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https://www.courtlistener.com/api/rest/v3/opinions/8487820/ | RAKER, Judge
DECISION
On January 21, 1974, plaintiff leased to defendant by written lease Lot 14, Block 5, Agana, for a period of 60 *309years, commencing January 1, 1974, for rental of $500.00 per month for the first year, the full first year rental being due and payable within 30 days of execution of the lease; $1,000.00 per month for the second through sixth year. For the remainder of the term the rental would increase by 10 % every 5 years, compounded.
Defendant was obligated by the lease to pay real estate taxes and provide public liability insurance for the protection of the plaintiff.
Defendant failed to pay any rentals after January 1975, and failed to pay real estate taxes or provide liability insurance. Plaintiff served on defendants a Notice to Pay Rent for the period January 1,1975, to March 1,1975, and advised defendants that unless rent was paid within 5 days the plaintiff would elect to declare a forefeiture of said lease. On or or about April 21, 1975, plaintiff served defendants with a notice which recited the March 1975 notice, stated that defendants had failed to cure “defaults” listed in March 1975 notice, and failed to pay 1974 real estate taxes. Such notice advised defendants that “Lessor, pursuant to the aforesaid lease, under paragraph (6) (b) (1) and (b) (c) of said lease hereby terminates said lease and will retake possession within three (3) days from the date hereof.” Emphasis supplied.
On July 18, 1975, plaintiff brought suit against defendants asking for:
1. Rental for period from January 1, 1975, to April 1, 1975, for the amount of $3,500.00;
2. Real Estate Taxes of $168.20 ;
3. The amount of $300.00 for failure to provide liability insurance;
4. Rental for the sum of $3,000.00 for rental for period from date of cancellation and retaking to date of suit;
5. For damages for breach and repudiation in the amount of $327,276.88, and
6. For costs of suit.
*310Trial was had on November 14, 1975, and the complaint was dismissed with respect to William Hsn in his individual capacity, leaving as the only defendant Central Development and Investment Corporation. It was stipulated that taxes owed to plaintiff from defendant amounted to $105.80 including 5% redemption charge. It was also stipulated that the current fair market rental for the property was $690.00 per month. The evidence showed that the property has at all pertinent times been unimproved. Relief demanded by paragraph 5 was computed by the plaintiff as being the difference between the contract rental and the fair market rental of $690.00 per month for the period of 58 years and 9 months.
Defendant admitted liability for rental of $3,500.00 which was the amount owed at the time of termination of the lease by the plaintiff but denied liability for any period thereafter demanded by paragraphs 4 and 5 above.
The issue in this case is the validity of Section 11(e) of the Lease entered into by the parties on January 21, 1974, which permits the lessor, upon the default of the lessee, to sue the lessee for the difference between the “contract rental” and the “present worth” for the balance of the term, which in this case would be approximately 58 years. The validity of this provision will depend on whether or not said Section 11 (e) is a penalty and not enforceable or is valid as a provision for liquidated damages. See Sections 1670 and 1671 of the Civil Code of Guam.
The issue of rental acceleration clauses has been a difficult problem in California for many years. See 7 Hastings Law Journal 189 (1956) and 43 California Law Review 344 (1955).
In Moore v. Investment Properties Corp., 71 F.2d 711 (9th Cir. 1934), the parties to a 15-year lease had provided that, upon stipulated conditions including repudiation of the lease, the lessor could terminate the lease and immedi*311ately recover from the lessee the difference between the value of the rentals provided for in the lease and the fair rental value of the property for the balance of the lease term. The lessee became bankrupt and repudiated the lease. The federal court held that, under California law, the provision for immediate recovery of damages was void.
Moore was decided in 1984. In 1937, the California Legislature enacted Civil Code Section 3308, the first paragraph of which provides as follows:
3308. The parties to any lease of real or personal property may agree therein that if such lease shall be terminated by the lessor by reason of any breach thereof by the lessee, the lessor shall thereupon be entitled to recover from the lessee the worth at the time of such termination, of the excess, if any, of the amount of rent and charges equivalent to rent reserved in the lease for the balance of the stated term or any shorter period of time over the then reasonable rental value of the premises for the same period.
Guam has never adopted Section 3308 of the California Civil Code, however, all other pertinent sections of the California Civil Code appear to be the same as Guam’s. Therefore, it will necessarily follow that Guam must follow Moore and Section 11(e) of the lease is a penalty and unenforceable.
However, other persuasive legal principles dictate that Section 11(e) of subject lease should be treated as a penalty, rather than as a provision for liquidated damages. These principles arise from the length of the lease, to wit: 60 years, and the great difference between the rental reserved in the lease and the reasonable rental value at the time of the termination of the lease. The authorities hold that in determining whether a provision is a penalty and so invalid, or is a valid provision for liquidated damages, the court should look into the question of reasonableness of the stipulated amounts and whether such amounts are proportionate to the probable damage. See annotations in 104 *312A.L.R. 223 and 106 A.L.R. 292. A lessor can, of course, sue periodically throughout the term of the lease as the rental payments fall due, but it appears unconscionable to permit him to select a time when rentals are depressed and use such depressed rentals as the measure of damages for the term of 60 years, ignoring the inevitability that rental value would increase in the future years. The black letter rule appears in McCormick on Damages, 1935, page 606 as follows :
Formerly the validity of agreements was said to depend on whether the intention of the parties was to agree on liquidated damages or to fix a penalty. This gave too great decisiveness to the descriptive items used in the contract, and to-day the courts will consider the language only as evidence upon the question, Was the sum intended as a pre-estimate of the actual loss? But the decisive question in determining the issue is this, Was the amount named reasonably proportioned to the probable loss? The courts are tending to adopt this last as the sole test. Emphasis supplied.
It is thus suggested that California courts would deny recovery demanded in paragraph 5 of the prayer in the case at bar in spite of Section 3308 of the California Civil Code.
Judgment shall be entered for plaintiff in the amount of $3,605.80 plus costs. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487821/ | ABB ATE, Judge
DECISION
The defendant in this case seeks a reduction of his sentence pursuant to Rule 85 of the Rules of Criminal Procedure.
In the above-entitled action the defendant pleaded guilty to assault by means of force likely to produce grievous bodily harm in violation of Section 245 of the Penal Code. The maximum punishment allowable by law is ten years and this defendant was sentenced to serve five years in the Guam Penitentiary.
The purpose of a Rule 35 application is to afford the sentencing judge an opportunity to review and reconsider his sentence. This, however, should be done in light of any further information. Counsel for the defendant seeks the reduction in order to allow the defendant the possibility of entering the halfway house. This hardly appears to be a compelling reason for reduction. Prior to sentencing, this Court ordered a presentence report, which included a psychiatric examination, and carefully reviewed the defendant’s background. The commission of this crime was one in which this Court hopes it will never encounter, a crime which involved a brutal attack on a young child. The sentence was well within the maximum punishment prescribed by statute.
Motion to reduce is hereby denied.
So ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487822/ | RAKER, Judge
DECISION
Statement of Facts
On December 3, 1973, plaintiffs (buyers) entered into a contract with Defendant Hyundai (seller) for defendant to *315construct a house for plaintiffs (buyers). Plaintiffs made a $3,000.00 deposit, balance being $58,000.00. Section 27 of the contract contained standard terms providing that on default by the plaintiffs, defendant could retain the $3,000.00 deposit as liquidated damages. The contract expressly provides in Section 25 that the seller “makes no warranty of completion by any specified date.” Section 24 of the contract provides that this contract states the entire agreement. Plaintiffs, relying on statements made by agents of defendant, expected to be able to move into the house in May or June of 1974. In fact, the house was not ready for occupancy until October 7, 1974, see Exhibit B to defendant’s answer. Plaintiffs never signed papers for the house, and it apparently was sold by defendant for an unknown amount to another buyer on defendant’s waiting list. Plaintiffs filed suit on October 18, 1974, alleging that defendant intentionally deceived plaintiffs to induce them to enter into the contract and that plaintiffs entered into the contract in reliance on said representations. Plaintiffs pray for return of $3,000.00 deposit and rescission of the contract. Depositions of plaintiffs were taken and defendant filed an answer denying fraud. Plaintiffs filed an opening brief. Defendant filed an answering brief to which plaintiff replied.
On June 27, 1975, the parties stipulated that matters in dispute be submitted to the court on the depositions and briefs of the parties.
I
Fraud
An analysis of the evidence before the court fails to establish plaintiffs’ claim that fraud was committed by defendant which induced plaintiffs to enter into the contract. Given the difficulties faced by contractors on Guam in obtaining materials, tools, equipment and appli*316anees, Sections 24 and 25 of the contract, noted above, were reasonable. Any oral statements concerning completion date made by employees or agents of the defendant were in the nature of opinions or predictions and did not bind the defendant, particularly, in view of Sections 24 and 25 of the contract which the plaintiffs admitted they understood. See transcript of deposition of Elfriede B. Couey, page 19, and transcript of deposition of Ronald Couey, pages 13 and 14. In this connection, it should be noted that one of the plaintiffs had professional real estate experience. “The law presumes fair play, it does not presume fraud or mistake of fact. These are matters which must be established by the party claiming them.” 12 Cal. Jur.2d, Contracts, Section 53, p. 253. This the plaintiffs have failed to do. Consequently, relief must be denied the plaintiffs on their allegation of fraud.
II
Penalty
Counsel for plaintiffs in his reply brief contends that he is entitled to return of the $3,000.00 deposit on the ground that such sum is a penalty rather than provision for liquidated damages and relies on Sections 1670 and 1671 of the Civil Code of Guam, although this ground for relief from penalty is not alleged in his complaint.
The plaintiffs are wilfully defaulting vendees. By a series of cases interpreting Sections 1670, 1671, 3275, 3307 and 3369 of the Civil Code of California, the Supreme Court of California has improved the position of a wilfully defaulting vendee so that a wilfully defaulting vendee can now recover his deposit from the seller if he proves that the seller’s damages were less than the amount the seller retained. For a case directly in point see opinion of Justice Traynor in Baffa v. Johnson, 216 P.2d 13, 35 Cal.2d 36 (1950). The California Code sections, cited above, are the *317same as the identically numbered sections in the Civil Code of Guam, therefore, we hold that Baffa v. Johnson is controlling and we follow its ruling. For discussion of rights of wilfully defaulting vendees and Baffa v. Johnson, see The California Land Contract, 48 Calif. L. Rev. 729 (1960); and The Supreme Court of California (1970-1971), 60 Calif. L. Rev. 705, 975 (1972).
As noted in the statement of facts, there was no evidence of the resale price of the property by the defendant nor was there any other evidence showing that the defendant’s damages were less than the amount of plaintiffs’ deposit, to wit: $3,000.00. Plaintiffs’ claim for relief on the ground that the $3,000.00 deposit was a penalty must be denied.
Judgment will be entered for the defendant. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487823/ | ABBATE, Judge
DECISION
The Court is of the opinion that the search of petitioner’s house was legal inasmuch as it was conducted pursuant to a valid search warrant. Although petitioner argues that the warrant was illegal insofar as it was based on information supplied by an untested and undisclosed informant, the Court is of the opinion that this informant meets the two pronged standard established in the Aguilar line of cases.
The first prong of “personal knowledge” is clearly met both from the attached affidavit as well as the supporting, supplemental transcript.
The second prong, reliability of informant, although not as clearly met as the first prong, is felt by the Court to meet the basic requirement of constitutional law. In this instance, the reliability of the informant is met by the independent corroboration of the informant’s information by the police officers acting pursuant to the information given to them by this informant in the same fashion as occurred in the case of State v. Marsden, 528 P.2d 1066. It should be noted here that in the Marsden case the setting was a warrantless arrest and here the search was conducted pursuant to a warrant. It has been held that in the latter setting less information is required than in the former, see Aguilar v. Texas, 378 U.S. 1509. Although same “poisoned fruits” questions arise as to that portion of the informant’s information which in essence was corroborated pursuant to an arrest which was subsequently determined to be illegal, the Court is of the opinion that this *319instance is distinguishable from Wong Sun v. U.S., 37 U.S. 471 inasmuch as the “tainted” information is not being used for probable cause purposes but rather for the purpose of corroborating an informant’s information in relation to a determination of that informant’s reliability.
So ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487824/ | ABBATE, Judge
DECISION
Petitioner regularly made a motion for summary judgment in its favor on the ground that there is no genuine issue as to any material fact and that it is accordingly entitled to a judgment as a matter of law. Extensive oral argument was held on two occasions and the parties submitted numerous and detailed briefs. In addition, upon oral argument respondent requested and was granted permission to supplement its original submissions by depositions, answers to interrogatories, and further affidavits in accordance with Superior Court of Guam Rule of Civil Procedure 56(e). Respondent has not set forth any specific facts showing that there is a genuine issue for trial of the following material facts.
Petitioner is engaged on Guam in the business of selling at retail various types of merchandise. Petitioner has the exclusive right to sell liquor, tobacco products, and other merchandise at the International Air Terminal (the “Air Terminal”) and the exclusive right to sell all such products anywhere on Guam for delivery at the Air Terminal.
No liquor or tobacco is delivered to a purchaser except in the sterile area of the Air Terminal. Either the liquor and tobacco is loaded in the belly of the aircraft for claim by the purchaser at his ultimate destination, or it is handed to him in the boarding process shortly before he departs Guam. The liquor and tobacco is delivered for the sole purpose of exporting it from Guam.
Petitioner pays gross receipts taxes on all sales made to customers at petitioner’s shops located other than at the Air Terminal, except sales of liquor and tobacco, delivery of which is made to the Air Terminal.
Petitioner was assessed additional gross receipts taxes in the amount of $253,996.70 for 1973. Of this amount, gross receipts taxes attributable to liquor and tobacco sales are *321$153,022.91. Petitioner was also .assessed additional gross receipts taxes in the amount of $270,876.18 for 1974. Included within this amount is $211,352.05 for sales of liquor and tobacco.
Guam’s gross receipts tax is a privilege tax which may not legally be applied to interstate or foreign commerce. Colonial Pipeline Co. v. Traigle, 421 U.S. 100 (1975); Manila Trading & Supply Co. (Guam) v. Maddox, 335 F.2d 150 (9th Cir. 1964). Petitioner’s sales and delivery of liquor and tobacco are in the flow of interstate and foreign commerce and are protected by the Constitution. See Manila Trading & Supply Co. (Guam), supra; Hostetter v. Idelwild Bon Voyage Liquor Corp., 377 U.S. 324 (1964); Epstein v. Lordi, 261 F.Supp. 921 (D.N.J. 1966); Ammex Warehouse Co. v. Dep’t of Alcoholic Bev. Con., 224 F.Supp. 546 (S.D. Cal. 1963). Accordingly, so much of the assessment in each of the years 1973 and 1974 that is attributable to sales of liquor and tobacco is unconstitutional and must be abated.
Included within the aggregate amount of the assessment for 1973 is the sum of $29,369.08 which was disallowed by respondent as a tax credit on tobacco tax admittedly paid by petitioner’s distributors. Petitioner is entitled to the drawback. Respondent has failed to set forth any specific facts to support its allegation that petitioner has not satisfied the requirements of Section 19592 of the Government Code of Guam. On the contrary, it is clear that both the purpose and specific requirements of the section have been complied with. The petitioner is entitled to a tobacco tax drawback in the amount of $29,369.08, and the assessment for 1973 should be further abated accordingly.
While as to all sales of liquor and tobacco and the tobacco tax drawback there is no genuine issue as to any material fact and petitioner is entitled to a judgment as a matter of lav/, issues of fact do exist with regard to sales other than *322liquor and tobacco made by petitioner and these should not be decided on a motion for summary judgment. Accordingly, so much of petitioner’s motion for summary judgment as relates to any sales other than liquor and tobacco is denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487827/ | BENSON, Judge
ORDER
Plaintiff's motion for an order requiring the production of certain documents came before the court on August 27, *3281976. After oral arguments, the matter was submitted for decision. The decision as to each request is set forth.
Request No. 2 — Denied.
Request No. 3 — Denied.
Request No. 4 — Denied.
Request No. 5 — Denied.
Request No. 7 — Denied.
Request No. 8 — Granted insofar as the Guam franchise holder is concerned, and for the period from January 1972 through January 1975.
Request No. 10 — Denied.
Request No. 13 — Granted for the period during which Lee Company had an interest in the Plaintiff and subsequent thereto as to documents which comment upon the Plaintiff’s performance of its franchise agreements.
Request No. 14 — Denied.
Request No. 15 — Granted insofar as the Guam franchise is concerned and for the period from January 1972 through January 1975.
Request No. 16 — Granted insofar as the Guam franchise is concerned and for the period from January 1972 through January 1975.
Request No. 19 — Granted.
Request No. 20 — Granted with respect to the Guam franchise.
Request No. 21 — Denied.
Request No. 23 — Granted.
Request No. 24 — Granted insofar as the Guam franchise is concerned and for the period from January 1972 through January 1975.
Request No. 27 — Granted.
Request No. 28 — Granted with respect to the Guam franchise.
Request No. 30 — Denied.
It is so ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487828/ | BENSON, Judge
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The above-entitled action came on for trial before a jury on August 2, 1976. John M. Webster, Esq. appeared as counsel for the plaintiff, Stephen A. Cronin, Esq. appeared for Defendant, J. L. Baker & Sons, Inc., and Messrs. Klemm & Dear, by Alan E. Dear, appeared for the Defendants J. L. Baker & Sons, Inc. and Insurance Company of North America.
The case was dismissed as to Benjamin P. Padua, Jr. who had never been served.
At the close of the evidence offered by the Plaintiff the court on its own motion directed a verdict in favor of the Defendants.
The Defendants moved also for a dismissal of the complaint on the ground its failure to state a cause of action in that it fails to allege either that Padua was an employee of J. L. Baker acting within the scope of his employment or that Padua was driving with the consent of J. L. Baker, owner of the truck.
*330FINDINGS OF FACT
1. On December 20,1973, the Plaintiff, a pedestrian near Route 1 in Asan, was struck, and as a result suffered injuries to his body, unconsciousness and pain.
2. No evidence was presented naming the Defendants, or of any negligent act, or that an act of Defendants caused the injuries to the Plaintiff.
From the foregoing facts, the court concludes:
CONCLUSIONS OF LAW
1. Plaintiff has failed to establish its cause of action.
2. Defendants are entitled to a directed verdict in their favor, with costs.
3. The case being decided on its merits in favor of the Defendants, it is unnecessary to rule upon Defendants' motion concerning an alleged defect in the complaint.
Let judgment be entered accordingly.
JUDGMENT
This action came on for trial before the Court and a jury, Honorable Richard H. Benson, Judge, presiding, and the issues having been duly tried and the Court having granted defense motion for dismissal and directed verdict as set forth in its Memorandum of Opinion:
IT IS HEREBY ORDERED AND ADJUDGED that the Plaintiff take nothing, that the action be dismissed on the merits, and that the Defendants J. L. BAKER & SONS and INSURANCE COMPANY OF NORTH AMERICA recover of the Plaintiff JAMES T. LESTER their costs of action. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487851/ | ABBATE, Judge
DECISION
In denying Defendant’s 5 October, 1976, Motion to Dismiss for prosecution’s non-compliance with a discovery order, this Court cites its Decision in the companion case People of the Territory of Guam v. Michael Imamura, 104F-76.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487852/ | ABBATE, Judge
DECISION
In denying Defendant’s 5 October, 1976, Motion to Dismiss for prosecution’s non-compliance with a discovery *367order and order for production of grand jury testimony, this Court cites the Decision in the companion case People of the Territory of Guam v. Michael Imamura, 104F-76.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487833/ | BENSON, Judge
ORDER
This matter came before the court on the motion of S. Déla Liana for an order dismissing the complaint under Rule 12. After oral argument on August 6,1976, the matter was submitted for decision.
Defendant first asserts that Section 6500.10 precludes action against him. The complaint does not allege that Defendant was an agent of the Government at the time of the alleged negligence. This assertion is rather contained in the Defendant’s memorandum filed June 30, 1976. Al*340though this assertion was not contested by the Plaintiff, the court refuses to rule on the merits of Defendant’s first ground in his motion because of the inadequacy of the showing of the factual basis upon which Defendant relies and the unappropriateness in a Rule 12 motion. His motion is therefore denied, with leave to renew in appropriate proceedings, if he is so advised.
Defendant next asserts that Public Law 13-115 requires certain screening procedures as a prerequisite to commencing a civil action and that such requirements have not been met. This motion is denied for the reasons set forth in the order in the case of van der Brag v. Paramaguru, Civil Case No. 518-76 filed today.
IT IS THEREFORE ORDERED that the motion be, and it hereby is, denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487834/ | BENSON, Judge
JUDGMENT
WHEREAS, on the 17th day of May, 1976, the defendant John F. Taitano, was indicted by the grand jury, duly convened, and charged with violation of Section 626.10(a) (1) of Guam Public Law 11-149; and
WHEREAS, on the 19th day of May, 1976, upon *341arraignment, the defendant entered a plea of Not Guilty and demanded a jury trial; and
WHEREAS, on the 26th day of July, 1976, the jury having been impanelled and the trial having been regularly had and by the verdict of the jury, found defendant John F. Taitano guilty of the offense of unauthorized, unlawful delivery of controlled substance (heroin); and
WHEREAS, on the 2nd day of August, 1976, a motion for judgment of acquittal was duly filed; and
WHEREAS, on the 18th day of August, 1976, arguments were heard by the court and the court having considered arguments of counsel denied the motion for judgment of acquittal; now, therefore
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that for the offense of unauthorized, unlawful delivery of controlled substance (heroin), the defendant, John F. Taitano, be, and is hereby sentenced to be confined in the Department of Corrections for a period of 15 months.
IT IS FURTHER ORDERED that the Director of Corrections is directed to transport the Defendant each day, seven days a week, to the Mental Health Center, Guam Memorial Hospital, in order that the Defendant can continue uninterruptedly his participation in the Methodone Program, so long as the Defendant is confined. Should the Mental Health Center inform the Director of Corrections that less frequent visits are required in the future, the Director of Corrections is authorized to transport the Defendant only on those days and at those times indicated as necessary by the Mental Health Center. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487836/ | BENSON, Judge
ORDER
This matter came before the court on the defendant’s motion to amend his answer. After oral argument on September 24,1976, the matter was submitted for decision; after review of written and oral arguments and of the entire proceedings, I find that the motion should be granted in part and denied in part, defendant having withdrawn his motion as to the defenses of estoppel and waiver.
It is ordered that the defendant may file and ..serve his amended answer which adds the affirmative defense of *344Section 343 of the Code of Civil Procedure, provided reasonable attorney’s fees (to be hereafter fixed) are paid plaintiff’s attorney as costs opposing this motion. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494171/ | ORDER RE: COMPLAINT
PAUL J. KILBURG, Bankruptcy Judge.
This matter came before the undersigned for ruling on stipulated facts and briefs in lieu of trial. The time for filing briefs has now passed and this matter is ready for resolution. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B) and (K).
STATEMENT OF THE CASE
Debtor seeks judgment against Alcoa Employees and Community Credit Union for amounts it set off against Debtor’s *506accounts at the Credit Union. He asserts two of the accounts are exempt child support and the other account is his daughter’s. The Credit Union asserts it is entitled to setoff based on consensual liens granted by Debtor.
FINDINGS OF FACT
The parties opted to submit this matter on stipulated facts and briefs in lieu of trial. The Court will make findings of fact based on the parties’ stipulation and other documents in the record.
Debtor filed his Chapter 7 case on June 10, 2005. He initiated this adversary proceeding on March 16, 2006. The complaint asserts the Credit Union improperly set off Debtor’s accounts and asks for judgment of $1,000.
On the petition date, there were three accounts at the Credit Union under Debt- or’s name with the following balances:
Account Balance on No. Owners 6/10/2005
112010 Michael and Tammy Kleinsmith $ 31.06
523540 Michael and Tammy Kleinsmith 139.51
439300 Lindsey, Tammy and Michael Kleinsmith 264.65
Pursuant to the stipulated facts, the first two accounts consist solely of child support funds. On Debtor’s amended Schedules B and C, he lists “Child support account at Alcoa Credit Union” with a value of $900 and claims it exempt under Iowa Code sec. 627.6(8)(d). By October 31, 2005, the balance in the second account was $694.59. Debtor asserts that the third account belongs to his daughter, although he is also named as an owner.
The Credit Union has a claim against Debtor of approximately $1,404 from a revolving loan account. Postpetition, the Credit Union placed an administrative hold on all three accounts in Debtor’s name. In its brief, the Credit Union states it has not set off the accounts and the deposits in the accounts remain awaiting the Court’s decision.
The parties stipulate that Debtor entered into a Membership and Account Agreement with the Credit Union when he became a member. Paragraph 3(c) provides that the Credit Union may enforce its rights “against any account of an owner or all funds in a joint account regardless of who contributed them.” Paragraph 19 provides that Debtor grants the Credit Union a lien on all accounts to secure all obligations he has to the Credit Union.
The parties additionally stipulate that Debtor has incurred approximately $1,000 in attorney fees and costs in pursuit of this matter. In his brief, Debtor asserts the Credit Union willfully violated the automatic stay by seizing the funds in his accounts and requests an award of attorney fees.
CONCLUSIONS OF LAW
There are several questions to be answered in this adversary proceeding. The Court must determine the extent of the Credit Union’s rights, whether the Credit Union may use setoff to enforce its rights against Debtor’s exempt property, whether the Credit Union may use setoff against a joint account and whether the Credit Union violated the automatic stay.
CREDIT UNION’S RIGHTS
As an initial matter, the Court notes that the Credit Union’s claim, and rights to setoff, are fixed at the time Debt- or filed his bankruptcy petition. See In re Wade, 354 B.R. 876, 880-81 (Bankr. N.D.Iowa 2006). Post-petition appreciations in the value of property inure to the benefit of the debtor. Id. Under this principle, the Credit Union has no rights in any funds deposited in Debtor’s accounts postpetition.
The Credit Union asserts a contractual lien in the accounts in Debtor’s name. In the Northern District of Iowa, the Bank*507ruptcy Court has stated that “[t]he reservation of a security interest by a financial institution in deposits held by that institution only reserves to the financial institution the right of setoff and does not create a substantive hen in the depositor’s accounts.” In re Hinderks, 1989 WL 484164, at *7 (Bankr.N.D.Iowa 1989) (Melloy, J.). The Hinderks court noted, however, that the credit union had a statutory lien under Iowa Code sec. 533.12. Sec. 533.12 was amended in 2004 to remove the language which grants a credit union a lien on the shares and deposits of its members. 2004 Iowa Acts ch. 1141, § 42. Based on the foregoing, the Court concludes that the Credit Union does not have a contractual or statutory lien on Debtor’s accounts. Rather, the membership agreement reserves to the Credit Union a right of set-off.
SETOFF AGAINST EXEMPT PROPERTY
The Hinderks case also addressed the issue of whether a credit union’s right of setoff applies against exempt property. Id. at *7-8. The court stated: “Were it not for the statutory lien, the Court would be inclined to find that the Credit Union’s contractual lien reserved to the Credit Union only the right of setoff, which would not apply against exempt property.” Id. at *8. This is based on Iowa case law related to the issue. In Banks v. Rodenbach, 54 Iowa 695, 7 N.W. 152 (Iowa 1880), the court found that a debtor’s exempt earnings were not subject to setoff. Likewise, in Millington v. Laurer, 89 Iowa 322, 56 N.W. 533, 535 (Iowa 1893), the court applied the statute exempting personal earnings from attachment or execution to bar a judgment creditor from reaching such earnings through setoff. The court noted that laws exempting property of debtors are to be liberally construed. Id. at 534. It concluded: “The defendant could not have appropriated the [exempt] money in controversy by means of an execution, — the ordinary method of enforcing a judgment, — but seeks to accomplish what he is prohibited from doing directly by indirect means. This the law will not permit.” Id. at 535; see also Ohio Cas. Ins. Co. v. Galvin, 222 Iowa 670, 269 N.W. 254, 256 (Iowa 1936) (applying Millington); E.G. Knight, Annotation, Availability of Debtor’s exemption to defeat counterclaim or set-off, 106 A.L.R. 1070 (1937) (identifying Iowa as one of the states with the view that exemption precludes counterclaim or set-off). Applying this precedent, the court in Hinderks stated:
The principle that exempt property may not be reached by a creditor through set off is thus an old and established principle in Iowa. The Court therefore finds that the Credit Union does not have the right of setoff in funds of the Debtor’s which are exempt.
Hinderks, 1989 WL 434164, at *7.
A case arising more recently in the Northern District of Iowa appears to be at odds with Hinderks. In In re Allen, 266 B.R. 713, 715 (Bankr.N.D.Iowa 2001), the court held that the federal government had the right to collect debt by offsetting against the debtor’s exempt tax refunds. It noted that the debtor’s right to exempt tax refunds is limited by the government’s right of setoff arising in the federal intercept statute, 26 U.S.C. § 6402(d). Id. at 715-16. The Allen ease is distinguishable from this case and from Hinderks. Allen considers a federal statutory right to set-off. This case and Hinderks deal with state law rights.
Based on the foregoing, the Court concludes that the Credit Union may not set off debt against Debtor’s accounts which contain exempt child support funds. The parties stipulate that two of Debtor’s three accounts consist solely of child support funds. Child support is exempt under Iowa Code sec. 627.6(8)(d) (2005). *508Having no valid lien on Debtor’s accounts, the Credit Union is precluded from setting off its claim against Debtor’s exempt funds.
SETOFF AGAINST JOINT PROPERTY
The Credit Union also claims a right to setoff Debtor’s debt against the account which is a joint account with Debtor’s daughter. The undersigned recently considered similar arguments in In re Cullen, 329 B.R. 52, 56 (Bankr.N.D.Iowa 2005). That ruling stated:
In order for [the credit union] to establish its right of setoff, it must demonstrate:
1. A debt exists from the creditor to the debtor and that debt arose prior to the commencement of the bankruptcy case.
2. The creditor has a claim against the debtor which arose prior to the commencement of the bankruptcy case.
3. The debt and the claim are mutual obligations.
To be mutual, the court must find that: (1) the debts are in the same right; (2) the debts are between the same parties; and (3) the parties stand in the same capacity. “The mutuality requirement is strictly construed.... The right to setoff under § 553 is permissive, not mandatory.” There can be no right to setoff where a creditor seeks to setoff its claim against one party in satisfaction of a debt owed to a third party. As a general rule, a joint debt cannot be set off against a separate debt, or conversely, a separate debt against a joint debt.
Id. at 56-57 (citations omitted). During a joint tenancy, each joint tenant is liable to have the tenant’s fractional interest taken in satisfaction of the tenant’s debts. Frederick v. Shorman, 259 Iowa 1050, 147 N.W.2d 478, 484 (Iowa 1966). As a general rule, garnishment is effective only to the extent of the debtor’s interest in the property attached and the lien of garnishment does not displace prior equities or rights. Verschoor v. Miller, 259 Iowa 170, 143 N.W.2d 385, 389 (Iowa 1966); In re Kondora, 194 B.R. 202, 209 (Bankr.N.D.Iowa 1996).
Based on the foregoing, the Court concludes that the Credit Union does not have any right to setoff Debtor’s debt against his daughter’s account in which he was joint owner. The account is titled in Debtor’s daughter, Debtor, and Debtor’s wife. Debtor asserts all the funds in the account belong to his daughter. The Court notes that the Credit Union’s membership agreement states that it may require any account established by a minor to be a joint account with an adult member. Considering Iowa law, the Court finds that Debtor’s daughter’s joint account is not liable for the debts of Debtor to the Credit Union. Therefore, the Credit Union may not use setoff to reach the funds in the joint account.
VIOLATION OF THE AUTOMATIC STAY
In the Cullen case, the undersigned also considered whether a credit union’s hold on a debtor’s accounts was permissible under the Bankruptcy Code and whether the credit union violated the automatic stay. 329 B.R. at 56-58. A temporary hold on a debtor’s account, pending a request for relief from the automatic stay, is permissible. Id. at 56, applying Citizens Bank v. Strumpf 516 U.S. 16, 21, 116 S.Ct. 286, 133 L.Ed.2d 258 (1995). An indefinite administrative hold, however, constitutes forbidden self-help in violation of the automatic stay. Cullen, 329 B.R. at 56. Such violation can subject the creditor to actual and punitive damages. Id. at 57-58.
In this case, the Credit Union placed a hold on Debtor’s three accounts *509on or near the petition date, i.e. June 10, 2005. This hold included not only Debtor’s prepetition deposits, but also additional funds deposited postpetition. The Credit Union never requested relief from the stay to pursue setoff. Instead, Debtor initiated this adversary proceeding in March 2006 asking the Court to order the Credit Union to turn over the funds in his accounts. Even now, more than a year and a half after the petition date, the Credit Union remains in possession of the funds in Debt- or’s frozen accounts. The Court finds the Credit Union has engaged in the type of self-help which is forbidden by the Bankruptcy Code and violates the automatic stay.
The Court concludes that the Credit Union’s violation of the automatic stay was willful. Its conduct was deliberate and it had knowledge of the bankruptcy filing. The record does not support an award of punitive damages. Debtor is entitled to damages for the stay violation in the amount of $1,000 which is the amount the parties stipulate Debtor has expended in attorney fees and costs in pursuit of this matter.
SUMMARY
The Credit Union is not entitled to enforce its claim against any postpetition deposits in Debtor’s accounts. It does not have a contractual or statutory lien on the prepetition balances in the accounts. Rather, the Credit Union is limited to a right of setoff. Under Iowa law, the Credit Union is not entitled to enforce its setoff rights against the two accounts which consist of exempt child support funds. Additionally, the Credit Union is not entitled to set off Debtor’s debts against his daughter’s joint account. All funds in all three of Debtor’s accounts at the Credit Union must be released to Debtor immediately.
By placing an indefinite administrative hold on Debtor’s three accounts, the Credit Union violated the automatic stay. This violation was willful, making the Credit Union subject to damages. The Credit Union is ordered to pay Debtor $1,000 for attorney fees and costs.
WHEREFORE, Debtor’s Complaint is GRANTED.
FURTHER, the Alcoa Employees & Community Credit Union is ordered to release all funds in Debtor’s three accounts to Debtor Michael D. Kleinsmith, immediately.
FURTHER, the Credit Union’s administrative hold on Debtor’s accounts constitutes a willful violation of the automatic stay.
FURTHER, judgment shall enter against the Credit Union and for Debtor in the amount of $1,000 as damages for violation of the automatic stay. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487837/ | BENSON, Judge
MEMORANDUM DECISION
This matter came before the court on the motion of Suburban Investors, Inc., for a temporary restraining order.
The motion should be granted provided Suburban Investors, Inc. provides security to pay damages suffered by plaintiff should it develop that plaintiff has been wrongfully restrained. Such damages consist of interest accruing $533.00 per day. Security must cover a 30 day period. If it is shown that mortgagee receives rents covering all or part of this amount the security may be eliminated or decreased accordingly. (Rules 65(c) and 65.1),
Hearing on the preliminary injunction shall be held at 10:00 o’clock a.m., Friday, October 8,1976.
Suburban Investors, Inc. must submit proposed temporary restraining order with the security to the court in sufficient time prior to the sale scheduled for 10:00 a.m., tomorrow. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487838/ | ABBATE, Judge
DECISION
On 18 March, 1976 the Honorable Janet Healy Weeks rendered nunc pro tunc an interlocutory judgment of divorce, after the court heard uncontested testimony pursuant to Plaintiff’s Complaint in Divorce, filed April 29, 1975. A Separation Agreement executed between Plaintiff and Defendant on December 1, 1975 was incorporated by reference into the decree and made a part thereof, “... and the property settlement contained therein is hereby made binding on the parties affected as if set forth in this Decree in full”.
Plaintiff on August 19, 1976, filed an Order to Show Cause, compelling Defendant to appear in court on September 2nd to explain alleged non-compliance with the •Separation Agreement. On September 2nd and 3rd this court heard testimony and oral argument on Plaintiff’s cause.
Defendant on August 30, 1976, filed an Order to Show Cause in Re Modification of Order for Alimony and *346Support, and it too was scheduled for hearing on September 2nd. However, Defendant decided to reschedule this action for a separate hearing at a later date.
This court has jurisdiction to enforce the provisions, both support and property settlement provisions, of the integrated Marital Separation Agreement since that agreement was fully incorporated into the Decree and the parties were ordered by the court to comply with its provisions. On the other hand, this court does not have jurisdiction to modify the support or property settlement provisions because the Marital Separation Agreement itself does not provide for modification. Plumer v. Plumer, 313 P.2d 549 (1957), Dexter v. Dexter, 265 P.2d 873 (1954).
The court held in abeyance its determinations in this case, and after due deliberation decides the following:
(1) Defendant is ordered to pay the following amount of alimony currently overdue:
December, 1975 $800.00
August, 1976 $450.00
(2) Defendant is ordered to make the following payments due Plaintiff for real estate settlements:
Lot 5110 $5,861.07
Lot 5119 $1,100.00
Lot 5223 $24.00
(3) Defendant is ordered to pay $200.00 in child support, this amount owable from December 1975. As to child-related payments for the minor child, Defendant is ordered to reimburse Plaintiff for these expenses only:
Bus Service $256.00
Clothing $64.40
(4) By stipulation Plaintiff agreed to drop the request for deprivation of Defendant’s child visitation rights in residence.
(5) Regarding furniture, Defendant is ordered to pay Plaintiff the $175.00 received from the sale of two (2) *347items, and to make available to Plaintiff all other furniture from the “Perezville House”. However, Plaintiff shall absorb any and all costs of moving said furniture to the desired location.
(6) No accounting by Defendant is required.
(7) Defendant is not required to pay Plaintiff’s counsel fees.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487839/ | ABBATE, Judge
DECISION
The Defendants were indicted on June 25, 1976, by the Superior Court of Guam Territorial Grand Jury and charged with violation of Section 626.10(a)(1) of Guam Public Law 11-149 by virtue of acts done on or about October 29, 1975. Defendants in their motion to dismiss *348filed on July 15,1976, allege both pre-indictment delay and alteration of the indictment. This court finds no cause to dismiss on either .ground as there is no prima facie showing of prejudice here to Defendants’ rights to due process or a fair trial.
As to the alteration in the indictment, the case law is clear that a change in the date to correct a typographical or clerical error goes to form only and is not prejudicial. (See Arnold v. U.S., C.A. 9th, 1964, 336 F.2d 347, 353, certiorari denied 85 S.Ct. 1348, 380 U.S. 982, 14 L.Ed.2d 275; Berg v. U.S., C.A. 9th, 1949, 176 F.2d 122, 126). The indictment here was changed from October 1976 to October 1975 and initialed by the Assistant Attorney General who made the correction. In a very similar case decided by the 4th Circuit Court of Appeals the October 23, 1962, date was corrected to 1961, and the court stated “. . . This obvious clerical mistake was in no way prejudicial. As the 1962 date had not yet arrived, the intent of the indictment could not have misled anyone”. (U.S. v. Zembito, C.A. 4th, 1963, 315 F.2d 266, certiorari denied 83 S.Ct. 1524, 373 U.S. 924, 10 L.Ed.2d 423). Clearly this is harmless error under Rule 52(a) of the Rules of Criminal Procedure for the Superior Court of Guam.
As to the allegation of prejudicial pre-indictment delay, U.S. v. Quinn, C.A. 8th (July 27, 1976) expresses the appropriate standard:
In determining whether a dismissal due to pretrial delay is proper, this court has balanced the reasonableness of the delay against the resulting prejudice to the defendant . . . applying this test we scrutinize the facts surrounding the delay and then determine whether the defendant has been substantially prejudiced . . .
The Quinn Court then cited U.S. v. Jackson, 504 F.2d 337, n. 1, 16 Cr. L. 2020, which states at page 339 “. . . at *349least where the government is not engaging in intentional delay in order to gain a tactical advantage over the accused, the defendant must affirmatively demonstrate prejudice”.
As in Quinn undercover activity relating to other offenses might have been jeopardized had prosecutions been ■brought immediately after these defendants did the alleged acts. Accordingly, a delay of eight (8) months is not unreasonable and Defendants have failed to affirmatively demonstrate prejudice.
In accord with the foregoing, the motion to dismiss is hereby denied.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487840/ | ABBATE, Judge
DECISION
Plaintiff’s motion for Partial Summary Judgment was filed on August 27, 1976. Plaintiff’s accompanying memorandum argued that Defendant had no legal justification for appropriating Plaintiff’s check and since there was no dispute as to facts Defendant’s act was a tort (conversion) as a matter of law.
Defendant’s opposition brief states, at page 11:
De Castro nowhere denies his signature on the Continuing Guaranty. Yet the Continuing Guaranty provided the whole basis of the Bank’s action in taking the proceeds of the check. . . . (Emphasis added.)
Defendant’s position is faulty, however, as Plaintiff points out in his Reply Memorandum, because the Guaranty itself does not justify the action taken by Defendant Bank.
. . . you are hereby authorized to apply against indebtedness of the borrower other than that guaranteed hereby any monies paid or available to you. (Emphasis added.)
DECISION
In oral argument before this Court on October 1, 1976, Defendant argued that the above quoted language of the Guaranty was clearly erroneous but if re-read in another way with the instrument as a whole gives a different result. This Court sees no basis for bringing in parol evidence of the intended meaning of the Guaranty instrument particularly where the Defendant Bank drafted the instrument. The language of the instrument is clear on its face and must be strictly construed against the drafting Bank.
Defendant’s second argument, that the Bank’s action is justified on the theory of a banker’s lien, is also mistaken. Such liens apply only to customers or depositors *351of the bank, not to payees of a check presented for cashing only. It is admitted by Defendant Bank that payee’s intention was to cash the check, not deposit it. Although Defendant cites numerous cases involving Banker’s liens, none of the cases pertain to the situation at bar where a check is presented by a payee for cashing only. Consequently the Bank exercised possession and control over said check without legal justification, which action was tortious.
Plaintiff’s motion for Partial Summary Judgment is hereby granted.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487842/ | ABBATE, Judge
DECISION
The defendant Isabel M. T. Cepeda filed on August 12, 1976, a Motion to Dismiss the Second Charge of the information on the basis that Section 415 of the Penal Code of Guam and said charge thereon are unconstitutional, vague, and violative of defendant’s right to freedom of speech. The People opposed this motion by its memorandum of law filed on August 19th.
The Second Charge reads as follows:
*353In that the said Isabel M. T. Cepeda, on or about the 12th day of. July, 1975, in the Territory of Guam did maliciously and willfully disturb the peace and quiet of persons at the Celebrity Inn, by her loud or unusual noise, in violation of the Penal Code of Guam. (Emphasis added.)
This Court finds that the Second Charge is an unconstitutional infringement upon the defendant’s right of freedom of speech and, therefore, grants defendant’s motion dismissing said charge.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487843/ | ABBATE, Judge
DECISION
Defendant moved to dismiss Count II of the Indictment by his motion filed 31 August, 1976. In Count II the *354Defendant is charged with Delivery of Controlled Substance in violation of Section 626.10(a)(1) of Guam Public Law 11-149.
On the date of the alleged incident, according to the grand jury transcript, police report and statement of officer Joseph, the Defendant was merely a passenger in the car driven by Joey Garcia, the alleged buyer of a capsule of heroin. Defendant was present when the transaction began at the car and was present when the transaction was later completed at the home of Joey Garcia. However, there was no evidence presented to the grand jury to link the Defendant to the transaction in any capacity other than that of bystander. Defendant was not shown to have uttered any words or gestures, done any acts or otherwise encouraged the “Delivery”. Nor can Defendant be considered an aider or abettor, or conspirator or accomplice on the basis of mere presence at the scene under either California case law, People v. Villa, 318 P.2d 828, 832, 275 C.A.2d 128 (1957); Tavine v. Superior Court, 238 C.A.2d 540, 544, 48 Cal. Rptr. 8 (1968) or Federal case law, United States v. Steward, 451 F.2d 1203 (1971).
This is not a situation where Defendant had exclusive dominion and control over a vehicle in which drugs were found. No evidence was presented to indicate Defendant’s knowledge of his companion’s felonious intent, his participation in the fruits of the “Delivery”, or his aid to Garcia to deliver the controlled substance or escape detection thereafter.
The People did not answer or contest this motion to dismiss which is hereby granted.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494172/ | MEMORANDUM OPINION
JOHN E. RYAN, Bankruptcy Judge.
I.INTRODUCTION
On July 22, 2002, Carolyn Dye (“Mov-ant”) filed an amended complaint against the defendants (collectively, “Defendants”), in part, to avoid and recover the debtor’s transfer of $9 minion to Andra Sachs (“An-dra”) on February 23, 2000 (the “Transfer”) under 11 U.S.C. §§ 547(b) and 550.1 Thereafter, Movant and Andra reached a settlement. In furtherance of the settlement, Andra consented to the entry of a judgment avoiding the Transfer under § 547(b) as a preferential transfer.
On August 25, 2006, Movant filed a motion (the “Motion”) for partial summary judgment, citing § 550, to recover $9 million from Communications Ventures III, LP, Communications Ventures III CEO & Entrepreneurs’ Funds, LP, Mayfield IX, and Mayfield Associates Funds IV (collectively, “Respondents”) as entities for whose benefit the Transfer was made. Respondents opposed. Following a hearing on December 11, 2006, I took the matter under submission to determine whether the entry of the stipulated judgment precludes Respondents from defending the avoidability of the Transfer.
II.JURISDICTION
I have jurisdiction over this matter under 28 U.S.C. § 157(b)(1). This is a core proceeding under 28 U.S.C. §§ 157(b)(2)(A), (F), (O).
III.STATEMENT OF FACTS
Andra and her husband, Brad Sachs (“Brad”), founded Flashcom, Inc. (“Debt- or”), a telecom startup, during the late 1990s. In June 1999, Respondents invested approximately $15 million for Debtor’s Series A preferred shares. As a result, David Helfich, Todd Brooks, and Kevin Fong (collectively, the “Directors”), alleged principals of Respondents, were appointed to Debtor’s board of directors.
Concerned with Andra’s continued involvement in Debtor, Respondents entered into discussions with Andra for her removal. This resulted in a Loan and Pledge Agreement (the “Loan Agreement”), dated September 3, 1999, whereby Respondents loaned Andra $1 million (the “Loan”) and agreed to loan Andra an additional $9 million upon Debtor obtaining at least $30 million in Series B financing. The Loan was evidenced by four non-recourse promissory notes (the “Notes”), and secured by Andra’s interest in 500,000 shares of Debt- or’s common stock. Respondents and An-dra also executed a series of four “Purchase Option” agreements and four “Put Option” agreements (collectively, the “Options”). In effect, the Options provided for the transfer of $1 million worth of Andra’s *521shares to Respondents in satisfaction of the Loan upon Debtor obtaining the above financing.2
On February 8, 2000, Debtor, Respondents, and Andra restructured the arrangement contemplated by the Loan Agreement and the Options. Respondents and Andra executed an amendment to the Loan Agreement (the “Amendment”), terminating the parties’ obligations under the Options. Also, Debtor, Respondents, and Andra executed a Stock Purchase Agreement (the “Stock Purchase Agreement”), reinstating Respondents obligation to purchase $1 million worth of Andra’s shares of Debtor’s common stock, and requiring Debtor to redeem $9 million worth of An-dra’s shares at 85% of the per share price.
Eight days later, Debtor and the Series B investors executed a Series B Preferred Stock Purchase Agreement (the “Series B Agreement”), providing for the purchase of $84 million of Debtor’s Series B preferred stock at $6.57 per share. In addition, the Series B Agreement provided that $9 million of the proceeds were to be used to redeem Andra’s stock. On February 28, 2000, Debtor paid Andra $9 million to redeem 1,611,604 shares at a redemption price of $5.58 per share.
On December 8, 2000, Debtor filed a voluntary chapter 11 petition. Thereafter, Debtor filed a plan of reorganization that was confirmed on December 11, 2001. Debtor’s plan designated Movant as the liquidating trustee for Debtor’s estate.
On July 11, 2002, Movant commenced this adversary proceeding (the “Stock Redemption Proceeding”) against Defendants. On July 22, 2002, Movant filed an amended complaint (the “Complaint”). In the Complaint, Movant alleged that Defendants either orchestrated or participated in certain unauthorized, improper, or otherwise avoidable agreements and transfers with Debtor between September 1999 and February 2000. Specifically, Movant asserted that the Transfer was avoidable as a preferential transfer to or for the benefit of Andra, and recoverable from Andra, as the initial transferee, or Respondents and the Directors, as entities for whose benefit the Transfer was made.
On September 2, 2005, Movant, Andra, and others reached a global settlement (the “Global Settlement Agreement”). The Global Settlement Agreement was designed to resolve the Stock Redemption Proceeding as to Andra.3 By order entered November 1, 2005, I approved the Global Settlement Agreement. On August 8, 2006, a judgment (the “Stipulated Judgment”) was entered, providing that: “(a) [t]he wire transfer by Flashcom, Inc. of $9 million made on February 23, 2000 to Memory Max, dba a Taste of Napa, which was made for the benefit of Andra Sachs, *522is avoided as a preferential transfer pursuant to 11 U.S.C. § 547(b).”
On August 25, 2006, Movant moved for partial summary judgment that, pursuant to § 550, she may recover $9 million from Respondents. Movant argued that entry of the Stipulated Judgment avoided the Transfer to the extent of $9 million, and therefore, she is entitled to recover $9 million from Respondents as entities for whose benefit the Transfer was made. Respondents opposed the Motion, arguing that they have the right to litigate the avoidability of the Transfer as a preference, and that they were not the beneficiaries of the Transfer. Following a hearing on December 11, 2006, I took the matter under submission to determine: (A) whether the entry of the Stipulated Judgment precludes Respondents from defending the avoidability of the Transfer under § 547(b); and (B) whether Respondents are entities for whose benefit the Transfer was made.
IV. DISCUSSION
A. Entry of the Stipulated Judgment cannot Deprive the Respondents of Their Right to Defend the §§ 547 and 550 Claims Asserted against Them.
Section 547(b) of the Code permits a bankruptcy trustee to avoid certain preferential pre-petition transfers of interests in property of the debtor. Section 550 provides in relevant part that:
[T]o the extent that a transfer is avoided under section 544, 545, 547, 548, 549, 553(b), or 724(a) of this title, the trustee may recover, for the benefit of the estate, the property transferred, or, if the court so orders, the value of such property, from
(1) the initial transferee of such transfer or the entity for whose benefit such transfer was made; or
(2) any immediate or mediate transferee of such initial transferee.
11 U.S.C. § 550(a)(l)-(2). Put simply, § 547(b) specifies a type of transfer that may be avoided by a bankruptcy trustee. See Crafts Plus +, Inc. v. Foothill Capital Corp. (In re Crafts Plus +), 220 B.R. 331, 334 (Bankr.W.D.Tex.1998). Separately, § 550 identifies the parties against whom a trustee may recover the avoided transfer for the benefit of the estate. Id.
Movant argues that the entry of the Stipulated Judgment avoided the Transfer to the extent of $9 million. For that reason, Movant argues that she is no longer required to establish the avoidability of the Transfer but may proceed to recover the value of the Transfer from Respondents under § 550(a), provided that she can show that they were entities for whose benefit the Transfer was made. Respondents reply that they are not bound by the Stipulated Judgment, and more importantly, that they have the right to litigate the avoidability of the Transfer.
This appears to be a matter of first impression in the Ninth Circuit. Movant has not provided any direct authority for her position.4 However, Movant asserts *523that a plain reading of §§ 547(b) and 550(a), and the separation between the concepts of avoidance and recovery compel summary judgment in her favor.5
As with any statutory construction dispute, I must begin with language of the statute. Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 450, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002). “[The] first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.” Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 846, 136 L.Ed.2d 808 (1997). “[I]f the statutory language is unambiguous and the statutory scheme is coherent and consistent[,]” then the court must cease its inquiry, and simply enforce the statute as written. Id. (quoting United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989)) (internal quotation marks omitted); see also Perlman v. Catapult Entertainment, Inc. (In re Catapult Entertainment, Inc.), 165 F.3d 747, 754 (9th Cir.1999). Only in rare cases may a court inquire beyond the plain language of a statute. Ron Pair, 489 U.S. at 242, 109 S.Ct. 1026; Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475, 112 S.Ct. 2589, 120 L.Ed.2d 379 (1992). “The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.” Robinson, 519 U.S. at 341, 117 S.Ct. 843.
The language used in § 550(a) is clear. Once a trustee proves that the elements of an avoidance statute, such as § 547, are satisfied “the unambiguous language of § 550(a) then identifies the party responsible for repayment of the preference.” Official Unsecured Creditors Comm. of Sufolla, Inc. v. U.S. Nat’l Bank of Oregon (In re Sufolla), 2 F.3d 977, 980 (9th Cir.1993) (citing Levit v. Ingersoll Rand Fin. Corp. (In re V.N. Deprizio Constr.), 874 F.2d 1186, 1194 (7th Cir.1989)); see also Kendall v. Sorani (In re Richmond Produce Co., Inc.), 195 B.R. 455, 463 (N.D.Cal.1996). The trustee may recover from “the initial transferee ... or the entity for whose benefit the transfer was made ... or ... any immediate or mediate transferee....” 11 U.S.C. § 550(a).
This conclusion does not end my inquiry. Importantly, neither the Code nor the Rules specify whether a § 550(a) transferee has the right to litigate and/or raise defenses to the avoidability of a transfer as a preference. See General Motors Acceptance Corp. v. Rodgers (In re Laguna Beach Motors, Inc.), 148 B.R. 317, 320 n. 4 (9th Cir. BAP 1992) (stating that the Code contains no language limiting who can raise the defenses provided in § 547(c)). Rather, the Code and Rules are silent, and hence ambiguous, leaving the applicable statutory language reasonably susceptible to conflicting interpretations.
*524Where a statute is ambiguous, a court may look beyond the statutory language to the legislative history, and the purpose of the statutory scheme to determine the intent of Congress. United States v. Buckland, 289 F.3d 558, 565 (9th Cir.2002) (quoting Adams Fruit Co. v. Barrett, 494 U.S. 638, 642, 110 S.Ct. 1384, 108 L.Ed.2d 585 (1990)); United States v. Davidson, 246 F.3d 1240, 1246 (9th Cir.2001). Here, these tools for determining congressional intent are of little assistance because the congressional record and the legislative history are silent with respect to the issue before the court.
However, another well-settled canon of statutory construction is not only helpful, but controlling. “[I]f an otherwise acceptable construction of a statute would raise serious constitutional problems, and where an alternative interpretation of the statute is ‘fairly possible,’ we are obligated to construe the statute to avoid such problems.” I.N.S. v. St. Cyr, 533 U.S. 289, 299-300, 121 S.Ct. 2271, 150 L.Ed.2d 347 (2001) (citation omitted); Edward J. DeBartolo Corp. v. Florida Gulf Coast Bldg. and Const. Trades Council, 485 U.S. 568, 575, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988). Courts do not have “the unfettered prerogative to rewrite a statute in order to save it or to ‘ignore the legislative will’ behind it.” Buckland, 289 F.3d at 564 (quoting Miller v. French, 530 U.S. 327, 341, 120 5.Ct. 2246, 147 L.Ed.2d 326 (2000)). The canon of constitutional doubt permits a court to avoid constitutional concerns “only where the saving construction is not plainly contrary to the intent of Congress.” Miller, 530 U.S. 327, 341, 120 S.Ct. 2246, 147 L.Ed.2d 326 (2000) (quoting Edward J. DeBartolo Corp., 485 U.S. at 575, 108 S.Ct. 1392 (1988)) (internal quotation marks omitted). Where the intent of Congress is clear, a court must give effect to that intent. Miller, 530 U.S. at 336, 120 S.Ct. 2246.
The Due Process Clause of the Fifth Amendment provides that “no person shall ... be deprived of life, liberty, or property, without due process of law.” U.S. Const. amend. V. A person’s right to due process of law is fundamental to our jurisprudence, Grannis v. Ordean, 234 U.S. 385, 394, 34 S.Ct. 779, 58 L.Ed. 1363 (1914), and for more than a century, the central requisite of due process has been the right to a meaningful opportunity to be heard. Fuentes v. Shevin, 407 U.S. 67, 80, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) (quoting Baldwin v. Hale, 1 Wall. 223, 68 U.S. 223, 233, 17 L.Ed. 531 (1863)). The purpose for providing such due process is clear: to prevent the mistaken or unfair deprivation of one’s property. Fuentes, 407 U.S. at 81, 92 S.Ct. 1983. Thus, a person has the right to be heard whenever his life, liberty, or property is at stake in a judicial proceeding. See Ownbey v. Morgan, 256 U.S. 94, 111, 41 S.Ct. 433, 65 L.Ed. 837 (1921); see also Dusenbery v. U.S., 534 U.S. 161, 167, 122 S.Ct. 694, 151 L.Ed.2d 597 (2002) (quoting United States v. James Daniel Good Real Property, 510 U.S. 43, 48, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993)).
To interpret §§ 547 and 550 Movant’s way would raise substantial due process concerns, and would lead to anomalous results. See Thompson v. Jonovich (In re Food & Fibre Protection, Ltd.), 168 B.R. 408, 415-16 (Bankr.D.Ariz.1994). Movant sued Respondents to avoid and recover the Transfer.6 As a result, Movant has clearly *525put Respondents’ property at stake. If Movant prevails, Respondents will be deprived of $9 million. Moreover, Respondents’ ability to defend the § 550 claim is of little consolation. The avoidability of the Transfer is a prerequisite to Respondents’ potential liability. Once it is determined that a preferential transfer was made, Movant need only show that Respondents received some benefit to hold them strictly liable. See General Elec. Capital Auto Lease, Inc. v. Broach (In re Lucas Dallas, Inc.), 185 B.R. 801, 808 (9th Cir. BAP 1995) (citing Danning, 922 F.2d at 547) (holding that initial transferees are strictly liable for an avoided transfer).
Based on the foregoing, I conclude that Respondents have a constitutional right to defend the § 547(b) claim asserted against them before they can be deprived of the value of the property transferred under § 550(a). I note that every court to address this issue has, for one reason or another, held that a stipulated or default judgment entered in an avoidance action does not preclude the defendants in a recovery action from disputing the avoidability of the transfer and raising appropriate defenses. See Thompson, 168 B.R. at 415-16; see also Morris v. Emprise Bank (In re Jones Storage and Moving, Inc.), 2005 WL 2590385, at *4-5, 2005 Bankr.LEXIS 662, *14-16 (Bankr.D.Kan.2005). Accordingly, it would be inherently unfair and inappropriate for this court to deny Respondents this fundamental right based on a settlement reached by Sachs, a co-defendant, for less than 1% of the requested recovery. Such an outcome would, for obvious reasons, open the door to potential substantial abuse.7
This interpretation is not contrary to the relevant legislative history, the overall statutory scheme, and Ninth Circuit precedent.8 Avoidance and recovery remain conceptually bifurcated as Congress intended. H.R. Rep. No. 95-595; S. Rep. No. 95-989; see also Sufolla, 2 F.3d at 980. Sections 547 and 550 remain distinct claims, requiring the litigation of different elements and defenses with different statutes of limitation.9 Furthermore, avoida-bility remains an attribute of the transfer. See Sufolla, 2 F.3d at 982 (quoting Deprizio, 874 F.2d at 1195). Movant is not required to prove that the Transfer is avoidable as to Respondents, but that each element of § 547(b) is satisfied.
