there can be “no genuine issue as to any material fact,” since a complete failure of proof concerning an 160essential element of the nonmoving party’s case necessarily renders all other facts immaterial. The Sixth Circuit has opined that “[r]ead together, Liberty Lobby and Celotex stand for the proposition that a party may move for summary judgment asserting that the opposing party will not be able to produce sufficient evidence at trial to withstand a directed verdict motion.” Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.1989). b. Non-dischargeable debt pursuant to section 523(a)(2)(B) The Plaintiff seeks to have the debt it claims the Defendant owes it declared non-dischargeable pursuant to Bankruptcy Code section 523(a)(2)(B). It makes no argument in regard to section 523(a)(2)(A). In order to except a debt from discharge pursuant to section 523(a)(2)(B), the Plaintiff must demonstrate that the Defendant obtained money, property, services, or an extension, renewal, or refinancing of credit, by use of a statement in writing that is materially false respecting the Defendant’s financial condition, on which the Plaintiff reasonably relied, and that the Defendant caused to be made or published with intent to deceive. The party objecting to discharge must prove each element by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 660, 112 L.Ed.2d 755 (1991). Here the Defendant offered a written statement respecting his financial condition. The financial statement, a copy of which was attached to the Plaintiffs Complaint as Exhibit B, consists of two typed pages, unsigned and undated, containing the Defendant’s name, mailing address, birth date, and Social Security number, and setting out a list of “Assets” and a list of “Debts.” This statement does not indicate the period for which it was prepared, although the Defendant has stated that it was prepared for the last quarter of 2003. The Defendant has not denied that he offered it to the Plaintiff as a written representation of his financial condition. The Plaintiff alleges that the financial statement is materially false in that the information in it “offers a substantially untruthful picture of the financial condition of the debtor that affects the creditor’s decision to extend credit.” Insouth Bank v. Michael (In re Michael), 265 B.R. 593, 598 (Bankr.W.D.Tenn.2001). The Plaintiff points to representations made in the financial statement concerning the Defendant’s assets which are contradicted by Schedule B — Personal Property filed in his bankruptcy case. While the financial statement shows a total of $1,340,000.00 in assets attributable to two restaurants (Furlong’s in Lexington and another Furlong’s in Louisville), six horses, coins, jewelry, and art, Schedule B lists no such assets at the time if the bankruptcy filing. In regard to the restaurants, Red Snapper filed its Chapter 7 petition (Case No. 05-55310) simultaneously with the Defendant’s. The Statement of Financial Affairs contained therein states that Furlong’s operated at a loss in 2004; Schedule B lists stock in the Louisville restaurant as having no value and notes that the restaurant is operating at a loss. There is no record of what happened to the horses listed as assets on the financial statement. The Defendant testified at a 2004 examination that he sold the coins throughout the year 2004 but had no record of such sales. He further testified that “most of’ the jewelry belonged to his then wife, and that “some of’ the art belonged to her. (Tr.2004 Exam., pp. 17-19). He made similar statements in his Affidavit. There are similar discrepancies in the debts listed on the financial statement and 161the liabilities scheduled in the Defendant’s bankruptcy case. The Defendant contends by way of his Affidavit that the financial statement was correct for the period it was purportedly prepared (the last quarter of 2003), and “not materially inaccurate” when it was offered in February 2004. The Defendant blames the discrepancies alleged by the Plaintiff on his having expended all his resources trying to keep Furlong’s going. Without records of transactions, however, or other credible evidence to counter the Plaintiffs allegations, the generalized statements contained in the Affidavit are merely self-serving and insufficient to allow him to prevail over the specific information provided by Plaintiff. As concerns the Plaintiffs reliance on the financial statement, it must show that it actually relied on the statement, and that its reliance was “reasonable,” a more demanding standard than “justifiable” reliance. Mester v. Brevard (In re Brevard), 200 B.R. 836, 845 (Bankr.E.D.Va.1996). Levy’s Affidavit states that the financial statement affected the Plaintiffs decision to extend the Lease to the Defendant (Levy Aff., ¶ 3), indicating actual reliance. As to the requirement of reasonableness, the Plaintiff contends that nothing on the face of the financial statement indicated a problem. Levy’s Affidavit relates the research the Plaintiff conducted in regard to the information provided in the financial statement, information that did not raise any obvious red flags (Levy Aff., ¶ 5). The Plaintiff points out that the Defendant failed to identify the true extent of his interests in the jewelry and art, and further did not indicate on the financial statement that he only had a 6% ownership interest in Louisville Cafe, LLC, the entity doing business as Furlong’s in Louisville. The court therefore concludes that there is nothing in the record in this matter which indicates that the Plaintiffs reliance on the information contained in the financial statement was unreasonable. c. Nondischargeable debt pursuant to section 523(a)(6) A debt may be found to be nondischargeable if it is “for willful and malicious injury to another entity or the property of another entity.” 11 U.S.C. § 523(a)(6). Conversion, in Kentucky the wrongful exercise of dominion and control over the property of another, may be considered a willful and malicious injury. Call Federal Credit Union v. Sweeney (In re Sweeney), 264 B.R. 866 (Bankr.W.D.Ky.2001). The standard for determining such an injury has been articulated by the United States Supreme Court in Kawaauhau v. Geiger, 523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998). Only a debt resulting from a “deliberate and intentional injury” will be excepted from discharge under section 523(a)(6). Id. at 61, 118 S.Ct. at 977. Further, “[o]nly acts done with the intent to cause injury-and not merely acts done intentionally-can cause willful and malicious injury.” In re Markowitz, 190 F.3d 455, 464 (6th Cir.1999). The Markowitz court went on to say that “unless the actor desires to cause the consequences of his act, or ... believes that the consequences are substantial certain to result from it, he has not committed a willful and malicious injury as defined under § 523(a)(6).” Id. at 464 (internal citation and quotation omitted). As to how the “willful” and “malicious” prongs of section 523(a)(6) are to be treated: The Sixth Circuit has adopted an integrated test.... In this Circuit, under Markowitz, the creditor must demonstrate that the Debtor either (1) intend162ed to cause injury to the Creditor or to the Creditor’s property, or (2) engaged in an intentional act from which the Debtor believed injury would be substantially certain to result.... [M]any courts have determined, post Geiger, that the conversion of a secured Creditor’s collateral is willful and malicious when the facts establish that the Debtor had the requisite intent (whether objective or subjective) to injure the Creditor. Following Geiger and Markowitz, courts in the Circuit have likewise found debts non-dischargeable where the Debtor has converted a secured creditor’s collateral with either an intent to cause injury or where the Debtor believed there was a substantial certainty of injury.... Since a Debtor in a § 523(a)(6) case is unlikely to admit that he or she intended to cause injury, or that he or she was substantially certain that injury would result, this state of mind can be established through circumstantial evidence. In re Sweeney, 264 B.R. at 871-72 (internal citations omitted). The Plaintiff maintains that the Defendant removed items of personal property from the leased premises, and that he knew such removal was substantially certain to cause injury to the Plaintiff. In support of its position, the Plaintiff has attached copies of lists of the items in question. Exhibit C to the Plaintiffs Affidavit purports to list the inventory that was on the premises when the Defendant entered into the Lease; this list was attached to the Lease. Exhibit D purports to list the inventory that was unaccounted for as of January 16, 2005, after the premises were abandoned. The Plaintiff points to testimony of the Defendant to the effect that he removed kitchen items and equipment from the restaurant (Tr.2004 Exam., pp. 36-37). The Defendant’s claim that the Plaintiff allowed him to remove these items is unsupported by any documentation. The Defendant also admitted that he knew the list of equipment attached to the Lease was the “personal property” of the Plaintiff (Tr.2004 Exam., p. 79). The Plaintiff contends that the Defendant has admitted that he engaged in the intentional act of removing the Plaintiffs property, an action he knew would cause substantial injury to the Plaintiff, and that this “willful and malicious” injury warrants a finding that the debt in regard to the removal of personal is non-dischargeable pursuant to section 523(a)(6). The measure of damages for conversion is the value of the converted property. See In re Sweeney, 264 B.R. at 870. The Plaintiff states that the value of the items removed was $20,880.85. In consideration of all of the foregoing, it is the opinion of this court that the Plaintiff has carried its burden of demonstrating that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law that the debt the Defendant owes to it in regard to abandoning the Lease, i.e., $90,000.00 for non-payment of rental installments, and $11,180.40 for non-payment of ad valorem taxes, is nondischargeable pursuant to Bankruptcy Code section 523(a)(2)(B). Further, the $20,880.85 debt owed for the value of personal property the Defendant removed from the Plaintiffs property is non-dischargeable pursuant to Bankruptcy Code section 523(a)(6). An order in conformity with this opinion will be entered separately.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494125/	ORDER JAMES G. MIXON, Bankruptcy Judge. On October 8, 2005, Charles Preston Tyson, Sr., (“Debtor”), filed a voluntary petition for relief under the provisions of Chapter 13 of the United States Bankruptcy Code. The Debtor claimed a residence located at 4766 Highway 157, Judsonia, Arkansas, as a homestead pursuant to the Arkansas Constitution, Article 9, Sections 3 and 4. He valued the exemption at $371,000.00. No party in interest objected to the Debtor’s claim of homestead. According to the petition, the homestead was subject to a mortgage securing a debt in the sum of $179,000.00. The petition also indicated that title to the home was held as tenancy by the entirety. In April of 2006, the Debtor sold his homestead. After dividing the proceeds with his former spouse, the net proceeds in the sum of $70,425.08 were paid to the Chapter 13 Trustee. On August 8, 2006, the Debtor filed a motion for an order directing the Chapter 13 Trustee to refund the sale proceeds to the Debtor. On the same date, the Trustee filed a motion to modify the plan, proposing to distribute the $70,425.08 to unsecured creditors. The Trustee also objected to the motion for refund. The motions of the Debtor and the Trustee were heard at Little Rock, Arkansas, on August 30, 2006, and were taken under advisement. Both parties have filed briefs. The matters before the Court are core proceedings pursuant to 28 U.S.C. § 157(b)(2)(L), and the Court may enter a final judgment in this case. FACTS The Debtor testified that at the time he filed for bankruptcy on October 8, 2005, he was divorced. He stated that the divorce decree provided that the homestead was to be sold on or before February 16, 2006, and the net proceeds were to be divided evenly with his former spouse after payment of closing cost and the mortgage indebtedness. The Debtor stated that after the homestead was sold, his intentions were to purchase a new home with his share of the sale proceeds. The Debtor testified that he wanted to keep the homestead, but the divorce court ordered it sold. He stated he tried to negotiate with his former spouse to purchase her interest, but was unsuccessful. The divorce decree was not introduced into evidence, and there was no evidence offered by either party as to who lived in the homestead, if anyone did, from the date the divorce was entered until the home was sold. ARGUMENT The Trustee argues that she should distribute the proceeds from the sale of the Debtor’s residence to creditors because, under Arkansas law, he is ineligible to claim the homestead exemption since he 241abandoned his homestead. The Trustee contends that the sale proceeds would be available for distribution in a Chapter 7 case and, therefore, must be distributed to creditors pursuant to 11 U.S.C. § 1325(a)(4). The Debtor argues that he never abandoned his home, and, therefore, the proceeds should be exempt and he should be able to use those proceeds to buy a new homestead. DISCUSSION The Trustee’s motion to modify plan is without merit for two reasons. First, the Trustee simply has no statutory grounds to file a modified plan. Section 1323 of the Bankruptcy Code provides that, “[t]he Debtor may modify the plan at any time before confirmation.... ” However, section 1329 permits the trustee to propose a modified plan only after confirmation. 11 U.S.C. § 1329 (2000); In re Dunlap, 215 B.R. 867, 869 (Bankr.E.D.Ark.1997). The Debtor’s original plan was filed on October 8, 2005, and the case docket reflects that an objection to confirmation was filed by Betty Tyson on December 12, 2005. After several continuations, the Debtor and Betty Tyson settled the objection and submitted an agreed order which was signed by the Court and entered on the docket on July 25, 2006. Thereafter, the Chapter 13 Trustee’s office entered an order confirming the Debt- or’s plan on August 3, 2006.1 On August 10, 2006, the Chapter 13 Trustee’s office entered an order revoking the August 8, 2006 order of confirmation, stating that the order was entered in error. There is no confirmed plan as of this date. Pursuant to 11 U.S.C. § 1323, the Trustee had no authority to file a modified plan prior to confirmation. 8 Collier on Bankruptcy ¶ 1323.3 (Alan N. Resnick & Henry J. Sommer, et al. eds., 15th ed. rev.2006) (stating that the rule restricting who may file a modified plan prior to confirmation comports with the voluntary nature of chapter 13). Similarly, Section 1329 limits the Trustee to proposing a modified plan only after confirmation. The Trustee’s motion is also without merit because the Debtor claimed the property in question as a homestead when the case was filed on October 8, 2005, and no one objected, including the Trustee. Exemptions are determined at the time a case is filed. In re Jones, 193 B.R. 503, 507 (Bankr.E.D.Ark.1995) (citing Armstrong v. Peterson (In re Peterson), 897 F.2d 935, 937 (8th Cir.1990)). Federal Rule of Bankruptcy Procedure 4003(b) requires that a party in interest file any objection to a claim of exemption within thirty days after the meeting of creditors. If no objection is filed, the exemption is conclusively established and cannot be collaterally attacked. Taylor v. Freeland & Kronz, 503 U.S. 638, 643, 112 S.Ct. 1644, 118 L.Ed.2d 280 (1992). The docket reflects that the Trustee did not object to the homestead exemption within the period provided by the Bankruptcy Code. The Trustee may not now disguise a belated objection to exemption as a proposed plan modification or a response to the Debtor’s motion for refund. For these reasons, the Debtor’s objection to the modified plan filed by the Trustee is sustained, and the Debtor’s motion for a refund is granted. The Trustee is 242ordered to pay the proceeds of the sale of the Debtor’s homestead in the sum of $70,425.08 to the Debtor. IT IS SO ORDERED. . The confirmation order was entered by the Chapter 13 Trustee pursuant to General Order 11, adopted on March 12, 2004. The Bankruptcy Court's General Orders for the Eastern and Western Districts of Arkansas can be found at www.areb.uscourts.gov.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494126/	MEMORANDUM DECISION SARAH SHARER CURLEY, Bankruptcy Judge. I. PRELIMINARY STATEMENT This matter comes before the Court on Chapter 7 Trustee Lothar Goernitz’s (the 253“Trustee”) “Application for Order Directing Title Security Agency of Arizona dba Premier Title Group to Show Cause Why it Should not be Held in Contempt of Court” (“Application”), filed September 6, 2006. This Court issued the requested Order to Show Cause on September 8, 2006, setting a hearing on the matter. On September 22, 2006, Title Security of Arizona dba Premier Title Group (“Premier”) filed its “Response to Trustee’s Application for Order Directing Title Security Agency of Arizona, d/b/a/ Premier Title Group to be Held in Contempt of Court” (“Response”). A hearing on the matter was held on October 16, 2006, at which time the Trustee requested additional time to provide the Court with further legal support for his position. The Court ordered the Trustee to submit any supplemental Arizona law on which he intended to rely by October 20, 2006. Premier was ordered to file its Response by November 3, 2006; thereafter the matter would be deemed under advisement. This Decision shall constitute the Court’s findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52, Bankruptcy Rule 7052. The Court has jurisdiction over this matter, and this is a core proceeding. 28 U.S.C. §§ 1334 and 157 (West 2006). II. FACTUAL DISCUSSION The Debtor filed its Chapter 11 petition on August 31, 2005, and on December 29, 2005, Lothar Goernitz was appointed the Chapter 11 Trustee. The Debtor’s principal asset was real property located at 4612 E. Foothills Drive, Paradise Valley, Arizona (“Property”), which was heavily encumbered by a number of liens and encumbrances. The Trustee concluded that he was unable to reorganize the Debtor, and the case was converted to a Chapter 7 on February 9, 2006. Ultimately the Trustee determined to sell the Debtor’s Property. On March 15, 2006, the Trustee filed his Motion to Sell the Property for the amount of $4,900,0001 to David Yates or his nominee (“Buyer”). The Trustee estimated that the amount of the liens and encumbrances against the Property approximated $4,735,742, so that the creditors of the estate would benefit from such a sale. The Buyer agreed to make a deposit of $100,000. However, the second lienholder on the Property had already filed a motion for relief from the automatic stay and opposed the sale. While the Motion to Sell the Property was pending, the Trustee filed a Notice of Addendum with the Court on April 6, 2006, extending the proposed closing on the Property to May 14, 2006, but increasing the purchase price by $30,000 to $4,930,000 to cover any accrued interest to the lienholders as 'a result of the delay in the closing. The deposit was increased from $100,000 to $330,000, which included a cash component of $230,000, and required the Buyer to execute a promissory note (“Note”) in the amount of $100,000 in favor of the estate, and the deposit became non-refundable as of April 4, 2006.2 The Court conducted a hearing on the Trustee’s Motion on April 18, 2006, and approved the sale, overruling the objections of the second lienholder. The Court made it clear to the parties that if the sale did not close in a timely manner, the Court would vacate the stay to allow the second lienholder to foreclose on its lien. No sale order was initially submitted by the Trustee.3 On May 16, 2006, the Court executed 254the Order approving the sale of the Property; however, at this point, the Buyer should have deposited the sum of $330,000, which had become non-refundable.4 Because of a clerical error, the Trustee submitted a Motion to Set Accelerated Hearing on his Motion to Amend the Order Authorizing Sale to the Court on May 17, 2006, which provided for a closing of the sale transaction on May 18, which was denied.5 Finally, on May 18, 2006, this Court executed a Stipulated Amended Sale Order6 as the final order governing the Trustee’s sale of the Property. The May 18, 2006 Order stated that if the Buyer failed to close escrow by May 18, 2006, the Buyer’s deposit'of $330,000, consisting of the earnest money deposit of $230,000 (“the Earnest Money”) and the Note would be forfeited to the Trustee. After the sale failed to close on May 18, the Trustee made written demand on Premier for the turnover of the Earnest Money and the Note. On May 25, 2006, Premier contacted the Trustee to notify him that another party might be interested in purchasing the Property. However, by May 23, 2006, the Court had executed an order vacating the stay to allow the first and second lienholders to foreclose on the Property.7 The Trustee’s counsel apparently notified Premier of the foreclosure or trustee’s sale of the Property later in the day on May 25.8 In Premier’s Response to the Order to Show Cause, and at the subsequent hearing, Premier argued that it had never been able to cash the Earnest Money checks and had never obtained the original Note. At the hearing on the Order to Show Cause, Premier’s counsel stated that the Trustee should have been aware that Premier never had more than a copy of the Note. The Trustee alleged, however, that he was not made aware that Premier did not have the Earnest Money in its possession until Premier’s Response was filed.9 The Response revealed that on March 14, 2006, Premier’s escrow agent, a Ms. Roth, had received the Buyer’s initial earnest money check for $100,000. At that time she had opened an escrow account and generated an escrow receipt; however, since she was in the process of leaving Camelback Title, where she was employed, and commencing employment at Premier, she cancelled the escrow account at Camel-back Title and sent the check back to the Buyer, requesting that he change the payee on the draft to Premier. She then notified the Trustee of the circumstances surrounding the cancellation of the escrow, and the Trustee executed a facsimile copy of the escrow cancellation.10 On April 5, 2006, Premier received the original Earnest Money check from the Buyer, in the amount of $100,000, with the payee now listed as Premier. It also received another check for the additional earnest money in 255the amount of $130,000.11 Premier’s accounting department presented the checks for payment, but the payor bank declined to honor the checks because there were insufficient funds in the Buyer’s account, and the checks were returned to Premier.12 It is unclear when the checks were actually received by Premier. Premier alleges that Ms. Roth only discovered the return of the dishonored checks after the Trustee’s first written demand for the turnover of funds because of the Buyer’s failure to close the escrow on or about May 18.13 Premier alleges that Ms. Roth did not notify Premier’s management or the Trustee;14 rather, in an attempt to remedy the situation, Ms. Roth notified the Buyer’s realtor and requested that the Buyer honor the checks. When Ms. Roth presented the checks for payment to the Buyer’s bank in June, the checks were again not honored. In her affidavit, Ms. Roth stated that she did not notify her supervisor about the dishonor of the Buyer’s checks until she received the Trustee’s demand letter in August.15 Meanwhile, the Trustee continued with his efforts to obtain possession of the Earnest Money and the Note, to no avail. The Trustee filed a “Motion to Enforce the' Amended Sale Order by Directing Premier Title Company as Escrow Agent to Deliver Forfeited Escrow Deposit to Trustee” on June 15, 2006. However, Premier did not respond to the Motion, nor did it appear at the hearing on the Motion on August 10, 2006. The Court granted the Motion by Order dated August 15, 2006,16 and the Trustee continued, without success, to attempt to obtain the Earnest Money and the Note from Premier. On August 28, 2006, the Trustee stated to Premier that if the Earnest Money and the Note were not in his possession within the week, the Trustee would file a motion seeking to hold Premier in contempt of Court for failure to comply with the August 15, 2006 Order. On August 28, 2006, Ms. Stobbe, another Premier employee and the supervisor of Ms. Roth, wrote a letter to the Trustee, informing him that there had been insufficient funds in the Buyer’s account to cover the Earnest Money checks at the time of presentment. Apparently, neither the Trustee nor his counsel received this letter;17 and the Trustee proceeded to file the current Application for an Order to Show Cause. By the time of the October 16, 2006 hearing, the Trustee was aware that Premier had been unable to obtain the Earnest Money from the Buyer and that Premier had only obtained a copy of the Note. Despite the fact that Premier had never obtained possession of the Earnest Money, the Trustee demanded that Premier turn 256over its own funds as the Earnest Money. In support of this position, the Trustee argued that Premier owed a fiduciary duty to all parties involved in the transaction. When its employee allegedly breached this duty, Premier became absolutely liable through respondeat superior to turn over the Earnest Money. Because Premier did not so act, the Trustee now requests that this Court hold Premier in civil contempt and award sanctions in the amount of $330,000 (the sum of the value of the missing Earnest Money and the Note) to the Trustee, along with payment of his attorneys’ fees and costs. Premier has turned over a copy of the Note to the Trustee. III. LEGAL DISCUSSION The question presented in this case is whether Premier had absolute liability to turn over funds to the Trustee, although Premier never possessed said funds. As an alternative ground for relief, the Trustee requests that Premier be held in civil contempt of court for its failure to comply with a final order of this Court. In a bankruptcy case, any entity having property of the estate in its possession, custody, or control, is generally required to turn over that property to the trustee if the trustee may use, sell, or lease the property, or if the debtor may exempt the property. 11 U.S.C. § 542 (West 2006). Because this Code provision requires that the entity have possession of such property, an entity that is not in possession of the property cannot be compelled to return the property to the estate. The courts have generally recognized one exception to the rule. When a fiduciary breaches a duty owed to a party by wrongfully disbursing the funds, the fiduciary may have an absolute liability to return the amount of the funds to the party, although the funds are no longer in the fiduciary’s possession. Tivon v. England, 484 F.2d 639, 641 (9th Cir.1973) (holding that “a fiduciary such as an escrow agent may be held accountable in a turnover proceeding for funds disbursed contrary to the bankruptcy law”); see, e.g., Miller v. Craig, 27 Ariz.App. 789, 791, 558 P.2d 984, 986 (1976). It is well established that in Arizona, “[t]he relationship of the escrow agent to the parties to the escrow is one of trust and confidence.” Maganas v. Northroup, 135 Ariz. 573, 576, 663 P.2d 565, 568 (Ariz.1983). Thus, an escrow agent may be held absolutely liable for breaching a fiduciary duty to any or all parties to the escrow agreement. Arizona’s common law imposes two distinct fiduciary duties on escrow agents. The first is the duty of strict compliance with the terms of the escrow agreement; the second is the duty to disclose fraud when the escrow agent has actual knowledge of the fraud and failure to disclose the fraud would assist in its perpetration. Id. at 576, 663 P.2d at 568; Sherman v. First American Title Ins. Co., 201 Ariz. 564, 570, 38 P.3d 1229, 1235 (Ariz.App.2002). Accordingly, to be .absolutely liable for breaching its fiduciary duty, an escrow company must breach the escrow contract or assist in perpetrating a fraud. Arizona’s Legislature has imposed additional duties on escrow agents by statute. Under A.R.S. § 6-834(A) (West 2006), an escrow agent must immediately deposit any checks it receives. Escrow companies must implement an internal control structure to ensure employees are properly supervised. Id. § 6-841(A). However, enforcement of these statutes has been delegated to the superintendent of financial institutions. Id. § 6-101. The statutes create no private right of action to an aggrieved party; however, this failure does not limit any common law or other 257statutory rights of action a party may have. Id § 6-835. The Trustee cites a number of cases from other jurisdictions in which escrow agents breached their fiduciary duties and were held liable for reimbursing the injured parties. See Katleman v. U.S. Communities, Inc., 197 Neb. 443, 249 N.W.2d 898 (1977) (holding that where escrow agent held earnest money check without depositing it, agent breached its fiduciary duty and was liable to injured party for the full amount of the earnest money check); Chilton v. Pioneer Nat'l Title Ins. Co., 554 S.W.2d 246 (Tex.Civ.App.1977) (holding that where escrow company held earnest money checks instead of depositing them, a jury question existed as to whether the escrow company was negligent); Mefford v. Security Title Ins. Co., 199 Cal.App.2d 578, 18 Cal.Rptr. 877 (Cal.App.1962) (holding that, where escrow company held earnest money checks instead of depositing them, escrow company could be hable for negligence; but escrow company was not liable because plaintiffs themselves did not comply with escrow instructions and caused their own loss). Although these cases do not apply Arizona law regarding breach of an escrow agent’s fiduciary duties, they are instructive. Each of the cases relied upon by the Trustee consider factual situations in which the escrow companies held the checks without presenting them for payment. In the case at bar, Premier did not hold the Earnest Money checks indefinitely, but it does acknowledge that it received the checks on or about April 5. Moreover, the Court conducted the hearing on the Trustee’s Motion to Sell on April 18, 2006 and approved the sale at that time. The Trustee argues that said facts alone should require that Premier be held absolutely liable to the estate. However, the Trustee’s delay in obtaining a final sale order from the Court necessarily caused confusion. In essence a delay in finalizing the sale transaction perhaps led to Premier’s ultimately simply placing the Earnest Money in the file. Even considering the delivery of the Earn'est Money to Premier on April 5, 2006, Premier still presented the checks for payment and learned of their dishonor within a relatively short period of time, since Ms. Roth stated that by May 19, 2006, a day after the Sale Order was finalized, she found the dishonored checks from the Buyer in the file. To a certain extent, the delay in the finalization of the Sale Order by the Trustee and the parties allowed Premier’s presentation of the Earnest Money checks for payment to be in a timely manner. The Trustee also relies on Ninth Circuit and Arizona cases involving the wrongful disbursement of funds, which are inappo-site. See Tivon v. England, 484 F.2d 639, 641 (9th Cir.1973) (holding that where funds were disbursed contrary to bankruptcy law, the escrow agent was liable for the amount of the wrongfully disbursed funds); see, e.g., Miller v. Craig, 27 Ariz.App. 789, 791, 558 P.2d 984, 986 (1977) (holding that where escrow agent returned earnest money to buyer without notifying seller contrary to the escrow agreement, escrow agent was liable for the amount of the wrongfully disbursed funds). In each case, the escrow company’s wrongful disbursement of the funds actually caused the loss the injured parties suffered. In this case, no monies were disbursed contrary to the escrow agreement or applicable law. No monies were disbursed at all. Premier also did not breach the terms of the escrow agreement.18 See Maganas, 135 Ariz. at 576, 663 P.2d at 568. 258The Trustee argues that an escrow agent who represents that it is holding earnest money funds in escrow should be estopped from asserting, as a defense to an action by a party seeking to recover those funds, that it never had such funds. The Trustee believes that such a decision would be consonant with the duties imposed on the escrow agents by Arizona law and those cases which allow a recovery to injured parties when escrow agents deviate from the terms of the escrow agreement. However, as noted above, there are only two circumstances under which an escrow agent breaches its fiduciary duties under Arizona law. Maganas, 135 Ariz. at 576, 663 P.2d at 568. The Trustee has presented no evidence that the escrow agreement was breached.19 The question thus becomes whether the escrow agent knew of certain facts regarding the perpetration of a fraud on the Trustee and failed to act on them. The only evidence submitted reflects that a Premier employee discovered the Earnest Money checks would not be honored only after the sale did not close on May 18, 2006. Moreover, Premier was not a cause of the checks being dishonored, and the final order approving the sale of the Property was not docketed until May 18, 2006. Although the Trustee may have a cause of action against the Buyer pursuant to A.R.S. § 12-671(A) (2006), or against Premier for negligence, this Court finds, and concludes as a matter of law, that the Trustee has failed to show a breach of the escrow agreement by Premier or Premier’s participation in a fraud upon the Trustee.20 Premier, as an escrow 259agent, is a neutral depositary for escrow funds, but it does not have a duty to ensure that a party to an escrow transaction has sufficient funds in the party’s account or that every check presented will be honored. After the sale failed to close, Premier may have been negligent when it discovered that the Earnest Money checks that it had received from the Buyer had been dishonored, and failed to notify the Trustee. However, such negligence, if it existed, is not sufficient for this Court to impose absolute liability on Premier requiring that Premier return funds to the Trustee in the amount of the Earnest Money and the Note. The Trustee may pursue Premier in a negligence action; he may pursue the Buyer in an action on the dishonored checks or the Note. However, the Trustee may not use a Motion to Compel Turnover to hold Premier absolutely liable for failing to turn over the Earnest Money and the funds representing the amount of the Note. As noted above, the Court cannot compel a party to turn over property not in its possession. See 11 U.S.C. § 542 (West 2006). As an alternative ground for the relief requested, the Trustee requests that Premier be held in civil contempt of court for its failure to comply with this Court’s turnover Order and that this Court enter a $330,000 judgment against Premier, representing the Earnest Money in the amount of $230,000 and the Note in the amount of $100,000. Bankruptcy courts have the subject matter jurisdiction and the power to impose civil contempt sanctions in order to coerce compliance or to compensate an injured party. In re Rainbow Magazine, 77 F.3d 278, 284 (9th Cir.1996); In re DeVille, 361 F.3d 539, 550-53 (9th Cir.2004). Yet it is well settled that a party’s present inability to comply with a court order is a complete defense to charges of contempt for failure to comply. U.S. v. Rylander, 460 U.S. 752, 757, 103 S.Ct. 1548, 75 L.Ed.2d 521 (1983). The party raising the defense of inability to comply with a court order has the burden of persuasion. Id. Premier satisfied this burden by presenting the employees’ affidavits that the Earnest Money checks were returned marked “NSF.” Because Premier had no Earnest Money to turn over, it may not now be compelled to comply with this Court’s Order to turn over the sum of $230,000, constituting the Earnest Money to be paid by the Buyer. Imposition of civil contempt sanctions would be an abuse of discretion. This Court cannot force compliance from a party that has proven its inability to comply. Additionally, Premier cannot be ordered to pay the Trustee the amount of the Note. The Trustee has not disputed Premier’s assertions that the Trustee was, or should have been, aware that only a copy of the Note was being held in escrow. Moreover, when an original promissory note is unavailable, an action may be brought on a copy of the note. It is undisputed that Premier turned its copy of the Note over to the Trustee. The Trustee may still seek damages on the Note from its maker, the Buyer. The Trustee has failed to show any basis, in law or in fact, to hold Premier absolutely liable for a failure to turn over the original Note. Although Premier may not be held in civil contempt, this Court may nevertheless consider whether some type of sanction is appropriate for Premier’s conduct. In the decision of Rainbow Maga-260nine, the Ninth Circuit considered whether a bankruptcy court’s imposition of sanctions, pursuant to its inherent power, on a nonparty to a bankruptcy ease, was proper. 77 F.3d 278 (9th Cir.1996). In that case, a principal of the debtor had orchestrated the debtor’s bad faith filing, but had signed only the Statement of Financial Affairs. The lower court imposed Fed. R.Civ. P. 11 sanctions of $45,000 on the principal for executing the document, but relied on its inherent power to sanction to impose a sanction of almost $250,000 on the principal for his role in bringing about the bad faith filing. The Ninth Circuit affirmed, reasoning that the inherent power to sanction must necessarily be vested in the lower federal courts “to manage their own affairs so as to achieve the orderly and expeditious disposition of cases.” Rainbow Magazine at 283 (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 43, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991)). In order to manage its cases, the bankruptcy court must have inherent power to sanction conduct which is outside the scope of statutorily sanctionable actions, such as abuse of process or vexatious or dilatory conduct. Id. at 284. Later cases have limited the holding in Rainbow Magazine, allowing a court the power to impose compensatory sanctions only. In re Dyer, 322 F.3d 1178, 1198 (9th Cir.2003). Given the facts in this case, the Court finds Premier’s failure to communicate with the Trustee, its conduct concerning the Trustee’s Motion to Enforce, including its absence at the hearing on August 10, 2006 on said Motion, and its subsequent inexplicable silence in the Response to the Order to Show Cause on the Motion to Enforce to constitute bad faith. Initially, Premier’s employees may not have communicated in a timely manner with the Trustee, but there seemed to be no element of bad faith in their failure to do so. Indeed, after receiving the Trustee’s May 19, 2006 demand letter,21 Ms. Roth contacted the Buyer’s real estate agent and believed that the Buyer would place sufficient funds in his account so that the Earnest Money checks would be honored. Such a course of action could only help, not harm, the Trustee and the estate. While the decision to pursue that course of action may have been erroneous or negligently made, there is no evidence that it was made with the intent to act in bad faith or harm the Trustee. Negligent conduct is not enough to support an award of sanctions under the Court’s inherent authority. Fink v. Gomez, 239 F.3d 989, 992-93 (9th Cir.2001). However, Ms. Roth, or some other employee of Premier, should have taken additional action when the collected funds were not immediately received from the Buyer after Premier’s May 19, 2006 discovery of the Buyer’s dishonored checks. The Trustee continued to demand the turnover of the Earnest Money and Note from Premier. As noted above, he filed a Motion to Enforce Amended Sale Order By Directing Premier Title Company as Escrow Agent to Deliver Forfeited Escrow Deposit to Trustee (“Motion to Enforce”), on which a hearing was conducted on August 10, 2006. Premier failed to respond to the Motion and failed to appear at the August 10 hearing.22 Although Premier may not 261be sanctioned solely for failing to comply with the Court’s Orders when it lacks the ability to do so, there is no reason why Premier should not have responded to the Trustee’s Motion to Enforce or appeared at the August 10 hearing. Even at the October 16, 2006 hearing on the Order to Show Cause, Premier presented no reason for its continuing delay to communicate with the Trustee, nor for its failure to appear at the August 10, 2006 hearing on the Motion to Enforce. At the Order to Show Cause Hearing, counsel for Premier only stated that Ms. Roth panicked and did not notify her supervisor, Ms. Stobbe, until late August 2006, that the Buyer’s checks were dishonored. Such statements do not explain why Ms. Stobbe and Premier ignored the Trustee’s Motion to Enforce and failed to appear at the August 10, 2006 hearing, when Ms. Stobbe had notice of both by Mid-June.23 This contumacious behavior, while the Motion to Enforce was pending and after the August 10 hearing, has caused the estate and the Court to waste significant resources. Premier was given the opportunity to explain its silence not only when Ms. Stobbe first learned of the Buyer’s dishonored Earnest Money checks, but also later on, in a Response to the Motion to Enforce, at the August 10, 2006 hearing as to which Premier received notice, in its Response to the Order to Show Cause issued by the Court, and again at the October 16 hearing on the Order to Show Cause. It has failed to provide a plausible explanation for this ongoing failure to provide the Trustee and the Court with any information. Given the lack of sufficient reason for Premier’s systematic refusal to communicate, the Court must conclude that the delay constituted the bad faith, vexatious conduct of the type sanctionable under the Court’s inherent authority. See Rainbow Magazine, 77 F.3d at 283. “As long as a party receives an appropriate hearing, ... the party may be sanctioned for abuses of process occurring beyond the courtroom.” Chambers v. NASCO, 501 U.S. 32, 57, 111 S.Ct. 2123, 2140, 115 L.Ed.2d 27 (1991). It is clear that a court may assess attorney’s fees when a party has acted vexatiously or in bad faith, not only to police transactions concerning the court itself, but also to make a party whole “for expenses caused by his opponent’s obstinacy.” Id., 501 U.S. at 45-46, 111 S.Ct. at 2133 (quoting Hutto v. Finney, 437 U.S. 678, 689, n. 14, 98 S.Ct. 2565, 2573, n. 14, 57 L.Ed.2d 522 (1978)). The Trustee has adequately demonstrated that Premier’s “obstinacy” was bad faith, vexatious conduct, which ultimately caused the Trustee to expend significant attorneys’ fees and costs. Based upon Ninth Circuit and Supreme Court authority, it is appropriate for the Court to impose a narrowly tailored sanction on Premier consisting of compensatory damages. The Court finds the amount of attorneys’ fees and costs incurred by the Trustee from the preparation of his Motion to Enforce until the rendering of the Decision as an appropriate compensatory award.24 262 IV. CONCLUSION Based upon the foregoing, the Court concludes that the Trustee has failed to establish that Premier should be held absolutely liable to the Trustee for inadvertently failing to obtain $230,000 in Earnest Money from the Buyer or the original Note. Similarly, Premier cannot be held in civil contempt, because it does not have the funds in its possession. However, the silence of Premier from Mid-June 2006 through August 2006, and its failure to attend the August 10, 2006 hearing on the Trustee’s Motion to Enforce support the recovery of the Trustee’s attorney’s fees and costs in this matter for the period from the preparation of the Motion to Enforce by counsel for the Trustee until the rendering of this Decision. The inherent ability of this Court to sanction a party had been properly invoked. The Trustee also is not barred from commencing a separate action or proceeding against Premier or the Buyer as outlined in this decision. The Court will execute a separate order incorporating this Memorandum Decision. . See Docket Entry No. 76. . See Docket Entry No. 81. .The Court’s electronic system reflects that the Trustee first submitted the Sale Order on 254May 16, 2006, and it was executed by the Court within 12 minutes of being received. . See Docket Entry No. 86. . See Docket Entries No. 87 and 88. . See Docket Entry No. 90. . See Docket Entry No. 92. . See "Reply in Support of Trustee’s Application for Contempt Order” ("Reply”), Docket Entry No. 123, Exhibit B, at 1, ¶ 3. . Premier asserted that it mailed letters on August 28, 2006, to the Trustee’s attorneys, the Buyer's realtor, and the Trustee’s realtor. The letters stated that the Buyer’s Earnest Money checks had been returned to Premier for insufficient funds. See Response, Exhibit C. The Trustee’s attorneys and realtor presented affidavits avowing that they had never received these letters. Reply, Exhibits E-G. . See Reply, Exhibit K. . As noted in the factual discussion, the Buyer initially proposed a deposit of $100,000, which was increased to $130,000 because of the delay of the closing to May 14, 2006. Subsequently the cash component of the deposit was increased to $230,000, and the Buyer also provided a Note in the amount of $100,000. . The Court has reviewed all of the Exhibits presented by the parties, and although Premier initially received the Earnest Money checks on or about April 5, 2006, it is unclear when the checks were presented to the bank. Ms. Roth stated, at her deposition, that she believed the accounting department simply placed the dishonored checks in the file between April 5, 2006, and May 19, 2006, when she discovered them. Reply, Exhibit H at 81-82, 124. . See Reply at 8-9. . Id. . See Reply, Exhibit H at 134. . See Docket Entry No. 104. . See Note 9, above. . The parties never presented a copy of the escrow agreement, so it is impossible, on this 258record, for the Court to conclude that there was any breach of the escrow agreement. . See note 18, above. The Court does not have a copy of the agreement. . The Trustee argues that Premier’s knowledge that the Earnest Money checks had been dishonored, coupled with its failure to notify the Trustee, are sufficient to constitute a fraud. See A.R.S. § 12-671(A) (West 2006) and A.R.S. §§ 13-2101 et seq. (West 2006). However, there are material differences between the standard of proof necessary to find a check drafter who presents a "bad check" liable, and that necessary to find a third party liable of fraud. While it is true that "intent to defraud” is required before one may be held liable under Section 12-671(A) for presenting a bad check, the standard of proof is similar to that of absolute liability. "Intent to defraud" may be proven without reference to any fact other than the balance in the check drafter’s bank account during the relevant period of time. Id. § 12-671(C). A civil penalty (a statutorily defined fine) may be imposed. Id. § 12-671(C). However, in this case, Premier did not present an insufficient funds check; it was the Buyer who so acted. As to a finding that Premier is liable on the basis of fraud, the requisite intent to defraud must be shown. See, e.g., A.R.S. §§ 13-2202, 13-2206, 13-2310-11. In order to be held liable for participating in a fraud on one of the parties to the escrow, "the facts actually known to the escrow agent [must] present substantial evidence of fraud.” Sherman v. First American Title, 201 Ariz. 564, 570, 38 P.3d 1229, 1235 (Ariz.App.2002) (emphasis in original). Prior to May 19, the day after the closing on the Property, Premier held Earnest Money checks reflecting insufficient funds in the Buyer's accounts. However, it is unclear from this record when Premier gained such knowledge. Moreover, without additional facts, it is unclear why a receipt of insufficient funds checks by Premier, within a little over 30 days from the Buyer’s presenting said checks to Premier, would prove that Premier was perpetuating a fraud on the Trustee. The affidavit of Ms. Roth may reflect negligence, by her or Premier's accounting department, but not necessarily fraud. The Court also did not obtain the final Sale Order from the Trustee until May 18, 2006, and the Property was sold almost immediately thereafter at a trustee's sale. Therefore, it is difficult to hold Premier liable for fraud, when the facts indicate that negligence by one or more of the parties to the transaction may have ultimately led to a loss to the estate. Moreover, the Trustee has not pled fraud with the requisite particularity, nor has he commenced an adversary proceedings alleg259ing fraud. Although the Court finds Premier’s lack of candor and/or silence for a prolonged period of time untoward, the Court may not conclude that such conduct is fraudulent. . It appears that the May 19 demand letter was directed to Ms. Roth alone. See Reply, Exhibit A. . Premier had notice of the hearing through its employee, Ms. Roth, and her supervisor, Ms. Stobbe, both of whom were served with the Notice of the Hearing via mail on June 19, 2006. See Docket Entry No. 99. Additionally, the certificate of mailing attached to the Motion to Enforce requesting a hearing indicates that it was sent via mail and email to both Ms. Roth and Ms. Stobbe at Premier on 261June 15, 2006. See Docket Entry No. 97. Accordingly, the Court finds Premier’s assertion that management was unaware of the problem until late August to be implausible and not supported by the evidence presented to the Court. . See Note 22, above. . The Trustee has requested a damage award in excess of $330,000. However, the Court's inherent authority to sanction authorizes compensatory sanctions only. In re Dyer, 322 F.3d 1178, 1196-98. The Court may not consider levying punitive damages. Id. Given the amount of compensatory damages requested by the Trustee in this matter, yet fully taking into account the reprehensible conduct of Premier, from Mid-June 2006 through the end of August 2006, the Court finds that the award of $330,000 to be so excessive that it *262approaches a punitive damage award, cf. BMW of North America, Inc. v. Ira Gore, Jr., 517 U.S. 559, 575, 580, 583, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). Premier's silence after being served with the Motion to Enforce, its failure to attend the duly notice hearing on August 10, 2006, and its ongoing silence for a period of two months, is misconduct for which the Trustee should receive his attorneys’ fees and costs, but any award beyond that would violate Constitutional due process. See Id.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494127/	MEMORANDUM AND ORDER DENYING MOTION FOR POST-PETITION ATTORNEYS’ FEES WITHOUT PREJUDICE LESLIE TCHAIKOVSKY, Bankruptcy Judge. Defendant Burlingame Capital Partners II, L.P. (“Burlingame”) seeks an award of post-petition attorneys’ fees and costs as part of its judgment in the above-captioned consolidated adversary proceedings. For the reasons stated below, the request will be denied without prejudice. The above-captioned adversary proceedings were filed in two related chapter 11 cases — i.e., the case of Qmect, Inc. (“Qmect”), a corporation, and the case of 268Fred and Linda Koelling (the “Koellings”), shareholders of Qmect and guarantors of some of its obligations. In one of the adversary proceedings, Qmect sought to equitably subordinate Burlingame’s claim and objected to the claims filed by Burlin-game and its affiliate, Electrochem Funding, LLC (“Funding”). This proceeding was filed as an original matter in the bankruptcy court. The other two adversary proceedings were filed in state court initially, either by or against Qmect and/or the Koellings. Cross-complaints were filed in each proceeding. Both proceedings were removed to the bankruptcy court after Qmect’s and the Koellings’ chapter 11 cases were filed. The issues raised in these two proceedings were all governed by state law. The Qmect case has since been converted to a case under chapter 7 of the Bankruptcy Code. Burlingame had previously obtained relief from the automatic stay and foreclosed on most, if not all, of its assets. Consequently, neither Burlingame nor Funding seek an award of attorneys’ fees or costs against Qmect at this time. In addition, the Court has determined that the Koellings have been released from their guaranty of Qmect’s obligations to Funding. Thus, Funding is no longer seeking an award of attorneys’ fees and costs from the Koellings either. The only relief sought at present is by Burlingame against the Koellings. After the issues were narrowed by partial summary judgment, a trial was held, beginning in October 2005 and ending in January 2006. Burlingame prevailed on most, if not all, of the issues. The Court made a determination of the amounts owed to Burlingame by the Koellings, including pre-petition attorneys’ fees and costs. The award did not include post-petition attorneys’ fees and costs. Judgment was entered on August 14, 2006. The Koellings moved for reconsideration, but the motion was denied. At about the same time, Burlingame filed a motion, seeking an award of its post-petition attorneys’ fees and costs, to be included in its judgment in these proceedings. A hearing was conducted with respect to this motion on October 5, 2006. At the conclusion of the hearing, the Court took the motion under submission. The Court now concludes that the motion should be denied without prejudice. DISCUSSION Burlingame asserts a right to include its post-petition attorneys’ fees and costs in its judgment against the Koellings based on its contracts with both Qmect and the Koellings and on Cal. Civ.Code § 1717.1 Included among the fees that Burlingame seeks to include in its judgment are fees incurred litigating issues peculiar to bankruptcy. At present, the law in the Ninth Circuit is clear that an unsecured creditor is not entitled to include in its claim its post-petition attorneys’ fees incurred litigating issues peculiar to bankruptcy. An unsecured creditor is entitled to include in its claim its post-petition attorneys’ fees for litigating issues governed by nonbankruptcy law provided the creditor has a right to recover its attorneys’ fees based on contract or statute. See In re Fobian, 951 F.2d 1149, 1153 (9th Cir.1991).2 269Burlingame contends that Fobian does not apply because it is not at present seeking to include its post-petition attorneys’ fees in its unsecured claim against the bankruptcy estate. It is merely seeking to include the fees in its judgment in these adversary proceedings. Burlingame concedes that there is no present purpose for this determination. However, it envisions that various contingencies might occur which would make such a determination useful. The Koellings argue that it would constitute an improper advisory opinion for the Court to make such a determination in the absence of a present need for it. The Court agrees. The Koellings also contend that it would be unfair to make them undertake the work required to evaluate the reasonableness of the fee request under these circumstances. They also note that the form of the fee application is inadequate to permit them to do so in any event. The invoices have been heavily redacted and have not been segregated by task, and no narrative has been provided. Again, the Court agrees. Burlingame contends that it has supplied more than is required already. It argues that all that is required to support a fee request is a simple declaration that the fees have been incurred. The Court has no doubt that, in some other case, some court has found a simple declaration to be sufficient for its purposes. In this case, however, given the multiplicity of the litigated matters and a fee request of over $1 million, the Court would not find a declaration sufficient nor does it find what Burlingame has submitted to date sufficient. Burlingame’s right to attorneys’ fees is not governed by 11 U.S.C. § 330. Therefore, its fee application need not comply with the rigorous format requirements of the Court’s fee guidelines for trustees and Court appointed professionals. Nevertheless, the fee application must have sufficient specificity to permit the Court to determine the reasonableness of the fees. In particular, given the Court’s conclusion that Burlingame may not obtain an award of attorneys’ fees for litigating issues specific to bankruptcy law, clearly, the work performed and fees requested must be segregated by task. For that reason, the Court will deny Burlingame’ s motion without prejudice. Burlingame may file and notice for hearing an amended motion for fees. The amended motion must contain a narrative describing the various tasks performed for which fees are requested with a summary of the hours and fees related to each task. The tasks must be fairly narrowly defined. For example, the Court would not find it adequate if the amended fee application contained only two tasks: e.g., one for issues governed by state law and the other for issues governed by bankruptcy law. The invoices must be revised to segregate the description of the work performed by task so that the line items related to each task appear consecutively. This may 270be done invoice by invoice or for the case as a whole. The tasks identified on the invoices should correspond to the tasks identified in the narrative as should the hours and fees. Given the ongoing litigation between the parties, the Court will permit Burlingame to limit the copies of the invoices served on the Koellings to redacted copies. However, unredacted copies must be provided to the Court. The narrative must be served on the Koellings. Based on the foregoing, it is SO ORDERED. . Section 1717(a) of the California Civil Code provides that: "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded ... to the prevailing party, then the party who is determined to be the party prevailing on the contract ... shall be entitled to reasonable attorney's fees in addition to other costs.” Cal. Civ.Code § 1717(a). . The holding in Fobian seems inconsistent with 11 U.S.C. § 506(b). If an unsecured 269creditor is entitled to include its post-petition attorneys’ fees in its claim, what is the need for § 506(b)? The Ninth Circuit seems to have answered this question by holding that a secured creditor is also entitled to include in its secured claim, to the extent of the value of its collateral, its post-petition attorneys’ for litigating issues peculiar to bankruptcy law. See In re Kord Enterprises II, 139 F.3d 684, 687 (9th Cir.1998). Coincidentally, the issue of whether an unsecured creditor is entitled to attorneys' fees for litigating issues peculiar to bankruptcy law is before the United States Supreme Court this term. It is scheduled for oral argument in late January 2007. See Travelers Cas. & Sur. Co. v. Pacific Gas and Electric, 167 Fed.Appx. 593 (9th Cir.2006) (unpublished), cert. granted, - U.S. -, 127 S.Ct. 377, 166 L.Ed.2d 265 (2006).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494128/	MEMORANDUM OF DECISION JIM D. PAPPAS, Bankruptcy Judge. On September 27, 2006, chapter 11 debtor Taylor Quality Concrete, Inc. (“Debtor”) filed an Application to Employ Pike & Miller P.A. as its attorneys (“Application”) in this bankruptcy case. Docket No. 70. In the Application, Debtor requests that the employment be approved nunc pro tunc to February 8, 2006, the date the bankruptcy petition was filed. There is no dispute that Pike & Miller P.A. (“Counsel”) meet all the requirements to be employed as set forth in § 327(a).1 No objections were filed in response to the Application. However, at the hearing concerning the Application conducted on November 22, 2006, the U.S. Trustee appeared and offered an oral objection to the Application to the extent approval is sought nunc pro tunc. Minutes, Docket No. 100. Pursuant to Local Bankruptcy Rule 2014.1(c), the Court ordered that the Application be approved effective as of September 27, 2006, the date which it was filed. The Court allowed Debtor and the 275U.S. Trustee additional time to submit briefs addressing whether the order approving the Application should be retroactively effective to the petition date of February 8, 2006. The parties have each filed briefs in support of their positions. Docket Nos. 101; 103. After considering the parties’ arguments, the Court concludes the Application cannot be approved nunc pro tunc. The following constitutes the Court’s findings, conclusions and reasons for its disposition. Fed. R. Bankr.P. 9014; 7052. Factual Background Counsel represented Debtor prior to the commencement of the bankruptcy case in negotiations with creditors and in state court collection actions. Aff. of Counsel, Docket No. 70. In order to prevent a foreclosure on Debtor’s assets, and to allow Debtor time to sell the business as a going concern to generate a higher price, Counsel and Debtor determined it was advisable that Debtor seek protection under chapter 11 of the Code. The attorneys representing Debtor admit that they have no significant prior exposure to bankruptcy law other than in representing creditors. Even so, they considered Debtor’s need to file for bankruptcy relief to be urgent, and Debtor was unable to retain an experienced chapter 11 attorney to handle the bankruptcy. Therefore, Counsel filed the chapter 11 petition for Debtor on February 8, 2006. Docket No. 1. The attorneys working on Debtor’s bankruptcy case explained they were unaware of the need to file an application to approve Counsel’s employment as Debtor’s attorneys pursuant to § 327(a) and Rule 2014(a) until the U.S. Trustee recently brought it to their attention. Counsel thereafter helped Debtor file the Application.2 Counsel argues it has provided extensive services to benefit the Debtor and bankruptcy estate, and the failure to file the Application sooner was merely an oversight that was remedied promptly when the attorneys involved realized it. Counsel suggests that although the lawyers in the firm have little experience representing debtors in bankruptcy, without the legal services they provided, Debtor would have been unable to obtain the bankruptcy relief it so urgently needed. On this basis, Debtor requests that the Application be approved as of the date the petition was filed. The U.S. Trustee objects, and in its usual summary fashion, contends Counsel’s misunderstanding of the law does not constitute such exceptional circumstances to justify approval of the Application nunc pro tunc. United States Trustee’s Limited Obj. at 3, Docket No 101. Disposition I. Section 327 and Rule 2014 set forth the framework and procedure for obtaining bankruptcy court approval of the employment by the trustee or debtor-in-possession of professional persons. “In bankruptcy proceedings, professionals who perform services for a debtor in possession cannot recover fees for services rendered to the estate unless those services have been previously authorized by a court order.” Atkins v. Wain, Samuel & Co. (In re Atkins), 69 F.3d 970, 973 (9th Cir.1995) (citing § 327(a), Rule 2014(a), and McCutchen, Doyle, Brown & Enersen v. Official Comm. of Unsecured Creditors 276(In re Weibel, Inc.), 176 B.R. 209, 211 (9th Cir.BAP1994)). Therefore, if they intend to be compensated for their efforts, it is imperative for a debtor’s attorneys to receive Court approval prior to commencing services for the bankruptcy estate. There is an exception to the general rule, in that bankruptcy courts in the Ninth Circuit “possess the equitable power to approve retroactively a professional’s valuable but unauthorized services.” Atkins, 69 F.3d at 974. However, such retroactive relief is available only upon a showing of “exceptional circumstances.” Id. “It is clear that there is no right to a nunc pro tunc order.” In re Kroeger Prop. and Dev., Inc., 57 B.R. 821, 822 (9th Cir.BAP1986). The BAP explained that approving employment nunc pro tunc is limited to “exceptional circumstances” in order to: deter attorneys from general non-observance of Section 327. Otherwise, any attorney who is qualified to serve as a counsel for a debtor in possession could ignore the requirement that a court order be obtained before commencing work. Since professionals are charged with knowledge of the law, there is no unjust hardship in requiring them to observe the strict requirements of Section 327. In re Kroeger Prop. and Dev., Inc., 57 B.R. at 822-23. “For the professional seeking an order approving employment nunc pro tunc, ‘exceptional circumstances’ exists when the professional (1) satisfactorily explains his failure to receive prior judicial approval; and (2) demonstrates that his services benefitted the bankrupt estate in a significant manner.” In re Ball, 04.3 I.B.C.R. 87, 87, 2004 WL 4960388 (Bankr.D.Idaho 2004) (citing Atkins, 69 F.3d at 974). Whether to approve an application for employment nunc pro tunc is committed to the discretion of the bankruptcy court. In re Kroeger Prop. and Dev., Inc., 57 B.R. at 822. II. There is no dispute that Counsel has rendered beneficial services to the bankruptcy estate in connection with the commencement and prosecution of the chapter 11 case prior to the date the Application was filed. Although the attorneys responsible for representing Debtor confess a lack of experience in this type of bankruptcy case, the Court has observed these attorneys work diligently and earnestly to represent Debtor’s interests. And while, at times, the attorneys demonstrated in their practices and court appearances a lack of familiarity with the substantive and procedural “rules of the road” in this case, the Court has no concerns about the results obtained through Counsel’s services, nor that those services would be compensable under the standards of § 330(a). On the other hand, while the Court does not doubt the benefit of Counsel’s services to the estate, if the attorneys representing Debtor were “unaware” of the legal requirement that their employment be approved, that lack of knowledge resulted from their failure to consult the Code or Rules, and the cases construing the applicable provisions. Surely, an attorney’s self-imposed lack of awareness of the legal requirements of chapter 11 should not justify avoidance of the consequences of failure to comply with the law. Moreover, the record does not support Counsel’s claim that, in fact, its attorneys were unaware that the firm’s employment must be approved by the Court, nor of the consequences of a failure to timely obtain that employment. Indeed, on February 9, 2006, the day after Debtor’s bankruptcy 277petition was filed, a copy of U.S. Trustee’s “Operating Guidelines and Reporting Requirements for Chapter 11 Cases” (“the Guidelines”) were filed in this case. Docket No. 3. On the same day, the record reflects an electronic notice of the filing of the Guidelines was served on Mark Miller, the principal attorney representing Debtor in this case. Among the Guidelines, the following information is found: EMPLOYMENT AND COMPENSATION OF PROFESSIONALS The employment of professionals (including, but not limited to attorneys, accountants, appraisers, or auctioneers) must be approved by the Court. Generally, professionals will not be compensated for services rendered prior to Court approval. No payments may be made to such professionals after the filing of the petition without Court authorization, after notice to creditors, and a hearing. A corporate or partnership debtor must be represented by an attorney; such debtor may not appear pro se. Docket No. 3 at 5-6. A copy of the Guidelines was also mailed to Debtor’s designated responsible corporate officer on February 9, 2006. Counsel asks the Court to excuse the failure to seek approval of its employment at the time of filing the petition for reasons it suggest are similar to those that persuaded the Court to do so in In re Soderquist, 349 B.R. 23 (Bankr.D.Idaho 2005). But the facts here are distinguishable from those in Soderquist. In that case, an experienced bankruptcy attorney mistakenly believed his application had been filed with the Court at the same time as the bankruptcy petition was submitted, in accordance with counsel’s long-established practice. Instead, the attorney later discovered the signed but unfiled application in his case file. Id. at 24-25. Based upon the Court’s experience with that lawyer, and the fact that the attorney had routinely filed an employment application in each case he represented debtors when the bankruptcy case was commenced, the Court was persuaded that the lawyer’s failure to file the employment application in Soderquist was truly an error in fact. The Court concluded, under the particular circumstances presented, that exceptional circumstances had been demonstrated, and that an order approving the application nunc pro tunc was appropriate. In other words, the Court concluded, denial of retroactive approval in that case would not “deter attorneys from general non-observance of Section 327.” In re Kroeger Prop. and Dev., Inc., 57 B.R. at 822-23. This Court recently distinguished Soderquist in an unpublished decision, In re Melton, 353 B.R. 901 904-06 (Bankr.D.Idaho 2006). In Melton, the debtor’s counsel argued Rule 1007(c) provided a fifteen day window after the petition was filed within which the debtor may file an application for approval of employment of an attorney such that approval of that application should relate back to the date the petition was filed. Id. at 903-04. The Court concluded the application to employ could not be approved, nunc pro tunc because erroneous interpretations of the law by the debtor’s attorney do not rise to the level of exceptional circumstances necessary to justify a nunc pro tunc order. Id. at 905-06. The facts presently before the Court more closely resemble those in Melton. In this case, Counsel, operating under an uninformed view of the law, failed to cause its client to file an application to employ until seven months after the commencement of the bankruptcy case. This is not a Soderquist situation, where debt- or’s counsel understood the necessity of filing the Application, but mistakenly believed that it had been filed. The Court is sympathetic to Counsel’s predicament. 278However, the premise underlying Counsel’s argument is that allowances should be made for practitioners who are unfamiliar with the requirements of bankruptcy law. The Code and Rules cannot operate in such a fashion. Their provisions must apply equally to all professionals, regardless of experience. A lack of familiarity with the requirements of the Bankruptcy Code and Rules does not constitute exceptional circumstances justifying retroactive approval of the Application. While the consequences of failure to observe the Code and Rules may seem harsh, as the Ninth Circuit recently observed, it is “important for lawyers representing a bankruptcy debtor to turn square corners.” Zilog, Inc. v. Corning (In re Zilog, Inc.), 450 F.3d 996, 997 (9th Cir.2006). Conclusion Having failed to demonstrate the sort of exceptional circumstances required for the Court to enter an order approving Counsel’s employment nunc pro tunc as of the date the petition was filed, that request will be denied. A separate order will be entered. . Unless otherwise indicated, all chapter, section, and rule references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1330 and to the Federal Rules of Bankruptcy Procedure, Rules 1001-9036, as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA”), Pub.L. 109-8, 119 Stat. 23 (Apr. 20, 2005). . Contrary to the requirements of Rule 2014(a), Debtor's officer did not sign the application to employ Counsel. Presumably, this was also an error stemming from Counsel's lack of familiarity with the process and failure to attend to the details mandated by the Rule.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494129/	MEMORANDUM DECISION RE: CLAIM OF ORIGEN FINANCIAL, LLC PATRICIA C. WILLIAMS, Bankruptcy Judge. INTRODUCTION This controversy presents multiple issues regarding the interplay between the claims allowance process and the process of confirming and administering a Chapter 13 plan. Convoluted facts often give rise to complicated issues of law which is the situation in this case. FACTS On February 21, 2003, the debtors commenced a Chapter 13 case and filed a proposed plan. Under paragraph VII entitled “Special Provisions,” the debtors stated “Debtor’s (sic) are surrendering house.” The initial plan would have required a monthly payment of $549.76 to fund the plan, which had a proposed base of $19,791.36 and an estimated term of 36 313months. On March 14, 2003, Origen Financial, LLC (hereinafter “Origen”) filed a Proof of Claim in the total amount of $107,825.33. As completed by Origen, the form indicated that based upon the fair market value of the home, Origen held a secured claim of $78,770 and held an unsecured claim of approximately $29,055.33. The debtors filed a first modification of the proposed plan on March 27, 2003, which increased the monthly plan payment to $992.76 and increased the base to $35,739.37, with an estimated term of 36 months. Another modification, not relevant to these issues, was filed April 25, 2003. On April 28, 2003, the Chapter 13 Trustee (hereinafter “Trustee”) filed an amended objection to the debtors’ proposed plan as modified. The Trustee required the debtors to specify the creditor holding the lien on the house and to state their intention to surrender under paragraph III.4.b. of the plan which pertains to the surrender of collateral. On May 13, 2003, the debtors filed a third modification which stated in paragraph III.4.b. that the home would be surrendered to Origen. The third modification changed the base amount of the plan to $20,341.12, without a change in plan payments. The modification made no reference to the plan term, but clearly the term would have been significantly less than 36 months. By stipulation between the Trustee and the debtors filed May 15, 2003, the base amount necessary to complete the plan and obtain a discharge was set at $36,334.97, payable over an estimated term of 37 months without a change in plan payments. The plan, as modified, was confirmed on June 16, 2003. A post-confirmation modification was filed by the debtors on December 1, 2003, which is irrelevant to this controversy. A second post-confirmation modification was filed December 10, 2003, which was precipitated by the filing of a claim for past due child support. This sixth change to the plan provided for the payment of a child support obligation, changed the monthly plan payments, and increased the base amount to $50,623.32, payable over an estimated term of 50 months. Two years later, on December 21, 2005, the last filed modification terminated the plan distributions for child support. None of the post-confirmation changes in the plan referenced or modified the treatment of the Origen obligation or any unsecured obligation. On August 30, 2006, three and one-half years after the filing of the Origen Proof of Claim, the debtors objected to that claim. In his administration of the plan, the Trustee had made disbursements based on the unsecured portion of Origen’s bifurcated Proof of Claim of $29,055.33. From April 1, 2004 to August 2, 2006, when distributions were terminated due to the objection to the Proof of Claim, the Trustee had distributed $18,801.46 to Ori-gen. In the objection to the Proof of Claim, the debtors requested that the claim be disallowed and that Origen be required to return the $18,801.46 to debtors. Meanwhile, October 1, 2004, Origen foreclosed its lien non-judicially by making a credit bid of $107,000 at the foreclosure sale. On September 16, 2005, Origen sold the home for $120,000 to a third party and received net proceeds of $100,611.08, leaving a deficiency of $31,595.38 on the obligation. The issues to be resolved by this Court are; 1) what is the proper amount and nature of Origen’s allowed claim, and 2) how is that claim to be treated under the plan? Resolving these issues will determine whether Origen may retain the $18,801.46 it received as payment on the unsecured-portion of its Proof of Claim, or 314whether that sum should be returned to the Trustee, or whether it should be returned to the debtors. The resolution of these questions require the analysis of five separate, but intertwined legal issues. ISSUES Origen'’s Allowed Claim 1. Does the doctrine of laches defeat the objection to the Proof of Claim? 2. Should the Proof i of Claim filed by Origen be allowed as filed, i.e., partially secured and partially unsecured? Treatment of Origen’s Claim under the Plan 3. Is the plan res judicata as to the treatment of the unsecured portion of the claim? If the unsecured portion of the claim is disallowed, do the principles of res judicata preclude the return of disbursements based on the unsecured portion? 4. Does the modification of December 10, 2003, contain a clerical error? 5. What is the effect of the post-confirmation non-judicial foreclosure on the Ori-gen claim? 1. Laches Both debtors and creditor argue that the other is not entitled to relief based upon the doctrine of laches. The debtors waited approximately three and one-half years after the filing of the Proof of Claim to file an objection to it. The debtors waited until nearly the end of the plan term (after the plan term, based on debtors’ contention that the term of the plan should be 37 months and not 50 months) to file an objection to the claim. The plan was confirmed June 13, 2003. Distributions did not commenced to this creditor until April 1, 2004, a year after the filing of the Proof of Claim. If an objection had been filed at any time during that year, this controversy could have been alleviated. Criticism of the creditor’s conduct is also appropriate. Despite the plan language that once property is surrendered the automatic stay is lifted and the creditor is free to exercise its state law rights, the creditor filed a motion to lift the automatic stay two months after confirmation. The order lifting stay was entered without objection by the debtors on September 10, 2003. Despite the fact that the Washington non-judicial foreclosure process can be accomplished within 90 to 120 days (RCW 61.24.140), the foreclosure did not occur until one year after entry of the unnecessary order lifting the automatic stay. Laches is an equitable doctrine which precludes the granting of relief to a party which has unreasonably delayed in seeking relief and if the party against which the relief is sought.is prejudiced by the delay. As evidenced by the facts recounted herein, delay, inattentiveness, confusion and lack of focus abound, and that is true of both parties. Although prejudice to either of the parties involved in this controversy is difficult to find, this is a bankruptcy proceeding and thus involves many different interests. Laches is inappropriate if any prejudice to parties not involved in the delay would result from its application. It is readily apparent that should application of the doctrine of laches allow Origen to retain the funds, prejudice would result to innocent parties. There are nearly a dozen unsecured creditors which would be entitled to have the $18,801.46 distributed to them on a pro rata basis. Allowing Origen to retain the funds or allowing the debtors to receive the funds, and thus reduce the base amount paid under their confirmed plan by $18,801.46, would be prejudicial to the nearly dozen unsecured creditors. This precludes application of 315laches for the benefit of either Origen or the debtors. 2. Issue-Should the Proof of Claim be Allowed? To the extent a creditor holds a security interest in collateral which has a value less than the obligation, § 506 requires that the claim of the creditor be bifurcated. The creditor is allowed a secured claim in an amount which is equal to the value of the collateral and is allowed an unsecured claim in the amount of the obligation which is in excess of the value of the collateral. lAThen this case was commenced, Origen was the holder of a first position purchase money obligation for the principal residence of the debtors. Holders of such claims are treated differently under § 1322(b)(2) than holders of other types of secured claims. That subsection prohibits a modification of the rights of creditors secured by a lien on the debtors' principal residence. In Nobelman v. American Sav. Bank, 508 U.S. 324, 113 S.Ct. 2106, 124 L.Ed.2d 228 (1993), the Supreme Court held that although bifurcation of many secured claims into both a secured and an unsecured claim was required by § 506(a), § 1322(b) precluded bifurcation of first position residential home mortgage claims. Chapter 13 debtors are required to pay residential mortgage lenders in accordance with the terms of the underlying obligation regardless of the value of the residence. The only exception is when the creditoi does not hold any secured claim as thc value of the property is so low that there i~ no value at all to secure the lender's claim, This exception is inapplicable to the facts of this case as Origen was the first positior lender and its Proof of Claim indicates there was value to support its lien. Debtors are not allowed, due to the fact that the value of the home is less than the amount owed, to bifurcate the obligation owed to the residential lender into a secured and unsecured claim. A plan which would have modified the rights of Origen could not have been confirmed. Origen, simply by filing a Proof of Claim, cannot unilaterally modify its rights and then argue that the confirmed plan must be interpreted to modify those rights consistent with the Proof of Claim. Pursuant to Nobelman, Origen was not allowed to bifurcate its claim and thus modify its rights under the plan. The unsecured portion of the claim should be disallowed. 3. Res Jadicata Effect of Confirmed Plan Once a Chapter 13 plan is confirmed, the plan is res judicata as to all matters contained in the plan. Trulis v. Barton, 107 F.3d 685 (9th Cir.1995). On-gen's position is that although § 1322(b)(2) does not allow a debtor to treat a claim secured by a lien on a residence as partially secured and partially unsecured, the debtors' confirmed plan so provides. Since the plan provides for the treatment of the claim as both secured and unsecured, even though such treatment is disallowed by the Code, the plan is res judicata and the claim must be treated in that manner. Origen's argument is a correct statement of the res judicata effect of confirmed Chapter 13 plans. In re Pardee, 193 F.3d 1083 (9th Cir.1999). The underlying premise that the plan treated the claim as both a secured and unsecured claim is incorrect however. Typically, Chapter 13 plans do not effect or purport to determine the nature and extent and validity of a claim. In re Hobdy, 130 B.R. 318 (9th Cir. BAP 1991). Confirmation of plans does not effect the validity of a claim nor its classification as secured or unsecured. Chapter 13 plans determine the treatment to be 316accorded claims and are res judicata as to the treatment described in the plan. Plans are not res judicata as to the allowance or disallowance of a claim. Allowance of a particular claim is generally not referenced or effected by the plan. In re Shook, 278 B.R. 815 (9th Cir. BAP 2002). Even though § 502 provides that a proof of claim is “deemed allowed” absent objection, once an objection is filed, the nature, extent and validity of the proof of claim is no longer presumed. In re Los Gatos Lodge, Inc., 278 F.3d 890 (9th Cir.2002). Such determinations are made in the claims adjudication process. In re Schweizer, 354 B.R. 272 (Bankr.D.Idaho 2006). The plan confirmation process is separate and distinct from the claims adjudication process. Notice and hearing procedures regarding objections to the merits or classification of claims are established by § 502(b) and amplified by Fed. R. Bankr.P. 3007. Adjudication of claims requires that the party holding the claim have reasonable notice not only of the fact that an objection to that particular claim exists, but the basis for the objection. LBR 3007-l(a)(l)(c). There is an exception to the general rule that confirmation of a Chapter 13 plan has no res judicata effect on the nature, extent or validity of a claim. That exception occurs when the plan specifically so provides. Plans may modify the rights of the holders of claims in a manner disallowed by the Code if the plan clearly and specifically so provides and due process requirements are met. We now acknowledge that a plan can effectively determine value and/or avoid a lien only if the creditor receives clear notice that the plan will do so. In re Shook, supra, at 824. The plan in this case did not refer to the unsecured claim of Origen with any specificity. The plan specified that the home would be surrendered to Origen. That paragraph of the form plan reads as follows: b. Debtor surrenders the collateral securing the claims of the following creditors in satisfaction of the secured portion of such creditor’s claim. To the extent the collateral does not satisfy such creditor’s claim, the creditor shall be treated as the holder of an unsecured claim and paid as provided in section III.A6 (Priority Claims), if entitled to priority under 11 U.S.C. § 507, or if not, as provided in section III.A8 (Unsecured Claims). The entry of the order confirming the plan shall terminate the automatic stay of 11 U.S.C. § 362(a) as to the collateral surrendered, thereby allowing recovery and disposition of such property according to applicable non-bankruptcy law. Origen relies upon the plan language which states that if the collateral is insufficient to satisfy the claim, the creditor shall be treated as the holder of an unsecured claim. Based on that language in the form, Origen argues that the plan specifically provided that it should be paid the unsecured portion of its Proof of Claim. The difficulty is that this form language is not specific to Origen, and at the time of filing the Proof of Claim, Origen was precluded from holding an unsecured claim by § 1325(b)(2). This form language is insufficient notice that § 1322(b) is being super-ceded by the plan. At the time of surrender, Origen’s secured claim was satisfied. Theoretically, Origen, after surrender of the home, could have judicially foreclosed upon the property and, if ultimate disposition of the prop317erty had resulted in a deficiency, Origen would have then become the holder of an unsecured claim for the deficiency balance. To receive distributions under the plan on such a claim, it would have had to file a new proof of claim for the deficiency balance. Until post-confirmation events occurred, i.e., judicial foreclosure and ultimate disposition of the property, Origen would have no right to an unsecured claim. The plan is res judicata as to the treatment of Origen’s claim. That treatment was surrender of the home. Should that surrender eventually result in Origen becoming the holder of an unsecured claim, that potential unsecured claim would be treated as other unsecured claims under the plan. There is no specific plan language which modifies or alters the effect of § 1322(b) or allows Origen an unsecured claim. 4. Issue—Clerical Error. The debtors have now made plan payments totaling $50,813.28 for a plan with a base of $50,623.32. Should it be determined that Origen was not entitled to receive the distributions under the plan of $18,801.46, that sum would be returned to the Trustee for distribution to others as required by the plan. Erroneous distributions by a plan Trustee do not effect the base amount the debtors are required to pay to the plan. The debtors argue, however, that due to a clerical error the correct base amount should be $40,011.29, thus they have paid more than required and Origen should return the $18,801.46 directly to them. Even assuming the debtors should have only paid a base of $40,011.29, they would have overpaid only $10,801.99 and would only be entitled to reimbursement of that amount. The difference between that amount and the $18,801.46 erroneously paid to Origen would have to be paid to the Trustee for distributions to others as required by the plan. The basis of the argument that the correct base is $40,011.29, and thus the debtors have overpaid the base by $10,801.99, is that a clerical error existed in the modification which contained the base amount of $50,623.32. The base amount of $50,623.32 is contained in the modification of December 10, 2003. Debtors allege that the base amount established by that post-confirmation modification as well as the estimated term of the plan at 50 months, were the result of a clerical error. That modification added, as a continuing claim under the plan, a monthly domestic support obligation payable to the Department of Social & Health Services (hereinafter “DSHS”) in the amount of $200. It also added to the amounts to be disbursed under the plan an arrearage of $1,400 in a domestic support obligation to be paid to DSHS as a priority claim. The monthly plan payment was increased for a period of 13 months to fund these additional distributions under the plan. The debtors’ counsel in his Memorandum of Authorities points out that the correct mathematical calculation would result in a base of $40,011.29. The base of $50,623.32 results when the amount due on the DSHS arrearage claim is calculated at $14,000 rather than $1,400. No evidence exists explaining this error other than the calculations themselves. The modification filed two years later, on December 21, 2005, the 35th month, deleted the $200 monthly continuing claim for domestic support. No change was made in the base amount of the plan or its estimated term. Any mathematical error contained in the prior modification was not corrected, although the later modification addressed the same subject (the support 318obligation) as had the December 10, 2003 modification. The Trustee’s website indicates, of the $50,813.28 paid by debtors, the Trustee has disbursed $50,578 under the plan. The support obligation was overpaid by the Trustee who has since recovered the overpayment from DSHS. In addition to DSHS and Origen, the Trustee has made distributions to several unsecured creditors and calculated and paid trustee fees which are a percentage of the amount received from the debtors. Clerical errors are addressed in Fed. R.Civ.P. 60(a) which provides: (a) Clerical Mistakes. 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. During the pendency of an appeal, such mistakes may be so corrected before the appeal is docketed in the appellate court, and thereafter while the appeal is pending may be so corrected with leave of the appellate court. In this situation, the alleged clerical error did not occur in a court order or judgment, but in a pleading filed by the debtors. The preliminary analysis in such situations is the same as in situations where the error occurs in a court-generated document. Is it a true mistake where the mechanics of the intent otherwise expressed in the document cannot be accomplished? Would making the correction reflect a change of intent rather than effectuating the original intention? Blanton v. Anzalone, 813 F.2d 1574 (9th Cir.1987); Harman v. Harper, 7 F.3d 1455 (9th Cir.1993); Jones & Guerrero Co., Inc. v. Sealift Pac., 650 F.2d 1072 (9th Cir.1981). Mathematical errors are classic examples of clerical mistakes considered under Fed.R.Civ.P. 60(a). Often such errors are apparent on the face of the document. That is certainly not the situation here, however. There are four pre-confirmation changes and three post-confirmation changes of the plan containing four changes in the base amount to be paid to fund the plan and multiple changes in the monthly plan payments. Such circumstances alone render it difficult to fully comprehend the debtors’ intent regarding the modification filed December 10, 2003. No clerical error is apparent on the face of the modification. After a review of the numerous prior changes in the funding and terms of the plan and more than cursory mathematical calculations, one concludes that the base amount referenced in the December 10, 2003, modification is a clerical error. After doing all the review and calculations, a priority support arrearage obligation of $1,400 results in a base of $40,011.29, but an incorrect arrearage amount of $14,000 results in a base of $50,623.32. The inadvertent use of the $14,000 rather than the $1,400 is a clerical error. ■As to the term of the plan, no reason can be ascertained as to why the estimated term in the December 10, 2003 modification should be 37 months rather than the 50 months stated. However, this appears moot as this is now the 48th month after commencement of the case. Also, the plan term is only an estimate established by the base amount and monthly plan payments. There is another factor to be considered in granting relief under Fed. R.Civ.P. 60(a). Such relief is equitable in nature. The party who made the error is now requesting, nearly three years later, that it be corrected. If others have relied upon the error and acted in accordance 319with the erroneous calculation, no relief from the error should be allowed if those parties would be prejudiced by the requested relief. In re Anwiler, 958 F.2d 925 (9th Cir.1992); In re Clark, 262 B.R. 508 (9th Cir. BAP 2001). Two years after the erroneous modification, the debtors filed another modification which also addressed the support claim and terminated disbursements on that claim under the plan. There is no evidence indicating when the debtors or their counsel discovered the error in the December 10, 2003 modification, but, at a minimum, when the last modification was filed two years later, they had an opportunity to discover and correct the error. In the three years which have elapsed since December 10, 2003, many parties have relied upon the erroneous base amount. Retroactively correcting the base amount would require the Trustee to recalculate his fees as they are a percentage of plan payments. Most importantly, nearly a dozen unsecured creditors which received distributions under the plan, would have to be contacted and required to return funds. The Trustee would incur the additional burden making the appropriate calculations and contacting those creditors. Those creditors would not only have to return the disbursements, but would have the expense and inconvenience of analyzing the Trustee’s request. Such a result does not lead to confidence in the Chapter 13 system. The debtors’ counsel made the error. The convoluted history of this case, some of which could have been avoided by the debtors, contributed to the error. It has been three years since the error was made and it is unknown when it was discovered. Other parties relied upon the erroneous base amount and would be burdened and most likely prejudiced should the error be corrected retroactively. Under such circumstances, the debtors should not be granted the relief requested. 5. Effect of the Non-Judicial Foreclosure As concluded above, as of the date of filing its Proof of Claim, Origen was not the holder of an unsecured claim. Nor did Origen take any of the steps necessary under state law to become the holder of an unsecured claim. The plan language relied upon by Origen provides that after property is surrendered, state law will effect its disposition. State law determines the creditors’ post-surrender rights. A claim cannot be allowed if it is unenforceable under non-bankruptcy law. § 502(b)(1). After surrender of the property by the debtors, Origen foreclosed on the property. State law precludes Origen from holding any claim against the debtors after the foreclosure. Of the $18,801.46 disbursed to Origen by the Trustee, $3,063.19 was disbursed between April 1, 2004 and October 1, 2004, the date of the foreclosure sale. Post foreclosure, $15,738.27 was disbursed. Pursuant to RCW 61.24.100(1), the debtors owed no obligation to Origen after the non-judicial foreclosure sale. RCW 61.24.100(1) states: (1) Except to the extent permitted in this section for deeds of trust securing commercial loans, a deficiency judgment shall not be obtained on the obligations secured by a deed of trust against any borrower, grantor, or guarantor after a trustee’s sale under that deed of trust. When Origen elected to foreclose non-judicially, it also elected to waive any right to collect a deficiency from the debtors should the value of the property be less than the obligation. Helbling Bros., Inc. v. Turner, 14 Wash.App. 494, 542 P.2d 3201257 (1975). Post-foreclosure, Origen held no claim. As justification for the receipt of the $15,738.27 post-foreclosure, Origen first argues that the provisions of the confirmed plan preempt state law. As analyzed above, the language in the plan does not preempt state law. This argument has no merit. Origen then argues that the request to return the $18,801.46 should be denied as the funds were received in good faith and equity precludes their return. No cases have been cited for the proposition that equity precludes the return of funds paid to an entity which was not entitled to receive them. Origen is an entity engaged in the servicing of home loans and regularly appears in this Court. It should certainly be aware that Washington law precludes the collection of a deficiency after a non-judicial foreclosure. Yet Origen not only silently accepted funds for nearly two years after the foreclosure, it continued to silently accept funds for nearly a year after it had sold the real estate to a third party. Equity does not tip in Origen’s favor. CONCLUSION Origen’s Proof of Claim is DISALLOWED. It was not entitled to receive the distribution totaling $18,801.46 and must return that amount to the Trustee for disbursement to other creditors under the plan. The Trustee is to further administer the case based on this Memorandum Decision.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494130/	ORDER ON MOTION FOR TURNOVER (Doc. No. 54) ALEXANDER L. PASKAY, Bankruptcy Judge. THE MATTER before the Court is a Motion for Turnover (Doc. No. 54) filed on June 19, 2006, by the Chapter 7 Trustee, Diane L. Jensen (Trustee), in this Chapter 7 ease of James Robert Jessell, Jr. (Debt- or). The Trustee’s Motion seeks an Order compelling the Debtor to turn over to the Trustee certain alleged non-exempt assets, including $36.00 cash on hand, $195.49 of excess monies held in a bank account, $176.00 worth of office equipment, a portion of a tax refund for the year 2005 in the amount of $1,253.34, and postpetition payment credits taken against a prepetition overpayment of child support in the amount of $1,900.00. On July 17, 2006, the Debtor filed his Response to the Trustee’s Motion for Turnover (Doc. No. 57), in which he agreed that he owed the estate the sum of $407.49 (for the cash, the funds in the bank account, and the office equipment), and agreed to pay the same within thirty days. The Debtor disputed the Trustee’s contention that he had received a tax refund, and asserts that the credits taken by him towards satisfaction of the child support overpayments were exempt funds and not property of the estate, and therefore not subject to a turnover proceeding. He further demands the return of funds paid to the Trustee by his former spouse in satisfaction of the overpayment. On September 20, 2006, the parties filed a Stipulation of Facts Regarding Trustee’s Motion for Turnover and Trustee’s Objection to Amended Claim of Exemptions (Doc. No. 69), in which the relevant facts are set out as agreed to by the parties. The dispute over the Debtor’s 2005 tax return has been resolved by the parties, which leaves only the matters of the validity of the claim by the Trustee and the claim of the Debtor for the return of the funds obtained by the Trustee from the former spouse. Based on these facts and the record, this Court now finds and concludes as follows: The Debtor and his former spouse Dana Kinnaman Jessell (Ms. Jessell) were di335vorced in May 2000. Pursuant to the Final Judgment of Dissolution, the Debtor was obligated to pay child support for their two minor children. In September 2003 the Circuit Court of the Twentieth Judicial Circuit in and for Lee County, Florida (State Court) entered an Order on the Debtor’s Supplemental Petition for Modification of Final Judgment which reduced the Debtor’s child support payments for the summer months and increased them for the school months. The State Court ruled that as a result of the Ms. Jessell’s misstatement of the children’s day care expenses, the Debtor had overpaid child support and was entitled to a credit of $12,948.92 on future child support payments. The credit was to be recouped by reducing the Debtor’s monthly child support payment by $100.00 until the balance was paid in full. The Debtor began taking the credits in October 2003, and continued to take credit against his monthly payments until May 2006. The present dispute concerns credits taken after the Petition date, from June 2005 through February 2006. The Debtor filed his Petition under Chapter 7 on May 18, 2005. The Debtor listed as one of his assets a prepetition overpayment of child support in the amount of $11,000.00. In September 2005 the Debtor filed a Motion in the State Court to Amend Payment Schedule, seeking to accelerate repayment of the overpayment by increasing the credit against his monthly child support payments. On November 14, 2005, the State Court entered an Order on the Debtor’s Motion in which Ms. Jessell was instructed to pay the remaining balance of the, overpayment upon the sale of the marital home. The State Court further instructed that if the marital home was not sold by January 31, 2006, the Debtor should begin deducting $300.00 from his monthly child support payments until the marital home was sold and the balance paid in full. The marital home was sold in February 2006. At that time, the Trustee demanded and received from Ms. Jessell the balance of the overpayment, which was tendered to the Trustee on March 3, 2006, in the amount of $9,648.92. It further appears from the record that the Debtor took a $300.00 credit in February, and continued to deduct $300.00 per month until June 2006. Ms. Jessel filed a Motion for Contempt on June 14, 2006, seeking return of the credits taken by the Debtor in the months of March, April, and May. On August 7, 2006, the State Court found that the Debtor was indebted to Ms. Jessell in the amount of $1,200.00 for the $300.00 credits taken in March, April, May, and June, and ordered the amount repaid in three monthly installments of $400.00 to be included with his monthly child support payments for the months of August, September, and October. The Trustee seeks $1,900.00 from the Debtor; however, based on the record before the court, that amount is incorrect. On the Petition Date, the remaining balance of the overpayment was an asset of the estate in the amount of $10,948.92. However, the Trustee incorrectly valued this asset at $11,548.92, an apparent overvaluation of $600.00. The $1,900.00 figure was apparently reached by subtracting the $9,648.92 paid to the Trustee by Ms. Jes-sell on March 3, 2006, from the incorrect assessment of $11,548.92. Therefore, to reach the correct figure, it is necessary to subtract the $600.00 overvaluation from the Trustee’s incorrect assessment of $1,900.00, which results in a balance of 336$1,300.00.1 It should be noted that the credits the Debtor retained toward satisfaction of the overpayment before filing totaled $2,000.00 ($100.00 per month from October 2003 until May 2005). Obviously no part of these pre-Petition credits are recoverable for the estate. As noted above, on the Petition date the overpayment totaled $10,948.92. The Debtor continued taking $100.00 credits each month for the months from June 2005 until January 2006, for a total of $800.00. In February, 2006, the Debtor began taking credits of $300.00, continuing, as noted above, through June 2006. However, only the credit taken in February 2006 is now of concern because all credits taken by the Debtor after the overpayment was satisfied in March 2006 by Ms. Jessell’s payment to the Trustee are subject to the State Court’s Order to repay. Thus, the sum of the credits taken postpe-tition by the Debtor amounts to $1,100; it is proper that he repay that amount to the estate. Accordingly, it is ORDERED, ADJUDGED AND DECREED, that the Motion For Turnover (Doc. No. 54) filed by the Chapter 7 Trustee be, and the same is hereby granted in part, and denied in part. The Motion is granted in the amount of $1,100.00. It is further ORDERED, ADJUDGED AND DECREED, that the Debtor shall contact the Chapter 7 Trustee within 30 days from the date of this order to arrange an mutually agreeable plan for turnover of $1,100.00 within 60 days. . Subtracting the Debtor's post-Petition credits of $1,100.00 from this amount yields a balance of $200.00 that remains due from Ms. Jessell; her payment to the Trustee on March 3, 2006, should have totaled $9,848.92. She paid only $9,648.92.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487747/	Jackson, Justice. This was a suit for two hundred and twenty-five dollars on a check, for that much money deposited by the plaintiff with the defendants. The issue was whether the money called for by the check had been paid in settlement or not. The jury found for the plaintiff, the defendants moved for a new trial, it was granted, and plaintiff excepted. The motion was predicated on two grounds: first, that the court erred in rejecting a certain book of Powell & Murphy which showed an entry of the two hundred and twenty-five dollars sued for, and its payment in the settlement; and, secondly, that the verdict is strongly and decidedly *32against the weight of the evidence. It is not stated upon which ground the new trial was granted, but we suppose upon both. 1. Should the book have been admitted? We think so. The entry was made at the time of the transaction, and in the presence of all the parties, the plaintiff included, according to the statement in the record. It was, therefore, a part of the res gestee — a memorial made at the time of what transpired, in a form more durable and less liable to mistake than mere human memory. Any such memorial made at the time, and in the presence of parties, upon anything —wood, stone or paper — is evidence, and admissible, especially in a case where human recollection differs, in order to strengthen the one side or the other, as the memorial may corroborate the one or the other. It is immaterial who made it, so that it was made at the time and in the presence of the parties at variance. It is stronger, therefore, than the case of an ordinary entry on the books of a banker or merchant; but even in such' ordinary case, this court has not held that since parties may be sworn, books are not admissible. See Petit vs. Keel, 57 Ga, 145. But this entry stands on a different footing upon the facts stated in the motion for a new trial, and is admissible as part of the res gestee, as a memorial made by the parties, and in their presence at the time the transaction occurred. So we think that the judgment was right on this ground. 2. This makes it unnecessary to consider the other. As repeatedly ruled, however, we repeat that we are reluctant to interfere with the first grant of a new trial where the judge is dissatisfied with the verdict, and thinks it decidedly against the evidence; and where such grant is also supported by evidence improperly withheld from the jury, we cannot legally, we think, overrule the grant of the new trial. Judgment affirmed.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487748/	Warner, Chief Justice. This was a bill filed by the complainant against the defendants to recover the possession of certain described lands on the allegations contained therein. On the trial of the case, the jury, under the charge of the court, found a verdict in favor of the defendants. A motion was made for a new trial, on the grounds contained therein, which was overruled, and the complainant excepted. The controlling question in this case is whether the complainant’s right to recover the land sued for was barred by the statute of limitations, it being in the nature of an equitable action of ejectment. It appears, from the evidence in the record, that in the year 1853, Benjamin II. Gray, by his last will and testament, devised the land in dispute to his son, Patrick Gray, in trust for the sole and separate use of his two daughters, Ann and Jane Gray, and for during their natural lives, and after their death to their children, but if they should die leaving no children, or representatives of children, then the property so devised to revert to his estate, and be equally divided between his other children in the same manner as before directed. Ann Gray married Yarner in 1855, in the seventeenth year of her age, and has now five living children. Jane married Walker, and died in 1867, leaving no children, her husband having died in 1861. In the year 1856, after the marriage of his two sisters, Ann and Jane, Patrick Gray, their trustee, petitioned the superior court of Houston county to be removed from his said trusteeship, and that Walker and Yarner be appointed trustees for their respective wives in his place. The court granted the petition, and passed an order removing Patrick Gray as trustee, and appointed Yarner and Walker trustees, as requested, in his place and stead. Afterwards, in May, 1857, Varner and Walker petitioned the judge of the superior court of the Macon circuit, exercising jurisdiction in chancery, for leave to sell the land in dispute, the said Ann and Jane joining 57in said petition. The chancellor, at chambers, after considering the application, granted leave to sell the land at public or private sale, and empowered the trustees to convey the same by deed, and to receive what the land might sell for, and invest the same in other property upon like limitations, conditions and trusts, as the said land is now held by them. On the 5th day of January, 1859, Yafner, as trustee, in pursuance of the aforesaid order, conveyed the premises in dispute by deed to the defendant, D. E. Gunn, under whom the other two defendants claim title, for the consideration of $1,885.00, and a similar deed was made by Walker, trustee, to Gunn, under which the defendants also claim title. It appears from the evidence in 'the Record, that D. F. Gunn was the guardian of Ulysses Gunn and Yictoria Gunn, and that by an order of the court of ordinary he had turned the land over to them in settlement as such guardian, in 1865. The land has been in the possession of D. E. Gunn from the time of his purchase of it from Yarner and Walker up to November, 1865, when he turned it over to his wards in settlement, and it has been in their possession, or at least one of them, ever since. The charge of the court complained bf in relation to the bar of the statute is as follows: “ The defendants say more, if that proposition is not true, if they did not get a good title at such sale, if the sale was made, yet they say that the trustees obtained an order from the proper court to sell this property, and that they bona fide and for a valuable consideration, bought it from said trustees in pursuance of that order, that they took a deed from these trustees and went into possession under that deed, and that they, and those claiming under them, have remained in the possession of this property more than seven years under color of title before the institution of this suit, and if this be so, then they have what the law calls a good prescriptive title.” This charge of the court was not erroneous, especially when taken in connection with the other portions of the charge contained in the record. This case comes within the rulings of *58this court in Wingfield et al. vs. Virgin et al., 51 Ga., 139 ; Brady et al. vs. Walters, 55 Ga., 25. Let the judgment of the court below be affirmed.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487745/	J-A08020-22 2022 PA Super 196 CATERPILLAR FINANCIAL SERVICES : IN THE SUPERIOR COURT OF CORPORATION : PENNSYLVANIA : Appellee : v. : : GET ER DONE DRILLING, INC. : : Appellant : No. 202 WDA 2021 : Appeal from the Judgment Dated January 11, 2021 In the Court of Common Pleas of Greene County Civil Division at No(s): A.D. No. 206 of 2018 BEFORE: BENDER, P.J.E., LAZARUS, J., and McCAFFERY, J. OPINION BY LAZARUS, J.: FILED: NOVEMBER 18, 2022 Get ‘Er Done Drilling, Inc. (“Get ‘Er Done”) appeals from the judgment, entered in the Court of Common Pleas of Greene County, denying its motion for summary judgment, granting the motion for summary judgment filed by Caterpillar Financial Services Corporation (“Caterpillar”), and entering judgment in favor of Caterpillar. Upon careful review, we affirm. The trial court set forth the relevant background of this matter as follows: [Get ‘Er Done] entered into an installment sale contract on June 19, 2014 with Cleveland Brothers Equipment Co, Inc., for the purchase of [a hydraulic excavator]. Cleveland Brothers then assigned its rights under [the] agreement to [Caterpillar]. Additionally, on June 28, 2015, [Get ‘Er Done] entered into a master loan and security agreement with [Caterpillar] for the purchase of [a Ditch Witch directional drill]. . . . [Get ‘Er Done] made only a portion of the payments owed and eventually surrendered [both pieces of equipment] to [Caterpillar,] which exercised its right as a secured creditor to sell the equipment and J-A08020-22 apply the proceeds from the sale to [Get ‘Er Done’s] debt. [Following the sale of the equipment, Caterpillar claimed deficiencies on the excavator in the amount of $47,647.44 and on the directional drill in the amount of $447,335.35. As a result, Caterpillar] filed suit claiming breach of contract for [Get ‘Er Done’s] failure to make payments under the first and second security agreements (Counts I and II), and [for] unjust enrichment, for [Get ‘Er Done] retaining “the financial benefits that [it] derived only by virtue of [Caterpillar’s] financial efforts.” Trial Court Order, 1/11/21, at 1-2 (unnecessary capitalization and citation to record omitted). Get ‘Er Done filed an answer, new matter, and counterclaims for fraud, breach of fiduciary duty, breach of contract and conversion. Caterpillar filed preliminary objections, after which the trial court struck Get ‘Er Done’s counterclaims for fraud, breach of fiduciary duty, and one count of breach of contract. On February 25, 2019, Get ‘Er Done filed an amended counterclaim, asserting claims for breach of contract and conversion, in response to which Caterpillar filed an answer and new matter. Following discovery, which the court extended by six months at Get ‘Er Done’s request, both parties filed motions for summary judgment with accompanying briefs. After oral argument, the trial court denied Get ‘Er Done’s motion for summary judgment, dismissed its remaining counterclaims, and granted Caterpillar’s motion for summary judgment. The court entered judgment in favor of Caterpillar as follows: (1) the amount of $38,337.03, plus interest, on the first security agreement; (2) the amount of $491,024.65, plus interest, on the second security agreement; and (3) costs of suit. See Trial Court Order, 1/11/21, at 8. -2- J-A08020-22 On January 21, 2021, Get ‘Er Done filed a motion for reconsideration and, on January 22, 2021, filed a separate motion for reconsideration and motion to strike the affidavit of Duane Hronik.1 Caterpillar opposed both motions. On February 9, 2021, Get ‘Er Done filed a timely notice of appeal, followed by a court-ordered Pa.R.A.P. 1925(b) concise statement of errors complained of on appeal. The court did not rule on Get ‘Er Done’s motions for reconsideration. Get ‘Er Done now raises the following claims for our review: 1. Did the [trial] court err in considering inadmissible and unsupported opinion [] and hearsay evidence at summary judgment from undisclosed witnesses? 2. Did the [trial] court err in relying on evidence which was clearly controverted by evidence of [Get ‘Er Done]? 3. Did the [trial] court err in finding the sale of [Get ‘Er Done’s] AT60 drill was public? 4. Did the [trial] court err in [sic] the sale of [Get ‘Er Done’s] equipment was done with sufficient [sic] to [Get ‘Er Done]? Brief of Appellant, at 12 (renumbered for ease of disposition; unnecessary capitalization omitted). In reviewing an order granting summary judgment, our scope of review is plenary, and our standard of review is the same as that applied by the trial court. Our Supreme Court has stated the applicable standard of review as follows: [A]n appellate court may reverse the entry of summary judgment only where it finds that the lower court erred in concluding that the matter presented no genuine issue as to any material fact and that it is clear that the moving party was entitled to a judgment as a matter of law. In making this assessment, we review the record in the light most favorable to the nonmoving party, and all doubts as to the ____________________________________________ 1 Hronik is a senior paralegal at Iron Planet, Inc., the online marketplace through which Caterpillar auctioned the Ditch Witch Directional Drill. -3- J-A08020-22 existence of a genuine issue of material fact must be resolved against the moving party. As our inquiry involves solely questions of law, our review is de novo. Therefore, our responsibility as an appellate court is to determine whether the record either establishes that the material facts are undisputed or contains insufficient evidence of facts to make out a prima facie cause of action, such that there is no issue to be decided by the fact-finder. If there is evidence that would allow a fact-finder to render a verdict in favor of the non-moving party, then summary judgment should be denied. Patel v. Kandola Real Estate, LP, 271 A.3d 421, 426 (Pa. Super. 2021) (citation omitted). To survive a motion for summary judgment, the non-moving party may not rely merely upon the controverted allegations of the pleadings, “but must set forth specific facts by way of affidavit, or in some other way as provided by the rule, demonstrating that a genuine issue exists.” Salerno v. Philadelphia Newspapers, Inc., 546 A.2d 1168, 1171 (Pa. Super. 1988) Get ‘Er Done first asserts that the trial court erred in considering inadmissible and unsupported opinion and hearsay evidence from undisclosed witnesses. Specifically, Get ‘Er Done challenges two affidavits submitted by Caterpillar in support of its motion for summary judgment. The first affidavit was provided by Stephanie Floyd, a Special Accounts Representative II at Caterpillar, and set forth information regarding the parties’ security agreements, Get ‘Er Done’s default thereon, and the amounts owed as a result of the defaults. The second affidavit was executed by Duane Hronik, a senior paralegal at Iron Planet, Inc., the online marketplace through which Caterpillar -4- J-A08020-22 auctioned the Ditch Witch directional drill. Hronik’s affidavit set forth the details of the online auction. Get ‘Er Done argues that the affidavits are “wrought with evidentiary issues and should not have been afforded any weight or consideration.” Brief of Appellant, at 21. In particular, Get ‘Er Done claims that the affidavits do not comply with the “strict requirements concerning affidavits [that] are used in support of a motion for summary judgment.” Id. at 22. Get ‘Er Done asserts that “the affiants did not testify as to the preparation or storage or accuracy of the records” they relied upon in their affidavits, such as would “justify a presumption of trustworthiness.” Id. at 23. Accordingly, Get ‘Er Done argues that the trial court erred in relying upon the affidavits in granting summary judgment in favor of Caterpillar. Finally, Get ‘Er Done claims that Caterpillar did not disclose the identity of the affiants during discovery, which would “prevent them from testifying under Pa.R.C.P. 4019(i).” Id. at 24. We begin by noting that, to the extent Get ‘Er Done challenges the contents of the affidavits, this argument has been waived for failure to raise it in the trial court. The sole objection Get ‘Er Done raised to the affidavits in response to Caterpillar’s motion for summary judgment was that the affiants were not disclosed pursuant to Rule 4019(i) and that Floyd’s affidavit contained opinions, rendering her an expert witness whose identity was not disclosed pursuant to Pa.R.C.P. 4003.5(b).2 See generally, Defendant’s ____________________________________________ 2Get ‘Er Done has abandoned on appeal any argument that Floyd’s affidavit amounted to expert testimony. -5- J-A08020-22 Answer to Plaintiff’s [Amended] Motion For Summary Judgment, 12/7/20; Defendant’s Brief in Opposition to Plaintiff’s Motion For Summary Judgment, 12/7/20. “The Superior Court, as an error-correcting court, may not purport to reverse a trial court’s order where the [] basis for a finding of error is a claim that the responsible party never gave the trial court an opportunity to consider.” Devine v. Hutt, 863 A.2d 1160, 1169 (Pa. Super. 2004), quoting Harber Philadelphia Center City Office Ltd. v. LPCI Ltd. Partnership, 764 A.2d 1100, 1105 (Pa. Super. 2000). As such, arguments not raised initially before the trial court in opposition to summary judgment cannot be raised for the first time on appeal. Devine, 863 A.2d at 1169. Accordingly, the sole argument preserved by Get ‘Er Done relating to the affidavits is that the witnesses were not disclosed during discovery and are prevented from testifying pursuant to Rule 4019(i). Get ‘Er Done’s argument on this claim consists of the following: Further, the fact that these purported witnesses were never disclosed should be considered against [Caterpillar]. These individuals would not have been permitted to testify[,] as their identities were concealed during discovery. This would prevent them from testifying under [Rule] 4019(i). It is implicit in the context of a summary judgment ruling that the [c]ourt should not consider otherwise inadmissible testimony. Brief of Appellant, at 24. Pennsylvania Rule of Civil Procedure 4019 addresses discovery sanctions. Subsection (i) provides as follows: (i) A witness whose identity has not been revealed as provided in this chapter shall not be permitted to testify on behalf of the -6- J-A08020-22 defaulting party at the trial of the action. However, if the failure to disclose the identity of the witness is the result of extenuating circumstances beyond the control of the defaulting party, the court may grant a continuance or other appropriate relief. Pa.R.C.P. 4019(i). As Caterpillar correctly notes, this rule, by its terms, is only applicable to preclude the testimony of a witness at trial, not to bar the submission of an affidavit at the summary judgment stage, and Get ‘Er Done has cited to no case law holding otherwise. Nor did Get ‘Er Done ever file a motion for discovery sanctions pursuant to Rule 4019 in the trial court. In any event, Get ‘Er Done had actual notice of the involvement of Iron Planet and of the Floyd affidavit3 at the time discovery was extended for six months—at Get ‘Er Done’s request—on January 29, 2020, yet chose not to depose either Floyd or a representative of Iron Planet. Accordingly, Get ‘Er Done is entitled to no relief on this claim. Next, Get ‘Er Done claims that the trial court erred in disregarding the “expert report” of Dan Durkin, “which was the only adequately supported valuation of the equipment.” Brief of Appellant, at 24. Durkin valued the directional drill at between $440,000 and $550,000, yet the court found the actual sale price of the drill, in the amount of $150,500, to be reasonable.4 ____________________________________________ 3 Caterpillar provided notice to Get ‘Er Done of Iron Planet’s involvement in the sale of the directional drill in 2016, and again in 2017, when it mailed notices of sale to Get ‘Er Done. See Plaintiff’s Amended Motion for Summary Judgment, 8/17/20, at Exhibit I. In addition, a copy of the Floyd affidavit was attached to Caterpillar’s original motion for summary judgment, filed on January 15, 2020, after which the court extended the discovery deadline by six months. See Trial Court Order, 1/29/20. 4 Durkin’s report does not discuss the value of the hydraulic excavator. -7- J-A08020-22 Get ‘Er Done asserts that Durkin’s report “raises a significant factual issue which the [c]ourt should have preserved for trial.” Id. at 25. In response, Caterpillar contends that the Durkin report “is not competent expert testimony under Pennsylvania law.” Brief of Appellee, at 20. First, Caterpillar argues that the report is merely “an unsworn, unsupported expression of value submitted by . . . a heavy equipment salesman who has sold equipment to [Perry Rowan, Get ‘Er Done’s owner] for many years.” Id. Caterpillar asserts that the report is “inherently unreliable on its face and fails to meet the requirements of the Pennsylvania Rules of Civil Procedure and . . . Evidence.” Id. Durkin “failed to submit credentials to the [c]ourt or the parties that would justify qualification as an expert” and, thus, Get ‘Er Done’s characterization of the document as an “expert report” is “legally deficient and factually unavailing.” Id. at 21. Moreover, Caterpillar argues, Durkin lacked any basis to opine on the value of the drill at the time it was repossessed and sold at auction. Durkin never personally examined the drill or even reviewed any documentation related to the drill. Rather, Durkin’s report indicates that his valuation is based on “the condition [of the drill] as it was related to [him].” Report of Dan Durkin, (undated), at [2]. Caterpillar further notes that Durkin fails to identify the source of his information and that it could not have come from Rowan, who testified at his deposition that he never spoke to Durkin about the report. See Rowan Deposition, 7/8/20, at 91. Finally, Caterpillar argues that Durkin is not an impartial witness, as he continues to maintain a longstanding -8- J-A08020-22 business relationship selling equipment to Rowan and/or Rowan’s employers. We agree with Caterpillar that Durkin’s report lacks the proper foundation required of expert testimony and, as such, was properly disregarded by the trial court. Pennsylvania Rule of Evidence 702 governs the admissibility of expert testimony and provides as follows: A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if: (a) the expert’s scientific, technical, or other specialized knowledge is beyond that possessed by the average layperson; (b) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; and (c) the expert’s methodology is generally accepted in the relevant field. Pa.R.E. 702. At the summary judgment stage, a trial court is required to take all facts of record, and all reasonable inferences therefrom, in a light most favorable to the non-moving party. This clearly includes all expert testimony and reports submitted by the nonmoving party or provided during discovery; and, so long as the conclusions contained within those reports are sufficiently supported, the trial judge cannot sua sponte assail them in an order and opinion granting summary judgment. Contrarily, the trial judge must defer to those conclusions, and should those conclusions be disputed, resolution of that dispute must be left to the trier of fact. Wright v. Eastman, 63 A.3d 281, 292 (Pa. Super. 2013) (citations omitted; emphasis added). -9- J-A08020-22 Pennsylvania Rule of Evidence 705 requires that “[i]f an expert states an opinion the expert must state the facts or data on which the opinion is based.” Pa.R.E. 705. “[E]xpert testimony must be based on more than mere personal belief, and must be supported by reference to facts, testimony or empirical data.” Snizavich v. Rohm & Haas Co., 83 A.3d 191, 195 (Pa. Super. 2013) (citations omitted). At the summary judgment stage, a trial court must evaluate expert reports submitted by the non-moving party in a light most favorable to the non-moving party, so long as the conclusions contained within those reports are sufficiently supported. Summers v. Certainteed Corp., 997 A.2d 1152, 1161 (Pa. 2010) (emphasis added). Here, Durkin stated the basis for his opinion as to the value of the directional drill as follows: I have reviewed the sales documents for the Ditchwitch [] drill[.] I have further examined the market value, as of 2016[,] for th[is] item[], including sales receipts and my personal experience in the drilling supply industry to formulate the following opinions to a reasonable degree of certainty. I have also examined the Iron Planet auction website for its practices [and] procedures for sale. ... After reviewing the equipment and [its] condition with the Defendants[’] representative, Mr. Rowan, in the condition as it was related to me, should have warranted a price in the range of $440,000.00 to $550,000.00. ... I have been working for and selling underground construction equipment for Ditch Witch Mid-States for more than 15 years now and my research and valuation for FMV (fair market value) for above said equipment comes from my experience and researching - 10 - J-A08020-22 wholesalers and brokers specific to directional drills and support equipment such as MTI, HDD Broker, Machinery Trader & Source HDD. l believe these valuations are fair asking prices even as of today’s market demand. Durkin Report, at 2. As a preliminary matter, we note that Durkin provided the court with no credentials to establish his competency as an expert in the valuation of used construction equipment. Durkin’s sole stated qualification is that he has been “working for and selling underground construction equipment for Ditch Witch Mid-States for more than 15 years.” Durkin Report, (undated), at 2. While it is well-established that a witness may be qualified to render an expert opinion based on training and experience alone, see Miller v. Brass Rail Tavern, Inc., 664 A.2d 525, 528 (Pa. 1995), Durkin provides no additional details regarding his training or experience, nor does he indicate that he possesses any expertise in the appraisal and resale of used equipment. More important, however, is the fact that Durkin provides no basis for his opinion as to the value of the drill “by reference to facts, testimony, or empirical data.” Snizavich, supra. In fact, the record demonstrates that Durkin opined as to the drill’s value without ever inspecting the equipment. While Durkin suggests in his report that Rowan “related” to him the condition of the drill, Rowan denied that he ever discussed this matter with Durkin, see Rowan Deposition, 7/8/20, at 91, and, even if he had, Rowan’s self-interested description of the drill’s condition could not form the factual basis of an admissible expert opinion. Accordingly, because Durkin’s conclusions were not sufficiently supported, Summers, supra, the trial court was within its - 11 - J-A08020-22 discretion to disregard the Durkin report in ruling on Caterpillar’s motion for summary judgment. Finally, Get ‘Er Done raises two interrelated challenges to the validity of the sale of the directional drill.5 Specifically, Get ‘Er Done claims that the trial court erred in finding the sale of the directional drill by auction on the website Iron Planet was a public sale because it was only advertised by email to the subscriber members of Iron Planet. Brief of Appellant, at 19. As such, Get ‘Er Done argues the sale was a private one. Get ‘Er Done further argues that Caterpillar’s notice of public sale was deficient, as the sale occurred seven days prior to the date indicated on the notice. No relief is due. Section 9610 of the Commercial Code (“Code”) provides for the disposition of collateral following a default, in relevant part, as follows: (a) Disposition after default.--After default, a secured party may sell, lease, license or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing. (b) Commercially reasonable disposition.--Every aspect of a disposition of collateral, including the method, manner, time, ____________________________________________ 5 Get ‘Er Done also purports to challenge the validity of the notice of private sale with respect to the excavator, asserting that it was not mailed to the correct address and Rowan “testified he does not recall ever receiving the notice.” Brief of Appellant, at 21. This claim is patently meritless. Rowan acknowledged that the address to which notice was sent—240 Kovalcheck[s] Road, Carmichaels, PA 15320—was, in fact, the corporate address of Get ‘Er Done. The erroneous inclusion by Caterpillar of an “s” at the end of the word “Kovalcheck” is insufficient to invalidate the notice. Moreover, Rowan testified that “I’m not saying [the notices] didn’t come. I’m saying I didn’t see them . . . probably because I didn’t open up the mail and look at them. . . . Sometimes I don’t get to my mail for 30, 40 days.” Rowan Deposition, 7/8/20, at 39. - 12 - J-A08020-22 place and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels and at any time and place and on any terms. 13 Pa.C.S.A. §§ 9610(a) & (b). The terms “public sale” and “private sale” are not defined in the Code. Section 9611 of the Code requires that a secured party disposing of collateral shall provide the debtor a reasonable authenticated notification of disposition. Id. at § 9611. In a non-consumer goods transaction, such as that at issue here, a notification of disposition sent “after default and ten days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.” Id. at § 9612(b). Section 9613 of the Code governs the form of notice for the disposition of collateral and provides, in relevant part, as follows: Except in a consumer-goods transaction, the following rules apply: (1) The contents of a notification of disposition are sufficient if the notification: (i) describes the debtor and the secured party; (ii) describes the collateral which is the subject of the intended disposition; (iii) states the method of intended disposition; (iv) states that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and (v) states the time and place of a public disposition or the time after which any other disposition [i.e., private sale] is to be made. - 13 - J-A08020-22 (2) Whether the contents of a notification which lacks any of the information specified in paragraph (1) are nevertheless sufficient is a question of fact. (3) The contents of a notification providing substantially the information specified in paragraph (1) are sufficient even if the notification includes: (i) information not specified by that paragraph; or (ii) minor errors which are not seriously misleading. Id. at § 9613. The purpose of requiring notification is to give the debtor a reasonable period of time in which to exercise his option to participate in the sale or otherwise to protect his interest. Reuter v. Citizens & N. Bank, 599 A.2d 673, 678 (Pa. Super. 1991). Here, Caterpillar sent notice of public sale to Get ‘Er Done at its corporate address, see Rowan Deposition, 7/8/20, at 39, on October 2, 2017. The notice stated, in relevant part, as follows: [Caterpillar will sell the drill] at public auction by Iron Planet, Inc., an online auction company (via Internet public auction). The unit(s) can be previewed on the Iron Planet Internet Site (www.ironplanet.com) from 10/23/2017 through 11/02/2017. The auction will begin 11/02/2017 sometime after 8:00[ a.m.] at (www.ironplanet.com). All instructions regarding the auction may be found on the Iron Planet web site. The auction will close at 5:00[ p.m.], 11/02/2017. At that time, all sales will be final. Notice of Public Sale, 10/2/17. The online auction house utilized by Caterpillar, Iron Planet, “provides an online marketplace connecting motivated sellers and buyers of heavy machinery and other industrial assets from around the world.” Duane Hronik Affidavit, 9/14/20, at ¶ 11. It regularly auctions drilling equipment and, “in - 14 - J-A08020-22 the last several years . . . has sold a total of 31 directional drills generating gross transaction value of over $3 million.” Id. The auction at which Get ‘Er Done’s drill was offered for sale was marketed from October 5, 2017 through October 26, 2017 via email advertisements sent to Iron Planet’s 1.4 million registered account holders, as well as to the 1.5 million subscribers to Iron Planet’s promotional news bulletins. Id. at ¶¶ 5, 6. The auction web pages were viewed over 4 million times in the weeks leading up to the auction by individuals from around the world, including the United States, Canada, Mexico, Colombia, Peru, and the Philippines. Id. at ¶ 7. The webpage for the directional drill was viewed approximately 370 times. Id. at ¶ 8. Approximately 160,000 individuals attended the auction, at which approximately 13,000 bids were placed on items available for sale. Id. at ¶ 9. The directional drill itself received 100 bids from 19 different bidders around the globe. Id. at ¶ 10. The online auction was held between October 12, 2017 and October 26, 2017. Id. at ¶ 4. As to the valuation of the equipment, Caterpillar offered the Floyd affidavit, in which the affiant stated that the values of the excavator and directional drill were determined using an internal Caterpillar Financial system called the Valuations Management Tool (VAT). The VAT “contains matrices specific to each Caterpillar model . . . [and] provide[s] a value specific to the model, model year, estimated hours, configuration or attachments, and application.” Floyd Affidavit, 1/13/20, at ¶ 22. The values within the VAT “are based on a detailed analysis of the past five years of public auction data, - 15 - J-A08020-22 Caterpillar Dealer sales data, and Cat Financial Remarketing sales data, and is updated annually.” Id. Floyd averred that the VAT valued the directional drill at $145,500 and that it ultimately sold at online auction for $150,500. Id. at 27, 28. We can discern no error in the trial court’s conclusion that the sale of the directional drill constituted a public sale and that the notice provided to Get ‘Er Done was sufficient. The cases relied upon by Get ‘Er Done are readily distinguishable from the instant matter. See Fidelity Consumer Discount Co. v. Clark, 482 A.2d 580, 583 (Pa. Super. 1984) (holding unpublicized sales of two repossessed automobiles not public, where sole evidence as to nature of sales consisted of testimony that “the sales were ‘for anybody that wanted to look at it.’”); Coy v. Ford Motor Credit Co., 618 A.2d 1024 (Pa. Super. 1993) (holding sale of repossessed automobile at unadvertised auction open only to automobile dealers not “public” sale under the Code). Conversely, here, Caterpillar utilized the power of the internet to advertise the auction to a worldwide audience of at least 1.4 million—and up to 2.9 million—people who were registered users of Iron Planet’s website and/or subscribers to its newsletters. See Hronik Affidavit, 9/14/20, at ¶¶ 5, 6. As noted above, approximately 160,000 individuals from around the world attended the auction at which the drill was sold. The drill itself received 370 views and 100 bids. Importantly, Get ‘Er Done presented no evidence that would have created a genuine issue of material fact as to the commercial reasonableness of the online auction. Although we have found no case law - 16 - J-A08020-22 specifically addressing the question of whether an online auction may constitute a “public sale” as contemplated by the Code, because the auction in this case reached a sufficiently broad worldwide audience and garnered a substantial number of views and bids, we conclude that the trial court did not err in finding it to be a public sale. As to the sufficiency of the notice of public sale, we conclude that the discrepancy in dates was immaterial. Pursuant to the Code, a notification of disposition sent “ten days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.” 13 Pa.C.S.A. § 9612(b). Here, the notice of public sale was dated October 2, 2017. The auction began ten days later, on October 12, 2017, and concluded on October 26, 2017. See Hronik Affidavit, 9/14/20, at ¶ 4. As such, Get ‘Er Done had sufficient opportunity to visit the Iron Planet website and submit a bid had it chosen to do so. Moreover, as noted above, the primary purpose of the notice provision is to give the debtor a reasonable period of time in which to exercise his option to participate in the sale or otherwise to protect his interest. Reuter, supra. Here, Rowan does not argue that he was prevented from making an offer for the drill because he was misinformed regarding the dates of the auction. In fact, Rowan testified at his deposition that: (1) he did not even see the notice of sale because he often does not look at his mail, see Rowan Deposition, 7/8/20 at 40; (2) he was unable to make the payments on the equipment because his money “ran out,” id. at 33; and (3) he had previously attempted - 17 - J-A08020-22 to find a buyer for the equipment, but had been unsuccessful in doing so. See id. at 59-63. Accordingly, Rowan was not prejudiced by the erroneous dates contained in the notice of public sale. Judgment affirmed. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 11/18/2022 - 18 -	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487734/	People ex rel. Cassar v Toulon (2022 NY Slip Op 06629) People ex rel. Cassar v Toulon 2022 NY Slip Op 06629 Decided on November 18, 2022 Appellate Division, Second Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports. Decided on November 18, 2022 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department COLLEEN D. DUFFY, J.P. CHERYL E. CHAMBERS JOSEPH J. MALTESE PAUL WOOTEN, JJ. 2022-08982 [*1]The People of the State of New York, ex rel. Christopher J. Cassar, on behalf of Trevon Copeland, petitioner, vErrol D. Toulon, etc., et al., respondents. Cassar Law Firm, P.C., Huntington, NY (Christopher J. Cassar pro se of counsel), for petitioner. Raymond A. Tierney, District Attorney, Riverhead, NY (Christopher Turk of counsel), for respondents. DECISION & JUDGMENT Writ of habeas corpus in the nature of an application to release Trevon Copeland upon his own recognizance or, in the alternative, to set reasonable bail upon Suffolk County Indictment No. 73015/2022. ADJUDGED that the writ is dismissed, without costs or disbursements. The petitioner has not demonstrated that the Supreme Court, Suffolk County, violated "constitutional or statutory standards" (People ex rel. Klein v Krueger , 25 NY2d 497, 499; see People ex rel. Rosenthal v Wolfson , 48 NY2d 230). DUFFY, J.P., CHAMBERS, MALTESE and WOOTEN, JJ., concur. ENTER: Maria T. Fasulo Clerk of the Court	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487749/	ALD-027 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ___________ Nos. 22-2412 & 22-2413 ___________ COMMONWEALTH OF PENNSYLVANIA v. ELIZABETH ANN HARING, Appellant ____________________________________ On Appeal from the United States District Court for the Eastern District of Pennsylvania (E.D. Pa. Nos. 2:22-cr-00216-001 & 2:22-cr-00217-001) District Judge: Honorable Mark A. Kearney ____________________________________ Submitted for Possible Dismissal Pursuant to 28 U.S.C. § 1915(e)(2)(B) or Summary Action Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6 November 10, 2022 Before: HARDIMAN, RESTREPO, and BIBAS, Circuit Judges (Opinion filed: November 18, 2022) _________ OPINION* _________ PER CURIAM * This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. Pro se Appellant Elizabeth Haring appeals orders of the District Court in these two cases she removed from state court. For the reasons set forth below, we will summarily affirm. I. In October 2020 and May 2021, Haring received citations for harassment of two individuals in her condominium complex. The cases were joined in the Magisterial District Court for Montgomery County, Pennsylvania, but in June 2022, Haring removed the cases, separately, to the United States District Court for the Eastern District of Pennsylvania. Relying on Article III of the United States Constitution and 28 U.S.C. §§ 1331, 1332, 1443, and 1455, Haring asserted that removal was proper because she was being denied her rights to a fair trial, a jury trial, discovery, and to confront witnesses in state court, and because her cases raised First Amendment issues. The District Court promptly reviewed the notices of removal and remanded the cases to state court. In both cases, Haring then filed motions for extensions of time to file amended notices of removal, as well as motions to correct errors in both case captions that listed the United States as Haring’s opposing party. The District Court denied those motions. Haring filed notices of appeal, challenging the District Court’s remand orders, as well as the orders denying her motions for an extension of time and to correct the record. The appeals have been consolidated for disposition. 2 II. Because Haring asserted that removal was proper under § 1443, we have jurisdiction to review the District Court’s orders remanding these matters to state court. See 28 U.S.C. § 1447(d); BP P.L.C. v. Mayor & City Council of Baltimore, 141 S. Ct. 1532, 1538 (2021). We exercise plenary review over the remand orders. See Lazorko v. Pa. Hosp., 237 F.3d 242, 247 (3d Cir. 2000). Summary action is appropriate if the appeal does not present a substantial question. See 3d Cir. L.A.R. 27.4; I.O.P. 10.6. III. The District Court properly remanded Haring’s criminal cases to state court. An individual seeking removal of a state criminal case to federal court must allege a denial of her civil rights on account of race and that she cannot enforce her federal rights in state court. See Johnson v. Mississippi, 421 U.S. 213, 219-20 (1975). Removal under § 1443(1) is not warranted when it is based, as it was here, on “[c]laims that prosecution and conviction will violate rights under constitutional or statutory provisions of general applicability.” Id. at 219. Haring likewise failed to allege any ground that would permit removal under § 1443(2), which applies only to “federal officers or agents and those authorized to act with or for them in affirmatively executing duties under any federal law providing for equal civil rights.” City of Greenwood v. Peacock, 384 U.S. 808, 824 (1966). None of the other provisions upon which Haring relied provides a basis for removal, either. Namely, § 1455 merely sets forth the procedures pursuant to which 3 actions may be removed. And, as the District Court noted, §§ 1331 and 1332 pertain to subject matter jurisdiction for civil actions, not for criminal defendants who wish to remove their cases from state court. Moreover, because the District Court lacked jurisdiction over Haring’s cases and properly remanded them to state court, it also correctly denied her motions for an extension of time and to correct errors in the case captions.1 Accordingly, we will affirm the judgment of the District Court. 2 1 We note, further, regarding Haring’s requests to amend the captions in both cases, that the parties are correctly identified on both the District Court’s dockets and ours. 2 Haring’s motion for appointment of counsel filed in C.A. No. 22-2412 is denied. See Tabron v. Grace, 6 F.3d 147, 155 (3d Cir. 1993). 4	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487755/	Filed 11/18/22 P. v. Gordon 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, F080257 Plaintiff and Respondent, (Super. Ct. No. F16900715) v. HARRY GORDON, OPINION Defendant and Appellant. APPEAL from a judgment of the Superior Court of Fresno County. John F. Vogt, Judge. Valerie G. Wass, 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, Julie A. Hokans and Clara M. Levers, Deputy Attorneys General, for Plaintiff and Respondent. -ooOoo- INTRODUCTION In 2016, appellant Harry Gordon shot his wife three times in her abdomen but she survived. A jury convicted him of attempted premeditated murder (Pen. Code, §§ 664/187, subd. (a);1 count 1), finding true that he personally inflicted great bodily injury, and he personally and intentionally discharged a firearm. The jury also convicted him of corporal injury to a spouse (§ 273.5, subd. (a); count 2), finding true that he inflicted great bodily injury and he personally used a firearm. In count 1, the court sentenced appellant to life with the possibility of parole, plus a consecutive 25 years to life for the firearm enhancement (§ 12022.53, subd. (d)). The sentence in count 2 was stayed.2 Appellant claims that alleged instructional and cumulative errors occurred. He also asserts that the trial court abused its discretion in imposing certain fines and assessments upon him. We reject his arguments and affirm. BACKGROUND It was undisputed at trial that appellant shot his wife. The issue for the jury was whether appellant had intended to kill her. The defense argued that appellant was mentally ill when this shooting occurred, and he had unreasonably believed his wife was having an affair. The defense also asserted that, stemming from a prescription medication, appellant had been voluntarily intoxicated when he shot his wife. The defense asked the jury to find appellant not guilty of attempted premeditated murder. Based on the verdicts rendered, it is apparent that the jury rejected the defense’s position. We summarize the material facts which support the jury’s verdicts. We provide additional facts later in this opinion when relevant to the issues raised. 1 All future statutory references are to the Penal Code unless otherwise noted. 2 In count 2, the court imposed an upper term of four years, with an additional and consecutive 10 years for the firearm enhancement and five years for the great bodily injury enhancement. 2. I. Appellant’s Wife Filed for Divorce. At the time of trial, appellant and his wife had been married for about 28 years, and they have three children together. The jury learned that they did not have a happy marriage. They often argued in the years leading up to this shooting. Appellant had worked for Bay Area Rapid Transit as a supervisor. After retiring in late 2011, he relocated his family to Fresno in April 2012. After retiring, appellant stopped doing “almost everything.” He became very withdrawn. Appellant’s wife told the jury that she became increasingly bitter about how appellant was treating her. In December 2015, she filed divorce papers. She served appellant with those legal documents after Christmas that year. II. Appellant Gets a Restraining Order against his Wife. In or about mid-January 2016, appellant and his wife fought over a debit card, which resulted in a tug-of-war. His wife eventually pulled the card from appellant’s hand. A short time later, appellant went to a hospital to ensure that prior back and knee injuries were not inflamed, and he informed a nurse about the incident, which led to law enforcement being notified about a possible incident of domestic violence. A deputy became involved, and, about two days after this altercation, appellant had his wife served with a restraining order. She moved out of their home and she began living with her mother. After moving out, appellant texted his wife, saying he wanted her to come back and they could work things out, but she did not respond. III. Appellant’s Behavior Worsens. After his wife moved out, appellant began arguing with his children, H.G. (a son) and R.G. (a daughter). Appellant believed they had taken his wife’s side. Appellant said he did not want a divorce, and he kept asking his daughter if his wife was cheating on him. She told him that her mother was not having an affair. On January 24, 2016, about five days before he shot his wife, appellant had an argument with his daughter, and his son told appellant to leave his sister alone. Appellant 3. and his son then got into an argument. Appellant was crying and he kept repeating, “Just grab a knife and kill me.” His son believed appellant was serious about committing suicide. At that time, appellant’s son, H.G., was 21 years old and his daughter, R.G., was 17 years old. Appellant’s son called a non-emergency police number and reported what appellant had said. An officer responded, but, after speaking with everyone, the officer decided no further action was necessary. That night, appellant’s son and daughter moved out of the house, and they began living with their mother in their grandmother’s residence. IV. Appellant Takes Possession of his Firearms Right Before this Shooting. In or around December 2015, appellant gave his .22-caliber pistol and his .22- caliber rifle to a friend, David S. Appellant told David S. that he and his wife were having marital problems, and appellant was afraid she would do something with the firearms. David S. agreed to store the guns for appellant. In January 2016, a day or two before this shooting, appellant went to David S.’s residence and they each shot appellant’s .22-caliber pistol in David S.’s backyard. Appellant told David S. that he had asked his wife to leave, and he was going to be staying at his house by himself. Appellant said he did not feel safe, and he again took possession of his two firearms. V. The Shooting. On January 29, 2016, appellant’s wife, son and daughter were at the residence of a family friend, D.J. They were there providing babysitting and housesitting while D.J. was out of town. D.J. had been married to appellant’s wife’s second cousin, who had passed away. Appellant’s wife had looked after D.J.’s daughter from the time she was born until she was about three and a half years old. 4. On the day in question, appellant’s wife and daughter went outside D.J.’s residence at around 7:30 p.m. when D.J.’s mother, C.B., brought D.J.’s daughter back home after ballet lessons. It was dark outside. At some point, appellant appeared near the driveway and, according to his daughter, he appeared angry. His daughter asked him what he was doing there. Without saying anything, he pushed his daughter aside and he shot his wife from about 10 feet away, striking her abdomen three times. Appellant’s wife turned and ran towards the house, and appellant followed her. His daughter shoved appellant, who fell down. His daughter ran towards the house. While lying on the ground, appellant turned to C.B. and said something like, “ ‘It’s over. I’m done.’ ” C.B. told appellant to secure his gun, which he did. Appellant holstered his gun and put it on the top of a vehicle parked in the driveway. C.B. asked if he had shot “her” and he said, “Yes, I did.” C.B. was shaking so badly that she had trouble calling 911, but she was eventually able to do so. Appellant gave her the address to tell 911, and he appeared calm. At 7:35 p.m., appellant’s son also called 911 from inside the residence, reporting that appellant had shot his wife. Law enforcement responded almost immediately. Appellant told a responding officer that he had just shot his wife three times. Appellant said his heart was broken, and he believed his wife was having an affair with the homeowner. Appellant tried to move to a better vantage point and said, “I just want to see if she’s alive. The damn doors in the way. I think she’s not wrapped up. Usually if they are dead they won’t take them out for a long time.… So she’s still alive. My wife is.” He told the officer that they were “having a bitter divorce” and he had “nothing to lose.” He said that his wife had turned their children against him. Appellant told the officer that his daughter had knocked him down and his daughter’s actions had probably saved his wife’s life. Appellant stated to the officer that he was going to get the death penalty if his wife died, and that was okay because “I 5. deserve it.” Appellant said he had parked his truck down the street about half a block, and a rifle was inside it. VI. Appellant’s Interview with Law Enforcement. Two detectives interviewed appellant in the early morning hours the following day after this shooting. Appellant said the incident occurred because his wife was having sex with D.J. Appellant believed this affair was occurring because his wife was “hanging around” D.J. a lot, and appellant had found 17 “g-strings” in her drawer, that she never wore for him.3 Appellant told the detectives that, before this shooting occurred, he drove past D.J.’s residence at around 5:30 or 6:00 p.m., and he saw his wife’s vehicle in the driveway.4 He went home and took his medications, including a new one he took for the first time that day. He fed the dogs and he also ate. Appellant said he was “thinking all day” that he should “just kill the fucking bitch.” Appellant said he got his gun and went back to D.J.’s house, where he shot his wife. He said he “just kept hearing that I should kill her.” Appellant explained that, when he drove back to D.J.’s residence, he parked down the street and he walked towards the residence. It was his wife’s birthday that day, and appellant felt that he “had to do something” so he slashed two of her tires with a small knife. He then waited near some trashcans for a few minutes before “everybody” came out of the house. Appellant said he heard his wife’s voice, which made him feel crazy and sick. He complained to the detectives that he was “always good to her” but she was 3 The jury learned that, on January 23, 2016, appellant had called D.J., asking him if he was having an affair with his wife. D.J. had denied any affair, telling appellant to not contact him again and stay away from his family. D.J. did not tell appellant’s wife about appellant’s call. 4 At about 5:46 p.m. that same afternoon, appellant tried to call D.J., who did not answer. 6. “shitty” to him and had cheated on him. According to appellant, his wife had ruined his life and turned his children against him. Appellant believed he had fired his gun five or six times at his wife.5 He said that his daughter had saved his wife when she “tackled” him from behind and knocked him down. He said that his wife had started to run but he shot her. He said he “felt relief” when he fired. He said he was hoping she died, and he wanted her dead. He then stated that he did not want her to die, and he both hated “her guts” but also did not hate her. Appellant said he started planning to shoot his wife when he drove by the house the first time. He said he had been taking medication to control his anxiety and panic attacks. However, appellant said he “knew what [he] was doing” when he shot his wife, but he did not care. When told that his wife’s medical situation was critical, appellant said he felt “[r]eal bad” and he still loved her. VII. The Injuries. Appellant’s wife survived the shooting, but she suffered severe injuries to her stomach, pancreas, and inferior vena cava, a main blood vessel in the abdomen. She was in the intensive care unit of the hospital for three months, followed by additional care lasting more months. Her right kidney was destroyed and her other kidney stopped functioning so she was on a dialysis machine for 24 hours a day. Two months after being placed on the replacement list, she received a kidney replacement. At the time of trial, she was still suffering the physical aftermath of her injuries. VIII. Appellant’s Mental Health. Appellant did not testify at trial. His mental health became a cornerstone of his defense. 5 The crime scene technician only found three expended shell casings at the scene. 7. A. The testimony from appellant’s sister. Appellant’s sister told the jury that, in the 1990’s, appellant was hospitalized for about five to seven days for depression and manic depression. About a year before this shooting, appellant asked her for assistance in determining where he was going to live in his old age. Appellant had said that he could not count on his wife or his children to take care of him. His sister noticed that appellant was deteriorating physically. About seven to 10 days before the shooting, appellant’s sister was worried that he would commit suicide. She wanted to take him to a mental health doctor, but he did not believe such a doctor could help him. She believed that appellant’s mental health was deteriorating. She knew that, on the day of this shooting, appellant had started mental health treatment. On the day of this shooting, appellant called his sister and stated that he had proof that his wife was having an affair with D.J. Appellant explained that his wife’s vehicle was parked in the driveway, but D.J.’s vehicle was not there. Appellant believed his wife and D.J. had gone away together. His sister had told him that his wife might be babysitting, and she told appellant to calm down. His sister had told him that his belief was unreasonable, but he responded that she did not know everything. B. The testimony from the psychiatrist. A psychiatrist, Howard Bruce Terrell, testified on appellant’s behalf. Terrell met with appellant in August 2018 in the jail, and Terrell interviewed him for a little over two hours. This interview occurred about two years seven months after this crime. Terrell also reviewed approximately 400 pages of documents, including some of appellant’s medical records. Terrell reviewed numerous medical reports with the jury regarding various diagnoses that appellant had received from various mental health care providers. Terrell opined that, at the time of this shooting, appellant had been suffering from severe bipolar disorder, and he had been “severely depressed” and psychotic. However, Terrell also opined that appellant had known what he was doing when he shot his wife with a gun. Even though appellant was mentally ill, appellant “knew it was wrong.” 8. Terrell believed that appellant had known he was shooting his wife and that it could have resulted in her death. It was Terrell’s understanding that appellant had a long history of severe emotional problems going back to the mid-1990’s, and appellant had been previously hospitalized for psychiatric treatment. Leading up to this shooting, appellant had been severely depressed from a number of events. Appellant’s father had died after collapsing in front of him, and both appellant’s mother and another sister had died. Appellant’s marriage had been very poor, and appellant had obtained a restraining order against his wife. All of this represented horrible stressors for appellant. According to Terrell, appellant had held a very responsible job but he had to retire at a fairly early age due to severe medical problems. Appellant’s depression became worse, and he began “having psychotic symptoms of hearing voices.” During their meeting in the jail, appellant had reported to Terrell that he had experienced auditory hallucinations. Terrell understood that the voices appellant had been hearing probably started approximately a year or two before this crime, and appellant was “hearing a voice” on the day he shot his wife. The voice said something to the effect that appellant’s wife was cheating on him, and the voice made comments about killing her. Terrell believed that appellant had been experiencing auditory “command” hallucinations, which were consistent with his mental illness. According to Terrell, command hallucinations are very dangerous when people are psychotic. Their contact with reality is so impaired that, depending on the degree of mental illness and stressors, such a person may actually follow an auditory command hallucination. Terrell also noted that, while appellant was in jail for this crime, he had reported hearing auditory hallucinations in June 2016, and in May and August 2018. A medical note from April 2016 showed that appellant had reported hearing a voice telling him to kill his wife. Terrell found this consistent with appellant’s history of being acutely psychotic on the 9. day of this crime and having a command auditory hallucination telling him to kill his wife. On the day of the crime, appellant had been in “intensive outpatient treatment.” Terrell described this as one step short of psychiatric hospitalization. Appellant had been in this program for a number of hours before this shooting, and this had been appellant’s very first day in this treatment. Terrell explained to the jury that appellant’s psychiatric treatment was normally reserved for people who are quite mentally ill. Terrell informed the jury that appellant had reported to him that he had not planned to kill his wife. According to appellant, he brought a gun with him for his own protection because D.J. was supposedly an avid hunter. Appellant had also reported he had planned to damage his wife’s vehicle by shooting at it. Appellant reported to Terrell that, after slashing two of the tires on his wife’s car, family members had appeared. His estranged wife came out and then “he just suddenly abruptly went and shot her approximately three times.” Appellant had denied any plan to shoot his wife until he pulled the trigger, and he did not do so until she suddenly came out of the house. According to Terrell, when appellant told the responding officer at the scene that he was heartbroken, that could be a manifestation of being overwhelmed from the loss of a loving relationship, which would be part of his emotional illness at that time. Terrell was asked about the significance of appellant stating that he was going to get the death penalty if his wife died and that he deserved it. Terrell testified that even though appellant was mentally ill, he knew what he had done and he knew that his actions were wrong. Appellant had not been trying to escape responsibility. According to Terrell, appellant had exhibited psychotic behavior when he told the detectives that he had wanted his wife dead but he had also expressed a hope that she did not die. It was Terrell’s understanding that no evidence had supported appellant’s 10. paranoid belief that his wife had been unfaithful to him.6 Terrell explained that, although his wife had not been cheating on appellant, that was how appellant had perceived the world based on his mental illness. Appellant had believed his wife had alienated his children against him. Terrell testified that a rational person would know that his wife was babysitting the child of a deceased relative, especially when that had been occurring for approximately three years. According to Terrell, a person would normally see their wife’s car at that home and would understand that they were there babysitting. However, a person who is paranoid, psychotic, and plagued with auditory hallucinations could make a wrong conclusion that the car is there because the spouse was cheating on him. On cross-examination, Terrell admitted that, if appellant had lied to him, then his diagnosis would be less reliable. Terrell agreed that, if appellant had retrieved his firearm the day before this shooting, practiced using it and then shot his wife with it, that could show premeditation. Terrell explained that he was not saying appellant was unable to “think things through” with his mental illness, and he was not saying that appellant could not plan a crime. However, a person like appellant would have impaired thought processes, depending on the severity of his mental illness at the time. Terrell agreed that it appeared appellant had never reported hearing voices to his treating physicians before this crime occurred. However, Terrell believed that people like appellant with psychotic mental disorders are “frequently impaired” in their ability to premeditate and deliberate in a rational manner. According to Terrell, appellant’s mental functioning “was greatly impaired” on the day of this crime due to his psychotic mental disorder. 6 The jury learned that appellant’s wife was not having an affair with D.J. During closing argument, the defense conceded that appellant’s belief in this regard had been unreasonable but, according to defense counsel, this showed that appellant was mentally ill. 11. IX. The Impact of Appellant’s Medications. Appellant had reported taking Trazodone on the day of this crime, which is a type of antidepressant. He was also taking other medications for his depression. It was Terrell’s understanding that appellant had been prescribed a brand new medication, Klonopin, on the day this shooting occurred. Terrell explained that Klonopin can help with anxiety, but it can also “disinhibit people” similar to a person imbibing alcohol. According to Terrell, a person’s inhibitions or ability to restrain themselves might be impacted. Terrell found it “significant” that, even though appellant had been chronically mentally ill for much of his life, this crime was out of character for him,7 and it occurred “shortly after he took a brand new medication that can cause a person to lose their inhibitions.” DISCUSSION I. The Trial Court did not Err in Failing to Instruct the Jury on the Concept of “Attempted Involuntary Manslaughter.” Appellant contends that the trial court committed reversible error in failing to instruct the jury on the concept of “attempted involuntary manslaughter.” He argues that this alleged error was prejudicial, requiring reversal of his conviction for attempted premeditated murder. A. Background. In count 1, appellant was charged with attempted willful, deliberate and premeditated murder. In relevant part, the trial court instructed the jury on the elements of attempted murder, along with the additional allegations of premeditation and deliberation. The jurors were informed about the doctrine of voluntary manslaughter based on a heat of passion. Finally, the court told the jurors about the defense of 7 The jury learned that appellant had never before physically abused his wife. 12. “diminished actuality”8 and the jurors were instructed to consider what impact, if any, appellant’s auditory hallucinations had on his ability to deliberate and premeditate. The court did not instruct the jury on the concept of “attempted involuntary manslaughter.”9 B. Standard of review. Even in the absence of a request, a trial court in a criminal matter must instruct the jury on the general principles of law relevant to the issues raised by the evidence; this encompasses those principles closely and openly connected with the facts before the court which are necessary for the jury’s understanding of the case. (People v. Diaz (2015) 60 Cal.4th 1176, 1189.) “On appeal, we review independently the question whether the trial court improperly failed to instruct on a lesser included offense.” (People v. Souza (2012) 54 Cal.4th 90, 113.) In doing this review, we view the evidence in the light most favorable to the defendant. (People v. Millbrook (2014) 222 Cal.App.4th 1122, 1137.) C. Analysis. According to appellant, substantial evidence demonstrated that he had been suffering from a mental illness when he shot his wife, and he did not intend to kill her. He notes that the court deemed it appropriate to instruct the jury on the defense of diminished actuality, and it also instructed the jury to consider evidence of hallucination. 8 California no longer recognizes the defense of “diminished capacity.” (In re Christian S. (1994) 7 Cal.4th 768, 771.) However, it does recognize “diminished actuality,” which is the “actual failure to form a specific intent.” (People v. Mills (2012) 55 Cal.4th 663, 671.) “To support a defense of ‘diminished actuality,’ a defendant presents evidence of voluntary intoxication or mental condition to show he ‘actually’ lacked the mental states required for the crime. [Citation.]” (People v. Clark (2011) 52 Cal.4th 856, 880, fn. 3.) 9 Appellant notes in his opening brief that his trial counsel never requested the court to instruct on the concept of attempted involuntary manslaughter. Appellant, however, contends that the court had a sua sponte obligation to provide this instruction. 13. Appellant argues that the trial court should have also instructed on the concept of attempted involuntary manslaughter. We reject appellant’s arguments. Instructional error did not occur because the crime of “attempted involuntary manslaughter” does not exist in California and nothing suggests the trial court should have informed the jury about such a concept. Involuntary manslaughter is defined by statute as “the commission of an unlawful act, not amounting to a felony; or in the commission of a lawful act which might produce death, in an unlawful manner, or without due caution and circumspection.” (§ 192, subd. (b).) In addition to these statutorily defined ways to commit involuntary manslaughter, a “nonstatutory form of the offense” exists. (People v. Butler (2010) 187 Cal.App.4th 998, 1007.) The nonstatutory form involves a noninherently dangerous felony committed without due caution and circumspection. (People v. Burroughs (1984) 35 Cal.3d 824, 835–836.) Involuntary manslaughter is generally a lesser included offense to murder. (People v. Gutierrez (2002) 28 Cal.4th 1083, 1145.) Thus, whenever substantial evidence shows that a defendant acted without conscious disregard for human life and did not form the intent to kill, a trial court should instruct the jury on involuntary manslaughter. (People v. Vasquez (2018) 30 Cal.App.5th 786, 794.) Contrary to the doctrine of involuntary manslaughter, California does not recognize the concept of attempted involuntary manslaughter. (See People v. Brito (1991) 232 Cal.App.3d 316, 321 [cases cited therein]; see also People v. Broussard (1977) 76 Cal.App.3d 193, 197.) An attempted crime requires specific intent. (People v. Gutierrez (2003) 112 Cal.App.4th 704, 710, citing § 21a.) This is true even if the underlying crime does not require a showing of specific intent. (People v. Gutierrez, supra, 112 Cal.App.4th at p. 710.) Attempted involuntary manslaughter is not a crime 14. because one cannot intend to commit an unintentional killing.10 (People v. Johnson (1996) 51 Cal.App.4th 1329, 1332.) Appellant concedes that published opinions have already held that “attempted involuntary manslaughter” does not exist in California. He does not challenge those opinions or otherwise argue that they were wrongly decided. Instead, he relies on People v. Brothers (2015) 236 Cal.App.4th 24 (Brothers). This opinion does not assist him. In Brothers, the defendant was convicted of voluntary manslaughter after she and her accomplices beat the victim, who died of asphyxiation after an accomplice shoved a large cloth gag down his throat. (Brothers, supra, 236 Cal.App.4th at pp. 26, 28.) On appeal, the defendant claimed that the trial court had erred in failing to instruct the jury sua sponte on involuntary manslaughter. (Id. at p. 26.) After an extensive review of applicable authorities, the Brothers court held that an instruction on involuntary manslaughter as a lesser included offense to murder must be given when reasonable doubt existed whether the defendant had held implied malice during an inherently dangerous assaultive felony. (Id. at pp. 33–34.) However, based on its facts, Brothers determined that an instruction on involuntary manslaughter had not been warranted, even when crediting the defendant’s trial testimony. Instead, she had engaged in a deliberate and deadly assault. There was no evidence of an accidental killing or gross negligence. There was no evidence that the defendant had lacked a subjective understanding of the risk posed to the victim’s life. (Id. at p. 34.) The judgment was affirmed. (Id. at p. 36.) Appellant concedes that Brothers did not address whether attempted involuntary manslaughter is a crime in California, but he argues that its reasoning nevertheless supports his position. He contends that, in shooting his wife, he committed a 10 The elements of attempted murder are: (1) the defendant took at least one direct but ineffective step toward killing another person; and (2) the defendant specifically intended to kill that person. (CALCRIM No. 600; see also People v. Guerra (1985) 40 Cal.3d 377, 386 [specific intent to kill is required for attempted murder].) 15. “nonmalicious felony assault” that only required a showing of general criminal intent.11 He notes that, when a defendant is charged with murder but could not form the intent to unlawfully kill due to a mental illness (and there is no evidence of implied malice), the defendant must either be acquitted or found guilty only of involuntary manslaughter. (See People v. Saille (1991) 54 Cal.3d 1103, 1117.) He maintains that attempted nonstatutory involuntary manslaughter should be deemed a lesser included offense of attempted murder when a defendant can show diminished actuality. Appellant’s position is without merit. As an initial matter, Brothers is wholly inapposite to the present situation because it did not analyze or address attempted involuntary manslaughter. Cases are not authority for propositions not considered or decided. (Loeffler v. Target Corp. (2014) 58 Cal.4th 1081, 1134.) In any event, we reject appellant’s assertion that substantial evidence obligated the trial court to instruct the jury on the concept of attempted involuntary manslaughter. Viewing the facts in the light most favorable to appellant, the evidence overwhelmingly demonstrated that he was aware of his actions when he fired multiple shots at his wife. He admitted to a responding officer at the crime scene that he had just shot his wife three times, and he expressed concern about her health. Appellant acknowledged that he and his wife were going through a “bitter divorce.” He told the officer that his daughter had knocked him down, and appellant stated that his daughter’s actions had probably saved his wife’s life. He stated to the officer that he was going to get the death penalty if she died, and that was okay because “I deserve it.” At trial, Terrell informed the jury that, although appellant was mentally ill when this shooting occurred, he had known he was shooting his wife, appellant had known that his actions 11 Assault with a firearm is a general intent crime. (People v. Thornton (2007) 41 Cal.4th 391, 440.) 16. were wrong, and appellant had known that his actions could have resulted in his wife’s death. Brothers in no way establishes that the trial court had a sua sponte duty to instruct appellant’s jury on the unrecognized concept of attempted involuntary manslaughter. Nothing in this record shows that appellant accidentally shot his wife or that he acted with gross negligence. No evidence reasonably demonstrates that he failed to understand subjectively that he was posing a serious risk to her life when he pointed a loaded gun at her at relatively close range and repeatedly fired at her torso. Because the crime of attempted involuntary manslaughter does not exist in California, the trial court did not err when it failed to instruct the jury on such a concept, and nothing from this record establishes or even reasonably suggests that the court should have fashioned such an instruction in this situation. Appellant intentionally committed an inherently dangerous felony that could easily have resulted in death. Consequently, instructional error did not occur and this claim fails.12 II. The Trial Court did not Err in Refusing to Instruct the Jury Regarding Involuntary Intoxication. Appellant argues that the trial court erred in denying his request to instruct the jury on the defense of involuntary intoxication. A. Background. At trial, appellant’s counsel requested the court to instruct the jury on both voluntary and involuntary intoxication. The court stated it did not see any evidence of involuntary intoxication because, whatever medication appellant ingested, the record was unclear regarding how much he took “and he didn’t ingest it unknowingly.” The court stated its belief that involuntary intoxication exists if a person ingests a substance through force, duress, fraud or trickery, and those requirements were not present in appellant’s 12 Because the trial court did not err, we do not address appellant’s arguments regarding alleged prejudice. 17. situation.13 The court stated it would give an instruction on voluntary intoxication but it refused to instruct the jury on the defense of involuntary intoxication. B. Standard of review. We review de novo the trial court’s denial of the request to give a particular jury instruction. (People v. Guiuan (1998) 18 Cal.4th 558, 569.) The question is whether substantial evidence supported the requested instruction. (People v. Panah (2005) 35 Cal.4th 395, 484.) Substantial evidence is that which is sufficient for a reasonable jury to find in favor of the defendant. (People v. Salas (2006) 37 Cal.4th 967, 982.) In determining whether the evidence is sufficient to warrant a jury instruction, a court does not weigh credibility, but only asks whether evidence exists which, if believed by the jury, was sufficient to raise a reasonable doubt. (Id. at pp. 982–983.) C. Analysis. In raising this claim, appellant notes that he was prescribed Klonopin on the day of the shooting, and he took it. At trial, Terrell explained that Klonopin can “disinhibit” people by affecting their ability to restrain themselves from doing things that they would not normally do, including acts of violence. Terrell found it significant that appellant acted violently shortly after taking this medication. Based on this evidence, appellant contends that the trial court erred in failing to instruct on involuntary intoxication. According to appellant, his ingestion of a prescription medication without knowing all possible intoxicating effects constituted substantial evidence to support this instruction. 13 CALCRIM No. 3427 states: “Consider any evidence that the defendant was involuntarily intoxicated in deciding whether the defendant had the required (intent/ [or] mental state) when (he/she) acted. “A person is involuntarily intoxicated if he or she unknowingly ingested some intoxicating liquor, drug, or other substance, or if his or her intoxication is caused by the (force/[, [or] duress/, [or] fraud/, [or] trickery of someone else), for whatever purpose[, without any fault on the part of the intoxicated person].” 18. He asserts that this alleged instructional error was prejudicial, requiring reversal of his convictions. Appellant’s arguments are unpersuasive. Substantial evidence did not support this instruction, and any presumed error is harmless. 1. Substantial evidence did not support an instruction on involuntary intoxication. Our Supreme Court has stated that involuntary intoxication may result from the ingestion of a prescription medication if the defendant “was unaware of a potentially intoxicating and rare drug interaction.” (People v. Nieves (2021) 11 Cal.5th 404, 464.) Our high court has also held that involuntary intoxication can be caused by the voluntary ingestion of a prescription medication if the person did not know, or have reason to anticipate, its intoxicating effects. (People v. Baker (1954) 42 Cal.2d 550, 575.) Intoxication under that circumstance is involuntary because the defendant made an innocent mistake. (People v. Chaffey (1994) 25 Cal.App.4th 852, 856.) Here, substantial evidence did not support an instruction on involuntary intoxication. The evidence overwhelmingly showed that appellant voluntarily took Klonopin. Although Terrell testified that Klonopin can “disinhibit” people after taking it, there was no evidence that appellant ingested this drug without knowing its potential side effects. There was no evidence regarding what warnings, if any, he received about this drug. In addition, nothing established or even reasonably implied that appellant suffered a “rare drug interaction” when he took Klonopin on the day of this shooting. Indeed, no evidence was introduced in this trial regarding appellant’s blood toxicology or how Klonopin actually impacted him. Thus, nothing reasonably demonstrated or even suggested that appellant took a prescription medication that caused an unknown or unanticipated intoxicating effect. Finally, in arguing that error occurred, appellant contends that the trial court erroneously focused on the fact that appellant was not forced to take Klonopin. 19. According to appellant, the court employed an incorrect analysis when it denied the requested instruction. We disagree that this concern establishes that reversal is required. Based on our independent review, an involuntary intoxication instruction was not appropriate. Thus, although the court stated a different rationale for its denial, error did not occur because we review the court’s ruling and not its reasoning. (People v. Geier (2007) 41 Cal.4th 555, 582.) We affirm if the ruling was correct on any ground. (Ibid.) Based on this record, instructional error did not occur when the court denied appellant’s request to instruct the jury on the defense of involuntary intoxication. Substantial evidence did not support such an instruction. As such, this claim is without merit.14 In any event, however, we also determine that any presumed error is harmless. 2. Any presumed error is harmless. The parties disagree on the appropriate standard of review to analyze prejudice in this situation. Appellant primarily contends that we should analyze prejudice under Chapman v. California (1967) 386 U.S. 18 (Chapman). Under Chapman, the beneficiary of the error must prove beyond a reasonable doubt that it did not contribute to the jury’s verdict. (Id. at p. 24.) In contrast, respondent primarily asserts that we should rely on People v. Watson (1956) 46 Cal.2d 818 (Watson). Under Watson, the question is whether it is reasonably probable the verdict would have been more favorable to the defendant absent the error. (Id. at p. 836.) 14 In his opening brief, appellant states in passing that “it would have been appropriate” for the trial court to instruct the jury on the doctrine of unconsciousness due to involuntary intoxication. In his reply brief, however, appellant makes it clear that he is not arguing that the trial court erred by failing to give such an instruction. Instead, appellant contends that, if the court had instructed on involuntary manslaughter, it may also have instructed on unconsciousness caused by involuntary intoxication. As such, we do not address whether the trial court should have instructed on the doctrine of unconsciousness. 20. We need not resolve the appropriate standard of review in this situation. Instead, we can declare that, under any standard, any presumed error was harmless. The jury found true that, in committing attempted murder, appellant personally and intentionally discharged a firearm which proximately caused great bodily injury to his wife. The jury also concluded that appellant had premeditated in his attempt to kill her. The evidence overwhelmingly demonstrated that appellant knew he was shooting his wife, that he planned for her death in advance, and he intended her death. Appellant retrieved his firearms a day or two before this shooting. Appellant told detectives that he began planning to shoot his wife after he drove past D.J.’s house. He went home, fed himself and the dogs, and returned to D.J.’s house with his firearms. Appellant said he was “thinking all day” that he should “just kill the fucking bitch.” He said he “just kept hearing that I should kill her.” He explained that, when he drove back to D.J.’s residence, he parked down the street and he walked towards the residence. Appellant told multiple law enforcement officials, both immediately after this crime and during his formal interview, that he had shot his wife and his daughter had saved his wife’s life when she knocked him down from behind. At the crime scene, he stated that he was going to get the death penalty if his wife died, and that was okay because “I deserve it.” Appellant told detectives that he “knew what [he] was doing” when he shot his wife, but he did not care. At trial, Terrell informed the jury that, although appellant was mentally ill when this shooting occurred, appellant had known he was shooting his wife. Terrell opined that appellant had known that his actions were wrong, and appellant had known that his actions could have resulted in his wife’s death. We reject appellant’s position that his intent to kill was susceptible to reasonable doubt. To the contrary, the evidence overwhelmingly and conclusively established his intent to kill. Based on this record, we can declare beyond any reasonable doubt that any alleged error in failing to instruct the jury on involuntary intoxication was 21. overwhelmingly harmless. (See Chapman, supra, 386 U.S. at p. 24.) Likewise, it is not reasonably probable the verdict would have been more favorable to appellant absent this alleged instructional error. (See Watson, supra, 46 Cal.2d at p. 836.) Consequently, prejudice is not present under either standard and reversal is not warranted.15 III. Instructional Error Did Not Occur Regarding Voluntary Intoxication and any Presumed Error is Harmless. Appellant asserts that the trial court committed reversible error by failing to instruct the jury “fully and correctly” regarding the doctrine of voluntary intoxication. He contends that his conviction in count 1 for attempted premeditated murder must be reversed. A. Background. Based on CALCRIM No. 3426, the trial court gave a modified instruction to the jury regarding voluntary intoxication. The jurors were told that they could consider any evidence of intoxication only in deciding whether appellant “acted with a specific intent required in Count One.” The jurors were informed that the prosecution had the burden of proving beyond a reasonable doubt that appellant had acted “with the intent to kill and/or with deliberation and premeditation.” The jurors were instructed to find appellant not guilty in count 1 if the prosecution did not meet this burden. When the trial court instructed the jury with a modified version of CALCRIM No. 3426, it purposefully declined to inform the jurors to consider whether appellant 15 Appellant notes that the jury deliberated “for slightly over two hours over the course of two days before reaching its verdicts.” According to appellant, this suggests that at least one juror was entertaining doubts about whether appellant had acted with the intent to kill. We disagree. The record overwhelmingly established that appellant acted with intent to kill and these deliberations were not particularly lengthy. In any event even if the deliberations could be characterized as lengthy, that could also be reconciled as showing that the jury conscientiously performed its civic duty. (People v. Walker (1995) 31 Cal.App.4th 432, 439.) 22. became intoxicated from an “intoxicating drug.”16 According to the court, medications are not themselves intoxicating, but they can have an intoxicating effect. Defense counsel stated he was “okay” with the trial court’s instruction as modified. B. Standard of review. We review de novo a claim of instructional error. (People v. Mitchell (2019) 7 Cal.5th 561, 579.) To resolve such a claim, we must examine the challenged instruction in the context of the entire jury instructions and the trial record to determine if there is a reasonable likelihood the jury applied the instruction in an impermissible manner. (Ibid.) We must ascertain the relevant law and determine whether the given instruction correctly stated it. (People v. Kelly (1992) 1 Cal.4th 495, 525–526.) 16 CALCRIM No. 3426 reads as follows. We highlight in bold the word that the trial court purposefully omitted: “You may consider evidence, if any, of the defendant’s voluntary intoxication only in a limited way. You may consider that evidence only in deciding whether the defendant acted [or failed to do an act] with _____________ . “A person is voluntarily intoxicated if he or she becomes intoxicated by willingly using any intoxicating drug, drink, or other substance knowing that it could produce an intoxicating effect, or willingly assuming the risk of that effect. “In connection with the charge of _______________ the People have the burden of proving beyond a reasonable doubt that the defendant acted [or failed to act] with ______________ . If the People have not met this burden, you must find the defendant not guilty of ______________ . “ “You may not consider evidence of voluntary intoxication for any other purpose. [Voluntary intoxication is not a defense to _______________ .]” 23. C. Analysis. Appellant argues that the trial court failed to give “a correct and complete instruction” regarding voluntary intoxication. He raises three concerns. First, the court should have expressly told the jurors to consider intoxication regarding both his intent to kill, and regarding deliberation and premeditation. He asserts that the court was too vague when it told the jurors to consider evidence of intoxication regarding his “specific intent” in count 1. Second, appellant contends that the court should have not removed the word “intoxicating” before the phrase “any drug, drink or other substance” in the second paragraph of CALCRIM No. 3426. Finally, appellant argues that the court expressly failed to inform the jurors to consider intoxication regarding the lesser included offense of attempted voluntary manslaughter. We reject appellant’s arguments. This claim is forfeited and it also fails on its merits. We further conclude that any presumed error is harmless. 1. Appellant has forfeited this claim. The parties dispute whether or not appellant has forfeited this claim. Respondent asserts that, because appellant not only failed to object to the instruction but agreed to the modifications, forfeiture should apply. Appellant concedes that his trial counsel did not object to the modified version of CALCRIM No. 3426 which the court provided, and defense counsel did not request any additional modifications. However, appellant contends that we should reach the merits of this claim. According to appellant, his substantial rights were impacted by the allegedly deficient instruction. (See § 1259 [an appellate court may review “any instruction given, refused or modified, even though no objection was made thereto in the lower court, if the substantial rights of the defendant were affected thereby”].) In the alternative, appellant raises a claim of ineffective assistance of counsel. We agree with respondent that this claim is forfeited. Appellant did not object to the proposed language which the trial court stated it would use with CALCRIM No. 24. 3426, and appellant did not request any modification. Thus, he “may not be heard now.” (People v. Guiuan, supra, 18 Cal.4th at p. 570.) In any event, we also reject this claim on its merits.17 2. Instructional error did not occur. We reject appellant’s assertion that instructional error occurred regarding voluntary intoxication under CALCRIM No. 3426. Evidence of voluntary intoxication is admissible regarding whether or not a defendant “actually formed a required specific intent, or, when charged with murder, whether the defendant premeditated, deliberated, or harbored express malice aforethought.” (§ 29.4, subd. (b).) Here, the trial court specifically told the jurors to consider any evidence of voluntary intoxication in deciding whether appellant “acted with a specific intent required in Count One.” The jurors were informed that the prosecution had the burden of proving beyond a reasonable doubt that appellant had acted “with the intent to kill and/or with deliberation and premeditation.” The jurors were instructed to find appellant not guilty in count 1 if the prosecution did not meet this burden. Through other instructions, the court made it clear that the prosecution was required to prove that appellant had intended to kill in order to establish appellant’s guilt for attempted murder in count 1. The jurors were informed that, if they found appellant guilty of attempted murder, they then must decide if the prosecution had proven the additional allegation that the attempted murder was done willfully, and with deliberation and premeditation. The jurors were told that an attempted killing that would otherwise be attempted murder is reduced to voluntary manslaughter if appellant attempted to kill 17 Because we also address and reject this claim on its merits, we need not address any alleged ineffective assistance of counsel because appellant cannot show he was prejudiced by his trial counsel’s performance. (See People v. Holt (1997) 15 Cal.4th 619, 703 [defendant not entitled to relief on claim of ineffective assistance of counsel where he made insufficient showing as to prejudice].) Likewise, because instructional error did not occur, appellant’s “substantial rights” were not violated. 25. someone because of a sudden quarrel or in the heat of passion. The elements for heat of passion and the relevant legal terms were defined for the jury. The court stated that the prosecution bore the burden of proving beyond a reasonable doubt that appellant intended to kill someone and was not acting as a result of a sudden quarrel or in the heat of passion. If it did not meet this burden, the jurors were told that they must find appellant not guilty of attempted murder. During closing arguments, appellant’s trial counsel took the position that appellant had acted due to a psychotic mental disorder and the prosecution had not proven beyond a reasonable doubt that he had acted with deliberation and premeditation. Defense counsel reminded the jurors that appellant had taken a new medication on the day of this shooting, and Terrell had testified that this medication could lower a person’s inhabitations. Defense counsel stated that this medication “most definitely” was a defense in this case. The defense asserted that appellant’s conduct could be “excused” because he took the medication. According to the defense, appellant took it voluntarily “but he did not appreciate the risk or how the medication would make him feel which, of course, would explain why he did what he did on that night.” Defense counsel argued that the prosecution could not prove deliberation and premeditation beyond a reasonable doubt, and he asked the jury to find appellant not guilty in count 1. Based on this record, nothing establishes or even reasonably indicates that the jury would have not understood it could find appellant not guilty in count 1 of the charged crime, including attempted voluntary manslaughter, if it had believed appellant had lacked an intent to kill based on voluntary intoxication. The jury was told to consider appellant’s intoxication based on his voluntary ingestion of the prescription medication. Thus, it is not reasonably likely the jury applied CALCRIM No. 3426 in an impermissible manner. The totality of this record does not support appellant’s claim of instructional error and reversal is not warranted. In any event, we also conclude that any presumed error was harmless. 26. 3. Any presumed error is harmless. Appellant asserts that the incomplete version of CALCRIM No. 3426 “effectively precluded the jury” from considering his intoxication in determining if he was guilty of the lesser included offense of attempted voluntary manslaughter based on a heat of passion. He also maintains that jurors may not have realized they could consider evidence of his intoxication in determining if he had acted with an intent to kill, and/or with deliberation and premeditation. He contends that, based on the alleged instructional error, he was unable to present a full defense regarding his voluntary intoxication. He contends that reversal is required under the federal standard of Chapman. In the alternative, he argues that reversal is required even under the state Watson standard. We disagree that reversal is warranted under either standard even if instructional error is presumed regarding voluntary intoxication. Overwhelming evidence established appellant’s intent to kill and the defense never asked the jury during closing argument to consider attempted voluntary manslaughter. Instead, it was the defense’s position that appellant was not guilty in count 1 based on his use of medication because the prosecution could not prove beyond a reasonable doubt that appellant had acted with deliberation and premeditation. Based on the verdict rendered in count 1, however, the jury clearly rejected the defense’s position. The jury found that appellant intended to kill his wife, and he did so with deliberation and premeditation. The jury also found true that appellant intentionally discharged a firearm which caused her great bodily injury. Based on this record, we can declare beyond any reasonable doubt that any alleged instructional error regarding voluntary intoxication was overwhelmingly harmless. (See Chapman, supra, 386 U.S. at p. 24.) Likewise, it is not reasonably probable the verdict would have been more favorable to appellant absent this alleged instructional error. (See Watson, supra, 46 Cal.2d at p. 836.) Therefore, even if instructional error occurred regarding voluntary intoxication, prejudice is not present under either applicable standard, and this claim fails. 27. IV. Cumulative Error Did Not Occur and any Presumed Error is Harmless. Appellant maintains that, based on the totality of alleged multiple errors, his conviction for attempted premeditated murder must be reversed. He contends that the jury was confused so that he did not receive a fair trial and his due process rights were violated. A. Appellant’s specific concerns underlying his claim of cumulative error. In raising this claim, appellant again asserts that the jury was not fully and correctly instructed regarding the defense of voluntary intoxication. He also raises four new alleged errors, which we summarize. 1. The instruction regarding hallucinations. The trial court instructed the jury to consider evidence of appellant’s hallucinations, if any, in deciding if appellant acted with deliberation and premeditation. The court told the jurors that, if the People did not prove this allegation, they must find appellant not guilty of “first-degree attempted murder.” (Italics added.) However, the written instruction given to the jury (CALCRIM No. 627) did not contain the word “attempted” so the jurors were instructed in writing to consider any evidence of hallucination for “first degree murder.” Appellant argues it is presumed that the jury followed the written instruction and not the court’s verbal one. Based on that presumption, he contends that the jurors would have not known to consider evidence of his hallucinations in determining whether he had acted with premeditation and deliberation regarding the charge of attempted murder in count 1. 2. The instruction regarding mental disease, defect or disorder. With CALCRIM No. 3428,18 the jurors were instructed that they had heard evidence that appellant may have suffered from a mental disease, defect or disorder. The 18 The form version of CALCRIM No. 3428 states: “You have heard evidence that the defendant may have suffered from a mental (disease[,]/ [or] defect[,]/ [or] disorder). You may consider this evidence only for the 28. jurors were told that they could consider this evidence only for the limited purpose of deciding whether, at the time of the crime, appellant had “acted with the intent or mental state required” for a crime. When giving this instruction, the court informed the jurors that the prosecution bore the burden of proving beyond a reasonable doubt that appellant had acted with “an intent to kill” and to premeditate and deliberate. If that burden was not met, the jury was instructed that it must find appellant not guilty in count 1. Appellant argues that the instruction given under CALCRIM No. 3428 did not specifically delineate that the jury could consider his mental illness for each of the attempted homicide offenses in count 1. Appellant particularly contends that this instruction did not inform the jurors to consider his mental illness for the special allegation of premeditation and deliberation, and the lesser included charge of attempted voluntary manslaughter. 3. Referring to attempted murder as either “first-degree” or “second- degree.” At trial, the prosecutor and the court sometimes referred to the charge of attempted murder as either “first-degree” or “second-degree” attempted murder throughout the instructions and closing arguments. The verdict forms did not ask the jury to make a limited purpose of deciding whether, at the time of the charged crime, the defendant acted [or failed to act] with the intent or mental state required for that crime. “The People have the burden of proving beyond a reasonable doubt that the defendant acted [or failed to act] with the required intent or mental state, specifically: ________________ . If the People have not met this burden, you must find the defendant not guilty of ________________ . “ “[Do not consider evidence of mental (disease[,]/ [or] defect[,]/ [or] disorder) when deciding if _________________ was a natural and probable consequence of _______________ .]” 29. separate true finding regarding premeditation and deliberation. Instead, the jury returned a guilty verdict in count 1 for “ATTEMPTED WILLFUL, DELIBERATE, PREMEDITATED MURDER” as charged in count 1. Another verdict form permitted the jury to find appellant guilty of “ATTEMPTED SECOND DEGREE MURDER” as a lesser included offense in count 1. Appellant asserts that referring to “first-degree” and “second-degree” attempted murder at trial was error and confusing because attempted murder is not divided into degrees. 4. The court and the prosecutor told the jury the order on how to fill out the verdict forms. Both the prosecutor and the court gave directions to the jury regarding how to fill out the verdict forms. We summarize those relevant comments. a. The prosecutor’s disputed statements. At the end of the prosecutor’s initial closing argument, she reviewed the verdict forms with the jury. She told the jurors that, if they believed appellant was guilty of attempted murder with premeditation, they should sign the first verdict form without going to the other verdict forms regarding the lesser included offenses for count 1. The prosecutor further stated that, if the jurors decided that appellant was not guilty in count 1, then they should move to the lesser included offenses. She stated that “[a]ttempted second-degree murder is a lesser-included offense of attempted first degree,” and the difference was a lack of premeditation or deliberation. The prosecutor stated that, if the jurors found appellant not guilty of attempted murder, then they should consider attempted voluntary manslaughter. Finally, the prosecutor asserted that the jury could consider assault with a firearm in count 1 “after you’ve gone through all of those other verdict forms.” 30. b. The court’s disputed statements. At the conclusion of the jury instructions, the court explained how the jurors should fill out the verdict forms. The court stated that, if the jurors found appellant not guilty of attempted murder without premeditation and deliberation, then they could consider attempted voluntary manslaughter. The court said that, if the jurors found appellant not guilty of that charge, then they could consider assault with a firearm. Appellant argues that the court’s and prosecutor’s comments were in error because jurors are free to consider and discuss the greater and lesser offenses in any order. Appellant contends that the court and the prosecutor improperly directed the jurors on how to consider the charges. B. Analysis. Appellant makes it clear in his reply brief that he is not raising these alleged errors individually, but only collectively. Based on all of the concerns summarized above, appellant maintains that “the jury did not know exactly what it was being asked to decide.” He argues that the cumulative effect of these alleged errors may have resulted in the jury failing to consider the lesser included offenses. He contends that he did not receive a fair trial and the jury did not know how to consider the evidence of his mental disease, hallucinations and intoxication. He asserts that substantial evidence showed he was suffering from a mental disease and he was experiencing “auditory command hallucinations” telling him to kill his wife. He argues that he may have shot his wife in a heat of passion because he believed she was having an affair. Based on Chapman, he seeks reversal of his conviction in count 1. 31. We disagree that reversal of count 1 is warranted based on these alleged errors.19 Cumulative error did not occur and any presumed error is harmless.20 1. Appellant’s due process rights were not violated. “Under the ‘cumulative error’ doctrine, errors that are individually harmless may nevertheless have a cumulative effect that is prejudicial. [Citations.]” (In re Avena (1996) 12 Cal.4th 694, 772, fn. 32.) A claim of cumulative error is essentially a due process claim. (People v. Rivas (2013) 214 Cal.App.4th 1410, 1436.) The test is whether the defendant received a fair trial. (Ibid.) Here, appellant received a fair trial. Although the written instruction provided to the jury regarding hallucination (CALCRIM No. 627) only referred to murder, it is apparent from the totality of this record that the jury would have understood it could use evidence of appellant’s claimed auditory hallucinations in determining his guilt for attempted murder. Appellant was not charged with murder. It was undisputed that appellant had shot his wife, who had lived. The court verbally told the jury to consider this defense to the charge of attempted murder. Thus, there is no reasonable likelihood the jury would have been confused. Regarding appellant’s mental disease, defect or disorder (CALCRIM No. 3428), it is likewise clear that the jury would have understood it could consider appellant’s mental illness for each of the attempted homicide offenses. The court told the jury to consider appellant’s mental health when deciding if appellant had “acted with the intent or mental state required” for a crime. The court stated that the prosecution bore the burden of proving beyond a reasonable doubt that appellant had acted with “an intent to kill” and to 19 We do not again address appellant’s assertion that the jury was not fully and correctly instructed regarding voluntary intoxication, which we rejected earlier in this opinion. 20 Because this claim fails on its merits, we need not resolve the parties’ disputed arguments regarding forfeiture or ineffective assistance of counsel. 32. premeditate and deliberate. If that burden was not met, the jury was instructed that it must find appellant not guilty in count 1. With other instructions, the jury was told that both attempted murder and attempted voluntary manslaughter required an intent to kill. The jury was instructed that an attempted killing that would otherwise be attempted murder is reduced to attempted voluntary manslaughter if appellant attempted to kill because of a sudden quarrel or in the heat of passion.21 Based on the totality of the instructions, no error occurred. It is readily apparent that the jury would have understood it could consider appellant’s mental health when deciding his guilt in count 1, including attempted voluntary manslaughter. We agree with appellant that attempted murder is not divided into degrees. (See People v. Houston (2012) 54 Cal.4th 1186, 1228.) However, we reject appellant’s contention that, because the prosecutor and the court sometimes referred to the charge of attempted murder as either “first-degree” or “second-degree” throughout the instructions and closing argument, the jury would have been confused. Instead, both the court and the prosecutor made it abundantly clear that the prosecution had to prove appellant’s intent to kill, and the prosecution had to prove that he premeditated and deliberated. Although the verdict form did not ask the jury to make a separate true finding regarding premeditation and deliberation, the jury had other options available to it, but it returned a guilty verdict in count 1 for “ATTEMPTED WILLFUL, DELIBERATE, PREMEDITATED MURDER.” This record neither establishes nor reasonably suggests that the jury might have misapplied the law. 21 The jury was also instructed in count 1 that it could find appellant guilty of assault with a firearm as a lesser included offense of attempted murder. Appellant correctly notes that assault with a firearm is not a lesser included offense to attempted murder. (People v. Parks (2004) 118 Cal.App.4th 1, 6.) However, appellant does not contend that this was reversible error. 