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https://www.courtlistener.com/api/rest/v3/opinions/8488574/	TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN JUDGMENT RENDERED NOVEMBER 22, 2022 NO. 03-21-00227-CV Roger Borgelt, Mark Pulliam, Jay Wiley, and The State of Texas, Appellants v. Austin Firefighters Association, IAFF Local 975; City of Austin; and Spencer Cronk, in his Official Capacity as the City Manager of the City of Austin, Appellees APPEAL FROM THE 419TH DISTRICT COURT OF TRAVIS COUNTY BEFORE JUSTICES BAKER, TRIANA, KELLY AFFIRMED -- OPINION BY JUSTICE TRIANA This is an appeal from the judgment signed by the trial court on March 24, 2021. Having reviewed the record and the parties’ arguments, the Court holds that there was no reversible error in the trial court’s judgment. Therefore, the Court affirms the trial court’s judgment. The appellants shall pay all costs relating to this appeal, both in this Court and in the court below.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488551/	USCA11 Case: 21-13886 Date Filed: 11/22/2022 Page: 1 of 8 [DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 21-13886 Non-Argument Calendar ____________________ CESAR JEAN RENAUD, Petitioner, versus U.S. ATTORNEY GENERAL, Respondent. ____________________ Petition for Review of a Decision of the Board of Immigration Appeals Agency No. A209-385-888 ____________________ USCA11 Case: 21-13886 Date Filed: 11/22/2022 Page: 2 of 8 2 Opinion of the Court 21-13886 Before JILL PRYOR, LAGOA, and BRASHER, Circuit Judges. PER CURIAM: Cesar Renaud, proceeding pro se before this Court, seeks re- view of the Board of Immigration Appeals’ (“BIA”) order denying his motion to reconsider its summary dismissal of his appeal or re- open his removal proceedings. After careful review, we dismiss in part and deny in part Renaud’s petition. I. Renaud, a native and citizen of Haiti, entered the United States without documentation in 2016. He was immediately issued a notice to appear, charging him with being removable as an immi- grant who, at the time of application for admission, was not in pos- session of a valid entry document. See 8 U.S.C. § 1182(a)(7)(A)(i)(I). Renaud, through counsel, conceded removability and sought asy- lum, withholding of removal, and protection under the United Na- tions Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (“CAT”). In his application and during a hearing before an immigra- tion judge (“IJ”), Renaud asserted that, while living in Haiti in 2005, he worked for a political campaign by providing would-be voters with money for transportation to polling places. He asserted that because of that activity he was brutally attacked by members of an opposition party. Thereafter, he fled to the Dominican Republic and, eventually, the United States. USCA11 Case: 21-13886 Date Filed: 11/22/2022 Page: 3 of 8 21-13886 Opinion of the Court 3 The IJ denied Renaud’s application for asylum, withholding of removal, and CAT relief. The IJ found that Renaud was not cred- ible, citing multiple internal inconsistencies in Renaud’s state- ments, significant discrepancies between Renaud’s and his spouse’s hearing testimony, and the lack of corroborating evidence of Re- naud’s political work or injuries. Given that Renaud was not cred- ible, the IJ concluded that he had failed to sustain his burden of proof to show past persecution or a well-founded fear of future per- secution and thus was ineligible for asylum. The IJ further con- cluded that Renaud could not meet his higher burden of showing eligibility for withholding of removal and had not provided any ev- idence that he would be tortured at the hands or acquiescence of the Haitian government such that he would be entitled to CAT re- lief. New counsel filed a notice of appearance to represent Re- naud in an appeal before the BIA and filed a notice of appeal of the IJ’s decision. In the counseled notice of appeal, Renaud stated that the IJ erred in denying him asylum based on past persecution or a well-founded fear of future persecution. He asserted that his testi- mony was credible. Also in the notice of appeal, Renaud indicated by checking a “Yes” box that he intended to file a written brief or statement. Below the box the notice stated: WARNING: . . . If you mark “Yes[,]” . . . you will be expected to file a written brief or statement after you receive a briefing schedule from the Board. The Board may summarily dismiss your appeal if you do USCA11 Case: 21-13886 Date Filed: 11/22/2022 Page: 4 of 8 4 Opinion of the Court 21-13886 not file a brief or statement within the time set in the briefing schedule. AR at 34. 1 The BIA issued a briefing schedule, but Renaud did not file a brief, and the government moved for summary affirmance. The BIA summarily dismissed Renaud’s appeal, citing Renaud’s failure to file a brief. Renaud did not file a timely petition for review of the summary dismissal. Renaud again retained new counsel, who filed with the BIA a one-page motion for reconsideration and to reopen removal pro- ceedings. In the motion, Renaud stated that he paid his previous counsel for a brief and “was being told the brief was done,” despite that it was not in fact done. Id. at 5. Renaud stated that he had since “requested clarification” from his former counsel, who incorrectly “thought the fee was not paid.” Id. Renaud requested time to sub- mit a brief to the BIA. In an affidavit attached to the motion, Re- naud stated that upon receiving notice of the BIA’s dismissal of his appeal, he “spoke with [counsel’s] office and found out [the brief] had not been submitted.” Id. at 7. He also stated that his new coun- sel had spoken with his previous attorney. The BIA denied Renaud’s motions. The BIA concluded that although Renaud was raising a claim of ineffective assistance of counsel based on counsel’s failure to file a brief, he had failed to 1 “AR” refers to the Administrative Record. USCA11 Case: 21-13886 Date Filed: 11/22/2022 Page: 5 of 8 21-13886 Opinion of the Court 5 comply with Matter of Lozada, 19 I. & N. Dec. 637 (B.I.A. 1988), which set forth procedural requirements for asserting such a claim. Renaud, now pro se, has petitioned this Court for review. II. We review the BIA’s denial of a motion to reopen removal proceedings and denial of a motion for reconsideration for an abuse of discretion. Zhang v. U.S. Att’y Gen., 572 F.3d 1316, 1319 (11th Cir. 2009) (motion to reopen); Assa’ad v. U.S. Att’y Gen., 332 F.3d 1321, 1341 (11th Cir. 2003) (motion for reconsideration). “The BIA abuses its discretion when it misapplies the law in reaching its de- cision,” or when it fails to follow its own precedents “without providing a reasoned explanation for doing so.” Ferreira v. U.S. Att’y Gen., 714 F.3d 1240, 1243 (11th Cir. 2013). We review our subject matter jurisdiction de novo. Amaya- Artunduaga v. U.S. Att’y Gen., 463 F.3d 1247, 1250 (11th Cir. 2006). We lack jurisdiction to consider a claim raised in a petition for re- view “unless the petitioner has exhausted his administrative reme- dies with respect thereto.” Id. A petitioner fails to exhaust his ad- ministrative remedies with respect to a particular claim when he does not raise that claim before the BIA. Id. We construe pro se briefs liberally. Timson v. Sampson, 518 F.3d 870, 874 (11th Cir. 2008). USCA11 Case: 21-13886 Date Filed: 11/22/2022 Page: 6 of 8 6 Opinion of the Court 21-13886 III. In his petition for review, Renaud argues that the BIA erred in denying his motions to reconsider and to reopen. 2 His argument focuses on his failure file a timely brief in support of his appeal from the denial of his application for asylum, withholding of removal, and CAT relief. Specifically, he contends that he could not timely file a brief “because of pandemic uncertainty and requirements.” Petitioner’s Br. at 4. 3 So, he argues, he should have been permitted to file a brief belatedly. But Renaud’s motions argued that he should be permitted to file a belated brief for a different reason— his counsel’s failure to file a brief, unbeknownst to Renaud. Renaud never made the argument about the pandemic in his motions be- fore the BIA. Thus, we lack jurisdiction to consider it and must dis- miss his petition for review insofar as it is based on this argument. Amaya-Artunduaga, 463 F.3d at 1250. 2 Renaud also seeks to challenge the BIA’s summary dismissal of his appeal for failure to file a brief. We lack jurisdiction to consider his challenge because he failed to timely file a petition for review from the BIA’s summary dismissal order. See Avila v. U.S. Att’y Gen., 560 F.3d 1281, 1285 (11th Cir. 2007); 8 U.S.C. § 1252(b)(1) (requiring a petition for review to be filed within 30 days). We therefore dismiss this portion of Renaud’s petition for review. 3 We note that the BIA’s briefing schedule required that Renaud file a brief by November 25, 2019, before COVID-19 began to disrupt life in the United States. See generally Ga. Ass’n of Latino Elected Officials, Inc. v. Gwinnett Cnty. Bd. of Registration & Elections, 36 F.4th 1100, 1109 (11th Cir. 2022) (cit- ing the “public health crisis surrounding the spread of COVID-19 in early 2020”). USCA11 Case: 21-13886 Date Filed: 11/22/2022 Page: 7 of 8 21-13886 Opinion of the Court 7 Renaud’s brief does not challenge the BIA’s denial of his mo- tion to reconsider and reopen removal proceedings based on its conclusion that he failed to meet the procedural requirements for an ineffective-assistance-of-counsel claim. But even if we were to liberally construe his petition as challenging the BIA’s conclusion, we would find Renaud’s challenge to be meritless. A motion to re- open based on alleged ineffective assistance of counsel must satisfy three procedural requirements. Matter of Lozada, 19 I. & N. Dec. 637, 639 (B.I.A. 1988). First, the motion must be supported by an affidavit detailing the agreement with counsel and describing the ways in which counsel’s performance was defective. Id. Second, counsel must be informed of the ineffective-assistance claim and given an opportunity to respond. Id. Third, the motion should ei- ther reflect that a complaint was filed with an appropriate discipli- nary body or explain why such a complaint was not filed. Id. We have held that the BIA may require a movant to satisfy this three- part test. Dakane v. U.S. Att’y Gen., 399 F.3d 1269, 1274 (11th Cir. 2005). Even assuming Renaud’s motion and accompanying affida- vit satisfied the first two of these requirements, Renaud did not in- dicate that he had filed a complaint against his former counsel or explain why no such complaint had been filed. Thus, the BIA’s con- clusion that he had failed to satisfy Matter of Lozada was not an abuse of discretion. We therefore deny in part Renaud’s petition for review. USCA11 Case: 21-13886 Date Filed: 11/22/2022 Page: 8 of 8 8 Opinion of the Court 21-13886 IV. For the above reasons, we dismiss Renaud’s petition for re- view in part and deny it in part. PETITION DISMISSED IN PART, DENIED IN PART.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494672/	MEMORANDUM-DECISION AND ORDER DIANE DAVIS, Bankruptcy Judge. Before the Court are separate adversary proceedings initiated by Plaintiff Signature Bank (“Signature” or “Plaintiff’) against Debtor seeking a denial of Debtor’s discharge pursuant to section 727(a)2 of the 547United States Bankruptcy Code3 and to except from Debtor’s discharge a pre-petition judgment debt (the “Debt”) owed by Debtor to Signature in the approximate amount of $11,587,220.62 pursuant to § 523(a).4 These actions arise out of a commercial banking relationship between the parties that commenced in 2005 and slowly unwound beginning in 2007, culminating in a state court judgment5 and ultimately the present litigation before this Court. On consent of the parties, Signature’s adversary proceedings were consolidated for purposes of trial and decision.6 The consolidated trial in these matters spanned two and a half days, and after consideration of the arguments of counsel, the documentary and testamentary evidence presented, and post-trial memoranda of law, this Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52, made applicable here by Federal Rule of Bankruptcy Procedure 7052. For the reasons set forth herein, Signature’s Discharge and Dischargeability Complaints are dismissed. I. JURISDICTION This Court has jurisdiction over the parties and subject matter of these adversary proceedings pursuant to 28 U.S.C. §§ 1334(a) and 157(a) and (b). These are core proceedings which this Court may hear and determine pursuant to 28 U.S.C. §§ 15700(2)00 and (J). II. PROCEDURAL HISTORY7 A. The Main Case On April 25, 2008, Debtor filed a voluntary petition for bankruptcy relief under Chapter 11 of the Bankruptcy Code.8 Signature moved immediately thereafter for appointment of a trastee pursuant to § 11049 and for stay relief pursuant to § 362(d).10 Debtor, through his former counsel, filed opposition to both motions.11 548Prior to adjudication of its first § 362(d) motion, Signature filed a second § 362(d) motion (the “Second § 362(d) Motion”),12 which Debtor did not directly oppose. Rather, Debtor voluntarily moved pursuant to § 1112(a) to convert his case from one under Chapter 11 to one under Chapter 7 of the Bankruptcy Code,13 which this Court granted by Order issued August 12, 2008.14 After a hearing held on Signature’s Second § 362(d) Motion on September 16, 2008, this Court granted stay relief permitting Signature to foreclose on certain parcels of real property owned by Debtor.15 On December 29, 2008, Christian H. Dribusch, Esq., appointed Chapter 7 trustee of Debtor’s estate (“Trustee”), moved pursuant to Federal Rule of Bankruptcy Procedure 9019(a) to settle certain third party claims held by the estate and to sell the estate’s interest in certain assets to Signature for $25,000.00 (the “9019 Motion”).16 By Order issued February 20, 2009, this Court granted the 9019 Motion.17 Through the post-petition sale of certain assets, Signature was able to realize approximately $1,000,000.00, thereby reducing the Debt at issue. Debtor does not dispute that Signature is owed the amount claimed and in fact listed Signature on Schedule D of his petition as a secured creditor holding a claim in the amount of $11,000,000.00.18 B. Adversary Proceedings 1 and 2 On May 25, 2008, the Court issued a Second Amended Scheduling Order.19 In accordance with the Court’s directives therein, the parties timely submitted pretrial statements and exhibit lists.20 Also as required by the Second Amended Scheduling Order, the parties filed written objections to each other’s proposed exhibits and witnesses,21 and a Joint Stipulation of Facts.22 The consolidated trial took place on October 19, 2010,23 November 29, 5492010,24 and November 30, 2010.25 As an initial matter, the Court heard and ruled upon the parties’ numerous evidentiary objections, with the exception of a select few, which were taken under advisement.26 At the conclusion of trial, Debtor moved to dismiss Signature’s complaints in their entirety based upon Signature’s alleged failure to prove material elements of its various claims.27 The Court advised the parties that the matter would be reserved for decision pending the Court’s receipt of post-trial submissions.28 The Court directed the parties to simultaneously file post-trial memoranda of law including proposed findings of fact and conclusions of law on or before January 21, 2011. Signature and Debtor each filed post-trial submissions on January 21, 2011.29 On March 10, 2011, Signature moved to amend the complaint in Adversary Pro- ceeding 1 to add a § 523(a)(6) cause of action based upon the proof adduced at trial.30 Debtor filed written opposition to Signature’s motion on March 10, 2011,31 and the Court heard oral argument on this limited matter on March 15, 2011. By Order issued on March 17, 2011, the Court denied Plaintiffs Rule 15(b) Motion.32 On July 25, 2011, Signature moved to supplement the trial record with respect to its § 523(a)(2)(A) claim based upon newly discovered evidence unearthed in connection with a lawsuit by one of Debtor’s former lenders against Signature over the relative priority of their respective security interests and rights to collateral proceeds.33 Debtor also opposed this post-trial motion.34 Following a hearing on August 16, 2011, the Court issued an order denying Plaintiffs Rule 59(a) Motion.35 Adversary Proceedings 1 and 2, therefore, were ripe for decision as of August 18, 2011. 550III. SIGNATURE’S ABANDONMENT OF MULTIPLE CLAIMS The Court here is compelled to depart from its usual format of rendering its conclusions of law after its factual findings because it is apparent from the trial and post-trial record that Signature abandoned seven of the eight claims set forth in its Discharge and Dischargeability Complaints, thereby leaving the Court to decide only one claim under § 523(a)(2)(A). Signature initially sought relief under §§ 523(a)(2)(A), (a)(2)(B), (a)(4), and 727(a)(2)(A), (a)(2)(B), (a)(4)(A), (a)(5), and (a)(7). Plaintiffs Memorandum, however, presents proposed conclusions of law only with respect to § 523(a)(2)(A) and (a)(6).36 Plaintiff did not therein argue, or even reference, any of the other original claims asserted. Because the plaintiff bears a heavy burden of proof in discharge and discharge-ability litigation, this Court agrees with the line of cases holding that a plaintiffs failure to argue the applicability of certain causes of action in a post-trial brief may result in the abandonment of such claims and, hence, their removal from the court’s consideration.37 In this case, following a lengthy trial that included approximately a day and a half of testimony from Debtor, Signature has neither submitted proposed conclusions of law nor set forth specific elements and corresponding offers of proof with respect to any claims other than § 523(a)(2)(A). Signature did make passing references to the existence of its § 523(a)(4) claim in its Rule 15(b) Motion,38 but those references were followed by Signature’s concession that the evidence it has submitted may not establish embezzlement under § 523(a)(4).39 Under the circumstances, the Court concludes that Signature has abandoned all claims for relief other than § 523(a)(2)(A) and, hence, the Court’s consideration is now limited to the same. IV. FACTUAL FINDINGS40 As is typical in many cases brought under § 523(a)(2)(A), the parties in the present case focused on two elements: (1) whether Debtor acted with the requisite intent to deceive Signature; and (2) whether Signature actually relied upon false representations made by Debtor. The Court has given careful consideration to each party’s respective proposed findings of fact and conclusions of law, which for obvious reasons portray markedly differing accounts of their dealings with one another. With these two key elements in mind, the Court, drawing from the evidence presented at trial, the demeanor of the witnesses, and the complete record developed by the parties in the Main Case and in connection with this litigation, makes the following findings of fact. A. Debtor’s Background 1. Debtor is an individual debtor residing in the state of New York, having an 551address at 51 Parker Boulevard, Monsey, New York.41 2. Debtor holds an MBA from the University of British Columbia in finance, organizational behavior, and international finance. He has held various positions during his career as a consultant for the Canadian government, hotel entrepreneur, banker, and, for the past twenty years, owner of a multi-corporation Cholov Yisroel kosher dairy business.42 3. Debtor testified that the Cholov Yisroel kosher dairy business requires constant rabbinic supervision during the milking process of kosher cows and adherence to strict kosher laws at all times during farming operations.43 In order to obtain raw materials for kosher dairy products, Debtor contracted with kosher farms in upstate New York.44 4. Debtor started the business in 1983 under the name of Ahava Dairy Product Corporation (“Ahava Dairy”), which was a distributor of dairy products until approximately 2000 or 2001.45 5. On October 27, 1999, Debtor formed Ahava Food Corporation (“AFC”), a New York corporation, which had its principal place of business at a large industrial facility located at 110 Beard Street, Brooklyn, New York (“110 Beard”).46 Debtor started AFC and purchased 110 Beard with funding from the New York City Industrial Development Agency (“IDA”) under an Empire State Development grant aimed at manufacturing and building development. At that time, AFC received approximately $10,000,000.00 in grant monies as a manufacturer and distributor of dairy, juices, turkey imports, canned items, and other kosher products.47 6. Debtor testified that in the formative years of the business, there were two manufacturing facilities. 110 Beard housed a cheese aging and manufacturing operation and, in 1996, Debtor formed Lewis County Dairy Corporation (“LCD”),48 a New York corporation, which had its principal place of business at 7705 State Route 812, Lowville, New York (the “Lowville Facility”).49 The Lowville Facility was initially used only to bottle milk and make yogurt. By 2001, however, all manufacturing had been moved to the Lowville Facility.50 After 2001 or 2002, LCD was operating as a nonprofit manufacturing corporation that sold its products at cost exclusively to AFC, which in turn profited upon distribution.51 7. On April 5, 2000, Debtor formed Yoni Realty, LLC (‘Toni”), a New York limited liability company, which had its principal place of business at 110 Beard.52 8. On March 8, 2000, Debtor’s brother, Fariborz Banayan (“Fariborz”), formed Ahava of California (“AOC”), a limited liability company with its principal place of business at 908 Rose Avenue, Venice, California.53 AOC operated a kosher distribu552torship. Debtor testified that at the time of formation, his brother was the managing member and he held a fifty percent membership interest. According to Debt- or, AOC became a “major” sub-distributor of AFC.54 9. In 2004, Debtor formed St. Lawrence Food Corporation (“SLF”), a New York corporation, which had its principal place of business at 30 Main Street, Ogdensburg, New York (the “Ogdensburg Facility”).55 Debtor purchased the Ogdensburg Facility through a bankruptcy sale and began using the cheese plant to manufacture hard cheeses and whey protein concentrate.56 SLF was also operating as a nonprofit manufacturing corporation that sold its products at cost exclusively to AFC, which in turn profited upon distribution.57 10. Prior to 2005, Debtor financed AFC, LCD, and SLF (collectively, the “Ahava Companies”) through various lenders, including Commerce, Merrill Lynch, and Rochester Funding.58 B. The Signature Loan 11. Robert Bloch (“Bloch”), Signature’s main witness, holds a BA in economics from Cornell University. He joined Chemical Bank in 1987, where he completed management and credit training and eventually held positions as a credit analyst and relationship manager in the middle market banking group. He joined Fleet Bank (“Fleet”) in 1996 as a relationship manager in the mid-corporate banking group. While at Fleet, he was promoted to team leader of a middle market banking group and he ultimately ran a corporate banking group in Manhattan. In 2004, Bloch joined Signature as a Group Director and Senior Vice President. In this role, Bloch is responsible for building Signature’s clientele and managing those relationships.59 12. Bloch testified that he first met Debtor between 2000 and 2002 when he was working for Fleet. He toured 110 Beard while Fleet was considering Debtor as a potential client.60 He was reintroduced to Debtor in 2005 by a loan broker and through Signature put together a financing package to refinance the existing working capital bank, which was Merrill Lynch.61 13. During 2005 loan negotiations between Debtor and Signature, Debtor represented AFC and Bloch was the point person on behalf of Signature.62 14. On or about August 22, 2005, Signature entered into a Master Credit Facility Agreement and various loan documents (collectively, the “Credit Agreement”) with Debtor, the Ahava Companies, and Yoni (collectively, the “Obligors”).63 Pursuant to the Credit Agreement, Signature made a secured loan to AFC in order to provide operating capital in the amount of $7,500,000.00 (the “Loan”). The Loan was comprised of a term loan in the amount of $2,000,000.00 (“Facility A”) and a working capital revolving credit in the amount of $5,500,000.00 (“Facility B”). Pursuant to 553the Credit Agreement, the Ahava Companies were scheduled to make both a monthly payment on Facility A and a monthly interest only payment on Facility B. 15. Debtor testified that the Credit Agreement was prepared in its entirety by Signature’s attorneys based on information provided by Debtor and obtained by Signature during the course of its due diligence.64 Debtor’s recollection was that he actually signed the document two to three weeks prior to the closing date of the Loan.65 16. The Credit Agreement contained numerous representations and warranties made by the Obligors. These representations and warranties were set forth in Section III of the Credit Agreement and included, inter alia, that: (1) under Section 3.03 titled “Financial Condition,” sub-paragraph (a), all financial statements furnished by Debtor to Signature in connection with the Loan “present fairly and accurately the financial condition of such Obligor as of the dates of the financial statements, and between the date of said statements and the date hereof, no material adverse change in the financial condition, the business or the operations of any of the Obligors has occurred;” (2) under Section 3.03, subparagraph (b), “[t]here is no obligation or liability, contingent or otherwise of any of the Obligors which is material in amount and which is not reflected in the financial statements” rendered; (3) under Section 3.05 titled “Title to Properties,” “[e]ach of the Obligors have good and valid title to the properties and assets reflected on the financial statements referred to in Section 3.03(a). All such properties and assets are free and clear of mortgages, pledges, liens, charges and other encumbrances ...(4) under Section 3.06 titled “Litigation,” “[o]ther than as provided herein, there are no actions, suits or proceedings ... which involve any of the transactions contemplated herein or which, if adversely determined against one or more of the Obligors, would result in any materially adverse change in the business, operations, prospects, properties or assets or in the condition, financial or otherwise, of one or more of the Obligors ...;” and (5) under Section 3.11 titled “Subsidiaries/Affiliates,” “[t]here is no Subsidiary or Affiliate of any Obligor other than as set forth on Schedule 3.11.”66 17. The Credit Agreement also contained numerous affirmative covenants made by the Obligors. These affirmative covenants were set forth in Section V of the Credit Agreement and included, inter alia, that each of the Obligors shall: (1) under Section 5.01 titled “Existence, Properties, etc.,” subparagraph (a), “[d]o or cause to be done, all things necessary to preserve and keep in full force and effect the existence of each of the Obligors (other than [Debtor]) as a corporation or limited liability company (as applicable);” (2) under Section 5.01, subparagraph (b), “comply with all ... material contractual obligations;” (3) under Section 5.01, sub-paragraph (c) “preserve all of its property used or useful in the conduct of its business and keep the same as required under the Security Agreement and otherwise in good repair, working order and condition ...;” and (4) under Section 5.05 titled “Notice of Adverse Change,” “[p]romptly notify [Signature] in writing of (a) any change in the business, operations or financial condition of any Obligor ..., and (b) any information which indicates that 554any financial statement delivered pursuant to this Agreement, fails, to any material extent, to present fairly the financial condition and results of operation or other information purported to be presented therein, disclosing the nature thereof.”67 Sections 5.06 titled “Notice of Default” and 5.07 titled “Litigation Notice” also required each of the Obligors to provide Signature with written notice of an event of default as defined within the Credit Agreement and with written notice of any action, suit, or proceeding that would, if determined against one or all of them, materially impact the right or ability of any of the Ahava Companies to carry on its respective business substantially as conducted in 2005, respectively.68 18. The Credit Agreement also contained numerous negative covenants made by each of the Obligors. These negative covenants were set forth in Section VI and included, inter alia, that each of the Obligors shall not: (1) under Section 6.02 titled “Sale of Assets, Consolidation, Merger, etc.,” “(i) sell, lease transfer or otherwise dispose of any of [their] properties or assets ... or (iv) create or acquire any Subsidiary or Affiliate” without such subsidiary or affiliate becoming a guarantor of the Loan and obligations imposed by the Credit Agreement; (2) under Section 6.06 titled “Loans and Investments,” “lend or advance money, credit or property to any person, or invest in ... or purchase or repurchase stock, other securities, or partnership interests, other equity or indebtedness;” (3) under Section 6.07 titled “Nature of Business,” “[c]hange or alter the nature of its business;” and (4) under Section 6.12 titled “Sale and Leaseback,” “[e]nter into any agreement, directly or indirectly, with any Person whereby it shall sell or transfer any property ... if at the time of such sale or disposition it intends to lease or otherwise acquire the right to use or possess ... such property or like property for a substantially similar purpose.”69 19. On or about August 22, 2005, in connection with the Credit Agreement, the Obligors signed a Joint and Several Guarantee of Payment (“Joint Guarantee”) whereby they agreed to be jointly and severally liable for all future and past indebtedness of AFC to Signature.70 20. On or about August 22, 2005, in connection with the Credit Agreement, the Ahava Companies, Yoni and Signature executed a Security Agreement covering all obligations owed by the Ahava Companies and Yoni to Signature.71 The Security Agreement granted Signature a first priority security interest in all of the assets of the Ahava Companies, including, inter alia, all personal assets, accounts receivable, general intangibles, deposit accounts, securities and investment property. 21. Signature filed UCC statements with the New York Department of State in 2005.72 22. The Loan was also secured by personal guarantees given by Debtor and his wife, Ana Banayan (“Ana”), on or about August 22, 2005. Debtor and Ms. Banayan personally guaranteed all of the obligations of the Ahava Companies and Yoni, including the performance of all representations, warranties, and covenants in the Credit Agreement.73 55523. Prior to entering into the Credit Agreement and the related loan documents, Signature conducted extensive due diligence in connection with Debtor and the Ahava Companies,74 which was paid for by Debtor.75 24. Signature reviewed at least three years of historical financial statements for each of the Ahava Companies,76 a 2004 financial statement for Yoni,77 and a Personal Financial Statement of Debtor, dated February 2005 (the “2005 Personal Financial Statement”).78 25. Signature also reviewed numerous internal corporate documents of the Ahava Companies and hired an independent third-party to review and test the performance of the Ahava Companies’ accounts receivable.79 Specifically, Signature focused upon accounts receivable aging and concentration, the latter of which revealed a minimized credit risk as there was no receivable that averaged in excess of $50,000.00 to $70,000.00 at any point in time.80 Based on the information provided by Debtor, Signature determined that the Ahava Companies comprised an “integrated business” with both manufacturing and distribution components.81 As such, Signature evaluated the Ahava Companies as “a consolidated entity” with consolidated net sales to unrelated third-parties being approximately $24,000,000.00 to $30,000,000.00 annually.82 Debtor advised Signature that AFC sold its products to several hundred customers, including supermarkets and bodegas, in the metropolitan New York City area and elsewhere on the east coast of the United States.83 Signature’s own review of documents relating to the Ahava Companies’ accounts receivable led Signature to conclude that an eighty percent advance rate against eligible receivables would be appropriate and that the distribution of receivables was adequate because of the fact that there was no single receivable in excess of $50,000 to $70,000 at any given time.84 26. Signature engaged an independent appraiser to appraise the equipment at 110 Beard, the Lowville Facility, and the Ogdensburg Facility.85 27. Bloch testified that Signature did not appraise 110 Beard because Debtor provided Signature with a relatively current appraisal. The appraisal valued 110 Beard between $12,000,000.00 and $14,000,000.00. According to Bloch, after taking into account the outstanding mortgage in the approximate amount of $7,000,000.00 on the property, Signature felt there was equity it could rely on to secure the Loan.86 Bloch testified that although Signature perfected and later released a lien on the leasehold improvements to 110 Beard at the request of the IDA in order to allow Debtor to refinance Yoni in 2006 or 2007, Signature maintained a perfected lien on the realty and on the 556refrigeration and freezer equipment housed at 110 Beard.87 28. Signature also conducted a search of all open UCC filings, a litigation search, and an investigation into pending litigation brought by American Equities Group (“AEG”) against Ahava Dairy, AFC, and LCD (the “AEG Defendants”).88 AEG formerly financed Ahava Dairy in the 1990s before AEG went into bankruptcy. Debtor testified that Ahava Dairy started doing business with AEG in 1995 and that AFC had never been a party to any factoring or other financing agreement with AEG notwithstanding that AEG eventually named AFC as a co-defendant in the lawsuit.89 In or about 2000 or 2001, the bankruptcy trustees for AEG filed an $8,000,000.00 claim against Ahava Dairy, AFC, LCD, and Debtor personally, claiming a breach of payments by Ahava Diary under a 1996 factor agreement (the “AEG Litigation”). Debtor testified, however, that he had deposited an amount sufficient to pay off the AEG indebtedness in AEG’s bank account, although he was unable to get the AEG Litigation dismissed.90 29. Bloch testified that upon learning of the AEG Litigation through Signature’s litigation search, Signature spoke with Debtor and Debtor’s counsel at that time, Dennis Stein, Esq., of Stein Riso Mantel, LLP (“SRM”), regarding the merits and status of that lawsuit.91 Signature was advised by Mr. Stein that the AEG Litigation had been dormant for many years, AEG did not have a lien on any of the assets of the Ahava Companies, and that AEG’s claims were without merit. Debtor further advised Signature that there had been fraud internally at AEG and that AEG had lost its records and receipts that would have shown repayment of Ahava Dairy’s indebtedness in full in 2000.92 80. The AEG Litigation was not disclosed on the financial statements of the Ahava Companies or Debtor, but it was known to Signature and documented on Schedule 3.06 titled “Actions Relating to Ahava Food Corp. or the Obligors” of the Credit Agreement prior to closing of the Loan.93 In that regard, Bloch testified that Signature chose to enter into the Loan notwithstanding the fact that Debtor had failed to voluntarily disclose the AEG Litigation.94 31. Signature also questioned Debtor and conducted limited due diligence with respect to AOC. Bloch testified that Debt- or orally represented to Signature that the purpose of AOC was to allow Fariborz to generate income by selling product of the Ahava Companies in California to a different clientele.95 During cross-examination, Bloch testified that Signature excluded AOC as an obligor to the Credit Agreement because Signature believed that AOC “was in fact an immaterial affiliate [of the Ahava Companies] because of the sales volume and the target geography to which it was selling its product to”96 when the Loan was made. During Bloch’s September 27, 2010 deposition taken in connection with this litigation (the “2010 Bloch Deposition”), Bloch similarly testi557fied that AOC was not considered as a guarantor because its relevant tax returns for periods prior to the Loan showed less than $400,000 in revenues on an annual basis.97 Accordingly, AOC was included in Schedule 3.11 titled “Subsidiaries or Affiliates of Ahava Food Corp. or the Obligors” as a non-obligor affiliate owned by Debtor and Fariborz as members.98 Bloch further indicated that had Debtor “conveyed” to Signature that AOC “was of a substantial revenue size, assets and germane to the integrated business to which [Signature] was lending,” Signature would have required AOC’s inclusion as a party to the Credit Agreement.99 32. Schedule 3.11 to the Credit Agreement did not break down the percentages of ownership held by Debtor and Fariborz in AOC as of 2005, but Debtor represented to Signature that they each owned fifty percent. Debtor testified that he conditionally sold his equity interest in AOC to Fariborz when his father died, which occurred after the Credit Agreement was drawn up but prior to the Loan’s closing.100 Pursuant to an Agreement dated August 15, 2005, Debtor effectuated a sale of his shares of stock in AOC to Fariborz (the “AOC Stock Agreement”), which the parties then valued at $169,284, in consideration for Fariborz’s remittance of his one-third inheritance from their deceased father’s estate to Debtor.101 The AOC Stock Agreement contained a repurchase provision whereby Debtor could repurchase his fifty percent equity interest in AOC on or before January 2, 2007, upon payment to Fariborz in the amount of $167,284.32.102 Debtor conceded during trial that he did not disclose the AOC Stock Agreement or, as he referred to it, the “contingent sale” to Signature prior to execution of the Credit Agreement.103 33. In addition to the foregoing due diligence, Bloch had several discussions with Debtor regarding his personal and business finances. These discussions covered, among other topics, the outcomes of the equipment appraisals, trends in the performance of the Ahava Companies, and Debtor’s personal net worth.104 34. The 2005 Personal Financial Statement, indicated that, as of February 2005, Debtor had a net worth of $2,030,000, exclusive of his ownership interests in the Ahava Companies.105 35. Bloch testified during direct examination that Debtor’s “outside net worth” independent of the business assets served as “positive reinforcement” for Signature’s business decision to enter into the Loan.106 Bloch further testified on cross-examination, however, that Signature took the 2005 Personal Financial Statement “at face value,” and that it did not verify the accuracy of the information contained therein.107 C. Debtor and the Ahava Companies’ Initial Loan Performance 36. For the remainder of 2005 and throughout 2006, AFC performed satisfactorily under the Credit Agreement. Bloch 558testified that Signature had provided Debtor with short-term bridge financing during that timeframe, but that borrowing under Facility B at that time was “fairly innocuous.”108 37. Internal electronic correspondence written during December 2006, while Signature was contemplating advancing “new ■money” to Debtor and the Ahava Companies, between bank officers, including Bloch, described Debtor as “a man of his word” who “to date, ... has lived up to all his promises” and paid all short terms loans as agreed.109 Debtor testified that towards the end of 2006, he sought a short-term loan from Signature in the amount of $250,000.00 and that Signature ultimately approved a lesser loan in the amount of $150,000.00.110 38. Bloch testified during cross examination that during the beginning of 2007, the relationship between Debtor and Signature was still good.111 AFC had paid off one of the short-term loans in the amount of $150,000.00 and reduced Facility B by approximately $155,000.00.112 As of February 2007, AFC was paying its debt in a timely manner and, with respect to additional short-term financing, paying in advance.113 D. The First Event of Default 39. On or about March 2007, Signature learned that M & I Equipment Finance Company (“M & I”) had obtained a judgment against LCD in the approximate amount of $650,000.00. Bloch testified that Signature was notified of the M & I litigation by either Debtor or Debtor’s counsel and also by Signature’s own counsel.114 M & I actually obtained two judgments, the first in the amount of $658,994.02 rendered on January 12, 2007 (the “M & I Judgment”), and the second in the amount of $60,553.66 rendered on April 23, 2007 (the “M & I Fee Judgment”), both of which were entered against LCD, AFC, and Debtor (collectively, the “M & I Defendants”).115 The M & I Defendants filed a motion for reconsideration on January 24, 2007, and a notice of appeal from the M & I Judgment on February 5, 2007.116 The M & I Judgment constituted an event of default under the Credit Agreement, but Debtor did not disclose the M & I Judgment to Signature until he became aware of the same approximately two months after its issuance. 40. Debtor testified that the M & I Judgment arose in connection with funding for the construction of a wastewater treatment plant at the Lowville Facility. According to Debtor, the Department of Environmental Conservation had become extremely tough regarding the disposal of whey, causing LCD to incur high disposal costs. LCD contracted with a Canadian company called Hydroxyl to build the wastewater treatment plant and M & I was going to finance the project.117 In connection with M & I’s financing, Debtor gave M & I a personal guarantee. Hydroxol filed for bankruptcy after M & I rendered payment in full to Hydroxol and 559M & I later sued the M & I Defendants.118 Debtor testified that the M & I Judgment was fraudulently obtained,119 which was consistent with his prior representations to Bloch,120 and that the M & I Fee Judgment was for M & I’s attorneys’ fees incurred in connection with the lawsuit.121 41. According to Debtor, he first learned of the M & I Judgment in March 2007, and he immediately contacted Signature and arranged to meet with Bloch and other Signature representatives to discuss the same.122 Because Debtor was communicating with M & I about payment options at the time, he did not expect M & I to freeze the Ahava Companies’ bank accounts at Signature.123 42. As a result of the M & I Judgment, M & I served Signature with restraining notices for the bank accounts held by AFC and LCD.124 According to Bloch, Signature did not actually freeze the bank accounts until it was served with the third restraining notice from M & I, which was in May 2007, and Signature’s internal records indicated that a total of $5,673,992.18 was deposited and withdrawn from the subject bank accounts after Signature was served with the initial restraining notice but before Signature took action to comply.125 As a result, Signature was sued by M & I and ultimately paid M & I approximately $325,000.00 to $350,000.00 from its own funds to settle the litigation.126 43. On or about March 28, 2007, Signature sent the Obligors a notice of default in connection with the Loan based in part upon the M & I Judgment.127 44. Bloch testified that although Signature had declared an event of default and could have accelerated and demanded payment on the Loan upon learning of the M & I Judgment, Signature instead reserved its rights and decided to “work with [Debt- or] to figure out how he was going to resolve [the M & I Judgment].”128 45. Bloch acknowledged during cross-examination that the M & I Judgment posed a problem for Signature as well as Debtor because Signature’s collateral included the proceeds generated by AFC’s sales and ordinarily deposited into the frozen bank accounts of AFC and LCD.129 Signature had a priority lien on all of the assets and accounts of both AFC and LCD, as well as a right of setoff against the operating accounts.130 Once AFC and LCD could no longer use their operating accounts, Signature had to determine how best to protect the proceeds of its collateral and how to collect on the Loan if it could no longer access funds deposited into these accounts.131 Further, Signature understood that if AFC and LCD could no longer operate as a result of the M & I Judgment and M & I’s subsequent collection efforts, Debtor and the Ahava Companies 560would have no means of generating funds to be used to repay the Loan.132 46. On March 7, 2007, via electronic correspondence, Debtor advised Bloch that Attorney Stein’s advice with respect to dealing with the M & I Judgment was “to pay all of our vendors in cash and collect cash,” which Debtor indicated was “[n]ot a bad idea.”133 Bloch forwarded Debtor’s correspondence to senior executives at Signature, who, according to Bloch, collectively agreed that Signature would not overtly assist Debtor in shielding monies from M & I or in “perpetrat[ing] a fraud against one of his creditors.”134 47. Contrary to Bloch’s testimony that Signature would not assist Debtor in shielding money from M & I, Signature worked directly with Debtor and the Ahava Companies to redirect receivables from the Ahava Companies to SLF, the only entity not subject to the M & I Judgment. Debtor testified that when AFC was no longer able to operate in the wake of the M & I Judgment, SLF took over and served former AFC customers.135 According to Debtor, Signature directed him to open three new accounts in the name of SLF, which he did.136 AFC receivables were then deposited into the SLF accounts and Signature’s Loan payments were made from those funds.137 48. On June 21, 2007, Bloch sent electronic correspondence to Debtor and to the controller of the Ahava Companies confirming this arrangement: “Please be advised that due to the frozen status of the Ahava Food Corp. accounts, all future payments of principal and interest, fees, expenses, etc. will be taken from St. Lawrence Food Corp.’s (the guarantor’s) Signature Bank account # 1500883630.”138 E. Schwartz & Sons 49. For several months prior to the M & I Judgment, AFC was working to strengthen its business relationship with an entity called Schwartz & Sons (“S & S”), a New York corporation and distributor of non-dairy kosher products to the Hasidic community. S & S was originally owned by Debtor’s nephew’s wife. Debtor testified that AFC could not sell product directly to any grocery stores within the Hasidic community because customers preferred to buy from Hasidic-owned businesses.139 At that time, AFC was interested in transitioning from using multiple “one truck” distributors that it traditionally used to sell to customers in the Hasidic community in order to minimize AFC’s exposure and inability to collect receivables from these one-man distributorships. 50. Once S & S had become a large customer of AFC, Debtor brought this business relationship to Bloch’s attention. In late 2006 or early 2007, to alleviate Signature’s concern about a single customer generating a large receivable, Debtor arranged for S & S to maintain a bank account at Signature, so that Signature would have direct knowledge of S & S’s receivables that were due to the sale of AFC’s products as they were received and deposited.140 Bloch testified that Signature did not have a problem with Debtor’s 561proposal, although Signature refused to extend a $100,000.00 line of credit to S & S in order for S & S to open its account at Signature.141 51. As S & S’s receivable grew, Debtor considered obtaining some sort of security interest from S & S in order to allow AFC to collect directly on receivables of S & S.142 AFC and S & S eventually signed a security agreement to that effect.143 52. According to Debtor, S & S quickly became a substantial part of AFC’s business. Debtor testified that S & S “filled a gap,”144 and Bloch confirmed that Signature was fully aware of Debtor’s increased reliance on S & S to continue the Ahava Companies’ business operations in the face of the M & I Judgment.145 53. On April 18, 2007, AFC sent a letter to certain customers indicating that S & S would be the new distributor of the products that AFC had been selling.146 This letter was signed by Ari Katz (“Katz”) as the Director of Operations for AFC, although Debtor testified Katz was a truck driver for AFC at that time.147 54. Beginning in April 2007, S & S began serving and invoicing former AFC customers.148 55. Bloch indicated that Signature allowed Debtor to distribute and operate through S & S because if Signature had instead foreclosed, it would have closed out M & I. A requirement attendant to Signature’s decision, however, was the joinder of S & S to the Credit Agreement in order to ensure Signature’s continued first security lien on all assets including those of S & S.149 56. S & S initially refused to assume liability or become indebted to Signature,150 thereby prompting Debtor to buy out S & S in July or August 2007.151 57. For a brief period of time in the spring of 2007, AFC continued to collect outstanding accounts receivable while using S & S as the sole distributor for the Ahava Companies. During this time frame, Signature learned that Debtor was billing through S & S and depositing what were in actuality AFC’s receivables into a SLF operating account at a different bank and then transferring a portion of. those funds into the S & S operating account at Signature from which Signature took Loan payments.152 During his deposition, Bloch confirmed that Signature discussed this arrangement both internally and with its counsel, as well as with Debtor and Debt- or’s counsel, and although Signature had “some concern about what that would or would not look like to M & I, [it] decided that because [the receivables] were part and parcel of [Signature’s] credit facility, that [Signature] would rather have the money flowing through the bank, as opposed to not through the bank.” 153 According to Bloch, because Signature had a lien on the assets of the Ahava Companies 562and Yoni, “[w]hen [Debtor] then collected [the Ahava Companies’] receivables, and effectively then billed them out of [S & S], by extension, those were [Signature’s] assets.” 154 58. Debtor testified that AFC ceased doing business in June 2007, at or around the time S & S began operating under Debtor’s exclusive ownership and control.155 F. The Forbearance Agreement 59. Both Debtor and Bloch testified that the default caused by the M & I Judgment prompted the parties to negotiate a forbearance agreement.156 During Debtor’s June 17, 2010 deposition taken in connection with this litigation (the “2010 Banayan Deposition”), Debtor further testified that Signature was pressing him to sign a forbearance agreement and, hence, he did so to “satisfy [Signature] to be in compliance.” 157 60. On or about July 11, 2007, the parties to the Credit Agreement entered into a Forbearance Agreement.158 AFC remained a named party to the Forbearance Agreement notwithstanding the fact that it had ceased actively doing business earlier in the year. 61. The termination date of the Forbearance Agreement was September 11, 2007.159 62. Prior to entering into the Forbearance Agreement, Signature conducted additional due diligence, including obtaining an updated equipment appraisal at the Lowville and Ogdensburg Facilities and an updated review of the accounts receivable.160 Debtor also submitted to Signature an updated joint personal financial statement (the “2007 Personal Financial Statement”) showing a total net worth in the amount of $1,067,000.00.161 63. Debtor testified that Signature did not conduct any additional due diligence regarding AOC at this time.162 64. Paragraph 2 of the Forbearance Agreement expressly provided for the reaffirmation of all prior loan documents and obligations contained therein.163 65. Paragraph 9(e) of the Forbearance Agreement stated: “the representations and warranties set forth in each of the Transaction Documents are true and correct as of the date hereof in all material respects (except such representations and warranties that are rendered untrue as a result of the existence of the Existing Defaults)....”164 66. Debtor testified that he did not review the Credit Agreement prior to signing the Forbearance Agreement.165 67. As a condition of Signature’s agreement to forbear from exercising its rights under the Credit Agreement, the Forbearance Agreement at paragraph 7(b) required the Obligors to engage a “projections consultant” who was satisfactory to Signature to prepare rolling thirteen week 563cash flow projections for the Obligors.166 Bloch testified that Signature had “lost faith in [Debtor’s] ability to project what the needs of [AFC] were and clearly to curtail the losses that kept escalating.”167 He further testified that the intended purpose of the projections consultant, therefore, was to find and fix the operational issues that were causing the Ahava Companies to incur losses, which was a prerequisite to a potential sale of the Ahava Companies.168 68. At Signature’s instruction, the Ahava Companies hired the management and consulting firm of Getzler Henrich (“Getzler”). 69. Although Block testified that Signature made “recommendations of three different firms,”169 certain factors suggest that Debtor had but one choice. First, on May 16, 2006, Bloch sent pre-engagement electronic correspondence to Joel Getzler (“Joel”) wherein Bloch stated that Signature would “require the formal retaining of your firm” before approving Debtor’s request for additional short-term financing.170 In that correspondence, Bloch further advised Mark Samson (“Samson”), a Getzler consultant, of the short-term loan financing terms and indicated that Debtor had not seen the Forbearance Agreement yet, but that Bloch had outlined the structure of the Forbearance Agreement to Debtor via electronic correspondence.171 Second, other pre-engagement correspondence between Bloch and Getzler representatives revealed sensitive and/or confidential information about the Ahava Companies as if Bloch knew the engagement was imminent. Third, contrary to Bloch’s repeated testimony that neither he nor any other representative of Signature ever engaged in discreet communications with Getzler or its representatives,172 the record reflects post-engagement communications between Bloch and Getzler representatives occurred daily and, at times, were intended to be “confidential” or private, thereby suggesting that Getzler was acting on behalf of Signature rather than Debtor.173 Accordingly, the record supports a finding that Signature required the engagement of Getzler as a condition precedent to the Forbearance Agreement. Debtor’s testimony is also consistent with this finding. According to Debtor, he did not want to hire consultants because he did not feel that the Ahava Companies needed or could afford them at the time,174 and he also stated that Signature introduced him only to Getzler, hence, he did not have any choice in the matter.175 70. During Getzler’s retention, Debtor paid Getzler $38,500.00 per week for the work of two consultants, Samson and Fred Kessler (“Kessler”). Kessler was eventually replaced by Ron Groling.176 During the time the consultants were in place, Samson was the main contact between the Ahava Companies and Signature.177 Debt- 564or testified that he was rarely in direct contact with Signature from this point forward.178 According to Debtor, after Getzler had been in place for approximately four or five weeks, Signature requested that Getzler take full control of the Ahava Companies as a restructuring agent or CEO, which Getzler promptly refused. Debtor testified, however, that Getzler was already running the Ahava Companies and involved in every aspect of the businesses when this request was made.179 71. Signature knew at the time of Getzler’s engagement that Debtor was searching for take-out financing and/or a potential buyer for the Ahava Companies. Bloch repeatedly acknowledged that Debt- or was actively “looking to take out Signature in whole or in part” both before and after Getzler was put in place,180 and that he had no reason to believe that Getzler was not acting in good faith to assist Debt- or in finding another lender to provide alternate or replacement financing.181 Bloch testified that Signature was willing to invest additional funds in the Ahava Companies under the watchful eye of Getzler because certain manufacturing issues were being corrected and Signature understood that it would only be made whole if Debtor could refinance or orchestrate a sale, either of which would have required positive cash flow and a return to profitability.182 The prospect of full repayment by virtue of either option was unquestionably a motivating factor for Signature to enter into the Forbearance Agreement. 72. Prior to Getzler’s engagement, the Ahava Companies carried overdrafts of approximately $40,000.00 to $70,000.00 on a daily basis that were routinely covered.183 The Ahava Companies had approximately $140,000.00 to $150,000.00 available on Facility B on which to draw the overdrafts and they had not ever exceeded the Facility B maximum. As stated on Schedule 3 to the Forbearance Agreement, the amounts due and owing to Signature at that time under the Credit Agreement were $5,544,449.73 under Facility A and $1,302,733.68 under Facility B.184 In addition, Signature had lent the Ahava Companies an additional $750,000.00, which sum was also included on this Schedule.185 With Getzler at the helm, the Ahava Companies’ overdrafts increased by $4.1 million in excess of the Facility B maximum.186 Bloch confirmed during trial that Signature relied upon the rolling thirteen week projections prepared by Getzler and, irrespective of the fact that the projections continued to show “an ever increasing cash burn rate,”187 Bloch continued to recommend and Signature continued to approve substantial overdrafts while Getzler was in place.188 G. The First Amendment to the Forbearance Agreement 73. On or about August 27, 2007, and at the insistence of Signature, the parties to the Credit Agreement, S & S, and Ana entered into a Joinder Agreement, Waiver, 565and First Amendment to the Forbearance Agreement (the “First Amendment”) to continue Signature’s forbearance from exercising its rights and remedies under the Credit Agreement and to add S & S and Ana as new obligors and parties to the existing Credit Agreement and Forbearance Agreement.189 S & S thereby joined the obligations set forth in the Credit Agreement and reaffirmed in the Forbearance Agreement and granted Signature a security interest in substantially all of its assets. 74. In connection with the First Amendment, SRM issued an opinion letter to Signature on August 27, 2007 (the “Opinion Letter”). Among other opinions expressed therein, SRM stated that, as the date of issuance, each corporate obligor was validly existing and in good standing under the laws of the State of New York.190 75. Attached to the Opinion Letter was a Manager’s Certificate for Yoni identifying Debtor as the “sole Member and the sole Manager of Yoni.”191 During trial, however, Debtor testified that he had sold a forty-nine percent membership interest in Yoni to Isaac Chera (“Chera”) in January 2007, as memorialized by an Assignment of Membership Interest dated February 8, 2007 (the “Chera Assignment”).192 Debtor further testified that he had been introduced to Chera by a real estate broker in 2006, during which time Debtor was looking for additional sources of funding for the Ahava Companies.193 76. The First Amendment at paragraph 3(f) required the Obligors to maintain the projections consultant on a full-time basis.194 77. The First Amendment at paragraph 3(g) converted $1,750,000.00 of the overdrafts that had been extended into a new short-term loan (the “Forbearance Loan”). In connection with this Forbearance Loan, ACF and SLF executed a Promissory Note, which was guaranteed by the Obligors.195 78. The First Amendment at paragraph 8 required the Obligors to reaffirm each of the representations and warranties set forth in the Forbearance Agreement and to also represent and warrant that no forbearance termination event, as defined in the Forbearance Agreement, had occurred.196 79. Debtor testified that by June 2007, when the First Amendment was signed, AFC and LCD had stopped doing business, albeit without following the required corporate formalities to close or wind down the corporations.197 At that time, Debtor was doing business through SLF and S & S.198 80. From the testimony produced at trial and the documentary evidence, and notwithstanding Debtor’s failure to ensure the proper editing of the First Amendment, it is clear that Signature had a working knowledge of Debtor’s business operations, whether run through the Ahava Companies or S & S. This is particularly true in light of Getzler’s involvement in 566Debtor’s daily business operations for some time prior to the First Amendment. H. The Second Amendment to the Forbearance Agreement 81. On September 11, 2007, Obligors and Signature entered into a Second Amendment to the Forbearance Agreement (the “Second Amendment”), pursuant to which Signature, inter alia, extended the time for repayment of all obligations under the Credit Agreement to October 5, 2007.199 82. The Second Amendment at paragraph 4 also contained reaffirmations of representations and warranties, representations of no new events of default, and waivers of any claim or defense against the obligations under the Credit Agreement being due and owing immediately.200 83. By virtue of the Second Amendment, Debtor reaffirmed his earlier incorrect representation that he was the sole member and one hundred percent owner of Yoni.201 84. Debtor testified that as of the effective date of the First Amendment, however, Getzler and Signature knew or should have known that he was no longer the sole owner of Yoni as a result of the Chera Assignment because Yoni had been the subject of negotiations with various investors or financial institutions in which Samson participated as a consultant to the Ahava Companies.202 Debtor further testified that he had informed Signature and Bloch personally of the Chera Assignment prior to the Second Amendment. In connection with Debtor’s efforts to refinance or sell the Ahava Companies, Debtor executed term sheets with prospective investors or financial institutions that accurately reported his membership interest in Yoni. At least one term sheet from Grey-stone Business Credit II, LLC (“Grey-stone”) accurately stating Debtor’s reduced membership interest in Yoni was provided directly to Signature.203 85. On September 14, 2007, Bloch indicated in electronic correspondence to Debtor that Signature had been made aware of the change in Yoni’s membership and asked Debtor to confirm whether he had sold equity in Yoni after the effective date of the Credit Agreement.204 86. The Chera Assignment constituted a breach of the First and Second Amendments. Because the Chera Assignment did not impact Yoni’s status as an obligor under the Credit Agreement or the First or Second Amendments, however, Signature did not declare an event of default or foreclose on the Loan upon learning of the same.205 87. For several months following the Second Amendment, Debtor worked diligently with Getzler’s assistance to find a purchaser or replacement financing entity for the Ahava Companies to take out Signature. As previously noted, Bloch was made aware of Debtor’s efforts in this respect and, at his request, he was kept current on all developments by Samson.206 In fact, Bloch attended certain meetings between the investors or financial institu567tions, Debtor, counsel, and Getzler 207 and he personally provided information about the Ahava Companies to at least one such entity during that entity’s due diligence process.208 88. By the end of November 2007, Debtor had become so displeased with Getzler’s performance and the increased personal and business liability due to the additional overdrafts taken during Getzler’s engagement that he terminated Getzler so that he could regain control of the Ahava Companies.209 Debtor testified that he “had lost faith at that point in the ability of the consultants] to do what the bank wanted [Getzler] to do, and [he] felt that just to go deeper and deeper into [debt] just ... [made] no sense,” especially when he had personal liability for the Debt as a guarantor.210 89. After firing Getzler, the Ahava Companies and S & S ceased paying interest on Facility B. These events prompted Signature to cut off funding,211 thereby making it impossible for the Ahava Companies and S & S to continue operating.212 90. Debtor testified that S & S ceased operations on or about November 2007, and it ceased doing business entirely on or about January 2008.213 I. 2007 Filings, Leases, and Agreements 91. On June 6, 2007, AOC registered in New York as a foreign limited liability company.214 92. On June 13, 2007, AOC filed a Certificate of Assumed Name to conduct business in New York as North Country Manufacturing. Its application listed its principal New York place of business as the Lowville Facility.215 93. On July 30, 2007, as a precursor to S & S’s joinder to the Credit Agreement, AFC and S & S executed a Lease Assumption Agreement whereby S & S agreed for a period of two years to assume certain of AFC’s obligations to Signature and to AFC’s vendors, in exchange for the ability to assume AFC’s lease with Yoni for 110 Beard216 and use of AFC’s truck fleet.217 94. Or about August 29, 2007, two days after the First Amendment, Debtor, on behalf of LCD, entered into a Commercial Lease with AOC whereby AOC agreed to lease the Lowville Facility beginning on 568August 29, 2007, and terminating on August 28, 2012 (the “LCD Lease”).218 95. On September 1, 2007, the State of New York, Department of Agriculture and Markets (the “Department of Agriculture”), issued a Milk Dealer License to AOC.219 96. On October 18, 2007, AOC filed a second Certificate of Assumed Name to conduct business in New York under the assumed name of Ahava National Food Distributor (“Ahava National”).220 97. On or about October 30, 2007, Debtor, on behalf of SLF, entered into a Commercial Lease with AOC whereby AOC agreed to lease the Ogdensburg Facility beginning on October 30, 2007, and terminating on October 29, 2012 (the “SLF Lease”).221 98. The Lease Agreements were prohibited by the Credit Agreement.222 Signature did not consent to either the LCD Lease or the SLF Lease (collectively, the “Lease Agreements”),223 notwithstanding that such consent was required by the Credit Agreement.224 99: Debtor testified that he entered into the Lease Agreements on behalf of LCD and SLF at a time when the Ahava Companies were “hemorrhaging substantially” in order to generate an infusion of cash for the purpose of converting the manufacturing facilities into lean manufacturing environments at the recommendation of Kessler.225 According to Debtor, he followed Getzler’s recommendation, which had been conveyed to Signature as part of a two-part plan to increase efficiencies and reduce manufacturing costs, and he tapped into the only source of capital investment known to him at the time—AOC.226 100. Due to the difficult nature of the kosher dairy business, Debtor testified during his deposition and at trial that the Lease Agreements actually benefitted Signature because AOC’s lease and operation of the Lowville and Ogdensburg Facilities preserved the value of Signature’s collateral. According to Debtor, if AOC had not stepped in to run the dairy manufacturing plants, the dairies would have lost their contracts with the dairy farms, which would have been disastrous as the conversion to kosher farming and the relationship with those existing farms took years of investment. Further, the equipment, if left idle, would have precipitously declined in value.227 During his deposition, Debtor vigorously defended his decision to enter into the Lease Agreements by stating, “[a]s a businessman, I did the right thing at that time.” 228 The end goal, as described by Debtor, was to preserve the assets of AFC and SLF. 101. The income generated by the Lease Agreements was sufficient to cover the collective real property and equipment lease obligations of LCD and SLF, which Debtor testified amounted to approximately $25,000.00 per month.229 569102. Between August 1, 2007 and November 2007, AOC loaned S & S and Primo Foods, which Debtor testified was a d/b/a of SLF,230 $757,269.20.231 Debtor testified that the aggregate loan amount was due to AOC’s numerous payments on behalf of S & S or Primo Foods to cover the mortgage on 110 Beard, to satisfy invoices from various kosher farms and a supplier of imported turkey, and for general cash loans to S & S and Primo Foods.232 103. Debtor also testified that the checks written by AOC during this time-frame were deposited into the LCD account at Signature,233 as evidenced by the deposit stamps on the back of the checks.234 104. Getzler was intimately familiar with the Ahava Companies’ financials, including the amount of the Ahava Companies’ respective daily deposits and into which bank accounts those deposits were being made.235 As such, Signature was also aware that money was being deposited into bank accounts at other institutions and then transferred to SLF’s account at Signature. One such account at HSBC Bank USA, N.A. (“HSBC”) belonged to North County Manufacturing.236 This account was frequently the subject of electronic correspondence between Samson and Bloch and, in fact, Samson reported regularly to Bloch on the deposit amounts made to operating accounts at both Signature and HSBC.237 105. By November 2007, AOC and Ahava National were invoicing former customers of AFC and S & S.238 Debtor confirmed that the initial customers of AFC eventually became customers of S & S and, eventually, of AOC.239 106. By November 2007, S & S no longer had funding and it could not meet any of its payment obligations to Signature or otherwise, including the Lease Assumption Agreement that it had entered into with AFC. Accordingly, on November 27, 2007, AOC and S & S entered into a Settlement Agreement, which in actuality was a lease assumption agreement whereby AOC agreed to assume the lease for 110 Beard.240 According to the Settlement Agreement, S & S owed AOC $780,000.00 on an outstanding account receivable. 107. Shortly thereafter, on February 11, 2008, the Department of Agriculture notified AOC that the milk dealer license for AOC was amended from a restrictive license as a milk processor to a milk dealer authorized to purchase, sell, and distribute milk and to process or manufacture milk at the Lowville and Ogdensburg Facilities.241 J. The AEG Settlement 108. Sometime in 2007, while Samson was still a consultant at the Ahava Companies, the long dormant AEG Litigation became active.242 570109. At this time, the Ahava Companies were in severe financial distress and they owed approximately $65,000.00 to $67,000.00 in attorneys’ fees. In order to defend the AEG Litigation, Debtor would have had to pay the outstanding fees in full and provide a new retainer. Debtor testified that he wanted to defend the AEG Litigation but he needed Samson’s permission to do so because Samson had to approve the Ahava Companies’ budget on a weekly basis and any checks written without Samson’s approval would not have been honored.243 Debtor instead asked the attorneys who had represented the AEG Defendants in the AEG Litigation at its inception to continue to represent them and “fight the case.”244 110. On or about February 7, 2008, the parties to the AEG Litigation entered into a Stipulation and Agreement of Settlement (the “AEG Settlement”) providing, inter alia, for: (1) payment of a cash settlement in the total amount of $250,000.00, payable in equal monthly installments of $25,000.00 over the course of ten consecutive months; (2) entry of a judgment against Ahava Dairy, LCD, and Debtor in the amount of $3.5 million; (3) entry of a judgment against AFC in the amount of $325,000.00; and (4) in the event of nonpayment of the $325,000.00, entry of a judgment against AFC in the amount of $3.5 million.245 In exchange, AEG agreed to release “all claims, demands, debts, liabilities, losses, rights, and causes of action” related to the parties’ 1996 transaction with prejudice.246 111. Accordingly, the Honorable Robert W. Sweet, United States District Judge, issued a Final Money Judgment and Order of Dismissal with Prejudice in the AEG Litigation on March 10, 2008 (the “AEG Judgment”).247 112. Notwithstanding that the Ahava Companies were financially strained and without the means to satisfy the judgments resulting from the AEG Settlement, Debtor agreed to the AEG Settlement because he was “still hoping to somehow reach an agreement with Signature ..., get some lenders in and revive ... the companies that [he] had been running for the last 20 years.” 248 He simply was not ready to “put a nail in the coffin” or “throw in the towel.” 249 Further, Debtor explained that he was dually motivated to reduce his personal liability as well as the liabilities of the Ahava Companies collectively because, although they were no longer operating, Debtor still hoped to be able to market and sell S & S and he did not want S & S to somehow become joined and embattled in the AEG Litigation.250 By that point, however, S & S had also ceased operations.251 113. Debtor testified that AFC did not have the ability to fund the AEG Settlement and AOC therefore agreed to pay the $325,000.00 in exchange for consideration.252 114. On February 20, 2008, AFC and AOC entered into a Trademark Purchase Agreement whereby AOC agreed to satisfy the AEG Judgment in full and to fund 571the AEG Settlement for AFC’s benefit in exchange for AFC’s transfer and assignment of certain registered trademarks.253 To effectuate the Trademark Purchase Agreement, Debtor executed a Trademark Assignment on behalf of AFC on March 6, 2008.254 115. AFC’s trademarks were encumbered by security interests in favor of Signature and, thus, the Trademark Assignment was in breach of the Credit Agreement, which prohibited transfers of Signature’s collateral outside the ordinary course of business without Signature’s consent.255 116. Debtor testified that the only assets that AFC owned at the time, which he believed were transferable notwithstanding Signature’s interests under the Security Agreement, were certain kosher trademarks valued at approximately $100,000.00.256 Debtor believed at that time that he was allowed to leverage the trademarks provided he obtained fair market value, which he had learned approximately six months earlier while trying to sell or lien the trademarks with Samson’s assistance to generate revenue for AFC.257 K. Signature’s Lawsuits and Related Events 117. In December 2007, Signature sent letters under Section 9-607 of the New York Uniform Commercial Code (“9-607 Letters”) to the top one hundred accounts receivable debtors of AFC, as derived from AFC’s records dating as late as November 2007, which included account names, addresses, and outstanding amounts due, demanding that the recipients send Signature all payments due to any of the Ahava Companies, AOC, and Ahava National.258 118. In response to the 9-607 Letters, on or about December 27, 2007, Debtor, identifying himself as President of Ahava National, sent letters to several of Ahava National’s customers directing payment to be made to Ahava National rather than Signature.259 In January 2008, AOC’s counsel similarly wrote to AOC’s customers informing them that AOC and Ahava National were not indebted to Signature and that Signature therefore did not have a security interest in AOC’s receivables.260 119. On December 27, 2007, Signature commenced a lawsuit (the “State Court Litigation”) against Debtor, the Ahava Companies, Yoni, S & S (collectively, the “Judgment Debtors”), and Ana in the Supreme Court of the State of New York (the “Supreme Court”).261 120. On March 7, 2008, the Supreme Court granted summary judgment to Signature: (1) against Ana in the amount of $1,781,621.53, plus costs and disbursements; and (2) against the Judgment Debtors in the amount of $9,338,103.90, plus costs and disbursements (collectively, the “State Court Judgment”).262 121. Signature commenced a separate action in the Supreme Court on or about April 2, 2008, against, among others, AOC, Debtor, and Fariborz, which was removed 572to federal court in April 2008 (the “Federal Litigation”).263 122. On or about July 1, 2008, Signature commenced a separate action against AFC and AOC, among others.264 128. On July 9, 2008, Signature conducted a secured party sale of substantially all of the personal property of the Ahava Companies and S & S.265 At that sale, Signature credit bid for the assets through one of its affiliates, SB AHLCSLSS, LLC, for $1,500,000.00.266 In January 2009, Signature sold those assets to Toobro for $1,000,000.00.267 L. AOC’s Chapter 11 Filing 124. Following the demise of the Ahava Companies, Debtor immediately began working on behalf of AOC in order to obtain new financing.268 In this role, Debt- or corresponded with Bibby Financial Services 269 and AmeriSource Funding,270 along with other entities. In correspondence sent or received by Debtor in relation to transactions between AOC and these entities, Debtor was identified as an officer of AOC. 125. Further, in certain correspondence sent by Ahava National to customers, Debtor identified himself as President of AOC,271 although Debtor testified that this was inaccurate as he never held an officer position with AOC.272 126. Debtor testified that his focus shifted following the Federal Litigation to “protecting his brother and his brother’s asset” to the extent possible and that no assets had been fraudulently diverted from the Ahava Companies or S & S to AOC.273 Debtor’s efforts, however, inevitably failed. 127. AOC filed a Chapter 11 bankruptcy petition with the United States Bankruptcy Court for the Central District of California (the “California Bankruptcy Court”) on or about July 15, 2008.274 128. The California Bankruptcy Court dismissed AOC’s bankruptcy case on January 6, 2009.275 V. DISCUSSION A. Exceptions to Discharge Generally The “central purpose of the Code is to provide a procedure by which certain insolvent debtors can reorder their affairs, make peace with their creditors, and enjoy ‘a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.’ ” 276 The discharge provided by the Code is meant to effectuate this “fresh start” policy of bankruptcy relief.277 Dis573charge, however, is limited to the “ ‘honest but unfortunate debtor.’ ” 278 The Code, therefore, also provides protection to creditors whom the debtor has harmed by egregious or fraudulent conduct.279 In order to ensure that only the honest debtor is relieved from the oppressive burden of pre-bankruptcy debts, Congress chose to exclude from the general policy of discharge certain categories of debts, including those obtained by fraud.280 In so doing, “Congress evidently concluded that the creditors’ interest in recovering full payment of debts in these categories outweighed the debtors’ interest in a complete fresh start.”281 By virtue of the exceptions to discharge codified in § 523, “the malefic debtor may not hoist the Bankruptcy Code as protection from the full consequences of fraudulent conduct.”282 In order to balance these competing interests, the United States Supreme Court has held that a creditor seeking to except its claim from discharge must establish the nondischargeability of the claim within the parameters of § 523(a) by a preponderance of the evidence.283 Because “the consequences to a debtor whose obligations are not discharged are considerable,”284 it is a well-established rule that exceptions to discharge are to be construed strictly against a creditor and liberally in favor of a debtor.285 B. Section 523(a)(2)(A) Section 523(a)(2)(A) excepts from discharge any debt “for money, ... or an extension, renewal, or refinancing of credit, to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition.” 286 This fraud exception is intended to “prohibit the discharge of any liability arising from a debtor’s fraudulent acquisition of money, property, etc.,” and to make the victimized creditor whole.287 Its application, hence, “implements the fundamental bankruptcy policy that only those debts which are honestly incurred may be discharged.” 288 574This Court recently examined the various types of conduct covered by § 523(a)(2)(A)—only those frauds involving “moral turpitude or intentional wrong” or actual fraud are included within this exception to discharge.289 The determination of whether a debt is excepted from discharge under this subsection depends on a number of factors, including, “whether money, ... or an extension, renewal or refinancing of credit has been obtained, ... and the character of the false pretenses or representation or actual fraud.” 290 Because false pretenses, false representation, and actual fraud represent differing concepts,291 they have somewhat different meanings and each one merits a brief discussion. 1. False Pretenses To prove that a debt arose from false pretenses, the plaintiff must show: (1) an implied misrepresentation or conduct by the debtor; (2) promoted knowingly and willingly; (3) to create a contrived or misleading understanding of the transaction on the part of the plaintiff; (4) which wrongfully induced [the] plaintiff to advance money, property, or credit to the debtor.292 Generally, “[a] false pretense is defined as ‘conscious deceptive or misleading conduct calculated to obtain or deprive another of property. It is the practice of any scam, scheme, subterfuge, artifice, deceit or chicane in the accomplishment of an unlawful objective’ ” on behalf of the debtor.293 “It has also been described as the product of multiple events, acts, or representations undertaken by the debtor which purposely create a contrived and misleading understanding of a transaction that ... wrongfully induces the creditor to extend credit to the debtor.”294 False pretenses, therefore, do not necessarily require an express misrepresentation. Rather, silence, or the concealment of a material fact, when there is a duty to disclose, may constitute the basis of false pretenses.295 2. False Representation To prove that a debt arose from false representation, the plaintiff must show: “(1) [the] debtor made a false or misleading statement; (2) with the intent to deceive; (3) on which the creditor justifiably relied; (4) in order to induce the creditor to turn over money or property to 575the debtor.” 296 A false representation can be shown through either an express statement or through an omission where the circumstances are such that disclosure is necessary to correct what would otherwise be a false impression.297 As the language of § 523(a)(2)(A) plainly imparts, not all express statements are actionable under the “false representation” category of this subsection. Rather, only oral or written statements “other than ... statements] respecting the debtor’s or an insider’s financial condition” fall within the scope of § 523(a)(2)(A).298 This language creates an exception to the exception.299 Notwithstanding the critical importance of the phrase “respecting the debtor’s or insider’s financial condition” to determine the viability of a § 523(a)(2)(A) claim premised upon false representation in the first instance, the parameters of this limiting language are rarely examined or explained in case law. As noted by the Tenth Circuit, this phrase has a range of potential meanings.300 Among those courts that have considered the issue, two camps have emerged: Under what many of the courts who have considered this issue refer to as the ‘broad interpretation,’ a statement ‘respecting the debtor’s ... financial condition’ is any communication that has a bearing on the debtor’s financial position. Thus, the broad interpretation posits that a communication addressing the status of a single asset or liability qualifies as ‘respecting the debtor’s ... financial condition.’ Under what courts refer to as the ‘strict interpretation,’ a statement ‘respecting the debtor’s ... financial condition’ is any communication that presents an overall picture of the debtor’s financial position. This interpretation limits statements ‘respecting the debtor’s ... financial condition’ to communications that purport to state the debtor’s overall net worth, overall financial health, or equation of assets and liabilities.301 After an extensive examination of the text and structure of the Bankruptcy Code, the legislative history of § 523(a)(2)(A) and (B), and cases interpreting the phrase “respecting the debtor’s ... financial condition,” the Tenth Circuit adopted the strict interpretation.302 The Tenth Circuit elaborated on its holding by precisely defining non-actionable statements under § 523(a)(2)(A) as “those that purport to present a picture of the debtor’s [or insider’s] overall financial health[,]” including “those analogous to balance sheets, income statements, statements of changes in overall financial position, or income and debt statements that present the debtor or insider’s net worth, overall financial health, or equation of assets and liabilities.”303 Notably, the Tenth Circuit summarized that such statements—whether formally or informally made—must speak to the debt- or’s or insider’s “overall net worth or overall income flow” 304 in order to fall outside 576the scope of § 523(a)(2)(A). Thus, “[i]f a debtor’s oral statements ‘respecting [his or her] financial condition’ later turn out to be false, debts obtained based on such statements can still be discharged under § 523(a)(2)(A).” 305 Having now considered the Tenth Circuit’s reasoning in Joel-son, as well as that of the lower courts quoted and discussed therein, this Court is persuaded that the Tenth Circuit’s holding is both logical and correct. Accordingly, the Court will apply the strict interpretation in this and future cases. 3. Actual Fraud Actual fraud as used in § 523(a)(2)(A) means common law fraud, provable by showing: (1) a representation made by [the] debtor to the creditor; (2) [the] debtor’s knowledge of the falsity when the representation was made; (3) [the] debtor’s intent to deceive in making such representation; (4) [the] creditor’s justifiable reliance; and (5) [the] creditor’s damage as a result.306 The term “actual fraud” is broadly defined to encompass “ ‘any deceit, artifice, trick, or design involving direct and active operation of the mind, used to circumvent and cheat another.’ ”307 4. Common Elements to Any § 523(a)(2)(A) Cause of Action Although false pretenses, false representation, and actual fraud represent differing concepts, the elements of scienter, reliance, and materiality are common to all and must by proven by a preponderance of the evidence in order for the creditor to prevail.308 Given how the record has developed in this case, the Court’s analysis narrowly focuses on the first and second of these elements, both of which bear further discussion in their own right before they can be applied to the facts at hand. First, “central to the concept of fraud is the existence of scienter which, for purposes of § 523(a)(2)(A), requires that it be shown that at the time the debt was incurred, there existed no intent on the part of the debtor to repay the obligation.”309 “Proof of intent to deceive is measured by the debtor’s subjective intention at the time the representation was made.”310 Because fraudulent intent is rarely admitted by a debtor, courts uniformly recognize that it may be established by circumstantial evidence or by inferences drawn from a course of conduct.311 Accordingly, the bankrupt’s credibility is an important factor in finding or rejecting the same.312 577Second, the Supreme Court has, in the context of a case involving the dischargeability of a commercial loan and personal guarantee, held that causation must be proven under § 523(a)(2)(A) by a showing of actual and justifiable reliance on the part of the objecting creditor.313 The creditor must, therefore, show that the debtor’s fraudulent conduct was the “cause-in-fact of the debt that the creditor wants excepted from discharge.”314 Assuming actual reliance is proven, the creditor must also show that such reliance was justifiable. Under the justifiable reliance standard, which originates from New York common law fraud, “a person is justified in relying upon a representation of fact although he might have ascertained the falsity of the representation had he made an investigation” unless “under the circumstances, the facts should be apparent to one of his knowledge and intelligence from a cursory glance, or he has discovered something which should serve as a warning that he is being deceived, [in which case] he is required to make an investigation of his own.”315 As the Supreme Court specifically observed, the justifiable reliance standard, while less demanding than the reasonable reliance standard formerly employed by some courts, does not render reasonableness irrelevant for the reason that: the greater the distance between the reliance claimed and the limits of the reasonable, the greater the doubt about reliance in fact. Naifs may recover, at common law and in bankruptcy, but lots of creditors are not at all naive. The subjectiveness of justifiability cuts both ways, and reasonableness goes to the probability of actual reliance.316 C. Signature’s § 523(a)(2)(A) Claim Signature’s request for relief under § 523(a)(2)(A) is predicated on false pretense, false representation, and actual fraud. Generally, Signature alleges that Debtor made numerous fraudulent representations concerning the value of Signature’s collateral, Debtor’s financial condition, and the financial condition of the Ahava Companies and certain other insiders.317 Signature further alleges that in the context of the parties’ dealings, Debtor made additional fraudulent representations regarding his good faith efforts to secure additional financing, rehabilitate his collective businesses, and preserve and protect Signature’s collateral and its liens encumbering the collateral.318 Specifically, Signature argues that Debtor made the following fraudulent misrepresentations, which are taken directly from Signature’s proposed conclusions of law included in Plaintiffs Memorandum: (a) certifying on Schedule 3.11 to the Credit Agreement that he and his brother co-owned AOC when, in reality, the Debtor sold his 50% ownership interest to his brother only one week prior to the execution of the Credit Agreement; (b) in connection with due diligence for the Loan, representing to Signature that the AEG lawsuit was baseless and that he had repaid the money owed to AEG, where the Debtor la578ter entered into a consensual stipulation of settlement with AEG agreeing to the entry of judgment against him and his companies in excess of $3.5 million; (c) in connection with the Forbearance Agreement and First and Second Amendments thereto, failing to disclose transfers of assets to AOC, failfing] to disclose the sale of interests in Yoni, the delivery of false certification that [Debtor] was the sole member of Yoni and failing] to disclose that [Debtor] no longer had a 50% interest in AOC (at the time of making transfers of encumbered collateral to AOC!)[; and]319 (d) [representing in the Second Amendment] that no defaults other than those listed in the Forbearance Agreement and First Amendment ... existed, [notwithstanding the] LCD lease to AOC.... 320 As to intent, Signature contends that Debtor at all times intended to defraud Signature and, in the end, to orchestrate a “ ‘bust-out’ whereby he caused the transfer of [all] assets to AOC, with no payment or consideration to or consent from Signature.” 321 Based on the collective evidence, Signature asserts that it has proven by a preponderance of the evidence that Debtor acted with the requisite fraudulent intent during multiple transactions between the parties. Signature further contends that it did actually and justifiably rely on Debt- or’s fraudulent representations and conduct in agreeing to finance the Ahava Companies and eventually S & S.322 Debtor, on the other hand, raises three defenses to Signature’s § 523(a)(2)(A) claim. First, Debtor argues that all of the statements complained of by Signature are non-actionable because they qualify as statements regarding Debtor or an insider’s financial condition.323 Applying the Court’s earlier reasoning and conclusion to the facts at hand, however, the Court disagrees. The Court’s interest, therefore, lies with Debtor’s remaining defenses. Second, Debtor contends that the record as a whole is probative of good faith business dealings and his honest, albeit frustrated, efforts to repay the Loan and perform in accordance with the Credit Agreement, Forbearance Agreement, First Amendment, and Second Amendment.324 Even if an inference of fraudulent intent could be drawn, which Debtor disputes, he submits that the evidence in this case affirmatively negates any such finding. Debt- or argues that he has proven, among other things, that: (1) he worked diligently to find a buyer for the Ahava Companies and 5 & S so that he could repay Signature; (2) he arranged for certain of the businesses to borrow from AOC in order to “keep them afloat while he sought additional financing;” (3) he cooperated with Getzler and allowed Getzler “unfettered access” to the Ahava Companies and S & S; and (4) all transactions involving the Ahava Companies, S & S, and AOC were done with the intent to preserve the value of Signature’s collateral while also generating income for the Ahava Companies and S 6 S.325 Third, Debtor submits that the representations targeted by Signature were immaterial to Signature’s business decisions to grant and extend the Loan 579and, thus, they were not relied on by Signature.326 As the Court’s findings of fact reflect, it is evident that Debtor made certain false representations—either overtly or by omission—during the course of his relationship with Signature. The first element of Signature’s § 523(a)(2)(A) claim has therefore been met. Because Debtor has conceded this fact,327 those representations need not be repeated here. The decisive question then is whether Debtor made the false representations or engaged in a course of conduct with the requisite fraudulent intent to deceive or not to perform as required. The Court rejects Signature’s contention that the record is plain and probative in this respect. Further, even if the Court were to draw a permissive inference from the totality of the circumstances presented, Debtor has come forward with sufficient credible testimony and evidence to convince the Court that he did not harbor an improper motive in his business dealings with Signature. Preliminarily, the Court notes that in reaching this determination, it carefully considered all of the evidence, exhibits, and arguments of counsel, regardless of whether or not they are specifically referenced in this Memorandum-Decision and Order. In applying a subjective standard for fraud in this case, however, the Court’s ruling rests primarily on the following considerations that mitigate strongly against the existence of any fraudulent intent. Debtor made payments on the Loan and remained current for approximately two years, during which time Signature executives described him as a “man of his word” who “lived up to his promises.” By Signature’s own account, Debtor not only intended to pay the Loan at the time it was taken, but he in fact did so “innocuously” for a period of nearly two years, and he continued to make payments on the Loan thereafter up until he could no longer afford to do so. Moreover, it is undisputed that Debtor made good faith efforts as late as November or December 2007, if not beyond this time period, to secure additional or replacement financing in order to make Signature whole. Bloch plainly conceded this point during his deposition when he testified that “there [was] a long history of [Debtor] ... looking to reduce ... [or] to take [Signature] ... out.”328 Even with the assistance and oversight of Getzler, Signature’s selected turnaround management firm, Debtor was unable to resolve the debt issues that plagued the Ahava Companies and S & S, thereby eliminating any possibility of finding an entity to invest in, refinance, or purchase as a going concern the Ahava Companies or S & S. Debtor’s own testimony further mitigates against the existence of fraudulent intent. In contrast to Bloch, whose testimony appeared to the Court to be carefully orchestrated and contrived and, at times, wholly inconsistent with the documentary evidence, Debtor presented as an honest, persuasive, and credible witness. The Court, therefore, believes Debtor’s testimony that he negotiated and entered into the Credit Agreement in good faith and that his end goals during the course of his relationship with Signature, through and including the time period encompassing the Forbearance Agreement, First Amendment, and Second Amendment, were to save his businesses from financial ruin and to reduce his personal liability to the maximum extent possible. 580The Court’s credibility assessment is supported by the following. Debtor successfully built and ran a multi-million dollar business empire for nearly twenty years. As a self-employed business owner and operator, Debtor was able to support his family, which includes Ana and their eight children.329 It would stand to reason that Debtor would not intentionally or voluntarily jeopardize the financial health of his companies. When it became clear that Debtor had lost control of the Ahava Companies and S & S, Debtor understandably sought to reduce his personal liability assumed in connection with these entities. While Signature points to the fact that Debtor settled the AEG Litigation by agreeing to the AEG Judgment, for example, as indicia of fraud, the more plausible explanation is that Debtor believed the $3,500,000.00 settlement was a safer bet than the potential for an $8,000,000.00 judgment, particularly in light of his inability to fund a complete defense at that time. Similarly, Signature suggests that the Lease Agreements between AFC and LCD tend to prove that Debtor was operating under a “bust out” scheme. The record also fails to support this assertion. Rather, AOC’s existence and the nature of its business as a kosher distributor were known to Signature from the beginning. Perhaps more critical to the Court’s analysis is the fact that Signature was fully aware of AOC’s involvement with certain of the Ahava Companies and S & S during 2007 while the parties were continuing to negotiate and enter into the Forbearance Agreement, First Amendment, and Second Amendment. While Signature now complains of a “bust out” scheme—a “scheme” to which it was in many respects an active participant, Debtor’s actions are more consistent with his testimony that he “never intentionally misrepresented a significant fact or consciously misled Signature”330 and that, in the end, he was “still hoping to somehow reach an agreement with Signature ... and revive ... the companies that he had been running for the last twenty years.”331 In addition, the Court is simply not convinced that Signature actually or justifiably relied on the false statements made by Debtor. Therefore, even if Debt- or did act with the purpose and intent of deceiving Signature, the Debt would not be subject to the exception to discharge set forth in § 523(a)(2)(A). Even assuming arguendo that Signature had proven Debtor’s fraudulent intent, the record does not support a finding of reliance by Signature. Rather, the Court is of the opinion that Signature routinely exercised poor business judgment, which in hindsight it seeks to attribute to fraud. This theory of fraud by hindsight that Signature alleges is wholly supported by the record. For example, Bloch admitted that Signature reviewed tax returns showing that AOC had less than $400,000.00 in annual revenue for tax year 2005, causing Signature to conclude that AOC was not “deemed material enough of a company to be required” as a guarantor to the Credit Agreement.” 332 Moreover, Bloch confirmed that Signature did not rely on Debtor’s fifty percent ownership interest when Signature made the Loan.333 Therefore, there was no reliance in fact on the very first statement identified by Signature in support of its § 523(a)(2)(A) claim. 581The same can be said regarding the second statement identified by Signature in support of its § 523(a)(2)(A) claim. When asked by Debtor’s counsel during his deposition whether Bloch “was now claiming that AEG was never paid in full,” Bloch replied, “I have no evidence to support that, but yes. I assume that is the case.” 334 Bloch elaborated by stating, “if [Debtor] did not owe [AEG] anything, as he indicated and he represented to [Signature] up front, it does not necessarily make sense to me that [Debtor] would consent to a judgment with [AEG] subsequently.”335 Bloch reaffirmed this sentiment during trial.336 While assumptions certainly shift the blame from Signature, they do not win a case. Finally, Signature now argues that Debtor intended to “perpetrate a fraud” on M & I. Bloch admitted during his deposition, however, that he and other Signature executives “made a collective decision ... to open [bank] accounts for S & S ... or another entity that was not a party to the [M & I Judgment], [to] allow [Debtor] to run funds through one of his other companies----” 337 Signature executives, including Bloch, “made a collective decision that it was better to have [S & S be] a party to the Credit Agreement and keep the cash funneling and running through [Signature], than to have it outside.” 338 Accordingly, Signature consciously sanctioned the very same actions that it now criticizes and targets as indicia of fraud. Given the course of events that transpired between the parties, Signature’s actions warrant the greatest scrutiny. In the end, Bloch conceded that Signature made what amounted to a series of poor business decisions by continuing to extend credit in hopes that Debtor would successfully refinance or sell the Ahava Companies or S & S. The continued financing of the Ahava Companies and S & S through more than $4,000,000.00 in overdrafts approved by Signature at the request of Getzler, in whom Signature put its full faith and credit to right the ship, ultimately failed. Furthermore, rather than call the Loan in the face of multiple defaults, Signature instead chose to forbear. In Bloch’s own words, Signature “missed from a timing perspective.”339 VI. CONCLUSION In summary, the Court cannot find that Debtor acted with any wrongful intent in his dealings with Signature. In addition, the Court is not convinced that Signature justifiably relied on false statements made by Debtor in connection with the Loan. Therefore, the Debt is dischargeable. As Signature has abandoned all claims properly before the Court other than that made under § 523(a)(2)(A), the Discharge and Dischargeability Complaints must be dismissed. Any personal liability that Debtor may have as a result of the State Court Judgment is therefore extinguished. Accordingly, it is hereby ORDERED, that the Discharge Complaint is dismissed; and it is further ORDERED, that the Dischargeability Complaint is dismissed; and it is further ORDERED, that a discharge shall be issued to Debtor. . See Compl. to Deny Discharge of Debtor Pursuant to Section 727(a) of the Code, Dec. 12, 2008 (the "Discharge Complaint”), Adv. Pro. 2, ECF No. 1. . Unless otherwise indicated, subsequent chapter and section references are to the United States Bankruptcy Code (the "Bankruptcy Code"), 11 U.S.C. §§ 101-1534 (2010). . See Compl. to Except Debt from Discharge Pursuant to Section 523(a) of the Bankruptcy Code (the “Dischargeability Complaint”), July 18, 2008, Adv. Pro. 1, ECF No. 1. . See Plaintiff's secured Proof of Claim, Claim Number 14, filed in Debtor’s main bankruptcy case, Chapter 7 Case Number 08-60954 (the "Main Case”), on July 9, 2008, itemizing the judgment rendered in the amount of $9,453,364.97, plus accrued interest, late charges, legal fees, costs, and expenses. . See Consent Order Vacating Default and Consolidating Signature Bank's Actions Against the Debtor, June 2, 2009, Adv. Pro. 1, ECF No. 8 and Adv. Pro. 2, ECF No. 11. . The parties to this Memorandum-Decision and Order have engaged in extensive motion practice, much of which was presided over by the undersigned's predecessor, Retired Chief Judge Stephen D. Gerling. Accordingly, the Court assumes familiarity with all prior rulings and orders issued in the Main Case, Adversary Proceeding 1, and Adversary Proceeding 2. . Voluntary Pet., Main Case, ECF No. 1. . Verified Mot. of Signature Bank for an Order Appointing a Chapter 11 Trustee for the Estate of Moise Banayan Pursuant to § 1104(a) and to Compel Surrender of Debt- or’s Passport, Apr. 29, 2008, Main Case, ECF No. 12; Deck of Gary Eisenberg, Apr. 29, 2008, Main Case, ECF No. 14. . Mot. of Signature Bank for an Order Granting Relief from the Automatic Stay, May 2, 2008, Main Case, ECF No. 17; Deck of Gary Eisenberg, May 2, 2008, Main Case, ECF No. 19; Deck of Robert Bloch, May 2, 2008, Main Case, ECF No. 20. . Answering Aff. of David P. Antonucci, Esq., May 16, 2008, Main Case, ECF No. 37; 548Answering Aff. of David P. Antonucci, Esq., June 5, 2008, Main Case, ECF No. 51. . Mot. of Signature Bank for an Order Granting Relief from the Automatic Stay, June 26, 2008, Main Case, ECF No. 72; Decl. of Steven A. Munson, June 26, 2008, Main Case, ECF No. 74. See also Notice of Partial Withdrawal of Mot. of Signature Bank for an Order Granting Relief from the Automatic Stay, July 14, 2008, Main Case, ECF No. 92. . Untitled Affirmation of David P. Antonucci, Esq., July 17, 2008, Main Case, ECF No. 95. . Order Converting Chapter 11 Case to a Case Under Chapter 7 and Directing Debtor to Comply with Bankruptcy Rule 1019, Main Case, ECF No. 119. . Order Granting Relief from Automatic Stay, Oct. 27, 2008, Main Case, ECF No. 150. . Am. Mot. to Settle and Sell Property of the Bankruptcy Estate, Main Case, ECF Nos. 164. . Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving Asset Sale Agreement, Main Case, ECF No. 177. . Voluntary Pet., Schedule D. . Second Am. Scheduling Order, Adv. Pro. 2, ECF No. 48. . Pl.’s Pre-Trial Statement, Oct. 8, 2010, Adv. Pro. 2, ECF No. 52; Pl.’s Trial Ex. Index, Oct. 8, 2010, Adv. Pro. 2, ECF No. 54; Pl.’s Am. Trial Ex. Index, Oct. 11, 2010, Adv. Pro. 2, ECF No. 58; Pl.’s Second Am. Trial Ex. Index, Oct. 14, 2010, Adv. Pro. 2, ECF No. 60; Def.’s Pretrial Statement, Oct. 8, 2010, Adv. Pro. 2, ECF No. 55; and Def.’s Exs., Oct. 8, 2010, Adv. Pro. 2, ECF No. 59. . Objections of PI. Signature Bank to Def.’s Ex. List, Oct. 14, 2010, Adv. Pro. 2, ECF No. 59; Def.’s Objections to PL's Trial Exs., Oct. 14, 2010, Adv. Pro. 2, ECF No. 61. . Joint Stipulation of Facts, Oct. 8, 2010, Adv. Pro. 2, ECF No. 53. . The transcript of the first day of trial was docketed on November 8, 2010, and will be referred to herein as “Tr. 1.” Adv. Pro. 2, ECF No. 63. . The transcript of the second day of trial was docketed on December 10, 2010, and will be referred to herein as "Tr. 2.” Adv. Pro. 2, ECF No. 66. . The transcript of the third and final day of trial was also docketed on December 10, 2010, and will be referred to herein as "Tr. 3.” Adv. Pro. 2, ECF No. 68. . See Tr. 1 4-49. The Court’s oral rulings are incorporated herein without further discussion. Upon a review of the trial transcript and the parties' post-trial memoranda, the Court declines to rule on the outstanding preliminary evidentiary objections as the subject exhibits were neither offered during trial nor relied upon by the parties in their post-trial submissions. . Tr. 3 165-167. . Tr. 3 167. . PI. Signature Bank’s Proposed Findings of Fact and Conclusions of Law ("Plaintiff’s Memorandum”), Adv. Pro. 2, ECF No. 71; Moise Banayan's Post-Trial Memorandum ("Debtor’s Memorandum”), Adv. Pro. 2, ECF No. 72. . Mot. by Signature Bank Pursuant to Bankruptcy Rule 7015 and Fed.R.Civ.Proc. 15(b) to Amend Compl. to Plead Relief Under Section 523(a)(6) of Code as Tried to Court ("Plaintiff's Rule 15(b) Motion”), Adv. Pro. 1, ECF No. 11. . Moise Banayan’s Mem. of Law in Opp'n to Signature Bank’s Mot. to Amend Compl. to Plead Relief Under Section 523(a)(6) of the Code, Adv. Pro. 1, ECF No. 16. . Order Denying Mot. to Amend Compl., Adv. Pro. 1, ECF No. 17. . Mot. by Signature Bank Pursuant to Bankruptcy Rules 9023, 9024, and Fed.R.Civ.Proc. 59(a) and 60(b) to Supplement Record in Adversary Proceeding ("Plaintiff's Rule 59(a) Motion”), Adv. Pro. 1, ECF No. 19; Decl. of Robert Bloch., Adv. Pro. 1, ECF No. 20. . Debtor’s Untitled Opp’n, Adv. Pro. 1, ECF No. 23. . Order Denying Mot. by Signature Bank Pursuant to Bankruptcy Rules 9023 and 9024 and Fed.R.Civ.P. 59(a) and 60(b) to Supplement Record in Adversary Proceeding, Aug. 18, 2011, Adv. Pro. 1, ECF No. 25. . Pl.’s Mem. at 35-52. . In re Henderson, 134 B.R. 147, 155 (Bankr.E.D.Pa.1991) (citing cases); see also, e.g., Strong v. Option One Mortgage Corp. (In re Strong), 356 B.R. 121, 136-37 (Bankr.E.D.Pa.2004) (collecting cases) (the failure of a party to address issues in a post-trial submission may constitute a waiver of those issues). . Pl.’s Rule 15(b) Mot. at 7, 9. . Pl.’s Rule 15(b) Mot. at 10. . Much of the testimony elicited in this litigation with respect to certain facts was conflicting. To the extent necessary, the findings of fact rendered herein reflect the Court’s determination of the credibility of the witnesses. . Joint Stipulation of Facts 11 2. . Tr. 2 269, 271-72. . Tr. 2 270-71. . Tr. 2 275. . Tr. 2 271-72. . Joint Stipulation ¶ 3. . Tr. 2 273. . Tr. 2 273-75. . Joint Stipulation ¶ 6. . Tr. 2 275. . Tr. 2 276. . Joint Stipulation ¶ 4. . Joint Stipulation ¶ 20. . Tr. 2 277-79. . Joint Stipulation ¶ 7. . Tr. 2 276. . Tr. 2 277. . Tr. 2 277. . Tr. 1 84-86. . Tr. 1 87. . Tr. 1 87. . Tr. 1 87-88; Tr. 2 281. . Pl.'s Ex. 55. . Tr. 3 15-17. . Xr. 3 17. . Pl.’s Ex. 55 (emphasis in original). . PL’s Ex. 55. . PL's Ex. 55. . PL’s Ex. 55. . PL’s Ex. 112. . Pl.’s Ex. 111. . Joint Stipulation ¶ 13. . PL’s Ex. 112. . Tr. 1 88-99, 103. . Tr. 3 16. . Tr. 1 88-89. . Tr. 1 97. . Tr. 1 92; Pl.’s Ex. 49. . Tr. 1 89; Pl.’s Ex. 55. . Tr. 1 91. . Tr. 1 90. . Tr. 1 91. . Tr. 1 91. . Tr. 1 89-91. . Tr. 1 89. . Tr. 1 90. . Tr. 2 14-15. . Tr. 2 228-30; Tr. 1 98-99. . Tr. 2 201. . Tr. 2 135-36. . Tr. 1 98. . Tr. 1 98; Tr. 2 242. . Pl.’s Ex. 55. . Tr. 1 239. . Tr. 1 103. . Tr. 1 231. . Def.’s Ex. ZZZ, 2010 Bloch Dep. Tr. 28. . Pl.’sEx. 55. . Tr. 1 232-33. . Tr. 2 116. . PL's Ex. 29. . PL's Ex. 29. . Tr. 2 118. . Tr. 1 89. . PL's Ex. 49; Tr. 1 94. . Tr. 1 94-95. . Tr. 1 229. . Tr. 1 115. . Def.'sEx. E. . Tr. 2 289. . Tr. 1 253. . Tr. 1 254. . Tr. 1 254. . Tr. 1 117, 256. . Pl.’sEx. 6. . Pl.’sEx. 6. . Tr. 2 290. . Tr. 2 291. . Tr. 2 291. . Tr. 1 123. . Tr. 2 291-92. . Tr. 2 291-92. . Tr. 2 295. . Tr. 2 256-57. . Tr. 1 262-63; See also Def.’s Ex. GG. . Tr. 1 263. . Joint Stipulation ¶ 15. . Tr. 1 120. . Tr. 1 264. . Tr. 1 118. . Tr. 1 264-65. . Tr. 1 264-65. . Def.’s Ex. TIT. . Tr. 1 121. . Tr. 2 152. . Tr. 2 296. . Tr. 2 298. . Def.'s Ex. Q. . Tr. 3 4. . Tr. 3 11-12. . Tr. 1 267-68. . Tr. 3 7. . Tr. 3 11. . Tr. 3 13. . Tr. 1 122. . PL's Ex. 71. . Tr. 2 182. . PL’s Ex. 72. . Tr. 1 122-23. . Tr. 3 13. . Tr. 3 13. . Tr. 1 268. . Def.’s Ex. ZZZ, 2010 Bloch Dep. Tr. 99. . Tr. 1 280. . Tr. 2 145-46. . Tr. 1 124; Tr. 3 19. . PL’s Ex. 48, 2010 Banayan Dep. Tr. 68. . PL's Ex. 19. . PL's Ex. 19. . Tr. 1 125. . PL’s Ex. 50. . Tr. 3 22. . PL’s Ex. 19. . PL’s Ex. 19. . Tr. 3 20. . Pl.’s Ex. 19. . Tr. 2 39. . Tr. 2 32. . Tr. 1 132. . Def.'s Ex. L. . Def.’s Ex. L. . Def.’s Ex. ZZZ, 2010 Bloch Dep. Tr. 43; Tr. 2 30/ . Def.’s Exs. S, AA. . Tr. 3 37. . Tr. 2 123. . Tr. 3 37-38. . Def.'s Exs. AA, OO, PP, WW, YYY. . Tr. 3 40. . Tr. 3 41-43. . Def.'s Ex. ZZZ, 2010 Bloch Dep. Tr. 125; Tr. 2 61-66. . Def.’s Ex. ZZZ, 2010 Bloch Dep. Tr. 126. . Tr. 2 52. . Tr. 3 43. . Pl.’s Ex. 18. . Pl.’s Ex. 18. . Tr. 3 44. . Tr. 1 170. . Tr. 2 50-51; Def.’s Ex. GGG. . PL's Ex. 19. . PL's Ex. 19. . PL's Ex. 19. . PL's Ex. 56. . Tr. 3 36-37. . PL’s Ex. 19; . Pl.’s Ex. 19; Tr. 1 145. . PL's Ex. 19. . Tr. 2 145. . Tr. 2 146-47. . Pl.’s Ex. 20. . Pl.’s Ex. 20. . PL'sEx. 20. . Tr. 2 149-50; Def.'s Ex. HH. . Pl.’s Ex. 100. . Def.’s Ex. HH. . Tr. 2 15. . Tr. 2 61-66; Def.’s Exs. BB, II. . Def.'s Ex. IT. . Def.'s Ex. UU. . Tr. 3 45-46. . Tr. 3 46. . Tr. 1 181. . Tr. 3 65-66. . Tr. 2 175. . Joint Stipulation ¶ 21; Pl.’s Ex. 12. . Joint Stipulation ¶ 21; Pl.’s Ex. 13. . The Stipulation of Facts at paragraph 5, note 1, provides the following background with respect to the leasing arrangements for 110 Beard. Beginning October 1, 2006 through April 25, 2008, the lessor of 110 Beard was the IDA. Beginning August 25, 2005 through April 25, 2008, Yoni was the lessee and Ahava the sublessor. Yoni and the IDA entered into an Amended and Restated Lease Agreement dated October 1, 2006 (the "IDA Lease Agreement”), pursuant to which the IDA leased its interest in 110 Beard to Yoni. The IDA Lease Agreement governed any subtenancy of 110 Beard. As required under the IDA Lease Agreement, Yoni and Ahava entered into an Amended and Restated Sublease Agreement dated October 1, 2006, pursuant to which Yoni sublet 110 Beard to Ahava. . Pl.’s Ex. 24. . Pl.’s Ex. 21. . Pl.’s Ex. 31. . Joint Stipulation ¶ 23; Pl.’s Ex. 14. . Pl.’s Ex. 22. . Tr. 1 at 174; Pl.'s Ex. 55. . Tr. 1 174-75. . Pl.’s Ex. 55. . Tr. 3 58. . Tr. 3 59. . Pl.’s Ex. 48, Banayan Dep. Tr. 128; Tr. 3 67-68. . Pl.’s Ex. 48, Banayan Dep. Tr. 118. . Tr. 3 59-60. . Tr. 3 61. . Def.’s Ex. ZZ. . Tr. 3 61-65. . Tr. 3 62-63. . Def.’s Ex. ZZ. . Def.’s Ex. XXX. . Def.’s Ex. RR. . Def.'s Ex. XXX. . Pl.’s Exs. 74, 75. . Tr. 2 179-86. . PL's Ex. 23. . PL's Ex. 31. . Tr. 3 27. . Tr. 3 28-29. . Tr. 3 34. . PL's Ex. 24. . PL's Ex. 24. . PL’s Ex. 16. . Tr. 3 35. . Tr. 3 at 35. . Tr. 2 207. . Tr. 2 208. . Tr. 2 208. . Pl.'sEx. 25. . Pl.’sEx. 26. . Pl.’sEx. 55. . Tr. 3 35-36. . Tr. 3 36. . Tr. 1 182; Def.'s Ex. FFF. . PL's Ex. 34. . Def.'s Ex. KKK. . Joint Stipulation ¶ 29. . Joint Stipulation ¶ 30. . Joint Stipulation ¶¶ 31-32. . Joint Stipulation ¶ 33. . Joint Stipulation ¶ 34. . Tr. 1 205-08. . Tr. 1 216. . Tr. 2 220; PI.'s Exs. 101-110. . PL’s Ex. 101. . PL’s Ex. 105. . PL’s Ex. 34. . Tr. 2 186-87. . PL’s Ex. 48, Banayan Dep. Tr. 180-81. . Joint Stipulation ¶ 35. . Joint Stipulation ¶ 36. . Grogan v. Garner, 498 U.S. 279, 286, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S.Ct. 695, 78 L.Ed. 1230 (1934)). . Id.; accord, e.g., Deady v. Hanson (In re Hanson), 432 B.R. 758, 770 (Bankr.N.D.Ill.2010) (citing Vill. of San Jose v. McWilliams, 284 F.3d 785, 790 (7th Cir.2002)). . Grogan, 498 U.S. at 286, 111 S.Ct. 654 (quoting Local Loan Co., 292 U.S. at 244, 54 S.Ct. 695); accord CM Temp. Servs. v. Bailey (In re Bailey), 375 B.R. 410, 415 (Bankr.S.D.Ohio 2007) ("discharge is a privilege, and not a right, and should only benefit an honest debtor”) (citing In re Juzwiak, 89 F.3d 424, 427 (7th Cir.1996) (internal citations omitted)). . St. Laurent v. Ambrose (In re St. Laurent), 991 F.2d 672, 680 (11th Cir.1993). . Grogan, 498 U.S. at 287, 111 S.Ct. 654; See also 11 U.S.C. § 523(a)(2), (4). . Grogan, 498 U.S. at 287, 111 S.Ct. 654. . In re St. Laurent, 991 F.2d at 680. . Grogan, 498 U.S. at 287-88, 111 S.Ct. 654 (refusing to apply the clear and convincing standard to the fraud exception codified in § 523(a)(2) and inferring instead that "Congress intended the ordinary preponderanee standard to govern the applicability of all the discharge exceptions”). . Denton v. Hyman (In re Hyman), 502 F.3d 61, 66 (2d Cir.2007), cert. denied, 555 U.S. 1097, 129 S.Ct. 895, 173 L.Ed.2d 106 (2009) (noting that "in many instances, failure to achieve discharge can amount to a financial death sentence”). . Geiger v. Kawaauhau (In re Geiger), 113 F.3d 848, 853 (8th Cir.1997) (citations omitted); accord State Bank of India v. Chalasani (In re Chalasani), 92 F.3d 1300, 1310 (2d Cir.1996). . 11 U.S.C. § 523(a)(2)(A). . Cohen v. de la Cruz, 523 U.S. 213, 220-23, 118 S.Ct. 1212, 140 L.Ed.2d 341 (1998). . EDM Machine Sales, Inc. v. Harrison (In re Harrison), 301 B.R. 849, 853 (Bankr.N.D.Ohio 2003). . Scheidelman v. Henderson (In re Henderson), 423 B.R. 598, 621 (Bankr.N.D.N.Y.2010) (quoting 4 Lawrence P. King, Collier on Bankruptcy ("Collier's”) (MB) ¶ 523.08[l][d] (15th Rev. Ed. 2006) ("fraud implied in law, which may be established without imputation of bad faith or immorality, is insufficient”)). . Collier’s ¶ 523.08[1], . Henderson, 423 B.R. at 621 (citing Vidomlanski v. Gabor (In re Gabor), 2009 WL 3233907, at 3-4, 2009 Bankr.LEXIS 3110, at 11 (Bankr.S.D.N.Y. Oct. 8, 2009) (citing Sandak v. Dobrayel (In re Dobrayel), 287 B.R. 3, 12 (Bankr.S.D.N.Y.2002))); see also Collier’s ¶ 523.08 (distinguishing actual fraud from false pretenses or false representations). . Henderson, 423 B.R. at 621 (citing Gabor, 2009 WL 3233907, 4, 2009 Bankr.LEXIS 3110, 12 (citing Lubit v. Chase (In re Chase), 372 B.R. 125, 128 (Bankr.S.D.N.Y.2007))). . Indo-Med Commodities, Inc. v. Wisell (In re Wisell), 2011 WL 3607614, 8, 2011 Bankr.LEXIS 3112, 22 (Bankr.E.D.N.Y. Aug. 16, 2011) (citing Gentry v. Kovler (In re Kovler), 249 B.R. 238, 261 (Bankr.S.D.N.Y.2000)). . Id. at 8-9, 2011 Bankr.LEXIS 3112, at 23 (citing Dobrayel, 287 B.R. at 12 (quoting Evans v. Dunston (In re Dunston), 117 B.R. 632, 641 (Bankr.D.Colo.1990) (internal quotation marks omitted))). . Farraj v. Soliz (In re Soliz), 201 B.R. 363, 369 (Bankr.S.D.N.Y.1996) (collecting cases). . Henderson, 423 B.R. at 621 (citing Gabor, 2009 WL 3233907, at 4, 2009 Bankr.LEXIS 3110, at 12 (citing Weiss v. Alicea (In re Alicea), 230 B.R. 492, 500 (Bankr.S.D.N.Y. 1999))). . Hanson, 432 B.R. at 772 (citing Trizna v. Lepri & Malcolm (In re Malcolm), 145 B.R. 259, 263 (Bankr.N.D.Ill.1992)). . 11 U.S.C. § 523(a)(2)(A) (emphasis added). . Cadwell v. Joelson (In re Joelson), 427 F.3d 700, 704 (10th Cir.2005). . Id. at 705. . Id. (citing Skull Valley Band of Goshute Indians v. Chivers (In re Chivers), 275 B.R. 606, 614-15 (Bankr.D.Utah 2002)). . Id. at 714. . Id. . Id. . Id. at 707. . Henderson, 423 B.R. at 621 (citing Gabor, 2009 WL 3233907, at 4, 2009 Bankr.LEXIS 3110, at 12 (citing Dobrayel, 287 B.R. at 12 n. 3 (internal citation omitted))). . Silverman v. K.E.R.U. Realty Corp. (In re Allou Distribs.), 379 B.R. 5, 34 (Bankr.E.D.N.Y.2007) (quoting McClellan v. Cantrell, 217 F.3d 890, 893 (7th Cir.2000)). . Henderson, 423 B.R. at 621 (citing Cochran v. Reath (In re Reath), 368 B.R. 415, 422 (Bankr.D.N.J.2006)). . Harrison, 301 B.R. at 854 (citing AT&T Universal Card Servs. v. Mercer (In re Mercer), 246 F.3d 391, 403 (5th Cir.2001); Binger v. Bloomfield, 293 B.R. 148, 153 (Bankr.N.D.Ohio 2003)). . Hanson, 432 B.R. at 772 (citing Mega Marts, Inc. v. Trevisan (In re Trevisan), 300 B.R. 708, 717 (Bankr.E.D.Wis.2003); CFC Wireforms, Inc. v. Monroe (In re Monroe), 304 B.R. 349, 356 (Bankr.N.D.Ill.2004)). . Desiderio v. Parikh (In re Parikh), 456 B.R. 4, 34 (Bankr.E.D.N.Y.2011) (citing In re Dubrowsky, 244 B.R. at 560, 573-73 (Bankr.E.D.N.Y.2000); accord In re Chase, 372 B.R. at 129 (citing Hong Kong Deposit & Guaranty Ltd. v. Shaheen (In re Shaheen), 111 B.R. 48, 53 (S.D.N.Y.1990))). . In re Magnusson, 14 B.R. 662, 669 (Bankr.N.D.N.Y.1981) (citing cases). . Field v. Mans, 516 U.S. 59, 74-75, 116 S.Ct. 437, 133 L.Ed.2d 351 (1995). . Hanson, 432 B.R. at 773 (citing Mayer v. Spanel Int'l Ltd. (In re Mayer), 51 F.3d 670, 676 (7th Cir.1995)). . Field, 516 U.S. at 70-72, 116 S.Ct. 437 (internal quotation marks and citations omitted). . Id. at 76, 116 S.Ct. 437. . Dischargeability Compl. ¶ 23. . Dischargeability Compl. ¶ 23. . Pl.'s Mem. at 36-37, 39. . PL's Mem. at 37. . PL’s Mem. at 46. . PL's Mem. at 38-39. . Debtor's Mem. at 26. . Debtor’s Mem. at 27. . Debtor’s Mem. at 27. . Debtor’s Mem. at 28. . PL's Ex. 48; Banayan Dep. Tr. 83. . Def.’s ZZZ, 2010 Bloch Dep. Tr. 158. . Tr. 3 270. . Pl.’s Ex. 48, 2010 Banayan Dep. Tr. 83. . Tr. 3 35. . Def.’s ZZZ, 2010 Bloch Dep. Tr. 28-29. . Def.'s ZZZ, 2010 Bloch Dep. Tr. 29. . Def.’s ZZZ, 2010 Bloch Dep. Tr. 31 (emphasis added). . Def.’s ZZZ, 2010 Bloch Dep. Tr. 34. . Tr. 1 241. . Def.’s ZZZ, 2010 Bloch Dep. Tr. 80. . Def.’s ZZZ, 2010 Bloch Dep. Tr. 80. . Tr. 2 at 52.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494673/	MEMORANDUM DECISION AND ORDER DENYING FRIEDLAND’S MOTION FOR AN ORDER TO (I) REOPEN THE CASE PURSUANT TO BANKRUPTCY CODE § 350(b), RULE 5010 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE, AND LOCAL RULE 5010-1, AND (II) GRANT SUCH OTHER RELIEF AS THE COURT MAY DEEM JUST AND PROPER BURTON R. LIFLAND, Bankruptcy Judge. Before the Court is the motion (the “Motion”) of Dion Friedland (“Friedland”) seeking an order to (i) reopen the chapter 11 bankruptcy case of HBLS, LP, (“HBLS” or the “Debtor”) pursuant to sections 350(b) and 105(a) of title 11 of the United States Code (the “Bankruptcy Code”), Federal Rule of Bankruptcy Procedure (“Bankruptcy Rule”) 5010, and Local Bankruptcy Rule for the Southern District of New York 5010-1, so that this Court may enforce its prior orders and other binding determinations issued during this case; and (ii) grant Friedland such other and further relief as may be just and proper. The dispute underlying this Motion pertains to a sale in Anguilla of Anguillan leasehold property1 subject to Anguillan charges (liens), which have been the subject of extensive litigation in Anguillan courts. After a review of the voluminous filings pertaining to the Motion, this Court finds that it is inappropriate to reopen the chapter 11 case to interfere with a dispute that has an overwhelming nexus to Anguilla. Accordingly, the motion is DENIED. 636 BACKGROUND The factual context of the Motion spans over a quarter century, and its underlying disputes have been heavily litigated in courts throughout New York and Anguilla. 1. The HBLS Bankruptcy In 1986, Leeward Isles Resorts, Ltd. (“LIR”) obtained a lease over property in Maundays Bay, Anguilla (the “Cap Juluca Property”) with the intent to develop the Cap Juluca Resort. LIR was wholly owned by the Friedland Group, an entity headed by Friedland. In October of 1986, the Friedland Group sold its stock of LIR (the “LIR Stock”) to HBLS for $1.4 million pursuant to a stock purchase agreement (the “Stock Purchase Agreement”) and entered into a pledge agreement (the “Pledge Agreement”) stipulating that, if HBLS defaults under the Stock Purchase Agreement, it would transfer the LIR Stock back to the Friedland Group. HBLS and LIR subsequently built the Cap Juluca Resort and formed Maundays Bay Management, Ltd. (“MBM,” and collectively with LIR and HBLS, the “Resort Entities”) to manage it. At that time, Charles C. Hickox (“Hickox”) was a general partner of HBLS, as well as a shareholder of both LIR and MBM. After making an initial payment to the Friedland Group, HBLS defaulted under the Stock Purchase Agreement. HBLS refused to transfer the LIR Stock back to the Friedland Group in accordance with the Pledge Agreement. The Friedland Group therefore obtained a judgment in 1993 in New York state court, which ordered HBLS to do so. But on December 27, 1993, without having transferred the LIR Stock, HBLS filed a voluntary petition for bankruptcy under chapter 11 of the Bankruptcy Code that stayed the Friedland Group’s enforcement of the state court’s judgment. On August 15, 1995, the Court referred the dispute between the Friedland Group and HBLS to mediation and appointed Barry M. Monheit as mediator (the “Mediator”). 2. The Settlement Agreement and the Mediator’s Determinations Under the guidance of the Mediator, Friedland, on behalf of the Friedland Group, and Hickox, on behalf of LIR and MBM, and as a partner in HBLS and a shareholder in LIR and MBM, entered into a settlement agreement (the “Settlement Agreement”), which the Court approved on June 20, 1996. The Settlement Agreement (i) required HBLS to transfer its shares of LIR and MBM to the Mediator to hold in escrow as security for any amount the Mediator deemed HBLS owed the Friedland Group, and (ii) prohibited the Resort Entities or their equity holders from taking any action adversely affecting any right or interest of the Friedland Group (the “Friedland Group Protection Provision”). Pursuant to the authority bestowed on him by the Settlement Agreement and in accordance with the Pledge Agreement, the Mediator determined that HBLS owed the Friedland Group $4.6 million (the “Settlement Debt”). On January 9, 1997, Hickox registered three charges (the “Charges”) on LIR’s leasehold interest in the Cap Juluca Property based on personal loans (the “Personal Loans”) he made to LIR. Subsequently, as a result of HBLS defaulting on its payments of the Settlement Debt, the Mediator sold the LIR and MBM stock held in escrow at an auction to Friedland for $500,100.00. Once Friedland obtained ownership of the LIR Stock, on September 17,1997 (the “Stock Sale Date”), he asserted that Hickox’s Charges on the Cap Juluca Property violated the Friedland Group Protection Provision. The Mediator agreed with Friedland, issuing a final determination (the “Final Award”) that held, 637inter alia that Hickox’s registering his Charges on the Property violated the “terms, spirit and intent” of the Settlement Agreement. On May 7, 1998, the Court entered the Final Award as an Order of the Court. On June 9, 1998, Friedland obtained a deficiency judgment against the Resort Entities for $4.3 million—approximately the same amount as the Settlement Debt. In July of 1998, the Mediator issued an amplification (the “Amplification”) of the Final Award to clarify certain issues. The Amplification deemed Hickox to be an unregistered charge holder on the Cap Juluca Property and prohibited his reliance on the Charges. The Amplification also noted that Hickox was no longer an equity holder of any of the Resort Entities as of the Stock Sale Date. Since the Friedland Group Protection Provision prohibited only the Resort Entities and their equity holders from taking action adverse to the Friedland Group, the Mediator found that Hickox was free to re-register his Charges on the Cap Juluca Property. It appears, however, that he never did so. Meanwhile, on October 24, 2003, based on the deficiency judgment of $4.3 million owed to the Friedland Group as a result of the Resort Entities’ default, Friedland registered his own charges against the Cap Juluca Resort. 