As noted by numerous courts, § 547 addresses transfers, and not creditors or transferees. See Crafts Plus +, 220 B.R. at 334. That is, § 547 does not specify the proper defendant for a preference action. Id. Rather, § 550 identifies who the trustee may proceed against. Moreover, *526avoidance and recovery, while conceptually separate, do not occur in a vacuum. They are intertwined, as both are typically required to make the estate whole. As such, it is reasonable to believe that Congress intended the trustee to avoid and recover a transfer against the same entity, whether it be in one proceeding or two.10
Lastly, Respondents have not waived their fundamental right to due process. Respondents were named defendants to each cause of action in the Complaint. Similarly, Respondents answered without limitation. True, the Global Settlement Agreement was approved after notice and hearing at which Respondents were present. However, neither the court nor Respondents were aware of Movant’s intent to use the Stipulated Judgment to terminate Respondents’ right to litigate the preference claim. In fact, Movant indicated that approval of the Global Settlement Agreement would not affect her claims against Respondents. As such, the hearing on the Global Settlement Agreement did not provide Respondents with a meaningful opportunity to be heard.
In sum, to recover the amount of the Transfer from Respondents, Movant must prove the elements of avoidance under § 547(b) by a preponderance of the evidence. Movant has failed to provide any evidence regarding the avoidability of the Transfer. Accordingly, the Motion is denied.
B. Genuine Issues of Material Fact Exist Whether Respondents are Entities for Whose Beneñt the Transfer was made.
As stated above, to the extent a transfer is avoided, the trustee may recover the property transferred, or its value, from “(1) the initial transferee of such transfer or the entity for whose benefit such transfer was made; or (2) any immediate or mediate transferee of such initial transferee.” 11 U.S.C. § 550(a)(l)-(2). Because Andra is the initial transferee, recovery of the Transfer under § 550 from Respondents is not appropriate unless they constitute an “entity for whose benefit such transfer was made.” “Two frequently cited examples of an entity for whose benefit the transfer was made are (1) a guarantor of the debtor and (2) a debtor of the initial transferee.” 5 L. King, Collier On Bankruptcy ¶ 550.02[4] (15th ed. rev.2001) (citing Bonded Fin. Servs., Inc. v. European Am. Bank, 838 F.2d 890, 895 (7th Cir.1988) (“The paradigm ‘entity for whose benefit such transfer was made’ is a guarantor or debtor — someone who receives the benefit but not the money.”)). Importantly, the “entity need not actually benefit, so long as the transfer was made for his benefit.” Danning, 922 F.2d at 547.
Movant argues that Respondents are entities for whose benefit the Transfer was made because Debtor made the Transfer to extinguish Respondents’ obligations to Andra. Movant is correct that after execution of the Loan Agreement, Andra had a contingent right to payment from Respondents. Therefore, as contended by Movant, Respondents were debtors of Andra, and potential beneficiaries of the Transfer under § 550. See 11 U.S.C. § 101(5)(A), (12). However, Respondents argue that the Amendment and the Stock Redemption Agreement, executed fifteen days prior to the Transfer, terminated Respondents obligation to pay Andra $9 million, and as a result, Debtor made the Transfer to satisfy its contractual obli*527gation to pay Andra $9 million, as opposed to benefitting Respondents.
The Amendment, standing alone, did not terminate Respondents’ obligation to loan Andra $9 million contingent on Debtor obtaining the requisite financing. Rather, the Amendment terminated only the Options, requiring Respondents to purchase $1 million worth of Andra’s stock and requiring Andra to sell the same in satisfaction of the Loan. Arguably, Respondents’ contingent $9 million loan obligation remained unaffected. The Amendment stated that, except as expressly modified, the terms of the Loan Agreement remained in full force.
Debtor was also indebted to An-dra. Concurrently with the execution of the Amendment, Debtor, Andra, and Respondents executed the Stock Redemption Agreement. Debtor agreed to redeem $9 million worth of Andra’s shares. Respondents were neither guarantors nor co-obli-gors of Debtor’s obligation to Andra. Moreover, the Stock Redemption Agreement did not cross reference the $9 million loan, and specifically, did not provide for the release and/or satisfaction of Respondents’ loan obligation to Andra upon the Transfer. Therefore, a dispute of fact exists whether Debtor’s redemption of An-dra’s shares was intended to release Respondents’ obligation to loan Andra $9 million.
In sum, the parties dispute whether the execution of the Amendment and the Stock Purchase Agreement was intended to extinguish Respondents’ obligation to loan Andra $9 million, and ultimately, purchase $9 million worth of Andra’s stock. Neither agreement provides for the satisfaction of Respondents’ loan obligation upon their execution or upon the Transfer. Lastly, while the restructuring of the deal to buyout Andra enabled Respondents to purchase Series B Preferred shares, as opposed to Andra s common stock, genuine issues of fact exist whether Debtor was solvent at the time of the Transfer, and therefore, whether Respondents received any real benefit from obtaining preferred shares. Accordingly, genuine issues of fact exist whether the Transfer was made to benefit Respondents, and specifically, to satisfy Respondents’ contingent loan obligation to Andra.
V. CONCLUSION
The entry of the Stipulated Judgment did not avoid the Transfer. Respondents have a constitutional right to defend the claims asserted against them before they can be deprived of their property. Therefore, to recover the Transfer from Respondents, Movant must prove the elements of § 547. Moreover, genuine issues of material fact remain as to whether Defendants are entities for whose benefit the Transfer was made. Accordingly, the Motion is denied.
This memorandum decision shall constitute my findings of fact and conclusions of law.
. Unless otherwise indicated, all chapter, section, and rule references are to the Bankruptcy Code (the "Code"), 11 U.S.C. §§ 101-1330, prior to its amendment by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the "Act"), Pub.L. 109-8, 119 Stat. 23, because this case was filed before the Act's effective date (October 17, 2005), and to the Federal Rules of Bankruptcy Procedure (the "Rules”), Rules 1001-9036.
. Specifically, pursuant to the Purchase Options, Respondents had the right to purchase that number of shares equal to the amount of the Notes at 85% of the per share price. The Put Options, on the other hand, provided that Andra had the right to sell or put her shares to Respondents. Under both the Purchase Options and the Put Options, Respondents had the right to obtain the shares by applying the amounts due on the Notes.
. In pertinent part, the Global Settlement Agreement provided that Andra, without admitting liability and in furtherance of the Global Settlement Agreement, shall agree to the entry of a judgment in the amount of $9 million under § 547(b) in favor of Movant, and “Andra shall sign a second stipulated judgment pursuant to § 550(a) for recovery against Andra on the [Movant] Avoidance Judgment, which will be entered if Andra defaults upon her obligation to pay Movant $50,000 or $62,000 depending upon the amount recovered by Movant from [Respondents and the Directors] in the Stock Redemption Proceeding.”
. Movant relies heavily on Danning v. Miller (In re Bullion Reserve of North America), 922 F.2d 544 (9th Cir.1991), to support her position. In Darning, the trustee entered into an agreement with the initial transferee stipulating to the avoidability of the initial transfer under § 548. Id. at 546. The trustee then filed suit against the immediate transferee to recover the fraudulent transfer. Id. at 546. Movant finds Darning persuasive because the trustee established the avoidance of a transfer by stipulation with the initial transferee and then sought to recover from a different transferee under § 550(a). However, in Danning, the immediate transferee, subject to the § 550(a) action, conceded that the transfer *523was avoidable under § 548. Id. at 547. Therefore, the Ninth Circuit was "faced with the narrow issue of whether Miller was a ‘transferee' of the $1.5 million within the meaning of section 550(a)(1) or section 550(a)(2).” Id. The Ninth Circuit did not address whether the immediate transferee was precluded from litigating the avoidability of the transfer, and therefore Darning is of little help to the present dispute.
. Both the House and Senate Reports accompanying the Bankruptcy Reform Act of 1978 state that § 550 "enunciates the separation between the concepts of avoiding a transfer and recovering from the transferee.” H.R. Rep. No. 95-595, at 375 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6331; S. Rep. No. 95-989, at 90 (1978) reprinted in 1978 U.S.C.C.A.N. 5787, 5876.
. Movant emphasizes that the § 547 claim was asserted against Andra, only, and not Respondents. However, a review of the Complaint does not support Movant's position. Nowhere in the Complaint does it specify that certain claims are asserted against Andra or Respondents, only. Rather, the Complaint *525and each claim therein were filed against Defendants.
. For example, a potential transferee might stipulate to the avoidance of a transfer in exchange for a trustee’s promise to seek recovery from third parties. See Morris, 2005 WL 2590385, *5, 2005 Bankr.LEXIS 662, *16.
. The Ninth Circuit’s decision in Sufolla, upon which Movant relies, does not compel a contrary result. In that case, the Ninth Circuit was not forced to decide the issue currently before the court because, at trial, the defendant was afforded the opportunity to litigate the avoidability of the transfer and raise any defenses thereto. See Sufolla, 2 F.3d at 978-79.
.Movant makes much of the fact that § 550(f)(1) provides that a proceeding to recover a transfer must be commenced not later than the earlier of one year after the avoidance of the transfer, or the time the case is closed or dismissed. However, my interpretation does not render this subsection meaningless because a trustee has a specified time to avoid a transfer and an additional year after avoidance to recover the transfer under § 550.
. This belief is further supported by § 547(g), which provides that "the creditor or party in interest against whom recovery or avoidance is sought has the burden of proving the nonavoidability of a transfer....” 11 U.S.C. § 547(g) (emphasis added). | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494173/ | DECISION APPORTIONING OWNERSHIP INTERESTS, AND ORDER FOR PARTITION AND SALE OF PROPERTY
ARTHUR N. VOTOLATO, Bankruptcy Judge.
Heard on the Plaintiff Nancy Walker’s Complaint against Thomas Degnan (“Deg-nan”) and mortgagee St. Anne’s Credit Union of Fall River, MA (“St. Anne’s”),1 alleging inter alia that Degnan holds real *653estate in Little Compton, Rhode Island (the “property”), as trustee, for her benefit.
BACKGROUND
An understanding of the now defunct relationship of Walker and Degnan is helpful (and necessary) to resolve this dispute. In 1998, when the parties were involved both personally and in business, and because she was in financial trouble, Walker asked and Degnan agreed to purchase her house which was scheduled to be sold at foreclosure. Degnan also allegedly agreed to hold the legal title to the property for one year, or until Walker regained financial stability, and that he would reconvey the property at Walker’s request. Walker complains that although she has asked Degnan to convey the property to her, he refuses to do so.
Degnan initially denied the existence of an agreement and filed a counterclaim against Walker seeking both legal and equitable title to the property, or alternatively, a lien against the property for the value of his services and cash contributions, which he says had a lot to do with the increase in the market value of the property during the parties’ odyssey of increasingly hard financial times and deteriorating personal and business relationships.
Although Walker and Degnan each allege having made significant cash contributions toward the debt service and maintenance of the property for the past nine years, neither has offered competent evidence to support her or his respective position. Basically this trial consisted of mostly talk, and little substance or proof. Because the parties have left the Court with a record that makes a resolution according to normal evidentiary standards impossible, but instead limits and requires the outcome to be based on the application of general equitable principles, I find for the reasons discussed below, that Walker and Degnan each own a 50% interest in the property, and order its partition and sale, with the net proceeds to be distributed equally between the parties.
DISCUSSION
In 1985, Walker purchased land in Little Compton, Rhode Island, and built the residence which is the subject of this dispute. In 1993, Walker filed a Chapter 11 case that was later converted to Chapter 7, and she received a discharge in June 1995. Walker managed to hold onto her home during the bankruptcy, but not long thereafter the property was again facing foreclosure. In an effort to save the property, Walker concocted what she herself later described as a “hare-brained scheme”, and proposed to Degnan, her business2 and social partner (who, at the time was able to qualify for financing), that he should purchase the property for her at the foreclosure. Degnan agreed, and in April 1996, was the successful bidder at the sale. According to Walker she provided Degnan with the required $30,0003 deposit, and Degnan financed the balance of the purchase price with a $120,000 mortgage loan from St. Anne’s Credit Union.
Walker asserts that their oral agreement also provided that after one year, and upon re-establishing her credit, she would obtain refinancing and relieve Deg-nan of his personal liability under the note and mortgage, whereupon he would recon-vey the legal title to her. In the mean*654time, it was Walker’s obligation to pay all expenses, including mortgage, insurance, taxes and maintenance. Initially, Degnan denied having agreed to reconvey the property to Walker, but at trial conceded that essentially he was acting as a straw, and that Walker would occupy the property and pay all of the expenses associated with owning it. His present position is that Walker has failed, all along, to meet her financial obligations regarding the property.
By May 1998, Degnan was himself in financial trouble, the mortgage was in default, and the future of the property was again in jeopardy. So on May 11, 1998, in order to stop a scheduled foreclosure, Deg-nan filed his own Chapter 13 case. At no time during the pendency of his case did Degnan disclose that Walker asserted a claim of ownership in the property. He did testify, however, in a deposition that prior to his bankruptcy he considered that the property belonged to Walker, but that after he had to file for bankruptcy he felt that whatever agreement they had was ended. On the date of Degnan’s bankruptcy filing the St. Anne’s mortgage was delinquent in the amount of $13,500. Neither the plan nor the confirmation order addressed an ownership dispute, and Walker raised no title issues until November 2003, when she filed the instant Complaint alleging that she is the owner of the property. Degnan completed his Chapter 13 plan and received a discharge on March 15, 2006. Walker has occupied the property continuously, and presumably rent free.
Walker testified that prior to and during Degnan’s bankruptcy, she repeatedly asked him to convey the property to her, but to no avail. She also suggests that Degnan’s refusal to convey the property is an afterthought, prompted by the substantial increase in value of the property since it has been in his name.4 Walker further contends that she kept her part of their agreement by reimbursing Degnan for the mortgage payments he made, and only seeks to have the property returned to her per the oral agreement.5
Conversely, Degnan vehemently denies that Walker performed as required, pointing to her repeated and continuous payment defaults, and the fact that he was forced to file for bankruptcy himself to rescue the property from foreclosure. Additionally, Degnan asks that he be declared the sole owner of the property because for nine years he has borne, and still has, the legal and financial responsibility for the property, including the ongoing mortgage payments, taxes, etc. Given the equity in the property (approximately $400k as of November 2005), this argument can hardly be expected to evoke empathy for Degnan.
THE LEGAL ARGUMENTS
Resulting Trust:
Walker’s first argument is based on her claimed status as the beneficiary of a resulting trust. Resulting trusts may arise in one of two ways: (1) When purchase money is contributed by one party and the title is taken in the name of another; or (2) When an express trust fails in whole or in part.6 Restatement (Third) of *655Trusts §§ 7, 9 (2003); Fleet Nat'l Bank v. Valente (In re Valente), 360 F.3d 256 (1st Cir.2004) (recognizing the validity of resulting trusts under Rhode Island law); Carrozza v. Voccola, 2006 WL 2405891 at *3 (R.I.Super.2006), citing Desnoyers v. Metropolitan Life Ins. Co., 108 R.I. 100, 272 A.2d 683, 689 (1971); Cetenich v. Fuvich, 41 R.I. 107, 102 A. 817, 820-21 (1918) (acknowledging the existence of purchase money resulting trusts under Rhode Island law).
Whether a resulting trust has arisen is a matter of state law, see Marquette Credit Union v. Taft (In re Dexter Buick-GMC Truck Co.), 2 B.R. 627, 629 (Bankr.D.R.I.1980), and the burden of proof is on the claimant to prove its existence by clear and convincing evidence. Cutroneo v. Cutroneo, 81 R.I. 55, 98 A.2d 921, 923 (1953); Roseman v. Sutter, 735 F.Supp. 461, 464 (D.R.I.1990).
Under Rhode Island law one element of the creation of a resulting trust is the source of the funds used to purchase the property, as well as the parties’ intent to retain the beneficial ownership of the property. Carrozza, 2006 WL 2405891 at *3, citing Cetenich, 102 A. at 821. Gooding v. Broadway Baptist Church, 46 R.I. 106, 125 A. 211, 213 (1924); U.S. v. One Parcel of Real Property with Bldgs., 942 F.2d 74, 82 (1st Cir.1991) (simply paying for some portion of the property does not establish a resulting trust; one must also show that at the time of the purchase the parties intended that a specific ownership interest would be acquired); Roseman, 735 F.Supp. at 464; Campanella v. Campanella 76 R.I. 47, 68 A.2d 85, 88 (1949). A general contribution towards the entire purchase price, without the intent to create a specific ownership interest in the property will not create a resulting trust. Gooding, 125 A. at 213; Cutroneo, 98 A.2d at 923.
With that as background, Walker has the burden of proving by clear and convincing evidence that: (1) At the time of the April 1996 foreclosure sale, it was the intention and understanding of the parties that although Degnan took the legal title, Walker retained the beneficial interest in the property; (2) that Walker contributed substantially all of the $30,000 deposit; and (3) said payment was more than a general contribution towards the total purchase price. It is now undisputed that it was Walker’s idea to have Degnan purchase the property at the foreclosure sale, and Degnan now concedes that he understood that Walker was to retain the beneficial ownership interest in the property. But Degnan’s present position is that Walker’s chronic failure to relieve him of responsibility for the note and mortgage, and for failing to pay the upkeep and expenses over a nine year period, negate her claim to any interest in the property.
Based upon the evidence, as discussed below, there was an agreement that Deg-nan would buy and hold the property for Walker’s benefit and that Walker would pay the costs of ownership. So on that issue, Walker passes the initial hurdle for establishing a resulting trust.
Regarding the $30,000 Walker allegedly gave Degnan for the down payment, it is not possible to determine, even approximately, the amount paid by Walker.7 Even if fully persuaded by Walker’s testimony, I could find that, at best, she contributed $22,500 of the $30,000 deposit. Degnan, however, contends that most of the deposit money came from Sakonnet Auctioneers and Appraisers (“SAA”), the business jointly owned and operated by these parties, and because of his fifty per*656cent interest in “SAA”, he should be credited for at least half of the deposit money paid by “SAA”. Not a bad argument, but not addressed at the hearing, and again there is no evidence of what was paid by “SAA”, or what understanding there was as to said payments.
In the end, neither Walker nor Degnan have offered evidence sufficient to identify the source(s) of the $30,000. Therefore, the most that can be said is that Walker made an undetermined general payment towards the entire sum, and that between the two of them Degnan and Walker came up with sufficient funds to purchase the property at foreclosure. Campanella, 68 A.2d at 88 (court held that a resulting trust did not arise where the court could not determine the source of the funds used to purchase the property). Here, for the same reason, Walker has failed to establish the existence of a purchase money resulting trust, and her request for relief on that ground is DENIED.
Constructive Trust:
Alternatively, Walker argues that Degnan holds the property as a constructive trustee for her benefit. A constructive trust arises where one person holds title to property subject to an equitable duty to convey it to another,- if the title holder would be unjustly enriched if he or she were permitted to retain the legal title to property. Desnoyers, 272 A.2d at 690. Necessary for the creation of a constructive trust are: (1) the existence of a fiduciary or confidential relationship; and (2) the breach of a promise or an act involving fraud that occurred as a result of the confidential relationship. Dellagrotta v. Dellagrotta, 873 A.2d 101, 111 (R.I.2005); Clark v. Bowler, 623 A.2d 27, 29 (R.I.1993); Connor v. Sullivan, 826 A.2d 953, 960 (R.I.2003). As with resulting trusts, the claimant has the burden of proof by clear and convincing evidence. Id.
On the fiduciary or confidential relationship issue, Walker’s several witnesses corroborated her assertion that Degnan purchased the property at her request and for her benefit. While there are no hard rules to determine whether a confidential relationship exists, some guidance is available by considering a variety of factors, “including the reliance of one party upon the other, the relationship of the parties prior to the incidents complained of, the relative business capacities, or lack thereof, of each of the parties, and the readiness of one party to follow the other’s guidance in complicated transactions.” Simpson v. Dailey, 496 A.2d 126, 129 (R.I.1985); A. Teixeira & Co., Inc. v. Teixeira, 699 A.2d 1383, 1387 (R.I.1997) (the term “fiduciary is a broad concept that might be correctly described as anyone in whom another rightfully reposes trust and confidence.”)
Although it is not evident when their relationship began or ended, the Court is satisfied, based upon their business and social connections (and the circumstances which resulted in the present state of the title to the property), that a confidential relationship existed between Walker and Degnan when the property was purchased at foreclosure by Degnan in 1996.
Given the existence of such a relationship, Walker must also prove either a fraudulent act, or breach of a promise in order to establish a constructive trust. “For fraud to lead to the creation of a constructive trust, the evidence must show that the holder of [the] legal title procured [the] title through fraud.” J.K. Social Club v. J.K. Realty Corp., 448 A.2d 130, 134 (R.I.1982). “With respect to real property there must be some element of fraudulent conduct by the person in possession of the property in procuring the conveyance in order for a constructive *657trust to arise.” Curato v. Brain, 715 A.2d 631, 634 (R.I.1998). There is no evidence in this case to even suggest that Degnan acquired the property through fraud. To the contrary, title to the property ended up with Degnan at Walker’s request.
That leaves the question whether there was a breach of promise to reconvey the property. Walker contends, frivolously, that she made monthly mortgage payments of $1,000 to St. Anne’s from April 1996 thru November 2002 (but this obviously cannot include the mortgage arrear-age due at the time of Degnan’s bankruptcy). That assertion is also contradicted by documentary evidence that St. Anne’s was paid $14,369 during 1996 8 and 1997 by Sakonnet Auctioneers and Appraisers— while Walker and Degnan each owned fifty percent of the business. Because “SAA” funds were commingled, and with no evidentiary support, it is not possible to credit Walker with 100% of those payments. In 1998 and 1999, St. Anne’s reports it was paid $12,482, with each party disputing the amount paid by the other during the period. Adding further confusion to the process of sorting out numbers, both Walker and Degnan admit they “can only account for $2,080 apiece during this time period [1998-1999] in their respective compilations, leaving $8,332 unallocated.” Plaintiffs Post-Trial Memorandum, Doc. No. 94, p. 12.
In 2000, St. Anne’s received $14,019— and Degnan concedes that $6,050 was paid by Walker; however, $1,500 of the $14,019 is unaccounted for by either party. Similarly in 2001, St. Anne’s received $16,661— $1,050 of which was paid by Walker; and again, $3,436 of the $16,661 is not accounted for by either party.
The payments made to St. Anne’s during 2002 and 2003 were in excess of $35,000, and are all attributable to payments through Degnan’s Chapter 13 plan. Walker contends that during this period she made cash payments to Degnan or gave him merchandise9 in exchange for mortgage payments made by him. The amount Walker contributed during this period is left wide open, and she has not shown with any specificity what was paid to Degnan. Finally, in 2004 and 2005, St. Anne’s was paid $4,672, an amount that Degnan claims he paid, and which Walker does not dispute.
Degnan urges this Court to accept his “calculations” which show that he has contributed $76,997, and that Walker paid $39,340 from 1997 to 2004. According to Walker, she paid $47,165 and Degnan paid $68,376 for the same period. Payments of $13,008 cannot be logically allocated to either party. Evidence at this level of disarray would be hard to imagine, but it is what it is.
Based upon the entire record, one finding that can be easily and safely made is that subsequent to her own bankruptcy, Walker never achieved the financial ability to reimburse Degnan for his contributions, or to remove his name from the note and mortgage. It is also clear that, viewing everything most favorable to her, Walker did not fulfill her obligation to pay all of the mortgage and other expenses associated with the ownership of the property. Additionally, I am not satisfied that Deg-*658nan breached his promise to reconvey, i.e., he was never in a tenable position to give the title back to Walker, because of his continuing liability on the note and mortgage. Essentially, by her continuous defaults, Walker forced Degnan to keep the property in his name, and left him no choice other than to continue making payments to the best of his ability. The clearest fact in this case is that neither party had the ability to save the property from foreclosure without the help of the other, and that under all of the circumstances, a constructive trust in favor of Walker was not created.
Equitable Liens & Equitable Relief:
Both parties also claim equitable liens against the property, and while Walker admits owing Degnan “some money” for his contributions, and concedes that Deg-nan may pursue what he is owed under an equitable lien theory, she provides this Court with no clue as to what that amount might be.
An equitable lien is a mechanism used to enforce an informal claim or right to property. Darr v. Muratore, 143 B.R. 973, 976 (D.R.I.1992). Specifically, an equitable lien may serve to reimburse a party for contributions made toward the improvement, maintenance, and preservation of a property, East Providence Const. Co. v. Simon, 54 R.I. 247, 172 A. 251 (1934), and in its application the court may order the sale of the property to balance the positions of the parties. Amaral v. Beig, 1992 WL 813572 (R.I.Super. Ct. June 17, 1992). Where an equitable lien has been established, a determination needs to be made regarding the value contributed by the party seeking the lien. See id. at *4 (court ordered partition of the property after determining the actual amounts contributed by all parties). Here, however, for reasons previously complained of by the Court, i.e., the absence of adequate proof by either side to support their respective positions, the actual contributions of the parties is unascertainable. As further example, in her Post-Trial Memorandum Walker agrees to pay Degnan for his contributions. However, she also says: “This comes to anywhere from $33,989.00 to $81,384.00, depending on how one counts.” Plaintiffs Post-Trial Memorandum, Doc. No. 94, p. 16. Even worse, this does not include the mysterious $13,008 which neither party is able to identify. Id.
Similarly, Degnan’s analysis presents a confusing array of possible results, including the assertion that St. Anne’s calculations are flawed, resulting in $7,885 which neither party can reconcile. Defendant’s Posh-Trial Reply Memorandum, Doc. No. 95, p. 5. As to this, Degnan argues that any monies left as “unallocated” by Walker should not affect his contributions, but rather, the Court should apportion these sums between the parties on a pro-rata basis, depending on their “known contributions.” 10 Id. By any standard, this entire business relationship and the trial as well, have been models in how not to do things, and, if given a choice, not one this Court would follow. But we will do what we can with what we have. Having said that, a basic issue that needs to be addressed, and one that will not go away, is the principle that damages “must be proven with a reasonable degree of certainty, and must establish reasonably precise figures and cannot rely upon speculation.” Nat’l Chain Co. v. Campbell, 487 A.2d 132, 135 (R.I.1985); see also Kelley v. Medeiros (In re Kelley), 131 B.R. 532 (Bankr.D.R.I.1991); Alterio v. Biltmore Constr. Corp., 119 R.I. 307, 377 A.2d 237, 240-241 (1977) (award of damages must *659rest on legally competent evidence establishing the nature and extent thereof, and may not be the result of conjecture). The burden is on the party seeking recovery, and it is not for the courts to speculate. Id. at 241. These rulings come from actions at law for damages, and hopefully do not control in cases such as this one, which by its nature requires equitable treatment, if the dispute is ever to be resolved. Based on the evidence, an attempt to quantify, with any certainty, the relative interests of the parties would be pure speculation. In fact, both parties admit significant discrepancies as to their respective positions, causing their own calculations to produce varying and speculative results. Consequently, both Walker and Degnan’s requests to impose equitable liens are DENIED.
General Equitable Relief
The trial and the record in this case are more reminiscent of an irreconcilable family court dispute than a bankruptcy matter, and the parties seemed more interested in taking personal jabs at each other, than providing the Court with the goods to determine their respective interests. Given the failure of proof by both parties on the central issue in this case, i.e., who contributed what to preserve and maintain the property, the Court is left with no conventional alternatives, but in the end it is clear that this property would be long gone and in the hands of a third party were it not for the combined efforts of Walker and Degnan to preserve it. Originally, this was Walker’s property and when facing foreclosure she developed a strategy to save it, and Degnan went along. Unfortunately, Walker’s plan did not materialize because she was never financially able to relieve Degnan of the responsibility for the property. Rather than abandoning ship, Degnan picked up the slack and made substantial payments to St. Anne’s, and others, and when the property was facing foreclosure again in 1998, Degnan himself filed for bankruptcy, prevented its sale to a stranger, and preserved the equity which has become the real subject of this litigation. While neither party will ever admit to it, this was genuine, albeit unintended, teamwork to achieve a common goal. Therefore, based on the totality of the circumstances, and for want of a mathematically correct way to solve the puzzle, this Court concludes that each party has a 50% interest in the property. But for the substantial increase in the value of the subject property, which is solely the result of upward movement in the real estate market, there would be nothing for the parties to argue over. While both parties played important roles in preventing two foreclosures, neither can claim credit for the substantial increase in the value of the property during the period in question. In the absence of any competent evidence upon which to resolve this dispute, allowing the parties to share the spoils appears to be an equitable, if not precise result.
To implement this ruling, partition of the property is required, and the parties are ORDERED to market and sell the property forthwith, see 11 U.S.C. § 105(a). To that end they shall select and hire within ten days, a mutually agreeable realtor to market the property, and if they cannot agree on a realtor, the Court will make the appointment on day eleven. From the sale proceeds, all secured debt, municipal charges, taxes, and customary closing costs shall be paid, and the net proceeds distributed equally between Deg-nan and Walker. For tax purposes, each party, as a 50% owner of the property, shall be responsible accordingly for his or her respective tax liability resulting from the sale.
*660Enter judgment consistent with this decision.
. Although St. Anne’s is a named defendant in this Adversary Proceeding, the trial proceeded essentially without its involvement, with the parties in agreement that the reason St. Anne's was named as a party, is the possibility of a dispute over the amount it is owed. The only relief requested thus far against St. Anne's is that it be required to produce an accounting, which we believe has been done.
. Degnan and Walker were 50/50 co-owners of Sakonnet Auctioneers and Appraisers ("SAA”), which they operated until October 1998.
. This sum is disputed. Degnan contends that of the $30,000, he received only $11,000 from Walker.
. The most recent appraisal shows the property to be worth approximately $540,000, versus $180,000 when Degnan purchased the property at foreclosure in 1996.
. Neither party has raised a statute of frauds issue, as constructive and resulting trusts arise by operation of law and are not covered by that doctrine. See Matarese v. Calise, 111 R.I. 551, 305 A.2d 112, 120 (1973); See also R.I. Gen. Laws § 9-1-4 (1956).
.The law of express trusts is not relevant in this discussion.
. The conflicting evidence varies anywhere between $11,000 to $22,500.
. The figures for 1996 through 2004 were provided by St. Anne's, as payments received and credited towards the mortgage. Degnan contends that the numbers are inaccurate because St. Anne's calculated the payments for calendar years 1996 to 2000 differently from the payments it received in calendar years 2001 to 2004, resulting in an error of $7,885 — whatever that means.
. This contention introduces unsubstantiated allegations of bartering, which makes matters even more subjective, and less ascertainable.
. In this case, a more classic oxymoron would be hard to imagine. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487845/ | BENSON, Judge '
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The Plaintiffs appeared by its attorney, Mr. E. R. Crain and the Defendants also appearing by its attorney, Mr. Mark Cowan. After trial the case was then submitted for decision.
The parties stipulated that Plaintiff company had issued a policy of collision insurance on the car of Frankie C. Cruz; that an accident occurred on September 15, 1973, between the car of Frankie C. Cruz and the car owned by Juanita P. Quitugua; that Plaintiff company expended $627.50 in fulfillment of its obligation to Frankie C. Cruz for the repair of his car; that Frankie C. Cruz had subrogated Plaintiff company to his rights against Defend*357ants, that the amount of $75.00 had been paid by Juanita P. Quitugua to Frankie C. Cruz, and therefore Frankie C. Cruz was dismissed as a party Plaintiff.
The trial was had on the issues of liability for the accident and whether there had been an accord and satisfaction.
FINDINGS OF FACT
1. The car owned by Juanita P. Quitugua was being driven by Jose P. Quitugua, her son, at the time of the accident.
2. The car owned by Frankie C. Cruz was being driven by Lourdes Cruz, his wife, at the time of the accident.
3. At the time of the impact, Defendant’s car had been travelling excessively fast and was out of control.
4. Just prior to the accident the car of Frankie C. Cruz was being driven slowly. It was entirely within its proper lane of travel at the time of the impact.
5. Defendant, Juanita P. Quitugua, paid to Frankie C. Cruz’s wife $75.00 on September 29, 1973. The payment was made by the check admitted as Exhibit 1. This sum corresponded to the deductible portion for which Frankie C. Cruz was obligated according to the terms of his policy.
6. When Defendant paid, she knew it was Frankie C. Cruz’s portion of the payment for repairs; that the insurance company would pay the remainder. She did not .know the total cost of repairing Frankie C. Cruz’s car. Although statements may have been made by Frankie C. Cruz to Juanita P. Quitugua indicating a release of her, she made the payment knowing the insurance company had an interest in the matter.
CONCLUSIONS OF LAW
1. Plaintiff is entitled to judgment against Defendants for $627.50 with costs.
*358JUDGMENT
This cause came on regularly for trial on the 20th day of September, 1976, before the Honorable Richard H. Benson, Judge, presiding, sitting without a jury. The plaintiffs appeared by their attorney, Mr. Robert Shoecraft, and the defendants appeared by their attorney, Mr. Mark Cowan, and evidence both oral and documentary having been presented by both parties and the cause having been argued and submitted for decision and the court having made and caused to be filed its written Findings of Fact and Conclusions of Law
IT IS ORDERED, ADJUDGED AND DECREED that plaintiffs have judgment against Jose P. Quitugua and Juanita P. Quitugua, jointly and severally in the amount of $627.50 together with costs of this action. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487846/ | BENSON, Judge
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The above-entitled cause was tried on June 21,1976. The *359Plaintiff appeared by its attorney, Mr. Stephen A. Cronin and the Defendant appeared by its attorney, Mr. Joaquin C. Arriola.
FINDINGS OF FACT
1. Plaintiff and Pil Son Whiteman entered into a Contract by which Plaintiff supplied certain amusement devices for use at Mrs. Whiteman’s place of business. This Contract was admitted as Exhibit 1.
2. Pil Son Whiteman’s interest in the business was transferred to Susan Toki Castro, who became obligated under Exhibit 1.
3. Susan Toki Castro breached the Contract’s provision forbidding use of any devices not supplied by the Plaintiff.
4. No actual damages resulting from the breach were proved.
5. Actual damages, in case of breach, were ascertainable.
CONCLUSIONS OF LAW
1. The Plaintiff is entitled to judgment for nominal damages of $1.00 together with his costs of this action.
2. The Plaintiff is not entitled to liquidated damages.
Let judgment be entered accordingly.
JUDGMENT
This cause came on regularly for trial on the 21st day of June, 1976, before the Honorable Richard H. Benson, Judge, presiding, sitting without a jury. The plaintiff appeared by its attorney, Mr. Stephen A. Cronin, and the defendant appeared by her attorney, Mr. Joaquin C. Arriola, and evidence both oral and documentary having been presented by both parties and the cause having been argued and submitted for decision and the court having made and caused to be filed its written Findings of Fact and Conclusions of Law
*360IT IS ORDERED, ADJUDGED AND DECREED that plaintiff have judgment against defendant in the sum of $1.00 together with his costs of this action. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487848/ | ABBATE, Judge
DECISION
The Prosecution opposes the Defendant’s Motion filed 12 October, 1976, to dismiss charge one of the information for failure to properly charge Defendant, in violation of the 6th Amendment to the United States Constitution and Rule 7(c) of Guam’s Rules of Criminal Procedure.
*363We agree with Defendant that the Legislature never intended a general Rule of Law that mere possession of a “wild animal” (which could be a dog or cat or even a deer) would.be illegal. We reject the Prosecutor’s argument based upon Witkin, California Criminal Procedure, pg. 190, because the converse of that rule, pg. 191, is more applicable here. “. . . where the exception is a part of the statutory definition or description of the crime, one of the elements to be pleaded is the nonexistence of the facts giving rise to the exception.” A logical analysis of traditional Chamorro culture in this Territory makes it clear that Section 12315 of the Government Code, of itself, cannot possibly define an offense in unconditional terms. Therefore, exceptions to Section 12315, whether couched in negative or positive language, must exist. Without implementing regulations promulgated, under Section 12321 in accordance with procedure set forth in Section 12007, to give active meaning to said Section 12315, Defendant’s 6th Amendment right is violated by being charged thereunder.
Had regulations been promulgated the Prosecution would be under an obligation to: (1) give the official citation of the rule which Defendant allegedly violated; (2) state the specific nature of the alleged crime; (3) plead to nonexistence of facts giving rise to any exception which nullify the illegality of Defendant’s acts. But where no regulations have been promulgated, Section 12315 alone cannot be used to criminally accuse Defendant because Defendant does not know with clarity what wrongful act he is accused of doing.
It is not Defendant’s obligation to research the existence or nonexistence of a regulation which might apply. Yet an information lacking specificity negates the Defendant’s ability to prepare a defense. The government is obligated to provide an accused with a “. . . plain, concise and definite written statement of the essential facts *364constituting the offense charged”. (Rule 7(c)). The Prosecution has not carried its burden as count one of this information does not comply with the law.
Defendant’s motion to dismiss count one is hereby granted.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487854/ | ABBATE, Judge
DECISION
Defendant moved the Court to Dismiss, by its Motion filed 20 September, 1976, on the grounds of: (1) noncompliance with this Court’s discovery order and order for production of grand jury testimony, and (2) violation of his 6th Amendment right to a speedy trial. At this motion hearing before this Court on October 20th both sides presented oral arguments and the prosecution filed its memorandum in opposition to the Dismissal Motion.
*368Having duly deliberated on these matters, which were reserved for this later Decision, the Court denies the Motion to Dismiss.
The indictment in this case was filed on May 7,1976. There has been no showing by Defendant that the 5% month delay to date was intentional or prejudicial in some concrete way to his ability to prepare his case. This Court takes judicial notice of previous motions by Defendant which motions contributed to the pre-trial delay. The balancing test standards explicated in Barker v. Wingo, 92 S.Ct. 2182 (1972), and cited by this Court in The People of the Territory of Guam v. Frank Rodney Reyes and Gordon Steve Clay, 5F-74, have not been shown by Defendant.
Nor is Dismissal with Prejudice justified because of non-compliance with the orders of this Court relating to discovery and grand jury testimony. While we condemn late compliance, the prosecution did eventually comply, and we do not feel dismissal is appropriate at this juncture; the prosecution could re-indict, causing further delay. Defendant failed to show sufficient prejudice resulting from the delayed compliance.
All courts are most reluctant to dismiss without prejudice or exclude the prosecution’s use of the discovered evidence, but this Court will take such drastic action if there is further unjustified delay.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487855/ | ABBATE, Judge
DECISION
In denying Defendant’s 5 October, 1976, Motion to Dismiss for prosecution’s non-compliance with a discovery order, this Court cites the Decision in the companion case People of the Territory of Guam v. Michael Imamura, 104F-76.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487857/ | ABBATE, Judge
DECISION
Trial on the merits in the above-eaptioned, case was completed in this Court on September 20, 1976. We reserved decision for a careful review of the law as it *371pertains to (1) obligations of sureties and (2) discharge of a surety’s obligations. Section 2840 of the Civil Code of Guam provides that a surety is exonerated:
1. In like manner with a guarantor;
2. To the extent to which he is prejudiced by any act of the creditor which would naturally prove injurious to the remedies of the surety or inconsistent with his rights, or which lessens his security; or
3. To the extent to which he is prejudiced by an omission of the creditor to do anything when required by the surety which it is his duty to do:
Exoneration “. . . in like manner with a guarantor” due to creditor dealings with debtor is explained by Civil Code Section 2819:
a guarantor is exonerated, except so far as he may be indemnified by the principal, if by any act of the creditor, without the consent of the guarantor, the original obligation of the principal is altered, in any respect, or the remedies or rights of the Creditor against the principal, in respect thereto, in any way impaired or suspended.
Both parties agree that Plaintiff, Bank of Hawaii, on- 21 April, 1975, mistakenly issued the third increment check, in the amount $6,412.50, to AJB Construction and to Defendant. This check should have been issued to Defendant and Perez Brothers Inc., because of an irrevocable assignment from AJB to Perez which occurred on 21 October, 1974. Defendant endorsed the check over to ÁJB assuming that the assignment debt to Perez had been cleared since Perez’ name was left off the check and since Defendant had had no notice of the further claims of Perez (which were billed later). Plaintiff’s mistake opened the door for AJB to claim the entire' check without paying Perez since all protections were gone.
■ Defendant, China Insurance, was prejudiced in several ways by the action of Plaintiff. Defendant, having notice of the -AJB to Perez assignment, was entitled thereafter to *372rely on properly designated Bank increments to pay off Perez if any supplier’s claim existed regardless of whether the bond was in fact a performance or payment bond. The Plaintiff, despite having had notice of the said assignment, proceeded to deal with the assignor albeit unintentionally. The resulting premature payment to AJB considerably lessened Defendant’s security, thereby injuring Defendant in a manner similar to the fact setting in Glenn County v. Jones, 146 C. 518, 80 P. 695 (1905). Soon after it received that third increment check AJB defaulted. “The pressure which would have been exerted upon him to continue the performance of his contract . . . was removed when he received the money” (Glenn County at page 696). Defendant was compelled to perform by finding a replacement contractor. The Plaintiff, Bank of Hawaii, paid later checks to the substitute contractor (amount $6,344.75) and to Perez Brothers (amount $4,311.77) because claims by both were preventing the owner, Mr. Salas, from entering the new residence. No invoice inspection was made by Plaintiff as to materials late-billed by Perez Brothers prior to issuing the 21 October, 1975, check.
Plaintiff suggests that where two parties are equally at fault, a balancing of equities compels the surety to pay since this is the whole purpose for Plaintiff requiring a bond in the first instance. We neither agree that there is equality of fault nor that a balancing approach is proper. Nor does the law of Guam hold a surety liable when, a creditor has so acted negligently. The Civil Code of Guam Section 2840 exonerates the surety that is prejudiced in the manner described above. While it is true that Defendant, with more diligence, might have realized the Bank’s error and denied endorsement on the third increment check, we do not believe it was Defendant’s obligation to so double-check the actions of the Bank. It was reasonable for Defendant to rely on the Plaintiff’s careful response to the AJB to Perez *373assignment, and the law of this territory exonerates the Defendant from liability for this $2,175.52 loss by Plaintiff.
Plaintiff’s demand for relief is denied.
Submit order. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487858/ | ABBATE, Judge
DECISION
Petitioner married Respondent in Saipan May 20, 1965, and four (4) children were born in wedlock. Petitioner filed a 23 September, 1974, complaint in the High Court of the Trust Territory of the Pacific Islands to compel Respondent. to pay support and alleging desertion commencing June 17, 1974. Respondent resides not in the Trust Territories, but in Guam, according to sworn allegations of Petitioner, who now asks the Superior Court of Guam to take jurisdiction over this case under Guam Civil Code I Section 1500 et seq. and to compel Respondent to pay $250.00 per month support for dependents.
This Court could not possibly feel greater compassion *374for Petitioner’s position or sympathy for Petitioner’s public policy arguments. Indeed, we want to discourage estranged fathers escaping support obligations by fleeing from a Trust Territory to Guam. On Guam this Court has consistently dealt harshly with fathers in non-compliance with child support orders. Certainly reciprocity is the key to a system wherein Guam support orders will be mutually respected and enforced in the Trust Territories.
Therefore, it is with sorrow and regret that this Court must deny Petitioner jurisdiction over Respondent under Guam Civil Code Section 1500 et seq. which applies only to sovereignties of the United States. The United Nations assigned the Trust Territories to the United States as trustee, not as sovereign. Although remedial acts are usually construed liberally, this Court cannot stretch the meaning of Section 1501(a) to cover this case. There is authority (Callas v. U.S., 253 F.2d 838 (1958); Brunnell v. U.S., 77 F.Supp. 68 (S.D.N.Y. 1948)) for considering Trust Territories more akin to “foreign countries” than sovereignties vis a vis the United States.
The version of the Uniform Reciprocal Enforcement of Support Act (URESA) enacted in Guam in 1954 provides for enforcement of support decrees of other states, defining “state” as:
Any state, territory, or possession of the United States and the District of Columbia in which this or a substantially similar reciprocal law has been enacted.
At present, then, Trust Territory support orders cannot be enforced in Guam Courts under URESA because the former are neither territories nor possessions of the United States. The future will likely see closer ties between the Trust. Territories and Guam as each enacts a new constitution drafted with, sensitivity to the need for cooperation and legal reciprocity. The world has changed' since, .1954.. and we: are hopeful - the' Fourteenth Guam *375Legislature will see the urgency of an amendment in URESA to include the Trust Territories, but it would be a judicial encroachment upon Guam Legislative prerogative' for this Court to rule today .in a manner inconsistent with the present law. The Guam Legislature chose not to include the Trust Territories when in 1954 URESA was enacted, nor has any Guam Legislature since then chosen to amend that statute, although it could easily have done so with clear express language like that contained in the Trust Territory URESA, 39 T.T.C. § 301 et seq. (Supp. 1973). Therefore, this Court is without justification for extending Guam’s URESA beyond the sovereign jurisdiction of the United States. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487859/ | BENSON, Judge
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The above-entitled action was tried on November 4,1976. Mr. Timothy A. Stewart appeared for the plaintiff. Defendant was not represented by counsel, however, Mr. P. C. Liu, Director of defendant corporation was present at the trial.
*376FINDINGS OF FACT
1. That an account was stated in writing between plaintiff and defendant in the amount of $7205.00 which amount is now due and owing, and has been a fixed sum since July 1975.
2. The plaintiff is indebted to the defendant for goods sold and delivered in the amount of $950.77.
CONCLUSIONS OF LAW
1. The plaintiff is entitled to judgment against the defendant in the amount of $6,254.28 with interest thereon at 6% per annum from July 1975 until fully paid, and to the costs of this action in the sum of $95.50.
Let judgment be entered accordingly.
JUDGMENT
This'cause came on regularly for trial on the 4th day of November, 1976, before the Honorable Richard H. Benson, Judge, presiding, sitting without a jury. The plaintiff appeared by their attorney, Mr. Timothy A. Stewart. The defendant was not represented by counsel, however, Mr. P. C. Lieu, Director of defendant corporation, was present at the trial. Evidence both oral and documentary having been presented by both parties and the cause having been made and caused to be filed its written Findings of Fact and Conclusions of Law,
IT IS ORDERED, ADJUDGED AND DECREED that plaintiff have judgment against defendant in the amount of $6,254.23 plus interest of 6% per annum from July 1975 until paid, and to the costs of this action in the sum of $95.50. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487860/ | BENSON, Judge
ORDER
This matter came before the court on the 1st day of October, 1976, on defendant’s motion to dismiss the complaint, and on plaintiffs’ motion requesting permission to serve a supplemental complaint upon defendant. Plaintiffs appeared by their attorney, Mr. Howard G. Trapp, and defendant appeared by their attorney, Mr. J. Bradley Klemm. After oral arguments of counsel, the matter was submitted for decision, and the court after having fully considered the matter and being fully advised in the premises:
IT IS HEREBY ORDERED:
1. That the. motion to dismiss against defendant be, and hereby is, denied; ■
2. That the motion for permission to serve supplemental complaint be, and hereby is, granted. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487861/ | BENSON, Judge
ORDER
This matter came before the court on motion of Liberty Shoes, and was submitted for decision after oral argument on December 10,1976.
The decision of the court is
1) That a 5-day summons is permissible in a case of unlawful detainer.
2) That proper notice to pay or to quit must be served before institution of an unlawful detainer action.
3) That an unlawful detainer cannot be maintained against one not in possession.
IT IS THEREFORE ORDERED that the motion to dismiss be granted as to defendant Liberty Shoes for reason No. 2 above, and also granted as to United Resources for reason No. 3 above. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487862/ | ABBATE, Presiding Judge
DECISION
This matter comes before the Court on defendant’s Motion to Dismiss the Indictment against him filed February 3, 1978, and argued February 10, 1978. Defendant’s motion is based on the lack of competent evidence to establish three essential elements: (1) the identity of the murder victim; (2) the voluntariness of defendant’s statement; and (3) compliance with procedural safeguards under Miranda v. Arizona, 384 U.S. 436.
*516In the past this Court was reluctant to dismiss an indictment on the ground of insufficient evidence before the grand jury. See People v. Viloria, S.C. Criminal Case No. 324F-77; United States v. Costello, 350 U.S. 359, 76 S.Ct. 406 (1956). Prior to January 1, 1978, indictments were handed down pursuant to Rules 6 and 7 of the old Guam Rules of Criminal Procedure. Now, however, indictments are measured by the standards set forth in Chapter 50 of the new Rules of Criminal Procedure (Public Law 13-186).
Section 50.42 of the new Code reads:
The grand jury shall receive only evidence which would be admissible over objection at the trial of a criminal action but the fact that evidence which would have been excluded at trial was received by the grand jury does not render the indictment void where sufficient competent evidence to support the indictment was received by the grand jury.
Whereas under the old rules virtually any evidence would support an indictment, § 50.42 specifies that the grand jury may consider only competent evidence which would be admissible over objection at trial.
The indictment handed down against De Jesus was based entirely on a statement given police officers by the defendant. A confession is not admissible into evidence at trial absent the introduction of a proper foundation of voluntariness.
California Penal Code § 939.6 is similar to § 50.42 in that it requires an indictment to be based upon admissible evidence. In Mott v. Superior Court, 226 Cal.App.2d 617, 38 Cal. Rptr. 247 (1964), the court dismissed an indictment based upon a confession where the grand jury received no preliminary foundation of voluntariness. As. stated at page 618:
A grand jury may receive only the same type of evidence which a. court of law may entertain, i.e., legally competent evidence. Hence *517a foundation of voluntariness must be established. None having been laid here, there was no competent or sufficient evidence to support the indictment.
Defendant here maintains that the foundation laid before the grand jury was insufficient to support admission of the confession. The only foundation appeared on page 4 of the grand jury transcript:
Q Prior to the interview with him did you advise him of his constitutional rights?
A Yes, sir.
Q Did you make any promises to him or did you use any force to obtain a statement?
A No, sir.
This was the only evidence of voluntariness to be found in the transcript. At least one grand juror had doubts whether the confession was voluntary.
Q How did you get De Jesus’ statement?
A I don’t think that would be appropriate under the circumstances. Transcript page 16.
This Court is of the opinion that it was appropriate under the circumstances. The grand jury should have received more than cursory, conclusory statements as to the facts surrounding De Jesus’ confession. This Court does not hold that the same technical foundation for admission of evidence at trial is required to be put before the grand jury. See People v. Olf, 195 Cal.App.2d 97, 104, 15 Cal. Rptr. 390 (1961). It is held only that the foundation laid here was insufficient to support the indictment.
Defendant’s Motion to Dismiss the Indictment is granted.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487863/ | WEEKS, Judge
ORDER OF DISMISSAL
This is defendant’s motion to dismiss a felony drunk driving information on the grounds that it violates § 654, Guam Penal Code — prohibition against multiple prosecutions. The defendant has not raised the constitutional issue of double jeopardy.
California has a statute identical to § 654, Guam Penal Code. The seminal interpretation of that statute is Kellett v. Superior Court, 63 Cal.2d 822, 409 P.2d 206 (1966). In that case the defendant pled guilty to exhibiting a firearm, a misdemeanor, and was subsequently indicted for being a felon in possession of a firearm, a felony. The Court granted a writ of prohibition dismissing the indictment, ruling that “When, as here, the prosecution is or should be aware of more than one offense in which the same *519act or course of conduct plays a significant part, all such offenses must be prosecuted in a single proceeding.... Failure to unite all such offenses will result in a bar to subsequent prosecution of any offenses omitted if the initial proceedings culminate in either acquittal or conviction and sentence,” Kellett v. Superior Court, supra at 827.
Joinder in the case at hand is permitted under § 954, Guam Penal Code; clearly, the act and course of conduct of the defendant failing to yield at a stop sign will play a “significant part” in his prosecution for both the offense of failing to yield and felony drunk driving. The one act resulted in two offenses.
This was the conclusion of the controlling case of In re Dennis B., 18 Cal.3d 687, 557 P.2d 514 (1976). The facts of this case are nearly identical to those of this one. The defendant there received a citation for improper lane change and was indicted for manslaughter resulting therefrom. The defendant was found guilty of the traffic violation and set forth § 654, California Penal Code, as a bar to the felony prosecution.
The California Supreme Court accepted without comment that the two offenses arose out of the same criminal act, but held that § 654 was not a bar because the District Attorney did not know, nor should he have known, of the two prosecutions.
There, as here, there was no evidence that any one Assistant Attorney General was actually aware of both prosecutions, especially in light of the summary procedure for prosecuting traffic offenses.
In deciding whether or not the District Attorney should have known, the Court held in light of the circumstances the District Attorney was not unreasonable in not being aware of the two offenses. Those circumstances are that the potential for harassment and defendant’s expense to defend a traffic offense are minimal. Further, the state has a sub*520stantial interest in maintaining the summary nature of traffic prosecutions. Also, the Court held that to deny the state the opportunity to prosecute a major felony would be a gross unfairness under any circumstances.
CONCLUSION
Even though both offenses arise out of the same criminal course of conduct an essential element justifying dismissal under § 654 is absent; that the state knew or should have known about both offenses before the defendant’s conviction. Basically, California in In re Dennis B. has decided as a matter of public policy that prior conviction for a traffic accident should not act as a bar to prosecution of an additional major felony. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487864/ | ABBATE, Presiding Judge
This matter comes before the Court on defendant Manon C. Daly’s Motion to Dismiss filed April 17, 1978, and ar~ *521gued on May 10, 1978. The motion was based on the argument that Guam’s obscenity statute (Criminal and Correctional Code § 28.40 et seq.) does not contain a specific definition of prohibited sexual conduct as required by the Supreme Court decision in Miller v. California, 413 U.S. 15, 93 S.Ct. 2607 (1973).
Initially it should be noted that defendant is correct in her assertion that the statute does not list specific sexual conduct. However, the comment makes clear that it was the intent of the Legislature that Guam’s statute comply with standards as set by the U.S. Supreme Court.
The provisions set forth in this article relating to obscenity are believed to conform to standards presently set by the U.S. Supreme Court.
The question then for this court is whether the statute is capable of a construction so as to effectuate the intent of the Legislature. The proper considerations to be utilized in construction of a statute were well stated by the California Supreme Court in the case of In re Haines, 195 Cal. 605 at 613, 234 P. 883 at 886 where the court quoted with approval from Lewis Sutherland on Statutory Construction, 2d ed., Section 376:
The mere literal construction of a section in a statute ought not to prevail if it is opposed to the intention of the Legislature apparent by the statute; and if the words are sufficiently flexible to admit of some other construction it is to be adopted. The intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act.
The legislative intent was clearly that the obscenity statute conform with Supreme Court standards. An examination of the statute indicates that it does conform with the tripartite definition adopted in Miller,1 However, as *522mentioned previously, it fails to include specific examples of sexual conduct as required by Miller. The court in Miller gave examples of what would be sufficiently specific conduct.
(a) Patently offensive representations or descriptions of ultimate sexual acts, normal or perverted, actual or simulated.
(b) Patently offensive representations or descriptions of masturbation, excretory functions, and lewd exhibition of the genitals. 93 S.Ct. at 2615.
In a case decided the same day as Miller the court noted that they were prepared to construe terms such as obscene, lewd, etc., in federal statutes as limited to patently offensive “hard core” sexual conduct given as examples in Miller. United States v. 12 200 Ft. Reels of Super 8mm Film, 413 U.S. 123, 93 S.Ct. 2665 at 2670 (1973).
If it can be found that the Legislature’s adoption of the Miller tripartite standard impliedly adopted the examples given in Miller of specific conduct the statute herein involved will survive the constitutional challenge. In the case of Eagle Books, Inc. v. Reinhard, 418 F.Supp. 345 (U.S.D.C. Ill. 1976), it was held that a judicial incorporation of the tripartite scheme would not alone satisfy the specificity requirement. However, that case was vacated and remanded in light of Ward v. Illinois, 431 U.S. 767, 97 S.Ct. 2085 (1977), wherein it was held that it was an overly restrictive and unwarranted conclusion that the state court’s adoption of the guidelines did not include the examples as well.
Based on the foregoing it is this court’s construction of the instant statute that it includes by implication the examples of specific conduct given in Miller v. California, supra. Therefore, defendant was under adequate notice that her conduct might subject her to criminal prosecution.
Defendant’s Motion to Dismiss is denied.
SO ORDERED.
The Guam tripartite test includes a more stringent test than Miller requires since it retains the “utterly without redeeming social value” standard. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487887/ | ABBATE, Presiding Judge
DECISION
In the above-titled matter this case was submitted to the court for a declaratory judgment on the question of whether certain machines as set forth in Paragraph 10 of the Complaint constitute gambling device within the definition of § 64.20(b) of the Criminal and Correctional Code. The deposition taken on January 12, 1979, of Peter F. Whitten was considered in arriving at a decision in this matter.
The plaintiff, Guam Music, Inc., is doing business in the territory of Guam and provides coin-operated amusement devices for various island establishments. From the testimony that is set forth in the deposition, it appears that the machines that were confiscated by law enforcement agents of the territory of Guam do not fall within the meaning of mechanical devices as set forth in § 68.20(b) of the Crim*592inal and Correctional Code. They are electronically operated and contain electronic circuitry. See People v. Rosa G. Guzman, Cr. Case No. 33-78, Superior Court of Guam.
In view of the foregoing, this Court holds that the machines confiscated as described in Paragraph 10 of the complaint are not gambling devices and are to be returned to the plaintiff Guam Music, Inc. Plaintiff to submit Findings of Fact and Conclusions of Law with notice.
SUBMIT ORDER. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487888/ | RAKER, Judge
DECISION AND ORDER
Plaintiff, Aetna Life Insurance Company, a corporation (Aetna), brought suit against the defendant, government of Guam (Government), for $200,000 for breach of contract. Aétna did not file a claim with the Attorney General of Guam pursuant to the requirements of the Government Claims Act. Both plaintiff and defendant have filed motions for summary judgment.
*593The Government raises the defense of sovereign immunity contending that suits against the Government can only be brought insofar as the Government has consented to be sued. Counsel for Aetna urges the Court to reject the defense of sovereign immunity, citing the 1978 Supreme Court of Pennsylvania case of Mayle v. Pennsylvania Department of Highways, 388 A.2d 709, in which the Supreme Court of Pennsylvania by a 4 to 3 decision reversed a Pennsylvania Trial Court that had ruled that sovereign immunity applied in a tort action against the State of Pennsylvania for personal injuries.
The Government of Guam Claims Act, § 6500.01 of the Government Code of Guam, states- in pertinent part as follows:
Waiver of immunity. The government of Guam hereby waives immunity from liability, but only as hereinafter provided:
(a) for all expenses incurred in reliance upon a contract to which the Government of Guam or any of its departments, agencies or funds is a party, but if the contract has been substantially completed, expectation damages may be awarded;
The Government of Guam Claims Act, § 6500.03 et seq., requires the filing of a claim with the Attorney General as a condition precedent to the filing of an action against the Government in the Superior Court of Guam.
Counsel for Aetna claimed in oral argument that filing a claim with the Attorney General would be useless because the nature of the contractual obligation falls outside of the waiver provisions of § 6500.01, cited above. However, Aetna is in no worse position than the victim of -an intentional tort committed by Federal agent or employee. 28 U.S.C.A. 2680 (Tort Claims Procedure) provides as follows:
The provisions of this Chapter and § 1346(b) of this title shall not apply to—
*594(h) Any claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights: . . .
72 Am.Jur.2d, States, Territories and Dependencies, reads as follows:
Section 99. General rule as to state’s immunity from suit.
The general principal of jurisprudence that the sovereign cannot be sued without its own consent applies with full force to the several states of the Union. Accordingly, no suit, whether at law or in equity, is maintainable against the state either in its own courts or in the courts of a sister state, by its own citizens, by the citizens of another state, or by the citizens or subjects of a foreign state, unless the state has given its consent or otherwise waived its immunity. The state’s immunity from suit without its consent is absolute and unqualified, and a constitutional provision securing it is not to be so construed as to place the state within the reach of the process of the court....
Section 167. Actions against territories.
The incorporated territories have always been held to possess an immunity from suit without their consent, and although a territory is not an integral part of the United States, the same rule should apply. And the same immunity has been held to apply to unincorporated territories....