33. Finally, we reject appellant’s assertion that the trial court and the prosecutor directed the jurors regarding how to consider the charges. When read in context, both the court and the prosecutor were discussing how the jury should fill out the verdict forms following their deliberations. “Under the acquittal-first rule, a trial court may direct the order in which jury verdicts are returned by requiring an express acquittal on the charged crime before a verdict may be returned on a lesser included offense.” (People v. Bacon (2010) 50 Cal.4th 1082, 1110.) Thus, we discern no error. Moreover, with CALCRIM No. 3517, the court specifically informed the jurors that they could determine the order in which they deliberated each charge. As such, this record does not show or even reasonably suggest that the jurors may have believed they were restrained regarding the order of deliberations. This record overwhelmingly establishes that appellant received a fair trial and the jury knew what was asked of them. The court properly instructed the jury that the prosecution bore the burden of proving appellant’s guilt beyond a reasonable doubt, and the prosecution had to prove appellant’s intent to kill. The jury was instructed that it could find appellant guilty of attempted voluntary manslaughter if appellant had acted under a heat of passion. The defense, however, never argued to the jurors that appellant had acted under a heat of passion and the defense never asked the jury to find appellant guilty of attempted voluntary manslaughter. Instead, the defense asserted that appellant could not have planned this crime, and he did not premeditate or deliberate because he was psychotic. Appellant’s trial counsel referenced the hallucination instruction during closing argument, and counsel reminded the jurors that appellant had told Terrell that he had been hearing voices. The defense maintained that, based on voluntary intoxication, appellant’s conduct “could have been excused” because he took medication. According to the defense, appellant “did not appreciate the risk or how the medication would make him feel which, of course, would explain why he did what he did on that night.” The 34. defense asserted that the prosecution could not prove deliberation and premeditation beyond a reasonable doubt, and appellant was not guilty in count 1. It is apparent that appellant was able to present his complete defense to the jury. His claim of cumulative error is without merit because we have rejected all of his individual claims. (See People v. Bradford (1997) 14 Cal.4th 1005, 1057 [the defendant’s cumulative prejudice argument rejected based on findings each individual contention lacked merit or did not result in prejudice].) Taking all of appellant’s arguments into account, we are satisfied that he received a fair adjudication. Consequently, his due process rights were not violated and reversal is not warranted. 2. Any presumed error is harmless. Even if presumed error occurred, we reject appellant’s assertion that reversal is required under Chapman. In light of the jury’s verdicts and true findings, it is overwhelmingly apparent that the jurors rejected appellant’s position that he had lacked a specific intent to kill, or that he could not premeditate and deliberate. The prosecution conclusively and overwhelmingly established appellant’s intent to kill, and that he had premeditated and deliberated before shooting his wife multiple times. Based on this record, we can declare beyond any reasonable doubt that any alleged errors underlying this claim were overwhelmingly harmless, whether viewed individually or collectively. (See Chapman, supra, 386 U.S. at p. 24.) Consequently, appellant’s various arguments are unpersuasive and this claim fails. V. Appellant has Forfeited his Dueñas-related claim Regarding the Imposition of Restitution Fines; in any Event, Appellant did not Suffer a Due Process Violation and the Trial Court did not Abuse its Discretion in Imposing Certain Fines and Assessments. Appellant contends the trial court abused its discretion and violated his due process rights by imposing upon him certain restitution fines and assessment fees. Appellant rests his claim primarily on People v. Dueñas (2019) 30 Cal.App.5th 1157 (Dueñas). 35. A. Background. At the time of sentencing, appellant was approximately 68 years old, he was five feet eight inches tall and weighed 290 pounds. The trial evidence established that appellant has numerous medical issues, including high blood pressure and back pain. The probation report indicated that appellant suffers from diabetes, sleep apnea, and he had “[s]evere mobility problems.” Appellant had apparently suffered a broken back about three years prior after falling while in jail. Appellant had suffered a stroke in jail at or around the same time. The report indicates that appellant was prescribed “15 to 20 medications” and, prior to his arrest, he was prescribed medical marijuana. At sentencing, the trial court imposed upon appellant (in part) a $1,000 restitution fine (§ 1202.4, subd. (b)(1)); a matching parole revocation fine (§ 1202.45); an $80 court operations assessment (§ 1465.8, subd. (a)(1)); and a $60 criminal conviction assessment (Gov. Code, § 70373, subd. (a)(1)). During the sentencing hearing, appellant’s trial counsel objected to the imposition of some of these financial obligations based on appellant’s inability to earn wages. The probation department had recommended that the court should impose a restitution fine of $9,600. The court noted that appellant would likely not be productive in prison “in any meaningful sense.” The court stated it would impose a “minimum” restitution fine of $1,000. The court waived the cost of the probation report, and it waived reimbursement to the County for the services rendered of the court-appointed counsel. The court noted that appellant’s retirement benefits were being paid to his wife, the victim in this case. B. Analysis. Appellant argues that the trial court “essentially found” that he lacked the ability to pay, but the court apparently was not aware that $300, and not $1,000, is the minimum restitution fine. Appellant contends he is indigent and the court abused its discretion and violated his due process rights by imposing the financial obligations. Appellant maintains that, although his crime was very serious, he suffers from mental health issues, 36. his wife is receiving his retirement benefits, and he has no opportunity for future employment. He wants the assessment fees struck, and the restitution fines reduced to the statutory minimum of $300 and stayed unless and until it is proven that he has the ability to pay. We reject appellant’s arguments. We agree with respondent that appellant has forfeited this claim regarding the restitution fines. We further hold that Dueñas is distinguishable from appellant’s situation, and appellant’s constitutional rights were not violated. Finally, we conclude that the trial court did not abuse its discretion. 1. Appellant has forfeited this claim regarding the restitution fines. Respondent contends that appellant has forfeited this claim regarding the imposed restitution fines. We agree. Section 1202.4, subdivision (b)(1), requires a court to impose a restitution fine in an amount not less than $300 and not more than $10,000 in every case where a person is convicted of a felony unless it finds compelling and extraordinary reasons not to do so. Section 1202.4, subdivision (c), specifies a defendant’s inability to pay is not a compelling and extraordinary reason to refuse to impose the fine, but inability to pay “may be considered only in increasing the amount of the restitution fine in excess of the minimum fine [of $300].” While the defendant bears the burden of demonstrating his or her inability to pay, a separate hearing for the restitution fine is not required. (§ 1202.4, subd. (d).) “Given that the defendant is in the best position to know whether he has the ability to pay, it is incumbent on him to object to the fine and demonstrate why it should not be imposed.” (People v. Frandsen (2019) 33 Cal.App.5th 1126, 1154.) Here, the probation department recommended restitution fines of $9,600. Although appellant objected at sentencing to the imposition of certain assessments, appellant’s trial counsel did not address the amount of the restitution fines, a point which appellant concedes in his opening brief. 37. Appellant had a statutory right and he was obligated to object to the imposition of a restitution fine above the $300 minimum. (§ 1202.4, subd. (c) [inability to pay may be considered when the restitution fine is increased above the minimum].) A factual determination was required regarding his alleged inability to pay. (See People v. Frandsen, supra, 33 Cal.App.5th at p. 1153.) Thus, such an objection would not have been futile under governing law when appellant was resentenced. (Id. at p. 1154.) We stand by the traditional rule a party must raise an issue in the trial court if he or she wants appellate review. (Id. at p. 1155.) Consequently, appellant has forfeited this claim regarding the $1,000 restitution fine (§ 1202.4, subd. (b)(1)) and the matching parole revocation fine (§ 1202.45). (See People v. Lowery (2020) 43 Cal.App.5th 1046, 1053– 1054 (Lowery).) In any event, even if forfeiture did not occur, we reject all of his arguments on their merits.22 2. Unlike the probationer in Dueñas, appellant’s due process rights were not violated and Dueñas is not applicable. In multiple opinions, this court has written extensively about Dueñas. (See, e.g., People v. Montes (2021) 59 Cal.App.5th 1107; People v. Son (2020) 49 Cal.App.5th 565; Lowery, supra, 43 Cal.App.5th 1046; People v. Aviles (2019) 39 Cal.App.5th 1055.) The defendant in Dueñas had cerebral palsy, which caused her to drop out of high school and left her unemployed. Her husband was also unemployed, although occasionally he was able to obtain short-term work in construction. (Dueñas, supra, 30 Cal.App.5th at p. 1160.) The defendant lost her driver’s license because she was too poor to pay juvenile citations. (Id. at p. 1161.) She continued to offend because aggregating criminal conviction assessments and fines prevented her from recovering her license. (Ibid.) The 22 Because we also address and reject this claim on its merits, we need not address appellant’s claim of alleged ineffective assistance of counsel. Because this claim fails on its merits, appellant cannot show he was prejudiced by his trial counsel’s performance. (See People v. Holt, supra, 15 Cal.4th at p. 703 [defendant not entitled to relief on claim of ineffective assistance of counsel where he made insufficient showing as to prejudice].) 38. Dueñas court described this as “cascading consequences” stemming from “a series of criminal proceedings driven by, and contributing to, [the defendant’s] poverty.” (Id. at pp. 1163–1164.) The Dueñas court concluded the defendant faced ongoing unintended punitive consequences because of the imposed financial obligations. Dueñas determined those unintended consequences were “fundamentally unfair” for an indigent defendant under principles of due process.23 (Dueñas, supra, 30 Cal.App.5th at p. 1168.) The Dueñas court concluded that due process requires a trial court to conduct an ability to pay hearing, and ascertain a defendant’s present ability to pay, before it imposes certain assessments under section 1465.8 and Government Code section 70373. (Dueñas, supra, 30 Cal.App.5th at p. 1164.) Dueñas also held that, although section 1202.4 bars consideration of a defendant’s ability to pay unless the judge is considering increasing the fee over the statutory minimum, the execution of any restitution fine imposed under this statute must be stayed unless and until the trial court holds an ability to pay hearing and concludes that the defendant has the present ability to pay the restitution fine.24 (Dueñas, supra, 30 Cal.App.5th at p. 1164.) 23 The Dueñas court noted that the imposed financial obligations were also potentially unconstitutional under the excessive fines clause of the Eighth Amendment of the United States Constitution. However, Dueñas stated, “[t]he due process and excessive fines analyses are sufficiently similar that the California Supreme Court has observed that ‘[i]t makes no difference whether we examine the issue as an excessive fine or a violation of due process.’ ” (Dueñas, supra, 30 Cal.App.5th at p. 1171, fn. 8.) 24 A different panel of the same court that decided Dueñas rejected the argument that Dueñas places a burden on the People to prove a defendant’s ability to pay in the first instance. (People v. Castellano (2019) 33 Cal.App.5th 485, 489–490 (Castellano).) Castellano clarifies that the defendant in Dueñas had demonstrated her inability to pay in the trial court and, only in that circumstance, had the appellate court concluded fees and assessments could not constitutionally be assessed and restitution must be stayed until the People proved ability to pay. (Castellano, supra, at p. 490.) Thus, “a defendant must in the first instance contest in the trial court his or her ability to pay the fines, fees and assessments to be imposed and at a hearing present evidence of his or her inability to pay the amounts contemplated by the trial court.” (Ibid.) 39. Here, we decline to expand Dueñas’s holding beyond the unique facts found in Dueñas. Unlike the probationer in Dueñas, appellant does not establish the violation of a fundamental liberty interest. His incarceration was not a consequence of prior criminal assessments and fines. He was not deprived of liberty because of alleged indigency. He was not caught in a cycle of “cascading consequences” stemming from “a series of criminal proceedings driven by, and contributing to, [his] poverty.” (Dueñas, supra, 30 Cal.App.5th at pp. 1163–1164.) Appellant could have avoided this criminal judgment and his incarceration regardless of his financial circumstances. Dueñas is distinguishable and it has no application in this matter. (See Lowery, supra, 43 Cal.App.5th at pp. 1054– 1055.) We agree with respondent that a criminal restitution fine, which does not impact a fundamental right, satisfies rational basis review. Appellant attempted to murder his wife. He shot a firearm multiple times at her, severely injuring her. Given the nature of appellant’s senseless and violent act, the restitution fine imposed against him was reasonably related to a proper legislative goal. The State of California has a legitimate interest in punishing criminal behavior. Thus, the restitution fine imposed in this matter survives rational basis scrutiny. (See Perkey v. Department of Motor Vehicles (1986) 42 Cal.3d 185, 189 [under rational basis review, a law does not violate due process if its enactment is procedurally fair and reasonably related to a proper legislative goal].) Finally, respondent concedes that due process is implicated when nonpunitive assessments (i.e., a court operations assessment or a criminal conviction assessment) are imposed on indigent defendants.25 Respondent notes it does not seek to uphold imposition of nonpunitive assessments on those who cannot pay. Respondent, however, 25 “A restitution fine ([Pen. Code,] § 1202.4, subd. (b)(1)) represents punishment. [Citation.] In contrast, a court operations assessment ([Pen. Code,] § 1465.8, subd. (a)(1)) and a criminal conviction assessment (Gov. Code, § 70373, subd. (a)(1)) are not considered punishment. [Citations.]” (Lowery, supra, 43 Cal.App.5th at p. 1048, fn. 3.) 40. asserts that any constitutional violation in this matter was harmless beyond a reasonable doubt. Respondent notes that the trial court impliedly determined that appellant could pay these assessments when it denied the defense request to disregard the recommendations from the probation department. We disagree with respondent’s suggestion that a constitutional violation may have occurred in this matter associated with the imposition of a court operations assessment of $80 (§ 1465.8, subd. (a)(1)) and/or a criminal conviction assessment of $60 (Gov. Code, § 70373, subd. (a)(1)). To the contrary, those nonpunitive obligations are not analogous to the imposition of court reporter fees on an indigent defendant. (See Griffin v. Illinois (1956) 351 U.S. 12, 18–20 (plur. opn. of Black, J.) [due process and equal protection require a state to provide criminal defendants with a free transcript for use on appeal].) Appellant was not incarcerated because he was unable to pay prior fees, fines or assessments. (See Bearden v. Georgia (1983) 461 U.S. 660, 672–673 [fundamental fairness is violated if a state does not consider alternatives to imprisonment if a probationer in good faith cannot pay a fine or restitution].) The imposition of the nonpunitive assessments in this matter did not deny appellant access to the courts, it did not prohibit him from presenting a defense, and it did not prevent him from pursuing his appellate claims. The probationer in Dueñas presented compelling evidence the imposed assessments had resulted in ongoing unintended punitive consequences. In contrast, although appellant could suffer any number of future unintended consequences, mere speculation does not establish a present constitutional infirmity. (See Tobe v. City of Santa Ana (1995) 9 Cal.4th 1069, 1084 [hypothetical situations are insufficient to establish a statute is facially unconstitutional].) A law may not be held unconstitutional on its face “simply because those challenging the law may be able to hypothesize some instances in which application of the law might be unconstitutional.” (American Academy of Pediatrics v. Lungren (1997) 16 Cal.4th 307, 347 (plur. opn. of George C., J.).) To establish facial unconstitutionality, a petitioner must demonstrate an act’s 41. provisions “ ‘inevitably pose a present total and fatal conflict with applicable constitutional prohibitions.’ ” (Arcadia Unified School Dist. v. State Dept. of Education (1992) 2 Cal.4th 251, 267.) Based on this record, a substantive due process violation did not occur when the trial court imposed the restitution fine and the nonpunitive assessments in this matter. Appellant’s incarceration was not based on his alleged indigency. Instead, he chose to engage in violent criminal behavior. We reject his due process challenge and the applicability of Dueñas in this matter.26 (See Lowery, supra, 43 Cal.App.5th at pp. 1056–1057.) 3. The court did not abuse its discretion. Appellant maintains that the court abused its discretion. According to appellant, the court impliedly found that he lacked the ability to pay any fines and fees, and the court decided to impose minimum restitution fines, but it mistakenly believed that such a fine was $1,000 and not $300. We disagree that an abuse of discretion occurred. Absent a showing to the contrary, we presume that the trial court understood and followed the applicable law. (People v. Braxton (2004) 34 Cal.4th 798, 814; People v. Galvez (2011) 195 Cal.App.4th 1253, 1264.) We also presume that the court properly exercised its sentencing discretion. (People v. Weddington (2016) 246 Cal.App.4th 468, 492.) Here, we presume the court understood that $300, and not $1,000, is the statutory minimum fine under section 1202.4, and nothing reasonably rebuts that presumption. When imposing the restitution fine of $1,000, the court did not state it was intending to 26 Respondent contends we should analyze appellant’s Dueñas claim under the rubric of the excessive fines clause of the Eighth Amendment to the United States Constitution. Appellant does not respond to this argument, contending it was not part of his original claim. We agree with appellant that it is not appropriate to analyze appellant’s claim under the excessive fines clause because appellant’s constitutional challenge was based solely on due process. 42. impose the statutory minimum. Rather, the court stated it was imposing “a minimum” restitution fine after the probation department had recommended a restitution fine of $9,600. On the probation report, someone—presumably the court—struck that recommendation and handwrote “$1,000.” The court signed the report, indicating it had read and considered it. The court’s actions do not establish or even reasonably suggest that it did not understand the law. Instead, it overwhelmingly appears that the court simply intended to minimize the amount of restitution fines which the probation department had recommended. We reject appellant’s assertion that the court failed to exercise its discretion knowingly. This record amply supports the court’s sentencing decisions. Given appellant’s violent conduct and the totality of his situation, the court reasonably reduced the restitution fines from the recommended $9,600 to $1,000. Indeed, the imposed restitution fines are well within the parameters which the Legislature has recommended.27 Regarding the $80 court operations assessment and the $60 criminal conviction assessment, we have already determined that appellant’s due process rights were not violated and Dueñas is inapplicable. These assessments are statutorily mandatory for all criminal convictions. (See § 1465.8, subd. (a)(1); Gov. Code, § 70373, subd. (a)(1).) The court, however, waived the cost of the probation report, and it waived reimbursement to the County for the services rendered of the court-appointed counsel. The court did not exercise its sentencing discretion regarding the imposed fines and assessments in an arbitrary, capricious or patently absurd manner that resulted in a manifest miscarriage of justice. Likewise, the court’s ruling does not fall outside the 27 By statute, a trial court may determine the amount of a restitution fine as the product of the minimum fine ($300) multiplied by the number of years of imprisonment the defendant is ordered to serve, multiplied by the number of the defendant’s felony convictions. (§ 1202.4, subd. (b)(2).) Based on that recommended calculation, appellant’s restitution fines could have been well over $1,000. 43. bounds of reason under applicable law and relevant facts. Accordingly, an abuse of discretion is not present. (See People v. Rodrigues (1994) 8 Cal.4th 1060, 1124–1125; People v. Williams (1998) 17 Cal.4th 148, 162.) Consequently, this claim is without merit, and we will not strike the imposed assessments or further reduce the amount of the imposed restitution fines. DISPOSITION The judgment is affirmed. LEVY, Acting P. J. WE CONCUR: FRANSON, J. SMITH, J. 44.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487759/	Attorney Grievance Commission of Maryland v. Edward Allen Malone, Misc. Docket AG No. 47, September Term, 2020 ATTORNEY DISCIPLINE – SANCTIONS – DISBARMENT – Court of Appeals disbarred lawyer who, among other things, knowingly and intentionally misrepresented his disciplinary history on Texas Bar application by failing to disclose his prior disciplinary history; intentionally failed to disclose his admission to various bars in attempt to conceal his disciplinary history from Texas Board of Law Examiners; knowingly and intentionally provided false affidavits under oath, swearing that all information contained in his Texas Bar applications was true and correct; and knowingly and intentionally misrepresented that disclosure failures in his Texas Bar application were result of not reading application questions carefully enough. In addition, over period of several years, lawyer knowingly and intentionally failed to supplement Texas Bar application and re-applications with information concerning bar admissions and disciplinary history, thereby failing to correct misconception that he had fully disclosed his disciplinary history in all jurisdictions in which he was licensed; and engaged in pattern of dishonest and deceitful conduct that was prejudicial to administration of justice in applying to be admitted to Texas Bar. Such conduct violated Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) 8.1(a) and (b) (Bar Admission and Disciplinary Matters), 8.4(b) (Criminal Act), 8.4(c) (Dishonesty, Fraud, Deceit, or Misrepresentation), 8.4(d) (Conduct that is Prejudicial to Administration of Justice), and 8.4(a) (Violating MLRPC). Circuit Court for Anne Arundel County Case No. C-02-CV-20-002203 Argued: October 4, 2022 IN THE COURT OF APPEALS OF MARYLAND Misc. Docket AG No. 47 September Term, 2020 ______________________________________ ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. EDWARD ALLEN MALONE ______________________________________ Fader, C.J. Watts Hotten Booth Biran Gould Eaves, JJ. ______________________________________ Opinion by Watts, J. ______________________________________ Filed: November 18, 2022 Pursuant to the Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. 2022-11-18 12:54-05:00 Gregory Hilton, Clerk This attorney discipline proceeding involves a lawyer who engaged in a continued course of dishonest and deceitful conduct to gain admission to the Bar of Texas. In Attorney Grievance Comm’n v. Malone, 477 Md. 225, 291-92, 269 A.3d 282, 321-22 (2022) (“Malone I”), we concluded that Edward Allen Malone, Respondent, “knowingly and intentionally provided false responses on his sworn Texas bar applications” when he failed to disclose information concerning his prior disciplinary history and bar admissions and “declared under oath in his affidavit that the information he provided was true and correct, thereby committing perjury under Texas law.” In addition, we concluded that Malone knowingly and intentionally failed to supplement his Texas Bar application and subsequent re-applications with accurate information and thereby failed to correct the misapprehension that he had fully disclosed his disciplinary history in the jurisdictions in which he was licensed. See id. at 292, 269 A.3d at 321. We determined that, with this misconduct, Malone, a member of the Bar of Maryland, violated Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) 8.1(a) and (b) (Bar Admission and Disciplinary Matters), 8.4(a) (Violating the MLRPC), 8.4(b) (Criminal Act), 8.4(c) (Dishonesty, Fraud, Deceit, or Misrepresentation), and 8.4(d) (Conduct that is Prejudicial to the Administration of Justice). See id. at 294, 269 A.3d at 323.1 Rather than imposing a sanction, we ordered a limited remand to the hearing judge to reopen the evidentiary hearing for the purposes of: (1) permitting Malone to testify 1 Effective July 1, 2016, the MLRPC were renamed the Maryland Attorneys’ Rules of Professional Conduct, or MARPC, and renumbered without substantive change in Title 19 of the Maryland Rules. The petition for disciplinary or remedial action charged only violations of the MLRPC. concerning mitigating factors; (2) allowing Bar Counsel to call witnesses and introduce exhibits rebutting Malone’s testimony with respect to mitigation; (3) allowing the parties to present arguments concerning mitigating and aggravating factors; and (4) allowing the hearing judge to issue supplemental findings of fact and conclusions of law as to mitigating factors and, if necessary, aggravating factors. See Malone I, 477 Md. at 293, 269 A.3d at 322. We deferred ruling on any applicable aggravating and mitigating factors and the appropriate sanction pending the outcome of the remand. See id. at 236-37, 269 A.3d at 289. The limited remand stemmed from our conclusion that regardless of his invocation of the Fifth Amendment in response to a question from Bar Counsel as to mitigation at a deposition, Malone should have been permitted to testify concerning mitigation at the disciplinary hearing. See id. at 294, 269 A.3d at 323.2 As such, “we conclude[d] that the 2 During discovery, “Malone invoked the Fifth Amendment privilege against self- incrimination in response to two of Bar Counsel’s requests for production of documents, as well as in response to every question Bar Counsel asked at Mr. Malone’s deposition.” Malone I, 477 Md. at 235, 269 A.3d at 288. Bar Counsel took the position that Malone invoked the Fifth Amendment improperly but did not seek to compel discovery. See id. at 235, 269 A.3d at 288. “Instead, Bar Counsel filed a motion in limine seeking to preclude Mr. Malone from testifying at the upcoming evidentiary hearing on the alleged MLRPC violations.” Id. at 235-36, 269 A.3d at 288. On April 26, 2021, the hearing judge conducted a hearing on the motion in limine. See id. at 241, 269 A.3d at 291-92. In Malone I, we summarized Malone’s contentions at the hearing as follows: Mr. Malone argued that a litigant should be allowed to “assert the privilege pretrial” but later “change one’s mind and then testify” at trial. Mr. Malone also told the hearing judge that he probably would not testify as part of his “case in chief” at the upcoming evidentiary hearing, but that, if he were found “guilty” at the hearing, he would want to “address the Court” concerning the “sentence” to be imposed. -2- hearing judge’s order precluding [] Malone from testifying at the evidentiary hearing was in error to the extent it prevented [] Malone from testifying as to mitigating factors.” Malone I, 477 Md. at 263, 269 A.3d at 304. On March 22, 2022, on remand, the hearing judge conducted a hearing. At the hearing, Malone testified as to mitigation and offered exhibits into evidence. On May 10, 2022, the hearing judge filed supplemental findings of fact and conclusions of law, making findings as to mitigating and aggravating factors.3 On October 4, 2022, we heard oral argument. For the below reasons, we disbar Malone. BACKGROUND Hearing Judge’s Findings of Fact and Conclusions of Law In Malone I, 477 Md. at 248-56, 269 A.3d at 295-300, we summarized the hearing judge’s findings of fact as follows: Background Mr. Malone was admitted to the Bar of Maryland and the Bar of the Commonwealth of Virginia in 1999. He has also been admitted to practice in several United States District Courts, including: the Eastern District of Virginia in 2001, the Western District of Virginia in 2005, the District of Maryland in 2003, the District of Columbia in 2003, the Central District of Id. at 236, 269 A.3d at 288 (brackets omitted). The hearing judge ruled that Malone had invoked the Fifth Amendment privilege against self-incrimination in bad faith, granted Bar Counsel’s motion in limine, and precluded Malone from testifying at the evidentiary hearing, including as to mitigating factors. See id. at 236, 263, 269 A.3d at 288, 304. 3 On April 5, 2022, with the approval of the hearing judge and with Malone’s consent, Bar Counsel filed a “Consent Motion for Extension of Time to File Findings of Fact and Conclusions of Law” in which Bar Counsel requested an extension of time from May 6, 2022, to May 13, 2022, for the hearing judge to file findings of fact and conclusions of law. On the same day, this Court granted the motion. -3- Illinois in 2004, the Northern District of Illinois in 2013, the Eastern District of Texas in 2015, and the Western District of Texas in 2015. Virginia Disciplinary History On February 28, 2011, the Virginia State Bar issued Mr. Malone a public reprimand for violating Virginia Rules of Professional Conduct 1.3 (diligence), 1.16(d) (declining or terminating the representation), and 8.1(c) (failure to respond to bar counsel). Mr. Malone’s discipline stemmed from two client complaints. The first complaint was filed by Derrick Clayton in December 2006. After Mr. Clayton retained Mr. Malone and paid him $1,000 to represent him in a family law matter, Mr. Malone only spoke with Mr. Clayton one time about the status of the case and failed to respond to Mr. Clayton’s numerous requests for information. The second complaint was filed by Keya Woods in June 2007. Ms. Woods retained Mr. Malone to represent her husband in his appeal of a criminal conviction. Although Mr. Malone timely filed a notice of appeal, he failed to timely file the trial transcripts. The court ultimately dismissed the appeal. The Virginia State Bar served Mr. Malone with a summons and subpoena duces tecum compelling his appearance before the Fourth District Committee and demanding that he produce both client files for inspection. After Mr. Malone failed to appear, the Virginia State Bar Disciplinary Board administratively suspended him from the practice of law for his non- compliance. In or around June 2009, Mr. Malone took steps to have the suspension lifted but still failed to provide responses to the complaints. The Fourth District Committee held a hearing to determine whether Mr. Malone’s conduct violated the Rules of Professional Conduct. As noted above, Mr. Malone was issued a public reprimand. The terms of the reprimand required Mr. Malone to complete six Continuing Legal Education hours within six months of the reprimand. Mr. Malone knowingly and intentionally failed to inform Maryland Bar Counsel of his public reprimand as required under Maryland Rule 19-737(a). Mr. Malone failed to pay the disciplinary costs in connection with his reprimand, resulting in an administrative suspension on April 28, 2011. His failure to pay annual dues for two successive years resulted in his Virginia law license being forfeited on or about March 20, 2013. By order dated May 26, 2016, the Virginia State Bar Disciplinary Board terminated Mr. Malone’s 2011 suspension for non-payment of costs. Federal Court Disciplinary History On December 12, 2012, Chief Judge Deborah K. Chasanow of the United States District Court for the District of Maryland issued Mr. Malone -4- a private reprimand, stating: The Disciplinary & Admissions Committee of the Court has reviewed your response to the Court’s Order to Show Cause dated November 7, 2012. By Order entered on September 26, 2012, you were found in contempt by Bankruptcy Court Judge James F. Schneider in the case [ ] In re T.D. Bistro, Inc., Case No. 11-19367 JS, for failure to appear in a court proceeding without proper justification. Your response at the contempt hearing and to this Court’s show cause order was to claim financial hardship. The Disciplinary and Admissions Committee has found your explanation unacceptable. As an out-of-state attorney, you should not undertake representation of a client in this State if you are not prepared to appear at local proceedings. The Court therefore, at the recommendation of the Disciplinary and Admissions Committee, hereby issues a private reprimand to you based on your conduct. Despite the informal nature of this letter, it shall be treated as an order of this Court closing this case. Mr. Malone knowingly and intentionally failed to inform Bar Counsel of this private reprimand as required by Maryland Rule 19-737(a). Texas Bar Application and Admission On June 5, 2013, Mr. Malone filed an Application for Admission without Examination to the Texas Bar with the Texas Board [of Law Examiners (“the Texas Board”)]. Question 3 of the application required Mr. Malone to “[l]ist all state, federal, and/or foreign jurisdictions where you have been licensed or admitted to practice law.” Mr. Malone disclosed his admission to the Maryland Bar. Mr. Malone knowingly and intentionally failed to disclose his admission to the Virginia State Bar, the United States District Court for the District of Maryland, and various other federal district courts. The hearing judge found that, at or around the time Mr. Malone applied for admission to the Texas Bar in June 2013, he was actively representing clients before various federal district courts. Between May 2011 and February 2013, Mr. Malone represented a client before the United States Bankruptcy Court in the District of Maryland. This was the case in which Mr. Malone was held in contempt and that led to the issuance of the private reprimand in December 2012. In addition, between February 2013 -5- and September 2013, Mr. Malone represented a client in a separate matter before the United States District Court for the District of Maryland. Between June 2013 and June 2014, Mr. Malone represented a client before the United States District Court for the Northern District of Illinois. Question 13 of the application asked, “[h]ave you ever been held in contempt or sanctioned by a court?” Mr. Malone answered “no.” Mr. Malone knowingly and intentionally misrepresented his disciplinary history by failing to disclose that he had been held in contempt by the United States Bankruptcy Court in the District of Maryland and sanctioned by the United States District Court for the District of Maryland. Question 17(c) of the application asked, in relevant part, “[h]ave you ever been ... suspended from practice, disciplined, disqualified ... or has your license ever been qualified or conditioned in any way ...?” Mr. Malone answered “no.” Mr. Malone knowingly and intentionally misrepresented his disciplinary and licensing history by failing to disclose the Virginia discipline and administrative suspensions and the reprimand issued by the United States District Court for the District of Maryland. The application included an affidavit, signed by Mr. Malone on June 3, 2013, swearing that he “responded to all inquiries on [the application] fully and frankly, and all the information contained in [the] application ... is true and correct.” Mr. Malone’s affidavit was knowingly and intentionally false. To qualify for admission without examination, Mr. Malone was required to submit his federal tax returns from 2006-2012. He failed to do so, asserting that his tax returns were “none of the Board’s business.” Rather than submit the required documentation, on November 18, 2013, Mr. Malone elected to apply for admission to the Texas Bar by taking the February 2014 Texas Bar Examination. Mr. Malone took the exam but did not pass. On May 9, 2014, Mr. Malone filed a sworn Re-Application for Admission to the Bar of Texas. Again, Mr. Malone failed to disclose his admission to the Virginia Bar or the various United States District Courts, including the District of Maryland, and failed to disclose his disciplinary history. Rule X(e) of the Rules Governing Admission to the Bar of Texas states, in part, that “[t]he Applicant has a continuing duty to ensure the accuracy and completeness of the Applicant’s responses on the Application and to update those responses until the Applicant is certified to the Supreme Court for licensure.” On December 5, 2014, Mr. Malone filed a second sworn Re- Application for Admission to the Bar of Texas. Again, Mr. Malone failed to disclose his admission to the Virginia Bar or the various United States District Courts, and failed to disclose his disciplinary history. Mr. Malone again took the Texas Bar Exam in July 2014 but did not pass. Mr. Malone passed the February 2015 Texas Bar Exam and was admitted to the Texas Bar on April 30, 2015. -6- On February 10, 2016, the Texas Board opened an investigation after receiving notice of Mr. Malone’s disciplinary history in Virginia from the District Attorney of Sabine and San Augustine Counties, Texas. On February 10, 2016, the Texas Board advised Mr. Malone that it was investigating whether he obtained his Texas law license fraudulently or by a willful failure to comply with the Rules Governing Admission to the Bar of Texas. Rule XVII(b) provides: All law licenses are issued on the condition that the Applicant has faithfully complied with these Rules. If at any time it appears that an Applicant has obtained a license fraudulently or by willful failure to comply with these Rules, after notice and hearing, the Board may recommend to the Supreme Court that the license be withdrawn and canceled, and the name of the license holder stricken from the roll of attorneys. The Texas Board asked Mr. Malone to explain why he failed to disclose his Virginia licensure and disciplinary history. Mr. Malone responded by letter dated February 25, 2016, as follows: I failed to disclose my Virginia license and discipline to the board because I did not read the questions carefully enough. In applying for a Texas law license under the admission by motion program, I planned on using Maryland as the reciprocal state. As such, I did not believe I was required to share my experience practicing law in Virginia. This statement by Mr. Malone to the Board was a knowing and intentional misrepresentation. On May 13, 2016, Mr. Malone appeared before the Texas Board for a hearing and admitted that his statements to the Board in his February letter were false. He admitted to carefully reading the application questions, that he knew of his requirement to disclose his Virginia license and disciplinary history, and that he intentionally answered questions 3 and 17(c) falsely. By Order and Opinion dated May 24, 2016, the Texas Board concluded that Mr. Malone obtained “his license to practice law in Texas fraudulently or by willful failure to comply with the Rules.” The Texas Board found that Mr. Malone’s knowing and intentional misrepresentations on his bar applications “were material, were relied upon by the Board, and benefitted Mr. Malone in that he was licensed to practice law in Texas without any opportunity for the Board to make an informed determination regarding Mr. Malone’s moral character.” The Texas Board further found a “clear and rational connection” between Mr. Malone fraudulently obtaining -7- his Texas law license and “the likelihood he would injure a client, obstruct the administration of justice, or violate the Texas Disciplinary Rules of Professional Conduct.” The Texas Board recommended to the Supreme Court of Texas that Mr. Malone’s license be withdrawn and canceled. The Supreme Court of Texas withdrew and canceled Mr. Malone’s Texas law license by Order dated June 7, 2016. The Order required Mr. Malone to immediately notify his Texas clients and all Texas tribunals in which he had a pending matter of the Order and submit an affidavit stating he had done so. In response to the Supreme Court’s Order, Mr. Malone submitted an affidavit asserting that “[the Supreme] Court has no authority to compel me to do a thing... Requiring me to submit memos to judges and then file an affidavit with this Court constitutes involuntary servitude.” On June 15, 2016, Mr. Malone filed a Re-Application for Admission to the Texas Bar. He answered affirmatively to the question whether he has been charged with fraud, or alleged to have committed fraud, in a legal proceeding. Mr. Malone stated: “My misrepresentation only became an issue when a District Attorney ... came forward and complained to the Board after I begin to expose and challenge his unconstitutional practices.” The Texas Board granted Mr. Malone’s request that he not be required to retake the Texas bar exam. During Mr. Malone’s character and fitness investigation, the Texas Board asked him to provide a complete list of all federal jurisdictions in which he was licensed. Based on that list, the Board sent inquiries to multiple jurisdictions. The Board was advised by the United States District Court for the District of Maryland that Mr. Malone had been issued a private reprimand on December 12, 2012. As of 2016, Mr. Malone had failed to disclose this private reprimand to the Board. Following the character and fitness investigation, the Board notified Mr. Malone that a hearing would be held to determine whether Mr. Malone’s incomplete and false disclosures in connection with multiple applications for admission to the Bar of Texas indicates he lacks the good moral character required for admission; whether Mr. Malone’s Virginia State Bar disciplinary history indicates he lacks the good moral character required for admission; whether Mr. Malone’s history of obtaining his Texas law license by fraud or willful failure to comply with the Rules Governing Admission to the Bar of Texas and the subsequent cancellation of that license indicates he lacks the good moral character required for admission; and whether Mr. Malone’s correspondence with the Supreme Court of Texas and the Board of Law Examiners indicates he lacks trustworthiness in carrying out responsibilities directly related -8- to the judicial process. At the July 7, 2017 hearing before the Board, Mr. Malone testified that he failed to disclose his admission and disciplinary history in the United States District Court for the District of Maryland because he did not “remember” he was admitted to that court. The Board found Mr. Malone’s testimony not credible, noting that Mr. Malone was disciplined in the United States District Court for the District of Maryland in December 2012 and applied for admission to the Texas Bar only six months later in June 2013. The Board further found that Mr. Malone’s “failure to provide credible testimony or a legitimate explanation regarding the reason for his failure to disclose his disciplinary history with the United States District Court for the District of Maryland, is indicative of dishonesty and a lack of trustworthiness.” By Order dated July 21, 2017, the Board concluded that Mr. Malone did not possess the present good moral character required for admission to practice law in Texas. The Order required, among other things, that Mr. Malone provide copies of the Order to any jurisdiction in which he is admitted to practice law. On August 17, 2017, Mr. Malone filed a Petition for Review in the District Court for Travis County, Texas, requesting the court to review and overturn the Board’s decision denying him admission to the Texas Bar. In the Petition, Mr. Malone alleged that the Board denied him admission “because it wanted to punish him for ‘pulling one over’ on them and failing to be humble in re-applying for a license.” He also accused the Board of acting out of spite and trying to destroy him. In April 2020, Mr. Malone filed a Notice of Nonsuit in the District Court for Travis County, asking the court to dismiss his claims against the Board. On April 22, 2020, the Travis County District Court dismissed Mr. Malone’s claims against the Board. Mr. Malone reapplied for admission in Texas. At the time of the evidentiary hearing, his application was pending satisfaction of the requirement of present good moral character and fitness for admission to the Texas Bar. (Footnotes omitted) (ellipses and most alterations in original).4 Based on these findings of 4 In Malone I, 477 Md. at 290 n.24, 269 A.3d at 321 n.24, we explained that Malone excepted to two of the hearing judge’s findings of fact: First, Mr. Malone t[ook] issue with the hearing judge’s finding that Mr. Malone decided in 2013 to convert his Texas application to general -9- fact, the hearing judge concluded by clear and convincing evidence that Malone violated MLRPC 8.1(a), 8.1(b), 8.4(a), 8.4(b), 8.4(c), and 8.4(d). See Malone I, 477 Md. at 256, 269 A.3d at 300.5 Malone I In Malone I, 477 Md. at 290, 269 A.3d at 320-21, we determined that the hearing judge correctly concluded that Malone violated MLRPC 8.1(a), 8.1(b), 8.4(a), 8.4(b), 8.4(c), and 8.4(d). We explained: We agree with the hearing judge’s conclusion that Mr. Malone violated Rule 8.1(a) when he answered “no” to Questions 13 and 17(c) on his Texas Bar application. The hearing judge concluded that, in so doing, admission by examination because he believed that his tax returns were “none of the Board’s business.” Mr. Malone state[d] that he “in fact told the Texas Board that he decided to take the Texas law exam in order to learn Texas law” and that the hearing judge “took a 2017 statement by Respondent that his tax returns were ‘none of the board’s business’ out of context.” Second, Mr. Malone contend[ed] that the hearing judge erred in finding that Mr. Malone told the Texas Board that he did not “remember” being admitted to the United States District Court for the District of Maryland, when in fact, he testified before the Board that it was the federal district court’s private reprimand that he did not remember. We “assume[d] for present purposes that Mr. Malone’s exceptions to these two factual findings [we]re well taken[,]” but stated that “sustaining these exceptions [did] not materially affect the analysis [of] whether Mr. Malone violated the MLRPC, as alleged by Bar Counsel.” Id. at 290 n.24, 269 A.3d at 321 n.24. 5 The hearing judge originally found “five aggravating factors: (1) prior disciplinary offenses; (2) a dishonest or selfish motive; (3) a pattern of misconduct; (4) bad faith obstruction of the disciplinary proceeding; and (5) substantial experience in the practice of law[,]” and concluded that Malone had failed to prove any mitigating factors by a preponderance of the evidence. Malone I, 477 Md. at 260-61, 269 A.3d at 303. In addition to excepting to the hearing judge’s ruling concerning the invocation of his Fifth Amendment privilege against self-incrimination, Malone excepted to what he described as the hearing judge’s “fail[ure] to undertake an analysis of mitigating factors[,] [] fail[ure] to recognize the existence of various mitigating factors[,] and [] fail[ure] to properly analyze the existence of aggravating factors.” Id. at 262, 269 A.3d at 303-04 (cleaned up). - 10 - Mr. Malone knowingly and intentionally misrepresented his disciplinary history by failing to disclose that he had been held in contempt by the bankruptcy court, sanctioned by the United States District Court for the District of Maryland, and reprimanded and administratively suspended in Virginia. The hearing judge also concluded that Mr. Malone violated Rule 8.1(a) by intentionally failing to disclose his admissions to the Virginia Bar and various United States District Courts to conceal his disciplinary history from the Texas Board. In addition, the hearing judge concluded, Mr. Malone’s affidavit swearing that he “responded to all inquiries on [the application] fully and frankly, and [that] all the information contained in [the] application is true and correct,” was also knowingly and intentionally false. The hearing judge further found that, during the Board’s subsequent investigation of Mr. Malone, he continued to make misrepresentations, falsely stating that his disclosure failures were the result of not reading the bar applications questions carefully enough. Based on the record before the hearing judge, we determine that the hearing judge’s conclusions regarding Rule 8.1(a) are supported by clear and convincing evidence. The hearing judge concluded that Mr. Malone violated Rule 8.1(b) when he knowingly and intentionally failed to supplement his June 2013 bar application and subsequent re-applications with his admissions and disciplinary history, thereby failing to correct the misapprehension that he had fully disclosed his disciplinary history in all licensed jurisdictions. The hearing judge further found that Mr. Malone failed to provide the Board with a list of all federal jurisdictions in which he was licensed until September 2016, when the Board explicitly asked for such information during his character and fitness investigation of his reapplication after his Texas license was canceled. We agree with the hearing judge that this conduct violated Rule 8.1(b). *** The hearing judge correctly concluded that Mr. Malone violated Rule 8.4(a) by violating other Rules of Professional Conduct. We also agree with the hearing judge’s conclusion that Mr. Malone violated Rule 8.4(b) when he knowingly and intentionally provided false responses on his sworn Texas bar applications and when he declared under oath in his affidavit that the information he provided was true and correct, thereby committing perjury under Texas law. By definition, this conduct also constituted a violation of Rule 8.4(c), which prohibits attorneys from engaging in intentional acts of dishonesty. We also agree with the hearing judge’s conclusion that Mr. Malone violated Rule 8.4(d). His pattern of dishonest and deceitful conduct in his efforts to be admitted to the Bar in Texas reflects negatively on the public’s - 11 - perception of the legal profession. Id. at 291-92, 269 A.3d at 321-22 (footnote omitted) (alterations in original). As discussed above, we remanded the case to the hearing judge for further proceedings and the issuance of a supplemental opinion with findings of fact and conclusions of law concerning mitigating factors and, if warranted, revision of the prior findings of fact and conclusions of law concerning aggravating factors. See id. at 293, 269 A.3d at 322-23. Hearing Judge’s Supplemental Findings of Fact and Conclusions of Law Below is a summary of the hearing judge’s supplemental findings of fact and conclusions of law with respect to mitigating and aggravating factors. Mitigating Factors In the supplemental findings of fact and conclusions of law, the hearing judge began by observing that he had “heard and considered” Malone’s testimony and found “him credible on certain topics and not credible on others.” The hearing judge noted that he had considered Malone’s “overall demeanor, difficulty in acknowledging the wrongful nature of his conduct, and propensity to blame others for his conduct.” The hearing judge stated that although Malone had taken numerous continuing legal education classes on ethics through the Virginia Bar, he (the hearing judge) “was left with the impression that [Malone] has a fundamental misunderstanding of legal ethics in general, and in particular, why it is fundamentally important that attorneys be genuine and honest.” According to the hearing judge, “[a]n example of this fundamental disconnect” could be found in Malone’s seeming inability to understand that “it was wrong to note his association with a Texas traffic court - 12 - case as ‘pro hac’ at a time when he was neither licensed, nor permitted, pro hac vice, to practice law in Texas.” The hearing judge rejected Malone’s contention that he had taken responsibility for his misconduct and rehabilitated himself, finding that such assertions were undermined by Malone’s “apparent inability to understand why some of his actions are wrong.” The hearing judge explained that, “[b]eginning in or around June 2016, [Malone] continued to perpetrate falsehoods[,]” and that on July 7, 2017, at a character and fitness hearing of the Texas Board, Malone falsely testified that he failed to disclose his admission and disciplinary history in the United States District Court for the District of Maryland because he did not recall that he was admitted to that particular court. The hearing judge concluded that Malone’s testimony before the Texas Board was not credible, explaining that Malone had been disciplined in the District Court of Maryland in December 2012, only six months before he applied to the Texas Bar in June 2013, and that Malone represented a client in the District Court at the time that he applied to the Texas Bar in June 2013. The hearing judge pointed out that, in an order dated July 21, 2017, the Texas Board concluded that Malone did not possess the good moral character required for admission to the Texas Bar. The hearing judge explained that instead of accepting responsibility for his misconduct in the application process, Malone filed a petition for review in a Texas trial court, stating that the Texas Board had denied him admission “because it wanted to punish him for ‘pulling one over’ on them and failing to be humble in re-applying for a license[.]” The hearing judge noted that Malone accused the Texas Board “of acting out of spite and trying to destroy” him and “lying and behaving arrogantly.” - 13 - The hearing judge explained that although Malone stipulated to the factual findings in Virginia’s revocation opinion concerning his representation of a client in a Texas court after the Texas Board had rescinded his law license, he “failed and refused to acknowledge that his conduct constituted the unauthorized practice of law.” (Citations omitted). Instead, on remand before the hearing judge, Malone testified that the Texas court “had mistreated and wronged him because they reported him and got him in trouble.” (Cleaned up). After recounting all of the above, the hearing judge found that Malone had demonstrated by a preponderance of the evidence mitigation in the form of his church and volunteer work. The hearing judge explained that Malone is involved with at least two churches and provides “practical advice on an informal basis to churches wishing to do such things as renew their charters or articles of incorporation.” According to the hearing judge, Malone’s legal training and involvement with the churches allow him to provide such services on a limited basis and any concerns about Malone practicing law without a license were “allayed by” Malone’s “credible testimony that his work was limited in scope to practical matters supplementing the work of others who were licensed to provide legal services in those jurisdictions.” The hearing judge also found that Malone has been very involved in other non-legal volunteer activities that benefit his community. In addition, the hearing judge found that Malone “has demonstrated remorse to the degree to which he understands his ethical shortcomings.” Aggravating Factors The hearing judge found the existence of the same five aggravating factors for the same reasons given in the original opinion: (1) prior disciplinary offenses; (2) a dishonest - 14 - or selfish motive; (3) a pattern of misconduct; (4) bad faith obstruction of the disciplinary proceeding; and (5) substantial experience in the practice of law.6 With respect to the first factor, the hearing judge found that on February 11, 2012, the Virginia State Bar publicly reprimanded Malone and, on December 12, 2012, the United States District Court for the District of Maryland privately reprimanded him. Regarding the second and third factors, the hearing judge found that Malone had “demonstrated a dishonest and selfish motive and committed a pattern of misconduct in his years long pursuit for admission to the Texas Bar, engaging in a sustained course of dishonesty and deceit.” As to the fourth factor, the hearing judge explained that Malone had engaged in bad faith obstruction of the disciplinary proceeding. The hearing judge stated that, on March 2, 2021, Bar Counsel served Malone with a notice of deposition, and two days later, on March 4, 2021, Malone filed a motion for a protective order and to quash the notice of deposition, arguing, in part, that the deposition would violate his Fifth Amendment right against self-incrimination. On March 9, 2021, the hearing judge denied Malone’s motion. On March 29, 2021, Malone appeared remotely for the deposition but did not answer any questions,7 instead invoking his Fifth Amendment privilege against self-incrimination in 6 In both the original and supplemental findings of fact and conclusions of law, the hearing judge’s discussion of the reasons for finding each factor appeared to overlap among the factors. 7 After responding in the affirmative when asked whether it was his intention to assert the Fifth Amendment privilege to any and all questions, Malone invoked the Fifth Amendment in response to all other questions. See Malone I, 477 Md. at 240-41, 269 A.3d at 291. - 15 - response to each question asked, including questions asking him to spell his name for the record, whether he had received documents emailed to him by Bar Counsel prior to deposition, and whether he was able to see what Bar Counsel was sharing on the screen. On April 1, 2021, Bar Counsel filed a motion in limine requesting that Malone be precluded from testifying at the evidentiary hearing and, after a hearing on April 26, 2021, the hearing judge granted the motion, ruling that Malone had invoked the Fifth Amendment privilege against self-incrimination in bad faith. As such, Malone was precluded from testifying at the evidentiary hearing. With respect to the fifth factor, the hearing judge found that Malone’s misconduct was aggravated by substantial experience in the practice of law, as he was admitted to the Bar of Maryland in 1999. STANDARD OF REVIEW In an attorney discipline proceeding, we review for clear error a hearing judge’s findings of fact and review without deference a hearing judge’s conclusions of law. See Md. R. 19-740(b)(1) and (b)(2)(B); Attorney Grievance Comm’n v. Slate, 457 Md. 610, 626, 180 A.3d 134, 144 (2018). We determine whether clear and convincing evidence establishes that a lawyer violated an MLRPC. See Md. R. 19-727(c). DISCUSSION (A) Exceptions 1. Mitigating Factors Malone excepts to the hearing judge’s failure to find particular alleged mitigating factors. We overrule all of the exceptions. - 16 - Timely good faith efforts to make restitution or to rectify consequences of the misconduct Malone excepts to the hearing judge’s failure to find the mitigating factor of timely good faith efforts to make restitution or to rectify consequences of the misconduct. Malone contends that, in failing to find that he made good faith efforts to make restitution for his actions in Texas, the hearing judge overlooked the circumstance that he had been ordered to return only unearned fees to clients and that at the hearing on remand, he testified that he not only returned unearned fees but also provided full refunds to clients because he was remorseful. Malone alleges that his testimony demonstrated his efforts to make restitution and rectify the consequences of his misconduct and showed that he accepted responsibility for his actions. We overrule Malone’s exception to the lack of a finding of the mitigating factor of timely good faith efforts to make restitution or to rectify the consequences of the misconduct. To be sure, at the remand hearing, Malone testified that, while he was licensed to practice law in Texas from 2015 to June of 2016, he represented three clients who paid to retain his services and that he refunded their money. Malone testified about his reasons for refunding the money, stating: “The Texas Supreme Court told me to give back all unearned funds, all unearned fees. I felt ashamed that I let the clients down. I wanted to give them back enough so that they can hire somebody else, so I issued full refunds.” Malone also testified that, even though he was not required to give the clients full refunds, he did so because he “couldn’t take them to the finish line and [he] felt bad[,]” “[t]hat [he] was wrong[,]” and that he thought it was the right thing to do because if the client did not - 17 - get anything from him, the client “should receive a refund so they can hire another attorney.” We have explained on more than one occasion that “we afford a great deal of deference to the hearing judge’s credibility determinations[,]” and that “[t]he underlying justification for our deference to the hearing judge’s credibility determinations is based on the premise that the hearing judge is in the best position to assess the credibility of witnesses[.]” Attorney Grievance Comm’n v. Miller, 467 Md. 176, 195, 223 A.3d 976, 987 (2020) (cleaned up). See also Attorney Grievance Comm’n v. Tanko, 408 Md. 404, 420, 969 A.2d 1010, 1020 (2009) (“Undoubtedly, the hearing judge had the best opportunity to evaluate the veracity of the respondent’s explanation concerning his” alleged violation of the MLRPC.). In addition, we have stated that, “[g]enerally, a hearing judge maintains a great deal of discretion in determining which evidence to rely upon[,]” and, in making “findings of fact, the hearing judge is permitted to pick and choose which evidence to rely upon from the conflicting array of facts presented.” Miller, 467 Md. at 195, 223 A.3d at 987 (cleaned up). In addition, Maryland Rule 19-740(b)(2)(B) instructs that we “give due regard to the opportunity of the hearing judge to assess the credibility of witnesses.” In this case, at the outset of the supplemental findings of fact and conclusions of law, the hearing judge explained that he found Malone “credible on certain topics and not credible on others.” In other words, the hearing judge stated that he found some of Malone’s testimony not credible. It is apparent that the hearing judge found Malone’s testimony as to providing refunds to clients and the reasons for the refunds not credible. - 18 - Given the nature of the testimony, the hearing judge may have been unable to ascertain that the amount of any unearned fees would have been less than a full refund, and in the event that the hearing judge was satisfied that a full refund would have exceeded the amount of unearned fees, the hearing judge was not required to credit Malone’s testimony as to either giving full refunds or the reasons for doing so. The only exhibit that Malone referred to during this testimony was Exhibit D, which Malone testified was “a list of client[s] in Texas that [he] had to disengage with after Texas withdrew [his] law license.” Exhibit D is an untitled four-line document (that appears to have been typed by Malone or his counsel) listing four clients, three by name, with the word “refunded” and an amount for each client—$3,500, $750, $1,000, and $1,000. The hearing judge was in the best position to assess the veracity of Malone’s testimony as to the matter, and we accord deference to the hearing judge’s determination. Cooperative attitude during the proceedings For three reasons, Malone excepts to the hearing judge’s failure to find the mitigating factor of a cooperative attitude during the proceedings. First, according to Malone, the hearing judge ignored that he self-reported matters that led to the filing of the petition for disciplinary or remedial action. Second, Malone contends that the hearing judge ignored that, in Malone I, this Court noted that he had cooperated during the investigation and discovery process. Third, Malone argues that the record in this case demonstrates that he had a cooperative attitude during the proceedings—namely, he responded to the petition for disciplinary or remedial action and Bar Counsel’s discovery requests, he sat for a deposition, and he appeared for and took part in the evidentiary - 19 - hearing—all of which, according to Malone, shows that he was cooperative. We overrule Malone’s exception to the hearing judge not finding the mitigating factor of a cooperative attitude toward the attorney discipline proceeding. As with the mitigating factor of timely good faith efforts to make restitution or to rectify the consequences of the misconduct, this mitigating factor—having a cooperative attitude—is one that is based on the attorney’s behavior, demeanor, and, in part, credibility. In this case, we decline to disturb the hearing judge’s non-finding of the mitigating factor. In the supplemental findings of fact and conclusions of law, at the beginning of the section titled “Mitigating Factors,” the hearing judge accurately identified the list of mitigating factors that this Court considers in determining an appropriate sanction. The hearing judge’s list included the factor of “full and free disclosure to disciplinary board and cooperative attitude toward proceedings.” As such, the hearing judge’s opinion demonstrates that, as with other potentially applicable mitigating factors, the judge was aware of this factor and declined to find it. That Malone may have self-reported his misconduct to the Maryland Bar (and other jurisdictions), thus, according to him, beginning the disciplinary proceeding and leading to an investigation, is not dispositive of whether he had a cooperative attitude toward the attorney discipline proceeding. Pursuant to Maryland Rule 19-737(a), an attorney who is disbarred, suspended, or otherwise disciplined in another jurisdiction is required to promptly inform Bar Counsel of the discipline. That Malone self-reported means that he fulfilled the duty imposed upon all attorneys in Maryland to comply with the Rule on self- reporting and does not necessarily demonstrate that the mitigating factor of a cooperative - 20 - attitude toward the disciplinary proceedings is established. To the extent that Malone relies on language from this Court’s opinion in Malone I and contends that the opinion and record demonstrate that the factor of a cooperative attitude toward the disciplinary proceedings exists, we disagree. In Malone I, we did not make a determination with respect to any mitigating factors, as the hearing judge initially found none, and the purpose of the remand was to provide Malone with the chance to offer evidence as to mitigation. In bringing the instant exception, Malone appears to rely on our discussion in Malone I of Bar Counsel’s explanation for the failure to file a motion to compel discovery before seeking to exclude Malone’s testimony at the disciplinary hearing based on his assertion of the Fifth Amendment privilege at a deposition. In Malone I, 477 Md. at 272, 269 A.3d at 309, we stated that, “to the extent Bar Counsel contend[ed] that [] Malone was totally uncooperative in the discovery process and that this uncooperativeness justified foregoing a motion to compel, Bar Counsel proceed[ed] on a flawed premise.” We explained that although Malone had failed to answer any questions at his deposition, he had responded to seven of Bar Counsel’s nine requests for production of documents without invoking the privilege against self-incrimination and that the assertion of the Fifth Amendment privilege in blanket fashion at the deposition did not equal a failure to appear at the deposition, such that the discovering party could move for sanctions under Maryland Rule 2-432(a) without having obtained an order to compel. See id. at 271-72, 269 A.3d at 309-10. In Malone I, we did not determine that the mitigating factor of cooperative attitude - 21 - had been established or otherwise indicate that on remand the hearing judge was to find the factor. Rather, we explained that Malone had responded, in part, to Bar Counsel’s request for production of documents and appeared for the deposition and that, as a result, the imposition of immediate sanctions under Maryland Rule 2-432(a) was not permitted. See id. at 271-72, 269 A.3d at 309-10. Insofar as Malone’s argument that the mitigating factor of a cooperative attitude applies because of language in this Court’s opinion in Malone I is concerned, he has taken our discussion out of context. As to Malone’s contention that his participation in discovery and the evidentiary hearing shows that the mitigating factor of cooperation is applicable, again the conduct that Malone relies on is conduct that is expected of any respondent in a disciplinary matter and will not necessarily warrant a determination that the mitigating factor of a cooperative attitude applies—especially where the hearing judge has found just the opposite by finding the aggravating factor of bad faith obstruction of the disciplinary process (which we address below). Self-reporting to other jurisdictions Further, Malone excepts to the hearing judge’s failure to find as mitigation that he self-reported his conduct to other courts, which he testified he did so that his record would be “out in the open” and to show that he “express[ed] remorse” for his actions. Malone also contends that, in addition to self-reporting, he has suffered other consequences for his actions, including the cancellation of his Texas law license and the Texas Board’s refusal to approve his reapplication for admission, which “forc[ed]” him to take the bar exam again. Malone argues that the hearing judge was wrong to indicate that his self-reporting - 22 - and rehabilitation efforts “were undercut by his inability to understand why some of his actions were wrong, including allegedly testifying that he did not remember being admitted to the District Court[.]” Malone asserts that this is “factually incorrect[,]” as he “was not testifying about being admitted to the court, but rather, that he had forgotten the negative experience surrounding the private reprimand he received from that court.” We overrule the exception. To be sure, at the remand hearing, Malone testified that he self-reported his actions to courts in Maryland and Virginia and the federal court “in order for everything to be out in the open and so [he] wouldn’t have to run and hide and duck anymore.” Malone also responded in the affirmative to questions from his counsel about whether he self-reported because he wanted a fresh start, to rehabilitate himself, and to express remorse. But, the hearing judge was not required to credit Malone’s testimony that he self-reported his misconduct to express remorse for his actions. It is just as likely that Malone self-reported to other jurisdictions because he was aware that he had an obligation to do so and knew that his misconduct would be reported or uncovered in due course in any event, i.e., that his self-reporting was not related to or demonstrative of remorse. In Attorney Grievance Comm’n v. Keating, 471 Md. 614, 652, 243 A.3d 520, 543 (2020), we determined that the mitigating factor of full and free disclosure to the disciplinary board and a cooperative attitude toward the proceedings was present, explaining that the attorney self-reported her conduct in a letter to the Attorney Grievance Commission and fully cooperated with the Commission and a replacement personal representative during probate proceedings. We observed that Bar Counsel correctly noted - 23 - that the attorney “self-reported her conduct only after [an individual] initiated Petition to Caveat proceedings.” Id. at 652, 243 A.3d at 543. We concluded, though, that the attorney “voluntarily shared her transgressions with the Attorney Grievance Commission instead of maintaining the charade of the falsely attested will or hoping the Orphans’ Court would not find or report her violation.” Id. at 652, 243 A.3d at 543. We stated that the attorney had “cooperated fully throughout the process and worked with” the individual who replaced her as personal representative to ensure resolution of a client’s estate administration. Id. at 652, 243 A.3d at 543. Similar observations cannot be made in this case about Malone, who had a duty to report his misconduct to other jurisdictions and who, as found by the hearing judge, was not fully cooperative throughout the disciplinary process. In addition, the consequences that Malone brings to our attention, e.g., the cancellation of his law license in Texas and the refusal of the Texas Board to approve his reapplication for admission to the Bar, as establishing the mitigating factor of the imposition of other penalties or sanctions are nothing more than the natural consequences of his having made false statements on bar applications in Texas. See Attorney Grievance Comm’n v. Bonner, 477 Md. 576, 611, 271 A.3d 249, 270 (2022) (“We will not recognize the natural consequences of intentional misconduct as constituting a mitigating factor that would militate against the imposition of a more serious sanction.”). Delay of proceedings Malone excepts to the hearing judge having not addressed what he alleges is mitigation evidence concerning the lack of a delay in the proceedings. Malone states that - 24 - Bar Counsel filed the petition for disciplinary or remedial action on December 1, 2020, he responded to discovery requests, and the evidentiary hearing occurred on May 5, 2021— five months later. According to Malone, this is “direct evidence that Respondent did delay the underlying proceedings[.]”8 We overrule the exception. To the extent that, with this exception, Malone argues that he should receive some form of mitigation credit for not having delayed the proceedings himself, by being dilatory in discovery or perhaps with his invocation of the Fifth Amendment privilege, this is an illusory argument. It is not expected that an attorney would do anything other than participate in disciplinary proceedings and not delay the process. There is no ground for the finding of a mitigating factor simply because an attorney has not engaged in delay of a disciplinary proceeding. As to any allegation of delay by Bar Counsel, the record in this case demonstrates that, on November 20, 2020, Bar Counsel filed the petition for disciplinary or remedial action and on December 1, 2020, this Court issued an order designating a hearing judge. On January 28, 2021, Bar Counsel filed a “Proof of Service” document, stating that, on January 27, 2021, Bar Counsel served Malone with a writ of summons and copies of the December 1, 2020 order and the petition for disciplinary or remedial action. On February 3, 2021, Malone filed a response to the petition. On February 10, 2021, the hearing judge at the time issued a scheduling and pretrial order, setting the deadlines for discovery and 8 In making the exception, although Malone states that “[t]his is direct evidence that Respondent did delay the underlying proceedings[,]” it is unclear whether Malone means that Bar Counsel delayed the proceedings or whether he means that he did not delay the proceedings. - 25 - motions in limine, and establishing April 26, 2021 as the pretrial conference date and May 5, 2021 as the evidentiary hearing date. The parties then engaged in discovery and filed various motions, which we discussed at length in Malone I, 477 Md. at 238-44, 269 A.3d at 290-93. On April 7, 2021, the hearing judge at the time granted a motion to recuse that Malone filed, and we issued an order designating a new hearing judge. See id. at 241 n.4, 269 A.3d at 291 n.4. On May 5, 2021, the evidentiary hearing occurred. See id. at 244, 269 A.3d at 293. Based on this sequence of events, it is clear that there was no delay of the disciplinary proceeding by Bar Counsel. Lack of harm Finally, Malone excepts to the hearing judge’s failure to find as a mitigating factor that no member of the public was harmed by his conduct. Malone contends that it is “undisputed that no client or member of the public was harmed by [his] actions” and that he “demonstrated that he did not misappropriate any money or cause harm to any members of the public or any clients.” We overrule Malone’s exception. Although Malone is correct that his conduct did not involve misappropriation, as we concluded in Malone I, 477 Md. at 292, 269 A.3d at 322, Malone engaged in a “pattern of dishonest and deceitful conduct in his efforts to be admitted to the Bar in Texas[.]” In doing so, Malone violated multiple MLRPC and showed disregard for the Texas Board’s ability to assess his character and fitness to practice law. In other words, Malone sought to become licensed to practice law in Texas regardless of whether he was, in fact, qualified to do so. Such conduct raises the potential of harm to prospective clients. As we observed in Malone I, 477 Md. at 253, 269 A.3d at 299, the Texas Board “found a ‘clear and rational - 26 - connection’ between [] Malone fraudulently obtaining his Texas law license and ‘the likelihood he would injure a client, obstruct the administration of justice, or violate the Texas Disciplinary Rules of Professional Conduct.’” Further, our case law does not establish that the lack of harm to a client will automatically result in the determination of a mitigating factor. In this case, it would be inconsistent with the nature of the misconduct at issue to find the mitigating factor of lack of harm to a client where the misconduct by definition does not involve contact with clients but rather concerns falsifying credentials for admission to the Bar, and thereby involves the risk of harm to future clients. 2. Aggravating Factors Malone excepts to the hearing judge’s findings concerning the aggravating factors of a dishonest or selfish motive, a pattern of misconduct, bad faith obstruction of the disciplinary proceeding, and substantial experience in the practice of law. Stated otherwise, Malone admits that he has a prior disciplinary record, but excepts to the hearing judge’s findings with respect to all other aggravating factors. We overrule Malone’s exceptions. First, Malone excepts to the hearing judge’s finding of the aggravating factor of a selfish motive, arguing that he paid restitution to his Texas clients and went “beyond what was required of him in providing full refunds to his clients[,]” which demonstrates the lack of a selfish motive. We overrule the exception. As discussed above, it was within the hearing judge’s province to not credit Malone’s testimony as to refunds allegedly given to his clients in Texas. Next, Malone appears to be of the impression that the aggravating factor of having a selfish motive is present only where the taking or attempted taking of - 27 - money is concerned, which is incorrect. As the hearing judge found, Malone displayed a dishonest and selfish motive in seeking admission to the Texas Bar by engaging in a course of dishonesty and deceit. In other words, Malone demonstrated a dishonest and selfish motive in pursuing through deceit the benefit of being admitted to the Texas Bar, which, it goes without saying, is a position of stature and value. The aggravating factor of a dishonest and selfish motive applies because of Malone’s attempt through intentional dishonesty to gain admission to the Texas Bar, not because of a determination that he wrongfully kept client funds. Malone excepts to the hearing judge’s finding of a pattern of misconduct. According to Malone, engaging in a pattern of misconduct generally means that an attorney “has a prior history with the Attorney Grievance Commission[,]” and he has no such history. Malone contends that his actions in seeking admission to the Texas Bar “constitute an isolated incident over a career that has stretched more than 20 years” and do not constitute a pattern of misconduct. We overrule the exception. To establish the aggravating factor of a pattern of misconduct, Bar Counsel is not required to demonstrate that an attorney has a history of discipline.9 Further, Malone is incorrect in asserting that 9 In stating that a pattern of misconduct means that an attorney has a prior history with the Commission, Malone cites three cases: Attorney Grievance Comm’n v. Kirwan, 450 Md. 447, 149 A.3d 561 (2016); Attorney Grievance Comm’n v. Hill, 398 Md. 95, 919 A.2d 1194 (2007); and Attorney Grievance Comm’n v. Reinhardt, 391 Md. 209, 892 A.2d 533 (2006). Two of the cases do not involve the finding of a pattern of misconduct as an aggravating factor. In Kirwan, 450 Md. at 463-64, 149 A.3d at 570-71, the hearing judge found a pattern of misconduct where the attorney failed to respond to a letter from the Commission concerning the complaint at issue and noted that the attorney had previously received a letter of warning from the Commission concerning the failure to respond to the - 28 - his actions in seeking to be admitted to the Texas Bar represent an isolated incident and not a pattern of misconduct. The hearing judge found that Malone took part in “a pattern of misconduct in his years long pursuit for admission to the Texas Bar, engaging in a sustained course of dishonesty and deceit.” In Malone I, 477 Md. at 292, 269 A.3d at 322, in concluding that Malone violated MLRPC 8.4(d), we stated that Malone had engaged in a “pattern of dishonest and deceitful conduct in his efforts to be admitted to the” Texas Bar. The record supports the conclusion that Malone engaged in a pattern of making knowing and intentional misrepresentations over a period of time from at least 2013 to 2016 to the Texas Board in an effort to conceal his disciplinary history and gain admission to the Texas Bar. We overrule the exception. Next, Malone excepts to the hearing judge’s finding of the aggravating factor of bad faith obstruction of the disciplinary proceedings and contends that the hearing judge failed to explain how he engaged in bad faith obstruction. Malone argues that there was no obstruction and that, in Malone I, this Court concluded that he had cooperated during the proceedings and that it was a “flawed premise” to suggest he had been completely uncooperative or otherwise acted in bad faith to surprise Bar Counsel or to gain a tactical advantage. Malone asserts that, to the extent the hearing judge found the aggravating factor Commission about an unrelated complaint that had been dismissed. We agreed with the hearing judge’s finding, but in no way indicated that establishing the aggravating factor of a pattern of misconduct is dependent upon proof of similar conduct in prior matters. See id. at 463-64, 149 A.3d at 570-71. There are numerous cases in which this Court has found the aggravating factor of a pattern of misconduct in which the pattern did not involve “a prior history” with the Commission. See, e.g., Attorney Grievance Comm’n v. Armstrong, 471 Md. 537, 609, 243 A.3d 476, 518 (2020); Attorney Grievance Comm’n v. Sanderson, 465 Md. 1, 68-69, 213 A.3d 122, 161 (2019); Slate, 457 Md. at 648-49, 180 A.3d at 157. - 29 - of bad faith obstruction related to his invocation of the Fifth Amendment, in Malone I, this Court rejected that position and concluded that an attorney has a right under the Fifth Amendment to decline to answer questions. Malone maintains that the hearing judge erred in finding bad faith obstruction of the proceedings, as this Court determined that he “was within his rights to invoke the Fifth Amendment, did cooperate during discovery, and that [Bar Counsel] failed to follow the proper procedures once the Fifth Amendment issues had been raised.” We overrule Malone’s exception. In the original and supplemental findings, the hearing judge found that Malone engaged in bad faith obstruction of the disciplinary process by invoking his Fifth Amendment privilege in response to every question asked of him at deposition, including questions asking him to spell his name for the record, whether he had received documents from Bar Counsel, and whether he was able to see what Bar Counsel was sharing on the screen. The hearing judge pointed out that, at the hearing on Bar Counsel’s motion in limine, he found that Malone had invoked the Fifth Amendment privilege in bad faith. Contrary to Malone’s contention, in Malone I, this Court did not reject the argument that Malone had engaged in bad faith obstruction by invoking the Fifth Amendment. Rather, in Malone I, 477 Md. at 284, 269 A.3d at 317, “we conclude[d] that the hearing judge acted within his discretion to the extent he precluded [] Malone from testifying at the hearing concerning his alleged violations of the MLRPC.” We concluded that Malone asserted the Fifth Amendment in bad faith at his deposition as to three questions, explaining: Three of the questions Bar Counsel asked at Mr. Malone’s deposition - 30 - bore directly on the alleged MLRPC violations: • “[A]re you disputing that you received a reprimand from Virginia?” • “[A]re you disputing that you received a private reprimand from the United States District Court for the District of Maryland in 2012?” • “[A]re you disputing that you knowingly and intentionally made misrepresentations on your Texas Bar application for admission to the Texas Bar?” Given that, in his answer to the Petition, Mr. Malone already had substantively addressed each of these points, it is clear that Mr. Malone asserted the Fifth Amendment at his deposition in bad faith as to these questions. Id. at 284 n.20, 269 A.3d at 317 n.20 (alterations in original).10 In this case, Malone obstructed the disciplinary proceeding by not participating in the deposition in good faith and caused unnecessary proceedings before the hearing judge, i.e., litigation of the motion in limine. Malone invoked the Fifth Amendment privilege against self-incrimination to every question asked at deposition, including the three above to which we specifically found that the invocation of the Fifth Amendment privilege was in bad faith. See Malone I, 477 Md. at 240, 284 n.20, 269 A.3d at 291, 317 n.20. After Malone invoked the Fifth Amendment, although Bar Counsel did not file a motion to compel, Bar Counsel filed a motion in limine, Malone filed an opposition to the motion, and the hearing judge conducted a hearing on the motion in limine prior to the disciplinary 10 By contrast, in Malone I, 477 Md. at 287, 269 A.3d at 318, we stated that we could not “conclude that Mr. Malone improperly invoked the Fifth Amendment privilege in response to Bar Counsel’s one, very broad question concerning mitigation[.]” - 31 - hearing. See id. at 241-42, 269 A.3d at 291-92. After the hearing, the hearing judge issued an order precluding Malone from testifying at the disciplinary hearing, and this Court upheld the hearing judge’s decision precluding Malone from testifying as to the merits and remanded to allow Malone the opportunity to testify concerning mitigation. See id. at 244, 262-63, 269 A.3d at 293, 304. Regardless of whether Bar Counsel filed a motion to compel, Malone’s invocation of the Fifth Amendment privilege against self-incrimination resulted in additional proceedings before the hearing judge and curtailed the deposition. In addition, Malone’s blanket invocation of the Fifth Amendment privilege against self-incrimination was contrary to case law, which indicates that it is improper for a deponent to make a blanket assertion of the privilege. See Malone I, id. at 270, 269 A.3d at 308 (citing Moser v. Heffington, 465 Md. 381, 404, 214 A.3d 546, 559 (2019)). For all of these reasons, the aggravating factor of bad faith obstruction of the disciplinary proceeding is applicable. We offer two notes of caution, however, regarding application of the aggravating factor of bad faith obstruction of the disciplinary proceeding, where the factor relates to an attorney’s invocation of the Fifth Amendment privilege against self-incrimination. First, if Bar Counsel chooses not to move to compel an attorney to answer a question as to which the attorney has asserted the privilege against self-incrimination in a non-blanket manner, it should be the rare case in which a hearing judge concludes that the aggravating factor of bad faith obstruction of the disciplinary proceeding applies based on the attorney’s invocation of the privilege. That is, if Bar Counsel chooses not to challenge an attorney’s non-blanket invocation of the privilege through a motion to compel, a hearing judge should - 32 - be skeptical of a subsequent claim by Bar Counsel that the attorney asserted the privilege in bad faith and that the invocation of the privilege obstructed the disciplinary proceeding. As we explained in Malone I, id. at 284 n.20, 269 A.3d at 317 n.20, Malone invoked the privilege in bad faith in several instances during his deposition. And, although Bar Counsel did not move to compel Malone to answer any of the questions as to which he asserted the privilege, but instead immediately (and improperly) moved for sanctions, it nevertheless is clear that Malone’s bad-faith invocation of the privilege obstructed the proceeding. Malone asserted the privilege in response to every question Bar Counsel asked at his deposition, including basic questions such as: • “[C]an you just state and spell your name for the record, please.” • “[D]id you receive the documents that I sent you that I’ll be referring to today?” • “[A]re you able to see what I am sharing on the screen?” • “[Y]ou received Petitioner’s interrogatories and Petitioner’s request for production of documents that were served upon you; is that right?” Malone also told Bar Counsel at the deposition that he intended to assert the Fifth Amendment privilege in response to any and all questions. Plainly Malone’s blanket assertion of the privilege frustrated Bar Counsel’s legitimate effort to depose him. Our second caveat is that, hearing judges in issuing their findings in attorney grievance cases, and this Court in its independent review of the record, must tread carefully in determining whether an attorney’s invocation of the Fifth Amendment privilege during the disciplinary proceeding constitutes bad faith obstruction of the proceeding. We must take care not to chill the good faith invocation of the privilege against self-incrimination, - 33 - recognizing that the line between a valid and an invalid assertion of the privilege is often difficult to discern. Finally, Malone excepts to the hearing judge’s finding of the aggravating factor of substantial experience in the practice of law based on his admission to the Maryland Bar in 1999. Malone contends that he left Maryland in 2007 and there was no evidence that he “was substantially experienced in the practice of law in Maryland[.]” We overrule the exception. Malone was admitted to the Bar of Maryland in 1999, approximately fourteen years before he began seeking admission to the Texas Bar in June 2013. As of 2013, Malone had been admitted to the Bar of Virginia in 1999 and had been admitted to practice in numerous United States District Courts, such as: the Eastern District of Virginia in 2001, the Western District of Virginia in 2005, the District of Maryland in 2003, the District of Columbia in 2003, the Central District of Illinois in 2004, and the Northern District of Illinois in 2013. In addition, Malone had practiced law sufficiently to have been the subject of attorney discipline in at least two of the jurisdictions in which he had been admitted during the fourteen years—the Commonwealth of Virginia in 2011 for conduct involving the complaints of two clients and the United States District Court for the District of Maryland in 2012 for conduct related to his failure to appear for a hearing in a bankruptcy case. Further, in June 2016, at the time that the Supreme Court of Texas cancelled his license to practice law in the State, Malone had clients, after having been admitted to the Bar since only April 2015. In Attorney Grievance Comm’n v. Neverdon, 473 Md. 631, 708, 251 A.3d 1157, - 34 - 1203 (2021), we overruled an attorney’s exception to the hearing judge’s finding of the aggravating factor of substantial experience in the practice of law, disagreeing with the attorney’s contention that the factor did not apply because, although the attorney had substantial experience with personal injury cases, he had limited experience with estate law cases. We concluded that, notwithstanding the attorney’s contention, the attorney had been admitted to the Bar of Maryland in 1999 and, at the time that he began representing the clients at issue, “he had approximately eighteen years of experience overall as an attorney.” Id. at 708-09, 251 A.3d at 1203. Just as we were not persuaded that application of the aggravating factor substantial experience in the practice of law requires that a respondent have experience in the particular area of law at issue, we are not persuaded by Malone’s contention that application of the aggravating factor of substantial experience in the practice of law requires sustained experience in the practice of law in Maryland, not other jurisdictions. (B) Sanction Bar Counsel recommends that we disbar Malone, who recommends that we impose a three-month suspension from the practice of law in Maryland. In Slate, 457 Md. at 646-47, 180 A.3d at 155-56, we stated: This Court sanctions a lawyer not to punish the lawyer, but instead to protect the public and the public’s confidence in the legal profession. This Court accomplishes these goals by: (1) deterring other lawyers from engaging in similar misconduct; and (2) suspending or disbarring a lawyer who is unfit to continue to practice law. In determining an appropriate sanction for a lawyer’s misconduct, this Court considers: (1) the MLRPC that the lawyer violated; (2) the lawyer’s mental state; (3) the injury that the lawyer’s misconduct caused or could have - 35 - caused; and (4) aggravating factors and/or mitigating factors. Aggravating factors include: (1) prior attorney discipline; (2) a dishonest or selfish motive; (3) a pattern of misconduct; (4) multiple violations of the MLRPC; (5) bad faith obstruction of the attorney discipline proceeding by intentionally failing to comply with rules or orders of the disciplinary agency; (6) submission of false evidence, false statements, or other deceptive practices during the attorney discipline proceeding; (7) a refusal to acknowledge the misconduct’s wrongful nature; (8) the victim’s vulnerability; (9) substantial experience in the practice of law; (10) indifference to making restitution or rectifying the misconduct’s consequences; (11) illegal conduct, including that involving the use of controlled substances; and (12) likelihood of repetition of the misconduct. Mitigating factors include: (1) the absence of prior attorney discipline; (2) the absence of a dishonest or selfish motive; (3) personal or emotional problems; (4) timely good faith efforts to make restitution or to rectify the misconduct’s consequences; (5) full and free disclosure to Bar Counsel or a cooperative attitude toward the attorney discipline proceeding; (6) inexperience in the practice of law; (7) character or reputation; (8) a physical disability; (9) a mental disability or chemical dependency, including alcoholism or drug abuse, where: (a) there is medical evidence that the lawyer is affected by a chemical dependency or mental disability; (b) the chemical dependency or mental disability caused the misconduct; (c) the lawyer’s recovery from the chemical dependency or mental disability is demonstrated by a meaningful and sustained period of successful rehabilitation; and (d) the recovery arrested the misconduct, and the misconduct’s recurrence is unlikely; (10) delay in the attorney discipline proceeding; (11) the imposition of other penalties or sanctions; (12) remorse; (13) remoteness of prior violations of the MLRPC; and (14) unlikelihood of repetition of the misconduct. (Citation omitted). In Slate, id. at 648-49, 180 A.3d at 157, a case involving intentional dishonesty during the bar admission process, we disbarred an attorney who violated MLRPC 8.1(a), 8.1(b), 8.4(c), and 8.4(d). The attorney knowingly concealed material information about himself on his bar application, including answering “No” to the catchall question on the application, falsely stating under oath that the facts in his bar application remained true, - 36 - falsely stating to Bar Counsel that he had provided all required information during the bar application process, failing to supplement his bar application with the required information, and concealing the information throughout the bar application process, including during the character interview. Id. at 648-49, 180 A.3d at 157. The attorney’s misconduct was aggravated by “a dishonest or selfish motive, as he concealed material information to get admitted to the Bar of Maryland[,]” a pattern of dishonesty, multiple violations of the MLRPC, a refusal to acknowledge the wrongful nature of his misconduct, and a likelihood of repetition of the misconduct. Id. at 648-49, 180 A.3d at 157. We discerned only two mitigating factors—the absence of prior attorney discipline and inexperience in the practice of law. See id. at 649, 180 A.3d at 157. In determining that disbarment was the appropriate sanction, we observed that, in Attorney Grievance Comm’n v. Van Dusen, 443 Md. 413, 416, 116 A.3d 1013, 1015 (2015), we had “unequivocally stated” that, at a minimum, a lawyer must be trustworthy, that “[o]ne who wants to be a lawyer in Maryland must disclose to the [State Board of Law Examiners] and this Court information that bears on that trait[,]” and that “[f]ailure to satisfy those requirements may prevent admission to the bar or, when discovered, result in disbarment.” Slate, 457 Md. at 647, 180 A.3d at 156. We stated: This Court further explained that disbarment is the appropriate sanction where a lawyer conceals material information during the bar admission process, stating: This Court has also found disbarment appropriate when it is learned that a lawyer concealed material information during the bar admission process. The Court has reasoned that disbarment is warranted because the deliberate failure to disclose material information plainly reflects on the - 37 - truthfulness and candor of the applicant and no character qualification to practice law is more important than truthfulness and candor. Attorney Grievance Comm’n v. Keehan, 311 Md. 161, 169, 533 A.2d 278[, 282] (1987) (disbarring lawyer who withheld material information relating to his prior employment experience); [Attorney Grievance Comm’n v.] Hunt, 435 Md. [133,] 143-44, 76 A.3d 1214[, 1220 (2013)] (disbarring attorney who failed to disclose past criminal conduct); Attorney Grievance Comm’n v. Gilbert, 307 Md. 481, 496-497, 515 A.2d 454[, 462] (1986) (disbarring an attorney who failed to disclose involvement in a civil suit). Slate, 457 Md. at 647-48, 180 A.3d at 156 (quoting Van Dusen, 443 Md. at 432, 116 A.3d at 1024-25) (brackets omitted). In Slate, 457 Md. at 649, 180 A.3d at 157, applying the principles discussed, in light of the attorney’s misconduct and the aggravating and mitigating factors, “[w]e fully agree[d] with Bar Counsel that” disbarment was the appropriate sanction, given that the attorney “knowingly engaged in dishonesty in multiple instances.” We stated that there was “little doubt that, had [the attorney]’s dishonesty come to light during the bar application process, we would have determined that he lacked the character and fitness necessary for admission to the Bar of Maryland.” Id. at 649, 180 A.3d at 157 (footnote omitted). We explained that, “[a]bsent compelling extenuating circumstances, disbarment is ordinarily the sanction for intentional dishonest conduct.” Id. at 650, 180 A.3d at 158 (cleaned up). The attorney did not contend that compelling extenuating circumstances existed and, upon our independent review, we concluded that the hearing judge’s opinion was “devoid of any facts that could possibly constitute compelling extenuating circumstances.” Id. at 650, 180 A.3d at 158. Prior to Slate, in Attorney Grievance Comm’n v. Brown, 415 Md. 269, 279, 282, - 38 - 999 A.2d 1040, 1046, 1048 (2010), a case that did not involve dishonesty during the bar admission process, this Court suspended from the practice of law in Maryland for ninety days an attorney who violated Maryland Rules of Professional Conduct11 4.1(a)(1) (Truthfulness in Statements to Others), 8.1(a), 8.4(c), 8.4(d), and a Maryland Rule governing the maintenance of trust accounts. The attorney misrepresented to a third party on one occasion and to Bar Counsel twice that he had prepared a release and sent it to a client, when he knew that to be untrue. See Brown, 415 Md. at 278, 281, 999 A.2d at 1046- 47. The attorney also improperly withdrew funds from his attorney trust account by drawing on his trust account a check payable to cash, which he then gave to the client. See id. at 278, 999 A.2d at 1045. We found five mitigating factors: (1) the attorney had an “otherwise impeccable” twenty-eight-year record as a member of the Maryland Bar; (2) the third party was not the attorney’s client and the attorney had no duty to draft a release on her behalf; (3) the attorney did not misuse the funds that he improperly withdrew for personal financial gain; (4) the attorney conceded wrongdoing and “appear[ed] willing to take responsibility for his actions”; and (5) the attorney assisted his counsel in procuring the release and provided the service to the third party free of charge. Id. at 281-82, 999 A.2d at 1047-48. We concluded that the attorney’s misconduct did “not rise to the level of disbarment or indefinite suspension, recognizing that cases where those sanctions were imposed generally involved more egregious misconduct.” Id. at 280, 999 A.2d at 1047 11 Before being renamed the MLRPC effective July 1, 2005, the Rules were named the Maryland Rules of Professional Conduct, or MRPC. See Attorney Grievance Comm’n v. Page, 430 Md. 602, 606 n.1, 62 A.3d 163, 165 n.1 (2013). The series of events at issue in Brown began before this change. See Brown, 415 Md. at 274, 999 A.2d at 1043. - 39 - (citations omitted). We agreed with Bar Counsel, though, that a sanction less than suspension would have been inappropriate, and determined that, under the totality of the circumstances, a ninety-day suspension was warranted. See id. at 280, 282, 999 A.2d at 1047-48. In Attorney Grievance Comm’n v. Thompson, 462 Md. 112, 137, 139, 198 A.3d 234, 249-50 (2018), another case not involving false statements on a bar application, we suspended for sixty days an attorney who violated Maryland Attorneys’ Rules of Professional Conduct 1.1 (Competence), 1.3 (Diligence), 1.4 (Communication), 1.5(a) (Fees), 1.15(a), (b), (c), and (d) (Safekeeping Property), 1.16(d) (Declining or Terminating Representation), 5.5(b) (Unauthorized Practice of Law), 8.1(a) and (b), and 8.4(a), (c), and (d).12 We concluded that the attorney, who was licensed only in the District of Columbia and the United States District Court for the District of Columbia, “maintained a continuous presence in” Maryland for the practice of law and held out that she was admitted to practice law in Maryland, despite not being licensed to practice law in Maryland, misrepresented her practice area of law to Bar Counsel’s investigator, and mismanaged client funds. Thompson, 462 Md. at 118-19, 135-36, 198 A.3d at 238, 248. The attorney’s misrepresentation concerning her practice consisted of telling Bar Counsel’s investigator that she exclusively handled bankruptcy cases, not immigration cases. See id. at 119-20, 198 A.3d at 238. We determined the existence of only one aggravating factor—multiple 12 The attorney’s reinstatement was conditioned on the attorney completing a course with an emphasis on responsible maintenance of an attorney trust account. See Thompson, 462 Md. at 139, 198 A.3d at 250. - 40 - violations of the Rules—and concluded that the attorney had established the mitigating factors of the absence of prior attorney discipline, the absence of a dishonest or selfish motive, and inexperience in the practice of law. See id. at 138, 198 A.3d at 249. In Thompson, there was a concurring opinion, discussing that a sixty-day suspension was appropriate because the attorney “had not engaged in the type of intentionally dishonest conduct that warrants disbarment.” Id. at 140, 198 A.3d at 250-51 (Watts, J., concurring in the judgment only). The concurring opinion explained that the record was unclear as to why the attorney told the investigator that she exclusively handled bankruptcy cases and not immigration cases, but, nevertheless, it was “clear that this [was] not the type of misrepresentation that would warrant disbarment.” Id. at 143, 198 A.3d at 252 (Watts, J., concurring in the judgment only). The concurring opinion pointed out that the attorney “essentially told Bar Counsel’s investigator that she handled bankruptcy cases that would not constitute the unauthorized practice of law in Maryland, and, she in fact handled immigration cases that would not constitute the unauthorized practice of law.” Id. at 143, 198 A.3d at 252 (Watts, J., concurring in the judgment only). Like the Majority, the concurring opinion concluded that this was “simply not the type of intentional dishonesty that would require compelling extenuating circumstances to excuse or that would warrant disbarment.” Id. at 143, 198 A.3d at 252 (Watts, J., concurring in the judgment only) (cleaned up). Recently, in Attorney Grievance Comm’n v. Collins, 477 Md. 482, 510, 530, 270 A.3d 917, 934, 946 (2022), we indefinitely suspended from the practice of law in Maryland an attorney who violated Maryland Attorneys’ Rules of Professional Conduct 3.3(a)(1) - 41 - (Candor Toward the Tribunal), 8.1(a), 8.1(b), 8.4(b), 8.4(c), and 8.4(d). We concluded that the attorney falsely advised this Court and Bar Counsel that she did not receive a complaint and the attorney falsely stated that she had complied with Maryland Rule 19-742 (now Maryland Rule 19-741) in petitioning for reinstatement. See id. at 530, 532, 270 A.3d at 946-47. The attorney’s misconduct was aggravated by prior attorney discipline, a dishonest or selfish motive, a pattern of misconduct, bad faith obstruction of the disciplinary process, substantial experience in the practice of law, and illegal conduct. See id. at 512, 270 A.3d at 935. There were no mitigating factors. See id. at 513, 270 A.3d at 935. In determining the appropriate sanction, we began by examining the standard set forth in Attorney Grievance Comm’n v. Vanderlinde, 364 Md. 376, 413-14, 773 A.2d 463, 485 (2001), in which we held: In cases of intentional dishonesty, misappropriation cases, fraud, stealing, serious criminal conduct and the like, we will not accept, as “compelling extenuating circumstances,” anything less than the most serious and utterly debilitating mental or physical health conditions, arising from any source that is the “root cause” of the misconduct and that also result in an attorney’s utter inability to conform his or her conduct in accordance with the law and with the MARPC. Only if the circumstances are that compelling, will we even consider imposing less than the most severe sanction of disbarment in cases of stealing, dishonesty, fraudulent conduct, the intentional misappropriation of funds or other serious criminal conduct, whether occurring in the practice of law, or otherwise. Collins, 477 Md. at 514, 270 A.3d at 936 (brackets omitted). In Vanderlinde, 364 Md. at 418, 773 A.2d at 488, “[w]e stated that ‘disbarment ordinarily should be the sanction for intentional dishonest conduct.’” Collins, 477 Md. at 515, 270 A.3d at 937 (brackets omitted). In Collins, id. at 516, 270 A.3d at 937, we observed that, over the past two - 42 - decades, “the standard announced in Vanderlinde ha[d] been relied upon in numerous cases resulting in a sanction of disbarment.” (Footnote omitted). We noted, however, that “[d]espite the standards announced in Vanderlinde and recently repeated in Miller, [467 Md. 176, 223 A.3d 976,] there ha[d] been an increasing number of cases involving intentional dishonesty in which we ha[d] not imposed the sanction of disbarment.” Collins, 477 Md. at 518, 270 A.3d at 938. In Collins, id. at 518- 30, 270 A.3d at 938-46, after a review of prior relevant case law from the past several decades (which we need not repeat here), we distilled several key points. First, “[g]iven th[e] long line of cases in which we ha[d] not imposed the sanction, it [was] time to expressly recognize that our holding in Vanderlinde no longer exclusively sets the standard for imposition of the sanction in cases involving intentional dishonesty.” Collins, 477 Md. at 529, 270 A.3d at 945. As the case law demonstrated, “we ha[d] not in cases involving intentional dishonest conduct consistently applied our holding in Vanderlinde and required compelling extenuating circumstances to justify a sanction less than disbarment.” Collins, 477 Md. at 530, 270 A.3d at 945. Based on our review, we stated: What can be gleaned from the sanctions imposed in cases involving intentional dishonesty post-Vanderlinde in recent years, is that, increasingly, we have not imposed the sanction of disbarment where the dishonest conduct at issue does not involve theft, fraud, harm to a client or third party, or the intentional misappropriation of funds. We have on multiple occasions imposed a sanction less than disbarment in cases involving intentional dishonest conduct where there was no theft or intentional misappropriation of funds by the attorney, the attorney had not benefitted or profited from the misconduct, and no client had been harmed. Going forward, it is clear that cases involving dishonesty and knowingly made false statements will be assessed on an individual basis to determine whether the misconduct at issue gives rise to deployment of the standard set forth in Vanderlinde, namely, whether compelling extenuating circumstances that are the “root cause” of - 43 - the misconduct are required to warrant a sanction less than disbarment. Collins, 477 Md. at 530, 270 A.3d at 945-46. In Collins, id. at 530, 270 A.3d at 946, applying the principles discussed above, we concluded that an indefinite suspension was the appropriate sanction. We explained: [A]lthough [the attorney] was found to have engaged in intentional dishonest conduct by making obvious and inexplicably false statements in a petition for reinstatement and by failing to acknowledge correspondence from Bar Counsel concerning a complaint that was ultimately dismissed, given the nature of the violations of the MARPC, the lack of harm to any client, and the circumstance that the case does not involve theft, misappropriation of client funds, or other pecuniary benefit to [the attorney], the appropriate sanction for [the attorney]’s misconduct is an indefinite suspension. Considering the nature and circumstances of the false statements, as well as recent case law in which we have not consistently imposed the sanction of disbarment for misconduct involving intentional dishonesty, and that we now expressly recognize that the Vanderlinde standard is not implicated in all instances of intentional dishonesty, [the attorney]’s misconduct does not warrant disbarment. [The attorney]’s misconduct did not involve circumstances for which we have generally applied the Vanderlinde standard, for instance, theft, fraud, intentional misappropriation, or harm to a client. Indeed, [the attorney]’s misconduct has resulted in harm only to herself. Collins, 477 Md. at 533-34, 270 A.3d at 947-48. After Collins, in Bonner, 477 Md. at 595-96, 627, 271 A.3d at 261, 280, we disbarred an attorney who violated District of Columbia Rules of Professional Conduct 8.4(b) and 8.4(c) by engaging “in a pattern of misconduct in which he intentionally misappropriated more than $14,000 from” his law firm in thirty-five separate transactions and took actions “in an effort to conceal the personal nature of expenses that he submitted to the Firm for reimbursement, including: falsely reporting ‘client development’ time through entries on expenses receipts and statements and by falsely creating calendar entries - 44 - and time entries identifying time spent with clients.” (Some internal quotation marks omitted). The attorney’s misconduct was aggravated by a dishonest or selfish motive, a pattern of misconduct, illegal conduct, and substantial experience in the practice of law. See id. at 608, 271 A.3d at 268-69. We concluded that the mitigating factors of no prior attorney discipline, good faith efforts to make restitution and to rectify the consequences of his actions, remorse, a cooperative attitude toward the attorney discipline proceedings, character or reputation, and unlikelihood of repetition of the misconduct applied. See id. at 610-15, 271 A.3d at 269-73. In Bonner, id. at 621, 271 A.3d at 276, we discussed Vanderlinde and Collins and stated that we “start with the notion that, in cases involving intentional dishonesty, disbarment is ordinarily warranted[,]” but we “do not apply this generalization as a bright- line rule”; rather, we “look at the individual facts and circumstances of the particular case.” (Citations omitted). In Bonner, 477 Md. at 622, 271 A.3d at 277, we determined that the attorney’s “intentional dishonest conduct involving misappropriation d[id] not align itself with the intentional dishonest conduct in cases in which we have imposed a sanction less than disbarment.” Rather, the attorney’s “intentional dishonest conduct involving misappropriation of funds [was] of the variety in which we have imposed a sanction of disbarment.” Id. at 624, 271 A.3d at 278 (cleaned up). We determined that the attorney’s misconduct gave “rise to deployment of the standard set forth in Vanderlinde, namely whether compelling extenuating circumstances that are the ‘root cause’ of the misconduct are required to warrant a sanction less than disbarment.” Bonner, 477 Md. at 625, 271 A.3d at 279 (cleaned up). We determined that the attorney’s emotional problems failed to - 45 - satisfy that standard or constitute “a mitigating factor that demonstrates compelling extenuating circumstances thereby warranting a sanction less than disbarment.” Id. at 626, 271 A.3d at 279. We concluded that the mitigating factors did “not tip the scales in favor of a sanction less than disbarment[,]” and stated: “Considering the nature of [the attorney]’s misconduct and the various mitigating and aggravating factors present [], we conclude that disbarment is the appropriate sanction.” Id. at 627, 271 A.3d at 280 (citations omitted). In this case, upon consideration of the nature of Malone’s intentional dishonest misconduct and the mitigating and aggravating factors established, we conclude that the appropriate sanction for Malone’s misconduct is disbarment. Malone violated MLRPC 8.1(a), 8.1(b), 8.4(a), 8.4(b), 8.4(c), and 8.4(d) by knowingly and intentionally misrepresenting his disciplinary history on his Texas Bar application; intentionally failing to disclose his admission to different bars to conceal his disciplinary history from the Texas Board; and falsely stating that his disclosure failures were the result of not reading bar application questions carefully enough. In addition, Malone knowingly and intentionally failed to supplement his Texas Bar application and re-applications with information about his bar admissions and disciplinary history, and thereby failed to correct the misapprehension that he had fully disclosed his disciplinary history in all jurisdictions in which he was licensed. By knowingly and intentionally providing false responses on sworn Texas Bar applications, when he declared under oath that the information he provided was true and correct, Malone committed perjury. In sum, Malone knowingly and intentionally made numerous false statements and engaged in intentional dishonesty over a period of years, committing perjury and establishing a pattern of dishonest and deceitful conduct in - 46 - applying, and eventually being admitted, to the Texas Bar. We determine the same five aggravating factors as the hearing judge: (1) prior attorney discipline; (2) a dishonest or selfish motive; (3) a pattern of misconduct; (4) bad faith obstruction of the attorney discipline proceeding; and (5) substantial experience in the practice of law. And we identify the same two mitigating factors as the hearing judge: (1) volunteer work in the community; and (2) remorse.13 Overall, we conclude that Malone’s misconduct is not of the type that coincides with the intentional dishonesty in cases in which a sanction less than disbarment has been warranted. In Slate, 457 Md. at 647, 180 A.3d at 156, we stated that disbarment is appropriate where an attorney conceals material information during the bar admission process. In Slate, id. at 650, 180 A.3d at 158, we applied the Vanderlinde standard, stating that, “absent compelling extenuating circumstances, disbarment is ordinarily the sanction for intentional dishonest conduct[,]” and we concluded that no such compelling extenuating circumstances existed to warrant a sanction less than disbarment. (Cleaned up). As Collins, 477 Md. at 530, 270 A.3d at 946, now instructs, in cases involving intentional dishonesty such as this case, we begin with the view that disbarment is appropriate but assess the case “on an individual basis to determine whether the misconduct at issue gives rise to deployment of the standard set forth in Vanderlinde, namely, whether compelling 13 The hearing judge found that Malone had “demonstrated remorse to the degree to which he understands his ethical shortcomings[,]” and that Malone “has a fundamental misunderstanding of legal ethics in general, and in particular, why it is fundamentally important that attorneys be genuine and honest.” Bar Counsel does not except to the hearing judge’s finding of the mitigating factor of remorse. As such, we decline to disturb the hearing judge’s finding that Malone has demonstrated remorse to the degree specified. - 47 - extenuating circumstances that are the ‘root cause’ of the misconduct are required to warrant a sanction less than disbarment.” In other words, in assessing the appropriate sanction in this case, we recognize that, consistent with our holding in Collins, application of the Vanderlinde standard may no longer be fitting in each and every case of intentional dishonest conduct. We hasten to point out, though, that Collins does not stand for the proposition that disbarment is warranted, absent compelling extenuating circumstances, only where there is harm to a client, theft, fraud, or misappropriation of client funds. It is clear from Collins that rather than applying a bright-line test, we assess the facts and circumstances of each case individually to determine whether the Vanderlinde standard applies. In some instances, the potential applicability of the Vanderlinde standard will be quite clear, i.e., cases involving theft, intentional misappropriation, harm to a client, and fraud, and, in other cases, perhaps less so. In Collins, 477 Md. at 530-32, 270 A.3d at 946-47, the intentional dishonest conduct at issue involved Collins being found to have falsely denied receipt of a complaint, when allegations concerning the merits of the complaint were ultimately dismissed by Bar Counsel, and to have falsely stated in a petition for reinstatement that she had complied with the requirements of the Rule governing reinstatement to the Maryland Bar, when she had not submitted to Bar Counsel an affidavit as required by the Rule. At the disciplinary hearing, Collins, who had been permitted to offer evidence only as to mitigation, testified: In mitigation, I have never, until June the 8th, ever been disciplined. And when I was disciplined, I took every effort not to violate the Court again. I thought I was doing right. I did not -- I am remorseful, but I did not fully - 48 - read and understand the law that required me to file an affidavit. But I thought that at the time, that giving the cases and allowing the clients to agree to some other attorneys to handle the cases was sufficient. That I had adequately prepared, prepared and made sure that the two clients that I have privately at the time were taken care of and were not left hanging. In mitigation, it was not my intent to lie to the Court. In fact, I knew I had not filed the affidavit. And in reviewing in mitigation, you’ll see that I did not say that I had filed an affidavit. Because I knew I had not filed the affidavit as required. Id. at 498-99, 270 A.3d at 927 (paragraph break omitted). In addressing the issue of whether the hearing judge erred in finding that Collins made knowing and intentional misrepresentations in the petition for reinstatement, we indicated that this was a close question. See id. at 498, 270 A.3d at 926-27. In discussing that Collins had affirmed under penalties of perjury that the statements in her petition for reinstatement were true, we stated: [T]he false oath[] may have been provided as a result of confusion or mistake and not willfully done. However, as Collins was precluded from testifying at the disciplinary hearing except as to mitigation, based on the exhibits admitted into evidence, the hearing judge’s findings that Collins’s “statements were false when made and she knew they were false when made[,]” are not clearly erroneous. As such, clear and convincing evidence supports the hearing judge’s conclusion that Collins violated MARPC 8.4(b) by committing a criminal act that reflects adversely on her honesty and trustworthiness. Id. at 509, 270 A.3d at 933. Although in Collins, id. at 499, 510, 270 A.3d at 927, 934, we upheld violations of Rules 3.3(a)(1), 8.1(a), 8.4(b), 8.4(c), and 8.4(d), we cautioned that, [i]n determining whether to seek the Commission’s authorization for the filing of a petition for disciplinary or remedial action alleging that an attorney has knowingly made a false statement in connection with a petition for reinstatement, Bar Counsel must be watchful for cases in which attorneys are doing nothing more than filing a petition for reinstatement and stating their - 49 - views with respect to having satisfied all of the necessary prerequisites as opposed to attorneys who are knowingly making false statements in a petition for reinstatement. Assessing the circumstances of this case, however, leads to the conclusion that the Vanderlinde standard is triggered, and that disbarment is the appropriate sanction. To be sure, as with the misconduct in Collins, 477 Md. at 534, 270 A.3d at 948, Malone’s misconduct did not involve some of the circumstances for which we have generally applied the Vanderlinde standard, for instance, theft, intentional misappropriation, or harm to a client. Malone’s misconduct, though, was far more egregious than the misconduct in Collins. Although Malone’s misconduct did not involve harm to a client, theft, or misappropriation of client funds, the misconduct at issue is of the type that gives rise to deployment of the Vanderlinde standard, and, absent a showing of compelling extenuating circumstances, disbarment is warranted. Malone’s misconduct involved numerous false statements concealing his prior disciplinary history and bar admissions in applications for bar admission over a period of years and, in our view, constituted fraud. Black’s Law Dictionary defines “fraud[,]” in pertinent part, as “[a] knowing misrepresentation or knowing concealment of a material fact made to induce another to act to his or her detriment” or “[a] reckless misrepresentation made without justified belief in its truth to induce another person to act.” Fraud, Black’s Law Dictionary (11th ed. 2019). Malone engaged in intentional deception in a bar admission process to influence the Texas Board to make a decision favorable to him for his own personal gain. We have previously disbarred attorneys who have committed fraudulent acts not - 50 - involving the receipt or taking of money. For instance, in Attorney Grievance Comm’n v. Garcia, 410 Md. 507, 509, 514, 518-19, 529, 979 A.2d 146, 147, 150, 152-53, 159 (2009), this Court disbarred an attorney who violated Maryland Rules of Professional Conduct 8.4(a), (b), (c), and (d) where the attorney signed his name on a letter purporting to verify employment for a visa application by representing himself to be the employer of the visa applicant, and his act of signing the letter was intended to commit a fraud, deceive, or misrepresent to the federal government that he was the applicant’s employer. The attorney pled guilty to conspiracy to commit immigration fraud in violation of federal statutes for “making a false statement related to his signing the false employer letter, knowing that it was false.” Id. at 518, 979 A.2d at 153. We applied the Vanderlinde standard, concluding that because the attorney’s action of signing the letter was meant to commit a fraud, deceive, or misrepresent, disbarment was warranted absent compelling extenuating circumstances. See Garcia, 410 Md. at 522, 979 A.2d at 155. Because there were no compelling extenuating circumstances, we ordered disbarment. See id. at 529, 979 A.2d at 159. The intentional dishonest conduct in Collins and in other cases, which did not trigger the Vanderlinde standard, and the misconduct in this case and others, which triggered the standard, are of an entirely different nature. Collins involved a respondent who had not submitted to Bar Counsel an affidavit as required by the applicable Rule—a circumstance that would have been obvious to Bar Counsel immediately upon receipt of Collins’s petition for reinstatement. See Collins, 477 Md. at 493, 270 A.3d at 923-24. Despite Collins’s statement in the petition that there had been no new complaints filed against her, - 51 - Bar Counsel had, in actuality, sent correspondence to Collins notifying her of the existence of a new complaint—another circumstance that would also have been immediately apparent to Bar Counsel upon receipt of Collins’s petition. See id. at 493, 270 A.3d at 924.14 As we stated in Collins, 477 Md. at 531, 270 A.3d at 946, Collins’s intentional dishonesty was as inexplicable as it was dishonest. Neither Bar Counsel nor the Court was deceived by Collins’s behavior. In the end, Collins injured only her own effort to gain reinstatement. On the other hand, Malone, through intentionally dishonest conduct, fraudulently obtained admission to the Texas Bar. Malone’s misconduct involved not only fraud but also a blatant disregard for the truth and the legal system in general, and the potential for harm to clients. Tellingly, as discussed in Malone I, 477 Md. at 254, 269 A.3d at 299, in 2016, when the Supreme Court of Texas canceled Malone’s Texas law license, the Court’s order required Malone to immediately notify his Texas clients and all tribunals in the State in which he had a pending matter of the order and submit an affidavit stating he had done so. Malone had already begun representing clients in Texas. Rather than comply with the order of the Supreme Court of Texas, Malone submitted an affidavit asserting that ‘“[the Supreme] Court has no authority to compel me to do a thing... Requiring me to submit memos to judges and then file an affidavit with this Court constitutes involuntary servitude.”’ Id. at 254, 269 A.3d at 299 (alteration and ellipsis in original). 14 In addition, after filing a petition for disciplinary or remedial action based, in part, on allegations from the new complaint, Bar Counsel elected not to pursue any allegations related to the merits of the complaint. See Collins, 477 Md. at 489, 270 A.3d at 921. - 52 - The Supreme Court of Texas withdrew and cancelled Malone’s Texas law license, and after Malone reapplied for admission to the Texas Bar, the Texas Board concluded that Malone did not have the good moral character required for admission to practice law in Texas and denied the reapplication. See id. at 254-55, 269 A.3d at 299-300. In August 2017, Malone filed a petition for review of the Texas Board’s decision, alleging “that the Board denied him admission ‘because it wanted to punish him for “pulling one over” on them and failing to be humble in re-applying for a license.’”15 Malone I, 477 Md. at 255, 269 A.3d at 300. In claiming that he had pulled one over on the Texas Board and that the Board was out to get him, Malone continued to demonstrate that he failed to appreciate the wrongfulness of his conduct and that he lacked the basic characteristic of honesty necessary to be a lawyer. Malone engaged in intentional dishonest conduct over a period of years for the self- serving purpose of fraudulently gaining admission to the Texas Bar by precluding bar admission officials from making an accurate determination of his fitness to practice law. Malone’s conduct was both intentionally dishonest and sustained, and demonstrated a fundamental lack of regard for the bar admission process. All of this shows that Malone engaged in intentional dishonesty under circumstances that demonstrate he lacks the basic character traits expected of a lawyer—honesty and respect for the legal system. Even if we had sustained Malone’s exceptions to the hearing judge’s findings Later, Malone filed a “Notice of Nonsuit” and requested that the court dismiss his 15 claims against the Texas Board, and the claims were dismissed. Malone I, 477 Md. at 255- 56, 269 A.3d at 300. - 53 - concerning mitigating and aggravating factors and determined that additional mitigating factors were present and that the only aggravating factor was prior attorney discipline, we would still conclude that the Vanderlinde standard applies and that disbarment (rather than a lesser sanction) is warranted based on the nature of the intentional dishonest misconduct in this case. Unlike in Brown, 415 Md. at 282, 999 A.2d at 1048, and Thompson, 462 Md. at 139, 198 A.3d at 250, cases relied upon by Malone, in which we imposed a ninety-day suspension and a sixty-day suspension, respectively, in this case, Malone engaged in the type of intentional dishonest conduct for which the Vanderlinde standard is intended. The misconduct established in Brown and Thompson, and, in Collins as well, pales in comparison to that of Malone. In this case, as in Slate, the Vanderlinde standard applies and the record is “devoid of any facts that could possibly constitute compelling extenuating circumstances.” Slate, 457 Md. at 650, 180 A.3d at 158. For all of the reasons discussed herein, we disbar Malone. The disbarment will be effective immediately. IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING COSTS OF ALL TRANSCRIPTS, PURSUANT TO MARYLAND RULE 19-709(d), FOR WHICH SUM JUDGMENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION AGAINST EDWARD ALLEN MALONE. - 54 -	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487754/	Filed 11/18/22 P. v. Robson CA3 Opinion following transfer from Supreme Court 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, C089152 Plaintiff and Respondent, (Super. Ct. No. 04F06813) v. OPINION ON TRANSFER JUSTIN WAYNE ROBSON, Defendant and Appellant. On June 28, 2006, a jury convicted defendant Justin Wayne Robson of first degree murder with a special circumstance that he had been engaged in robbery (Pen. Code, §§ 187, subd. (a), 190.2, subd. (a)(17))1 and found true the allegation that he had personally used a firearm (§ 12022.53, subd. (d)). The jury also found true that defendant’s codefendant, Ira Gordan, had discharged a firearm causing death. Thereafter, defendant was sentenced to life without the possibility of parole, plus an additional 1 Undesignated statutory references are to the Penal Code. 1 determinate term of 10 years. We affirmed this judgment in People v. Gordon et al. (July 27, 2010, C056183) (nonpub. opn.). On January 7, 2019, defendant sought resentencing pursuant to former section 1170.952 in light of changes brought about by Senate Bill No. 1437 (2017-2018 Reg. Sess.), which was summarily denied by the trial court. Our original opinion in this appeal concluded that while defendant had filed a deficient petition in propria persona, we would nonetheless address the merits of his claims on appeal in the name of judicial efficiency. We concluded on the merits that defendant could not state a prima facie case for relief and affirmed the trial court’s order. (People v. Robson (Jan. 6, 2021, C089152) [nonpub. opn.] (Robson).) Defendant filed a petition for review with the California Supreme Court, which directed this court to vacate our previous decision and reconsider the matter in light of People v. Strong (2022) 13 Cal.5th 698 (Strong) and People v. Lewis (2021) 11 Cal.5th 952 (Lewis). Having done so, we conclude the trial court’s order must be vacated, and the matter remanded for further proceedings consistent with this opinion. BACKGROUND Factual Background According to our opinion in Gordon, defendant and his two codefendants, Gordon and Jamaur Wilson, were in the parking lot of a liquor store when the murder victim drove up with his girlfriend. The victim and his girlfriend went into the store. As they returned, Gordon entered the car, sat in the rear passenger seat, and asked the victim if he would give them a ride. Defendant then got into the rear seat behind the victim. Wilson 2 Defendant filed the petition in 2019. Effective June 30, 2022, the Legislature renumbered section 1170.95 to section 1172.6. (Stats. 2022, ch. 58, § 10.) There were no substantive changes to the statute. For purposes of clarity and conformity with the petition, we will continue to refer to the statute as former section 1170.95 throughout the opinion. 2 stood next to the driver’s window of the car. The victim declined Gordon’s ride request. All three defendants began striking the victim. Defendant pistol-whipped the victim multiple times and then got out of the car, joining Wilson next to the driver’s window. Gordon, who remained in the car, told the victim to give him all his money and everything he had in his pockets. The girlfriend ran into the store to call for help. As she returned the victim appeared to be trying to get his wallet out of his pocket. She then observed flashes and heard gunshots with each flash. Defendant was outside the car, holding a gun pointed at the ground. Gordon, who remained in the car seated behind the victim, had pulled out a semiautomatic handgun. The three defendants fled to an apartment complex where they all lived and where they split some marijuana, money, and pills. A revolver and a semiautomatic handgun were recovered from defendant’s apartment. The bullets recovered from the victim’s body were fired from the .380-caliber semiautomatic. All three bullets were consistent with the victim’s sitting in the driver’s seat of the vehicle and being shot from the back seat on the right passenger side. Legal Background 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(f).) The 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) 3 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 [former] section 1170.95 to provide a procedure for 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.) Former section 1170.95, subdivisions (b) and (c) create a two-step process for evaluating a petitioner’s eligibility for relief. (Lewis, supra, 11 Cal.5th at pp. 960-962.) First, the trial court determines whether the petition is facially sufficient under former section 1170.95, subdivision (b). (Lewis, at p. 960.) If the petition is facially sufficient, then, the trial court moves on to former 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.) As the 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 1170.95 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.” ’ [Citations.] ‘[A] 4 court should not reject the petitioner’s factual allegations on credibility grounds without first conducting an evidentiary hearing.’ [Citations.] ‘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.” ’ ” (Lewis, supra, 11 Cal.5th at p. 971.) As relevant here, Senate Bill No. 775 (2021-2022 Reg. Sess.) (Stats. 2021, ch. 551, §§ 1-2), which took effect on January 1, 2022, amended former section 1170.95 to “[c]odif[y] the holdings of People v. Lewis (2021) 11 Cal.5th 952, 961-970, regarding petitioners’ right to counsel and the standard for determining the existence of a prima facie case” and to “[r]eaffirm[ ] that the proper burden of proof at a resentencing hearing under this section is proof beyond a reasonable doubt.” (Stats. 2021, ch. 551, § 1; Cal. Const., art. IV, § 8.) DISCUSSION As we noted in Gordon, the prosecution was not required to prove that defendant was the shooter or an aider and abettor. However, the People also alleged and the jury found true the robbery-murder special circumstance, which authorizes a sentence of life without the possibility of parole for “a major participant” in a felony murder who acted with “reckless indifference to human life.” (§ 190.2, subd. (d); id. subd. (a)(17).) Thus, our original opinion in Robson concluded the jury’s findings precluded defendant from making a prima facie case for relief as a matter of law. (Robson, supra, C089152.) This was so because the jury’s prior findings mirrored the requirements for establishing felony murder as amended by Senate Bill No. 1437, and we rejected defendant’s arguments that these findings should not be given preclusive effect in light of the Supreme Court’s opinions in People v. Banks (2015) 61 Cal.4th 788 and People v. Clark (2016) 63 Cal.4th 522. (Robson, supra, C089152.) After Robson, our Supreme Court issued Strong, which concluded: “Findings issued by a jury before Banks and Clark do not preclude a defendant from making out a 5 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, supra, 13 Cal.5th at p. 710.) Thus, because the jury’s pre-Banks and Clark findings do not preclude defendant from making a prima facie case, we now conclude that we must vacate the trial court’s order and remand for further proceedings consistent with this opinion. We further conclude that because defendant’s former section 1170.95 petition averred that he had been: (1) charged with felony murder or murder under the natural and probable consequences doctrine; (2) had been convicted of murder pursuant to one of those doctrines; and (3) could not now be convicted of murder because of changes made effective January 1 2019, he did make a prima facie showing entitling him to the appointment of counsel and briefing in this matter. (Lewis, supra, 11 Cal.5th at pp. 959- 960; former § 1170.95, subd. (c).) DISPOSITION The order denying defendant’s section 1170.95 petition is vacated, and the matter is remanded with directions to conduct further proceedings consistent with this opinion. /s/ HOCH, Acting P. J. We concur: /s/ RENNER, J. /s/ KRAUSE, J. 6	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487751/	Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER. Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email corrections@akcourts.gov. THE SUPREME COURT OF THE STATE OF ALASKA THOMAS J. KNOLMAYER, M.D., ) ALASKA TRAUMA AND ACUTE ) Supreme Court No. S-17792 CARE SURGERY, LLC, ) ) Superior Court No. 3AN-16-04601 CI Petitioners, ) ) OPINION v. ) ) No. 7631 – November 18, 2022 CHARINA MCCOLLUM, JASON ) MCCOLLUM, ) ) Respondents. ) ) Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Herman G. Walker, Jr., Judge. Appearances: Howard Lazar and Whitney L. Wilkson, Delaney Wiles, Inc., Anchorage, for Petitioners. Margaret Simonian, Dillon & Findley, P.C., Anchorage, and Michael Cohn, Phillip Paul Weidner & Associates, Anchorage, for Respondents. Christian N. Bataille, Flanigan & Bataille, Anchorage, for Amicus Curiae Alaska Association for Justice. Ian S. Birk, Keller Rohrback L.L.P., Seattle, Washington, and Eva Gardner, Ashburn & Mason P.C., Anchorage, for Amicus Curiae Premera Blue Cross. Before: Bolger, Chief Justice, Winfree, Maassen, Carney, and Borghesan, Justices. BORGHESAN, Justice. I. INTRODUCTION Alaska Statute 09.55.548(b) provides that when a medical malpractice claimant’s losses have already been compensated in part by a collateral source (such as an insurer), the claimant’s damages award will be reduced by the value of the collateral source compensation, except when the collateral source is a “federal program that by law must seek subrogation.” This case presents the questions of whether and how the statute applies when the claimant’s losses are compensated by an employer’s self-funded health benefit plan governed by the federal Employee Retirement Income Security Act (ERISA).1 We conclude that an ERISA plan does not fall within the statute’s “federal program” exception. Therefore AS 09.55.548(b) requires a claimant’s damages award to be reduced by the amount of compensation received from an ERISA plan. But we also conclude that the distinction the statute draws between different types of medical malpractice claimants is not fairly and substantially related to the statute’s purpose of ensuring claimants do not receive a double recovery — an award of damages predicated on losses that were already compensated by a collateral source. Because insurance contracts commonly require the insured to repay the insurer using the proceeds of any tort recovery, claimants with health insurance are scarcely more likely to receive a double recovery than other malpractice claimants. The statute therefore violates the equal protection guarantee of the Alaska Constitution. 1 29 U.S.C. § 1001 et seq. ERISA comprehensively regulates employee welfare and pension benefit plans “to make the benefits promised by an employer more secure by mandating certain oversight systems and other standard procedures.” Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 320-21 (2016). -2- 7631 II. FACTS AND PROCEEDINGS A. Facts Plaintiff Charina McCollum alleges that in May 2015 Dr. Thomas Knolmayer, M.D., mistakenly cut the wrong duct during a surgery to remove McCollum’s diseased gallbladder. As a result McCollum was medevacked from Anchorage to Seattle, where she was given a drain to evacuate bile from her abdomen until she could have duct repair surgery. Due to problems with bile drainage in June 2015 she was again medevacked from Anchorage to Seattle and the drain was replaced. In August 2015 the duct was surgically repaired. McCollum’s husband Jason McCollum was employed by Lowe’s Companies, Inc., and most of McCollum’s health care expenses were paid by a health plan administered by Lowe’s. The terms of the Lowe’s Plan include a right to subrogation, under which the Plan “may, at its discretion, . . . commence a proceeding or pursue a claim against any party” for the recovery of all benefits paid by the Plan. The Plan’s terms also give it a right to reimbursement from any damages award McCollum might recover for her injury: The Plan shall be entitled to recover 100% of the benefits paid, without deduction for attorneys’ fees and costs or application of the common fund doctrine, make whole doctrine or any other similar legal theory, without regard to whether the Covered Person is fully compensated by his or her recovery from all sources. The Plan shall have an equitable lien which supersedes all common law or statutory rules, doctrines and laws of any State prohibiting assignment of rights which interferes with or compromises in any way the Plan’s equitable subrogation lien. The obligation exists regardless of how the judgment or settlement is classified and whether or not the judgment or settlement specifically designates the recovery or a portion of it as including medical, disability or other expenses. If the Covered -3- 7631 Person’s recovery is less than the benefits paid, then the Plan is entitled to be paid all of the recovery achieved. B. Proceedings In February 2016 McCollum filed a complaint for medical malpractice against Knolmayer and Alaska Trauma and Acute Care Surgery, LLC. 1. The superior court’s first order on preemption McCollum moved for a ruling of law on the recoverability of her medical expenses that had been paid by the Lowe’s Plan. Alaska Statute 09.55.548(b) provides that “a claimant may only recover damages from the defendant that exceed amounts received by the claimant as compensation for the injuries from collateral sources,” with the exception of “death benefits paid under life insurance” or collateral sources that are “federal program[s] that by law must seek subrogation.” McCollum’s motion argued that as an employer-funded benefit plan, the Lowe’s Plan is governed by ERISA, which preempts state laws relating to employee benefit plans. McCollum asked the court “to hold that ERISA [preempts] the application of AS 09.55.548(b) in this case, and that [McCollum] is not precluded from requesting medical damages that include the expenditures of the” Lowe’s Plan. Knolmayer opposed McCollum’s motion, arguing that ERISA does not preempt AS 09.55.548(b). Knolmayer claimed that although ERISA does preempt some state laws, “state laws that do not affect coverage or impose requirements upon ERISA plans are not preempted.” In reply McCollum argued that AS 09.55.548(b) is preempted because it affects the Lowe’s Plan’s contractual subrogation and reimbursement rights. To support this argument McCollum pointed to a letter from the Plan’s representative, the PHIA Group, to McCollum’s counsel stating that “at the time of settlement or resolution of any underlying claims, [the Plan] will seek full reimbursement of all related claims paid by -4- 7631 the Plan.” At oral argument, McCollum explained that because AS 09.55.548(b) limits the amount that McCollum can recover from the defendants, it also potentially limits the amount the Lowe’s Plan can recover from McCollum. She argued that because AS 09.55.548(b) would result in the Lowe’s Plan recovering less from claimants in Alaska than from claimants in states without similar statutory provisions, the statute impairs ERISA’s goal of uniform health plan administration across the country. Knolmayer, on the other hand, argued that AS 09.55.548 “only governs the defendant’s liability to the plaintiff. It does not prevent the [P]lan in any way from seeking reimbursement from the plaintiff after this lawsuit has concluded.” On October 1, 2018, the court issued an order holding that ERISA does not preempt AS 09.55.548(b). The order stated that under AS 09.55.548(b), the plaintiff’s award is reduced by the amount the insurer paid in medical expenses; that amount is then “set aside by the court to reimburse the insurer.” According to the superior court, because the statute did not “prevent the [Plan] from seeking or receiving reimbursement,” it did not affect the operation of ERISA plans and therefore was not preempted by ERISA. 2. The superior court’s order on partial reconsideration Knolmayer sought partial reconsideration of the October 1 order. He did not challenge the court’s conclusion that ERISA does not preempt AS 09.55.548. But he sought reconsideration of the court’s holding that the amount deducted from the plaintiff’s recovery would be “set aside” to reimburse the insurer. Knolmayer argued that this “set-aside” would contradict the statute’s purpose of reducing the size of medical malpractice awards, as well as contradict the common law by allowing the subrogated insurer to obtain a recovery that the plaintiff herself could not recover. McCollum opposed the motion. She argued that under Knolmayer’s interpretation of AS 09.55.548(b), the Lowe’s Plan would be able to “seize” her entire recovery, thus -5- 7631 “eviscerat[ing]” the “basic principle of tor[t] law that individuals have basic interests protected by law in the event of civil wrong.” The court granted partial reconsideration on June 25, 2019. It agreed with Knolmayer that AS 09.55.548(b) “forecloses collection of the Plan’s subrogated interest against Defendants by Plaintiff.”2 It therefore vacated “those portions of its Order that set out a post-trial procedure for earmarking covered medical costs and awarding them to the non-party Plan.” However, the court noted that “nothing in AS 09.55.548(b) prevents the Plan from recovering on its subrogated interest as a party itself.” The court stated that unless the Lowe’s Plan joined as a party, McCollum could not “pursue the covered medical costs, regardless of the contract between [McCollum] and the Plan.” But the court determined that “[t]he Plan’s subrogation right has not been eliminated by the statute,” and that the Plan was still free to join the present action or to bring its own action against the defendants. 3. The superior court’s clarification order McCollum then moved for clarification of the court’s reconsideration order, asking whether the Lowe’s Plan could assign its subrogated claim to her. The defendants opposed, urging the court to find that even if McCollum received an assignment of the Lowe’s Plan’s subrogated claim, her recovery on the claim would still be limited by AS 09.55.548(b). The court denied the motion as a request for an advisory opinion. In October 2019 McCollum filed a notice to the court that she had “agreed to an assignment from” the Lowe’s Plan and that the “actual assignment w[ould] be completed in the near future.” Knolmayer responded, arguing that the Plan had to join the action as a party itself in order to recover the Plan’s expenditures. McCollum replied 2 Emphasis in original. -6- 7631 by asking the court whether the proposed assignment would be valid, stating that if it would not be, she would instead seek involuntary joinder of the Lowe’s Plan. In November 2019 McCollum moved to join the Lowe’s Plan’s representative, the PHIA Group, as a co-plaintiff. The defendants opposed, arguing that the Lowe’s Plan had exercised its option to ratify McCollum’s action instead of joining it and could not be forced to join. They further argued that any claim brought by the Plan would be barred by the statute of limitations. In May 2020 the court denied McCollum’s motion for joinder. On April 30, 2020, the court issued an “Order Vacating & Clarifying Orders Re: ERISA Preemption of AS 09.55.548 & Denying Plaintiff’s Motion.” The order stated that because of the parties’ confusion regarding the earlier rulings on ERISA preemption, “the Court vacates its previous orders (issued October 1, 2018 and June 25, 2019) and clarifies its holding for the record: ERISA does not preempt AS 09.55.548, and AS 09.55.548 applies to this case.” The court held that AS 09.55.548(b) did not prevent McCollum from recovering the medical expenses paid by the Lowe’s Plan because the Plan falls under the statute’s exception for federal programs that by law must seek subrogation. The court reasoned that because the Plan is an employee welfare benefit program governed by ERISA, it is a “federal program.” And it reasoned that according to the terms of McCollum’s contract with the Plan and the Plan’s letter to McCollum’s counsel, “the plan is also required to seek subrogation and reimbursement.”3 Thus, “[b]ecause Ms. McCollum’s federally-governed health insurance plan constitutes a ‘federal program that by law must seek subrogation’ under the statute, evidence of any compensation or payments from her plan is not admissible and her damages may not be reduced based on payments received from those sources.” 3 Emphasis in original. -7- 7631 4. Petition for review In May 2020 Knolmayer petitioned for review of the superior court’s April 30 order, specifically the court’s “holding that [the Lowe’s Plan] is a ‘federal program that by law must seek subrogation’ under AS 09.55.548(b).” We granted the petition, posing the following questions to the parties and inviting the participation of amici curiae:4 • First, is the Lowe’s Plan part of a “federal program required by law to seek subrogation” for purposes of AS 09.55.548(b)? • If not, does AS 09.55.548(b) bar a medical malpractice plaintiff from recovering damages paid by a contractually subrogated insurer? • Can an insurer assign a contractually subrogated claim to a plaintiff for collection purposes in a medical malpractice lawsuit, and was there an effective assignment in this case? • Does AS 09.55.548(b) as applied to a plaintiff whose insurer has a contractual right to collect from the plaintiff’s recovery violate the due process or equal protection guarantees of the Alaska Constitution? Or does AS 09.55.548(b) require that such contractual subrogation rights be invalidated?5 III. STANDARD OF REVIEW Deciding the correct interpretation of AS 09.55.548, whether the statute’s operation may be avoided by the use of assignment, whether this statute is preempted by 4 We thank amici Alaska Association for Justice and Premera Blue Cross for their helpful briefing. 5 See Knolmayer v. McCollum, No. S-17792 (Alaska Supreme Court Order, Sept. 29, 2020). -8- 7631 ERISA, and whether the statute violates the Alaska Constitution are questions of law that we review de novo.6 IV. DISCUSSION A. AS 09.55.548(b)’s Bar On Recovering Damages Compensated By A Collateral Source Raises Difficult Questions About Allocation Of Loss When The Collateral Source Has Rights Of Subrogation And Reimbursement. This case concerns how AS 09.55.548(b) affects the recovery of damages in a medical malpractice case when the plaintiff’s medical expenses have been paid in part by an employer’s self-funded health benefit plan governed by ERISA. Historically, a plaintiff’s damages award against a tortfeasor could not be “diminished or mitigated on account of payments received by plaintiff from a source other than the defendant.”7 The so-called “collateral source rule” was “based on the principle that a tort-feasor is not entitled to have his [or her] liability reduced merely because plaintiff was fortunate enough to have received compensation for his [or her] injuries or expenses from a collateral source.”8 The rule prevented the admission of 6 Alaska Pub. Offs. Comm’n v. Not Tammie, 482 P.3d 386, 388 (Alaska 2021) (statutory interpretation); Catalina Yachts v. Pierce, 105 P.3d 125, 128 (Alaska 2005) (federal preemption); Ruggles ex rel. Estate of Mayer v. Grow, 984 P.2d 509, 512 13 (Alaska 1999) (relationship of assignment to subrogation); Forrer v. State, 471 P.3d 569, 583 (Alaska 2020) (constitutional interpretation). 7 Weston v. AKHappyTime, LLC, 445 P.3d 1015, 1021 (Alaska 2019) (quoting Beaulieu v. Elliott, 434 P.2d 665, 673 (Alaska 1967)). 8 Id. (alterations in original) (quoting Ridgeway v. N. Star Terminal & Stevedoring Co., 378 P.2d 647, 650 (Alaska 1963)). -9- 7631 “evidence that the plaintiff was compensated by a collateral source for all or a portion of the damages caused by the defendant’s wrongful act.”9 The Alaska legislature modified the collateral source rule in medical malpractice cases in 1976 by enacting AS 09.55.548(b), which provides in relevant part: Except when the collateral source is a federal program that by law must seek subrogation and except death benefits paid under life insurance, a claimant may only recover damages from the defendant that exceed amounts received by the claimant as compensation for the injuries from collateral sources, whether private, group, or governmental, and whether contributory or noncontributory. This statute prevents a plaintiff from recovering damages for expenses that have already been paid by a collateral source — typically an insurer — and thereby receiving a windfall. An exception is made for payments from a “federal program that by law must seek subrogation.”10 This exception reflects that a federal program like Medicaid is legally required to seek recovery of its expenditures attributable to a tort, either by pursuing its subrogated claim against the tortfeasor directly or by seeking reimbursement 9 22 AM. JUR. 2D. Damages § 779 (2022). 10 “Subrogation” is “the substitution of another person in place of the creditor to whose rights he or she succeeds in relation to the debt, and gives to the substitute all the rights, priorities, remedies, liens, and securities of the person for whom he or she is substituted.” 16 GEORGE JAMES COUCH, ET AL., COUCH ON INSURANCE § 222:5 (3d ed. 2021). We have explained that “[w]hen an insurer pays expenses on behalf of an insured it is subrogated to the insured’s claim. The insurer effectively receives an assignment of its expenditure by operation of law and contract.” Weston, 445 P.3d at 1021 n.16 (quoting Dixon v. Blackwell, 298 P.3d 185, 193 n.38 (Alaska 2013)). The subrogated claim belongs to the insurer. Id. The insurer may allow the insured to include the claim in a suit against a third-party tortfeasor and recoup proceeds directly from the damages award, id., or the insurer “may pursue a direct action against the tortfeasor, discount and settle its claim, or determine that the claim should not be pursued.” Ruggles, 984 P.2d at 512. -10- 7631 from the claimant’s recovery.11 Allowing the claimant to recover payments made by a subrogated federal program that is obligated to exercise its recovery rights does not result in a windfall for the plaintiff, because it is the federal program that ultimately recovers this amount. Yet Medicaid is not the only collateral source that seeks to recover its expenditures on an insured when a tortious third party is responsible. The contract between a health plan and an insured commonly gives the health plan express rights of subrogation and may also oblige the insured to reimburse the insurer’s payments with any damages the insured has recovered from a tortious third party.12 That is the case here, where the Lowe’s Plan has a contractual right “to recover 100% of the benefits paid . . . without regard to whether the Covered Person is fully compensated by his or her recovery from all sources . . . [and] regardless of how the judgment or settlement is 11 See 42 U.S.C. § 1396a(a)(25)(B) (mandating that states and local agencies seek recovery for Medicaid expenses); AS 47.07.025 (requiring Alaska Medicaid recipients to assign their rights to third-party payment for medical care to the State and permitting the State to garnish a recipient’s wages or salary to ensure reimbursement). The parties assume that Medicare imposes a similar obligation. Although Medicare clearly possesses a right to seek reimbursement, see 42 U.S.C. § 1395y(b)(2)(B)(iii), and subrogation, see 42 U.S.C. § 1395y(b)(2)(B)(iv), the parties have not pointed to any law that gives Medicare a legal obligation to do so. 12 See 16 COUCH ET AL., supra note 10, § 226:3 (“Traditionally, an insurer who paid its insured’s claim then looked to recover the payments from any third party who might have caused the insured’s loss. However, because of various limitations on the concept of ‘subrogation,’ . . . as well as to avoid the need to undertake the expense of prosecuting its own action against a third party, insurers have in past decades become increasingly concerned with their ability to recover back their payments directly from their own insureds, by means of ‘reimbursement.’ ”); see also id. § 222:2 (distinguishing “subrogation” as “attempts by insurers to recover from a third party” from “reimbursement,” which refers to “attempts by the insurer to recover from the entity which received the policy proceeds — the insured or a beneficiary — once that entity has, in fact, recovered from the third party who is responsible for causing the loss”). -11- 7631 classified.” In these cases, the plain language of AS 09.55.548(b) causes the health plan’s medical payments to be deducted from the plaintiff’s damages award twice: first by the court, applying AS 09.55.548(b), and a second time by the health plan exercising its contractual right of reimbursement. This “double deduction” means that the plaintiff, instead of receiving a windfall, comes up short. The combination of AS 09.55.548(b) and insurers’ contractual rights of subrogation and reimbursement can create harsh results for the injured person to the advantage of the person’s insurer, which recovers the cost of providing insurance, and the tortfeasor, who does not have to pay the full cost of the negligence. For example, a severely injured person unable to continue working a strenuous, high-paying job might have incurred $500,000 in medical bills, covered by his insurer, and lost $500,000 in future income. Under AS 09.55.548(b) the person may not recover the $500,000 paid by the insurer. Thus the defendant, who has caused $1 million in damages, is on the hook for half the cost of its negligence. As for the $500,000 the person could recover as compensation for lost income, the insurer may exercise its contractual right of reimbursement and take the entire amount. This person would end up far worse than someone who had no insurance at all, who would be able to recover all damages and, after paying medical debts, could keep the compensation for lost income.13 Knolmayer takes the position that this result is not unfair; it is the result of a legislative policy choice to reduce damages awards and the insured’s choice to accept these terms of health insurance coverage. 13 McCollum maintains that this harsh result is likely to occur in her case. If AS 09.55.548(b) precludes her from recovering the $349,049.87 the Plan paid for her medical expenses and she is limited to $250,000 in non-economic damages by AS 09.55.549(d), McCollum asserts that she will be left with nothing. We express no opinion on McCollum’s allegations or the figures she cites. -12- 7631 To avoid the risk of such a harsh result, McCollum and amici advance several theories of how AS 09.55.548(b) should be interpreted and applied in this case. They argue that because McCollum’s health benefit plan is governed by ERISA, it falls within the exception for “federal program[s] that must by law seek subrogation,” so AS 09.55.548(b) does not preclude her from recovering damages that were compensated by the Plan. She argues that AS 09.55.548(b) was not intended to result in a “double deduction” for medical malpractice plaintiffs and thus cannot be interpreted to preclude her from recovering damages for which the Plan has a right of reimbursement. If these interpretations of AS 09.55.548(b) are rejected, she argues that the Plan may assign its subrogated claim to her and has done so in this case, allowing her to recover the damages that AS 09.55.548(b) would otherwise preclude her from recovering. Alternatively, McCollum and amici argue that ERISA preempts the application of AS 09.55.548(b) to McCollum’s case. Each of these theories raises questions about just how the legislature intended AS 09.55.548(b) to operate when the collateral source has rights of subrogation and reimbursement — and in particular, who will bear the loss caused by the injury. Lurking underneath these questions is the constitutional question of whether the legislature’s approach to allocating the loss is consistent with Alaska Constitution’s guarantees of equal protection and due process. B. AS 09.55.548(b) Does Not Eliminate Collateral Sources’ Subrogated Claims. Resolving the parties’ arguments requires us to decide how the legislature intended AS 09.55.548(b) to operate and, in particular, how the legislature intended to affect collateral sources’ subrogation rights. Put simply, the question is whether the legislature intended to preclude only the injured person from recovering the amount of collateral source payments or to preclude also the collateral sources themselves from -13- 7631 recovering those amounts. Answering this question is the first step to deciding: (1) the scope of the “federal program” exception; (2) whether the Lowe’s Plan has a claim it could assign to McCollum for collection; (3) whether ERISA preempts AS 09.55.548(b); and (4) the legislature’s ultimate purpose in enacting the statute, which is essential to our constitutional analysis. Knolmayer contends that the legislature did not intend to abrogate collateral sources’ subrogation rights. Rather, he contends the legislature intended merely to preclude claimants from recovering amounts that equitably belong (under subrogation principles)14 to insurers, so that insurers may pursue these amounts from tortfeasors directly. McCollum and amici appear to agree with this interpretation. Although the parties do not dispute this point, we must independently consider this threshold issue. Whether the legislature intended to preserve, eliminate, or otherwise modify collateral sources’ subrogation rights is an issue of statutory interpretation. We interpret statutes “according to reason, practicality, and common sense, taking into account the plain meaning and purpose of the law as well as the intent of the drafters.”15 “Statutory construction begins with the language of the statute construed in light of the purpose of its enactment.”16 We decide questions of statutory interpretation “on a sliding scale”: “the plainer the language of the statute, the more convincing any contrary legislative history must be . . . to overcome the statute’s plain meaning.”17 “We give popular or 14 See Ruggles, 984 P.2d at 512 (observing that “[w]hen an insurer pays expenses on behalf of an insured it is subrogated to the insured’s claim” and that “the subrogated claim belongs to the insurer”). 15 Native Vill. of Elim v. State, 990 P.2d 1, 5 (Alaska 1999). 16 Tesoro Petrol. Corp. v. State, 42 P.3d 531, 537 (Alaska 2002). 17 City of Valdez v. State, 372 P.3d 240, 248 (Alaska 2016) (first quoting (continued...) -14 7631 common words their ordinary meaning, if the words are not otherwise defined in the statute.”18 The statutory text applies the recovery limitation only to a “claimant.”19 And the text clearly distinguishes between a “claimant” and a “collateral source” from which a claimant receives compensation. Nothing on the face of the statute suggests a limitation on the right of a subrogated insurer to pursue its subrogated claim directly against a tortfeasor. However, applying the traditional common law rules of subrogation to this statutory text supports a colorable argument that collateral sources too are limited from recovering these amounts. “[A] subrogated insurer stands in [the] shoes of an insured, and has no greater rights than the insured, for one cannot acquire by subrogation what another, whose rights he or she claims, did not have.”20 For that reason, the subrogated insurer “is subject to all the limitations applicable to the original claim of the subrogor [i.e., the insured].”21 By precluding the claimant from recovering damages for losses compensated by a collateral source, AS 09.55.548(b) arguably precludes the subrogated collateral source from recovering these damages too. And under traditional principles of subrogation, the subrogated insurer would have no right to other categories of damages, 17 (...continued) Marathon Oil Co. v. State, 254 P.3d 1078, 1082 (Alaska 2011); and then quoting Peninsula Mktg. Ass’n v. State, 817 P.2d 917, 922 (Alaska 1991)). 18 Wilson v. State, Dep’t of Corr., 127 P.3d 826, 829 (Alaska 2006). 19 AS 09.55.548(b). 20 16 COUCH ET AL., supra note 10, § 222.5. 21 Id.; see also 17 COUCH ET AL., supra note 10, § 236:8 (“Since the insurer’s claim by subrogation is derivative from that of the insured, it is subject to the same statute of limitations as though the cause of action were sued upon by the insured.”). -15- 7631 such as pain and suffering or loss of income, that the claimant can still recover.22 Although the text of AS 09.55.548 does not expressly limit a collateral source’s subrogation rights, these subrogation principles raise the possibility that the legislature intended to limit recovery by collateral sources as well as claimants. The legislative history does not decisively answer this question either. Alaska Statute 09.55.548(b) originated as one of 27 recommendations by a Medical Malpractice Insurance Commission convened by Governor Jay Hammond.23 In Reid v. Williams we described AS 09.55.548(b) as “part of a comprehensive medical malpractice reform package intended to alleviate a perceived crisis in medical malpractice insurance costs.”24 It seems fairly clear that the Commission intended to limit the recovery of both injured persons and their insurers. The Commission’s final draft of the provision that would eventually become AS 09.55.548(b) was similar in many respects to the legislation enacted, but the Commission’s draft expressly provided that “[n]otwithstanding other provisions of state law, and except as provided in this subsection, a collateral source does not have a right of subrogation.”25 22 See 16 COUCH ET AL., supra note 10, § 223:94 (“Under the principle that an insurer who pays its insured’s claim is only subrogated to the insured’s rights against a third party that relate to the same loss compensated by the insurer, it becomes crucial to determine whether a settlement or judgment in an action between the insured and the third party is, in fact, related to the same loss the insurer has compensated.”). 23 STATE OF ALASKA, REPORT OF THE GOVERNOR’S MEDICAL MALPRACTICE INSURANCE COMMISSION, at iii-vii (1975) (hereinafter COMMISSION REPORT). 24 964 P.2d 453, 456 (Alaska 1998). 25 House Bill (H.B.) 574, 9th Leg., 2d Sess. (1976) (initial proposal). -16- 7631 The proviso eliminating collateral source subrogation rights is consistent with the Commission’s explanation for what became AS 09.55.548(b). The Commission stated: [I]t was discovered that frequently a person would be allowed an award predicated upon out-of-pocket losses which, in fact, were wholly or partially compensated from other or collateral sources. The result is potential for double recovery, and the presentation of the additional complications of subrogation and collateral source liens. In determining how to approach eliminating the double recovery or subrogation problem, it was determined that overall cost would be reduced if the patient was required to first utilize the first party coverages to which he is entitled, which are much more efficient forms of distribution than allowing the full measure of damages in an expensive third party proceeding, and then deny the patient the right of alleging, in the malpractice action, the items of damage which were compensated by collateral sources.[26] This discussion indicates that the Commission designed the provision that became AS 09.55.548(b) to lower the size of damages awards by targeting: (1) “double recovery” by claimants whose losses were already compensated, and (2) the “complications of subrogation and collateral source liens.” Finally, the proviso eliminating collateral source subrogation rights also can explain the “federal program” exception.27 The Commission likely understood that any attempt to abolish the subrogation rights of a “federal program that by law must seek 26 COMMISSION REPORT, supra note 23, at 19. 27 See AS 09.55.548(b) (providing an exception to the collateral source rule for “federal program[s] that by law must seeks subrogation”). -17- 7631 subrogation” would be preempted by federal law.28 Therefore the Commission allowed claimants to recover damages that had been compensated by a federal program, ensuring that the program’s subrogation rights would remain intact. In sum, it seems clear from the Commission’s draft legislation and its report that the Commission intended to eliminate the subrogation rights of collateral sources. What complicates matters is the fact that the legislature then amended the bill based on the Commission’s draft legislation to get rid of the sentence expressly eliminating collateral source subrogation rights.29 It is possible that the legislature viewed that sentence as redundant in light of the common law rules for subrogation: because the claimant could not recover amounts compensated by a collateral source, the principles of equitable subrogation would normally preclude the subrogated collateral source from doing so.30 Yet it seems unlikely that the legislature eliminated a proviso expressly enacting the legislature’s desired policy simply because that policy could be implied by the interaction between other statutory provisions and the common law. Therefore it seems more plausible that the legislature’s amendment was intended to be meaningful. In other words, the legislature may have made a different policy choice than the Commission. Rather than reduce the liability of a physician found to be negligent by eliminating all recovery of collateral source payments, the legislature 28 See, e.g., Hines v. Davidowitz, 312 U.S. 52, 67 (1941) (explaining, in case concerning federal Alien Registration Act, that state law is preempted if it “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress”). 29 Committee Substitute for House Bill (C.S.H.B.) 574, (L&C) 9th Leg., 2d Sess. (1976), at 1, 16-17. 30 See 16 COUCH ET AL., supra note 10, § 222.5 (“[A] subrogated insurer stands in [the] shoes of an insured, and has no greater rights than the insured . . . .”). -18- 7631 may have intended to eliminate the potential for double recoveries by injured persons while allowing their insurers to recover the losses caused by the negligent physician.31 Unfortunately, there appears to be no explanation of this change in the legislative history. It is fair to ask why, if the legislature intended to permit collateral sources to pursue subrogated claims directly against the tortfeasor, the legislature retained the “federal program” exception. The legislature may have been concerned that even limiting the insured’s recovery would be enough to create preemption problems. By limiting the plaintiff’s recovery, AS 09.55.548(b) would in some cases impair a federal program’s ability to assert a subrogation lien on damages recovered by the insured; the federal program would therefore have to secure its interest by pursuing a claim directly against the tortfeasor. The legislature may have feared that this degree of interference would result in preemption. Alternatively, the legislature may not have viewed the federal program exception in terms of preemption at all. Instead, the exception may reflect the view that when a federal program is required by law to seek subrogation, there will be no 31 This would be a reasonable policy choice, even as part of a statutory scheme that seeks to limit malpractice awards overall. Allowing health insurers to recover such costs would theoretically lower the cost of health insurance overall, effectuating a different allocation of the loss than the Commission chose. As the Commission itself observed, “every change in the tort law required the conscious recognition that the burden of loss was being wholly or partially shifted to a new or different class of persons[,] and the Commission struggled hardest on the equities of who should bear the loss.” COMMISSION REPORT, supra note 23, at 10-11. The legislature could reasonably reach different conclusions on that question than the Commission. The federal district court for the Southern District of New York, interpreting New York’s similarly worded statute, pointedly described its understanding of that legislature’s policy choice: “Section 4545 prevents double recoveries; it was not intended to deprive insurers of their basic subrogation rights . . . . Certainly, § 4545 was not intended to create a windfall for the tortfeasor, granting it the benefit of the injured party’s insurance, for which it did not pay, as a reward, in effect, for committing a tort and injuring another.” In re Sept. 11 Litig., 649 F. Supp. 2d 171, 180 (S.D.N.Y. 2009). -19- 7631 chance of double recovery, so the rationale for modifying the collateral source rule does not apply to these claimants. Either way, interpreting AS 09.55.548(b) to preserve collateral source subrogation rights does not create an irrational result, so it is a plausible interpretation of the statute.32 And because the legislature amended the Commission’s draft of the legislation in such a significant way, we cannot confidently ascribe the Commission’s intent regarding collateral source subrogation rights to the legislature. Courts in other jurisdictions have concluded, when interpreting statutes worded similarly to AS 09.55.548(b), that those statutes did not abrogate insurers’ rights of subrogation. The Supreme Court of Florida, for example, reached this conclusion with respect to Florida Statute 627.7372(1), which requires the trial court to “instruct the jury to deduct from its verdict the value of all benefits received by the claimant from any collateral source.”33 The court reasoned that the statute “does not bar a cause of action by either the plaintiff insured or his insurer, it merely limits the plaintiff’s recovery to monies to which he is equitably entitled.”34 Thus the court saw no reason “why a health insurer should not be entitled to a single recovery of costs caused by the tortfeasor.”35 32 Cf. Martinez v. Cape Fox Corp., 113 P.3d 1226, 1230 (Alaska 2005) (“We ‘will ignore the plain meaning of an enactment . . . where that meaning leads to absurd results or defeats the usefulness of the enactment.’ ” (quoting Davenport v. McGinnis, 522 P.2d 1140, 1144 n.15 (Alaska 1974))). 33 Blue Cross & Blue Shield of Fla., Inc. v. Matthews, 498 So. 2d 421, 422 (Fla. 1986). 34 Id. at 422-23. 35 Id. -20 7631 The federal district court for the Southern District of New York reached the same conclusion with respect to New York’s statute modifying the collateral source rule.36 The New York statute, like Alaska’s, requires reducing the plaintiff’s damages award by the amounts “replaced or indemnified . . . from any collateral source.”37 The court rejected the argument that because a subrogated insurer “stands in the shoes” of its insured and has only the “derivative and limited rights of the insured,” the statute abrogates insurers’ right of subrogation.38 The court reasoned that “[t]he principle of subrogation is so embedded in the common law, and would be so radically affected, that a very clear legislative intent to disrupt it is required,” yet “[t]he statute contains absolutely no language that effects th[at] disruption.”39 Observing the clarity with which the statute modified the collateral source rule, the court concluded that “the absence of 36 In re Sept. 11 Litig., 649 F. Supp. 2d at 183-84. 37 N.Y. C.P.L.R. § 4545(c) (MCKINNEY 2021) (“In any action brought to recover damages for personal injury, injury to property or wrongful death, where the plaintiff seeks to recover for the cost of medical care, dental care, custodial care or rehabilitation services, loss of earnings or other economic loss, evidence shall be admissible for consideration by the court to establish that any such past or future cost or expense was or will, with reasonable certainty, be replaced or indemnified, in whole or in part, from any collateral source, except for life insurance and those payments as to which there is a statutory right of reimbursement. If the court finds that any such cost or expense was or will, with reasonable certainty, be replaced or indemnified from any such collateral source, it shall reduce the amount of the award by such finding, minus an amount equal to the premiums paid by the plaintiff for such benefits for the two-year period immediately preceding the accrual of such action and minus an amount equal to the projected future cost to the plaintiff of maintaining such benefits.”) (amended 2009). 38 In re Sept. 11 Litig., 649 F. Supp. 2d at 179-83 (quoting Winkelman v. Excelsior Ins. Co., 650 N.E.2d 841, 844 (N.Y. 1995)). 39 Id. at 183. -21- 7631 any similar clarity” about eliminating insurers’ subrogation rights weighed against interpreting the statute to do so.40 As that court observed, subrogation is rooted in the common law,41 a “creature of equity” with the purpose to “work[] out . . . an equitable adjustment between the parties by securing the ultimate discharge of a debt by the person who in equity and good conscience ought to pay it.”42 “[S]tatutes will not be interpreted as changing the common law unless they effect the change with clarity.”43 We see no clear intent in the text or legislative history to abrogate collateral sources’ subrogation rights, and therefore we must conclude the legislature intended to preserve them. Accordingly AS 09.55.548(b) limits the injured party from recovering the amount of collateral source payments received but does not preclude the collateral source itself from seeking these amounts in a direct action against the tortfeasor. C. AS 09.55.548(b) Bars A Medical Malpractice Plaintiff From Recovering Damages Paid By A Subrogated Insurer. The plain language of AS 09.55.548(b) bars medical malpractice plaintiffs from recovering damages compensated by a collateral source such as, in McCollum’s case, an insurer: “a claimant may only recover damages from the defendant that exceed amounts received by the claimant as compensation for the injuries from collateral sources, whether private, group, or governmental, and whether contributory or noncontributory.” The statute does not contain an exception for collateral sources with a contractual right 40 Id. 41 Id. 42 16 COUCH ET AL., supra note 10, § 222:8. 43 ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 318 (West 2012). -22 7631 of subrogation or reimbursement, but only “federal program[s] that by law must seek subrogation and . . . death benefits paid under life insurance.”44 The existence of an exception for death benefits and federal programs that by law must seek subrogation indicates that the legislature did not intend to exclude compensation paid by other kinds of collateral sources from the statute’s limitation on recovery.45 McCollum argues that the statute’s proviso for depleted coverage allows plaintiffs to recover past medical expenses paid by collateral sources. She focuses on the following language in AS 09.55.548(b): The court may take into account the value of claimant’s rights to coverage exhausted or depleted by payment of these collateral benefits by adding back a reasonable estimate of their probable value, or by earmarking and holding for possible periodic payment under (a) of this section that amount of the award that would otherwise have been deducted, to see if the impairment of claimant’s rights actually takes place in the future. McCollum argues that this language means that the trial court has “the option of replacing collateral sources ‘exhausted or depleted’ in the post-trial offset hearing if it is established that the ‘claimant’s rights’ were actually ‘impaired’ by either reimbursement or subrogation.” This interpretation is not persuasive. “[C]overage exhausted or depleted by payment of these collateral benefits” refers to a situation in which the claimant has a limited amount of insurance coverage and the collateral benefits at issue have 44 AS 09.55.548(b). 45 The principle of expressio unius est exclusio alterius “establishes the inference that, where certain things are designated in a statute, ‘all omissions should be understood as exclusions.’ ” Alaska State Comm’n for Hum. Rts. v. Anderson, 426 P.3d 956, 964 n.34 (Alaska 2018) (quoting Croft v. Pan Alaska Trucking, Inc., 820 P.2d 1064, 1066 (Alaska 1991)). -23- 7631 substantially used up that coverage. The statutory text simply does not refer to subrogation or reimbursement. McCollum also argues, relying on the legislative history of AS 09.55.548(b), that the legislature had no intent to force injured persons to bear the loss of the injury so as to protect negligent physicians. Therefore, she argues, interpreting AS 09.55.548(b) to preclude a claimant like her from recovering damages compensated by a collateral source with a contractual right to reimbursement is contrary to legislative purpose. As explained further below, we agree with McCollum that the legislature’s purpose in enacting AS 09.55.548(b) was to eliminate the potential for a claimant to receive the windfall of double recovery, not to force her to shoulder the loss of injury.46 But despite this overall purpose, we cannot ignore the plain language of the statute. The legislature clearly was aware that collateral sources could have rights of subrogation and exempted only certain types of collateral source compensation from the statute. McCollum does not point to any legislative history that would suggest the legislature meant something different.47 McCollum also relies on decisions from other jurisdictions to argue that AS 09.55.548(b) cannot be interpreted to allow a double deduction. But these decisions interpreting laws that modify the collateral source rule in other states are not a persuasive guide to interpreting AS 09.55.548(b). In Toomey v. Surgical Services, P.C. the Iowa Supreme Court ruled that a statute modifying the collateral source rule precluded the 46 See section IV.G. below. 47 Although the parties did not address the canon of constitutional avoidance in their briefing, the canon cannot support the interpretation McCollum argues for here, which is directly contrary to the plain meaning of the statutory text and is unsupported by legislative history. Res. Dev. Council for Alaska, Inc. v. Vote Yes for Alaska’s Fair Share, 494 P.3d 541, 548 (Alaska 2021) (explaining that statute cannot be interpreted unreasonably to avoid a ruling of unconstitutionality). -24- 7631 recovery of a statutory workers’ compensation lien that would have resulted in the claimant receiving a double deduction.48 This conclusion flowed from that court’s attempt to harmonize the two statutes.49 In this case, Lowe’s reimbursement right is contractual, not statutory, and McCollum does not point us to another statute that would require us to interpret AS 09.55.548(b) contrary to its plain terms in order to effectuate legislative intent. The Iowa law at issue in Loftsgard v. Dorrian, the second case McCollum cites, expressly permitted plaintiffs to present evidence of collateral source indemnification or subrogation rights.50 Our statute has no comparable language. These decisions therefore do not tell us what the Alaska legislature intended when enacting AS 09.55.548(b). In re Sept. 11 Litigation51 does not support McCollum’s argument either. In that case a federal district court ruled that New York’s similarly worded statute does not bar insurers from directly pursuing their subrogated claims against tortfeasors.52 But it does not suggest that a claimant could recover these amounts and therefore does not suggest that AS 09.55.548(b) should be interpreted that way. Alaska Statute 09.55.548(b) does not permit medical malpractice plaintiffs to recover damages already paid by a subrogated insurer. 48 558 N.W.2d 166, 167-68, 170 (Iowa 1997). 49 Id. at 170. 50 476 N.W.2d 730, 733 (Iowa App. 1991) (citing Iowa Code § 668.14(2)). 51 649 F. Supp. 2d 171 (S.D.N.Y. 2009). 52 Id. at 183. -25- 7631 D. The Lowe’s Plan Does Not Fall Within The Statutory Exception For Federal Programs Required By Law To Seek Subrogation. The superior court ruled that the Lowe’s Plan is a “federal program that by law must seek subrogation” for purposes of AS 09.55.548(b). This ruling allows McCollum to recover damages compensating for the medical expenses covered by the Lowe’s Plan, which the Lowe’s Plan may then recoup from McCollum pursuant to its contractual right of reimbursement. Knolmayer argues that AS 09.55.548(b)’s federal program exception does not apply to self-funded health benefit plans governed by ERISA, including the Lowe’s Plan. On this point we agree with Knolmayer. 1. The plain meaning of “federal program that by law must seek subrogation” does not encompass a privately funded, privately administered benefit plan with contractual rights of subrogation and reimbursement. According to the plain meaning of the statutory text, the Lowe’s Plan is not a federal program. “Federal” refers to the federal government;53 “program” is defined by Merriam-Webster as “a plan or system under which action may be taken toward a goal.”54 The United States Supreme Court has referred to Medicare and Medicaid — each an amalgamation of federal legislation and regulations that provide for federal funding of individual health benefits through administration by federal agencies — as “federal programs.”55 By contrast, the Lowe’s Plan is created and funded by Lowe’s Companies, Inc., a private corporation, and is administered by its agent. “[N]o agency of the United States administers ERISA plans; private employers may administer their own ERISA 53 See Federal, BLACK’S LAW DICTIONARY (11th ed. 2019). 54 Program, WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1969). 55 Fischer v. United States, 529 U.S. 667, 671 (2000); Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 578 (2012); 42 U.S.C. §§ 1396a-1396v, §§ 1301 1320b-21 (Medicaid); 42 U.S.C. §§ 1301–1320d-8, 1395–1395lll (Medicare). -26- 7631 plans or may contract for administration of plans from an independent company.”56 A privately funded and operated entity does not fall within the common understanding of the term “federal program.” McCollum offers an array of arguments for why the Lowe’s Plan is a “federal program.” First, she argues that if the legislature intended to limit the exception to Medicaid, it would have done so explicitly. Although true that the phrase “federal program” is broader than Medicaid alone, that does not mean that the legislature intended it to encompass an entity that was not created, funded, or administered by the federal government. Second, it is not the case, as McCollum argues, that the Lowe’s Plan is a “federal program” simply by virtue of being governed by ERISA. ERISA is a federal law, but that does not mean that every plan or “program” established under its authority is a “federal program” in the straightforward sense of the term: a program of the federal government. Many private actors are comprehensively regulated by the federal government — airlines, auto manufacturers, banks — yet are not themselves commonly thought of as “federal programs.” McCollum argues that the Lowe’s Plan is a federal program because ERISA gives it “the force of federal law.” She points to the fact that ERISA allows insured parties, fiduciaries, and plan administrators to sue to enforce the terms of ERISA and of specific ERISA plans.57 Yet the existence of a federal cause of 56 Botsford v. Blue Cross & Blue Shield of Mont., Inc., 314 F.3d 390, 398 (9th Cir. 2002). 57 29 U.S.C. § 1132(a)(3) (“A civil action may be brought . . . by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.”). See, e.g., Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356, (continued...) -27- 7631 action to enforce a contract does not make the parties to the contract themselves “federal program[s].” Ultimately, the ordinary meaning of the phrase “federal program” does not encompass a privately funded and administered health benefit plan. The Lowe’s Plan does not satisfy the second element of AS 09.55.548(b)’s exception either: it is not an entity that “by law must seek subrogation.” The terms of the Plan state that “[t]he Plan may, at its discretion, . . . commence a proceeding or pursue a claim against any party or coverage for the recovery of all damages to the full extent of the value of any such benefits or conditional payments advanced by the Plan.” Further, if the insured party brings her own suit, “[t]he Plan shall be entitled to recover 100% of the benefits paid.” McCollum argues that these provisions mean that although the Lowe’s Plan has the discretion to seek either subrogation or reimbursement, it is required by law to seek one or the other. Not so: the terms assert the Plan’s contractual right to recovery, not its obligation to pursue recovery. There is a clear distinction between having the right to do something and being compelled by law to do something Amicus curiae Premera Blue Cross argues that the assumption that the Lowe’s Plan will seek either reimbursement or subrogation is “built into” Lowe’s financial reporting to the U.S. Department of Labor,58 pointing to the plan administrator’s duty to make sure that the terms of ERISA plans are enforced.59 But although prudent 57 (...continued) 361 (2006) (concluding that plan administrator is a fiduciary under ERISA and able to bring a suit to enforce the terms of a reimbursement provision). 58 See Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 321 (2016) (describing the “extensive . . . reporting, disclosure, and recordkeeping requirements” imposed by ERISA on ERISA plans). 59 See Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99, 108 (2013) (stating that “once a plan is established, the administrator’s duty is to see that the (continued...) -28- 7631 financial management of the Lowe’s Plan may call for the Plan administrator to pursue subrogation and reimbursement whenever available, financial dictates are not legal dictates. And even if the terms of the Lowe’s Plan could be read to require the administrator to always seek subrogation or reimbursement, these requirements are still only contractual, not legal. “ ‘Law’ connotes a policy imposed by the government, not a privately-negotiated contract.”60 The Lowe’s Plan administrator is not required “by law” to seek subrogation. 2. The legislative history and apparent purpose of AS 09.55.548(b) do not support interpreting “federal program that by law must seek subrogation” beyond its plain meaning. McCollum and Premera argue that the phrase “federal program required by law to seek subrogation” should be construed broadly to encompass any entity that by virtue of federal law has subrogation and reimbursement rights, such as health benefit plans governed by ERISA. Premera focuses on the seeming purpose of the “federal program” exception, arguing that the legislature “intended to make an exception for when federal law intervened to require reimbursement out of a tort recovery.” Otherwise, Premera reasons, the law would impair “claimants’ ability to obtain even a single recovery for loss.” McCollum echoes this point, arguing that legislative history indicating an intent to balance claimants’ interests against those of insurers and doctors warrants interpreting the “federal program” exception broadly enough to include ERISA plans. Neither McCollum nor Premera points to any legislative history material that directly 59 (...continued) plan is ‘maintained pursuant to [that] written instrument’ ” (alteration in original) (quoting 29 U.S.C. § 1102(a)(1))). 60 Empire HealthChoice Assurance, Inc. v. McVeigh, 396 F.3d 136, 144 (2d Cir. 2005). -29- 7631 explains the intent of the “federal program” exception. Instead, their arguments focus on the broader purposes of the statute. As explained above, the “federal program” exception in AS 09.55.548(b) may have originally stemmed from the recognition that any attempt to impair the subrogation rights of federal programs would be preempted. And federal programs like Medicaid are not the only entities with federally protected subrogation rights. In 1990 the U.S. Supreme Court ruled in FMC Corp. v. Holliday that ERISA preempted a Pennsylvania statute expressly abolishing insurers’ rights of subrogation and reimbursement.61 Accordingly, Premera argues that the “federal program” exception should be interpreted to include payments made by ERISA plans that require reimbursement because the reimbursement requirement is enforceable by federal law. This interpretation, Premera argues, would be consistent with the overall legislative purpose of eliminating double recoveries because an ERISA plan is virtually certain to exercise its reimbursement rights, precluding any windfall to the claimant. But there is scant support for the notion that the legislature considered ERISA plans and drafted AS 09.55.548(b) around them. The legislature passed AS 09.55.548(b) in 1976.62 ERISA was enacted only two years prior, ERISA itself does not address rights of subrogation and reimbursement,63 and the law’s broad preemptive 61 498 U.S. 52, 65 (1990). 62 Ch. 102, § 35, SLA 1976. 63 See, e.g., Admin. Comm. for Wal-Mart Stores, Inc. Assocs.’ Welfare Plan v. Salazar, 525 F. Supp. 2d 1103, 1113 (D. Ariz. 2007) (“ERISA does not address reimbursement of medical expenses paid out by a plan.”); Hotel Emps. & Rest. Emps. Int’l Union Welfare Fund v. Gentner, 815 F. Supp. 1354, 1357 (D. Nev. 1993) (“ERISA itself is silent on the issue of subrogation agreements.”), aff’d, 50 F.3d 719 (9th Cir. 1995). -30- 7631 scope was not established until years later. It was not until 1990 that the Supreme Court decided FMC Corp. So there is little reason to think that the legislature was aware that AS 09.55.548(b) might be preempted when applied to claimants covered by ERISA health benefit plans. That is why the language of AS 09.55.548(b) exempts payments made by a “federal program required by law to seek subrogation” rather than payments by “any entity with federally protected rights of subrogation.” Although interpreting the “federal program” exception to include ERISA plans may be consistent with the purpose of that exception, there is no evidence that is what the legislature intended. Absent such evidence, it is not reasonable to interpret “federal program that by law must seek subrogation” to include a private entity with a contractual right to seek subrogation.64 Therefore the Lowe’s Plan — a self-funded health benefit plan governed by ERISA, with contractual rights of subrogation and reimbursement — is not a “federal program that by law must seek subrogation.” Compensation paid to McCollum by the Lowe’s plan is not exempt from AS 09.55.548(b)’s recovery limitation on that ground. E. A Claimant Cannot Recover The Value Of Collateral Source Payments That AS 09.55.548(b) Precludes Her From Recovering By Having The Collateral Source Assign Its Subrogated Claim To Her. In the superior court, McCollum suggested that the Lowe’s Plan could assign its subrogated claim to her, enabling her to recover the damages that AS 09.55.548(b) would otherwise preclude her from recovering. Our order granting the 64 See Res. Dev. Council for Alaska, Inc. v. Vote Yes for Alaska’s Fair Share, 494 P.3d 541, 548 (Alaska 2021) (“[W]e may not read into a statute that which is not there, even in the interest of avoiding a finding of unconstitutionality, because the extent to which the express language of the provision can be altered and departed from and the extent to which the infirmities can be rectified by the use of implied terms is limited by the constitutionally decreed separation of powers which prohibits this court from enacting legislation or redrafting defective statutes.” (quoting Alaskans for a Common Language v. Kritz, 170 P.3d 183, 192 (Alaska 2007))). -31- 7631 petition for review asked the parties to discuss whether an insurer may assign a contractually subrogated claim to a plaintiff for collection purposes in a medical malpractice lawsuit.65 We conclude that even if a subrogated insurer may assign its claim to the insured for collection purposes,66 the claim is still subject to the limitation imposed by AS 09.55.548(b). The claimant cannot use assignment to circumvent the statute’s limitation on her recovery. To resolve this question, it is helpful to consider precisely what occurs when an insurer is subrogated to the insured’s claim. As we explained in Ruggles ex rel. Estate of Mayer v. Grow, “[w]hen an insurer pays expenses on behalf of an insured it is subrogated to the insured’s claim. The insurer effectively receives an assignment of its expenditure by operation of law and contract.”67 Accordingly, the insured’s claim is assigned to the insurer at the precise moment the insurer pays the costs stemming from the incident.68 From that point on, “the subrogated claim belongs to the insurer.”69 “If the insurer does not object, the insured may include the subrogated claim in its claim against 65 See Knolmayer v. McCollum, No. S-17792 (Alaska Supreme Court Order, Sept. 29, 2020). 66 Knolmayer argues that the Lowe’s Plan did not assign its subrogated claim to McCollum and that any assignment now would be barred by the statute of limitations applicable to malpractice claims. McCollum argues that the Lowe’s Plan effectively assigned its subrogated claim to her when it ratified her suit against Knolmayer, so that her timely suit includes the Lowe’s Plan’s subrogated claim. We assume without deciding that the Plan’s ratification of McCollum’s suit was an effective assignment of its subrogated claim. 67 984 P.2d 509, 512 (Alaska 1999). 68 See In re Sept. 11 Litig., 649 F. Supp. 2d 171, 179-80 (S.D.N.Y. 2009). 69 Ruggles, 984 P.2d at 512. -32 7631 a third-party tortfeasor.”70 In other words, a partially subrogated insurer may ratify a claim brought by its insured.71 By enacting AS 09.55.548(b) the legislature made ratification fruitless because the statute precludes the insured from recovering the amounts to which the insurer is entitled. McCollum argues, in effect, that a claimant can evade the statutory bar by having the subrogated insurer assign the claim to the claimant instead of ratify the claimant’s pursuit of the claim. The distinction between “assign” and “ratify” in this context is semantic: in both cases, the insurer permits the injured person to pursue the insurer’s claim in exchange for the right to recoup the proceeds of the claim from the insured. It is quite unlikely that the legislature, which clearly understood the concepts of subrogation and ratification when it adopted AS 09.55.548(b),72 intended to allow claimants to evade the bar on recovery through the use of this semantic distinction. Therefore a claimant cannot recover damages compensated by a collateral source by having the collateral source assign its subrogated claim to the claimant. F. ERISA Does Not Preempt AS 09.55.548(b)’s Bar On Claimants’ Recovery Of Collateral Source Payments. Although our order granting the petition for review did not ask the parties to address preemption, the parties have devoted a substantial portion of their briefing to this question. McCollum and Premera argue that because AS 09.55.548(b) limits a 70 Id. 71 See Mun. of Anchorage v. Baugh Constr. & Eng’g Co., 722 P.2d 919, 925 (Alaska 1986) (describing effect of partially subrogated insurer’s ratification of insured’s suit against party causing injury). 72 COMMISSION REPORT, supra note 23, at 19 (describing problem of subrogation); see also Young v. Embley, 143 P.3d 936, 945 (Alaska 2006) (“We presume the legislature is aware of the common law when enacting statutes.”). -33- 7631 claimant’s recovery, the claimant’s insurer may not be able to fully recover its expenditures by relying on its contractual reimbursement rights. In these cases the insurer would have to pursue its subrogated claim directly against the tortfeasor in order to fully recover its interest. Because the statute has the potential to impair insurers’ contractual reimbursement rights in this way, McCollum argues, ERISA preempts the statute’s application when the collateral source is an employer’s self-funded health benefit plan like the Lowe’s Plan. Under this theory McCollum must be allowed to recover from Knolmayer the compensation she has received from the Lowe’s Plan, which the Lowe’s Plan will in turn recover from her through its contractual right of reimbursement. “ERISA pre-empts ‘any and all State laws insofar as they may now or hereafter relate to any employee benefit plan’ covered by ERISA.”73 The U.S. Supreme Court has explained that ERISA’s pre-emption clause is “conspicuous for its breadth.”74 The test for ERISA preemption has three steps. First, ERISA preempts “every state law that ‘relate[s] to’ an employee benefit plan governed by ERISA,” so a court must determine whether a given law “relates to” an ERISA plan.75 If the law does not “relate to” a plan governed by ERISA, it is not preempted. Second, under the “saving clause,” state laws that would otherwise be struck down are “saved” from ERISA preemption if they “regulat[e] insurance.”76 Third, under the “deemer clause,” an ERISA plan “shall not be deemed an insurance company, an insurer, or engaged in the business 73 Rutledge v. Pharm. Care Mgmt. Ass’n, 141 S. Ct. 474, 479 (2020) (quoting 29 U.S.C. § 1144(a)). 74 FMC Corp. v Holliday, 498 U.S. 52, 58 (1990). 75 Id. (alteration in original) (quoting Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 739 (1985)). 76 Id. (alteration in original). -34- 7631 of insurance for purposes of state laws ‘purporting to regulate’ insurance companies or insurance contracts.”77 Thus, even a state law that is “saved” as a law regulating insurance is nonetheless preempted as applied to an ERISA plan. ERISA plans are “bound by state insurance regulations insofar as they apply to the plan’s insurer,” but may not be directly regulated by such regulations.78 In the first step of the preemption analysis we ask whether AS 09.55.548(b) relates to an ERISA plan.79 The U.S. Supreme Court has held that a law relates to an ERISA plan “if it has ‘a connection with or reference to such a plan.’ ”80 1. AS 09.55.548(b) does not “refer to” ERISA. In FMC Corp. v. Holliday the U.S. Supreme Court ruled that ERISA preempted Pennsylvania’s antisubrogation law.81 The statute at issue maintained that there would be no right to subrogation or reimbursement “with respect to . . . benefits . . . paid or payable” by “[a]ny program, group contract or other arrangement for payment of benefits,” which “includ[e], but [are] not limited to, benefits payable by a hospital plan corporation or a professional health service corporation.”82 This language — into which an ERISA plan, as a “program . . . for payment of benefits,” falls — led the Court to 77 Id. 78 Id. at 61. 79 The superior court erred by applying this test to determine whether McCollum’s claim related to ERISA, rather than whether AS 09.55.548(b) does so. The preemption analysis properly focuses on the state law, not a plaintiff’s claim. 80 FMC Corp., 498 U.S. at 58 (quoting Shaw v. Delta Air Lines, 463 U.S. 85, 97 (1983)). 81 Id. at 65. 82 Id. at 59 (emphasis and alterations in original) (quoting 75 PA. CONS. STAT. §§ 1719, 1720 (1987)). -35- 7631 conclude that the law “ha[d] a ‘reference’ to benefit plans governed by ERISA.”83 The FMC Corp. decision thus suggested that any statute that applies to ERISA plans satisfies the first step of the preemption analysis. But the Court has retreated somewhat from such a sweeping rule. Its most recent decisions on ERISA preemption articulate a different test: “[a] law refers to ERISA if it ‘acts immediately and exclusively upon ERISA plans or where the existence of ERISA plans is essential to the law’s operation.’ ”84 The Court’s recent decision in Rutledge v. Pharmaceutical Care Management Association provides a useful illustration.85 The Arkansas law at issue in Rutledge effectively required pharmacy benefit managers to reimburse pharmacies at a price equal to or higher than that which the pharmacies paid to buy the drug from wholesalers.86 Rejecting the pharmacies’ argument that the law referred to ERISA plans simply because it applied to them, the Court held that this law did not refer to ERISA “because it applie[d] to [pharmacy benefit managers] whether or not they manage an ERISA plan.”87 Nor was ERISA “essential to the law’s 83 Id. 84 Rutledge v. Pharm. Care Mgmt. Ass’n., 141 S. Ct. 474, 481 (2020) (quoting Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 319-20 (2016)). 85 Id. 86 Id. at 479. Pharmacy benefit managers (PBMs), the Court explained, are “intermediaries between prescription-drug plans and the pharmacies that beneficiaries use. When a beneficiary of a prescription-drug plan goes to a pharmacy to fill a prescription, the pharmacy checks with a PBM to determine that person’s coverage and copayment information. After the beneficiary leaves with his or her prescription, the PBM reimburses the pharmacy for the prescription, less the amount of the beneficiary’s copayment. The prescription-drug plan, in turn, reimburses the PBM.” Id. at 478. 87 Id. at 481. -36- 7631 operation” for largely the same reason: the law regulated pharmacy benefit managers regardless of whether the plans they served fell under ERISA.88 Accordingly the Court has ruled that laws of general applicability — those that do not exclusively affect ERISA plans — do not refer to ERISA plans for preemption purposes. In New York State Conference of Blue Cross and Blue Shield Plans v. Travelers Insurance Co., the Court considered a law imposing a surcharge on hospital billing rates for patients covered by insurers others than Blue Cross/Blue Shield, presuming such surcharges would be passed on to insurance buyers, including ERISA plans.89 The Court rejected the argument that the law referred to an ERISA plan because “[t]he surcharges are imposed upon patients and [health maintenance organizations (HMOs)], regardless of whether the commercial coverage or membership, respectively, is ultimately secured by an ERISA plan.”90 And in California Division of Labor Standards Enforcement v. Dillingham Construction, N.A., the Court weighed a law permitting public works contractors to pay lower wages to apprentices in approved apprenticeship programs.91 “Because it seems that approved apprenticeship programs need not necessarily be ERISA plans,” the Court found the law did not “refer to” ERISA plans.92 Alaska Statute 09.55.548(b) does not act immediately and exclusively upon ERISA plans. The law does not apply “exclusively” to ERISA plans but to all collateral 88 Id. (quoting Gobeille, 577 U.S. at 319-320). 89 514 U.S. 645, 650, 659 (1995). 90 Id. at 656. 91 519 U.S. 316, 319-20 (1997). 92 Id. at 325. -37 7631 sources other than federal programs that by law must seek subrogation and death benefits under life insurance. Nor is ERISA essential to the law’s operation: if ERISA were abolished AS 09.55.548(b) would function without a problem. Instead the statute is like the pharmacy reimbursement law in Rutledge, the prevailing wage statute in Dillingham, or the billing surcharge law in Travelers, all of which were “indifferent” to ERISA.93 AS 09.55.548(b) does not relate to ERISA under this test. 2. AS 09.55.548(b) does not have an impermissible connection with ERISA. The U.S. Supreme Court’s case law on what constitutes an impermissible connection with ERISA plans is more complicated but follows a similar trajectory. In FMC Corp. the Court held a Pennsylvania law abolishing collateral source subrogation rights had an impermissible connection with ERISA plans because the statute would require plans “to design their programs in an environment of differing state regulations.”94 This, in turn, “would complicate the administration of nationwide plans, producing inefficiencies that employers might offset with decreased benefits.”95 The Court concluded that such inefficiencies were sufficient to establish a connection to ERISA, 93 Id. at 325-26, 328 (holding that California’s prevailing wage statute made no reference to ERISA plans because it “functions irrespective of . . . the existence of an ERISA plan” and “is indifferent to the funding, and attendant ERISA coverage, of apprenticeship programs” (quoting Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990)); Travelers, 514 U.S. at 656 (holding that New York law applying surcharges on insurance plans did not refer to ERISA plans because they were imposed on plans “regardless of whether the commercial coverage or membership . . . is ultimately secured by an ERISA plan”); Rutledge, 141 S. Ct. at 481. 