3. Anguillan Litigation Regarding the Charges and Underlying Loans Over the course of the past decade, LIR and Hickox have litigated issues relating to Hickox’s Charges on the Cap Juluca Property in multiple Anguillan courts. The Eastern Caribbean Supreme Court originally determined that two of the three Personal Loans were the product of self-dealing and therefore void. See Hickox v. Leeward Isles Resorts Ltd., AXAHCV/1998/0097, at p. 73 (Eastern Caribbean Supreme Court, High Court of Justice, Anguilla, July 8, 2008)2 (finding the loans “void for want of authority”). Thus, the two Charges based on the void Personal Loans were also found to be invalid. Id. (“The Registration of the First and Second Charges by Mr. Hickox over the leasehold interest of LIR in and around January, 1997 is hereby set aside.... ”). The court, however, considered the other Charge (the “Third Charge”) to be valid. Id. at 74. In addition, referring to the Mediator’s Amplification, the Court held the Third Charge effective only from the Stock Sale Date, after which Hickox was no longer an equity holder in LIR. Id. (“The Registration of the Third Charge is hereby deemed to be effectively registered only as from the date following the sale of the LIR shares pursuant to the Settlement Agreement.”). As such, the court found that the Mediator’s Amplification only delayed the effective date of the Third Charge to the Stock Sale Date and that, under Anguillan law, there was no need for Hickox to refile that Charge. On appeal, the Anguillan appellate court found that the two Personal Loans the Eastern Caribbean Supreme Court held to be the product of self-dealing were, in fact, ratified by LIR and therefore valid. See Leeward Island Resorts Ltd. v. Hickox, HCVAP 2008/003, at p. 26 (Anguillan Court of Appeal, March 22, 2010)3 (setting aside “the learned [trial] judge’s ruling and declaring] that both the First and Second Transactions are valid and do not offend against the rule against self-dealing.”). 638The Appellate court left unaltered the lower court’s conclusion regarding the effective date of the Third Charge. Id. at 33 (discussing the trial judge’s findings and conclusions relating to the Charges and determining that since “[tjhese grounds were not pursued at the hearing, and no skeleton arguments addressed them I have concluded therefore that they were abandoned.”). Thus, after years of litigation on issues relevant to the Motion, Anguillan courts have, based on the Mediator’s Amplification, given effect to the Charges as of the Stock Sale Date and have not required Hickox to re-file the Charges. 4. The Anguilla Liquidation Proceedings and the Instant Motion In April of 2008, Friedland sold his interest in LIR and MBM to Cap Juluca Properties, Ltd. (the “Purchaser”). The Purchaser agreed to make payments to Hickox towards repayment of the Personal Loans, but defaulted on those payments. In 2011, the Cap Juluca Resort went into liquidation in large part because it could not pay its debts to Hickox, who intends to conduct a secured creditor sale of the Cap Juluca Property. On February 27, 2012, Hickox hired an auctioneer and began marketing the Property. An auction is currently scheduled for May 2, 2012 (the “Hickox Auction”). Friedland contends that this Court’s orders and the Mediator’s binding determinations bar Hickox from relying on the Charges he filed while an equity owner of LIR, and, accordingly, Hickox is not a registered charge holder with respect to the Cap Juluca Property. In turn, Fried-land moves to reopen the case under section 350(b) of the Code to file a motion to enforce this Court’s orders and the Mediator’s determinations to enjoin the Hickox Auction from proceeding. Hickox counters that there is no reason to reopen the case, as he is not in violation of the Court’s orders, this dispute lacks a close nexus to the HBLS bankruptcy, and there are alternative fora where the parties’ disputes can be litigated. A hearing was held on April 17, 2012. DISCUSSION Bankruptcy Rule 5010 provides that “[a] case may be reopened on motion of the debtor or other party in interest pursuant to § 350(b) of the Code.” Fed. R. BankrP. 5010. Bankruptcy Code section 350(b) in turn provides that “[a] case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause.” 11 U.S.C. § 350(b). Friedland argues that the case should be reopened “for other cause.” While the Code does not define “other cause,” courts ordinarily consider equitable concerns, the merits of the underlying claim, and the availability of relief in other fora. See Batstone v. Emmerling (In re Emmerling), 223 B.R. 860, 864 (2d Cir. BAP 1997) (explaining that a bankruptcy court “may consider numerous factors including equitable concerns” under section 350(b)); Katz v. I.A Alliance Corp. (In re I. Appel Corp.), 300 B.R. 564, 571 (S.D.N.Y.2003); Mid-City Bank v. Skyline Woods Homeowners Assoc. (In re Skyline Woods Country Club, LLC), 431 B.R. 830, 835 (8th Cir. BAP 2010) (“The availability of relief in an alternative forum is a permissible factor on which to base a decision not to reopen a closed bankruptcy case.”). Ultimately, the decision to reopen a case is at the broad discretion of the bankruptcy court. See Emmerling, 223 B.R. at 864 (“[T]he decision to reopen or not is discretionary with the court”). In view of the facts at hand, the Court does not find cause to re-open the case under section 350(b) of the Code. 1. Equitable Considerations The equitable considerations surrounding the present Motion weigh against 639re-opening the case. In this respect, “courts typically examine the benefit to the debtor, the prejudice to the would-be defendant in the litigation, and the benefit to the creditors.” In re I. Appel Corp., 300 B.R. at 571. The Motion arises from the chapter 11 case of HBLS commenced on December 27, 1993 and closed by Final Decree on March 29, 1999. The case was reopened in 2000 to apportion the liability between the Resort Entities to Friedland before being closed again by Final Decree on June 3, 2008. In short, the Debtor’s assets were fully administered in this case more than a decade ago. Moreover, the instant Motion revolves around a dispute between two non-debtor entities. Reopening the case to consider this dispute would therefore not benefit the Debtor’s estate or its creditors. Accordingly, there is no equitable basis for reopening the case. 2. The Merits of the Underlying Claim In determining whether “cause” exists to reopen a bankruptcy case, “it is appropriate for a bankruptcy court to consider the merits of the underlying claim.” In re Kassover, 448 B.R. 625, 631 (S.D.N.Y.2011). Specifically, “where the underlying claim is certain to fail upon a reopening of the proceedings, a bankruptcy court may properly deny the motion.” Id.; see also State Bank of India v. Chalasani (In re Chalasani), 92 F.3d 1300, 1307 (2d Cir.1996) (“[I]f the decision not to reopen was bottomed on a finding that the default judgment could not be set aside, such is a permissible basis to deny relief, because reopening in that event would be meaningless.”); Emmerling, 223 B.R. at 865 (“The statutory ‘cause’ to reopen under section 350(b) in this case depends upon whether cause exists to vacate the default judgment, since that is the sole purpose of reopening the bankruptcy case.”). Friedland sets forth at least two claims that are certain to fail upon a reopening of the proceedings. First, Friedland contends that the Court must reopen the case to interpret its prior orders because Hickox intends to argue in Anguilla that the Mediator’s prior determinations are not binding on him at all. But the courts in Anguilla have previously determined that Hickox’s charges have effect and that he is bound by the Mediator’s determinations. See Leeward Island Resorts Ltd. v. Hickox, HCVAP 2008/003, at pp. 9-10 (Anguillan Court of Appeal, March 22, 2010); Leeward Isles Resorts Ltd. v. Hickox, AXAHCV/1998/0097, at pp. 15-16 (Eastern Caribbean Supreme Court, High Court of Justice, Anguilla, July 8, 2008). Indeed, both of these courts applied collateral estoppel to a decision by the District Court for the Southern District of New York finding Hickox bound by the Mediators determinations. See Hickox v. Friedland (In re HBLS, L.P.), 01-CIV-2025, 2001 WL 1490696, at 8-9 (S.D.N.Y. Nov. 21, 2001). Accordingly, the Anguillan courts’ accounting for the Mediator’s determinations suggests that reopening the case in order to ensure the application of the Mediator’s determinations in Anguilla would be “meaningless.” See Emmerling, 223 B.R. at 865. Second, Friedland asserts that Hickox is in violation of the Mediator’s finding that Hickox may not rely on the Charges for any purpose. But this assertion is merit-less because the Mediator also found that, as of the Stock Sale Date, Hickox was free to re-register the Charges “subject only to the requirements of Anguillan law,” see Amplification of Mediator’s Prior Award,4 ¶ 5, and Anguillan courts subsequently gave effect to the Charges as of the Stock 640Sale Date without requiring their re-registration. Specifically, the Eastern Caribbean Supreme Court deemed the Third Charge effective as of the Stock Sale Date, see Hickox v. Leeward Isles Resorts Ltd., AXAHCV/1998/0097, at p. 74, and the Anguilla Court of Appeals validated the other two Charges, see Leeward Island Resorts Ltd. v. Hickox, HCVAP 2008/003, at pp. 26, 33. The Court of Appeals also declined to consider the Eastern Caribbean Supreme Court’s treatment of the effective date of the third Charge. Id. Each of these courts also accounted for and applied the Mediator’s determinations in their decisions. Friedland’s contention is therefore “certain to fail,” as the Mediator held that the Charges could be re-registered under Anguillan law and Anguillan courts, with due consideration of the Mediator’s findings, have permitted the Charges without requiring their re-registration. See Kassover, 448 B.R. at 631. Throughout much of the above Anguillan proceedings, LIR was owned and controlled by Friedland. Therefore, granting the Motion in order to question Hickox’s Charges would be concomitant to permitting Friedland an end-run around some of the sound findings of the Anguillan courts.5 This Court, however, declines to grant him such an opportunity to re-litigate the same dispute under the guise of enforcing prior orders and determinations. 3. Availability of Relief in Other Fora Courts routinely decline to exercise their discretion to reopen bankruptcy cases where the parties are seeking or could seek relief in a competent alternative forum. See, e.g., In re Skyline Woods Country Club, LLC, 431 B.R. at 835-36 (motion to reopen denied where state court had concurrent jurisdiction to adjudicate action to enforce bankruptcy court’s former sale order); In re Antonious, 373 B.R. 400, 407 (Bankr.E.D.Pa.2007) (motion to reopen denied where discharge injunction could be raised as affirmative defense in state court action); In re Otto, 311 B.R. 43, 45 (Bankr.E.D.Pa.2004) (motion to reopen denied where “a reasonable—-albeit not identical—alternative forum exists in the Tax Court” for resolution of discharge-ability dispute). Here, the courts of Anguilla have already handled or are available and competent to address Friedland’s concerns. Friedland seeks enforcement of prior orders of this Court and the Mediator’s determinations, but the courts of Anguilla, as discussed above, have already accounted for and given effect to those orders and determinations. To the extent that Fried-land argues that Anguillan law requires Hickox to re-register his Charges as of the Stock Sale Date, the Anguillan courts have held otherwise. But should Friedland nevertheless wish to pursue this argument or any other argument pertaining to Hickox’s Charges, the courts of Anguilla are available and competent to adjudicate these issues. There is thus no need for this Court to inject itself into proceedings that have already been or can be handled in Anguilla. Significantly, while advised of or served with the Motion, neither the Mediator, nor the LIR liquidators, nor any other interested party appeared or took a position with respect to the instant quest to reopen. At bottom, (i) the dispute between Hick-ox and Friedland pertains to a sale in Anguilla of Anguillan property subject to *641Anguillan charges, (ii) there is a high likelihood that this dispute’s outcome would not have any effect on HBLS’s twice-closed (fully administered) estate, (iii) Anguillan courts have previously deferred to and applied this Court’s orders, and Fried-land has essentially litigated these same issues in Anguilla and lost. Accordingly, resolution of the Friedland—Hickox disputes is clearly more appropriate in Anguilla, whose courts are and have been host to the claims of both the movant and respondent. The Court, therefore, does not find cause to reopen the case under section 350(b) of the Code. CONCLUSION In light of the above, the Motion is hereby DENIED. IT IS SO ORDERED. . The underlying property is owned by the Anguillan government, which has granted a 99-year leasehold interest to LIR. See Motion of Dion Friedland for an Order Pursuant to Section 350 of the Bankruptcy Code Reopening the Bankruptcy Case (Dkt. No. 172), at ¶ 3. . This decision is attached as exhibit 7 to the Declaration of Daniel S. Lubell in Support of the Objection of Charles C. Hickox to the Motion to Reopen the Bankruptcy Case [hereinafter the "Lubell Declaration”], Dkt. No 180. . This decision is attached as exhibit 8 to the Lubell Declaration. . The Mediator’s Amplification is attached as exhibit 12 to the Declaration of Donald J. Kravet in Support of Motion to Reopen Chapter 11 Case, Dkt. No. 174. . In fact, the Eastern Caribbean Supreme Court specifically addressed the issue of whether the Settlement Agreement precluded LIR, given that it was owned by Friedland, from challenging Hickox’s Charges. Hickox v. Leeward Isles Resorts Ltd., AXAHCV/1998/0097, at pp. 51-53.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494676/	OPINION ON RECONSIDERATION JUDITH H. WIZMUR, Chief Judge. The debtor’s state court divorce attorney moves here for reconsideration of this court’s previous order directing him to turn over funds that he is holding in an attorney escrow account, on behalf of the debtor, to the parents of the debtor’s estranged wife. In response to this court’s inquiry, the Chapter 7 trustee has indicated his intention to abandon the bankruptcy estate’s interest in the funds in question. For the reasons stated below, the August 16, 2011 order directing turnover will be vacated. The court has confirmed that the bankruptcy estate no longer holds an interest in the property at issue, and the court abstains from any further consideration of the proper disposition to be afforded to the escrowed funds. The parties are free to pursue their remedies in state court. FACTS The debtor, Frederick Vanhook, filed an individual voluntary Chapter 7 bankruptcy petition on October 30, 2010. Among his unsecured creditors, the debtor scheduled a debt owed to Michael T. Wolf, Esq., his divorce counsel, for attorneys’ fees in the amount of $3,007, and a debt owed to the debtor’s in-laws, Yakov and Darlene Vaysman, in the amount of $12,691 for an unspecified purpose.1 Thomas J. Subranni was appointed as the Chapter 7 trustee, and on December 20, 2010, he filed a Report of No Distribution. The debtor subsequently received his Chapter 7 discharge on July 22, 2011. One week earlier, on July 14, 2011, the Vaysmans moved pro se before this court to compel the debtor to release certain funds held in escrow to them. The movants claimed that the debtor’s divorce counsel, Michael Wolf, was holding $12,634 in an attorney escrow account that reflected the amount of a prepetition promissory note owed to them. They asserted that the funds have been available for release for over a year, that this money is not property of the debtor’s bankruptcy estate, and that it should be released to them. The Vaysmans attached a copy of a promissory note (hereinafter “Note # 1”), in which Frederick Vanhook promised to pay to Yakov Vaysman $12,634 from his “law suit settlement funds” to reimburse Mr. Vaysman for money that the debtor had borrowed to cover various household related expenses as delineated in the note.2 Note # 1 expressly authorized the debtor’s personal injury counsel, Mr. M. Russo, “to issue a check [in the] amount [of] $12,634.00 made out to Yakov Vaysman from my settlement funds.” Note # 1 was signed and dated March 16, 2009, and notarized by the debtor’s personal injury counsel, Michael Russo.3 The Vaysmans also included a copy of a second promissory note (hereinafter “Note # 2”), in which the debtor promised to pay Mr. and Mrs. Vaysman an estimated $1,900 for child care services from his law suit settlement fund.4 Note #2 states that the Vaysmans would contact Mr. Russo to provide the exact amount of the child care services debt and that Mr. Russo was 697authorized “to issue a check on [sic] that amount made out to Yakov Vaysman from my settlement funds.” Note #2 was signed and dated August 14, 2009. The debtor’s personal injury action was resolved, resulting in a payment to the debtor on or about October 28, 2009.5 At about that same time, Mr. Vaysman apparently initiated a string of email correspondence with Mr. Russo, the debtor’s personal injury counsel, seeking to have the two promissory notes paid.6 Mr. Vaysman asserted that the debtor now owed $3,900 in child care services. Approximately seven months later, in May 2010, he revised that amount, raising it to $7,200. Mr. and Mrs. Vanhook were involved in a contentious divorce proceeding during that time. Mr. Vanhook apparently moved to compel Mrs. Vanhook to pay half of an expert witness retainer fee, $4,500, to a Dr. Ronald Gruen. Mrs. Vanhook asserted that she was financially unable to afford her share of the retainer. The matter came before the Hon. Patricia M. Wild, J.S.C., who issued an order on May 28, 2010, noting that Michael Russo, Esq. was “the escrow agent for the $20,000 in Defendant’s worker compensation settlement funds,” and directing that $7,200 be released to the Vaysmans and $4,500 be paid to Dr. Ronald Gruen.7 The court ordered further that “[t]he remaining $12,634 in this account will abide the action in the special civil part or joinder in the matrimonial action.”8 Mr. Vaysman promptly emailed Mr. Russo on May 28, 2010, asserting that the state court had directed the turnover of $7,200 “related to the child care expenses,” attaching a copy of the state court order, and explaining that he had commenced a separate action to recover on Note # 1, now estimated to be due in the amount of $13,847.54 ($12,634 principal + interest, court fees and other expenses).9 On June 2, 2010, Mr. Russo responded to Mr. Vaysman by email, stating that he was forwarding a check to Mr. Vaysman in the amount of $7,200, pursuant to the court order, and that he was forwarding a check in the amount of $4,500 to debtor’s counsel, presumably Mr. Wolf, “for payment of some doctor’s expense.”10 Mr. Russo objected to being treated as an “escrow agent” in the matter and informed Mr. Vaysman that he was forwarding the remaining monies to the debtor’s attorney’s escrow account and that he did “not wish to have any further involvement in this matter.”11 698He added at the end of his message, that: “Additionally, the Court Order is wrong on its face as to the remaining amounts.” 12 Mr. Russo followed up with a letter to Mr. Wolf, also dated June 2, 2010, enclosing a check for $8,300, representing the remaining funds in the debtor’s personal injury settlement account. In his letter, he explained: the Court order is wrong on its face since the remaining amount of monies held in the escrow account was $20,000.00 and $7,200.00 has been paid to the Vaysman’s for child care services and $4,500.00 was sent directly to you payable to Dr. Gruen, for some doctor expense, leaving $8,300.00 which I am now distributing to your trust account. The Court order incorrectly lists ... the amount remaining [as] over $12,000.00.13 Approximately six months, later Mr. Van-hook filed for bankruptcy protection in this court. The Vaysmans’ motion for turnover was heard before this court on August 16, 2011. At that time, the Vaysmans appeared pro se, with their daughter Marsha Vanhook, the debtor’s estranged wife, in support of the motion. Mrs. Vanhook stated that the motion was part of “a bitter divorce” and that the money sought by the Vaysmans “has been [held] in a trust fund for [her] parents for close to two years now and [Mr. Vanhook’s] matrimonial attorney is just holding it up.” Neither Mr. Vanhook nor his attorney, Mr. Wolf, appeared at this hearing. It is acknowledged that Mr. Wolf was never served with a copy of the motion. The court was informed at that time that the Chapter 7 trustee would not be taking a position on the motion and he did not appear. The Vaysmans’ uncontested motion for turnover was granted and an order was entered to that effect on the same day. On August 23, 2011, Mrs. Vaysman hand delivered the turnover order to Mr. Wolf and requested the release of the monies being held. Mr. Wolf refused to release the funds because he disputed the amount of funds that he was supposedly holding on behalf of the debtor. On August 25, 2011, Mr. Wolf moved for reconsideration of the August 16, 2011 order requiring the turnover of the escrowed funds in the amount of $12,634 to the Vaysmans. Mr. Wolf asserted that the Vaysmans held at best an unsecured claim against the debtor, which was subject to the debtor’s Chapter 7 discharge. He maintained that the Vaysmans have not provided proof of a security interest in the contested funds or properly perfected a state court judgment lien against the debt- or. Moreover, he pointed out that they have not, as of yet, sought a determination of nondischargeability before this court. Alternatively, Mr. Wolf opined that the funds in question were eligible for exemption by the debtor pursuant to 11 U.S.C. § 522(d)(ll)(D), or in the absence of such relief, that the monies should be turned over to the Chapter 7 trustee. He suggested as well that the $7,200 previously paid to the Vaysmans was recoverable by the trustee as a preferential payment to an insider. In response, Mrs. Vanhook’s divorce attorney, Frank H. Rose, Esq., filed a letter, at the request of the Vaysmans, in an attempt to “clarify” the state court proceedings and the proper amount that he believes should be in Mr. Wolfs escrow account. Mr. Rose acknowledged that at one point, the amount of funds held in escrow would have decreased from $20,000 to $8,300 ($20,000-$7,200-$4,500 = $8,300), but he claimed that Dr. Gruen was later directed to disgorge all but $1,000 of his initial $9,000 retainer and that between 699$3,500 and $4,500 should have been deposited back into the escrow account.14 This would mean that between $11,800 and $12,800 should now be held in escrow. Mr. Rose also believed that the child care expenses asserted as due by the Vaysmans should be in the neighborhood of approximately $5,000, assuming the parties continued to abide by the $200 a week rate listed in Note # 2.15 The motion for reconsideration was heard in court on September 19, 2011. At the outset, this court determined that it was appropriate to require notice of the original motion for turnover to have been served on Mr. Wolf. Because notice was not afforded at that time, the court agreed to reconsider the Vaysmans’ motion for turnover. To clarify the status of the es-crowed funds in the bankruptcy context, the court directed that the Chapter 7 trustee provide a written response addressing the estate’s interest in the funds in question. In the event that the trustee had no interest in recovering the funds for the benefit of the estate, the court stated that it would release any bankruptcy claims to the escrow and redirect the matter to the state court. October 11, 2011 was set as a control date with no appearances required if a written submission was received from the Chapter 7 trustee prior to the scheduled hearing date. In a letter dated September 26, 2011, Mr. Subranni stated that in light of “the personal injury nature of the trust funds, the complex and competing issues in the matrimonial court, and anticipated substantial administrative expenses that would be necessary to sort out the rights and liabilities of the various parties,” the trustee was abandoning any interest of the bankruptcy estate in the escrowed funds. In response, the Vaysmans and Marsha Vanhook each filed letters opposing resolution of the matter in the New Jersey Superior Court and asking that this court resolve the matter. On October 11, 2011, the Vaysmans and Mrs. Vanhook returned to court. Neither Mr. Gottesman, Mr. Wolf, nor the Chapter 7 trustee appeared. The court questioned whether the language in the promissory note was enforceable, perhaps as an assignment, and determined to resolve the matter by written opinion.16 Upon more extensive review, I have determined to abstain from resolving the remaining dispute between the parties, leaving the parties to pursue their remedies in state court. DISCUSSION At the hearing on September 19, 2011, it was determined that if the Chapter 7 trustee abandoned any interest that the bankruptcy estate might hold in the underlying funds at issue, resolution of the matter would be redirected to the New Jersey Superior Court. The trustee has since indicated his intention to abandon any interest in the escrowed funds, although no formal action has been taken to effect the abandonment. A. Abandonment. In the normal course, property of the estate may be abandoned in one of 700three ways: (1) by the trustee, after notice and a hearing, where it is burdensome or “of inconsequential value and benefit to the estate”; (2) by the court, on the request of a party in interest and after notice and a hearing; or (3) automatically upon the closing of the case if the property was scheduled but not administered by the trustee. 11 U.S.C. § 554(a-c). In this case, there has been no “formal” abandonment by the trustee, no request by a party in interest, or any notice or an opportunity for a hearing. Moreover, the property in question was never scheduled. Nevertheless, where the Bankruptcy Code provides for the raising of an issue by a party in interest, the court is authorized under 11 U.S.C. § 105(a) to “sua sponte, tak[e] any action or mak[e] any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of the process.” On this record, in light of the trustee’s letter dated September 26, 2011 unequivocally stating his intention “to abandon any interest the Debtor Estate may have in the funds,” issued in response to this court’s inquiry, I will hold that the escrowed funds in question shall be deemed abandoned and no longer constitute property of the debtor’s estate. 11 U.S.C. § 554(d). See In re Henderson, 245 B.R. 449, 454 (Bankr.S.D.N.Y.2000) (if the property is not scheduled or abandoned in the normal course, “the court can order a different result”). No further notice need be provided or a hearing scheduled. See Fed. R.Bankr.P. 6007(a) (“Unless otherwise directed by the court, the trustee ... shall provide notice”). As abandoned property, the property vests in the debtor. Morlan v. Universal Guar. Life Ins. Co., 298 F.3d 609, 617 (7th Cir.2002) (property reverts to the debtor “nunc pro tunc”); In re Dewsnup, 908 F.2d 588, 590 (10th Cir.1990), aff'd, 502 U.S. 410, 112 S.Ct. 773, 116 L.Ed.2d 903 (1992) (“Following abandonment, ‘whoever had the possessory right to the property at the filing of bankruptcy again reacquires that right.’ ”). The Vaysmans are free to pursue their claims against those funds, premised on the argument that the language in the promissory notes accomplished a prepetition transfer of the debt- or’s interest in those funds, by way of assignment or otherwise. The question of an assignment or a security interest in property that is no longer property of the bankruptcy estate, governed as it is by state law, is best left for resolution through the state court process. Abstention is appropriate in this matter, which would permit the parties to resume their quest for relief before the appropriate state court forum.17 B. Abstention. Permissive or discretionary abstention may be raised either by the court sua sponte or by motion of a party. Bricker v. Martin, 265 Fed.Appx. 141 (3d Cir. 2008); In re Gober, 100 F.3d 1195, 1207 n. 10 (5th Cir.1996). This doctrine allows a court to abstain from hearing a particular matter arising under title 11 or arising in or related to a case under title 11, in the interest of justice or in the interest of comity with state courts or respect for state law.18 28 U.S.C. § 1334(c)(1). Vari701ous factors have been developed to assist courts in determining when or whether to exercise their discretionary abstention power. Some courts rely upon a twelve factor test, while others utilize a seven factor test. See Shalom Torah Centers v. Philadelphia Indem. Ins. Cos., No. 10-6766(FLW), 2011 WL 1322295, 4 (D.N.J. Mar. 31, 2011) (recognizing both approaches and noting that the “two sets of factors are substantially similar”). The twelve factor test focuses on: (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. . Id. at 4 n. 6 (citing to In re Earned Capital Corp., 331 B.R. 208, 220 (Bankr. W.D.Pa.2005)). See also In re Direct Response Media, Inc., 466 B.R. 626, 658-59 (Bankr.D.Del.2012); In re Lacey, No. 10-19903-JNF, 2011 WL 5117767, 9 (Bankr.D.Mass. Oct. 27, 2011). The result is a balancing test in which each of the relevant factors is weighed and analyzed on a case-by-case base, since not all of the factors may be relevant or present in a given case. The factors should be applied “flexibly, for their relevance and importance will vary with the particular circumstances of each case, and no one factor is necessarily determinative.” In re Earned Capital Corp., 331 B.R. 208, 221 (Bankr.W.D.Pa. 2005) (quoting In re Chicago, Milwaukee, St. Paul & Pacific R.R. Co., 6 F.3d 1184, 1189 (7th Cir.1993)). In this case, the majority of the factors weigh in favor of abstention. The court’s decision to abstain in this matter would have no impact on the administration of the bankruptcy estate. The debtor’s case is a no-asset Chapter 7 proceeding, and he has already received his discharge. There was no distribution to creditors and all unsecured claims have been discharged. In the event that the state court determines that the Vaysmans hold only an unsecured claim, their claim will also be discharged.19 Alternatively, if the state court determines that the Vaysmans hold a secured claim or an absolute assignment of the funds, or otherwise, the Vaysmans will have recourse only to the escrowed funds in question. The debtor did not choose to exempt those funds, the Chapter 7 trustee 702expressed no interest, and this court has determined that those monies have been abandoned. The bankruptcy estate no longer asserts any interest in these funds. The automatic stay is no longer in effect. See 11 U.S.C. § 362(c). The extent to which state law issues predominate over bankruptcy issues, the presence of a related proceeding commenced in state court, a jurisdictional basis, other than 28 U.S.C. § 1334, and the presence of non-debtor parties in the proceeding, also all weigh in favor of abstention. The determination of property rights in the debtor’s assets is a question of state law. Florida Dept. of Revenue v. Piccadilly Cafeterias, Inc., 554 U.S. 33, 51, 128 S.Ct. 2326, 2339, 171 L.Ed.2d 203 (2008); Travelers Cas. & Sur. Co. of Am. v. Pacific Gas & Elec. Co., 549 U.S. 443, 450-51, 127 S.Ct. 1199, 1205, 167 L.Ed.2d 178 (2007) (“we have long recognized that the ‘ “basic federal rule” in bankruptcy is that state law governs the substance of claims, Congress having “generally left the determination of property rights in the assets of a bankrupt’s estate to state law.” ’ ”) (citations omitted); Raleigh v. Illinois Dept. of Revenue, 530 U.S. 15, 20, 120 S.Ct. 1951, 1955, 147 L.Ed.2d 13 (2000) (“Creditors’ entitlements in bankruptcy arise in the first instance from the underlying substantive law creating the debtor’s obligation, subject to any qualifying or contrary provisions of the Bankruptcy Code.”). As noted earlier, there is a pending divorce action before the state court in which the underlying orders regarding this matter were first entered. The parties contesting this matter, the Vaysmans and Mr. Wolf, are all non-debtors.20 Jurisdiction in this matter exists, if at all, pursuant to 28 U.S.C. § 1334(b). In addition, the matter is only remotely connected to the debtor’s bankruptcy case where the trustee and the debtor have asserted no interest in the property, the property has been abandoned and the debtor has received his discharge. The resolution of the dispute does not involve allowance of a claim, and no longer involves turnover or potential liquidation of property of the estate. See 28 U.S.C. § 157(b)(2)(B), (E) and (O). While Mrs. Vanhook asserts that Mr. Wolf is forum shopping, it should be noted that Mr. Wolf was not the party who initially chose to bring this matter before the bankruptcy court. In sum, the court has confirmed that the bankruptcy estate no longer holds an interest in the property at issue, and that the property has been abandoned. This court must exercise its discretionary authority to abstain from deciding the issues regarding the final disposition of the funds held in escrow by Mr. Wolf. The parties are free to pursue their interests before the appropriate state court forum. Counsel for Mr. Wolf shall submit an order in conformance with this opinion. . The debtor amended Schedule F on December 8, 2010 to add the Vaysman debt. . See also Motion for Reconsid., Exh. A. . The note was executed one week after Marsha Vanhook filed a complaint for divorce in the New Jersey Superior Court for Atlantic County, Chancery Division, Family Part on March 9, 2009. . See also Motion for Reconsid., Exh. B. . The Vaysmans attached a copy of what purports to be a Closing Statement regarding a civil action, presumably the personal injury suit, between the debtor and Long Island Rail Road Company, et at, in the Supreme Court of Kings County, New York. The matter was apparently resolved between the parties, resulting in a payment from the New Hampshire Insurance Co. on October 28, 2009 in the amount of $172,500. The debtor's share after associated fees and costs is represented to be approximately $93,000. . See also Motion for Reconsid., Exh. D. We make no ruling here on the evidentiary weight to be afforded the printouts of the purported email messages. We note that both parties have provided identical copies of the emails in question and that no one disputes their authenticity. We refer to them herein solely to aid in establishing the factual sequence of events. . See Motion for Reconsid., Exh. C. . Id. at ¶ (3). This mathematical calculation appears to be incorrect. It is noted that $20,000, the stated beginning balance, minus $7,200 to the Vaysmans and $4,500 to Dr. Gruen would result in a remaining balance of $8,300, rather than the $12,634 reflected in the order. . This action was apparently stayed by the debtor's bankruptcy filing and allegedly dismissed. See Original Motion Papers. . Motion for Reconsid., Exh. E. . Id. . Id. . Motion for Reconsid., Exh. E. . The amount to be deposited would depend upon the allocation of the $1,000 payment to Dr. Gruen between Mr. and Mrs. Vanhook and whether any amount had been refunded directly back to Mr. Vanhook. . In addition, Mr. Rose believes that the state court ordered payment of $7,200 should be applied toward the obligation under the first promissory note, rather than as discussed by Judge Wild, in satisfaction of the second promissory note. . The court mistakenly believed at that time that the debtor had claimed an exemption in these funds; however, there is no indication in the record that the debtor was, claiming an exemption. . It should be noted that if the state court determines that the Vaysmans do not hold a valid assignment or security interest in the escrowed funds, then their claim is an unsecured claim that has been discharged in the debtor's bankruptcy case. See 11 U.S.C. § 524. . In contrast, mandatory abstention, pursuant to 28 U.S.C. § 1334(c)(2), requires a timely motion by a party and may not be raised sua sponte by the court. Vision Bank v. Platinum Invs., L.L.C., No. 11-00093-KD-B, 2011 WL 2144547, 3 (S.D.Ala. May 11, 2011); 701Whitney Lane Holdings, LLC v. Don Realty, LLC, No. 08-cv-775, 2010 WL 1257879, 4 (N.D.N.Y. Mar. 26, 2010) (“In other words, mandatory abstention may not be raised by the court sua sponte at any time.”). No such motion has been brought before the court. . As noted earlier, the Vaysmans have not sought a determination of nondischargeability and characterization of their claim as a "domestic support obligation” is unlikely. . Mrs. Vanhook has appeared on behalf of her parents, the Vaysmans, but she is not a parly to the motion. It is noted that she did file an individual voluntary Chapter 7 proceeding on October 5, 2011, case number 11-39191/JHW. Her status as a debtor in her own proceeding has no bearing here.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488535/	Fourth Court of Appeals San Antonio, Texas November 16, 2022 No. 04-22-00742-CR EX PARTE Gustavo VELAZQUEZ-CRUZ From the 49th Judicial District Court, Zapata County, Texas Trial Court No. 11,803 Honorable Jose A. Lopez, Judge Presiding ORDER The clerk’s record and the reporter’s record were due to be filed in this court on October 21, 2022. After the due date, the Zapata County District Clerk and court reporter Cynthia M. Perez filed a notification of late record. The notices requested additional time to file the record. The requests are granted. The clerk’s record has now been filed as of November 16, 2022. The reporter’s record is due on November 28, 2022. _________________________________ Patricia O. Alvarez, Justice IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said court on this 16th day of November, 2022. ___________________________________ Michael A. Cruz, Clerk of Court	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488537/	Fourth Court of Appeals San Antonio, Texas November 15, 2022 No. 04-22-00738-CR EX PARTE Juan Luis BALTAZAR-PEREZ From the 49th Judicial District Court, Zapata County, Texas Trial Court No. 11,799 Honorable Jose A. Lopez, Judge Presiding ORDER On November 7, 2022, the trial court clerk filed a notification of late clerk’s record. The clerk’s record has now been filed. Therefore, the notification of late clerk’s record is NOTED. _________________________________ Liza A. Rodriguez, Justice IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said court on this 15th day of November, 2022. _________________________________ Michael A. Cruz, Clerk of Court	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488538/	Fourth Court of Appeals San Antonio, Texas November 15, 2022 No. 04-22-00738-CR EX PARTE Juan Luis BALTAZAR-PEREZ From the 49th Judicial District Court, Zapata County, Texas Trial Court No. 11,799 Honorable Jose A. Lopez, Judge Presiding ORDER Court reporter Cynthia Perez Lenz has filed a notification of late reporter’s record, requesting a thirty-day extension. We GRANT the request and ORDER the reporter’s record to be filed by December 1, 2022. _________________________________ Liza A. Rodriguez, Justice IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said court on this 15th day of November, 2022. _________________________________ Michael A. Cruz, Clerk of Court	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488544/	State of New York Court of Appeals This memorandum is uncorrected and subject to revision before publication in the New York Reports. No. 107 Petróleos de Venezuela S.A., et al., Appellants, v. MUFG Union Bank, N.A. et al., Respondents. Michael J. Gottlieb, for appellants. Walter Rieman, for respondents. Certification of questions by the United States Court of Appeals for the Second Circuit, pursuant to section 500.27 of this Court's Rules of Practice, accepted and the issues presented are to be considered after briefing and argument. Acting Chief Judge Cannataro and Judges Rivera, Garcia, Wilson, Singas and Troutman concur. Decided November 22, 2022	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488554/	IN THE SUPERIOR COURT OF THE STATE OF DELAWARE CALVIN LARUE, ) ) Plaintiff, ) ) C.A. No.: N22C-07-092 FJJ v. ) ) PERMANENT GENERAL ) INSURANCE COMPANY, ) ) Defendant. Order Upon Consideration of Defendant’s Motion to Dismiss DENIED. Having considered Defendant Permanent General Insurance Company (“Permanent”)’s Motion to Dismiss and Plaintiff Calvin LaRue’s Response, it appears to the Court that: 1. Mr. LaRue filed a first party insurance action against Permanent, seeking no fault and uninsured motorist coverage for a car accident that occurred on December 1, 2020. Permanent has moved to dismiss the claim on the grounds that Mr. LaRue was not an insured at the time of the accident. 2. Permanent’s motion to dismiss is premised upon its contention that Mr. LaRue’s automobile insurance policy with Permanent did not take effect until one day after Mr. LaRue’s accident. According to Permanent, the record as it stands is adequate to grant dismissal because the policy declaration sheet shows an effective date of December 2, 2020. Permanent did not submit any other materials or affidavits with its motion. 3. In Mr. LaRue’s response to the motion, he attached a banking sheet indicating a payment was made to Permanent on November 28, 2020. 4. At this point in time, the parties have not engaged in discovery to determine: (1) whether the November 28 payment was for the Permanent policy in question; (2) when Permanent received the payment; and (3) when the policy should have become effective given the date of payment. 5. When matters outside the pleadings are included with the moving papers on a motion to dismiss under Superior Court Civil Rule 12(b)(6), the motion is considered to be a motion for summary judgment. 1 6. Summary judgment is not appropriate when the Court does not have sufficient facts in the record to enable it to apply the law to the facts before it. 2 7. Against this background, the Court finds summary judgment to be premature at this stage in the proceedings. The record, as it stands, is undeveloped and insufficient to answer the questions presented above. Therefore, Permanent’s motion is DENIED without prejudice. 8. The Court will permit a follow-up motion for summary judgment after the parties establish a more complete record. At that time, the Court will attempt to answer the above questions and address any other issues developed through discovery. IT IS SO ORDERED this 22nd day of November, 2022 /s/ Francis J. Jones, Jr. Francis J. Jones, Jr., Judge cc: Original to the Prothonotary Kenneth M. Roseman, Esquire Periann Doko, Esquire 1 See Pepper Reinholz Architects, Inc v. Owen Manor, L.P., 2006 WL 2338048, at 1 (Del. Super. June 15, 2006). 2 See Savor v. FMR Corp., 2003 WL 21054394, at 1 (Del. Super. Apr. 3, 2003).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488556/	IN THE COURT OF APPEALS OF THE STATE OF IDAHO Docket No. 49245 ADAM DAVID BODENBACH, ) ) Filed: November 22, 2022 Petitioner-Appellant, ) ) Melanie Gagnepain, Clerk v. ) ) THIS IS AN UNPUBLISHED STATE OF IDAHO, ) OPINION AND SHALL NOT ) BE CITED AS AUTHORITY Respondent. ) ) Appeal from the District Court of the Fourth Judicial District, State of Idaho, Ada County. Hon. Steven J. Hippler, District Judge. Judgment summarily dismissing petition for post-conviction relief, affirmed. Eric D. Fredericksen, State Appellate Public Defender; Sally J. Cooley, Deputy Appellate Public Defender, Boise, for appellant. Hon. Lawrence G. Wasden, Attorney General; Kenneth K. Jorgensen, Deputy Attorney General, Boise, for respondent. ________________________________________________ GRATTON, Judge Adam David Bodenbach appeals from the district court’s summary dismissal of his petition for post-conviction relief. Bodenbach contends the court erred in dismissing his claim of ineffective assistance of counsel for failing to hire an expert witness toxicologist. We affirm. I. FACTUAL AND PROCEDURAL BACKGROUND In January 2017, Bodenbach shot and killed Ryan Banks. The State charged Bodenbach with first degree murder, the commission of a crime with a firearm, and possession of cocaine. The following evidence was elicited during the jury trial. The night began with Bodenbach and a friend, Kimsey, injecting cocaine between 8:00 p.m. and 10:00 p.m. Eventually Banks joined them to hang out. Bodenbach and Kimsey began to argue about Bodenbach borrowing Kimsey’s car. The argument escalated with Kimsey pushing Bodenbach; Banks intervened by pushing Bodenbach backwards into Bodenbach’s room and 1 pinning him on his bed. Bodenbach testified that Banks’ hands were around his throat and choking him. Kimsey pulled Banks off Bodenbach, and Kimsey and Banks walked to Banks’ apartment. Kimsey stayed with Banks for a while and then went back to check on Bodenbach. Kimsey found Bodenbach in his room tearing his room apart by flipping the mattress and throwing clothes around while trying to find his handgun. Bodenbach accused Banks of stealing his handgun. Kimsey returned to Banks’ apartment, giving Bodenbach time to calm down. Bodenbach eventually found his handgun in his bedroom. Bodenbach testified he was worried Banks may harm Kimsey so he walked to Banks’ apartment with his handgun to check on Kimsey. Here Kimsey’s and Bodenbach’s stories diverge. Bodenbach testified he knocked on Banks’ door and announced himself as police; Bodenbach announced police because he was concerned how Banks may react. Bodenbach testified his handgun was in his jacket pocket at this time. Kimsey testified he did not hear a knock at the door; instead, Kimsey and Banks began to leave the apartment to smoke when Banks paused at the front door. Kimsey walked through the door and saw Bodenbach pointing his handgun in their direction. Kimsey testified he heard Bodenbach say, “You thought I was fucking kidding. You think I’m a fucking punk.” Banks said nothing but lunged towards Bodenbach. Bodenbach testified that Banks pulled a knife out of his waistband prior to lunging toward Bodenbach. Banks pushed Bodenbach into a pillar. From his angle, Kimsey could not see the front of Banks or Bodenbach’s handgun. Bodenbach claimed Banks had the knife about six inches away from his torso when he pulled his handgun out and pulled the trigger. Bodenbach shot Banks shortly after midnight. Kimsey testified he did not see a knife on Banks at any time that night. However, during his interview with law enforcement the night of Banks’ death, Kimsey reported Banks had been carrying a knife before he was shot. Immediately after the shooting, Bodenbach went back to his apartment, called 911, and reported he shot someone. Bodenbach placed his handgun on a table in his apartment and then purportedly took four milligrams of Xanax to calm down. The Boise Police Department responded to the scene. Officers encountered Bodenbach talking on the phone and holding a knife, which he later claimed he found on the ground near where he shot Banks. Bodenbach was arrested and subsequently transported to the hospital due to complaints of neck and back pain. Around 2:00 a.m., Boise Police Detective Pietrzak interviewed 2 Bodenbach at the hospital. Bodenbach later alleged he did not remember being interrogated by Detective Pietrzak. In response to Bodenbach’s testimony that he consumed cocaine and Xanax, the State called expert witness Dr. Gary Dawson. Dr. Dawson consults in pharmacology and the sub- discipline toxicology. Dr. Dawson testified to the effects of cocaine and opined that cocaine provides an instantaneous high that lasts a relatively short period--typically an hour or less with an hour and a half being the maximum. Dr. Dawson then testified about Xanax, dosage, and common effects. Dr. Dawson opined that four milligrams is a huge dose for someone who does not regularly take Xanax and that he would expect to see that person become unresponsive and sedated for possibly twelve to fourteen hours. Based upon his training and experience, and the accounts from eyewitnesses, Dr. Dawson did not believe Bodenbach was under the influence of Xanax after the shooting with a reasonable degree of medical certainty. The jury found Bodenbach guilty on all counts. Bodenbach timely petitioned for post- conviction relief. He raised six claims of ineffective assistance of counsel; one of which alleged trial counsel was ineffective for failing to consult with and present testimony of a toxicologist to rebut the State’s expert witness. Bodenbach provided his own affidavit that stated he told trial counsel he took four milligrams of Xanax after the shooting, causing him to have no memory of his statements to law enforcement, and he asked trial counsel to investigate the issue and acquire a toxicologist or pharmacologist to confirm Bodenbach’s account. Bodenbach also provided the declaration of Dr. Loring Beals. Dr. Beals is a consulting forensic toxicologist. Dr. Beals’ declaration opined that chronic cocaine abusers “exhibit a prolonged half-life of about 4 hours (versus 1 hour in the naïve user).” He explained common adverse side effects of cocaine usage. Dr. Beals also reported the consumption of Xanax would have moderated Bodenbach’s affect attributable to the cocaine use. The State answered and filed a motion for summary dismissal. The district court provided notice of intent to dismiss with a thorough analysis of the petition. The district court provided twenty days for Bodenbach to respond. Bodenbach did not file a response. The district court entered an order of dismissal and Bodenbach now timely appeals. 3 II. STANDARD OF REVIEW A petition for post-conviction relief initiates a proceeding that is civil in nature. Idaho Code § 19-4907; Rhoades v. State, 148 Idaho 247, 249, 220 P.3d 1066, 1068 (2009); State v. Bearshield, 104 Idaho 676, 678, 662 P.2d 548, 550 (1983); Murray v. State, 121 Idaho 918, 921, 828 P.2d 1323, 1326 (Ct. App. 1992). Like a plaintiff in a civil action, the petitioner must prove by a preponderance of evidence the allegations upon which the request for post-conviction relief is based. Goodwin v. State, 138 Idaho 269, 271, 61 P.3d 626, 628 (Ct. App. 2002). A petition for post-conviction relief differs from a complaint in an ordinary civil action. Dunlap v. State, 141 Idaho 50, 56, 106 P.3d 376, 382 (2004). A petition must contain much more than a short and plain statement of the claim that would suffice for a complaint under Idaho Rule of Civil Procedure 8(a)(1). Rather, a petition for post-conviction relief must be verified with respect to facts within the personal knowledge of the petitioner, and affidavits, records, or other evidence supporting its allegations must be attached or the petition must state why such supporting evidence is not included with the petition. I.C. § 19-4903. In other words, the petition must present or be accompanied by admissible evidence supporting its allegations, or the petition will be subject to dismissal. Wolf v. State, 152 Idaho 64, 67, 266 P.3d 1169, 1172 (Ct. App. 2011). Idaho Code § 19-4906 authorizes summary dismissal of a petition for post-conviction relief, either pursuant to a motion by a party or upon the court’s own initiative, if it appears from the pleadings, depositions, answers to interrogatories, and admissions and agreements of fact, together with any affidavits submitted, that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. When considering summary dismissal, the district court must construe disputed facts in the petitioner’s favor, but the court is not required to accept either the petitioner’s mere conclusory allegations, unsupported by admissible evidence, or the petitioner’s conclusions of law. Roman v. State, 125 Idaho 644, 647, 873 P.2d 898, 901 (Ct. App. 1994); Baruth v. Gardner, 110 Idaho 156, 159, 715 P.2d 369, 372 (Ct. App. 1986). Moreover, the district court, as the trier of fact, is not constrained to draw inferences in favor of the party opposing the motion for summary disposition; rather, the district court is free to arrive at the most probable inferences to be drawn from uncontroverted evidence. Hayes v. State, 146 Idaho 353, 355, 195 P.3d 712, 714 (Ct. App. 2008). Such inferences will not be disturbed on appeal if the uncontroverted evidence is sufficient to justify them. Id. 4 Claims may be summarily dismissed if the petitioner’s allegations are clearly disproven by the record of the criminal proceedings, if the petitioner has not presented evidence making a prima facie case as to each essential element of the claims, or if the petitioner’s allegations do not justify relief as a matter of law. Kelly v. State, 149 Idaho 517, 521, 236 P.3d 1277, 1281 (2010); DeRushé v. State, 146 Idaho 599, 603, 200 P.3d 1148, 1152 (2009). Thus, summary dismissal of a claim for post-conviction relief is appropriate when the court can conclude, as a matter of law, that the petitioner is not entitled to relief even with all disputed facts construed in the petitioner’s favor. For this reason, summary dismissal of a post-conviction petition may be appropriate even when the state does not controvert the petitioner’s evidence. See Roman, 125 Idaho at 647, 873 P.2d at 901. Conversely, if the petition, affidavits, and other evidence supporting the petition allege facts that, if true, would entitle the petitioner to relief, the post-conviction claim may not be summarily dismissed. Charboneau v. State, 140 Idaho 789, 792, 102 P.3d 1108, 1111 (2004); Sheahan v. State, 146 Idaho 101, 104, 190 P.3d 920, 923 (Ct. App. 2008). If a genuine issue of material fact is presented, an evidentiary hearing must be conducted to resolve the factual issues. Goodwin, 138 Idaho at 272, 61 P.3d at 629. On appeal from an order of summary dismissal, we apply the same standards utilized by the trial courts and examine whether the petitioner’s admissible evidence asserts facts which, if true, would entitle the petitioner to relief. Ridgley v. State, 148 Idaho 671, 675, 227 P.3d 925, 929 (2010); Sheahan, 146 Idaho at 104, 190 P.3d at 923. Over questions of law, we exercise free review. Rhoades, 148 Idaho at 250, 220 P.3d at 1069; Downing v. State, 136 Idaho 367, 370, 33 P.3d 841, 844 (Ct. App. 2001). III. ANALYSIS Bodenbach alleges his trial counsel was ineffective for failing to hire a toxicologist to testify regarding Bodenbach’s consumption of cocaine and Xanax. The State responds that Bodenbach has failed to demonstrate a genuine issue of material fact regarding the claim of ineffective assistance of counsel. A claim of ineffective assistance of counsel may properly be brought under the Uniform Post-Conviction Procedure Act. Barcella v. State, 148 Idaho 469, 477, 224 P.3d 536, 544 (Ct. App. 2009). To prevail on an ineffective assistance of counsel claim, the petitioner must show 5 that the attorney’s performance was deficient and that the petitioner was prejudiced by the deficiency. Strickland v. Washington, 466 U.S. 668, 687-88 (1984); Self v. State, 145 Idaho 578, 580, 181 P.3d 504, 506 (Ct. App. 2007). To establish a deficiency, the petitioner has the burden of showing that the attorney’s representation fell below an objective standard of reasonableness. Aragon v. State, 114 Idaho 758, 760, 760 P.2d 1174, 1176 (1988); Knutsen v. State, 144 Idaho 433, 442, 163 P.3d 222, 231 (Ct. App. 2007). To establish prejudice, the petitioner must show a reasonable probability that, but for the attorney’s deficient performance, the outcome of the trial would have been different. Aragon, 114 Idaho at 761, 760 P.2d at 1177; Knutsen, 144 Idaho at 442, 163 P.3d at 231. This Court has long adhered to the proposition that tactical or strategic decisions of trial counsel will not be second-guessed on appeal unless those decisions are based on inadequate preparation, ignorance of relevant law, or other shortcomings capable of objective evaluation. Gonzales v. State, 151 Idaho 168, 172, 254 P.3d 69, 73 (Ct. App. 2011). “The decision of what witnesses to call ‘is an area where we will not second guess counsel without evidence of inadequate preparation, ignorance of the relevant law, or other shortcomings capable of objective evaluation.’” State v. Payne, 146 Idaho 548, 563, 199 P.3d 123, 138 (2008) (quoting State v. Larkin, 102 Idaho 231, 234, 628 P.2d 1065, 1068 (1981)). We recognize that a defendant’s lawyer does not always have a duty to consult experts when the government is proposing to put on expert witnesses. Murphy v. State, 143 Idaho 139, 146, 139 P.3d 741, 748 (Ct. App. 2006). “There may be no reason to question the validity of the government’s proposed evidence or the evidence may be so weak that it can be demolished on cross-examination.” Id. (quoting Miller v. Anderson, 255 F.3d 455, 459 (7th Cir.2001)). Bodenbach argues trial counsel was deficient for failing to provide testimony from a toxicologist and that if trial counsel had proffered an expert witness to refute the State’s evidence, there is a reasonable probability that the result of the trial would have been different. Bodenbach reports he consumed two substances the night of the murder: cocaine and Xanax. First, Bodenbach alleges his cocaine consumption prior to the shooting inhibited his ability to form malice aforethought and that Dr. Beals’ declaration shows an expert witness could support this theory. Second, Bodenbach maintains he consumed Xanax after the shooting and Dr. Beals’ declaration shows an expert witness would have supported his testimony, which would have bolstered his credibility. 6 A. Cocaine Testimony The district court found that Bodenbach failed to establish a genuine issue of material fact that his trial counsel was ineffective. The district court’s primary focus was on Bodenbach’s allegation that trial counsel was ineffective for failing to retain expert testimony for the suppression hearing.1 The district court found that Bodenbach testified he used cocaine between 9:00 p.m.2 and 10:00 p.m. and the effects had worn off by 11:30 p.m., hours prior to his Miranda3 waiver. Consequently, the district court found the record did not support Dr. Beals’ opinion that Bodenbach was impaired by cocaine during his time at the hospital. Now on appeal, Bodenbach focuses his attention on how a toxicologist could have rebutted the State’s case during trial rather than the suppression hearing. Bodenbach argues a toxicologist could have shown that Bodenbach was under the influence of cocaine at the time of the shooting and that the Xanax mitigated the signs of cocaine use after the shooting. The State contends Bodenbach has failed to show a genuine issue of material fact that his trial counsel was ineffective during trial. The State asserts that trial counsel’s strategy was self- defense and calling an expert witness to opine Bodenbach’s cocaine consumption rendered him unable to form malice aforethought would conflict with Bodenbach’s assertion that he reasonably defended himself from imminent danger of death or great bodily harm. In this case, Bodenbach has failed to show a genuine issue of material fact as to whether a toxicologist would have assisted in demonstrating that Bodenbach was under the influence of cocaine at the time of the shooting. Dr. Beals’ affidavit explains that a chronic cocaine user exhibits “a prolonged half-life of about 4 hours (versus 1 hour in the naïve user).”4 However, Bodenbach testified about his personal experience with cocaine, which is contrary to Dr. Beals’ declaration. Bodenbach testified that: he has a chronic addiction to cocaine; he used cocaine 1 The suppression hearing focused on whether Bodenbach involuntarily waived his Miranda v. Arizona, 384 U.S. 436 (1966) rights due to intoxication. 2 The district court derived its background from the district court’s suppression order. At trial, Bodenbach testified he used cocaine between 8:00 p.m. and 10:00 p.m. 3 Miranda v. Arizona, 384 U.S. 436 (1966). 4 Beals also concludes that Bodenbach’s behaviors “represented drug induced central nervous system impairment clouding his judgment, but not exhibiting malice aforethought.” This is an ultimate conclusion that is beyond the scope of an expert witness, and the district court rightly disregarded it. 7 between 8:00 p.m. and 10:00 p.m.; cocaine typically affects him for about forty-five minutes with a pretty fast drop-off; he felt the effects of the cocaine “maybe a little bit” during his argument with Kimsey and Banks; and that after he found his handgun, he stayed in his apartment for about thirty to forty-five minutes before going to Banks’ apartment. Bodenbach’s own testimony shows he was not under the influence of cocaine during the shooting at midnight. Thus, Dr. Beals’ generalized statement about chronic cocaine users is not supported by the evidence and is inapplicable to Bodenbach’s case. Not only is Dr. Beals’ declaration deficient, Bodenbach has failed to show a genuine issue of material fact as to whether his trial counsel was ineffective. It was objectively reasonable for trial counsel to not proffer an expert witness about the effects of cocaine use during the time of the shooting when Bodenbach’s own testimony denies the influence of cocaine. Bodenbach’s chosen defense at trial of self-defense was reasonable and, while Bodenbach now argues that the lack of malice aforethought could have been an alternative defense, as noted, it is undercut by his own testimony and, moreover, fails to demonstrate that trial counsel’s trial strategy was unreasonable. There is no showing of prejudice for the same reason. As a result, Dr. Beals’ declaration does not create a genuine issue of material fact that trial counsel was inefficient. B. Xanax Testimony The district court found Dr. Beals’ opinion about Bodenbach’s ingestion of Xanax did not have any rebuttal value. Dr. Beals never opined that Bodenbach’s behavior was consistent with Xanax use but instead accepted Bodenbach’s testimony that he consumed Xanax as fact. Bodenbach contends that proving he took Xanax was important to explain why he was not displaying effects of cocaine after the shooting, since Xanax would have mitigated the cocaine use. Next, Bodenbach asserts credibility was incredibly important for Bodenbach’s claim of self- defense. The jury may not have believed Bodenbach’s claim that Banks had a knife when Dr. Dawson undermined Bodenbach’s credibility about taking Xanax. In essence, Dr. Dawson allegedly harmed Bodenbach’s credibility to the jury. As such, Bodenbach argues expert testimony was necessary to help prove his claim that he took Xanax, which would have bolstered his credibility. Dr. Beals’ declaration first discusses Bodenbach’s Xanax use--saying he seemed familiar with the drug and its effects and appears to have been a frequent user. Dr. Beals explains Xanax has a relatively long half-life and then subsequently accuses law enforcement of discontinuing a 8 drug screening which would have proven Bodenbach’s Xanax claim and discusses proper hospital protocol. The district court aptly noted, not only was this a false allegation against law enforcement that was disproved during trial, Dr. Beals’ opining about hospital protocol and what a doctor should have administered is beyond his expertise and the scope of his testimony. The only other time Dr. Beals discussed Xanax is at the end of his declaration, “Some of the adverse effects attributable to cocaine abuse prior to the shooting would have been mitigated by the taking, by his own statement, of Xanax just minutes after the incident, thus moderating his affect.” (Emphasis added). Bodenbach has failed to show through Dr. Beals’ declaration that trial counsel was ineffective. As both the district court and the State note, Dr. Beals’ discussion of Xanax conclusively accepts that Bodenbach consumed Xanax immediately after the shooting. Bodenbach argues Dr. Beals is allowed to do this because it was in evidence that Bodenbach consumed Xanax via his own testimony. While true, Dr. Beals does not contradict or challenge Dr. Dawson’s opining about the effects of Xanax; what symptoms he would expect to see from four milligrams; and how the facts in evidence about Bodenbach’s affect and behavior do not suggest Xanax consumption. If a fact finder did not believe Bodenbach’s testimony that he took Xanax, then Dr. Beals’ comments are meaningless. Dr. Beals does not bolster Bodenbach’s testimony as purported; Dr. Beals relies upon Bodenbach. As a result, Bodenbach has failed to show a genuine issue of material fact that trial counsel was ineffective because Dr. Beals’ declaration has no rebuttal value. IV. CONCLUSION Bodenbach has failed to show a genuine issue of material fact that trial counsel was ineffective for not hiring an expert witness toxicologist. The district court did not err in summarily dismissing Bodenbach’s petition for post-conviction relief. Accordingly, we affirm the judgment. Judge HUSKEY and Judge BRAILSFORD CONCUR. 9	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488552/	Case: 22-166 Document: 17 Page: 1 Filed: 11/22/2022 NOTE: This order is nonprecedential. United States Court of Appeals for the Federal Circuit ______________________ In re: KNAUF INSULATION, INC., KNAUF INSULATION SPRL, Petitioners ______________________ 2022-166 ______________________ On Petition for Writ of Mandamus to the United States Patent and Trademark Office in Nos. 90/014,801 and 90/014,807. ______________________ ON PETITION AND MOTION ______________________ Before LOURIE, TARANTO, and STARK, Circuit Judges. STARK, Circuit Judge. ORDER Knauf Insulation, Inc. and Knauf Insulation SPRL (col- lectively, “Knauf”) petition for a writ of mandamus to in- struct the United States Patent and Trademark Office (“PTO”) to terminate pending ex parte reexamination pro- ceedings. Knauf also moves for a stay of the reexamination proceedings pending review of its mandamus petition. The PTO, as well as Johns Manville Corp. and Johns Manville Inc. (collectively, “Johns Manville”), oppose the petition and the motion. Knauf replies. Case: 22-166 Document: 17 Page: 2 Filed: 11/22/2022 2 IN RE: KNAUF INSULATION, INC. BACKGROUND Under the ex parte reexamination statutory regime, if the Director determines that a petitioner has raised “a sub- stantial new question of patentability” the Director may “order . . . reexamination of the patent for resolution of the question.” 35 U.S.C. § 304. In determining whether to in- stitute reexamination, the Director “may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments pre- viously were presented to the Office.” 35 U.S.C. § 325(d). In January 2015, Knauf sued Johns Manville in district court, alleging infringement of eight patents, including U.S. Patent No. 9,464,207 (“the ’207 patent”) and U.S. Pa- tent No. 9,926,464 (“the ’464 patent”). In response, Johns Manville filed numerous petitions for post-grant proceed- ings to challenge the patents. With respect to the ’207 pa- tent and the ’464 patent, Johns Manville filed petitions for inter partes review (“IPR”) in 2018 that were not instituted and requests for ex parte reexamination in 2020 that re- sulted in confirmation of the patentability of the challenged claims. In July 2021, Johns Manville filed two more re- quests for ex parte reexamination of the ’207 and the ’464 patents presenting grounds that differed from the grounds presented in the prior requests for post-grant proceedings. The PTO determined that Johns Manville’s most recent re- quests raised substantial new questions of patentability and therefore ordered reexamination. Knauf then filed petitions asserting that the decisions granting the requests for ex parte reexamination should be vacated pursuant to § 325(d) because the same or substan- tially the same arguments had been raised in prior pro- ceedings. Citing In re Vivint, Inc., 14 F.4th 1342 (Fed. Cir. 2021), Knauf argued that Johns Manville had engaged in undesirable, incremental petitioning, noting Johns Man- ville’s prior petitions and requests for post-grant proceed- ings. Knauf further argued that Johns Manville could have Case: 22-166 Document: 17 Page: 3 Filed: 11/22/2022 IN RE: KNAUF INSULATION, INC. 3 raised the prior art and arguments in its earlier petitions and requests. Knauf also argued that some of the same invalidity issues underlying these proceedings had been in- itially raised by the examiner during prior reexaminations brought by other requesters concerning the grandparent application of the patents-at-issue. On August 31, 2022, the Office of Patent Legal Admin- istration (“OPLA”), acting on behalf of the Director of the PTO, issued two decisions denying Knauf’s petitions. In each decision, OPLA focused on the discretionary nature of § 325(d) and the specifics of what had been raised to the PTO in prior proceedings and found that the prior art (and associated arguments) presented in the present reexami- nation proceedings were not the same or substantially the same as those presented in Johns Manville’s prior petitions and requests, and noted that these proceedings were the first time any third party had presented the arguments raised by Johns Manville to the PTO regarding these or any related patent. Knauf then filed this petition for a writ of mandamus challenging the PTO’s decision and motions for a stay. We have jurisdiction under 28 U.S.C. §§ 1651(a) and 1295(a)(4)(A). See Mylan Lab’ys Ltd. v. Janssen Pharma- ceutica, N.V., 989 F.3d 1375, 1379–81 (Fed. Cir. 2021). DISCUSSION A writ of mandamus is a “drastic and extraordinary remedy” reserved for “exceptional circumstances.” Cheney v. U.S. Dist. Ct. for D.C., 542 U.S. 367, 380 (2004) (internal quotation marks and citations omitted). A petitioner must show that it has no other adequate means to obtain the de- sired relief and has a “clear and indisputable” right to the writ. Id. at 380–81 (internal quotation marks and citations omitted). And even when those two requirements are met, the issuing court, in the exercise of its discretion, must still be satisfied that the writ is appropriate under the Case: 22-166 Document: 17 Page: 4 Filed: 11/22/2022 4 IN RE: KNAUF INSULATION, INC. circumstances. Id. at 381. This demanding standard has not been met here. A post-final decision appeal is an adequate alternative to obtain relief based on a § 325(d) challenge, making man- damus inappropriate. See Vivint, 14 F.4th at 1350–54 (re- viewing a § 325(d) decision on appeal from the Board’s final decision); Automated Merch. Sys., Inc. v. Lee, 782 F.3d 1376, 1382 (Fed. Cir. 2015) (denying petition seeking to ter- minate ongoing reexamination due to “adequate remedy” of an appeal). Knauf argues that absent mandamus relief it will be forced to engage in “unlawful” reexamination pro- ceedings. Pet. at 26. However, “the burden of participating in the proceedings at issue” is typically insufficient to es- tablish entitlement to the exceptional remedy of manda- mus where, as here, the issue may be reviewed in a typical appeal. Automated Merch., 782 F.3d at 1382; see Cheney, 542 U.S. at 380–81 (“[T]he writ will not be used as a sub- stitute for the regular appeals process.”); Bankers Life & Cas. Co. v. Holland, 346 U.S. 379, 383–84 (1953) (noting that the possibility of a “myriad of legal and practical prob- lems as well as inconvenience” does not ordinarily warrant mandamus). Nor has Knauf shown a clear right to terminate the reexaminations under § 325(d) based on this court’s deci- sion in Vivint. In that case, we held, on direct appeal after final decision, that the PTO had arbitrarily and capri- ciously applied § 325(d) when it granted the requester’s nearly identical petition for ex parte reexamination based on the same arguments raised in a previous IPR petition that was denied based on the requester’s abusive filing practices. 14 F.4th at 1354. Here, the PTO made a case- specific exercise of discretion that the prior art (and argu- ments) were not the same or substantially the same as those previously presented in other proceedings, which does not create the same kind of clear, arbitrary departure from prior PTO determinations that was at issue in Vivint. And whatever the strength of the merits of Knauf’s § 325(d) Case: 22-166 Document: 17 Page: 5 Filed: 11/22/2022 IN RE: KNAUF INSULATION, INC. 5 challenge to that decision may be in an ordinary appeal, it has not shown a clear and indisputable right to mandamus relief. Accordingly, IT IS ORDERED THAT: (1) The petition is denied. (2) The motion for a stay is denied. FOR THE COURT November 22, 2022 /s/ Peter R. Marksteiner Date Peter R. Marksteiner Clerk of Court	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488555/	IN THE SUPERIOR COURT OF THE STATE OF DELAWARE M. DENISE TOLLIVER, ) ) Plaintiff, ) ) v. ) C.A. No. K21C-06-040 NEP ) QLARANT QUALITY SOLUTIONS, INC.,) and RONALD G. FORSYTHE JR. and ) DEBORAH KELLER in their ) individual and official capacities, ) ) Defendants. ) Submitted: August 15, 2022 Decided: November 21, 2022 MEMORANDUM OPINION AND ORDER Upon Plaintiff’s Motion for Default Judgment DENIED Upon Individual Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction GRANTED Upon Defendants’ Motion to Dismiss for Failure to State a Claim GRANTED M. Denise Tolliver, Camden, Delaware, Pro Se Plaintiff. Tiffany R. Hubbard, Esquire (Pro Hac Vice), Pamela Moore, Esquire (Pro Hac Vice), McCarter & English, LLP, Hartford, Connecticut, and Chelsea A. Botsch, Esquire, McCarter & English, LLP, Wilmington, Delaware, Attorneys for Defendants. Primos, J. Before this Court are two pending motions in an action brought by Denise Tolliver (hereinafter “Plaintiff”), who is self-represented, against Qlarant Quality Solutions, Inc., and Donald G. Forsythe and Deborah Keller (hereinafter “Defendants”). Plaintiff moves for default judgment pursuant to Superior Court Civil Rule 55(b)(2). Defendants move to dismiss the action 1) with respect to Forsythe and Keller (hereinafter the “individual defendants”) pursuant to Rule 12(b)(2) for lack of personal jurisdiction; and 2) in its entirety pursuant to Rule 12(b)(6), asserting that Plaintiff fails to state a claim for which relief can be granted. The 12(b)(6) motion argues that Plaintiff’s claims are barred by res judicata and time-barred, and that Plaintiff has failed to exhaust her administrative remedies and has failed to state a claim. For the reasons set forth below, Plaintiff’s motion for default judgment is DENIED, and Defendants’ motions to dismiss for lack of personal jurisdiction and failure to state a claim are GRANTED. FACTUAL AND PROCEDURAL BACKGROUND I. Plaintiff’s Employment and Termination The facts in this section are as alleged in the Complaint, accepting all of Plaintiff’s well-pleaded allegations as true in light of Defendants’ motion to dismiss. On October 7, 2013, Plaintiff was hired by Qlarant Quality Solutions, Inc. (hereinafter “Qlarant”), then operating under the name Delmarva Foundation for Medical Care.1 Qlarant was a vendor for the State of Delaware, with operations in both Delaware and Maryland, and was funded in part by a two-year grant at the time of Plaintiff’s hiring.2 She was made aware of the two-year grant period and led to believe that her employment contract would last for the entire two-year grant term.3 1 Compl. (D.I. 1) at 3, ¶ 10. 2 Id. at 2, ¶ 5 3 Id. at 6, ¶ 23. 2 On February 18, 2014, Plaintiff requested mental health accommodations “for cause under well documented, persistent hostile and unsafe work conditions” at her workplace in New Castle County.4 It is unclear what accommodations were sought or whether they were granted. On March 25, 2014, she requested that she be transferred from the New Castle office to a location in Kent County as a further accommodation for her disability.5 Both accommodation requests were directed to Deborah Keller, Qlarant’s Human Resources Vice President.6 On May 12, 2014, Plaintiff’s employment with Qlarant was terminated via a letter sent by Keller.7 The letter included an offer of payment in exchange for Plaintiff’s agreement not to file any discrimination claims under the Delaware Discrimination in Employment Act (“DDEA”), the Delaware Persons with Disabilities Employment Protections Act (“DPDEPA”), the Equal Pay Act, and the Delaware Unemployment Compensation Act.8 Plaintiff also learned that, as of that very day, there was an open position in the Kent County office for which she believed herself to be qualified.9 The next day, she requested reinstatement of her employment at a salary commensurate to the vacant “Kent County lead position.”10 On May 22, 2014, her request for reinstatement was denied in an email explaining that “[i]n light of contract reductions by our client, the State of Delaware, and our overall business conditions, your request for reinstatement is denied at this time.”11 4 Id. at 4, ¶ 13. 5 Id. ¶ 14. 6 Id. at 3, ¶ 8, and 4, ¶¶ 13–14. 7 Id. ¶ 15. 8 Id. at 5, ¶ 19. 9 Id. at 4, ¶ 15. 10 Id. ¶ 15–16. 11 Id. at 4, ¶ 16, and 5, ¶ 18. Plaintiff asserts that it is “undisputed” that these stated reasons were “pretext.” However, at this stage Defendants have yet to file an answer admitting or denying the allegations, and there are insufficient supporting factual allegations for the Court to draw a 3 II. Administrative Process On October 21, 2014, Plaintiff filed a Charge of Discrimination alleging discrimination based on race, sex, age, and “equal pay.”12 The Charge of Discrimination references the February 2014 request for disability accommodation and the May 2014 termination of employment, but not the March 2014 accommodation request or the May 2014 request for reinstatement. On March 7, 2018, the Delaware Department of Labor issued a Final Determination and Right to Sue Notice, dismissing the administrative action “without a specific finding” and granting Plaintiff the right to sue, pursuant to 19 Del. C. § 712.13 III. Tolliver I In November of 2017, Plaintiff filed a complaint in this Court against Qlarant and Terri Daly (a human resources employee at Qlarant). That complaint included four counts: 1) breach of the implied covenant of good faith and fair dealing; 2) violation of 19 Del. C. § 1108(3); 3) defamation; and 4) disability discrimination and retaliation.14 The defendants in that action removed it to the United States District Court for the District of Delaware (hereinafter the “District Court”).15 The District reasonable inference that the reasons given were pretextual. See In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006) (“[A] trial court is required to accept only those ‘reasonable inferences that logically flow from the face of the complaint.’” (quoting Malpiede v. Townson, 780 A.2d 1075, 1083 (Del. 2001))). 12 Defs.’ Opening Br. in Support of their Mot. to Dismiss. the Compl. (D.I. 26) [hereinafter “Defs.’ Opening Br.”] Ex. E (Charge of Discrimination). The Charge of Discrimination was originally filed with the Maryland Commission of Civil Rights due to a technical error, but this error was later corrected, and the Charge of Discrimination was correctly filed with the Delaware Department of Labor. See Tolliver v. Delmarva Found. for Med. Care, 2018 WL 3735889, at 5 (D. Del. Aug. 3, 2018). 13 Id. 14 Defs.’ Opening Br. Ex. C. 15 Tolliver, 2018 WL 3735889, at 1. The Court takes judicial notice of the contents of the pleadings, exhibits, and court decisions from this action pursuant to Delaware Rule of Evidence 201(b)(2) (authorizing judicial notice of facts that “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”). 4 Court dismissed the first three counts as time-barred.16 The disability and retaliation claims were dismissed with leave to amend.17 Plaintiff filed an amended complaint, which the District Court dismissed for failing to state a claim for disability discrimination and retaliation, but with leave to amend once more to state, inter alia, the disability at issue and the accommodations sought.18 The Second Amended Complaint brought two counts, failure to accommodate Plaintiff’s disability and retaliation for protected activities (i.e., retaliating against Plaintiff for requesting accommodations), under both the Americans with Disabilities Act (“ADA”) and the DDEA.19 However, the District Court liberally construed the Second Amended Complaint as raising claims under the DPDEPA.20 The District Court dismissed with prejudice the discrimination claim predicated on Plaintiff’s February 2014 accommodation request but dismissed “without prejudice the March and May 2014 accommodation claim seeking a transfer as those claims have not been administratively exhausted.”21 As to the retaliation claims, the District Court dismissed with prejudice the retaliation claims stemming from the February 2014 and May 2014 alleged accommodation requests, and dismissed “the remaining retaliation claim . . . without prejudice for failure to exhaust administrative remedies.”22 That round of litigation (collectively “Tolliver I”), ended with the District Court’s denial of Plaintiff’s motion to vacate judgment and reopen the case on 16 Tolliver, 2018 WL 3735889, at 5. 17 Id. at 6–7. 18 Tolliver v. Delmarva Found. for Med. Care, 2019 WL 4169881, at 4 (D. Del. Sept. 3, 2019). 19 Tolliver v. Delmarva Found. for Med. Care, 2020 WL 4335521, at 1 (D. Del. July 28, 2020). 20 Id. at 3. 21 Id. at 6. 22 Id. at 8. 5 January 19, 2021.23 To recap, Tolliver I resulted in the dismissal with prejudice of the following claims relevant to this proceeding: (1) Breach of the implied covenant of good faith and fair dealing; (2) Violation of 19 Del. C. § 1108(3); (3) Discrimination claims stemming from Plaintiff’s February 2014 accommodation request; and (4) Retaliation claims stemming from accommodation requests in February 2014 and May 2014. The claims dismissed without prejudice, for failure to exhaust administrative remedies, are: (1) Discrimination claims resulting from the March and May 2014 accommodation requests; and (2) Retaliation claims arising from Plaintiff’s March 2014 telephone conference discussing worker’s compensation and ADA accommodations. IV. Tolliver II Just over six months after the end of Tolliver I, Plaintiff initiated this action (“Tolliver II”) by filing a complaint in this Court on June 28, 2021.24 In a complaint bearing remarkable resemblance to the original complaint in Tolliver I, Plaintiff brings three counts against Defendants: 1) breach of the implied covenant of good faith and fair dealing; 2) violation of 19 Del. C. § 1108(3); and 3) “Equal Pay, DDEA and DPDEPA Disability and Retaliation.”25 Tolliver II differed from Tolliver I by bringing claims against individual defendants Forsythe and Keller, though not against Daly. 23 Tolliver v. Delmarva Found. for Med. Care, 2021 WL 184403 (D. Del. Jan. 19, 2021). 24 Compl. (D.I. 1). 25 Id. 6 Certified mail receipts show that Forsythe, Keller, and Qlarant’s Board Chair were served the complaint on July 2, 2021, and that Qlarant’s registered agent was served on July 8, 2021.26 On July 21, 2021, counsel for Defendants entered an appearance and filed a notice of removal to federal court.27 However, the District Court construed the “Equal Pay” claim as a state law claim under the Delaware Wage Payment and Collection Act rather than the federal Equal Pay Act and, thus finding no basis for federal subject matter jurisdiction, remanded the case back to this Court on March 21, 2022.28 The District Court dismissed as moot all other pending motions in that court, 29 which included Plaintiff’s motion for default judgment and Defendants’ motion to dismiss.30 Two days later, Defendants sent a letter to the Court indicating Defendants’ intention to renew the motion to dismiss filed in the District Court. 31 Attached to the letter was a proposed briefing schedule.32 Plaintiff opposed the proposed schedule, requesting more time to prepare her response and to attempt to obtain counsel.33 At an office conference held on April 12, 2022, counsel for Defendants represented that the purpose of the proposed briefing schedule was “to have something in place for everyone to be on the same page, especially with [the case] being remanded and it being [a] sort of gray area [] when the filings would begin.”34 26 Aff. of M. Denise Tolliver (D.I. 3). 27 Entry of Appearance (D.I. 4); Notice of Filing of Notice of Removal (D.I. 5). 28 Certified Mem. Op. and a Certified Order from District Ct. Remanding the Case Back to Superior Ct. (D.I. 6) [hereinafter “Remand Order”] at 4–6. 29 Id. at 6. 30 Id. at 1. 31 Letter (D.I. 7) at 1. 32 Proposed Order on Briefing Schedule and Page Limitation for Defs.’ Mot. to Dismiss Pl.’s Compl. (D.I. 8). 33 Pl.’s Mot. to Strike and/or Request to Amend Proposed Scheduling Order (D.I. 10). 34 Tr. of Zoom Conference (D.I. 24) at 4:23–5:3. 7 The Court set a briefing schedule on Plaintiff’s motion for default judgment and Defendants’ motion to dismiss.35 Plaintiff filed her motion for default judgment on April 14, 2022.36 Defendants filed their response on May 31, 2022,37 and Plaintiff replied on June 6, 2022.38 Defendants filed their motion to dismiss and opening brief on April 26, 2022, asserting both lack of personal jurisdiction over the individual defendants pursuant to Superior Court Civil Rule 12(b)(2) and failure to state a claim under Rule 12(b)(6).39 Plaintiff filed a response on May 2, 2022,40 and Defendants replied on July 21, 2022.41 Both matters were submitted to chambers for review on August 15, 2022. DISCUSSION I. Motion for Default Judgment Superior Court Rule 55(b) provides that when a defendant “has failed to appear, plead or otherwise defend as provided by these Rules, and that fact is made to appear, judgment by default may be entered . . .”42 Where, as here, the party has entered an appearance, default judgment may only be granted on application to the Court.43 A trial court exercises discretion when ruling on a motion for default judgment and generally grants it only on “those occasions where there has been a willful or conscious disregard of the rules of the court.”44 35 Order (D.I. 19). 36 J. by Default Mot. (D.I. 20) [hereinafter “Default Mot.”]. 37 Defs.’ Resp. to Pl.’s Mot. for Default J. (D.I. 32). 38 Pl. Resp. to Defs.’ Default J. Resp. (D.I. 33). 39 Defs.’ Mot. to Dismiss (D.I. 25); Defs.’ Opening Br. (D.I. 26). 40 Pl.’s Resp. and Quash Mot. to Defs.’ Dismiss Mot. (D.I. 27) [hereinafter “Pl.’s Resp.”]. 41 Defs.’ Reply in Support of Defs.’ Mot. to Dismiss (D.I. 36). 42 Super. Ct. Civ. R. 55(b). 43 Super. Ct. Civ. R. 55(b)(2). 44 Long v. Jennings, 2021 WL 2134854, at 1 (Del. Super. May 25, 2021) (quoting Pinkett ex rel. Britt v. Nationwide Mut. Ins. Co., 832 A.2d 747, 748–49 (Del. Super. 2003)). 8 Plaintiff argues that default judgment is appropriate here because Defendants removed the action to federal court before filing an answer or motion in response to her complaint.45 The Delaware Superior Court Rules of Civil Procedure do not expressly provide for removal of actions to federal court. Plaintiff is thus correct in a narrow sense that Defendants did not file “an answer or appropriate motion” within the 20 days provided for in Superior Court Civil Rule 12.46 However, removal of an action to federal court deprives the state court of jurisdiction over that action.47 Since no action can be taken in the state court while it is without jurisdiction, removal necessarily pauses the time in which the defendant must respond to the complaint in a state court.48 Thus, at least one day remained to answer after the case was remanded on March 21, 2022 (nineteen days having elapsed between service of process on the individual defendants on July 2, 2021, and removal of the case on July 21, 2021). 49 However, instead of filing their motion to dismiss in this court 45 Default Mot. at 2–3. 46 See Pinkett, 832 A.2d at 750 (“The defendant’s failure to file an answer or appropriate motion within the required time is a failure to defend which exposes it to default judgment under Rule 55.”). 47 See 28 U.S.C. § 1446(d) (“Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall give written notice thereof to all adverse parties and shall file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless and until the case is remanded.”) (emphasis supplied); Limehouse v. Hulsey, 744 S.E.2d 566, 573 (S.C. 2013) (“Removal proceedings impact the jurisdiction of the state court in that removal of a state case to federal court divests the state court of jurisdiction.”); Lewis v. C.J. Langenfelder & Son, Jr., Inc., 587 S.E.2d 697, 700 (Va. 2003) (“After compliance with the removal statute, the jurisdiction of the state court is suspended until there has been a remand.”) (cleaned up). 48 See e.g. Ferrell v. Young, 746 S.E.2d 167, 170 (Ga. Ct. App. 2013) (“When the case was removed, only a portion of the 30–day period for filing an answer in the Superior Court had expired. Until the Superior Court resumed jurisdiction pursuant to the remand from the District Court, no responsive pleadings could be filed in the Superior Court, and the running of the 30–day period for filing an answer in the Superior Court was suspended.”). 49 Plaintiff states, incorrectly, that Defendants were required to respond within 20 days of the filing of her Complaint on June 28, 2021. See Default Mot. at 3, ¶ 14. However, the time to file a responsive pleading is within 20 days of service of process, which in this case, means within 20 days of the date on the return receipts showing proof of mailing. See Super. Ct. Civ. R. 12(a) (“A defendant shall serve an answer within 20 days after service of process, complaint and affidavit, if 9 within that time, Defendants sent a letter to the Court with a proposed briefing schedule on March 23, 2022. Assuming arguendo that default judgment is available on these facts, the Court perceives no willful or conscious disregard for the rules of the Court.50 To the contrary, Defendants quickly took steps to resolve any “gray area” as to the filing timeline after the remand to this Court.51 Moreover, Defendants entered an appearance in this Court within 20 days of service of process, filed a timely notice of removal to federal court followed by a motion to dismiss in that court, and, within two days of remand, submitted a proposed briefing schedule to present that motion to this Court. The Court then set a briefing schedule with which Defendants complied. In the Court’s discretion, Plaintiff’s motion for default judgment is DENIED. II. Motion to Dismiss for Lack of Personal Jurisdiction Defendants assert that this Court lacks personal jurisdiction over the individual defendants, both residents of Maryland at the time this action was filed, and moves to dismiss with respect to them pursuant to Superior Court Civil Rule 12(b)(2). A court must address a defendant’s Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction before addressing the merits of a Rule 12(b)(6) motion to dismiss.52 any, upon that defendant . . .”); 10 Del. C. § 3104(g) (“If service is made [by mail to an out of state resident], the time in which defendant shall serve an answer shall be computed from the date of the mailing which is the subject of the return receipt or other official proof of delivery or the notation of refusal of delivery.”). 50 See Long, 2021 WL 2134854, at 2 (denying default judgment where the defendant had submitted an untimely response and motion to dismiss but “nothing indicate[d] to the Court that the [defendant] has willfully or consciously disregard the rules of the Court”). 51 Tr. of Zoom Conference at 4:23–5:3. 52 See Branson v. Exide Elecs. Corp., 625 A.2d 267, 268–69 (Del. 1993) (“[T]he Court of Chancery should have decided the personal jurisdictional challenge regarding the individual defendants, raised by Exide’s motion to dismiss, prior to addressing the substantive aspect of that motion with respect to all defendants.”); Hartsel v. Vanguard Grp., Inc., 2011 WL 2421003, at 6 (Del. Ch. 10 On a motion to dismiss for lack of personal jurisdiction, the burden is on the plaintiff to make a prima facie showing that the exercise of personal jurisdiction over the nonresident defendants is authorized by Delaware’s long-arm statute, 10 Del. C. § 3104, and is consistent with due process.53 “The Court must accept the plaintiff’s allegations as true and draw all reasonable inferences in favor of the plaintiff.”54 The Court “may consider extra-pleading material, such as affidavits and briefs of the parties, to supplement the Complaint and aid in establishing jurisdiction.”55 While a pro se plaintiff’s pleadings may be construed liberally, a pro se plaintiff still bears the burden of alleging specific facts sufficient to establish personal jurisdiction with respect to each defendant.56 10 Del. C. § 3104(c) identifies six scenarios in which Delaware Courts may exercise personal jurisdiction over a nonresident defendant. Those are that the nonresident: (1) Transacts any business or performs any character of work or service in the State; (2) Contracts to supply services or things in this State; (3) Causes tortious injury in the State by an act or omission in this State; (4) Causes tortious injury in the State or outside of the State by an act or omission outside the State if the person regularly does or solicits June 15, 2011) (“Before considering the merits of Defendants’ motion to dismiss under Rule 12(b)(6), the Court first must address the Individual Defendants’ motions to dismiss for lack of personal jurisdiction under Rule 12(b)(2).”), aff’d, 38 A.3d 1254 (Del. 2012) (TABLE). 53 Oliver v. Galerman, 2022 WL 287907, at 1 (Del. Super. Jan. 31, 2022). 54 Id. (citing Boone v. Oy Partek Ab, 724 A.2d 1150, 1155 (Del. Super. 1997)). 55 Munoz v. Vazquez-Cifuentez, 2019 WL 669935, at 2 (Del. Super. Feb. 18, 2019). 56 See Oliver, 2022 WL 287907, at 2 (“The same rules . . . still apply to a pro se Plaintiff; this Court will accommodate them only to the extent that the substantive rights of the opposing party are not affected.”); Thomas v. Nationstar Mortgage, LLC, 2015 WL 5766775, at 2 (Del. Ch. Sept. 18, 2015) (“[T]his leniency does not extend to the constitutional requirements of personal jurisdiction.”), adopted, 2015 WL 5786135 (Del. Ch. 2015); Draper v. Med. Ctr. of Delaware, 767 A.2d 796, 799 (Del. 2001) (“There is no different set of rules for pro se plaintiffs, and the trial court should not sacrifice the orderly and efficient administration of justice to accommodate an unrepresented plaintiff.”). 11 business, engages in any other persistent course of conduct in the State or derives substantial revenue from services, or things used or consumed in the State; (5) Has an interest in, uses or possesses real property in the State; or (6) Contracts to insure or act as surety for, or on, any person, property, risk, contract, obligation or agreement located, executed or to be performed within the State at the time the contract is made, unless the parties otherwise provide in writing. Plaintiff has made no argument as to which of the above subsections she believes applies to the individual defendants. The only specific mention of Ronald Forsythe in the complaint is that he is the Chief Executive Officer at Qlarant and is therefore “responsible for all aspects of personnel supervision and for regulatory contract compliance” under Delaware law.57 The complaint is more specific with respect to Deborah Keller. It first identifies her as the Human Resources Vice President at Qlarant and identifies her as Qlarant’s “employment decision-maker.”58 Plaintiff asserts that she “requested disability accommodations” from Keller, specifically that she should be allowed to relocate her workplace to Qlarant’s office in Kent County.59 Plaintiff also alleges that her “employment was terminated in a letter by Keller while a Kent County lead position became vacant on [the] same day.”60 Beyond the allegations in the Complaint, the only additional evidence offered by Plaintiff to support the exercise of personal jurisdiction by this Court is a citation to a Professional Services Agreement Clause that has no readily apparent bearing on the issue of personal jurisdiction.61 Defendants argue that these allegations cannot establish personal jurisdiction over the individual defendants because they refer exclusively to actions taken in their 57 Compl. at 3 ¶ 8. 58 Id. ¶ 9. 59 Id. at 4, ¶ 14. 60 Id. ¶ 15. 61 See Pl.’s Resp. at 5, ¶ 23 and Ex. P0007 (Professional Services Agreement 4.9. Contractor). 12 respective capacities as employees of Qlarant. This judicially created principle, referred to as the fiduciary shield doctrine, was first recognized by this Court in Plummer & Co. Realtors v. Crisafi.62 In its broadest form, the fiduciary shield doctrine would completely “insulate employees and officers of a corporation from being sued in the courts of a jurisdiction where their sole contacts have been on behalf of their corporation.”63 The rationale underpinning the doctrine is that it is “unfair to force an individual to defend a suit brought against him personally in a forum with which his only relevant contacts are acts performed not for his own benefit but for the benefit of his employer.”64 However, the soundness of a broad fiduciary shield doctrine has been questioned under Delaware law. In Mobil Oil Corp. v. Advanced Environmental Recycling Technologies, Inc., a federal court applying Delaware law opined that “the Supreme Court of Delaware would not recognize the fiduciary shield as an absolute bar to personal jurisdiction over a corporate employee.”65 The court reasoned that the out-of-state authorities relied on in Plummer had been called into question in their own jurisdictions and that they resulted in a construction that “would run counter to the expansive interpretation that Delaware courts have consistently 62 533 A.2d 1242, 1246 (Del. Super. 1987). 63 Id.; see also Kelly v. McKesson HBOC, Inc., 2002 WL 88939, at 17 n.70 (Del. Super. Jan. 17, 2002) (“This [fiduciary shield] doctrine is judicially created, and immunizes acts performed by an individual in the individual’s capacity as a corporate employee from serving as the foundation for the exercise of personal jurisdiction over that individual.”); Mktg. Products Mgmt., LLC v. HealthandBeautyDirect.com, Inc., 2004 WL 249581, at 3 (Del. Super. Jan. 28, 2004) (“The fiduciary shield doctrine prohibits acts performed by an individual, in his capacity as a corporate officer or employee, from serving as the basis for personal jurisdiction over that individual.”). 64 Plummer, 533 A.2d at 1246 (quoting Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 902 (2d Cir. 1981)). 65 833 F. Supp. 437, 443 (D. Del. 1993). 13 applied to Delaware’s long-arm statute.”66 This split of authority continues,67 and the Delaware Supreme Court has yet to clarify the viability or scope of the fiduciary shield doctrine. However, this Court need not decide here the exact scope of the fiduciary shield doctrine in order to resolve this motion. Even if Delaware law does not recognize an absolute jurisdictional bar for employee-defendants, personal jurisdiction over an individual employee must still be based on specific actions taken by that individual, either in an individual or fiduciary capacity, that would place that individual within the reach of Delaware’s long-arm statute.68 Turning back to the statute, the only categories that might be relevant to the facts alleged are Section 3104(c)(1), i.e., transacting business or performing work in Delaware, or (c)(3), i.e., causing tortious injury by an act or omission in Delaware. In order to establish personal jurisdiction under either (c)(1) or (c)(3), a plaintiff is required to allege conduct, whether an act or an omission, by the nonresident that occurred in the state of Delaware.69 Simply holding a position in a company that operates in Delaware is insufficient to establish jurisdiction under these provisions.70 66 Id. at 441–43. 67 See EBP Lifestyle Brands Holdings, Inc. v. Boulbain, 2017 WL 3328363, at 5 and n.23 (Del. Ch. Aug. 4, 2017) (“[C]onflicting authority provides reason to question whether vel non the fiduciary shield doctrine is recognized in Delaware law.”). 68 See Reach & Associates, P.C. v. Dencer, 269 F. Supp. 2d 497, 504 (D. Del. 2003) (following Mobil Oil but clarifying that “in order for any act to be relevant in a personal jurisdiction analysis under Subsections (c)(1) or (c)(3) [of Delaware’s long-arm statute], the individual’s acts, even as a fiduciary, must occur in Delaware.”); EBP Lifestyle Brands, 2017 WL 3328363, at 5 (declining to reach the question of “whether the fiduciary shield doctrine is (or ever was) Delaware law” because the alleged transactions were insufficient to establish specific jurisdiction under the long- arm statute). 69 TriStrata Technology, Inc. v. Neoteric Cosmetics, Inc., 961 F.Supp. 686, 690 (D. Del. 1997) (“While examining an individual’s conduct, including his actions in his fiduciary capacity, this Court must still be mindful of the requirement of subsection (c)(1) and (c)(3). Thus, the employee’s acts as a fiduciary must still occur in Delaware.”). 70 See id. (“[A]bsent actual conduct in Delaware, Dr. Murad’s position as president, stockholder and researcher for Murad Research would be insufficient to establish jurisdiction.”); Kelly, 2002 WL 88939, at 17 (“Absent actual conduct in Delaware, Hawkins’ positions at McKesson, or McKesson HBOC, are insufficient to establish jurisdiction. Because Hawkins did not have any 14 Thus, the paragraphs in the complaint explaining Keller and Forsythe’s positions and authority within Qlarant cannot serve as a basis for the exercise of personal jurisdiction over them as individuals. Since this is the only allegation regarding Forsythe, the inquiry ends there with respect to him. While the allegations regarding Keller are more specific, they are not specific enough to establish personal jurisdiction. The complaint states that Plaintiff requested disability accommodations from Keller but says nothing about the mode of communication by which that request was made or where any conversations took place.71 The complaint also states that Keller, presumably in her capacity as Human Resources Vice President, sent a letter terminating Plaintiff’s employment. Without some indication that Keller committed any act or omission within the state of Delaware, rather than in Qlarant offices located in her home state of Maryland, Plaintiff has failed to establish a prima facie case that Keller worked in Delaware during the relevant time period or that she caused tortious injury by an act or omission in this state.72 Thus, Plaintiff’s allegations are insufficient to support the exercise of personal jurisdiction in this case. Accordingly, the motion to dismiss for lack of personal jurisdiction is GRANTED based on the long-arm statute, without reaching the due process contacts in Delaware, this Court will not establish personal jurisdiction on the mere fact that he was employed by a Delaware corporation.”) (internal citation omitted). 71 It seems a reasonable inference that it was the same March 25, 2014, telephone conference call alleged in Tolliver I, though in that action the only participant in the call mentioned in the complaint was Terri Daly. Defs.’ Opening Br. Ex. E at 5. 72 Plaintiff has not requested leave to amend her complaint or the opportunity to conduct jurisdictional discovery. In any event, the Court finds that either would be futile because the claims against the individual defendants would fail to survive a motion to dismiss for substantially the same reasons set forth in Part III of this opinion. 15 analysis. The Court will thus consider the motion to dismiss for failure to state a claim with respect to Qlarant only.73 III. Motion to Dismiss for Failure to State a Claim Defendants argue that the Complaint fails to state a claim upon which relief can be granted and move to dismiss pursuant to Superior Court Rule 12(b)(6). When the Court considers a Rule 12(b)(6) motion, “(i) all well-pleaded factual allegations are accepted as true; (ii) even vague allegations are well-pleaded if they give the opposing party notice of the claim; (iii) the [c]ourt must draw all reasonable inferences in favor of the non-moving party; and [(iv)] dismissal is inappropriate unless the plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances susceptible of proof.”74 The Court looks to all allegations in the complaint and documents referenced therein, and may also “take judicial notice of ‘matters that are not subject to reasonable dispute.’”75 A. Res judicata Defendant argues that most of Plaintiff’s claims in this action are barred under the doctrine of res judicata because of the District Court’s disposition of the same or similar claims in Tolliver I. “Res judicata exists to provide a definite end to litigation, prevent vexatious litigation, and promote judicial economy.”76 The doctrine of res judicata has five elements under Delaware law. The party invoking 73 See Branson, 625 A.2d at 269 (“A court without personal jurisdiction has no power to dismiss a complaint for failure to state a claim.”). 74 Hammer v. Howard, 2021 WL 4935019, at 2 (Del. Super. Oct. 22, 2021) (quoting Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002)). 75 Id. (quoting In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 169 (Del. 2006)). In support of its res judicata argument, Defendants include documents from the docket in Tolliver I as exhibits to their Opening Brief. Plaintiff asks this Court to “quash” the motion to dismiss and its attached exhibits as “null and void” because they call on this Court to consider facts outside of the complaint. Pl.’s Resp. at 1. However, as previously explained, the Court may take judicial notice of these court filings, and Plaintiff’s objection to their consideration is thus without merit. 76 LaPoint v. AmerisourceBergen Corp., 970 A.2d 185, 191 (Del. 2009) (internal citations omitted). 16 it must demonstrate that “(1) the court making the prior adjudication had jurisdiction, (2) the parties in the present action are either the same parties or in privity with the parties from the prior adjudication, (3) the cause of action must be the same in both cases or the issues decided in the prior action must be the same as those raised in the present case, (4) the issues in the prior action must be decided adversely to the plaintiff’s contentions in the instant case, and (5) the prior adjudication must be final.”77 The second and fourth elements are straightforward and not meaningfully disputed in this case. As to the second element, Denise Tolliver is the plaintiff in both actions, and the parties do not dispute that Delmarva Foundation for Medical Care and Qlarant, defendants in the respective actions, are the same company.78 Thus, the parties are the same in both actions. 79 As to the fourth element, there is no question that all issues in Tolliver I were decided adversely to Plaintiff’s contentions, since they were all dismissed by the District Court over the course of the litigation. Plaintiff appears to contest the first element, implying that the remand for lack of subject matter jurisdiction in Tolliver II proves that the District Court also lacked jurisdiction in Tolliver I. This argument is without merit. Unlike Tolliver II, the Second Amended Complaint in Tolliver I raised a federal cause of action under the 77 Bailey v. City of Wilmington, 766 A.2d 477, 481 (Del. 2001). 78 See Compl. at 2–3, ¶ 6 (“Employer renaming occurred in 2018. Qlarant wrote, ‘Welcome to Qlarant, bringing together the powerful resources of Delmarva Foundation, Health Integrity, Quality Health Strategies, and Quality Health Foundation into one single brand.’”); Def.’s Opening Br. at 7 (“This decision [in Tolliver I] was rendered in a prior suit with the same parties—Plaintiff and Qlarant—or their privies.”). 79 This Court has previously held under similar facts that “corporate officers” who “made key decisions in the company, directly involving Plaintiff’s conditions of employment” were in privity with the employer for res judicata purposes. Hammer, 2021 WL 4935019, at 3–4. Thus, even if personal jurisdiction existed over defendants Keller and Forsythe, the res judicata analysis in this section would apply with equal force to them. 17 Americans with Disabilities Act.80 Tolliver II was remanded only after the District Court construed the complaint in this action as raising claims under Delaware law only, rather than under Delaware law and the federal Equal Pay Act.81 The third element of res judicata is satisfied if the cause of action or the issues decided are the same in both cases. Delaware courts follow the “transactional approach” to res judicata.82 This approach requires a “pragmatic consideration” that takes into account “whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage.”83 Here, Counts I and II of the Complaint state the same cause of action and arise from the same transaction as Counts I and II of the initial complaint in Tolliver I. The purported causes of action are identical, and the factual allegations are very similar. In both actions, Plaintiff asserted in Count I that Qlarant violated the implied covenant of good faith and fair dealing by terminating her employment before the two-year term of grant funding was complete.84 Likewise, Plaintiff asserted in Count II of both actions that Qlarant violated 19 Del. C. § 1108(3) by failing “to provide notice to Plaintiff that she would be deprived of unemployment compensation.”85 Count III of the Complaint, styled “Equal Pay, DDEA and DPDEPA Disability and Retaliation,” implicates several different causes of action, but the underlying factual allegations appear to be that Defendants discriminated against Plaintiff on the basis of her disability by failing to make reasonable accommodations and retaliated against her for requesting those accommodations. Insofar as Count III is raising 80 Tolliver, 2020 WL 4335521, at 1. 81 Remand Order (D.I. 6) at 5–6. 82 LaPoint, 970 A.2d at 193. 83 Id. (quoting Restatement (Second) of Judgments § 24(2) (1982)). 84 Compl. at 5–6 ¶¶ 22–25; Defs.’ Opening Br. Ex. C at 6 ¶¶ 21–23. 85 Compl. at 6 ¶ 28; Defs.’ Opening Br. Ex. C at 6 ¶ 26. 18 disability discrimination and retaliation claims under the DPDEPA and/or the DDEA, these claims address the same issues as the Second Amended Complaint in Tolliver I. Thus, with the sole exception of Plaintiff’s equal pay claim (which will be addressed on other grounds),86 Plaintiff’s claims in this case all arise from the same transaction as Tolliver I for res judicata purposes. The final issue in the res judicata analysis is whether the prior adjudication was final. In Delaware, a dismissal with prejudice is generally final for res judicata purposes, but a dismissal without prejudice is not.87 Since Counts I and II were dismissed with prejudice as time-barred in Tolliver I, the nearly identical Counts I and II in this action are barred by res judicata. Accordingly, the Court will dismiss Counts I and II of the Complaint with prejudice. Count III is more complicated. As explained previously, the District Court dismissed some of Plaintiff’s discrimination and retaliation claims with prejudice, and others without prejudice. With respect to those claims dismissed with prejudice, Plaintiff is barred from relitigating them in this Court. Thus, Plaintiff’s claims of disability discrimination with respect to her February 2014 accommodation request and her retaliation claims based on protected activity that occurred in February 2014 and May 2014 will be dismissed with prejudice based on res judicata. 86 Based on the conclusion that Plaintiff’s equal pay claim is time-barred, see Part III.C infra, the Court need not address the question of whether bringing it in this subsequent action constitutes impermissible claim-splitting. See Wilson v. Brown, 36 A.3d 351, 2012 WL 195393, at 4 (Del. 2012) (TABLE) (“Even if a substantive theory of recovery asserted in a subsequent lawsuit is different from that presented in prior litigation, when the second action is based on the same transaction as the first, the claim has been split and must be dismissed.” (quoting Kossol v. Ashton Condo. Ass’n, Inc., 637 A.2d 827, 1994 WL 10861, at 2 (Del. 1994) (TABLE))). 87 See Braddock v. Zimmerman, 906 A.2d 776, 784 (Del. 2006) (“[T]he phrase ‘without prejudice’ will mean only that the otherwise final judgment does not operate as a res judicata bar to preclude a subsequent lawsuit on the same cause of action.”); Kaufman v. Nisky, 2011 WL 7062500, at 1 (Del. Super. Dec. 20, 2011) (“In Delaware, a dismissal with prejudice is considered an adjudication on the merits. When an action has been dismissed on its merits, the res judicata doctrine forecloses a losing party from reasserting for a second time the same cause of action against the same party.” (citing Savage v. Himes, 2010 WL 2006573, at 3 (Del. Super. May 18, 2010))). 19 As Defendants concede, application of res judicata to those claims dismissed without prejudice would be inappropriate.88 The Court thus turns to the issue of administrative exhaustion of those claims. B. Failure to Exhaust Administrative Remedies Under Delaware law, there is a strong presumption that administrative remedies provided for by statute should be exhausted before an action is brought in court.89 Plaintiff’s discrimination and retaliation claims arise under the DDEA, 19 Del. C. §§ 710–720, and the DPDEPA, 19 Del. C. §§ 720–728. The administrative exhaustion requirement for both acts is set out in 19 Del. C. § 714, which provides that a “charging party may file a civil action in Superior Court, after exhausting the administrative remedies provided herein and receipt of a Delaware Right to Sue Notice acknowledging same.”90 19 Del. C. § 712(c)(1) requires that “[a]ny person claiming to be aggrieved by a violation of this chapter shall first file a charge of discrimination within 300 days of the alleged unlawful employment practice or its discovery, setting forth a concise statement of facts, in writing, verified and signed by the charging party.” Plaintiff obtained the requisite right to sue notice from the Delaware Department of Labor on March 7, 2018.91 However, the District Court in Tolliver I “carefully reviewed her EEOC intake questionnaire as well as her charge of discrimination” and concluded that neither “refer to the alleged March and May 2014 88 Defs.’ Opening Br. at 6 n.1. 89 See Levinson v. Delaware Comp. Rating Bureau, Inc., 616 A.2d 1182, 1192 (Del. 1992) (“Given the strong presumption in favor of such exhaustion and in the absence of any compelling argument to the contrary, DCRB should have been required, as a matter of law, to exhaust its administrative remedy.”). 90 19 Del. C. § 714(a); 19 Del. C. § 727(a) (“Enforcement of this subchapter [the DPDEPA] shall be in accordance with the procedures for enforcement of rights secured by subchapter II of this chapter [the DDEA].”). 91 Motion to Dismiss Ex. E (Final Determination and Right to Sue Notice). 20 accommodation requests seeking a transfer to a different workplace.”92 That court further concluded that neither document referred to the March 2014 phone call for which Plaintiff asserted a retaliation claim.93 As a result, the court sua sponte dismissed without prejudice these claims for failure to exhaust administrative remedies.94 In response to Defendants’ assertion that she has again failed to exhaust her administrative remedies, Plaintiff directs this Court to the right to sue notice issued in March 2018. However, this is the same right to sue notice that the District Court had before it in Tolliver I. It does not appear that Plaintiff has taken any further steps to exhaust her administrative remedies with regard to those claims since the District Court’s dismissal without prejudice. Moreover, the administrative process to obtain a right to sue notice must be initiated “within 300 days of the alleged unlawful employment practice or its discovery.”95 Thus, it is too late for Plaintiff to complete administrative exhaustion of any claims not raised in her original Charge of Discrimination. Plaintiff’s opportunity to exhaust these remedies is thus long passed, and another dismissal without prejudice would be fruitless. Accordingly, the Court dismisses Plaintiff’s remaining discrimination and retaliation claims under the DDEA and DPDEPA with prejudice. C. Delaware Wage Payment and Collection Act Claim The only new claim in this action not previously addressed by the District Court is Plaintiff’s Count III equal pay claim under the Delaware Wage Payment and Collection Act (“DWPCA”), 19 Del. C. § 1101–1115. While it is difficult to tell on the face of the Complaint, in a filing with the District Court, Plaintiff 92 Tolliver, 2020 WL 4335521, at 6. For exhaustion of Plaintiff’s state law claims, it is the Charge of Discrimination relied on by the Delaware Department of Labor that is relevant. 93 Id. at 8 n.11. 94 Id. at 8. 95 19 Del. C. § 712(c)(1). 21 specifically identified 19 Del. C. § 1107A as the basis for this claim, which prohibits differential rates of pay based on gender.96 Defendants assert that a claim under the DWPCA is subject to the one-year statute of limitations in 10 Del. C. § 8111, which provides that “[n]o action for recovery upon a claim for wages, salary, or overtime for work, labor or personal services performed, or for damages . . . shall be brought after the expiration of 1 year from the accruing of the cause of action on which such action is based.” The Third Circuit has implicitly agreed (albeit in a footnote to a per curiam opinion) that one year is the appropriate statute of limitations for claims under the DWPCA.97 Plaintiff’s response contains no argument as to the applicable statute of limitations.98 However, the Delaware Supreme Court has previously held that 10 Del. C. § 8110 applies only to actions for compensation for work actually performed, and that actions for damages, backpay, and wrongful termination are governed by the residual three-year limitations period in 10 Del. C. § 8106.99 Either way, the Court agrees with Defendants that any claim under 19 Del. C. § 1107A is time-barred. Whether a one-year or three-year limitations period applies 96 Remand Order at 4–5. 97 See Phifer v. Sevenson Envtl. Servs., Inc., 619 Fed. Appx. 153, 157 n.6 (3d Cir. 2015) (per curiam) (“Although the District Court did not explicitly review Phifer’s remaining WPCA claim against Sevenson, having reviewed the record, we agree that Phifer could not prevail on that claim. The statute of limitations for bringing such a claim is one year.” (citing 10 Del. C. § 8111)). 98 In her Complaint, Plaintiff asserts that the “above facts”—that she disputed federal court jurisdiction over her claims and that removal of her original complaint in Tolliver I resulted in dismissal without prejudice—should trigger tolling of the statute of limitations based upon “inherently unknowable injuries, fraudulent concealment, or equitable tolling.” Compl. at 2, ¶ 3 (quoting In re Dean Witter P’ship Litig., 1998 WL 442456, at 5 (Del. Ch. July 17, 1998), aff’d, 725 A.2d 441 (Del. 1999) (TABLE)). However, Plaintiff fails to explain how the case’s removal history renders “the facts underlying a claim [] so hidden that a reasonable plaintiff could not timely discover them.” Dean Witter, 1998 WL 442456, at *5. 99 Goldman v. Braunstein’s, Inc., 240 A.2d 577, 578 (Del. 1968); cf. Trader v. Fiat Distributors, Inc., 476 F. Supp. 1194, 1208 (D. Del. 1979) (relying on Goldman and applying the three-year limitations period to an action brought under 42 U.S.C. § 1981 for back pay based on employment discrimination.). 22 is not dispositive, since Plaintiff’s employment at Qlarant ended over seven years before this action was filed. Plaintiff’s equal pay claim under the DWPCA is therefore dismissed with prejudice. CONCLUSION For the foregoing reasons, Petitioner’s motion for default judgment is DENIED. Defendants’ motion to dismiss for lack of personal jurisdiction over Forsythe and Keller is GRANTED, and Defendants’ motion to dismiss for failure to state a claim upon which relief can be granted against Qlarant is GRANTED. Accordingly, Plaintiff’s claims against the individual defendants are dismissed without prejudice and the claims against Qlarant are dismissed with prejudice.100 IT IS SO ORDERED. NEP:tls oc: Prothonotary cc: M. Denise Tolliver, Pro Se, Via U.S. Mail & Email Counsel of Record, Via File & ServeXpress 100 See Branson, 625 A.2d at 269 (“A dismissal for lack of jurisdiction or improper venue does not preclude a subsequent action in an appropriate forum, whereas a dismissal for failure to state a claim upon which relief can be granted is with prejudice.” (quoting Arrowsmith v. United Press International, 320 F.2d 219, 221 (2d Cir. 1963))). 23	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488532/	Fourth Court of Appeals San Antonio, Texas November 16, 2022 No. 04-22-00413-CR Paul YBARRA, Appellant v. The STATE of Texas, Appellee From the 226th Judicial District Court, Bexar County, Texas Trial Court No. 2020CR6362 Honorable Laura Lee Parker, Judge Presiding ORDER On November 7, 2022, appellant’s court-appointed attorney filed a brief and motion to withdraw pursuant to Anders v. California, 386 U.S. 738 (1967), in which counsel asserts there are no meritorious issues to raise on appeal. Counsel sent copies of the brief and motion to withdraw to appellant and explained appellant’s rights to review the record, file a pro se brief, and file a pro se petition for discretionary review if this court determines the appeal is frivolous. See Kelly v. State, 436 S.W.3d 313 (Tex. Crim. App. 2014). In addition, counsel’s letter explained how to obtain the record and enclosed a motion for this purpose. See id. As of the date of this order, appellant has not filed the record-request motion provided to him by his counsel. If appellant desires to file a pro se brief, we order he do so by December 16, 2022. At this time, the State has filed a notice waiving its right to file a brief in this case unless appellant files a pro se brief. If appellant files a timely pro se brief, the State may file a responsive brief no later than thirty days after appellant’s pro se brief is filed in this court. We further ORDER the motion to withdraw filed by appellant’s counsel held in abeyance pending further order of the court. See Penson v. Ohio, 488 U.S. 75, 80–82 (1988) (holding motion to withdraw should not be ruled on before appellate court independently reviews record to determine whether counsel’s evaluation that appeal is frivolous is sound); Schulman v. State, 252 S.W.3d 403, 410–11 (Tex. Crim. App. 2008) (same); see also Kelly, 436 S.W.3d at 319 (appointed counsel’s duties of representation do not cease when he files a motion to withdraw; counsel must continue to “act with competence, commitment and dedication to the interest of the client” until the court of appeals grants the motion). Accordingly, no new attorney will be appointed for appellant at this time. _________________________________ Luz Elena D. Chapa, Justice IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said court on this 16th day of November, 2022. ________________________________ Michael A. Cruz, Clerk of Court	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488536/	Fourth Court of Appeals San Antonio, Texas November 15, 2022 No. 04-22-00574-CV Jonathan CASTRO, Appellant v. Theretha SMITH, Appellee From the County Court at Law No. 3, Bexar County, Texas Trial Court No. 2022CV02911 Honorable David J. Rodriguez, Judge Presiding ORDER The clerk’s record has been filed in this appeal. The record reflects that in this forcible detainer action, Appellant Jonathan Castro appeals from the county court’s final judgment granting possession of certain real property to Appellee Theretha Smith. The only issue in a forcible detainer action is the right to actual possession of the property. See TEX. R. CIV. P. 510.3(e); Marshall v. Hous. Auth., 198 S.W.3d 782, 785 (Tex. 2006). “Judgment of possession in a forcible detainer action is not intended to be a final determination of whether the eviction is wrongful; rather, it is a determination of the right to immediate possession.” Marshall, 198 S.W.3d at 787. Here, the county court’s final judgment grants only possession and does not grant past rent or attorney’s fees to Smith. Further, the clerk’s record reflects that the supersedeas bond was set at $20,000. There is no indication in the record that Appellant Castro superseded the judgment by posting bond. Further, on September 27, 2022, Appellant Castro informed this court by telephone of his updated permanent address, which is a different address from the property at issue. It therefore appears that Appellant Castro did not supersede the judgment and may no longer be in possession of the property at issue. Although the failure to supersede a forcible-detainer judgment does not divest an appellant of the right to appeal, an appeal from a forcible-detainer action becomes moot if the appellant is no longer in possession of the property, unless the appellant holds and asserts “a potentially meritorious claim of right to current, actual possession” of the property. Marshall, 198 S.W.3d at 787. Accordingly, we ORDER Appellant Castro to file a written response by November 30, 2022 explaining whether he has a potentially meritorious claim of right to current, actual possession of the property. See id. If Appellant Castro fails to respond within the time provided, this appeal will be dismissed. See TEX. R. APP. P. 42.3(c). _________________________________ Liza A. Rodriguez, Justice IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said court on this 15th day of November, 2022. _________________________________ Michael A. Cruz, Clerk of Court	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488508/	Fourth Court of Appeals San Antonio, Texas November 18, 2022 No. 04-22-00523-CV IN THE INTEREST OF A.H. III, A CHILD From the 407th Judicial District Court, Bexar County, Texas Trial Court No. 2018-PA-01990 Honorable Charles E. Montemayor, Judge Presiding ORDER This is an accelerated appeal of the trial court’s order terminating appellant’s parental rights. The disposition of this appeal is governed by the standards set forth in Rule 6.2 of the Texas Rules of Judicial Administration. Tex. R. Jud. Admin. 6.2. Accordingly, this appeal is required to be brought to final disposition within 180 days of the date the notice of appeal is filed. Id. Appellant’s brief was due on November 14, 2022. On November 14, 2022, appellant filed a second motion for extension of time to file appellant’s brief. The motion is GRANTED. Appellant’s brief is due no later than December 5, 2022. Given the time constraints governing the disposition of this appeal, no further requests for extensions of time will be considered. It is so ORDERED on November 18, 2022. PER CURIAM ATTESTED TO: _______________________ MICHAEL A. CRUZ, CLERK OF COURT	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488501/	Fourth Court of Appeals San Antonio, Texas November 21, 2022 No. 04-22-00725-CV David Gene BECKA, Appellant v. The STATE of Texas, Appellee From the 144th Judicial District Court, Bexar County, Texas Trial Court No. 2019CR1257 Honorable Andrew Wyatt Carruthers, Judge Presiding ORDER After we granted a first extension, we set the reporter’s record due on November 17, 2022. On the due date, court reporter Roxanne F. Pena filed a notice of late record. She noted she is diligently working on the record, but she is waiting to receive exhibits from the district clerk. By statute, this appeal must be given priority over all other appeals. See TEX. HEALTH & SAFETY CODE ANN. § 574.070 (“The court of appeals and supreme court shall give an appeal under this section preference over all other cases and shall advance the appeal on the docket.” (emphasis added)). We ORDER Roxanne F. Pena to continue to give this record the highest priority status in the order of preparing records. See id. The reporter’s record is due as soon as it is ready, but not later than November 28, 2022. See TEX. R. APP. P. 35.3(c) (limiting an extension in an accelerated appeal to ten days). _________________________________ Patricia O. Alvarez, Justice IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said court on this 21st day of November, 2022. ___________________________________ MICHAEL A. CRUZ, Clerk of Court	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488539/	************************************************************** The ‘‘officially released’’ date that appears near the beginning of this opinion is the date the opinion was released as a slip opinion. The operative date for the beginning of all time periods for filing postopinion motions and petitions for certification is the ‘‘officially released’’ date appearing in the opinion. This opinion is subject to revisions and editorial changes, not of a substantive nature, and corrections of a technical nature prior to publication in the Connecticut Law Journal. ************************************************************** IN RE AUBREY K.