The Organic Act of Guam, 48 U.S.C.A. 1421a, provides in pertinent part as follows:
Section 1121a. Unincorporated territory; capital; powers of government; suits against government; type of government; supervision.
Guam is declared to be an unincorporated territory of the United States and the capital and seat of government thereof shall be located at the city of Agana, Guam. The government of Guam shall have the powers set forth in this Chapter, shall have power to sue by such name, and, with the consent of the Legislature evidenced by enacted law, may be sued upon any contract entered into with respect to, or any tort committed incident to, the exercise by the *595government of Guam of any of its lawful powers. . . . (Emphasis supplied.)
The Eleventh Amendment to the Constitution of the United States provides as follows:
The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another State, or by citizens or subjects of any foreign State.
Based on the foregoing authorities, IT IS ORDERED:
1. The government of Guam’s motion for summary-judgment is granted.
2. The motion of Aetna Life Insurance Company for summary judgment is denied.
Judgment shall be in accordance herewith. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487865/ | RAKER, Judge
ORDER
This is a motion by defendant to dismiss an indictment under § 28.20(a)(1) of the Criminal and Correctional Code. The charging portion of the indictment is as follows:
THE SUPERIOR COURT TERRITORIAL GRAND JURY CHARGES:
On or about the 2nd day of February, 1978, in the territory of Guam, Rebecca Ellison, aka Patricia Jeanne O’Hara, aka Jane Doe did control and keep a place of prostitution, in violation of § 28.20 (a) of the Criminal and Correctional Code.
Dated this 16th day of February, 1978.
Section 28.20(a) (1) of the Criminal and Correctional Code provides as follows:
A person is guilty of promoting prostitution who:
(1) owns, controls, manages, supervises or otherwise keeps, alone or in association with others, a place of prostitution or a prostitution enterprise; or
*524The evidence before the grand jury disclosed that Duran, an undercover police officer, requested a taxi driver to take him to a prostitute. The taxi driver drove Duran to the residence of the defendant where the defendant agreed to have sexual intercourse with Duran in return for $50.00, which amount Duran paid to defendant. At this point Duran placed the defendant under arrest.
It is clear from a reading of §§ 28.15, 28.20 and 28.25 and the comments thereto that § 28.20(a) (1) does not render criminal the conduct of the defendant.
If the place of the proposed act of prostitution had been a hotel room, the defendant’s conduct might fall within § 28.15, which is a petty misdemeanor, or if the evidence before the grand jury showed repeated acts of prostitution by the defendant over a period of time such conduct might fall within § 28.20(a) (1).
Therefore, the indictment must be dismissed.
There is a further reason for the dismissal of the indictment. Section 28.20, under which defendant is charged, is a felony of the third degree which is punishable by a term not to exceed five (5) years. Prostitution under § 28.15 is punishable by a term not to exceed sixty (60) days.
Even if defendant’s conduct did constitute a violation of § 28.20(a), the facts herein presented fall within subsections (b) and (c) of § 7.67 of the Criminal and Correctional Code and justify dismissal by the Court of the indictment. It is inconceivable that the Legislature intended that defendant’s conduct could be punished by as much as five years’ imprisonment when the public solicitation prohibited by § 28.15 is limited to sixty (60) days, the latter being far more offensive than defendant’s conduct. See Guam Law Revision Commission Report quoted by counsel for defendant on page 2 of his memorandum of law filed herein.
Accordingly, it is ordered that the indictment herein be and the same hereby is dismissed. * | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487866/ | ABBATE, Presiding Judge
DECISION AND ORDER
The above-captioned cases came before the Court on the government of Guam’s motion to order discovery pursuant to § 70.25(b), (c) of the Guam Criminal Procedure Code. Section 70.25(b), (c) in pertinent part provides for discovery by the prosecution of reports and statements by experts made in connection with the case which are to be used at trial, the nature of the defenses to be used at trial, *526and the names and addresses of the witnesses to be called at trial in support of the defenses.
It is defendant’s position that discovery under this statute violates his constitutional rights under the Fifth and Sixth Amendments. Beyond the mere assertion that the discovery violates his Sixth Amendment rights, defendant has failed to present any argument indicating in what way his Sixth Amendment rights have been impaired. Therefore, the Court finds no Sixth Amendment violation.
Nor does the Court find the statute at issue violates defendant’s Fifth Amendment rights.
The United States Supreme Court has upheld prosecutorial pre-trial discovery against a Fifth Amendment challenge. The Court in Williams v. Florida, 399 U.S. 78, 90 S.Ct. 1893 (1970), found constitutional a Florida discovery statute requiring the defendant to notify the prosecution of his intention to use an alibi defense and of the names of the witnesses he intends to call.
Although that case was addressing the narrower issue of notice-of-alibi, dicta indicates that the Court would uphold a more extensive discovery statute such as § 70.25(b), (c).
The adversary system of trial is hardly an end in itself; it is not yet a poker game in which players enjoy an absolute right always to conceal their cards until played. Williams v. Florida, 90 S.Ct. at 1896.
The dissenters in Williams reinforce this Court’s opinion that the Supreme Court laid the groundwork for broader pre-trial discovery.
Although this case itself involves only a notice-of-alibi provision, it is clear that the decision means that a State can require a defendant to disclose in advance of trial any and all information he might possibly use to defend himself at trial. Williams v. Florida, 90 S.Ct. at 1909.
*527The Supreme Court’s dicta in Dennis v. United States, 384 U.S. 855, 86 S.Ct. 1840 (1966), is also illustrious of the Court’s seeming willingness to uphold broader discovery.
. . . the growing realization that disclosure, rather than suppression, of relevant materials ordinarily promotes the proper administration of criminal justice.
The expanding body of materials, judicial and otherwise, favoring disclosure in criminal cases analogous to the civil practice. Dennis v. United States, 86 S.Ct. at 1849.
The Court notes that defendant has cited United States v. Fratello, 44 F.R.D. 444 (S.D.N.Y. 1968), and Cantillon v. Superior Court, 305 F.Supp 304 (C.D. Cal. 1969), in support of his allegation of a Fifth Amendment violation. These cases are pre-Williams and, therefore, do not reflect present Supreme Court thinking on pre-trial discovery.
It should be emphasized that not all evidence obtained from a defendant is privileged under the Fifth Amendment. Among other things, the accused have been subject to: Blood samples and tests, Schmerber v. California, 384 U.S. 757, 86 S.Ct. 1826 (1966); appearing in lineups, United States v. Wade, 385 U.S. 811, 87 S.Ct. 81 (1966); posing in court for identification purposes, People v. Clark, 18 Cal.2d 449, 116 P.2d 56 (1941); disclosure of records and documents kept by accused in compliance with state or federal statute, Shapiro v. United States, 355 U.S. 1, 68 S.Ct. 1375 (1948).
In delineating the protective scope of the Fifth Amendment, the Supreme Court in Schmerber v. California, 86 S.Ct. at 1831, reiterated:
History and a long line of authorities in lower courts have consistently limited its protection to situations in which the State seeks to submerge those values by obtaining the evidence against an accused through the cruel, simple expedient of compelling it from his own mouth.
*528Section 70.25 does not compel the defendant to be a witness against himself from his own mouth. But if he chooses not to remain silent, § 70.25(b), (c) merely requires him to disclose prior to trial information which he intends to disclose at trial. The reasoning in Williams, referring to the notice-of-alibi statute, is equally applicable to the statute at issue:
At most, the rule only compelled petitioner to accelerate the timing of his disclosures, forcing him to divulge at an earlier date information that the petitioner from the beginning planned to divulge at trial. Nothing in the Fifth Amendment privilege entitles a defendant as a matter of constitutional right to await the end of the State’s case before announcing the nature of his defense, any more than it entitles to await the jury’s verdict on the State’s case-in-chief before deciding whether or not to take the stand himself. Williams v. Florida, 90 S.Ct. at 1898.
The Fifth Amendment does not grant to the accused a right not to have his defenses investigated. “. . . for the Constitution does not protect a defendant from the consequences of a defense he makes, nor does it assure him a right to so defend as to deny the state a chance to check into the truth of his position.” State ex rel. Sikora v. District Ct., 462 P.2d 897 at 899.
Section 75.25(b), (c) provides the prosecution with the procedural mechanism with which it can investigate facts crucial to the determination of the case. Prosecutorial discovery assists in the ascertainment of truth and justice. In Williams, Chief Justice Burger in his concurring opinion enunciated the advantage of allowing prosecutorial pre-trial discovery:
In either case the ends of justice will have been served and the processes expedited. These are the likely consequences of an enlarged and truly reciprocal pre-trial disclosure of evidence and the move away from the “sporting contest” idea of criminal justice. Williams v. Florida, 90 S.Ct. at 1909.
*529In Wardius v. Oregon, 412 U.S. 470, 93 S.Ct. 2208 (1973), the Supreme Court again noted:
The growth of such discovery devices is a salutory development which, by increasing the evidence available to both parties enhances the fairness of the adversary system. As we recognized in Williams, nothing in the Due Process Clause precludes States from experimenting with systems of broad discovery designed to achieve these goals. Wardius v. Oregon, 93 S.Ct. at 2211.
Reflecting the need for discovery, a number of jurisdictions have enacted or judicially created prosecutorial pretrial discovery provisions which are broader than notice-of-alibi. A sampling of these States include: New York, see People v. Damon, 247 N.E.2d 651, 299 N.Y.S.2d 830, 24 N.Y.2d 256 (1969); New Jersey, see State v. Montague, 262 A.2d 398, 55 N.J. 387 (1970); Missouri, see State v. Burton, 455 S.W.2d 60 (1976); Oregon, see State v. Wolf, 536 P.2d 555 (1975); Montana, see State ex rel. Sikora v. District Ct., 462 P.2d 897 (1969); Illinois, see People ex rel. Carey v. Strayhorn, 6 Ill.2d 85, 329 N.E.2d 194 (1975).
The California Legislature has not enacted pre-trial discovery statutes in criminal proceedings. It is the position of the California Supreme Court in Reynolds v. Superior Court, 117 Cal. Rptr. 437, 528 P.2d 45 (1974), that it does not want to both promulgate the statutes and pass on their constitutionality, or by promulgating the statutes infringe on the Legislature’s powers. Defendant cites four pre-Reynolds California cases: McMullen v. Superior Court, 6 Cal.App.3d 224, 85 Cal. Rptr. 729 (1970); Prudhomme v. Superior Court, 85 Cal. Rptr. 129 (1970); People v. Bais, 31 Cal.App.3d 663, 107 Cal. Rptr. 519 (1973); People v. Chavez, 33 Cal.App.3d 454, 109 Cal. Rptr. 157. Defendant’s reliance on these cases is misplaced. Until the California Legislature enacts criminal pre-trial discovery *530statutes and their constitutionality is challenged, California’s position on their constitutionality is left unanswered.
Guam, unlike California, has enacted criminal discovery statutes. For the reasons aforementioned the Court finds no violation of defendant’s Fifth Amendment rights.
Defendant further contends that, in any event, discovery should not be granted absent a showing of materiality and reasonableness. In support of his contention defendant cites United States v. Estremara, 531 F.2d 1103 (2d Cir. 1976). The quotation cited refers to the application of Rule 16 of the Federal Code of Criminal Procedure. The Federal Rules of Criminal Procedure are not applicable to Guam in territorial matters such as this.
Additionally, defendant argues that discovery should not be granted absent particularized requests. As authority, he cites the California case of McMullen v. Superior Court, 6 Cal.App.3d 224, 85 Cal. Rptr. 729 (1970) which was obviated by the California Supreme Court in Reynolds v. Superior Court, supra.
Government of Guam’s motion for an order compelling discovery under § 70.25(b), (c) is granted.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487867/ | RAKER, Judge
DECISION
Defendant Deborah Hale Schott moved this Court May 31, 1978, to dismiss the charge against her on the grounds that (I) Guam Criminal and Correctional Code, § 28.50, is unconstitutionally vague and overbroad, (II) § 28.50 is unconstitutional as applied, and (III) Criminal and Correctional Code, Chapter 28, Article 2, denies equal protection of the laws.
Defendant’s first argument deserves little discussion since this Court has already determined that § 28.50 is not vague and overbroad. People v. Daly, 1 Guam R. 520 (1978).
Furthermore, this Court is not willing at this time to decide that the state could never find conduct such as that of the defendant obscene. However, in the Daly decision the specific examples of conduct set forth in Miller v. California, 413 U.S. 15, 93 S.Ct. 2607 (1973), were read into Chapter 28, Article 2, so as to define specific sexual conduct. Those examples read as follows:
(a) Patently offensive representation or descriptions of ultimate sexual acts, normal or perverted, actual or simulated.
(b) Patently offensive representations or descriptions of masturbation, excretory functions, and lewd exhibition of the genitals.
*532The People apparently misread the Miller and Daly decisions since they argue that the examples are “merely illustrative, and not the beginning and end of the obscenity area.” Miller required that an obscenity statute specifically define prohibited sexual conduct. True, the examples given in Miller were only illustrative of the type of conduct which could be specifically defined. However, where, as here, they have been adopted as specific examples of sexual conduct they are the beginning and end of the obscenity area. Sexual conduct not defined by statute cannot be criminal after Miller.
The defendant is charged with “pulling and snuggling a customer to her breast in a public place.” The most cursory reading of the Miller examples indicates that the defendant’s alleged act is not included. The complaint herein fails to state a charge under § 28.50.
It is not necessary to reach defendant’s third argument.
Defendant’s Motion to Dismiss is granted.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487868/ | ABBATE, Presiding Judge
DECISION
This matter comes before the Court on defendant’s Motion to Obtain Poll From Court Funds. The motion was heard ex parte on July 5, 1978, and decision was reserved.
It is defendant’s position that the request is authorized by the fair and impartial trial provision of the Sixth Amendment, and by the Due Process clause and Equal Protection clause of the Fourteenth Amendment.
The Court will first consider whether the allocation of funds to an indigent defendant for the purpose of conducting a public opinion poll is necessary to determine whether a fair trial can be held. Defendant is represented by court-appointed counsel, the public defender being disqualified due to a conflict of interest. In a factually similar case, the Supreme Court of Idaho affirmed the trial court’s denial of defendant’s request to conduct a community survey. The Court stated:
. . . Financial assistance is not automatically mandatory, but rather depends upon needs of the defendant as revealed by the facts and circumstances of each case. Before authorizing the expenditure of public funds for a particular purpose in an indigent’s defense, the trial court must determine whether the funds are necessary in the *534interest of justice. . . . Appellant loses sight of the viable alternatives available to a defendant in a criminal prosecution which can evaluate the sentiment in a community without resorting to the public coffers. A defendant has the opportunity to present to the trial court all the material disseminated to the public which he feels instills in their minds such prejudice against him as to prevent an impartial trial. He also has the opportunity to thoroughly examine each juror upon voir dire to ferret out bias and prejudice. We do not believe that a public survey could appreciably improve on the process as it now exists. State v. Powers, 537 P.2d 1369, 1374 (1975).
The Court finds this reasoning sound. Defendant on voir dire can thoroughly examine each prospective juror. Additionally, he can present to the Court the material disseminated to the public which in his opinion denies him an impartial trial.
Defendant’s next contention is that the Due Process clause requires funds to be allocated for a public opinion poll. The Ninth Circuit Court of Appeals in Mason v. Arizona, 504 F.2d 1345 (9th Cir. 1974), cert. denied, 420 U.S. 936, 95 S.Ct. 1145 (1975), addressed the issue of whether the Due Process clause entitles an indigent defendant to investigative expenses. The Court stated:
. . . the effective assistance of counsel guarantee of the Due Process Clause requires, when necessary, the allowance of investigative expenses or appointment of investigative assistance for indigent defendants in order to insure effective preparation of their defense by their attorneys. Mason v. Arizona, 504 F.2d at 1351.
However, the Court then limited its holding by specifying that the right was not mandatory, but rather depends upon the facts of the particular case.
. . . Our holding denotes, however, that such assistance is not automatically mandatory but rather depends upon the need as revealed by the facts and circumstances of each case. Mason v. Arizona, 504 F.2d at 1352.
*535Similarly, the Supreme Court of Indiana established basically the same criteria in Magley v. State of Indiana, 335 N.E.2d 811, 816 (1975).
. . . But, when the court is allocating state funds for the defense of a defendant, it is rational for the court to use discretion in granting or denying the defendant’s requests . . . Within the primary goal of the judicial process, which is due process of law for each defendant, the court may determine which expenses are probably needless, wasteful or extravagant.
Pursuant to the guidelines set forth by the Ninth Circuit in Mason, the Court has examined the facts and circumstances of the case. Defendant has among other procedural safeguards that of presenting the news material to the Court, questioning the prospective jurors on voir dire, challenging the jurors for cause, and exercising his peremptory challenges. The Court finds that the allocation of funds for an opinion poll is not necessitated by the Due Process clause.
Thirdly, there is defendant’s equal protection argument. Defendant has failed to demonstrate that he has been treated differently from' other indigent defendants similarly situated. As the Court in State v. Powers, 537 P.2d at 1374, enunciated:
. . . Appellant has not demonstrated that he has been treated differently from other indigent defendants similarly situated. ... It is fundamentally fair to require a showing by the indigent, represented by private court appointed counsel, that there is a necessity for allowance to employ investigators. The trial court’s failure to appoint an investigator whom it deemed unnecessary to conduct a community survey to aid appellant’s court appointed private counsel, did not violate the Equal Protection clause of the Fourteenth Amendment.
Defendant has not adequately demonstrated to the Court that an opinion poll is necessary. The Court finds no violation of the Equal Protection clause.
*536For the aforementioned reasons, the Court denies defendant’s motion.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487871/ | BENSON, Judge
DECISION
This case comes before the Court on defendant John V. Gerber’s Motion to Dismiss filed July 28, 1978, and argued August 3, 1978.
Defendant maintains that: (1) the finding of no probable cause to bind him for trial on drug charges which are the basis of this forfeiture action serves as collateral estoppel as to the issue of his knowledge of drugs on the vessel, and (2) Guam’s forfeiture statute, Criminal and Correctional Code § 67.80 et seq., is defective in that it denies him the due process right to notice and hearing either before or after seizure.
Defendant’s first argument is unpersuasive. The finding of no probable cause at the preliminary examination is not a final judgment sufficient to serve as collateral estoppel in a civil proceeding. Therefore, the Court must reach defendant’s due process argument.
It is clear that under forfeiture statutes post-seizure notice and hearing are sufficient. In the case of Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S.Ct. 2080 (1974), the Supreme Court recognized that in certain situations to serve an important government interest due process is not denied by postponement of notice and hearing. That case involved the seizure of a leased yacht used to transport marijuana. The court took note of the public interest in preventing the illicit use of property *546as well as the fact that the yacht could easily be removed from the jurisdiction if pre-seizure notice was given.
In these circumstances, we hold that this case presents an “extraordinary” situation in which postponement of notice and hearing until after seizure did not deny due process. 94 S.Ct. 2080, 2080.
Guam’s forfeiture statute closely parallels the Federal statute (21 U.S.C. § 881) except in one notable area. Section (d) of the Federal law made applicable other provisions of law relating to judicial forfeiture. This would include, among others, 19 U.S.C. § 1604 which requires the U.S. Attorney to commence forfeiture proceedings when necessary. There is no provision in the Guam law which requires, or authorizes, the institution of forfeiture proceedings. Indeed, it appears that the sole determination of whether forfeiture is required is in the hands of the Governor. See Criminal and Correctional Code § 67.84.
The issue before this Court is whether § 67.84 which allows an aggrieved person to seek review in Superior Court after forfeiture satisfies due process requirements. The Supreme Court stated in the Calero-Toledo decision:
No challenge is made to the District Court’s determination that the form of post-seizure notice satisfied due process requirements . . . Notice, of course, was required to be “reasonably calculated to apprise [the company] of the pendency of the forfeiture proceedings.” (Citation omitted.) (Emphasis added.) 94 S.Ct. 2090.
Guam’s statute contains no provision for the notification to the aggrieved party of the pendency of forfeiture proceedings. In the instant case the Government did file forfeiture proceedings and did attempt to notify appropriate parties.1 However, these good faith efforts will not suffice when defendant’s challenge is to the statute itself.
In State v. Matheason, 84 Wash.2d 388, 524 P.2d 388 (1974), an action was filed seeking the return of a vehicle *547seized pursuant to Washington’s forfeiture statute which is very similar to Guam’s. The action was grounded on the argument that the statute was unconstitutional in that it failed to provide post-seizure notice and hearing. The Supreme Court of Washington agreed.
There is no provision in RCW 69.50.505 (b) (4) for notice and hearing even after seizure. While Calero holds that in an extraordinary-situation such as this notice and hearing may be postponed until after seizure, it does not allow for abolishment of notice and a hearing. 524 P.2d 590.
It is worthy of note that in Matheason the Government had countered with a motion to forfeit the vehicle. This attempt to provide due process was apparently ineffective when the statute did not so provide.
The Calero-Toledo decision mandates that forfeiture statutes provide post-seizure notice and hearing prior to forfeiture. Guam’s statute lacks such provisions and therefore denies due process which is required under the Organic Act.
Defendant’s Motion to Dismiss is granted.
SO ORDERED.
Although in Cal&ro-Toledo the lessee rather than the actual owner was notified, the case strongly suggests that notice to the owner is required. See footnote 8, 94 S.Ct. 2080, 2084. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487873/ | ABBATE, Presiding Judge
DECISION
This matter comes before the Court on defendant’s Motion In Limine. The motion was heard on August 8, 1978, and decision was reserved.
Defendant seeks to prevent the introduction of evidence concerning, or references to, the frame of a certain Bernardelli semi-automatic pistol, serial number 46362, as the weapon allegedly used by the defendant to perpetrate the crimes for which he is being tried herein.
The Bernardelli frame in question was found in the vicinity of the Maina Reservoir. The serial number, which had been filed off, was raised. Using this restored serial number, the firearm registration card for the weapon was traced. The description on the registration card stated that the weapon was a Bernardelli pistol, model 90, .22 caliber. The Government purchased and test-fired the same model and caliber Bernardelli pistol, after which the chief criminalist for the Department of Public Safety then compared the test-fired shell casings with shell casings found at Two Lovers Point and at the Texiera residence. His analysis was as follows :
The markings on the casings are consistent, which leads me to believe that a Bernardelli could have fired those casings that were *551recovered from the Texiera house and also from Two Lovers Point. Grand Jury Transcript, May 26, 1978, page 23.
The characteristics of the firing pin were so unique, they were so outstanding that there’s no way, in my opinion, that I can find another gun that would give the same markings that I found with those comparisons, . . . What I’m saying is the markings are so unique that no other weapon could have fired those that I matched. Grand Jury Transcript, May 26, 1978, pages 28, 29.
A comparison was also made between the slugs from the purchased Bernardelli and slugs recovered from the bodies of the two Japanese women during autopsy. The chief criminalist found that “the refiling characteristics, that is the width of the land and the width of the groove are consistent again with the Bernardelli.” Grand Jury Transcript, May 26, 1978, page 25.
The basis of defendant’s motion is his contention that the introduction into evidence of the Bernardelli frame will have a “prejudicial effect on the minds of the jurors that cannot be erased by the defense, irrespective of the Government’s inability to state with a legal certainty that the .22 caliber shell casings found at Two Lovers Leap were ejected by the pistol alleged to be the murder weapon.” However, legal certainty is not the standard which must be met for the introduction of evidence in a criminal case. Rather, evidence must generally only be probative in order to be admissible. The court in People v. Lindsay, 227 C.A.2d 482, 38 Cal. Rptr. 755 (1964), enunciated this rule as follows:
The general tests of the admissibility of evidence in a criminal case are . . . does it tend logically, naturally, and by reasonable inference, to establish any fact material for the people, or to overcome any material matter sought to be proved by the defense? 227 C.A.2d at 498.
Referring specifically to firearm identification, McCormick has written:
*552It has long been recognized by the courts that the jury deciding questions of identification operates on the basis not of unattainable absolute certainty, but of probability. McCormick, McCormick on Evidence, Sec. 204 (2d ed., 1972).
Probative ballistic evidence is generally admissible. The degree of its probativeness is not determinative of its admissibility, but rather of the weight to be given to the evidence by the jury. The court in State v. Thomas, 489 P.2d 1310 (1971), stated this rule as follows:
There is no requirement that weapons or bullets offered in evidence be positively identified as those used in the perpetration of a crime. The admission of such evidence is within the sound discretion of the trial court and any objection to the lack of positive identification goes to the weight of the evidence rather than to the admissibility of the article. 489 P.2d at 1313.
In State v. Hatton, 522 P.2d 64 (1974), an expert testified that it was impossible to determine whether the bullet fragments removed from the victim’s head had been fired from the alleged murder weapon because the fragments were too distorted to reveal characteristics. Notwithstanding this, the expert was permitted to testify that the pistol was capable of firing bullets of the type used in the murder, the court finding that any objection to the lack of positive identification went to the weight of the evidence rather than to its admissibility.
In State v. Krummacher, 523 P.2d 1009 (1974), an unusual firearm and bullet had been used in the crime and the defendant had had access to that particular type of weapon. The weapon itself was never recovered. The court permitted the introduction of neutron activation analyses, conducted to determine if the fatal bullets could have been from the same manufacturer’s batch as the bullets found in the defendant’s possession. Defendant contested the sufficiency of the evidence used in determining if the bullets were from the same batch. On appeal, the court stated:
*553[I]t is a matter that goes to the evidence’s convincing power rather than to its admissibility. . . . All of the weaknesses and strengths of the State’s analyses were fully disclosed by the expert testimony from both sides and the jury had an adequate opportunity to give the testimony the weight it merited. While we believe the convincing power of the evidence was not very great, it nevertheless had some probative value and was admissible. 523 P.2d at 1017.
In State v. Edgin, 520 P.2d 288 (1974), the court upheld the admissibility of a ballistic expert’s testimony, despite his having testified that he could not positively say that the bullets came from the appellant’s gun, but only that the appellant’s gun could not be eliminated as the murder weapon. The Edgin court reiterated that the fact that the expert testimony did not establish a probability went merely to the weight of the testimony, rather than to its admissibility. See Edgin, supra, at 294.
Defendant’s position is that the comparison tests which were conducted by the chief criminalist do not support the inference that the Bernardelli pistol frame found in the vicinity of the Maina Reservoir is part of the murder weapon. As authority, defendant cites from Edwards v. State, 83 A.2d 578, 26 A.L.R.2d 874, 881 (1951), which states in pertinent part:
The testimony now in question is not discredited by the circumstances that the comparison of the two cartridge cases which had been exposed to the elements, with the .test cartridge supported the inference that could not be drawn from comparisons of the two alone.
Defendant’s argument is not persuasive. In Edwards, the two cartridge cases which had been exposed to the elements were found respectively in appellant’s background and near the scene. Expert testimony explained why an inference could not be drawn from a comparison of the two alone:
*554Everytime a weapon fires a cartridge case, the firing pin may impress to different depths. Therefore, the cartridge case will pick up additional marks on a cartridge case in which the firing pin makes a deep impression as contrasted with one in which a shallow impression is made. So that an insufficient number of microscopic marks might be present on one cartridge case from a certain weapon for comparison with another cartridge case fired from the same weapon. I examined the specimen when it was originally submitted as Q-12 and found there were very few microscopic marks in the firing pin impression. At that time I concluded they were too few for comparison with another cartridge case. However, when I received the weapon and fired the test cartridge case from it, I found on this cartridge case microscopic marks which were the same as microscopic marks I found on the cartridge case submitted to me as having been recovered in Edwards’ yard, indicating that that cartridge case . . . was fired from this particular weapon. 26 A.L.R.2d at 882.
Thus, the Court would not have permitted an inference from a comparison of the two cartridges because there were too few microscopic marks in the firing pin impression to compare the two. Edwards did not establish that only shell casings test-fired by the alleged murder weapon could be used for comparison.
Based on Hatton, Krummacher, Edgin and Edwards, this Court finds that evidence concerning the Bernardelli frame, serial number 46362, is sufficiently probative of the issue of the identities of the alleged murder weapon to allow its admission into evidence.
Defendant’s motion is denied.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487874/ | ABBATE, Presiding Judge
DECISION
This case comes before the Court on the People’s motion pursuant to Criminal Procedure Code § 70.50 to be allowed to take the deposition of Baymond Gutierrez.
It should be noted that the adoption of § 70.50 broadened the area in which depositions are allowed in criminal cases. However, there must be a showing of need and special circumstances before a deposition will be allowed.
*556Examination of the grand jury transcript indicates that Gutierrez will offer testimony that is material to the issues involved herein. Furthermore, the affidavit of Kevin Mannix demonstrates that there is a distinct possibility that at the time of trial Gutierrez will be off-island and beyond the subpoena power of the Court. In view of these circumstances a deposition is warranted.
However, the taking of depositions by the prosecution always raises the danger that the defendant may be denied his right to confront adverse witnesses. Therefore, prior to the introduction of the Gutierrez deposition at trial the People will be required to demonstrate that they have utilized all good faith efforts to procure the attendance of Mr. Gutierrez for trial.
The People’s motion to be allowed to take the deposition of Raymond Gutierrez is granted.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487875/ | WEEKS, Judge
DECISION
This case comes before the Court on plaintiff Hawaiian Life Insurance Company’s motion for preliminary injunction, dismissal of plaintiff and award of attorney fees. The motion was filed on August 21, 1978, and argued September 1, 1978. During the September 1 hearing this Court held that there were adverse claimants to the fund deposited and that interpleader pursuant to Rule 22 was proper.
Initially, it should be noted that prior to the adoption of the Guam Rules of Civil Procedure, interpleader actions were controlled by Civil Procedure Code § 386. After the adoption of the Rules of Civil Procedure, § 386 is of no further effect to the extent that its provisions conflict with Rule 22. See Code of Civil Procedure § 123. Examination of Rule 22 and § 386 indicates that they are not in conflict as they relate to this action.
Plaintiff seeks to enjoin defendants from instituting or prosecuting any action in another court which would affect the subject matter of this action. This Court finds no legal basis for the granting of such injunctive relief.
Had plaintiff been able to proceed in Federal District Court pursuant to the Federal Interpleader Statute1 (28 U.S.C. Sections 1335, 1397, 2361) or Rule interpleader under Rule 22 such relief would have been available. In*558junctions against state court actions are provided for by § 2361 (statutory interpleader) and § 2283 (rule inter-pleader) of Title 28. However, interpleader in Guam is based on Civil Procedure Code § 386. That Section has been adopted from California and the courts of that state have never recognized the use of injunctions in interpleader actions. Additionally, Federal Court injunctions are directed at court proceedings rather than individuals.
Plaintiff also seeks an order dismissing it from this action. As previously noted, this Court held on September 1, 1978, that interpleader was proper procedure under the facts of this case. The fund at issue was deposited with the Clerk of Courts on August 15, 1978. Under these circumstances, plaintiff is entitled to be discharged from liability and freed from the necessity of participating in the litigation between the claimants. See generally Hancock Oil Company v. Hopkins, 24 Cal.2d 497, 150 P.2d 463 (1944); Williams v. Gilmore, 51 Cal.App.2d 684, 125 P.2d 539 (1942).
Finally, plaintiff seeks attorney fees. Historically, federal equity courts have awarded attorney fees to the stakeholder if circumstances made such an award appropriate. Thomas Kay Woolen Mill Co. v. Sprague, 259 F. 388 (1919); McNamara v. Provident Sav. Life Assur. Soc., 114 F. 910 (1902). Federal Courts have continued this practice under Rule 22 and the interpleader statutes although fees are not expressly allowed. Davis v. Prudential Ins. Co. of America, 331 F.2d 346 (1964). Globe Indemnity Co. v. Puget Sound Co., 154 F.2d 249 (1946).
The California Supreme Court ruled in 1939 that the allowance of attorney fees to the stakeholder was without authority. Pacific Gas and Electric Co. v. Nakano, 12 Cal.2d 711, 87 P.2d 700 (1939). The appellate courts have consistently recognized that California cases subsequent to *559the adoption of the Guam Codes, while not binding, are persuasive. Tabor v. Ulloa, 323 F.2d 823, 824, n.5 (9th Cir. 1963); Roberto v. Aguon, 519 F.2d 754 (9th Cir. 1975). It is unclear whether the Federal view or the California position2 is preferable and should be adopted. Therefore, this Court holds only that attorney fees will not be awarded in this action.
For the foregoing reasons plaintiff’s motion is granted as to dismissal and denied as to the injunction and attorney fees.
Plaintiff to submit order.
It is not immediately clear that such jurisdiction would lie in the District Court of Guam since 28 U.S.C. Section 1335 creates a remedy only and suits thereunder may not “arise under” a Federal law.
California amended its interpleader statute in 1955 to allow the award of costs and reasonable attorney fees to the stakeholder. See: California Code of Civil Procedure, Section 386.6. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487876/ | ABBATE, Presiding. Judge
DECISION AND ORDER
Plaintiff moved this court on September 15, 1978, to disqualify Daniel Del Priore, Acting Deputy Attorney General, or any other attorney in the employ of the Attorney General’s Office, from acting as counsel for defendant in the above-entitled action. Both the plaintiff, through its attorney of record, Ruth Hall, Esq., and the defendant, through his attorney of record, Daniel R. Del Priore, Esq., submitted memoranda of points and authorities in support of their respective positions as to this issue. In addition to his memorandum of points and authorities, defendant submitted for the court’s consideration a letter dated September 21, 1978, and signed by the Honorable Ricardo J. Bordado, Governor of Guam, stating in pertinent part, “It is in the interest of the government of Guam that I authorize the Office of the Attorney General to represent General Jacobsen in the [above-entitled] suit. * * * The authority for my authorization stems from § 7007 of the Government Code of Guam.”
Oral argument on the plaintiff’s motion was held on September 22, 1978, before the undersigned. Plaintiff’s position, stated generally, is that the above-entitled action has been brought against the defendant in his individual capacity, rather in his capacity as the Acting Attorney Gen*561eral of the territory of Guam. This being the case, plaintiff argues, the Office of the Attorney General is without the capacity to represent the defendant under the laws of the territory of Guam.
Defendant’s position, stated generally, has two main thrusts. Defendant first argues that the current posture of this action is that plaintiff has merely petitioned for leave to file its complaint in quo warranto, but that the said petition has not yet been heard. This being the case, defendant argues, there is no action currently pending against the defendant and thus plaintiff’s motion to disqualify defendant’s counsel is premature. This argument overlooks the reality of the situation at hand. Plaintiff has filed in this court the necessary papers to institute its action in quo warranto against the defendant, and although that petition has not yet been heard, it is clear that the instant litigation has in fact ensued. This court therefore finds defendant’s first argument unpersuasive.
Defendant next argues that the Office of the Attorney General has the capacity to represent the defendant herein under the statutory authority of § 7007(b) of the Government Code of Guam, which reads in pertinent part as follows:
(b) Nothing herein shall be interpreted to preclude the participation of the Attorney General in any litigation in order to protect the interests of the government of Guam....
Counsel for defendant argues that the above-mentioned letter from Governor Bordallo indicates the interest of the government of Guam in the above-entitled action, and that therefore the Office of the Attorney General has the capacity to represent the defendant herein. The court finds this second argument equally unpersuasive.
With all due deference to Governor Bordallo’s opinion as to what constitutes “the interest of the government of *562Guam”, the facts remain that the government of Guam is not a party to the instant action and that the instant action has been filed against the defendant as an individual, not against the defendant in his capacity as the Acting Attorney General of the territory of Guam. Were this court to permit the Office of the Attorney General to represent the defendant herein on the basis of Governor Bordallo’s assertions as set forth in the above-mentioned letter, then nothing in logic would prevent the Governor of Guam from asserting “the interest of the government of Guam” in any lawsuit that might be brought in this court and on that basis instruct the Office of the Attorney General to represent one party or another in such a lawsuit. Such is clearly not within the statutory scheme of Title VIII, Chapter 1 of the Government Code of Guam.
This court having read the memoranda of points and authorities submitted by the parties, and having heard argument upon the issues raised by the plaintiff’s instant motion to disqualify counsel, this court is of the opinion that plaintiff’s motion is meritorious and that defendant’s arguments in opposition thereto are unpersuasive. It is therefore
ORDERED, that plaintiff’s motion to disqualify Daniel Del Priore, Esq., or any other attorney in the employ of the Office of the Attorney General of the territory of Guam, from acting as counsel for defendant in the above-entitled action be, and it is hereby, GRANTED. Mr. Del Priore shall notify defendant of such disqualification personally or by registered mail, and submit proof of such notice to this court on or before Tuesday, September 26, 1978.
ORDERED, that defendant’s request for an order requiring plaintiff to post a cash bond in the amount of $10,000.00 prior to proceeding with its suit, in that the said request is based upon a provision of the California *563Code of Civil Procedure which is of no force or applicability in the territory of Guam, be, and it is hereby DENIED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487877/ | ABBATE, Presiding Judge
DECISION AND ORDER
This matter came before the Court on defendants’ Motion to Dismiss the Indictment. The motion was heard on September 14, 1978, and decision was reserved.
Defendants contend, first of all, that only incompetent *564evidence was submitted to the grand jury on a crucial element of the offense charged. They maintain that Officer O. J. Herradura’s testimony identifying the substance alleged to be marijuana was improperly received by the grand jury under § 50.42 of the Criminal Procedure Code of Guam.
Officer Herradura identified the substance in question on the basis of the Duquenois-Levin reagent test, the field test that he performed on the scene. The defendants argue that this identification was incompetent because Officer Herradura had not been qualified as an expert before the grand jury, and therefore his testimony as to the field test would have been inadmissible at trial.
The Court finds this argument'unpersuasive. Prior to his testimony about the field test, Officer Herradura testified that he had been specializing in drug cases for almost two years and that he had received training in recognition and identification of various drugs, particularly marijuana. In People v. Olf, 195 C.A.2d 97, 15 Cal. Rptr. 390 (1961), the court, in response to an argument that, certain exhibits were improperly received by a grand jury,, stated: “At the trial of the action, there is no doubt that a better foundation would be laid for the introduction of' such exhibits than was laid at the proceedings before the-grand jury, but the failure to establish a technical foundation for their admission before that body does not render such exhibits inadmissible.” 195 C.A.2d at 104. It is well-established that the qualifications of an expert are within the purview and discretion of the judge. See People v. Ignacio, 413 F.2d 513 (1969). It is not this Court’s opinion that the Attorney General’s Office could not have done a better job; rather, the Court states only that the minimum foundational requirements for the admission of the field test were met.
*565The grand jury must find an indictment when there is reasonable cause to believe an indictable offense has been committed and that the defendant committed it. See Criminal Procedure Code § 50.45(b). The Court notes that Officer Herradura’s testimony was not the only evidence linking the defendants with the substance alleged to be marijuana. See testimony of Tomas T. San Nicolas, Transcript of the Grand Jury Proceedings, August 17, 1978. Having carefully reviewed the grand jury transcripts, the Court finds that there was reasonable cause for the grand jury to return an indictment against the defendants herein.
The defendants also contend that the prosecutors improperly argued and made prejudicial misstatements to the grand jury. In many instances, there is a fine line between explaining and arguing. The Court agrees that the grand jury should not be used as a mere tool of the prosecution. However, the function of a grand jury is not to find guilt or innocence, and therefore the proceedings should not be turned into the technical equivalent of a trial. Section 50.46 of the Criminal Procedure Code does not impose on the prosecution the burden of doing as good a job as a defense attorney in attempting to negate defendant’s guilt. The Court does not find that the prosecutors’ presentation before the grand jury was so incompetent or prejudicial as to invalidate the indictment.
These same principles apply to the defendants’ last contention, that evidence as to the quantity of the substance was prejudicial. The court feels that the matters brought up in defendants’ argument would be much more appropriately handled at trial.
Defendants’ Motion to Dismiss the Indictment is therefore hereby DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487878/ | WEEKS, Judge
DECISION
This case comes before the Court on defendant Theodore Washington’s motion to dismiss the indictment filed September 28, 1978, and argued October 12, 1978. The motion is based on the ground that the prosecution violated the mandate of Criminal Procedure Code § 50.46 by failing to *567present to the grand jury a note, allegedly written by the victim, which recites a motive for individuals other than the defendant to have committed the crime which is the basis of this action.
Criminal Procedure Code § 50.46 reads:
The grand jury shall receive only evidence presented to it by the prosecuting attorney but the prosecuting attorney shall submit any evidence in his possession which would tend to negate guilt and the grand jury shall weigh all evidence submitted.
The People defended their failure to introduce the note on the ground that the note was inadmissible hearsay and as such could not be presented to the grand jury due to the requirements of Criminal Procedure Code § 50.42. That Section reads in pertinent part:
The grand jury shall receive only evidence which would be admissible over objection at the trial of a criminal action. . . .
Disposition of this motion turns upon the admissibility of the note written by the victim. Defendant maintains it is admissible pursuant to the state of mind exception to the hearsay rule.
In a case in which the state of mind of a person is relevant to a material issue in the case, his declarations at that time are admissible as proof on that issue. When evidence of such declarations is introduced solely for the purpose of showing what the state of mind of that person was at the time the declarations were made, the declarations are regarded as acts from which the state of mind may be inferred and the truth of the declaration is immaterial. For this reason some courts treat such declarations as non-hearsay rather than a hearsay exception. See generally McCormick on Evidence (2d ed. 1972) Section 294; Jones on Evidence (6th ed. 1972) Section 8:6.
*568In the instant case it is difficult to see how the state of mind of the victim is at issue. Even if we assume that the victim’s state of mind is at issue, the declaration goes to the motive of persons other than the defendant to commit the crime. The great weight of authority holds that evidence tending merely to show that persons other than the defendant had a motive for the commission of the crime is inadmissible unless coupled with other evidence having an inherent tendency to connect such other person with the actual commission of the crime. People v. Mendez, 193 Cal. 39, 223 P. 65 (1924); People v. Perkins, 8 Cal.2d 502 (1937); State v. Perelli, 125 Conn. 321, 5 A.2d 705; State v. Kwan, 174 Wash. 528, 25 P.2d 104 (1933).
It seems to us that there is a sound basis for this rule and that it rests fundamentally upon the same consideration which led to the early adoption of the elementary rules that evidence to be admissible must be both relevant and material. It rests upon the necessity that trials of cases must be both orderly and expeditious, that they must come to an end, and that it should be a logical end. To this end it is necessary that the scope of inquiry into collateral and unimportant issues must be strictly limited. It is quite apparent that if evidence of motive alone upon the part of other persons were admissible, that in a case involving the killing of a man who had led an active and aggressive life it might easily be possible for the defendant to produce evidence tending to show that hundreds of other persons had some motive or animus against the deceased; that a great many trial days might be consumed in the pursuit of inquiries which could not be expected to lead to any satisfactory conclusion. 193 Cal. 39, 52.
In the case of People v. Peete, 28 Cal.2d 306, 169 P.2d 924 (1946), defendant attempted to introduce the hearsay declaration of the murder victim which recited that a certain third person had threatened to kill her. The Court was upheld in denying the admission on the ground that the victim’s state of mind concerning the third person was not at issue until defendant asserted her defense that the third *569person was the actual perpetrator. In that case, the Court assumed that the declaration would have been admissible after evidence regarding the defense’s theory was introduced. However, the defense never attempted to reintroduce the declaration into evidence after evidence of the third party’s involvement was before the Court. It should be noted that in Peete there was substantial evidence circumstantially linking the third person with the crime.
In the instant case the state of mind of the victim regarding other persons is not at issue. Furthermore, there is no additional evidence tending to link the third persons with the perpetration of the crime. It is clear that the victim’s note was not admissible before the grand jury.
It would be totally unreasonable to require the prosecution to put before the grand jury every bit of evidence which by some speculative theory might be admissible at some later time.
It should be noted that the prosecution’s argument that the note was inadmissible because it was not authenticated is unpersuasive. If such were true, the prosecution could withhold exculpatory evidence solely because they were unwilling to lay the necessary foundation. Such a rule would be absurd.
For the foregoing reasons, the defendant’s motion to dismiss the indictment is hereby denied.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487879/ | WEEKS, Judge
DECISION AND ORDER
This matter comes before the Court on defendant’s Motion to Suppress. The motion was heard on October 5, 1978, and decision was reserved.
Defendant seeks to suppress heroin seized from his person under a warrant executed on September 9, 1978. Defendant was searched pursuant to the “persons present therein” language of the search warrant. It is defendant’s contention that this violates his rights under § 35.20(b) *574of the Criminal Procedure Code and the Fourth Amendment.
Section 35.20(b) and the Fourth Amendment require a warrant to particularly describe the place to be searched and the persons or things to be seized. The issue presented by defendant is whether presence at a specified place is a constitutionally sufficient description of a person to allow a search under a warrant. Defendant cites State v. De Simone, 288 A.2d 849 (1972), and People v. Nieves, 330 N.E.2d 26 (1975), in support of his position that the description “persons present therein” is inadequate and therefore fails as a general warrant. However, both these cases recognized that under certain circumstances “persons present therein” language is sufficiently descriptive to satisfy the Fourth Amendment.
In State v. De Simone, 288 A.2d 849, a passenger in a car was searched under a warrant directing a search of a specifically described automobile and “any and all persons found therein.” The automobile had been observed participating in a floating lottery drop. The court upheld the search. Addressing the question of the sufficiency of a description in a warrant under the Fourth Amendment, the court stated:
And, with regard to the Fourth Amendment demand for specificity as to 'the subject to be searched, there is none of the vice of a general warrant if the individual is thus identified by physical nexus to the on-going criminal event itself. In such a setting, the officer executing the warrant has neither the authority nor the opportunity to search everywhere for anyone violating a law. So long as there is good reason to suspect or believe that anyone present at the anticipated scene will probably be a participant, presence becomes the descriptive fact satisfying the aim of the Fourth Amendment. The evil of the general warrant is thereby negated. To insist nonetheless that the individual be otherwise described when circumstances will not permit it, would simply deny Government a needed power to deal with crime, without advancing the interest the Amendment was meant to serve. 288 A.2d at 851.
*575In People v. Nieves, 830 N.E.2d 26, the court found the particular circumstances of that case did not support a reasonable inference that any person present at the restaurant and cocktail lounge possessed gambling records. However, the court clearly pointed out that “any person present” language could, in some circumstances, survive constitutional attack. The court stated that:
. . . what will amount to forbidden generality or, to put it another way, insufficient particularity in a warrant necessarily depends upon the facts and circumstances of each case. 330 N.E.2d at 32.
Upon similar facts and circumstances to the case at bar, the court in Commonwealth v. Smith, 348 N.E.2d 101 (1976), held the warrant to be constitutionally sufficient. In that case, heroin was found on defendant’s person during a search pursuant to a warrant for the apartment, the known occupant, and “any person present who may be found to have heroin in his possession or under his control or to whom such property may have been delivered”. The defendant contended that the search under the “any person present” language of the warrant violated his Fourth and Fourteenth Amendment rights in that the warrant lacked specificity since it did not describe the person of the defendant as the object of the search. The court, however, looked at both the affidavit and the search warrant and concluded that there was probable cause to believe that any person on the premises was involved in the illegal trafficking of heroin. In so holding the court found that the search under the “any persons present” language fell within the narrowly circumscribed range of searches which because of their peculiar facts are consistent with the Fourth Amendment. In reaching its decision the court found several factors particularly relevant:
. . . the premises or area to be searched are small, confined and private; the nature of the criminal activity is such that the participants (in general) constantly shift or change so that it is, *576practically, impossible for the police to predict that any specific person or persons will be on the premises at any given time; and the items specifically described in the warrant as the target of the search are of a size or kind which renders them easily and likely to be concealed on the person. 348 N.E.2d at 107.
This Court finds the reasoning in Commonwealth v. Smith persuasive. The premise to be searched, the Pedro San Agustín residence, was confined and private. Secondly, the affidavit stated that traffic in illicit drugs continued both day and night, and that the informant advised the affiant that the activity was of a continuing nature. In this type of situation it is reasonable to assume that the participants are constantly shifting so it is practically impossible for the police to predict that any specific person or persons would be at the Pedro San Agustín residence at any given time. Additionally, the affidavit states that;
. . . based on my experience and training, I am aware that useable quantities of controlled substances are quite small, and may readily be concealed on the person; That, in my experience, controlled substances are often found concealed upon the person of those individuals who are present on the premises where controlled substances may be found; That in my experience persons present on a premises where a warrant is being executed will often hide the controlled substance sought, or a portion thereof, on their person.
This Court is satisfied that relying on the particular facts in this case the warrant to search “persons present therein” was based upon probable cause to believe that such person would be involved in heroin trafficking. The fact that one of the persons present did not actually possess narcotics is not determinative. A search under the “persons present therein” language is valid where the underlying circumstances clearly demonstrate probable cause to believe that all persons are involved in the criminal activity. But this does not require that, judging by hindsight, every person on the premises was in fact involved in the criminal *577activity. Under the particular circumstances of this case, the Court finds that defendant’s presence at the Pedro San Agustin residence satisfied the specificity requirements of § 35.20 (b) and the Fourth Amendment.
For the aforementioned reasons, defendant’s Motion to Suppress is denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487880/ | ABBATE, Presiding Judge
DECISION AND ORDER
This matter came before the Court on defendant’s Motion to Dismiss. The motion was heard on November 16, 1978, and decision was reserved.
Defendant’s motion to dismiss the indictment is based on the theory that it was brought by the Government as a punitive measure after they were unable to coerce him from exercising his constitutional and statutory rights in Criminal Case No. 191F-78 (1 Guam R. 573). The Court finds this argument unpersuasive.
*578In Bordenkircher v. Hayes, 98 S.Ct. 663 (1978), the U.S. Supreme Court addressed the issue of prosecutor’s threats to reindict defendants made during the course of plea bargaining. The Supreme Court stated “while confronting a defendant with the risk of more severe punishment clearly may have a ‘discouraging effect on the defendant’s assertion of his trial rights, the imposition of these difficult choices [is] an inevitable’ — and permissible — ‘attribute of any legitimate system which tolerates and encourages the negotiation of pleas’ [citations omitted],” 98 S.Ct. at 668.
The Court finds no significant difference between the Bordenkircher case and the instant case. The Court further notes that the case of United States v. Andrews, 444 F.Supp. 1238 (1978), upon which the defendant heavily relies, did not involve a plea bargaining situation.
Defendant’s Motion to Dismiss is therefore hereby DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487881/ | WEEKS, Judge
*579DECISION
In the hearing of 1 September, this Court first indicated that attorneys’ fees would not be awarded at that time. Further in the hearing, counsel for plaintiff had expressed concern that the funds would be paid out of court and be unavailable for allocation as fees if the Court deferred the matter.
The Court then indicated that an order would ensue dealing with fees (based on account of transcript in plaintiff’s instant motion).
Hawaiian Life now moves the Court to reconsider its denial of attorneys’ fees by that order and to award costs.
Plaintiff urges that the Court’s decision not to allow attorneys’ fees in this case is predicated on an adherence to the California law. Plaintiff further urges that the Federal view is alone applicable.
The Court, in its decision of September 14 denying fees, indicated that it was “unclear whether the Federal view or the California position is preferable and should be adopted” and made no finding as to applicable law.
As expressed in the case cited by counsel, the Federal Kule, if applicable, “vests a discretionary power in the Court with respect to the allowance of costs, including attorneys’ fees.” Bank of China v. Wells Fargo Bank & Union Trust Co. (1952 N. Dist. Cal.), 104 F.Supp. 59, 68.
This Court under either view can deny fees and costs.
Therefore, this Court again holds only that attorneys’ fees and costs will not be awarded in this action. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487883/ | BENSON, Acting Presiding Judge
DECISION AND ORDER
This matter came before the Court on the People of the Territory of Guam’s motion for discovery pursuant to the Guam Code of Criminal Procedure, § 70.25(b), (c). The territory of Guam was represented by David Williams and defendant was represented by Howard Trapp. The motion was heard before the Honorable Richard H. Benson on November 29,1978, and decision was reserved.
Opposition to the motion is based on the People’s alleged failure to state the grounds upon which the motion is based pursuant to § 1.27 of the Guam Criminal Procedure Code. Section 1.27 was adopted from the Federal Rules of Criminal Procedure, Rule 47. The Advisory Committee note to Rule 47 states that it does not require the grounds for the motion to be stated “with particularity”. See 8B Moore’s Federal Practice — Criminal Rules, § 47.02 and Wright, Federal Practice and Procedure: Criminal, § 801. Therefore, the Court finds that the People’s citation to § 70.25 in its Points and Authorities adequately complies with § 1-27.
Secondly, defendant claims the privilege against self-incrimination under paragraphs (d) and (u) of § 1421(b) of Title 48 of the United States Code and the 5th and 14th Amendments of the United States Constitution. The Superior Court of Guam in People v. Benavente, 1 Guam R. 525 (1978), and People v. Unchangco, 1 Guam R. 525 (1978), held that § 70.25(b), (c) does not violate a defendant’s privilege against self-incrimination.
*586The People’s Motion for Discovery is therefore hereby GRANTED. The defendant is requested to furnish the required information in 5 days.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487884/ | BENSON, Judge
DECISION AND ORDER
This matter came before the Court on defendant’s Motion to Suppress. The defendant was represented by Joan Baumgarten and the territory of Guam was represented by David Williams. The motion was heard before the Honorable Richard H. Benson on November 22, 1978, and January 2, 1979, and decision was reserved.
The territory of Guam raised the threshold issue of defendant’s standing to challenge the search. Defendant has a substantial possessory interest in the premises searched as a resident of the apartment. The Court finds that defendant meets the criteria established for standing by the U.S. Supreme Court in Jones v. United States, 362 U.S. 258, 80 S.Ct. 725 (1960).
Defendant’s Motion to Suppress is premised on the alleged failure of the affidavit to establish probable cause. The Court notes that affidavits should be tested in “a common-sense and realistic fashion”, and reviewing courts should “not invalidate the warrant by interpreting the affidavit in a hypertechnical, rather than a commonsense, manner”. United States v. Ventresca, 380 U.S. 104, 85 S.Ct. 741 (1965).
Probable cause for the issuance of a search warrant can be established by the timeworn procedure of searching an informant, “finding him to be without money or drugs, *588supplying him with money, watching him enter the premises and leave it, and finally searching him to determine that the money had been spent and drugs obtained”. United States v. McKetham, 247 F.Supp. 324 at 327 (1965). The District Court of Guam in United States v. William Pangelinan, D.C. Criminal Case No. 78-000 28, found probable cause extant on the basis of this methodology. In the instant case, the affiant did not accompany the informant to the residence. Rather, the affiant stopped his vehicle one-quarter mile from the defendant’s residence. He then waited at that location several minutes before observing the informant driving towards him. During that time the informant was not, and could not, be continually observed by the affiant. Defendant’s apartment is located in a residential area in which there are numerous other dwelling houses. The control necessary to provide probable cause through the above-mentioned procedure was not present.
Another construction posited is that it is an affidavit in which the affiant’s testimony relies upon the anonymous tip of the informant, CRI. Under this construction, the affidavit must meet the two-prong test of Aguilar v. Texas, 378 U.S. 108, 84 S.Ct. 1509 (1964). The court finds that the affidavit does not adequately comply with the second prong of the Aguilar test. That prong requires that “the affidavit state sufficient underlying circumstances establishing the reliability or credibility of the informant”. White-bread, Constitutional Criminal Procedure 49 (1st ed. 1978). The affidavit sets forth the facts of two prior controlled buys in which the informant, CRI, was followed to within one block of the residence from which he purchased the controlled substance. These facts are illustrative of CRI’s reliability as a vehicle for a controlled buy. They do not state sufficient circumstances establishing CRI’s reliability or credibility in providing tips to the affiant or other police officers.
*589Spinelli v. United States, 393 U.S. 410, 89 S.Ct. 584 (1969), provides an alternative route to the establishment of the credibility prong. Corroboration through independent police observation can validate a tip found inadequate under Aguilar. However, the affidavit does not contain independent police observation of criminal activity at the defendant’s residence.
For the aforementioned reasons, defendant’s Motion to Suppress is granted.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487885/ | ABBATE, Presiding Judge
DECISION
Defendant moves for a motion to reduce a three (3) year sentence. The defendant pleaded guilty to possession of a concealed weapon.
Motion is DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487886/ | RAKER, Judge
DECISION
This matter came before the Court on plaintiff’s Motion to Compel Answers to Interrogatories. Joan Baumgarten appeared on behalf of the plaintiff and Aurora Jose appeared for defendant, Citibank. The matter was heard before the Honorable John P. Raker and decision was reserved.
The Court finds that the scope of discovery is very broad, and that the burden is on the objecting party to show why discovery should not be permitted. See Wright and Miller, Federal Practice and Procedure, Civil §§ 2165 and 2176. The Court further finds that, although cases speak of trade secrets as being privileged, the privilege is, at best, only a qualified privilege which has been more readily applied to disclosure of valuable commercial *591information rather than to disclosure of merely sensitive information. See Wright and Miller, supra, § 2020, n.56 and 57.
Plaintiff’s Motion is therefore GRANTED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487889/ | ABB ATE, Presiding Judge
DECISION AND ORDER
This matter came before the Court on Defendant’s Motion for Partial Summary Judgment. Paul Lawlor appeared on behalf of the defendant and Lawrence Teker appeared for the plaintiff. The motion was heard before the Honorable Paul J. Abbate on January 15, 1979, and decision was reserved.
The motion concerns the right of action of plaintiff against Guam Power Authority, an instrumentality of the government of Guam. The well-recognized principle that a sovereign cannot be sued in its own courts without the consent of Legislature was established in Guam by 48 U.S.C.A. § 1421a. The issue presented by this motion is the extent to which the Legislature has waived G.P.A.’s sovereign immunity.
It is defendant’s position that the relaxation of immunity is limited to the Government Claims Act, Chapter 6, Title VII of the Government Code of Guam. Therefore, *597plaintiff’s failure to comply with the Government Claims Act renders G.P.A. immune from suit. Plaintiff contends that G.P.A. is amenable to suit without regard to the Government Claims Act.
Guam Power Authority was established under Government Code § 21502, which provides that:
There is within, and a public corporation and autonomous instrumentality of, the Government of Guam, a Guam Power Authority.
Government Code § 21503 delineates the powers granted to G.P.A. It states that:
The Authority shall have and exercise each and all of the following powers ... (5) ... sue or be sued in its own corporate name.
The “sue or be sued” language seems to denote a general waiver of immunity to suit. However, Government Code § 6500.19, governing payment under the Government Claims Act, sets forth that:
Claims against . . . Guam Power Authority, . . . shall be paid only out of the funds of those agencies.
This infers that claims against G.P.A. are under the Government Claims Act.
To resolve this ambiguity, it must initially be determined whether the “sue or be sued” language is sufficient to constitute a general waiver of immunity from suit. In Long v. Northeast Soil Conservation District of Los Angeles, 72 So.2d 543 (1954), the Court considered the extent to which a governmental agency with the power “to sue and be sued in the name of the district” had waived its immunity from suit. The Court held that:
... a Legislature, having the authority to establish an administrative or governmental agency, separate and distinct from the State as a sovereign entity, and having the right to waive immunity, can and does express that waiver when without restriction or qualification it empowers such agency to sue and be sued.... If the words are to be regarded as having any meaning whatsoever, they must *598be given the full meaning to which they are entitled by the dignity of definition and construction. 72 So.2d at 546, 548.
The U.S. Supreme Court in Keifer v. Reconstruction Finance Corporation and Regional Agricultural Credit Corporation, 306 U.S. 381, 59 S.Ct. 516 at 518, analyzed the phrase “sue or to be sued” as follows:
. . . Congress has provided for not less than forty of such corporations discharging governmental functions, and without exception the authority to-sue-and-be-sued was included. Such a firm practice is partly an indication of the present climate of opinion which has brought governmental immunity from suit into disfavor, partly it reveals a definite attitude on the part of Congress which should be given hospitable scope.