94 498 U.S. 52, 60 (1990). 95 Id. -38- 7631 reflecting its belief that ERISA’s “pre-emptive scope was as broad as its language.”96 A state law, the Court explained, has a connection with ERISA benefit plans if it “risk[s] subjecting plan administrators to conflicting state regulations.”97 The Court clarified the scope of this holding in a series of decisions culminating in Rutledge, in which it explained what it means for a law to have an “impermissible connection” with an ERISA plan.98 The Court noted that ERISA is “primarily concerned with pre-empting laws that require providers to structure benefit plans in particular ways, such as by requiring payment of specific benefits . . . or by binding plan administrators to specific rules for determining beneficiary status.”99 ERISA also preempts a state law “if ‘acute, albeit indirect, economic effects of the state law force an ERISA plan to adopt a certain scheme of substantive coverage.’ ”100 In analyzing preemption, “th[e] Court asks whether a state law ‘governs a central matter of plan administration or interferes with nationally uniform plan administration.’ ”101 If so, the law is preempted.102 “Crucially, not every state law that affects an ERISA plan or causes some disuniformity in plan administration has an impermissible connection with an ERISA 96 Id. at 59-60 (quoting Shaw v. Delta Air Lines, 563 U.S. 85, 98 (1983)). 97 Id. at 59. 98 141 S. Ct. at 480-81. 99 Id. at 480 (quoting Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 320 (2016)). 100 Id. (quoting Gobeille, 577 U.S. at 320). 101 Id. (quoting Gobeille, 577 U.S. at 320). 102 Id. -39- 7631 plan,” especially “if a law merely affects costs.”103 Therefore the Court ruled in Travelers that ERISA did not preempt the surcharge on hospital billing rates for non-Blue Cross/Blue Shield insurers, which the Court presumed would be passed on to insurance buyers, among them ERISA plans.104 Although the financial effects of the law would incentivize ERISA plans to choose Blue Cross/Blue Shield over alternatives, the Court held such an indirect economic influence did not create an impermissible connection because it did not “bind plan administrators to any particular choice.”105 In other words, “ERISA does not pre-empt state rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage.”106 Accordingly in Rutledge the Court determined that a law regulating pharmacy benefit managers by requiring them to reimburse pharmacies at a minimum rate “[was] merely a form of cost regulation.”107 Although such costs may be passed on to ERISA plans, the Court explained that “cost uniformity was almost certainly not an object of pre-emption.”108 “Nor is the effect of [the law] so acute that it will effectively dictate plan choices.”109 The Court concluded that the pharmacy 103 Id. 104 N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 659 (1995). 105 Id. 106 Rutledge, 141 S. Ct. at 480. 107 Id. at 481. 108 Id. (quoting Travelers, 514 U.S. at 662). 109 Id. -40- 7631 reimbursement law was a simple cost regulation and did not have an impermissible connection with an ERISA plan.110 Because AS 09.55.548(b) does not abrogate collateral sources’ subrogation rights, it does not have the kind of “impermissible connection” with ERISA described by the U.S. Supreme Court. The Court’s preemption analysis is concerned with whether a state law affects ERISA plans by “dictat[ing] the choices”111 of the plan or “forcing plans to adopt [a] particular scheme of substantive coverage.”112 Reducing plaintiffs’ recovery by the amount of collateral source payments does potentially increase costs for ERISA plans. If AS 09.55.548(b) results in a claimant recovering an amount of damages less than the value of collateral source payments, then the ERISA plan will be unable to completely recoup its costs through reimbursement. For example, if a plaintiff receives $100,000 from her plan but is limited to collecting $80,000 from a tortfeasor by AS 09.55.548(b), the ERISA plan will be short $20,000 following reimbursement. But ERISA plans may still recover the full amount expended by pursuing the subrogated claim directly against the tortfeasor. Though there will be legal costs associated with seeking recovery through subrogation, “ERISA does not pre-empt state rate regulations that merely increase costs or alter incentives for ERISA plans.”113 Just as the surcharge on non-Blue Cross/Blue Shield insurers passed on costs to ERISA plans 110 Id. 111 Cal. Div. of Lab. Standards Enf’t v. Dillingham Constr., N.A., 519 U.S. 316, 334 (1997). 112 Rutledge, 141 S. Ct. at 480. 113 Id. -41- 7631 but did not “bind plan administrators to any particular choice,”114 AS 09.55.548(b) may increase the cost to ERISA plans of obtaining full recovery but does not prevent them from doing so. For that reason AS 09.55.548(b) is quite unlike the Pennsylvania anti- subrogation law struck down in FMC Corp. v. Holliday.115 There, the law did dictate choices: ERISA plans were barred from seeking recovery of expenses via subrogation or reimbursement.116 By contrast, as explained above the Alaska Legislature rejected the Medical Malpractice Commission’s proposal to abolish collateral sources’ subrogation rights.117 Therefore AS 09.55.548(b) “does not bind plan administrators to any particular choice.”118 The economic effects of the statute — the costs associated with collateral sources recovering costs via subrogation instead of reimbursement in some instances — are not so severe as to effectively “force an ERISA plan to adopt a certain scheme of substantive coverage.”119 For that reason we conclude that AS 09.55.548(b) does not have an impermissible connection with ERISA plans. And because the statute neither refers to nor has an impermissible connection with ERISA plans, it is not preempted. 114 Id. (quoting N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 659 (1995)). 115 498 U.S. 52, 59-60 (1990). 116 Id. at 60. 117 See section IV.B. above. 118 Travelers, 514 U.S. at 659. 119 Rutledge, 141 S. Ct. at 480 (quoting Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 320 (2016)). -42- 7631 G. AS 09.55.548(b) Violates The Alaska Constitution’s Equal Protection Guarantee. In our order granting Knolmayer’s petition for review, we asked the parties to address whether AS 09.55.548(b) violates the equal protection guarantee of the Alaska Constitution when applied to a plaintiff whose insurer has a contractual right to reimbursement from the plaintiff’s recovery. Having considered the parties’ and amici curiae’s briefing on this point, we conclude that AS 09.55.548(b) is unconstitutional as applied to such claimants.120 Article 1, section 1 of the Alaska Constitution provides “that all persons are equal and entitled to equal rights, opportunities, and protections under the law.” “We interpret the equal protection clause ‘to be “a command to state and local governments to treat those who are similarly situated alike.” ’ ”121 “The guarantee of equal protection under the Alaska Constitution is more robust than that under the United States Constitution and so ‘affords greater protection to individual rights than’ its federal counterpart.”122 120 “An as-applied [constitutional] challenge requires evaluation of the facts of the particular case in which the challenge arises,” while a facial challenge means “that there is no set of circumstances under which the statute can be applied consistent with the requirements of the constitution.” Ass’n of Vill. Council Presidents Reg’l Hous. Auth. v. Mael, 507 P.3d 963, 982 (Alaska 2022) (quoting Dapo v. State, Off. of Child’s Servs., 454 P.3d 171, 180 (Alaska 2019); State v. ACLU of Alaska, 204 P.3d 364, 372 (Alaska 2009)). 121 Watson v. State, 487 P.3d 568, 570 (Alaska 2021) (quoting Pub. Emps.’ Ret. Sys. v. Gallant, 153 P.3d 346, 349 (Alaska 2007)). 122 Id. (quoting Alaska Civ. Liberties Union v. State, 122 P.3d 781, 787 (Alaska 2005)). -43- 7631 “Under our equal protection analysis, ‘we first decide which classes must be compared.’ ”123 “As a matter of nomenclature we refer to that portion of a [statute] that treats two groups differently as a ‘classification.’ ”124 “Once we have identified the relevant classes, we determine whether the statute discriminates between them by treating similarly situated classes differently.”125 After identifying the classes to be compared, we then apply “a flexible three step sliding-scale.”126 First, we determine “what weight should be afforded the constitutional interest impaired by the challenged enactment.”127 Second, we examine “the purposes served by a challenged statute.”128 Third, we evaluate “the state’s interest in the particular means employed to further its goals.”129 How closely the statute is scrutinized at these second and third steps depends on the standard chosen by the court at the first step.130 123 Id. (quoting Planned Parenthood of the Great Nw. v. State, 375 P.3d 1122, 1135 (Alaska 2016)). 124 Id. (alteration in original) (quoting Planned Parenthood of the Great Nw., 375 P.3d at 1135). 125 Id. 126 Planned Parenthood of the Great Nw., 375 P.3d at 1137. 127 Id. (quoting Alaska Pac. Assurance Co. v. Brown, 687 P.2d 264, 269 (Alaska 1984)). 128 Id. (quoting Alaska Pac. Assurance Co., 687 P.2d at 269). 129 Id. (quoting Alaska Pac. Assurance Co., 687 P.2d at 269). 130 See id. -44- 7631 1. The statute classifies claimants based on the existence and origin of collateral source compensation. A legislative classification “is defined by the terms of the statute at issue.”131 Alaska Statute 09.55.548(b) creates two classifications. First, it distinguishes between those claimants who receive compensation from collateral sources and those who do not. Claimants who receive compensation for their injuries from collateral sources are subject to a limitation on their recovery: they cannot recover amounts from the tortfeasor that correspond to the amounts of compensation received from the collateral source. By contrast, claimants who do not receive collateral source compensation are not so limited in their recovery. Second, the statute distinguishes between those whose collateral source compensation comes from a “federal program that by law must seek subrogation” and those whose compensation comes from all other kinds of collateral sources.132 The former group are exempt from the recovery limitations that otherwise apply to those who receive compensation from collateral sources.133 131 Watson v. State, 487 P.3d 568, 571 (Alaska 2021). 132 The statute also distinguishes those who receive life insurance payments, but that distinction is not relevant to our constitutional analysis. See AS 09.55.548(b) (“Except when the collateral source is a federal program that by law must seek subrogation and except death benefits paid under life insurance, a claimant may only recover damages from the defendant that exceed amounts received by the claimant as compensation for the injuries from collateral sources . . . .”). 133 Knolmayer argues that the classification “between medical malpractice plaintiffs with certain collateral sources and those without is a classification that is the result of a series of choices made by Ms. McCollum,” including the decision to accept health coverage from her husband’s employer’s self-funded health benefit plan, along with the accompanying subrogation and reimbursement terms of the plan. But the classification between those who receive collateral source compensation from a “federal” program, those who receive collateral source compensation from other sources, and those (continued...) -45- 7631 2. These classifications are subject to minimum scrutiny. The interests affected by AS 09.55.548(b) are financial, so the lowest level of scrutiny applies to the statute’s classifications. We explained in Reid v. Williams — also concerning whether AS 09.55.548(b) violated the equal protection clause — that “[a] medical malpractice plaintiff’s right to damages is an economic interest, which traditionally receives only minimal protection under our equal protection analysis.”134 This is because the alleged discrimination did not involve a protected class and thus merited only “minimal judicial protection.”135 The recovery limits set by AS 09.55.548(b) “impose[] only economic burdens, and allocate[] these burdens using criteria that are not 133 (...continued) who receive no collateral source compensation at all is expressly drawn by the text of AS 09.55.548(b). And the suggestion that these classifications are immaterial because a person is free to choose a particular health insurance plan and the precise terms and conditions that go with it is not persuasive. Almost half of Alaskans, like McCollum, receive health insurance through their employer. Health Insurance Coverage of the Total Population (2019), KAISER FAMILY FOUNDATION, https://www.kff.org/other/ state-indicator/total-population/?currentTimeframe=0&sortModel=%7B%22colId% 22:%22Location%22,%22sort%22:%22asc%22%7D (last visited Oct. 21, 2022). Many others are insured by Medicare or Medicaid. Id. These individuals generally are not choosing among health care plans based on their preferences; rather, the health care coverage they receive is based on where they are employed or what federal eligibility guidelines they meet. Their power to select among plans or negotiate plan provisions is negligible at best. In reality, most people have little freedom to choose the terms and conditions of their health insurance coverage, and the classifications drawn by AS 09.55.548(b) are significant in light of that reality. 134 964 P.2d 453, 458 (Alaska 1998); see also Evans ex rel. Kutch v. State, 56 P.3d 1046, 1053 (Alaska 2002) (“[R]estrictions on the types or amounts of damages that a plaintiff can pursue in court only infringe upon economic interests. Such economic interests do not count as ‘important’ interests under our equal protection analysis.”). 135 Reid, 964 P.2d at 458 -46- 7631 presumptively suspect,” so our scrutiny as to the legislature’s aims is “minimal.”136 Thus, we must ask whether the classifications created by AS 09.55.548(b) bear “a ‘fair and substantial relation’ to attaining ‘legitimate’ government objectives.”137 3. The legislative purpose of AS 09.55.548(b) is to reduce the size of malpractice awards by eliminating double recoveries. The next step of the analysis is to determine the purpose of AS 09.55.548(b). We have once before addressed this issue in Reid.138 In that case an injured claimant argued that AS 09.55.548(b)’s recovery limitation violated equal protection because it unreasonably distinguished between negligent doctors, who were protected by the statute’s recovery limitations, and other tort defendants, who are subject to a different statute modifying the collateral source rule.139 Applying the “fair and substantial” relationship test, we upheld the statute.140 We reasoned that AS 09.55.548(b) was part of a broad package of medical malpractice reforms designed to “control medical malpractice insurance costs and increase the availability of health care.”141 And we concluded that the statute bore a fair and substantial relationship to that goal.142 The special problem of medical malpractice insurance and the availability of health care justified the legislature’s 136 C.J. v. State, Dep’t of Corr., 151 P.3d 373, 380 (Alaska 2006). 137 Reid, 964 P.2d at 458 (quoting Pan-Alaska Constr., Inc. v. State, 892 P.2d 159, 162 (Alaska 1995)). 138 Id. at 456-60. 139 Id. at 458-60; see also AS 09.17.070(a). 140 Reid, 964 P.2d at 458-60. 141 Id. at 459. 142 Id. -47- 7631 decision to pare down the collateral source rule more aggressively in medical malpractice cases than in other tort cases. Our conclusion in Reid that AS 09.55.548(b) had the purpose of reducing damages awards against medical providers is not the end of the story in this case. Given the differential treatment we focused on in Reid — between physicians and other tortfeasors — it was sufficient to consider the statute’s purpose at a high level of generality. In other words, all we had to consider was why the legislature treated medical malpractice suits differently from other tort lawsuits. To consider the justification for how AS 09.55.548(b) treats different classes of medical malpractice claimants based on the existence and nature of collateral source compensation, we must dig deeper by closely examining the statutory scheme and legislative history.143 As explained above, the overall goal was to adjust the legal framework for medical malpractice claims to control the cost of malpractice insurance.144 Yet it is clear that neither the Commission nor the legislature sought to reduce damages awards at all costs. For instance, the Commission rejected an absolute limit on the discovery period 143 See Com. Fisheries Entry Comm’n v. Apokedak, 606 P.2d 1255, 1264 n.39 (Alaska 1980) (disavowing notion that “the judiciary is required to hypothesize or invent purposes” for equal protection review because “[c]lose examination of the statutory scheme will usually yield several concrete legislative purposes having a substantial basis in reality, even if these purposes are not specifically identified in a statutory purpose clause”). 144 See COMMISSION REPORT, supra note 23, at 15 (proposing changes to medical malpractice law “because Alaska would soon be faced with the same frequency and severity of problems which [were] genuinely threatening the system in many of the other states” and because “many carriers ha[d] designated certain tort law reforms as a necessary precondition to underwriting malpractice in a state”). -48- 7631 in malpractice cases in part to avoid overly burdening the plaintiff.145 It declined to raise the burden of proof in medical malpractice cases because doing so “would make it more difficult for the legitimate cases to be adjudicated.”146 And it professed it sought to do “no violence to the legitimate rights of persons injured as a result of negligent conduct.”147 With respect to the provision that became AS 09.55.548(b), the Commission explained that it was “unwilling to place arbitrary roadblocks that would preclude the legitimate claimant from having recourse to counsel and the courts for redress,” but had “discovered that frequently a person would be allowed an award predicated upon out-of pocket losses which, in fact, were wholly or partially compensated from other or collateral sources.”148 The clear goal was to reduce damages awards by “eliminating the double recovery or subrogation problem.”149 Knolmayer argues that the legislature had a different, more aggressive purpose: to reduce malpractice awards in all cases regardless of the claimant’s potential for a double recovery. Echoing the Commission’s observation that “every change in the tort law required the conscious recognition that the burden of loss was being wholly or partially shifted to a new or different class of persons,”150 Knolmayer argues that the legislature sought to reduce the size of damages awards by forcing the injured person to bear the loss. He maintains that the legislature’s decision to preserve collateral source 145 Id. at 17-18. 146 Id. at 24. 147 Id. at 52. 148 Id. at 19. 149 Id. 150 Id. at 10-11. -49- 7631 subrogation rights — a different policy choice than the Commission had endorsed — is evidence of a legislative purpose to allow collateral sources to be made whole at the expense of their insured. Yet it is hard to view the legislature’s decision to preserve collateral source subrogation rights as a policy of protecting negligent physicians at the expense of the injured person. By preserving collateral source subrogation rights the legislature increased the likelihood that the negligent physician would be liable for the full measure of harm caused. Under the Commission’s draft legislation, neither the injured claimant nor the collateral source could recover compensated medical expenses from the tortfeasor.151 Under the version of AS 09.55.548(b) ultimately enacted, a subrogated collateral source may collect these amounts directly from the tortfeasor. This shift in the statute’s operation — restoring the physician’s liability for the full amount of harm caused — undercuts Knolmayer’s argument that AS 09.55.548(b) was intended to shift the burden of loss to the claimant. Instead it confirms the view that the legislative purpose was to prevent claimants from receiving awards “predicated upon out-of-pocket losses which, in fact, were wholly or partially compensated” — i.e. the “potential for double recovery” — while preserving insurers’ right to recover these amounts from the tortfeasor.152 Another change the legislature made to the Commission’s draft legislation supports the conclusion that the legislature’s purpose for AS 09.55.548(b) was solely to eliminate double recoveries rather than shift the burden of loss to the injured person. The legislature added a provision to protect against depletion of the claimant’s insurance coverage by being forced to rely on the collateral source payments: 151 H.B. 574, 9th Leg. 2d Sess. (1976). 152 COMMISSION REPORT, supra note 23, at 19. -50- 7631 The court may take into account the value of claimant’s rights to coverage exhausted or depleted by payment of these collateral benefits by adding back a reasonable estimate of their probable value, or by earmarking and holding for possible periodic payment under (a) of this section that amount of the award that would otherwise have been deducted, to see if the impairment of claimant’s rights actually takes place in the future.[153] With this provision, the legislature intended to avoid a situation in which the claimant would be adversely affected by being forced to rely on compensation from her insurance provider rather than from the tortfeasor. This protection is hard to square with Knolmayer’s argument that the purpose of AS 09.55.548(b) was to force injured claimants to bear the loss. Knolmayer’s argument also relies on a contrast between AS 09.55.548(b) and AS 09.17.070, which modified the collateral source rule for other kinds of tort claims. The latter statute exempts payments from “collateral sources that do not have a right of subrogation by law or contract” from that statute’s recovery limitations.154 Knolmayer suggests that the express mention of subrogation in AS 09.17.070 indicates that the legislature consciously chose in AS 09.55.548(b) to limit claimants’ damages irrespective of the effect of subrogation on their recovery. But AS 09.17.070 was enacted ten years 153 AS 09.55.548(b). 154 AS 09.17.070(a) provides: After the fact finder has rendered an award to a claimant, and after the court has awarded costs and attorney fees, a defendant may introduce evidence of amounts received or to be received by the claimant as compensation for the same injury from collateral sources that do not have a right of subrogation by law or contract. -51- 7631 after AS 09.55.548(b) and is therefore not a strong guide as to the legislative purpose behind the earlier statute.155 Knolmayer argues further that the legislature amended AS 09.55.548 in 1992, after the enactment of AS 09.17.070. But the 1992 amendment to AS 09.55.548 was merely a corrective amendment to subsection (a) and had nothing to do with the collateral source provisions of subsection (b).156 Thus neither AS 09.17.070 nor the 1992 amendments to AS 09.55.548(a) shed light on the legislative purpose behind AS 09.55.548(b). Given the stated purpose, structure, and drafting history of what became AS 09.55.548(b), there is no reason to think that the legislature’s purpose was to reduce malpractice damages awards by shifting the burden of loss onto the injured person. Instead we conclude that the purpose behind AS 09.55.548(b) was to reduce malpractice damages awards by eliminating double recoveries. 4. The statutory classifications lack a fair and substantial relationship to the legitimate purpose of eliminating double recoveries. We must therefore consider whether the distinctions drawn by AS 09.55.548(b) — limiting the recovery of those who receive compensation from a non- federal collateral source — have a fair and substantial relationship to the purpose of preventing double recoveries. Under this test, “less important governmental objectives will suffice and a greater degree of over/or underinclusiveness in the means-to-ends fit 155 Compare Ch. 139, § 1, SLA 1986, with Ch. 30, § 7, SLA 1992; see also Girdwood Mining Co. v. Comsult LLC, 329 P.3d 194, 199 n.21 (Alaska 2014) (“Post enactment legislative history is disfavored because ‘the views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one.’ ” (quoting Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 117 (1980))). 156 See Ch. 30, § 7, SLA 1992. -52- 7631 will be tolerated.”157 “As a minimum, we require that the legislation be based on a legitimate public purpose and that the classification ‘be reasonable, not arbitrary, and . . . rest upon some ground of difference having a fair and substantial relation to the object of the legislation.’ ”158 In other words, “a substantial relationship between means and ends is constitutionally adequate.”159 The equal protection decisions that Knolmayer cites in defense of AS 09.55.548(b) are not controlling here. In Reid we concluded that paring down the collateral source rule more for medical malpractice claims than for other tort claims was justified by the special problem of the malpractice insurance crisis.160 But we did not examine the precise mechanisms by which AS 09.55.548(b) modified the collateral source rule for these claims, nor was the issue of subrogation squarely addressed. In C.J. v. State, Department of Corrections161 and L.D.G., Inc. v. Brown,162 we upheld statutory caps on non-economic damages, deeming them sufficiently related to the legislative purpose of lowering liability insurance premiums.163 But the blunt legislative purpose behind the damages caps — reducing damages awards by limiting compensation for a type of loss viewed as subjective and difficult to measure regardless of whether particular 157 State v. Ostrovsky, 667 P.2d 1184, 1193 (Alaska 1983). 158 Id. (quoting Isakson v. Rickey, 550 P.2d 359, 362 (Alaska 1976)). 159 Harris v. Millenium Hotel, 330 P.3d 330, 336 (Alaska 2014) (quoting State v. Schmidt, 323 P.3d 647, 662-63 (Alaska 2014)). 160 Reid v. Williams, 964 P.2d 453, 459 (Alaska 1998). 161 151 P.3d 373 (Alaska 2006). 162 211 P.3d 1110 (Alaska 2009). 163 C.J., 151 P.3d at 381; L.D.G., Inc., 211 P.3d 1110. -53- 7631 claimants are fully compensated164 — is not the purpose behind AS 09.55.548(b). Rather AS 09.55.548(b) was intended to reduce damages awards by eliminating double recoveries. Because of this statute’s distinct purpose, we must independently assess its means-to-ends fit. Preventing medical malpractice claimants from receiving double recoveries in order to limit the size of malpractice damages awards is a legitimate public purpose. But the distinctions drawn by AS 09.55.548(b) do not bear a fair and substantial relationship to this goal. The statutory classifications are premised on the assumption that claimants who receive compensation for their injuries from non-federal collateral sources would receive a double recovery if permitted to recover damages for those injuries from the tortfeasor. But this assumption does not reflect reality.165 A claimant like McCollum is obligated by the terms of her insurance contract to reimburse her insurer out of any recovery.166 These terms are commonplace in health insurance contracts.167 So in the vast 164 See C.J., 151 P.3d at 381-82 (crediting legislative judgment that noneconomic damage awards are “susceptible to over-estimates of the dollar value of a victim’s noneconomic loss” but observing “there will be severely injured persons who are under-compensated as a result of this legislation”). 165 The legislature clearly was aware of the role of contractual subrogation in the medical malpractice context. See COMMISSION REPORT, supra note 23, at 19 (discussing “subrogation problem”). Yet the legislature may have wrongly assumed a subrogated insurer could never recoup its costs from an insured who could not recover those costs directly from the tortfeasor in the first place. See 16 COUCH ET AL., supra note 10, § 223:145 (“Accordingly, an insurance contract providing generally that the insurer is subrogated to the rights of the insured does not itself permit an insurer to recover from a third-party tortfeasor until the insured has been made whole by the combination of insurance payments and the amount recovered from the tortfeasor, and there must be specific language to the contrary to avoid the make whole rule.”). 166 It is true, as Knolmayer suggests, that McCollum could have refused (continued...) -54- 7631 majority of cases, allowing claimants to recover damages from the tortfeasor corresponding to the amount of medical expenses paid by their insurers would not create a double recovery. Rather, those amounts would flow straight to the insurer through its 166 (...continued) medical benefits from the Lowe’s Plan and instead sought the entire amount of her medical costs from Knolmayer, thereby avoiding the potential for a double deduction caused by AS 09.55.548(b). But the possibility that a medical malpractice claimant might try to avoid the harmful effects of the statute with such a risky wager has little bearing on whether the distinctions drawn by the statute are substantially related to its purpose. 167 See, e.g., Best v. Fairbanks N. Star Borough, 493 P.3d 868, 871 (Alaska 2021) (describing “100% First-Dollar Right of Recovery” provision in health plan for borough employees giving plan “the right to recover or subrogate 100% of the benefits paid . . . that the claimant is entitled to receive from any third party . . . on a priority first- dollar basis, . . . regardless of whether the total recovery amount is less than the actual loss suffered.” (emphasis added)); New Orleans Assets, L.L.C. v. Woodward, 363 F.3d 372, 374 (5th Cir. 2004) (“Insurance contracts typically provide for [an insured’s entitlement to both insurance benefits and damage recovery from tortfeasors] in at least two ways: subrogation and reimbursement. With subrogation, an insurer acquires the right to assert the actions and rights of the insured against the liable tortfeasor. . . . With reimbursement, the insurer has only a right of repayment against the insured.”); Perreira v. Rediger, 778 A.2d 429, 439 (N.J. 2001) (explaining that New Jersey’s Commissioner of Insurance, having declined for years to approve “subrogation and reimbursement provisions” in certain health insurance policies, finally allowed their inclusion in 1993); Principal Mut. Life Ins. Co. v. Baron, 964 F. Supp. 1221, 1222-25 (N.D. Ill. 1997) (permitting insurer to seek compensation from the insured for medical expenses it paid pursuant to reimbursement clause); Marshall v. Emps. Health Ins. Co., 927 F. Supp. 1068, 1075 (M.D. Tenn. 1996) (permitting insurer to recover under reimbursement clause after finding insurer was precluded from exercising right of subrogation), aff’d, 1997 WL 809997 (6th Cir. Dec. 30, 1997); see also 16 COUCH ET AL., supra note 10, § 226:3 (observing that “insurers have in past decades become increasingly concerned with their ability to recover back their payments directly from their own insureds, by means of ‘reimbursement’ ”). -55- 7631 contractual reimbursement right. There is little reason to think insurers will simply leave easy money on the table. For that reason, malpractice claimants who receive compensation from non federal collateral sources are scarcely more likely to receive a double recovery than those covered by Medicaid, which is required by law to seek subrogation, or those whose medical expenses were not paid by any collateral source. It is true that not all claimants who receive collateral source compensation for their injuries will have to pay it back.168 A small number of claimants may receive compensation for their injuries from collateral sources that are not health plans, such as family members or charity.169 It is also possible that some health benefit plans do not give the plan a right of reimbursement, although it is hard to imagine why a health plan would forgo that straightforward approach to improving its bottom line. But for the most part malpractice claimants who receive collateral source compensation for their injuries are not poised to make a double recovery when suing a negligent medical provider in tort. In a world where subrogation and reimbursement provisions are the norm, the statute’s differential treatment of medical malpractice claimants based on the existence and type of collateral source compensation is not fairly and substantially related to the 168 The statute modifying the collateral source rule for general tort claims tracks this distinction, which is key to the likelihood of double recovery. See AS 09.17.070(a) (“[A] defendant may introduce evidence of amounts received or to be received by the claimant as compensation for the same injury from collateral sources that do not have a right of subrogation by law or contract.” (emphasis added)). 169 However, it is worth noting that another major source of collateral source compensation — workers’ compensation — also gives the collateral source subrogation and reimbursement rights that minimize the likelihood of double recovery. See AS 23.30.015(b), (g), (i) (permitting an employer or employer’s insurer to recoup its workers’ compensation expenditures directly from the third party or from an employee’s tort recovery). -56- 7631 legitimate purpose of preventing double recoveries.170 We therefore conclude that AS 09.55.548(b)’s limitation on recovery of collateral source compensation violates Alaska’s equal protection clause when applied to a claimant who receives compensation from a collateral source that exercises a right of reimbursement against the claimant’s recovery.171 V. CONCLUSION We VACATE the superior court’s order of April 30, 2020 and REMAND for further proceedings consistent with this opinion. 170 Cf. Gilmore v. Alaska Workers’ Comp. Bd., 882 P.2d 922, 928 (Alaska 1994) (holding formula for calculating injured worker’s weekly wage for award of workers’ compensation lacked substantial relationship to legislative goal of achieving “quick, efficient, fair, and predictable delivery” of benefits and therefore failed minimum equal protection scrutiny (emphasis in original)), superseded by statute as observed in Schiel v. Union Oil Co. of Cal., 219 P.3d 1025, 1031 n.26 (Alaska 2009). 171 We express no opinion on how the superior court is to determine whether a claimant falls into this category to which AS 09.55.548(b) cannot constitutionally be applied. That is for the superior court to decide in the first instance. -57- 7631	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487757/	Filed 11/18/22 In re S.A. CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA In re S.A., a Person Coming Under the Juvenile Court Law. D080561 SAN DIEGO COUNTY HEALTH AND HUMAN SERVICES AGENCY, (Super. Ct. No. NJ15770A) Plaintiff and Respondent, v. A.P., Defendant and Appellant. APPEAL from an order of the Superior Court of San Diego County, Michael Imhoff, Commissioner. Affirmed. Christopher R. Booth for Defendant and Appellant. Claudia Silva, County Counsel, Caitlin E. Rae, Chief Deputy County Counsel, and Katie Abajian, Deputy County Counsel for Plaintiff and Respondent. In this dependency action, A.P. (Father) filed a Welfare and Institutions Code section 3881 petition seeking to change the juvenile court’s prior order placing his daughter, S.A., with M.M. (Mother) in California. Father asked the juvenile court to instead place S.A. with him in Arizona. The juvenile court denied this request, and Father appealed, contending the juvenile court abused its discretion by finding that he did not carry his burden under section 388 to show new evidence or a change of circumstances warranting the requested change in S.A.’s placement and that the requested placement change was in S.A.’s best interest. We conclude the court did not abuse its discretion and affirm. I. FACTUAL AND PROCEDURAL BACKGROUND2 A. The section 300 petition and detention hearing In August 2021, the San Diego County Health and Human Services Agency (the Agency) petitioned the juvenile court under section 300, subdivision (b), on behalf of minor S.A. The Agency alleged there was a substantial risk S.A. would suffer serious physical harm or illness due to Mother’s delusional and paranoid thoughts and her recent attempt to run into oncoming traffic with S.A. and S.A.’s younger half-brother, E.M.3 1 All further statutory references are to the Welfare and Institutions Code unless otherwise designated. 2 “In accord with the usual rules on appeal, we state the facts in the manner most favorable to the dependency court’s order.” (In re Janee W. (2006) 140 Cal.App.4th 1444, 1448, fn. 1.) 3 E.M. is also the subject of the juvenile court proceedings, but because this appeal concerns only S.A., we limit our discussion of E.M. accordingly. 2 At the detention hearing, the juvenile court ordered that S.A. be detained with Mother in San Diego under various conditions, including that Mother reside in maternal grandmother’s home, not be unsupervised with the children outside of the home, and follow all court orders regarding visitation with Father. The court also granted Father—who lived in Arizona— unsupervised visitation with S.A. every weekend with weekly visitation by telephone. B. The jurisdictional and dispositional hearings At the continued jurisdictional hearing, the court made a true finding on the petition by clear and convincing evidence, and Father set a contested dispositional hearing regarding S.A.’s placement. At the November 8, 2021 contested dispositional hearing, the court considered each of the reports in evidence, including the Agency’s jurisdiction/disposition report and October 2021 addendum report. In its reports, the Agency recommended that S.A. be placed with Mother on the condition that Mother continue to follow court orders from the detention hearing and that Father receive enhancement services. The Agency’s addendum report reflected that S.A. had said she felt safe at Mother’s home, felt safe with Father, and that she did not know how she felt about visiting Father in Arizona. Mother, the Agency, and S.A.’s counsel asked the court to order the case plan as written, including the Agency’s recommendation that S.A. be placed with Mother. Father’s counsel stated that Father had previously anticipated asking for placement, but he did not do so at the hearing and did not voice any opposition to the Agency’s recommendation of placement with Mother. Based on the evidence, the court placed S.A. with Mother, pursuant to section 361(a). The court also amended the visitation schedule in response to Father’s request for two fewer weekends per month with S.A., due to the 3 expense and burden on Father of traveling from Arizona to see S.A. in California. C. Special hearings regarding visitation The court held special hearings on November 17, 2021 and April 6, 2022 to address Father’s complaints about Mother obstructing his visitation. During the November 17, 2021 hearing, Father’s counsel expressed concern that after Father had driven from Arizona to California for a recent visit with S.A., the child was unavailable and Mother and S.A.’s phones were turned off. The court ordered that Father would have visits with S.A. every other week and that he would pick up and drop off S.A. from school. At the April 6, 2022 hearing, Father’s counsel stated that two weeks before, Father tried to pick up S.A. from school, but Mother arrived at the same time, physically took S.A. from him, and made comments about not doing anything that was not spelled out in a court order. This incident was also outlined in the Agency’s April 6, 2022 supplemental report. In its report, the Agency stated that despite Mother’s lack of cooperation with visitation, the Agency still believed it was in S.A.’s best interest to remain in her current placement because S.A. had always lived with Mother and the maternal family, attended school in San Diego, had friends both in her school and neighborhood, and her main support and connections were in San Diego. The report further stated that S.A. enjoyed visits with Father but that she indicated that she wanted to live only with Mother. Mother’s counsel stated that he had discussed the situation with Mother and that she would comply with the visitation schedule moving forward. The court then ordered specific times and dates for Father to pick up S.A. from school without Mother’s interference and set a hearing for Father’s recently-filed section 388 petition. 4 D. Father’s section 388 petition and the initial hearing In his section 388 petition, Father contended that the court should change its November 8, 2021 order placing S.A. with Mother in California, and instead, place S.A. with him in Arizona. Father contended this would be in S.A.’s best interest because S.A. “would have the benefit of a relationship with both parents.” As changed circumstances justifying his petition, Father stated that Mother continued to make it difficult for him to visit with S.A. and failed to ensure S.A.’s regular school attendance. Father attached e-mails substantiating the multiple times—including on November 12, 2021; December 24, 2021; February 26, 2022; and March 25, 2022—during which Mother obstructed his scheduled visits with S.A. In one of these e-mails, Father also complained that S.A. had “horrible” school attendance and that Mother had not provided a doctor’s note for each time that S.A. was absent from school for being sick. He also attached an attendance sheet reflecting that S.A. was absent from school for 18 out of 120 days (15 percent of the time) while in Mother’s custody. At the May 9, 2022 initial hearing on Father’s section 388 petition, Father asked the court to make a prima facie finding on his petition and to set an evidentiary hearing. Specifically, Father contended that visitation had been a problem for Father “since day one,” even prior to S.A.’s juvenile case. He further contended that Mother’s failure to comply with the court’s visitation order was a change in circumstances sufficient to warrant a prima facie finding because there had been multiple incidents where Father traveled from Arizona to California for his visitation with S.A., but Mother “thwarted” it. The Agency submitted on the prima facie finding without argument. Mother opposed, contending there had not been a change of circumstances 5 and it would not be in S.A.’s best interest to place her with Father. Mother noted that S.A. had never lived away from Mother; that S.A. had a close bond with her half-brother, E.M., who was also in the home; and that, as reflected in the Agency’s report, S.A. stated she did not want even extended visits with Father and instead said that she only wanted two days with Father and then to return to Mother’s home. S.A.’s counsel reiterated that it would not be in S.A.’s best interest to separate her from her half-brother. The court considered Father’s section 388 petition, the parties’ arguments, and the Agency’s reports and found that Father had carried his prima facie burden. The court set an evidentiary hearing on Father’s section 388 petition.4 E. The evidentiary hearing on Father’s section 388 petition At the June 13, 2022 evidentiary hearing on Father’s section 388 petition, Father asked the court to modify its placement order and place S.A. with him in Arizona. He argued that he was available to care for S.A. and that S.A.’s current placement with Mother was a “fictitious placement” because of the condition that Mother could not leave the home unsupervised—which Father contended she had violated. Father further contended that he had a good relationship with S.A. and that S.A. was comfortable visiting him in Arizona. Father argued in the alternative that if S.A. was not removed from Mother, the court should modify the custodial arrangement so that Father would have S.A. during school breaks. 4 The juvenile court must liberally construe a section 388 petition in favor of its sufficiency for the granting of an evidentiary hearing. (In re Marilyn H. (1993) 5 Cal.4th 295, 309.) The petitioner need not show a probability of prevailing on the petition at a full hearing; rather, the petitioner need only make a prima facie showing to trigger the evidentiary hearing requirement. (In re Aljamie D. (2000) 84 Cal.App.4th 424, 432.) 6 The Agency opposed the petition’s request for a change in placement and referred the court to the Agency’s May and June 2022 status reports. The Agency’s May 2022 report stated S.A. had received weekly counseling services with her school counselor from September 2021 to January 2022. In April 2022, S.A.’s teacher suggested that S.A. would benefit from further counseling services. Mother agreed, and the Agency reported that S.A. was in the process of starting counseling services again with another school counselor. The report stated Mother acknowledged that she had interfered with Father’s visitation but indicated it was because she was anxious and worried about something bad happening to S.A., and that she struggled with being separated from S.A. The Agency’s June 2022 report indicated that S.A. initially said she would only like two-day visits with Father and then to return to Mother, but she later expressed an interest in spending extended time with Father if she could “sleepover with” paternal grandmother, whom she liked. The report also stated that earlier in June 2022, Mother started therapy and began taking medication for her anxiety disorder diagnosis. Like the Agency, Mother opposed Father’s petition, arguing that a change in placement was not in S.A.’s best interest. Mother pointed to the Agency’s reports showing that S.A. felt safe and comfortable with her, that S.A. wanted to stay with Mother, and that there had not been any safety concerns regarding S.A. being in Mother’s care. She stated that S.A. was close with her younger half-brother, who lived in the home, and that S.A. had not spent any substantial amount of time outside of Mother’s care. Mother further contended that, as indicated in the Agency’s addendum report, she was now in therapy to address her separation anxiety, was taking medication, and was responsive to the Agency. 7 S.A.’s counsel submitted on the changed circumstances prong of Father’s petition but opposed the petition on the ground that removing S.A. from her Mother and half-brother, with whom she was close, would not be in S.A.’s best interest. The court considered Father’s petition, the Agency’s reports—including its May 9, 2022 and June 13, 2022 addendum reports—and a psychological evaluation for Mother. As to Father’s contention that Mother had violated a placement condition by leaving the home unsupervised with S.A., the court reviewed the previous minute orders and stated that S.A. had been officially “placed” with Mother at the November 8, 2021 dispositional hearing and that no conditions were imposed on Mother at that time.5 The court acknowledged that Mother had “greatly disrupted” Father’s visitation with S.A. but observed that Mother was now taking medication and in therapy, which the court believed would “go a long way” toward resolving the visitation issue. 5 Father disputes this conclusion. He contends that during the detention hearing, the court conditioned S.A.’s detention with Mother on Mother not leaving the home unsupervised with S.A., among other conditions. Father posits that this condition was not merely a condition of detention but was also a condition required for placement with Mother because at the November 8, 2021 disposition hearing at which the court placed S.A. with Mother, the court incorporated “by reference the balance of the recommendations in the dispositional report.” In the Agency’s dispositional report, the Agency recommended S.A.’s placement with Mother “on the condition that [Mother] continues to follow court orders from [the] detention hearing.” As the court observed at the section 388 petition hearing, however, the minute order from the disposition hearing did not specify any particular conditions regarding placement with Mother. As discussed post, we need not resolve this discrepancy. Regardless of whether this condition applied at disposition, we conclude the juvenile court did not abuse its discretion in finding that changing S.A.’s placement would not be in S.A.’s best interest. 8 The court granted Father’s section 388 petition in part and denied it in part. Specifically, the court granted Father’s request for extended visits with S.A. but denied his request for placement. As to placement, the court found that Father had not met his burden to show a sufficient change in circumstances, and even if Father had established a sufficient change in circumstances, it would not be in S.A.’s best interest to place her with Father. Regarding Father’s request for extended visits, the court found there had been a change in circumstances—due to S.A.’s good relationships with Father and paternal grandmother—and that granting extended visits would be in S.A.’s best interest. Father appeals. II. DISCUSSION On appeal, Father challenges the portion of the juvenile court’s order denying his section 388 petition’s request for placement. Father contends the juvenile court abused its discretion by finding that Father did not carry his burden to show both that a significant enough change of circumstances and/or new evidence justified the change in placement and that placing S.A. with him in Arizona was in S.A.’s best interest. The Agency disagrees and contends that Father failed to show either of these requirements for his section 388 petition. A. Applicable law Section 388 allows a parent to petition the juvenile court to modify a placement order due to changed circumstances or new evidence. (In re Stephanie M. (1994) 7 Cal.4th 295, 317 (Stephanie M.).) To prevail on a section 388 petition, the parent petitioning for a change of the placement order—here, Father—generally must show by a preponderance of the 9 evidence both that (1) there is new evidence or changed circumstances warranting a change of the juvenile court’s prior placement order and (2) the proposed change is in the best interest of the child.6 (Ibid.) In evaluating a section 388 petition, the juvenile court may consider the evidence in the record as a whole. (See In re J.M. (2020) 50 Cal.App.5th 833, 847, citing In re Jamika W. (1997) 54 Cal.App.4th 1446, 1450-1451.) Not every change in circumstance or piece of new evidence can justify modification of a prior order. Rather, “[t]he change in circumstances or new evidence must be of such significant nature that it requires . . . modification of the challenged order.” (In re A.A. (2012) 203 Cal.App.4th 597, 612, italics added.) A sufficient “change in circumstances” also must be “substantial” or “material.” (In re N.F. (2021) 68 Cal.App.5th 112, 120; In re Ernesto R. (2014) 230 Cal.App.4th 219, 223.) Similarly, “new evidence” for section 388 purposes must be “material” and must be “evidence that, with due diligence, the party could not have presented at the dependency proceeding at which the order, sought to be modified or set aside, was entered.” (In re H.S. (2010) 188 Cal.App.4th 103, 105.) We review the juvenile court’s denial of a section 388 petition for abuse of discretion. (In re Aaliyah R. (2006) 136 Cal.App.4th 437, 447.) Thus, unless it is clearly established that the trial court made an arbitrary, 6 Here, the parties’ briefing on appeal is unclear about which burden they contend Father needed to satisfy to prevail on his section 388 petition. The parties sometimes refer to Father’s burden as by a preponderance of the evidence, but at other times, they refer to it as one of clear and convincing evidence. Regardless, we need not decide which burden applied here because we conclude that the juvenile court did not abuse its discretion by finding that Father did not make the required showing, even by the less-demanding preponderance of the evidence standard. 10 capricious, or patently absurd determination, the trial court’s ruling should not be disturbed on appeal. (Stephanie M., supra, 7 Cal.4th at 318.) In other words, there is no abuse of discretion “ ‘ “[w]hen two or more inferences can reasonably be deduced from the facts.” ’ ” (Id. at p. 319.) Rather, “ ‘ “[t]he appropriate test . . . is whether the trial court exceeded the bounds of reason.” ’ ” (Id. at pp. 318-319.) B. Analysis Father contends the juvenile court abused its discretion by denying his section 388 petition’s request for placement of S.A. We are not persuaded. As to the first requirement for relief under section 388, Father argues that he supported his petition with sufficient “new evidence” and/or evidence of “changed circumstances,” including evidence of: (1) Mother’s ongoing interference with Father’s visitation; (2) Mother’s unsupervised time outside the home with S.A., which Father contends violated a condition of S.A.’s placement with Mother; and (3) S.A.’s absences from school without a doctor’s note. Father argues that he carried his burden to show the second requirement for relief under section 388—that placing S.A. with Father was in S.A.’s best interest—because he showed the importance of S.A. having a relationship with both parents. We address these arguments in turn. Although Father does not develop his argument that he presented “new evidence” within the meaning of section 388, we agree with Father that some of his evidence concerned incidents that had not yet happened by the time of the juvenile court’s November 8, 2021 hearing during which it placed S.A. with Mother. For example, some of the incidents during which Mother interfered with Father’s visitation occurred in the days and months after the November 8, 2021 disposition hearing, as did some of S.A.’s absences from school without a doctor’s note. Thus, this constituted new evidence that, even 11 with due diligence, Father could not have presented at the disposition hearing. (See In re H.S. (2010) 188 Cal.App.4th 103, 105.) Nevertheless, Father did not carry his burden to show that placing S.A. with him was in S.A.’s best interest, and thus, we conclude the juvenile court did not abuse its discretion. Father contends that the importance of S.A. having a relationship with both parents—which Father claims can only be accomplished by placing S.A. with him—shows that the requested placement change was in her best interest.7 But, for several reasons supported by the record on appeal, Father failed to show that a complete change in S.A.’s placement was in her best interest. First, Agency reports and testimony indicated S.A.’s preference to remain with Mother, that S.A. had never lived apart from Mother, and that S.A. had a close relationship with her half- brother (who also lived with Mother). Agency reports also stated that S.A. had friends at her school and in her neighborhood, that her support network was in San Diego, that she previously participated in therapy at her school, and that she was in the process of doing so again.8 Simply put, Father did not show by a preponderance of the evidence that uprooting S.A. from her Mother and half-brother, friends, school, therapy, and support network in 7 At the evidentiary hearing on Father’s section 388 petition, the juvenile court acknowledged the importance of promoting S.A.’s relationship with Father and the paternal family by granting Father extended visits with S.A. 8 The juvenile court also considered that Mother had recently started therapy, which the court believed could improve Mother’s ability to co-parent. Hopefully, this positive development will encourage Mother to participate in co-parenting going forward, particularly because co-parenting can only benefit S.A. 12 California to move to Arizona with Father was in her best interest.9 Thus, the juvenile court did not “exceed the bounds of reason” by finding that placing S.A. with Father was not in S.A.’s best interest. (Stephanie M., supra, 7 Cal.4th at 318.) Accordingly, because we conclude that the juvenile court’s denial of Father’s section 388 petition’s request for placement was not an abuse of discretion, we affirm. III. DISPOSITION The order is affirmed. IRION, J. WE CONCUR: McCONNELL, P. J. HUFFMAN, J. 9 We are not persuaded by Father’s additional contention that the juvenile court erred because S.A.’s best interests are the functional equivalent of what is “not detrimental.” Father is mistaken. In contrast to the authority cited by Father, the present appeal concerns a placement determination, not a visitation determination, and the court did not remove S.A. from Mother. (Cf. In re Randalynne G. (2002) 97 Cal.App.4th 1156, 1170 [after child was removed from both parents, holding that an absence of detriment was equivalent to the child’s best interests when determining post- guardianship visitation orders].) 13	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487756/	Filed 11/18/22 Marriage of Wu and Zhai CA6 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT In re the Marriage of HARRY WU and H048885 XIAOMEI ZHAI. (Santa Clara County __________________________________ Super. Ct. No. 2011-6-FL-006290) HARRY WU, Respondent, v. XIAOMEI ZHAI, Appellant. This appeal arises from the dissolution of marriage of respondent Harry Wu and appellant Xiaomei Zhai. Zhai appeals from the trial court’s January 21, 2021, judgment following trial on September 1, 2020. Zhai contends the trial court erred by (1) refusing Zhai’s request to continue the trial so she could retain new counsel; (2) disregarding relevant testimony and evidence regarding Zhai’s mental health and efforts to find employment; and (3) neglecting to consider the admissibility of Zhai’s evidence regarding Wu’s fraudulent statements regarding community property assets. We affirm the trial court’s order. I. BACKGROUND Wu and Zhai were married for approximately 21 years. They married in October 1989 and separated in January 2011 but continued to cohabit. Wu petitioned for dissolution in 2011 and filed two amended petitions in 2012. He remarried in 2013 after obtaining a default judgment in November 2012. The 2012 default judgment terminated the court’s jurisdiction to award Wu spousal support but reserved all other issues of support and property division; it also provided for joint legal and joint physical custody of the parties’ two minor children, specifying no parenting schedule because the parties continued to live together. Zhai did not appear in the case until March 2019, when (with the assistance of her present appellate counsel) she filed a request for order alleging that Wu had kept her in the dark regarding the 2012 dissolution proceedings until late 2015, when he disclosed his remarriage, eventually moving out of the marital residence in early 2016. Zhai acknowledged, however, that on two separate occasions in 2012, strangers had hand- delivered papers to her, which she did not open or read. Zhai did not seek to set aside the judgment but requested sole legal and physical custody of their child; child support and spousal support retroactive to November 2012; an order that Wu continue paying the mortgage on the home she occupied; equal division of the real properties she conceded were community property; confirmation of other properties as her separate property by virtue of unspecified agreements. After Zhai’s first attorney withdrew in September 2019, Zhai remained unrepresented for several months. In February 2020, while Zhai was representing herself, the court set the matter for a May 2020 trial, with a one-day time estimate. In setting the trial date, the court found that Zhai had not complied with the court’s January 2020 order that she serve her Preliminary Declaration of Disclosure within 20 days. 2 Zhai retained her second attorney, Wendy Lun, who first appeared in the case within a week before the May 2020 trial date. The day before the scheduled trial, Zhai filed an ex parte request seeking emergency relief of some kind not apparent on this record. The trial did not go forward as originally scheduled. The next scheduled trial date was August 5, 2020. Zhai, however, discharged her second attorney the week before. On the day set for trial, the matter was continued again to September 1, 2020. Zhai retained her third attorney, James Hann, in mid-August 2020. In late August 2020, Zhai filed an ex parte request to continue the trial. Three days before trial, Hann withdrew as counsel. On September 1, 2020, the court denied the request to continue the trial, finding that Zhai had not demonstrated good cause, and proceeded with the trial. Zhai therefore represented herself, assisted by two Mandarin-language court interpreters. By the time of trial, Wu and Zhai had one minor child, then age 13. Between them, Wu and Zhai owned three real properties—a house in Santa Clara, CA, and two properties in Boise, ID. Early in the trial, the court explained to Zhai: “[Wu] is going to present his evidence. . . . [¶] When [Wu] finishes that, you have the opportunity to cross-examine [him], to ask them questions as well. When you are done with that, you have the opportunity to present evidence.” Represented by counsel, Wu proceeded by offer of proof consisting largely of a series of proposals for the division or disposition of each asset, with some supporting representations as to the date, time, manner, or funds by which the property was acquired. Wu’s offer of proof included that Zhai had persisted in her refusal to serve a code- compliant Preliminary Declaration of Disclosure or Final Declaration of Disclosure— 3 despite the requirements of Family Code section 21001 et seq. and express court orders to do so—and failed to respond to form interrogatories. After Wu’s counsel completed her presentation, the court explained to Zhai: “You have the right to cross-examination of [Wu]. You also have the right to present evidence. [¶] The Court is mainly interested in what you have by way of evidence. That evidence can be your testimony or it can be documents – whatever you want. But I’m going to ask that in order for me to make a ruling, I want to clearly understand your side of the story. So I want you to go down the same categories that [Wu’s counsel] did.” The court explained to Zhai what it meant by “cross-examination,” to which Zhai stated: “I don’t have to question first. I just want to present my facts.” The court then asked Zhai to first address the division of the parties’ real property. The court suggested to Zhai that she proceed by addressing “the same sequence of issues” that Wu’s counsel had, adding “I want to hear from you on each and every one of those areas.” The court suggested she begin with the parties’ real properties. After Zhai began by addressing the limited square footage of the Santa Clara house and the fact that the parties’ sons also lived there with her after Wu left in 2016, the court attempted to redirect her to Wu’s proposal for its sale and equal division of the proceeds. The court explained that “[w]hat we have to do today is decide what’s going to happen to the real property, the bank accounts, everything.” The court then asked Zhai about the parties’ specific properties and asked whether she agreed or disagreed with Wu’s proposed disposition of each. Zhai repeatedly stated she disagreed but provided no reason for her disagreement other than to assert that, if the court reviewed her evidence, he would understand. When the court asked about her evidence, Zhai responded that she would prove Wu’s “deceit in the divorce.” The court observed that Zhai was holding up 1 Undesignated statutory references are to the Family Code. 4 a piece of paper and asked her to identify it; Zhai answered that it was a grant deed2 from January 3, 2016, in which Wu had reportedly characterized the parties as “husband and wife.” The court noted that this was not relevant to whether the property should be sold and equally divided. The court again explained: “I am giving you the opportunity to say that the division of assets is not fair to you, if you have any reason to say that. . . . [¶] [Wu] has made a comprehensive set of proposals for orders on how all of these assets are to be divided between you and [Wu]. If you have a reason why I should not divide the assets . . . in accordance with [his] proposal, tell me the reasons right now. [¶] If you do not provide me any reasons not to do it, I would approve [his] proposed division. And I would need something more specific than vague allegations of fraud.” The court further explained: “The law requires that assets be equally divided when the marriage is over and the assets are to be distributed. . . . It appears to me that what [Wu] has proposed is absolutely an equal division of assets. If you believe it is not an equal division of assets, you need to tell me that and explain why you believe that. You failed to do that so far.” Zhai responded by restating her grievances with her prior counsel and asserting generally “that’s why I didn’t know I was supposed to present this evidence.” Zhai said: “What I have here is all the evidence. I beg your Honor to give me the opportunity to present to you all the materials. . . . [¶] . . . [¶] Read the whole thing.” She did not describe what her materials consisted of, but she later stated that she “object[ed] to everything, every proposal” of Wu’s. The trial court then questioned Zhai about her work history. Zhai initially testified that she had not worked since March 2020, due to the pandemic, and had only unemployment insurance income, but she later acknowledged that as of her filing of an Income and Expense Declaration in May 2020, she was working 24 hours per week at 2 Zhai did not identify what property was the subject of the grant deed. 5 $15 per hour. Asked what efforts she had made to find work, Zhai answered only that she was “looking . . . but everything is closed.” Even before the pandemic, Zhai had been working only part time. Asked how she was meeting her expenses—estimated to be $6,839 per month in March 2020—Zhai cited only her unemployment insurance; temporary spousal support at the time was $2,519. After a recess, and the court’s query whether she had any further evidence on the subject of support, Zhai reiterated that she needed more time, because she was not an attorney, did not have legal representation, and did not understand English. When Zhai offered no more evidence or testimony, the court allowed Wu’s counsel to begin cross- examination. But after counsel’s second question, Zhai announced: “Right now I don’t want to answer any questions from [Wu’s] attorney, because . . . I am not familiar with the law.” The trial court then turned to the parties’ documentary evidence. As each of Wu’s 15 exhibits was marked for identification, the trial judge asked Zhai if she objected to its admission. Zhai objected that Wu and his counsel were lying, and all their evidence fabricated. The court observed that Zhai had never opened the binder of exhibits Wu’s counsel had provided her. Zhai then asked the court why it was “consider[ing] only evidence presented by my ex-husband but not all the true evidence?” The court responded: “There’s nothing there to respond to. I would rule on the exhibits that are provided.” After ruling on the admissibility of Wu’s exhibits, the court told Zhai, “This is your opportunity to present [documentary] evidence . . . .” In lieu of documents, Zhai returned to the subject of Wu’s conflicting characterization of his marital status in 2013 and the 2016 grant deed. When Wu’s counsel objected on the ground that the date of separation had previously been adjudicated, the trial court explained to counsel that, despite a lack of coherence in Zhai’s presentation, “I want to give her an opportunity to go ahead and present to the Court whatever she wants. [¶] I am going to allot 6 approximately 15 minutes for this purpose. She may use that 15 minutes in any manner that she wants, and then the Court is going to move on and make rulings. [¶] But during this period of time, I am going to not strictly follow the rules of evidence that would preclude everything that she is saying. I’m going to give her some leeway just as a matter of courtesy.” At the conclusion of Zhai’s final comments, the trial court proceeded to make findings. The court agreed with Wu that it would be futile to further order code- compliant Preliminary and Final Declarations of Disclosure from Zhai. The court ordered that two of the parties’ real properties be sold, with the proceeds held in trust pending resolution of reimbursement claims against those properties and the balance equally divided, and that a third property be confirmed as Wu’s sole and separate property because he purchased it subsequent to the divorce. The court ordered division of the different financial funds as requested by Wu. Zhai received the educational funds, the bank accounts in her name, and the National Life insurance; Wu received the bank accounts in his name, his 401K, and the Fidelity rollover IRA. With an equalizing payment from Zhai to Wu to compensate for the excess values of the accounts awarded to Zhai, the court’s division of assets resulted in a roughly equal split, with each party to receive assets valued in the hundreds of thousands. The court assessed Watts3 charges payable to Wu for Zhai’s post-separation use of the marital residence, in addition to Epstein4 credits for Wu’s post-separation payments of mortgage principal. The trial court found that Zhai’s conduct was “consistent with actively concealing community assets and bank accounts in her name” and that she had failed to disclose information regarding those in violation of the Family Code. It also found a “consistent pattern by [Zhai] to obstruct the efficient administration of [the] case and block the 3 In re Marriage of Watts (1985) 171 Cal.App.3d 366. 4 In re Marriage of Epstein (1979) 24 Cal.3d 76. 7 attempts for the economic resolution of the family law issues . . . in [the] case.” It therefore ordered her to pay section 271 sanctions in the amount of $20,000 to Wu. For the purpose of guideline child support, the court found that Zhai earned a minimum of $40,000 each year from 2011 to 2018. It therefore imputed income to Zhai of $40,000 per year. The court noted the particular difficulty of determining spousal support for this long-term marriage. It addressed each of the factors in section 4320. In evaluating the factors, the court found Zhai had marketable skills to work in an office setting. The court also found the parties were both in good health with no significant health issues that would impair earning capacity. The court rejected Wu’s request that spousal support be set at zero or no more than $1,000 per month, and further rejected his request to exercise the court’s reserved jurisdiction to retroactively modify temporary guideline child and spousal support based on the income it was prospectively imputing to Zhai. Instead, it ordered long-term spousal support initially at $2,000 per month in year one, $1,500 per month in year two, and $1,000 per month in years three through six. The trial court issued its written judgment on January 21, 2021. Zhai timely appealed. 8 II. DISCUSSION5 Zhai contends the trial court made three errors: (1) denying Zhai’s request for a continuance to retain a fourth attorney; (2) disregarding relevant testimony and evidence regarding Zhai’s mental health and efforts to find employment; and (3) neglecting to consider the admissibility of Zhai’s evidence regarding Wu’s fraudulent statements regarding community property assets. Under our deferential standard of review, we are unable to conclude that the trial court abused its discretion in denying Zhai’s late request to continue the trial or in its management of Zhai’s inability to present her evidence. A. Self-Represented Litigants, the Record on Appeal, and Standard of Review The California Supreme Court has recognized the challenges facing self- represented litigants in the trial court, particularly in “ ‘[d]omestic relations litigation, one of the most important and sensitive tasks a judge faces . . . .’ [Citation.]” (Elkins v. Superior Court (2007) 41 Cal.4th 1337, 1366 (Elkins).) The trial court is expected to both “dispose of matters promptly and efficiently” while also “provid[ing] all litigants the opportunity to have their matter fairly adjudicated in accordance with the law.” (In re Marriage of Knox (2022) 83 Cal.App.5th 15, 41, fn. 14, italics omitted (Knox).) “ ‘[W]hen a litigant is self-represented, a judge has the discretion to take reasonable steps, appropriate under the circumstances and consistent with the law and the canons, to enable the litigant to be heard. [Citation.]’ ” (Ibid., italics omitted.) 5 We deny Wu’s motion to augment the record with the (1) Petitioner’s Trial Brief filed on August 5, 2020, and (2) the Reporter’s Transcript of Proceedings from May 12, 2020. The trial brief is already included in the Respondent’s Appendix. Wu seeks to augment with the transcript on the ground that a deputy district attorney had appeared at the hearing and disputed Zhai’s claimed inability to speak English. The deputy district attorney’s statements are hearsay, and her opinion of Zhai’s English proficiency appears to be based on further hearsay from a district attorney investigator. (See In re Vicks (2013) 56 Cal.4th 274, 314 [judicial notice of documents does not extend to the truth of included hearsay statements].) 9 Yet the court is also required “ ‘when engaging in such activities to avoid becoming an advocate and stepping out of the judicial role.’ [Citation.]” (Knox, supra, 83 Cal.App.5th at p. 41, fn. 14.) Self-represented litigants “are held to the same standards as attorneys.” (Kobayashi v. Superior Court (2009) 175 Cal.App.4th 536, 543; see also Burnete v. La Casa Dana Apartments (2007) 148 Cal.App.4th 1262, 1270 [“self- represented litigants are generally entitled to no special treatment”].) “[M]ere self- representation is not a ground for exceptionally lenient treatment.” (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 984.) Otherwise, “exceptional treatment of parties who represent themselves would lead to a quagmire in the trial courts, and would be unfair to the other parties to litigation.” (Id. at p. 985.) On appeal, it is well settled that “ ‘[a] judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown.’ ” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) The appellant bears the burden of providing an adequate record. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295.) Where the appellant fails to do so, a reviewing court is required to resolve the matter against the appellant. (Id. at pp. 1295-1296.) As “a natural and logical corollary to [these] fundamental principles of appellate review,” we “infer the trial court made all factual findings necessary to support the judgment.” (Fladeboe v. American Isuzu Motors, Inc. (2007) 150 Cal.App.4th 42, 58 (Fladeboe).) Trial courts also enjoy broad discretion as to the specific types of decisions Zhai challenges on appeal. (See Schlothan v. Rusalem (1953) 41 Cal. 2d 414, 417 [“The granting or refusal of a continuance is a matter of discretion with the trial court and its ruling will not ordinarily be disturbed.”]; In re Marriage of Grimes & Mou (2020) 45 Cal.App.5th 406, 424 [“ ‘ “ ‘appellate courts must act with cautious judicial restraint’ ” ’ ” in review of trial courts’ “ ‘ “ ‘broad discretion’ ” ’ ” in ordering spousal support]; In re Marriage of Barth (2012) 210 Cal.App.4th 363, 375 (Barth) [imputation 10 of income available for child support “is also reviewed for abuse of discretion”]; People v. Dworak (2021) 11 Cal.5th 881, 895 [“We review the trial court’s decision to admit or exclude evidence for abuse of discretion.”].) We review for substantial evidence the trial court’s express or implied factual findings. (See, e.g., In re Marriage of LaBass & Munsee (1997) 56 Cal.App.4th 1331, 1337.) And even where the record discloses error, an appellant has the burden of establishing a reasonable probability of a more favorable result to the appellant, absent the error. (Cal. Const., art. VI, § 13; Soule v. General Motors Corp. (1994) 8 Cal.4th 548.) With these principles in mind, we turn to the merits of Zhai’s claims. B. Request to Continue Trial It is well established that, “[t]o ensure the prompt disposition of civil cases, the dates assigned for a trial are firm. All parties and their counsel must regard the date set for trial as certain.” (Cal. Rules of Court, rule 3.1332(a).) “Continuances are granted only on an affirmative showing of good cause requiring a continuance. [Citations.] Reviewing courts must uphold a trial court’s choice not to grant a continuance unless the court has abused its discretion in so doing.” (In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 823.) The record reflects that Zhai was ill equipped to proceed at the September trial date, but she cites no authority for the proposition that it is her actual readiness that must control, rather than the existence of the requisite good cause for her lack of readiness. Assuming that the basis for the continuance request was that Zhai’s counsel needed additional time to prepare for trial, as Zhai contends on appeal, we are nonetheless unable to conclude that the trial court abused its discretion in denying the request, absent an adequate showing of Zhai’s diligence to that point. Because Zhai did not include the request for the continuance in the appellate court record, we do not know what showing Hann made in his supporting declaration, if any, as to the reasons Zhai would be unable to proceed as scheduled. “ ‘[I]f the record is inadequate for meaningful 11 review, the appellant defaults and the decision of the trial court should be affirmed.’ ” (Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416; Foust v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th 181, 187.) At trial, Zhai faulted her prior counsel for her predicament, asserting that “[e]ven with the trial days away, neither Lun nor Hann prepared basic materials such as a trial brief or exhibit binder for her presentation.” The record, however, does not compel such a conclusion. Lun first appeared in the case less than a week before the initially set May trial date, and Zhai discharged her a week before the August trial date and over a month before the September trial date. That Lun had not yet prepared a trial brief or exhibit binder by the time of her discharge did not compel the conclusion she was dilatory: Wu’s counsel, after all, did not submit Wu’s trial brief or exhibit list until the August trial date itself. Zhai then delayed retaining successor counsel until two weeks before the September trial, leaving him little time to familiarize himself with the history of the case and the evidence which Zhai maintains she possessed. There is accordingly nothing in the record that substantiates Zhai’s assertion “that [counsel] had been absent in her case to the point of jeopardizing her interests.” To the extent the trial court implicitly found no basis to fault either attorney for Zhai’s lack of readiness, we discern no basis in the record to question that finding. Indeed, given this tumult in Zhai’s representation, the trial court could have determined that it was Zhai’s late decision to fire Lun and even later decision to retain Hann that impeded her readiness. The trial court could likewise have determined that Zhai’s complaints regarding Lun and Hann were unreasonable, or even that these complaints furthered a pattern of obstruction, delay, or denial suggested by her failure— while representing herself—to comply with statutory or judicial directives to serve her Preliminary Declaration of Disclosure or to respond to form interrogatories. 12 We note as well that Zhai was representing herself in February 2020, when the financial issues raised by her 2019 request for order were set for trial.6 Zhai therefore had more than six months to prepare for the litigation she had initiated—after having known of the dissolution proceedings since 2015, by her account. We acknowledge that she was entitled to rely upon the assistance of counsel for the period that she was represented, but Zhai cites no authority for the proposition that representation at times by counsel absolved her of all responsibility to be ready for trial or to at least demonstrate her own diligence. As a general principle, “[f]or our justice system to function, it is necessary that litigants assume responsibility for the complete litigation of their cause during the proceedings.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 214.) On this procedural history, we are unable to fault the trial court to the extent it doubted that granting Zhai additional time would lead to readiness. In the cases Zhai cites in her opening brief to support her claim of good cause for a continuance, the reason for the delay was the attorney’s serious illness. (Lerma v. County of Orange (2004) 120 Cal.App.4th 709, 711 [admission to hospital for removal of cancerous bladder]; Hernandez v. Superior Court (2004) 115 Cal.App.4th 1242, 1244 [counsel’s physical illness its debilitating effects culminating in death during the final stage of litigation].) It was not, however, illness that made counsel unavailable to Zhai, but Zhai’s election to discharge her counsel a month before trial, without a readily available successor. Because the record does not establish that Zhai met her burden of establishing good cause for a continuance, we are unable to conclude that the trial court abused its discretion in denying the request. 6 Although the trial court alluded to the COVID-19 pandemic having delayed the proceedings, it is not otherwise apparent from the record Zhai has designated what other factors, if any, contributed to the delay to September 2020. 13 C. Evidence Regarding Mental Health and Efforts to Find Employment A trial court issuing an order for spousal support is vested with broad discretion to evaluate the factors identified in section 4320 “ ‘ “with the goal of accomplishing substantial justice for the parties in the case before it.” ’ ” (In re Marriage of Ciprari (2019) 32 Cal.App.5th 83, 108.) Although child support is subject to a mandatory uniform guideline, “[t]he court may, in its discretion, consider the earning capacity of a parent in lieu of the parent’s income . . . .” (Fam. Code, § 4058, subd. (b)(1); see also Barth, supra, 210 Cal.App.4th at p. 375.) Zhai contends that the trial court abused this discretion by (1) failing to receive or adequately consider evidence of her depression, and (2) giving insufficient weight to her current actual earnings, as opposed to her minimum earnings from 2011 to 2018. She does not meet her burden of establishing error on this record. 1. Mental Health Among the factors a trial court shall consider in ordering spousal support is the “age and health of the parties.” (Fam. Code, § 4320, subd. (h).) Here, the trial court found that “both parties have good health at the present time with no significant health issues that would impair earning capacity.” Zhai argues that she has chronic and debilitating mental health issues that hamper her ability to support herself, and that the trial court failed to consider her evidence on this point. Her claim on appeal relates principally to what she contends was the trial court’s erroneous failure to admit a doctor’s report she represents would corroborate her testimony about her mental condition. During her allotted time, Zhai repeatedly alluded to evidence in her possession, typically without identifying what it consisted of. At the conclusion of her argument, Zhai mentioned for the first time that she had a doctor’s report. The trial judge did not respond other than to state that Zhai had adequate time to present her evidence.7 Zhai did 7 The reporter’s transcript states that Zhai had “adequate evidence” to present her evidence. This appears to be either a misstatement or an error of transcription. 14 not ask that the report be admitted into the record. On appeal, she states that she did not understand procedural rules, and therefore had no way to request the admission into evidence of the exhibits that she brought with her. “[I]t [is] ethically permissible for the family court to explain . . . the procedures for the admission of a document into evidence. [Citation.]” (Knox, supra, 83 Cal.App.5th at p. 41, fn. 14.) Zhai cites to no authority, however, for the proposition that the trial court committed error by omitting to do so here. On this record, the trial court was free to conclude that the report, though relevant, was hearsay and that Zhai would not be able to properly lay a foundation for its admission. Even where litigants are self-represented, “it is well settled that the ordinary rules of evidence apply in marital dissolution trials.” (Elkins, supra, 41 Cal.4th at p. 1362.) Moreover, to the extent that Zhai nonetheless believed that it should be admitted, she “needed to move to do so or seek a stipulation for admission.” (In re Marriage of Shimkus (2016) 244 Cal.App.4th 1262, 1270 (Shimkus).) Because Zhai never asked that the doctor’s report (or any other documents) be admitted, Wu’s counsel never made an objection, and the trial court never ruled on admissibility. And because Zhai never properly identified her documentary evidence, it is not part of the appellate record. “Where exhibits are missing, we will not presume they would undermine the judgment.” (Western Aggregates, Inc. v. County of Yuba (2002) 101 Cal.App.4th 278, 291.) The trial court, it is true, could have been more proactive in explaining to Zhai the mechanics of marking and identifying an exhibit and offering it into evidence. It certainly had the discretion to inquire about the document from Zhai’s doctor, to direct Zhai as to the process of laying a foundation for it to be admitted into evidence, or to examine the document (subject to Wu’s inspection) to ascertain its admissibility or ask foundational questions. (See Knox, supra, 83 Cal.App.5th at p. 41, fn. 14.) Although other reasonable trial judges might well have exercised their discretion differently, on appeal we do not substitute our judgment for that of the trial court, and we do not find the 15 court abused its discretion in abstaining from further embroilment in an effort the trial court may legitimately have found to be fruitless. The trial court did hear Zhai’s oral testimony regarding her depression, her visits to doctors and psychologists, and her medication. Under the doctrine of implied findings, however, we infer the trial court made all factual findings necessary to support the judgment. (See Fladeboe, supra, 150 Cal.App.4th at p. 58.) The trial court was not required to credit Zhai’s testimony: based on Zhai’s earnings from late 2015 to 2018— after she reportedly learned of the 2012 default judgment and Wu’s remarriage for the first time, and largely after Wu left the marital residence—the court could legitimately have concluded that it was not the emotional trauma of the parties’ dissolution but, at most, the immediate demands of the present litigation that were temporarily impacting Zhai’s actual earnings. To the extent Zhai on appeal suggests that public policy or the trial court’s unwillingness to further assist her in the presentation of her evidence warrants reversal without a showing of prejudice, the weight of authority is against her. “[A] judgment may not be reversed for the erroneous exclusion of evidence unless ‘the substance, purpose, and relevance of the excluded evidence was made known to the court by the questions asked, an offer of proof, or by any other means.’ [Citations.] This rule is necessary because, among other things, the reviewing court must know the substance of the excluded evidence in order to assess prejudice.” (People v. Anderson (2001) 25 Cal.4th 543, 580; Evid. Code, § 354, subd. (a).) There can be no reversal “unless an error was prejudicial and a different result was likely in the absence of the error. Prejudice is not presumed.” (Shimkus, supra, 244 Cal.App.4th at p. 1269.) 2. Employment The trial court imputed an income of $40,000 to Zhai for purposes of calculating guideline child support and evaluating the section 4320 criteria for long-term spousal support. This was based on Wu’s evidence that Zhai had made a minimum of $40,000 16 per year from 2011 through 2018, and that her reported income declined only when Zhai filed her 2019 request for order. The court also found that Zhai had not complied with her duty to make reasonable efforts to be self-supporting in a reasonable period of time. In the trial court’s exercise of its broad discretion to set long-term spousal support, “[w]here a factual basis exists for imputing income based on earning capacity, . . . there is legal authority to do so.” (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 301.) In calculating child support, “[i]f a parent is unwilling to work despite the ability and the opportunity, earning capacity may be imputed.” (In re Marriage of LaBass & Munsee (1997) 56 Cal.App.4th 1331, 1338.) Zhai argues that the record shows that she was unable to earn her historical minimum annual salary of $40,000 due to circumstances beyond her control. She relies instead on her most recent actual monthly earnings of $1,000, “a figure that Wu did not contradict.” But she fails to support her assumption that her actual income—rather than the income she reasonably could be making—should be dispositive. The trial court found that Zhai “has marketable skills for which there is a job market and she does not require further education, training, or retraining” and that “[Zhai’s] tax records indicate that [Zhai] has marketable skills to work in an office setting that is consistent with the amount of income that the Court has imputed to [Zhai] . . . .” This finding was supported by substantial evidence. Wu’s Exhibit 5, admitted into evidence at the trial, included Zhai’s income and expense declarations, which showed that she has a bachelor’s degree and is a licensed life insurance agent. Zhai cites her limited English fluency as a factor reducing her earning capacity, but at trial she did not rebut Wu’s evidence that Zhai had worked in customer service, in sales, and as a teacher, and had historical earnings of $40,000 for the seven years prior to her 2019 request for support orders. On this record, the trial court had evidence before it regarding Zhai’s qualifications, work history, and earnings on which it could reasonably rely in 17 determining that Zhai had the ability and opportunity to work. Zhai gave the court no reason to give more weight to the fact that she was not actually working than to the years of her work history. We conclude the court did not abuse its discretion by imputing that income to her. D. Admissibility of Evidence Regarding Fraudulent Statements Zhai contends that the trial court failed to admit evidence at trial pertaining to what she characterizes as Wu’s extrinsic fraud. She points to her claim at trial that Wu committed tax fraud, by claiming their child as a dependent and nominally attributing all community rental income only to Zhai in his preparation of her 2018 tax return, which increased her tax liability. She also states that she testified to Wu’s entitlement to retirement funds with the Canada Pension Plan, which he denied. Zhai’s contentions—taken at face value—do not describe extrinsic fraud. Extrinsic fraud is a ground for relief from an otherwise final judgment. (Caldwell v. Taylor (1933) 218 Cal. 471, 477.) But “[f]raud is extrinsic where the defrauded party was deprived of the opportunity to present their claim or defense to the court, that is, where they were kept in ignorance or in some other manner, other than from their own conduct, fraudulently prevented from fully participating in the proceeding.” (In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1068; see also In re Marriage of Jones (1987) 195 Cal.App.3d 1097, 1102 [“Extrinsic fraud has been found when parties, in good faith, rely upon the fraudulent representations of their spouse resulting in their not acting to protect their interests.”].) Zhai has not sought to set aside the 2012 default judgment, which merely reserved to a future date the characterization, valuation, and division of the parties’ property as well as the propriety of child and spousal support payable by Wu to Zhai. Zhai does not contend that any of the fraudulent activity she attributes to Wu prevented her from presenting her claims and defenses at the September 2020 trial. 18 To the extent Zhai’s allegation as to community rental income or the concealment of a pension benefit describe either a breach of fiduciary duties under section 1100 et seq. or merely a claim for her 50 percent interest in the 2018 rental income, Zhai never attempted to quantify for the trial court the relief she sought or rebut any inference suggested by Wu’s evidence that rental income had reverted to her by paying down her share of community expenses or her separate expenses. Coupled as it was with her related claim of Wu’s tax fraud for claiming a dependent exemption for their remaining minor child, the trial court could properly construe Zhai’s complaint about the rental income to be about assailing Wu’s credibility as a witness (or parent) and not a claim for recovery of a half-interest in community income Zhai was on notice of at least as of her 2018 tax filing. As for an interest in a Canadian pension, Zhai did not testify that Wu had a Canadian pension or seek to admit evidence of such an asset. Rather, she surmised that he might have such an interest, by virtue of his having lived in Canada for 10 years. Because she had no competent evidence of such an asset, she asked the trial court to order Wu “to produce evidence” of his Canadian tax returns. This again the trial court was entitled to interpret as a plea to continue the remainder of the trial. During trial Zhai repeatedly made assertions of fraud by Wu, but she provided no reasoned or factual basis to support these assertions. At one point, the trial court acknowledged her fraud arguments and gave her a chance to explain: “What you are telling me is that you have brought allegations of fraud that you have not backed up. [¶] I am giving you the opportunity to say that the division of assets is not fair to you, if you have any reason to say that.” In response, Zhai provided no specific argument or evidence, other than to assert that she had “all the evidence” but that her prior counsel had not adequately assisted her in preparing to present “all the materials.” In this context, we understand Zhai’s entreaty for an “opportunity to present to you all the materials” to be a renewed request to continue to the trial, rather than a proffer of specific evidence. 19 There is nothing in the trial court record, or in the record on appeal, that would allow us to conclude that there was fraud or that the trial court abused its discretion by somehow refusing to admit evidence of fraud that was never actually proffered. The only document Zhai ever identified as the trial court attempted to focus her presentation was a 2016 grant deed in which Wu reportedly identified the parties as husband and wife in connection with the property at issue. Nothing in Zhai’s proffer substantiates the assertion of fraud: the parties in fact continued to hold real property as husband and wife as of the September 2020 trial date, the very purpose of which was to unwind the community estate. Even assuming that other, unidentified evidence in Zhai’s possession would have substantiated her claim that Wu deceived her regarding his remarriage and the 2012 default judgment, the trial court was within its discretion to conclude that nothing in Zhai’s claims as stated in her 2019 pleadings—prepared with the assistance of her current counsel—identified any basis by which we could discern prejudice. She does not dispute that Wu paid for improvements to the Santa Clara community residence that she occupied without him, and that this payment was in 2016—after the date she acknowledges actual notice of the 2012 default judgment, and after the parties’ physical separation. There is no dispute that the grant deed post-dated Zhai’s knowledge of the 2012 default judgment and the parties’ physical separation. To the extent Zhai claims extrinsic fraud and breach of fiduciary duty, nothing in the record establishes that Wu or the trial court were on notice of these claims. III. DISPOSITION The judgment is affirmed. Wu is entitled to his costs on appeal. 20 LIE, J. WE CONCUR: GROVER, ACTING P.J. DANNER, J. Wu v. Zhai H048885	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487753/	NOTICE The text of this opinion can be corrected before the opinion is published in the Pacific Reporter. Readers are encouraged to bring typographical or other formal errors to the attention of the Clerk of the Appellate Courts: 303 K Street, Anchorage, Alaska 99501 Fax: (907) 264-0878 E-mail: corrections@akcourts.gov IN THE COURT OF APPEALS OF THE STATE OF ALASKA JEREMIAH MIGUEL PEREZ, Court of Appeals No. A-13666 Petitioner, Trial Court No. 3AN-19-04280 CR v. OPINION STATE OF ALASKA, Respondent. No. 2736 — November 18, 2022 Petition for Review from the Superior Court, Third Judicial District, Anchorage, Kevin M. Saxby, Judge. Appearances: John M. Murtagh, Attorney at Law, Anchorage, under contract with the Office of Public Advocacy, for the Petitioner. Hazel C. Blum, Assistant Attorney General, Office of Criminal Appeals, Anchorage, and Clyde “Ed” Sniffen Jr., Acting Attorney General, Juneau, for the Respondent. Before: Allard, Chief Judge, and Wollenberg and Harbison, Judges. Judge ALLARD, writing for the Court. Judge HARBISON, concurring. In May 2019, an Anchorage grand jury indicted Jeremiah Miguel Perez and eight co-defendants on an eighty-three count indictment alleging a series of felony property crimes. At Perez’s arraignment, the trial court appointed the Alaska Public Defender Agency to represent him. Despite this appointment, the Public Defender Agency did not assign an individual attorney to represent Perez for over five months. During those five months, the court repeatedly continued Perez’s case and tolled the Alaska Criminal Rule 45 speedy trial clock at the request of various assistant public defenders who were in the courtroom when the court called Perez’s case. Three of those public defenders noted that there was a potential conflict of interest in the Agency’s representation of Perez because the Agency had also been appointed to represent some of Perez’s co-defendants. Over time, the Agency withdrew from representing Perez’s co-defendants so that ultimately the Agency was only representing Perez. In October 2019, an individual assistant public defender finally filed an entry of appearance in Perez’s case. Approximately a month later, the Public Defender Agency moved to withdraw, citing a conflict of interest, and a contract attorney with the Office of Public Advocacy entered his appearance. That attorney subsequently filed a motion to dismiss under Criminal Rule 45. In the motion, the attorney asserted that the various assistant public defenders who had requested continuances in Perez’s case were not authorized to do so because of the “obvious” conflict of interest caused by the Agency’s simultaneous representation of multiple co-defendants. The attorney argued that the trial court had therefore erred in tolling Perez’s Rule 45 time based on those continuance requests, and that Perez’s case should be dismissed with prejudice because the Rule 45 time for a speedy trial had otherwise run. The trial court denied the motion to dismiss, finding that the various public defenders had apparent authority to waive Rule 45 time on Perez’s behalf. This petition for review followed. Because the record in this case affirmatively indicates that the tolling of Rule 45 was done with Perez’s knowledge and consent, we conclude that the motion to dismiss was properly denied. We nevertheless granted this petition and are issuing this –2– 2736 decision to ensure that trial courts recognize their own duty to act when a defense agency does not act diligently to enter an appearance or resolve a potential conflict. As we emphasized in a recent opinion, “The Constitution’s guarantee of assistance of counsel cannot be satisfied by mere formal appointment.”1 Thus, when a trial court becomes aware that a defendant who is represented by public counsel has not been assigned an individual attorney, the trial court must take affirmative steps to ensure that the situation is immediately rectified. Likewise, when the Public Defender Agency informs a trial court that it may have a conflict of interest, the court should actively monitor the case to ensure that the potential conflict is resolved, or substitute counsel appointed, within a reasonable period of time. Background facts and proceedings On May 2, 2019, an Anchorage grand jury returned an eighty-three count indictment. The indictment charged nine defendants, including Perez, with a series of felony thefts and burglaries that resulted in over $25,000 worth of stolen property. Perez was arraigned on the twenty-six counts that pertained to him on May 6, 2019. At the arraignment, the trial court appointed the Alaska Public Defender Agency to represent Perez. The assistant public defender who was present at that arraignment waived reading of the indictment and advisement of rights and entered not guilty pleas on Perez’s behalf. On May 28, the grand jury returned a supplemental indictment in the nine co-defendant case. Perez was arraigned on the additional count that pertained to him on May 31, 2019. The assistant public defender who was present at the arraignment informed the court that the Agency had been appointed to represent multiple co- 1 Sackett v. State, 518 P.3d 289, 292 (Alaska App. 2022) (quoting Avery v. Alabama, 308 U.S. 444, 446 (1940)). –3– 2736 defendants and that there was an ongoing “evaluation of the conflict” to determine which case the Agency would retain. On June 10, the trial court conducted the first pretrial conference. Five of the nine co-defendants were present. (The other four co-defendants had outstanding bench warrants.) Three of the five co-defendants were still represented by the Public Defender Agency. No entry of appearance had been filed for Perez. At this point, Perez had been in custody for more than a month on this case.2 The assistant public defender who was present at the pretrial conference informed the court that the Agency was currently appointed to represent Perez and two other co-defendants (Blake Millhouse and William Ratliff), but there were conflict issues with the multiple defendants that would need to be resolved. The attorney noted that both Millhouse and Ratliff had been assigned assistant public defenders but Perez had not yet been assigned an attorney. The attorney suggested that the cases be set for the next available pretrial conference. The court responded that the next available conference was July 8, and that 39 days had run under Rule 45. The attorney stated that this was “okay” with Ratliff, Perez, and Millhouse. Perez was present in the courtroom when the assistant public defender said that Perez and the other co-defendants were “okay” with the continuance to July 8. Perez was also present when the court stated that 39 days of the Rule 45 speedy trial time had run and that the speedy trial time would toll until the next pretrial conference on July 8. On July 8, the court held the next pretrial conference. At this point, the Public Defender Agency only represented two of the co-defendants — Perez and Ratliff. 2 We note that it appears from the record that Perez may have also been in custody at the same time on a separate, unrelated case. –4– 2736 (Conflict counsel had been appointed for Millhouse.) But there was still no entry of appearance for Perez. Perez had been in custody for two months on this case. At the outset of the July 8 hearing, an assistant public advocate who was representing one of the other co-defendants informed the court that Perez appeared to be unrepresented. The judge then asked Perez if he had an attorney, and Perez responded, “Not so far, your Honor.” Instead of taking affirmative steps to determine why Perez remained without an assigned attorney more than two months after his initial arraignment, the court simply “appointed” the Public Defender Agency (which had already been appointed) and asked that an attorney from the Agency go speak to Perez. The assistant public defender who was present apparently then spoke to Perez, and this attorney subsequently told the court that he was there “on behalf of Mr. Perez and Mr. Ratliff.” At the hearing, the attorneys for the other co-defendants complained about discovery issues and asked that the cases be continued until August 5, with Rule 45 time tolling. The assistant public defender representing Perez and Ratliff agreed to the continuance and the tolling of the time. There was no discussion of the potential conflict with the Public Defender Agency representing both Perez and Ratliff nor was there any discussion of the fact that there was still no individual attorney assigned to Perez’s case. The next pretrial conference was held on August 5. At that point, Perez had been in custody for 92 days on this case and still no attorney had entered an appearance on his behalf. Notably, by this time, the Public Defender Agency had withdrawn from representing Ratliff, and it appears that the Agency remained appointed only to Perez’s case. However, when the court called Perez’s case, no attorney responded. Perez himself responded and informed the court that “for three months . . . nobody’s here for me. I haven’t had an attorney yet.” The court agreed that the situation “need[ed] to be –5– 2736 fixed.” After consulting the file, the court found that the Public Defender Agency had been appointed, and a note in the file said that there was a “conflict check” going on. An assistant public defender who was present for other matters agreed to speak with Perez. Later in the hearing, the assistant public defender asked when the Agency had been appointed and whether the Agency already had a conflict at the time they were appointed. The attorney asserted that the Public Defender Agency could not waive Rule 45 time on Perez’s behalf if it had a conflict, and she argued that the prior waivers may have been invalid. The court responded that it was not going to rule on any challenges to the prior Rule 45 waivers and that a motion should be filed if there was a disagreement with the court’s calculation that only 39 days had run. The court then ruled that it would continue all of the other cases until October 7 except for Perez’s case, which would be scheduled for the following week so that the court could address the representation issue. Near the end of the hearing, the court repeated that Perez’s case would be heard on August 12. The following exchange then occurred: Attorney: Judge, Mr. Perez now tells me he is comfortable waiving from today until the next court date. .... Court: Oh, do you want to come back next week? Perez: No. Attorney: Just for my purposes I claim that I don’t believe — that we potentially have a conflict but my position has been he seems to understand what he’s waiving and so he now takes the position he wants — When the court announced that Perez’s case would be continued until October 7 and that the Rule 45 time would be tolled, Perez spoke up, asking, “[W]here am I with time running right now?” The following exchange then took place: –6– 2736 Court: I just heard that you’re . . . comfortable waiving time and coming in with everyone else. Perez: Yeah, no, that’s — that’s right. But I was asking where . . . am I at. Court: Yeah. 10/7, and oh, you’re 39 days having run. If that was your question. Okay. One week later, on August 12, 2019, the court entered a written order yet again appointing the Public Defender Agency as counsel for Perez. The next pretrial conference took place on October 7. At this point, Perez had been in custody for 155 days on this case. Still no entry of appearance had been filed. When the court called Perez’s case, Perez responded, “I’m here.” The judge asked, “Who’s his attorney?” and the district attorney replied that her office “[did] not have anybody listed in our system [as Perez’s attorney].” An assistant public defender then spoke up and told the court that the Public Defender Agency similarly did not have “any kind of file open for Mr. Perez.” The assistant public defender stated that she would “make sure we get a file before the next hearing.” The judge, who was the same judge who had presided over all of the other pretrial conferences, did not question the assistant public defender any further or take any affirmative steps to address the fact that, 155 days after arraignment, Perez was still without an assigned attorney. Instead, the court took up the co-defendants’ cases. The attorneys representing the co-defendants requested a continuance until December 9. The assistant public defender who had spoken to Perez informed the court that she would “go along with the parties on this.” She asked the court to give her a copy of both the order appointing the Public Defender Agency and the charging document. The court concluded the hearing by stating, “It sounds like everyone’s in agreement with a continued discovery hearing on December 9. Time will toll.” –7– 2736 On the following day, October 8, an assistant public defender entered an appearance for Perez. On October 30, the Office of Public Advocacy and the Public Defender Agency entered into a stipulation, agreeing that the Office of Public Advocacy should be appointed to represent Perez based on a conflict of interest. (The nature of the conflict of interest was not identified.) On November 4, a contract attorney with the Office of Public Advocacy entered his appearance in Perez’s case. (The contract attorney was already assigned to represent Perez in a different case.) At the December 9 hearing, Perez was present, but his attorney was still in another courtroom when the court called Perez’s case with the co-defendants’ cases. The attorneys for the co-defendants complained about various discovery issues and agreed to have the court set a special discovery hearing where the assigned prosecutor would be present. The hearing was set for January 17. With the agreement of the attorneys who were present, the court tolled the speedy trial time until that hearing. But the court did not acknowledge that Perez’s attorney was not present. Instead, the court continued Perez’s case to January 17 along with the other co-defendants without any input from Perez or his attorney. Perez’s attorney subsequently filed a written objection to the court continuing Perez’s case and tolling the time in his attorney’s absence. A status hearing was held on December 30. At that hearing, Perez’s attorney agreed to waive Perez’s Rule 45 time until the January discovery hearing. But the attorney indicated that he believed the prior waivers of Perez’s Rule 45 time had been invalid based on the Public Defender Agency’s apparent conflict of interest, and he indicated that he intended to file a motion to dismiss Perez’s case for violation of his Rule 45 speedy trial right. –8– 2736 On February 5, Perez’s attorney filed a motion to dismiss Perez’s case under Rule 45. In the motion, Perez’s attorney argued that the court was obligated to take affirmative steps at the first pretrial conference hearing (the June 10 hearing) to directly address the Public Defender Agency’s failure to assign an attorney to Perez or to resolve its conflict issues. The attorney then argued that the court’s failure to ensure that this situation was resolved meant that Perez was effectively unrepresented and he should therefore have been treated as an unrepresented party and directly advised of his right to a speedy trial and the effect of any consent to a continuance.3 The attorney also argued that none of the attorneys from the Public Defender Agency were authorized to toll Rule 45 time on Perez’s behalf because the Agency had a conflict of interest in Perez’s case based on its representations of the co-defendants. The trial court denied the motion to dismiss under Rule 45 in a written order. In the order, the court found that, at all relevant times, Perez was represented by the Public Defender Agency even though no individual attorney had filed an entry of appearance. The court also found that the assistant public defenders who were present at the pretrial conferences and able to consult with Perez had apparent authority to request a continuance and waive time on his behalf. Lastly, the court ruled that the speedy trial time was also tolled under Rule 45(d)(5), which allows for “[a] reasonable period of delay when the defendant is joined for trial with a codefendant as to whom the time for trial has not run and there is good cause for not granting a severance.” Perez’s attorney moved for reconsideration, which the court denied. This petition for review then followed. 3 See Alaska R. Crim. P. 45(d)(2) (“A defendant without counsel shall not be deemed to have consented to a continuance unless the defendant has been advised by the court of the right to a speedy trial under this rule and of the effect of consent.”). –9– 2736 The trial court had a duty to take affirmative steps to resolve the representation issues in Perez’s case We granted this petition for review because the record in this case reveals that both the Public Defender Agency and the trial court failed to act diligently to resolve obvious problems with Perez’s representation. For over five months, Perez did not have an individual attorney assigned to his case. This meant that there was no attorney keeping track of his case between pretrial hearings, no attorney communicating with him outside these hearings, no attorney reviewing the discovery and discussing it with him, and no attorney assisting him with other pretrial matters such as bail. We begin by recognizing the failure of the Public Defender Agency to take ownership over this case. The Public Defender Agency was appointed at Perez’s initial arraignment on the indictment on May 6, 2019, and an attorney from the Agency represented Perez, waiving reading of the charges and advisement of his rights. For the next five months, no entry of appearance was filed — despite the fact that multiple Agency attorneys appeared before the court for Perez and assured the court that they would take steps to fix the problem. It appears that only the attorney at the October 7 hearing actually followed through on this promise, resulting in an entry of appearance being filed the very next day. It then took the Agency another three weeks to resolve a conflict issue with Perez and enter a stipulation for substitution of counsel with the Office of Public Advocacy. There is no excuse for the fact that it took the Agency over five months to assign an individual attorney to Perez’s case and another three weeks to find substitute counsel. We expect that the Public Defender Agency will take steps to revise its internal procedures and correct what went wrong in this case. The key question in this petition, however, is whether the trial court had a duty to act to remedy this breakdown in the system (and ultimately, whether the remedy – 10 – 2736 for any failure to act, under the circumstances of this case, is a dismissal under Criminal Rule 45). We conclude that the trial court had an affirmative duty to act when it became clear that Perez had no attorney assigned to his case and that the conflict issues to which the Public Defender Agency attorneys alluded were not being timely resolved. Article I, Section 11 of the Alaska Constitution and the Sixth Amendment to the United States Constitution guarantee a criminal defendant the right to the assistance of counsel in all critical stages of a criminal prosecution.4 Trial courts play an important role in safeguarding this constitutional right. As the United States Supreme Court observed more than eighty years ago, “The Constitution’s guarantee of assistance of counsel cannot be satisfied by mere formal appointment.”5 Thus, a trial court’s duty to appoint counsel “is not discharged by an assignment at such a time or under such circumstances as to preclude the giving of effective aid in the preparation and trial of the case.”6 Likewise, a trial court’s duty to appoint counsel is not discharged if the appointment did not result in an entry of appearance by an individual attorney who is actually assigned to the case. Here, Perez was arraigned on the original indictment on May 6, 2019, and on a supplemental indictment a few weeks later. But when the first pretrial conference 4 Alaska Const. art. I, § 11; U.S. Const. amend. VI; see also Rothgery v. Gillespie Cnty., Tex., 554 U.S. 191, 199 (2008) (“[T]he right to counsel attaches at the initial appearance before a judicial officer.” (citations omitted)). 5 Avery v. Alabama, 308 U.S. 444, 446 (1940); see also United States v. Cronic, 466 U.S. 648, 654 n.11 (“Assistance begins with the appointment of counsel, [but] it does not end there. In some cases the performance of counsel may be so inadequate that, in effect, no assistance of counsel is provided.” (citations omitted)). 6 Powell v. Alabama, 287 U.S. 45, 71 (1932); see also McMann v. Richardson, 397 U.S. 759, 771 (1970) (“[I]f the right to counsel guaranteed by the Constitution is to serve its purpose, defendants cannot be left to the mercies of incompetent counsel.”). – 11 – 2736 hearing was held over a month later, on June 10, no entry of appearance had been filed. Moreover, at the hearing, the assistant public defender who was present informed the court that, although the Agency had been appointed to represent Perez, there were conflict issues that needed to be resolved because the Agency had been appointed to represent multiple co-defendants. But the existence of a potential conflict that might cause the Agency to ultimately withdraw from Perez’s case does not excuse the Agency’s failure to assign Perez an individual attorney. The Agency was required to continue to represent Perez (and the other co-defendants) while it actively evaluated the potential conflict to determine which case, if any, it would retain, so that substitute counsel could be appointed to the co-defendant cases from which it withdrew.7 Given this situation, the trial court was required to do more than continue Perez’s case to another pretrial conference a month later. Instead, the court should have taken immediate action to ensure that an attorney was assigned to Perez’s case and that the conflict issues were resolved on an expedited basis.8 This action could have included setting firm deadlines for filing an entry of appearance or a motion to withdraw, or setting status hearings at which a supervisor from the Public Defender Agency was required to appear if the deadlines were not met. 7 See Alaska R. Prof. Conduct 1.16(b)-(d). Indeed, even when an attorney has to withdraw based on an actual conflict of interest, the attorney is still required to “take steps to the extent reasonably practicable to protect a client’s interests” until substitute counsel is appointed. See Alaska R. Prof. Conduct 1.16(d). 8 See Glasser v. United States, 315 U.S. 60, 71 (1942) (“The trial court should protect the right of an accused to have the assistance of counsel.”); Wheat v. United States, 486 U.S. 153, 160-61 (1988) (requiring trial court to take appropriate measures to protect criminal defendants from an attorney’s conflict of interest); Cuyler v. Sullivan, 446 U.S. 335, 347 (1980) (imposing a duty of inquiry on trial court when the court “knows or reasonably should know that a particular conflict exists”). – 12 – 2736 Accordingly, we agree with Perez that the trial court failed to fulfill its duty to safeguard Perez’s constitutional right to counsel. However, we disagree with Perez that the remedy for the trial court’s failure to act is necessarily dismissal of Perez’s case under Rule 45(g). In his petition for review, Perez argues that dismissal is the appropriate remedy because he claims that the trial court’s failure to act resulted in Perez being represented by “conflicted” attorneys who had no authority to waive Rule 45 time on his behalf. We acknowledge that multiple representation of co-defendants beyond the initial pretrial hearings is disfavored. As the American Bar Association has advised: Except where necessary to secure counsel for preliminary matters such as initial hearings or applications for bail, a defense counsel (or multiple counsel associated in practice) should not undertake to represent more than one client in the same criminal case. When there is not yet a criminal case, such multiple representation should be engaged in only when, after careful investigation and consideration, it is clear either that no conflict is likely to develop at any stage of the matter, or that multiple representation will be advantageous to each of the clients represented and that foreseeable conflicts can be waived.[9] Alaska Professional Conduct Rule 1.7(a) likewise provides that “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.”10 A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s 9 ABA Standards for Criminal Justice § 4-1.7(d) (4th ed. 2015). 10 Alaska R. Prof. Conduct 1.7(a). – 13 – 2736 responsibilities to another client, a former client, or a third person or by a personal interest of the lawyer.[11] A later subsection of the same rule provides, “A lawyer shall act with reasonable diligence in determining whether a conflict of interest . . . exists.”12 But contrary to Perez’s assumptions, the mere appointment of an agency to multiple co-defendants does not — standing alone — create an active conflict of interest.13 Instead, the problem is the inherent potential for adverse interests or antagonistic defenses among co-defendants, and the fact that active conflicts of interest are likely to develop as the clients share confidential information with their attorneys and decisions about pretrial investigations and negotiations have to be made. Indeed, the potential for active conflicts of interests among co-defendants is so high that Alaska law prohibits the joint representation of co-defendants at trial unless there has been a court inquiry and an on-the-record express waiver of any conflict of interest.14 Thus, when an agency is assigned to represent multiple defendants at arraignment, it is incumbent on the agency to determine on an expedited basis which defendant it will continue to represent and which cases it will withdraw from so that substitute counsel can be appointed. Indeed, the longer an agency waits to resolve which case it will retain, the higher the likelihood that an actual conflict of interest will develop that will require the agency to withdraw from all of the co-defendants’ cases. 11 Id. 12 Alaska R. Prof. Conduct 1.7(c). 13 Cf. Mickens v. Taylor, 535 U.S. 162, 169-71 (2002) (distinguishing between actual conflicts of interest and the potential for such conflicts created by multiple representation). 14 See Moreau v. State, 588 P.2d 275, 283-84 (Alaska 1978) (adopting Minnesota rule that “the trial judge must personally advise the defendant of potential dangers inherent in dual representation”). – 14 – 2736 Here, the Agency did not act with reasonable diligence. Instead, it took months for the Agency to withdraw from the co-defendants’ cases. At the June 10 hearing, more than a month after Perez’s arraignment, the Agency was still representing three of the co-defendants (Perez, Ratliff, and B. Millhouse). By the next hearing, on July 8, the Agency had withdrawn from Millhouse’s case but was still representing Perez and Ratliff. By the following hearing, August 5, the Agency had withdrawn from Ratliff’s case, and appeared to be representing only Perez.15 Thus, we agree with Perez that the conflict issues were not resolved in a timely manner, and that the trial court had a duty to intervene to ensure that they were resolved more expeditiously. However, the primary problem was not the existence of a potential conflict caused by the multiple representations, but the fact that Perez did not have an individual attorney for over five months while potential conflicts were resolved. We accordingly must now determine whether the absence of an assigned attorney invalidated Perez’s waiver of his Rule 45 speedy trial time such that Perez’s case should be dismissed with prejudice under Rule 45(g). Why we conclude, based on the specific record before us, that the trial court did not err in finding that the Agency attorneys representing Perez at the pretrial conferences had apparent authority to consent to a continuance on his behalf Under Alaska Criminal Rule 45, a defendant must be brought to trial within 120 days from the date of the service of the charging document.16 However, there are a number of circumstances that can result in time being excluded from the Rule 45 15 We acknowledge that nearly three months later, the Agency withdrew from Perez’s case based on a conflict of interest, but it is unclear from the record whether that conflict of interest was related to the earlier multiple representation of co-defendants. 16 Alaska R. Crim. P. 45(b)-(c). – 15 – 2736 speedy trial calculation.17 One of the excluded periods of time is set out in Rule 45(d)(2): “The period of delay resulting from an adjournment or continuance granted at the timely request or with the consent of the defendant and the defendant’s counsel.” The trial court relied on this subsection when it tolled Perez’s Rule 45 time at the various pretrial conferences. Perez argues that it was error for the trial court to rely on subsection (d)(2) to toll the time for trial under Rule 45 because the court was aware that the Public Defender Agency had a potential conflict of interest in representing Perez. But, as we just explained, we do not agree with Perez that the mere existence of a potential conflict of interest automatically precluded the Agency from representing Perez at these initial pretrial hearings. The more significant problem in Perez’s case is not the potential conflict of interest based on the multiple representation of co-defendants, but the absence of any individual attorney assigned to represent Perez. In order to toll Rule 45 time under subsection (d)(2), the trial court must find that the requested continuance was “at the request or with the consent of the defendant and the defendant’s counsel.”18 In other words, tolling under (d)(2) is generally premised on the assumption that the defense attorney and the defendant have a functional working relationship and the defense attorney is not seeking a continuance that will toll Rule 45 time without the knowledge and consent of their client.19 Perez argues that he did not have an attorney-client relationship with the assistant public defenders who represented him at the pretrial hearings because none of 17 See Alaska R. Crim. P. 45(d)(1)-(7). 18 Alaska R. Crim. P. 45(d)(2) (emphasis added). 19 Machado v. State, 797 P.2d 677, 685 (Alaska App. 1990). – 16 – 2736 them were actually assigned to his case. But it is not unusual for attorneys within an agency to appear for each other’s clients at pretrial hearings, and the fact that the continuances were requested by assistant public defenders who were not Perez’s assigned public defender does not mean that Perez should have been considered “unrepresented.”20 What was unusual in Perez’s case was that there was no individual attorney assigned to Perez, and it was therefore clear that the advice and representation that Perez was receiving was limited to the advice and representation he received in the hearings themselves. As a general matter, our case law is clear that a trial court does not need to obtain a separate Rule 45 waiver from a defendant when their defense attorney requests a continuance that will toll Rule 45. Instead, when an attorney appears for a defendant at a hearing and requests a continuance, the trial court may assume that the continuance is requested with the defendant’s knowledge and consent unless there is an affirmative showing to the contrary.21 As we explained in State v. Jeske: 20 Cf. Heavygun v. State, 368 P.3d 707, 711 (Mont. 2016) (noting that “it is ‘common practice’ for defense attorneys to appear on each other’s behalf, when asked to do so because of illness or scheduling conflicts, and especially for more routine matters, such as status hearings” and that “the allowance of stand-in counsel for hearings did not constitute deficient performance or otherwise fall below an objective standard of reasonableness sufficient to establish the deficiency prong of Strickland”). 21 See Yearty v. State, 805 P.2d 987, 991 (Alaska App. 1991); see also Machado v. State, 797 P.2d 677, 685 (Alaska App. 1990) (“While we believe that this rule gives the defendant the right to object to a continuance and that the rule assumes that counsel will make the decision to move for a continuance after consultation with the defendant, we do not believe that the court should normally be required to obtain a separate waiver from the defendant.”); Baker v. State, 110 P.3d 996, 999 (Alaska App. 2005); Henson v. State, 576 P.2d 1352, 1356 n.9 (Alaska 1978). – 17 – 2736 While the wording of Rule 45(d)(2) apparently requires a criminal defendant’s concurrence in any delay or continuance requested by the defense attorney, this court and the Alaska Supreme Court have repeatedly stated that the trial court can rely on a defense attorney’s request for a continuance and need not seek a separate, personal consent from the defendant unless the defendant affirmatively objects to the defense attorney’s action.[22] Our case law is also clear that when a defendant brings an objection to the trial court’s attention, the time already tolled under subsection (d)(2) remains tolled but no further tolling under (d)(2) can occur once the trial court affirmatively finds that the defendant objects to the continuance.23 The question presented by Perez’s case is whether a trial court may similarly assume that any requested continuance that tolls Rule 45 time is with the knowledge and consent of the defendant when the defendant has not actually had an individual attorney assigned to his case. Perez argues that a defendant in such a situation is akin to an unrepresented defendant and the trial court should therefore follow the procedures for unrepresented defendants, which require the trial court to advise the defendant personally of the defendant’s Rule 45 speedy trial rights and the effect that consenting to a continuance will have on those rights.24 22 State v. Jeske, 823 P.2d 6, 8 (Alaska App. 1991) (citing Henson, 576 P.2d at 1356 n.9; Yearty, 805 P.2d at 991; Machado, 797 P.2d at 684-85; Snyder v. State, 524 P.2d 661, 664 (Alaska 1974); O’Dell v. Anchorage, 573 P.2d 1381, 1384 (Alaska 1978)). 23 See Jeske, 823 P.2d at 10 (“When a defendant asserts that he or she never consented to a continuance obtained or stipulated to by defense counsel, Rule 45 remains tolled until the judge makes an affirmative finding that the defendant did not consent to the previously ordered continuance.”); see also Rhames v. State, 907 P.2d 21, 25 (Alaska App. 1995). 24 See Alaska R. Crim. P. 45(d)(2) (“A defendant without counsel shall not be deemed (continued...) – 18 – 2736 We agree with Perez that the best practice would be to treat a defendant without an assigned attorney as akin to an unrepresented party for purposes of tolling Rule 45 under subsection (d)(2). But we conclude that the trial court did not err in failing to follow those procedures in Perez’s case because the record supports the trial court’s assumption that the continuances were requested with the knowledge and consent of Perez. This is most clearly shown by the exchange between the court and Perez that occurred at the August 5 hearing. At that hearing, the court requested that an assistant public defender consult with Perez (as had occurred at other hearings). After speaking with Perez, the attorney expressed concern that she might not be authorized to represent Perez. As a result, the trial court scheduled a representation hearing for the following week to finally resolve the representation issues in Perez’s case. But Perez then made it clear that he did not want to come back for the representation hearing and that he was willing to have his case continued, with the rest of his co-defendants, until October 7. After the attorney informed the trial court that Perez was “comfortable” with waiving his Rule 45 speedy trial time until October 7, the court addressed Perez personally and confirmed that Perez was willing to have the Rule 45 time tolled. Perez also demonstrated an understanding of his Rule 45 rights, specifically requested an accounting of “where [he] was at.” The trial court explained that 39 days of his 120-day Rule 45 time had run. Perez did not object to that calculation or make any further inquiry. The exchange at the August 5 hearing demonstrates that Perez had an adequate understanding of his Rule 45 rights and that he was more than willing to 24 (...continued) to have consented to a continuance unless the defendant has been advised by the court of the right to a speedy trial under this rule and of the effect of consent.”). – 19 – 2736 consent to continuances that would toll his Rule 45 time. Indeed, when given the opportunity to return for a representation hearing the following week, Perez apparently preferred to wait until the next pretrial conference, with his Rule 45 time tolling. We note that, even after the Office of Public Advocacy contract attorney entered an appearance, Perez continued to consent to continuances that tolled his Rule 45 time. We also find it significant that Perez’s willingness to waive his Rule 45 time was objectively reasonable given the specific circumstances of his case. Perez was facing twenty-seven felony counts in an eighty-five count indictment involving eight co defendants.25 Discovery in the case was voluminous, and Perez’s co-defendants had similarly requested continuances and waived speedy trial time while their attorneys struggled to address discovery issues and ensure that discovery was complete. There is also nothing in the record to suggest that moving for a severance at this early stage of the pretrial proceedings would have been advantageous to Perez.26 Thus, given the record and all of the surrounding circumstances, we conclude that, while the trial court erred in failing to take more timely action on the representation issues in Perez’s case, this error did not invalidate the Rule 45(d)(2) findings that the trial court made. Accordingly, we affirm the trial court’s denial of Perez’s motion to dismiss his case with prejudice under Rule 45(g). Conclusion The trial court’s order denying Perez’s motion to dismiss is AFFIRMED. 25 We note that some of the co-defendants still had warrants out for their arrests and therefore had not yet been arraigned on the charges. 26 See also Alaska R. Crim. P. 45(d)(5) (permitting the trial court to toll Rule 45 time for “[a] reasonable period of delay when the defendant is joined for trial with a codefendant as to whom the time for trial has not run and there is good cause for not granting a severance”). – 20 – 2736 Judge HARBISON, concurring. I agree with the Court that the delay that occurred in this case was unacceptable. But I write separately to express my concern that delays such as this one seem to be more common under the informal, ad hoc process for resolving representation issues that has, in recent years, replaced the rules-based approach formerly employed by trial courts.1 Alaska’s trial courts currently address representation issues, and particularly substitution of counsel issues, very informally. When a court-appointed attorney claims to have a conflict of interest, the trial court rarely requires the attorney to file a motion to withdraw. Instead, trial courts typically allow the agencies themselves to determine when and whether conflict counsel will be appointed to represent the defendant. Thus, when a defense attorney informs the court that they may need to withdraw, courts often take no action, except, as here, to continue the case while leaving it to the public defense agencies to resolve the conflict among themselves. It is rare for a court to exercise its authority over the substance or timing of the withdrawal process. In my view, this informality does not have the desired effect of promoting the fair and efficient adjudication of criminal matters. Instead, defendants — and trial 1 See, e.g., Ortberg v. State, 751 P.2d 1368, 1376 n.6 (Alaska App. 1988) (explaining that, under Alaska Rule of Criminal Procedure 50(b), the civil rules regarding attorneys apply in criminal cases); Alaska R. Civ. P. 81(e) (setting out procedure that must be followed in order for an attorney to withdraw from representation of a client); see also Alaska R. Prof. Conduct 1.7 (providing that, except for enumerated exceptions, an attorney may not represent a client if the representation involves a concurrent conflict of interest and requiring attorneys to act with reasonable diligence in determining whether such a conflict of interest exists); Alaska R. Prof. Conduct 1.9 (explaining when a lawyer’s duty to former clients bars the lawyer from representation of a current client); Alaska R. Prof. Conduct 1.10 (imputing certain conflicts of interest to lawyers associated in a firm). – 21 – 2736 courts — are often left in the dark as to which agency, and which attorney, has assumed responsibility for the defendant’s representation. It is not uncommon for the process to be unnecessarily protracted, and while the representation issues are being resolved, defense attorneys often claim to be unable to advocate for a defendant, even when there is an existing, unchallenged court order appointing a particular agency. On top of this, the informality of most representation proceedings makes it more likely that the parties and the court will conflate the issues relating to representation, failing to identify whether they are litigating a defendant’s motion to substitute counsel, a defendant’s motion to waive their right to counsel in order to proceed pro se, or a defense attorney’s motion to withdraw. Once these issues are conflated, it is all too easy for the trial court to conduct an insufficient inquiry or to apply an incorrect analysis. In my view, if representation issues were addressed more formally, through written motion practice and established court procedures, they would be resolved more quickly and reliably. – 22 – 2736	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487760/	11/18/2022 IN THE SUPREME COURT OF TENNESSEE AT KNOXVILLE February 24, 2022 Session Heard at Nashville STATE OF TENNESSEE v. TYSHON BOOKER Appeal by Permission from the Court of Criminal Appeals Criminal Court for Knox County No. 108568 G. Scott Green, Judge ___________________________________ No. E2018-01439-SC-R11-CD ___________________________________ JEFFREY S. BIVINS, J., with whom ROGER A. PAGE, C.J., joins, dissenting. I respectfully dissent from the result reached by a majority of the Court today. Quite frankly, I find the policy adopted as a result of the plurality opinion of Justice Lee and the concurring opinion of Justice Kirby to be sound. However, it is just that. It is a policy decision by which the majority today has pushed aside appropriate confines of judicial restraint and applied an evolving standards of decency/independent judgment analysis that impermissibly moves the Court into an area reserved to the legislative branch under the United States and Tennessee Constitutions. I. FACTUAL AND PROCEDURAL BACKGROUND1 On November 15, 2015, then sixteen-year-old Tyshon Booker (“Mr. Booker”) shot and killed G’Metrick Caldwell (“the victim”) while sitting in the victim’s car on a residential street in East Knoxville. Mr. Booker and then seventeen-year-old Bradley Robinson (“Mr. Robinson”) left the victim for dead in the vehicle, and Mr. Booker fled with the victim’s cellphone, which he eventually discarded. Mr. Booker’s finger and palm prints were found at the scene of the shooting along with shell casings from his nine- millimeter handgun. Two days later, Mr. Booker was charged by petition in the Knox County Juvenile Court related to his involvement in the victim’s death. The next day, he was arrested at the home of his neighbor, Linda Hatch (“Ms. Hatch”). 1 This opinion discusses only those facts relevant to the issue granted appeal by this Court. A full recitation of the facts is set out in the Court of Criminal Appeals’ opinion. State v. Booker, No. E2018- 10439-CCA-R3-CD, 2020 WL 1697367 (Tenn. Crim. App. Apr. 8, 2020), perm. app. granted, (Tenn. Sept. 16, 2020). A. Juvenile Court Following Mr. Booker’s arrest, the State filed a “Notice and Motion to Transfer,” seeking to transfer Mr. Booker to the Knox County Criminal Court to be tried as an adult. During the hearing that followed, the State put on forensic evidence linking Mr. Booker to the victim’s vehicle. Additionally, Ms. Hatch testified that, the day after the shooting, Mr. Booker confessed to her that he and Mr. Robinson shot the victim in a failed robbery attempt. In response, Mr. Booker attacked Ms. Hatch’s credibility. He argued that she fabricated part of his confession to protect herself because she maintained an inappropriate relationship with him that included smoking marijuana together, helping him sell crack cocaine, and engaging in sexual activities. Dr. Keith Cruise, clinical psychologist, testified that Mr. Booker suffered from Post-Traumatic Stress Disorder, Moderate Cannabis Use Disorder, and Conduct Disorder stemming from numerous traumatic events he experienced during childhood, including witnessing both the death of a close relative and the shooting of a neighborhood child, as well as experiencing the murder of his paternal grandfather when Mr. Booker was in his early teens. Dr. Cruise explained that Mr. Booker was likely amenable to treatment but that adult correctional facilities were “ill equipped” to help him. At the close of the hearing, the juvenile court considered the transfer factors required by Tennessee Code Annotated section 37-1-134(b).2 In its oral ruling, the juvenile court explicitly found: (1) there were reasonable grounds to believe Mr. Booker committed the murder, (2) Mr. Booker was not committable to an institution for the developmentally disabled or mentally ill, (3) his prior delinquency records were “not of great importance here,” (4) he received minimal past treatment efforts, (5) the nature of the alleged offense weighed heavily in favor of transfer, (6) any gang affiliation had little impact in the case, and (7) there was little hope of rehabilitating Mr. Booker in the twenty-one months remaining before his nineteenth birthday when he would be released from juvenile state custody. The juvenile court expressed reservations but, ultimately, based on its findings, the judge transferred Mr. Booker to criminal court to be tried as an adult. 2 In making the [transfer] determination . . ., the court shall consider, among other matters: (1) The extent and nature of the child’s prior delinquency records; (2) The nature of past treatment efforts and the nature of the child’s response thereto; (3) Whether the offense was against person or property, with greater weight in favor of transfer given to offenses against the person; (4) Whether the offense was committed in an aggressive and premeditated manner; (5) The possible rehabilitation of the child by use of procedures, services and facilities currently available to the court in this state; and (6) Whether the child’s conduct would be a criminal gang offense, as defined in § 40-35-121, if committed by an adult. Tenn. Code Ann. § 37-1-134(b) (2014) (amended 2022). -2- B. Criminal Court A Knox County Grand Jury indicted Mr. Booker on two counts of felony murder and two counts of especially aggravated robbery related to the victim’s death. The case proceeded to a jury trial. At trial, the State’s evidence was consistent with its presentation at the juvenile transfer hearing, including evidence of Mr. Booker’s confession to Ms. Hatch and their improper relationship. Mr. Booker took the stand and testified at trial that he shot the victim in self-defense. According to Mr. Booker, there was a fight between the victim and Mr. Robinson in the vehicle, during which Mr. Booker believed the victim reached for a gun. Mr. Booker denied telling Ms. Hatch that he and Mr. Robinson planned to rob the victim, but rather stated that the three planned only to drive around and smoke marijuana together. The jury convicted Mr. Booker as charged on all counts. The felony murder convictions merged, and the trial court imposed the mandatory sentence of life imprisonment.3 Following a sentencing hearing, the trial court sentenced Mr. Booker to twenty years for the especially aggravated robbery convictions, to be served concurrently with his life sentence. C. The Appeal On appeal to the Court of Criminal Appeals, Mr. Booker raised, inter alia, constitutional challenges to Tennessee’s automatic life sentence for first-degree murder. After briefing and oral argument, the Court of Criminal Appeals found no reversible error and affirmed Mr. Booker’s convictions. State v. Booker, No. E2018-01439-CCA-R3-CD, 2020 WL 1697367, at 33 (Tenn. Crim. App. Apr. 8, 2020), perm. app. granted, (Tenn. Sept. 16, 2020). As to Mr. Booker’s claim that his mandatory life sentence is unconstitutional under the Eighth Amendment to the United States Constitution and United States Supreme Court precedent, the court stated, “While we understand [Mr. Booker]’s argument, we must reject his invitation as we are bound by court precedent.” Id. (citing State v. Collins, No. W2016-01819-CCA-R3-CD, 2018 WL 1876333, at 20 (Tenn. Crim. 3 Tennessee law mandates a sentence of death, imprisonment for life without possibility of parole, or imprisonment for life for those convicted of felony murder. See Tenn. Code Ann. §§ 39-13-202(a)(2), (c)(1)–(3) (2014) (amended 2018, 2021 & 2022). The State must send notice to the defendant of its intent to seek the death penalty or life without parole. See Tenn. Code Ann. § 39-13-208(a)–(c) (2014) (amended 2021 & 2022). If the State seeks either the death penalty or life without parole, the sentencer has discretion to choose between the alternative sentences during a sentencing hearing. Tenn. Code Ann. § 39-13-204 (2014) (amended 2019, 2021 & 2022). When the State declines to pursue the death penalty or life without parole, the law mandates a sentence of life imprisonment if the defendant is convicted of first-degree murder. See Tenn. Code Ann. § 39-13-208(c) (2014). Mr. Booker was not eligible for the death penalty, see Roper v. Simmons, 543 U.S. 551, 568 (2005), and the record indicates that the State did not give notice of intent to seek life without parole. Therefore, Mr. Booker’s sentence of life imprisonment was mandatory. -3- App. Apr. 18, 2018), perm. app. denied, (Tenn. Aug. 8, 2018), cert. denied, 139 S. Ct. 649 (2018)). Mr. Booker then appealed to this Court. We granted the application only as to the issue of whether Tennessee’s sentence of life imprisonment, as applied to juveniles, violates the United States or Tennessee Constitutions. Order, State v. Booker, No. E2018- 01439-SC-R11-CD (Tenn. Sept. 16, 2020) (granting the application for permission to appeal). We also directed the parties to address what sentencing options may be available under Tennessee law if the sentence of life imprisonment is improper. Id. Approximately two months after oral argument in this case, the United States Supreme Court issued its opinion in Jones v. Mississippi, 141 S. Ct. 1307 (2021), which analyzed a related juvenile sentencing issue. We ordered the parties to submit supplemental briefing regarding whether Jones affects the analysis or outcome in this case.4 Order, State v. Booker, No. E2018- 01439-SC-R11-CD (Tenn. June 10, 2021) (directing the parties to submit supplemental briefs). II. ANALYSIS The proper analysis for this challenge requires examination of the issue of whether the Eighth Amendment to the United States Constitution, as interpreted in Miller v. Alabama, 567 U.S. 460 (2012), requires this Court to hold that Tennessee’s life sentence is unconstitutional as applied to juveniles. The Eighth Amendment, applicable to the States through the Fourteenth Amendment, states: “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.” U.S. Const. amend. VIII. Further, the United States Supreme Court has explained, “The Eighth Amendment guarantees individuals the right not to be subjected to excessive sanctions[, which] flows from the basic ‘precept of justice that punishment for crime should be graduated and proportioned to [the] offense.’” Roper v. Simmons, 543 U.S. 551, 560 (2005) (second alteration in original) (quoting Atkins v. Virginia, 536 U.S. 304, 311 (2002); Weems v. United States, 217 U.S. 349, 367 (1910)). When our Court is asked to interpret the Eighth Amendment, we are bound by the existing interpretations of the United States Supreme Court. West v. Schofield, 519 S.W.3d 4 Both parties agree that the holding in Jones does not directly control the outcome in Mr. Booker’s case. However, each party’s supplemental brief argues that Jones ultimately supports that party’s position in this case. Mr. Booker argues that his position rests on applying the principles of Graham v. Florida, 560 U.S. 48 (2010) and Miller v. Alabama, 567 U.S. 460 (2012), and because Jones explicitly upholds Graham and Miller as good law, Jones supports his position that Tennessee’s life sentence is unconstitutional as applied to juveniles. The State maintains that Miller is distinguishable and that Jones implicitly approves of Tennessee’s first-degree-murder sentencing scheme in a footnote. See Jones, 141 S. Ct. at 1318 n.5. Further, because Tennessee’s sentencing scheme can result in discretion if the State pursues a life-without- parole sentence, the State argues that a life sentence is the lesser, not equal, punishment when compared to a life-without-parole sentence. -4- 550, 566 (Tenn. 2017) (citing James v. City of Boise, 577 U.S. 306, 307 (2016) (per curiam) (“The Idaho Supreme Court, like any other state or federal court, is bound by this Court’s interpretation of federal law.”); Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 531 (2012) (per curiam) (“When this Court has fulfilled its duty to interpret federal law, a state court may not contradict or fail to implement the rule so established.”)). We may not “interpret the United States Constitution to provide greater protection than [the United States Supreme Court’s] own federal constitutional precedents provide.” Arkansas v. Sullivan, 532 U.S. 769, 772 (2001) (citing Oregon v. Hass, 420 U.S. 714, 719 (1975)).5 A. The Roper/Graham/Miller Trilogy Over the last twenty years, the United States Supreme Court has held that the Eighth Amendment prohibits certain punishments and requires special procedural protections in the context of juvenile sentencing. See Roper, 543 U.S. at 568; Graham v. Florida, 560 U.S. 48, 74–75 (2010); Miller, 567 U.S. at 465; Montgomery v. Louisiana, 577 U.S. 190, 212 (2016). In Roper, the Court barred the use of the death penalty on any juvenile offender, regardless of the crime of conviction, as cruel and unusual under the Eighth Amendment. Roper, 543 U.S. at 568. First, the Court determined that a national consensus had formed against the juvenile death penalty supported by the understanding that juveniles are “categorically less culpable than the average criminal.” Id. at 567 (citing Atkins, 536 U.S. at 316) (summarizing the objective indicia of national consensus against the juvenile death penalty as “the rejection of the juvenile death penalty in the majority of States; the infrequency of its use even where it remains on the books; and the consistency in the trend toward abolition of the practice” (Id. at 552)). The Court also reasoned that the usual penological justifications for the death penalty, such as retribution and deterrence, no longer carried the same weight when considering the harshness of the penalty compared to certain inescapable characteristics of youth, such as immaturity and irresponsibility, vulnerability and susceptibility to negative influences coupled with a lack of control over their environment, and personality traits that are more transient and amenable to rehabilitation. Id. at 569–73. For these reasons, the Court concluded that the death penalty is disproportional when applied to any juvenile offender and violates the Eighth Amendment. Id. at 575. Five years later, in Graham, the Supreme Court barred the use of life-without-parole sentences for juveniles convicted of nonhomicide crimes. Graham, 560 U.S. at 74. The Supreme Court determined that a national consensus had developed against the use of such a harsh punishment for juvenile nonhomicide offenders and held, in that context, such a sentence violates the Eighth Amendment. Id. at 67, 74. The Graham Court reiterated the same characteristics associated with youth first stated in Roper: “juveniles have a ‘lack of maturity and an underdeveloped sense of responsibility’; they ‘are more vulnerable and 5 In my view, the result reached by the majority today does just that: the majority has interpreted the United States Constitution to provide greater protection than federal constitutional precedents provide. -5- susceptible to negative influences and outside pressures, including peer pressure’; and their characters are ‘not as well formed.’” Id. at 68 (quoting Roper, 543 U.S. at 569–70). In the context of juvenile nonhomicide offenders, these same characteristics led the Supreme Court to conclude that a juvenile’s already lowered moral culpability is twice diminished when he or she “did not kill or intend to kill,” id. at 69, and, overall, juveniles cannot reliably be classified as incorrigible at the time of conviction, id. at 72–73. The Graham Court described a life-without-parole sentence as “the second most severe penalty permitted by law,” id. at 69 (quoting Harmelin v. Michigan, 501 U.S. 957, 1001 (1991) (Kennedy, J., concurring)), and something akin to the death penalty, which “alters the offender’s life by a forfeiture that is irrevocable . . . without giving hope of restoration,” id. at 69–70. Therefore, a life-without-parole sentence is disproportional when applied to juvenile nonhomicide offenders given the difficulty of differentiating between a juvenile “whose crime reflects unfortunate yet transient immaturity, and the rare juvenile offender whose crime reflects irreparable corruption.” Id. at 68 (quoting Roper, 543 U.S. at 573). Similar to the reasoning in Roper, the Court concluded that deterrence and retribution do not support life-without-parole sentences in the context of juvenile nonhomicide offenders. Id. at 71–72. Further, while incapacitation may justify a lengthy punishment for a serious nonhomicide crime, it does not support life without parole for juvenile nonhomicide offenders because it requires a sentencer to make the decision that a juvenile “forever will be a danger to society” at the outset, id. at 72, even though “incorrigibility is inconsistent with youth,” id. at 73 (quoting Workman v. Commonwealth, 429 S.W.2d 374, 378 (Ky. 1968)). The Supreme Court also explained that such a punishment is inconsistent with rehabilitation as a goal because life without parole “forswears altogether the rehabilitative ideal[ ] [b]y denying the defendant the right to reenter the community” despite a juvenile’s capacity for reform. Id. at 73–74. Therefore, a sentence of life without parole is cruel and unusual and violates the Eighth Amendment as applied to a juvenile convicted of a nonhomicide crime. Id. at 74. Just two years later, the Court decided Miller, which held that life without parole could be imposed on a juvenile convicted of homicide, but only under a discretionary sentencing scheme. Miller, 567 U.S. at 465. Two fourteen-year-old offenders, Kuntrell Jackson and Evan Miller, were convicted of capital murder and the only available sentence under the law of their respective states was life without parole. Id. at 465–69; see Ark. Code. Ann. § 5-4-104(b) (1997) (providing that “[a] defendant convicted of capital murder . . . shall be sentenced to death or life imprisonment without parole”); Ala. Code §§ 13A- 5-40(a)(9), 13A-6-2(c) (1982) (fixing murder in the course of arson as a capital offense subject to life without parole). Therefore, both Mr. Jackson and Mr. Miller were sentenced under mandatory sentencing schemes, which did not allow for consideration of their youth or an option to impose a lesser punishment than life without parole. Miller, 567 U.S at 465– 69. Their cases were consolidated on review. -6- The Miller Court explained that there may be the type of rare incorrigible youth who commits homicide and deserves a sentence of life without parole. Id. at 479–80. However, given all that Roper and Graham said about youth, the “appropriate occasions for sentencing juveniles [to life without parole] will be uncommon” and require a sentencing scheme that allows for the sentencer to consider the offender’s “youth and attendant characteristics.” Id. at 479, 483. If the sentencing scheme is mandatory and “mak[es] youth (and all that accompanies it) irrelevant to imposition of that harshest prison sentence,” the Supreme Court explained, the “scheme poses too great a risk of a disproportionate punishment” and runs afoul of the Eighth Amendment. Id. at 479. Miller relied on the same characteristics of youth announced in Roper and reiterated in Graham, that a juvenile’s “transient rashness, proclivity for risk, and inability to assess consequences” leads to diminished criminal culpability and an increased ability to reform and be rehabilitated, and determined that “none of what [its precedents] said about children . . . is crime-specific.” Id. at 471–73. Building on Graham’s conclusion that life without parole “alters the offender’s life by a forfeiture that is irrevocable,” the Miller Court reasoned that individualized sentencing and consideration of “the ‘mitigating qualities of youth’” are particularly relevant when considering the constitutionality of a life-without-parole sentence imposed on a juvenile. Id. at 475–76 (first quoting Graham, 560 U.S. at 69; then quoting Johnson v. Texas, 509 U.S. 350, 367 (1993)). Both Roper and Graham, the Supreme Court acknowledged, “teach that in imposing a State’s harshest penalties, a sentencer misses too much if he treats every child as an adult.” Id. at 477. Therefore, mandatory imposition of life without parole, which ignores the very attributes that make children constitutionally different from adults and disregards the offender’s potential for rehabilitation, violates the Eighth Amendment. Id. at 479. The Supreme Court clarified that its holding, unlike Graham, did not categorically bar life-without-parole sentences for juvenile homicide offenders. Id. at 479–80. However, after Miller, the Eighth Amendment requires that a sentencer “take into account how children are different, and how those differences counsel against irrevocably sentencing [a juvenile] to a lifetime in prison.” Id. at 480. I do agree with the majority that the Roper/Graham/Miller trilogy6 centers around one foundational principle: “children are constitutionally different from adults for purposes of sentencing.” Id. at 471. In support of this principle, each holding builds off prior precedent to support the conclusion: juvenile offenders generally are less culpable than their adult counterparts and more responsive and amenable to rehabilitation, which makes 6 Following Miller, the United States Supreme Court held in Montgomery v. Louisiana, 577 U.S. 190, 212 (2016), that Miller established a new rule of constitutional law that applies retroactively on collateral review. The Court also recently clarified that “[i]n light of th[e] explicit language” in Miller and Montgomery, there is no formal factfinding requirement regarding a child’s incorrigibility before sentencing a juvenile homicide offender to life without parole, so long as the overall sentencing scheme is discretionary. Jones, 141 S. Ct. at 1311. -7- them less deserving of the most severe punishments at law. Id. (citing Graham, 560 U.S. at 68); see also Roper, 543 U.S. at 569–71. Additionally, the trilogy recognizes that “the distinctive attributes of youth diminish the penological justifications for imposing the harshest sentences on juvenile offenders, even when they commit terrible crimes.” Miller, 567 U.S. at 472. Retribution, incapacitation, deterrence, and rehabilitation provide little support for either the death penalty or life-without-parole sentences once a court considers that juveniles, in general, have diminished culpability, are unlikely to contemplate the potential for punishment before acting, and cannot with reliability be classified as incorrigible or irredeemable at such a young age. See id. at 472–73; Graham, 560 U.S. at 71–73; Roper, 543 U.S. at 571. The Supreme Court cemented the interconnectedness of this line of cases in Miller when it stated that “none of what is said about children—about their distinctive (and transitory) mental traits and environmental vulnerabilities—is crime-specific.” Miller, 567 U.S. at 473. Therefore, whether the crime of conviction is homicide or something less severe in the eyes of the law, the rationale for limiting the imposition of these harsh sentencing practices remains the same. These cases and their collective underpinning are compelling. However, in answering the federal constitutional question before the Court today, “our duty to follow binding precedent is fixed upon case-specific holdings rather than general expressions in an opinion that exceed the scope of any particular holding.” State v. Slocumb, 827 S.E.2d 148, 153 (S.C. 2019) (citing Vasquez v. Commonwealth, 781 S.E.2d 920, 926 (Va. 2016)). Because Mr. Booker argues that the principles of both Graham and Miller compel this Court to hold that Tennessee’s life sentence is unconstitutional as applied to juveniles, the proper analysis narrows the focus to their specific holdings. B. Graham and Miller In Graham, the Supreme Court held that “for a juvenile offender who did not commit homicide[,] the Eighth Amendment forbids the sentence of life without parole.” Graham, 560 U.S. at 74. The Supreme Court clarified its holding: A State is not required to guarantee eventual freedom to a juvenile offender convicted of a nonhomicide crime. What the State must do, however, is give defendants like Graham some meaningful opportunity to obtain release based on demonstrated maturity and rehabilitation. It is for the State, in the first instance, to explore the means and mechanisms for compliance. It bears emphasis, however, that while the Eighth Amendment prohibits a State from imposing a life[-]without[-]parole sentence on a juvenile nonhomicide offender, it does not require the State to release that offender during his natural life. Those who commit truly horrifying crimes as juveniles may turn out to be irredeemable, and thus deserving of -8- incarceration for the duration of their lives. The Eighth Amendment does not foreclose the possibility that persons convicted of nonhomicide crimes committed before adulthood will remain behind bars for life. It does prohibit States from making the judgment at the outset that those offenders never will be fit to reenter society. Id. at 75. After Graham, a few points are clear: Tennessee is prohibited from sentencing juvenile nonhomicide offenders to life without parole; juvenile nonhomicide offenders can remain incarcerated for life so long as they are given a “meaningful opportunity to obtain release based on demonstrated maturity and rehabilitation;” and it is for our State to decide “the means and mechanisms for compliance” with Graham’s holding. Id. Less clear from Graham, however, is how to define a “meaningful opportunity to obtain release based on demonstrated maturity and rehabilitation.” Id. That question, while an important one, is not determinative for the analysis today because Graham is distinguishable from this case. Simply put, Graham applies to cases in which a juvenile is convicted of a nonhomicide crime and sentenced to life without parole. In this case, Mr. Booker was convicted of homicide and received a life sentence—not a sentence of life without parole. In Miller, the Supreme Court held that the Eighth Amendment forbids mandatory imposition of a life-without-parole sentence on juveniles convicted of homicide. Miller, 567 U.S. at 479–80; see Montgomery, 577 U.S. at 193 (“In Miller[], the Court held that a juvenile convicted of a homicide offense could not be sentenced to life in prison without parole absent consideration of the juvenile’s special circumstances in light of the principles and purposes of juvenile sentencing.”); Jones, 141 S. Ct. at 1311 (“Under Miller[ ], an individual who commits a homicide when he or she is under [eighteen] may be sentenced to life without parole, but only if the sentence is not mandatory and the sentencer therefore has discretion to impose a lesser punishment.”). Therefore, Miller does not prohibit life- without-parole sentences, nor does it prohibit all mandatory sentencing schemes in the juvenile context. Miller, 567 U.S. at 480. Miller requires that, before a juvenile homicide offender is sentenced to life without parole, a sentencer must consider the offender’s youth and its accompanying characteristics before deciding the juvenile is incorrigible and must spend the rest of his days in prison. Id. at 479–80. The Supreme Court has clarified that “Miller did not impose a formal factfinding requirement” on the sentencer. Montgomery, 577 U.S. at 211. Rather, it is up to States to determine the mechanisms to comply with Miller’s mandate. Id. This means that not only is the sentencer relieved of making a specific finding of incorrigibility, but also he or she is relieved of making any specific factual findings on the record. Jones, 141 S. Ct. at 1316, 1320 (stating “Miller did not require the sentencer to make a separate finding of permanent incorrigibility before imposing [life without parole]” and “Miller did not say a word about requiring some kind of particular sentencing explanation with an implicit finding of -9- permanent incorrigibility, as Montgomery later confirmed”). The discretionary scheme itself is sufficient, the Supreme Court explained, because it “allows the sentencer to consider the [offender’s] youth, and thereby helps ensure that life-without-parole sentences are imposed only in cases where that sentence is appropriate in light of the [offender’s] age.” Id. at 1318. After Miller (and Montgomery/Jones), two points are clear: (1) Tennessee can impose a life-without-parole sentence on a juvenile homicide offender only if it does so under a discretionary sentencing scheme; and (2) federal constitutional law, based upon Supreme Court precedent, does not require a sentencer to make any specific findings on the record before sentencing a juvenile homicide offender to life without parole, including that the juvenile is incorrigible.7 Because Mr. Booker was under the age of eighteen at the time he committed a homicide, and because his life sentence was mandatorily imposed,8 Miller’s holding could be viewed as providing guidance in this case. One, however, cannot ignore an important distinguishing fact: Mr. Booker was sentenced to life imprisonment, not life without parole. Thus, the main issue Mr. Booker asks this Court to contemplate, and what is still left unclear following Miller and its progeny, is: do the Eighth Amendment protections, as interpreted by Miller, apply to sentences that are not life without parole in name but could 7 Few state courts have interpreted or applied Jones since it was released. Among the courts that have, the above-mentioned rules are clear. See, e.g., Holmes v. State, 859 S.E.2d 475, 480–81 (Ga. 2021); Elliott v. State, No. CR-20-407, 2021 WL 2012632, at 5 (Ark. May 20, 2021); Wynn v. State, No. CR- 19-0589, 2021 WL 2177656, at 8–9 (Ala. Crim. App. May 28, 2021); State v. Miller, 861 S.E.2d 373, 380 (S.C. Ct. App. 2021); Harned v. Amsberry, 499 P.3d 825, 833 (Or. Ct. App. 2021). However, Jones has left some state court decisions now in question. See People v. Dorsey, 183 N.E.3d 715, 727 (Ill. 2021) (determining that Illinois Supreme Court precedent, which held the protections of Miller and Montgomery apply equally to mandatory and discretionary life-without-parole sentences is “questionable in light of Jones,” but that, overall, Jones approves of the state’s discretionary sentencing scheme at issue in that case); People v. Ruiz, No. 1-18-2401, 2021 WL 2102850, at 12 (Ill. App. Ct. May 25, 2021) (concluding that the Illinois Supreme Court can require more fact finding procedures under Miller than those stated in Jones); People v. Terry, No. 1-18-2084, 2021 WL 2290798, at 4 (Ill. App. Ct. May 28, 2021) (stating that the impact of Jones is “unclear” on Illinois Supreme Court precedent). 8 As previously noted, although Tennessee’s first-degree murder sentencing scheme can result in the sentencer having discretion, supra note 3, Mr. Booker’s sentence of life imprisonment was imposed mandatorily because he is not eligible for the death penalty and the State did not seek a sentence of life without parole. Had the State sought life without parole, under Tennessee law, a jury would have had discretion to sentence Mr. Booker to either life without parole—if it unanimously determined that the State proved at least one aggravating factor beyond a reasonable doubt—or life imprisonment. See Tenn. Code Ann. § 39-13-207(a)–(c) (2014) (amended 2021 & 2022). In Tennessee, so long as the proper notice is given, it appears that this type of sentencing discretion is what Miller suggests as a constitutionally sufficient procedure for sentencing a juvenile to life without parole. Miller, 567 U.S. at 478–80, 489. However, that is not the scenario presented today because the State did not seek a life-without-parole sentence in this case. - 10 - be considered the functional equivalent to a life-without-parole sentence? Stated another way, does Tennessee’s life sentence—a sixty-year sentence that requires at least fifty-one years imprisonment before an opportunity for release—offend the Eighth Amendment and principles of Miller when applied to a juvenile convicted of homicide? C. State and Federal Court Analysis of the Functional Equivalency Issue9 Tennessee clearly is not the only state court to contemplate whether Miller applies to lengthy sentences that are not life without parole in name. Because the United States Supreme Court has not answered this question, and it is an issue of first impression for this Court, we consult the decisions of our lower courts, other state courts, and federal courts for guidance. Overall, research shows there is no consensus on this issue. Tennessee courts consistently have held that Tennessee’s life sentence is not unconstitutional under the Eighth Amendment and Miller because it “permits release eligibility after serving fifty-one years.” State v. Polochak, No. M2013-02712-CCA-R3- CD, 2015 WL 226566, at 34 (Tenn. Crim. App. Jan. 16, 2015); see also State v. Douglas, No. W2020-01012-CCA-R3-CD, 2021 WL 4480904, at 24–25 (Tenn. Crim. App. Sept. 30, 2021) (listing other Tennessee cases). Additionally, the courts have recognized that “[w]hile the next logical next step may be to extend protection to these types of sentences, that is not the precedent which now exists.” Polochak, 2015 WL 226566, at 34 (quoting Perry v. State, No. W2013-00901-CCA-R3-PC, 2014 WL 1377579, at 5 (Tenn. Crim. App. Apr. 7, 2014)); see also State v. Fitzpatrick, No. M2018-02178-CCA-R3-CD, 2021 WL 3876968, at 8 (Tenn. Crim. App. Aug. 31, 2021) (“The power to break with well- established precedent does not lie with this court, and we are not prepared to expand the parameters of the Eighth Amendment in this regard, notwithstanding the fact that the Defendant’s sentence ‘may push, and possibly exceed, the bounds of his life expectancy[.]’” (alteration in original) (quoting State v. King, No. W2019-01796-CCA- R3-CD, 2020 WL 5352154, at 2 (Tenn. Crim. App. Sept. 4, 2020)). 9 The concurring opinion professes that our lengthy discussion of the functional equivalency issue is a “puzzler” and “makes little sense” because neither the plurality nor the concurring opinion relies on such an analysis. The answer as to why such a detailed discussion is necessary is two-fold and very simple. First, Mr. Booker raised this issue as a primary argument to support his position. Indeed, Mr. Booker’s counsel spent the majority of his time at the first oral argument of this appeal advocating for an application of Miller to this case, while mentioning an evolving standards of decency/independent judgment analysis only in passing during rebuttal. Second, the overwhelming number of other state and federal courts that have invalidated juvenile sentences under the Eighth Amendment in similar cases have done so on the basis of a functional equivalency analysis. Indeed, today this Court becomes the only court in the country to base its holding on “the well-established Supreme Court [Eighth Amendment] analytical framework” in order to find such a statute unconstitutional under the United States Constitution. Of course, this “well-established framework” is an evolving standards of decency/independent judgment analysis. The fact that both the plurality and the concurrence for some reason chose to ignore this important argument is their choice and not binding or limiting upon us. - 11 - As for other state courts, some have decided that the protections of Miller apply equally to a juvenile homicide offender sentenced to life without parole and to a lengthy term of years when the lengthy term-of-years sentence is the functional equivalent of life without parole or a de facto life-without-parole sentence.10 See Casiano v. Comm’r of Corrs., 115 A.3d 1031, 1044 (Conn. 2015) (concluding that Miller applies to a sentence not based on its label but rather because it is lengthy, does not offer parole, and requires the juvenile to actually be imprisoned for the rest of his or her life); State v. Shanahan, 445 P.3d 152, 159 (Idaho 2019) (“Because the Supreme Court has ‘counsel[ed] against irrevocably sentencing [juveniles] to a lifetime in prison’ without consideration of the Miller factors, we conclude that the rationale[] of Miller . . . also extend[s] to lengthy fixed sentences that are the functional equivalent of a determinate life sentence . . . .” (first and second alteration in original) (citation omitted)); People v. Reyes, 63 N.E.3d 884, 888 (Ill. 2016) (per curiam) (“[W]e hold that sentencing a juvenile offender to a mandatory term of years that is the functional equivalent of life without the possibility of parole constitutes cruel and unusual punishment in violation of the [E]ighth [A]mendment.”); State v. Ragland, 836 N.W.2d 107, 121–22 (Iowa 2013) (holding under the Eighth Amendment and Iowa state constitution that “Miller applies to sentences that are the functional equivalent of life without parole”); Carter v. State, 192 A.3d 695, 725 (Md. 2018) (“The initial question is whether a sentence stated as a term of years for a juvenile offender can ever be regarded as a sentence of life without parole for purposes of the Eighth Amendment. It seems a matter of common sense that the answer must be ‘yes.’”); State ex rel. Carr v. Wallace, 527 S.W.3d 55, 60 (Mo. 2017) (en banc) (“Miller controls because [the defendant] was sentenced to the harshest penalty other than death available under a mandatory sentencing scheme without the jury having any opportunity to consider the mitigating and attendant circumstances of his youth.”); State v. Kelliher, 873 S.E.2d 366, 370 (N.C. 2022) (holding that “any sentence or combination of sentences which, considered together, requires a juvenile offender to serve more than forty years in prison before becoming eligible for parole is a de facto sentence of life without parole within the meaning of article I, section 27 of the North Carolina Constitution because it deprives the juvenile of a genuine opportunity to demonstrate he or she has been rehabilitated and to establish a meaningful life outside of prison”); State v. Zuber, 152 A.3d 197, 201 (N.J. 2017) (“We find that the same concerns apply to sentences that are the practical equivalent of life without parole . . . . The proper focus belongs on the amount of real time a juvenile will spend in jail and not on the formal label attached to [the] sentence.”); Ira v. Janecka, 419 P.3d 161, 167 (N.M. 2018) (“We conclude that the analysis contained within Roper and its progeny should be applied to a multiple term-of-years sentence.”); White v. Premo, 443 P.3d 597, 605 (Or. 2019) (“We know of no state high court that has held that a sentence in excess of [fifty] years for a single homicide provides a juvenile with a meaningful opportunity for release. Given those particular circumstances, we conclude that petitioner’s [fifty-four-year-mandatory-minimum] sentence is sufficiently lengthy that a Miller 10 Curiously, neither Justice Lee’s plurality opinion nor Justice Kirby’s concurring opinion relies on a conclusion that Tennessee’s statute constitutes a de facto sentence of life without parole. - 12 - analysis is required.” (footnote and citation omitted)); State v. Ramos, 387 P.3d 650, 659 (Wash. 2017) (“We now join the majority of jurisdictions that have considered the question and hold that Miller does apply to juvenile homicide offenders facing de facto life-without- parole sentences.”). However, there is no clear line to determine when a sentence becomes the functional equivalent of life without parole. Compare Carter, 192 A.3d at 727–30, 734 (discussing five benchmarks courts have used to determine when a sentence becomes the functional equivalent to life without parole and concluding that fifty years before parole eligibility is equivalent to life without parole for purposes of the Eighth Amendment); Zuber, 152 A.3d at 212–13 (stating that Miller applies to a minimum sentence of fifty-five years imprisonment); Casiano, 115 A.3d at 1045–47 (stating that a sentence of fifty years imprisonment without parole triggers Miller protections); Reyes, 63 N.E.3d at 888 (concluding that a mandatory minimum sentence of eighty-nine years is a de facto life- without-parole sentence), with Shanahan, 445 P.3d at 160–61 (determining a fixed thirty- five-year sentence without the possibility of parole was not the functional equivalent of life without parole); State v. Diaz, 887 N.W.2d 751, 768 (S.D. 2016) (concluding that forty years in prison before parole eligibility was not a de facto life sentence); People v. Dorsey, 183 N.E.3d 715, 728–29 (Ill. 2021) (determining that a seventy-six-year sentence was not a de facto life-without-parole sentence because good-time credits made release after thirty- eight years a possibility). Other state courts have reached the opposite conclusion, that Miller’s holding is narrower and applies only to sentences that are life without parole in name. See Lucero v. People, 394 P.3d 1128, 1132 (Colo. 2017) (“Graham and Miller apply only where a juvenile is sentenced to the specific sentence of life without the possibility of parole for one offense.”); Wilson v. State, 157 N.E.3d 1163, 1176 (Ind. 2020) (“Miller, Graham, and Montgomery expressly indicate their holdings apply only to life-without-parole sentences.”); Hobbs v. Turner, 431 S.W.3d 283, 289 (Ark. 2014) (“[The defendant] was not subjected as a juvenile homicide offender to a mandatory life-without-parole sentence; therefore, Miller, is inapplicable.”); Lewis v. State, 428 S.W.3d 860, 863–64 (Tex. Crim. App. 2014) (holding that Miller did not apply to single sentence of life imprisonment with the possibility of parole after forty years imposed mandatorily on a juvenile homicide offender). This debate is further complicated by the fact that the majority of states that have answered the functional equivalency question have done so in the context of an aggregate sentence for multiple crimes, rather than a single term-of-years sentence, as is the factual scenario presented in this case. But see White, 443 P.3d at 603–04 (determining that Miller applies to a determinate 800-month minimum sentence for a single murder); Parker v. State, 119 So.3d 987, 996–99 (Miss. 2013) (concluding that Miller applies to a single sentence for “natural life” that is not eligible for parole but allows for conditional release at age sixty-five); Shanahan, 445 P.3d at 158–61 (acknowledging that Miller can apply to - 13 - a single sentence that is the functional equivalent of life without parole but that thirty-five years before parole eligibility was not the functional equivalent of life without parole). To reinforce the fact that the answer to this particular question remains unclear, federal jurisdictions have come down on both sides of this issue in the habeas corpus context.11 Compare Starks v. Easterling, 659 Fed. Appx. 277, 280–81 (6th Cir. 2016) (“Because the Supreme Court has not yet explicitly held that the Eighth Amendment extends to juvenile sentences that are the functional equivalent of life, and given the fact that lower courts are divided about the scope of Miller, we hold that the Tennessee courts’ decisions were not contrary to, or an unreasonable application of, clearly established federal law . . . .”), cert. denied, (Jan. 17, 2017); Demirdjian v. Gipson, 832 F.3d 1060, 1076–77 (9th Cir. 2016) (upholding the state court’s decision that Miller’s ban on mandatory life-without-parole sentences did not apply to defendant’s fifty-year sentence with parole eligibility at sixty-six years of age); Webster v. Royce, No. 97-cv-2146 (NG), 2021 WL 3709287, at *17 (E.D.N.Y Aug. 20, 2021) (holding that it was not unreasonable for a state court to deny petitioner relief from a sentence of fifty years before parole eligibility because “the Supreme Court has not ‘clearly established’ that a sentence of [fifty] years to life imposed on a juvenile is the ‘functional equivalent’ of life without parole”), with McKinley v. Butler, 809 F.3d 908, 911 (7th Cir. 2016) (overturning a state court decision and expressing reservations based on Miller about a 100-year sentence imposed on a juvenile). In short, courts around the country are divided concerning Miller’s application to lengthy sentences such as Mr. Booker’s. At this time, given no controlling authority to the contrary, I would conclude that we should remain consistent with Tennessee’s lower courts and join the other state courts that have adopted a narrower interpretation of Miller’s holding and United States Supreme Court Eighth Amendment precedent. See Slocumb, 827 S.E.2d at 156 (“Rather than predict what the Supreme Court may or may not do, we believe the proper course is to respect the Supreme Court’s admonition that lower courts must refrain from extending federal constitutional protections beyond the line drawn by the Supreme Court.”); Turner, 431 S.W.3d at 289 (“Miller prohibits a sentencing scheme that mandates life in prison without the possibility of parole for juveniles homicide offenders. [The defendant] was not subjected . . . to a mandatory life-without-parole sentence; therefore, Miller is inapplicable.” (citation omitted)); Wilson, 157 N.E.3d at 1175 (“And determining what sentence constitutes a ‘de facto life sentence’ would be a task completely unmoored from the language of Miller.”). 11 Under the Antiterrorism and Effective Death Penalty Act, a federal district court may grant relief to a petitioner only if his or her claim was heard on the merits and “resulted in a decision that was contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States.” 28 U.S.C. § 2254(d)(1). Therefore, the conclusion of the federal court in the habeas corpus context is not necessarily a review of the petitioner’s claim on the merits and has different weight or precedential value. - 14 - I reach this decision for two reasons. First, Miller’s holding expressly applies to life- without-parole sentences, and Tennessee’s life sentence is not that.12 Under Tennessee law, a life sentence guarantees release after sixty years and offers release as early as fifty-one years, if the offender earns good-time credits. Brown v. Jordan, 563 S.W.3d 196, 200 (Tenn. 2018) (“[F]or first-degree murders committed on or after July 1, 1995, a defendant must serve one hundred percent of sixty years less any sentence credits received, but the sentence credits cannot operate to reduce the sentence imposed by more than fifteen percent.”) (citing Tenn. Code Ann. § 40-35-501(i)). Therefore, not only does life imprisonment under Tennessee law guarantee release at a certain point, the sentencing scheme offers Mr. Booker the opportunity to obtain release nine years early through earning good-time credits. See Tenn. Code Ann. § 40-35-501(h)(1), (i)(1), & (i)(2)(a) (2014) (amended 2020); Tenn. Code Ann. § 41-21-236 (2014). For a juvenile like Mr. Booker, who is sentenced to life imprisonment at the age of sixteen or seventeen, he or she can expect to remain incarcerated until at least age sixty-seven and at most age seventy- seven. While quite lengthy, I cannot say that Tennessee’s life sentence, considered under the current Eighth Amendment jurisprudence of the United States Supreme Court, is equivalent to a life-without-parole sentence with no meaningful opportunity to obtain release.13 See United States v. Mathurin, 868 F.3d 921, 934–36 (11th Cir. 2017) (determining that a sentencing scheme that offered the ability to earn good-time credits and reduce a sentence by seven years gave a juvenile offender “a reason to pursue and exhibit ‘maturity and rehabilitation’” and thus served as a “‘meaningful opportunity to obtain release’ during [the juvenile’s] lifetime” (quoting Graham, 560 U.S. at 75)); Dorsey, 183 N.E.3d at 733 (concluding that a sentence did not violate the Eighth Amendment or constitute a de facto life-without-parole sentence because the state’s day-for-day sentencing credit provided a defendant with “some meaningful opportunity to obtain release based on demonstrated maturity and rehabilitation” (quoting Graham, 560 U.S. at 75)). I do not believe it is wise or appropriate to extend Miller, or other existing Eighth Amendment precedent, by predicting whether the United States Supreme Court would extend its jurisprudence and hold unconstitutional a lengthy term-of-years sentence in this 12 Indeed, as previously noted, Tennessee law allows juveniles tried as adults to be subject to a sentence of life without parole. There appears to be no issue regarding the constitutionality of the life- without-parole statute. 13 Both Mr. Booker and the amici curiae parties argue that a person who spends the majority of his or her life incarcerated has a lower overall life expectancy and that there is convincing data that a juvenile incarcerated for fifty-one years or more is likely to die in prison before the opportunity for release. See Brief of Amici Curiae National Association of Criminal Defense Attorneys, Tennessee Association of Criminal Defense Attorneys, Amos Brown, and Charles Lowe-Kelly, State v. Booker, No. E2018-01439- SC-R11-CD, at 23–25 (Tenn. Dec. 2, 2020). While this data may be compelling, evaluation of such research and its impact on whether a particular sentence is appropriate punishment for a crime is a determination best left to the legislature. - 15 - context. See, e.g., Wilson, 157 N.E.3d at 1175 (“[D]etermining the reach of the [Eighth Amendment’s cruel and unusual punishment] clause is inherently a line drawing exercise best left to the U.S. Supreme Court.”). This Court must apply the holdings of the United States Supreme Court as they are written, not what we wish were true about the holding or how far we would like for the holding to extend.14 See, e.g., Jones, 141 S. Ct. at 1321–22 (“The dissent draws inferences about what, in the dissent’s view, Miller and Montgomery ‘must have done’ in order for the decisions to ‘make any sense.’ We instead rely on what Miller and Montgomery said . . . .” (citation omitted)). The United States Supreme Court certainly could choose to extend its aforementioned Eighth Amendment jurisprudence to a lengthy term-of-years sentence. However, unlike the majority, I do not find it appropriate to extend its precedent further than its own language. In no way do I wish to diminish the fact that Mr. Booker’s sentence requires over half a century of incarceration before any opportunity for release.15 However, for constitutional purposes, I cannot ignore that it not only offers the opportunity for release but also guarantees it. Therefore, Miller does not apply. 14 Mr. Booker argues, and Justice Kirby’s concurring opinion concludes, that a new national consensus has formed since Miller that sentences that require a minimum of fifty years of incarceration or more, when applied to a juvenile, trigger the protections of Graham and Miller. The United States Supreme Court may very well choose to take up this issue and hold in accord. However, the data relied on by the Supreme Court in Roper and Graham to reach the conclusion that a new national consensus had formed with regard to the particular punishment in those cases varies widely. See Roper, 543 U.S. at 564–68 (relying on legislative enactments and infrequent imposition of the juvenile death penalty in a majority of states); Graham, 560 U.S. at 62–67 (relying on actual sentencing practices rather than legislative action or inaction). Perhaps more importantly, the purported national consensus applied in this case in no way developed in an organic manner as was the situation in Roper and Graham. Many of the legislative and judicial decisions relied upon by the concurrence arose simply as responses to Miller. As a result, I do not believe that we can predict with confidence what the Supreme Court may say when viewing the existing data Mr. Booker highlights in his brief. Likewise, given these circumstances, I am not prepared to find that a national consensus exists in this case similar to the ones found in Roper and Graham. 15 Both the plurality and especially the concurring opinion make much of the fact that Tennessee imposes the harshest sentence in the nation in terms of years of service. Yet, no less than Justice Anthony Kennedy, the author of the majority opinions in Roper, Graham, and Montgomery, and one of the Justices in the majority in Miller, has written very interestingly regarding a state having the most severe punishment for a particular crime. In Harmelin v. Michigan, a case relied upon in the plurality opinion, Justice Kennedy opines as follows: [M]arked divergences . . . in the length of prescribed prison terms are the inevitable, often beneficial, result of the federal structure. . . . Thus, the circumstance that a State has the most severe punishment for a particular crime does not by itself render the punishment grossly disproportionate. Our Constitution is made for people of fundamentally differing views. . . . Absent a constitutionally imposed uniformity inimical to traditional notions of federalism, some State will always bear the distinction of treating particular offenders more severely than any other State. 501 U.S. 957, 999–1000 (1991) (Kennedy, J., concurring) (internal quotation marks and citation omitted). - 16 - Second, this Court has long recognized that it is the distinct job of the legislature to make policy decisions and to determine the appropriate sentence or punishment for a crime. See State v. Gentry, 538 S.W.3d 413, 420 (Tenn. 2017) (citing State v. Burdin, 924 S.W.2d 82, 87 (Tenn. 1996)); State v. Harris, 844 S.W.2d 601, 602 (Tenn. 1992) (citing Solem v. Helm, 463 U.S. 277, 289–90 (1983)). In the specific context of Miller, the Supreme Court has reiterated that States are not “preclude[d] . . . from imposing additional sentencing limits in cases involving defendants under [eighteen] convicted of murder.” Jones, 141 S. Ct. at 1323. In fact, since Miller, a majority of the state legislatures and the District of Columbia have acted to reform their criminal sentencing laws as they relate to juvenile homicide offenders.16 However, to date, Tennessee’s legislature is not among them. Even very recently, the General Assembly has considered bills to reform Tennessee’s first- degree-murder sentencing scheme not only for juveniles but also for all adult offenders. See S.B. 1452, 112th Gen. Assem. (2021) (proposing to reduce the minimum amount of time a juvenile convicted of first-degree murder is required to serve before becoming release-eligible from fifty-one years to thirty years); S.B. 0561, 112th Gen. Assem. (2021) (proposing to reduce the portion of a person’s sentence for first-degree murder that must be served prior to becoming eligible for parole to sixty percent of sixty years if sentenced to imprisonment for life for an offense committed during certain dates or 100 percent of sixty years if sentenced to imprisonment for life without the possibility of parole). In fact, Senate Bill 0561, which proposed parole eligibility after thirty-six years for offenders convicted of first-degree murder during a certain time and sentenced to life imprisonment, among other provisions, passed with only four dissenting votes in the Senate on April 22, 2021.17 However, this measure, and similar measures, have stalled at some point in the legislative process. So, while I certainly recognize that Tennessee’s life sentence, as applied to juveniles, is lengthy in comparison to other States, upon answering the constitutional question in this case, this Court should defer to the legislative process and the legislature’s distinct role in making “broad moral and policy judgments in the first instance [by] enacting [the] sentencing laws.” Jones, 141 S. Ct. at 1322; see also State v. Black, 815 S.W.2d 166, 178 (Tenn. 1991) (“Justice Fones, speaking for the Court, stated: ‘The validity and humanity of that complaint should be addressed to the Legislature. This Court’s authority over punishment for crime ends with the adjudication of constitutionality.’” (quoting State v. Adkins, 725 S.W.2d 660, 664 (Tenn. 1987))). I continue to urge the legislature to take up this important issue. 16 See Josh Rovner, Juvenile Life Without Parole: An Overview, THE SENTENCING PROJECT, (May 24, 2021), https://www.sentencingproject.org/publications/juvenile-life-without-parole/ (summarizing state legislative action since Miller). 17 See S.B. 0561, 112th Gen. Assem., Bill History, https://wapp.capitol.tn.gov/apps/BillInfo/default.aspx?BillNumber=SB0561&GA=112 (last visited Nov. 16, 2022). - 17 - In response to this dissenting opinion, the plurality announces that it “will not shirk [its] duty and ignore an injustice.” Respectfully, those of us in dissent are far from shirking our duty and ignoring an injustice. To the contrary, I would submit that the exercise of judicial restraint in the face of bad policy, particularly involving vulnerable juveniles, is perhaps the ultimate exercise of our judicial responsibility. Indeed, the eloquent words of Justice Felix Frankfurter directly address this point: “For the highest exercise of judicial duty is to subordinate one’s personal pulls and one’s private views to the law of which we are all guardians—those impersonal convictions that make a society a civilized community, and not the victims of personal rule.” Tom C. Clark, Mr. Justice Frankfurter: “A Heritage for All Who Love the Law,” 51 A.B.A. J. 330, 332 (1965). I stress that I do not arrive at my conclusion today without serious concerns and reservations. Although I cannot say that Mr. Booker’s sentence is unconstitutional under the Eighth Amendment to the United States Constitution, the words of Justice Brett Kavanaugh in Jones are equally or perhaps even more appropriate in the context of this case: To be clear, our ruling on the legal issue presented here should not be construed as agreement or disagreement with the sentence imposed against Jones. As this case again demonstrates, any homicide, and particularly a homicide committed by any individual under [eighteen], is a horrific tragedy for all involved and for all affected. Determining the proper sentence in such a case raises profound questions of morality and social policy. The States, not the federal courts, make those broad moral and policy judgments in the first instance when enacting their sentencing laws. And state sentencing judges and juries then determine the proper sentence in individual cases in light of the facts and circumstances of the offense, and the background of the offender. Jones, 141 S. Ct. at 1322. III. CONCLUSION For these reasons, I am compelled to hold that Tennessee’s life sentence, as applied to juveniles, does not violate the Eighth Amendment, as interpreted by the United States Supreme Court in Miller. In reaching this conclusion, I suggest the parallel of Justice Kavanaugh’s words in Jones applies here. State courts must not make broad moral and social policy judgments. Our constitution leaves those decisions to the legislative branch. The majority’s conclusion today to the contrary impermissibly crosses the parameters imposed on our judiciary by our constitution. While perhaps representing good, sound policy, the majority’s conclusion fails to allow this issue to be resolved appropriately “by our Legislature as the representatives of the people.” State v. Barber, 753 S.W.2d 659, 670 (Tenn. 1988). - 18 - For these reasons, I respectfully dissent. _________________________________ JEFFREY S. BIVINS, JUSTICE - 19 -	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487750/	NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ___________ No. 22-2117 ___________ ABDUS SHAHID, Appellant v. MARK POSSENTI; BOROUGH OF DARBY ____________________________________ On Appeal from the United States District Court for the Eastern District of Pennsylvania (E.D. Pa. Civil Action No. 2:22-cv-01015) District Judge: Honorable Gerald A. McHugh ____________________________________ Submitted Pursuant to Third Circuit LAR 34.1(a) November 15, 2022 Before: SHWARTZ, BIBAS, and PHIPPS, Circuit Judges (Opinion filed: November 18, 2022) ___________ OPINION* ___________ PER CURIAM Pro se appellant Abdus Shahid appeals the District Court’s dismissal of his complaint, in which he raised civil rights claims under 42 U.S.C. § 1983 against * This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. defendants Mark Possenti and Darby Borough. For the reasons that follow, we will affirm the District Court’s judgment. In 2022, Shahid filed a complaint in the District Court. He stated that he owned a warehouse in Darby, Pennsylvania, which had ten rental units. In his complaint and in additional filings in the District Court, Shahid alleged that from 2014-2022, Possenti — as manager of Darby Borough — illegally evicted Shahid’s tenants, reinstalled those tenants, and used the police to extort rent from them for his own benefit. Shahid believes that he was targeted for this action because of his race and national origin. On defendants’ motion, the District Court dismissed Shahid’s complaint with prejudice for failure to state a claim. In its decision, the District Court outlined Shahid’s extensive history of prior state and federal lawsuits against Possenti and Darby Borough, raising similar or related allegations about his warehouse property. The District Court cautioned Shahid that he could face sanctions if he submitted frivolous filings in the future, given his litigation history. Shahid timely appealed. We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. We exercise plenary review over the District Court’s dismissal of Shahid’s claims.1 See Fowler v. UPMC Shadyside, 578 F.3d 203, 206 (3d Cir. 2009). We agree with the District Court’s dismissal of Shahid’s claims. As we have 1 In our review, we consider the complaint, any “document integral to or explicitly relied upon” in framing the complaint, see Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (internal citation and emphasis omitted), and any “undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff’s claims are based on the document,” see Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). 2 explained before, Shahid’s conclusory belief that he suffered discrimination, without factual allegations to support that belief, is insufficient to survive dismissal. See Burtch v. Milberg Factors, Inc., 662 F.3d 212, 225 (3d Cir. 2011) (explaining that conclusory allegations “are not entitled to assumptions of truth”); see also Shahid v. Borough of Darby, 666 F. App’x 221, 223 (3d Cir. 2016) (per curiam) (affirming the dismissal of Shahid’s § 1983 claims of discriminatory treatment against Darby Borough in an action regarding his warehouse property, where Shahid did not provide factual allegations of discrimination). Additionally, the District Court did not abuse its discretion by declining to grant Shahid leave to amend his complaint. See Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002). Amendment would be futile under the circumstances of this case; Shahid has not provided any factual allegations in the District Court or on appeal to suggest that his claims could proceed. Further, the District Court appropriately noted both Shahid’s bad faith actions and the prejudice to defendants if Shahid were granted leave to amend, given his extensive history of repetitive, meritless litigation against them. Accordingly, we will affirm the judgment of the District Court. 3	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494133/	REASONS FOR DECISION HENLEY A. HUNTER, Bankruptcy Judge. This matter comes before the Court on Cottonport Bank’s Motion for Relief from Stay and Abandonment for the Limited Purpose of Obtaining Right of Way and the debtors’ Opposition. This is Core Proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (G), (M) and (O). This Court has jurisdiction pursuant to 28 U.S.C. § 1334 and by virtue of the reference by the District Court pursuant to Local District Court Rule 83.4.1 incorporated into Local Bankruptcy Rule 9029.3. No party at interest has sought to withdraw the reference and the district court has not done so on its own motion. This Court makes the following findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052. Pursuant to these reasons, the Motion will be denied. FINDINGS OF FACT AND CONCLUSIONS OF LAW Debtors filed a voluntary petition under Chapter 13 on September 21, 2004, listing two parcels of real estate on Schedule A. One tract consisted of eight acres and the other was a contiguous 36 acre tract. Debtors’ plan proposed to keep the eight acre tract which comprised debtors’ residence subject to a homestead exemption. The Cottonport Bank (hereinafter, “the bank”) filed a claim in the amount of $2,006,062.12, plus interest at 18% and attorney fees of up to 25%. The claim lists a “Summary of Collateral” consisting of a judgment, being a Summary Judgment in various amounts rendered March 11, 2003, and a number of notes, commercial guaranty and pledge agreements. The debtors proposed to surrender the 36 acre tract to the bank, and it objected to confirmation. 604The bank also sought relief from they stay based on its judicial mortgage affecting both tracts. On October 28, 2004, the Court held a hearing on the bank’s Motion for Relief from Stay, at which time it was determined that the bank, being only a judgment creditor rather than a consensual lien holder, could not prevent the dismemberment of the two tracts of land, and the stay was lifted as to the non-residential property, but the motion was denied as to the residential tract. Once the stay was lifted as to the non-residential tract, the bank obtained the property by foreclosure. Two years later, the bank comes before the Court in the instant motion, alleging the tract is enclosed property, and seeks the lifting of the stay as to the residential tract for the purpose of obtaining a servitude of passage in the state court, pursuant to La.Civ.Code art. 694. On December 9, 2004, this Court entered the Order submitted by counsel to the bank and counsel to the debtors, wherein the stay was lifted as to the 36.50 acre tract and abandoning the same from the estate. That order further provided that the stay shall remain in effect as to the debtors’ eight acre tract, and contained provisions that would permit the lifting of the stay in the event of a default in maintaining insurance coverage or plan payments. The debtors’ plan was confirmed on January 13, 2005. On August 21, 2006, Cottonport Bank filed the instant motion to lift the automatic stay for the limited purpose of pursuing a right of way, to which debtors opposed. The thrust of the bank’s motion is that as foreclosure proceedings on the 36 acre tract occurred, it was determined that there was no access or right of way to that tract except through the eight acre tract comprising the debtors family home. The bank alleges that the 36 acre tract became an “enclosed estate,” without access to the nearest road, thus preventing a successful sale. The bank asserts, notwithstanding its request for relief from the stay, that the stay does not actually apply in this instance under § 362(a)(1) because the cause of action to obtain a right of way arose post-petition. Debtors oppose the bank’s request for relief, asserting, inter alia, that the stay applies as the bank is seeking to “exercise control” over the property of the estate under § 326(a)(3), and further, that the bank failed to meet its burden of establishing a prima facie case. Debtors argue that the bank has failed to establish the necessary standing to bring an action for such a right of way under the applicable state statute, asserting that the remedy is not available to the bank since its acquisition of the property was by a sheriffs sale, and thus involuntary. Louisiana Civil Code 693 provides that if a tract becomes enclosed as a result of a voluntary act or omission of its owner, the neighbors are not obliged to furnish a passage to him; and Civil Code article 694 provides that access may be sought if lost as a result of a voluntary alienation or partition, the neighbor shall be furnished by the neighbor gratuitously, even if the act of alienation or partition does not mention a servitude of passage. The first issue to be determined is whether the automatic stay applies to the bank’s cause of action to obtain the servitude of passage against the debtors’ residential property. In Louisiana, a servitude is a real right and may follow the real estate to which it pertains, continuing as a charge on the “servient estate” when ownership changes. La.Civ.Code art. 650. This Court concludes that the relief requested here is in fact the first of the historical components of ownership in Louisiana, which consists of usus, fructus, and abusus. Thus, by its terms, § 362 prohib605iting action to use or otherwise exercise control over of property of the estate applies. This court finds that the grant of a servitude constitutes a use of property and is thus barred by the automatic stay. Moreover, the Court points to the Order submitted by the parties dated December 9, 2004, since these parties have expressly stipulated that the automatic stay remains in effect as to the residential tract, that agreement is binding on the bank. Having established that the stay applies, this Court turns to whether the Motion to Lift the Stay for the limited purpose of obtaining the servitude of passage should be granted. At the outset, the Court finds the bank’s assertion that its knowledge of the access problem arose post-petition is disingenuous. The 36 acre tract and the eight acre home tract were purchased at different times for different purposes; the former being a failed commercial development, which was also evident from the commercial nature of the original loan agreements. (See “Summary of Collateral” attached to the bank’s proof of claim, including numerous commercial guaranties, security agreements, and the legal description for the 36.50 tract expressly describing same as “[bjeing the same property acquired from the Cottonport Bank by Cash Deed Dated October 17, 1997, recorded in COB A-_, entry no. 97-_, records of Avoyelles Parish.”) In short, the bank’s own documentary support for its claim suggests that it was an ancestor in title. Further, the vice-president of the bank, Mr. Ben Luke, testifying in support of the instant motion, made a vague reference to another possible means of access to a public highway. Bankruptcy courts have had the occasion to address requests for similar relief. In Hudson Valley Cablevision Corp. v. Route 202 Developers Inc., 169 B.R. 531 (S.D.N.Y.1994), relief from stay was sought to permit a cable television company to determine its easement rights. The bankruptcy court recommended the matter be resolved by a stipulation that did not later materialize. Debtor made no showing of a hardship or interference with its reorganization plan. The bankruptcy court denied relief and the district court reversed on appeal, finding that since the cable lines already existed, permitting them to be serviced would not jeopardize the reorganization or the interests of other creditors, and thus the stay should be lifted. The government’s eminent domain power has been held not to constitute an exception to the automatic stay within the governmental police and regulatory power exception. In re PMI-DVW Real Estate Holdings, L.L.P., 240 B.R. 24 (Bankr.D.Ariz.1999). In that case, the Court held that a taking of the property under eminent domain constituted an effort to exercise control over the property. However, another bankruptcy court concluded that the government’s eminent domain power did fall within the exception to the stay for the government’s police or regulatory power. In re Bevelle, 348 B.R. 812, 2006 WL 2474849 (Bankr.N.D.Ala.2006). Here, however, this Court is not confronted with an exercise of the government’s eminent domain power, but, instead, merely a dispute regarding a right of way or servitude. Looking to Louisiana law, in Petrovich v. Trabeau, 780 So.2d 1258 (2001), writ denied, 793 So.2d 1251 (2001), Petrovich acquired a tract of land from his mother including a right of way over an adjacent lot, affording access to a public road. Petrovich’s mother then conveyed another tract to Petrovich and his niece, Karen Trabeau, which also recognized the right of way. When the mother died, Petrovich and two other relatives acquired her remaining property interests. 