* (AC 45241) Bright, C. J., and Seeley and Pellegrino, Js. Syllabus The respondent mother appealed to this court from the judgment of the trial court terminating her parental rights with respect to her minor child, A. The mother had a history of substance abuse, mental health issues, and domestic violence in her relationships, and A had witnessed such violence since her infancy. One of the mother’s boyfriends seriously injured A’s younger sister, requiring her to be hospitalized and, there- after, the petitioner, the Commissioner of Children and Families, filed petitions for termination of the mother’s parental rights as to both children. At the time of trial, the mother was allegedly engaged to a different man, L. On appeal, the mother claimed that there was insuffi- cient evidence for the trial court to find that the termination of her parental rights was in A’s best interest, in accordance with the applicable statute (§ 17a-112 (k)). Held: 1. The respondent mother could not prevail on her claim that the trial court’s findings as to her ability to care for A were clearly erroneous: a. The trial court’s conclusions regarding the mother’s relationship with L and its indication of her ability to be trusted with the health and well- being of young children were supported by the record, including ample evidence demonstrating that the mother’s past romantic relationships had significant adverse residual effects on A, evidence of L’s previous criminal history, the mother’s failure to disclose domestic violence in her relationships to the Department of Children and Families (department) in the past, evidence that supported the department’s concern that there was a risk of domestic violence in the mother’s relationship with L despite the testimony of service providers, and testimony that the mother would not permit an in-person meeting between the department and L. b. This court concluded that, although it agreed with the respondent mother’s claim that the trial court had understated her efforts at rehabili- tation, there was evidence in the record to support the trial court’s finding that the mother was unable and/or unwilling to benefit from the services offered by the department and the record demonstrated that other factors considered by the trial court with respect to whether termi- nation of the mother’s parental rights was in A’s best interest outweighed the continuing efforts made by the mother to advance her rehabilitation. 2. The respondent mother could not prevail on her claim that the trial court’s best interest determination was clearly erroneous as the unchallenged factual findings regarding A’s therapeutic needs, the department’s con- cern for A’s potential regression if she were returned to the mother’s care, and the need for A to have stability in her life supported the court’s determination. 3. Contrary to the respondent mother’s claim, this court was not left with a definite and firm conviction that a mistake had been made by the trial court in its best interest determination as the facts in the record strongly supported that determination: the court addressed each of the seven factors delineated by § 17a-112 (k) and this court would not second- guess that court’s assessment that A’s need for permanency, stability and continuity of environment outweighed the benefits of maintaining a connection with the mother; in the present case, the court found that A required extensive and ongoing therapeutic and clinical services to treat her mental health issues, the frequency and severity of her behav- ioral issues had reduced in her most recent foster home because of the consistent and in-depth therapeutic services she engaged in with the facilitation of her foster parents, A had bonded with her most recent foster family, and A’s foster parents were willing to adopt both A and her younger sister. Argued September 6—officially released November 21, 2022** Procedural History Petition by the Commissioner of Children and Fami- lies to terminate the respondents’ parental rights with respect to their minor child, brought to the Superior Court in the judicial district of New Britain, Juvenile Matters, where the respondent father consented to the termination of his parental rights; thereafter, the matter was tried to the court, C. Taylor, J.; judgment terminat- ing the respondents’ parental rights, from which the respondent mother appealed to this court. Affirmed. Joshua Michtom, assistant public defender, for the appellant (respondent mother). Nisa J. Khan, assistant attorney general, with whom, on the brief, were William Tong, attorney general, and Evan O’Roark, assistant attorney general, for the appel- lee (petitioner). Opinion BRIGHT, C. J. The respondent mother, Victoria K., appeals from the judgment of the trial court, rendered in favor of the petitioner, the Commissioner of Children and Families, terminating her parental rights with respect to her minor daughter, Aubrey K. (Aubrey),1 on the ground that the respondent’s acts of parental commission or omission denied Aubrey the care neces- sary for her well-being pursuant to General Statutes § 17a-112 (j) (3) (C).2 The court also found that, although the Department of Children and Families (department) had made reasonable efforts to reunify the respondent with Aubrey, the respondent was unable or unwilling to benefit from reunification efforts; see General Statutes § 17a-112 (j) (1); and that termination of the respon- dent’s parental rights was in Aubrey’s best interest. See General Statutes § 17a-112 (j) (2). On appeal, the respondent’s single claim is that there was insufficient evidence for the trial court to find that the termination of her parental rights was in Aubrey’s best interest. We affirm the judgment of the trial court. The following facts and procedural history are rele- vant to the resolution of this appeal. Aubrey was born in October, 2014, to the respondent and Jacob K. (Jacob) and is the respondent’s eldest child. Jacob abused the respondent during their relationship, and Aubrey was present as an infant during incidents of the abuse. In 2015, Jacob was arrested and charged with various offenses stemming from his physical abuse of the respondent, and the criminal court issued a protec- tive order against Jacob protecting the respondent from May 26, 2015, through November 15, 2016. In December, 2017, the respondent had a second child, Amelia K. (Amelia), with Gregory S. (Gregory).3 In January, 2019, the respondent met and began a romantic relationship with Dylan V. (Dylan) while both were staying at a shelter in New Britain. In February, 2019, Dylan, the respondent, Aubrey, and Amelia moved into an apartment together. Dylan began physically abusing the respondent shortly thereafter and contin- ued to do so on a regular basis while he lived with the respondent. While she and her children lived with Dylan, the respondent left Aubrey and Amelia alone in Dylan’s care while she went to work Monday through Friday afternoons and when she had appointments in the mornings. During this time, Aubrey was assaulted by Dylan at least once in the respondent’s presence. On June 22, 2019, the department received a report from the Hospital of Central Connecticut (hospital) regarding Amelia through its Child Abuse and Neglect Careline (careline). After an initial evaluation at the hospital, Amelia was transferred to Connecticut Chil- dren’s Medical Center (medical center) due to physical injuries. She had sustained multiple rib fractures, two healing hand fractures of the right hand, a laceration to the pancreas, significant bruising to her body, and bruising around her anus. Amelia had also lost two pounds in one week, vomited several times, had a low- grade fever for two weeks, and appeared ‘‘wobbly and weak.’’ Her blood work did not show any underlying medical conditions that may have caused the injuries. Amelia’s injuries were suspicious for inflicted injury and the matter was referred to the medical center’s Suspected Child Abuse and Neglect (SCAN) team for further investigation. In the early hours of June 23, 2019, the department faxed a suspected abuse and neglect report to the New Britain Police Department. The department also assigned the case to a careline primary investigator, who worked with the SCAN team to investigate the matter. Due to the suspicious nature of Amelia’s injur- ies, the department investigator and the SCAN team had Aubrey examined for similar injuries. Aubrey did not present with any bruising or physical injuries. At that time, both the respondent and Dylan maintained that they did not know how Amelia had been injured. At 1:50 p.m., the department investigator and a medi- cal center trauma team member spoke with the respon- dent individually and informed her of the full extent of Amelia’s injuries. Upon hearing this, the respondent became extremely upset and stated that only she and Dylan care for the children, and because she did not injure Amelia, Dylan must have done so. The depart- ment thereafter implemented a ninety-six hour adminis- trative hold on behalf of both Aubrey and Amelia. Police officers then brought the respondent and Dylan to the New Britain Police Department and inter- viewed them separately. The respondent reported that she first noticed bruises on Amelia two weeks prior to June 22, 2019, and that the bruises continued to grow. On June 22, 2019, upon seeing that Amelia could not walk, the respondent brought Amelia to the hospital. She had not sought medical attention for Amelia in relation to the bruising prior to that point. During his interview with the police, Dylan admitted to causing Amelia’s injuries. About two weeks prior to June 22, 2019, Amelia became fussy and would not go back to bed. Amelia had been constipated, so Dylan put her on the kitchen counter and began pushing on her stomach with his fists. Dylan became frustrated and proceeded to push on her stomach as hard as he could. He also said that he became angry and ‘‘snapped’’ and might have punched Amelia in the stomach. Dylan then placed Amelia in her crib. When Amelia continued to cry, Dylan went into her room and grabbed two of her fingers and bent them backward. Dylan did not tell the respondent about his actions. On June 24, 2019, Dylan was arrested and charged with cruelty to persons, risk of injury to a child, and assault in the first degree. On June 24, 2019, department investigators and SCAN team members met with the respondent to gather social history information regarding Amelia and further inter- view her about the events leading to Amelia’s injuries. The respondent disclosed previous incidents of domes- tic violence by Dylan and indicated that she was fearful of him. Although she had wanted to bring Amelia for medical care earlier than June 22, Dylan had told her not to and she had been afraid Dylan would hurt her if she did not do what he said. On June 27, 2019, the respondent was arrested and charged with risk of injury to a child and cruelty to persons for her failure to seek medical attention for Amelia in a timely manner. Subsequently, the respon- dent pleaded nolo contendere and was thereafter con- victed of one count of risk of injury to a child.4 She was sentenced to five years of incarceration, execution suspended, with three years of probation. The sentenc- ing court also issued a no contact standing criminal protective order prohibiting the respondent from having any contact with Amelia until January 7, 2099. On June 27, 2019, the petitioner sought an order of temporary custody on behalf of both Aubrey and Ame- lia. She alleged that the children were in physical danger and that immediate removal was necessary to ensure their safety. That day, the petitioner also filed neglect petitions and termination of parental rights petitions as to both children. In the neglect petitions, the petitioner alleged that the children had been denied proper care and attention, physically, educationally, emotionally, or morally, and that the children had been permitted to live under condi- tions, circumstances, or associations injurious to their well-being. Additionally, the petitioner alleged that Amelia had been abused in that she (1) had physical injury or injuries inflicted by other than accidental means, (2) had injuries that were at variance with the history given of them, or (3) was in a condition that resulted from maltreatment, including but not limited to malnutrition, sexual molestation or exploitation, dep- rivation of necessities, emotional maltreatment, or cruel punishment. In the termination of parental rights petition for Aubrey, the petitioner alleged claims of abandonment and no ongoing relationship as to her father, Jacob, and acts of commission/omission as to the respondent. Regarding Amelia, the petitioner alleged claims of aban- donment and no ongoing relationship as to her father, Gregory, and acts of commission/omission and assault of a sibling as to the respondent. On June 27, 2019, the court, Aaron, J., granted an ex parte order of temporary custody and ordered specific steps for the respondent. On July 2, 2019, the respon- dent appeared in court with counsel. She did not chal- lenge the order for temporary custody and entered a pro forma denial as to the neglect allegations. The court, Abery-Wetstone, J., issued amended preliminary steps for the respondent. On October 28, 2019, the department began facilitat- ing weekly supervised visits between Aubrey and the respondent. Those visitations continued through trial of the termination petition. On January 27, 2020, the respondent entered written pleas of nolo contendere to the conditions injurious section of the neglect petitions concerning Amelia and Aubrey. The respondent also entered written pleas of nolo contendere to the abuse section concerning Amelia relating to physical injury or injuries inflicted by nonac- cidental means and to a condition that is the result of maltreatment. The court, Huddleston, J., accepted the respondent’s pleas, adjudicated both children neglected, and committed the children to the care and custody of the petitioner. The court also ordered final steps for the respondent.5 In accordance with those steps and the department’s reunification efforts, the respondent was referred to several service providers. In or around March, 2020, the department was made aware that the respondent had begun a romantic rela- tionship with Luis C. (Luis), whom she met four months earlier while both were residing in a shelter. When the respondent found housing, she invited Luis to move in with her. Luis had been convicted of disorderly conduct, did not have steady employment, and was ‘‘the subject of several expired full no contact protective orders with a former girlfriend (December, 2015, to June, 2016) and family members (July, 2017, to November, 2019) identified as protected parties.’’ Consequently, the department was concerned that reuniting Aubrey with the respondent would place her in an environment where she could again be exposed to domestic violence. In July, 2020, the petitioner filed a motion to review the children’s permanency plans. The permanency plan for each child called for the termination of the respon- dent’s parental rights and the rights of each child’s father and subsequent adoption of Aubrey and Amelia. On October 7, 2020, the court, C. Taylor, J., granted the motion, approving the plans. A trial on the petitions to terminate parental rights occurred on March 8 and 15, June 14, and July 20, 21 and 22, 2021. The respondent appeared and was represented by counsel. On the second day of trial, Aubrey’s father, Jacob, consented to the termination of his parental rights. On November 17, 2021, the court, C. Taylor, J., issued a memorandum of decision in which it granted the petitions to terminate the respondent’s parental rights as to both Aubrey and Amelia.6 The court made exten- sive findings of fact and concluded that the petitioner had established by clear and convincing evidence that statutory grounds for termination of parental rights existed and that such termination was in the best inter- ests of the children. With respect to the statutory grounds, the court found by clear and convincing evidence that Aubrey and Ame- lia had been denied, by reason of an act or acts of parental commission or omission, including but not lim- ited to severe physical abuse or a pattern of abuse, the care, guidance or control necessary for the child’s physical, educational, moral or emotional well-being. In particular, the court determined that the respondent’s failure to remove Amelia and Aubrey from Dylan’s pres- ence, to obtain prompt medical care for Amelia, and to object or to act when Dylan assaulted Aubrey in her presence showed that her priorities were not those consistent with the best interests of her children and demonstrated that she could not be relied on to care for them adequately and safely. The court also found, pursuant to § 17a-112 (j) (1), that the department had made reasonable efforts to reunify the respondent with Aubrey and Amelia and that the respondent was unable or unwilling to benefit from those efforts. Finally, in the dispositional phase of the proceedings, the court considered and made the requisite factual findings pursuant to § 17a-112 (k)7 and concluded that the petitioner had proved by clear and convincing evi- dence that terminating the respondent’s parental rights was in Aubrey’s and Amelia’s best interests. Specifi- cally, the court made the following relevant findings: ‘‘Considered carefully, the clear and convincing evi- dence shows that [the department] offered timely, appropriate, and comprehensive services to [the respondent] to facilitate her reunification with Aubrey and made reasonable efforts to reunite her with Aubrey. . . . The clear and convincing evidence indicates that [the respondent] did utilize some services as indicated herein but failed to gain appropriate benefits from these services. . . . ‘‘The court further finds that the clear and convincing evidence presented in the present case indicates that [the respondent] was aware of her issues and deficits and had received specific steps addressing said issues. The clear and convincing evidence shows that despite having knowledge of the nature of [her] individual issues, [the respondent] remained unable and/or unwill- ing to benefit from reasonable reunification services with Aubrey. . . .8 ‘‘The clear and convincing evidence shows that [the respondent] has generally complied with the final spe- cific steps, and that she was still in treatment at [Com- munity Mental Health Affiliates (CMHA)] at the time of the . . . trial. However, [the respondent] does not appear to have undertaken an intensive domestic vio- lence program yet. . . .9 ‘‘The court finds by clear and convincing evidence that [the respondent] has been unable and/or unwilling to make realistic and sustained efforts to conform her conduct to acceptable parental standards. The clear and convincing evidence indicates that [the respondent] has been unable and/or unwilling to address her issues, especially her mental health issues, substance abuse issues, domestic violence issues, parenting deficits, and failure to fully benefit from counseling and services in a timely manner. The clear and convincing evidence also shows that [the respondent] has been placed on notice to address her issues in the past. Despite being offered opportunities to address her issues, [the respon- dent] has failed to do so with any degree of finality. ‘‘The clear and convincing evidence indicates that [the respondent] is still in individual therapy and has yet to appropriately address her troubling domestic vio- lence issues. [The respondent’s] domestic violence issues are extremely concerning. Those issues have resulted in the present situation that she finds herself in, and her relationships with men have been beset with domestic violence issues, which has resulted in serious physical injury to Amelia. . . . [The respondent’s] rashness in establishing a hasty relationship with Luis . . . demonstrates her questionable judgment. ‘‘The clear and convincing evidence shows that despite the best efforts by [the department], [the respondent] is unable and/or unwilling to take the steps necessary in order to attempt to become a safe, nurtur- ing and responsible parent for Amelia and Aubrey. The evidence at the . . . trial clearly and convincingly shows that she is incapable of being a safe, nurturing and responsible parent for her children. [The respon- dent] is obviously unable to care for Amelia and Aubrey appropriately and to provide them with the safety, care, permanence, and stability that each child needs and deserves. Her obvious parental deficits and other issues make her incapable of being a safe, responsible and nurturing mother for Amelia and Aubrey. ‘‘The court finds by clear and convincing evidence that [the respondent] has not made the changes neces- sary in her individual lifestyle in a timely manner that would indicate that she would be a safe, responsible and nurturing parent for Amelia and Aubrey. ‘‘The court finds by clear and convincing evidence that to allow [the respondent] further time to rehabili- tate herself, if that were possible, and to assume a responsible position in the children’s lives would not be in the best interests of Amelia and Aubrey.’’ (Citations omitted.) The court then explained that it had ‘‘examined multi- ple relevant factors, including the children’s interests in sustained growth, development, well-being, stability, and continuity of their environment; their length of stay in foster care; the nature of their relationships with their foster parents and their biological parents; and the degree of contact maintained with their biological parents,’’ to determine whether termination of parental rights would be in the best interests of the children. The court noted that it had ‘‘to balance the children’s intrinsic needs for stability and permanency against the benefits of maintaining a connection with their biologi- cal parents.’’ The court determined that, ‘‘under such scrutiny, the clear and convincing evidence in the pres- ent matter establishes that it is not in the best interests of Amelia and Aubrey to continue to maintain any legal relationship with the respondent parents. ‘‘The clear and convincing evidence shows that Jacob, [the respondent] and Gregory have numerous issues that are clearly antithetical to safe, responsible, and nurturing parenting, and are also antagonistic to the best interests of Amelia and Aubrey. . . . ‘‘The clear and convincing evidence shows that [the respondent’s] issues are those of substance abuse, men- tal health, parenting deficits, domestic violence and a failure to complete and benefit from counseling and services. The clear and convincing evidence also shows that [the respondent] was unable to appropriately address these issues by the time of the filing of the . . . petition or by the time of the . . . trial. ‘‘[The respondent] has undertaken some treatment. Alison Cormier, [a licensed clinical social worker], [the respondent’s] clinician at the jail diversion program at CMHA, testified that [the respondent] had successfully completed that program. Cormier characterized [the respondent] as having gone from high risk to a lesser level. Cormier also indicated that one of the objectives of the program was that [the respondent] work on devel- oping healthy relationships. Cormier opined that [the respondent] was no longer at high risk for substance abuse and domestic violence and that she had gained insight into her predicament. ‘‘Kimberly Sullivan, [a licensed clinical social worker], testified as to [the respondent’s] successful completion of the [intensive outpatient program] at CMHA, and stated that [the respondent] was an active participant and had made progress toward the [treat- ment] goals. Sullivan testified that domestic violence was not one of [the respondent’s] treatment goals. ‘‘The most telling aspect as to [the respondent’s] mind- set lies in her most outstanding issue. [The respon- dent’s] downfall has always been her choice of male companionship. [The respondent’s] men have been vio- lent, involved in the criminal justice system and have domestic violence involvement. ‘‘Jacob is a violent convicted felon, and he has a lifetime no contact protective order with the mother of his older child. He has a history of serious dysfunction, which dates back to his childhood. Jacob has a history of delinquency, [families with service needs]10 behavior and mental health issues. Yet, [the respondent] believed that Jacob was an appropriate individual to have a rela- tionship with and to father her child, despite his con- cerning issues. ‘‘Gregory is a violent convicted felon, and he is pres- ently finishing a five year jail term for violation of a [protective] order and assault in the second degree. He has numerous other felony and misdemeanor convic- tions, including additional convictions for violation of a [protective] order, assault in the second degree and sale of narcotics. . . . Again, [the respondent] believed that Gregory, like Jacob, was an appropriate individual to have a relationship with and to father her child, despite his concerning issues. ‘‘The court next addresses Dylan, who [the respon- dent] had met in a homeless shelter and established a relationship with. In February, 2019, through the aus- pices of [the Supportive Housing for Families program], [the respondent] secured housing for herself and her children, but then invited Dylan to reside with them. [The respondent] was aware that Dylan was residing at the shelter after his discharge from a hospital as a result of a [suicide] attempt. She also knew that he was not allowed to go back to his family’s home after a fight with his brother. Nevertheless, she invited Dylan to reside with her and her young, dependent children. The results of that dangerous exercise of extremely poor judgment left Amelia seriously injured and Aubrey fur- ther traumatized. ‘‘[The respondent] has again exercised extremely poor judgment in returning to the homeless shelter and establishing a relationship with Luis . . . one of the fellow denizens therein. She established that relation- ship in an extremely short period of time. Like [the respondent did with] Dylan, when she found housing, she invited Luis . . . to move in with her. Not much is known about [Luis’] history. He has a conviction for disorderly conduct and has been the alleged perpetrator in various protective orders. He does not have any steady employment. [The respondent] has done her best to prevent [the department] from getting any further information about [Luis]. [The respondent] now refers to Luis . . . as her fiancé. ‘‘It is clear that [the respondent’s] need to have a relationship with a man overpowers any maternal pro- tective instinct and any individual protective instinct that she may have possessed. That need appears to defy all logic and common sense, and places her children and herself in dire peril, as demonstrated by her relationship with Dylan. Despite the fact that Dylan beat her, beat Aubrey, and left Amelia with a mass of bruises, [the respondent] could not force herself to leave Dylan to save herself and her children. ‘‘[The respondent] has proven that she cannot be trusted with the health and well-being of young chil- dren. She cannot prioritize their health, safety and well- being over the man in her life, regardless of how callous his hands might be. Perhaps an accurate assessment of [the respondent] and her situation has already been made by Jacob, who had reported to [the department] ‘that [the respondent] has the tendency to neglect her children when she is involved in intimate relationships due to her low self-esteem and mental instability.’ ‘‘Unfortunately, the clear and convincing evidence shows that, despite her referrals and services, [the respondent] has failed to rehabilitate herself sufficiently to be a safe, nurturing, and responsible parent for both Amelia and Aubrey. The court also finds that too much time has already elapsed to justify giving [the respon- dent] further time to show her rehabilitation. ‘‘The clear and convincing evidence shows that . . . [the respondent] . . . cannot keep [her] children safe or care for them properly. The clear and convincing evidence also shows that . . . [the respondent has] failed to gain insight into the efforts that [she] needs to make in order to become a safe, nurturing, and responsible parent for [her] children. The clear and convincing evidence shows that the individual judgment and conduct of [the respondent] still remains question- able. ‘‘The clear and convincing evidence shows that Ame- lia and Aubrey cannot afford to wait any longer for [the respondent] to rehabilitate [herself]. [The respondent] represent[s] a well demonstrated hazard and a danger to them. ‘‘The clear and convincing evidence shows that the time that the respondent . . . need[s] to attempt to rehabilitate [herself] and establish [herself] in the com- munity as [a] safe, nurturing, and responsible [parent], if that were possible, is time that the children cannot spare. ‘‘The individual parental performance . . . of [the respondent] clearly and convincingly show[s] that [she] lacks the attributes and characteristics necessary to fulfill a valid parental role. [Her] individual [failure] to address [her] issues in a timely manner and to success- fully address [her] individual parental deficits clearly and convincingly show that it is unlikely that [she] will ever be able to conform [her] individual behaviors to appropriate parental standards or be able to serve as a safe, nurturing, and responsible [parent] for Amelia or Aubrey. ‘‘Based upon the individual behaviors and perfor- mances so far of . . . [the respondent] . . . this court cannot foresee . . . the respondent . . . ever having the ability or the patience required to follow the regimen necessary for . . . her children to maximize their abili- ties and achievements. ‘‘[The department] recommended the [termination of parental rights]. . . . [The department] also noted that [the respondent] was aware of Dylan’s abusive behavior and psychological issues but still asked him to move into her home with her children. [The department] argued that [the respondent] had not yet adequately dealt with her domestic violence issues. ‘‘[The respondent] has barely begun unearthing her domestic violence and mental health issues. Her previ- ous clinician, [Antonia] Mahoney, reported that domes- tic violence was addressed in individual sessions, but that [the respondent] has only ‘briefly’ discussed her current relationship with Luis . . . . On January 28, 2021, [Raven] Williams, another clinician, reported that [the respondent] accepts responsibility for ‘not know- ing’ what Dylan was doing to her children. Williams reported that a domestic violence component has not been added to [the respondent’s] treatment at this time. [The department] indicated concern with [the respon- dent’s] conduct concerning Luis. . . . ‘‘There has been absolutely no evidence to establish the unreasonableness of this request. ‘‘At the . . . trial, counsel for the children recom- mended the [termination of parental rights] as being in the best interests of Amelia and Aubrey. . . . ‘‘Counsel for [the respondent] argued against the [ter- mination of parental rights], pointing out that Dylan had abused and controlled [the respondent] and that [the respondent’s] low self-esteem and history of child- hood abuse made her susceptible. Counsel for [the respondent] conceded that her client could not effec- tively contest the [termination of parental rights] for Amelia due to the criminal disposition and the standing criminal protective order. She also claimed that [the department] was shortsighted in not acknowledging any damage caused to Aubrey by the change in foster homes. ‘‘Counsel for [the respondent] pointed out that [the respondent] had done services, gotten a job and was involved in a new relationship. She claimed that [the respondent] has gained insight into how she failed her children. Counsel for [the respondent] claimed that her client was a changed woman, was capable of parenting Aubrey and should be given a chance to do so. . . . ‘‘The clear and convincing evidence shows that the respondent [is] in no position to assume [her] children’s care in a safe, nurturing and responsible manner. ‘‘[The respondent] has undertaken services and has visited with Aubrey. [The respondent] also has a resi- dence and full-time employment. Unfortunately, [the respondent] has yet to appropriately address her domestic violence issues, and has prioritized her rela- tionship with Luis . . . over her children. . . . ‘‘The clear and convincing evidence shows that Ame- lia and Aubrey can no longer wait for permanency, continuity, and stability in their lives. The children need a chance to grow up in a stable home with responsible, nurturing and trustworthy caretakers who have their best interests as paramount. The present foster parents have indicated a willingness to adopt the children. Ame- lia and Aubrey . . . have an opportunity for stability, nurture and permanence in the foster home.’’ (Footnotes omitted.) The court concluded that, having balanced the indi- vidual and intrinsic needs of Amelia and Aubrey for stability and permanency against the benefits of main- taining a connection with the respondent, the clear and convincing evidence established that the best interests of Amelia and Aubrey could not be served by continuing to maintain any legal relationship to the respondent. The court therefore granted the petitions to terminate the respondent’s parental rights as to Amelia and Aubrey. This appeal as to Aubrey followed. Additional facts will be set forth as necessary. On appeal, the respondent does not contest the court’s findings in the adjudicatory phase of the pro- ceeding, namely, that the respondent’s acts of parental commission or omission denied Aubrey the care neces- sary for her well-being and that the department made reasonable efforts to reunify Aubrey with the respon- dent. The respondent concedes that these findings are supported by clear and convincing evidence. Instead, the respondent challenges the court’s finding in the dispositional phase of the proceeding that it was in the best interest of Aubrey to terminate the respondent’s parental rights. Specifically, the respondent contends that there was insufficient evidence for the court to find that the termination of her parental rights was in Aubrey’s best interest. We disagree. We begin with our standard of review. Our Supreme Court has clarified that a trial court’s ultimate conclu- sion that a ground for termination of parental rights has been proven presents a question of evidentiary suffi- ciency. See In re Shane M., 318 Conn. 569, 587–88, 122 A.3d 1247 (2015) (clarifying standard of review); see also In re Egypt E., 327 Conn. 506, 525–26, 175 A.3d 21 (‘‘[a]lthough the trial court’s subordinate factual find- ings are reviewable only for clear error, the court’s ultimate conclusion that a ground for termination of parental rights has been proven presents a question of evidentiary sufficiency’’), cert. denied sub nom. Morsy E. v. Commissioner, Dept. of Children & Families, U.S. , 139 S. Ct. 88, 202 L. Ed. 2d 27 (2018). Since In re Shane M., our Supreme Court has not had the occasion to address whether the evidentiary sufficiency standard of review applies to a court’s best interest determination. As a result, this court has either declined to decide whether to apply the evidentiary sufficiency standard of review to a best interest claim; see, e.g., In re Elijah G.-R., 167 Conn. App. 1, 29–30 n.11, 142 A.3d 482 (2016); In re Nioshka A. N., 161 Conn. App. 627, 637 n.9, 128 A.3d 619, cert. denied, 320 Conn. 912, 128 A.3d 955 (2015); or has continued to apply the clearly erroneous standard of review. See, e.g., In re Angelina M., 187 Conn. App. 801, 803–804, 203 A.3d 698 (2019); In re Gabriella C.-G., 186 Conn. App. 767, 770, 200 A.3d 1201 (2018), cert. denied, 330 Conn. 969, 200 A.3d 699 (2019); In re Athena C., 181 Conn. App. 803, 811, 186 A.3d 1198 (2018). Following our precedents, we apply the clearly erroneous standard of review to the respondent’s claim.11 ‘‘In the dispositional phase of a termination of paren- tal rights hearing, the emphasis appropriately shifts from the conduct of the parent to the best interest of the child. . . . It is well settled that we will overturn the trial court’s decision that the termination of parental rights is in the best interest of the [child] only if the court’s findings are clearly erroneous. . . . In the dis- positional phase of a termination of parental rights hear- ing, the trial court must determine whether it is estab- lished by clear and convincing evidence that the continuation of the [respondent’s] parental rights is not in the best interest of the child. In arriving at this deci- sion, the court is mandated to consider and make writ- ten findings regarding seven statutory factors deline- ated in [§ 17a-112 (k)]. . . . The seven factors serve simply as guidelines for the court and are not statutory prerequisites that need to be proven before termination can be ordered. . . . There is no requirement that each factor be proven by clear and convincing evidence. . . . ‘‘[T]he fact that the legislature [has interpolated] objective guidelines into the open-ended fact-oriented statutes which govern [parental termination] disputes . . . should not be construed as a predetermined weighing of evidence . . . by the legislature. [If] . . . the record reveals that the trial court’s ultimate conclu- sions [regarding termination of parental rights] are sup- ported by clear and convincing evidence, we will not reach an opposite conclusion on the basis of any one segment of the many factors considered in a termination proceeding . . . . Indeed . . . [t]he balancing of interests in a case involving termination of parental rights is a delicate task and, when supporting evidence is not lacking, the trial court’s ultimate determination as to a child’s best interest is entitled to the utmost deference. . . . [A] trial court’s determination of the best interests of a child will not be overturned on the basis of one factor if that determination is otherwise factually supported and legally sound.’’ (Internal quota- tion marks omitted.) In re Ryder M., 211 Conn. App. 793, 817–18, 274 A.3d 218, cert. denied, 343 Conn. 931, 276 A.3d 433 (2022); see also In re Malachi E., 188 Conn. App. 426, 443–45, 204 A.3d 810 (2019); In re Jacob M., 204 Conn. App. 763, 787–89, 255 A.3d 918, cert. denied, 337 Conn. 909, 253 A.3d 43 (2021), and cert. denied sub nom. In re Natasha T., 337 Conn. 909, 253 A.3d 44 (2021). ‘‘A finding is clearly erroneous when either there is no evidence in the record to support it, or the reviewing court is left with the definite and firm conviction that a mistake has been made.’’ (Internal quotation marks omitted.) In re Davonta V., 285 Conn. 483, 488, 940 A.2d 733 (2008). In the present case, the court addressed each of the factors set forth in § 17a-112 (k) before determining that terminating the respondent’s parental rights was in the best interest of Aubrey. On appeal, the respondent challenges the court’s subordinate factual findings. The respondent contends that (1) the court’s findings as to her efforts to improve her ability to care for Aubrey are clearly erroneous, (2) the court’s findings as to Aubrey’s need for permanency ignore the evidence pre- sented, and (3) ‘‘the facts of this case are unusual and should leave this court with the definite and firm convic- tion that a mistake has been made.’’ We address each contention in turn. I The respondent contends that the court’s findings as to her ability to care for Aubrey are clearly erroneous.12 We disagree. A First, the respondent advances several related argu- ments that, when read together, dispute the court’s finding that ‘‘[the respondent] has again exercised extremely poor judgment in returning to the homeless shelter and establishing a relationship with Luis . . . one of the fellow denizens therein. . . . It is clear that [the respondent’s] need to have a relationship with a man overpowers any maternal protective instinct and any individual protective instinct that she may have possessed. . . . [The respondent] has proven that she cannot be trusted with the health and well-being of young children. She cannot prioritize their health, safety and well-being over the man in her life, regardless of how callous his hands might be.’’ The gravamen of the respondent’s arguments is that the court drew conclu- sions about the respondent’s relationship with Luis that were unsupported by the evidence. Specifically, the respondent argues: (1) the court improperly considered her former romantic partners, their involvement with the criminal justice system, and their histories of vio- lence in evaluating her current relationship with Luis; (2) the court failed to cite any authority for the premise that romantic relationships with homeless people are presumptively ill-considered or that there is a timeline for relationships that is presumptively imprudent; (3) the court did not point to evidence in the record indicat- ing problematic aspects of her relationship with Luis; and (4) ‘‘there is no evidence in the record of violence, coercion, or red flags of any kind in this relationship.’’ For the reasons that follow, we find the respondent’s arguments unpersuasive. At the outset, we note that there is ample evidence in the record demonstrating that the respondent’s past romantic relationships had significant adverse residual effects on Aubrey. In December, 2019, when the respon- dent was released from prison, Aubrey talked about killing herself out of fear that Dylan was also being released and would be able to hurt Aubrey and the respondent. At the time of trial, Aubrey continued to demonstrate anxiety about her mother’s relationships, asking the respondent if Luis was nice to her or yelled at her. Sasha Baldwin, the respondent’s department case worker, testified that she believed Aubrey’s ques- tions demonstrated a concern for the respondent’s safety in a new relationship. Although the respondent argues that the court’s consideration of her past rela- tionships was improper, we conclude that the court properly considered the respondent’s past relationships in evaluating how the respondent’s present circum- stances would affect Aubrey, including Aubrey’s con- cerns about the respondent’s new relationship because of what Aubrey witnessed in the respondent’s past rela- tionships. Further, the court’s findings as to the respondent’s relationship with Luis are supported by evidence in the record. The respondent began an intimate relationship with Luis in March, 2020, approximately nine months after Amelia had been hospitalized due to injuries inflicted on her by Dylan and shortly after the respon- dent had resolved her own criminal case relating to those injuries. Though not referenced by the court in its decision, Baldwin testified that ‘‘there were concerns regarding [the respondent] involving herself in an inti- mate relationship . . . and . . . the choice of the indi- vidual who she chose to involve herself with and how that may impact her children.’’ Baldwin also testified that the department was concerned that, should Aubrey be returned to the respondent’s care, she would be placed in a situation to witness domestic violence in the respondent’s relationship with Luis that was similar to what she had witnessed in the respondent’s relation- ship with Dylan. There was also evidence in the record that Luis had been convicted of disorderly conduct, did not have steady employment, and was ‘‘the subject of several expired full no contact protective orders with a former girlfriend (December, 2015, to June, 2016) and family members (July, 2017, to November, 2019) identified as protected parties.’’ Although the details of the protective orders and the conviction were not introduced at trial, the court, as the trier of fact, reason- ably could infer that Luis’ past legal issues supported the department’s contention that the respondent was at risk of further domestic violence.13 Accordingly, there is evidence in the record to support the court’s assess- ment of the risks attendant to the respondent’s relation- ship with Luis. In addition, contrary to the respondent’s assertion, the court was permitted to give little weight to the evidence ‘‘that none of the service providers working with [the respondent] while she was living with Luis . . . had any concern that there was domestic violence in the relationship.’’ ‘‘It is well established that [i]n a case tried before a court, the trial judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony. . . . The credibility and the weight of expert testimony is judged by the same standard, and the trial court is privileged to adopt what- ever testimony [it] reasonably believes to be credible. . . . On appeal, we do not retry the facts or pass on the credibility of witnesses. . . . It is the quintessential function of the fact finder to reject or accept certain evidence, and to believe or disbelieve any expert testi- mony. . . . The trier may accept or reject, in whole or in part, the testimony of an expert offered by one party or the other.’’ (Citations omitted; internal quotation marks omitted.) In re Carissa K., 55 Conn. App. 768, 781–82, 740 A.2d 896 (1999). Although the trial court may rely on expert testimony, it ultimately must make its own independent determination as to the best inter- est of the child. See In re Jeisean M., 270 Conn. 382, 398, 852 A.2d 643 (2004) (‘‘[a]lthough we often consider the testimony of mental health experts . . . such expert testimony is not a precondition of the court’s own factual judgment as to the child’s best interest’’ (citations omitted; internal quotation marks omitted)). In sum, we must defer to both the court’s weighing of the testimony presented and its independent factual determination as to what was in Aubrey’s best interest as long as they are supported by evidence in the record. Of note, the record contains evidence of the respon- dent’s failure to disclose domestic violence in her rela- tionships on previous occasions. Further, there was testimony that the respondent would not permit an in-person meeting between the department and Luis. Accordingly, the court had evidence that supported the department’s concern that there was a risk of domestic violence in the respondent’s relationship despite the testimony of the respondent’s service providers. There- fore, we cannot conclude that the court’s finding regard- ing the respondent’s relationship with Luis and its indi- cation of her inability to be ‘‘trusted with the health and well-being of young children’’ was clearly erroneous. There is evidence in the record that supports the court’s finding, and we are not left with a definite and firm conviction that a mistake has been made. B Second, the respondent generally disputes the court’s finding that ‘‘[t]he clear and convincing evidence also shows that [the respondent] was unable to appropri- ately address [her presenting issues of substance abuse, mental health, parenting deficits, domestic violence, and a failure to complete and benefit from counseling and services] by the time of the filing of the [termination of parental rights] petition or by the time of the . . . trial.’’ In arriving at this conclusion, the court discussed the respondent’s participation in several treatment pro- grams, noting that the respondent ‘‘has undertaken some treatment.’’ We agree with the respondent that the court understated the respondent’s efforts at reha- bilitation. The evidence presented at trial indicated that the respondent participated in and successfully com- pleted all treatment and services to which she was referred by the department and was deemed by every service provider to have made progress and to have gained insight surrounding her mental health needs, substance abuse, and domestic violence. In particular, the record demonstrates that the respondent had maintained her engagement with CMHA since December, 2019, and had ‘‘successfully completed CMHA’s Adult Intensive Outpatient Program . . . and Jail Diversion for Women program. [The respondent] continue[d] to engage in biweekly individual sessions and medication management to address her diagnoses of [post-traumatic stress disorder] and major depressive disorder, severe, and its impact on [the respondent’s] cycle of intimate partner violence . . . victimization, and parenting capacities.’’ The respondent also participated in dialectical behav- ior therapy14 groups from March, 2021, through May, 2021, once per week for one and one-half hours. According to the department social study in support of termination of parental rights, the respondent was ‘‘reportedly one of the most actively engaged partici- pants.’’ In addition, the respondent engaged in Circle of Security and Triple P Parenting services through Catholic Charities from July 15, 2020, through January 6, 2021. A parent educator with the program reported to the department that the respondent was able to process information effectively and relate it to her own parent- ing experiences. In June, 2021, Cormier, the respondent’s current clini- cian, reported to the department that the respondent was doing well in her sessions and had demonstrated insight and self-awareness. She stated that the respon- dent had processed how intimate partner violence was related to her current legal involvement and ‘‘[con- nected] the dots’’ as to how intimate partner violence impacted her adult life and led to her children entering the department’s care. At trial, Cormier testified that she would not classify the respondent as ‘‘high risk in relation to her mental health, substance use, [or] legal involvement.’’ Cormier further testified that the respon- dent soon would graduate from the jail diversion pro- gram and step down to a lower level of care due to her improvements. The court’s minimization of the aforementioned evi- dence does not, however, undermine its finding that the respondent was unable and/or unwilling to benefit from the services offered by the department. Indeed, there was evidence in the record that supported the court’s finding that the respondent did not address her underlying issues sufficiently by the time of the trial. Specifically, Baldwin testified that ‘‘throughout the life of this case it appears that [the respondent] has done really well at going to services and engaging in services, but when it comes to demonstrating the newly learned coping skills, [the respondent’s] decisions or her judgment has left the department with concerns as it relates to parenting, [intimate partner violence], and her mental health.’’ Baldwin further testified that, ‘‘it is the department’s understanding that [the respondent’s] choice of men and the predicaments that she has found herself in is a symptom of her mental health hygiene, which is why the department has communicated with CMHA asking that [the respondent] intentionally explore how her childhood maltreatment and her men- tal health has impacted her adult life and her parenting capacities as well as her choice in her intimate relation- ships.’’ Finally, Baldwin testified that ‘‘the biggest con- cern [for the department] is that it appears by [the respondent’s] decisions that she is not demonstrating that she is really intentionally engaged in services. And I say that because, not that she chose to get into a relationship, but I think from the department’s perspec- tive it is a concern that her choices would not—that Aubrey and Amelia were not at the forefront of her decision making. And that is as evidenced by Aubrey reportedly having some anxiety around having knowl- edge [that the respondent] is engaged to another man.’’ That the court placed greater weight on Baldwin’s testimony than Cormier’s does not mean its finding was clearly erroneous. The court, as the finder of fact, was ‘‘the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony. . . . [T]he trial court is privileged to adopt whatever testimony [it] reasonably believes to be credible.’’ (Citation omitted; internal quotation marks omitted.) In re Carissa K., supra, 55 Conn. App. 781–82. Therefore, because there is evidence in the record to support the court’s finding regarding the respondent’s failure to appropriately address her various issues, that finding is not clearly erroneous. Moreover, assuming, arguendo, that the court’s find- ing that the respondent failed to appropriately address her presenting issues was clearly erroneous, that alone does not support the contention that the court’s best interest determination was clearly erroneous. ‘‘As we have stated previously, the court’s inquiry in the disposi- tional phase of the proceeding was properly focused on whether termination of the respondent’s parental rights was in the children’s best interest.’’ In re Omar I., 197 Conn. App. 499, 586, 231 A.3d 1196, cert. denied, 335 Conn. 924, 233 A.3d 1091, cert. denied sub nom. Ammar I. v. Connecticut, U.S. , 141 S. Ct. 956, 208 L. Ed. 2d 494 (2020). ‘‘The respondent’s efforts to rehabilitate, although commendable, speak to [her] own conduct, not the best interests of the child.’’ In re Daniel A., 150 Conn. App. 78, 104, 89 A.3d 1040, cert. denied, 312 Conn. 911, 93 A.3d 593 (2014); see id. (court’s finding that father made efforts to rehabilitate himself did not undermine court’s best interest determination). Further, whatever progress a parent arguably has made toward rehabilitation is insufficient to reverse an otherwise factually supported best interest finding. See In re Malachi E., supra, 188 Conn. App. 445–46 (‘‘[a]lthough the respondent directs our attention to other findings that are more favorable to her position, specifically . . . that the respondent was making prog- ress in her rehabilitation, these facts do not provide us a basis to reverse the court’s determination’’); see also In re Daniel A., supra, 150 Conn. App. 104. Even in cases that consider the rehabilitative status of the par- ents, ‘‘the critical issue is not whether the parent has improved [his or her] ability to manage [his or her] own life, but rather whether [he or she] has gained the ability to care for the particular needs of the child at issue.’’ (Internal quotation marks omitted.) In re Ryder M., supra, 211 Conn. App. 814. A determination with respect to rehabilitation is not solely dependent on a parent’s technical compliance with specific steps but rather on the broader issue of whether the factors that led to the initial commitment have been corrected. See In re Omar I., supra, 197 Conn. App. 575. In addition, ‘‘[a]lthough commendable, any continu- ing efforts made by the respondent to advance [her] rehabilitation do not outweigh the other factors consid- ered by the court with respect to whether termination of the respondent’s parental rights was in [the child’s] best interest.’’ In re Ryder M., supra, 211 Conn. App. 822; see also In re Anaishaly C., 190 Conn. App. 667, 692, 213 A.3d 12 (2019) (court properly determined that termination of respondents’ parental rights was in chil- dren’s best interests when respondents ‘‘successfully complet[ed] some programs’’ but were ‘‘unsuccessful, or noncompliant, with others’’ (internal quotation marks omitted)), cert. denied, 345 Conn. 914, A.3d (2022); In re Malachi E., supra, 188 Conn. App. 445–46 (court’s finding that respondent was making progress in rehabilitating herself did not undermine court’s determination that termination of respondent’s parental rights was in child’s best interest, which was supported by other unchallenged findings). In the present case, the record demonstrates that other factors considered by the court with respect to whether termination of the respondent’s parental rights was in Aubrey’s best interest outweighed the continuing efforts made by the respondent to advance her rehabili- tation. Specifically, there was an abundance of evidence presented relating to Aubrey’s specific needs, which supports the court’s conclusion that the respondent would be unable to provide an environment that would meet those needs. As a result of the trauma Aubrey had experienced, specifically her exposure to domestic violence, witnessing the abuse of her sister, and wit- nessing sexual behavior between adults, Aubrey requires extensive and ongoing therapeutic and clinical services. Aubrey has been diagnosed with unspecified trauma and stressor related disorder and adjustment disorder. Since her removal from the respondent’s care in June, 2019, Aubrey has been placed with several therapeutic foster homes. From December, 2020, through the trial, Aubrey had remained with one foster family. Aubrey’s behavioral issues appeared to have reduced in her new foster home. Baldwin testified that, at the time of trial, Aubrey was the most stable that she had ever been, and there was ‘‘significant potential’’ for regression should she be returned to the respondent’s care. Nota- bly, the record contained evidence that ‘‘resiliency was a strength of Aubrey’s and . . . she would benefit from continued stability in caregivers, routine, and environ- ment to ensure that she felt a strong level of safety.’’ The court also heard testimony that Aubrey referred to her foster parents as ‘‘mommy and daddy’’ and that the foster parents were willing to adopt both Aubrey and Amelia. Of significance is the continuity that Amelia has pro- vided to Aubrey’s life. Aubrey has had her younger sister at her side with each foster placement. Reports by Aubrey’s clinicians and the department case worker noted Aubrey’s protectiveness for her sister. At trial, Baldwin testified that, based on clinical recommenda- tions, ‘‘both Amelia and Aubrey . . . have generational separations with family which has impacted them on their adult life. So, if [the department has] the opportu- nity to keep these children together despite the adverse experience that they have been subjected to . . . the department feels that . . . it remains in their best inter- est.’’ Given the protective order prohibiting the respon- dent from having contact with Amelia, should Aubrey return to the respondent’s care, Aubrey’s contact with Amelia would likely cease or be reduced dramatically. Thus, the record supports the court’s finding that Aubrey’s need for permanency, stability, and continuity of environment outweighed the benefits of maintaining a connection with the respondent. See In re Daniel N., 163 Conn. App. 322, 135 A.3d 1260 (termination of parental rights was in child’s best interest where child had multiple placements, had been hospitalized twice for psychiatric issues, would suffer significantly if moved again, and developed relationship with foster parents), rev’d on other grounds, 323 Conn. 640, 150 A.3d 657 (2016); In re Janazia S., 112 Conn. App. 69, 79–80, 961 A.2d 1036 (2009) (termination of parental rights was in child’s best interest where child had made tremendous psychological and behavioral progress since placement in therapeutic foster home, was bonded to foster parents, referred to foster parents as mom and dad, and had positive relationships with oth- ers in home); In re Deana E., 61 Conn. App. 185, 195, 763 A.2d 37 (2000) (termination of parental rights was in children’s best interests where children suffered from psychological and behavioral problems, lived in secure foster home, attended therapy and counseling sessions, and bonded with foster family, and foster parents were willing to adopt children). The respondent further points to Baldwin’s testimony that visits between the respondent and Aubrey ‘‘go great’’ and that the department had no concerns regard- ing the visits. With respect to the respondent’s contin- ued and meaningful contact with Aubrey, ‘‘[a]s this court has explained, the appellate courts of this state consistently have held that even when there is a finding of a bond between [a] parent and a child, it still may be in the child’s best interest to terminate parental rights.’’ (Internal quotation marks omitted.) In re Ryder M., supra, 211 Conn. App. 821; see also In re Sequoia G., 205 Conn. App. 222, 231, 256 A.3d 195 (‘‘the existence of a bond between a parent and a child, while relevant, is not dispositive of a best interest determination’’ (internal quotation marks omitted)), cert. denied, 338 Conn. 904, 258 A.3d 675 (2021). That a bond may exist between the respondent and Aubrey does not undercut the court’s best interest determination in light of the myriad of other considerations taken into account by the court in reaching its ultimate conclusion. The court found that ‘‘Aubrey [is] entitled to the benefit of ending, without further delay, the period of uncertainty that [she] has lived with as to the unavailability of [her] biological parents as caretakers.’’ This is an important factor that the court properly considered. ‘‘On appeal, our function is to determine whether the trial court’s conclusion was factually supported and legally correct. . . . In doing so, however, [g]reat weight is given to the judgment of the trial court because of [the court’s] opportunity to observe the parties and the evidence. . . . We do not examine the record to determine whether the trier of fact could have reached a conclusion other than the one reached.’’ (Internal quotation marks omitted.) In re Omar I., supra, 197 Conn. App. 584; see also In re Jacob M., supra, 204 Conn. App. 790 (‘‘[w]e will not scrutinize the record to look for reasons supporting a different conclusion than that reached by the trial court’’ (internal quotation marks omitted)). As we have stated previously, the dis- positional phase of a termination of parental rights pro- ceeding centers on the best interest of the child, not the conduct or improvements of the parent. The record here supports the court’s finding that, despite the respondent’s rehabilitation progress and bond with Aubrey, other pertinent factors indicate that the respon- dent would not be able to provide an environment to meet Aubrey’s needs and that Aubrey’s interests would be best served by the termination of the respondent’s parental rights.15 Accordingly, we conclude that the court’s determination that termination of the respon- dent’s parental rights was in Aubrey’s best interest was not clearly erroneous. II The respondent next contends that ‘‘[t]he court’s assessment of Aubrey’s prospects for permanency in [the department’s] care ignores the evidence.’’ Specifi- cally, the respondent argues that the court failed to consider that Aubrey had been in at least five foster placements, some of which were preadoptive, at the time of trial. We disagree. Although the court did not discuss Aubrey’s multiple foster placements, there was an abundance of evidence presented to support the court’s determination that ter- minating the respondent’s parental rights would provide Aubrey with permanency, continuity, and stability in her life and would put an end to the period of uncertainty. In particular, the record contains evidence relating to Aubrey’s emotional, mental, and physical improve- ments while residing in a stable therapeutic foster home environment in addition to the testimony of Baldwin about the department’s concern that Aubrey would regress should she return to the care of the respondent. ‘‘We do not examine the record to determine whether the trier of fact could have reached a conclusion other than the one reached. . . . [Rather] every reasonable presumption is made in favor of the trial court’s ruling.’’ (Internal quotation marks omitted.) In re Omar I., supra, 197 Conn. App. 584. Further, ‘‘the balancing of interests in a case involving termination of parental rights is a delicate task and, when supporting evidence is not lacking, the trial court’s ultimate determination as to a child’s best inter- est is entitled to the utmost deference. . . . Although a judge [charged with determining whether termination of parental rights is in a child’s best interest] is guided by legal principles, the ultimate decision [whether ter- mination is justified] is intensely human. It is the judge in the courtroom who looks the witnesses in the eye, interprets their body language, listens to the inflections in their voices and otherwise assesses the subtleties that are not conveyed in the cold transcript.’’ (Internal quotation marks omitted.) In re Nevaeh W., 317 Conn. 723, 740, 120 A.3d 1177 (2015). Affording the appropriate deference to the court’s findings, our review of the record leads us to conclude that the court’s best interest determination was not clearly erroneous. The combination of the court’s unchallenged and not clearly erroneous factual findings regarding Aubrey’s therapeutic needs, the department’s concern for Aubrey’s potential regression should she return to the respondent’s care, and the need for the child to have stability in her life support the court’s determination. Although the respondent directs our attention to her own therapeutic improvements, these facts do not provide a basis to reverse the court’s best interest determination. Accordingly, we decline the respondent’s invitation to reweigh the evidence and, instead, conclude that the court’s best interest determi- nation was factually supported and legally correct.16 III Finally, the respondent contends that ‘‘[t]he facts of this case are unusual and should leave this court with the definite and firm conviction that a mistake has been made.’’ In particular, the respondent argues that the facts of this case stand out from other terminations involving similar allegations of harm because (1) the trial court’s conclusions about the respondent’s possi- ble future risk to Aubrey were not supported by a clini- cal opinion, (2) it is rare in our case law to terminate the parental rights of a parent who has participated in all referred services and who has been determined to have benefitted from those services, (3) unlike other cases involving parents who allowed their children to be exposed to harm by others, there was no evidence that the respondent returned to a prior abusive relation- ship or entered into a new abusive relationship, and (4) there was a strong bond between Aubrey and the respondent. We are not persuaded. Although we recognize that the trial court did not discuss the admirable progress the respondent has made in treatment, we are not left with a definite and firm conviction that a mistake has been made. As stated previously, due to the trauma she has experienced, Aubrey requires extensive and ongoing therapeutic and clinical services to treat her unspecified trauma and stressor related disorder and her adjustment disorder. In her most recent foster home, Aubrey’s behavioral issues have apparently reduced because of the consis- tent and in-depth therapeutic services she has engaged in with the facilitation of her foster parents. After sev- eral years of minimal progress, there have been no recent incidences of Aubrey engaging in malicious or aggressive behavior toward her foster siblings or Ame- lia. There is evidence in the record indicating that Aubrey has bonded with this foster family, calling her foster parents ‘‘mommy and daddy.’’ The record also demonstrates that the foster parents are willing to adopt both Aubrey and Amelia. These facts strongly support the court’s best interest determination, and we will not second-guess the court’s assessment that Aubrey’s need for permanency, stabil- ity, and continuity of environment outweighs the bene- fits of maintaining a connection with the respondent. As long as the respondent’s parental rights still exist, allowing potential for change, Aubrey will be unable to truly settle in and attach to her foster parents. See In re Daniel N., supra, 163 Conn. App. 336; In re Janazia S., supra, 112 Conn. App. 79–80; In re Deana E., supra, 61 Conn. App. 195. ‘‘[W]e will not scrutinize the record to look for reasons supporting a different conclusion than that reached by the trial court.’’ In re Shane M., supra, 318 Conn. 593. Accordingly, we are not left with a definite and firm conviction that a mistake has been made. The judgment is affirmed. In this opinion the other judges concurred. * In accordance with the spirit and intent of General Statutes § 46b-142 (b) and Practice Book § 79a-12, the names of the parties involved in this appeal are not disclosed. The records and papers of this case shall be open for inspection only to persons having a proper interest therein and upon order of the Appellate Court. Moreover, in accordance with federal law; see 18 U.S.C. § 2265 (d) (3) (2018), as amended by the Violence Against Women Act Reauthorization Act of 2022, Pub. L. No. 117-103, § 106, 136 Stat. 49; we decline to identify any person protected or sought to be protected under a protection order, protective order, or a restraining order that was issued or applied for, or others through whom that party’s identity may be ascertained. ** November 21, 2022, the date that this decision was released as a slip opinion, is the operative date for all substantive and procedural purposes. 1 The court also terminated the parental rights of Aubrey’s father, the respondent Jacob K. Because Jacob K. is not involved in this appeal, our references in this opinion to the respondent are to the respondent mother. 2 General Statutes § 17a-112 (j) (3) (C) provides that a trial court may terminate parental rights if ‘‘the child has been denied, by reason of an act or acts of parental commission or omission including, but not limited to, sexual molestation or exploitation, severe physical abuse or a pattern of abuse, the care, guidance or control necessary for the child’s physical, educational, moral or emotional well-being, except that nonaccidental or inadequately explained serious physical injury to a child shall constitute prima facie evidence of acts of parental commission or omission sufficient for the termination of parental rights . . . .’’ 3 The respondent and Gregory met in 2009 and were involved romantically until Gregory was arrested and incarcerated in 2013. The respondent and Gregory reconnected when Gregory was released in or around 2016. By the time of Amelia’s birth, Gregory was reincarcerated. 4 The respondent entered her plea and was sentenced in the criminal proceedings on January 7, 2020. 5 Those steps included: ‘‘(1) Create and maintain safe, stable, and nurturing environment free from substance abuse, mental health issues, and intimate partner violence. (2) Learn triggers for substance use and develop alternate coping mechanisms through individual and group sessions. (3) Understand impact of substance use and intimate partner violence on present functioning and children. (4) Address trauma history and understand impact on present functioning and parenting skills. (5) Learn and demonstrate age-appropriate parenting, supervision, discipline and developmental expectations. (6) Develop and implement appropriate coping mechanisms to safely address stressors of parenting. (7) Address any identified mental health needs in individual counseling in order to maintain emotional stability and be a stable resource for child.’’ 6 The respondent has not appealed from the judgment terminating her parental rights as to Amelia given the standing criminal protective order prohibiting her from having contact with Amelia until 2099. The court also terminated Gregory’s parental rights as to Amelia, and he has not challenged that judgment on appeal. 7 General Statutes § 17a-112 (k) provides: ‘‘Except in the case where termi- nation of parental rights is based on consent, in determining whether to terminate parental rights under this section, the court shall consider and shall make written findings regarding: (1) The timeliness, nature and extent of services offered, provided and made available to the parent and the child by an agency to facilitate the reunion of the child with the parent; (2) whether the Department of Children and Families has made reasonable efforts to reunite the family pursuant to the federal Adoption and Safe Families Act of 1997, as amended from time to time; (3) the terms of any applicable court order entered into and agreed upon by any individual or agency and the parent, and the extent to which all parties have fulfilled their obligations under such order; (4) the feelings and emotional ties of the child with respect to the child’s parents, any guardian of such child’s person and any person who has exercised physical care, custody or control of the child for at least one year and with whom the child has developed significant emotional ties; (5) the age of the child; (6) the efforts the parent has made to adjust such parent’s circumstances, conduct, or conditions to make it in the best interest of the child to return such child home in the foreseeable future, including, but not limited to, (A) the extent to which the parent has maintained contact with the child as part of an effort to reunite the child with the parent, provided the court may give weight to incidental visitations, communications or contributions, and (B) the mainte- nance of regular contact or communication with the guardian or other custodian of the child; and (7) the extent to which a parent has been prevented from maintaining a meaningful relationship with the child by the unreasonable act or conduct of the other parent of the child, or the unreasonable act of any other person or by the economic circumstances of the parent.’’ 8 The court noted that the department was unable to provide services to reunify the respondent with Amelia due to the standing criminal protective order prohibiting the respondent from having contact with Amelia. 9 The respondent’s attendance at an intensive domestic violence program was neither a specific step nor a mandate from the department. 10 ‘‘ ‘Family with service needs’ means a family that includes a child who is at least seven years of age and is under eighteen years of age who, according to a petition lawfully filed on or before June 30, 2020, (A) has without just cause run away from the parental home or other properly authorized and lawful place of abode, (B) is beyond the control of the child’s parent, parents, guardian or other custodian, (C) has engaged in indecent or immoral conduct, or (D) is thirteen years of age or older and has engaged in sexual intercourse with another person and such other person is thirteen years of age or older and not more than two years older or younger than such child . . . .’’ General Statutes § 46b-120 (3). 11 Consistent with our precedents, we decline to apply the evidentiary sufficiency standard for the following reasons. First, we decline to adopt a standard of review for a best interest determination that our Supreme Court has yet to adopt. Second, despite the respondent phrasing her claim as a sufficiency of the evidence claim, both parties on appeal agree that the clearly erroneous standard of review applies to the present claim. Third, the evidence in the present case supports the court’s determination under either standard because, as articulated by this court in In re Nioshka A. N., ‘‘if the evidence upon which we have relied in finding that the trial court’s best interest determination was not clearly erroneous were considered under the evidentiary sufficiency standard, and, thus, was construed in the light most favorable to upholding the trial court’s best interest determination . . . that evidence, so construed, would be sufficient to prove by clear and convincing evidence that termination of the respondent’s parental rights was in the best interest of the child.’’ (Citation omitted.) In re Nioshka A. N., supra, 161 Conn. App. 637 n.9. 12 Relying on In re Vincent B., 73 Conn. App. 637, 644–45, 809 A.2d 1119 (2002), the respondent argues, as a preliminary matter, that the court improp- erly made ‘‘conclusive assumptions about a parent’s future ability to care for [her] children based only on prior bad conduct and without considering present, sustained good conduct.’’ Notably, however, the court expressly considered the respondent’s present involvement with several treatment programs as well as the testimony of the respondent’s service providers and current case worker in concluding that the termination of the respondent’s parental rights was in the best interest of Aubrey. 13 We note that, although the court stated that ‘‘[the respondent] has done her best to prevent [the department] from getting any further information about Luis,’’ Baldwin testified that she engaged in several virtual meetings with Luis. Further, documentary evidence in the record establishes that Luis completed a mental health evaluation per the department’s request and that his evaluation contained no recommendations for further services. Nevertheless, Baldwin testified that the respondent denied the department access to Luis when Baldwin made efforts to see him in person in April, 2021. 14 ‘‘Dialectical [b]ehavior [t]herapy is an evidence-based psychotherapy to treat borderline personality disorder and is useful in treating patients seeking change in behavioral patterns such as substance abuse and domestic or non-domestic violence against others. It is a process in which the therapist helps the patient find and employ strategies and ultimately synthesize them to accomplish consistently the defined ultimate goal and is used to treat borderline personality disorders and addictive personality disorders. To be successful, it demands honesty both from the patient and the clinician.’’ (Internal quotation marks omitted.) In re Xavier H., 201 Conn. App. 81, 90 n.3, 240 A.3d 1087 (2020). 15 In addition, we are not left with a definite and firm conviction that a mistake has been made. See part III of this opinion. 16 We note that the respondent, in her reply brief, advanced a related argument: ‘‘Had the trial court rendered conclusions reasonably connected to the evidence concerning other relevant factors, this court might reason- ably conclude that the court weighed all the evidence and concluded that Aubrey’s needs were simply too great and that no amount of rehabilitation on [the respondent’s] part could ever put her in a position to parent Aubrey. But that is not the decision that this court must consider on appeal. Rather, the trial court’s conclusions on [the respondent’s] circumstances at the time of trial were wholly unmoored from the evidence presented. No insight can be gained into a trial court’s weighing of different factors when its conclu- sions are not supported by the evidence, and as such, this court must not speculate on how the trial court balanced different factors.’’ (Emphasis omitted.) Because we have determined the court’s findings were not clearly erroneous, the court’s conclusions were reasonably connected to the evi- dence. Accordingly, this argument fails.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488540/	In the United States Court of Federal Claims No. 22-1562C (Filed: November 21, 2022) NOT FOR PUBLICATION ) STRATEGIC ALLIANCE ) SOLUTIONS LLC, ) ) Plaintiff, ) v. ) ) THE UNITED STATES, ) ) Defendant, ) ) and ) ) DEFENSE INTEGRATED SOLUTIONS, LLC, ) ) Defendant- ) Intervenor. ) ) Meghan F. Leemon, PilieroMazza PLLC, Washington, D.C., for Plaintiff. Of counsel were Jonathan T. Williams, Katherine B. Burrows, Peter B. Ford, and Eric A. Valle. Bryan M. Byrd, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for Defendant. With him on the motion were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and William J. Grimaldi, Assistant Director. Matthew T. Schoonover, Schoonover & Moriarty LLC, Olathe, KS, for Defendant- Intervenor. Of counsel were Emily J. Chancey, W. Brad English, Joshua B. Duvall, and Jeffrey M. Lowry, Maynard, Cooper & Gale, P.C., Huntsville, AL. REMAND ORDER SOLOMSON, Judge. On October 20, 2022, Plaintiff, Strategic Alliance Solutions LLC (“SAS”), filed a complaint against Defendant, the United States, pursuant to 28 U.S.C. § 1491(b), challenging the September 22, 2022, decision of the Small Business Administration (“SBA”) Office of Hearings and Appeals (“OHA”). ECF No. 1. OHA had concluded that SAS is not an eligible service-disabled veteran-owned small business concern (“SDVO SBC”) under Solicitation No. HQ0858-21-R-0010 issued by the Missile Defense Agency of the United States Department of Defense. Id. On October 21, 2022, Defendant-Intervenor, Defense Integrated Solutions, LLC (“DIS”), filed an unopposed motion to intervene pursuant to Rule 24(a) of the Rules of the United States Court of Federal Claims (“RCFC”), ECF No. 11, which this Court granted. On October 25, 2022, the Court held a preliminary status conference, see ECF No. 17, to discuss a schedule for further proceedings. During the status conference, the government indicated that it was actively considering a motion to voluntarily remand this case to the SBA and that the government had initiated discussions with the other parties regarding such a motion. Accordingly, on October 26, 2022, the Court ordered the parties to meet-and-confer and to file on or before November 1, 2022, a joint motion to voluntarily remand the case, a joint status report that proposed a schedule for resolving the case on the merits, or other filings if the government sought to file an opposed motion to remand the case. ECF No. 25. On October 31, 2022, the parties filed a joint status report indicating that parties were engaged in ongoing discussions to “possibly . . . resolv[e] this matter through a stipulated judgment.” ECF No. 26 at 1–2. Accordingly, on November 1, 2022, the Court directed the parties to continue their negotiations and to file, on or before November 10, 2022: (1) a joint stipulation for judgment; (2) a joint status report that details the parties’ progress toward a stipulated settlement; or (3) one of the filings specified in this Court’s October 26, 2022, order. ECF No. 27 at 2. On November 10, 2022, SAS and the government, over the objection of DIS, filed a joint stipulation for entry of final judgment. ECF No. 29. Specifically, “[t]o fully resolve the complaint of [SAS],” the government and SAS sought to have this Court: (1) set aside the September 22, 2022, decision of OHA; and (2) “direct[] OHA to issue a new decision . . . that grants SAS’s appeal of the . . . status determination and finds that SAS is an eligible SDVO SBC joint venture under the solicitation” at issue. Id. at 1–2. DIS opposed the other parties’ request in their joint stipulation. ECF No. 30. DIS asserted, among other arguments, that the parties may not request, and the Court may not enter, a joint stipulation “agree[ing] that a lower decision was wrong and effectively reverse that decision without making the required showing under the [Administrative Procedures 2 Act (‘APA’)].” Id. at 2–3. DIS maintained that as a party that intervened as of right on the side of the defendant, DIS may defend OHA’s decision even if the government will not. Id. at 3. The parties requested that this Court convene a status conference to discuss the parties’ respective positions. ECF No. 29 at 1 n.1; ECF No. 30 at 4. In accordance with the parties’ request, this Court held a status conference on November 14, 2022. See ECF No. 31. After considering the parties’ arguments, the Court ordered the parties to meet-and-confer regarding whether to file a joint motion for remand to the SBA pursuant to RCFC 52.2. ECF No. 33. Alternatively, if the parties could not reach an agreement to remand, the Court ordered: (1) SAS and the government to file (jointly or independently) motion(s) for entry of judgment pursuant to their November 10, 2022, joint stipulation, ECF No. 29, and in response to DIS’s opposition to such a judgment, ECF No. 30; and (2) DIS should file a response to the other parties’ motion(s). ECF No. 33 at 2. On November 18, 2022, the government filed a consent motion for a voluntary remand. 1 ECF No. 34. In the consent motion, the government proposes remanding this case to OHA to reconsider the challenged OHA decision. Id. at 1. The Court commends the parties on their work to reach what appears to be a sensible agreement that conserves judicial resources. The Court, thus, adopts the government’s proposed remand instructions in full, see id. at 8, as follows: 1. OHA shall reconsider its September 22, 2022, decision and issue a new decision. 2. OHA’s reconsideration shall be limited to OHA’s conclusion that Section 5.4.6 of SAS’s joint venture and operating agreement (the “SAS JVOA”) runs afoul of 3 C.F.R. § 125.18(b)(2)(ii)(A) and shall leave intact its determination that the SBA Deputy Director for the Office of Government Contracting and Business Development (“DD/GC”) had erred with regard to each of the other conclusions upon which the DD/GC had determined that SAS was not an eligible SDVO SBC joint venture for the solicitation at issue. 3. OHA, in reconsidering its decision, may: (a) Reopen the record for the limited purpose of reconsidering whether Section 5.4.6 of the SAS JVOA is permissible under 13 C.F.R. § 125.18(b)(2)(ii)(A), considering the government’s position (developed in consultation with SBA) that “Section 5.4.6 is permissible under 13 C.F.R. § 125.18(b)(2)(ii)(A) and that SAS is an eligible SDVO SBC joint venture for the solicitation” at 1The government asserts that it filed a consent motion rather than a joint motion “because the other parties are unable to request a voluntary remand.” ECF No. 34 at 1 n.1 (citing Keltner v. United States, 148 Fed. Cl. 552, 557 (2020)). 3 issue, ECF No. 29 at 2, and potential comments by SBA and supplemental briefs by SAS and DIS; (b) Invite the SBA to comment on how 13 C.F.R. § 125.18(b)(2)(ii)(A) should be interpreted and applied to Section 5.4.6 of the SAS JVOA, particularly given that the government (in consultation with SBA) has agreed with SAS that “Section 5.4.6 is permissible under 13 C.F.R. § 125.18(b)(2)(ii)(A) and that SAS is an eligible SDVO SBC joint venture for the solicitation” at issue, ECF No. 29 at 2; and (c) Permit SAS and DIS to file supplemental briefs on that topic, with an opportunity for SAS and DIS to respond to SBA’s comments (if filed) and to each other’s briefs. Accordingly, pursuant to RCFC 52.2, the Court hereby GRANTS the government’s consent motion for a voluntary remand. The Court further STAYS and REMANDS this case to OHA for further proceedings consistent with the remand instructions detailed above. OHA shall render the new decision on or before Friday, January 13, 2023. Following OHA’s new decision, the parties shall meet-and-confer concerning whether further litigation is necessary and shall file a joint status report on or before Friday, January 20, 2023, detailing the parties’ respective positions and, if necessary, proposing dates for further briefing. Notwithstanding RCFC 52.2(b)(2), the Clerk of the Court need not serve this opinion and order; rather, counsel for the United States is directed to provide a copy of this opinion and order to the cognizant contracting officer at the Missile Defense Agency and counsel for the SBA, which shall constitute service pursuant to that rule. IT IS SO ORDERED. s/Matthew H. Solomson Matthew H. Solomson Judge 4	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488541/	State of New York OPINION Court of Appeals This opinion is uncorrected and subject to revision before publication in the New York Reports. No. 86 Worthy Lending LLC, Appellant, v. New Style Contractors, Inc., Respondent. Richard G. Haddad, for appellant. Glenn P. Berger, for respondent. The Secured Finance Network, Inc., amicus curiae. WILSON, J.: We are called upon to determine whether, for purposes of New York’s Uniform Commercial Code § 9-406, an “assignee” includes the holder of a presently exercisable security interest in an assignor’s receivables. We hold that it does. Under UCC 9-406, a security interest is an assignment and the UCC is purposefully structured to permit a debtor -1- -2- No. 86 to grant creditors security interests in a debtor’s receivables so that the secured creditor can direct account debtors to pay it directly. Therefore, we reverse and remit for further proceedings consistent with this opinion. I Inasmuch as this appeal arises from a motion to dismiss the complaint, “[w]e must ‘accept the facts as alleged as true, [and] accord plaintiff[] the benefit of every possible favorable inference’” (Maddicks v Big City Properties, LLC, 34 NY3d 116, 123 [2019]). According to the complaint, defendant New Style Contractors, Inc. (New Style), engaged Checkmate Communications LLC (Checkmate) as a subcontractor. Pursuant to a Promissory Note and Security Agreement dated October 11, 2019 between Checkmate and Worthy Lending LLC (Worthy), Checkmate could borrow up to $3 million (which amount could be increased) from Worthy. As provided by Section 3 (a) of the Agreement, Checkmate granted Worthy a security interest in its assets: “To secure the prompt payment and performance of [all of Checkmate’s obligations to [Worthy], [Checkmate] hereby pledges and grants to [Worthy] a continuing security interest in and lien upon the Collateral, whether now existing or hereafter arising and wherever located.” The “Collateral” as defined in the Agreement, constituted substantially all existing and future assets and properties of Checkmate, including, “all right, title and interest of [Checkmate] in and to its (a) accounts . . . .” “Accounts” included the accounts receivable arising from invoices Checkmate issued to its customers, such as New Style. Under section 4 (k) of the Agreement, Checkmate granted Worthy the right to “notify and instruct account -2- -3- No. 86 debtors” (i.e., Checkmate’s customers, including New Style) “to remit payment of Accounts and other Collateral directly to Lender,” including before a default, and promised that Checkmate would not “interfere with the collection of Collateral in the manner set forth in this section.” Worthy filed a UCC-1 Financing Statement against Checkmate with the Secretary of State of New Jersey, perfecting its secured position regarding Checkmate’s assets. On October 2, 2019, Worthy sent New Style a notice of its security interest and collateral assignment in the New Style accounts and directed New Style that “[a]ll remittances for Accounts shall be made payable only to Worthy.” In boldface type, Worthy’s notice to New Style also stated: Pursuant to Section 9-406 of the Uniform Commercial Code, payments of accounts made by New Style to Checkmate or to anyone other than Worthy Lending will not discharge any of New Style’s obligations with respect to such Accounts, and notwithstanding any such payments, New Style shall remain liable to Worthy Lending for the full amount of such Accounts. Following Checkmate’s default on the note, Worthy accelerated all indebtedness, liabilities and obligations of Checkmate and demanded immediate repayment. Checkmate subsequently filed for bankruptcy, with a balance due to Worthy of over $3 million. Worthy alleges that “New Style may have remitted payment of one or more New Style Accounts to Checkmate contrary to such notices of assignment.” Worthy commenced this action against New Style, alleging that pursuant to UCC 9-607, Worthy is entitled to recover from New Style all amounts New Style owed to -3- -4- No. 86 Checkmate after New Style’s receipt of the notice of assignment. Supreme Court granted New Style’s motion to dismiss the complaint on the grounds that (1) UCC 9-607 “‘does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party’” (UCC 9-607 [e]); (2) the agreement was “a security interest and was not an assignment”; and (3) section 9-607 applies to assignments, not security interests. The Appellate Division affirmed, holding that Worthy “did not have an independent cause of action against [New Style] pursuant to UCC 9-607” because section 9-607 (e) does not authorize a secured creditor, as distinct from an assignee, to recover from a nonparty debtor like New Style even though Worthy had directed New Style to pay Worthy instead of Checkmate (196 AD3d 422, 422-423 [1st Dept 2021]). Both lower courts followed the decision of a Michigan intermediate appellate court (Buckeye Retirement Co., LLC, Ltd. v Meijer, Inc., 2008 WL 4278038, at 2 [Mich App Sept. 18, 2008]) as well as an Appellate Division case (IIG Capital LLC v Archipelago, L.L.C., 36 AD3d 401, 404 [1st Dept 2007]). We granted leave. II The language of the statute, as well as the clear commentary on the relevant sections requires reversal. New York’s UCC 9-607 and 9-406 adhere to the standard UCC language. Section 9-607 (a) (3), entitled “Collection and Enforcement by Secured Party,” provides as follows: -4- -5- No. 86 “If so agreed, and in any event after default, a secured party . . . may enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral.” An account debtor who receives a secured creditor’s notice asserting its right to receive payment directly can pay the secured creditor and receive a complete discharge (UCC 9-406 [a]) or, if in doubt, can seek proof from the secured creditor that it possesses a valid assignment and withhold payment in the interim (UCC 9-406 [c]). Here, Worthy is the “secured party,” with the authority to enforce the rights of its debtor (Checkmate) to collect on the obligations of the account debtor (New Style). The lower courts held that subsection 9-607 (e) bars Worthy from using the mechanism provided for in section 9-607, by providing that “[t]his section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.” However, the plain language of subsection (e) merely states that UCC 9-607 does not itself determine whether an account debtor owes a duty to a secured party. The agreement between Worthy and Checkmate grants Worthy the right to direct Checkmate’s debtors to pay Worthy directly, and bars Checkmate from interfering with any such direction if given. Subsection (e) of 9-607 does not even imply, much less state, that parties cannot contractually assume duties concerning the right of a secured party to enforce the rights of a debtor as against account debtors. Indeed, section 9-607 (a) (3) expressly provides that “in any event after default,” a secured party may obtain collateral -5- -6- No. 86 directly from an account debtor, and the secured party and debtor may agree that the secured party may do so by agreement, without regard to default—which they did here. Consistent with the statute’s text, the official comments of the UCC Permanent Editorial Board (PEB)1 issued in 2020 explain that UCC 9-607 “establishes only the baseline rights of the secured party vis-a-vis the debtor” and permits “the secured party to enforce and collect [from an account debtor] after default or earlier if so agreed” (UCC 9- 607, Comment 6; see also PEB Commentary No. 21 at 4 n 21). New Style contends that UCC 9-406 allows only assignors—not holders of security interests—to rely on the payment-redirection provisions contained in that section. UCC Section 9-406 (a) states: “[A]n account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, authenticated by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.” 1 “The Permanent Editorial Board for the Uniform Commercial Code acts under the authority of the American Law Institute and the Uniform Law Commission (also known as the National Conference of Commissioners on Uniform State Laws). In March 1987, the Permanent Editorial Board resolved to issue from time to time supplementary commentary on the Uniform Commercial Code to be known as PEB Commentary. These PEB Commentaries seek to further the underlying policies of the Uniform Commercial Code by affording guidance in interpreting and resolving issues raised by the Uniform Commercial Code and/or the Official Comments”. -6- -7- No. 86 The definition of “security interest” in the UCC itself does not distinguish between a security interest and an assignment and the definition section contains no separate definition of “assignment,” “assignor” or “assignee” (see UCC Section 1-201 [b] [35]). The commentary makes clear that a security interest is treated as an assignment. As the commentary explains, treating assignments and security interests identically promotes efficient dealings between the parties—they do not have to try to determine whether the interest is an assignment or a security interest by parsing contractual language. New York case law, state and federal, is consistent (see, e.g., Chase Manhattan Bank (N.A.) v State, 40 NY2d 590, 592-93 [1976]; Septembertide Publ., B.V. v Stein & Day, Inc., 884 F2d 675, 682 [2d Cir. 1989]) as is case law in other states (see, e.g., Magnolia Fin. Grp. v. Antos, 310 F Supp 3d 764, 765-67 [ED La 2018]; Garber v. TouchStar Software Corp, 2011 WL 12526062, at 4 [Colo Dist Ct Nov 10, 2011]). The PEB recently amended the official UCC comments to clarify what has long been the case: “[t]he term ‘assignment,’ as used in [UCC article 9], refers to both an outright transfer of ownership and a transfer of an interest to secure an obligation” (Commentary No. 21 at 4).2 2 Even prior to its amendment, Comment 26 to UCC 9-102 stated as follows: “In numerous provisions, this Article refers to the ‘assignment’ or the ‘transfer’ of property interests. These terms and their derivatives are not defined. This Article generally follows common usage by using the terms ‘assignment’ and ‘assign’ to refer to transfers of rights to payment, claims, and liens and other security interests. It generally uses the term ‘transfer’ to refer to other transfers of interests in property. Except when used in connection with a letter-of-credit transaction (see Section 9-107, Comment 4), -7- -8- No. 86 The cases relied on by New Style, in particular IIG Capital LLC v Archipelago, L.L.C. (36 AD3d 401, 404 [1st Dept. 2007]) and Durham Commercial Capital Corp. v Ocwen Loan Serv., LLC (777 Fed Appx 952, 956 [11th Cir 2019]), have been expressly rejected by the PEB. The PEB commentary opined that IIG Capital and other decisions interpreting “the term ‘assignment,’ especially in the context of [s]ection 9-406 (a), as referring only to an outright assignment of ownership” were “incorrect” (Commentary No. 21 at 2)3 explaining that subsection (e) states that section 9-607 “does not determine whether an account debtor . . . owes a duty to a secured party” because: “Sections 9-607 and 9-406 address different rights. Section 9- 607 addresses the rights of a secured party vis à vis the debtor to collect a specified payment right. Section 9-406 addresses a secured party’s rights against the account debtor to collect a specified payment right. If [s]ection 9-406—and Part 4 of Article 9 more generally—did not apply to an assignment constituting a [secured interest], there would be a gap in Article 9: nothing in Article 9 would address the rights, claims, duties, no significance should be placed on the use of one term or the other. Depending on the context, each term may refer to the assignment or transfer of an outright ownership interest or to the assignment or transfer of a limited interest, such as a security interest” (McKinney's Cons Laws of NY, Book 62½, UCC 9-102, Comment 26 [2016 ed] [emphasis added]). 3 The parties dispute whether language in IIG Capital is dicta. It is dicta for two distinct reasons. First, the court in IIG Capital held that the plaintiff was the assignee of the accounts receivable, so the case cannot determine whether a security holder other than an assignee may proceed under section 9-607 (36 AD3d at 402-403). Second, the assignee’s rights in that case were expressly conditioned on an event of default, which had not occurred (id at 404). Thus, the assignee’s inability to invoke section 9-607 did not turn on an interpretation of the UCC at all, but rather on the specific contractual condition of the assignment in that case. In any event, IIG Capital does not bind us. -8- -9- No. 86 and defenses of an account debtor with respect to that type of assignment.” New Style also argues that because Checkmate advised New Style that there was a “dispute” between Checkmate and New Style, Worthy cannot rely on section 9-607 (a) (3), which begins, “If so agreed.” “If so agreed” refers, however, to agreements creating or modifying the security interest (here, the Promissory Note and Security Agreement between Worthy and Checkmate); allowing a claimed dispute to nullify sections 9-607 and 9-406 would render those provisions meaningless by removing the ability to obtain the value of the security whenever the debtor claims a dispute exists. In short, nothing in UCC sections 9-607 or 9-406 prohibits a secured creditor and debtor from agreeing as they did here. Where they have contractually so agreed, once the secured creditor provides the requisite notification to account debtors, an account debtor cannot discharge its obligation by paying the debtor, but must, instead, pay the secured creditor or ask for proof of assignment from the secured creditor (see UCC 9-406 [a], [c]). Finally, both the Appellate Division and Supreme Court expressed concern that New Style may have paid Checkmate and now may be forced to pay double. That is the statutory consequence of failing to pay a secured party who has notified the account debtor to pay the secured party directly. With respect to UCC 9-406’s predecessor statute, we held that “after the account debtor receives notification that the right has been assigned and the assignee is to be paid, and it continues to pay the assignor, the account debtor is liable to the assignee” (General Motors Acceptance Corp. v Clifton Fine Cent. School Dist., 85 NY2d 232, 236 [1995]). If New Style continued to pay Checkmate after receiving direction -9- - 10 - No. 86 from Worthy to pay Worthy instead of Checkmate, the burden of double payment as between Worthy and New Style falls on New Style. Accordingly, the order of the Appellate Division should be reversed, with costs, and defendant’s motion to dismiss the complaint denied. Order reversed, with costs, and defendant's motion to dismiss the complaint denied. Opinion by Judge Wilson. Acting Chief Judge Cannataro and Judges Rivera, Garcia, Singas and Troutman concur. Decided November 22, 2022 - 10 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488561/	Nebraska Court of Appeals Memorandum Opinions NOT Selected for Posting to Court Website (released November 22, 2022) The following memorandum opinions were filed by the Nebraska Court of Appeals and can be viewed using SSCALES: None Available The above-listed memorandum opinions can be viewed online through the appellate court case search available by subscription through Nebraska.gov: http://www.nebraska.gov/subscriber/. Current subscribers to Nebraska.gov can search appellate court cases here: https://www.nebraska.gov/courts/sccales/.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488572/	TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN JUDGMENT RENDERED NOVEMBER 22, 2022 NO. 03-21-00256-CV Texas Commission on Environmental Quality, Appellant v. Sierra Club and Ken Paxton, Attorney General of Texas, Appellees APPEAL FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY BEFORE CHIEF JUSTICE BYRNE, JUSTICES KELY AND SMITH AFFIRMED -- OPINION BY JUSTICE KELLY This is an appeal from the order signed by the trial court on May 5, 2021 denying the Texas Commission on Environmental Quality’s motion for summary judgment and granting the Sierra’s Club’s motion for summary judgment. Having reviewed the record and the parties’ arguments, the Court holds that there was no reversible error in the order. Therefore, the Court affirms the trial court’s order. The Texas Commission on Environmental Quality shall pay all costs relating to this appeal, both in this Court and in the court below.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488564/	IN THE NEBRASKA COURT OF APPEALS MEMORANDUM OPINION AND JUDGMENT ON APPEAL (Memorandum Web Opinion) IN RE INTEREST OF JESUS V. & JOSE L. NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E). IN RE INTEREST OF JESUS V. AND JOSE L., CHILDREN UNDER 18 YEARS OF AGE. STATE OF NEBRASKA, APPELLEE, V. EVELIN L., APPELLANT, AND SALVADOR V., APPELLEE. Filed November 22, 2022. No. A-22-351. Appeal from the Juvenile Court of Lancaster County: REGGIE L. RYDER, Judge. Affirmed. David P. Thompson, of Thompson Law, P.C., L.L.O., for appellant. Patrick F. Condon, Lancaster County Attorney, and Haley N. Messerschmidt, for appellee. PIRTLE, Chief Judge, and ARTERBURN and WELCH, Judges. ARTERBURN, Judge. INTRODUCTION Evelin L. appeals the order of the separate juvenile court of Lancaster County which terminated her parental rights to her two children, Jesus V. and Jose L. and overruled Evelin’s motion for a change in visitation. Upon our de novo review of the record, we find sufficient statutory grounds for termination and that termination is in the best interests of the children. We affirm the juvenile court’s order. BACKGROUND Evelin is the biological mother of Jesus, born in 2017, and Jose, born in 2019. Between February 24 and April 11, 2022, hearings were held on the State’s motion to terminate the parental rights of Evelin and Salvador V., the children’s biological father. The juvenile court terminated the parental rights of both parents. Salvador has not appealed from the juvenile court’s order. As -1- a result, for the purposes of this appeal, we concern ourselves only with the issues relevant to the termination of Evelin’s parental rights. The Nebraska Department of Health and Human Services (DHHS) became involved with Evelin shortly after the birth of her youngest son, Jose, in 2019. Jose was born premature and was diagnosed with Down syndrome. He also struggled to breathe on his own. Jose’s doctors reported that the family had missed several appointments, that Jose was admitted to the hospital, and that there was concern regarding Evelin’s mental health. Upon an investigation by DHHS, it was learned that Evelin had been hearing voices and acting erratically. Evelin was not engaging in the care of Jose and denied he had health problems. DHHS learned that Jesus, who was 2 years old at the time, also resided with Evelin in the home. An ex parte order for emergency temporary custody was entered November 4, 2019, removing Jesus and Jose from Evelin’s home and placing them in foster care. On November 5, 2019, the State filed a petition alleging that Jesus and Jose were juveniles within the meaning of Neb. Rev. Stat. § 43-247(3)(a) (Reissue 2016). The petition alleged that the juveniles were placed at risk of harm because Evelin had mental health issues that she was not addressing which resulted in her being unable or unwilling to provide adequate care and supervision for Jesus and Jose. Evidence was presented at a formal adjudication hearing held on February 10, 2020, at which time the juvenile court found the allegations to be true. An order of disposition was entered on March 12 which continued the children in foster care, adopted the case plan submitted by DHHS and found that the permanency goal order was reunification of the family. On December 15, 2021, the State filed a motion to terminate Evelin’s parental rights alleging that (A) Evelin had continuously neglected or refused to provide necessary parental care and protection to the children; (B) that reasonable efforts to reunify the family since the § 43-247(3)(a) determination failed to correct the conditions leading to that determination; and (C) that the children had been in an out-of-home placement for at least 15 of the most recent 22 months. A hearing was held on the State’s motion over the course of 5 days on February 24, March 1, March 2, April 8, and April 11, 2022. At that hearing, the State called a DHHS caseworker who had worked with Evelin, the caseworker’s supervisor, and a mental health therapist that had provided child-parent therapy for Evelin and the children. Evelin testified personally. She also called her most recent family support worker and a psychologist who had provided her individual therapy. The plan of rehabilitation adopted by the court included that Evelin (1) participate in medication management services; (2) cooperate with a parenting and psychological assessment, as recommended by the initial diagnostic interview; (3) maintain a safe and stable home; (4) maintain a legal means of income; (5) cooperate with family support services; and (6) participate in supervised visitation. DHHS was charged with assisting Evelin in obtaining necessary services in order to comply with the rehabilitative plan. While Evelin can speak and understand some English, her primary language is Spanish. Therefore, it was necessary that the services provided to her be offered in Spanish. Many of the individuals that worked with Evelin were bilingual but at times interpreters were necessary to facilitate communication. Evelin’s participation with services varied from full engagement to complete withdrawal during the lifespan of the case. The beginning stages moved slowly due in part to the COVID-19 pandemic. Because of Jose’s fragile medical condition, -2- in person visitation was suspended during the early stages of the plan. However, as time passed and the pandemic abated, Evelin demonstrated progress toward her goals. This progress was followed by a steep decline in May 2021 and then a complete withdrawal from services and visitation for a period of several months. However, in the months leading up to the termination of parental rights hearing, Evelin had re-engaged with services and therapy. After her parenting and psychological assessment in May 2020, Evelin was ordered to participate in child-parent psychotherapy with the children. This therapy was provided by Holly Burns, a bilingual licensed independent mental health practitioner. Burns first became involved with the family in August or September 2020 but could not provide in-person therapy prior to February 2021 due to concerns about Jose’s compromised immune system and his vulnerability to COVID-19. Burns testified that ideally in-person therapy would begin within 6 months of the family trauma, but that the delay was not harmful. Child-parent therapy did take place virtually prior to February 2021. Once in-person sessions began, they occurred during Evelin’s visitation time. Because of the delays caused by the COVID-19 pandemic, in February 2021, DHHS authored a report asking the court to find that Evelin had not had a reasonable opportunity to avail herself of the necessary services. The court agreed and granted an exception. This allowed Evelin more time to fully engage with the services available from DHHS. Once it was deemed safe to have in-person visitations, Evelin showed progress, moving from supervised to monitored visitation with some overnight visits allowed. Burns testified that during the child-parent psychotherapy sessions Evelin would have good days and bad days depending on the amount of sleep she had the night before. On bad days, Evelin would not participate or engage with the children. On good days, Evelin fully participated. In May 2021, Evelin’s progress steeply declined. Burns testified to an incident that occurred during a child-parent psychotherapy session on May 27, 2021. On that day, Burns arrived at Evelin’s home for their usual session. She knocked on the door for a significant period of time before Jesus answered. She described Jesus as being scared. He took Burns’ hand and led her into the home where he showed her a hole in the kitchen wall which according to Jesus, was caused by Evelin kicking it. Burns described Jesus as being terrified while he told her about the incident and Evelin’s anger. Burns then came into contact with Evelin who appeared agitated and was exhibiting delusional thinking. Burns contacted DHHS to have the children removed safely. The police were also notified. This was not the first time that the safety of the children was questioned during Evelin’s visits. During another visit, a machete was found in one of the boys’ closets. Additionally, an unknown and unauthorized gentleman was at the home during another visit. Burns also testified that Evelin at times became aggressive during other sessions. Stephanie Vensky, who supervised the caseworkers providing services to Evelin, also testified to multiple instances of Evelin acting aggressively toward providers. In response to these safety concerns, visits between Evelin and the children were moved outside of the home to a visitation center. By June 2021, Evelin refused to participate in the visits, and they were ultimately suspended due to Evelin’s failure to attend. A psychological evaluation of Evelin was completed in May 2020 by Dr. Alexandra Munet. Diagnoses included an unspecified neurocognitive disorder, brief psychotic disorder-in remission, and adjustment disorder with mixed anxiety and depressed mood. Munet, who is bilingual, -3- provided individual therapy which enabled Evelin to learn how to cope with stressors and maintain stability. According to Munet, Evelin made great improvements during their time together. However, in April 2021, sessions were suspended while Munet was on maternity leave. Using the techniques they worked on in their sessions, Munet believed Evelin could cope on her own while she was on leave. However, she provided Evelin with information that allowed Evelin to make an appointment with another therapist with an interpreter if needed. Evelin did not return to individual therapy when her therapist returned from maternity leave. In fact, she did not return to individual therapy until February 2022. At that time, she was diagnosed with schizophrenia and was prescribed medication in addition to therapy. Around the same time, it was discovered that Evelin was struggling in other areas of her life. In March 2021, Evelin received an eviction notice for failure to pay rent and had her power shut off due to failure to pay her bills. DHHS began to have concerns regarding Evelin’s well-being. By June 2021, once visitations with the children had been suspended, Evelin was not utilizing any of DHHS’ resources. Jesus and Jose were placed with the same foster family throughout most of the duration of the case. However, when it became apparent that reunification with Evelin may not be possible, DHHS began searching for a placement which could be permanent. It was discovered that Evelin’s oldest daughter, Mayra, and her husband lived in the area. DHHS contacted Mayra regarding the care of Jesus and Jose as a potential foster placement. After visitations with Evelin were suspended, Burns initiated child-parent psychotherapy with Mayra, her husband, Rodolfo, and the children. The children were then placed with Mayra and her family in August 2021. Since this placement and therapy, Jose has been exceeding developmental goals. He has been able to walk on his own, eat food on his own, and use sign language to communicate with his family. Similarly, Burns testified that Jesus has shown improved behaviors and was “tremendously intelligent.” Burns testified that the most significant increases for the children occurred when working with Mayra and Rodolfo. Burns testified that during the pendency of the case, Jesus had struggled with caregiver confusion—not understanding who his primary caregiver is—but since being placed with Mayra this confusion has greatly subsided as he has bonded with Mayra and the other children in the home. Burns opined that visitation with Evelin should not resume if termination of her parental rights was being sought. Following her eviction, Evelin was homeless for a period of time before moving into a homeless shelter. In October 2021, Evelin was assigned a new family support worker, Lisa Maria Guevara. With the assistance of Guevara, Evelin re-engaged with services. Evelin received a more specific mental health diagnosis that required medication and began a medication management program. She reconnected with Munet in February 2022. Evelin also found an apartment and was provided 6 months of rent payments from a community center. She moved out of the homeless shelter and into the apartment in February 2022. Evelin also reported having found a job preparing food at a local grocery store. This employment was verbally confirmed by the employer to a DHHS case worker, but no documentation was provided. Vensky testified that the employer reported that Evelin was paid in cash. Guevara assisted Evelin in filling out forms, making phone calls, and transporting Evelin to appointments. Due to the progress made since October 2021, Evelin filed a motion to resume visitation on December 9. Hearings on the motion were held over the course of 4 days ending on February 16, 2022. Evelin, her DHHS caseworker, and Guevara were called to -4- testify. The DHHS caseworker testified that if Evelin’s parental rights were going to be terminated, then resuming visitation would not be in the best interests of the children. The court took the motion under advisement and ultimately overruled the motion. On April 20, 2022, the juvenile court issued a written order terminating Evelin’s parental rights for Jesus and Jose. The juvenile court described Evelin’s progress as being like a roller coaster with a lot of ups and downs. The court credited much of Evelin’s most recent progress to the family support worker doing the “heavy lifting” and noted that at this juncture it was uncertain whether Evelin could maintain her progress without the support she has received. The court also noted that even considering the progress made, Evelin had a long way to go before the court could seriously consider returning the children to her care. Additionally, the court cited to the stability Jesus and Jose had found in their current placement with Mayra. The juvenile court found that the State had not proven by clear and convincing evidence that Evelin neglected and refused to provide the juveniles with proper parental care and protection. However, the juvenile court went on to find clear and convincing evidence that Jesus and Jose were determined to be juveniles as described in § 43-247(3)(a), and that reasonable efforts to preserve and reunify the family, as required under Neb. Rev. Stat. § 43-283.01 (Cum. Supp. 2020), under the direction of the court, have failed to correct the conditions leading to the determination; and that said juveniles had been in an out-of-home placement for 15 or more of the most recent 22 months. Finally, the court concluded that termination of Evelin’s parental rights was in the best interests of Jesus and Jose. Evelin appeals. ASSIGNMENTS OF ERROR Evelin assigns, restated, that the juvenile court erred in (1) finding that statutory grounds existed to warrant the termination of her parental rights, (2) finding that termination of her parental rights was in the children’s best interests, and (3) overruling her motion for change in visitation. STANDARD OF REVIEW An appellate court reviews juvenile cases de novo on the record and reaches its conclusions independently of the findings made by the juvenile court below. In re Interest of Mateo L. et al., 309 Neb. 565, 961 N.W.2d 516 (2021). When the evidence is in conflict, however, an appellate court may give weight to the fact that the lower court observed the witnesses and accepted one version of the facts over the other. In re Interest of Ryder J., 283 Neb. 318, 809 N.W.2d 255 (2012). ANALYSIS Neb. Rev. Stat. § 43-292 (Reissue 2016) lists the grounds for terminating parental rights. In re Interest of Mateo L. et al., supra. It is the State’s burden to show by clear and convincing evidence that one of the statutory bases enumerated in § 43-292 exists and that termination is in the children’s best interests. In re Interest of Mateo L. et al., supra. Statutory Grounds for Termination. The State sought to terminate Evelin’s parental rights under § 43-292(2), (6) and (7). The juvenile court found by clear and convincing evidence that grounds existed under § 43-292(6) and (7). Any one of the bases for termination codified in § 43-292 can serve as the basis for termination -5- when coupled with evidence that termination is in the best interests of the child. In re Interest Leyton C. & Landyn C., 307 Neb. 529, 949 N.W.2d 773 (2020). Section 43-292(7) provides for termination when “[t]he juvenile has been in an out-of-home placement for fifteen or more months of the most recent twenty-two months.” That period of time was set by the Legislature as a guideline for what would be a reasonable time for parents to rehabilitate themselves to a minimum degree of fitness. In re Interest of Mateo L. et al., supra. This section operates mechanically and, unlike the other subsections of the statute, does not require the State to adduce evidence of any specific fault on the part of the parent. Id. In other words, if the 15-out-of-22 formula is met, § 43-292(7) is met. In re Interest of Mateo L. et al., supra. Evelin acknowledges in her brief that Jesus and Jose have been placed out of the parental home for more than 15 of the most recent 22 months. In fact, the children were out of Evelin’s home from November 2019, when they were initially removed and placed in foster care, through the juvenile court’s termination order in April 2022, or approximately 29 months. This satisfies § 43-292(7). The State proved by clear and convincing evidence that Jesus and Jose had been in out-of-home placement for 15 out of the most recent 22 months satisfying § 43-292(7). Because any one of the bases for termination of parental rights codified by § 43-292 can serve as the basis for the termination of parental rights, we need not consider any other statutory bases for termination. See In re Interest Leyton C. & Landyn C., supra. Best Interests of Children. Under § 43-292, once the State shows that statutory grounds for termination of parental rights exist, the State must then show that termination is in the best interests of the child. In re Interest of Ryder J., supra. There is a rebuttable presumption that the best interests of a child are served by having a relationship with his or her parent, which is overcome when the State has proven that the parent is unfit. In re Interest of Noah C., 306 Neb. 359, 945 N.W.2d 143 (2020). Parental unfitness has been defined as “a personal deficiency or incapacity which has prevented, or will probably prevent, performance of a reasonable parental obligation in child rearing and which caused, or probably will result in, detriment to a child’s well-being.” Id. at 370, 945 N.W.2d at 151. In situations where termination of parental rights is based on § 43-292(7), the Nebraska Supreme Court has held that appellate courts must be particularly diligent in their de novo review of whether termination of parental rights is in fact in the child’s best interests. In re Interest of Aaron D., 269 Neb. 249, 691 N.W.2d 164 (2005). Because § 43-292(7) does not require the State to adduce evidence of any specific fault on the part of a parent, evidence to prove the statutory grounds for termination under the other sections of § 43-292 will be highly relevant to the best interests of the juvenile, as it would show abandonment, neglect, unfitness, or abuse. In re Interest of Aaron D., supra. Thus, it is in the context of analyzing the best interests of the juvenile that courts must respect a parent’s commanding interest in the accuracy and justice of the decision to terminate parental rights. Id. The best interests of the child require termination of parental rights when a parent is unable or unwilling to rehabilitate himself or herself within a reasonable period of time. See In re Interest -6- Leyton C. & Landyn C., 307 Neb. 529, 949 N.W.2d 773 (2020). Last minute attempts by a parent to comply with the rehabilitative plan do not prevent the termination of parental rights. Id. That is because permanency is in a juvenile’s best interests because children cannot, and should not, be suspended in foster care or be made to await uncertain parental maturity. In re Interest of Jahon S., 291 Neb. 97, 864 N.W.2d 228 (2015). Evelin argues that termination of her parental rights is not in the children’s best interests because she has made progress toward achieving reunification with her children, but such progress has been impeded by poor case management by DHHS. According to Evelin, progress was hindered by the delayed start of child-parent psychotherapy and relegation of visitation to virtual only due to the COVID-19 pandemic. Evelin also asserts that there were communication difficulties due to some services not being offered in Spanish. In spite of her struggles with DHHS, Evelin points to the amount of progress she has made since October 2021. Contrary to Evelin’s assertions on appeal, the State argues that it was Evelin whose participation in services was inconsistent. The State attributes Evelin’s most recent progress to the efforts of Evelin’s family support worker. Finally, the State argues that termination is in the children’s best interests because of the great progress Jesus and Jose have made in their current placement with their older sister, Mayra. Upon our de novo review of the record, we find that termination of Evelin’s parental rights is in the best interests of the children. First, we do not agree that Evelin has been hindered by the inaction of DHHS. There were delays in the delivery of services, primarily due to the pandemic, but those delays were rectified by the court’s granting of an exception (requested by DHHS) in February 2021. That exception provided Evelin additional time to engage in services. DHHS assisted Evelin with participating in many services, including, an initial diagnostic interview, parenting and psychological assessments, individual therapy, child-parent psychotherapy, medication management, team meetings, visitation, and family support. Further, DHHS made diligent efforts to communicate with Evelin in Spanish. Many of Evelin’s family support workers, caseworkers, and therapists were bilingual. Interpreters were utilized when needed. The primary areas where delays occurred involved child-parent psychotherapy and in-person visitation. These services were initially delayed due to health concerns for Jose amid the COVID-19 pandemic. Jose’s immune system was compromised, therefore, medical professionals treating him recommended that he not be exposed to people in the community because of the high risk of catching and being seriously afflicted with COVID-19. In response, DHHS provided virtual visitations for Evelin and the children. When it was deemed to be safe for Jose, the visits were transitioned to in person. Burns testified at the termination hearing that child-parent psychotherapy needed to occur in person and ideally would occur within 6 months of the initial trauma experienced by the family. However, she also testified that the delay would not prevent the success of the therapy. Once it was safe for Jose to participate, child-parent psychotherapy with Burns was implemented. Based upon our review of the record, we do not agree with Evelin’s assertion that DHHS impeded her ability to make progress toward reunification in any way. Rather, we find that Evelin’s inconsistent efforts were at the root of her failure to progress. The court ordered rehabilitation plan for Evelin required her to (1) participate in medication management services; (2) cooperate with a parenting and psychological assessment, as recommended by the initial diagnostic interview; (3) maintain a safe and stable home; (4) maintain -7- a legal means of income; (5) cooperate with family support services; and (6) participate in supervised visitation. The juvenile court described Evelin’s participation and progress with the case as a “roller coaster with lots of ups and downs.” We find this to be an accurate metaphor. Early on, Evelin struggled, but with the help of individual and child-parent psychotherapy sessions she was able to make some progress in early 2021. As a result, her visitation progressed from supervised to monitored. Unfortunately, Evelin was unable to maintain her progress. In May, her mental health and parenting ability had seriously deteriorated. Jesus was described as being “terrified” when contacted by Burns at Evelin’s home. By June 2021, she was not engaging with the plan at all. Her mental health decompensated, she refused visitation, and she lost her housing. In the last few months prior to the termination hearing, Evelin, with significant assistance of her family support worker, re-engaged with the rehabilitative plan. While this did lead to a stabilization of housing, employment, and her mental health, as of the time of the hearing, Evelin still had not demonstrated that she could provide long-term stability for the children without significant intervention and assistance from various community resources. Moreover, she had not demonstrated the ability to access those resources of her own accord. Evelin asks that we focus on the last few months immediately preceding the completion of the termination hearing. However, we must consider the entirety of her progress and behavior over the more than 2-year period preceding the court’s order. While that history may show that she was climbing a hill during those final months, her overall history shows many ups and downs. She engaged, then retreated from mental health treatment before re-engaging. She was compliant and cooperative at times with therapy and family support, but also had episodes wherein she was belligerent and threatening toward caseworkers, therapists, and her children. Some of these incidents required calls to the police. She struggled to maintain income and housing. As was testified to by Burns, Evelin had good days and bad days. In the larger scope, Evelin had good periods spanning several months and bad periods where she totally disconnected for similar periods. The court must also consider Evelin’s ability to parent a special-needs child. According to Vensky, Evelin consistently questioned whether Jose actually had special needs. This is particularly concerning given that her lack of providing appropriate care for those very needs resulted in the initial order to remove the children from her home. We note that, with a sense of permanency and stability, both children have shown dramatic and even unexpected progress. According to Burns, reintroducing Evelin into the children’s lives would cause confusion and attachment difficulties to the children unless it is clear that Evelin can provide them a long-term safe and stable home and that she can maintain her mental health. We note that Burns testified that Evelin had sought to disrupt the ongoing child-parent psychotherapy between Mayra and the children to the extent that police had to be called. Jesus and Jose need stability and permanency. Even with her most recent progress, Evelin has not gained the ability to provide that permanency for them. Like the juvenile court, we are concerned whether once the significant support Evelin has received comes to an end, she will be able to maintain a safe and stable home. Moreover, Evelin has not demonstrated that she can successfully parent her children for any extended period of time. Jesus and Jose should not be made to await uncertain parental maturity. See In re Interest of Jahon S., 291 Neb. 97, 864 N.W.2d 228 (2015). Termination of Evelin’s parental rights is in the children’s best interests. -8- Motion for Change of Visitation. As a final assignment of error, Evelin claims the court erred in overruling her motion to change visitation. Since June 2021, visitations between Evelin and the boys have been suspended. In December 2021, Evelin moved to reinstate visitation, which was overruled in light of the pending motion to terminate Evelin’s parental rights. Because we have found that the court did not err in terminating Evelin’s parental rights, we need not consider this assignment of error. CONCLUSION For the reasons stated above, we affirm the order of the juvenile court terminating Evelin’s parental rights to Jose and Jesus. AFFIRMED. -9-	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488575/	TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-21-00227-CV Roger Borgelt, Mark Pulliam, Jay Wiley, and The State of Texas, Appellants v. Austin Firefighters Association, IAFF Local 975; City of Austin; and Spencer Cronk, in his Official Capacity as the City Manager of the City of Austin, Appellees 1 FROM THE 419TH DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-16-004307, THE HONORABLE JESSICA MANGRUM, JUDGE PRESIDING MEMORANDUM OPINION This appeal arises from a constitutional challenge to a provision of the 2017-2022 Collective Bargaining Agreement (Agreement) between the City of Austin and the Austin Firefighters Association, Local 975 (Association). The challenged provision provides a shared bank of paid leave (“Association Leave”) for City firefighters to use for Association activities, subject to contractual requirements and restrictions on its use. Taxpayers Mark Pulliam and Jay Wiley initiated the challenge to this contractual provision on the ground that it violates Article III, Sections 50, 51, and 52(a), and Article XVI, Section 6(a) of the Texas Constitution (collectively, the “Gift Clauses”), asserting that it is an unlawful transfer of public funds to a private entity. The State of Texas intervened in the lawsuit in support of the taxpayers’ challenge. 