The Court finds that the use of “sue or be sued” language denotes a general waiver of immunity from suit.
Thus a conflict exists when the “sue or be sued” language is read in conjunction with § 6500.19 governing payment under the Government Claims Act. The Superior Court in Manibusan v. Guam Memorial Hospital, Civil Case No. 285-78, faced this ambiguity as it pertained to G.M.H.A. After an evaluation of the statutory scheme, the Court held that G.M.H.A. could be sued without regard to the Government Claims Act. This case is persuasive but not binding. The Court finds it necessary to examine the legislative and administrative construction of these statutes as applied to G.P.A.
Unfortunately, the Guam Legislature has no record of the legislative history of these statutes. However, plaintiff has provided the Court with a transcript of the legislative debate on Bill No. 182. That Bill pertains to Guam Memorial Hospital and was enacted subsequent to the statutes in issue. In reviewing the transcript, the Court acknowledges that:
Although comments about an earlier act in a legislative committee report on a subsequent bill are not part of the legislative history *599of the earlier act and therefore have less probative force than legislative history, they are entitled to consideration as an expert opinion concerning its proper interpretation. Boosee Corp. v. United States, 411 F.2d 231 (5th Cir. 1969).
The following germane remarks were made by Senator Joe T. San Agustín during the debate on Bill No. 182:
. . . that a quick check of all the authorities of all the private corporations that we have on the books of the territorial government of Guam, the phrase: “has the words to sue and be sued in its corporate name”, period. The intent of all these particular phraseologies, Madame Speaker, was to preclude any suit, any claims against the “authorities” or the public corporations from going beyond the “authorities” to the government of Guam per-se . . . the Guam Educational Television Corporation Act has that- same phraseology but it’s not exposed to the Government of Guam Claims Torts Act. The Telephone Authority has the same phraseology, but the government of Guam in its totality is not exposed to suit beyond the Authority. Commercial Port, the Airport Authority, Guam Power Authority, Guam Economic Development Authority, and for that matter, even the Guam Housing Corporation.
The Court finds that this evidences an intent that suits against G.P.A. should be without regard to the Government Claims Act.
Administrative interpretations are also persuasive in determining statutory construction. The Court notes that:
A practical construction given by a statute by the public generally, as indicated by a uniform course of conduct over a considerable period of time, and acquiesced in and approved by a public official charged with the duty of enforcing the act, is entitled to great weight in the interpretation which should be given it, in case there is any ambiguity in its meaning serious enough to raise a reasonable doubt in any fair mind. Hennessy v. Personal Finance Corp., 26 N.Y.S.2d 1072 (1941).
Cases cited by plaintiff indicate that in the past G.P.A. has acquiesced to suits outside the Government Claims Act. *600Defendant is only presently objecting to its amenability to such suits. Similarly, G.H.C., G.H.U.R.A. and G.T.A., government of Guam public corporations which may sue or be sued in their own corporate names, have also permitted suits without regard to the Government Claims Act.
On final analysis, the Court concludes that G.P.A.’s waiver of sovereign immunity is not limited to the Government Claims Act. Therefore, defendant’s Motion for Partial Summary Judgment is DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487890/ | WEEKS, Judge
DECISION AND ORDER
This matter came before the Court on Plaintiff’s Motion for Default. Roger Crouthamel appeared on behalf of the *601plaintiff and Harry Boertzel appeared for defendant. The motion was heard before the Honorable Janet H. Weeks, and decision was reserved.
Plaintiff’s motion for default judgment is premised on the failure of G.M.H.A. to answer the complaint within the twenty (20) days provided by Rule 12(a) of the Superior Court Rules of Civil Procedure. G.M.H.A. contends that it is a government agency within the meaning of Rule 12(a) and, therefore, has sixty (60) days within which to answer. The Court notes that the parties have proceeded with the action on the understanding that there has been no waiver.
Rule 12(a) was adopted from Rule 12(a) of the Federal Rules of Civil Procedure except that “the Government” appears in lieu of “the United States”. Rule 12(a) of the Superior Court Rules of Civil procedure reads:
The Government or an officer or agency thereof shall serve an answer to the complaint, . . . within sixty (60) days after service upon the Government of the pleading in which the claim is asserted.
Federal interpretation of the term agency is therefore persuasive. The case of Ramsey v. United Mine Workers, 27 F.R.D. 423 (1961), is often cited as an authority. It states that:
It is logical to decide that “agency” within the meaning of Kule 12 (a) is an agency, corporate or otherwise, whose authority under congressional enactment is solely to perform governmental service as distinguished from an agency that is limited in performing governmental functions, such as a national bank.
Statutorily, agency has been defined by 28 U.S.C.A. 451, as follows:
The term “agency” includes any department, independent establishment, commission, administration, authority, board or bureau of the United States or any corporation in which the United States has a proprietary interest, unless the context shows that such term was intended to be used in a more limited sense.
*602The Court finds that G.M.H.A. qualifies as an agency within the meaning of Rule 12(a). G.M.H.A. was established by Public Law 14-29, Government Code § 49002. In so creating G.M.H.A. the Legislature provided that:
There is within, and a public corporation and autonomous instrumentality of the government of Guam called the Guam Memorial Hospital Authority:
Section 49003(a) mandates G.M.H.A. to:
Maintain and operate a facility providing acute, chronic and all other health care services for the people of the Territory.
All powers vested in the hospital are exercised by a Board nominated and appointed by the Governor with the advice and consent of the Legislature. Furthermore, as an instrumentality of the Territory, the property and revenue of the hospital are exempt from taxation by the Territory. G.M.H.A. has sufficient characteristics of a governmental agency for purposes of Rule 12(a).
For the aforementioned reasons, plaintiff’s Motion is DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487891/ | BENSON, Judge
ORDER
These cases, presenting similar problems, were consolidated for hearing on the motions by the plaintiffs and by the defendant. The plaintiffs’ motions for judgments on the pleading, or in the alternative for summary judgments, were heard and submitted for decision on April 24, 1979. The defendant’s motion for summary judgment was heard and submitted for decision on May 9,1979.
Plaintiff David Shimizu entered into a contract with the government of Guam on December 7,1978, to serve as Men*604tal Health Coordinator for a period of twelve (12) months. He commenced his employment on December 18, 1978. On or about January 3, 1979, the Acting Administrator of the Mental Health and Substance Abuse Agency directed the plaintiff to vacate his office. By letter of January 8, 1979, the Acting Administrator terminated his contract.
Plaintiff Joseph Cruz entered into a contract with the government of Guam on December 20, 1978, and commenced his employment as Personnel Manager for the Public Utilities Agency of Guam on December 28, 1978. The contract is for a period of two (2) years. On January 2, 1979, the plaintiff was directed to leave his work by the Acting Chief Officer of the Public Utilities Agency of Guam, and on January 10,1979, the same person, by letter, notified the plaintiff that the contract was terminated.
Matters outside of the pleadings have been considered and the plaintiffs’ motions are treated as motions for summary judgment. Kule 12 (c).
Neither position as Personnel Manager nor as Mental Health Coordinator exists within the Merit System of the government of Guam and no application to create such new positions has been made by the Governor.
In each of these cases, all the allegations of the complaints have been admitted by the defendant, except the allegation that declaratory relief is appropriate. The defendant asserts as an affirmative defense that the contracts are void. The contracts appear fair and regular. The burden of proof, therefore, is on the defendant to assert illegality of the contracts. The court believes the defendant has properly done this by raising it in his affirmative defense.
In oral argument, the defendant said that there may be an issue of fact as to whether or not the contracts are for “professional or technical services” for “temporary” period. Section 4002(a) (5) of the Government Code of Guam. The plaintiffs in oral argument on April 24, 1979, made it *605clear that it is their position that the contracts fall within this Section. Nevertheless, the defendant submitted no factual matter to the contrary by the time his motion was argued on May 9,1979.
It is the defendant’s position that the contracts are illegal since they are attempts to evade the Merit System required by the laws of Guam. The court, however, cannot permit the defendant to merely rest on his affirmative defense alleged in his answer (Higgins v. Baker, 309 F.Supp., at 639) since there is clear authority in the law for hiring outside the Merit System. Section 1422 of the Organic Act of Guam; § 4107 of the Government Code of Guam.
In support of his position that the contracts are void, the defendant, other than' the answer, made no showing that the appointments were not based on “merit”, or that the manner of selection was not “free of political consideration”, or that it was “practicable” to have based the contracts on competitive practical tests and evaluations. Section 4001 of the Government Code of Guam.
The defendant’s position has been that the plaintiffs must make an affirmative factual showing that it was impractical to make the appointments within the Merit System and that they are both contracts to render temporary professional or technical services. On the contrary, the defendant must by an affirmative factual showing demonstrate that the contract is illegal. He is not entitled to rely merely on the allegation of an affirmative defense.
The defendant also alleges that the termination of the contracts was justified under § 4107 of the Government Code of Guam, since the Governor has not submitted the positions to the Civil Service Commission. This Section does not furnish any support for the affirmative defense that the contracts were void. On the date of the termination of the Cruz contract, thirty (30) days had not elapsed *606since the creation of the position, and as to neither had sixty (60) days elapsed during which the Commission could act. The failure of the Governor to submit the positions cannot make the contracts void. These cases do not raise § 4107 problems.
For the reasons stated, it is ordered that the plaintiffs’ motions be, and they hereby are, granted.
It is further ordered that the defendant’s motions be, and they hereby are, denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487893/ | WEEKS, Judge
*614DECISION
This matter comes before the Court on plaintiff’s Motion for Summary Judgment.
The complaint alleges that the plaintiff has a default judgment entered in New Mexico in divorce proceedings. Plaintiff further alleges that there are sums of money owed in child support arising from that judgment.
Defendant answered the complaint with denials and affirmatively pleads failure of personal service, lack of jurisdiction and fraud.
By affidavit filed with the Summary Judgment motion plaintiff’s counsel categorizes the New Mexico judgment as valid and opines that the defendant’s service is valid.
Defendant by affidavit in opposition indicates regular payment under the judgment in this case and avers improper notice of the Order to Show Cause which modified the original order.
Defendant’s attorney disputed the validity of the service of the Order to Show Cause, his appraisal of the New Mexico Law being that this is invalid.
The fraud allegation is supported by unnotorized copy of the Order to Show Cause submitted to this Court (although a copy of the papers served was directed to be sent to this Court by plaintiff island counsel, this Court did not receive them).
This paper does allege defendant’s minimum salary of $25,000.00. Defendant has in his affidavit sworn to a $15,000.00 figure.
The alleged misrepresentation of the current income of defendant would be a factor to consider in modification of the last ordered support payment and can properly be considered by this Court.
Foreign created-alimony and support obligations are enforceable in this state. In an action to enforce a modifiable support obligation, *615either party may tender and litigate any plea for modification that could be presented to the Courts of the state where the alimony or support decree was originally rendered. Worthley v. Worthley, 283 P.2d 19 (cited by defendant in his memorandum and cited in oral argument by plaintiff), contains this language at p. 25.
In view of this mandate to consider any plea for modification, this Court finds that Summary Judgment is not appropriate at this time and the motion is hereby denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487894/ | ABBATE, Presiding Judge
DECISION AND ORDER
This matter came before the Court on the defendant Asan Blasting Co.’s Motion to Dismiss and Order of Dismissal. Duncan McCully appeared on behalf of the defend*616ant Asan Blasting Co. and Edward Arriola represented the plaintiff Agat Boat Shop, Inc. The motion was heard before the Honorable Paul J. Abbate on May 24, 1979, and decision was reserved.
The defendants seek a dismissal of Civil Case No. 380-78. That suit was filed against them by the plaintiff, Agat Boat Shop, Inc. The suit consists of two causes of action. In the first cause of action the plaintiff prays for $658,000 in general and punitive damages for the alleged intentional destruction of his property by the defendants. The plaintiff, in the second cause of action, prays for $54,000 in general and special damages plus costs of the suit for the alleged unlawful withholding, by the defendants, of the plaintiff’s property.
The defendants were assigned a judgment recovered by the assignor, Calvo Finance Corporation, against the Agat Boat Shop, Inc. (plaintiff in the present suit) in the Superior Court of Guam, Civil Case No. 922-77, for the sum of $16,020.00. Subsequently, a writ of execution was issued and the defendant (the highest bidder) purchased at an execution sale of the chose in action the present cause factors of the plaintiff for the sum of $6,000.00. Thereafter, defendants stipulated that the Court dismiss the cause of action.
The general rule is that a chose in action may not be levied upon by a writ of execution. It is recognized, however, that a legislature may adopt statutes contra to the general rule. 30 Am.Jur. 2d 517-518.
Guam has adopted the prior California § 688 of the Code of Civil Procedure. This Section, § 688 of Guam’s Code of Civil Procedure, refers to property liable to execution. Since Guam courts have not made relevant interpretation of § 688 we turn to California’s interpretation of its prior § 688 to determine whether a chose in action shall be subject to levy or sale on execution.
*617A revelant 1937 California case says that “the causes of action were things in action and were assignable and being personal property of a kind which was not specifically made exempt from execution, and also being not capable of manual delivery, they could be sold on execution under § 688 of the Code of Civil Procedure.” Everts v. Fawcett (Will S.) Co., 24 C.A.2d 213, 74 P.2d 815 (1937).
A later case, still under the prior § 688, which dealt with the same issue, also determined that a chose in action may be levied upon and sold on execution. Mortimer v. Young, 53 C.A.2d 317, 127 P.2d 950 (1942).
It is apparent that under California’s prior § 688, upon which Guam’s § 688 is based, a chose in action may be levied upon and sold on execution. Accordingly, the Court finds that the same interpretation be given to § 688 of Guam’s Code of Civil Procedure. Moreover, § 691 (execution, service of writ) specifically refers to “things in action”. As it was determined in Everts and Mortimer, a cause of action for tort is a thing in action. “It is therefore within the provision of § 691 of the Code of Civil Procedure (California and Guam’s § 691 are identical) for the selling of the 'things in action’ of the judgment debtor on execution.” Mortimer, supra.
For the aforementioned reasons, the defendants Motion for Dismissal is GRANTED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487895/ | ABBATE, Presiding Judge
DECISION AND ORDER
This matter came before this Court, the Honorable Paul J. Abbate presiding, on June 6, 1979, on defendant Lee Chung Sook’s Motion to Dismiss and Plaintiffs’ Motion for default judgment, and on June 27, 1979, on defendant Agusto Paulino’s Motion for summary judgments. Both defendants were represented by Timothy Stewart and the plaintiff was represented by John Dierking.
Defendant’s motion to dismiss is based on an allegation of defective service on defendant Lee Chung Sook by service on her attorney-in-fact, Mr. Paulino. This motion is essentially the same as that raised previously by counsel for defendant by a motion to quash service, and was decided adversely to defendant in the Court’s decision of April 3, 1979. The motion is therefore DENIED.
*619Defendant Paulino has moved for summary judgment in his favor on the grounds that he is not in possession of the premises. However, the affidavit by which he seeks to establish this fact was not served with the motion as required by Rule 6 (d), or ten (10) days in advance of the hearing as required by Rule 56(c). In this case there is no prejudice to the plaintiff for the plaintiff does not seek to contradict the affidavit or allege that due to the shortened time he has been prejudiced in obtaining evidence to contradict the affidavit. (See Wright and Miller, Federal Practice and Procedure Civil Section 2719 (1973).) In fact, both parties have stated that based on such an affidavit they would stipulate to a dismissal, albeit on different terms. In this case either continuing the matter or denying the motion with leave to refile it would only serve to waste judicial resources, and as the plaintiff has claimed no prejudice to his rights, the summary judgment motion as to defendant Paulino is hereby GRANTED.
The final motion outstanding in this matter is plaintiffs’ motion for default judgment. Such a motion is addressed to the discretion of the Court (see Wright and Miller, Federal Practice and Procedure Section 2685 (1973)) and based on the record in this matter the motion is DENIED. The defendant is given ten (10) days from the date of this order to plead further.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487896/ | ABBATE, Presiding Judge
DECISION AND ORDER
This matter comes before the Court on the plaintiff, RCA Global Communications’, Motion for Summary Judgment. Robert Klitzkie appeared on behalf of the plaintiff and Melinda Pregerson appeared on behalf of the defendant, Teresita Philyan, d/b/a New Hollywood Massage, a/k/a Glass Door Massage. The motion was heard before the Honorable Paul J. Abbate on June 29, 1979, and decision was reserved.
*621The plaintiff seeks summary judgment against the defendant on a claim for unpaid charges on the telephone account of the New Hollywood Massage.
Affidavits and copies of telephone records have been submitted on behalf of the plaintiff to support the contention that the amount of $9,180.75 is due and owing by the defendant to the plaintiff. The above-mentioned materials are defective. They do not comply with the requirements of the business records exception to the hearsay rule of evidence. In order to fall within that exception they must state that (1) the records were made in the course of a business, (2) the records were made in the regular course of business activity, (3) the entrant must have the duty to make the entry, (4) the entrant or person with the business duty to report must have personal knowledge of the matter reported, (5) the entry must be made near the time of the transaction, and (6) the authenticity of records must be established.
In opposition of the motion, the defendant has submitted an affidavit, the essence of which is that there was no contract between the parties from June 1978 to October 1978 and that no toll charges were accepted by the defendant or an authorized agent from October 1978 to February 1979. So even if we assume that the plaintiff’s material properly fell within the above-mentioned business records exception, there still appears to be a conflict as to the defendant’s obligation for the unpaid charges in question.
To grant a Motion for Summary Judgment, it must be apparent that no genuine issue of material fact remains for trial. In this case the affidavits in support of and in opposition to the motion raise conflicting issues of fact.
For the aforementioned reasons, the plaintiff’s Motion for Summary Judgment is DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487897/ | ABBATE, Presiding Judge
DECISION AND ORDER
This matter came before the Court on plaintiff RCA Global Communications’ Motion for Summary Judgment. Mr. Klitzkie appeared on behalf of the plaintiff and Mr. Manibusan represented the defendant. The motion was heard before the Honorable Paul J. Abbate on July 16, 1979, and decision was reserved.
The plaintiff seeks summary judgment on an action to recover a sum of $3,507.75 from the defendant. The above *623sum was allegedly incurred and charged to the defendant’s RCA account number. The basis for the plaintiff’s action are records of the calls, supported by the affidavit from the plaintiff’s credit administrator.
The defendant denies any responsibility for the above-mentioned charges. Also, the defendant contends that the plaintiff was negligent in allowing such an amount to accrue since the credit limit on the defendant’s RCA account is only $150.00.
Before turning to the question of the existence of any genuine material issue of fact we must examine the records and supporting affidavit submitted by the plaintiff in support of summary judgment.
In order to be admissible as evidence the records in question must fall into the business records exception to the hearsay rule. In order to fall within the above-mentioned exception certain requirements must generally be met. There are a line of California cases which list the basic elements which must be laid for a proper foundation. That would allow the business records to be admissible into evidence. The requirements are as follows:
(1) that the books or records are kept in the regular course of business;
(2) that the business is of a character in which it is proper and customary to keep such books;
(3) that they were made at the time or within a reasonable proximity to the time of the transactions;
(4) that the entries are either original entries or the first permanent entries of the transaction; and
(5) that the persons making them had personal knowledge of the transaction or obtained such knowledge from a report regularly made to him by some person employed in *624the business whose duty it was to make the same in the regular course of business; or the sources of information and method and time of preparation were such as to indicate its trustworthiness. Gough v. Security Trust & Savings Bank, 162 C.A.2d 90 (1958); Kains v. First National Bank, 30 C.A. 447 (1939); Richmond v. Frederick, 116 C.A.2d 541 (1953); Bufono v. City and County of San Francisco, 233 C.A.2d 61 (1965); Burke v. John E. Marshall, Inc., 42 C.A.2d 195 (1941); Chan Kiu Sing v. Gordon, 171 Cal. 28 (1915).
Efforts to enter business records into evidence without laying a proper foundation will render those records incompetent and therefore inadmissible. Pruett v. Burr, 257 P.2d 690 (1953); Pabst Brewing Co. v. E. Clemens Horst Co., 229 F. 913 (1916).
In the present case the plaintiff has failed to lay a sufficient foundation. The affidavit of one Beverly Bushaw does not fulfill the above-mentioned requirements for a proper foundation.
Even though the records in question were to be found admissible a summary judgment would be improper for the reason that genuine material issues of fact do exist in this case and accordingly must be litigated at trial.
For the aforementioned reasons, the plaintiff’s MOTION IS DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487898/ | ABBATE, Presiding Judge
DECISION AND ORDER
This matter came before the Court on the defendant Loan Kim Barker’s Motion for Summary Judgment on June 25, 1979. Randall Fennell appeared on behalf of the defendant and the plaintiff was represented by Ronald Geedman.
This is a wrongful death action in which the plaintiff seeks damages for pain and suffering, loss to the estate, and punitive damages. The present question is whether the damages prayed for by the plaintiff are properly recoverable in the context of a wrongful death action.
Generally, the only type of damages awarded in a wrongful death action are compensation for the pecuniary loss suffered by the plaintiff. Estate of D’India, 63 C.A.3d 942; *626Bond v. United Railroad, 113 P. 366; Steel v. Imperial Airlines, 12 C.3d 115.
The rule in this jurisdiction is that damages to a decedent’s estate are an improper basis for damages in a wrongful death action. Bradford v. Brock, 140 C.A. 47. Therefore, we find that damages for loss to the estate are not properly recoverable in this case.
It is also clear that punitive damages may not be had in a wrongful death action. Doak v. Superior Court, 257 C.A.2d 825; Lange v. Schoettler, 47 P. 139.
The last type of relief sought concerns the pain and suffering of the decedent. It is established that no recovery, based on the pain and suffering of the decedent, will be awarded in a wrongful death action. Carr v. Pacific Telephone Co., 26 C.A.3d 537; Bond v. United Railroad, supra.
For the aforementioned reasons, the defendants’ Motion for Summary Judgment is GRANTED as to the issue of the damages prayed for in the complaint.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487899/ | ABBATE, Presiding Judge
DECISION AND ORDER
This action came before the Court for trial on May 31, 1979. David Shapiro appeared on behalf of the plaintiff and Frank Lujan appeared on behalf of the defendant. The matter was heard before the Honorable Paul J. Abbate and decision was reserved.
On February 28, 1977, the plaintiff and the defendant entered into a Funeral Security Plan contract. This plan provided for the defendant or a member of his family a casket plus funeral services. The value of the above-mentioned casket and funeral service was approximately $1,450.00. Subsequently, after making $160 in payments, the defendant defaulted on the agreement. Shortly following the death of Maria T. Cruz (wife of defendant), the plaintiff approached the defendant concerning possible funeral arrangements for his wife. The plaintiff was willing to provide a casket along with funeral services for the value of the original contract less the $160 received. So the plaintiff was offering to provide the funeral for about $1,290.00. The defendant, however, wanted a more expensive casket ($350 more) than that covered in the original plan. The defendant did not manifest any desire for increased services. Under the original plan services amounted to $900.00. Eventually, the plaintiff acquired $500 from the defendant and the defendant’s signature on a contract for a $2,775 funeral. The above contract provided for a $900 casket with $1,875 in services.
The defendant signed the second contract without reading it as he is unable to read due to lack of formal educa*628tion. Consequently, the defendant signed the second contract believing the contents to be something different than what they actually were. The defendant was under the mistaken impression that he was contracting for the services offered in the original plan, which had a cost of $900.00.
The holding of the Court is that the contract, entered into by the plaintiff and the defendant on November 21, 1978, be reformed to express the true intention of the parties. Accordingly, the defendant should not bear the extra cost for the services indicated in the second contract. Instead, the defendant is liable for the services offered in the original plan.
Guam’s Civil Code, § 3899, lists various situations in which a contract may be reformed or revised to express the intention of the parties. The three situations listed are fraud, mutual mistake, and a mistake of one party, which the other at the time knew or suspected.
The basis for reformation in this case is the mistake of one party which resulted in a contract which does not express the intention of the parties. At the time the plaintiff entered into the second contract with the defendant, he knew or should have known that the latter was under the mistaken impression that the only difference in the original and the later plan was a change of caskets. The more than 100% increase in the funeral service cost was solely attributable to the plaintiff’s actions. The defendant expressed a desire only for a more expensive casket and he believed that this aspect of the contract would be the only significant deviation from the original contract.
Being illiterate, aged, subject to obvious emotional infirmities, and inexperienced in business and financial matters, it was apparent that the defendant would be unable to ascertain that he was signing a document which did not represent his true intentions and agreement with the plaintiff.
*629In addition, in a similar situation it was determined that the aggrieved party may be said to have executed the contract through “unconscious ignorance” within the meaning of § 1577 of the Civil Code concerning mistake of fact. Moore v. Copp, 119 Cal. 429 (1897).
For the reasons given above, the Court hereby orders that the contract of November 21,1978, between the plaintiff and the defendant be reformed in the following manner:
U.S. metal casket (open) $ 900.00
Service 900.00
Grand Total $1,800.00
Less pre-paid payment (160.00)
Less down payment (500.00)
Unpaid Balance $1,140.00
It is SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487900/ | ABBATE, Presiding Judge
DECISION AND ORDER
This matter came for hearing in the above-titled Court before the Honorable Paul J. Abbate on July 24, 1979. The Government was represented by Assistant Attorney General Paul Pohlen, defendánt Anthony Flores was represented by Stephen Cronin, and defendant Raymond Quidachay was represented by Assistant Public Defender Richard Pipes. Defendant Quidachay moved for severance of defendants in this matter, and co-defendant Flores joined in the motion by moving to reconsider a previously denied motion for severance.
Defendants’ motion is based on § 65.35 of the Criminal Procedure Code, and the Sixth and Fourteenth Amendments to the United States Constitution, and the Organic Act of Guam (48 U.S.C. Section 1421(b); Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620 (1968)). The gravamen of defendants’ complaint is that a joint trial will result in prejudice, deny them the right of confrontation of witnesses against them, and deny them due process of law in that each defendant has allegedly made extrajudicial statements which would be admissible against the defendant who made the statement, but not against the other.
Guam Criminal Procedure Code § 65.35 is textually the same as Federal Rule of Criminal Procedure 14, and direct reference to this rule is made in the Code as the *631source of § 65.35. A motion made under this Section is addressed to the sound discretion of the trial court. Parker v. Randolph, 99 S.Ct. 2132 (1979); Opper v. United States, 75 S.Ct. 158, 165, 348 U.S. 84, 95 (1954).
In the instant case, there are several claims that prejudice will result if severance is not granted. The first, of course, is that evidence would be admitted at a joint trial, albeit with a curative instruction that it may not be used against the co-defendant who did not make the statement, which would not be admissible if the co-defendant’s trial was severed, and without benefit of cross-examination. It is argued by the Government that this is a case such as Parker v. Randolph, supra, in which the co-defendant has himself made an incriminating statement, and thus lessened the prejudice of admitting his co-defendant’s statement. Parker is inapposite on its facts for two reasons: First, defendant Flores has allegedly made not one confession, but several which inculpate his co-defendant Quidachay to varying degrees, and increase the confusion the jury would be subjected to in hearing these confessions and attempting to excise any probative effect on the guilt or innocence of the defendant who did not make the confession. Second, the oral statement attributed to defendant Quidachay in the view of the Court stops short of being a complete confession as to all of the elements of the offense with which he is charged, and is clearly inconsistent with one or more of the confessions made by Flores. Thus, we do not have, as in Parker, a situation in which “the defendant himself has confessed and his confession ‘interlocks’ with and supports the confession of his co-defendant”.
A second factor raised by defense counsel is “the possibility that at a separate trial a co-defendant would give exonerating testimony”, People v. Massie, 66 Cal.2d 899, at 954.
*632And finally, joint trial in this case raises the spectre of comment on the failure of the co-defendant to take the stand by counsel for a defendant. (De Luna v. United States, 308 F.2d 140), thus raising prejudicial error as to the nontestifying defendant.
For the foregoing reasons, it is the decision of the Court that it is in the interest of justice that trial in this matter be severed as to each defendant. Jury selection for defendant Flores is set for the original date set for a joint trial, August 10, 1979, 9:00 a.m. Jury selection as to defendant Quidachay is set for 9:00 a.m., August 24, 1979.
IT IS SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487901/ | ABBATE, Presiding Judge
This matter came on for hearing in the above-captioned court, the Honorable Paul J. Abbate presiding, on August 6, 1979. The Territory was represented by Assistant Attorney General Paul Pohlen and the defendant was represented by Stephen Cronin. Defendant moved to suppress a written statement made on June 2, 1978, and oral statements allegedly made at a polygraph examination on September 13,1978.
1. THE STATEMENT OF JUNE 2, 1978
The written statement of Mr. Flores was taken after interrogation from approximately 10:30 p.m. on June 1, 1978, until 5:00 a.m. on June 2. During this time Mr. Flores was not in communication with any friends, relative or advisor, but solely limited to contact with two shifts of interrogating police officers. At the time of the interrogation, Mr. Flores was nineteen (19) years of age by less than two (2) months and, although he had been passed through further grades, the possessor of a fourth grade education.
*634Prior to this statement, Mr. Flores claims to have been physically abused and threatened by Detective Ulloa. This allegation is denied by Detective Ulloa. It is undisputed that Detective Ulloa was alone in the interrogation room with Mr. Flores prior to his making any inculpatory statement.
Giving due weight to the age and intelligence of the accused, length of detention and interrogation, conditions of interrogation, and allegations of threats and physical abuse, it is the decision of the court that, in the totality of the circumstances, the Territory has not met its burden of showing by a preponderance of the evidence that the statement of June 2, 1978, was freely and voluntarily given. It must, therefore, be suppressed. Lego v. Twomey, 404 U.S. 477, 92 S.Ct. 619 (1972).
2. ORAL STATEMENTS OF SEPTEMBER 13, 1978
Pursuant to plea discussions with the prosecution, Mr. Flores arranged to take a polygraph examination through his counsel. The evidence is undisputed that the defense and prosecution agreed on nine (9) questions which would be asked Mr. Flores. The answers to these questions might be exculpatory, but they would not be inculpatory as they were phrased in terms of whether Mr. Flores’ co-defendant had acted alone in committing the murder. It is also undisputed that Mr. Flores and his attorney were told that Mr. Flores’ attorney could not be present during the examination as it would disrupt the polygraph process.
In fact, additional inculpatory questions were asked of Mr. Flores by the police polygraph operator. After the polygraph examination, Mr. Flores was told he was lying, and the police conducted what they referred to as a “post-polygraph interview” in the absence of counsel, during which Mr. Flores allegedly made certain oral admissions.
*635Prior to the giving of the polygraph, Mr. Flores was given a “modified” advice of rights form. Lieutenant Diego, the polygraph examiner, testified that the form stated that the results of the polygraph may be used, and that meant that the results might be used by the Attorney General’s office in deciding to proceed with the case or not. No other advice of constitutional rights was given.
The alleged statements must be suppressed for two reasons. First, the warnings were not in compliance with those mandated by Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602 (1966). And in the absence of Miranda warnings, statements made at or after polygraph examination are not admissible against a defendant. People v. Algien, 501 P.2d 468 (Colo. 1972); Sparks v. State, 229 N.E.2d 642 (Ind. 1967); Commonwealth v. Bennett, 264 A.2d 706 (Pa. 1970); State v. Faller, 227 N.W.2d 433 (S.D. 1975).
Second, under the facts of this case, it cannot be said that there was “an intentional abandonment of a known right or privilege” (Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 1023) in Mr. Flores not having his attorney present. Mr. Flores was told that his attorney could not be present while he cooperated and took a polygraph limited to nine (9) questions necessary to effect a deal with the prosecution. The police then expanded this into additional polygraph questions and a post-polygraph interrogation, all without the presence of his attorney. The Territory made no showing of an express waiver of counsel and, under these circumstances, none can be implied from the limited waiver given to answer nine (9) specific questions in the absence of counsel. The Territory has fallen far short of showing an intentional abandonment of the right to counsel. (See Brewer v. Williams, 430 U.S. 387, 97 S.Ct. 1232 (1977).)
For the foregoing reasons, defendant’s motion request*636ing suppression of all statements made on June 1 and 2, 1978, and September 13 is granted.
IT IS SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487902/ | ABBATE, Presiding Judge
DECISION AND ORDER
On January 17, 1976, South Acres Development Company (hereinafter referred to as plaintiff) originally filed the complaint against Chase Manhattan Bank (hereinafter referred to as defendant) in the District Court of Guam based upon diversity jurisdiction. The defendant attacked the diversity of the District Court of Guam, and on January 9, 1978, the U.S. Supreme Court ruled that the Dis*637trict Court of Guam did not have diversity jurisdiction. Chase Manhattan Bank v. South Acres Development Company, 434 U.S. 236, 54 L.Ed.2d 501, 98 S.Ct. 544 (1978). Thereafter, on June 6, 1978, the plaintiff’s action was dismissed by the District Court of Guam. On January 4, 1979, the plaintiff initiated this action in the Superior Court of Guam.
Defendant moved this Court to dismiss the plaintiff’s action on the grounds that the action is barred by § 339 of the Civil Procedure Code of Guam, a two-year statute of limitation. Plaintiff asserts the equitable tolling doctrine as an exception to this defense. Defendant does not contest the applicability of the doctrine to Guam, but submits that plaintiff is precluded from asserting the doctrine because of its complete failure to proceed in a diligent manner.
In Addison v. California, 21 Cal.3d 314, 578 P.2d 141, 146 Cal. Rptr. 224 (1978), the Court stated:
As demonstrated by Bollinger & Elkino, application of the doctrine of equitable tolling requires timely notice, and lack of prejudice to the defendant, and reasonable and good faith conduct on the part of the plaintiff (emphasis added). 21 Cal.3d at 319.
On May 24, 1979, defendant moved to take the deposition of Jack A. Rosenzweig and Daniel R. Del Priore, attorneys for plaintiff in this case. During their respective oral examination, certain questions propounded to each, respectively, were objected to on the grounds of work product rule. On July 26, 1979, defendant moved to compel discovery of these questions.
Under Civil Procedure Rule 26(b) (3) and the doctrine enunciated in Hickman v. Taylor, 329 U.S. 495, 511-512, 67 S.Ct. 385, 91 L.Ed 451 (1947), an attorney’s work product is discoverable upon a showing of substantial need by the moving party and an inability to obtain its equivalent by other means, Bird v. Penn Central Co., 61 F.R.D. *63843, 47 (1973). Furthermore, Rule 26(b) (3) does not create an absolute immunity from discovery for opinion work product, barring disclosure of such material under any circumstances. Hangards, Inc. v. Johnson & Johnson, 413 F.Supp. 926, 931 (1976).
Plaintiff’s assertion of the equitable tolling doctrine raises the issues of good faith and diligence in re-filing this suit. Since this doctrine is an exception to the statutes of limitations, it is incumbent upon plaintiff to show good faith and diligence. Defendant can demonstrate the contrary only through discovery of information in the hands of the plaintiff’s attorneys. Therefore, such information being directly at issue, and the need for production is compelling, the discovery sought by defendant should be permitted as modified and to the extent it does not involve the violation of attorney-client privilege.
It is the decision of this Court that certain questions, propounded at the oral examination of Jack A. Rosenzweig and Daniel Del Priore, respectively, as modified, be answered in writing, Keogh v. Pearson, 35 F.R.D. 20 (D.C.D.C. 1964).
Questions propounded to Jack A. Rosenzweig
1. Page 4, lines 1 to 4. What did you do about the claim which is pending in this particular action and also was then pending in the District Court? How did you proceed to prosecute that claim after learning about the decision of the Supreme Court, if anything?
2. Page 9, lines 12 to 14. Why, if there is any reason, did you not re-file this claim in the Superior Court right after learning about the U.S. Supreme Court decision?
3. Page 9, lines 18 to 20. Why after learning of the District Court’s dismissal on June 26, 1979, did you not im*639mediately or just as quickly as you could re-file the claim in the Superior Court of Guam?
4.Page 10, lines 11 to 15. So apparently, of course, you did not file right after the Supreme Court decision nor did you file right after the District Court decision. And your decision not to re-file right away was a professional decision that you made sufficient to yourself; is that right?
5.Page 11, lines 7 to 12. Isn’t it true, Mr. Rosenzweig, that at least one major reason that this action was not re-filed right after the Supreme Court decision and, furthermore, not re-filed right after the District Court dismissal was that your office at least was to a certain extent understaffed and unable to get around to this case until Mr. Del Priore joined your firm?
6. Page 12, lines 5 to 8. What other things, if any, were done besides wait this one year and file in January of 1979, and to keep an eye on this legislation, what other things other than those things were done to proceed with the prosecution of this action?
7. Page 12, lines 20 to 23. Is it your contention that waiting for the period between the timeyou learned about the Supreme Court decision until the time you actually filed in January 1979 that plaintiff proceeded at all times in a diligent manner?
Questions propounded to Mr. Del Priore
1. Page 4, lines 10 to 12. Were you told anything about how soon the case should be re-filed or whether there’s any emergency or whether there’s any hurry in re-filing it?
2. Page 7, lines 8 to 9. Have you ever discussed the filing of this case as late as it has been with Mr. Rosenzweig?
3. Page 10, lines 5 to 9. And on behalf of the plaintiff, you say that you are standing on the equitable tolling doc*640trine which has to do, at least in one aspect, with proceeding at all times diligently and, on the other hand, refusing to answer that question; is that right?
Based on the foregoing authorities, IT IS ORDERED THAT:
1. The Defendant’s motion to compel discovery is granted, as modified.
2. The Plaintiff’s motion in opposition is denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487903/ | WEEKS, Judge
DECISION
This case comes before the Court on defendant Estate of Ana B. Aguon’s motion for summary judgment filed August 30, 1978, and argued September 29, 1978.
*571Plaintiff Turtle Cove, Incorporated, subleased from Integrated Development Corporation (IDC), a parcel of property for purposes of development as a tourist attraction. Defendant Estate of Aguon had leased the property to IDC. After execution of the sublease, a suit was filed in District Court seeking to void the deed conveying the instant property from Josefina A. Roberto to the lessor, Estate of Aguon. That litigation, District Court Civil Case No. 154-72, resulted in judgment in favor of Aguon.
During the duration of Case No. 154-72 lis pendens was filed against the leased property. Plaintiff alleges that this resulted in the cessation of development and sizeable monetary damages. They further allege that the Aguon’s failure to notify Turtle Cove of the Roberto claim coupled with the filing of 154-72 constituted a breach of the covenant of quiet enjoyment contained in paragraph 4 of the prime lease.
As a separate cause of action they allege that defendant Aguon is liable for typhoon damage to the property on the theory that Aguon impliedly covenanted to require IDC to obtain insurance on the premises. Paragraph 11 of the prime lease required the tenant to carry full insurance coverage on the premises.
The covenant of quiet enjoyment insures that the tenant shall hold the premises free from eviction by a person holding paramount title or by the lessor or those claiming title under him. Carty v. Blauth, 169 Cal. 713, 147 P. 949 (1915); Lost Key Mines, Inc. v. Hamilton, 109 Cal.App.2d 569, 241 P.2d 273 (1952). That covenant generally affords no protection against interferences with the covenantee’s possession made by wrongdoing third persons, or by holders of inferior titles, whom the covenantee could defeat. 6 Powell on Real Property, Paragraph 608. When the eviction is due to the acts of trespassers or persons with *572inferior title the remedy is against the person by whom the acts are committed, not the grantor, Platner v. Vincent, 187 Cal. 443, 202 P. 655 (1921).
In the instant action, the claim of the Robertos was adjudged to be without merit. The title of Aguon was, in fact, good title as covenanted. Plaintiff apparently relies on an alleged failure by Aguon to inform Turtle Cove of a possible title dispute as a breach. Such a failure, prior to execution of the lease, does not constitute a breach of the covenant of quiet enjoyment. Plaintiff has failed to bring to this Court’s attention any case finding a breach of the covenant of quiet enjoyment by virtue of the filing of an unsuccessful quiet title action. Perhaps for this reason they rely on an alleged omission prior to the execution of the lease as breach of the covenant. Again, no authority for such a proposition has been presented.
Since defendant has not answered in this action, the Court will assume the allegation of the complaint to be true for purposes of this motion. Therefore, there are no factual issues remaining. There has been no breach of the covenant of quiet enjoyment and defendant is entitled to summary judgment as to the first cause of action.
Plaintiff’s second cause of action alleges that defendant Estate of Aguon breached an implied covenant to require IDC to insure the premises. It is black letter law that a sublessee can have no greater rights against the lessor under the lease than the original lessee had. Handleman v. Pickerill, 84 Cal.App. 214, 257 P. 890 (1927); see generally 30 Cal.Jur.2d, Landlord and Tenant, Section 245; 49 Am.Jur.2d, Landlord and Tenant, Section 508. IDC could not have sued defendant Estate of Aguon for IDC’s own failure to insure. Therefore, Turtle Cove, IDC’s sub-lessee, cannot sue the estate for that same failure.
*573For the foregoing reasons defendant Estate of Aguon’s motion for summary judgment as to the first and second causes of action is granted.
SUBMIT ORDER. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487904/ | WEEKS, Judge
DECISION AND ORDER PERMITTING DEPOSITION BY OTHER THAN STENOGRAPHIC MEANS
This matter having come before the Court for hearing on the 30th day of July, 1980, Plaintiff appearing by and through their attorney Robert Bryant, Defendant Petrogas appearing by and through its attorney John Moore; this being the time set for hearing on Plaintiffs' motion to take the deposition of Haywood Ray Starling, Jr. by means of video recording in addition to the usual stenographic means of recording;
Defendant objects to paragraphs 2, 3, 5 and 8 of plaintiff's proposed order permitting the taping. Those paragraphs, by implication, let the deposing party man the video taping machine and control the conditions of taping.
Plaintiffs' attorney describes the proposed operator as an employee of the law firm - only recently trained in the techniques of the video machine by himself - he being apparently the usual operator of the videotape machine.
To insure the accuracy, the trustworthiness of the recorded testimony, the Court is given discretion to require, despite the additional cost, the use of an independent operator (Colonial Times Inc. v. Gasch, 509 F.2d 517).
*4Given the limited experience and apparent nontechnical background of the proposed operator, the Court feels that, in the instant case, the use of an independent operator is imperative. It may well be, as plaintiffs assert, that the actual pressing of a button may be all that is necessary; but the setting up and the arrangements are within a technician's field of expertise.
With an experienced technician controlling the tapes, the need for additional tapes to assure an intact original is negligible and the Court will not require the back up tape as requested.
The Court having heard argument of counsel and having considered plaintiffs' motion together with memoranda of both parties and the Court otherwise being fully advised;
IT IS ORDERED that plaintiffs be permitted to video tape the deposition of Haywood Ray Starling at the law offices of Klemm, Dear & Lawrence, Suite 1008, PDN Bldg., Agana, Guam at 3:00 p.m. on the 1st day of August, 1980.
IT IS FURTHER ORDERED that said video tape recording be conducted as follows:
An independent operator will record the proceedings; he will take an oath to record the proceedings accurately and shall certify the correctness and completeness of the recording.
Matters of staging and photographic techniques shall be determined by the independent operator. If suggestions regarding such matters by the parties are not heeded, the parties may place their objections on the record.
The video tape shall run continuously throughout the deposition from beginning to end;
That a log index be made by the independent operator making the video tape recording, such index to include the subject matter being discussed, cross reference to the digital reading on the digital counter, a list of exhibits, and the names of all persons and parties present at the deposition;
A zoom lens will not be allowed and the cameraman must simply line up the camera straight ahead on the deponent without any angle shots so as to give a full frontal view of deponents seated behind a table;
Only the parties, their counsel, and persons necessary to conduct the deposition shall be permitted to attend;
The party conducting the video tape deposition shall bear the expense;
The original shall be filed with the Clerk of the Court who shall release it for viewing only upon order of the *5Court. Each party may receive a copy made immediately following the time of taping.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487905/ | RAKER, Judge
DECISION
This case came before the court for trial. Pursuant to Government Code §6500.15, trial was before the court, without jury.
During the course of the trial, testimony of plaintiff's witnesses disclosed that at the time of the incident alleged in plaintiff's complaint, plaintiff was driving a car belonging to the Guam Power Authority, that his car was assigned to plaintiff for this work, and at the time of the incident, plaintiff was driving the car to its assigned parking space, pursuant to standing instructions of his employer, the Guam Power Authority, at the time of the incident upon which the complaint is based, plaintiff was within the scope of his employment. Plaintiff did not willfully cause his own injury.
1 During the course of the trial, the plaintiff's proof having established that plaintiff was within the scope of his employment at the time of the incident, the court itself raised the issue of whether or not this action was barred under the Workmen's compensation Law, Government Code Sections 37000 et. seq. This was proper and appropriate, for, although such a defense is normally barred by Rules of Civil Procedure 8(c) if not pleaded, the defendant may, nonetheless, take advantage of the plaintiff's proof, and, if necessary, the court will raise the issue itself. See, 2A Moore's Federal Practice Paragraph 8.27 [3] and Wright, and Miller, Federal Practice and Procedure: Civil §1278. The Court asked for argument on this point and the issue was briefed. Clearly, plaintiff is covered by the Workmen's Compensation Law.
This leaves, however, the question of whether or not the Government of Guam is a third party in relation to the plaintiff. If the Government of Guam is actually the plaintiff's employer, Government Code §37005 bars this action. If plaintiff is not an employee of the Government of Guam, then §37005 is no bar to this action. This much is clear, plaintiff is clearly an employee *8of the Guam Power Authority. Therefore, the court must determine the relationship between the Guam Power Authority and the Government of Guam in order to determine the legal relationship between plaintiff and the Government of Guam. That is to say, if the Guam Power Authority is an agent of the Government of Guam, then plaintiff is an agent of the Government of Guam, the plaintiff is an agent of the Government of Guam, since a sub-agent, recruited by an agent with his principal's authority, is also an agent of the principal. Waggaman v. General Finance Co., 116 F.2d 254 (3rd Cir. 1940). The Guam Power Authority has specific authority to hire employees, Government Code §21503(9) and 21512. (Certainly the statutes do not contemplate that the Board of Directors of the Authority will personally provide electric power.) It would thus appear that employees of the Guam Power Authority are employees of the Government of Guam, at least for some purposes. Pursuant to Government Code §21509, the Authority is exempt from taxation. Employees of the Authority are members of the Government of Guam Retirement Fund pursuant to Government Code §21512(b). This is all consistent with Authority employees being employees of the Government of Guam.
However, Government Code §21502 is, at first blush, ambiguous. It reads as follows:
§21502. Establishment. There is within, and a public corporation and autonomous instrumentality of, the Government of Guam a Guam Power Authority.
2In determining whether or not agency relationship exists, control, or the right to control is considered. See, Restatement, Agency 2d, p. 485, sec. 220. If the Guam Power Authority is "autonomous" as set forth in §21502, how can an agency relationship exist between it and the Government of Guam? Yet, the same §21502 sets forth that the Guam Power Authority is an "instrumentality" of the Government of Guam. This is an apparent contradiction.
It is unthinkable that the Legislature would have intended the Authority to be other than an instrumentality of the Government of Guam. Further language in §21502 speaks of the Authority's being "within the government". With all the Authority's special privileges, which include exemption from taxation, government retirement benefits, etc., the Guam Power Authority Act of 1968 would clearly be void as violative of 48 U.S.C. §1471 if the Authority were not within the Government of Guam. Where the court is faced with two interpretations, one of which would hold the statute wholly void and the other of which would uphold the statute, it is clear that the legislative intent must be the latter interpretations.
*9Since the Guam Power Authority is definitely within and an instrumentality of the Government of Guam how is this to be squared with §21502's provision for "autonomy"? It is clear that this autonomy is relative. Some cases would hold that such an agency is an executive agency over which the chief executive retains certain powers of direction. See Myers v. United States, 273 U.S. 52, 47 S.Ct. 21 (1926) and Morgan v. Tennessee Valley Authority, 115 F.2d 990 (6th Cir. 1940). However, it is unnecessary for the court to consider the question, as numerous examples of control by the Government of Guam, as a whole, exist, and these establish sufficient control by the Government of Guam over the Guam Power Authority to be consistent with an agency relationship, notwithstanding the word "autonomous" in §21502. For example, the Civil Service Commission approves and the Governor promulgates the Guam Power Authority's personnel regulations under Government Code §4004. The Governor nominates and appoints, with the advice and consent of the Legislature, the Guam Power Authority's Board of Directors pursuant to Government Code §21504(a). The Legislature has exercised control over the Guam Power Authority by enacting the Guam Power Authority Revenue Bond Act of 1968 (Government Code Sections 21550-21591). The Legislature has power to enact further legislation affecting the Authority. The Authority's rate structure is subject to detailed regulations by the Public Utilities Commission pursuant to Government Code Sections 21000 et. seq. In brief, it is not necessary for the court to decide, and the court therefore does not decide, how much control the Executive Branch exercises over the Authority and how much control the Legislative Branch exercises. It is sufficient, and the court holds that the Executive and Legislative Branches exercise sufficient control, and have a right to sufficient control, to show an agency relationship between the Government of Guam and the Authority consistent with the words "instrumentality" and "within .... the government" and notwithstanding the word "autonomous", all contained in §21502. The court need not and does not apportion that authority between the Legislative and Executive Branches. For all the above reasons, this court holds that plaintiff is an agent and employee of the Government of Guam and that this claim is, therefore, barred by operation of Government Code §37005.
Further, Government Code §21512(c), which was passed as part of the Guam Power Authority Act of 1968, as originally passed, specifically states that the manager, secretary, treasurer, comptroller and attorney of the Authority are not within the classified service of the Government of Guam. Where it appears clearly from the tenor of the statute that employees of the Authority are employees of the Government, and the Legislature specifically exempts certain people from the operation of the statue, it is strong evidence that the *10Legislature intended that all other employees be within the classified service or, at the very least, simply employees of the Government of Guam. Otherwise, Government Code §21512(c) would serve no purpose.
3It should be further noted that while Authority employees are covered by Workmen's Compensation, the benefits are actually paid from the Government of Guam's Workmen's Compensation Fund, Government Code §21512(b). Although the Fund may recoup these payments from the Authority on an annual basis pursuant to this Section, the liability for Workmen's Compensation payments is upon the Government of Guam. This being the case, the Government of Guam cannot, as a matter of law, be a third party with respect to plaintiff. See, Brown v. Arrington Construction Co., 74 Idaho 338, 262 P.2d 789, dicta (1953). The case cited by plaintiff in this regard are unpersuasive. Thus, the bare fact that compensation to plaintiff under the Worlonen's Compensation Law would come from the Government of Guam's Workmen's Compensation Fund is sufficient to bar plaintiff's claim under Government Code §37005.
Although Government Code §6500.10 speaks of suing the Government of Guam as the exclusive remedy, this is a law of general applicability. This Section does not, therefore, override the specific provisions of Government Code 37005 that make the Workmen's Compensation Law the exclusive remedy against the Government of Guam in some cases. See, 1A Sutherland, Statutory Construction Section 23.16. See also. Government Code §6500.12.
Judgment shall be for defendant. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487962/ | RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 22a0249p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
┐
R. K., a minor, by and through her mother and next
│
friend, J. K.; W. S., a minor, by and through her parent
│
and next friend, M. S.; S. B., a minor, by and through
│
his parents and next friends, M. B. AND L. H.; M. S., a
│
minor, by and through her parent and next friend,
│
K. P.; T. W., a minor, by and through her parent and
│
next friend, M. W.; M. K., a minor, by and through her > No. 22-5004
parent and next friend, S. K.; E. W., a minor, by and │
through his parent and next friend, J. W.; J. M., a │
minor, by and through her parent and next friend, │
K. M., and on behalf of those similarly situated, │
Plaintiffs-Appellees, │
│
│
v. │
│
BILL LEE, in his official capacity as Governor of │
Tennessee; PENNY SCHWINN, in her official capacity │
as Commissioner of the Tennessee Department of │
Education, │
Defendants-Appellants. │
┘
Appeal from the United States District Court for the Middle District of Tennessee at Nashville.
No. 3:21-cv-00853—Waverly D. Crenshaw, Jr., Chief District Judge.
Argued: July 25, 2022
Decided and Filed: November 18, 2022
Before: NORRIS, SUHRHEINRICH, and CLAY, Circuit Judges.
_________________
COUNSEL
ARGUED: James R. Newsom, III, OFFICE OF THE TENNESSEE ATTORNEY GENERAL
AND REPORTER, Memphis, Tennessee, for Appellants. Justin S. Gilbert, GILBERT LAW,
PLC, Chattanooga, Tennessee, for Appellees. ON BRIEF: James R. Newsom, III, Matthew
Dowty, Reed N. Smith, Robert W. Wilson, OFFICE OF THE TENNESSEE ATTORNEY
No. 22-5004 R. K., et al. v. Lee, et al. Page 2
GENERAL AND REPORTER, Memphis, Tennessee, for Appellants. Justin S. Gilbert,
GILBERT LAW, PLC, Chattanooga, Tennessee, Bryce W. Ashby, Brice M. Timmons, Craig A.
Edgington, DONATI LAW, PLLC, Memphis, Tennessee, Jessica F. Salonus, THE SALONUS
FIRM, PLC, Jackson, Tennessee, for Appellees.
NORRIS, J., delivered the opinion of the court in which SUHRHEINRICH, J., joined.
CLAY, J. (pp. 9–14), delivered a separate opinion concurring in the judgment only.
_________________
OPINION
_________________
ALAN E. NORRIS, Circuit Judge. In 2021, the Tennessee General Assembly enacted a
new statute (“the Act”) in response to the COVID-19 pandemic. Tenn. Code Ann. § 14-1-101 et
seq. Among other things, the Act addresses vaccination, masking, and quarantine decisions. For
example, “[a] local health entity or official, mayor, governmental entity, or school does not have
the authority to quarantine a person or private business for purposes of COVID-19,” Tenn. Code
Ann. § 14-4-101(b), and “a school or a governing body of a school shall not require a person to
wear a face mask while on school property” unless various conditions are met. Tenn. Code.
Ann. § 14-2-104(a).
Immediately after passage of the Act, and prior to seeking accommodation under its
terms, eight minor students with disabilities (a point that is uncontested) filed suit through their
parents, alleging that the new legislation violated the Americans with Disabilities Act (“ADA”),
42 U.S.C. § 12101; Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794; the Equal
Protection Clause of the Fourteenth Amendment; and the Supremacy Clause, Article VI, clause
2. Plaintiffs sought a preliminary injunction, which the district court granted with respect to the
two sections of the Act cited above. Specifically, the district court enjoined defendants, Bill Lee,
the Governor of Tennessee, and Penny Schwinn, the Commissioner of the Tennessee Department
of Education, from enforcing “Tennessee Code Annotated § 14-2-104 ‘Face coverings for
schools’; and [] Tennessee Code Annotated § 14-4-101(b) to the extent that it prohibits local
health officials and schools from making quarantining decisions as they relate to public schools.”
R.K. by and through J.K. v. Lee, 575 F.Supp.3d 957 993 (M.D. Tenn. 2021). Defendants
appealed pursuant to 28 U.S.C. § 1292(a)(1).
No. 22-5004 R. K., et al. v. Lee, et al. Page 3
The district court concluded that the Act, despite the inclusion of language that provides
that “[a] school shall, to the extent practicable, provide a reasonable accommodation pursuant to
the Americans with Disabilities Act,” Tenn. Code Ann. § 14-2-104(d)(1), fails to comply with
the requirements of either the ADA or the Rehabilitation Act.
I.
Article III limits federal courts’ jurisdiction to actual cases or controversies. Spokeo, Inc.
v. Robins, 578 U.S. 330, 337 (2016). The doctrine of standing “limits the category of litigants
empowered to maintain a lawsuit in federal court to [those who] seek redress for a legal wrong.”
Id. at 338. The “irreducible constitutional minimum of standing” requires (1) an injury in fact
that is (2) fairly traceable to the defendant’s conduct and (3) likely redressable by a favorable
judicial decision. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992). Moreover, “a party
who fails to show a substantial likelihood of standing is not entitled to a preliminary injunction.”
Memphis A. Randolph Inst. v. Hargett, 978 F.3d 378, 386 (6th Cir. 2020) (quotation marks
omitted).
1. Injury in Fact
“[U]nder Article III, an injury in law is not an injury in fact. Only those plaintiffs who
have been concretely harmed by a defendant’s statutory violation may sue . . . over that violation
in federal court.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2205 (2021). Similarly, just
because Congress has created an express statutory right of action does not mean a plaintiff is
injured whenever a defendant violates the underlying statutory duty. See id.; see also Spokeo,
578 U.S. at 341 (“Article III standing requires a concrete injury even in the context of a statutory
violation.”).
The Act specifically provides that school officials “shall . . . to the extent practicable,
provide a reasonable accommodation” to any student who requests it. Tenn. Code Ann. § 14-2-
104(d)(2). It then contemplates one such accommodation: “the school shall place the [student] in
an in-person educational setting in which other persons who may place or otherwise locate
themselves within six feet (6’) of the person receiving reasonable accommodation for longer than
fifteen (15) minutes are wearing a face covering provided by the school . . . .” Id. The plaintiffs
No. 22-5004 R. K., et al. v. Lee, et al. Page 4
provide little explanation as to why this accommodation would concretely injure them, other than
to quote the district court’s findings of fact at length. But even those findings, which describe
the undisputed fact that the plaintiffs represent a putative class of students more susceptible to
COVID-19 complications, fail to explain why the six-foot bubble accommodation would be
insufficient.
Equally significant is plaintiffs’ failure to test the practical effect of the Act by seeking an
accommodation; instead, they filed this suit on the heels of the Act’s passage. A concrete injury,
such as falling ill from COVID-19 due to a lack of universal masking, must be more than
speculative. “A threatened injury must be ‘certainly impending’ to constitute injury in fact.”
Whitmore v. Arkansas, 495 U.S. 149, 158 (1990) (quotation omitted). Indeed, no action to
enforce the Act would ever be directed at any of these plaintiffs—it would be directed only at
their schools, should they decide to violate the Act—which further attenuates the risk of harm the
plaintiffs may suffer. Moreover, the Act does not prohibit individual students from wearing
masks at any time; it merely redefines how universal mask mandates can be imposed.
Finally, plaintiffs’ argument that they are injured by the Act because it categorically
violates the ADA amounts to an overly generalized grievance. The Supreme Court “has
repeatedly held that an asserted right to have the Government act in accordance with law is not
sufficient, standing alone, to confer jurisdiction on a federal court.” Allen v. Wright, 468 U.S.
737, 754 (1984), abrogated in part on other grounds by Lexmark Int’l., Inc. v. Static Control
Components, Inc., 572 U.S. 118, 129–30 (2014).
2. Traceability
Whatever injury the plaintiffs may suffer is not fairly traceable to the two defendants
here: Governor Lee and Commissioner of Education Schwinn. In cases where the plaintiff’s
injury “depends on the unfettered choices made by independent actors not before the court[],”
the plaintiff has the heightened burden “to adduce facts showing that those choices have been or
will be made in such manner as to produce causation and permit redressability of injury.” Lujan,
504 U.S. at 562 (citations omitted).
No. 22-5004 R. K., et al. v. Lee, et al. Page 5
Governor Lee’s obligation to ensure that the state’s laws are faithfully executed does not,
by itself, mean that any injury caused by the Act is fairly traceable to him. See Universal Life
Church Monastery Storehouse v. Nabors, 35 F.4th 1021, 1031 (6th Cir. 2022) (“[T]he
Governor’s ‘take care’ power does not suffice to invoke federal jurisdiction. We need specific,
plausible allegations about what the Governor has done, is doing, or might do to injure
plaintiffs.”).
Nor does the Governor’s role in declaring states of emergency change that. The Act
requires that severe conditions exist for universal masking to be imposed. Tenn. Code Ann.