606A partition ensued, in which Petrovich obtained sole ownership of a tract of land fronting on one public road and another tract fronting on another highway. The original rights of passage in the earlier transactions were abandoned. Petrovich then lost tract of the largest tract of land at a sheriffs sale and then conveyed another tract with a right of way. Landlocked, he sought to obtain a right of way over the Trabeau property. Relying on Spotsville v. Herbert & Murrell, Inc., 698 So.2d 31 (1997), the Court discussed the proper application of Civil Code Articles 693 and 694. It concluded that Petrovich was not entitled to a right of passage due to his failure to pay his creditors. The court held that “[t]he intention of the Civil Code Articles allowing for the grant of a right of passage was to allow those people whose land is enclosed through no fault of their own to obtain servitude. To allow a person who has voluntarily lost a right of passage to obtain one through these Articles would go against the intent of the Civil Code and all logic.” Petrovich, 780 So.2d at 1260. The Court noted that Petrovich did not seek a right of passage over the property he lost at sheriffs sale, which he might possibly have argued was a forced transaction, but the court found the sale resulted from Petrovich’s own failure to pay his creditors. Subsequent commentary notes that the interpretation of Article 693 in Petrovich may apply to situations where the enclosure at issue results from “juridical facts, i.e. debts arising from the fault of the landowner, which are ultimately remedied with the sheriffs sale.” Scott D. Huffstetler, Don’t Fence Me In: Louisiana’s Fourth Circuit Expands “voluntariness” under Louisiana Civil Code Article 693, 63 La.L.Rev. 111 (Fall 2002). The author notes that the standard “voluntary act or omission” is “both vague and ambiguous.” Id. A broad interpretation of the phrase would be contrary to the Louisiana Supreme Court’s prerogative of “favoring the right of passage.” Thus, the writer notes, courts should interpret Article 693 narrowly- Inasmuch as this Court’s reading of Pe-trovich and the above commentary suggests that it is the debtors’ own failure to pay their creditors that resulted in this imbroglio and that they are not entitled to rely on the Sheriff Sale as a factor that militates against granting relief to the bank, debtor’s position that the transfer was involuntary is overstated. Given Louisiana’s policy of favoring the right of way, this Court could conclude that relief should be granted if presented with a prima facie case of entitlement to the servitude under state law. But this Court finds the prima facie case only elusively presented in Mr. Luke’s ambiguous testimony as to the existence of another route and the documentary facts showing the bank was itself once a prior owner of the enclosed tract, and thus an ancestor in title to the debtors. Further, before the Court can even reach the prima facie case issue, once finding the stay is in effect as to the residential property both by virtue of § 362(a)(3) and by the parties’ stipulation as to the application of the stay in the Order dated December 9, 2004, the Court further finds that su-perceding its own interpretation of Louisiana property law is the fact that the two contemplated means by which the stay could be lifted, namely debtors’ failure to make plan payments and debtors’ failure to maintain insurance, have not been raised. While this Court might normally defer to the state court’s ultimate determination its property law, the parties are bound by both the plan and their own agreed order imposing the stay as to the residential property with the potential for relief from the stay linked to the debtors’ 607failure to either make plan payments or maintain insurance on the property. This Court finds that absent the debtor’s failure to make plan payments or maintain insurance, pursuant to the bank’s own stipulation, the stay as to the residential tract remains in effect. Conclusion Therefore, this Court concludes the residential tract is property of the Chapter 13 estate, protected by the automatic stay, and further concludes the Motion to Lift the Stay should be denied for failure of the bank to support its motion to lift stay by alleging the previously stipulated grounds for relief and for further failing to present a prima facie case of entitlement to the servitude as a matter of state law. Accordingly, Cottonport Bank’s Motion for Relief from Stay and Abandonment for the Limited Purpose of Obtaining Right of Way is DENIED. A separate and conforming order will be entered.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494134/	MEMORANDUM OF OPINION AND ORDER PAT E. MORGENSTERN-CLARREN, Bankruptcy Judge. Prepetition, Frederick G. Voltz, trustee of the Voltz Family Trust dated 9/25/95, obtained a state court judgment against ProCare Automotive Service Solutions, LLC based on damages for termination of a real estate lease. Voltz filed a proof of claim in ProCare’s chapter 11 case for the full amount of the judgment. The debtor objects, arguing that the claim is subject to the cap set forth in 11 U.S.C. § 502(b)(6). Voltz responds that preclusion principles make that cap inapplicable. For the reasons stated below, the court finds that the statute applies and sustains the objection in part, with the remaining issues to be resolved through an evidentiary hearing. JURISDICTION Jurisdiction exists under 28 U.S.C. § 1334 and General Order No. 84 entered by the United States District Court for the Northern District of Ohio. This is a core proceeding under 28 U.S.C. § 157(b)(2)(B). 655 BACKGROUND In 2005, Frederick G. Voltz, trustee of the Voltz Family Trust dated 9/25/95, obtained a Texas state court judgment against ProCare Automotive Service Solutions, LLC and Graceful E. Done, LLC, jointly and severally. The judgment was for $671,969.96 plus prejudgment interest, attorney fees, court costs, and post-judgment interest. ProCare appealed from that judgment. While that appeal was pending, ProCare filed its chapter 11 case. Voltz timely filed a proof of claim in the amount of $721,239.46 plus interest, attached a copy of the judgment, and stated that the basis for the claim was a real estate lease.1 Voltz acknowledges that the claim includes damages for future rent under the lease. The debtor objects to the claim. 11 U.S.C. § 502(b)(6) Bankruptcy code § 502(b)(6) provides that when a debtor objects to a claim: (b) ... the court, after notice and a hearing, shall determine the amount of such claim in lawful currency of the United States as of the date of the filing of the petition, and shall allow such claim in such amount, except to the extent that- * * * * * (6) if such claim is the claim of a lessor for damages resulting from the termination of a lease of real property, Such claim exceeds- (A) the rent reserved by such lease, without acceleration, for the greater of one year, or 15 percent, not to exceed three years, of the remaining term of such lease, following the earlier of- (i) the date of the filing of the petition; and (ii) the date on which such lessor repossessed, or the lessee surrendered, the leased property, plus (B) any unpaid rent due under such lease, without acceleration, on the earlier of such dates. 11 U.S.C. § 502(b)(6). ISSUE Should a claim based on a state court judgment that includes damages for termination of a real estate lease be reduced under 11 U.S.C. § 502(b)(6) before being allowed?2 THE POSITIONS OF THE PARTIES The debtor argues that the claim should be (1) reduced under bankruptcy code § 502(b)(6), but because Voltz did not provide enough documentation to calculate the reduction, the claim should be (2) disallowed in its entirety.3 Voltz responds that the state court judgment is final and must be allowed as filed under preclusion doctrines designed to give the appropriate respect to such judgments. Voltz also states that it provided ample documentation to support the § 502 calculation, if that calculation is needed.4 The debtor replies that the substance of the judgment as a claim for breach of a real estate lease controls, congressional intent is furthered by applying § 502(b)(6), and application of 656that statute does not undermine any preclusion doctrine. DISCUSSION A filed claim is deemed allowed unless a party in interest objects. 11 U.S.C. § 502(a). On objection, the court is to “determine the amount of such claim ... and allow such claim in such amount,” with certain exceptions. 11 U.S.C. § 502(b). One exception is where the claim is made by a lessor for damages resulting from the termination of a real property lease. In that case, the claim is allowed, except to the extent that future rent exceeds the cap set out in the statute. 11 U.S.C. § 502(b)(6). Section 502(b)(6) is not a formula for calculating the landlord’s total damages, but is instead a limitation on the damages that can be recovered for future rent. In re Steven Windsor, Inc., 201 B.R. 133, 135 (Bankr.D.Md.1996). Congress adopted this limitation based on principles of equity. The limitation, is aimed at compensating a lessor for his loss while not allowing a claim “so large (based on a long-term lease) as to prevent other general unsecured creditors from recovering a dividend from the estate. Thus, Congress intended to compensate landlords for their actual damages while placing a limit on large future, speculative damages which would displace other creditors’ claims.” Highland Superstores, Inc. v. Strobeck Real Estate, Inc. (In re Highland Superstores, Inc.), 154 F.3d 573, 577 (6th Cir.1998) (quoting Vause v. Capital Poly Bag, Inc., 886 F.2d 794, 801-02 (6th Cir.1989)). See also In re Thompson, 116 B.R. 610, 612 (Bankr.S.D.Ohio 1990) (noting that the section “was designed to compensate a landlord for his loss due to breach of a lease, yet preclude a claim so large as to prevent other general unsecured creditors from recovering a reasonable dividend from the estate.”). If Voltz had not obtained a judgment before the debtor filed its bankruptcy case, the claim would be subject to the § 502(b)(6) cap. The question here is whether the existence of the judgment alters that result. I. A claim is a “right to payment, whether or not such right is reduced to judgment!;.]” 11 U.S.C. § 101(5)(A). When a claim objection is filed, § 502(b) instructs the court to do a two-step analysis: first, (1) determine the amount of the claim; and then, (2) allow the claim — including a claim reduced to judgment — as provided for in that section. 11 U.S.C. § 502(b). See also Kohn v. Leavith-Berner Tanning Corp., 157 B.R. 523, 527 (N.D.N.Y.1993) (discussing this two-step analysis). In this case, the amount of the claim is determined by the state court judgment under the Full Faith and Credit statute and preclusion principles. The Full Faith and Credit statute, 28 U.S.C. § 1738, “ ‘requires federal courts to give the same preclusive effect to state court judgments that those judgments would be given in the courts of the State from which the judgments emerged’ ”. Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 81, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984) (quoting Kremer v. Chem. Constr. Corp., 456 U.S. 461, 466, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982)). The statute implements the long-standing rule “that parties should not be permitted to relitigate issues that have been resolved by courts of competent jurisdiction!;.]” San Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323, 336, 125 S.Ct. 2491, 162 L.Ed.2d 315 (2005). To qualify for full faith and credit, the judgment must be a valid, final judgment 657on the merits by a court of competent jurisdiction. Alabama v. Engler, 85 F.3d 1205, 1209 (6th Cir.1996). The parties agree that the Texas judgment meets this standard. As a result, the judgment is entitled to the same preclusive effect in federal court that it would receive under Texas law. The preclusion doctrine has two main components: res judicata (claim preclusion) and collateral estoppel (issue preclusion). The principle of collateral estoppel applies in bankruptcy cases. See Grogan v. Garner, 498 U.S. 279, 285, n. 11, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). The court must, therefore, decide what preclusive effect a Texas state court would give to the judgment under that doctrine. Texas law provides that collateral estoppel "applies when an issue decided in the first action is actually litigated, essential to the prior judgment, and identical to an issue in the pending action." Texas Dep't of Pub. Safety v. Petta, 44 S.W.3d 575, 579 (Tex.2001). The Texas judgment in this case held that ProCare was liable to Voltz under the real estate lease in the amount of $671,969.96 plus fees, costs, and interest. A Texas court would find that the debt- or's liability to Voltz under the lease has been determined, together with the total amount of the debt.5 Those findings are entitled to preclusive effect in this court. That is, however, the extent to which the judgment is entitled to preclu-sive effect. With liability and the amount of the debt established by state law, the second issue-the amount of the claim that should be allowed in the bankruptcy case-is decided under federal bankruptcy law. Voltz argues that the doctrine of res judicata bars this result. It does not. Res judicata (claim preclusion) "prevents litigation of all grounds for, or defenses to, recovery that were previously available to the parties, regardless of whether they were asserted or determined in the prior proceeding." Brown v. Felsen, 442 U.s. 127, 131, 99 S.Ct. 2205, 60 L.Ed.2d 767 (1979). Bankruptcy courts have exclusive jurisdiction over the claims allowance process. See Canal Corp. v. Finnman (In re Johnson), 960 F.2d 396, 404 (4th Cir.1992) ("[TJhe existence of a claim is controlled by state law, [but~ the allowance or disallowance of a claim in bankruptcy is a matter of federal law left to the bankruptcy court's exercise of its equitable powers.").6 The issue of the § 502(b)(6) cap was not available to the parties in the state court litigation because the Texas state court did not have jurisdiction over the claims allowance process. Res judicata does not apply under these circumstances.7 The bankruptcy code clearly pro~ vides that a claim for damages based on termination of a real estate lease is limited by the § 502(b)(6) cap. As a result, the Voltz claim as determined under state law may only be allowed in this bankruptcy case in the amount set by Congress. See Cutler v. Lindsey (In re Lindsey), 1997 658WL 705435 at 4-5 (4th Cir.1997); see also Kohn, 157 B.R. at 526-27 (N.D.N.Y.1993); In re Tittle, 346 B.R. 684, 689 (Bankr.E.D.Va.2006); Fifth Avenue Jewelers, Inc. v. Great East Mall, Inc. (In re Fifth Avenue Jewelers, Inc.), 203 B.R. 372, 382 (Bankr.W.D.Pa.1996); In re Fulton, 148 B.R. 838, 843-44 (Bankr.S.D.Tex.1992); In re Thompson, 116 B.R. 610, 612-13 (Bankr.S.D.Ohio 1990); Weeks v. Kinslow (In re Weeks), 28 B.R. 958 (Bankr.W.D.Okla.1983) (discussing former 11 U.S.C. § 502(b)(7) the statutory predecessor of current § 502(b)(6)); In re Bus Stop, Inc., 3 B.R. 26, 27 (Bankr.Fla.1980) (discussing former 11 U.S.C. § 502(b)(7)). II. Voltz argues that this result runs afoul of the Rooker-Feldman doctrine, named after the cases of Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). In particular, Voltz contends “the Debtor asks this Court in so many words to vacate the valid and final judgment of the Texas state court against the debtor. This is precisely what Rooker-Feldman is intended to preclude — the ‘entertaining] of [a] proceeding to reverse or modify [a state court] judgment for errors ... [and the] exercising] of appellate jurisdiction’ over a state court by a Federal district court.”8 The United States Supreme Court recently observed about Rooker-Feldman that: Variously interpreted in the lower courts, the doctrine has sometimes been construed to extend far beyond the contours of the Rooker and Feldman cases, overriding Congress’ conferral of federal-court jurisdiction concurrent with jurisdiction exercised by state courts, and superseding the ordinary application of preclusion law pursuant to 28 U.S.C. § 1738. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 283, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). The Exxon court went on to hold that: “[t]he Rooker-Feldman doctrine ... is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the [federal] court proceedings commenced and inviting [federal] court review and rejection of those judgments. Rooker-Feldman does not otherwise override or supplant preclusion doctrine .... ” Id. at 284, 125 S.Ct. 1517. This is not a ease brought by a state court loser seeking to overturn a state court judgment. The state court judgment stands as to liability and amount as discussed above. This proceeding is instead the debtor’s objection to a claim, and in particular, to the amount at which the claim should be eligible to participate in any distribution from the debtor’s estate. The Rooker-Feldman doctrine does not apply to this situation. III. The remaining issue is the actual calculation of the § 502(b)(6) reduction. In their briefs, the parties contend that different numbers apply to this analysis. This factual debate will need to be resolved through an evidentiary hearing. See In re Highland Superstores, Inc., 154 F.3d 573 (discussing the appropriate method for calculating damages under § 502(b)(6)). The court will hold a status *659conference on February 14, 2007 at 8:30 a.m. to address this issue. IT IS SO ORDERED. . Claims docket #122. . The parties did not cite any Sixth Circuit law on this issue and the court has not found any case directly on point based on its own research. . Docket 565, 681. . Docket 589, 713. . The judgment does not break out the amount attributable to future rents. . The court notes that in this case it is not exercising its equitable powers in allowing the claim. It is, instead, applying the statute in which Congress determined that it is equitable for a lessor's rent termination claim to be subject to a cap. . Voltz's case is not helped by the case it cites, Westport Taxi Serv,, Inc. v. Westport Transit Dist. (In re Westport Transit Dist.), 141 B.R:. 543 (Bankr.D.Conn.1992). The issue there was whether the court should lift the automatic stay to permit a state court appeal to go forward. The court did not analyze § 502(b)(6) or the doctrines at issue in this case. . Docket 589 at 6. (Alterations in the original).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494135/	MEMORANDUM OF DECISION AND ORDER GRANTING MOTION FOR SUMMARY JUDGMENT MARY ANN WHIPPLE, Bankruptcy Judge. This adversary proceeding is before the court on Defendant’s Motion for Summary Judgment [Doc. #11] and the Trustee opposition [Doc. # 12]. For the reasons that follow, the motion will be granted. BACKGROUND The relevant facts are not in dispute. On April 4, 2004, Debtors in the underly660ing Chapter 7 case executed a promissory note in favor of Defendant in the amount of $10,000. On the same date, Debtors executed a security agreement, listing in Exhibit A attached thereto collectable coins that were to be used as collateral for the loan. As provided in the security agreement, Defendant took possession of the coins listed in Exhibit A and continues to have physical possession of those coins. Debtors have made interest payments only on the promissory note and the principal amount of $10,000 remains unpaid. Debtors filed for relief under Chapter 7 of the Bankruptcy Code on August 27, 2005. LAW AND ANALYSIS Under Rule 56 of the Federal Rules of Civil Procedure, made applicable to this proceeding by Federal Rule of Bankruptcy Procedure 7056, summary judgment is proper only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In reviewing a motion for summary judgment, however, all inferences “must be viewed in the light most favorable to the party opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The party moving for summary judgment always bears the initial responsibility of informing the court of the basis for its motion, “and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where the moving party has met its initial burden, the adverse party “may not rest upon the mere allegations or denials of his pleading but ... must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue for trial exists if the evidence is such that a reasonable factfinder could find in favor of the non-moving party. Id. In this case, the Trustee seeks to invoke the strong-arm provisions of 11 U.S.C. § 544. He alleges that Defendant did not create an enforceable security interest or, alternatively, did not properly perfect its security interest in the collectible coins and, as a result, that he has a lien with priority over any claimed security interest of Defendant. As the facts are undisputed, the sole issue before the court is whether Defendant has a valid and properly perfected security interest in the coins under Ohio law. Ohio Revised Code § 1309.313 addresses the validity and perfection of a security interest in collateral by taking possession of the collateral. The statute provides in relevant part as follows: (A) Except as otherwise provided in division (B) of this section, a secured party may perfect a security interest in negotiable documents, goods, instruments, money, or tangible chattel paper by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under section 1308.27 of the Revised Code. (D) If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession. Ohio Rev.Code § 1309.313. There is no dispute that Debtors granted Defendant a security interest in the 661coins and that Defendant took possession of the coins on or about April 4, 2004, before Debtors filed their bankruptcy petition. [Doc. # 11: Affidavit of William Bresson]. There is also no dispute that Defendant still retains possession of the coins. Thus, under § 1309.313, Defendant has a perfected security interest in the collateral. The Trustee acknowledges that § 1309.313 permits perfection of a security interest by taking possession of the collateral. However, he relies on the following language in the security agreement in requesting that the summary judgment motion be denied: No financing statement covering the collateral is on file in any pub[l]ic office and at the request of Secured Party, Debtor will join with Secured Party in executing one or more financing statements pursuant to the Ohio Uniform Commercial Code in form satisfactory to the Secured Party and Debtor will pay the cost of filing in all public offices wherever filing is deemed necessary by Secured Party. [Doc. #11, Security Agreement attached thereto at ¶ 7]. To the extent that the Trustee is arguing that a contract provision regarding perfection can override Ohio’s statutory provision, even if correct, which the court does not so find, the language relied upon simply gives Defendant the option, at its request, to require Debtor to execute a financing statement. The fact that it did not exercise that option, a fact for which the Trustee has offered no evidence, simply has no bearing on the perfection of Defendant’s security interest under § 1309.313. Finding that there is no issue of material fact regarding Defendant’s perfection of a security interest in the coins, the court will grant Defendant’s motion for summary judgment. THEREFORE, for the foregoing reasons, good cause appearing, IT IS ORDERED that Defendant’s Motion for Summary Judgment be, and hereby is, GRANTED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494136/	ORDER REGARDING MOTION FOR DEFAULT JUDGMENTi OR IN THE ALTERNATIVE, MOTION TO COMPEL DISCOVERY MARY ANN WHIPPLE, Bankruptcy Judge. This adversary proceeding is before the court on Plaintiffs Motion for Default Judgment, or in the Alternative, Motion to Compel Discovery [Doc. # 42] and Motion to Compel Discovery [Doc. # 43], and the pro se response filed by Defendant Allen Eaton and his wife, Debbie Sandlin, which the court construes also as a motion for protective order with respect to Defendant. [Doc. # 48]. BACKGROUND On March 6, 2006, Plaintiff filed a complaint against Defendant to determine dischargeability of a debt owed to it by Defendant. Defendant answered the complaint. Thereafter, Plaintiff scheduled a deposition for June 7, 2006. On May 17, 2006, Plaintiff served a notice of the deposition on Defendant’s attorney. The notice stated that Plaintiff would be deposing, upon oral examination, both Defendant and his wife, Debbie Sandlin. On May 31, 2006, Defendant filed a Motion for Video Deposition due to the fact that he had moved to Arizona. Plaintiff opposed the motion and cancelled the June 7 deposition pending the court’s ruling. On September 1, 2006, the court granted the motion and ordered the video deposition to be completed, at Defendant’s cost, in sufficient time to comply with the discovery deadline of October 9, 2006. However, the video deposition never took place since, according to Defendant, he and his wife were unemployed at the time and could not afford to pay for the deposition. Plaintiff then scheduled a deposition of both Defendant and Debbie Sandlin to be conducted on October 12, 2006, at the office of Plaintiffs attorney in Toledo, Ohio. On September 14, 2006, notice of the deposition was sent to Defendant and his wife in Arizona, as well as his attorney. According to Defendant, he had recently 663moved to Berne, Indiana, and did not receive notice of the scheduled deposition until early October. He was informed by letter from his employer that the employer’s policy required a party to a lawsuit to use his own accrued personal/vacation time to appear in court in response to a summons or subpoena. The letter further stated that, because Defendant had only been employed there since August 2006, he did not have enough time to cover his trip to Toledo and that he would therefore be subject to the employer’s attendance policy that could result in termination of his employment. Before the date on which the deposition was scheduled, Defendant relayed this information to his attorney who, in turn, informed Plaintiffs attorney the day before the deposition was to take place of the reasons that Defendant would not be attending. Plaintiffs attorney responded that there was no information regarding Debbie Sandlin’s inability to attend and that he still expected both Debbie Sandlin and Allen Eaton to attend the deposition. Neither Defendant nor his wife attended the deposition on October 12, nor did they file a motion for a protective order. On December 15, 2006, Defendant’s attorney filed a motion to withdraw as counsel for Defendant because of lack of cooperation. According to Defendant, he was unable to pay his attorney. On January 5, 2007, the court permitted Defendant’s attorney to withdraw as counsel of. record. Plaintiff has again scheduled a deposition of both Defendant and his wife to be held on February 5, 2007. A Notice of Deposition was sent to Defendant and Debbie Sandlin at their Indiana address on January 5, 2007. Plaintiff did not, however, serve a subpoena on Debbie Sandlin to attend the deposition scheduled on February 5, nor did he serve her with a subpoena to attend either of the two previous depositions scheduled on June 7 and October 12, 2006. In his response to Plaintiffs motion to compel, Defendant states that he will not be able to attend the February 5 deposition or any future depositions since his family’s only vehicle in not running due to engine problems that he cannot afford to have repaired. Plaintiffs motion seeks a default judgment against Defendant due to his failure to attend the depositions scheduled on June 7 and October 12, 2006. Alternatively, Plaintiff seeks an order compelling the attendance of both Defendant and Debbie Sandlin at the scheduled February 5, 2007, deposition and awarding Plaintiff the cost of the October 12, 2006, deposition in the amount of $63.50 and attorney fees in the amount of $450.00. ANALYSIS If a party fails to appear for a deposition after being served with a proper notice, the court “may make such orders in regard to the failure as are just,” including an order of default judgment against the disobedient party. Fed.R.Civ.P. 37(b)(2)(C) and (d); Fed. R. Bankr.P. 7037. Rule 37(d) further provides: In lieu of any order or in addition thereto, the court shall require the party failing to act ... to pay the reasonable expenses, including attorney’s fees, caused by the failure unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust. The failure to act described in this subdivision may not be excused on the ground that the discovery sought is objectionable unless the party failing to act has a pending motion for a protective order. Fed.R.Civ.P. 37(d). In this case, Defendant was served with a proper notice of, but failed 664to attend, the deposition scheduled on October 12, 2006. Defendant did not file a motion for protective order. He did, however, notify his attorney that he could not attend the deposition on the scheduled date without risking termination from his employment and that he would therefore not attend. Plaintiffs counsel was informed of that fact on October 11, 2006, but did not cancel the deposition, believing Debbie Sandlin was still required to attend. Debbie Sandlin, however, is not a party in this adversary proceeding. While Rule 30 permits a party to take deposition testimony of “any person,” mere notice of the deposition is insufficient to compel the attendance of a person not a party; a subpoena is required. See, e.g., El Salto, S.A. v. Greenberg, 444 F.2d 477, 484 (9th Cir.1971); Amway Corp. v. Nartron Corp., Case No. 1:92CV 156, 1992 WL 478099 (W.D.Mich.1992); Fed. R. Bankr.P. 9016; Fed.R.Civ.P. 45. Plaintiff did not serve Ms. Sandlin with a subpoena to attend the October 12 deposition. Given the prior notice to Plaintiffs counsel that Defendant would not be able to attend the deposition and the fact that Ms. Sandlin was not subpoenaed to attend, the court declines to award the costs and attorney fees incurred by Plaintiff in connection with the scheduled October 12 deposition. The court also finds that granting a default judgment against Defendant as a sanction for his failure to attend the deposition is unnecessarily harsh and is not warranted under the circumstances presented at this time. And given the current work and transportation issues that Defendant is facing, the court will not compel his attendance at the February 5 deposition. But the court will require Defendant to attend a properly noticed deposition scheduled at a time that will not require him to take unexcused time off work. In order to facilitate scheduling the deposition, the court will further require Defendant to contact Plaintiffs counsel within fourteen days of the date of this order to coordinate with him a mutually acceptable date for the deposition, that is, a date that counsel is available and will not result in an unexcused absence from work for Defendant. If Defendant fails to contact Plaintiffs counsel in a timely manner or fails to attend the deposition scheduled in accordance with this order, the court will impose appropriate sanctions, including potentially costs, reasonable attorney fees and a default judgment. Finally, as Plaintiff did not serve a subpoena on Ms. Sandlin, the court has no basis to compel her attendance at the February 5 or any other deposition. THEREFORE, for the foregoing reasons, good cause appearing, IT IS ORDERED that Plaintiffs Motion for Default Judgment or, in the Alternative, Motion to Compel Discovery [Doc. # 42] and Motion to Compel Discovery [Doc. #43] be and hereby are, DENIED to the extent Plaintiff requests an order for default judgment and are GRANTED in part and DENIED in part as set forth above to the extent Plaintiff requests an order to compel discovery; and IT IS FURTHER ORDERED that Defendant shall contact Plaintiffs attorney, Patrick Hendershott, at 419-241-2222, by February 15, 2007, in order to facilitate scheduling Defendant’s deposition, and Defendant shall attend a properly noticed deposition that is scheduled in accordance with this order; and IT IS FURTHER ORDERED that Defendant shall file with the court a Notice of Change of Address setting forth his current home address on or before February 15, 2007.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494137/	MEMORANDUM ON MOTION TO DISMISS INVOLUNTARY PETITION RICHARD STAIR, JR., Bankruptcy Judge. Before the court is the question of whether the Involuntary Petition filed against the Debtor on June 22, 2006, must be dismissed because it, together with the Alias Summons in Involuntary Case issued on October 11, 2006, were not served on the Debtor in the manner required by Rule 1010 of the Federal Rules of Bankruptcy Procedure. The Debtor filed a Brief in Support of Motion to Dismiss on December 4, 2006, which was subsequently amended by an Amended Brief in Support of Motion to Dismiss filed on December 6, 2006 (collectively, Debtor’s Brief). The Brief of Petitioners Gary Shephard, Mountain Specialty Tools and Bob Cannon (Petitioning Creditors’ Brief) was also filed on December 4, 2006. This is a core proceeding. 28 U.S.C.A. § 157(b)(2)(A) (West 2006). I The Involuntary Petition commencing this involuntary case was filed under Chapter 7 on June 22, 2006, by Gary E. Shephard, Jr. (Petitioning Creditor), the holder of a $119,968.50 unsecured claim against the Debtor arising out of a state court judgment. In the Involuntary Petition, the Petitioning Creditor certified that he was eligible to file the petition under 11 U.S.C. § 303(b), that the Debtor was a person against whom an order for relief could be entered, and that the Debtor is generally not paying his debts as they become due. The Certificate of Service 677certifying service of the Summons to Debt- or in Involuntary Case (Summons) issued by the clerk on June 23, 2006, evidences that the Involuntary Petition and Summons were served upon the Debtor on June 23, 2006, by United States Mail at the following address: 3616 Rising River Lane, Jamestown, NC 27282. The Debtor did not file a timely response or otherwise defend the Involuntary Petition, and on July 18, 2006, the court entered an Order directing the entry of an order for relief against the Debtor under Chapter 7. On September 26, 2006, the Debtor, through counsel, filed a Motion to Set Aside Order for Relief and Dismiss Involuntary Bankruptcy Case Pro Hac Vice (Motion to Dismiss), asking the court to set aside the order for relief and to dismiss the case for the following reasons: (1) the Debtor had moved to North Carolina on April 29, 2006, after which he and his wife filed a joint Chapter 7 bankruptcy case in the United States Bankruptcy Court for the Middle District of North Carolina on September 20, 2006; (2) the Debtor had not been served with the Involuntary Petition and Summons, which had been mailed to an incorrect address; and (3) the Debt- or has more than twelve unsecured creditors, thus requiring the commencement of the involuntary case against him by three or more creditors. At the request of the Petitioning Creditor, the clerk issued an Alias Summons in Involuntary Case (Alias Summons) on October 11, 2006, which was served upon the Debtor on the same date by first class mail at 3616 Rising River Lane, Greensboro, NC 27409.1 The clerk also issued a Pluri-es Summons in Involuntary Case (Pluries Summons) on October 20, 2006. Proof of service of the Pluries Summons has not been filed. On October 31, 2006, the Debtor filed his Response to Involuntary Bankruptcy Petition (Response to Petition) pursuant to Rule 1011 of the Federal Rules of Bankruptcy Procedure, reiterating the arguments raised in the Motion to Dismiss and raising the following defenses to support his request for dismissal: (1) that the Petitioning Creditor never properly served the Summons and Involuntary Petition because they were mailed to an incorrect address; and (2) although the Petitioning Creditor served the Debtor with the Alias Summons and Involuntary Petition, the Debtor’s attorney has never been properly served with a copy of the Involuntary Petition.2 Thereafter, on November 13, 2006, the Debtor filed a Motion to Consolidate Cases and Set Venue in the Bankruptcy Court for the Middle District of North Carolina (Motion for Determination of Venue) in the event that the court did not grant his Motion to Dismiss. The court held a hearing on the contested Involuntary Petition and the Motion to Dismiss on November 16, 2006, at which it determined that the Involuntary Petition and Summons issued on June 23, 2006, were not properly served. The court entered an Order on November 16, 2006, vacating the Order for Relief entered on July 18, 2006. The November 16, 2006 Order also set forth the following issues the court is now called upon to resolve: A. Whether the Involuntary Petition, which was filed by one Petitioning Creditor, Gary E. Shephard, Jr., on June 22, 2006, must be dismissed because the 678Debtor has twelve (12) or more unsecured creditors. 11 U.S.C. § 303(b)(1). B. Whether the Involuntary Petition filed on June 22, 2006, must be dismissed because it, together with the Alias Summons in Involuntary Case issued on October 11, 2006, were not served on the Debtor in the manner required by Rule 1010 of the Federal Rules of Bankruptcy Procedure. The Debtor and Petitioning Creditor stipulate that the Alias Summons in Involuntary Case, together with the Involuntary Petition, were served on the Debtor, but were not served on the Debtor’s attorney, William E. Brewer, Jr. C. Whether, under 28 U.S.C. § 1408, the venue of this bankruptcy case rests in the Middle District of North Carolina or the Eastern District of Tennessee and, regardless of the appropriate venue, whether, pursuant to Rule 1014(b) of the Federal Rules of Bankruptcy Procedure, this bankruptcy case should proceed in the Eastern District of Tennessee or in the Middle District of North Carolina where the Debtor and his wife, Sherrie Lynn O’Quinn, filed a Voluntary Petition under Chapter 7 on September 7, 2006, being Case No. 06-11104. Nov. 16, 2006 Order, at 2. With respect to the first issue, the court allowed through November 26, 2006, for additional creditors to join in the Involuntary Petition. In the event additional creditors joined in, the next issue concerning service of process would be addressed through briefs filed by the petitioning creditors and the Debtor. Then, if the court determined that service of process was • adequate, an evidentiary hearing would be held on December 8, 2006, to determine the proper venue of the Debt- or’s bankruptcy case. On November 27, 2006, an Amended Involuntary Petition was filed against the Debtor by the Petitioning Creditor, joined by Mountain Specialty Tools and Bob Cannon (collectively, Petitioning Creditors).3 The Debtor does not now dispute that the requisite number of unsecured creditors is prosecuting the Involuntary Petition. See 11 U.S.C. § 303(b)(1). On November 28, 2006, the court entered an Order continuing the evi-dentiary hearing related to the venue issue to January 5, 2007. With respect to the validity of the service of process, the Debtor argues that his attorney was not also served with the Involuntary Petition and Alias Summons issued on October 11, 2006, and thus, pursuant to Rules 1010 and 7004 of the Federal Rules of Bankruptcy Procedure, service was inadequate. He also argues that because it has now been more than 120 days since the Involuntary Petition was filed on June 22, 2006, Rule 4(m) of the Federal Rules of Civil Procedure allows dismissal, for which there is good cause to do so. The Petitioning Creditors argue that because the court had not yet vacated the Order for Relief when the Alias Summons was issued on October 11, 2006, the issuance and service thereof was merely a precaution, not a requisite. The Petitioning Creditors also argue that the case should not be dismissed even if service of process was not proper because the Debt- or’s counsel possesses actual knowledge of the case, and thus, under Rule 4(m) of the 679Federal Rules of Civil Procedure, good cause exists for extending the time in which the Involuntary Petition could be filed. II Service of process of an involuntary petition is governed by Interim Rule 1010 of the Federal Rules of Bankruptcy Procedure which provides in material part: On the filing of an involuntary petition ... the clerk shall forthwith issue a summons for service. When an involuntary petition is filed, service shall be made on the debtor.... The summons shall be served with a copy of the petition in the manner provided for service of a summons and complaint by Rule 7004(a) and (b). Fed. R. Bankr. P. (Interim) 1010. As referenced by Interim Rule 1010, Rule 7004 provides in material part: (a) Except as [otherwise] provided ..., Rule 4(a) [and] (b) F.R.Civ.P. applies in adversary proceedings.... (b) Service by first class mail Except as [otherwise] provided ..., service may be made within the United States by first class mail postage prepaid as follows: (1) Upon an individual other than an infant or incompetent, by mailing a copy of the summons and complaint to the individual’s dwelling house or usual place of abode or to the place where the individual regularly conducts a business or profession. (9) Upon the debtor, after a petition has been filed by or served upon the debtor and until the case is dismissed or closed, by mailing a copy of the summons and complaint to the debtor at the address shown in the petition or statement of affairs or to such other address as the debtor may designate in a filed writing and, if the debtor is represented by an attorney, to the attorney at the attorney’s post-office address. Fed. R. Bankr. P. 7004.4 It is undisputed that the Involuntary Petition and the original Summons issued by the clerk on June 23, 2006, were served on the Debtor at an improper address, and that service was, therefore, ineffective. There is also no dispute that the Alias Summons was issued on October 11, 2006, and that it was served, along with the Involuntary Petition, upon the Debtor by first class mail. The focus, therefore, falls upon whether the Petitioning Creditor, in order to properly effectuate service of the Involuntary Petition, was also required to serve a copy of the Alias Summons and Involuntary Petition upon the Debtor’s attorney, who, by virtue of the Motion to Dismiss filed on September 26, 2006, had entered an appearance at the time the Alias Summons was issued. Based upon the wording of Rule 7004(b)(9) and Rule 1010, the court holds that the Petitioning Creditor was not required to serve a copy of the Alias Summons and Involuntary Petition upon the Debtor’s attorney. Rule 1010 does not limit application of Rule 7004(b) and, therefore, subsection (b)(9) must be viewed in the context of the service of an involuntary petition. Rule 7004(b)(9) expressly states that service on the debtor may be made “after a petition has been filed by or served upon the debtor ” by mailing a copy of the summons and complaint to the debtor and, “if the debtor is represented by an attorney, to 680the attorney ” Fed. R. Civ. P. 7004(b)(9) (emphasis added). Rule 7004(b)(9) contemplates two distinct scenarios: (1) service upon a debt- or “after a petition has been filed” by the debtor; and (2) service upon the debtor “after a petition has been ... served upon the debtor.” Adhering to the literal language of the Rule, it is only “after” a voluntary petition has been filed “by the debtor” that the requirement of service upon the debtor and the debtor’s attorney is triggered. In a case that is commenced by the filing of an involuntary petition, the Rule clearly fixes the trigger date for service upon the debtor, and any attorney representing the debtor, as the date “after” the involuntary petition has been served upon the debtor. Accordingly, until a debtor against whom an involuntary petition has been filed is actually served with the summons and involuntary petition, there is no requirement that a petitioning creditor serve any attorney representing the debtor in any pre-involuntary petition capacity. To hold otherwise would be contrary to the clear intent of Rule 7004(b)(9) and would require petitioning creditors to engage in a pre-filing investigation in an effort to ascertain whether the prospective involuntary debtor is represented by an attorney. Additionally, attorneys representing entities engaged in non-bankruptcy related matters are not automatically retained to represent that entity in an involuntary bankruptcy case. Why should that attorney be involuntarily compelled to participate in a bankruptcy case for which he or she has not been employed and for which he or she may or may not have the requisite expertise? Here, there is no dispute that the Petitioning Creditor knew, subsequent to the filing of the Involuntary Petition, that the Debtor was represented by counsel, as the Debtor’s attorney filed documents on behalf of the Debtor prior to issuance and service of the Alias Summons and Involuntary Petition on October 11, 2006. Nevertheless, the fact that he may have known the identify of the Debtor’s counsel does not change the outcome. Because Rule 7004(b)(9) does not require service of a summons and involuntary petition upon counsel prior to the service of the involuntary petition upon a debtor, the Petitioning Creditor was not required to simultaneously serve the Debtor’s counsel with the Alias Summons and Involuntary Petition on October 11, 2006, since the Debtor himself had not yet been served with those documents. It is only after service was obtained upon the Debtor that Rule 7004(b)(9) mandates service upon the Debtor’s counsel.5 Because the Alias Summons and Involuntary Petition were properly served upon the Debtor pursuant to Rule 7004(b)(1) by first class mail on October 11, 2006, the Debtor’s Motion to Dismiss will be denied. Furthermore, because the Debtor in his October 31, 2006 Response to Petition does not dispute the allegation in the Involuntary Petition that “he is generally not paying ... [his] debts as such debts become due,” see 11 U.S.C. § 303(h)(1), and there are no other contested issues to be resolved, the court will enter an order for relief under Chapter 7. The evidentiary hearing on the sole remaining issue, the proper venue of the Debtor’s bankruptcy case, will be held on the scheduled date of January 5, 2007. To that end, the court, in order to ascertain the status of the Debtor’s North Carolina *681bankruptcy case, will direct that the Debt- or’s counsel, contemporaneously with the filing of his brief due by December 29, 2006, file a certified copy of the docket maintained by the clerk in that case. An order consistent with this Memorandum will be entered. ORDER For the reasons stated in the Memorandum on Motion to Dismiss Involuntary Petition filed this date, the court directs the following: 1. The Motion to Set Aside Order for Relief and Dismiss Involuntary Bankruptcy Case Pro Hac Vice filed by the Debtor on September 26, 2006, and the Response to Involuntary Petition filed by the Debtor on October 31, 2006, are, to the extent the Debtor seeks dismissal of the Involuntary Petition filed against him on June 22, 2006, for insufficiency of service of process, DENIED. 2. An order for relief is entered against the Debtor, John William O’Quinn, III, under Chapter 7 of title 11 of the United States Code. . Pursuant to the Motion to Dismiss, this is the address at which the Debtor resides and has resided since April 29, 2006. . The Debtor does not otherwise contest the Involuntary Petition; i.e., he does not deny that he is “generally not paying ... [his] debts as such debts become due ....” 11 U.S.C. § 303(h)(1). See Fed. R. Bankr. P. 1011(a). . The Petitioning Creditors also filed a Motion to Extend Time on November 27, 2006, asking the court to allow through November 27, 2006, to file the Amended Involuntary Petition. This request was denied by the court in the November 28, 2006 Order because November 26, 2006, fell on a Sunday, so the Petitioning Creditors were allowed through November 27, 2006, pursuant to Rule 9006(a) of the Federal Rules of Bankruptcy Procedure. . As it applies to the portions of Rule 7004 above, Rule 4 of the Federal Rules of Civil Procedure requires that an issued summons be served with all complaints within 120 days of filing. See Fed. R. Civ. P. 4(m). . Rule 7004(b)(9) comes into play not only in the service of an adversary proceeding filed against a debtor, but also in the context of a contested matter filed in a debtor's case. See Fed. R. Bankr. P. 9014(b).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494138/	MEMORANDUM OPINION AND ORDER FOR JUDGMENT ROBERT J. KRESSEL, Bankruptcy Judge. This proceeding came for hearing on November 30, 2006 pursuant to the district court’s order reversing the judgment entered on August 23, 2005 and remanding for further proceedings. James Ruben-stein and Doug Elsass appeared for the plaintiffs. Kenneth Corey-Edstrom appeared for The BMC Liquidating Trust, and Shannon Kelly appeared for defendant Deutsche Bank Trust Company. There were no appearances for defendants BMC Industries, Inc. and Vision-Ease Lens, Inc. The court has jurisdiction over this proceeding under 28 U.S.C. § 157(b)(1) and 1334 and Local Rule 1070-1. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(A), (B), (K), (O). FACTS Plaintiff Gerald Becker was an employee of Vision-Ease Lens, Inc., a subsidiary of BMC Industries, Inc. On December 5, 2002, he commenced an employment discrimination suit against Vision-Ease and retained Frank Kundrat to represent him. The parties settled the lawsuit on April 4, 2004 and Vision-Ease agreed to pay 728$125,000 in exchange for a release of Becker’s claims. The settlement was made up of three separate payments: 1) Becker in the amount of $37,500 from which BMC was to deduct withholding taxes, 2) Becker in the amount of $37,500 and, 3) Kundrat in the amount of $50,000. On June 2, 2004, Vision-Ease’s insurance carrier issued a check to BMC for $100,000 which was identified as “Payment for Gerald Becker.” BMC deposited the insurance check into BMC Account No. 0791877, the “lockbox account,” on June 8, 2004.On June 9, 2004, Becker and Kund-rat executed the settlement agreement, and the funds from the insurance check were transferred to BMC Account No. 59-49599, the “concentration account.” The next day BMC issued three settlement checks for $50,000 to Kundrat and $18,961.94 and $37,500 to Becker. On June 15, 2004 Vision-Ease executed the settlement agreement and BMC sent the settlement checks to Kundrat. The parties’ stipulation for dismissal in the employment lawsuit was filed with the court a week later on June 22, 2004. On June 23, 2004, BMC and Vision-Ease filed Chapter 11 petitions. At that time, none of the checks from BMC to the plaintiffs had been honored. The checks were presented to the debtors’ bank after the case was filed but were dishonored. The debtors made a motion to use cash collateral and obtain secured financing on June 23, 2004. The plaintiffs did not object to the motion. On July 20, 2004, I entered an order 1) authorizing the debtors to obtain postpetition financing and use cash collateral, 2) granting liens and su-perpriority administrative expense status to secure postpetition financing obligations, and 3) granting adequate protection to the prepetition lenders, which include Bank One NA, Wells Fargo Bank National Association, Harris Trust and Savings Bank, Credit Agricole Indosuez, Wachovia Bank National Association, Union Bank of California, N.A., U.S. Bank National Association, and Deutsche Bank Trust Company Americas. As part of that order, the postpetition lenders received a first security interest in all of the debtors’ unencumbered property and a junior security interest on all other pre-petition and post-petition property of the debtors. Eight months later, on February 17, 2005, Kundrat and Becker initiated this adversary proceeding and sought a declaration that the $100,000 check from the insurance company was not property of the bankruptcy estate. They also sought the imposition of a constructive or resulting trust on those funds. They did not seek any preliminary relief to maintain the status quo. Following a trial, I entered an order on August 23, 2005 which held that the plaintiffs’ failure to prove that the money in the concentration account was traceable to the funds from the insurance check meant that the plaintiffs did not meet the burden of proof necessary for the imposition of a constructive or resulting trust. See Kundrat v. BMC Industries, Inc. (In re BMC Industries, Inc.), 328 B.R. 792 (Bankr.D.Minn.2005). The plaintiffs appealed the decision not to impose a constructive trust to the district court. They did not appeal the decision as to the resulting trust. Again the plaintiffs did not seek an order from me or the district court to maintain the status quo pending the appeal. On February 3, 2006, the debtors filed their Joint Plan of Liquidation and an accompanying disclosure statement. The plaintiffs did not object to the plan or the disclosure statement, but on March 2, 2006, the U.S. Trustee objected to the disclosure statement because, inter alia, it failed to describe the status of the plaintiffs’ claims. Around May 8, 2006 the debtors began to receive funds from various preference 729actions which they had initiated. These funds were deposited into the BMC Preference Account. The account was separate from all other accounts held by the debtors. In response to the objections to their plan, the debtors filed an amended plan on June 21, 2006. They filed the accompanying disclosure statement on June 26, 2006. The debtors’ amended plan makes no provision for the payment of the plaintiffs’ claims, except to the extent of any allowed unsecured claims. The Second Amended Disclosure Statement states that, “Oral argument with respect to the appeal was heard on March 15, 2006. If Becker and Kundrat are ultimately successful, the Debtors will be required to pay Becker and Kundrat a total of $100,000 from their available assets. Any remaining claims of Becker and Kundrat will constitute only general unsecured claims (emphasis added).” However, there is no plan provision for the repayment of those claims if the plaintiffs are successful. The plaintiffs did not object to the amended plan or the amended disclosure statement. On August 9, 2006, there was a hearing on confirmation of the debtors’ amended plan. The plaintiffs did not appear. On August 10, 2006, I confirmed the debtors’ Amended Plan of Liquidation. On August 21, 2006, the debtors approved the Liquidating Trust Agreement, which created The BMC Liquidating Trust. The Trust was created in order to distribute funds to the creditors of all three debtors in accordance with the amended plan and the Liquidating Trust Agreement. The debtors then transferred $1,035,256 from the concentration account to Insight Equity on August 22, 2006. The next day, August 23, the debtors transferred $48,409.24 from the concentration account to Insight Equity. After the transfers, the balance in the concentration account was $5,670.93. On August 29, 2006, the district court entered its order. The district court did not rule for the plaintiffs on the merits but did hold that because the concentration account had been in the exclusive control of the debtors over the relevant period, they had the burden of producing evidence that the concentration account no longer contained the money from the insurance checks. This shifted the burden of production from the plaintiffs to the defendants. The district court reversed and remanded the case for further proceedings not inconsistent with its opinion. The liquidating trust now stipulates that the concentration account balance did not drop below $100,000 prior to trial. However, after August 23, shortly before the district court’s decision, the account contained only $5,670.93. Four days later on September 15, the debtors transferred the money left in the concentration account into to the BMC Liquidating Trust Bank Account. On October 10, 2006, the debtors transferred the money from the preference account, which at that time totaled $134,073.41, into the Trust Account. Pursuant to the debtors’ plan, the Liquidating Trust received both the money from the preference account and the concentration account “free and clear of all Liens, Claims, and encumbrances.” On September 11, 2006, the Liquidating Trust objected to the allowance of various claims, including the plaintiffs’ claims. Because neither of the plaintiffs responded to the objection, on October 30, 2006, I disallowed the plaintiffs’ claims. DISCUSSION The Decision to Reopen the Record On Remand Rests Within the Judge’s Discretion. “Reopening the evidentiary record on remand is in the sound discretion of 730the trial court and can only be reviewed for abuse of that discretion.” Confederated Tribes of Warm Springs Reservation of Oregon v. U.S., 101 Fed.Appx. 818, 822 (Fed.Cir.2004); see also Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 331-333, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971). On remand, the lower court has the ability to develop the record more fully before deciding the remanded issue. Bernstein, Litowitz, Berger & Grossman v. City of Seattle (In re Washington Public Power Supply System Securities Litigation), 19 F.3d 1291, 1302 (9th Cir.1994). This is not an ordinary case where the facts are static and it might be unfair to give parties a second opportunity to introduce evidence they failed to introduce the first time. This is a dynamic situation involving a res where knowing the current facts is essential to the decision. The events which occurred between the plaintiffs trial and the appellate decision changed the factual scenario surrounding the ease. Therefore, I found it necessary to receive evidence about the current state of the debtors’ bank accounts in order to determine whether any assets existed on which to impose a constructive trust. The Plaintiffs Did Not Appeal the Decision Not to Impose a Resulting Trust. The plaintiffs did not appeal my refusal to impose a resulting trust. Therefore, I will not reconsider that part of the original decision. The Plaintiffs are No Longer Creditors. “A claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest ... objects.” 11 U.S.C. § 502(a). The Liquidating Trust objected to the allowance of the plaintiffs’ claims and the plaintiffs did not respond. As a result, the plaintiffs’ claims were disallowed on October 30, 2006. Because the plaintiffs no longer have claims, they are no longer creditors. The Concentration Account No Longer Contains A Trust Res. A constructive trust is an equitable remedy that may be imposed to prevent unjust enrichment. According to Minnesota law, a constructive trust “has no existence in fact as a trust but is only a fiction adopted by equity as an unjust-enrichment, rectifying remedy.” Knox v. Knox, 222 Minn. 477, 25 N.W.2d 225, 232 (1946). “Where a person holding title to property is subject to an equitable duty to convey it to another on the ground he would be unjustly enriched if he were permitted to retain it, a constructive trust arises.” Restatement (First) of Restitution § 160. In Minnesota, there are three requirements for the imposition of a constructive trust. First, there exists an appropriate reason to override the status of legal title and ownership. Shields v. Duggan (In re Dartco), 197 B.R. 860, 867 (Bankr.D.Minn.1996). Second, the party has located an identifiable res or the traceable proceeds from it. Id. Third, possession of the res or its traceable proceeds by the wrongdoer. Id. Minnesota law requires that the party seeking the imposition of a constructive trust trace those funds “into an identified product or property currently in [the debtors’] estate.” District Court Order p. 5, citing Ferris, Baker Watts, Inc. v. Stephenson (In re MJK Clearing), 371 F.3d 397, 401 (8th Cir.2004). To trace assets in an account, the lowest intermediate balance test is used. Id. at 402. Under this test, the restitution occurs from the account where the amount on deposit has at all times since the commingling of the funds equaled or exceeded the amount of 731the trust fund. Id. The intermediate balance test relies on the fiction that the trust funds are the last funds which are withdrawn from the account. Id. Thus, if the amount is reduced lower than the trust amount, then the claimant is entitled to the lowest intermediate balance of the account. Id. If the account is depleted after the trust fund has been deposited, the trust fund is treated as lost. Id. The purpose of tracing is to identify a particular entrusted asset, not just to identify some assets. Id. Therefore, a constructive trust creates a trust in specific property, not an amorphous amount which may be imposed against any of the debtors’ property. Id. Prior to August 23, 2006, the concentration account contained in excess of $100,000 and had never fallen below that amount. However, on August 22 and 23, 2006, the debtors transferred over one-million dollars to Insight Equity which left approximately $5,700 in the concentration account. These remaining funds were transferred to the Liquidating Trust on September 15, 2006. After the funds in the concentration account had been depleted, the constructive trust claim was lost. The plaintiffs argue that they needed only trace the trust funds up to the time of trial. However, the law and the district court order requires the estate to currently hold the trust property. As the debtors no longer possess any assets in the concentration account, or any other assets for that matter, a constructive trust cannot be imposed on them. In any event, it is difficult to see the point in imposing a constructive trust on an empty concentration account which presumably has been closed. The plaintiffs argue that I should impose a constructive trust on the preference account to which the debtors made deposits starting on May 8, 2006. First, the plaintiffs are only entitled to a trust on an identifiable res, not all of the debtor’s assets. See Ferris, 371 F.3d at 401 (“[T]he point of tracing for a common-law or a constructive trust is to follow the particular entrusted assets, not simply to identify some assets.”)(quoting Conn. Gen. Life Ins. Co. v. Universal Ins. Co., 838 F.2d 612, 620 (1st Cir.1988)). Second, all of the debtors’ property has been transferred to the Liquidating Trust. The Debtors No Longer Possess Any Assets From Which Plaintiffs Can Collect. The debtors have rid themselves of all of their assets and while they may continue to exist legally, they are factually defunct. They have not even bothered to continue defending this adversary proceeding. Plaintiffs Cannot Recover from The BMC Liquidating Trust. The plaintiffs’ point to the language inserted in the disclosure statement at the request of the United States Trustee. Of course, the disclosure statement is a document created for purposes of soliciting acceptances of the plan. 11 U.S.C. § 1125. It is the plan that governs the treatment of the plaintiffs. However, even the language itself is unavailing; it begs the question. “If the plaintiffs prevail on their $100,000 cause of action, they will receive $100,000.” However, while the plaintiffs were successful in obtaining reversal of the original judgment in this proceeding, they have not “ultimately prevailed,” and now they legally cannot prevail. Alternatively, the plaintiffs seek to recover from the Liquidating Trust. They have two threshold problems. First, their claims have been disallowed. Second, the entity from which they seek to recover, The BMC Liquidating Trust, is not a party to this adversary proceeding. If the plaintiffs could get past these issues, they face the problem that they are *732bound by a plan that makes no provision for the claims they are asserting in this proceeding. See 11 U.S.C. § 1141(a). Additionally, the property upon which they sought to impose a constructive trust has been distributed pursuant to the plan (and by statute) free of their asserted claims and interests. See 11 U.S.C. § 1141(c). The plaintiffs also point to the various individual clauses of the plan and the trust to save their case, including an argument that they should be treated as holder of an “Allowed Other Secured Claim,” but of course, they have no allowed claim at all, much less an allowed secured claim and this argument only begs the issue. To be secured, a creditor must hold an interest in the estate’s interest in property. 11 U.S.C. § 506(a). However, this has never really been their argument and they have not established any such interest, and now cannot because of the extinction of the alleged res. Conclusion Because the plaintiffs failed to take steps to either ensure the preservation of any trust res or insist on explicit treatment in the plan, their cause of action for the imposition of a constructive trust must fail. I need not address the other requirements for imposition of a constructive trust. ORDER THEREFORE, IT IS ORDERED that: 1. The plaintiffs are not entitled to the imposition of a constructive or a resulting trust. 2. The plaintiffs shall recover nothing from the defendants on their complaint. LET JUDGMENT BE ENTERED ACCORDINGLY.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487761/	11/18/2022 IN THE SUPREME COURT OF TENNESSEE AT NASHVILLE February 24, 2022 Session Heard at Nashville1 STATE OF TENNESSEE v. TYSHON BOOKER Appeal by Permission from the Court of Criminal Appeals Criminal Court for Knox County No. 108568 G. Scott Green, Judge ___________________________________ No. E2018-01439-SC-R11-CD ___________________________________ HOLLY KIRBY, J., concurring in the judgment. Not so long ago, it was commonplace for states to require juveniles convicted of homicide to serve sentences of over fifty years. Now, that practice has vanished. A review of sentencing statutes enacted by state legislatures and court decisions shows that there is now only one state where juvenile offenders face a mandatory non-aggregated sentence of more than 50 years for first-degree murder with no aggravating factors—Tennessee. In the entirety of the nation, Tennessee stands alone. This is strong objective evidence that a national consensus has formed against juvenile sentencing statutes like Tennessee’s. My concurrence in the holding in Justice Lee’s plurality opinion is based on this unequivocal objective data. In the absence of solid objective indicia, I would not be able to concur in the plurality’s judgment in favor of Mr. Booker. In this case, the Court granted permission to appeal on the question of whether a mandatory sentence of life imprisonment for juvenile offenders for first-degree murder, with no aggravating factors, under Tennessee Code Annotated sections 39-13-208(c) and 40-35-501(h)(2) violates the provisions in the United States and Tennessee Constitutions forbidding cruel and unusual punishment. In Tennessee, the mandatory sentence of life imprisonment is a term sentence of sixty years, with a minimum service of fifty-one years. 1 We first heard oral argument on February 24, 2021. In light of the untimely death of Justice Cornelia A. Clark and by order of this Court filed December 17, 2021, retired Tennessee Supreme Court Justice William C. Koch, Jr., was designated to participate in this appeal. The case was re-argued on February 24, 2022. See Brown v. Jordan, 563 S.W.3d 196, 202 (Tenn. 2018).2 I concur in the holding in the plurality opinion that Tennessee Code Annotated section 40-35-501(h)(2), when imposed on a juvenile homicide offender, violates the prohibition against cruel and unusual punishment in the Eighth Amendment to the United States Constitution. I also concur in the remedy adopted in the plurality opinion and agree it is limited to offenders who were juveniles at the time of the offense. Accordingly, I concur in the judgment in the plurality opinion. I write separately to explain the importance of objective indicia of national consensus to the Eighth Amendment analysis in this case. I. EIGHTH AMENDMENT ANALYSIS The Eighth Amendment “bars not only those punishments that are ‘barbaric’ but also those that are ‘excessive’ in relation to the crime committed.” Coker v. Georgia, 433 U.S. 584, 592 (1977). The United States Supreme Court’s decision in Gregg v. Georgia requires us to consider whether a particular punishment is “disproportionate in relation to the crime for which it is imposed.” 428 U.S. 153, 187 (1976). In doing so, Gregg described the substantive, but limited, responsibility imposed on the judiciary under the Eighth Amendment: Of course, the requirements of the Eighth Amendment must be applied with an awareness of the limited role to be played by the courts. This does not mean that judges have no role to play, for the Eighth Amendment is a restraint upon the exercise of legislative power. .... [W]hile we have an obligation to [e]nsure that constitutional bounds are not overreached, we may not act as judges as we might as legislators. Id. at 174–75. The legislature has the “power to define crimes and fix their punishment, unless that power encounters in its exercise a constitutional prohibition. In such [a] case, not our discretion, but our legal duty, strictly defined and imperative in its direction, is invoked.” Weems v. United States, 217 U.S. 349, 378 (1910). In this case, Mr. Booker was convicted of a most serious offense, first-degree murder. “[W]hen a life has been taken deliberately by the offender,” that is considered 2 Tennessee Code Annotated § 39-13-208(c) provides that, when the State does not seek the death penalty or life without the possibility of parole, a defendant convicted of murder in the first degree “shall be sentenced to imprisonment for life.” Tennessee Code Annotated § 40-35-501(h)(2) provides that such a defendant “shall serve one hundred percent (100%) of sixty (60) years less sentence credits earned and retained,” but “no sentence reduction credits . . . shall operate to reduce the sentence imposed by the court by more than fifteen percent (15%).” In Brown, the Court interpreted these provisions to mean that “[a] defendant convicted of first-degree murder that occurred on or after July 1, 1995, may be released after service of at least fifty-one years if the defendant earns the maximum allowable sentence reduction credits.” 563 S.W.3d at 202. -2- “the most extreme of crimes.” Gregg, 428 U.S. at 187. The length of Mr. Booker’s sentence, in and of itself, is not inherently grossly disproportionate to either the crime or the offender, and does not offend the Eighth Amendment. Indeed, in Miller v. Alabama, the U.S. Supreme Court expressly permitted sentencers to impose life-without-parole sentences on juvenile homicide offenders, so long as the sentence was not mandatory, that is, so long as there was discretion to consider the defendant’s youth and impose a lesser punishment. See 567 U.S. 460, 479–80 (2012). And life without parole is an even more severe sentence than Mr. Booker received. In this type of Eighth Amendment case, where the punishment is not barbaric and not inherently disproportionate to either the crime or the offender, objective indicia of national consensus is a threshold issue. That is, without objective indicia of national consensus against the punishment contained in the statute at issue, the analysis would go no further. This is explained below. 1. As Applied to Juvenile Offenders Here, Mr. Booker asserts that Tennessee’s mandatory sentence of life imprisonment violates the Eighth Amendment to United States Constitution as applied to juvenile homicide offenders. As to a category of offenders, the Eighth Amendment does not guarantee there will be no risk of a disproportionate sentence in a specific case. The question instead is whether Tennessee’s statutory framework creates an unacceptably high risk of a disproportionate sentence in a given case with a juvenile defendant. See Jones v. Mississippi, 141 S. Ct. 1307, 1317 (2021) (“[Miller] stated that a mandatory life-without- parole sentence for an offender under 18 ‘poses too great a risk of disproportionate punishment.’” (quoting Miller, 567 U.S. at 479)). The question of whether the risk of a disproportionate sentence is so high that it offends the Constitution is assessed under the analysis set forth in the United States Supreme Court’s Eighth Amendment jurisprudence on juvenile offenders. Justice Lee’s plurality opinion describes in detail the Supreme Court’s Eighth Amendment cases on juvenile offenders, demonstrating the Court’s increasingly firm conviction that children are different when it comes to sentencing. See Thompson v. Oklahoma, 487 U.S. 815, 835 (1988) (“[L]ess culpability should attach to a crime committed by a juvenile than to a comparable crime committed by an adult.”). The three general differences between juveniles and adults consistently cited by the Supreme Court are (1) “lack of maturity and an underdeveloped sense of responsibility,” (2) “more vulnerab[ility] or susceptib[ility] to negative influences and outside pressures, including peer pressure,” and (3) that “the character of a juvenile is not as well formed as that of an adult.” Roper v. Simmons, 543 U.S. 551, 569–70 (2005) (quoting Johnson v. Texas, 509 U.S. 350, 367 (1993)); see also Graham v. Florida, 560 U.S. 48, 86 (2010) (Roberts, C.J., concurring in the judgment) (“[J]uvenile offenders are generally less culpable than adults who commit the same crimes.”). -3- In Miller, these three significant differences between juveniles and adults were the foundation for the Court’s conclusion that “children are constitutionally different from adults for purposes of sentencing” and its holding that mandatory life-without-parole sentences for juveniles violated the Eighth Amendment. 567 U.S. at 471. More recent Eighth Amendment cases on juvenile offenders reaffirm these precepts. See Montgomery v. Louisiana, 577 U.S. 190, 206 (2016) (“[C]hildren are constitutionally different from adults for purposes of sentencing.” (quoting Miller, 567 U.S. at 471)); see also Jones, 141 S. Ct. at 1314 (“In a series of Eighth Amendment cases applying the Cruel and Unusual Punishments Clause, this Court has stated that youth matters in sentencing.”). This Supreme Court caselaw suggests that, in a case with a juvenile offender, the risk of a disproportionate sentence is higher than in a similar case with an adult offender. But that proposition does not automatically mean that juvenile defendants must always be sentenced under a separate, more lenient sentencing structure than adult offenders, in every case and for every crime. The question is whether, under a particular sentencing framework, the risk of a disproportionate sentence for a juvenile offender is so high that it violates the Eighth Amendment. 2. Objective Indicia To answer the question of whether the risk of a disproportionate sentence for a juvenile offender under Tennessee sentencing statutes is unconstitutionally high, the Supreme Court’s body of Eighth Amendment cases, taken as a whole, requires that we consult objective data. The proportionality assessment under the Eighth Amendment “does not call for a subjective judgment. It requires, rather, that we look to objective indicia that reflect the public attitude toward a given sanction.” Gregg, 428 U.S. at 173. The Supreme Court has repeatedly emphasized “the requirement that proportionality review be guided by objective factors.” Ewing v. California, 538 U.S. 11, 23 (2003) (quoting Harmelin v. Michigan, 501 U.S. 957, 1001 (1991) (Kennedy, J., concurring in part and concurring in the judgment)). The Supreme Court has looked to three kinds of objective indicia to determine whether there is a national consensus against a challenged sentencing practice. First is the number of states that have overtly rejected the challenged practice, either through legislative or judicial action. See Atkins v. Virginia, 536 U.S 304, 312 (2002) (“We have pinpointed that the clearest and most reliable objective evidence of contemporary values is the legislation enacted by the country’s legislatures.” (quotation marks omitted) (citation omitted)); Roper, 543 U.S. at 564 (“By a similar calculation in this case, 30 States prohibit the juvenile death penalty, comprising 12 that have rejected the death penalty altogether and 18 that maintain it but, by express provision or judicial interpretation, exclude juveniles from its reach.”). -4- The next type of objective indicia is how frequently the challenged sentencing practice is actually used. See Atkins, 536 U.S. at 316 (“[E]ven in those States that allow the execution of [intellectually disabled] offenders, the practice is uncommon.”); Roper, 543 U.S. at 564 (“[E]ven in the 20 States without a formal prohibition on executing juveniles, the practice is infrequent.”); Graham, 560 U.S. at 62 (“Here, an examination of actual sentencing practices in jurisdictions where the sentence in question is permitted by statute discloses a consensus against its use.”). The final type is objective indicia of trends among the states, including the direction and pace of change regarding the challenged sentencing practice. See, e.g., Atkins, 536 U.S. at 315 (“It is not so much the number of these States that is significant, but the consistency of the direction of change.”); Roper, 543 U.S. at 565–66 (discussing both consistency and pace of change compared to Atkins); Graham, 560 U.S. at 108–09 (Thomas, J., dissenting) (arguing that lack of consistency and direction of change counseled against the majority’s decision). Such objective indicia anchor any assessment of whether a statute violates the Eighth Amendment to data that demonstrates the nation’s values and standards. This underpinning ensures principled constitutional analysis that is not premised on the subjective sensibilities of individual judges. See Gregg, 428 U.S. at 173. To be sure, the Supreme Court’s analysis in Miller relied much less than previous cases on this type of objective data. See 567 U.S. at 483 (distinguishing Miller “from the typical [case] in which we have tallied legislative enactments”). At the time Miller was decided, many states had the type of statute at issue in Miller, a mandatory sentence of life without parole for juveniles convicted of homicide. For that reason, the Miller majority’s finding of an Eighth Amendment violation drew a sharp dissent from the Chief Justice.3 3 Chief Justice Roberts first identified lack of objective indicia of national standards as the reason for his dissent: “The pertinent law here is the Eighth Amendment to the Constitution, which prohibits ‘cruel and unusual punishments.’ Today, the Court invokes that Amendment to ban a punishment that the Court does not itself characterize as unusual, and that could not plausibly be described as such. I therefore dissent.” Miller, 567 U.S. at 493 (Roberts, C.J., dissenting). He then summarized the Court’s Eighth Amendment cases on objective indicia: When determining whether a punishment is cruel and unusual, this Court typically begins with “objective indicia of society's standards, as expressed in legislative enactments and state practice.” We look to these “objective indicia” to ensure that we are not simply following our own subjective values or beliefs. Such tangible evidence of societal standards enables us to determine whether there is a “consensus against” a given sentencing practice. If there is, the punishment may be regarded as “unusual.” Id. at 494 (first quoting Graham, 560 U.S. at 61; and then quoting Gregg, 428 U.S. at 173). -5- In a subsequent case, however, the Court’s description of past Eighth Amendment caselaw on juvenile offenders reaffirmed its traditional emphasis on objective indicia. In Jones v. Mississippi, the Court considered whether Miller and Montgomery required sentencing authorities to make a separate factual finding that a juvenile offender was permanently incorrigible before sentencing him to life without parole. 141 S. Ct. at 1311. In considering whether permanent incorrigibility would be an eligibility criterion for a sentence, similar to sanity or competence, the Jones Court recounted that, “when the Court has established such an eligibility criterion, the Court has considered whether ‘objective indicia of society’s standards, as expressed in legislative enactments and state practice,’ demonstrated a ‘national consensus’ in favor of the criterion.” Id. at 1315 (quoting Graham, 560 U.S. at 61). Describing Miller’s discussion of whether a discretionary sentencing procedure would result in fewer life-without-parole sentences for juveniles, Jones commented: “Importantly, . . . the Court [in Miller] relied on data, not speculation. The Court pointed to statistics from 15 States that used discretionary sentencing regimes to show that, ‘when given the choice, sentencers impose life without parole on children relatively rarely.’” Id. at 1318 (quoting Miller, 567 U.S. at 483 n.10).4 Thus, the body of Supreme Court Eighth Amendment cases counsel us to base any finding of unconstitutionality on solid data illuminating the nation’s values and standards on the sentencing framework at issue, “objective indicia that reflect the public attitude toward a given sanction.” Gregg, 428 U.S. at 173. Our review must be “guided by objective factors.” Ewing, 538 U.S. at 23 (quoting Harmelin, 501 U.S. at 1001 (Kennedy, J., concurring in part and concurring in the judgment)). This approach provides a limiting principle to ensure that findings of a violation of the Eighth Amendment are reserved for punishments that may fairly be regarded as “unusual.” Miller, 567 U.S. at 494 (Roberts, C.J., dissenting). In this case, the elevated risk of a disproportionate sentence for a juvenile convicted of first-degree murder arises because of Tennessee’s unique combination: (1) a mandatory sentence, allowing the sentencer no discretion, plus (2) a very lengthy minimum imprisonment of fifty-one years. Consistent with the facts in this case, it is appropriate to focus our review on how many states still subject juvenile offenders convicted of first- degree murder, with no aggravating factors, to a mandatory non-aggregated sentence of more than 50 years. 4 See also Jones, 141 S. Ct. at 1320 (“Miller highlighted 15 existing discretionary state sentencing systems as examples of what was missing in the mandatory Alabama regime before the Court in that case.” (citing Miller, 567 U.S. at 484 n.10)). Indeed, Jones itself used statistics to show that Miller and Montgomery had in fact accomplished the stated objective of drastically reducing the number of juvenile homicide offenders sentenced to life without parole. See id. at 1322 (“Those statistics bear out Miller’s prediction: A discretionary sentencing procedure has indeed helped make life-without-parole sentences for offenders under 18 ‘relatively rar[e].’” (alteration in original) (quoting Miller, 567 U.S. at 484 n.10)). -6- Two objective indicia tell the story best: (1) legislative enactments, i.e., sentencing statutes, and (2) state court decisions holding state sentencing statutes unconstitutional. Taken together, these provide strong objective evidence of the nation’s contemporary standards for sentencing juvenile homicide offenders who fit Mr. Booker’s circumstances. Here, those objective indicia demonstrate that now, almost ten years after Miller, sentencing statutes like Tennessee’s have disappeared. Now, only one state sentences juvenile offenders to a mandatory non-aggregated sentence of more than fifty years for first-degree murder with no aggravating factors—Tennessee.5 This is compelling data that Tennessee’s sentencing framework for juvenile defendants convicted of first-degree murder, with no aggravating factors, stands far apart from the rest of the nation. Turning to actual sentencing practices, assessing the frequency with which a mandatory sentence is imposed reveals little about community standards because by definition there are no other available options. It is instructive to recall, however, that defendants resentenced under the Supreme Court’s decisions in Miller and Montgomery were rarely given sentences of life without parole. See Jones, 141 S. Ct at 1322. This shows that, in actual practice, such severe sentences for juveniles convicted of homicide are disfavored. The direction and pace of change regarding the challenged sentencing practice is also illuminating. Ten years ago, before the U.S. Supreme Court decided Miller, twenty- eight states had mandatory life-without-parole statutes applicable to juveniles. See Miller, 560 U.S. at 513–14 (Alito, J., dissenting). As amici have shown, many states changed their laws in the last decade, post-Miller.6 The consistent direction of the changes, by either legislative enactment or state court decision, has been to either reduce the mandatory sentence applicable to juveniles or insert discretion into sentencing for juveniles.7 Most 5 The gap between Tennessee and the rest of the country is substantial. As noted by the plurality opinion, the next longest mandatory sentences, in Oklahoma and Texas, are over ten years shorter than the term set forth in Tennessee Code Annotated § 40-35-501(h)(2). In twelve other states, the maximum mandatory sentence with no discretionary review is between one third to one half less than Tennessee’s mandated sentence. In twenty-three other states and the District of Columbia, a juvenile convicted of first- degree murder serves less than half the time as in Tennessee before becoming eligible for some type of individualized consideration. Twelve other states may impose a sentence as long as Tennessee’s, but their sentencing authorities have discretion to impose a lesser sentence. See Plurality Op. nn.12–16. 6 Asked at oral argument about the startling level of change in state laws through either legislative enactment or court decision, the State observed that many of the changes were prompted by the Miller decision. The dissent echoes this observation. The State conceded, however, that the great majority of changes in other states went considerably further than was needed to come into strict compliance with Miller’s holding. 7 The change in national consensus on sentencing juvenile homicide offenders recalls the change that occurred over twenty years ago regarding the execution of intellectually impaired offenders, as recognized by the U.S. Supreme Court in Atkins, which held that imposing the death penalty on persons -7- states went well beyond Miller’s explicit requirements. In a relatively short number of years, societal standards on juvenile homicide offenders have consistently moved away from mandatory sentences of over fifty years. These objective indicia are compelling. Considered as a whole, they do more than demonstrate that Tennessee’s sentencing practice is unusual. These objective indicia suggest that every other state in the nation has decided that a mandatory sentence of more than fifty years for juveniles convicted of first-degree murder, with no aggravating factors, creates an unacceptable risk of a disproportionate sentence. In other words, there is now a national consensus against the type of statute Tennessee has. 3. Proportionality In our analysis, the seriousness of Mr. Booker’s crime must weigh heavily. The Eighth Amendment’s proportionality principle does not just implicate the status of the offender and the severity of the punishment; it also addresses the nature of the crime. See Graham, 560 U.S. at 86 (Roberts, C.J., concurring in the judgment). Moreover, there are clearly some juvenile offenders from whom society needs and deserves protection for fifty- one years—or even longer. But there are other juvenile offenders convicted of first-degree murder for whom such a lengthy incarceration is not warranted. A mandatory sentence, coupled with a minimum service in excess of fifty years, presents a serious risk of a disproportionate sentence. Is the risk of a disproportionate sentence so high for juvenile offenders that Tennessee’s statutes violate the Eighth Amendment? The objective indicia in this case provide a solid foundation for making that assessment. Considering the qualities of youth the U.S. Supreme Court has recognized, as well as the compelling objective indicia of a national consensus, I agree with the plurality’s conclusion that an automatic life sentence with a minimum of fifty-one years, when imposed on juveniles convicted of first-degree murder with no aggravating factors, violates the Eighth Amendment. The evidence of national consensus in this case provides both the basis of the Eighth Amendment proportionality analysis and its limiting principle. I would not join the plurality’s judgment in favor of Mr. Booker in the absence of solid objective indicia of national consensus. with intellectual disabilities violated the United States Constitution. 536 U.S. at 314 (commenting that “[m]uch has changed since” the Court issued its decision in Penry v. Lynaugh, 492 U.S. 302, 340 (1989), holding that executing intellectually disabled people convicted of capital offenses did not contravene the Eighth Amendment). See Coleman v. State, 341 S.W.3d 221, 234–35 (Tenn. 2011) (summarizing the changes regarding intellectual disability). -8- II. REMEDY Because the unconstitutionally high risk of a disproportionate sentence for juvenile homicide offenders stems from Tennessee’s unique combination of (1) a mandatory sentence plus (2) a minimum incarceration period of over fifty years, that risk can be ameliorated by changing either parameter. In other words, the unacceptably high risk of disproportionality can be reduced by either (a) giving sentencing authorities discretion to sentence juveniles convicted of first-degree murder a lesser sentence, or (b) reducing the mandatory sentence applicable to juveniles convicted of first-degree murder to a level that comports with the national standards, as reflected in other states’ sentencing statutes. The remedy adopted in Justice Lee’s plurality opinion accomplishes this, and is consistent with the positions of the parties in the event of a finding of unconstitutionality. As described in Justice Lee’s plurality opinion, the remedy applies the pre-1995 version of Tennessee Code Annotated § 40-35-501(h) to Mr. Booker, a juvenile offender convicted of first-degree murder with no aggravating factors.8 Thus, Mr. Booker will remain sentenced to a sixty-year term, but he is eligible for—though not guaranteed—supervised release on parole after serving between twenty-five and thirty-six years. For this reason, I concur in the remedy adopted in Justice Lee’s plurality opinion. This remedy leaves the General Assembly free, in its discretion, to enact a new sentencing statute for juvenile offenders convicted of first-degree murder with no aggravating factors, consistent with the national consensus. III. REJOINDER Justice Bivins’s well-stated dissent makes a number of important points that warrant this respectful response. The dissent first says the majority “impermissibly moves the Court into an area reserved to the legislative branch.” It does not. The view expressed in the dissent was rejected by the Founders in the earliest days of our nation. The Federalist Papers explain that, when courts hold statutes unconstitutional, it does not mean the judiciary has assumed superiority over the legislative branch. It means instead that the Constitution is superior to both branches: 8 This appears consistent with the remedy suggested by the State in the event of a finding of unconstitutionality, to elide the objectionable part of Tennessee Code Annotated § 40-35-501 that requires service of at least fifty-one years in prison, as to juvenile offenders convicted of first-degree murder, and hold that the remainder of the statute is enforceable. -9- If it be said that the legislative body are themselves the constitutional judges of their own powers, and that the construction they put upon them is conclusive upon the other departments, it may be answered, that this cannot be the natural presumption, where it is not to be collected from any particular provisions in the Constitution. . . . [T]he courts were designed to be an intermediate body between the people and the Legislature, in order, among other things, to keep the latter within the limits assigned to their authority. . .. Nor does this conclusion by any means suppose a superiority of the judicial to the legislative power. It only supposes that the power of the people is superior to both; and that where the will of the Legislature, declared in its statutes, stands in opposition to that of the people, declared in the Constitution, the judges ought to be governed by the latter rather than the former. The Federalist No. 78 (Alexander Hamilton). In ruling on the constitutionality of a statute, we do not usurp the job of the legislative branch; we do our own job. The dissent next notes that the holding in Miller dealt only with sentences of life without parole, and admonishes that the majority fails to apply the Supreme Court’s holdings “as they are written, not what we wish were true.”9 And yet the dissent acknowledges that the Supreme Court has never addressed whether a statute such as Tennessee’s violates the Eighth Amendment. Respectfully, judicial restraint does not prohibit lower courts from taking up constitutional issues of first impression. It’s been an everyday practice since the earliest days of our nation.10 9 The dissent cites cases such as Arkansas v. Sullivan, 532 U.S. 769 (2001). Sullivan says only that states are not free to contradict the Court's “controlling precedent” on factual situations where the Court has issued a definitive ruling. Id. at 771. Nothing in that opinion, or any other, prohibits states from considering issues of first impression under the federal constitution. 10 Years before he penned his famous dissent in Plessy v. Ferguson, Justice John Marshall Harlan wrote for the United States Supreme Court: Upon the state courts, equally with the courts of the Union, rests the obligation to guard, enforce, and protect every right granted or secured by the constitution of the United States and the laws made in pursuance thereof, whenever those rights are involved in any suit or proceeding before them; for the judges of the state courts are required to take an oath to support that constitution, and they are bound by it. . . . If they fail therein . . . the party aggrieved may bring the case from the highest court of the state in which the question could be decided, to this court for final and conclusive determination. -10- The question of whether Tennessee’s mandatory life sentence statute, as applied to juveniles, violates the Eighth Amendment has not yet been presented to the United States Supreme Court. It has been presented to us. We are obliged to answer it as best we can. Our decision is then subject to the High Court’s review. Next, in its analysis, the dissent offers a lengthy discourse on why Tennessee’s mandatory life sentence, as applied to juvenile offenders, is not the “functional equivalent” of a life-without-parole sentence. The inclusion of this discussion is a puzzler. Here’s why. In this appeal, Mr. Booker offered two theories for why Tennessee’s statute violates the Eighth Amendment. First, Mr. Booker argued that, under the well- established Eighth Amendment analysis in Roper, Graham, etc., and based on objective indicia of a national consensus, Tennessee’s mandatory sentencing statute violates the Eighth Amendment. Second, in the alternative, Mr. Booker contended that Tennessee’s mandatory life sentence is the “functional equivalent” of a mandatory sentence of life without parole, which was held unconstitutional in Miller. In both the plurality opinion and this separate opinion, the majority of the Court relies exclusively on the well-established Supreme Court analytical framework to hold that Tennessee’s statute violates the Eighth Amendment. That pretermits Mr. Booker’s alternative “functional equivalency” argument. There was no reason to even discuss it. If the majority doesn’t even discuss the alternative functional equivalency argument, there’s no reason for the dissent to spend pages and pages discrediting it.11 Meanwhile, however, the dissent fails to refute the reasoning actually relied upon by the majority of the Court. Perhaps most troubling, the dissent virtually ignores the objective indicia of a national consensus against a sentencing statute like Tennessee’s. The dissent’s only response to it is to shrug—in a footnote—that there is no way to “predict with confidence what the Supreme Court may say” if it were faced with the data Mr. Booker presents. This is weak tea. The conclusion demonstrated by the objective indicia in this case is irrefutable: Tennessee’s mandatory life sentence, as applied to juveniles, renders our State an island in the nation. We must not simply shrug that off. Robb v. Connolly, 111 U.S. 624, 637 (1884). 11 The only reason offered by the dissent is that the functional equivalency argument is used in other state and federal court opinions. Perhaps they are dissenting from those other opinions. It makes little sense for the dissent to fault the majority for failing to use the functional equivalency reasoning for its holding, and then turn around and criticize that very same reasoning. -11- IV. CONCLUSION For these reasons, I concur in the plurality’s holding that Tennessee Code Annotated section 40-35-501(h)(2), when imposed on a juvenile homicide offender, violates the prohibition against cruel and unusual punishment in the Eighth Amendment to the United States Constitution. I concur in the remedy adopted by the plurality, to hold that Mr. Booker remains sentenced to sixty years in prison but shall be allowed an individualized parole hearing after he has served between twenty-five and thirty-six years in prison, based on release eligibility in the previous version of Tennessee Code Annotated section 40-35- 501(h)(2) in effect from November 1, 1989, to July 1, 1995, as stated in section 40-35- 501(h)(1). I concur in the plurality’s holding that this ruling applies only to offenders who were juveniles at the time of the offense. ___________________________________________ HOLLY KIRBY, JUSTICE -12-	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487762/	11/18/2022 IN THE SUPREME COURT OF TENNESSEE AT KNOXVILLE February 24, 2022 Session Heard at Nashville1 STATE OF TENNESSEE v. TYSHON BOOKER Appeal by Permission from the Court of Criminal Appeals Criminal Court for Knox County No. 108568 G. Scott Green, Judge ___________________________________ No. E2018-01439-SC-R11-CD ___________________________________ Tyshon Booker challenges the constitutionality of Tennessee’s mandatory sentence of life imprisonment when imposed on a juvenile homicide offender. In fulfilling our duty to decide constitutional issues, we hold that an automatic life sentence when imposed on a juvenile homicide offender with no consideration of the juvenile’s age or other circumstances violates the prohibition against cruel and unusual punishment under the Eighth Amendment to the United States Constitution. Mr. Booker stands convicted of felony murder and especially aggravated robbery—crimes he committed when he was sixteen years old. For the homicide conviction, the trial court automatically sentenced Mr. Booker under Tennessee Code Annotated section 40-35-501(h)(2) to life in prison, a sixty-year sentence requiring at least fifty-one years of incarceration. But this sentence does not square with the United States Supreme Court’s interpretation of the Eighth Amendment. When sentencing a juvenile homicide offender, a court must have discretion to impose a lesser sentence after considering the juvenile’s age and other circumstances. Here, the court had no sentencing discretion. In remedying this constitutional violation, we exercise judicial restraint. We need not create a new sentencing scheme or resentence Mr. Booker—his life sentence stands. Rather, we follow the policy embodied in the federal Constitution as explained in Montgomery v. Louisiana, 577 U.S. 190 (2016) and grant Mr. Booker an individualized parole hearing where his age and other circumstances will be properly considered. The timing of his parole hearing is based on release eligibility in the unrepealed version of section 40-35-501(h)(1), previously in effect, that provides for a term of sixty years with release eligibility of sixty percent, but not less than twenty-five years of service. Thus, Mr. Booker remains sentenced to sixty years in prison, and after he has served between twenty-five and thirty-six years, he will receive an individualized parole 1 We first heard oral argument on February 24, 2021. In light of the untimely death of Justice Cornelia A. Clark and by order of this Court filed December 17, 2021, retired Tennessee Supreme Court Justice William C. Koch, Jr. was designated to participate in this appeal. The case was re-argued on February 24, 2022. hearing where his age and other circumstances will be considered. Our limited ruling, applying only to juvenile homicide offenders, promotes the State’s interest in finality and efficient use of resources, protects Mr. Booker’s Eighth Amendment rights, and is based on sentencing policy enacted by the General Assembly. Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Criminal Appeals Reversed in Part SHARON G. LEE., J., delivered the opinion of the Court, in which WILLIAM C. KOCH, JR., SP.J., joined. HOLLY KIRBY, J., filed an opinion concurring in the judgment. JEFFREY S. BIVINS, J., filed a dissenting opinion, in which ROGER A. PAGE, C.J., joined. Eric Lutton, District Public Defender, and Jonathan P. Harwell, Assistant District Public Defender, for the appellant, Tyshon Booker. Herbert H. Slatery III, Attorney General and Reporter; Andrée Sophia Blumstein, Solicitor General; Zachary T. Hinkle, Associate Solicitor General; Mark Alexander Carver, Honors Fellow, Office of the Solicitor General; Charme P. Allen, District Attorney General; and TaKisha M. Fitzgerald and Phillip Morton, Assistant District Attorneys General, for the appellee, State of Tennessee. Amy R. Mohan and L. Webb Campbell II, Nashville, Tennessee, and Marsha L. Levick, Philadelphia, Pennsylvania, for the Amicus Curiae, Juvenile Law Center. Charles W. Bone, Nashville, Tennessee, and J. Houston Gordon, Covington, Tennessee, for the Amici Curiae, The Foundation for Justice, Freedom and Mercy, and Cyntoia Brown Long. Edmund S. Sauer and Richard W.F. Swor, Nashville, Tennessee, for the Amicus Curiae, Raphah Institute. Gibeault C. Creson, Alexandra Ortiz Hadley, and Robert R. McLeod, Nashville, Tennessee, for the Amicus Curiae, Julie A. Gallagher. Gregory D. Smith, J. David Wicker, and Alexandra T. MacKay, Nashville, Tennessee, for the Amicus Curiae, Tennessee State Conference of the NAACP. Meri B. Gordon, Rachel H. Berg, Joshua D. Arters, and Samantha M. Flener, Nashville, Tennessee, for the Amici Curiae, Campaign for the Fair Sentencing of Youth and the Children’s Defense Fund. -2- Michael R. Working, David R. Esquivel, Jeff H. Gibson, Sarah Miller, Angela L. Bergman, Bradley A. MacLean, and Jonathan D. Cooper, Nashville, Tennessee, and Lucille A. Jewel and Stephen Ross Johnson, Knoxville, Tennessee, for the Amici Curiae, Tennessee Association of Criminal Defense Lawyers, National Association of Criminal Defense Lawyers, Charles Lowe-Kelley, and Amos Brown. Thomas H. Castelli, Stella Yarbrough, James G. Thomas, and Nathan C. Sanders, Nashville, Tennessee, for the Amicus Curiae, American Civil Liberties Union of Tennessee. W.J. Michael Cody and William David Irvine Jr., Memphis, Tennessee, for the Amici Curiae, American Baptist College, The American Muslim Advisory Council, The Rt. Rev. John C. Bauerschmidt, Bishop of The Episcopal Diocese of Tennessee, The Rt. Rev. Brian L. Cole, Bishop of the Episcopal Diocese of East Tennessee, The Rt. Rev. Phoebe A. Roaf, Bishop of the Episcopal Diocese of West Tennessee, The Most Reverend J. Mark Spalding, Bishop, Catholic Diocese of Nashville in Tennessee, The Most Reverend Richard F. Stika, Bishop, Catholic Diocese of Knoxville in Tennessee, The Most Reverend David P. Talley, Bishop, Catholic Diocese of Memphis in Tennessee, The Reverend Kevin L. Strickland, Bishop of the Southeastern Synod of the Evangelical Lutheran Church in America, The Black Clergy Collaborative of Memphis, Memphis Interfaith Coalition for Action and Hope, Nashville Organized for Action and Hope, Chattanoogans in Action for Love, Equality, and Benevolence, Interdenominational Ministers Fellowship, Islamic Center of Nashville, CCDA Knoxville, Woodland Presbyterian Church, Knoxville Christian Arts Ministries, Nashville Jewish Social Justice Roundtable, Rabbi Micah Greenstein, Rabbi Jeremy Simons, Rabbi Philip Rice, Ministry Table of West End United Methodist Church, Pastor Anna Lee, Knoxville Underground, Yoke Youth Ministries, Bishop Joseph Warren Walker, Bishop Edward H. Stephens, Jr., Pastor Peris J. Lester, Reverend Dr. Byron C. Moore, MPC, Reverend Dr. J. Lawrence Turner, Minister J.P. Conway, Minister Josh Graves, Professor Lee Camp, Raising a Voice, Reverends Jeannie Hunter and Robert Early, Reverend Mike Wilson, Reverend Mary Louise McCullough, Reverend C. Nolan Huizenga, Reverend Timothy E. Kimbrough, Dave McNeely, Pastor Brad Raby, Pastor Doug Banister, Pastor Russ Ramsey, Pastors Jonathan Nash, Elliott Cherry, and Matt Avery, and Mosaic Church. OPINION I. This case requires us to rule on the constitutionality of the statutory sentencing process for juvenile homicide offenders. History teaches that our constitutional union is preserved best when the three branches of government respect our state and federal constitutions, particularly the proper roles assigned to each branch of government. As -3- Justice Bivins recently reminded us, the Tennessee Constitution establishes this Court as “the supreme judicial tribunal of the [S]tate.” State v. Lowe, 552 S.W.3d 842, 856 (Tenn. 2018) (quoting Barger v. Brock, 535 S.W.2d 337, 340 (Tenn. 1976)). Accordingly, this Court has the sole authority—and responsibility—to “determine the constitutionality of actions taken by the other two branches of government.” Richardson v. Tenn. Bd. of Dentistry, 913 S.W.2d 446, 453 (Tenn. 1995) (citing Tenn. Small Sch. Sys. v. McWherter, 851 S.W.2d 139, 148 (Tenn. 1993)); see also Jordan v. Knox Cnty., 213 S.W.3d 751, 780 (Tenn. 2007) (“When there is a challenge, the judicial branch of government has a duty to determine the substantive constitutionality of statutes, ordinances, and like measures.” (citing City of Memphis v. Shelby Cnty. Election Comm’n, 146 S.W.3d 531, 536 (Tenn. 2004))); Huntsman’s Lessee v. Randolph, 6 Tenn. (5 Hayw.) 263, 271 (1818) (recognizing the courts’ duty to determine the substantive constitutionality of statutes). This Court cannot wield its constitutional prerogative in a way that usurps the authority of the other two branches of government. See Tenn. Const. art. II, § 2. It is not our prerogative to determine whether a statute is “dictated by a wise or foolish policy.” Cosmopolitan Life Ins. Co. v. Northington, 300 S.W.2d 911, 918 (Tenn. 1957). We are not “free to write [our] personal opinions on public policy into law.” Jordan, 213 S.W.3d at 780. However, if our constitutions are to remain viable and their integrity maintained, we must strike down statutes that violate either the federal or the state constitution.2 We have the power and duty to declare a statute void when it violates the prohibition against cruel and unusual punishment in article I, section 16 of the Tennessee Constitution. Brinkley v. State, 143 S.W. 1120, 1122 (Tenn. 1911). There is no precedent or reasoned principle that prevents us from determining whether a Tennessee statute violates a similar constitutional protection in the Eighth Amendment to the United States Constitution. The fact that the United States Supreme Court has not yet addressed the precise question before us provides 2 Hooker v. Haslam, 393 S.W.3d 156, 165 (Tenn. 2012); Planned Parenthood of Middle Tenn. v. Sundquist, 38 S.W.3d 1, 7 (Tenn. 2000), superseded by constitutional amendment, Tenn. Const. art. I, § 36 (2014); Biggs v. Beeler, 173 S.W.2d 946, 948 (Tenn. 1943). The United States Supreme Court has recognized that state courts have jurisdiction to hear federal constitutional claims. Over two hundred years ago, the Court noted: [T]he constitution not only contemplated, but meant to provide for cases within the scope of the judicial power of the United States, which might yet depend before state tribunals. It was foreseen that in the exercise of their ordinary jurisdiction, state courts would incidentally take cognizance of cases arising under the constitution, the laws, and treaties of the United States. Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.) 304, 342 (1816). -4- scant justification to shirk our duty to “say what the law is.” Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803). II. We begin with a review of the facts of this case. On Sunday afternoon, November 15, 2015, sixteen-year-old Tyshon Booker and another juvenile, Bradley Robinson, were riding around in Knoxville with Mr. Robinson’s friend, the twenty-six-year-old victim, G’Metrik Caldwell. The victim drove his car, with Mr. Robinson riding in the front passenger seat and Mr. Booker in the rear passenger seat. Late in the afternoon after the victim pulled his car to a curb, Mr. Booker shot him six times in the back, the side of the chest, and right shoulder. Mr. Robinson and Mr. Booker, who had the victim’s cell phone, ran from the scene. More than $800 and a baggy containing a green leafy substance were found in the victim’s pockets after the shooting. He died from multiple gunshot wounds. Mr. Booker was charged with murder in a petition filed in Knox County Juvenile Court. Following a hearing, the juvenile court transferred his case to the Knox County Criminal Court.3 Mr. Booker was later indicted on two counts of first-degree felony murder and two counts of especially aggravated robbery for taking the victim’s cell phone.4 At trial, a neighbor of Mr. Booker’s testified that the morning after the murder, Mr. Booker told her that he and Mr. Robinson had planned to rob the victim but that the victim resisted and Mr. Robinson yelled at Mr. Booker to shoot. The neighbor further stated that Mr. Booker told her once he started shooting, he could not stop until he had fired all the bullets. When Mr. Booker testified at trial, he admitted shooting the victim but claimed he acted in self-defense. Mr. Booker explained that he and Mr. Robinson rode around with the victim in his car and smoked marijuana and took two pills supplied by the victim. According to Mr. Booker’s testimony, when the victim pulled his car to the curb to let Mr. Booker out, the victim and Mr. Robinson began fighting. Mr. Booker said he saw the victim reaching down for something in the front floorboard, and Mr. Robinson yelled, “He got a gun, bro.” Mr. Booker stated that when he saw the victim holding a gun and starting to turn 3 Only an adult may be tried for first-degree murder, but the juvenile court was authorized to transfer a juvenile offender to criminal court to be tried as an adult. See Tenn. Code Ann. § 37-1-134 (2014 & Supp. 2021). 4 Mr. Robinson was also charged with murder in a juvenile court petition and transferred to criminal court to be tried as an adult. See State v. Robinson, No. E2020-00555-CCA-R3-CD, 2021 WL 1884713, at 6 (Tenn. Crim. App. May 11, 2021), perm. app. denied (Tenn. Sept. 22, 2021). Mr. Robinson and Mr. Booker were indicted together on the same charges. Id. at 1. Mr. Robinson’s case was severed, and a jury convicted him of facilitation of first-degree felony murder and facilitation of especially aggravated robbery. Id. at 6. Mr. Robinson’s effective sentence was thirty-seven years. Id. at 1. -5- toward him in the back seat, Mr. Booker shot the victim until he stopped moving. Mr. Booker denied he planned to rob the victim, explaining that he borrowed the victim’s cell phone to call his girlfriend. Mr. Booker stated that after the shooting, he ran from the scene not realizing he had the victim’s phone in his pocket. The jury convicted Mr. Booker of two counts of first-degree felony murder5 and two counts of especially aggravated robbery. The trial court merged the two felony murder convictions and, without a hearing, sentenced Mr. Booker to life in prison. This sentence has a sixty-year term with release after fifty-one years if all applicable sentencing credits are earned and retained. See Tenn. Code Ann. § 40-35-501(h)(2) (Supp. 2021).6 The trial court merged the two especially aggravated robbery convictions and, after a hearing, sentenced Mr. Booker to twenty years—less than the maximum punishment—to be served concurrently with his life sentence. The trial court denied Mr. Booker’s motion for a new trial. In the Court of Criminal Appeals, Mr. Booker challenged the constitutionality of Tennessee’s automatic life sentence for first-degree murder when imposed on a juvenile.7 The Court of Criminal Appeals affirmed, acknowledging Mr. Booker’s argument but deferring to existing precedent. State v. Booker, E2018-01439-CCA-R3-CD, 2020 WL 1697367, at 33 (Tenn. Crim. App. Apr. 8, 2020). We granted Mr. Booker’s application for permission to appeal to address the constitutionality of Tennessee’s sentence of life imprisonment when automatically imposed on a juvenile homicide offender. Order, State v. Booker, No. E2018-01439-SC- 5 Felony murder is a form of first-degree murder that does not require premeditation but involves a killing committed during the commission of or attempt to commit a violent felony such as arson, rape, or robbery. Tenn. Code Ann. § 39-13-202(a)(2) (2018 & Supp. 2021). Other forms of first-degree murder are killings that are premeditated and intentional, id. § -202(a)(1), result from a bombing, id. § -202(a)(3), or occur during the commission of or attempted commission of an act of terrorism, id. § -202(a)(4). 6 Section 40-35-501(h)(2) is the current version of the statute, which was previously numbered as sections 40-35-501(i)(1) and (i)(2)(a), and is substantively identical. Tennessee law mandates a sentence of death, imprisonment for life without possibility of parole, or imprisonment for life for those convicted of felony murder. See Tenn. Code Ann. §§ 39-13-202(a)(2) & (c)(1)–(2) (2018 & Supp. 2021). Mr. Booker was not eligible for the death penalty, see Roper v. Simmons, 543 U.S. 551, 568 (2005), and the State did not give notice of intent to seek life without parole. See Tenn. Code Ann. § 39-13-208(a)–(c) (2018 & Supp. 2021). Thus, Mr. Booker’s sentence of life imprisonment was mandatory. See Tenn. Code Ann. § 39-13-208(c). 7 Mr. Booker also asserted other claims, including the prosecution’s failure to disclose exculpatory evidence, juror misconduct, improper closing argument and jury instructions, and challenges to the juvenile transfer process. -6- R11-CD (Tenn. Sept. 16, 2020) (granting application for permission to appeal). Mr. Booker argues that the life sentence of at least fifty-one years and no more than sixty years violates the Eighth Amendment to the United States Constitution and article I, section 16 of the Tennessee Constitution. Mr. Booker’s arguments find universal support in the many briefs filed by amici curiae.8 The State contends that the life sentence, which guarantees release after sixty years, contravenes neither the United States Constitution nor the Tennessee Constitution. III. We review questions of constitutional interpretation de novo without presuming the correctness of the lower court’s legal conclusions. State v. Burns, 205 S.W.3d 412, 414 (Tenn. 2006) (citing S. Constructors, Inc. v. Loudon Cnty. Bd. of Educ., 58 S.W.3d 706, 710 (Tenn. 2001)). Ruling on a constitutional challenge to a statute is often an exercise in judicial restraint. We must be careful not to impose our own policy views on the matter or overstep into the General Assembly’s realm of making reasoned policy judgments. See Stein v. Davidson Hotel Co., 945 S.W.2d 714, 717 (Tenn. 1997). Similarly, when construing statutes, “it is our duty to adopt a construction which will sustain [the] statute and avoid constitutional conflict if any reasonable construction exists that satisfies the requirements of the Constitution.” Davis-Kidd Booksellers, Inc. v. McWherter, 866 S.W.2d 520, 529 (Tenn. 1993). The Eighth Amendment and Juvenile Sentencing Over a century ago, the United States Supreme Court acknowledged that the principle of proportionality is embedded in the Eighth Amendment. The Court said that “it is a precept of justice that punishment for crime should be graduated and proportioned to [the] offense.” Weems v. United States, 217 U.S. 349, 367 (1910). The Court’s later opinions applying the proportionality principle do not chart a straight course.9 In 1983, after noting that ‟[t]he principle that a punishment should be proportionate to the crime is deeply rooted and frequently repeated in common-law 8 Briefs were filed as amici curiae by a coalition of religious organizations in Tennessee; the Tennessee State Conference of the NAACP; the Campaign for the Fair Sentencing of Youth and the Children’s Defense Fund; the Juvenile Law Center; the Tennessee and National Associations of Criminal Defense Lawyers; Charles Lowe-Kelley; Amos Brown; the ACLU of Tennessee; the Raphah Institute; the Foundation for Justice, Freedom and Mercy; Cyntoia Brown Long; and Julie A. Gallagher. 9 We have observed that “the precise contours of the federal proportionality guarantee are unclear.” State v. Harris, 844 S.W.2d 601, 602 (Tenn. 1992) (citing Harmelin v. Michigan, 501 U.S. 957 (1991) (Kennedy, J., concurring in part)). -7- jurisprudence,” the Court stated “as a matter of principle . . . a criminal sentence must be proportionate to the crime for which the defendant has been convicted.” Solem v. Helm, 463 U.S. 277, 284, 290 (1983). But eight years later, in Harmelin v. Michigan, 501 U.S. 957 (1991), the Court’s controlling opinion10 held that the Eighth Amendment contains a “narrow proportionality principle” that “does not require strict proportionality between crime and sentence” but “forbids only extreme sentences that are ‘grossly disproportionate’ to the crime.” Harmelin, 501 U.S. at 997, 1001 (Kennedy, J., concurring in part and concurring in the judgment) (quoting Solem, 463 U.S. at 288). As to juveniles tried as adults, the Court has been clear about the central importance of proportionality when imposing significant criminal punishment. In 1988, the Court held that the Eighth Amendment prohibited executing juveniles who were under the age of sixteen at the time of the offense. Thompson v. Oklahoma, 487 U.S. 815, 838 (1988). Three principles formed the cornerstone of the Court’s opinion. The first principle was that the “authors of the Eighth Amendment drafted a categorical prohibition against the infliction of cruel and unusual punishments.” Id. at 821. The second principle was proportionality. The Court said that the “punishment should be directly related to the personal culpability of the criminal defendant.” Id. at 834 (quoting California v. Brown, 479 U.S. 538, 545 (1987) (O’Connor, J., concurring)). The third principle was that “there are differences which must be accommodated in determining the rights and duties of children as compared with those of adults.” Id. at 823 (emphasis omitted). Based on these principles, the Court endorsed “the proposition that less culpability should attach to a crime committed by a juvenile than to a comparable crime committed by an adult.” Id. at 835. After noting that “[t]he basis for this conclusion is too obvious to require extended explanation,” the Court stated that “[i]nexperience, less education, and less intelligence make the teenager less able to evaluate the consequences of his or her conduct while at the same time he or she is much more apt to be motivated by mere emotion or peer pressure than is an adult.” Id.11 The Thompson Court declined to extend its decision to juvenile offenders older than sixteen years. Id. at 838. Yet when revisiting the question in 2005, the Court held that the 10 The Court issued a divided opinion in Harmelin and later characterized Justice Kennedy’s separate opinion as the “controlling opinion.” Graham v. Florida, 560 U.S. 48, 59–60 (2010). 11 The Thompson Court said that juveniles’ reduced culpability arose from the fact that (1) juveniles are “less mature and responsible than adults”; (2) juveniles are “more vulnerable, more impulsive, and less self-disciplined than adults”; and (3) adolescents “may have less capacity to control their conduct and to think in long-range terms than adults.” Thompson, 487 U.S. at 834. -8- Eighth Amendment prohibited imposing the death penalty on all juvenile offenders. Roper v. Simmons, 543 U.S. 551, 574, 578–79 (2005). The Roper Court based its decision on the same principles that animated the Thompson Court’s decision. First, the Court said that the Eighth Amendment’s protection against cruel and unusual punishments “flows from the basic ‘precept of justice that punishment for crime should be graduated and proportioned.’” Id. at 560 (quoting Atkins v. Virginia, 536 U.S. 304, 311 (2002)). Second, the Court explained that three differences between juveniles and adults show that “juvenile offenders cannot with reliability be classified among the worst offenders.” Id. at 569. The three differences between juveniles and adults identified in Roper mirror the reasons identified in Thompson. The first difference is that juveniles lack maturity and have “an underdeveloped sense of responsibility.” Id. (quoting Johnson v. Texas, 509 U.S. 350, 367 (1993)). The second difference is that juveniles are “more vulnerable or susceptible to negative influences and outside pressures, including peer pressure.” Id. (citing Eddings v. Oklahoma, 455 U.S. 104, 115 (1982)). The third difference is that “the character of a juvenile is not as well formed as that of an adult.” Id. at 570. Like the Thompson Court, the Roper Court addressed the Eighth Amendment issue by adopting a bright-line prophylactic rule based on the age of the juvenile when the crime was committed. Justice O’Connor, writing separately, agreed that “juveniles as a class are generally less mature, less responsible, and less fully formed than adults, and . . . these differences bear on juveniles’ comparative moral culpability.” Id. at 599 (O’Connor, J., dissenting). But she disagreed with creating a bright-line rule because “the class of offenders . . . is too broad and too diverse to warrant categorical prohibition.” Id. at 601. Justice O’Connor preferred to address proportionality concerns “through individualized sentencing in which juries are required to give appropriate mitigating weight to the defendant’s immaturity, his [or her] susceptibility to outside pressures, his [or her] cognizance of the consequences of his [or her] actions, and so forth.” Id. at 602–03. Thus, Justice O’Connor favored addressing the Eighth Amendment issue with a procedural remedy. In 2010, the Court employed another bright-line prophylactic rule, holding that the Eighth Amendment prohibits sentencing a juvenile who has not committed homicide to a life-without-parole sentence. Graham v. Florida, 560 U.S. 48, 82 (2010). Reflecting the reasoning in Thompson and Roper, the Graham Court’s decision was based on the proportionality principle and the lesser culpability of juveniles. The Court said that “[t]he concept of proportionality is central to the Eighth Amendment.” Id. at 59. Then, relying on the three differences between juveniles and adults discussed in Roper, the Court stated that juveniles are “less deserving of the most severe punishments” because they are less -9- culpable. Id. at 68. Finally, the Court said that “[n]o recent data provide reason to reconsider the Court’s observations in Roper about the nature of juveniles.” Id. Chief Justice Roberts concurred in the judgment, agreeing that Mr. Graham’s life-without-parole sentence violated the Eighth Amendment. Chief Justice Roberts cited the Roper Court’s conclusion that “juvenile offenders are generally less culpable than adults who commit the same crimes.” Id. at 86 (Roberts, C.J., concurring in the judgment). And he invoked the narrow proportionality rule applicable to noncapital cases. Noting that “an offender’s juvenile status can play a central role in the inquiry,” id. at 90, the Chief Justice said: Terrance Graham committed serious offenses, for which he deserves serious punishment. But he was only 16 years old, and under our Court’s precedents, his youth is one factor, among others, that should be considered in deciding whether his punishment was unconstitutionally excessive. In my view, Graham’s age—together with the nature of his criminal activity and the unusual severity of his sentence—tips the constitutional balance. I thus concur in the Court’s judgment that Graham’s sentence of life without parole violated the Eighth Amendment. Id. at 96. In Miller v. Alabama, 567 U.S. 460 (2012), the Court held that mandatory life-without-parole sentences for juveniles violated the Eighth Amendment. The Court based its decision on the two essential principles found in Thompson, Roper, and Graham but fashioned a different remedy to address the constitutional violation. First, after noting that “[t]he concept of proportionality is central to the Eighth Amendment,” the Court said that the Eighth Amendment “guarantees individuals the right not to be subjected to excessive sanctions” and that this right “flows from the basic ‘precept of justice that punishment for crime should be graduated and proportioned’ to both the offender and the offense.” Id. at 469 (first quoting Graham, 560 U.S. at 59; and then quoting Roper, 543 U.S. at 560). Second, the Court said that “children are constitutionally different from adults for purposes of sentencing.” Id. at 471. Relying on the “three significant gaps between juveniles and adults” discussed in Graham, the Court said that juveniles “are less deserving of the most severe punishments” because they “have diminished culpability and greater prospects for reform.” Id. (quoting Graham, 560 U.S. at 68). The Court added that “the distinctive attributes of youth diminish the penological justifications for imposing the harshest sentences on juvenile offenders, even when they commit terrible crimes.” Id. at 472. - 10 - But the Court declined to devise another bright-line rule to remedy the Eighth Amendment problem and instead turned its attention to the sentencing process itself. Consistent with Justice O’Connor’s dissenting opinion in Roper seven years earlier, the Court decided that the proportionality concerns should be addressed by requiring individualized sentencing so that the sentencer could give appropriate weight to the youthfulness of the defendant. Id. at 489. The Court held that mandatory life-without-parole sentences for juveniles “contravene[d] Graham’s (and also Roper’s) foundational principle: that imposition of a State’s most severe penalties on juvenile offenders cannot proceed as though they were not children.” Id. at 474. Thus, the Court found that subjecting juveniles to a mandatory life-without-parole sentence violates the Eighth Amendment because the sentencing authority did not have the opportunity to consider the “mitigating qualities of youth.” Id. at 476 (quoting Johnson, 509 U.S. at 367). The Miller Court emphasized the fundamental importance of individualized sentencing to avoid imposing disproportionate punishment on juveniles facing a state’s harshest penalties. Mandatory sentencing laws “remov[e] youth from the balance” and “prohibit a sentencing authority from assessing whether the law’s harshest term of imprisonment proportionately punishes a juvenile offender.” Id. at 474. Without individualized sentencing for juveniles facing a state’s harshest penalties, the sentencing authority “misses too much,” and thereby runs “too great a risk of disproportionate punishment.” Id. at 477, 479. The Court decided two Miller-related cases after 2012. In 2016, the Court held that Miller should be applied retroactively because it announced a new substantive rule of constitutional law. Montgomery v. Louisiana, 577 U.S. 190, 212 (2016). The petitioner in Montgomery had been automatically sentenced to life without parole for an offense he committed when he was seventeen years old. Id. at 194. After the Court decided Miller, the petitioner, then sixty-nine years old, sought collateral review of his mandatory sentence. Id. at 195. The Court applied Miller retroactively and explained that a Miller violation did not require resentencing but could be remedied by allowing juvenile homicide offenders to be considered for parole. Id. at 206. In 2021, the Court held that neither the Eighth Amendment nor Miller requires separate findings or an on-the-record explanation of permanent incorrigibility before imposing a discretionary life-without-parole sentence on a juvenile. Jones v. Mississippi, 141 S. Ct. 1307, 1318–19, 1321 (2021). In neither case did the Court retreat from the essential principles in Thompson, Roper, Graham, and Miller. In Montgomery, the Court repeated Miller’s point that “[b]y making youth (and all that accompanies it) irrelevant to imposition of that harshest prison sentence,” a mandatory life-without-parole sentence “poses too great a risk of disproportionate punishment.” Montgomery, 577 U.S. at 195 (quoting Miller, 567 U.S. at 479). In Jones, the Court acknowledged that “youth matters in sentencing,” and the “key - 11 - assumption” in Miller is “that discretionary sentencing allows the sentencer to consider the defendant’s youth, and thereby helps ensure that life-without-parole sentences are imposed only in cases where that sentence is appropriate in light of the defendant’s age.” Jones, 141 S. Ct. at 1314, 1318. The Miller Court’s decision that the mandatory imposition on a juvenile of a life-without-parole sentence poses too great a risk of disproportionate punishment reflects its concern, at least when a state’s severest punishments are involved, that a mandatory sentencing scheme risks erroneously depriving a juvenile’s right to receive a proportionate sentence. Miller, 567 U.S. at 479. The Court’s remedy does not preclude juveniles from being sentenced to life without parole. Rather, the remedy requires a procedural safeguard—individualized sentencing—to minimize the risk of erroneously imposing a disproportionate sentence. Id. at 489. Although this case involves a life sentence, and not death or life without parole, three essential rules can be derived from the Thompson, Roper, Graham, and Miller line of cases when considering proportionality. The first principle is that the Eighth Amendment’s requirement of proportionality means that punishment has to be graduated and proportioned. The second principle is that steps must be taken to minimize the risk of a disproportionate sentence when juveniles are facing the possible imposition of a state’s harshest punishments. The third principle is that these steps, whatever they may be, must allow the sentencer to take the mitigating qualities of youth into account by considering, among other relevant factors, (a) the juvenile’s “lack of maturity” and “underdeveloped sense of responsibility,” which can lead to “recklessness, impulsivity, and heedless risk-taking”; (b) the juvenile’s vulnerability and susceptibility to negative influences and outside pressure, as from family and peers; and (c) the fluidity of the development of the juvenile’s character and personal traits. Miller, 567 U.S. at 471 (quoting Roper, 543 U.S. at 569–70). Tennessee’s Automatic Life Sentence With these principles in mind, we turn to a proportionality analysis. In determining whether Tennessee’s automatic life sentence when imposed on juvenile homicide offenders complies with the Eighth Amendment’s requirement of proportionality, we consider whether “the punishment for the crime conforms with contemporary standards of decency,” “whether the punishment is grossly disproportionate to the offense,” and whether the sentence goes beyond what is necessary to accomplish “legitimate penological objectives.” Abdur’Rahman v. Bredesen, 181 S.W.3d 292, 306 (Tenn. 2005) (citing Roper, 543 U.S. at 560–61; Atkins, 536 U.S. at 311–12; Solem, 463 U.S. at 292). “Reliable objective evidence of contemporary values” can be provided by a review of “legislation enacted by the country’s legislators.” Penry v. Lynaugh, 492 U.S. 302, 331 - 12 - (1989) abrogated by Atkins, 536 U.S. 304. This is in addition to “[a]ctual sentencing practices” because they are “an important part of the Court’s inquiry into consensus.” Graham, 560 U.S. at 62. Compared to the other forty-nine states, Tennessee is a clear outlier in its sentencing of juvenile homicide offenders. So much so that Tennessee’s life sentence when automatically imposed on a juvenile is the harshest of any sentence in the country. No one, including the dissent, disputes that a juvenile offender serving a life sentence in Tennessee is incarcerated longer than juvenile offenders serving life sentences in other states. For example, had Mr. Booker committed felony murder in nearby Alabama, he would have been eligible for release in fifteen years; twenty years in Virginia; twenty-five years in North Carolina, Kentucky, and Missouri; thirty years in Georgia; and twenty-five to thirty years in Arkansas.12 Juvenile homicide offenders with life sentences (and in some states, even life-without-parole sentences) may be eligible for release within twenty-five years or less in twenty-three states (Alabama, California, Florida, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming) and the District of Columbia.13 The release eligibility for a life sentence ranges 12 See Ala. Code § 15-22-28(e)(2) (West, Westlaw through Act 2022-442 of 2022 Reg. & First Sp. Sess.); Va. Code Ann. § 53.1-165.1(E) (West, Westlaw through 2022 Reg. Sess. and 2022 Sp. Sess. I, cc. 1 to 22); N.C. Gen. Stat. Ann. § 15A-1340.19A to .19C. (West, Westlaw through S.L. 2022-75 of 2022 Reg. Sess.); Ky. Rev. Stat. Ann. § 640.040 (West, Westlaw through 2022 Reg. & Extraordinary Sess.); Mo. Ann. Stat. § 558.047.1(1)–(2) (West, Westlaw through WID 37 of 2022 Second Reg. Sess.); Ga. Code Ann. § 17-10-6.1 (West, Westlaw through 2022 Reg. Sess.); Ark. Code Ann. § 16-93-621(a)(2)(A) (West, Westlaw through 2022 Third Extraordinary Sess.). 13 See Ala. Code § 15-22-28(e)(2) (15 years); Cal. Penal Code § 3051(b)(4) (West, Westlaw current with urgency legislation through Ch. 997 of 2022 Reg. Sess.) (25 years for a life-without-parole sentence); D.C. Code Ann. §§ 24-403(a) (West, Westlaw through June 30, 2022) (15 years), -403.01(c)(2)(B) (no life without parole); Fla. Stat. Ann. § 921.1402(2) (West, Westlaw through July 1, 2022) (25 years for a life sentence); Haw. Rev. Stat. Ann. §§ 706-656(1), -669(1) (West, Westlaw through 2022 Reg. Sess.) (set by parole board, with immediate eligibility and consideration of youth); Idaho Code Ann. § 18-4004 (West, Westlaw through 2022 Second Reg. Sess. & First Extraordinary Sess.) (10 years); 730 Ill. Comp. Stat. Ann. §§ 5/5-4.5-115, 5-4.5-105, 5-8-1 (West, Westlaw through P.A. 102–1102 of 2022 Reg. Sess.) (20 years, with review of Miller’s mitigating considerations and discretionary enhancements, not applicable to Mr. Booker’s facts, requiring 40 years and up to natural life); Ky. Rev. Stat. Ann. § 640.040(1) (25 years); La. Stat. Ann. § 15:574.4(E) (West, Westlaw through 2022 First Extraordinary & Reg. Sess.) (25 years for all juvenile homicide offenders, with mandatory conditions); Md. Code Ann., Corr. Servs. § 7-301(d) (West, Westlaw through 2022 Reg. Sess.) (25 years for a life sentence); Mo. Ann. Stat. § 558.047(1)(2) (25 years for a life sentence); Nev. Rev. Stat. Ann. § 213.12135 (West, Westlaw through Ch. 2 (End) of 33rd Sp. Sess. 2021) (20 years, but not for multiple victims); State v. Comer, 266 A.3d 374, 380–81 (N.J. 2022) (permitting juvenile homicide offenders to petition for a 20-year look-back hearing applying Miller factors - 13 - from twenty-five to thirty-five years in twelve other states (Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Massachusetts, Minnesota, Montana, New Mexico, Ohio, and Pennsylvania).14 In sum, compared to Tennessee’s fifty-one-year minimum and sixty-year maximum sentence, thirty-six or nearly three-fourths of other states allow juvenile offenders release eligibility in less than thirty-five years. Two states (Oklahoma and Texas) guarantee parole eligibility in thirty-eight and forty years, respectively.15 The other twelve states besides Tennessee (Alaska, Indiana, Iowa, Kansas, Maine, Michigan, Mississippi, Nebraska, New Hampshire, South Carolina, South Dakota, and Vermont) to avoid constitutional infirmity of a mandatory 30-year-minimum sentence under N.J. Stat. Ann. § 2C:11-3(b)(1)); N.Y. Penal Law §§ 70.00(3)(a)(i), -(5) (West, Westlaw through L.2022, chs. 1 to 566) (20 to 25 years; no life without parole); N.C. Gen. Stat. Ann. §15A-1340.19A (25 years for a life sentence, no life without parole for felony murder); N.D. Cent. Code Ann. § 12.1-32-13.1 (West, Westlaw through 2021 Reg. & Sp. Sess.) (20 years for all); Or. Rev. Stat. Ann. § 144.397 (West, Westlaw through 2022 Reg. Sess.) (15 years for life and life without parole); 13 R.I. Gen. Laws Ann. § 13-8-13(e) (West, Westlaw current with effective legislation through Ch. 442 of 2022 Reg. Sess.) (20 years for a life sentence); Utah Code Ann. §§ 76-3-206(2)(a)(ii), (b) (West, Westlaw through 2022 Third Sp. Sess.) (25 years; no life without parole); Va. Code Ann. § 53.1-165.1(E) (20 years for all); Wash. Rev. Code Ann. § 9.94A.730(1) (West, Westlaw through 2022 Reg. Sess.) (20 years for life); W. Va. Code Ann. §§ 61-11-23(a)–(b) (West, Westlaw through 2022 First Sp. Sess., Reg. Sess., Second Sp. Sess., Third Sp. Sess., & Fourth Sp. Sess.) (15 years; no life without parole); Wis. Stat. Ann. § 973.014(1g)(a)(1) (West, Westlaw through 2021 Act 267) (20 years for a life sentence, with discretion); Wyo. Stat. Ann. § 6-10-301(c) (West, Westlaw through 2022 Budget Sess.) (25 years for all except for cases with certain subsequent adult offenses). 14 See Ariz. Rev. Stat. Ann. § 13-751(A)(2) (West, Westlaw through legislation effective Sept. 24, 2022 of the Second Reg. Sess.) (25 to 35 years for life); Ark. Code Ann. § 16-93-621(a)(2)(A) (25 to 30 years for all juvenile homicide offenders); Colo. Rev. Stat. Ann. §§ 17-34-102(8)(a)–(b) (West, Westlaw through Second Reg. Sess.) (30 years for juvenile homicide offenders participating in a specialized rehabilitation program); Conn. Gen. Stat. Ann. § 54-125a(f)(1) (West, Westlaw through 2022 Reg. Sess.) (the greater of 12 years or 60% of the sentence for a sentence of 50 years of less; 30 years for a sentence of more than 50 years); Del. Code Ann. tit. 11, § 4204A(d)(2) (West, Westlaw through Ch. 424 of 151st Gen. Assemb. 2021–2022) (30 years for all), id. § 4204A(b)(2); Ga. Stat. Ann. § 17-10-6.1 (30 years for a life sentence); Mass. Gen. Laws. Ann. ch. 279 § 24 (West, Westlaw through Ch. 125 of 2022 Second Ann. Sess.) (20 to 30 years for a life sentence); Minn. Stat. Ann. § 244.05(4)(b) (West, Westlaw through 2022 Reg. Sess.) (30 years for life); Mont. Code Ann. § 46-23-201(4) (West, Westlaw through 2021 Sess.) (30 years); N.M. Stat. Ann. § 31-21-10(A) (West, Westlaw through 2022 Second Reg. & Third Sp. Sess.) (30 years for life); Ohio Rev. Code Ann. § 2929.03 (West, Westlaw through File 132 of 134th Gen. Assemb., 2021-2022) (20 to 30 years for life); 18 Pa. Stat. & Cons. Stat. Ann. § 1102.1 (West, Westlaw through 2022 Reg. Sess. Act 97) (25 to 35 years). 15 See Tex. Gov’t Code Ann. § 508.145(b) (West, Westlaw through end of 2021 Reg. & Called Sess.) (40 years for a life sentence); Anderson v. State, 130 P.3d 273, 282–83 (Okla. Crim. App. 2006) (85% of 45-year presumptive life sentence). - 14 - allow a sentencer to use discretion and impose a term of less than fifty years on juvenile homicide offenders.16 In short, Tennessee is out of step with the rest of the country in the severity of sentences imposed on juvenile homicide offenders. Automatically imposing a fifty-one-year-minimum life sentence on a juvenile offender without regard to the juvenile’s age and attendant circumstances can, for some juveniles, offend contemporary standards of decency. Next, we consider whether a sixty-year life sentence requiring a minimum of fifty-one years of service when imposed on juvenile offenders is grossly disproportionate to the crime. The answer is—it depends. A fifty-one-year prison sentence will be proportionate for some offenders, but not for others. This is where individualized sentencing matters. Proportionality concerns can be addressed when the sentencer can consider the offender’s age and circumstances, the nature of the crime, and the severity of the sentence. See Graham, 560 U.S. at 90 (Roberts, C.J., concurring in the judgment). But in juvenile first-degree murder cases, and only in these cases, a sentence is automatically imposed without considering age, the nature of the crime, or any other factors. The mandatory life sentence when imposed on juvenile offenders is one-size-fits-all. Yet juvenile offenders and their crimes are not all the same. Thus, Tennessee’s automatic life 16 See Alaska Stat. Ann. §§ 12.55.125(a) (West, Westlaw through Aug. 27, 2022 of 2022 Second Reg. Sess.) (30 to 99 years with aggravating factors, many involving discretion), -(j) (parole eligibility for 99 at 49.5 years), -(m) (discretion if mandatory 99-year sentence for killing during robbery “would be manifestly unjust”), 33.16.090(b) (two-thirds parole eligibility for first-degree murder but subject to other discretion-empowering provisions); Ind. Code Ann. §§ 35-50-2-3; 35-50-6-4(b) (West, Westlaw through 2022 Second Reg. Sess., Second Reg. Tech. Sess., & Second Reg. Sp. Sess.) (discretionary sentencing between 45 and 65 years or life without parole); State v. Zarate, 908 N.W.2d 831, 855 (Iowa 2018) (discretionary factors under Iowa Code Ann. § 902.1(2)(b)); Kan. Stat. Ann. §§ 21-6620, -6623 (West, Westlaw through laws enacted during 2022 Reg. Sess. effective on July 1, 2022) (25, 40, or 50 years, with discretion); Me. Rev. Stat. Ann. tit. 17-A, § 1603(1) (West, Westlaw through 2022 Second Reg. Sess.) (at least 25 years, with discretion); People v. Skinner, 917 N.W.2d 292, 317 (Mich. 2018) (25 years to life without parole, with discretion under Mich. Comp. Laws Ann. § 769.25(9)); Chandler v. State, 242 So. 3d 65, 69–71 (Miss. 2018) (discretion under Miller); State v. Castaneda, 842 N.W.2d 740, 757–58, 762 (Neb. 2014) (holding that resentencing was required because life sentence with “no meaningful opportunity to obtain release” was imposed before Miller and without consideration of factors required by Miller); Petition of State, 103 A.3d 227, 229, 236 (N.H. 2014) (ordering retroactive resentencing under Miller for four juvenile homicide offenders, despite mandatory life without parole required by New Hampshire law); State v. Lopez, 261 A.3d 314, 320 (N.H. 2021) (upholding a discretionary 45-year-minimum sentence); Aiken v. Byars, 765 S.E.2d 572, 578 (S.C. 2014) (holding that juveniles sentenced to life without parole before Miller were entitled to resentencing hearing for consideration of Miller factors); State v. Quevedo, 947 N.W.2d 402, 411 (S.D. 2020) (upholding discretionary sentence of 90 years, after consideration of Miller factors, with eligibility for parole after 45 years); Vt. Stat. Ann. tit. 13, § 2303 (West, Westlaw through Chs. 186 and M-19 of Adjourned Sess. of 2021–2022) (35 years or more, with discretion). - 15 - sentence when imposed on juvenile offenders lacks the necessary procedural protection to guard against disproportionate sentencing. One consistent thread running through the Supreme Court’s decisions is that “children are constitutionally different from adults for purposes of sentencing.” Miller, 567 U.S. at 471 (describing the proposition established by Roper and Graham). These differences include a child’s “lack of maturity and an underdeveloped sense of responsibility,” which “often result in impetuous and ill-considered actions and decisions.” Roper, 543 U.S. at 569 (quoting Johnson, 509 U.S. at 367). In addition, a juvenile’s brain and character traits are not fully developed, and a juvenile is particularly “susceptible to negative influences and outside pressures.” Id. These factors bear directly on a juvenile’s culpability. Yet Tennessee statutes that require a juvenile homicide offender to be automatically sentenced to life imprisonment allow for no consideration of the principles stated in these Supreme Court decisions. In Tennessee, there is no sentencing hearing. There is no recognition that juveniles differ from adults. And the sentencer has no discretion to consider or impose a lesser punishment. See Jones, 141 S. Ct. at 1321 (noting that in a case involving a juvenile who committed a homicide, a state’s discretionary sentencing system is both constitutionally necessary and constitutionally sufficient). Instead, Mr. Booker’s life sentence requires service of between fifty-one and sixty years. Even if he earns every available sentencing credit, Mr. Booker will spend more time behind bars than nearly any adult with the same sentence. As the Supreme Court has observed, lengthy sentences inflict more punishment on juvenile offenders than similarly situated adult offenders because juveniles will spend a higher percentage of their natural lives in prison. See Graham, 560 U.S. at 70–71; Miller, 567 U.S at 477. Although Mr. Booker had no sentencing hearing for the first-degree murder conviction, he did have a sentencing hearing on the especially aggravated robbery conviction. At that hearing, the trial court was allowed to consider as a mitigating factor whether Mr. Booker lacked substantial judgment in committing the offense because of his youth. Tenn. Code Ann. § 40-35-113(6). The trial court imposed on Mr. Booker not the harshest sentence, but a mid-range sentence of twenty years to be served concurrently with the life sentence for first-degree murder. Had there been a sentencing hearing for the first-degree murder conviction, the trial court could have considered Mr. Booker’s age and circumstances and the nature of his crime. According to evidence presented at his juvenile transfer hearing, proof at trial, and evidence proffered at the hearing on the motion for new trial, Mr. Booker grew up in a poor, unstable, and chaotic environment. Violence was common, and Mr. Booker witnessed shootings and often heard gunfire in his neighborhood. Before Mr. Booker was born, his father was murdered. According to Mr. Booker, he was physically and - 16 - emotionally mistreated by his mother. He saw his mother being physically abused. Once when his mother was selling drugs, Mr. Booker and his family were held at gunpoint during a home invasion. Mr. Booker’s relationship with his mother was “rocky,” and she often “kicked” him out of the house. During these times, he lived with friends and “door to door.” In the eighth grade, Mr. Booker started smoking marijuana to cope with his problems. He smoked marijuana with his family, including his mother. When he was thirteen, Mr. Booker became close to his paternal grandfather. But his grandfather was stabbed to death at his home just over a year later. Mr. Booker, who had visited his grandfather shortly before the stabbing, blamed himself for not being there to protect his grandfather. After his grandfather was murdered, Mr. Booker began skipping school, increased his marijuana use, and misbehaved more often. Before his grandfather’s murder, Mr. Booker had never been in serious trouble. According to his juvenile record, he was cited for disorderly conduct, making a false report, violating curfew, and being a runaway. None of these matters led to formal charges, and all were diverted through the juvenile court system. According to psychological expert testimony, Mr. Booker suffered from cannabis use disorder, secondary to post-traumatic stress disorder, and was amenable to treatment. Expert testimony about adolescent brain development showed that the systems that register emotions, arousal, and reward sensitivity do not fully develop until around ages fourteen to sixteen. Yet the parts of the brain that inhibit and regulate those drives do not fully develop until age twenty to twenty-five. Mr. Booker’s post-traumatic stress disorder exacerbated this disparity—making the brain’s “alarm system” overly sensitive to threats, bypassing adaptive responses like judgment and executive functioning, and hijacking the brain into a state of “fight, flight, or freeze.” Thus, a young person like Mr. Booker is more impulsive, a bigger risk-taker, and has poor judgment. In sum, Mr. Booker’s background failed to provide him stability and security, which only increased the likelihood that he would make rash, reckless, and impulsive decisions. But these circumstances were not considered at sentencing for the murder conviction. Finally, we consider whether Tennessee’s automatic life sentence is supported by sufficient penological objectives when imposed on a juvenile. See Miller, 567 U.S. at 472–74. These objectives are generally considered to be retribution, deterrence, preventing crime through incarceration, and rehabilitation. Id. Retribution is tied to an offender’s culpability and blameworthiness. Thus, the reason for retribution is reduced with a juvenile compared to an adult because of the juvenile’s reduced culpability. See Miller, 567 U.S. at 471–72. And deterrence is not effective because “‘the same characteristics that render juveniles less culpable than adults’––their immaturity, recklessness, and impetuosity–– make them less likely to consider potential punishment.” Id. (quoting Graham, 560 U.S. at 71). The benefit of preventing crime through incarceration is no justification—since it necessarily implies that the “juvenile offender forever will be a danger to society” because he is incorrigible, and “incorrigibility is inconsistent with youth.” Id. at 472–73 (quoting Graham, 560 U.S. at 72–73). The justification of rehabilitation also fails because - 17 - Tennessee’s automatic life sentence rejects the notion that a juvenile should have the chance to change and mature. Id. at 473. Although a state need not guarantee a juvenile offender eventual freedom, it must not foreclose all genuine hope of a responsible and productive life or reconciliation with the community. See Graham, 560 U.S. at 75. This denial renders “an irrevocable judgment about that person’s value and place in society.” Id. at 74. Thus, the life sentence imposed on Mr. Booker is not supported by sufficient penological objectives. From Thompson, Roper, Graham, Miller, Montgomery, and Jones, we know that juveniles are constitutionally different than adults for sentencing purposes; juveniles have lesser culpability and greater amenability to rehabilitation. To be clear, we are not holding that a juvenile may never receive a life sentence in Tennessee. But consistent with Supreme Court precedent, the sentencer must have discretion to impose a lesser punishment and to properly consider an offender’s youth and other attendant circumstances. Tennessee’s sentencing scheme for juvenile homicide offenders—which automatically imposes the most extreme punishment short of life without parole in the United States—fails to recognize that “children are constitutionally different from adults for purposes of sentencing.” Miller, 567 U.S. at 471. The current automatic sixty-year sentence does not square with the United States Supreme Court’s interpretation of the Eighth Amendment. In sum, Tennessee’s automatic life sentence when imposed on juvenile homicide offenders is an outlier when compared with the other forty-nine states, it lacks individualized sentencing which serves as a bulwark against disproportionate punishment, and it goes beyond what is necessary to accomplish legitimate penological objectives. For these reasons, we hold that Tennessee’s automatic life sentence with a minimum of fifty-one years when imposed on juveniles violates the Eighth Amendment. Because we conclude that Tennessee’s mandatory fifty-one- to sixty-year sentence violates the Eighth Amendment, we need not consider Mr. Booker’s arguments that his sentence is equivalent to life without parole and is thus subject to Miller,17 or that his life sentence violates article I, section 16 of the Tennessee Constitution. Our direct application of Eighth Amendment principles pretermits these issues. Remedy for Constitutional Violation We exercise judicial restraint when remedying the unconstitutionality of the current statutory scheme for sentencing juvenile homicide offenders. Rather than creating a new sentencing scheme or resentencing Mr. Booker, we apply the sentencing policy adopted by the General Assembly in its previous enactment of section 40-35-501. In doing so, we make 17 See, e.g., State v. Kelliher, 873 S.E.2d 366 (N.C. 2022). - 18 - no policy decisions. Nor do we substitute our judgment for that of the General Assembly. The parties agree that if the mandatory sentence of fifty-one to sixty years in section 40-35-501(h)(2) is unconstitutional, then we should apply the release eligibility provision that the General Assembly previously enacted and never repealed, that was in effect from November 1, 1989, to July 1, 1995, as stated in section 40-35-501(h)(1),18 which still applies to conduct during that period. Under this unrepealed statute, Mr. Booker remains sentenced to a sixty-year prison term and is eligible for, although not guaranteed, supervised release on parole after serving between twenty-five and thirty-six years. Thus, at the appropriate time, Mr. Booker will receive an individualized parole hearing in which his age, rehabilitation, and other circumstances will be considered. This ruling applies only to juvenile homicide offenders—not to adult offenders. The dissent claims, without any basis, that by upholding the protections of our United States Constitution, we are making policy. But when the Court does its duty and rules on the constitutionality of a statute, it makes no policy of its own. The Court simply implements the policy embodied in the Constitution itself. Without question, the General Assembly determines policy and enacts laws. This Court’s duty is to apply the law and, when necessary, decide whether a law is constitutional. By interpreting state and federal constitutions with reasoned opinions, courts are carrying out the quintessential judicial function to “say what the law is.” Marbury, 5 U.S. (1 Cranch) at 177. Because a party may disagree with a court’s conclusion about the constitutionality of a statute does not mean that the judiciary has “usurped the legislative prerogative.” State v. Soto-Fong, 474 P.3d 34, 43 (Ariz. 2020). The dissent would have us wait until the United States Supreme Court rules on this precise issue. But we will not shirk our duty and ignore an injustice. Our decision today directly affects Mr. Booker and over 100 other juvenile homicide offenders who are or will be incarcerated in Tennessee prisons under an unconstitutional sentencing scheme.19 For these incarcerated individuals, time matters. The United States Supreme Court may not 18 Tennessee Code Annotated section 40-35-501(h)(1) provides: Release eligibility for a defendant committing the offense of first degree murder on or after November 1, 1989, but prior to July 1, 1995, who receives a sentence of imprisonment for life occurs after service of sixty percent (60%) of sixty (60) years less sentence credits earned and retained by the defendant, but in no event shall a defendant sentenced to imprisonment for life be eligible for parole until the defendant has served a minimum of twenty-five (25) full calendar years of the sentence . . . . 19 See Anita Wadhwani & Adam Tamburin, Special Report: In Tennessee, 185 People Are Serving Life for Crimes Committed as Teens, The Tennessean (Mar. 6, 2019), https:// www.tennessean.com/story/news/2019/03/07/juvenile-sentencing-tennessee-cyntoia-brown-clemency-life /2848278002/. Of the 185 juvenile homicide offenders, 120 were sentenced under the current statute that requires incarceration between fifty-one and sixty years. Id. - 19 - have the chance to rule on this precise issue soon, if ever. And we need not wait because the Supreme Court has given us clear guidance in Roper, Graham, Miller, Montgomery, and Jones. Many other state supreme courts have resolved this issue without delay. We must fulfill our duty. Although the constitutionality of Tennessee’s practice of automatically sentencing juvenile homicide offenders to life in prison is an issue of first impression for this Court, the dissent claims the issue is settled law in Tennessee based on several unreported decisions from the Court of Criminal Appeals. Yet, as the dissent should know, this Court is not bound by decisions of the Court of Criminal Appeals. See, e.g., State v. Middlebrooks, 995 S.W.2d 550, 557 n.7 (Tenn. 1999) (citing State v. McKay, 680 S.W.2d 447, 450 (Tenn. 1984)). And none of the intermediate appellate court decisions relied on by the dissent analyzed the constitutional issue, correctly noting that the intermediate appellate court is bound to follow existing precedent. See State v. Douglas, W2020-01012- CCA-R3-CD, 2021 WL 4480904, at 25 (Tenn. Crim. App. Sept. 30, 2021) (stating that although the court had “considered the Defendant’s policy arguments regarding the particular length of Tennessee’s life sentences, as well as the special considerations applicable to juvenile offenders and their potential for rehabilitation,” the court was bound “to apply the law as it has been enacted by [the Tennessee] legislature and interpreted by [the Tennessee] courts”); State v. Fitzpatrick, M2018-02178-CCA-R3-CD, 2021 WL 3876968, at 8 (Tenn. Crim. App. Aug. 31, 2021) (“The power to break with well-established precedent does not lie with this court, and we are not prepared to expand the parameters of the Eighth Amendment in this regard, notwithstanding the fact that the Defendant’s sentence ‘may push, and possibly exceed, the bounds of his life expectancy[.]’” (quoting State v. King, W2019-01796-CCA-R3-CD, 2020 WL 5352154, at 2 (Tenn. Crim. App. Sept. 4, 2020))); State v. Polochak, M2013-02712-CCA-R3-CD, 2015 WL 226566, at 34 (Tenn. Crim. App. Jan. 16, 2015) (“While the next logical step may be to extend protection to [juvenile] sentences [of life with the possibility of parole], that is not the precedent which now exists.” (quoting Perry v. State, W2013-00901-CCA- R3-PC, 2014 WL 1377579, at 5 (Tenn. Crim. App. Apr. 7, 2014))). The remedy here—granting a parole hearing rather than resentencing—serves the State’s interest in finality and the efficient use of its resources and also protects juvenile homicide offenders’ rights under the Eighth Amendment. Applying the previous unrepealed version of section 40-35-501(h)(1) complies with Montgomery, which allows states to remedy a Miller violation by allowing juvenile homicide offenders to receive an individualized parole hearing rather than be resentenced. Montgomery, 577 U.S. at 212 (“Allowing those offenders to be considered for parole ensures that juveniles whose crimes reflected only transient immaturity—and who have since matured—will not be forced to serve a disproportionate sentence in violation of the Eighth Amendment.”). This decision need not be the end of the discussion about sentencing juvenile homicide offenders. The General Assembly, in its collective wisdom, may decide to - 20 - continue to adhere to its previously adopted sentencing scheme as reflected in the unrepealed version of section 40-35-501(h)(1). The General Assembly may also consider enacting legislation for sentencing juvenile homicide offenders that provides for discretionary, individualized sentencing while maintaining the current life sentence, no life sentence, or a less severe sentence that is in line with the other forty-nine states. We trust the General Assembly to make these important policy decisions. IV. Mr. Booker committed a serious offense for which he deserves serious punishment. But he was only sixteen years old when he committed the offense. The United States Supreme Court has made clear that under the Eighth Amendment, youth is a factor that must be considered in sentencing. Thus, we hold that Tennessee’s mandatory sentence of life in prison when imposed on a juvenile homicide offender with no consideration of the juvenile’s age and attendant circumstances violates the Eighth Amendment’s prohibition against cruel and unusual punishment. Consistent with the parties’ arguments, we remedy this constitutional defect by applying the unrepealed pre-1995 version of section 40-35-501(h)(1). Under this statute, Mr. Booker remains sentenced to a sixty-year term but is eligible for, although not guaranteed, supervised release on parole after serving between twenty-five and thirty-six years. In line with Montgomery, Mr. Booker will, at the appropriate time, receive an individualized parole hearing in which his youth and other circumstances will be considered. This ruling applies only to juveniles, not adults, convicted of first-degree murder. We reverse the judgment of the Court of Criminal Appeals to the extent it upheld the automatic life sentence imposed on Mr. Booker under Tennessee Code Annotated section 40-35-501(h)(2). The Clerk of the Appellate Court shall provide a copy of this opinion to the Tennessee Department of Correction and the Tennessee Board of Parole. Costs of this appeal are taxed to the State of Tennessee. _____________________________ SHARON G. LEE, JUSTICE - 21 -	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487775/	Filed 11/18/22 P. v. Varela CA4/2 Opinion following transfer from Supreme Court NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO THE PEOPLE, Plaintiff and Respondent, E075562 v. (Super.Ct.No. CR58553) SALVADOR TIRADO VARELA, OPINION Defendant and Appellant. APPEAL from the Superior Court of Riverside County. John D. Molloy, Judge. Reversed. James M. Kehoe, under appointment by the Court of Appeal, for Defendant and Appellant. Xavier Becerra and Rob Bonta, Attorneys General, Lance E. Winters, Chief Assistant Attorney General, Julie L. Garland and Charles C. Ragland, Senior Assistant Attorney General, and Lynne G. McGinnis, Alan L. Amann, and A. Natasha Cortina, Deputy Attorneys General, for Plaintiff and Respondent. 1 In 1996, a jury instructed on felony murder found petitioner Salvador Tirado Varela guilty of first degree murder, with a kidnapping-murder special circumstance. In 2020, he filed a petition to vacate the murder conviction under Penal Code section 1172.6.1 The trial court denied the petition; it ruled that the kidnapping-murder special circumstance finding conclusively established that he was not eligible for relief. Petitioner contends that this was error. Under People v. Strong (2022) 13 Cal.5th 698 (Strong) — decided while this appeal was pending — he is correct. I DISCUSSION Under section 1172.6, the trial court must vacate a first-degree murder conviction that was based on a felony-murder theory, unless the petitioner either (1) was the actual killer, (2) had the intent to kill and aided and abetted the commission of first-degree murder, or (3) was a major participant in the underlying felony and acted with reckless indifference to human life.2 (§ 1172.6, subd. (d)(3), incorporating § 189, subd. (e).) 1 All further statutory citations are to the Penal Code. The petition was actually filed under former section 1170.95. (Enacted by Stats. 2018, ch. 1015, § 4, amended by Stats. 2021, ch. 551, § 2.) While this appeal was pending, former section 1170.95 was renumbered as section 1172.6, with no change in text. (Stats. 2022, ch. 58, § 10.) We will use section 1172.6, somewhat anachronistically, to refer to whichever one of the two statutes was in effect at the relevant time. 2 Or — we note for completeness, although it is not relevant here — unless the victim was a police officer killed in the course of his or her duties and the defendant knew or should have known that. (§ 189, subd. (f).) 2 A felony-murder special circumstance, however, requires that the defendant either (1) was the actual killer, (2) had the intent to kill and aided and abetted the commission of first-degree murder, or (3) was a major participant in the underlying felony and acted with reckless indifference to human life. (§ 190.2, subds. (a)(17), (b)-(d).) Accordingly, when first confronted with the question, this court held that a true finding on a felony-murder special circumstance conclusively established ineligibility for relief under section 1172.6. (People v. Jones (2020) 270 Cal.Rptr.3d 362, review granted Jan. 27, 2021, S265854, depublished and transferred with directions Sept. 28, 2022.) While this appeal was pending, however, Strong held that People v. Banks (2015) 61 Cal.4th 788 (Banks) and People v. Clark (2016) 63 Cal.4th 522 (Clark) “substantially clarified” the requirements of a felony murder special-circumstance finding. (Strong, supra, 13 Cal.5th at p. 706.) Therefore, a felony murder special-circumstance finding made before Banks and Clark were decided does not conclusively establish ineligibility for relief under section 1172.8. (Strong, supra, at pp. 710-720.) The People concede that, in light of Strong, the trial court erred, and we must reverse the order appealed from. We agree, and we will do so. 3 II DISPOSITION The order appealed from is reversed. NOT TO BE PUBLISHED IN OFFICIAL REPORTS RAMIREZ P. J. We concur: MILLER J. SLOUGH J. 4	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487764/	Case: 21-50795 Document: 00516550269 Page: 1 Date Filed: 11/18/2022 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit FILED November 18, 2022 No. 21-50795 Lyle W. Cayce Clerk United States of America, Plaintiff—Appellee, versus Yobani Barcenas-Rumualdo, Defendant—Appellant. Appeal from the United States District Court for the Western District of Texas USDC No. 3:20-CR-1849 Before Graves, Willett, and Engelhardt, Circuit Judges. Don R. Willett, Circuit Judge: Yobani Barcenas-Rumualdo was indicted for illegally reentering the United States, a violation of 8 U.S.C. § 1326. He unsuccessfully moved to dismiss the indictment on equal protection grounds. After a bench trial on stipulated facts, the district court sentenced him to 30 months’ imprisonment and three years’ supervised release. On appeal, Barcenas-Rumualdo argues that § 1326 violates the Fifth Amendment’s equal protection principles. As for his sentence, he asserts that the district court (1) failed to consider sentencing disparities, (2) Case: 21-50795 Document: 00516550269 Page: 2 Date Filed: 11/18/2022 No. 21-50795 improperly considered the timing of an appeal in sentencing him to three years of supervised release, and (3) failed to consider the Sentencing Guidelines’ policy on supervised release for deportable defendants. The Government concedes that the district court erred in basing the term of supervised release on the timing of an appeal but otherwise defends Barcenas-Rumualdo’s conviction and sentence. We agree that the district court abused its discretion by considering the appeal clock in determining the appropriate term of supervised release. Accordingly, we VACATE that part of Barcenas-Rumualdo’s sentence and REMAND for reconsideration of the supervised-release term. We otherwise AFFIRM Barcenas-Rumualdo’s conviction and sentence. I On July 21, 2020, United States Border Patrol cameras detected several individuals crossing into the United States from Mexico about seven miles west of the Tornillo Port of Entry. Border Patrol agents found Barcenas-Rumualdo and four others, including his cousin, hiding in a nearby field. When questioned, Barcenas-Rumualdo admitted that he was a citizen of Mexico and had no permission to be in the United States. His immigration record confirmed this, showing that he had been removed from the United States twice before. Barcenas-Rumualdo was indicted for unlawful reentry into the United States after a prior removal. He moved to dismiss his indictment, arguing that § 1326 is unconstitutional because (1) Congress enacted its predecessor, the Undesirable Aliens Act of 1929 (UAA), 1 out of animus toward Mexican and Latino immigrants, (2) more recent versions of the statute “d[id] not cleanse 1 As the Government notes, Congress did not enact the 1929 statute under this name, as the title was amended before passage. See 70 Cong. Rec. 4952 (Mar. 1, 1929). 2 Case: 21-50795 Document: 00516550269 Page: 3 Date Filed: 11/18/2022 No. 21-50795 the law of its original taint,” and (3) the statute has a disparate adverse impact on Mexican and Latino individuals. The district court denied the motion. Starting with the standard, the court rejected the Government’s argument that it must apply deferential review since § 1326 pertains to immigration. The district court viewed § 1326’s criminal penalties as differentiating it from immigration statutes involving Congress’s core power over admission and exclusion of aliens—a power that the Supreme Court has held requires limited judicial interference. Citing cases holding that noncitizen criminal defendants have certain constitutional protections, the district court determined that Congress’s authority to adopt criminal immigration penalties was subject to constitutional restraints and the accompanying levels of scrutiny. Applying general equal protection standards and the framework from Village of Arlington Heights v. Metropolitan Housing Development Corp., 2 the district court held that while the UAA violated equal protection principles, § 1326 and its later amendments did not. The court held that Congress enacted subsequent versions of § 1326 through a “deliberative process” without the desire to discriminate, thus removing any prior discriminatory taint. Because § 1326 had been cleansed, the court declined to address whether the statute could survive any level of scrutiny. Barcenas-Rumualdo was convicted at a bench trial on stipulated facts. The presentence report (PSR) calculated the Guidelines range as 30–37 months of imprisonment and one to three years of supervised release. Barcenas-Rumualdo did not object to the PSR, and at sentencing he agreed with the district court’s calculation of the range. But he argued for a downward departure so that his sentence would match that of his cousin who 2 429 U.S. 252, 264–68 (1977). 3 Case: 21-50795 Document: 00516550269 Page: 4 Date Filed: 11/18/2022 No. 21-50795 was arrested with him, had the same reasons for illegally reentering the United States, and had the same prior conviction enhancement for conspiracy to commit aggravated robbery. Barcenas-Rumualdo explained that, even though his cousin had a higher Guidelines range, the sentencing court departed downward because of the age of the identical prior conviction. The district court stated that it was “unimpressed” with Barcenas- Rumualdo’s argument because the court had “no way of putting [itself] in [the] place” of his cousin’s sentencing court or of knowing what that court “saw in that report, or whatever.” After hearing from counsel again on the point, the court mentioned the aggravated robbery conviction and let Barcenas-Rumualdo allocute. The district court sentenced Barcenas-Rumualdo within the Guidelines range to 30 months’ imprisonment and three years’ non- reporting supervised release. In sentencing him to a three-year supervised release term, the district court focused solely on allowing Barcenas- Rumualdo time to appeal his conviction. Barcenas-Rumualdo objected to basing the supervised-release sentence on the appellate timeline and reiterated his argument about sentencing disparity. The court overruled the objection, and Barcenas-Rumualdo timely appealed. 3 II We review de novo constitutional questions and the denial of a motion to dismiss an indictment. 4 By contrast, “[w]e generally review sentences for abuse of discretion.” 5 3 See Fed. R. App. P. 4(b)(1)(A)(i). 4 See United States v. Wright, 777 F.3d 769, 777 (5th Cir. 2015); United States v. Arrieta, 862 F.3d 512, 514 (5th Cir. 2017). 5 United States v. Cancino-Trinidad, 710 F.3d 601, 604 (5th Cir. 2013). 4 Case: 21-50795 Document: 00516550269 Page: 5 Date Filed: 11/18/2022 No. 21-50795 III A Barcenas-Rumualdo challenges his conviction on the ground that the illegal reentry statute, 8 U.S.C. § 1326, is facially unconstitutional under the equal protection principles of the Fifth Amendment. We affirm the district court’s holding that § 1326 does not violate the Fifth Amendment. The Fifth Amendment of the U.S. Constitution provides that “[n]o person shall . . . be deprived of life, liberty, or property, without due process of law.” 6 The Supreme Court has interpreted the Fifth Amendment to “contain[] an equal protection component prohibiting the United States from invidiously discriminating between individuals or groups.” 7 Generally, a statute that discriminates based on race or alienage is unenforceable unless it is “suitably tailored to serve a compelling state interest.” 8 Section 1326 makes it a crime for any alien who “has been denied admission, excluded, deported, or removed or has departed the United States while an order of exclusion, deportation, or removal is outstanding” to “thereafter enter[], attempt[] to enter, or [be] at any time found in, the United States” without appropriate authorization. 9 On its face, § 1326 does not discriminate: All aliens who re-enter the United States without permission after a previous removal are subject to its terms regardless of race or alienage. 6 U.S. Const. amend. V. 7 Washington v. Davis, 426 U.S. 229, 239 (1976). 8 See City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 440 (1985). 9 8 U.S.C. § 1326(a). 5 Case: 21-50795 Document: 00516550269 Page: 6 Date Filed: 11/18/2022 No. 21-50795 Even so, the Supreme Court has held that a facially neutral statute can violate equal protection principles if it has a racially disproportionate impact. 10 To show that such a statute violates equal protection, a challenger must prove that the statute was enacted for a discriminatory purpose or intent and also that it has a disparate impact.11 The burden then shifts to the government to show it would have enacted the law without the discriminatory purpose. Barcenas-Rumualdo builds his argument around this framework. Pointing to the history of the UAA, Barcenas-Rumualdo argues that § 1326 is built on a rotten foundation of racial animus towards Mexican and Latino immigrants that subsequent amendments did not rectify. In Barcenas- Rumualdo’s view, this history plus the statute’s alleged disparate impact on Mexican and Latino individuals means that § 1326 is unconstitutional. Before turning to the merits of Barcenas-Rumualdo’s argument, the Government contends that Arlington Heights is the wrong framework to view this claim. Since § 1326 concerns immigration, the Government argues that we should review Barcenas-Rumualdo’s challenge under a more deferential standard akin to rational-basis review. There is ample support for both positions. On one hand, § 1326 is part of Congress’s immigration scheme. The Supreme Court and this court have recognized that Congress’s broad authority over admission and exclusion warrants limited judicial interference. 12 On the other, § 1326 relates to those 10 See Arlington Heights, 429 U.S. at 265–66. 11 See id.; see also Harness v. Watson, 47 F.4th 296, 304–05 (5th Cir. 2022) (en banc) (per curiam). 12 See Demore v. Kim, 538 U.S. 510, 522 (2003) (“[The Supreme Court] has firmly and repeatedly endorsed the proposition that Congress may make rules as to aliens that would be unacceptable if applied to citizens”); see also Madriz-Alvarado v. Ashcroft, 383 6 Case: 21-50795 Document: 00516550269 Page: 7 Date Filed: 11/18/2022 No. 21-50795 already excluded, so it does not unequivocally fall under Congress’s exercise of power over admission and exclusion. We have held that “the broad power to control immigration does not imbue Congress with plenary power over al- iens themselves.” 13 And the Supreme Court has historically afforded some due process protections to aliens. 14 The district courts that have addressed identical challenges are split on the correct standard of review. But every court but one agrees that § 1326 is constitutional. 15 We need not now resolve which standard of review applies F.3d 321, 332 (5th Cir. 2004) (“In light of Congress’s plenary power to pass legislation concerning the admission or exclusion of aliens, it is clear that no more searching review than that of rational basis is appropriate.”). 13 Rodriguez-Silva v. INS, 242 F.3d 243, 247 (5th Cir. 2001). 14 See, e.g., Wong Wing v. United States, 163 U.S. 228, 237 (1896) (holding that an alien may not be punished criminally without a trial). 15 See, e.g., United States v. Barrera-Vasquez, No. 2:21-CR-98, 2022 WL 3006773, at 3 (E.D. Va. July 28, 2022) (upholding § 1326 under both standards of review); United States v. Ramirez-Aleman, No. 21-CR-3403, 2022 WL 1271139, at 8 (S.D. Cal. Apr. 27, 2022) (same); United States v. Maldonado-Guzman, No. 21-CR-448, 2022 WL 2704036, at 3 (S.D.N.Y. July 12, 2022) (upholding § 1326 under Arlington Heights); United States v. Muñoz-De La O, No. 2:20-CR-134, 2022 WL 508892, at 16 (E.D. Wash. Feb. 18, 2022) (same); United States v. Sanchez-Felix, No. 21-cr-310, 2021 WL 6125407, at 3 (D. Colo. Dec. 28, 2021) (same); United States v. Machic-Xiap, 552 F. Supp. 3d 1055, 1062–63 (D. Or. 2021) (same); United States v. Wence, No. 3:20-CR-27, 2021 WL 2463567, 3 (D. V.I. June 16, 2021) (same); United States v. Zepeda, No. CR 20-0057, 2021 WL 4998418, at 2 (C.D. Cal. Jan. 5, 2021) (same); United States v. Hernandez-Lopez, 583 F. Supp. 3d 815, 819–24 (S.D. Tex. Feb. 2, 2022) (applying Arlington Heights to hold that the statute was not enacted with a discriminatory motive and upholding § 1326 under rational basis); United States v. Rivera-Sereno, No. 2:21-CR-129, 2021 WL 5630728, at 4 (S.D. Ohio Dec. 1, 2021) (upholding § 1326 under rational basis); United States v. Amador-Bonilla, No. CR-21-187, 2021 WL 5349103, at 1 (W.D. Okla. Nov. 16, 2021) (same); United States v. Samuels- Baldayaquez, No. 4:20-CR-83, 2021 WL 5166488, at 2 (N.D. Ohio Nov. 5, 2021) (same); United States v. Novondo-Ceballos, 554 F. Supp. 3d 1114, 1119 (D.N.M. 2021) (same); United States v. Gutierrez-Barba, No. CR-19-01224-1, 2021 WL 2138801, at 2 (D. Ariz. May 25, 2021) (same); United States v. Maurico-Morales, No. CR-21-298-R, 2022 WL 99996, at 1 (W.D. Okla. Jan. 10, 2022) (same); but see United States v. Carrillo-Lopez, 555 F. Supp. 3d 7 Case: 21-50795 Document: 00516550269 Page: 8 Date Filed: 11/18/2022 No. 21-50795 because Barcenas-Rumualdo’s equal-protection challenge fails under either standard. 1 A statute satisfies rational basis review if “there is a rational relationship between the disparity of treatment and some legitimate governmental purpose.” 16 “We have stated that to uphold a [government’s] classification, a court need find only ‘a conceivable rational basis for the official action.’” 17 Barcenas-Rumualdo makes no showing that § 1326 is not supported by a rational basis. Instead, he focuses on the application of Arlington Heights. He thus fails to meet his burden to show that § 1326 does not satisfy rational-basis review. 2 Turning to the more searching standard, Arlington Heights requires a challenger “to prove by an evidentiary preponderance that racial discrimination was a substantial or motivating factor in enacting the challenged provision.” 18 Arlington Heights lists five factors for courts to consider when determining if a statute was passed with a discriminatory purpose: “(1) the historical background of the decision, (2) the specific sequence of events leading up to the decision, (3) departures from the normal procedural sequence, (4) substantive departures, and (5) legislative history, 996, 1027 (D. Nev. 2021) (holding § 1326 unconstitutional under Arlington Heights). A recent District of Nevada decision rejected the reasoning in Carillo-Lopez. See United States v. Salas-Silva, No. 3:20-CR-54, 2022 WL 2119098, at 1 (D. Nev. June 13, 2022). 16 Heller v. Doe, 509 U.S. 312, 320 (1993). 17 Hines v. Quillivan, 982 F.3d 266, 273 (5th Cir. 2020) (quoting Reid v. Rolling Fork Pub. Util. Dist., 854 F.2d 751, 754 (5th Cir. 1988)). 18 Harness, 47 F.4th at 304. 8 Case: 21-50795 Document: 00516550269 Page: 9 Date Filed: 11/18/2022 No. 21-50795 especially where there are contemporary statements by members of the decision-making body.” 19 Barcenas-Rumualdo relies heavily on the political climate and debate surrounding the passage of the UAA. He paints a vivid picture of the UAA’s troubling history, but the UAA is not our point of reference. Newly binding circuit precedent requires us to “look to the most recent enactment of the challenged provision,” in determining its constitutionality. 20 Section 1326 was enacted in 1952 as part of the Immigration and Nationality Act (INA). 21 So we look to the history of that enactment in determining whether Barcenas- Rumualdo has met his burden. Much of the evidence Barcenas-Rumualdo cites in support of his position relates to the history of the UAA. But our Harness decision abrogates the relevance of that evidence. 22 Narrowing Barcenas-Rumualdo’s evidence to that relating to § 1326, this evidence includes the history surrounding the INA and the INA’s disproportionate impact on Mexican and Latino immigrants. Relying on Carrillo, the lone decision holding that § 1326 is unconstitutional, Barcenas-Rumualdo specifically focuses on (1) the lack of robust debate about the UAA, (2) President Truman’s veto of the INA, (3) 19 Overton v. City of Austin, 871 F.2d 529, 540 (5th Cir. 1989) (citing Arlington Heights, 429 U.S. at 267–68). 20 See Harness, 47 F.4th at 306. 21 See INA, Pub. L. No. 82-414, § 276, 66 Stat. 163, 229 (1952). 22 Barcenas-Rumualdo points to the Supreme Court’s decisions in Ramos v. Louisiana, 140 S. Ct. 1390 (2020), and Espinoza v. Montana Department of Revenue, 140 S. Ct. 2246 (2020), to establish that it is important to look at the discriminatory history of a statute and that “later reenactments do not cleanse the law of its original taint.” Neither case supports this proposition. See Ramos, 140 S. Ct. at 1394, 1401 n.44 (holding a nonunanimous jury rule violated the Sixth Amendment regardless of the rule’s history); Espinoza, 140 S. Ct. at 2262 (holding a school voucher program violated the First Amendment solely based on the program itself). 9 Case: 21-50795 Document: 00516550269 Page: 10 Date Filed: 11/18/2022 No. 21-50795 Deputy Attorney General Ford’s letter, and (4) the proposal of the derogatorily coined “Wetback Bill.” This evidence is insufficient to establish that Congress enacted § 1326 with racial animus. First, we presume the legislature acted in good faith. 23 So, we do not take Congress’s silence about the history of the UAA as evidence that it adopted any prior discriminatory intent. 24 Moreover, Congress has amended § 1326 multiple times since its enactment. “[B]y amendment, a facially neutral provision . . . might overcome its odious origin.” 25 Barcenas- Rumualdo makes no showing that those amendments were adopted with racial animus. The further removed that § 1326 becomes from the UAA by amendment, the less it retains its odor. Second, even assuming that President Truman’s veto of the INA and adjoining statement say something about § 1326 specifically and not just the INA generally, 26 it carries scant interpretive weight. President Truman’s opinion on the INA is not probative of what Congress believed. 27 And as other circuits have recognized, “opponents of a bill are to be accorded little weight because ‘[i]n their zeal to defeat a bill, [opponents] understandably 23 See Harness, 47 F.4th at 306. 24 See also Abbott v. Perez, 138 S. Ct. 2305, 2324 (2018) (“The allocation of the burden of proof and the presumption of legislative good faith are not changed by a finding of past discrimination.”). 25 Cotton v. Fordice, 157 F.3d 388, 391 (5th Cir. 1998). 26 As other courts have noted, President Truman’s statement pertained to the INA’s usage of quotas, not § 1326 specifically. Machic-Xiap, 552 F. Supp. 3d at 1075; see also Hernandez-Lopez, 2022 WL 313774, at 4. 27 See Salas-Silva, 2022 WL 2119098, at 3; Maldonado-Guzman, 2022 WL 2704036, at 4; cf. Fusilier v. Landry, 963 F.3d 447, 466 (5th Cir. 2020) (error to impute local officials’ views to the legislature). 10 Case: 21-50795 Document: 00516550269 Page: 11 Date Filed: 11/18/2022 No. 21-50795 tend to overstate its reach.’” 28 Attorney General Ford’s letter carries little weight for the same reasons. Finally, the proposal of a crudely nicknamed bill does not carry Barcenas-Rumualdo’s burden of proving that Congress enacted § 1326 with racial malice. The fact that individual lawmakers dubbed a bill something derogatory, without more, says nothing of the motivations of Congress “as a whole” regarding the INA or § 1326 specifically. 29 In reply, Barcenas-Rumualdo points to the history of immigration law after the passage of the INA, which he says shows a continuing drive of racial animus. Even crediting this history, it says nothing about the Congress’s collective intent in amending § 1326. Rather, much of it relates to other enactments. This history fails to provide any “specific sequence of events” showing discriminatory intent in the passage of § 1326’s subsequent amendments. 30 Because Barcenas-Rumualdo fails to meet his burden of proving § 1326 was enacted with a racially discriminatory motive, any disparate impact of the law is insufficient to carry the day. “This conclusion ends the constitutional inquiry.” 31 We thus AFFIRM the district court’s denial of Barcenas-Rumualdo’s motion to dismiss. 28 Fieger v. U.S. Att’y Gen., 542 F.3d 1111, 1119 (6th Cir. 2008) (quoting NLRB v. Fruit & Vegetable Packers & Warehousemen, 377 U.S. 58, 66 (1964)). 29 See Brnovich v. Democratic Nat’l Comm., 141 S. Ct. 2321, 2350 (2021). 30 Arlington Heights, 429 U.S. at 267. 31 Id. at 271; see also Washington, 426 U.S. at 242 (“[W]e have not held that a law, neutral on its face and serving ends otherwise within the power of government to pursue, is invalid under the Equal Protection Clause simply because it may affect a greater proportion of one race than of another.”). 11 Case: 21-50795 Document: 00516550269 Page: 12 Date Filed: 11/18/2022 No. 21-50795 B We now turn from Barcenas-Rumualdo’s conviction to his sentence, which he maintains is procedurally and substantively flawed. Specifically, he argues the district court erred in (1) failing to account for sentencing disparities, (2) relying on the appellate timeline in determining the appropriate term of supervised release, and (3) failing to consider guidance disfavoring supervised release for deportable defendants. The Government rightly concedes the second error. Because we remand on that point, we do not address the last point of error. Section 3553(a) directs courts to consider certain factors in crafting a sentence, including “unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct.” 32 “At sentencing, the district court must ‘state in open court the reasons for its imposition of the particular sentence.’” 33 We review sentences for abuse of discretion. 34 We first “ensure that the district court committed no significant procedural error such as . . . failing to consider the § 3553(a) factors . . . or failing to adequately explain the chosen sentence.” 35 “If the sentencing decision is ‘procedurally 32 United States v. Gomez-Herrera, 523 F.3d 554, 563 (2008) (quoting 18 U.S.C. § 3553(a)(6)); see also Gall v. United States, 552 U.S. 38, 51 (2007). 33 United States v. Gozes-Wagner, 977 F.3d 323, 341 (5th Cir. 2020) (quoting 18 U.S.C. § 3553(c)). 34 Cancino-Trinidad, 710 F.3d at 604. 35 Gall, 552 U.S. at 51. 12 Case: 21-50795 Document: 00516550269 Page: 13 Date Filed: 11/18/2022 No. 21-50795 sound,’ we ‘then consider the substantive reasonableness of the sentence.’” 36 We assess sentences of supervised release similarly. 37 1 Barcenas-Rumualdo first argues that the district court failed to consider that a sentence within the Guidelines range would create an unwarranted sentencing disparity with the sentence of his cousin who was arrested with him and had the same prior conviction. However, the district court heard this argument and rejected it. At sentencing, the district court stated that it “was not impressed” with Barcenas-Rumualdo’s sentencing disparity argument because, the court explained, it had “no way of putting [itself] in [the other court’s] place” and understanding what the other court saw in the cousin’s PSR or other evidence which compelled that court to vary downward. This explanation may not be robust, but it addresses Barcenas-Rumualdo’s argument and shows the court considered it. That is all that is required. 38 2 Barcenas-Rumualdo next argues that the district court procedurally erred in considering the appeal clock in sentencing him to three years of supervised release. We agree. Section 3583 directs courts to consider certain factors outlined in § 3553 in deciding the proper term of supervised release. 39 36 Cancino-Trinidad, 710 F.3d at 605 (quoting Gall, 552 U.S. at 51). 37 See id. at 607; United States v. Acosta-Navarro, 781 F. App’x 318, 323 (5th Cir. 2019) (per curiam). 38 See United States v. Mares, 402 F.3d 511, 519 (5th Cir.2005) (“When the judge exercises her discretion to impose a sentence within the Guideline range and states for the record that she is doing so, little explanation is required.”). 39 18 U.S.C. § 3583. 13 Case: 21-50795 Document: 00516550269 Page: 14 Date Filed: 11/18/2022 No. 21-50795 The district court imposed three years of supervised release solely out of fear that a lower sentence would moot an appeal. The timing of an appeal is not a factor that courts are tasked with considering in imposing supervised release. Such a consideration is also irrelevant because Barcenas-Rumualdo could appeal his conviction even after his sentence ends. 40 The district court abused its discretion by basing the term of supervised release on the irrelevant timing for an appeal. 41 Because we remand for the district court to reconsider supervised release, we do not address Barcenas-Rumualdo’s last point of error. IV We REMAND for the district court to reconsider its sentence of supervised release. We otherwise AFFIRM Barcenas-Rumualdo’s conviction and sentence. 40 See United States v. Villanueva-Diaz, 634 F.3d 844, 848–49 (5th Cir. 2011) (holding that an appeal of a conviction is not mooted by the end of supervised release). 41 See United States v. Jenkins, 712 F.3d 209, 214 (5th Cir. 2013) (noting that a within-Guidelines sentence can nevertheless be substantively unreasonable if the district court considers an irrelevant factor); United States v. Villegas-Perez, 536 F. App’x 390, 390 (5th Cir. 2013) (per curiam) (applying Jenkins to procedural reasonableness). 14 Case: 21-50795 Document: 00516550269 Page: 15 Date Filed: 11/18/2022 No. 21-50795 James E. Graves, Jr., Circuit Judge, dissenting in part: I agree with the majority that the district court abused its discretion by considering the appeal clock in determining the appropriate term of supervised release. However, consistent with my dissenting opinion in Harness v. Watson, 47 F.4th 296, 317 (5th Cir. 2022), I disagree with the majority’s conclusion that 8 U.S.C. § 1326 does not violate the principles of equal protection. Thus, I respectfully dissent in part. 15	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487777/	Filed 11/18/22 P. v. Rocha 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 (Shasta) ---- THE PEOPLE, Plaintiff and Respondent, C096172 v. (Super. Ct. No. 21F6772) JOSHUA MICHAEL ROCHA, Defendant and Appellant. Defendant Joshua Michael Rocha entered into a plea agreement in which he pleaded no contest to felony false imprisonment and misdemeanor resisting a peace officer and admitted a prior strike conviction in exchange for probation including a residential treatment program, and a six-year “lid” if he did not complete the treatment program. After defendant failed to complete the treatment program, the trial court 1 imposed an upper term of three years for the false imprisonment conviction, doubled to six years for the strike. Defendant now contends he is entitled to the application of Senate Bill No. 567 (2021-2022 Reg. Sess.) because the lid in the plea agreement did not prevent the trial court from exercising its discretion to impose a lower term. We agree. We will reverse the sentence and remand for a full resentencing. The parties assert that if the trial court imposes less than a six-year term on remand, the People will be entitled to withdraw from the plea agreement consistent with People v. Stamps (2020) 9 Cal.5th 685 (Stamps). We disagree with the parties on this issue. Because the plea agreement involved a lid and not a stipulated term, the application of Senate Bill No. 567 on remand, without more, would not entitle the People to withdraw from the plea agreement. BACKGROUND Defendant pleaded no contest to one count of felony false imprisonment (Pen. Code, § 236)1 and two counts of resisting, delaying, and obstructing a peace officer (§ 148, subd. (a)(1)). He also admitted a prior strike conviction. The plea agreement indicated a six-year lid if defendant failed to complete probation and a residential treatment program. Defendant agreed to the terms of the plea agreement with a Cruz2 waiver. Within two months, defense counsel notified the trial court that defendant was no longer in the treatment program. Defendant subsequently appeared before the trial court and admitted he did not complete the treatment program. 1 Undesignated statutory references are to the Penal Code. 2 People v. Cruz (1988) 44 Cal.3d 1247, 1254, fn. 5. 2 Defendant argued a middle term sentence was appropriate because the People failed to prove any aggravating factors. The People countered that the agreement was for a six-year lid and a six-year term was proper. The trial court reviewed the transcript from the prior proceeding and concluded the parties had agreed to a six-year term. Accordingly, it imposed an upper term of three years on the false imprisonment count (§ 236), doubled to six years for the prior strike conviction. The trial court did not discuss factors in mitigation or aggravation. DISCUSSION I Defendant contends that because the plea agreement indicated a lid and not a stipulated term, the trial court was not prevented from exercising its sentencing discretion, and he is entitled to retroactive application of Senate Bill No. 567. In opposition, the People claim the parties agreed to a stipulated term. Senate Bill No. 567, effective January 1, 2022, changed the requirements for using aggravating circumstances and altered sentencing discretion under section 1170. (Stats. 2021, ch. 731.) Among other things, Senate Bill No. 567 amended section 1170 to prohibit upper-term sentencing unless factors in aggravation are stipulated to by the defendant, proven to a fact finder beyond a reasonable doubt, or established by a certified record of conviction. (§ 1170, subd. (b)(2), (3).) The parties agree, as do we, that amended section 1170, subdivision (b) applies retroactively to defendant. (People v. Zabelle (2022) 80 Cal.App.5th 1098, 1109.) A lid in a plea agreement places a maximum limit on the sentence a trial court may impose. (People v. Cuevas (2008) 44 Cal.4th 374, 376.) If the trial court accepts the agreement, it may exercise its sentencing discretion up to and including the lid. (People v. Buttram (2003) 30 Cal.4th 773, 789.) Whereas with a stipulated term, a trial court has no discretion to deviate from the term if it accepts the plea agreement. (People v. Brooks (2020) 58 Cal.App.5th 1099, 1109.) 3 Here, the trial court accepted a plea agreement indicating a six-year lid. At sentencing, the parties each reiterated that the agreement involved a lid, and argued their respective positions for the exercise of the trial court’s sentencing discretion within that lid. Although the trial court concluded the agreement involved a stipulated term and the trial court did not discuss aggravating or mitigating factors, the record confirms that the agreement was for a lid and that the trial court had sentencing discretion up to and including the lid. Because the trial court had discretion at sentencing, defendant is entitled to the application of amended section 1170. We will reverse and remand for resentencing. II The parties agree that if, on remand, the trial court sentences defendant to a term of less than six years, the People will be entitled to withdraw from the plea agreement. We disagree. In Stamps, the California Supreme Court considered whether the defendant was entitled to application of a retroactive sentencing law following a plea agreement to a stipulated term. (Stamps, supra, 9 Cal.5th at p. 692.) In deciding defendant should receive the ameliorative benefit of changes in the law, the Court acknowledged it was possible that the trial court would exercise its discretion to impose a sentence less than the stipulated term. (Id. at p. 707.) But because the trial court had no authority to unilaterally modify the stipulated term, the Court held the People should be entitled to withdraw from the plea agreement. (Ibid.) Such circumstances are not present here. Because the parties agreed to a lid and not a stipulated term, the trial court would not be unilaterally modifying the plea agreement in exercising its discretion on remand to impose a sentence within the agreed maximum. The application of Senate Bill No. 567 on remand, without more, would not entitle the People to withdraw from the plea agreement. 4 DISPOSITION The sentence is reversed and the judgment is otherwise affirmed. The matter is remanded to the trial court for a full resentencing. (People v. Buycks (2018) 5 Cal.5th 857.) /S/ MAURO, Acting P. J. We concur: /S/ RENNER, J. /S/ KRAUSE, J. 5	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487773/	Filed 11/18/22 Vidal v. Jang CA2/2 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 SECOND APPELLATE DISTRICT DIVISION TWO JACQUELINE VIDAL, B316210 Plaintiff and Appellant, (Los Angeles County Super. Ct. No. TC029153) v. ADRIAN JANG, Defendant and Respondent. APPEAL from the judgment of the Superior Court of Los Angeles County, Thomas D. Long, Judge. Affirmed. Jacqueline Vidal, in pro. per., for Plaintiff and Appellant. No appearance for Defendant and Respondent. 1 ****** A former employee sued her former employer 11 years after the last evidence of her employ there. The trial court granted summary judgment on the ground that her claim was time- barred. This was correct, so we affirm. FACTS AND PROCEDURAL BACKGROUND1 I. Facts In 2007, Jacqueline Vidal (plaintiff) started working as a secretary for Adrian Jang (Jang)2 and Michael H. Lee (Lee), who jointly owned a company called People’s Financial, Inc. Plaintiff provided ledger sheets showing her employment between May 14, 2007, and September 14, 2007. II. Procedural Background On May 15, 2018, plaintiff sued Jang, Lee and People’s Financial, Inc. (collectively, defendants) for the intentional tort of “refus[ing] to pay” her wages. She sought $96,000. On June 3, 2021, Jang filed a motion for summary judgment on the ground that plaintiff’s lawsuit was time-barred because it was filed nearly 11 years after she left his employ. In opposing the motion, the sole evidence plaintiff tendered were declarations from herself and her husband, in which they both indicated that Jang would call “every three or six months” with 1 Plaintiff, who is proceeding pro se, did not provide any pertinent documents from the trial court that would enable us to evaluate the merits of her appeal. Rather than declare her appeal to be waived, we ordered the pertinent documents from the trial court and now take judicial notice of them so that we may consider plaintiff’s appeal on the merits. (Evid. Code, §§ 459, 452.) 2 Jang was originally and erroneously sued as “Adrian Jung.” 2 “promises of paying [plaintiff] for [her] services,” and that those calls ended “two years” after she left his employ. After Jang filed a reply brief, the trial court granted summary judgment on the grounds that Jang’s complaint was filed long after the applicable statutes of limitation and that she could not avail herself of equitable tolling. Plaintiff filed this timely appeal. DISCUSSION Plaintiff argues that the trial court erred in granting Jang’s motion for summary judgment. “A party in a civil case is entitled to summary judgment if, among other things, he can show that the undisputed facts ‘establish[] an affirmative defense’ ‘as a matter of law.’ ([Code Civ. Proc.] § 437c, subds. (o)(2) & (c).) Thus, summary judgment is appropriate where the undisputed facts establish that a claim is barred by the statute of limitations. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112; Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487.)” (Arrow Highway Steel, Inc. v. Dubin (2020) 56 Cal.App.5th 876, 883.)3 We may only look at the admissible evidence submitted in support of, and in opposition to, summary judgment (§ 437c, subd. (d); Forest Lawn Memorial-Park Assn. v. Superior Court (2021) 70 Cal.App.5th 1, 8); the parties’ unsworn arguments in their motion and opposing papers are not evidence (e.g., Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 656, disapproved on other grounds in Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68, fn. 5). The undisputed facts establish that plaintiff’s claim is barred by the statute of limitations. Although plaintiff alleges in 3 All further statutory references are to the Code of Civil Procedure unless otherwise indicated. 3 her pleadings that she worked for Jang until 2009, the evidence she submitted only suggests employment without payment through September 14, 2007—plaintiff includes photocopies of two checks made out to her in 2007 onto which someone has scrawled the word “bounced,” but there is no declaration indicating that those checks did, in fact, “bounce.” She also attached checks written to her in 2008, but the 2008 checks are not issued by any defendant and she does not explain how those checks are connected to any defendant. It is not entirely clear, given there is no written employment contract in evidence, whether the statute of limitations for plaintiff’s claim is three years—the limitations period for a claim of intentional nonpayment of wages under the Labor Code (§ 338, subd. (a)), or two years—the limitations period for breach of an oral contract (§ 339). Because the limitations period for Labor Code violations or for breach of an oral contract to pay wages starts to tick upon nonpayment up to and including the last date of nonpayment (Cuadra v. Millan (1998) 17 Cal.4th 855, 859, disapproved on other grounds in Samuels v. Mix (1999) 22 Cal.4th 1, 16, fn. 4; Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 974), plaintiff had until at the latest September 14, 2010—three years after September 14, 2007—to file suit. Her claim filed in May of 2018 is late. Plaintiff argues that her claim is timely if we apply the doctrine of equitable tolling. Equitable tolling is a judicially created doctrine that extends or suspends a statute of limitations “‘“as necessary to ensure fundamental practicality and fairness.”’” (Saint Francis Memorial Hospital v. State Dept. of Public Health (2020) 9 Cal.5th 710, 719 (Saint Francis), quoting McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 99 4 (McDonald).) The application of equitable tolling requires a showing of three elements: (1) timely notice to the defendant; (2) lack of prejudice to the defendant; and (3) “reasonable and good faith conduct on the part of the plaintiff.” (McDonald, at p. 102.) Plaintiff offers what boils down to two reasons why equitable tolling renders her claim timely. First, she argues that Jang’s postemployment calls to her promising payment lulled her into a sense of inaction, such that it is inequitable to expect her to sue him while he is promising her that suit might not be necessary. Even if we assume for purposes of argument that promises by a person who has lied to a plaintiff in the past gives that person reason to delay suit (and hence qualifies for equitable tolling), Jang’s calls here lasted for only two years, and then stopped. Because the basis for tolling would stop with his false promises, these calls would extend the time to file at most to 2012—2007 plus two years plus the three- year limitations period. Plaintiff’s 2018 lawsuit is still too late. Second, plaintiff argues that Jang engaged in efforts to “avoid” Vidal by “engag[ing] in criminal activity” (such as using a last name with a one-letter difference from the name she knew him by) to prevent “disclos[ure] of his whereabouts,” including by living outside of the country between 2009 and the time of her lawsuit. But the sole evidence plaintiff offered in support of her claim was her declaration that she was “[un]able to contact [Jang]” until around the time she filed her complaint. And Jang offered uncontradicted evidence that he was in the United States between 2009 and 2020 except for brief vacations. These undisputed facts do not satisfy the requirements of equitable tolling. As noted above, a plaintiff invoking the doctrine must engage in “reasonable and good faith conduct,” which includes an 5 analysis of “whether that party’s actions were fair, proper, and sensible in light of the circumstances.” (Saint Francis, supra, 9 Cal.5th at pp. 728-729.) It is undisputed, however, that Jang was in California the whole time and that plaintiff was able to find him in 2018. Given that California law permits tolling at most when a person is out of the state (e.g., § 351), and that limitations periods exist to give plaintiffs time to find persons within the State, applying equitable tolling on the showing made here would cause this “narrow” exception intended for “‘unusual circumstances’” to swallow the general rule that limitations periods are controlling. (Saint Francis, at p. 730, quoting Wallace v. Kato (2007) 549 U.S. 384, 396). DISPOSITION The judgment is affirmed. Jang is entitled to his costs on appeal. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS. ______________________, J. HOFFSTADT We concur: _________________________, P. J. LUI _________________________, J. CHAVEZ 6	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487776/	Filed 11/18/22 P. v. Solano CA2/2 Opinion following transfer from Supreme Court 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 SECOND APPELLATE DISTRICT DIVISION TWO THE PEOPLE, B303993 Plaintiff and Respondent, (Los Angeles County Super. Ct. No. KA042134) v. OPINION ON REMAND GABRIELA MARTHA SOLANO, Defendant and Appellant. APPEAL from an order of the Superior Court of Los Angeles County, Bruce F. Marrs, Judge. Reversed and remanded. Verna Wefald, under appointment by the Court of Appeal, for Defendant and Appellant. Xavier Becerra and Rob Bonta, Attorneys General, Lance E. Winters, Chief Assistant Attorney General, Susan Sullivan Pithey, Assistant Attorney General, Idan Ivri, Michael C. Keller, and Wyatt E. Bloomfield, Deputy Attorneys General, for Plaintiff and Respondent. ****** Gabriela Martha Solano (defendant) appeals the trial court’s denial of her petition for relief under Penal Code1 section 1172.6 (former section 1170.95).2 We previously affirmed the court’s order in an unpublished opinion, People v. Solano (June 10, 2021, B303993), concluding the record established that defendant was ineligible for resentencing as a matter of law based on the true finding on the special circumstance allegation by the jury at trial. Upon review, the California Supreme Court transferred this case back to us to reconsider in light of People v. Strong (2022) 13 Cal.5th 698 (Strong). We now reverse the court’s order and remand the matter for the court to conduct an evidentiary hearing under section 1172.6. 1 All further statutory references are to the Penal Code unless otherwise indicated. 2 Effective June 30, 2022, section 1170.95 was renumbered section 1172.6, with no change in text (Stats. 2022, ch. 58, § 10). For the sake of simplicity, we will refer to the section by its new numbering only. 2 FACTS AND PROCEDURAL BACKGROUND I. Facts3 A. The underlying crimes On a Tuesday night in late September 1998, defendant and four others—her boyfriend (Armando Perez), her roommate (Brenda Moreno), and two of her boyfriend’s friends (Dennis Barroso and Brian Scott)—drove around the San Gabriel Valley committing a rash of violent crimes. Defendant was the driver, and was behind the wheel of her own SUV. Before starting the crime spree, defendant drove the others to a store to buy knitted black gloves and then made two further stops so that the others could pick up several shotguns and handguns. The group started with a carjacking in Diamond Bar. Around 10:15 p.m., defendant followed a woman in an Infiniti until defendant’s boyfriend and his two friends hopped out and, with shotguns and handguns on display, forced the Infiniti driver out of her car. They demanded her purse, her watch and her necklace, and drove off in her car. Then the group attempted a second carjacking in Rosemead. Once again, defendant followed the intended victim into his driveway. When defendant’s boyfriend and his friend Barroso jumped out of her SUV and pointed their shotguns at the driver of the other car, he honked his horn and put his car in reverse. Although defendant repositioned her SUV to block his 3 We draw these facts from our prior, unpublished appellate opinion affirming defendant’s convictions. (People v. Barroso (Apr. 24, 2001, B135322).) 3 escape, he managed to drive away—but not before Barroso shot at the car (and missed). The group capped off their spree with robbery and murder. Around 2:00 a.m., defendant drove up next to several pedestrians returning from a convenience store—namely, Gilbert Rivas (Rivas), Rivas’s fiancée, Rivas’s teenage brother and the fiancée’s teenage son. Defendant’s boyfriend and Barroso leaned out of the open windows of defendant’s SUV with their shotguns on display and issued a gang challenge. The pedestrians said that they “don’t bang,” and defendant’s boyfriend proclaimed his allegiance to the “Valinda Flats” gang. Defendant’s boyfriend, both of his friends, and defendant’s roommate then jumped out of the car with firearms at the ready. Rivas’s brother handed over cash, some cigarettes and his new black Nikes. Defendant’s roommate asked the fiancée to hand over her rings. When the fiancée balked, explaining that the rings had little monetary value but great sentimental value, defendant’s roommate punched the fiancée in the face. Rivas told the roommate that she did not need to hurt his fiancée nor disrespect them. That is when Barroso shot Rivas in the stomach, and defendant’s boyfriend shot him twice more in the back and head. Rivas died from the gunshot wounds. B. Prosecution, conviction and appeal In the operative amended information, the People charged defendant with (1) the murder of Rivas (§ 187, subd. (a)), (2) the second degree robbery of Rivas’s brother (§ 211), (3-5) the attempted robberies of Rivas, Rivas’s fiancée, and the fiancée’s son (§§ 211, 664), (6) the carjacking of the Infiniti driver (§ 215, subd. (a)), and (7) the second degree robbery of the Infiniti driver 4 (§ 211). As to the murder, the People alleged the special circumstance that the “murder . . . was committed . . . while the . . . defendant[s] . . . were engaged in the commission of . . . robbery and attempted robbery” pursuant to section 190.2, subd. (a)(17). As to the counts involving Rivas and his group, the People further alleged that a principal used and discharged a firearm resulting in great bodily injury or death (§§ 12022.5, subd. (a), 12022.53, subds. (d) & (e)(1)), and that the crimes were “committed for the benefit of, at the direction of, and in association with a criminal street gang” (§ 186.22, subd. (b)(1)). The matter proceeded to a jury trial. The jury was instructed that they could convict defendant of Rivas’s murder as a direct aider and abettor or on a felony-murder theory. With respect to the special circumstance allegation, the jury was instructed that the allegation could be found true only if the jury found, beyond a reasonable doubt, that (1) defendant was the “actual killer,” (2) defendant “aided, abetted, or assisted . . . in the commission of the murder in the first degree” “with the intent to kill,” or (3) defendant “aided, abetted, or assisted” the “commission or attempted commission of the crime of robbery” “as a major participant” and “with reckless indifference to human life.” In closing arguments, the prosecutor argued that defendant was liable for murder under the felony-murder theory, and that the special circumstance was true because she was a major participant in the robberies and attempted robberies who acted with reckless indifference to human life. The jury found defendant guilty of all charges and found true the special circumstance, the firearm allegations, and the gang allegation. 