1 The Court has substituted the City of Austin’s current City Manager, Spencer Cronk, for his predecessor, Marc A. Ott. See Tex. R. App. P. 7.2(a). The Association moved to dismiss Pulliam and Wiley’s claims against it pursuant to the Texas Citizens Participation Act (TCPA), and the trial court granted the motion. See generally Tex. Civ. Prac. & Rem. Code §§ 27.001-.011; see also In re Lipsky, 460 S.W.3d 579, 589 (Tex. 2015) (orig. proceeding) (“The TCPA’s purpose is to identify and summarily dispose of lawsuits designed only to chill First Amendment rights, not to dismiss meritorious lawsuits.”). Taxpayer Roger Borgelt later joined the lawsuit, and Pulliam and Wiley nonsuited their remaining claims against the City and its city manager, acting in his official capacity (collectively, the “City”). After a partial summary judgment and a subsequent bench trial, the trial court entered a final judgment denying Borgelt’s and the State’s claims against the City. Pulliam and Wiley appeal from the trial court’s order granting the Association’s TCPA motion to dismiss their claims against it, including the trial court’s award of sanctions, while Borgelt and the State appeal from the final judgment. For the reasons that follow, we will affirm the trial court’s final judgment. BACKGROUND The procedural background of this case is complex. We briefly summarize the trial-court proceedings that are relevant to this appeal. In September 2016, Pulliam and Wiley filed suit against the Association and the City, seeking injunctive relief and a declaratory judgment that Article 10 of the collective-bargaining agreement in place at that time between the Association and the City is unconstitutional. Pulliam and Wiley asserted that Article 10, which establishes a bank of shared leave that may be used for Association activities, violates the Texas Constitution’s “Gift Clauses.” See Tex. Const. art. III, §§ 50, 51, 52(a); id. art. XVI, § 6(a). In October 2016, the State of Texas filed a plea in intervention, asserting the same claims as Pulliam and Wiley. In 2 November 2016, the Association filed a TCPA motion to dismiss. After a hearing in January 2017, the trial court dismissed Pulliam and Wiley’s claims against the Association. In November 2017, after some intervening appellate proceedings that are not relevant to the claims at issue in this appeal, Pulliam and Wiley repleaded their claims against the City, based on the 2017-2022 Agreement. 2 The amended petition and application for injunctive relief continued to name the Association as a defendant. Pulliam and Wiley acknowledged in the amended petition that the Association had been dismissed on its TCPA motion but stated that the Association remained listed in the amended petition “for the sole purpose of preserving Plaintiffs’ appeal under the TCPA once a final, appealable Order is entered by the Court.” The State filed an amended plea in intervention based on the new 2017-2022 Agreement against only the City and nonsuited all its claims against the Association. In July 2018, the Association filed a plea in intervention, asserting that it should be allowed to defend itself as a named defendant from the same claims based on the same facts and seeking the same relief in the same proceeding that the trial court had previously dismissed. In August 2018, it filed its motion for an award of costs, attorneys’ fees, other expenses, and sanctions, as allowed by the TCPA. On the same day, the City and the Association filed a joint motion for summary judgment. A few months later in December 2 The other appeals that have been filed and resolved related to the underlying trial-court proceeding include the following: Pulliam v. City of Austin, No. 03-17-00131-CV, 2017 WL 1404745 (Tex. App.—Austin Apr. 14, 2017, order) (per curiam) (dismissing Pulliam and Wiley’s interlocutory appeal from trial court’s order granting TCPA motion to dismiss for want of jurisdiction); State v. City of Austin, No. 03-17-00131-CV, 2017 WL 4582603 (Tex. App.—Austin Oct. 11, 2017, no pet.) (mem. op.) (concluding that trial court did not rule on Association’s TCPA motion to dismiss with respect to State’s claims and that trial court’s February 7, 2017 order granting Association’s TCPA motion to dismiss did not operate as implicit denial of State’s plea to jurisdiction); City of Austin v. Pulliam, No. 03-18-00306-CV, 2018 WL 3321197, at 1 (Tex. App.—Austin July 6, 2018, no pet.) (mem. op.) (granting City’s unopposed motion to dismiss its interlocutory appeal from trial court’s order denying its amended plea to jurisdiction). 3 2018, Pulliam and Wiley and the State filed a joint motion for summary judgment, and the City and the Association filed a joint cross-motion for summary judgment and opposition to Pulliam and Wiley and the State’s motion.3 In July 2019, after the joint motions for summary judgment had been fully briefed and heard, the trial court granted in part the City and the Association’s joint cross-motion for summary judgment “as to any claims related to the collective bargaining agreement itself and the terms therein, that are challenged in the Amended Original Petition and Application for Injunctive Relief and the First Amended Plea in Intervention of Texas.” The trial court denied in part the City and the Association’s joint cross-motion for summary judgment “with regard to the implementation of such contract by the City of Austin.” The trial court denied Pulliam and Wiley and the State’s joint motion for summary judgment. On the same day it signed the summary-judgment orders, the trial court also signed orders granting Pulliam and Wiley’s motion to strike the Association’s amended plea in intervention, while granting the Association’s request against Pulliam and Wiley for TCPA attorneys’ fees in the amount of $115,250 and sanctions in the amount of $75,000. In November 2019, Pulliam nonsuited his claims against the City. In October 2020, Wiley and newly added plaintiff Borgelt filed a second amended petition and application for injunctive relief against the City. In November 2020, Wiley nonsuited his claims against the City. On March 8-9, 2021, the trial court conducted a bench trial on the remaining claim by Borgelt and the State concerning the City’s implementation of the Agreement. On March 24, 2021, the trial court issued a final judgment in favor of the City and Association on all of Borgelt’s 3 The City and the Association’s joint cross-motion for summary judgment raised similar legal arguments as their initial summary-judgment motion but contained additional facts and also incorporated additional evidence, as well as their opposition to Pulliam and Wiley and the State’s joint motion. 4 and the State’s claims. The trial court made findings of fact and conclusions of law, which it subsequently amended. This appeal followed. THE CITY AND THE ASSOCIATION’S COLLECTIVE-BARGAINING AGREEMENT The Texas Legislature has established: The policy of this state is that fire fighters and police officers, like employees in the private sector, should have the right to organize for collective bargaining, as collective bargaining is a fair and practical method for determining compensation and other conditions of employment. Denying fire fighters and police officers the right to organize and bargain collectively would lead to strife and unrest, consequently injuring the health, safety, and welfare of the public. Tex. Loc. Gov’t Code § 174.002 (b) (emphasis added). The Agreement notes in its Section 2, Purpose of Agreement, that “the citizens of the City of Austin have by referendum election chosen the Collective Bargaining Process as a fair and orderly way of conducting its relations with Austin Fire Fighters . . . .” The parties stipulated, and the Agreement provides, that the Association is the sole and exclusive bargaining representative for all Fire Fighters (as that term is defined in the Agreement) in the Austin Fire Department (AFD). The Agreement further provides: the Association has pledged to support the service and mission of the Austin Fire Department, to constructively support the goals and objectives of the Austin Fire Department, and to abide by the statutorily imposed no strike or work slowdown obligations placed upon it; . . . it is the intent and purpose of this Agreement to achieve and maintain harmonious relations between the parties, and to establish benefits, rates of pay, hours of work, and other terms and conditions of employment for all members of the bargaining unit and to provide for the equitable and orderly adjustment of grievances that may arise during the term of this Agreement . . . . 5 The provision challenged by the appellants is Article 10, Association Business Leave (“Association Leave Provision”). As will be discussed in more detail below, the Association Leave Provision establishes a pool of 5,600 hours of paid leave for the Association’s President and other Authorized Association Representatives to use to conduct Association business under the conditions specified in Article 10. ANALYSIS Appellants present two issues on appeal. First, Borgelt and the State assert that the trial court erred by determining that they were not entitled to relief on their claims against the City because the Gift Clauses prohibit the Association Leave Provision. Second, appellees Pulliam and Wiley (who nonsuited their remaining claims against the City) assert that the trial court erred by granting the Association’s TCPA motion to dismiss against them and by awarding sanctions under the TCPA. We address each of these issues in turn. I. The Association Leave Provision Does Not Violate the Gift Clauses In their first issue, Borgelt and the State assert that the trial court erred by granting judgment in the City’s favor, based on their contention that the Gift Clauses prohibit the City from paying City employees to work for the Association “when the City does not control the activities of those employees, when those employees are not obligated to provide services to the City, and when those employees work primarily to advance the private interests of the [Association], not the public interests of the City.” In response, the City frames the issues in terms of the trial court’s rulings. First, the City asserts that Borgelt and the State have not established a genuine issue of material fact as to whether the bargained-for contract term that provides for a shared leave bank to the City’s firefighters and that is subject to numerous rules, restrictions, and approval 6 requirements, constitutes an unconstitutional “gift” of public funds. Second, the City asserts that Borgelt and the State have not established that the trial court erred in reaching its bench-trial judgment determining that the challenged, bargained-for contract term, as implemented by the City, was not an unconstitutional “gift” of public funds. A. Standard of Review and the Law Governing the Gift Clauses Borgelt and the State do not challenge any of the trial court’s findings of fact or the sufficiency of the evidence supporting those findings. Instead, they challenge the trial court’s legal conclusions supporting its summary judgment and the final judgment issued after the bench trial. We defer to unchallenged findings of fact that are supported by some evidence. Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, 437 S.W.3d 518, 523 (Tex. 2014). We review the trial court’s summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When both parties move for summary judgment and the trial court grants one motion and denies the other, we review all the summary-judgment evidence, determine all issues presented, and render the judgment the trial court should have rendered. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). When a trial court’s summary-judgment order does not specify the grounds relied on for its ruling, as is the case here, we must affirm the summary judgment if any of the theories presented to the trial court and preserved for appellate review are meritorious. Provident Life, 128 S.W.3d at 216. We review the trial court’s conclusions of law de novo, and we may review the trial court’s legal conclusions drawn from the facts found to determine the correctness of the conclusions. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). If we determine that a conclusion of law is erroneous, but the trial court rendered the proper judgment, 7 the erroneous conclusion of law does not require reversal. Id. To the extent our analysis requires us to construe the Agreement, interpretation of an unambiguous contract is a question of law that “we review de novo using well-settled contract-construction principles.” URI, Inc. v. Kleberg County, 543 S.W.3d 755, 763 (Tex. 2018). The constitutional provisions that make up what the parties refer to as the “Gift Clauses” are Article III, Sections 50, 51, and 52(a), and Article XVI, Section 6(a). They provide as follows: The Legislature shall have no power to give or to lend, or to authorize the giving or lending, of the credit of the State in aid of, or to any person, association or corporation, whether municipal or other, or to pledge the credit of the State in any manner whatsoever, for the payment of the liabilities, present or prospective, of any individual, association of individuals, municipal or other corporation whatsoever. Tex. Const. art. III, § 50. The Legislature shall have no power to make any grant or authorize the making of any grant of public moneys to any individual, association of individuals, municipal or other corporations whatsoever; provided that the provisions of this Section shall not be construed so as to prevent the grant of aid in cases of public calamity. Id. art. III, Section 51. [T]he Legislature shall have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit or to grant public money or thing of value in aid of, or to any individual, association or corporation whatsoever . . . . Id. art. III, § 52(a). No appropriation for private or individual purposes shall be made, unless authorized by this Constitution. A regular statement, under oath, and an account of 8 the receipts and expenditures of all public money shall be published annually, in such manner as shall be prescribed by law. Id. art. XVI, § 6(a). These sections are “intended to prevent the application of public funds to private purposes; in other words, to prevent the gratuitous grant of such funds to any individual, corporation, or purpose whatsoever.” Byrd v. City of Dallas, 6 S.W.2d 738, 740 (Tex. [Comm’n Op.] 1928) (addressing, among other constitutional provisions, Article III, Sections 51 and 52, and Article XVI, Section 6). The Texas Supreme Court, in a case interpreting Article III, Section 52(a), reiterated this prior holding that Section 52(a)’s prohibition on a grant of public money “means that the Legislature cannot require gratuitous payments to individuals, associations, or corporations.” Texas Mun. League Intergovt’l Risk Pool v. Texas Workers’ Comp. Comm’n, 74 S.W.3d 377, 383 (Tex. 2002) (analyzing whether Section 52(a) was violated by Labor Code provisions that required multi-city workers’ compensation risk pool to pay unclaimed death benefits into Texas Workers’ Compensation Subsequent Injury Fund). It further explained that “[a] political subdivision’s paying public money is not ‘gratuitous’ if the political subdivision receives return consideration.” Id. In addition, the Texas Supreme Court explained, it has long been held that Section 52(a) “does not prohibit payments to individuals, corporations, or associations so long as the statute requiring such payments: (1) serves a legitimate public purpose; and (2) affords a clear public benefit received in return.” Id. at 383-84. The Texas Supreme Court established a three-part test for determining whether a statute accomplishes a public purpose: Specifically, the Legislature must: (1) ensure that the statute’s predominant purpose is to accomplish a public purpose, not to benefit private parties; (2) retain public 9 control over the funds to ensure that the public purpose is accomplished and to protect the public’s investment; and (3) ensure that the political subdivision receives a return benefit. Id. at 384. The parties dispute whether the test as set forth in Texas Municipal League requires us to analyze both whether the public payment is gratuitous and whether it serves a legitimate public purpose (using the three-part test), or whether it is enough to determine that the payment is not gratuitous. Although the Texas Supreme Court did not explicitly state the test as requiring a consideration of both factors, we note that it determined both that the payments at issue were not gratuitous and then considered whether the payments accomplished a legitimate public purpose with a clear public benefit received in return. Id. at 385. Accordingly, we will do the same in this case. B. The Contractual Provision Is Not a Gratuitous Grant of Public Funds Our first inquiry is whether the trial court rightly concluded that the Association Leave Provision is not a gratuitous grant of public funds. As an initial matter, we note that although Borgelt and the State characterize Association Leave as a gratuitous grant of funds to the Association, no funds are ever paid directly to the Association. Instead, the Association Leave Provision establishes a mechanism by which firefighters are permitted to have paid time off to conduct Association business under the conditions specified in the Agreement. When considering the constitutionality of a statute allowing pensions for firefighters and police officers, the Commission on Appeals in an opinion adopted by the Texas Supreme Court stated that if the pension provided for in the act “is a part of the compensation of such employee for services rendered to the city, or if it be for a public purpose,” then it did not 10 violate the Gift Clauses. Byrd, 6 S.W.2d at 740. The court in Byrd did not analyze whether the pension scheme served a public purpose; instead, it considered whether the pension plan was part of the employees’ compensation. Id. It noted that “[t]here is no reason why a city may not engage its servants and employees upon any terms of payment acceptable to both parties.” Id. It determined that the statutorily authorized pension plan contemplated that the employees’ compensation would consist of their agreed-upon salaries and their entitlement to participate in the pension fund. Id. The court held: When an officer or employee coming within the statute is employed and evidences his assent to the pension scheme, he thereupon has a binding contract with his employer for the stipulated salary and likewise to be “entitled to participate” in the fund upon the terms prescribed. The right to participate in such fund is therefore not a gratuity or donation in any sense. It is as much a part of the agreed compensation as is the monthly stipend. Id. at 741 (emphasis added). Similarly, in this case, the Association Leave Provision was a bargained-for term of the 2017 Collective Bargaining Agreement, and the right for firefighters authorized by the Association to receive such leave was part of the agreed compensation provided for in the Agreement. Borgelt and the State, however, assert in their reply that because Association Leave is set up as a bank of time that individual City firefighters can request and because Association President Nicks is allowed to use 2,080 hours of the Association Leave bank, Association Leave “is not compensation to all employees for services rendered, for them to use as they see fit.” They contend that instead it is given to the Association for the Association to use as it sees fit. Moreover, they contend that because Association Leave may be used by the Association as it chooses, Association Leave is not “‘sufficient consideration’ for the ‘performance of employment duties.’” 11 They further argue that Association Leave differs from the pension-plan participation that the court in Byrd concluded was “part of the compensation of such employee for services rendered to the city,” 6 S.W.2d at 740, based on their assertion that it is given to the Association for Association business activities consistent with the Association’s purposes, not to employees as payment for the performance of employment duties. In support of this line of argument, they also challenge the trial court’s conclusion of law number four in which the court concluded that for the purpose of “analyzing contractual consideration, ‘individual paragraphs of a contract are not separate and divisible contracts,’” quoting Howell v. Murray Mortgage Co., 890 S.W.2d 78, 86-87 (Tex. App.—Amarillo 1994, writ denied) (citing Pace Corp. v. Jackson, 284 S.W.2d 340, 344 (Tex. 1955)). 4 Borgelt and the State argue that because they assert that only the Association Leave Provision is unlawful, that provision may be severed and the remainder of the contract may be enforced. However, the principle that an illegal contract provision may be severed does not answer the question of whether we should examine the contract as a whole to determine whether sufficient consideration exists for this Court to determine that the Association Leave Provision is not gratuitous. As this Court has previously stated, “[a] basic principle of contract law is that one consideration will support multiple promises by the other contracting party.” Fortner v. Fannin Bank in Windom, 634 S.W.2d 74, 77 (Tex. App.—Austin 1982, no writ) (citing, e.g., Restatement (Second) of Contracts § 80(1) (1981)), and holding that summary-judgment proof established that bank’s customer purchased bank’s services of loan and of filing title papers in exchange for his promise to repay principal and interest). The Agreement between the City and the Association 4They do not challenge the trial court’s finding of fact (FOF) number twelve, “The [Agreement] constitutes a bargained-for exchange of valid consideration on all sides.” 12 governs the City’s relationship with the Association, which the City recognizes in the Agreement “as the sole and exclusive bargaining agent for all Fire Fighters pursuant to Local Government Code Section 174.101.” As the court noted in Byrd, “[t]here is no reason why a city may not engage its servants and employees upon any terms of payment acceptable to both parties.” 6 S.W.2d at 740; see also Morales v. Hidalgo Cnty. Irrigation Dist. No. 6, No. 13-14-00205-CV, 2015 WL 5655802, at 4 (Tex. App.—Corpus Christi–Edinburg Sept. 24, 2015, pet. denied) (mem. op.) (holding that employment contract with term entitling employee to cash severance equal to employee’s remaining compensation due for term of employment if terminated by public employer for any reason other than death or disability did not constitute gratuitous payment of public funds to employee). “Texas courts have long held that the performance of employment duties is consideration for the payment of benefits to employees under the terms of a contract, and therefore such payments are not unconstitutional gratuities.” Morales, 2015 WL 5655802, at 3 (citing cases). Here, in addition to the fire-protection services that the City receives in return for the compensation terms of the Agreement, including the compensation provided by the Association Leave Provision, the trial court had before it evidence both at summary judgment and at trial that the City receives additional consideration in the form of concessions by the Association. These concessions result in changes favorable to the City on matters otherwise governed by the civil-service provisions found in Texas Local Government Code Chapter 143. 5 These matters 5 Unchallenged FOF number four states, “The [Agreement] allows the City and the [Association] to agree on terms of hiring and promotion beyond those that are specified in Chapter 143 of the Local Government Code, which allows the AFD to hire and promote candidates based on more than just the candidate’s test score.” Assistant Fire Chief Aaron Woolverton testified that the City and the Fire Department benefit from several articles in the Agreement, including the hiring article, the promotions article, and the drug-testing article, among others, and that “there’s 13 include hiring, promotions, disciplinary investigations, disciplinary appeals, allowing for differences in base wages based upon seniority, longevity pay, required certifications, required education, specialized assignments, the designation of personnel in certain positions with certain leave and pay levels, drug testing, and the ability to merge the Austin Fire Department with Travis County Emergency Services Districts. These terms favorable to the City are incorporated into the Agreement. In addition, as the trial court states in unchallenged finding of fact (FOF) number seven, “The [Association] pledged in the [Agreement] to support the service and mission of the AFD, to constructively support the goals and objectives of the AFD, and to abide by the statutorily imposed no strike or work slowdown obligations placed on it.” Borgelt and the State also argue that the Association “has not obligated itself to perform any duties, or give anything in return, for the [Association Leave] hours it receives.” As explained above, “an individual paragraph is merely a part of an entire, integrated contract between the contracting parties. Mutuality of obligation in each individual clause of a contract is unnecessary where there is consideration given for the contract as a whole.” Howell, 890 S.W.2d at 86-87 (citations omitted); see also United Appliance Corp. v. Boyd, 108 S.W.2d 760, 764 (Tex. App.—Fort Worth 1937, no writ) (“Generally there is mutuality in the case of mutual promises by both parties to the contract which furnish a consideration each for the other, or where both parties undertake to do something—even though every obligation of one party is not met by an equivalent counter obligation of the other.”). Despite Borgelt and the State’s assertion, and while an equivalent counter-obligation for Association Leave is not necessary, we note that the unambiguous terms of the Agreement in fact bind the Association to several specific obligations others, where the City has—has gained rights that we wouldn’t have had under a strict 143 standard, or our—our rule, and so we’ve gained in those . . . areas.” 14 related to a number of administrative requirements, including administering the Association Leave bank, recordkeeping regarding membership and dues withholding, and communications with members of the Civil Service Commission and with its own membership. A key duty of the Association is its role in the grievance-resolution procedure established in the Agreement “to establish an effective method for the fair, expeditious and orderly adjustment of grievances.” The Association Grievance Committee makes the initial determination of whether a valid grievance exists, and if it does, the Association moves the grievance forward through the process, which can include arbitration, on behalf of the firefighter. The Association also agreed to attempt to resolve grievances informally both before their filing and before arbitration “in an attempt to avoid costly arbitration.” In addition, Borgelt and the State’s consideration argument presumes that because Association Leave may be used for Association activities that support the Association’s business, the City does not benefit from these activities. As we will discuss in more detail below as it relates to public purpose, this argument ignores the benefits received by the City from the concessions noted above and the role that the Association plays in the Agreement’s stated purpose of maintaining “harmonious relations between the parties,” including providing “for the equitable and orderly adjustment of grievances that may arise during the term of this Agreement.” The trial court made multiple unchallenged findings of fact that the public—on whose behalf the City negotiated the Agreement—benefits from “achieving and maintaining harmonious relations between public safety employees and local government” and from “[a]greeing to a method of equitable and orderly adjustment of firefighter grievances, as described in the Agreement.” As the trial court’s unchallenged FOF number six states, “Good labor relations between the City and the 15 [Association], including a duly negotiated and ratified labor agreement, are integral in AFD achieving its purpose, mission, vision, goals and core values.” Finally, there was uncontroverted evidence before the trial court that as part of the collective-bargaining process in 2009, the City agreed to the current method of allowing up to 5,600 hours per year of Association Leave in exchange for a change in the treatment of sick leave from “productive leave” that counted toward employees’ hours worked for purposes of calculating overtime to “nonproductive leave” that did not count towards employees’ hours worked. Nicks estimated that this change saved the City between $500,000 to $600,000 per year, while the cost of Association Leave is approximately $200,000 per year. Both the Agreement’s express terms and the record evidence support a conclusion that the Association Leave Provision is supported by sufficient consideration. This consideration renders the Provision constitutional on its face because the Agreement’s grant to employees of the ability to take paid time off for Association Leave is not gratuitous. See Texas Mun. League, 74 S.W.3d at 384 (explaining that “only sufficient—not equal—return consideration” is required “to render a political subdivision’s paying public funds constitutional”). Consequently, we hold that the trial court did not err by concluding in conclusion of law number ten that “[t]he [Agreement], containing the [Association Leave] article, is supported by an exchange of valid, bargained-for consideration on both sides.” See Byrd, 6 S.W.2d at 741 (concluding that employees’ right to participate in pension fund was part of agreed compensation for services); see also Walker v. City of Georgetown, 86 S.W.3d 249, 260 (Tex. App.—Austin 2002, pet. denied) (concluding, without conducting analysis of public purpose, that City’s lease of portion of public park for batting-cage facility for $400 per month was not gratuitous donation of public funds because lease was supported by valuable consideration). 16 C. The Agreement, Including the Association-Leave Provision, Serves a Legitimate Public Purpose and Affords a Clear Public Benefit in Return We turn now to the two-prong test for constitutionality to determine whether the trial court correctly concluded that the Association Leave Provision does not violate the Gift Clauses because it (1) serves a legitimate public purpose and (2) affords a clear public benefit in return. See Texas Mun. League, 74 S.W.3d at 383. We will consider the three-part test established in Texas Municipal League for whether the challenged payment serves a legitimate public purpose: (1) whether the Association Leave Provision’s predominant purpose is to accomplish a public purpose, not to benefit private parties; (2) whether the City retains public control over the City’s funds to ensure that the public purpose is accomplished and to protect the public’s investment; and (3) whether the City ensures that it receives a return benefit. See id. at 384. We then will consider the somewhat overlapping second prong of the constitutionality question—whether the Provision affords a “clear public benefit received in return.” Id. at 383. (1) The predominant purpose is to provide public employees with leave time that is used for purposes related to their public employment Borgelt and the State challenge the trial court’s conclusion of law number eleven, which states that “[t]he [Agreement], including the [Association Leave] article and the City’s implementation of [Association Leave] under the [Agreement], accomplishes a predominantly public purpose and is not predominantly a benefit to private parties.” Borgelt and the State argue that the Association Leave Provision does not serve a public purpose because they contend that the Association, not the City or its taxpayers, is the predominant beneficiary of Association Leave. They contend that because the Association is a private labor organization, its “mission is to advance the private interests of its members,” citing in support the City’s discovery response in 17 which it states that “[t]he Association is an organization that represents firefighters to deal with the City as an employer concerning grievances, labor disputes and conditions of employment affecting those firefighters” and that “[a]ctivities by the [Association] in connection with Article 10 are those that support their role as an employee organization.” In further support of this argument, Borgelt and the City contend that the predominant purpose of the Association Leave Provision is to allow firefighters to do “private union business, not the City’s business,” and that if all the activities done using Association Leave promoted public purposes, there would be no need for Association Leave because the City could just assign employees to further those purposes directly as part of their official duties. This argument ignores the policy set forth by the Texas Legislature, as stated above, declaring that collective bargaining between a political subdivision and the designated bargaining agent for the political subdivision’s firefighters is in the public interest—“Denying fire fighters and police officers the right to organize and bargain collectively would lead to strife and unrest, consequently injuring the health, safety, and welfare of the public.” Tex. Loc. Gov’t Code § 174.002(b). Borgelt and the State dispute the City’s argument that the predominant purpose of the Agreement “is to secure safe and efficient fire safety and emergency services for the citizens of Austin, an unquestionable public purpose,” contending that the City cannot argue that Association Leave Provision “is necessary or (even helpful to) achieving this purpose.” At bottom, Borgelt and the State’s argument is that because the AFD could exist without the Association Leave Provision, the Provision does not serve a public purpose. Borgelt and the State’s argument fails because Borgelt and the State ignore the fact that, as the trial court found, the Association’s mission—facilitating good labor relations between the AFD and its public-servant employees, furthering professional standards for firefighters, and 18 promoting firefighter and public safety—overlaps with the mission of the AFD, and the two organizations’ missions are not mutually exclusive. Thus, work done on behalf of the Association by firefighters who are using Association Leave not only furthers the mission of the Association but also furthers AFD’s mission and public purpose of providing safe and efficient fire safety and emergency services. As the trial court summarized in its FOF number fifteen, the Legislature has determined that “[c]ollective bargaining and the establishment of ‘expeditious, effective, and binding’ contractual arbitration and enforcement procedures promotes the health, safety, and welfare of the public by ensuring ‘high morale of fire fighters . . . . and the efficient operation of the departments.’” 6 In addition, as the trial court found in other findings of fact, the Association’s business carried out on behalf of its public-servant employees serves a public purpose: 5. Employing a staff of individuals who are trained to effectively suppress fires and protect public safety is a public purpose. 6. Good labor relations between the City and the [Association], including a duly negotiated and ratified labor agreement, are integral in AFD achieving its purpose, mission, vision, goals and core values. 7. The [Association] pledged in the [Agreement] to support the service and mission of the AFD, to constructively support the goals and objectives of the AFD, and to abide by the statutorily imposed no strike or work slowdown obligations placed on it. 6 See Tex. Loc. Gov’t Code §§ 174.002(c) (establishing that “[t]he health, safety and welfare of the public demands that strikes, lockouts, and work stoppages and slowdowns of fire fighters and police officers be prohibited” and thus it is State’s “duty to make available reasonable alternatives to strikes by fire fighters and police officers”), (d) (“Because of the essential and emergency nature of the public service performed by firefighters and police officers, a reasonable alternative to strikes is a system of arbitration conducted under adequate legislative standards [or judicial enforcement of this Chapter’s requirements].”), (e) (“With the right to strike prohibited, to maintain the high morale of fire fighters and police officers and the efficient operation of the departments in which they serve, alternative procedures must be expeditious, effective, and binding.”), .101 (establishing that “public employer shall recognize an association selected by a majority of the fire fighters of the fire department of a political subdivision as the exclusive bargaining agent for the fire fighters of that department”). 19 .... 16. Achieving and maintaining harmonious relations between public safety employees and local government is a public purpose. 17. Agreeing to a method of equitable and orderly adjustment of firefighter grievances, as described in the [Agreement], is a public purpose. We conclude that the Association Leave Provision’s “predominant purpose is to accomplish a public purpose” because it facilitates the Association’s ability to carry out its business of supporting the Fire Department’s mission and maintaining good labor relations between the City and its public-servant firefighters. (2) The trial court correctly determined that the City retains sufficient control over the Association Leave Provision to ensure that the public purpose is accomplished and to protect the public’s investment Borgelt and the State contend that the Association Leave Provision violates the Gift Clauses because the City failed to establish that it maintains any control—either in the language of the Agreement or in its implementation—over the public funds used to provide Association Leave. They primarily focus on the use of the Association Leave granted by the Agreement to the Association’s President and, to a lesser extent, on the use of Association Leave by other “Authorized Association Representatives,” as that term is defined in the Agreement. Borgelt and the State do not challenge any of the trial court’s findings of fact related to the issue of control. Instead, they assert that the terms of the contract and the evidence before the trial court support their contention that the City does not control its employees’ use of Association Leave in an adequate manner to avoid violating the Gift Clauses. 20 We first consider how the Agreement and its implementation apply to the Association’s President. Bob Nicks, the Association’s President since 2010, gave testimony both by deposition and at the two-day bench trial. Borgelt and the State contend that the City does not maintain adequate control over the Association President’s use of Association Leave because he is allowed to work full-time on Association business but is not required to report to AFD headquarters or any other Department office on a daily basis or to report to the City his daily activities or what Association work he is doing. They also argue that because he is outside of the regular chain of command and reports to the Chief of Staff or the Fire Chief and because the City cannot remove the Association President from his Association position, the City lacks sufficient control over the Association President’s use of Association Leave. We disagree that the City lacks sufficient control over the Association President and his use of Association Leave. The Agreement itself sets forth the parameters of what constitutes Association business activities for which Association Leave may be used. For the Association President, the Agreement provides that he may use up to 2,080 hours of Association Leave per year from the 5,600 hours in the Association Leave pool “for any lawful Association business activities consistent with the Association’s purposes.” The Agreement further states that the Association President “shall be assigned to a 40 hour work week. The Association President shall account for all leave time taken under such status through the Fire Chiefs office and such time shall be subtracted from the Association leave pool.” Furthermore, “[a]t the end of his/her term, the Association President will be allowed to return to the assignment s/he occupied before commencing [Association Leave] to perform duties as Association President.” Thus, the Association President remains a City employee who returns to his previous City position whenever 21 his term as Association President ends. 7 In addition, the Agreement contemplates that the Association President may be required to return to duty at any time if an emergency situation exists and further provides that the Association President may also be assigned to special projects at the Fire Chief’s discretion. Assistant Fire Chief Aaron Woolverton, a member of AFD management, testified that the Association President is supervised by someone in the executive staff rather than a shift commander partly because the Association President works a more traditional schedule (40 hours from Monday through Thursday) than a shift commander who comes in only every third day and partly because of the difference in his job duties. While Borgelt and the State contend that the City does not adequately control the Association President as an employee because “[t]he City cannot ‘hire’ him as [Association] President or remove him as [Association] President; it does not supervise him or his activities,” this description misrepresents the City’s level of control over the Association President. While the City cannot choose who the Association’s President is, the City controls his employment as an AFD employee, including retaining its ability to terminate his City employment, which would terminate his access to paid leave of any kind. As Nicks testified and the trial court found, he remains subject to the Department’s Code of Conduct and the City’s and Department’s personnel policies, and he may be disciplined by the City for failing to follow any of the City’s policies or requirements. Nicks testified that in fact he has been subjected to discipline from the Department for conduct during his Association Leave time. The trial court also found that “Nicks is required to comply with continuing education requirements, EMT requirements, and any applicable 7 The parties filed Amended Joint Stipulated Facts before the bench trial. Borgelt and the State stipulated that “[t]he [Association’s] President is Bob Nicks, who is employed as a full-time City of Austin firefighter.” 22 credentials by the Austin/Travis County Office of the Medical Director, just as any other member of the AFD.” The trial court found that the City is not aware of any instance where the Association President used leave for any activities prohibited by Texas Local Government Code Section 143.086, governing political activities, or by the Texas Ethics Commission. The trial court made a finding based on Nicks’s uncontradicted testimony that Nicks spends many more hours per week than his forty hours of Association Leave on his work as Association President. And contrary to Borgelt and the State’s implication, while no one directs the Association President’s day-to-day activities, the evidence showed that the City does not lack oversight over his work. He testified, and the trial court found, that he meets with various members of AFD’s management on a regular basis, including the Chief of Staff, whom he reports to “[w]henever he asks me to,” and similarly attends any meeting that the Fire Chief asks him to attend. As Nicks explained it, “[w]hat we do is we work on a lot of common things together that are—that are mutually beneficial to the Department.” As an example, he described a project that he and the Fire Chief “worked many, many hours together on,” along with civilian budget analysts to come up with the most desirable ways from the Association’s membership’s point of view to solve an overtime crisis due to a personnel shortage. He testified that because he went through the process of engaging the membership and stakeholders, the City was able to save three to four million dollars and minimize morale issues. We next turn to Borgelt and the State’s argument that the terms of the Agreement and the use of Association Leave by other Authorized Association Representatives violates the Gift Clauses because the City lacks sufficient control over the use of the Representatives’ time. The Agreement defines an “Authorized Association Representative” as “a representative of the Association authorized by the Association’s Executive Board to conduct business on behalf of the 23 Association” and sets forth specific parameters for their use of Association Leave time. The trial court found that any member of the Association may request to use Association Leave as an Authorized Association Representative. As provided in Article 10, they may use the time “for Association business activities that directly support the mission of the Department or the Association, but do not otherwise violate the specific terms of this Article.” The Agreement defines “Association business” as “time spent in Collective Bargaining negotiations[,] adjusting grievances, addressing cadet classes during cadet training (with prior approval of the time and content by the Fire Chief, or his/her designee), and attending union conferences and meetings.” The Agreement limits the use of Association Leave for “legislative and/or political activities at the State or National level” to activities that “relate to the wages, rates of pay, hours of employment, or conditions of work affecting the members of the bargaining unit” and at the local level “to raising concerns regarding firefighter safety.” The Agreement prohibits the use of Association Leave for “legislative and/or political activities that are sponsored or supported by the Association(s) Political Action Committee(s)”; “for legislative and/or political activities at the local, state, or national levels that are contrary to the City’s adopted legislative program”; and for activities prohibited by Texas Local Government Code Section 143.086 (governing political activities) or by the Texas Ethics Commission. The Agreement gives the City the right to specify in Departmental policy the “[a]dministrative procedures and details regarding the implementation of” Association Leave. The Agreement requires that the Authorized Association Representatives request Association Leave in writing and submit their requests to AFD headquarters support staff at least three days in advance. The trial court found that Assistant Chief Woolverton was the individual designated to review Association Leave requests for most of the period at issue in this case. Woolverton testified at 24 length about the approval process for Association Leave. The trial court made a number of findings supported by testimony from him and Nicks about the use of Association Leave by Authorized Association Representatives. The trial court found that AFD, through Woolverton and other members of AFD management, has denied Association Leave requests that are untimely or that do not comply with the Agreement’s Leave Provision or that would interfere with the Department’s operational needs. The trial court found that the City is not aware of any instance where Association Leave was used by an Authorized Association Representative for any of the expressly prohibited political or legislative activities. The trial court found that “[t]he City has and continues to monitor [Association Leave] usage by compiling quarterly [Association Leave] usage reports, which show the amount of [Association Leave] used and the general nature of the business that was conducted while the AFD firefighters used that leave.” The Agreement’s Article 4 establishes that the City retains all its inherent rights to manage the Fire Department and its work force, including the right to discipline or discharge employees in accordance with Chapter 143 and the Agreement’s terms. The trial court found that all AFD members are expected to comply with applicable personnel policies and AFD’s Code of Conduct while they are out on leave, including Association Leave. The trial court made findings that the Association uses Association Leave for “other association business” that includes station visits; organizing and working third-party charity events; and the Fire Fighter Combat Challenge event, which promotes firefighter fitness and furthers the Department’s mission of maintaining a healthy and highly performing workforce. The trial court also found that ensuring the first responders like AFD firefighters are physically fit serves a public purpose. Borgelt and the State focus on what they describe as the “undefined, unaccounted- for category of time” of “other association business,” which they assert represents the majority of 25 Association Leave used by Authorized Association Representatives. The record evidence does not support this characterization of “other association business” as “undefined” or “unaccounted- for.” While the quarterly summaries of Association Leave provided by the City do not explicitly show the specific activity for each entry logged as “other association business,” each Association Leave request requires that the requesting firefighter complete a “Purpose of Request” field, and this field is what the Association (who screens the request first) and then the City reviews when determining whether to approve the request as Association Leave. The trial court concluded that “[t]he [Agreement], including the [Association Leave] article and the City’s implementation of [Association Leave] under the [Agreement], permits the City to maintain sufficient public control over City funds to ensure they accomplish a public purpose and the public’s investment is protected.” It further concluded: [Association Leave] is a bargained-for provision of [an Agreement] that sets, among other things, the conditions of employment for the City of Austin’s firefighters. The [Agreement], City policies, and in particular the rules and practices AFD follows in approving and accounting for the use of ABL by [Association] president Bob Nicks and other Austin firefighters provides sufficient control to ensure that the public purposes of the [Agreement] and the [Association Leave] provision are accomplished and to protect the public’s investment. Having examined the record and arguments de novo, we conclude that the trial court did not err in reaching these conclusions. (3) The City receives a return benefit As we previously concluded in our discussions of consideration and public purpose, the City receives a return benefit from the Association Leave Provision, but we will summarize those benefits and some others here. The City presented evidence that the Provision was originally 26 negotiated in exchange for the way that certain sick-leave time was calculated, resulting in a cost savings for the City. There is also record evidence explaining some benefits to the Department from the work that Authorized Association Representatives may use Association Leave to do, including participation in a cadet-hiring oversight committee and a labor-management initiative that works to resolve issues in a proactive way. Assistant Chief Woolverton testified that the City benefited from having Association representatives attend dispute resolutions and grievance proceedings because the City prefers to work things out through a grievance process or dispute- resolution process instead of a lawsuit. In addition, Nicks testified that one of the benefits provided to the public from his full-time work as Association President is that through his regular contact with both AFD management and the Association’s members, he is able to provide the Fire Chief with “the perspective of the rank and file” about what “helps or hurts morale” and that allows the Chief to make a more informed decision on important issues, including firefighter safety and operational issues. Woolverton testified that he viewed it as a benefit to the City to have the Association President spend his full-time work week on Association business rather than being a part-time president and also having a Battalion Chief position. He stated: [H]aving had it both ways during the history of my tenure with the Fire Department, I was much more at ease with him actually being full-time dedicated to the functions of the presidency, and the reason being is the firefighter safety issue. I don’t want the Union Presidents focused on something other than the men and women that are serving for him. And if his mind is elsewhere while he’s on duty, that’s not a good thing. So I like, personally, the split function. Woolverton further testified that at one point Nicks had requested to be able to continue to work in operations and also maintain his Association President job, but the Fire Chief had denied that request for the same reason—to avoid a conflict in his two roles. Finally, the City benefits from 27 the Provision because the Provision enables the Association to conduct its business, and the Association’s business serves the public purpose of facilitating harmonious labor relations between the firefighters and the City. The record evidence, including the Agreement’s terms, supports the trial court’s conclusion that “[t]he [Agreement], including the [Association Leave] article and the City’s implementation of [Association Leave] under the [Agreement] ensures that the City receives a return benefit, and the City receives a clear public benefit in return.” Accordingly, having reviewed de novo the Agreement’s terms and the City’s implementation of the Association Leave Provision, we conclude that the Provision satisfies the three prongs of the public-purpose test. See Texas Mun. League, 74 S.W.3d at 385. (4) The Provision affords a clear public benefit in return As for the second prong of the constitutionality question (which somewhat overlaps with the third factor of the public-purpose test), the trial court also correctly concluded that the City has established that Association Leave Provision “benefits the public as a whole, and not merely a particular private interest.” See id. As previously explained, the record evidence shows that the Association’s business serves a public purpose, so the Provision serves a public purpose of facilitating harmonious labor relations between the firefighters and the City. And as the trial court found, “[g]ood labor relations between the City and the [Association], including a duly negotiated and ratified labor agreement, are integral in AFD achieving its purpose, mission, vision, goals and core values.” We conclude that the Association Leave Provision (1) serves a legitimate public purpose and (2) affords a clear public benefit received in return. Id. The trial court correctly concluded that neither the terms of the Provision nor the City’s implementation of the Provision 28 violate the Gift Clauses. Therefore, we affirm the portion of the trial court’s final judgment ordering that Borgelt and the State take nothing, dismissing their claims against the City with prejudice, and entering final judgment in favor of the City. We overrule Borgelt and the State’s issue. II. The Trial Court Did Not Err by Granting the Association’s TCPA Motion and Awarding Sanctions In a multi-part issue, appellants Pulliam and Wiley challenge the trial court’s rulings against them in connection with the Association’s motion to dismiss brought under the TCPA. See generally Tex. Civ. Prac. & Rem. Code §§ 27.001-011. They assert that the trial court erred when it granted the motion to dismiss (1) by finding that the Association established that the action relates to the Association’s constitutional rights, (2) by finding that Pulliam and Wiley failed to establish a prima facie violation of the Gift Clauses even though it later found that a fact issue existed requiring a bench trial, (3) by awarding sanctions against Pulliam and Wiley, and (4) by granting the TCPA order and sanctions in violation of their constitutional rights. The Association responds that Pulliam and Wiley’s asserted arguments against the TCPA order are “imaginative, but fundamentally flawed.” 8 The Association filed its TCPA motion to dismiss on November 21, 2016. Although the Texas Legislature amended the TCPA in 2019, the prior version of the statute continues to control cases filed before September 1, 2019. See Texas Citizens Participation Act, 86th Leg., R.S., ch. 378, §§ 11-12, 2019 Tex. Gen. Laws 684, 687 (providing that amendments 8 The City did not move for dismissal of Pulliam and Wiley’s claims under the TCPA, so the City takes no position on appeal on this issue. Similarly, the State takes no position on the appellate issues raised by Pulliam and Wiley related to the trial court’s orders on the TCPA motion. 29 apply to actions filed on or after September 1, 2019). Thus, all references to the TCPA in this opinion are to the version that applies to this dispute. See generally Texas Citizens Participation Act, 82nd Leg., R.S., ch. 341, 2011 Tex. Gen. Laws 961, 961-64 (codified at Tex. Civ. Prac. & Rem. Code §§ 27.001-011). A. Applicable TCPA Legal Standard The TCPA “protects citizens who petition or speak on matters of public concern from retaliatory lawsuits that seek to intimidate or silence them.” In re Lipsky, 460 S.W.3d at 584; see also Tex. Civ. Prac. & Rem. Code §§ 27.001-.011. The TCPA provides this protection by means of an expedited motion to dismiss a suit that appears to stifle the defendant’s exercise of certain protected rights, including the right of association. In re Lipsky, 460 S.W.3d at 584 (citing Tex. Civ. Prac. & Rem. Code § 27.003). Reviewing a TCPA motion to dismiss requires a three- step analysis. Youngkin v. Hines, 546 S.W.3d 675, 679 (Tex. 2018). Under the first step, the party moving for dismissal must show by a preponderance of the evidence that the TCPA applies to the legal action that is the subject of the motion to dismiss. See Tex. Civ. Prac. & Rem. Code §§ 27.003(a), .005(b). If the movant satisfies that burden, under the second step, the burden shifts to the nonmovant to establish “by clear and specific evidence a prima facie case for each essential element of the claim in question.” Id. § 27.005(c). Finally, under the third step, if the TCPA applies and the nonmovant satisfies its burden of presenting a prima facie case, the burden shifts back to the movant to establish by a preponderance of the evidence each essential element of a valid defense to the nonmovant’s claim. Id. § 27.005(d). When determining whether a legal action should be dismissed under the TCPA, courts must consider “the pleadings and supporting and opposing affidavits stating the facts on 30 which the liability or defense is based.” Id. § 27.006(a). We view the pleadings, affidavits, and evidence in the light most favorable to the nonmovant. Warner Bros. Ent., Inc. v. Jones, 538 S.W.3d 781, 801 (Tex. App.—Austin 2017), aff’d, 611 S.W.3d 1 (Tex. 2020). We review de novo issues of statutory interpretation when determining whether the TCPA applies. See Youngkin, 546 S.W.3d at 680. We also review de novo the trial court’s ruling on a motion to dismiss, including whether the parties have carried their respective burdens. Grant v. Pivot Tech. Sols., Ltd., 556 S.W.3d 865, 873 (Tex. App.—Austin 2018, pet. denied). B. The Association Carried Its Burden to Establish That the TCPA Applies to Pulliam and Wiley’s Claims Under the first step of the TCPA analysis, we consider whether the Association has demonstrated that the TCPA applies to this legal action. TCPA Section 27.005 provides that “a court shall dismiss a legal action against the moving party if the moving party shows by a preponderance of the evidence that the legal action is based on, relates to, or is in response to the party’s exercise of . . . the right of association.” Tex. Civ. Prac. & Rem. Code § 27.005(b)(3). The TCPA provides its own definition of the “[e]xercise of the right of association”: “a communication between individuals who join together to collectively express, promote, pursue, or defend common interests.” Id. § 27.001(2). Both in their TCPA motion and on appeal, the Association urges that the TCPA applies to the suit because Pulliam and Wiley’s claims “relate to” the Association’s members’ exercise of the right of association as defined by the Act. Pulliam and Wiley argue that the trial court erred by determining the TCPA applies to this legal action because the lawsuit has not infringed, and cannot infringe, on any of the Association’s constitutional or statutory rights. As the Association argued in its motion, the heart of Pulliam and Wiley’s claim is that Association Leave is used to further the interests of the Association rather than the City’s 31 interests. In support of this claim, they alleged in their petition that the Agreement allows Authorized Association Representatives to use Association Leave for “time spent in Collective Bargaining negotiations[,] adjusting grievances, attending dispute resolution proceedings, addressing cadet classes during cadet training (with prior approval of the time and content by the Fire Chief, or his/her designee), and attending union conferences and meetings.” All these acts are “communication[s] between individuals who join together to collectively express, promote, pursue, or defend common interests.” Id. Thus, on its face, Pulliam and Wiley’s pleading demonstrates, as the Association argues, that the case “relates to” the statutorily defined exercise of the right of association by the Association’s membership. See Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017) (“When it is clear from the plaintiff’s pleadings that the action is covered by the Act, the defendant need show no more.”). Pulliam and Wiley, on the other hand, contend that “this case does not impair [the Association’s] communications at all” and that even if they received the relief that they requested in this case (an injunction against Association Leave), the Association’s ability and right to communicate and to associate will be entirely unaffected. They argue that because they seek to stop only public funding of the Association’s activities, not the activities themselves, the case does not implicate the Association’s constitutional rights or statutory rights under the TCPA. Contrary to Pulliam and Wiley’s argument that the TCPA does not apply because their requested relief would not impair the Association’s communications at all, the Texas Supreme Court has made clear that we must “adhere to a plain-meaning, dictionary-definition analysis of the text within the TCPA’s definitions of protected expression, not the broader resort to constitutional context” that Pulliam and Wiley advocate. Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191, 204 (Tex. App.—Austin 2017, pet. dism’d) (citing ExxonMobil Pipeline Co. v. Coleman, 32 512 S.W.3d 895, 898-902 (Tex. 2017)). To support their allegation that Association Leave serves a predominantly private purpose and therefore violates the Gift Clauses, Pulliam and Wiley’s suit relies upon the “communications” made by Association members using Association Leave. Applying the plain meaning of the terms defined by the Act, we conclude that the Association met its initial burden to show by a preponderance of the evidence that Pulliam and Wiley’s “legal action” “is based on, relates to, or is in response to” the Association’s “exercise of the right of association.” See id. at 205. C. Pulliam and Wiley Failed to Establish a Prima Facie Case for the Alleged Gift Clauses Violation On appeal, Pulliam and Wiley assert that the trial court erred by granting the TCPA motion because it is logically inconsistent for the court to find “(a) that plaintiffs failed to present a prima facie case while simultaneously finding (b) that plaintiffs pleaded and produced evidence sufficient to deny defendants’ motion for summary judgment and (c) ordering trial on the merits of plaintiffs’ constitutional claims.” Pulliam and Wiley do not refer to any “clear and specific” evidence that they offered in response to the TCPA motion to establish a prima facie case. In response, the Association asserts that Pulliam and Wiley did not carry their burden under this second step of the TCPA analysis and that the trial court’s subsequent rulings based on different standards of review, different record evidence, and even different collective-bargaining agreements do not demonstrate that the trial court erred by finding that they failed to establish a prima facie case in response to the TCPA motion. Pulliam and Wiley’s burden to present a “prima facie case” “refers to evidence sufficient as a matter of law to establish a given fact if it is not rebutted or contradicted.” In re Lipsky, 460 S.W.3d at 590. It is the “minimum quantum of evidence necessary to support a rational 33 inference that the allegation of fact is true.” Id. (quoting In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004) (orig. proceeding) (per curiam)). By legislative design, a TCPA motion must be filed very early in the life of a lawsuit, no later than the 60th day after the lawsuit is served. Tex. Civ. Prac. & Rem. Code § 27.003(b). And upon the motion’s filing, “all discovery in the legal action is suspended until the court has ruled on the motion to dismiss,” id. § 27.003(c), except that “the court may allow specified and limited discovery relevant to the motion,” upon a party’s or the court’s own motion and on a showing of good cause, id. § 27.006(b). In this case, the trial court granted Pulliam and Wiley limited discovery relevant to the TCPA motion. It ordered the Association to respond to requests for admissions and to produce documents identifying the number of hours of Association Leave used by persons under the Agreement. It ordered the City to produce a report showing how Association Leave was used by Association members, including the Association President, during the prior three years and to produce policies and procedures concerning the use of Association Leave. The trial court also ordered Association President Nicks to appear and testify in support of the Association’s motion to dismiss at the hearing on the TCPA motion. To successfully defend against the TCPA motion, Pulliam and Wiley needed to produce evidence sufficient as a matter of law to establish, if that evidence is not rebutted or contradicted, that the Association Leave Provision is gratuitous (i.e., the City does not receive return consideration) or that the Association Leave Provision (1) does not serve a legitimate public purpose and (2) does not afford a clear public benefit received in return. See Texas Mun. League, 74 S.W.3d at 383-84; see also In re Lipsky, 460 S.W.3d at 590 (explaining what evidence is required to establish prima facie case). Although Pulliam and Wiley’s amended petition sets forth in reasonable detail the nature of their constitutional challenge, they did not provide clear and 34 specific evidence of a prima facie case of each element of that challenge as the TCPA requires. See Tex. Civ. Prac. & Rem. Code Section 27.005(c); In re Lipsky, 460 S.W.3d at 591 (“Because the Act requires [clear and specific evidence of each essential element], mere notice pleading— that is, general allegations that merely recite the elements of a cause of action—will not suffice. Instead, a plaintiff must provide enough detail to show the factual basis for its claim.”). “[W]hile the trial court can and should consider the facts alleged in the pleadings in determining whether the nonmovant provided clear and specific evidence of a prima facie case of each essential element of its causes of action, the production of evidence in support of those allegations is also required.” Yu v. Koo, 633 S.W.3d 712, 728–29 (Tex. App.—El Paso 2021, no pet.). Pulliam and Wiley provided no such evidence here. Instead, the undisputed evidence presented at the hearing contradicted their allegations and established that both the Agreement and the Association Leave Provision were supported by valid consideration, served a public purpose, and afforded a clear benefit in return. Nicks testified about the specific “give and take” that occurred during the collective-bargaining process by which the City agreed to the pool of 5,600 hours of Association Leave (a cost of approximately $200,000 per year to the City) in exchange for the way sick time was calculated for purposes of overtime, a change that Nicks estimated saves the City $500,000 to $600,000 per year. In addition, the evidence established that (1) the activities performed by firefighters on Association Leave serves predominantly public purposes, (2) the City retains sufficient control over the Association Leave, and (3) the City receives a return benefit. Nicks testified about the work done by himself and by others on Association Leave to promote firefighter and public safety, to maintain harmonious relations between labor and management, and to support certain charities along with management—all predominantly public purposes. The evidence established that the City had 35 authority to review and reject Association Leave requests by Authorized Association Representatives and that any firefighter, including Nicks, using Association Leave remains subject to City policies and orders. Nicks testified that the Department could call him back to active duty at any time. The trial court also heard evidence of the return benefits received by the City of the change to the sick-leave calculation that saves the City money on overtime and of the overall benefit of harmonious labor relations, including the facilitation of collective bargaining (which the Legislature has recognized as serving the public interest). We hold that the trial court correctly concluded that Pulliam and Wiley failed to carry their burden to marshal clear and specific evidence to establish a prima facie case on each element of their claim. See Tex. Civ. Prac. & Rem. Code §27.005(c). We are not persuaded by Pulliam and Wiley’s argument that the trial court’s ruling on the TCPA motion is inconsistent with the trial court’s later rulings. Those later rulings on the City’s pleas to the jurisdiction and the cross-motions for summary judgment were made years later. Subsequent rulings on different motions do not render incorrect the trial court’s decision on the merits of the TCPA motion, which it decided based on the record before it at the time. See Tex. Civ. Prac. & Rem. Code § 27.006(a) (“In determining whether a legal action should be dismissed under this chapter, the court shall consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based.”). Pulliam and Wiley cite no authority, and we have found none, to support the proposition that the scope of our review after final judgment of the trial court’s grant of a TCPA motion that dismisses part of a case should include not only the evidence before the trial court when it ruled on the motion, but also all evidence later adduced in the case. Cf., e.g., LMP Austin English Aire, LLC through Lafayette English Partner, LLC v. Lafayette English Apartments, LP, No. 03-21-00219-CV, ___ S.W.3d ___, 2022 WL 36 4594495, at 13 (Tex. App.—Austin Sept. 30, 2022, no pet. h.) (reviewing pleadings and affidavit when analyzing partial grant of TCPA motion that had occurred before final summary judgment); Beving v. Beadles, 563 S.W.3d 399, 404 (Tex. App.—Fort Worth 2018, pet. denied) (“In our review, we consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based.”). They do not point to any specific later-filed evidence to suggest that they established their prima facie case at the TCPA stage; they argue only that the later rulings are inconsistent with the earlier dismissal of their claim against the Association. But a denial of the City’s pleas to the jurisdiction does not establish that the trial court found that Pulliam and Wiley provided clear and specific evidence of a prima facie case of each essential element of their claim against the City, much less their claim against the Association. Moreover, there is nothing logically inconsistent about the trial court’s determining that Pulliam and Wiley failed to establish a prima facie case on each element of their claim at the TCPA stage but later in the case, after additional discovery, deciding that although the terms of the Agreement were not unconstitutional as a matter of law, Borgelt and the State had raised a fact issue on the implementation of the City’s control. 9 Because Pulliam and Wiley failed to carry their burden under the TCPA, we affirm the trial court’s grant of the Association’s TCPA motion to dismiss. 9 Pulliam and Wiley also argue that the Association’s July 2018 attempt to intervene in the lawsuit after they amended their petition to challenge the 2017-2022 Collective Bargaining Agreement (and left the Association as a named party, ostensibly to preserve their appeal) means that the trial court should not have granted the TCPA motion in 2017. We are not persuaded that the Association’s attempt to ensure that Pulliam and Wiley were not allowed to seek the same relief from them as to a new agreement renders the trial court’s 2017 decision wrong. 37 D. Pulliam and Wiley Have Not Established that the TCPA Sanctions Award Constituted an Abuse of Discretion After the trial court granted the Association’s TCPA motion to dismiss in February 2017, and following the various appellate proceedings and other proceedings in the trial court and an agreement by the parties to postpone the issue until after pending dispositive issues could be heard, the Association filed its motion for attorneys’ fees and sanctions in August 2018. The Association sought attorneys’ fees in the amount of $115,250 and sanctions in the amount of $230,500 (two times the amount of attorneys’ fees sought). On April 19, 2019, the Association filed a notice of supplemental evidence in support of its motion for fees and sanctions, requesting that the trial court take into account in its award of fees that the Association had incurred over 19 additional hours of attorneys’ fees responding to Pulliam and Wiley’s December 2018 motion to reconsider the 2017 TCPA order and October 2018 threat to file a TCPA motion against the Association’s motion for fees. With the notice, the Association submitted deposition testimony from Pulliam and Wiley that it asserted further supported its contention that Pulliam and Wiley undertook the lawsuit for political reasons and would not be deterred from similar conduct in the future without substantial monetary sanctions. On May 1, 2019, the trial court heard the Association’s application for attorneys’ fees and sanctions under the TCPA. 10 On July 18, 2019, the trial court granted the motion and awarded fees in the amount of $115,250 and sanctions in the amount of $75,000. On appeal, Pulliam and Wiley challenge the trial court’s award of sanctions as excessive and punitive. They further argue that no sanctions should be awarded but advocate that if this Court upholds some 10 There is not a hearing transcript in the appellate record. 38 sanctions award, a nominal amount of sanctions would be a sufficient deterrent. 11 The TCPA requires an award of costs, attorneys’ fees, and sanctions when a motion to dismiss is granted: If the court orders dismissal of a legal action under this chapter, the court shall award to the moving party: (1) court costs, reasonable attorney’s fees, and other expenses incurred in defending against the legal action as justice and equity may require; and (2) sanctions against the party who brought the legal action as the court determines sufficient to deter the party who brought the legal action from bringing similar actions described in this chapter. Tex. Civ. Prac. & Rem. Code § 27.009(a). We review sanctions awards in TCPA cases for abuse of discretion. Landry’s, Inc. v. Animal Legal Def. Fund, 631 S.W.3d 40, 46 (Tex. 2021). A trial court abuses its discretion if it acts “without reference to guiding rules and principles to such an extent that its ruling was arbitrary or unreasonable.” Id. (quoting Nath v. Texas Child.’s Hosp., 446 S.W.3d 355, 361 (Tex. 2014)). A trial court does not abuse its discretion when its sanctions award is based on conflicting evidence and some evidence of substantive and probative character supports its decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009); see also Rich v. Range Res. Corp., 535 S.W.3d 610, 614 (Tex. App.—Fort Worth 2017, pet. denied). Moreover, “the statute does not specify a particular formula, amount, or guideline for determining the sanctions amount other than to say that the amount is to be sufficient to deter the party who brought the legal action from bringing similar actions.” Tatum v. Hersh, 559 S.W.3d 11 Pulliam and Wiley do not contend that the attorneys’ fees awarded by the trial court fail to satisfy the statutory requirement that the attorneys’ fees are “reasonable.” Tex. Civ. Prac. & Rem. Code § 27.009(a)(1). 39 581, 587 (Tex. App.—Dallas 2018, no pet.) (op. on remand). Thus, the TCPA “gives the trial court broad discretion to determine what amount is sufficient to deter the party from bringing similar actions in the future.” Kinney v. BCG Att’y Search, Inc., No. 03-12-00579-CV, 2014 WL 1432012 at 11 (Tex. App.—Austin Apr. 11, 2014, pet. denied) (mem. op. on reh’g) (emphasis added). Pulliam and Wiley argue that the trial court abused its discretion because the record contains no evidence that they have ever filed a frivolous lawsuit or that they have indicated any intention to file a meritless legal action in the future. However, the trial court had before it evidence that neither Pulliam nor Wiley had read the collective-bargaining agreement that they were challenging before they filed suit against the Association. At his deposition, Wiley admitted that he still had never read either the 2015 or the 2017 Agreement and that he had no knowledge of the negotiations between the City and the Association. He further admitted that even more than two years into the litigation, he had never sought to research the substance of the negotiations. The Association argues that Pulliam and Wiley’s failure to do this basic research provided evidence that they were willing to file politically expedient suits, regardless of whether those suits are meritorious. The trial court also had before it evidence that both Pulliam and Wiley had motives for filing suit against the Association that go beyond their alleged concern as taxpayers. Pulliam testified that he “practiced labor and employment laws for many years and ha[s] written about public employee bargaining. I’m not a big fan of public employee bargaining.” He further admitted that “as a matter of public policy I do not believe that public employee bargaining is beneficial to taxpayers or to, to democracy for that matter.” In addition, Pulliam admitted to writing on his blog about “lawfare,” the practice of “pursuing a political goal through the legal 40 system, either criminally or civilly, by, you know, indirectly accomplishing a particular end,” although he does not consider this lawsuit to be lawfare. He also admitted to writing about the cost of a similar provision in a contract between the City of San Antonio and its public-employee union and admitted that “it’s possible” he would file a similar lawsuit in San Antonio if he became a taxpayer there. 12 Wiley admitted to using the lawsuit as publicity to support his political platform as a “fiscal conservative” seeking “union reform” and “right-to-work laws” in Texas. In 2016, when this suit was initially filed, and again in 2018, Wiley ran in the Republican primaries for seats in the Texas House of Representatives. Soon after the suit was filed in September 2016, Wiley sent an email blast about the suit to his political listserv of about 9,000 to 10,000 individuals, including members of the press, who had expressed interest in his campaign or “who politically may have been interested in supporting my campaign.” The email contained a graphic of a “little thief running away with a bag of money,” which Wiley selected himself, and stated that “[i]f we are victorious, not only will our tax dollars no longer be used for private union activities, it will send a strong message to the City of Austin that they are not above the law.” Wiley also admitted to including information about his stance on “public spending” and the lawsuit on his campaign website when he first announced his candidacy. He admitted that he publicized the lawsuit because he “thought it would help [him] in [his] campaign.” At the time of his deposition his campaign’s Facebook page, which he created “to promote [his] political campaign,” stated that “[i]n 2016, Jay 12 The Court notes that, according to Borgelt’s testimony at trial, he joined the lawsuit because Pulliam was moving out of Austin and asked if he would be interested in helping Pulliam pursue the case. 41 sued the City of Austin over its unconstitutional use of tax dollars to pay union members for political work.” While Pulliam and Wiley argue that the record contains no evidence that they have ever filed a frivolous lawsuit or that they intend to file a meritless lawsuit or another lawsuit against the Association in the future, “[i]t was the trial judge’s prerogative to weigh this evidence along with all the other evidence in determining, as a matter of discretion, how large the sanction needed to be to accomplish its statutory purpose” of deterrence. American Heritage Cap., LP v. Gonzalez, 436 S.W.3d 865, 881 (Tex. App.—Dallas 2014, no pet.), disapproved of on other grounds by Hersh v. Tatum, 526 S.W.3d 462 (Tex. 2017). In addition to the evidence referenced above, both Pulliam and Wiley admitted that they had never been billed by or paid any money to the attorneys at the organizations representing Pulliam and Wiley in the lawsuit. Thus, absent any monetary sanctions awarded against them here, they have no personal monetary incentive that would preclude them from filing similar suits in the future. Moreover, the trial court could have considered the history of the litigation, including Pulliam and Wiley’s unsuccessful delayed request for reconsideration of the TCPA order and their threat to file a TCPA motion in response to the Association’s motion for TCPA attorneys’ fees and sanctions. See LMP Austin English, ___ S.W.3d___, 2022 WL 4594495, at 18 (explaining that trial court may consider litigation’s history and parties’ conduct when awarding sanctions). Finally, the $75,000 award of sanctions is substantially less than the $230,000 requested by the Association and is also substantially less than the award of $115,250 in attorneys’ fees. See id. (considering ratio of sanctions to attorneys’ fees when determining whether sanctions award was abuse of discretion and holding award that was nearly equal to attorneys’ fee award was not abuse of discretion). 42 Given the broad discretion provided by Section 27.009 and the conflicting evidence about potential deterrence, we conclude that the trial court did not abuse its discretion by determining that a $75,000 sanction was required to deter further similar actions by Pulliam or Wiley. See Tex. Civ. Prac. & Rem. Code § 27.009(a)(2); ADB Int., LLC v. Wallace, 606 S.W.3d 413, 446 (Tex. App.—Houston [1st Dist.] 2020, pet. denied) (upholding $125,487.50 TCPA sanction and citing American Heritage Capital, 436 S.W.3d at 881). E. Pulliam and Wiley Have Not Established That the TCPA Order Violates Their Constitutional Right to Bring This Lawsuit Pulliam and Wiley argue that the TCPA order and the order granting attorneys’ fees and sanctions against them violates their and their attorneys’ First and Fourteenth Amendment rights and “upends the purpose of the TCPA.” They contend that the sanctions order “punish[es] citizens for exercising their right to prosecute constitutional claims in court.” They contend that we must examine the trial court’s grant of attorneys’ fees and sanctions after resolution of the TCPA motion to determine whether it is narrowly tailored to advance a compelling government interest, citing the United States Supreme Court’s determination that the state of Virginia’s interest in regulating traditionally illegal practices of barratry, maintenance, and champerty did not justify Virginia’s prohibition of the activities of the National Association for the Advancement of Colored People. See National Ass’n for Advancement of Colored People v. Button, 371 U.S. 415, 428-29, 439 (1963). We disagree with Pulliam and Wiley that the TCPA’s provision establishing that the prevailing party on a motion to dismiss is entitled to attorneys’ fees and sanctions impinges on their or their attorneys’ First and Fourteenth Amendment rights. The TCPA’s stated purpose is to “encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to 43 the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury.” Tex. Civ. Prac. & Rem. Code § 27.002 (emphasis added). The provision establishing a mandatory award of fees and sanctions is not imposed on parties before they may institute litigation, nor is it imposed on them if they meet their TCPA burden of establishing by “clear and specific evidence” the elements of their prima facie case so that they may avoid dismissal. Id. §§ 27.005(c), .009(1). Instead, after resolution of the motion to dismiss, the TCPA “shifts litigation costs from the prevailing party (who met its burden to show by a preponderance of the evidence that the legal action is based on, related to, or is in response to that party’s exercise of protected rights) to the party that failed to meet its burden.” Memorial Hermann Health Sys. v. Khalil, No. 01-16-00512-CV, 2017 WL 3389645, at *16 (Tex. App.— Houston [1st Dist.] Aug. 8, 2017, pet. denied) (mem. op.). “Moreover, the TCPA includes a countermeasure that permits fee-shifting in the event a trial court finds that a motion to dismiss was frivolous or filed solely to delay.” Id. (citing Tex. Civ. Prac. & Rem. Code § 27.009(b) and concluding that TCPA’s fee-award provision is not unreasonable or arbitrary when balanced with statute’s purpose and does not violate open-courts doctrine). We conclude that Section 27.009 does not preclude or even chill the exercise of a litigant’s First or Fourteenth Amendment rights; instead, it shifts litigation costs after the litigant’s claim is determined not to be meritorious. We overrule Pulliam and Wiley’s issue and affirm the trial court’s TCPA order and its order awarding fees and sanctions against Pulliam and Wiley. 44 CONCLUSION Having overruled the appellants’ issues, we affirm the trial court’s final judgment. __________________________________________ Gisela D. Triana, Justice Before Justices Baker, Triana, and Kelly Affirmed Filed: November 22, 2022 45	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488567/	IN THE COMMONWEALTH COURT OF PENNSYLVANIA Steven K. Maxwell, : Petitioner : : v. : No. 16 C.D. 2022 : Submitted: September 30, 2022 Pennsylvania Parole Board, : Respondent : BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ELLEN CEISLER, Judge HONORABLE MARY HANNAH LEAVITT, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY SENIOR JUDGE LEAVITT FILED: November 22, 2022 Steven K. Maxwell (Maxwell) petitions for review of an adjudication of the Pennsylvania Parole Board (Parole Board) denying his request for administrative relief from its decision to recommit him as a convicted parole violator. On appeal, Maxwell argues that his recommitment as a convicted parole violator under Section 6138(a)(1.1) of the Prisons and Parole Code (Parole Code)1 violated the constitutional prohibition against ex post facto laws. He argues that Section 6138(a)(1.1), which authorizes recommitment for summary offenses, became effective after he committed his summary offenses and, thus, cannot be applied to him. Discerning no merit to this argument, we affirm the Parole Board’s adjudication. The relevant facts are not in dispute. Maxwell was convicted of aggravated assault with a deadly weapon and sentenced, with a maximum sentence 1 Act of August 11, 2009, P.L. 147, as amended, added by the Act of December 18, 2019, P.L. 776, No. 115 (Act 115), 61 Pa. C.S. §6138(a)(1.1). date of July 16, 2024. On January 27, 2021, Maxwell was paroled to a community corrections center in Harrisburg, Pennsylvania. Subsequently, he was successfully discharged from the community corrections center to an approved home plan. On April 12, 2021, the Parole Board received notification from the Harrisburg Police Department that it issued citations to Maxwell for incidents of public drunkenness that occurred on March 26, 2021, and March 27, 2021. The Parole Board then received notification from the Lower Swatara Township Police Department that it had filed criminal charges against Maxwell for flight to avoid apprehension, possession of a controlled substance, possession of drug paraphernalia, and public drunkenness that occurred on April 17, 2021. On April 22, 2021, the Parole Board declared Maxwell delinquent effective April 15, 2021, and a warrant was issued for his arrest and detention. On April 23, 2021, Amtrak Police arrested Maxwell on the Parole Board’s warrant and issued him a citation for public drunkenness. The Parole Board detained Maxwell pending disposition of the criminal charges. Certified Record at 13 (C.R. __). On April 27, 2021, Maxwell pled guilty to public drunkenness, a summary offense, in a magisterial district court. C.R. 23-26. As a result of his guilty plea, the Parole Board issued a Notice of Charges and Hearing to Maxwell. Maxwell waived his right to a parole revocation hearing, admitting that he had pled guilty to public drunkenness. On July 8, 2021, Maxwell pled guilty to public drunkenness, intentional possession of controlled substances by a person not registered, and use/possession of drug paraphernalia for the offense that occurred on April 17, 2021. C.R. 50-53. The Parole Board then issued another Notice of Charges and Hearing, charging 2 Maxwell with a new criminal conviction for public drunkenness, a summary offense. Again, Maxwell waived his right to a revocation hearing, admitting the conviction. On July 30, 2021, the Parole Board issued a decision recommitting Maxwell as a convicted parole violator to serve six months’ backtime for his two summary convictions. His maximum sentence date was recalculated as October 10, 2024. On August 20, 2021, Maxwell filed an administrative appeal of his recommitment as a convicted parole violator. Maxwell stated that the Parole Board erred because the two guilty pleas were for summary offenses and entered in a magisterial district court and not a court of record. By decision mailed December 17, 2021, the Parole Board denied Maxwell’s request for administrative relief. It explained, in part, that Maxwell waived his right to a revocation hearing and counsel and admitted the convictions listed on the notices. On this basis, the Parole Board revoked his parole. Additionally, the Parole Board determined that its decision was supported by substantial evidence, did not constitute an error of law, and did not violate Maxwell’s constitutional rights. Maxwell appealed. Appeal On appeal,2 Maxwell argues that the Parole Board’s recommitment of him as a convicted parole violator violated the Ex Post Facto Clause of the United 2 This Court’s review determines whether the Parole Board’s adjudication is supported by substantial evidence, whether an error of law has been committed, or whether constitutional rights have been violated. Section 704 of the Administrative Agency Law, 2 Pa. C.S. §704; Moroz v. Pennsylvania Board of Probation and Parole, 660 A.2d 131, 132 (Pa. Cmwlth. 1995). 3 States Constitution.3 He contends that the amendment to Section 6138(a)(1.1), on which the Parole Board based its decision, was not in effect when he committed the offenses. The Parole Board responds that Maxwell waived his ex post facto claim because he did not raise it in his request for administrative relief. In the alternative, the Parole Board counters that Maxwell’s ex post facto claim fails because it was based on the faulty premise that Section 6138(a)(1.1) was not enacted until after he committed his new crimes. Analysis We begin with the Parole Board’s waiver argument. It asserts that because Maxwell did not raise his ex post facto claim in his administrative appeal, the issue is waived. Section 703(a) of the Administrative Agency Law states that a party “may not raise upon appeal any other question not raised before the agency.” 2 Pa. C.S. §703(a). Similarly, Pennsylvania Rule of Appellate Procedure 1551(a) states that “[o]nly questions raised before the government unit shall be heard or considered[.]” PA. R.A.P. 1551(a). Accordingly, an issue not raised before the Parole Board will not be considered by this Court on appeal. McCaskill v. Pennsylvania Board of Probation and Parole, 631 A.2d 1092, 1094-95 (Pa. Cmwlth. 1993). On his administrative remedies form, Maxwell checked the box indicating that his reasons for appeal included a constitutional claim and advised the 3 Article I, Section 10 of the United States Constitution provides, in pertinent part: “No State shall . . . pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.” U.S. CONST. art. I, §10. 4 Parole Board to “see attached motion.” C.R. 76. The attached motion, styled as a “Motion and Request for Reconsideration of Parole Denial,” stated as follows: Mr. Maxwell summary offense conviction by a magisterial district judge, or a common pleas judge sitting as a magisterial district judge, is not a conviction in a court of record “that is where the parole board made [its] mistake at[. T]he Pennsylvania Board of Probation and Parole is not authorized to recommit a parolee as a convicted parole violator for such conviction. C.R. 77-78 (emphasis in original). This is a close case, but we conclude that the above-described appeal form fairly encompasses Maxwell’s ex post facto argument. First, he checked the box on the administrative remedies form that he was raising a constitutional claim. Second, although the appeal form did not specifically identify Section 6138(a)(1.1) of the Parole Code, it did recite that the law did not permit a recommitment for summary convictions. This statement together with the check mark was sufficient to preserve the ex post facto argument. On the merits, Maxwell argues that to apply Section 6138(a)(1.1) of the Parole Code to him is a violation of the Ex Post Facto Clause of the United States Constitution. Maxwell explains Section 6138(a)(1.1) was enacted after he committed his offenses, and it is penal by virtue of the fact that it increased the punishment for recommitment and possible loss of credit for street time. An ex post facto law is one which is “adopted after the complaining party committed the criminal acts and ‘inflicts a greater punishment than the law annexed to the crime, when committed.’” Coady v. Vaughn, 770 A.2d 287, 289 n.2 (Pa. 2001) (quoting California Department of Corrections v. Morales, 514 U.S. 499, 504–06 (1995)). As our Supreme Court has explained, the Ex Post Facto Clause 5 forbids the Congress and the States to enact any law “which imposes a punishment for an act which was not punishable at the time it was committed; or imposes additional punishment to that then prescribed.” Through this prohibition, the Framers sought to assure that legislative Acts give fair warning of their effect and permit individuals to rely on their meaning until explicitly changed. The ban also restricts governmental power by restraining arbitrary and potentially vindictive legislation. Commonwealth v. Rose, 127 A.3d 794, 798 (Pa. 2015) (quoting Weaver v. Graham, 450 U.S. 24, 28-29 (1981)). In order for a law to be deemed an ex post facto law, “‘two critical elements’ must be met: ‘it must be retrospective, that is, it must apply to events occurring before its enactment, and it must disadvantage the offender affected by it.’” Rose, 127 A.3d at 799 (quotation omitted). Section 6138(a)(1) of the Parole Code governs the recommitment of parolees who have committed new criminal offenses while on parole, and it states: The board may, at its discretion, revoke the parole of a paroled offender if the offender, during the period of parole or while delinquent on parole, commits a crime punishable by imprisonment, for which the offender is convicted or found guilty by a judge or jury or to which the offender pleads guilty or nolo contendere at any time thereafter in a court of record. 61 Pa. C.S. §6138(a)(1) (emphasis added). Section 6138(a)(1) has been interpreted as not authorizing the recommitment of a parolee as a convicted parole violator based on a summary offense. See Hufmen v. Board of Probation and Parole, 58 A.3d 860 (Pa. Cmwlth. 2012). However, on December 18, 2019, the General Assembly amended Section 6138(a), by adding a new subsection (1.1). It authorized the Parole Board to recommit parolees who plead guilty to certain summary offenses before a magisterial district judge. Section 6138(a)(1.1) states: 6 In addition to paragraph (1), a parolee under the jurisdiction of the board released from a correctional facility who, during the period of parole or while delinquent on parole, commits a crime punishable by imprisonment for which the parolee is convicted or found guilty by a judge or jury or to which the parolee pleads guilty or nolo contendere or of any misdemeanor of the third degree or of any of the following offenses where graded as a summary offense, may at the discretion of the board be recommitted as a parole violator: (i) Possession of a firearm in a court facility under 18 Pa. C.S. §913(b)(3) (relating to possession of firearm or other dangerous weapon in court facility). (ii) Harassment under 18 Pa. C.S. §2709 (relating to harassment). (iii) Retail theft under 18 Pa. C.S. §3929 (relating to retail theft). (iv) Disorderly conduct under 18 Pa. C.S. §5503 (relating to disorderly conduct). (v) Public drunkenness under 18 Pa. C.S. §5505 (relating to public drunkenness and similar misconduct). (vi) Cruelty to animals under 18 Pa. C.S. §5533 (relating to cruelty to animal). (vii) Aiding or abetting a minor to commit truancy under 18 Pa. C.S. §6301 (relating to corruption of minors). (viii) Selling or furnishing nonalcoholic beverages to minors under 18 Pa. C.S. §6310.7 (relating to selling or furnishing nonalcoholic beverages to persons under 21 years of age). 61 Pa. C.S. §6138(a)(1.1) (emphasis added). Section 6138(a)(1.1) became effective in 120 days, or on April 17, 2020. Maxwell’s offenses occurred in April of 2021, which was after the effective date of Section 6138(a)(1.1). Maxwell committed his summary offenses for public drunkenness almost a year after Section 6138(a)(1.1) became effective. 7 Indeed, Section 6138(a)(1.1) was in effect when Maxwell was paroled. The application of Section 6138(a)(1.1) to Maxwell does not violate the Ex Post Facto Clause. However, Maxwell argues that the Parole Board applied amendments to Section 6138(a) of the Parole Code made by the Act of June 30, 2021, P.L. 260, No. 59 (Act 59). That later amendment revised Section 6138(a) and became effective in 2021, after Maxwell committed his summary offenses. Act 59 amended Section 6138(a) as follows: (a) Convicted violators.-- (1) [A parolee under the jurisdiction of the board released from a correctional facility who,] The board may, at its discretion, revoke the parole of a paroled offender if the offender, during the period of parole or while delinquent on parole, commits a crime punishable by imprisonment, for which the [parolee] offender is convicted or found guilty by a judge or jury or to which the [parolee] offender pleads guilty or nolo contendere at any time thereafter in a court of record[, may at the discretion of the board be recommitted as a parole violator]. (1.1) In addition to paragraph (1), a parolee under the jurisdiction of the board released from a correctional facility who, during the period of parole or while delinquent on parole, commits a crime punishable by imprisonment for which the parolee is convicted or found guilty by a judge or to which the parolee pleads guilty or nolo contendere or of any misdemeanor of the third degree or any of the following offenses where graded as a summary offenses, may at the discretion of the board by recommitted as a parole violator: (i) Possession of a firearm in a court facility under 18 Pa. C.S. §913(b)(3) (relating to possession of firearm or other dangerous weapon in court facility). (ii) Harassment under 18 Pa. C.S. §2709 (relating to harassment). 8 (iii) Retail theft under 18 Pa. C.S. §3929 (relating to retail theft). (iv) Disorderly conduct under 18 Pa. C.S. §5503 (relating to disorderly conduct). (v) Public drunkenness under 18 Pa. C.S. §5505 (relating to public drunkenness and similar misconduct). (vi) Cruelty to animals under 18 Pa. C.S. §5533 (relating to cruelty to animal). (vii) Aiding or abetting a minor to commit truancy under 18 Pa. C.S. §6301 (relating to corruption of minors). (viii) Selling or furnishing nonalcoholic beverages to minors under 18 Pa. C.S. §6310.7 (relating to selling or furnishing nonalcoholic beverages to persons under 21 years of age). See Act 59, Section 21 (highlighting and underscoring in original); https://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=HT M&sessYr=2021&sessInd=0&billBody=S&billTyp=B&billNbr=0411&pn=0967 (last visited November 22, 2022). In Pennsylvania, brackets are used to identify language to be abrogated and underscoring identifies all new language. 101 Pa. Code §15.222.4 Act 59 amended Section 6138(a), but it did not change Section 6138(a)(1.1). “Portions of the statute which were not altered by the amendment shall be construed as effective from the time of their original enactment[.]” 1 Pa. C.S. §1953. As can be seen, Act 59 made no change at all to subsection (1.1) of Section 4 Section 15.222 states: Language intended to be taken out of an existing provision is enclosed in brackets and new language to be added is underscored . . . . While the consequences of failure to underscore may not be serious, it is very important to the proper understanding of the bill. If language is removed and added at the same place, the language to be removed always come first, followed by the language added. 101 Pa. Code §15.222. 9 6138(a), and it made only stylistic changes to subsection (1) that were not substantive. Act 59 also amended Section 102 of the Parole Code, adding the definition of “offender.”5 This change does not compel a different result because Section 6138(a)(1.1) uses the term “parolee,” not “offender.” In sum, Maxwell pled guilty to public drunkenness, a summary offense, before a magisterial district judge. Section 6138(a)(1.1) of the Parole Code authorized the Parole Board to revoke his parole. The 2019 amendment giving the Parole Board this authority was not applied retroactively to Maxwell because it was enacted before Maxwell was paroled and committed his offenses. The 2021 amendment, Act 59, effected revisions that had no impact upon Section 6138 (a)(1.1) of the Parole Code. For these reasons, we affirm the adjudication of the Parole Board. ____________________________________________ MARY HANNAH LEAVITT, President Judge Emerita 5 “Offender” is: An individual that has been convicted or found guilty of a criminal offense by a judge or jury or an individual that pleads guilty or nolo contendere to a criminal offense at any time in a court of record or before a magisterial district justice under section 6138(a)(1.1) (relating to violation of terms of parole). Act 59, Section 7 (underscoring in original); https://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=HTM&sessYr=2 021&sessInd=0&billBody=S&billTyp=B&billNbr=0411&pn=0967 (last visited November 22, 2022). 10 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Steven K. Maxwell, : Petitioner : : v. : No. 16 C.D. 2022 : Pennsylvania Parole Board, : Respondent : ORDER AND NOW, this 22nd day of November, 2022, the adjudication of the Pennsylvania Parole Board, mailed December 17, 2021, is AFFIRMED. ____________________________________________ MARY HANNAH LEAVITT, President Judge Emerita	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488565/	IN THE NEBRASKA COURT OF APPEALS MEMORANDUM OPINION AND JUDGMENT ON APPEAL (Memorandum Web Opinion) IN RE GUARDIANSHIP OF NOVACEK NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E). IN RE GUARDIANSHIP OF GLORIA JUNE NOVACEK, AN INCAPACITATED PERSON. JASON D. NOVACEK ET AL., APPELLEES, V. JODY L. NOVACEK, APPELLANT. Filed November 22, 2022. No. A-22-201. Appeal from the County Court for Adams County: MICHAEL P. BURNS, Judge. Affirmed. Jody Novacek, pro se. Pierce D. Fiala, of Skalka, Baack & Fiala Law Firm, for appellee, Jason D. Novacek. MOORE, RIEDMANN, and BISHOP, Judges. RIEDMANN, Judge. INTRODUCTION An adult child of an incapacitated person appeals the decision of the county court for Adams County establishing a permanent guardianship and conservatorship for her mother. She assigns several errors relating to both the temporary order and permanent order of guardianship and conservatorship. We affirm. BACKGROUND Jason D. Novacek, son of Gloria June Novacek, filed a petition for the establishment of a temporary and permanent guardianship for his mother, Gloria, on April 28, 2021, and requested that his brother, Jay M. Novacek, be appointed as guardian and conservator. The petition identified Gloria’s four children: Jason, Jay, James P. Novacek, and Jody L. Novacek. It alleged that an emergency existed and requested that a temporary guardian and conservator be appointed pending -1- notice and hearing on the petition for a permanent guardian and conservator. It asserted Gloria required assistance in making decisions about her well-being, in making arrangements for medical care, and was an impressionable person with a history of being financially abused. Jason filed his own affidavit and an affidavit of his wife in support of his ex parte application. The court entered an order on April 29, 2021, appointing Jay as temporary guardian and conservator. It found an emergency existed because Gloria is an incapacitated person under the Nebraska Probate Code and requires assistance with arranging medical care, financial transactions, maintaining her overall safety, and protecting herself from being taken advantage of financially. The court appointed Sara J. Bockstadter as guardian ad litem (GAL) for Gloria on May 10, 2021. She was appointed special process server for purposes of delivering the pleadings to Gloria. On May 28, Bockstadter served Gloria with a copy of the petition for appointment of temporary guardian and conservator and permanent guardian and conservator, order appointing a GAL, order appointing special process server, order appointing temporary guardian and temporary conservator, letters of temporary guardian and temporary conservator, and an objection to the appointment of a temporary guardian and temporary conservator with notice of hearing. We do not have a copy of the objection in our record, but it appears that an objection to the petition for appointment was filed by Jody. On June 7, 2021, Jody filed a motion to withdraw her objection to the appointment of a temporary guardian and temporary conservator. On June 11, the court extended the temporary orders and letters until October. The hearing on Jason’s petition for guardian and conservator was scheduled for September 24 and October 1. This was later continued to January 21, 2022, upon Jody’s request for additional time to prepare a response to the GAL’s report. Discovery was to be completed by November 30, 2021. The parties entered into a stipulation on January 6, 2022, for release of medical records from Dr. Lorraine Edwards and Dr. Paul Wibbels, subject to a protective order. Jody filed a motion to continue the trial on January 19, 2022, for the reason that she had not received medical records from the facility in which Gloria was living. Following a hearing, the court denied the motion, but ordered that the GAL provide copies of the medical records she received from the facility by the next morning, January 20. Trial proceeded on January 21 and the court received into evidence the May 6, 2021, through January 20, 2022, notes of the assisted living facility in which Gloria was residing, Edwards’ notes from March 10, 2017, through August 7, 2020, and Wibbels’ notes from April 18, 2019, through June 7, 2021. The following evidence was adduced. Jason is Gloria’s youngest child. He first noticed Gloria having memory issues before his father passed away in January 2019. Gloria had been diagnosed with dementia and Alzheimer’s in 2017. He noticed a significant decline in Gloria’s cognitive functioning between August 2020 and April 2021. During that time, Gloria was living in an apartment complex. In February 2021, Jason observed evidence near the front and back doors of Gloria’s apartment indicating that Gloria had been scooping out the contents of her toilet and disposing of it in her yard. He was advised by the maintenance staff that Gloria was putting items down the toilet, causing it to stop up. They indicated that they may contact adult social services due to their concern that she was unable to care for herself. -2- Gloria acknowledged that she had memory issues, so she and Jason began investigating different places in the area where she might ultimately live. They viewed the facility where she currently resides on several occasions as a potential placement. On April 20, 2021, Jason accompanied his mother to the facility for her to apply for admission. Jason’s brother, Jay, had been appointed power of attorney for Gloria in 2019, but because he lived in Texas, Jason facilitated finding Gloria a place to live. Gloria signed the paperwork that day to move in on April 22. On April 22, 2021, Jody provided the facility with a document purporting to appoint her as her mother’s attorney-in-fact that had been signed the prior day. She advised the executive director of the facility, Jessica Soucie, that Gloria would not be residing there. Soucie described Jody’s behavior as “very escalated” and “verbally disrespectful.” Consequently, Soucie asked her to leave the building. Gloria did not move in until May 6. Jason filed the petition for appointment of a guardian and conservator on April 28, 2021, and recommended Jay to fill those roles because Jay had been appointed Gloria’s attorney-in-fact with the agreement of all the children. Because of this, Jason thought Jay was the natural choice for appointment. He was aware that Jody preferred that Gloria live with her. Jason opined that it was in Gloria’s best interests that Jay be appointed her guardian and conservator. When asked if Gloria living with Jody would be an option, Jason responded, “I don’t believe my mother would enjoy that at all. In fact, she has made statements to me that she does not want to live with Jody.” He elaborated that there was over a 20-year period of time from 1996 through 2016 in which Jody refused to have contact with their parents. Bockstadter, an attorney, is the court-appointed GAL for Gloria. She was also appointed as the special process server, so she delivered the pleadings to Gloria. Additionally, based upon conversations with Gloria, she authored a report regarding Gloria’s mental capacity and offered an opinion as to whether she should be appointed a guardian and conservator. In making that decision, she also obtained Gloria’s medical records and visited with people in Gloria’s life. Bockstadter opined that it was in Gloria’s best interest that she continue to reside in the facility in which she currently resides and that a full guardian and conservator be appointed for her. She further opined that Jay was a proper person to be appointed. She did not believe that Jody could provide the necessary care for Gloria on a long-term basis. Jay lives in Joshua, Texas, and was appointed the temporary guardian and conservator on April 29, 2021. In that position, he has restricted Jody’s contact with Gloria on two occasions. When Soucie originally banned Jody from the facility in April 2021, Jay requested that she be allowed to visit, but requested that Jody not be allowed to remove Gloria from the facility. On May 7, 2021, Jay learned that Jody had upset Gloria by telling her that her sons were taking all of her money. Consequently, Jay restricted Jody’s contact with Gloria, but within a couple of days he called the facility to ask that her contact be unrestricted as long as it was in Gloria’s best interest. In October, the facility began requiring that all of Jody’s visits be supervised because Gloria was upset and confused following visits from Jody. Jay opined that his mother needed a permanent guardian and conservator and that he was a suitable person to serve those roles. To have Gloria move in with Jody and have nursing staff come to the house “would be a horrible situation” because Gloria has a hard time remembering Soucie, who she sees nearly every day. Having multiple care providers would be more confusing -3- to Gloria. And Jay believed it would be “impossible” for Jody to do it on her own 24 hours a day, 365 days a year. Soucie, the executive director of the assisted living facility in which Gloria was residing at the time of trial, testified that she has a bachelor’s degree in psychology, a master’s degree in mental health therapy, and is a licensed nursing home administrator and certified dementia practitioner. She first met Gloria when Gloria came to the facility with Jason and his daughter to complete paperwork for residency at the facility. Based upon her interaction with Gloria at that time, Soucie concluded that Gloria would qualify for assisted living but that memory care treatment was something to keep in mind. At the time of trial, Gloria was living on the memory care floor. Gloria is 83 years of age. Soucie testified that Gloria is unable to care for herself and requires “24/7 care.” The facility has implemented a care plan in which staff checks on her every 2 hours during waking hours and every hour at night to deal with issues regarding Gloria barricading her door, spreading feces, and dumping her commode in inappropriate places. In Soucie’s professional opinion, Gloria is cognitively impaired and shows many of the typical traits of having dementia. She further opined that based upon her observations, Jay would be a proper person to serve as Gloria’s guardian and conservator and that such appointment would be in Gloria’s best interest. Soucie further testified that she believed living in the memory care unit was the least restrictive alternative to maintaining Gloria’s success. She explained that living with Jody would diminish Gloria’s quality of life because of caregiver burnout and that it would be difficult for one person to provide all of the services that a facility does. Jody testified that she lives in the same city as her mother. Jody operates a seasonal fireworks stand and an online retail company. She disputed Jason’s testimony that there was a 20-year period of time when she did not have contact with her parents but conceded there have been “periods of time” when she was not in contact with them. She requested that Gloria be allowed to live with her rather than have a guardian appointed for her. She also suggested that a bill-paying service could be set up rather than having a conservator appointed. Jody admitted to having been convicted of fraud as it related to her business dealings. The court entered a written order finding that clear and convincing evidence supported that a permanent, full guardianship and conservatorship was in the best interest of Gloria. It further determined that Jay was best suited to be appointed. It granted the petition for guardianship and conservatorship. Jody appeals. ASSIGNMENTS OF ERROR Jody assigns eight errors, which, restated and consolidated are as follows. The county court erred in (1) scheduling a hearing on the petition for appointment of temporary guardian and conservator and permanent guardian and conservator without notice to her and Gloria, (2) appointing a temporary guardian and conservator without an evidentiary hearing, (3) failing to limit the letters of temporary guardianship and conservatorship to the emergency issues, (4) failing to assign a qualified visitor or physician to evaluate Gloria, (5) failing to require Gloria be served copies of all documents, and (6) failing to grant Jody’s motion to continue. -4- STANDARD OF REVIEW Standing is a jurisdictional component of a party’s case because only a party who has standing may invoked the jurisdiction of a court. In re Guardianship of Barnhart, 290 Neb. 314, 859 N.W.2d 856 (2015). The question of jurisdiction is a question of law. Id. When reviewing questions of law, we resolve the questions independently of the conclusion reached by the lower court. Id. We review a decision denying a motion for a continuance for abuse of discretion. Weiss v. Weiss, 260 Neb. 1015, 620 N.W.2d 744 (2001). ANALYSIS Jason asserts that we do not have jurisdiction over this appeal. Citing In re Conservatorship of Franke, 292 Neb. 912, 875 N.W.2d 408 (2016), he argues that the Nebraska Supreme Court has determined under Neb. Rev. Stat. § 30-1601(2) (Reissue 2016) a protected person’s child only has standing to appeal a final order in a guardianship or conservatorship proceeding if the child filed an objection, the court appointed a guardian or conservator, the court’s order affected a substantial right of the child, and the child’s issues raised on appeal are limited to the sole issues resolved by the final order. We disagree. Jody filed an objection to the appointment of a temporary guardian and conservator, and although that objection was subsequently withdrawn, she remained an objector. Her status is evidenced by the record. At the beginning of the hearing on January 21, 2022, the court noted appearances, stating “We have an interested party – an objecting party – to the proposed or nominated individual to be the permanent guardian and conservator, Ms. Jody Novacek, present with her attorney.” Jody was also recognized by Jason’s attorney as an objecting party at trial when he stated to the court that “[t]he objecting party, Jody Novacek, has not requested to be appointed as guardian or conservator.” However, due to the absence of a filed objection, Jason contends Jody is without standing to appeal. Standing is a jurisdictional component of a party’s case because only a party who has standing may invoke the jurisdiction of a court. The question of jurisdiction is a question of law. In re Guardianship of Barnhart, supra. Section 30-1601(2) states “An appeal may be taken by any party and may also be taken by any person against whom the final judgment or final order may be made or who may be affected thereby.” It is true that in In re Conservatorship of Franke, 292 Neb. at 923, 875 N.W.2d at 417, the Supreme Court stated “So, under our implicit interpretation of § 30-1601(2), a protected person’s close family members have the right to appeal from a final order in a conservatorship proceeding if they filed an objection and the county court appointed a conservator.” However, the court also acknowledged that “The conservatorship statutes do not explicitly authorize any person to object to a conservatorship appointment. But as relevant here, they do require notice of a petition for a conservator to the subject’s adult children and a hearing before making an appointment.” Id. at 922, 875 N.W.2d at 417. Because the statutes do not explicitly authorize an objection, they also do not specify how one must be made. It is apparent from the bill of exceptions that Jody was recognized as an objector; therefore, we reject Jason’s argument that her failure to file a written objection translates to an absence of standing. -5- Jason also contests Jody’s standing, arguing that none of her issues raised on appeal address the issues actually resolved by the county court. We agree that Jody’s assigned errors relate primarily to procedures used by the county court and do not explicitly challenge the court’s ultimate order appointing Jay as Gloria’s guardian and conservator. That does not preclude this court’s jurisdiction, but it does affect our analysis of this appeal in that we are limited to a review of Jody’s specific assignments of error. See In re Estate of Soule, 248 Neb. 878, 540 N.W.2d 118 (1995) (appellate review limited to errors specifically assigned unless court notices plain error). Assignments of Error Related to Temporary Order. Jody’s first five assignments of error relate to the order appointing Jay as the temporary guardian and conservator. She takes issue with the court’s scheduling of a hearing on the petition 24 hours after it was filed and without proper notice to the parties, the language of the court’s temporary order indicating notice was given or waived, the holding of a temporary appointment hearing without notifying Gloria, the order’s language stating the temporary appointment was necessary due to an emergency and that Gloria was incapacitated without an evidentiary hearing, and the court’s failing to limit the letters of temporary guardianship and conservatorship to address the emergency issue. Notwithstanding the provisions of Neb. Rev. Stat. § 30-2626 (Reissue 2016) that allows a temporary guardian to be appointed “pending notice and hearing,” the issues related to the temporary order are moot. A matter becomes moot when the issues initially presented in the litigation cease to exist, when the litigants lack a legally cognizable interest in the outcome of litigation, or when the litigants seek to determine a question which does not rest upon existing facts or rights, in which the issues presented are no longer alive. See In re Trust Created by Nabity, 289 Neb. 164, 854 N.W.2d 551 (2014). See, also, Swoboda v. Volkman Plumbing, 269 Neb. 20, 690 N.W.2d 166 (2004). In In re Trust Created by Nabity, supra, the court explained that in the case of a temporary order later replaced by a permanent order, the question whether it was issued in error was relevant only from the time it was ordered until it was replaced by the permanent order. Therefore, in an appeal from the permanent order, any issue relating to the temporary order is moot and need not be addressed. Id. Because Jody’s first five assigned errors relate to the temporary order which has now been replaced by the permanent order, they are moot and we need not address them. Qualified Visitor. Jody argues that the court erred when it did not assign a qualified visitor to evaluate Gloria’s capacity to live independently while still in her apartment. She further argues that it failed to assign a physician who specialized in short-term memory to evaluate Gloria. Neb. Rev. Stat. § 30-2619.01 (Reissue 2016) states “[f]ollowing the filing of a petition, the court may appoint a visitor and direct such visitor to conduct an evaluation of the allegations of incapacity.” The appointment of a visitor is within the court’s discretion. In re Guardianship of Gilmore, 11 Neb. App. 876, 662 N.W.2d 221 (2003). Similarly, the court may appoint a physician to examine the alleged incapacitated person. Neb. Rev. Stat. § 30-2619(c) (Reissue 2016). -6- Our record fails to indicate that Jody raised this issue in the county court. It contains no request for appointment of a visitor or a physician, nor did Jody object to proceeding with the trial in the absence of one or both of them being appointed. An appellate court will not consider an issue on appeal that was not passed upon by the trial court. In re Guardianship of Suzette G., 27 Neb. App. 477, 934 N.W.2d 195 (2019). Therefore, we do not address this assigned error. Alleged Failure to Serve Gloria With All Pleadings. Jody argues that the court erred when it did not require Gloria to be served copies of all documents related to this matter. However, she does not indicate what pleadings were not served on Gloria. According to the proof of service filed by Bockstadter, she served all of the preliminary pleadings through May 28, 2021, on Gloria. To the extent Gloria may not have been served with pleadings after that date, Jody did not raise this issue in the county court. An appellate court will not consider an issue on appeal that was not passed upon by the trial court. Id. Denial of Jody’s Motion to Continue. Jody’s final assignment of error is that the court erred when it denied her motion to continue filed on January 19, 2022. Jody filed the motion to continue because she had not received the medical records obtained by the facility in which Gloria was living. Rather than continue the trial, the court ordered that the GAL produce the medical records by 9 a.m. on January 20. Trial began on January 21. Jody asserts that the denial of her motion denied her “due process to bring in medical experts, the cornerstone of her case.” Brief for appellant at 24. Whether to grant a continuance lies in the discretion of the court. Weiss v. Weiss, 260 Neb. 1015, 620 N.W.2d 744 (2001). Factors to consider include (1) the number of continuances granted to the moving party, (2) the importance of the issue presented in the matter, and (3) whether the continuance was being sought for a frivolous reason or dilatory motive. Id. Jody requested and received one prior continuance on October 1, 2021, for the purpose of preparing for “findings” contained in the GAL report. The initial GAL report revealed that Gloria was incapacitated “per Paul C. Wibbels, M.D.” It further identified the health care facilities whose records the GAL reviewed and recommended a full guardianship. The court set a discovery deadline of November 30. It does not appear that Jody engaged in any discovery from October 1 to November 30 in an attempt to obtain the records from the facilities themselves. On January 6, 2022, the parties stipulated to a release of Edwards’ and Wibbels’ records. In the court’s order denying the continuance, it ordered the GAL to provide both counsel with copies of the medical records that she retrieved from the care facility “which supplement medical records which were originally attached to her report.” Accordingly, it appears that Jody had some medical records as of October 1, 2021, when she received the GAL’s report. Any need for rebuttal medical testimony would have been known at that time; therefore, we reject her argument that the delay in receiving the additional records violated her due process to bring in medical experts. The denial of her motion for a continuance was not an abuse of discretion. -7- CONCLUSION Finding no error in the county court’s proceeding, we affirm the order appointing Jay as Gloria’s permanent guardian and conservator. AFFIRMED. -8-	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488563/	IN THE NEBRASKA COURT OF APPEALS MEMORANDUM OPINION AND JUDGMENT ON APPEAL (Memorandum Web Opinion) IN RE INTEREST OF LINDA I. NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E). IN RE INTEREST OF LINDA I., A CHILD UNDER 18 YEARS OF AGE. STATE OF NEBRASKA, APPELLEE, V. ERIKA T., APPELLANT, AND ARGENIS B., APPELLEE. Filed November 22, 2022. No. A-22-260. Appeal from the Separate Juvenile Court of Douglas County: MATTHEW R. KAHLER, Judge. Affirmed. Joseph Kuehl, of Lefler, Kuehl & Burns Law Office, for appellant. Donald W. Kleine, Douglas County Attorney, Rachel Lowe, and Corey Lamas, Senior Certified Law Student, for appellee. PIRTLE, Chief Judge, and ARTERBURN and WELCH, Judges. PIRTLE, Chief Judge. INTRODUCTION Erika T. appeals from the separate juvenile court of Douglas County, which adjudicated Erika’s 16-year-old daughter, Linda I., to be within the meaning of Neb. Rev. Stat. § 43-247(3)(a) (Reissue 2016), on the grounds that Linda lacked proper parental care by reason of the fault or habits of Erika. Erika challenges the sufficiency of the evidence in support of the State’s petition. For the reasons that follow, we affirm. BACKGROUND Immediately prior to the events of this case, Linda resided with her mother, Erika. Linda was a junior in high school and was, by all accounts, a bright student. Linda was apparently -1- enrolled at least part time in a private college preparatory academy in addition to her regular school attendance. Linda also worked at McDonald’s as a cashier. However, Linda testified that her life started “falling apart out of nowhere” around September 2021. Linda started skipping school, and she explained that “I was having really strong suicidal thoughts, and I would sit in the parking lot of the school just trying to convince myself not to kill myself.” While Linda testified that these symptoms began in September 2021, she recalled having similar feelings “a couple of months after seventh grade,” when she was depressed and cut herself every day for a week. Linda testified that she was living with her grandmother at the time, and her grandmother eventually noticed the cuts. At some point, Erika was informed of the circumstances and discussed Linda’s symptoms with her grandmother. Linda testified that either her grandmother or her maternal aunt, Nancy T., signed a permission slip for her to speak with a school psychologist, but it is unclear what if any additional steps were taken to address Linda’s mental health at the time. Linda moved in with Erika a short time after that incident, where she remained for approximately 3 years until the events of this case. In addition to the suicidal thoughts beginning in September 2021, Linda testified to a prior suicide attempt in which she “overdosed” on “THC pills” in either January 2020 or January 2021. In describing that incident, Linda testified that Erika was present and simply did nothing even after Linda “passed out” on the floor in front of her. Erika denied any knowledge of such an incident. According to Linda, she continued to struggle with suicidal thoughts on a daily basis from September to November 2021. By late November 2021, Linda had been continuously absent from school for a “few weeks” or “a month.” Erika testified that she was not made aware of Linda’s absences until “around November 22.” Erika confronted Linda about her absences, and, as punishment, Linda lost her phone and driving privileges. At some point on November 22, Linda ran away from Erika’s house, and Erika reported Linda missing shortly thereafter. It was not clear from the record whether or to what extent Erika was aware of Linda’s mental health symptoms at that point. Linda testified that she told Erika she “wanted to go to therapy” on one occasion “between September and November” 2021. The Child and Family Services Specialist (CFSS) assigned to this family, Brooke Corey, indicated that as of December 20, 2021, Erika had been aware of Linda’s mental health needs for “almost two months” or since mid-October. The State indicated that, as of December 15, 2021, Erika had been aware of Linda’s symptoms for “three months” or since mid-September. In contrast, the testimony of both Erika and Nancy suggests that Erika was not aware of Linda’s ongoing mental health symptoms until after Linda ran away. In any case, Linda’s mental health needs were abundantly apparent to all parties after Linda ran away and disclosed them to law enforcement. After running away on November 22, 2021, Linda remained missing until around nighttime on November 23, at which point Linda arrived at Nancy’s house. Erika had already gone to Nancy’s in search of Linda and was present when Linda pulled into the driveway. When Linda refused to get out of the vehicle, Erika attempted to forcibly remove Linda, allegedly pulling Linda by her hair. An altercation ensued between Erika and another maternal aunt, Michelle T., and Erika called the police. Law enforcement officers responded to Nancy’s house and Linda testified that she informed the officers that she did not feel safe returning to Erika’s custody, and she explained that “when I was at Erika’s house, I was having these really, really strong urges to kill myself.” It -2- appears that the officers initially determined to return Linda to Erika’s custody, and Erika determined that Linda was to be transported to Immanuel Hospital for mental health treatment in light of her claims to suicidal ideation. However, Linda ran away again prior to being transported to Immanuel. Linda returned to Nancy’s sometime the next day, November 24, 2021. Erika was not present, as she was apparently at work at the time. Nancy reported Linda’s return to law enforcement. Prior to the arrival of law enforcement, Linda disclosed to Nancy that her mental health symptoms were at least partially caused by “flashbacks of what she calls a rape event” that occurred when she was younger. At the adjudication hearing, Linda was asked about anything that may have led to her having thoughts of suicide and self-harm, and she testified that one night, “I don’t remember when it was, . . . I started getting memories of when [Erika’s] old boyfriend, Alister—he would molest me a lot when I was a little kid.” Erika later reported that she was also sexually assaulted by Alister in the past, and it appears that Alister was deported to Mexico in 2015. Responding officer, Jamie Madson, testified that she responded to Nancy’s house on November 24, 2021, and received reports of “child abuse” arising out of Erika’s attempt to forcibly remove Linda from a vehicle the night before. Madson further noted Linda’s allegation of prior sexual assault and her expressed intention to attempt suicide if returned to Erika’s custody. Madson attempted to reach Erika by phone but was only able to leave a voicemail. Erika returned Madson’s call later that day, and she denied any allegations of child abuse but refused to meet with Madson in person. As of November 24, Linda was removed from Erika’s custody on an emergency basis and placed with Nancy. Linda continued to live with Nancy for “a tad under 30 days,” at which point Linda was apparently placed with Michelle until the adjudication hearing. Linda was formally removed from Erika’s custody on January 10, 2022, when the juvenile court granted the State’s ex parte motion for immediate custody filed along with the juvenile petition on December 30, 2021. CFSS Corey testified that she began her investigation into this matter on November 30, 2021, when she met with Erika at Erika’s residence to discuss the need for a safety plan. Corey testified that a safety plan is appropriate whenever there is an identified safety issue. In this case, Corey identified the safety issue as “Linda was not receiving mental health treatment.” Corey testified that, despite numerous attempts, the proposed safety plan was never implemented because Erika “wouldn’t agree to specifics” regarding Linda’s mental health treatment. The record reflects that the central disagreement between Erika and Corey pertained to the appropriateness of Immanuel Hospital for treatment of Linda’s mental health needs. Throughout this case, Erika expressed a desire to have Linda taken to Immanuel Hospital for mental health treatment. However, Corey maintained that, in her experience, Immanuel would not lead to long-term mental health treatment unless the patient was “currently suicidal” at the time of admission. Corey testified that Linda needed long-term treatment and that Linda did not express feeling “actively suicidal” so long as she was placed outside Erika’s home. Accordingly, Corey maintained that Immanuel was not an appropriate treatment option under the circumstances of this case. Corey testified that she repeatedly explained this to Erika, but Erika continued to insist on Immanuel. -3- Corey further indicated that, rather than focusing on Linda’s apparent mental health needs, Erika fixated on investigating the veracity of Linda’s sexual assault allegation. In that regard, Linda reportedly underwent a “forensic interview” at Project Harmony on December 8, 2021, but there was no evidence from that interview in the record. On December 15, Erika attempted to arrange for a “rape kit” examination. Linda testified that she did not learn of the examination until she was in the examination room, and she recalled having an “anxiety attack” as a result. In contrast, Erika testified that Linda initially wanted to undergo the examination but changed her mind once she got into the examination room. In any case, Linda became distraught and the examination was not conducted. Corey testified that the December 15 doctor’s appointment caused her concern because it seemed that Erika did not believe Linda’s sexual assault allegation and became focused on obtaining “medical documentation” to either prove or disprove the allegation. Meanwhile, Corey indicated that Linda repeatedly expressed a desire to participate in therapy. Corey recalled a meeting with both Erika and Linda on December 20, 2021, where Linda was “crying and asking, ‘When can I get into therapy?’ And Erika never said anything.” Erika’s coworker, Nancy Hellman, testified that she accompanied Erika to Project Harmony on December 15, for the purpose of getting Linda a therapy appointment, however, it does not appear that an appointment was arranged at that time. Linda eventually began participating in weekly therapy at Project Harmony on February 3, 2022, although it was not clear how or when that was arranged. The State filed a juvenile petition on December 30, 2021, alleging that Linda lacks proper parental care by reason of Erika’s fault or habits. In support thereof, the State alleged the following six factual bases labeled A through F (count 1-A through count 1-F): A. [Linda] struggles with her mental health. B. [Erika] has failed to seek medical care and/or services for said juvenile’s mental health issues. C. [Erika] has subjected [Linda] to inappropriate physical contact and/or discipline. D. [Erika] has failed to provide proper parental care, support, supervision, and/or safety to [Linda]. E. [Erika] has failed to follow through with voluntary services designed to prevent the removal of [Linda]. F. Due to the above allegations, [Linda] is at risk for harm. An adjudication hearing was held on March 21, 2022. As outlined above, the bulk of the testimony pertained to actions either taken or not taken with regard to Linda’s mental health needs from November 22, 2021, to December 30, 2021. The juvenile court entered an adjudication order on March 25, 2022. The court explicitly found the testimony of Linda, Corey, and Madson to be credible. The court noted Linda’s “repeated requests for therapeutic help, as well as attempts by [the Department of Health and Human Services (DHHS)] to implement voluntary services to benefit the family.” The court found that Erika “failed to take appropriate steps to get [Linda] involved in therapy, and also failed to engage with voluntary services despite being given ample time to participate in services.” The court found counts 1-A, 1-C, 1-D, 1-E, and 1-F to be true by a preponderance of the evidence and dismissed count 1-B for insufficient evidence. Thus, the court adjudicated Linda to be without proper parental care by reason of the fault or habits of Erika and -4- ordered Linda to remain in temporary DHHS custody for placement to exclude Erika’s home. Erika appealed. ASSIGNMENT OF ERROR Erika assigns that the juvenile court erred in finding counts 1-C, 1-D, 1-E, and 1-F true by a preponderance of the evidence. STANDARD OF REVIEW An appellate court reviews juvenile cases de novo on the record and reaches its conclusions independently of the juvenile court’s findings; however, when the evidence is in conflict, an appellate court may consider and give weight to the fact that the trial court observed the witnesses and accepted one version of the facts over the other. In re Interest of Xandria P., 311 Neb. 591, 973 N.W.2d 692 (2022). ANALYSIS There is no dispute on appeal that count 1-A, which alleged that Linda “struggles with her mental health,” was true by a preponderance of the evidence. Moreover, the juvenile court dismissed count 1-B, which alleged that Erika “failed to seek medical care and/or services for [Linda’s] mental health issues,” for insufficient evidence. This leaves counts 1-C, 1-D, 1-E, and 1-F, and the court’s findings with respect to those four allegations correspond to Erika’s four assignments of error on appeal. As mentioned above, the court made explicit credibility findings in favor of Linda, Corey, and Madson. Because the issues on appeal generally revolve around factual disputes and alleged conflicts in the evidence, we consider and give weight to the fact that the juvenile court observed the witnesses and accepted one version of the facts over the other. Erika’s first assignment of error challenges the sufficiency of the evidence in support of count 1-C, which alleged that Erika “subjected [Linda] to inappropriate physical contact and/or discipline.” This allegation pertained to Erika’s attempt to forcibly remove Linda from a vehicle, allegedly pulling Linda by her hair. Erika does not dispute that she attempted to forcibly remove Linda from the vehicle. However, Erika maintains that she grabbed Linda’s jacket and denies pulling Linda by her hair. Whether or not Erika grabbed Linda’s hair, there was no dispute that Erika subjected Linda to physical contact, and multiple witnesses described the incident as an act of “child abuse” to law enforcement. The juvenile court noted that all of the witnesses, including Erika, testified to some sort of physical altercation, first between Erika and Linda, and then between Erika and Michelle. Thus, the court found that the incident was established by a preponderance of the evidence. We likewise conclude that the State carried its burden to prove the allegation in count 1-C by a preponderance of the evidence. Erika’s second assignment of error challenges the sufficiency of the evidence in support of count 1-D, which alleged that Erika “failed to provide proper parental care, support, supervision, and/or safety” for Linda. Erika points out that the juvenile court “did not make any specific findings on this particular Count, and the language of this Count leaves it open to almost any possibility of neglect.” Brief for appellant at 10. Thus, Erika focuses her argument on the court’s factual finding that Erika failed to take appropriate steps to find therapy. Erika argues the record -5- “is filled with testimony from witnesses who say that [Erika] attempted to get help for [Linda].” Id. Specifically, Erika points to her efforts to have Linda taken to Immanuel Hospital and her attempt to arrange for therapy at Project Harmony on December 15, 2021. The State, on the other hand, points to the “numerous occasions” in which Erika “denied knowing of” Linda’s mental health needs and failed to seek therapeutic services. Brief for appellee at 20. According to the State, Erika simply “mitigated” and “ignored” Linda’s mental health symptoms. Id. at 21. Altogether, the State argues that count 1-D was amply supported by the evidence of Erika’s “utter lack of support for [Linda’s] well-being and repeated failure to seek any medical intervention or therapeutic services.” Id. at 22. We agree. Linda’s mental health needs were apparent for well over 2 months before she finally obtained therapy in February 2022. As early as November 30, 2021, and repeatedly thereafter, Corey explained to Erika that Immanuel Hospital was not an appropriate treatment option and that Erika needed to arrange for “long-term therapy.” However, Erika did not arrange for therapy and continued to insist that Linda be taken to Immanuel. Moreover, instead of prioritizing Linda’s apparent need and desire for therapy, Erika focused her attention on investigating Linda’s sexual assault allegation, further aggravating Linda’s mental health symptoms. Altogether, we conclude the State carried its burden to prove the allegation in count 1-D by a preponderance of the evidence. Erika’s third assignment of error challenges the sufficiency of the evidence in support of count 1-E, which alleged that Erika “failed to follow through with voluntary services designed to prevent [Linda’s] removal.” The State points to Corey’s “countless efforts” to implement the safety plan and Erika’s apparent lack of cooperation in that regard. Brief for appellee at 22. Erika admits that she failed to sign the safety plan, but she argues there was no evidence regarding the actual contents of the safety plan. Erika posits that, if the safety plan was intended to ensure Linda obtained mental health treatment, then “the record is clear” that Erika “made those attempts.” Brief for appellant at 11. Whatever the specific contents of the proposed safety plan, the record reflects that Erika failed to meaningfully engage with Corey with regard to any of the actions deemed necessary to ensure Linda’s safety and well-being. We acknowledge a certain lack of rapport between Erika and Corey, but Erika had a responsibility to set that aside and cooperate with Corey in furtherance of Linda’s best interests. Accordingly, we conclude that the State carried its burden to prove the allegation in count 1-E by a preponderance of the evidence. Finally, Erika’s fourth assignment of error challenges the sufficiency of the evidence in support of count 1-F, which alleged that “Due to the above allegations, [Linda] is at risk for harm.” Erika acknowledges that there was “some evidence” of the “hair pulling incident” alleged in count 1-C, however, Erika argues that “there is little to no evidence that [Erika] failed to avail herself of voluntary services, and there is ample evidence that [Erika] attempted to get [Linda] mental health help on multiple occasions.” Brief for appellant at 11. Thus, Erika concludes, the State failed to show that Linda was at risk of harm if returned to Erika’s custody. The State, on the other hand, summarizes the evidence above and concludes that “[Erika’s] conduct shows that despite [Linda’s] suicidal thoughts, self-harm, and actual suicide attempts, she is simply unwilling to put the needs of her child above hers and seek the medical assistance [Linda] not only needs now, but will continue to need in the future.” Brief for appellee at 26. -6- As the State points out, Nebraska case law is clear that at a minimum, the State must establish that without intervention, there is a definite risk of future harm. See In re Interest of Kane L., 299 Neb. 834, 910 N.W.2d 789 (2018). There was no dispute that Linda struggles with her mental health. Furthermore, Linda reported persistent suicidal ideation while in Erika’s custody and she expressed an intention to attempt suicide if returned to Erika’s custody. This evidence alone amounts to proof by a preponderance of the evidence of a definite risk of future harm to Linda if returned to Erika’s custody. Especially when we account for the evidence that Erika has thus far been unable to provide Linda with the support and services that she needs to address her mental health, we conclude that the State carried its burden to prove the allegation in count 1-F by a preponderance of the evidence. CONCLUSION For the foregoing reasons, we affirm the order of the juvenile court in all respects. AFFIRMED. -7-	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488573/	TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-21-00256-CV Texas Commission on Environmental Quality, Appellant v. Sierra Club and Ken Paxton, Attorney General of Texas, Appellees FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-19-006941, THE HONORABLE JAN SOIFER, JUDGE PRESIDING MEMORANDUM OPINION The Texas Commission on Environmental Quality (the Commission) sued Ken Paxton, Attorney General of the State of Texas, seeking declaratory relief from compliance with an attorney general decision ordering the Commission to disclose certain information requested by the Sierra Club. See Tex. Gov’t Code § 552.324 (authorizing suit against attorney general by governmental body that seeks to withhold information attorney general has ordered disclosed pursuant to Public Information Act). The Sierra Club intervened, seeking a writ of mandamus to compel the disclosure of the responsive documents. See id. § 552.321 (waiving sovereign immunity for requestor seeking mandamus to compel disclosure). The Sierra Club and the Commission filed competing motions for summary judgment. The district court denied the Commission’s motion, granted the Sierra Club’s, and ordered the Commission to produce the requested documents to the Sierra Club. The Commission then perfected this appeal. We will affirm the district court’s summary judgment. BACKGROUND On July 1, 2019, the Commission received a request pursuant to the Public Information Act (PIA) for documents and records relating to the Commission’s proposed or final Development Support Document entitled “Ethylene Oxide Carcinogenic Dose-Response Assessment” and documents and records relating to the Commission’s action to create a unit risk factor, unit risk estimate, or cancer-risk value or metric for ethylene oxide. The Commission released some information, asserted that some of the information was not subject to the PIA, and withheld some information on the ground that it was excepted from disclosure under PIA section 552.111, which provides that “[a]n interagency or intraagency memorandum or letter that would not be available to a party in litigation with the agency is excepted from the requirements of Section 552.021 [that public information must be made available to the public].” Id. § 552.111. The Commission asserted that it withheld information it maintained was protected by the deliberative process privilege. See City of Garland v. Dallas Morning News, 22 S.W.3d 351, 360 (Tex. 2000) (recognizing that “Texas courts and the Attorney General have consistently recognized that [the exception from disclosure provided by section 552.111] encompasses the common law deliberative process privilege, which protects certain agency communications from discovery” and that the privilege protects predecisional and deliberative communications related to agency’s policymaking). In conjunction with its decision to withhold certain records, the Commission sought a decision from the Attorney General’s Open Records Division (ORD) that the records it withheld fell within the agency memorandum exception in Government Code section 552.111 2 because they were protected by the deliberative process privilege.1 See Tex. Gov’t Code § 552.301(a) (governmental body that receives written request for information it wishes to withhold under section 552.111 must ask for decision from attorney general about whether information is within that exception), (b) (governmental body must ask for attorney general’s decision and state exceptions that apply not later than 10th business day after date of receiving the request). The Commission placed its letter requesting the Attorney General’s decision into the Commission’s interagency outgoing mailbox on July 17, 2019. The ORD’s letter decision determined that the Commission’s username and password for a website were not information made public under the PIA and that it was not required to release it. With regard to the Commission’s request for a decision on whether it could withhold information based on section 552.111, the ORD stated that because the Commission did not timely request an attorney general decision “the requested information is public and must be released unless there is a compelling reason to withhold the information from disclosure.” See id. § 552.302 (if governmental body does not request attorney general decision within ten business days of receiving written request for information, requested information is presumed to be subject to required public disclosure and must be released unless there is compelling reason to withhold it); Paxton v. City of Dallas, 509 S.W.3d 247, 252 (Tex. 2017) (“In harmony with the policy underlying the PIA’s prompt- production requirement, the governmental body asserting an exception must request an attorney general decision ‘within a reasonable time but not later than the 10th business day after the date of receiving the written request.’ If a request for decision is untimely, ‘the information requested 1 The Commission also asserted that it could withhold an email communication containing the Commission’s username and password for the American Conference of Governmental Industrial Hygienists on the ground that it is not public information subject to the PIA. The ORD determined that this communication could be withheld and it is not at issue in this appeal. 3 in writing is presumed to be subject to required public disclosure and must be released unless there is a compelling reason to withhold the information.’”) (citations omitted). The ORD further determined that the Commission failed to establish a compelling reason to withhold the information and, consequently, the Commission could not withhold the requested information pursuant to Government Code section 552.111. See Tex. Att’y Gen. OR2019-26474. The Commission then filed suit against the Attorney General seeking to withhold the records from the Sierra Club. See Tex. Gov’t Code § 552.324 (governmental body may file suit against attorney general seeking declaratory relief from attorney general opinion issued under section 552.301). The Attorney General answered and requested that the district court render judgment declaring that the information must be disclosed to the requestor. The Sierra Club intervened and sought a writ of mandamus to compel the Commission to disclose the requested information. See id. § 552.321 (requestor may file suit for writ of mandamus compelling governmental body to make information available for public inspection if governmental body refuses to supply information that attorney general has determined is not excepted from disclosure). The Commission and the Sierra Club each filed motions for summary judgment. The district court granted the Sierra Club’s motion and denied the Commission’s. The Commission perfected this appeal. APPLICABLE LAW The Public Information Act The purpose of the PIA is to provide public access “at all times to complete information about the affairs of the government and the official acts of public officials and employees.” Id. § 552.001. “The Act mandates a liberal construction to implement this policy and one favoring a request for information.” City of Garland, 22 S.W.3d at 356. On receiving a 4 request for information, a governmental body’s public information officer must promptly produce public information for inspection, duplication, or both. Tex. Gov’t Code § 552.221(a). Certain information is specifically excepted from required disclosure. Id. §§ 552.101-.154. If a governmental body believes the requested information is excepted from disclosure, and if there has been no previous determination on the subject, the PIA requires the governmental body to state the exceptions it believes apply and request an opinion from the attorney general not later than the tenth business day after receiving the request. See id. § 552.301; City of Garland, 22 S.W.3d at 356. If the governmental body does not timely request an attorney general’s opinion, the information is presumed public and must be released unless there is a compelling reason to withhold it. See Tex. Gov’t Code § 552.302; City of Dallas v. Abbott, 304 S.W.3d 380, 381 (Tex. 2010). If the attorney general rules that the PIA does not exempt the information from disclosure or that a governmental body that has failed to timely request an opinion has not demonstrated a compelling reason to withhold the information, the public information officer must make it available to the requesting party or seek a judicial determination that the information does not have to be disclosed. See Tex. Gov’t Code §§ 552.302, .324; City of Garland, 22 S.W.3d at 356. The governmental body has the burden of proving in a judicial proceeding that an exception to disclosure applies. City of San Antonio v. Abbott, 432 S.W.3d 429, 431 (Tex. App.—Austin 2014, pet. denied). Standard of Review We review a trial court’s summary judgment de novo. Travelers Ins. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). When the trial court does not specify the grounds for granting the motion, we must uphold the judgment if any of the grounds asserted in the motion and preserved for appellate review are meritorious. Provident Life & Accident Ins. v. Knott, 5 128 S.W.3d 211, 216 (Tex. 2003). When both parties move for summary judgment, each party bears the burden of establishing that it is entitled to judgment as a matter of law. City of Garland, 22 S.W.3d at 356; Abbott v. Dallas Area Rapid Transit, 410 S.W.3d 876, 879 (Tex. App.—Austin 2013, no pet.). When both parties move for summary judgment on the same issue and the trial court grants one motion and denies the other, we consider the summary judgment evidence presented by both sides, determine all questions presented and, if we determine that the trial court erred, render the judgment the trial court should have rendered. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005) (citing FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000)). This appeal requires that we construe the PIA. In general, matters of statutory construction are questions of law that we review de novo. See Railroad Comm’n of Tex. v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 624 (Tex. 2011). Our primary concern is the express statutory language. See Galbraith Eng’g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex. 2009). We apply the plain meaning of the text unless a different meaning is supplied by legislative definition or is apparent from the context or the plain meaning leads to absurd results. Marks v. St. Luke’s Episcopal Hosp., 319 S.W.3d 658, 663 (Tex. 2010). “Construction of a statute must be consistent with its underlying purpose.” Northwestern Nat’l Cnty. Mut. Ins. v. Rodriguez, 18 S.W.3d 718, 721 (Tex. App.—San Antonio 2000, pet. denied). DISCUSSION Was the Commission’s Request for an Attorney General Decision Timely? In its first issue, the Commission asserts that its request for an attorney general decision was timely—i.e., that the request was made within ten business days of the Commission’s receipt of the Sierra Club’s request. See Tex. Gov’t Code § 552.301(b). The 6 Commission received the Sierra Club’s request on Monday July 1, 2019. It placed its request for an attorney general decision in interagency mail on Wednesday July 17, 2019. The parties agree that Thursday, July 4; Saturday, July 6; Sunday, July 7; Saturday, July 13; and Sunday, July 14 are not counted for purposes of determining what date constitutes the tenth business day from July 1. The Sierra Club argues that the tenth business day after Monday, July 1, 2019, was Tuesday, July 16, 2019, and that the Commission’s July 17 request was therefore untimely. The Commission counters that, in addition to the weekend dates and the July 4 holiday, Friday, July 5 should not be counted because the Commission “was closed” on that day “in observance of the Independence Day holiday,” and therefore July 5 was not a “business day” for purposes of calculating the deadline for requesting an attorney general opinion. As evidence that it was “closed” on July 5, 2019, the Commission submitted the affidavit of one of its legal assistants in which she attested that “the agency was closed July 4-5, 2019, in observance of the Independence Day holiday.” Thus, according to the Commission, the tenth business day after July 1, 2019, was July 17, 2019, the day it placed its request in interagency mail. See id. § 552.308(b) (request to attorney general is timely if agency provides evidence sufficient to establish that request was deposited in interagency mail within specified time period). To resolve this dispute, we must determine the meaning of the term “business day” in the PIA— specifically whether it includes dates that an agency has unilaterally declared itself to be “closed.” Throughout the PIA, the statute mandates that virtually all deadlines are calculated using “business days.” See, e.g., id. §§ 552.221(d) (directing agency that cannot produce public information for inspection within ten business days after date information is requested to certify fact in writing and set date information will be available), .225(a) (providing 7 that requestor must complete examination of information not later than tenth business day after date information is made available), .2615(b) (providing that requestor must respond to itemized cost of copying requested public information within ten business days after date statement sent to requestor), .301(b) (request for attorney general opinion must be made within ten business days of receiving request for public information). The term “business day” is not defined in the statute. “When a statute uses a word that it does not define, our task is to determine and apply the word’s common, ordinary meaning.” Jaster v. Comet II Constr., Inc., 438 S.W.3d 556, 563 (Tex. 2014). In determining the common, ordinary meaning of a term, we may look to a “wide variety of sources, including dictionary definitions, treatises and commentaries, our own prior constructions of the word in other contexts, the use and definition of the word in other statutes and ordinances, and the use of the words in our rules of evidence and procedure.” Id. The common meaning of “business day” is “a day that most institutions are open for business.” Black’s Law Dictionary 454 (9th ed. 2009). The term “business day” is defined in the Texas Government Code, and in other statutes, as a day other than a Saturday, Sunday, or legal holiday. See Tex. Gov’t Code § 2116.001 (“‘Business day’ means day other than a Saturday, Sunday, or banking holiday for bank chartered under the laws of this state.”); Tex. Est. Code § 452.004 (defining “business day” as “a day other than a Saturday, Sunday, or holiday recognized by this state”); Tex. Fam. Code § 86.0011 (defining “business day” as “a day other than a Saturday, Sunday, or state or national holiday”); Tex. Health & Safety Code § 775.0221 (defining “business day” as “a day other than a Saturday, Sunday, or state or national holiday”); Tex. Ins. Code § 542.051 (defining “business day” as “a day other than a Saturday, Sunday, or holiday recognized by this state”); Tex. Loc. Gov’t Code § 143.034 (when computing five-business-day period for seeking review of fire or police department promotional exam results “a Saturday, 8 Sunday, or legal holiday is not considered a business day”); Tex. Prop. Code § 62.026 (defining “business day” as “a day other than a Saturday, Sunday, or holiday recognized by this state”). Similarly, for purposes of computing time periods, the Texas Rules of Civil Procedure exclude Saturdays, Sundays, and legal holidays when the last day of the time period falls on one of those days and also excludes Saturdays, Sundays, and legal holidays from computation of any time period of five days or less. See Tex. R. Civ. P. 4. And for the purpose of computing time periods, the Texas Rules of Appellate Procedure also exclude Saturdays, Sundays, and legal holidays when the last day of the time period falls on one of those days. See Tex. R. App. P. 4.1. None of these statutes or rules contemplates that a time period may be extended by not counting a day on which the person or entity required to meet the deadline has decided that it will be “closed.” The Legislature has defined both the national holidays and state holidays that the state recognizes. See Tex. Gov’t Code § 662.003. The national holidays are: (1) the first day of January, “New Year’s Day”; (2) the third Monday in January, “Martin Luther King, Jr. Day”; (3) the third Monday in February, “Presidents’ Day”; (4) the last Monday in May, “Memorial Day”; (5) the fourth day of July, “Independence Day”; (6) the first Monday in September, “Labor Day”; (7) the 11th day of November, “Veterans Day”; (8) the fourth Thursday in November, “Thanksgiving Day”; and (9) the 25th day of December, “Christmas Day.” Id. § 662.003(a). The state holidays are (1) the 19th day of January, “Confederate Heroes Day”; (2) the second day of March, “Texas Independence Day”; (3) the 21st day of April, “San Jacinto Day”; (4) the 19th day of June, “Emancipation Day in Texas”; (5) the 27th day of August, “Lyndon Baines Johnson Day”; (6) the Friday after Thanksgiving Day; (7) the 24th day of December; and (8) the 26th day of December. Id. § 662.003(b). The Legislature has also 9 designated the days on which Rosh Hashanah, Yom Kippur, or Good Friday fall as “optional holidays.” Id. § 662.003(c). July 5th, the day after Independence Day, is not included in the list of holidays or optional holidays recognized by the State. Moreover, the Government Code provides that a state agency “shall have enough employees on duty during a state holiday to conduct the public business of the agency or institution.” See id. § 662.004. Thus, even when a state agency observes a state holiday, it must be staffed sufficiently to conduct its public business. It must also be the case, then, that when an agency such as the Commission chooses to “close” its office on a day that is neither a national nor state holiday, such as July 5th, it must still have enough employees on duty to conduct its public business, which includes complying with the deadlines set forth in the PIA for handling requests for public information. See Paxton, 509 S.W.3d at 251 (“The prompt production of public information furthers the ‘fundamental philosophy’ that ‘government is the servant and not the master of the people.’”); see also Tex. Gov’t Code § 552.221 (governmental body must “promptly” produce public information after receiving request for disclosure, meaning “as soon as possible under the circumstances, that is, within a reasonable time, without delay”). We see no support in the common meaning of the term “business day,” in the manner in which it has been defined in various statutes and court rules, or in the policy of the PIA, for concluding that the term “business day” excludes not only Saturdays, Sundays, and legal holidays, but also days that a state agency decides to “close” its office in extended observance of a national holiday. Therefore, July 5, 2019, constitutes a “business day” for purposes of computing the deadline for the Commission to have requested an attorney general decision about whether the information the Sierra Club requested was within the asserted exception to disclosure under the PIA. 10 The Commission also asserts that the ten-business-day period should commence on July 2, rather than July 1, because it maintains that it asked the Sierra Club to clarify its request pursuant to Government Code section 552.222(b). See Tex. Gov’t Code § 552.222(b). That provision of the PIA provides, “If what information is requested is unclear to the governmental body, the governmental body may ask the requestor to clarify the request.” When a governmental body acting in good faith requests clarification, the ten-day period to request an attorney general’s opinion is measured from the date the request is clarified. See City of Dallas, 304 S.W.3d at 381, 384. The Commission argues that the following July 2, 2019 email from the Commission to a Sierra Club representative constitutes a request for clarification under section 552.222(b): We are in receipt of your public information request to the Texas Commission on Environmental Quality, PIR No. 48291 for information related to the TCEQ, proposed Development Support Document, Ethylene Oxide Carcinogenic Dose- Response Assessment (June 28, 2019). Please clarify whether your request is seeking confidential information. If you request confidential information, we will need to seek an Attorney General opinion for the requested confidential material or information. It may take up to 60 days for the Attorney General to reach a determination on our request. Please let me know how you would like to proceed. On the same day, the Sierra Club representative responded: “Yes, we would like to receive all responsive information that TCEQ may believe is confidential, but that must be released under the TX Public Information Act.” The issue, then, is whether the Commission’s email constitutes a section 552.222(b) good faith request to clarify “what information” the Sierra Club was requesting because it was unclear to the Commission “what information” was included in the request. 11 For two reasons, we conclude that this email does not constitute a section 552.222(b) request for clarification. First, the email does not ask the Sierra Club to clarify the subject matter of the information it has requested but, rather, asks the Sierra Club if it is requesting information related to the subject matter of the request that the Commission considers to be confidential. The email begins by stating that the Commission has received the Sierra Club’s request for “information related to the TCEQ proposed Development Support Document, Ethylene Oxide Carcinogenic Dose-Response Assessment (June 28, 2019).” This indicates that it was clear to the Commission what information the Sierra Club was requesting but simply wanted to determine whether the Sierra Club sought to obtain both confidential and non- confidential categories of responsive documents. Second, the email does not include the statutorily mandated statement regarding the consequences of failing to timely respond to a written request for clarification. See Tex. Gov’t Code §§ 552.222(e) (“A written request for clarification or discussion under Subsection (b) [] must include a statement as to the consequences of the failure by the requestor to timely respond to the request for clarification, discussion, or additional information.” (emphasis added)); .222(d) (“If by the 61st day after the date a governmental body sends a written request for clarification or discussion under Subsection (b) [] the governmental body, officer for public information, or agent, as applicable, does not receive a written response from the requestor, the underlying request for public information is considered to have been withdrawn by the requestor.”). The failure of the Commission to include the statutorily mandated warning confirms that the Commission’s email was not intended to be a section 552.222(b) request for clarification that would have any effect on the computation of the ten-business day deadline for requesting an attorney general decision. We overrule the Commission’s first issue. 12 Did the Commission Establish a Compelling Reason to Withhold Information? In its second issue, the Commission argues that, even if we conclude that its request for an attorney general decision was untimely, the information that it contends is covered by the deliberative process privilege may still be withheld because that privilege establishes a compelling reason for withholding the information under section 552.302. See id. § 552.302 (untimely request for attorney general decision gives rise to presumption that information must be disclosed absent a “compelling reason to withhold the information”). The issue before us, then, is whether the interests protected by the deliberative process privilege are sufficiently compelling to rebut the public-disclosure presumption that arises on expiration of the PIA’s ten- business day deadline. See Paxton, 509 S.W.3d at 256 (“In some instances, important policies and interests that animate a statutory exception are compelling in their own right.”). The PIA does not define the reasons that may be “compelling” enough to withhold requested information following an untimely request for an attorney general decision. The Texas Supreme Court, however, has provided extensive guidance on the issue in its opinion in Paxton v. City of Dallas. See id. at 256-60 (analyzing whether attorney-client privilege is compelling reason to withhold requested information). The court explained: The meaning of the term “compelling” is of vital importance to our analysis because it represents a qualitative limitation on the justifications that permit withholding information from public disclosure. Neither a reason nor even a good reason would be sufficient to rebut the public-disclosure presumption. The reason must be “compelling.” Our examination of dictionaries, treatises, and judicial constructions of similar language reveals the term “compelling” connotes urgency, forcefulness, and significantly demanding concerns. “Compelling” means “[u]rgently requiring attention” and “[d]rivingly forceful”’ “not able to be resisted; overwhelming” and “not able to be refuted; inspiring conviction”; and “calling for examination, scrutiny, consideration, or thought.” 13 Id. at 258. The court then analyzed whether the interests protected by the attorney-client privilege are sufficiently compelling to rebut the public-disclosure presumption and concluded that they are. The court explained that the “attorney-client privilege holds a special place among privileges” and is the “oldest and most venerated” and “the most sacred of all recognized privileges.” Id. at 259. The court reasoned that the attorney-client privilege was a compelling reason to withhold documents presumed to be public because the privilege is “essential to the just and orderly operation of our legal system” and “has been a cornerstone of our legal system for nearly 500 years.” Id. at 261. Informed by the Texas Supreme Court’s analysis in Paxton, we consider whether the deliberative process privilege also protects an interest sufficiently compelling to rebut the public-disclosure presumption. Section 552.111 exempts from disclosure “[a]n interagency or intraagency memorandum or letter that would not be available by law to a party in litigation with the agency.” Tex. Gov’t Code § 552.111. “Texas courts and the Attorney General have consistently recognized that this exception encompasses the common law deliberative process privilege, which protects certain agency communications from discovery.” City of Garland, 22 S.W.3d at 361 (citations omitted). In contrast to the attorney-client privilege, the deliberative process privilege was not recognized in Texas until the year 2000. See id. at 360 (“Whether the deliberative process privilege exists in Texas and, if it does, the privilege’s scope, are issues of first impression for this Court.”). In recognizing the privilege, the court cautioned that its scope must be limited to resist the “‘inevitable temptation’ on the part of governmental litigants to interpret the exception as expansively as necessary to apply it to the particular records it seeks to withhold,” which would result in allowing “the exception to swallow the [PIA]” and undermine the “strong statement of public policy favoring public access to governmental information and 14 [the] statutory mandate to construe the [PIA] to implement that policy and to construe it in favor of granting a request for information.” Id. at 362-64. The deliberative process privilege exemption in the PIA is modeled after an exemption in the Freedom of Information Act that protects “inter-agency or intra-agency memorandums or letters that would not be available by law to a party other than an agency in litigation with the agency.” 5 U.S.C. § 552(b)(5). “The purpose of the privilege is to protect the agency decision-making process from the inhibiting effect that disclosure of predecisional advisory opinions and recommendations might have on the ‘frank discussion of legal or policy matters’ in writing.” Skelton v. United States Postal Serv., 678 F.2d 35, 38 (5th Cir. 1982) (discussing statutorily created deliberative process privilege in Freedom of Information Act). The privilege, however, is qualified; it is not absolute. Federal Trade Comm’n v. Warner Commc’ns Inc., 742 F.2d 1156, 1161 (9th Cir. 1984). “The deliberative process privilege is qualified and can be overcome ‘by a sufficient showing of need.’” Harding v. City of Dallas, No. 3:15-CV-0131-D, 2016 WL 7426127, at 12 (N.D. Tex. Dec. 23, 2016). Courts consider multiple factors when determining whether the deliberative process privilege is overcome, including the relevance of the evidence, the availability of other evidence, the extent to which disclosure would hinder frank and independent discussion regarding contemplated policies and decisions, the interest of the party seeking the information in accurate judicial fact finding, and the presence of issues concerning alleged governmental misconduct. See Doe v. City of San Antonio, No. SA-14-CV-102-XR, 2014 WL 6390890, at 2 (W.D. Tex. 2014) (citing Smartwood v. County of San Diego, No. 12CV1665-W BGS, 2013 WL 6670545 (S.D. Cal. Dec. 18, 2013) (holding privilege did not protect child welfare service agency’s internal investigation from discovery in a section 1983 lawsuit after balancing relevant factors)). The deliberative process 15 privilege exception to disclosure is “‘not an absolute shield’ and is to be construed in the light of the act’s mandate that information regarding the affairs of government and the official acts of those who serve the public be freely available to all.” Lett v. Klein Indep. Sch. Dist., 917 S.W.2d 455, 457 (Tex. App.—Houston [14th Dist.] 1996, writ denied) (citing Texas Dep’t of Pub. Safety v. Gilbreath, 842 S.W.2d 408, 412 (Tex. App.—Austin 1992, no writ)). Significantly, unlike the attorney-client privilege, our jurisprudence has not developed procedural safeguards against circumstances in which a party inadvertently waives the privilege by missing a deadline. Cf. Tex. R. Civ. P. 193.3(d); In re Certain Underwriters at Lloyd’s London, 294 S.W.3d 891, 904 (Tex. App.—Beaumont 2009, orig. proceeding) (per curiam) (under Rule 193.3(d), party who fails to diligently screen documents before producing them does not waive claim of attorney-client privilege and rule was intended to restrict waiver in variety of situations that might arise from inadvertent disclosure of privileged documents). For these reasons, we decline to hold that the deliberative process privilege is on equal footing with the attorney-client privilege such that its application constitutes a compelling reason to withhold information. Unlike the attorney-client privilege, the deliberative process privilege does not “reflect a foundational tenet in law,” is not an “old and venerated” privilege, and is not unqualified. We conclude that the deliberative process privilege does not meet the Legislature’s requirement that a justification for withholding information presumed public be “compelling.” See Paxton, 509 S.W.3d at 258 (“The meaning of the term ‘compelling’ is of vital importance to our analysis because it represents a qualitative limitation on the justifications that permit withholding information from public disclosure.”). We overrule the Commission’s second issue. 16 May the Commission Withhold Documents It Claims Are Not Responsive to the PIA Request? In its third issue, the Commission asserts that the trial court erred by rejecting the Commission’s argument, raised for the first time in its third amended motion for summary judgment, that certain documents it seeks to withhold are not responsive to the Sierra Club’s PIA request. In its summary-judgment motion, the Commission identified six documents that it claimed were not responsive to the PIA request. The Commission stated that it had produced these documents “in an abundance of caution, as there was not adequate time to review all 6,414 pages of potentially responsive information provided by various TCEQ staff before the request for a ruling to the Attorney General was submitted.” Thus, the Commission sought a ruling from the district court that “certain portions of the information at issue are not responsive to the Sierra Club’s [PIA] request, and therefore, should not be released.” We conclude that the district court did not err in denying the Commission’s summary-judgment motion seeking to withhold documents on the ground that they are nonresponsive to a PIA request. The PIA provides that “the only suit a governmental body may file seeking to withhold information from a requestor is a suit that . . . seeks declaratory relief from compliance with a decision by the attorney general issued under Subchapter G.” Tex. Gov’t Code § 552.324 (emphasis added).2 Section 522.301 states that a governmental body may ask the attorney general for a decision about whether the information is within one of the exceptions under Subchapter C. Id. § 522.301. Subchapter C lists the various exceptions to the general rule that information collected, assembled, or maintained by or for a governmental body is public information and is available by request. Id. § 552.002(a); see Boeing Co. v. Paxton, 466 S.W.3d 831, 832 (Tex. 2015). Thus, a governmental agency may not seek declaratory relief in district court unless the relief it seeks is 2 The statute notes that “Subchapter G” refers to Texas Government Code sections 522.301-.309. 17 from an attorney general decision regarding application of one of the Subchapter C exceptions. There is no exception under Subchapter C for information that is claimed to be nonresponsive to a PIA request; therefore, the Commission could not assert nonresponsiveness of information as a basis for withholding it in the underlying suit. See Thomas v. Cornyn, 71 S.W.3d 473, 480-81 (Tex. App.—Austin 2002, no pet.).3 The district court properly denied the Commission’s request to withhold information on that basis. We overrule the Commission’s third appellate issue.4 CONCLUSION Having overruled the Commission’s three issues on appeal, we affirm the trial court’s order denying the Commission’s motion for summary judgment. We also affirm the trial court’s order granting the Sierra Club’s motion for summary judgment, ordering the Commission to produce to the Sierra Club the documents submitted in camera and marked with Bates Numbers 0001 through 6414, and awarding the Sierra Club attorneys’ fees and costs. 3 Consistent with the suit’s being limited to review of the attorney general’s decision regarding the application of a Subchapter C exception is Texas Government Code section 552.326, which provides that “the only exceptions to required disclosure within Subchapter C that a governmental body may raise in a suit filed under this chapter are exceptions that the governmental body properly raised before the attorney general in connection with its request for a decision regarding the matter under Subchapter G.” See Tex. Gov’t Code § 552.326. 4 On appeal the Commission asserts that because the Sierra Club should not have prevailed on its motion for summary judgment, the district court’s award of attorneys’ fees and costs should be reversed. Because we conclude that the district court did not err in granting the Sierra Club’s motion for summary judgment, we also affirm the award of attorneys’ fees and costs. 18 __________________________________________ Chari L. Kelly, Justice Before Chief Justice Byrne, Justices Kelly and Smith Affirmed Filed: November 22, 2022 19	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488569/	IN THE COMMONWEALTH COURT OF PENNSYLVANIA Daniel J. Cuttler, : Appellant : : v. : No. 173 C.D. 2022 : Submitted: October 11, 2022 Commonwealth of Pennsylvania, : Department of Transportation, : Bureau of Driver Licensing : BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE STACY WALLACE, Judge HONORABLE MARY HANNAH LEAVITT, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY SENIOR JUDGE LEAVITT FILED: November 22, 2022 Daniel J. Cuttler (Licensee) appeals an order of the Court of Common Pleas of the 37th Judicial District, Warren County Branch (trial court), denying his license suspension appeal and reinstating the Department of Transportation, Bureau of Driver Licensing’s (PennDOT) 12-month suspension of his operating privilege under Section 1547 of the Vehicle Code, 75 Pa. C.S. §1547, commonly referred to as the Implied Consent Law. Upon review, we affirm. Background On October 21, 2021, while on patrol, Conewango Township police officer Jason Woodin responded to a motor vehicle accident on Route 6. Upon arrival, he found a vehicle with the front end located in a ditch adjacent to a driveway leading to a residence. The weather was warm and sunny with no ice or snow on the roadway. Woodin encountered Licensee in the driveway, with a can of beer in his hand. Licensee informed Woodin that about one hour prior to the officer’s arrival, as he turned off Route 6 into the driveway, he slid into the ditch. Woodin knocked on the door to the residence; no one responded. No one else was at the scene. Woodin asked Licensee to perform field sobriety tests. Thereafter, he arrested Licensee for driving under the influence of alcohol (DUI) and transported him to a hospital for a blood test. Licensee refused the blood test despite being advised of the civil penalties that could result from his refusal. On October 26, 2021, PennDOT notified Licensee that his operating privilege would be suspended for a period of 12 months, effective December 7, 2021. Licensee appealed, asserting that Woodin did not have reasonable grounds to believe that he had been operating the vehicle under the influence of alcohol. The trial court held a de novo hearing, at which Woodin testified to the facts described above. In addition, Woodin testified that during their encounter Licensee continued to drink beer, and Woodin had to take the can from him because he refused to stop. Licensee had a strong odor of alcohol, but his speech was not slurred. Notes of Testimony, 1/27/2021, at 6-7 (N.T. __); Reproduced Record at 34a-35a (R.R. __). Woodin testified that the field sobriety tests showed “clues of impairment,” although Licensee indicated that he had a minor “knee problem.” N.T. 7; R.R. 35a. Woodin asked Licensee if he had been drinking before the accident, and Licensee responded that he had not. When Woodin advised Licensee that he “was under the influence,” Licensee agreed that he “probably would be over the legal limit because he had drank a couple beers.” N.T. 7; R.R. 35a. Woodin testified that based upon his observations at the scene of the accident, he believed that Licensee was “most likely” under the influence of alcohol at the time he was travelling on Route 6 and drove the vehicle into the ditch. N.T. 8; R.R. 36a. Woodin testified that later, at the hospital, he read the DL-26 form to 2 Licensee, and Licensee interrupted, stating that “you didn’t catch me driving.” N.T. 9; R.R. 37a. On cross-examination, Woodin acknowledged that his only evidence that Licensee was operating the motor vehicle under the influence of alcohol was its presence in the ditch. Woodin did not inspect the car to see if the car was warm in order to determine how recently it had been last operated. Woodin testified that no empty beer cans were found at the scene or in the vehicle. Licensee testified before the trial court. He testified that the weather was “dry” when the accident occurred, but it had rained earlier. N.T. 33; R.R. 61a. He “came in probably a little too fast to go into [his] buddy’s driveway and [his] front tire slipped over and [he] just missed the driveway and the car went into the ditch.” N.T. 33; R.R. 61a. Licensee testified that he then went into his friend’s garage and grabbed a beer. He had consumed “a few beers” by the time Woodin appeared, whom he met in the driveway. N.T. 33, 35; R.R. 61a, 63a. Licensee testified that he was drinking “after the fact,” and he told Woodin so. N.T. 34; R.R. 62a. On cross-examination, Licensee testified that he had consumed three or four beers between the time of the accident and his contact with Woodin. He did not recall telling Woodin that he had consumed two beers. Licensee also denied that he stated to Woodin at the hospital that “he didn’t catch me driving.” N.T. 36; R.R. 64a. His “exact words” were “I wasn’t driving under the influence. I was under the influence afterwards.” N.T. 36; R.R. 64a. Trial Court Decision On January 27, 2022, the trial court denied Licensee’s appeal, and Licensee appealed to this Court. In its opinion filed pursuant to Pennsylvania Rule 3 of Appellate Procedure 1925(a), PA. R.A.P. 1925(a),1 the trial court reasoned that Licensee’s testimony was “in large part, not credible” because it “appeared contrived to avoid a suspension.” Trial Court 1925(a) Op. at 6. The trial court discredited Licensee’s testimony that he was drinking only “after the fact.” Id. The trial court found, as a matter of fact, that Licensee did not tell Woodin that he had been drinking beer he found in his friend’s garage. Id. The trial court credited Woodin’s testimony and found as follows: The Court believes the testimony of the officer that [Licensee] simply acknowledged that he had been drinking and was under the influence at the time of his interaction with Officer Woodin. From Officer Woodin’s observation, he saw the driver of the vehicle take two sips from one can of beer and had no reason to believe that the beer was not with [Licensee] in the vehicle. No further alcohol containers were found on [Licensee’s] person, in his vehicle, or at the property nor did [Licensee] point out any such containers. Officer Woodin knew [Licensee] did not own the property. He knew the property owner was not home. He had no reason to suspect that [Licensee] had unlimited access to beer in the property owner’s garage after the accident and, even after the fact, this Court found [Licensee’s] testimony in this regard to lack credibility. The only credible evidence of [Licensee’s] imbibing after the accident was the testimony of Officer Woodin that he took two sips of beer, one after being instructed to stop. 1 The trial court’s 1925(a) opinion was issued without receiving Licensee’s PA. R.A.P. 1925(b) statement. On March 24, 2022, Licensee filed a petition for allowance to file the 1925(b) statement of errors complained of on appeal nunc pro tunc. R.R. 20a-23a. The trial court granted Licensee’s petition and accepted the 1925(b) statement as timely filed. The trial court also issued a supplemental 1925(a) opinion in response to the 1925(b) statement. 4 Trial Court 1925(a) Op. at 6-7. The trial court further found that Licensee’s statement to Woodin interrupting the DL-26 form warnings was “you didn’t catch me driving,” not “I only drank after the accident.” Trial Court 1925(a) Op. at 8. Based on the above findings, the trial court found that Woodin had reasonable grounds to believe that Licensee had operated a vehicle under the influence of alcohol. Licensee’s after-the-fact “incredible and inconsistent explanations as to his purported post-accident drinking” were not made known to Woodin during their encounter and could not factor into the reasonable grounds analysis. Trial Court 1925(a) Op. at 7. In its supplemental 1925(a) Opinion, the trial court explained that even without considering Licensee’s post-arrest statement, “you didn’t catch me driving,” the circumstances and observations that occurred prior to the arrest showed that Woodin had reasonable grounds for believing that Licensee had operated a vehicle under the influence of alcohol. Trial Court Suppl. 1925(a) Op. at 1-2. In any event, the trial court asserted that police officers can develop reasonable grounds to believe a motorist had committed a DUI offense “at any point during their encounter.” Id. at 2 (quoting Nornhold v. Department of Transportation, Bureau of Driver Licensing, 881 A.2d 59, 64 (Pa. Cmwlth. 2005)). Licensee appealed to this Court.2 Appeal On appeal, Licensee argues that the trial court erred in finding that Woodin had reasonable grounds to believe that Licensee had operated a vehicle 2 This Court’s review determines whether the trial court’s findings are supported by substantial evidence, whether errors of law have been committed, or whether the trial court’s determinations demonstrate a manifest abuse of discretion. Osselburn v. Department of Transportation, Bureau of Driver Licensing, 970 A.2d 534, 538 n.4 (Pa. Cmwlth. 2009). 5 under the influence of alcohol. Woodin found Licensee intoxicated approximately one hour after the accident, but this did not show that Licensee was intoxicated while driving. Licensee argues that Fierst v. Commonwealth, 539 A.2d 1389 (Pa. Cmwlth. 1988), and Stahr v. Department of Transportation, Bureau of Driver Licensing, 969 A.2d 37 (Pa. Cmwlth. 2009), control the result of this case. In Fierst, the police officer found the licensee at his home one hour after the accident, with a bottle of beer in his hand. In Stahr, a township officer found the licensee to be inebriated approximately one hour after the accident. In each case the licensee claimed to have consumed alcohol at his home after the accident. In both Fierst and Stahr, we reversed the trial court’s decision to uphold the license suspension. We held that given the gap of time between the accident and the encounter with the police, the arresting officer lacked reasonable grounds to believe the vehicle in the accident had been operated while the licensee was under the influence. Here, Licensee argues that, as in Fierst and Stahr, Woodin found Licensee at the scene one hour after the accident. While Licensee admitted to consuming beer and to being impaired, the objective evidence did not “close the gap in time” between the accident and the time Woodin encountered Licensee. Licensee Brief at 14. Licensee argues that the “only reasonable conclusion” to be drawn from the trial court’s findings of fact is that Licensee was drinking in the hour after the accident. Licensee Brief at 16. PennDOT responds that it made a prima facie case that Woodin had reasonable grounds to believe that Licensee drove his vehicle under the influence of alcohol. Woodin found Licensee’s vehicle in a ditch on a sunny, warm day and Licensee with a can of beer in his hand and smelling of alcohol. There was no one 6 at the house. Viewing these circumstances as they appeared at the time, Woodin had reasonable grounds to believe that Licensee was under the influence of alcohol when he drove the car into the ditch. A police officer is not required to see an intoxicated licensee operating a vehicle in order to have “reasonable grounds.” PennDOT Brief at 15 (quoting Walkden v. Department of Transportation, Bureau of Driver Licensing, 103 A.3d 432, 436 (Pa. Cmwlth. 2014), and Yencha v. Department of Transportation, Bureau of Driver Licensing, 187 A.3d 1038, 1044 (Pa. Cmwlth. 2018)). Acknowledging that Woodin found Licensee intoxicated an hour after the accident, PennDOT explains that “DUI criminal cases teach[] that alcohol is not intoxicating until absorbed into the bloodstream and that absorption takes place thirty to ninety minutes after consumption.” PennDOT Brief at 18 (quotations omitted). Further, the trial court discredited Licensee’s testimony that he was drinking only “after the fact.” Trial Court 1925(a) Op. at 6. PennDOT argues that Fierst and Stahr are distinguishable. In Fierst, the licensee was observed holding a bottle of beer at his home an hour after the accident; by contrast, here, Licensee was found holding a can of beer an hour after the accident outside another person’s home. In Stahr, the record did not show a timeline between the accident and the time the police officer encountered the licensee while he was under the influence of alcohol. It could have been over an hour. By contrast, here, approximately one hour had elapsed between the accident and the time Woodin arrived on scene. Analysis To sustain a suspension of a licensee’s operating privilege under the Implied Consent Law,3 PennDOT must establish that the licensee 3 Section 1547(a) of the Vehicle Code states in pertinent part: 7 (1) was arrested for driving under the influence by a police officer who had reasonable grounds to believe that the licensee was operating or was in actual physical control of the movement of the vehicle while under the influence of alcohol; (2) was asked to submit to a chemical test; (3) refused to do so; and (4) was warned that refusal might result in a license suspension. Banner v. Department of Transportation, Bureau of Driver Licensing, 737 A.2d 1203, 1206 (Pa. 1999). Licensee’s sole challenge on appeal is to the first prong. “Reasonable grounds exist when a person in the position of the police officer, viewing the facts and circumstances as they appeared at the time, could have concluded that the motorist was operating the vehicle while under the influence of intoxicating liquor.” Id. at 1207. Further, “[t]he standard of reasonable grounds to support a license suspension does not rise to the level of probable cause required for a criminal prosecution.” Id. This standard is determined by the totality of the circumstances, which may include “the location of the vehicle, whether the engine was running and whether there was other evidence indicating that the motorist had driven the vehicle at some point prior to the arrival of the police.” Id. “Whether (a) General rule.--Any person who drives, operates or is in actual physical control of the movement of a vehicle in this Commonwealth shall be deemed to have given consent to one or more chemical tests of breath or blood for the purpose of determining the alcoholic content of blood or the presence of a controlled substance if a police officer has reasonable grounds to believe the person to have been driving, operating or in actual physical control of the movement of a vehicle in violation of section 1543(b)(1.1) (relating to driving while operating privilege is suspended or revoked), 3802 (relating to driving under influence of alcohol or controlled substance) or 3808(a)(2) (relating to illegally operating a motor vehicle not equipped with ignition interlock). 75 Pa. C.S. §1547(a) (emphasis added). Section 1547(b)(1) of the Vehicle Code states that “[i]f any person placed under arrest for a violation of section 3802 is requested to submit to chemical testing and refuses to do so,” PennDOT shall suspend the operating privilege for 12 or 18 months under certain conditions. 75 Pa. C.S. §1547(b)(1). 8 reasonable grounds exist is a question of law reviewable by an appellate court on a case-by-case basis.” Id. It is not necessary for an officer to witness a licensee operating a vehicle in order for the officer to have reasonable grounds to arrest the licensee for a suspected DUI offense. Department of Transportation, Bureau of Driver Licensing v. Bendik, 535 A.2d 1249, 1251 (Pa. Cmwlth. 1988) (“As a result of the 1982 amendment to Section 1547, it was not necessary that the appellee be observed behind the steering wheel of the vehicle while it is in motion.”). When an officer does not observe the licensee behind the wheel, there must be a showing of some other objective evidence establishing the timeframe “between the licensee’s driving and the licensee’s intoxication.” Sestric v. Department of Transportation, Bureau of Driver Licensing, 29 A.3d 141, 144 (Pa. Cmwlth. 2011). Simply because other inferences are possible does not render an arresting officer’s belief unreasonable. Polinsky v. Department of Transportation, 569 A.2d 425, 427 (Pa. Cmwlth. 1990). Further, an officer’s reasonable grounds are not rendered void if it is later discovered that the officer’s belief was erroneous. McCallum v. Commonwealth, 592 A.2d 820, 822 (Pa. Cmwlth. 1991). Here, based on Woodin’s credited testimony, the trial court found that Licensee drove his vehicle into a ditch on a sunny, warm day. When Woodin arrived at the scene about an hour later, he found Licensee was standing in another person’s driveway, with a can of beer in his hand and emitting a strong odor of alcohol. There was no one home. Although Licensee testified that he had consumed beers found in the property owner’s garage after the accident, the trial court did not credit that testimony. In any case, there was no reason for Woodin to infer that Licensee had removed beer he admitted drinking from the home of an absent owner. Viewing the 9 circumstances as they appeared, Woodin had reasonable grounds to believe that Licensee had been under the influence of alcohol when he drove the vehicle into the ditch. Banner, 737 A.2d at 1207. Licensee asserts the trial court abused its discretion because PennDOT presented no “objective evidence” that he had operated the vehicle while he was under the influence of alcohol. Licensee Brief at 7. Licensee asserts that the record established only “that [Licensee] was consuming alcohol after operating the motor vehicle.” Licensee Brief at 8. However, the trial court found Licensee’s testimony “inconsistent” and “contrived to avoid a suspension.” Trial Court 1925(a) Op. at 6. The trial court did not believe that Licensee “had unlimited access to beer in the property owner’s garage after the accident” when the owner was not home. Trial Court 1925(a) Op. at 6-7. Even so, there was no reason for Woodin to suppose that was the case. “As factfinder, the trial court is required to observe witnesses and their demeanor in order to make credibility determinations.” Pollock v. Department of Transportation, Bureau of Driver Licensing, 634 A.2d 852, 855 (Pa. Cmwlth. 1993). Questions of evidentiary weight and conflicts in the testimony fall to the trial court’s resolution. Hasson v. Department of Transportation, Bureau of Driver Licensing, 866 A.2d 1181, 1186 (Pa. Cmwlth. 2005). This Court explained in Mooney v. Department of Transportation, Bureau of Driver Licensing, 654 A.2d 47 (Pa. Cmwlth. 1994), that [a]s long as sufficient evidence exists in the record which is adequate to support the finding found by the trial court, as factfinder, [an appellate court is] precluded from overturning that finding and must affirm, thereby paying the proper deference due to the factfinder who heard the witnesses testify and was in the sole position to observe the demeanor of the witnesses and assess their credibility. 10 Id. at 50 (emphasis added) (quoting Department of Transportation, Bureau of Traffic Safety v. O’Connell, 555 A.2d 873, 875 (Pa. 1989)). Here, both Woodin and Licensee testified in person before the trial court. The trial court credited Woodin’s testimony and discredited Licensee’s testimony. Fierst and Stahr are distinguishable because in both cases, the drinking occurred in the homes of the licensees. By contrast, here, Licensee remained at the scene and was found standing in the driveway of another person’s house drinking beer. It was reasonable for Woodin to infer Licensee brought the beer in his car because there was no one in the house. Woodin had no reason to suppose that Licensee got the beer from a house where no one was home. Finally, Licensee asserts that the trial court erred in considering statements made by Licensee after he was arrested, specifically, “you didn’t catch me driving.” Licensee Brief at 19. The trial court relied upon Nornhold, 881 A.2d at 64, in which this Court stated that a police officer may develop reasonable grounds to believe a motorist had committed a DUI offense “at any point during their encounter.” In Nornhold, a trooper investigating a traffic violation followed the licensee into her house and, then, observed that her eyes were bloodshot and she smelled of alcohol. Based upon his observations and the licensee’s erratic driving, the trooper asked her to perform field sobriety tests, which she failed. The licensee refused to submit to chemical testing, and her operating privilege was suspended. This Court held that the trooper developed reasonable grounds to believe that the licensee was driving under the influence of alcohol in the course of their encounter. Nornhold does not support the trial court’s decision. In Nornhold, the licensee was arrested for a traffic violation. Thereafter, during their encounter, the officer realized that she was under the influence of alcohol and arrested her for DUI. 11 Here, Licensee’s statement, which the trial court believed to show Licensee’s guilt, was made after Licensee had already been arrested for DUI. However, the law required Woodin to have reasonable grounds to believe Licensee had been driving under the influence before arresting Licensee for DUI. In any event, the trial court explained, and we agree, that even without considering the post-arrest statement, “you didn’t catch me driving,” the record established that a person in Woodin’s position could reasonably infer that Licensee had been driving his vehicle under the influence of alcohol when he found the vehicle in a ditch on a clear day. Trial Court Suppl. 1925(a) Op. at 2. Conclusion For the foregoing reasons, we conclude that Officer Woodin had reasonable grounds to suspect that Licensee had driven while under the influence of alcohol. We thus affirm the trial court’s January 27, 2022, order. ____________________________________________ MARY HANNAH LEAVITT, President Judge Emerita 12 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Daniel J. Cuttler, : Appellant : : v. : No. 173 C.D. 2022 : Commonwealth of Pennsylvania, : Department of Transportation, : Bureau of Driver Licensing : ORDER AND NOW, this 22nd day of November, 2022, the order of the Court of Common Pleas of the 37th Judicial District, Warren County Branch, in the above- captioned case, dated January 27, 2022, is AFFIRMED. ____________________________________________ MARY HANNAH LEAVITT, President Judge Emerita	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488577/	TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN JUDGMENT RENDERED NOVEMBER 22, 2022 NO. 03-22-00647-CV Appellant, Christopher Reese/ Cross-Appellant, George Scott, Appellant v. Appellees, George Scott et al.// Cross-Appellee, Christopher Reese, Appellee APPEAL FROM THE JUSTICE COURT PRECINCT 4 OF BLANCO COUNTY BEFORE CHIEF JUSTICE BYRNE, JUSTICES TRIANA AND SMITH DISMISSED FOR WANT OF JURISDICTION – OPINION BY CHIEF JUSTICE BYRNE This is an appeal from the judgment signed by the trial court on September 26, 2022. Having reviewed the record, it appears that the Court lacks jurisdiction over the appeal. Therefore, the Court dismisses the appeal for want of jurisdiction. Each party shall bear its own costs relating to this appeal, both in this Court and in the court below	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488582/	COURT OF APPEALS OF VIRGINIA Present: Judges Fulton, Ortiz and Senior Judge Petty UNPUBLISHED Argued at Lexington, Virginia JERMAINE DARELL CABELL, A/K/A JERMAINE DARNELL CABELL, A/K/A JERMAINE D. CAMELL MEMORANDUM OPINION* BY v. Record No. 1397-21-3 JUDGE JUNIUS P. FULTON, III NOVEMBER 22, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF AUGUSTA COUNTY Anne F. Reed, Judge Jennifer T. Stanton, Senior Assistant Public Defender (Indigent Defense Commission, on briefs), for appellant. William K. Hamilton, Assistant Attorney General (Jason S. Miyares, Attorney General; Liam A. Curry, Assistant Attorney General, on brief), for appellee. Jermaine Darell Cabell appeals his conviction, following a bench trial, of possession of methamphetamine, in violation of Code § 18.2-250. Cabell asserts that the Augusta County Circuit Court (“trial court”) erred in denying his motion to strike when it found the evidence sufficient to prove that he knowingly and intelligently possessed methamphetamine. For the following reasons, we disagree, and affirm the conviction. BACKGROUND On appeal, we recite the facts “in the ‘light most favorable’ to the Commonwealth, the prevailing party in the trial court.” Hammer v. Commonwealth, 74 Va. App. 225, 231 (2022) (quoting Commonwealth v. Cady, 300 Va. 325, 329 (2021)). Doing so requires that we “discard the * Pursuant to Code § 17.1-413, this opinion is not designated for publication. evidence of the accused in conflict with that of the Commonwealth, and regard as true all the credible evidence favorable to the Commonwealth and all fair inferences to be drawn therefrom.” Cady, 300 Va. at 329 (quoting Commonwealth v. Perkins, 295 Va. 323, 323-24 (2018)). On December 7, 2020, Virginia State Trooper Jason Cappo initiated a traffic stop of a vehicle for failing to maintain its lane. When Trooper Cappo approached the vehicle, he noticed the vehicle’s registration was expired; Nicole Alexander was the driver, and Cabell was the front seat passenger. Because Cabell did not have his seat belt engaged, Trooper Cappo obtained his identifying information along with Alexander’s. Augusta County Sheriff’s Deputy Gale testified that he responded to the stopped vehicle to assist Trooper Cappo. It was dark, and the vehicle was lit up by the lights from the police car. While Trooper Cappo spoke with Alexander, Deputy Gale spoke with Cabell. Deputy Gale observed that Cabell was “fidgety, moving, hands moving, [and] talkative.” Deputy Gale further testified that while Cabell was still sitting in the front passenger’s seat, Cabell was “maneuvering his hands in a way that [Gale] couldn’t really see, so [Gale] had him step out of the vehicle.” After Trooper Cappo confirmed Cabell and Alexander’s identities and learned that the vehicle was registered to neither Cabell nor Alexander, he returned to the vehicle and asked for Alexander’s consent to search the vehicle. Cabell then interjected that he was the owner or potential purchaser of the vehicle. Cabell, however, could not provide any ownership documentation. Deputy Gale could not remember any direct statements Cabell made about ownership of the vehicle but did remember that Cabell was “in the process of purchasing the vehicle.” Alexander consented to the search, and Trooper Cappo began on the vehicle’s passenger side. He found a “black zippered pouch on the passenger seat next to the center console,” which contained a “broken glass pipe with residue and a blue and white pipe.” “Directly next to the passenger seat on the floor near the door was a clear—small clear plastic baggie with white -2- residue.” Trooper Cappo did not “have to look very hard to find [the plastic bag]” as “it was very apparent to [him]” when he began searching. Field testing confirmed that the white residue in the plastic bag was methamphetamine. In addition, several clear plastic tubes with white residue were on the passenger side floorboard and under the passenger seat. When Trooper Cappo asked Cabell about the items found in the vehicle, he initially denied knowledge of the narcotics. Cabell was arrested and transported to the sheriff’s office, where Trooper Cappo spoke with Cabell again and inquired about the plastic tubes’ purpose. Cabell stated that the plastic tubes were used to change gears. Cabell also admitted that he had consumed methamphetamine four days earlier. Trooper Cappo acknowledged that Cabell was cooperative but observed that he was “defensive” and became “extremely hyper, [and] very emotional” when questioned about the items found. After the conclusion of the Commonwealth’s evidence, Cabell moved to strike, arguing that the Commonwealth failed to prove he knew the illicit drugs were in the vehicle. He asserted that his mere proximity to the drugs was insufficient. The trial court overruled the motion. Cabell testified that he and his then girlfriend, Alexander, were moving into his cousin’s home in Fishersville because they had been living in homeless shelters and staying with other relatives. They were traveling in Alexander’s recently purchased vehicle when Trooper Cappo stopped them. The vehicle was difficult to drive because the gearshift was malfunctioning, and items had to be inserted into the gearbox to change gears. Cabell claimed that because he suffered from epileptic seizures, he was unable to drive. When Trooper Cappo asked him about the plastic tubes found in the vehicle, he thought the trooper was discussing the pen he had used to change the gears from neutral to park. He denied knowledge of the plastic bag Trooper Cappo recovered from the passenger side floorboard and stated that the day of the stop was the first time he had been in the vehicle. He asserted that in the weeks before, Alexander had allowed individuals she knew from the -3- shelter to sleep in the vehicle. Finally, Cabell insisted that he had told Trooper Cappo that Alexander was buying the vehicle, not him. After the close of the evidence, Cabell incorporated a renewed motion to strike within his closing argument. He argued that his apparent statements about ownership are not dispositive because mere ownership of the vehicle is insufficient to establish that he knew about the drugs or constructively possessed them. And although he made statements regarding his recent methamphetamine use, his general knowledge of methamphetamine did not create an inference that he was aware of the plastic bag on December 7. The drugs, he argued, were not found in plain view because the bag was shoved between the door and the seat. It was dark when the stop occurred, and he did not see the bag before he entered the vehicle. Furthermore, there is no evidence that he was in the vehicle for a significant amount of time. Although there is evidence of other drug paraphernalia, that evidence was never tested, and it is unclear what type of residue was on those items. Consequently, he argued, the Commonwealth only established a suspicion of guilt. The trial court disagreed and convicted Cabell of possession of methamphetamine. The trial court found that the drugs were located between the passenger seat and the door. Cabell had admitted to consuming methamphetamine before this incident and that he was emotional when talking about the items found. The court also found that Cabell’s testimony at trial conflicted with “statements Trooper Cappo testified [Cabell] made at the time” of the stop. Cabell’s prior statements indicated that he was purchasing the vehicle; Cabell’s testimony at trial, however, was that he had no ownership in the vehicle. The court reasoned that this discrepancy was “telling.” The court sentenced Cabell to two years of incarceration for possession of methamphetamine, with all but nine months suspended. This appeal followed. -4- STANDARD OF REVIEW “When reviewing the sufficiency of the evidence, ‘[t]he judgment of the trial court is presumed correct and will not be disturbed unless it is plainly wrong or without evidence to support it.’” McGowan v. Commonwealth, 72 Va. App. 513, 521 (2020) (alteration in original) (quoting Smith v. Commonwealth, 296 Va. 450, 460 (2018)). “In such cases, ‘[t]he Court does not ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’” Id. (alteration in original) (quoting Secret v. Commonwealth, 296 Va. 204, 228 (2018)). “Rather, the relevant question is whether ‘any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” Vasquez v. Commonwealth, 291 Va. 232, 248 (2016) (quoting Williams v. Commonwealth, 278 Va. 190, 193 (2009)). “If there is evidentiary support for the conviction, ‘the reviewing court is not permitted to substitute its own judgment, even if its opinion might differ from the conclusions reached by the finder of fact at the trial.’” McGowan, 72 Va. App. at 521 (quoting Chavez v. Commonwealth, 69 Va. App. 149, 161 (2018)). ANALYSIS Cabell asserts that the trial court erred when it denied his motion to strike because the evidence was insufficient to prove that he knew of the presence, nature, and character of the methamphetamine or that it was subject to his dominion and control. He argues that he did not own the vehicle but was merely a first-time passenger and had not been in the vehicle for a significant amount of time. Even if he asserted ownership, however, that alone is insufficient to prove he exercised dominion and control over the methamphetamine. Indeed, he maintains that it would be irrational for him to claim ownership of the vehicle if he was aware of the presence of methamphetamine. He further contends that the drugs were not found in plain view and that he made no incriminating statements nor movements indicating he was aware of the presence of methamphetamine. Emphasizing the lack of forensic evidence, Cabell maintains that his mere -5- proximity to the drugs was insufficient to sustain his conviction. Thus, he concludes that the methamphetamine could have been left in the car by Alexander, the primary user of the vehicle, or an unknown person from the shelter who had recently slept in the vehicle. “It is unlawful for any person knowingly or intentionally to possess a controlled substance.” Code § 18.2-250. “In order to convict a person of illegal drug possession, the Commonwealth must prove beyond a reasonable doubt that the accused was aware of the presence and character of the drug and that the accused consciously possessed it.” Yerling v. Commonwealth, 71 Va. App. 527, 532 (2020) (citing Jones v. Commonwealth, 17 Va. App. 527, 532 (1994)). Possession of contraband “may be actual or constructive.” Hall v. Commonwealth, 69 Va. App. 437, 448 (2018). “[P]roof of actual possession is not required; proof of constructive possession will suffice.” Yerling, 71 Va. App. at 532 (quoting Walton v. Commonwealth, 255 Va. 422, 426 (1998)). The Commonwealth can prove constructive possession by showing that there are “acts, statements, or conduct of the accused or other facts or circumstances which tend to show that the [accused] was aware of both the presence and character of the substance and that it was subject to his dominion and control.” Id. (alteration in original) (quoting Drew v. Commonwealth, 230 Va. 471, 473 (1986)). “Mere proximity to a controlled drug is not sufficient to establish dominion and control.” Id. Additionally, although “ownership or occupancy alone is insufficient to prove knowing possession of [contraband] located on the premises or in a vehicle,” circumstantial evidence coupled with ownership or occupancy often establishes the constructive possession of such contraband. Burchette v. Commonwealth, 15 Va. App. 432, 435 (1992). “Circumstantial evidence is as competent and is entitled to as much weight as direct evidence, provided it is sufficiently convincing to exclude every reasonable hypothesis except that of guilt.” Sarka v. Commonwealth, 73 Va. App. 56, 67 (2021) (quoting Coleman v. Commonwealth, 226 Va. 31, 53 (1983)). “Ultimately, ‘the issue [of what constitutes constructive possession] is largely a factual -6- one’ left to the trier of fact, not the appellate court.” Bagley v. Commonwealth, 73 Va. App. 1, 28 (2021) (alternation in original) (quoting Smallwood v. Commonwealth, 278 Va. 625, 630 (2009)). “Merely because [a] defendant’s theory of the case differs from that taken by the Commonwealth does not mean that every reasonable hypothesis consistent with his innocence has not been excluded. What weight should be given evidence is a matter for the [factfinder] to decide.” Edwards v. Commonwealth, 68 Va. App. 284, 301 (2017) (alterations in original) (quoting Haskins v. Commonwealth, 44 Va. App. 1, 9 (2004)). “By finding [a] defendant guilty, therefore, the factfinder ‘has found by a process of elimination that the evidence does not contain a reasonable theory of innocence.’” Id. (alteration in original) (quoting Haskins, 44 Va. App. at 9). “While a factfinder may not arbitrarily disregard a reasonable doubt, whether ‘the hypothesis of innocence is reasonable is itself a “question of fact,” subject to deferential appellate review.’” Burton v. Commonwealth, 58 Va. App. 274, 285-86 (2011) (quoting Clanton v. Commonwealth, 53 Va. App. 561, 572 (2009) (en banc)). Consistent with those principles, it is well-established that a defendant’s immediate proximity to contraband that is plainly visible is sufficient to support a finding of constructive possession, even when others are present. In Bolden v. Commonwealth, 275 Va. 144, 149 (2008), for example, the Supreme Court concluded that a defendant constructively possessed “open and obvious” contraband that was “located in immediate proximity to where [the defendant] had been sitting.” See also Brown v. Commonwealth, 5 Va. App. 489, 492-93 (1988) (holding that a defendant constructively possessed cocaine that was in “plain view” on a bed and “within arm’s reach” of the defendant even though two other men were sitting on the bed on either side of the cocaine). Similarly, the Supreme Court has held that the driver of a “small” -7- vehicle constructively possessed a handgun that was in “plain view” on an “open console” between him and a front-seat passenger. Smallwood, 278 Va. at 628, 631-32. Here, the evidence, viewed in the light most favorable to the Commonwealth, establishes that the methamphetamine was plainly visible “[d]irectly next to [Cabell’s] seat on the floor.” Although Cabell argues that the methamphetamine was not in plain view, Trooper Cappo testified that he did not “have to look very hard to find [the plastic bag],” as “it was very apparent to [him]” when he began his search. That testimony, viewed in the light most favorable to the Commonwealth, belies Cabell’s argument. See Hamilton v. Commonwealth, 16 Va. App. 751, 754-55 (1993) (holding that the drugs found within the defendant’s reach on the passenger side floorboard of a vehicle driven by the defendant were subject to her dominion and control). Moreover, a “black zippered pouch” containing suspected paraphernalia with white residue was on Cabell’s seat near the center console. See Wymer v. Commonwealth, 12 Va. App. 294, 301 (1991) (holding that “[t]he bent straw with cocaine residue found in [the defendant’s] purse along with the paraphernalia used to consume marijuana are sufficiently related to the items found in or on [the defendant’s] dresser and are additional facts which permitted the fact finder to infer that appellant knew of the presence of cocaine”). In addition, Cabell’s statements and actions provide further evidence that he was aware of the methamphetamine in the vehicle and exercised dominion and control over it. First, we have held that from a defendant’s “admitted prior cocaine use and the location and visibility of the cocaine, [a] trial court could reasonably infer that [the defendant] was aware of the presence and character of the cocaine.” Brown, 5 Va. App. at 492. Here, Cabell admitted that he had consumed methamphetamine four days prior, which is probative evidence that he was aware of the presence and character of the methamphetamine plainly visible next to his seat. Cabell was fidgety, talkative, and moving his hands. Further, Deputy Gale testified that he arrived at the scene after the stop by -8- Trooper Cappo. Gale testified that, while still in the front passenger’s seat, Cabell was furtively moving his hands in a way that Deputy Gale could not see. Deputy Gale then had him step out of the vehicle. Trooper Cappo also testified that Cabell was “defensive” and became “extremely hyper, [and] very emotional” when questioned about the items found. These furtive movements together with Cabell’s defensive and emotional reaction and the presence of methamphetamine between the seat where Cabell was sitting and the door are sufficient to warrant a reasonable person to believe that Cabell was aware of the presence and character of the methamphetamine. Copeland v. Commonwealth, 42 Va. App. 424, 438, 440 (2004) (finding that the defendant’s furtive movements along with the presence of cocaine in plain view and in proximity to the defendant supported the reasonable inference he was aware of the character and nature of the substance and its existence in the car). Cabell suggests that the evidence failed to exclude the hypothesis that another person, such as an unknown person from the shelter, left the methamphetamine in the car. “While a factfinder may not arbitrarily disregard a reasonable doubt, whether ‘the hypothesis of innocence is reasonable is itself a “question of fact,” subject to deferential appellate review.’” Burton, 58 Va. App. at 285-86 (quoting Clanton, 53 Va. App. at 572). It is well-established that, “in drawing inferences from the evidence, the fact finder may conclude . . . [that the] defendant[’s] . . . false statements established that he has lied to conceal his guilt.” Rams v. Commonwealth, 70 Va. App. 12, 27 (2019). Once the fact finder concludes that the defendant’s testimony is not credible, it may treat his “prevarications as ‘affirmative evidence of guilt.’” Sierra v. Commonwealth, 59 Va. App. 770, 784 (2012) (quoting Armstead v. Commonwealth, 56 Va. App. 569, 581 (2010)). Moreover, in “cases involving possession of contraband, such an inference qualifies as evidence that tends to show that the defendant was aware of the contraband and that it was subject to his dominion and control.” Cordon v. Commonwealth, -9- 280 Va. 691, 695 (2010). Here, Cabell told Trooper Cappo during the incident that the car was his or that he was in the process of buying it. At trial, however, he claimed that Alexander owned the vehicle, he was merely a passenger, and that December 7 was the first time he had been in the vehicle. The trial court found Cabell’s inconsistent statements to be the “most compelling” evidence of his guilty knowledge of the presence and character of the methamphetamine. Given the evidence at trial, the trial court was entitled to disbelieve Cabell’s denials and assertion of innocence. The dissent suggests that no reasonable trier of fact could have found beyond a reasonable doubt that Cabell was aware of and constructively possessed the black zippered pouch. The dissent also suggests that the clear plastic baggie was not in plain view and the record is not sufficient to attribute knowledge of this baggie to Cabell. The dissent further suggests that Cabell’s statements are not inconsistent, and do not provide affirmative evidence of his guilt. Finally, the dissent suggests that Cabell’s hand movements were not “furtive” as they are consistent with Cabell’s testimony that he was shifting the car to park. These conclusions go beyond the appellate function by engaging in impermissible fact-finding. “When reviewing the sufficiency of the evidence, ‘[t]he judgment of the trial court is presumed correct and will not be disturbed unless it is plainly wrong or without evidence to support it.’” Smith, 296 Va. at 460 (alteration in original) (quoting Perkins, 295 Va. at 327). Our standard of review does not permit us to substitute our judgment of facts as determined by the trial court. Consequently, “[i]n such cases, ‘[t]he Court does not ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’” Secret, 296 Va. at 228 (second alteration in original) (quoting Pijor v. Commonwealth, 294 Va. 502, 512 (2017)). “Rather, the relevant question is whether ‘any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” Vasquez, 291 Va. at 248 (quoting Williams, 278 Va. at 193). “If there is evidentiary support for the conviction, - 10 - ‘the reviewing court is not permitted to substitute its own judgment, even if its opinion might differ from the conclusions reached by the finder of fact at the trial.’” Chavez, 69 Va. App. at 161 (quoting Banks v. Commonwealth, 67 Va. App. 273, 288 (2017)). For the reasons stated above, the trial court was entitled to find that Cabell was aware of the black zippered pouch and the plastic baggie. The trial court was entitled to infer that Cabell was aware of the presence and character of the drug paraphernalia found in the car from his admission that he had previously used methamphetamine. Finally, the trial court was entitled to find that Cabell’s hand movements were not related to any attempt to engage the car’s gearshift but were furtive and suspicious. In sum, the above evidence could allow a reasonable fact finder to conclude that Cabell knowingly and intentionally possessed methamphetamine. Accordingly, we will not disturb the trial court’s denial of the motion to strike on appeal. CONCLUSION The evidence at trial sufficiently proved Cabell possessed the methamphetamine found in the vehicle. The trial court’s ruling was not plainly wrong or without evidence to support it. Accordingly, we affirm the conviction. Affirmed. - 11 - Ortiz, J., dissenting. I respectfully dissent from the Court’s affirmance of Cabell’s conviction. Even viewed in the light most favorable to the Commonwealth, I find the evidence insufficient to establish that Cabell knowingly possessed methamphetamine in violation of Code § 18.2-250. Although we review the sufficiency of the evidence with a highly deferential standard, we must still examine whether any “rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Williams v. Commonwealth, 278 Va. 190, 193 (2009) (emphasis added). “Circumstances of suspicion, no matter how grave or strong, are not proof of guilt sufficient to support a verdict of guilty.” Crisman v. Commonwealth, 197 Va. 17, 21 (1955). “The guilt of a party is not to be inferred because the facts are consistent with his guilt, but they must be inconsistent with his innocence.” Camp v. Commonwealth, 14 Va. App. 879, 884 (1992) (quoting Cameron v. Commonwealth, 211 Va. 108, 110-11 (1970)). While the majority cites evidence supporting the trial court’s guilty finding, each piece of evidence is consistent with Cabell’s innocence. The totality of the evidence establishes, at most, a mere suspicion of guilt. I. The methamphetamine was in proximity but not in plain view. I agree with the majority that “mere proximity to a controlled drug is not sufficient to establish dominion and control.” Yerling v. Commonwealth, 71 Va. App. 527, 532 (2020). I further agree that immediate proximity combined with plain view of the controlled drug would support a finding of constructive possession. Here, however, the drugs were not in plain view. First, the suspected paraphernalia on Cabell’s seat was found in an opaque “black zippered pouch.” The paraphernalia was not visible without opening the pouch. Unlike in Wymer v. Commonwealth, 12 Va. App. 294 (1991), where a bent straw with cocaine residue was found in the defendant’s purse, here, nothing in the record but mere proximity suggests that the - 12 - pouch belonged to Cabell. Given the uncontested fact that Cabell did not own the car, no rational trier of fact could have found beyond a reasonable doubt that Cabell knew of the pouch, which was not his and was in a car that was not his, opened the pouch, and saw the suspected paraphernalia. Second, the “small clear plastic baggie with white residue” found “[d]irectly next to the passenger seat on the floor near the door” was also not in plain view. The uncontested evidence shows that it was nighttime and was “dark” except for “the lights from the police car” on the vehicle. Although Trooper Cappo testified that he did not “have to look very hard to find” the baggie, he approached the passenger side with an intent to search the vehicle, not with an intent to be a mere passenger. Finally, and most importantly, the baggie was not full of white powder. Nor did it contain any pipes or other paraphernalia. Rather, it was a small, empty bag with some residue. It was not only less noticeable, but also much less valuable and more likely to have been left there by another person. See Brown v. Commonwealth, 15 Va. App. 1, 9 (1992) (en banc) (finding that a factfinder could “infer from the value of drugs found on premises owned or occupied by an individual that it is unlikely anyone who is a transient would leave a thing of great value in a place not under his dominion and control”). No rational trier of fact could have found beyond a reasonable doubt that Cabell both noticed the small, empty plastic bag, that was not in plain view, and recognized a bit of residue as methamphetamine, while getting into the car at night. Third, the “clear plastic pipes with white residue” on the passenger-side floorboard were not in plain view. Trooper Cappo admitted as much when he stated that he did not find the pipes until he “actually looked underneath the seat.” In fact, the trial court did not conclude that the methamphetamine was in plain view. In finding Cabell guilty, the trial court explicitly noted the location of the drug—“between the - 13 - passenger seat and the door”—but did not find it to be in plain view, which was understandable given the evidence. The trial court acknowledged that this case was a “difficult case” with “largely circumstantial” evidence and based its ruling primarily on Cabell’s inconsistent statements regarding the ownership of the car, not on plain view. While we should not “substitute” our own factual findings for the trial court’s findings, neither should we justify the trial court’s conclusion with additional factual findings. II. Cabell’s statements regarding the ownership of the car are not affirmative evidence of his guilt. Although the majority cites several cases for the proposition that a defendant’s false statements can affirmatively show his guilt, in each of these cases, the defendant made a self-serving statement falsely denying the circumstances of a crime. In Rams v. Commonwealth, 70 Va. App. 12 (2019), a capital murder defendant lied about the temperature of the victim to suggest that a febrile seizure, rather than the defendant, killed the victim. In Sierra v. Commonwealth, 59 Va. App. 770, 784 (2012), a defendant attempted to defeat the knowledge element of a possession crime by falsely claiming that he “thought the pills were aspirin and Tylenol.” In Cordon v. Commonwealth, 280 Va. 691 (2010), the defendant initially referred to a bedroom as “his” bedroom but later denied ownership upon learning that cocaine was found in the room. The Supreme Court found that even “assuming his denial gave rise to an inference that he was lying to conceal guilt and thus tended to show his knowledge and control of the cocaine, that inference along with the remaining evidence falls far short of” sufficiency to support his conviction. Id. at 696. When a defendant makes a false statement on a collateral matter, without falsely denying the circumstances of a crime, the factfinder is not entitled to make the same inference. In Clodfelter v. Commonwealth, 218 Va. 619 (1977), the defendant was the sole occupant of a hotel room where drugs were found, and he gave a false identity when questioned by the police. The - 14 - Supreme Court found that although “this evidence creates a strong suspicion of guilt,” it “falls short of showing beyond a reasonable doubt that the drugs found in the hotel room were ever actually or constructively possessed by Clodfelter with an awareness of their character.” Id. at 623. Here, Cabell told Trooper Cappo that he was going to purchase the car. Nothing in the record suggests that Cabell in fact owned, was planning to purchase, or had ever ridden in the car, and Cabell later testified instead that his girlfriend was planning to purchase the car. Based on the record, to the extent that Cabell made a false statement, he falsely claimed, rather than disclaimed, his relationship with the car. This case is the opposite of Sierra or Cordon, where the defendant falsely denied knowledge or ownership of the drugs. The trial court could certainly disbelieve or disregard Cabell’s testimony that he did not own the car or the drugs, but absent affirmative evidence that he did own either, the trial court could not assume that he was lying and then infer that he knew about the drugs. See White v. Commonwealth, 68 Va. App. 111, 123 (2017) (finding in a child abuse and neglect case that although the “trial court was entitled to disbelieve or disregard” the defendant’s testimony that she did not know the potential hazard, the Commonwealth “failed . . . to present evidence from which the trial court could infer [the defendant] did know”); Payne v. Graves, 32 Va. 561, 572 (1834) (rejecting a “process of assuming a first position, and then piling inference upon inference”). The trial court found “discrepancy” in Cabell’s statements—and deemed it the “most compelling” evidence—without determining which of the statements were false. I do not question the trial court’s finding of discrepancy but find the discrepancy insufficient to support the conviction. III. Cabell’s statements regarding the plastic tubes are not affirmative evidence of his guilt. The standard of review requires us to “discard” not all evidence of the accused, but any evidence “in conflict with that of the Commonwealth.” Commonwealth v. Cady, 300 Va. 325, - 15 - 329 (2021) (quoting Commonwealth v. Perkins, 295 Va. 323, 323-24 (2018)). When “the facts are ‘equally susceptible of two interpretations one of which is consistent with the innocence of the accused, [the trier of fact] cannot arbitrarily adopt that interpretation which incriminates [the accused].’” Jay v. Commonwealth, 275 Va. 510, 527 (2008) (alterations in original) (quoting Burton v. Commonwealth, 108 Va. 892, 899 (1908)). Here, Trooper Cappo testified that Cabell initially denied knowledge of the drugs and paraphernalia but later, when questioned about the plastic tubes, explained that he used them to change gears. Cabell testified that he misunderstood the question to be about the pen he used to replace the broken gearshift handle. Nothing in Trooper Cappo’s testimony is “in conflict with” Cabell’s explanation. In fact, Trooper Cappo confirmed that the gearshift seemed broken. Therefore, the trial court could not “arbitrarily adopt” an incriminating interpretation of Trooper Cappo’s testimony when it is “equally susceptible of” another interpretation, consistent with Cabell’s innocence. IV. Cabell’s hand movements in the car and reaction to questioning are consistent with his innocence. The majority finds that Cabell’s “furtive movements” and “defensive and emotional reaction” to questioning, combined with the methamphetamine found next to his seat, support a finding that Cabell knowingly possessed the methamphetamine. However, the record does not show that Cabell’s hand movements were “furtive,” and again, the trial court did not make such a finding. Neither the trial court nor the Commonwealth mentioned the word “furtive” during the trial. Deputy Gale testified only that Cabell was “maneuvering his hands in a way that [Deputy Gale] couldn’t really see.” This observation is consistent with Cabell’s testimony that he was shifting the car to park with a broken gearshift. Furthermore, to the extent that Cabell’s demeanor changed when questioned about the items, the reaction is also consistent with an innocent hypothesis that he was initially “cool, calm, and collected” because he had no knowledge of the drugs and became “very emotional” when questioned about them because he - 16 - was surprised. Therefore, Cabell’s hand movements and demeanor do not support an inference of guilt.1 V. Cabell’s prior methamphetamine use has limited probative value. Although the majority finds that Cabell’s admitted methamphetamine use four days earlier is “probative evidence” of his knowledge of the drug, prior use is only relevant to prove Cabell’s knowledge of the character—not presence—of methamphetamine. In my opinion, the majority gives undue weight to evidence of Cabell’s prior drug use, without sufficient evidence that he actually saw the small, empty bag with residue. Evidence of prior bad acts “‘is incompetent and inadmissible for the purpose of showing’ that the accused has a propensity to commit crimes or a particular crime and, therefore, to conclude that the accused probably committed the charged crime.” Jennings v. Commonwealth, 20 Va. App. 9, 15 (1995) (quoting Kirkpatrick v. Commonwealth, 211 Va. at 269, 272 (1970)). In drug possession cases, a “narrow and specific” exception to this rule allows the factfinder to infer from prior drug possession “that an accused knows the nature and character of an illegal controlled substance.” Id. at 16 (emphasis added). See also Rider v. Commonwealth, 8 Va. App. 595, 598-99 (allowing the Commonwealth to use prior drug sales to prove the defendant’s “knowledge of the nature of the substance” (emphasis added)). However, a drug possession conviction requires proof “beyond a reasonable doubt that the accused was aware of the presence and character of the drug and that the accused consciously 1 Moreover, “[f]urtive gestures alone” are insufficient even “to establish probable cause.” Copeland v. Commonwealth, 42 Va. App. 424, 434 (2004). While the majority relies on a combination of Cabell’s “furtive movements,” his “defensive and emotional reaction,” and the presence of methamphetamine in proximity and plain view to infer knowledge, I disagree with the majority’s findings that the methamphetamine was in plain view, see supra Part I, and that Cabell’s reaction to questioning was suggestive of guilt. Thus, even assuming that Cabell’s hand movements were “furtive,” I would still find them far from sufficient to support an inference of knowledge beyond a reasonable doubt. - 17 - possessed it.” Yerling, 71 Va. App. at 532 (emphasis added) (citing Jones v. Commonwealth, 17 Va. App. 527, 532 (1994)). People who have used or seen methamphetamine are more likely to recognize it when they see it, but they are no more likely to see it when it is not in plain view. Thus, reliance on evidence of prior drug use beyond the character prong of knowledge oversteps the “narrow” exception to the ban on propensity evidence. In conclusion, the circumstances of this case, even in the light most favorable to the Commonwealth, establish no more than a mere suspicion of guilt. Because I find that the evidence falls far short of sufficient to support a guilty finding beyond a reasonable doubt, I dissent. - 18 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488585/	COURT OF APPEALS OF VIRGINIA Present: Senior Judges Clements, Haley and Petty UNPUBLISHED JAQUAN MOULTRIE MEMORANDUM OPINION* v. Record No. 0457-22-2 PER CURIAM NOVEMBER 22, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF THE CITY OF PETERSBURG Dennis M. Martin, Sr., Judge (Terry Driskill, on brief), for appellant. Appellant submitting on brief. (Jason S. Miyares, Attorney General; Victoria Johnson, Assistant Attorney General, on brief), for appellee. Following a bench trial, the Circuit Court for the City of Petersburg convicted Jaquan Moultrie of first-degree murder, in violation of Code § 18.2-32, and unlawful stabbing, in violation of Code § 18.2-53. Moultrie asserts that the trial court erred in finding the evidence sufficient to support his convictions. Moultrie’s counsel has moved for leave to withdraw in accordance with Anders v. California, 386 U.S. 738, 744 (1967). The motion to withdraw is accompanied by a brief referring to the part of the record that might arguably support this appeal. A copy of that brief has been furnished to Moultrie with sufficient time for him to raise any matter that he chooses. Moultrie has not filed any supplemental pro se pleadings. We have reviewed the parties’ pleadings, fully examined the proceedings, and determined that this appeal is wholly frivolous and wholly without merit as set forth below. Thus, the panel unanimously holds that oral argument is unnecessary. See Code § 17.1-403(ii)(a); Rule 5A:27(a). * Pursuant to Code § 17.1-413, this opinion is not designated for publication. BACKGROUND1 Dajah “Daisy” Brown moved to Virginia with her boyfriend, Moultrie, in 2018. When she arrived, Brown secured employment as a live-in caregiver for two intellectually disabled adults, Ian Chambliss and Cassandra Embry, in a private home owned by her employer, Yolanda Thomas. Brown got along well with Thomas, and she had a good relationship with Chambliss and Embry. Brown’s relationship with Moultrie, however, was less cordial. On February 16, 2019, Brown called 911 to report that Moultrie was at her workplace trying to attack her. Then, on March 22, 2019, Chambliss called 911 to report that Moultrie was hitting Brown. Brown was screaming in the background during the call. Petersburg Police Officer Eric Richardson responded to the residence and noted that Brown “looked scared.” Brown told Officer Richardson that she wanted Moultrie out of the house. After learning that Moultrie had an outstanding warrant, Officer Richardson arrested Moultrie and took him to Riverside Regional Jail. Moultrie became upset and angry during their interaction and repeatedly referred to Brown as “[t]hat stupid bitch.” Officer Richardson described Moultrie as “yelling” and “growling.” Moultrie was released on bond on March 22, 2019. The next day, on March 23, 2019, Thomas took Brown shopping and to dinner and then dropped her back off at the residence at about 8:00 p.m. At that point, only Brown, Chambliss, and Embry were in the home. At about 2:20 a.m. on March 24, 2019, Brown spoke on the telephone to her friend, Steven Hewett. Hewett testified that Brown sounded frightened during the call as opposed to her “normal confident self.” During that phone call, Brown told Hewett “if anything happened to her, that [Moultrie] did it.” 1 “In accordance with familiar principles of appellate review, the facts will be stated in the light most favorable to the Commonwealth, the prevailing party at trial.” Scott v. Commonwealth, 292 Va. 380, 381 (2016). -2- Later, Chambliss, who slept in the bedroom next to Brown’s, heard Brown say, “He stabbed me.” Chambliss went to investigate and saw Moultrie stab Brown in “the shoulder.” At trial, Chambliss gestured to the “top of his left deltoid,” when he pointed out the area of the stab wound on his own body. Chambliss described how Brown and Moultrie struggled in the upstairs bedroom and in Thomas’s office—where she tried to call 911—before Moultrie dragged her down the stairs by her hair and “left her body there to die.” Moultrie then fled the scene. Chambliss noticed damage to the front door, where Moultrie had kicked it in to enter the house. Brown was not breathing and, after an unsuccessful attempt to resuscitate her, Chambliss called 911. In the 911 call, which was played at trial, Chambliss reported that Brown’s “boyfriend” had stabbed her. Before trial, Chambliss identified Moultrie as the assailant in a photo lineup. In court, Chambliss identified Moultrie as Brown’s boyfriend and as the person who stabbed her. Petersburg Police Officer James Knisley and Lieutenant Daniel Felthoff responded to the call and were the first officers on the scene. On arrival, they encountered Chambliss and Embry standing outside the residence. The officers observed that Chambliss and Embry both had an intellectual disability and were frightened and distressed. Chambliss told Lieutenant Felthoff that “Quan” had stabbed “Ms. Daisy” and had fled. The officers discovered Brown lying faceup in the doorway with open, but fixed eyes, and disheveled clothing. She had a laceration just below her neckline with a wet, red stain on her shirt. Brown’s pants were partially pulled down as if they had become displaced while her body was dragged. The officers also observed blood streaks on the wall of the stairwell leading upstairs. Upstairs, they found signs of a physical struggle including items “thrown around” and a broken lamp. They observed blood spatter on “the lower left portion” of the bed in Brown’s bedroom in the area where Chambliss said Brown was standing when Moultrie stabbed her. They also recovered Moultrie’s identification and bond paperwork from the dresser in Brown’s -3- room. Thomas later testified that there was damage to the front door and that portions of the interior of the home were in disarray; she described her office as “upside down.” The medical examiner testified that Brown suffered a single stab wound below her right clavicle that extended three inches into her body, entering the pericardial sac and injuring the great vessels of the aorta and pulmonary trunk as well as the heart itself. Brown would have been able to survive for approximately ten minutes, depending on the rapidity of the blood loss. She suffered significant internal bleeding. At trial, Moultrie cross-examined Chambliss regarding his physical and mental health diagnoses, his preliminary hearing testimony, and inconsistencies in his statements. On redirect, Chambliss explained that due to his “mild retardation,” he sometimes becomes confused when answering questions, but that he was not confused about who stabbed Brown. Chambliss reiterated that he saw Moultrie stab Brown one time; she tried to go to the office, and then, after she stopped moving, Moultrie dragged her down the stairs by her hair. Chambliss further testified that he knew the difference between the truth and a lie. Moultrie moved to strike the evidence, arguing that Chambliss’s testimony was inherently incredible and that the Commonwealth did not prove the element of premeditation. The trial court denied the motion and convicted Moultrie of both charges. In doing so, the trial court specifically found Chambliss’s testimony credible, stating that it had “evaluated the appearance and attitude and behavior of Mr. Chambliss” as well as any interest that he might have in the outcome of this case, any relation that he might have to any party in the case, his inclination for him to speak truthfully or not, the probability or improbability of his testimony, and most importantly, all the other facts and circumstances in evidence. The trial court further concluded that the Commonwealth proved the element of premeditation. First, the court found that the evidence established “prior instances of violence -4- between the defendant and the victim.” Second, the evidence established that the victim made a statement shortly before the murder that if something were to happen to her, “it’s the defendant who did it.” Third, the court found that the circumstances of the killing were indicative of premeditation and concluded, “[i]t is clear that the defendant had the design to willfully, premeditated, and deliberately kill the victim.” This appeal followed. STANDARD OF REVIEW “When reviewing the sufficiency of the evidence, ‘[t]he judgment of the trial court is presumed correct and will not be disturbed unless it is plainly wrong or without evidence to support it.’” McGowan v. Commonwealth, 72 Va. App. 513, 521 (2020) (alteration in original) (quoting Smith v. Commonwealth, 296 Va. 450, 460 (2018)). “In such cases, ‘[t]he Court does not ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’” Id. (alteration in original) (quoting Secret v. Commonwealth, 296 Va. 204, 228 (2018)). “Rather, the relevant question is whether ‘any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” Vasquez v. Commonwealth, 291 Va. 232, 248 (2016) (quoting Williams v. Commonwealth, 278 Va. 190, 193 (2009)). “If there is evidentiary support for the conviction, ‘the reviewing court is not permitted to substitute its own judgment, even if its opinion might differ from the conclusions reached by the finder of fact at the trial.’” McGowan, 72 Va. App. at 521 (quoting Chavez v. Commonwealth, 69 Va. App. 149, 161 (2018)). ANALYSIS I. Identity of the Perpetrator Moultrie first contends that the trial court erred in finding the evidence sufficient to prove he was the perpetrator of the crimes “as the only direct evidence of identity was provided by [Chambliss’s] conflicting accounts of events.” We disagree. -5- It is well-settled that “[t]he fact finder, who has the opportunity to see and hear the witnesses, has the sole responsibility to determine their credibility, the weight to be given their testimony, and the inferences to be drawn from proven facts.” Commonwealth v. McNeal, 282 Va. 16, 22 (2011) (quoting Taylor v. Commonwealth, 256 Va. 514, 518 (1998)). “[W]here a trial court sitting without a jury hears witnesses testify and observes their demeanor on the stand, it has the right to believe or disbelieve their statements.” Wilson v. Commonwealth, 46 Va. App. 73, 87 (2005) (quoting Morning v. Commonwealth, 37 Va. App. 679, 686 (2002)). Thus, “[g]reat deference must be given to the factfinder who, having seen and heard the witnesses, assesses their credibility and weighs their testimony.” Id. (alteration in original) (quoting Walton v. Commonwealth, 255 Va. 422, 426 (1998)). This Court must accept the factfinder’s “determination of the credibility of witness testimony unless, ‘as a matter of law, the testimony is inherently incredible.’” Nobrega v. Commonwealth, 271 Va. 508, 518 (2006) (quoting Walker v. Commonwealth, 258 Va. 54, 71 (1999)). “A legal determination that a witness is inherently incredible is very different from the mere identification of inconsistencies in a witness’ testimony or statements.” Kelley v. Commonwealth, 69 Va. App. 617, 626 (2019). “Testimony may be contradictory or contain inconsistencies without rising to the level of being inherently incredible as a matter of law.” Id. “To be ‘incredible,’ testimony ‘must be either so manifestly false that reasonable men ought not to believe it, or it must be shown to be false by objects or things as to the existence and meaning of which reasonable men should not differ.’” Juniper v. Commonwealth, 271 Va. 362, 415 (2006) (quoting Cardwell v. Commonwealth, 209 Va. 412, 414 (1968)). That is, “[c]onflicts in the evidence are resolved by the fact finder, and such conflicts are not revisited on appeal unless ‘the evidence is such that reasonable [persons], after weighing the evidence and drawing all just inferences therefrom, could reach but -6- one conclusion.’” Molina v. Commonwealth, 47 Va. App. 338, 369 (second alteration in original) (quoting City of Bedford v. Zimmerman, 262 Va. 81, 86 (2001)), aff’d, 272 Va. 666 (2006). Moultrie asserts that Chambliss’s testimony was inherently incredible because he made inconsistent statements about the stabbing and because he testified that the victim was stabbed in the shoulder rather than in the chest. However, the record affirmatively shows that Chambliss was in the house at the time of the murder and that he repeatedly and consistently said that he saw Moultrie stab Brown. In fact, Chambliss identified Moultrie as the perpetrator during his 911 call, again at the scene of the crime, during a subsequent photo lineup, and when he was under oath both at the preliminary hearing and at trial. Moreover, Chambliss’s testimony was corroborated by the crime scene, which bore signs of a struggle in an upstairs bedroom and in Thomas’s office where Chambliss said Brown went to call 911. The evidence of a struggle is consistent with the medical examiner’s testimony that Brown would have survived for ten minutes after suffering the stab wound. Blood spatter was found on the bed in the location where Chambliss said Brown was standing when Moultrie stabbed her, and streaks of blood were located on the stairwell wall. Brown’s pants were partially pulled down, suggesting they had become displaced while her body was dragged, and there was a wet blood stain on her shirt when police arrived on scene. Moreover, the police found Moultrie’s identification and bond paperwork in an upstairs bedroom, indicating his presence at the crime scene. With respect to the stab wound itself, Chambliss testified at trial that Moultrie stabbed Brown once and pointed to the “top of his left deltoid.” The trial court expressly found that Chambliss’s testimony was reasonable, because the medical evidence indicated that Brown was stabbed “more under the clavicle which is not too far from the deltoid.” It is of no moment that Chambliss gave inconsistent statements regarding multiple stab wounds. Chambliss explained that because of his mild retardation he sometimes became confused about the questions asked. -7- Additionally, the trial court was apprised of his intellectual disability and was made aware of any inconsistencies in his testimony. After considering all of the evidence presented at trial, the trier of fact resolved the inconsistencies in Chambliss’s testimony in favor of the Commonwealth and concluded that Chambliss’s testimony was not inherently incredible or unworthy of belief. The record supports that conclusion. It is true that the Commonwealth “bears the burden of proving the identity of the accused as the perpetrator beyond a reasonable doubt.” Cuffee v. Commonwealth, 61 Va. App. 353, 364 (2013) (quoting Blevins v. Commonwealth, 40 Va. App. 412, 423 (2003)). However, on appeal, we review the trier of fact’s determination regarding the identity of the criminal actor in the context of “the totality of the circumstances.” Brown v. Commonwealth, 37 Va. App. 507, 523 (2002) (quoting Satcher v. Commonwealth, 244 Va. 220, 249 (1992)). In this case, the trial court carefully evaluated Chambliss’s testimony and expressly considered all of the facts and circumstances surrounding the murder, including the significant amount of corroborating evidence supporting Chambliss’s version of events. In the end, the trial court resolved the inconsistencies in Chambliss’s testimony in favor of the Commonwealth and found, as a matter of fact, that Chambliss testified truthfully about what he saw. Because the trial court’s findings are not plainly wrong, or without evidence to support them, we will not disturb them on appeal. II. Premeditation Moultrie also contends that the evidence failed to prove he acted with the requisite premeditation necessary to prove first-degree murder. He argues that the circumstances described by the witnesses more particularly described “a crime of passion.” Again, we disagree. “Murder . . . by any willful, deliberate, and premeditated killing . . . is murder of the first degree, punishable as a Class 2 felony.” Code § 18.2-32. “Premeditated murder . . . contemplates: (1) a killing; (2) a reasoning process antecedent to the act of killing, resulting in the formation of a -8- specific intent to kill; and (3) the performance of that act with malicious intent.” Fields v. Commonwealth, 73 Va. App. 652, 674 (2021) (quoting Rhodes v. Commonwealth, 238 Va. 480, 486 (1989)). “Because ‘premeditation and formation of an intent to kill seldom can be proved by direct evidence[,] [a] combination of circumstantial factors may be sufficient.’” Id. (alterations in original) (quoting Aldridge v. Commonwealth, 44 Va. App. 618, 655 (2004)). “The intention to kill need not exist for any specified length of time prior to the actual killing.” Aldridge, 44 Va. App. at 655 (quoting Clozza v. Commonwealth, 228 Va. 124, 134 (1984)). “A design to kill may be formed only a moment before the fatal act is committed provided the accused had time to think and did intend to kill.” Id. (quoting Clozza, 228 Va. at 134). “[E]vidence of a mortal wound inflicted by a deadly weapon with little or no provocation creates an inference from which the trier of fact may conclude that the killer acted with premeditation.” Morris v. Commonwealth, 17 Va. App. 575, 578 (1994). Here, as the trial court found, the circumstances that proved Moultrie acted with premeditation included the history of violence between Moultrie and Brown, Brown’s statement to a friend only hours before the murder that, if anything were to happen to her, Moultrie would be responsible, and the circumstances of the murder itself. Indeed, the record establishes that Moultrie, who was angry with Brown and referred to her as “[t]hat stupid bitch,” returned to the house shortly after he was released on bond from the incident from the day before, when a frightened Brown spoke to the police and Moultrie was arrested. The facts established that Moultrie broke into the home, started an argument with Brown, and engaged in a lengthy struggle, before stabbing her in the upper chest, resulting in the fatal wound to her heart. Rather than calling for help or providing any assistance to Brown, Moultrie dragged Brown down the stairs by her hair and left her bleeding on the floor. He then fled. Contrary to Moultrie’s assertion, the record contains no evidence of provocation. -9- The evidence presented at trial clearly supported the trial court’s finding that this was a willful, deliberate, and premeditated killing. Moultrie intended to kill Brown, and he did. CONCLUSION Accordingly, we affirm the trial court’s judgment and grant the motion for leave to withdraw. See Anders, 386 U.S. at 744. This Court’s records shall reflect that Jaquan Moultrie is now proceeding without the assistance of counsel in this matter and is representing himself on any further proceedings or appeal. Affirmed. - 10 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488581/	COURT OF APPEALS OF VIRGINIA Present: Judges AtLee, Friedman and Raphael UNPUBLISHED Argued at Lexington, Virginia MI’SHAEL ELIJAH DAYE MEMORANDUM OPINION* BY v. Record No. 0925-21-3 JUDGE FRANK K. FRIEDMAN NOVEMBER 22, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF THE CITY OF LYNCHBURG Michael R. Doucette, Judge (Thomas S. Leebrick; Thomas S. Leebrick, P.C., on brief), for appellant. Appellant submitting on brief. Lucille M. Wall, Assistant Attorney General (Jason S. Miyares, Attorney General, on brief), for appellee. The trial court convicted appellant of possession with intent to distribute five or more pounds of marijuana, possession of a firearm by a convicted non-violent felon, and possession of a firearm while distributing or possessing with intent to distribute more than one pound of marijuana.1 Appellant argues that the trial court erred in denying his motions to suppress. He also challenges the sufficiency of the evidence to sustain his convictions. For the following reasons, we affirm the rulings of the trial court. BACKGROUND “In accordance with familiar principles of appellate review, the facts will be stated in the light most favorable to the Commonwealth, the prevailing party at trial.” Poole v. * Pursuant to Code § 17.1-413, this opinion is not designated for publication. 