§ 14-2-104(a)(2). Severe conditions, in turn, require surging cases and a declaration by the
Governor of “a state of emergency for COVID-19.” Tenn. Code Ann. § 14-1-101(20)(A). The
plaintiffs point to no legal duty of the Governor, however, to ever make such a declaration.
Rather, making such a declaration is vested in his discretion as the state’s chief executive. See
Tenn. Code Ann. § 58-2-107(b)(2) (providing a state of emergency “may be declared by the
governor if the governor finds an emergency has occurred or occurrence of threat thereof is
imminent”) (emphases added).
The case against the Commissioner of Education is arguably a closer one, but it still falls
short. Commissioner Schwinn has specific authority to “withhold future distributions of school
funds” from schools that violate the Act. Tenn. Code Ann. § 14-2-104(e). But, like Governor
Lee, she has no duty to do that—the Act says only that she “may withhold” the funds, so
withholding funds is committed to her discretion. Nor does the Act suggest that schools
violating the statute are automatically disentitled from receiving state funds in the future—the
funding hold requires action from the Commissioner. Tenn. Code Ann. § 14-2-104(e).
Moreover, as noted above, any enforcement action (should it occur) will never be directed at the
plaintiffs—it will be directed only at their schools. See id. And the plaintiffs do not connect the
dots between Commissioner Schwinn’s withholding of school funding (if that occurs) and any
injury the plaintiffs would thereby suffer. So, even if Commissioner Schwinn enforced the Act,
it is speculative whether that action would concretely injure the plaintiffs.
To put it another way, the Act does not place Commissioner Schwinn in a position
adverse to these plaintiffs, which means that any injury they suffer is not fairly traceable to her
No. 22-5004 R. K., et al. v. Lee, et al. Page 6
(potential) enforcement actions. Cf. Muskrat v. United States, 219 U.S. 346, 361 (1911)
(“[J]udicial power . . . is the right to determine actual controversies arising between adverse
litigants.”) (emphasis added). The Act places these two defendants in positions adverse only to
the schools (or their boards or administrators), if at all. But no school is a party to this case, and
the plaintiffs nowhere suggest any intention to make that happen.
All of the foregoing, which has focused on the Act’s masking and ADA accommodation
provisions, applies with equal force to the Act’s quarantining provision, which vests the “sole
authority to determine quarantine guidelines for” any “private business or school” in the state’s
commissioner of health; it also provides that “[a] local health entity or official, . . . or school does
not have the authority to quarantine a person or private business for purposes of COVID-19.”
Tenn. Code Ann. § 14-4-101(a)(2), (b). Assuming arguendo that the ADA requires that school
officials or local health officials have the authority to make quarantining decisions, any breach of
that ADA-duty is not traceable to either defendant here. It is traceable, if at all, to the
commissioner of health, who could avoid the (assumed) ADA violation by delegating her
quarantining authority to schools or local health officials. But she is not a defendant here. For
that reason, the district court’s preliminary injunction as to the quarantining provision—which
necessarily can apply only to the named defendants, not the health commissioner—cannot
redress any injury caused by the Act’s quarantine provision.
The plaintiffs argue that traceability exists because the Act severely limits universal
masking and quarantining of COVID-positive students, thereby preventing schools from offering
students reasonable accommodations. However, plaintiffs nowhere explain why universal
masking and quarantining constitute the only reasonable accommodations under the ADA.
There is reason to think that a more tailored accommodation—perhaps even the six-foot bubble
accommodation contemplated by the Act—would be sufficient to comply with the ADA. See
E.T. v. Paxton, 19 F.4th 760, 768 (5th Cir. 2021) (“[T]here are any number of other ways schools
could accommodate plaintiffs’ disabilities without traversing either [an executive order banning
mask mandates] or federal law.”).
No. 22-5004 R. K., et al. v. Lee, et al. Page 7
3. Redressability
To satisfy the redressability element of standing, the plaintiff must show that it is “likely,
as opposed to merely speculative, that the injury will be redressed by a favorable decision.”
Lujan, 504 U.S. at 561 (quotation omitted). Redressability can be a low bar to clear, at least
where a plaintiff seeks redress for “a completed violation of a legal right”—in which case,
nominal damages alone provide sufficient redress. Uzuegbunam v. Preczewski, 141 S. Ct. 792,
802 (2021). “Remedies, however, ordinarily operate with respect to specific parties.” California
v. Texas, 141 S. Ct. 2104, 2115 (2021) (quotation omitted). “In the absence of any specific
party, they do not simply operate on legal rules in the abstract.” Id. (quotation omitted). Rather,
prospective relief can redress a future injury only if “the court [may] enjoin[] not the execution
the statute, but the acts of the official, the statute notwithstanding.” Id. (quoting Massachusetts
v. Mellon, 262 U.S. 447, 488 (1923)).
Here, the plaintiffs do not seek redress for a completed violation of a legal right; they
seek only prospective relief to protect against future violations. Because the plaintiffs’ injuries
are not fairly traceable to any defendant here, no remedy applicable to those defendants (be it an
injunction or a declaration) would redress the plaintiffs’ alleged injuries. See Allen, 468 U.S. at
757 (noting that “the federal judiciary may not redress” an injury unless it is “fairly traceable to
the Government conduct respondents challenge as unlawful”).
In sum, we conclude that plaintiffs have failed to bear their burden of establishing
standing. In reaching this decision, we note that two of our sister circuits have recently voided
injunctions against similar laws for lack of standing. See Disability Rights S.C. v. McMaster,
24 F.4th 893 (4th Cir. 2022); E.T. v. Paxton, 19 F.4th 760 (5th Cir. 2021). While these decisions
do not control our own, in this instance we find them instructive inasmuch as they found the
same jurisdictional flaw as we did under similar, though not identical, circumstances.
II.
After oral argument was held in this matter, plaintiffs filed a Motion for Suggestion of
Mootness of Appeal based upon the evolving COVID-19 situation in Tennessee. Specifically,
they note that none of the school districts in Tennessee is currently operating under a mask
No. 22-5004 R. K., et al. v. Lee, et al. Page 8
mandate and positive COVID-19 cases have dropped dramatically in recent weeks. As a result,
“Plaintiffs cannot point to evidence that they currently face [a spike in community infection
rates], or, given the trending data, that they reasonably anticipate facing them.” Motion for
Suggestion of Mootness at 6. For that reason, they suggest that the appeal of the district court’s
preliminary injunction order be dismissed as moot.
While this appeal may well be moot, the complaint itself has failed to set out an actual
case or controversy and thus lawsuit itself is subject to dismissal for lack of jurisdiction. To
dismiss this appeal on mootness grounds would mean that a jurisdictionally flawed case remains
in the district court. That approach serves no one’s best interest, including the plaintiffs’ who
would presumably wish to challenge the Act if, and when, circumstances changed and they could
point to actual, rather than speculative, harm. In our view, it is far better to dismiss the case in its
entirety for lack of jurisdiction. This is a course of action that we have taken when faced when
both standing and mootness deficiencies are present. See Ass’n of Am. Physicians & Surgeons v.
FDA, 13 F.4th 531, 536 (6th Cir. 2021) (citing Sinochem Int’l Co. v. Malaysia Shipping Corp.,
549 U.S. 422, 431 (2007)) (observing that this court has “discretion to choose between non-
merits grounds for dismissing a suit”).
III.
The district court’s injunction is vacated and the cause is remanded with instructions to
dismiss the action for lack of jurisdiction.
No. 22-5004 R. K., et al. v. Lee, et al. Page 9
_________________
CONCURRENCE
_________________
CLAY, Circuit Judge, concurring in the judgment only. After argument was heard in this
case, Plaintiffs filed a motion for suggestion of mootness, noting that, in light of changed public
health conditions and advancements in treatment options, none of the Plaintiffs required
universal masking to access schools. Defendants opposed this motion, arguing that this Court
should instead dismiss the case on standing grounds. Although I agree with the majority that this
case should be dismissed for lack of jurisdiction, I believe it should be dismissed for mootness,
and not for lack of standing.
Both standing and mootness are jurisdictional doctrines derived from the Constitution’s
grant of power to the federal courts to resolve only live “cases” and “controversies.” U.S. Const.
art. III, § 2. To satisfy the case or controversy requirement, a plaintiff must suffer an
actual injury that can be remedied by a favorable judicial decision. Iron Arrow Honor Society v.
Heckler, 464 U.S. 67 (1983). Although these doctrines are related, they have different
requirements. Sullivan v. Benningfield, 920 F.3d 401, 407 (6th Cir. 2019). Whether the parties
have standing is determined at the time the complaint in a lawsuit is filed, whereas the mootness
doctrine requires a live dispute at the time the federal court decides the case. Id. The test to
determine whether a claim is moot is “whether the relief sought would, if granted, make a
difference to the legal interests of the parties.” Saleh v. Barr, 801 F. App’x 384, 394 (6th Cir.
2020) (quoting Bowman v. Corr. Corp. of Am., 350 F.3d 537, 550 (6th Cir. 2003)). Federal
courts have discretion to address jurisdictional issues in any order and can choose to address the
“‘eas[y]’ rather than the more ‘difficult’ jurisdictional issue.” In re: 2016 Primary Election,
836 F.3d 584, 587 (6th Cir. 2016) (internal quotation marks omitted). In this case, the mootness
issue is the easier one to resolve.
Plaintiffs concede that they no longer require universal masking to safely access their
schools. Their claims are moot because this Court’s order would not affect their legal interests
and a decision in this case would have no practical effect. Moreover, the case as a whole is moot
No. 22-5004 R. K., et al. v. Lee, et al. Page 10
since Plaintiffs acknowledge that they do not “reasonably anticipate” facing the same risks they
did when the suit was filed. See Resurrection Sch. v. Hertel, 35 F.4th 524, 530 (6th Cir. 2022)
(noting that the case as a whole is moot when there is not a fair prospect of the recurrence of
challenged conduct); Ohio v. United States Env’t Prot. Agency, 969 F.3d 306, 310 (6th Cir.
2020) (noting that to avoid finding of mootness, challenged “conduct must be ‘reasonably’ likely
to recur, mean[ing] that there must be a fair prospect that the conduct will recur in the
foreseeable future”).
The majority argues that dismissing the case on mootness grounds would leave a
jurisdictionally flawed case in the district court.1 This is not so. If a case is moot, the judgment
below “must be vacated and the case remanded with instructions to dismiss.” Memphis A. Philip
Randolph Inst. v. Hargett, 2 F.4th 548, 558 (6th Cir. 2021) (quoting McPherson v. Mich. High
Sch. Athletic Ass’n, Inc., 119 F.3d 453, 458 (6th Cir. 1997) (en banc)).
Dismissing the case on mootness grounds is the better resolution of this case since
Plaintiffs have presented evidence indicating that they continue to have standing to pursue their
claims and because a resolution of this case on those grounds would better comport with this
Court’s prior decision in this case. Earlier this year, a different panel of this Court denied
Defendants’ motion to stay the district court’s injunction, determining that Plaintiffs showed a
substantial likelihood of standing. See R.K. v. Lee, No. 22-5004, ECF No. 23 (6th Cir. May 10,
2022).
To establish standing, a plaintiff must show that they have: (1) suffered an injury or a
threatened injury; (2) that the injury is fairly traceable to the defendants; and (3) that a ruling in
favor of the plaintiff will redress that injury. See CHKRS, LLC v. City of Dublin, 984 F.3d 483,
488 (6th Cir. 2021) (quoting Buchholz v. Meyer Njus Tanick, PA, 946 F.3d 855, 860 (6th Cir.
2020)); Coyne v. Am. Tobacco Co., 183 F.3d 488, 494 (6th Cir. 1999) (citing Valley Forge
1
There is a distinction between mootness as to a preliminary injunction appeal and mootness as to the case
as a whole. See Resurrection Sch. v. Hertel, 35 F.4th 524, 528 (6th Cir. 2022) (noting that plaintiffs’ appeal of
decision denying their motion for preliminary injunction was moot once the state rescinded challenged mask
mandate). In some instances, an appeal of a preliminary injunction will be moot but the case can proceed on the
merits. That distinction does not apply in this case since Plaintiffs argue that the unique risk previously posed to
them by the COVID-19 variants no longer exists. Because any decision given by this Court will have no “practical
effect” on the Plaintiffs’ rights, the case as a whole is moot.
No. 22-5004 R. K., et al. v. Lee, et al. Page 11
Christian Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S. 464, 472
(1982)). “When assessing standing, courts look only to ‘the facts existing when the complaint is
filed.’” Barber v. Charter Twp. of Springfield, Mich., 31 F.4th 382, 390 (6th Cir. 2022) (quoting
Lujan v. Defs. of Wildlife, 504 U.S. 555, 569 n.4 (1992)).
Plaintiffs met these requirements. In their complaint, Plaintiffs alleged a concrete and
particularized injury: the Tennessee statute infringes on their rights by preventing them from
seeking and securing individualized, reasonable accommodations in light of the COVID-19
pandemic, including, but not limited to, masking. See Clapper v. Amnesty Int’l USA, 568 U.S.
398, 409 (2013). As Plaintiffs put it, they need not “await falling ill or dying because ‘[s]tanding
can derive from imminent, rather than actual injury . . . .’” (Appellees’ Br. 30 (quoting R.K. v.
Lee I, 568 F. Supp. 3d 895, 899 (M.D. Tenn. 2021) (quoting Davis v. FEC, 554 U.S. 724, 734
(2008)).) The Supreme Court has made that much clear; indeed, “a person exposed to a risk of
future harm may pursue forward-looking, injunctive relief to prevent the harm from occurring, at
least so long as the risk of harm is sufficiently imminent and substantial.” TransUnion LLC v.
Ramirez, 141 S. Ct. 2190, 2210 (2021) (emphasis added).
The record is replete with evidence showing the imminent and substantial nature of the
risk in this case. The statutory provisions at issue remove school districts’ “ability to determine
what is reasonable for its schools and students, and what is an appropriate accommodation under
the ADA, given the local COVID-19 rates and its impact on a particular community.” (Mem.
Op., R. 45, Page ID # 1133.) The text of the statute makes clear that if it were to go into effect,
there is only a single, one-size-fits-all accommodation available to disabled children: the
requirement that other individuals within six feet of the students wear masks, and only if those
individuals are within six feet of the accommodated student for more than fifteen minutes. See
Tenn. Code Ann. § 14-2-104(d)(2). The lead opinion in this case notes that the district court’s
findings fail to explain why this accommodation is insufficient, ignoring the district court’s
express findings of fact that masking is effective for preventing the spread of COVID-19, and
that “[f]or students with disabilities, six feet may be too short, and even ten minutes may be too
long.” (Mem. Op., R. 45, Page ID #1113, 1124 (citing testimony of expert witnesses)).
No. 22-5004 R. K., et al. v. Lee, et al. Page 12
The lead opinion also argues that the risk of harm to Plaintiffs from enforcement of the
statute is too attenuated because the statute focuses on circumscribing schools’ ability to mandate
masking, and not any individuals’ ability to wear a mask themselves. The fact that the statute is
directed at schools’ ability to impose mask mandates says nothing about the increased risk of
exposure if Plaintiffs are not able to request an accommodation tailored to the specific risk they
face. And the fact that Plaintiffs’ injury is indirect is not fatal to their claim. See Parsons v. U.S.
Dep’t of Just., 801 F.3d 701, 713 (6th Cir. 2015) (noting that “the fact that an injury is indirect
does not destroy standing as a matter of course”). Requesting universal masking as a reasonable
accommodation would not be an option at all under this scheme, and the only mechanism by
which schools could mandate masks would require: (1) the Governor’s declaration of a COVID-
19 state of emergency; and (2) high local case counts. Tenn. Code Ann. §§ 14-1-101 (20), 14-2-
104(a)(2). Once in effect, the statute would immediately strip disabled schoolchildren and their
parents of their rights to engage with their schools and districts to determine reasonable
accommodations, exposing them to COVID-19 and serious illness if they decide to remain in
school.
Second, Plaintiffs’ alleged injury is also clearly traceable to Defendants. The causation
requirement in standing “is not focused on whether the defendant ‘caused’ the plaintiff’s injury
in the liability sense,” but whether the alleged injury “fairly can be traced to the challenged
action of the defendant” and not a third party. Wuliger v. Manufacturers Life Ins. Co., 567 F.3d
787, 796 (6th Cir. 2009) (determining that causation element of standing was met in the
plaintiff’s suit for rescission where the plaintiff alleged that insurance company issued and
collected premiums on insurance policy that was fraudulently procured, even though insurance
company played no role in fraudulent procurement). In this case, Defendants do have a role in
enforcing the statute barring schools from issuing universal mask mandates.2 The Governor has
2
Plaintiffs also argued that another part of the statute denies schools the authority to require infected
individuals to quarantine. See Tenn. Code Ann. § 14-4-101. Defendants dispute this characterization of the statute
and argue that pursuant to the statute, schools are permitted to quarantine individuals who test positive for COVID-
19. The statute gives the Commissioner of Health authority to determine quarantine guidelines. Tenn. Code Ann.
§ 14-4-101(a)–(b). The district court enjoined this section of the statute “to the extent that it prohibits local health
officials and schools from making quarantining decisions as they relate to public schools.” R.K. by and through J.K.
v. Lee, 575 F. Supp. 3d 957, 993 (M.D. Tenn. 2021). On appeal, Defendants note that the Tennessee Commissioner
of Health promulgated Emergency Rule No. 1200-14-04.09(4) (“emergency rule”), which clarifies that schools and
No. 22-5004 R. K., et al. v. Lee, et al. Page 13
the sole authority to declare a state of emergency before any local school-wide masking
requirement can be put into effect. See Tenn. Code Ann. §§ 14-4-101(20), 14-2-104(a)(2).
Similarly, the Commissioner of Education may withhold state funds from local schools that
violate the statute’s mask mandate proscription. See Tenn. Code Ann. §§ 14-4-101(a)–(b), 14-2-
104(e).
The lead opinion cites this Court’s decision in Universal Life Church Monastery
Storehouse v. Nabors, 35 F.4th 1021, 1031 (6th Cir. 2022) for the proposition that a governor’s
obligation to ensure that laws are faithfully executed does not confer standing on plaintiffs
seeking to challenge a statute. In that case, however, the plaintiffs did not allege that the
governor had any role to play in their injury or in the challenged statute prohibiting online-
ordained ministers from solemnizing marriage rites. By contrast, in this case, the Governor
serves as one of the gatekeepers of the accommodation that Plaintiffs seek.
Third and finally, Plaintiffs have shown that a ruling in their favor would redress their
injury. Defendants contend that the “authority to deny or grant masking to Plaintiffs as an
accommodation . . . resides in nonparties––i.e., local schools and their principals . . . .” and this
precludes a finding of redressability “[b]ecause such third-party conduct is the deciding factor.”
(Appellant’s Br. at 27–28 (citing Lujan, 504 U.S. at 569).) This argument is misleading. To be
sure, under the statute, local schools have the authority to grant the single, one-size-fits-all
“reasonable accommodation” that was carved out by the state legislature: a six-foot bubble that
requires other students to wear masks if they are within the bubble for more than fifteen minutes.
See Tenn. Code Ann. § 14-2-104(d)(2). But the narrow and prescribed nature of § 14-2-
104(d)(2) sets out the statute’s discriminatory enforcement problem, rather than a pathway out of
litigation on justiciability grounds. Plaintiffs are denied the opportunity to collaborate with their
schools to seek out accommodations that are different from the one set forth in the statute and
face the choice of risking their health or being deprived of an in-person education. Indeed,
local health officials may make quarantining decisions “as they relate to schools.” (Appellants’ Br. at 8–9).
Accordingly, since the district court’s injunction only applies if the statute prevents schools from making
quarantining decisions, and Defendants concede that it does not, the appeal of the district court’s order granting the
injunction is moot. This is because any decision issued by this Court with respect to that provision would make no
“difference to the legal interests of the parties.” Saleh v. Barr, 801 F. App’x 384, 394 (6th Cir. 2020) (quoting
Bowman v. Corr. Corp. of Am., 350 F.3d 537, 550 (6th Cir. 2003)).
No. 22-5004 R. K., et al. v. Lee, et al. Page 14
because the Governor’s state of emergency declaration is a necessary condition for the
accommodation that Plaintiffs seek, a “favorable court decision is likely to remedy the alleged
violation” in this case since enjoining the statute would permit the Plaintiffs to seek
accommodations that differ from the narrow accommodation specified in the statute. Coyne,
183 F.3d at 496; see also Tenn. Code Ann. §§ 14-2-104(a)(2), 14-1-101(20)(A), (B).
The district court did not err when it granted the motion for preliminary injunction, since
the Plaintiffs had standing to bring their claims. Nonetheless, due to changed circumstances, the
case as a whole has become moot. Accordingly, the injunction must be dissolved and the case
dismissed. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494174/ | MEMORANDUM DECISION AND ORDER DENYING DEFENDANT POGO PRODUCTION COMPANY’S MOTION TO DISMISS AND REQUEST FOR ABSTENTION
BURTON R. LIFLAND, Bankruptcy Judge.
The defendant, Pogo Production Company (“Pogo”), seeks the entry of an order dismissing the Complaints filed by Rosetta Resources Operating and Calpine Corporation (“Calpine” or the “Debtor”) pursuant to Fed. R. BankR. P. 7007 and 7012, and in the alternative, requests that the Court abstain in the Adversary Proceeding.
In support of the motion to dismiss, Pogo contends that the Adversary Proceeding does not fall within the “related to” jurisdiction of the Court under 28 U.S.C. § 1334(b) and that there is no “conceivable effect” on the Calpine estate. Pogo asserts that even if “related to” jurisdiction is found by the Court, the facts of this case as plead by the Plaintiff do not justify the relief sought by the Plaintiff, and that the adversary proceeding must be dismissed.
BACKGROUND
On August 20, 2004, Calpine and Calpine Natural Gas LP (“Calpine NG”) (collectively “Seller”) entered into a purchase and sale agreement (the “Pogo PSA”) with Pogo (“Buyer”). Pursuant to the Pogo PSA, Seller conveyed to Pogo certain oil and gas properties located in San Juan County, New Mexico for which Pogo paid Seller approximately $83 million. The *668Pogo PSA provided a mechanism for addressing defects in title including a resolution of any disputes under the agreement by binding arbitration. Pogo provided notice to Seller by the required date, claiming a defect in title to the conveyed properties.
By agreement dated July 5, 2005 (the “Rosetta PSA”), Calpine entered into a series of transactions whereby it conveyed its remaining oil and gas properties to entities formed by, or sold to, Rosetta Resources, Inc., an entity formed by the officers of Calpine Corporation who had managed its oil and gas operations. The Rosetta PSA provided for the indemnification of the Rosetta Resources, Inc. and its subsidiaries by Calpine for certain liabilities or potential liabilities, including asserted claim of Pogo for the title indemnity payment. As a result of the Rosetta sale, Calpine NG was sold to Rosetta Resources, Inc. and became Rosetta Resources Operating LP (“Rosetta”). Rosetta is not a bankrupt entity, but filed the Adversary Proceeding in the Debtors’ cases.
In the period following the delivery of notice of the Buyer’s disputes, the parties engaged in negotiations, and agreed to submit the matter to mediation in December 2005. Mediation efforts were abandoned prior to Calpine commencing its Chapter 11 case. In April 2006, Pogo commenced arbitration proceedings against Rosetta as provided under the Pogo PSA, seeking a title indemnity payment (exclusive of accruing interest, arbitration costs and attorney’s fees) of $2,284,546.00. Pogo also filed a proof of claim against the Debtors for the title indemnity payment in the amount of $2,448,371.32, including interest accrued.
Rosetta filed a series of claims against Calpine and a number of Calpine-related debtors in the amount of $27,878,175.36, including an unliquidated claim for indemnity under the Rosetta PSA for Pogo’s title indemnity claim. Rosetta stated, on the record at the hearing held December 20, 2006, that they hold up to $80 million owed to Calpine, against which they intend to assert setoff rights to any amounts Calpine owes to Rosetta.
MOTION TO DISMISS
Rule 12(b)(6) of the Federal Rules of Civil Procedure, (the “Rules”), applicable to this proceeding by Rule 7012(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), enables a defendant to move to dismiss a complaint on the ground that it fails to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6); Fed. R. Banxr. P. 7012(b). “In reviewing a motion to dismiss, a court merely assesses the legal feasibility of the complaint, and does not weigh the evidence that may be offered at trial.” In re Churchill Mortg. Inv. Corp., 256 B.R. 664 (Bankr.S.D.N.Y.2000). A motion to dismiss must be denied unless it “appears beyond doubt that the plaintiff can prove no set of facts in support of its claim which would entitle it to relief.” Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). All well-pled factual allegations must be read by the court as true and construed in a light most favorable to the plaintiff. Id.
The Complaints filed by Rosetta and Calpine seek an order declaring that the automatic stay extends to the arbitration pursuant to Sections 362(a)(1), 362(a)(3) and 105 of the Bankruptcy Code. Both the Debtors and Rosetta contend that if Rosetta is found liable in the arbitration, the Debtors must indemnify Rosetta for any judgment amount. According to the Complaints filed, if Rosetta is found liable in the arbitration, they will in turn, assert setoff rights against Debtors using the $80 million they are currently *669holding, essentially resulting in an allowed secured claim against the Debtors. On the other hand, Pogo filed a proof of claim against the Debtors, which, if Pogo liquidated its claim against the Debtor, would likely be classified as an unsecured claim.
Debtors and Rosetta also point out that any adjudication of Rosetta’s liability under the Pogo PSA may effectively be an adjudication of issues regarding the Debtors’ liability without giving Calpine an opportunity to adequately defend itself. This Court has previously examined in these cases whether the automatic stay should be extended to a third party pursuant to section 105. In Hawaii Structural Ironworkers Pension Trust Fund v. Calpine Corporation Inc., the District Court affirmed this Court’s order extending the automatic stay because if the litigation involving third parties were to continue, the Debtor, regardless of not being named as an actual party, would be prudent to devote resources to assisting in the defense because of “potential impact upon a claim or suit against the debtor.” Hawaii Structural Ironworkers Pension Trust Fund v. Calpine Corporation Inc., 2006 WL 3755175 (S.D.N.Y. December 20, 2006). Likewise, these Debtors would likely be required to, and it would be sensible to devote resources to following the arbitration.
Pogo fails to establish that the Debtors can prove no set of facts in support of their claim that the Debtors estates may be harmed by the continuation of the Adversary Proceeding. Therefore, Pogo’s motion to dismiss is denied.
ABSTENTION
The Defendants contend that this Court should refrain from exercising jurisdiction over the Adversary Proceeding. Section 1334(c)(1) provides,
Nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11.
28 U.S.C. § 1334(c)(1).
In determining whether to exercise permissive abstention under section 1334(c), courts have considered one or more (not necessarily all) of twelve factors: (1) the effect or lack thereof on the efficient administration of the estate if a Court recommends abstention, (2) the extent to which state law issues predominate over bankruptcy issues, (3) the difficulty or unsettled nature of the applicable state law, (4) the presence of a related proceeding commenced in state court or other non-bankruptcy court, (5) the jurisdictional basis, if any, other than 28 U.S.C. § 1334, (6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case, (7) the substance rather than form of an asserted “core” proceeding, (8) the feasibility of severing state law claims from core bankruptcy matters to allow judgments to be entered in state court with enforcement left to the bankruptcy court, (9) the burden of [the court’s] docket, (10) the likelihood that the commencement of the proceeding in a bankruptcy court involves forum shopping by one of the parties, (11) the existence of a right to a jury trial, and (12) the presence in the proceeding of non-debtor parties. In re Cody, Inc., 281 B.R. 182, 190-91 (S.D.N.Y.2002); In re Balco Equities Ltd., Inc., 323 B.R. 85, 92 -93 (Bkrtcy.S.D.NY.2005).
The United State Supreme Court has found that permissive abstention is most appropriate when a case is dominated by state law issues or raises unsettled issues of state law. See Thompson v. Magnolia Petroleum Co., 309 U.S. 478, 483, 60 S.Ct. 628, 84 L.Ed. 876 (1940). *670However, abstention is appropriate only in certain narrowly-tailored, exceptional circumstances. Colorado River Water Conservation v. U.S., 424 U.S. 800, 817-818, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). Federal courts have a “virtually unflagging obligation” to exercise the jurisdiction given them. Id. See also In re Joint Eastern and Southern District Asbestos Litigation, 78 F.3d 764, 775 (2d Cir.1996) (“Abstention is an extraordinary and narrow exception to a federal court’s duty to exercise its jurisdiction.”). The Supreme Court has noted that the general principle of abstention is to avoid duplicative litigation. Id. at 817-18, 96 S.Ct. 1236. Suits are duplicative of each other “if the parties, issues and relief do not differ between the two actions.” I.A Durbin, Inc. v. Jefferson Nat’l Bank, 793 F.2d 1541 (11th Cir.1986).
Duplicative litigation is not an issue in the instant case because the causes of action in the Complaints and in the arbitration are separate and distinct, with different relief requested in each. The issues in the arbitration relate to the initial dispute between the parties, while the Complaints filed relate to whether or not the automatic stay should apply to the arbitration. This Court is not being asked in this Adversary Proceeding to decide the issues of the arbitration. Additionally, as noted above, both Pogo and Rosetta filed proofs of claim in these cases against the Debtors relating to the same claims at issue in the arbitration. Accordingly, they both submitted to the jurisdiction of this Court and the Debtors’ liability can be determined by this Court. As Debtors noted, the efficient administration of the estate may be negatively impacted if the Debtors’ liability for prepetition indemnity obligations is adjudicated by a tribunal other than this Court with the possibility of having a substantial Pogo unsecured claim morph into a secured Rosetta one.
CONCLUSION
Pogo has not established that the Complaints filed by Rosetta and the Intervening Complaint filed by the Debtors, with all well-plead facts taken as true, are sufficient to withstand the motion to dismiss. Additionally, the Court declines to abstain from these proceedings, which may have an effect on the property of the estates.
The motion for dismissal or abstention is denied. IT IS SO ORDERED. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494175/ | OPINION REGARDING MOTIONS TO DISMISS, TO STAY, FOR RELIEF FROM THE STAY AND OTHER RELIEF
STUART M. BERNSTEIN, Chief Judge.
Plaintiffs Continental Casualty Company (“CCC”) and Continental Insurance Company (“CIC,” and together with CCC, the “Plaintiffs”) commenced this adversary proceeding against Pfizer, Inc. (“Pfizer”), Quigley Company, Inc. (“Quigley”) — the debtor in possession and Pfizer’s wholly owned subsidiary — and sixty-four other insurance companies that issued policies to Pfizer. In the main, the Plaintiffs seek a declaratory judgment that certain policies issued to Pfizer by CIC, or CIC’s predecessor-in-interest, London Guarantee & Accident Company of New York (“LG & A”), exclude coverage for asbestos-related claims. Alternatively, the Plaintiffs seek to reform the CIC Policies to exclude such coverage, or if coverage exists, to apportion liability among the Plaintiffs and the various defendant insurance companies.1 In a separate count, Count Four, the Plaintiffs seek a declaration that Pfizer and Quigley anticipatorily repudiated the CCC and CIC policies. Guildhall Insurance Company filed a cross-claim seeking the same declaratory relief that the Plaintiffs requested in Counts One (coverage) and Two (reformation).
Pfizer and Quigley moved to dismiss the entire Complaint (and Guildhall’s cross-claim) for lack of subject matter jurisdiction, and the anticipatory repudiation claim for the additional reason that it fails to state a claim. In addition, a group of defendant insurance companies (the “Certain Insurers”) moved to stay the adversary proceeding and lift the automatic stay to allow arbitration of the coverage issues raised in the Complaint. Finally, four of the Certain Insurers (collectively “Hartford”) moved for dismissal or abstention or a stay on the same ground.
For the reasons that follow, Counts One, Two and Three are stayed pending the completion of arbitration, and the Certain Insurers are granted relief from the automatic stay to commence arbitration. Hartford’s motion to dismiss or abstain is denied, but the motion for a stay is granted. Finally, Count Four is dismissed without prejudice to the right of any party in interest to raise the same issues as an objection to confirmation.
BACKGROUND
A. Introduction
Quigley was founded in 1916 as a refractory company, and engaged in the development manufacture and sale of refractory products for the iron, steel, power generation, petroleum, chemical and glass industries. (Fourth Amended Disclosure Statement with respect to Quigley Company, Inc. Third Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated October 17, 2005 (the “Disclosure Statement”), § IV.A.1 at 30.)2 Be*729ginning in the 1940’s and until the early 1970’s, Quigley made or sold a number of products containing asbestos. (Id. § IV.A.2 at 30.)
On August 25, 1968, Pfizer acquired Quigley’s stock. (Id. § IV.A.1 at 30) In 1992, Quigley sold substantially all of its assets to a third-party, and retained the liabilities stemming from products sold pri- or to the sale of its business. (Id. § IV.A.3 at 30.) Since then, Quigley’s principal business has been the management of personal injury claims brought against it by persons allegedly exposed to asbestos-containing products formerly made, used or sold by Quigley. (Id. § IV.A.4 (a) at 31.)
In the course of its business, Pfizer purchased comprehensive general liability insurance policies to cover the cost of defending and resolving personal injury claims for itself and its subsidiaries. Pfizer’s policies covered Quigley after Pfizer acquired Quigley’s stock. (Id. § IV.A.5 (a) at 31-32.) CCC issued four policies to Pfizer between 1964 and 1975 (the “CCC Policies”), which were the subject of a settlement agreement, effective March 15, 1999 (the “1999 Settlement”), among Pfizer, Quigley and CCC. (¶ 80.)3 The CCC Policies’ limits have been paid or are being paid pursuant to the terms of the 1999 Settlement. (Id.) The Plaintiffs do not contend that there is a coverage dispute regarding the CCC Policies.
CIC and LG & A4 issued liability insurance policies to Pfizer during the period of October 1, 1982 to October 1, 1984 (the “CIC Policies”). These policies also cover Quigley. (¶ 1.) The CIC Policies “follow form” to certain policies issued by Transit Casualty Company to Pfizer for the same period (the “Transit Policies”), and “exclude coverage for ‘claims ... arising out of asbestosis or any similar condition caused by asbestos.’ ” (¶¶ 1, 78-79, 83.) Pfizer was aware of the exclusion when it purchased the CIC Policies, (¶ 86), but Pfizer and Quigley now contend that the CIC Policies cover asbestos-related claims. (¶ 87.)
In addition, the defendant insurance companies issued one or more liability insurance policies that, Pfizer claims, may provide coverage for asbestos-related claims. (¶ 84.) Like the CIC Policies, some of the defendants’ policies exclude coverage for asbestos claims by their terms, or “follow form” to the Transit Policies and incorporate the asbestos exclusion. (See e.g. Memorandum in Support of Motion by Certain Insurers to Stay Adversary Proceeding, dated April 21, 2006, (“Certain Insurers’ Memorandum”) at 7, n. 11)(ECF Doc. # 114.)
B. The Reorganization Plan
Quigley filed a voluntary chapter 11 petition on September 3, 2004, to resolve its liability for asbestos-related personal injury claims, (Disclosure Statement § V.A at 46), and filed its proposed plan on October *7306, 2005. (See Plan at 132-200.) Under the Plan, Quigley’s asbestos-related liabilities, as well as Pfizer’s liabilities that are based on Quigley’s conduct or products, will be channeled to a trust fund (the “Asbestos PI Trust”). (Disclosure Statement § I.A at 16; Plan §§ 1.1 at 142 (defining “Asbestos PI Trust”); 9.3 at 170-72.) The channeled claims can only be pursued through, and paid from, the Asbestos PI Trust; they cannot be asserted against reorganized Quigley or Pfizer. (Disclosure Statement § I.A at 146.)
Pfizer and Quigley will transfer certain assets to fund the Asbestos PI Trust. Importantly, the “Quigley Contribution” will include Quigley’s rights to the proceeds under various insurance policies and settlement agreements (i.e., the “At-Issue Policies”).5 (See Plan § 9.3(d) at 152-153). The At-Issue Policies are identified in Exhibit C to the Plan, which lists the “Shared Asbestos Insurance Policies.” (See id. at 343-350.) According to § 1.1 of the Plan, these policies cover “all or certain Asbestos PI Claims.” (Id. at 155.) Quigley is contributing its rights under these policies to the Asbestos PI Trust. Pfizer will also relinquish its rights and interests in the At-Issue Policies.6
Two other Plan exhibits bear mention. Exhibit D, {see id. at 351-353), consists of the “Shared Asbestos-Excluded Insurance Policies,” and as the title suggests, these policies “provide coverage to Pfizer and Quigley for claims other than claims alleging exposure to asbestos and/or asbestos-containing products.” {Id. at 155.) Similarly, Exhibit E consists of the “Shared Asbestos-Excluded Claims-Made Insurance Policies,” {Id. at 354-56), and these policies also “provided coverage to Pfizer and Quigley for certain claims other than claims alleging exposure to asbestos and/or asbestos-containing products.” {Id. at 155.) Quigley is not contributing its rights under these policies to the Asbestos PI Trust. (See id. at 153 (defining “Quigley Transferred Insurance Rights”).) Similarly, Pfizer is not relinquishing its rights under these policies. {Id. at 448.)
The CCC and CIC Policies are listed in Exhibit C to the Plan. In addition, Exhibit C lists the policies of most of the remaining insurer defendants. Accordingly, Quigley’s rights under these policies will form part of the Pfizer and Quigley contributions to the Asbestos PI Trust. (Plan Ex. C at 343-350; see Complaint ¶¶ 84, 87.)
The Plan has not been confirmed, and no confirmation hearing has been scheduled.
*731C. The Wellington Agreement
The arbitration issues raised by the parties implicate the Wellington Agreement,7 entered into on June 19, 1985, by Pfizer, Quigley, CIC (but not CCC) and scores of other insurers and asbestos defendants. The Wellington Agreement was designed to address the widespread litigation of asbestos-related claims, insurance coverage disputes, and the application of differing rules of law and court decisions existing throughout the United States during the period leading up to its execution. (See Wellington Agreement § I, ¶ 2.) It provided, inter alia, a method “for the administration, payment and disposition of asbestos-related claims,” among the subscribing insurers and producers. (Id.)
Two provisions of the Wellington Agreement bear directly on the arbitration issues. The signatories agreed that they “shall resolve through [ADR under Appendix C] any disputed issues within the scope of the Agreement and the Appendices hereto.” (Wellington Agreement § VIII, ¶ 6.) Appendix B set out the defenses and exclusions reserved by the subscribing insurers, and stated that “disputes concerning such matters shall be resolved pursuant to” the ADR procedures. One such retained defense was that “coverage under an insurance policy is not available due to express exclusions for claims involving ... particular products or particular diseases.” (Id., App. B, ¶ 8.) At first blush, it appears that the Plaintiffs are required to arbitrate the coverage dispute with Pfizer, Quigley and the other insurers who signed the Wellington Agreement (collectively, the “Wellington Signatories”).
CIC contends, however, that the agreement to arbitrate did not extend to the policies at issue in this lawsuit because the CIC Policies (as well as the At-Issue Policies issued by the other Wellington Signatories) are not listed in Appendix D.8 (See Affidavit of Gretchen A. Ramos in Support of Continental’s Opposition to: (1) Hartford’s Motion to Dismiss or, in the Alternative, Abstain or Stay the Adversary Proceeding; and (2) Motion by Certain Insures to Stay the Adversary Proceeding, sworn to May 19, 2006, at Ex. B.) (ECF. Doc. # 186, Part 3.) The Wellington Agreement directed the parties to schedule “[a]ll policies of insurance affording general liability, products liability or premises coverage.” (Wellington Agreement, App. D.) The initial “coverage block” consisted “of all insurance policies issued to such Subscribing Producer by its Subscribing Insurers to become effective prior to the date (within the period January 1,1973 through December 31, 1979) selected by the Producer and set forth in its Schedules of Insurance.” (Wellington Agreement § IX, ¶ 1.) The parties could add later policies that became effective prior to June 19, 1985.(M) According to the certification at the end Appendix D, “[t]he foregoing comprises the Schedules of all relevant policies of insurance known to the Subscribing Producer and to any of its Subscribing Insurers as of this of this date,” and any insurance policies that subsequently become relevant should be added. (Wellington Agreement App. D.)
*732The Plaintiffs maintain that the Wellington Agreement arbitration clause only applied to scheduled policies.
D. The Complaint
The Complaint consists of four counts; the first three concern the coverage issue. Count One seeks a declaratory judgment that the CIC Policies do not cover asbestos-related claims. (¶ 106.) Count Two alleges that if the exclusions incorporated by reference in the CIC Policies do not extend to asbestos-related claims, the failure is the product of a mutual mistake by Pfizer, CIC and LG & A, or the unilateral mistake of CIC and LG & A. (¶ 95.) Accordingly, the CIC Policies should be reformed to exclude “any claim alleging exposure to asbestos, the contracting of asbestos-related disease or injury, or any liability resulting therefrom.” (¶ 106.) Count Three asserts that if the CIC Policies cover asbestos-related claims, the coverage liability for the applicable policy periods should be apportioned among the Plaintiffs and the various defendant insurance companies. (Id.)
Count Four challenges the Plan’s proposed assignment of rights in the CIC and CCC Policies to the Asbestos PI Trust. (See ¶ 88.) Through the Plan, Pfizer and Quigley have indicated their intention to transfer the CIC and CCC Policies in breach of the policies’ anti-assignment clauses and otherwise improperly affect the Plaintiffs’ rights under the policies without their consent. (See ¶¶ 89, 100.) The Plaintiffs seek (1) a declaration that Pfizer and Quigley have repudiated the CIC and CCC Policies and are estopped from enforcing the terms of the policies, (2) a declaration that the Plaintiffs have no further obligation under the policies, and (3) an award of money damages. (¶ 106.)
As noted, the Complaint named 64 insurers, but only 40 defendant insurers remain. The remaining insurers, including CIC and CCC (and hence, 42 parties), break down into three categories. Group 1 includes those eight insurers who issued policies listed in Exhibit C to the Plan (i.e., At-Issue Policies), and also signed the Wellington Agreement:
Group 1 Insurers
1 Continental Insurance Company
2 Employers Insurance Company Of Wausau
3 New England Insurance Company
4 Twin City Fire Insurance Company
5 International Insurance Company
6 Royal Indemnity Company
7 Travelers Casualty & Surety Company
8 Westchester Fire Insurance Company
Group 2 includes 25 insurers that issued At-Issue Policies that appear on Exhibit C, but did not sign the Wellington Agreement:
Group 2 Insurers
1 Affiliated FM Insurance Company
2 Caisse Industrielle D’assurances Mutuelle
3 Korean Reinsurance Company
4 Lilloise D’assurances
5 Mutuelle Unies
6 La Preservatriee Fonciere Tiard
7 Le Secours
8 Union Des Assurances de Paris
9 Assurances Generales de France Iart
10 Allianz Global Risks U.S. Insurance Company
11 Allianz Underwriters Insurance Company
12 Allstate Insurance Company
13 Atlanta International Insurance Company
14 Continental Casualty Company 9
15 Florists’ Mutual Insurance Company
*73316 Government Employees Insurance Company
17 Motor Vehicle Casualty Company
18 Guildhall Insurance Company Ltd.
19 National Casualty Company
20 Old Republic Insurance Company
21 Westport Insurance Company
22 One Beacon America Insurance Company
23 TIG Insurance Company
24 Colonia Versicherung A.G.
25 Haftpflichtverband Der Deutschen Industrie V.A.G.
The final Group, Group 3, consists of those nine insurers who did not issue policies included on Exhibit C:10
Group 3 Insurers
1 American Centennial Insurance Company
2 British Northwestern Insurance Company Ltd.
3 Dairyland Insurance Company
4 Excess Insurance Company Ltd.
5 Federal Insurance Company
6 First State Insurance Company
7 Hartford Accident & Indemnity Company
8 Insurance Company of North America
9 Seaton Insurance Company
E. The Motions
1. The Motion to Dismiss
a. Coverage Issues
Quigley and Pfizer filed a motion to dismiss the Complaint and the Guildhall Cross-Claim on the basis that the claims are not ripe. (Consolidated Motion of Quigley Company, Inc. and Pfizer Inc. to Dismiss Plaintiffs’ Original Complaint and Defendant Guildhall Insurance Company’s Cross-Claim against all Co-Defendants, dated Apr. 21, 2006 (“Quigley Motion to Dismiss”) (ECF Doc. # 113).) With respect to the first three counts, Quigley and Pfizer contend that no present coverage dispute exists because they never demanded any coverage or payment from CIC or LG & A for any asbestos claim under the CIC Policies. (Id. at ¶ 23.) Moreover, if the Plan is confirmed, both Pfizer and Quigley will give up the right to seek coverage for asbestos claims under the CIC Policies, and transfer those rights to the Asbestos PI Trust. The Asbestos PI Trust will determine whether to seek coverage for asbestos-related claims. In addition, the Plan preserves all of the Plaintiffs’ coverage defenses that are the subject of counts one to three. (Id. at ¶ 24.)
If the Court concludes that the coverage dispute presents a ripe controversy, Pfizer and Quigley next argue that the Court should decline, in the exercise of its discretion, to entertain the dispute. The Complaint raises complex insurance coverage issues among the more than 40 remaining parties, and the resolution is not necessary to Quigley’s bankruptcy case. In addition, the litigation would needlessly divert Quig-ley’s resources from its nearly completed reorganization efforts. (Id. at ¶ 32.)
The Plaintiffs disagree. They argue that Pfizer and Quigley demanded coverage at the inception of the bankruptcy case, but in any event, the Plan makes it clear that coverage will be demanded. Furthermore, the Court should exercise its jurisdiction. The issues raised in the Complaint are straightforward, and any delay will adversely affect their rights under the CIC Policies. In addition, a decision interpreting the asbestos exclusion will settle the disputed legal issues and provide the Plaintiffs with relief from this uncertainty. Finally, deciding the issues among the numerous parties raised by the Complaint in one forum will promote judicial efficiency.
*734b. Anticipatory Repudiation
Quigley and Pfizer also contend that the fourth cause of action, sounding in anticipatory repudiation, is not ripe. It requires the Court to prejudge a Plan term outside of the context of a confirmation hearing. Although the Plaintiffs maintain that the Pfizer and Quigley Contributions violate anti-assignment provisions in the policies, the Plan requires a finding that they do not. If the Court does not make that finding at the confirmation hearing, the Plan cannot be confirmed and no assignment will occur. On the other hand, if the Court makes the finding sought by Pfizer and Quigley, the transfers of insurance rights will not breach the anti-assignment provisions. If the actual assignment is not a breach, the threat of the assignment cannot be an anticipatory breach. Either way, the issue should be raised as an objection to confirmation and not as a cause of action in an adversary proceeding. Indeed, the Plaintiffs have already raised this very issue in an objection they filed to Quigley’s Plan. (See id. at ¶¶ 25, 29.)
Alternatively, Quigley and Pfizer seek to dismiss Count Four for failure to state a claim pursuant to Fed R. Crv. P. 12(b)(6). They contend that the proposed Plan cannot constitute a statement of Quigley’s intention not to perform, and furthermore, Pfizer is not even a proponent of the Plan. Moreover, the Quigley Insurance Transfer is merely a transfer of rights under the policies and not an assignment of the policies themselves. If the transfer is not a breach, then the stated intention to transfer is not an anticipatory breach. (See Id. at ¶¶ 35^13.) In addition, Pfizer and Quig-ley contend that various Bankruptcy Code provisions either expressly or impliedly render the anti-assignment clauses unenforceable. (See Id. at ¶¶ 44-50.)
Once again, the Plaintiffs disagree. They contend that the Plan’s proposed transfer goes beyond a mere transfer of the right to collect insurance proceeds, and significantly increases their risks. The Plan, in this regard, improperly affects the Plaintiffs’ defenses, fails to identify who will perform the insured’s obligations, and deprives the Plaintiffs of their contractual rights to participate in asbestos claims litigation.
2. The Arbitration Motions
The Certain Insurers11 are Wellington Signatories. They filed a motion to stay the adversary proceeding pending arbitration, (Motion by Certain Insurers to Stay Adversary Proceeding, dated April 21, 2006 (ECF Doc. # 114)), and a companion motion to lift the automatic stay to pursue arbitration. (Motion by Certain Insurers for Relief from the Automatic Stay, dated April 21, 2006 (ECF Doc. # 712, filed in Case no. 04-15739).) They contend that the coverage issues between the Wellington Signatories are subject to mandatory arbitration. In addition, they request a discretionary stay as against the defendant insurers who did not sign the Wellington Agreement. For similar reasons, Hartford, a subset of the Certain Insurers,12 requests dismissal or abstention or a stay with respect to all of Plaintiffs’ claims asserted against Hartford. (See Notice of *735Hartford’s Motion to Dismiss or, in the Alternative, Abstain or Stay the Adversary Proceeding, dated April 21, 2006.)(ECF Doc. # 109.)
The Plaintiffs opposed these motions. As discussed above, they argue that the CIC Policies are not subject to the Wellington Agreement and its ADR clause, because the CIC Policies are not listed on Appendix D to the Wellington Agreement. For the same reason, the At-Issue Policies issued by the Wellington Signatories are not subject to mandatory arbitration.
DISCUSSION
A. Coverage Issues
1. Introduction
Counts One, Two and Three of the Complaint seek relief under the Declaratory Judgment Act of 1934, 28 U.S.C. § 2201,13 concerning the extent of Quig-ley’s and Pfizer’s coverage for asbestos-related claims.14 The Declaratory Judgment Act “creates a means by which rights and obligations may be adjudicated in cases involving an actual controversy that has not reached the stage at which either party may seek a coercive remedy, or in which the party entitled to such a remedy fails to sue for it.” United States v. Doherty, 786 F.2d 491, 498 (2d Cir.1986) (Friendly, J.) (internal quotations omitted). The purpose of a declaratory judgment is “to afford a speedy and inexpensive method of adjudicating legal disputes without invoking the coercive remedies of the old procedure, and to settle legal rights and remove uncertainty and insecurity from legal relationships without awaiting a violation of the rights or a disturbance of the relationships.” Beacon Constr. Co. v. Matco Elec. Co., 521 F.2d 392, 397 (2d Cir.1975) (quoting Aetna Cas. & Surety Co. v. Quarles, 92 F.2d 321, 325 (4th Cir.1937).) A party seeking a declaratory judgment has the burden of proving that the Court has jurisdiction. E.R. Squibb & Sons, Inc. v. Lloyd’s & Cos., 241 F.3d 154, at 177 (2d Cir.2001)(citing Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 95, 113 S.Ct. 1967, 124 L.Ed.2d 1 (1993)).15
Even where subject matter jurisdiction exists, the Court may nevertheless decline to hear a declaratory judgment action in the exercise of its discretion. See *736Wilton v. Seven Falls Co., 515 U.S. 277, 282, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995); Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942); Broadview Chem. Corp. v. Loctite Corp., 417 F.2d 998, 1000 (2d Cir.1969); Muller v. Olin Mathieson Chem. Corp., 404 F.2d 501, 505 (2d Cir.1968). The Declaratory Judgment Act “is an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant.” Public Serv. Comm’n of Utah v. Wycoff Co., 344 U.S. 237, 241, 73 S.Ct. 236, 97 L.Ed. 291 (1952). “Specifically, the statute provides that in a case of an ‘actual controversy’ within its jurisdiction, ‘[a] federal court may declare the rights and other legal relations of any interested party seeking such declaration.’” Dow Jones & Co., Inc. v. Harrods, Ltd., 237 F.Supp.2d 394, 405 (S.D.N.Y.2002), aff'd, 346 F.3d 357 (2d Cir.2003) (quoting 28 U.S.C. 2201(a)) (emphasis in original). Thus, Pfizer’s and Quigley’s motion to dismiss the coverage claims involves a two-part analysis: (1) whether the Court has subject matter jurisdiction to hear the declaratory judgment claims, and if so, (2) whether the Court should exercise that jurisdiction.
2. Subject Matter Jurisdiction
Subject matter jurisdiction under the Declaratory Judgment Act is limited to an “actual controversy,” Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 272, 61 S.Ct. 510, 85 L.Ed. 826 (1941), and is coextensive with the “case or controversy” standard embodied in Article III of the Constitution.16 See Aetna Life Ins. of Hartford v. Haworth, 300 U.S. 227, 239—40, 57 S.Ct. 461, 81 L.Ed. 617 (1937)(“The word ‘actual’ is one of emphasis rather than of definition.”); accord Public Serv. Comm’n of Utah, 344 U.S. at 242, 73 S.Ct. 236; Dow Jones & Co., 237 F.Supp.2d at 405. An actual controversy “must be a real and substantial controversy admitting of specific relief through a decree of conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.” Aetna Life Ins. of Hartford, 300 U.S. at 241, 57 S.Ct. 461. Often, the difference between an abstract question and an actual controversy is “necessarily one of degree, and it would be difficult, if it would be possible, to fashion a precise test for determining in every case whether there is such a controversy.” Maryland Cas. Co., 312 U.S. at 273, 61 S.Ct. 510; Certain Underwriters at Lloyd’s, London v. St. Joe Minerals Corp., 90 F.3d 671, 675 (2d Cir.1996). “Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Maryland Cas. Co., 312 U.S. at 273, 61 S.Ct. 510; see In re Prudential Lines Inc., 158 F.3d 65, 70 (2d Cir.1998); Olin Corp. v. Consol. Aluminum Corp., 5 F.3d 10, 17 (2d Cir.1993).
Insurance coverage disputes provide a fertile ground where questions of “ripeness” frequently ripen. Coverage must often await contingencies, such as whether the insured will make a claim or whether the claim will reach the level of coverage of an excess policy. The existence of an “actual controversy” depends on the “practical likelihood” that the contingency will occur:
*737Like any other action brought in federal court, a declaratory judgment is available to resolve a real question of conflicting legal interests. That the liability may be contingent does not necessarily defeat jurisdiction of a declaratory judgment action. Rather, courts should focus on the practical likelihood that the contingencies will occur. Indeed, litigation over insurance coverage has become the paradigm for asserting jurisdiction despite future contingencies that will determine whether a controversy ever actually becomes real.
Associated Indem. Corp. v. Fairchild Indus., Inc., 961 F.2d 32, 35 (2d Cir.1992)(internal citations and quotations omitted); accord E.R. Squibb & Sons, 241 F.3d at 177.
Prior to the Plan, the evidence of Pfizer’s and Quigley’s intentions to demand coverage was equivocal. They did not schedule the CIC or the At-Issue Policies in Appendix D of the Wellington Agreement, implying their view that the policies did not cover asbestos claims. In addition, although Pfizer wrote to the Plaintiffs on September 3, 2004, the Petition Date, advising them that it intended to bill the Plaintiffs for any settlements in cases involving “exposure to asbestos, silica or mixed dust” “in accordance with the terms of the policies that provide coverage for such claims,” (see Opposition to Consolidated Motion of Quigley Company, Inc. and Pfizer Inc. to Dismiss Plaintiff’s Original Complaint and Defendant Guildhall Insurance Company’s Cross-Claim against all Co-Defendants, dated May 19, 2006 (“Plaintiffs’ Opposition”), at 1f26)(ECF Doc. # 187),17 Pfizer did not name the policies, or make a straightforward claim that they covered asbestos claims, as opposed to silica and mixed dust claims. Furthermore, the CNA Companies, which include the Plaintiffs, responded on November 21, 2004, that they understood “that Pfizer and Quigley are not currently requesting any of the CNA Service Mark Companies to provide a defense or pay any indemnity amounts.” (Ramos Affidavit, Ex. B, at 3.)
The Plan, however, clarified their intentions. It contemplates that Pfizer and Quigley will contribute their rights to insurance proceeds under the Plaintiffs’ policies to the Asbestos PI Trust. Moreover, the Plan definitions discussed above reflect Pfizer’s and Quigley’s view that the Plaintiffs’ policies cover asbestos-related claims.
Furthermore, the evidence indicates that Quigley’s liability for future asbestos claims will overwhelm its available policy limits. At the inception of the bankruptcy, 160,386 asbestos personal injury claims were pending against Quigley. (Disclosure Statement, § I.D.4 at 19-20.) The expert retained by the Future Demand Holders’ Representative estimated that an additional 612,412 claims would be asserted against Quigley. (Id.) In addition, the total value of the current and future claims that have been or will be asserted against Quigley will reach $6.64 billion, or $2.96 billion discounted to present value. (Id.)
At the same time, the universe of insurance purchased by Pfizer for the period of August 25, 1968 to October 1, 1985, which covers personal injury claims, consists of approximately $2.85 billion of primary and excess policy limits, much of which have been exhausted or released. (Id. § IV.A.5(b) at 32.) As of the Petition Date, Pfizer and Quigley held just $889.8 *738million in unbilled, solvent policy limits available to cover personal injury claims. (Id.) Given the high level of claims and the resulting shortfall, there is a “practical likelihood” that coverage will be sought for asbestos-related claims under the CIC Policies. See E.R. Squibb, 241 F.3d at 177-78. In fact, Quigley conceded at oral argument that the trustee of the Asbestos PI Trust would make the demand. (Tr. at 74.) Accordingly, an “actual controversy” exists regarding the coverage under the CIC Policies. For the same reason, an “actual controversy” exists with respect to the Guildhall policies that appear on Exhibit C to the Plan.
3. Discretion under the Declaratory Judgment Act
As noted, even where the court has subject matter jurisdiction, it enjoys substantial discretion not to exercise it. See Wilton, 515 U.S. at 286-88, 115 S.Ct. 2137; Public Service Comm’n of Utah, 344 U.S. at 241, 73 S.Ct. 236; Brillhart, 316 U.S. at 494-95, 62 S.Ct. 1173. In Wilton, the Supreme Court contrasted this discretion with the more limited discretion to decline jurisdiction in other settings:
Since its inception, the Declaratory Judgment Act has been understood to confer on federal courts unique and substantial discretion in deciding whether to declare the rights of litigants. On its face, the statute provides that a court may declare the rights and other legal relations of any interested party seeking such declaration. The statute’s textual commitment to discretion, and the breadth of leeway we have always understood it to suggest, distinguish the declaratory judgment context from other areas of the law in which concepts of discretion surface. We have repeatedly characterized the Declaratory Judgment Act as an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant.... Consistent with the nonobligatory nature of the remedy, a district court is authorized, in the sound exercise of its discretion, to stay or to dismiss an action seeking a declaratory judgment before trial or after all arguments have drawn to a close. In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration.
515 U.S. at 286-88, 115 S.Ct. 2137 (internal citations and quotations omitted).
The exercise of that court’s discretion is informed by two principles: (1) whether “the judgment will serve a useful purpose in clarifying and settling the legal relations in issue,” and (2) whether “it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.” Broadview Chem. Corp., 417 F.2d at 1000-01 (citing Edwin M. BORCHARD, DECLARATORY JUDGMENTS 299 (2d ed.1941)). Indeed, at least one Second Circuit case has stated that “[i]f either prong is met, the action must be entertained.” Cont’l Cas. Co. v. Coastal Savs. Bank, 977 F.2d 734, 737 (2d Cir.1992)(emphasis added). In Dow Jones & Co., the District Court expanded the Broadview criteria, and considered factors adopted by other circuit courts, including:
(1) whether the declaratory action would settle the controversy; (2) whether the declaratory action would serve a useful purpose in clarifying the legal relations in issue; (3) whether the declaratory remedy is being used merely for the purpose of procedural fencing or to provide an arena for a race for res judicata; (4) whether the use of a declaratory action would increase friction between our federal and state courts *739and improperly encroach upon state jurisdiction; and (5) whether there is an alternative remedy which is better or more effective.