5 The trial court imposed a prison sentence of life without the possibility of parole (LWOP) plus 42 years and 4 months. Specifically, the court imposed a sentence of LWOP for the special circumstance murder plus a consecutive 25 years to life for the firearm allegation. The court then imposed a consecutive sentence of four years and four months for the robbery of Rivas’s brother; two consecutive sentences of four years for two of the attempted robbery counts; and a consecutive sentence of five years for the carjacking. The court either stayed the remaining sentences or ran them concurrently. Defendant appealed, and we affirmed her convictions and sentence. In response to her argument that the trial court erred in admitting the evidence of the uncharged attempted carjacking and use of firearms in Rosemead, we reasoned that this evidence was relevant to establish that defendant and the others “harbored the intent to kill[] or acted with reckless indifference to human life” and to disprove defendant’s proffered defense that she did not know the others intended or rob or kill and did not see them bring guns into her car. In 2018, the Governor commuted defendant’s sentence to 20 years to life. II. Procedural Background On March 13, 2019, defendant filed a petition seeking resentencing under section 1172.6 for her murder conviction. The court issued an order summarily denying relief on the ground that section 1172.6 was unconstitutional because it impermissibly amended Proposition 7 and Proposition 115 as well as violated Marsy’s Law and the separation of powers. 6 As noted above, we affirmed, but our Supreme Court vacated our prior opinion and has remanded the matter for us to reconsider in light of Strong. DISCUSSION Defendant argues that the trial court erred in denying her section 1172.6 petition on the ground that the jury’s prior special circumstance finding rendered her ineligible for relief under section 1172.6. Because this argument turns on questions of statutory construction and the application of law to undisputed facts, our review is de novo. (People v. Blackburn (2015) 61 Cal.4th 1113, 1123; Martinez v. Brownco Construction Co. (2013) 56 Cal.4th 1014, 1018.) Section 1172.6 authorizes a defendant “convicted of felony murder or murder under the natural and probable consequences doctrine” to vacate her murder conviction if, as a threshold matter, she makes a “prima facie showing” of entitlement to relief. (§ 1172.6, subds. (a) & (c).) This, in turn, requires a showing that, among other things, she “could not presently be convicted of murder” under the amendments to the murder statutes that became effective on January 1, 2019. (Id., subd. (a)(3).) These statutes, even as amended, still authorize a murder conviction based on murder committed by someone else in the course of a jointly committed felony as long as the defendant “was a major participant in the underlying felony and acted with reckless indifference to human life.” (§ 189, subd. (e)(3).) 7 In Strong, supra, 13 Cal.5th 698, our Supreme Court confronted the same basic facts present in this case. There, as here, the defendant’s jury found true the special circumstance that he was a “major participant” who acted with “reckless indifference” to human life. There, as here, the jury’s finding was made prior to the issuance of People v. Banks (2015) 61 Cal.4th 788 (Banks) and People v. Clark (2016) 63 Cal.4th 522 (Clark). There, as here, the defendant was seeking relief under section 1172.6 and the trial court had summarily denied him that relief on the ground that jury’s pre-Banks and pre-Clark finding was binding. Strong held that this was wrong. Strong reasoned that Banks and Clark “substantially clarified”—and narrowed— the meaning of the terms “major participant” and “reckless indifference.” (Strong, at p. 721.) As a result, Strong concluded, “[f]indings issued by a jury before Banks and Clark” are not preclusive and, more to the point “do not preclude a defendant from making out a prima facie case for relief.” (Id. at pp. 710, 716-717.) Strong went on to hold that it was inappropriate for any court—trial or appellate—to evaluate whether substantial evidence supports the jury’s pre-Banks and pre-Clark finding if the evidence is viewed through the narrowed Banks and Clark prisms. (Id. at pp. 719-720.) In sum, Strong held that a pre- Banks and pre-Clark special circumstance finding does not warrant summary denial of a section 1172.6 petition; instead, the matter must proceed to an evidentiary hearing. (Id. at p. 720.) Strong disposes of this appeal. Defendant’s special circumstance finding was made prior to Banks and Clark, and thus cannot provide the basis for the summary denial of her petition. She is entitled to an evidentiary hearing. Because we have concluded that she has not received such a hearing, 8 we remand for one. DISPOSITION The court’s order denying defendant’s petition for resentencing is reversed, and the matter is remanded for the court to conduct an evidentiary hearing pursuant to section 1172.6. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS. ______________________, J. HOFFSTADT We concur: _________________________, Acting P. J. ASHMANN-GERST _________________________, J. CHAVEZ 9	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487778/	Filed 11/18/22 P. v. Christon CA2/2 Opinion following transfer from Supreme Court 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 SECOND APPELLATE DISTRICT DIVISION TWO THE PEOPLE, B301998 (Consolidated with B306635) Plaintiff and Respondent, (Los Angeles County v. Super. Ct. No. BA310312) MAKEITHA KEITH OPINION ON REMAND CHRISTON, Defendant and Appellant. APPEAL from an order of the Superior Court of Los Angeles County, Lisa B. Lench, Judge, and petition for writ of habeas corpus. Reversed and remanded. Nancy L. Tetreault, under appointment by the Court of Appeal, for Defendant and Appellant. Xavier Becerra and Rob Bonta, Attorneys General, Lance E. Winters, Chief Assistant Attorney General, Susan Sullivan Pithey, Assistant Attorney General, Idan Ivri, Allison H. Chung, and Charles S. Lee, Deputy Attorneys General, for Plaintiff and Respondent. ****** Makeitha Keith Christon (defendant) appeals the trial court’s denial of his petition for relief under Penal Code1 section 1172.6 (former section 1170.95).2 We previously affirmed the court’s order in an unpublished opinion, People v. Christon (Jan. 28, 2021, B301998), concluding that the record established defendant was ineligible for resentencing as a matter of law based on the true finding on the special circumstance allegation by the jury at trial. Upon review, the California Supreme Court transferred this case back to us to reconsider in light of People v. Strong (2022) 13 Cal.5th 698 (Strong). We now reverse the court’s order and remand the matter for the court to conduct an evidentiary hearing under section 1172.6. 1 All further statutory references are to the Penal Code unless otherwise indicated. 2 Effective June 30, 2022, section 1170.95 was renumbered section 1172.6, with no change in text (Stats. 2022, ch. 58, § 10). For the sake of simplicity, we will refer to the section by its new numbering only. 2 FACTS AND PROCEDURAL BACKGROUND I. Facts3 A. The underlying crimes In September 2005, defendant noticed that a group of 20 men were playing a game of dice in a residential driveway and saw anywhere from $400 to $2,000 in the “pot.” He walked up, asked if any of the players were “strapped” (that is, armed with a firearm), and the homeowner responded that no one had guns. Defendant walked away, and went to find someone else to help him “hit up the dice game.” Davionne McDowell (McDowell) agreed. Defendant gave McDowell a gun and a plastic bag to carry away the money. While defendant was parked around the corner, McDowell approached the game, pulled out his gun, and demanded that the players “give up the cheese.” When several of them ran, McDowell sprayed bullets at the fleeing men, three of whom were hit by bullets. One of the three—the homeowner— died from his wounds. McDowell ran back to defendant’s car, and defendant drove him away. Defendant was a member of the Bloc Crips street gang. B. Prosecution, conviction and appeal The People charged defendant with (1) the murder of the homeowner (§ 187, subd. (a)), (2) three counts of attempted premeditated murder, one for each of the men in the line of fire (§§ 187, subd. (a), 664), and (3) four counts of attempted second degree robbery (§§ 211, 664). The People alleged that the murder was a special circumstance murder—namely, that it was committed in the course of a robbery (§ 190.2, subd. (a)(17)), 3 We draw these facts from our prior, unpublished appellate opinion affirming defendant’s conviction. (People v. Christon (Oct. 4, 2013, B238761).) 3 which could be found true only if defendant was a major participant in the robbery and acted with reckless indifference to human life. The People further alleged that all of the crimes were committed for the benefit of, and in association with, a criminal street gang (§ 186.22, subds. (b)(1)(A) & (b)(4)), and that a principal had discharged a firearm causing great bodily injury or death (§ 12022.53, subd. (b)-(e)). A jury convicted defendant of the above-charged counts and found true all of the allegations. The trial court sentenced defendant to prison for life without the possibility of parole (for the murder) plus 25 years (for the firearm enhancement), and three consecutive life terms (for each of the attempted murders) plus 25 years (for the firearm enhancements); each sentence was consecutive to the others. The court imposed three-year prison sentences for each of the second degree robbery charges but stayed the sentences under section 654. Defendant appealed the judgment and we affirmed in an unpublished opinion. II. Procedural Background On January 23, 2019, defendant filed a petition seeking resentencing under section 1170.95, ultimately for his murder conviction and for the three attempted murder convictions. The court appointed counsel for defendant, and ordered the parties to submit further briefing. Following a hearing, the trial court denied defendant’s petition because (1) he did not “establish a prima facie case for relief” under section 1172.6 because one of the elements of that prima facie case—namely, that he could not be convicted of first degree murder under the amended murder statute—was foreclosed by “the jury’s finding that he was a major 4 participant who acted with reckless disregard for human life,” and (2) section 1172.6 does not provide relief for attempted murder convictions. As noted above, we affirmed,4 but our Supreme Court vacated our prior opinion and has remanded the matter for us to reconsider in light of Strong. DISCUSSION Defendant argues that the trial court erred in denying his section 1172.6 petition on the ground that the jury’s prior special circumstance finding rendered him ineligible for relief under section 1172.6. Because this argument turns on questions of statutory construction and the application of law to undisputed facts, our review is de novo. (People v. Blackburn (2015) 61 Cal.4th 1113, 1123; Martinez v. Brownco Construction Co. (2013) 56 Cal.4th 1014, 1018.) Section 1172.6 authorizes a defendant “convicted of felony murder or murder under the natural and probable consequences doctrine” to vacate his murder conviction if, as a threshold matter, he makes a “prima facie showing” of entitlement to relief. (§ 1172.6, subds. (a) & (c).) This, in turn, requires a showing that, among other things, he “could not presently be convicted of murder” under the amendments to the murder statutes that became effective on January 1, 2019. (Id., subd. (a)(3).) These 4 Defendant filed a petition for a writ of habeas corpus concurrently with his appeal, in which he raised a challenge to the jury’s special circumstance finding based on People v. Banks (2015) 61 Cal.4th 788 (Banks) and People v. Clark (2016) 63 Cal.4th 522 (Clark). (See In re MAKEITHA CHRISTON on Habeas Corpus, B306635 [petition].) Because he did not file such a petition with the trial court, we denied his habeas petition without prejudice to refiling before the trial court. 5 statutes, even as amended, still authorize a murder conviction based on murder committed by someone else in the course of a jointly committed felony as long as the defendant “was a major participant in the underlying felony and acted with reckless indifference to human life.” (§ 189, subd. (e)(3).) In Strong, supra, 13 Cal.5th 698, our Supreme Court confronted the same basic facts present in this case. There, as here, the defendant’s jury found true the special circumstance that he was a “major participant” who acted with “reckless indifference” to human life. There, as here, the jury’s finding was made prior to the issuance of Banks, supra, 61 Cal.4th 788 and Clark, supra, 63 Cal.4th 522. There, as here, the defendant was seeking relief under section 1172.6 and the trial court had summarily denied him that relief on the ground that jury’s pre- Banks and pre-Clark finding was binding. Strong held that this was wrong. Strong reasoned that Banks and Clark “substantially clarified”—and narrowed—the meaning of the terms “major participant” and “reckless indifference.” (Strong, at p. 721.) As a result, Strong concluded, “[f]indings issued by a jury before Banks and Clark” are not preclusive and, more to the point “do not preclude a defendant from making out a prima facie case for relief.” (Id. at pp. 710, 716-717.) Strong went on to hold that it was inappropriate for any court—trial or appellate—to evaluate whether substantial evidence supports the jury’s pre-Banks and pre-Clark finding if that evidence is viewed through the narrowed Banks and Clark prisms. (Id. at pp. 719-720.) In sum, Strong held that a pre-Banks and pre-Clark special circumstance finding does not warrant summary denial of a section 1172.6 petition; instead, the matter must proceed to an evidentiary hearing. (Id. at p. 720.) 6 Strong disposes of the felony-murder portion of this appeal. Defendant’s special circumstance finding was made prior to Banks and Clark, and thus cannot provide the basis for the summary denial of his petition. We also reverse as to the attempted murder convictions. Since this court’s earlier decision, the Governor signed into law Senate Bill No. 775 (2021-2022 Reg. Sess.). Effective January 1, 2022, Senate Bill No. 775 amended section 1172.6 to include individuals like defendant convicted of attempted murder under the natural and probable consequences doctrine. (Stats. 2021, ch.551, § 2.) Defendant is therefore entitled to an evidentiary hearing on the murder and attempted murder convictions. In supplemental briefing on remand from Strong, defendant expands the scope of his appeal by arguing that he is also entitled to have the firearm enhancement and gang enhancement portions of his sentence vacated. These arguments are premature. Although Senate Bill No. 620 (2017-2018 Reg. Sess., Stats. 2017, ch. 682, § 2, eff. Jan. 1, 2018) grants trial courts a newfound discretion to strike firearm enhancements, and although Assembly Bill No. 333 (2021-2022 Reg. Sess., Stats. 2021, ch. 699, § 3, eff. Jan 1, 2022) adds new requirements to the gang enhancement, neither of these changes applies retroactively to final convictions. (People v. Hernandez (2019) 34 Cal.App.5th 323, 326 [Senate Bill No. 620 inapplicable to final convictions]; cf. People v. Ramos (2022) 77 Cal.App.5th 1116, 1127 [Assembly Bill No. 333 applies to nonfinal convictions].) At this moment in time, defendant’s convictions are final convictions. Under our Supreme Court’s recent decision in People v. Padilla (2022) 13 Cal.5th 152, 158, a court order vacating a final conviction renders it “nonfinal,” such that changes in the law applicable to nonfinal 7 convictions may be applied to any retrial and resentencing. All we have at this point in time in this case, however, is the pendency of a section 1172.6 petition that, in light of Strong, warrants an evidentiary hearing. Unless and until the trial court vacates one or more of defendant’s convictions under section 1172.6 after the evidentiary hearing, those convictions are final and the changes in the law he cites are unavailable to him. DISPOSITION The court’s order denying defendant’s petition for resentencing is reversed, and the matter is remanded for the court to conduct an evidentiary hearing regarding the murder and attempted murder convictions under section 1172.6. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS. ______________________, J. HOFFSTADT We concur: _________________________, Acting P. J. ASHMANN-GERST _________________________, J. CHAVEZ 8	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487769/	USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 1 of 45 [PUBLISH] In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 21-10771 ____________________ PALM BEACH COUNTY, CITY OF ATLANTIS, FLORIDA, Petitioners, versus FEDERAL AVIATION ADMINISTRATOR, Respondent, CAPTAIN ERROL FORMAN, Intervenor. USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 2 of 45 2 Opinion of the Court 21-10771 ____________________ Petition for Review of a Decision of the Federal Aviation Administration Agency No. 16-17-13 ____________________ Before JILL PRYOR, BRANCH, and ED CARNES, Circuit Judges. ED CARNES, Circuit Judge: Lantana Airport is a small regional airport in Palm Beach County, Florida. Captain Errol Forman is a former commercial pilot who now flies a small Cessna jet for his own personal use. Twice in May 2016, Forman landed his Cessna at the Lantana Air- port. It might have been a match made in the heavens, if not for a county ordinance. That ordinance on its face prohibits “pure turbo-jet aircraft” and cargo-carrying aircraft that weigh more than 12,500 pounds from using Lantana Airport, and Palm Beach County enforces the ordinance in a way that actually bans all jets, not just the “pure turbo” variety. So when Forman landed his turbofan Cessna jet at Lantana Airport, the County threatened him with fines and jail time. That bit of unexpected rough air triggered even more tur- bulence. Forman complained to the Federal Aviation Administra- tion that the ordinance’s jet restriction violated a grant assurance the County had made to the FAA in exchange for federal airport USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 3 of 45 21-10771 Opinion of the Court 3 improvement money. The FAA agreed with Forman and ordered the County to rescind the restriction. The County and the City of Atlantis, which borders Lantana Airport, have petitioned us for re- view of the FAA’s final agency decision. 1 Forman intervened. I. The Statutory and Regulatory Background The FAA gives grants to airport sponsors so that they can build and improve airports to “maintain a safe and efficient nation- wide” airport system. 49 U.S.C. §§ 47104(a), 47105(a); see also id. § 47102(26) (defining “sponsor” as “a public agency” or “a private owner of a public-use airport that submits . . . under this subchap- ter an application for financial assistance for the airport”). In ex- change for the grants, sponsors must agree to various written “as- surances,” including to make the airport “available for public use on reasonable conditions and without unjust discrimination.” Id. § 47107(a)(1); see also Airport Improvement Program (AIP) Grant Assurances, 79 Fed. Reg. 18,755, 18,755 (Apr. 3, 2014) (noting that a “complete list of the current grant assurances can be viewed” at https://www.faa.gov/airports/aip/grant_assurances). This case concerns two grant assurances. The first and most important one is Grant Assurance 22, which is titled “Economic Nondiscrimination.” Fed. Aviation Ad- min., Airport Sponsor Assurances 10–11 (2014), 1 Atlantis joined the County’s petition because “its residents may be subject to aircraft noise and safety impacts” if the restriction is rescinded. We refer to the County and Atlantis collectively as “the County.” USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 4 of 45 4 Opinion of the Court 21-10771 https://www.faa.gov/sites/faa.gov/files/airports/aip/grant_as- surances/airport-sponsor-assurances-aip.pdf. Subsection (a) of Grant Assurance 22 requires sponsors to “make the airport availa- ble as an airport for public use on reasonable terms and without unjust discrimination to all types, kinds and classes of aeronautical activities.” See id. at 10. Later subsections of Grant Assurance 22 give sponsors some authority to impose conditions or restrictions on airport use. For example, subsection (h) allows sponsors to “establish such reasonable, and not unjustly discriminatory, con- ditions to be met by all users of the airport as may be necessary for the safe and efficient operation of the airport,” while subsection (i) allows sponsors to “prohibit or limit any given type, kind or class of aeronautical use of the airport if such action is necessary for the safe operation of the airport or necessary to serve the civil aviation needs of the public.” Id. at 11. The other assurance that is important here is Grant Assur- ance 1(a), which is titled “General Federal Requirements.” Grant Assurance 1(a) requires sponsors to “comply with all applicable Federal laws, regulations, executive orders, policies, guidelines, and requirements as they relate to the application, acceptance and use of Federal funds for [a] project including but not limited to . . . Title 49, U.S.C., subtitle VII, as amended.” Id. at 2. Subtitle VII includes the Airport Noise and Capacity Act (ANCA). See 49 U.S.C. §§ 47521–34. ANCA generally prohibits “airport noise and access re- strictions on the operation of stage 2 and stage 3 aircraft” unless USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 5 of 45 21-10771 Opinion of the Court 5 those restrictions meet stringent statutory requirements. 2 See id. § 47524. ANCA also mandates that restrictions on Stage 3 aircraft, which is what Forman’s Cessna jet is, be “reasonable, nonarbi- trary, and nondiscriminatory.” Id. § 47524(c)(2)(A). But ANCA doesn’t apply to restrictions that were already in effect by October or November 1990. See id. § 47524(c)(1) (making ANCA applica- ble to “airport noise or access restriction[s] on the operation of stage 3 aircraft not in effect on October 1, 1990”); id. § 47524(d) (requiring a small subset of airport noise or access restrictions to be “in effect on November 5, 1990” instead). Those restrictions are considered “grandfather[ed].” Fed. Aviation Admin., Airport Compliance Manual, FAA Order 5190.6B § 13.14(b) (2021), https://www.faa.gov/documentLibrary/media/Order/Order- 5190-6B-Change1.pdf. The FAA implements ANCA through 14 C.F.R. Part 161, which sets out the process for analyzing and approving new noise restrictions, see 14 C.F.R. §§ 161.101 to .417, and the penalties for failure to comply with ANCA, see id. §§ 161.501 to .505. By con- trast, the FAA enforces compliance with grant assurances using 2 Stage 2 and Stage 3 are noise level categories. See 14 C.F.R. § 36.1(f). Stage 3 jets, which are the second-quietest category, are “relatively quiet[].” See Friends of E. Hampton Airport, Inc. v. Town of E. Hampton, 841 F.3d 133, 138 (2d Cir. 2016) (quotation marks omitted); Stage 4 Aircraft Noise Stand- ards, 70 Fed. Reg. 38,742, 38,742–43 (July 5, 2005) (creating a new Stage 4 category that in 2006 replaced Stage 3 as the quietest U.S.-certified jet cate- gory). USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 6 of 45 6 Opinion of the Court 21-10771 two other regulatory mechanisms: an informal “Part 13” com- plaint process, see 14 C.F.R. § 13.2; Airport Compliance Manual § 5.1, and a formal “Part 16” complaint process, see 14 C.F.R. § 16.23; Airport Compliance Manual § 5.1. A person can report a Part 13 complaint by phone, letter, or email, see Airport Compliance Manual § 5.6(a), and the complain- ant doesn’t have to be affected by the violation, see id. § 5.2. Part 13 complaints are typically handled by the FAA Airports District Office and its Regional Airports Divisions. Id. § 5.1. Those offices might choose to investigate the allegations, choose to consult with other FAA offices (like the Flight Standards or the Air Traffic ones) to get airspace or safety studies, or choose to request more infor- mation from the complainant or the airport sponsor. See id. § 5.8. Those offices might also make a preliminary determination on compliance, identify apparent violations, specify corrective ac- tions, and prescribe deadlines for those actions. Id. §§ 5.11 to .13. But any preliminary determination under Part 13 is not a formal or final FAA determination, see id. § 5.11, and if the complainant or the sponsor is dissatisfied, they may file a formal Part 16 com- plaint, see id. § 5.12. Part 16 complaints initiate “the formal administrative pro- cess by which the FAA” makes “a formal agency finding” about an airport sponsor’s “compliance with its federal obligations.” Id. § 5.16. A Part 16 complainant, unlike a Part 13 one, must be “di- rectly and substantially affected” by the noncompliance and must give a “concise but complete statement of the facts relied upon to USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 7 of 45 21-10771 Opinion of the Court 7 substantiate each allegation,” with supporting documentation. 14 C.F.R. § 16.23(a)–(b). The airport sponsor gets to answer the com- plaint, every other party gets to file a reply, and all filings must contain supporting documents. Id. §16.23(d)–(i). The complain- ant has the burden to “show noncompliance,” but the party who files a motion or asserts an affirmative defense has the burden of proof for those. Id. § 16.23(k). When deciding a Part 16 complaint, “the FAA may rely en- tirely on the complaint and the responsive pleadings,” or it may conduct additional investigation if it finds there’s “a reasonable ba- sis” for doing so. Id. § 16.29. Once the FAA has finished any in- vestigation it decides in its “sole discretion” to conduct, see id., the Director of the FAA Office of Airport Compliance and Manage- ment Analysis makes an initial determination, id. §§ 16.3, 16.31. That “Director’s Determination” must contain fact findings, legal conclusions, and explanations, and it must be “supported by a pre- ponderance of the reliable, probative, and substantial evidence contained in the record.” See id. § 16.31(b). The Director’s Determination isn’t a final decision subject to formal judicial review. Id. §16.247(b)(2). But it can be appealed to the FAA Associate Administrator for Airports. Id. §§ 16.3, 16.31(c), 16.33. If that happens, the parties may each file a brief, see id. § 16.33(c)–(d), and the Associate Administrator “consider[s] the issues” by analyzing whether: (1) “the findings of fact” are “supported by a preponderance of reliable, probative, and substan- tial evidence contained in the record”; (2) the “conclusions” are USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 8 of 45 8 Opinion of the Court 21-10771 “made in accordance with law, precedent and policy”; (3) “the questions on appeal” are “substantial”; and (4) “any prejudicial er- rors occurred,” id. § 16.33(e). The Associate Administrator then “issue[s] a final decision and order,” which are subject to judicial review. Id. §§ 16.33(g), 16.247(a); see also 49 U.S.C. § 46110(a) (noting that anyone with “a substantial interest” in an FAA order may file “a petition for review” in the “court of appeals . . . for the circuit in which the person resides or has its principal place of busi- ness”). II. The Lantana Airport & its Jet Restriction Lantana Airport is a regional general aviation airport lo- cated south of West Palm Beach. The County runs it as part of a four-airport system. The airport has three relatively short run- ways and no tower. It acts as a “reliever” for Palm Beach Interna- tional Airport, which means it is intended to divert slower-moving general aviation traffic (not scheduled passenger service) from that larger, busier airport. Between 1982 and 2021 Lantana Airport re- ceived more than $6 million in federal airport development assis- tance through the § 47104(a) grant program, so it’s obligated to follow the grant assurances. As we have mentioned, the County enforces a restriction that prohibits all jets from using Lantana Airport. And as we have also mentioned, ANCA doesn’t apply to restrictions that were in effect before late 1990. See 49 U.S.C. § 47524(c), (d); Airport Com- pliance Manual § 13.14(b). So it matters when Lantana Airport’s USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 9 of 45 21-10771 Opinion of the Court 9 jet restriction took effect. For that reason, we set out in detail the restriction’s trajectory and flight path. The jet restriction began in June 1973, when the Board of County Commissioners passed a regulation providing that: “All jet aircraft in addition to all aircraft weighing in excess of 12,500 pounds engaged in aircraft cargo operations, shall be prohibited from parking, landing, or taking off from the Lantana Airport.” The regulation was intended to “limit planes with excess noise from utilizing the airport.” Because “written confirmation of ver- bal approval” from the FAA “had not been yet received,” the Board set a July 1, 1973 effective date for the regulation to “allow sufficient time for this written response.” Before the regulation became effective, the FAA’s Miami Airports District Office told the County in writing that the FAA had “no objections to the pro- posed operational regulation,” though the Office did not explain why it had none. In November 1973, the Board revised the regu- lation to read: “All jet aircraft prohibited and all aircraft weighing in excess of 12,500 pounds engaged in aircraft cargo operations prohibited.” In 1988 the Board adopted an ordinance “promulgating air- port regulations,” which it housed in Appendix B of the County’s Code of Laws and Ordinances. The ordinance explicitly “super- cedes (sic) and repeals all airport regulations adopted on or before October 27, 1987.” The ordinance did not contain a Lantana USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 10 of 45 10 Opinion of the Court 21-10771 Airport jet restriction like the one in the 1973 regulation. 3 The ordinance did contain, in a section called “Aircraft operation rules,” a provision authorizing the County airport director to “re- strict any flight or other operations at the airport . . . for any justi- fiable reason.” The stated purpose of the ordinance was to “pro- vide for the safety of life and property on airports,” to protect “public and private property within airport boundaries,” and to “promote the general welfare.” In 1991 the County entered an “interlocal governmental agreement” with the City of Atlantis, which borders the airport. Under a heading called “Lantana Airport Use Restrictions,” the agreement provided: “Restricted aircraft will be: pure turbo jet air- craft and aircraft in excess of 12,500 pounds engaging in air cargo operations.” The agreement “recognized that the restrictions . . . are simply guidelines” but noted that if they “cannot be enforced by the County due to FAA regulations, the County . . . agrees to take reasonable steps to attempt to make [them] mandatory.” The preamble of the agreement explained that the County had deter- mined it was in “the best interests of the public health, safety and welfare” — including for “residents living near the Airport” like the people in Atlantis — to have set procedures at the Lantana 3 In fact, the only two times the Lantana Airport is mentioned in the 1988 ordinance are in the definition of “airport” and in an article devoted to noise abatement. The noise provision in the 1988 ordinance provided: “Preferen- tial runway Palm Beach County Park, Lantana, is Runway #15-33, conditions permitting at pilot’s discretion.” USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 11 of 45 21-10771 Opinion of the Court 11 Airport and a master plan for its “future growth and safety.” It noted that the County had developed “certain procedures” after study and public comment and with the input of a citizens’ group. In 1992 the County’s Director of Airports invoked his au- thority under the 1988 ordinance’s aircraft operation rules to issue this directive: “Jet aircraft, of any type and weight classification are prohibited from operating (departing and arriving) at Palm Beach County Park Airport – Lantana.” According to the County’s brief to us, the directive was prompted by a jet landing at the Lantana Airport. In 1998 the Board passed a resolution “adopting airport rules and regulations.” The resolution noted that “certain rules and regulations exist which govern . . . airports located in Palm Beach County” and that the Board had “determined that it is nec- essary to repeal the existing rules and regulations and adopt” oth- ers. The resolution explicitly provided: The Rules and Regulations, as adopted by prior Res- olutions and codified in the Code of Laws and Ordi- nances relating to Palm Beach County Government at Appendix B, as may be amended, and all other Resolutions, or parts thereof in conflict with the pro- visions of this Resolution, are hereby repealed to the extent of such conflict. This Resolution supersedes and repeals all Airport Rules and Regulations adopted before [February 24, 1998]. USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 12 of 45 12 Opinion of the Court 21-10771 The codified 1998 Rules and Regulations, which were attached to the resolution, reiterated that “[a]ll Rules and Regulations previ- ously enacted and any other ordinance or resolution in conflict with the Rules and Regulations are hereby repealed to the extent of the conflict.” The 1998 Rules and Regulations also included, within an article devoted to noise abatement, four sections specific to Lantana Airport. Of those four sections, two are relevant here. One provided that “noise abatement and control procedures at the Lantana Airport shall be governed by” the County’s 1991 Agree- ment with Atlantis. The other, called “Use Restrictions,” pro- vided: The following use restrictions for the Lantana Airport shall be enforced in accordance with the Lantana In- terlocal Agreement: (a) Pure turbo-jet aircraft and aircraft in excess of 12,500 pounds engaging in air cargo operations are prohibited. (b) All regularly scheduled commercial air carrier pas- senger flights are prohibited. The 1998 Rules and Regulations, including the Lantana Airport jet restriction, are still in effect today. See Palm Beach Cnty., Fla., Code of Laws & Ordinances app. B §§ 12-4 to 12-7 (2022). III. Captain Forman & his FAA Proceedings Captain Forman is a former commercial pilot who flew Boeing 727 jets for 25 years. He now flies a Cessna Citation twin- engine, turbofan (Stage 3) jet that weighs less than 12,500 pounds, USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 13 of 45 21-10771 Opinion of the Court 13 and it is not used for cargo operations. In May 2016, he twice landed his Cessna at the Lantana Airport and was threatened by the County’s Director of Airports with fines and jail time. A. Part 13 Proceedings The month before that happened, in April 2016, Forman had emailed the FAA’s Orlando Airports District Office about the jet restriction at Lantana Airport. That District Office contacted the FAA’s Southern Region Airports Division for assistance. After the Airports Division gave Forman information about the infor- mal Part 13 complaint process, Forman emailed a complaint to the Airports Division alleging that Lantana Airport’s jet restriction vi- olated Grant Assurance 22. In response to Forman’s Part 13 complaint, the County as- serted that Lantana Airport’s jet restriction was grandfathered un- der ANCA, that the FAA had not objected to the jet restriction in the (at that time) 43 years it had been in place, and that “many stakeholders” had “justifiably relied” on the FAA’s “prior determi- nations” that the jet restriction was “enforceable.” The County argued that the 1998 resolution didn’t alter the effect of the 1973 regulation and that “the difference in language between the 1973 restriction and the 1998 resolution” — specifi- cally the change from “all jet aircraft” to only “pure turbo-jet air- craft” — was “inadvertent” and “reflected misunderstanding” by the Board. To support its argument that “any change in language was unintentional,” the County stated that it had “continued to USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 14 of 45 14 Opinion of the Court 21-10771 enforce the restriction exactly as originally enacted in 1973,” as a “ban on all jet aircraft.” The County also argued that the 1988 ordinance didn’t re- peal the 1973 regulation, both because the 1988 ordinance wasn’t adopted by resolution as required by Fla. Stat. § 332.08(2) and be- cause it wasn’t “intended to substantively alter any of the Lantana- specific restrictions.” And the County asserted that it complied with Grant Assurance 22 because subsection (i) of that assurance allows airport proprietors to enact restrictions, including about noise, if they are reasonable and necessary for the safe and efficient operation of the airport, which the jet restriction is because pure turbojets are “generally noisier” than turbofan jets. Forman replied that the County bore the burden of justify- ing its noise-based restriction by satisfying the FAA’s three-part test, which requires that “a regulation restricting airport use for noise purposes: (1) be justified by an existing noncompatible land use problem; (2) be effective in addressing the identified problem without restricting operations more than necessary; and (3) reflect a balanced approach to addressing the identified problem that fairly considers both local and federal interests.” Airport Compli- ance Manual § 13.8b; see also Aircraft Owners & Pilots Assoc. v. City of Pompano Beach, FAA Docket No. 16-04-01, Director’s De- termination (Dec. 15, 2005), 2005 WL 3722717, at *28. Forman argued the County had failed to satisfy that test and could not sat- isfy it on the current record because it hadn’t conducted the re- quired safety analysis and airspace study. Citing Aircraft Owners, USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 15 of 45 21-10771 Opinion of the Court 15 he argued that compliance with or exemption from ANCA doesn’t relieve an airport sponsor of the duty to comply with grant assur- ances. The Airports Division mostly agreed with Forman. In De- cember 2016 it issued a preliminary Part 13 report concluding that Lantana Airport’s jet restriction “may be unjustly discriminatory,” was “not consistent” with Grant Assurance 22(a), and wasn’t grandfathered under ANCA. The report pointed out that there was no “documented explanation as to why previous FAA review- ers believed th[e] discriminatory restriction was just or reasona- ble.” 4 It explained that, even though the FAA had “[h]istorically” considered the restriction to be grandfathered by ANCA, the County’s documents showed the 1973 regulation was repealed by the 1988 ordinance and not reenacted until the 1991 interlocal agreement at the earliest, which was after ANCA’s 1990 grandfa- thering date. It noted that the jet restriction might be permissible under Grant Assurance 22(i), but it concluded it couldn’t know that for sure until it coordinated with FAA’s Air Traffic Organiza- tion to assess whether the restriction was “necessary for airspace safety” or efficiency. After conducting that assessment, the Airports Division is- sued a finalized Part 13 report in March 2017. That report con- cluded that allowing jets on one of Lantana Airport’s runways 4 A specialist in the FAA’s Orlando Airports District Office also concluded: “It does not appear that the FAA has ever analyzed this restriction.” USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 16 of 45 16 Opinion of the Court 21-10771 would “not affect safety or efficiency” but that the County could “continue to restrict jet operations” on the other two runways be- cause they “could potentially impact air traffic efficiency at Palm Beach International.” The Airports Division noted, however, that its “conclusions [did] not obligate the County to alter its existing plans for” Lantana Airport because other features of the poten- tially usable runway may justify the County “continu[ing] to rea- sonably restrict” its use. B. Part 16 Proceedings Despite the Airports Division’s conclusions, the County did not change the Lantana Airport’s jet restriction. So Forman filed a formal Part 16 complaint in August 2017, again alleging that the jet restriction violated Grant Assurance 22(a). He noted that the restriction was being applied to all jets and not just to pure turbo- jets as it was written. He argued that it wasn’t grandfathered un- der ANCA. He reiterated that the County hadn’t done the re- quired analyses to show the noise-based restriction was reasona- ble, either when it was first enacted or since then. And he asserted that compliance with ANCA “does not immunize an airport spon- sor from liability for violating” a grant assurance. The County filed a motion to dismiss Forman’s Part 16 complaint. As a preliminary matter, the County contended that a Part 16 proceeding wasn’t the appropriate vehicle for addressing ANCA issues and that the Director of the FAA Office of Airport Compliance and Management Analysis (the official deciding For- man’s Part 16 complaint) should “assume without deciding, for USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 17 of 45 21-10771 Opinion of the Court 17 the purpose of [the Part 16] proceeding, that the restriction is grandfathered under ANCA.” The County alternatively argued that, if the Director chose to consider whether the jet restriction was grandfathered instead of just assuming that it was, the restriction was grandfa- thered. The County argued that ANCA doesn’t require re- strictions to be codified and that the County had continually en- forced the jet restriction in exactly the same way since 1973, re- gardless of whether the text of the 1973 regulation had been re- pealed or narrowed. According to the County, that meant the re- striction was “in effect” before October or November 1990, which meant the restriction was grandfathered and ANCA’s require- ments did not apply to it. And the County argued that Forman hadn’t justified revis- iting what it considered to be the FAA’s repeated findings that the restriction was “reasonable, in conformance with the County’s grant assurance obligations, and enforceable.” The County as- serted it would be “inappropriate” for the FAA to make the County rescind the jet restriction “without first comprehensively and formally analyzing whether” the restriction “continues to be justified for noise, safety and/or efficiency reasons” and “what the actual impact of rescinding or modifying the restriction would be.” USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 18 of 45 18 Opinion of the Court 21-10771 1. The Director’s Determination The Director agreed with Forman and denied the County’s motion to dismiss. On the preliminary matter of whether he could address ANCA issues in a Part 16 proceeding, the Director found that the case “ultimately involve[d] an alleged violation of the grant assurances.” And “where the allegations regarding viola- tions of the assurances are intertwined with issues related to ANCA, the Director is certainly authorized to examine or take no- tice of” whether the restriction complied with ANCA, including whether it was grandfathered. That’s because the Director “needs to understand the status of the questioned noise and access re- striction under ANCA” to “reach a ruling on the grant assurances.” So ANCA being “raised as a related or ancillary issue or defense does not divest the Agency of jurisdiction.” The Director also noted that Grant Assurance 1(a) required the County to comply with ANCA, but he didn’t explicitly anchor his authority to that provision.5 On the merits, the Director found that the jet restriction was not grandfathered under ANCA because the “plain language” of the 1988 ordinance clearly repealed the 1973 regulation and the reintroduction of the restriction in the 1991 interlocal agreement occurred after the ANCA grandfathering deadline. He also found 5 As a second preliminary matter, the Director addressed who had the burden of proof, concluded Forman did, and determined Forman had “stated a valid prima facie case.” USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 19 of 45 21-10771 Opinion of the Court 19 that the County wasn’t in compliance with Grant Assurance 22. Citing the Second Circuit’s East Hampton decision, the Director concluded that noise and access restrictions that don’t comply with ANCA and aren’t grandfathered are a “violation per se of Grant Assurance 22” because actions that violate legal mandates like ANCA “are, by their nature, unreasonable and arbitrary.” Further analyzing the jet restriction, the Director explained that it “lacked justification and support” because the County had not defended the necessity of the restriction with “specifically identified and documented noise, safety, and efficiency concerns.” Instead the County simply argued that the restriction had been in effect since 1973 and, as a result, “should be allowed to stand with- out providing evidence that a noise problem exists.” But the Di- rector rejected the County’s reliance on what it considered the FAA’s implicit approval of the restriction because the FAA had never before been “formally asked to provide an analysis” of the restriction and the FAA’s informal determinations related to the restriction did not consider the impact of the 1988 ordinance on the restriction’s continued validity. Finally, the Director concluded that the jet restriction was “unjustly discriminatory because it allows aircraft equally noisy or noisier than the aircraft” it restricts. And he noted that the County’s enforcement of the restriction was even more discrimi- natory than the written restriction itself indicated because the County actually excluded all jets — including Forman’s turbofan — not just pure turbojets. The Director ordered the County to USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 20 of 45 20 Opinion of the Court 21-10771 submit a Corrective Action Plan revoking the restriction and to publicize that revocation, though he did agree with the County that its Plan could take a “measured approach.” 2. The Final Agency Decision of the Associate Administrator The County appealed the Director’s Determination to the Associate Administrator, who affirmed it but modified and ex- panded the Corrective Action Plan. First, the Associate Adminis- trator rejected the County’s argument that the Director had ex- ceeded the FAA’s authority by considering ANCA in a Part 16 pro- ceeding. He noted that the Director hadn’t based his jurisdiction on ANCA but instead on the “grant assurance issue” and con- cluded that “the grandfathering inquiry was integral to reach that issue.” The Associate Administrator also agreed with the Director that nothing in Part 16 of the regulation bars considering ANCA in Part 16 proceedings, particularly in light of the Second Circuit’s East Hampton decision. He distinguished the FAA’s Aircraft Own- ers decision, which had declined to consider ANCA in a Part 16 proceeding. The Associate Administrator rejected the County’s argu- ment that the restriction was grandfathered because it was “in ef- fect” in 1990. He noted that the County had provided “no author- ity” for its position that its past practices should determine whether the restriction remained in effect, and he concluded that the definition of “effect” supported the Director’s view that the existence of a law was the relevant factor. The Associate Admin- istrator noted that it appeared the County’s own practice was “to USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 21 of 45 21-10771 Opinion of the Court 21 tie the existence of a restriction to a formal enactment,” and he reasoned that “ANCA itself” supported his conclusion that grand- father rights apply only to formally documented restrictions in- stead of to mere practices. As he viewed it, ANCA tied both grand- father rights and similar rights to the existence of formal legal doc- uments. There was, he added, “no support for the County’s ap- proach of establishing grandfather rights . . . based on an alleged practice untethered from law and in contradiction to record evi- dence.” As to the FAA’s earlier dealings with the Lantana Airport jet restriction, the Associate Administrator found that the Director had appropriately “determined whether prior FAA actions were formal or informal and whether they were based on a complete record.” He pointed out that previous FAA letters discussing the restriction had no “explanation or supporting analysis” about why or how the restriction “was reasonable and not unjustly discrimi- natory.” Those FAA letters did not discuss the “key legal develop- ment” of the 1988 repeal. As a result, their conclusions had been “based on incomplete facts,” and the Director had properly given them “limited weight.” The Associate Administrator also rea- soned that because a 2001 informal complaint about the Lantana Airport jet restriction “did not result in an FAA determination,” it was “not analogous to ‘FAA approval.’” So he concluded that none of the earlier FAA examinations of the jet restriction showed it was grandfathered. USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 22 of 45 22 Opinion of the Court 21-10771 Finally, the Associate Administrator found the Director had correctly concluded that the jet restriction violated Grant Assur- ance 22. To “address the County’s argument that the Director did not provide evidence to substantiate his findings or truly analyze the facts of the case,” the Associate Administrator reexamined “all of the relevant elements” in the restriction, including “jet noise,” “aircraft weight,” “cargo operations,” “safety and efficiency,” and environmental impact. On jet noise, the Associate Administrator found no justifi- cation for the restriction because the County had “no substantive data” — like noise studies or documentation — from 1973 or since to prove that there was a noise problem or that the restriction was the least restrictive solution to it. Instead, the FAA’s own objec- tive data on aircraft noise showed that many of the aircraft Lan- tana Airport allows are noisier than jets and that they have been noisier before and since 1973, making the restriction “flawed the day it was adopted.” Objective data similarly refuted the need for the restriction based on weight because there was no link between weight and noise: many aircraft weighing less than 12,500 pounds are noisier than aircraft weighing more than that. And while the County ar- gued heavier aircraft do more damage to the airport’s pavement, objective data showed that was not true. Nor was there any rea- son to prohibit cargo planes at Lantana Airport because “[w]hat an aircraft carries, people or cargo, or what operation it performs, is unrelated to noise, weight, safety, or any other justification.” USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 23 of 45 21-10771 Opinion of the Court 23 After noting “the evidence strongly suggests that the real reason for these restrictions is noise mitigation and not safety and efficiency,” the Associate Administrator found no safety or effi- ciency justification existed anyway. He explained that the “FAA, not the County, is the final authority” about safety and efficiency and that the FAA Flight Standards Office had no objection to tur- bojet operations at the Lantana Airport, as its analysis in Forman’s Part 13 proceeding showed. Because “Flight Standards is the ulti- mate expert arbiter” and “provides the definitive position on avia- tion safety,” the Director had appropriately relied on its finding. As a result, the Associate Administrator agreed with “the overall conclusion” that the airport “can safely and efficiently accommo- date jets.” But the Associate Administrator disagreed with the Air- ports Division’s Part 13 conclusion that the jet restriction could continue to apply to two of Lantana Airport’s three runways. He explained that the concern of the Flight Standards Office about those two runways related to airspace impacts at Palm Beach In- ternational Airport, which wasn’t a safety issue and could be ac- commodated with flight pattern modifications. As for environ- mental impacts, the Associate Administrator noted that Part 16 proceedings don’t require statutory evaluations but that the FAA may later have to perform one if the County’s Corrective Action Plan triggers that obligation. Because the jet restriction wasn’t justified for any of the rea- sons the County asserted, the Associate Administrator found it USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 24 of 45 24 Opinion of the Court 21-10771 was unreasonable and unjustly discriminatory. He acknowledged the County’s request that the FAA study the “impacts of rescind- ing the restriction” before requiring rescission, but he found the need for a study itself “illustrates the lack of justification for the restriction in the first place.” The Associate Administrator con- cluded that the Director hadn’t erred in finding the County vio- lated Grant Assurance 22 or in ordering a Corrective Action Plan requiring the County to rescind the restriction. The Associate Administrator did, however, modify the Plan’s timeline. Because the County had not corrected or re- scinded the restriction despite having multiple opportunities to do so, he declined to delay the recission any longer and ordered the County to provide “instant relief in the form of reasonable airport access” during its “phased-in approach” to the rest of the Plan. The Associate Administrator also ordered the FAA not to approve any of the County’s grant applications until it approved the County’s steps under the Plan and to “consider appropriate action regarding the County’s noncompliance with ANCA.” IV. Discussion The County makes three arguments in its petition for re- view of the Associate Administrator’s Final Administrative Deci- sion. Two concern ANCA, and one concerns Grant Assurance 22. A. The ANCA Issues As it has throughout the administrative proceedings, the County continues to contend that the FAA exceeded its authority USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 25 of 45 21-10771 Opinion of the Court 25 under Part 16 by considering ANCA issues when analyzing For- man’s complaint. It also contends the Associate Administrator’s conclusion that Lantana Airport’s jet restriction wasn’t grandfa- thered under ANCA was arbitrary, capricious, unsupported by substantial evidence, and not in accordance with the law. 1. Part 16 Authority The County contends that the FAA was wrong to analyze ANCA in Forman’s Part 16 proceeding because the Act has its own separate enforcement process: a Part 161 proceeding. See supra at 5; infra at 26–27. The County asserts that, by considering ANCA in a Part 16 proceeding, the agency failed to follow its own regu- lations and precedent. The FAA responds that it has the authority to enforce grant assurances in a Part 16 proceeding and that, be- cause noncompliance with a federal law like ANCA can make a restriction unreasonable, it needed to analyze ANCA to enforce the grant assurances as it did here. The FAA notes that Part 16 doesn’t specify how it must evaluate grant compliance, nor does Part 16 prohibit it from taking into account violations of other fed- eral laws when determining whether a restriction is unreasonable or unjustly discriminatory. To determine whether the FAA may consider ANCA issues in a Part 16 proceeding or instead must use a Part 161 proceeding for that, we interpret the regulations that govern those proce- dures. “When we construe regulations, we begin with the lan- guage of the regulation, just as we do for statutes.” Landau v. RoundPoint Mortg. Servicing Corp., 925 F.3d 1365, 1369 (11th Cir. USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 26 of 45 26 Opinion of the Court 21-10771 2019). If we find the Part 16 and Part 161 regulations to be “genu- inely ambiguous,” we will defer to the FAA’s interpretation of them if it is both “reasonable” and “worthy of controlling weight.” See Rafferty v. Denny’s, Inc., 13 F.4th 1166, 1179 (11th Cir. 2021) (quoting Kisor v. Wilkie, 139 S. Ct. 2400, 2415–16 (2019)). Of course, if we find those regulations to be unambiguous, we needn’t and won’t defer to the FAA’s view. See Kisor, 139 S. Ct. at 2415 (“[I]f the law gives an answer — if there is only one rea- sonable construction of a regulation — then a court has no busi- ness deferring to any other reading, no matter how much the agency insists it would make more sense.”). It’s true that the FAA can and sometimes does enforce ANCA through Part 161 proceedings. Part 161 regulations set out the conditions new noise restrictions must meet to be permitted under ANCA and the process new noise restrictions must satisfy before they can be approved under the Act. See 14 C.F.R. §§ 161.1 to .417. Part 161 regulations also make clear the procedures used when an airport sponsor appears to be in violation of ANCA, as well as the penalties that apply when a sponsor violates it. See id. § 161.501 (noting that the FAA can “terminate eligibility for air- port grant funds and [has] authority to impose or collect passenger facility charges for an airport operator’s failure to comply with” ANCA); id. §§ 161.503 to .505. But while Part 161 is the only way to get a new noise restriction approved under ANCA or to invoke the specific penalties available for ANCA violations, nothing in USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 27 of 45 21-10771 Opinion of the Court 27 Part 13, Part 16, or Part 161 suggests that Part 161 proceedings are the only ones in which the FAA can consider ANCA compliance. Not only that, but Part 16 regulations explicitly permit the FAA to evaluate potential violations of the 49 U.S.C. § 47107 grant assurances in Part 16 proceedings. See 14 C.F.R. § 16.1(a)(5). And Grant Assurance 1(a) explicitly requires airport sponsors to com- ply with ANCA. See Airport Sponsor Assurances at 2 (“The spon- sor hereby assures and certifies, with respect to this grant that . . . [i]t will comply with . . . Title 49, U.S.C., subtitle VII, as amended.”); Friends of E. Hampton Airport, 841 F.3d at 138 (“Sub- title VII (referenced in Grant Assurance 1(a), at Part B, Chapter 475, Subchapter II) encompasses the Airport Noise and Capacity Act of 1990 (‘ANCA’).”). A proper evaluation of an airport spon- sor’s compliance with grant assurances not only allows the FAA to consider ANCA issues that are intertwined with or relevant to grant assurance issues, it likely requires that consideration. That’s so even though Forman didn’t specifically identify Grant Assurance 1(a) as a basis for his complaint. The pleading rules for a Part 16 proceeding don’t require a complainant to iden- tify the specific grant assurance (or assurances) potentially being violated; they require only a description of how the complainant was “directly and substantially affected by the things done or omit- ted to be done by the respondents.” See, e.g., 14 C.F.R. § 16.23. Once the description in Forman’s complaint revealed that the jet restriction may not be compliant with ANCA, which would mean the County was not compliant with Grant Assurance 1(a), the FAA USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 28 of 45 28 Opinion of the Court 21-10771 was correct to evaluate that potential noncompliance. ANCA compliance is a component of grant assurance compliance, and Part 16 proceedings are the correct vehicle for the FAA to evaluate grant assurance compliance. Though the FAA did not explicitly anchor its authority to consider ANCA issues in Forman’s Part 16 proceeding on Grant Assurance 1(a), it recognized that specific grant assurance could support consideration of the ANCA issues in this proceeding. It was correct. The FAA was also correct that it had to consider the poten- tial ANCA issues in order to assess the County’s alleged violation of Grant Assurance 22. That’s because Grant Assurance 22(a) re- quires airport sponsors to “make the airport available as an airport for public use on reasonable terms,” while Grant Assurance 22(h) requires any restrictions on the airport’s use to be “reasonable.” See Airport Sponsor Assurances at 10–11 (emphases added). And “actions taken in violation of legal mandates” like ANCA “are, by their nature, unreasonable.” Friends of E. Hampton Airport, 841 F.3d at 153 (emphasis added). So before the FAA could decide whether Lantana Airport’s jet restriction was reasonable or unrea- sonable — and, as a result, compliant or noncompliant with Grant Assurance 22 — it had to decide both whether the restriction was within or grandfathered outside the scope of ANCA and, if within ANCA’s scope, whether it violated that law. That is exactly what the FAA did. Our conclusion about the FAA’s authority might be differ- ent if the goal of Forman’s Part 16 proceeding had been to subject USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 29 of 45 21-10771 Opinion of the Court 29 the County to the specific penalties available for violating ANCA. But Forman didn’t ask that the County’s federal airport grants be terminated; he asked only that Lantana Airport be required to “al- low[] turbofan jets” like his Cessna to use the airport. Similarly, we might agree with the County if the FAA had assessed ANCA- specific penalties in its Final Agency Decision, but that’s not what happened. While the Associate Administrator found in the Final Agency Decision that the jet restriction is “not grandfathered un- der ANCA,” he did not order termination of the County’s grants. Instead, he ordered that approval of the County’s grant applica- tions “be withheld” until the County complies with the Corrective Action Plan. Withholding approval of a grant application is differ- ent from terminating a previously approved grant. The Associate Administrator also specifically directed the FAA to “consider ap- propriate action regarding the County’s noncompliance with ANCA.” That “appropriate action” must be an ANCA-specific Part 161 proceeding where the FAA would be authorized to assess ANCA-specific penalties, which means the Final Agency Decision did not address the County’s ANCA violation outside of how it impacted the County’s compliance with the grant assurances. In- stead, the Final Agency Decision analyzed and decided ANCA is- sues that were bound up in its decision about whether the County violated a grant assurance, which it had the authority to do in a Part 16 proceeding. USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 30 of 45 30 Opinion of the Court 21-10771 We need not address any question about the deference we might owe the FAA’s interpretation of the Part 16 and Part 161 regulations because in our view those regulations make clear that the FAA’s interpretation is correct even without any deference. See Kisor, 139 S. Ct. at 2415. ANCA issues are properly considered in a Part 16 proceeding. The FAA had authority to consider ANCA issues as a component of its analysis of the County’s compliance with its grant assurances. 2. Grandfathering The County contends the Associate Administrator’s deter- mination that Lantana Airport’s jet restriction was not grandfa- thered under ANCA was arbitrary, capricious, unsupported by substantial evidence, and not in accordance with the law. It argues the jet restriction has been continuously “in effect” since 1973, ei- ther because: (1) the 1988 ordinance didn’t repeal the restriction or (2) even if it did, the restriction’s “formal codification status is irrelevant” and the County’s consistent enforcement of it is all that matters. The FAA replies that the 1988 ordinance did repeal the jet restriction and that ANCA’s text shows “the grandfather clause does not apply to informal county practices implemented over a legislative repeal” because ANCA elsewhere requires formal and operative documents when using the phrase “in effect.” As we have noted, ANCA doesn’t apply to restrictions that were in effect before October or November 1990. See 49 U.S.C. § 47524(c)(1) (making ANCA applicable to “airport noise or access restriction[s] on the operation of stage 3 aircraft not in effect on USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 31 of 45 21-10771 Opinion of the Court 31 October 1, 1990”); id. § 47524(d) (requiring a small subset of air- port noise or access restrictions to be “in effect on November 5, 1990” instead); Airport Compliance Manual § 13.14(b). So if the 1973 jet restriction has in fact been in continuous effect for 49 years, as the County argues, it would be grandfathered under ANCA. If there was a break in the restriction’s effectiveness, how- ever — for example, if it was repealed and then reenacted after the effective date of ANCA in 1990 — the restriction would not enjoy grandfather protection. With that in mind, we address the County’s first argument, which is that the 1988 ordinance didn’t repeal the 1973 regulation establishing the jet restriction. It’s easy to address. The 1988 or- dinance explicitly states that it “supercedes (sic) and repeals all air- port regulations adopted on or before October 27, 1987.” The 1973 jet restriction, which was adopted by the Board to regulate noise at Lantana Airport, is certainly an airport regulation. And it was certainly adopted by the County before October 1987. So it was certainly within the group of regulations the 1988 ordinance repealed. The 1988 ordinance’s repealer language is clear: it “super- cedes (sic) and repeals all airport regulations adopted on or before October 27, 1987.” Yet, the County argues that the Board “had no intention to repeal the jet restriction” and that Florida law requires us to subordinate the ordinance’s clear language to the Board’s “evident legislative intent.” But to “discern legislative intent,” Florida courts look “first to the plain and obvious meaning of the USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 32 of 45 32 Opinion of the Court 21-10771 [law]’s text.” W. Fla. Reg’l Med. Ctr., Inc. v. See, 79 So. 3d 1, 9 (Fla. 2012). “If that language is clear and unambiguous and con- veys a clear and definite meaning,” they “will apply that unequiv- ocal meaning and not resort to the rules of statutory interpretation and construction.” Id. The language of the 1988 ordinance could scarcely be any clearer or more unambiguous or more definite. It expressly repealed “all airport regulations adopted on or before October 27, 1987,” and it put a comprehensive new airport regu- latory scheme in their place. We have no doubt that the 1973 jet restriction regulation was repealed when the 1988 ordinance said it was. But if we had any doubt, the 1998 resolution would dispel it. Like the 1988 or- dinance did with all airport regulations adopted before October 1987, the 1998 resolution explicitly “supersedes and repeals all Air- port Rules and Regulations adopted before” February 24, 1998. The 1998 resolution’s repeal included the “Rules and Regulations, as adopted by prior Resolutions and codified in the Code of Laws and Ordinances relating to Palm Beach County Government at Appendix B.” Appendix B is where the 1988 ordinance’s compre- hensive framework of airport regulations had been codified. Which means that the 1998 resolution repealed the entire airport regulatory scheme that had been enacted by the 1988 ordinance. The 1998 resolution put into effect a new set of Rules and Regulations for airports, which remain in effect today. See Palm Beach Cnty., Fla., Code of Laws & Ordinances app. B (2022). Those Rules and Regulations include four sections specific to USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 33 of 45 21-10771 Opinion of the Court 33 Lantana Airport. Id. at §§ 12-3 to 12-7. One of those sections, un- der the heading “Use Restrictions,” is the jet restriction: “Pure turbo-jet aircraft and aircraft in excess of 12,500 pounds engaging in air cargo operations are prohibited.” Id. at § 12-6(a). The jet re- striction created by the 1998 Rules and Regulations was a new noise restriction, both legislatively and linguistically. Compare id., with Suppl. App. at 244 (noting that the 1973 regulation, as amended in November 1973, read: “All jet aircraft prohibited and all aircraft weighing in excess of 12,500 pounds engaged in aircraft cargo operations prohibited”). And noise restrictions enacted af- ter ANCA’s 1990 effective date do not get grandfather protection. See 49 U.S.C. § 47524(c), (d). That brings us to the County’s second argument, which is that the 1973 jet restriction was (and is) still “in effect” for ANCA purposes, despite being explicitly repealed, because its “formal codification status is irrelevant.” The County not only admits but insists that for nearly fifty years its practice has been “to enforce the restriction exactly as originally enacted in 1973,” as a “ban on all jet aircraft.” Which means that for the 34 years since the re- striction was repealed by the 1988 ordinance, the County has ig- nored that repeal. And the County argues that doing so has earned it the right to continue to do so. We have seldom, if ever, encoun- tered any other party who has argued that because it has not fol- lowed the law for years, it should not be required to do so now. There’s an obvious reason for the rarity of that argument. It violates a core principle of our government by ignoring the USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 34 of 45 34 Opinion of the Court 21-10771 critical separation of powers rule that it is the executive branch’s job to enforce laws, not to create (or amend) them. See, e.g., Zi- votofsky ex rel. Zivotofsky v. Kerry, 576 U.S. 1, 21 (2015) (noting that it is “the Legislative Branch, not the Executive Branch, that makes the law”); Ohio v. Johnson, 467 U.S. 493, 499 (1984) (“[T]he substantive power to prescribe crimes and determine punish- ments is vested with the legislature.”); United States v. Wiltberger, 18 U.S. 76, 96 (1820) (noting that it “would be dangerous” for a court to treat “a case which is within the reason or mischief of a statute” as being actually “within its provisions, so far as to punish a crime not enumerated in the statute”). But even if we didn’t comment on the audacity of the County’s argument, we do not agree with it. ANCA itself requires more than enforcement without an enacted law for a restriction to be “in effect.” Those are the key words in ANCA. See 49 U.S.C. § 47524(c)(1) (making ANCA applicable to “airport noise or access restriction[s] on the operation of stage 3 aircraft not in effect on October 1, 1990”) (emphasis added); id. § 47524(d) (requiring a small subset of airport noise or access restrictions to be “in effect on November 5, 1990” instead) (emphasis added). We turn now to the Act and its regulations for guidance about the meaning of “in effect.” “The construction of a statute by an agency charged with its administration is entitled to substantial deference from the re- viewing court.” City of Pompano Beach v. FAA, 774 F.2d 1529, 1540 (11th Cir. 1985) (quotation marks omitted). We “must USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 35 of 45 21-10771 Opinion of the Court 35 respect the agency’s findings and conclusions when the question involves an interpretation of a statute that is within the agency’s specialized knowledge and expertise,” and we “will adhere to the principle that the construction of a statute by those charged with its execution should be followed unless there are compelling indi- cations that it is wrong.” Id. (cleaned up). Of course, the agency’s “interpretation of the governing statute, application of that statute to the facts, and conclusion must . . . be reasonable.” Id. And of course, “if we determine — employing traditional tools of statu- tory construction — that Congress has spoken clearly, we do not defer to the agency’s interpretation of the statute, because we must give effect to the unambiguously expressed intent of Con- gress.” Barton v. U.S. Att’y Gen., 904 F.3d 1294, 1298 (11th Cir. 2018) (cleaned up). Although ANCA does use the phrase “in effect,” the provi- sions containing it don’t define what the phrase means. See 49 U.S.C. § 47524(c)–(d). Neither does ANCA’s definition section, see id. § 47522, or the statute’s implementing regulations, see 14 C.F.R. § 161.5. But of some potential help, the regulations do de- fine “Noise or access restrictions”: Noise or access restrictions means restrictions (in- cluding but not limited to provisions of ordinances and leases) affecting access or noise that affect the op- erations of Stage 2 or Stage 3 aircraft, such as . . . a limit, direct or indirect, on the total number of Stage 2 or Stage 3 aircraft operations; . . . and any other limit USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 36 of 45 36 Opinion of the Court 21-10771 on Stage 2 or Stage 3 aircraft that has the effect of con- trolling airport noise. . . . Id. (emphasis added). The County asserts the “but not limited to” language shows that not all restrictions have to be laws. That’s true, as even the listed examples show: a lease is not a law. But just because ANCA doesn’t require a restriction to be a law doesn’t mean it allows a restriction to be completely unwritten. To agree with the County’s position, though, that’s what we’d have to find, because the jet restriction has been continu- ously in effect only if we focus on the County’s asserted unwritten practice of continuously enforcing it. We’d have to ignore both the critical gap between 1988 and 1991 when there was no written restriction and the language of the current restriction, which bans only “pure turbo-jet aircraft” and not all jets as the 1973 restriction did. There are plenty of practical reasons that just can’t be the correct interpretation of ANCA, including notice problems and the potential for abuse: how can pilots avoid being sanctioned for violating, and how can we be sure airport operators aren’t selec- tively enforcing, a restriction that isn’t written and publicly avail- able? Beyond practical considerations, ANCA’s implementing regulations support a conclusion that restrictions must be written. First, the explicit examples in the definition of noise and access re- strictions are, as we noted above, “provisions of ordinances and leases.” 14 C.F.R. § 161.5. Both of those are written documents. USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 37 of 45 21-10771 Opinion of the Court 37 And second, as part of the approval process for new restrictions under ANCA, the regulations require that proponents of new re- strictions provide: A clear, concise description of the proposed re- striction (and any alternatives, in order of preference), including a statement that it will be a mandatory Stage 3 restriction; and where the complete text of the restriction, and any sanctions for noncompliance, are available for public inspection; . . . [and] [t]he pro- posed effective date of the restriction, the proposed method of implementation (e.g., city ordinance, air- port rule, lease, or other document), and any pro- posed enforcement mechanism. . . . Id. § 161.303(c)(2), (5) (emphasis added); see also, e.g., id. § 161.305(a) (requiring the “complete text of the proposed re- striction and any submitted alternatives, including the proposed wording in a city ordinance, airport rule, lease, or other docu- ment, and any sanctions for noncompliance”) (emphasis added). As those regulatory references show, a new noise restriction will not be ANCA-compliant (and therefore can’t be approved) unless it is written — unless it has “text” that the public can inspect and unless it is implemented by a “document” containing its wording. A grandfathered restriction doesn’t have to comply with ANCA or its regulations, of course. And the statutory and regula- tory provisions that set out the grandfather exception don’t con- tain any requirements other than that the “restriction” be “in ef- fect” before the cutoff date. See 49 U.S.C. § 47524(c)–(d); 14 C.F.R. USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 38 of 45 38 Opinion of the Court 21-10771 § 161.7(d)(1)–(2). But it is a common tool of statutory construc- tion to consider what words or phrases mean in nearby statute sections or related regulations. See Regions Bank v. Legal Out- source PA, 936 F.3d 1184, 1192 (11th Cir. 2019) (“The whole-text canon refers to the principle that a judicial interpreter should con- sider the entire text, in view of its structure and of the physical and logical relation of its many parts, when interpreting any particular part of the text. Properly applied, it typically establishes that only one of the possible meanings that a word or phrase can bear is compatible with use of the same word or phrase elsewhere in the statute. Closely related to the whole-text canon is the principle that a word or phrase is presumed to bear the same meaning throughout a text unless context requires otherwise.”) (cleaned up); Cremeens v. City of Montgomery, 602 F.3d 1224, 1227 (11th Cir. 2010) (“We apply the canons of construction to regulations as well as to statutes.”). So we should look at all of ANCA’s implementing regula- tions to understand what the grandfather provisions mean when they say “restriction” and “in effect.” What those regulations demonstrate is that a restriction is in effect when, at minimum, its complete text is written in a document that is available for public inspection and its effective date has passed. See 14 C.F.R. §§ 161.303(c), 161.305(a). We think ANCA and its imple- menting regulations have “spoken clearly” that a restriction must be written to be in effect. See Barton, 904 F.3d at 1298. But even if there were any ambiguity on the point, we would still find the USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 39 of 45 21-10771 Opinion of the Court 39 FAA’s identical conclusion reasonable and defer to it. See City of Pompano Beach, 774 F.2d at 1540. Because restrictions must be written to be “in effect,” the County’s reliance on its practice of enforcing a restriction that at times did not exist — and of enforcing the currently existing re- striction in a way that bans more jets than its words justify — does not prove that Lantana Airport’s jet restriction has been continu- ously in effect since 1973. The gap in the restriction’s effectiveness between 1988 (when the 1973 regulation was repealed by the 1988 ordinance) and at least 1991 (when the County entered the inter- local governmental agreement with Atlantis, which was a written document available to the public that contained a version of the jet restriction) means the restriction isn’t grandfathered under ANCA. B. Grant Assurance 22 Finally, the County contends the Associate Administrator’s conclusion that the County violated Grant Assurance 22 was arbi- trary, capricious, and unsupported by substantial evidence. It ar- gues that in concluding a violation occurred, the Associate Admin- istrator improperly: shifted to the County Forman’s burden to show that the restriction was justified for safety and efficiency rea- sons; did not investigate whether the restriction was justified for safety and efficiency; and did not give a “reasoned explanation for USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 40 of 45 40 Opinion of the Court 21-10771 abandoning” the FAA’s earlier finding that the jet restriction was justified for noise, safety, and efficiency. The FAA responds that the restriction violates Grant Assur- ance 22 because denying airport services in a way that violates a federal law (ANCA) cannot be “reasonable” or “just.” It argues that who had the burden is “immaterial” because the overwhelm- ing evidence shows the restriction wasn’t “justified by noise, safety, or any other concern.” And the FAA asserts that its previ- ous statements did not constitute a definitive agency position be- cause they were “informal or non-final” and, in any event, the agency explained any “change” in position by acknowledging its previous lack of analysis and its recent discovery of the 1988 re- peal. “We will uphold the agency’s decision unless it is arbitrary and capricious, an abuse of discretion, or otherwise contrary to law.” Aerial Banners, Inc. v. FAA, 547 F.3d 1257, 1260 (11th Cir. 2008) (citing 5 U.S.C. § 706). We “do not substitute our own judg- ment for the agency’s about what action is warranted” and “will set aside the FAA’s order on substantive grounds only if the agency relied on improper factors, failed to consider important rel- evant factors, . . . committed a clear error of judgment that lacks a rational connection between the facts found and the choice made,” or “fail[ed] to follow its own regulations and procedures.” Id. (cleaned up). It did none of those things. As we have explained, Grant Assurance 22(a) requires air- port sponsors to make the airport available “for public use on USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 41 of 45 21-10771 Opinion of the Court 41 reasonable terms and without unjust discrimination.” Airport Sponsor Assurances at 10. If sponsors want to establish any re- strictions on an airport’s use, Grant Assurance 22(h) and 22(i) re- quire those restrictions to be “reasonable,” “not unjustly discrimi- natory,” and “necessary for the safe and efficient operation of the airport.” Id. at 10–11. And ANCA requires that new restrictions meet certain “notice, review, and approval requirements.” 14 C.F.R. § 161.3(c); see also 49 U.S.C. § 47524; 14 C.F.R. §§ 161.1 to .505. Whether the current Lantana Airport jet restriction was en- acted in 1991 by the interlocal governmental agreement with At- lantis, in 1992 by the County Director of Airports’ directive, or in 1998 by the Rules and Regulations, it was enacted after the two 1990 effective dates of ANCA. See 49 U.S.C. § 47524(c)(1) (making ANCA applicable to “airport noise or access restriction[s] on the operation of stage 3 aircraft not in effect on October 1, 1990”); id. § 47524(d) (requiring a small subset of airport noise or access re- strictions to be “in effect on November 5, 1990” instead). Because the restriction was enacted after ANCA applied and was not grand- fathered, see supra at 30–39, it had to comply with ANCA’s sub- stantive and procedural regulations. It did not. We agree with the Second Circuit that “actions taken in violation of legal mandates are, by their nature, unreasonable.” Friends of E. Hampton Air- port, 841 F.3d at 153 (considering ANCA in the context of the pro- prietor exception, which requires restrictions to be “reasonable, nonarbitrary, and nondiscriminatory”) (quotation marks USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 42 of 45 42 Opinion of the Court 21-10771 omitted). So the ANCA violation is alone enough to sustain the Associate Administrator’s conclusion that the County violated Grant Assurance 22(a). But the Associate Administrator’s thorough Final Agency Decision goes beyond that violation to explain why none of the other possible justifications for the Lantana Airport jet restriction have merit. The Associate Administrator concluded that the re- striction wasn’t justified by “jet noise,” “aircraft weight,” “cargo operations,” “safety and efficiency,” or environmental impacts. His explanations of why those considerations don’t justify the jet restriction rely on studies that the FAA’s subject-matter expert de- partments conducted during Forman’s earlier Part 13 proceedings and also on various general FAA data reports about aircraft noise, weight, and speed specifications. The Associate Administrator’s conclusions were supported by substantial evidence and were not arbitrary and capricious. See 49 U.S.C. § 46110(c); Aerial Banners, Inc., 547 F.3d at 1260. Although we agree with the County that Forman had the burden to show noncompliance, 14 C.F.R. § 16.23(k), we agree with the FAA that Forman met his burden by demonstrating that the jet restriction made Lantana Airport unavailable for his public use for a noise-based reason that did not comply with (and was not grandfathered under) ANCA. On the other hand, the County had the burden to prove its motion to dismiss, which was based in part on its assertion that the jet restriction did not violate Grant Assur- ance 22, and its affirmative defenses, which included showing that USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 43 of 45 21-10771 Opinion of the Court 43 “the restriction is . . . justified . . . to ensure the safety and efficiency of” Lantana Airport “and the larger Airport System.” Id. Despite bearing the burden on those issues, the County offered no data or studies to support its position that the jet restriction was ever jus- tified based on safety and efficiency. When the County accepted grant money for the Lantana Airport, which it did at least as recently as 2012, it agreed to the grant assurances. Under Grant Assurances 22(h) and 22(i), it was allowed to prohibit jets and heavy aircraft from using Lantana Air- port only if that restriction was necessary for safety or efficiency. Without data or studies to show how it determined the restriction was necessary for those reasons, there was nothing in the record to counterbalance Forman’s and the FAA’s evidence that the re- strictions aren’t justified by noise, safety, efficiency, or other con- cerns. Instead, all the actual, objective, data-driven evidence in the record shows that the restrictions aren’t necessary for safety or ef- ficiency. When we combine that finding with Grant Assurance 22(a)’s requirement that an operator otherwise must “make the airport available,” it’s clear that the County’s jet restriction is a Grant Assurance 22 violation. The Final Agency Decision got it right. Finally, as to the County’s argument that it has relied for nearly fifty years on the FAA’s “prior determinations” that the jet restriction was justified, the Associate Administrator gave a rea- soned explanation for any “change” in the FAA’s position: it had USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 44 of 45 44 Opinion of the Court 21-10771 never before rigorously analyzed the restriction, explained that analysis, or understood the impact of the 1988 repeal. Regardless, the jet restriction could not continue un- changed once the Associate Administrator concluded it wasn’t necessary. The FAA has exclusive authority over our national navigable airspace, 49 U.S.C. § 40103(a)(1), which means it’s re- sponsible for “develop[ing] plans and policy . . . necessary to en- sure the safety of aircraft and the efficient use” of that space, see id. § 40103(b)(1). It “may modify or revoke an assignment [of air- space] when required in the public interest.” Id. So it certainly can decide whether an airport use restriction should be revoked. As long as any change in the FAA’s position on an airport re- striction isn’t based on an impermissible ground like bias, it has the authority to make that change. As it should, because our na- tional air safety depends on it. The Associate Administrator’s conclusion that Lantana Air- port’s jet restriction violates Grant Assurance 22 wasn’t arbitrary and capricious but instead was supported by substantial evidence. 49 U.S.C. § 46110(c); Aerial Banners, Inc., 547 F.3d at 1260. The Associate Administrator considered “important relevant factors” and demonstrated a “rational connection between the facts found and the choice made.” Aerial Banners, Inc., 547 F.3d at 1260 (quo- tation marks omitted). And “the record reveals relevant evidence that a reasonable mind might accept as adequate to support [the] conclusion.” City of Pompano Beach, 774 F.2d at 1539–40 (altera- tion adopted and quotation marks omitted). USCA11 Case: 21-10771 Date Filed: 11/18/2022 Page: 45 of 45 21-10771 Opinion of the Court 45 V. Denial of the Petition for Review For the reasons discussed, on this record we DENY the County’s petition for review.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487772/	Filed 11/18/22 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO BULL FIELD, LLC, et al., B322603 Plaintiffs and Appellants, (Merced County Super. Ct. No. 1CV-02453) v. MERCED IRRIGATION DISTRICT, Defendant and Respondent. APPEAL from a judgment of the Superior Court of Merced County. Brian L. McCabe, Judge. Affirmed. Whitney, Thompson & Jeffcoach, Timothy L. Thompson, Nikole E. Cunningham; McCormick, Barstow, Sheppard, Wayte & Carruth and Scott M. Reddie for Plaintiffs and Appellants. Duane Morris, Thomas M. Berliner, Jolie-Anne S. Ansley; Miller Starr Regalia and Matthew C. Henderson for Defendant and Respondent. _________________________________ Appellants Bull Field, LLC, Barley, LLC and Colburn Hills Ranch, LLC (Appellants) appeal from a judgment denying their petition for a writ of mandate (Petition). Appellants sought an order compelling respondent Merced Irrigation District (District) to sell them surplus surface water for the 2019 water year. Appellants’ farmland is outside the District, but within the same groundwater basin as the District’s service area. The District authorized the sale of surplus water to out-of-district users for 2019 but denied Appellants’ application to purchase such water. The District claimed, and the trial court found, that the District’s general manager denied Appellants’ applications to purchase surplus surface water because the District had a history of difficult dealings with Appellants’ manager. Substantial evidence supports that finding. The District acted within its discretion in making its decision on this ground, and we therefore affirm. BACKGROUND 1. The Parties The District provides irrigation water to farmers within its approximately 164,000 acres of service territory pursuant to its statutory obligations. (See Wat. Code, §§ 20513, 20560.)1 Most of the District’s water comes from the Merced River, which the District distributes through a conveyance system of canals, irrigation ditches, and natural waterways. Appellants Bull Field, LLC and Barley, LLC own or lease land outside the District but adjacent to the District in what the parties refer to as the District’s “sphere of influence.” That 1 Subsequent undesignated statutory references are to the Water Code. 2 sphere encompasses land that is within the same groundwater basin as the District’s service territory.2 The District’s main canal runs through an almond orchard belonging to Appellants that is located outside the District’s boundaries. 2. The District’s Decision to Sell Surplus Surface Water in 2019 When sufficient surface water is available in a particular year, the District’s board may authorize the sale of surplus water to out-of-district users. (§ 22259.) The District decided to offer such surplus water for sale in 2019. The District’s decision was described in a document entitled the “2019 Irrigation Season Water Supply Implementation Plan” (the 2019 Plan), which the District’s board approved in a meeting on March 5, 2019. The approved plan called for out-of-district sales at a transfer price of $100 per acre foot of water. In implementing the 2019 Plan, the District’s objectives were to “[m]aintain equitable service to [District] growers,” “[m]eet [the District’s] reservoir carryover storage goal at the end of the season,” and “[c]ontrol and properly account for all water delivered and conveyed through [the District’s] facilities.” The 2019 Plan also identified various guidelines to achieve these objectives. One of the identified guidelines was “Surface Water 2 Appellant Colburn Hills Ranch, LLC (Colburn) apparently also owns land located within the District. The trial court found that no right by Colburn to purchase surface water distributed within the District was at issue in this case, and that Appellants’ Petition sought only an order compelling the sale of surface water outside the District. Appellants do not dispute that finding on appeal. We therefore refer to “Appellants” generally without distinguishing among them. 3 Allocation Management.” In connection with that guideline, the plan explained that “there is no limiting surface water allocation for the 2019 irrigation season.” The District announced its decision to sell surplus water in a press release issued on March 6, 2019, the day after the board’s meeting. The press release stated that “[t]here will be no restrictions on surface-water allocations this year, and water transfers to lands within [the District’s] Sphere of Influence (SOI) were approved.” The press release also stated that “[g]rowers within [the District’s] SOI may execute water transfer agreements and receive [District] surface water for $100 per acre foot.” 3. Communications Between the District and Appellants Concerning the Sale of Surplus Water On March 7, 2019, the day after the District’s press release, the District’s general manager, John Sweigard, left a telephone message for Appellants’ manager, Michael Thomason. The message stated that Sweigard did not have authorization from the District’s board to sell “transfer water” to Thomason or his entities. Thomason testified that he was surprised by the message because Appellants had not yet submitted any application and Appellants had purchased surplus water from the District for many years without objection or conditions. Despite Sweigard’s message, Thomason submitted applications on behalf of Appellants to purchase surplus water. After Thomason had submitted those applications, Sweigard left a second voicemail message for Thomason stating that the board had not approved 4 transfers to any of Thomason’s entities and that Appellants’ applications would not be approved. Sweigard testified that his reference to the lack of board approval in his two voice messages did not imply that the board was required to approve the decision to deny Appellants’ applications. Rather, Sweigard meant that the board was the District’s “ultimate authority,” but that he, as general manager, was exercising the authority given to him to deny Appellants’ applications. Sweigard testified that he made that decision himself because of the “multiplicity, scope, and repetitive nature of the disputes between the District and [Appellants],” which he stated “take up an undue proportion of expense, staff time, and attention.” Following a subsequent exchange of letters by counsel for Appellants and the District, Appellants filed their Petition on June 14, 2019. 4. Proceedings in the Trial Court The trial court initially set a trial date of September 25, 2019, which it later continued to October 28, 2019. On October 10, 2019, the trial court held a hearing on a discovery dispute related to the District’s unclean hands defense. That defense focused on the District’s claim that, after the District had denied Appellants’ applications to purchase surplus water, Appellants had made unauthorized diversions of water from the District’s main canal. After the hearing, the trial court granted the District’s discovery motion and continued the hearing on Appellants’ Petition to February 28, 2020. On February 14, 2020, just 14 days before the hearing on Appellants’ Petition, Appellants filed an ex parte application seeking a continuance of the hearing. The trial court denied the 5 request. Along with the denial the trial court issued an order directing briefing for the hearing. The order instructed Appellants to file a brief by February 19, 2020, addressing: “[a]ll facts and legal authority supporting their contention that [the District] ‘has a present and ministerial duty to supply water to [Appellants],” and “[a]ll facts and legal authority supporting [Appellants’] contention on whether or not the denial of [Appellants’] water application, as alleged in [the Petition], was made as the result of a proceeding in which by law a hearing is required to be given, evidence is required to be taken and secretion [sic] in the determination of facts is vested in the [District] Board.” Appellants filed their brief on February 19, 2020, and the District subsequently filed a response. The trial court then heard oral argument on February 28, 2020. On May 28, 2020, the trial court issued a 153-page ruling denying Appellants’ Petition. Following an exhaustive review of the written evidence, the trial court found that Appellants had failed to prove that the District had a ministerial duty to sell them surplus water. The trial court also found that the District’s decision to deny Appellants’ applications to purchase surplus water was not arbitrary or capricious. DISCUSSION 1. Appellants’ Petition and this Appeal Are Moot Appellants’ Petition sought an order compelling the District to sell them water pursuant to the District’s 2019 Plan. There is no dispute that the 2019 Plan applied only to the distribution of water for the 2019 water year, which ended in October 2019. Appellants acknowledge that the 2019 season is over. However, they request that this court nevertheless exercise its 6 discretion to consider the appeal because the issues are “capable of repetition yet evading review.” This court has discretion to consider an appeal in a case that is moot if the case “ ‘ “presents an issue of broad public interest that is likely to recur” ’ ” or “ ‘ “when there may be a recurrence of the controversy between the parties.” ’ ” (Rudick v. State Bd. of Optometry (2019) 41 Cal.App.5th 77, 88–89.) The legal issue presented here—whether the District had an obligation to sell surplus water to a particular out-of-district user once its board had approved sales of surplus water—is of public interest and apparently has not been addressed in any reported decision. Moreover, it is conceivable that the same dispute may arise between these same parties in a future water year. We therefore exercise our discretion to consider the merits of the appeal.3 3 Despite acknowledging that their appeal is moot, Appellants devote most of their argument on appeal to the claimed unfairness of the proceedings in the trial court. As alternative relief, Appellants request that, in light of this alleged unfairness, we reverse and remand the case to the trial court for further consideration. The trial court’s procedural decisions are case-specific and present no issue of public importance that is likely to evade review. However, Appellants’ procedural arguments bear upon the deference that we should give to the trial court’s factual findings. As discussed below, in deciding whether District acted in an arbitrary or capricious manner, we review any “foundational” factual findings under the deferential substantial evidence standard. If, as Appellants argue, the trial court in fact unfairly excluded evidence supporting Appellants’ claims, that could affect the fairness and reliability of the trial court’s factual findings. That result could in turn affect whether 7 2. Governing Law and Standard of Review Appellants’ Petition sought a writ of mandate under the authority of Code of Civil Procedure section 1085. That section authorizes a court to issue such a writ “to any inferior tribunal, corporation, board, or person, to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station, or to compel the admission of a party to the use and enjoyment of a right or office to which the party is entitled, and from which the party is unlawfully precluded by that inferior tribunal, corporation, board, or person.” (Code Civ. Proc., § 1085, subd. (a).) To obtain writ relief under this section, a petitioner must show “ ‘(1) a clear, present and usually ministerial duty on the part of the respondent . . . ; and (2) a clear, present and beneficial right in the petitioner to the performance of that duty.’ ” (Santa Clara County Counsel Attys. Assn. v. Woodside (1994) 7 Cal.4th 525, 539–540, quoting Baldwin-Lima-Hamilton Corp. v. Superior Court (1962) 208 Cal.App.2d 803, 813–814.) A writ may issue to correct an agency’s abuse of discretion “whether the action being compelled or corrected can itself be characterized as ‘ministerial’ or ‘legislative.’ ” (Santa Clara County, at p. 540.) However, in either case, mandamus may issue only to compel the performance of an act “which the law specially enjoins.” (Code Civ. Proc., § 1085, subd. (a); Faulkner v. California Toll Bridge Authority (1953) 40 Cal.2d 317, 326.) Thus, mandamus “will not lie to this court can fairly defer to those findings. We therefore consider Appellants’ procedural claims as well as their legal arguments. In light of our disposition, there is no need to consider the propriety of remanding an admittedly moot case to require further proceedings in the trial court. 8 control discretion within the area lawfully entrusted to the administrative agency.” (Faulkner, at p. 326.) In reviewing an agency’s “quasi-legislative” decision, “the trial court does not inquire whether, if it had power to act in the first instance, it would have taken the action taken by the administrative agency. The authority of the court is limited to determining whether the decision of the agency was arbitrary, capricious, entirely lacking in evidentiary support, or unlawfully or procedurally unfair.” (Fullerton Joint Union High School Dist. v. State Bd. of Education (1982) 32 Cal.3d 779, 786 (Fullerton).) On appeal, we review the trial court’s decision de novo under the same standard, except where the trial court made “ ‘foundational factual findings.’ ” (Abatti v. Imperial Irrigation Dist. (2020) 52 Cal.App.5th 236, 250 (Abatti), quoting City of Arcadia v. State Water Resources Control Bd. (2006) 135 Cal.App.4th 1392, 1409.) In that case, the trial court’s findings of fact “ ‘are binding on appeal if supported by substantial evidence.’ ” (Abatti, at p. 250, quoting City of Arcadia, at p. 1409.) 3. The Trial Court Did Not Abuse Its Discretion in Its Procedural Orders Appellants argue that they were deprived of an opportunity to argue all the relevant issues before the trial court issued its ruling on their Petition. Appellants claim that the trial court set a short briefing schedule on limited issues without giving Appellants the opportunity to file a reply brief. They argue that because these limited issues did not include the question of whether Sweigard acted arbitrarily and capriciously in declining to sell them surface water, Appellants believed that this issue would be addressed in a future hearing, and therefore decided not to present all their evidence. Appellants claim that this 9 abbreviated schedule and briefing order therefore deprived them of an opportunity to argue their “arbitrary and capricious” theory. For the same reasons, Appellants claim that the trial court erred in denying their motion for a new trial on the ground of surprise. We find no abuse of discretion in the trial court’s procedural rulings. Appellants’ own conduct caused the abbreviated time for briefing and the consequent lack of a reply brief. As discussed above, after several continuances, the hearing on Appellants’ Petition was scheduled for February 28, 2020. Appellants acknowledge that they intended to have their Petition heard under the rules applicable to noticed motions. This meant that, absent an order specifying a different schedule, their moving papers had to be filed and served 16 court days before the hearing, or by February 4, 2020. (Code Civ. Proc., § 1005, subd. (b); Cal. Rules of Court, rule 3.1300(a).)4 Rather than filing papers supporting their Petition on that date, Appellants waited until February 3, 2020, to seek opposing counsel’s agreement to continue the hearing. When that attempt was unsuccessful, Appellants then waited until February 14th to move ex parte for a continuance. The trial court acted within its discretion in denying the motion for a continuance.5 Appellants’ stated ground for the 4February 12th and February 17th were both court holidays. (See Code Civ. Proc., § 135; Gov. Code, § 6700.) 5 “The granting or denying of a continuance is a matter within the court’s discretion, which cannot be disturbed ‘on appeal except upon a clear showing of an abuse of discretion.’ ” (Foster v. Civil Service Com. (1983) 142 Cal.App.3d 444, 448, quoting People ex rel. Dept. Pub. Wks. v. Busick (1968) 259 Cal.App.2d 744, 749.) 10 continuance was the need to try facts relating to the District’s unclean hands defense, which was based upon Appellants’ alleged diversion of water from the District’s main canal. However, that issue was not new. The District asserted its unclean hands defense in the answer that it filed on July 19, 2019. As mentioned, the defense was also the subject of a motion to compel that the trial court decided on October 10, 2019. Appellants represented in their ex parte request for a continuance that the trial court’s ruling on that discovery motion had the effect of “deeming” the District’s equitable defenses “relevant to the Petition.” Yet at that same October hearing Appellants agreed with the trial court’s proposal to continue the hearing on their Petition to February 28, 2020, without raising any concern about the timing or the need for a trial of factual issues. Appellants did not raise any such concern until they filed their ex parte motion, well after the deadline for filing their prehearing briefs. Thus, the trial court could reasonably have found that Appellants’ continuance request was untimely.6 The trial court also could have reasonably concluded that it would be more efficient to resolve the legal issues raised by Appellants’ Petition before deciding whether any trial on affirmative defenses was necessary. The record suggests that the trial court made such a practical determination. The court ordered briefing on specific legal issues while assuring Appellants that, if facts concerning the District’s equitable defenses then 6Neither the trial court’s written order denying Appellants’ ex parte application nor the transcript of the hearing on that application contains an explanation of the trial court’s reasons for denying the continuance. 11 needed to be tried, the court would set a later hearing “based on both your schedules.” Having denied Appellants’ request for a continuance, the trial court could have simply proceeded to the hearing on Appellants’ Petition without any timely briefing, and then find that Appellants had failed to meet their burden of proof. Instead, the court gave Appellants an opportunity to present their evidence and make their arguments in support of their Petition under an expedited briefing schedule. Appellants complain that the trial court’s order directing the issues for the expedited briefing did not include the issue of whether the District acted in an arbitrary and capricious manner in denying Appellants’ applications to purchase surplus water. But Appellants did not object to the scope of the briefing or seek any clarification of the briefing order, and in fact specifically stated at the ex parte hearing that they had no objection to the trial court’s order upon receiving the court’s assurance that any equitable issues could be tried later. Appellants also did not request any opportunity to later brief additional legal issues, and the trial court gave no indication that it contemplated such additional briefing. Nor did the trial court’s order expressly limit the issues that Appellants could address. At best for Appellants, the order was ambiguous as to whether the trial court intended to limit the scope of the briefing. But Appellants did not seek clarification at the time, and apparently did not feel constrained in the issues that they could address. The brief that Appellants filed in fact included a discussion of the arbitrary and capricious issue under the heading, “[The District’s] Decision To Deny Petitioners’ Water Applications Was Arbitrary, Capricious, Entirely Lacking In 12 Evidentiary Support, Unlawful, And Procedurally Unfair.” Having made no request for further briefing and having addressed the arbitrary and capricious issue themselves in the brief that they filed, Appellants can hardly complain that the trial court then ruled on the issue.7 We therefore reject Appellants’ argument that the trial court unfairly limited the arguments and evidence that Appellants were permitted to present in support of their Petition. Consequently, we also conclude that there is no reason to depart from the substantial evidence standard of review in considering the factual findings underlying the trial court’s ruling. 7 Appellants’ argument that the trial court should have granted a new trial on the ground of “surprise” fails for the same reason. In moving for a new trial, Appellants argued that in light of the trial court’s comments at the February 14, 2020 hearing, Appellants’ counsel “reasonably believed that the issues to be briefed, heard, and decided were limited to the two issues identified by the Court.” In support of that argument, Appellants’ counsel submitted a declaration stating that Appellants “did not submit briefing and evidence on any of those other issues” not identified in the trial court’s order, including “whether the adjudicatory decision by John Sweigard was arbitrary and capricious.” That statement is directly contradicted by Appellants’ brief, which, as mentioned, contained a section addressing precisely that issue. In denying the motion for a new trial, the trial court noted this section of Appellants’ brief as well as the oral argument that Appellants presented on the same issue at the hearing. 13 4. Appellants Failed to Show that a Writ of Mandate Should Issue A. The District Did Not Have a Ministerial Duty to Sell Surplus Surface Water to Appellants Appellants argued below that the District had a ministerial obligation to sell excess water to them and that a writ should issue to compel compliance with this clear obligation. They do not attempt to support that legal argument on appeal. They have therefore forfeited the contention. (Schmidt v. Bank of America, N.A. (2014) 223 Cal.App.4th 1489, 1509.) In any event, the contention is inconsistent with the controlling statute. Section 22259 states that an irrigation district “may” enter into a contract for the sale or lease of surplus water if its board “deems it to be for the best interest of the district.” This language cannot reasonably be interpreted to impose a mandatory duty on the District to sell surplus water to Appellants. The term “may” plainly means that the District may exercise discretion in determining whether to enter into a contract to sell surplus water. (See Glendale City Employees’ Assn., Inc. v. Glendale (1975) 15 Cal.3d 328, 344 (Glendale) [“ ‘The critical question in determining if an act required by law is ministerial in character is whether it involves the exercise of judgment and discretion’ ”].) In Abatti, the court interpreted several provisions of the Water Code that contain similar language. The appellant in that case argued that sections 22252.1 and 22252.3 require an irrigation district to provide notice and take into account the appellant farmers’ “ ‘beneficial needs’ ” when there is an expected water shortage. (Abatti, supra, 52 Cal.App.5th at p. 278.) The 14 court rejected the argument, noting that the statutes at issue use the term “may” in describing a district’s obligations. The court explained that both sections “use the term ‘may,’ not ‘shall’ or ‘must,’ and both confirm that they place no limitation on a district’s power to control water distribution. Thus, these statutory provisions permit, but do not require, compliance with their irrigation application procedures.” (Id. at pp. 278–279.) Section 22259 similarly uses the term “may” rather than “shall” or “must.” The only limitation that section 22259 imposes is that a district’s board must find that the sale or lease of surplus water is in the district’s best interest. That section does not state that, once a board has made such a decision, an irrigation district must sell to all or any prospective purchasers. It states that the district “may” do so. Thus, there is no mandatory statutory obligation for an irrigation district to sell surplus water in any particular circumstance. Appellants do not cite any other statute, regulation or District rule establishing such a mandatory obligation. The decision whether and to whom to sell such water is therefore committed to the District’s discretion. B. The District Did Not Abuse Its Discretion in Declining to Sell Surplus Water to Appellants The conclusion that the District had the discretion to decide whether and when to sell surplus water does not end our analysis. As Appellants correctly point out, mandamus may also issue to correct an agency’s discretionary decision if that decision was made in an arbitrary or capricious manner. (Glendale, supra, 15 Cal.3d at p. 344, fn. 24 [“ ‘While mandamus will not lie to control the discretion exercised by a public officer or board . . . 15 it will lie to correct an abuse of discretion by such officer or board’ ”], quoting Baldwin-Lima-Hamilton Corp. v. Superior Court, supra, 208 Cal.App.2d at p. 823; Fullerton, supra, 32 Cal.3d at p. 786; Fair Education Santa Barbara v. Santa Barbara Unified School Dist. (2021) 72 Cal.App.5th 884, 896 (Santa Barbara) [review of an agency’s legislative determination is “limited to an inquiry of whether the act was arbitrary, capricious, or entirely lacking in evidentiary support”].) However, judicial review of such discretionary decisions is highly deferential. “ ‘Quasi-legislative administrative decisions are properly placed at that point of the continuum at which judicial review is more deferential; ministerial and informal actions do not merit such deference, and therefore lie toward the opposite end of the continuum.’ ” (Santa Barbara, supra, 72 Cal.App.5th at pp. 893–894, quoting Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 575–576.) A reviewing court may issue a writ of mandate that requires legislative or executive action “ ‘to conform to the law,’ ” but it may not “ ‘substitute its discretion for that of legislative or executive bodies in matters committed to the discretion of those branches.’ ” (Michael Leslie Productions, Inc. v. City of Los Angeles (2012) 207 Cal.App.4th 1011, 1026 (Michael Leslie), quoting Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 445.) i. The District had a duty not to act arbitrarily or capriciously The District argues that its decision to deny Appellants’ application to purchase surplus water is not reviewable even under this highly deferential standard. It claims that in offering water to out-of-district purchasers like Appellants, the District 16 was not acting “under any obligation or duty pursuant to its capacity as a governmental entity, but in its capacity as an actor in the private marketplace for its own proprietary purposes.” The District suggests that in this capacity the District’s exercise of its “proprietary discretion” is unreviewable in a writ proceeding and is constrained only by the common law of contract. We reject the argument that the District had no public responsibility as a government agency in making its decision not to sell water to Appellants. The District cites Jenison v. Redfield (1906) 149 Cal. 500 (Jenison), in support of its claim that it owes no duty to sell water to out-of-district users. That case stands for the proposition that the ultimate purpose of an irrigation district is “ ‘the improvement, by irrigation, of the lands within the district.’ ” (Abatti, supra, 52 Cal.App.5th at p. 257, italics added, quoting Jenison, at p. 503.) However, it does not support the conclusion that an irrigation district is permitted to act arbitrarily in selling water to out-of-district users. In Jenison, the court held that a landowner possessing lands both within and without an irrigation district had no right to receive from the district “any portion of his share of water for use upon said land without the boundaries of the district.” (Jenison, supra, 149 Cal. at p. 501.) However, that case was decided well before the Legislature enacted section 22259, which gives irrigation districts the discretion to provide surplus water outside the district. In contrast to that discretionary authority, the court’s decision in Jenison was based on the premise that the water an irrigation district distributes “can be used only for the irrigation of lands within the district, and the irrigation district has no authority to distribute it for any other purpose.” (Id. at 17 p. 504.) Thus, the court in Jenison did not consider any duty that an irrigation district might assume in selling water for use outside the district because it held that the district had no power to do so. Under the plain language of section 22259, an irrigation district has the discretion to sell surplus water outside the district if it decides that it is in its best interest to do so. There is no need to consider here whether a reviewing court could ever interfere with a district’s decision that it had no such surplus water, or, if so, whether the sale of any such water outside the district was in its best interest. Here, the District decided that it had surplus water to sell to out-of-district users. The question therefore is whether the District’s decision about which out-of- district users could purchase such water is unreviewable. In other words, could the District arbitrarily discriminate among the prospective out-of-district purchasers of surplus water on the ground that it was acting in a private capacity? We believe the answer is no. The District is a public agency. (See § 20570 [“It is reaffirmed that [irrigation] districts are state agencies formed and existing for governmental purposes”]; Abatti, supra, 52 Cal.App.5th at p. 257 [“California courts have long held that irrigation districts operate in a public capacity”].) And section 22259 makes clear that a decision whether to enter into a particular contract for the sale of water is within the scope of such an agency’s statutory duties. (See also § 22228 [“A district may contract to perform and perform any agreement with any number of persons or public corporations or agencies for the exchange, transfer, or delivery to or by either or both parties of any water right or water”].) More generally, numerous courts have recognized that a public agency’s decision 18 concerning the award of a contract is a legislative or quasi- legislative act. (See, e.g., Michael Leslie, supra, 207 Cal.App.4th at p. 1020; Santa Barbara, supra, 72 Cal.App.5th at pp. 894–895; SN Sands Corp. v. City and County of San Francisco (2008) 167 Cal.App.4th 185, 191; Marshall v. Pasadena Unified School Dist. (2004) 119 Cal.App.4th 1241, 1253.) In addition, water is of course an important and valuable public resource. (Cf. Abatti, supra, 52 Cal.App.5th at pp. 256– 257 [all property acquired by an irrigation district is held in trust, including water and water rights], citing § 22437.) Under the District’s “proprietary discretion” theory, the District would be immune from judicial review of any decision that it might make concerning which out-of-district users had the right to purchase this important resource, no matter how arbitrary such a decision might be, and even if the decision had nothing to do with the District’s own interests. Thus, for example, under the District’s theory the District could presumably decide to offer water only to out-of-district purchasers who have a particular Zodiac sign or who attended a particular college, free of any judicial oversight. The District has not provided any authority for this type of immunity, and we decline to recognize it. ii. This court may not interfere with a decision of the District based upon the District’s own best interest The conclusion that the District’s alleged arbitrary acts are subject to judicial review does not fully explain the scope of that review. An agency often exercises its discretion within the context of particular rules governing its purpose and authority. Thus, a public entity’s discretion may be limited by law or by its own rules. (See Michael Leslie, supra, 207 Cal.App.4th at p. 1022 19 [an ordinance passed by a municipal corporation within the scope of its authority has the same force over it as a statute]; (Pozar v. Department of Transportation (1983) 145 Cal.App.3d 269, 271 [a writ may issue to direct an agency to follow its own rules when the agency has abused its discretion].) Numerous statutes prescribe the powers and purposes of an irrigation district. Many of those statutes provide such districts with broad authority to accomplish their overall purpose of putting water to “beneficial use.” (§§ 22075, 22076, 22078, 22225, 22228, 22230; see also Abatti, supra, 52 Cal.App.5th at p. 265 [irrigation district has “broad powers” to control and distribute water consistent with the purpose of supporting irrigation and other beneficial uses].) Irrigation districts are also subject to specific statutory limitations on how they distribute water within their districts. (See, e.g., §§ 22250 [water distributed for irrigation purposes must be apportioned ratably to each landowner], 22252 [water shall be distributed “equitably” among those offering to make the required payment], 22257 [districts must establish “equitable rules” for the distribution and use of water].) However, section 22259 is the only statute that specifically applies to the sale of water to out-of-district users.8 8 Section 22252 provides in full that “[w]hen any charges for the use of water are fixed by a district the water for the use of which the charges have been fixed shall be distributed equitably as determined by the board among those offering to make the required payment.” Although Appellants do not make the argument, that statute, read broadly, could apply to water sold to out-of-district users once a board has established a price. However, unlike section 22259, section 22252 refers generally to 20 The only requirement that section 22259 expressly establishes is that a district board must “deem” a decision to provide surplus water outside the district to be “for the best interests of the district.” Thus, by its terms, the section does not limit a district’s decision not to enter into such a contract, even if such a contract might be in the district’s best interest. However, the record shows that the District itself assumed such an obligation. In his declaration submitted in opposition to Appellant’s Petition, Sweigard testified that he had the “authority and discretion” as the District’s general manager to “decide whether or not . . . individual sales are in the District’s best interests, on a case by case basis.” And a board member testified that Sweigard had the authority to deny particular water purchase applications “based on his opinion if it’s in the best interest of the district to do so.” Moreover, absent some other legitimate and compelling circumstance, a decision to refuse an out-of-district offer to purchase surplus water even though the district believed the purchase would be in its own interest may fairly be characterized as arbitrary. Thus, we conclude that the District’s discretion to decline Appellants’ offer to purchase surplus water was at least limited by the requirement that it act in its own best interest. “water” rather than specifically to “surplus water,” and its requirement of equitable distribution to all who offer to pay contradicts the discretion that section 22259 gives to a district board in entering into contracts for the sale of surplus water. We conclude that the more specific statute controls. (See Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1408 [a specific statute controls over a more general one].) 21 Appellants have not identified any other specific limitation on the District’s discretion. Appellants refer to the Sustainable Groundwater Management Act (SGMA, § 10720 et seq.), but they do not identify any particular provision in that act that would require the District to sell them water under any particular circumstance. The District also submitted evidence showing that the District has only voluntary obligations to preserve groundwater and that Appellants’ land falls outside the geographic area of the obligations that the District has assumed. Appellants do not dispute that evidence on appeal. Thus, although the District may have a policy to promote surface water use when available to preserve groundwater, Appellants do not identify any legal requirement establishing when or if the District must exercise its discretion in favor of that policy rather than to further other District objectives. Nor do Appellants identify any internal District rules that required it to sell them surplus water. Appellants point to various District policies and resolutions that establish a general goal of using surface water—including sales to sphere of influence users—to preserve groundwater. But a general goal or policy is far different from a requirement that the District sell water to every out-of-district user applicant, regardless of other circumstances, or to Appellants particularly. That the District had historically done so does not establish the kind of clear legal duty that this court may enforce through a writ of mandate. The District’s 2019 Plan also did not establish such a duty. The plan stated that there would be “no limiting surface water allocation for the 2019 irrigation season.” As the trial court correctly reasoned, this reference to the “allocation” of water concerned in-district users who are entitled to an apportionment 22 of District surface water, absent shortages. (See §§ 22250, 22252.1, 22252.3.) The trial court summarized the undisputed extrinsic evidence supporting the conclusion that the District owed no duty to allocate surplus water to out-of-district users. Appellants do not challenge that evidence on appeal. The minutes of the meeting at which the District’s board approved the 2019 Plan also do not support any duty to sell to Appellants. The minutes simply summarized the 2019 Plan and discussed a general objective to “maintain equitable service to all [District] growers, meet the Boards reservoir carryover storage goal(s), and to control and properly account for all water conveyed through [District] facilities.” That general objective did not create any specific duty toward out-of-district purchasers such as Appellants. Appellants also cite the press release that the District issued announcing the 2019 Plan. Like the plan itself, the press release contained language referring to the lack of restrictions on “surface water allocations.” And, like the language in the plan, this reference concerned allocations to in-district users, not to the rights of out-of-district applicants. The press release also stated that “[g]rowers within [District’s] SOI may execute water transfer agreements and receive [District] surface water for $100 per acre foot.” Even if one assumes that a press release could establish a duty binding on the District, that language did not do so. The press release did not state that the District was obligated to enter into water transfer agreements with each applicant. Any doubt on that score was dispelled by the form agreement itself, which stated that the agreement “is not valid until approved and initialed by [the District].” 23 Thus, in deciding whether to sell surplus water to Appellants, the District’s discretion was limited only by its own internal requirement that it act in its own best interest. Further, as explained below, so long as the District actually made a decision based upon an assessment of that interest, this court may not substitute its judgment for that of the District. In Michael Leslie, the court considered the effect of a Los Angeles city charter provision that permitted the city to “ ‘reject any and all bids or proposals . . . when to do so would be to the advantage of the City.’ ” (Michael Leslie, supra, 207 Cal.App.4th at p. 1022.) After soliciting bids for the operation of golf carts on the city’s golf courses, and after the city’s reviewing department had decided that the plaintiff in that case had submitted the best proposal, the city rejected all the bids it had received and decided to operate the carts itself. (Id. at pp. 1016–1020.) The court held that the city’s decision to reject all bids could not be remedied through mandamus, even though the plaintiff alleged that an unsuccessful bidder sought to improperly influence city decision makers. (Michael Leslie, supra, 207 Cal.App.4th at p. 1025.) The court reasoned that the decision by the city’s reviewing agency and the city council concerning what choice would be to the city’s advantage “was a classic discretionary function” that the court could not second-guess. (Id. at p. 1026.) The court held that a judicial judgment that “self-operation is not to the advantage of the City, and only an award of the concession to [the plaintiff] would be to the advantage of the City” would “exceed the scope of mandamus review.” (Ibid.) In reaching that conclusion, the court in Michael Leslie cited Stanley-Taylor Co. v. Supervisors (1902) 135 Cal. 486 24 (Stanley-Taylor). (See Michael Leslie, supra, 207 Cal.App.4th at p. 1026.) In Stanley-Taylor, our Supreme Court considered the decision of San Francisco’s board of supervisors to reject all bids for a contract to provide the city with certain office forms under a city charter provision that permitted such a decision if “ ‘the supervisors believe that the public interests will be subserved thereby.’ ” (Stanley-Taylor, at pp. 487–488.) The court held that mandamus was not available to review the supervisors’ belief that the public interest would be served by their decision. Because the law vested the board of supervisors with discretion to make that determination, “ ‘the writ of mandate will not lie to divest or mold or otherwise interfere with such discretion.’ ” (Id. at p. 488.) In Stanley-Taylor, our Supreme Court approved the opinion of the lower court in that case, which included the general statement that the “ ‘writ of mandate will lie to correct illegal but not capricious acts.’ ” (Stanley-Taylor, supra, 135 Cal. at p. 488.) As a statement of general principle, this language has been superseded by our Supreme Court’s subsequent explanation that a court may review an agency’s “quasi-legislative” decisions more broadly to determine whether they were “arbitrary, capricious, entirely lacking in evidentiary support, or unlawfully or procedurally unfair.” (Fullerton, supra, 32 Cal.3d at p. 786; see also Glendale, supra, 15 Cal.3d at p. 344, fn. 24 [mandamus will lie to “ ‘correct an abuse of discretion’ ” by a public officer or board]; Manjares v. Newton (1966) 64 Cal.2d 365, 370 [“That mandate will lie whenever an administrative board has abused its discretion is a rule so well established as to be beyond question”].) The court also subsequently distinguished Stanley- Taylor in a case that concerned objective limitations on a 25 government entity’s discretion, noting that in Stanley-Taylor “the board had a right to reject bids according to its own belief as to the public interest.” (Landsborough v. Kelly (1934) 1 Cal.2d 739, 744.) Thus, Stanley-Taylor stands for the more limited but still highly relevant principle that a court considering a petition for writ of mandate may not review an agency’s subjective assessment of interests that are within its discretion to determine.9 That principle controls here. This court may not interfere with the District’s discretionary decision that denying Appellants’ applications to purchase surplus water was in its best interest. We may not substitute our judgment for the District about how its interests would best be served. So long as the District actually exercised such discretion, this court may not issue a writ contravening the District’s decision. 9 Citing Stanley-Taylor, supra, 135 Cal. at page 488, the trial court here formulated a general principle that, as a matter of law, “a writ of mandate will lie to correct illegal, but not capricious rationale determined by an irrigation district board of directors to be in the best interest of the district.” For the reasons discussed above, we disagree with this formulation of the controlling legal standard. However, we agree with the trial court’s specific ruling that only the District itself “has the authority to determine what might be in the best interest of the district.” So long as the District in fact exercised its discretion to determine whether the sale of surplus water was in its interest, a court may not interfere with that determination. 26 iii. The District exercised permissible discretion in deciding not to do business with Appellants As the trial court noted, the District submitted evidence that Sweigard denied Appellant’s application to purchase surplus water because Appellants’ principal, Thomason, was “difficult to do business with and . . . it was in the district’s best interest not to enter into additional contracts with the businesses Mr. Thomason managed.” The trial court found that “[t]he weight of the substantial evidence provided establishes that Mr. Sweigard actually and reasonably believed that Mr. Thomason was difficult to do business with and actually and reasonably believed that it was in the district’s best interest not to enter into additional contracts with the businesses Mr. Thomason managed.” The record supports the trial court’s conclusion. In his declaration, Sweigard testified that he decided that the “District should not sell water to [Appellants] for the out-of-district property in 2019” because it was in the District’s best interest to “limit its involvement and engagement with [Appellants] in an effort to avoid distractions and unnecessary disputes, and to better manage and allocate the District’s limited resources and apply them towards its core mission and duties to its members.” Sweigard identified a number of such disputes with Appellants, including: “disagreements over the nature of the District’s rights to its Main Canal, which runs through [Appellants’] land; disputes as to the District’s right to remove dirt from the area around its Main Canal; [Appellants’] complaints about dust from the District’s operation of and access to its Main Canal; a pipeline [Appellants] installed in the bank of the Main Canal without authorization” and “the use, maintenance, collapse by 27 [Appellants], and replacement of a bridge over the [District’s] Main Canal.” Appellants did not dispute below, and do not deny on appeal, that there were a number of prior controversies between them and the District. As the trial court noted, Appellants themselves submitted evidence concerning past disputes, including Appellants’ claim that the District illegally removed soil from Appellants’ land and their demand that the District build a bridge over its canal on Appellants’ property. In fact, Appellants’ counsel detailed a number of ongoing disputes in one of the letters exchanged with the District in 2019 concerning the District’s decision not to sell them surplus water. On appeal, Appellants attack the District’s proffered reasons as “nonsensical” because none of the prior disputes between the parties concerned the purchase of surplus water and because the District sold Appellants such water in 2017 and 2018 despite the existence of these disputes. These arguments challenge the reasonableness of the District’s decision but not the reasonableness of the trial court’s factual findings that the District in fact decided its best interests would be furthered by denying Appellant’s application to purchase surplus water. Whether this court agrees with the District’s decision is not the issue. The issue is whether the District actually exercised its discretion in deciding not to do business with Appellants. Appellants’ argument does not show that the District must have made its decision on some other ground. The District simply may have wished to avoid the perceived difficulties of dealing with Thomason, regardless of the nature of the prior disputes, and despite the District’s willingness to sell water to Appellants in 28 the past. Because substantial evidence supports the trial court’s findings, we do not disturb them on appeal.10 Appellants also challenge the legitimacy of the District’s decision by arguing that the trial court erred in finding that the District implicitly ratified Sweigard’s actions. That argument fails because Appellants have not provided any support for the claim that the board’s express ratification of Sweigard’s decision to deny Appellants’ application for surplus water was legally required. As discussed above, section 22259 requires only that an irrigation district’s board find that it is in a district’s best interest to sell or lease surplus water, not to decline to do so.11 There is no dispute that the District’s board here actually approved the sale of surplus water to out-of-district users in 2019. Appellants do not identify any additional legal requirement that, once such a decision has been made, a district board must expressly approve 10 Appellants filed a motion requesting that we take judicial notice of the trial court’s findings on a motion for a preliminary injunction in another lawsuit between the parties concerning the District’s claim that Appellants took water from the District without authorization. That claim concerns events that occurred after the District’s denial of Appellants’ application to purchase surplus water that is at issue here. It is therefore irrelevant to the basis for the District’s decision. We deny the request for judicial notice on that ground. 11 The distinction makes sense in light of an irrigation district’s primary purpose to provide surface water to users within the district. Before disposing of surface water by selling to out-of-district users, a board must make the decision that there is such surplus water and that it is in the district’s best interest to sell it outside the district. 29 every contract to every out of district user or ratify every decision not to sell to a particular applicant. Under section 21185, the District’s board had the authority to specify the duties of the District’s employees, including Sweigard. The trial court found that, in his position as general manager, Sweigard had the delegated authority to deny Petitioner’s application for surplus water. That finding is supported by the testimony of Sweigard as well as testimony from a member of the board. Proof that the District’s board ratified Sweigard’s decision was therefore unnecessary. C. Appellant’s estoppel theory does not provide a basis for writ relief Appellants argue that the trial court erred in finding that they had forfeited their estoppel theory by failing to offer legal authority supporting it. Echoing their procedural complaints, Appellants argue that the trial court’s briefing order did not provide them with an opportunity to brief the issue. For the reasons discussed above, we reject this procedural argument. In any event, on appeal Appellants do not provide any ground to conclude that they were prejudiced by the trial court’s forfeiture finding. The trial court’s ruling included a comprehensive substantive analysis rejecting Appellants’ estoppel theory on the merits. Based upon the evidence, the trial court found that the “only act by [Appellants] in reliance on the March 6, 2019 Press Release was to submit 2019 Temporary Water Transfer Application and Agreements after receiving a voice message that any such applications would not be approved.” On appeal, Appellants do not explain how any additional briefing could have changed the trial court’s reasonable conclusion that this minimal alleged reliance did not create any enforceable 30 obligation by the District to grant the application that Appellants submitted. Appellants’ estoppel argument therefore does not provide any basis for reversal. DISPOSITION The judgment is affirmed. The Merced Irrigation District is entitled to its costs on appeal. CERTIFIED FOR PUBLICATION. LUI, P. J. We concur: CHAVEZ, J. HOFFSTADT, J. 31	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487779/	Filed 11/18/22 Montano v. Davila CA2/2 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 SECOND APPELLATE DISTRICT DIVISION TWO CLAUDIA MONTANO, B311432 Plaintiff and Respondent, (Los Angeles County Super. Ct. No. BC695708) v. ELSA DAVILA et al., Defendants and Appellants. APPEAL from the judgment of the Superior Court of Los Angeles County, Monica Bachner, Judge. Affirmed. The Milner Firm and Timothy V. Milner for Defendants and Appellants. Gordon Law, Donald Scott Gordon, and Justin Michael Gordon for Plaintiff and Respondent. ****** A prospective buyer of a commercial building sued the prospective sellers for breach of contract and fraud, and was awarded actual and punitive damages exceeding $200,000 after a multi-day bench trial. The prospective sellers challenge this award, as well as the court’s rejection of their cross-claims. We conclude there was no error, and affirm. FACTS AND PROCEDURAL BACKGROUND I. Facts A. The building In 2017, Elsa Davila (Davila) and Jesus Tapia (Tapia) (collectively, owners) owned a commercial building on Washington Boulevard in Culver City, California. The primary tenant in the building was the El Alteno Sports Bar (the Bar). Claudia Montano (plaintiff) wanted to the buy the Bar, and she spoke with the Bar’s owner about buying the Bar as well as with the owners about buying the building housing the Bar. B. Plaintiff signs an agreement to buy the building Plaintiff and the owners eventually negotiated a Purchase Agreement (the Agreement) for plaintiff to buy the building. Plaintiff’s purchase price under the Agreement was $1.5 million. The owners agreed to finance plaintiff’s purchase as follows: ● Plaintiff would pay the owners a $75,000 down payment, and an additional $25,000 lump sum payment within six months. ● Plaintiff would pay the owners a monthly payment toward the outstanding balance. The initial monthly payment was $6,100 (the sum of the Bar’s $3,100 monthly rent plus $3,000 from plaintiff), but the payment would rise to $8,000 once the tenant ended the lease. 2 ● After two years, plaintiff would be able to obtain a bank loan to pay the owners the remaining balance. ● The owners would hold the deed until the full $1.5 million purchase price was paid in full. Under the Agreement, plaintiff would be responsible for taking care of the building, for supervising the tenant, and for paying all property taxes. The Agreement also had the following, somewhat unusual provision: “In the event a separate party happens to offer [the owners] more than [$1.5 million] for the property it is agreed to give [plaintiff] priority to pay remaining debt within 60 days. If [plaintiff] is unable to pay remaining debt within 60 days and [the owners] are able to sell the property, they will reimburse [plaintiff] all previous debt that was rendered to that point.” (Italics added.) During the period when the Agreement was negotiated, plaintiff was aware that the owners had listed the building for sale with a real estate agent. However, the owners assured plaintiff that their listing agreement had expired or was about to expire, and that they were not “actively marketing” the building for sale. Indeed, Davila acknowledged that this provision was meant to apply only “if by chance somebody came along and made an offer.” On the basis of the owners’ representations, plaintiff signed the Agreement on November 4, 2017. Plaintiff thereafter made the $75,000 down payment, started making monthly payments, and paid the 2017 property tax bill for the building. 3 C. The owners’ continued marketing of the building, sale to a third party, and rescission of the agreement Unbeknownst to plaintiff, the owners’ listing agreement was not about to expire, and the owners continued to actively market the building through their listing agent. On January 29, 2018, the owners signed a contract to sell the building for exactly $1.5 million to an entity called “I’m For Real Estate, LLC.” On February 20, 2018,1 the owners (through their lawyer) sent plaintiff a letter (1) expressing “serious doubts” as to whether the Agreement was “enforceable at all,” and accusing plaintiff of engaging in elder abuse, and (2) “serv[ing] notice that they have received an offer” “for more than [$1.5 million]” (which, as noted above, is inaccurate), and demanding that plaintiff had 60 days (until April 21, 2018) to pay the nearly $1.4 million remaining balance if she wanted to buy the building. (Italics added.) On March 23, 2018—just 31 days later—the owners sent plaintiff a second letter informing her that the Agreement was “rescinded” and refunding her the amounts she had paid under the Agreement, which the owners calculated to be $88,455.90. On April 5, 2018, plaintiff sent a letter to the owners, their listing agent, and the third parties in control of the “I’m For Real Estate, LLC.” In the letter, plaintiff refused to rescind the Agreement, informed the owners she was suing them for civil 1 The court and the parties refer to an earlier, February 2, 2018 letter in which the owners purported to cancel the Agreement. However, the letter is not in the record and, in light of our analysis, the letter would at most provide an alternate route to affirmance; we need not address this alternate route. 4 fraud, and indicated she had filed a report with the police regarding possible criminal fraud. II. Procedural Background A. Plaintiff sues In February 2018, plaintiff sued the owners. In the operative third amended complaint, plaintiff sued for (1) breach of contract, alleging that the owners’ letters repudiated the Agreement by not giving her the full 60 days to pay the outstanding balance, (2) fraud, alleging in pertinent part that the owners had fraudulently induced her to sign the Agreement by concealing that they were going to continue actively marketing the building, (3) quiet title, alleging that the Agreement entitled her to ownership of the building, and (4) specific performance, alleging that the Agreement obligated the owners to convey her the building. B. The owners counter-sue The owners sued plaintiff (1) to quiet title to the building, (2) for slander of title based on her April 5 letter to the third party buyer, (3) for intentional interference with a contractual relation based on the same April 5 letter, (4) for rescission of the Agreement, (5) for elder abuse based on Tapia’s age and illness at the time the Agreement was signed, and (6) for injunctive relief to prevent plaintiff from further contacting the third party buyer. C. Trial The matter proceeded to a multi-day bench trial in October 2019; the parties called nine witnesses. The trial court issued its tentative statement of decision in February 2020. The court found that the owners had breached the Agreement by declaring it to be “rescind[ed]” just 31 days after informing plaintiff she had 60 days to pay the outstanding 5 balance, but found that the contract was not “specifically certain” enough to support the remedy of specific performance. The court also found by clear and convincing evidence that the owners had induced plaintiff to enter into the Agreement by telling the “explicit lie[]” that their listing agreement was about to expire while concealing that they were “going to actively sell the [building].” The court rejected plaintiff’s quiet title claim. The court concluded that plaintiff had suffered $81,483.27 in actual damages, comprised of the amount of rent she would have been allowed to collect from the tenant for 18 months, out-of-pocket expenses of $15,227.37, the property tax bill she paid of $1,455.90, and $9,000 in labor expenses. The court also found by clear and convincing evidence that the owners were “guilty of oppression, fraud or malice” because they had “manipulat[ed]” plaintiff into signing the Agreement so they could “receive a stream of income while deceitfully continuing to market the property”; the court accordingly awarded an additional $163,000 in punitive damages. The court rejected the owners’ remaining counterclaims, finding that they had not established any damages to support their slander of title and intentional interference claims, that injunctive relief was not a separate cause of action, and that they had not established the cause of action for recission.2 The court issued its final statement of decision in January 2021, adding $12,323.07 in prejudgment interest. D. Appeal The owners appealed the tentative statement of decision, but we dismissed their appeal as improper. 2 At trial, the owners had moved to dismiss the cause of action for elder abuse. 6 The owners then timely filed an appeal of the final statement of decision, which is before us now. DISCUSSION The owners argue that the trial court erred in (1) ruling in plaintiff’s favor on her breach of contract and fraud claims, and (2) ruling against them on the slander and intentional interference cross-claims. The sole challenge the owners bring is to the sufficiency of the evidence. As to the trial court’s rulings on plaintiff’s claims (that is, on plaintiff’s breach of contract and fraud claims), we review those rulings for substantial evidence, asking whether the evidence in the record—when viewed in the light most favorable to the trial court’s findings—supports those findings. (King v. State of California (2015) 242 Cal.App.4th 265, 278-279.) As to the trial court’s rulings on the owners’ claims (that is, on their claims for slander of title and intentional interference), we also review those rulings for substantial evidence, but because the owners had the burden of proof below, we may overturn the trial court’s findings only if “‘the evidence compels a finding in favor of [the owners] as a matter of law.’” (Dreyer’s Grand Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th 828, 838.) I. Plaintiff’s Claims A. Breach of contract The owners argue that they should not be liable for breaching the Agreement because plaintiff did not satisfy one of the preconditions to enforcing the Agreement—namely, paying the outstanding balance of the purchase price within 60 days of being told the owners had received an offer to buy the property that exceeded $1.5 million. (Accord, Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1337-1338 [a buyer’s failure to pay money 7 due under a contract justifies the seller terminating that contract].) We reject the owners’ argument. To prevail on a breach of contract claim, a plaintiff must prove “(1) the existence of [a] contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821, italics added.) Here, and contrary to what the owners argue, plaintiff’s failure to pay the outstanding balance is “excused.” As the owners’ February 20, 2018 letter stated (and even if we ignore that third party offer here was for exactly $1.5 million rather than “more than” $1.5 million), plaintiff was not obligated to “perform” by paying the outstanding balance until April 21, 2018. Prior to that date, however, the owners sent their March 23, 2018 letter “rescind[ing]” the Agreement and refunding plaintiff all of her payments under the Agreement. This letter—sent while plaintiff still had 29 days left to pay—constituted an express repudiation of the Agreement. (Ferguson v. City of Cathedral City (2011) 197 Cal.App.4th 1161, 1168 (Ferguson).) Because a repudiation “discharge[s] the other party’s duties to render performance” (Central Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501, 514; Ferguson, at p. 1168; Alphonzo E. Bell Corp. v. Listle (1946) 74 Cal.App.2d 638, 645), plaintiff was excused from making the payment of the outstanding balance and entitled to sue for breach of contract. Contrary to what the owners suggest, plaintiff’s refusal to accept the owners’ repudiation in her April 5, 2018 letter did not somehow negate that repudiation or obligate plaintiff to make payments on an Agreement the owners had by that time unequivocally repudiated. 8 B. Fraud The owners argue that plaintiff did not adduce sufficient evidence of justifiable reliance or damages, thereby undermining any fraud damages and all punitive damages. We reject the owners’ argument. To prevail on a claim based on fraud in the inducement of a contract, a plaintiff must prove (1) a ‘“misrepresentation ([that is, a] false representation, concealment, or nondisclosure),”’ (2) ‘“knowledge of falsity (or “scienter”),”’ (3) ‘“intent to defraud, i.e., to induce reliance,”’ (4) ‘“justifiable reliance,’” and (5) ‘“resulting damage.’” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Substantial evidence supports the trial court’s finding that the owners falsely represented to plaintiff that their listing agreement was about to expire and that they would not be actively marketing the building, while concealing that their listing arrangement was going to continue. Substantial evidence also supports the findings that plaintiff reasonably relied on those representations in deciding whether to enter into the contract because she so testified, and thereafter suffered damages by expending money and labor she would not have otherwise poured into the building but for the fraudulent misrepresentations and concealment. Contrary to what the owners argue, whether plaintiff paid the outstanding balance within 60 days is irrelevant to her fraud claim, which turns on the owners’ conduct in fraudulently inducing her into signing the Agreement in the first place. The owners also argue that plaintiff did not take actions to protect herself, but that is also irrelevant to her fraud claim. 9 II. The Owners’ Counter-Claims The owners next argue that the trial court erred in rejecting their claims for slander of title and intentional interference with contractual relations. Both claims require proof of damages. (Schep v. Capital One, N.A. (2017) 12 Cal.App.5th 1331, 1336; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55.) At the conclusion of the bench trial, the owners conceded they had not proven any damages as to these claims. This concession is fatal to their claims. At oral argument, the owners urged that their attorney’s concession was wrong and that there was, in fact, evidence of damages somewhere in the record (where in the record, they did not say). This is too little, too late. A party cannot concede elements of their claims before the trial court, and then turn around on appeal and argue for the first time that the concessions were wrong; this is classic sandbagging. III. Sanctions Plaintiff seeks sanctions of $56,355.72 against the owners for (1) filing the premature appeal from the initial statement of decision, and (2) filing what they believe to be a frivolous appeal from the final statement of decision solely for the purpose of delay. We agree that the owners jumped the gun in filing their first appeal, and that their second appeal—for the reasons we have laid out above—lacks merit. While the second appeal skirts dangerously close to the line that separates a meritless appeal from a frivolous appeal, it does not cross that line. (See In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650 [sanctions are appropriate and appeal should be found to be frivolous only when “no reasonable attorney could have thought it meritorious.”]) We accordingly decline to impose sanctions. 10 DISPOSITION The judgment is affirmed. Plaintiff is entitled to her costs on appeal. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS. ______________________, J. HOFFSTADT We concur: _________________________, P. J. LUI _________________________, J. CHAVEZ 11	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487774/	Filed 11/18/22 Purvey v. YMCA of Burbank CA2/2 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 SECOND APPELLATE DISTRICT DIVISION TWO JEFFREY NATHAN PURVEY, B309041 Plaintiff and Appellant, (Los Angeles County Super. Ct. v. No. 19STCV03660) YOUNG MEN’S CHRISTIAN ASSOCIATION OF BURBANK, CALIFORNIA, Defendant and Respondent. APPEAL from a judgment of the Superior Court for Los Angeles County, Stephen I. Goorvitch, Judge. Affirmed. Beloryan & Manukyan, Haik A. Beloryan and Vahe Shakhgeldyan for Plaintiff and Appellant. Olson Law Group, Sonali Olson, Joel Eric Witzman and Kathy D’Andrea for Defendant and Respondent. Appellant Jeffrey Nathan Purvey fell on a basketball court owned by respondent Young Men’s Christian Association of Burbank, California (YMCA). Purvey sued YMCA for negligence. The trial court granted summary judgment for YMCA. (Code Civ. Proc., § 437c.) On de novo review, we affirm. YMCA had no duty to protect Purvey from falling, which is an inherent risk of playing basketball. He presented no evidence that YMCA unreasonably increased the risk of a fall by maintaining an overcrowded, debris-filled, dilapidated, worn, uneven floor. The record does not support his unpled, speculative claim that he may have slipped on something. Judgment is proper because there is no triable issue of material fact. FACTS AND PROCEDURAL HISTORY Purvey’s Allegations Purvey’s complaint alleges that on February 19, 2017, YMCA had a hazardous condition “in the vicinity of its basketball courts . . . namely the overcrowding and exceeding of the maximum capacity limitations, as well as the dilapidated, worn out, uneven, old, debris filled, and shifting floors.” Further, “the defective and dilapidated condition of the floors in the gym . . . made Plaintiff’s injury imminent. By allowing such hazardous conditions to persist on its premises, Defendant YMCA’s gross negligence caused Plaintiff to fall and sustain severe injuries.” YMCA’s Summary Judgment Motion YMCA argued that it is entitled to summary judgment because Purvey signed a liability waiver and injury from a fall is a risk he assumed by playing basketball. It is undisputed that Purvey fell while practicing a layup maneuver, and he knows that one can be injured while playing basketball. He alleged that 2 the gym was overcrowded and dilapidated but later claimed the floor was wet. In support of its motion, YMCA offered a “Waiver of Liability, Assumption of Risk, and Indemnity Agreement” (Waiver) signed by Purvey. Purvey testified that he signed the Waiver but did not read it. He understands a release and waiver means that if an operator maintains its facility properly, users “take the risk” when they come to the gym. Purvey knows, from years of experience, that basketball poses a risk of injury; he once sprained an ankle while playing. When he entered the YMCA gym, he saw others playing a basketball game, some distance away. Purvey testified that as he approached the hoop on a layup, “I made sure where I was going had no people.” He took fewer than 10 running steps, then slipped on a “liquid substance.” He did not see anything on the floor, testifying that he would not notice water unless it was a “huge puddle.” None of the 20 to 25 people taking turns shooting at the same hoop slipped or fell. Purvey did not look at the floor after falling to see if it was wet. If there was something wet, he does not know if it was sweat, water, or anything else. It is undisputed that he does not know how long the liquid was there. Purvey’s Opposition Purvey did not dispute signing a sheet at the YMCA front desk. He argued that the Waiver written on the sheet is not enforceable and that YMCA committed gross negligence by failing to properly maintain its facility or mitigate risks. Purvey went to YMCA using a guest pass; he is not a YMCA member. He was greeted by an employee with a sign-in sheet, who did not explain the nature of the document or ask if 3 Purvey had any questions. Purvey signed the sheet but did not receive a copy of it. He previously went to YMCA to play basketball and lift weights, one week before his accident. Purvey testified that the YMCA gym has six basketball hoops along its perimeter. A kids’ league game was taking place on the opposite side of the gym. Spectators stood on the sidelines, though none were on the court itself. Some 20 to 25 people shared the hoop with Purvey, practicing shots. Purvey did layups and jump shots for 20 to 30 minutes before falling. Cynthia Tafolla accompanied Purvey to the YMCA. She recalled that many people were at the gym. She saw a young boy walking and drinking water, but she did not say he spilled it on the court. She saw Purvey go for a layup; he went “pretty high” for his vertical leap, then he was “just falling on the ground.” Asked if she saw Purvey slip, Tafolla answered, “No. I just remember seeing him up in the air.” YMCA used a professional cleaning company that came in when the facility was closed. Steven McCallum, a YMCA worker, did housekeeping as necessary. He estimates the size of the facility as around 350,000 square feet. McCallum was trained to clean and inspect the basketball court. He inspects the floor whenever he walks through, usually three or four times a day, “to make sure it was clean, dry and picked up at all times.” McCallum inspected the basketball court at around 11:00 a.m. on the day Purvey came in. People do not walk around the court carrying water, though McCallum has seen people drinking water while sitting on benches at the sidelines. He agreed that basketball players typically sweat. YMCA staff members do not clean sweat from the floor during play. 4 Brandon Mullen oversees the YMCA housekeeping department. He instructed McCallum to monitor the gym but not on a particular schedule. Mullen acknowledged that water may create a danger on a basketball court. There is signage that no food or drinks are allowed; people can use a drinking fountain in the gym, which prevents spills. YMCA’s Reply YMCA replied that Purvey cannot avoid the Waiver by claiming he failed to receive a copy of it. Purvey did not show YMCA committed gross negligence in maintaining its facility. Purvey testified that he did not see water on the gym floor and the crowds did not cause him to fall. Purvey fell while jumping, an inherent risk of basketball. The Court’s Ruling The court granted YMCA’s motion, after rejecting the declaration of Purvey’s expert for lack of foundation. The court cited alternate grounds for granting the motion: (1) Purvey asserts liability “on a basis not raised in the complaint” and (2) the primary assumption of risk doctrine bars the action. The court did not decide if the Waiver bars suit. The court found that falling is an inherent risk of playing basketball. There is no showing that YMCA increased the risks. There is no evidence Purvey slipped on anything. He never saw liquid before or after falling and assumed he might have slipped on liquid. His speculation does not create a triable issue. Tafolla did not testify that she saw liquid on the floor, only that she saw someone drinking water in the gym. If Purvey encountered 5 sweat dripping from other players, this is an inherent risk.1 Without a showing of water on the floor, the expert’s opinion— based on his “understanding” that Purvey slipped on water— lacks foundation.2 YMCA’s failure to constantly inspect and clean is irrelevant, absent a showing that there was anything on the floor. Crowding in the gym had nothing to do with Purvey’s fall. The court entered judgment for YMCA. DISCUSSION 1. Appeal and Review The judgment is appealable. (Code Civ. Proc., § 904.1., subd. (a)(1).) Summary judgment is appropriate when no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) We independently examine the record to determine if triable issues of fact exist. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.) Evidence presented in opposition to summary judgment is liberally construed. (Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 618.) A negligence claim requires proof of a duty, breach, causation, and 1At the trial court hearing, plaintiff’s counsel “absolutely” agreed that “sweating is a natural part of playing basketball” and sweat may drip on the floor. 2 Purvey did not challenge the ruling in his opening brief, forfeiting any claim of error. We disregard an argument, at the end of his reply brief, about the admissibility of the expert’s opinion. (Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, 761, fn. 4 [“ ‘ “ ‘points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before’ ” ’ ”].) He did not explain why the argument is tardy, and YMCA had no opportunity to respond to it. 6 damages. (Ibid.) The element of duty is a question of law and is amenable to summary judgment. (Knight v. Jewett (1992) 3 Cal.4th 296, 313.) 2. Purvey Asserts Facts Not Raised in His Pleading The trial court wrote that because the complaint “makes reference to ‘debris’ and ‘overcrowding’ but not any liquid . . . to the extent Plaintiff predicates this action on slipping on liquid, the claim is barred.” We agree. Purvey delineated the facts in his complaint: They have nothing to do with slipping on liquid. He did not prove the facts as alleged or amend his complaint to allege different factual bases for his claim. On this basis alone, summary judgment was properly granted. A summary judgment motion allows a defendant “ ‘to show that material factual claims arising from the pleadings need not be tried because they are not in dispute.’ ” (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381; Nieto v. Blue Shield of California Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 74 [pleading determines the scope of summary judgment].) The motion must “negate plaintiff’s theories of liability as alleged in the complaint; that is, a moving party need not refute liability on some theoretical possibility not included in the pleadings.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493.) Purvey alleges that he fell because the YMCA gym exceeded maximum capacity, with “dilapidated, worn out, uneven, old, debris filled, and shifting floors” that made his injury “imminent.” The pleading did not put YMCA on notice that liquid on the floor proximately caused Purvey’s injury. It is true, as Purvey urges, “ ‘we generally construe the pleading broadly.’ ” (Soria v. Univision Radio Los Angeles, Inc. 7 (2016) 5 Cal.App.5th 570, 585.) But “ ‘[a] defendant moving for summary judgment need address only the issues raised by the complaint; the plaintiff cannot bring up new, unpleaded issues in his or her opposing papers.’ ” (Ibid.) Purvey is bound by the rule that “ ‘[a] party may not oppose a summary judgment motion based on a claim, theory, or defense that is not alleged in the pleadings,’ ” which makes his belated claim of liquid on the floor “ ‘irrelevant.’ ” (Jacobs v. Coldwell Banker Residential Brokerage Co. (2017) 14 Cal.App.5th 438, 444.) 3. Assumption of Risk The trial court found Purvey assumed the risk of injury by engaging in an inherently risky sport or activity. “The primary assumption of risk doctrine rests on a straightforward policy foundation: the need to avoid chilling vigorous participation in or sponsorship of recreational activities by imposing a tort duty to eliminate or reduce the risks of harm inherent in those activities. It operates on the premise that imposing such a legal duty ‘would work a basic alteration—or cause abandonment’ of the activity.” (Nalwa v. Cedar Fair, L.P. (2012) 55 Cal.4th 1148, 1156 (Nalwa) [injury on a bumper car ride].) “[A]ctive recreation, because it involves physical activity and is not essential to daily life, is particularly vulnerable to the chilling effects of potential tort liability for ordinary negligence.” (Id. at p. 1157.) The doctrine applies to YMCA. Operators of recreational facilities, including organizations without extensive budgets, “might not easily afford insurance to cover injuries that are inherent risks of the activity; nor could they readily collect large fees from participants to cover that cost. The primary assumption of risk doctrine helps ensure that the threat of litigation and liability does not cause such recreational activities 8 to be abandoned or fundamentally altered in an effort to eliminate or minimize inherent risks of injury.” (Nalwa, supra, 55 Cal.4th at p. 1162.) Though an operator has no duty to eliminate inherent risks, it does “owe participants the duty not to unreasonably increase the risks of injury beyond those inherent in the activity.” (Ibid.) The inherent risk of a recreational activity is determined by “common experience . . . case law, other published materials, and documentary evidence introduced by the parties on a motion for summary judgment.” (Nalwa, supra, 55 Cal.4th at p. 1158.) For example, our Supreme Court determined that being “intentionally hit” by a pitcher is an inherent risk of baseball “accepted by custom,” even if it is forbidden by the rules of baseball. (Avila v. Citrus Community College Dist. (2006) 38 Cal.4th 148, 164–165.) Basketball is an inherently risky sport. (Yarber v. Oakland Unified School Dist. (1992) 4 Cal.App.4th 1516, 1520 [colliding with a wall is an inherent risk of playing basketball].) “An interested person need only turn on one of the week’s many televised basketball games to see players falling, running or being pushed out of bounds onto reporters’ tables, television cameras or fans seated near the court.” (Ibid.) Purvey engaged in an inherently risky activity where participants routinely fall. Primary assumption of risk bars recovery unless he can show YMCA “unreasonably” increased the risk of injury. (Nalwa, supra, 55 Cal.4th at p. 1162.) Purvey did not show he was injured by the crowd, or how the crowd caused his fall; he did not show the floor was uneven, worn, dilapidated, old or filled with debris, as alleged in his complaint. 9 If the unalleged claim of water on the floor was preserved, the record does not support it. Purvey admittedly did not see a substance on the floor, before or after his fall. Tafolla did not say she saw liquid; she saw Purvey jump “pretty high” for his shot but did not see him slip. Seeing people walk around drinking water does not prove it was on the playing surface. Some 20 to 25 people shot baskets at the hoop, and no one slipped on liquid. The cases Purvey cites are distinguishable because they involve fallen substances on floors that store owners could readily see. (Louie v. Hagstrom’s Food Stores, Inc. (1947) 81 Cal.App.2d 601, 604 [puddle of syrup from a broken jar]; Ahern v. S. H. Kress & Co. (1950) 97 Cal.App.2d 691, 692 [12-inch puddle of liquid]; Jones v. Hotchkiss (1956) 147 Cal.App.2d 197, 202 [sawdust]; McKenney v. Quality Foods, Inc. (1957) 156 Cal.App.2d 349, 352 [lettuce leaf]; Ortega v. Kmart Corp. (2001) 26 Cal.4th 1200, 1204 [puddle of milk].) Here, by contrast, no one saw anything on the floor, even when Purvey was sitting on it after falling. The issue is whether YMCA unreasonably increased the risk of a fall. No trier of fact could find YMCA unreasonably failed to promptly clean up a substance when the record shows that no one saw any such substance. If Purvey slipped on drops of sweat from the 20 to 25 other individuals shooting at the same hoop, this is an inherent risk of basketball. Purvey pleads that YMCA committed gross negligence. (See City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 754 [gross negligence is “a ‘ “ ‘want of even scant care’ ” ’ or ‘ “ ‘an extreme departure from the ordinary standard of 10 conduct’ ” ’ ”].) The record shows no evidence of ordinary negligence, let alone gross negligence. 3 DISPOSITION The judgment is affirmed. The Young Men’s Christian Association of Burbank, California, is entitled to its costs on appeal. NOT TO BE PUBLISHED. LUI, P. J. We concur: CHAVEZ, J. BENKE, J.* 3 We need not decide if the Waiver bars Purvey’s claim. * Retired Associate Justice of the Court of Appeal, Fourth Appellate District, Division One, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. 11	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487771/	Filed 11/18/22 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO MARK VALDEZ, B315309 Plaintiff and Appellant, (Los Angeles County v. Super. Ct. No. 19STCV14029) COSTCO WHOLESALE CORPORATION et al., Defendants and Respondents. APPEAL from a judgment of the Superior Court of Los Angeles County. Daniel M. Crowley, Judge. Affirmed. Blair & Ramirez, Oscar Ramirez, Matthew P. Blair and Kirill Lavinski for Plaintiff and Appellant. Yukevich Cavanaugh, James J. Yukevich, Nina J. Kim and David A. Turner for Defendants and Respondents. _____________________________________ Plaintiff Mark Valdez (Valdez) and another man engaged in a fistfight at a gas station owned by defendant Costco Wholesale Corporation (Costco). Defendant Daniel Terrones (Terrones), a Costco gas station attendant, stopped the fight by physically separating the two men. Valdez later sued for negligence and related causes of action, alleging he was injured when Terrones pulled him away from the other man. Costco and Terrones each moved for summary judgment. The trial court granted defendants’ motions.1 Valdez appealed. His primary contention is the court erroneously concluded the Good Samaritan law of Health and Safety Code2 section 1799.102, subdivision (b) shielded Terrones from liability.3 We affirm the judgment. FACTUAL AND PROCEDURAL BACKGROUND I. Facts Valdez and Joseph Lizarraga (Lizarraga), a neighbor, had an ongoing feud. On the afternoon of January 19, 2018, Valdez 1 Where appropriate, Costco and Terrones are referred to collectively as defendants rather than individually by name. 2Undesignated statutory references are to the Health and Safety Code. 3At the hearing on Costco’s summary judgment motion, Valdez’s counsel declined to address the points raised in the motion, instead requesting the trial court to reconsider its prior summary judgment in favor of Terrones. The court declined to do so. Valdez has therefore forfeited any challenges he could have made to Costco’s summary judgment that are not issues in this appeal from Terrones’s summary judgment. (See Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th 657, 698– 704; NBCUniversal Media, LLC v. Superior Court (2014) 225 Cal.App.4th 1222, 1236–1237.) 2 was in his car at a Costco gas station. Lizarraga approached on foot, opened the car door, and began punching Valdez. Terrones was on duty that day in his Costco uniform. Other drivers alerted him to the fight. Terrones yelled at the combatants to stop; they ignored him. Terrones radioed his Costco supervisors for help and ran over to Valdez and Lizarraga. Another gas station attendant phoned the police. By this time, Valdez was out of his car. He and Lizarraga were still struggling with each other. Terrones again demanded the men stop fighting and said the police were on their way. Valdez refused to comply. Fearing Valdez and Lizarraga would hurt each other further, Terrones decided to intervene to stop the fight. He attempted to separate the two men. Valdez maintained his hold on Lizarraga and tried to punch him. Terrones managed to move Valdez away from Lizarraga, ending the fight. Lizarraga then fled in his car, and Valdez drove off after him. Valdez’s account of the incident differed. According to Valdez, by the time Terrones came over, Valdez had placed Lizarraga in a headlock, thereby preventing him from continuing the fight. Valdez was no longer doing anything to Lizarraga except restraining him. Valdez also stated he was still grappling with Lizarraga when Terrones intervened. Valdez told Terrones that he would not release Lizarraga until the police arrived. In response, Terrones attempted to pry the men apart by pulling on Valdez’s shoulder. Terrones ignored Valdez’s requests to let go. As Terrones increased his pressure on Valdez’s shoulder, Valdez “felt and heard a pop” in his “chest/shoulder area” and his “arm gave out.” Lizarraga was able to escape and drive away. Valdez drove after him. Valdez claimed Terrones’s actions aggravated a preexisting shoulder injury. 3 II. Procedural Background Valdez sued defendants for negligence, premises liability, negligent hiring, retention, and supervision, and assault and battery.4 Valdez claimed Costco breached its duty of care to protect him from third party (Lizarraga’s) assaults on its property and Costco’s employee, Terrones, intentionally caused Valdez harm by “prying” him away from Lizarraga. Costco and Terrones separately filed summary judgment motions. Valdez opposed the motions. The trial court held separate hearings on the two motions. The court granted Terrones’s motion, concluding he was immune from liability under section 1799.102, subdivision (b). The court also granted Costco’s summary judgment motion on the ground Valdez failed to show there was a triable issue that the fistfight was foreseeable. The trial court entered judgment for Terrones and Costco. Valdez timely appealed. 4 Lizarraga was also named as a defendant but was never served in the action. 4 DISCUSSION I. Standard of Review on Summary Judgment Summary judgment is appropriate if there are no triable issues of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 618.) A defendant moving for summary judgment has the initial burden of presenting evidence that a cause of action lacks merit because the plaintiff cannot establish an element of the cause of action or there is a complete defense. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853.) If the defendant satisfies this initial burden, the burden shifts to the plaintiff to present evidence demonstrating there is a triable issue of material fact. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, at p. 850.) We must liberally construe the opposing party’s evidence and resolve any doubts about the evidence in favor of that party. (Regents of University of California v. Superior Court, supra, 4 Cal.5th at p. 618.) “ ‘ “We review the trial court’s decision de novo, considering all the evidence set forth in the moving and opposing papers except that to which objections were made and sustained.” ’ ” (Hampton v. County of San Diego (2015) 62 Cal.4th 340, 347.) Whether summary judgment was proper here primarily turns on statutory interpretation. Valdez’s main contention on appeal is Terrones was not a Good Samaritan within the meaning of section 1799.102, subdivision (b) and related statutes as a matter of law when he intervened in the fistfight. The interpretation and application of a statute to an established set of 5 facts are considered questions of law to be reviewed de novo. (Weatherford v. City of San Rafael (2017) 2 Cal.5th 1241, 1247.) II. The Good Samaritan Law of Section 1799.102, Subdivision (b) and Related Statutes Generally, the common law rule is there is no duty to rescue another from harm. (Williams v. State of California (1983) 34 Cal.3d 18, 23.) Nonetheless, even when there is no duty to rescue, if a person decides to render aid as a Good Samaritan, he or she will be under a duty to exercise reasonable care. (Ibid.) However, the California codes contain a number of immunity statutes for Good Samaritans rendering certain types of aid in emergency situations. Among those statutes is Health and Safety Code section 1799.102. It is found in division 2.5 of the Health and Safety Code, entitled, “Emergency Medical Services,” and was enacted as part of the “Emergency Medical Services System and the Prehospital Emergency Medical Care Personnel Act.” (§ 1797 et seq.) Originally, section 1799.102 provided a single, generalized immunity for all persons volunteering aid at the scene of an emergency.5 In 2008, the California Supreme Court interpreted this immunity statute as applying solely to persons rendering medical aid at the scene of a medical emergency. (See Van Horn v. Watson (2008) 45 Cal.4th 322, 331.) The Legislature quickly 5 Section 1799.102, as originally enacted reads: “No person who in good faith, and not for compensation, renders emergency care at the scene of an emergency shall be liable for any civil damages resulting from any act or omission.” However, the “scene of an emergency,” for purposes of this provision, “shall not include emergency departments and other places where medical care is usually offered.” 6 responded with the 2009 amendment that superseded the Court’s holding. (See Verdugo v. Target Corp. (2014) 59 Cal.4th 312, 327.) As amended in 2009, subdivision (b)(2) of section 1799.102 reads: “Except for those persons specified in subdivision (a), [medical, law enforcement, and emergency personnel] no person who in good faith, and not for compensation, renders emergency medical or nonmedical care or assistance at the scene of an emergency shall be liable for civil damages resulting from any act or omission other than an act or omission constituting gross negligence or willful or wanton misconduct. The scene of an emergency shall not include emergency departments and other places where medical care is usually offered.” The purpose embodied in the amendment is “to encourage other individuals to volunteer, without compensation, to assist others in need during an emergency, while ensuring that those volunteers who provide care or assistance act responsibly.” (§ 1799.102, subd. (b)(1).) The statutory scheme that contains section 1799.102, the “Emergency Medical Services” division, includes definitions of various terms. At issue here is section 1797.70, which defines the term “emergency” as “a condition or situation in which an individual has a need for immediate medical attention, or where the potential for such need is perceived by emergency medical personnel or a public safety agency.” III. Statutory Interpretation of Section 1797.70 “Statutory construction begins with the plain, commonsense meaning of the words in the statute, ‘ “because it is generally the most reliable indicator of legislative intent and purpose.” ’ [Citation.] ‘When the language of a statute is clear, we need go no further.’ ” (People v. Manzo (2012) 53 Cal.4th 880, 7 885.) Where the language of the statute is potentially ambiguous, “ ‘[i]t is appropriate to consider evidence of the intent of the enacting body in addition to the words of the measure, and to examine the history and background of the provision, in an attempt to ascertain the most reasonable interpretation.’ ” (Id. at p. 886.) The parties do not dispute the language of section 1797.70 is clear. They disagree, however, on whether it is to be construed as the definition of “emergency” to be used in this case. A. Defendants’ View of Section 1797.70 Defendants contend section 1797.70’s definition of “emergency” should not be used in this case. They reason a different definition should be applied pursuant to section 1797.50, which is also contained in the “Emergency Medical Services” division. Section 1797.50 reads: “Unless the context otherwise requires, the definitions contained in this chapter shall govern the provisions of this division.” Defendants interpret the clause “unless the context otherwise requires” as the Legislature’s express acknowledgment that certain factual situations do not fall within the literal language of section 1797.70. According to defendants, in such factual contexts or “circumstances,” as they appear here, an alternative definition of “emergency” should be used to determine whether rendering aid is appropriate. Defendants point to Bryant v. Bakshandeh (1991) 226 Cal.App.3d 1241, in which a physician claimed he was exempt from liability for a patient’s death under Good Samaritan laws (Bus. & Prof. Code, §§ 2395, 2396), because in providing medical care to the patient he was responding to a medical emergency. (Bryant, at pp. 1244, 1247.) As part of its holding the appellate court defined “ ‘emergency’ ” under the Good 8 Samaritan statutes as “ ‘the existence of an exigency of “so pressing a character that some kind of action must be taken.” ’ ” (Id. at p. 1247; see also Breazeal v. Henry Mayo Newhall Memorial Hospital (1991) 234 Cal.App.3d 1329, 1338 [interpreting Bus. & Prof. Code, §§ 2395, 2396]; Reynoso v. Newman (2005) 126 Cal.App.4th 494, 499–500 [same].) Defendants urge this more expansive definition of “emergency” is properly used in the factual context of a fistfight and brings Terrones within the purview of section 1799.102, subdivision (b). Defendants’ argument is flawed in two respects. First, they misinterpret the meaning of “context” in section 1797.50’s clause, “unless the context otherwise requires,” as referring to the factual context or circumstances presented by a case. However, courts have generally construed the word “context” in that statutory clause as meaning the use of a particular defined term within the statute’s substantive provisions. The pertinent “context” then is the language of the statute, not the underlying facts. (See, e.g., Diamond View v. Herz (1986) 180 Cal.App.3d 612, 617, fn. 4; Hayes v. Commission on State Mandates (1992) 11 Cal.App.4th 1564, 1595; Kizer v. Hillhaven, Inc. (1993) 19 Cal.App.4th 309, 317; Lewis v. Superior Court (1999) 19 Cal.4th 1232, 1249–1250; MCI Communications Services Inc. v. California Dept. of Tax & Fee Administration (2018) 28 Cal.App.5th 635, 647; Rowland v. California Men’s Colony (1993) 506 U.S. 194, 199–200 [113 S.Ct. 716, 121 L.Ed.2d 656].) Moreover, defendants’ view that section 1797.50’s clause enables courts and litigants to look to any definition of “emergency” based on the factual context means section 1797.70’s definition is entirely open-ended. As a result, the definition could be displaced whenever the “context requires,” rendering it 9 meaningless. Section 1797.70 would never be binding because every case arises in a different factual “context” and every party would argue that a different definition of “emergency” is therefore required. Additionally, section 1797.70’s definition of “emergency” is a threshold gateway for limiting the general, default rules of liability for negligence, and courts generally shy away from interpreting statutes in a way that construes immunities more broadly than the Legislature specifies. (E.g., Emery v. Emery (1955) 45 Cal.2d 421, 430 [“Exceptions to the general principle of liability . . . are not to be lightly created”]; Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 183 [same].) B. Valdez’s View of Section 1797.70 As discussed, section 1797.70 defines the term “emergency” as “a condition or situation in which an individual has a need for immediate medical attention, or where the potential for such need is perceived by emergency medical personnel or a public safety agency.” Valdez contends section 1797.70’s definition of “emergency” should be used, but it does not reach the facts of this case. Valdez reasons the fistfight does not qualify as an “emergency” because there was no evidence either he or Lizarraga had “ ‘a need for immediate medical attention’ ” when Terrones intervened. Consequently, Valdez argues, section 1799.102, subdivision (b) does not apply to shield Terrones from liability. Although we agree that section 1797.70’s definition of emergency is to be used here, we also conclude it applies to the fistfight, such that Terrones was immune from liability as a Good Samaritan. 10 The undisputed facts showed Valdez and Lizarraga had a history of mutual hostility, which erupted into violence when Lizarraga suddenly attacked Valdez and a fistfight ensued. The men ignored Terrones’s repeated demands to stop. Based on Valdez’s account, punches were thrown; he acknowledged Lizarraga struck him in the head several times. Valdez gained the upper hand by placing Lizarraga in a headlock and refusing to release him. The fight did not end until Terrones separated the two men. The existence of an emergency is tested objectively. (Bryant v. Bakshandeh, supra, 226 Cal.App.3d at p. 1247.) When Terrones saw the fistfight, it was reasonable for him to believe he had to stop it because one or both combatants “had a need for immediate medical attention.” First, common knowledge dictates the use of hands or fists can cause great bodily injury (see People v. Aguilar (1997) 16 Cal.4th 1023, 1037–1038), and a closed-fist punch to the head can cause head and neck trauma, loss of consciousness, and even death (see, e.g., People v. McDaniel (2008) 159 Cal.App.4th 736, 749 [facial abrasions, contusions, and scratches, bloody nose, and neck lacerations]; In re Nirran W. (1989) 207 Cal.App.3d 1157, 1159 [dizziness and dislocated jaw]; People v. Kinman (1955) 134 Cal.App.2d 419, 421–422 [black eyes, loose teeth, lacerations, and bruising]; People v. Zankich (1961) 189 Cal.App.2d 54, 58–59 [unconsciousness and death].) Second, Valdez placed Lizarraga in a headlock, tightening his grip in response to Terrones attempts to separate him from Lizarraga. Again, based on common knowledge, headlocks can, at the very least, cause pain and injuries to the neck, shoulders, and back. A headlock or a choke hold can also cut off oxygen 11 leading to a loss of consciousness or even death. (See Unzueta v. Steele (2003) 291 F.Supp.2d 1230, 1239; Zellars v. State (1998) 707 So.2d 345, 347–348 (conc. opn. of Cobb, J.) [“It is an obvious fact that death can result from choking; that could be judicially noted without any medical testimony at all”]; State v. McArthur (2006) 899 A.2d 691, 700 [“We agree with the state that, in its entirety, the evidence established that, in holding her in a headlock, [the defendant] not only intended to cause [the victim] to suffer serious physical injury but did in fact cause her to die”].) As Justice Thurgood Marshall cautioned: “Depending on the position of the [individual’s] arm and the force applied, the victim’s voluntary or involuntary reaction, and his state of health, [the individual] may inadvertently crush the victim’s larynx, trachea, or hyoid. The result may be death caused by either cardiac arrest or asphyxiation.” (City of Los Angeles v. Lyons (1983) 461 U.S. 95, 116–117 [103 S.Ct. 1660, 75 L.Ed.2d 675] (dis. opn. of Marshall, J.).) The undisputed facts established the fistfight at the gas station constituted an emergency as defined by section 1797.70. But for Terrones’s intervention, the fight would have continued. Therefore, by intervening to end the fight, Terrones was rendering emergency nonmedical assistance while at the scene of an emergency under section 1799.102, subdivision (b). C. Terrones Acted In Good Faith Terrones presented evidence he intervened in the fistfight to stop the combatants, restore peace, and prevent further harm. Indeed, as the trial court found, Terrones’s decision to move the combatants apart was not only objectively reasonable but subjectively done in good faith under section 1799.102, subdivision (b). 12 On appeal, Valdez grasps at straws. He merely contends the question of good faith is one “only the trier of fact can determine.” In sum, the trial court did not err in concluding there was no triable issue of fact that Terrones was shielded from liability as a Good Samaritan. IV. Valdez’s Remaining Contentions Concerning Terrones’s Summary Judgment Having reviewed Valdez’s remaining challenges to Terrones’s summary judgment, we dispose of them as follows. Valdez argues there are triable issues that Terrones committed battery on the theory that he acted “with a willful disregard for Valdez rights” in breaking up the fight when Valdez was making a citizen’s arrest of Lizarraga. Because this is a new theory, which Valdez has asserted for the first time on appeal, we refuse to consider it. (Expansion Pointe Properties Limited Partnership v. Procopio, Cory, Hargreaves & Savitch, LLP (2007) 152 Cal.App.4th 42, 54–55 [theories not fully developed or presented to the trial court cannot create a triable issue on appeal]; Delfino v. Agilent Technologies, Inc. (2006) 145 Cal.App.4th 790, 818, fn. 36 [appellate courts will generally decline to consider “newly minted” theories on appeal].) Valdez contends the trial court improperly overruled a series of objections he made to evidence proffered by defendants in support of their summary judgment motions. However, in overruling the objections, the court expressly stated it “does not rely on the underlying evidence objected to.” There are no evidentiary rulings for us to review. 13 DISPOSITION The judgment is affirmed. The parties are to bear their own costs on appeal. CERTIFIED FOR PUBLICATION. LUI, P. J. We concur: CHAVEZ, J. HOFFSTADT, J. 14	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487765/	Case: 22-30458 Document: 00516550451 Page: 1 Date Filed: 11/18/2022 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit FILED November 18, 2022 No. 22-30458 Lyle W. Cayce Clerk State of Louisiana; Louisiana State Racing Commission; Louisiana Horsemen’s Benevolent & Protective Association 1993 Incorporated; Louisiana Thoroughbred Breeders Association; Jockeys Guild Incorporated; State of West Virginia; West Virginia Racing Commission; Bernard K. Chatters; Edward J. Fenasci; Larry Findley, Sr.; Warren Harang, III; Gerard Melancon Plaintiffs—Appellees, versus Horseracing Integrity and Safety Authority, Incorporated; Lisa Lazarus; Steve Beshear; Adolpho Birch; Leonard S. Coleman, Jr.; Joseph De Francis; Ellen McClain; Susan Stover; Bill Thomason; D.G. Van Clief; Federal Trade Commission; Lina M. Kham; Alvaro Bedoya; Rebecca Kelly Slaughter; Christine S. Wilson Defendants—Appellants. Appeal from the United States District Court for the Western District of Louisiana USDC No. 6:22-CV-1934 Case: 22-30458 Document: 00516550451 Page: 2 Date Filed: 11/18/2022 No. 22-30458 Before King, Duncan, and Engelhardt, Circuit Judges. Per Curiam:* The states of Louisiana and West Virginia, joined by various horseracing organizations and other individuals (collectively, “plaintiffs”), sued under the Administrative Procedure Act to enjoin rules approved by the Federal Trade Commission (“FTC”) pursuant to the Horseracing Integrity and Safety Act (“HISA”).1 Agreeing with the plaintiffs, the district court enjoined the rules and the defendants timely appealed. On August 3, 2022, our court granted a partial stay pending resolution of the appeal.2 In a separate case decided today, our court has ruled that HISA is facially unconstitutional under the private non-delegation doctrine. See National Horsemen’s Benevolent and Protective Association v. Black [National Horsemen’s], No. 22-10387, slip op. at 3–4 (5th Cir. Nov. 18, 2022). Accordingly, we REMAND this case to the district court for further proceedings in light of National Horsemen’s. The partial stay is LIFTED. * Pursuant to 5th Circuit Rule 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Circuit Rule 47.5.4. 1 Pub. L. No. 116–260, §§ 1201–12, 134 Stat. 1182, 3252–75 (2020) (codified at 15 U.S.C. §§ 3051–60). 2 The stay suspended the injunction to the extent the district court found the rules generally violated the APA’s notice-and-comment requirements. The stay left the injunction in place, however, as to three specific rules that the district court found exceeded the FTC’s authority under HISA. 2	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494139/	MEMORANDUM DECISION EILEEN W. HOLLOWELL, Bankruptcy Judge. INTRODUCTION The Internal Revenue Service (“IRS”) filed a Proof of Claim for delinquent taxes, which includes a claim for unsecured debt in the amount of $422,390.92. Edward Henne (“Debtor”) contends that this debt was discharged in his previous Chapter 7 case.1 The IRS argues that the Debtor’s taxes were not discharged because the Debtor failed to file returns and therefore the taxes are excepted from discharge pursuant to 11 U.S.C. § 523(a)(1)(B). An evidentiary hearing was held on November 30, 2005, and the parties subsequently submitted Proposed Findings of Fact and Conclusions of Law. The evidence demonstrates that the Debtor failed to file returns under 11 U.S.C. § 523(a)(1)(B). Consequently, his delinquent tax debts were not previously discharged and he does not qualify to be a Chapter 13 debtor because his unsecured debts to the IRS exceed the limit of 11 U.S.C. § 109(e).2 778 FACTS In February 1992, the Debtor became very ill and was paralyzed for a period of time; he underwent therapy for nine months. In December 1997, he injured an artificial leg and required surgery. The Debtor testified that personal problems, including a divorce in 1991, interfered with his ability to file tax returns. The Debtor did not file timely tax returns for the 1992, 1993, 1994, 1995, 1996, 1999, 2000 and 2001 tax years.3 In 1997, the IRS issued statutory notices of deficiency to the Debtor for the 1992 through 1995 tax years due to the Debtor’s failure to file returns for those years. Following its procedures, the IRS first prepared substitute returns; when the Debtor failed to respond to the notice of substitute returns, the IRS issued the statutory notices of deficiency. The notices of deficiency provided the amounts of the tax deficiencies calculated by the IRS and advised the Debtor of his right to seek a redetermination of these deficiencies in the Tax Court. A statutory notice of deficiency provides the taxpayer with a ninety-day period within which to agree with or contest the deficiency. If the taxpayer does not contest the deficiency within the 90-day period, taxes can be assessed pursuant to 26 U.S.C. § 6213. The Debtor did not contest the deficiencies within the ninety-day period. Thereafter, the IRS assessed the Debtor’s taxes, interest and penalties for the 1992 through 1995 tax years. The 1993 tax liabilities were assessed on March 17, 1997; the 1992, 1994 and 1995 liabilities were assessed on November 10,1997. The Debtor testified that he met with an IRS examiner in 1997 concerning his 1992 and 1993 taxes. He also testified that he had subsequent meetings with the IRS examiner. On September 29, 1998, the Debtor submitted Forms 1040 for the 1992 and 1993 tax years to the IRS. On December 13, 1998, the Debtor submitted Forms 1040 for the 1994 and 1995 tax years. The IRS treated the returns as a request for an audit reconsideration. On April 5, 1999, the IRS sent an examination letter to the Debtor requesting verification of items reported on the Debtor’s Forms 1040 for the 1992 through 1995 tax years. The letter was returned to the IRS because the Debtor’s forwarding address order with the post office had expired. On April 21, 1999, the IRS sent the request for verification letter to the Debtor’s new address. The Debtor did not respond to the letter. On August 30, 1999, the IRS sent a letter to the Debtor advising him that because no response to the request for verification of expenses had been received, the IRS determined that no change to the original assessments was warranted and the case was closed. On October 22, 2002, the Debtor filed a Chapter 7 petition. The Debtor sought to 'discharge the taxes owed for the 1992 through 1995 tax years. An Order of Discharge was entered on February 14, 2003. On April 1, 2003, the Debtor filed for relief under Chapter 13. The IRS filed a Proof of Claim on May 4, 2005, which includes unsecured claims of $422,390.92 for the tax years 1992 through 1995 and 1998.4 The taxes were assessed due to the Debtor’s failure to file returns for those years. The 779claim includes interest that had accrued as of the date that Debtor’s Chapter 13 petition was filed. ISSUE Do the Forms 1040 filed by the Debtor in 1998 qualify as “returns” under 11 U.S.C. § 523(a)(1)(B)? STATEMENT OF JURISDICTION The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 157. Venue is proper under 28 U.S.C. § 1409. DISCUSSION The general rule is that a Chapter 7 debtor is discharged from personal liability for all debts incurred before the filing of the petition. See 11 U.S.C. § 727(b). There are, however, exceptions to the general rule of discharge, such as the exception for unpaid taxes under 11 U.S.C. § 523(a)(1)(B). Section 523(a)(1)(B) does not discharge an individual debtor from a debt for taxes if a return was required, and- the return was not filed or “was filed ... after the date on which such return ... was last due ... and after two years before the date of the filing of the petition.” The Bankruptcy Code does not define the term “return,” so courts have constructed a four-prong test, known as the “Beard test,” for determining whether a document will be deemed a return for purposes of § 523(a)(1)(B). See In re Hatton, 220 F.3d 1057, 1060-61 (9th Cir.2000); In re Nunez, 232 B.R. 778, 782 (9th Cir. BAP 1999). To qualify as a return, the document must: (1) “purport to be a return”; (2) “be executed under penalty of perjury”; (3) “contain sufficient data” to calculate the tax liability; and (4) “represent an honest and reasonable attempt to satisfy the requirements of the tax law.” In re Hatton, 220 F.3d at 1060-61 (citations omitted). The IRS concedes the first three prongs have been met in this case. (IRS’s Proposed Conclusions of Law, ¶ 6.) At issue is whether the Debtor’s Forms 1040 for 1992 through 1995, which were filed in 1998 after the IRS had assessed the Debt- or’s tax liability in 1997, “represent an honest and reasonable attempt to satisfy the requirements of the tax law.” Id. The IRS has the initial burden of proving by a preponderance of the evidence that the debt is an exception to discharge under § 523(a)(1)(B), which includes demonstrating that the “honest and reasonable attempt” prong is not satisfied. See U.S. v. Klein, 312 B.R. 443, 448 (S.D.Fla.2004) (citations omitted); In re Hetzler, 262 B.R. 47, 54 (Bankr.D.N.J.2001). The IRS met its threshold burden that no return was filed for purposes of § 523(a)(1)(B). The IRS demonstrated that it prepared substitute returns and assessed deficiencies before the Debtor filed his late Forms 1040 for 1992 through 1995, and that the late returns served no tax law purposes because the Debtor failed to respond to the examination letter requesting verification of items reported on the Debtor’s Forms 1040. Although the IRS met its burden, this Court has previously held that “each case should be reviewed on an individual basis and that the debtor should have an opportunity to make a specific factual showing that his or her late submissions were a reasonable attempt to comply with the tax law.” In re Rushing, 273 B.R. 223, 227 (Bankr.D.Ariz.2001); see also In re Hetzler, 262 B.R. at 54. Determining whether the “honest and reasonable attempt” prong is satisfied involves both objective and subjective components. In re Rushing, 273 B.R. at 227; U.S. v. Klein, 312 B.R. at 454. 780In this case, the post-assessment Forms 1040 were treated as a request for reconsideration and, had the Debtor responded to IRS’s request for verification of items reported on his belated Forms 1040, the submissions may have affected his tas liability. (Transcript at 34,11.18-25; 34,11. 1-25; 35, 11. 1-18.) However, the Debtor did not follow up with the IRS after filing his submissions in 1998, and he failed to respond to the IRS’s requests for supporting documentation.5 The Debtor testified that the IRS examiner was “very helpful” when he met with her in 1997, but he made no effort to contact her or anyone at IRS concerning his post-assessment submissions. (Transcript at 75, 11. 20-21; 78, 11. 20-21.) His lack of action supports the finding that he did not expect his post-assessment forms to affect his tax liability—ie., “to satisfy the requirements of the tax law.” And, in fact, the late submissions had no tax consequences. The Debtor testified that personal problems prevented him from filing his 1992, 1993 and 1994 returns on time. (Transcript at 74, 11. 17-19.) He filed them in 1998. However, he did not offer any specific explanation for the late filing of his 1995,6 1996, 1999, 2000 and 2001 returns.7 Moreover, the delays are measured in years. For example, the Debtor’s 1999 tax return is dated April 8, 2005; his 2000 return is dated May 16, 2004. In addition to his history of late filings, the Debtor also had a pattern of not responding to the IRS’s letters and notices. He testified that he did not receive the IRS letter sent in April 1999, but there were several letters or notices sent to him before that time to which he never responded. The Debtor has not demonstrated that he made an honest and reasonable attempt to comply with the tax law when he filed his Forms 1040 in 1998. The Debtor’s conduct, taken as a whole, precludes any finding that he honestly and reasonably attempted to satisfy the law. As other courts have observed, § 523(a)(1)(B) of the Code is “meant to encourage honest and self-generated reporting by taxpayers, not to immunize non-reporting debtors, who once caught, seek to discharge their discovered tax obligations along with other debts in bankruptcy.” In re Hetzler, 262 B.R. at 54-55, quoting In re Haywood, 62 B.R. 482, 486 (Bankr.N.D.Ill.1986). The Debtor’s 1998 submissions are not “returns” for purposes of § 523(a)(1)(B); consequently, the taxes for 1992 through 1995 were not discharged in the Debtor’s Chapter 7 case. CONCLUSION Because the Debtor’s Forms 1040 filed in 1998 for tax years 1992 through 1995 do not constitute returns for purposes of 11 U.S.C. § 523(a)(1)(B), the Debtor’s tax liabilities for those years were excepted from discharge in his Chapter 7 case. Consequently, the Debtor’s objection to the IRS’s Proof of Claim in his Chapter 13 proceeding is overruled. The IRS’s Proof of Claim includes unsecured claims totaling $422,390.92. To qualify as a debtor under Chapter 13, the 781Debtor’s unsecured debts, at the time of filing, could not exceed the limit of $290,525 imposed by 11 U.S.C. § 109(e). Because the Debtor’s unsecured debts (arising from tax years 1992 through 1995) exceed the limit set forth in § 109(e), he cannot be a Debtor under Chapter 13. Accordingly, the IRS’s Motion to Dismiss the Debtor’s Chapter 18 case is granted. A separate Order will be entered overruling the Debtor’s objection and dismissing the Debtor’s Chapter 13 case. . The Debtor makes this contention in the Amended Joint Pre-Trial Statement. . The dollar amount is adjusted periodically; the limit was $290,525 when the Debtor filed his case on April 1, 2003. . The returns for the 1997 and 1998 tax years were not admitted into evidence. . The Debtor only contends that the taxes assessed for the years 1992 through 1995 were discharged in his Chapter 7 case. He does not contend that the 1998 taxes were discharged. . Nor did the Debtor make any payment or try to arrange for installment payments. . Debtor's counsel believed the return for tax year 1995 had been timely filed and excluded it from his question asking why the returns had been filed late. (Transcript at 74, 11. 13-16.) . The Debtor testified that he broke his leg on Christmas Day in 1997, which may explain a delay in filing his return for that year. However, the 1997 tax return is not a subject of this proceeding.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494141/	MEMORANDUM ON MOTION OF CREDITORS FOR PAYMENT OF ADMINISTRATIVE EXPENSE RICHARD STAIR, JR., Bankruptcy Judge. This contested matter is before the court upon the Motion of Creditors Mims Gordon and Alta Marie Williams for Payment of Administrative Expense (Motion for Administrative Expense) filed by Mims Gordon and Alta Marie Williams on November 16, 2006. Ms. Gordon and Ms. Williams seek payment, pursuant to 11 U.S.C.A. §§ 105(a) and 503(b) (West 2004), of attorneys’ fees incurred in their prosecution of an adversary proceeding against the Debtor, resulting in the denial of his Chapter 7 discharge. As the basis for this relief, they argue that they provided a substantial contribution to the estate by uncovering concealed assets and by obtaining the denial of the Debtor’s discharge. G. Wayne Walls, Chapter 7 Trustee, filed the Objection of Trustee to Motion of Creditors Mims Gordon and Alta Marie Williams for Payment of Administrative Expense on December 18, 2006, and the Debtor filed the Objection of Debtor to Motion of Creditors Mims Gordon and Alta Marie Williams for Payment of Administrative Expense on December 21, 2006. Both the Trustee and the Debtor argue that there is no authorization under the Bankruptcy Code for payment of the attorneys’ fees incurred by Ms. Gordon and Ms. Williams as an administrative expense. A hearing was held on December 21, 2006, at which the parties agreed that the issue before the court was one of law, that an evidentiary hearing was not necessary, and that the issues could be decided on the record and on briefs. An Order memorializing the results of the hearing was entered on December 27, 2006. This is a core proceeding. 