1 The Commonwealth dismissed one charge of receiving or concealing a stolen firearm. Appellant also pled guilty to an unrelated drug charge and was sentenced on that case at the same time as the cases at issue here. Commonwealth, 73 Va. App. 357, 360 (2021) (quoting Gerald v. Commonwealth, 295 Va. 469, 472 (2018)). In doing so, we discard any of appellant’s conflicting evidence and regard as true all credible evidence favorable to the Commonwealth and all inferences that may reasonably be drawn from that evidence. Gerald, 295 Va. at 473. The Incidents Surrounding Appellant’s Arrest On November 17, 2018, Lynchburg Police Officer Sawyer and Detective Scott responded to a disorderly conduct call for a fight near appellant’s apartment. The officers parked in appellant’s driveway because it was the only available area on that side of the street to park out of the way of traffic. Upon exiting their vehicles, the officers immediately smelled a strong odor of fresh marijuana. The officers did not hear any noises indicating an ongoing disorder, and so they approached appellant’s door to investigate both the disorderly conduct call and the marijuana odor. As Officer Sawyer approached appellant’s front door, the marijuana odor became stronger and more defined, and he saw what he believed at the time to be a smoking device in the window. Officer Sawyer knocked and kicked on the door and shouted for the door to be opened. Appellant then opened the door and walked onto the porch to show the officers where the alleged fight happened. Officer Sawyer asked appellant if they could go into the apartment and investigate the marijuana scent; appellant denied that there was marijuana inside. When Officer Sawyer asked if he could confirm there was “no weed,” appellant asked whether the officers had a search warrant. The officers told appellant that they had probable cause, and when appellant did not immediately allow them to go inside, they added, “Okay, let’s put it this way. We can either detain you and put you in cuffs and sit you on these steps for five hours while we go ahead and get [a warrant].” Appellant then said “go ahead” and sat on the steps. He stood a short time later and admitted that he had “smoked a little blunt.” -2- One of the officers responded, “Is that it? That’s all it is? So let me just—I’m gonna walk through and make sure.” The officers then entered the apartment and saw a baseball-sized bag of marijuana in plain view on a coffee table in the first bedroom. They also saw marijuana “shake” and a trash bag containing suspected marijuana in a hallway. In the “back” bedroom, which belonged to Nashiem Clark, a firearm was found protruding from under the bed in plain view. In appellant’s bedroom, they found a large amount of cash on the floor, the television stand, and in an open dresser drawer. They also saw a digital scale in the basement. Officer Sawyer believed he needed a supervisor’s approval to obtain a search warrant, but Detective Scott testified that he did not believe any such requirement existed. Detective Scott “locked down” the apartment while Officer Sawyer, who had received permission from a supervisor, obtained a search warrant. While executing the search warrant that same night, the police entered Clark’s bedroom and found a Glock handgun under the covers of the bed with a thirty-round magazine, another Glock handgun in a dresser drawer with various ammunitions and magazines, and multiple bags matching the bags eventually found in the basement. In appellant’s bedroom, police found cash totaling $3,423, marijuana shake on the television stand, burnt “roaches,” and a backpack containing small, empty baggies and more marijuana shake. In a shared hallway, police found multiple trash bags filled with empty packaging and marijuana shake. In the basement, they found a large amount of marijuana individually packaged in various sizes, clear plastic baggies, a third Glock handgun, and a backpack filled with ammunition. Appellant told Officer Sawyer that he and his girlfriend had the cash for a trip they were taking. Appellant’s Motion to Suppress and the Circuit Court’s Ruling Appellant moved to suppress any evidence found within his apartment as the product of an unconstitutional search. After a hearing on his motions, the trial court found that appellant did not consent to the initial search, the officers’ initial entry into the apartment was unlawful, and a -3- protective sweep of the apartment was not justified.2 However, the court also found that both Officer Sawyer and Detective Scott detected “the strong smell of” marijuana as soon as they got out of their car and that they localized the smell to appellant’s residence before he even opened the door. When appellant did open the door, the police smelled marijuana coming from inside his home. The court concluded that the evidence should not be suppressed, despite the unlawful entry into appellant’s home, because it “inevitably would have been discovered by lawful means.” The court held that “the leads making the discovery inevitable were possessed by the police at the time of the misconduct,” noting that a strong odor of marijuana had been localized to the interior of the residence, and that “there was a reasonable probability that [the evidence] would have been discovered by lawful means but for the police misconduct . . . .” In a written ruling, the court noted that Sawyer’s “decision to pursue the search warrant was independent of what he saw during the unlawful search.” The trial court noted Sawyer’s testimony that he believed he had appellant’s consent to enter the apartment—even writing in the search warrant affidavit that appellant had given consent—and his testimony that he believed the search of appellant’s residence to be justified as a protective sweep.3 The court reasoned that 2 On appeal, the Commonwealth does not dispute the trial court’s findings that appellant did not give valid consent and that the police were not entitled to perform a protective sweep. 3 Under Segura v. United States, 468 U.S. 796, 809-10 (1984), when probable cause exists to believe that evidence of criminal activity is present inside a dwelling, officers may secure the dwelling “to prevent the destruction or removal of evidence while a search warrant is being sought.” However, this does not negate the additional requirements necessary for officers to perform a protective sweep or a search. Id.; see also Maryland v. Buie, 494 U.S. 325, 335 (1990); Verez v. Commonwealth, 230 Va. 405, 410-11 (1985). The trial court found that Segura did not apply because in Segura “the information in the search warrant affidavit came completely from sources wholly unconnected with the entry and was known by law enforcement well before the initial entry.” Here, the warrant included some items spotted during the improper entry and, because the officers believed they had consent, the initial entry was not limited simply to securing the premises. The court also found that when the officers first entered the house, they did not have reason to believe that anyone else was in the house who might remove or destroy contraband. (Notably, however, several individuals were in the house and one fled out the back door when the police appeared.) -4- [w]hile [Sawyer’s] subjective beliefs alone could never legitimize the search, his beliefs are relevant to show the inevitability of his actions. In spite of his belief that his search was already justified and lawful as both a consent search and a protective sweep, he still went before the magistrate to obtain a search warrant. The court also concluded that the magistrate would have issued the search warrant based solely on the evidence the officers obtained before the unlawful entry into the apartment. Accordingly, the trial court denied the motions to suppress. The Trial Proceedings At trial, Clark testified that he sold marijuana and appellant was his supplier. Clark stated that he was at the apartment when the police arrived and fled through the basement, but appellant later called and told him to return to the apartment to claim the firearms because appellant was a felon. Clark testified that the backpack and firearm found in the basement belonged to him, but he did not put either item there. Clark stated that one of the firearms found in his bedroom belonged to appellant; Clark did not know how it ended up in his bedroom but testified that appellant usually carried it when he was selling marijuana. Clark stated that appellant split the marijuana up into pounds and gave a portion to Clark to sell. He testified that three pounds of the marijuana found in the house belonged to him and that the rest—well over five pounds—belonged to appellant. Appellant moved to strike the Commonwealth’s evidence, arguing that Clark’s testimony was not credible because he “had every incentive in the world” to testify against appellant and, without that testimony, the Commonwealth could not prove that appellant possessed the guns and marijuana. The trial court denied the motion and convicted appellant of possession with intent to distribute five or more pounds of marijuana, possession of a firearm by a convicted non-violent felon, and possession of a firearm while distributing or possessing with intent to distribute more than one pound of marijuana. -5- ANALYSIS I. Motions to Suppress Appellant argues that the trial court erred in denying his motions to suppress. He asserts that the inevitable discovery doctrine was not applicable because Officer Sawyer’s ability to obtain a search warrant hinged on the approval of a supervisor and too many variables existed that could have impacted a supervisor’s determination to authorize a warrant. A. Standard of Review “When reviewing the denial of a motion to suppress, ‘we view the evidence in the light most favorable to the Commonwealth.’” Ray v. Commonwealth, 74 Va. App. 291, 302 (2022) (quoting Jones v. Commonwealth, 71 Va. App. 375, 380 (2019)). “Our review includes ‘evidence adduced at both the trial and the suppression hearing.’” Id. (quoting Carlson v. Commonwealth, 69 Va. App. 749, 758 (2019)). “We give deference to the trial court’s factual findings and review de novo the application of law to those facts.” Id. (quoting Joyce v. Commonwealth, 72 Va. App. 9, 14 (2020)). B. The Fourth Amendment and Exceptions to the Exclusionary Rule The Fourth Amendment protects individuals against unreasonable searches and seizures. U.S. Const. amend. IV. “If[] . . . the trial court determines a search was conducted in violation of the Fourth Amendment, the evidence is subject to the exclusionary rule, which prohibits the introduction of evidence, tangible or testimonial, acquired during an unlawful search.” Carlson, 69 Va. App. at 758 (citing Murray v. United States, 487 U.S. 533, 536 (1988)). Even so, “‘simply because [evidence] would not have come to light but for the illegal actions of the police’ does not mean that the evidence is automatically excluded.” Id. at 759 (quoting Fitchett v. Commonwealth, 56 Va. App. 741, 746 (2010)). “Exclusion of evidence is a last resort rather than first impulse.” Id. (citing Hudson v. Michigan, 547 U.S. 586, 591 (2006)). -6- The inevitable discovery doctrine is an exception to the exclusionary rule and allows “evidence obtained by unlawful means [to be admitted] if that evidence or information ‘ultimately or inevitably would have been discovered by lawful means.’” Id. at 763 (quoting Commonwealth v. Jones, 267 Va. 532, 536 (2004)). If the prosecution demonstrates that the evidence inevitably would have been discovered by lawful means, it “would reject logic, experience, and common sense” to exclude the evidence in an attempt to deter police misconduct. Nix v. Williams, 467 U.S. 431, 444 (1984). The exclusionary rule does not operate to “put the police in a worse position than they would have been in if no unlawful conduct had transpired.” Id. at 445. To prove that evidence inevitably would have been discovered by lawful means, “the Commonwealth must show ‘(1) a reasonable probability that the evidence in question would have been discovered by lawful means but for the police misconduct’ and ‘(2) that the leads making the discovery inevitable were possessed by the police at the time of the misconduct.’” Knight v. Commonwealth, 71 Va. App. 771, 788 (2020) (quoting Carlson, 69 Va. App. at 763). The dissent focuses on the existing split of authority among jurisdictions regarding the appropriate standard that the prosecution must meet to show that the evidence ultimately would have been discovered by lawful means. Virginia courts, along with the Fifth and Eighth Circuits, follow the rule that the prosecution must show “a reasonable probability” that the evidence would have been discovered by lawful means but for the police misconduct. See, e.g., Carlson, 69 Va. App. at 763; Knight, 71 Va. App. at 788; see also United States v. Jackson, 596 F.3d 236 (5th Cir. 2010); United States v. Smith, 21 F.4th 510 (8th Cir. 2021). Other jurisdictions require a higher standard of proof—an approach which ensures that rule-bending is not rewarded or encouraged under exceptions to the exclusionary rule. See, e.g., United States v. Almeida, 434 F.3d 25, 29 (1st Cir. 2006) (noting that “the government must demonstrate, to a high degree of -7- probability, that the evidence would have been discovered”); United States v. Heath, 455 F.3d 52, 55 (2d Cir. 2006) (rejecting the “reasonable probability” framework and finding that “the inevitable discovery doctrine is available only where there is a high level of confidence that each of the contingencies required for the discovery of the disputed evidence would in fact have occurred”); United States v. Watkins, 10 F.4th 1179, 1182 (11th Cir. 2021) (finding that Nix, 467 U.S. 431, requires use of the “preponderance of the evidence” standard and that “reasonable probability” is an impermissibly low standard of proof). As the dissent points out, in Walls v. Commonwealth, 2 Va. App. 639 (1986), Virginia adopted the Fifth Circuit’s three-prong test for the inevitable discovery doctrine. Id. at 656 (“(1) a reasonable probability that the evidence in question would have been discovered by lawful means but for the police misconduct, (2) that the leads making the discovery inevitable were possessed by the police at the time of the misconduct, and (3) that the police also prior to the misconduct were actively pursuing the alternative line of investigation” (quoting United States v. Cherry, 759 F.2d 1196, 1204 (5th Cir. 1985))). Later, Jones, 267 Va. 532, overturned Walls and, citing Nix, rejected the third prong of this test. Notably, Jones did not overturn any other prong of this test—including the “reasonable probability” standard. Our post-Jones cases continue to employ this now-two-prong test. See Carlson, 69 Va. App. at 763; Knight, 71 Va. App. at 788. Without any indication that the “reasonable probability” standard has been overturned in Virginia, we are bound by the interpanel accord doctrine and are thus required to employ the “reasonable probability” standard. See Sandoval v. Commonwealth, 64 Va. App. 398, 419 (2015) (noting that the interpanel accord doctrine precludes the overruling of a published decision of a panel of the Court of Appeals other than by the Court of Appeals sitting en banc or by the Supreme Court of Virginia). -8- While the dissent argues that the use of the “reasonable probability” standard in Carlson and Knight was mere dicta because the outcome in each of these cases did not turn on “the difference between ‘reasonable probability’ and ‘inevitable discovery,’” infra at 27, we note that the interpanel accord doctrine “applies not merely to the literal holding of the case, but also to its ratio decidendi—the essential rationale in the case that determines the judgment.” Clinchfield Coal Co. v. Reed, 40 Va. App. 69, 73-74 (2003); Hutton v. Commonwealth, 66 Va. App. 714, 724 n.5 (2016). Again, as none of our prior caselaw has indicated that the “reasonable probability” standard has been overturned in Virginia, we find ourselves bound by it. C. The Trial Court Did Not Err in Denying the Motion to Suppress The record in this case supports the trial court’s conclusion that the inevitable discovery doctrine operates to allow the disputed evidence to be admitted because there was a reasonable probability that Officer Sawyer would have obtained and executed a search warrant, finding the contraband within the apartment, using only the information he obtained before the warrantless and unlawful entry. “It is well established that ‘[t]he inclusion of tainted evidence [in an affidavit] does not invalidate a search warrant.’” Williams v. Commonwealth, 26 Va. App. 612, 619 (1998) (quoting United States v. Wright, 991 F.2d 1182, 1186 (4th Cir. 1993)). “[S]uppression is not required ‘if, excluding the illegally obtained information, probable cause for the issuance of the warrant could still be found.’” Id. (quoting United States v. Apple, 915 F.2d 899, 910 (4th Cir. 1990)).4 4 There are alternative theories under which this case could be viewed and analyzed. First, an argument could be made that under the good faith exception to the exclusionary rule, the police here permissibly relied upon a valid search warrant. The exclusionary rule does not require suppression of evidence “when a police officer, acting in objective good faith, obtains a search warrant from a magistrate and conducts a search within the scope of the warrant.” Polston v. Commonwealth, 255 Va. 500, 503 (1998) (citing Derr v. Commonwealth, 242 Va. 413, 422 (1991)). “An officer’s decision to obtain a warrant is prima facie evidence that he or she was acting in good faith.” Adams v. Commonwealth, 275 Va. 260, 273 (2008) (quoting United States v. Koerth, 312 F.3d 862, 868 (7th Cir. 2002)). Similarly, this case could be argued -9- 1. At the Time of the Search of Appellant’s Residence, the Officers had Probable Cause to Believe Contraband was Present Inside the Dwelling “Under the Fourth Amendment, ‘probable cause may be supported by the detection of distinctive odors, as well as by sight.’” Bunch v. Commonwealth, 51 Va. App. 491, 496 (2008) (quoting United States v. Haynie, 637 F.2d 227, 234 (4th Cir. 1980)). At the time of the search of appellant’s residence, the law in Virginia held that “the detection of the odor of burning marijuana emanating from the open door of a residence, by a credible law enforcement officer who is familiar with its smell, provides that officer with probable cause to believe contraband is present inside the residence.” Cherry v. Commonwealth, 44 Va. App. 347, 357-58 (2004) (citing Johnson v. United States, 333 U.S. 10, 13 (1948)).5 as an example of independent, rather than inevitable, discovery. The affidavit for the search warrant contained facts establishing probable cause for the issuance of a warrant, independent of any facts obtained during the officers’ illegal entry. Thus, one could assert that the warrant was in no way dependent upon or derived from the illegal entry. However, both appellant and the Commonwealth exclusively rely on inevitable discovery in making their arguments and the trial court did not address these alternative theories below. We decline to address these issues “that have never been argued or briefed by counsel.” Epps v. Commonwealth, 46 Va. App. 161, 178 n.3 (2005), aff’d on reh’g en banc, 47 Va. App. 687 (2006), aff’d, 273 Va. 410 (2007). Moreover, we are hesitant to intrude upon issues such as the good faith exception to the exclusionary rule here, where the trial court made findings that it was “appalled” by the officers’ conduct and refused to “condone the methods used by the Lynchburg Police Department in this particular manner in any way, shape or form.” We limit our review to the inevitable discovery arguments which the parties have presented. 5 Appellant filed two motions to suppress the evidence, which were joined together and heard on two separate days—August 21, 2020, and September 3, 2020. At that time, the principles of Cherry still applied. Effective March 1, 2021, Code § 18.2-250.1 was amended to include subsection (F), which made evidence inadmissible that was discovered during a search based solely on the odor of marijuana. 2020 Va. Acts. Spec. Sess. 1, chs. 45, 51. A few months later, effective July 1, 2021, Code § 18.2-250.1 was repealed and the language previously found in subsection (F) was recodified at Code § 4.1-1302, with the additional provision that no search warrant may issue based solely on the odor of marijuana. 2021 Va. Acts. Spec. Sess. 1, chs. 550-51. This Court recently held in Montgomery v. Commonwealth, 75 Va. App. 182, 200 (2022), that Code § 18.2-250.1(F) does not apply retroactively to searches that occurred prior to its amendment. Here, appellant does not contend that Code § 4.1-1302 is retroactive or applies to this case. - 10 - Here, Officer Sawyer detailed in his sworn affidavit supporting the search warrant that he smelled fresh marijuana immediately after exiting his vehicle in appellant’s driveway. His affidavit also stated that “upon approaching [appellant’s] residence it was determined the odor was coming from the residence” and that the odor “was detected emanating from inside the residence” after appellant opened the door. That information was obtained before the unlawful entry into the apartment and provided Officer Sawyer with probable cause to believe that there was contraband inside the apartment. 2. The Record Establishes that the Officers Would have Sought and Obtained a Search Warrant if Appellant had Denied Them Entry into the Home While, as the dissent notes, the existence of probable cause is not sufficient to prove inevitable discovery “when the government presents no evidence that the police would have obtained a warrant,” White v. Commonwealth, 66 Va. App. 333, 364 n.7 (2016) (quoting United States v. Allen, 159 F.3d 832, 842 (4th Cir. 1998)), rev’d on other grounds, 293 Va. 411 (2017), here Officer Sawyer testified that if he had been denied entry into the home, he would have sought a search warrant.6 The dissent correctly notes that Officer “Sawyer testified that he did not make 6 The dissent argues that a subjective standard should control the question of whether evidence would inevitably have been discovered. However, “inevitable discovery involves no speculative elements but focuses on demonstrated historical facts capable of ready verification or impeachment . . . .” Nix, 467 U.S. at 444 n.5. Additionally, “the Fourth Amendment regulates conduct rather than thoughts . . . .” Ashcroft v. al-Kidd, 563 U.S. 731, 736 (2011) (citations omitted) (noting that “special-needs and administrative-search cases” are exceptions to this rule). While an inevitable discovery analysis involves inquiring into objective facts, it may also involve testimony regarding an officer’s subjective intentions. See, e.g., Nix, 467 U.S. at 449-50 (search team was approaching the location of the victim’s body); Jones, 267 Va. at 537 (police procedure would have required officer to run criminal background check, which would have led to defendant’s arrest and subsequent search); see also Murray, 487 U.S. at 540 n.2 (analyzing an officer’s subjective intentions to determine the applicability of the independent source doctrine). While the dissent in this case makes persuasive arguments for using a subjective inquiry to determine the applicability of the inevitable discovery doctrine, there are dangers to this approach. We “must keep sight of the practical effect admission will have on the incentives facing law enforcement officers to engage in unlawful conduct.” Id. at 545 (Marshall, J., dissenting). As Justice Marshall noted: - 11 - the decision to seek a warrant until five minutes after he entered and saw contraband ‘in plain view’”7 and that he further testified that, had appellant not given consent, the officers would have It normally will be difficult for the trial court to verify, or the defendant to rebut, an assertion by officers that they always intended to obtain a warrant, regardless of the results of the illegal search. The testimony of the officers conducting the illegal search is the only direct evidence of intent, and the defendant will be relegated simply to arguing that the officers should not be believed. Id. at 547-48 (Marshall, J., dissenting). Applying a purely subjective test would seem to favor officers who genuinely believe rule-bending is appropriate and departments that might train them to think so. When the evidence is viewed in the best light to the Commonwealth, here, we are satisfied that the officers would have obtained a search warrant if not for the illegal entry into appellant’s home. We do not grant “dispositive effect” to Officer Sawyer’s testimony that he would have attempted to obtain a search warrant if appellant had denied the officers entry. Id. at 540 n.2. However, his testimony is corroborated by other, more objective evidence. Officer Sawyer also testified that, when the odor of marijuana was present, standard operating procedure was to secure the residence, contact a supervisor, and then get a search warrant. He testified that generally, supervising officers “always let us go get the search warrant.” And Detective Scott testified that he did not believe he needed a supervisor’s permission to seek a search warrant at all. Circumstances justifying application of the “inevitable discovery” rule are most likely to be present if these investigative procedures were already in progress prior to the discovery via illegal means, as in Nix v. Williams, or where the circumstances are such that, pursuant to some standardized procedures or established routine a certain evidence-revealing event would definitely have occurred later. 6 Wayne R. LaFave, Search & Seizure § 11.4(a) (6th ed. 2021). Here, the officers’ testimony regarding their established procedures demonstrated that they would have obtained a search warrant had appellant turned them away at the door. Finally, even if we were to apply the dissent’s subjective inquiry pursuant to Murray, we would necessarily reach the same conclusion. Officer Sawyer’s testimony regarding his subjective intent was that he would have attempted to obtain a search warrant had appellant denied the officers entry. This testimony was not “implausible.” Murray, 487 U.S. at 540 n.2. 7 While the search warrant here was in fact partially “prompted by what [the officers] had seen during the initial entry,” Carlson, 69 Va. App. at 761 (quoting Murray, 487 U.S. at 542), this does not end our inquiry. Instead, we must ask what would have inevitably occurred had no unlawful police conduct taken place. As explained below, the evidence indicates that, had the - 12 - still entered the apartment, secured it, and then contacted a supervisor to describe any evidence “observed in plain view.” However, after this testimony, Officer Sawyer testified on re-cross examination: “If [appellant] had denied consent, I would attempt to obtain the search warrant.” Thus, based on Officer Sawyer’s testimony, we are left with two possible scenarios for what would have occurred had appellant denied the officers entry into the home—that the officers either would have secured the apartment and contacted a supervisor about obtaining a warrant, or would have simply attempted to get a search warrant themselves. When reviewing a denial of a motion to suppress evidence, an appellate court considers the evidence in the light most favorable to the Commonwealth as the party that prevailed in the trial court, and the appellate court accords the Commonwealth the benefit of all reasonable inferences fairly deducible from that evidence. Brown v. Commonwealth, 68 Va. App. 517, 523 (2018). Taking Officer Sawyer’s testimony in the light most favorable to the Commonwealth, and according to the Commonwealth “all reasonable inferences fairly deducible” therefrom, Officer Sawyer flatly stated that he would have attempted to get a search warrant if appellant had denied the officers entry. We also note that when the trial court ruled on the admissibility of the evidence, it specifically considered the body camera video footage. A review of that video shows that, upon arrival on the front porch of the home, Officer Sawyer began knocking and kicking on the door and demanding that the door be opened. The officers commented that they saw what appeared to be a pipe in the window of the home. And when appellant opened the door and offered to show the officers where the alleged fight occurred, the officers stopped him, informed him that they smelled marijuana and saw “a bowl” in the window, and asked to come inside “and get this weed out of your house.” officers not entered the home, there is a reasonable probability that they would have sought and obtained a search warrant. - 13 - “As factfinder, a trial court views video and other evidence to determine what it believes happened; we, on appellate review, view video evidence not to determine what we think happened, but for the limited purpose of determining whether any rational factfinder could have viewed it as the trial court did.” Meade v. Commonwealth, 74 Va. App. 796, 806 (2022). Here, the body camera video shows that the officers almost immediately began to focus on the odor of marijuana rather than the original call regarding a fight. They informed appellant that they had probable cause to search the residence based on the odor and what they believed to be drug paraphernalia in the window. A rational factfinder considering this video could easily conclude that the officers would not have simply walked away if appellant had not allowed them to enter the home; to the contrary, they were highly focused on identifying the source of the strong odor of marijuana. This conclusion is, again, bolstered by Officer Sawyer’s testimony that he “would attempt to obtain the search warrant” if appellant had not given consent. Finally, had Officer Sawyer attempted to get a search warrant at this stage—without ever entering appellant’s home—the magistrate likely would have issued the warrant because the odor alone provided probable cause to believe there was marijuana inside the apartment. Knight, 71 Va. App. at 788 (quoting Carlson, 69 Va. App. at 763). Accordingly, under the specific facts of this case, there was “a reasonable probability” that the evidence at issue would have been discovered by lawful means but for the officers’ illegal conduct. 3. It was Not Error for the Trial Court to Reject Appellant’s Claims that No Reasonable Probability Existed that the Contraband Inevitably Would Have Been Discovered Appellant, relying on Knight, argues that it was not inevitable that Officer Sawyer would have obtained a search warrant because he needed the approval of a supervisor, who could have denied the request for various reasons. In Knight, police officers used an inventory search of a vehicle as a pretext for a warrantless search when they lacked probable cause. Id. at 784. We held - 14 - that the inevitable discovery rule did not justify the warrantless inventory search where the officers had no probable cause to search the vehicle in the first place. Id. at 784-85. Given the lack of probable cause, the record did not show that the gun ultimately found within a backpack in the car “would have inevitably been discovered if the officers had not had an investigatory desire to search the car.” Id. at 791. We emphasized that the car was not evidence of a crime and did not need to be impounded and Knight’s passenger could have taken possession of the backpack where the gun was located. Id. Appellant argues that, as in Knight, too many variables—including manpower, policy, and enforcement issues—could have caused a supervisor not to authorize a warrant in this case. The officers, however, did not testify—nor were they ever asked—whether any of these variables would affect their ability to obtain a search warrant. While Officer Sawyer testified that it was standard operating procedure to obtain approval from a supervisor before seeking a search warrant, he also testified that “generally they always let us go get the search warrant.” Furthermore, Detective Scott testified that he did not believe it was necessary to seek supervisor approval at all. Accordingly, the record establishes a reasonable probability that the evidence would have been inevitably discovered through the execution of a valid search warrant.8 8 As the dissent notes, the officers engaged in coercive tactics, leading the trial court to state that it was “appalled” by their behavior. In ruling the evidence is admissible, we do not condone the officers’ conduct in this case. However, we defer to the United States Supreme Court’s assertion that, if the inevitable discovery doctrine applies, it “would reject logic, experience, and common sense” to exclude the evidence and to put law enforcement in a worse position than it would have been absent the misconduct. Nix, 467 U.S. at 444-45. The officers’ testimony and the body camera footage indicate that the officers were determined to investigate the source of the marijuana odor. Officer Sawyer testified that he would have attempted to get a search warrant if appellant had refused the officers entry. And at the time of these events, the odor of marijuana would have provided sufficient probable cause for a search warrant to issue. Thus, the specific factual circumstances of this case give rise to a reasonable probability “that the evidence in question would have been discovered by lawful means but for the police misconduct.” Knight, 71 Va. App. at 788 (quoting Carlson, 69 Va. App. at 763). We therefore conclude that the evidence is admissible, despite the questionable tactics utilized by the police in this case. - 15 - II. Sufficiency of the Evidence Appellant argues that the trial court erred in overruling his motion to strike based on the sufficiency of the evidence. Appellant asserts that Clark’s testimony is incredible and unworthy of belief because some of his testimony contradicted his prior statements to police and he would say anything to lessen his own sentence. A. Standard of Review “When reviewing the sufficiency of the evidence, ‘[t]he judgment of the trial court is presumed correct and will not be disturbed unless it is plainly wrong or without evidence to support it.’” McGowan v. Commonwealth, 72 Va. App. 513, 521 (2020) (alteration in original) (quoting Smith v. Commonwealth, 296 Va. 450, 460 (2018)). “In such cases, ‘[t]he Court does not ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’” Id. (alteration in original) (quoting Secret v. Commonwealth, 296 Va. 204, 228 (2018)). “Rather, the relevant question is whether ‘any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” Vasquez v. Commonwealth, 291 Va. 232, 248 (2016) (quoting Williams v. Commonwealth, 278 Va. 190, 193 (2009)). “If there is evidentiary support for the conviction, ‘the reviewing court is not permitted to substitute its own judgment, even if its opinion might differ from the conclusions reached by the finder of fact at the trial.’” McGowan, 72 Va. App. at 521 (quoting Chavez v. Commonwealth, 69 Va. App. 149, 161 (2018)). “Determining the credibility of witnesses . . . is within the exclusive province of the [factfinder], which has the unique opportunity to observe the demeanor of the witnesses as they testify.” Dalton v. Commonwealth, 64 Va. App. 512, 525 (2015) (first alteration in original) (quoting Lea v. Commonwealth, 16 Va. App. 300, 304 (1993)). “[T]he conclusions of the factfinder on issues of witness credibility may be disturbed on appeal only when we find that the witness’ testimony was ‘inherently incredible, or so contrary to human experience as to render it - 16 - unworthy of belief.’” Ragsdale v. Commonwealth, 38 Va. App. 421, 429 (2002) (quoting Ashby v. Commonwealth, 33 Va. App. 540, 548 (2000)). “Evidence is not ‘incredible’ unless it is ‘so manifestly false that reasonable men ought not to believe it’ or ‘shown to be false by objects or things as to the existence and meaning of which reasonable men should not differ.’” Gerald, 295 Va. at 487 (quoting Juniper v. Commonwealth, 271 Va. 362, 415 (2006)). Accordingly, “[a] legal determination that a witness is inherently incredible is very different from the mere identification of inconsistencies in a witness’ testimony or statements. Testimony may be contradictory or contain inconsistencies without rising to the level of being inherently incredible as a matter of law.” Kelley v. Commonwealth, 69 Va. App. 617, 626 (2019) (citing Juniper, 271 Va. at 415). Instead, such inconsistencies are appropriately weighed and “‘resolved by the fact finder,’ not the appellate court.” Id. (quoting Towler v. Commonwealth, 59 Va. App. 284, 292 (2011)). In making a credibility determination, the factfinder “[i]s free to believe or disbelieve, in part or in whole, the testimony of any witness.” Bazemore v. Commonwealth, 42 Va. App. 203, 213 (2004) (en banc) (citing Rollston v. Commonwealth, 11 Va. App. 535, 547 (1991)). B. The Evidence was Both Sufficient and Credible to Support Appellant’s Convictions Appellant points to nothing that renders Clark’s testimony inherently incredible as a matter of law. Although he claims that Clark’s trial testimony was inconsistent with what he reported to police on the night of the incident, that circumstance was properly submitted to and “resolved by the fact finder.” Kelley, 69 Va. App. at 626. To the extent there was any inconsistency in Clark’s testimony, “[t]he mere fact that a witness may have . . . given inconsistent statements during the investigation of a crime does not necessarily render the testimony unworthy of belief.” Juniper 271 Va. at 415. Additionally, Clark’s potential motives for testifying were properly weighed by the trial court as part of its determination of Clark’s credibility. Such inconsistencies and - 17 - circumstances are “appropriately weighed as part of the entire issue of witness credibility, which is left to the [factfinder] to decide.” Id. (citing Shelton v. Mullins, 207 Va. 17, 22 (1966)). After balancing all the evidence, the trial court found that Clark’s testimony was “corroborated over and over again” by other evidence. “When the law says that it is for triers of the facts to judge the credibility of a witness, the issue is not a matter of degree.” Smith v. Commonwealth, 56 Va. App. 711, 718 (2010) (quoting Swanson v. Commonwealth, 8 Va. App. 376, 379 (1989)). Where witnesses give testimony that, if true, is sufficient to maintain the verdict, and “the trier of the facts sees fit to base the verdict upon that testimony[,] there can be no relief in the appellate court.” Id. at 718-19 (quoting Swanson, 8 Va. App. at 379). The Commonwealth’s evidence was competent, was not inherently incredible, and was sufficient to sustain his convictions. CONCLUSION For the foregoing reasons, the trial court’s judgment is affirmed. Affirmed. - 18 - Raphael, J., dissenting. Because I believe that the majority has applied the wrong legal standards, I respectfully dissent. The “reasonable probability” standard that the trial court applied—and which the majority now ratifies—dilutes the “inevitable discovery” standard mandated by Nix v. Williams, 467 U.S. 431 (1984). Put simply, the fact that something is reasonably probable does not make it inevitable. Moreover, Murray v. United States, 487 U.S. 533 (1988), requires that courts apply a subjective standard when determining whether police inevitably would have sought and obtained a lawful warrant had they not been permitted to undertake the unlawful search. The question is what the particular officer or officers would have done, not what a reasonable officer under the circumstances would have done. I would vacate the convictions and remand the case for the trial court to reconsider the evidence under those standards. I. “The Fourth Amendment protects the right to be free from ‘unreasonable searches and seizures,’ but it is silent about how this right is to be enforced.” Davis v. United States, 564 U.S. 229, 230-31 (2011). To “supplement the bare text,” the United States Supreme Court “created the exclusionary rule, a deterrent sanction that bars the prosecution from introducing evidence obtained by way of a Fourth Amendment violation.” Id. at 231-32. The Court has recognized several exceptions to the exclusionary rule, including the good-faith exception, the attenuation doctrine, the independent-source rule, and the inevitable-discovery doctrine. See generally 6 Wayne R. LaFave, Search & Seizure § 11.4(a) (6th ed. 2021); Ronald J. Bacigal & Corinna Barrett Lain, Virginia Practice Criminal Procedure §§ 6:4, 6:6 (2021-2022 ed.). This case involves the inevitable-discovery doctrine first recognized in 1984 by the Supreme Court in Nix, 467 U.S. at 444. As Nix explained, “If the prosecution can establish by a preponderance of the evidence that the information ultimately or inevitably would have been - 19 - discovered by lawful means . . . then the deterrence rationale has so little basis that the evidence should be received.” Id. at 444. The inevitable-discovery doctrine thus serves to preserve those “convictions that would have been obtained without police misconduct.” Id. at 443 n.4. The inevitable-discovery doctrine “is in reality an extrapolation from the independent source doctrine.” Murray, 487 U.S. at 539; Nix, 467 U.S. at 443 (stating that the two doctrines are “closely related”); Wilkins v. Commonwealth, 37 Va. App. 465, 475 (2002) (describing the inevitable-discovery doctrine as “an off-shoot of the independent source doctrine”). But the inevitable-discovery doctrine “differs in that the question is not whether the police did in fact acquire certain evidence by reliance upon an untainted source but instead whether evidence found because of an earlier violation would inevitably have been discovered lawfully.” 3 Wayne R. LaFave, Jerold H. Israel, Nancy J. King & Orin S. Kerr, Criminal Procedure § 9.3(e) (4th ed. 2021) (emphasis added). “Inevitable discovery analysis thus requires the court to examine each of the contingencies involved that would have had to have been resolved favorably to the government in order for the evidence to have been discovered legally and to assess the probability of the contingencies having occurred.” United States v. Cunningham, 413 F.3d 1199, 1203 (10th Cir. 2005) (quoting United States v. Souza, 223 F.3d 1197, 1205 (10th Cir. 2000)). The inevitable- discovery doctrine “involves no speculative elements but focuses on demonstrated historical facts capable of ready verification or impeachment and does not require a departure from the usual burden of proof at suppression hearings.” Nix, 467 U.S. at 444 n.5. II. I agree with the majority that, by the time appellant Elijah Daye opened his front door, Officer Sawyer had probable cause to believe that Daye illegally possessed marijuana inside the residence. When these events occurred in 2018, marijuana possession was illegal. And the - 20 - strong odor of marijuana outside the residence—together with the smell emanating from within—gave the police probable cause to think that a crime had been committed. E.g., Bunch v. Commonwealth, 51 Va. App. 491, 496 (2008) (“As many courts have held, ‘if an officer smells the odor of marijuana in circumstances where the officer can localize its source to a person, the officer has probable cause to believe that the person has committed or is committing the crime of possession of marijuana.’” (quoting United States v. Humphries, 372 F.3d 653, 660 (4th Cir. 2004))). But the existence of probable cause alone is not enough to show that the police would have inevitably sought and obtained a warrant to search the premises. As Murray makes clear, the trial court “must be satisfied that a warrant would have been sought without the illegal entry.” 487 U.S. at 540 n.2 (emphasis added). The police in Murray illegally entered a warehouse where they spotted bales of marijuana in plain view. Id. at 535. The police then sought and obtained a warrant, seizing “270 bales of marijuana and notebooks listing customers for whom the bales were destined.” Id. at 536. The affidavit in support of the warrant established probable cause based only on facts known to police before their illegal entry. Id. Still, the Court remanded the case for the district court to determine if police would have sought and obtained the warrant, but for the illegal entry. Id. at 542-44. Following Murray, various courts, including ours, have recognized that probable cause alone is not enough to show that the police would have sought and obtained a warrant if they had not been permitted to conduct an illegal search. We said so, albeit in dictum, in 2016: [T]he “inevitable discovery doctrine cannot rescue evidence obtained via an unlawful search simply because probable cause existed to obtain a warrant when the government presents no evidence that the police would have obtained a warrant. Any other rule would emasculate the Fourth Amendment.” - 21 - White v. Commonwealth, 66 Va. App. 333, 364 n.7 (2016) (quoting United States v. Allen, 159 F.3d 832, 842 (4th Cir. 1998)), rev’d on other grounds, 293 Va. 411 (2017). And that proposition is black-letter law in other jurisdictions. As the Fourth Circuit put it, “Inevitable discovery demands that the prosecution prove by a preponderance of the evidence: first, that police legally could have uncovered the evidence; and second, that police would have done so.” United States v. Alston, 941 F.3d 132, 138 (4th Cir. 2019). Having “probable cause for a warrant, in and of itself and without any evidence that the police would have acted to obtain a warrant, does not trigger the inevitable discovery doctrine any more than probable cause, in and of itself, renders a warrantless search valid.” Allen, 159 F.3d at 841. “If evidence were admitted notwithstanding the officers’ unexcused failure to obtain a warrant, simply because probable cause existed, then there would never be any reason for officers to seek a warrant.” Id. at 842 (quoting United States v. Mejia, 69 F.3d 309, 320 (9th Cir. 1995)). The trial judge must “stand as gatekeeper, preventing officers from foregoing the warrant process entirely by always relying on inevitable discovery.” United States v. Christy, 739 F.3d 534, 543 n.5 (10th Cir. 2014).9 9 See also, e.g., United States v. Lundin, 817 F.3d 1151, 1161-62 (9th Cir. 2016) (“The inevitable discovery exception does not apply when officers have probable cause to apply for a warrant but simply fail to do so. . . . Put differently, allowing the government to claim admissibility under the inevitable discovery doctrine when officers have probable cause to obtain a warrant but fail to do so would encourage officers never to bother to obtain a warrant.”); United States v. Johnson, 22 F.3d 674, 683 (6th Cir. 1994) (“[T]o hold that simply because the police could have obtained a warrant, it was therefore inevitable that they would have done so would mean that there is inevitable discovery and no warrant requirement whenever there is probable cause.”); United States v. Echegoyen, 799 F.2d 1271, 1280 n.7 (9th Cir. 1986) (“[T]o excuse the failure to obtain a warrant merely because the officers had probable cause and could have inevitably obtained a warrant would completely obviate the warrant requirement of the fourth amendment.”); People v. Superior Court, 213 Cal. Rptr. 3d 735, 748 (Cal. Ct. App. 2017) (“The trial court put the rule succinctly: ‘[T]he courts are saying . . . that when you have the choice, [to] go get a warrant or not, don’t rely on the fact that I could have gotten one as your reason for not getting one.’”); People v. Hyde, 775 N.W.2d 833, 843 (Mich. Ct. App. 2009) (“To allow a warrantless search merely because probable cause exists would allow the inevitable discovery doctrine to act as a warrant exception that engulfs the warrant requirement.”). - 22 - So the resolution of the inevitable-discovery question here necessarily turns on whether the police would have sought and obtained a search warrant had Daye refused them entry. III. I agree with the majority on the standard of appellate review. In reviewing the trial court’s ruling denying Daye’s suppression motion, the Court must give deference to the trial court’s factual findings, but we must “review de novo the application of law to those facts.” Ray v. Commonwealth, 74 Va. App. 291, 302 (2022) (quoting Joyce v. Commonwealth, 72 Va. App. 9, 14 (2020)). On de novo review of the court’s application of law to the facts, I find that the trial court erred in concluding that the police would have sought and obtained a search warrant if Daye had denied them entry at the outset. The trial court committed two legal errors in reaching that conclusion. First, the court did not find that Officer Sawyer’s discovery of the contraband in the residence was inevitable, but only that “[t]here is a reasonable probability that Officer Sawyer would have discovered” it. Letter Opinion at 6 (emphasis added). Second, the trial court did not view the evidence about what Officer Sawyer would have done through the correct lens. The question is not what a reasonable officer in Sawyer’s position would have done under the circumstances if Daye had refused the police entry, but what Officer Sawyer would have done. This error was not harmless. If the trial court had applied that subjective standard, it could have reasonably found that the Commonwealth failed to prove by a preponderance of evidence that Officer Sawyer would have sought and obtained a search warrant if Daye had not been coerced into consenting to the search of his home. I would therefore remand the case for the trial court to apply the correct legal standards, described in greater detail below. - 23 - A. Quoting Commonwealth v. Jones, 267 Va. 532 (2004), the trial court believed that the inevitable-discovery doctrine required the Commonwealth to show “a reasonable probability that the evidence in question would have been discovered by lawful means but for the police misconduct.” Letter Opinion at 4-5 (emphasis added) (quoting Jones, 267 Va. at 536). As shown below, however, that language from Jones was dictum. The United States Supreme Court did not use a “reasonable probability” formulation when it announced the inevitable-discovery doctrine in Nix. Nix instead requires the government to prove “by a preponderance of the evidence that the information ultimately or inevitably would have been discovered by lawful means.” 467 U.S. at 444 (emphasis added). Most federal circuits follow that standard, not a reasonable-probability standard.10 Only two federal circuits— 10 See United States v. Crespo-Rios, 645 F.3d 37, 42 (1st Cir. 2011) (“in fact inevitable”); United States v. Heath, 455 F.3d 52, 60 (2d Cir. 2006) (“[W]e now expressly eschew the ‘reasonable probability’ framework that some of our sister circuits have used to analyze ‘inevitable discovery’ cases.”); United States v. Bradley, 959 F.3d 551, 557 (3d Cir. 2020) (“ultimately or inevitably would have been discovered”); United States v. Stabile, 633 F.3d 219, 245-46 (3d Cir. 2011) (requiring that evidence “inevitably would have been discovered”); Alston, 941 F.3d at 137-38 (4th Cir.) (“ultimately or inevitably would have been discovered by lawful means,” the occurrence of which “must have been likely, indeed ‘inevitable’”); United States v. Quinney, 583 F.3d 891, 893-95 (6th Cir. 2009) (requiring proof that the information “ultimately or inevitably would have been discovered” (quoting United States v. Alexander, 540 F.3d 494, 502 (6th Cir. 2008))); United States v. Marrocco, 578 F.3d 627, 639 (7th Cir. 2009) (“In this circuit, when the Government seeks ‘to use the doctrine of inevitable discovery . . . ,’ it must ‘prove that a warrant would certainly, and not merely probably, have been issued had it been applied for.’” (quoting United States v. Tejada, 524 F.3d 809, 813 (7th Cir. 2008))); United States v. Reilly, 224 F.3d 986, 994 (9th Cir. 2000) (“would have been obtained inevitably” (quoting Nix, 467 U.S. at 447)); Souza, 223 F.3d at 1205 (10th Cir.) (“a high level of confidence that the warrant in fact would have been issued and that the specific evidence in question would have been obtained by lawful means”); United States v. Watkins, 10 F.4th 1179, 1185 (11th Cir. 2021) (en banc) (“[W]e hold that the standard of predictive proof the government must satisfy in order to establish the proper application of the ultimate discovery exception is preponderance of the evidence, not reasonable probability.”); United States v. Holmes, 505 F.3d 1288, 1293 (D.C. Cir. 2007) (“would have been discovered anyway”). - 24 - the Fifth and the Eighth—use a reasonable-probability formulation.11 And the Eighth Circuit itself borrowed that standard from the Fifth Circuit “with no analysis of the competing approaches to the doctrine or whether [the] Fifth Circuit’s approach is consistent with Nix v. Williams.” United States v. Thomas, 524 F.3d 855, 861 (8th Cir. 2008) (Colloton, J., concurring).12 The reasonable-probability test “means something less than ‘more likely than not,’” leading to a “substantial dilution of what the Supreme Court required in [Nix].” 6 LaFave, Search & Seizure, supra, § 11.4(a) n.153 (emphasis added) (citation omitted). Various scholars have condemned the Fifth and Eighth Circuits’ reasonable-probability standard as having “wandered” so “far off the mark” established by the Supreme Court that “they have essentially removed the requirement of inevitability from the inevitable discovery doctrine.” Id.; see also Tonja Jacobi & Elliot Louthen, The Corrosive Effect of Inevitable Discovery on the Fourth Amendment, 171 U. Penn. L. Rev. (forthcoming in 2023) (manuscript at 20), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4035683 (“By replacing ‘inevitably’ with ‘reasonable probability,’ not only do these tests introduce an entirely different, and significantly lower, requisite likelihood, but they also inherently contradict the doctrine’s namesake.”). In 1986, our Court copied that version of the inevitable-discovery test from the Fifth Circuit, including the “reasonable probability” language. See Walls v. Commonwealth, 2 11 See United States v. Jackson, 596 F.3d 236, 241 (5th Cir. 2010); United States v. Thomas, 524 F.3d 855, 858 (8th Cir. 2008). 12 The Eighth Circuit case cited by the majority, United States v. Smith, 21 F.4th 510 (8th Cir. 2021), traces the “reasonable probability” standard to United States v. Conner, 127 F.3d 663, 667 (8th Cir. 1997). See Smith, 21 F.4th at 517. Conner, in turn, borrowed the “reasonable probability” standard from United States v. Wilson, 36 F.3d 1298, 1304 (5th Cir. 1994). And for the root of that precedent, Wilson cited United States v. Cherry, 759 F.2d 1196, 1204 (5th Cir. 1985). See Wilson, 36 F.3d at 1304. As discussed below, Cherry is likewise the root cause of the majority’s misapplication of the inevitable-discovery standard here. - 25 - Va. App. 639, 656 (1986) (quoting United States v. Cherry, 759 F.2d 1196, 1204 (5th Cir. 1985)). The Fifth Circuit standard in Cherry included another element too: that police must have been “actively pursuing [an] alternative line of investigation” before the illegal search. Id. (quoting Cherry, 759 F.2d at 1204). Notably, however, the result in Walls did not depend on the difference between “reasonable probability” and “inevitability.” The Court said that the Commonwealth there “failed to establish . . . that [the police] were actively pursuing an alternative line of investigation that would inevitably have led to the discovery of the evidence.” Id. (emphasis added). In 2004, Jones overruled our decision in Walls, noting that the Fifth Circuit’s requirement that the police be actively pursuing an alternative line of investigation was not supported by Nix. Jones, 267 Va. at 537. Jones block-quoted the Fifth Circuit standard on which Walls relied, including the “reasonable probability” standard. Id. at 536. But Jones did not apply that standard. To the contrary, Jones found that the drugs in question there “ultimately and inevitably would have been discovered by lawful means.” Id. (emphasis added) (quoting Nix, 467 U.S. at 444). Thus, Jones’s quotation of the reasonable-probability standard was not necessary to either the holding or the rationale for the decision. In other words, it was obiter dictum: “[a] judicial comment made while delivering a judicial opinion, but one that is unnecessary to the decision in the case and therefore not precedential (although it may be considered persuasive).” Dictum— obiter dictum, Black’s Law Dictionary (11th ed. 2019). Unfortunately, our Court has repeated that dictum by twice quoting Jones’s recitation of the Fifth Circuit standard. See Carlson v. Commonwealth, 69 Va. App. 749, 763 (2019) (quoting Jones, 267 Va. at 536); Knight v. Commonwealth, 71 Va. App. 771, 788 (2020) (quoting Carlson, 69 Va. App. at 763). As in Jones, the quotation of “reasonable probability” in Knight and Carlson was dictum. - 26 - The majority now mistakes that dictum for Carlson and Knight’s ratio decidendi—“the essential rationale in the case that determines the judgment.” Clinchfield Coal Co. v. Reed, 40 Va. App. 69, 73-74 (2003). In truth, neither case depended on the difference between reasonable probability and inevitably; both cases turned on inevitability. See Knight, 71 Va. App. at 792 (holding that “the Commonwealth failed to prove the gun inevitably would have been discovered”); Carlson, 69 Va. App. at 765 (“[W]e cannot say the evidence would have ultimately or inevitably been obtained without police misconduct.”). So neither Knight nor Carlson required that this Court repeat the Fifth Circuit’s mistake. B. The majority also errs in suggesting that an objective inquiry determines whether evidence would inevitably have been discovered. See n.6 supra. It is true that in many if not most Fourth Amendment contexts, courts “do not examine the subjective understanding of the particular officer involved.” Mason v. Commonwealth, 64 Va. App. 292, 302 (2015) (en banc) (quoting Heien v. North Carolina, 574 U.S. 54, 66 (2014)). But that is not true in all Fourth Amendment contexts. For example, a subjective standard applies to inventory searches, which police may not use as a ruse to discover incriminating evidence, nor to administrative inspections, which police may not use as a pretext to obtain evidence of a criminal violation. See Whren v. United States, 517 U.S. 806, 811 (1996); see also Orin S. Kerr, The Questionable Objectivity of Fourth Amendment Law, 99 Tex. L. Rev. 447, 451-66 (2021) (surveying Fourth Amendment doctrines that involve subjective inquiries). The inevitable-discovery doctrine is another exception that demands a subjective inquiry. Murray requires that the trial judge determine “whether [a warrant] would have been sought even if what actually happened had not occurred.” 487 U.S. at 542 n.3. It depends on what the officer would have done in that counterfactual situation. Id. at 540 n.2. In other words, “Murray - 27 - assumes that the question is the actual motivation or intention of the officers in the particular case,” requiring “a subjective rather than an objective test.” 6 LaFave, Search & Seizure, supra, § 11.4(f). “Federal circuit courts . . . have uniformly concluded” that a subjective standard applies to this determination. Commonwealth v. Pearson, 162 N.E.3d 645, 650 (Mass. 2021). As a leading scholar has put it, “lower courts have uniformly held that Murray requires a separate finding[] based on an inquiry into the state of mind of the officers seeking the warrant . . . .” 3 LaFave, Criminal Procedure, supra, § 9.4(b) n.81.13 13 See, e.g., United States v. Siciliano, 578 F.3d 61, 69 (1st Cir. 2009) (“[T]he first prong . . . is ‘subjective,’ concerning ‘the police officers’ intent,’ in contrast to the objective determination of probable cause under the second prong.” (quoting United States v. Dessesaure, 429 F.3d 359, 369 (1st Cir. 2005))); United States v. Hill, 776 F.3d 243, 252-53 (4th Cir. 2015) (remanding for factual determination on officer’s intent to seek warrant); United States v. Restrepo, 966 F.2d 964, 972 (5th Cir. 1992) (“[U]nlike the objective test of whether the expurgated affidavit constitutes probable cause to issue the warrant, the core judicial inquiry . . . is a subjective one: whether information gained in the illegal search prompted the officers to seek a warrant . . . .”); United States v. Markling, 7 F.3d 1309, 1317-18 (7th Cir. 1993) (remanding for a finding under Murray whether the officer “would have applied for a warrant” if he had not illegally searched the defendant’s briefcase); Lauderdale v. State, 120 S.W.3d 106, 112 (Ark. Ct. App. 2003) (“[T]he core judicial inquiry . . . is a subjective one . . . .” (quoting Restrepo, 966 F.2d at 972)); People v. Weiss, 978 P.2d 1257, 1261 (Cal. 1999) (interpreting Murray “to require a finding that the police subjectively would have sought the warrant even without the illegal conduct”); People v. Schoondermark, 759 P.2d 715, 719 (Colo. 1988) (en banc) (remanding for determination “whether the officers would have sought the warrant even if they had not entered the house and observed the incriminating evidence”); Evans v. United States, 122 A.3d 876, 885 (D.C. 2015) (“[T]he government bore the burden of proof on the question whether the police would have sought a warrant even if [the officer] had not entered the apartment.”); Pearson, 162 N.E.3d at 650 (“a subjective inquiry”); State v. Lieberg, 553 N.W.2d 51, 57-58 (Minn. Ct. App. 1996) (remanding for determination whether “the police would have sought a warrant even in the absence of the information generated by the unlawful search”); State v. Jurgens, 454 N.W.2d 280, 282-83 (Neb. 1990) (remanding for further findings on officer’s intent to seek search warrant); State v. Holland, 823 A.2d 38, 50 (N.J. 2003) (rejecting the prosecution’s argument that the “officers would have sought the warrant regardless of their improper initial search” because both the officers’ testimonies and the warrant affidavit reflected that they decided to seek the warrant based on what they had seen during the illegal search); People v. Marinez, 993 N.Y.S.2d 304, 305-06 (N.Y. App. Div. 2014) (ordering new trial where evidence showed that an unlawful search prompted officer to seek search warrant); State v. Winkler, 567 N.W.2d 330, 334 (N.D. 1997) (“a subjective, rather than objective test”); State v. Lange, 463 N.W.2d 390, 396-97 (Wis. Ct. App. 1990) (remanding for determination whether officer would have sought a warrant without the illegal search and seizure). - 28 - Failing to acknowledge the uniform weight of authority going the other way, the majority mistakenly relies instead on Justice Marshall’s concern in his Murray dissent about the risk that a subjective standard might reward “rule-bending” police officers. See n.6 supra. To be sure, Justice Marshall worried that a subjective inquiry might “turn entirely on an evaluation of the officers’ intent,” making it “difficult for the trial court to verify, or the defendant to rebut, an assertion by officers that they always intended to obtain a warrant, regardless of the results of the illegal search.” 487 U.S. at 547 (Marshall, J., dissenting). But the majority here overlooks the Murray majority’s response to that concern—police “officers’ assurances” would not be “dispositive . . . [w]here the facts render those assurances implausible.” Id. at 540 n.2. In any event, the majority here cannot sidestep the subjective standard by relying on the dissenting opinion in a case that requires us to apply that subjective standard. C. Finally, when evaluating whether evidence inevitably would have been discovered had an illegal search not been permitted, trial courts should consider whether the failure to apply the exclusionary rule would reward police misconduct. Nix described the independent-source doctrine as an exception to the exclusionary rule to “put[] police in the same, not a worse, position that they would have been in if no police error or misconduct had occurred.” 467 U.S. at 443. Likewise, the “purpose of the inevitable discovery rule is to block setting aside convictions that would have been obtained without police misconduct.” Id. at 443 n.4. But the inverse is also true: courts must be vigilant to ensure that an unconstitutional shortcut has not put the police in a better position than if there had been no police misconduct at all. For instance, an officer is not categorically excused from obtaining a warrant to search a residence just because he has rock-solid probable cause. See Part II supra. Permitting officers to routinely forgo applying for a warrant in that situation “would essentially provide a free pass to - 29 - the police to violate a defendant’s rights with no risk of having the evidence excluded.” Jones v. Commonwealth, No. 1465-14-3, slip op. at 8, 2015 WL 7253652, at 4 (Va. Ct. App. Nov. 17, 2015) (Humphreys, J., dissenting). Similarly, courts should deter a “‘search first, warrant later’ mentality.” Murray, 487 U.S. at 540 n.2. Without a more rigorous application of the exclusionary rule, the police “might well view a warrantless search as a worthwhile shortcut because it would tell them whether it would be worth the bother of obtaining and executing the warrant.” 3 LaFave, Criminal Procedure, supra, § 9.3(e). IV. I would vacate the judgment and remand this case to the trial court to apply the correct legal standards set out in part III. The trial court should be directed to examine whether the Commonwealth carried its burden of proving that it was inevitable—not just reasonably probable—that Officer Sawyer would have sought and obtained a warrant had Daye refused to let the police search his residence. The trial court should also be asked to reconsider the evidence under the subjective standard required by Murray. As the Commonwealth acknowledged at oral argument, none of the officers testified that they would have gotten the warrant if they had not entered the premises and seen the contraband. What is more, Officer Sawyer’s testimony contradicts the claim that he would have sought and obtained a warrant if the police had not entered the residence illegally and seen large amounts of marijuana. Sawyer testified that he did not make the decision to seek a warrant until five minutes after he entered and saw contraband “in plain view.” When asked what he would have done if he had not obtained permission to enter, Sawyer did not say that he would have applied for a warrant. He said, instead, that “we would have still [gone] inside, secured the residence,” and “anything observed in plain view we would have then contacted the supervisor” to seek approval for the warrant. Sawyer made clear that seeing the contraband - 30 - during his “protective sweep” was the reason for his seeking the warrant. But the trial court found—and the Commonwealth does not dispute—that his entry was illegal because it was not authorized as a protective sweep. The trial court credited that testimony. It found that Sawyer did not decide to get a search warrant until five minutes after he entered the residence, once he saw the contraband inside. The court further found that “the warrant was prompted by what [the police] had seen during the unlawful entry.” We must defer to those factual findings. Ray, 74 Va. App. at 302. But far from supporting the trial court’s inevitable-discovery determination, that testimony suggests “that the police decision . . . was prompted in part by the illegal search.” State v. Boll, 651 N.W.2d 710, 719 (S.D. 2002). The majority here has overlooked most of that testimony, relying instead on a follow-up statement by Sawyer at the suppression hearing that, “If [Daye] had denied consent, I would attempt to obtain the search warrant.” But that statement must be understood in light of Sawyer’s earlier testimony that he would have obtained a search warrant because he would have conducted the (illegal) protective sweep and would have seen contraband in plain view. Additional doubt that the police would have obtained a warrant without the illegal entry comes from the fact that the warrant affidavit included statements gleaned only from the illegal entry. Moreover, Sawyer said that his shift supervisor was “the one who makes the decision on getting a search warrant.” The supervisor here, Sergeant White, “arrived at the scene at some point while the officers were still inside the apartment,” and White approved the warrant sometime later. Yet the Commonwealth did not introduce evidence that White would have approved seeking a search warrant based only on the strong smell of marijuana at the front door. Finally, the trial court should be asked to reexamine whether applying the exclusionary rule here is needed to deter police misconduct. The trial court found that the officers coerced - 31 - Daye into letting them search his residence, rendering his consent involuntary. The police told Daye that if he didn’t consent, they would “detain [him] and put [him] in cuffs and sit [him] on these steps for five hours” while they got a warrant. That appears to have been a bluff; the magistrate issued the warrant here twenty-six minutes after Officer Sawyer filed his affidavit requesting it. The trial court said that it did “not condone the methods” used by the police and that it was “appalled” by their conduct. That is an unmistakable sign that deterrence may be necessary. ** In short, the question under Murray is whether the police would have sought and obtained a search warrant if Daye had denied them entry—based solely on what the police knew at the outset of the encounter, before they illegally searched his home. I “have no doubt” that Officer Sawyer could have sought a warrant when he smelled marijuana coming from inside the house, but whether he would have done so “presents an entirely different question.” Allen, 159 F.3d at 840. In a case mirroring this one, the Supreme Court of New Hampshire held that the fact that the officers smelled marijuana coming from the home was not enough to show inevitable discovery without proof that the police would have actually sought and obtained a warrant. State v. Davis, 267 A.3d 1120, 1123, 1130 (N.H. 2021). The same is true here. Because “it is the function of the [trial court] rather than the Court of Appeals to determine the facts,” Murray, 487 U.S. at 543, we should remand this case to the trial court to conduct the inevitable-discovery analysis under the correct legal standards. - 32 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488595/	COURT OF APPEALS OF VIRGINIA Present: Chief Judge Decker, Judge O’Brien and Senior Judge Haley PUBLISHED Argued at Richmond, Virginia PATRICK EDWARD CORNELL OPINION BY v. Record No. 1381-21-2 JUDGE MARY GRACE O’BRIEN NOVEMBER 22, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF DINWIDDIE COUNTY Paul W. Cella, Judge (M.G. Henkle; Henkle Law Firm, on brief), for appellant. Appellant submitting on brief. William K. Hamilton, Assistant Attorney General (Jason S. Miyares, Attorney General, on briefs), for appellee. This case requires us to determine whether an appellant’s counsel may file an appellate brief that substantively addresses certain assignments of error but submits others for our consideration under Anders v. California, 386 U.S. 738 (1967). A jury convicted Patrick Edward Cornell (“appellant”) of aggravated sexual battery, in violation of Code § 18.2-67.3. On appeal, his attorney raises five assignments of error, but states that two of them are appealed “pursuant to Anders v. California, 386 U.S. 738 (1967).” Counsel identifies the issues in those two assignments of error, makes the necessary representation under Anders, and moves to withdraw as to those assignments of error only.1 He addresses the other three assignments of error on their merits. 1 On March 11, 2022, we granted appellant’s counsel’s request for an extension of time to allow appellant pro se to file a supplemental opening brief. See Rule 5A:20(i). BACKGROUND We state the facts in the light most favorable to the prevailing party, the Commonwealth. See Zebbs v. Commonwealth, 66 Va. App. 368, 373-74 (2016). In 2019, appellant lived with his girlfriend, whose nine-year-old daughter (“K.P.”) 2 visited every other weekend. K.P. had her own room and slept on the top bunk of a bunk bed. One night in early 2019,3 K.P. woke to find appellant standing next to her bed. Appellant put his hand under her underwear and touched her vagina “in a circular motion” for what “felt like a long time,” and then left the room. K.P. felt “a little bit of pain . . . [o]n [her] vagina” after he touched her. Appellant returned and asked if she was “okay, because [she] was crying,” and K.P. told him, “[N]o just go.” K.P. woke her mother, who was asleep in the living room, and told her that appellant had touched her vagina and she was afraid he might touch her again if she went back to sleep in her room. K.P.’s mother “checked” K.P.’s vagina, spoke to appellant and smelled his fingers, and then told K.P. to hug appellant and go back to bed, apparently not believing the child. On October 14, 2020, K.P. reported the abuse to her older stepsister, father, and stepmother. K.P.’s father took her to the police station the next day, where she spoke with an investigator who described her as “polite[,] cooperative[, and] very forthcoming.” K.P. explained that she had not reported the incident earlier because her mother did not believe her and she was afraid no one else would believe her either. At trial, K.P.’s mother testified that when K.P. told her what happened, she “calmed her [daughter] down,” took her into the bathroom, and discovered that K.P. had a “nasty” urinary tract 2 We use the child’s initials to protect her privacy. 3 K.P. could not be precise about the date of the crime. She remembered that her mother was pregnant with appellant’s child and it was before the “gender reveal” party, which occurred in March 2019. The baby was born on August 8, 2019. -2- infection. K.P.’s mother stated that K.P. gets these infections frequently and, when she does, she suffers night terrors during which she sits up in bed and talks. According to K.P.’s mother, appellant told her that he found K.P. sitting up in bed with her eyes closed and he laid her back down, covered her up, and left the room. K.P.’s mother testified that “at one point” she smelled appellant’s hands, but she did not elaborate on that testimony. K.P.’s mother also stated that K.P. tells “little fibs” and has a reputation of “not being very truthful,” but she was unaware of her daughter lying about “big things.” On rebuttal, K.P.’s counselor testified that K.P. was “usually honest with [her and] also the people in [K.P.’s] life” and is generally known to be truthful. K.P.’s father corroborated this testimony and testified that K.P. is “mostly truthful” with him. Appellant testified and denied touching K.P., stating that he “would never do something like that.” He did not recall the night that K.P. and her mother described in their testimony. The court denied appellant’s motion to strike, and the jury found him guilty of aggravated sexual battery. At the sentencing hearing, appellant orally moved for a continuance. His counsel explained that he did not receive the presentence report until the preceding week due to slow mail service and, because of his trial schedule, he had only “quickly” reviewed the report with appellant earlier that day. The prosecutor objected because witnesses were present for the hearing. The court denied appellant’s motion. The prosecutor advised the court of a discrepancy between the events described in the presentence report and the evidence presented at trial. She explained that the narrative in the report might be inaccurate because the probation officer who wrote it had not been present at trial. The judge, who had presided over the trial, acknowledged the clarification, and appellant did not object to the introduction of the report. Appellant also moved to amend the sentencing guidelines by -3- removing the enhancement for K.P.’s emotional injury; however, the court denied his motion. The court sentenced appellant to ten years’ imprisonment with all but three years and four months suspended, and three years of supervised probation. ANALYSIS I. “Partial” Anders Brief Appellant’s counsel notes five assignments of error in his opening brief and presents argument for three of them: (1) that the Commonwealth failed to prove his intent was to sexually gratify himself when touching K.P.; (2) that the evidence was insufficient based on K.P.’s lack of credibility; and (3) that the court erred in denying his motion to continue sentencing. Counsel also assigns two other errors: (1) that the Commonwealth failed to establish the time frame of the offense; and (2) that the court erred by including the emotional-injury enhancement on the sentencing guidelines. For these assignments of error, he asks this Court to review the record pursuant to Anders v. California, 386 U.S. 738 (1967), and moves to withdraw. No Virginia court has specifically addressed whether an appellant’s counsel may file a “hybrid” or “partial” Anders brief on behalf of his client, asserting that some assignments of error are legally meritorious while others are frivolous.4 4 We note that many other jurisdictions have declined to permit partial Anders briefs. See State v. Grady, 524 S.E.2d 75, 78 (N.C. Ct. App. 2000) (holding that “[a] case may be presented either under the purview of Anders as containing no apparent issue for appeal or as a case involving one or more issues suitable for appellate review; logically and procedurally, it cannot be brought forward on appeal as both”); see also Hammond v. State, 201 So. 3d 623, 627 (Ala. Crim. App. 2015) (finding appellant “raised an arguable issue with respect to one of [his] convictions” and therefore “appellate counsel’s filing of a ‘partial’ Anders brief was improper, and this portion of [the] brief will not be considered on appeal”); People v. Wallin, 167 P.3d 183, 187 (Colo. App. 2007) (“Anders does not authorize the advancement of a concededly meritless claim in a brief that contains another claim which is purported to have merit.”). -4- In 1967, the United States Supreme Court established a procedure for an attorney who concludes that his client’s appeal of a criminal conviction completely lacks legal merit in Anders v. California: [I]f counsel finds his case to be wholly frivolous, after a conscientious examination of it, he should so advise the court and request permission to withdraw. That request must, however, be accompanied by a brief referring to anything in the record that might arguably support the appeal. A copy of counsel’s brief should be furnished [to] the indigent and time allowed him to raise any points that he chooses; the court—not counsel—then proceeds, after a full examination of all the proceedings, to decide whether the case is wholly frivolous. 386 U.S. at 744 (emphases added). The Virginia Supreme Court used similarly comprehensive language when addressing an indigent defendant’s right to an Anders procedure for a case appealed from the Court of Appeals: Consistent with Anders, therefore, we hold that when an indigent’s counsel conscientiously determines that an appeal to this Court would be wholly frivolous, he must so advise this Court and request permission to withdraw. Simultaneously with such request[,] . . . counsel shall file a petition for appeal identifying anything in the record that arguably might support the appeal. . . . If, after a full examination of the record, we conclude that the appeal is wholly frivolous, we will affirm the decision of the Court of Appeals. On the other hand, if we determine that the appeal is not wholly frivolous, we will permit [a defendant’s] present counsel to withdraw, appoint other counsel to represent him in his appeal, and allow time for new counsel to file an amended petition for appeal. Brown v. Warden of Va. State Penitentiary, 238 Va. 551, 555-56 (1989) (emphases added). Likewise, in Akbar v. Commonwealth, 7 Va. App. 611, 612 (1989), this Court referred to counsel’s motion to withdraw because of “his assessment that the appeal is frivolous.” (Emphasis added). We held that “[counsel] may [withdraw] only after asserting as an advocate in his client’s behalf all arguments ‘that might arguably support the appeal.’” Id. (emphasis added) (quoting -5- Anders, 386 U.S. at 744); see also Rule 5A:20(i) (stating that the Anders procedure applies when “counsel for appellant finds the client’s appeal to be without merit” (emphasis added)).5 The procedure set out in Anders, 386 U.S. at 744, reiterated in Brown, 238 Va. at 555-56, and Akbar, 7 Va. App. at 612, contemplates a situation in which counsel files an appeal asserting that the alleged errors are, in their entirety, “wholly frivolous.” This precedent does not support permitting counsel to present both frivolous and nonfrivolous issues in the same brief and then seek to withdraw as to those frivolous issues to allow pro se briefing. “[A] court need not permit ‘“hybrid” representation.’” Hammer v. Commonwealth, 74 Va. App. 225, 242 (2022) (quoting Muhammad v. Commonwealth, 269 Va. 451, 503 (2005)). Indeed, requiring appellate counsel to present only nonfrivolous assignments of error or conclude that the appeal is wholly frivolous is consistent with the purpose of the Anders procedure. The Anders procedure seeks to reconcile the tension between an attorney’s obligation to preserve the client’s right to an appeal and an attorney’s duty “not [to] bring or defend a [frivolous] proceeding.” Va. Rules of Pro. Conduct r. 3.16; see also Anders, 386 U.S. at 741, 743; Smith v. Robbins, 528 U.S. 259, 278 (2000) (stating that an indigent party’s right to appellate counsel “does not include the right to counsel for bringing a frivolous appeal. . . . The obvious goal of Anders was to prevent this limitation on the right to appellate counsel from swallowing the right itself.”). If an attorney can identify and raise nonfrivolous issues on appeal, then there is no Anders concern; the client’s right to appeal is preserved, and there is no conflict between the two duties. 5 We note that Standard 10.3.3(B) of the Standards of Practice for Appellate Defense Counsel, established by the Virginia Indigent Defense Commission pursuant to a legislative mandate in Code § 19.2-163.01(A)(4), directs counsel to the Anders procedure “when counsel determines there are no meritorious issues to support an appeal.” (Emphasis added). 6 Rule 3.1 of the Virginia Rules of Professional Conduct states, “A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law.” Accord Model Rules of Pro. Conduct r. 3.1 (Am. Bar Ass’n 2020). -6- Moreover, holding that partial Anders briefs are not permitted is a logical application of the United States Supreme Court’s holding in Jones v. Barnes, 463 U.S. 745, 750 (1983), that no constitutional duty requires counsel to “raise every nonfrivolous issue requested by the client.” See also Townes v. Commonwealth, 234 Va. 307, 320 (1987). If a defendant has “[no] constitutional right to compel appointed counsel to press nonfrivolous points . . . [when] counsel, as a matter of professional judgment, decides not to present those points,” then a defendant certainly has no right to compel counsel to press frivolous points. Jones, 463 U.S. at 751 (emphasis added). To hold otherwise would “disserve the very goal of vigorous and effective advocacy that underlies Anders.” Id. at 754. Therefore, we hold that “partial” or “hybrid” Anders briefs are not permitted. Accordingly, we decline to consider appellant’s assignments of error raised pursuant to Anders, deny counsel’s motion to withdraw as to those issues, and decline to consider the pro se supplemental brief. We review counsel’s three remaining assignments of error. II. Sufficiency of the Evidence Appellant contends that the evidence was insufficient to support his conviction because the Commonwealth failed to prove that he “intended to sexually gratify himself when touching the minor victim.” “When the sufficiency of the evidence is challenged on appeal, [this Court] must ‘examine the evidence that supports the conviction and allow the conviction to stand unless it is plainly wrong or without evidence to support it.’” Austin v. Commonwealth, 60 Va. App. 60, 65 (2012) (quoting Commonwealth v. McNeal, 282 Va. 16, 20 (2011)). “This deferential standard ‘requires [the Court] to “discard the evidence of the accused in conflict with that of the Commonwealth[] and regard as true all the credible evidence favorable to the Commonwealth and all fair inferences to be drawn”’ -7- from that evidence.” Williams v. Commonwealth, 71 Va. App. 462, 483-84 (2020) (second alteration in original) (quoting Vasquez v. Commonwealth, 291 Va. 232, 236 (2016)). Under Code § 18.2-67.3(A)(1), “[a]n accused is guilty of aggravated sexual battery if he or she sexually abuses” a victim who is less than thirteen years old. “Sexual abuse” is defined as “an act committed with the intent to sexually molest, arouse, or gratify any person” when “[t]he accused intentionally touches the complaining witness’s intimate parts.” Code § 18.2-67.10(6)(a). We have described “molest” as “to meddle or interfere with unjustifiably[,] often as a result of abnormal sexual motivation.” Pulliam v. Commonwealth, 55 Va. App. 710, 715 n.2 (2010) (quoting Molest, Webster’s Third New Int’l Dictionary (1993)). The Commonwealth was required to prove that appellant’s intent was to “molest, arouse, or gratify” any person. Code § 18.2-67.10(6). Whether the required intent exists is “a question of fact for the trier of fact”—in this case, the jury. Brown v. Commonwealth, 68 Va. App. 746, 787 (2018) (quoting Nobles v. Commonwealth, 218 Va. 548, 551 (1977)). “[I]ntent may be, and most often is, proven by circumstantial evidence and the reasonable inferences to be drawn from proven facts.” Secret v. Commonwealth, 296 Va. 204, 229 (2018) (quoting Viney v. Commonwealth, 269 Va. 296, 301 (2005)). Appellant only challenges the sufficiency of the evidence to support a finding that he intended to sexually gratify himself; however, the jury could have also found that appellant’s intent was to molest K.P “as a result of abnormal sexual motivation.” Code § 18.2-67.10(6); Pulliam, 55 Va. App. at 715 n.2. Here, the jury properly considered not only K.P.’s description of the events, but also appellant’s contention that he never touched K.P. inappropriately. Appellant did not testify that he -8- was in K.P.’s bedroom for any benign purpose; he simply denied that the entire incident occurred.7 The jury was free to disregard his testimony, believe K.P., and conclude that appellant was “lying to conceal his guilt.” Flanagan v. Commonwealth, 58 Va. App. 681, 702 (2011) (quoting Marable v. Commonwealth, 27 Va. App. 505, 509-10 (1998)). The jury’s finding that appellant intended to sexually gratify himself or molest K.P. is not “plainly wrong or without evidence to support it.” Austin, 60 Va. App. at 65 (quoting McNeal, 282 Va. at 20). Accordingly, we will not disturb the jury’s determination that the Commonwealth proved the necessary elements of the offense. III. K.P.’s Credibility Although appellant argues that the evidence was insufficient to support his conviction because K.P.’s testimony “clearly was unworthy of belief,” he concedes that he did not preserve this issue for appeal. Rule 5A:18 provides that “[n]o ruling of the trial court . . . will be considered as a basis for reversal unless an objection was stated with reasonable certainty at the time of the ruling, except for good cause shown or to enable this Court to attain the ends of justice.” Appellant seeks to invoke the ends of justice exception to Rule 5A:18, but he argues nothing in support of his claim that his conviction is a “manifest injustice.” In determining whether the exception applies, the Court considers two questions: “(1) whether there is error as contended by the appellant; and (2) whether the failure to apply the ends of justice provision would result in a grave injustice.” Williams v. Commonwealth, 294 Va. 25, 27-28 (2017) (quoting Commonwealth v. Bass, 292 Va. 19, 27 (2016)) (considering similar exception in Rule 5:25). “‘The ends of justice exception is narrow and is to be used sparingly,’ and applies only in the extraordinary situation where a miscarriage of justice has occurred.” Conley v. Commonwealth, 74 Va. App. 658, 682 (2022) (quoting Holt v. Commonwealth, 66 Va. App. 199, 209 (2016) (en banc)). “In order to avail K.P.’s mother testified that on the night of the assault, appellant said he merely laid K.P. 7 back down after finding her sitting up in bed with her eyes closed, covered her up, and left. -9- oneself of the exception, a defendant must affirmatively show that a miscarriage of justice has occurred, not that a miscarriage might have occurred.” Redman v. Commonwealth, 25 Va. App. 215, 221 (1997). “The burden of establishing a manifest injustice is a heavy one, and it rests with the appellant.” Conley, 74 Va. App. at 683 (quoting Holt, 66 Va. App. at 210). Appellant fails to carry his burden to establish a manifest injustice, and his contentions do not constitute an extraordinary situation mandating the ends of justice exception. Id. at 682. Appellant merely claims that K.P. was not a credible witness because her mother “provided an unrebutted, alternate explanation” for the incident and her mother testified that K.P. had “the character trait of not being very truthful.” K.P.’s testimony is not rendered “inherently incredible” merely because of her mother’s contradictory testimony. See Fisher v. Commonwealth, 228 Va. 296, 299-300 (1984). The factfinder’s conclusions on issues of witness credibility “may only be disturbed on appeal if this Court finds that [the witness’s] testimony was ‘inherently incredible, or so contrary to human experience as to render it unworthy of belief.’” Robertson v. Commonwealth, 12 Va. App. 854, 858 (1991) (quoting Fisher, 228 Va. at 299). The factfinder is “free to believe or disbelieve, in part or in whole, the testimony of any witness.” Bazemore v. Commonwealth, 42 Va. App. 203, 213 (2004) (en banc). The jury simply credited K.P.’s testimony over her mother’s and did not do so arbitrarily; K.P.’s mother’s testimony did not directly impeach K.P.’s account of the crime, and, although her mother testified that K.P. tells “little fibs,” she conceded on cross-examination that she was unaware of K.P. lying about “big things.” K.P.’s mother’s comments about her daughter’s reputation for truthfulness were also rebutted by K.P.’s father and counselor. The record reflects that appellant had ample opportunity to cross-examine K.P. and introduce evidence putting her credibility at issue; nothing in the record rendered K.P.’s testimony “inherently incredible” or “contrary to human experience.” Robertson, 12 Va. App. at 858 (quoting - 10 - Fisher, 228 Va. at 299). Because appellant failed to show that a miscarriage of justice occurred, we will not apply the ends of justice exception. IV. Motion to Continue the Sentencing Hearing Appellant argues that the court abused its discretion by denying his motion to continue the sentencing hearing because the judge “ignored” counsel’s proffer that he received the presentence report late and did not have enough time to review it with appellant due to counsel’s trial schedule. Appellant contends he was prejudiced because if he had more time to review the report, he would have raised the “significant discrepancy” between the narrative of events in the report and the evidence presented at trial. “The decision to grant a motion for a continuance is within the sound discretion of the circuit court and must be considered in view of the circumstances unique to each case.” Hall v. Commonwealth, 296 Va. 577, 587 (2018) (quoting Va. Fuel Corp. v. Lambert Coal Co., 291 Va. 89, 104 (2016)). “The circuit court’s ruling on a motion for a continuance will be rejected on appeal only upon a showing of abuse of discretion and resulting prejudice to the movant.” Haugen v. Shenandoah Valley Dep’t of Soc. Servs., 274 Va. 27, 34 (2007); see also Bailey v. Commonwealth, 73 Va. App. 250, 265-66 (2021). Appellant has not established either that the court abused its discretion by denying the continuance or that he was prejudiced by the denial. As the Virginia Supreme Court has stated, “[m]ere reference to a need for more time to prepare is insufficient to show that a continuance was improperly denied.” Ortiz v. Commonwealth, 276 Va. 705, 723 (2008). Additionally, not only did the court not “ignore” counsel’s concerns about receiving the report late, the judge directly addressed the basis for counsel’s request, stating that he “underst[oo]d [counsel’s] position” but needed to proceed, given the presence of the Commonwealth’s witnesses. Further, at the very beginning of the hearing, the prosecutor addressed the discrepancy between the narrative in the - 11 - report and the trial testimony, and the judge, who presided over the trial, acknowledged it. For these reasons, the court did not abuse its discretion, and appellant was not prejudiced by the court’s denial of his motion for a continuance. CONCLUSION Because we have held that partial Anders briefs are not permitted, we decline to consider the assignments of error raised pursuant to Anders. We decline to apply the ends of justice exception to address appellant’s contention that K.P.’s testimony was inherently incredible, and we find no error in the jury’s determination that all elements of the crime were established. Finally, we hold that the court did not abuse its discretion by denying appellant’s motion for a continuance. Accordingly, we affirm the court’s judgment. Affirmed. - 12 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488559/	IN THE NEBRASKA COURT OF APPEALS MEMORANDUM OPINION AND JUDGMENT ON APPEAL (Memorandum Web Opinion) STATE V. ENQUIST NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E). STATE OF NEBRASKA, APPELLEE, V. MICHAEL B. ENQUIST, APPELLANT. Filed November 22, 2022. No. A-21-1023. Appeal from the District Court for Adams County: TERRI S. HARDER, Judge. Affirmed. Shon T. Lieske, of Lieske, Lieske & Ensz, P.C., L.L.O., for appellant. Douglas J. Peterson, Attorney General, and Melissa R. Vincent for appellee. MOORE, RIEDMANN, and BISHOP, Judges. MOORE, Judge. I. INTRODUCTION Michael B. Enquist appeals from his conviction following a jury trial in the district court for Adams County of assault by strangulation, third degree domestic assault, and intimidation by electronic communication. On appeal, he alleges that certain evidence was improperly admitted, that the evidence was insufficient to sustain his convictions for assault by strangulation and third degree domestic assault, and that the court imposed an excessive sentence. Finding no error, we affirm. II. STATEMENT OF FACTS 1. CHARGES AND PRETRIAL PROCEEDINGS On December 14, 2020, the State filed an information in the district court, charging Enquist with assault by strangulation, in violation of Neb. Rev. Stat. § 28-310.01 (Cum. Supp. 2022), a Class IIIA felony; third degree domestic assault, in violation of Neb. Rev. Stat. § 28-323 (Reissue -1- 2016), a Class I misdemeanor; two counts of third degree assault, in violation of Neb. Rev. Stat. § 28-310 (Reissue 2016), both Class I misdemeanors; and intimidation by telephone call or electronic communication, in violation of Neb. Rev. Stat. 28-1310 (Cum. Supp. 2022), a Class III misdemeanor. The charges arose from Enquist’s actions on October 19 and 20, 2020, with respect to his former girlfriend, Amanda Gomez, as well as his actions with respect to other family members of Gomez (her mother and one of her sisters were identified as the victims of the two counts of third degree assault). On July 19, 2021, the State filed a motion, seeking to determine the admissibility of statements made by Gomez to a law enforcement officer immediately following the incident. The district court heard the State’s motion on September 13, 2021. At the hearing, the State presented testimony from Jenna Thayer, an officer with the police department of Hastings, Nebraska. Thayer testified about her contact with Gomez on October 20, 2020. After hearing argument from the parties’ attorneys, the court took the matter under advisement. On September 15, the court entered an order, finding that Gomez’ statements to Thayer were admissible as excited utterances pursuant to Neb. Rev. Stat. § 27-803(1) (Cum. Supp. 2022). 2. JURY TRIAL A jury trial was held on September 20 and 21, 2021. The State presented testimony from witnesses including Gomez, several of her family members and a neighbor, police officers who investigated the charges, a forensic laboratory supervisor with the Nebraska State Crime Lab, and a licensed registered nurse. The court received various exhibits including social media text messages exchanged by Enquist and Gomez, photographs taken and physical evidence collected at the crime scene, and a crime lab report. In October 2020, Gomez lived in an apartment in Hastings with her mother, her two sisters, her brother, and her two children. The apartment had both a front and back entrance, and the bedrooms were located upstairs. Enquist is the father of Gomez’ children. At that time, Gomez and Enquist were no longer dating, but they communicated in person, by telephone, and through a social media messaging application. During Gomez’ testimony the State offered into evidence several text messages Gomez received from Enquist on October 19, 2020. Enquist’s attorney objected on the bases of foundation and relevance, stating at the time the first of the message exhibits was offered, “there’s no verification that it was [Enquist] that was on the other side of that conversation at the time in which it was happening.” The district court overruled Enquist’s objections and received the messages into evidence. The messages included the following statements from Enquist (quoted as written): “[Your youngest child] wont be 1 yet not even 6 months without mother think that bitch when u reply to other dudes think that,” “do you dirty soon dont trip,” “ill make sure suffering happens,” “keep fuckn lying ill be over in 2.5 and snap u,” “u lie we can slide into the bathroom and end u,” and “U obviously think shits funny so tonight im going to show you how funny it is.” Shortly after 7 a.m. on October 20, 2020, Gomez woke when she heard her bedroom door shut, and she saw Enquist standing by the bedroom door. Gomez testified that she and her children were the only ones in the room when she went to bed and that she had locked her door from the inside. Enquist and Gomez argued, and during their argument, Enquist attempted to grab Gomez, who tried to get away from him and began yelling for her mother. Enquist bit Gomez’ lip to keep -2- her from screaming and began choking her with his hands around her throat. Gomez testified that she was not able to breathe. She recalled Enquist standing in front of her at that time. Gomez’ mother and sisters heard her screaming and ran to her room. Gomez’ mother tried to open the door, which was locked, so she kicked it open. Gomez’ mother and sisters observed Enquist standing behind Gomez with his arms around her neck. According to Gomez’ mother, Enquist appeared to be applying pressure, Gomez’ tongue was out, and Gomez was trying to scream but was only making “squeaking noises.” Gomez’ mother and one of her sisters began hitting Enquist to try to remove Enquist’s hands from Gomez’ neck. When Enquist finally released Gomez, she was unconscious and fell to the floor where her mother tried to revive her. The physical altercation between Enquist and Gomez’ sister continued until Enquist bit the sister’s finger and ran out of the room. Gomez’ mother ran after Enquist because she was afraid that he might hurt her son, who was sleeping downstairs. Gomez’ sisters followed. When Gomez’ mother reached the bottom of the stairs, Enquist struck her in the face several times. He also struck one of Gomez’ sisters in the head before running out the front door. When Gomez regained consciousness, she felt “confused and sick,” her lip was bleeding, and Enquist’s “hand prints” were on her neck. Gomez went to a neighbor’s residence and “bang[ed]” on the door. The neighbor observed various injuries to Gomez, including a laceration on her lip, some marks on her neck, and light bruising on her face. The neighbor called 911. Around 7:30 a.m. on October 20, 2020, Thayer and other police officers arrived at Gomez’ residence. Thayer observed that the sliding glass back door to the residence had been boarded up, the tape securing the board had been cut, and the board had been pulled away from the door, creating an opening into the residence. Around 7:45 or 8 a.m., Thayer spoke with Gomez in her bedroom. By that point, Gomez had changed her clothes because she defecated in her pants during the assault. According to Thayer, Gomez appeared “shocked or stressed” and initially spoke very quickly as she described the incident. Thayer observed a cut on Gomez’ lip but did not see any injuries on her neck. During Thayer’s testimony about Gomez’ statements, Enquist objected on the basis of hearsay; his attorney also argued that the statements to Thayer were “testimonial,” “obtained as preparation for litigation and in violation of Brady Maryland,” and “violate 403 and 404 as not being helpful to the jury.” The district court overruled Enquist’s objections, citing the court’s pretrial ruling. Additional evidence gathered at the scene by law enforcement included photographs of the damage to Gomez’ bedroom door from her mother kicking it open, a swab from a bloodstain on the front door to the residence, and a Nebraska identification card belonging to Enquist found on the nightstand in Gomez’ room. The swab was later sent to the Nebraska State Patrol Crime Lab where the DNA profile obtained was “7.29 times 10 to the 26th times more likely if it originated from [Enquist] than if it originated from an unknown unrelated individual.” The State called a licensed registered nurse as an expert witness. The nurse testified that strangulation can cause a person to lose consciousness in as little as 5 to 10 seconds, can cause a person to lose control of his or her bladder or bowels, and does not necessarily leave visible marks on a person’s neck. She opined, based on her review of police reports and photographs provided to her, that Gomez had been strangled. -3- 3. VERDICT The jury found Enquist guilty of assault by strangulation, third degree domestic assault, and intimidation by electronic communication, but it found him not guilty of the two counts of third degree assault. 4. SENTENCING A sentencing hearing was held before the district court on November 22, 2021. After hearing argument from the parties’ attorneys and comments from Enquist, the court sentenced Enquist to 3 years’ imprisonment and 18 months’ post-release supervision on the assault by strangulation conviction, to 1 year of imprisonment on the third degree domestic assault conviction, and to 3 months’ imprisonment on the intimidation by electronic communication conviction. The court ordered the sentences on the third degree domestic assault and intimidation by electronic communication convictions to run concurrently with one another but consecutively to the sentence on the assault by strangulation conviction. The court gave Enquist credit for 383 days of time served. III. ASSIGNMENTS OF ERROR Enquist asserts, restated and reordered, that (1) the district court erred in admitting hearsay statements made to officers based on the court’s finding that the statements constituted excited utterances by Gomez, (2) the court erred in allowing evidence about social media text messages without proper foundation and over his relevancy objections, (3) the court erred in allowing testimony concerning the emotional reaction of witnesses without proper foundation and over his relevancy objection, (4) the evidence was insufficient to convict Enquist of assault by strangulation and third degree domestic assault, (5) the court erred by imposing an excessive sentence. Enquist has not argued his third assignment of error, and he presents arguments that were not specifically assigned as error. An alleged error must be both specifically assigned and specifically argued in the brief of the party asserting the error to be considered by an appellate court. State v. Vanderford, 312 Neb. 580, 980 N.W.2d 397 (2022). Accordingly, we have only considered Enquist’s first, second, fourth, and fifth assignments of error as set forth above. IV. STANDARD OF REVIEW In proceedings where the Nebraska Evidence Rules apply, the admissibility of evidence is controlled by the Nebraska Evidence Rules and judicial discretion is involved only when the rules make discretion a factor in determining admissibility. State v. Cerros, 312 Neb. 230, 978 N.W.2d 162 (2022). Where the Nebraska Evidence Rules commit the evidentiary question at issue to the discretion of the trial court, an appellate court reviews the admissibility of evidence for an abuse of discretion. Id. A trial court has the discretion to determine the relevancy and admissibility of evidence, and such determinations will not be disturbed on appeal unless they constitute an abuse of that discretion. Id. A judicial abuse of discretion exists only when the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying a just result in matters submitted for disposition. State v. Greer, 312 Neb. 351, 979 N.W.2d 101 (2022). -4- Regardless of whether the evidence is direct, circumstantial, or a combination thereof, and regardless of whether the issue is labeled as a failure to direct a verdict, insufficiency of the evidence, or failure to prove a prima facie case, the standard is the same: In reviewing a criminal conviction, an appellate court does not resolve conflicts in the evidence, pass on the credibility of witnesses, or reweigh the evidence; such matters are for the finder of fact, and a conviction will be affirmed, in the absence of prejudicial error, if the evidence admitted at trial, viewed and construed most favorably to the State, is sufficient to support the conviction. State v. Cerros, supra. A sentence imposed within the statutory limits will not be disturbed on appeal in the absence of an abuse of discretion by the trial court. State v. Greer, supra. V. ANALYSIS 1. ADMISSION OF EVIDENCE (a) Excited Utterance Enquist asserts that the district court erred in admitting hearsay statements made to officers, specifically Gomez’ statements to Thayer on October 20, 2020, based on the court’s finding that the statements constituted excited utterances. Thayer was one of the officers dispatched to Gomez’ residence on the morning in question. She arrived at the residence 3 or 4 minutes after being dispatched. She spoke with Gomez within 15 or 20 minutes of when officers first arrived and stated that the reported incident occurred “immediately prior” to her being dispatched. Thayer stated that Gomez initially spoke “very quickly” and appeared “shocked or stressed.” After the district court overruled Enquist’s objection to Gomez’ statements to Thayer, Thayer testified about Gomez’ description of the incident, including her statements that she woke to the sound of her door closing to find Enquist in her bedroom, that he physically assaulted her, and that he “started to choke her.” Enquist argues that this testimony should not have been admitted under the excited utterance exception to the hearsay rule. For a statement to qualify as an excited utterance, the following criteria must be established: (1) There must have been a startling event, (2) the statement must relate to the event, and (3) the statement must have been made by the declarant under the stress of the event. State v. Nolt, 298 Neb. 910, 906 N.W.2d 309 (2018). The key requirement to the excited utterance exception is spontaneity, which requires a showing that the statements were made without time for conscious reflection. Id. Here, the startling event was the assault on and strangulation of Gomez, and Gomez’ statements related to that event because the statements identified the person who committed those acts. Thus, the issue is whether her statements were made under the stress of the assault and strangulation. An excited utterance does not have to be contemporaneous with the exciting event. Id. It may be subsequent to the event if there was not time for the exciting influence to lose its sway. Id. The true test is not when the exclamation was made but whether, under all the circumstances, the declarant was still speaking under the stress of nervous excitement and shock caused by the event. An excited utterance does not have to be contemporaneous with the exciting event. It may be subsequent to the event if there was not time for the exciting influence to lose its sway. Id. Facts relevant to whether a statement is an excited utterance include the declarant’s manifestation of -5- stress, the declarant’s physical condition, and whether the declarant spoke in response to questioning. Id. Statements made in response to questions from law enforcement in particular do not generally have inherent guarantees of reliability and trustworthiness. Id. But the declarant’s answer to a question may still be an excited utterance if the context shows that the statement was made without conscious reflection. Id. Here, Gomez was violently assaulted by Enquist, observed his violence against other members of her family, and was exhibiting signs that she was still in shock when she spoke to Thayer a short time later. We note Thayer’s testimony at the pretrial hearing that Gomez’ responses to her questions were “short” and “rambling.” Although her statements were made in response to questions from law enforcement, we find that they were made while she was still under the stress of Enquist’s violent behavior. The district court did not err by admitting Gomez’ statements to Thayer as excited utterances. And, even if the court had erred in admitting that portion of Thayer’s testimony, any error was harmless because it was cumulative to Gomez’ testimony at trial and there was other competent evidence to support Enquist’s convictions (e.g., multiple witnesses observed Enquist strangling Gomez, there was DNA and other physical evidence tying Enquist to the crimes, as well as other evidence that Gomez had been strangled). See State v. Miller, 312 Neb. 17, 978 N.W.2d 19 (2022) (when evidence is cumulative and there is other competent evidence to support conviction, improper admission or exclusion of evidence is harmless beyond reasonable doubt). This assignment of error fails. (b) Text Messages Enquist asserts that the district court erred in allowing evidence about social media text messages without proper foundation and over his relevancy objections. The exhibits containing the messages were admitted at trial during Gomez’ testimony over Enquist’s objections as to foundation and relevancy. He did not object to Gomez’ testimony that the exhibits were true and accurate copies of messages she received from Enquist on October 19, 2020. This assignment of error fails. First, although Enquist assigned error to the admission of the messages on the bases of relevancy and foundation, he argues that the messages were improperly admitted hearsay evidence. See State v. Vanderford, 312 Neb. 580, 980 N.W.2d 397 (2022) (alleged error must be both specifically assigned and specifically argued in brief of party asserting error to be considered by appellate court). Additionally, Enquist did not object to the admission of the text messages on the basis of hearsay and has not preserved that issue for appeal. An objection must be specifically stated, and on appeal, a defendant may not assert a different ground for his or her objection to the admission of evidence than was offered to the trier of fact. State v. Childs, 309 Neb. 427, 960 N.W.2d 585 (2021). 2. SUFFICIENCY OF EVIDENCE Enquist asserts that the evidence was insufficient to convict him of assault by strangulation and third degree domestic assault. Under § 28-310.01(1), a person commits an assault by strangulation if the person knowingly and intentionally “[i]mpedes the normal breathing or circulation of the blood of another person by applying pressure on the throat or neck of the other person” or “[i]mpedes the normal breathing of another person by covering the mouth and nose of the person.” Pursuant to -6- § 28-323(1), a person commits third degree domestic assault if he or she “(a) [i]ntentionally and knowingly causes bodily injury to his or her intimate partner,” “(b) [t]hreatens an intimate partner with imminent bodily injury,” or “(c) [t]hreatens an intimate partner in a menacing manner.” Gomez, her mother, and her sisters all observed Enquist in Gomez’ bedroom on October 20, 2020. Gomez woke to see Enquist standing by the door, and they began to argue. Gomez described their argument as both verbal and physical, indicating that Enquist was grabbing her hands as she tried to get away from him and he bit her lip at one point to stop her screaming. As their argument progressed, Enquist placed his hands on Gomez’ throat and choked her, causing her to pass out. Gomez’ mother and sisters heard Gomez scream and saw Enquist in Gomez’ room “choking” or “strangling” Gomez, who fell to the floor once Enquist released her. When she came to after passing out, Gomez felt “confused and sick,” her mouth was bleeding, and Gomez’ hand prints were on her neck. Gomez called 911 from a neighbor’s house, and the neighbor observed a laceration on Gomez’ lip, some marks on her neck, and light bruising on her face. Law enforcement took photographs of Gomez’ face and neck, collected items belonging to Enquist from Gomez’ bedroom, and located and collected blood from Enquist on an outside door to the residence. The injury to Gomez’ lip is visible in the photographs. There was fecal matter on the pants Gomez was wearing at the time of the incident. A licensed registered nurse who viewed the photographs and police reports, testified that signs of strangulation can include loss of consciousness and “involuntary urine or stool,” that there may be no signs or symptoms, or that they may show up days later. She opined that the evidence she reviewed was “consistent with somebody who has been strangled.” Enquist’s arguments about the sufficiency of the evidence on appeal involve the credibility of various witnesses and the weight of certain evidence, and as noted above, this court does not resolve conflicts in the evidence, pass on the credibility of witnesses, or reweigh the evidence, which matters are for the finder of fact. See State v. Cerros, 312 Neb. 230, 978 N.W.2d 162 (2022). Viewing the evidence in the light most favorable to the State, we find that there was sufficient evidence to sustain Enquist’s convictions for assault by strangulation and third degree domestic assault in connection with the October 2020 incident. 