237 F.Supp.2d at 432 (internal citations and quotations omitted).
Although these factors do not line up uniformly on one side or the other, they weigh in favor of exercising jurisdiction in this case. First, resolution of the coverage dispute will certainly “serve a useful purpose in clarifying the legal relations in issue,” and afford relief from uncertainty. Even if a formal demand has not been made, the coverage issue is simmering below the surface. Quigley’s and Pfizer’s protestations to the contrary notwithstanding, they view the CIC Policies as important assets that they are contributing to the Asbestos PI Trust under the Plan. (See Disclosure Statement § IV.A.5 at 31-38.) Moreover, the coverage dispute will take time to resolve. If the Plan is confirmed, the Asbestos PI Trust will be called upon to make distributions. The availability of the insurance is plainly important in determining the amount that can be distributed to claimants. Although this Court’s current exercise of its jurisdiction is essentially limited to the conclusion that an arbitrator must resolve the coverage dispute, at least as between the Wellington Signatories, the resolution of the arbitration issue will clarify this contentious point and move the dispute toward resolution.
Second, this action will not interfere with proceedings in any other court or provide the Plaintiffs with a procedural advantage. This concern often arises when the parties are already involved in or contemplate litigation for “coercive” relief, and one of the parties commences a preemptive declaratory judgment action to wrest control over the decision-making process from the plaintiffs forum of choice. See NUCOR Corp. v. Aceros Y Maquilas de Occidente, S.A., 28 F.3d 572, 577 (7th Cir.1994)(“A suit for a declaratory judgment aimed solely at wresting the choice of forum from the natural plaintiff will normally be dismissed and the case allowed to proceed in the usual way.”)(internal quotations omitted); CGI Solutions LLC v. Sailtime Licensing Group, LLC, No. 05 Civ. 4120(DAB), 2005 WL 3097533, at *7 (S.D.N.Y. Nov. 17, 2005) (dismissing preemptive declaratory judgment action in favor of Texas action for coercive relief filed by defendant); Great Am. Ins. Co. v. Houston Gen. Ins. Co., 735 F.Supp. 581, 585-86 (S.D.N.Y.1990) (dismissing declaratory judgment action on discretionary grounds where plaintiff commenced action in anticipation of litigation in another jurisdiction, intending to preempt the forum choice of defendant). Here, there are no other actual or contemplated proceedings designed to obtain coercive relief.
It is true that abstaining from exercising jurisdiction will not cause prejudice to any party. One of the primary purposes of the Declaratory Judgment Act is “to avoid accrual of avoidable damages to one not certain of his rights and to afford him an early adjudication without waiting until his adversary should see fit to begin suit, after damage had accrued.” Luckenbach S.S. Co. v. United States, 312 F.2d 545 at 548 (2d Cir.1963) (internal citation and quotation omitted); accord CGI Solutions, 2005 WL 3097533 at *7. Here, delay will not increase the Plaintiffs’ damages, their risk, or their liability under the CIC Policies. On balance, however, I conclude that the Court should exercise jurisdiction to decide the coverage disputes involving CIC, Quigley, Pfizer and Guildhall, subject, however, to the discussion of arbitration in the next section of this opinion.
*740B. Arbitration
Several of the defendant insurers have filed or joined in one of three motions. These include a the Motion by Certain Insurers to Stay Adversary Proceeding, dated April 21, 2006 (ECF Doc. # 114), the Motion by Certain Insurers for Relief from the Automatic Stay, dated April 21, 2006 (ECF Doc. # 712, filed in Case no. 04-15739), and Hartford’s Motion to Dismiss or, in the Alternative, Abstain or Stay the Adversary Proceeding, dated April 21, 2006 (ECF Doc. #110). The three motions share a common thread, to wit, that the resolution of the coverage dispute between Wellington Signatories is subject to mandatory arbitration under the Wellington Agreement.
1. The Application to Stay the Adversary Proceeding
It is undisputed that the parties’ arbitration agreement is subject to the provisions of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq. The FAA requires a federal court to enforce the parties’ arbitration agreement,18 and stay litigation that contravenes it.19 In deciding whether a dispute is arbitrable, the court must answer two questions: (1) did the parties agree to arbitrate, and if so, (2) does their agreement to arbitrate cover the particular dispute? Bank Julius Baer & Co. v. Waxfield Ltd., 424 F.3d 278, 281 (2d Cir.2005); ACE Capital re Overseas Ltd. v. Cent. United Life Ins. Co., 307 F.3d 24, 28 (2d Cir.2002); United States Fire Ins. Co. v. National Gypsum Co., 101 F.3d 813, 816 (2d Cir.1996), cert. denied, 521 U.S. 1120, 117 S.Ct. 2512, 138 L.Ed.2d 1015 (1997). The determination of arbitrability is governed by federal substantive law, Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985); Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), but in the end, general principles of contract law control. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995)(“When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally (though with a qualification we discuss below) should apply ordinary state-law principles that govern the formation of contracts.”); AT & T Techs., Inc. v. Comm’ns Workers, 475 U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)(“[A]rbitration is a matter of contract and a party cannot be.required to submit to arbitration any disputé which he has not agreed so to submit”)(internal citation and quotation marks omitted); see Mitsubishi Motors Corp., 473 U.S. at 626, 105 S.Ct. 3346 *741(“[T]he first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute”)
The answer to the second question is informed by the policy that favors arbitration:
[Questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration.... The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.
Moses H. Cone Memorial Hosp., 460 U.S. at 24-25, 103 S.Ct. 927; accord Mitsubishi Motors Corp., 473 U.S. at 626, 105 S.Ct. 3346; Bank Julius Baer & Co., 424 F.3d at 281. “Thus, as with any other contract, the parties’ intentions control, but those intentions are generously construed as to issues of arbitrability.” Mitsubishi Motors Corp., 473 U.S. at 626, 105 S.Ct. 3346; accord AT & T Techs., Inc., 475 U.S. at 650, 106 S.Ct. 1415 (“[T]here is a presumption of arbitrability in the sense that ‘[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.’ ”)(quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-583, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)).
The Court has already discussed the arbitration provisions of the Wellington Agreement. They are broad, United States Fire Ins. Co., 101 F.3d at 815, and unambiguously encompass coverage issues and coverage defenses. Given the arbitration clause’s breadth, arbitrability will be presumed “if the claim alleged ‘implicates issues of contract construction or the parties’ rights and obligations under it.’ ” Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading Inc., 252 F.3d 218, 224 (2d Cir.2001)(quoting Collins & Aikman Prods. Co. v. Bldg. Sys., Inc., 58 F.3d 16, 23 (2d Cir.1995)). The only question concerns CIC’s argument that the arbitration agreement is limited to the scheduled policies.
Although the answer is not entirely free from doubt, the arbitration clause does not expressly exclude unlisted policies from its scope. Indeed, the Wellington Agreement does not identify any issues that were specifically excluded from arbitration, and the parties have not pointed to any. Furthermore, the reference in the arbitration clause to “Appendices” appears to expand rather than limit jurisdiction. Thus, arbitration is not restricted to disputes under the body of the Wellington Agreement, but extends to disputes under the Appendices as well. Finally, CIC’s position raises defenses in the nature of waiver and estop-pel, and whether the failure to schedule a policy precludes the later assertion that it covers asbestos-related claims. These defenses are subject to arbitration. See Porter Hayden Co. v. Century Indemnity Co., 136 F.3d 380, 382-84 (4th Cir.1998)(defenses of statute of limitations and laches are arbitrable under the Wellington Agreement).
For the reasons discussed, the presumption in favor of arbitrability under federal substantive arbitration law requires the Court to resolve any doubts in favor of arbitration of the disputed coverage issue. See Porter Hayden Co., 136 F.3d at 382 (the heavy federal presumption of arbitra-bility “dictates that any ambiguity in the scope of the Wellington Agreement’s arbitration clause be resolved in favor of arbi*742tration”). Although CIC directed Count One at Quigley and Pfizer only, the coverage issues raised in Count One implicate the rights of most of the Certain Insurers as well as the other defendant insurers that issued At-Issue Policies; the determination of CIC’s coverage will affect the allocation sought under Count Three. In fact, all coverage disputes must be resolved before liability can be allocated among the defendant insurers.20 Furthermore, no party has argued that the Certain Insurers lack standing to seek a stay of the coverage dispute litigation between CIC, Pfizer and Quigley, who are also Wellington Signatories. Accordingly, Count One will be stayed under the mandate of FAA § 3 with respect to the coverage disputes involving the Certain Insurers, CIC, Pfizer and Quigley.
2. The Hartford Motion
Hartford moved, in the alternative, for dismissal, abstention or a stay. There is a substantial question as to whether a court may dismiss a complaint, even when all of the claims are subject to mandatory arbitration. See Lloyd v. Hovensa, LLC, 369 F.3d 263, 268-69 (3d Cir.2004) (collecting cases). Furthermore, Hartford is not even named as a defendant in Counts One and Two.
It is unnecessary to consider these questions, or the branch of the motion seeking abstention. Hartford is a subset of the Certain Insurers, and for the reasons discussed, the Court will grant its alternative motion and stay Count One.
3. The Non-Signatories
The 25 defendant insurers that comprise Group 2 issued At-Issue Policies but did not sign the Wellington Agreement. (See Roeap Declaration, Attachment. B.) In addition, six of the nine insurers in Group 3 did not sign the Wellington Agreement.21 They are not bound by the Wellington Agreement’s arbitration clause, and are not subject to the mandatory stay under FAA § 3. The Court will nevertheless stay any coverage disputes involving these parties in the exercise of its discretion.22
Courts have the inherent power to grant a discretionary stay of a proceeding pending arbitration, Citrus Mktg. Bd. of Israel v. J. Lauritzen A/S, 943 F.2d 220, 225 (2d Cir.1991), where there are issues common to the arbitration and the court proceeding, and those issues may be determined by the arbitration. Sierra Rutile Ltd. v. Katz, 937 F.2d 743, 750 (2d Cir.1991); Am. Shipping Line, Inc. v. Massan Shipping Indus., Inc., 885 F.Supp. 499, 502 (S.D.N.Y.1995); Kittay v. Landegger, et al. (In re Hagerstown Fiber Ltd. P’ship), 277 B.R. 181, 199 (Bankr.S.D.N.Y.2002) (a stay is appropriate when the non-arbitrable and arbitrable claims involve common questions of law and fact or when the arbitration is likely to dispose of issues common to the claims of the arbitrating and non-arbitrating defen*743dants.). Broad stay orders are particularly appropriate where the arbitrable claims predominate the lawsuit, the stay will promote judicial economy, and the delay will not cause undue hardship to the non-moving parties. Id.
Here, the coverage dispute involving the Wellington Signatories and the non-signatories is the same. It is likely that the arbitration will dispose of this predominant issue, and may, therefore, promote a resolution involving all of the parties. Lastly, the stay will avoid a race to the finish, and the possibility that this Court would usurp the arbitrator or his jurisdiction by deciding the coverage issue before he does.
The foregoing still leaves three defendant insurers that have not been accounted for. The International Insurance Company and the Westchester Fire Insurance Company are part of Group 1. They signed the Wellington Agreement and issued At-Issue Policies. The Insurance Company of North America, a member of Group 3, signed the Wellington Agreement although it did not issue a policy listed on Exhibit C to the Plan. If their failure to seek a stay implies a willingness to litigate coverage issues in this Court, they may be in the same legal position as the non-Wellington Signatories who cannot be compelled to arbitrate. The Court will stay any coverage disputes involving these parties in the exercise of its discretion for the same reason that it granted a discretionary stay with respect to the non-Wellington Signatories.
4. The Motion for Relief From the Automatic Stay
Up to this point, the Court has stayed the continued litigation of Count One in favor of arbitration, but has not compelled any further proceedings. The Certain Insurers have filed a companion motion in the main bankruptcy case for relief from the automatic stay to proceed with arbitration of the coverage dispute. Section 362(d)(1) of the Bankruptcy Code permits relief from the stay, on motion of a party in interest and after notice and a hearing, “for cause, including the lack of adequate protection of an interest in property of such party in interest.” The movant has the initial burden to show “cause” for relief from the stay. E.g., Mazzeo v. Lenhart (In re Mazzeo), 167 F.3d 139, 142 (2d Cir.1999). The statute does not define “cause,” and we are guided by the following factors enunciated by the Second Circuit in Sonnax Indus. Inc. v. Tri Component Prods. Corp. (In re Sonnax Indus., Inc.), 907 F.2d 1280 (2d Cir.1990):
(1) whether relief would result in a partial or complete resolution of the issues; (2) lack of any connection with or interference with the bankruptcy case; (3) whether the other proceeding involves the debtor as a fiduciary; (4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action; (5) whether the debtor’s insurer has assumed full responsibility for defending it; (6) whether the action primarily involves third parties; (7) whether litigation in another forum would prejudice the interests of other creditors; (8) whether the judgment claim arising from the other action is subject to equitable subordination; (9) whether movant’s success in the other proceeding would result in a judicial lien avoidable by the debtor; (10) the interests of judicial economy and the expeditious and economical resolution of litigation; (11) whether the parties are ready for trial in the other proceeding; and (12) impact of the stay on the parties and the balance of harms.
Id. at 1286. Not all of the factors are relevant in every case, Mazzeo, 167 F.3d at 143, and the Court need not assign equal *744weight to each factor. Keene Corp., 171 B.R. 180, 183 (Bankr.S.D.N.Y.1994).
Given the conclusion regarding arbitration, the Sonnax question comes down to one of timing. This Court cannot hear the portion of the coverage dispute subject to mandatory arbitration; the arbitrator will have to resolve that issue. Thus, the only question is whether the Court should allow the Certain Insurers to proceed with arbitration now.
The answer is yes, because arbitration now is more likely to lead to complete resolution in one forum. The Certain Insurers represented that they intend to include, in a single arbitration, Pfizer, Quigley, and all of the Wellington Signatories that issued At-Issue Policies. (Response by Certain Insurers to Consolidated Opposition of Quigley Company, Inc. and Pfizer Inc. to Motion by Certain Insurers for Relief from the Automatic Stay, dated May 31, 2006, at 5-6)(ECF Doc. #842, filed in Case no. 04-15739.) These insurers, which presumably include CIC as well, account for the vast majority of the liability limits implicated by the Transit Policies’ exclusion. (See Motion by Certain Insurers for Relief from the Automatic Stay at 8-9.) While there is no reason to believe that the Certain Insurers will change their position in the future, the Court can enforce their promise now by making it a condition of granting their motion. If the arbitrations proliferate, the Court can reconsider the matter, and if necessary, reimpose the stay. In addition, when discussing the discretionary stay, I suggested that a resolution of the coverage issue through arbitration might prompt a resolution of the entire coverage dispute. At a minimum, it will resolve most of the dollars in dispute. Accordingly, stay relief will have a greater chance of encouraging a complete resolution of the issues, {Son-nax Factor # 1), and will promote “the interests of judicial economy and the expeditious and economical resolution of litigation.” {Sonnax Factor # 10.)
Other Sonnax factors also weigh in favor of stay relief. The arbitration will not interfere with the bankruptcy case; Quig-ley insists that it can confirm the Plan without first resolving the insurance coverage issue. {Sonnax Factor # 2.) The proposed arbitration “primarily” involves third parties. {Sonnax Factor # 6.) Finally, the case law indicates that there have been numerous arbitrations under the Wellington Agreement. Although there is no guaranty, I suspect that the arbitrators that the parties select will have Wellington experience, and specialized knowledge of the intricacies of this comprehensive and complex agreement. {Sonnax Factor # 4.)
Quigley’s and Pfizer’s opposition focuses on concerns that arbitration, at this time, will significantly interfere with the administration of the estate and that the balancing of the harms militates in favor of continuing the automatic stay. The former, which centers on the fear of multiple arbitrations, (see Consolidated Opposition of Quigley Company, Inc. and Pfizer Inc. to Motion By Certain Insurers For Relief From the Automatic Stay, dated May 19, 2006, at 11)(ECF Doc. # 797, filed in Case no. 04-15739), has been addressed. Quig-ley and Pfizer imply that they will insist on separate arbitrations with each insurer. (Id. at 10)(“Although the Wellington Agreement does not preclude multi-party arbitrations, Quigley and Pfizer each has the right to a separate arbitration proceeding with each co-defendant insurer that is a Wellington signatory.”) If they do, they cannot complain about multiple arbitra-tions.
They also contend that they have entered into settlement agreements with several non-Wellington Signatories, and those settlements contain their own arbitration *745clauses. Pfizer and Quigley fear that stay relief will trigger arbitrations with the settling parties. {Id. at 11.) That issue is not, however, currently before me, and the proposal on the table will resolve most of the disputes in dollar terms. Furthermore, Quigley and Pfizer did not identify who those other parties are, or the arbitration clauses to which they referred. In any event, those arbitration clauses presumably apply to the particular settlement agreement, and raise different issues.
As to the balancing of the harms, Pfizer and Quigley maintain that, on the one hand, the Certain Insurers will not be harmed by a continuation of the stay, the arbitrable claims are “unripe,” and they have no connection with the confirmation process, and perhaps, the chapter 11 case. {Id. at 13.) On the other hand, stay relief will “produce significant and needless costs,” and divert Quigley’s limited resources from the confirmation process. {Id.)
Initially, the claims involving the Group 1 insurers are “ripe” for the reasons stated earlier in this decision, and the lack of any connection with the confirmation process or the case is an argument for, rather than against, stay relief. If Quigley and Pfizer are right, the coverage dispute can move at its own pace without disturbing the administration of the case. Furthermore, while the prejudice to the Certain Insurers is minimal if the stay is continued, Quigley has not articulated how it will suffer significant prejudice if the stay is modified to permit a single arbitration. The coverage dispute appears to present a straightforward legal issue. In any event, any coverage disputes among the Wellington Signatories must be resolved through arbitration, and the same dollars, must, therefore, be spent either by Pfizer and Quigley or the Asbestos PI Trust to resolve it.
On balance, the Court concludes that stay should be modified to the extent of allowing the Certain Insurers to file a single arbitration that joins all of the Wellington Signatories that issued Ab-Issue Policies.
C. Counts Two and Three
The Court will also stay the litigation of Count Two, but for a different reason. Count Two seeks reformation, and is contingent on a determination that the policies do not exclude asbestos coverage. Hence, consideration of this issue is premature. It is far from clear that reformation of the insurance policies is arbitra-ble, but that issue can be addressed, if need be, at a later date.
As stated earlier, Count Three is also contingent on a determination that the policies require coverage. This claim is also premature. I note, however, that the Wellington Agreement contains allocation provisions, and this issue may ultimately be subject to mandatory arbitration among the Wellington Signatories.
D. Count Four — Anticipatory Repudiation
Pfizer and Quigley moved to dismiss Count Four, which alleges a claim unrelated to coverage dispute. The Plaintiffs contend that the Plan provision that transfers Quigley’s and Pfizer’s interests in its insurance policies to the Asbestos PI Trust without the Plaintiffs’ consent breaches the anti-assignment clauses in the Plaintiffs’ policies and otherwise impairs the Plaintiffs’ rights. Pfizer and Quigley maintain that the claim is not “ripe,” but if it is, Count Four fails to state a claim on which relief can be granted. Fed.R.Civ.P. 12(b)(6). Since Count Four depends on the terms of the Plan, the Court may consider the Plan as well as the allegations in the Complaint in judging its *746legal sufficiency. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002).
Count Four is based on the doctrine of anticipatory repudiation. An anticipatory repudiation occurs when a party to a contract (1) states that he cannot or will not perform his obligations, or (2) commits a voluntary affirmative act that renders the obligor unable or apparently unable to perform his obligations. Norcon Power Partners, L.P. v. Niagara Mohawk Power Corp., 92 N.Y.2d 458, 682 N.Y.S.2d 664, 705 N.E.2d 656, 659 (N.Y.1998) (quoting Restatement (Second) of CONTRACTS § 250 (1981)); see Lucente v. Int’l Bus. Mach. Corp., 310 F.3d 243, 258 (2d Cir.2002); De Lorenzo v. Bac Agency, Inc., 256 A.D.2d 906, 681 N.Y.S.2d 846, 848 (N.Y.App.Div.1998); John D. Calamari & Joseph M. Perillo, the Law of Contracts 12-4, at 525 (3rd ed.1987); Restatement (SeCond) of Contracts § 250 cmt. b (1981). “For a statement to constitute an anticipatory breach, the announcement of an intention not to perform [must be] positive and unequivocal.” Argonaut P’ship, L.P. v. Sidek, S.A. de C.V., No. 96 Civ. 1967(MBM), 1996 WL 617335, at *5 (S.D.N.Y. Oct. 25, 1996)(quoting Tenavision, Inc. v. Neuman, 45 N.Y.2d 145, 408 N.Y.S.2d 36, 379 N.E.2d 1166, 1168 (N.Y.1978)), aff'd on grounds stated in district court op., 141 F.3d 1151 (2d Cir.1998). Whether the proposed insurance transfer constitutes an anticipatory breach of the insurance contracts is ripe for determination, and the issue is whether Count Four states a legally sufficient claim.
The Court faced a similar issue in In re Asia Global Crossing, Ltd., 326 B.R. 240 (Bankr.S.D.N.Y.2005). There, the debtor guaranteed the performance of a contract under which an affiliate agreed to deliver telecommunications capacity to 360net-works. The performance of the contract required the use of the debtor’s property. The debtor subsequently commenced a chapter 11 case, and filed a motion to sell substantially all its assets. 360networks filed a proof of claim, and contended that the proposed sale constituted an anticipatory breach of the contract because it rendered the debtor unable to perform.
The principal issue was whether the filing of a motion, which had not yet been approved by the Court, positively and unequivocally rendered the debtor unable to perform. Rejecting the creditor’s argument, the Court ruled:
Asia Global’s motion to sell all of its assets, without more, did not prevent it from living up to the performance guaranty. The proposed transaction fell outside of Asia Global’s ordinary course of business, and required Court approval. See 11 U.S.C. § 363(b)(1). Asia Global was not, therefore, bound to perform the ANC Sale contract until Court approval. Prior to approval, Asia Global could withdraw the application and abandon the contract, or the terms of the sale contract could change. The proposed sale contract might have given 360net-works pause and entitled it to demand adequate assurance of future performance, but it did not legally prevent Asia Global from meeting its obligations.
Id. at 256.
Here, wé are concerned with a statement of intention rather than the ability to perform, but the same rule applies. Quig-ley and Pfizer will not transfer their insurance interests unless the Plan is confirmed. The proposal can still be modified or withdrawn, or the Plan may never be confirmed.
Furthermore, the Plan requires a finding or conclusion in the Confirmation Order that the insurance assignments “do not violate any consent-to-assignment provi*747sions of any applicable insurance policy, agreement, or contract;” {Plan § 12.1(e)(xvi) at 189), and that the assignment of the insurance interests “pursuant to the Plan is valid, effective and enforceable.” (Id. § 12. l(e)(xvii) at 190.) Thus, the precise issue raised by the Plaintiffs in Count Four must be resolved in connection with the confirmation of the Plan. Even if Quigley waives the required finding or conclusion, (see id. § 12.3 at 191), the Plaintiffs can still object to confirmation on the same basis. In fact, they have already done so. (See Objection of Continental Casualty Company and Continental Insurance Company to Confirmation of Quigley Company, Inc. Third Amended Plan, dated Apr. 13, 2006, at 16-21, 28-30)(ECF Doc. # 698, filed in Case no. 04-15739.)
Accordingly, the proposed Plan provision, without more, does not constitute an anticipatory breach, and Count Four does not state a legally sufficient claim. Furthermore, the same question is teed up as part of the confirmation process, and the Court can deal with it at that time as a core matter. Nothing in this opinion is intended to prejudice the right of any party in interest to raise these objections at that time.
CONCLUSION
Quigley’s and Pfizer’s motion to dismiss the Complaint and Guildhall’s cross-claim for lack of subject matter jurisdiction is denied. The litigation of Counts One, Two and Three, and Guildhall’s cross-claim, are stayed pending the arbitration of the coverage disputes alleged in Count One of the Complaint and incorporated into Guildhall’s cross-claim. The Certain Insurers motion for relief from the stay is granted to the extent discussed above. Hartford’s motion to dismiss or abstain is denied, but its alternative motion for a stay is granted. Finally, Count Four is dismissed without prejudice to the assertion of the same arguments as a confirmation objection.
. The Complaint refers to CIC and CCC collectively as the '‘Plaintiffs,'' but CCC's rights are not implicated in the declaratory judgment and reformation counts. Its rights may be implicated in the apportionment claim, but this is not spelled out in the pleadings or the various motions. This opinion follows the convention used in the Complaint, and frequently refers to the "Plaintiffs” without distinguishing between CIC and CCC.
. The Fourth Amended Disclosure Statement With Respect to Quigley Company, Inc. Third *729Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated October 17, 2005 (the "Disclosure Statement ”) and the Quigley Company, Inc. Third Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated Oct. 6, 2005 (the “Plan”) are attached to EOF Doc. # 629 in Case no. 04-15739. The electronic document exceeds 650 pages. All references in this opinion to a page in the Disclosure Statement, the Plan or any exhibits attached to either, refer to the page number of the electronic document.
. Unless otherwise stated, the citation "(¶ -)" refers to the paragraphs in the Plaintiffs’ Complaint, dated February 21, 2006. (ECF Doc. # 1.)
. CIC is the successor to LG & A under one policy issued by LG & A to Pfizer. (¶ 4.) LG & A is not a party to this adversary proceeding.
. The "Quigley Contribution'' includes the consideration to be delivered to the Asbestos PI Trust, on account of Asbestos PI Claims, consisting of, among other things, the "Quig-ley Insurance Transfer.” (See Plan at 152-153.) The “Quigley Insurance Transfer” includes "the transfer, grant, and assignment by Quigley of the Quigley Transferred Insurance Rights to the Asbestos PI Trust as part of the Quigley Contribution.” {Id. at 153) The "Quigley Transferred Insurance Rights” consist, in turn, of "any and all rights, title and interest Quigley has in and to the ... the Shared Asbestos Insurance Policies,” as listed on Exhibit C of the Plan. {Id.) The “Shared Asbestos Insurance Policies” are "the occurrence-based policies issued to Pfizer which provide coverage to Pfizer and Quigley for, among other things, all or certain Asbestos PI Claims, as listed on Exhibit C to the Plan.” {Id. at 155.)
. The Plan provides that on or after the effective date, Pfizer will execute the "Insurance Relinquishment Agreement.” (See Plan § 1.1 (defining "Pfizer Contribution”) at 150 — 151; and § 9.3(e) (providing for execution of "Insurance Relinquishment Agreement.”) at 171.) Under the "Insurance Relinquishment Agreement,” attached as Exhibit K to the Plan, Pfizer will relinquish its rights, with certain exceptions, in the Shared Asbestos Insurance Policies. (Plan at 447, 453-465.)
. The Wellington Agreement, also known as the "Agreement Concerning Asbestos-Related Claims,” is attached as Exhibit A to the Declaration of James E. Rocap, III in Support of Motion by Certain Insurers to Stay Adversary Proceeding, dated Apr. 21, 2006, (the “Rocap Declaration”), which is filed as part of ECF Doc. # 114.
. At oral argument, Pfizer and Quigley stated that they intended to add the CIC Policies and the other At-Issue Policies to Schedule D. (See Transcript of Hearing held on June 14, 2006 ("Tr”), at 113)(ECF Doc. # 258).
. As noted earlier, the coverage disputes regarding the CCC policies have been settled, and CCC’s rights are not implicated in the coverage dispute.
. The Hartford Accident & Indemnity Company and the Insurance Company of North America issued policies that are listed on Exhibit D to the Plan. These two insurers, in addition to the First State Insurance Company, are also Wellington Signatories.
. The Certain Insurers include Travelers Casually and Surety Company, Employers Insurance Company of Wausau, Royal Indemnity Company, First State Insurance Company, Hartford Accident and Indemnity Company, New England Insurance Company, and Twin City Fire Insurance Company.
. Hartford includes First State Insurance Company, Hartford Accident Indemnity Company, New England Insurance Company, and Twin City Fire Insurance Company.
. 28 U.S.C. § 2201(a) provides in pertinent part:
In a case of actual controversy within its jurisdiction, ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
. Plaintiffs assert Counts One and Two against Pfizer and Quigley only. They assert Count Three against the other insurer defendants.
. Where, as here, a party moves to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction, a court must accept the material factual allegations in the complaint as true, but unlike a motion made pursuant to Rule 12(b)(6), need not draw inferences favorable to the plaintiff. J.S. v. Attica Cent. Schools, 386 F.3d 107, 110 (2d Cir.2004), cert. denied, 544 U.S. 968, 125 S.Ct. 1727, 161 L.Ed.2d 616 (2005); Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir.1998). A court may also consider materials outside of the pleadings to resolve any jurisdictional disputes, but cannot rely on conclusory or hearsay evidence. J.S., 386 F.3d at 110; Zappia Middle East Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir.2000); see 2 James Wm. Moore, Moore's Federal Practice, § 12.30[3], at 12-37 (3d ed. rev.2006) (‘‘[T]he court need not confine its evaluation to the face of the pleadings, but may review or accept any evidence, such as affidavits, or it may hold an evidentiary hearing.”).
. In addition, the plaintiff must establish an independent basis for federal subject matter jurisdiction. Warner-Jenkinson Co. v. Allied Chemical Corp., 567 F.2d 184, 186 (2d Cir.1977). The coverage issues concern the extent of Quigley's insurance. At a minimum, there is “related to” jurisdiction under 28 U.S.C. § 1334(b).
. The September 3, 2004 letter is attached as Exhibit A to the Affidavit of Gretchen A. Ramos in Support of Continental's Opposition to [Quigley Motion to Dismiss], sworn to May 19, 2006 (the “Ramos Affidavit1'), which is itself attached as Attachment 1 to the Plaintiffs’ Opposition.
. Section 2 of the FAA provides:
A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising our of such a contract, transaction, or refusal shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
. Section 3 of the FAA states:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.
. The coverage disputes do not appear to involve Hartford Accident & Indemnity Company or the First State Insurance Company, two of the Certain Insurers whose policies are not listed on Exhibit C to the Plan. Nevertheless, they are entitled to arbitration to the extent that a dispute regarding coverage exists.
. The three that did sign the Wellington Agreement are identified in footnote 10, supra.
.The Group 3 insurers may not have to face any coverage disputes because their policies are not listed on Exhibit C. The Court will nonetheless extend the stay to these defendants to the extent any coverage disputes exist. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494176/ | MEMORANDUM OPINION
PATRICK M. FLATLEY, Bankruptcy Judge.
Walters Construction, Inc. (“Walters Construction”), filed this adversary proceeding against Daniel Paul Cook (the “Debtor”) to except an alleged $17,000 debt from his Chapter 7 discharge pursuant to § 523(a)(2)(A) and/or (B) of the Bankruptcy Code. Walters Construction asserts that the Debtor was responsible for certifying the weekly payroll records of its subcontractor, Cook Heating and Air Conditioning, Inc. (“Cook Heating”),1 on a job subject to federal regulation under the Davis-Bacon Act. Because Cook Heating did not pay all of its workers’ fringe benefits as certified, Walters Construction asserts that it is being held liable for Cook Heating’s fringe benefit underpayment. The Debtor argues that the facts of this case do not meet the exception to discharge standards of § 523(a)(2), that the actual underpayment of fringe benefits is far less than $17,000, and that any amount owed to Walters Construction is subject to being setoff by debts that Walters Construction owes to Cook Heating.
The court held a trial in this case in Wheeling, West Virginia on December 12, 2006, at which time the court took the matter under advisement. For the reasons stated herein the court will deny the relief sought in Walters Construction’s complaint.
I. BACKGROUND
The United States Department of Housing and Urban Development (“HUD”) *817sponsored construction of the Hope VI North Wheeling housing development in Wheeling, West Virginia (“Hope VI”), which is being administered by the Wheeling Housing Authority (“WHA”). Walters Construction contracted with the WHA to supply materials and services in connection with the construction of Hope VI, and it subcontracted the plumbing and the heating, ventilating, and air-conditioning work to Cook Heating. To be able to work on the Hope VI project, Cook Heating agreed to pay its workers fringe benefits in an amount equal or exceeding that required by the Davis-Bacon Act, which was $2.50 per hour. The Debtor is the president of Cook Heating, and the job on the Hope VI project was Cook Heating’s first job using union labor.
During the course of Cook Heating’s work, pursuant to HUD regulations, it certified its weekly payroll on a form entitled “Statement of Compliance,” which it sent to Walters Construction. The Statement of Compliance form was prepared by the United States Department of Labor, Wage and Hour Division. The Debtor allowed these weekly forms to be signed by Cook Heating’s office staff who were not officers of the corporation. In nearly all the forms, Cook Heating represented that its workers’ fringe benefits were paid in cash in “an amount not less than the sum of the applicable basic hourly wage rate plus the amount of the required fringe benefits as listed in the contract.” The Debtor testified that he reviewed some, but not all of the Statement of Compliance forms that Cook Heating submitted to Walters Construction.
Walters Construction alleges that Cook Heating was unable to perform its subcontract satisfactorily, and that Walters Construction was forced to complete a portion of the limited excavation work delegated to Cook Heating. For that service, Walters Construction billed Cook Heating about $40,000. Cook Heating made some payments to Walters Construction for performing the work, but a large portion of bill remains unpaid. Glenn Walters stated that Walters Construction is withholding about $30,000 due to Cook Heating for work Cook Heating performed on the Hope VI project, which it plans to use as a setoff for the amount that Cook Heating owes to it for the excavation work.
In July 2004, HUD’s Pittsburgh, Pennsylvania field office made a site visit to the WHA for the purpose of auditing the Hope VI project. Part of that audit focused on whether or not employers were following the proper wage procedures in connection with the expenditure of federal funds. On July 28, 2004, the WHA informed Walters Construction that Cook Heating had failed to pay some of its workers’ fringe benefits — dating back to March 2002 — in an amount required by the Davis Bacon Act. In total, the HUD audit concluded that Cook Heating owed its workers $17,056.90. On August 6, 2004, Walters Construction informed Cook Heating of the audit findings and requested that Cook Heating make the required wage restitution.
Cook Heating did not respond to Walters Construction’s August 6, 2004 request, or to a follow-up letter from Walters Construction on October 20, 2004. On November 3, 2004, the WHA wrote Cook Heating directly, requesting a response on the findings of the HUD audit. When the WHA did not receive any response, it sent a notice to the Debtor and Cook Heating on February 8, 2005, informing them that they owed a back wage liability of $17,056.90, and that they had 30 days to file an appeal of the finding. Neither the Debtor nor Cook Heating ever appealed that finding.
Pursuant to HUD regulations, the WHA is withholding about $21,000 due to Wal*818ters Construction until such time as its subcontractor, Cook Heating, remedies the violations noticed in the WHA’s back wage liability determination.2
III. DISCUSSION
Walters Construction argues that Cook Heating submitted false payroll certifications to it on the basis that Cook Heating certified that its workers’ fringe benefits were paid in cash when HUD had determined that no such cash payments were made. Walters Construction asserts that the Debtor is personally liable for the false certification as the president of Cook Heating.3 Even if the Debtor did not act to intentionally defraud Walters Construction, it asserts that the Debtor’s actions in this case evidence a reckless disregard for the truth, which is the equivalent of an intent to defraud.
Section 523(a)(2) of the Bankruptcy Code provides:
(a) A discharge under section 727 ... of this title does not discharge an individual debtor from any debt—
(2) for money ... 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;
(iv) that the debtor caused to be made or published with intent to deceive ....
§ 523(a)(2)(A-B).4
“False pretenses,” “false representation,” and “actual fraud” are terms of art defined by the general common law of torts, and are not defined by the law of any particular State. Field v. Mans, 516 U.S. 59, 71 n. 9, 116 S.Ct. 437, 133 L.Ed.2d 351 (1995). Whether a creditor alleges a cause of action under 11 U.S.C. § 523(a)(2)(A) or (B), an essential element of both subsections is that the debtor have acted with the intent to deceive the creditor. E.g., § 523(a)(2)(B)(iv); Boyuka v. White (In re White), 128 Fed.Appx. 994, 998 (4th Cir.2005) (holding that to except a debt from discharge under § 523(a)(2)(A), *819the movant must show, inter alia, that “the debtor’s conduct was with the intention and purpose of deceiving or defrauding the creditor.”); 124 Cong. Rec. H11095-96 (daily ed. Sept. 28, 1978); S17412 (daily ed. Oct. 6, 1978) (stating that § 523(a)(2)(A) was meant to codify current case law that interprets “fraud to mean actual or positive fraud rather than fraud implied by law.”) (remarks of Rep. Edwards and Sen. DeConcini). A creditor must establish the requisite intent by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 286-87, 111 S.Ct. 654, 112 L.Ed.2d 755, (1991).
A creditor may establish the requisite intent to deceive by showing that the debtor acted with a reckless indifference to the truth. E.g., White, 128 Fed.Appx. at 998-99 (“A showing of reckless indifference to the truth is sufficient to demonstrate the requisite intent to deceive[;] a debtor will rarely, if ever, admit to acting with an intent to deceive, [thus,] intent may be inferred from the totality of the circumstances.”); Gen. Elec. Capital Corp. v. Acosta (In re Acosta), 406 F.3d 367, 372 (5th Cir.2005) (“An intent to deceive may be inferred from ‘reckless disregard for the truth or falsity of a statement combined with the sheer magnitude of the resultant misrepresentation.’ Nevertheless, an honest belief, even if unreasonable, that a representation is true and that the speaker has information to justify it does not amount to an intent to deceive. Thus, a ‘dumb but honest’ defendant does not have scienter.”) (citations omitted); Anastas v. American Sav. Bank (In re Anastas), 94 F.3d 1280, 1286 (9th Cir.1996) (“[R]eckless disregard for the truth of a representation satisfies the element that the debtor has made an intentionally false representation in obtaining credit.”).
Walters Construction argues that as the president of Cook Heating, the Debtor had a duty to review and sign accurate payroll certification forms, and respond to Walters Construction’s and the WHA’s letters regarding the HUD audit. By ignoring these duties, Walters Construction equates the Debtor’s conduct as a reckless disregard for the truth.
For example, Cook Heating’s Statement of Compliance submitted on February 6, 2004, is signed by “Elaine Cook, Secretary.” Elaine Cook is the Debtor’s mother; she is not the secretary of the corporation- — -she is an office secretary. Ms. Cook certified that each worker listed in that week’s payroll was paid the requisite amount of fringe benefits. At trial, the Debtor testified that while Cook Heating tried to timely pay its workers their fringe benefits, Cook Heating sometimes fell behind in those payments. In fact, Cook Heating still owes money to the Sheet Metal Workers’ Pension Plan, the entity to whom those benefits were paid.5 Thus, the Debtor admitted that a portion of Cook Heating’s weekly Statements of Compliance were false because those statements certified that benefits were paid when they had not been paid. Not only were some fringe benefits not paid, nearly all of its Statement of Compliance forms indicated that it was paying fringe benefits in cash, when Cook Heating was actually writing checks to the Sheet Metal Workers’ Pension Plan for its workers’ fringe benefit *820payments. The Debtor stated that he only reviewed a few of the weekly Statement of Compliance forms, and he freely allowed his office staff to complete and submit the forms.
The Debtor also testified that he received Walters Construction’s August 6, 2006 letter informing Cook Heating of the HUD audit that had identified problems with Cook Heating’s certified payrolls. Likewise the Debtor received the October 20, 2004 letter from Walters Construction asking that Cook Heating resolve the matter immediately. The Debtor also testified that he received the November 3, 2004 letter from the WHA asking for either documentation of Cook Heating’s benefit package or restitution. The Debtor also received the February 8, 2005 notification from the WHA of Cook Heating’s back wage liability, detailing the results of the HUD audit, requesting that the Debtor take immediate action, and informing the Debtor that either he or Cook Heating had 30 days to file an appeal of the back wage liability determination before that finding became final. The Debtor completely ignored the two letters from Walters Construction, the letter from the WHA, and the notice from the WHA.
On the other hand, the Debtor stated that he allowed his office staff to submit the weekly Statement of Compliance because he was “busy.” Indeed, the Debtor testified that as Cook Heating’s financial trouble deepened, he spent more time in the field performing work in an effort to save his company, forcing him to delegate more responsibilities to his office staff. Also, the Debtor stated that Cook Heating had almost always checked the box (only one of two options) indicating that fringe benefits were paid in cash. This was the first time that Cook Heating ever had notice that its election of “paid in cash” was incorrect, and the Debtor testified that he believed that he was paying in cash when he submitted a check to the Sheet Metal Workers’ Pension Plan for his workers’ fringe benefits.
The Debtor also stated that the HUD audit, and the subsequent dunning letters from Walters Construction and the WHA, came at a time when Cook Heating was experiencing financial difficulties and was being pressed for payment from several creditors. The Debtor indicated that he believed that HUD’s back wage liability determination was partially in error because he knew that at least a portion of that liability had been paid, and he was attempting to work with the Sheet Metal Workers’ Pension Plan to make payments on delinquent fringe benefits. Moreover, the Debtor stated that he believed that he was complying with the Davis-Bacon Act because he was paying his workers between $3.60 and $5.36 per hour in fringe benefits, when the Davis-Bacon Act only required that he pay $2.50 per hour. Additionally, the Debtor testified that Walters Construction was already withholding over $17,000 from Cook Heating for work that Cook Heating had performed at the Hope VI project. If Walters Construction was going to be liable for the non-payment of fringe benefits for Cook Heating’s workers, the Debtor believed that the amount owed in unpaid fringe benefits could be offset against the amount that Walters Construction already owed Cook Heating.
In sum, the Debtor testified that, in hindsight, he did not make good decisions regarding his failure to review the Statements of Compliance for accuracy, his failure to respond to Walters Construction’s and the WHA’s letters requesting action on HUD’s audit findings, and his failure to respond to the WHA’s back wage liability determination. The Debtor stated that he was “a furnace man,” not a businessman. The Debtor acknowledged that his decision *821to ignore the situation was especially poor considering his belief that Cook Heating had (at least in part) a defense of payment.
Weighing the evidence as a whole, the court finds that Walters Construction has failed to establish by a preponderance of evidence that the Debtor had the requisite intent to deceive to support a claim based on § 523(a)(2). First, the Debtor, as a “furnace man,” is not particularly knowledgeable about business administration. See, e.g., Panhandle Fed. Credit Union v. Black (In re Black), No. 05-5853, 2006 Bankr.LEXIS 2870 at * 13 (Bankr.D.Kan. Oct. 18, 2006) (“Although the Court might have questioned the veracity of the testimony that Debtor believed the transaction to be legitimate if Debtor were a sophisticated business person ... [the] Debtor did not fit this profile.... The fact Debtor was baffled by the transaction does not evidence intent to deceive the Credit Union.”); In re Touchard, 121 B.R. 397, 401-02 (Bankr.D.Utah 1990) (considering the financial sophistication of a debtor, among other factors, in determining if the debtor acted with the intent to deceive); In re Hall, 109 B.R. 149, 155-56 (Bankr.W.D.Pa.1990) (discrediting a “head in the sand” defense to a false loan application when the debtor was a sophisticated, intelligent, corporate executive who was involved in numerous family-owned businesses for over 30 years, and was very much aware of her business affairs). The Debtor’s statement that he is not a sophisticated businessman is supported by a review of the Uniform Fringe Benefit Remittance Report that Cook Heating submitted to the Sheet Metal Workers’ Pension Plan. Those Reports were handwritten, not typed, some of the numerals used on the Report are difficult to ascertain, and many of the Reports are only partially completed. The Debtor stated that the Hope VI project was his first time working with union labor, and that prior to engaging in the Hope VI project, Cook Heating’s business was about 80% residential and 20% light commercial. The Debtor also stated that he had performed work on other public housing projects, where nothing went wrong, and Cook Heating’s business practices on the Hope VI project were no different than what it had done on earlier occasions. In short, the Debtor and Cook Heating were not sophisticated, and the Debtor was working with a new set of rules by engaging union labor on the Hope VI project. Under these circumstances, it is not surprising that the Debtor and Cook Heating would make some mistakes.
Second, the Debtor made a credible witness. He answered counsel’s questions directly, acknowledged the fact he had made some mistakes, and recognized that he should have handled his supervision of office staff better and responded to HUD’s audit findings. The Debtor’s testimony was generally consistent with the exhibits, and he did not appear to be attempting to deceive the court or hide his mistakes. Moreover, while not prudent, the Debtor’s explanation as to why he chose not to respond to HUD’s audit findings, Walters Construction letters, or the WHA notification of back wage liability was believable. The Debtor did not believe that either he or Cook Heating would have to pay twice for those benefits that were already paid, notwithstanding the final nature of the WHA’s back wage liability determination. Likewise, should Walters Construction be liable on the WHA’s notification, Walters Construction was already holding over $17,000 in funds that were owed to Cook Heating; thus, the Debtor did not want to see Cook Heating pay more money on Walters Construction’s behalf at a time when Walters Construction owed it money, and when Cook Heating had other pressing financial obligations and a limited cash flow. Additionally, the Debtor testified that he was able to negotiate with the Sheet Metal Workers’ Pension Plan to al*822low for back payment of fringe benefits, and he was dealing directly with it rather than with Walters Construction or the WHA. Indeed, Cook Heating was continuing to make payments to the Sheet Metal Workers’ Pension Plan until April 2004. The Debtor also testified that he never intended to deceive Walters Construction regarding Cook Heating’s payment of its workers’ fringe benefits; Walters Construction’s and the WHA’s letters came at a time when he was just “really stressed out,” and was receiving other dunning notices.
Third, Cook Heating was !a small, family run operation where rules of procedure that may ordinarily govern in larger business entities were relaxed. The Debtor was the president of Cook Heating. The only other officer was the Debtor’s spouse. His mother was the office secretary. Because of the mom and pop nature of Cook Heating, the court does not find it reckless for the Debtor to entrust his office secretary — his own mother — with the task of completing the weekly Statement of Compliance forms. Also, in an attempt to resurrect his failing business, the Debtor testified that he began working more and more in the field, which required him to delegate more of his office work to his staff. Thus, the Debtor’s statement that he was too “busy” to review every Statement of Compliance is credible.
On the whole, the court finds that the Debtor did not act prudently, that he may have even acted negligently, but that the Debtor did not act with a reckless disregard for the truth, or with an intent to deceive Walters Construction. See, e.g., Aespace Am., Inc. v. Ping-Yau, Ko (In re Ping-Yau Ko), No. 03-2694, 2006 Bankr.LEXIS 3025 at * 15 (Bankr.C.D.Cal. Oct. 30, 2006) (“Plaintiffs ‘negligent misrepresentation’ state court judgment falls short of meeting the ... standard for nondischargeability under § 523(a)(2)(A), or otherwise.”); Wolf v. McGuire (In Re McGuire), 284 B.R. 481, 484 (Bankr.D.Colo.2002) (stating that the debtor’s conduct was negligent and did not rise to the level of being reckless for purposes of § 523(a)(2)).
III. CONCLUSION
For the above-stated reasons, the court finds that Walters Construction failed to establish the requisite intent necessary to support a cause of action based - on 11 U.S.C. § 523(a)(2)(A) or (B). Therefore the court will deny Walters Construction’s complaint to except the alleged $17,000 debt from the Debtor’s discharge.6
The court will enter a separate order pursuant to Fed. R. Bankr.P. 9021.
. Cook Heating filed a Chapter 7 bankruptcy petition in this District on September 12, 2005 (Case No. 05-3964).
. See 29 C.F.R. § 5.5(a)(2) ("In the event of a failure to pay any laborer ... all or part of the wages required by the contract, the (Agency) may ... take such action as may be necessary to cause the suspension of any further payment ... until such violations have ceased.”).
. The parties do not dispute that the Debtor, as the president of Cook Heating, is personally liable for any unpaid fringe benefits owed to Cook Heating’s employees. See, e.g., Mullins v. Venable, 171 W.Va. 92, 297 S.E.2d 866, (1982) ("We therefore hold that an officer in the management of a corporation who knowingly permits the corporation to violate the provisions of the Wage Payment and Collection Act may be held personally liable....”).
.Because the court finds that Walters Construction failed to establish that the Debtor acted with the requisite intent to deceive it, the court will not address the other elements necessary to prove a cause of action under either § 523(a)(2)(A) or (B). See In re Biondo, 180 F.3d 126, 134 (4th Cir.1999) (stating that under § 523(a)(2)(A) a creditor must show: "(1) a fraudulent misrepresentation; (2) that induces another to act or refrain from acting; (3) causing harm to the plaintiff; and (4) the plaintiff's justifiable reliance on the misrepresentation.”).
. According to the February 9, 2006 proof of claim submitted by the Sheet Metal Workers’ Pension Plan in Cook Heating’s bankruptcy, it claims to be owed $68,440 in unpaid fringe benefit contributions from September 1, 2003 to July 1, 2004, $12,548.68 in liquidated damages, and $2,082 in attorney’s fees. Subsequent to the trial in this case, both parties consented to the court taking judicial notice of the Sheet Metal Workers' Pension Plan’s proof of claim.
. Given the court's holding, it is not necessary to address the extent of the indebtedness (the Debtor’s case is fully administered as a no asset case), or the propriety of the Debtor’s setoff defense. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487907/ | ABBATE, Judge
ORDER
This case came on for hearing on the petition of Vicenta Arriola to contest the will. This will was admitted to probate during October of 1978. Accordingly, the petition must be denied as it is not timely. See, Probate Code §380.
Further, Petitioner has failed to meet her burden on the question of proper execution of the will as she did not produce and examine the subscribing witnesses. See, Probate Code §372.
*14This Court need not and does not reach the question of what property interest Petitioner will receive under the will. Such question will be properly taken up at the distribution stage of these proceedings. Nor does the Court reach the question of the revocability of Petitioner's will, as it is the decedent's will that is before this court. (Notwithstanding that they are both contained within the same document.)
Accordingly, the petition is denied.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487908/ | WEEKS, Judge
DECISION AND ORDER
Defendant Boonprakong moved for dismissal of this action because it fails to state a claim against him upon which relief can be granted. This Court ruled at the hearing on October 9, 1979 and in one subsequent order on October 14, 1979 as to certain counts.
There was an additional argument raised by defendant upon which the Court did not rule, i.e., the effect of Public Law 13-115 (§9990 et. seq. of the Government Code of Guam.) It is undisputed that plaintiffs did not submit this claim to arbitration and screening.
As noted by plaintiff in the memorandum in opposition to defendant Boonprakongs' motion, the arbitration statute has come before this Court for consideration in Civil Case No. 518-76 Van de Brug and A. Van de Brug v. R. Paramaguru et al. Judge Benson ruled that the statute in question deprives the parties of their right to trial by jury guaranteed by the Organic Act.
For reasons set forth in the order in the cited case,
IT IS ORDERED that the Motion for Dismissal is Denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487909/ | WEEKS, Judge
FINDINGS OF FACT, CONCLUSIONS OF LAW and DECISION
This matter comes before the Court with a somewhat involved procedural background. Judgment by default was entered against Mrs. Roper on January 7, 1980. this was set aside on February 22, 1980. Next, plaintiff moved for summary judgment against Robert Roper on February 6 on the grounds that the material contained in this request for admissions filed November 30, 1979 had not been answered and were therefore admitted.- The judgment was denied but a request by Defendant Robert Roper to file answers to admissions was also denied at that time. Trial took place on March 25 with argument on March 26, 1980.
The ownership of the rings found by Mrs. Roper is, as counsel for both sides agree, the crux of this case.
The court having sat as fact finder and having weighed both the credibility and interest of the witnesses, finds that the probability is overwhelming that the rings found by Mrs. Roper are those lost by Mrs. Campbell. The situs at the Andersen Air Force Base Plaza, the time frame of disappearing and finding of the rings, the gross similarities in design (whatever the recollection of minute differences may be), the undisputed bend in the engagement ring, all militate against the possible coincidence that two sets of rings were in issue here.
The Court hereby makes and files its Findings of Fact and Conclusions of Law.
*17FINDINGS OF FACT: Plaintiff David Campbell purchased a set of rings in November 1978 for $777.00. The rings were set with diamonds and made to be worn together and present a single design.
David Campbell, in December 1978, and in June 1979, gave those rings to Stephanie Campbell. While in Guam in July 1979, one of the rings was bent in a mishap.
On or about 31 August at Andersen Air Force Base in Guam, Stephanie Campbell lost the rings in the ladies' restroom near her place of business. Mrs. Campbell personally searched for the rings and notified the Security Lost and Found, the managers of stores in the Plaza, and certain persons with whom she worked. It is not indicated that she posted a notice or advertised in the base newspaper.
About the end of August or beginning of September Mrs. Roper found a ring set designed with diamonds, one of the bands being bent, in the ladies' restroom near her place of employment at Andersen Air Force Base, Guam.
The ring set found by Mrs. Roper on or about the end of August, beginning of September was the ring set lost by Mrs. Campbell.
Mrs. Roper made no attempt to place the rings in the custody of police or base authorities or to advertise them. Mrs. Roper kept the rings in her possession, unadvertised, for a period of approximately two weeks. She did exhibit them to friends.
Mrs. Roper sold the rings for $80.00 an unidentified person who took possession after giving a check to Mrs. Roper. This occurred approximately two weeks after the rings were found.
Mrs. Roper did not consult with her husband, nor receive guidance from him in the disposition of the rings she found. He cooperated in their sale only by cashing the check for her and immediately gave her the money.
After the rings were sold mutual acquaintances advised Mrs. Roper that Mrs. Campbell had lost a ring set. This was Mrs. Roper's first knowledge of a specific claimant.
A series of three confrontations between Mrs. Campbell and Mrs. Roper and a meeting between Mr. Roper and Mr. Campbell took place with regard to identification of the rings in question. That Plaintiff was calm and showed no signs of disturbance at them. These occurred within three months of the time of finding of the rings.
Mrs. Campbell was willing to reimburse and even reward the finder of her rings. Mrs. Roper, accompanied by her husband, attempted to contact the person who has purchased the rings to clarify the situation as to original ownership. Their attempt was unsuccessful.
Mr. and Mrs. Campbell retained counsel to represent them in an action for damages regarding the incident. Initial *18retainer was $250.00 with one-third of the recovered sum remaining to be paid to counsel if the suit is successful.
The following Conclusions of Law are reached by the Court:
CONCLUSIONS OF LAW: Debra Roper did not comply with the statutory requirements for one who finds property of an unknown owner, and wrongfully exercised ownership over the rings in question by selling them, all within a three month period after finding them, and is therefore liable to the owner of the rings for double their value.1
The rings are the separate property of Stephanie Campbell, such rings having been given to her by husband, David Campbell.2
The cooperation admitted by Robert Roper in Paragraph 4 of his admissions, being shown by testimony as mere negotiation of the check, is insufficient to establish statutory liability.
The Actions of Mrs. Roper in disposing of the rings without advertising or further attempting to determine ownership when coupled with her actions in seeking to locate the buyer do not show malice (rather cupidity) and do not constitute a basis for punitive damages.3
The mental anguish testified to by Plaintiff cannot be assessed from evidence received and is therefore deemed nominal.4
DECISION: Judgment will be entered for Defendants Robert Roper and Debra Roper against Plaintiff David Campbell.
Judgment will be entered for Defendant Robert Roper against Plaintiff Stephanie Campbell.
Judgment will be entered for Plaintiff Stephanie Campbell against Defendant Debra Roper in the amount of $1554.00 plus nominal damages for mental anguish of $50.00.
Attorney's fees denied.
Costs to be assessed against Defendant Debra Roper.
Footnotes:
Section 1865 - 1872 - Civil Code of Guam.
Section 162 - Civil Code of Guam.
Section 3294 - Civil Code of Guam.
Section 3360 - Civil Code of Guam. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487910/ | BENSON, Judge
ORDER
This matter came before the court on the Defendant's motion for an order dismissing the complaint for lack of prosecution for a period exceeding 2 years, under authority of §583 Code of Civil Procedure. The matter was submitted for decision on November 26, 1976.
In Jones and Guerrero Company, Inc. v. Atco Industries Inc., et al., Civil Case No. 925-72, Superior Court of Guam, the court on December 19, 1975 denied motions to dismiss on the same ground and authority as in this case, and held that dismissals for lack of prosecution were governed by Rule 41, not §583.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487912/ | ABBATE, Judge
DECISION AND ORDER
Defendant's Motion for summary Judgment was regularly heard on December 4, 1979. After oral arguments, the Court reserved decision. At the outset, it is necessary to state the events leading to the dispute. On August 24, 1970, Alejo D. Palting, the grantor and defendant, executed a grant deed with conditions subsequent concerning certain lots, the subject matter of the dispute. Said deed contained two restrictions obligating the grantee, SOHBU GUAM DEVELOPMENT COMPANY, INC., (1) within a reasonable time to commence the construction of permanent improvements on the land conveyed, such improvements to have a value at least equal to the unpaid balance of the purchase price; (2) that until the purchase price is paid in full the grantee shall neither sell, mortgage, or otherwise encumber the said land without the written consent of the grantor. Further, the deed provided a mechanism by which *24the grantor may proceed in his termination rights in case of breach of the above restrictions.
Subsequently, Defendant received monthly payments and the final payment was made on August 1, 1975. On August 6, 1979, the Defendant served Plaintiff with a Notice to Perform the Covenant or Quit. (See Exhibit B of this motion). On September 12, 1979, Defendant served Plaintiff with a Notice of Termination. (See Exhibit C).
Plaintiff opposed the motion on several grounds; there is a genuine issue of fact since Plaintiff claims the purchase price to be paid off while Defendant avers otherwise; that the restrictions are not necessarily conditions subsequent and that §1442 of the Guam Civil Code operates against Defendant's favor; (3) that Defendant did not exercise his rights within a reasonable period of time.
Initially, the court must determine the grantee's duties under the deed. The Court finds that the grantee has two affirmative duties as mandated by the two restrictions hereinbefore mentioned. The Court also finds that the grantee has fully complied with the second restriction concerning the purchase price but the grantee never fulfilled its duty regarding the first restriction; i.e. permanent improvements.
The Court will now consider the grantee's oppositional grounds, respectively.
The grantee's first ground is there is a genuine factual issue concerning the purchase price, the Court finds no merit to this contention since the grantor has not controverted this fact, contrary to the allegation of grantee's counsel. Furthermore, Defendant's motion is based on the fact that the grantee has failed, entirely, in his duty to commence permanent improvements, notwithstanding notice from the grantor that the latter was electing to exercise his termination rights. Whether an amount remains unpaid, goes only to the extremity of the grantee's duty regarding this restriction.
The grantee's second ground of contention is §1442 of the Guam Civil Code dictates that a condition involving a forfeiture must be strictly interpreted against the party for whose benefit it is created. The Court agrees with grantee this is the general rule. However, it is also well settled that an instrument is to be strictly construed against the maker of the instrument. Here the instrument was prepared and drafted by by grantee's attorney. See Page 3 of Andrew Gayle's deposition. Rule 30(e) of the Rules of Civil Procedure for the Superior Court of Guam.. Furthermore, it is well settled that a reversion of title for-, breach of a condition subsequent will not be decreed except upon -clear and satisfactory evidence of a violation of the condition. City of Palo Verdes v. Willett, 75 CA 2d 394, (7) P2d 26; Whittaker v. Regents, et al, 39 Cal. App. 111, 178 P. 308.
*25The grantee's final contention is the grantor did not exercise his rights within a reasonable time. It is apparent that the grantee deems four (4) years to be an unreasonably lengthy time. However, it is a matter of law that the fact that the grantor did not assert a right to re-enter for fifteen years after the breach did not operate as an estoppel, or preclude him from insisting upon a forfeiture and claiming possession. Union College v. New York, 173 N.Y. 38, 93 Am. St, Rep. 569, 65 N.E. 853; Lowrey v. Hawaii, (1910) 215 U.S. 554, 30 S. Ct. 209, 54L.Ed.325
THEREFORE, IT IS THE FINDING OF THE COURT THAT;
1. the grantee did not comply with the provision in the instrument that it shall commence within a reasonable period of time the construction of permanent improvement;
2. the grantor has fully complied with the provisions in the instrument outlining the procedure in case of a breach of the condition subsequent,
3. the restrictions in dispute are indeed conditions subsequent,
4. the grantor exercised his rights within a reasonable period of time, [and]
5. the grantee has been in continuing breach, from a reasonable time after the signing of the instrument to the giving of the notice to perform the covenant or quit, of its duty to erect permanent improvements.