28 U.S.C.A. § 157(b)(2)(A), (O) (West 2006). I The Debtor filed the Voluntary Petition commencing his Chapter 7 ease on July 26, 2005. He listed Ms. Gordon and Ms. Williams as creditors, due to a lawsuit filed by them in the Circuit Court for Anderson County, Tennessee. The basis of the lawsuit was a contract entered into on June 7, 2002, between Ms. Gordon and Ms. Williams and the Debtor, doing business as Courtney Builders, providing for the Debt- or to construct a house on their property in Norris, Tennessee, for a purchase price of $189,762.00. In the lawsuit, Ms. Gordon and Ms. Williams contended that the Debt- or received funds in excess of the agreed upon purchase price, in multiple installments, which he co-mingled with monies received for other projects, as well as his personal funds. Additionally, the house was to be completed by December 3, 2002, but it had not been completed by March 2003. Following the Debtor’s bankruptcy filing, on October 27, 2005, Ms. Gordon and Ms. Williams filed a Complaint objecting to the Debtor’s discharge pursuant to 11 885U.S.C.A. § 727(a)(2), (3), (4)(A), (4)(D), and (5) (West 2004) on the grounds that the Debtor improperly transferred money from his business account for personal use, did not keep adequate books and records concerning his financial affairs, did not disclose all of his assets and liabilities and made fraudulent statements in his bankruptcy statements and schedules, failed to comply with requests for documentation by the Chapter 7 Trustee, and failed to satisfactorily explain how he spent the money fraudulently received from his business accounts, including the Plaintiffs’ construction funds.1 The adversary proceeding was tried on August 29, 2006, and on September 26, 2006, the court entered a Judgment, accompanied by a Memorandum, denying the Debtor’s discharge pursuant to § 727(a)(2)(A) and (4)(A) for fraudulently transferring property within the year preceding his bankruptcy case and for knowingly and fraudulently filing bankruptcy statements and schedules that were materially false and contained numerous omissions and misstatements. Ms. Gordon and Ms. Williams were represented by Keith L. Edmiston and the law firm of Hodges, Doughty & Carson, PLLC (Hodges Doughty) in Knoxville, Tennessee, in the prosecution of the adversary proceeding against the Debtor. According to records attached to their Motion, Mr. Edmiston and Hodges Doughty billed 84.15 hours from August 18, 2005, through October 27, 2006, on behalf of Ms. Gordon and Ms. Williams, resulting in total fees of $10,602.75, as well as expenses of $726.18. They are requesting, through the Motion for Administrative Expense, payment of these attorneys’ fees and expenses as a priority administrative expense claim. The Chapter 7 Trustee and the Debtor oppose this request, arguing that there is no statutory basis under § 503 for allowing Ms. Gordon and Ms. Williams an administrative expense because they have not recovered any property for the benefit of the estate, they have not provided a substantial contribution to the case, and they did not obtain the court’s approval prior to proceeding with their adversary proceeding such that their attorneys’ fees fall within the scope of § 503(b)(4). II Ms. Gordon and Ms. Williams seek reimbursement of their attorneys’ fees and expenses pursuant to 11 U.S.C.A. § 503(b), which provides in material part: (b) After notice and a hearing, there shall be allowed administrative expenses ... including— (3) the actual, necessary expenses, other than compensation and reimbursement specified in paragraph (4) of this subsection, incurred by— (B) a creditor that recovers, after the court’s approval, for the benefit of the estate any property trans886ferred or concealed by the debtor; [and] (4) reasonable compensation for professional services rendered by an attorney ... of an entity whose expense is allowable under paragraph (3) of this subsection, based on the time, the nature, the extent, and the value of such services, and the cost of comparable services other than in a case under this title, and reimbursement for actual, necessary expenses incurred by such attorney^] 11 U.S.C.A. § 503(b). A party seeking payment of an administrative expense under § 503(b) must prove by a preponderance of the evidence that it is entitled to such priority treatment. In re Gurley, 235 B.R. 626, 631 (Bankr.W.D.Tenn.1999). Courts have discretion in determining whether to allow administrative expenses under § 503(b). In re Alumni Hotel Corp., 203 B.R. 624, 630 (Bankr.E.D.Mich.1996). Subsections (3)(B) and (4) of § 503(b), when read in tandem, allow a creditor to be paid its reasonable attorneys’ fees as an administrative expense if it recovers property that the debtor transferred or concealed, as long as prior court approval is given for the action. In re Lagasse, 228 B.R. 223, 225 (Bankr.E.D.Ark.1998). To summarize, Section 503(b)(3)(B) requires, first, that the status of the party seeking administrative expense recovery be a creditor of the debtor. Second, the statute requires that the creditor be one, “that recovers ... any property transferred or concealed by the debtor.” Third, the statute commands that the recovery of property transferred or concealed by the debtor be “for the benefit of the estate.” The statute also dictates a fourth requirement, court approval. In re Blount, 276 B.R. 753, 758-59 (Bankr.M.D.La.2002) (footnotes omitted). These sections were intended “to provide a statutory basis for a court to approve actions by a creditor, instead of a trustee, to recover property transferred or concealed by the debtor. The creditor in these cases must be acting for the benefit of the estate as a whole, not just for that creditor individually.” Sanner v. Poli (In re Poli), 298 B.R. 557, 568 (Bankr.E.D.Va.2003). Citing In re Zedda, 169 B.R. 605 (Bankr.E.D.La.1994), and In re Antar, 122 B.R. 788 (Bankr.S.D.Fla.1990), Ms. Gordon and Ms. Williams urge the court to follow those cases in which the court was not required to grant prior approval for the proposed action in order to allow an administrative expense when the creditor’s actions provided a substantial benefit to the bankruptcy estate. The rationale of these cases is that a creditor should be allowed an administrative expense, irrespective of the failure to obtain prior court approval, because “the creditor’s work resulted in a substantial benefit to the estate, and the recovery of property,” Zedda, 169 B.R. at 607, because “[t]o not allow, under the appropriate circumstances, creditors and their counsel to recover fees and costs incurred and paid with relation to this [§ 727] investigation and prosecution of action would have a chilling effect upon creditor participation within a bankruptcy proceeding.” Antar, 122 B.R. at 791. See also Pergament v. Maghazeh Family Trust (In re Maghazeh), 315 B.R. 650, 653-54 (Bankr.E.D.N.Y.2004) (allowing the United States to recover fees incurred in the prosecution of an adversary proceeding commenced by the Chapter 7 trustee to determine the validity and priority of liens, resulting in the discovery of assets likely to produce “more than sufficient funds to pay all creditors of the debtor in full, inclusive of 887interest.”)-2 The cases relied upon by Ms. Gordon and Ms. Williams, while producing an equitable result, ignore the plain language of the statute, which clearly states that attorneys’ fees may be treated as administrative expenses for creditors that recover, after the court’s approval, property that the debtor transferred or concealed for the benefit of the estate. See 11 U.S.C.A. § 503(b)(3)(B). The Supreme Court “ha[s] stated time and time again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there. When the words of a statute are unambiguous, then, this first canon is also the last: ‘judicial inquiry is complete.’ ” Conn. Nat’l Bank v. Germain, 503 U.S. 249, 112 S.Ct. 1146, 1149, 117 L.Ed.2d 391 (1992) (quoting Rubin v. United States, 449 U.S. 424, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981)). The plain language of § 503(b)(3)(B) requires two things that are not present in this case: prior court approval to pursue a recovery action against the Debtor and an action that resulted in the recovery of property that the Debtor transferred or concealed. Ms. Gordon and Ms. Williams argue that their discovery that the Debtor transferred a 1995 Pontiac Firebird shortly before the petition date provided a substantial benefit to the estate, as did their successful opposition to the Debtor’s discharge. While this may be the case, the fact remains that Ms. Gordon and Ms. Williams did not obtain prior approval from the court before commencing their action against the Debtor, nor did this discovery result in any recovery of that property for the benefit of the estate. In fact, in his Brief, the Chapter 7 Trustee states that although he was directed to assets with their assistance “an old 1995 car, potentially non-collectible claims against a spouse or a preference claim, do[es] not reach the category of being substantial contributions.” TR. Brief, at ¶ 5. Based upon the plain language of the statute, prior court approval is a prerequisite to allowance of an administrative claim under § 503(b)(3)(B). This comports with cases within the Sixth Circuit addressing this same issue in the context of a Chapter 7 case. See In re S & T Indus., Inc., 63 B.R. 656, 657 (Bankr.W.D.Ky.1986) (“It is well-settled in this jurisdiction that a creditor cannot obtain compensation for attorney fees from the estate under 11 U.S.C. § 503 if that creditor did not first seek and obtain court approval.”); In re Ky. Threaded Prods., Inc., 49 B.R. 118, 119 (Bankr.W.D.Ky.1985) (“It is well settled that pursuant to Section 503(b)(3)(B) and (b)(4), a creditor can be compensated from the estate for attorney fees incurred only after first seeking court approval for the activity to 888be conducted.”)-3 Furthermore, with respect to the “recovery” aspect of the statute, the court agrees with the following analysis of the requirement: [A] denial of discharge action for concealment might give rise to the recovery, by the estate (through the trustee in another proceeding, or even in an action joined with the denial of discharge proceeding), of the property concealed. However, the statutory language does not extend to a situation where the action has ultimately resulted in the estate recovering property (because of the creditor’s participation or involvement). The statute is limited to situations wherein the creditor is “a creditor that recovers.” The connection must be direct. The creditor must be the recovering party; extension to situations where the creditor’s action indirectly or ultimately leads to the recovery of property is contrary to the statute. Blount, 276 B.R. at 763. Ms. Gordon and Ms. Williams also ask the court to use its equitable powers to award them an administrative expense, arguing that it would be inequitable to allow other creditors to share in the benefit of the denial of the Debtor’s discharge and the discovery of concealed or transferred assets and to force them to compete with those creditors for limited funds. They also argue that these actions were duties and obligations of the Chapter 7 Trustee, and had he hired an attorney to perform these same actions, those attorneys’ fees would be administrative expenses. Section 105(a) defines the court’s equitable powers as follows: The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. 11 U.S.C.A. § 105(a). Section 105 provides bankruptcy courts with the ability and “power to take whatever action is appropriate or necessary in aid of the exercise of their jurisdiction.” Casse v. Key Bank Nat’l. Ass’n (In re Casse), 198 F.3d 327, 336 (2d Cir.1999) (citation omitted). Nevertheless, “ § 105(a) is not without limits, may not be used to circumvent the Bankruptcy Code, and does not create a private cause of action unless it is invoked in connection with another section of the Bankruptcy Code.” In re Rose, 314 B.R. 663, 681 n. 11 (Bankr.E.D.Tenn.2004) (citations omitted). The Court’s powers under this section are broad but not unlimited. “While the equitable powers emanating from § 105(a) are quite important in the general bankruptcy scheme, and while such powers may encourage courts to be innovative, and even original, these equitable powers are not a license for a court to disregard the clear language and meaning of the bankruptcy statutes and rules.” Viking Assocs., LLC v. Drewes (In re Olsen), 120 F.3d 98, 102 (8th Cir.1997) (quoting Official Comm. of Equity Sec. Holders *889v. Mabey, 832 F.2d 299, 302 (4th Cir.1987)). Instead, the court may only use § 105 “in furtherance of the goals of the [Bankruptcy] Code.” Childress v. Middleton Arms, L.P. (In re Middleton Arms, L.P.), 934 F.2d 723, 725 (6th Cir.1991). As discussed, the Bankruptcy Code expressly provides as a condition precedent to a creditor’s recovery under § 503(b)(3)(B) prior court approval and a recovery of property. Neither of these requirements are present here. The court cannot utilize § 105(a) to rewrite the plain language of § 503(b)(3)(B). Those cases awarding administrative expenses despite the wording of the statute did so based upon the premise that sometimes heavy workloads prevented trustees from investigating each and every possible lead and not allowing creditors who “undertake the burden, financially and otherwise, of investigating the financial affairs of the debtor for the purposes of uncovering undisclosed assets as well as prosecuting causes of action which maintain the integrity” of the court to “recover fees and costs incurred and paid with relation to this investigation and prosecution of action would have a chilling effect upon creditor participation within a bankruptcy proceeding.” Antar, 122 B.R. at 791. The court disagrees with this premise. As stated, by the Lagasse court, The Court is not unduly concerned that denial of the fees might discourage lawsuits such as these or cooperation with the trustee to locate assets. In filing an objection to discharge, the creditor receives a specific and measurable benefit by successfully pursuing an objection to discharge, whether or not fees are awarded for pursuing or settling the objection to discharge because the debt becomes collectible after the bankruptcy. Further, cooperation and assistance in discovering assets along with the trustee benefits the creditor by making more assets available for distribution to them. Lagasse, 228 B.R. at 225. Because the statutory requirements set forth in 11 U.S.C.A. § 503(b)(3)(B) and (4) have not been satisfied, the Motion for Administrative Expense filed by Ms. Gordon and Ms. Williams will be denied. . The adversary proceeding, number OS-3186, also sought a determination that the debt owed to Ms. Gordon and Ms. Williams was nondischargeable pursuant to 11 U.S.C.A. § 523(a)(2), (4), and/or (6) (West 2004), compensatory damages in the amount of no less than $250,000.00 for negligence, intentional misrepresentation, fraud, outrageous conduct, deceit, conversion, breach of contract, and violations of the Tennessee Consumer Protection Act for actions with respect to a contract between the parties for the construction of a house, along with treble damages, punitive damages, and attorneys' fees, and allowance of an administrative claim for the attorneys' fees incurred by Ms. Gordon and Ms. Williams. Pursuant to the Pretrial Order entered on April 7, 2006, only the § 727(a) issues were tried, as the court bifurcated the objection to discharge from the request for a determination of dischargeability and other requested relief. . In their brief, Ms. Gordon and Ms. Williams ask the court to find that they substantially contributed to the estate, possibly in reference to § 503(b)(3)(D), which allows a creditor to recover administrative expenses for substantial contributions in a Chapter 9 or Chapter 11 case. See 11 U.S.C.A. § 503(b)(3)(D). Nevertheless, by the veiy wording of the statute, this provision is not applicable in Chapter 7 cases and cannot provide a basis for allowing Ms. Gordon and Ms. Williams an administrative claim. See In re Hackney, 351 B.R. 179, 201 (Bankr.N.D.Ala.2006) (“Congress knew how to create a 'substantial contribution’ administrative expense for cases it believed were appropriate for that benefit. It did that in section 503(b)(3)(D) for Chapter 9 and Chapter 11 cases. It could have done the same in Chapter 7 cases. It did not.”); Blount, 276 B.R. at 757 (“[A]s the case is a chapter 7 case, the 'substantial contribution’ provision of § 503(b)(3)(D) is inapplicable.”); Alumni Hotel Corp., 203 B.R. at 631 (“By its own terms, § 503(b)(3)(D) and (b)(4) apply only in Chapter 9 and Chapter 11 cases.”). . The court also notes that Ms. Gordon and Ms. Williams included within their requested relief in the Complaint commencing the adversary proceeding that they be awarded their reasonable attorneys’ fees and costs as an administrative expense under § 503(b)(3) and (4). Compl. at 9. Without regard to the merits of such a request, they give no explanation, however, why they did not seek approval from the court to proceed as required by § 503(b)(3)(B).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494143/	MEMORANDUM AND ORDER ROBERT SOMMA, Bankruptcy Judge. Before the Court is the Debtor/Plaintiffs request for continuation of previously granted injunctive relief to prevent completion of a pending foreclosure sale of his residence until a final determination of this adversary proceeding. For the reasons stated below, the Court grants the injunc-tive relief requested. Procedural Status On September 27, 2006, the Defendant, Champion Mortgage, A Division of Key Bank, USA, National Association, conducted a foreclosure sale of a Natick condominium unit on which it holds a second mortgage. On October 16, 2006, the Debtor commenced the within Chapter 13 case, scheduling this condominium unit as co-owned with his wife, claiming a Massachusetts homestead exemption with respect thereto and listing Middlesex Savings Bank as first mortgagee with a $99,962 secured claim and the Defendant as second mortgagee with a $99,648 secured claim. On October 25, 2006, the Debtor filed this adversary proceeding seeking to invalidate the foreclosure sale as a fraudulent transfer and as a sale not in compliance with Massachusetts law. In addition, the Debtor seeks to invalidate the sale on account of the buyer’s alleged lack of authority. On October 26, 2006, I held a non-evidentiary hearing on, and granted, the Debtor’s request for an injunction against the Defendant, constraining enforcement of its second mortgage and completion of its foreclosure sale. On November 1, 2006, I conducted an evidentiary hearing to consider whether to maintain the injunction through completion of the adversary proceeding. At that hearing, I took live and affidavit testimony and admitted various 10exhibits. I also authorized the submission of post-hearing briefs, which I have reviewed. Lastly, I continued this injunction through my decision on this matter, which I now render. Background and Findings The Debtor and his wife acquired the subject condominium unit in January 1998 and have since occupied it as their principal residence (“Residence”). In October 2002, they obtained a home equity line from the Defendant (“Line”), secured by a second mortgage on the Residence. Thereafter, the Debtor defaulted on the Line and, in August 2005, made a forbearance agreement with the Defendant resolving that default. In late 2005, the Debtor allegedly defaulted on the forbearance agreement by virtue of a late payment. For the next seven months, the Debtor and the Defendant engaged in extended negotiations regarding a further forbearance. The Defendant acted through an ever-changing cast of loan officers, all of whom extended to the Debtor forbearance reassurances and forbearance terms. None of these officers remained employed by the Defendant or, if employed, assigned to the Debtor’s account through completion of a forbearance agreement. While the Debtor awaited delivery of promised forbearance documents, the Defendant elected to proceed with foreclosure, a right the Defendant had taken care to reserve throughout its negotiations with the Debt- or. That foreclosure commenced in August 2006, culminating in the foreclosure sale which occurred on September 27, 2006 and which is the subject of this adversary proceeding. In conducting the foreclosure, the Defendant did the following (directly or through its agents): (a) gave default and foreclosure notice to the Debtor and his wife by registered mail; (b) published the statutorily required legal notice in a local newspaper; and (c) on two consecutive Sundays, placed a so-called display advertisement in the auction section of The Boston Herald. The Defendant did not do the following: (a) market the Residence; (b) obtain a current appraisal of the Residence; (c) contact any broker for valuation or market information including the availability of prospective buyers or otherwise interested parties; or (d) seek the Debt- or’s permission for a property inspection by prospective buyers or otherwise interested parties. Four qualified bidders attended the foreclosure auction sale. The highest and successful bid was $130,000 subject to the approximately $100,000 first mortgage debt. The auctioneer and the successful bidder signed a memorandum of sale. The closing of the sale has not taken place as a result of my earlier injunction. Taking into account the valuation evidence presented at the hearing, I find that the Residence has a fair market value of at least $325,000. Discussion In deciding this matter, I employ the familiar standard for the issuance of a preliminary injunction, which requires that I weigh four factors: the likelihood that the Debtor will succeed on the merits of his action to invalidate the foreclosure sale or otherwise avoid it; the potential for irreparable harm to the Debtor absent the injunction; the balance of the harm to the Defendant resulting from the injunction and the harm to the Debtor absent the injunction; and the public interest. Gately v. Massachusetts, 2 F.3d 1221, 1224 (1st Cir.1993). I first consider the likelihood of success on the merits. It is well-established that, under Massachusetts law, a foreclosing mortgagee must do more than comply with the 11procedure prescribed by statute. In re Edry, 201 B.R. 604, 606 (Bankr.D.Mass. 1996). The foreclosing mortgagee must also act in good faith and use reasonable diligence in conducting the foreclosure sale. See In re LaPointe, 253 B.R. 496, 499-500 (1st Cir.BAP2000). Here, the Defendant’s reasonable diligence consists of the above-noted publication of a so-called display advertisement in The Boston Herald on two consecutive Sundays. This advertisement is no more than a bulk notice, in one case lumping three properties and in the other case lumping seven properties, and in neither case offering anything other than the address of the to-be-auctioned property and the date, location and time of the auction sale. The testimony in support of this decidedly minimal foreclosure program by the Defendant’s foreclosure lawyer and the auctioneer was not helpful, indeed, seemed more than usually self-serving and, in at least one instance, deliberately obtuse. The gist of their testimony is a somewhat lordly “custom and practice” defense with little recognition or acknowledgment of the mandate of Edry et al. More importantly, the diligence not done is persuasive on the question of success on the merits: no marketing, no appraisal, no real estate broker contact, no inquiry into the market regarding either value or prospective buyers; no inspection effort. Moreover, if the foreclosure sale is completed, significant value will be lost to the estate. Accordingly, I find that there is a substantial likelihood that the Debtor will succeed on the merits of his action to invalidate the foreclosure sale as a consequence of the Defendant’s lack of reasonable diligence in the conduct of that sale. I also find that the injunction standard is met as to the other criteria: the loss of the Debtor’s home would constitute an irreparable harm; that harm far outweighs any harm to the Defendant if I issue the injunction since the Defendant retains its lien, its secured claim and all the rights appurtenant thereto in the Debtor’s Chapter 13 case; and the public interest is implicated where, as here, adherence to the requisites of public transaction is at issue. Conclusion The Debtor meets the standard for the issuance of a preliminary injunction to restrain the Defendant’s enforcement of its lien on the Residence and to constrain its completion of the foreclosure sale of the Residence pending resolution of the within adversary proceeding. Preliminary Injunction For the reasons set forth above, the Court hereby orders and decrees that the Defendant, Champion Mortgage, A Division Key Bank, USA, A National Association, and its agents, owners and employees are hereby enjoined until further order of this Court from selling, conveying, assigning, hypothecating, transferring, pledging, encumbering, expending, alienating, or otherwise disposing of the Debtor’s residence, to wit, Condominium Unit # 11 at 13 School Street in Natick, Massachusetts or from taking any action to complete its previously commenced foreclosure sale with respect thereto or to interfere with the Debtor’s possession and enjoyment thereof.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494145/	DECISION AND ORDER DISALLOWING THE ASSOCIATION’S CLAIMS FOR MONEY DAMAGES FOR TRESPASS ARTHUR N. VOTOLATO, Bankruptcy Judge. Heard on the Debtor’s objection to the claims of Goat Island South Condominium Assoc., Inc.; America Condominium Assoc., Inc.; Capella South Condominium Assoc., Inc.; and Harbor House Condominium Assoc., Inc. (collectively, the “Association”), for damages in the amount of $3.5 Million caused by the Debtor’s alleged trespass on a portion of Association land known as the “Reserved Area”. The parties have filed cross motions for summary judgment, essentially raising two questions: (1) Did the Debtor trespass upon the Association’s property? and (2) If there was a trespass, are the Association’s claims for money damages barred by res judicata in this bankruptcy case? For the reasons discussed below, both questions are answered in the affirmative, resulting in: (1) the granting, in part, of both parties’ Motions for Summary Judgment; and, (2) the disallowance of the Association’s claims for money damages for trespass. BACKGROUND The relevant evidence has been heard and adjudicated in the Rhode Island Superior Court and by the Rhode Island Supreme Court, in two opinions regarding these litigious parties: (1) America Condominium Ass’n, Inc., v. IDC, Inc., 844 A.2d 117, 132-133 (R.I.2004) (America I); and (2) America Condominium Ass’n, Inc., v. IDC, Inc., 870 A.2d 434, 443 (R.I.2005) (America II). Prior to and until December 31, 1994, IDC Properties, Inc., an entity separate from the Debtor but controlled by the same principal, Thomas Roos, owned development rights to the northern portion of the Association property called the Reserved Area. For reasons not known to this Court, nor relevant at this time, IDC Properties failed to timely exercise said development rights. In a post facto effort to undo its error, IDC Properties convened several meetings of the master condominium associations, and certain amendments to condominium documents were approved which purportedly extended its development rights to December 15, 2015. History tells us loudly and clearly that agreement was never reached between the Association and the Roos’ entities as to the validity of the extension approvals. Nevertheless, during 1997 and 1998, in spite of ongoing open hostilities over its alleged ownership and development rights in the Reserved Area, IDC Properties went ahead and constructed an opulent destination banquet facility known as the Regatta Club, right in the middle of the disputed space. IDC Properties then leased the Regatta Club (which became a very popular and profitable business enterprise) to the Debtor, and collected rent of approxi26mately $1.1 Million from 1998 through 2005. In May 1999, after years of acrimony and disagreement between the parties, the Association filed a seven count state court complaint against IDC Properties, Roos individually, and another related entity, IDC Development Corporation, Inc. (collectively, “Properties” 1), seeking “compensatory and exemplary damages as well as declaratory and equitable relief.” America I, 844 A.2d at 119. In January 2000, on cross motions for summary judgment, the Rhode Island Superior Court held that Properties’ attempt to extend its development rights deadline was without merit, and that said rights had expired. On appeal, the Rhode Island Supreme Court affirmed the Superior Court’s conclusion that Properties’ development rights did not extend beyond December 1994, and also ruled that title to the Reserved Area and all improvements thereon “vested in the individual unit owners in fee simple.” Id. at 130-133. In addressing Properties’ request for an accounting and for reimbursement of expenses paid in connection with the Reserved Area after December 1994, as well as its multi-million dollar investment in the Regatta Club, the Supreme Court said: In reviewing defendants’ assertions that plaintiffs should not benefit from defendants’ development of the Newport Regatta Club, we observe that defendants commenced such development with full knowledge of plaintiffs’ claims and after they voluntarily entered into the tolling agreement. Considering that they developed the Reserved Area at a time when they were on notice that their right to do so was in dispute, we conclude that they constructed the parcel at their peril and cannot now contend that equity should prevent plaintiffs from prevailing because of their expenditures. However, with respect to the defendants’ payments of common expenses on the disputed parcels after the declar-ant’s development rights had expired, we concur that to permit the plaintiffs to enjoy the benefits of such expenditures would constitute an inequitable windfall. Id. at 135. On remand to the Superior Court for an accounting, the Supreme Court stated: “This accounting is confined to the common expenses paid by defendants on the master units after the expiration of their development rights on December 31, 1994. It does not include any profits that the defendants may have earned from its operation of the Newport Regatta Club.” Id. at 135, fn. 24. At reargument over title issues in the Reserved Area, the Supreme Court clarified its earlier ruling in America II, stating: We conclude, therefore, that those portions of airspace in the South, West, and North parcels that defendants and their predecessors intended to be master units are common elements because no units were created therein. The land underlying these “units” likewise is part of the common elements. Because no units were validly created, no master limited common elements appurtenant to them could be created. Consequently, these portions of the condominium always were, and remain, common elements. America II, 870 A.2d at 442-3. Essentially the Court held that the Reserved Area historically was, and still is a common element, with title in the individual unit owners, in common ownership, and that this common element was subject to Proper27ties’ development rights only until they expired in 1994. In June 2005, shortly after the decision in America II, IDC Clambakes, Inc., the operating entity of the Regatta Club, filed this Chapter 11 case and, not surprisingly, attempted to relitigate in this Court many of the same issues previously decided adversely to it in the state courts. When those efforts were rejected here, the Debt- or got down to business and began in earnest to address its Chapter 11 duties, i.e., its plan was promptly confirmed, all other creditors and fees were paid in full, and sufficient funds were placed in escrow to pay the Association in full if these claims are allowed as filed. DISCUSSION The resolution of property rights through the law of trespass is determined according to state law, Taggart v. Weinacker’s Inc., 397 U.S. 223, 227, 90 S.Ct. 876, 25 L.Ed.2d 240 (1970), and to establish a trespass in Rhode Island it must be shown that: (1) the alleged trespasser intentionally entered onto the owner’s property; and (2) the owner had rightful, exclusive possession of the property. Smith v. Hart, 2005 WL 374350, 5, (R.I.Super.2005) citing State v. Verrecchia, 766 A.2d 377 (R.I.2001); Berberian v. Avery, 99 R.I. 77, 205 A.2d 579 (1964); one who enters another’s property with consent or privilege is not a trespasser. Ferreira v. Strack, 652 A.2d 965, 969 (R.I.1995). Here, the Association’s trespass claim depends upon whether the Debtor had rightful, exclusive possession of the Reserved Area during the period in question. For the reasons argued by the Association, which are adopted and incorporated herein by reference (See Doc. No. 436 at pp. 6-7 and 13-18), I conclude that the Debtor did not have exclusive possession of the Reserved Area after December 31, 1994. Specifically, the Debtor’s ownership and other rights in the Reserved Area were fully and finally determined by the Rhode Island Supreme Court to be a common element which all condominium owners had the right to use and access in common with all other owners. See America II, 870 A.2d at 442-3. While the Debt- or, by virtue of its ownership of several condominium units, had common access to the Reserved Area, in no way did it have exclusive possession of the Reserved Area after December 31,1994. Pursuant to R.I. Gen. Laws §§ 34-36.1-3.12, 34-36.1-2.07(e) (1956) of the Rhode Island Condominium Act, a unit owner may not unilaterally convey any portion of the common elements of a condominium. See also St. Jean Place Condominium Ass’n v. DeLeo, 745 A.2d 738 (R.I.2000). The statute also provides that common elements may not be conveyed (sold, rented or encumbered) without the vote of at least 80 percent of the association, and there was no such vote or authorization in this case. See St. Jean Condominium Assoc., 745 A.2d at 740-41 (one cannot convey what one does not own). Therefore, since the “lease” between IDC Properties and IDC Clambakes was probably void ab initio, and because neither the lessor nor the lessee had the exclusive right to possession of the Reserved Area, the Debtor (lessee) was indeed a trespasser, as was its lessor. Beyond finding that there was a trespass, however, I cannot agree with the Association arguments regarding its claims for damages. The Debtor correctly points out that the Supreme Court, in America I, has already addressed and ruled upon the Association’s entitlement to damages, and for the reasons advanced by the Debtor (principally res judicata) I conclude that Claim Nos. 16-19 should be and hereby are DISALLOWED. The rulings and orders in America I established the law of 28this case. There, the Rhode Island Supreme Court fashioned a complete and quite generous remedy for the transgressions of the Roos’ entities, notably that the Association, which now owned the Regatta Club, would not have to reimburse IDC Properties one dime for its investment in that facility. Id. The ruling in America I also settled the issue that the Association is not entitled to profits earned by IDC Properties while it operated the Regatta Club. Id. at 135, fn. 24. The Association also contends that because the Debtor was not a named party in the state court litigation it may not invoke res judicata as a defense here. This broad brush statement, however, does not alter the substantive result that the Rhode Island Supreme Court, in a final and dispositive ruling, has already provided the Association with a complete remedy for the trespass committed against it. It should also be noted that while both the Debtor and its lessor, Properties, were trespassers, the Association is “entitled to only one satisfaction of the tort, even though two or more parties contributed to the loss.” Augustine v. Langlais, 121 R.I. 802, 402 A.2d 1187, 1189 (1979), and that although the Debtor physically occupied the Reserved Area under a lease with IDC Properties, that occupancy did not cause additional or separate harm to the Association. As compensation, the Rhode Island Supreme Court awarded the Association the substantial improvements made to the Reserved Area by IDC Properties and/or the Debtor. That, together with the accounting ordered by the Supreme Court, constituted full compensation to the Association, regardless of the number of participants involved in the commission of the trespass under consideration. In addition to the foregoing rulings based on res judicata, and damages vis-a-vis joint tortfeasors, this Court also concludes independently, based on the totality of circumstances, that to award the Association anything further as additional damages in this bankruptcy would clearly be overkill and an unjust enrichment. CONCLUSION Procedurally, then, (1) the Association’s Motion for Summary Judgment is GRANTED IN PART, on the issue whether there was a trespass by the Debtor; (2) the balance of the relief sought by the Association is DENIED; (3) the Debtor’s Cross Motion for Summary Judgment is also GRANTED IN PART, as to whether the Association’s claims are barred by res judicata, as well as its joint tortfeasor liability argument; and (4) based on the foregoing discussion and rulings, either as made herein or as adopted and incorporated by reference, the Association’s claims for damages in this bankruptcy case are DISALLOWED. Enter judgment consistent with this opinion. . We specifically exclude herein, IDC Clambakes, Inc., and when the Court intends to reference IDC Clambakes, it will refer to that entity as "the Debtor” or "Clambakes”.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494146/	MEMORANDUM AND ORDER ON REAFFIRMATION AGREEMENT ALAN H.W. SHIFF, Bankruptcy Judge. This matter comes before the court on the debtor’s motion to approve a reaffirmation agreement with the Ford Motor Credit Company (“FMCC”), filed by FMCC, pursuant to 11 U.S.C. § 524(c). BACKGROUND On May 31, 2005, the debtor entered into a Retail Installment Contract on a 2005 Ford Freestyle with Stamford Motors. That contract has been assigned to FMCC, which accordingly has a purchase money security interest on the vehicle, aggregating $22,959.23. On October 17, 2005, the debtor commenced this chapter 7 case and listed the vehicle as personal property on Schedule B. On December 23, 2005, the debtor entered into the subject reaffirmation agreement with FMCC. On June 6, 2006, FMCC and the debtor, appearing pro se, requested that the reaffirmation agreement be approved. Tr. at 1. It is undisputed that, as of the petition date, she was current with the contract’s payment provisions. Tr. at 2-3. DISCUSSION Even though the reaffirmation agreement, with its attendant rights and obligations, was entered into before the effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), those amendments apply in this analysis. See Nelson Co. v. Counsel for the Official Comm. of Unsecured Creditors (In re Nelson Co.), 959 F.2d 1260, 1266 (3d Cir.1992) (“It is only upon the filing of the petition in bankruptcy that the provisions of the Code come into effect. In other words, it is by operation of law after the filing of the petition that the debtor’s rights [are affected] ... ”) (original emphasis). The BAPCPA provisions that affect an individual debtor’s reaffirmation of personal property have been procedurally and substantively amended. Read together in the context of this case, §§ 521(a)(2)(C), (a)(6), and (d) and 362(h)(1)(A) now require a debtor to enter into a reaffirmation. Therefore, the only remaining issue is whether this pro se debtor has satisfied § 524, which, except for a debtor notification provision, see § 524(c)(2), was not amended by BAPCPA. That inquiry is prompted by a congressional concern, even after BAPCPA, that a debtor, who is not represented by an attorney at the time a reaffirmation is executed, might not have the full advantage of an arms length agreement. See In re Laynas, 345 B.R. 505, 514 (Bankr.D.Pa.2006) (“The words of the title [Discouraging Abuse of Reaffir-' mation Agreement Practices]1 express Congress’ obvious intent to provide an ex*34tra measure of consumer protection over and above existing law”). Section 524 provides in relevant part: in a case concerning an individual who was not represented by an attorney during the course of negotiating an agreement under this subsection, the court approves such agreement as— (i) not imposing an undue hardship on the debtor or a dependent of the debt- or; and (ii) in the best interest of the debtor. 11 U.S.C. § 524(c)(6)(A). In accordance with that subsection, the court explained the nature of the reaffirmation agreement: Ms. Jackson, do you know what’s going on here? I don’t mean to demean you in any way, but this is complicated and it’s a new law that people are, including the court ... weaving their way through. And the law has changed ... the reaffirmation agreement which ... [you are] agreeing to reaffirm ... is what we’re here for today. And if you reaffirm it ... all off its part are in play ... Tr. at 10-11. The debtor then stated that she understood the consequences of the agreement. Id at 7. She further stated that she wanted to enter into the reaffirmation agreement with FMCC in order to retain the vehicle. Id. There is no basis for the court to conclude that this reaffirmation agreement imposes an undue hardship. To the contrary, the debtor signed the provision in the Statement In Support of the Reaffirmation Agreement that provided its terms are “affordable” and it does not constitute an “undue hardship”. See January 16, 2006 Reaffirmation Agreement, Attached to FMCC’s April 18, 2006 Request for a Hearing. That claim is corroborated by the statement of monthly income and expenses which demonstrates that the debt- or’s monthly income is greater than all of her expenses.2 Id. CONCLUSION The reaffirmation agreement does not impose an undue hardship, and it is in the debtor’s best interest. Accordingly, the court approves the reaffirmation agreement, and IT IS SO ORDERED. . See Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub.L. No. 109-8, § 203, 119 Stat. 23 (2005). . Courts that have considered the meaning of “undue hardship” have balanced the benefits against the harms of the reaffirmation. See, e.g., In re Melendez, 224 B.R. 252, 261 (Bankr.D.Mass.1998) (“[T]his Court would deem reaffirmation to cause a debtor 'undue hardship' where it would result in a significant, but otherwise avoidable, obstacle to the attainment or retention of necessaries by the debtor or the debtor’s dependents”). The court notes that amended § 524(m)(l) provides some guidance by reference to a § 524(k)(6)(A) statement that the debtor is required to sign for the reaffirmation agreement to be viable. The statement contains an affordability formula to assess whether the reaffirmation agreement will impose an undue hardship.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494148/	OPINION1 MARY F. WALRATH, Bankruptcy Judge. Before the Court is the Complaint filed by Sharon Tyndall (the “Plaintiff’) against Donn L. Tyndall (the “Debtor”) seeking a ruling that payments due are non-dis-chargeable pursuant to former sections 523(a)(5) and (15) of the Bankruptcy Code.2 For the reasons stated below, the Court will grant judgment in favor of the Plaintiff. I. BACKGROUND The Plaintiff and Debtor were married for approximately twenty years. On or about April 11, 2000, they executed a divorce separation agreement (the “Agreement”), which was incorporated into their divorce decree entered on January 23, 2002. Pursuant to the Agreement, the 70Plaintiff kept the marital home and the Debtor retained his hair salon business (the “Business”) and its related real estate, including several rental properties. The Debtor agreed to pay the Plaintiff $500 per week for twenty years “in lieu of her interest in [the] Business” so long as she resided in the marital home. The Plaintiff was responsible for all the expenses of the marital home, including the mortgage. The Debtor made the agreed payments to the Plaintiff until October, 2005. On September 16, 2005, the Debtor filed a voluntary petition under chapter 7 of the Bankruptcy Code. On December 19, 2005, the Plaintiff filed a complaint against the Debtor objecting to the dischargeability of the payments due to her under the Agreement. After discovery was conducted, trial was scheduled for November 20, 2006. On November 16, 2006, the Debtor requested a continuance of the trial to January or February, which was opposed by the Plaintiff. The Court granted the motion, but rescheduled the trial for December 5, 2006. On December 5, 2006, the Plaintiff appeared 3 but the Debtor and Debtor’s counsel failed to appear.4 The Court permitted the Plaintiff to proceed and the Plaintiff testified and offered exhibits in support of her Complaint. The Court held the matter under advisement. II. JURISDICTION The Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 1334 & 157(b)(1). This proceeding is a core matter pursuant to 28 U.S.C. § 157(b)(2)(A), (I) & (O). III. DISCUSSION A. Former Section 523(a)(5) The Plaintiff contends that the $500 per week payment due to her is non-discharga-ble pursuant to former section 523(a)(5), which provided that (a) A discharge under section 727 ... of this title does not discharge an individual debtor from any debt— (5) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree, or other order of a court of record, determination made in accordance with State or territorial law by a governmental unit, or property settlement agreement, but not to the extent that— (B) such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support. 11 U.S.C. § 523(a)(5) (amended 2005). The Agreement states that the payments due to the Plaintiff are not alimony. The Plaintiff testified that the Agreement so stated only so that she would not be obligated to pay taxes on it, thereby lowering the amount that the Debtor had to pay her. The Plaintiff asserts that the payments were for her support. She testified that, except for a couple of years prior to and early in the marriage, she did not have a job but stayed home with her minor child and did some bookkeeping for the Business. 71The language of the Agreement does not seem to support this argument. As noted above, the Agreement expressly states that the payments are not alimony. It further states that the payments are “in lieu of her interest in [the] Business.” The Third Circuit, however, has held that the language of an agreement is not dispositive in determining the dis-chargeability of obligations under former section 523(a)(5). Gianakas v. Gianakas (In re Gianakas), 917 F.2d 759, 762 (3d Cir.1990) (concluding, based on the express language of the statute, that “the court must look beyond the label attached to an obligation by a settlement agreement to examine its true nature.”). The Third Circuit articulated three factors to consider in determining the purpose of the obligation: First, the court must examine the language and substance of the agreement in the context of surrounding circumstances, using extrinsic evidence if necessary. ... Because the language of the agreement alone may not provide a sufficiently conclusive answer as to the nature of an obligation, the second indicator to which we must look to assist in ascertaining the parties’ intent is the parties’ financial circumstances at the time of the settlement.... Third, the court should examine the function served by the obligation at the time of the divorce or settlement. An obligation that serves to maintain daily necessities such as food, housing and transportation is indicative of a debt intended to be in the nature of support. Id. at 762-63. In a case remarkably similar to this case, the Third Circuit confirmed the conclusion of the Bankruptcy Court, in applying Gianakas, that regardless of the labels used in the marital settlement agreement, all the payments due by the debtor to his ex-wife were structured and designed as payments in the nature of alimony, maintenance or support and were thus non-dis-chargeable. See, e.g., Gunn v. Froncillo (In re Froncillo), 296 B.R. 138, 144-45 (Bankr.W.D.Pa.2003), aff'd 2005 WL 3067830 (3d Cir.2005). The Bankruptcy Court in Froncillo found that At the time of execution of the Settlement Agreement, Debtor was a successful entrepreneur operating business interests with earnings of $132,000 per year. [His ex-wife] had not worked outside the home and had no training or marketable skills to enable her to find employment that would generate an income much beyond minimum wage. When the Agreement was executed, [his ex-wife] was earning $150 per week. The function of the Separation Agreement was to allow the Debtor to maintain his business interests and continue to earn a significant income and to use that income, in part, to provide enough funds for [his ex-wife] to maintain a home, reliable transportation and pay living expenses. 296 B.R. at 144. As a result the Bankruptcy Court concluded that the Debtor was obligated to continued to pay his ex-wife $1,500 per month for three years and $500 per month for the following eight years. Id. See also, McDonough v. Federer (In re Federer), Case No. 02-34782, Adv. No. 03-0038, 2004 WL 231008 at 4 (Bankr.E.D.Pa. Jan.9, 2004) (concluding that award was in nature of alimony given modest income of ex-wife); Lane v. Lane (In re Lane), 267 B.R. 679, 685-86 (Bankr. D.Del.2001) (concluding that even though plaintiff was not entitled to alimony under state law, the obligations of the debtor to her were in the nature of support because of the disparate earning capacity of the 72parties); Pollock v. Pollock (In re Pollock), 150 B.R. 584, 590-91 (Bkrtcy.M.D.Pa.1992) (concluding that $115,000 property settlement payment was non-dischargeable under former section 523(a)(5) because it was in the nature of alimony, support or maintenance given the ex-wife’s lack of employment). Applying the Gianakas standard to the case at bench convinces the Court that the obligation is in the nature of support. Although the Agreement states that the payments are in lieu of the Plaintiffs interest in the Business property, the Agreement also gave the Plaintiff the marital home in lieu of the Business real estate. In addition, at the time of the Agreement, the Debtor was generating substantial income from operating the Business and the Plaintiff, in contrast, was unemployed and had been unemployed except as a homemaker for almost twenty years. Clearly, the parties contemplated that the payments would be necessary for the Plaintiff to meet the necessary expenses of living. Consequently, the Court concludes that considering the circumstances at the time the Agreement was executed, the obligation of the Debtor to pay the Plaintiff $500 per week is non-dischargeable pursuant to former section 523(a)(5). B. Former Section 523(a)(15) Alternatively, if the Court determines that the obligation is not covered by former section 523(a)(5), the Plaintiff asserts that it is non-dischargeable pursuant to former section 523(a)(15), which provided: (a) A discharge under section 727 ... of this title does not discharge an individual debtor from any debt— (15) not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, a determination made in accordance with State or territorial law by a governmental unit; unless (A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor and, if the debtor is engaged in a business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business; or (B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor. 11 U.S.C. § 523(a)(15) (amended 2005). Former section 523(a)(15) was added to the Bankruptcy Code by the 1994 amendments. Courts have concluded that the addition created a presumption that divorce-related obligations are not dis-chargeable in bankruptcy. See, e.g., Shellem v. Koons (In re Koons), 206 B.R. 768, 771 (Bankr.E.D.Pa.1997); Cleveland v. Cleveland (In re Cleveland), 198 B.R. 394, 397 (Bankr.N.D.Ga.1996). The majority of courts have concluded that once the creditor establishes that the obligation is divorce-related, the burden of proving the applicability of the exceptions in subsection (A) or (B) shifts to the debtor. See, e.g., In re Crosswhite, 148 F.3d 879, 884-85 (7th Cir.1998); Gamble v. Gamble (In re Gamble), 143 F.3d 223, 226 (5th Cir.1998); Laddeck v. Laddeck (In re Laddeck), Adv. No. 00-0426, 2001 WL 423026 at 6 (Bankr.E.D.Pa. Apr.11, 2001); In re Leonard, 231 B.R. 884, 888 (E.D.Pa.1999); Fronheiser v. Papi (In re Papi), Adv. No. 73A98-288, 2000 WL 83712308 at 2 (Bankr. D.Del. July 28, 2000); Koons, 206 B.R. at 772-73; Cleveland, 198 B.R. at 397-98. The minority of courts have concluded, however, that the creditor always has the burden of proving all the elements of former section 523(a)(15). See, e.g., Konick v. Konick (In re Konick), 236 B.R. 524, 526-27 (1st Cir.BAP1999); Marquis v. Marquis (In re Marquis), 203 B.R. 844, 852 (Bankr.D.Me.1997). See also Garrity v. Hadley (In re Hadley), 239 B.R. 433, 437 (Bankr.D.N.H.1999) (concluding that the creditor bears the burden of production of evidence and persuasion on all elements of § 523(a)(15) except that the debtor has the burden of production on his ability or inability to repay the obligation). The Court agrees with the Hadley analysis. A creditor who seeks to except its debt from discharge has the ultimate burden of persuading the Court that the elements of the discharge exception are met. Under former section 523(a)(15), however, the Debtor is in the best position to prove what the Debtor is able to pay because evidence of that .is usually within his/her control. Cf., Lindahl v. Office of Pers. Mgmt., 776 F.2d 276, 280 (Fed.Cir. 1985) (holding that “the party with the best knowledge” normally has the burden of proof); ' Merriam v. Venida Blouse Corp., 23 F.Supp. 659, 661 (D.N.Y.1938) (concluding that “the party who is in the best position to know the facts bears the burden of explanation.”). In this case, the Court concludes that the Plaintiff has met her burden of production and persuasion under former section 523(a)(15). She has established that the obligation arises under the Agreement which was entered in connection with the parties’ divorce. To the extent that the obligation is not alimony, maintenance or support, there is a presumption that it is not dischargeable under former section 523(a)(15). To determine whether the Debtor has the ability to repay an obligation under former section 523(a)(15)(A), courts have considered the following factors: First, the Court will have to determine the amount of the debts which a Creditor is seeking to have held nondis-chargeable and the repayment terms and conditions of those debts. Second, the Court will have to calculate the Debtor’s current income and the value and nature of any property which the Debtor retained after his bankruptcy filing. Third the Court will have to ascertain the amount of reasonable and necessary expenses which the debtor [sic] must incur for the support of the Debt- or, the Debtor’s dependents and the continuation, preservation and operation of the Debtor’s business, if any. Finally, the Court must compare the Debtor’s property and current income with his reasonable and necessary expenses to see whether the Debtor has the ability to pay those obligations. Fronheiser, 2000 WL 33712308 at 4 (quoting In re Smither, 194 B.R. 102, 108 (Bankr.W.D.Ky.1996)). The Plaintiff presented compelling evidence that the failure to receive the weekly payments from the Debtor will be devastating to her. Except for working for the Debtor in the Business, she has not been employed for over twenty years. She is currently unemployed with no prospects of employment. She is in counseling and on medication. Although she owns the home in Laurel, Delaware, it is encumbered by a mortgage and the Agreement relieves the Debtor of any obligation to pay her if she sells it. In this case, the amount of the obligation is $500 per week until 2020. Because the Debtor has the burden of pro*74duction of evidence on the issue of his ability to pay and the effect on him if required to pay, his failure to appear at the trial and present evidence compels the Court to conclude that the Plaintiff is entitled to judgment in her favor on this count as well. Nonetheless, the Plaintiff presented compelling evidence of the Debtor’s ability to repay her. On the issue of the Debtor’s income, the Plaintiff testified that, contrary to the Debtor’s deposition testimony, he typically received $50-100 in tips a day and received a large amount of his income in cash, which he did not report on his tax returns. With respect to the issue of reasonable expenses of the Debtor and the Business, the Plaintiff presented compelling evidence that many of the expenses of the Debtor are not necessary and are in fact extravagant. The Plaintiff testified that the Debt- or has gone on several vacations. The Debtor pays $576 per month to drive a new luxury car. (Ex. P-11.) The Debtor is living rent-free in a house owned by his new wife.5 The Debtor paid the down payment of $14,000 for that house and paid for extensive renovations with funds from the Business. (Exs. P-13, P-17 & P-5 at 60.) Two weeks after the Debtor filed for bankruptcy, the house was featured on a house tour, which highlighted the renovations that had been done and the antiques it contained. (Ex. P-16.) Based on all the evidence presented, the Court is convinced that the obligation in question is debt arising from the divorce of the Plaintiff and the Debtor. The Court further finds that the Debtor has the ability to repay that debt. Finally, the Court concludes that the burden on the Debtor to repay the debt is not more substantial than the devastating effect it will have on the Plaintiff if it is not repaid. Consequently, the Court concludes that the obligation owed to the Plaintiff is not dis-chargeable pursuant to former section 523(a)(15). IV. CONCLUSION For the foregoing reasons, the Court concludes that the obligation owed by the Debtor to the Plaintiff is not dischargable pursuant to former sections 523(a)(5) and (15) of the Bankruptcy Code. The Court will, accordingly, grant judgment in favor of the Plaintiff. An appropriate order is attached. . This Opinion constitutes the findings of fact and conclusions of law of the Court pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure. . Former sections 523(a)(5) and (15) of the Bankruptcy Code have been significantly amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA”). The Debtor’s case was filed before the effective date of the amendments and is, therefore, governed by the prior sections. . The Plaintiff appeared without counsel, having permitted her counsel to withdraw because she could not afford the expense. . To date, the Debtor has failed to explain his failure to appear. . At the meeting of creditors, the Debtor testified contradictorily that he lives in a trailer near the Business (p. 16) and that he lives in a house with his new wife (p. 13). (Ex. P-3.)	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494149/	MEMORANDUM OPINION DIANE WEISS SIGMUND, Chief Bankruptcy Judge. Before the Court is the Motion to Dismiss With Prejudice the above captioned Chapter 13 case (“Dismissal Motion”) filed by the United States of America through the Department of Housing and Urban Development (“HUD”). The Dismissal Motion is the latest of a series of legal actions in this and the United States District Court for the Eastern District of Pennsylvania (the “District Court”) by HUD to secure relief to foreclose on a mortgage delivered by William Jacono (“William”), the deceased father of Debtor, on residential property at 4178 Oliver Street, Boothwyn, Pennsylvania (the “Property”). The mortgage loan, commonly referred to as a reverse mortgage, was granted to William on or about June 11, 1993 through HUD’s Home Equity Conversion Mortgage Program (“HE CM”) and was secured by the Property where Debtor now resides. For the reasons that follow, the Dismissal Motion shall be granted. 85BACKGROUND Most of the facts relevant to this contested matter were set forth in (1) my Memorandum Opinion, In re Jacono, 2005 WL 2077045 (Bankr.E.D.Pa. August 16, 2005) (the “2005 Opinion”), granting HUD relief from the automatic stay imposed in Debtor’s prior and unsuccessful Chapter 13 case (“Jacono /”) and (2) my Order in this case, dated October 10, 2006, Doc. No. 22, (“No Stay Order”) denying Debtor’s motion to extend the automatic stay beyond the 30-day period provided in § 362(c)(3) to a debtor who has had a prior bankruptcy case dismissed within twelve months and Rather than reiterate the facts found in both of those adjudicatory documents, I will incorporate them as though set forth herein, supplementing only as to the new facts elicited at the hearing held on November 7, 2006 and as necessary to put those facts in proper context. In the 2005 Opinion, I concluded that Debtor’s proposed Chapter 13 plan (the “2005 Plan”) was far too speculative to compel HUD to forbear until 2007 with no payment while its collateral diminished by reason of the growing tax liens arising because Debtor does not have the financial resources to pay real estate taxes. I was not convinced that the two essential components of the 2005 Plan necessary to pay HUD’s secured claim in full (a new reverse mortgage and the proceeds of an eminent domain claim) would be accomplished by March 31, 2006, the date promised in the 2005 Plan, if at all. As the updated facts demonstrate, that conclusion was not misplaced since as of the November 2006 hearing date Debtor had still not secured the reverse mortgage and the eminent domain claim was no longer even mentioned as a potential source of funding of a Chapter 13 plan. With relief from stay granted in Jacono I, HUD returned to the District Court to complete its foreclosure action, and Debtor did not resist the Chapter 13 trustee’s motion to dismiss the bankruptcy case which had lost its utility with the lifting of the stay. On March 3, 2006, the Honorable John Padova issued a sixteen-page Opinion and Order in favor of HUD, liquidating its claim at $189,754.44 plus $13.00 per day from the date of the order, foreclosing the mortgage lien on and allowing the sale of the Property and payment to HUD from its proceeds, and declaring that William and any heirs, executors and assigns of William (to wit, Debtor) as well as Robert Miller, Trustee Under Irrevocable Living Trust (the “William Trust”) are “forever barred and foreclosed of all rights, claims, liens and equity of redemption in the mortgaged premises.” United States v. Jacono, 2006 WL 560142, at 7 (E.D.Pa. March 3, 2006).1 Undeterred by this setback, Debtor filed another petition under Chapter 13 on September 8, 2006 (“Jacono II ”) before HUD could complete the permitted foreclosure. As noted above, because Debtor had a case dismissed within twelve months of the filing of the new petition, the provisions of § 362(c)(3) attached. Debtor thus filed a motion to extend the stay (“Extension Motion”) which was opposed by HUD.2 In the 86No Stay Order, I concluded that the new case was presumptively filed not in good faith as to HUD as it had been granted relief from stay in the prior case, 11 U.S.C. § 362(c)(3)(C)(ii), and as to all creditors because there had not been a substantial change in the financial or personal affairs of Debtor since the dismissal of Jacono I. I found that Debtor had not taken any meaningful step toward pursing the reverse mortgage which continues to be the basis for addressing HUD’s debt in a Chapter 13 plan and that by his own admission, the potential proceeds of a reverse mortgage would be insufficient to pay HUD in full. I found the newly discovered asset proffered to make up the shortfall, proceeds of a personal injury claim arising from an accident with a municipal truck in June 2006 (the “PI Claim”), too speculative to rebut the presumption that Jacono II was not filed in good faith. Presumably uncertain whether it had relief from stay to proceed with its foreclosure as ordered by Judge Padova, see note 2 supra, HUD now files a motion to dismiss Jacono II with prejudice in order to bar Debtor’s access to bankruptcy protection for 180 days so that it can complete its foreclosure unimpeded by the bankruptcy stay of yet another case. HUD argues that the extraordinary relief is warranted given the repeat bankruptcy filings without payment and the failure to propose any confirmable Chapter 13 plan. In response, Debtor urges the Court to find that a confirmable plan is in progress for the same reasons he asked the Court to extend the stay one month ago. Thus, the eviden-tiary hearing on the Dismissal Motion became the third opportunity for Debtor to attempt to convince me that he could propose a confirmable plan that would treat HUD’s liquidated claim as required by the Bankruptcy Code. At the Dismissal Motion hearing I witnessed the return of Dunne, the attorney for the William Trust, who had just been retained at the time of the Extension Hearing to represent Debtor in connection with the PI Claim. At that time Dunne was fairly confident that liability would be established but had not developed his case on damages as Debtor was still undergoing medical evaluation. While Dunne, who had not yet filed the complaint on Debtor’s behalf, could offer no estimate as to when a recovery could be expected, he speculated that he believed that an award of $100,000 would be possible. I found this testimony to be too speculative to serve as the foundation for a Chapter 13 plan that would require HUD to await payment until the proceeds of the litigation were received.3 With the No Stay Order in mind, Dunne testified one month later that he now had a police report that established liability and had received some notes from Dr. Robert L. Knobler,4 Ex. D-4, that showed a serious and permanent plexus injury.5 He reiterated that it was too ear87ly to ask for a report from Dr. Knobler but nonetheless stated his belief that a settlement could be achieved in the $100,000 range in twelve to eighteen months. He did not state when the case would come to trial if a settlement in that range could not be negotiated. Debtor also testified again in support of his Chapter 13 plan which proposes to pay HUD in full from the proceeds of a reverse mortgage and the PI Claim. Notably Debtor proffers no date by which the foregoing will occur while he continues to pay $10 per month to the Chapter 13 trustee and nothing to HUD. While the Plan states that “if he cannot accomplish these ends, he will proceed to sell the Home,” notably he made the same commitment in Jacono I and to date has not engaged a realtor. On the subject of the reverse mortgage, he claims to have moved the process along by completing the required counseling and applying for the reverse mortgage. Exhibit D-l is a letter from Carmine Raspucci, Corp. Sec. (“Raspuc-ci”), of Mortgage Network Solutions,6 so stating and listing the other conditions that are “in the process of being completed.” Although an appraisal was obtained on October 31, 2006, Exhibit D-2, Debtor has not addressed title, liens and taxes, the other conditions which must be reviewed and found to meet the “Guidelines for Reverse Mortgage Loan,” to secure the HE CM. To my inquiry, Debtor stated that Raspucci was not provided title information (which would have revealed that title was not in Debtor’s name), but knew about the HUD mortgage (although with a payoff as of six months ago) and the real estate taxes. Presumably Raspucci must believe that the purpose of his letter is to show that an application has been made, since the other conditions cannot be met given that the available proceeds of the reverse mortgage will not satisfy liens and title is not in Debtor’s name.7 It is clear that Debtor has hardly advanced the ball with this element of his Chapter 13 plan. Nor am I impressed with Debtor’s generalized contention that his advancing age improves his prospects for a larger reverse mortgage. Accepting that proposition would reward Debtor for obstructing HUD whose claim continues to increase with the passage of time through non-payment, interest accrual and the advancement of taxes and insurance. In short, the updated picture is no more impressive that the record made twice before. DISCUSSION In this case HUD filed an action in the District Court in 2004 to foreclose its reverse mortgage on the Property. As a reverse mortgage, it had become due when William died in October 2003. Exhibit B to Dismissal Motion. On April 18, 2005 William’s son James, Debtor herein, filed a petition under Chapter 13 to stay the consequences of the District Court foreclosure litigation which appeared imminent. In that case, Jacono I, no payment was made to HUD, and HUD was compelled to pay real estate taxes on the Property which would prime its lien since Debtor did not pay them either. On August 16, 2005 I issued a comprehensive opinion rejecting Debtor’s proposed plan as speculative and allowed HUD to continue with the stayed District Court litigation. HUD sought to do so. However, because Debtor did not 88resist the dismissal of Jacono I, he was in a position to file another petition as HUD neared the exercise of its foreclosure remedy. The second petition filed by Debtor on September 9, 2006, accomplished its intended purpose to halt the District Court action. The two back to back bankruptcy cases have stayed HUD for over 1/1/2 years, and the record made in this case convinces me that it is no closer to realizing on its secured claim through a reorganization in this case than it was in the last one. The bottom line of Debtor’s position is that HUD should indefinitely await the speculative fulfillment of Debtor’s conditions precedent to funding his Plan while HUD’s secured position continues to erode. This premise is antithetical to bankruptcy policy which entails a careful balancing of the debtor’s right to a fresh start and the creditor’s right to adequate protection of its interest in property. In re Wile, 310 B.R. 514, 517 (Bankr.E.D.Pa. 2004). The court may dismiss a case under § 1307(c)(1) for unreasonable delay that is prejudicial to creditors.8 Courts have not hesitated to dismiss on this ground when the sole object of the bankruptcy is to obstruct a foreclosing creditor without any real prospect of reorganization. See, e.g., In re Spear, 203 B.R. 349 (Bkrtcy.D.Mass.1996); Wile, supra; In re Rusher, 283 B.R. 544 (Bankr.W.D.Mo.2002); In re Fricker, 116 B.R. 431 (Bankr.E.D.Pa.1990); In re Clark, 86 B.R. 593 (Bankr.E.D.Ark.1988). Moreover, as it appears clear that Debtor has utilized the bankruptcy stay twice to impede HUD’s legitimate remedies without the ability to propose a confirmable plan, something more than dismissal is required to preclude a repetition as HUD moves once again to exercise its rights. HUD has asked for a bar on refiling for 180 days, a remedy that I have granted when I have found serial petitions filed for the sole purpose of invoking the automatic stay of § 362(a). In re Dami, 172 B.R. 6, 11 (Bankr.E.D.Pa.1994). The authority to grant such relief has been found in Bankruptcy Rule 9011, incorporating Fed.R.Civ. P.11. In re Narod, 138 B.R. 478, 482 (E.D.Pa.1992) (sanctions imposed under Rule 9011 are not limited to expenses or fees); In re Jones, 117 B.R. 415, 420 (Bankr.N.D.Ind.1990) ([Wjhere a debtor files a petition in bankruptcy with no intention of obtaining the benefits or the goals for which the proceeding was designed, the Bankruptcy Code is being abused and bankruptcy rule 9011 is implicated). Other courts have relied on their discretionary power under § 349, see, e.g., Spear, 203 B.R. at 353-54; In re McKissie, 103 B.R. 189, 193 (Bankr.N.D.Ill.1989); or § 105, see, e.g., Spear, 203 B.R. at 354; In re Earl, 140 B.R. 728, 741 (Bankr.N.D.Ind.1992); Clark, 86 B.R. at 595, to enjoin future filings to prevent abuse of the bankruptcy process. While this case does not have the indicia of bad faith present in some other cases where the repeat 89filings have been more numerous before the creditor seeks to stop the bankruptcy cycle, it nonetheless evidences a determination by this Debtor to reside under the protection of the bankruptcy stay until every hope of raising funds to pay HUD has been dashed. If HUD’s secured position was not eroding during the stay, more time might be an appropriate balance of the parties’ respective interests. However, Debtor continues to reside in the Property without payment to HUD or the taxing authorities after the District Court has held that he has no interest to protect. Notably the bar order I will enter will allow Debtor to make application to this Court to refile should there be a change in circumstances that would suggest a reorganization is feasible. This relief merely shifts the burden to Debtor to earn his injunction, obviating the opportunity to halt the foreclosure again by simply filing another petition. An Order consistent with the foregoing Memorandum Opinion shall issue. Order AND NOW, this 30th day of November 2006, upon consideration of the (1) confirmation of Debtor’s amended Chapter 13 plan and (2) the Motion to Dismiss the Chapter 13 Case with Prejudice (“Dismissal Motion”) filed by the United States of America through the Department of Housing and Urban Development (“HUD”), after notice and hearing and for the reasons stated in the accompanying Memorandum Opinion; It is hereby ORDERED and DECREED that: 1. Confirmation of the Plan is DENIED. 2. The Dismissal Motion is GRANTED, and the Chapter 13 case is DISMISSED. 3.Debtor is barred from filing a further bankruptcy petition for 180 days without leave of this Court. . Defendants were represented by Dennis Dunne, Esquire ("Dunne”) who testified that he continues to represent the William Trust in an appeal of the District Court judgment to the Third Circuit Court of Appeals. In the District Court litigation, the William Trust unsuccessfully argued that HUD’s lien rights were subordinate to an unrecorded deed transferring the Property from William to the William Trust. . Whether the stay expires after 30 days as to property of the estate (thus requiring the extension) is an issue of some debate in the bankruptcy courts. Compare In re Clifton Williams, Jr., 346 B.R. 361 (Bkrtcy.E.D.Pa. *862006) with In re Jupiter, 344 B.R. 754 (Bankr.D.S.C.2006). There has been no appellate decision notwithstanding the divergence of the decisional law. Perhaps for that reason, Debtor sought an extension of the stay where its only efficacy of the stay applied to HUD. Both parties proceeded with an evidentiary hearing without raising the issue of whether the relief was necessary at all. .I cannot help but note that I reached the same conclusion in the 2005 Opinion about the eminent domain claim which Dunne also was prosecuting and which he testified in Jacono I would be the source of funding for that plan. . Dr. Knobler is a neurologist that Dunne states is highly regarded in his field. . The notes, which were admitted without opposition, are unintelligible. Dunne provided little else to support the number he has affixed to the claim. . While originally described by Debtor as a lender, it is clear that Raspucci is a mortgage broker. . When asked whether Raspucci had a solution to these problems, Debtor acknowledged that Raspucci had never done a reverse mortgage and indeed had asked Debtor why he did not seek conventional financing, obviously knowing little about Debtor's financial circumstances. . Section 1307(c) allows a court to dismiss or convert for cause, whichever is in the best interests of creditors. Whether to dismiss or convert is left to the discretion of the bankruptcy judge. Sievers v. Green (In re Green), 64 B.R. 530, 530-31 (9th Cir. BAP 1986); In re Smith, 85 B.R. 729, 730-31 (E.D.Va.1988); In re White, 126 B.R. 542, 546-47 (Bankr. N.D.Ill.1991). Since the only other real creditors are taxing authorities with obligations arising from the Property, the dismissal and liquidation of the Property, as requested by HUD, would be in the best interest of creditors here. A review of the Schedules does not support conversion since there would be no asset for a Chapter 7 trustee to administer other than the recently identified tort claim which would be eroded by attorney's fees and Debtor’s exemption. HUD, which seeks dismissal, would be entitled to the overwhelming portion of the remaining distribution.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494150/	OPINION WARREN W. BENTZ, Bankruptcy Judge. Introduction1 Carrie L. Williams (“Borrower” or “Debtor”) filed a voluntary Petition under 100Chapter 13 of the Bankruptcy Code on July 9, 2005. The Debtor is the owner of real property located at 15 Grant Street, North East, Pennsylvania (the “Property”) which is encumbered by a Note and Mortgage dated February 19, 2000 executed by Williams in favor of Option One Mortgage Corp. (“OOMC” or “Lender”). The Property suffered damage as a result of a fire on or about September 24, 2004 (the “Fire”). Presently before the Court is a two-count Complaint filed by the Debtor. In Count I, Debtor seeks a judgment against OOMC in the amount of the actual damage the Property suffered as a result of the Fire. Count II is an objection to the claim that OOMC has filed in the Debtor’s bankruptcy case. An evidentiary hearing/trial was held on November 1, 2006. At the time of trial, the parties had agreed to resolve Count II with OOMC reducing the amount of its claim by $941.15. Evidence was heard on Count I and the matter is now ripe for decision. Facts A. The Mortgage The Mortgage provides at ¶ 5 that “Borrower shall keep the ... Property insured against loss by fire” and “[i]f Borrower fails to maintain coverage ... Lender may, at Lender’s option, obtain coverage to protect Lender’s rights in the Property in accordance with Paragraph 7. Paragraph 7 provides that if the Borrower fails to perform, the Lender may, but does not have to, do and pay for whatever is necessary to protect the Property. Any amounts disbursed by the Lender under ¶ 7 become additional debt of the Borrower.” In the language of ¶ 5 which discusses the insurance to be obtained by the Borrower, the Mortgage further provides that “[i]f Borrower ... does not answer within 30 days a notice from the Lender that the insurance carrier has offered to settle a claim, Lender may collect the insurance proceeds.” B. The SAFECO Insurance Policy Borrower failed to maintain insurance on the Property and at some time prior to the Fire, Lender force-placed fire insurance with SAFECO. The insurance Policy issued by SAFECO (the “Policy”) named OOMC as the insured. The premium for coverage on the Property under the Policy became part of the mortgage payment of the Borrower. The Policy provides that SAFECO will pay OOMC or the Borrower for the removal of debris and for necessary repairs to protect the Property from further damage following a peril that causes a loss. The Policy further provides coverage in the event of a fire for personal property owned by the Borrower. Paragraph 6 of the Policy is entitled Duties After a Loss. It provides that “[i]n case of a loss to which this insurance applies, you or the ‘borrower’ must give us or our agent notice of the loss as soon as practicable.... ” “You” is defined as the named insured mortgagee, in this Policy, OOMC. The policy provides for settlement of property losses at ¶ 7 which provides: Loss Settlement. Covered property losses are settled as follows: A. Coverages 1A — Dwelling, IB — Other Structures, and IE Condominium Unit Items at replacement cost without deduction for depreciation subject to the following: (1) We will pay the full cost of repair or replacement, without deduction for depreciation, but not exceeding the smallest of the following amounts: 101(a) the “limit of liability” under this policy applying to the building; (b) the replacement cost of that part of the damaged building for like kind and quality construction and use on the same premises as determined shortly following the loss; or (c) the amount actually and necessarily spent to repair or replace the damaged building. (2) When the cost to repair or replace the damage is more than $2,500, we will pay the difference between the “actual cash value” and replacement cost only after the damaged or destroyed property has actually been repaired or replaced. (3) You may disregard the replacement cost loss settlement provisions and make claim under this policy for loss or damage to buildings on an “actual cash value” basis. A claim can be made for any additional liability on a replacement cost basis after actual repair or replacement is completed if done so within 180 days of the date of loss. (4) Carpeting, domestic appliances, awnings and outdoor equipment, whether or not attached to a dwelling or other structure, at the “actual cash value” at the time of loss but not exceeding the amount necessary to repair or replace. B. Coverages lF-Personal Property and 2A-Commercial Buildings at the lesser of: (1) the “actual cash value” of the property at the time of loss; (2) amount necessary to repair or replace the property; or (3) “limit of liability” under this policy applying to the property insured. At ¶ 10, the Policy sets forth a procedure for Appraisal if SAFECO, the Lender and/or the Borrower fail to agree on the amount of loss. It provides: 10. Appraisal. If the claimant and we fail to agree on the amount of loss, either can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal each shall select a competent, independent appraiser and notify the other of the appraiser’s identity within 20 days of receipt of the written demand. The two appraisers shall then select an umpire within 15 days. The claimant or we can ask a judge of a court of record in the state where the “insured location” exists to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers submit a written report of agreement to us, the amount agreed upon shall be the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss. Each appraiser shall be paid by the party selecting that appraiser. We shall pay 50% of the other expenses of the appraisal and 50% of the compensation of the umpire. The remainder shall be paid by the party with whom we could not reach agreement. If both you and the “borrower” did not agree both you and the “borrower” shall pay the remainder equally. Finally, the Policy provides how a loss payment will be made. Losses to the Property are adjusted with the Lender and losses to personal property are adjusted with the Borrower: 15. Loss Payment. A. All losses except losses under Coverage IF — Personal Property: We will adjust all losses with you. We will pay you but in no event more than the amount of your interest in the “insured location”. Amounts payable in excess of your interest will be paid to 102the “borrower” unless some other person is named by the “borrower” to receive payment. Loss will be payable 30 days after we receive your proof of loss and: (1) reach agreement with you; (2) there is an entry of final judgment; or (3) there is a filing of an appraisal award with us. B. Losses under Coverage IF — Personal Property: We will adjust all losses with the “borrower”. We will pay the “borrower” unless some other person is named by the “borrower” to receive payment. Loss will be payable 30 days after we receive the “borrower’s” proof of loss and: (1) reach agreement with the “borrower”; (2) there is an entry of final judgment; or (3) there is a fifing of an appraisal award with us. C. The Claim On or about September 24, 2004, the Property was damaged by fire. Borrower immediately notified OOMC of the loss. OOMC provided Borrower with contact information for SAFECO to enable Borrower to file a claim for the Fire loss. Borrower promptly contacted SAFECO to initiate the claim. SAFECO engaged Crawford and Company (“Crawford”) to inspect the damage and prepare an estimate of the cost to repair the Property. A representative of Crawford inspected the Property on October 14, 2004. A repair estimate was completed on October 25, 2004 which estimates the amount of the loss to the Property as: Actual Cash Value $16,346.17 Less Deductible 2,600.00 Net Claim $16,846.17 Total Recoverable Depreciation 1,316.67 Net Claim if Depreciation Recovered $17,161.74 Borrower was aware of the amount of the Crawford estimate. On or about November 22, 2004, SAFECO issued a check to OOMC in the amount of $15,846.17 without notice to or the consent of the Borrower. OOMC placed the funds in a restricted escrow account. Debtor incurred a fee on November 11, 2004 for trash removal from the cleanup after the Fire and incurred $500 per month in hotel charges for four months or a total of $2,000 while unable to five in the Property. Debtor calculates a loss of personalty in the Fire in the amount of $1,490. On December 3, 2004, OOMC mailed a letter to the Borrower regarding the insurance proceeds. It was a standard form letter and was inaccurate. The letter states in part: Thank you for contacting our office regarding the insurance claim check you have received. Since the claim check exceeds $10,000.00, we have outlined the following guidelines in order to process your claim. In the event your total claim exceeds 30,000.00, then these procedures may change. 1) Have the check endorsed by ALL fisted parties and forward the check to: Option One Mortgage Corporation Attention: Loss Draft Department P.O. Box 53930 Irvine, CA 92619-3930 2) Sign and return the enclosed Insurance Claim Affidavit form. 3) Submit a copy of the Loss of Damage worksheet report, prepared by your insurance company. 4) Submit a copy of the itemized construction and contract bid, including 103their draw schedule and copies of permits and/or building plans (if applicable.) 5) Have your contractor sign a Conditional Waiver of Lien. Please use the enclosed form or the form provided by your contractor. HZ 164 020 Z24 Upon receipt of all documentation referenced above, we will release the first of three draws within 48 hours to begin work. The letter refers to an insurance claim check received by the Borrower. The check was tendered to OOMC by SAFE-CO. It was never in the Borrower’s possession. Debtor proceeded to contact a contractor in an effort to comply with the requirements of the December 3, 2004 letter. On December 27, 2004, the contractor prepared a letter addressed to Option One and a proposal to repair the Property for $44,780. The contractor faxed the estimate to a number believed to be that of OOMC or SAFECO. OOMC denies receipt of the correspondence. Communications broke down. OOMC continues to hold the SAFECO insurance proceeds in escrow. The monies held are not sufficient to complete the repair to the Property. The cost to repair the Property is $44,780. We credit the testimony of Debtor’s contractor. Rather than do an estimate based on square footage as SAFECO’s adjuster did, Debtor’s contractor described a room by room estimate of what repairs were necessary to restore the Property to pre-Fire condition. Debtor returned to the Property in March, 2005. Debtor is able to utilize 3 or 4 of the 8 rooms in the Property. It has no operating furnace. Heat is generated with a fireplace and electric space heaters. The bankruptcy case followed. Discussion The mortgage placed no duty or obligation on OOMC to insure the Property. The obligation to insure the Property rested with the Borrower. If the Borrower failed to provide the required insurance, OOMC had the option to obtain insurance and add the cost of such insurance to the Borrower’s debt. “[W]hen the mortgagee is not under a duty to effect insurance, but merely has an option to do so, an election to exercise such option obligates it to look after the interests of the mortgagor as well as its own.” In re Barbel, 191 Fed.Appx. 101, 104 (3d Cir.2006) quoting 4 Couch on Ins. § 65:7 (3d ed.). See also Warrener v. Federal Land Bank of Louisville, 266 Ky. 668, 99 S.W.2d 817 (Ky.1936). When OOMC elected to force-place insurance with SAFECO, the insurance was not for its sole benefit, but as made clear by the Policy provisions, was also intended to protect the Borrower. The language of the SAFECO policy contemplates the situation we have here where SAFECO, OOMC and the Borrower fail to agree on the amount of the loss. In this case, OOMC accepted a check in payment of the loss from SAFECO without consulting the Borrower regarding the sufficiency of the amount, in default of its duty to look after the interests of the mortgagee as well as its own. The amount OOMC chose to accept does not represent the reasonable value of the loss sustained. We credit the Debtor’s testimony of her efforts to resolve the issues and to get the repairs completed to the Property. Following the Fire, she immediately contacted OOMC. OOMC directed the Debtor to SAFECO. Debtor immediately contacted SAFECO. After OOMC received the payment from SAFECO, OOMC sent the Debtor the letter of December 3, 2004. At best, the letter must have confused the Debtor. It *104referred to the insurance claim cheek that the Debtor had received, when in fact Debtor receiving nothing. Debtor was living in a motel at the time and had every incentive to get the Property repaired. Following receipt of the December 3 letter, she contacted a contractor who then' inspected the Property and, by December 27, 2004, prepared a proposal and faxed it. While OOMC indicates that it never received the proposal, we find that either SAFECO or OOMC had knowledge of the proposal and credit Debtor’s testimony that she was directed back and forth between OOMC and SAFECO several times. OOMC is liable to account to the Borrower for the difference between the amount accepted and the actual amount of loss. Conclusion The Fire caused $44,780 in damage to the Property. OOMC had an obligation to look after the Debtor’s interests as well as its own in resolving the Fire loss claim with SAFECO. OOMC failed to meet that obligation and is liable to the Debtor for the cost of restoration of the Property.2 An appropriate Order will be entered. ORDER This 1st day of February, 2007, in accordance with the accompanying Opinion, it shall be, and hereby is, ORDERED that judgment is entered in favor of Carrie L. Williams and against Option One Mortgage Corp. in the amount of $44,780. . The within Opinion constitutes this Court’s findings of fact and conclusions of law. . SAFECO was not made a party to this action. We make no determination whether SAFECO has fulfilled its obligation under the Policy between it and OOMC. Likewise, we make no determination whether SAFECO remains liable to the Debtor for loss of personal property.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494151/	MEMORANDUM OPINION DOUGLAS D. DODD, Bankruptcy Judge. The acrimonious reorganization of Char-is Hospital, L.L.C. began in 2001. The court converted the failed reorganization to a chapter 7 liquidation after a confirmed liquidating plan unwound. The extent to which the debtor’s post-confirmation affairs departed from the confirmed plan’s scheme, and the extent of its deviations, only became evident during hearings on compensation applications filed by CalMed Consulting, Inc. (“CalMed”), the liquidator appointed pursuant to the Amended Third Immaterial Modification to Second Amended Liquidating Plan;1 and its counsel, Jones, Walker, Waechter, Poitevent, Car-rére & Denegre, L.L.P. (“Jones Walker”). At the same time the court took up a motion to approve CalMed’s final report and other matters. This opinion addresses the compensation applications and CalMed’s report. Facts I. Procedural History of the Chatis Hospital Reorganization International Cooperative Consultants, Inc. d/b/a ICC Financial Group (“ICC”) filed its “Amended Third Immaterial Modification to Second Amended Liquidating Chapter 11 Plan for Charis Hospital, LLC filed by ICC Financial Services” (“Confirmed Plan”), which the court confirmed September 28, 2001.2 Though the Second Amended Liquidating Chapter 11 Plan that ICC originally filed (“Original Plan”) was amended four times before confirmation to resolve specific issues, the final Confirmed Plan lacks clarity.3 Most crucial for purposes of this opinion, Confirmed Plan article 16.14 states that “All immaterial modifications to the Second Amended Plan shall supercede [sic] any conflicting language in the Plan itself.” (emphasis added.) This language is critical to the 193difference between the liquidator’s role under the Confirmed Plan and that contemplated by earlier versions of the proposed plan. The Original Plan anticipated the sale of Charis Hospital. That plan called for appointment of a liquidating trustee if the sale were not consummated, and allowed the trustee to hire and pay professionals without court approval.4 In contrast, article 10.3 of the Second Immaterial Modification to the Original Plan, which addresses the liquidation of unsold assets of the debtor if the proposed sale took place, provided for court appointment of an independent entity, chosen by the Internal Revenue Service, to liquidate the debtor’s accounts receivable. That independent entity was to report to the court on a quarterly basis concerning its billing and collection efforts. Second Immaterial Modification to Original Plan, Article 10.3, ¶1. Unfortunately for one desiring to divine the parties’ intent, the Confirmed Plan (which includes the Amended Third Immaterial Modification) also contains an Article 10.3. That article provides for appointment of a liquidator on motion of the Internal Revenue Service “to dissolve the debtor in the most tax efficient manner,” and to take other actions. The Confirmed Plan also requires the liquidator to seek court approval to hire counsel to pursue certain legal actions.5 Familiarity with these documents is essential to understanding what happened after the plan was confirmed. After confirmation, the Internal Revenue Service moved ex parte to appoint CalMed Consulting, Inc. to serve as liquidator for all matters other than the disposition of the debtor’s movable property.6 The court approved CalMed’s appointment by order entered October 26, 2001.7 The order states that CalMed was selected to serve as the Court-appointed liquidator charged with effectuating the dissolution of the Debtor in the most tax efficient way, to take any other actions necessary to effectuate the dissolution of the Debt- or under State law, to bill all claims that are outstanding; collect and liquidate all accounts receivable of the Debtor; report to the Court on a quarterly basis; and comply with all other requirements 194set forth in the confirmed liquidating plan. The application to appoint liquidators recited in paragraph 5 that the liquidators would submit applications setting forth the terms and conditions of their compensation once they had been appointed.8 Accordingly, on January 7, 2002 CalMed applied for approval of its compensation and reimbursement arrangement.9 The May 14, 2002 Order Approving Terms of Compensation and Reimbursement for CalMed Consulting, Inc. Liquidator10 specified the terms on which CalMed would be paid, and also provided that the liquidator’s compensation was subject to bankruptcy court review and approval. Indeed, the order’s final paragraph recited that “all compensation and reimbursement for expenses incurred shall be subject to review and approval by and paid only as provided by order of this Court, including any subsequent Order establishing a procedure for the payment of the Liquidator and its professionals.” Meanwhile, CalMed also had applied to retain Jones Walker as its counsel pursuant to Bankruptcy Code § 327.11 CalMed’s application recited in paragraph 8 that “[a]ll of Jones Walker’s fees and expenses will be subject to Bankruptcy Court approval.” In an accompanying verified statement, a Jones Walker partner recited that “[i]t is understood that, in accordance with the Bankruptcy Code, final payment and all interim payments are subject to approval by this Court.” The January 15, 2002 order granting the application authorized the liquidator to employ Jones Walker on the terms and conditions set forth in the application, and stated that Jones Walker would be compensated “as provided by order of this Court, including any Order that might subsequently be entered that establishes a procedure for the payment of the Liquidator and its professionals.” 12 The record contains no indication of any later order modifying the process of compensating the liquidator and its counsel, or relieving them from obtaining court approval for payment of fees and reimbursement of expenses. After CalMed and its counsel were appointed, the liquidator filed a number of lawsuits to recover avoidable transfers. All these adversary proceedings were resolved by default judgment or compromise within nine months after their filing.13 The record also reflects motion practice concerning claims, including the application for compensation of debtor’s counsel, and other matters typical of the post-confirmation period in any liquidating chapter 11. Notably absent from the record are any reports from CalMed between its ini195tial report of January 15, 2002 and July 11, 2003, despite the February 8, 2002 order directing CalMed to file status reports every 60 days.14 The first hints of problems in the Charis liquidation surfaced when the debtor’s former insiders, William and Carolyn Carroll (“Carrolls”) and Michael and Pamela Alon-so (“Alonsos”), objected to the allowance and payment of compensation to former debtor’s counsel. They objected in part because the liquidator had not complied with the February 8, 2002 order directing CalMed to submit status reports.15 At about the same time, another insider, William Carroll, III, moved for an order directing the liquidator to file more comprehensive reports.16 At an August 8, 2003 hearing, the court ordered the liquidator to resume filing status reports every 60 days, and gave it ten days to file all reports for periods before that covered by the July 11, 2003 report.17 CalMed filed its first 60-day report on September 11, 2003 and drew an objection from William Carroll, III,18 culminating in the court’s ordering CalMed to provide to the Carrolls’ attorney income and expense statements, bank statements, canceled checks, a narrative of developments over the previous 60 days, receipts, disbursement schedules and Medicare reports.19 On December 31, 2003, the liquidator filed the October and November 2003 reports.20 However, over the next three months CalMed filed no reports, so William Carroll, III again moved to compel the liquidator to produce them.21 Before CalMed filed any more reports, the IRS moved to terminate the liquidator and for a final accounting, alleging that CalMed’s liquidation had ceased to be effective.22 The United States Trustee joined in the request, claiming that CalMed had not provided disbursement information and that the liquidator had failed to pay a substantial amount in quarterly fees.23 After an April 23, 2004 hearing, the court terminated the liquidator and converted the case to a chapter 7 liquidation.24 The court also orally ordered the liquidator to file a final accounting in 30 days. On motion of the liqui196dator, the court extended that deadline to July 30, 2004.25 The conversion brought no conclusion to the wrangling. The United States Trustee next was forced to move for an order compelling CalMed to turn over information the court specified at the April 2004 hearing.26 CalMed later filed its Liquidator’s Report of Administration27 and then numerous monthly reports, which in turn triggered a round of additional objections to the accounting, and requests for further relief.28 In November 2005, the United States Trustee moved to compel CalMed to file an application for compensation.29 The court granted the unopposed motion, and its December 5, 2005 order set a deadline of December 21, 2005 for the filing of that application.30 In December 2005, the United States Trustee moved to examine Jones Walker’s fees.31 It also moved to compel the liquidator to account for proceeds of the debt- or’s movables.32 After a January 6, 2006 hearing, the court granted the motion to examine fees and directed Jones Walker to file a fee application within thirty days.33 The United States Trustee’s several motions allege that without the court’s approval and in violation of its orders, the liquidator paid professional fees, claims and its own compensation. II. Hearing on Compensation and Final Report Stacy Calvaruso testified for the liquidator at the hearing on the liquidator’s and its counsel’s applications for compensation and on the liquidator’s final report. Calva-ruso was CalMed’s chief executive officer and majority shareholder.34 She testified that she understood that CalMed’s job as liquidator was to collect Charis’s accounts receivable. She also testified about CalMed’s difficulties collecting the debtor’s receivables, including missing documentation, the challenge of recreating patient billing statements from doctors’ charts, 197and other problems including unpaid treating physicians’ refusal to sign medical records CalMed needed to bill claims. According to Calvaruso, CalMed deposited all funds it collected on behalf of the debtor, including proceeds of the Charis hospital sale, into a single account at the Hibernia National Bank, from which it paid claims. CalMed paid $350,000 of the Internal Revenue Service’s $457,000 chapter 11 administrative priority claim. Ms. Calvaruso testified that she did not pay the claim in full based on advice of CalMed’s counsel that the partial payment was a settlement of the IRS’s prepetition and postpetition claims. The evidence revealed that CalMed did not comply with the court’s orders concerning the liquidator. Specifically, the court had ordered CalMed to obtain a fidelity bond in February 2002.35 CalMed did not comply with the court’s December 7, 2005 order directing the liquidator to provide evidence of the fidelity bond, because it never obtained a bond. Calvaruso admitted that CalMed decided not to obtain a fidelity bond based on her understanding that CalMed’s errors and omissions insurance covered liabilities that a fidelity bond would have covered. She also conceded that CalMed had not filed status reports every 60 days as the court ordered, but testified that she had understood that Judge Phillips did not want status reports every 60 days, despite the February 8, 2002 order. Ms. Calvaruso also testified that she did not realize that CalMed was required to file fee applications. The record contains no justification for CalMed’s failure to obey the court’s orders, including any corroboration, such as a hearing transcript, for the liquidator’s contention that Judge Phillips intended to modify his order requiring status reports. Glyn Miller, C.P.A., a financial analyst on the United States Trustee’s staff, prepared several reports36 based on his review of the liquidator’s final report, bank statements and the claims register. Mr. Miller testified that CalMed’s monthly fee exceeded deposits to the Charis account from November 2002 through July 2003 (with the exception of April 2003). Mr. Miller also opined that CalMed should have “given up” collection of the debtor’s accounts receivable when collection ceased to be cost effective. Mr. Miller’s research revealed that CalMed paid $178,210.27 in attorney’s fees, including those of its own counsel. It also paid itself a liquidator’s fee of $188,732.17, though it had stopped collecting its $3,500 monthly fee in mid-2003. The court approved only three of the legal fee payments, for a total of $72,729.68.37 Mr. Miller concluded from his review of the liquidator’s final report and supporting documents that in May 2002 CalMed held enough money to pay the Internal Revenue Service claim in full. He also opined that because the liquidator only paid the IRS claim in part, notwithstanding a court order directing its payment,38 penalties 198and accruing interest increased the claim by $62,000. However, Mr. Miller admitted on cross-examination that he could not opine as to the amount the liquidator should have reserved to pay chapter 11 administrative claims, some of which had not even been resolved in May 2002. On redirect, the UST offered into evidence the February 11, 2002 court order setting deadlines, including the deadline for filing all proofs of claim and for the liquidator to object to all proofs of claim.39 That order also scheduled a March 15, 2002 hearing to take up the allowance and payment of claims, including administrative expense claims. At the March 15, 2002 hearing, the court directed counsel for CalMed to prepare orders identifying the approved administrative claims and the amounts of those claims, and authorizing a reserve for disputed claims and UST quarterly fees. No evidence established whether counsel for CalMed ever submitted the proposed orders to the court, and in any case neither of the orders ever was signed and entered. As a result, CalMed never was authorized to pay the claims identified at the March 15, 2002 hearing, and it did not establish a disputed claim reserve. Analysis I. CalMed’s and Jones Walker’s Compensation A. Plan Provisions The Original Plan provided for appointment of a liquidating trustee only if the proposed sale of Charis Hospital was not consummated. However, the court never appointed that liquidating trustee because the hospital was sold. Instead, the Original Plan was modified to provide that independent third parties would liquidate Charis’s remaining assets.40 The revised plan did not give the receivables liquidator the powers that the earlier version of the plan would have conferred on the liquidating trustee, who was to be a trustee of a trust formed pursuant to state law. Instead, the revised plan provided that the non-trustee liquidator would bill and collect the debtor’s receivables, and dissolve the debtor using state law procedures, while regularly reporting to the court concerning its progress.41 B. Court Orders Jones Walker prepared the May 14, 2002 order approving CalMed’s compensation and reimbursement. That order recites that CalMed’s fees and expenses are subject to the court’s review for approval and payment. So too, the January 15, 2002 order employing Jones Walker as CalMed’s counsel also specifically provides that Jones Walker’s compensation was subject to court approval.42 No later order modified either of these two orders, nor was either order appealed. The record does not reflect any orders approving payment of fees or expenses for CalMed or Jones Walker. Jones Walker argues that neither it nor CalMed should have been required to obtain court approval of their post-confirmation compensation. Jones Walker maintains that Judge Phillips said at a February 8, 2002 hearing that the eom-199pensation arrangement he intended to approve was not subject to any court review until the liquidator’s final report was submitted. No party submitted a transcript of the February 8, 2002 hearing or any other hearing, so whether Judge Phillips may have said what Jones Walker contends cannot be known. However, in any case the written orders of January 5, 2002 and May 14, 2002 are controlling, regardless of any statements Judge Phillips may have made from the bench. See Hendrick v. Avent, 891 F.2d 583, 586 (5th Cir.1990) (bankruptcy judge’s statements during hearing that the bankruptcy trustee should investigate facts surrounding the sale being approved at hearing did not affect the finality of written bankruptcy court order approving the trustee’s sale). C. Review of Compensation The court approved Jones Walker’s employment as counsel for CalMed pursuant to 11 U.S.C. § 327. Accordingly, reasonable compensation for the services rendered by Jones Walker was subject to the court’s review under 11 U.S.C. § 330. As courts of equity, bankruptcy courts have broad discretion regarding the professional fees awarded in bankruptcy proceedings. In re Prudhomme, 43 F.3d 1000, 1003 (5th Cir.1995); In re Anderson, 936 F.2d 199, 204 (5th Cir.1991). However, this alone does not confer upon this court post-confirmation jurisdiction to review Jones Walker’s fees. Although bankruptcy court jurisdiction is more limited after confirmation than it is before a plan is confirmed, In re U.S. Brass Corp., 301 F.3d 296, 303-305 (5th Cir.2002), bankruptcy courts retain jurisdiction after confirmation over “matters pertaining to the implementation or execution of the plan.” Id. at 304 (citation omitted). Specifically, the Fifth Circuit recently held in Matter of Network Cancer Care, L.P., 197 Fed.Appx. 284, 285, 2006 WL 2034425 (5th Cir.2006)43 that review of fees paid for post-confirmation legal services, and orders requiring disgorgement of those fees, remained within the bankruptcy court’s jurisdiction after a plan is confirmed. Moreover, ordering professionals compensated from the estate to disgorge fees lies within the court’s inherent authority to regulate professional compensation in bankruptcy proceedings. Prudhomme, 43 F.3d at 1003. Accordingly, the fees CalMed paid without court approval to both Jones Walker and itself remain subject to disgorgement. Both the Confirmed Plan and court order specifically directed CalMed to bill and collect Charis’s receivables and regularly report to the court regarding its progress. It disobeyed these directives and also resisted production of information to parties in interest. Moreover, CalMed paid some administrative priority claims, but not others, for reasons that are impossible to divine from the record. CalMed also paid substantial sums both to itself and its attorney without court approval, despite unambiguous orders requiring it to obtain court approval for those payments. Although Matter of Barron, 225 F.3d 583, 585-6 (5th Cir.2000) limits a bankruptcy court’s review of professional compensation where the court previously had approved a compensation scheme, here orders specifically required court approval of CalMed’s and Jones Walker’s compensation. CalMed’s actions in its capacity as 200liquidator were inconsistent with the plan and court orders, and as a result the court will order it to disgorge all fees it received. Jones Walker’s representation of the liquidator also leaves much to be desired. The firm failed to assure the submission of the liquidator’s required monthly reports. The firm also failed to prepare and submit orders, including one concerning the fidelity bond and another memorializing the court’s March 15, 2002 rulings approving administrative claims and authorizing a reserve for disputed claims. As a result, no bond is available from which parties in interest can pursue payment of unpaid allowed claims, and the administrative claims that were allowed cannot be determined — if any funds even remain or can be recovered to pay those claims. Despite these serious oversights, CalMed’s counsel did initiate and conclude numerous avoidance actions and other motions to facilitate the liquidation. The court has reviewed the fee application Jones Walker eventually filed pursuant to the court’s order. According to Mr. Miller’s review of the CalMed records, the firm billed the liquidator $92,245.23, and has been paid $76,260.04.44 Using as a guide the factors set out in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 718 (5th Cir.1974), overruled on other grounds Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct. 939, 103 L.Ed.2d 67 (1989), much of Jones Walker’s professional fees were reasonable and appropriate.45 However, the application is deficient in several respects. First, Jones Walker charged fees of $1,803.75 for services it performed before the court approved its employment. Second, the firm charged more than $200 per hour for many hours of services of Michael Perry, lead counsel on the engagement, whose hourly rate was set at $200 in the application for employment. However, some of Mr. Perry’s time was billed at $185 per hour. Jones Walker’s fee request will be reduced by $3,675.10, the difference between the value of time billed at various rates over $200 per hour and that billed at $185. Third, the firm’s time records submitted with the compensation application reflect numerous entries where time spent on separate tasks was lumped together, a practice disapproved by most bankruptcy courts and specifically barred by Local Rule 2016-l(a)(9)(C). The fees for services described in this manner total $13,040, and the court disallows half of that sum, or $6,520. Finally, Jones Walker billed $34,728 for representing the liquidator in litigation Bank One, N.A. filed against the Carrolls (Case. No. 02-1079) and the Carrolls filed against Bank One and others (Case. No. 02-1004). The court remanded the first adversary proceeding to state court on December 6, 2002, four months after the liq201uidator intervened and removed it to federal court. Six days later, on December 12, 2002, the second case was dismissed for lack of jurisdiction. Neither Jones Walker nor CalMed have not proven that the Charis creditors derived any benefit from this litigation. Accordingly, the court will reduce Jones Walker’s fees for the Carroll litigation by $13,884, which represents one-half of the fees charged for the Carroll litigation, minus $3,480 previously deducted from Jones, Walker’s fees due to hourly billing over $200. In sum, the court approves the compensation paid to Jones Walker in the amount of $66,362.38, but disallows the $15,985.19-in fees Jones, Walker has not been paid and will order the firm to disgorge $9,897.66 of the fees it received. II. Liquidator’s Final Report The materials attached to the Supplemental Motion to Appoint Liquidators portray CalMed as experienced in health care accounts receivable management.46 However, the evidence supports a finding that Calvaruso and CalMed miscalculated the amount of work CalMed would have to perform as Charis’s liquidator, and so was ultimately overwhelmed by problems collecting the Charis receivables. Its difficulties collecting the receivables required greater resources than CalMed anticipated when it accepted the appointment, and also resulted in CalMed’s receiving less income from the project than the liquidator hoped. Despite this, CalMed never sought relief from the October 26, 2001 order appointing it, and never sought to resign. Instead, it delayed the parties and the court by repeatedly resisting the parties’ efforts to obtain information concerning the progress of its work. CalMed should have known that it remained obligated to provide periodic reports of its progress collecting the debtor’s receivables and paying claims. The Confirmed Plan and the February 8, 2002 court order unambiguously required it to do so. CalMed offered no corroboration for its understanding that Judge Phillips relieved the liquidator of its charge. Ultimately, parties in interest were compelled to involve the court by moving repeatedly for orders requiring CalMed to fulfill its obligation to file monthly reports after its first January 2002 report. Had CalMed made that information accessible to parties in interest, they could have assessed its progress and perhaps have been able to fashion a remedy that would have spared all parties expense and brought about a more favorable result. Finally, CalMed, allegedly on the advice of its counsel, paid only $350,000 of the IRS chapter 11 administrative claim, instead of the full $457,000 claim. As a result, penalties and interest increased the claim by $62,000. The United States Trustee established that CalMed could have paid the IRS claim in full in May 2002 had it not paid its fees, legal fees (including those of its attorney) and other administrative expense claims that the court had not approved. It also failed to set aside a reserve for disputed claims, ensuring that similarly situated administrative priority creditors would not be paid if their claims eventually were allowed. CalMed’s errors and omissions, together with those of its counsel, have created significant problems that cast doubt on the accuracy of the liquidator’s final report. As a result, the court declines to approve the report. 202Conclusion The outcome here underscores the risk of unsupervised liquidations after plan confirmation, and need for diligence by all parties in interest and their counsel to guard against frustrated expectations. An unhappy outcome for many of Charis’s creditors may have been inevitable, but the result may have been ameliorated had the parties involved in the case taken more interest in the liquidation process once Charis’s plan was confirmed. CalMed by separate order will be directed to disgorge to the chapter 7 trustee all fees and expenses paid to it. Its counsel, Jones Walker, will be awarded fees of $66,362.38, costs of $2,543.73 and directed to disgorge $9,897.66 of the fees it received. Finally, the court will enter a separate order denying approval of the liquidator’s final report. . (P-160). CalMed was appointed liquidator by the court’s October 25, 2001 order (P-185). . (P-161). Although the order confirming the plan also mandated the filing of a motion for final decree within 45 days of the entry of that order, no party in interest ever has moved for a final decree. . Second Amended Liquidating Chapter 11 Plan for Charis Hospital, Article X, § 10.7. (P-104). . Because a confirmed plan essentially is a contract, ambiguities in a plan must be resolved by applying standard principles of contract interpretation. In re Offshore Diving and Salvaging, Inc., 226 B.R. 185, 188 (Bankr. E.D.La.1998). State law governs the construction of a contract. In re Haber Oil, Inc., 12 F.3d 426, 443 (5th Cir.1994). Louisiana law instructs a court to construe a contract provision, where possible, to give effect to the provision, rather than construing it in a way that renders the provision ineffective. La. Civ.Code art.2049. Article 10.1 of the Original Plan is titled “Sale of Assets,” which is comparable to the heading of article 10.3 of the Second Immaterial Modification to the Original Plan. Similarly, article 10.2 of the Original Plan bears the heading "Dissolution of Corporate Entities,” which is consistent with the heading of article 10.3 of the Confirmed Plan. The numbering of the articles in the Second Amended Immaterial Modification to the Original Plan and in the Confirmed Plan apparently was intended to correspond to the numbering of the Original Plan, so the use of "Article 10.3” in both modifications was simply an error. This interpretation gives effect to the provisions of both modifications and comports with Confirmed Plan article 16.14’s statement that all modifications to the Original Plan superseded any conflicting language in the Original Plan itself. . (P-170). The court appointed Bonnette Auction Company, L.L.C. to liquidate the debtor’s movables. . (P-185). . Ex Parte Motion to Appoint Liquidators, ¶ 5. A Supplement to Ex Parte Motion to Appoint Liquidators (P-173) provided additional information about the two companies to be engaged, but did not specify the method of compensating them. . (P-221). The minute entry from a February 8, 2002 hearing indicates that the liquidator's compensation remained an issue even then, four months after confirmation. . (P-279). The liquidator's counsel submitted the order. For reasons not apparent from the record, the order granting the application was not signed until after the appointment of the current bankruptcy judge, successor to Bankruptcy Judge Louis M. Phillips, who had presided over plan confirmation and the first several months of the Charis liquidation. . (P-220). CalMed's reasons for citing 11 U.S.C. § 327 in support of its application to employ Jones Walker are not apparent from the record. . (P-226). . The liquidator filed all the complaints to recover avoidable transfers in March 2003. . (P-239). . (P-355, P-363). The Carrolls and the Al-onsos argued that the liquidator's July 11, 2003 Supplemental Interim Report was incomplete. Since their initial complaints about the liquidator's failings, the reason for the insiders’ objections has become clear: they feared responsible party liability for the debtor’s unpaid payroll taxes incurred during the chapter 11 reorganization. The Alonsos contended that CalMed should have collected enough funds to pay the IRS tax claim in full, or at least reduce it. However, in the August 20, 2003 ruling on debtor’s counsel's fees, the court held that the Carrolls had no standing to contest the fees because they had conceded they would receive no distribution on their unsecured claims. (P-372). . (P-362). . Order setting September 11, 2003 deadline for filing interim reports. (P-370). . (P-378). . This ruling is reflected only in the minute entry for the December 12, 2003 hearing on William Carroll’s objection to the September 11, 2003 report and a status conference set by the court. Apparently, no order was submitted to the court. . (P-385). . (P-387). . IRS's Motion to Terminate Liquidator and for Liquidator to Submit a Final Accounting (P-388). . U.S. Trustee’s Response to Motion to Terminate Liquidator and for Liquidator to Submit Final Accounting (P-394). . (P-395). . (P-413). In the meantime, the IRS obtained an order compelling the liquidator to file Charis’s federal income tax returns for the years 2000 through 2003. (P-402). . Order Granting United States Trustee's Motion to Compel. (P-433). . (P-442, P-444). . The matters included multiple Motions to Compel Liquidator to File Financial Accounting and Reports filed by William Carroll, III (P’s-362, 378 and 387); Motion to Terminate Liquidator and for Liquidator to Submit Final Accounting filed by the Internal Revenue Service (P-388); Motion to Compel CalMed to Provide Distribution Information filed by the United Stated Trustee ("UST") (P-428); Motion to Compel CalMed to File for Compensation and Reimbursement of Expenses filed by UST (P-526); Motion to Examine Fees of Jones, Walker filed by UST (P-531); Motion to Compel Filing of an Accounting of Liquidation of Movables of Charis Hospital filed by UST (P-537); Motion to Compel CalMed to Comply with Court Order and for Sanctions filed by UST (P-545) and Objections to the Liquidator’s Final Report filed by William and Carolyn Carroll (P-473), William Carroll, III (P-474) and the UST (P-600). . (P-526). . (P-530). . (P-531). . (P-537). . January 23, 2006 Order Granting U.S. Trustee’s Motion to Examine Fees Of Jones, Walker, Waechter, Poitevent, Carrére & De-negre, L.L.P., Counsel for Calmed Consulting, Inc., the Liquidator (P-544). . Calvaruso testified that she owned fifty-one percent of its shares, and that the company had been dissolved. CalMed offered no documents to corroborate that the corporation had been dissolved formally. . Order to Show Cause regarding fidelity bond. (P-535). The minute entry of the hearing held on February 2, 2002 reflects that the liquidator’s counsel was to submit an order concerning a bond for CalMed. . Exhibits UST 4, 5 and 6. . The court never approved an award of fees for CalMed or its attorney: in fact, neither ever applied for compensation until the court ordered them to do so on December 5, 2005 and January 23, 2006, respectively. .Mr. Miller was mistaken on this point. The court’s January 14, 2002 order did not direct payment of the IRS claim. It merely allowed the claim. . (P-239). . Second Immaterial Modification, § 10.3 (P-153). . Second Immaterial Modification to Original Plan (P-153) and Confirmed Plan (P-160). .Jones Walker’s application to be employed as CalMed's counsel (P-220) sought employment pursuant to 11 U.S.C. § 327(a). The January 15, 2002 order approving the firm's employment includes language regarding lack of adverse interest and disinterestedness that tracks the provisions of § 327(a). . Unpublished opinion. See Fifth Circuit Rule 47.5.4. An unpublished opinion can be persuasive and, indeed, Matter of Network Cancer Care provided sufficient guidance on a unique point of law to have merited publication, in this court’s view. . See Exhibit UST 5. . Those guidelines are: (1) The time and labor required. (2) The novelty and difficulty of the questions. (3) The skill requisite to perform the legal service properly. (4) The preclusion of other employment by the attorney due to acceptance of the case. (5) The customary fee. (6) Whether the fee is fixed or contingent. (7) The time limitations imposed by the client or the circumstances. (8) The amount involved and the results obtained. (9) The experience, reputation, and ability of the attorneys. (10) The "undesirability” of the case. (11) The nature and length of the professional relationship with the client. (12) Awards in similar cases. Johnson, 488 F.2d at 718-719. . Exhibit 2 to P-373.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494152/	ORDER RE: MOTION FOR SUMMARY JUDGMENT PAUL J. KILBURG, Bankruptcy Judge. This matter came before the undersigned on December 15, 2006 pursuant to assignment. Plaintiff/Trustee Renee Han-rahan was represented by Attorney Abbe Stensland. Defendant Martinson Construction Co. was represented by Attorney Tom Fiegen. After hearing arguments of counsel, the Court took the matter under advisement. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(E). STATEMENT OF THE CASE Trustee seeks summary judgment decreeing that Martinson Construction does not have a valid lien on the real estate against which Martinson filed its mechanic’s lien. She requests the Court order Martinson to release its lien. STATEMENT OF FACTS Martinson Construction Co. performed concrete work on Debtor’s property between December 2004 and October 18, 2005. An involuntary bankruptcy petition was filed against Debtor on October 21, 2005. On November 8, 2005, Martinson filed a motion for relief from the automatic stay to perfect its mechanic’s lien on the property. This motion was granted with the consent of Trustee by order filed December 1, 2005. Martinson filed its mechanic’s lien on December 8, 2005, claiming a lien of $86,540. The real estate description described on its mechanic’s hen filing is that set out in Trustee’s Exhibit SJ103 (“Property A”). This legal description includes two parcels. Martinson’s corporate counsel prepared the mechanic’s lien based on information received from the Grundy County Recorder regarding the legal description of Debtor’s real estate. Martinson actually performed its concrete work on a separate parcel (“Property B”). The County Recorder did not include Property B when responding to Martin-son’s counsel’s request for the legal description of Debtor’s real estate. Thus, Martinson poured concrete on Property B but filed its mechanic’s lien against Property A. On October 23, 2006, the parties filed a stipulation in Debtor’s bankruptcy case in which both Trustee and Martinson acknowledge that Martinson’s mechanic’s lien described Property A, rather than Property B. Trustee has filed this stipulation with the Clerk of Court in Grundy County. Now, however, Martinson asserts that a portion of its work, valued at $150, was performed on Property A. The Court notes that Property A and Property B are contiguous and make up the total of the land on which Debtor operated a farm implement dealership. Trustee asserts that Martinson’s mechanic’s lien did not attach to Property A and requests summary judgment ordering Martinson to release its lien. Martinson argues that it justifiably relied on the Grundy County Recorder’s information re277garding the legal description when filing its mechanic’s lien. It asserts Trustee had notice of its lien on the date the bankruptcy petition was filed because the concrete was still green at that time. Martinson also argues Trustee’s attempt to “lien strip” violates the Bankruptcy Code. CONCLUSIONS OF LAW A motion for summary judgment may only be granted when there are no material facts in controversy, and the moving party is entitled to a judgment as a matter of law. Fed. R. Bankr.P. 7056; Fed. R.Civ.P. 56(a). In considering a motion for summary judgment, the Court views the evidence in a light most favorable to the nonmoving party. In re Marlar, 267 F.3d 749, 755 (8th Cir.2001). The moving party has the burden of showing that there is no genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). THE STIPULATION As an initial matter, the Court finds that Martinson is bound by the October 23, 2006 stipulation in which it agreed that it performed its concrete work on property other than that against which it filed its mechanic’s lien. Stipulations by the parties regarding questions of fact are conclusive. Gander v. Livoti 250 F.3d 606, 609 (8th Cir.2001). “Valid stipulations are controlling and conclusive, and courts must enforce them.” Id. In light of the parties’ stipulation, Martinson cannot now claim some if its work, to the value of $150, was performed on Property A against which it filed its mechanic’s lien. MECHANIC’S LIENS “A mechanic’s lien is a creature of the statute, and in order that a lien may be created there must be a substantial compliance with the terms and provisions of the statute.” Bernstein v. Alcorn, 194 Iowa 1109, 190 N.W. 975, 976 (1922). Iowa law grants a lien to a creditor who has performed services which improve the affected real estate. Iowa Code § 572.2. This lien may be perfected under section 572.8 which requires the filing of a statement of account of the demand setting forth, among other things, “[t]he correct description of the property to be charged with the lien.” Iowa Code § 572.8(2). No Iowa courts have directly addressed the effect of a mechanic’s lien statement filed with an incorrect description of the property. Other courts have considered the issue. In Butler Supply & Comm. Co. v. Citizens Bank, 175 S.W.3d 684, 686 (Mo. Ct.App.2005), the court found that the requirements of Missouri’s mechanic’s lien statute were not met where the description of the property on the lien statement was for a tract of land completely distinct from the one on which work was done and had different owners. Likewise, the court in McCarron’s Bldg. Center, Inc. v. Einertson, 482 N.W.2d 529, 532 (Minn.Ct.App. 1992), noted that an erroneous description on a mechanic’s lien statement is fatal when it plainly describes an incorrect lot and wholly excludes the property intended to be liened. See also 56 C.J.S. Mechanics’ Liens § 170 (1992); 53 Am.Jur.2d Mechanics Liens § 237 (2006) (noting a mechanic’s lien is insufficient if it does not describe the land upon which improvements were made but instead describes an entirely different tract of land); C.C. Marvel, Annotation, Sufficiency of Notice, Claim, or Statement of Mechanic’s Lien with Respect to Description or Location of Real Property, 52 A.L.R.2d 12, § 5[c], 1957 WL 11663 (1957) (setting out rule that “an entirely erroneous, misleading, or technically and unambiguously erroneous, 278description, as the case may be, is insufficient.”)- ANALYSIS Trustee’s Complaint and Motion for Summary Judgment present a fairly narrow request for relief. The question is whether Martinson has a lien against Property A. Based on the foregoing, the answer is no. The Mechanic’s Lien statement Martinson filed does not include the correct description of the property to be charged with its lien. It performed services which improved Property B. The description of the real estate included in its Mechanic’s Lien statement is for Property A. Martinson does not have a lien on Property A and should file a release of the Mechanic’s Lien. Martinson raises arguments which are not dispositive on the narrow issue presented herein. How Martinson came by the real estate description it used on its Mechanic’s Lien filing is not relevant. Simply, Iowa Code sec. 572.2 gives a creditor a mechanic’s lien on the property affected by the improvements it performs on it. Martinson did not perform improvements on the property described in its Mechanic’s Lien filing, Property A. Therefore, it does not have a lien on Property A and should file a release of the Mechanic’s Lien to correct the property record. WHEREFORE, Trustee’s Motion for Summary Judgment is GRANTED. FURTHER, Martinson Construction Co.’s Mechanic’s Lien does not attach to or constitute a valid lien against Property A, the real estate described in Trustee’s Exhibit SJ103. FURTHER, Martinson is ordered to file a release of the Mechanic’s Lien it filed describing Property A with the Grundy County Clerk of Court.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494153/	ORDER JOYCE BIHARY, Bankruptcy Judge. This adversary proceeding involves the question of whether the defendant trusts can appear as pro se litigants. The Court concludes that they cannot. The plaintiff Chapter 7 Trustee seeks, among other things, to avoid certain transfers and to recover three pieces of real property for the bankruptcy estate. The properties are 230 Woodward Avenue and 625 Atwood Street, both located in Atlanta, Georgia and 12230 Cumming Highway, located in Canton, Georgia. Plaintiff alleges that the real estate records reflect that interests in these properties were conveyed to 230 Woodward Trust, 625 Atwood Trust, and 12230 Cumming Highway Trust, respectively. Plaintiff names five trusts as defendants in this proceeding,1 and defendant Grant K. Gibson is named in the complaint as a defendant individually and as trustee of each of the defendant trusts. Mr. Gibson is not an attorney, but he filed a motion for a more definite statement on behalf of himself and the trusts.2 Plaintiff contends that Mr. Gibson cannot represent the defendant trusts, as trusts can only be represented in court by a licensed attorney (Docket # 20). Mr. Gibson filed a response, arguing that he as a non-lawyer is entitled to represent the defendant trusts. As best the Court can 364understand, Mr. Gibson argues that these are land trusts rather than business trusts, that he holds all the legal and equitable interests in these trusts, and that these trusts are deemed natural persons rather than artificial entities such that they have the same rights under law as an individual,including that of pro se representation in court (Docket # 27). Plaintiff argues and Mr. Gibson agrees that only a licensed attorney may represent an artificial entity such as a corporation, partnership, association, or trust in federal court. Rowland v. California Men’s Colony, 506 U.S. 194, 203, 113 S.Ct. 716, 721, 121 L.Ed.2d 656 (1993); C.E. Pope Equity Trust v. U.S., 818 F.2d 696, 697 (9th Cir.1987); See also Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir.1985) (stating the well established rule that a fictional legal person such as a corporation must be represented by a licensed attorney even when the non-attorney seeking to represent the corporation is its president and major stockholder); Knoefler v. United Bank of Bismark, 20 F.3d 347, 348 (8th Cir.1994) (holding that a nonlawyer trustee has no right to represent a trust pro se). Mr. Gibson recognizes that “many types of entities, including LLCs, partnerships, unincorporated association [sic], clubs, guardians and even certain types of trusts,” require representation by counsel in federal court. (“Defendant Gibson’s Objection to Trustee’s Motion to Strike,” hereinafter “Mr. Gibson’s Objection,” at 4). He attempts to distinguish “Massachusetts style business trusts” from “Illinois style land trusts,” contending that business trusts are required to have counsel in court, but that land trusts may be represented by their non-attorney trustees. The law cited by Mr. Gibson does not support his position. Mr. Gibson first distinguishes business trusts from land trusts by noting that business trusts can file for bankruptcy protection while land trusts cannot. He presents this material in both the body of his objection and in a lengthy footnote. (Mr. Gibson’s Objection at 6-7, 6 n. 1). There are several problems with Mr. Gibson’s presentation of the law. First, he refers to several cases without proper citation; he gives the names of some cases without providing the Court or opposing counsel with the name of the reporter, book number, page number,, name of court, or year of decision. In some cases, he provides the name of the case and name or location of the court, but omits any mention of the other information required for a proper citation. Second, Mr. Gibson appears to have copied most of the material on page 6 of his Objection from a 1997 article titled Off-Balance-Sheet Financing: Synthetic Leases, by John C. Murray, 32 Real Prop. Prob. & Tr. J. 193, 206-07 and nn. 17, 22 (1997), but Mr. Gibson fails to cite the article. (Mr. Gibson’s Objection at 6 n. 1). Mr. Gibson repositions some of Mr. Murray’s text, removes citations and other text which Mr. Murray includes, and renumbers Mr. Murray’s subscript footnote numbers. Third, Mr. Gibson uses Mr. Murray’s discussion of four cases, In re Sung Soo Rim Irrevocable Intervivos Trust, 177 B.R. 673, 675-76 (Bankr.C.D.Cal.1995); Shawmut Bank Connecticut v. First Fidelity Bank (In re Secured Equip. Trust of Eastern Air Lines, Inc.), 38 F.3d 86 (2d Cir.1994); In re Medallion Realty Trust, 103 B.R. 8, 10-13 (Bankr.D.Mass.1989); and In re Gonic Realty, 50 B.R. 710, 711-12 (Bankr.N.H.1985), but none of these cases is relevant to the issue here. In each case, the issue was whether the trust debtor qualified for bankruptcy protection as a business trust pursuant to 11 U.S.C. § 101(9)(A)(v), not whether the trust could appear in court without counsel. Signifi365cantly, the trusts in these four cases were represented by counsel. Perhaps the most remarkable part of Mr. Gibson’s Objection appears in the third paragraph of his footnote on page 6. Again, Mr. Gibson appears to have copied material from Mr. Murray’s article without citation. However, in this paragraph, he alters Mr. Murray’s text by inserting a clause about Georgia law. Specifically, Mr. Murray’s article contains the following sentence: Florida, Hawaii, Indiana, North Dakota, and Virginia have statutes that permit land trusts, while states such as California and Kansas have permitted the creation of land trusts through court decisions. Murray at n. 22. In his footnote, Mr. Gibson splices that sentence and adds language so that his Objection reads as follows: Florida, Hawaii, Indiana, North Dakota, and Virginia have statutes that permit land trusts. Georgia has enacted the ‘Georgia Trust Act’ which allows Trusts to hold Land, while states such as California and Kansas have permitted the creation of land trusts through court decisions. (emphasis added). By this insertion, Mr. Gibson intimates that Georgia law has a statute that allows land trusts. But Mr. Murray did not include Georgia in his list of states with such a statute, and the parties have not cited any authority holding that Illinois style land trusts are recognized in Georgia. More importantly, however, none of this is relevant to whether a non-lawyer trustee can represent the defendant trusts in court. Mr. Gibson has not presented the trust instruments or identified the beneficiaries, but contends the trusts should be allowed to appear in court without counsel because they “are organized under authority of the Georgia Trust Act, as ‘Land Trusts.’ ” (Id. at 5). The Georgia Trust Act is found at O.C.G.A. §§ 53-12-1 to 394 (1997), and was enacted in its present form in 1991. To support his claim that the defendant trusts operate as “ ‘Illinois’-style Property Holding Trusts” and not “ ‘Massachusetts’ style business trusts,” which, he argues, do not require representation in court by a licensed attorney, he points to four sections of the Georgia Trust Act: O.C.G.A. §§ 53-12-4 (“Jurisdiction”), 53-12-51 (“Creation of beneficial interests in property by deed; conditions; recordation; time of termination or renewal”), 53-12-53 (“Operation of trust under business or trade name”), and 53-12-55 (“Powers of trustees generally; resignation; removal; appointment of successor”). The last three sections are contained in Article 3 of the Georgia Trust Act. Commentary concerning these provisions suggests that they create trusts akin to Massachusetts style business trusts, not Illinois style land trusts. The introductory comment to Article 3 states: “[tjhis article allows the creation in Georgia of a type of business trust. Bogert, Trusts And Trustees, 2d ed. § 247 (Rev.1992). It apparently is rarely utilized.” O.C.G.A. tit. 53, article 3, section 50, cmt. (1997) (emphasis added); See also George Gleason Bogert, George Taylor Bogert, and Amy Morris Hess, Trusts and Trustees § 247 n. 42 at 172 (rev.2d ed.2005) which lists this portion of the Georgia Code as among those state statutes recognizing the validity of business trusts. Bogert’s interpretation is confirmed in an article written by the reporter to the Georgia Trust Code Revision Committee recognizing that the provisions of Article 3 “authorize the creation in Georgia of what is commonly known as a Massachusetts business trust....” Anne S. Emanuel, The Georgia Trust Act, 28 Ga. St. B.J. 95, 99, n. 7 (1991) (emphasis add366ed). Thus, Mr. Gibson’s reliance on Article 3 of the Georgia Trust Act for his argument that the defendant trusts are organized under O.C.G.A. §§ 53-12-50 to 59 as land trusts, not business trusts, is misplaced. Mr. Gibson’s contention that the defendant trusts are like natural persons and thus need not have counsel is based on his misunderstanding of the last sentence of O.C.G.A. § 53-12^1 This section reads as follows: Trusts of every kind, not generally cognizable at law, are peculiarly subjects of equity jurisdiction. Any person having a claim against any trust for services rendered to the trust or for articles, property, or money furnished for the use of the trust or having any claim for the payment of which a court exercising equitable powers of relief would render the trust liable may collect and enforce the payment of the claim in a court of law. Jurisdiction over actions and proceedings against creditors or debtors of trusts, and other actions and proceedings to which the trustee or the trust is a party which do not involve the internal affairs of the trust, lies in the court in which jurisdiction would lie if all parties to the suit were natural persons. (emphasis added). The comment to this section notes its similarity to former law and states that the “last sentence expresses the rule that a trustee proceeding on a cause of action that sounds at law may file suit in a court of law [rather than a court of equity].” O.C.G.A. § 53-12^4 cmt. (1997). Section 53-12-4 has nothing to do with deeming a trust to be a “natural person” or allowing a trust to appear in court pro se. As the Supreme Court of Georgia explained in a case pre-dating the recodification of this section, this provision means that a person having a claim against a trust estate may collect and enforce payment without resorting to a court of equity. Miller v. Smythe, 92 Ga. 154, 18 S.E. 46 (Ga.1893). Mr. Gibson does not cite any other authority for his argument, and there is simply no legal analysis to support a holding that the defendant trusts are not artificial entities. In fact, provisions in the Georgia Trust Act not referenced by Mr. Gibson analogize trust law to corporate law and a trustee to a corporate agent: 367O.C.G.A. § 53-12-54 (2006 Supp.) (emphasis added). See also O.C.G.A. § 53-12-57 (1997) (“[e]ach trust created pursuant to this article shall make a return to the Secretary of State, upon the creation of the trust and annually thereafter, in the same manner and embracing the same information, insofar as applicable, as returns by corporations.... ”). These provisions confirm that trusts created under Article 3 of the Georgia Trust Act are like business trusts which Mr. Gibson agrees can only appear in court through a licensed attorney. 366When an estate is created pursuant to Code Section 53-12-51 and from time to time thereafter, the trustee or trustees shall issue such certificates of beneficial interest as may be provided for by the deed to the persons who are beneficially interested in the estate or who become so interested therein in accordance with the provisions of the deed. The certificates shall pass and be transferred as personalty and in the same manner as shares of stock in corporations and shall be subject to levy and sale under attachment or execution or any other process in like manner as shares of stock. The trustee or person in charge of the estate representing the trustee shall be subject to the same demand as that provided by Code Sections 11-8-112 and 9-13-58 for the levying officer to make upon the officers of a corporation. Persons having claims against the estate may enforce the same by action against the trustee or trustees thereof in like manner as actions against corporations, and service thereof may be perfected by serving the trustee or trustees. ... The venue of such actions shall be the same as that of similar actions against private corporations, but neither the trustees nor the beneficiaries of the estate shall be personally or individually liable therefor except in cases where officers and stockholders of private corporations would be liable under the law. 367Mr. Gibson also asserts that under Georgia law a trustee holds both legal and equitable title in his own name, by quoting part of a sentence from O.C.G.A. § 53-12-51: “The legal title to the property and all the property added thereto or substituted therefor shall vest and remain in the trustee.” The entire sentence provides “[w]hen such an estate is created, the legal title to the property and all the property added thereto or substituted therefor shall vest and remain in the trustee or trustees named and his or their successors, in accordance with the terms of the deed, with all the powers conferred thereby upon the trustee, and shall not during the continuance of the estate pass to or vest in the beneficiaries.” This sentence means that legal title to property is held by the trustee, not that a trustee holds all equitable title to property. The import of this sentence is not to grant equitable title to the trustee, but merely to provide that other property may be added to the trust res over which the trustee would have legal title. While his argument is confusing, what Mr. Gibson appears to be saying is that he formed the defendant trusts as Illinois style land trusts which give him legal and equitable title to the land at issue. From this, he contends that there is no other real party in interest. Again, Mr. Gibson has not presented the trust instruments so there is nothing in the record to allow the Court to make any such finding. Importantly, while an Illinois style land trust does involve a vesting of both legal and equitable title to the res in the trustee, land trusts still have beneficiaries with rights and privileges characterized as personal property interests. See Black’s Law Dictionary 1549 (8th ed.2004); 90 C.J.S., Trusts §§ 245,254, 318 (2006). In fact, cases in jurisdictions recognizing land trusts contradict Mr. Gibson’s argument that a land trust can appear without counsel in court. The Florida Supreme Court sanctioned a non-lawyer trustee for counseling, advising, and preparing documents, including preparing and signing pleadings in defense of a foreclosure action. Florida Bar v. Hughes, 824 So.2d 154, 155-59 (Fla. 2002). The Court in Hughes found these actions to be the unauthorized practice of law and continued the injunction prohibiting him from undertaking such actions. See also Ziegler v. Nickel, 64 Cal.App.4th 545, 547-48, 75 Cal.Rptr.2d 312, (Cal.Ct. App.1998) (non-lawyer trustee has no right to represent trust as he would be engaged in the unauthorized practice of law); Alpha Land Company v. Little, 238 F.R.D. 497 (E.D.Cal.2006) (default judgment awarded against trustee of land trust who filed responsive pleading but was not an attorney). Finally, Mr. Gibson cites River Valley, Inc. v. Dubuque County, 63 F.R.D. 123 (N.D.Iowa 1974), and Harlem River Consumers Cooperative, Inc. v. Associated Grocers of Harlem, Inc., 71 F.R.D. 93 (S.D.N.Y.1976) for the proposition that “there are scenarios which exist which warrant non lawyers representing an artificial entity.” These cases involve motions to file appeals informa pauperis and have nothing to do with whether the appellants could proceed without counsel. In fact, in *368River Valley, Inc., the reported decision shows that the plaintiff non-profit corporation was represented by an attorney. These two cases dealt only with fee waivers and whether the non-profit corporations at issue were “persons” within the meaning of 28 U.S.C. § 1915(a), the statute that allows indigent persons to proceed without paying court costs. In conclusion, there is no support for Mr. Gibson’s contention that trusts formed under Article 3 of the Georgia Trust Act are like Illinois style land trusts. For purposes of argument, however, even if the defendant trusts here are land trusts, land trusts have beneficiaries and the trusts are not entitled to self-representation. Mr. Gibson may appear on his own behalf, but he has no authority to appear as an attorney for anyone other than himself. His status as a trustee is necessarily a fiduciary status, and the defendant trusts can only appear in court through a licensed attorney admitted to practice law in this Court. . The defendant trusts are the Hamblen Family Irrevocable Trust, NPPH HC, 230 Woodward Trust, 625 Atwood Trust, and 12230 Cumming Highway Trust. . The Court denied that motion in an Order entered on December 14, 2006.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494155/	DECISION & ORDER CARL L. BUCKI, Bankruptcy Judge. In this Adversary Proceeding, Córtese Brothers, Inc., seeks a determination that its claim against a former employee is non-dischargeable as a debt obtained by false pretenses, a false representation, or actual fraud. The central issue is whether the debtor falsely represented an intent to reimburse at the time that he acquired goods by using the credit of his employer. On September 30, 2004, David N. Chris-tofaro filed a petition for relief under chapter 7 of the Bankruptcy Code. In schedules filed with that petition, Mr. Christofaro acknowledged an outstanding debt to Córtese Brothers, Inc., in the amount of $11,000. Prior to entry of an order of discharge, however, Córtese Brothers, Inc., commenced the present adversary proceeding to determine the dischargeability of the obligation. This court conducted a trial of the matter on September 25, 2006, and has allowed the parties to stipulate to the post-trial submission of additional documentary evidence. I have also reviewed post-trial memoranda that the parties filed in January of 2007. The parties have contested many of the relevant facts of this case. In evaluating all of the conflicting evidence, I have duly considered both the content of testimony and the demeanor and credibility of each witness. In assessing credibility, I observed contradictions as between documentary proof and testimony, especially with regard to circumstances surrounding the debtor’s execution of a promissory note. Now, after a review of every item of proof, I make the findings of fact that are recited herein. Córtese Brothers, Inc. (“Córtese”), operates a construction business, with a particular focus on home improvement. In conducting this activity, Córtese has developed relationships with suppliers who allow contractors to purchase items at a reduced price. As a courtesy, Córtese allows its employees to buy materials for their personal use through the corporation. In this way, the employee receives the benefit of the contractor’s discount. As a condition for this privilege, however, employees must reimburse Córtese within thirty days for the cost of their purchases. Around May of 2000, David N. Christo-faro undertook to remodel a house that he 414had recently purchased at 36 Mona Court in Depew, New York. Being an employee of Córtese at that time, Christofaro placed orders under his employer’s name for a large quantity of building materials. The suppliers then billed Córtese, which satisfied the outstanding invoices and notified Christofaro of the amount that he should pay as reimbursement. Altogether, Chris-tofaro used his employer’s good credit to buy material having a discounted price of more than $11,000. This sum greatly exceeded the value of purchases by other employees. Contrary to the understanding of the parties, Christofaro failed to indemnify Córtese within thirty days of his purchases. Nor did he satisfy his debt even after many requests for payment. Dominic Córtese, the president of Córtese Brothers, then met with Christofaro on December 21, 2000. As a result of this meeting, Christofaro signed a promissory note payable in thirty days, for his then outstanding obligation in the amount of $8,686.40. Soon after signing the note, however, Christofaro ceased working for Córtese. In June of 2001, after having received no payments on the note, Córtese commenced an action in Buffalo City Court to collect the principal balance with accrued interest. Ultimately, on November 16, 2001, Córtese obtained a default judgment against Chris-tofaro for the sum of $9,409.44. The present adversary proceeding presents no issue regarding the existence of a liability. Christofaro acknowledged the indebtedness when he signed the promissory note on December 21, 2000, and this court must give full faith and credit to the judgment which resulted from the action on that note. Rather, the sole issue for this court is whether the debt is dischargeable under 11 U.S.C. § 523. Section 523(a) of the Bankruptcy Code provides that a discharge in chapter 7 “does not discharge an individual debtor from any debt ... (2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained, by — (A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition.” To establish fraud under section 523(a)(2)(A), a creditor must satisfy a five part test by a preponderance of the evidence. Specifically, he must show: (1) that the debtor made a representation; (2) that the debtor knew the representation to be false; (3) that the debtor intended to deceive the creditor; (4) that the creditor justifiably relied upon that representation; and (5) that the creditor suffered damage as a proximate result of its reliance upon the misrepresentation. In re Lokotnicki, 232 B.R. 583 (Bankr.W.D.N.Y.1999). For the reasons stated hereafter, I find that Córtese has satisfied each of these requirements. 1. Christofaro represented an intent to pay. Upon placing an order for delivery of material to his personal residence, Christofaro impliedly represented an intent to reimburse his employer. In this regard, the indebtedness is like a credit card obligation. In Bank of America v. Jarczyk, 268 B.R. 17 (W.D.N.Y.2001), the District Court established the controlling standard, namely “that a representation of intent to pay is made upon card use.” 268 B.R. at 22 (emphasis in original). Similarly, in the present instance, use of the employer’s credit carried an implied representation of intent to reimburse for the cost of the debtor’s purchase. The evidence at trial showed that Christofaro knew his employer’s policy to allow purchases on condition that payment occur within thirty days. When he arranged for delivery of supplies, therefore, Christofaro 415represented his intent to repay according to those terms. 2. Christofaro knew his representation was false, and (3) intended to deceive Córtese. Using his employer’s credit, Christofaro purchased supplies having a value of more than $11,000. This sum greatly exceeded the debtor’s monthly income. In as much as Córtese required repayment within thirty days, Christofaro would necessarily have known whether he had the ability to repay. Obviously, he did not have that ability and could not have intended to fulfill his promise of timely reimbursement. Ability to repay is a concept distinct from intent to repay. However, as noted by the District Court in Bank of America v. Jarczyk, 268 B.R. at 23, “a complete lack of ability to repay is one factor that may be considered in determining the debtor’s subjective state of mind....” Here, when considered with the requirement for nearly immediate repayment, the ultimate inability to repay demonstrates the requisite intent. For these reasons, I find that Christofaro knew the falsity of his representation, but nonetheless ordered materials with an intent to deceive Córtese. 4. Córtese justifiably relied upon Christofaro’s representation. To enable its employees to enjoy a contractor’s discount on their personal purchases of building supplies, Córtese established a simple program having minimal administrative costs. Necessarily, the program’s success depended upon a commitment by each participant to reimburse Córtese within thirty days. Because this commitment speaks to the essence of the program, Córtese was fully justified in its reliance on Christofaro’s representation of his intent to repay. 5. Christofaro’s false representation has caused Córtese to suffer financial loss. Based on his representation of an intent to repay, Córtese allowed Christofaro to purchase supplies having a discounted value in excess of $11,000. On account of the unpaid balances due for these purchases, Córtese has already obtained a pre-petition judgment against Christofaro for the sum of $9,409.44. Thus, Christofaro’s false representation has proximately caused a loss for this amount, together with such further interest as may accrue under state law on that judgment. By a preponderance of the evidence, therefore, Córtese has established that it holds a valid claim to recover the value of property obtained by actual fraud. Accordingly, Christofaro’s debt to Córtese is nondischargeable under 11 U.S.C. § 523(a)(2)(A). For these reasons, this court will grant judgment declaring that David N. Christofaro remains liable to Córtese Brothers, Inc., for the full amount due on its prior judgment in the amount of $9,409.44, plus interest thereon, together with the costs of this action. Although the complaint further requests an award of attorney’s fees, the plaintiff has failed to establish any special grounds for such recovery. Thus, the judgment of this court will be limited to the recovery indicated herein. So ordered.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494156/	MEMORANDUM OPINION AND ORDER DOUGLAS O. TICE JR., Chief Judge. Hearing was held on November 16, 2006, on the motion for summary judgment filed by plaintiff Watts Contractors, Inc., the Debtor-In-Possession (“DIP”), against defendant Gerald W. Watts. Defendant filed a cross-motion for summary judgment. Following the hearing, the court requested both parties to submit proposed findings of fact and conclusions of law. For the following reasons, the plaintiffs motion for summary judgment will be granted, and defendant’s cross-motion for summary judgment will be denied. Findings of Fact This court has jurisdiction over the complaint pursuant to 28 U.S.C. § 1334. This is a core proceeding under 28 U.S.C. § 157(b). At issue is the continued validity of a written lease entered into on June 8, 2003, between the DIP and the defendant of certain portions of a 187]é acre tract owned by the DIP located in Charlotte County, Virginia. Defendant uses the leased premises as a private airport. The lease contemplated a term of 20 years and was not recorded in the Clerk’s Office of the Circuit Court of Charlotte County. The DIP filed the present Chapter 11 case on November 18, 2005. Discussion and Conclusions of Law Upon the filing of the Chapter 11 petition, the DIP acquired the powers of a trustee pursuant to 11 U.S.C. § 1107(a). Among the powers of a trustee are the “strong-arm” powers of 11 U.S.C. § 544(a). Specifically, as of the commencement of the case, and without regard to the knowledge of the trustee or any creditor, the DIP may exercise the powers of a bona fide purchaser of real property from the debtor. 11 U.S.C. § 544(a)(3). In this case, the DIP seeks to exercise the § 544(a) strong-arm powers to nullify the 2003 lease. When the DIP avoids an interest in a leasehold interest in real estate, both state and federal law must be considered. First, federal bankruptcy law confers upon the DIP the ability to avoid certain trans491fers of property pursuant to the strong-arm powers of § 544(a). Second, the substance of such rights, particularly the priority of the DIP’s claim, must be determined by reference to state law. Dunes Hotel Assocs. v, Hyatt Corp., 245 B.R. 492 (D.S.C.2000). Third, if the DIP (or a trustee) has priority over a third party’s interest under state law, then federal law prescribes the consequences. Following this analysis, the DIP plainly has the power under § 1107(a) to exercise the § 544(a) avoidance powers. The point at which avoidance occurs, if at all, is at the commencement of the case. Virginia law determines the types of transfers that may be avoided by the § 544(a) powers at the time of commencement of this case. Under Virginia law, a lease for five years or more must be in the form of a will or deed. Va.Code Ann. § 55-2; Smith v. Payne, 153 Va. 746, 756, 151 S.E. 295, 298 (1930). Among other conveyances, certain deeds of lease must be recorded in the land records of the county in which the property is located to have priority over subsequent bona fide purchasers and lien creditors. Va.Code Ann. 55-96 A. l(ii). The statutory text of Virginia Code § 55-96 reads as follows: Every (i) such contract in writing, (ii) deed conveying any such estate or term, (iii) deed of gift, or deed of trust, or mortgage conveying real estate or goods and chattels and (iv) such bill of sale, or contract for the sale of goods and chattels, when the possession is allowed to remain with the grantor, shall be void as to all purchasers for valuable consideration without notice not parties thereto and hen creditors, until and except from the time it is duly admitted to record in the county or city wherein the property embraced in such contract, deed or bill of sale may be. Va.Code Ann. § 55-96 A.1 (emphasis added). Defendant argues that the “when the possession is allowed to remain with the grantor” language applies to each of the four numbered sub-sections, and therefore the recording requirement applies to deeds conveying estates only when the possession is allowed to remain with the grantor. While theoretically possible given the unclear use of the comma in the statute, this reading is untenable. No case has held that the Virginia recording statute applies to deeds only when the possession is allowed to remain with the grantor; hence the phrase in question clearly modifies only contracts for the sale of goods and chattels. The recording statute has been consistently understood to say that deeds conveying leases for terms of more than five years are to be recorded. See Knight v. Triplet, Jeff. 71 (1740); Great Atlantic and Pacific Tea Co. v. Gofer, 129 Va. 640, 106 S.E. 695 (1921); see also 1-27 VIRGINIA TITLE EXAMINERS MANUAL § 27-2 (1998). Therefore, it is clear that the lease in this case for a term of more than five years must be recorded, or it is void as to a bona fide purchaser. Regardless of whether the 2003 lease satisfies the technical requirements to constitute a deed, there is no question that the lease was not recorded. Thus, under Virginia law, the defendant’s interest in the unrecorded 2003 lease would be void with respect to a subsequent lien creditor or bona fide purchaser for value. When the DIP exercises the § 544(a) avoidance powers, it may exercise the powers of a bona fide purchaser for value, and may avoid a transfer that would be voidable by such a bona fide purchaser under Virginia law. Because the lease is void as to a bona fide purchaser, the DIP can avoid the lease. Thus, the 2003 lease is nullified because “[ajvoidance of the leasehold interest renders it is [sic] null 492and void as a matter of federal law, even if it was a valid transfer and enforceable between the parties under state law.” Dunes Hotel Assocs. v. Hyatt Corp., 245 B.R. 492, 500 (D.S.C.2000). The transfer is retroactively ineffective, and the transferee legally acquired nothing from the transfer. In re Bell, 194 B.R. 192, 197 (Bankr.S.D.Ill.1996). The defendant attempts to argue that the DIP cannot exercise the powers of a bona fide purchaser because it in fact has knowledge of the leasehold interest and was a party to the transfer. While knowledge of the leasehold might affect the ability of a bona fide purchaser to void the leasehold under state law, the avoidance power of § 544(a) states explicitly that the trustee’s power is “without regard to any knowledge of the trustee or of any creditor.” 11 U.S.C. § 544(a). Likewise, while the debtor was a party to the lease, the DIP is equivalent to the trustee and is not considered a party to the lease for avoidance purposes. Therefore, the DIP takes on the powers of a bona fide purchaser without knowledge and can exercise its avoidance powers under § 544(a) in this case. The defendant also argues that the Bankruptcy Code exclusively deals with the rejection of leases in § 365 and does not permit leases to be avoided under § 544(a). While the defendant is correct that § 365 offers the exclusive mechanism for rejecting leases, this presupposes that the rejected lease is in fact valid and not void. Section 544(a) enables the trustee to avoid transfers that would be void under general property transfer rules as applied by the state. Where the state, as is the case here, has included leases in its recording statute, the state has dictated that unrecorded leases, just like other unrecorded property interests, fall under the jurisdiction of § 544(a). Therefore, the DIP has two potential mechanisms at its disposal. First, it can treat the lease as valid, and assume or reject it under § 365. Alternatively, it can look to the property transfer aspect of the lease. If the state’s recording statute includes leases, and the lease has not been properly recorded, then avoidance will be an option under § 544(a). Thus, the general principle remains that § 365 is the primary section of the code dealing with leases, and avoidance of the lease under § 544(a) will only arise under relatively unique circumstances where the state has allowed it. Defendant could have protected himself from this result by recording the 2003 lease but did not do so. The result here is what the Code requires, and in no way is this result inequitable. Finally, defendant argues that if the lease is indeed void under the Virginia recording statute, it is void only as to the portion of the lease for a term greater than five years. Because the lease in this case has run for slightly more than three years, the defendant argues that the lease would be valid for a period of five years, in this case until June 8, 2008. Only after that date would the lease be considered void. This argument is purportedly supported by Great Atlantic and Pacific Tea Co. v. Cofer, 129 Va. 640, 106 S.E. 695 (Va.1921), which is the primary case relied upon by the plaintiff for the principle that a lease for a term of more than five years is void as to a bona fide purchaser. The annotation to the Virginia Code states that a lease “If unrecorded, it is void as to term in excess of five years,” citing Great Atlantic. Va.Code Ann. § 55-96. However, nothing in that case appears to contemplate the relief requested by the defendant. The Great Atlantic court did not partition a lease into a five-year portion and a greater than five year portion, voiding only the latter, and it is unclear how the annotation arrived at such a summary of the case. The ease involved a base two *493year and one month lease, with additional options of up to four yearly renewals. 129 Va. at 647-8, 106 S.E. at 697. The court did not void the already-completed term of the lease, and voided only the covenant for renewal. Id. In the present case, there is no renewal term at issue. No other evidence has been presented to indicate that this lease is deserving of such a partition. Therefore, the court does not find defendant’s argument to partition the lease compelling. After the 2008 lease is avoided, the Defendant is left only with an unsecured claim against the debtor’s estate. The source of this potential claim is not the loss of the avoided leasehold estate but is rather any enforceable contract rights that the Defendant may possess after the 2003 lease avoided. Dunes Hotel Assocs. v. Hyatt Corp., 245 B.R. 492, 501-03 (D.S.C. 2000). After the 2003 lease is avoided, the DIP need take no further steps to recover the property interest under 11 U.S.C. §§ 550 or 542. The concepts of recovery and avoidance are different under the Code, and the DIP is not required to recover the property if avoidance gives the DIP an adequate remedy. The DIP’s interest in the 187/6 acre parcel became property of the estate at the time of filing. 11 U.S.C. § 541(a)(1). When that interest merges with the avoided leasehold estate, the DIP holds the entire interest in the 187/6 acre parcel, and there is no need to recover the avoided property under §§ 550 or 542. For these reasons, there is good cause for the entry of summary judgment in favor of the Debtor in Possession. Accordingly, IT IS ORDERED that the plaintiffs motion for summary judgment is GRANTED, and the defendant’s cross-motion for summary judgment is DENIED; IT IS ORDERED that the 2003 lease is avoided pursuant to 11 U.S.C. §§ 544(a) effective as of the commencement of the case; IT IS ORDERED that the defendant Gerald W. Watts may file a claim as an unsecured creditor to the extent he may have a claim; and IT IS FURTHER ORDERED that the defendant Gerald W. Watts will cooperate with the DIP to sign any documents necessary to effectuate this Order.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487782/	Filed 11/18/22 Gong v. Wong CA2/1 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 SECOND APPELLATE DISTRICT DIVISION ONE JING GONG et al., B302494 Plaintiffs and Appellants, (Los Angeles County Super. Ct. No. 18STCV10136) v. FRED A. WONG et al., Defendants and Respondents. APPEAL from a judgment of the Superior Court of Los Angeles County, Dennis J. Landin, Judge. Affirmed. Decker Law and James D. Decker for Plaintiffs and Appellants. Wong & Mak and Fred A. Wong; Benedon & Serlin, Gerald M. Serlin and Melinda W. Ebelhar for Defendants and Respondents. ____________________________ Plaintiffs and appellants Jing Gong; Paul Woloski; GWG Investment, LLC; and Ai Ying Gong (collectively, appellants) filed suit against, inter alia, defendants and respondents Fred A. Wong and Wong & Mak, LLP (an attorney and his law firm; collectively, the Wong Defendants)1 for conversion and money had and received. Appellants vaguely alleged in their complaint that certain escrow funds belonging to Jing Gong were improperly distributed to the Wong Defendants. The Wong Defendants moved for summary judgment, asserting the conversion and money had and received causes of action were time-barred because more than three years before appellants commenced the instant action, Jing Gong was aware that the escrow funds had been distributed to one of the Wong Defendants’ clients. In support of appellants’ opposition to the motion, their trial counsel submitted a declaration requesting a continuance of the motion hearing to allow him to seek discovery of the Wong Defendants’ billing and payment records. Appellants’ trial counsel claimed that these records could show that any attorney fees the aforesaid client paid to the Wong Defendants originated from the improperly disbursed escrow funds. The trial court denied appellants’ request for a continuance and granted the Wong Defendants’ summary judgment motion. On appeal, appellants claim the trial court erred in denying their request for a continuance and in disregarding certain procedural defects in the Wong Defendants’ separate statement offered in support of their motion. We reject the first claim of 1 When we refer specifically to respondent Fred A. Wong, we identify him as defendant Wong. 2 error primarily because appellants’ trial counsel’s declaration did not establish that permitting them to obtain the billing and payment records could have enabled appellants to overcome the Wong Defendants’ statute of limitations defense. In particular, even if those billing and payment records showed that the client made payments to the Wong Defendants within the limitations period, these documents alone would not have enabled appellants to trace the payments to funds that the client received from the escrow account. Appellants’ trial counsel did not identify any sources of evidence that would allow him to bridge that evidentiary gap, let alone describe the steps necessary to discover such evidence. Regarding the second claim of error, we conclude the Wong Defendants’ failure to provide appellants with an editable version of their separate statement and to leave space in the right column of the document to insert their responses did not prevent appellants’ trial counsel from preparing a response to the separate statement. Rather, it seems their trial counsel simply chose not to draft and file any such response. Finding no error, we affirm. PROCEDURAL BACKGROUND2 We summarize only those aspects of the procedural history that are relevant to our disposition of the instant appeal. 2 We derive our Procedural Background in part from admissions the parties make in their briefing, assertions the Wong Defendants make in their respondents’ brief that appellants do not controvert in their reply, and undisputed aspects of the trial court’s order granting summary judgment. (See Artal v. Allen (2003) 111 Cal.App.4th 273, 275, fn. 2 (Artal) [“ ‘[B]riefs and argument . . . are reliable indications of a party’s 3 1. Appellants’ complaint On December 31, 2018, appellants filed a complaint against the Wong Defendants; Te Chuan Chu; Ming Der Lin; Sincere Escrow, Inc.; and Margaret Chiu,3 which alleges four causes of action: (1) quiet title to real property, (2) breach of written contract, (3) conversion, and (4) money had and received. The only causes of action the complaint levels against the Wong Defendants are the conversion and money had and received claims. In addition to the Wong Defendants, Sincere Escrow, Inc.; Chiu; and Chu are named as defendants on the conversion cause of action, and Sincere Escrow, Inc.; Chiu; Chu; and Lin are named as defendants on the money had and received cause of action. Jing Gong is the sole plaintiff on the conversion and money had and received causes of action.4 position on the facts as well as the law, and a reviewing court may make use of statements therein as admissions against the party.’ ”]; Rudick v. State Bd. of Optometry (2019) 41 Cal.App.5th 77, 89–90 (Rudick) [concluding that the appellants made an implicit concession by “failing to respond in their reply brief to the [respondent’s] argument on th[at] point”]; Baxter v. State Teachers’ Retirement System (2017) 18 Cal.App.5th 340, 349, fn. 2 [utilizing the summary of facts provided in the trial court’s ruling]; Standards of Review, post [noting that the trial court’s orders and judgments are presumed correct].) 3 Chu; Lin; Sincere Escrow, Inc.; and Chiu are not parties to this appeal. 4 The remainder of this section summarizes pertinent allegations from appellants’ complaint. We express no opinion as to the veracity of these averments. 4 On or about December 15, 2005, Jing Gong borrowed $310,000 from Chu and Lin, which was “secured by a promissory note and deed of trust against a residence owned by Jing Gong [on] . . . Walnut Avenue in Arcadia, California (the Walnut property).” On or about December 11, 2007, Chu “cancelled the Walnut property note and recorded a new deed of trust against” “undeveloped property located [on] . . . Garvey Avenue[ in] El Monte, California (the Garvey property)” pursuant to an agreement between Jing Gong and Chu to refinance the loan secured by the Walnut property. On or about February 5, 2010, Chu and his counsel, the Wong Defendants, foreclosed on the Garvey property by way of a trustee’s sale. “Chu made a full credit bid of $431,933.00,” and “Chu took title with . . . Lin to the Garvey property.” On June 12, 2012, Chu filed an action in the Los Angeles County Superior Court against Jing Gong and other defendants, asserting claims for fraudulent concealment, fraudulent conveyance, impairment of security interest, civil conspiracy, and cancellation of instruments. “At some point before trial, the parties entered into a written agreement to permit the sale of [certain real] property and to deposit in . . . escrow the proceeds in the sum of $230,836.00 with . . . Sincere Escrow[, Inc.] and . . . Chiu pending the final outcome of the action.” “On July 14, 2014[,] the trial court awarded judgment to . . . Chu and against [Jing] Gong and her co-defendants in the total amount of $1,090,636.90.” “Subsequently[,] the trial court issued an amended judgment due to mathematical errors in the total amount of $833,650.86.” “On September 23, 2014[,] the Court of Appeal, Second Appellate District . . . reversed the judgment and ordered that . . . 5 Chu shall recover nothing, except for $120,000.00 together with any interest thereon, which . . . Jing Gong alleges has been fully repaid to . . . Chu.” At some point “before the conclusion of the litigation,” Sincere Escrow, Inc. and Chiu allegedly “distribut[ed] to . . . Chu, . . . Lin, and or [sic] [the Wong Defendants] the aforementioned escrow proceeds without the knowledge or consent of [Jing] Gong . . . .” “On or about August 21, 2015[,] the Los Angeles Superior Court . . . entered judgment in favor of Gong[5] and against . . . Chu in the net amount of $90,471.47 together with pre-judgment interest at $9,047.14 per year or $24.78 per day. The trial court offset the $120,000.00 that the Court of Appeal found was owed by Gong to . . . Chu from the escrow funds of $230,835.33. The trial court did so because it determined that . . . Chu had taken the escrow monies ‘through the premature enforcement of his judgment.’ ” “As the legal result of the conversion of [Jing Gong’s] funds” and “the breach of contract by Defendants,” to wit, the premature distribution of the escrow funds, “Jing Gong has sustained monetary damages in the principal sum of $90,471.47 together with prejudgment interest thereon since December 15, 2005 in the amount of $9,047.14 per year or $24.78 per day.” 5 The Wong Defendants correctly point out this averment from the complaint “does not specify whether ‘Gong’ is JING GONG, . . . AI YING GONG, or both.” 6 2. The Wong Defendants’ summary judgment motion, the briefing relating thereto, the trial court’s ruling granting the motion, and appellants’ notice of appeal On May 23, 2019, the Wong Defendants moved for summary judgment on the ground that the claims for conversion and money had and received are barred by their respective statutes of limitation. Specifically, the Wong Defendants argued that Jing Gong already knew more than three years before filing suit that Chu had received the $230,835.33 in escrow funds, the statute of limitations for conversion is three years, and the limitations period for money had and received is two years. On August 5, 2019, appellants filed their opposition to the summary judgment motion. Appellants’ opposition was accompanied by a declaration from their trial counsel in which he “request[ed] that the Court either deny or continue the motion for a sufficient time to allow for necessary discovery and motions to compel.”6 Attached to appellants’ trial counsel’s declaration was an e-mail the attorney had sent to the Wong Defendants’ counsel on July 22, 2019, wherein the attorney asserted that the Wong Defendants’ separate statement was defective because, inter alia, it did “not conform to the format required by [California Rules of Court, rule] 3.1350(d)(3) and (h).” In the e-mail, appellants’ trial counsel also requested “an electronic version of the separate statement.” On August 8, 2019, the Wong Defendants filed a reply to appellants’ opposition to the summary judgment motion. 6 We describe appellants’ trial counsel’s declaration in further detail in Discussion, part A, post. 7 On August 19, 2019, the trial court heard the Wong Defendants’ motion, denied appellants’ request for a continuance, and granted summary judgment. On September 9, 2019, the trial court entered judgment in favor of the Wong Defendants in accordance with the court’s ruling on their summary judgment motion.7 On September 13, 2019, the Wong Defendants mailed a notice of entry of the judgment to appellants’ trial counsel. Appellants appealed the judgment on November 12, 2019. STANDARDS OF REVIEW “A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. . . .” (Code Civ. Proc., § 437c, subd. (a)(1).)8 “A defendant . . . has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show 7 As we noted in Procedural Background, part 1, ante, Jing Gong is the sole plaintiff on the conversion and money had and received causes of action. Yet, the trial court entered judgment in favor of the Wong Defendants and against all four appellants. Nevertheless, because appellants do not address this discrepancy at all in their briefing, we do not discuss it further. (See Standards of Review, post [stating that appellants are responsible for affirmatively demonstrating error by supplying the reviewing court with cogent argument supported by legal analysis and citation to the record].) 8Undesignated statutory citations are to the Code of Civil Procedure. 8 that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff . . . shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” (§ 437c, subd. (p)(2).) “We review an order granting or denying summary judgment or summary adjudication independently.” (Los Angeles Unified School Dist. v. Torres Construction Corp. (2020) 57 Cal.App.5th 480, 492 (Los Angeles Unified School Dist.).) “If it appears from the affidavits submitted in opposition to a motion for summary judgment . . . that facts essential to justify opposition may exist but cannot, for reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make any other order as may be just.” (§ 437c, subd. (h).) “ ‘When a party makes a good faith showing by affidavit demonstrating that a continuance is necessary to obtain essential facts to oppose a motion for summary judgment, the trial court must grant the continuance request. [Citation.] . . . .’ [Citation.]” (Johnson v. Alameda County Medical Center (2012) 205 Cal.App.4th 521, 532 (Johnson).) “When a continuance of a summary judgment motion is not mandatory, because of a failure to meet the requirements of Code of Civil Procedure section 437c, subdivision (h), the court must determine whether the party requesting the continuance has nonetheless established good cause therefor.” (Lerma v. County of Orange (2004) 120 Cal.App.4th 709, 716 (Lerma).) We review a trial court’s ruling on a request for a continuance of a summary judgment hearing under the abuse of discretion standard. (Chavez v. 24 Hour Fitness USA, Inc. (2015) 9 238 Cal.App.4th 632, 643 [“We review a court’s ruling on a request for a section 437c, subdivision (h) continuance for abuse of discretion.”]; see Lerma, supra, 120 Cal.App.4th at pp. 711–712, 716 [applying the abuse of discretion standard to a continuance request supported by an affidavit that did not satisfy the requirements of section 437c, subdivision (h)].) Likewise, because “the [trial] court’s power to deny summary judgment on the basis of” “procedural[ ] defect[s]” in the movant’s separate statement is “discretionary, not mandatory,” we review a court’s declination to exercise that power for abuse of discretion. (See Truong v. Glasser (2009) 181 Cal.App.4th 102, 118 (Truong).) To satisfy the abuse of discretion standard, an appellant must show the trial “ ‘court exercised its discretion in an arbitrary, capricious or patently absurd manner that resulted in a manifest miscarriage of justice.’ [Citation.]” (See Franceschi v. Franchise Tax Bd. (2016) 1 Cal.App.5th 247, 256–257 (Franceschi).) “ ‘A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness.’ [Citation.]” (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.) Thus, “ ‘ “it is the appellant’s responsibility to affirmatively demonstrate error[,]” ’ ” and “ ‘ “review is limited to issues which have been adequately raised and briefed.” ’ [Citation.]” (See Los Angeles Unified School Dist., supra, 57 Cal.App.5th at p. 492.) “ ‘[T]o demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record.’ [Citation.]” (Hernandez v. First Student, Inc. (2019) 37 Cal.App.5th 270, 277.) The appellant bears this burden of rebutting the presumption of correctness accorded to the trial court’s decision, regardless of the applicable standard of 10 review. (See Los Angeles Unified School Dist., at p. 492 [noting that these principles apply to “ ‘ “an appeal from any judgment” ’ ”]; see also Orange County Water Dist. v. Sabic Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343, 368, 399 [indicating that an appellant must affirmatively show the trial court erred even if the de novo standard of review applies].) DISCUSSION Appellants raise two claims of error: (1) the trial court should have granted their request for a continuance of the summary judgment hearing to allow them to conduct further discovery, and (2) the court erred in disregarding certain “defects” in the Wong Defendants’ separate statement.9 Appellants do not, however, argue that the trial court erred in concluding, based on the evidence presented in connection with the Wong Defendants’ motion, that Jing Gong’s “third and fourth causes of action against [the] Wong Defendants are barred by the statute of limitations” because (1) “the statute of limitation[s] for conversion is three years, and for money had and received [is] two years”; (2) “[t]he records show that the distribution of the $230,835.33 in escrow funds occurred on January 14, 2013”; (3) the conversion and money had and received causes of action accrued “no later than March 2, 2015,” which is the date on which 9 Appellants also purport to raise a third claim of error, to wit, the trial court erred in concluding that appellants had not adequately alleged and/or offered sufficient evidence establishing the essential elements of Jing Gong’s conversion and money had and received causes of action. Because this contention concerns the trial court’s rationale for denying appellants’ request for a continuance of the hearing, we address that argument in Discussion, part A, post. 11 Jing Gong executed a declaration indicating she “knew that Chu had received the $230,835.33 in escrow funds,” which declaration Jing Gong submitted in support of a motion for restitution she filed on April 14, 2015 in the previous lawsuit; and (4) “the present action was filed on December 31, 2018[,] outside [the] limitations periods for conversion and money had and received.” Consequently, appellants waive any challenge to those aspects of the trial court’s order, and we discuss only the two claims of error appellants raise in their briefing.10 A. Appellants Fail To Establish the Trial Court Abused Its Discretion In Denying Their Request for a Continuance of the Summary Judgment Hearing Appellants contend their trial counsel submitted a declaration satisfying section 437c, subdivision (h)’s requirements for requests for continuance of summary judgment hearings. Specifically, appellants argue counsel’s declaration “described how he was served with the motion after the first session of [defendant] Wong’s deposition, at which [defendant] Wong failed to produce requested documents demonstrating payment of attorneys’ fees from his client, Chu, following release of the subject escrow proceeds,” and that appellants’ trial counsel “stated that [defendant] Wong failed to produce the records 10 (See Los Angeles Unified School Dist., supra, 57 Cal.App.5th at p. 492 [“ ‘ “[Appellate] review is limited to issues which have been adequately raised and briefed.” ’ ”]; Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956 [“ ‘ “When an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived.” ’ ”].) 12 following the second session” of his deposition. According to appellants, “[t]he declaration further established that, based on discovery received (i.e., correspondence from Wong to [a]ppellants’ former counsel), . . . Chu was destitute at or about the time he received the disbursed escrow funds, thereby suggesting that at least some portion of the escrow funds (i.e., the funds belonging to [a]ppellants) were indeed transferred to [the Wong Defendants].” Appellants maintain “[t]he requested discovery was necessary to the opposition of the [motion], as it would have shown when [the Wong Defendants] received the funds in question—and thus when [a]ppellants’ claims accrued.” They also argue that even if counsel’s declaration did not satisfy section 437c, subdivision (h), the trial court should have exercised its discretion to grant a continuance, primarily because the motion had been filed at a relatively early stage of the proceedings. In its order on the Wong Defendants’ motion, the trial court stated it did “not believe that further discovery of [the] Wong Defendants’ billing and payment records [could] overcome” the “defects” warranting the entry of summary judgment, that is, the fact the conversion and money had and received claims were time-barred. The court observed that “ ‘money cannot be the subject of a conversion action unless a specific sum capable of identification is involved[,]’ ” and that “[t]here is no allegation in the Complaint or any evidence presented to show that [the] Wong Defendants were paid an identifiable sum by Chu from the escrow money.” (Quoting Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal.App.4th 472, 485 (Software Design & Application, Ltd.).) In connection with the money had and received cause of action, the trial court stated: “Even with 13 further discovery of [the] Wong Defendants’ billing records, the Court highly doubts that [appellants] can establish [a] direct connection between the escrow money and attorneys’ fee that [the] Wong Defendants rightfully earned from representing Chu.” The court further observed that “ ‘an action for money had and received will lie to recover money paid by mistake, under duress, oppression or where an undue advantage was taken of plaintiffs’ situation whereby money was exacted to which the defendant had no legal right.’ ” (Quoting J.C. Peacock, Inc. v. Hasko (1961) 196 Cal.App.2d 353, 361, italics added by this court.) As a preliminary matter, appellants argue the trial court erred in discussing whether Jing Gong could establish the essential elements of her conversion and money had and received causes of action because “[t]he motion here was based exclusively on the [Wong Defendants’] statute of limitations argument . . . .” Appellants are mistaken. The trial court correctly noted—and appellants do not dispute—that “ ‘[a] cause of action accrues at “the time when the cause of action is complete with all of its elements.” ’ [Citation.]” (Quoting Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806.) “ ‘ “ ‘ “Ordinarily this is when the wrongful act is done and the obligation or the liability arises, but it does not ‘accrue until the party owning it is entitled to begin and prosecute an action thereon.’ ” . . . In other words, “[a] cause of action accrues ‘upon the occurrence of the last element essential to the cause of action.’ ” ’ ” ’ [Citation.]” (Choi v. Sagemark Consulting (2017) 18 Cal.App.5th 308, 323, initial italics added.) Consequently, whether the Wong Defendants’ receipt of payments from Chu for legal services gives rise to liability for conversion and money had and received is a matter that is intertwined with whether those 14 claims have an accrual date that renders them timely. Thus, the trial court did not err in assessing the merits of those two causes of action in the course of determining whether discovery of the Wong Defendants’ billing and payment records would enable Jing Gong to overcome their statute of limitations defense. Next, appellants argue the trial court erred in concluding that Jing “Gong’s conversion claim failed as [a] matter of law [because] ‘there is no allegation in the Complaint or any evidence presented to show that [the] Wong Defendants were paid an identifiable sum by Chu from the escrow money.’ [Citation.]” In particular, they contend “the Complaint alleges that [the Wong Defendants] received [$]230,836.00 from escrow, $90,471.14 of which belonged to [a]ppellants, which [the Wong Defendants] failed to return.” The trial court correctly found that appellants did not allege in their complaint that Chu paid an identifiable sum from the escrow funds to the Wong Defendants. Rather, appellants had averred that Sincere Escrow, Inc. and Chiu “distribut[ed] to . . . Chu, . . . Lin, and or [sic] [the Wong Defendants] the aforementioned escrow proceeds without the knowledge or consent of . . . [Jing] Gong . . . .”11 Furthermore, appellants 11 At one point in the complaint, appellants averred that “Defendants” “distribut[ed] to Te Chaun [sic] Chu, Ming Der Lin, and or [sic] [the Wong Defendants] the aforementioned escrow proceeds without the knowledge or consent of Plaintiff Gong and before the conclusion of the litigation.” Even if these “Defendants” who allegedly distributed the escrow funds included Chu, and the Wong Defendants supposedly were the recipients of those funds from Chu, Jing Gong could not survive summary judgment by relying on this vague assertion from the complaint. (See Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 15 do not contest the trial court’s finding that “[t]here is no . . . evidence . . . show[ing] that [the] Wong Defendants were paid an identifiable sum by Chu from the escrow money.” The absence of this evidence is fatal to appellants’ resort to an accrual date that would yield a timely conversion claim against the Wong Defendants, given that “money cannot be the subject of a conversion action unless a specific sum capable of identification is involved.” (See Software Design & Application, Ltd., supra, 49 Cal.App.4th at p. 485, italics added.) Similarly, Jing Gong could show her money had and received claim is timely only if she could demonstrate that within the limitations period, Chu in fact paid the Wong Defendants money Chu had obtained from the escrow fund. (See Gutierrez v. Girardi (2011) 194 Cal.App.4th 925, 937 [noting that a plaintiff may recover on a money had and received claim “ ‘wherever one person has received money which belongs to another, and which in equity and good conscience should be paid over to the latter[,]’ ” italics added].) Furthermore, even if the trial court had permitted appellants to discover and thereafter proffer the Wong Defendants’ billing and payment records, the conversion and money had and received claims would still have failed. In his declaration, appellants’ trial counsel asserted: “Based upon correspondence from [defendant] Wong to other counsel then representing [Jing Gong] which was produced in discovery, [defendant] Wong asserts that his client Te Chaun [sic] Chu at or about the time he received the wrongfully disbursed escrow money was broke and was unable to make restitution to [Jing 1054 [“It is fundamental that to defeat summary judgment a plaintiff must show ‘specific facts’ and cannot rely on allegations of the complaint.”].) 16 Gong].[12] This suggests that it was more likely than not that any attorney fees paid by Chu to [defendant] Wong following the escrow distribution came from those funds.” Appellants’ trial counsel did not submit a copy of the correspondence from defendant Wong referenced within his declaration, specifically identify the timeframe in which defendant Wong had asserted his client was “broke,” or elaborate further on the meaning of that term (e.g., whether Chu had no assets whatsoever or simply did not have sufficient assets to pay an unspecified amount of restitution to Jing Gong). Without further evidence concerning Chu’s financial state at the points in time at which he received the escrow funds and had paid the Wong Defendants for legal services, a trier of fact would have to resort to speculation to find that any of the payments to the Wong Defendants are traceable to the escrow funds rather than to some independent source(s) of money.13 (See Granadino v. 12 Appellants’ trial counsel did not further describe the “restitution” he claims Chu was unable to make to Jing Gong. Furthermore, although the trial court observed in its summary judgment ruling that Jing Gong “filed [a] Motion for Restitution in her previous lawsuit on April 14, 2015,” Jing Gong filed that motion more than two years after the escrow funds were distributed to Chu. It is thus unclear whether the restitution Jing Gong sought in the prior proceedings is the restitution that appellants’ trial counsel believed Chu was supposedly unable to pay “at or about the time he received the wrongfully disbursed escrow money . . . .” 13 The Wong Defendants point out that in the opposition to the motion, appellants asserted that defendant Wong “testified at his deposition that he received payments from Chu ‘which he believed came from the subject escrow funds.’ ” The Wong Defendants insist that this “accusation appears in the unverified 17 Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411, 418 [“To defeat summary judgment, [nonmovants] cannot rely on ‘speculation, conjecture, imagination, or guesswork.’ ”].) Furthermore, appellants’ trial counsel did not identify any potential sources of evidence concerning Chu’s financial state upon which appellants could seek discovery, let alone express any intention to conduct such discovery or specify the steps or procedures counsel would undertake to procure such evidence. In sum, because discovery of the Wong Defendants’ billing and payment records could not have allowed Jing Gong to avoid summary judgment on her conversion and money had and received claims against these defendants, the trial court did not act in an arbitrary, capricious, or patently absurd manner in denying the request for a continuance.14 Points & Authorities of the Opposition and therefore does not constitute evidence,” and that “[a]t no time during . . . WONG’s deposition did he state that all, or any part, of the payment received by . . . WONG & MAK for the representation of Chu came from the escrow account maintained by Sincere Escrow.” By failing to respond to these claims in their reply brief, appellants impliedly disclaim any reliance on this supposed deposition testimony from defendant Wong. (See Rudick, supra, 41 Cal.App.5th at pp. 89–90 [concluding that the appellants made an implicit concession by “failing to respond in their reply brief to the [respondent’s] argument on th[at] point”]; Fierro v. Landry’s Restaurant Inc. (2019) 32 Cal.App.5th 276, 281, fn. 5 [holding that “we are unable to accept counsel’s argument . . . as facts” and that “ ‘unsworn averments in a memorandum of law prepared by counsel do not constitute evidence’ ”].) 14 (Franceschi, supra, 1 Cal.App.5th at pp. 256–257 [describing the abuse of discretion standard]; see Johnson, supra, 205 Cal.App.4th at p. 532 [“An opposing party’s declaration in 18 B. Appellants Do Not Show the Trial Court Abused Its Discretion in Granting Summary Judgment Notwithstanding the Wong Defendants’ Failure to (1) Utilize the Proper Two-Column Format in Their Separate Statement and (2) Provide Appellants with an Editable Version of the Separate Statement California Rules of Court, rule 3.1350(d)(3) provides that the movant’s separate statement of undisputed material facts “must be in the two-column format specified in (h),” and that “[t]he statement must state in numerical sequence the undisputed material facts in the first column followed by the evidence that establishes those undisputed facts in that same column.” (See Cal. Rules of Court, rule 3.1350(d)(3); id., rule 3.1350(d)(1) [indicating the separate statement discussed in rule 3.1350(d)(3) is “[t]he Separate Statement of Undisputed support of a motion to continue the summary judgment hearing should show[, inter alia,] . . . ‘[f]acts establishing a likelihood that controverting evidence may exist and why the information sought is essential to opposing the motion’ . . . and . . . ‘[t]he specific steps or procedures the opposing party intends to utilize to obtain such evidence’ ”]; cf. Jade Fashion & Co., Inc. v. Harkham Industries, Inc. (2014) 229 Cal.App.4th 635, 653–657 [holding that the trial court did not err in denying a nonmovant’s request for a continuance of a summary judgment hearing because the party “failed to show how facts essential to its opposition could be obtained by deposing [the movant’s] attorney” given that, although the movant’s attorney could offer testimony relevant to the nonmovant’s unclean hands defense (i.e., evidence showing the attorney “intentionally misrepresented” that the nonmovant’s check was “returned unpaid due to unavailable funds”), that evidence would not have been sufficient to enable the movant to survive summary judgment based on that defense].) 19 Material Facts in support of a motion”]; id., rule 3.1350(a)(1) [defining “ ‘[m]otion’ ” for the purposes of this rule as “either a motion for summary judgment or a motion for summary adjudication”].) California Rules of Court, rule 3.1350(h) requires that separate statements adhere to a two-column format in which the movant’s undisputed material facts and supporting evidence appear in the lefthand column in order to allow the nonmovant to prepare an opposing separate statement in which the nonmovant could insert its “[r]esponse and [s]upporting [e]vidence” in the righthand column directly adjacent to each of the movant’s undisputed material facts. (See id., rule 3.1350(h).) Additionally, California Rules of Court, rule 3.1350(i) provides: “On request, a party must within three days provide to any other party or the court an electronic version of its separate statement. The electronic version may be provided in any form on which the parties agree. If the parties are unable to agree on the form, the responding party must provide to the requesting party the electronic version of the separate statement that it used to prepare the document filed with the court. Under this subdivision, a party is not required to create an electronic version or any new version of any document for the purpose of transmission to the requesting party.” (Cal. Rules of Court, rule 3.1350(i).) Appellants contend the Wong Defendants violated each of these rules. First, appellants argue the Wong Defendants “left no room for [a]ppellants to input their response to [the] . . . purportedly undisputed facts” on the separate statement because the Wong Defendants “included their evidentiary citations in the right-hand column (which, of course, belonged in the left-hand column).” Second, appellants contend their trial counsel 20 requested from the Wong Defendants an electronic copy of their separate statement on July 22, 2019, and that the Wong Defendants did not respond to that request until 14 days after appellants’ trial counsel asked for it, which was “just one day before the deadline to submit [their] opposition).” Third, appellants complain “the electronic copy that [the Wong Defendants] claimed to have provided was in a non-editable format, i.e., pdf,” and was not in the “editable format” the Wong Defendants’ counsel must have used to prepare the separate statement (e.g., a format “used [by] Microsoft Word”). The Wong Defendants admit that their “Separate Statement did not provide the supporting evidence in the left hand column of the document, but instead listed the evidence in the right hand column”; and that they provided a .pdf copy of the separate statement to appellants. Appellants insist “these defects” had “precluded [them] from responding to [the Wong Defendants’] separate statement . . . .” We observe that the Wong Defendants’ separate statement is only eight pages in length. Furthermore, the proof of service accompanying the separate statement shows the Wong Defendants mailed this document to appellants’ trial counsel on May 23, 2019. Appellants do not contest the validity of this proof of service or show that delivery of this document to their attorney had somehow been delayed.15 In addition, appellants concede 15 Appellants claim in their opening brief that “[t]he MSJ was served on June 14, 2019,” but neither of the documents they cite supports that proposition. 21 their opposition to the summary judgment motion was not due until August 6, 2019.16 Thus, appellants’ trial counsel had more than two months to copy the Wong Defendants’ eight-page separate statement manually into an editable electronic format in which the Wong Defendants’ evidentiary citations would appear in the left column of each page. Yet, the record does not contain any responsive separate statement from appellants. It thus appears that, instead of undertaking this commonsense measure to oppose the summary judgment motion, appellants’ trial counsel chose not to prepare and file a separate statement at all. Under these circumstances, we conclude the trial court did not act in an arbitrary, capricious, or patently absurd manner when it granted the Wong Defendants’ summary judgment motion notwithstanding the procedural defects raised by appellants.17 (Franceschi, supra, 1 Cal.App.5th at pp. 256–257; cf. Truong, supra, 181 Cal.App.4th at p. 118 [concluding that a trial court had the discretion to overlook a movant’s alleged failure to include the headings required by California Rules of Court, rule 3.1350(d) in a separate statement because the nonmovants had “not explained how any alleged deficiency . . . 16 (See Artal, supra, 111 Cal.App.4th at p. 275, fn. 2 [noting that we may construe a statement in a brief as an admission against the party making it].) 17 In light of our disposition, we do not address the Wong Defendants’ other arguments in support of the judgment, including their contentions that appellants improperly included certain documents in their appendix, and that appellants’ failure to provide a record of the oral proceedings in the trial court is fatal to their appeal. 22 impaired [their] ability to marshal evidence to show that material facts were in dispute”].) DISPOSITION The judgment is affirmed. Defendants and respondents Fred A. Wong and Wong & Mak, LLP are entitled to their costs on appeal. NOT TO BE PUBLISHED. BENDIX, Acting P. J. We concur: CHANEY, J. WEINGART, J.* * Judge of the Los Angeles County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. 23	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487784/	IN THE SUPERIOR COURT OF THE STATE OF DELAWARE STATE OF DELAWARE, ) ) ) v. ) Case ID No.: 1602004456A ) ) JONATHAN JOHNSON, ) ) Defendant. ) ORDER Submitted: November 10, 2022 Decided: November 18, 2022 AND NOW TO WIT, this 18th day of November, 2022, upon consideration of Defendant Jonathan Johnson (“Defendant”)’s multiple motions, the sentence imposed upon Defendant, and the record in this case, it appears to the Court that: 1. Defendant was charged with multiple offenses after law enforcement executed a search warrant of his home and located firearms, ammunition, heroin, cocaine, and marijuana.1 2. On the day of trial, April 25, 2017, Defendant pled guilty to one count of Drug Dealing and one count of Possession of a Firearm During the Commission of a 1 On September 12, 2016, a Superior Court grand jury returned an indictment against Defendant for the following charges: Drug Dealing (two counts), Aggravated Possession (two counts), Possession of a Firearm During the Commission of a Felony (two counts), Carrying a Concealed Deadly Weapon (one count), Possession of a Firearm by a Person Prohibited (two counts), Possession of Ammunition by a Person Prohibited (two counts), Possession of Drug Paraphernalia, and Endangering the Welfare of a Child (four counts). 1 Felony (“PFDCF”).2 Prior to sentencing, the State filed a Motion to Declare Defendant a Habitual Offender and to be sentenced on the PFDCF charge under 11 Del. C. § 4214.3 On October 27, 2017, the Court granted the State’s motion,4 and sentenced Defendant to the minimum mandatory twenty-five years for the firearm charge and to probation for the Drug Dealing offense.5 3. On October 17, 2018, Defendant filed his first Motion for Postconviction Relief under Superior Court Criminal Rule 61.6 The Court denied the motion.7 Defendant filed a Motion for Reconsideration of Postconviction Decision,8 which this Court dismissed as untimely.9 4. Between October 2019 and January 2020, Defendant also filed a Petition for Writ of Mandamus,10 a Petition for an Evidentiary Hearing,11 and a Motion to Stay the consideration of his Rule 61 Motion.12 These requests were denied on August 14, 2020.13 During the pendency of his Rule 61 Motion, Defendant also filed a Petition for Writ of Mandamus with the Delaware Supreme Court; denied on April 15, 2020.14 2 See D.I. 39. 3 D.I. 41; see 11 Del. C. § 4214. 4 D.I. 42. 5 D.I. 41, 43. 6 D.I. 44. 7 D.I. 109. 8 D.I. 111. 9 D.I. 116. 10 D.I. 75. 11 D.I. 78. 12 D.I. 81. 13 D.I. 94. 14 See Matter of Johnson, 228 A.3d 139, 2020 WL 1881069 (Del. Apr. 15, 2020) (TABLE). 2 5. In July of 2021, Defendant filed an “Affidavit of Fact: Notice of Fault and Opportunity to Cure/Writ of Revocation of Plea Contract & Affidavit of Facts.” 15 He demanded “to have a scheduled special appearance and/or phone/video conference” with the Court and a payment of $10 million. Defendant’s requests were denied. 6. On February 3, 2022, Defendant filed another Rule 61 Motion16 and a Motion for Appointment of Counsel.17 On March 22, 2022, this Court found the claims barred under Superior Court Criminal Rules 61(i)(2)(i) and 61(i)(4)18 and summarily dismissed that motion.19 7. From August to November 2022, Defendant now files approximately twenty-one new requests.20 This time, he asks the Court to vacate his sentence as it is 15 D.I. 119. 16 D.I. 131. 17 D.I. 132. 18 See Del. Super. Ct. Crim. R. 61(i)(4) (“Any ground for relief that was formerly adjudicated, whether in the proceedings leading to the judgment of conviction, in an appeal, in a postconviction proceeding, or in a federal habeas corpus proceeding, is thereafter barred.”). 19 D.I. 134. 20 On August 31, 2022, Defendant filed a Motion to File out of Time: (1) Motion for Reargument of Suppress Denial, (2) Direct Appeal of Suppress Denial, (3) Motion of Withdrawal of Plea, (4) Motion for Reargument of Conviction and Sentence, and (5) Direct Appeal of Conviction and Sentence. D.I. 141. On September 8, 2022, Defendant filed a Motion for Correction of Illegal Sentence. D.I. 153. On September 20, 2022, Defendant filed (1) Supplemental Demand Relief to Motions to File Out of Time, (2) Supplemental Demand Relief to Motion for Correction of Illegal sentence, (3) Motion for Withdrawal Plea, (4) Motion to File Out of Time to File a Motion to Suppress, and (5) Motion to Suppress. D.I. 143. On September 29, 2022, Defendant filed “summonses” to his attorneys, a Deputy Attorney General, and the State for two separate cases. D.I. 155–59. On October 4, 2022, Defendant filed a Motion for Correction of Illegal Sentence, same as D.I. 153 that was filed on September 8, 2022. D.I. 154. On October 13, 2022, Defendant filed a Notice of Writ of Declaratory Judgment. On October 27, 2022, Defendant filed a Notice of Fault and Opportunity to Cure Motion for Correction of Illegal Sentence, Withdrawal Plea, and a Motion to File Out of Time and Summons by November 1, 2022. D.I. 161. On November 7, 2022, Defendant 3 an “ex post facto” violation, to withdraw or set aside the plea agreement, to hold a suppression hearing, to grant his default judgment motion against the State, and to grant his request that the State pay him $1,830,000.00. In his motions, he claims excusable neglect, ineffective assistance, prejudice, and the State’s failure to respond to his claims. These motions and claims are baseless or have been squarely addressed by this Court. 8. Defendant’s Motions are procedurally barred and do not satisfy any pleadings requirements of Superior Court Criminal Rules. It is this Court’s hope that, if appealed, the Supreme Court will enjoin Defendant from filing future claims/appeals without leave of the Court.21 9. For the reasons stated above, Defendant’s motions are SUMMARILY DISMISSED. /s/ Vivian L. Medinilla Vivian L. Medinilla Judge oc: Prothonotary cc: Defendant Allison Abessinio, Esquire Investigative Services Office filed a Default Judgment. D.I. 162. On November 10, 2022, Defendant filed Affidavit of the Amount Due $1,830,000.00. D.I. 163. 21 See Carter v. State, 221 A.3d 914, 2019 WL 5446020, at *1 (Del. Oct. 23, 2019) (TABLE) (providing a warning that the Supreme Court will enjoin the defendant/appellant’s appeals from the Superior Court’s orders if he repetitively files appeals from the Superior Court’s orders dismissing his untimely and repetitive Rule 61 claims). 4	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487780/	Filed 11/18/22 In re Giselle S. CA2/2 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 SECOND APPELLATE DISTRICT DIVISION TWO In re GISELLE S., a Person B316883 Coming Under the Juvenile (Los Angeles County Super. Court Law. Ct. No. 21CCJP04251A) LOS ANGELES COUNTY DEPARTMENT OF CHILDREN AND FAMILY SERVICES, Plaintiff and Respondent, v. RASHAD S., Defendant and Appellant. APPEAL from orders of the Superior Court of Los Angeles County. Stephen C. Marpet, Judge Pro Tempore. Affirmed. Jesse Frederic Rodriguez, under appointment by the Court of Appeal, for Defendant and Appellant. Dawyn R. Harrison, Acting County Counsel, Kim Nemoy, Assistant County Counsel, and Stephen Watson, Deputy County Counsel, for Plaintiff and Respondent. ****** Rashad S. (father) appeals from the juvenile court’s jurisdictional and dispositional orders in dependency proceedings for his eight-year-old daughter. For the first time on appeal, he argues that the juvenile court lacked jurisdiction under the Uniform Child Custody Jurisdiction and Enforcement Act (the Act) (Fam. Code, § 3400 et seq.).1 Because the juvenile court did not prejudicially err, we affirm the orders. FACTS AND PROCEDURAL BACKGROUND I. Facts A. Birth of Giselle In August 2014, Giselle S. was born to Salena H. (mother) and father, in Baltimore, Maryland. B. Mother flees with Giselle Mother and father have a tumultuous relationship. They lived together in Maryland for approximately one month while mother was pregnant, but separated because father was physically abusive to mother. 