3. EXCESSIVE SENTENCE Enquist was convicted of one count of assault by strangulation, a Class IIIA felony, one count of third degree domestic assault, a Class I misdemeanor, and one count of intimidation by electronic communication, a Class III misdemeanor. § 28-310.01, § 28-323, and § 28-1310. A Class IIIA felony is punishable by a maximum of 3 years’ imprisonment and 18 months’ post-release supervision, a $10,000 fine, or both; there is no minimum term of imprisonment, but there is a minimum of 9 months’ post-release supervision if imprisonment is imposed. Neb. Rev. Stat. § 28-105(1) (Cum. Supp. 2022). A Class I misdemeanor is punishable by a maximum of not more than 1 year of imprisonment, or $1,000 fine, or both; there is no minimum term of imprisonment. Neb. Rev. Stat. § 28-106(1) (Reissue 2016). A Class III misdemeanor is punishable by a maximum of 3 months’ imprisonment, or $500 fine, or both; there is no minimum term of imprisonment. § 28-106(1). The district court sentenced Enquist to 3 years’ imprisonment and 18 months’ post-release supervision for assault by strangulation, to 1 year of imprisonment for third degree domestic -7- assault, and to 3 months’ imprisonment for intimidation by electronic communication, with the domestic assault and intimidation sentences running concurrently with one another but consecutively with the strangulation sentence, and the court gave him credit for 383 days of time served. Enquist recognizes that his sentences were within the statutory ranges, but he argues that the district court should have imposed sentences of probation, time served, or sentences more lenient than those it did impose. With respect to probation, Neb. Rev. Stat. § 29-2260(2) (Reissue 2016) provides: Whenever a court considers sentence for an offender convicted of either a misdemeanor or a felony for which mandatory or mandatory minimum imprisonment is not specifically required, the court may withhold sentence of imprisonment unless, having regard to the nature and circumstances of the crime and the history, character, and condition of the offender, the court finds that imprisonment of the offender is necessary for protection of the public because: (a) The risk is substantial that during the period of probation the offender will engage in additional criminal conduct; (b) The offender is in need of correctional treatment that can be provided most effectively by commitment to a correctional facility; or (c) A lesser sentence will depreciate the seriousness of the offender’s crime or promote disrespect for law. During the sentencing hearing, the district court spoke directly to the exclusionary factors found in § 29-2260(2). The court noted “the amount of past criminal behavior that has the same type of violence involved” reflected in Enquist’s criminal history. The court also noted that Enquist was “very high risk to reoffend” based on the Level of Service/Case Management Inventory administered during the Presentence Investigation (PSI), stating it thought Enquist’s score was “tied for the highest score that the Court has ever seen on a PSI,” which did not “bode well for a consideration of probation.” The court found that there was a likelihood that Enquist would reoffend if placed on probation, that he was not a suitable candidate for probation, and that placing him on probation would promote a disrespect for the law. The court properly applied the statutory guidelines in denying probation and did not abuse its discretion in that regard. Enquist also argues that the district court abused its discretion by failing to adequately consider mitigating factors that would have supported more lenient sentences. When sentences imposed within statutory limits are alleged on appeal to be excessive, the appellate court must determine whether the sentencing court abused its discretion in considering well-established factors and any applicable legal principles. State v. Greer, 312 Neb. 351, 979 N.W.2d 101 (2022). When imposing a sentence, a sentencing judge should consider the defendant’s (1) age, (2) mentality, (3) education and experience, (4) social and cultural background, (5) past criminal record or record of law-abiding conduct, and (6) motivation for the offense, as well as (7) the nature of the offense and (8) the amount of violence involved in the commission of the crime. Id. The sentencing court is not limited to any mathematically applied set of factors, but the appropriateness of the sentence is necessarily a subjective judgment that includes the sentencing -8- judge’s observations of the defendant’s demeanor and attitude and all the facts and circumstances surrounding the defendant’s life. Id. According to the PSI, Enquist, age 28 at the time of his interview with probation, attended high school (dropping out his junior year), and had three dependents (including his two children with the victim). He was unemployed at the time of the interview. He has a lengthy prior criminal history, including multiple convictions for domestic assault, as well as convictions for shoplifting and theft, possession of a controlled substance, assault by confined person, DUI, terroristic threats, assault, and other crimes. He has been placed on probation and post-release supervision before, which were revoked each time. Enquist scored a 35 on the Level of Service/Case Management Inventory, placing him in the overall very high risk range. His score on the Substance Abuse Questionnaire was in the maximum risk range for drugs, violence, and antisocial, and in the problem risk range for alcohol. The Standardized Risk Assessment Report Form for substance abuse offenders he completed reflected a high risk for recidivism. Enquist also completed a Domestic Violence Offender Matrix that placed him in a high risk level. The district court’s comments at the sentencing hearing reflected that it had considered all of the relevant factors with respect to Enquist and the particular circumstances of this case. Based upon this record, we can find no abuse of discretion by the court in the sentences imposed. V. CONCLUSION The district court did not err in admitting Gomez’ statements to officers as excited utterances. The evidence was sufficient to sustain Enquist’s convictions. The court did not abuse its discretion in sentencing Enquist. AFFIRMED. -9-	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488596/	VIRGINIA: In the Court of Appeals of Virginia on Tuesday the 22nd day of November, 2022. Osman Osman, Appellant, against Record No. 1416-21-4 Circuit Court No. FE-2019-0000407 Commonwealth of Virginia, Appellee. Upon a Petition for Rehearing Before Judges Huff, Raphael and Lorish On November 9, 2022 came appellee, by the Attorney General of Virginia, and filed a petition praying that the Court set aside the judgment rendered herein on October 25, 2022, and grant a rehearing thereof. On consideration whereof, the petition for rehearing is granted, the opinion rendered on October 25, 2022 is withdrawn, the mandate entered on that date is vacated, and this appeal will be reconsidered by the panel of judges that originally considered the matter. Pursuant to Rule 5A:35(a), the appellant may file an answering brief within 21 days of the date of entry of this order. Should the appellee elect to do so, she may file a reply brief within 14 days of the date on which the appellant’s brief is filed. An electronic version of the brief shall be filed with the Court and served on opposing counsel.1 A Copy, Teste: A. John Vollino, Clerk original order signed by a deputy clerk of the By: Court of Appeals of Virginia at the direction of the Court Deputy Clerk 1 The guidelines for filing electronic briefs can be found at www.courts.state.va.us/online/vaces/resources/guidelines.pdf. COURT OF APPEALS OF VIRGINIA PUBLISHED Present: Judges Huff, Raphael and Lorish Argued at Arlington, Virginia OSMAN OSMAN OPINION BY v. Record No. 1416-21-4 JUDGE GLEN A. HUFF OCTOBER 25, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF FAIRFAX COUNTY Penney S. Azcarate, Judge John W. Pickett (Pickett Law Group, PLLC, on brief), for appellant. Appellant submitting on brief. Katherine Quinlan Adelfio, Assistant Attorney General (Jason S. Miyares, Attorney General, on brief), for appellee. Osman Osman (“appellant”) was convicted by a jury in Fairfax County Circuit Court (the “trial court”) of four counts involving violations of a protective order, two counts of felony abduction, and one count of misdemeanor domestic assault against a family member. Appellant now appeals those convictions on the following grounds: First, appellant challenges the trial court’s admission of his prior bad acts. Second, appellant argues that the Code § 18.2-47 charge of abducting his child, J.O., should have proceeded as a misdemeanor rather than a felony. Third, appellant alleges that the period of delay between his arrest and eventual trial violated both his statutory and constitutional rights to a speedy trial. Fourth, and finally, appellant claims that the evidence presented at trial was insufficient to sustain a felony conviction of abducting his wife because the abduction was merely incidental to the assault of his wife. For the following reasons, this Court affirms all of appellant’s convictions except for the felony abduction of J.O. As to that single assignment of error, this Court agrees that the trial court erred by permitting the Commonwealth to prosecute appellant’s abduction of J.O. as a felony, rather than a misdemeanor, in direct contradiction to the provisions of Code § 18.2-47(D). Therefore, this Court reverses and vacates appellant’s felony abduction conviction for J.O. and affirms appellant’s remaining convictions. I. BACKGROUND In accordance with well-settled principles of appellate review, this Court considers the facts “in the light most favorable to the Commonwealth, the prevailing party at trial.” Poole v. Commonwealth, 73 Va. App. 357, 360 (2021) (quoting Gerald v. Commonwealth, 295 Va. 469, 472 (2018)). In doing so, this Court discards any evidence presented by appellant that conflicts with the Commonwealth’s evidence and regards as true all credible evidence favorable to the Commonwealth and all reasonable inferences drawn therefrom. Gerald, 295 Va. at 473; Parks v. Commonwealth, 221 Va. 492, 498 (1980). As of March 24, 2018, appellant was married to Ellina Letyvska and they had one child together, named J.O. Due to ongoing physical and emotional abuse by appellant, Ms. Letyvska left the marital home in February 2018 and sought a temporary preliminary protective order for herself and J.O. The Fairfax County Juvenile and Domestic Relations District Court (the “JDR court”) issued an ex parte preliminary protective order on February 22, 2018 (“February PPO”), under Code § 16.1-253.1, based on Ms. Letyvska’s representations that she believed appellant was a threat to her life and safety. The February PPO prohibited appellant from having any contact with the protected parties—Ms. Letyvska and J.O.—and from being within five hundred feet of them at all times. A full hearing on the February PPO was scheduled for March 8, 2018, at which appellant requested more time to retain and consult with counsel. In granting appellant’s request, the JDR court issued an extended preliminary protective order (“March PPO”) and scheduled a full -2- hearing on that order for March 27, 2018. The terms of the March PPO remained the same as those in the February PPO, including the provision prohibiting appellant from having any contact with either Ms. Letyvska or J.O. Appellant violated the March PPO on March 24, 2018, at approximately 12:00 p.m. in the parking lot next to Gold’s Gym in Chantilly, Virginia (the “gym”). On that date, a Saturday, Ms. Letyvska took J.O.—who was two and a half years old at that time—to the gym with her in the morning and parked her car in the lot next to the gym. At approximately 12:00 p.m., Ms. Letyvska left the gym and walked towards her car while holding J.O. in her left arm. As she opened the passenger side door to put down her bags, appellant appeared behind her and demanded that she come with him. When Ms. Letyvska did not immediately comply, appellant began dragging and pushing her towards the open back door of a Ford SUV (the “SUV”) parked perpendicularly approximately five to six feet behind Ms. Letyvska’s car. At trial, Ms. Letyvska testified that the SUV was not the vehicle appellant usually drove and that she had in fact never seen that SUV before. She tried to resist appellant by falling to the ground to make it harder for appellant to get her into the SUV. While Ms. Letyvska was sitting on the ground under the open door with her back against the SUV’s rear tire, appellant began hitting Ms. Letyvska on the back of her head and neck with a closed fist. Ms. Letyvska was still holding J.O., who was screaming and crying in her arms. Appellant then began trying to pull J.O. away from Ms. Letyvska. This commotion drew the attention of David Sobeck, who was also a member of the gym as well as an off-duty special agent with the Pentagon Force Protection Agency. After leaving the gym and getting into his car in the parking lot, Mr. Sobeck saw Ms. Letyvska holding J.O. and sitting next to the left rear tire of the SUV with her back pressed against the car while -3- appellant stood over her, gesticulating wildly with his arms. Concerned by what he saw, Mr. Sobeck got out of his car and walked toward Ms. Letyvska and appellant. When he was approximately twenty to thirty feet away, Mr. Sobeck saw that Ms. Letyvska was “completely distraught,” and he heard her screaming to call 9-1-1 because she needed help. Mr. Sobeck also heard the child in Ms. Letyvska’s arms crying. Mr. Sobeck continued to approach, but when he was only approximately five to seven feet away, appellant pulled a firearm out from under his sweatshirt and pointed it at Mr. Sobeck, saying, “Get the fuck out of here or I’ll fucking shoot you.” At appellant’s trial, Ms. Letyvska testified to also seeing appellant pointing the gun at Mr. Sobeck, although she didn’t see from where appellant had retrieved it. Appellant claimed at trial that he only brandished a “BB gun” at Mr. Sobeck. Regardless, Mr. Sobeck retreated to his car and called 9-1-1. Appellant then resumed trying to force Ms. Letyvska into the SUV. Before appellant succeeded, another bystander drove by and indicated that the police were on their way. In response, appellant got into the driver’s seat of the SUV and drove away without Ms. Letyvska and J.O. Evidence later presented at trial, including appellant’s own testimony, established that appellant had rented the SUV from Avis Budget on March 23, 2018, with a return date of March 24, 2018, but that appellant instead abandoned the vehicle on that date and fled to New York after his encounter with Ms. Letyvska and J.O. in the gym parking lot.1 Shortly after appellant left the gym, the police arrived in the parking lot and interviewed both Ms. Letyvska and Mr. Sobeck. In response to the events of March 24, 2018, Detectives Susan Anderton and T.L. Hulse executed a search warrant of appellant’s home on March 29, 2018. Although appellant’s parents were in the home at that time, appellant was not present and did not return. 1 Avis Budget later reported the SUV as stolen. -4- Six months later, on September 20, 2018, police officer Leonardo Buenaventura received a dispatch regarding an abandoned vehicle. Upon arrival, he saw the vehicle was a Ford SUV with tags that had been reported stolen. He found a Green Card in the center console with appellant’s name, which was linked to an “outstanding warrant for a criminal case.” Officer Buenaventura immediately passed this information along to Detectives Anderton and Hulse who then executed a search warrant on the SUV. The evidence presented at appellant’s trial proved that this SUV was the same one into which appellant had tried to force Ms. Letyvska and J.O. on March 24, 2018. Detective Anderton testified at appellant’s trial that the back passenger seats of the SUV were folded down and two black zip ties were secured around the child safety seat restraint bar in the backseat area. She described the zip ties as being fashioned in a loop such that a person’s wrist could fit through it and the zip tie could then be pulled tighter. Detective Anderton further testified that the gym-size duffel bag found behind the driver’s seat contained diapers, men’s clothing, and assorted papers, including a photocopy of appellant’s Bulgarian passport and United States permanent resident card. Appellant admitted at trial that the items found in the SUV, including the duffel bag with clothing and diapers as well as the Green Card and other documents, belonged to him. Through the ongoing police investigation, Sergeant Josh Moser, a detective from the fugitive task force, discovered evidence that appellant was staying in New York City. He and Detective Hulse traveled to New York where, with the assistance of United States Marshals, they arrested appellant on November 27, 2018. Appellant was extradited to Virginia in December 2018 and held without bond on charges of abduction, assault, and violating a protective order. The JDR court scheduled a preliminary hearing on appellant’s charges for January 14, 2019, which was continued until February 21, 2019, on the joint request of both parties. -5- Appellant then made two additional requests for adjournment on February 21, 2019, and March 28, 2019. The JDR court finally held the preliminary hearing on May 3, 2019, at which it found probable cause to believe appellant had committed a felony and certified the case to the trial court. The parties first appeared before the trial court on May 23, 2019, and the case was continued to May 31, 2019, for selection of a trial date and for appointment of new counsel at appellant’s request. On May 31, 2019, the trial court set a trial date of September 23, 2019. Appellant requested a continuance on September 9, 2019, due to the unavailability of two defense witnesses. The trial was rescheduled for January 13, 2020, via a calendar control order (“CCO”), in which defense counsel initialed and checked the box for a waiver of speedy trial. On December 30, 2019, appellant again sought a continuance for additional time to review discovery materials provided by the Commonwealth. The trial was rescheduled for March 30, 2020, via a CCO issued on January 8, 2020, in which defense counsel again checked the waiver of speedy trial box. The Supreme Court of Virginia issued its first emergency order relating to the COVID-19 pandemic on March 16, 2020, in which it restricted nonemergency proceedings “including jury trials, subject to a defendant’s right to a speedy trial.” Order Declaring a Judicial Emergency in Response to COVID-19 Emergency, 1-2 (Va. Mar. 16, 2020).2 The Court subsequently issued a series of additional orders extending the judicial emergency and tolling statutory speedy trial 2 Additional references in this opinion to the Supreme Court’s first order and subsequent related orders are to “emergency order” or “EDO of [date].” See EDO of Apr. 22, 2020, at 1 (referring to the Supreme Court’s first three orders “collectively . . . as the ‘Emergency Declaration Orders’”). -6- deadlines.3 See EDOs of Mar. 27, 2020, to May 27, 2022.4 In September 2020, the Court explicitly clarified that the tolling provisions remained in effect despite approval of any circuit court’s “plan to restart jury trials” and would continue to remain in effect “unless amended by future order.” EDO of Sept. 11, 2020, at 1-2. The Court issued no such amendment prior to appellant’s trial in July 2021. In fact, the Court’s fortieth emergency order extending the judicial emergency and tolling statutory speedy trial deadlines was issued on May 27, 2022. See EDO of May 27, 2022 (“While the Speedy Trial Act, Va. Code § 19.2-243, has its own tolling provisions, speedy trial act deadlines continue to be tolled by this order during the ongoing Period of Judicial Emergency, currently through June 22, 2022.”). In response to the Court’s March 16, 2020 emergency order, the trial court issued a memorandum on the same day in which it suspended all trials for thirty days and set all cases within that period, including appellant’s case, for status on the criminal term day docket on May 21, 2020. Appellant filed a motion on March 25, 2020, objecting to this continuance and asserting his right to a speedy trial. The trial court heard arguments as to this matter on March 30, 2020, and appellant agreed with the trial court’s determination that the five months allotted for prosecution under Virginia’s Speedy Trial Act (codified in Code § 19.2-243) did not expire until April 15, 2020. Accordingly, the trial court scheduled the case for a bench trial on April 6, 2020, and granted appellant’s request for substitution of counsel. On April 1, 2020, trial was again rescheduled, via a CCO, to June 1, 2020, at the request of appellant who waived speedy trial for that period. The Commonwealth requested an 3 The Court later clarified that its orders tolling speedy trial deadlines referred only to a defendant’s statutory, rather than constitutional, right to a speedy trial. See EDO of May 1, 2020, at 2. 4 All of the Court’s judicial emergency orders for the COVID-19 pandemic can be found on the Court’s website at the following link: https://www.vacourts.gov/news/items/covid/scv_emergency_orders.pdf. -7- adjournment on May 27, 2020, and the case was continued to August 3, 2020, via a CCO. At the pre-trial status hearing on July 30, 2020, appellant asked for new counsel and invoked his right to a jury trial.5 The trial court advised appellant that his request for a jury trial meant that his case would likely not be heard until February 2021 due to the backlog of trials caused by the COVID-19 pandemic. Appellant acknowledged that he understood, and the trial court adjourned the case to August 3, 2020, for selection of a trial date. In doing so, the court explicitly noted that “speedy trial is tolled during this time until [the case is] set for a new date in February.” Appellant did not object. The parties appeared before the trial court on August 3, 2020, and selected a trial date of February 1, 2021. Appellant explicitly waived speedy trial for the entirety of that adjournment. On October 1, 2020, the trial court informed the parties that the February trial date needed to be changed because pandemic-related court congestion had “wiped out February 1st already with other long cases.” Due to the parties’ scheduling conflicts, the trial court set trial to begin on May 5, 2021, and appellant did not object to that date. On March 26, 2021, the trial court held a hearing on a number of pre-trial motions, including the Commonwealth’s motion in limine to admit prior bad acts of appellant at trial. Specifically, the Commonwealth sought to introduce evidence of appellant’s past physical and verbal abuse of Ms. Letyvska. After hearing arguments from both parties, the trial court determined that the evidence was admissible to prove motive and intent, as well as the prior relationship between appellant and Ms. Letyvska, and that the probative value of such evidence “outweighs any prejudicial effect.” The trial court also indicated that it would issue a limiting instruction advising the jury to only consider such evidence for the purposes of “motive of intent and relationship.” 5 The trial court denied appellant’s request for new counsel. -8- Based on a joint continuance request issued via a CCO on April 19, 2021, appellant’s trial was rescheduled to June 28, 2021. Only a few days later, on April 23, 2021, the parties appeared before the trial court at the Commonwealth’s request for another adjournment. The Commonwealth informed the trial court that Ms. Letyvska and a “key detective” were unavailable to testify on June 28, 2021. In response to the trial court’s questioning, the Commonwealth explained that they had previously “reach[ed] out” to the witnesses to ascertain availability but had not received confirmation in advance of agreeing to the June 28, 2021 trial date. Over appellant’s objection, the trial court adjourned the case to July 28, 2021. On July 27, 2021, appellant filed a motion to dismiss based on speedy trial grounds, and the trial court heard arguments from the parties on July 28, 2021. The trial court ultimately held that neither appellant’s statutory nor constitutional right to a speedy trial had been violated. With regard to the statutory right, the trial court found that most of the continuance motions “were either on the defendant’s request or a joint request” and that the emergency orders relating to the COVID-19 pandemic tolled the speedy trial deadlines under Code § 19.2-243 from March 16, 2020, to the current date. The trial court then held that appellant’s constitutional right to a speedy trial was not violated because: [l]ooking at the factors, the length of delay is not unreasonable due to the reasons for the delay, mainly that the defendant needed to get counsel and be prepared for trial today. And also because of COVID and the pandemic reasons for the delay. So based on those reasons the Court does not find this case is prejudiced. After the trial court denied appellant’s motion to dismiss, the case proceeded to trial by jury. In accordance with the trial court’s March 26, 2021 decision regarding the admissibility of appellant’s prior bad acts, the Commonwealth offered testimony at trial from Ms. Letyvska about the abuse she experienced from appellant during their marriage. Specifically, Ms. Letyvska testified that appellant came to her place of employment several times and “made a -9- huge scene” by screaming and cursing at her in public. She also testified that the first time appellant physically assaulted her was in 2016 when he came home in the middle of the night and Ms. Letyvska could not get J.O. to stop crying. In particular, appellant pulled Ms. Letyvska’s hair and punched her in the face. Similar incidents occurred several times throughout the first two years of J.O.’s life whenever Ms. Letyvska could not stop J.O. from crying during the night. Ms. Letyvska further described one incident in February 2017 where appellant blamed her for J.O. being sick and started punching her in the face and choking her while she was holding J.O. in one arm. After the Commonwealth finished presenting its case, appellant moved to strike all charges based on a claim that the Commonwealth failed to prove appellant’s identity. Appellant also challenged the sufficiency of the evidence regarding his abduction of Ms. Letyvska by specifically alleging there was no “proof that he intended to deprive her of her liberty” and her testimony was not credible. The trial court disagreed, finding that Ms. Letyvska’s testimony was not “inherently unreliable or incredible as to not allow the credibility of the witness to be decided by the Jury. . . . As to Count 1, abduction, there is evidence of asportation or the inability of her to leave, therefore that goes to the jury.” Next, appellant argued that the abduction of J.O. was improperly charged as a felony rather than a misdemeanor under Code § 18.2-47(D) because appellant was J.O.’s parent and subject to contempt for violating the March PPO. The trial court again disagreed, finding that “based on Diehl v. Commonwealth[, 9 Va. App. 191 (1989)],” the felony abduction charge regarding J.O. “can go forward.” Appellant then presented his own evidence at trial, after which - 10 - he renewed the motion to strike based on the same grounds as previously stated.6 For the same reasons, the trial court denied the motion. Consistent with its pre-trial ruling, the trial court issued a limiting instruction to the jury on August 3, 2021, advising them that they could only consider the evidence of appellant’s prior bad acts “as evidence of the defendant’s motive and/or conduct and feelings toward the victims and relations between them for which he is on trial and for no other purpose.” Later that same day, the jury returned a verdict of guilty for all charges, convicting appellant of two counts under Code § 18.2-47 for felony abduction of Ms. Letyvska and J.O., one count of misdemeanor domestic assault under Code § 18.2-57.2, and four counts under Code § 16.1-253.2 for violating a protective order by stalking, by committing assault and battery, by violating the order’s no-contact provision, and by violating the order while armed with a deadly weapon. On November 19, 2021, the trial court sentenced appellant to an aggregate sentence of twenty years’ incarceration.7 This appeal followed. II. ANALYSIS In challenging his convictions, appellant alleges four reversible errors by the trial court. After considering the merits of appellant’s assignments of error, this Court affirms the trial court’s judgments in part but reverses and vacates appellant’s felony conviction for abducting 6 On August 3, 2021, defense counsel renewed his “previous motion to strike for all the grounds and reasons stated before, with the additional arguments regarding the violation of the protective order while in possession of a deadly weapon.” Appellant does not raise that latter argument in this appeal. 7 Appellant was sentenced to the following periods of incarceration: five years for abducting Ms. Letyvska (Count I), ten years for abducting J.O. (Count V), two years for violating the March PPO while armed with a deadly weapon (Count III), one year for violating the March PPO by stalking (Count VII), one year for violating the March PPO by committing assault and battery (Count VIII), six months for assault and battery (Count IV), and six months for violating the March PPO’s no-contact provision (Count IX). - 11 - J.O. This Court declines to consider the merits of appellant’s final assignment of error because it was not properly preserved for appellate review. A. Appellant’s First Assignment of Error: The Trial Court Erred in Permitting the Commonwealth to Admit Evidence of Appellant’s Prior Acts of Abuse at Trial Appellant argues that the trial court should have prohibited the Commonwealth from admitting evidence of appellant’s prior physical and verbal abuse of Ms. Letyvska because the prejudicial effect of such evidence outweighed any probative value. “Given the ‘broad discretion’ of a trial judge over evidentiary matters,” this Court reviews a trial court’s decision regarding the admission or exclusion of evidence under a “deferential abuse-of-discretion standard.” Thomas v. Commonwealth, 44 Va. App. 741, 753 (quoting Seaton v. Commonwealth, 42 Va. App. 739, 752 (2004)), adopted upon reh’g en banc, 45 Va. App. 811 (2005). This Court cannot substitute its own judgment for that of the trial court and must instead determine “whether the record fairly supports the trial court’s action.” Clark v. Commonwealth, 73 Va. App. 695, 705 (2021) (quoting Grattan v. Commonwealth, 278 Va. 602, 620 (2009)). This deference extends to the trial court’s “responsibility for balancing the competing considerations of probative value and prejudice” when considering the admission of evidence. Ortiz v. Commonwealth, 276 Va. 705, 715 (2008) (quoting Spencer v. Commonwealth, 240 Va. 78, 90 (1990)); see also Kenner v. Commonwealth, 299 Va. 414, 424 (2021). As a general rule, evidence of a defendant’s prior bad acts or other crimes is inadmissible “to prove the character trait of a person in order to show that the person acted in conformity therewith.” Va. R. Evid. 2:404(b). However, such evidence may be admissible to prove motive and intent, but only if the trial court determines that “the legitimate probative value of such proof outweighs its incidental prejudice.” Id.; see Lambert v. Commonwealth, 70 Va. App. 740, 750 (2019). - 12 - Evidence of prior bad acts, including domestic violence, is also admissible “when it ‘shows the conduct or attitude of the accused toward his victim[,] establishes the relationship between the parties,’” or “‘is connected with or leads up to the offense for which the accused is on trial,”’ so long as the probative value outweighs any prejudicial effect. Conley v. Commonwealth, 74 Va. App. 658, 670-71 (2022) (first quoting Kenner, 299 Va. at 424; and then quoting Woodfin v. Commonwealth, 236 Va. 89, 95 (1988)). This Court has also found that even abuse from a year prior to the charged offense “was probative to show the defendant’s motive and intent in committing the alleged acts” and to “prove the relationship between the defendant and his victims.” Callahan v. Commonwealth, 8 Va. App. 135, 141 (1989). Under these prevailing standards, the trial court did not abuse its discretion in admitting evidence of appellant’s prior bad acts. As the trial court explained, those “prior assaults against the victim do have probative value to prove motive and intent and also a prior relationship in this particular case and that outweighs any prejudicial effect.” The trial court also issued a limiting instruction to the jury advising them that they could consider such testimony only for the permitted purposes of motive, intent, and prior relationship. See Brooks v. Commonwealth, 73 Va. App. 133, 148 (2021) (“The danger of unfair prejudice can also be mitigated by an instruction to the jury that limits their consideration of other crimes evidence to its proper purposes and application to each offense charged.”). Accordingly, this Court affirms the trial court’s judgment that evidence of appellant’s prior bad acts and other crimes was admissible. B. Appellant’s Second Assignment of Error: The Trial Court Erred in Denying Appellant’s Motion to Strike the Felony Abduction Charge for J.O. Next, appellant argues that the trial court should have granted his motion to strike the felony abduction charge as to J.O., under Code § 18.2-47. Specifically, appellant argues that he - 13 - could only have been indicted pursuant to Code § 18.2-47(D), which makes a parent’s abduction of their child punishable as a misdemeanor rather than a felony under certain circumstances. An issue of statutory interpretation and application is a question of law reviewed de novo on appeal. See Eley v. Commonwealth, 70 Va. App. 158, 162 (2019); Blake v. Commonwealth, 288 Va. 375, 381 (2014) (“We . . . review de novo the scope and application of the statute under which the defendant was convicted.”). Under Code § 18.2-47(A), a person is guilty of abduction when, “by force, intimidation or deception, and without legal justification or excuse,” he “seizes, takes, transports, detains or secretes another person with the intent to deprive” them of their personal liberty. Subsection (C) provides the default rule that an abduction “for which no punishment is otherwise prescribed shall be punished as a Class 5 felony.” In contrast, Code § 18.2-47(D) provides that “[i]f an offense under subsection A is committed by the parent of the person abducted and punishable as contempt of court in any proceeding then pending, the offense shall be a Class 1 misdemeanor in addition to being punishable as contempt of court.” (Emphasis added). The key word here is “punishable,” meaning conduct that by law could be punished as contempt of court, regardless of whether the Commonwealth actually chose to bring such charges in addition to a prosecution for abduction. Appellant argues that, given the March PPO prohibiting contact with J.O., his prosecution for abduction under Code § 18.2-47 could only proceed as a misdemeanor, rather than a felony, based on the provisions of subsection (D). The March PPO, which was still in effect and pending a full hearing when appellant abducted J.O. on March 24, 2018, was issued under Code § 16.1-253.1. Subsection (C) of that statute states: “[e]xcept as otherwise provided in § 16.1-253.2,” a violation of a protective order issued under this statute “shall constitute contempt of court.” (Emphasis added). Code § 16.1-253.2 addresses specific types of violations of Code § 16.1-253.1 protective orders, - 14 - including violations of protective order provisions prohibiting “further acts of family abuse,” “criminal offenses,” or any contact “with the allegedly abused person” named as the protected party. Code § 16.1-253.2(A). This section explicitly states that “[i]n addition to any other penalty provided by law,” a person who commits such violations “is guilty of a Class 1 misdemeanor.” Id. (emphasis added). The opening phrase “in addition to” clearly indicates that a person who violates a protective order in a way specified by Code § 16.1-253.2(A) is both guilty of a Class 1 misdemeanor and subject to “any other penalty provided by law.” Id. Reading these statutes together, the language “other penalty provided by law” in Code § 16.1-253.2(A) would include “contempt of court” under Code § 16.1-253.1(C). See George v. Commonwealth, 51 Va. App. 137, 144-45 (2008) (interpreting the language “in addition to any other penalties provided by law” in a statute to mean that the “criminal penalty provided therein was not exclusive” and that the General Assembly did not intend for prosecution under that statute to “be the Commonwealth’s exclusive option for punishing conduct such as appellant’s”). In contrast to these interlocking statutes, subsections (C) and (D) of Code § 18.2-47 are mutually exclusive. A person who commits an abduction, as defined in subsection (A) of Code § 18.2-47, can only be charged with and convicted of a Class 5 felony—the default penalty provided by subsection (C) of Code § 18.2-47—if no other subsection providing a different penalty applies. Thus, where a parent’s abduction of their child qualifies as a Class 1 misdemeanor under subsection (D) of Code § 18.2-47, the same conduct cannot also constitute a Class 5 felony because the misdemeanor penalty replaces the statute’s default felony penalty. Accordingly, because appellant’s abduction of J.O. meets the criteria of Code § 18.2-47(D)—appellant is a parent to J.O. and the abduction was punishable as contempt for - 15 - violating the March PPO—the trial court erred in denying appellant’s motion to strike the felony abduction charge under Code § 18.2-47.8 C. Appellant’s Third Assignment of Error: The Trial Court Erred in Denying Appellant’s Motion to Dismiss for Violating His Rights to a Speedy Trial Appellant also argues that the trial court should have granted his motion to dismiss all the charges against him because the Commonwealth violated both his statutory and constitutional rights to a speedy trial. This Court rejects that claim and affirms the trial court’s judgment that neither appellant’s statutory nor constitutional speedy trial rights were violated. As explained further below, “the statutory right to a speedy trial and the constitutional right to a speedy trial are separate, though related, rights that utilize different frameworks and focus on different elements.” Brown v. Commonwealth, 75 Va. App. 388, 406 (2022). However, because both statutory and constitutional speedy trial challenges present “a mixed question of law and fact,” this Court gives deference to the trial court’s factual findings but reviews statutory interpretations and legal conclusions de novo. Young v. Commonwealth, 297 Va. 443, 450 (2019); see Ali v. Commonwealth, 75 Va. App. 16, 33 (2022) (“[Factual] findings may not be disturbed unless ‘plainly wrong’ or ‘without evidence to support them.’” (quoting Wilkins v. Commonwealth, 292 Va. 2, 7 (2016))). 8 In denying appellant’s motion to strike, the trial court based its decision on the Commonwealth’s reference to Diehl, 9 Va. App. at 191. In that case, this Court found Code § 18.2-47(D) inapplicable because, prior to Diehl’s act of abduction, there was no proceeding pending against him for which he could have been punished for contempt. For example, Diehl was not subject to any protective order or other court mandate at the time he abducted his child. Those facts are inapposite to the case at hand where appellant was in fact subject to the March PPO—a pending proceeding scheduled for full hearing in the JDR court on March 27, 2018, any violation of which could have been punished as contempt of court under Code § 16.1-253.1(C)— at the time he abducted J.O. It is immaterial that the Commonwealth did not charge appellant with contempt of court in addition to abduction. - 16 - Appellant’s Statutory Right to a Speedy Trial Not Violated Code § 19.2-243 provides specific time limits “within which an accused must be tried, absent tolling or other statutory exceptions.” Brown, 75 Va. App. at 406. As applicable here, the statute requires trial to commence for an incarcerated individual within five months from the preliminary hearing at which the district court found probable cause to believe he committed a felony.9 Code § 19.2-243. That five-month requirement equates to “152 and a fraction days.” Balance v. Commonwealth, 21 Va. App. 1, 6 (1995). However, the statute also enumerates several exceptions to this time limit, including a “failure to try the accused . . . caused . . . [b]y a natural disaster, civil disorder, or act of God.” Code § 19.2-243. This Court has recently concluded that the COVID-19 pandemic qualifies as a “natural disaster” and thus justifies the tolling of statutory speedy trial deadlines provided in the emergency orders executed between March 16, 2020, and May 27, 2022. See Ali, 75 Va. App. at 31-33; Brown, 75 Va. App. at 402-03. Accordingly, the statutory speedy trial clock did not run between the initial emergency order issued on March 16, 2020, and the commencement of appellant’s trial on July 28, 2021. The remaining period of time for this Court to consider then is that between appellant’s preliminary hearing on May 3, 2019, and the start of the pandemic-related tolling on March 16, 2020.10 For the reasons stated below, only 121 days during that time are chargeable to the 9 The period of time between the arrest of the accused and the preliminary hearing has no bearing on the accused’s statutory speedy trial rights under Code § 19.2-243, although it is considered as part of a constitutional speedy trial claim. 10 As mentioned previously, “appellant’s statutory speedy trial deadline was tolled due to the COVID-19 emergency, [but] his constitutional speedy trial rights remained in effect and were not suspended.” Brown, 75 Va. App. at 404. This Court reviews separately the effect of those orders in the context of appellant’s constitutional speedy trial claim. - 17 - Commonwealth for statutory speedy trial purposes; the remainder is tolled under the provisions of Code § 19.2-243. Generally, the time between the preliminary hearing and initial trial date “counts against the Commonwealth for speedy trial purposes.” Palmer v. Commonwealth, No. 0885-21-1, slip op. at 11 (Va. Ct. App. Aug. 9, 2022) (citing Turner v. Commonwealth, 68 Va. App. 72, 79 (2017)).11 However, a “continuance granted on the motion of the accused or his counsel” tolls the statutory speedy trial clock. Code § 19.2-243. Here, the Commonwealth acknowledges that the twenty days from appellant’s preliminary hearing in the JDR court on May 3, 2019, to the first appearance in the trial court on May 23, 2019, count toward the speedy trial deadline. Conversely, the adjournment from May 23 to May 31, 2019, made for purposes of setting a trial date and appointing new counsel at appellant’s request, does not count towards the speedy trial deadline. See Code 19.2-243; see also Palmer, slip op. at 12 (“[T]his Court has charged to a defendant the delay between appointing new counsel for the defendant and the new trial date.” (citing Balance, 21 Va. App. at 6)). On May 31, 2019, the trial court set a trial date of September 23, 2019. Only 101 days of this period are chargeable to the Commonwealth because appellant requested a continuance on September 9, 2019, which the trial court granted, thus stopping the speedy trial clock. See Palmer, slip op. at 12 (“Code § 19.2-243’s restrictions do not apply to speedy trial deadline calculations when a defendant or his counsel requests the continuance, concurs to the Commonwealth’s continuance motion, or fails to timely object to that motion.”). 11 Unpublished opinions, although not binding, may be cited as “informative.” Rule 5A:1(f). - 18 - Based on appellant’s September 9, 2019 continuance request, the trial court set a new trial date of January 13, 2020, to which appellant did not object.12 Appellant requested another continuance in December 2019, which the trial court granted on January 8, 2020, and the case was adjourned for trial on March 30, 2020. That period of time is also tolled under Code § 19.2-243 because appellant made the adjournment request.13 As already discussed above, the Supreme Court issued its first emergency order on March 16, 2020, and the statutory speedy trial deadlines were tolled from that date through the start of appellant’s trial in July 2021. Because only 121 days of Code § 19.2-243’s allotted 152-and-a-fraction days ran, the trial court did not err in concluding that appellant’s statutory right to a speedy trial was not violated. Appellant’s Constitutional Right to a Speedy Trial Not Violated In contrast to the statutory right to a speedy trial, the constitutional right to a speedy trial under the Sixth Amendment of the United States Constitution “is governed by a balancing test that is not tied inextricably to calendar dates.” Brown, 75 Va. App. at 406-07 (citing Barker v. Wingo, 407 U.S. 514, 521 (1972)). The four factors of that test are: (1) the length of delay, (2) the reasons for the delay, (3) the defendant’s assertion of his right, and (4) prejudice to the defendant. Barker, 407 U.S. at 530. An appellant must establish that those factors, when considered together, “weigh in his favor.” Ali, 75 Va. App. at 35 (quoting United States v. Thomas, 55 F.3d 144, 148 (4th Cir. 1995)). 12 Indeed, the CCO from September 9, 2019, clearly shows that appellant requested a continuance due to witness unavailability and waived speedy trial for that adjournment. 13 The CCO from January 8, 2020, reveals that appellant requested a continuance in order to prepare for trial and that speedy trial was waived for that adjournment. - 19 - 1. Speedy Trial Factors Under Barker a. Length of Delay This Court first considers the length of delay, measured from the time of arrest to commencement of trial. See Fowlkes v. Commonwealth, 218 Va. 763, 766 (1978). In the absence of delay that is presumptively prejudicial, “there is no necessity for inquiry into the other factors.” Kelley v. Commonwealth, 17 Va. App. 540, 544 (1994) (quoting Barker, 407 U.S. at 530). Whether a delay qualifies as presumptively prejudicial “necessarily depend[s] upon the peculiar circumstances of the case.” Barker, 407 U.S. at 530-31. However, this Court has previously found that delays of one year or more are presumptively prejudicial. See Ali, 75 Va. App. at 35-36; Miller v. Commonwealth, 29 Va. App. 625, 633 (1999); see also Doggett v. United States, 505 U.S. 647 (1992) (finding that a delay approaching one year is presumptively prejudicial). Here, where the time between appellant’s arrest and trial exceeds two years, the length of delay is presumptively prejudicial and triggers consideration of the other Barker factors. b. Reasons for Delay Under the next factor—the reasons for delay—a court must make two separate determinations: first, what portions of the delays are attributable to the Commonwealth, and second, what portion of the delays attributable to the Commonwealth are justifiable. See Ali, 75 Va. App. at 36; Fowlkes, 218 Va. at 767. Appellant claims that his case was delayed by 383 days from his arrest to trial and that nearly 300 of those days are attributable to the Commonwealth. A delay is not attributable to the Commonwealth if “it was requested by the defendant,” if the defendant “concurred” in the delay, or if “one of the purposes of the delay was to enable the defendant to prepare” for trial. Minitee v. Commonwealth, No. 1054-19-2, slip op. at 8 - 20 - (Va. Ct. App. July 12, 2022) (first quoting Price v. Commonwealth, 24 Va. App. 785, 790-91 (1997); then quoting Arnold v. Commonwealth, 18 Va. App. 218, 223 (1994); and then quoting Heath v. Commonwealth, 32 Va. App. 176, 182 (2000)); see also Vermont v. Brillon, 556 U.S. 81, 90-91 (2009) (holding that delays caused by defense counsel are charged against the defendant). “Although any delay not attributable to the defendant is the responsibility of the Commonwealth for speedy trial purposes, ‘different weights should be assigned to different reasons’ for delay.” Ali, 75 Va. App. at 42 (quoting Barker, 407 U.S. at 531). The three categories of fault for delay attributable to the Commonwealth are: (1) “deliberately improper” delay, (2) “merely negligent” delay, and (3) “valid and unavoidable” delay. Id.; see also Minitee, slip op. at 7 (“Whether a delay is justified depends in part on whether the Commonwealth acted in bad faith or negligently.”). Deliberate delay14 “should be weighed heavily” against the Commonwealth, whereas negligence15 should receive less weight. Ali, 75 Va. App. at 42 (quoting Barker, 407 U.S. at 531). “[A] reason deemed ‘valid’ fully ‘justif[ies] appropriate delay’” and thus does not weigh in appellant’s favor. Id. (quoting Barker, 407 U.S. at 531). Many routine periods of delay in a criminal case, such as the time between a defendant’s arrest and the preliminary hearing, can be attributed to the Commonwealth “in the ordinary course of the administration of justice.” See id. at 37. When “no evidence indicates that the prosecution caused the delay either intentionally or negligently,” such delay “in the ordinary course” is deemed “valid and unavoidable,” thus making it fully justified. Id. at 45. Similarly, 14 Includes delay “caused with an intent to ‘hamper the defense’ or harass the defendant.” Ali, 75 Va. App. at 42 (quoting Barker, 407 U.S. at 531). 15 Includes “negligence in scheduling, understaffing of a prosecutor’s office, or ‘overcrowd[ing of the] courts.’” Ali, 75 Va. App. at 42 (quoting Barker, 407 U.S. at 531). - 21 - this Court has recently held that pandemic-related delays16 attributed to the Commonwealth are “valid, unavoidable, and outside the Commonwealth’s control.” Id. Accordingly, such delays are deemed fully justified. See id. at 44 (finding that the COVID-19 pandemic “made it unsafe for all witnesses and other trial participants to come to court for a period of time, rendering them justifiably absent”). Apportionment of Delay This Court’s review of the record in the light most favorable to the Commonwealth reveals that a large portion of delay between appellant’s arrest on November 28, 2018, and his trial on July 27, 2021, is attributable to appellant based on his stand-alone and joint requests for continuances. The forty-eight days between appellant’s arrest on November 28, 2018, and the first scheduled date for a preliminary hearing on January 14, 2019, are attributable to the Commonwealth. The following 109 days—between January 14, 2019, and the preliminary hearing finally occurring on May 3, 2019—are not attributable to the Commonwealth because the parties made a joint request for a continuance on January 14, 2019, and appellant then made two additional requests for a continuance on February 21, 2019, and March 28, 2019. Between appellant’s preliminary hearing on May 3, 2019, and his first scheduled trial date on September 23, 2019, only 121 days are attributable to the Commonwealth for constitutional speedy trial purposes.17 None of the 203 days between appellant’s request for a continuance on September 9, 2020, and the trial date set for March 30, 2020, are attributable to 16 These include the deliberate efforts of Virginia’s judicial system “to balance public health with the administration of justice.” Ali, 75 Va. App. at 45. 17 The eight days of delay from May 23, 2019, to May 31, 2019, resulted from appellant’s request for new counsel; the fourteen days between September 9, 2019, and September 23, 2019, are not attributed to the Commonwealth because appellant requested a continuance on September 9, 2019. - 22 - the Commonwealth.18 Because appellant requested a continuance on April 1, 2020, only two days of the total sixty-three days between March 30, 2020, and June 1, 2020, are attributable to the Commonwealth.19 On May 27, 2020, the case was again continued, at the Commonwealth’s request, to August 3, 2020. The sixty-three days from June 1, 2020, to the new trial date in August are attributable to the Commonwealth because appellant’s April 1, 2020 continuance only waived speedy trial until June 1, 2020. The subsequent adjournment from August 3, 2020, to February 1, 2021, is not attributable to the Commonwealth because appellant requested new counsel, asserted his right to a jury trial, and explicitly waived speedy trial for those 181 days. On October 1, 2020, the trial court informed the parties that it could no longer hold a jury trial on February 1, 2021, due to court congestion caused by the COVID-19 pandemic. As a result, the trial was rescheduled to May 5, 2021. However, on April 19, 2021, both parties requested a joint continuance until June 28, 2021. Thus, only the seventy-seven days between February 1, 2021 (the date appellant’s explicit speedy trial waiver expired) and April 19, 2021 (the date the parties jointly agreed to adjournment) are attributable to the Commonwealth. The remaining seventy days—from April 19, 2021, to June 28, 2021—are deemed waived by the April 19, 2021 joint continuance. Accordingly, the final period of delay attributable to the Commonwealth is the thirty days 18 The case was adjourned on September 9, 2019, at appellant’s request, to January 13, 2020. Appellant then made another adjournment request on December 30, 2019, and the case was continued until March 30, 2020. See Minitee, slip op. at 8 (finding that if “one of the purposes of the delay was to enable the defendant to prepare,” such delay is not attributable to the Commonwealth). 19 In the April 1, 2020 CCO granting a joint continuance to June 1, 2020, appellant’s counsel checked the box indicating a waiver of speedy trial time for that adjournment. - 23 - between June 28, 2021, and the start of appellant’s trial on July 28, 2021, which resulted from the Commonwealth’s April 23, 2021 motion to continue. Justification for Delay Attributed to Commonwealth In accordance with the determinations made above, 171 days of the total 341 days attributed to the Commonwealth fall squarely within the ordinary administration of justice. Those periods of delay, listed below, are deemed valid and fully justified because no evidence shows that the Commonwealth acted improperly: • Forty-eight days from November 28, 2018, to January 14, 2019;20 • 121 days from May 3, 2019, to September 9, 2019;21 • Two days from March 30, 2020, to April 1, 2020. The next two periods of delay attributed to the Commonwealth amount to 140 days and are justified as pandemic-related delays based on this Court’s viewing of the record in the light most favorable to the Commonwealth and a lack of evidence that the Commonwealth behaved inappropriately. Specifically, this Court determines that (1) the sixty-three days of delay between June 1, 2020, and August 3, 2020, resulted from then-present health and safety concerns relating to COVID-19, and (2) the seventy-seven days of delay between February 1, 2021, and April 19, 2021, resulted from court congestion caused by the COVID-19 pandemic.22 20 The delay between appellant’s arrest and the first scheduled date for his preliminary hearing. 21 The delay between appellant’s preliminary hearing and his scheduled trial date. Appellant’s motion for a continuance on September 9, 2019, cut off the Commonwealth’s responsibility early. 22 Although the trial court sua sponte vacated the February 1, 2021 trial date in October 2020 and rescheduled the trial for May 5, 2021, appellant’s August 3, 2020 waiver of speedy trial time extended until February 1, 2021. - 24 - As a result of the foregoing calculations, only the final thirty days leading up to appellant’s trial—from June 28, 2021, to July 28, 2021—are not justified because the Commonwealth acted negligently in selecting the June 28, 2021 trial date before confirming the availability of all necessary witnesses for that date.23 Therefore, only those thirty days of delays count in favor of appellant. c. Assertion of Right The third factor in the constitutional speedy trial calculus requires this Court to consider whether, and how, appellant asserted his right to a speedy trial. Despite having been incarcerated for over one year, appellant did not assert his right to a speedy trial until March 25, 2020, after the trial court issued a memorandum on March 16, 2020, suspending trials for thirty days and setting this case for status update on May 21, 2020.24 The trial court heard argument from both parties on March 30, 2020, regarding the speedy trial issues, after which it set the case for a bench trial to begin on April 6, 2020. Only four days after that decision—and four days before trial—appellant agreed to a joint continuance until June 1, 2020, even though that date went beyond the statutory speedy trial cut-off date of 23 Although the Commonwealth requested a continuance on April 23, 2021, based on witness unavailability, the parties’ prior joint continuance on April 19, 2021, tolled speedy trial until June 28, 2021, regardless of when the Commonwealth made its stand-alone request for adjournment. 24 These facts are extremely similar to those in Ali where appellant did not assert his right “until after the Supreme Court had already begun entering judicial emergency orders restricting the ability of circuit courts to conduct jury trials.” 75 Va. App. at 46. This Court ultimately concluded in Ali that appellant’s constitutional right to a speedy trial was not violated. - 25 - April 15, 2020.25 Appellant also agreed to further continuances from August 3, 2020,26 to February 1, 2021, and from April 19, 2021,27 to June 28, 2021. Although the trial court granted the Commonwealth’s April 23, 2021 continuance request over appellant’s objection, appellant did not assert his rights again until July 27, 2021—the day before trial commenced—when he filed a motion to dismiss for a violation of his constitutional right to a speedy trial. d. Prejudice As to the final factor—prejudice—the constitutional speedy trial right aims to protect three separate interests: “(1) preventing oppressive pretrial incarceration; (2) minimizing the accused’s anxiety; and (3) limiting the possibility that the defense will be impaired.” Kelley, 17 Va. App. at 546 (citing Barker, 407 U.S. at 532). “The most important of these interests is the third one.” Ali, 75 Va. App. at 47. When “the Commonwealth bears no fault in the delay and proceeds ‘with reasonable diligence,’” appellant’s speedy trial claim will fail “as a matter of course however great the delay” unless appellant can show “specific prejudice” to his defense (the third interest) or “some degree of prejudice for one of the first two interests.” Ali, 75 Va. App. at 47-48 (quoting Doggett, 505 U.S. at 656). On the other hand, “[a] delay caused by governmental negligence ‘occupies the middle ground.’” Id. at 47 (quoting Doggett, 505 U.S. at 656-57). However, “[t]o prove even generalized prejudice based on one of the first two interests . . . a defendant must 25 At the March 30, 2020 hearing, defendant agreed with the trial court’s determination that April 15, 2020, was the “expiration of the five months” permitted for statutory trial purposes under Code § 19.2-243. 26 When appellant asserted his right to a jury trial and acknowledged before the trial court that such request would delay his trial until February 2021. 27 When appellant agreed to another joint continuance. - 26 - establish a particularly prolonged or restrictive period of incarceration or a level of anxiety exceeding that faced by others awaiting trial.” Id. at 48. With regard to the first two interests, appellant only mentions in passing that the 383 “days of incarceration he served . . . are not attributable to any delay or continuance on his part.”28 Appellant’s allegation of prejudice, however, rests more heavily on the third interest: that he was “greatly inhibited in presenting a defense” because his parents “were unable to come back to the United States from Bulgaria due to age and travel restrictions.” “To prove specific prejudice under the third interest . . . a defendant must show ‘in what specific manner’ factors such as missing witnesses . . . ‘would have [impaired or] aided the defense.’” Ali, 75 Va. App. at 49 (quoting United States v. Medina, 918 F.3d 774, 782 (10th Cir. 2019)); see Kelley, 17 Va. App. at 547 (requiring “at least . . . a factual basis for believing” that the loss of a witness’s testimony might have “adversely affected the defense”); Beachem v. Commonwealth, 10 Va. App. 124, 134 (1990) (holding that appellant’s claim that his defense was impaired due to missing alibi witnesses was “sheer speculation” in part because he provided “no details” about when they moved or how he attempted to locate them). Here, appellant merely claims that his parents “were set to testify in his defense to refute Ms. Letyvska’s allegations” without offering any proof as to the details of that testimony and how it would have impacted his defense. This bare assertion is not sufficient on its own to establish that appellant actually suffered any prejudice to his defense. 28 As explained previously, this Court determines that 341 days of appellant’s incarceration are attributable to the Commonwealth, only thirty days of which resulted from the Commonwealth’s negligence, whereas 624 days resulted from speedy trial waivers caused by appellant’s actions. - 27 - 2. Overall Assessment of Barker Factors This Court first determined that the delay of 965 days from appellant’s November 2018 arrest to his July 2021 trial was presumptively prejudicial under the first Barker factor, thus warranting consideration of the other three factors. Now, in weighing and balancing all the factors together, this Court finds their sum total rebuts the presumption and the evidence as a whole does not support appellant’s claim that his constitutional right to a speedy trial was violated. See Brown, 75 Va. App. at 410 (explaining all four Barker factors are “related” and “must be considered together with such other circumstances as may be relevant” (quoting Barker, 407 U.S. at 533)). Here, the majority of the delay—624 days—resulted from defendant’s waivers of speedy trial, both explicitly and by operation of law.29 Conversely, only 341 days of delay are attributable to the Commonwealth, the vast majority of which is justified based on pandemic-related reasons or the ordinary administration of justice. Such delays caused by “valid and unavoidable” reasons are not weighed against the Commonwealth when balancing the Barker factors. See Ali, 75 Va. App. at 42, 45, 51-52; Barker, 407 U.S. at 531. Moreover, there is no evidence in the record that the Commonwealth should be faulted for any period of delay other than the thirty days between June 28, 2021, and July 28, 2021, which were the result of the Commonwealth’s negligence in determining witness availability. “[T]he extent to which the government caused a portion of the delay intentionally or negligently is an important part of the balancing,” but mere negligence should be weighed less heavily than deliberate delay. Minitee, slip op. at 9-10 (citing Jefferson v. Commonwealth, 23 Va. App. 652, 659 (1996)); see also Ali, 75 Va. App. at 42. Here, the Commonwealth’s negligence only 29 For example, joint continuance requests are treated the same as adjournment requests made solely by appellant for the purposes of speedy trial calculations. See Minitee, slip op. at 8. - 28 - delayed appellant’s trial for thirty extra days. This fact does weigh against the Commonwealth to a degree, but not enough for this Court to find a violation of appellant’s rights where the total period of time attributable to appellant is nearly double the amount attributable to the Commonwealth as a whole.30 Similarly, the third Barker factor—assertion of the right to a speedy trial—weighs only moderately in appellant’s favor due to the timing and frequency of his assertions. Despite having already spent sixteen months in jail, appellant did not assert his right to a speedy trial until March 25, 2020, only after the Supreme Court issued its first emergency order and the trial court administratively adjourned this case to a status date on May 21, 2020, in connection with the COVID-19 pandemic. See Ali, 75 Va. App. at 46 (finding that appellant’s “delay in asserting the right weighs against finding a violation” because this factor “deserves less weight than that to which it would have been entitled if [appellant] had raised it earlier, at a time before the pandemic severely limited the possibility that [appellant] could be tried promptly”). After hearing argument on the speedy trial issue on March 30, 2020, the trial court adjourned the case to April 6, 2020, for a bench trial, and appellant agreed with the trial court’s determination that April 15, 2020, marked the “expiration of the five months” permitted for statutory trial purposes under Code § 19.2-243. Yet, only four days after that decision, appellant agreed to a joint continuance until June 1, 2020.31 Appellant also made subsequent agreements 30 As noted above, periods of delay attributed to the Commonwealth but deemed justified do not weigh in favor of appellant. 31 See Palmer, slip op. at 11-12 (“[A] defendant’s agreement with or failure to object to a court setting a trial date outside the statutory speedy trial period ‘constitutes a continuance of the trial date under Code § 19.2-243(4).’” (quoting Heath v. Commonwealth, 261 Va. 389, 394 (2001))). Compare Baker v. Commonwealth, 25 Va. App. 19, 20-25 (reasoning that supplying the trial court with available trial dates was not the defendant concurring to the requested continuance), aff’d on reh’g en banc, 26 Va. App. 175 (1997). - 29 - to additional adjournments totaling 312 days.32 And despite objecting to the Commonwealth’s continuance request on April 23, 2021, appellant did not file another motion to dismiss on speedy trial grounds until July 27, 2021, the day before trial. Although waivers of speedy trial time resulting from appellant’s decisions do not entirely excuse the Commonwealth from its constitutional obligations, they do assist this Court in weighing the Barker factors to assess whether appellant’s constitutional right to a speedy trial was violated. See Ali, 75 Va. App. at 46 (permitting a court to “weigh the frequency and force” of appellant’s objections to delay (quoting Rogers v. Commonwealth, 5 Va. App. 337, 347 (1987))); see also Commonwealth v. Jerman, 263 Va. 88, 94 (2002) (holding that the “perceived futility” of objecting “does not excuse” a defendant from doing so because of their duty to create a record for appeal). In doing so, this Court finds that appellant’s continued acquiescence to adjournments since April 1, 2020, limits the weight given to appellant’s assertion of his right. Finally, appellant did not demonstrate that he suffered prejudice attributable to the above-described delays. Appellant’s primary argument regarding prejudice is the alleged impairment of his defense due to the missing testimony from his parents. Appellant failed, however, to show the requisite “specific prejudice” because he did not proffer what testimony his parents would have given nor how such testimony would have assisted in his defense. See Tynes v. Commonwealth, 49 Va. App. 17, 21-22 (2006) (holding that appellate court cannot determine prejudicial effect of excluded testimony without proffer of expected testimony). Specifically, appellant did not allege that the testimony of his parents or any other witness would corroborate his version of events or contradict the testimony of Ms. Letyvska—which was corroborated by 32 Sixty-one days from April 1, 2020, to June 1, 2020; 181 days from August 3, 2020, to February 1, 2021; and seventy days from April 19, 2021, to June 28, 2021. These periods of delay are roughly equal to the total amount of time attributed to the Commonwealth throughout the entire case for justifiable reasons (not including the thirty days due to negligence). - 30 - Mr. Sobeck’s testimony—regarding March 24, 2018, the date of the incident underlying appellant’s convictions. Appellant’s claim of prejudice due to his incarceration is also unpersuasive where he simply claims that a long portion of that incarceration resulted from periods of delay attributable to the Commonwealth. As already determined above, only thirty days of the total 341 days attributed to the Commonwealth between defendant’s arrest and trial are not justified due to the Commonwealth’s negligent scheduling. Therefore, even assuming without deciding that appellant’s claim constitutes proof of generalized prejudice for a “particularly prolonged or restrictive period of incarceration,” it is nevertheless insufficient to support a finding that appellant’s constitutional right to a speedy trial was violated when the collective weight of the Barker factors indicates otherwise. See Ali, 75 Va. App. at 51-52 (finding that appellant did not prove the requisite prejudice to establish a constitutional speedy trial violation where the period of delay chargeable to the Commonwealth was valid under Barker); Doggett, 505 U.S. at 656-57. For the foregoing reasons, this Court finds that appellant has not established a violation of his constitutional right to a speedy trial under the Barker four-factor balancing test. See Brown, 75 Va. App. at 407 (“On appeal, a defendant must establish that on balance, the factors weigh in his favor.” (quoting Ali, 75 Va. App. at 35)). D. Appellant’s Fourth Assignment of Error: The Trial Court Erred in Denying Appellant’s Motion to Strike the Charge of Abducting His Wife In his fourth, and final, assignment of error, appellant argues that the trial court erred in finding the evidence sufficient as to the charge of abducting Ms. Letyvska where the act of abduction was merely incidental to appellant’s assault of her. This Court declines to consider the merits of this argument because appellant did not preserve it for appellate review. Rule 5A:18 precludes appellate review of an objection not “stated with reasonable certainty at the time of the ruling” by the trial court. This procedural default principle - 31 - specifically requires “that the argument asserted on appeal be the same as the contemporaneous argument at trial.” Bethea v. Commonwealth, 297 Va. 730, 743 (2019); see Clark v. Commonwealth, 30 Va. App. 406, 411-12 (1999) (preserving one specific argument as to the sufficiency of the evidence does not allow argument on appeal regarding other sufficiency issues not raised at trial). Appellant challenged at trial the sufficiency of the evidence regarding the charge of abducting Ms. Letyvska in his motion to strike and renewed motion to strike. However, he did so only on the grounds that Ms. Letyvska’s testimony was not credible and that the evidence did not prove appellant’s identity or his intent to deprive Ms. Letyvska of her liberty. Appellant did not argue before the trial court, as he does now on appeal, that the evidence was insufficient because it was merely incidental to the separate crime of assault against Ms. Letyvska. Therefore, because appellant deprived the trial court of an opportunity to consider the specific grounds of the objection he now presents on appeal, this issue is not preserved for review by this Court. Accordingly, this Court affirms appellant’s conviction for abducting Ms. Letyvska. III. CONCLUSION For the foregoing reasons, this Court reverses and vacates appellant’s conviction for felony abduction of J.O. and affirms appellant’s remaining convictions.33 Affirmed in part, reversed and vacated in part. 33 Because the parties have not briefed the matter of appropriate remedy with regard to appellant’s second assignment of error, this Court need not decide whether the provisions of Code § 18.2-47(D) set out a lesser-included offense or a separate offense. Therefore, this Court offers no opinion as to whether, and by what means, the Commonwealth may initiate further proceedings against appellant for the abduction of J.O. if so inclined. - 32 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488598/	2022 WI 69 SUPREME COURT OF WISCONSIN CASE NO.: 2020AP1696 COMPLETE TITLE: Saint John's Communities, Inc., Plaintiff-Respondent-Petitioner, v. City of Milwaukee, Defendant-Appellant. REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 399 Wis. 2d 729, 967 N.W.2d 151 PDC No: 2021 WI App 77 - Published OPINION FILED: November 22, 2022 SUBMITTED ON BRIEFS: ORAL ARGUMENT: October 6, 2022 SOURCE OF APPEAL: COURT: Circuit COUNTY: Milwaukee JUDGE: Jeffrey A. Conen JUSTICES: ZIEGLER, C.J., delivered the majority opinion for a unanimous Court. NOT PARTICIPATING: ATTORNEYS: For the plaintiff-respondent-petitioner, there were briefs filed by Alan H. Marcuvitz, Andrea H. Roschke, and von Briesen & Roper, S.C., Milwaukee. There was an oral argument by Alan H. Marcuvitz. For the defendant-appellant, there was a brief filed by Allison N. Flanagan, assistant city attorney, with whom on the brief was Tearman Spencer, city attorney. There was an oral argument by Allison N. Flanagan, assistant city attorney. 2022 WI 69 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2020AP1696 (L.C. No. 2020CV578) STATE OF WISCONSIN : IN SUPREME COURT Saint John's Communities, Inc., Plaintiff-Respondent-Petitioner, FILED v. NOV 22, 2022 City of Milwaukee, Sheila T. Reiff Clerk of Supreme Court Defendant-Appellant. ZIEGLER, C.J., delivered the majority opinion for a unanimous Court. REVIEW of a decision of the Court of Appeals. Affirmed. ¶1 ANNETTE KINGSLAND ZIEGLER, C.J. This is a review of a published decision of the court of appeals, Saint John's Communities, Inc. v. City of Milwaukee, 2021 WI App 77, 399 Wis. 2d 729, 967 N.W.2d 151, reversing the Milwaukee County circuit court's1 order denying the City of Milwaukee's ("City") motion to dismiss Saint John's Communities' ("Saint John's") action for recovery of unlawful taxes under Wis. Stat. § 74.35 1 The Honorable Jeffrey A. Conen presided. No. 2020AP1696 (2019-20).2 The court of appeals reversed, concluding that Saint John's § 74.35 claim was procedurally deficient because Saint John's did not first pay the tax before filing its claim. We affirm. ¶2 Saint John's argues that it properly filed a claim for recovery of unlawful taxes according to all procedures required under Wis. Stat. § 74.35. According to Saint John's, § 74.35 contains no requirement that taxpayers first pay the challenged tax prior to filing a claim for recovery of unlawful taxes against the City. It argues that the only temporal requirements are that taxpayers both pay the challenged tax and file the claim by January 31 of the year in which the tax is payable. As a result, Saint John's argues that the circuit court properly denied the City's motion to dismiss, and that the court of appeals erred in reversing that decision. ¶3 We conclude that Saint John's claim for recovery of unlawful taxes was procedurally deficient. According to Wis. Stat. § 74.35(2)(a), "[a] person aggrieved by the levy and collection of an unlawful tax assessed against his or her property may file a claim to recover the unlawful tax against the taxation district which collected the tax." The plain language of this statute requires Saint John's to first pay the challenged tax or any authorized installment payment3 prior to 2All subsequent references to the Wisconsin Statutes are to the 2019-20 version unless otherwise indicated. 3For ease of reading, we refer to payments of a tax both in full and in installments as payments of "the tax." 2 No. 2020AP1696 filing a claim. If Saint John's has not yet paid the tax, then Saint John's is not "aggrieved by the levy and collection of an unlawful tax," and there is no paid tax to "recover." Saint John's did not make any payment of the challenged tax before it filed its § 74.35 claim. Therefore, Saint John's § 74.35 claim was procedurally deficient, and the circuit court erred in denying the City's motion to dismiss. We affirm the court of appeals' decision. I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE ¶4 The relevant facts are not in dispute. Saint John's owns an age-restricted continuing care retirement community located on a single parcel in the City of Milwaukee (the "Property"). For tax years 2010 through 2018, the City recognized the Property as fully exempt from property taxation under Wis. Stat. § 70.11. ¶5 In 2018, Saint John's began a project to renovate and expand the Property. Saint John's built new facilities in an area of the Property previously used for parking, and it demolished its existing facilities. In 2019, the City Assessor determined this was a new use of the Property and notified Saint John's that the City no longer considered the Property to be tax-exempt.4 Although Saint John's timely filed an appeal with the City 4 Board of Review challenging the assessment as excessive, it failed to file an exemption request by the March 1, 2019 deadline. The City and Saint John's disagree as to whether Saint John's was required to file an exemption request. However, this issue is not a part of our review. 3 No. 2020AP1696 ¶6 On November 8, 2019, Saint John's filed a claim to recover unlawful taxes pursuant to Wis. Stat. § 74.35. The City informed Saint John's that its claim was premature because the City had not yet levied the tax, and because Saint John's had not yet paid the challenged tax and was therefore not "aggrieved by the levy and collection of an unlawful tax" under § 74.35(2). The City levied the tax on November 27, 2019. Saint John's filed a second § 74.35 claim on December 5, 2019, the same day the City issued the 2019 property tax bill to Saint John's. At this point, Saint John's still had not paid the challenged tax. ¶7 At the recommendation of the City Attorney, the City disallowed Saint John's claim on January 21, 2020, because Saint John's did not pay the challenged tax prior to filing its Wis. Stat. § 74.35 claim. The next day, Saint John's paid the first installment of its 2019 property tax bill. ¶8 On January 22, 2020, Saint John's commenced this lawsuit against the City, alleging claims under Wis. Stat. §§ 74.35, 74.33, 74.41, the Uniformity Clause of the Wisconsin Constitution, and 42 U.S.C. § 1983. The claim involving Wis. Stat. § 74.35 is the only claim before us. ¶9 On February 7, 2020, the City filed a motion to dismiss Saint John's lawsuit for failure to state a claim upon which relief can be granted. See Wis. Stat. § 802.06(2)(a)6. The City argued that Saint John's Wis. Stat. § 74.35 claim for recovery of an unlawful tax was procedurally deficient because Saint John's did not first pay the tax before filing its claim. Saint John's argued that its claim was not procedurally 4 No. 2020AP1696 deficient because there is no requirement in § 74.35 that the tax be paid before filing a claim. In a written decision dated August 5, 2020, the circuit court denied the City's motion in part.5 ¶10 On April 9, 2020, before the court issued its written decision denying the City's motion to dismiss, Saint John's filed a motion for partial summary judgment on the merits of its claim. Saint John's argued that the property tax was unlawful because the Property was tax-exempt, and that Saint John's was not required to submit a new exemption application. The City opposed the motion, arguing that Saint John's failed to timely file an exemption application. On September 8, 2020, the circuit court held a hearing on the motion and granted partial summary judgment in favor of Saint John's based on its claims under Wis. Stat. §§ 74.35(1) and 74.33(1)(c), ordering a refund of the 2019 taxes with interest. The circuit court issued a written order to this effect on September 24, 2020. ¶11 The City appealed both the August 5, 2020 order denying the City's motion to dismiss and the September 24, 2020 order granting partial summary judgment to Saint John's. The court of appeals reversed the circuit court's order granting partial summary judgment and remanded the matter to the circuit court with direction to grant the City's motion to dismiss in full. Saint John's Communities, Inc., 399 Wis. 2d 729, ¶27. The circuit court partially granted the City's motion to 5 dismiss as to Saint John's claim under 42 U.S.C. § 1983. 5 No. 2020AP1696 The court of appeals reasoned that the City's motion to dismiss should have been granted because Saint John's filed its claim without first paying the challenged tax, making the claim procedurally deficient. Id., ¶26. ¶12 Saint John's petitioned this court for review of its claim under Wis. Stat. § 74.35, which we granted. II. STANDARD OF REVIEW ¶13 In this case, we review a motion to dismiss for failure to state a claim. "Whether a complaint states a claim upon which relief can be granted is a question of law for our independent review; however, we benefit from discussions of the court of appeals and circuit court." Data Key Partners v. Permira Advisers LLC, 2014 WI 86, ¶17, 356 Wis. 2d 665, 849 N.W.2d 693. "When we review a motion to dismiss, factual allegations in the complaint are accepted as true for purposes of our review. However, legal conclusions asserted in a complaint are not accepted . . . ." Id., ¶18 (citation omitted). ¶14 This case also presents a question of statutory interpretation. "Interpretation of a statute is a question of law that we review de novo, although we benefit from the analyses of the circuit court and the court of appeals." Est. of Miller v. Storey, 2017 WI 99, ¶25, 378 Wis. 2d 358, 903 N.W.2d 759. "[S]tatutory interpretation 'begins with the language of the statute. If the meaning of the statute is plain, we ordinarily stop the inquiry.' Statutory language is given its common, ordinary, and accepted meaning, except that 6 No. 2020AP1696 technical or specially-defined words or phrases are given their technical or special definitional meaning." State ex rel. Kalal v. Cir. Ct. for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110 (citations omitted) (quoting Seider v. O'Connell, 2000 WI 76, ¶43, 236 Wis. 2d 211, 612 N.W.2d 659). "[S]tatutory language is interpreted in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results." Id., ¶46. Additionally, "[s]tatutory language is read where possible to give reasonable effect to every word, in order to avoid surplusage." Id. "Where statutory language is unambiguous, there is no need to consult extrinsic sources of interpretation, such as legislative history." Id. III. ANALYSIS ¶15 On appeal, Saint John's argues its Wis. Stat. § 74.35 complaint properly stated a claim and that all procedural requirements under § 74.35 were met. According to Saint John's, § 74.35 contains no requirement that a taxpayer must first pay the tax prior to filing a recovery claim against the taxation district. Saint John's argues that the only temporal requirement is that the tax be "timely paid," that is, by January 31. We disagree. We conclude that the plain language of § 74.35 requires a taxpayer to pay the challenged tax prior to filing a claim for recovery of unlawful taxes against a taxation district. Because Saint John's did not pay the 7 No. 2020AP1696 challenged tax prior to filing its claim, Saint John's claim was procedurally deficient. § 74.35(2)(a). A. Whether A Taxpayer Must Pay Before Filing A Recovery Claim. ¶16 Wisconsin Stat. § 74.35 establishes the exclusive procedure for taxpayers to "claim that property is exempt" from taxation.6 § 74.35(2m) ("A claim that property is exempt . . . may be made only in an action under this section. Such a claim may not be made by means of an action under s. 74.33 or an action for a declaratory judgment under s. 806.04.").7 ¶17 Wisconsin Stat. § 74.35(2), titled "Claims against taxation district," states, "A person aggrieved by the levy and collection of an unlawful tax assessed against his or her property may file a claim to recover the unlawful tax against the taxation district which collected the tax." § 74.35(2)(a) (emphases added). Section 74.35(2)(a) requires that persons who "may file a claim" must have been "aggrieved" by both the "levy" and "collection" of the assessed tax. A person cannot be "aggrieved" by the "collection" of an unlawful tax unless the This is not the exclusive procedure for claims that 6 property is exempt from taxation under either Wis. Stat. § 70.11(21) or (27), neither of which apply to this case. Where Wis. Stat. § 74.35 uses the 7 term "claim," it is referring only to a claim filed with the taxation district as opposed to a complaint filed with the circuit court. The statute uses the term "action" to refer to the latter. See § 74.35(2m), (3). 8 No. 2020AP1696 tax has actually been collected.8 See Aggrieved, The American Heritage Dictionary of the English Language 34 (3d ed. 1992) (defining "aggrieved" as "[t]reated unjustly, as by denial of or infringement upon one's legal rights"); Collection, id. at 372 (defining "collection" as "[t]he act . . . of collecting").9 ¶18 Once a person has been "aggrieved by the levy and collection" of a tax, that person "may file a claim to recover the unlawful tax." Wis. Stat. § 74.35(2)(a). "Recover" connotes that the tax has already been paid. One cannot recover——that is, "get back," "regain," or be "compensate[d] for"——a tax that has not been paid. Recover, The American Heritage Dictionary of the English Language, supra ¶17, at 1511. 8Saint John's asserts that focusing on the "collection" requirement makes the terms "levy" and "assessed" meaningless. To the contrary, our interpretation gives full meaning to each term in the statute. Wisconsin Stat. § 74.35(2)(a) permits claims by persons "aggrieved by the levy and collection of an unlawful tax assessed" (emphasis added). The statute uses conjunctive language, requiring that the tax must have first been assessed, levied, and collected to file a claim. See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 116 (2012) (conjunctive/disjunctive canon). 9An alternative definition for "collection" is the "process of collecting." Collection, The American Heritage Dictionary of the English Language 372 (3d ed. 1992). However, Wis. Stat. § 74.35(a) most naturally refers to the act of collecting, not the process, because the statute separately states the other steps of the collection process: "levy and collection of an unlawful tax assessed" (emphases added). 9 No. 2020AP1696 ¶19 The plain interpretation of Wis. Stat. § 74.35 is that a taxpayer must first pay the tax before filing a claim.10 Otherwise, the taxpayer is not yet "aggrieved by the levy and collection of an unlawful tax," and there is no unlawful tax to "recover." § 74.35(2)(a). This conclusion is further supported by how interest is calculated pursuant to § 74.35. Section 74.35(4) states, "The amount of a claim filed under sub. (2) or an action commenced under sub. (3) may include interest computed from the date of filing the claim against the taxation district, at the rate of 0.8 percent per month."11 In other words, any A taxpayer need not pay a tax in full before filing a 10 claim. Wisconsin Stat. § 74.35(5)(c) states, "No claim may be filed or maintained under this section unless the tax for which the claim is filed, or any authorized installment payment of the tax, is timely paid . . . ." Additionally, counsel for the City said at oral argument, "At minimum, [Saint John's] had to choose to pay their tax in full or make their first installment payment. Once that act occurred, then . . . they can file the claim." It is therefore sufficient to timely pay an authorized installment before filing a claim. Wisconsin Stat. § 74.35(4) was recently amended to read 11 as follows: The amount of a claim filed under sub. (2) or an action commenced under sub. (3) may include interest at the average annual discount rate determined by the last auction of 6-month U.S. treasury bills before the date of filing the claim per day for the period between the time when the tax was due and the date that the claim was paid. 2021 Wis. Act 162, § 1 (to take effect January 1, 2023). However, this amendment does not impact our analysis because it was not in effect at the time the tax at issue was assessed or levied. See Brown County v. Brown Cnty. Taxpayers Ass'n, 2022 WI 13, ¶2 n.2, 400 Wis. 2d 781, 971 N.W.2d 491. 10 No. 2020AP1696 interest awarded is calculated "from the date of filing the claim," not from the date the tax was paid. § 74.35(4). If a taxpayer could file a claim before paying the tax, there would be no sum paid upon which interest could accrue. A taxpayer would receive a windfall interest payment on funds still in the taxpayer's possession. Requiring a taxpayer to pay the tax before filing a claim ensures that taxpayers can receive interest payments only on sums they actually paid. This further supports that the most reasonable reading of § 74.35 as a whole is that a taxpayer must pay the tax before filing a claim. ¶20 In sum, the plain meaning of Wis. Stat. § 74.35(2)(a) requires taxpayers to first pay the challenged tax prior to filing a claim for recovery of unlawful taxes with the taxation district. B. Saint John's Arguments ¶21 Saint John's first argues that Wis. Stat. § 74.35(2)(a) does not impose any temporal requirement for when a taxpayer must pay the tax. Instead, according to Saint John's, subsec. (2)(a) is "merely an introductory provision, orienting the reader to the general subject matter (unlawful taxes) and parties (taxpayer and municipality)." This argument fails to "give reasonable effect to every word" and effectively reads the first half of subsec. (2)(a) out of the statute. Kalal, 271 Wis. 2d 633, ¶46; see also James v. Heinrich, 2021 WI 58, ¶23, 397 Wis. 2d 517, 960 N.W.2d 350 (quoting Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 174 (2012)) (alterations in original) ("[T]he courts 11 No. 2020AP1696 must . . . lean in favor of a construction which will render every word operative, rather than one which may make some idle and nugatory."). Rather, subsec. (2)(a) is a substantive provision that defines who "may file a claim." This interpretation properly gives effect to subsec. (2)(a) rather than disregarding it as "merely an introductory provision." ¶22 Saint John's also argues that Wis. Stat. § 74.35 contains procedural requirements in subsecs. (2)(b), (5)(a), and (5)(c). It contends that if there were a requirement that taxes be paid before filing a claim, one of these subsections "would be a logical location for the legislature to have inserted such a requirement." Section 74.35(2)(b) lists certain "conditions" that "[a] claim filed under this section shall meet."12 Section A claim filed under Wis. Stat. § 74.35 "shall meet all of 12 the following conditions": 1. Be in writing. 2. State the alleged circumstances giving rise to the claim, including the basis for the claim as specified in s. 74.33(1)(a) to (e). 3. State as accurately as possible the amount of the claim. 4. Be signed by the claimant or his or her agent. 5. Be served on the clerk of the taxation district in the manner prescribed in s. 801.11(4). 12 No. 2020AP1696 74.35(5)(a) requires that "a claim under this section shall be filed by January 31 of the year in which the tax is payable," 13 and § 74.35(5)(c) states, "No claim may be filed or maintained under this section unless the tax for which the claim is filed, or any authorized installment payment of the tax, is timely paid . . . ." Nothing in the language of any of these subsections indicates that they are the exclusive temporal conditions taxpayers must satisfy, and reading them as such renders the language in § 74.35(2)(a) inoperative. We decline to do so. ¶23 Next, turning to surrounding statutes, Saint John's finds Wis. Stat. §§ 74.33 and 74.37, governing palpable error and excessive assessment claims respectively, to be informative. Saint John's alleges that neither of these statutes require taxpayers to first pay a tax before filing and that this means § 74.35(2)(b). Saint John's interprets the third condition, "State as accurately as possible the amount of the claim," as evidence that a taxpayer need not first pay the tax because, if that were the case, the taxpayer would always know the exact amount because it is in the tax bill. This argument conflates the amount stated in the tax bill with the "amount of the claim." The claim amount will not always be the full amount stated in the tax bill where, for example, only a portion of the tax is challenged as unlawful. See §§ 74.35(1), 74.33(1). 13 Saint John's identifies the word "payable" as indicating that the tax need not have been previously paid. Saint John's reads too much into this term. "[P]ayable" identifies only the year in which a claim must be filed: "the year in which the tax is payable." Wis. Stat. § 74.35(5)(a). 13 No. 2020AP1696 Wis. Stat. § 74.35 contains no such requirement either.14 Although we may look to surrounding statutes to determine plain meaning, §§ 74.33 and 74.37 do not change our plain meaning analysis in this case. ¶24 Wisconsin Stat. § 74.33 governing palpable error does not change our analysis of Wis. Stat. § 74.35 because, unlike § 74.35, it contains no procedure at all for taxpayers to file a claim. The two statutes also do not contain similar language. For example, Saint John's points to § 74.33's statement that "the governing body of the taxation district may refund or rescind in whole or in part any general property tax." § 74.33(1). It argues this statement supports that there is no requirement to pay a tax prior to filing a claim because the word "rescind" refers to unpaid amounts. However, this language appears only in § 74.33, so it does not change our analysis of § 74.35. ¶25 Although Wis. Stat. § 74.37 governing claims of excessive assessment contains some similar language, we need not Saint John's urges that "[t]his assertion must be treated 14 as true for purposes of the City's motion to dismiss." Even at the motion to dismiss stage, we are under no obligation to accept Saint John's assertions of law as true. Data Key Partners v. Permira Advisers LLC, 2014 WI 86, ¶18, 356 Wis. 2d 665, 849 N.W.2d 693. Relatedly, Saint John's relies on Wis. Stat. § 74.35's prior version, Wis. Stat. § 74.73 (1985-86), which covered both claims for recovery of an unlawful tax and claims for excessive assessment. That version required taxpayers to pay the tax before the filing deadline. However, this requirement applied only to excessive assessment claims, so it does not inform our analysis of a recovery of unlawful taxes claim. 14 No. 2020AP1696 look to it for guidance either. Section 74.35 is the exclusive procedure for recovering unlawful taxes on a property that is tax-exempt. § 74.35(2m). "[T]he legislature has recognized the distinction between claims of tax exemption and those of excessive assessment, and it has created a separate appeals process for excessive assessment cases." Hermann v. Town of Delavan, 215 Wis. 2d 370, 391, 572 N.W.2d 855 (1998). The processes are not necessarily the same, so § 74.37 does not change our interpretation of § 74.35 in this case. ¶26 Finally, Saint John's argues that requiring taxpayers to first pay the tax before filing a claim will lead to absurd results. Saint John's characterizes this rule as forcing taxpayers to choose between forfeiting the "right to pay taxes up until January 31" and being put in the "precarious position of delaying payment of taxes until the last day for payment and filing the claim the same day." We reject Saint John's invitation to engage in this results-based analysis. The absurdity canon is reserved only for those interpretations that no reasonable person could intend, not interpretations that "may seem odd." Scalia & Garner, supra ¶21, at 237 (quoting Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 565 (2005)). "The oddity or anomaly of certain consequences may be a perfectly valid reason for choosing one textually permissible interpretation over another, but it is no basis for disregarding or changing the text." Id. We refuse to disregard Wis. Stat. § 74.35's plain and express meaning based on a result Saint John's considers undesirable. 15 No. 2020AP1696 ¶27 Because we conclude that Wis. Stat. § 74.35 unambiguously requires taxpayers to first pay the tax prior to filing a claim for recovery of unlawful taxes, we need not address Saint John's arguments regarding legislative history, construction of procedural requirements, and policy considerations. Kalal, 271 Wis. 2d 633, ¶46 ("Where statutory language is unambiguous, there is no need to consult extrinsic sources of interpretation . . . ."). We also decline to address Saint John's claim under the Uniformity Clause because it is undeveloped. Wis. Conference Bd. of Trustees of United Methodist Church, Inc. v. Culver, 2001 WI 55, ¶38, 243 Wis. 2d 394, 627 N.W.2d 469 (quoting Cemetery Servs., Inc. v. Dep't of Reg. & Licens., 221 Wis. 2d 817, 831, 586 N.W.2d 191 (Ct. App. 1998)) ("Constitutional claims are very complicated from an analytic perspective, both to brief and to decide. . . . [W]e generally choose not to decide issues that are not adequately developed by the parties in their briefs."). C. Failure To State A Claim ¶28 Based on the facts Saint John's alleged in its complaint filed in circuit court, Saint John's failed to state a claim upon which relief can be granted. Saint John's filed its first Wis. Stat. § 74.35 claim on November 8, 2019. Saint John's does not allege that it paid any of the challenged tax before filing. Thereafter, the City notified Saint John's that the claim was premature because Saint John's had not yet paid the challenged tax. On December 5, 2019, Saint John's filed a second claim with the City. Again, Saint John's does not allege 16 No. 2020AP1696 that it paid any of the challenged tax before filing this claim. Saint John's only alleges that it paid a portion of the tax on January 22, 2020, over a month after it filed its second § 74.35 claim. Based on these allegations, Saint John's § 74.35 claim was untimely because Saint John's was not yet "aggrieved by the levy and collection of an unlawful tax" and was unable to "recover" any tax at the time Saint John's filed the claim. § 74.35(2)(a). Accordingly, Saint John's failed to state a claim upon which relief can be granted. IV. CONCLUSION ¶29 Saint John's argues that it properly filed a claim for recovery of unlawful taxes according to all procedures required under Wis. Stat. § 74.35. According to Saint John's, § 74.35 contains no requirement that taxpayers first pay the challenged tax prior to filing a claim for recovery of unlawful taxes against the City. It argues that the only temporal requirements are that taxpayers both pay the challenged tax and file the claim by January 31 of the year in which the tax is payable. As a result, Saint John's argues that the circuit court properly denied the City's motion to dismiss, and that the court of appeals erred in reversing that decision. ¶30 We conclude that Saint John's claim for recovery of unlawful taxes was procedurally deficient. According to Wis. Stat. § 74.35(2)(a), "[a] person aggrieved by the levy and collection of an unlawful tax assessed against his or her property may file a claim to recover the unlawful tax against the taxation district which collected the tax." The plain 17 No. 2020AP1696 language of this statute requires Saint John's to first pay the challenged tax or any authorized installment payment prior to filing a claim. If Saint John's has not yet paid the tax, then Saint John's is not "aggrieved by the levy and collection of an unlawful tax," and there is no paid tax to "recover." Saint John's did not make any payment of the challenged tax before it filed its § 74.35 claim. Therefore, Saint John's § 74.35 claim was procedurally deficient, and the circuit court erred in denying the City's motion to dismiss. We affirm the court of appeals' decision. By the Court.—The decision of the court of appeals is affirmed. 18 No. 2020AP1696 1	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488593/	COURT OF APPEALS OF VIRGINIA Present: Judges Fulton, Ortiz and Senior Judge Petty PUBLISHED Argued by videoconference PRISCILLA ANN HOLMES v. Record No. 0250-22-3 COMMONWEALTH OF VIRGINIA OPINION BY JUDGE JUNIUS P. FULTON, III PRISCILLA ANN HOLMES NOVEMBER 22, 2022 v. Record No. 0251-22-3 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF AUGUSTA COUNTY W. Chapman Goodwin, Judge H. Eugene Oliver, III (Evans Oliver, PLC, on brief), for appellant. Ken J. Baldassari, Assistant Attorney General (Jason S. Miyares, Attorney General, on brief), for appellee. Following a jury trial, the Circuit Court of Augusta County convicted Priscilla Holmes of two counts of racketeering in violation of Code § 18.2-514(C). Holmes appeals her convictions, challenging the sufficiency of the Commonwealth’s evidence against her and the trial court’s denial of three proposed jury instructions. For the following reasons, we affirm in part, reverse in part, and remand this case to the circuit court for a new trial. I. BACKGROUND The Commonwealth charged Holmes by indictment alleging two counts of knowingly, intentionally, willfully, unlawfully and feloniously, while associated with any enterprise, as defined in Virginia Code Section 18.2-513, did commit namely two or more of the following offenses: possession of a Schedule I or II controlled substance, and/or distribution or possession with intent to distribute a Schedule I or II substance, and/or distribution or possession with intent to distribute 28 grams or more of methamphetamine.1 At trial, the Commonwealth presented evidence of racketeering activity during two time frames. A. Evidence of Racketeering Benjamin Hartless testified for the Commonwealth that after meeting Holmes in December 2017 until his arrest in July 2018,2 he distributed methamphetamine, purchased from Holmes, in Augusta County. At the time of the trial, Hartless had been using methamphetamine for approximately twenty years. Hartless was introduced to Holmes by a friend. He began selling for her “pretty much right off the bat,” starting off selling “eight-balls” or an eighth of an ounce. Hartless would typically break down the eight-ball, “sell a couple of grams out of it to make the money back and then either keep the rest or sell a little bit more out of it.” During that time, Hartless was using “anywhere from a half a gram to a gram a day” of methamphetamine. After about a month of selling eight-balls for Holmes, Hartless began to get “a couple of ounces” of methamphetamine at a time from Holmes, which he would break down into eight-balls and sell to people who were further dealing to others. Eventually, Hartless received one, two, and three pounds of methamphetamine at a time from Holmes. He paid Holmes $15,000 per pound with cash bundled together and wrapped in rubber bands. He would pay the cash to Holmes directly or to Andrea Verdi, a woman who would deliver methamphetamine for Holmes. While Hartless was selling for Holmes, he testified that he generally saw her on a weekly basis when she would drive to Augusta County to 1 In addition to the two violations of Code § 18.2-514(C), for which Holmes was convicted, she was acquitted of two violations of Code § 18.2-514(A). 2 Notwithstanding Hartless’s testimony to these start and end dates, Hartless also testified that he sold for Holmes for around a year. -2- meet him. Holmes would typically drive nice-looking SUVs with Georgia plates, which Hartless believed to be rental cars. When Hartless received methamphetamine by the pound, it would arrive in “like a [Z]iplock bag, wrapped up real tight with plastic wrap around it and then it’d have . . . axle grease around it and then wrapped up again in plastic wrap and then duct taped all tight.” Once he received the large quantity of methamphetamine, Hartless would “unwrap it all and break it down into ounces and then distribute to people” who would then break it down further and sell it. Hartless testified that he sold methamphetamine to at least five other people whom he knew to be dealing to others. Over the period he sold for Holmes, Hartless estimated he sold fifty or more pounds of methamphetamine. Hartless testified that until his arrest he maintained a “good name in drug circles” and had a trustworthy reputation on the street. Roger Holmes (hereinafter “Roger,” no relation to the appellant) also testified that he purchased methamphetamine from Holmes for resale in Augusta County. At the time of trial, Roger had been a methamphetamine user for approximately twenty years. Roger explained that he met Holmes about thirty years ago, lost contact for fifteen to twenty years, and was reintroduced by a friend in 2018. Shortly thereafter, Holmes sent two pounds of methamphetamine to Roger, through another person, in a block that was packaged “in a vacuum-sealed bag with coffee in it,” which Roger broke up into smaller packages and resold. Sometime thereafter, Holmes traveled to Roger’s residence to collect the $28,000 he owed her for the two pounds of methamphetamine he had sold. Roger only had $24,000, which he paid her in cash. After that initial money pickup, Roger and Holmes communicated via phone: “She called and asked . . . what I needed, and I told her how much money I’d had, she said somebody would be by. Then another stranger stopped in and picked up the money and left what I was getting.” -3- Roger sold methamphetamine for Holmes approximately twenty times to five different people, for a total of five pounds. He confirmed that Verdi delivered a pound of methamphetamine to him for Holmes once and that Holmes never personally brought him any drugs. Roger began dealing for Holmes after Hartless’s arrest in July 2018 and ceased on December 21, 2018, when the Skyline Drug Task Force arrested Holmes at Roger’s residence. Roger, along with Task Force Officer Rosemeier, testified that Roger “set [Holmes] up,” telling officers that Holmes was going to Roger’s home to bring him two pounds of methamphetamine and collect $14,000 that he owed her. Although Holmes arrived at Roger’s house at the date and approximate time she was expected, driving an SUV with Georgia license plates, she did not have any drugs on her person or in her vehicle and did not attempt to collect any money from Roger before she was arrested. Verdi testified for the Commonwealth that, at the instruction of Holmes, she delivered large quantities of methamphetamine to Hartless, Roger, and another individual in Virginia, making a total of seven-to-eight trips. Each of Verdi’s visits to Virginia was for the purpose of “either picking up [money], dropping off [methamphetamine], or both.” At Holmes’s suggestion, Verdi delivered the drugs using SUVs and would store them either in the trunk or “above the tire underneath the cupholders.” The methamphetamine was packaged “in like freezer bags . . . like vacuum sealed.” Holmes provided the addresses, paid for the rental cars, and paid Verdi between $800 and $1,200 per trip. On two separate occasions, Holmes also sent Verdi to pick up methamphetamine from an individual in Atlanta. Officer Hilliard of the Skyline Drug Task Force testified, without objection, that “numerous people” identified Holmes as a drug dealer in Augusta County. In addition to the testimony of Holmes’s three accomplices and the task force officers involved in the investigation and arrest, the Commonwealth introduced into evidence two certificates of analysis. The first -4- certificate of analysis showed that on July 31, 2018, police recovered just over half a pound of methamphetamine from Hartless. The second showed that in December 2018, nearly one pound of methamphetamine was recovered just after Verdi delivered it to Roger on his property. At the conclusion of the Commonwealth’s evidence, Holmes made a motion to strike, which was denied. Holmes declined to present any evidence and made renewed motions to strike, which the court also overruled. B. Jury Instructions Three of Holmes’s proposed jury instructions were rejected by the trial court. Proposed Instruction I stated (rejected paragraphs italicized): You are the judge of the facts, the credibility of the witnesses, and the weight of the evidence. You may consider the appearance and manner of the witnesses on the stand, their intelligence, their opportunity of knowing the truth and for having observed the things about which they testified, their interest in the outcome of the case, their bias, and, if any have been shown, their prior inconsistent statements, or whether they have knowingly testified untruthfully as to any material fact in the case. You may not arbitrarily disregard believable testimony of a witness. However, after you have considered all the evidence in the case, then you may accept or discard all or part of the testimony of a witness as you think proper. Although one or more witnesses may positively testify as to an alleged fact and although that testimony may not be contradicted by other witnesses, you may altogether disregard that testimony if you believe it to be untrue. You are entitled to use your common sense in judging any testimony. From these things and all the other circumstances of the case, you may determine which witnesses are more believable and weigh their testimony accordingly. If you believe from the evidence that any witness has knowingly testified falsely as to any material fact in this case, you have a right to discredit all of the testimony of that witness or to give to such testimony such weight and credit as in your opinion it is entitled. -5- The court instructed the jury on the first, second, and fourth paragraphs of Instruction I, but rejected the third and fifth paragraphs, holding that the issues raised there were “adequately covered” by the model jury instruction and that “anything more[] was duplication and/or could be confusing to the jury.” Proposed Instruction Q stated: Where a fact is equally susceptible to two interpretations, one of which is consistent with the defendant’s innocence, you may not arbitrarily adopt the interpretation which finds him guilty. Declining to give Instruction Q, the court stated that it “has given an instruction as to the jury’s obligation and rights and how they should interpret evidence that comes in. It is their factual determination as to whether to believe and what weight and credibility should be applied to each piece of evidence and to each piece of testimony.” The court further concluded that Instruction Q was “argumentative with regard to the obligation that [the jury] ha[s] and it intrudes upon their fact finding issues.” Proposed Instruction T stated: You have heard testimony from accomplices in the commission of the crime charged in the indictment. While you may find your verdict upon their uncorroborated testimony, you should consider such testimony with great care and you are cautioned as to the danger of convicting the defendant upon the uncorroborated testimony of an accomplice or accomplices. Nevertheless, if you are satisfied from the evidence of the guilt of the defendant beyond a reasonable doubt, the defendant may be convicted upon the uncorroborated evidence of an accomplice or accomplices. In rejecting Instruction T, the court noted that “the testimony of the witness itself can contain the corroboration and in this case there was ample corroboration of the cases.”3 3 The court continued in its analysis: The question as to the admissibility of the statement is where this matter is determined. The Court is obligated as a matter of law to -6- At the end of the trial the jury found Holmes guilty of “Racketeering with regard to criminal activity occurring in Augusta County between July 31, 2017 and July 31, 2018,” and “Racketeering with regard to criminal activity occurring in Augusta County between August 1, 2018 and December 21, 2018.” II. ANALYSIS Holmes assigns error to her convictions, asserting that the trial court erred in convicting her “because the Commonwealth failed to prove two distinct acts” of criminal activity in support of each of the racketeering indictments and because the evidence was insufficient as a matter of law to sustain the racketeering convictions. She likewise assigns error to the trial court’s rejection of Instructions I, Q, and T. A. Sufficiency of the Evidence “When reviewing the sufficiency of the evidence, ‘[t]he judgment of the trial court is presumed correct and will not be disturbed unless it is plainly wrong or without evidence to support it.’” McGowan v. Commonwealth, 72 Va. App. 513, 521 (2020) (alteration in original) (quoting Smith v. Commonwealth, 296 Va. 450, 460 (2018)). “In such cases, ‘[t]he Court does determine whether there is sufficient evidence to support that or to corroborate that before it allows the statement in. There was no objection to the statement at the time that it was put in and the Court made the determination that there was corroboration of that. So the Court has made the determination as a matter of law that the testimony was admissible and the matter of law determination is for the Court to make and not for the jury to make. And to give this instruction allows the jury to get a second bite at something that the Judge has already determined as a matter of law. The jury instruction arguments in this case were made in chambers, off the record, and Holmes’s objections to the court’s rulings, along with the court’s explanations, were put on the record after the jury retired to consider the case. Consequently, the court’s explanation for its ruling on the record is somewhat incomplete. We note that the court, in making its ruling on the record, seems to conflate the issues of admissibility and whether there was sufficient corroboration to obviate the need for the cautionary jury instruction. Nevertheless, the trial court’s reason for its denial is immaterial as we review its ruling de novo. -7- not ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’” Id. (alteration in original) (quoting Secret v. Commonwealth, 296 Va. 204, 228 (2018)). “Rather, the relevant question is whether ‘any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” Vasquez v. Commonwealth, 291 Va. 232, 248 (2016) (quoting Williams v. Commonwealth, 278 Va. 190, 193 (2009)). “If there is evidentiary support for the conviction, ‘the reviewing court is not permitted to substitute its own judgment, even if its opinion might differ from the conclusions reached by the finder of fact at the trial.’” McGowan, 72 Va. App. at 521 (quoting Chavez v. Commonwealth, 69 Va. App. 149, 161 (2018)). To the extent determining whether the evidence was sufficient to support a conviction involves interpreting the statute itself, that is a question of law which we review de novo. See Woodard v. Commonwealth, 287 Va. 276, 280 (2014). Holmes was convicted of two counts of racketeering, in violation of Code § 18.2-514(C), which provides that “[i]t shall be unlawful for any person employed by, or associated with, any enterprise to conduct or participate, directly or indirectly, in such enterprise through racketeering activity.” “‘Racketeering activity’ means to commit, attempt to commit, or conspire to commit or to solicit, coerce, or intimidate another person to commit two or more” enumerated offenses. Code § 18.2-513. In this case, the Commonwealth amended the indictments from the broad list of enumerated offenses contained in Code § 18.2-513, narrowing them to allege more specific drug crimes. The Commonwealth was therefore required to prove that Holmes specifically committed “two or more” violations of “possession of a Schedule I or II controlled substance, and/or distribution or possession with intent to distribute a Schedule I or II controlled substance, and/or distribution or possession with intent to distribute 28 grams or more of methamphetamine.” -8- Holmes argues the evidence was insufficient to prove beyond a reasonable doubt that she “committed two distinct acts as alleged in the indictments, for each indictment.” Specifically, she argues that only one certificate of analysis proving the presence of methamphetamine was established for each indictment, and the other circumstantial evidence of a second distinct act did not sufficiently establish the nature of the substances delivered to and subsequently redistributed by Hartless and Roger. It is not necessary for the Commonwealth to prove the nature of an illegal substance using direct evidence, such as a certificate of analysis. Hill v. Commonwealth, 8 Va. App. 60, 63 (1989) (citing United States v. Zielie, 734 F.2d 1147, 1156 (11th Cir. 1984); United States v. Gregorio, 497 F.2d 1253, 1263 (4th Cir. 1974)). Rather, the nature of the substance can be proven by circumstantial evidence. Id. The types of circumstantial evidence that may be considered in assessing whether the illicit nature of a substance is proven beyond a reasonable doubt includes, but is not limited to: the physical appearance of the substance involved in the transaction, evidence that the substance produced the expected effects when sampled by someone familiar with the illicit drug, evidence that the substance was used in the same manner as the illicit drug, testimony that a high price was paid in cash for the substance, evidence that transactions involving the substance were carried on with secrecy or deviousness, and evidence that the substance was called by the name of the illegal narcotic by the defendant or others in his presence. Id. (quoting United States v. Dolan, 544 F.2d 1219, 1221 (4th Cir. 1976)). Holmes notes that none of the methamphetamine use Hartless and Roger testified about was “tied to the specific methamphetamine [Holmes] is alleged to have distributed” and neither Hartless nor Roger was qualified as an expert witness. However, circumstantial evidence of the nature of an illegal substance need not include expert testimony. “Users and addicts, if they have gained familiarity or experience with a drug, may identify it. Numerous courts have permitted -9- lay purchasers of drugs to testify as to the identification of drugs after previous use has been demonstrated.” Hill, 8 Va. App. at 63. In this case, the evidence clearly established that Hartless and Roger were longtime methamphetamine users and, therefore, were familiar enough with the drug to identify it. Further, although Hartless did not testify directly about any particular occasion when he ingested the methamphetamine he received from Holmes, he testified that during the period he was selling for Holmes he was using “anywhere from a half a gram to a gram a day” and would sometimes keep a portion of the methamphetamine he received from Holmes. Moreover, we note that although the testimony in Hill was that the witness had used the cocaine at issue, the standard described by this Court in Hill does not require testimony that the user/addict used the specific batch of drugs about which they are testifying. See id. (allowing users to testify about the identity of drugs “after previous use has been demonstrated”). Hartless and Roger both testified they paid Holmes $14,000 to $15,000 per pound of methamphetamine. The price was paid in cash, which was packaged in rubber bands. The substance delivered to them was also packaged like large quantities of methamphetamine. Hartless, Roger, and Verdi all testified that it was packaged in vacuum-sealed bags and delivered to Hartless and Roger surreptitiously. Hartless and Roger both explained that the bags were packaged with another substance to conceal the scent of the methamphetamine and deter narcotics dogs, such as coffee or axle grease. Verdi testified that she would deliver the methamphetamine using rented SUVs and, at Holmes’s instruction, concealed the drugs “above the tire underneath the cupholders.” Thus, “a high price was paid in cash for the [methamphetamine]” and “transactions involving the [methamphetamine] were carried on with secrecy or deviousness.” Id. (quoting Dolan, 544 F.2d at 1221). In addition to Hartless’s implication that he personally used the methamphetamine he purchased from Holmes, he testified that he sold about fifty or more pounds of - 10 - methamphetamine that he received from Holmes for around a year to at least five different people whom he knew to be dealing to others and that prior to his arrest he had a “good name in drug circles” and a trustworthy reputation on the street. Roger testified that he sold a total of five pounds of methamphetamine for Holmes to five different people spread out over approximately twenty different sales. A reasonable factfinder could conclude from this evidence of the large and steady amount of Holmes-supplied methamphetamine in Augusta County that the substance Hartless and Roger sold for Holmes “had the physical appearance of [methamphetamine],” “was used in the same manner as [methamphetamine],” and “produced the expected effects when sampled by someone familiar with [methamphetamine].” Hill, 8 Va. App. at 63 (quoting Dolan, 544 F.2d at 1221). Finally, the court received testimony from Hartless, Roger, and Verdi that each of them communicated with Holmes regarding the purchase, delivery, and sale of methamphetamine. Hartless testified that a friend introduced him to Holmes and initially told him that Holmes wanted to purchase methamphetamine from him, but when the two met in person Hartless learned that Holmes was actually trying to sell to him. This included discussions about the quantity and price of the methamphetamine, how it would be packaged, and how it would be delivered. A reasonable factfinder could conclude from the accomplices’ testimony about their communications with Holmes that “the substance was called by the name of the illegal narcotic by the defendant or others in his presence.” Id. (quoting Dolan, 544 F.2d at 1221). Taking the totality of the Hill factors into consideration, there was sufficient circumstantial evidence for a factfinder to conclude that the substance Holmes dealt to Hartless and Roger was methamphetamine. - 11 - Holmes also challenges the sufficiency of the evidence “tying [her] to the charges at hand.” She argues that the evidence at trial failed to exclude all reasonable hypotheses of innocence because she was never caught with drugs or money, she was supposed to have been delivering narcotics where there were no narcotics and no cash, she had known Roger Holmes and Andrea Verdi outside the context of the alleged distribution ring, and brought grandchildren to a supposed large scale methamphetamine deal among many others. We disagree and hold that when viewed in the light most favorable to the Commonwealth, the record contained sufficient evidence to convict Holmes of racketeering. Three accomplices, Hartless, Roger, and Verdi, all testified that Holmes facilitated and directed the distribution of methamphetamine in Augusta County. As our Supreme Court has held, a “jury if satisfied of guilt, may convict an accused upon the uncorroborated testimony of an accomplice.” Dillard v. Commonwealth, 216 Va. 820, 821 (1976). The accomplices testified unequivocally that they communicated with Holmes about purchasing and distributing large quantities of methamphetamine, which she then either delivered or directed to be delivered to Augusta County, and for which she collected large payments. This testimony, taken in the light most favorable to the Commonwealth, foreclosed all reasonable hypotheses of innocence and provided the factfinder with more than sufficient evidence to conclude, beyond a reasonable doubt, that Holmes was guilty of racketeering. B. Jury Instructions The responsibility of properly instructing a jury “rest[s] in the sound discretion of the trial court.” Cooper v. Commonwealth, 277 Va. 377, 381 (2009). “A reviewing court’s responsibility in reviewing jury instructions,” however, “is ‘to see that the law has been clearly stated and that the instructions cover all issues which the evidence fairly raises.’” Fahringer v. Commonwealth, 70 Va. App. 208, 211 (2019) (quoting Darnell v. Commonwealth, 6 Va. App. 485, 488 (1988)). - 12 - “We review a trial court’s decisions in giving and denying requested jury instructions for abuse of discretion.” Conley v. Commonwealth, 74 Va. App. 658, 675 (2022). Whether a proffered jury instruction accurately states the law, however, is reviewed de novo. Sarafin v. Commonwealth, 288 Va. 320, 325 (2014). “And in deciding whether a particular instruction is appropriate, we view the facts in the light most favorable to the proponent of the instruction.” Cooper, 277 Va. at 381. 1. Jury Instruction I Holmes argues that the trial court erred in refusing two specific paragraphs from Jury Instruction I. The first rejected paragraph, which states: “Although one or more witnesses may positively testify as to an alleged fact and although that testimony may not be contradicted by other witnesses, you may altogether disregard that testimony if you believe it to be untrue,” arises from an instruction given in Blount v. Commonwealth, 213 Va. 807, 808 (1973). The second rejected paragraph states: “If you believe from the evidence that any witness has knowingly testified falsely as to any material fact in this case, you have a right to discredit all of the testimony of that witness or to give to such testimony such weight and credit as in your opinion it is entitled,” and originates in Zirkle v. Commonwealth, 189 Va. 862 (1949), and Ronald J. Bacigal & Margaret Ivey Bacigal, Virginia Practice Series: Jury Instructions §§ 57:4 and 57:7 (2014-2015 ed.). Both rejected paragraphs in Jury Instruction I are accurate statements of the law, but our analysis does not stop there. Rather, we must look to whether the “granted instructions fully and fairly cover a principle of law.” Daniels v. Commonwealth, 275 Va. 460, 466 (2008) (emphasis added). When they do, “a trial court does not abuse its discretion in refusing another instruction relating to the same legal principle.” Id. (quoting Stockton v. Commonwealth, 227 Va. 124, 145 (1984)). In this case, the principles of law discussed in the rejected paragraphs were already - 13 - covered by other instructions that were given to the jury. In Instruction Number 5, the court instructed that the jurors “are the judges of the facts, the credibility of the witnesses, and the weight of the evidence,” that they “may not arbitrarily disregard believable testimony of a witness,” but after they “have considered all the evidence in the case, then [the jurors] may accept or discard all or part of the testimony of a witness as [the jurors] think proper.” Further, the jury was instructed that it may consider a witness’s “bias, and, if any have been shown, their prior inconsistent statements, or whether they have knowingly testified untruthfully as to any material fact in the case.” Because Instruction Number 5 fairly and adequately instructed the jury on the principles of law discussed in the rejected paragraphs of Jury Instruction I, a duplicative instruction would inappropriately “single out for emphasis a part of the evidence tending to establish a particular fact,” Woods v. Commonwealth, 171 Va. 543, 548 (1938), and “would be confusing or misleading to the jury,” Bruce v. Commonwealth, 9 Va. App. 298, 300 (1990). 