. IT IS THE DECISION OF THE COURT that the Motion for Summary Judgment be and is hereby GRANTED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487913/ | WEEKS, Judge
DECISION AND ORDER
Defendant Paul J. Bordallo and Hotel Micronesia moved for summary judgment in this matter. Fred Kerley, Esquire, appeared for plaintiff at the hearing. Ladd Baumann, Esquire, has been substituted as counsel for plaintiff while the matter was under advisement. Fred Bordallo, Esquire, appeared for the defendants.
The fact which are undisputed are that in February 1974 defendants contracted with Tom Tang and Carl Gutierrez and their respective construction companies as a joint venture to undertake a certain project at the Micronesia Hotel. Later, in September 1974, an agreement was reached whereby plaintiff paid $30,000.00 to Tang as payment for incurred expenses of Sang Feng. It is agreed that this payment was known to plaintiff Gutierrez.
It is the effect of the payment to Sang Feng, and the agreement, if any, between plaintiff and defendant at this time, which is disputed by the parties.
Plaintiff alleges in his counter-affidavit that at the September meeting, defendant and he agreed that, although Sang Feng Construction would be released by the $30,000.00 payment, he (plaintiff) would remain ready to perform and the contract would remain in effect between plaintiff and defendant. Tom Tang's affidavit contains the same statements as plaintiff *27regarding the nature of the agreement among plaintiff and defendant and himself.
Defendants claim that the agreement with Tom Tang represented a release by the joint venture of all defendants' obligations under the contract in question. In attorney Bordallo's affidavit filed with the motion, he asserts first in paragraph three, that plaintiff at the September meeting agreed to accept as full settlement, the payment of any loss determined by negotiation between defendant Paul Bordallo and Tom Tang; and in paragraph six, that the sum of $30,000.00 was paid to Sang Feng Construction. (It is noted that Attorney [Fred] Bordallo was present at the meeting and has personal knowledge of the event). Thus it is claimed no further obligation exists on defendant's part.
The Court requested additional memoranda from the parties on the effect on a joint venture contract when one of the joint venturers is released by the other party to the contract. However, before reaching this question of law, the Court must resolve the clear factual dispute presented by the affidavits, and that cannot be done in a summary judgment.
Therefore, the defendant's motion for summary judgment is denied.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487914/ | WEEKS, Judge
DECISION AND ORDER
On September 9, 1978, the Superior Court issued a search warrant authorizing the search of a certain two-storey residence and "garage with tin sides and roof adjacent thereto" owned by a Pedro San Augustin and located in Canada, Barrigada. The search warrant also ordered the police to "conduct a search of the above described location, curtilage, and persons present therein for the controlled substance heroin..."
The affidavit in support of the search warrant indicated that the informant had observed many persons on the premises using heroin and that the drug-related activity thereon was of a continuing nature. The affiant stated that, in his experience as a peace officer, controlled substances are often found concealed upon the person of individuals who are present on premises where controlled substances may be found, that persons present on premises where a warrant is being executed will often hide the controlled substance on their person, and that the possibility of loss or destruction of- the evidence required immediate execution of the warrant.
Defendant contended that the search warrant issued in this case was constitutionally defective because it failed to name or describe specifically persons to be searched at the San Augustin residence.
This Court denied his motion to suppress and his petition for a Writ of Prohibition was denied by the Appellate Division of the District Court.
Defendant claims that the recent United States Supreme Court decision of Ybarra v. Illinois, 48 L W 4023 (November 28, 1979) dictates a reconsideration of this Court's decision.
However, footnote 4 of the Law Week decision makes it clear that the Supreme Court is not considering a factual situation akin to the instant case.
"... Consequently, we need not consider situations where the warrant itself authorizes the search of unnamed persons in a place and is supported by probable cause to believe that persons who will be in the place at the time of search will be in possession of illegal drugs..."
Thus, Ybarra is not controlling and the motion to reconsider is denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487915/ | WEEKS, Judge
DECISION AND ORDER
Judgment was entered against Pacific Realty on April 9, 1979.
Roy Cate was brought to Court to be examined as to his assets for payment of the judgment. The Court finds his liability extended only to the period of time he was employed as a broker for Pacific Realty Company. He admits that he personally applied for the telephone on the company's behalf and he asserts that he cancelled the phone when leaving two months later. Although plaintiff has no record of the cancellation the testimony received indicates that a record of the cancellation might not have been made or if made, might have been destroyed.
The Court finds Mr. Cate could be held liable only for the April and May billings and the installation charge. These billings as shown are $25.18 and the installation charge is $35.00.
*30However, testimony of the Telephone Company representative was that the bill payments from April to September were current.
It therefore appears that Mr. Cate would not be liable for any of the present judgment.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487916/ | RAKER, Judge
DECISION AND ORDER
The motion to dismiss the petition for writ of mandamus came on for hearing before this Court on January 30, 1980. Petitioner CHAMORRO EMPLOYEES LABOR UNION ("CHELU") was represented by Joaquin V.E. Manibusan, Jr. Respondents Paul M. Calvo, et. al., were represented by Deputy Attorney *31General Frederick J. Horecky. Based on the pleadings and oral argument, the Court makes the following findings:
1. Article VI, Section H of the Rules and Regulations, implementing the Public Employee-Management Relations Act, found at Government Code, Sections 4400 et. seq., states that the employee organization may appeal the Governor's decision and request a reconsideration.
2. Article XII, Section C of the Rules and Regulations, which implements Government Code, §4409, states: "Notwithstanding anything included in these rules and regulations the parties may submit a dispute to non-binding arbitration."
3. CHELU has not exhausted its administrative remedies and the writ is denied. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487917/ | RAKER, Judge
DECISION AND ORDER
The above entitled matter came on for hearing on Defendants' motions to quash summons for lack of jurisdiction on.March 20, 1980, before the Honorable Judge John P. Raker. Briefs and supporting documents were filed. Robert Klitzkie appeared for Defendant, PERVO PAINT COMPANY, and Nancy Nye appeared for defendant, GRAND INTERNATIONAL, INC. Plaintiff appeared through counsel, Matthew Gruskin. Court ruled to take judgment under advisement.
The Court will rule on both motions in this order, which are based substantially on the same facts.
Both defendants argue that they are not amenable to this Court's jurisdiction under §406.1 of the Code of Civil Procedure because neither parties have been "doing business" on Guam sufficient to confer personal jurisdiction on them.
The issue of in personam jurisdiction over a non-resident corporation has been dealt with extensively by the United States Supreme Court. In its decision from the landmark case of International Shoe Co. v. Washington, 326 U.S. 310, 90 L.Ed. 95 (1945) tEe Supreme Court stated that "... due process requires only that he (the defendant) have certain minimum contacts with (the forum state) such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." The Court reamplified its decision towards expanding the power of state courts to take jurisdiction over nonresident corporations in the subsequent decisions of McGee v. International Life Insurance Co., 355 U.S. 220, 2 L.Ed. 223, and again in Hanson v. Denckla, 357 U.S. 235, 2 L.Ed. 1283. Minimum contacts with the forum state still remains the prerequisite test.
The California courts have been more liberal in their interpretation of the Supreme Court's "minimum contact" decisions. The leading case in California on the issue is Buckeye Boiler Co. v. Superior Court, 71 C.2d 893, 80 Cal.Rptr. 113 (1969). Buckeye clarified §411(2) C.C.P., which is identical to Guam's former §406.1 C.C.P. The Court stated that as a matter of commercial actuality "a manufacturer engages in economic activity within a state . . . whenever the purchases or use of its product within the state generates gross income . . . and is not so fortuitous or unforeseeable as to negative the existence of an intent . . . to bring about this result." Soon after, and in a response to Buckeye, the California legislature repealed §411(2) and enacted a new §410.10 of the Code of Civil Procedure which is commonly referred to as California's "long arm statute". California may now reach out and take jurisdiction over a nonresident defendant where to do *33so would not violate the Constitution of the United States or the State of California.
With all this recent trend towards opening the limits of jurisdiction Guam has been struggling with the confusion of former §406.1 Code of Civil Procedure with little success. The Fifteenth Guam Legislature recently passed Public Law 15-69 which has repealed §406.1 Code of Procedure effective October 1979, and updated our statutes similar to California's revision. For the purpose of this decision we must construe the law in effect at the time this suit was filed, which is under the old §406.1 Code of Civil Procedure, and disregard any interpretation that the new §406.1 can be applied retroactively to this case.
While "minimum contacts" remains the prerequisite test under the Supreme court rulings, former §406.1 Code of Civil Procedure speaks in terms of "doing business" on Guam, and our focus must be addressed towards the language and validity of the statute.
In case of Nanette Magallano v. The Firestone Tire and Rubber Co., Civil Case No. 444-77 the Superior Court of Guam upheld the validity of former §406.1 Code of Civil Procedure as a proper procedure for serving a nonresident corporation, thereby conferring upon it the jurisdiction of Guam's courts. The remaining issue then is whether either defendants were "doing business" on Guam within the meaning of former §406.1 Code of Civil Procedure.
There is no exact test for determining whether or not a nonresident defendant is doing business on Guam. It is the combination of local activities, their manner, extent and character which determines the issue of jurisdiction. It must be shown that the nonresident defendant "maintained a representation which gave it in a practical sense, and to a substantial degree, the benefits and advantages it would have enjoyed by operating through its own office." Reeder Contractors of Arizona v. Higgins Ind., 265 F.2d 768 (CA9 1959). The court must consider (1) has the nonresident defendant through his acts purposefully availed himself of the privilege of conducting activities in the forum state, (2) does the claim arise out of, or result from the defendant's forum-related activities, and (3) will the exercise of jurisdiction be reasonable so as not to offend traditional notions of fair play and substantial justice.
As shown from the affidavits filed by both sides, defendant, GRAND INTERNATIONAL, was a wholesale contractor for plaintiff. After several months of negotiations and representations, some of which included visits by GRAND into Guam, plaintiff was able to secure the purchase of PERVO paints. At all times GRAND was acting as a wholesale dealer for plaintiff, and even after the paint proved unsatisfactory, *34GRAND continued to coordinate correspondences between PERVO and plaintiff to cure the defect. Defendant has shown to a substantial degree, that it intended by its acts to engage in business activities on Guam such that economic benefit would be derived. While GRAND does not claim to have any office on Guam, sales representative, or advertising outlet here, its acts throughout the entire length of this case demonstrates GRAND intended to engage in business activities with the resident plaintiff. In Island Equipment Company v. Teledyne Isotopes, Inc., Civil Case No. 713-78, the Superior Court upheld the jurisdiction over a California corporation upon facts similar to the instant case involving GRAND. This Court, therefore, concludes that GRAND'S actions have made it amendable to the jurisdiction of Guam's courts.
As regards the acts of defendant, PERVO PAINTS, INC., this Court does not reach the same conclusion. Plaintiff states that PERVO is subject to jurisdiction based on the fact it knew the paints were being shipped to Guam, and that upon learning of the defective condition of the paints it made several direct communications with plaintiff to correct the problems.
Nowhere has this court found that the mere knowledge one's product will be shipped to a particular state is sufficient to conclude that the corporation has thereby availed itself of the privilege of doing business in that state. PERVO'S knowledge alone does not lead this Court to conclude PERVO was engaged in any kind of substantial activity within our jurisdiction.
With regard to the several direct correspondences with plaintiff, this Court generally agrees with the favored position that compromises and negotiations should be encouraged to adjust any difficulties arising in a contract. 15 Cal. Jur. §380. Imposing jurisdiction upon a nonresident defendant based on the fact the defendant has made several efforts to remedy a defect would tend to chill the purposes behind compromise. The Court cannot conclude that the efforts of PERVO to cure the defects in the paints, without more, is sufficient to show PERVO was "doing business" on Guam.
Based upon the above discussion, it is ordered that service of process be quashed in favor of PERVO PAINT, INC., and upheld against GRAND INTERNATIONAL.
Motion to quash for PERVO PAINT, INC., GRANTED.
Motion to quash for GRAND INTERNATIONAL, DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487918/ | ABBATE, Judge
DECISION AND ORDER
This matter came on for hearing on April 4, 1980 to hear defendant, Gretchen Luttrell's, motion to quash service of summons by publication based on insufficiency of process. Plaintiff appeared through counsel Paul J. Rodgers, and defendant was represented by counsel E. R. Crain. Court ruled to reserve decision.
This court, upon review of all the records submitted herein, denies defendant's motion for the following reasons. Defendant bases her motion on the inconsistencies arising between the original summons mailed to her November 16, 1979 pursuant to the original complaint, and the summons she subsequently received December 31, 1979 mailed pursuant to plaintiff's amended complaint and order of the court for service by publication issued December 18, 1979. The Court bases its decision upon the sufficiency of the summons mailed in December pursuant to the order for publication. The court will not consider the sufficiency of the summons mailed November which was not directed by the court for publication.
Section 413 of the Code of Civil Procedure provides the time frame within which a defendant must respond to the summons served by order of publication, "... the service of the summons is complete at the expiration of the time prescribed by the order of publication." A defendant must respond prior to the expiration of the order. As indicated by the order of publication issued December 18, 1979, the court allowed a two *36(2) months time frame for publication, therefore allowing defendant two (2) months to respond. For reasons unclear to the court, the original summons was altered by the clerk of the court by striking our "20" and interlineating above it the number "30" while leaving unaltered the word "twenty" (". . . twenty (2G) 30 days . . ."), thus producing an obvious inconsistency and defect. Under Rule 61 of the Rules of Civil Procedure it is provided that "The Court at every stage of the preceding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties." Material prejudice to substantial rights rights of the party against whom process is issued seldom results from errors and defects in the process, and the doctrine of harmless error has been applied to such errors and defects. Southern Oil Corp. v. Waggoner, 276 F 487; Massachusetts Bonding and Ins. Co. v. Concrete Steel Bridge Co., 37 F2d 695. Under Rule 61 the Court finds harmless error in the sufficiency of the summons as altered by the court clerk.
Plaintiff contends that even if a defect were to exist in the summons, over 100 days have since elapsed and as yet defendant has not filed a response, thus inferring that any response now would be untimely. It would seem inequitable for this court to bind defendant to the two (2) month requirement for response when due in part to clerical error by the clerk the summons was served in a defective state. Therefore, defendant shall be allowed an additional period within which to file her answer in this case.
IT IS HEREBY ORDERED that defendant's motion to quash is DENIED, and that defendant file an answer herein with 30 days of this order.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487919/ | BENSON, Judge
MEMORANDUM OF DECISION
This matter was tried before the court, sitting without a jury, on April 1, 9 and 10, 1980. All parties appeared by counsel, and the individual defendants in person.
The action is on two promissory notes and on the chattel mortgage securing payment of one of the notes. No issue is presented as to the balance owed, consideration, or genuineness of the makers' and endorsers' signatures. There were two issues to be resolved at the trial:
(1) After the plaintiff repossessed the security, was it sold for a reasonable price?
(2) George Tamura was an executive of the plaintiff and at the same time, according to the. defendants, served as a director and as secretary-treasurer of the defendant *38corporation. The defendants allege a breach of the fiduciary obligation of Mr. Tamura to the defendant corporation which justifies relieving the individual defendants from any obligation under the notes. Pre-trial Order, p. 2.
Extensive evidence concerning the condition of the security and the circumstances of the sales was presented. I find that the proceeds received from the sale of the security constituted reasonable value.
In closing argument the attorney for the individual defendants stated tha second issue in words such as these: that George Tamura was an experienced banker, and alone of the three investors (Tamura and the individual defendants) had the ability to manage the financial aspects of the corporation; that great trust was placed in him by the others; and the the fiduciary relation thus created required that he make full disclosure to them of the nature of their obligation on the notes, specifically that they were liable as individuals thereon. The defendants' counsel then stated that it was not shown that such disclosure had been made.
In this case there is no evidence at all that Mr. Tamura made any misrepresentation to the defendants, coerced them to sign, concealed any matter or profited from the transactions. When the defendant corporation became insolvent I infer that his $7,000 investment was lost. It was well known to the individual defendants that Mr. Tamura was the chief executive officer of the plaintiff — its general manager.
The first note that is the subject of this suit is dated May 7, 1974 and is in the principal amount of $60,500. It is secured by a chattel mortgage. This note is Exhibit "1" in evidence, and Exhibit "C" of the complaint. It refinances three delinquent notes. Exhibits "H" and "I" are two of the notes. Francisco T. Torre is the maker of the notes. Exhibit "32" shows that Francisco T. Torre and Fred A. Torres were the makers of the third note. Exhibit "2" shows that many interest payments were made on this note for $60,500.
The second note involved in this action is also dated May 7, 1974, and is in the principal amount of $40,000. This note is Exhibit "3" in evidence, and Exhibit "A" of the complaint. It refinances four delinquent notes and secures an additional loan of $23,500 which was disbursed by check to the defendant corporation. Exhibits "12" and "13" show that Francisco T. Torre was the maker of two of the notes and received a check for the loan proceeds. Exhibit "11" shows that Francisco T. Torre and Fred A. Torres were the makers. Exhibit "4" shows *39that many interest payments were made on this note for $40,000.
The proceeds of these individual loans were apparently deposited to the corporation account. No issue of the application of the funds is before the court.
The second issue, whether as stated in the pretrial order or in the closing argument of the defendants, must be resolved against the defendants and in favor of the plaintiff.
I do not believe that the defendants thought that the earlier notes (which were refinanced) were signed by them other than as individuals. Two are in evidence and show that the borrower signed under the words "I do not desire disability and/or credit life insurance," as well as "mortgagee" at the bottom of the form. I infer the other notes were similar.
As to the fact question of whether Mr. Tamura made "full disclosure" to the individual defendants of their liability under Exhibits "1" and "3", I do not find, that because of conflicting testimony, that Mr. Tamura explicitly told them as endorsers they would be individually liable for the payments of the notes in the event that the corporation defaulted. They were told that because of the delinquency of the other notes, that refinancing was necessary. The notes themselves are unequivocal that the signatures of the individual defendants are made in two capacities, first signing as officers of the corporation and as the act of the corporation, and next signing as individuals. The signatures as individuals appear just under the paragraph consisting of this one sentence, "Each of the undersigned hereby indorses and guarantees payment and performance of this Note and Chattel Mortgage and agrees to and accepts all of terms, covenants, conditions and provisions thereof," and on a line under which the words "Indorser/Guarantor" appear.
I conclude that Mr. Tamura did not breach his fiduciary duty as asserted in closing argument of defendants' counsel. Contrary to the circumstances that defendants assert, I find that Mr. Tamura did not entirely carry out the financial aspects of the corporation, but that substantial accounting, bookkeeping and financial matters were carried out at the office of Francisco T. Torre.
The individual defendants cannot avoid liability on the ground that Mr. Tamura failed to explicitly inform them of their individual liability.
The plaintiff is requested to submit a proposed judgment approved as to form or seen by defendants. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487920/ | WEEKS, Judge
DECISION
On July 8, 1979 and March 27, 1980, petitions were filed by the Attorney General of Guam asking for the certification of the minor Frankie E. Villagomez for prosecution as an adult pursuant to §255 et. seq., of the Guam Code of Civil Procedure. The petitions alleged in the earlier, the offense of Theft by Unlawful Taking of a Motor Vehicle, in the other Aggravated Escape and Unlawful Use of a Motor Vehicle.
Section 255 of the Guam Code of Civil Procedure provides as follows:
"Certification to courts for criminal proceedings. If a child sixteen (16) years of age or older is charged with a public offense, and if the court after full investigation deems it contrary to the best interest of such child or of the public to retain jurisdiction, it may in its discretion certify such child for proper criminal proceedings to any court which would have trial jurisdiction of such offense if committed by an adult, but no child under sixteen (16) years of age shall be so certified; provided, that such certifying judge shall not in turn preside over the criminal proceedings against such child. (Enacted 1953; amended by P.L. 2-60, effective February 10, 1954.)"
Hearing was held on 30 April and 1 May, 1980, the minor being represented by Robert Bryant, Esquire, and the people *41being represented by Diane Pierson, Assistant Attorney General of Guam.
Testimony was heard from the owners of the vehicles in question and the officers concerned in the apprehension in each motor vehicle charge. The Division of Youth Affairs employee injured in the escape at issue was examined as well as three (3) minors who admitted participation.
This all concerned the commission of the alleged offenses. All remaining witnesses on both sides testified regarding the minor himself and his response to treatment, proposed or past.
In determining whether to grant or deny the petition, this Court will use the eight (8) "determination factors" provided in the appendix to the opinion of the Court in Kent v. United States, 383 U.S. 541, 86 S Ct. 1045, 162 Ed. 2d 84., as follows:
"1. The seriousness of the alleged offense to the community and whether the protection of the community requires waiver."
While the theft of property such as an automobile is a real hardship and an expense to the victim, it cannot, even when one speaks of a series of them, convey an urgency to put a minor in the adult system. The escape is not so clear cut. Certainly the prospect of escaped felons at loose in a community is serious. With the escape from a juvenile Facility, more attention must be paid to the succeeding factor, i. e., the character of the escape.
"2. Whether the alleged offense was committed in an aggressive, violent, premeditated or willful manner."
The evidence is undisputable in the motor vehicle charges that neither the acquisition or the vehicles or the apprehension of the minor involved violence. The escape testimony was to the effect that there was violence against Division of Youth Affairs personnel but it is not clear who effected the violence since the other participating minors contradicted their earlier statements that the minor struck the guard. It was clear that he had brandished a possible weapon, i. e. an electric fan.
"3. Whether the alleged offense was against persons . or against property, greater weight being given to offenses against persons especially if personal injury resulted."
The offense of aggravated escape included an offense against a person. The theft and unlawful' use were against property.
*42"4. The prosecutive merit of the complaint, i. e., whether there is evidence upon which a Grand Jury may be expected to return an indictment (to be determined by consultation with the United States Attorney)."
The testimony presented at the hearing by the witnesses concerning commission of the alleged offenses would unquestionably justify the return of a true bill against the minor by a grand jury with respect to all indictable offenses.
"5. The desirability of trial and disposition of the entire offense in one court when the juvenile's associates in the alleged offense are adults who will be charged with a crime in the U.S. District Court for the District of Columbia." (Not applicable)
"6. The sophistication and maturity of the juvenile as determined by consideration of his home, environmental situation, emotional attitude and pattern of living."
The minor was born on 26 December 1962. In a broad sense, anyone who commits antisocial acts, such as charged against the minor, must be classified as immature regardless of chronological age. However, it is not believed that the term "maturity" as used in the standard was used in that sense because then obviously no minor could ever be certified. The forensic psychiatrist who testified for the Government in this matter indicated in her written report and on the stand that the minor is immature "even for his years" which seems to indicate excessive immaturity. Furthermore, the term " sophistication" is used with the term "maturity". Sophistication is defined in Webster's New Collegiate Dictionary, Merriam-Webster, page 1101, copyright 1979, as follows:
"sophistication * * * 3: the process or result of becoming cultured knowledgeable, or disillusioned; esp: CULTIVATION, URBANITY 4: the process or result of becoming more complex, developed, or subtle"
None of the offenses alleged show a particular degree of sophistication — the escape showed no guile and was simplistic in operation. The personality traits described by the probation officer and all those who have been with him over the years show a spoiled manipulative child rather than a calculating adult.
The home life of the minor has in fact been, except for brief interludes with his brother, in an institution or foster homes. In most instances the minor left them with or without the consent of the juvenile authorities before any one could achieve a lasting effect.
*43The minor's drunken state on the occasions of his apprehensions which was described by several of the witnesses indicates a condition which the psychiatrist described as "Alcoholism" begun young. This is a condition which one associates with older persons but cannot as such be deemed a mark of either sophistication or maturity.
"7. The record and previous history of the juvenile, including previous contacts with the Youth Aid Division, other law enforcement agencies, juvenile courts and other jurisdiction, prior periods of probation to this Court, or prior commitments to juvenile institutions."
Jess Guerrero testified as a Probation Officer. His contact with the minor went back over the seven years of Mr. Guerrero's experience as a Probation Officer and it was he who recommended to the Government that certification be sought. He outlined for the Court the four foster home breakdowns, the failure of placement in Sanctuary and Cottage Home Facility. He also commented on the progression of severity of the offenses - from statutory offenses to felony escape. However, the Court notes this is not a steady escalation but rather a succession (lengthy) of nonviolent crimes against property culminating in the escape which involved injury to a Division of Youth Affairs staff member.
The frustration of the probation officer is apparent. His best efforts on behalf of the minor have not changed the minor's attitude. Frank still 'walks' when the desire hits him to leave his current situation.
John Balajadia, Division of Youth Affairs Superintendent, testified as to the minor's twenty-five (25) contacts with the system. His opinion was that Juvenile Justice could not offer long term treatment. It is noted that there is not a long time left for the juvenile stage of this young man's life. It was not stated that the drinking problem was treated while the minor was at the facility.
"8. The prospects for adequate protection of the public and the likelihood of reasonable rehabilitation of the juvenile (if he is found to have committed the alleged offense) by the use of procedures, services and facilities currently available to the Juvenile Court."
The Sad Man's World experience outlined to the Court by Mr. Hoffman is a deterrent directed "tour" of the Guam Adult Correctional Facility coupled with a conference of the minor so conducted, by a selected group of inmates including convicted murderers. It is a "sense" oriented experience to give the minor a realistic view of life within prison walls completely authentic, completely deglamorized.
*44ISA - the live-in facility directed by Mr. Perez, offers a support environment for adults and minors who have a drug problem. (See Paragraph 6 with respect to minor's problem). Although the minor left the premises while under Court order to stay there, the Director and inmates have indicated their willingness to receive him again. It is noted that upon his absenting himself from ISA, the minor went to the authorities and turned himself in and did not attempt to hide from the authorities.
Neither of these procedures has been really utilized for this minor (the ISA experience was too short lived to be evaluated). Their potential effectiveness is apparent to the Court and well suited to this minor's situation. A new attitude is already manifested in his return to the Lockup upon leaving ISA.
Upon analysis of the eight (8) determining factors discussed above, it is the opinion of the Court that it is in the best interest of the minor and of the public for the Juvenile Court to retain jurisdiction.
Judgment shall be in accordance herewith. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487921/ | WEEKS, Judge
JUDGMENT
A hearing having been held on 30 April and May 1, 1980 on the petitions that the minor be certified for prosecution as an adult person, and the Court having heard testimony of the witnesses and examined the exhibits admitted in evidence, and the Court having filed its decision:
IT IS ORDERED, ADJUDGED AND DECREED:
1. That the petition is denied and Frankie Villagomez will remain in the jurisdiction of the Juvenile Court for proper proceedings therein.
*452. That the Attorney General shall file a petition within ten (10) days of the date of service in the Juvenile Court for one charge of aggravated escape, one charge of unlawful use of a pickup truck, and one charge of theft by unlawful taking of a motor vehicle.
3. That the minor is hereby ordered to remain in the Agana Lockup pending the next hearing in this matter. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487923/ | ABBATE, Judge
DECISION AND ORDER
Defendant's motion for summary judgment came on for hearing on April 7, 1980. Plaintiff was represented by Robert Klitzkie. Defendant was represented by Duncan McCully. This decision is based on the pleadings and oral argument presented to the court.
Defendant's argument that this action is barred by res judicata is unfounded. In the debtor examination proceeding cited by defendant, Judge Raker had to accept defendant Pope's statement that he had no debt owing Pithree Farms, Inc. Said examination was not a trial and the findings there were not a judgment subject to res judicata. Where a defendant denies a debt, the judge has no power to enter a summary order or judgment adjudicating the validity of the claim. Such *49adjudication must be made in an independent action. Bunnell v. Wynns, 13 CA. 2d 144, 56 P.2d 267 (1936).
Defendant's argument that the statute of limitations has run is also unfounded. Defendant states that the stock subscription agreement was entered in 1972. But defendant never states when the agreement was to be performed. It is the breach of performance that starts the statute running, not when the agreement is entered. Where no date is set out in a stock subscription agreement, the performance is based on a "call" by the corporation. No facts setting forth a date of performance have been offered; thus the court cannot find that this action is barred by the statute of limitations. See, Spencer v. Anderson, 193 C. 1, 222 P. 355 (1924).
The court finds that there is a triable issue of fact, which is whether or not defendant has an outstanding debt owing Pithree Farms, Inc., the plaintiff's debtor. This question has not been litigated.
For the above reasons, the court DENIES the motion for summary judgment. Plaintiff’s counsel is instructed to prepare an order consistent with the findings herein.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487924/ | WEEKS, Judge
DECISION AND ORDER
This matter came for hearing on May 16, 1980, to consider defendant Government's motion to strike certain documents attached in support of plaintiff's motion in opposition to summary judgment. Plaintiff then orally moved the court to prohibit the Government from using any information which the defendant was precluded from using pursuant to order of the court dated September 11, 1979. Upon hearing all the oral arguments of both parties, this court ruled to reserve decision. This court will now consider each motion separately.
DEFENDANT'S MOTION TO STRIKE The Government contends that its motion is supported by Rule 408 of the Rules of Evidence which prohibits the admission of evidence of compromise to prove liability. The Government further contends that such documents are hearsay, violate the Best Evidence Rule, and are not properly authenticated.
Plaintiff, on oral argument, stated that the challenged documents were submitted for the purpose of estopping the Government from asserting as a defense the untimely filing of plaintiff's claim and action.
This Court finds that Rule 408 creates an exception for the admissibility of evidence otherwise inadmissible if offered for purposes other than to prove liability. Plaintiff does not seek to establish that the documents of compromise are an admission of liability on the part of the Government, but merely that negotiations were ongoing they are admissible.
The Court fails to find weight in the Government's remaining arguments. As to the issue of hearsay, the Court finds these documents to be non-hearsay. With regard to the Best Evidence argument, where an original is unobtainable, or within the control of the party opponent, the Rule creates an exception for the introduction of copy in lieu of the original. As regards the authenticity of the papers, unless there exists serious doubt as to the validity of the duplicate submitted, copies will be accepted by the Court.
Based on the foregoing, this Court finds no ground to strike the documents as submitted by plaintiff, and accordingly DENIES the Government's motion.
*51PLAINTIFF’S MOTION PROHIBITING THE USE OF CERTAIN INFORMATION BY DEFENDANT: Plaintiff contends that the Government is barred from using information relative to the "Letter of Understanding" for any purpose at trial pursuant to order of the court dated September 11, 1979. The order reads:
". . .in the event that defendant fails to provide answers to those interrogatories that defendant previously responded to by answering 'N/A' or 'Not knowledgeable of the fact' on or before October 17, 1979, defendant shall be precluded from introducing the requested information in evidence for any purpose at the trial in this matter."
This Court, after reviewing the order, agrees that the intent of said order is to provide a blanket prohibition on the use of any information not properly answered. At the time said order was issued, the Government did not make any objection to the blanket prohibition. It is now argued by the Government that it is not utilizing any information precluded by the order, but is relying only on information contained it its answer to the complaint. This Court believes that the order of September 11th clearly circumvents this argument, and that said order is an unconditional prohibition upon the Government from using any information relating to questions not properly answered.
It is not beyond the discretion of this Court to interpret a summary judgment proceeding as part of the overall trial, and therefore to interpret such a prohibition as applicable to such proceeding. Having failed to provide proper answers to the requested interrogatories specifically relating to the "Letter of Understanding", this Court finds the Government is forthwith precluded from using such information in support of its motion for summary judgment.
Plaintiff's motion prohibiting defendant from using the information referred to is hereby GRANTED.
Defendant's motion is DENIED.
Plaintiff's motion is GRANTED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487925/ | ABBATE, Judge
FINDINGS OF FACT, RULINGS OF LAW AND ORDER
This matter comes before the court on the petition of Loan Kim Barker, widow of deceased, for declaration community property rights and for custody of community property. The thrust of Petitioner's argument is that she is domiciled on Guam and that the marital domicile was Guam. During the testimony in support of her petition, Petitioner Loan Kim Barker admitted that she had paid certain people the sum of $6,000 to kill the deceased, and fled Guam shortly after the murder. Petitioner further testified that she has been convicted of second degree *53murder in this regard before the District Court of Guam. Petitioner also testified that she and Albert D. Barker were married in Vietnam "in 1971" and moved to Guam "some time in 1973". It must be remembered that this case is a petition for declaration of allegedly vested community property rights, not a petition to take under the estate of the deceased.
Donna B. Lawrence, the personal representative the deceased within the State of Colorado, opposes this petition on several grounds: (1) that the marital domicile was Colorado and that Colorado law therefore governs this case as to personal property; (2) that personal property acquired by the decedent while residing in Guam, but domiciled in Colorado is not community property; and (3) that the marital domicile of the Barker's was Colorado, and by operation of law, a woman, upon marriage, loses her former domicile and acquires that of her husband, no matter where the wife actually lives, what she believes, of what she intends.
FINDINGS OF FACT: From all the evidence in this case, this court finds the following facts:
Petitioner and the deceased were married in Vietnam in 1971 and moved to Guam some time in 1973.
This court takes judicial notice that in the case of Barker v. Barker, Domestic Case No. 752-78, the deceased declared Himself to be domiciled in Guam.
Petitioner has never been to Colorado and never intended to make Colorado her home.
The marital domicile, the situs of the marriage, was Guam, from the time of the Barker's arrival upon Guam until the deceased's death.
Petitioner has been convicted before the District Court of Guam of the second degree murder of the deceased.
Petitioner paid $6,000 in community property funds to certain persons to kill the deceased.
Subsequent to the deceased's death, Petitioner expended $10,000 in what had been community property funds. These expenditures included the cost of transportation to flee Guam for the primary purpose of avoiding prosecution, living expenses, gifts, loans given to various people, $5,000 in attorneys' fees to defend Petitioner on the murder charge, and $3,000 which was put up as bail.
Substantially all the expenses of running the family home, except for food, plus substantially all the expenses of the murder, the escape, and the attorneys' fees and bail have come from Petitioner's earnings as a waitress in various bars. At the time Petitioner earned this money she and the deceased were living together, under the same roof.
The deceased caused all his salary from his employment with the Federal Aviation Administration to be deposited in a bank in Hawaii, under his name alone.
*54The court notes from the record in this case that the deceased had an extensive estate, including two mortgages, a substantial amount of cash, and many $100 savings bonds, all in his name alone.
If any of the above findings of fact be deemed rulings of law, they are to be so considered.
RULINGS OF LAW: Two statutes of Guam provide that a wife must live where her husband chooses. See Civil Code §103 and §156. However, §129 of the Code of Civil Procedure provides as follows:
§129. Residence, proof required. In actions for dissolution of marriage neither the domicile nor residence of the husband shall be deemed to be the domicile or residence of the wife. For the purpose of such an action each may have a separate domicile or residence depending upon proof of the fact and not upon legal presumptions. Physical presence in Guam for one (1) year next preceding the commencement of the actioii shall give rise to a presumption of residence required by §123 of this Code. TEmphasis added.]
The above section speaks in terms of the possibility of separate domiciles of husband and wife for the purposes of a divorce action. Although this section is by no means a law of general applicability, it does indicate that a person may have different domiciles for different purposed. This is in accord with the modern view. Witkin and Proposed Official Draft of the Second Restatement of Conflict of Laws, §11. It must also El-noted that §103 and §156 of the Code of Civil Procedure both speak in terms of "place of living", not domicile. Thus, a showing that the deceased was domiciled, for some purposes, in Colorado, does not preclude this court from finding that the marital domicile, the situs of the marriage, was Guam. This appears to be the only reasonable result in this case. This court takes judicial notice that in the case of Barker v. Barker, Domestic Case No. 752-78, the deceased declared himself to be domiciled in Guam. Under Civil Code §129, the deceased need not have done that as a declaration of Colorado as his domicile wouldn't have effected the Court's jurisdiction in that case. Further, there has been testimony in this case that Petitioner Loan Kim Barker has never been to Colorado, never agreed to move to Colorado, and felt that the climate there-would be too cold for her comfort. The court believes this testimony on these points. Based upon all of the above, the court finds that the marital domicile, the situs of the marriage, was Guam.
*55The court must therefore proceed to determine the status of the property in question. The court has found, based upon Petitioner Loan Kim Barker's testimony that she and the deceased were married in VietnNam in 1971 and moved to Guam 'some time in 1973". Accordingly, Petitioner asserts property in question acquired on and after the date of her marriage. Section 164 of the Civil Code supports this position. This section provides in part as follows:
§164. Community property generally. All other property acquired after marriage by either husband of wife, or both, including real property situated in Guam, and personal property wherever situated, heretofore or hereafter acquired while domiciled elsewhere, which would not have been the separate property of either if acquired while domiciled in the Territory of Guam is community property; . . .
Under this statute, all of the property in question which was acquired on or after the date of the Barker's marriage in Vietnam, but before their arrival in Guam, would be transformed into community property, if it were not already community property under the laws of Vietnam, upon their arrival and taking up of marital domicile on Guam. Such a view, however, overlooks the operation of those provisions of the Constitution of the United States made applicable to Guam by the Organic Act of Guam. 48 U.S.C. §§1421 et seq. The Supreme Court of California has declared an identically worded statute unconstitutional as it applied to the devolution of property upon death. Estate of Thornton, 1 Cal. 2d 1, 33 P.2d 1 (1934). See also, Paley v. Bank of America, 159 Cal. App. 2d 500, 324 P.2d 35 (1958). Accordingly, and for the same reasons cited in Thorton, op. cit., §164 of the Civil Code is declared void pursuant to 48 U.S.C. §1421b.(u) to the extent that §164 purports to apply to the devolution upon death of property acquired in a non-community property jurisdiction. See also. Estate of Nicolls, 164 Cal. 368, 129 P. 278 (1912). But see, Addison v. Addison, 62 Cal. 2d 558, 43 Cal. Rptr. 97, 399 P.2d 897 (1965).
Therefore, only that property in question which was acquired after the Barker's arrival on Guam would be community property by virtue of Civil Code §164, but was it already community property by virtue of the laws of Vietnam? The law of Vietnam in this regard has been neither pleaded nor proved. Notwithstanding that there is a presumption that property acquired during a marriage is community property, under §164, it is still Petitioner's burden to establish the relevant time frame during which such a presumption would operate. That is to say, to plead and prove the law of Vietnam and/or also to prove on what date the Barker's arrived on Guam thereby *56moving the situs of their marriage to Guam. Petitioner has therefore failed in her proof as to the nature of that portion of the property in question that was acquired before the Barker's removal to Guam. Walton v. Arabian American Oil Co., 233 F.2d 541 (2nd Cir. 1956) cert. den. 352 U.S. 872 (1956).
To apply the lex fori or to indulge the presumption that the law of Vietnam is the same as the law of Guam would also be inappropriate in this case. To do either could be correct if the law of Vietnam happened to be community property, but it would not be if the law of Vietnam were other than community property. Petitioner's case is silent on this point and this court will not risk attenuating constitutional rights when such a risk results from the failure of Petitioner, who has the burden of proof, to plead and prove the law of Vietnam.
Similarly, Petitioner has established only that she and her husband came to Guam "sometime in 1973". Petitioner, having the burden of proof, may not take advantage of her own imprecision in her proof of facts. Therefore, the Petitioner's community property interest attached only to that portion of the property in question that was acquired on or after December 31, 1973.
Petitioner admitted in her testimony that her husband's death was brought about by her hiring certain persons to kill him and that she ultimately left Guam shortly after her husband's murder. The court has found that the primary purpose of Petitioner’s leaving Guam was to avoid prosecution for her husband's murder. (It must be remembered that this case is dealing with Petitioner's vested community property rights, and not with any inheritance.) It is argued by Petitioner that all such expenditures, including the murder, transportation costs, living expenses, gifts, and attorneys fees, were paid from Petitioner's separate property. There is presumption that all property acquired during marriage is community property. Civil Code §164. The burden is upon Petitioner to show that such property, which was clearly acquired during her marriage, is her separate property. Wilson v. Wilson, 76 Cal.App. 2d 119, 172 P.2d 568 (1946). This is frequently a very difficult burden to meet. Petitioner testified that the deceased never gave her any money to run the house and that all the expenses of running the house, the murder, escape, and attorney’s fees came from her earnings as a waitress in various bars. Such testimony, coming from an admitted convicted felon with a strong interest in these proceedings might well be viewed with suspicion but for extensive corroboration of that testimony. Testimony was had from other witnesses that the deceased caused his pay to be deposited in a bank in Hawaii. The deceased also had an extensive estate, all in his own name, including two mortgages, a substantial amount of cash, and many $100 savings bonds. Considering the extraordinary lengths to which the deceased *57went to keep any of his earnings from going to the support of his family, Petitioner's testimony on this point is most credible indeed. Petitioner has clearly established that, except for trivial amounts, all the expenses of running the house and the expenses of the murder, transportation cost, living expenses, gifts, and attorney's fees were paid from money that Petitioner earned on Guam, during her marriage to the deceased, Any such trifling contributions from the deceased would not transform what would otherwise be separate property into community. Estate of Cudworth, 133 Cal. 462, 65 P. 1041 (1901).
However, Petitioner has not established that such funds were her separate property, only that they came from her earnings. Civil Code §164 provides that such earnings are part of the community property. The fruits of such earnings would only be Petitioner's separate property if, at the time of such money was earned, Petitioner was living separate from the deceased. See, Civil Code §169. There has been no showing that this was the case. Indeed, all the evidence shows that Petitioner was living with her husband during this time.
The court has found that Petitioner fled Guam after the death of her husband. Thus, the expenditures for transportation, living, gifts, and attorney's fees must be held to have come from Petitioner's one-half interest in the community.
As to the expense of hiring killers to murder her husband, this was paid out while Petitioner's husband was alive. Such expenditure, however, was unlawful. It was an illegal contract, a squandering of community funds. No lawful valuable consideration was received, It certainly served no family purpose. Accordingly, Petitioner's half interest in the community property must bear the cost of hiring her husband's murderers.
The court has found that the cost of procuring the deceased's death to be $6,000.00. The court has found the cost of Petitioner's fleeing Guam, plus other expenditures incurred after the deceased's death, to be $10,000.00. This amount includes transportation costs, and living expenses, gifts, and attorney's fees. As the living expenses were incurred, the gifts purchased, and attorney's fees expended after the deceased's death, they all must be charged to Petitioner's half interest in the community property, notwithstanding that these expenditures were not illegal, immoral, or unethical. If any of the above rulings of law be deemed findings of fact, they are to be so considered.
ORDER: Accordingly, the court declares that Petitioner does have a lawful interest in the property in question, to the following extent:
*58A half interest in all such named property that was acquired on or after December 31, 1973, but a total value of $16,100.00 to be deducted from such half interest.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487926/ | WEEKS, Judge
DECISION AND ORDER
This matter came on for hearing on May 14, 1980 to consider defendant's motion for an order quashing a writ of attachment issued on certain real property of defendant dated April 25, 1980. Both parties appeared through their respective counsels. The Court ruled to reserve decision.
Defendant bases his motion on the unconstitutionality of §537(1) of the Guam Code of Civil Procedure. After reviewing *59the statute and applicable cases, this Court rules to grant defendant his motion for the following reasons.
For many years the unconstitutionality of §537(1) of the Code of Civil Procedure has never been seriously doubted or challenged in the legal community as a result of the District Court of Guam's decision in Bank of Hawaii v. Emerson, Civil Case #99-72. The District Court of Guam specifically held unconstitutional §537(1) of the Code of Civil Procedure basing its ruling on the lack of any sort of prior notice or hearing afforded the debtor before the issuance of an ex parte writ of attachment on the debtor's property. These fundamental considerations of due process were originally declared in Snaidach v. Family Finance Corp., 95 U.S. 337 (1969), and Randone v. The Appellate Department 5 Cal. 3d 536 (1971), which specifically held unconstitutional California's ex parte writ of attachment statute §537(1), after which Guam's statute was fashioned. Based on the above cited cases, it has been unquestioned for the past several years that Guam's §537(1) is no longer of any force or effect.
It is the position of this Court today to reiterate the holding of the District Court of Guam invalidating Guam's ex parte writ of attachment statute §537(1) of the Code of-Civil Procedure.
Defendant's motion to discharge the writ of attachment issued against certain real property dated April 25, 1980 is hereby GRANTED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487956/ | NOT RECOMMENDED FOR PUBLICATION
File Name: 22a0468n.06
Case No. 22-1201
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Nov 18, 2022
)
UNITED STATES OF AMERICA, DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
MARQUEZ MAURICE GOINS, ) DISTRICT OF MICHIGAN
Defendant-Appellant. )
) OPINION
Before:SUTTON, Chief Judge; COLE and THAPAR, Circuit Judges.
COLE, Circuit Judge. Marquez Goins was arrested after an incident of alleged domestic
violence and was subsequently indicted for being a felon in possession of a firearm. Goins moved
to suppress evidence that police obtained after they entered a residence without a warrant. The
district court denied the motion, and Goins pleaded guilty to the charge in the indictment. Goins
now appeals, arguing that the district court erred in denying his suppression motion. Because the
district court did not clearly err in determining that exigent circumstances justified the warrantless
entry and therefore the evidence was obtained lawfully, we AFFIRM the denial of Goins’s
suppression motion.
I. BACKGROUND
On July 19, 2020, at approximately 3:30 a.m., Florence Osborne called 911. Osborne told
the operator that her daughter’s boyfriend was “fighting her” and that he “got a gun” at
838 Calumet Street in Detroit, Michigan. (Govt. Ex. 1, 911 Call, R. 25 (audio recording).)
Case No. 22-1201, United States v. Goins
When asked what the boyfriend was doing with the gun, Osborne reported that she was unsure,
having just received “a call” relaying the information to her. (Id.) Shortly thereafter, the Detroit
Police dispatcher relayed the information to Officers Muhamed Vilic and Larry Jenkins and
directed them to respond.
At the scene, Osborne greeted Vilic and Jenkins with a key to the apartment, identified
herself as the 911 caller and mother of the victim, and reiterated the same information conveyed
on the 911 call. Vilic and Jenkins heard no yelling or other sounds of a struggle coming from the
apartment, nor did they interview any neighbors to ask if they had seen or heard any signs of
violence at the apartment. Vilic, however, peered through the blinds of the apartment window and
spotted two people, later confirmed to be Marquez Goins and Erica Arnold, seated on the couch.
Vilic saw Arnold’s face and believed that she looked “very uncomfortable,” like “she did not want
to be there;” she sat upright and tense, leaning to the side as if trying to “create space” between
herself and Goins. (Mot. to Suppress Hr’g Tr., R. 60, PageID 396–97.) Vilic also observed what
he believed to be signs of a struggle, including eating utensils on the floor and other items that
seemed “knocked down, out of place.” (Id. at 397.)
Based on the information relayed to them by the police dispatcher and Osborne, as well as
their observations on the scene, Vilic and Jenkins decided to enter the apartment to separate the
couple and investigate further. Vilic and Jenkins knocked on the apartment door, which was
unlocked and, according to Vilic, a female voice gave them permission to enter. Goins disputes
the veracity of this statement. In any event, Vilic and Jenkins entered the apartment and told Goins
and Arnold to show them their hands; Arnold did so, but Goins kept his hands “wrapped around”
Arnold. (Id. at 398.) Vilic and Jenkins repeated the commands, and Goins again declined to
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Case No. 22-1201, United States v. Goins
comply. Based on their continued concern for Arnold’s safety, Vilic and Jenkins then decided to
physically separate the couple.
After extricating Arnold from Goins’s grip, Vilic and Jenkins asked if there were any
weapons in the apartment. Arnold informed them of a weapon that belonged to her, which Vilic
and Jenkins verified. Both Arnold and Goins denied there being any other weapons in the
apartment, but Vilic noticed the handle of a gun sticking out of Goins’s right pants pocket. Vilic
began to retrieve the weapon from Goins’s pocket, and a struggle ensued. Vilic and Jenkins
eventually secured the gun and arrested Goins, who admitted that he was not supposed to own a
gun but had it for protection nonetheless. After police removed Goins from the apartment, Arnold
reported that she and Goins had a disagreement at a nightclub earlier that evening. Against
Arnold’s wishes, Goins followed her home and, once at her apartment, slapped and bit her.
Consistent with Arnold’s story, Vilic saw bruising and small lacerations on Arnold’s face and bite
marks near her right ear.
Several months later, a grand jury indicted Goins with being a felon in possession of a
weapon in violation of 18 U.S.C. § 922(g)(1). Goins moved to suppress evidence of the gun and
his statements to police, arguing that police obtained both unlawfully based on the Fourth
Amendment’s prohibition on warrantless searches and seizures. The government acknowledged
that Vilic and Jenkins entered the apartment without a warrant but presented several arguments to
justify the entry. After an evidentiary hearing, the government abandoned several of the arguments
made in its brief and relied solely on the Fourth Amendment’s exigent circumstances exception.
The district court concluded that exigent circumstances indeed justified the warrantless entry into
the apartment, and thus declined to suppress the gun or evidence of Goins’s statements to police.
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Case No. 22-1201, United States v. Goins
Goins pleaded guilty to the charge in the indictment, and now appeals, specifically
challenging the district court’s denial of his motion to suppress. Because the district court did not
err in finding that exigent circumstances justified Vilic and Jenkins’s warrantless entry, we affirm.
II. ANALYSIS
In reviewing a denial of a motion to suppress evidence, we review the district court’s
factual findings for clear error and its legal conclusions de novo. United States v. Snoddy, 976 F.3d
630, 633 (6th Cir. 2020) (quoting United States v. Hockenberry, 730 F.3d 645, 657 (6th Cir. 2013)).
We consider the evidence in the light most favorable to the prosecution. United States v. Woods,
711 F.3d 737, 740 (6th Cir. 2013). The district court’s factual findings will only be deemed clearly
erroneous if, upon review, we are left with “a definite and firm conviction” that the district court
made a mistake. United States v. Huffman, 461 F.3d 777, 782 (6th Cir. 2006) (quoting United
States v. Worley, 193 F.3d 380, 384 (6th Cir. 1999) (internal quotation marks omitted)).
The Fourth Amendment wards against unreasonable searches and seizures inside a home,
and searches and seizures conducted without a warrant are presumed unreasonable. Michigan v.
Fisher, 558 U.S. 45, 47 (2009). But exceptions to the prohibition on warrantless entry exist,
including—as relevant here—the “exigent circumstances doctrine.” United States v. Purcell,
526 F.3d 953, 960 (6th Cir. 2008). The government can thus overcome the presumption of
unreasonableness by proving that exigent circumstances justified the warrantless entry. Schreiber
v. Moe, 596 F.3d 323, 329–30 (6th Cir. 2010) (quoting Fisher, 558 U.S. at 47.) Exigent
circumstances arise where taking the time to procure a warrant would cause “immediate and
serious consequences.” Thacker v. City of Columbus, 328 F.3d 244, 253 (6th Cir. 2003) (quoting
Ewolski v. City of Brunswick, 287 F.3d 492, 501 (6th Cir. 2002)). Relevant here, an officer’s
reasonable belief, based on the totality of the circumstances, that he needed to enter a residence to
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Case No. 22-1201, United States v. Goins
protect someone from harm warrants a finding of exigency. Baker v. City of Trenton, 936 F.3d
523, 531 (6th Cir. 2019) (quoting Brigham City v. Stuart, 547 U.S. 398, 404 (2006)).
Here, the district court did not err in determining that reasonable officers would have
believed that an exigency justifying an immediate, warrantless entry existed. Although none of
these circumstances individually justify a warrantless entry, taken together, the 911 call, Osborne’s
statement on the scene, and Vilic’s observations of Arnold and the state of the apartment indicated
that Vilic and Jenkins needed to respond swiftly to prevent Goins from harming Arnold.
First, 911 calls—while not determinative—are “highly relevant” to the issue of exigency.
Smith v. City of Wyoming, 821 F.3d 697, 712 (6th Cir. 2016). Osborne also took an extra step to
corroborate the information she provided on the 911 call by appearing in person and informing the
officers about the alleged violence and potential firearm. See Huffman, 461 F.3d at 785 (on-scene
corroboration of 911 call supported finding of exigent circumstances). And the contents of the
911 call and Osborne’s statement at the scene were particularly concerning. The mere existence
of firearms within a residence does not create an exigency, but indicia that such weapons might be
used can support a finding of exigent circumstances. See Gradisher v. City of Akron, 794 F.3d
574, 584–85 (6th Cir. 2015). Such was the case here where Osborne stated that Goins was
“fighting” Arnold and had a gun on him. (Govt. Ex. 1, 911 Call, R. 25 (audio recording).)
Furthermore, Vilic’s observations of signs of a struggle and Arnold’s apparent discomfort
also suggest that the police reasonably believed they needed to intervene immediately. Goins
correctly observes that, by itself, Vilic’s observation of a few displaced eating utensils does not
justify a finding of exigency. But Goins ignores the other facts—such as Osborne’s statement that
Goins had already been violent toward Arnold—and Supreme Court precedent, which makes clear
that “[o]fficers do not need ironclad proof of ‘a likely serious, life-threatening’ injury” to justify a
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Case No. 22-1201, United States v. Goins
warrantless entry based on exigent circumstances. Fisher, 558 U.S. at 49. An exigent
circumstances analysis requires consideration of the totality of the circumstances and, in light of
all of the evidence Vilic and Jenkins had when they decided to enter the residence, they had an
objective basis to believe that immediate entry was justified. See United States v. Brown, 449 F.3d
741, 748 (6th Cir. 2006).
Goins argues that the 911 call, particularly Osborne’s statement about Goins having a
firearm, should be discounted because she stated that the information came from “a call” she
received, and she failed to name the caller. (Govt. Ex. 1, 911 Call, R. 25 (audio recording).) Goins
contends that Osborne’s failure to name her source makes her statement to the 911 operator
essentially an anonymous tip and is therefore insufficient to justify a warrantless entry. Goins is
correct that, in a probable cause analysis, an anonymous tip is of little probative value. See United
States v. Helton, 35 F.4th 511, 519 (6th Cir. 2022). But Vilic and Jenkins could rely on other
information aside from the statements in the 911 call, including Osborne’s statements at the scene
and their own observations, such as the alleged look of discomfort on Arnold’s face and the fact
that Goins’s arms were wrapped around her with his hands out of sight.
Finally, contrary to Goins’s argument, a finding of exigent circumstances based on the facts
of this case does not stray beyond the bounds of the exception as articulated in our case law or
Supreme Court precedent. The Supreme Court has observed that police have the authority “to
enter a dwelling to protect a resident from domestic violence” if they have a “good reason to
believe” that the alleged victim remains at risk of harm. Georgia v. Randolph, 547 U.S. 103, 118
(2006). Nor do officers need to witness violence firsthand to ascertain that an individual may pose
a threat of harm to others or to themselves. See Fisher, 558 U.S. at 49. As already described, Vilic
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Case No. 22-1201, United States v. Goins
and Jenkins had multiple reasons to believe that waiting to obtain a warrant would endanger
Arnold.
Other recent Sixth Circuit cases applying the exigent circumstances exception in domestic
violence situations echo our conclusions here. For example, in Baker v. City of Trenton, we
determined that the exigent circumstances exception applied where, relying on a witness statement,
the police dispatcher informed the officers that a young man was “threatening and yelling at his
mother” and was possibly armed. 936 F.3d at 528, 533. Police did not interview neighbors or
obtain any other evidence at the scene, other than hearing the suspect yell at them, demanding they
leave. Id. at 528. We agreed with the district court that those facts justified the police’s warrantless
entry, even where there were no signs of ongoing domestic violence. Id. at 532.
In Schreiber v. Moe, we likewise concluded that exigent circumstances justified a
warrantless entry into a home where a 911 caller “claimed to have heard screaming and believed
that [a teenage girl] was being beaten by her parents.” 596 F.3d at 330. The police officer testified
that, upon arriving at the scene, he heard yelling from within the home, but could not confirm
whether or not he saw the alleged victim or her injuries before he entered. Id. at 330–31.
Nevertheless, we explained that the officer’s entry was justified under either scenario, as the
uncertainty of the alleged victim’s safety made it “reasonable for him to investigate so that he
could confirm [the victim] was okay.” Id.
Conversely, in domestic violence cases where we found the exigent circumstances
exception inapplicable, the alleged victim had been removed from the potentially dangerous
situation already. For example, in United States v. Tatman, no exigency existed where the couple
had been separated and, while there was evidence of a firearm in the home, there was no indication
that it was likely to be used. 397 F. App’x 152, 163–64 (6th Cir. 2010). By contrast, when Vilic
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Case No. 22-1201, United States v. Goins
and Jenkins arrived on the scene, Goins and Arnold were sitting close together on the couch, with
Arnold’s countenance and body language conveying discomfort. Likewise, the officers had no
indication that the weapon was no longer in play, particularly where, according to Vilic, he could
not see Goins’s hands.
Overall, under the circumstances that existed when Vilic and Jenkins arrived on the scene,
reasonable officers would have had an objective basis for believing that they needed to enter the
premises immediately for Arnold’s safety.
III. CONCLUSION
For the foregoing reasons, we affirm the denial of Goins’s suppression motion.
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https://www.courtlistener.com/api/rest/v3/opinions/8487929/ | ABBATE, Judge
DECISION AND ORDER
The matter came for hearing on a motion to vacate sentence in the above-entitled Court before the Honorable Paul J. Abbate on March 19, 1980. The defendant was represented by Assistant Public Defender Richard Pipes and the Territory of Guam was represented by Deputy Attorney General R. Barrie Michelsen.
The Court received testimony and oral arguments from both parties. Defendant's expressed purpose for vacating sentence was to allow him the opportunity to perfect an appeal of his conviction. The evidence offered showed that his original appeal in 1976 was not perfected as a result of a clerical error by the staff of the Court.
The Territory's arguments to the contrary, the Court could vacate and resentence defendant under its broad powers pursuant to §1.07(c) of the Criminal Procedure Code. The Court fears, however, that this procedure would not necessarily solve defendant's problem. Within the federal case law there are decisions where the appellate court did not accept a notice of appeal that resulted from procedural correction of a clerical error by the method being attempted herein. See In Re Morrow, (CATex. 1974) 502 F.2d 520.
The Court notes that defendant's proper and least problematic method to obtain his appeal is by way of writ of habeas corpus in the District Court, or in this Court.
It is the Court's opinion that to grant defendant's motion would not necessarily result in a fair and just solution to this clerical error.
For the above-stated reasons, the COURT DENIES the motion.
IT IS SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487930/ | ABBATE, Judge
DECISION
This matter comes before the Court on Plaintiffs' motion for reconsideration filed July 14, 1978. Defendant Guam Memorial Hospital, (GMH), filed its motion for summary judgment on May 26, 1978 asserting the applicability of the Government Claims Act (GC Sections 6500 et seq.) to suits against GMH. That motion was granted by an order filed July 13, 1978 which stated that "plaintiff failed to comply with the Government Claims Act. . . . The Court finds that the intent of the Legislature was to include Guam Memorial Hospital within the statutory scheme of that act."
Because of the possible wide ranging ramifications of the decision in this case the Court agreed to reconsider its prior decision on the basis of new evidence of the legislative intent.
*69Initially, • it should be noted that the Court has considered the transcript of proceedings before the Legislature on May 11, 1977 dealing with Bill No. 182 which eventually became P.L. 14-29. The admission has been upheld against best evidence rule challenges. See People v. Ketchel, 59 Cal.2d 503 (1963). The affidavit of Ruth Ann Carter established the accuracy of the transcription.