1 All further statutory references are to the Family Code unless otherwise indicated. 2 In early 2016, when Giselle was about 18 months old, mother fled with Giselle to Florida. When father showed up in Florida, mother fled with Giselle to Colorado. C. Florida family court proceedings In September 2017, while mother was still in Colorado with Giselle, father filed for custody of Giselle in Florida state court. When mother did not respond to the filing, the Florida court issued a “default[]” judgment awarding father “sole parental responsibility” over Giselle. D. Family moves to California in June 2020 In September 2018, father went to Colorado, obtained custody of Giselle and moved to Los Angeles, California with her. Mother went back to Maryland. In November 2018, father allowed mother to come to Los Angeles to visit Giselle because “he didn’t want the full custody” and “mother was the only person Giselle loves and had a connection with.” In January 2019, father admitted he used a belt to “beat” Giselle for lying. Following an investigation conducted by the Los Angeles Department of Children and Family Services (the Department), father was educated on child abuse laws and it was recommended that he not physically discipline Giselle. At some point thereafter, father allowed Giselle to live with the paternal grandmother in Maryland, which enabled mother to have frequent contact with Giselle. In early 2020, when mother got sick and was hospitalized, father brought Giselle from Maryland to Los Angeles. Mother moved to Los Angeles in June 2020, and she and father agreed to share custody of Giselle. E. California family court proceedings In early August 2021, mother discovered bruises on 3 Giselle’s legs, which Giselle stated came from father hitting her with a belt buckle. On August 9, 2021, mother filed for full custody of Giselle and a restraining order against father in the California family court. On August 20, 2021, the California family court granted the request for a restraining order, awarded mother sole legal and physical custody of Giselle, and granted father Facetime visits. Children’s Hospital Los Angeles conducted a child abuse evaluation and, on August 30, 2021, concluded the findings were “consistent with physical abuse and the history [was] concerning for neglect and emotional abuse.” II. Procedural Background A. Petition and detention On September 9, 2021, the Department filed a petition asking the juvenile court to exert dependency jurisdiction over Giselle based on (1) father’s physical abuse of Giselle, which included repeatedly striking her legs with a belt buckle on August 5, 2021, as well as prior incidents of abuse involving the use of a belt, slapping, and punching, which “endangers [Giselle’s] physical health, safety, and well-being . . . and places [her] . . . at risk of serious physical harm, damage, danger, and physical abuse” (thereby rendering jurisdiction appropriate under Welfare and Institutions Code section 300, subdivisions (a) and (b)(1)); and (2) mother’s failure to protect Giselle because she knew of father’s abuse but nevertheless allowed father to reside in the home and have unlimited access to Giselle, which “endangers [Giselle’s] physical health, safety, and well-being . . . and places [Giselle] . . . at risk of serious physical harm, damage, [and] physical abuse” (thereby rendering jurisdiction appropriate under Welfare and Institutions Code section 300, subdivision (b)(1)). 4 B. Department contacts Florida courts On August 25, 2021, a Department social worker left a voicemail for the child welfare agency in Hillsborough County, Florida, requesting a return call regarding the family’s child welfare history. On August 31, 2021, the social worker received an email from the child welfare agency in Hillsborough County, Florida, which stated, “No Hillsborough County Child Protection Records. Possible case in Pinellas County, please contact [telephone numbers] for those records. For a complete check of child protection[] records in Florida make a request a[t] myflfamilies.com.” On October 12, 2021, the social worker called the telephone numbers that had been provided in the email from the child welfare agency in Florida but did not receive a return call. The same day, the social worker submitted an “Out of State” child welfare request form via the myflfamilies.com website. The social worker then received a confirmation email that stated, “Thank you, we have received your correspondence. Please expect a response within [seven to] 10 business days.” No response was received. C. Jurisdiction and disposition On November 16, 2021, the juvenile court held a jurisdictional and dispositional hearing. The court struck the allegation seeking to hold mother responsible for allowing father access to Giselle, reasoning that mother had been trying to flee from father for years. The court sustained all of the allegations against father, removed Giselle from father’s custody, and ordered family reunification services for father and family maintenance services for mother. D. Appeal Father filed this timely appeal. 5 DISCUSSION Father argues that the juvenile court’s order awarding mother custody of Giselle during the pendency of this juvenile dependency case implicates the Act, and precludes the court from exerting jurisdiction over Giselle until it complies with the Act’s special provisions. We review the meaning of the Act de novo, any factual findings resolving disputed issues for substantial evidence, and the application of the Act to undisputed facts de novo. (Schneer v. Llaurado (2015) 242 Cal.App.4th 1276, 1286; In re Aiden L. (2017) 16 Cal.App.5th 508, 520 (Aiden L.); In re Isaiah W. (2016) 1 Cal.5th 1, 9-10.) The Act “provides the exclusive means for determining the proper forum and subject matter jurisdiction for child custody proceedings involving . . . two states.” (Aiden L., supra, 16 Cal.App.5th at p. 516; A.M. v. Superior Court (2021) 63 Cal.App.5th 343, 349-350 (A.M.).) For these purposes, a juvenile dependency case qualifies as a child custody proceeding. (In re J.W. (2020) 53 Cal.App.5th 347, 355.) The Act generally sets up a “‘first in time’” rule that imbues the first state to make a custody determination with the authority to continue doing so. (A.M., at p. 351; In re Marriage of Kent (2019) 35 Cal.App.5th 487, 493 (Kent).) However, the Act nevertheless prescribes a variety of paths by which a new state (here, California) may acquire authority to modify the old state’s (here, Florida’s) earlier custody determination. One of those paths is relevant here. Under the Act, a second state may “modify a child custody determination made by a court of [the first state] state” if (1) “a court of th[e second] state has jurisdiction to make an initial determination,” which occurs when the second state is the child’s “home state . . . on the date of 6 the commencement of the [child custody] proceeding” in this case, (§§ 3423, 3421, subd. (a)(1)), and (2) “[a] court of th[e second] state . . . determines that the child[ and] the child’s parents . . . do not presently reside in the [first] state” (§ 3423, subd. (b); see also § 3422, subd. (a)(2)). (A.M., supra, 63 Cal.App.5th at p. 351 [explaining this path]; Kent, supra, 35 Cal.App.5th at p. 494; cf. In re Marriage of Nurie (2009) 176 Cal.App.4th 478, 504 [“[I]t is not enough that a jurisdiction qualify factually as the child’s home state for the courts to exercise modification jurisdiction.”].) The Act defines a child’s “home state” as “the state in which a child lived with a parent”—that is, was “physical[ly] presen[t]”— “for at least six consecutive months.” (§ 3402, subd. (g); Aiden L., supra, 16 Cal.App.5th at p. 518.) The requirements of this path are met here. It is undisputed that Giselle has been physically present in California since June 2020. Thus, California was Giselle’s “home state” on the date that the Department filed this dependency proceeding in September 2021. It is also undisputed that Giselle, father, and mother presently reside in California and thus “do not presently reside” in Florida (Gov. Code, § 244, subd. (b) [“There can only be one residence.”]); indeed, the record indicates that the last contact any of them had with Florida was in 2017, when father acquired the first child custody order through mother’s default. Admittedly, the juvenile court in this case was not able to make a determination that Giselle, father, and mother do not live in Florida, but that is because father raised this issue for the first time on appeal. However, we—as a California court—have made a determination on this issue based on the undisputed evidence, and that suffices; remanding so that the juvenile court can make the same finding would be an “idle act and ‘a waste of ever-more- 7 scarce judicial resources.’” (People v. Ledbetter (2014) 222 Cal.App.4th 896, 904; In re Dannenberg (2009) 173 Cal.App.4th 237, 256.) In light of our analysis, we need not address the parties’ remaining arguments regarding whether the Act’s other paths for asserting jurisdiction over child custody (such as the path that requires that the California court contact the Florida court) have been satisfied. DISPOSITION The juvenile court’s jurisdiction findings and disposition orders are affirmed. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS. ______________________, J. HOFFSTADT We concur: _________________________, P. J. LUI _________________________, J.* BENKE * Retired Associate Justice of the Court of Appeal, Fourth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. 8	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487788/	11/18/2022 IN THE SUPREME COURT OF THE STATE OF MONTANA Case Number: DA 21-0465 No. DA 21-0465 STATE OF MONTANA, Plaintiff and Appellee, v. THOMAS RALPH BRISTOW, Defendant and Appellant. ORDER Upon consideration of Appellant’s motion for extension of time, and good cause appearing, IT IS HEREBY ORDERED that Appellant is granted an extension of time to and including December 27, 2022, within which to prepare, file, and serve Appellant’s opening brief on appeal. Electronically signed by: Mike McGrath Chief Justice, Montana Supreme Court November 18 2022	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487789/	11/18/2022 IN THE SUPREME COURT OF THE STATE OF MONTANA Case Number: DA 21-0232 No. DA 21-0232 STATE OF MONTANA, Plaintiff and Appellee, v. SEAN MCKELVEY CALAHAN, Defendant and Appellant. ORDER Upon consideration of Appellant’s motion for extension of time, and good cause appearing, IT IS HEREBY ORDERED that Appellant is granted an extension of time to and including December 30, 2022, within which to prepare, file, and serve Appellant’s opening brief on appeal. Electronically signed by: Mike McGrath Chief Justice, Montana Supreme Court November 18 2022	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487786/	IN THE SUPERIOR COURT OF THE STATE OF DELAWARE STATE OF DELAWARE ) ) v. ) ID Nos. 1910011637, 1910002022 ) 2009010583, VOP16110110891 DEONTA CARNEY, ) ) Defendant. ) Date Submitted: August 1, 2022 Date Decided: November 18, 2022 Upon Defendant Deonta Carney’s Motion to Withdraw Guilty Pleas DENIED. ORDER Anthony J. Hill, Esquire and John S. Taylor, Esquire, Deputy Attorneys General, DEPARTMENT OF JUSTICE, 820 North French Street, Wilmington, Delaware, 19801, Attorneys for the State. Megan J. Davies, Esquire, LAW OFFICES OF MEGAN J. DAVIES, 716 N. Tatnall Street, Wilmington, Delaware 19801, Attorney for Defendant Deonta Carney. WHARTON, J. This 18th day of November, 2022, upon consideration of Defendant Deonta Carney’s (“Carney”) Motion to Withdraw Guilty Plea and the State’s responses, it appears to the Court that: 1. On July 12, 2021, Carney rejected a plea offer in case number 1910011637.1 The plea would have resolved four cases encompassing 27 charges.2 The plea offer called for Carney to plead guilty to five charges - two counts of Robbery Second Degree (as lesser included offenses of Robbery First Degree), two counts of Possession of a Firearm by a Person Prohibited (“PFBPP”), and Illegal Gang Participation and to admit to a violation of probation.3 In exchange, the State agreed to entered a nollo prosequi on all remaining charges, recommend the minimum mandatory sentence at Level V (10 years), and agreed that the “VOP be reimposed with no additional unsuspended level five time.”4 2. Following the plea rejection, case number 1910011637 was set for trial on July 20, 2021.5 However, before opening statements and upon learning the State’s out-of-state “critical civilian witness” was present,6 Carney informed the 1 D.I. 12. (Unless indicated otherwise, D.I. numbers are from ID No. 1910011637A.) 2 Id.; DUC# 2009010583 (eight charges); DUC# 1910011637A (six charges); DUC# 1910002022 (five charges); DUC# 1611010891 (eight charges). 3 Id. 4 Id. 5 D.I. 15. 6 Tr., at 2 (References to the transcript are to the Plea Colloquy hearing on July 20, 2021), D.I. 22. 1 State through counsel that he wished to plead guilty.7 The State extended the same offer Carney had rejected before, but with a notable difference – the State removed the cap on its sentencing recommendation.8 While less favorable to Carney than the earlier rejected plea offer, this plea offer benefitted Carney by limiting his exposure to minimum mandatory sentences and lowering his overall statutory maximum punishment.9 Carney accepted the plea. 3. After executing a Plea Agreement and Truth-in-Sentencing Guilty Plea Form, the Court conducted an extensive colloquy with Carney.10 He was informed again of the minimum mandatory and maximum possible penalties,11 the rights he was giving up by pleading guilty,12 and asked whether he was coerced into pleading or dissatisfied with his representation.13 Carney responded that he was neither coerced nor dissatisfied.14 The Court found “the plea to be knowingly, voluntarily 7 Id., at 3. 8 MR. TAYLOR: “It is not the plea that was previously on offer; it was gotten worse […] It is the same plea, but there is no State’s cap, so it is open sentencing.” Id., at 3:7–9; 3:13–15. 9 MR. MALIK: “By virtue of the plea that’s been entered in this case, Mr. Carney is avoiding an additional eight years of minimum mandatory time for each of the robbery charges, and it’s effectively reducing the maximum on each by 35 years.” Id., at 8:5–11. 10 Id. 11 Id., at 15–18. (Counsel had discussed potential sentences with Carney prior to the colloquy. Id., at 8–9.). 12 Id., at 13–14. 13 Id., at 13; 20. 14 Id., at 13:8–19; 20:16–19. 2 and intelligently offered and [accepted all pleas].”15 A presentence investigation was ordered, and sentencing was scheduled for September 24, 2021.16 4. Despite the extensive colloquy, Carney developed second thoughts. He filed a pro se Motion to Withdraw Guilty Plea on August 3, 2021 which was referred to his counsel.17 On October 21, 2021, John S. Malik, Esquire filed a Motion to Withdraw Guilty Plea on Carney’s behalf, including a copy of Carney’s pro se motion as an attachment.18 Counsel represented, and the pro se motion argued, that Carney was seeking to withdraw his guilty pleas in part because they were the product of ineffective assistance of counsel. 5. At a hearing on March 15, 2022, the Court permitted counsel to withdraw and confirmed with Carney that he desired that counsel be appointed for him to assist his in attempting to withdraw his guilty pleas.19 The Court ordered that new counsel be appointed for Carney and Megan J. Davies, Esquire subsequently was appointed to represent Carney. The Court then ordered that the State provide Ms. Davies with 15 Id, at 27:4–6. 16 D.I. 15; 16. 17 Def.’s pro se Mot. to Withdraw Guilty Plea, D.I. 18 (attached as Ex. C to the Motion to Withdraw Guilty Plea filed by Mr. Malik, D.I. 20). 18 Def.’s Mot. to Withdraw Guilty Plea, Ex C, D.I. 20. 19 D.I. 24. 3 certain discovery by June 24, 2022 and that she file any supplemental material or an amended motion to withdraw guilty plea by July 15, 2022.20 6. On July 14, 2022, Carney’s current counsel, Ms. Davies, filed his third and final submission in the form of a supplemental brief.21 The State has filed two responses in opposition – the first in response to the original motion filed by Mr. Malik and the second in response to Ms. Davies’ supplemental brief.22 7. Carney argues that he should be allowed to withdraw his plea because it was the product of ineffective assistance counsel,23 it was not knowingly, voluntarily, and intelligently entered, and it was entered despite him being innocent of one of the PFBPP charges.24 He also contends that the State would not be prejudiced if his motion is granted.25 20 D.I. 25. 21 Supp. Br. in Support of Def.’s Mot. to Withdraw Guilty Plea, D.I. 26. 22 State’s Resp. to Mot. to Withdraw Guilty Plea, D.I. 23; State’s Resp. to Supp. Mot. to Withdraw Guilty Plea, D. I. 27. 23 Almost as an afterthought, and without any documentation, Carney argues that as a young adult his ongoing brain development made him especially susceptible to his lawyers’ comments. He also claims that he “had not fully processed what was occurring nor the ramifications of his acceptance.” The Court does not find that the mere fact of Carney youth is a sufficient reason to allow him to withdraw his guilty pleas. It finds that Carney remains bound by his in-court representations, including his satisfactory representation. Supp. Br. in Supp. of Def.’s Mot. to Withdraw Guilty Plea, at ⁋ 23, D.I. 26; see Somerville v. State, 703 A.2d 629, 632 (Del. 1997). 24 E.g., Def.’s Mot. to Withdraw Guilty Plea, at ⁋ 9, D.I. 20 25 Id., at ⁋ 11. 4 8. The State counters that Carney has no grounds for withdrawing his guilty plea – he is not actually innocent of the PFBPP charge; his counsel was not ineffective; and the State would be unduly prejudice if the Motion were granted.26 It argues that granting the Motion would give Carney another opportunity to make sure the witnesses appear, only to change his mind and plead guilty at the 11th hour if they do.27 9. A guilty plea may be withdrawn before sentencing,28 but a defendant has no absolute right to do so.29 The defendant bears the “substantial”30 burden of showing “any fair and just reason” for withdrawal.31 The decision to grant or deny withdrawal is within the Court’s discretion.32 10. To determine whether there is a “fair and just” reason for withdrawal of a guilty plea, the Court must address the following: a) Was there a procedural defect in taking the plea; 26 State’s Resp. to Def.’s Mot. to Withdraw Guilty Plea, D.I. 23; State’s Resp. to Def.’s Supp. Mot. to withdraw Guilty Plea, D.I. 27. 27 State’s Resp. to Def.’s Supp. Mot. to Withdraw Guilty Plea, D.I. 27. Of course, the State is not obliged to offer a plea at any future trial should the Court grant the Motion. 28 Super. Ct. Crim. R. 32(d). 29 United States v. Wilson, 429 F.3d 455, 458 (3d Cir. 2005) (internal citations omitted). 30 United States v. Jones, 336 F.3d 245, 252 (3d. Cir. 2003) 31 Super. Ct. Crim. R. 32(d). 32 Id. (“the court may permit withdrawal of the plea”) (emphasis added); State v. Phillips, 2007 WL 3105749 at 1 (Del. Super. Ct. 2007) (quoting Brown v. State, 250 A.2d 503, 504 (Del. 1969)). 5 b) Did the defendant knowingly and voluntarily consent to the plea agreement; c) Does the defendant presently have a basis to assert legal innocence; d) Did the defendant have adequate legal counsel throughout the proceedings; and e) Does granting the motion prejudice the State or unduly inconvenience the Court.33 The Court does not balance these factors.34 Instead, “[c]ertain of the factors, standing alone, will themselves justify relief.”35 11. There were no procedural defects in the plea colloquy. Carney admits that there were no defects in the colloquy.36 The Court agrees and finds that the “numerous protections” afforded to Carney were honored. 12. Carney’s plea was entered into knowingly, intelligently, and voluntarily. Barring clear and convincing evidence to the contrary, defendants are bound by the representations they make during their plea colloquy.37 These statements are “presumed to be truthful”38 and pose a “formidable barrier to a collateral attack on a guilty plea.”39 At no point during his colloquy did Carney so 33 State v. Friend, 1994 WL 234120, at 2 (Del. Super. Ct. 1994) (internal citations omitted); see Scarborough v. State, 938 A.2d 644, 649 (Del. 2007); McNeill v. State, 2002 WL 31477132, at * 1–2 (Del. 2002). 34 Patterson v. State, 684 A.2d 1234, 1239 (Del. 1996). 35 Id. 36 Def.’s Mot. to Withdraw Guilty Plea, at ⁋ 9, D.I. 20. “Defendant Carney does not contend that there was a [procedural] defect with his guilty plea.”. 37 Somerville, 703 A.2d at 632. 38 Somerville, 703 A.2d at 632 (citing Davis v. State, 1992 WL 401566 (Del. 1992)); Bramlett v. A.L. Lockhart, 876 F.2d 644, 648 (8th Cir. 1989)). 39 Blackledge v. Allison, 431 U.S. 63, 64 (1977). 6 much as insinuate his plea was not knowingly, intelligently, and voluntarily entered.40 He informed the court that he was satisfied with his attorney’s representation.41 He denied being forced into pleading guilty.42 and he stated that he understood all the terms of the of his plea agreement.43 In addition to his own words, his trial counsel’s representations to the Court support the conclusion that Carney entered into the plea with a full understanding of it. Specifically, Mr. Malik stated that he believed that “based upon [his] discussions with him, that Mr. Carney is prepared at this time to enter a knowing, voluntary and intelligent plea before the Court.”44 Based on the above record, and as it did when the plea was entered, the Court finds that Carney entered his guilty plea knowingly, intelligently, and voluntarily. 13. Carney does not have a basis to establish factual or legal innocence. When seeking to withdraw their guilty pleas, criminal defendants remain presumptively bound by their representations to the Court.45 So, after pleading guilty, a defendant must present “some other support” to overcome their plea and to 40 See, Tr., D.I. 22. 41 Id., at 20:16–19. 42 Id., at 13:16–19. 43 Id., at 11–13. 44 Id., at 10:5–9. 45 Somerville, 703 A.2d at 632. 7 assert innocence.46 There is no mention of innocence in Carney’s pro se filing.47 The first mention of this consideration is in trial counsel’s follow-up motion where counsel simply states that: [s]ubsequent to the filing of his pro se motion to withdraw his guilty plea, Mr. Carney has indicated to counsel his belief that alleged inconsistencies in the police reports provide a basis to claim factual innocence given alleged misidentification of the perpetrators of the robbery by the alleged victim.48 In his third submission, Carney explains that he plead guilty to PFBPP in case 1910011637 despite being innocent.49 He argues that he neither actually possessed nor jointly possessed the gun.50 Carney bolsters this argument by pointing to the uncertainty in Det. Hayman’s Investigative Narrative as to who possessed the gun and when.51 The date of the alleged incident described in Det. Hayman’s report is August 22, 2019.52 For Carney, these points justify withdrawal. 14. The State first correctly points out that Carney misidentifies the case number for which he claims innocence. Carney references Det. Hayman’s report to 46 State v. McNeill, 2001 WL 392465, at * 3 (Del. Super. Ct. 2001) (citing Russell v. State, 734 A.2d 160 (table) (Del. 1999). 47 Def.’s Mot. to Withdraw Guilty Plea, Ex. C., D.I. 20. 48 Id., at ⁋10. 49 Supp. Br. in Support of Def.’s Mot to Withdraw Guilty Plea, at ⁋11, D.I. 26. 50 Id., at ⁋⁋ 11–14. Carney argues against joint possession by pointing to the fact that despite his call for his co-conspirator to fire the weapon no shots were fired. Id. at n. 1. 51 Id., at Ex. A. 52 Id. 8 support his claim.53 Det. Hayman’s report relates to case number 1910002022, not case number 1910011637 as Carney states.54 More substantively, the State argues that Det. Hayman’s report supports a conclusion that Carney, at a minimum, is guilty of constructive possession of the firearm.55 15. The proper starting point for addressing Carney’s contention that he is innocent of one of the PFBPP charges to which he pled guilty is the plea colloquy. Before accepting his pleas, as to each charge, the Court read that particular count to Carney, asked him if he understood the charge, asked him if he committed that offense, and asked him what his plea was.56 Specifically, as to the charge for which Carney now claims innocence, the exchange between the Court and Carney was as follows: THE COURT: The next charge is possession of a firearm by a person prohibited, which is Count IV of that same indictment that includes the last robbery charge, and it reads that you, on or before [sic] the 22nd day of August in 2019, in New Castle County, Delaware, did knowingly possess or control a firearm, as defined under Delaware law, after having been convicted of criminally negligent homicide, a felony, in case number 1611010891 in the Superior Court of the State of Delaware, in and for New Castle County, on or about February 27th, 2019. Do you understand that charge? 53 Id., at ⁋⁋ 11, 12. 54 State’s Resp. to Def’s Supp. Mot. to Withdraw Guilty Plea, D.I. 27. 55 Id. 56 Tr., at 21-27, D.I. 22. 9 THE DEFENDANT: Yes. THE COURT: Did you commit that offense? THE DEFENDANT: Yes. THE COURT: What’s your plea to that charge? THE DEFENDANT: Guilty.57 The record establishes that Carney understood he was pleading guilty to, and was in fact guilty of, the PFBPP count associated with the robbery charge that occurred on August 22, 2019.58 That incident is the one for which Det. Hayman authored the police report upon which Carney now relies to establish his innocence.59 Obviously, the Court views with skepticism Carney’s newly discovered understanding that he was innocent of that charge all along. 16. The Court finds that there was sufficient factual basis to convict Carney of PFBPP in the August, 2019 incident as described in Det. Hayman’s report. The relevant portion of the report reads, “The victim stated that the unknown black male accomplice was in possession of the silver handgun. During the incident S1 (Deonta Carney BMN and DOB: 10/28/2000) was stating to the younger black male suspect, ‘Just shoot him.’ However, during the incident, no shots were fired.”60 In order to 57 Id., at 25-26. 58 Id., at 24-25. 59 State’s Resp. to Def.’s Supp. Mot. to Withdraw Guilty Plea, at Ex. A, D.I. 27. 60 Id. 10 establish constructive possession, the State must show that Carney: (1) knew the location of the firearm; (2) had the ability and the intention, at the time, to exercise dominion and control over it; and (3) intended to guide its destiny.61 Circumstantial evidence may prove constructive possession.62 The Court finds all three elements of constructive possession are established in the quoted portion of Det. Hayman’s report. Carney knew the location of the firearm and appeared to have the ability and intention to exercise control over it and to guide its destiny when he commanded his accomplice to “Just shoot him.” The fact that the accomplice disobeyed Carney’s command does not alter this conclusion, particularly in light of Carney’s admission that he committed the offense when the Court questioned him. 17. Carney had effective legal counsel throughout his proceedings. To prevail on his ineffective assistance of counsel claim, Carney must satisfy the two- factor standard originally outlined in Strickland v. Washington.63 When it comes to withdrawal of a guilty plea, a defendant must show that: (1) counsel’s representation fell below an objective standard of reasonableness; and (2) that counsel’s actions were so prejudicial “that there is a reasonable probability that, but for counsel's errors, [the defendant] would not have pleaded guilty and would have insisted on 61 Lecates v. State, 987 A.2d 413, 426 (Del. 2009). 62 Id., at 420-421. 63 466 U.S. 668 (1984); see Albury v. State, 551 A.2d 53, 58 (Del. 1988). 11 going to trial.’”64 When evaluating counsel’s performance, “[a] court must indulge in a strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance.”65 18. The crux of Carney’s argument is that he was strong-armed into pleading guilty because he lost faith in his counsel after receiving the “misleading advice” that he likely would be convicted.66 The State counters that “Defendant is attempting to impose his own subjective and emotional view of the case and asks the Court to disregard what two seasoned and respected attorneys advised him, and to disregard his own words spoken to the Court when being given the plea colloquy on July 20, 2021.”67 The Court examines both attorneys’ conduct individually. 19. Kevin P. Tray, Esquire represented Carney before Mr. Malik. It is not clear at all to the Court what Mr. Tray had to do with Carney’s eventual decision to plead guilty which occurred 10 months after Mr. Tray’s representation ended.68 Nevertheless, the Court looks at Carney’s arguments about Mr. Tray. Those arguments revolve around a letter Carney received from Mr. Tray while Mr. Tray 64 Hill v. Lockhart, 474 U.S. 52, 59 (1985). 65 Strickland, 466 U.S. at 669 (emphasis added); see also Albury, 551 A.2d at 59. 66 Def.’s Mot. to Withdraw Guilty Plea, D.I. 20; Supp. Br. in Support of Def.’s Mot. to Withdraw Guilty Plea, at ⁋⁋ 21, D.I. 26. 67 State’s Resp. to Def’s Supp. Mot. to Withdraw guilty Plea, D.I. 27. 68 Mr. Malik entered his appearance on September 15, 2020, D.I. 7. Carney entered his pleas on July 20, 2021., D.I. 15. 12 was his attorney.69 He argues that Mr. Tray’s letter is indicative of coercion and a lack of willingness to advocate on his behalf because Mr. Tray states that “a trial would be a slow-motion guilty plea.”70 20. To the extent that comment matters in the context of Carney’s decision to plead guilty, the Court disagrees with Carney’s conclusion. The quotation is the last sentence in a three-paragraph letter written more than a year before Carney pled guilty.71 Earlier sections of the letter provide context for the statement. The statement comes after Mr. Tray tries to preserve confidentiality, explains his preferred means of communication, implores Carney to give him names of helpful witnesses, and notes “the strength of the evidence” against Carney.72 The comment that Carney claims deprived him of effective assistance of counsel from Mr. Tray is, “I strongly suggest that you bring [helpful witnesses] to my attention. Otherwise, you can see from the strength of the evidence, a trial would be a slow-motion guilty plea.”73 The Court fails to see how this letter constitutes anything but effective assistance. Criminal defense attorneys, indeed, all lawyers, are supposed to give their clients honest appraisals of the relative strength of the evidence in their cases 69 Def.’ Mot. to Withdraw Guilty Plea, at Ex. A to Ex. C, D.I. 20. 70 Id. 71 Id. 72 Id. 73 Id. 13 so that clients can make informed decisions. Mr. Tray’s realistic assessment, albeit somewhat colorful, is just such an appraisal. 21. Carney also claims that Mr. Malik “pressured” him into pleading guilty by pointing out that “he would be convicted if the State’s witness took the stand.”74 According to Carney, this comment indicates that Mr. Malik “had pre-determined the outcome of the case and would not act as the zealous advocate to which Mr. Carney was entitled.”75 This argument underscores Carney’s fundamental misunderstanding of the role of an attorney. A lawyer is not a cheerleader, and the fact that a lawyer gives a client a realistic assessment of the evidence does not preclude the lawyer from zealously advocating for the client at trial. Further, the plea colloquy belies any such contention that Carney was coerced into pleading guilty.76 In fact, Carney expressly acknowledged that he had “freely and voluntarily decided to plead guilty to the charges in the plea agreement.”77 He disavowed that “Mr. Malik, the State, or anybody threatened or forced him to plead guilty.”78 Crosby further told the Court that he was satisfied with Mr. Malik’s representation of him and that Mr. Malik had fully advised him of his rights.79 Mr. Malik informed 74 Supp. Br. in Support of Def.’s Mot. to Withdraw Guilty Plea, at ¶ 18, D.I. 26. 75 Id. 76 Tr., at 7-27, D.I 22. 77 Id., at 13:8-11. 78 Id., at 13:16-19. 79 Id., at 20:16-20. 14 the Court that he was prepared to proceed with trial, but that after seeing the out-of- state victim/witness, Carney decided to plead guilty.80 Even before trial, Mr. Malik’s filings demonstrate that he was actively engaged in the advocacy process by filing a discovery request,81 moving for bail to be reduced,82 and submitting proposed voir dire questions.83 22. Neither attorney’s conduct constitutes ineffectiveness under Strickland. Carney remains bound by his avowals that he was satisfied with his counsel's performance and that neither of his attorneys forced or coerced him into pleading guilty.84 23. Granting withdrawal would prejudice the State and unduly inconvenience the Court. The State “need not show […] prejudice when a defendant has failed to demonstrate that the other factors support a withdrawal of the plea.”85 Here, as detailed above, Carney failed to establish a sufficient basis for withdrawing his plea. Denial, therefore, is appropriate on that basis alone.86 The Court, however, briefly addresses the parties’ arguments regarding prejudice and 80 Id., at 2:12–14; 3-4. 81 D.I. 11. 82 D.I. 8. 83 D.I. 13. 84 Tr., passim, D.I. 22; see Somerville, 703 A.2d at 632. 85 United States v. Jones, 336 F.3d 245, 255 (3d Cir. 2003) (citing United States v. Harris, 44 F.3d 1206, 1210 (3d. Cir. 1995)). 86 United States v. Martinez, 785 F.2d 111, 116 (3d. Cir. 1986). 15 inconvenience. Carney argues that the State would not be prejudiced because “trial [would be] incredibly simple.”87 He claims that balancing this “simple” preparation against the “extensive exposure” Carney faces “should sway the Court in [his] favor[.]”88 The State counters that it spent weeks preparing for trial, including securing evidence and ensuring that all witnesses (one out-of-state victim is from Kansas) would be present.89 Allowing Carney to withdraw his guilty plea would result in undue prejudice and unfairly give Carney another opportunity to “change his mind at the 11th hour and accept a guilty plea.”90 24. Carney’s decision to plead guilty was calculated - he intended to proceed with trial if the victim did not appear, anticipating the charges would be dropped, and would accept a plea offer if the victim did appear.91 Upon being informed the victim was present, Carney changed his mind and chose to plead guilty. But, “[a] shift in defense tactics, a change of mind, or the fear of punishment are not adequate reasons to impose on the government the expense, difficulty, and risk of 87 Supp. Br. in Support of Def.’s Mot. to Withdraw Guilty Plea, at ¶ 24, D.I. 26. 88 Id. 89 State’s Resp. to Def.’s Mot. to Withdraw Guilty Plea, at 7, D.I. 23; State’s Resp. to Def.’s Supp. Mot. to Withdraw Guilty Plea, D.I. 27. 90 State’s Resp. to Def.’s Supp. Mot. to Withdraw Guilty Plea, D.I. 27. See, e.g., State v. Drake, 1995 WL 654131 at * 6 (Del. Super. Ct. 1995) (finding that the State would be prejudiced from a plea withdrawal because it was prepared for trial when the plea was entered). 91 Tr., at 3:1–3; 19–22, D.I. 22. 16 trying a defendant who has already acknowledged his guilt by pleading guilty.”92 Allowing Carney to withdraw his plea now only would reward his gamesmanship. THEREFORE, Defendant Deonte Carney’s Motion to Withdraw Guilty Plea is DENIED. The presentence investigation previously ordered shall be completed and a sentencing date shall be set. IT IS SO ORDERED /s/ Ferris W. Wharton Ferris W. Wharton, J. 92 United States v. Iavarone, 186 F. App’x 274, 276 (3d Cir. 2006) (citing United States v. Brown, 250F.3d 811, 815 (3d Cir. 2001). 17	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487787/	IN THE SUPERIOR COURT OF THE STATE OF DELAWARE SANTO E. LORENZO, and ) WILMI LORENZO, ) ) Plaintiffs, ) ) v. ) C.A. No. N21C-08-184 PRW ) LISA M. KIRK, ) MARTIN J. KIRK, JR., and ) RUBELINDA GENAO MADERA, ) ) Defendants. ) Submitted: November 15, 2022 Decided: November 18, 2022 ORDER Upon Plaintiffs Santo E. Lorenzo and Wilmi Lorenzo’s Motion to Amend their Complaint, GRANTED. This 18th day of November, 2022, upon consideration of the Plaintiffs’ Motion to Amend their Complaint (D.I. 27), the Kirk Defendants’ Response (D.I. 31),1 and the record in this matter, it appears to the Court that: (1) Plaintiffs Santo E. Lorenzo and Wilmi Lorenzo (“Plaintiffs”) bring this Motion to Amend their Complaint for the purpose of adding Brandi Petrucci as a defendant.2 1 Defendant Madera took no position on the present motion (D.I. 28 and 29). 2 Pls.’ Mot. to Amend at 1, Oct. 31, 2022 (D.I. 27). - 1- (2) Plaintiffs argue that Counsel for Defendants Lisa M. Kirk and Martin J. Kirk, Jr. (the “Kirk Defendants”) provided Plaintiffs with the fact that a non-party, Brandi Petrucci (Defendant Lisa Kirk’s daughter), was the actual driver of the allegedly negligent car, instead of Defendant Lisa M. Kirk.3 (3) The Kirk Defendants oppose this Motion on timeliness grounds. 4 Specifically, the Kirk Defendants argue that because the Complaint was filed on August 20, 2021, and the Motion to Amend was filed on October 31, 2022, the Motion is barred under Rule 15(c).5 (4) Rule 15 governs the procedures for amending a complaint.6 And Rule 15(c) governs the relation-back doctrine. 7 That section provides that “[a]n amendment of a pleading relates back to the date of the original pleading when: (1) relation back is permitted by the law that provides the statute of limitations applicable to the action, or (2) the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, or (3) the amendment changes the party or the naming of the party against whom a claim is asserted if the foregoing provision (2) is satisfied and, within the period provided by statute or these Rules for service 3 See id. ¶¶ 1-3; Compl. ¶ 11, Aug. 20, 2021 (D.I. 1) (“At all times material hereto, Defendant Lisa was operating a motor vehicle owned by and insured on behalf of Defendant Martin.”). 4 Defs.’ Opp’n to Pls.’ Mot. to Amend ¶ 8, Nov. 15, 2022 (D.I. 31). 5 Id. ¶¶ 1-8. 6 Del. Super. Ct. Civ. R. 15. 7 Del. Super. Ct. Civ. R. 15(c). -2- of the summons and complaint, the party to be brought in by amendment (A) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (B) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party.” 8 (5) As the Delaware Supreme Court has observed, satisfying Rule 15(c) requires: (i) the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading; (ii) the party to be brought in by amendment has received such notice of the pending action that the party will not be prejudiced in maintaining a defense on the merits; and (iii) the party to be brought in by amendment knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party. 9 (6) Moreover, the Delaware Supreme Court has “held that Superior Court Civil Rule 15 directs the liberal granting of amendments when justice so requires and that in the absence of prejudice to another party, the trial court is required to exercise its discretion in favor of granting leave to amend.”10 (7) The Kirk Defendants rely solely on the plain language of Rule 15(c) 8 Del. Super. Ct. Civ. R. 15(c). 9 Allmaras v. Bd. of Adjustment of Sussex Cty., 2020 WL 4669008, at 2 (Del. Aug. 7, 2020) (citing Del. Super. Ct. Civ. R. 15(c)). 10 Abdi v. NVR, Inc., 2008 WL 787564, at 1 (Del. Mar. 25, 2008) (cleaned up). -3- and cite to no case law. Their argument is that the phrase “within the period provided by statute or these Rules for service of the summons and complaint” 11 as used in Rule 15(c)(3) requires “that the amendment must occur within 120 days of the date the complaint is filed.” 12 (8) But this Court has commented on this Rule and its application in these scenarios. 13 And the Kirk Defendants’ interpretation is simply incorrect. For instance, in Walker v. Handler, a 2010 decision, this Court examined the phrase the Kirk Defendants cite, and found: The only reasonable interpretation of Rule 15(c)(3), as amended, is that the party subject to amendment may be added (or substituted) if that party received notice of the claim within the 120 days permitted for service of a complaint following termination of the relevant statute of limitations. Under this circumstance, the amendment relates back to the date of the original pleading. Rule 15(c) should not be used to bar a party from pursuing a cause of action because of technical infirmities if the claim can fairly be decided on the merits without prejudice to the defendant.14 (9) Here, the Kirk Defendants do not argue that notice was lacking or that non-party Brandi Petrucci does not have the ability to put on a defense. Nor could 11 Del. Super. Ct. Civ. R. 15(c). 12 Defs.’ Opp’n to Pls.’ Mot. to Amend ¶ 5. 13 See e.g., Concklin v. WKA Fairfax, LLC, 2016 WL 6875960, at 5 (Del. Super. Ct. Nov. 16, 2016) (“In fact, the amended complaint was not filed until after the 120–day period prescribed by Rule 15 for notice had also expired. In the case at bar, E. Earle Downing was given notice of the institution of the proceedings at the latest on March 28, the date service of process was made. These dates fall within the 120–day period following the institution of the action.”). 14 2010 WL 4703403, at 3 (Del. Super. Ct. Nov. 17, 2010) (emphasis added) (citation omitted). -4- they. Not only is Brandi Petrucci the admitted driver of the allegedly negligent vehicle, she is the daughter of the Kirk Defendants. 15 (10) Plaintiffs amended their Complaint to address a mistake of the identity of the proper party; Plaintiffs believed Lisa M. Kirk was the driver, but they found out via discovery that her daughter, Brandi Petrucci, was the actual driver.16 This is the type of mistake appropriate for Rule 15(c) relief. 17 (11) Accordingly, Plaintiffs’ Motion to Amend their Complaint for the purpose of adding Brandi Petrucci as a defendant is GRANTED. SO ORDERED this 18th day of November, 2022. _ Paul R. Wallace, Judge Original to Prothonotary cc: All counsel via File & Serve 15 Defs.’ Opp’n to Pls.’ Mot. to Amend at 1. See Walker, 2010 WL 4703403, at 3 (noting that: “For purposes of Rule 15(c), notice is satisfied when the parties are so closely related in their business operations or other activities that the institution of an action against one serves to provide notice of the litigation to the other.” (internal quotations omitted) (emphasis added)); Ayres v. Delaware State Police, 2011 WL 13175210, at 4 (Del. Com. Pl. Nov. 4, 2011) (granting motion to amend to add two previously unnamed troopers as defendants, after finding “the troopers received sufficient notice within the statute of limitations period based on the identity of counsel, facts, and interest between the State, DSP, and the troopers sought to be added in the amended complaint”). 16 See Pls.’ Mot. to Amend ¶¶ 1-3. 17 Allmaras v. Bd. Of Adjustment Sussex Cty., 248 A.3d 105, 109 (Del. Super. Ct. Nov. 12, 2019). -5-	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487785/	SUPERIOR COURT OF THE STATE OF DELAWARE CRAIG A. KARSNITZ 1 The Circle, Suite 2 RESIDENT JUDGE Georgetown, DE 19947 Telephone (302) 856-5263 November 18, 2022 Augustus H. Evans, Jr. SBI# 00191247 James T. Vaughn Correctional Center 1181 Paddock Road Smyrna, DE 19977 Re: State of Delaware v. Augustus H. Evans, Jr., Def. ID# 0609011528A Dear Mr. Evans: On October 26, 2021, I denied (1) your August 13, 2021 “Amended Memorandum Supporting Motion to Rehear” Judge Robinson’s April 19, 2021 denial of your tenth Rule 61 Motion for Postconviction Relief, (2) your request for the appointment of postconviction counsel, and (3) your request for an evidentiary hearing. On November 14, 2022, we received three additional filings from you: (1) Rule 22 Motion to Stay Proceedings Until Rule 35(a): Correction of Illegal Sentence Motion Before Delaware Superior Court is Resolved, to be filed in the Supreme Court of the United States; (2) Rule 35(a) Motion for Correction of Illegal Sentence, to be filed in the Superior Court for New Castle County; and, (3) Rule 35(a) Motion for Correction of Illegal Sentence, to be filed in this Court. All three Motions were received by Judge Wallace in the Superior Court for New Castle County, who recused himself1and directed that the Motions be returned to the Prothonotary for reassignment. The Motions have been reassigned to me. Your first Motion is captioned as “Rule 22 Motion to Stay Proceedings Until Rule 35(a): Correction of Illegal Sentence Motion Before Delaware Superior Court is Resolved,” to be filed with the United States Supreme Court. Delaware Superior Court Criminal Rule 22 addresses the time of a motion to transfer a case to another county for plea and sentence2 or for trial,3 and therefore does not appear to be apposite in this case. Nor does United States Supreme Court Rule 22 (Application to Individual Justices) appear to be apposite. In any event, your Motion appears to ask the United States Supreme Court to stay the proceedings in your case until the Delaware Superior Court rules on your Rule 35(a) Motions. Perhaps you meant to file with the Delaware Supreme Court.4 In any event, this Court cannot accept filings for either the United States Supreme Court or the Delaware Supreme Court, which you must file directly with those Courts. Your second Motion is specifically addressed to Judge Wallace, claiming that he has unique expertise on, and is best versed on, the issues raised by your case. As stated above, Judge Wallace has recused himself, and I have been assigned to this case. The substance of this second Motion is identical to the substance of your third Motion, so I will rule on them simultaneously. Your third Motion is made under Rule 35(a) for correction of an illegal sentence. Rule 35(a) permits me to correct an illegal sentence “at any time.”5 The “narrow function of Rule 35 is to permit correction of an illegal sentence, not to re- examine errors occurring at the trial or other proceedings prior to the imposition of 1 Under Del. Judges’ Code of Judicial Conduct Canon 2, Rule 2.11(A)(4)(a) (2022). 2 Super. Ct. Crim. R. 20. 3 Super. Ct. Crim. R. 21. 4 In Evans v. State, 2015 WL 7758307, at *2 (Del. Dec. 1, 2015), the Delaware Supreme Court stated that, based on your history of repetitive and frivolous filings, you cannot challenge your criminal convictions in that Court unless you submit the required filing fee or a completed motion to proceed in forma pauperis with a sworn affidavit containing the certifications required by 10 Del. C. 8803(e)(5) and that motion is granted by the Delaware Supreme Court. 5 Super. Ct. Crim. R. 35(a). 2 sentence.”6 “A proceeding under Rule 35 presupposes a valid conviction.”7 Relief under Rule 35(a) is available “when the sentence imposed exceeds the statutorily- authorized limits, [or] violates the Double Jeopardy Clause.”8 A sentence may be illegal if it violates the defendant’s constitutional or statutory rights, or if the court lacked jurisdiction.9 A sentence is also illegal if it “is ambiguous with respect to the time and manner in which it is to be served, is internally contradictory, omits a term required to be imposed by statute, is uncertain as to the substance of the sentence, or is a sentence which the judgment of conviction did not authorize.”10 Your Motion does not address any of these grounds for an illegal sentence. Rather, and given the fact that your conviction and sentence occurred many years ago, you appear to have latched on to the words “at any time” to rehash all the errors you have repeatedly alleged occurred at the trial prior to the imposition of your sentence, or in your numerous Rule 61 Motions. These include failure to give a jury instruction on a lesser included offense (Menacing), actual innocence in fact, and the retroactive application of a post-sentencing change to Rule 61 which eliminated the “miscarriage of justice” exception to the bars to relief11 (which you claim is an ex post facto violation of your due process rights). These claims have all been adjudicated numerous times previously and denied by this Court. Another Rule 61 Motion disguised as a Rule 35(a) Motion simply does not pass muster. Accordingly, both of your Motions for Correction of Illegal Sentence under Rule 35(a) are DENIED. 6 Hill v. United States, 368 U.S. 424, 430 (1962). 7 Whitfield v. United States, 401 F.2d 480, 483 (9th Cir. 1968). Accord Evans v. State, 892 P.2d 796, 797 (Wyo. Supr., 1995); State v. Meier, 440 N.W.2d 700, 703 (N.D.Supr.,1989). 8 United States v. Pavlico, 961 F.2d 440, 443 (4th Cir. 1992). 9 Kelly v. State, 911 A.2d 803 (Del. 2006). 10 United States v. Dougherty, 106 F.3d 1514, 1515 (10th Cir. 1997); see generally Brittingham v. State, 705 A.2d 577 (Del. 1998). 11 Super. Ct. Crim. R. 61(i). 3 IT IS SO ORDERED. Very truly yours, /s/ Craig A. Karsnitz cc: Prothonotary 4	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487792/	[Cite as State v. Rogers, 2022-Ohio-4126.] IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT ERIE COUNTY State of Ohio Court of Appeals No. E-21-027 E-21-031 Appellee Trial Court No. 2020 CR 0257 v. Ravon Q. Rogers DECISION AND JUDGMENT Appellant Decided: November 18, 2022 *** Kevin J. Baxter, Erie County Prosecuting Attorney, and Kristin R. Palmer, Assistant Prosecuting Attorney, for appellee. Felice L. Harris, for appellant. *** OSOWIK, J. {¶ 1} This is a consolidated appeal from a judgment of the Erie County Court of Common Pleas which, following entry of guilty pleas, found appellant guilty of involuntary manslaughter and robbery and sentenced him to an aggregate prison term between 19 and 24 and one-half years. For the reasons set forth below, this court affirms the judgment of the trial court. I. Background {¶ 2} On August 13, 2020, an Erie County Grand Jury indicted defendant- appellant, Ravon “Tay” Rogers, on one count of murder, a violation of R.C. 2903.02(B), 2903.02(D), and 2929.02(B), and an unclassified felony (hereafter, “Count no. One”). Then on July 12, 2021, plaintiff-appellee, state of Ohio, filed a bill of information against appellant for one count of robbery, a violation of R.C. 2911.02(A)(2), and a felony in of the second degree pursuant to R.C. 2911.02(B) (hereafter, “Count no. Two”). Appellant waived presentation of Count no. Two to the grand jury. Two additional felony indictments were subsequently issued by an Erie County Grand Jury for aggravated robbery and for robbery, but appellee dismissed both without prejudice as part of plea negotiations. Appellant initially pled not guilty to all charges. {¶ 3} The record contains the following relevant facts. In the early hours of July 23, 2020, appellant went to the home of his mother and the victim, his stepfather, in Sandusky, Erie County, Ohio, and drew the victim outside the home to talk. The victim suffered from heart problems well-known by his family. Appellant confronted the victim to give him “something” taken from him, either marijuana or $800 in cash, which the victim denied owing appellant. Appellant proceeded to severely beat the victim with a blunt object, believed to be a baseball bat, and left the victim on the ground with 20 2. discreet blunt force impacts, described by the coroner as defensive in nature: to the head, neck, back, chest, forearms, hands, right thigh, legs, and calf. Additionally, the victim suffered fractured ribs, lobe contusion to the right lung, fractures of the left distal ulna and right fourth phalange; and extensive soft tissue swelling intramuscular hemorrhages. Appellant subsequently messaged on social media to a friend that he, “Just beat the shit out of [the victim]” and, when the recipient of the message asked why appellant did that when he knew the victim was “sick,” appellant replied “Took my shit,” which we infer is the disputed marijuana or money. {¶ 4} Through the assistance of neighbors, the victim called 9-1-1 and implicated appellant with the beating he received. An ambulance was summoned, and the responding police officer interviewed the victim while they waited for the ambulance. The victim again implicated appellant with the beating. {¶ 5} The ambulance transported the victim to a local hospital, but his condition deteriorated rapidly and could not be interviewed further by law enforcement prior to his death. The victim died two days later from traumatic pneumothorax, described at sentencing as lung collapse, and catecholamine storm, described as cardiac arrhythmia. In the course of the investigation, appellant repeatedly insisted to law enforcement that he was not present at the home or, alternatively, acted in self-defense from the victim’s unprovoked attack on him. 3. {¶ 6} After the parties conducted discovery and held plea negotiations, appellant initially appeared before the trial court on July 12, 2021, but did not offer any guilty pleas at that time because of the recently filed bill of information for Count no. Two and needing additional time to consider the proposed plea agreement, summarized by the trial court as, “felony of the first degree, involuntary manslaughter, felony of the second degree, robbery, possible consecutive sentences of up to 19 to 24 and a half years under Reagan Tokes Law in effect since March 22, 2019, and deferring to the victim and the Court for sentencing.” Then, on July 16, 2021, appellant offered a guilty plea to involuntary manslaughter, a first-degree felony violation of R.C. 2903.04(A) and 2903.04(C), and a lesser, amended offense to Count no. One. Appellant also offered a guilty plea to Count no. Two, robbery. The trial court conducted a lengthy plea colloquy, including addressing the possibility of consecutive sentences in the context of indefinite sentencing resulting in an aggregate prison term between 19 and 24 and one-half years. After appellant’s assent in the record to all of the trial court’s questions, the trial court accepted the guilty pleas and found appellant guilty of both offenses. {¶ 7} The trial court received additional briefing on sentencing matters related to appellant’s recommended sentencing range for seven to 10 years and appellant’s questioning the constitutionality of R.C. 2967.271, a part of the Reagan Tokes Law. At sentencing on August 12, 2021, without objection, the trial court repeated the stipulation first announced at the plea hearing: that consecutive sentences may be imposed pursuant 4. to State v. Earley, 145 Ohio St.3d 281, 2015-Ohio-4615, 49 N.E.3d 266. The trial court then denied appellant’s motion challenging the constitutionality of the Regan Tokes Law, which the Ohio Supreme Court had not yet decided. Following a lengthy sentencing hearing with statements from potential witnesses, victim statements, appellant’s statement, the presentence investigation report, appellant’s sentence mitigation arguments, the sentencing guidelines and mandates collectively under R.C. 2929.11, 2929.12, 2929.13, 2929.14, and 2929.144, the trial court sentenced appellant as follows: The Court finds that the appropriate sentence on Count 1, felony of the first degree, the Court imposes the * * * maximum sentence of 11 years; on Count 2, the maximum sentence of 8 years. The Court finds that consecutive sentence is necessary, that’s 19 years, and, of course, under Reagan Tokes, 5 and a half years onto that for the felony of the first degree makes the sentence to be 19 years to * * * 24 and a half years. {¶ 8} The trial court’s August 13 journalized sentencing entry states, among other matters, IT IS THEREFORE ORDERED, ADJUDGED AND DECREED, based on the foregoing that: Defendant having been found guilty as to the following: Count #1 Involuntary Manslaughter – As Amended, Felony 1, in violation of O.R.C. § 2903.04(A)/(C). * * * Defendant is sentenced to the Ohio Department of Rehabilitation and 5. Correction to be imprisoned and confined for a Minimum Prison term of 11 years to the Maximum Prison term of 24 years 6 months (Reagan Tokes law); Count #2 Robbery, Felony 2, in violation of (Emphasis sic.) O.R.C. § 2911.02(A)(2)/(B). * * * Defendant is sentenced to the Ohio Department of Rehabilitation and Correction to be imprisoned and confined for a definite sentence of 8 years of which is Mandatory 0. * * * The Prison sentence imposed in this case is 19 years to 24 years 6 months of which 0 is Mandatory. * * * The Qualifying Offenses(s) are Count(s) #1, 2. The 11 years prison term is the Minimum Prison Term (Specifications not included). The 19 years prison term is the Aggregated Minimum Prison Term (combination of all consecutive indefinite minimum and definite terms). The 24 years 6 months prison term is the Maximum Prison Term (Specifications & PRC time not included). (Emphasis sic.) {¶ 9} Appellant then timely filed this appeal setting forth four assignments of error: I. The trial court plainly erred in failing to merge Mr. Rogers’s convictions for Involuntary Manslaughter and Robbery. II. Ravon Rogers’s plea was not knowingly, intelligently, and voluntarily made in violation of the Ohio and United States Constitution. 6. III. Mr. Rogers’s sentence is contrary to law and fails to comply with R.C. 2929.14 and R.C. 2929.144. IV. The Reagan Tokes Act is unconstitutional as it impermissibly violates the Separation of Powers doctrine and the Due Process Clauses of the United States and Ohio Constitutions. II. Felony Sentencing {¶ 10} The essence of all four assignments of error challenge, as contrary to law, different aspects of appellant’s felony sentence, which we will address out of order. Reviewing the imposition of a felony sentence, we use the standard set forth in R.C. 2953.08(G)(2). State v. Tammerine, 6th Dist. Lucas No. L- 13-1081, 2014-Ohio-425, ¶ 16. R.C. 2953.08(G)(2) allows us to “increase, reduce, or otherwise modify a sentence,” or “vacate the sentence and remand the matter to the sentencing court for resentencing” if we clearly and convincingly find either “(a) That the record does not support the sentencing court’s findings under division (B) or (D) of section 2929.13, division (B)(2)(e) or (C)(4) of section 2929.14, or division (I) of section 2929.20 of the Revised Code, whichever, if any, is relevant,” or “(b) That the sentence is otherwise contrary to law.” State v. Printke, 6th Dist. Lucas No. L-21-1233, 2022-Ohio-2981, ¶ 10. A sentence is “contrary to law” when imposed by a trial court “based on factors or considerations that 7. are extraneous to those that are permitted by R.C. 2929.11 and 2929.12.” State v. Bryant, Slip Opinion No. 2022-Ohio-1878, ¶ 22, citing State v. Jones, 163 Ohio St.3d 242, 2020- Ohio-6729, 169 N.E.3d 649, ¶ 34 (a violation of statute or legal regulations at a given time satisfies a finding of “otherwise contrary to law”). {¶ 11} As discussed below, we do not find clearly and convincingly appellant’s felony sentence is otherwise contrary to law. A. Merger of Guilty Pleas {¶ 12} Appellant’s first assignment of error argues the trial court’s failure to merge his guilty pleas and to issue a concurrent sentence term of seven to ten years constituted plain error as a matter of law, citing State v. Ruff, 143 Ohio St.3d 114, 2015- Ohio-995, 34 N.E.3d 892, ¶ 13. Appellant argues the record contains “no specific facts * * * that the robbery was committed with separate conduct, animus, or import” as involuntary manslaughter because: (1) his purpose, or animus, did not change during the course of his actions; (2) there was only one victim, whose pre-existing poor health issues were “precipitating factors that led to his death”; and (3) any physical harm to the victim only occurred after the victim refused to return what appellant believed the victim owed. We disagree. {¶ 13} Plain error is an error affecting substantial rights. State v. Scott, 6th Dist. Lucas No. L-21-1128, 2022-Ohio-2071, ¶ 21. We follow a three-step process to determine whether the trial court committed plain error: (1) the existence of an error, i.e., 8. a deviation from a legal rule; (2) the error must be plain, i.e., the error must be an obvious defect in the proceedings; and (3) the error must have affected the defendant’s substantial rights, i.e., the error must have affected the outcome of the proceedings. State v. Kamer, 6th Dist. Wood No. WD-20-084, 2022-Ohio-2070, ¶ 121. {¶ 14} We review the alleged error in light of all admitted evidence and will reverse only in the exceptional circumstance to prevent a miscarriage of justice, i.e., that but-for the error, the outcome of the proceedings clearly would have been different. State v. Page, 2018-Ohio-2866, 117 N.E.3d 874, ¶ 18 (6th Dist.) (there must be a reasonable probability the error prejudicially affected the outcome of the trial); State v. Sneed, 63 Ohio St.3d 3, 10, 584 N.E.2d 1160 (1992) (notice of Crim.R. 52(B) plain error requires the utmost caution, under exceptional circumstances, and only to prevent a miscarriage of justice). As we discuss below, we find no plain error as a matter of law with respect to appellant’s unmerged, consecutive sentences. {¶ 15} Merger is a sentencing question, and the defendant bears the burden to establish that R.C. 2941.25 prohibits multiple punishments for a “single” criminal act. State v. Washington, 137 Ohio St.3d 427, 2013-Ohio-4982, 999 N.E.2d 661, ¶ 18. Contrary to appellee’s argument that appellant waived the issue of merger for failing to raise it with the trial court, the record shows the trial court heard appellant’s merger argument for a single sentence of seven to 10 years. We review a trial court’s R.C. 2941.25 determination de novo as a question of law. State v. Williams, 134 Ohio St.3d 9. 482, 2012-Ohio-5699, 983 N.E.2d 1245, ¶ 1, 12, and 25 (a question of law that involves a consideration of the facts does not turn it into a question of fact). {¶ 16} We agree that R.C. 2941.25 codifies the protections of the Double Jeopardy Clause of the Fifth Amendment to the United States Constitution and Section 10, Article I of the Ohio Constitution, which prohibit multiple punishments for the same offense. Williams at ¶ 13, citing State v. Underwood, 124 Ohio St.3d 365, 2010-Ohio-1, 922 N.E.2d 923, ¶ 23. “At the heart of R.C. 2941.25 is the judicial doctrine of merger; merger is ‘the penal philosophy that a major crime often includes as inherent therein the component elements of other crimes and that these component elements, in legal effect, are merged in the major crime.’” (Citation omitted.) Id. The question of law before the trial court is not whether a particular sentence is justified, but whether the defendant may be sentenced upon all the offenses. Id. at ¶ 15, citing Underwood at ¶ 27. {¶ 17} “Under R.C. 2941.25(B), a defendant whose conduct supports multiple offenses may be convicted of all the offenses if any one of the following is true: (1) the conduct constitutes offenses of dissimilar import, (2) the conduct shows that the offenses were committed separately, or (3) the conduct shows that the offenses were committed with separate animus.” Ruff, 143 Ohio St.3d 114, 2015-Ohio-995, 34 N.E.3d 892, at paragraph three of the syllabus. Contrary to appellant’s argument, we find the record affirmatively answers the first Ruff inquiry, which “makes merger needless.” State v. McAlpin, Slip Opinion No. 2022-Ohio-1567, ¶ 194; State v. Earley, 145 Ohio St.3d 281, 10. 2015-Ohio-4615, 49 N.E.3d 266, ¶ 16. The evidence in the record establishes that appellant went to the victim’s house to retrieve either his money or marijuana that he believed the victim had in his possession. He went to the victim’s house intending to rob the victim. A beating ensued with a baseball bat. The victim sustained numerous injuries articulated by the trial court. This Robbery constitutes an offense of dissimilar import from Involuntary Manslaughter. {¶ 18} Further, Roger’s rather inartful argument raised for the first time before this court that the victim died from pre-existing poor health issues will not be addressed. {¶ 19} Upon de novo review, we do not find clearly and convincingly the trial court’s determination under R.C. 2941.25 of unmerged, consecutive sentences is otherwise contrary to law. “‘[A] defendant’s conduct that constitutes two or more offenses against a single victim can support multiple convictions if the harm that results from each offense is separate and identifiable from the harm of the other offense.’” State v. Jackson, 149 Ohio St.3d 55, 2016-Ohio-5488, 73 N.E.3d 414, ¶ 128, quoting Ruff at ¶ 26. Here, the single victim suffered separate and identifiable harms where appellant’s violation of R.C. 2911.02(A)(2), robbery, did not require evidence of the victim’s resulting death, as was required for a violation of R.C. 2903.04(A), involuntary manslaughter. {¶ 20} Appellant’s first assignment of error is not well-taken. 11. B. Sentence is contrary to law {¶ 21} Appellant asserts as his third assignment of error that his sentence is contrary to law and fails to comply with R.C. 2929.14 and R.C. 2929.144. {¶ 22} In support of his claim in this assignment of error, appellant subdivides his argument into two issues. The first issue claims that the trial court erred in failing to impose an indefinite sentence with stated minimum terms pursuant to R.C. 2929.14 prior to imposing an aggregate consecutive sentence pursuant to 2929.144 (C). {¶ 23} In this case, appellant was sentenced as follows: 1.) On the Involuntary Manslaughter Count #1charge ordered to serve a Minimum Prison term of 11 years to the Maximum Prison term of 24 years 6 months (Reagan Tokes law); 2.) On Count #2 Robbery, Felony 2, in violation of (Emphasis sic.) O.R.C. § 2911.02(A)(2)/(B). * * * Defendant is sentenced to the Ohio Department of Rehabilitation and Correction to be imprisoned and confined for a definite sentence of 8 years of which is Mandatory 0. * * The court went on to impose these sentences consecutive to each other and therefore concluded that the total sentence imposed was 19 years to 24 years 6 months of which 0 is Mandatory. * * * The Qualifying Offenses(s) are Count(s) #1, 2. The 11 years prison term is the Minimum Prison Term (Specifications not included). The 19 years prison term is the Aggregated Minimum Prison Term (combination of all 12. consecutive indefinite minimum and definite terms). The 24 years 6 months prison term is the Maximum Prison Term (Specifications & PRC time not included). (Emphasis sic.) {¶ 24} Appellant asserts that the judgment entry does not reflect the trial court’s pronouncement when the court stated: “The Court finds that the appropriate sentence on Count 1, felony of the first degree, the Court imposes the min – the maximum sentence of 11 years; on Count 2, the maximum sentence of 8 years. The Court finds that consecutive sentence is necessary, that’s 19 years, and of course, under the Reagan Tokes, 5 and a half years onto that for the felony of the first degree makes the sentences to be 19 years and 24 ha – 24 and a half years.” {¶ 25} Appellant pled guilty to one count of involuntary manslaughter in violation of R.C. 2903.04(A), which states, “No person shall cause the death of another * * * as a proximate cause of the offender’s committing or attempting to commit a felony.” That offense is a first-degree felony under R.C. 2903.04(C). Appellant also pled guilty to one count of robbery in violation of R.C. 2911.02(A)(2), which states, “No person, in attempting or committing a theft offense or in fleeing immediately after the attempt or offense, shall * * * inflict, attempt to inflict, or threaten to inflict physical harm on another.” A violation of R.C. 2911.02(A)(2) is a second-degree felony under R.C. 2911.02(B). After a lengthy plea colloquy, the trial court accepted both guilty pleas, 13. determined they would run consecutively, and sentenced appellant to an aggregate, indefinite sentence between 19 and 24 and one-half years. The foregoing determinations are reflected in the sentencing judgment entry. {¶ 26} At both the July 12 and July 16 plea hearings, appellant heard the methodology leading to 19 to 24 and one-half years as the potential, indefinite, maximum sentence under the Reagan Tokes Law, if both felonies were made consecutive. The identical information of 19 to 24 and a half years became the indefinite, maximum sentence, and it was relayed at both the August 12 sentencing hearing and in the August 13 journalized sentencing judgment entry. {¶ 27} We do not find clearly and convincingly that the sentencing “math” employed by the trial court is otherwise contrary to law. The trial court’s sentence is within the statutory ranges authorized by the Ohio General Assembly for appellant’s offenses, and we do not find any trial court error by adhering to the authorized statutory ranges. State v. Moore, 6th Dist. Lucas No. L-21-1033, 2021-Ohio-3995, ¶ 19. R.C. 2929.14(A)(1)(a) authorizes indefinite prison terms for amended Count no. One, a first- degree felony, comprised of two parts: a “stated minimum term,” which the trial court referred to as “flat time” or “regular time,” within a range from a minimum of three years to a maximum of 11 years, plus an indefinite “maximum term,” which the trial court referred to as “tail time,” to be determined under R.C. 2929.144(B)(2). Appellant’s note of the trial court’s reference to a “maximum sentence of 11 years” for amended Count no. 14. One is a correct reference to the maximum of the range of that portion of his sentencing “math,” and the trial court continued. {¶ 28} Despite appellant’s protestations, the trial court’s reference to a “maximum sentence of 8 years” for Count no. Two, a second-degree felony, is also a correct reference to the maximum of the range, from a minimum of two years to a maximum of eight years, of that portion of his sentencing “math,” i.e., the “flat time” which is the “stated minimum time” pursuant to R.C. 2929.14(A)(2)(a). In this case, there is no “tail” time for Count no. Two pursuant to R.C. 2929.144(B)(2) as a result of the trial court determining that consecutive sentences were necessary under R.C. 2929.14(C)(4). {¶ 29} In sentencing a defendant to a consecutive sentence for multiple crimes where at least one is subject to an indefinite sentence, a court is required to add all of the indefinite and definite terms that are to be served consecutively and then [under R.C. 2929.144(B)(2)] add half of the longest minimum term or definite term for the most serious felony being sentenced to arrive at the maximum term. Printke, 6th Dist. Lucas No. L-21-1233, 2022-Ohio-2981, at ¶ 11. After aggregating the consecutive prison terms imposed of 11 years for the first-degree felony and of eight years for the second-degree felony, or 19 years, the trial court then calculated the maximum, indefinite prison term for the most serious felony, the first-degree felony, by adding one-half of the 11-year prison term. Thus, the maximum, indefinite term for amended Count no. One is 24 and one-half years pursuant to R.C. 2929.144(B)(2). The trial court properly announced the 15. aggregate, consecutive sentence was an indefinite, maximum prison term between 19 and 24 and one-half years. {¶ 30} Therefore, we find no merit in appellant’s argument that the trial court failed to impose a minimum sentence under the statutory scheme. {¶ 31} The second issue raised by appellant in support of his third assignment of error is that the trial court erred in failing to make the requisite findings pursuant to R.C. 2929.144( C)(4)(a) before imposing consecutive sentences. {¶ 32} That section states: (4) If multiple prison terms are imposed on an offender for convictions of multiple offenses, the court may require the offender to serve the prison terms consecutively if the court finds that the consecutive service is necessary to protect the public from future crime or to punish the offender and that consecutive sentences are not disproportionate to the seriousness of the offender's conduct and to the danger the offender poses to the public, and if the court also finds any of the following: (a) The offender committed one or more of the multiple offenses while the offender was awaiting trial or sentencing, was under a sanction imposed pursuant to section 2929.16, 2929.17, or 2929.18 of the Revised Code, or was under post-release control for a prior offense. 16. (b) At least two of the multiple offenses were committed as part of one or more courses of conduct, and the harm caused by two or more of the multiple offenses so committed was so great or unusual that no single prison term for any of the offenses committed as part of any of the courses of conduct adequately reflects the seriousness of the offender’s conduct. (c) The offender’s history of criminal conduct demonstrates that consecutive sentences are necessary to protect the public from future crime by the offender. (Emphasis added.) {¶ 33} Thus, R.C. 2929.14(C)(4) requires that the trial court make three specific findings before imposing consecutive sentences, including: (1) that consecutive sentences are necessary to protect the public or to punish the offender; (2) that consecutive sentences are not disproportionate to the seriousness of the offender’s conduct and to the danger that the offender poses to the public; and (3) that R.C. 2929.14(C)(4)(a), (b), or (c) is applicable. State v. Beasley, 153 Ohio St.3d 497, 2018-Ohio-493, 108, N.E.3d 1028, ¶ 252. “[T]he trial court must make the requisite findings both at the sentencing hearing and in the sentencing entry.” (Emphasis sic.) Id. at ¶ 253. {¶ 34} Although a “word-for-word recitation of the language of the statute is not required,” a reviewing court must be able to discern that the trial court engaged in the correct analysis, and to determine that the record contains evidence to support the trial 17. court’s findings. State v. Bonnell, 140 Ohio St.3d 209, 2014-Ohio-3177, 16 N.E.3d 659, ¶ 29; State v. Johnson, 6th Dist., Sandusky No. S-20-033, 2021-Ohio-2254, ¶ 11-12 {¶ 35} In imposing appellant’s sentence, the trial court relevantly stated the following at sentencing: “First, it has to look at the need to protect the public from future crimes by this Defendant; then it has to look to punish the Defendant for his activity; then it as to look at deterring that Defendant from doing it again and deterring others in the community from doing that again or future crimes like that.” {¶ 36} The court further stated: Now, let’s look at your past record. You have adjudications for delinquency in Juvenile Court back in ’97 and ’98. 2001, disorderly conduct. 2001 assault. Victims listed there. You received community control sanctions for that offense. 2002, aggravated burglary. Victims listed there. You received community control sanctions for that. It was revoked and the prison sentence imposed. 2002, drug abuse 2004, complicity to commit trafficking in cocaine and preparation of cocaine for sale. You received a prison sentence for that. 2004, disorderly conduct. 18. 2008, disorderly conduct. 2011, intoxication. 2011, disorderly conduct. 2011, non-support. You received community sanctions for that and were terminated off of community sanctions, which is probation, unsuccessfully. 2013, drug abuse and drug paraphernalia and open container. 2014, trafficking in cocaine and possession of cocaine. You received a prison sentence for that. 2015, disorderly conduct. {¶ 37} The court then went on to list the numerous misdemeanor offenses for which appellant had been convicted. {¶ 38} It is obvious from the record that the trial court did engage in an analysis required pursuant to 2929.144(C)(4)(a) before imposing consecutive sentences. The court specifically considered whether consecutive sentences are necessary to protect the public or to punish the offender and (2) that consecutive sentences are not disproportionate to the seriousness of the offender's conduct and to the danger that the offender poses to the public. The court articulated the past felony convictions and failure of community control sanctions. The court further went on to consider the appellant’s 19. conduct in his immediate offenses. Specifically, the court noted the extent of the injuries that appellant inflicted upon this victim: The Court read through the numerous injuries; abrasions and contusions to the back of the neck, the head, the upper back, forearms, hands, arterial chest wall, right thigh, both legs; fracture of ribs 7 and 9 of the right posterior lateral aspect; right lung with a lobe contusion; fractures of the left distal ulna and right fourth phalange; extensive soft tissue swelling; intramuscular hemorrhages. The Court read through all that. * * * Was the Defendant’s relationship with the victim, did it facilitate the offense. No doubt. This man died as a result of what you did. That makes it more serious than not serious. {¶ 39} Thus, the court in fact specifically considered whether consecutive sentences are necessary to protect the public or to punish the offender and that consecutive sentences are not disproportionate to the seriousness of the offender’s conduct and to the danger that the offender poses to the public. {¶ 40} Thereafter, the court needed to find only one of the R.C. 2929.144(C)(4)(a) through (c) factors. It obviously considered the appellant’s course of conduct in the robbery and beating of the victim resulting in his death, as well as his history of criminal conduct. 20. {¶ 41} In summary, the record supports the statutory findings necessary to impose consecutive sentences in this case. {¶ 42} Furthermore, the judgment entry states, “This Court finds Consecutive sentences are applicable based upon factors in R.C. 2929.14 (C) (4)(a)-(c), et seq., or Defendant waived review of those factors by this Court pursuant to the Plea Agreement.” {¶ 43} Although the better course would have been for the trial court to have been more specific in its sentencing judgment entry to reflect the statements made at the sentencing hearing. Nevertheless, we find that the sentencing judgment entry reflects that the trial court did engage in an analysis required pursuant to R.C. 2929.144(C)(4)(a) before imposing consecutive sentences. {¶ 44} We therefore find appellant’s third assignment of error to be without merit. C. Ineffective Assistance of Counsel {¶ 45} In support of his second assignment of error, appellant argues the trial court erred in accepting his guilty pleas to involuntary manslaughter and robbery because of ineffective assistance by his trial counsel. Appellant argues his two guilty pleas were not made knowingly, intelligently, and voluntarily because he did not agree to consecutive sentences, yet his trial counsel stipulated that appellant will serve consecutive sentences. As a result, his trial counsel’s plea advice fell below legal standards because the stipulation relating to consecutive sentences was neither required by, nor warranted by, the facts. We disagree. 21. {¶ 46} An ineffective assistance of counsel claim must overcome the strong presumption that a properly licensed Ohio lawyer is competent. State v. Gondor, 112 Ohio St.3d 377, 2006-Ohio-6679, 860 N.E.2d 77, ¶ 62. Over the course of the trial court proceedings, appellant was represented by two trial counsel. Appellant failed to question the licensure of his trial counsel, so their competence is presumed. In fact, the trial court specifically asked appellant during the July 16 plea colloquy, “Are you satisfied with your attorney, both attorneys’ representation in this matter?” Appellant answered, “Yes.” {¶ 47} To overcome this presumption of competence, appellant had the burden to show: (1) deficient performance by his trial counsel below an objective standard of reasonable representation, and (2) a reasonable probability of prejudice that but for his trial counsel’s errors the outcome would have been different, i.e., he would have gone to trial on four felony counts and not have entered guilty pleas to one original felony, one reduced felony, and dismissal of the third and fourth original felonies. Strickland v. Washington, 466 U.S. 668, 687-688, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). “A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Id. at 694. In making a determination of ineffective assistance of counsel, a reviewing court considers the totality of the evidence before the judge or jury. Id. at 695. {¶ 48} Appellant’s two guilty pleas are admissions of committing the crimes charged against the defendant and consent to entry of judgment without a trial. Crim.R. 11(B)(1); State v. Griggs, 103 Ohio St.3d 85, 2004-Ohio-4415, 814 N.E.2d 51, ¶ 14. 22. Unless the defendant asserts his actual innocence when entering a plea of guilty, the defendant “is presumed to understand that he has completely admitted his guilt.” Id. at ¶ 19. {¶ 49} Appellant blames his guilty pleas on deficient consecutive sentencing advice from his trial counsel. A defendant entering a plea in a criminal case must do so knowingly, intelligently and voluntarily, and the failure of any one element renders enforcement of that plea unconstitutional. State v. Dangler, 162 Ohio St.3d 1, 2020- Ohio-2765, 164 N.E.3d 286, ¶ 10. The three-part inquiry on appeal is: “(1) has the trial court complied with the relevant provision of [Crim.R. 11(C)]? (2) if the court has not complied fully with [Crim.R. 11(C)], is the purported failure of a type that excuses a defendant from the burden of demonstrating prejudice? and (3) if a showing of prejudice is required, has the defendant met that burden?” Id. at ¶ 17. As discussed below we conclude the trial court complied with the first part of the three-part Dangler inquiry, compliance with Crim.R. 11(C)(2),1 and no further inquiry is required. {¶ 50} We will first address appellant’s argument that his trial counsel’s plea advice between the July 12 and July 16 hearings, when the Earley stipulation was added, deprived him of “the benefit of an allied offenses argument.” However, appellant’s trial 1 CrimR. 11(C)(1) does not apply because appellant was represented by counsel at the plea hearing. Crim.R. 11(C)(3) does not apply because appellant did not plead guilty to aggravated murder. Crim.R. 11(C)(4) does not apply because both of appellant’s guilty pleas were felony cases. 23. counsel only stipulated that consecutive sentences are possible as a matter of law, which did not prevent his trial counsel from also arguing that his two guilty pleas should merge into a single sentence between 7 and 10 years. {¶ 51} The issue of consecutive sentences arose at the July 12 plea hearing, when appellee stated on the record, without objection, the “possible sentence * * * maximum sentence would be 19 to 24 and a half years * * , if the Court was so inclined, that consecutive sentences would be appropriate or it’s within the rights of the Court to do that. In other words, it’s not barred by law.” {¶ 52} The consecutive sentencing stipulation was then raised during the July 16 plea hearing. The trial court announced, “It is also my understanding that as part of the negotiated plea agreement, that the parties agree and/or stipulate that the [sic] consecutive sentence may be imposed by the Court pursuant to Ohio Supreme Court case, State v. Earley, 145 Ohio St.3d 281.” The lack of consent to mandating consecutive sentences specifically arose later regarding appellant’s written plea agreement: Court: On page 3 of 5, counsel, under the recommended sentence, it says, number two: If the recommended sentence requires imposition of consecutive sentence, I agree to the imposition of a consecutive sentence, I agree to the imposition of that sentence, waive any statutory -- there’s no requirement, and I don’t think he’s waiving the review – Prosecutor: Correct. 24. Court: -- because there’s no agreed consecutive. I think the State’s arguing consecutive or maybe asserting that, and the victims maybe, but I don’t think there’s a recommendation of that, correct? Trial Counsel: Correct, Your Honor. Prosecutor: Right. Court: So I’m going to put N, slash, A for that one. Okay. At this point, Mr. Rogers, one last time. Before I accept your plea, do you have any questions of this Court at all, sir? A: No, sir. {¶ 53} The parties are free to present stipulations to the court, where a stipulation is a voluntary agreement concerning the disposition of a relevant point to a matter that obviates the need for proof of that point. State v. Martin, 6th Dist. Lucas No. L-01-1214, 2002 WL 597332, 2 (Apr. 19, 2002). However, the record shows appellant’s trial counsel did not stipulate either to consecutive sentences or, alternatively, to nonmerger of the offenses, and the stipulation is not a part of the trial court’s sentencing judgment entry. Even if appellant’s trial counsel had stipulated that Earley mandated the trial court to impose consecutive sentences, that stipulation did not prejudice appellant because a stipulation to a legal conclusion or what the law requires is not binding on the trial court. Ohio State Bar Assn. v. Pro-Net Financial, Inc., Slip Opinion No. 2022-Ohio-726, ¶ 26. 25. {¶ 54} We next turn to whether the trial court complied with Crim.R. 11(C)(2), which states: In felony cases the court may refuse to accept a plea of guilty or a plea of no contest, and shall not accept a plea of guilty * * * without first addressing the defendant personally and doing all of the following: (a) Determining that the defendant is making the plea voluntarily, with understanding of the nature of the charges and of the maximum penalty involved, and if applicable, that the defendant is not eligible for probation or for the imposition of community control sanctions at the sentencing hearing. (b) Informing the defendant of and determining that the defendant understands the effect of the plea of guilty * * *, and that the court, upon acceptance of the plea, may proceed with judgment and sentence. (c) Informing the defendant and determining that the defendant understands that by the plea the defendant is waiving the rights to jury trial, to confront witnesses against him or her, to have compulsory process for obtaining witnesses in the defendant’s favor, and to require the state to prove the defendant’s guilt beyond a reasonable doubt at a trial at which the defendant cannot be compelled to testify against himself or herself. 26. {¶ 55} At the July 16 plea hearing, the trial court conducted a lengthy plea colloquy with appellant to ascertain whether appellant offered the guilty pleas knowingly, voluntarily, and intelligently. I’m going to ask you some questions. They’re not designed to trick you or confuse you. They’re designed so you understand the ramifications of your plea and this Court can determine if that plea is knowingly, voluntarily, and intelligently given. If during these proceedings you don’t understand my questions or you’re confused, get your attorney’s attention or mine so we can make sure you understand what’s happening. {¶ 56} Appellant assented on the record. The trial court asked appellant, “You heard the plea agreement here today. Do you have any questions about that?” Appellant answered, “No.” The trial court then asked appellant, “Do you understand the nature of the charges you’re pleading guilty to?” Appellant answered, “Yes.” Later, the trial court asked appellant, “Has there been anything said off the record, outside of the Courtroom, about this plea agreement you think this Judge should know about?” Appellant answered, “No, sir.” The trial court asked appellant, “Did anyone promise you, offer you, or guarantee you anything in exchange for this plea?” Appellant answered, “No.” The trial court asked appellant, “Did anyone force you, coerce you, threaten you, or place you under duress in entering this plea?” Appellant answered, “No.” 27. {¶ 57} The record shows at the hearing the trial court also systematically reviewed the Crim.R. 11(C)(2) factors, including each right identified in Dangler and Crim.R. 11(C)(2)(c). After each explanation, the trial court asked appellant, “Do you understand that right?” Appellant answered, “Yes.” The trial court then asked appellant each time, “Do you want to give up that right?” and appellant answered, “Yes.” In addition to confirming that appellant’s trial counsel was not recommending consecutive sentences, the trial court specifically reviewed in detail the potential, indefinite sentence ranges under the Reagan Tokes Law resulting in an aggregate prison term of 19 to 24 and one- half years if consecutive sentences were ordered and asked appellant, “Questions on any of it?” Appellant answered, “No.” Finally, the trial court asked appellant, “Before I accept your plea, do you have any questions of this Court at all, sir?” Appellant answered, “No, sir.” {¶ 58} We do not find ineffective assistance by appellant’s trial counsel. Appellant’s Crim.R. 11(C) rights were addressed by the trial court, appellant was satisfied with the advice he received from his trial counsel, and appellant’s two guilty pleas were unrelated to his trial counsel’s stipulation to Earley or to any “mandatory” consecutive sentencing. {¶ 59} Appellant’s second assignment of error is not well-taken. 28. D. Constitutionality of R.C. 2967.271 {¶ 60} In support of his fourth assignment of error, appellant argues the trial court erred by denying his motion challenging the constitutionality of R.C. 2967.271, a part of the Reagan Tokes Law. Appellant argues R.C. 2967.271 violates both the Separation of Powers Doctrine and the Due Process Clause of the United States Constitution for two reasons: (1) the actual indefinite sentence he serves will depend on the executive branch determining, not the judicial branch, whether appellant “committed a violation of law”; and (2) his presumptive minimum sentence under R.C. 2967.271(B) is a liberty interest inadequately protected by R.C. 2967.271(C) and (D). We disagree. This court has recently addressed the constitutionality of the Reagan Tokes Law. In Stenson, rejecting the argument that the ODRC’s ability to rebut the presumptive minimum sentence violates the separation of powers doctrine, we found that like the discretionary system of parole and postrelease control controlled by the parole board and found constitutional, the ODRC has the ability to extend the minimum sentence of a defendant up to but not exceeding the maximum sentence that was imposed by the court. Next, we agreed that due process rights are implicated by the liberty interest created by the presumption that the offender serve the stated minimum prison term. However, we concluded that R.C. 2967.271 does not, on its face, violate the constitutional right to due process because even 29. though the specific procedures for the applicable “hearing” are not set forth in the law itself, the law may ultimately be applied in a manner that is not unconstitutional. (Citations omitted.) Printke, 6th Dist. Lucas No. L-21-1233, 2022-Ohio-2981, at ¶ 7. {¶ 61} We do not find clearly and convincingly appellant’s sentence is otherwise contrary to law. Appellant’s fourth assignment of error is well-taken, in part. III. Conclusion {¶ 62} On consideration whereof, the judgment of the Erie County Court of Common Pleas is affirmed. Appellant is ordered to pay the costs of this appeal pursuant to App.R. 24(A)(4). Judgment affirmed. A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4. 30. State of Ohio v. Ravon Q. Rogers E-21-027, E-21-031 Mark L. Pietrykowski, J. ____________________________ JUDGE Thomas J. Osowik, J. ____________________________ Christine E. Mayle, J. JUDGE CONCUR. ____________________________ JUDGE This decision is subject to further editing by the Supreme Court of Ohio’s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.supremecourt.ohio.gov/ROD/docs/. 31.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494157/	511 MEMORANDUM OPINION STACEY G.C. JERNIGAN, Bankruptcy Judge. I. INTRODUCTION Before this court is the Adversary Complaint Objecting to Discharge (the “Complaint”) brought by 8400 N.W. Expressway, LLC (the “Plaintiff’ or “8400 Expressway”) and Debtor’s Answer to Complaint Objecting to Discharge (the “Answer”) filed by Richard D. Morgan (the “Defendant,” “Mr. Morgan,” or the “Debtor”). This court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1384 and 157. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(J). This memorandum opinion constitutes the court’s findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052. Where appropriate, a finding of fact will be construed as a conclusion of law and vice versa. The Defendant filed his voluntary chapter 7 petition in bankruptcy on May 2, 2005, so the pre-BAPCPA1 Bankruptcy Code provisions apply. The Complaint was filed on August 11, 2005. Defendant filed his Answer on September 13, 2005. Trial of the matter commenced on September 18, 2006, and continued on September 19, 2006, September 20, 2006, September 25, 2006 and September 27, 2006. The court granted the parties’ requests to. submit various post-trial briefing, the last of which requests was granted in an Order Granting Leave to File Sur-Reply Brief, entered December 13, 2006. By the Complaint, the Plaintiff objected to granting of the Defendant’s global discharge pursuant to section 727(a)(2)(A) (debtor transferred, removed, destroyed, mutilated, or concealed property of the debtor within one year before the petition date with the intent to hinder, delay or defraud creditors or an officer of the estate charged with custody of property), section 727(a)(3) (debtor has, without adequate justification, concealed, destroyed, mutilated, falsified, or failed to keep and preserve financial records such that his financial condition or business transactions might be ascertained), and section 727(a)(4) (debtor knowingly and fraudulently made a false oath or account in or in connection with his bankruptcy case). By his Answer, the Defendant denied all such allegations. At a pretrial status conference, counsel for Plaintiff announced to the court that the Plaintiff would not pursue the cause of action under section 727(a)(4). So the court is left to address only the allegations in the Complaint relating to section 727(a)(2)(A) and section 727(a)(3). Before the court may address those causes of action, however, the court must first turn to certain procedural matters raised by the parties on the eve of trial. II. PROCEDURAL MATTERS A flurry of eleventh hour, and in some cases thirteenth hour, pleadings have placed several procedural issues before this court, of which the court must dispose before turning to the merits of the Complaint and Answer. Indeed, the resolution of these procedural matters determines whether, despite the five-day trial held by this court, the court can even consider the merits of the Complaint and Answer. Claim, Objection. First, on September 17, 2006, Defendant filed Debtor’s Objection to Proof of Claim No. 3 Filed by the Plaintiff, 8400 Expressway. The next day, on September 18, 2006, the first day of trial of this adversary proceeding, Defendant filed Debtor’s Supplement to Objection to Proof of Claim No. 3 Filed by 8400 512Expressway (together with the Debtor’s Objection to Proof of Claim No. 3 Filed by 8400 Expressway, the “Claim Objection”). Motion to Dismiss for Lack of Standing. Relatedly, on September 17, 2006, Defendant filed his Motion to Dismiss Adversary Proceeding Due to Lack of Standing by Plaintiff (the “Motion to Dismiss”). Defendant urged that Plaintiff was not a “creditor” with standing to pursue a discharge objection, pursuant to Section 727(c)(1). The arguments in this Motion overlap with the arguments urged in the Defendant’s Claim Objection. It appeared to the court that these pleadings were filed, at least in part, with the purpose to forestall trial on the merits of the adversary proceeding, which, at the time of trial, had been pending for over a year.2 Rather than delay trial, and because the court was highly doubtful that these pleadings presented a jurisdictional or other obstacle to the court going forward with trial,3 the court ordered that trial on the merits would proceed and that Plaintiff would be permitted an opportunity to respond in writing to the Claim Objection and the Motion to Dismiss. The court further instructed the parties that the court would hold a supplemental hearing on the Claim Objection and/or the Motion to Dismiss after all post-trial briefing had been filed, if the court deemed such a hearing necessary. The court does not find a hearing necessary. The court addresses these two procedural matters below. A. Plaintiff’s Alleged Claim Against Debtor. As a preliminary matter, the court will address the basis for Plaintiffs alleged claim against Mr. Morgan — then the Claim Objection and the Motion to Dismiss. Plaintiff timely filed a proof of claim in the above-referenced case on December 30, 2005, which was designated as Claim No. 3 in the Bankruptcy Clerk’s Claims Register. In Proof of Claim No. 3, Plaintiff asserts a general unsecured claim 513against Debtor in the total amount of $2,854,012.82, based upon: (1) A judgment dated July 16, 2004, obtained by ORIX Real Estate Equities, Inc. (“ORIX”), in a matter styled ORIX Real Estate Equities, Inc. v. Bordeaux III, L.L.C., et al., Case No. CJ-2003-9945, pending in the District Comí: of Oklahoma County, which judgment declared Bordeaux III, L.L.C. (“Bordeaux”) and Mr. Morgan to be in default under a certain promissory note and guaranty, respectively, and to be jointly and severally liable for the indebtedness thereunder in the amount of $7,175,253.92, plus post-judgment interest; the judgment also ordered the liens of ORIX upon certain real property securing the indebtedness to be foreclosed and the real property sold (the “OK Foreclosure Judgment”). (2) A subsequent deficiency judgment dated October 15, 2004, issued by the same Oklahoma court, after the foreclosure sale of the real property mentioned above, which judgment awarded to 8400 Expressway a deficiency judgment against Bordeaux III (but not also against Mr. Morgan) in the amount of $2,717,752.82, plus post-judgment interest (the “OK Deficiency Judgment”). The OK Deficiency Judgment also found “that in connection with the sale of the [real estate], ORIX has assigned all its interest under its judgments herein, its bid, and the note, mortgage and instruments executed in connection therewith, including but not limited to the Guaranty of Richard D. Morgan, to 8400 N.W. Expressway, L.L.C.” (3) An order dated February 10, 2005, issued by the District Court of Collin County, Texas, 416th Judicial District (the “Texas State Court Order”), domesticating to the State of Texas the OK Deficiency Judgment, finding that such judgment is entitled to full faith and credit in Texas pursuant to the Uniform Enforcement of Foreign Judgments Act and TEX. CIV. PRAC. & REM. CODE § 35.01 et seq. Notably, the Texas State Court Order also provided that 8400 Expressway “has a judgment against [Bordeaux III] and Richard D. Morgan for $2,717,752.82 plus post-judgment interest accruing as of October 15, 2004” (emphasis added), even though the OK Deficiency Judgment, by its terms (and in contrast to the OK Foreclosure Judgment), only recites a judgment against Bordeaux III. Additionally, the court notes that the Debtor scheduled Plaintiff on his Bankruptcy Schedule F, “Creditors Holding Unsecured Nonpriority Claims,” as having a claim of $3,000,000.00. The claim is described as “guaranty of Bordeaux III debt subject to setoff,” and is listed as disputed. B. Debtor’s Eve-of-Trial Claim Objection. In his Claim Objection filed on the eve of trial, the Debtor makes three basic arguments against allowance of the Plaintiffs Proof of Claim: (i) There is nothing in the documentation attached to the proof of claim (the OK Foreclosure Judgment, the OK Deficiency Judgment, and the Texas State Court Order) that identifies the Plaintiff as the true claimant, (ii) While the OK Foreclosure Judgment granted judgment against Bordeaux III and Mr. Morgan, the OK Deficiency Judgment was obtained against Bordeaux III only and not Mr. Morgan. Mr. Morgan asserts that the OK Deficiency Judgment replaces and supersedes the OK Foreclosure Judgment, (iii) The loan from ORIX to Bordeaux III was, from its inception, intended by the parties to be a non-recourse debt as to Mr. Morgan, and Mr. Morgan was to have no personal liability on the debt except in certain limited circumstances in which Bordeaux III or Mr. Morgan engaged in certain bad acts. 514The Plaintiff filed a Response to Debt- or’s Claim Objection on October 17, 2006. In its Response, Plaintiff sets forth four grounds upon which this court should overrule the Claim Objection: (a) The Defendant, as a chapter 7 debtor case, lacks standing to object to Plaintiffs claim, (b) The Defendant’s challenge to the substance of Plaintiffs claim is barred by the Rooker-Feldman Doctrine, (c) The Defendant’s challenge to Plaintiffs claim is barred by the Federal full faith and credit statute, (d) The Defendant has misapplied Oklahoma state law with regard to the OK Foreclosure Judgment and the OK Deficiency Judgment. C. Debtor’s Motion to Dismiss for Lack of Standing. As part and parcel to the Claim Objection, the Debtor filed a similarly themed Motion to Dismiss the discharge adversary proceeding due to the Plaintiffs alleged lack of standing. In short, the Debtor suggests that there is a genuine issue as to whether the Plaintiff should properly be viewed as a “creditor” in the Debtor’s case. If Plaintiff is not, then it would necessarily lack standing to object to the Debtor’s discharge. Only the “trustee, a creditor, or the United States trustee may object to the granting of a discharge under subsection (a) of [section 727] of the Bankruptcy Code.” 11 U.S.C. § 727(c)(1). The Defendant asserts that because the OK Deficiency Judgment awards to the Plaintiff a deficiency judgment in the amount of $2,717,752.82 against Bordeaux III only, and makes no such award of a deficiency judgment against Mr. Morgan, the Plaintiff does not have standing under section 727(c)(1) to object to the granting of a discharge because Plaintiff possesses no claim and, therefore, is not a creditor. The Defendant asserts that the OK Deficiency Judgment replaces and supersedes the OK Foreclosure Judgment such that Plaintiff now has only a judgment against Bordeaux III. 1. With Regard to Plaintiff’s Standing (or Lack Thereof), Pursuant to Section 727(c)(1), What is the Sig-niñcance of the Plaintiff having Filed a Proof of Claim That Has Not Been Conclusively Disallowed? Clearly, Mr. Morgan disputes the Plaintiffs claim. The claim is listed as disputed in the Debtor’s schedules. And Mr. Morgan lodged an objection to Plaintiffs claim, at the eleventh hour. However, none of this disputedness changes the fact that 8400 Expressway has a “claim” for Bankruptcy Code purposes, which qualifies 8400 Expressway as a “creditor” with standing to object to the Debtor’s discharge. The Fifth Circuit has already articulated the test for determining standing in this context, in the case of Stanley v. Vahlsing (In re Vahlsing), 829 F.2d 565, 567 (5th Cir.1987). In the Vahlsing case, the debtor filed Chapter 7 bankruptcy and listed his sister in his bankruptcy schedules as an unsecured creditor. The debtor’s description of his sister’s claim stated: “Claim for damages resulting from alleged failure to properly manage the estate of [their deceased father]. The claim is unliquidated and disputed.” Under the column for “Amount of Claim,” the debtor listed “unknown.” The sister never filed a proof of claim in the bankruptcy case. However, she did file a Section 727 complaint objecting to discharge, asserting that the debtor failed to provide adequate records from which to determine his financial status. In the complaint, the sister also asserted that she had a claim “reasonably believed to be in excess of $7,000,000” re515lated to the debtor’s alleged mismanagement of their deceased father’s estate. Later during the bankruptcy case, the bankruptcy court granted a motion to lift stay to allow the sister to prosecute her claim against the debtor in a surrogate court in New Jersey. There was an evi-dentiary trial in the New Jersey surrogate court that lasted several months. Ultimately, the trial judge in that matter dismissed the sister’s claim entirely, finding that the debtor had acted in good faith in managing their deceased father’s estate. The sister did not appeal the judgment disallowing her claim in full. Later, in the trial on the sister’s objection to discharge, the debtor urged that the complaint should be dismissed because his sister was not a creditor and, thus, lacked standing to object to his discharge. His standing argument did not prevail at the bankruptcy court or on appeal to the district court. On appeal to the Fifth Circuit, the Fifth Circuit reversed and remanded, finding that the sister lacked standing to prosecute her suit at the time of trial. The Fifth Circuit reasoned that, although a debtor’s listing of a party as a creditor in his schedules does constitute prima facie evidence of a party’s interest in the case, and although “a party who has not yet proved its claim has the right to oppose discharge [citations omitted], a party whose claim has been conclusively disproved cannot object to a debtor’s discharge. Only those claims that will be affected by the discharge can file objections.” Id. at 567 (emphasis added). On the other hand, the Fifth Circuit opined, “A discharge would affect the interests of creditors with disputed claims since they have a chance of prevailing on their claims.” Id. The court elaborated that, “When ... a would-be creditor’s only claim has been finally dismissed, a discharge will not even potentially affect her interests” and thus she has no standing to prosecute a discharge objection. Id. Thus, according to the Fifth Circuit, standing in a discharge action all boils down to whether there is still a chance of the alleged creditor having an allowed claim; if there is still a chance, then the party has standing under Section 727(c)(1). If, on the other hand, the alleged creditor’s “claim” has been finally adjudicated and disallowed, then it has no standing to prosecute a discharge objection. See also Andrews v. Cadleway Props., Inc. (In re Andrews), 239 F.3d 708 (5th Cir.2001) (in determining that a party had standing as a “creditor” to oppose certain bankruptcy compromises, court noted that “broadest possible definition” of claim is used in the Bankruptcy Code, and even parties with contingent, remote or undetermined rights to payment are to be regarded as creditors until a court finally determines otherwise). 2. Case Law is Fairly Uniform in Holding that Having a Disputed Claim Does Not Preclude a Creditor from Objecting to Discharge. The Fifth Circuit does not stand alone on this issue. Case law is unambiguous that a dispute with regard to a creditor’s claim does not divest it of standing to pursue a discharge objection. In re Korte, 262 B.R. 464, 470-71 (8th Cir. BAP 2001) (upon the debtor’s suggestion that the IRS lacked standing to bring an adversary proceeding objecting to entry of the debtor’s discharge, court determined that the IRS did hold a claim qualifying it to be “a ‘creditor’ under [section] 727(c)(1),” even where the debtor disputed that he owed any tax); In re Holstein, 299 B.R. 211, 224-25 (Bankr.N.D.Ill.2003) (the bankruptcy court examined at length the standing issue under section 727, declining to examine the merits of a creditor’s claim in order to find standing; the debtor had hotly contested the creditor’s claim, but the court observed that “[s]ince the holder of a 516disputed claim is a ‘creditor,’ ... the creditor has standing to seek denial of the debtor’s discharge notwithstanding the dispute”); In re Hermanson, 273 B.R. 538, 545 (Bankr.N.D.Ill.2002) (finding that an argument that, because a creditor’s debt was listed in the debtor’s schedules as disputed .the creditor had no standing, was without merit); Geisler v. Pansegrau (In re Pansegrau), 180 B.R. 468, 476 (Bankr. N.D.Tex.1995) (finding that a creditor who had obtained a take-nothing judgment on his claim in state court such that all of his claims against the debtors were barred by res judicata did not have standing to pursue a section 727 cause of action because he was not a creditor). In summary, Mr. Morgan’s late maneuver before trial, in filing the Claim Objection, does not deprive 8400 Expressway of standing to prosecute the discharge objection. Mr. Morgan has only deprived 8400 Expressway of its “deemed allowed” claim. 11 U.S.C. § 502(a); Fed. R. Bankr.P. 3001(f). Plaintiff will have the opportunity to litigate the validity of its claim in the contested matter to which the Claim Objection gives rise.4 But, “a party who has not yet proved its claim has the right to oppose discharge.” Vahlsing, 829 F.2d at 567. For these reasons, this court denies the Motion to Dismiss. D. Returning to the Claim Objection. For the reasons stated in the previous section, the pending Claim Objection does not defeat 8400 Expressway’s standing to prosecute the discharge objection. Moreover, the court does not believe it is necessary or appropriate to adjudicate the eleventh-hour Claim Objection prior to ruling in this discharge adversary proceeding. The parties may request a setting on the Claim Objection and the court will address it in due course. E. One Last Procedural Matter: The Motion to Intervene ORIX filed a Motion to Intervene in this adversary proceeding on September 27, 5172006, requesting permission to intervene in the discharge action “in the event the Court determines, as Defendant alleged, that the assignment to Plaintiff 8400 N.W. Expressway, L.L.C. (‘Plaintiff) as set forth in the Judgment ... was ineffective and caused Plaintiff to not be a creditor.... In the event that the Court concludes that Plaintiff lacks standing to bring this adversary proceeding because it was not an assignee of ORIX with respect to the Judgment, then ORIX requests that it be allowed to intervene in the action against the Defendant. Otherwise ORIX requests that this Motion be considered moot or withdrawn.” Motion to Intervene [Docket Entry # 57], p. 2. By way of background, one of the numerous arguments that the Debtor made in the Claim Objection and the Motion to Dismiss for Lack of Standing was that there has never been any proof presented of the assignment by ORIX to 8400 Expressway of the claims ORIX had against Bordeaux III and Mr. Morgan pursuant to the OK Foreclosure Judgment, the OK Deficiency Judgment and the Texas State Court Judgment (and the loan documents supporting same). This court does not believe it is necessary to make any finding at this time regarding the existence or validity of the assignment. Proof of the assignment is an issue that may be litigated in connection with the Claim Objection. However, at this juncture, there is a proof of claim on file in the name of Plaintiff, 8400 Expressway, in which it swears that it holds a $2,854,012.82 claim against the Debtor. As previously mentioned, this proof of claim, initially, was prima facie evidence of the claim of 8400 Expressway. 11 U.S.C. § 502(a); Fed. R. Bankr.Pro. 3001(f). The Debtor has objected to the claim, disputing many elements of it, including whether there has been a valid assignment from ORIX to 8400 Expressway. Plaintiff will have the opportunity to litigate the validity of the assignment and other aspects of the claim in connection with the Claim Objection. But, “a party who has not yet proved its claim has the right to oppose discharge.” Vahlsing, 829 F.2d at 567. In summary, 8400 Expressway is to be considered a “creditor,” as defined in the Bankruptcy Code, with standing to prosecute the Section 727 action. The fact that there is a dispute with regard to its assignment from ORIX is irrelevant for purposes of its ability to proceed at this time in the discharge adversary proceeding. Since the court believes there is no need to make a finding at this time with regard to the validity of the assignment (and the court is making no such finding), the Motion to Intervene is denied as moot. III. OBJECTION TO THE DISCHARGE Finally, the court will reach the merits of this dispute. A. Summary of Factual Allegations and Court’s Conclusions. As described in detail below, the Debtor has been actively engaged in real estate acquisition, development and related business activities for many years. At trial, a tremendous amount of complex evidence was submitted over five days regarding the Debtor’s prior real estate transactions, dating back to approximately 1989, including the Debtor’s involvement with various single-asset real estate projects through certain limited liability companies and partnerships. The picture that Plaintiff tried to paint throughout its presentation was: (1) with regard to the Debtor’s business transactions, the Debtor, through the creation of an intricate web of entities holding real estate interests and borrowing money, has concealed or transferred his 518property with intent to thwart creditors; and (2) with regard to the Debtor’s family, Debtor, through a premarital agreement and transactions with his wife and family trusts, has concealed, transferred or otherwise put out-of-reach nonexempt property with intent to thwart creditors. Additionally, the Plaintiff also attempted to establish that the Debtor, without any justification, has destroyed, concealed or otherwise obfuscated information pertaining to his historic real estate dealings in a manner that rises to the level of failing to keep financial records from which the Debtor’s “financial condition or business transactions might be ascertained.” With regard to the business transactions, the fact that the Debtor happened to transact significant real estate acquisitions, developments, borrowings and consulting arrangements, over many years, in separate legal entities, is certainly not inherently sinister or suggestive of an intent to thwart creditors. There were certain transactions described at trial and discussed later herein (e.g., the various Gainesville Mall transactions and TacCo Debt Consolidation) that may, if separately challenged, prove to be avoidable, as constructively fraudulent, pursuant to Section 544 or 548 of the Bankruptcy Code. There was certainly some smoke there, and possibly fire. However, Plaintiff has failed to show, by a preponderance of the evidence, that Debtor had any actual intent to hinder, delay, or defraud with respect to such transactions, as required by Section 727(a)(2). Additionally, with regard to the Debtor’s transactions involving his family, although there may have been ownership or transfers of property in or to Mrs. Morgan and family trusts in the months and years preceding the bankruptcy filing (some of which transfers may even be avoidable as constructive fraudulent transfers under Sections 544 or 548; again, some smoke and possibly some fire), Plaintiff has likewise failed to show by a preponderance of the evidence that Debtor made transfers with the requisite intent to hinder, delay, or defraud creditors that is required by Section 727(a)(2). In all situations, the Debtor has given reasons for transactions that seemed credible and not designed to thwart creditors or in the nature of impermissible pre-bankruptcy planning. Moreover, many of these transactions were relatively insignificant — which, in the court’s mind, bears upon the issue of intent and whether the Debtor was really concerned about creditors when engaging in them. Finally, the court has concluded that the Plaintiff has failed to “connect the dots” in a way that establishes that there was either a failure to keep records that was not justified under all the circumstances, or that was relevant to the Debtor’s financial condition or business transactions. Any records not produced or preserved by the Debtor pertained to separate defunct entities, not to the Debtor, and the assets of such entities were long ago foreclosed upon. The court will address the evidence pertaining to the Debtor’s various business and family transactions below and then apply Section 727(a)(2) and (3) accordingly. B. The Debtor’s Personal/Family Situation. The Debtor is married to Maria Blackburn Morgan, who is not a debtor in bankruptcy. He is 67, she is 51, and they married in 1994. Between the two of them, they have eight children: Mr. Morgan has six and Mrs. Morgan has two. At the time of trial, Mr. Morgan’s 16-year-old son lived with the Morgans, and the Morgans were assisting one of her children and one of his children with college tuition and expenses. 519Prior to his marriage to Maria Morgan, and more than 10 years before he filed his Chapter 7 bankruptcy case, Debtor and Mrs. Morgan entered into an Agreement in Contemplation of Marriage (the “Marital Agreement,” Defendant’s Exh. 9), dated October 21, 1994. The Marital Agreement was filed of public record in the office of the County Clerk of Dallas County, Texas, on November 4, 1994, at Document No. 94215-02627 through 02369. The Marital Agreement provided, among other things, that any property that was acquired by Mrs. Morgan after the date of the agreement and her marriage to Debtor would be owned by her as separate property and not as community property. The Marital Agreement also described certain separate property that Mrs. Morgan owned before her marriage to Debtor and provided that such property would retain its separate character. The Marital Agreement also provided that jointly held property acquired by Debtor and Mrs. Morgan during marriage would be owned by them as joint property with the right of survivorship. Mrs. Morgan came to the marriage with significant assets of her own. For example, she owned a house on Holly Tree Drive in Dallas, Texas, in which the couple currently resides, which she received in her divorce from her former husband, Mr. Blackburn.5 Mrs. Morgan also received approximately $65,000 of profit sharing and individual retirement accounts in her divorce settlement, which she kept invested in a separate account, until taking funds out in 2001 and 2002, when Mr. and Mrs. Morgan fell into financial trouble and needed to dip into these funds to support their life expenses. These funds were purposefully segregated during the Morgans’ marriage and Mr. Morgan never asserted an interest in them. Mr. Morgan testified6 that there were two and no other purposes for the Marital Agreement: (1) at the time of entering into it, he was under an IRS lien for approximately $200,000 for shadow income from Southmark Corporation, his former employer, and he wanted to protect Mrs. Morgan from that, and (2) he wanted to create a way that would allow Mrs. Morgan to create some wealth of her own. The Plaintiff seems to believe there is something inherently suspect in the marital arrangements. But the court does not view it this way. Rather, it is clear that this is a blended family, a later-in-life-marriage for both husband and wife, and each spouse wanted to provide for their children equitably. No doubt, too, that each spouse sought to protect themselves in the unhappy event of another divorce. C. The Debtor’s Real Estate Business Endeavors. Prior to 1989, the Debtor was employed as President of the Retail Division of the now-defunct Southmark Corporation (itself a former debtor in the Bankruptcy Court for the Northern District of Texas). Then, from approximately 1989 to 2001 or 2002, the Debtor was self-employed, and conducted business through an entity known as Tara Group, Inc. (“Tara Group”), which he 100% owned, indirectly through other companies later identified herein. Through the Debtor’s Tara Group companies, the Debtor controlled millions of dollars of assets. 520In particular, during the period from 1994 through approximately 2001, Debtor was actively involved in the acquisition, development, and management of several real estate projects, primarily commercial shopping centers, through essentially single-asset, single-purpose companies. The largest and most significant real estate projects in which the Debtor was involved were highly leveraged commercial projects in Ohio (ie., “Lordstown” and “261, LP”), Rhode Island (ie., “Warwick”), Florida (ie., “Volusia”), and Oklahoma (ie., “Bordeaux III”). Specifically, the Debtor would form separate companies and borrow funds from non-institutional lenders (“Equity Lenders”), such as American Realty Trust, Inc. (“ART”), NLP Equity Lending I, Ltd. (“NLP”), National Operating, LP (“NOLP”), One RealCo Corporation (“RealCo”), Basic Capital Management (“Basic”), Regis Properties (“Regis”), and American Realty Investors, Inc. (“ARI”),7 which funds were either invested in a particular company for the owner’s “equity” for a real estate project, in order to qualify for project financing from acquisition and development lenders, or the Equity Lender funds were used to pay certain operating, development, or other expenses incurred by the single-asset companies after their acquisitions of real estate. The Debtor was directly obligated on or personally guaranteed loans from the Equity Lenders, as well as on numerous acquisition and development loans related to his many separate single asset real estate companies. D. The Eventual Decline of Debtor’s Real Estate Business. Debtor’s real estate activities substantially declined in 2001 after two significant transactions failed to close. Of even greater impact, during the period from 1999 through 2003, most of the real estate projects that were owned by the Debtor’s companies were either foreclosed, conveyed to lenders in lieu of foreclosure, or sold to pay loans associated with such projects and, thus, the various companies that had held the real estate were defunct. Bordeaux III, the project to which Plaintiffs alleged claims relate, was the last project to go into foreclosure. As previously mentioned, Debtor had personally guaranteed most of the acquisition and development debt associated with these projects and he, therefore, incurred significant liability on account of the projects and any loan deficiencies remaining after foreclosure, deeds-in-lieu conveyances, or sales of those projects. In addition, Debtor remained liable on the balances due on the “equity” loans obtained from the Equity Lenders. Debtor listed aggregate debts approximating $37 Million on his bankruptcy Schedules on account of the various loans on which he was liable. The failure of Debtor’s real estate projects and other business interests materially reduced Debtor’s personal income. Debtor and his wife reported total income of $255,237 on their 2001 federal tax return. However, they reported only $129,661 as total income on their 2002 federal income tax return, $58,266 of which was reported as income from the liquidation of their individual retirement accounts and pensions. The testimony at trial revealed that during the time frame between 2002 and 2003, the Morgans were in such financial straits that Mrs. Morgan 521obtained a part-time job at a retail clothing store, The Gap. See Defendant’s Exhibit 2, the Morgans’ 2003 tax return. As a result of the loss of most of the Debtor’s real estate investments, in late 2001 or early 2002, Debtor closed his office, terminated the employment of his assistant, and stored most of his various companies’ books and records in a rental storage unit. E.The Debtor’s Schedules and Statement of Financial Affairs. The Debtor appears to have quite candidly disclosed in his Schedules his stock and other equity interests in the various corporations, partnerships or joint ventures through which he has owned and/or operated real estate (collectively, the “Scheduled Entities”) as follows: (a) Morgan/Blackburn Family Leasing, LLC, d/b/a Real Estate Problem Solvers (“Family Leasing”); (b) Warwick Summit Square, Inc. (“Warwick”); (c) Gainesville Real Estate, LLC (“GRE”); (d) Tara Group, Inc. (“Tara Group”); (e) Tara Management, Inc. (“Tara Management”); (f) Lordstown, LP (“Lordstown”); (g) 261, LP; (h) Blue Tees Beverages, Inc.; (i) DL Associates I, Inc.; (j) Tara Summit Square, Inc.; (k) Bordeaux Investments, Inc.; (I) Bordeaux Investment One, Inc.; (m) Crocket Trace, LLC; (n) Bordeaux Investment Two, LLC; (o) Bordeaux III, LLC; and (p) Volusia, LP. All entities except Family Leasing show a “$0” value, and Family Leasing shows a $20,000 value.8 F. The CabelTel (a.k.a. Greenbriar) New Endeavor. In September 2003, Debtor started a new endeavor, when he and his Tara Management, Inc. began providing employee and consulting services, respectively, to Greenbriar Corporation (“Greenbriar”), now known as CabelTel International Corp. (“CabelTel”) (hereinafter this entity will sometimes be referred to as “Greenbr-iar/CabelTel”). Debtor is currently (or at least at the time of trial was) still employed with Greenbriar/CabelTel. Greenbriar/CabelTel is a publicly held corporation whose principal office is in Farmers Branch, Texas. Greenbriar/CabelTel is engaged in a number of different businesses, including the ownership and management of the Gainesville Mall in Gaines-ville, Cooke County, Texas. In fact, the evidence was that Debtor’s employment with Greenbriar/CabelTel arose directly from his efforts in locating and closing the acquisition of this Gainesville Mall, which is described in greater detail below. The evidence showed that the Debtor’s personal earnings from his employment by Greenbriar/CabelTel are currently deposited directly into a Family Leasing bank account each month. G. Alleged Transfers Implicating Section 727(a)(2) 1. Transactions (1) Involving the Approximately Jpl.7-Acre Gainesville, Texas Outlet Mall (“Gainesville Mall”) and the Surrounding Approximately 82 Acres of Land (“Gainesville Land”); and/or (2) 522Implicating TacCo Financial, Inc. (“Tac-Co”). Between July 31, 2003 and the May 2, 2005 Petition Date, a complex series of transactions took place involving an outlet shopping mall and surrounding land in Gainesville, Texas, and also involving: (a) Greenbriar/CabelTel, the Debtor’s current employer, and, in some cases, (b) TacCo, an entity that bought approximately $15 million of the Equity Lender debt against the Debtor, and happens to be the single, largest shareholder of Greenbriar/Cabel-Tel.9 It is significant to the court that both Greenbriar/CabelTel and TacCo are “friendly” to the Debtor.10 While, perhaps, technically not “insiders” of the Debtor, as defined in Section 101(31) of the Bankruptcy Code, Greenbriar/CabelTel and TacCo are significantly influenced, if not controlled, by Gene Phillips, with whom the Debtor has been friendly since the days that they were both instrumental figures at Southmark Corporation. (a) The Gainesville Mall and Land Transaction, as Originally Contemplated. On July 31, 2003, the Debtor’s wholly owned direct subsidiary Tara Group, through which the Debtor had conducted his real estate business for many years after leaving Southmark Corporation, and which had been largely wound down by this point in time, as a result of foreclosures and other losses of most of the real property owned by its numerous subsidiaries, entered into a Real Estate Sale Agreement, as purchaser, with Gainesville Factory Shops Limited Partnership, as seller, for Tara Group to purchase 124.27 acres of property situated in Gainesville, Texas that, in the aggregate, constituted the Gainesville Mall (approximately 41.7 acres) and Gainesville Land (approximately 82 acres). Plaintiffs Exh. 138. There was no evidence to suggest that Gainesville Factory Shops Limited Partnership, the original seller, was an insider or related in any way to the Debtor, CabelTel/Greenbriar, Tac-Co, nor to any of the other cast of characters in this adversary proceeding. The contemplated purchase price for the aggregate property was $6,400,000, subject to certain adjustments and prorations. Thus, the Gainesville Mall and Land transaction, as originally drafted, was contemplated to be a deal in which the Debtor’s wholly owned corporation Tara Group would be the owner of the Gainesville Mall and Gainesville Land. After some hard times, Tara Group would be up and running again in the real estate business. (b) Enter GOM (Greenbriar/CabelTel’s Subsidiary) onto the Scene, as the Ultimate Purchaser of the Gainesville Mall and the Gainesville Land: Aggregate Acres. On August 10, 2003, a mere 10 days after execution of the original Gainesville Mall and Land contract, and before the Debtor started his employment/consulting relationship with Greenbr-iar/CabelTel, Tara Group, as Seller, and GOM (Greenbriar/CabelTel’s wholly owned subsidiary), as Purchaser, entered into a Real Estate Sale Agreement for the conveyance of the Gainesville Mall and Gainesville Land to GOM for a purchase price of $6,719,600. Plaintiffs Exh. 69. Tara Group had not closed on the Gaines-ville property yet, when it entered into this agreement with GOM, but merely represented it was under contract to purchase it. Thus, from the document trail, it would appear as though Tara Group was going to 523purchase the Gainesville Mall and Gaines-ville Land and flip it to GOM for a quick $319,999 profit. However, the evidence reflects that in September 2003, the Debtor started his employment and consulting relationship with Greenbriar/CabelTel. And the further evidence reflects that, despite this August 10, 2003 document between Tara Group and GOM, Tara Group subsequently assigned, on December 10, 2003, its full interest, as purchaser under the original contract, to GOM. Thus, GOM (not Tara Group) subsequently closed under the original Gainesville Mall and Land contract and, thus, GOM acquired directly from Gainesville Factory Shops Limited Partnership the Gainesville Mall and Gainesville Land, by deed dated December 11, 2003. Plaintiffs Exhs. 68 & 75. As further explanation for how it was that GOM, and not Tara Group, ended up acquiring the Gainesville Mall and Land, the Debtor testified that, although he had initially attempted to acquire the Gaines-ville Mall through Tara Group, he was unable to complete the transaction due to his lack of financial resources and financing at this time (this is certainly plausible given what the Debtor’s financial situation had come to look like by 2003). The Debt- or then arranged for Greenbriar/CabelTel (through its subsidiary GOM) to acquire the property, and he supervised the closing of the acquisition by GOM. As a result of those efforts, Debtor received (i) 170,000 warrants for shares of Greenbriar/Cabel-Tel’s common stock, (ii) options to acquire 40,000 shares of Greenbriar/CabelTel’s common stock, (iii) employment with Greenbriar/CabelTel, and (iv) a consulting arrangement for his Tara Management, Inc. Debtor also received, as a result of his efforts, (v) 200,130 shares of Greenbr-iar/CabelTel’s common stock (Plaintiffs Exh. 63), ownership of which was either conveyed to Warwick or Warwick’s subsidiary, GRE — the evidence was inconsistent, but it is probably irrelevant since the Debtor had control of both11 — and, as further explained below, (vi) the right to receive approximately 42 acres of the surrounding Gainesville Land.12 There is no evidence in the record regarding what sort of equity Tara Group might have had in the Gainesville Mall and Land, had it been the one to acquire it (presumably not much, since Debtor had little liquidity at this point in time to contribute equity). There is also no evidence as to what the exact value was of the Greenbriar/CabelTel warrants, options, common stock, and the 42 acres of Gaines-ville Land, and the employment/consulting 524arrangements13 that the Debtor received in lieu of the entire Gainesville Mall and Land. (c) GOM’s Subsequent Conveyance of the Gainesville Mall (41.7 acres) to an Entity Controlled by the Debtor Called Gainesville Property, LP. Eight months after GOM’s closing on the acquisition of the Gainesville Mall and the surrounding Gainesville Land, by a deed dated August 11, 2004, GOM conveyed the 41.7 acres of land constituting the Gainesville Mall to an entity called Gainesville Property, LP. Plaintiffs Exh. 76. The consideration recited for the transfer was $10. Thus, Gainesville Property, LP, which, testimony indicated, is a single purpose entity created to own the mall in connection with Greenbriar/CabelTel’s refinancing of the mall in August 2004, became the new owner of the mall. Who is Gainesville Property, LP? It is a limited partnership, governed by an Agreement of Limited Partnership dated July 13, 2004 (Plaintiffs Exh. 42) in which Gainesville Partners, LLC signed as the 2% general partner (signatory was the Debtor), GRE signed as a 49% limited partner (signatory was the Debtor), and GOM signed as a 49% limited partner (signatory was a Gene Bertcher; the court notes that GOM contributed most of the original capital for this entity, according to the partnership agreement). And who is Gainesville Partners, LLC, the 2% general partner of Gainesville Property, LP? It is a limited liability company governed by an LLC Operating Agreement dated July 13, 2004 (Plaintiffs Exh. 43) which indicates that the sole member was GRE. In summary, it appears that, as of August 11, 2004, pursuant to a refinancing undertaken by Greenbriar/CabelTel, the 41.7-acre Gainesville Mall was contributed to an entity essentially controlled by the Debtor and 51% owned by entities owned/controlled by the Debtor. (d) TacCo Debt Consolidation. A couple of weeks later, on September 1, 2004, the Debtor and certain of his now-mostly-defunct businesses — Warwick; Lordstown; Volusia, LP; Bordeaux Investments Two, LLC; and Partners Capital, Ltd. (collectively, the “Business Borrowers”) — entered into a Consolidation and Modification Agreement (the “TacCo Consolidation Agreement”) with TacCo. As mentioned previously, TacCo is perhaps technically not an “insider” of the Debtor, as defined in Section 101(31) of the Bankruptcy Code, but was/is apparently friendly with the Debtor. As previously indicated, Gene Phillips is associated with TacCo (and Gene Phillips is associated with Greenbr-iar/CabelTel). As earlier indicated, the Debtor and Gene Phillips go back a long way with one another — having ties at least as far back as Southmark Corporation. In any event, it seems that TacCo bought up a significant amount of the indebtedness held by the Equity Lenders 14 against the Debtor and against the Debtor’s defunct real estate entities. The TacCo Consolidation Agreement recited that: (i) Bordeaux Investments was indebted to NOLP on a promissory note dated January 7, 1997, in the original principal amount of $2,725,000, the current balance of which was $2,663,915; (ii) Lordstown was indebted to ART on a promissory note dated March 19, 1999, in the original principal amount of $2,000,000, the current balance of which was $4,183,620; (iii) Warwick was indebted to NLP on a promissory note dated May 8, 5251998, in the original principal amount of $836,000, the current balance of which was $1,865,600; (iv) Volusia was indebted to ARI on a promissory note dated August 20, 2001, in the original principal amount of $200,000, the current balance of which was $134,884; (v) the Debtor was indebted to Basic for $1,629,918 as of October 25, 2001; (vi) Partners Capital was indebted to American Reserve Life Insurance Company on a promissory note dated August 20, 2000, in the original principal amount of $1,000,000, the current balance of which was $673,420; and (vii) the Debtor was indebted to RealCo on a promissory note dated September 27, 2001, in the original principal amount of $67,184, the current balance of which was $396,171. The Tac-Co Consolidation Agreement recited that TacCo was the current owner and holder of all such debts and all security therefore.15 Under the TacCo Consolidation Agreement, the Debtor and the Business Borrowers agreed to consolidate all such debts and signed a “Replacement Promissory Note” payable to TacCo in the principal amount of $15,000,000 (the “Consolidated Note”).16 Under the TacCo Consolidation Agreement, Debtor pledged his interests in the Greenbriar/CabelTel stock options and warrants as security for such loans. GRE (which, recall, was owned by Warwick — and the stock of Warwick was already pledged to TacCo by reason of Tac-Co’s acquisition of the NLP loan), pledged, as security for the consolidated loan, its interests in the Greenbriar/CabelTel stock and granted TacCo a deed of trust lien on the 42 acres of Gainesville Land GRE received. (e) GOM’s Conveyance of 2.307 Acres of the Surrounding Gainesville Land to an Entity Called Gainesville Hospitality. With regard to the approximately 42 acres of Gainesville Land that the Debtor (through GRE) was to receive, for his efforts in bringing the Gainesville deal to CabelTel/Greenbriar, it appears that it took several months for GOM to actually deed the land over to GRE — it is not clear from the evidence why, except the evidence was that there was a refinancing of the Gainesville property in August 2004, at which point in time GOM owned the Gainesville Land free and clear of any liens, so the court presumes that it was only at this point that GOM was free to honor its bargain with the Debtor, that he would get 42 acres of the surrounding Gainesville Land, and execute deeds. However, before deeds were executed for the benefit of GRE, GOM conveyed 2.307 acres of the Gainesville Land, for the benefit of GRE, to an entity called Gainesville Hospitality, by deed dated August 25, 2004. Plaintiffs Exh. 36 & 77. The consideration recited for the transfer was $257,333.55. There was no evidence to suggest that Gainesville Hospitality was an insider or related in any way to the Debt- or, nor to GOM, CabelTel/Greenbriar, Tac-Co, nor to any of the other east of characters in this adversary proceeding. GOM agreed to pay all the net proceeds from the sale (apparently $213,000) to GRE. However, TacCo intervened and demanded that the Debtor have the proceeds from the sale, that otherwise would have gone to GRE, transferred to TacCo, to pay down a Warwick loan held by TacCo; consequently the Debtor instructed the title company to transfer $213,000 of proceeds that GRE was due to receive to TacCo. Note that 526GRE was not liable on any indebtedness to TaeCo. However, Warwick was, and Warwick is, the parent of GRE. Thus, it would appear that TacCo, which, at the time, held significant indebtedness against the Debtor and Warwick, which indebtedness was in default, was seizing upon an opportunity to collect on an asset that was coming into the indirect possession of the Debtor and Warwick (ie., cash that was coming into the possession of a subsidiary of Warwick). (f) GOM’s Subsequent Conveyance of Part of the Surrounding Gainesville Land to GRE. GOM finally conveyed 1.686 acres of the 42 acres of the Gainesville Land to which Debtor was entitled to GRE, by an amended deed dated September 17, 2004. Plaintiffs Exh. 71. The consideration recited for the transfer was $10. GOM subsequently conveyed another 17.163 acres of the Gainesville Land to GRE, by deed dated October 27, 2004. Plaintiffs Exh. 72. The consideration recited for the transfer was $10. GOM subsequently conveyed another 21.162 acres of the surrounding Gainesville Land to GRE, by an amended deed dated October 27, 2004. Plaintiffs Exhs. 73 & 74. The consideration recited for the transfer was $10. Thus, GRE, as of late October 2004, had approximately 40 acres of the surrounding Gainesville Land (ie., 1.686 acres plus 17.163 acres plus 21.162 acres). (g) REI Conveyance (ie., Conveyance from GRE to a Subsidiary of Cabel-Tel/Greenbriar of GRE’s Control!Owner - ship in Gainesville Mall) for Ambiguous Reasons and Consideration. Recall that by a deed dated August 11, 2004, GOM conveyed the 41.7 acres of land constituting the Gainesville Mall to an entity called Gainesville Property, LP, that Debtor (through GRE) 51% owned. As it turns out, roughly three months later, this status quo changed. Real Estate Investors, LLC (“REI”) is a subsidiary of Greenbriar/Ca-belTel, which is, of course, the Debtor’s employer. On November 1, 2004, the Debtor’s indirect subsidiary, GRE, entered into a Sale Agreement with REI, pursuant to which GRE conveyed to REI its 49% limited partnership interest in Gainesville Property, LP and 100% of its membership interest in Gainesville Partners, LLC (the later of which, as set forth earlier, is the general partner and 2% owner of Gaines-ville Property, LP). Plaintiffs Exh. 41. Thus, control and the 51% majority ownership of the Gainesville Mall that had gone indirectly to the Debtor (i.e., to GRE) from GOM (Greenbriar/CabelTel’s wholly owned subsidiary) in August 2004, went right back to the Debtor’s employer (i.e., an entity it controls-REI) a mere three months later. Why? The reason is somewhat ambiguous. The REI Sale Agreement recited that Greenbriar “loaned sums to [GRE] to purchase certain real estate assets” and that GRE “desired to convey its interest in the entities owning such real estate” to Greenbriar “in satisfaction of such loan.” Plaintiffs Exh. 41. Plaintiff takes the position that there was no loan made by Greenbriar to GRE. There appears to be no evidence in the record of the “loaned sums” mentioned. The Debtor has testified that he does not know much about what this transaction was all about and that he signed “whatever was sent.” He testified that he believed there was a letter agreement regarding this transaction, but he did not have a copy of it. The wording of this Sale Agreement (Plaintiffs Exh. 41) suggests (albeit not with great clarity) that Greenbriar extended credit to GRE to purchase its indirect 51% interest in the Gainesville Mall and now, in discharge or satisfaction of this credit, Greenbriar was taking the Gainesville Mall back. It is not farfetched to believe Mr. Morgan told the truth — -in saying he did not know much about the details of this 527transaction — since it is certainly apparent from the overall record in this case that real properties and lending obligations went from entity-to-entity-to-entity (presumably for all sorts of tax, liability, financing, and other business reasons) and so it does not strain credibility to believe that Mr. Morgan was fuzzy on the details or motivation for this particular transaction.17 (h) GRE’s Subsequent Conveyance of 6.0 Acres of its 10 Acres of Gainesville Land to Thomasville Investments. On the same day as the REI Conveyance, GRE conveyed 6.0 acres of the approximately 40 acres of Gainesville Land it owned to Thomasville Investments, by deed dated November 1, 2004. Plaintiffs Exh. 78. The consideration recited for the transfer was $10. The Debtor testified that this land was donated for purposes of a theater. (i) GRE’s Subsequent Conveyance of 32 Acres of the Gainesville Land to TacCo. Next, GRE subsequently conveyed 32 acres of the Gainesville Land (consisting of the 17.163 acre parcel plus the 21.162 parcel, less the 6 acres transferred to Thom-asville) to TacCo (in the so-called “TacCo Conveyance”), by deed dated December 14, 2004. Plaintiffs Exh. 79. More specifically, the Debtor and GRE enter into an agreement with TacCo on December 14, 2005, wherein they conveyed Greenbr-iar/CabelTel common stock owned by GRE, the Greenbriar/CabelTel warrants and options owned by the Debtor, and 32 acres of GRE’s Gainesville Land to TacCo in exchange for a $3,283,900 credit against the indebtedness owed to TacCo under the consolidated note ($2,497,307 of this credit was associated with the land conveyed and $730,474.50 of this credit was associated with the Greenbriar common stock conveyed). Debtor has testified that he does not know what the land and stock were actually worth, but says it had to be done because TacCo called the notes and was taking the position that whatever the Debtor made or had must go to TacCo.18 (j)GRE’s Remaining 1.686 Acres of Gainesville Land. There is a mystery with regard to the title trail on the remaining 1.686 acres of Gainesville Land that GRE acquired from GOM by an amended deed dated September 17, 2004. Plaintiffs Exh. 71. By deed dated September 16, 2005 (postpetition), TacCo conveyed this land to CBOCS (“Cracker Barrel”). Plaintiffs Exh. 80 & 86. The testimony at trial indicated that the purchase price paid by Cracker Barrel was $393,000. However, there is no evidence of any deed of this particular land parcel from GRE to TacCo and Debtor does not have any explanation for how and when GRE conveyed this land to TacCo (it was not conveyed along with the 32 acres mentioned above). This court must analyze whether the above complex transactions, singly or in the aggregate, constituted the transferring or concealing of property of the Debt- or, with an intent on the part of Mr. Morgan to hinder, delay, or defraud a creditor. 11 U.S.C. § 727(a)(2). It seems apparent that value flew both on and off the Debtor’s balance sheet within a year of the filing of his bankruptcy case. Most significantly, value was eroded in connection with: (i) the September 1, 2004 TacCo Consolidation Agreement when the Debt- or’s and GRE’s assets were pledged to TacCo; (ii) the Gainesville Hospitality sale 528when $213,000 of sale proceeds that would have gone to GRE instead went to TacCo; (iii) the November 2004 REI Conveyance, in which the Debtor’s 51% indirect interest in the Gainesville Mall was returned back to the Greenbriar/CabelTel enterprise; (iv) the 6.0 acres of land that GRE donated to Thomasville for the theater in November 2004; (v) the December 2004 TacCo Conveyance (pursuant to which 32 acres of land and the Greenbriar/CabelTel common stock were conveyed from GRE to TacCo as a pay down on the TacCo debt); and (vi) in connection with the 1.686 acres of land (for which there is no document trail from GRE to TacCo) which was conveyed by TacCo to Cracker Barrel postpetition for $393,000. Clearly, it appears as though there are grounds for asserting chapter 5 causes of action here against certain parties. While the chapter 5 causes of action are not, in every situation, crystal clear (for example, in the case of transfers of property of GRE, as opposed to transfers of property of the Debtor), as previously stated, clearly value was flying off the Debtor’s balance sheet — in some cases directly and in other cases indirectly (such as when the Debtor’s indirect subsidiary, GRE, lost assets/value). However, transfers are one thing, and the Debtor’s intent is quite another thing.19 In re Pratt, 411 F.3d 561, 565 (5th Cir.2005). “The intent to defraud must be actual, not constructive.” Id. This court does not believe that there was an intent on the part of the Debtor to defraud creditors in the above series of complex transactions. The court believes that Greenbr-iar/CabelTel and TacCo, in particular, were most definitely out to protect their own interests (although they may have been perceived as “friendly” with the Debtor). TacCo appears to have grabbed whatever it could, whenever it could, to satisfy its acquired, consolidated claims against the Debtor. The court believed the Debtor when he said that TacCo was taking the position that whatever the Debtor made or had must go to TacCo. TacCo was owed $15 million. Clearly, the record reflects that this was the path Tac-Co was taking. But the court believes that the Debtor wanted the Gainesville project for himself, and it was only because he could not do it alone, that he went to friendly parties, Greenbriar/CabelTel, to find a way to make the project happen. The parties negotiated a mutually beneficial arrangement for Mr. Morgan to get a good income, plus a share of the upside (through the stock, warrants, and options) and even a share of the property. But ultimately, TacCo would not let the Debtor get too much, because TacCo was owed too much. The court finds no fraudulent intent on the part of the Debtor with regard to these transactions. TacCo’s collection efforts, on the other hand, may not pass muster under a constructive fraudulent transfer analysis — if such an analysis is ever presented. In summary, the Gainesville property and TacCo transactions outlined above do not demonstrate, by a preponderance of the evidence, intent on the part of the Debtor to transfer or conceal assets. 2. Personal Transactions Alleged to be Fraudulent. Between November 2002 and the May 2, 2005 Petition Date, certain transactions involving the Debtor’s personal and family affairs took place that Plaintiff believes implicate Section 727(a)(2). 529(a) The Lake House. On June 7, 2000, the Debtor and Mrs. Morgan (before the decline in Mr. Morgan’s real estate business), purchased a five bedroom lake house in Henderson County, Texas (the “Lake House”). Plaintiffs Exh. 10. The court takes judicial notice that the Lake House is valued at $366,000 on the Debtor’s Schedules filed in the bankruptcy case, with $301,786 of secured indebtedness against it; thus, there appears to be about $65,000 of equity potentially for the estate (if the Lake House were found to be property of the estate). However, on November 6, 2002 (approximately two and one-half years before the Debtor’s bankruptcy filing), the Debtor transferred his interest in the Lake House to Mrs. Morgan by a Quitclaim Deed filed almost immediately in the public records of Henderson County, Texas on December 4, 2002. Plaintiffs Exh. 11. The Plaintiff argues that, although this transfer was outside of the one-year time frame contemplated by Section 727(a)(2), that the doctrine of “continuing concealment” should be applied by the court here, since the Debtor continued to have use of the property within one year of the bankruptcy filing.20 The Debt- or candidly admits he did not receive a cash payment or other direct consideration from Mrs. Morgan at the time of the transfer. The Debtor also candidly admits that, up to and during the bankruptcy, he had continued use and enjoyment of the Lake House. (b) Family Leasing. Family Leasing is an entity that, from its formation in 2000, was owned 99% by the Debtor and Maria Morgan (collectively, as husband and wife), and 1% by Tara Group. Then, on September 30, 2004, within a year of his petition date, the Debtor transferred, and caused Tara Group to transfer, all of their membership interests in Family Leasing to Maria Morgan for $1.00. As a result of that transfer, Maria Morgan became the sole member and owner of Family Leasing. When the transfers occurred, it appears that Family Leasing was worth nothing or almost nothing. At the time of such transfers, the only assets owned by Family Leasing were beneficial interests in two trusts (the Tarrant County Land Trust and the Tarrant County Land Trust II, created July 20, 2004), each of which had been formed to acquire houses in Tarrant County, Texas, from owners who had been unable to sell their houses for an amount in excess of their mortgage debt. The way this business was structured to work was as follows: a land trust would be formed to acquire a house, the consideration for which would be for the trust to agree to pay the mortgage debt against the property. The land trusts did not assume the mortgage indebtedness. Each land trust then leased the house to a tenant at a monthly rental approximating the amount of the monthly mortgage payment. The lease granted the tenant an option to purchase the property during a specified period at an option price that declined as monthly rentals were paid. Neither Mr. Morgan, his wife, Family Leasing, nor the land trusts contributed or expended any funds to acquire the houses. The value of each of the two houses owned in September 2004 was equal to or less than the debt against such house, as evidenced by the former owner’s inability to sell such •property for an amount in excess of the mortgage debt and such former owner’s willingness to enter into the described transaction with the land trust. In any event, not only did the Debtor list Family Leasing on his Schedule B as an asset in which he had a community interest,21 as if 530the transfer in September 2004 had not even occurred, but he listed the value at $27,000 on his Schedule B.22 (c) Bank Accounts. The Debtor is a co-trustee of the Morgan .Family Trust (the “Family Trust”). The Debtor and Maria Morgan established the Family Trust on December 22, 2003. The names on three (3) of the Debtor’s bank accounts were changed to be in the name of the Family Trust in the months prior to the Petition Date. The names on Chase Bank bank account number 087-0261-0889 were changed from the Debtor and Maria Morgan to the Family Trust beginning with the statement dated February 19, 2004. Similarly, the names on Northern Trust bank account numbers 1080456 and 2052314 were changed from the Debtor and Maria Morgan to the Family Trust beginning with statements dated February 17, 2004, and March 31, 2004, respectively. (d) Ski-Doos. Title to certain water craft known as “Ski-Doos” was apparently transferred to the Family Trust five weeks before the Petition Date. The Debtor asserts that those transfers were not made with any actual intent to hinder, delay, or defraud any creditor. In any event, the Debtor has listed this property in his Schedule B as “community property” (valued at $2,500 each, for a total of $5,000) so, it appears to the court, that the Debtor is not pursuing a position that these SkiDoos were transferred out of the reach of creditors. (e)Warwick — Allegations of Commingling of its Funds with Those of Debtor. The Plaintiff complains that the Debtor was using one of the bank accounts of one of its entities, Warwick, for personal use. The evidence was that Warwick opened a checking account at Southwest Bank on March 20, 2003. The Debtor produced checking account records for this account (these checking account records are the only records Debtor has for Warwick). The Plaintiff complains that there are lots of large deposits and withdrawals for which the Debtor does not have a lot of 531explanation or records. The evidence was that the Debtor did write some checks from the Warwick account to Maria Morgan to pay household bills. The Debtor paid for a roof on the house on Holly Tree Drive with a check from the Warwick account. The Warwick bank account statements reveal transfers from that account totaling $206,457.40 to Maria Morgan between August 2003 and April 2005. However, the evidence also was that from September 2003, the Debtor deposited into the Warwick account the consulting fees paid by Greenbriar/CabelTel to Tara Management under the Tara Management Consulting Agreement. (Tara Management does not have its own bank account.) The fees were first deposited into Warwick account then paid to Maria Morgan. With regard to the personal/family transactions outlined above, the court turns again to the language of Section 727(a)(2), and the cases interpreting it. “The court shall grant the debtor a discharge, unless the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed property of the debtor, within one year before the date of the filing of the petition.” 11 U.S.C. § 727(a)(2)(A). In order to establish that a debtor’s general discharge should be denied pursuant to section 727(a)(2)(A), the moving creditor must show (1) a transfer or concealment of property; (2) belonging to the debtor; (3) within one year of the filing of the petition; and (4) with intent to hinder, delay or defraud a creditor or officer of the estate. In re Pratt, 411 F.3d 561, 565 (5th Cir. 2005). “The intent to defraud must be actual, not constructive.” Id. But actual intent may be inferred from the actions of the debtor and may be proved by circumstantial evidence. Id. The Fifth Circuit has set forth factors that may show actual intent to defraud: (i) inadequate consideration; (ii) the family, friendship or close association between the parties; (iii) the retention of possession, benefit or use of the property in question; (iv) the financial condition of the party sought to be charged both before and after the transaction in question; (v) the existence or cumulative effect of the pattern or series of transactions or course of conduct after incurring of debt, onset of financial difficulties, or pendency or threat of suits by creditors; and (vi) the general chronology of the events and transactions under inquiry. In re Pratt, 411 F.3d at 565 (citing Pavy v. Chastant (In re Chastant), 873 F.2d 89 (5th Cir.1989)); In re Dennis, 330 F.3d 696, 702 (5th Cir.2003). “Moreover, a presumption of fraudulent intent [attaches] when a debtor transfers property to relatives.” In re Pratt, 411 F.3d at 565-66. “[0]nce this presumption attaches, the burden shifts to the debtor” to show that there was no fraudulent intent. Id. at 566. Since the transactions above involve transfers to family members or family entities/trusts at a time when the Debtor was in financial distress, this court concludes that a presumption of fraudulent intent has arisen that shifts the burden to Mr. Morgan to show there was, in fact, no fraudulent intent with regard to the transactions. First, with regard to the Lake House, the analysis is slightly more complicated than the analysis with regard to the other transactions, because it occurred more than one year before the bankruptcy. The Plaintiff relies on the Fifth Circuit case of Olivier to argue for denial of discharge pursuant to section 727(a)(2)(A). 532Thibodeaux v. Olivier (In re Olivier), 819 F.2d 550 (5th Cir.1987). In the Olivier case, the debtors’ son was in an automobile accident in 1978 in a car owned by the debtors in which another individual was severely injured. Id. at 551. Two days after the accident, the debtors transferred record title of their house for $15,000 cash to the debtor-husband’s mother. Id. The debtors apparently returned the $15,000 a few days later. Id. The debtors continued to live in the house, maintained the house, paid insurance on the house, and did not pay rent on the house. Id. In 1979, judgment was entered against debtor-husband in a personal injury suit arising from the son’s accident in an amount in excess of $100,000. Id. The debtors’ liability insur-. anee paid $5,000. The debtors filed bankruptcy in 1985. Id. In Olivier, the debtors’ discharge was denied by the bankruptcy court, pursuant to Section 727(a)(2), and the decision was affirmed through the Fifth Circuit. The reason for the denial of discharge was that, although the transfer of the house occurred more than one year prior to the petition date, the debtors continued to use and benefit from the property and such continued use and benefit constituted continued concealment of a secretly retained interest in the property. In re Olivier, 819 F.2d at 555. Moreover, regarding intent, the debtors admitted that the reason they transferred the property was to protect the property from an eventual lawsuit. Id. at 552 n. 2. In fact, the debtor-husband testified that there was no other reason for the transfer. Id. The Fifth Circuit noted that “those who transfer property with [an intent to hinder, delay, or defraud creditors] may be reluctant to disclose their motivation,” and, therefore “the intent to frustrate creditors can be inferred from conduct.” Id. at 552. Retention of the use of the transferred property is a strong indication of fraudulent intent. Id. However, such indication is not conclusive. For instance, where the debtor assigned his mortgages to his mother, without consideration, eighteen months before filing bankruptcy, and with her agreement to hold the funds for his use and benefit, in absence of evidence to the contrary, such transfer could not be treated as concealment because the transfer was made in repayment of a loan to the debtor from his mother. In re Stookey, 60 F.2d 972 (W.D.N.Y.1932) (cited in footnote 6 of the Olivier opinion). “[M]erely continuing to live on the property is insufficient to prove a secret interest.” In re Hooper, 274 B.R. 210, 216 (Bankr.D.S.C.2001). “To meet the burden of proving a secret interest by a preponderance of the evidence, [the objecting creditor] must show something more than [the debtor] continuing to live on the real property.” Id. at 217. The Plaintiff urges that the Olivier case necessitates that this court find that the continuing concealment doctrine applies to the Lake House because, after the transfer of his interest to Mrs. Morgan in 2002, Mr. Morgan still enjoyed the use of the Lake House. But the Olivier case and the other authority cited above, in fact, suggest that continuing use is not conclusive. Here, there are facts not present in Olivier that override the presumption of fraudulent intent and continuing concealment. Mr. Morgan testified in a way that overcame the presumption of fraudulent intent. He testified that the transfer of the Lake House was done for the following reasons. First, for repayment of a postnuptial debt he owed to his wife — namely for $65,000 of her separate property she expended in support of the couple. Mr. Morgan testified that, at the time of the transfer, Mrs. Morgan had taken considerable money out 533of her pre-marriage funds to keep them going during them hard financial times and that, in return, he gave her his equity interest in the house. While there was no documentation submitted to unequivocally establish that Mrs. Morgan spent her separate property to support the family, there was evidence that, during that time frame between 2002 and 2003, the Morgans were in such financial straits that Mrs. Morgan obtained part time employment at The Gap. See Defendant’s Exh. 2, the Morgans’ 2003 tax return. The Morgans’ 2002 tax return, Defendant’s Exh. 3, also reflects that the Morgans took out $39,254 in IRA distributions. The Morgans’ wages, salaries, and tips dipped from $220,200 in 2001 (see Defendant’s Exh. 4, the Morgans’ 2001 tax return) to $74,300 in 2002 (see Defendant’s Exh. 3). Money to support the family had to come from somewhere and, despite a lack of a clear paper trail, this court finds credible Mr. Morgan’s testimony (supported by the tax returns) that, indeed, at least one of those places was Mrs. Morgan’s separate property (ie., IRA distributions and her wages from The Gap). A second reason given by Debtor for why the Lake House was transferred to Mrs. Morgan was so that she could refinance the property (because his credit was in shambles following the meltdown of his businesses) to obtain funds to (a) pay a short-term $17,000 loan from South West Bank that had been extended approximately eight months earlier, the proceeds of which were used to satisfy and obtain the release of a Henderson County judgment entered against Debtor and his spouse in favor of the property’s prior owners in a lawsuit arising on account of a dock built by the prior owners, (b) pay real estate taxes that were assessed against the property, and (c) allow Debtor and his spouse to obtain additional funds for living expenses. This court believes Mr. Morgan’s testimony and so finds that Mr. Morgan transferred his interest in the Lake House in 2002 to his wife in repayment for her use of her separate property to support the family during their difficult financial condition in 2002. Mr. Morgan’s use and enjoyment of the Lake House owned by his wife was no different than his use and enjoyment of the Holly Tree Drive residence owned by Maria Morgan as her separate property since the inception of their marriage in 1994. Next, with regard to Family Leasing, Mr. Morgan, once again, testified in a way that overcame the presumption of fraudulent intent. The Debtor testified that he conveyed his interests to Maria Morgan for $1.00 because it was “worth nothing,” and because there were no assets there. The evidence supports this statement — the amount of value in Family Leasing is/was trivial compared to the millions of dollars involved in this controversy (diminishing the notion of intent to defraud). The Debtor also testified that he conveyed Family Leasing to Maria Morgan because Mrs. Morgan wanted to start a business of her own and create her own income. The purpose for the Family Leasing business was also to create an earning history for Mrs. Morgan for the purposes of her obtaining future eligibility for Social Security, Medicare and Medicaid. In any event, the court notes that the Debtor scheduled Family Leasing as an entity in which he has an interest in Schedule B — as though not regarded as transferred by the Debtor. Next, with regard to the bank accounts, the Debtor asserts that the name changes on the bank accounts were made on the advice of Debtor’s estate planning attorney in conjunction with the Debtor’s execution of a new will on December 22, 2003. The 534name changes on the bank accounts were made for the purpose of enabling the bank accounts to pass to Debtor’s wife, who is approximately 15 years younger than Debtor, upon his death without subjecting such accounts to the burdens and uncertainties of probate proceedings. This is a perfectly reasonable explanation for the name changes. However, a much simpler reason keeps the bank account names changes from being grounds upon which to deny the Debtor discharge: the name changes and the transfers occurred over one year prior to Mr. Morgan’s petition date of May 2, 2005, and the Plaintiff has failed to show that any funds in those accounts remained in those accounts up to the time of bankruptcy so that a continuing concealment type argument clearly does not apply to those transfers. Next, with regard to the “Ski-Doos,” the court likewise concludes that they were not transferred with the intent to hinder, delay or defraud creditors such that the transfer does not form the basis for denial of the Debtor’s discharge pursuant to section 727(a)(2). The amounts were not only trivial in comparison to the millions of dollars involved in this overall controversy (diminishing the notion of intent to defraud) but the Ski Doos are listed in the Debtor’s schedules as though not regarded as transferred by the Debtor. Finally, with regard to the Warwick bank account, usage of it for personal expenses might suggest a reason to treat the Warwick account as an asset of the Debt- or. But the Debtor has produced all bank account records for it, and the records do not suggest anything other than the Greenbriar/CabelTel consulting fees were perhaps deposited into Warwick’s account (rather than an account perhaps more appropriately in the name of Tara Management or Family Leasing), and then Mrs. Morgan used the funds to pay household expenses. There is no evidence that there were transfers out of the Warwick account with fraudulent intent. II. Debtor’s Alleged Failure to Keep or Preserve Records from Which His Financial Condition or Business Transactions Might be Ascertained. Section 727(a)(3) of the Bankruptcy Code provides that “[t]he court shall grant the debtor a discharge, unless the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor’s financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case.” 11 U.S.C. § 727(a)(3). “In order to state a prima facie case under [section] 727(a)(3), the party objecting to discharge bears the initial burden to prove (1) that the debtors failed to keep and preserve their financial records and (2) that this failure prevented the party from ascertaining the debtors’ financial condition.” “Though a debtor’s financial records need not contain ‘full detail,’ ‘there should be written evidence’ of the debtor’s financial condition.” Martin Marietta Materials Southwest, Inc. v. Lee (In re Lee), 309 B.R. 468, 477 (Bankr.W.D.Tex.2004) (Clark, J.) (citing Robertson v. Dennis (In re Dennis), 330 F.3d 696 (5th Cir.2003); Goff v. Russell Co. (In re Goff), 495 F.2d 199 (5th Cir.1974)). If the plaintiff meets its burden to make that prima facie case, the burden shifts to the debtor to show that the failure to keep adequate records was justified under all of the circumstances. Id. The bankruptcy court has wide discretion in determining the sufficiency of the records kept and preserved by the debtor. Robertson v. Dennis (In re Dennis), 330 F.3d 696, 703 (5th Cir.2003). 535The purpose of section 727(a)(3) is to give creditors and the bankruptcy court complete and accurate information concerning the status of the debtor’s affairs and to test the completeness of the disclosure requisite to a discharge. [Internal citation omitted.] The statute also ensures that the trustee and creditors are supplied with dependable information on which they can rely in tracing the debtor’s financial history. Creditors are not required to risk having the debt- or withhold or conceal asset ‘under cover of a chaotic or incomplete set of books or records.’ Meridian Bank v. Alten, 958 F.2d 1226, 1230 (3rd Cir.1992) (citing In re Cox, 904 F.2d 1399 (9th Cir.1990)). It is undisputed that sometime in 2002 (approximately three years before filing bankruptcy; also prior to the Plaintiffs loan finally maturing or the litigation associated with Plaintiffs claims being commenced; also, indisputably after the foreclosures of the properties owned by the bulk of Debtor’s companies had taken place), Mr. Morgan destroyed a large number of documents pertaining to some of his real estate business entities, which he had been keeping in a rented storage facility after closure of his business office space. Mr. Morgan candidly explained at trial that he had moved his personal office space twice and had kept three filing cabinets full of documents concerning various single asset real estate entities in this storage facility, thinking he might need them in the future. After the various properties owned by the myriad entities in which Mr. Morgan had an interest had been foreclosed upon, however, Mr. Morgan ultimately saw no need to continue to keep the documents so, with an eye simply toward saving money, he cleared the storage unit and destroyed the documents. Plaintiff complains that the Debtor did not keep and preserve documents relating to Mr. Morgan’s various real estate businesses. The Debtor scheduled and listed in his Statement of Financial Affairs 32 entities in which he had an interest. Plaintiff has, one-by-one, complained about such things as the Debtor not producing loan documents and tax returns for certain of these entities — most or all of which entities have been defunct several years. Mr. Morgan testified that, when he received the Plaintiffs document request in connection with this adversary proceeding, he went to a box at his home where he had been storing certain documents relating to unresolved disputes, then also went to the filing cabinets in a storage room at Greenbriar/CabelTel and pulled documents he thought were relevant and gave them to his counsel to tender to counsel for the Plaintiff. He testified that his wife also produced a box. Mr. Morgan asserts that he sent to the Plaintiff everything that he had and emphatically denies that he destroyed or concealed documents from his files so that the Plaintiff and its counsel could not get a look at them. The evidence further revealed that Debtor produced to Plaintiff at least 12 boxes of documents and records relating to his financial affairs and business transactions, including Debtor’s personal federal income tax returns for the years 1994 through 2004, Debtor’s bank account statements, and Debtor’s credit card statements and receipts. Such records also included the closing binders for the transactions relating to the TacCo debt consolidation and debt reduction, which are also among Plaintiffs trial exhibits, although the Plaintiff complains that the Mr. Morgan did not produce all documents regarding the Tac-Co debt, which is the single largest debt owed by the Debtor. As mentioned, the records that are the subject of Plaintiffs complaint are, by and 536large, records pertaining to Debtor’s companies, which are separate legal entities, and are not the Debtor’s personal records. Moreover, most of the business records that are the subject of Plaintiffs complaint were records relating to activities and transactions that occurred several years prior to the filing of Debtor’s bankruptcy case. Debtor’s companies were not actively engaged in business activities after 2001 and therefore had few records to keep or maintain. To the extent Debtor did not possess all of the records relating to his companies’ business transactions, such records were not intentionally lost, destroyed, or mutilated by Debtor with the intent or purpose of concealing his financial condition and business transactions from creditors or his bankruptcy trustee. Rather, such records were not maintained or kept because (a) Debtor moved his office several times during the period from 2000 through 2005 and many records were lost or destroyed in the process of moving, (b) Debtor discontinued the storage unit in 2002 due to the cost of maintaining such unit and many records were destroyed, and (c) many of the financial records were maintained on a computer server to which the Debtor no longer has access. To the extent Plaintiff complains that Debtor did not keep records relating to GRE’s transactions regarding the Gainesville Mall acquisition, such records (a) were records of the Debtor’s company and not Debtor’s personal records, and (b) were available to Plaintiff because they were possessed by Debtor’s employer, Greenbriar/CabelTel. While it is true that a debtor’s creditors are entitled to examine not just his own personal records, but those of his businesses — especially when those businesses are closely held — to require that a debtor keep such records indefinitely is onerous. Mr. Morgan’s businesses ceased operation in 2001, falling victim to a series of foreclosures and other ill fortune that has left Mr. Morgan saddled with many millions of dollars in guaranty debt for several years. He filed bankruptcy in mid-2005. And he testified that he did, in fact, hold the records for a period of time but, in 2002, he destroyed them after the properties had been foreclosed upon, seeing no practical need to keep documents relating to failed businesses any longer and seeking to save himself and his family money. This is not a case of a debtor destroying records in contemplation of bankruptcy to frustrate creditors. This Debtor, in winding down his business life (arguably for the last time, since Mr. Morgan was, at the time, and is, now, of retirement age) three years prior to the filing of a bankruptcy petition, destroyed documents relating to dead business enterprises. Destruction of business records by a defunct business is neither unusual nor shocking, and the timing of the disposal of the records does not lend itself to a presumption of a sinister motive. Mr. Morgan turned over bank accounts, tax returns, and 12 boxes of whatever other records he had in his possession at the time of bankruptcy. This court cannot find, therefore, that this Debtor failed to keep and maintain financial records within the contemplation of section 727(a)(3), just because he failed to maintain indefinitely records of businesses that had closed down several years prior to bankruptcy. Plaintiff fails to show that Debtor’s personal financial condition or personal business transactions might have been better ascertained from these records. The court notes that the documentary evidence in this matter has been quite voluminous without the “missing” records of remote entities. Accordingly, this court will not deny Mr. Morgan’s discharge pursuant to section 727(a)(3). 537 IV. CONCLUSION Based upon the foregoing, Plaintiffs objections to Mr. Morgan’s discharge are OVERRULED in their entirety. A separate judgment will be entered for the Defendant in this matter. . Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA”). . The purpose of delay was particularly apparent where the parties had already been in litigation before this court, albeit before a different judge, regarding Plaintiff's motion for summary judgment, which was argued and denied, necessitating this trial. Moreover, per footnote a in the Claim Objection, the question of whether Plaintiff was properly a creditor before this court was raised in a deposition as early as January 19, 2006, but Defendant waited until the eve of trial to file his pleadings. . The Plaintiff asserted that, by waiting until the eve of trial to file the Motion to Dismiss for Plaintiff's alleged lack of standing (i.e., lack of creditor-status), Defendant should be deemed to have waived that defense, pursuant to Fed.R.Civ.P. 16(e), which requires that all defensive matters must be pled in the pretrial order. However, the question of a party’s standing to sue is, fundamentally, a jurisdictional question. Goldin v. Bartholow, 166 F.3d 710, 719 (5th Cir.1999) ("The standing of both parties must be inquired into as part of the Article III jurisdictional inquiry.”). Standing to sue is part of the "case or controversy” requirement of Article III, Section 2 of the United States Constitution. Id.; see also Arizonans for Official English v. Arizona, 520 U.S. 43, 64, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997). A motion to dismiss for lack of standing may be treated as a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). Mancuso v. Sullivan (In re Sullivan), 153 B.R. 751, 754 (Bankr.N.D.Tex.1993). As a general rule, a litigant generally may raise lack of subject matter jurisdiction at any time in a civil action, even at the appellate level for the first time. Kontrick v. Ryan, 540 U.S. 443, 455, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004). Accordingly, no matter what concerns the court may have with the litigation tactic of an eleventh-hour standing argument, the court believes it is appropriate to consider the substance of the Motion to Dismiss, as part of the court’s ruling in this adversary proceeding, and not deny it for lack of timeliness. . Mr. Morgan, no doubt, desired for this court to take things in a different sequence than is contemplated herein, and focus on the Claim Objection first, and hopefully come to the conclusion that the discharge objection must not go forward (because 8400 Expressway’s claim is either not legitimate or is of questionable validity). Unfortunately for Mr. Morgan, timing is "not on his side” in this situation. 8400 Expressway had a deadline for objecting to discharge (which it met when it filed its Complaint in August 2005). The trustee and parties-in-interest do not have a deadline for filing claim objections in a chapter 7 case. Nevertheless, if the Debtor seriously thought Plaintiff's claim could be eliminated with a claim objection (and, perhaps, Plaintiff's standing defeated in this Section 727 action), the court wonders why Debtor did not file his Claim Objection sooner than eight and one-half months after Plaintiff filed its proof of claim and thirteen months after the Complaint was filed-or at least sooner than the day before trial. Moreover, it occurs to this court that denial of 8400 Expressway’s claim against Mr. Morgan (if the Claim Objection ultimately goes forward), is not at all a certainty or likelihood. Not only has 8400 Expressway raised preclusion issues (in its Response to Claim Objection) that deserve weighty consideration, but, even if the prior judgments and litigation involving these parties do not conclusively establish Plaintiff's claim against Mr. Morgan (because of the omission of Mr. Morgan’s name in the OK Deficiency Judgment), certain Oklahoma case law suggests there are certainly other ways for 8400 Expressway to establish continued guaranty liability against Mr. Morgan. See Riverside Nat’l Bank v. Manolakis, 613 P.2d 438, 440 (Ok.1980) (a guarantor's obligation for a debt depends upon the terms of the guarantee agreement and the guarantor’s liability may survive, even where the creditor omits to seek a deficiency judgment). The court understands that Debtor takes the position that the guaranty was nonrecourse, but the court observes that it is not at all obvious that the guaranty was nonrecourse. See Plaintiff's Exh. 6, inter alia, p. 107, ¶ f. These are all issues (possibly) for another day. . The court takes judicial notice of the Schedules filed by the Debtor in this case that show this property has a fair market value of $550,000 with secured claims against it of $440,000. . The court notes that Mr. Morgan, at all times during trial, seemed a credible, frank witness. . Debtor was at one time a director of ARI. ARI is managed indirectly by an entity owned by Gene E. Phillips, the chairman of the former Southmarlc Corporation. The Debtor was asked to resign from ARI in 2001 because several loans which ARI had made to Morgan-related entities were in default, and also due to Mr. Morgan’s overall financial condition. . The Debtor also disclosed in his Statement of Financial Affairs the following additional 16 businesses (besides the 16 listed above) in which he was an officer, director, partner, or managing executive, or in which he owned 5% or more of the voting or equity securities, within six (6) years prior to the commencement of his bankruptcy case: Partners Capital, LP; MN Capital, Ltd.; Donna Lynn Associates; Donna Lynn Associates, Ltd.; DL Associates, LP; BB Morgan Family, LP; SA Blackburn Family, LP; FICOR, LLC Majestic Hotel Corp.; One Realeo Hotel Investors, Inc.; Transcontinental Majestic Hotel Corp.; TCI Belmont, Inc.; TCI Surf, Inc.; TCI Brompton, Inc.; Art Williamsburg, Inc.; and KC Airport Hotel, Inc. . TacCo does not have any employees but is managed by a Mr. Ken Joines, a person who consults with Gene Phillips and manages other private companies owned by Gene Phillips or his family trusts. Evidence suggested that Mr. Joines obtains management direction for TacCo from Mr. Phillips. . See Plaintiff's Exh. 38. . Warwick is the sole member of GRE (GRE is a limited liability company). Warwick is owned by a Partners Capital, L.P., which is 80% owned by Tara Group, Inc., which is 100% owned by Debtor. . The Debtor has testified that, at the time Tara Group assigned its purchase contract to acquire the Gainesville Mall and Land to GOM, the Debtor actually expected to receive not 42 acres but 82 acres of the surrounding Gainesville Land (78 acres on a “South Parcel'' and 4 acres on a "North Parcel,” for a total of 82 acres). However, the Debtor (through GRE) ended up receiving only 42 acres. The discrepancy between 42 and 82 arose because the Debtor and Greenbriar/Ca-belTel subsequently entered into an oral gentlemen's agreement that the 78 South Parcel would be split, with GRE to receive only 38 acres and Greenbriar or GOM to retain 40 acres. The Debtor testified that he agreed to leave 40 acres of the South Parcel behind with Greenbriar/CabelTel because it was his purpose and intent as a consultant with Greenbriar/CabelTel to add value to Greenbr-iar/CabelTel, and he agreed to this out of fairness to Greenbriar/CabelTel. It is not clear when the oral gentlemen’s agreement was reached, but it was "pretty much decided” by September 17, 2004, according to the Debtor’s testimony. . The court is aware that the consulting agreement was $180,000 per year for three years. . It appears that many of the original Equity Lenders were Gene Phillips-influenced or controlled entities as well. . Note that TacCo also held a claim on which Warwick was liable, in the amount of $1,865,000, at the time of acquiring the various notes listed above. . Following execution of the Consolidated Note, all of the borrowers under the Consolidation Note became obligated to TacCo for the full $15 million owed thereunder. . As noted earlier, the court found Mr. Morgan to be at all times credible and straightforward in answering questions. . The Debtor presented evidence that the CabelTel warrants were canceled by CabelTel and became worthless following the transfers to TacCo. . In fact, this is why there is such a concept as "constructive” fraudulent transfers. 11 U.S.C. § 542(a)(1)(B). . Mrs. Morgan paid all the bills for the Lake House from her personal bank account. . Later, after the transfer (on March 1, 2005), Family Leasing acquired one more as530set: a consulting contract with Greenbr-iar/CableTel (in connection with the Gaines-ville Mall transactions), pursuant to which Family Leasing receives $12,200 per month. Family Leasing does not have any employees to do the consulting. The Debtor provides services to Greenbriar/CableTel, through Family Leasing. The evidence was that the $12,200 per month that Family Leasing gets paid from Greenbriar/CableTel in connection with the consulting agreement ultimately gets deposited in Mrs. Morgan’s personal bank account. The evidence also was that this Family Leasing consulting agreement re-placed a prior consulting agreement between Tara Management, Inc. and Greenbriar dated September 1, 2003, that had a term for five years and provided for $180,000 per year to go to Tara Management, Inc. Since the Debt- or owns indirectly Tara Management, Inc., it appears that when the consulting agreement was put into Family Leasing’s name, the net effect was, arguably, to deprive the Debtor’s estate of $180,000 per year of value for about 3 more years. But this is probably theoretical more than anything else, since this is a pre-BAPCPA chapter 7 case, and postpetition earnings are not property of the estate (and what we are talking about, essentially, is Debtor’s postpetition earnings, since he is the one doing the consulting). The Debtor, of course, cannot be forced to continue to provide consulting services for the benefit of his bankruptcy estate. The court also notes that all of this consulting income was listed in Debtor’s Schedule I filed in his bankruptcy case. And, finally, as previously mentioned, the Debtor, despite the transfer, listed the equity in Family Leasing as community property, in his Schedules. . The Debtor testified that subsequent to Debtor’s bankruptcy filing, one of the rental properties owned by a land trust was recon-veyed to the sellers because the land trust's tenant had moved out, the land trust could not locate a new tenant, the property was not generating funds to pay the mortgage indebtedness, and the value of the property did not exceed the mortgage debt.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494159/	OPINION WHIPPLE, Bankruptcy Judge. The Michigan Unemployment Insurance Agency (“the Agency”) appeals the bankruptcy court’s order finding that its claim against Debtor Albion Health Services, a nonprofit employer, for reimbursements to Michigan’s Unemployment Trust Fund is not entitled to priority status as an excise tax under 11 U.S.C. § 507(a)(8)(E). For the reasons that follow, the bankruptcy court’s decision will be affirmed. I. ISSUE ON APPEAL Whether the bankruptcy court erred in finding that reimbursement payments owed to Michigan’s Unemployment Trust Fund by a nonprofit employer are not excise taxes within the meaning of § 507(a)(8)(E). II. JURISDICTION AND STANDARD OF REVIEW The Bankruptcy Appellate Panel (“BAP”) of the Sixth Circuit has jurisdiction to hear this appeal. The United States District Court for the Western District of Michigan has authorized appeals to the BAP, and neither party has timely elected to have this appeal heard by the district court. 28 U.S.C. §§ 158(b)(6), (c)(1). An order determining that a claim is not entitled to priority status is a final order. See In re Kids Creek Partners, 200 F.3d 1070 (7th Cir.2000)(finding that a priority-fixing order is treated as a final order); Volvo Commercial Fin. LLC v. Gasel Transp. Lines, Inc. (In re Gasel Transp. Lines, Inc.), 326 B.R. 683, 685 (6th Cir. BAP 2005) (finding an order determining that a claim is not entitled to administrative expense priority constitutes a final order). The facts are not in dispute. The only issue before the Panel is the priority status of the Agency’s claim. An order determining that a claim is not entitled to priority status is a question of law requiring de novo review on appeal. Jones v. United States (In re Garcia), 955 F.2d 16, 17 (5th Cir.1992). Under a de novo standard of review, the reviewing court decides an issue independently of, and without deference to, the trial court’s determination. Treinish v. Norwest Bank 602Minn., N.A. (In re Periandri), 266 B.R. 651, 653 (6th Cir. BAP 2001). III. FACTS There are no relevant facts in dispute with respect to this appeal. Under the Michigan Employment Security Act (“MESA”), the State of Michigan maintains an unemployment compensation fund (“the Fund”)- that is administered by the Agency. Laid off employees from both for-profit and nonprofit employers are eligible to collect benefits from the Fund. All for-profit employers are required to make quarterly payroll-based contributions to the Fund. See Mich. Comp. Laws Serv. § 421.13. However, nonprofit employers may elect to reimburse the Fund retrospectively for whatever claims are paid from the fund on account of their laid-off employees. Mich. Comp. Laws Serv. §§ 421.13a and 421.13c. Under Michigan law, a nonprofit employer who elects to become a reimbursing employer and also pays more than $100,000 remuneration per calendar year for employment must execute a surety bond, irrevocable letter of credit, or other security in an amount approved by the Michigan Employment Security Commission to secure payment of its reimbursement obligations. See Mich. Comp. Laws Serv. § 421.13a(4). Debtor is a nonprofit corporation that owned a hospital in Albion, Michigan, and paid its employees over $100,000 per calendar year. At all relevant times, Debtor had elected to be a reimbursing employer under § 421.13a. It ceased operations and laid off all of its employees in early 2002, prompting a large number of claims by Debtor’s former employees against the Fund. The Agency made payments from the Fund to Debtor’s former employees, and Debtor has failed to reimburse the Fund the amounts paid. On February 5, 2002, Debtor filed for relief under Chapter 7 of the Bankruptcy Code, and the Agency filed its proof of claim for reimbursement of unemployment benefits that it has paid to Debtor’s former employees. The Agency seeks priority status for its claim as an excise tax under 11 U.S.C. § 507(a)(8)(E). The Chapter 7 Trustee, the appellee herein, objected and filed a motion for summary judgment, arguing that the Agency’s claim is a general unsecured claim that is not entitled to a tax priority.1 On March 16, 2006, the bankruptcy court granted the Trustee’s motion, denying the Agency priority status for its claim, and the Agency timely appealed that decision. IY. DISCUSSION A. Overview of the Statutory Basis for the Agency’s Claim The Federal Unemployment Tax Act, 26 U.S.C. §§ 3301 et seq. (“FUTA”), imposes an excise tax on employers based on total wages paid by them during the year with respect to employment in order to fund the federal unemployment compensation system. See 26 U.S.C. § 3301. “Employment” is defined, however, to exclude services performed for an income tax exempt nonprofit organization. 26 U.S.C. § 3306(c)(8). In Massachusetts Division of Employment and Training v. Boston Regional Medical Center (In re Boston Regional Medical Center), 291 F.3d 111, 117 (1st Cir.2002) (‘Boston Regional”), the First Circuit explained the interplay between FUTA and a state’s unemployment compensation system. While FUTA imposes a tax on most American employers 603according to formulae contained in §§ 3301 and 3306, under § 3302, any contribution made to a state’s unemployment compensation fund serves as a credit against the federal tax. The federal government receives a portion of the total percentage to pay for the administration of the federal unemployment compensation system, but the majority goes to the state funds. The state funds, which must comply with requirements set forth in §§ 3302, 3303, 3304, and 3309, make payments to individuals who become unemployed through no fault of their own. Id. at 117. Under § 3309, “a state unemployment compensation system must permit, but not require, a government or nonprofit employer to make payments in lieu [of contributions] .... If an employer chooses to make payments in lieu [of contributions], it is also exempt from the requirement to make contributions to the state unemployment compensation fund. Instead, it agrees to reimburse the fund for any unemployment compensation payments made to recipients based on the recipients’ work for the employer. Section 3309(a)(2) authorizes the states to take measures to ensure that employers making payments in lieu [of contributions] will meet their obligations.” Id. Under Michigan law, each employer subject to MESA is required to make regular contributions to the Fund calculated as a percentage of wages paid by the employer. See Mich. Comp. Laws Serv. §§ 421.13 and 421.19. However, in compliance with FUTA, nonprofit employers may elect to reimburse the Fund by making payments in lieu of contributions in an amount equal to the full amount of benefits paid during any calendar quarter that is attributable to service in the employ of such organization and which is not reimbursable by the federal government. Mich. Comp. Laws Serv. § 421.13c(l). In addition to separate accounts for each employer, a “nonchargeable benefits account” or “solvency account” is maintained in the Fund to pay for such things as training benefits, benefits that are not chargeable to an individual employer, and deficiencies in an employer’s separate account. Mich. Comp. Laws Serv. § 421.17. While a nonprofit employer never contributes towards the costs of administering the federal unemployment compensation system, if it chooses to make contributions to the state system, its contributions include a component used to pay for the costs of administering that system, including contributions to the solvency account. See Mich. Comp. Laws Serv. § 421.19. Michigan law provides the Michigan Employment Security Commission with discretion to require a nonprofit employer to execute and file with it a surety bond, irrevocable letter of credit, or other security as a condition of making payments in lieu of contribution. See Mich. Comp. Laws Serv. § 421.13d. And provision of such security is required where the nonprofit employer pays more than $100,000 remuneration per calendar year for employment. Mich. Comp. Laws Serv. § 421.13a(4). As explained in Boston Regional: The disadvantage to the nonprofit employer of [electing to become a reimbursing employer] is that if the nonprofit then lays off large numbers of workers within a given year, it is subject to the full actual costs of the unemployment insurance benefits of those workers. Those costs can far exceed in a given year what its required contribution based on its experience rating would have been. Even so, it is not responsible for the cost of ensuring the fund’s solvency. The nonprofit employ604er choosing payments in lieu is choosing to self-insure and bear its own risk. Indeed, the relevant federal legislative history refers to this option as the option to self-insure. See S.Rep. No. 91-752 (1970), reprinted in 1970 U.S.C.C.A.N. 3606, 3618 (“In effect, the nonprofit organizations would be allowed to adopt a form of self-insurance.”). Boston Reg’l, 291 F.3d at 118. B. Is the Agency’s Claim Entitled to Priority Status? In determining the priority issue before it, the Panel must be mindful of the Bankruptcy Code objective of securing equal distribution among creditors and “the complementary principle that preferential treatment of a class of creditors is in order only when clearly authorized by Congress.” Howard Delivery Serv., Inc. v. Zurich Am. Ins. Co., — U.S. -, -, 126 S.Ct. 2105, 2109, 165 L.Ed.2d 110 (2006). In Howard Delivery Service, the Supreme Court instructed that provisions of the Bankruptcy Code allowing priorities “must be tightly construed” since “giv[ing] priority to a claimant not clearly entitled thereto is not only inconsistent with the policy of equality of distribution; it dilutes the value of the priority for those creditors Congress intended to prefer.” Id. at 2116. The Supreme Court cautioned that any doubt concerning the appropriate characterization of a debt obligation for the purpose of affording it priority “is best resolved in accord with the Bankruptcy Code’s equal distribution aim.” Id. In Howard Delivery Service, Inc., an insurance company filed a claim for unpaid workers’ compensation premiums, asserting that they qualified as “contributions to an employee benefit plan” entitled to priority under 11 U.S.C. § 507(a)(5). Id. at 2110. Although Congress left undefined the § 507(a)(5) term “employee benefit plan,” the Supreme Court rejected the suggestion that it borrow the definition contained in the Employee Retirement Income Security Act of 1974 (“ERISA”). Id. at 2112-13. Recognizing that the ERISA definition is susceptible of a construction that would include workers’ compensation plans, the Court decided to “follow the lead” of an earlier decision in noting that “ ‘[h]ere and there in the Bankruptcy Code Congress has included specific directions that establish the significance for bankruptcy law of a term used elsewhere in the federal statutes.’” Id. at 2113 (citing United States v. Reorganized CF & I Fabricators of Utah, Inc., 518 U.S. 213, 219, 116 S.Ct. 2106, 135 L.Ed.2d 506 (1996) (“CF & I Fabricators”)). Because no such directions are contained in § 507(a)(5), the Court declined to borrow a definition from “a statute designed without bankruptcy in mind” and instead considered the “essential character of workers’ compensation regimes.” Id. Finding the question to be close, the Court held that the insurance company’s claim was not entitled to priority, resolving any doubt concerning the proper characterization of the debt in accord with the Bankruptcy Code’s policy of equal distribution. Id. at 2109, 2116. In this case, the Agency contends that § 507(a)(8)(E) of the Bankruptcy Code provides for priority in payment of the debt owed it by Debtor. That section assigns priority status to a governmental entity to the extent that the debt owed to it is an excise tax on — ■ (i) a transaction occurring before the date of the filing of the petition for which a return, if required, is last due, under applicable law or under any extension, after three years before the date of the filing of the petition; or 605(ii) if a return is not required, a transaction occurring during the three years immediately preceding the date of the filing of the petition[.] 11 U.S.C. § 507(a)(8)(E). The question before the Panel then is whether the reimbursement payments owed to the Agency for unemployment benefits paid to Debt- or’s employees are “excise taxes,” or for that matter, whether they constitute a tax at all under § 507(a)(8). The Bankruptcy Code does not define “excise tax” or “tax.” Whether a particular obligation is a “tax” for bankruptcy purposes is a federal question and is not dependent upon the particular nomenclature used in a state’s law. City of New York v. Feiring, 313 U.S. 283, 285, 61 S.Ct. 1028, 1029, 85 L.Ed. 1333 (1941). “When state law, however, creates the obligation at issue, a court looks to that law to ascertain its attributes so that the court can determine its characterization under federal bankruptcy law.” Reconstituted, Comm. of Unsecured Creditors v. N.J. Dept. of Labor (In re United Healthcare Sys., Inc.), 396 F.3d 247, 252 (3d Cir.2005) (“United Healthcare”) (citing Feiring, 313 U.S. at 285, 61 S.Ct. 1028). The Supreme Court has been faced with the issue of whether a particular government exaction was a “tax” entitled to a priority in bankruptcy on a number of occasions. In Feiring, the court considered whether a state sales tax was a tax entitled to such priority under § 64 of the Bankruptcy Act. Feiring, 313 U.S. at 284-85, 61 S.Ct. 1028. The Court defined “tax” for the purpose of determining priority status under the Bankruptcy Act as “those pecuniary burdens laid upon individuals or their property, regardless of their consent, for the purpose of defraying the expenses of government or of undertakings authorized by it.” Id. at 285, 61 S.Ct. 1028 (citing New Jersey v. Anderson, 203 U.S. 483, 491, 27 S.Ct. 137, 139, 51 L.Ed. 284 (1906), wherein the Court found the obligation owed to the state to be a franchise tax entitled to priority and not a contract debt since the amount to be paid is fixed by statute, is subject to control and change at the will of the state, and is imposed upon all corporations). More recently, the Supreme Court addressed whether a liability arising under an Internal Revenue Code provision imposing a ten percent “tax” on any accumulated funding deficiency of pension plans should be treated as an excise tax entitled to priority under the Bankruptcy Code. See CF & I Fabricators, 518 U.S. at 216-19, 116 S.Ct. 2106. The Court reviewed its earlier cases in which it considered whether a particular exaction was a tax for purposes of the priority provisions of the Bankruptcy Act and noted that “in every one of those cases the Court looked behind the label placed on the exaction and rested its answer directly on the operation of the provision using the term in question.” Id. at 220, 116 S.Ct. 2106. The Court distinguished a tax obligation, as defined in Feiring and Anderson, from a penalty on the basis that a tax provides for the support of government while a penalty is “ ‘an exaction imposed by statute as punishment for an unlawful act.’ ” Id. at 224, 116 S.Ct. 2106 (quoting United States v. La Franca, 282 U.S. 568, 572, 51 S.Ct. 278, 280, 75 L.Ed. 551 (1931)). Due to the “obviously penal character” of the exaction at issue, the Court found it was not a tax and not entitled to priority. Id. at 225, 116 S.Ct. 2106. Applying the principles articulated in Anderson and Feiring, other courts have added glosses to the Supreme Court’s description of what exactions qualify as “taxes” for priority purposes in the bankruptcy context. The Ninth Circuit set forth a frequently cited four-prong test for deter606mining whether a particular exaction should be characterized as a tax for bankruptcy priority purposes: (a) An involuntary pecuniary burden, regardless of name, laid upon individuals or property; Imposed by, or under authority of the legislature; (c) For public purposes, including the purposes of defraying expenses of government or undertakings authorized by it; (d) Under the police or taxing power of the state. County Sanitation Dist. No. 2 v. Lorber Indus. of Cal., Inc. (In re Lorber Indus. of Cal., Inc.), 675 F.2d 1062, 1066 (9th Cir. 1982). The Sixth Circuit has criticized the Lorber test as insufficient in distinguishing taxes from other types of payments owed the government, such as fees' for service or criminal or civil penalties. See Yoder v. Ohio Bureau of Workers’ Comp. (In re Suburban Motor Freight, Inc.), 998 F.2d 338 (6th Cir.1993) (“Suburban I”); Ohio Bureau of Workers’ Comp. v. Yoder (In re Suburban Motor Freight, Inc.), 36 F.3d 484 (6th Cir.1994) (“Suburban II”). The court noted that “the test, in particular its ‘public purpose’ requirement, did not limit in any meaningful way the circumstances under which government claims would be entitled to priority” since “all money collected by the Government goes toward defraying its expenses, and is used for public purposes.” Suburban II, 36 F.3d at 488. Thus, “to say as a matter of definition that all taxes are collected for public purposes does not allow the Government to say that all funds collected for public purposes are taxes.... ” Suburban I, 998 F.2d 338, 342 (6th Cir.1993). While the Sixth Circuit agreed that satisfaction of the Lorber test is necessary to qualify a claim for priority treatment as an excise tax, it identified two additional factors that refine the public purpose element: “(1) that the pecuniary obligation be universally applicable to similarly situated entities; and (2) that according priority treatment to the government claim not disadvantage private creditors with like claims.” Suburban II, 36 F.3d at 488. In Suburban II, the court was faced with the Ohio Bureau of Workers’ Compensation’s claim for reimbursement of payments made to claimants necessitated by Suburban’s failure to pay premiums when it was a participant in the state insurance fund and by its failure to pay claims which arose when it was a self-insured employer. Id. at 486. Although the court had previously held in Suburban I that the Bureau’s claim for unpaid workers’ compensation premiums was entitled to priority as an excise tax, it refused to extend that holding to the Bureau’s reimbursement claims. With respect to reimbursement payments necessitated by Suburban’s failure to pay premiums, the court explained that if Suburban “had paid its workers’ compensation premiums, it would not have incurred any additional liability for reimbursement for claims payments made on its behalf.” Id. at 489. Because its liability arose solely by virtue of its default, the court concluded that the liability was not “universally applicable to similarly situated persons or firms” and that the lack of universality prevented the Bureau’s claim from being accorded priority treatment. Id. With respect to reimbursement payments as a result of Suburban’s default as a self-insured employer, sureties had issued bonds so that Suburban could be self-insured. Both the Bureau and the sureties had satisfied Suburban’s compensation claims, and both sought reimbursement from Suburban. The court found that it would be “unfair and without statutory justification” to allow priority status 607to the government’s claim and to leave “unpaid private insurers to languish along with the rest of the unsecured creditors.” Id. As such, the court denied the Bureau priority status, concluding that “the non-tax characteristics of Suburban’s liability for reimbursement claims payments predominate over its tax characteristics, and the Bureau’s claim more closely resembles a subrogation claim than a universally applicable tax.” Id. Although the Sixth Circuit has not addressed the specific issue of whether reimbursement payments owed to a state’s unemployment trust fund by a nonprofit employer qualify as an excise tax entitled to priority under § 507(a)(8)(E), several other courts have with mixed results. However, the two courts of appeals that have addressed the issue both found the question to be close but concluded that the obligation to make such payments was not a “tax” within the meaning of the bankruptcy statute. See Boston Reg’l, 291 F.3d at 114; United Healthcare, 396 F.3d at 248. In Boston Regional, the First Circuit found that the obligation to make prospective periodic contributions differed significantly from the obligation of electing nonprofit employers to make retrospective reimbursement payments in lieu of contributions in that the former also “cover[s] a share of the costs of administering the system, of supplying additional benefits such as training, and of keeping the system solvent despite others’ defaults” while the latter simply “reimburse[s] the fund for payments attributable to them, but not for administrative costs, additional benefits, or the solvency margin.” Boston Reg’l, 291 F.3d at 122. The fact that reimbursement payments merely compensate for the costs imposed by a particular participant and do not serve to sustain a government undertaking as a whole supported a finding that reimbursement payments are not a tax but rather are “a different kind of obligation that a nonprofit employer is permitted to assume in place of a tax.”2 Id. But what “tip[ped] the scales” for the court was the option that the state law gave to the state agency to require a nonprofit employer to provide a surety bond to secure reimbursing payments. The court reasoned that this factor weighed against treating reimbursement payments as a tax since the state “can protect itself in advance against unpaid payments in lieu, as it cannot against unpaid income taxes.” Id. at 123. After all, an important reason for giving a priority in bankruptcy to taxes is that the taxing authority “cannot choose its debtors, nor can it take security in advance of the time that taxes become due.” Id. at 122. (quoting H.R.Rep. No. 95-595, at 190 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6150). The court found that by not requiring a surety bond, the state accepted the risk that some reimbursement payments will not be made when nonprofit employers become insolvent and that the state’s unemployment fund, and not the employer’s unsecured creditors, should bear the cost of making up that deficiency. Id. at 123. In United Healthcare, the Third Circuit also found that a nonprofit employer’s obligation to make reimbursement payments was not a tax for bankruptcy purposes. United Healthcare, 396 F.3d at 258. The court “followed] the lead of the Supreme Court” and employed a functional examination that focused on the characteristics and effects of the obligation. Id. at 255. 608While the court found that the Lorber/Sub-urban factors were helpful in this analysis, it determined that it should not be constrained by those factors and indicated that such an examination “should be flexible enough to allow for consideration of any relevant factor.” Id. As in Boston Regional, the court found significant the fact that reimbursement payments, although related to unemployment compensation contributions, are not the same obligation, but instead are distinct obligations. Id. at 258. “They do not create one obligation that is applied to all New Jersey employers.” Id. at 261. This distinction, and specifically the fact that, unlike contributions, payments in lieu of contributions reimburse the state for unemployment benefits actually paid and do not raise funds to support a general governmental undertaking, led the court to conclude that, rather than a tax, the obligation “is more like a promise in exchange for the privilege of employing individuals in the state without being required to pay state unemployment compensation contributions.” Id. at 260. The Third Circuit also found that National Cable Television Association, Inc. v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974), although decided in a different context, “further illuminate[d] the non-tax character of the reimbursement obligation.” United Healthcare, 396 F.3d at 260. In that case, the Supreme Court pointed out that both a “disregard [of] benefits bestowed by the Government on a taxpayer” and the government’s ability to manipulate the assessment are indicative of a tax. Nat’l Cable Television Assoc., Inc., 415 U.S. at 340-41, 94 S.Ct. 1146. By contrast, a situation in which the government exaction is exchanged for a benefit not shared by others indicates that the debt is not for a tax. Id. As the Third Circuit then noted: [The state], in demanding reimbursement, may not disregard the benefits it bestowed. In fact, the reimbursement obligation directly is linked to the benefits it paid. Non-profit employers enjoy a benefit not shared by other employers, as they may operate in the state without making quarterly contributions to the state unemployment compensation fund. Additionally, the state cannot manipulate a reimbursement obligation to encourage or discourage certain activity. Again, under the reimbursement program, the government pays out benefits, and the non-profit employer simply refills the government’s coffers. United Healthcare, 396 F.3d at 260. In this case, the parties do not dispute that the second and fourth Lorber factors are satisfied, that is, that Debtor’s obligation to make reimbursement payments is imposed by law under the police or taxing power of the state. And although the Trustee argues that the first factor — that the obligation is involuntary' — • is not satisfied since it was Debtor’s choice to elect to be a reimbursing employer, the Panel disagrees. Debtor’s obligation is involuntary in that state law requires all nonprofit employers to contribute to the Fund either as a contributing employer or as a reimbursing employer. And all reimbursing employers are required to reimburse the Fund for benefits paid to its laid-off employees. The Agency contends that the third factor, the public purpose element, is also met as Debtor’s payments provide funds that assist unemployed persons to meet their financial obligations and maintain their spending power, which, in turn, promotes general economic stability. The Agency also argues that the additional Suburban factors are satisfied. Specifically, it argues that Debtor’s obligation is universally applicable in that it imposes an 609unemployment tax on all employers and that a nonprofit employer’s election to make reimbursement payments in lieu of regular periodic contributions merely alters the manner in which the tax is paid. In addition, the Agency contends that allowing its claim a tax priority will not disadvantage private creditors since there are no private insurance options for providing unemployment compensation coverage in Michigan and no private creditors that have a statutory duty to pay unemployment benefits. •The Agency relies on two cases in which the court found that a nonprofit employer’s reimbursement payments were taxes.3 See Sacred Heart Hosp. of Norristown v. Pa. Dept. of Labor and Indus. (In re Sacred Heart Hosp. of Norristown), 209 B.R. 650 (E.D.Pa.1997); In re Cottage Grove Hosp., 265 B.R. 241 (Bankr.D.Or.2001). In Sacred Heart Hospital, the court found relevant several reasons that taxes receive priority in bankruptcy, specifically, that taxes benefit the public while ordinary debt payments benefit only the creditor and those closely associated with the creditor, and that the government is an involuntary creditor of the debtor that cannot take security in advance of the time that taxes become due. In re Sacred Heart Hosp. of Norristown, 209 B.R. at 654-55. Finding that the reimbursement payments under the state’s statute are involuntary, the court focused its analysis on the public purpose prong of the Lor-ber/Suburban test. The court explained that the payments benefit the public “because compensating unemployed workers reduces the chances of their becoming poor and making demands on the federal and state welfare systems and thus all taxpayers.” Id. at 656. It also found, without further discussion, that the reimbursement obligation is universally imposed on all employers. Id. at 658. Although the court recognized that the state’s requirement that certain employers execute a bond or post security to guarantee the reimbursement payments was a non-tax characteristic, the court concluded that this non-tax characteristic was outweighed by the other tax-like attributes of the state’s system. Similarly, in Cottage Grove Hospital, the court found that, notwithstanding a choice as to the form of payment, payment into the unemployment compensation fund is universally required of all subject employers. In re Cottage Grove Hosp., 265 B.R. at 246. Thus, the court found that the Suburban criteria of universal treatment for similarly situated persons was met. In addition, the debtor had posted a surety bond in order to elect to be a reimbursing employer, and the surety had a subrogation claim for amounts paid to the state on the debtor’s bond. Although the court 610recognized that the surety may be a “disadvantaged private creditor[ ] with [a] ‘like’ claim[ ]” as the 6th Circuit found in Suburban II, it declined to make the “tax” status of reimbursement payments dependent on whether subrogation rights had attached to the security posed for the payment. Id. at 246. It further noted that, under 11 U.S.C. § 507(d), Congress denied priority status to subrogees in the priority claim context. Id. at n. 14. The Panel believes that the functional approach engaged in by the First and Third Circuits, using the six factors outlined in Lorber and Suburban II as a guide, sets forth the type of analysis required under the Supreme Court precedent discussed above when a court must determine whether a particular government exaction is a tax for priority purposes under the Bankruptcy Code. The courts in both Sacred Heart Hospital and Cottage Grove Hospital failed to undertake such an analysis. In both cases, the courts failed to distinguish between contributions and payments in lieu of contributions in finding Suburban II’s universality criteria satisfied. As a result, they failed to focus on “the operation of the provision using the term in question,” and thus failed to consider the characteristics and effects of reimbursement payments in lieu of contributions. CF & I Fabricators, 518 U.S. at 220-21, 116 S.Ct. 2106. While reimbursement payments in lieu of contributions made by a nonprofit employer under MESA certainly have some tax characteristics, engaging in a functional examination of the obligation and its source reveals its non-tax character. As similarly found by the First and Third Circuits, reimbursement payments and contributions under Michigan law are distinct obligations. See Mich. Comp. Laws Serv. § 421.13a(l) (providing that “[a]ny nonprofit organization ... shall pay contributions as a contributing employer pursuant to section 13, unless it elects to make reimbursement payments in lieu of contributions as a reimbursing employer pursuant to sections 13a to 13c.”). Under Michigan law, a nonprofit employer’s reimbursement obligation is limited to unemployment benefits actually paid. No part of the reimbursement payment is used to support a general governmental undertaking, such as, administering the state unemployment system. Unlike a contributing employer who must contribute regardless of whether it has former employees receiving benefits, a reimbursing employer pays only when benefits are paid to its former employees and only reimburses the state for the cost that particular employer caused the state to bear. The Third Circuit’s conclusion that the effect of an employer electing to make reimbursement payments is “more like a promise in exchange for the privilege of employing individuals in the state without being required to pay state unemployment compensation contributions” is persuasive. United Healthcare, 396 F.3d at 260. Thus, reimbursement payments under MESA are better characterized as an alternative to paying taxes rather than as. an alternative method of paying a tax, as contended by the Agency. See id. at 258. Moreover, in Suburban II, the court found that because the employer’s liability “arises solely by virtue of its default,” it is not a liability “universally applicable to similarly situated persons or firms” and thus prevents the Bureau’s claim from being accorded priority treatment. Suburban II, 36 F.3d at 489. Here, the Agency’s claim arises by virtue of Debtor’s election not to pay the state unemployment compensation tax, but instead to reimburse the state for unemployment compensation payments attributable to service relating to employment with Debtor if and 611when such payments are made. It is not a liability universally applicable to all employers or even to all nonprofit employers. As in Suburban II, this lack of universality prevents the Agency’s claim from being accorded priority treatment. Although the Agency also argues that allowing its claim a tax priority will not disadvantage private creditors, under Michigan law, the execution of a bond or other security is required of certain nonprofit employers and the state is otherwise given discretion to require such security of nonprofit employers to ensure payment of a particular employer’s reimbursement obligation. The Sixth Circuit found that affording priority status to the state’s claim in a similar circumstance would indeed disadvantage private creditors in a manner that would be “unfair and without statutory justification.” Suburban II, 36 F.3d at 489. In any event, the ability to require security for the obligation undertaken by a nonprofit employer electing to make reimbursement payments is an indication of the non-tax character of the obligation. See id.; Boston Reg’l, 291 F.3d at 122-23; In re Sacred Heart Hosp. of Norristown, 209 B.R. at 656 n. 8. Although it is true that no surety is involved in this case, the Agency agrees that it had the ability to require a surety bond. As in Boston Regional, by not doing so, the state accepted the risk that some reimbursement payments will not be made when nonprofit employers become insolvent. See Boston Reg’l, 291 F.3d at 123. The Panel’s determination of whether Debtor’s liability to the Agency is a tax cannot be based on the Agency’s decision to require a bond or not. Instead the Panel must consider the operation of the statutory provisions under which Debt- or’s liability arises, provisions that clearly provide the Agency the ability to require a bond or other surety. See CF & I Fabricators, 518 U.S. at 220, 116 S.Ct. 2106. The Panel also rejects the Agency’s argument that because of the close relationship between FUTA and MESA and because FUTA refers to the obligations of employers to contribute to the federal unemployment compensation system as “excise taxes,” a nonprofit employer’s reimbursement obligation is an “excise tax.” Under FUTA, an excise tax is paid on wages with respect to “employment.” 26 U.S.C. § 3301. FUTA excepts from the definition of “employment” service performed in the employ of a nonprofit employer. 26 U.S.C. § 3306(c)(8). Furthermore, the Supreme Court has instructed that courts must look behind labels placed on exactions in determining whether the exaction is a tax for priority purposes in bankruptcy. CF & I Fabricators, 518 U.S. at 220, 116 S.Ct. 2106; see Howard Delivery Serv., Inc., 126 S.Ct. at 2113, 126 S.Ct. 2105 (refusing to borrow a definition from a statute designed without bankruptcy in mind and focusing instead on the “essential character” of workers’ compensation regimes in determining priority status of the creditor’s claim for unpaid premiums). As the Third Circuit explained, the role of FUTA in the Panel’s inquiry “is limited to its mandate that states must provide nonprofit employers with a reimbursement obligation option. That mandate still leaves open the question surrounding the nature of this obligation.” United Healthcare, 396 F.3d at 260. V. CONCLUSION A claim against a nonprofit employer for reimbursement payments under MESA is analogous to the claim for reimbursement of workers’ compensation payments under Ohio law, an obligation the Sixth Circuit has determined more closely resembles a subrogation claim than a universally applicable tax. See Suburban II, 36 F.3d at 489. Because the non-tax characteristics *612of the Debtor’s reimbursement obligation predominate over its tax characteristics, and because any doubt concerning its proper characterization for purposes of affording the debt priority status should be resolved “in accord with the Bankruptcy Code’s equal distribution aim,” Howard Delivery Serv., Inc., 126 S.Ct. at 2116, the bankruptcy court did not err in denying the Agency’s claim priority status under 11 U.S.C. § 507(a)(8)(E). The bankruptcy court’s decision is, therefore, AFFIRMED. . The Trustee objected to both the amount of the claim and the priority asserted by the Agency. However, the parties agreed that the priority issue be resolved first and that it be resolved by motions for summary judgment. . The court had earlier noted that, although the Supreme Court has distinguished a tax from a debt or a penalty, these three categories do not cover all possible government claims in bankruptcy proceedings. See Boston Reg’l, 291 F.3d at 120-21. . The Agency also relies on a third case in which the bankruptcy court found reimbursement payments owed to the Michigan Uninsured Employers' Security Fund for workers' compensation benefits paid by it to be excise taxes entitled to priority. Michigan Uninsured Employers' Sec. Fund v. Hynes (In re Hynes), 229 B.R. 405 (Bankr.W.D.Mich.1998). In that case, the workers’ compensation benefits were paid by the state as a result of the debtor's failure to maintain workers’ compensation insurance or to obtain authorization to be self-insured. In finding that the Suburban factors were satisfied, the court stated that the reimbursement obligation “is universally applicable to uninsured employers.” Id. at 409. It made no attempt, however, to distinguish its holding from the Sixth Circuit’s holding in Suburban II that a reimbursement obligation that arises solely by virtue of the debtor's default is not universally applicable to similarly situated persons. Nevertheless, it appears to have simply defined "similarly situated persons” more narrowly (“uninsured employers”) than the manner in which the Sixth Circuit used the terms (employers generally).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494160/	MEMORANDUM OF DECISION BRETT DORIAN, Bankruptcy Judge. Pornography doesn’t promptly spring to mind when considering the defense of “ordinary course of business ... of the debtor and the transferee” in connection with al677leged preferential transfers under 11 U.S.C. § 547. But the analytical tool used by Mr. Justice Stewart in Jacobellis v. State of Ohio, 378 U.S. 184, 84 S.Ct. 1676, 12 L.Ed.2d 793 (1964), wherein he states that he knows pornography when he sees it, would appear to apply here as well, substituting, as appropriate, “ordinary course of business.” The Chapter 7 trustee, Michael D. McGranahan (“the trustee”) has sued defendant Fisher Nut Company (“the defendant”) to recover as preferences payments made by the debtor, Central Valley Processing, 40, 40, and 45 days after shipment of goods and credited to the account of the debtor 44, 44, and 49 days, respectively, after such shipment.1 The check by which the payments were made was dated December 2, 2002. The printed form invoices issued by the defendant called for payment in 30 days. While it is presumed that there were some purchase orders or something similar signed by the parties which included terms for payment, no such documents were offered at trial. The debtor filed a voluntary Chapter 11 on February 21, 2003 — some eighty-three days or approximately two months and twenty-three days later (using 30 day months). While it is unknown when the checks were charged against the debtor’s bank account, it is likely that had the payment been made some ten days earlier, the payments would have been totally outside the preference period. The parties have stipulated that if the subject payments from the debtor to the defendant fall within 11 U.S.C. § 547(c)(2)(B) — that the payments were made in the ordinary course of business of the debtor and the defendant — that the payments do not constitute an avoidable transfer.2 Both parties urge that the court should view payments made by the debtor to the defendant in 1997 and 1998 as being within scope of the “ordinary course of business” analysis with respect to the subject payments which were made on December 2, 2002, but the parties differ as to whether the timing of the payments as between the earlier transactions and the later ones favors or defeats their respective positions. If the prior payments are not considered, there is the question, unresolved in this circuit and subject to a split of authority with respect to other circuits, as to whether a single payment can ever be sufficient to allow a(B) defense. The relevance of the earlier payments is of course for the court and not the parties to decide, but despite the court’s initial view that the earlier payments might be too remote in time to be considered in the 678“ordinary course of business” analysis, it is difficult to ignore the likelihood that the earlier transactions may have affected the subject payments. The trustee urges that as the payments were made beyond the 30 day due date noted on the invoice and were later than the payments involved in the earlier transactions between the parties, the payments should be deemed recoverable, although as noted above there is nothing in the evidence to show that payment within that period was in fact a contractual term. But more importantly, there is nothing before the court to suggest that there was any sort of penalty for payment beyond the billing due date. The only situation in which “ordinary course between the debtor and creditor” would not be the same as ordinary course between the parties would appear to arise only if the parties had a history of dealing in more restricted terms than the industry standard. Given the stipulation that payment was in accord with industry standards, and noting that no collection activity — not even a phone call inquiring as to payment — occurred, it cannot be found that the payments made were outside the ordinary course of the parties’ dealings. There was no evidence offered on behalf of the trustee that the timing of the payment was in any manner related to cash flow problems being experienced by the debtor, although presumably, had such been the case, the trustee could have produced evidence to that effect as the pretrial statement filed by the trustee prior to trial on October 28, 2005, indicated that a former employee of the debtor, one Earn Sriraki, might be called regarding payments to the debtor. Although the prior transactions between the debtor and the defendant appear somewhat remote, they do indicate that payment beyond the terms noted on the invoice occurred also in the prior transactions and there is no indication that the debtor in the subject transactions made any efforts to ensure that payment would occur within the invoice provision. The trustee presents essentially a very narrow argument-that the transactions which occurred in 1997 and 1998 where payments were credited on the 4th and 3rd days, respectively, after the invoice due dates establish that the payments credited in 2002 on the 14th, 14th and 19th days following the payment due dates conclusively establishes that the 2002 payment were outside the ordinary course of business of the debtor and the transferee.3 (Again, this argument totally ignores the fact that the debtor wrote the checks 10, 10, and 14 days after the due date.) But if three or four days is acceptable, what is unacceptable if the invoice due date is the sole applicable standard. Would five days be acceptable? Six days? Seven days? Eight days? Nine days? And so on. If payments are viewed from the date of delivery, then the contrast is between payments credited 34 and 35 days after delivery — in the case of the earlier payments— and payments credited 44 and 49 days after delivery — in the case of the subject payments — appears much smaller. It should be further noted that the payments 679for the 2002 invoices were dated December 2, 2002, indicating that the invoices were paid (a check issued) 10, 10 and 15 days following the invoice due date, providing numbers of 40, 40, and 45 days after delivery. Further, the court will take judicial notice of the fact that in 2002 Thanksgiving was on November 28. The check for payment was written on the following Monday, December 2, and the intervention of that holiday weekend may well have been a factor in any delay with respect to issuance of the checks. Plaintiff has not suggested what the proper line of demarcation would be and common sense dictates that a rule which arbitrarily and exclusively looks to intervening days simply is unworkable. Accordingly, other factors must be considered and in the court’s view the expectations of the creditor are a major factor.4 Ron Fisher, president of the defendant and the sole witness at trial, testified that at the end of the 30 day period noted on the subject invoices no collection activity was undertaken-presumably not even a phone call inquiring as to payment-and that as a general policy no such activity would be pursued for a period of at least sixty days following delivery. In summary, the court relies on these factors for its decision: 1. Had the payments been deducted from the debtor’s bank account by November 23, 2002, they would have been outside the preference period. 2. There was no evidence that as of December 2, 2002, eighty-three days before the voluntary Chapter 11 filing, the debtor was experiencing financial difficulties and was sliding towards bankruptcy. 3. There was no evidence that payment beyond the invoice due date with respect to the earlier transactions between the debtor generated any concern by the defendant. 4. There was no evidence that any form of collection activity was undertaken by the defendant prior to receipt of the payments. 5. The defendant’s president testified that his company’s policy was to allow thirty days beyond the invoice due date before initiating any sort of collection activity. 6. The intervention of the Thanksgiving holiday just prior to the issuance of the checks could well have impacted the day of payment. For the reasons stated above the court finds and concludes that the subject payments were within the scope of the exception set forth in 11 U.S.C. § 547(c)(2)(B). This memorandum will constitute the court’s findings of fact and conclusions of law. A separate judgment will issue. . Case law has established that the ninety day period for identifying preferential payments begins to run when funds are actually credited against the debtor’s checking account, thereby delaying until that date the computation of the ninety day period. The inquiry here has a different focus, namely the circumstances of the actual payment, which could be the date of issuance of the check, the mailing of the check, the receipt of the check, or the date that funds were irrevocably in the control of the defendant. The only dates provided by the evidence show the dates the checks were issued and the dates the checks were credited. No evidence as to when the checks were mailed, received, deposited or credited against the debtor's checking account was provided. . The purpose of the § 547(c)(2) ordinary course of business exception “is to leave undisturbed normal financial 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.” 5 Lawrence P. King, Collier on Bankruptcy ¶ 547.04[2] (15h ed.2006) (citing H.R.Rep. No. 595, 95th Cong., 1st Sess. 373-74 (1997) reprinted in 1978 U.S.C.C.A.N. 5787, 6329). . The plaintiff has used as a benchmark for determining the payment date, the date on which the checks were credited on the defendant’s books. The that is not deemed a proper approach. Here the inquiry is on the actions of the debtor and the circumstances surrounding the act of payment. Given the short distance between the offices of the debt- or and the defendant, it is possible that the checks were received the day after issuance, but simply not credited for a few days. . It is to be noted that the underlying contracts which presumably established the date payment was expected are not part of the evidence. Only the form invoices give a sug-gestión, but not convincing proof as to what any purchase agreement might have provided.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494161/	ORDER REGARDING SUMMARY JUDGMENT RANDY D. DOUB, Bankruptcy Judge. This adversary proceeding is before the court on the motion of the defendant, Mr. Douglas W. Lyon, for summary judgment. A hearing was held in Fayetteville, North Carolina on January 4, 2007. A complaint was filed in this action by the trustee, Mr. Ocie Murray, for recovery of real property transferred by the debtor to the defendant, Mr. Lyon, or in the alternative, for sale of Mr. Lyon’s interest in the property with that of the debtor. Mr. Murray alleges that the transfer to Mr. Lyon should be deemed null and void pursuant to 11 U.S.C. § 548, N.C.G.S. § 39-23.4 and 11 U.S.C. § 544(b). At the hearing of this matter, both parties conceded that the transfer of the property from the debtor, individually, to the debtor and Mr. Lyon occurred on or about June 5, 2003. The couple entered into a separation agreement on August 4, 2003. Mr. Lyon filed a petition for relief pursuant to chapter 13 of the Bankruptcy Code on January 16, 2004. Mrs. Lyon filed a petition for relief pursuant to chapter 7 of the Bankruptcy Code on October 4, 2005. 11 U.S.C. § 548(a)(1) permits a trustee to avoid a fraudulent transfer made “by the debtor, that was made or *750incurred on or within one year before the date of the filing of the petition .1 In this case, the transfer was made by the debtor more than one year prior to the filing of her petition. The trustee argued that 11 U.S.C. § 108(c) allows for the tolling of the time in which he must bring the action to avoid the transfer due to the imposition of the automatic stay in Mr. Lyon’s bankruptcy. Section 108(c) provides: Except as provided in section 524 of this title, if applicable nonbankruptcy law, an order entered in a nonbankruptcy proceeding, or an agreement fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor, or against an individual with respect to which such individual is protected under section 1201 or 1301 of this title, 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. In the case of In re Little, 216 B.R. 769 (Bankr.E.D.N.C.1997), the court found that § 108(c) was inapplicable to an unsecured governmental tax claim which must have been assessed within 240 days before the date of the filing of the petition as required by § 507(a)(8)(A)(ii). The court determined that the 240-day assessment was a substantive element of that statute, and was not a statute of limitations. Here the look-back provision of § 548, requiring that the transfer be made or incurred within one year before the date of the filing of the petition, is also a substantive element and is not a statute of limitations. Therefore, the tolling feature of § 108(c) does not apply, and the one-year look-back period must be determined from the date of the filing of Mrs. Lyon’s petition. Because the transfer occurred more than one year prior to the filing of the debtor’s petition, the transfer is not avoidable pursuant to § 548. Therefore, Mr. Lyon’s motion for summary judgment is ALLOWED as to the first and second causes of action of the plaintiffs complaint, which are brought pursuant to 11 U.S.C. § 548(a)(1), and the first and second causes of action are hereby dismissed. As to all other causes of action contained in the complaint, there appear to be genuine issues of material fact and therefore, Mr. Lyon’s motion for summary judgment on those causes of action is DENIED. SO ORDERED. . Mrs. Lyon’s petition was filed, prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which amended § 548(a)(1) to permit the avoidance of fraudulent transfers which occurred on or within two years before the filing of the petition. Therefore, in this case, the trustee’s look-back period is one year.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494162/	DECISION AND ORDER RICHARD L. SPEER, Bankruptcy Judge. This cause is before the Court after an Evidentiary Hearing on the Debtor’s Objection to the Amended Claim of Option One Mortgage Corp. (Claim # 1-2). After considering the arguments of the Parties at the Hearing, the Court issued an oral order, sustaining the Debtor’s objection in part, by revising downward, from $10,144.62 to $9,755.94, the arrearage amount set forth in the Creditor’s amended claim. Pursuant to Bankruptcy Rules 7052 and 9014, the following constitutes this Court’s findings of fact and conclusions of law with respect to this holding. BACKGROUND On March 15, 2006, the Debtor filed a petition in this Court for relief under Chapter 13 of the United States Bankruptcy Code. On September 25, 2006, the Creditor amended its original proof of claim, revising upward its arrearage claim from $9,594.62 to $10,144.62. In its amended claim, the Creditor attached a statement containing the following arrearage charges: $ 4,084.00 10 Payments @ $408.40 (5/2005-2/2006) $ 424.98 1 Payment @ $424.98 (3-2006) $ 441.00 18 Payment Late Charges @ $24.50 $ 170.00 BPO $ 47.10 Other Advances $ 3,540.32 Escrow Shortage ($ 64.78) Suspense Balance $ 1,502.00 Foreclosure Cost Total $10.144.62 752The Debtor, on October 20, 2006, filed a Motion to Disallow the Creditor’s amended claim. In his Motion, the Debtor stated that, of the above items, the “payment arrearage of $4,508.98 and the escrow shortage of $3,540.32 are the only items to which Debtor agrees.” (Doc. No. 60, at pg. 1). Resultantly, the Debtor explicitly challenged the following four charges: $ 47.10 Property Inspection (labeled “Other Advances” in the statement filed by the Creditor) $ 170.00 Broker Price Opinion (labeled “BPO” in the statement filed by the Creditor) $ 441.00 Late Charges $1,502.00 Foreclosure costs At the Hearing, however, Debtor’s counsel further clarified that only the last two charges, the Late Charges and the Foreclosure costs, were now in dispute. DISCUSSION Before this Court is the Debtor’s objection to the Amended Claim of Option One Mortgage Corp. (Claim # 1-2). A determination of an objection to a claim is deemed to be a “core proceeding” over which this Court has been conferred with the jurisdictional authority to enter final orders and judgments. 28 U.S.C. § 157(b)(2)(B). A timely filed proof of claim is deemed allowed unless a party in interest objects. 11 U.S.C. § 502(a). If, as here, an objection to a claim is made, paragraph (b) of § 502 directs that a court is to determine the amount of the claim as of the date the petition was filed. Thereafter, a court “shall allow such claim ... except to the extent that any of the exceptions set forth in paragraph (b) are applicable, including that such claim is unenforceable against the debtor and property of the debtor, under any agreement or applicable law for a reason other than because such claim is contingent or unmaturedf.]” 11 U.S.C. § 502(b)(1). Although this exception (or for that matter any other exception) to the claim’s allowance process is nowhere referenced by the Debtor, it was assumed at the Hearing that, with respect to his objection to the above cited arrearage charges, the Debtor was relying on their unenforceability under this provision. As taken from his brief to the Court, “the alleged costs ... are an unwarranted and illegal burden on Debtor” and “[s]ome of these fees should be the responsibility of the lender and ... are excessive and should be reviewed by the Court.” (Doc. No. 60, at pg. 2). In a contested matter, the overall burden of persuasion to establish a claim’s allowability is placed upon the claimant. Morton v. Morton (In re Morton), 298 B.R. 301, 307 (6th Cir. BAP 2003). However, as an initial evidentiary matter, Bankruptcy Rule 3001(f) provides that a “proof of claim executed and filed in accordance with these rules shall constitute pri-ma facie evidence of the validity and amount of the claim.” In other words, so long as a proof of claim is properly filed and in correct form, the objecting party is charged first with coming forth with evidence contradicting the claim. See, Id. (“debtor has the initial burden of establishing a colorable challenge to a properly filed proof of claim”). In this way, the Debtor offered nothing of substance, either at the Hearing or in his brief to the Court, to further his position. Although Debtor’s counsel sought to call as a witness Creditor’s local legal counsel, no witnesses with first hand knowledge of the transaction in question were called; nor did the Debtor offer any documentary evidence to dispute the Creditor’s claim. Also, the Debtor did not cite this Court to any legal authority, statutory or otherwise, supporting his position. Instead, the Debtor simply reiterated that the Court should make an independent 753examination as to the reasonableness of the arrearage charges assessed by the Creditor. As a purely legal matter, therefore, this Court’s analysis would ordinarily stop. Both the Creditor’s proof of claim, and its amendment thereto, must be view as filed properly and in correct form, thereby giving rise to the prima facie presumption of validity: They both contained a copy of the mortgage as required under Bankruptcy Rule 3001(c); the original claim was submitted on the official form as required by Bankruptcy Rule 3001(a); and, with respect to the arrearage sought by the Creditor, an itemized list of the charges accompanied its claim. Nevertheless, in the interests of equity, and so as to further the fresh-start policy underlying the Bankruptcy Code, this Court, in accordance with its statutory authority under 11 U.S.C. § 105(a),1 undertook at the Hearing to review the propriety of those charges included in the Creditor’s proof of claim. Based upon his review, the Court made the following downward revisions in the charges assessed by the Creditor: First, the Court reduced from $441.00 to $269.50 the allowable late charges assessed by the Creditor. The reason: the Creditor’s figure was based upon the assessment of 18 late charges (each @ $24.50), but of those, the evidence only supported that the Debtor was late on 11 occasions, representing his missed payments. Second, the Court, as unreasonable and unsubstantiated, disallowed the $170.00 “Broker Price Opinion” fee assessed by the Creditor, along with the $47.10 charge it assessed for a property inspection. Based then upon these revisions, totaling $388.60, the Court revised downward the Creditor’s amended claim for arrearage from $10,144.62 to $9,755.94 (the actual figure is eight cents higher, $9,756.02, but at the Hearing, a figure was transposed during the Court’s calculation. As this error is slight and in the Debtor’s favor, the Court will use the figure stated orally at the Hearing.) Accordingly, in accordance with these findings of fact and conclusions of law, it is hereby ORDERED that the Debtor’s Objection to the Amended Claim of Option One Mortgage Corp. (Claims # 1-2), be, and is hereby, SUSTAINED IN PART. IT IS FURTHER ORDERED that, as an arrearage, the Creditor, Option One Mortgage Corp., shall be allowed, in its amended proof of claim, the amount of $9,755.94. . In relevant part, § 105(a) provides, "[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.”	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494163/	MEMORANDUM OF DECISION EUGENE R. WEDOFF, Bankruptcy Judge. This adversary proceeding is before the court on the motion of plaintiff HSBC Bank USA, N.A. (HSBC) to alter or amend the court’s judgment of October 5, 2006, issued after trial and accompanied by a written opinion. HSBC Bank USA v. United Air Lines, Inc. (In re UAL Corp.), 351 B.R. 916 (Bankr.N.D.Ill.2006) (the pri- or decision). HSBC brought the proceeding against United Air Lines, Inc. (United), a Chapter 11 debtor, to determine the value of a security interest that HSBC holds in United’s lease of maintenance space at San Francisco Airport (the SFO lease). The judgment determined this value, giving HSBC a fixed allowed secured claim that will be paid according to United’s confirmed plan of reorganization. However, the judgment did not address whether HSBC was entitled to a payment of adequate protection on its claim — relief that HSBC had requested before the trial but did not raise during the trial or post-trial briefing. HSBC now seeks an award of adequate protection.1 As discussed below, the motion will be denied. Despite HSBC’s failure to raise its request for adequate protection at trial, the request can properly be considered now, but it fails on its merits. Adequate protection is only payable when a bankruptcy estate retains collateral pursuant to the automatic stay. Once the stay is no longer applicable — whether because the collateral has been liquidated, because relief from the stay has been granted, or, as here, because the stay has terminated as a result of plan confirmation — adequate protection is moot. After confirmation of a plan, claim treatment is dictated by the terms of the plan, and the terms of United’s plan do not provide for any payment of adequate protection on HSBC’s claim. Jurisdiction This court has jurisdiction to enter a final judgment, as discussed in the prior decision. HSBC Bank, 351 B.R. at 918. Factual Background Most of the facts relevant to HSBC’s pending motion are discussed in the prior decision, id. at 918-19, and are briefly summarized here, together with a few additional matters particularly relevant to the adequate protection claim. HSBC is the indenture trustee for holders of municipal bonds that financed improvements at SFO on property leased by United. The bonds were to be paid solely by United, through a transaction in which United nominally subleased a portion of its SFO leasehold to the indenture trustee and the trustee leased the property back to United, with rent under the leaseback equal to debt service on the bonds. HSBC took the position that the sublease/leaseback transaction was a set of true leases. United contended that it was actually a financing arrangement, in which the sublease gave the indenture trustee an interest in United’s SFO lease securing the payments required by the leaseback. United filed an adversary proceeding seeking recharacterization of the transaction consistent with its view. This court found in favor of United, and the judgment was ultimately upheld on appeal. United Air Lines, Inc. v. HSC Bank USA, 307 B.R. 783618 (Bankr.N.D.Ill.2004), rev’d, 317 B.R. 335 (N.D.Ill.2004), rev’d, 416 F.3d 609 (7th Cir.2005), cert. denied, 547 U.S. 1003, 126 S.Ct. 1465, 164 L.Ed.2d 247 (2006). On April 28, 2004, while the appeals of the recharacterization proceeding were pending, HSBC filed the current adversary proceeding to address the possibility that its position on recharacterization would not prevail. HSBC’s adversary complaint sought to value the interest that HSBC would have in United’s leasehold and to obtain a declaration that HSBC had an allowed secured claim in that amount. The complaint also requested relief under § 363(e) of the Bankruptcy Code (Title 11, U.S.C.), which provides that where a bankruptcy estate uses collateral, the creditor is entitled on its request to have its interest in the collateral adequately protected. In addition, a month after it filed the adversary proceeding, HSBC moved for relief from the automatic stay to allow it to enforce a right to take possession of the property conveyed by the sublease. Bankruptcy Docket No. 6957. However, HSBC did not press its request either for adequate protection or for relief from the automatic stay. Instead, these matters were simply continued along with the adversary proceeding. Indeed, the parties expressly stipulated that the motion for relief from the stay would be considered in conjunction with the adversary complaint rather than as a matter requiring immediate determination. Bankruptcy Docket No. 7412. Before trial on HSBC’s adversary complaint began, United’s Chapter 11 plan was confirmed. The subsequent trial was a plenary one; no party had suggested that the value of HSBC’s security interest in the SFO lease should be determined separately from HSBC’s request for adequate protection of that claim, and the court entered no order of bifurcation. Nevertheless, claim valuation was the only question that parties addressed at the trial. Only after the court’s judgment determining the valuation question did HSBC move for consideration of its adequate protection request. Legal Conclusions 1. Judicial discretion to consider arguments under Rule 59(e) that were not made before the entry of judgment HSBC’s pending motion for an award of adequate protection is brought pursuant to Rule 59(e), Fed.R.Civ.P., made applicable to bankruptcy proceedings by Fed. R. Bankr.P. 9023. Rule 59(e) itself sets out no standard for granting relief. It provides simply that [a]ny motion to alter or amend a judgment must be filed no later than 10 days after entry of the judgment. United’s first objection to HSBC’s motion is that there is a judicially created limitation on Rule 59(e) relief, providing that a judgment cannot be altered or amended to grant relief on the basis of an argument that was not made prior to judgment. United’s argument is based on statements such as this one from FDIC v. Meyer, 781 F.2d 1260, 1268 (7th Cir.1986): Motions ... to alter or amend a judgment ... cannot be used to raise arguments which could, and should, have been made before the judgment issued.2 If such statements imposed an absolute limitation on the grant of Rule 59(e) relief, the limitation would be applicable here, since HSBC’s argument for adequate protect certainly could and should have been made before judgment. 784However, the statements relied on by United serve more as a warning to litigants—that Rule 59(e) accords no right to make untimely post-judgment arguments—than as a limit on a trial court’s discretion to consider such arguments. The parties have cited no authority reversing a trial court for considering arguments made for the first time after judgment. To the contrary, Boulevard Bank N.A. v. Philips Med. Systems Int’l B.V., 15 F.3d 1419, 1426 (7th Cir.1994), quoted the Meyer statement in noting that the district court may not have been required to consider Rule 59(e) arguments that were not raised prior to a summary judgment, but then stated that since the district court did not deem the ... arguments to have been waived, we will also address their merits. The Third Circuit merely notes that courts often take a dim view of new arguments after judgment, Kiewit Eastern. Co., Inc. v. L & R Const. Co. Inc., 44 F.3d 1194, 1204 (3d Cir.1995), and the First Circuit has explicitly recognized that trial judges have discretion to consider new arguments under Rule 59(e). Williams v. Poulos, 11 F.3d 271, 289 (1st Cir.1993) (The decision to grant or deny a Rule 59 motion is committed to the wide discretion of the district court .... [Tjhis discretion attaches to a court’s decision on whether to allow a party to argue new material or a new theory under Rule 59.). In the situation here, it is an appropriate exercise of discretion to consider HSBC’s adequate protection argument. Although the issue of adequate protection was not addressed at trial, HSBC’s pleadings raised the issue, and the parties have argued its merits in the context of the HSBC’s Rule 59(e) motion based entirely on the evidence adduced at trial, just as they could have done in post-trial briefs. Thus, the situation is much like one an appellate court faces in considering an argument raised for the first time on appeal—where, if the argument is a purely legal one, the waiver resulting from failure to raise it earlier will sometimes be forgiven. See, e.g., In re Reese, 91 F.3d 37, 39 (7th Cir.1996) (considering a constitutional challenge to a bankruptcy court’s judgment first raised on appeal to the district court). Whether to grant an award of adequate protection to HSBC is best decided on the merits, rather than the timing, of its legal argument. 2. The limits of adequate protection ? the merits, HSBC is not entitled to an award of adequate protection. Adequate protection is a remedy that the Bankruptcy Code offers to secured creditors while their collateral is being administered by a trustee (or a debtor in possession exercising the powers of a trustee) as part of a bankruptcy estate. During this period, the automatic stay under § 362(a) prevents creditors from exercising their nonbankruptcy remedies—such as repossession, foreclosure, or eviction—against the collateral. With the automatic stay in effect, a creditor’s interest in the collateral may decline in value, and the Code addresses this possibility by offering two alternatives: relief from the automatic stay under § 362(d), allowing the creditor to pursue its nonbankruptcy remedies, or adequate protection under § 361, giving the creditor some assurance that any decrease in the value of [its] interest in the collateral will be offset, either by cash payments, additional or replacement hens, or some other relief that provides an indubitable equivalent to the interest sought to be protected. See In re Dairy Mart Convenience Stores, Inc., 351 F.3d 86, 90 (2d Cir.2003) (adequate protection is required [w]hen the automatic stay endangers ‘an interest of an entity in property’ of the estate). Thus, adequate protection operates only prospectively. If the automatic 785stay is no longer in effect — because relief from the stáy has been granted or the property has been surrendered or sold— adequate protection has no function. Relief from the stay leaves the creditor free to claim whatever interest in the property it has under applicable nonbankruptcy law, and surrender or sale of the property eliminates any effect of the automatic stay. Section 363(e) — the provision of the Code under which HSBC seeks an award of adequate protection — clearly reflects its prospective nature: [0]n request of an entity that has an interest in property used ... by the trustee, the court ... shall prohibit or condition such use ... as is necessary to provide adequate protection of such interest. If the property in question is no longer being administered by a trustee (or debtor in possession) under the protection of the automatic stay, there is no use of the property by the trustee that can be conditioned on the trustee providing adequate protection. When the bankruptcy estate’s use of collateral has ceased, so has the rationale for adequate protection. See In re Best Prods. Co., 149 B.R. 346, 348 (S.D.N.Y.1992) (affirming denial of an award of adequate protection after the debtor surrendered the collateral and noting that Section 363(e) is by its terms inapplicable when the Bankruptcy Court .has no effective ability to condition the property’s present or future use). In this case, the confirmation of United’s plan of reorganization terminated the automatic stay as to HSBC’s interest in United’s SFO leasehold. Confirmation has the effect of revesting property of the bankruptcy estate in the debtor pursuant to § 1141(b), and once property is removed from the estate, the automatic stay terminates pursuant to § 362(c)(1).3 Revested with its property, a Chapter 11 debtor is emancipated, Pettibone Corp. v. Easley, 935 F.2d 120, 122-23 (7th Cir.1991), and the rights of the debtor and its creditors are thereafter determined by the plan rather than the provisions of the Bankruptcy Code governing estate administration. In re Victorian Park Assocs., 189 B.R. 147, 151 (Bankr.N.D.Ill.1995) ([I]f all property is revested in the debtor and no estate remains to be administered, then the provisions in the Bankruptcy Code governing administration of a bankruptcy estate and the attendant rights and duties of creditors and debtors cease to govern.). Just as HSBC’s motion for relief from stay was rendered moot by plan confirmation, so was its request for adequate protection under § 363(e).4 7863. The treatment of HSBC’s claim under the plan Since, plan confirmation terminated the statutory right that HSBC had to an award of adequate protection, HSBC could only be entitled to adequate protection if the plan itself so provided. However, United’s plan not only fails to provide an adequate protection payment for HSBC’s claim, it treats the claim in a manner that forecloses any such payment. The plan — binding on both United and HSBC pursuant to § 1141(a) of the Code — treats HSBC’s claim as follows: (a) To the extent of HSBC’s security interest in United’s SFO lease (the amount determined in the judgment at issue here), the claim is required to be paid in cash. Second Amended Ch. 11 Plan, §§ VII.E.3.a(ii); III.D.3.b.5 (b) [F]or any amounts owed by [United] exceeding the value of the SFO Security Interest, HSBC’s claim is to be paid pro rata with other unsecured claims. Id., §§ VII.E.3.a(ii); III.D.12.b. (c) In full and final settlement of potential objection to Confirmation of [the] Plan by the [municipal bond] Indenture Trustees, United is to pay the reasonable legal fees incurred by the trustees in litigating their claims. Id., § IX.K.1. This treatment of HSBC’s claim — cash for the secured portion of the claim, pro rata treatment of the balance, and an award of attorneys’ fees — is exhaustive. For HSBC to receive an additional award of adequate protection on the claim would contradict the provision of § VII.E.3.a(ii), requiring that all amounts owing on the claim in excess of HSBC’s security interest to be paid on a pro rata basis with other unsecured claims.6 Moreover, as United has argued, the provision for an award of attorneys’ fees indicates that the treatment of HSBC’s claim was carefully negotiated. As an un-dersecured creditor, HSBC would not have been entitled to attorneys’ fees under the Code; § 506(b) requires payment of such fees (provided for by the parties’ agreement) only to the extent that [the creditor’s claim] is secured by property the value of which ... is greater than the amount of such claim. Accordingly, the provision in § IX.K.1 for attorney fees was indeed a concession by United, consistent with the declaration that the provision was a full and final settlement of all objections of the municipal bond trustees to the treatment of their claims under the plan. HSBC did not object to confirmation and cannot obtain by way of adequate protection more than the plan provides for its claim. Conclusion For the reasons stated above, HSBC has shown no grounds for altering or amending the judgment in this proceeding. Its motion will be denied. . Originally, HSBC's motion sought clarification that the judgment was not intended to resolve all of the issues in the case, leaving adequate protection an open question. After the court rejected that contention at oral argument, the parties submitted supplemental briefs on whether the evidence adduced at trial would allow an award of adequate protection notwithstanding HSBC’s failure to argue the point. . Similar statements appear in Simon v. United States., 891 F.2d 1154, 1159 (5th Cir.1990), and Harley-Davidson Motor Co., Inc. v. Bank of New England, 897 F.2d 611, 616 (1st Cir. 1990) (Rule 59(e) is aimed at reconsideration, not initial consideration.) . Revesting under § 1141(b) can be prevented by provisions of the plan or order of confirmation. However, United’s plan expressly provides for revesting (Second Amended Ch. 11 Plan, Bankruptcy Docket No. 14813, § VLB), and the order of confirmation (Bankruptcy Docket No. 14829) contains nothing to the contrary. . Because adequate protection is unavailable after confirmation, it is not necessary to determine the amount that United would have been required to pay to use HSBC’s collateral under the protection of the automatic stay. The calculation of adequate protection has generated a substantial split of authority. Compare In re Craddock-Terry Shoe Corp., 98 B.R. 250 (Bankr.W.D.Va.1988) (awarding loss of claim value from date of bankruptcy filing) with In re Wilson, 70 B.R. 46 (Bankr.N.D.Ind. 1987) (awarding loss of claim value from the date of the motion for adequate protection) and In re Deico Electronics, Inc., 139 B.R. 945 (9th Cir. BAP 1992) (awarding loss of claim value from the date that creditor would have been able to obtain the property in the absence of the automatic stay). See also In re Addison Properties Ltd. P’ship, 185 B.R. 766, 780 n. 15 (Bankr.N.D.Ill.1995) (applying adequate protection to the value of a creditor's claim as of the filing date, but leaving open the question of the point at which a decline from that value should be calculated). . Section III.D.3.b gives United other options for satisfaction of the secured portion of an allowed claim — surrendering the collateral or reinstating the original obligation — that would not be applicable here. . Thus, even if HSBC's adequate protection claim would otherwise have survived plan confirmation, this provision of the plan would foreclose it.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494164/	ORDER RICHARD D. TAYLOR, Bankruptcy Judge. Before the Court is the Complaint to Determine Validity, Priority, and Extent of Lien, to Obtain Declaratory Relief, and 906to Obtain Relief From the Automatic Stay [the Complaint] filed by the plaintiff, H. Collins Haynes [Haynes]. The debtors filed an Answer and Objection to Claim [the Answer], Trial was held on October 24, 2006. The parties appeared personally and through their attorneys. Haynes seeks declaratory relief based on the assertion that a mortgage he holds as assign-ee collateralizes $586,219.03 in debt representing the last of three promissory notes successively executed or guaranteed by Haynes and the debtors. The debtors contend that the mortgage collateralized solely the initial note (a promissory note for $150,000.00) or, alternatively, an amount not greater than the initial note amount regardless of its inclusion in the third note, or that the mortgage should have been released when the third note paid off the initial note. At the conclusion of trial, the Court took the matter under advisement. For the reasons stated below, the Complaint is granted in part and denied in part. The Court finds that Haynes has a valid claim in the amount of $368,109.52, of which $150,000.00 is an allowed secured 'claim (and upon which costs, interest, and attorney fees may accrue). The balance of $218,109.52 is an allowed unsecured claim.1 Jurisdiction This Court has jurisdiction over this matter under 28 U.S.C. § 1334 and 28 U.S.C. § 157, and it is a core proceeding under 28 U.S.C. § 157(b)(2)(B), (I), and (K). The following opinion constitutes findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052. Background Facts Separate debtor Richard Donckers [Donckers] and Haynes were members of Market Foods Ltd., LLC [Market Foods], an entity formed to operate boutique grocery stores, principally in northwest Arkansas. In furtherance of that effort, Market Foods cultivated a lending relationship with Community Bank of North Arkansas, later Chambers Bank of North Arkansas [collectively Chambers Bank or the bank]. This relationship involved a number of loans, three of which are pertinent to the contentions between these parties.2 The pertinent notes are referred to as Note One, Note Two, and Note Three. Note One Market Foods executed Note One, a promissory note in the principal amount of $150,000.00, on August 31, 2004. Haynes and Donckers signed Note One, which was scheduled to mature on October 5, 2004, as members of Market Foods. Both the debtors and Haynes executed commercial guaranties in favor of Chambers Bank.3 The Chambers Bank Boarding Data Sheet under the heading of “Loan Class” charac907terizes the transaction as a “New Loan.” (Defs.’ Ex. I.) Also on August 31, 2004, both debtors personally executed a Mortgage [the Mortgage] in favor of Chambers Bank. The described real property consists of the debtors’ homestead valued at approximately $800,000.00. The Mortgage collateral-ized Note One itself, not the contingent performance of the debtors’ guaranties. Specifically, the Mortgage defines “Note” as “the promissory note dated August 31, 2004, in the original principal amount of $150,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement.” (Pis.’ Ex. 3; Defs.’ Ex. L.) More generically, the Mortgage also provides that it secures payment of the “Indebtedness,” which is defined as “all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents....” (Pis.’ Ex. 3; Defs.’ Ex. L.) The term “Related Documents,” while implicitly expansive, is, as defined in the Mortgage, restricted by a modifier that refers back to the defined term “Indebtedness.” Note Two Haynes, Donckers, and three other Market Foods members executed Note Two, a promissory note in favor of Chambers Bank dated September 30, 2004, in the original principal amount of $200,000.00. Market Foods did not execute Note Two. Note Two matured on October 15, 2004. The Disbursement Request and Authorization form, (Pis.’ Ex. 5), reflected that it was a business loan specifically for working capital purposes. Note Three Market Foods executed Note Three, a promissory note in favor of Chambers Bank dated November 16, 2004, in the principal amount of $573,535.00. Denoted as Loan No. 9410, it was to mature on February 15, 2005. Donckers and Haynes signed Note Three as members of Market Foods; it mirrors Note One in this regard. The Disbursement Request and Authorization form, (Pis.’ Ex. 7), reflects that it was a business loan to provide short-term working capital. Part of the proceeds were used to pay off Note One and Note Two: $151,898.63 on Note One and $201,512.33 on Note Two. The balance represented additional working capital extended to Market Foods. Chambers Bank’s Debit/General Ledger form characterized this credit as a “New Loan.” (Pis.’ Ex. 7.) The Chambers Bank Loan Checklist under the heading “Collateral” states: “This transaction is secured by UCC Collateral.” (Defs.’ Ex. P.) No reference is made to the Mortgage. Additionally, the same Loan Checklist contains the following entry: “Copied From: 9139.” As will be explained below, Loan No. 9139 was an earlier transaction that the debtors argue Note Three was intended to emulate. The “Copied From” language is further amplified by an Advisory Warnings to Lender reference (a category on Chambers Bank’s standard form) regarding its historical antecedents, which states: “This transaction was created based upon a copy of another transaction.” (Defs.’ Ex. P.) Further, the Loan Documents list outlined in the Loan Checklist refer to a number of documents, from the Loan Checklist to a Commercial Security Agreement (also dated November 16, 2004, and defined below), inclusive of the guaranties and other documents normally related to a credit transaction. 908However, the Loan Documents list contains no reference to the Mortgage. Chambers Bank also generated a Boarding Data Sheet, (Defs.’ Ex. Q), relating to Note Three. Again, it references Loan No. 9139 in the “Copied From” section. The Note Three loan purpose was “To Provide Short-Term Working Capital.” The stated loan class was “New Loan.” A checklist space for “1st or 2nd Mtg:” was left blank. The “Collateral Summary” section refers to -the “Assignment of Contract — Jordan Creek Village Center, West Des Moines, Iowa, Lease Agreement between GGP Jordan Creek L.L.C. (Landlord) and Market Foods Limited, L.L.C. (tenant) dated January 21, 2004,” which is the collateral described in the Commercial Security Agreement; no reference is made to the Mortgage. The Boarding Data Sheet reflects disbursements to “Payoff’ Note One and Note Two. Under “Officer Comments,” the following can be found: Primary Source of Repayment: Contract Receivables Secondary Source of Repayment: Business and Personal Cash Flow Again, there is no reference to the Mortgage. Chambers Bank also generated a Notice of Final Agreement with respect to Note Three. (Defs.’ Ex. R.) The specific listing of loan documents does not include the Mortgage, but does reference the Commercial Security Agreement. Market Foods defaulted on Note Three, which generated two demand letters. The first letter was from Chambers Bank’s attorneys dated January 21, 2005. (Defs.’ Ex. V.) The second demand was directly from Chambers Bank over the signature of J. Shannon White, the Senior Vice President who was the loan officer on the credit. (Defs.’ Ex. W.) The letter references Market Foods’s bankruptcy. Neither demand referenced any collateral. Neither the three promissory notes or the Mortgage contain cross collateralization, all indebtedness, or future advance clauses. These type clauses were not unknown to Chambers Bank; the Commercial Security Agreement contained a cross collateralization clause, (Defs.’ Ex. G), and at least one exemplar of a Chambers Bank mortgage contained a future and additional indebtedness clause. (Defs.’ Ex. M.) Haynes’s Claim Market Foods filed its voluntary chapter 11 petition on January 24, 2005. Market Foods later converted to a chapter 7 and cannot address its obligations under Note Three. The debtors filed their personal bankruptcy on July 16, 2005. Chambers Bank pursued its rights against Haynes based on his guaranty. On March 11, 2005, Haynes satisfied Note Three by payment to Chambers Bank of $586,219.03, which represents the original principal balance plus accrued interest through March 11, 2005. In exchange, Chambers Bank executed an assignment to Haynes conveying Note Three, the Mortgage, the debtors’ personal guaranties, and the Commercial Security Agreement dated November 16, 2004, associated with tenant rebates and Note Three. (Pis.’ Ex. 10.) The debtors’ schedules reflect that the value of the property subject to the Mortgage is $800,000.00, a figure well in excess of Haynes’s claim. If the Mortgage and claim are valid, and if the Mortgage collat-eralizes the full amount of Note Three, then Haynes is fully secured pursuant to 11 U.S.C. § 506. Haynes contends that, as Chambers Bank’s assignee, he has the right to pursue the Mortgage, which he asserts fully col-lateralizes Note Three. Haynes’s position is that Note Three represents a renewal, extension, modification, substitution, and/or consolidation of Note One, Note 909Two, and the additional indebtedness extended in the context of Note Three. Donckers’ Defense The debtors responded to the Complaint by filing the Answer, which included an objection to Haynes’s claim. The debtors denied that Haynes had a valid secured claim or mortgage lien. Although no reference is made to 11 U.S.C. § 502, the response appears to raise the issue of enforceability under § 502(b)(1). The gravamen of the debtors’ defense and claim objection is threefold. First, the debtors contend that Note Three, as a matter of law, paid off Note One and, therefore, Chambers Bank was obligated to immediately release the Mortgage. Second, the debtors assert that a representative of Chambers Bank advised them at the time Note Three was executed, the Mortgage would be released. The third argument combines and amplifies the first two. The debtors suggest that the discussions regarding the release of the Mortgage were consistent with the short term nature of Notes One and Two and the anticipated long term nature of Note Three, a transaction that was to mirror a prior credit relationship between Chambers Bank and Market Foods. In that event, the short-term credits represented by Note One and Note Two would have been replaced by long-term credit collater-alized solely by the collateral described in the Commercial Security Agreement. If the debtors are correct, Haynes would simply have an unsecured claim,4 which the debtors argue should further be diminished by one-half based upon the contribution rights incidental to a typical co-guarantor relationship. Discussion The debtors are only partially correct. The Mortgage is valid and enforceable and fully collateralizes the indebtedness represented by Note One, plus costs, reasonable attorney fees, and interest until paid. However, the Mortgage does not collateralize the additional indebtedness represented by Note Three, which includes both Note Two and the extension of additional debt. Note Three represents, in part, a renewal, extension, modification, consolidation, or substitution of or for Note One. The additional indebtedness represented by Note Three over and above the amount represented by Note One is not secured by the Mortgage. Neither the Mortgage or the three promissory notes contain future advance, all indebtedness, or cross collateralization clauses. Therefore, only the original indebtedness represented by Note One, in whatever subsequent form, is collateralized by the Mortgage. Three factors support this conclusion. The first is the express language of Note One and the Mortgage. The Mortgage secures the indebtedness represented by Note One, regardless of whether it is later consolidated, renewed, extended, modified, or reemerges in a substituted form. A change in the form of the debt is “insufficient to constitute payment of a debt and discharge a mortgage.” St. Agatha Fed. Credit Union v. Ouellette, 722 A.2d 858, 861 (Me.1998) (citing Jones v. New York Guaranty and Indem. Co., 101 U.S. 622, 630, 25 L.Ed. 1030 (1879)); Schwerin v. Shostak, 213 Cal.App.2d 37, 42-43, 28 Cal.Rptr. 332 (1963). The parties contractually agreed in this regard. 910Second, and concomitantly, neither Note One or the Mortgage contain a future advance, all indebtedness, or cross collateral-ization clause that would represent a contractual agreement by the debtors that the Mortgage might serve to collateralize other or additional indebtedness. Third, it is clear from Chambers Bank’s own documents that it did not contemplate or memorialize that the Mortgage would serve as collateral for the indebtedness represented by Note Three. The bank’s testimony supports this conclusion. While one officer testified that the Mortgage was considered part of the Note Three loan package, the testimony of the actual loan officer involved was more equivocal. Further, the documentation for Note Three simply does not support the first officer’s testimony.5 The rule of law relating to mortgages and the debts they secure was stated succinctly by the Arkansas Supreme Court in 1934: [w]here a mortgage is given to secure a specific debt named, the security will not be extended as to antecedent debts unless the instrument so provides and identifies those intended to be secured in clear terms, and, to be extended to cover debts subsequently incurred, these must be of the same class and so related to the primary debt secured that the assent of the mortgagor will be inferred. The reason is that mortgages, by the use of general terms, ought never to be so extended as to secure debts which the debtor did not contemplate. Hendrickson v. Farmers’ Bank & Trust, 189 Ark. 423, 73 S.W.2d 725, 729 (1934). According to the court, the intention of the parties must be regarded, and “all the circumstances attendant upon the execution of the mortgage and the nature of the transaction itself are to be considered.” Id. The purpose of this rule of law is “to protect the borrower against the unwarranted extension of the lien for debts which the parties might not have intended.” Union Nat’l Bank of Little Rock v. First State Bank & Trust Co. of Conway, 16 Ark.App. 116, 697 S.W.2d 940, 942 (1985). However, the intention expressed by the language employed controls and “cannot be enlarged by any contemporaneous parol or subsequent agreement that it should secure any indebtedness other than that referred to in the mortgage.” Bank of Searcy v. Kroh, 195 Ark. 785, 114 S.W.2d 26, 28 (1938). Absent ambiguity, the court must interpret the document in accordance with the intention of the parties expressed by language appearing in the document itself. National Bank of East. Ark. v. General Mills, Inc., 283 F.2d 574, 577 (8th Cir.1960) (discussing and 911adopting the trial court’s conclusions relating to the interpretation of Arkansas cases). The debtors’ argument that the execution of Note Three, as a matter of law, paid off Note One, and that the bank was obligated to immediately release the Mortgage, would require the Court to find that Note Three is neither a renewal of, extension of, modification of, consolidation of, or substitution for Note One. The Court is unwilling to do so. The debtors also, argue that when Note Three was executed, affirmative representations were made that the Mortgage would be immediately released. In support of this argument, the debtors refer to a specific statement to that effect and to the supporting documentation that reflects that it was not in the bank’s contemplation that Note Three would be collateralized by the Mortgage. This argument fails on the pleadings and the proof. Although six pages in length, the debtors’ Answer is a bare-bones pleading: (1) it generally disputes the validity of the Mortgage lien;6 (2) it does not contain a counterclaim; (3) it does not contain a count for fraud, misrepresentation, or breach of contract; and (4) it does not raise any colorable defenses or claims on which this Court could find for the debtors. In their Answer, the debtors “affirmatively plead that a representative from Chambers Bank told them that that particular note [Note One] was paid and that the mortgage would be released.” (Answer ¶ 8.) The debtors reason that this statement would be consistent with the parties intention that the Note Three transaction would mirror the earlier Original Note transaction. However, as previously stated, the Answer contains only a factual allegation that this representation was made. No concomitant cause of action is suggested or made. This creates three significant infirmities. First, even if the statement had been made, it is clear that Note One was not paid and continued to exist in a substituted form. Second, if the parties’ intention was that the execution of Note Three paid off Note One and that the Mortgage should have been released, then that assertion should have been the subject of a counterclaim for breach of contract, fraud, estop-pel, detrimental reliance, misrepresentation, or failure to release the Mortgage as required by Arkansas law. More specifically, the debtors correctly argue that there is a statutory requirement under Arkansas law that the mortgagee must acknowledge satisfaction of the amount due on a mortgage at the request of the person making satisfaction. Ark.Code Ann. § 18-40-104(a) (Supp.2005). The same statute states the appropriate cause of action if a satisfied mortgage is not acknowledged: (a) If any mortgagee or his or her executor, administrator, or assignee shall receive full satisfaction for the amount due on any mortgage, then at the request of the person making satisfaction, the mortgagee shall acknowledge satisfaction of the amount due on the mortgage on the margin of the record in which the mortgage is recorded. (d) If any person receiving satisfaction does not, within sixty (60) days after being requested, acknowledge satisfaction as stated in subsection (a) of this section ..., he or she shall forfeit to the party aggrieved any sum not exceeding the amount of the mortgage money, to be recovered by a civil action in any court of competent jurisdiction. Ark.Code Ann. § 18-40-104(d) (Supp. 2005). *912The Answer does not specifically or generically plead or allude to this statute. As previously indicated, by its very contractual terms the indebtedness represented by Note One survived in substituted form by virtue of the execution of Note Three. Additionally, at no time within the context of this litigation did the debtors file a compulsory counterclaim as required by Rule 7013, as being extant at the time of service that “arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.” Fed. R. BankrJP. 7013.7 Third, regardless of whether any counterclaim or sufficient affirmative defense had been properly raised in the Answer, the debtors simply did not meet their burden of proof on the elements required. The evidence presented does not support a finding of fraud or misrepresentation, or a suitable basis for a statutory satisfaction demand. For the reasons stated above, the Court finds that Haynes has a valid and allowed claim in the amount of $368,109.52, of which $150,000.00 is an allowed secured claim (and on which costs, interest, and attorney fees may accrue). The balance of $218,109.52 is an allowed unsecured claim. Haynes’s allowed but partially secured claim consists of the full indebtedness represented by Note One — a $150,000.00 promissory note dated August 31, 2004— plus one half of the difference between $150,000.00 and $586,219.03. The automatic stay is hereby terminated and lifted to allow liquidation and collection, through foreclosure, agreement, or otherwise, of the collateral described in the Mortgage only to the extent of the $150,000.00 amount described above, plus costs, interest and a reasonable attorney fee not to exceed 10% of the $150,000.00 secured amount. Before or within thirty days after liquidation of the collateral by foreclosure, agreement, or otherwise, Haynes may file an amended proof of claim for one half of the remaining balance of the debt, which, after deduction of the $150,000.00 (but with no reduction for costs, interest, and attorney fees), should be $218,109.52. Because that balance is unsecured, no interest, costs, or attorney fees shall accrue. IT IS SO ORDERED. .Haynes’s allowed but partially secured claim consists of the full indebtedness represented by a $150,000.00 promissory note dated August 31, 2004, plus one half of the difference between $150,000.00 and $586,219.03. The balance is diminished by one-half as is required by 11 U.S.C. § 509(b)(1)(A) concerning contribution between joint obligors. The full amount of the initial $150,000.00 note is not subject to contribution between the joint guarantors as the mortgaged collateral secured the initial note itself (defined as Note One below), not merely the debtors' guaranties. Accordingly, both the lending bank (and Haynes, its assignee) as well as any other co-guarantor, including Haynes, had a contractual expectation that the guaranteed debt would be diminished by the full application of the collateral directly securing Note One. . A fourth note will be discussed below as it is historically significant to the debtors’ position. See infra note 5. . There does not appear to be any dispute concerning whether the guaranties relate to the three promissory notes in question. . Apparently, the collateral described in the Commercial Security Agreement is now valueless. . That Note Three was perhaps intended to duplicate substantially an earlier transaction does not change the fact that it did represent a substitution inclusive, in part, of Note One. At trial, Donckers suggested that it was the intent of the parties that Note Three would mirror a previous Market Foods's transaction with Chambers Bank. This earlier transaction was represented by a Promissory Note in the original principal amount of $1,250,000.00 dated May 18, 2004, Loan No. 9139, with an August 18, 2004, maturity date [the Original Note], (Defs.’ Ex. F.) Market Foods is listed as the borrower, and Donckers and Haynes, as members of the LLC, executed the Original Note. In addition to guaranties from Haynes and Donckers, the Original Note was collateral-ized by a May 18, 2004, security agreement on the tenant rebate originating from a Market Foods’s leased location in Iowa. Chambers Bank valued the leasehold collateral at $2,500,000.00, (Defs.’ Ex. E), which was sufficient to cover the Original Note. The security agreement has a cross-collateralization clause; as noted previously, the Mortgage does not. Although Note Three in many ways mirrored this earlier transaction, it does not change the fact that it did represent a substitution inclusive, in part, of Note One. Accordingly, by the express terms of Note One and the Mortgage, the collateralization survived. . A defense based on an exemption argument was abandoned at trial. . Federal Rule of Bankruptcy Procedure 7013 is mirrored by Arkansas Rule of Civil Procedure 13.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494165/	MEMORANDUM OPINION m. bruce McCullough, Bankruptcy Judge. AND NOW, this 29th day of January, 2007, upon consideration of (a) the motion by Ford Motor Credit Company (hereafter “Ford”) for approval of a particular reaffirmation agreement that it entered into with Jack Meyers, the instant debtor (hereafter “the Debtor”), whereby the Debtor proposes to reaffirm a pre-petition debt that it owes to Ford (hereafter “the Reaffirmation Agreement”),1 and (b) the Reaffirmation Agreement itself, which document was filed with the Court on November 10, 2006, at Doc. No. 11, it is hereby determined that the Court shall issue an order that DENIES AS MOOT Ford’s motion for approval of the Reaffirmation Agreement. The rationale for the Court’s decision is briefly set forth below. Ford’s motion is moot, the Court determines, because the Reaffirmation Agreement will automatically — that is, necessarily — be approved2 by virtue, and as of the date, of the entry of the order that will be entered in the instant case that grants to the Debtor a Chapter 7 discharge, which discharge order should be entered subsequent to the disposition of Ford’s motion. The Court so rules because (a) the Court can only disapprove a 86reaffirmation agreement after notice and a hearing, see 11 U.S.C.A. § 524(m)(l) (West 2006) (last sentence thereof), (b) such hearing regarding disapproval of a reaffirmation agreement must be held prior to the entry of an order that grants a discharge, see Id., (c) a reaffirmation agreement, if such a hearing is not held prior to such time, is thus necessarily — and automatically — approved as of such time, and (d) the Court, after consideration of the Reaffirmation Agreement, which consideration occurred even prior to the bringing of Ford’s motion, has determined that it will neither disapprove the Reaffirmation Agreement nor, thus, hold any type of hearing regarding the Reaffirmation Agreement. The Court also holds, as a matter of law, that it discretionarily may decide not to disapprove a reaffirmation agreement even if (a) an undue hardship presumption — as that term is defined in § 524(m)(l) — applies in a particular case with respect to such reaffirmation agreement, and (b) such presumption is not satisfactorily rebutted by a debtor’s explanation contained in Part D to such reaffirmation agreement. See In re Stillwell, 348 B.R. 578, 581 (Bankr.N.D.Okla.2006) (“If the presumption is not rebutted to the satisfaction of the Court, the Court has the discretion to not approve the reaffirmation agreement”). The Court so holds because § 524(m)(l) does not provide, where an undue hardship presumption exists regarding a reaffirmation agreement and the same has not been so rebutted, that a court must disapprove such reaffirmation agreement; instead, § 524(m)(l) merely provides that, under such circumstances, “the court may disapprove such agreement,” 11 U.S.C.A. § 524(m)(l) (emphasis added) (next to last sentence thereof). The Court interprets such discretionary language such that a court may, after its own independent review of, for instance, a debtor’s bankruptcy schedules, conclude that an undue hardship presumption is rebutted so that the respective reaffirmation agreement should not be disapproved. The Court, as set forth above, has determined that it will not disapprove the Reaffirmation Agreement, and that is regardless of whether the Debtor’s explanation contained in Part D to the Reaffirmation Agreement operates to rebut the undue hardship presumption that unquestionably exists regarding such agreement. Finally, as an aside, the Court notes that, in those instances when the Court holds a hearing regarding the disapproval or not of a reaffirmation agreement, the Court shall, at some point after such hearing, enter an order that affirmatively approves or disapproves such reaffirmation agreement. The Court concludes that it must enter an order in such instances when a hearing is held because, absent such order, one will never be able to ascertain whether the Court ultimately approved or disapproved the reaffirmation agreement in question. That one cannot ascertain the decision of the Court subsequent to such hearing absent an order follows given that, in contrast to the automatic approval of a reaffirmation agreement if a hearing is not held prior to the entry of a debtor’s discharge, a reaffirmation agreement is not automatically approved if the Court holds a hearing and then fails to disapprove such agreement before the entry of a discharge order; the preceding observation follows because, while § 524(m)(l) expressly precludes a court from holding a hearing after the entry of a discharge order, such statutory provision does not compel a court, if it timely holds a hearing, to make its decision 87to disapprove before the entry of a discharge order, see Id.3 For all of the foregoing reasons, the Court shall enter an appropriate order that denies as moot Ford’s motion for approval of the Reaffirmation Agreement. As well, and as a general matter henceforth, the Court will deny as moot any future motion by Ford or any other creditor that seeks, either in this case or in any other bankruptcy case, the affirmative approval of a reaffirmation agreement for which the Court determines that it shall not hold a hearing; frankly, the Court views such requests regarding such reaffirmation agreements as nothing more than a way to short-circuit the process that Congress has put in place for courts to deal with their judicial review of reaffirmation agreements. ORDER OF COURT AND NOW, this 29th day of January, 2007, upon consideration of the motion by Ford Motor Credit Company (hereafter “Ford”) for approval of a particular reaffirmation agreement that it entered into with Jack Meyers, the instant debtor (hereafter “the Debtor”), whereby the Debtor proposes to reaffirm a pre-petition debt that it owes to Ford (hereafter “the Reaffirmation Agreement”); and for the reasons set forth in the accompanying Memorandum Opinion of the same date, it is hereby ORDERED, ADJUDGED, AND DECREED that Ford’s motion for approval of the Reaffirmation Agreement is DENIED AS MOOT. . Ford’s motion was filed with the Court twice on December 20, 2006, at Doc. No. 15 and Doc. No. 17. . The Court notes that such approval is only to the effect that the Reaffirmation Agreement does not constitute an undue hardship and that such agreement is in the best interest of the Debtor, see 4 Collier on Bankruptcy, ¶ 524.04[2] at 524-40.1 (Bender 2006); thus, such approval says nothing about whether the other reaffirmation agreement requirements set forth in 11 U.S.C. § 524(c) have been satisfied. . Put differently, if a Court decides to disapprove a reaffirmation agreement, § 524(m)(l) requires that the Court first hold a hearing regarding such disapproval prior to the entry of a discharge order; § 524(m)(l) does not, however, require, if the Court decides to disapprove a reaffirmation agreement, that the Court, prior to the entry of a discharge order, make known — indeed even make — its decision regarding such disapproval. Therefore, if a hearing is not held prior to the entry of a discharge order, one thing automatically happens, and that is the approval of the reaffirmation agreement in question; however, if a hearing is timely held, then nothing automatically happens vis-a-vis the reaffirmation agreement in question, thus prompting the entry of a court order.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494166/	283 ORDER GRANTING DEFENDANT’S MOTION FOR REHEARING ROBERT A. MARK, Bankruptcy Judge. The Court conducted a hearing on October 31, 2006, on Defendant’s Motion for Rehearing (CP# 28). Defendant seeks reconsideration of this Court’s Final Judgment, entered on July 28, 2006 (CP# 224). For the reasons that follow, the Motion for Rehearing will be granted and the Court will enter an Amended Final Judgment. Factual Background and Procedural History 1. The Debtor/Defendant entered into a prepetition contract with Plaintiff (the “Contract”) to sell a condominium in Bay Harbor Islands, Florida (the “Condo”). 2. The sale had not closed when the Debtor filed his voluntary petition under Chapter 13 of the Bankruptcy Code on March 1, 2005. 3. The Condo was listed as homestead and scheduled as exempt on Schedule C in Debtor’s Schedules. No objections to exemptions were filed. 4. The Debtor attempted to reject the Contract as part of a Chapter 13 Plan. Plaintiffs Objection to Confirmation (CP# 11) was sustained by Visiting Judge Schermer, although no written Order appears on the docket. 5. On August 9, 2005, Debtor filed a Notice of Conversion from Chapter 13 to Chapter 7, and the Debtor received his discharge on December 13, 2005. No motions with respect to the Contract were filed during the Chapter 7 case, and the case is now closed. 6. On December 2, 2005, Plaintiff filed the Complaint commencing this proceeding. Count I alleges that Defendant breached his fiduciary duty to Plaintiff by not completing the sale and that the debt arising from that breach should be excepted from discharge under 11 U.S.C. § 523(a)(4). In Count II, Plaintiff seeks declaratory relief that the Contract is not an executory contract. Count III alleges that Plaintiffs claim for specific performance is not a claim under 11 U.S.C. § 101(5) and therefore was not discharged in this case. Count IV alleges that the Debtor’s interest in the Condo is bare legal title and therefore not property of the estate. 7. Plaintiff filed a Motion to Dismiss Count I (CP# 11). After a hearing on April 27, 2006, the Court found that the allegations in the Complaint did not establish “fiduciary capacity,” a necessary element under § 523(a)(4). Accordingly, on May 4, 2006, the Court entered its Order Granting Motion to Dismiss (Count I) (CP# 14). 8. At a Pretrial Conference on April 27, 2006, the Court also determined that the material facts were not in dispute such that the remaining counts could be resolved by summary judgment. This resulted in a May 8, 2006 Order Setting Deadline to File Motions for Summary Judgment (CP# 17) (the “Scheduling Order”). The Scheduling Order directed the parties to file and serve summary judgment motions by June 2, 2006, and scheduled a hearing on the summary judgment motions for July 6, 2006. The parties jointly moved to continue the hearing, and by Order entered on June 28, 2006 (CP# 21), the summary judgment hearing was continued to July 27, 2006. 9. At this point, the procedural history took an unusual turn. Neither party filed a motion for summary judgment, but counsel still appeared for the hearing on July 27, 2006, and were prepared to argue the legal issues. The Court decided to proceed with oral argument. 28410. Without the benefits of written memoranda, but based on the arguments presented at the July 27, 2006 hearing, the Court entered the July 28, 2006 Final Judgment which is the subject of the Motion for Rehearing. Discussion A.The Final Judgment In its Final Judgment, the Court rejected Plaintiffs argument that execution of the Contract terminated any beneficial interest of the Debtor in the Condo such that the Condo was not property of the estate when the bankruptcy case was filed. As such, Judgment was entered in favor of the Defendant on Count IV of the Complaint That portion of the Final Judgment is unaffected by this Order. Next, in its Final Judgment, the Court found that the Contract was an executory contract. However, the Court concluded that since the Condo subject of the Contract was exempt, it was not a contract which the Trustee could assume or reject under § 365. Thus, the Court found that the absence of a motion to assume the Contract within 60 days of conversion to Chapter 7 did not result in rejection under § 365(d)(1), because the Contract was not subject to assumption or rejection under § 365. Finally, addressing the discharge issue, the Final Judgment held that Plaintiffs equitable remedy of specific performance was not discharged in the Debtor’s Chapter 7 case. As such, judgment was entered in favor of the Plaintiff on Count III of the Complaint. Upon consideration of the arguments presented in the Motion for Rehearing and further analysis of the law, the Court concludes that its analysis of § 365 and § 101(5) in the Final Judgment was wrong. In addition to the cases cited by the Defendant, the Court has reviewed the well reasoned opinion of District Judge Altona-ga issued in September, 2006 thoroughly analyzing similar issues and reaching conclusions opposite to those in the Final Judgment. Matlack v. Gaul, Case No. 06-60299-CIV-ALTONAGA, September 22, 2006. A discussion of the two issues follows. B. Section 365 Applies to Contracts to Buy or Sell Exempt Property Upon further analysis, the Court finds no authority limiting § 365 to contracts involving non-exempt property. Section § 365(a) authorizes the trustee to “assume or reject any executory contract or unexpired lease of the debtor.” (emphasis added). Absent any ambiguity in the language of the statute, the Court must abide by the plain meaning of the text. Lamie v. United States Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004). Under its plain meaning, § 365 applies to all executory contracts except those specifically excluded from its reach under § 365(c). Having concluded that § 365 applies to the Contract at issue here, the Court’s Final Judgment for Plaintiff in Count II must be vacated. Pursuant to § 348(a), the August 17, 2005 Order converting this case to Chapter 7 constituted the order for relief under Chapter 7. Since the Chapter 7 trustee did not move to assume or reject the Contract within 60 days from that date, the Contract was deemed rejected under § 365(d)(1). C. Plaintiff’s Claim for Specific Performance Was a “Claim” Discharged in the Bankruptcy Case In Gaul, the district court addressed the identical issue presented here — Is an alleged right to specific performance a claim dischargeable under the Bankruptcy 285Code? This Court agrees with the analysis in Gaul, which concluded that a specific performance claim under Florida law is a “claim” under § 101(5) of the Bankruptcy Code and therefore dischargeable. Claim is defined in § 101(5) to include “the right to an equitable remedy for breach of performance if such breach gives rise to a right to payment ...” § 101(5)(B). The definition should be construed broadly. Ohio v. Kovacs, 469 U.S. 274, 279, 105 S.Ct. 705, 83 L.Ed.2d 649 (1985); Epstein v. Official Comm. Of Unsecured Creditors, 58 F.3d 1573, 1576 (11th Cir.1995). Legislative history supports the view that equitable remedies such as specific performance may be treated as claims. Section [101(5)(B)] ... is intended to cause the liquidation or estimation of contingent rights of payment for which there may be an alternative equitable remedy with the result that the equitable remedy will be susceptible to being discharged in bankruptcy. For example, in some States, a judgment for specific performance may be satisfied by an alternative right to payment in the event performance is refused; in that event, the creditor entitled to specific performance would have a ‘claim’ for purposes of a proceeding under title 11. Cong. Rec. 32393 (1978). Based upon the statute, the legislative history and the Supreme Court’s analysis in Kovacs, an equitable remedy will “give rise to a right to payment” and therefore be a “claim” under § 101(5)(B) if the payment of monetary damages is an alternative to the equitable remedy. In re Ben Franklin Hotel Associates, 186 F.3d 301, 305 (3rd Cir.1999); In re Nickels Midway Pier, LLC, 341 B.R. 486, 499 (D.N.J.2006). In Nickels, the Court analyzed New Jersey law and found that a buyer seeking specific performance of a contract to convey real estate could also seek compensatory or benefit of the bargain damages. Therefore, the Court concluded that the buyer’s claim for specific performance for breach of the real estate contract was a claim discharged in the bankruptcy case. Id. at 500. Florida law is similar leading to the same result. “Under Florida law, a vendor’s breach of a real estate contract gives rise to alternative remedies: the purchaser may (1) elect to sue in an action at law for damages suffered as a result of the breach; or (2) the purchaser may elect to sue in equity to compel specific performance of the terms of the contract.” Gaul at p. 22, citing Miller v. Rolfe, 97 So.2d 132 (Fla. 1st DCA 1957). Since the breach of the contract at issue here gave rise to a right to payment under Florida law, Plaintiff held a claim that was discharged in Defendant’s bankruptcy case. Therefore, the Court will vacate its Final Judgment in favor of Plaintiff on Count III of the Complaint and enter judgment for the Defendant. Based upon the foregoing, it is— ORDERED as follows: 1. The Motion for Rehearing is granted. 2. The Court will enter an Amended Final Judgment in favor of the Defendant. AMENDED FINAL JUDGMENT In accordance with this Court’s January 22, 2007 Order Granting Defendant’s Motion for Rehearing, it is— ORDERED AND ADJUDGED as follows: 2861. The Final Judgment entered in this proceeding on July 28, 2006 (CP # 24) is vacated. 2. Judgment is entered in favor of the Defendant and against the Plaintiff on Count II of the Complaint. The real estate contract subject of the Complaint (the “Contract”) was an executory contract deemed rejected under 11 U.S.C. § 365(d)(1). 3. Judgment is entered in favor of the Defendant and against the Plaintiff on Count III of the Complaint. Plaintiffs alleged right to specific performance of the Contract was a claim discharged in the Defendant’s bankruptcy case. 4. Judgment is entered in favor of the Defendant and against the Plaintiff on Count IV of the Complaint. The condominium subject of the Contract was property of the estate upon the filing of the case, albeit property claimed as exempt.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494168/	MEMORANDUM OPINION 1 MARY F. WALRATH, Bankruptcy Judge. Before the Court is the Motion of Integrated Water Resources, Inc. (“IWR”) for leave to amend its Complaint (the “Original Complaint”) against the IT Litigation Trust and AlixPartners LLC, its Trustee (collectively, the “Trust”) to add a breach of contract Count. For the reasons set forth below, the Court will grant the Motion. I. BACKGROUND In April 2001, IWR was a subcontractor to a prime contractor to the United States government. IWR retained IT Corporation of California as a subcontractor for the environmental remediation of government facilities located in Cape Canaveral, Florida (the “Contract”). IWR alleges that IT Corporation breached the Contract by not completing performance by June 2001. Moreover, IWR claims that IT Corporation never completed performance of the Contract and IWR ultimately was 419forced to complete the construction project itself. On January 16, 2002, the IT Group, Inc., and its subsidiaries, including IT Corporation of California (collectively, the “Debtors”) filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. On January 23, 2002, the Debtors executed an agreement with Shaw Group, Inc. (“Shaw”), whereby Shaw agreed to acquire substantially all the Debtors’ assets. On April 25, 2002, the Court entered an Order approving the sale of assets to Shaw (the “Sale Order”). On April 6, 2004, the Debtors’ chapter 11 plan was confirmed. According to the plan, the Debtors’ remaining assets were vested in the Trust. AlixPartners LLC is the current Trustee of the Trust. The Trust’s duties include pursuing all avoidance actions, liquidating the Debtors’ assets, and distributing payment to holders of allowed claims. On July 20, 2005, the Court approved a stipulation to compromise controversies (the “Stipulation”) between the Trust and IWR. The Stipulation provided, among other things, that “[njeither the [Trust] nor the Debtors have assigned any claim against IWR, nor has IWR assigned any claim against the [Trust] or the Debtors.” (Stipulation at 2, ¶ 10.) The Stipulation also contained a release clause that released IWR from all present and future claims or actions that the Trust or Debtors may have against it. (Id. at 3-4, ¶ 3.) On October 27, 2005, Shaw filed a complaint against IWR with respect to the Contract in the Superior Court of California, Los Angeles County, Central District, case number BC342091. The California Court scheduled a hearing for June 15, 2007, to determine whether that action should be dismissed so that this Court may decide the issue. On July 24, 2006, IWR filed the Original Complaint against the Trust and Shaw seeking (i) indemnification of expenses and attorney’s fees incurred in defending the California action and bringing this adversary proceeding; (ii) indemnification for any liability to Shaw; (iii) determination of IWR’s rights and duties under the Contract, the Sale Order, and the Stipulation; and (iv) injunctive relief against Shaw with respect to the pending action in California state court. On July 24, 2006, IWR also filed a Motion for preliminary injunction against Shaw seeking a stay of prosecution of the California action. On August 16, 2006, the Motion was granted (“Preliminary Injunction Order”). On September 6, 2006, the Court approved a stipulation between IWR and Shaw which extended the Preliminary Injunction Order until such time as the Court enters a further Order in the above-captioned proceeding. On September 6, 2006, the Trust filed a Motion seeking dismissal of the indemnification Count of the Complaint, as premature or unripe. On October 4, 2006, in response to the Motion to dismiss, IWR agreed to dismiss that Count without prejudice or to hold the Count in abeyance until the Court’s determination of the merits of the causes of action against Shaw. The Trust would not agree to IWR’s terms for dismissal. On January 5, 2007, IWR filed the instant Motion for leave to amend its Complaint against the Trust to add a breach of contract Count asserting that if the Contract was assigned to Shaw pursuant to the Sale Order, the Trust breached paragraph 10 and the release clause of the Stipulation. The Trust opposes the Motion. Briefing on the Motion is complete. The matter is now ripe for decision. II. JURISDICTION The Court has subject matter jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 1334 & 157(b)(1). This is a core matter. 28 U.S.C. § 157(b)(2)(A). 420III. DISCUSSION A. Standard of Review After a responsive pleading is served, a party may amend its complaint “only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.” Fed.R.Civ.P. 15(a). See also Fed. R. Bankr.P. 7015 (providing that Rule 15 is applicable to adversary proceedings). The grant or denial of leave to amend is discretionary. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). Absent “undue delay,” “bad faith or dilatory motive ... repeated failure to cure deficiencies by amendments previously allowed, undue prejudice,” and “futility,” leave to amend shall be freely given. Id. There is a general presumption in favor of granting the moving party leave to amend. Boileau v. Bethlehem Steel Corp., 730 F.2d 929, 938 (3d Cir.1984). B. Motion for Leave to Amend IWR contends that the Court should exercise its discretion and grant its Motion because none of the justifications for denial of leave to amend are present and the proposed amendment relates back to the original filing date. Foman, 371 U.S. at 182, 83 S.Ct. 227. The Trust disagrees, arguing that the proposed amendment results in undue delay, undue prejudice, and futility. 1. Undue Delay IWR argues that the Motion, filed less than six months after the filing of the Complaint, was filed without undue delay. See, e.g., Adams v. Gould, Inc., 739 F.2d 858, 868 (3d Cir.1984) (“The passage of time, without more, does not require that a motion to amend a complaint be denied; however, at some point, the delay will become ‘undue,’ placing an unwarranted burden on the court, or will become ‘prejudicial,’ placing an unfair burden on the opposing party.”). The Trust argues that IWR engaged in undue delay because the proposed amendment is requested more than one year after the commencement of the California state court action. Moreover, the Trust asserts that IWR knew of the alleged facts supporting the breach of contract claim at the time the original Complaint was filed. The Trust contends that its ability to prepare and present its case is jeopardized as a result of the delay. See, e.g., Lorenz v. CSX Corp., 1 F.3d 1406, 1414 (3d Cir.1993) (concluding that undue delay existed where a party sought amendment three years after the original complaint and two years after the first amended complaint when the moving party knew of the facts on which the proposed amendment was based at the time of the prior pleadings). Although there has been some delay, the Court does not agree that a delay of less than six months is “undue.” See, e.g., Lorenz, 1 F.3d at 1414 (finding undue delay when third amendment requested three years after original complaint); Rose Hall, Ltd. v. Chase Manhattan Overseas Banking Corp., 93 F.R.D. 858, 864 (D.Del.1982) (denying a motion to amend that was filed after a formal discovery period of sixty-five days in which depositions of twenty-one individuals were taken in six different cities and thousands of documents were produced). In this case, no discovery has taken place, no scheduling order has been entered or requested, and trial has not been scheduled. Consequently, the Court concludes that any delay was not “undue.” 2. Undue Prejudice IWR contends that the proposed amendment arises from the same factual allegations in the Original Complaint and, therefore, there is no undue prejudice because the Trust is not unfairly disadvantaged or 421deprived of its opportunity to defend against the breach of contract claim. Cuffy v. Getty Ref. & Mktg. Co., 648 F.Supp. 802, 806 (D.Del.1986) (“In the context of a [Rule] 15(a) amendment, prejudice means that the nonmoving party must show that it was unfairly disadvantaged or deprived of the opportunity to present facts or evidence which it would have offered” if the amendment was timely, (internal quotations and citations omitted)). The Trust argues that permitting amendment would cause undue prejudice because the Trust will bear the additional time and expense of defending against the breach of contract claim. See, e.g., Ross v. Houston Indep. Sch. Dist., 699 F.2d 218, 228-29 (5th Cir.1983) (denying amendment when the amendment “would add new and complex issues to a case already protracted and complicated,” would require new discovery, addition of twenty-six new parties, and pre-trial preparations and actual trial might require several years); A. Cherney Disposal Co. v. Chi. & Suburban Refuse Disposal Corp., 68 F.R.D. 383, 385-86 (N.D.Ill.1975) (finding prejudice and denying amendment where the proposed amendment was requested five years after the case was filed, required further discovery, and substantially changed the complaint). The Trust further asserts that because IWR did not substantively oppose the Trust’s Motion to dismiss, IWR conceded that it had no case against the Trust. The Trust’s argument is unpersuasive, and the cases it cites are factually distinguishable. To deny a motion to amend, the Court must conclude that the defendant will suffer “substantial or undue” prejudice. Cureton v. Nat’l Collegiate Athletic Ass’n, 252 F.3d 267, 273 (3d Cir.2001). Such a high degree of prejudice is not present in this case, “[inconvenience to a party or the strengthening of the movant’s legal position does not provide sufficient prejudice.” In re Fleming Cos., Inc., 323 B.R. 144, 148 (Bankr.D.Del.2005). In determining whether an amendment will unduly prejudice a defendant, the Court must consider whether the amendment will require new discovery, additional cost or preparation. Cureton, 252 F.3d at 273. Further, “these factors must materially impact the nonmoving party’s [ability to present its] case.” Fleming, 323 B.R. at 148 (emphasis in original). Here, neither party has engaged in discovery. Further, the Court has not entered a scheduling order and has not set a trial date. Therefore, the Trust has the ability to engage in discovery and there is adequate time for preparation of a defense to the new claim. The Trust has not demonstrated that the costs associated with preparing a defense to the breach of contract claim are excessive. Nor is the Court persuaded that IWR conceded the merits of its case against the Trust in responding to the Trust’s Motion to dismiss because IWR preserved its right to proceed against the Trust by agreeing to dismissal of its indemnification claim only without prejudice. Accordingly, the Court concludes that the amendment will not cause undue prejudice. 3. Futility The Trust argues that the proposed amendment is futile because it fails to state a breach of contract claim upon which relief may be granted. In re Alpharma Inc. Sec. Litig., 372 F.3d 137, 153 (3d Cir.2004) (stating that leave to amend will be denied if the amendment would be futile); In re Fleming Cos., Inc., 347 B.R. 163, 167-68 (Bankr.D.Del.2006) (“Futility of amendment exists when the claim or defense is not accompanied by a showing of plausibility sufficient to present a triable issue. Thus a trial court may appropriately deny a motion to amend where the amendment would not withstand a motion to dismiss.” (internal citations omitted)). 422IWR seeks to amend the Original Complaint to add the following breach of contract count: 56. Should the Court find the [Contract] was assigned to Shaw pursuant to the Sale Order, the IT Trust breached paragraphs 10 and the mutual releases of the Settlement Stipulation. 57. Plaintiff is entitled to damages for any such breach of contract. (Proposed Amended Complaint at ¶¶ 55-57.) IWR has stated a claim for breach of contract. Neither party disputes the existence of the Contract. Further, if the Court determines that the Contract was assigned to Shaw, it may also conclude that a breach of paragraph 10 and the mutual release provisions of the Stipulation occurred. Moreover, the allegation that IWR is entitled to damages if a breach of contract occurred is enough to withstand a motion to dismiss. See generally VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del.Super.Ct.2003) (noting that a statement of a claim for breach of contract must include allegations of breach of an obligation under the contract and resulting damage to the plaintiff). Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal.App.3d 1371, 1388, 272 Cal.Rptr. 387 (1990) (stating the elements of a breach of contract claim include a breach and resulting damages). Accordingly, the Court concludes that the proposed amendment is not futile. Consequently, the Court will allow IWR’s amendment. IV. CONCLUSION For the reasons set forth above, the Court will grant IWR’s Motion for leave to amend. An appropriate Order is attached. . This Opinion constitutes the findings of fact and conclusions of law of the Court pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487793/	[Cite as State v. Rance, 2022-Ohio-4125.] IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT LUCAS COUNTY State of Ohio/City of Toledo Court of Appeals No. L-21-1234 Appellee Trial Court No. CRB-21-06233 v. Giano Rance DECISION AND JUDGMENT Appellant Decided: November 18, 2022 *** David L. Toska, City of Toledo Chief Prosecuting Attorney, and Christopher D. Lawrence, Assistant Prosecuting Attorney, for appellee. Laurel A. Kendall, for appellant. *** OSOWIK, J. {¶ 1} This is an appeal from a judgment of the Toledo Municipal Court which, following a bench trial, found appellant, Giano Rance, guilty of a violation of R.C. 2903.13(A), Assault, a misdemeanor of the first degree. Appellant was then sentenced to 180 days, with all days suspended upon certain terms and conditions of probation for a period of one year. For the reasons set forth below, this court affirms the judgment of the trial court. Background {¶ 2} On July, 10, 2021, A.T. and the father of her two children, T.K. attended a gathering at his cousin’s, appellant Giano Rance, residence. A.T., T.K, appellant, and appellant’s girlfriend were all in attendance and had been drinking. According to A.T.’s testimony, she and her boyfriend got into a heated argument at some point during the gathering. During the course of the disagreement between A.T. and T. K., a fan was knocked over. Then, appellant got up from the couch angrily and closed-hand punched A.T. on the right side of her face. A.T. was knocked to the ground by the punch and testified that when she got up her ear was hot, ringing, and she could not hear. {¶ 3} A.T. went outside and called her mother, who picked her up from the home. The victim stated that she did not call the police because everyone had been drinking and she did not want to get anyone in trouble for drinking and driving. Later she went to the hospital where she was notified that her eardrum had ruptured. The nurses at the hospital called the police. Upon speaking with A.T., she told them that she was assaulted by appellant and sustained bruising on her arm. 2. Assignments of Error {¶ 4} Appellant present two assignments of error for our review: 1. Trial court erred to the prejudice of the appellant by denying the defense motion for acquittal pursuant to Crim. R. 29. 2. Appellant’s conviction for simple assault pursuant to R.C. 2903.13(A) was not supported by the manifest weight of the evidence. {¶ 5} In his first assignment of error, Rance asserts that the trial court abused its discretion by denying the defense motion for acquittal pursuant to Crim.R. 29. {¶ 6} A motion for acquittal under Crim.R. 29(A) is reviewed de novo by this court as a question of law. State v. Thompkins, 78 Ohio St.3d 380, 386-387, 678 N.E.2d 541 (1997). The motion is tested against the same standard used to determine whether a verdict is supported by sufficient evidence. State v. Tenace, 109 Ohio St.3d 255, 2006- Ohio-2417, 847 N.E.2d 386, ¶ 37; State v. Nuhfer, 6th Dist. Lucas No L–07–1125, 2009- Ohio-1474, ¶ 25. When reviewing the record of a criminal conviction for the sufficiency of the evidence, a court must assess whether the evidence was legally sufficient to support the jury verdict as a matter of law. Thompkins, supra. {¶ 7} As we stated in Nuhfer: “The court must determine whether the evidence submitted is legally sufficient to support all of the elements of the offense charged. * * * The test is, viewing the evidence in a light most favorable to the prosecution, could any 3. rational trier of fact have found the essential elements of the crime proven beyond a reasonable doubt.” Nuhfer at ¶ 34. {¶ 8} R.C. 2903.13(A) provides: No person shall knowingly cause or attempt to cause physical harm to another or to another’s unborn. {¶ 9} In determining whether a conviction is based on sufficient evidence, an appellate court does not assess whether the evidence is to be believed, but whether, if believed, the evidence against a defendant would support a conviction. State v. Toda, 6th Dist. Lucas No. L-18-1149, 2019-Ohio-4903, ¶ 31-41. {¶ 10} Appellant engages in a broad attack on the credibility of the victim. He argues that this reviewing court should infer that the origin of the bruises to the victim are from an altercation involving her boyfriend, K.T. However, that incident in the record before the trial court occurred on March 4, 2020, nearly one and one –half years before the July 10, 2021 event that is now before this court. Rance speculates that the victim must have suffered a bruise to her jaw in the 2020 incident involving K.T. and that this court should somehow infer that the assailant in the July 10, 2021 altercation was K.T., despite the absence of any evidence to support this notion. {¶ 11} To the contrary, when the Toledo Police Officer Histed responded to the hospital emergency room, A.T. was consistent in telling the officer what happened and who was responsible for the bruising and ruptured eardrum. 4. {¶ 12} Appellant argues that the testimony of the victim and the responding officer implicating him was contradictory. However, this contention calls for an evaluation of the witnesses’ credibility. In State v. Yarbrough, 95 Ohio St.3d 227, 2002-Ohio-2126, 767 N.E.2d 216, ¶ 79, the court succinctly stated “an evaluation of the witnesses’ credibility, which —as we have repeatedly pointed out—is not proper on review for evidentiary sufficiency.” {¶ 13} We will not disturb the verdict unless we determine that reasonable minds could not arrive at the conclusion reached by the trier of fact. State v. Treesh, 90 Ohio St.3d 460, 484, 739 N.E.2d 749 (2001). {¶ 14} In light of the totality of the evidence, we find that the elements of the crime were proven beyond a reasonable doubt. The victim identified Rance as the person who struck her on the side of the head causing her bruises and ruptured eardrum. R.C. 2901.22 states that “a person acts knowingly, regardless of purpose, when the person is aware that the person's conduct will probably cause a certain result or will probably be of a certain nature.” {¶ 15} A reasonable person would be cognizant of the probability of physical harm resulting from a punch to the side of the head. The bruises to A.T.’s face and ruptured eardrum evidence that she experienced physical harm as a result of the appellant’s actions. We find that reasonable minds could come to the conclusion that the 5. elements of assault were proven beyond a reasonable doubt. Appellant’s first assignment of error is found not well-taken. {¶ 16} We will now address appellant’s second assignment of error that claims his conviction was not supported by the manifest weight of the evidence. {¶ 17} At the outset, we will note that appellant’s second assignment references a conviction for resisting arrest, pursuant to R.C. 2921.33(A). Since this case has no such charge and his argument addresses the assault conviction, we shall proceed accordingly. {¶ 18} While sufficiency of the evidence examines whether the evidence is legally sufficient to support the verdict as a matter of law, the criminal manifest weight of the evidence standard addresses the evidence’s effect of inducing belief. State v. Wilson, 113 Ohio St.3d 382, 2007-Ohio-2202, 865 N.E.2d 1264, ¶ 25, citing Thompkins, 78 Ohio St.3d at 386, 678 N.E.2d 541. Under the manifest weight of the evidence standard, a reviewing court must ask the following question: whose evidence is more persuasive— the state’s or the defendant’s? Id. at ¶ 25. Although there may be legally sufficient evidence to support a judgment, it may nevertheless be against the manifest weight of the evidence. Thompkins at 387. {¶ 19} When a court of appeals reverses a judgment of a trial court on the basis that the verdict is against the weight of the evidence, the appellate court sits as a “thirteenth juror” and disagrees with the fact finder’s resolution of the conflicting testimony. Wilson at ¶ 25, quoting Thompkins at 387. In determining whether a 6. conviction is against the manifest weight of the evidence, the appellate court must review the entire record, weigh the evidence and all reasonable inferences, consider the credibility of the witnesses and determine whether, in resolving any conflicts in the evidence, the jury clearly lost its way and thereby created such a manifest miscarriage of justice that the conviction must be reversed and a new trial must be ordered. A conviction should be reversed on manifest weight grounds only in the most exceptional case in which the evidence weighs heavily against the conviction. Id. {¶ 20} Moreover, it is inappropriate for a reviewing court to interfere with factual findings of the trier of fact unless the reviewing court finds that a reasonable juror could not find the testimony of the witness to be credible. State v. Dean, 2018-Ohio-1740, 112 N.E.3d 32, ¶ 25-27 (6th Dist). {¶ 21} In conducting our analysis, we are mindful that the weight of the evidence and the credibility of the witnesses are matters primarily for the factfinder to determine. State v. Hernandez, 2018-Ohio-738, 107 N.E.3d 182, ¶ 28 (8th Dist.). The rationale behind this principle is that the trier of fact is in the best position to take into account inconsistencies, along with the witnesses’ manner and demeanor, and determine whether the witnesses’ testimonies are credible. Id. Thus, it is for the fact finder to evaluate the credibility of witnesses in light of inconsistent or contradictory testimony. {¶ 22} A defendant is not entitled to reversal on manifest weight grounds merely because certain aspects of a witness’ testimony are inconsistent or contradictory. State v. 7. Sykes, 6th Dist. Lucas No. L-21-1181, 2022-Ohio-865, ¶ 25, citing State v. Flores- Santiago, 8th Dist. Cuyahoga No. 108458, 2020-Ohio-1274, ¶ 40. {¶ 23} Rance’s arguments with respect to his manifest weight claim are the same presented in his sufficiency argument. Appellant argues that A.T. wanted to protect her boyfriend and claims this was evidenced by the victim’s statement that her boyfriend had never punched her although the affidavit during trial indicated that he had punched her the previous year. And that she did not call the police because she did not want her boyfriend, K.T. to get in trouble which should call in to question the credibility of her testimony. {¶ 24} It is the trier of fact that is charged with weighing the evidence and determining the credibility of the witnesses because the jury or judge can observe the witnesses’ demeanor, gestures, and voice inflections to weigh credibility. State v. Mims, 6th Dist. Lucas No. L-18-1166, 2019-Ohio-4615, ¶ 14. As such, we find that a reasonable trier of fact could have convicted the appellant. The victim was clearly assaulted. The victim presented medical evidence at trial of a ruptured eardrum and bruising, and stated on the record multiple times that the assailant was appellant. There were no other witnesses who were present at appellant’s house during the altercation to testify that the assailant was anyone other than appellant. Although A.T.’s testimony did include some conflicting statements, we do not believe this is adequate to overcome what 8. the fact finder, the trial court, witnessed. We find that a trier of fact could find the victim’s testimony to be credible. {¶ 25} We cannot say that this is one of the exceptional cases where the evidence weighs heavily against conviction. The verdict was premised upon multiple sources of evidence, including the victim’s testimony and that of the responding officer. {¶ 26} We find that the appellant’s second assignment of error is not well-taken. {¶ 27} The judgement of the Toledo Municipal Court is hereby affirmed. Appellant is ordered to pay the costs of this appeal pursuant to App.R. 24. Judgment affirmed. A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4. Thomas J. Osowik, J. ____________________________ JUDGE Christine E. Mayle, J. ____________________________ Gene A. Zmuda, J. JUDGE CONCUR. ____________________________ JUDGE This decision is subject to further editing by the Supreme Court of Ohio’s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.supremecourt.ohio.gov/ROD/docs/. 9.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487794/	[Cite as State v. McGowan, 2022-Ohio-4124.] IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT SANDUSKY COUNTY State of Ohio Court of Appeals No. S-20-020 Appellee Trial Court No. 19 CR 1116 v. Matthew C. McGowan DECISION AND JUDGMENT Appellant Decided: November 18, 2022 *** Beth A. Tischler, Sandusky County Prosecuting Attorney, and Alexis M. Holtz, Assistant Prosecuting Attorney, for appellee. Karin L. Coble, for appellant. *** PIETRYKOWSKI, J. {¶ 1} This case is before the court on remand from the Ohio Supreme Court. I. Facts and Procedural Background {¶ 2} Appellant, Matthew McGowan, pleaded guilty to, and was convicted by the Sandusky County Court of Common Pleas of, three counts of rape in violation of R.C. 2907.02(A)(1)(c). At sentencing the trial court ordered appellant to serve a total consecutive prison term of 30 to 35 years. Appellant appealed his convictions, raising as his sole assignment of error that “Appellant’s consecutive sentence is not supported by clear and convincing evidence in the record.” On February 12, 2021, this court affirmed appellant’s convictions in State v. McGowan, 6th Dist. Sandusky No. S-20-020, 2021- Ohio-404. {¶ 3} Thereafter, appellant filed a pro se application to reopen his direct appeal pursuant to App.R. 26(B). As part of his application to reopen, appellant argued that his appellate counsel was ineffective for failing to challenge the constitutionality of his indefinite prison sentence imposed under the Reagan Tokes law, R.C. 2967.271. On August 6, 2021, this court denied appellant’s application to reopen, holding that appellate counsel was not ineffective because a challenge to the Reagan Tokes law would have been moot in accordance with our decision in State v. Maddox, 6th Dist. Lucas No. L-19- 1253, 2020-Ohio-4702, ¶ 14. {¶ 4} Appellant appealed our August 6, 2021 denial of his application to reopen to the Ohio Supreme Court, which accepted review, and held the case for the decision in State v. Maddox. On April 27, 2022, the Ohio Supreme Court released its decision in State v. Maddox, Slip Opinion No. 2022-Ohio-764, holding that constitutional challenges to the Reagan Tokes law were ripe for review. Thus, the Ohio Supreme Court remanded the August 6, 2021 denial of appellant’s application to reopen to this court for 2. consideration of appellant’s argument that appellate counsel was ineffective for failing to raise the issue of the constitutionality of his sentence. II. Analysis {¶ 5} In order to succeed on an App.R. 26(B) application for reopening, appellant must demonstrate that a genuine issue exists as to whether his appellate counsel was ineffective. App.R. 26(B)(5). To do so, appellant must satisfy the two-prong test set forth in Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). State v. Were, 120 Ohio St.3d 85, 2008-Ohio-5277, 896 N.E.2d 699, ¶ 10. That is, he “must prove that his counsel [was] deficient for failing to raise the issues he now presents and that there was a reasonable probability of success had he presented those claims on appeal.” Id. at ¶ 11, quoting State v. Sheppard, 91 Ohio St.3d 329, 744 N.E.2d 770 (2001). {¶ 6} In his application to reopen, appellant alleges that his appellate counsel was ineffective for failing to argue that the Reagan Tokes law is unconstitutional under both the United States and Ohio Constitutions. {¶ 7} At the outset, we note that this court has now addressed the issue of the constitutionality of the Reagan Tokes law on several occasions, and after thorough review, has held that the law is constitutional. See, e.g., State v. Stenson, 2022-Ohio- 2072, 190 N.E.3d 1240 (6th Dist.); State v. Eaton, 2022-Ohio-2432, 192 N.E.3d 1236 (6th Dist.). 3. {¶ 8} Appellant, however, raises a new argument not addressed by our previous decisions. Specifically, appellant argues that the law violates due process because the Ohio Department of Rehabilitation and Corrections (“ODRC”) has a financial interest in him remaining a prisoner, and thus it will not be a fair and impartial adjudicator of his parole hearing. {¶ 9} “The Fifth and Fourteenth Amendments to the U.S. Constitution and Article I, Section 16 of the Ohio Constitution guarantee procedural due process.” Stenson at ¶ 24. “If due process applies, the question becomes what process is due.” Id., citing Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972). “[D]ue process is flexible and calls for such procedural protections as the particular situation demands.” Id., quoting Morrissey at 481. For purposes of our analysis in this case, we will presume that the level of process required in a Reagan Tokes hearing includes that the decision maker does not have a “direct, personal, substantial pecuniary interest in reaching a conclusion.” Tumey v. Ohio, 273 U.S. 510, 523, 47 S.Ct. 437, 71 L.Ed. 749 (1927) (“[I]t certainly violates the Fourteenth Amendment and deprives a defendant in a criminal case of due process of law to subject his liberty or property to the judgment of a court, the judge of which has a direct, personal, substantial pecuniary interest in reaching a conclusion against him in his case.”). {¶ 10} In support of his argument, appellant cites Caliste v. Cantrell, 937 F.3d 525 (5th Cir.2019). In Caliste, the Fifth Circuit held that a criminal court’s practice of using 4. money generated from commercial surety bond fees to pay judicial expenses created a conflict of interest that violated the due process clause. In that case, under Louisiana law, 1.8 percent of a commercial surety bond’s value is deposited in the court’s Judicial Expense Fund. Id. at 526. The Judicial Expense fund, which was administered by the judges, did not pay judges’ salaries, but it did pay the salaries of staff, such as secretaries, law clerks, and court reporters. The fund also paid for office supplies, travel, and other costs. Id. The bond fees contributed between 20 and 25 percent of the funding for the Judicial Expense fund. Id. The court found that while the judges making the bail decisions did not directly receive any money, they did receive substantial nonmonetary benefits such as the ability to hire and pay the judges’ staff. Id. at 530. Ultimately, the court held that “[b]ecause he must manage his chambers to perform the judicial tasks the voters elected him to do, [the judge] has a direct and personal interest in the fiscal health of the public institution that benefits from the fees his court generates and that he also helps allocate. * * * The dual role thus may make the magistrate ‘partisan to maintain the high level of contribution’ from the bond fees.” Id. at 531-532, quoting Ward v. Village of Monroeville, Ohio, 409 U.S. 57, 60, 93 S.Ct. 80, 34 L.Ed.2d 267 (1972). {¶ 11} We find the present situation to be distinguishable from Caliste in that there is no direct monetary benefit associated with the decision whether to hold a prisoner beyond his or her presumed release date. Consequently, the decisions of ODRC at Reagan Tokes hearings do not result in direct contributions to a fund that it then 5. administers for its own benefit. Thus, we find that ODRC does not have a direct, personal, substantial pecuniary interest in reaching a conclusion against the release of a prisoner. As a result, we hold that the Reagan Tokes law does not create a conflict of interest that violates appellant’s due process rights. III. Conclusion {¶ 12} Because appellant has not demonstrated a reasonable probability that his proposed assignment of error would have been successful on appeal, we hold that his claim of ineffective assistance of appellate counsel must fail. Accordingly, appellant’s App.R. 26(B) application to reopen his appeal is not well-taken, and is hereby denied. The costs associated with this motion are assessed to appellant in accordance with App.R. 24. A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4. Mark L. Pietrykowski, J. ____________________________ JUDGE Thomas J. Osowik, J. ____________________________ Gene A. Zmuda, J. JUDGE CONCUR. ____________________________ JUDGE This decision is subject to further editing by the Supreme Court of Ohio’s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.supremecourt.ohio.gov/ROD/docs/. 6.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487795/	[Cite as State v. Coley, 2022-Ohio-4123.] IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT SANDUSKY COUNTY State of Ohio/City of Fremont Court of Appeals No. S-22-009 Appellee Trial Court No. 21CRB581A v. Lawrence Coley DECISION AND JUDGMENT Appellant Decided: November 18, 2022 *** James F. Melle, City of Fremont Prosecuting Attorney, for appellee. Brett A. Klimkowsky, for appellant. *** PIETRYKOWSKI, J. {¶ 1} Appellant, Lawrence L. Coley, appeals from a judgment entered by the Fremont Municipal Court, sentencing him to serve 180 days in the Sandusky County Jail. For the reasons that follow, we affirm the judgment of the trial court. Statement of the Case and the Facts {¶ 2} On March 18, 2022, appellant was tried by a jury on one count of aggravated menacing, in violation of R.C. 2903.21(A), a misdemeanor of the first degree; one count of obstructing official business, in violation of R.C. 2921.31(A), a misdemeanor of the second degree; and one count of resisting arrest, in violation of R.C. 2921.33(A), a misdemeanor of the second degree. {¶ 3} At trial, evidence of the following was adduced. On August 19, 2021, Victim #2 (“V2”), who was the driver of a pickup truck stopped in the carryout lane of a Marathon convenience store, asked the clerk to tell appellant, who was standing at the cash register inside the carryout, that appellant was a bitch. The clerk -- thinking that the statement from the other patron was a joke -- told appellant that V2 had called him a bitch. Appellant responded by running out of the convenience store to confront the instigator. Appellant approached the truck and spat at V2 and V2’s passenger, Victim #1 (“V1”). V1 exited the vehicle, reached into the bed of the truck, and momentarily grasped a fishing pole. He also took off his shirt, as if in preparation for a fight. Appellant, who had a license to carry a firearm, raced back to his own vehicle and grabbed a 9mm Ruger. Gun in hand, appellant ran back to the area where V1 and V2 were located and pointed the firearm at the two victims. A bystander who witnessed the situation unfold called 911. 2. {¶ 4} V1 was the first witness to testify for the state. He testified that on August 19, 2021, he was seated in the passenger seat of the pickup truck when his cousin, V2, went through the Marathon carryout and told the clerk to inform appellant that “he’s a little bitch.” According to V1, appellant had dated V2’s girlfriend’s sister. V1 testified that when he and V2 were trying to leave the premises of the Marathon, appellant ran up to the truck and asked, “What did you say?” When V2 answered, appellant said “fuck you” and spat through the window. V1 testified that he exited the truck, put his hand on the fishing pole, and then removed his shirt, because appellant was acting in a threatening manner. {¶ 5} Video of the altercation was played for the jury. V1 testified that appellant walked up to the passenger side of the vehicle and demanded that V1 “get out of the truck,” even though V1 had nothing to do with the altercation. V1 testified that appellant eventually obtained and drew a gun, and pointed it at first at V1’s chest and then at V2’s head. V1 testified that he was scared because appellant “had his finger on the trigger and he was pointing it in my cousin’s face, and he’s like, say somethin’ now, bitch, talkin’ all that shit, say somethin’ now, fuckin’ pussy, cracker, honkies, everything,” and that appellant stated, “I’ll blow your fuckin’ head off.” V1 testified that neither he nor V2 called appellant a racial name. V1 testified that after appellant walked away from their vehicle, V1 and V2 did not immediately leave the Marathon premises, because they were debating whether they should wait for police to arrive. 3. {¶ 6} The next witness to testify was V2. V2 testified that he jokingly told the clerk of the Marathon station to inform appellant that “he’s a bitch.” V2 testified about the altercation and noted that there was a laser sight on appellant’s firearm. He testified that he was scared for his life, but later informed investigating law enforcement agents that he did not want to press charges. V2 stated that he knows appellant through “basically my sister-in-law,” and that she and appellant “used to go out.” V2 testified that V1 was “furious” and “ready to fight” because he had been spat on, and that V1 was “boisterous and loud and cursing and so forth * * .” V2 testified that neither he nor V1 ever said anything of a racial nature to appellant. V2 testified that appellant called him a “white cracker, piece of shit, whatever, you know * .” {¶ 7} Dianna Nevius, who was the third witness to testify, stated that she witnessed the altercation while she was getting gas for her vehicle, and that she called the police. She testified that when she saw appellant with the gun she was shocked, and that she feared for the people in the truck and for the other people who happened to be present on the Marathon premises. {¶ 8} The fourth witness to testify, Lataya Domanski, was the clerk at the Marathon convenience store who had relayed the “joke” from V2 to appellant. Domanski testified that after the incident, she immediately quit her job and did not even give her employer two weeks’ notice. 4. {¶ 9} Fremont Police officer Vincent Bocardo, who was one of the officers who was dispatched to the scene, was the fifth witness to testify. He stated that when he attempted to search appellant, appellant “wound up with his elbow” and gave Bocardo a “forceful shot” to his chest that knocked Bocardo’s body camera to the ground. Bocardo testified that he “started wrestling with” appellant and that he and other officers tried to place appellant in handcuffs, but that appellant would not allow it. At that point, Bocardo determined that appellant was resisting arrest. {¶ 10} Fremont Police sergeant Scott Rosenberger, the sixth witness to testify, stated that while Officer Bocardo was checking to make sure that appellant was not carrying a gun, appellant spun around, preventing the officer from patting him down. {¶ 11} The seventh witness to testify, Fremont Police patrolman Christian Ortolani, was the person who transported appellant to jail. According to Patrolman Ortolani, appellant, while discussing the incident that had just taken place with police, stated that he had “blacked out” and that “his adrenalin was going.” {¶ 12} Fremont Police sergeant Nancy Belinda Rosenberger, the eighth witness to testify, stated that she heard appellant yell at Bocardo and saw appellant “kick back his elbow,” and that, because appellant was not being compliant, three officers, including herself, “ended up basically struggling with [appellant].” She testified that police had given him warnings, but that, ultimately, three officers were required to take appellant to the ground. After this witness’s testimony, the state rested its case-in-chief. 5. {¶ 13} The defense called appellant to testify. Appellant stated at the outset that he had a license to carry a concealed pistol. He testified that when he left the convenience store to investigate the reason for the name-calling, the truck carrying V2 and V1 lunged forward as if to hit him, and then the passengers called him a “bitch ass n*” and threatened to “fuck [him] up.” Appellant stated that he gets mad “any time two white men in a truck call [him] a n and say they’re gonna fuck [him] up,” so he grabbed his firearm, pointed it at V2 and told him, “[C]all me n** now, call me a bitch now, fuck me up now.” According to appellant, V2 just looked at him and did not say anything, while clerk Lataya Domanski, who was standing next to appellant, kept saying, “no, no, no.” Appellant stated that Domanski’s words “cleared [his] head a little bit,” and that he went back to his vehicle, and put the gun back in the holster and under the seat. Even at this point, he stated, he was continuing to exchange words with the victims. He stated that he was glad to learn that police were on the way, so he could “file a report.” {¶ 14} Appellant stated that he went back into the store to wait for the police and became “irritated” when Officer Bocardo entered the store and immediately asked appellant whether he had pulled a gun on someone. When Bocardo asked appellant whether he currently had a gun on his person, appellant answered that he did not and then told Bocardo that Bocardo was welcome to search him. Appellant testified that after Bocardo patted him down, Bocardo grabbed his wrist “really hard,” and that it hurt, causing him to “snatch away” from Bocardo. 6. {¶ 15} Appellant testified that he suffered bruises and injuries due to the officers’ behavior. {¶ 16} At the conclusion of the trial, the trial court instructed the jury on the affirmative defense of self-defense, appropriately advising that it was the state’s burden to prove that appellant’s use of self-defense was not justified. Ultimately, the jury found appellant guilty of the charge for aggravated menacing, but not guilty of the charges for obstructing official business and resisting arrest. {¶ 17} At sentencing, the court considered appellant’s prior record and listened to statements by the state, defense counsel, and appellant. The state, seeking a more severe sentence than was ultimately imposed, argued that the trial court should “send a message in the City of Fremont” due to “the new law that’s coming into effect about not having to even have a CCW * * .” {¶ 18} The court, addressing appellant, stated as follows: Mr. Coley, the Court does have to look at certain factors when the Court imposes sentence in any matter. Those factors are in the Revised Code 2929.21 and [2929.22].1 I have considered those factors. I’ve looked at a lot of different things. I will say, at the beginning, three things stick out in my mind as a result of observing this trial from up here. 1 Although the transcript incorrectly reads “2921.22,” the sentencing journal entry provides that the court properly considered the factors set forth in R.C. 2929.22. 7. First and foremost, it is the images of Lataya Domanski stepping between you and the occupants in that car while this whole thing was going on, putting herself in danger. I couldn’t believe that she did that. The second thing that strikes me from watching all that video is, secondly, with Ms. Domanski when she stepped between the little boy on the bike and ushered him out of the situation and what was going on there. Those two didn’t ask to be involved in this. They didn’t call anybody names. They were just working in there, getting candy, and those people were both in harm’s way as a result of your actions. And the second thing is that Diannaa Nevius who testified, and I can see her vividly in her tie-dyed shirt, crouching behind her vehicle after she had gassed up, not knowing if she was going to be shot or in the middle of the crossfire or what, but she clearly knew that there was a gun, and she was scared, and she didn’t ask to be put in that situation either. And the third thing was the rage and the anger that you displayed during the course of this in your language, in your behavior to law enforcement and to, I mean, Officer Rosenberg was trying to calm you down, and I’m not going to repeat – you know what you said. We’ve heard it on the video. I was struck by your rage, your rage after law enforcement was involved. 8. The jury has spoken in this matter. The jury has decided, after hearing your testimony and all the testimony of the witnesses, that they have found you guilty of this offense. You need to be held to a higher standard. You went and took a class and had a CCW and they educated you on how to handle weapons, what to do with weapons, and I hold you to a higher standard than anybody else because you took it upon yourself to be educated and know how to handle a weapon, and you chose on August 19th to go back to your vehicle and get that weapon and bring it out, and not only bring it out, but placed a dot on the tracer on the chest of those individuals. * * You obviously don’t know what you’re doing with a firearm because you pulled a firearm out and pointed it at somebody in a parking lot with cars and people because of words. This all started because of words. When your attorney says that [V2] doesn’t think this was a big deal, there’s more victims than just * * * [V2]. * * * [T]he victims are the people that were there getting gas. The victims are the public. The victims are law enforcement. The victims are anyone else that were there that day when that happened and society in general. I have an obligation to protect the 9. public and to protect them from future crime by you and punish you and this is what I’m balancing here. I mean, I’m looking at the impact of [V2], which it sounds like that’s a daily occurrence with them. I don’t know, they argue, they fight, they take their shirts off, they scream and yell at each other, but you engaged in it also and you could – you chose to engage him and now you’re sitting here. So I’m looking at that impact, which I don’t factor very highly. I look at the need to change your behavior. Can we change your behavior. First and foremost, you’re going to have to get some type of anger assessment because there’s something deep brewing inside of you. I watched you numerous times and the anger and the names that you called people, you know, I was very struck by that. The Court also has to find can you be rehabilitated. I think you can. [The Prosecutor’s] asking for 120 days in jail. I think that’s severe, but that being said, I think that a jail sentence is warranted because I think it would demean the seriousness of your conduct if there was [sic] jail. I mean, this isn’t your first offense with law enforcement. This isn’t your first conviction. You had a violation of a protection order in 2016. You didn’t see any jail time. You were given probation. 10. 2012 you had an assault, offense of violence, 10 days in jail, 10 days suspended. 2018, disorderly conduct. You’ve been involved in the criminal justice system. You’ve been given opportunities without jail and you’re back again at age 47. I just feel the nature and the circumstance of this crime warranted – warrants jail, but I don’t feel that you are not amenable to probation. (Emphasis added.) {¶ 19} Following this statement, the court went on to sentence appellant to serve 180 days in the Sandusky County Jail, with 120 of the days ordered suspended. Appellant was given credit for two days in jail that he had already served, and he was informed that he was eligible for good time credit on his 60-day sentence. Finally, the trial court ordered a three-year period of probation2. Appellant was immediately remanded into custody to begin his jail sentence. 2 Prior to amendment of R.C. 2951.02 and enactment of R.C. 2929.25 under H.B. 490, effective in 2003, the term “probation” was used when referring to suspended sentences for misdemeanors. See former R.C. 2951.02. With the statutory change, the term “community control” applies. See R.C. 2929.25. We use the term “probation” here, as this was the term that was used by the court below. 11. Assignment of Error {¶ 20} Appellant asserts the following assignment of error on appeal: I. The Trial Court’s sentence of Lawrence L. Coley (“Appellant”) violates the Due Process Clause of the Fourteenth Amendment to the United States Constitution insofar as the Trial Court based its original sentence in part upon Appellant electing to exercise Appellant’s statutory right to obtain a license to carry a concealed firearm. Analysis {¶ 21} Appellant argues in his first assignment of error that his sentence is in violation of the Due Process Clause of the Fourteenth Amendment to the United States Constitution, because it is based in part on the trial court’s “animus” towards appellant “for electing to exercise [his] statutory right to obtain a license to carry a concealed firearm.” Specifically, appellant argues that “[i]t was legally wrong for the Trial Court to hold Appellant to a ‘higher standard’ for exercising his statutory right to obtain a license to carry a concealed firearm than someone who did what Appellant was alleged to have done to Appellant’s purported victims, but without first having obtained a similar license.” Thus, the question before us is whether appellant’s sentence is contrary to law because the trial court vindictively imposed a sentence in retaliation for appellant’s exercise of his right to carry a concealed weapon. 12. {¶ 22} The law is clear that “‘[t]o punish a person because he has done what the law plainly allows him to do is a due process violation of the most basic sort * * ,’” State v. Rahab, 150 Ohio St.3d 152, 2017-Ohio-1401, 80 N.E.3d 431, ¶ 8, citing Bordenkircher v. Hayes, 434 U.S. 357, 363, 98 S.Ct. 663, 54 L.Ed.2d 604 (1978). (Additional citation omitted.) {¶ 23} “Ordinarily, appellate courts defer to trial courts’ broad discretion in making sentencing decisions.” Rahab at ¶ 10. However, courts have reversed sentences that are based upon vindictiveness, whether “presumed” or “actual.” Courts have found it necessary to “presume” vindictiveness in only a very narrow set of cases in which action detrimental to the defendant was taken after exercise of a legal right. See Rahab at ¶12-13; see, e.g., North Carolina v. Pearce, 395 U.S. 711, 738, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969) (where defendant had successfully appealed and then, upon retrial and conviction for the same offense, received a harsher sentence, a presumption of vindictiveness arose); but see Colten v. Kentucky, 407 U.S. 104, 116-118, 92 S.Ct. 1953, 32 L.Ed.2d 584 (1972) (presumption not extended to situations in which a defendant is sentenced more harshly after seeking a de novo trial with a superior court in a two-tier system). “So narrow is the application of the * * presumption that it has been referred to as an ‘oddity’ and ‘an anomaly in our law, which ordinarily “‘presum[es] * * * honesty and integrity in those serving as adjudicators.’” Id. at ¶ 13, citing Plumley v. Austin, 547 13. U.S. 1127, 135 S.Ct. 828, 190 L.Ed.2d 923 (2015) (Thomas, J., dissenting from denial of certiorari). (Additional citations omitted.) {¶ 24} In determining whether to apply such a presumption, a court must consider whether there is a “‘reasonable likelihood’ * * * that [a] sentence is the product of actual vindictiveness on the part of the sentencing authority.” Id. at ¶ 14, quoting Alabama v. Smith, 490 U.S. 794. 799. 109 S.Ct. 2201, 104 L.Ed.2d 865 (1989). Applying this standard to the instant case, we do not find that there is a reasonable likelihood that a sentenced imposed on an individual licensed to carry a concealed handgun will be the product of vindictiveness. We, therefore, decline to apply a presumption of vindictiveness, and instead conclude that appellant must prove actual vindictiveness. See id. at ¶ 18 (where court does not apply a presumption of vindictiveness, the appellant is required to prove actual vindictiveness). {¶ 25} In determining whether there is evidence of actual vindictiveness, we must review the entire record, including the trial court’s statements, the evidence adduced at trial, and the information presented during the sentencing hearing. See State v. Rahab, 150 Ohio St.3d 152, 2017-Ohio-1401, 80 N.E.3d 431, ¶ 19. We will reverse the sentence only if there is clear and convincing evidence that the sentence is contrary to law because it was imposed as a result of actual vindictiveness on the part of the trial court. See id. {¶ 26} As a general rule, a trial court imposing a sentence for a misdemeanor offense must consider the purposes and principles of misdemeanor sentencing as set forth 14. in R.C. 2929.21, as well as the sentencing factors set forth in R.C. 2929.22. Under R.C. 2929.21, a trial court “shall be guided by the overriding purposes of misdemeanor sentencing,” which are “to protect the public from future crime by the offender” and “to punish the offender.” To achieve these purposes, R.C. 2929.21 provides that a trial court “shall consider the impact of the offense upon the victim and the need for changing an offender’s behavior, rehabilitating the offender, and making restitution to the victim * * .” “[W]hen a misdemeanor sentence is imposed within the statutory limits, a reviewing court will presume that the judge followed the statutes, absent evidence to the contrary.” State v. Rivera, 6th Dist. Wood Nos. WD-19-085, WD-19-086, 2021-Ohio-1343, ¶ 19. {¶ 27} Here, there is no question that the trial court considered the appropriate sentencing criteria -- including the purposes of protecting of the public from future crime by the offender and punishing the offender and how to achieve those purposes -- and, further, imposed appellant’s sentence within applicable statutory limits. {¶ 28} As evidence that the trial court acted vindictively, appellant points to that portion of the sentencing transcript wherein the trial court stated: You need to be held to a higher standard. You went and took a class and had a CCW and they educated you on how to handle weapons, what to do with weapons, and I hold you to a higher standard than anybody else because you took it upon yourself to be educated and know how to handle a weapon * *. 15. {¶ 29} Here, the judge was correct when he told appellant during sentencing that because appellant had taken a class on how to handle a firearm, he should have known that the circumstances of this case, which involved a mere exchange of words, did not warrant his brandishing a weapon at all, let alone in public, on a business property full of innocent bystanders. Thus, we find that appellant was punished, not for having the CCW, but for ignoring information that happened to come with, and was known to have been imparted to appellant, during appellant’s CCW training. In this, there is no evidence to suggest that the trial court acted at all vindictively. {¶ 30} Though the trial court’s words could have been more artfully articulated, a thorough review of the record convinces us that the court sentenced appellant, not as the result of vindictiveness, but rather on the evidence of the impact that appellant’s crime had on the public, appellant’s prior record – which included a violation of a protective order, an conviction for assault, and a conviction for disorderly conduct – and appellant’s intense level of anger, as perceived by the trial court. Accordingly, appellant’s assignment of error is found not well-taken. {¶ 31} For all of the foregoing reasons, the judgment of the Fremont Municipal Court is affirmed. Appellant is ordered to pay the costs of this appeal pursuant to App.R. 24. Judgment affirmed. 16. State of Ohio/City of Fremont v. Lawrence Coley S-22-009 A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4. Mark L. Pietrykowski, J. ____________________________ JUDGE Gene A. Zmuda, J. ____________________________ Myron C. Duhart, P.J. JUDGE CONCUR. ____________________________ JUDGE This decision is subject to further editing by the Supreme Court of Ohio’s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.supremecourt.ohio.gov/ROD/docs/. 17.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487797/	No. 21-0456 – State of West Virginia v. Alexander Paul Delorenzo FILED November 18, 2022 EDYTHE NASH GAISER, CLERK SUPREME COURT OF APPEALS WOOTON, Justice, dissenting, joined by Chief Justice Hutchison: OF WEST VIRGINIA I primarily take issue with the majority’s failure to recognize the obvious: that the circuit court’s refusal to allow the petitioner’s expert witness, Michael J. Marshall, Ph.D., to testify as to his Asperger’s Syndrome Disorder (“ASD”) gutted the petitioner’s ability to advance his sole defense, lack of intent, thereby violating his constitutional right to a fair trial. I also disapprove of the majority’s new syllabus point three, which was created – in the complete absence of any law to support it – simply as a means to justify the circuit court’s admonishments directed at the petitioner during the course of his testimony. For these reasons, I respectfully dissent. A fundamental component of the due process guarantees enumerated in article III, section 14 of the West Virginia Constitution is that “a trial judge may not make an evidentiary ruling which deprives a criminal defendant of certain rights, such as the right . . . to offer testimony in support of his or her defense[.]” State v. Jenkins, 195 W.Va. 620, 628, 466 S.E.2d 471, 479 (1995); see also State v. Whitt, 220 W. Va. 685, 649 S.E.2d 258 (2007), modified on other grounds by State v. Herbert, 234 W. Va. 576, 767 S.E.2d 471 (2014). 1 In Whitt, we explained that 1 In Herbert, this Court held that 1 The right to offer the testimony of witnesses, and to compel their attendance, if necessary, is in plain terms the right to present the defendant’s version of the facts as well as the prosecution’s to the jury so it may decide where the truth lies. Just as an accused has the right to confront the prosecution’s witnesses for the purpose of challenging their testimony, he has the right to present his own witnesses to establish a defense. This right is a fundamental element of due process of law. Id. at 691, 649 S.E.2d at 264 (quoting Washington v. Texas, 388 U.S. 14, 19 (1967)). In State v. Guthrie, 205 W. Va. 326, 518 S.E.2d 83 (1999), where certain evidence had been refused on the ground that its admission would violate the rape shield statute, W. Va. Code § 61-8B-11 (2020), we formulated the following test: 2 in a criminal trial, when a non-party witness intends to invoke the constitutional privilege against self-incrimination, the trial court shall require the witness to invoke the privilege in the presence of the jury. The constitutional privilege against self- incrimination may only be invoked when a witness is asked a potentially incriminating question. To the extent [Whitt] is inconsistent with this holding, it is hereby modified.” 234 W. Va. at 584, 767 S.E.2d at 479, & Syl. Pt. 2. 2 “The Guthrie test was developed under the rape shield law that existed prior to the adoption of [West Virginia Rule of Evidence] Rule 412 in 2014. The test, however, still is workable for a constitutional challenge under Rule 412(b)(1)(D).” State ex rel. Harvey v. Yoder, 239 W. Va. 781, 786 n.9, 806 S.E.2d 437, 442 n.9 (2017) (citing State v. Timothy C., 237 W. Va. 435, 444, 787 S.E.2d 888, 897 (2016)). 2 The test used to determine whether a trial court’s exclusion of proffered evidence under our rape shield law violated a defendant’s due process right to a fair trial is (1) whether that testimony was relevant; (2) whether the probative value of the evidence outweighed its prejudicial effect; and (3) whether the State’s compelling interests in excluding the evidence outweighed the defendant’s right to present relevant evidence supportive of his or her defense. Under this test, we will reverse a trial court’s ruling only if there has been a clear abuse of discretion. Guthrie, 205 W. Va. at 330, 518 S.E.2d at 87, Syl. Pt. 6. In the instant case, the appendix record – albeit incomplete, as the majority notes – is sufficient to demonstrate that the proposed testimony of the petitioner’s expert witness, Dr. Marshall, was not only relevant but was critical to his defense; 3 that its probative value outweighed any prejudice that the State might assert; 4 and that the State had no compelling interests in excluding this evidence. Therefore, I would find that the circuit court abused its discretion and was clearly wrong 5 in excluding the expert’s testimony, and that the petitioner was thereby deprived of his right to a fair trial. See W. Va. R. Evid. 401 (“Evidence is relevant if: (a) it has any tendency to make 3 a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.”); see also W. Va. R. Evid. 402 (“Relevant evidence is admissible . . . .”) See W. Va. R. Evid. 403 (“The court may exclude relevant evidence if its probative 4 value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.”). 5 “While ordinarily rulings on the admissibility of evidence are largely within the trial judge’s sound discretion, a trial judge may not make an evidentiary ruling which deprives a criminal defendant of certain rights, such as the right . . . to offer 3 Relevance. The petitioner was charged with two violations of West Virginia Code section 61-8C-3(a) (2020), which provides that “[a]ny person who, knowingly and willfully, sends or causes to be sent or distributes, exhibits, possesses, electronically accesses with intent to view or displays or transports any material visually portraying a minor engaged in any sexually explicit conduct is guilty of a felony.” (Emphasis added). Dr. Marshall’s testimony was relevant to advance the petitioner’s defense that he did not possess the requisite intent and to provide an explanation for the petitioner’s behavior both inside and outside the courtroom. See text infra. Critically, the petitioner was not arguing that he was incapable of formulating intent; rather, he was asserting that he did not in fact intend to commit the charged offenses. In this regard, a review of the trial transcript demonstrates beyond question that lack of intent was not just a defense, or even a key defense; it was the petitioner’s sole defense. Further, any argument that Dr. Marshall’s testimony about ASD was irrelevant to the petitioner’s defense is belied by the fact that the circuit court permitted the petitioner’s father and two friends to testify about his diagnosis and its manifestations. Although this lay testimony was insufficient to ameliorate the prejudice resulting from the testimony in support of his or her defense.” Jenkins, 195 W. Va. at 621-22, 466 S.E.2d at 472-73, Syl. Pt. 3, in part. 4 court’s exclusion of expert testimony on the subject, see text infra, it demonstrates that any argument as to relevance is nothing more than an after-the-fact attempt to justify the exclusion of Dr. Marshall’s crucial testimony. Prejudice. The State has no claim of prejudice that would result from the admission of Dr. Marshall’s testimony other than the vastly overused, and wholly speculative, possibility of “jury confusion.” I can conceive of no reason to believe that a West Virginia jury is incapable of listening to expert testimony and then sorting out the wheat from the chaff, in consultation with one another and guided by the instructions of the court. See, e.g., Gentry v. Mangum, 195 W. Va. 512, 525–26, 466 S.E.2d 171, 184–85 (1995) (“‘Conventional devices’ like vigorous cross-examination, careful instructions on the burden of proof, and rebuttal evidence, may be more appropriate instead of the ‘wholesale exclusion’ of expert testimony under Rule 702.”) (citation omitted). Compelling interest. The State does not argue that it has a compelling interest in excluding the testimony, as admission of Dr. Marshall’s testimony would not in any way cause harm to victims or witnesses. Indeed, the only possible harm that could have resulted from the testimony was to the State’s chance of obtaining a conviction. To this point, I reiterate this Court’s pronouncement of “the universally recognized principle that 5 a prosecutor’s duty is to obtain justice and not simply to convict.” Nicholas v. Sammons, 178 W. Va. 631, 632, 363 S.E.2d 516, 518 (1987). 6 Although the State argues, and the majority accepts, various rationales for the circuit court’s decision to exclude Dr. Marshall’s testimony, it is clear from the appendix record that the court seized on one sentence from one of the expert’s reports, which stated that because of the petitioner’s Asperger’s Syndrome Disorder (“ASD”) and Obsessive Compulsive Disorder (“OCD”) he would tend to “hyper-focus on a topic he is motivated to investigate . . . with a lack of appreciating whether something is right or wrong[,]” 7 as indicating that the petitioner was attempting to mount a diminished capacity defense. 8 However, the petitioner never sought to advance a diminished capacity defense 6 In Nicholas, we cited the United States Supreme Court’s famous pronouncement that a prosecuting attorney is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done. As such, he is in a peculiar and very definite sense the servant of the law, the twofold aim of which is that guilt shall not escape or innocence suffer. 178 W. Va. at 632, 363 S.E.2d at 518 (quoting Berger v. United States, 295 U.S. 78, 88 (1935)). 7 The emphasis is that of the circuit court, not the expert. 8 “The diminished capacity defense is available in West Virginia to permit a defendant to introduce expert testimony regarding a mental disease or defect that rendered the defendant incapable, at the time the crime was committed, of forming a mental state 6 through Dr. Marshall’s testimony; indeed, he admitted that he knew right from wrong. As defense counsel explained, Dr. Marshall would testify not that the petitioner lacked capacity to form intent (to view the photos in question), but that the petitioner didn’t in fact have such intent because his hyper-focused mission was to plumb the depths of the dark web, not to find and view pornographic images. Defense counsel further explained that Dr. Marshall’s testimony would give the jury a context for evaluating his character traits and credibility as well as “assessing his subjective perceptions of what he was doing when he engaged in research on the dark web.” More specifically, Dr. Marshall would have testified that the petitioner suffers from several significant psychological conditions, with the primary one being a neurodevelopmental condition that falls on the autism spectrum, although the petitioner also has obsessive- compulsive disorder, depression, anxiety, and panic disorder. Dr. Marshall would have explained that someone with petitioner’s autism diagnosis has difficulty with eye contact, which could be misconstrued as indicating deception or having something to hide, and lacks emotional expressiveness, which could be misinterpreted as indicating lack of remorse or insensitivity. Dr. Marshall would have further explained that such persons speak in a manner that is not fluid; tend to go off on a tangent; and repeat themselves, that is an element of the crime charged.” Syl. Pt. 3, in part, State v. Joseph, 214 W. Va. 525, 590 S.E.2d 718 (2003). 7 causing others to think they are being difficult and/or uncooperative. 9 With respect to petitioner’s research on the dark web, Dr. Marshall would have explained that persons with autism think “concretely step by step, gathering the information and missing big pieces of the social puzzle and not processing the social information in the way we [persons without autism] would, which is conceptually, by just getting stuck on individual steps and leading him into places he’s not going to recognized as danger like we would.”10 Despite defense counsel’s attempts to set the record straight as to what defense he intended to put before the jury, the circuit court wouldn’t budge from its interpretation of that single sentence in Dr. Marshall’s report, 11 pointing out that the expert had never amended or updated his initial report to excise, or otherwise clarify or explain that “right or wrong” rubric. Thus, [i]n this matter the trial court’s analysis of the relevance of [Dr. Marshall’s] expert testimony was off target from its inception. 9 The petitioner exhibited all of these characteristics during his testimony at trial, resulting in several stern rebukes by the circuit court. Although I do not think these rebukes were so prejudicial, in and of themselves, as to require reversal, they perfectly illustrate the importance of Dr. Marshall’s evidence. By better understanding how the petitioner interacted with the world as a result of his ASD, the jury would have better understood his core defense: that he lacked the requisite intent to commit the crimes charged. 10 This testimony was provided by Dr. Marshall at the petitioner’s sentencing hearing. Although the majority discounts its significance because it was not before the circuit court at the time the admissibility issue was argued, I believe that defense counsel adequately recounted at that time what the sum and substance of Dr. Marshall’s testimony would be. 11 “The Court continues to be of the opinion that regardless of how the [Petitioner] couches Dr. Marshall’s testimony, he is attempting to assert a diminished capacity/lack of criminal responsibility defense[.]” 8 In perceiving [Marshall’s] testimony to be permissible only to establish a mental defect defense, which defendant was not asserting, the trial court employed an approach to analyzing the permissible uses of the testimony that was too narrow. State v. Burr [Burr II], 948 A.2d 627, 632 (N.J. 2008) (emphasis added). Further, the circuit court relied on the absence of any West Virginia precedent governing admission of expert testimony 12 as to ASD, with or without the complication of OCD, either to negate a defendant’s mens rea or to explain the affect and behaviors of an individual who has the condition. Although the court was correct as to the lack of West Virginia case law on the very specific issue presented in this case, admission of expert testimony as to ASD, this Court has many precedents which can, and should, guide our resolution of the issue presented here. See, e.g., State v. Stewart, 228 W. Va. 406, 409, 719 S.E.2d 876, 879 (2011) (“Based on well-established West Virginia precedent, the defendant was entitled to present evidence of Battered Woman's Syndrome and evidence of abuse through eyewitnesses and expert witnesses. See, e.g., Syllabus Point 4, State v. Harden, 223 W.Va. 796, 679 S.E.2d 628 (2009) (in cases not involving self-defense, evidence of abuse is ‘relevant and may negate or tend to negate a necessary element of the offense(s) charged, such as malice or intent.’”)); State v. Ferguson, 222 W. Va. 73, 76, 662 S.E.2d 515, 518 (2008) (expert testified that because defendant had schizo affective 12 The court did allow some testimony about the petitioner’s conditions, and how they bore on his affect and his behaviors, from the petitioner’s father and two friends. See text infra. 9 disorder, and when he saw an individual he believed had stolen from him, “I think his thinking was impaired at the time and that would drastically affect his intent. I don't think he had the intent to kill. I think he had intent to go find out what happened to his stuff.”); State v. Lockhart, 208 W. Va. 622, 630, 632, 542 S.E.2d 443, 451, 453 (2000), where we noted that Dissociative Identity Disorder (“DID”) is a “complex mental disorder,” and held that in view of the general scientific recognition of the diagnosis of DID and the fact that other courts have allowed expert testimony as to its existence and its applicability in a specific case, expert testimony concerning DID may be admissible in West Virginia on a case-by-case basis.); Syl. Pt. 2, State v. McCoy, 179 W. Va. 223, 224, 366 S.E.2d 731, 732 (1988) (“Qualified expert testimony regarding rape trauma syndrome is relevant and admissible in a prosecution for rape where the defense is consent. The expert may testify that the alleged victim exhibits behavior consistent with rape trauma syndrome, but the expert may not give an opinion, expressly or implicitly, as to whether or not the alleged victim was raped”). Although court in other jurisdictions have been presented with the issue of admissibility of expert testimony concerning a defendant’s ASD, the circuit court summarily disregarded them as “unpersuasive and not applicable to the present case.” I disagree on both counts, finding the cases to be both persuasive and highly relevant. In State v. Burr [Burr I], 921 A.2d 1135 (N.J. Super. Ct. App. Div. 2007), aff’d as modified by Burr II, 948 A.2d 627 (2008), the trial court had excluded expert testimony concerning 10 ASD on the ground that it did not establish diminished capacity, notwithstanding defense counsel’s explanation “that the defense was not seeking to offer evidence of the disorder to show that defendant committed the alleged acts but did not understand that his conduct was wrong, but rather to show that defendant's ability to make certain social judgments is impaired.” Id. at 1142. On appeal, the Superior Court of New Jersey reversed, finding that Clearly then, [the expert’s] testimony would have given jurors a better understanding of defendant’s behavior, which could have effectively negated the inference that defendant had the improper motive of seeking sexual gratification by having children sit on his lap. The trial would have been a more fair and complete adversarial process if, in evaluating the evidence and the inferences urged by the State, jurors were aware that defendant’s mental disability prevents him from viewing the world as others do in terms of acceptable social interactions. Id. at 1150.13 On appeal, the Supreme Court of New Jersey affirmed, holding that “[i]n our view, the evidentiary ruling on the Asperger’s Disorder testimony denied defendant access to evidence that was relevant and material to his explanation of himself and his conduct.” Burr II, 948 A.2d at 629 (emphasis supplied). Noting that the New Jersey Evidence Rules “broadly admit ‘all’ relevant evidence, unless the evidence is otherwise excluded,” id. at 631 (citation omitted), the court concluded that evidence as to the appellant’s ASD was “‘relevant to prove that the defendant did not have a state of mind which is an element of 13 The appellant also argued “that the trial court's refusal to allow Asperger's evidence deprived him of a fair trial by preventing him from testifying on his own behalf due to concerns that the jury would misconstrue his odd appearance and behavior and therefore find him to be not credible.” Burr I, id. at 1150. The court did not base its ruling on this argument, finding that it wasn’t fairly raised because the appellant did not claim that he would have testified if the expert’s testimony had been admitted. 11 the offense.’” Id. at 632. The court cited multiple precedents for the broad proposition that “mental defect evidence is relevant when asserted to prove or disprove an element of a crime or to advance a defense.” Id. Finally, the court concluded that [b]eyond offering an alternative explanation for defendant’s conduct, the barred testimony would have enhanced the presentation of defendant’s defense to the charges against him in ways that defy specific enumeration. The evidence would have educated the jury about oddities in behavior that defendant might exhibit in court or were described in the testimony of witnesses. The testimony also might have enabled the jury to view the facts with greater consideration given to defendant’s version of his interactions with the children. Id. at 633. In People v. Larsen, 205 Cal. Rptr.3d 762 (Cal. Ct. App. 2012), the issue on appeal was whether the trial court had denied the defendant his right to put on a defense by refusing to give a “pinpoint instruction” to the effect that his ASD could be considered by the jury “for the limited purpose of deciding whether, at the time of the charged crime, the defendant acted . . . with the intent or mental state required for that crime.” Id. at 773-74. The appellate court concluded that the trial court erred in refusing the instruction, because his expert’s “testimony on the effects of defendant’s [ASD] was both probative and admissible on the issue of whether defendant actually formed and expressed the requisite intent to procure Jane Doe’s murder.” 14 Id. at 777. Finally, and of specific relevance to the 14 The defendant claimed that his plans for the murder “were part of an elaborate fantasy within the confines of a role-playing game.” Id. at 774. 12 case at bar, the court found that the trial court’s categorization of the defendant’s ASD defense as bearing solely on mental capacity was “off the mark” because the evidence that he suffered from ADS, “and its manifested symptoms, directly and materially reflected on his claim that he did not actually intend to solicit the victim’s murder, but instead was engaged in some form of game-playing brought on by his mental disorder.” Id. Finally, in State v. Boyd, 143 S.W.3d 36 (Mo. Ct. App. 2004), the trial court excluded expert testimony concerning ASD on the ground that it didn’t bear on the defendant’s lack of capacity to commit a crime. As was the situation in the instant case, defense counsel argued – to no avail – that lack of capacity wasn’t his defense. On appeal, the Missouri Court of Appeals found that exclusion of the evidence was error; the court reversed and remanded for a new trial, noting that “[t]he denial of the opportunity to present relevant and competent evidence negating an essential element of the state’s case may, in some cases, constitute a denial of due process.” Id. at 40. Even setting aside our Guthrie test, 205 W. Va. at 330, 528 S.E.2d at 87, and the relevant precedents from other jurisdictions discussed supra, all of which compel the conclusion that the circuit court erred in excluding the testimony of the petitioner’s expert witness, that conclusion would be “consistent with this Court’s prior applications of the Rules of Evidence regarding admissibility of expert testimony and the liberal thrust of those rules.” State ex rel. Jones v. Recht, 221 W. Va. 380, 386, 655 S.E.2d 126, 132 (2007); see 13 also Gentry, 195 W. Va. at 525, 466 S.E.2d at 184 (the Rules of Evidence are liberal and a trial court should “err on the side of admissibility.”). We have held that the core concern of West Virginia Rule of Evidence 702 15 is whether an expert’s “‘specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue[.]’” Syl. Pt. 1, in part, Cargill v. Balloon Works, Inc., 185 W. Va. 142, 143, 405 S.E.2d 642, 643 (1991) (citation omitted and emphasis added); see also Tanner v. Rite Aid of West Virginia, Inc., 194 W.Va. 643, 654 n.17, 461 S.E.2d 149, 160 n.17 (1995) (“Helpfulness to the jury . . . is the touchstone of Rule 702”). At its essence, Rule 702 “‘is one of admissibility rather than exclusion.’” In re Flood Litig. Coal River Watershed, 222 W. Va. 574, 581, 668 S.E.2d 203, 210 (2008) (quoting Arcoren v. United States, 929 F.2d 1235, 1239 (8th Cir. 1991)); see also San Francisco v. Wendy’s Int’l, Inc., 221 W. Va. 734, 741, 656 S.E.2d 485, 492 (2007) (“The Rules of Evidence embody a strong and undeniable preference for admitting any evidence which has the potential for assisting the trier of fact.”) (quoting Kannankeril v. Terminix Int’l, Inc., 128 F.3d 802, 806 (3rd Cir.1997)). In the instant case, it is beyond dispute that the evidence of Dr. Marshall would have been helpful to the jury in making the critical determination of whether the petitioner’s intent was to find and look at pornographic images or, as he contended, to see 15 West Virginia Rule of Evidence 702(a) provides that “[i]f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise.” 14 just how dark the “dark web” really is. Lack of intent was the entirety of the petitioner’s defense, and in the absence of Dr. Marshall’s testimony there was nothing to support what may have seemed, to a lay jury, to be a fanciful explanation of just what the petitioner was doing at his computer. In this regard, although the State asserts that the exclusion of Dr. Marshall’s testimony did not leave the petitioner without a defense because his father and two friends testified as to the oddities and quirks in his behavior resulting from ASD, I reject any argument that this is sufficient to establish harmless error. As any trial lawyer knows, there is a significant difference between having an accused’s relatives and friends testify about his or her medical condition and having a medical professional give that testimony; an expert has what one court termed an “aura of authority experts often exude, which can lead juries to give more weight to their testimony.” Elsayed Mukhtar v. Calif. State Univ., Hayward, 299 F.3d 1053, 1063-64 (2002), overruled on other grounds by United States v. Bacon, 979 F.3d 766 (2020). Further, as set forth in the Burr, Larsen and Boyd cases, supra, an expert on ASD can explain the condition in depth and how a “defendant’s mental disability prevents him from viewing the world as others do in terms of acceptable social interactions.” Burr II, 948 A.2d at 631. Lay testimony, which is generally confined to how a particular defendant appears “weird” to others, simply does not compare to expert testimony which helps a jury “to understand[] Asperger’s syndrome itself and to whether [the defendant] has it.” Boyd, 143 S.W.3d at 45. 15 Further, the evidence would have been helpful to the jury in assessing the petitioner’s credibility because, as the expert would have testified, his ASD would (and most definitely did) make him a terrible witness – drawing multiple admonishments from the circuit court and even a threat to strike the entirety of his testimony. As stated supra, I agree with the majority that in issuing these admonishments, the circuit court did not cross the line of “unduly influencing jurors in the discharge of their duty as triers of the facts.” Syl. Pt. 4, in part, State v. Rogers, 215 W. Va. 499, 600 S.E.2d 211 (2004); see also State v. Wotring, 167 W.Va. 104, 115, 279 S.E.2d 182, 190 (1981). However, the admonishments, coupled with the petitioner’s testimony, which could most kindly described as discursive, were extremely prejudicial in the absence of expert testimony as to how the petitioner’s ASD-related mannerisms could affect his testimony and thus “surprise or inexplicably alienate the jury.” Burr II, 948 A.2d at 633. Finally, in discussing the petitioner’s assignment of error concerning the circuit court’s admonishments, the majority has made the sweeping pronouncement, elevated to a syllabus point, that “[t]he trial court has an obligation to all parties to ensure that the trial is conducted in a fair manner. This obligation includes a duty to supervise the direct and cross-examination of each party’s witnesses.” Not surprisingly, the majority cites no authority for this proposition, as it is wholly divorced from the realities of trial practice. At trial, decisions as to what witnesses to call, how best to elicit information from them, and/or how best to discredit their testimony, are matters of strategy for the advocates, 16 not for the trial judge. The judge’s role is to rule on motions, objections, and issues of law, and – in limited circumstances – to pose clarifying questions. None of this constitutes “supervision” of direct and cross-examination, and I fear that a literal reading of the majority’s new syllabus point will invite judicial interference in the presentation of evidence, thus crossing a line this Court has firmly established: The trial judge in a criminal trial must consistently be aware that he occupies a unique position in the minds of the jurors and is capable, because of his position, of unduly influencing jurors in the discharge of their duty as triers of the facts. This Court has consistently required trial judges not to intimate an opinion on any fact in issue in any manner. In criminal cases, we have frequently held that conduct of the trial judge which indicates his opinion on any material matter will result in a guilty verdict being set aside and a new trial awarded. Rogers, 215 W. Va. at 504-05, 600 S.E.2d at 216-17 (citations omitted). 16 16 This venerable doctrine dates back into the nineteenth century. In State v. Staley, 45 W. Va. 792, 32 S.E. 198 (1899), we wrote that “[t]he courts have ever been exceedingly careful of the province of the jury in the trial of cases.” Id. at __, 32 S.E.2d at 202. We further noted the existence of numerous cases which evince a jealous care to watch over and protect the legitimate powers of the jury. They show that the court must be very careful not to overstep the line which separates law from fact. They establish the doctrine that, when the evidence is parol, any opinion as to the weight, effect, or sufficiency of the evidence submitted to the jury, any assumption of a fact as proven, or even an intimation that written evidence states matters which it does not state, will be an invasion of the province of the jury. Id. 17 For all of these reasons, I respectfully dissent. I am authorized to state that Chief Justice Hutchison joins in this dissenting opinion. 18 19	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487803/	'BENSON, Judge ORDER This matter came before the court on defendant Gordon Steve Clay’s motion for an order suppressing the report of a hair comparison on the ground that the hair found at the scene which is reported similar to a hair taken from defendant Clay was no longer in existence. Certain facts are undisputed. The hair found at the scene was compared by the People’s chemist with one taken from the defendant pursuant to a warrant and were reported as similar. The hair found at the scene was subject to several tests and in a normal course of performance of the last test it was crushed and exposed to certain substances. The remnants were discarded. The defendant is obviously unable now to make independent tests (which were authorized by the court and were not objected to by the People) to either corroborate or impeach the findings of the People’s chemist. No bad faith on the part of the People or its agents exists. The factual issue is whether or not it was proper procedure and warranted to have used the entire hair in the final test and then discarded the remnants. At the hearing of this motion, the chemist for the People and the chemist for the defendant testified extensively. The final test conducted by the People’s chemist was to determine the blood grouping of the hair. The hair was one to one and one-half inches long (2.54 to 3.81 centimeters). In conducting the final test the chemist divided the hair into three sections for the testing to determine A, B or 0 blood 265grouping. He testified that sections of one-half to three-quarters. of an inch were the shortest .sections that he had used in any blood grouping tests. The People’s chemist’s tests were to compare 4 pubic hairs and one head hair found at the scene with hairs of the 3 victims and the 2 defendants. The only similarity found by him were the pubic hair in question and the defendant’s pubic hair. The defendant’s chemist testified that the shortest section he had tested was about b centimeter and he usually tested sections of to 1 centimeter. Thus the defendant’s chemist would require a hair of Vh to 3 centimeters in length. The defendant’s chemist also stated that the circumstances of this case indicated that the best procedure required the retaining of a portion of the hair unaltered so that later tests by others could be made; that it wouldn’t be “absolutely necessary” to have used the entire hair; that rather than a comparison test as was done with a “known hair”, better results are achieved by “blind” testing where the source of all hairs is unknown; that even the remnants of the hair following the blood grouping tests might have some value for later testing. The People’s chemist testified on this last point that he would not rely on the results of subsequent testing of the hair remnants after the blood grouping test. Both experts testified as to a general policy of the importance of evidence preservation that is a part of their field, but did not cite specific procedures covering a case such as this. The court finds that the destruction of the hair occurred during an investigatory test conducted by a qualified chemist using reasonable means. I conclude that the People have met their burden of explaining the non-production of the hair which was their 266duty to preserve once it was taken as evidence. U.S. v. Bryant (1971 C.A.D.C.) 439 F.2d 642, at p. 651. See also U.S. v. Sewar (9th Cir. 1972) 468 F.2d 236; People v. Eddington (C.A. Mich. 1974) 218 N.W.2d 831. It is therefore ordered that the defendant’s motion be, and the same is hereby denied.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487804/	ABBATE, Judge DECISION On August 10, 1973, Judith A. Schenck, the plaintiff herein, departed Truk Island to sojourn in Guam in hopes of obtaining a Therapeutic Abortion. After several inquiries, she found her way to Dr. Vivian Batoyan, a private physician who has privileges at the Guam Memorial Hospital, which is operated by the Government of Guam. The Government is the named defendant in the above-entitled action. After a brief consultation with Dr. Batoyan, she was referred to our Mental Health Clinic for consultation and was seen by Dr. David Kennedy, the Director of the Guam Memorial Hospital Mental Health Center. The consultation occurred on August 16, 1973, and after a brief examination, the psychiatrist concluded termination of pregnancy was essential and recommended sterilization. (See Plaintiff’s Exhibit A.) The history Dr. Batoyan shows is that the plaintiff was spotting. This was contradicted by the plaintiff in her testimony; and the nurse’s notes-medication record in Exhibit A shows no bleeding noted. The entire hospital record was offered into evidence as Plaintiff’s Exhibit A. The hospital record revealed an Admitting and Final Diagnosis as Incomplete Abortion, 8 weeks. The operation report shows Dilatation and Curettage was performed. There was a moderate amount of tissue obtained from the lining of the cavity of the uterus (endometrium), and the tissue was sent for surgical pathology. Dr. Leung Chen, the Staff Pathologist for the Guam Memorial Hospital, only had a pre-operation diagnosis (see Surgical Pathology Report, part of Exhibit A) of Incomplete Abortion, and concluded that no fetal parts were found. Mrs. Schenck, after her discharge, returned to Truk 268Island, and in October 1978, began experiencing difficulty with her uterus. She then sought medical advice in Truk and was seen by Dr. G. C. Hobson, who testified in this case. In his report, he stated that he suspected ’ a possible hydatidiform mole. His operation finding was a 4 month pregnancy. Pathology reported “Fetal, placental, and decidual tissue identified.” The surgeon, Dr. Hobson, testified that bleeding during surgery became so great after fetal parts were removed, that he performed a hysterectomy. The plaintiff testified that great mental anguish, embarrassment, and humiliation have been suffered and that she has been advised that future psychiatric care is necessary, which stems from the loss of her uterus, which totaled to approximately $38,855.00. The plaintiff in this case now seeks to recover damages for negligent medical and hospital treatment, which eventually led to a hysterectomy. This action is based on the theory that the defendant hospital owed a duty to plaintiff to provide reasonable medical care and supervision during her confinement in August 1973. In seeking the standard of care that is to be exercised by the hospital, this Court has been aided by an expert witness, Dr. G. C. Hobson, the By-Laws of the Medical Staff of the Guam Memorial Hospital, and the Accreditation Manual for Hospital, up-dated 1973 (Exhibits B and C). The hospitals of today, unlike the hospitals of yesteryears, have a network of facilities; such as, medical staff laboratories, X-ray Department, Administrative and Manual Workers, all acting in concert for the benefit of the patients it accepts. As stated in Bing v. Thieng (1957) 2 N.Y.S. 656, the Court said, “The conception that the hospital does not undertake to treat a patient, does not undertake to act through its doctors, nurses, but undertakes instead simply to procure them to act upon their own 269responsibility no longer reflects the fact. The standards for Hospital Accreditation, state licensing and the defendant’s by-laws, demonstrate that the medical profession and other responsible authorities regard it as both desirable and feasible that the hospital assume certain responsibilities for the care of the patient.” It is crystal clear that compliance with the By-Laws and the Manual for Hospital Accreditation was ignored during the confinement of this patient. There was no clinical history sent with the tissue to the pathologist. The pathologist made no inquiry after finding no fetal parts. No Medical Review Committee was in existence to review medical records. No Tissue Committee to review surgical procedure. The hospital records indicated Incomplete Abortion as an admitting and final diagnosis. The psychiatrist, Dr. David Kennedy, recommended Therapeutic Abortion. It is a sad commentary and shocking to this Court that there is no established policy on Therapeutic Abortion, other than a brief consultation with a psychiatrist. It is difficult for this Court to comprehend how a surgeon, without the harness of strict regulation, can extinguish the lamp of life with a lethal curet as the defenseless fetus is evacuated by the surgeon. Individual rights play such a prominent rule in our modern day society, with the exception of the fetus, which is life [emphasis supplied]. Had there been a Medical Review of Records, an inquisitive pathologist, a Tissue Committee Rules & Regulations governing Therapeutic Abortion, review of operative procedure, the plaintiff would not have walked out of the halls pregnant, which later subjected her to a hysterectomy. Citing Hendrickson v. Hadkin, 294 N.Y.S. 982; Darling v. Charleston Community Memorial Hospital (1965) 33 Ill.2d 253; 14 A.L.R.3d 873. Based upon the evidence of this case, which show a total disregard in providing reasonable medical care and super*270vision, there can be one conclusion reached. Judgment for the plaintiff in the amount of $80,000.00 against the defendant Government of Guam, together with cost and disbursement. Submit judgment.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487806/	ABBATE, Judge DECISION I have carefully reviewed the objections and statements submitted by defendants Dally and Landgraf requesting that I disqualify myself for reasons of bias and prejudice. These documents include assertions that “by reason of bias and prejudice of the Honorable Paul J. Abbate, a fair and impartial trial cannot be had before him.” Annexed to these documents are “Exhibit A’s, which are copies of indictments of a one Frank Rodney Reyes and a one Gordon Steve Clay charging same with the murders of Gregory Valer Abbate, Jan Marie Faria, and Mary Louise Farrell. Included in the document is the notation that “Gregory Valer Abbate is the son of the Honorable Paul J. Abbate.” There was presented no evidence nor was any allegation made that defendants Dally and Landgraf bear any relationship with those defendants whose names appear in the attached indictments. Further, there was presented no evidence nor were any allegations made that I have had any direct or remote relationship with defendants Dally and Landgraf. On first impression, I am at a loss to understand upon what legal theory these requests for disqualification are supported by the annexed exhibits. Therefore, having failed to receive same, I have been compelled to attempt to extrapolate from these disparate elements the legal theory upon which defendants Dally and Landgraf rest their requests, in order that I might intelligently and judiciously respond. Apparently, it is their theory that the experiencing of this personal tragedy by myself has resulted in a warping of my judicial faculties. More specifically, it would appear that defendants Dally and Landgraf are alleging that this 276event has heightened my abhorrence to crime to such an extent as to blur my judicial vision, thereby preventing me from viewing them (or, for that matter, any defendants) as other than as a guilty party. After examining the decisional law relative to the issues raised by both the facts presented, and the theory I was forced to impose upon same, I cannot but conclude that this request fails for the most fundamental of reasons. Simply stated, it fails to present any evidence or make any allegation of facts which relate defendants Dally and Landgraf to myself. In 1937, the Supreme Court of California in People v. Swett, 65 P.2d 899, while reviewing a petition pursuant to § 170(4) of the California Code (essentially the same as Guam Code § 170(4)), enunciated for the first time that an essential element of any claim under this section need be a showing of facts which give rise to a probable inference of bias or prejudice against the specific moving litigant. At page 901 of that decision, the court stated “... furthermore it is well established that before bias or prejudice can disqualify a judge it must be shown to exist against the particular party moving for the substitution of the judge.” It is worth noting that the factual setting of that decision is rather analogous to the present, inasmuch as the bias or prejudice, which was alleged, was claimed to have arisen from the Judge’s prior status as Attorney General. The allegation being that that former status made him biased against all criminal defendants. The principle of law established in Swett has been affirmed on numerous occasions, however, perhaps never as succinctly as In re Osslo, 334 P.2d 1, where at page 10 the court opined. The degree of bias and prejudice which disqualifies a trial judge is more than a nebulous belief that the judge had some preconceived ideas about a piece of litigation, it is personal bias and 277prejudice or a bent or leaning for or against the litigant, which regardless of the merits of the cause, makes it impossible for the judge to view the case dispassionately. And as recently as 1974, this substantive issue of law has been upheld by the Oregon Supreme Court in Brauhn v. Brauhn, 518 P.2d 1089 where the court states at p. 1093: It is often held that to disqualify a judge from sitting, it is not enough that the claimed bias be with respect to the subject matter of the law suit; it must be with respect to the person of the party litigant. With respect to the extrapolated theory that abhorrence to crime may give rise to grounds for disqualification, I would like to address counsel’s attention to the language in Crawford v. Ferguson, 115 P.278 at 282 which I look upon favorably as a sound piece of both judicial and social sense. [6] There is a great and manifest difference between prejudice against a crime and being prejudiced against a person who may be charged with the commission of such crime. Every good citizen is prejudiced against the commission of crime. If being prejudiced against the commission of ¡crime is a disqualification, then the members of this court are disqualified to decide any case pending before them.... With respect to the authority of In re Murchison, 349 U.S. 133 which defense counsel offers as support for his position, I cannot but ironically note that if anything this case supports the overwhelming weight of authority which I believe this decision to be in accord with. Specifically, In re Murchison reasserts rather forcefully the principle that if there are facts which relate the judge with the defendant, which may give rise to bias or prejudice, then a disqualification is required to satisfy the dictates of due process. In this instance, no such facts were submitted or alleged. In addition to examining the legal precedents surrounding this issue, I have as well examined the factual record to 278determine if there perhaps could be found there any substantiation to the theory I was compelled to extrapolate from the documents submitted. In essence, I examined the cases heard before me during the 10 months prior to July 21, 1974; and the cases heard during the 10 months subsequent thereto. Specifically, I examined the verdicts rendered in all those cases. The raw data is as follows: 1. # cases heard prior to July 21: 17 (a) # guilty verdicts : 7 (b) # not guilty verdicts : 10 non-conviction rate : 58% 2. # cases heard subsequent to July 21 15 (a) # guilty verdicts 4 (b) # not guilty 11 non-conviction rate 73% From a most cursory analysis of these figures, it is strikingly apparent that: 1.1 have not been critically biased or prejudiced towards all criminal defendants whose trials have been heard before me, inasmuch as 11 of those defendants appearing before me since July 21 have been found not guilty. II. A more careful analysis of these records in fact reveals that the conviction and non-conviction rate of criminal defendants heard before me in the respective time periods are essentially identical. Actually, the non-conviction rate in the subsequent time period is greater than the prior period (prior 58%; subsequent 73%): This empirical analysis perhaps best answers the question of whether I have become irreparably biased or prejudiced against all criminal defendants. The answer inescapably is an emphatic NO! 279I have taken great pains to research and write this decision. I have done so for three reasons. First, because I have received this request in essentially this identical form on numerous occasions. Second, because I wish this to be the definitive opinion on this issue and therefore, dispositive of these numerous requests. And third, because I wish, in addition, to identify myself with that line of cases which have held unanimously that where a judge determines a request of this nature to be “frivolous” or a “sham” it may strike same from the record and disregard it.1 Therefore, the court wishes to allow this opinion to serve as adequate notice that requests of this nature are viewed as frivolous and as shams and I will not address myself to same in the future, but rather, disregard them and have them struck from the record. See Neblett v. Pacific Mut. Life Ins. Co. of California, 139 P.2d 934 (1943) “. . . Where the statement of disqualification is legally insufficient and is based on frivolous grounds, he may disregard it or strike it from the record.” p. 938; See also People v. Sweeney, 357 P.2d 1049 (1961); In re Rodda’s Estate, 346 P.2d 441 (1959); Calhoun v. Superior Court of San Diego County, 331 P.2d 648 (1958); Mackie v. Derr, 316 P.2d 366 (1957).	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487809/	ABBATE, Judge DECISION The court while deliberating on the above-entitled action took into serious consideration the decision of Dillingham Corporation of the Pacific v. Agana Bay Development Company (Hong Kong), Ltd., (Sup. Ct. Guam, c.c., No. 159-74, 1974). The court noted that the authorities upon which that court rested its decision were primarily the cases of Gunther v. Merchant’s Warren National Bank, 360 F.Supp. 1085 (D. Me. 1973); Bank of Hawaii v. Emerson, District Court of Guam, Case 99-72 (1973); and Flaherty Electric Co. v. Modular Structures Inc., District Court of Guam, Case 204-72 (1973). However, the court also noted that these decisions were constitutionally framed in the context of attachment statutes (Maine’s & Guam’s). In those instances the essential legal question before the courts 284was whether the absolute prohibitions against alienation of real property inherent in their respective attachment statutes constitute a sufficient “taking” as to bring this question within the purview of the U.S. Supreme Court decisions of 1) Fuentes v. Shevin, 407 U.S. 67 (1972) and 2) Sniadach v. Family Finance Corp., 395 U.S. 337 (1969), thereby requiring that the full panoply of procedural due process protections become applicable. All of these decisions ruled that these absolute alienation statutes did constitute such “takings”. An example of such a statute would be that of Guam’s Civil Procedure Code Sections 537-61. Section 548 indicates the absoluteness of the restriction on alienation which attachment engenders. This section prohibits the sale or transfer of any interest in the real estate in question except under the supervision of the court and, further, any proceeds obtained thereby must be deposited with same. It must be noted that at the time that Dillingham was decided, the above authorities were all that were available for consideration. However, subsequent to that decision, two Federal District Courts and one state supreme court have examined the precise issue of the constitutionality of mechanic liens. The primary focus of these decisions has been that of analyzing the degree of “taking” involved in a mechanics lien statute and a determination of whether such is sufficient to warrant the application of the 14th Amendment’s procedural due process protections. The Federal District Court decision in Cook v. Carlson, 364 F.Supp. 24 (D.S.D. 1973) analyzed the South Dakota mechanics lien statute. The Arizona mechanics lien statute was evaluated in Spielman-Ford v. Hanson Inc., 379 F.Supp. 997 (D. Arizona 1974); and the California mechanics lien statute was analyzed by that Supreme Court in Connolly Development Inc. v. Superior Court, 41 C.A.3d 543 (1974). All of these courts uniformly held that the 285relative limitation on the alienation of realty via the application of their respective mechanics lien statutes is “de minimis” inasmuch as it does not prevent the alienation of realty but merely makes same more onerous. An examination of the Guam statute reveals it to be of this nature inasmuch as its effect is to merely make the lienor’s claim superior to any subsequent interest taken in the property to which it applies. Therefore, any subsequent purchasers of that realty would merely take same subject to the payment of the outstanding lien. Therefore, it may be concluded that the Guam mechanics lien statute constitutes such a de minimis taking of property as not to fall within the 14th Amendment’s definition of “taking” and therefore is not constitutionally defective. Submit order.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487810/	ABBATE, Judge DECISION This adoption proceeding came before the Court on the 5th day of August, 1975. The petitioners, Ivan J. Ezell and Nancy Ezell, seek an order from this Court to have Dang Minh Tri, a child, declared their legal child. The natural *286parents, together with the child and petitioners, were present in Court. Factually speaking, the minor child to be adopted is a Vietnamese refugee who, with her family, escaped prior to the occupation of South Vietnam by the Provisional Government of North Vietnam. This Court thoroughly questioned the natural parents regarding the voluntariness of their consent directly and through a qualified Vietnamese interpreter. After having examined the natural parents, the Court finds that their consent to adopt was based upon a promise they made to the petitioners, and their inability to provide support to the child. This Court also made an investigation, through its family counselor, which revealed that this adoption should not be granted. A communication was sent to the Court on 31 July 1975 recommending that the child remain with the natural parents. In view of the foregoing, and looking at the totality of the circumstances, this Court must deny the petition for adoption. So ordered.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487813/	ABBATE, Judge DECISION Defendant’s motion to dismiss for want of jurisdiction must be denied. The relevant code sections for analyzing this issue in controversy are Sections 406.1 and 405 of the Civil Code. Briefly, these sections allow for jurisdiction to be obtained over a foreign corporation “doing business in Guam” by serving process on the Director of Revenue and Taxation where such a corporation has not, pursuant to Section 405, designated an individual residing in Guam to accept summons and process. . The operative words which fashion the gravamen of defendant’s motion are those of “doing business in Guam”. Succinctly stated defendant’s contention is that it has never been doing business in Guam and therefore is not subject to Civil Code Section 406.1. “Doing business” as a legal phrase of art has been *298construed countless times by almost every court including the U.S. Supreme Court in McGee v. International Life Insurance Co., 355 U.S. 220 (1957). This phrase has been traditionally defined in terms of “minimum contacts with the forum state so that maintenance of the suit does not offend traditional notions of fair play and substantial justice”. International Shoe Co. v. State of Washington, 326 U.S. 310 (1945). Equally traditional in terms of adoption by other jurisdictions as a definition for this phrase is what it must consist of: An act done or transaction consummated in the forum state or some other act by which the defendant purposely avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Hanson v. Denckla, 357 U.S. 235 (1958). Applying these definitions to the case at hand it would seem from the fact that the contract was entered into in Guam, that the services which were the subject matter of the contract were rendered in Guam, that there were numerous meetings between the parties on Guam, and that there were continuous correspondence and communications between the plaintiff on Guam with the defendant, that these activities of the defendant could be said to constitute sufficient “minimum contacts” as to fall within the nearly universal definition of doing business. See Ault v. Dinner for Two, Inc., 27 Cal.App.3d 148 (1972). With respect to defendant’s allegation that the Superior Court is without subject matter jurisdiction, the court merely asserts that per operation of Section 55 of Public Law 12-235 it is vested with subject matter jurisdiction over this matter. For the foregoing reasons the defendant’s motion to dismiss is denied. Submit order.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487814/	WEEKS, Judge DECISION Defendant has sought to have this case dismissed on the 300grounds that the Superior Court of Guam is without subject matter jurisdiction over the issues presented therein and secondly because plaintiff has failed to join an indispensible party. The Court is of the opinion that for the following reasons this motion to dismiss must be denied. Defendant asserts with respect to the first ground that this Court is without subject matter jurisdiction to entertain this matter because P.L. 12-85 Section 82 limits this court’s jurisdiction to “those cases arising under the laws of Guam”; and that since the matter here complained of arose in the Marshall Islands, and to an indeterminate extent will be controlled by the laws of that place, that this matter therefore falls without the subject matter jurisdictional limits of this Court. The Court concurs with the assertion that the quoted phrase is definitive of the limits of the Superior Court’s subject matter jurisdiction. However, the Court interprets this phrase to indicate that the Superior Court of Guam has subject matter jurisdiction over all causes of action which the Guam Legislature has created or which may have existed at common law. In short these statutory and common law causes of actions define the kind or classes of actions which this Court is competent to entertain. See Turnbaugh v. Dunlop, 94 N.E.2d 438 at 440 (1950). This Court does not interpret this phrase as limiting this Court’s jurisdiction to those causes of action which not only fall within the above classes of actions but which physically arose within the territory of Guam, or which to some extent may be affected via the conflict of laws principles by the laws of a jurisdiction other than Guam. See Turnbaugh v. Dunlop, supra. In this instance plaintiff’s complaint clearly indicates that the cause of action from which relief is sought essentially sounds in the tort of fraud. This cause of action existed at common law and therefore can be generically 301characterized as a common law cause of action, although numerous statutes have been enacted pertaining thereto. Since the complaint indicates that the cause of action is not only a traditionally recognized common law cause of action, but as well, one codified per operation of Civil Code Section 1571, etc., this Court considers it to be one within that class of actions over which this Court has competent subject matter jurisdiction. Defendant has further moved to dismiss on the grounds that plaintiff failed to join an indispensible party in contravention of Rule 19(b). From the face of the complaint it would appear that the individual who is alleged by defendant to be an indispensible party (i.e. Anibar Timothy) would be characterized as either a joint tortfeasor or the servant in a master-servant relationship. With respect to the first characterization it is hornbook law that one tortfeasor cannot ground a request for dismissal upon the claim that a fellow joint tortfeasor is an indispensible party. See O’Shatz v. Bailey, 220 F.Supp. 444 (D. Md. 1963). With respect to the latter characterization it is an equally fundamental principle that an action initiated against a principal is not res adjudicata with respect to same’s agent, notwithstanding the fact that the principal’s liability may be derivative. See Makariw v. Rimard, 336 F.2d 333 (3rd cir. 1964). Therefore since the present action cannot affect the legal rights and/or obligations of Mr. Timothy there seems to be no reason for characterizing him as an indispensible party in this action. For the above reasons this motion to dismiss is denied. Submit order.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487815/	WEEKS, Judge DECISION The case law available dealing with similar statutes upholds the right of the state to impose limited liability on the parents of a Juvenile responsible for property damage. See Kelly v. Williams, 346 S.W.2d 434 (Texas 1961), General Insurance Company v. Faulkner, 130 S.E.2d 645 (N.C. 1963), Mahaney v. Hunter Enterprises Inc., 426 P.2d 442 (Wy. 1967). In addition to the fact that stare decisis supports the upholding of the constitutionality of Section 1716, the basic principles of statute construction and interpretation equally support this conclusion. In essence the legislature, in enacting Section 1716, is exercising its police powers in an attempt to limit or retard the growth of Juvenile Delinquency by compelling parents to exercise greater or more effective control on the actions of their children. The question then becomes whether the legislature was acting *303with respect to an appropriate public matter to which their police powers may be applied; and whether the means utilized to effect this public matter bears a reasonable relationship to such to effect the desired result. In both instances the answer would be in the affirmative. See In Re Sorrell, 315 A.2d 110 (Md. 1974).	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487816/	WEEKS, Judge DECISION The Government’s motion to dismiss is hereby denied. The Court does not find that the fact that the Government was included in the notice and motion for jury trial as party defendants sufficient cause to dismiss this action. Rather the Court construes the motion for jury trial as only applying to those party defendants, other than the Government, who are entitled to have their factual issues resolved *304by jury deliberation. Further, the Court believes that for purpose of more efficient judicial administration that this action with respect to all the parties including the Government proceed with a jury impanelled, however, leaving the issues in controversy relative to the Government to remain within the province of the judge presiding over the trial for determination. The Court finds support for this procedural posturing of this action in the cases of: United States v. Yellow Cab. Co., 304 U.S. 543, 555-556 (1951); Simon v. Lougreen, 368 F.Supp. 265, 270 (D.C.V.I. 1973); Englehardt v. United States, 69 F.Supp. 451, 455 (D.C. Md. 1947). However the Court notes in passing that if this posturing creates any undue hardship for the Government, they can always seek procedural relief by seeking to avail themselves of Rule J/£(b) of the Rules of Civil Procedure for the Superior Court of Guam.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487817/	RAKER, Judge DECISION In the instant case the plaintiff has sued the Government of Guam, certain persons holding official positions in the Government of Guam, the Civil Service Commission of the Government of Guam, and the Territorial Board of Education, Government of Guam. The actions which are complained of arose from defendants’ performance of their administrative responsibilities. There can be no dispute but that these actions were of a discretionary if not of a quasi-judicial nature. With respect to personal liability for these actions, although there is authority to the contrary, we adhere to the principle that government employees cannot be held liable for official actions of a discretionary nature even if performed in a malicious or fraudulent manner. See Hardy v. Vial, 311 P.2d 494, 496 (Cal. 1957); Lipman v. Brisbane Elementary School District, 359 P.2d 465, 467 (Cal. 1961). Contra, Prosser on Torts, Fourth Ed., p. 989. With respect to construing this action as one for damages for breach of contract against the Government of Guam, it is found also deficient inasmuch as it is in essence conceded that there has been no compliance with the Government Claims Act, Gov’t Code Sections 6500.00, etc. This act makes it a prerequisite for initiating an action for damages for breach of contract against the government that the claim be first filed with the Attorney General. Plaintiff in his memorandum of law has advanced several reasons to establish that: a. Compliance by plaintiff with the Government Claims Act was required, or b. If required, compliance should be excused. None of such reasons is persuasive or has substance. For the above reasons, the motion to dismiss the complaint is hereby granted. Submit order.	01-04-2023	11-18-2022
https://www.courtlistener.com/api/rest/v3/opinions/8487818/	ABBATE, Judge DECISION The Court is of the opinion that it is compelled to deny this motion to dismiss. The courts of lower rank cannot deviate from precedents established by courts which possess appellate jurisdiction over same, Auto Equity Sales, Inc. v. Superior Court, 368 P.2d 97 (1962). In this instance, the issue raised by this motion to dismiss is identical to that issue raised when a writ of prohibition was sought from the District Court of Guam against the Superior Court of Guam in Santos v. Superior Court of Guam, D.C. C.C. No. 75-067. There the District Court spoke rather unequivocally on this issue and ruled that Section 1382(2) of the Penal Code of Guam has no relevance to felony cases. Thus this Court, which is subject to appellate review by the District Court, cannot but consistently rule that this motion must be denied. *307In view of the foregoing, the motion to dismiss is hereby denied. Submit order.	01-04-2023	11-18-2022

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