The transcript indicated that originally §49003(g) describing powers of Guam Memorial Hospital Authority read:
(g) Sue or be sued in its own corporate name subject to the limitations and provisions of [the Government Claims Act. ]
The discussion of May 11, 1977 dealt with the propriety of deleting any reference to the Government Claims Act, The transcript indicated that the language was deleted with full understanding that thereafter claims against GMH would not be paid through the Government Claims Fund but through GMH's own funds.
Plaintiffs rely upon the transcript to bolster their original claim that the language of Government Code §49003(g), as it passed into law, did not cloak the Guam Memorial Hospital'with the protection of the Government Claims Act.
Defendant maintains that this interpretation is in direct conflict with other provisions of the Government Code.
"§6500.13. Limitation on Tort Liability
(a) Government Health Professionals means any person who is licensed or certified to practice a ‘healing art1 in Guam and is practicing that art within a Government of Guam facility as an agent of the Government of Guam.
(b) The Government of Guam shall be liable in tort for damages arising from the negligent acts of Government Health Professionals performed within Government of Guam facilities as an agent of the Government of Guam at the request of the government. Government Health Professionals shall be considered as an agent of the Government of Guam within the meaning of §6500.20 of the Government Code.
(c) For all claims, the Government of Guam shall not be liable- for more than Thirty-Five Thousand Dollars ($35,000) in an action for wrongful death, nor for more than One Hundred Thousand Dollars ($100,000) in any other tort action.
*70(d) The Government of Guam shall not be liable for interest prior to the date of judgment, nor for punitive damages.
"§6500.19. Payment. The Director of Administration shall pay the amount allowed in approved settlement under §6500.10 or in a court judgment under §6500.11, except as otherwise expressly provided by law. All payments under this Act shall be made from the Government Claims Fund. Claims against the Commercial Port, and the Public Utility Agency, Guam Power Authority, Guam Economic Development Authority, Guam Telephone Authority, Guam International Airport Authority, Gaming Commission, Guam Transit Authority and Guam Memorial Hospital Authority, however, shall be paid only out of the funds of those agencies." (Emphasis added).
It should be noted that §6500.13 was repealed and reenacted by §8 of P.L. 13-116. Section 9 of that Act provided that the provisions of §8 would expire automatically one year from the effective date of that act, which was December 24, 1975. Section 6 of P.L. 14-29 repealed §9 of P.L. 13-116 after the expiration date. For this reason, plaintiffs maintain that §6500.13 is of no force and effect.
However, common law rules of interpretation state that the repeal of a repealing statute operates to revive the original enactment where the repeal of the repealing statute is accomplished by express provision without additional legislation on the subject matter. 1A Sutherland on Statutory Construction, §23.31 (3rd Ed.). It is the opinion of this Court that §6500.13 was revived by §6 of P.L. 14-29. It is worthy of note that in addition to the provisions dealing with health professionals, §6500.13 includes the limitations on liability which are an essential part of the Government Claims Act.
Defendant argues that it is impossible to reconcile plaintiff's position with the language of §6500.19 which mentions "claims against" GMH. Defendant argues that the correct interpretation of the various provisions is that the Claims Act procedures are applicable while in the event of liability, GMH funds, rather than Government Claims Fund, will be drawn against. However, it must be remembered that at the time of the May 11, 1977 deletion §6500.19 was already in effect. That section expressly states that the Government Claims Fund will not be used to pay for claims against GMH. Therefore, the deletion of reference to the Claims Act would have been meaningless unless, as plaintiff argues, it eliminated any need to resort to the procedures of the Claims Act when suit is filed against GMH.
*71Such a result is not in conflict with §6500.13. The provisions can be reconciled by a holding which makes Claims Act procedures applicable to suits against individual Government Health Professionals and inapplicable to suits against GMH itself.
Although the issue is not squarely before the Court at this time, it will be noted that "claims against" GMH in §6500.19 may in fact mean suits against Health Professionals employed by GMH.
It is the holding of this Court that Government Claims Act procedures are not applicable to suits against Guam Memorial Hospital.
For the foregoing reasons, on reconsideration, defendant's motion for summary judgment is DENIED.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487931/ | WEEKS, Judge
DECISION AND ORDER
These consolidated cases come before the Court on the motion of an insured corporation against a third-party defendant insurer. In each case, an individual has recovered a judgment against a corporation for the intentional act of an *73employee of the corporation. The corporation now seeks indemnification of judgment by its insurer.
The insurer defended by asserting that an intentional act of the insured is excluded from the coverage by the policy which states in each instance:
The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damages to which this insurance applies caused by an occurrence.
In both policies the word "occurrence" is defined as follows:
Occurrence means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.
They further assert that to allow recovery by the insured would be against public policy, and lastly contend that the executive status of the assailant within the corporation precludes recovery even if available to employees.
The Court finds that none of the three defensive positions outlined by the insurers relieves them of the obligation of payment to their insureds.
The first contention regarding the coverage afforded by the policies is not in accord with the many cases cited by third-party plaintiffs in their first memorandum. The exact language of the policies at issue was construed and found to afford coverage in Baltzar v. Williams, 254 So.2d 470 (La. Adp. 1971).
The additional cases cited by third-party plaintiff also illustrate that if an intentional tort is not directed or committed by the insured it is covered. Arenson v. National Automobile and Casualty Insurance Company, 45 Cal.2d 81 (1955).
The Court rejects the argument against permitting indemnification of persons guilty of no wrongdoing for which they are being reimbursed - they simply have the misfortune to be legally responsible for the wrongdoing of another.
Section 43401 of the Government Code of Guam [stating]
An insured is not liable for a loss caused by the willful act of insured; but he is not exonerated by the negligence of the insured or of the insured's agents or others.
*74is the same as §533 of the California Insurance Code. In Arenson v. National Automobile and Casualty Insurance Company, supra, it was stated that that code section was not applicable where the insured was not personally at fault.
Lastly, insurers question the role of the assailants within the insureds' operation, alleging that one who is in an executive position dictates the actions of the insured sufficiently to make the liability personal to him and therefore unreimbursable.
The case of Dart Industries, Inc. v. Liberty Mutual Insurance Company, 484 F.2d 1295 (1973) is clearly on point. There, the action by the assailant executive was not at the direction of the insured and damages resulting were ordered indemnified.
Judgment is granted in favor of Cruz Equipment Company, Inc. and Chamorro Mart, Inc. under their respective insurance policies.
Attorney for insured to prepare judgment in conformity with this decision and submit to insurer's attorney for approval as to form.
SO ORDERED. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487932/ | WEEKS, Judge
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Trial was held on June 26 and July 2, 1980, before the Court sitting without a jury. The plaintiff and defendant appeared in person and with counsel.
PLEADINGS: A complaint of negligence arising out of an automobile collision is the basis for this action. A counterclaim was filed also alleging liability and damages.
The witnesses who testified included a child passenger and the driver of plaintiff's vehicle at the time of the accident and the investigating officer who arrived after the collision. Others testified regarding damages to plaintiff's car and defendant put on testimony regarding the condition of the Hospital Road at the time of the accident.
FINDINGS AND FACTS: 1. The defendant's vehicle had used and turned from properly marked public roadway onto a construction area at the entrance to Saehan's.
2. The plaintiff was using as a roadway the unpaved construction area adjacent to the highway.
3. The plaintiff had access to the public roadway prior to the spot of the accident but chose to remain on the unpaved construction and "take his chances".
4. There is no credible evidence that the vehicle turning into the construction area (defendant's) was going at excessive speed.
5. There is no evidence that the plaintiff's car was going at excessive speed.
6. The plaintiff's driver saw the vehicle of the defendant in the construction area crossing through to Saehan's before the collision and testified that he had time to maneuver ‘ his vehicle.
7. The driver of the plaintiff's vehicle offered to repair the damages to the vehicle.
8. There is no evidence of damage to defendant's vehicle.
CONCLUSIONS OF LAW: Section 23127.1(b) [Government (Vehicle) Code] is to be read in the light of subsection (a) of the same section. The language there makes it clear that the approaching traffic to be given the right of way is the traffic on the highway, therefore it is not applicable to the situation here where the plaintiff's vehicle was in a construction area off the highway.
The is no substantial evidence of negligence on the part of the driver of defendant's car.
*76The damages to plaintiff's car are not attributable to defendant, and plaintiff therefore is not entitled to damages from defendant.
The Court has no evidence before it to allow judgment on the counterclaim and cannot do so.
Attorney for defendant is requested to submit a proposed judgment, approved as to form or seen by the other attorney. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487957/ | NOT RECOMMENDED FOR PUBLICATION
File Name: 22a0469n.06
Case Nos. 21-4019/4081
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Nov 18, 2022
)
UNITED STATES OF AMERICA, DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE NORTHERN
JUSTIN MARTIN (21-4019); BRANDON ) DISTRICT OF OHIO
SHERIDAN (21-4081), )
Defendants-Appellants. ) OPINION
)
Before: SUTTON, Chief Judge; COLE and THAPAR, Circuit Judges.
COLE, Circuit Judge. Law enforcement recovered a myriad of firearms, drugs, cash, and
other contraband during a search of 106 Lake Street in Akron, Ohio. Both defendants—Justin
Martin and Brandon Sheridan—were present in the residence at the time of the search, found in
separate rooms, both of which contained contraband. Following a jury trial, both Martin and
Sheridan were convicted of possession of methamphetamine with the intent to distribute and
possession of a firearm in furtherance of a drug trafficking crime, and both were sentenced based
on the aggregate drug weight found in the Lake Street residence. Both defendants now appeal:
Martin from his sentence and Sheridan from his conviction. Because Martin’s argument regarding
his sentencing based on acquitted conduct is squarely foreclosed by Sixth Circuit and Supreme
Court precedent, and because the government provided sufficient evidence to establish Sheridan
Case Nos. 21-4019/4081, United States v. Martin, et al.
constructively possessed methamphetamine and firearms, we AFFIRM Martin’s sentence and
Sheridan’s conviction.
I. BACKGROUND
A. Conduct and Investigation
After receiving several drug complaints about 106 Lake Street in Akron, Ohio, the
Narcotics Unit of the Akron police conducted an investigation of the house, including a controlled
purchase of methamphetamine from the residence (the “Lake Street house”). Law enforcement
then obtained a search warrant for the Lake Street house on January 9, 2018, which they executed
in tandem with a SWAT team and Narcotics Detectives on January 10, 2018.
Upon entry, law enforcement searched the common areas and the three bedrooms, two of
which are relevant here. Sheridan was found in the southeast bedroom, which contained a large
amount of methamphetamine, multiple firearms, a box of 47 rounds of ammunition, $6,000 in
cash, pills, Martin’s wallet—including his Ohio driver’s license and an additional $425 in cash—
and Sheridan’s driver’s license and credit union membership card. Further investigation of the
credit union card revealed that Sheridan had applied for bank accounts tied to the Lake Street house
about a month prior to the search. Martin was found down the hall in the northeast bedroom. In
the same room, law enforcement found, among other things, eight firearms, body armor, $700 in
cash, paperwork with Martin’s name on it, and about 103 grams of suspected—later confirmed—
methamphetamine.
B. Indictment and Conviction
The government indicted both Martin and Sheridan with possession of a controlled
substance with the intent to distribute and possession of a firearm in furtherance of a drug
trafficking crime. The jury ultimately found both Martin and Sheridan guilty as to both counts. In
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Case Nos. 21-4019/4081, United States v. Martin, et al.
so doing, the jury rendered a special verdict as to the quantity of methamphetamine each defendant
possessed with the intent to distribute, attributing less than 500 grams to Martin and more than 500
grams to Sheridan. Verdict Forms, R. 114, PageID 608, 611.
C. Sentencing
For the drug charge, both Martin’s and Sheridan’s initial presentencing reports (“PSR”) set
their base offense level at 34, calculated using the aggregate drug weight of all the
methamphetamine found during the Lake Street search, which was “just over a thousand grams of
methamphetamine.” Martin objected to the attribution of all the methamphetamine to him as
relevant conduct, alleging that his base offense level should reflect only the amount he was
convicted of possessing, which was less than 500 grams according to the jury’s special verdict. In
finding Martin and Sheridan to have “jointly undertaken criminal activity,” the district court agreed
with the government and probation office that all the methamphetamine found during the search
of the Lake Street house constituted “relevant conduct” as to both defendants, thereby justifying a
base offense level of 34.
Martin received a two-level enhancement due to the court’s finding that he maintained a
premises—the Lake Street house—for the purposes of distribution, bringing his total offense level
to 36. A total offense level of 36 and Martin’s criminal history resulted in a guideline
imprisonment range of 210 to 262 months. The district court adopted the PSR and imposed a
within-guidelines term of imprisonment of 220 months as to the drug charge plus the mandatory
60 months for the firearm charge, totaling 280 months.
As to Sheridan, a total offense level of 34 and his criminal history resulted in a guideline
imprisonment range of 188 to 235 months. The district court adopted Sheridan’s PSR without
objection or change and imposed a within-guidelines term of imprisonment of 208 months for the
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Case Nos. 21-4019/4081, United States v. Martin, et al.
drug charge plus the mandatory 60 months for the firearm charge, totaling 268 months. Both
defendants timely appealed, Martin from his sentence and Sheridan from his conviction.
II. ANALYSIS
A. Justin Martin
Martin challenges the reasonableness of his sentence due to the district court’s use of
“acquitted conduct” to enhance his offense level beyond what the jury’s special verdict would
support. Martin correctly notes that, had the district court considered only the amount of drugs he
was convicted of possessing, his guidelines range would have been calculated from a base offense
level of 24, rather than 34, resulting in a significantly lower sentence. According to Martin,
consideration of all the drugs skewed the district court’s guideline range calculation, and this
acquitted conduct is an impermissible factor, so his sentence is both procedurally and substantively
unreasonable. Because, as Martin concedes, this argument is foreclosed by Sixth Circuit and
Supreme Court precedent, we affirm.
We review the reasonableness of a defendant’s sentence for abuse of discretion. United
States v. Carter, 510 F.3d 593, 600 (6th Cir. 2007) (citing Gall v. United States, 552 U.S. 38, 46
(2007)). “A district court's decision on the amount of [drugs] a defendant is to be held accountable
for is a finding of fact which must be accepted by a court of appeals unless clearly erroneous.”
United States v. Walton, 908 F.2d 1289, 1300–01 (6th Cir. 1990). We can appreciate Martin’s
concerns about sentencing a defendant based on “the maximum quantity of drugs that can plausibly
be found,” as opposed to the quantity a defendant is “more likely than not actually responsible
for,” Walton, 908 F.2d at 1302 (emphasis in original). We mitigated this concern by raising the
burden of proof to the preponderance of evidence when such a fact is “crucial to the determination
of a defendant’s guidelines base offense level”—as is the case for Martin. See id.; see also United
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Case Nos. 21-4019/4081, United States v. Martin, et al.
States v. Jones, 829 F.3d 476, 477 (6th Cir. 2016) (specifically applying the preponderance of the
evidence standard to facts considered for a within-guidelines sentence).
As discussed, the jury specially convicted Martin of possession of less than 500 grams of
methamphetamine. In finding that the methamphetamine in the other rooms of his house
constituted “relevant conduct,” Martin’s sentence was fashioned according to a sentencing
guidelines range that factored in all the methamphetamine recovered from the Lake Street house.
Determining a defendant’s “relevant conduct” is part and parcel with a district court’s sentencing
guidelines calculation, which goes to a sentence’s procedural reasonableness. See United States
v. Angel, 576 F.3d 318, 320 (6th Cir. 2009). So long as the relevant conduct is supported by a
preponderance of the evidence and the ultimate sentence does not exceed the statutory maximum,
an enhancement based on such conduct is allowed. United States v. White, 551 F.3d 381, 384–85
(6th Cir. 2008) (en banc). And so long as the subsequent sentence is at or below the “statutory
ceiling” as defined by the jury’s verdict, consideration of relevant conduct does not abridge the
right to jury trial. United States v. Benson, 591 F.3d 491, 503 (6th Cir. 2010) (quoting White, 551
F.3d at 385).
We cannot say the district court’s attribution of all the methamphetamine discovered at the
Lake Street house to both Martin and Sheridan is clearly erroneous. Martin does not challenge his
possession of the Lake Street house, nor that the house was “maintain[ed] for the purposes of
distributi[on].” He also submits that the southeast bedroom belonged to Sheridan. Law
enforcement discovered Martin’s personal information alongside methamphetamine, a drug scale,
and firearms in what Martin agrees is his bedroom, which alone supports the jury’s verdict.
Because Martin’s wallet and driver’s license were found in another bedroom in Martin’s house
that contained over 900 grams of methamphetamine, as well as other cash and firearms scattered
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Case Nos. 21-4019/4081, United States v. Martin, et al.
around the rest of his house, the district court reasonably concluded that Martin and Sheridan were
jointly trafficking drugs. In so finding, the district court reasonably attributed all the jointly
trafficked methamphetamine to both defendants during sentencing, and doing so does not
constitute clear error. Martin’s resulting enhanced sentence—280 months—is below the statutory
maximum penalty established by the jury’s verdict—480 months—so his sentence is procedurally
reasonable and therefore not an abuse of discretion. See White, 551 F.3d at 384–85.
As we have held before, “[i]n the absence of an inconsistent decision of the Supreme Court,
this panel will not overrule the court’s precedent upholding the application of the preponderance
standard” to factual findings supporting sentencing enhancements. Jones, 829 F.3d at 477. As
such, we affirm Martin’s sentence.
B. Brandon Sheridan
Sheridan avers that the evidence presented by the government is insufficient to support a
finding that he possessed either firearms or methamphetamine and is therefore insufficient to
support his conviction. We review such a challenge de novo. United States v. Robinson, 813 F.3d
251, 255 (6th Cir. 2016). We reverse a conviction only if, viewing the facts in the light most
favorable to the prosecution, no rational trier of fact could find guilt beyond a reasonable doubt.
United States v. Hill, 167 F.3d 1055 (6th Cir. 1999).
1. Possession
Both of the statutes underlying Sheridan’s conviction require possession, either of a
firearm, see 18 U.S.C. § 924(a)(1)(C), or a controlled substance, see 21 U.S.C. § 841(a)(1).
Possession can be actual or constructive, including joint possession over the same premises or
contraband. United States v. Hall, 20 F.4th 1085, 1106 (6th Cir. 2022). Constructive possession,
at issue for Sheridan, requires that the evidence “indicate ‘ownership, dominion, or control over
-6-
Case Nos. 21-4019/4081, United States v. Martin, et al.
the contraband itself or the premises . . . in which the contraband is concealed.’” United States v.
White, 932 F.2d 588, 589 (6th Cir. 1991) (quoting United States v. Gordon, 700 F.2d 215, 217 (5th
Cir. 1983) (citations omitted)). “A jury is entitled to infer that a person exercises constructive
possession over items found in his home.” United States v. Hill, 142 F.3d 305, 312 (6th Cir. 1998)
(cleaned up). Put differently, constructive possession of a premises is sufficient to establish
constructive possession of the items inside. See United States v. Kincaide, 145 F.3d 771, 782 (6th
Cir. 1998) (specifically referring to firearms). Per a related sentencing guideline, a “premises” is
defined as “a building, room, or enclosure.” USSG § 2D1.1 cmt. n. 17. Regarding drugs, while
physical proximity to or mere presence in an area near drugs is not sufficient, id., minimal
evidence, including circumstantial evidence alone, can support a criminal conviction. United
States v. Walker, 734 F.3d 451, 456 (6th Cir. 2013).
Law enforcement found Sheridan in a bedroom that contained more than 500 grams of
methamphetamine, multiple loaded firearms, $6,000 cash, his driver’s license, and a credit union
card in his name registered to the Lake Street house. Put together, Sheridan’s presence in and
unlimited access to the southeast bedroom, the bank accounts in his name tied to the Lake Street
house, and Martin’s assertion that the southeast bedroom was Sheridan’s indicate Sheridan’s
“ownership, dominion, or control over” the southeast bedroom. See White, 932 F.2d at 589. The
evidence could reasonably suggest much more than Sheridan’s mere access to the contraband, and
it “need not exclude every possible hypothesis except that of guilt.” United States v. Jordan,
544 F.3d 656, 670 (6th Cir. 2008) (citations omitted). At a minimum, therefore, a reasonable juror
could find that Sheridan constructively possessed the southeast bedroom, and therefore the items
-7-
Case Nos. 21-4019/4081, United States v. Martin, et al.
within, which suffices for his conviction regardless of possession over the rest of the house and its
contraband.1
That neither the drugs nor the firearms were found on his person is not dispositive. Indeed,
to find otherwise would collapse the well-established demarcation between actual and constructive
possession. See United States v. Barnett, 398 F.3d 516, 519 (6th Cir. 2005) (“The law recognizes
two kinds of possession, actual possession and constructive possession. Either one of these, if
proved by the Government, is enough to convict.”). Further, Sheridan points to Martin’s joint
occupancy of, and Martin’s family’s presence in, the Lake Street house as negating his own
possession over the drugs and firearms found inside. What this argument misses is that
constructive joint possession allows for multiple people to possess the same residence, and
therefore contraband, at the same time. United States v. Craven, 478 F.2d 1329, 1333 (holding
that “[p]ossession . . . need not be exclusive”); United States v. Wheaton, 517 F.3d 350, 367 (6th
Cir. 2008) (allowing joint possession of a firearm). Martin wordlessly acknowledges that such
joint constructive possession applies to him and Sheridan: he concedes his possession of the Lake
Street house and that the House was “maintain[ed] for the purposes of distributi[on],” and asserts
that the southeast bedroom belonged to Sheridan. See Martin Appellant Br. 8, 9, 14. As such, the
evidence could support a finding of joint constructive possession over the entire Lake Street house,
and therefore all of the contraband, or possession over just the southeast bedroom and its contents.
Either is sufficient.
1
This is not to say that no reasonable juror could find that Sheridan constructively possessed the entire house. This
is just to say that finding is not required based on the contraband found in the southeast bedroom.
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Case Nos. 21-4019/4081, United States v. Martin, et al.
2. Other Elements
Having identified evidence sufficient for a reasonable juror to find Sheridan possessed both
firearms and drugs—the challenged aspect of his conviction—we move on to briefly discuss the
other elements of each crime. The firearm(s) possessed must be used “in furtherance of” a drug
trafficking crime, understood to mean advancing, promoting, or facilitating the crime. United
States v. Mackey, 265 F.3d 457, 460–61 (6th Cir. 2001). This requires a “specific nexus between
the [firearm] and the crime charged,” considering whether the firearm was loaded, the type of drug
activity conducted, and the firearm’s location, including if the firearm was “quickly and easily
available for use,” id., such as to defend drugs from or deter theft, United States v. Couch, 367
F.3d 557, 561 (6th Cir. 2004). To sustain an § 841(a)(1) conviction, the drugs must be possessed
“with the intent to distribute,” which can be found through circumstantial evidence such as a large
quantity. See United States v. Garth, 965 F.3d 493, 496 (6th Cir. 2020) (citing United States v.
Vincent, 20 F.3d 229, 233 (6th Cir. 1994)).
Given the intersecting nature of these statutes, the evidence is similarly overlapping.
Relevantly, the southeast bedroom contained loaded firearms; close to 1,000 grams of
methamphetamine, valued at $40,000; and $6,000 cash. These pieces of evidence reasonably
support both the “intent to distribute” and “in furtherance of” elements. As to “intent to distribute,”
this quantity of methamphetamine is consistent with “distribution quantities,” from which intent
to distribute can be inferred. See Garth, 965 F.3d at 496. Similarly, “large sums of cash are
indicative of the drug trade.” United States v. Brooks, 594 F.3d 488, 495 (6th Cir. 2010). Outside
of the southeast bedroom, the house contained “miscellaneous security cameras,” which has been
found to be consistent with drug trafficking. Lastly, firearms are a recognized drug-trafficking
tool. Wheaton, 517 F.3d at 350. Based on this evidence, drawing all inferences in favor of the
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Case Nos. 21-4019/4081, United States v. Martin, et al.
jury’s verdict, we cannot say that no rational trier of fact could find Sheridan guilty of possession
with the intent to distribute.
Having evaluated his drug trafficking conviction, upon which the firearm possession
charge is premised, the next question is if the firearms were possessed “in furtherance of” that
offense. Assuming based on the above that Sheridan constructively possessed at least one firearm,
a reasonable juror could find as such. The corollary firearm sentencing enhancement for drug
trafficking convictions instructs that “[i]f the government establishes that the defendant possessed
a weapon, a presumption arises that the weapon was connected to the offense.” Wheaton, 517 F.3d
at 367 (internal quotation marks omitted). A juror could reasonably conclude that Sheridan
possessed the loaded and easily accessible firearms to facilitate the drug trafficking activities
occurring in the same residence, such as to provide defense or deterrence. See Mackey, 265 F.3d
at 460–61; Couch, 367 F.3d at 561. Sheridan’s argument that the firearms belong to Martin is
insufficient to overcome the evidence that connects the firearms to the distribution quantity of
drugs and cash in the southeast bedroom.
While the evidence presented at trial may not “exclude every possible hypothesis except
that of guilt,” Jordan, 544 F.3d at 670, a rational trier of fact could find Sheridan guilty of
possession of methamphetamine with the intent to distribute and possession of a firearm in
furtherance of said distribution. Therefore, we affirm Sheridan’s conviction.
III. CONCLUSION
For the foregoing reasons, we affirm Martin’s sentence and Sheridan’s conviction.
- 10 - | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494177/ | MEMORANDUM OPINION ON PLAZA CENTRO’S MOTION TO DISMISS
MARVIN ISGUR, Bankruptcy Judge.
On October 25, 2006, Defendant Plaza Centro, LLC, filed a motion to dismiss this adversary proceeding [docket no. 6]. For the reasons set forth below, the motion is granted.
Background
The property at issue in this proceeding is located at 525 Crosstimbers Street, Houston, Harris County, Texas (the Property). Prior to November 16, 2005, Moh-yadein Salaymeh and Hana Salaymeh owned the Property.
On June 19, 2003, Defendant Tablecraft Products Company, Inc. obtained a default judgment in state court against Mohyadein Salaymeh in the approximate amount of $12,000. On June 23, 2004, Tablecraft obtained an order granting turnover and appointment of a receiver, granting the receiver authority to take possession of and sell all non-exempt property of Mohyadein Salaymeh, including that associated with his business, and to pay any proceeds from the sale to Tablecraft to the extent required to satisfy the state court judgment.
On November 16, 2005, the receiver sold the Property to Defendant, Plaza Centro, LLC for the approximate amount of $150,000.
On May 15, 2006, the Salaymehs filed a petition under chapter 13 of the Bankruptcy Code. The Debtors commenced this adversary proceeding on October 8, 2006. They seek to set aside the pre-petition transfer of the Property to Plaza Centro pursuant to 11 U.S.C. § 548(a)(1)(B), § 544(a)(3) and § 544(b)(1).
On October 25, 2006, Plaza Centro filed a motion to dismiss, asserting that the Debtors lack standing to commence and maintain this adversary proceeding. The court requested additional briefing on the issue. Both the Debtors and Plaza Centro submitted briefs. On December 28, 2006, the Court held a hearing on the motion.
Analysis
In this adversary proceeding, the Debtors seek to avoid the pre-petition transfer of the Property to Plaza Centro. The Debtors allege that, at the time of sale, the *826Property was appraised by the Harris County Appraisal District at approximately $242,640 and had an approximate fair market value of $500,000. Because the Property was actually sold for $150,000, the Debtors contend the transfer was fraudulent under § 548(a)(1)(B). Alternatively, the Debtors seek to avoid the transfer of the Property to Plaza Centro under § 544(a)(3) and § 544(b)(1).
Section 548(a)(1) provides that the trustee may avoid any transfer of a debtor’s interest in property which occurs within two years of the filing of the petition if certain conditions are met. 11 U.S.C. § 548(a)(1). Section 544(a) provides that the trustee shall have the rights and powers of, or may avoid any transfer of property of the debtor that is voidable by, specific creditors or persons. 11 U.S.C. § 544(a). Similarly, § 544(b) provides that the trustee may avoid any transfer of the debtor’s interest in property that is voidable by creditors holding certain unsecured claims. 11 U.S.C. § 544(b)(1).
The express language of § 544 and § 548 provides that only the trustee has the power to avoid such transfers. Based on the plain language of the statutes, Plaza Centro alleges that the Debtors lack standing to commence and maintain this action.
The threshold issue, then, is whether the Debtors have standing to exercise the general avoidance powers of a trustee. The Bankruptcy Code grants a chapter 11 debtor in possession and chapter 12 debtors the general rights and duties of a trustee. 11 U.S.C. §§ 1107, 1203. However, the Code does not give chapter 13 debtors the general powers of a trustee. 11 U.S.C. § 1303 (granting a chapter 13 debtor only limited rights and powers of a trustee); In re Stangel, 219 F.3d 498, 501 (5th Cir.2000); In re Hamilton, 125 F.3d 292, 295-96 (5th Cir.1997); In re Bruce, 96 B.R. 717, 721 (Bankr. W.D.Tex.1989). Although some courts emphasize the reality that chapter 13 trustees have little incentive to pursue avoidance actions in support of a finding that chapter 13 debtors may exercise a trustee’s general avoidance powers, the Fifth Circuit expressly rejected such a view. In re Hamilton, 125 F.3d at 296-97.1 The Fifth Circuit observed that in § 522(h), Congress specifically authorized a chapter 13 debtor to exercise the trustee’s avoidance powers in limited circumstances. Given this narrow exception, contrasted with the general grant of authority to chapter 11 and 12 debtors, it is clear that Congress knew how to grant a chapter 13 debtor the general duties and powers of a trustee but chose not to. Id. at 297, n. 5. Consequently, in order to survive Plaza Centro’s motion to dismiss, the Debtors must establish that they meet the requirements to bring this adversary proceeding *827under the narrow exception set forth in § 522(h).
Section 522(h) grants debtors the authority to exercise § 544 and § 548 avoidance powers in limited circumstances. Section 522(h) provides that:
The debtor may avoid a transfer of property of the debtor or recover a set-off to the extent that the debtor could have exempted such property under subsection (g)(1) of this section if the trustee had avoided such transfer, if&emdash;
(1) such transfer is avoidable by the trustee under section 544, 545, 547, 548, 549, or 724(a) of this title; and
(2) the trustee does not attempt to avoid such transfer.
11 U.S.C. § 522(h). Subsection (g)(1) provides:
[T]he debtor may exempt under subsection (b) of this section property that the trustee recovers to the extent that the debtor could have exempted such property under subsection (b) of this section if such property had not been transferred, if&emdash;
(1)(A) such transfer was not a voluntary transfer of such property by the debtor; and
(B) the debtor did not conceal such property
11 U.S.C. § 522(g)(1). Section 522(b) permits the debtor to elect either federal or state exemptions and to exempt the property listed pursuant to the elected exemption scheme from property of the estate. 11 U.S.C. § 522(b); In re Zibman, 268 F.3d 298, 302 (5th Cir.2001).
The Fifth Circuit adopted a five-part test in In re Hamilton to determine whether a debtor may exercise the limited avoidance powers under § 522(h). Under the test, a debtor may avoid the transfer if: (1) the transfer was not a voluntary transfer of property by the debtor; (2) the debtor did not conceal the property; (3) the trustee did not attempt to avoid the transfer; (4) the transfer was avoidable by the trustee; and (5) the transferred property is of a kind that the debtor would have been able to exempt from the estate if the trustee had avoided the transfer. In re Hamilton, 125 F.3d at 297 (citing In re DeMarah, 62 F.3d 1248, 1250 (9th Cir.1995)). A debtor must establish all five elements in order to avoid a transfer under § 522(h). See, e.g., In re Willis, 48 B.R. 295, 299 (S.D.Tex.1985). Thus, if the Debtors fail to satisfy one element, they lack standing to avoid the transfer.
The basis of Plaza Centro’s motion to dismiss is that the Debtors cannot claim the Property as exempt, and therefore cannot maintain an avoidance action with respect to the Property. Specifically, Plaza Centro points out that the Debtors elected the Texas state law exemption scheme which provides no basis to exempt the Property. Texas law provides that a debtor may exempt his homestead, consisting of one or more contiguous lots, together with any improvement thereon, if used for a home or as both a home and a place of business. Tex. Prop.Code §§ 41.001(a); 41.002(a). Texas law further allows a debtor to claim as exempt certain types of personal property valued at $30,000. Id. at § 42.001(a). A debtor may not exempt an interest in a lawsuit. Texas does not allow a debtor to spill over unused value in one category of exempt property into another category.
It is undisputed that the Property is not the Debtor’s homestead. The Debtors do not cite to any Texas law that would allow them to exempt the Property had it not been transferred to Plaza Centro. Instead, the Debtors argue that the transfer is avoidable under § 522(h) since they could have exempted their interest in the *828property under § 522(d)—the wild card or catchall exemption—had they elected the federal exemptions. Section 522(d) may be applied to exempt any type of property but is limited to $975 plus up to $9250 of the unused portion of the homestead exemption. 11 U.S.C. § 522(d).
A debtor’s choice of federal or state law exemptions is mutually exclusive. A debtor may not pick and choose the most favorable exemptions under state and federal law, but must weigh the advantages of each scheme and elect one or the other. In re Dyke, 943 F.2d 1435, 1438 (5th Cir.1991). In their bankruptcy case, the Debtors elected the Texas state law exemption scheme. There is no basis under Texas law for the Debtors to exempt the Property. The Debtors do not deny that, as their case presently stands, they could not claim any portion of the Property as exempt if it were recovered, whether by the trustee or the Debtors, or if it had not been transferred. There is simply no basis under Texas law by which the Debtors can claim the Property as exempt.
Despite this reality, the Debtors contend that this element of the Fifth Circuit’s test should be construed more broadly. The Debtors argue that, hypothetically, they could have elected the federal exemption scheme, and if they had made such election, they could have exempted the property under § 522(d)(5) up to the value limitation imposed by § 522(d)(5).2 Thus, the Debtors’ argument focuses on the use of the terms could have exempted in § 522(g)(1). This argument stretches too far.
Although emphasizing these terms supports the Debtors’ view, this interpretation would violate the cardinal rule of statutory construction that statutes should be read in context. Dolan v. United States Postal Service, 546 U.S. 481, 126 S.Ct. 1252, 1257, 163 L.Ed.2d 1079 (2006). The United States Supreme Court explained:
The definition of words in isolation ... is not necessarily controlling in statutory construction. A word in a statute may or may not extend to the outer limits of its definitional possibilities. Interpretation of a word or phrase depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis.
Id.
The Debtor’s emphasis on could have minimizes the rest of the language in § 522(g)(1). Read in context, § 522(g)(1) *829allows a debtor to exempt under § 522(b) property that the trustee recovers, but limits this right to exempt the property to the extent that the debtor could have exempted such property had it not been transferred. 11 U.S.C. § 522(g)(1). Thus, a debtor’s rights under § 522(g)(1) arise only if two things first occur: (1) the trustee recovers property pursuant to the avoidance powers and (2) the property is of a kind that the debtor could have exempted had the transfer never occurred. Even where a trustee recovers the property post-petition, a debtor must still show that he could have exempted the property.
It is a general rule of bankruptcy law that a debtor’s right to exempt property is determined by the facts and the law as they exist on the date of the filing of the bankruptcy petition. In re Zibman, 268 F.3d at 302. This rule prevents a debtor from exempting any property in which the debtor does not have an interest on the date of the filing of his bankruptcy petition. Section 522(g)(1) creates an exception to this rule and allows a debtor to exempt property recovered by the trustee if the debtor could have exempted such property under [§ 522(b) ] if such property had not been transferred. This language effectively places the debtor in the position he would have been in had the transfer never occurred, and allows the debtor to exempt property that he otherwise could not.
Taking the statutory language in context, it is apparent that the term could have refers to the hypothetical cases where an avoidable transfer is presumed not to have occurred as of the date of the filing of the debtor’s bankruptcy petition so that a debtor may claim the property as exempt.
The Court recognizes that it is possible for the Debtors to amend their schedules to elect the federal exemptions at any time before the case is closed. Fed. R. BankR.P. 1009(a).3 However, issuing a ruling based on this uncertain contingency would violate basic constitutional principles. The doctrine of ripeness enables courts to screen out cases that seek answers to abstract or hypothetical legal questions. Gulf Pub. Co., Inc. v. Lee, 679 F.2d 44, 46 (5th Cir.1982). To determine whether an action is ripe for judicial review the court must consider (1) the fitness of the issue for judicial consideration and (2) the hardship to the parties of withholding court consideration. Nat’l Park Hospitality Ass’n v. Dep’t of the Interior, 538 U.S. 803, 808, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003). The rationale behind the ripeness doctrine is to prevent the courts, through premature adjudication, from entangling themselves in abstract disagreements, when those disagreements are premised on contingent future events that may not occur as anticipated, or indeed may not occur at all. Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 77, 113 S.Ct. 2485, 125 L.Ed.2d 38 (1993) (internal quotation marks omitted). The doctrine is likely offended in cases such as this where the plaintiff controls the future contingency. In addition, [a] party’s allegation of hardship will be found wanting if there are too many “ifs” in the asserted causal chain linking the [defendant’s] action to the alleged hardship. Caprock Plains Fed. Bank Ass’n v. Farm Credit Admin., 843 *830F.2d 840, 845 (5th Cir.1988). The mere possibility that the Debtors might amend their schedules is insufficient to permit the parties to continue litigating this matter as it presently stands.
Nonetheless, for the purpose of completeness the Court will fully consider the Debtors’ hypothetical argument with respect to § 522(h). If the Debtors were to amend Schedule C to elect the federal exemption scheme set forth in § 522(d), the Debtors would be allowed to exempt a maximum of $36,900 in their residence. 11 U.S.C. § 522(d)(1) and (m).4 In this case, the Debtors exempted $36,721 pursuant to Texas exemption laws which provide for an unlimited homestead exemption. Because the Debtors’ right to exempt property was determined on the date of their bankruptcy filing, this is the amount the Debtors could claim under § 522(d)(1). The unused portion of the Debtor’s federal homestead exemption would be $180. Section 522(d)(5) allows a debtor to exempt any type of property, but the value of such exemption may not exceed $975 plus up to $9,250 of any unused amount of the federal homestead exemption. Consequently, if the Debtors were to amend Schedule C to elect the federal exemption scheme, they would jointly be able to exempt property valued at only $2,130 ($975 + $975 + $180). Because there is no minimum exemption value within the requirements of § 522(g), it is possible that the Debtors would have standing under this scenario if the Debtors established that all five requirements set forth in In re Hamilton were met. However, § 522(j) limits a debtor’s ability to exempt such property.
Section 522(j) provides that property recovered under the avoiding powers may be exempted only to the extent that the debtor has exempted less property than allowed under subsection (b). That is, the debtor’s use of the avoiding powers does not expand the extent of exemptions. Rather, it permits the debtor to recover property that but for the transfer would have been available to exempt. If the debtor avoids a transfer of property, and the value of that property exceeds the amount that may be claimed as exempt under the applicable exemption provision, the excess value of the property would remain subject to the transfer. Presumably, the trustee would have some interest in recovering the excess value for the benefit of the estate, but in the absence of such action, the creditor would retain the right to that property.
4 Collier on Bankruptcy ¶ 552.12[5] (15 ed. rev.2006).
This result coincides with the plain language of § 522(h), the principal statute that grants a debtor limited avoidance powers of a trustee. Section 522(h) provides that a debtor may avoid a transfer of property ... or recover a setoff to the extent that the debtor could have exempted such property - 11 U.S.C. § 522(h).
This language is in sharp contrast to the all-encompassing avoidance powers held by a trustee. Once a transfer or obligation is deemed avoidable by the trustee, the entire transfer is avoided without regard to the size of claims of existing creditors whose right and powers the trustee is asserting. In re Coleman, 426 F.3d 719, 725-726 (4th Cir.2005); Abramson v. *831Boedeker, 379 F.2d 741, 748 n. 16 (5th Cir.1967)
Unlike the full avoidance powers held by a trustee, § 522(h) limits a debt- or’s avoidance power to the extent the transfer involved exempt property. In re Nielsen, 197 B.R. 665, 672 (9th Cir. BAP 1996) (plain language of § 522(h) is clear that a debtor has avoidance powers only to the extent that the debtor could have exempted the property); In re Jardine, 120 B.R. 559, 562-63 (Bankr.D.Idaho 1990) (a chapter 13 debtor does not have full unilateral avoidance powers of a trustee, and to the extent of any equity over the exemption and any prior liens, the debtor may not seek to avoid the lien as a preference under § 522(h)).
Combined, § 522(g), (h) and (j) make clear that the Debtors may avoid the transfer of the Property only to the extent that they could have exempted the Property. Because the Debtors could only exempt $2,130 in value of the Property, the excess value would remain subject to the transfer to Plaza Centro.
Conclusion
Because the Debtors have failed to establish that the Property is of a kind that they could have exempted from the estate if the trustee had avoided the transfer&emdash; one element necessary for a debtor to exercise the avoidance powers&emdash;the Debtors currently lack standing to maintain this action under § 522(h). Plaza Centro’s motion to dismiss is granted.
. The courts that have concluded that chapter 13 debtors may utilize the trustees avoidance powers rely on the legislative history of § 1303 to overcome the plain language of § 1303. See, e.g., In re Einoder, 55 B.R. 319 (Bankr.N.D.Ill.1985). More recently, however, courts have rejected such a view, relying on the plain language of the statutes. See, e.g., In re Bruce, 96 B.R. at 721. The Fifth Circuit cited In re Bruce to explain the change in position:
As compelling, practical and intensely equitable as these arguments might be, they are at bottom well-meaning forays into judicial legislation. They exceed the scope of a bankruptcy judge's role, which is to interpret and apply the statute, not to rewrite it.... Legislative history, especially floor comments, may augment but may not amend the statute’s straightforward language. Section 1303 simply does not confer standing on the debtor to pursue avoidance actions....
In re Hamilton, 125 F.3d at 297, n. 5 (quoting In re Bruce, 96 B.R. at 721).
. Essentially, the Debtors argue that a debtor may avoid a transfer pursuant to § 522(h) anytime it would have been possible for a debtor to elect the federal exemption scheme. At the hearing, the Court questioned the Debtors’ counsel if, under the Debtors' interpretation of § 522(h), there were any circumstances in which it would be impossible for a debtor to assert standing under § 522(h). Debtors' counsel did not offer any situations. The Court expressed concerns stemming from the basic tenets of statutory interpretation, noting that a statute must be interpreted so that no provision is surplusage. TRW, Inc. v. Andrews, 534 U.S. 19, 31, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001) (It is a cardinal principle of statutory construction that a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant). The Court recognizes that such situations exist. Section 522(b)(2) empowers states to prohibit their citizens from selecting the federal exemptions set forth in § 522(d). 11 U.S.C. § 522(b)(2). It appears that 34 states have elected to opt out. 4 Collier on Bankruptcy ¶ 522.02[1], n. 3 (15th ed.2006). In these states, it is not possible for a debtor to allege standing under § 522(h) solely by way of the possibility that he could later amend his exemptions to claim otherwise non-exempt property as exempt under § 522(d).
. Rule 1009 allows a debtor to amend his petition, lists, schedules or statement as a matter of course at any time before the case is closed. However, this right is not absolute. The general rule allowing the liberal amendment of exemption claims is subject to restriction where the debtor has acted in bad faith or concealed property, or where the amendment would prejudice creditors. 9 Collier on Bankruptcy, ¶ 1009.02[1] (15th ed.2006); In re Williamson, 804 F.2d 1355, 1358 (5th Cir.1986).
. Section 522(d)(1) permits a debtor to exempt his or her aggregate interest, not to exceed $18,450 in value, in real property that the debtor or a dependent of the debtor uses as a residence. 11 U.S.C. § 522(d)(1). Section 522(m) provides that the exemptions set forth in subsection (b) apply to each debtor in a joint case. 11 U.S.C. § 522(m). Thus, a husband and wife filing jointly may double the amount of the exemptions. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494179/ | MEMORANDUM OPINION
JERRY W. VENTERS, Bankruptcy Judge.
Under most circumstances, there is nothing unfair or suspect about a parent providing financial assistance to a child purchasing a home. And that appears to be all that the Defendant, Terry Hollis (“Hollis”), did in this case. He provided several loans to his daughter and her husband, Debtors Shawna and Mark Matlock (“Matlocks” or “Debtors”), to facilitate the purchase of a new home. To their credit, the Matlocks agreed to, and did in fact, repay these loans contemporaneously with or soon after they consummated the purchase of their new home. But shortly afterward, the Matlocks filed bankruptcy and, as they say in bankruptcy circles, “bankruptcy changes everything,” particularly with regard to payments debtors make to their creditors within 90 days (or one year, in some cases) before the filing of the bankruptcy. Then, depending on the circumstances, even good faith, honest attempts to repay debts may be viewed— from the perspective of other creditors who were not repaid — as unfair “preferences” which can be avoided under the Bankruptcy Code. Unfortunately for Hoi-*882lis, those circumstances are present here. The undisputed facts support a finding that the transfers totaling $29,612.60 the Debtors made to Hollis within one year of the date the Debtors filed bankruptcy are avoidable as preferences under 11 U.S.C. § 547, as alleged in Count I of the Trustee’s Complaint in this case. Therefore, the Trustee’s motion for summary judgment on Count I must be granted.
STANDARD OF REVIEW
Summary judgment is appropriate when the matters presented to the Court “show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”1 The party moving for summary judgment has the initial burden of proving that there is no genuine issue as to any material fact.2 Once the moving party has met this initial burden of proof, the non-moving party must set forth specific facts sufficient to raise a genuine issue for trial and may not rest on its pleadings or mere assertions of disputed facts to defeat the motion.3 The mere existence of a scintilla of evidence in support of the opposing party’s position will not be sufficient to forestall summary judgment.4 In ruling on a motion for summary judgment, “the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”5
BACKGROUND
The essential facts are straightforward and essentially undisputed. Where the parties disagree is the interpretation of those facts, as is often the case.
Over a period of approximately three months, Hollis loaned the Debtors a total of $29,612.60 to facilitate the purchase of a residence (“Residence”) at 3402 E. Devon-shire Drive, in St. Joseph, Missouri. On July 27, 2004, Hollis loaned the Debtors $1,500 to put an “earnest money” deposit on the Residence. On August 6, 2004, Hollis loaned them $3,356.26 to pay off a debt secured by the Debtors’ 1998 Dodge Intrepid, and on October 29, 2004, Hollis loaned the Debtors $13,000 to pay off a loan secured by the Debtors’ 2001 Jeep Cherokee.6 Apparently, UMB Bank agreed to lend Debtors the money to purchase the Residence on the condition that they pay off the loans secured by those vehicles. Finally, on October 29, 2004, Hollis loaned the Debtors $11,756.34 for the down payment on the Residence. None of these loans was memorialized in writing, and all of the loans were interest free and unsecured.
Hollis loaned the Debtors all of this money with the understanding that they would repay him with money they were expecting to get back from the sellers of the Residence for repairs that needed to be made on the Residence and from refinancing the Jeep after the closing. And aside from three smaller payments made on the August 6 loan ($356.24 on August *88313, $250 on September 17, and $250 on October 18), the Debtors did precisely that. The Debtors closed on their purchase of the Residence on October 29, 2004, and received $15,000 back from the sellers. The Debtors used all of that money (plus some) to repay Hollis the money he had loaned them for the earnest-money deposit ($1,500), for the balance of the August 6 loan ($2,500),7 and for the down payment ($11,756.34).8 On November 26, 2004, the Debtors obtained a $13,000 loan from Getz Credit Union, secured by their Jeep, and used that money to repay Hollis the $13,000 he had loaned them to pay off the debt that had previously been secured by the Jeep. The Debtors contend (and the Court accepts as true for purposes of the Trustee’s motion) that they would have repaid the $13,000 to Hollis sooner, but they couldn’t refinance the Jeep until the previous lienholder provided them the title and a lien release.
The Debtors filed for chapter 7 bankruptcy on January 18, 2005. Thus, all of the payments to Hollis described above were made within a year of the filing date.
DISCUSSION
Hollis does not dispute that the transfers totaling $29,612.60 made to him within one year of the bankruptcy petition date constitute preferential transfers under 11 U.S.C. § 547, and the Court does indeed find that they are preferential transfers. These transfers (“Transfers”) were transfers of an interest of the debtors (the Matlocks) in property (cash), on account of antecedent debts, for the benefit of a creditor (Hollis), who is an insider (Debtor Shawna Matlock’s father), made while the debtors were insolvent, made within a year of the bankruptcy petition,9 and which enabled the creditor to receive more than he would have received if the transfers had not been made.10 Hollis’s defense to the Trustee’s motion relies solely on certain statutory and judicially created exceptions to the avoidability of preferential transfers. However, the undisputed facts establish that none of those exceptions is applicable.
Contemporaneous Exchange for New Value Defense
First, Hollis contends that the October 29, 2004, $11,756.34 transfer cannot be avoided by the Trustee because it was a “contemporaneous exchange for new value” protected from avoidance under § 547(c)(1). But Hollis has not identified what “new value” he gave the Debtors in exchange for the transfer. He seems to suggest that the transaction qualifies as a *884contemporaneous exchange for new value simply because the loan and the repayment occurred on the same day. This suggestion, however, is without merit.
Section 547(c)(1) provides that a transfer which meets the elements of § 547(b) (which this transfer does) is not avoidable if the transfer was intended to be a contemporaneous exchange; was, in fact, a contemporaneous exchange; and the exchange was for new value given to the Debtor. New value, as the term is used in § 547(c)(1), “means money or money’s worth in goods, services, or new credit, or release by a transferee of property previously transferred to such transferee in a transaction that is neither void nor voidable by the debtor or the trustee under any applicable law, including proceeds of such property, but does not include an obligation substituted for an existing obligation.” 11 Hollis, however, did not give the Debtors anything in exchange for the $11,756.34, under this definition or otherwise. The $11,756.34 transfer to Hollis was a payment on an antecedent debt, and the fact that the debt was only recently antecedent, without more, does not shield it from avoidance by the Trustee.
Ordinary Course of Business Defense
Second, Hollis contends that the Transfers are not subject to avoidance because they were made in the ordinary course of business and such transfers are shielded from avoidance under § 547(c)(2). According to Hollis, the Debtors often borrowed money from him and paid him back as they had funds available, and these transfers, he argues, were no different. The Court disagrees.
Under § 547(c)(2), a preferential transfer is excepted from avoidance if the transfer was: “(1) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee; (2) made in the ordinary course of business or financial affairs of the debtor and the transferee; and (3) made according to ordinary business terms.”12 The transferee bears the burden of establishing the ordinary course defense by a preponderance of the evidence.13
In this case, the transferee — Hollis—has failed to establish that the transfers at issue meet any of the elements of § 547(c)(2). The debts were not incurred in the ordinary financial affairs of the debtor because these debts were significantly greater than any of the other debts to Hollis the Debtors had previously incurred, which ranged between $50 and $200. Moreover, the debts at issue here were incurred for the specific purpose of purchasing a house, and the Debtors have not produced any evidence to show that they were in the business or habit of purchasing houses, with or without Hollis’s assistance.
The disparity in purpose and amounts between the previous debts and those at issue here also precludes the repayment of those debts from qualifying as transfers made in the ordinary course of financial affairs of the Debtors and Hollis.14
Finally, the Transfers were not made according to “ordinary business terms.” To establish the “ordinary busi*885ness terms” prong of § 547(c)(2), a defendant must show that the terms of a transfer were consistent with the practices and standards of an industry. Because the Transfers occurred between family members, the Court concedes that demonstrating the objective ordinariness might be more difficult. However, Hollis has offered absolutely no evidence on this issue, so the Court can summarily conclude that he has not satisfied his burden of showing that the Transfers were made according to ordinary business terms. Furthermore, it is unlikely that such a showing would have been possible in light of the fact that the loans Hollis made to the Debtors were interest free and were to be repaid upon the occurrence of “extraordinary” events, i.e., the purchase of real estate where significant funds were due back from the sellers and the encumbering of a vehicle where the vehicle had only become unencumbered through the application of the proceeds from the loan being repaid.
Earmarking Defense
Third, Hollis contends that the Trustee cannot avoid the November 26, 2004, $13,000 transfer because the “earmarking” defense applies. The earmarking defense is a judicially created exception to § 547 which derives from the statutory requirement that a transfer, in order to be deemed preferential, must be “of an interest of the debtor in property.” 15 Generally, it involves a new creditor swapping places with an existing creditor by paying off the existing creditor with funds “earmarked” for the payoff of a certain debt. Three elements must be present for the doctrine to apply: (1) the existence of an agreement between a lender and a debtor that new funds will be used to pay a specific antecedent debt, (2) the agreement is performed according to its terms, and (3) the transaction viewed as a whole does not result in any diminution of the estate.16
Hollis argues that the doctrine applies here because: 1) he had an agreement with the Debtors that he would lend them money to pay off the loan secured by their Jeep and they would pay him back with money they would get from refinancing the Jeep after they closed on the purchase of the Residence; 2) the agreement was performed according to its terms, except for a slight delay in refinancing the Jeep because of title issues; and 3) the transaction viewed as a whole did not diminish the estate because before and after the transaction the debtors owed a $13,000 debt secured by their Jeep.
Essentially, Hollis wants to collapse the October 29 and November 24 transactions so that the only facts considered are that the Jeep was secured by a $13,000 debt then and secured by a $13,000 debt now. But that characterization of the transaction ignores the fact that the Jeep was unsecured between those dates and that Hollis was paid in full on an unsecured debt, whereas other unsecured creditors were not paid at all. Moreover, the Court is simply not willing to extend Heitkamp’s instruction to view a transaction “as a whole” to encompass transactions occurring nearly a month before the transfer sought to be protected by the earmarking doctrine occurs. So the fact that the Debtors used the $13,000 Hollis loaned them on October 29, 2004, to pay off the loan secured by the Debtors’ Jeep is irrelevant to the analysis of the Debtors’ transfer of $13,000 to Hollis on November 24, 2004. When Hollis loaned the Debtors *886$13,000 on October 29, he became an unsecured creditor, plain and simple. Hollis’s knowledge of the use of the loan proceeds and the source of funds to repay him did not change his status as an unsecured creditor.17
Since Hollis was an unsecured creditor, the November 24 transfer diminished the estate by $13,000 because the Debtors obtained those funds by granting Getz Credit Union a security interest in their recently unencumbered Jeep. The law on this point is clear: the earmarking doctrine does not apply when a security interest is given for funds to pay an unsecured debt.18 Before the $13,000 transfer to Hollis, the Debtors had an unencumbered vehicle and a $13,000 interest-free, unsecured debt to Hollis. After the transfer, the Debtors’ Jeep was encumbered by a $13,000 interest-bearing, secured debt to Getz Credit Union.
Award of Prejudgment Interest
The Bankruptcy Code does not contain a provision controlling the award of prejudgment interest. Therefore, federal common law determines whether to apply prejudgment interest to any award under a federal statute.19 Under federal common law, the prevailing party is enti-tied to interest on his recovery, from the date of demand, where the amount of the recovery is liquidated and ascertainable.20 “In bankruptcy proceedings, the courts have traditionally awarded prejudgment interest to a trustee who successfully avoids a preferential or fraudulent transfer from the time demand is made or an adversary proceeding is instituted unless the amount of the contested payment was undetermined prior to the bankruptcy court’s judgment.”21 With regard to prejudgment interest on a preference claim, Collier states, “Prejudgment interest on a preferential transfer is recoverable from the date the transfer was demanded, unless there is a sound reason otherwise.”22
The amount of the Transfers was easily ascertainable from the time the Trustee first made demand on the Defendant. And the Defendant has not given the Court any cognizable23 reason why prejudgment interest should not be awarded. Therefore, the Court will award the Trustee prejudgment interest on 29,612.60 from January 5, 2006, to the date of collection, at the rate set forth in 28 U.S.C. § 1961, which is currently 5.06%.
CONCLUSION
For the reasons set forth above, the Court finds that the 29,612.60 transferred *887by the Debtors to the Defendant, Terry Hollis, within one year of the date the Debtors filed bankruptcy is avoidable as a preference under 11 U.S.C. § 547. Accordingly, the Court will grant summary judgment in favor of the Trustee on Count I of the Trustee’s complaint and enter a judgment against Terry Hollis in the amount of 29,612.60, with interest accruing as of the date of demand, January 5, 2006, at the rate set forth in 28 U.S.C. § 1961. A separate order consistent with this Memorandum Opinion shall be entered pursuant to Fed. R. Bankr.P. 9021.
. Fed.R.Civ.P. 56(c); Fed. R. Bankr.P. 7056; Celotex v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).
. Adickes v. S.H. Kress & Co., 398 U.S. 144, 161, 90 S.Ct. 1598, 1611, 26 L.Ed.2d 142 (1970).
. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (stating that the party opposing the motion “must do more than simply show that there is some metaphysical doubt as to the material facts”).
. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986).
. Id., 477 U.S. at 255, 106 S.Ct. 2505.
. The loan secured by the Jeep was owed to WFS Financial (“WFS”).
. The Debtors stated in their response that the balance of the August 6 loan as of October 29 was $2,560, but that is incorrect. Assuming the Debtors accurately stated the amount of the payments previously made on the August 6 loan, the balance as of October 29, which was presumably paid off by the Debtors with the funds they received from the sellers of the Residence, was $2,500.
. The Debtors admit that they paid Hollis all of this money, but the total amount paid to Hollis on October 29 exceeds the $15,000 the Debtors received from the sellers by $756.34. It is unclear, although ultimately irrelevant for purposes of the Court’s decision, where the Debtors came up with this money.
. The Trustee alleges that all of the transfers at issue were made within ninety days of the bankruptcy petition, but that is not true. The transfers made to Hollis on August 13, 2004 and September 17, 2004 were made over ninety days prior to the petition. However, because Hollis is an insider under the terms of § 101(31)(A)(i), those transfers are still preferences because they occurred within one year of the bankruptcy petition,
. 11 U.S.C. § 547(b) (setting forth the elements of a preferential transfer).
. 11 U.S.C. § 547(a)(1).
. 11 U.S.C. § 547(c)(2).
. Jones v. United Sav. & Loan Ass’n (In re USA Inns of Eureka Springs), 9 F.3d 680, 682 (8th Cir.1993) (citations omitted).
. See In re McElroy, 228 B.R. 791, 795 (Bankr.M.D.Fla.1999) (disparity in payment amounts precludes finding that transfers are made in the ordinary course); In re Vunovich, 74 B.R. 629, 631 (Bankr.D.Kan.1987) (same).
. In re Libby International, Inc., 240 B.R. 375, 377 (Bankr.W.D.Mo.1999).
. Id.
. The only application the earmarking doctrine might have to the October 29 transaction would be if the Trustee sued WFS (the former lender with a security interest in the Jeep). In that situation, Hollis would be the new lender and WFS would be the old lender.
. Kaler v. Community First Nat’l Bank (In re Heitkamp), 137 F.3d 1087, 1089 (8th Cir.1998).
. In re Broadview Lumber Co., Inc., 168 B.R. 941, 965 (Bankr.W.D.Mo.1994).
. Kaufman v. Tredway, 195 U.S. 271, 273, 25 S.Ct. 33, 34, 49 L.Ed. 190 (1904); see also Robinson v. Watts Detective Agency, Inc., 685 F.2d 729, 741 (1st Cir.1982).
. In re Broadview Lumber, Inc., 168 B.R. at 965.
. 5 Collier on Bankruptcy ¶ 547.15, p. 547-132 (15th Ed. rev.2006).
. Hollis suggests that an award of pre-judgment interest would be inappropriate here because the Trustee did not engage in meaningful settlement discussions. Settlement negotiations, or the lack thereof, are not relevant to the Court’s determination of whether to award prejudgment interest, especially without evidence that the Trustee used the settlement negotiations to unduly delay the adjudication of this matter. | 01-04-2023 | 11-22-2022 |
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