2. Jury Instruction Q Our conclusion that Jury Instruction Q was properly rejected results from the same analysis that defeated Holmes’s claims regarding Jury Instruction I. An instruction that “Where a fact is equally susceptible to two interpretations, one of which is consistent with the defendant’s innocence, you may not arbitrarily adopt the interpretation which finds him guilty” is simply duplicative of other granted instructions. The court already instructed the jury on the presumption of innocence (Instruction Number 1), including that “the Commonwealth [must] prove[] each and every element of the crime beyond a reasonable doubt.” The court likewise instructed, through Instruction Number 6, that “When the Commonwealth relies upon circumstantial evidence, the circumstances proved must be consistent with guilt and inconsistent with innocence. It is not sufficient that the circumstances proved create a suspicion of guilt, - 14 - however strong, or even a probability of guilt” and that “The evidence as a whole must exclude every reasonable theory of innocence.” The “court’s use of the[se] model jury instruction[s] left no vital issue unaddressed.” Shaikh v. Johnson, 276 Va. 537, 546 (2008). Instruction Number 1 and Instruction Number 6 fairly and adequately instructed the jury on the principles of law discussed in rejected Jury Instruction Q. To nevertheless grant Jury Instruction Q would be duplicative, inappropriately single out a particular fact or issue, and may cause confusion to the jury. Therefore, the trial court did not err in rejecting Jury Instruction Q. 3. Jury Instruction T The final rejected instruction cautioned the jury against the danger of convicting Holmes upon the uncorroborated testimony of an accomplice. Virginia appellate courts have consistently held that: if satisfied of guilt, [a jury] may convict an accused upon the uncorroborated testimony of an accomplice. Where accomplice testimony is uncorroborated, however, it is the duty of the court to warn the jury against the danger of convicting upon such uncorroborated testimony. This warning is required because the source of accomplice testimony is tainted with the temptation to exculpate oneself by laying the crime upon another. Dillard, 216 Va. at 821 (citations omitted). Dillard makes it clear that if an accomplice’s testimony is uncorroborated, it is error for a trial court to refuse the cautionary instruction. Id. In rejecting Jury Instruction T, the court held that the instruction was not warranted because the accomplice testimony was not uncorroborated. The court stated that “the testimony of the witness itself can contain the corroboration and in this case there was ample corroboration of the cases.” We disagree. “[T]he danger of collusion between accomplices and the temptation to exculpate themselves by fixing responsibility upon others is so strong that it is the duty of the court to warn the jury against the danger of convicting upon their uncorroborated testimony.” Jones v. Commonwealth, 111 Va. 862, 868 (1911). Moreover, “[I]f two or more accomplices are - 15 - produced as witnesses, they are not deemed to corroborate each other . . . and the same confirmation is required[] as if there were but one.” Id. (quoting 1 Greenleaf on Evidence § 381 (15th ed.)); see also Via v. Commonwealth, 288 Va. 114, 115 (2014) (“Whether accomplice testimony is corroborated is subject to the long established principle that accomplice testimony cannot be corroborated by the testimony of another accomplice.”). In this case, although the testimony of Holmes’s accomplices, Benjamin Hartless, Roger Holmes, and Andrea Verdi, corroborate each other, the “danger of collusion between [these three] accomplices and the temptation to exculpate themselves by fixing responsibility upon others” is not alleviated where the sole corroboration is the testimony of another accomplice to the crime. Jones, 111 Va. at 868. Whether the accomplice testimony was sufficiently corroborated is a question of law for the court. Dillard, 216 Va. at 824. It is, therefore, reviewed de novo on appeal. The correct standard for “determining whether a cautionary instruction should be granted becomes this: is corroborative evidence lacking? If it is, the instruction should be granted.” Id. at 822. The proper standard for determining whether sufficient corroboration exists to refuse the cautionary instruction is: “[T]he corroboration or confirmation must relate to some fact (or facts) which goes to establish the guilt of the accused.” Id. at 823 (alteration in original) (quoting Jones, 111 Va. at 869). This standard is “not as rigid as the ‘ultimate fact’ test. The corroborative evidence, standing alone, need not be sufficient either to support a conviction or to establish all essential elements of an offense.” Id. An example of the “relation to guilt” standard was outlined in Crosby v. Commonwealth, 132 Va. 518 (1922). In that case, Crosby was charged with illegally selling alcohol, which he denied. Id. at 520. “An accomplice, the purchaser of the liquor, testified for the Commonwealth that [Crosby] had made the sale.” Dillard, 216 Va. at 823. The Commonwealth’s only - 16 - remaining evidence came from “a police officer, who testified he saw the accused at the window of the house where the sale was alleged to have occurred; observed the accused look up and down the street; noticed the alleged purchaser enter the house; and afterwards found whisky in the possession of the purchaser.” Id. The officer’s testimony provided corroboration for “the occasion and opportunity for the crime as well as the possession (by the purchaser) of the whisky alleged to have been purchased.” Id. (quoting Crosby, 132 Va. at 520). As such, Crosby was not “convicted upon the uncorroborated testimony of his accomplice.” Id.; see also Johnson v. Commonwealth, 42 Va. App. 46, 57 (2003) (finding sufficient corroborating evidence where Johnson was seen with her accomplice “immediately prior to the two drug transactions”); Richards v. Commonwealth, 187 Va. 1, 4 (1948) (finding sufficient corroboration where “[t]he occasion and the opportunity for the crime, as well as the possession of the beer, were established by testimony other than that emanating from the alleged accomplice”). Contra Yates v. Commonwealth, 4 Va. App. 140, 143 (1987) (finding insufficient corroboration to an accomplice’s testimony where “[e]xcept for the testimony of [the accomplice], there was neither physical evidence nor testimony that tended to connect Yates with the crime”). The Commonwealth relies upon three different items of evidence which it argues corroborate the accomplice testimony in this case. First, that Roger told the Skyline Drug Task Force that Holmes would go to his house on December 21, 2018, to conduct a methamphetamine transaction, and although Holmes did not have methamphetamine on her person or in her vehicle and no transaction was attempted, she did arrive at the location at the approximate time she was expected. Second, both Hartless and Verdi testified that Holmes used SUVs for the drug transactions, and she in fact arrived at Roger’s home on December 21, 2018, in an SUV. Third, Officer Hilliard testified that “numerous people” identified Holmes as a drug dealer in Augusta County. None of this evidence tends to connect Holmes with the racketeering crimes for which - 17 - she was convicted. Unlike in Crosby, where the police officer’s observations established Crosby’s proximity to the location of the illegal liquor sale, as well as the reasonable inference that the purchaser received the liquor from him, there was no non-accomplice testimony in this case that Holmes was ever seen with methamphetamine, in Augusta County or otherwise. Roger’s “tip” that Holmes would arrive at his home at a specific time to conduct a drug deal failed to bear fruit when she arrived without any drugs and without attempting to collect any money. The bare fact that Holmes drove an SUV does not relate to her guilt to the extent that it can serve as the corroboration for the accomplice testimony. Finally, the testimony that “numerous people” had identified Holmes as a drug dealer, while “admitted without objection” and thus can be “properly” “considered” and “given its natural probative effect,” remains hearsay and is entitled to minimal weight. Baughan v. Commonwealth, 206 Va. 28, 31 (1965). “[T]he basis for the exclusion of hearsay testimony is that it is not subject to the tests which can ordinarily be applied for the ascertainment of the truth of such testimony. It has been said that it lacks ‘any guarantee of trustworthiness.’” Stevens v. Mirakian, 177 Va. 123, 131 (1941). The identity of the declarants, the context of the statements, and the bases of the declarants’ knowledge, are entirely unknown. It therefore cannot be known whether the declarants are likewise accomplices in this racketeering enterprise and thus subject to the same requirement of corroboration, or whether the statement that Holmes has been identified as a drug dealer even relates to the charged offenses. The testimony that “numerous” unidentified “people,” in unknown contexts, had, at some unknown point in time, identified Holmes as a drug dealer is so attenuated from the charged crimes, and so lacking in any indicia of reliability that it cannot, alone, serve as the corroboration necessary to obviate the need for the cautionary instruction warning against convicting based on the uncorroborated testimony of - 18 - accomplices. We, therefore, hold that the trial court erred in refusing to give the cautionary instruction. C. Harmless Error Analysis Having concluded that the trial court erred in refusing to caution the jury about convicting based on the uncorroborated testimony of accomplices, we now consider, as is required, whether that error was harmless. See Code § 8.01-678; Clay v. Commonwealth, 262 Va. 253, 259 (2001); Dandridge v. Commonwealth, 72 Va. App. 669, 685 (2021). “Non-constitutional error is harmless if other evidence of guilt is so ‘overwhelming’ and the error so insignificant by comparison that we can conclude the error ‘failed to have any “substantial influence” on the verdict.’” Dandridge, 72 Va. App. at 685 (quoting Lienau v. Commonwealth, 69 Va. App. 254, 270 (2018)). In a case such as this, where the trial court erred in refusing a cautionary instruction due to a lack of evidence corroborating accomplice testimony, there cannot be such overwhelming other evidence of guilt “that we can conclude the error failed to have any substantial influence on the verdict.” Id. Denial of the cautionary instruction was not harmless error and remand for a new trial, thus, is appropriate. 4 III. CONCLUSION Viewed in the light most favorable to the Commonwealth, the record contained sufficient evidence to convict Holmes of two counts of racketeering. Moreover, Jury Instructions I and Q 4 Although in Dillard the Court noted that its “research ha[d] not disclosed a single instance where a conviction was reversed because of a failure to grant a cautionary instruction,” that is no longer the case. 216 Va. at 822. Shortly after Dillard was decided the Supreme Court reversed and remanded a case solely based on the trial court’s error in refusing a cautionary instruction. See Smith v. Commonwealth, 218 Va. 455, 457 (1977) (“[T]he accomplice’s testimony was not sufficiently corroborated, and it was error to refuse a cautionary instruction. Accordingly, the judgment of the trial court will be reversed, and the case will be remanded for a new trial.”); Ward v. Commonwealth, 219 Va. 921, 926 (1979) (“For error in failing to grant the cautionary instruction, the judgment will be reversed and the case will be remanded for a new trial if the Commonwealth be so advised.”). The Supreme Court did not engage in harmless error analysis when reversing Smith and Ward. - 19 - were properly refused by the trial court as duplicative of other granted instructions. Nevertheless, the trial court erred in finding that the accomplice testimony of Hartless, Verdi, and Roger was sufficiently corroborated when it refused Jury Instruction T. Because this error was not harmless, we reverse and remand for a new trial. Affirmed in part, reversed in part, and remanded. - 20 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488591/	VIRGINIA: In the Court of Appeals of Virginia on Tuesday the 22nd day of November, 2022. Arun Rashid Turay, Appellant, against Record No. 0868-21-3 Circuit Court Nos. CR20000396-00 through CR20000398-00 and CR20000400-00 Commonwealth of Virginia, Appellee. Upon a Petition for Rehearing Before Judges Chaney, Callins and Senior Judge Petty On November 1, 2022 came the appellant, by counsel, and filed a petition praying that the Court set aside the judgment rendered herein on October 18, 2022, and grant a rehearing thereof. On consideration whereof, the petition for rehearing is granted, the opinion rendered on October 25, 2022 is withdrawn, the mandate entered on that date is vacated, and this appeal will be reconsidered by the panel of judges that originally considered the matter. Pursuant to Rule 5A:35(a), the respondent may file an answering brief within 21 days of the date of entry of this order. An electronic version of the brief shall be filed with the Court and served on opposing counsel.1 A Copy, Teste: A. John Vollino, Clerk original order signed by a deputy clerk of the By: Court of Appeals of Virginia at the direction of the Court Deputy Clerk 1 The guidelines for filing electronic briefs can be found at www.courts.state.va.us/online/vaces/resources/guidelines.pdf. COURT OF APPEALS OF VIRGINIA Present: Judges Chaney, Callins and Senior Judge Petty UNPUBLISHED Argued at Lexington, Virginia ARUN RASHID TURAY MEMORANDUM OPINION* BY v. Record No. 0868-21-3 JUDGE WILLIAM G. PETTY OCTOBER 18, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF THE CITY OF WAYNESBORO Paul A. Dryer, Judge Jessica N. Sherman-Stoltz (Sherman-Stoltz Law Group, PLLC, on briefs), for appellant. Liam A. Curry, Assistant Attorney General (Jason S. Miyares, Attorney General, on brief), for appellee. Following conditional guilty pleas, Arun Rashid Turay appeals his convictions for armed burglary with the intent to commit robbery, robbery, use of a firearm in commission of a felony, and felon in possession of a firearm in violation of Code §§ 18.2-90, 18.2-58, 18.2-53.1, and 18.2-308.2. Turay asserts that the trial court erred when it denied his motion to suppress evidence obtained pursuant to a Terry1 stop. For the following reasons, we disagree and affirm the judgment of the trial court. * Pursuant to Code § 17.1-413, this opinion is not designated for publication. 1 Terry v. Ohio, 392 U.S. 1 (1968). BACKGROUND2 Turay and his co-defendant Justice Ahmed Carr filed a joint motion to suppress evidence. 3 At a joint hearing on those motions, Waynesboro Police Sergeant Lemons testified that at 11:30 p.m. on February 17, 2020 he was dispatched to a home in response to a potential burglary. The homeowner had called the police when his home security video system alerted him to three intruders in his home. When Lemons arrived, he spoke with the homeowner and two residents. The homeowner reported that he was missing a firearm. The two residents who sustained injuries informed Lemons that they had been “pistol-whipped” by one of the three intruders.4 They described their assailants as “three Black males who were all armed, and that they were wearing black.” Lemons transmitted over the radio that responding officers should be on the lookout (BOLO) for “three black males wearing black.” Augusta County Sheriff’s Deputy Stroop was patrolling near Waynesboro when he heard the dispatch. He stopped by the crime scene and spoke with one of the Waynesboro officers outside who informed him that there had been “people inside the house that weren’t supposed to be there, a firearm was taken, and then they fled on foot.” Stroop continued his patrol of the area, and he heard the BOLO description over the radio. He soon encountered two men, later identified as Turay and 2 “In reviewing the denial of a motion to suppress, we consider the facts in the light most favorable to the Commonwealth, the prevailing party” below. Hairston v. Commonwealth, 67 Va. App. 552, 560 (2017) (internal quotation marks omitted) (quoting Malbrough v. Commonwealth, 275 Va. 163, 168 (2008)). 3 In a separate appeal decided this day, Turay’s co-defendant raised the same issue. Carr v. Commonwealth, No. 1136-21-3 (Va. Ct. App. Oct. 18, 2022). Because these cases were heard and decided together in the trial court, we will refer to evidence relating to both appellants in this opinion. 4 The firearm was later recovered in the bedroom, where a resident had taken it while waiting for officers to arrive. -2- Carr, walking down the road in a nearby residential neighborhood. Stroop noted that it was dark, late in the evening, and cold and that there were not a lot of other people on the street. Meanwhile, Lemons viewed the homeowner’s security video footage. While watching the video, Lemons dispatched a second, more detailed BOLO. The second BOLO described the suspects as “Black males, with black hoodies, with the black pants with the red stripes—and the third individual, who had . . . a black and white striped hoodie, . . . [and] it looked like a leopard-print pajama-type bottom.” In the time between Lemons’ first BOLO and his watching the video of the incident, dispatch notified him that an Augusta County sheriff’s deputy, later learned to be Stroop, had detained two suspects. At the hearing, Stroop could not recall the details of the description he had heard, but he testified that he did remember that the men “matched the description of what was given out” and that he “remember[ed] saying to [him]self, ‘Hey; that matches the description that I heard over the radio.’”5 Stroop did not recall how many descriptions he may have heard or whether any updates had been provided. Stroop decided to stop the men until the investigating Waynesboro officers could arrive. Because a firearm reportedly was involved and he was alone, Stroop initially detained the pair at gunpoint for his safety.6 Complying with Stroop’s instructions, Turay and Carr put their hands on the hood of his car, and Stroop informed dispatch that he had detained two suspects who matched 5 Stroop testified that prior to the hearing he had reviewed the dispatcher’s notes of the description that was put out by Lemons and that the suspects he detained matched that description. 6 We note that, “[d]uring Terry stops, the police are permitted to use methods of restraint that are reasonable under the circumstances.” Harris v. Commonwealth, 27 Va. App. 554, 563 (1998). On appeal, Turay does not contend that the amount of restraint used by Stroop was unreasonable or that it converted the encounter from a Terry stop to a full, custodial arrest requiring probable cause. He only argues that the initial stop was not supported by reasonable suspicion. -3- the description in the BOLO. Turay and Carr were detained about thirty minutes after the robbery, and Waynesboro police arrived within two minutes of their detention. Turay and Carr were standing in front of the hood of Stroop’s car when Officer Mawyer arrived at the detention site, which he testified was six to ten blocks from the crime scene. Mawyer radioed Lemons to repeat the description of the suspects; after hearing Lemons’ response, Mawyer, with the help of other officers at the scene, placed Turay and Carr in handcuffs. Footage recorded by Mawyer’s body camera was admitted into evidence; it depicted Mawyer’s journey from the crime scene to the detention site. When Lemons arrived, he noticed that Carr was wearing a white t-shirt, grey sweatpants, glasses, and possessed a floral backpack. Turay was wearing black jeans and a black, red-striped jacket that was similar to the black, red-striped pants he observed one of the suspects wearing in the video. Lemons noted that Turay’s jacket was made of a “jogging material,” so it looked to be part of a matching set with the pants he had seen one of the suspects wearing on the video. Waynesboro Officer Cacciapaglia obtained Carr’s consent to search his person and found the victims’ credit cards in his pockets. Lemons then arrested Turay and Carr. The police searched Turay’s backpack incident to his arrest and found bloody clothes and shoes matching those Lemons had seen on the home surveillance video; some keys and other items the victims were missing were also recovered. Turay moved to suppress the evidence. The trial court took the matter under advisement and issued its ruling in a March 24, 2021 letter opinion. The trial court specifically addressed “whether Augusta County Deputy Stroop had the requisite reasonable, articulable suspicion to stop and detain [Turay and Carr].” In considering the issue, the trial court made certain factual findings. It found that Mawyer already was en route to the detention site when “the second description of the suspects is relayed over the radio” so that Stroop heard only the first description—“three black males wearing black”—before detaining Turay -4- and Carr shortly before 11:35 p.m. Turay and Carr, both Black males, were walking down the street in a residential neighborhood late on a cold evening. Based on Mawyer’s body camera video, the trial court concluded that the men had been detained “a distance less than 10 blocks and likely less than six blocks,” and less than a minute’s drive, from the crime scene and that no other people were around. Turay was wearing a black, red-striped sweatshirt7 and black pants. The trial court correctly observed that whether the evidence would be suppressed “hinge[d] on whether or not Deputy Stroop had the requisite reasonable, articulable suspicion to stop and detain the [d]efendants given the totality of the circumstances on the night in question.” Stressing “[t]he confluence of multiple factors of proximity, time, physical description, gender, and racial description[,]” the trial court denied Turay’s and Carr’s motion to suppress, finding that “[g]iven the totality of these facts, it would have been a dereliction of Deputy Stroop’s duties as a law enforcement officer to have ignored the [d]efendants walking down the street without making an investigatory stop.” The trial court rejected Turay’s and Carr’s arguments focused on the discrepancies in the number of men and the specific clothing descriptions, instead finding that the “facts gave Deputy Stroop[] an objective, reasonable suspicion that the [d]efendants may have been involved in the crime that occurred a few blocks away and a few minutes before his encounter with them.” Upon denial of his motion to suppress, Turay entered conditional guilty pleas to armed burglary with the intent to commit robbery, robbery, use of a firearm in commission of a felony, and The trial court’s memorandum opinion characterizes the garment Turay was wearing as 7 a sweatshirt, but the officers characterize the garment as a jacket. For purposes of this opinion, we will refer to it as a jacket. -5- being a felon in possession of a firearm.8 The trial court accepted the pleas and convicted Turay of the charges. On appeal, Turay contends that the trial court erred in denying his motion to suppress because his “Fourth and Fourteenth Amendment Rights were violated when law enforcement, having no reasonable articulable suspicion of criminal activity, stopped and seized him.” He argues that the investigatory stop was premised on nothing more than Stroop’s hunch and was unjustified because the description of the suspects was too vague and not particularized as to him. ANALYSIS I. Standard of Review Turay’s claim that he was seized in violation of the Fourth Amendment presents a mixed question of law and fact that we review de novo on appeal. Murphy v. Commonwealth, 264 Va. 568, 573 (2002). In conducting our review, however, “we defer to the trial court’s findings of ‘historical fact’” unless such findings are “plainly wrong or devoid of supporting evidence.” Barkley v. Commonwealth, 39 Va. App. 682, 690 (2003) (first quoting Davis v. Commonwealth, 37 Va. App. 421, 429 (2002); then citing Mier v. Commonwealth, 12 Va. App. 827, 828 (1991)). In doing so, we are required to “give due weight to the inferences drawn from those facts by resident judges and local law enforcement officers.” McGee v. Commonwealth, 25 Va. App. 193, 198 8 Code § 19.2-254 permits a defendant to enter a conditional guilty plea in certain circumstances. In pertinent part, it provides that [w]ith the approval of the court and the consent of the Commonwealth, a defendant may enter a conditional plea of guilty in a misdemeanor or felony case in circuit court, reserving the right, on appeal from the judgment, to a review of the adverse determination of any specified pretrial motion. If the defendant prevails on appeal, he shall be allowed to withdraw his plea. The terms of Turay’s plea allowed him to appeal the trial court’s denial of his pretrial motion to suppress. -6- (1997) (en banc). On appeal, Turay has the burden to show that, considering the evidence in the light most favorable to the Commonwealth, the trial court’s denial of his suppression motion was reversible error. Murphy, 264 Va. at 573. II. The Fourth Amendment and police-citizen encounters In pertinent part, the Fourth Amendment provides “[t]he right of the people to be secure in their persons . . . against unreasonable searches and seizures, shall not be violated[.]” The Amendment’s protection against unreasonable seizures potentially is implicated whenever a police officer performing his or her duties encounters a citizen. Courts have recognized three basic categories of police-citizen encounters. First, there are communications between police officers and citizens that are consensual and, therefore, do not implicate the fourth amendment. Second, there are brief investigatory stops which must be based on specific and articulable facts which, taken together with rational inferences from these facts, reasonably warrant a limited intrusion. Third, there are highly intrusive, full-scale arrests, which must be based on probable cause. Iglesias v. Commonwealth, 7 Va. App. 93, 99 (1988). Here, there is no dispute that, from its inception, the encounter between Turay, Carr, and Stroop was non-consensual. Similarly, given that Turay only asserts that Stroop lacked reasonable, articulable suspicion to initiate the stop, it is undisputed that, at the relevant time, Stroop’s seizure of Turay did not amount to a full, custodial arrest requiring probable cause. Accordingly, the question before us is whether the trial court erred in concluding that Stroop possessed sufficient reasonable, articulable suspicion to justify a “brief investigatory stop[.]” Id. -7- III. The reasonable, articulable suspicion standard9 As noted above, police, consistent with the Fourth Amendment, may “conduct a brief, investigatory stop when the officer has a reasonable, articulable suspicion that criminal activity is afoot.” Bass v. Commonwealth, 259 Va. 470, 474-75 (2000) (citing Terry v. Ohio, 392 U.S. 1, 30 (1968)). Reasonable suspicion is simply suspicion that is reasonable. It is not something more than suspicion. And it can hardly be called proof. To be sure, the degree of certitude required by reasonable suspicion is “‘considerably less than proof of wrongdoing by a preponderance of the evidence,’ and ‘obviously less demanding than that for probable cause.’” Mason v. Commonwealth, 64 Va. App. 292, 300 (2015) (quoting Perry v. Commonwealth, 280 Va. 572, 581 (2010)), aff’d, 291 Va. 362 (2016), see also Navarette v. California, 572 U.S. 393 (2014). Consequently, “the mere possibility of an innocent explanation does not necessarily exclude a reasonable suspicion that the suspect might be violating the law.” Morris v. City of Va. Beach, 58 Va. App. 173, 183 (2011) (internal quotation marks omitted). To have reasonable suspicion, a police officer need only have a “‘minimal level of objective justification’ for making . . . a stop.” Branham v. Commonwealth, 283 Va. 273, 280 (2012) (quoting I.N.S. v. Delgado, 466 U.S. 210, 217 (1984)). Although the reasonable suspicion must be “particularized” to the person or persons stopped, Whitfield v. Commonwealth, 265 Va. 358, 361 (2003), the standard is such that reasonable suspicion “need not rule out the possibility of innocent conduct,” United States v. Arvizu, 534 U.S. 266, 277 (2002). To be sure, “the principal function of [the] investigation is to resolve that very ambiguity. . . to ‘enable the 9 The Commonwealth and the trial court have cited to our unpublished opinion in Bonilla v. Commonwealth, No. 0424-17-4 (Va. Ct. App. Feb. 20, 2018). While we take no issue with either the reasoning or the conclusion expressed in Bonilla, we do not rely on it in reaching a decision in this appeal. See Kilpatrick v. Commonwealth, 73 Va. App. 172, 195 n.9 (2021); Brandau v. Brandau, 52 Va. App. 632, 639 n.2 (2008) (“Unpublished opinions, of course, have no precedential value and thus do not implicate the interpanel accord doctrine.”). -8- police to quickly determine whether they should allow the suspect to go about his business or hold him to answer charges.’” Morris, 58 Va. App. at 183 (quoting Raab v. Commonwealth, 50 Va. App. 577, 582 (2007) (en banc)). In determining whether a police officer had the “minimal level of objective justification” to justify such a stop, we consider the totality of the circumstances, Bland v. Commonwealth, 66 Va. App. 405, 413 (2016), and “we eschew any ‘divide-and-conquer analysis’ that ignores the ‘totality of the circumstances,’” Shifflett v. Commonwealth, 58 Va. App. 732, 740 (2011). In considering the circumstances of the stop, we consider a police officer’s “experience and specialized training to make inferences from and deductions about the cumulative information available to them that ‘might well elude an untrained person.’” Arvizu, 534 U.S. at 273 (quoting United States v. Cortez, 449 U.S. 411, 418 (1981)). Our analysis, however, is limited to the “facts available to the officer at the moment of the seizure,” Terry, 392 U.S. at 21-22, and does not take into account information learned after the person has been detained.10 “Circumstances we have recognized as relevant . . . include characteristics of the area surrounding the stop, the time of the stop, the specific conduct of the suspect individual, the character of the offense under suspicion, and the unique perspective of a police officer trained and experienced in the detection of crime.” Walker v. Commonwealth, 42 Va. App. 782, 791 (2004) (alteration in original) (quoting Christian v. Commonwealth, 33 Va. App. 704, 714 (2000) (en banc)). “The character of the location and the time at which a person is observed are relevant factors, but they do not supply a particularized and objective basis for suspecting criminal activity on the part of the particular person stopped.” McCain v. Commonwealth, 275 10 Critically, this excludes certain pieces of information from our review. The trial court found that Stroop only had heard the first BOLO at the time of the seizure, and therefore, did not know any of the information transmitted during the subsequent BOLO. Accordingly, any information he learned after the detention is irrelevant to our inquiry. -9- Va. 546, 552 (2008). Nonetheless, “[i]f a person matches the physical description of a criminal suspect, the police have reasonable suspicion to effect a Terry stop of that individual.” Brown v. Commonwealth, 33 Va. App. 296, 307 (2000). IV. Application to this case The question before us is whether the trial court erred in concluding that the facts known to Stroop when he encountered Turay were sufficient to provide Stroop with reasonable, articulable suspicion that he had been involved in criminal activity. Applying the appropriate standard of review, we conclude that the trial court did not err in so concluding. Based on the totality of the evidence and Stroop’s training and experience, the record supports the trial court’s finding that Stroop possessed a reasonable, articulable suspicion of criminal activity to support the investigative stop of Turay. The evidence establishes that Stroop knew that three Black males wearing black had just committed an armed robbery and had left the crime scene on foot. Shortly after leaving the crime scene, Stroop encountered Turay and Carr walking within blocks of the crime scene. It was late on a cold night, and no one else was in the area. Stroop observed that the two men, both Black males, matched the description of the suspects that he had been provided and that Turay was wearing clothing similar to that described. As the trial court found, these circumstances were sufficient to initiate an investigatory stop: “[p]ut simply, ‘police observation of an individual, fitting a police dispatch description of a person involved in a disturbance, near in time and geographic location to the disturbance establishes a reasonable suspicion that the individual is the subject of the dispatch.’” United States v. Mitchell, 963 F.3d 385, 391 (4th Cir. 2020) (quoting United States v. Lenoir, 318 F.3d 725, 729 (7th Cir. 2003)). Turay’s arguments to the contrary require no different result. Although the crime had been perpetrated by three men as opposed to just one or two, it was reasonable for Stroop to - 10 - conclude that a group of robbers might separate upon leaving the scene of their crime, either to help avoid detection or simply because they had differing destinations. Additionally, Stroop did not need to observe any specific suspicious conduct by Turay to stop him; Stroop’s suspicion was sufficiently raised regarding Turay by his knowledge of the crime that had been committed and the description of the suspects he had been provided. Stroop also had no duty to follow-up with Lemons prior to detaining Turay; upon detaining him, Stroop radioed that he had stopped two suspects “matching the description” he had heard, and the responding investigating officers, including Lemons, arrived at his location within minutes. Furthermore, Stroop could detain Turay even though Carr was not wearing any black clothing at the time. Turay and Carr appeared to be companions.11 Both suspects were near the crime scene a short time after the offenses were committed. They matched the description of the suspects—two Black males and one of whom, Turay, was wearing a black jacket. It was reasonable for Stroop to believe that Turay and Carr were together and that a robbery suspect may discard potentially identifying clothing or attempt to change his appearance when he flees the crime scene.12 That it was possible that Turay was not part of the threesome that had perpetrated the crime does not dictate a different conclusion. As we previously have observed, [t]he Fourth Amendment does not require a policeman . . . to simply shrug his shoulders and allow . . . a criminal to escape. On the contrary, Terry recognizes that it may be the essence of good 11 At oral argument Carr’s counsel conceded that Carr and Turay were walking together. 12 The fact that the clothing worn by Turay did not exactly match the original description communicated to Stroop is of no moment. He observed the supposedly armed suspects from his car in the dark of night; he testified on several occasions that, from his viewpoint, the two men matched the description he had received from dispatch. To the extent that he was not entirely correct, any mistake on his part was reasonable. “To be reasonable is not to be perfect, and so the Fourth Amendment allows for some mistakes on the part of government officials, giving them fair leeway for enforcing the law in the community’s protection.” Heien v. North Carolina, 574 U.S. 54, 60-61 (2014) (internal quotation marks omitted). - 11 - police work to adopt an intermediate response. A brief stop of a suspicious individual in order to determine his identity or to maintain the status quo momentarily while obtaining more information, may be most reasonable in light of the facts known to the officer at the time. Christian, 33 Va. App. at 713 (first and second alterations in original) (quoting Adams v. Williams, 407 U.S. 143, 145-46 (1972)). Indeed, “[i]f the policeman were first required to verify all the circumstances of the crime, the opportunity to catch the criminal might be lost.” United States v. Moore, 817 F.2d 1105, 1107 (4th Cir. 1987). Consequently, Turay’s Fourth Amendment rights were not violated when Stroop detained him based on the information he had at the time, and the trial court did not err in denying his motion to suppress. CONCLUSION Because the detaining officer had reasonable, articulable suspicion to detain Turay, we conclude that the trial court did not err in denying his motion to suppress. Accordingly, we affirm the judgment of the trial court. Affirmed. - 12 - Chaney, J., dissenting. For the reasons expressed in the majority opinion in Carr v. Commonwealth, No. 1136-21-3 (Va. Ct. App. Oct 18, 2022), and incorporated herein, decided this day, I respectfully dissent. - 13 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488587/	COURT OF APPEALS OF VIRGINIA Present: Senior Judges Clements, Haley and Petty UNPUBLISHED DAVID ROGER SLATE MEMORANDUM OPINION⁎ v. Record No. 0609-22-3 PER CURIAM NOVEMBER 22, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF MONTGOMERY COUNTY K. Mike Fleenor, Jr., Judge (Courtney Griffin Roberts; Roberts Law PLLC, on brief), for appellant. Appellant submitting on brief. (Jason S. Miyares, Attorney General; Stephen J. Sovinksy, Assistant Attorney General, on brief), for appellee. Following David Roger Slate’s guilty plea, the trial court convicted him of methamphetamine possession. Slate asserts that the trial court erred by finding his plea was made freely, voluntarily, and intelligently and that the evidence was insufficient to support his conviction. He also contends that the trial court abused its discretion by attaching a Fourth Amendment waiver condition to his suspended sentence. Slate’s counsel has moved for leave to withdraw. The motion to withdraw is accompanied by a brief referring to the part of the record that might arguably support this appeal. A copy of that brief has been furnished to Slate with sufficient time for him to raise any matter that he chooses. Slate has not filed a pro se supplemental opening brief. We have reviewed the parties’ pleadings, fully examined the proceedings, and determined the case to be wholly frivolous and wholly without merit as set forth below. Thus, the panel ⁎ Pursuant to Code § 17.2-413, this opinion is not designated for publication. unanimously holds that oral argument is unnecessary. See Code § 17.1-403(ii)(a); Rule 5A:27(a). For the following reasons, we affirm the trial court’s judgment. BACKGROUND On appeal, we recite the facts “in the ‘light most favorable’ to the Commonwealth, the prevailing party in the trial court.” Hammer v. Commonwealth, 74 Va. App. 225, 231 (2022) (quoting Commonwealth v. Cady, 300 Va. 325, 329 (2021)). Doing so requires us to “discard the evidence of the accused in conflict with that of the Commonwealth, and regard as true all the credible evidence favorable to the Commonwealth and all fair inferences to be drawn therefrom.” Cady, 300 Va. at 329 (quoting Commonwealth v. Perkins, 295 Va. 323, 324 (2018)). On March 21, 2022, Slate executed a written plea agreement whereby he entered a guilty plea1 to methamphetamine possession in exchange for the Commonwealth’s agreement to nolle prosequi two other charges. On the same date, Slate completed and signed a four-page written colloquy explaining the consequences of his plea. Slate supplied handwritten responses to thirty-five colloquy questions and placed his initials on each page. In the written plea colloquy, Slate agreed that he had discussed with his attorney the charge and its elements, any possible defenses to the charge, and the Commonwealth’s burden of proof. The written colloquy also confirmed that Slate had discussed his plea with counsel and that he had decided independently to plead guilty. Slate acknowledged in the written colloquy that his plea operated as a waiver of his right to a jury trial, his right against self-incrimination, and his right to confront and cross-examine witnesses. In the colloquy, he denied that his plea had been coerced, 1 The written plea colloquy states that Slate entered a guilty plea under North Carolina v. Alford, 400 U.S. 25 (1970), but the plea recited in the plea agreement and during the plea colloquy in open court was a simple guilty plea. At the plea hearing, Slate stated that he was pleading guilty because he was, in fact, guilty. -2- and he expressed satisfaction with his attorney’s services. Slate acknowledged that he would receive the sentence indicated in the plea agreement if the trial court accepted it. Slate also executed the written plea agreement on March 21, 2022. The plea agreement provided that Slate would be sentenced to three years, with all but one day suspended, on the condition that he remain on supervised probation for three years. The plea agreement also conditioned the suspended sentence on Slate waiving his Fourth Amendment rights pertaining to search and seizure during the period of his supervised probation and suspended sentence under this agreement and, as a condition of any suspended sentences, probation, or post-release supervision period, to consent to any request at any time by a law enforcement or probation officer to search his person, belongings, motor vehicle(s), residence, or any such property in his possession and control, for illegal drugs, contraband, and weapons. On March 21, 2022, Slate appeared before the trial court to enter his plea. The trial court then conducted its own colloquy with him. The trial court confirmed with Slate that he had reviewed the written plea agreement with his attorney and that it contained all the terms of his agreement. Slate agreed that he faced a maximum sentence of ten years, but if the trial court accepted the plea agreement, he would be sentenced in accordance with the plea agreement. Moreover, during his plea colloquy, Slate stated that he had discussed the charge, its elements, and any possible defenses with his attorney, that he understood the charge, and that he had decided to plead guilty because he was, in fact, guilty of the charge. He confirmed that he understood the trial court’s questions, that he was entering his plea freely and voluntarily, and that he wanted the trial court to accept his plea agreement. Slate acknowledged that, if the trial court rejected the plea agreement, he could withdraw his plea and appear before a different judge. After confirming that Slate had no questions, the trial court accepted his plea and found that it was “made freely, -3- voluntarily and intelligently with an understanding of the nature of the charge and the consequences of the plea.” After the trial court accepted Slate’s plea, the Commonwealth proffered the evidence it would have presented at trial. The Commonwealth averred that Deputy Stephens saw Slate throw several objects out of the driver’s window of a car as the officer attempted to perform a traffic stop in Christiansburg. When Slate pulled over, he denied throwing the objects from the vehicle. But when Deputy Stephens and another officer searched the area where Slate had thrown the objects, they found a clear plastic baggy containing a crystal-like substance, a glass bubble smoking device, and a straw. After being advised of his constitutional rights, Slate responded to further questions by stating, “[Y]ou’re going to take me to jail anyways.” Forensic tests determined that the crystal-like substance was methamphetamine. The forensic analysis results were entered into evidence. Slate agreed with the facts proffered and that they were sufficient to prove his guilt. The trial court found that Slate had entered his guilty plea freely, voluntarily, and intelligently, accepted his plea, and entered a finding of guilt. In accordance with the plea agreement, the trial court sentenced Slate to three years’ incarceration, suspended all but one day of the sentence for three years, and placed him on supervised probation for three years. The suspended sentence was conditioned on Slate’s waiver of Fourth Amendment rights “during the period of his suspended sentence under th[e] agreement.” The sentencing order also provided that Slate consented, “as a condition of any suspended sentences, probation, or post release supervision period, . . . to [the] search [of] his person, belongings, motor vehicle(s), residence, or any such property in his possession and control, for illegal drugs, contraband and weapons.” Before imposing sentence, the trial court reiterated that, “in addition to the usual terms and conditions of probation, [Slate would] be waiving [his] Fourth Amendment rights during the period of probation and the period of the suspended sentence.” Slate appeals. -4- ANALYSIS A. Preservation of Assignments of Error Slate concedes that none of his arguments have been preserved for appeal. Nevertheless, he asks that we consider them under the ends of justice exception in Rule 5A:18. The Commonwealth counters that application of the ends of justice exception is not warranted because “Slate stipulated to the facts, pled guilty, and agreed to his sentence, including the Fourth Amendment waiver.” Moreover, the Commonwealth maintains that Slate’s guilty plea waived his right to appeal any non-jurisdictional issues. “The issue of whether a defendant has waived his right of appeal in connection with a plea proceeding ‘is a matter of law[.]’” Delp v. Commonwealth, 72 Va. App. 227, 235 (2020) (quoting United States v. Manigan, 592 F.3d 621, 626 (4th Cir. 2010)). Accordingly, the Court applies a de novo standard of review. Id. “No ruling of the trial court . . . will be considered as a basis for reversal unless an objection was stated with reasonable certainty at the time of the ruling, except for good cause shown or to enable this Court to attain the ends of justice.” Rule 5A:18. “The ‘ends of justice’ exception to Rule 5A:18 is ‘narrow and is to be used sparingly.’” Pearce v. Commonwealth, 53 Va. App. 113, 123 (2008) (quoting Bazemore v. Commonwealth, 42 Va. App. 203, 219 (2004) (en banc)). Whether to apply the ends of justice exception involves two questions: “(1) whether there is error as contended by the appellant; and (2) whether the failure to apply the ends of justice provision would result in a grave injustice.” Commonwealth v. Bass, 292 Va. 19, 27 (2016) (quoting Gheorghiu v. Commonwealth, 280 Va. 678, 689 (2010)). “[T]o show that a miscarriage of justice has occurred, thereby invoking the ends of justice exception, the appellant must demonstrate that he or she was convicted for conduct that was not a criminal offense or the record must affirmatively prove that an element of the offense did not occur.” Quyen Vinh Phan -5- Le v. Commonwealth, 65 Va. App. 66, 74 (2015) (quoting Redman v. Commonwealth, 25 Va. App. 215, 221-22 (1997)). “The burden of establishing a manifest injustice is a heavy one, and it rests with the appellant.” Holt v. Commonwealth, 66 Va. App. 199, 210 (2016) (en banc) (quoting Brittle v. Commonwealth, 54 Va. App. 505, 514 (2009)). The “exception requires proof of an error that was ‘clear, substantial and material.’” West v. Commonwealth, 43 Va. App. 327, 338 (2004) (quoting Herring v. Herring, 33 Va. App. 281, 287 (2000)). “Virginia courts applying the ends-of-justice exception require a defendant to present not only a winning argument on appeal but also one demonstrating that the trial court’s error results in a ‘grave injustice’ or a wholly inexcusable ‘denial of essential rights.’” Winslow v. Commonwealth, 62 Va. App. 539, 546-47 (2013) (quoting Brittle, 54 Va. App. at 513). “Where the record does not affirmatively establish error, we cannot invoke the ends of justice exception to Rule 5A:18.” Smith v. Commonwealth, 59 Va. App. 710, 724 (2012). B. Acceptance of Guilty Plea Slate asserts that the trial court erred by finding that he entered his guilty plea freely, voluntarily, and intelligently because the record is “devoid of any evidence” that he was cognizant of “the relevant collateral consequences of his plea.” Slate does not identify these “relevant collateral consequences” other than to aver, in support of application of the ends of justice exception, that “the record is . . . silent [regarding his] knowledge of the limitations his plea would place on his post-conviction relief options (such as withdrawing the plea).” Because a defendant who enters a guilty plea waives several rights, a “plea of guilty is constitutionally valid only to the extent it is ‘voluntary’ and ‘intelligent.’” Bousley v. United States, 523 U.S. 614, 618 (1998) (quoting Brady v. United States, 397 U.S. 742, 748 (1970)). “Waivers of constitutional rights not only must be voluntary but must be knowing, intelligent acts done with -6- sufficient awareness of the relevant circumstances and likely consequences.” Brady, 397 U.S. at 748. “[A]ccording due process to a defendant’s entry of a guilty plea requires ‘an affirmative showing [on the record] that the waiver embodied in the plea of guilty is intelligently, voluntarily and knowingly made.’” Allen v. Commonwealth, 27 Va. App. 726, 731 (1998) (second alteration in original) (quoting Graham v. Commonwealth, 11 Va. App. 133, 139 (1990)). Slate never objected to the terms of the plea agreement or attempted to withdraw his guilty plea, either before or after sentencing. In addition to the written plea agreement and written colloquy Slate initialed and signed, the trial court conducted an extensive colloquy with him that affirmatively showed that he entered his guilty plea knowingly, voluntarily, and intelligently. Slate acknowledged that he discussed with his attorney the charge against him, including its elements, and any possible defenses. He also stated that he was satisfied with his legal representation and that he had no questions for the trial court. Thus, we conclude that “the record does not affirmatively establish error,” and therefore, application of the ends of justice exception is not warranted. Smith, 59 Va. App. at 724. Accordingly, Rule 5A:18 bars our consideration of Slate’s argument that he did not enter his guilty plea knowingly, voluntarily, and intelligently. C. Sufficiency of the Evidence “When reviewing the sufficiency of the evidence, ‘[t]he judgment of the trial court is presumed correct and will not be disturbed unless it is plainly wrong or without evidence to support it.’” McGowan v. Commonwealth, 72 Va. App. 513, 521 (2020) (alteration in original) (quoting Smith v. Commonwealth, 296 Va. 450, 460 (2018)). “In such cases, ‘[t]he Court does not ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’” Id. (alteration in original) (quoting Secret v. Commonwealth, 296 Va. 204, 228 (2018)). “Rather, the relevant question is whether ‘any rational trier of fact could have found the essential elements of the -7- crime beyond a reasonable doubt.’” Vasquez v. Commonwealth, 291 Va. 232, 248 (2016) (quoting Williams v. Commonwealth, 278 Va. 190, 193 (2009)). “If there is evidentiary support for the conviction, ‘the reviewing court is not permitted to substitute its own judgment, even if its opinion might differ from the conclusions reached by the finder of fact at the trial.’” McGowan, 72 Va. App. at 521 (quoting Chavez v. Commonwealth, 69 Va. App. 149, 161 (2018)). Slate asserts that the trial court erred by finding the evidence was sufficient to prove he possessed methamphetamine. He contends that the Commonwealth’s proffer failed to prove that the methamphetamine recovered by law enforcement officers was, in fact, the item they saw Slate discard. Although Slate concedes he did not challenge the sufficiency of the evidence below, he asks that we consider his argument under the ends of justice exception because the Commonwealth’s evidence failed to prove his guilt. We decline to do so. “A voluntary and intelligent guilty plea is a ‘waiver’ of all non-jurisdictional defects that occurred before entry of the plea.” Trevathan v. Commonwealth, 297 Va. 697, 697 (2019). As Slate’s sufficiency argument does not dispute the trial court’s jurisdiction, his plea waived his sufficiency challenge. See Perry v. Commonwealth, 33 Va. App. 410, 413 (2000) (holding that by “freely and intelligently entering” an Alford plea of guilty, the defendant “waived his right to appeal the issue of whether the evidence was sufficient to prove beyond a reasonable doubt that he was guilty of th[e] charge”). Moreover, to demonstrate that a miscarriage of justice has occurred, “[i]t is never enough for the defendant to merely assert a winning argument on the merits—for if that were enough[,] procedural default ‘would never apply, except when it does not matter.’” Winslow, 62 Va. App. at 546 (quoting Alford v. Commonwealth, 56 Va. App. 706, 710 (2010)). The record demonstrates that Slate knowingly, intelligently, and voluntarily pleaded guilty to possession of the methamphetamine, that he discarded objects from his vehicle as the police pursued him, and that an item recovered in the area where he discarded the objects was determined -8- to be methamphetamine. Accordingly, because we conclude that the record does not warrant application of the ends of justice exception to Rule 5A:18, we decline to consider Slate’s challenge to the sufficiency of the evidence. D. Fourth Amendment Waiver—Sentence Slate contends that the trial court abused its discretion by conditioning his suspended sentence on a waiver of his Fourth Amendment rights. He stresses that the Commonwealth proffered no evidence supporting the inclusion of the condition and did not suggest that Slate’s criminal record justified it. Slate asserts that he did not knowingly and voluntarily waive his Fourth Amendment rights and that such a waiver was not reasonable under the circumstances. He admits that he has not preserved his argument, but again, asks that we consider it under the ends of justice exception because the alleged error “infringes on [his] fundamental constitutional rights.” Slate specifically agreed in the written plea agreement to the sentence and the conditions attached to his suspended sentence. “A party may not approbate and reprobate by taking successive positions in the course of litigation that are either inconsistent with each other or mutually contradictory.” Cangiano v. LSH Bldg. Co., 271 Va. 171, 181 (2006). “The doctrine protects a basic tenet of fair play: No one should be permitted, in the language of the vernacular, to talk through both sides of his mouth.” W. Refin. Yorktown, Inc. v. Cnty. of York, 292 Va. 804, 826 (2016) (quoting Wooten v. Bank of Am., N.A., 290 Va. 306, 310 (2015)). “The approbate-reprobate doctrine is broader and more demanding than Rule 5A:18.” Alford, 56 Va. App. at 709. Thus, a defendant does not suffer a “grave injustice” when he concurs with or invites the trial court’s ruling. Id. As discussed above, the record demonstrates that Slate entered his guilty plea and the conditions attached to it knowingly and voluntarily. He specifically agreed to the Fourth Amendment waiver condition in his suspended sentence and never sought to withdraw his guilty -9- plea. Moreover, it is well established that a defendant may waive his Fourth Amendment rights in a plea agreement during the probation period. See Anderson v. Commonwealth, 256 Va. 580, 585-86 (1998); cf. Murry v. Commonwealth, 288 Va. 117, 129-30 (2014) (imposition of indefinite waiver of Fourth Amendment rights as condition of probation an abuse of discretion where defendant did not agree to waiver as part of plea agreement). We therefore hold that application of the ends of justice exception is not warranted and that Slate’s argument is not properly before us. Rule 5A:18. CONCLUSION Accordingly, we affirm the trial court’s judgment and grant the motion for leave to withdraw. See Anders v. California, 386 U.S. 738, 744 (1967). This Court’s records shall reflect that David Roger Slate is now proceeding without the assistance of counsel in this matter and is representing himself on any further proceedings or appeal. Affirmed. - 10 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488594/	COURT OF APPEALS OF VIRGINIA Present: Judges Beales, Malveaux and Causey PUBLISHED Argued at Salem, Virginia PETER TIMOTHY GIONIS OPINION BY v. Record No. 1197-21-3 JUDGE RANDOLPH A. BEALES NOVEMBER 22, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF ROCKINGHAM COUNTY Clark A. Ritchie, Judge Caleb J. Routhier (Miller, Earle & Shanks, PLLC, on briefs), for appellant. Rosemary V. Bourne, Senior Assistant Attorney General (Jason S. Miyares, Attorney General, on brief), for appellee. Peter Timothy Gionis appeals an order of the Circuit Court of Rockingham County convicting him of petit larceny, third or subsequent offense, under Code §§ 18.2-103 and 18.2-104. Gionis raises two assignments of error on appeal. First, he contends that the trial court “erred by refusing to treat the crime as a misdemeanor.” Second, he contends that the trial court “erred by declining to overturn Ruplenas v. Commonwealth[, 221 Va. 972 (1981)].” I. BACKGROUND On December 21, 2020, a grand jury issued an indictment against Peter Timothy Gionis for stealing merchandise “having a value of less than $500.00 and belonging to Sheetz” on or about May 29, 2020. According to the indictment, Gionis “ha[d] been convicted two or more times previously of larceny offenses or of offenses deemed or punishable as larceny.” Consequently, Gionis was charged with a Class 6 felony pursuant to Code § 18.2-104. The same day the indictment was issued, Gionis appeared before the Circuit Court of Rockingham County asking for a continuance until January 21, 2021. On January 21, 2021, Gionis rejected a plea agreement and decided to proceed with a jury trial. The trial court set a hearing for June 7, 2021. At the hearing on June 7, 2021, the trial court set a jury trial for July 22, 2021. However, on July 1, 2021, the trial court granted another motion to continue by Gionis and set a new trial date for August 17, 2021. On July 16, 2021, Gionis filed a motion in limine asking the trial court to treat his crime as misdemeanor larceny instead of as felony larceny because, effective July 1, 2021, the General Assembly had repealed Code § 18.2-104. The trial court held “that the law in existence at the time of the alleged crime controls the case.” The trial judge explained that “[t]here is no language in the repeal statute that makes the repeal retroactive. The change in this case and the law seems to apply to the substantive rights of the parties.” The trial court declined to ignore Ruplenas, and, of course, had no authority to overrule it. It also found that the Commonwealth did not consent to using the revised statute. Consequently, the trial court denied Gionis’s motion in limine and then scheduled the jury trial for October 21, 2021. Gionis later entered an Alford guilty plea to the larceny pursuant to North Carolina v. Alford, 400 U.S. 25 (1970), and conditioned his plea upon his right to appeal.1 Code § 19.2-254. The trial court convicted Gionis upon his guilty plea and sentenced him pursuant to his plea agreement. Gionis now appeals to this Court. 1 Under Code § 19.2-254, the General Assembly has authorized pleas of guilty to be conditioned on “a review of the adverse determination of any specified pretrial motion” on appeal. Although this statute does not explicitly reference Alford guilty pleas pursuant to North Carolina v. Alford, 400 U.S. 25 (1970), this Court has previously held that an appellant who entered an Alford guilty plea “may appeal [a] decision” when the appellant’s “plea agreement specified that he could appeal the circuit court’s decision” on a particular issue. Brown v. Commonwealth, 68 Va. App. 58, 66-67 (2017). Therefore, Gionis’s Alford guilty plea does not bar his appeal. See e.g., Carroll v. Commonwealth, 280 Va. 641, 651-52 (2010) (holding that an Alford plea is treated functionally the same as a guilty plea in further criminal proceedings). -2- II. ANALYSIS On appeal, Gionis argues that the trial court erred in convicting him of larceny, third or subsequent offense—a felony—instead of simple misdemeanor larceny. He argues that he could no longer be convicted of larceny, third or subsequent offense, under Code §§ 18.2-103 and 18.2-104 because the General Assembly had repealed Code § 18.2-104 before he was convicted. Gionis makes this argument even though the statute was still in full force and effect at the time that he committed the offense and at the time criminal proceedings against him began. Consequently, resolution of this case turns on whether the repeal of Code § 18.2-104 affected the Commonwealth’s prosecution of Gionis by retroactively causing that he could no longer be convicted of a felony—only a misdemeanor. In deciding this case, we rely on Code § 1-239 and we review general principles regarding the retroactive application of statutes as stated by the Supreme Court of Virginia. See e.g., Appalachian Power Co. v. State Corp. Comm’n, ___ Va. ___, ___ (Aug. 18, 2022); Bell ex rel. Bell v. Casper ex rel. Church, 282 Va. 203, 213 (2011); Berner v. Mills, 265 Va. 408, 413 (2003); Adams v. Alliant Techsystems, Inc., 261 Va. 594, 599 (2001); Ruplenas, 221 Va. at 977-78; Shilling v. Commonwealth, 4 Va. App. 500, 507 (1987) (“Every reasonable doubt is resolved against a retroactive operation of a statute, and words of a statute ought not to have a retrospective operation unless they are so clear, strong and imperative that no other meaning can be annexed to them.”). A. Standard of Review The question of whether the General Assembly’s repeal of Code § 18.2-104 has retroactive effect on this case presents a question of law which this Court reviews de novo. Green v. Commonwealth, 75 Va. App. 69, 76 (2022). We conduct our analysis taking into account well-established principles of statutory construction. “The Virginia Supreme Court has long held that ‘when analyzing a statute, we must assume that “the legislature chose, with care, -3- the words it used . . . and we are bound by those words as we [examine] the statute.”’” Doulgerakis v. Commonwealth, 61 Va. App. 417, 420-21 (2013) (first alteration in original) (quoting City of Va. Beach v. ESG Enters., 243 Va. 149, 153 (1992)). Consequently, we “apply[] the plain meaning of the words unless they are ambiguous or [doing so] would lead to an absurd result.” Wright v. Commonwealth, 278 Va. 754, 759 (2009). In considering the meaning of particular language in context, “[w]ords in a statute should be interpreted, if possible, to avoid rendering [other] words superfluous.” Cook v. Commonwealth, 268 Va. 111, 114 (2004); see Epps v. Commonwealth, 47 Va. App. 687, 714 (2006) (en banc) (requiring a court to “giv[e] to every word and every part of the statute, if possible, its due effect and meaning” (quoting Posey v. Commonwealth, 123 Va. 551, 553 (1918))), aff’d, 273 Va. 410 (2007). B. Code § 1-239 Applies to the Repeal of a Statute The statute under which Gionis was convicted, and the subject of his first assignment of error, is Code § 18.2-104 (repealed 2021). Prior to July 1, 2021, this statute provided that a third (or subsequent) conviction for petit larceny was punishable as a Class 6 felony. Former Code § 18.2-104 (2014 Replacement Volume). In February 2021, the General Assembly passed and enrolled House Bill 2290 (“HB 2290”). After approval by the Governor that bill was published as Chapter 192 in the “2021 Virginia Acts of the General Assembly, Special Session I.” The entirety of its substantive text reads, “Be it enacted by the General Assembly of Virginia: 1. That § 18.2-104 of the Code of Virginia is repealed.” 2021 Va. Acts, Spec. Sess. I ch. 192. The repeal of Code § 18.2-104 became effective July 1, 2021. See Code § 1-214(B); Article IV, -4- Section 13, of the Virginia Constitution.2 By repealing this statute, the General Assembly removed the enhanced penalties for subsequent larceny convictions provided for in that statute. Code § 18.2-104 was the law in effect both at the time that Gionis committed larceny and at the time he was indicted. However, it was repealed before Gionis was actually convicted. Consequently, we are left to determine whether the repeal of Code § 18.2-104 had an immediate or “retroactive” effect on Gionis’s pending case such that he could no longer be convicted under Code § 18.2-104. See Somers v. Commonwealth, 97 Va. 759, 761 (1899); Street v. Commonwealth, 75 Va. App. 298, 310-11 (2022); see also McCarthy v. Commonwealth, 73 Va. App. 630, 647-49 (2021). In doing so, we apply Code § 1-239 and review general principles of retroactivity. Code § 1-239 generally prevents any court from interpreting a repeal as having a retroactive effect. However, Code § 1-239 only applies to new acts of the General Assembly. During oral argument before this Court, the question arose whether the repeal of Code § 18.2-104 was such a “new act” because it simply removed from, rather than added to, the Code. Code § 1-239 provides: No new act of the General Assembly shall be construed to repeal a former law, as to any offense committed against the former law, or as to any act done, any penalty, forfeiture, or punishment incurred, or any right accrued, or claim arising under the former law, or in any way whatever to affect any such offense or act so committed or done, or any penalty, forfeiture, or punishment so incurred, or any right accrued, or claim arising before the new act of the General Assembly takes effect; except that the proceedings thereafter held shall conform, so far as practicable, to the laws in force at the time of such proceedings; and if any penalty, 2 “All laws enacted at a special session of the General Assembly . . . shall take effect on the first day of the fourth month following the month of adjournment of the special session at which they were enacted, unless a subsequent date is specified.” Code § 1-214(B). The 2021 Special Session I in which HB 2290 was passed adjourned sine die on March 1, 2021. http://dls.virginia.gov/pubs/calendar/cal2021_specialsession.pdf (last visited Nov. 21, 2022); 2021 Va. Acts, Spec. Sess. I, Volume I, Title Page. Therefore, given the plain language of Code § 1-214, Code § 18.2-104 took effect on July 1, 2021. -5- forfeiture, or punishment be mitigated by any provision of the new act of the General Assembly, such provision may, with the consent of the party affected, be applied to any judgment pronounced after the new act of the General Assembly takes effect. (Emphasis added). HB 2290 certainly bears the marks of a “new act of the General Assembly,” as described in Code § 1-239. Like all bills passed by the General Assembly and approved by the Governor, HB 2290 was published in the Acts of Assembly, and the General Assembly identified HB 2290 as an “act of the General Assembly” when it included the following language in the preamble of HB 2290 before enrolling it for approval by the Governor: “An Act to repeal § 18.2-104 . . . .” (Emphasis added).3 Other provisions of the Code of Virginia also show that the General Assembly has defined “acts” to include legislative actions broader than merely those bills which are codified. See Code § 1-214 (delineating between “laws” and varieties of “acts”). In addition, the Supreme Court of Virginia has also acknowledged that even quasi-legislative actions performed by a legislative body can be considered acts. See also Blankenship v. City of Richmond, 188 Va. 97, 103-04, 106 (1948) (referring to both legislative actions and quasi-judicial actions as “act[s]”). For these reasons, we conclude that a “new act of the General Assembly” under Code § 1-239 does include a legislative action that simply repeals a statute in full.4 Given that HB 2290, which 3 Such language was not a portion of the enacting clause and is therefore merely persuasive. See Renkey v. Cnty. Bd. of Arlington Cnty., 272 Va. 369, 373 (2006) (“This Court has stated ‘[t]he preamble to a statute is no part of it and cannot enlarge or confer powers or control the words of the act unless they are doubtful or ambiguous.’” (quoting Commonwealth v. Ferries Co., 120 Va. 827, 831 (1917))). 4 In addition, this Court has previously held that Code § 1-239 applies to an act of the General Assembly that repeals a statute. Commonwealth v. Murphy, No. 0596-21-3, slip op. at 12 (Va. Ct. App. Oct. 26, 2021) (“[D]espite the recent repeal of Code § 46.2-357, the Commonwealth may proceed with its prosecution under Code § 46.2-357 due to the language of Code § 1-239.” “[T]he expansive language of Code § 1-239 mandat[es] that repeal does not ‘in -6- repealed Code § 18.2-104, is such a “new act,” Code § 1-239 therefore makes clear that the repeal of Code § 18.2-104 is a new act that—absent explicit language in the act stating otherwise—must be applied prospectively, not retroactively. C. Applying Code § 1-239 to this Case and Reviewing General Principles of Retroactivity Code § 1-239 generally prohibits this Court from construing new acts of the General Assembly to apply to cases where proceedings have already begun. Green, 75 Va. App. at 85-86 (“When statutory amendments become effective that would affect a pending matter and the amended statute does not provide that it applies retroactively, courts should apply the law that was in effect before the statutory amendments took effect unless the plain language of the amended statute shows a contrary intent.” (citing Washington v. Commonwealth, 216 Va. 185, 193 (1975))); see also Ferguson v. Ferguson, 169 Va. 77, 85 (1937). The word “proceedings” is “broad enough to cover any act, measure, step or all steps in a course taken in conducting litigation, civil or criminal.” Abdo v. Commonwealth, 218 Va. 473, 478 (1977) (citing Sigmon v. Commonwealth, 200 Va. 258 (1958)). In addition, when the question is when the triggering event occurred, there is no need to determine whether the triggering event would be from the moment the offense was committed or from when proceedings prosecuting the offense began when the result in answer to that question would be the same. Green, 75 Va. App. at 84 n.4 (“Regardless of whether the triggering event is the probation violation itself or the instituting of revocation proceedings in circuit court, the result in this particular case would be the same under either scenario.”). any way whatever affect any . . . offense’ committed against the former law.”). However, given that the decision in Murphy was an unpublished memorandum opinion, it constitutes only nonbinding, persuasive authority. See Rule 5A:1(f) (stating that unpublished opinions can be “informative, but shall not be received as binding authority”); Christian v. Commonwealth, 59 Va. App. 603, 609 (2012). -7- Here, this litigation involving the criminal prosecution of Gionis was well along by the time the repeal of Code § 18.2-104 took effect on July 1, 2021. Gionis committed the subject offense on May 29, 2020. A grand jury issued an indictment against Gionis on December 21, 2020, and that same day Gionis asked for a continuance until January 21, 2021, for the “purpose(s) of Disposition.” Proceedings continued, and on June 7, 2021, the trial court set a jury trial for July 22, 2021. Gionis again made a motion to continue, which the trial court granted. Gionis ultimately pleaded guilty on October 21, 2021. The fact that the trial itself had not yet occurred by July 1, 2021, does nothing to negate the circumstance that criminal proceedings were already well underway against Gionis on the date the repeal of Code § 18.2-104 became effective. Given that both the criminal offense and the proceedings here against Gionis commenced before the repeal of Code § 18.2-104 went into effect, the plain language of Code § 1-239 prevents this Court from considering the repeal of Code § 18.2-104 as being effective in this prosecution against Gionis. D. The Nature of Procedural and Substantive Rights and Code § 1-239’s Exceptions Both this Court and the Supreme Court recognize “the fundamental principles of statutory construction that retroactive laws are not favored, and that a statute is always construed to operate prospectively unless a contrary legislative intent is manifest.” Berner, 265 Va. at 413 (citing Adams, 261 Va. at 599); McIntosh v. Commonwealth, 213 Va. 330, 331-32 (1972); Duffy v. Hartsock, 187 Va. 406, 419 (1948); see Washington, 216 Va. at 193 (“The general rule is that statutes are prospective in the absence of an express provision by the legislature.” (citing Burton v. Seifert Plastic Relief Co., 108 Va. 338, 350-51 (1908))); McCarthy, 73 Va. App. at 647. In addition, “when a statute is amended while an action is pending, the rights of the parties are to be decided in accordance with the law in effect when the action was begun, unless the amended -8- statute shows a clear intention to vary such rights.” Appalachian Power Co., ___ Va. at ___ (quoting Washington, 216 Va. at 193). There are two ways to overcome the strong presumption against retroactive application. Montgomery v. Commonwealth, 75 Va. App. 182, 190 (2022). “First, a statute may apply retroactively when the General Assembly uses explicit terms detailing the retroactive effect of the legislation. Second, where a law affects procedure only, instead of vested or substantive rights, the statute may ‘be given retroactive effect.’” Id. (quoting Sargent Elec. Co. v. Woodall, 228 Va. 419, 424 (1984) (internal citation omitted)); McCarthy, 73 Va. App. at 647. We address each of these in turn. First, the General Assembly provided no language indicating it intended to give the repeal of Code § 18.2-104 retroactive effect. The legislature could certainly have included language in HB 2290 that manifested a clear intent that the repeal would be effective immediately and retroactively—or it could have provided that the repeal take effect at a time other than the statutorily prescribed effective date for newly enacted legislation. However, the General Assembly did not do so. City of Charlottesville v. Payne, 299 Va. 515, 531 (2021) (“[T]he General Assembly knows how to make its intent manifest that a statute has retroactive application.”). Any such language is nowhere to be found in the legislation repealing the statute. See Shilling, 4 Va. App. at 508 (construing a statute regarding conspiracy, this Court stated, “We find no words in Code § 18.2-23.1 which we could construe as legislative intent to override the presumption that new laws are to be prospective in their operation.”). Therefore, no language or action of the General Assembly, in this case, overcomes the presumption that the repeal of Code -9- § 18.2-104 has prospective effect only.5 Holding otherwise “would require this Court to add language to the statute the General Assembly has not seen fit to include, an exercise in which the Court is not free to engage.” Green, 75 Va. App. at 82 (quoting Holsapple v. Commonwealth, 266 Va. 593, 599 (2003); see also Doulgerakis, 61 Va. App. at 419 (noting that “we determine the legislative intent from the words used in the statute”). Second, laws may have what we have called “retroactive” application if they are procedural, that is if they “prescribe[ ] methods of obtaining redress or enforcement of rights.” Shiflet v. Eller, 228 Va. 115, 120 (1984); Montgomery, 75 Va. App. at 190, 198. In other words, when a change in the law affects only procedural rights “the law in effect when the cause of action arose does not govern the procedural aspects of a case.” Montgomery, 75 Va. App. at 191 n.7. Instead, the procedural aspects of the case are governed by “the law in effect when the procedure itself takes place.” Id. Conversely, a law that affects substantive rights has no such retroactive effect, and “[a] law affects substantive rights if it ‘deals with [the] creation of duties, rights, and obligations.’” McCarthy, 73 Va. App. at 650 (quoting Shiflet, 228 Va. at 120). Stated differently, “a law is ‘substantive . . . if it alters the range of conduct or the class of persons’ that is punishable under law.” Id. (quoting Schriro v. Summerlin, 542 U.S. 348, 353 (2004)). 5 Gionis contends that the total repeal of a statute, as occurred here, is itself evidence the General Assembly intended the change to apply retroactively. This was the traditional rule in Virginia before 1849. As expounded by the Virginia Supreme Court in 1817 in Scutt v. Commonwealth, 4 Va. 54, 56 (Va. Gen. Ct. 1817), the total repeal of a law would render it no longer in force and thus “no proceedings could now be had for any offence committed before its repeal, because the Act did not authorise them.” Although the Virginia Supreme Court has not expressly overturned Scutt, in its 1981 Ruplenas decision it considered this common law rule abrogated by the passage of Code § 1-239’s predecessor (Code 1849, Title 9, ch. 16, § 18). Ruplenas, 221 Va. at 975-76. Indeed, Code § 1-239’s expansive language mandates that repeal does not “in any way whatever affect any . . . offense” committed against the former law, and, therefore, “Repeal simply has no bearing on our determination of legislative intent in this case.” Murphy, slip op. at 12. - 10 - In McCarthy, this Court determined that a statutory amendment was substantive when it removed a criminal punishment for certain conduct. Id. Applying the foregoing principles, the change now before us is substantive because it reduces the criminal punishment for certain conduct. In other words, the repeal affects substantive rights because it eliminated a group or class of felony for those who had committed a third or subsequent larceny offense. Id. Given that the repeal of Code § 18.2-104 affects a substantive right, the repeal of Code § 18.2-104 cannot be given retroactive effect by either our general principles of statutory construction noted supra or by the exception to Code § 1-239 regarding a solely procedural right. Id. at 648 n.9; see Morency v. Commonwealth, 274 Va. 569, 576-77 (2007); Smith v. Commonwealth, 219 Va. 455, 476 (1978). Even if an act affects substantive rights, a defendant can still obtain a retroactive application of a new act under Code § 1-239’s consent exception. Code § 1-239 provides, “and if any penalty, forfeiture, or punishment be mitigated by any provision of the new act of the General Assembly, such provision may, with the consent of the party affected, be applied to any judgment pronounced after the new act of the General Assembly takes effect.” The Supreme Court has interpreted this provision to require consent by both parties to proceed under the new law before the new penalty can be imposed. Ruplenas, 221 Va. at 978 (“[T]he penalty in existence at the time of the offense should be applied unless the Commonwealth first elects to proceed under the new statute and obtains the consent of the defendant to do so.”); see also Green, 75 Va. App. at 83-84. Here, the Commonwealth never consented, and it never attempted to proceed under the new act. In fact, in opposition to Gionis’s motion in limine, the Commonwealth not only did not consent but also actually argued below against the retroactive application of the repeal of Code § 18.2-104, and the absence of an agreement between the parties to proceed under the repeal foreclosed the possibility of reducing the classification of - 11 - Gionis’s offense from a felony to a misdemeanor. Ruplenas, 221 Va. at 977 (“Without the concurrence of both parties the previous penalty must apply.” (citing Code § 1-239)); Green, 75 Va. App. at 86. Therefore, Gionis cannot rely on Code § 1-239’s consent exception to mitigate his penalty or punishment in this case.6 Ruplenas, 221 Va. at 977-78 (citing Abdo, 218 Va. at 478). For all of these reasons, we hold that the trial court did not err in applying the law in existence at the time Gionis committed the offense and when the criminal proceedings against him began.7 See id. E. The Trial Court Did Not Err by Declining to Overturn Ruplenas Finally, Gionis ascribes error to the trial court for “declining to overturn Ruplenas v. Commonwealth.” As a decision of the Supreme Court of Virginia, Ruplenas was binding on the trial court and controlled the resolution of the issue. Likewise, “[we] are bound by the decisions 6 Furthermore, a contrary holding in this case would run headlong into the serious practical concerns expressed by the Supreme Court in Ruplenas that “[a] contrary rule might encourage dilatory tactics and procrastination which would hamper the judicial process” and that “two or more offenses occurring at the same time could conceivably receive different penalties depending upon fortuitous circumstances as to when the cases come to trial.” Ruplenas, 221 Va. at 978; Green, 75 Va. App. at 84-85. “The requirement that both parties consent to proceed under the new law is necessary to preclude the kind of gamesmanship that would be incentivized by allowing a brief continuance to effectively change the entire outcome.” Green, 75 Va. App. at 84-85. 7 This case does not require the Court to distinguish between the penalty in existence at the time Gionis committed the offense and the penalty in existence when the proceedings in the criminal prosecution against him began. The law was actually the same at the time of both events in this case now before us. Regardless of whether the triggering event is the offense itself or the instituting of the criminal prosecution, the result in this particular case would be the same under either scenario. Judicial restraint dictates that we do not need to reach the question of which is the actual triggering event date because each of these dates occurs before July 1, 2021. Therefore, we refrain from weighing in on that particular question, given that the answer would have been the same in either scenario and would have no effect on our analysis. As the Supreme Court has often stated, “[T]he doctrine of judicial restraint dictates that we decide cases ‘on the best and narrowest grounds available.’” Butcher v. Commonwealth, 298 Va. 392, 396 (2020) (quoting Commonwealth v. White, 293 Va. 411, 419 (2017)). - 12 - of the Supreme Court of Virginia and are without authority to overrule [it].” O’Malley v. Commonwealth, 66 Va. App. 296, 301 (2016) (quoting Roane v. Roane, 12 Va. App. 989, 993 (1991)); Vay v. Commonwealth, 67 Va. App. 236, 258 n.6 (2017). Indeed, in his amended opening brief, Gionis concedes that the “Court of Appeals does not have the authority to overturn Ruplenas.” Consequently, and almost needless to say, the trial court did not err in applying Ruplenas when deciding this case. Therefore, for all of the reasons noted supra, we hold that the trial court did not err in convicting Gionis of petit larceny, third or subsequent offense—in accordance with the law that was in effect when Gionis committed the offense and also the law that was in effect when the criminal proceedings against Gionis began. III. CONCLUSION The repeal of Code § 18.2-104 involves a substantive right to be free from a harsher penalty for subsequent larceny convictions. The legislation repealing Code § 18.2-104 did not include any language expressing a legislative intent to make the repeal effective retroactively— rather than simply prospectively, which is the presumption. The General Assembly did not even put an emergency clause in the legislation to attempt to move up its effective date. Because there was no such substantive right at the time of the offense or when criminal proceedings began against Gionis, we hold that the trial court did not err in denying Gionis’s motion to consider his offense a misdemeanor. In addition, the trial court, of course, certainly did not err in declining to overrule Ruplenas, which is binding Supreme Court precedent. For all of these reasons, we affirm the decision of the trial court. Affirmed. - 13 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488599/	15-992(L) United States v. Romano UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 22nd day of November, two thousand twenty-two. Present: JOSÉ A. CABRANES, GERARD E. LYNCH, WILLIAM J. NARDINI, Circuit Judges. _____________________________________ UNITED STATES OF AMERICA, Appellee, v. 15-992(L) 19-3507(Con) 19-3573(Con) 19-3815(Con) 22-1782(Con) JOSEPH ROMANO, VINCENT ROMANO, AND KEVIN WELLS, Defendants-Appellants, SALVATORE ROMANO, MICHAEL DIBARI, AKA BOB ATWELL, BILL GRAYSON, AKA MARK VAITH, AND RUSSELL BARNES, AKA RUSTY, AKA RUSS, AKA KEVIN WELLS, Defendants. _____________________________________ For Appellee: Susan Corkery, Lauren H. Elbert, Assistant United 1 States Attorneys, for Breon Peace, United States Attorney for the Eastern District of New York, Brooklyn, NY For Defendant-Appellant Joseph Gary M. Kaufman, Law Office of Gary Kaufman, Romano: PLLC, New York, NY For Defendant-Appellant Vincent Arthur Kenneth Womble, Jr., Zeman & Womble, Romano: LLP, New York, NY For Defendant-Appellant Kevin Wells: Peter J. Tomao, Garden City, NY Appeal from a judgment of the United States District Court for the Eastern District of New York (Eric R. Komitee, Judge) entered on July 19, 2022. UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court is AFFIRMED. Defendants-Appellants Joseph Romano, Vincent Romano, and Kevin Wells appeal from an amended judgment in the United States District Court for the Eastern District of New York, entered against them on July 19, 2022. The judgment followed a limited remand from this Court, which directed the District Court primarily to review Defendants’ objections to the magistrate judge’s report and recommendation (“R&R”) concerning the restitution entered in this case. See United States v. Romano, No. 15-992, 2022 WL 402394 (2d Cir. Feb. 10, 2022). The District Court conducted a de novo review of the objections and adopted the R&R in full, with the exception of a fifteen-dollar reduction in the restitution owed to one victim. Defendants’ appeals were reinstated, pursuant to the terms of the limited remand, following their letter request dated July 16, 2022. Dkt. 316. We assume the parties’ familiarity with the case. We review issues of law in a restitution order “de novo, findings of adjudicative fact for clear error, and the multi-factor balancing aspects of such an order for abuse of discretion.” United States v. Jaffe, 417 F.3d 259, 263 (2d Cir. 2005). Defendants argue, first, that the District Court 2 erred in determining the restitution amounts. For largely the reasons given in Judge Komitee’s thorough analysis, we reject these arguments. Defendants charge the Government with relying on unqualified experts who used an unexplained valuation methodology, but as Judge Komitee noted, those experts—including a former president of the Professional Numismatics Guild—had ample experience and qualifications, and their estimates of the value-to-price ratio closely matched the ratio between the price Defendants paid for their inventory of coins and their revenue during the conspiracy. Defendants further complain that the Government used small sample sizes and did not document the identity of the valued coins. These arguments fall short: the Government sampled 2,200 coins and relied on sworn affidavits to establish the victims’ ownership. Finally, the calculation errors Defendants allege are, as the Government explains, not errors at all: they reflect merely instances in which the Government relied on actual losses (for victims who sold their coins) rather than imputed losses (for victims who kept them). Beyond Defendants’ general arguments, Wells specifically objects to the restitution calculation as applied to him. He claims that he caused less of the loss than did the other defendants. But the calculation already takes into account that he joined the conspiracy later than the others. And once Wells signed up, he became liable for the full loss from that point onwards so long as he “knew or reasonably should have known about some or all of the conspiracy’s past [conduct].” See United States v. Bengis, 783 F.3d 407, 413 (2d Cir. 2015). Nor was Wells improperly denied the chance “to examine the witness who prepared” the restitution calculation that applied to him. Wells Br. at 18. On the contrary, Wells was offered the chance to question Agent Hessle at the July 2014 restitution hearing, an opening that—although he did not take it— constituted the “opportunity to rebut the Government’s allegations” to which he was entitled. 3 United States v. Sabhnani, 599 F.3d 215, 258 (2d Cir. 2010) (quoting United States v. Maurer, 226 F.3d 150, 151–52 (2d Cir. 2000)). Next, Wells and the Romanos argue that the District Court erred by declining to make the restitution order joint and several with two other defendants. We disagree. Our limited remand noted that Defendants and the Government agreed that the amended judgments entered October 16, 2019, “erroneously omitted certain co-Defendants from the list” of those “held jointly and severally liable for the restitution amount” and instructed the District Court to “[c]orrect any clerical errors.” Romano, 2022 WL 402394 at 3 n.5, 6. The District Court, however, determined that the omission was not a clerical error, which must be the kind of “minor, uncontroversial” mistake that “a clerk or amanuensis might commit.” Special App’x 104 (quoting United States v. Lansing, 71 F. App’x 84, 87 (2d Cir. 2003) (summary order) (quoting United States v. Werber, 51 F.3d 342, 347 (2d Cir. 1995))). Because the record does not clearly reveal the previous judge’s intent to include those two defendants in the amended judgments of October 16, 2019, see Special App’x. at 104–05, the district court here acted within its “considerable discretion” in fashioning an appropriate restitution order, United States v. Yalincak, 30 F.4th 115, 122 (2d Cir. 2022); see also Lansing, 71 F. App’x at 87 (“[Rule 36] does not permit a court to amend a judgment ‘to effectuate its unexpressed intentions at the time of sentencing.’” (quoting Werber, 51 F.3d at 343)). Finally, Joseph Romano argues that the District Court violated his Fifth Amendment right to due process by denying his request for appointed counsel after he had elected to proceed pro se. Because Romano could have raised this argument on the first appeal, and did not, he has waived it. See United States v. Ben Zvi, 242 F.3d 89, 96 (“[A] decision made at a previous stage of litigation, which could have been challenged in the ensuing appeal but was not, becomes the law of the case.” (quoting Cnty. of Suffolk v. Stone & Webster Eng’g Corp., 106 F.3d 1112, 1117 (2d 4 Cir. 1997))). Romano’s related contention that the failure to hold a new restitution hearing on remand violated due process cuts no more ice. Our remand was limited: It required the District Court to review “the timely filed objections of Vincent Romano and Wells” to the R&R, not to restart the restitution hearing process from scratch. Romano, 2022 WL 402394 at 6. Accordingly, the District Court’s adherence to our instructions did not violate due process. * * We have considered the Defendants’ remaining arguments and find them unpersuasive. The judgment of the District Court is AFFIRMED. FOR THE COURT: Catherine O’Hagan Wolfe, Clerk 5	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488590/	COURT OF APPEALS OF VIRGINIA UNPUBLISHED Present: Senior Judges Clements, Haley and Petty BRIAN LEE CHEATHAM MEMORANDUM OPINION* v. Record No. 0293-22-2 PER CURIAM NOVEMBER 22, 2022 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF DINWIDDIE COUNTY Joseph Michael Teefey, Jr., Judge (Steven P. Hanna, on brief), for appellant. Appellant submitting on brief. (Jason S. Miyares, Attorney General; Mason D. Williams, Assistant Attorney General, on brief), for appellee. Appellee submitting on brief. Following a bench trial, the trial court convicted Brian Lee Cheatham of possession of heroin. The trial court sentenced Cheatham to five years’ incarceration with four years suspended. Cheatham argues that the evidence was insufficient to support the conviction because “the Commonwealth failed to introduce the actual controlled substance into evidence.” Cheatham’s counsel has moved for leave to withdraw in accordance with Anders v. California, 386 U.S. 738, 744 (1967). The motion to withdraw is accompanied by a brief referring to the part of the record that might arguably support this appeal. A copy of that brief has been furnished to Cheatham with sufficient time for him to raise any matter that he chooses, along with a motion requesting an extension of time to allow him to file pro se supplemental pleadings. Cheatham has not filed any pro se supplemental pleadings. * Pursuant to Code § 17.1-413, this opinion is not designated for publication. After examining the briefs and record in this case, the panel has determined that this appeal is wholly frivolous and unanimously holds that oral argument is unnecessary because “the appeal is wholly without merit.” Code § 17.1-403(ii)(a); Rule 5A:27(a). We affirm the trial court’s judgment. BACKGROUND We recite the facts “in the ‘light most favorable’ to the Commonwealth, the prevailing party in the trial court.” Hammer v. Commonwealth, 74 Va. App. 225, 231 (2022) (quoting Commonwealth v. Cady, 300 Va. 325, 329 (2021)). Therefore, we “discard the evidence of the accused in conflict with that of the Commonwealth, and regard as true all the credible evidence favorable to the Commonwealth and all fair inferences to be drawn therefrom.” Cady, 300 Va. at 329 (quoting Commonwealth v. Perkins, 295 Va. 323, 324 (2018)). On August 15, 2018, Dinwiddie County Sheriff’s Corporal Ty Moore responded to a report of shoplifting at a Dollar General in Dinwiddie County. Police previously detained Cheatham as he was leaving the store in his vehicle. Corporal Moore reviewed the store’s video surveillance and identified the backpack Cheatham used in the larceny. Cheatham possessed the backpack when he entered the store, exited the store, and upon his arrest. Corporal Moore also reviewed Dollar General’s video surveillance on July 23, 2018, and August 9, 2019, which showed that Cheatham used the same backpack to commit larcenies on those dates. Inside the backpack, Corporal Moore found store merchandise and returned it to the store. At the police station, Corporal Moore also found in the backpack an Altoids tin, containing a folded lottery ticket, a partial red straw, and a white powdery substance. Corporal Moore submitted the items found in the tin to the Department of Forensic Science. -2- At trial, the Commonwealth introduced the certificate of analysis without objection from Cheatham. The certificate indicates that the Department of Forensic Science examined “one folded lottery paper . . . with residue” and determined that it contained heroin. During Corporal Moore’s cross-examination, he stated that another person was driving Cheatham’s vehicle during the larceny. Corporal Moore admitted that when he searched the backpack, he initially did not notice the Altoids tin. Corporal Moore remembered the backpack from the previous video surveillance because he reviewed his notes and the general district court recently had heard Cheatham’s larceny case. Corporal Moore’s memory did not diminish with respect to the backpack. Corporal Moore, however, was unable to remember what Cheatham was wearing during any of the previous larcenies. After the Commonwealth presented its evidence, Cheatham moved to strike, arguing that the Commonwealth failed to prove that the residue was heroin because it only introduced into evidence the certificate of analysis and not the heroin itself. The trial court denied the motion. Cheatham testified that his friend gave him a ride to the Dollar General. Cheatham explained that he did not bring his own bag, so he took a backpack from the van, unaware that it contained the Altoids tin. On cross-examination, Cheatham denied that he used that same backpack to shoplift on the two previous occasions. He did not tell Corporal Moore about the backpack when he was arrested because Corporal Moore did not ask him about it. Cheatham also admitted that he previously had been convicted of felonies. At the conclusion of the evidence, Cheatham argued that the evidence was insufficient to support the conviction. The trial court did not find Cheatham credible, based in part on Cheatham’s possession of the backpack during the previous larcenies. The trial court convicted Cheatham of possession of heroin and sentenced him to five years’ incarceration, with four years suspended. Cheatham appeals. -3- ANALYSIS Cheatham argues that the Commonwealth failed to introduce the actual heroin into evidence, which was “instrumental in proving the corpus delicti of the crime.” He asserts that introducing the certificate of analysis without introducing the heroin itself is “legally insufficient.” “On review of the sufficiency of the evidence, ‘the judgment of the trial court is presumed correct and will not be disturbed unless it is plainly wrong or without evidence to support it.’” Ingram v. Commonwealth, 74 Va. App. 59, 76 (2021) (quoting Smith v. Commonwealth, 296 Va. 450, 460 (2018)). The Court “does not ‘ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’” Cady, 300 Va. at 329 (quoting Williams v. Commonwealth, 278 Va. 190, 193 (2009)). Instead, we ask “whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Id. (quoting Sullivan v. Commonwealth, 280 Va. 672, 676 (2010)). “If there is evidentiary support for the conviction, ‘the reviewing court is not permitted to substitute its own judgment, even if its opinion might differ from the conclusions reached by the finder of fact at the trial.’” Eberhardt v. Commonwealth, 74 Va. App. 23, 31 (2021) (quoting Chavez v. Commonwealth, 69 Va. App. 149, 161 (2018)). “The nature of [an] illegal substance . . . need not be proved by direct evidence but can be demonstrated by circumstantial evidence.” Hill v. Commonwealth, 8 Va. App. 60, 63 (1989); see Reed v. Commonwealth, 36 Va. App. 260, 269-70 (2001) (holding that a certificate of analysis was sufficient to convict defendant). In the instant case, Corporal Moore’s testimony and the introduction of the certificate of analysis were sufficient to prove that the substance found in the Altoids tin was heroin. It was the Commonwealth’s prerogative to select how it wished to prove that the substance was heroin. See Dunaway v. Commonwealth, 52 Va. App. 281, 301 (2008) (“Indeed ‘lay testimony and circumstantial evidence may be sufficient, without the introduction of an expert chemical analysis’ -4- to establish the identity of an illegal drug.” (quoting United States v. Dolan, 544 F.2d 1219, 1221 (4th Cir.1976))). In the Altoids tin, Corporal Moore found a folded lottery ticket and white powdery substance alongside a straw—an apparatus commonly used to consume heroin. In addition, the substance was found in an Altoids tin—an innocuous container that appeared to contain breath mints, but in this case, actually contained an illicit substance. A reasonable factfinder could determine that a person would use this type of container to store illicit substances discreetly. The certificate of analysis corroborated Corporal Moore’s testimony and identified the substance as heroin. Here, the record supports the factfinder’s determination that the item in question was heroin without the introduction of the substance into evidence. CONCLUSION Accordingly, we affirm the trial court’s judgment and grant the motion for leave to withdraw. See Anders, 386 U.S. at 744. This Court’s records shall reflect that Brian Lee Cheatham is now proceeding without the assistance of counsel in this matter and is representing himself on any further proceedings or appeal. Affirmed. -5-	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488592/	COURT OF APPEALS OF VIRGINIA Present: Judges Fulton, Ortiz and Senior Judge Petty PUBLISHED Argued by videoconference PRISCILLA ANN HOLMES v. Record No. 0250-22-3 COMMONWEALTH OF VIRGINIA OPINION BY JUDGE JUNIUS P. FULTON, III PRISCILLA ANN HOLMES NOVEMBER 22, 2022 v. Record No. 0251-22-3 COMMONWEALTH OF VIRGINIA FROM THE CIRCUIT COURT OF AUGUSTA COUNTY W. Chapman Goodwin, Judge H. Eugene Oliver, III (Evans Oliver, PLC, on brief), for appellant. Ken J. Baldassari, Assistant Attorney General (Jason S. Miyares, Attorney General, on brief), for appellee. Following a jury trial, the Circuit Court of Augusta County convicted Priscilla Holmes of two counts of racketeering in violation of Code § 18.2-514(C). Holmes appeals her convictions, challenging the sufficiency of the Commonwealth’s evidence against her and the trial court’s denial of three proposed jury instructions. For the following reasons, we affirm in part, reverse in part, and remand this case to the circuit court for a new trial. I. BACKGROUND The Commonwealth charged Holmes by indictment alleging two counts of knowingly, intentionally, willfully, unlawfully and feloniously, while associated with any enterprise, as defined in Virginia Code Section 18.2-513, did commit namely two or more of the following offenses: possession of a Schedule I or II controlled substance, and/or distribution or possession with intent to distribute a Schedule I or II substance, and/or distribution or possession with intent to distribute 28 grams or more of methamphetamine.1 At trial, the Commonwealth presented evidence of racketeering activity during two time frames. A. Evidence of Racketeering Benjamin Hartless testified for the Commonwealth that after meeting Holmes in December 2017 until his arrest in July 2018,2 he distributed methamphetamine, purchased from Holmes, in Augusta County. At the time of the trial, Hartless had been using methamphetamine for approximately twenty years. Hartless was introduced to Holmes by a friend. He began selling for her “pretty much right off the bat,” starting off selling “eight-balls” or an eighth of an ounce. Hartless would typically break down the eight-ball, “sell a couple of grams out of it to make the money back and then either keep the rest or sell a little bit more out of it.” During that time, Hartless was using “anywhere from a half a gram to a gram a day” of methamphetamine. After about a month of selling eight-balls for Holmes, Hartless began to get “a couple of ounces” of methamphetamine at a time from Holmes, which he would break down into eight-balls and sell to people who were further dealing to others. Eventually, Hartless received one, two, and three pounds of methamphetamine at a time from Holmes. He paid Holmes $15,000 per pound with cash bundled together and wrapped in rubber bands. He would pay the cash to Holmes directly or to Andrea Verdi, a woman who would deliver methamphetamine for Holmes. While Hartless was selling for Holmes, he testified that he generally saw her on a weekly basis when she would drive to Augusta County to 1 In addition to the two violations of Code § 18.2-514(C), for which Holmes was convicted, she was acquitted of two violations of Code § 18.2-514(A). 2 Notwithstanding Hartless’s testimony to these start and end dates, Hartless also testified that he sold for Holmes for around a year. -2- meet him. Holmes would typically drive nice-looking SUVs with Georgia plates, which Hartless believed to be rental cars. When Hartless received methamphetamine by the pound, it would arrive in “like a [Z]iplock bag, wrapped up real tight with plastic wrap around it and then it’d have . . . axle grease around it and then wrapped up again in plastic wrap and then duct taped all tight.” Once he received the large quantity of methamphetamine, Hartless would “unwrap it all and break it down into ounces and then distribute to people” who would then break it down further and sell it. Hartless testified that he sold methamphetamine to at least five other people whom he knew to be dealing to others. Over the period he sold for Holmes, Hartless estimated he sold fifty or more pounds of methamphetamine. Hartless testified that until his arrest he maintained a “good name in drug circles” and had a trustworthy reputation on the street. Roger Holmes (hereinafter “Roger,” no relation to the appellant) also testified that he purchased methamphetamine from Holmes for resale in Augusta County. At the time of trial, Roger had been a methamphetamine user for approximately twenty years. Roger explained that he met Holmes about thirty years ago, lost contact for fifteen to twenty years, and was reintroduced by a friend in 2018. Shortly thereafter, Holmes sent two pounds of methamphetamine to Roger, through another person, in a block that was packaged “in a vacuum-sealed bag with coffee in it,” which Roger broke up into smaller packages and resold. Sometime thereafter, Holmes traveled to Roger’s residence to collect the $28,000 he owed her for the two pounds of methamphetamine he had sold. Roger only had $24,000, which he paid her in cash. After that initial money pickup, Roger and Holmes communicated via phone: “She called and asked . . . what I needed, and I told her how much money I’d had, she said somebody would be by. Then another stranger stopped in and picked up the money and left what I was getting.” -3- Roger sold methamphetamine for Holmes approximately twenty times to five different people, for a total of five pounds. He confirmed that Verdi delivered a pound of methamphetamine to him for Holmes once and that Holmes never personally brought him any drugs. Roger began dealing for Holmes after Hartless’s arrest in July 2018 and ceased on December 21, 2018, when the Skyline Drug Task Force arrested Holmes at Roger’s residence. Roger, along with Task Force Officer Rosemeier, testified that Roger “set [Holmes] up,” telling officers that Holmes was going to Roger’s home to bring him two pounds of methamphetamine and collect $14,000 that he owed her. Although Holmes arrived at Roger’s house at the date and approximate time she was expected, driving an SUV with Georgia license plates, she did not have any drugs on her person or in her vehicle and did not attempt to collect any money from Roger before she was arrested. Verdi testified for the Commonwealth that, at the instruction of Holmes, she delivered large quantities of methamphetamine to Hartless, Roger, and another individual in Virginia, making a total of seven-to-eight trips. Each of Verdi’s visits to Virginia was for the purpose of “either picking up [money], dropping off [methamphetamine], or both.” At Holmes’s suggestion, Verdi delivered the drugs using SUVs and would store them either in the trunk or “above the tire underneath the cupholders.” The methamphetamine was packaged “in like freezer bags . . . like vacuum sealed.” Holmes provided the addresses, paid for the rental cars, and paid Verdi between $800 and $1,200 per trip. On two separate occasions, Holmes also sent Verdi to pick up methamphetamine from an individual in Atlanta. Officer Hilliard of the Skyline Drug Task Force testified, without objection, that “numerous people” identified Holmes as a drug dealer in Augusta County. In addition to the testimony of Holmes’s three accomplices and the task force officers involved in the investigation and arrest, the Commonwealth introduced into evidence two certificates of analysis. The first -4- certificate of analysis showed that on July 31, 2018, police recovered just over half a pound of methamphetamine from Hartless. The second showed that in December 2018, nearly one pound of methamphetamine was recovered just after Verdi delivered it to Roger on his property. At the conclusion of the Commonwealth’s evidence, Holmes made a motion to strike, which was denied. Holmes declined to present any evidence and made renewed motions to strike, which the court also overruled. B. Jury Instructions Three of Holmes’s proposed jury instructions were rejected by the trial court. Proposed Instruction I stated (rejected paragraphs italicized): You are the judge of the facts, the credibility of the witnesses, and the weight of the evidence. You may consider the appearance and manner of the witnesses on the stand, their intelligence, their opportunity of knowing the truth and for having observed the things about which they testified, their interest in the outcome of the case, their bias, and, if any have been shown, their prior inconsistent statements, or whether they have knowingly testified untruthfully as to any material fact in the case. You may not arbitrarily disregard believable testimony of a witness. However, after you have considered all the evidence in the case, then you may accept or discard all or part of the testimony of a witness as you think proper. Although one or more witnesses may positively testify as to an alleged fact and although that testimony may not be contradicted by other witnesses, you may altogether disregard that testimony if you believe it to be untrue. You are entitled to use your common sense in judging any testimony. From these things and all the other circumstances of the case, you may determine which witnesses are more believable and weigh their testimony accordingly. If you believe from the evidence that any witness has knowingly testified falsely as to any material fact in this case, you have a right to discredit all of the testimony of that witness or to give to such testimony such weight and credit as in your opinion it is entitled. -5- The court instructed the jury on the first, second, and fourth paragraphs of Instruction I, but rejected the third and fifth paragraphs, holding that the issues raised there were “adequately covered” by the model jury instruction and that “anything more[] was duplication and/or could be confusing to the jury.” Proposed Instruction Q stated: Where a fact is equally susceptible to two interpretations, one of which is consistent with the defendant’s innocence, you may not arbitrarily adopt the interpretation which finds him guilty. Declining to give Instruction Q, the court stated that it “has given an instruction as to the jury’s obligation and rights and how they should interpret evidence that comes in. It is their factual determination as to whether to believe and what weight and credibility should be applied to each piece of evidence and to each piece of testimony.” The court further concluded that Instruction Q was “argumentative with regard to the obligation that [the jury] ha[s] and it intrudes upon their fact finding issues.” Proposed Instruction T stated: You have heard testimony from accomplices in the commission of the crime charged in the indictment. While you may find your verdict upon their uncorroborated testimony, you should consider such testimony with great care and you are cautioned as to the danger of convicting the defendant upon the uncorroborated testimony of an accomplice or accomplices. Nevertheless, if you are satisfied from the evidence of the guilt of the defendant beyond a reasonable doubt, the defendant may be convicted upon the uncorroborated evidence of an accomplice or accomplices. In rejecting Instruction T, the court noted that “the testimony of the witness itself can contain the corroboration and in this case there was ample corroboration of the cases.”3 3 The court continued in its analysis: The question as to the admissibility of the statement is where this matter is determined. The Court is obligated as a matter of law to -6- At the end of the trial the jury found Holmes guilty of “Racketeering with regard to criminal activity occurring in Augusta County between July 31, 2017 and July 31, 2018,” and “Racketeering with regard to criminal activity occurring in Augusta County between August 1, 2018 and December 21, 2018.” II. ANALYSIS Holmes assigns error to her convictions, asserting that the trial court erred in convicting her “because the Commonwealth failed to prove two distinct acts” of criminal activity in support of each of the racketeering indictments and because the evidence was insufficient as a matter of law to sustain the racketeering convictions. She likewise assigns error to the trial court’s rejection of Instructions I, Q, and T. A. Sufficiency of the Evidence “When reviewing the sufficiency of the evidence, ‘[t]he judgment of the trial court is presumed correct and will not be disturbed unless it is plainly wrong or without evidence to support it.’” McGowan v. Commonwealth, 72 Va. App. 513, 521 (2020) (alteration in original) (quoting Smith v. Commonwealth, 296 Va. 450, 460 (2018)). “In such cases, ‘[t]he Court does determine whether there is sufficient evidence to support that or to corroborate that before it allows the statement in. There was no objection to the statement at the time that it was put in and the Court made the determination that there was corroboration of that. So the Court has made the determination as a matter of law that the testimony was admissible and the matter of law determination is for the Court to make and not for the jury to make. And to give this instruction allows the jury to get a second bite at something that the Judge has already determined as a matter of law. The jury instruction arguments in this case were made in chambers, off the record, and Holmes’s objections to the court’s rulings, along with the court’s explanations, were put on the record after the jury retired to consider the case. Consequently, the court’s explanation for its ruling on the record is somewhat incomplete. We note that the court, in making its ruling on the record, seems to conflate the issues of admissibility and whether there was sufficient corroboration to obviate the need for the cautionary jury instruction. Nevertheless, the trial court’s reason for its denial is immaterial as we review its ruling de novo. -7- not ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’” Id. (alteration in original) (quoting Secret v. Commonwealth, 296 Va. 204, 228 (2018)). “Rather, the relevant question is whether ‘any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” Vasquez v. Commonwealth, 291 Va. 232, 248 (2016) (quoting Williams v. Commonwealth, 278 Va. 190, 193 (2009)). “If there is evidentiary support for the conviction, ‘the reviewing court is not permitted to substitute its own judgment, even if its opinion might differ from the conclusions reached by the finder of fact at the trial.’” McGowan, 72 Va. App. at 521 (quoting Chavez v. Commonwealth, 69 Va. App. 149, 161 (2018)). To the extent determining whether the evidence was sufficient to support a conviction involves interpreting the statute itself, that is a question of law which we review de novo. See Woodard v. Commonwealth, 287 Va. 276, 280 (2014). Holmes was convicted of two counts of racketeering, in violation of Code § 18.2-514(C), which provides that “[i]t shall be unlawful for any person employed by, or associated with, any enterprise to conduct or participate, directly or indirectly, in such enterprise through racketeering activity.” “‘Racketeering activity’ means to commit, attempt to commit, or conspire to commit or to solicit, coerce, or intimidate another person to commit two or more” enumerated offenses. Code § 18.2-513. In this case, the Commonwealth amended the indictments from the broad list of enumerated offenses contained in Code § 18.2-513, narrowing them to allege more specific drug crimes. The Commonwealth was therefore required to prove that Holmes specifically committed “two or more” violations of “possession of a Schedule I or II controlled substance, and/or distribution or possession with intent to distribute a Schedule I or II controlled substance, and/or distribution or possession with intent to distribute 28 grams or more of methamphetamine.” -8- Holmes argues the evidence was insufficient to prove beyond a reasonable doubt that she “committed two distinct acts as alleged in the indictments, for each indictment.” Specifically, she argues that only one certificate of analysis proving the presence of methamphetamine was established for each indictment, and the other circumstantial evidence of a second distinct act did not sufficiently establish the nature of the substances delivered to and subsequently redistributed by Hartless and Roger. It is not necessary for the Commonwealth to prove the nature of an illegal substance using direct evidence, such as a certificate of analysis. Hill v. Commonwealth, 8 Va. App. 60, 63 (1989) (citing United States v. Zielie, 734 F.2d 1147, 1156 (11th Cir. 1984); United States v. Gregorio, 497 F.2d 1253, 1263 (4th Cir. 1974)). Rather, the nature of the substance can be proven by circumstantial evidence. Id. The types of circumstantial evidence that may be considered in assessing whether the illicit nature of a substance is proven beyond a reasonable doubt includes, but is not limited to: the physical appearance of the substance involved in the transaction, evidence that the substance produced the expected effects when sampled by someone familiar with the illicit drug, evidence that the substance was used in the same manner as the illicit drug, testimony that a high price was paid in cash for the substance, evidence that transactions involving the substance were carried on with secrecy or deviousness, and evidence that the substance was called by the name of the illegal narcotic by the defendant or others in his presence. Id. (quoting United States v. Dolan, 544 F.2d 1219, 1221 (4th Cir. 1976)). Holmes notes that none of the methamphetamine use Hartless and Roger testified about was “tied to the specific methamphetamine [Holmes] is alleged to have distributed” and neither Hartless nor Roger was qualified as an expert witness. However, circumstantial evidence of the nature of an illegal substance need not include expert testimony. “Users and addicts, if they have gained familiarity or experience with a drug, may identify it. Numerous courts have permitted -9- lay purchasers of drugs to testify as to the identification of drugs after previous use has been demonstrated.” Hill, 8 Va. App. at 63. In this case, the evidence clearly established that Hartless and Roger were longtime methamphetamine users and, therefore, were familiar enough with the drug to identify it. Further, although Hartless did not testify directly about any particular occasion when he ingested the methamphetamine he received from Holmes, he testified that during the period he was selling for Holmes he was using “anywhere from a half a gram to a gram a day” and would sometimes keep a portion of the methamphetamine he received from Holmes. Moreover, we note that although the testimony in Hill was that the witness had used the cocaine at issue, the standard described by this Court in Hill does not require testimony that the user/addict used the specific batch of drugs about which they are testifying. See id. (allowing users to testify about the identity of drugs “after previous use has been demonstrated”). Hartless and Roger both testified they paid Holmes $14,000 to $15,000 per pound of methamphetamine. The price was paid in cash, which was packaged in rubber bands. The substance delivered to them was also packaged like large quantities of methamphetamine. Hartless, Roger, and Verdi all testified that it was packaged in vacuum-sealed bags and delivered to Hartless and Roger surreptitiously. Hartless and Roger both explained that the bags were packaged with another substance to conceal the scent of the methamphetamine and deter narcotics dogs, such as coffee or axle grease. Verdi testified that she would deliver the methamphetamine using rented SUVs and, at Holmes’s instruction, concealed the drugs “above the tire underneath the cupholders.” Thus, “a high price was paid in cash for the [methamphetamine]” and “transactions involving the [methamphetamine] were carried on with secrecy or deviousness.” Id. (quoting Dolan, 544 F.2d at 1221). In addition to Hartless’s implication that he personally used the methamphetamine he purchased from Holmes, he testified that he sold about fifty or more pounds of - 10 - methamphetamine that he received from Holmes for around a year to at least five different people whom he knew to be dealing to others and that prior to his arrest he had a “good name in drug circles” and a trustworthy reputation on the street. Roger testified that he sold a total of five pounds of methamphetamine for Holmes to five different people spread out over approximately twenty different sales. A reasonable factfinder could conclude from this evidence of the large and steady amount of Holmes-supplied methamphetamine in Augusta County that the substance Hartless and Roger sold for Holmes “had the physical appearance of [methamphetamine],” “was used in the same manner as [methamphetamine],” and “produced the expected effects when sampled by someone familiar with [methamphetamine].” Hill, 8 Va. App. at 63 (quoting Dolan, 544 F.2d at 1221). Finally, the court received testimony from Hartless, Roger, and Verdi that each of them communicated with Holmes regarding the purchase, delivery, and sale of methamphetamine. Hartless testified that a friend introduced him to Holmes and initially told him that Holmes wanted to purchase methamphetamine from him, but when the two met in person Hartless learned that Holmes was actually trying to sell to him. This included discussions about the quantity and price of the methamphetamine, how it would be packaged, and how it would be delivered. A reasonable factfinder could conclude from the accomplices’ testimony about their communications with Holmes that “the substance was called by the name of the illegal narcotic by the defendant or others in his presence.” Id. (quoting Dolan, 544 F.2d at 1221). Taking the totality of the Hill factors into consideration, there was sufficient circumstantial evidence for a factfinder to conclude that the substance Holmes dealt to Hartless and Roger was methamphetamine. - 11 - Holmes also challenges the sufficiency of the evidence “tying [her] to the charges at hand.” She argues that the evidence at trial failed to exclude all reasonable hypotheses of innocence because she was never caught with drugs or money, she was supposed to have been delivering narcotics where there were no narcotics and no cash, she had known Roger Holmes and Andrea Verdi outside the context of the alleged distribution ring, and brought grandchildren to a supposed large scale methamphetamine deal among many others. We disagree and hold that when viewed in the light most favorable to the Commonwealth, the record contained sufficient evidence to convict Holmes of racketeering. Three accomplices, Hartless, Roger, and Verdi, all testified that Holmes facilitated and directed the distribution of methamphetamine in Augusta County. As our Supreme Court has held, a “jury if satisfied of guilt, may convict an accused upon the uncorroborated testimony of an accomplice.” Dillard v. Commonwealth, 216 Va. 820, 821 (1976). The accomplices testified unequivocally that they communicated with Holmes about purchasing and distributing large quantities of methamphetamine, which she then either delivered or directed to be delivered to Augusta County, and for which she collected large payments. This testimony, taken in the light most favorable to the Commonwealth, foreclosed all reasonable hypotheses of innocence and provided the factfinder with more than sufficient evidence to conclude, beyond a reasonable doubt, that Holmes was guilty of racketeering. B. Jury Instructions The responsibility of properly instructing a jury “rest[s] in the sound discretion of the trial court.” Cooper v. Commonwealth, 277 Va. 377, 381 (2009). “A reviewing court’s responsibility in reviewing jury instructions,” however, “is ‘to see that the law has been clearly stated and that the instructions cover all issues which the evidence fairly raises.’” Fahringer v. Commonwealth, 70 Va. App. 208, 211 (2019) (quoting Darnell v. Commonwealth, 6 Va. App. 485, 488 (1988)). - 12 - “We review a trial court’s decisions in giving and denying requested jury instructions for abuse of discretion.” Conley v. Commonwealth, 74 Va. App. 658, 675 (2022). Whether a proffered jury instruction accurately states the law, however, is reviewed de novo. Sarafin v. Commonwealth, 288 Va. 320, 325 (2014). “And in deciding whether a particular instruction is appropriate, we view the facts in the light most favorable to the proponent of the instruction.” Cooper, 277 Va. at 381. 1. Jury Instruction I Holmes argues that the trial court erred in refusing two specific paragraphs from Jury Instruction I. The first rejected paragraph, which states: “Although one or more witnesses may positively testify as to an alleged fact and although that testimony may not be contradicted by other witnesses, you may altogether disregard that testimony if you believe it to be untrue,” arises from an instruction given in Blount v. Commonwealth, 213 Va. 807, 808 (1973). The second rejected paragraph states: “If you believe from the evidence that any witness has knowingly testified falsely as to any material fact in this case, you have a right to discredit all of the testimony of that witness or to give to such testimony such weight and credit as in your opinion it is entitled,” and originates in Zirkle v. Commonwealth, 189 Va. 862 (1949), and Ronald J. Bacigal & Margaret Ivey Bacigal, Virginia Practice Series: Jury Instructions §§ 57:4 and 57:7 (2014-2015 ed.). Both rejected paragraphs in Jury Instruction I are accurate statements of the law, but our analysis does not stop there. Rather, we must look to whether the “granted instructions fully and fairly cover a principle of law.” Daniels v. Commonwealth, 275 Va. 460, 466 (2008) (emphasis added). When they do, “a trial court does not abuse its discretion in refusing another instruction relating to the same legal principle.” Id. (quoting Stockton v. Commonwealth, 227 Va. 124, 145 (1984)). In this case, the principles of law discussed in the rejected paragraphs were already - 13 - covered by other instructions that were given to the jury. In Instruction Number 5, the court instructed that the jurors “are the judges of the facts, the credibility of the witnesses, and the weight of the evidence,” that they “may not arbitrarily disregard believable testimony of a witness,” but after they “have considered all the evidence in the case, then [the jurors] may accept or discard all or part of the testimony of a witness as [the jurors] think proper.” Further, the jury was instructed that it may consider a witness’s “bias, and, if any have been shown, their prior inconsistent statements, or whether they have knowingly testified untruthfully as to any material fact in the case.” Because Instruction Number 5 fairly and adequately instructed the jury on the principles of law discussed in the rejected paragraphs of Jury Instruction I, a duplicative instruction would inappropriately “single out for emphasis a part of the evidence tending to establish a particular fact,” Woods v. Commonwealth, 171 Va. 543, 548 (1938), and “would be confusing or misleading to the jury,” Bruce v. Commonwealth, 9 Va. App. 298, 300 (1990). 2. Jury Instruction Q Our conclusion that Jury Instruction Q was properly rejected results from the same analysis that defeated Holmes’s claims regarding Jury Instruction I. An instruction that “Where a fact is equally susceptible to two interpretations, one of which is consistent with the defendant’s innocence, you may not arbitrarily adopt the interpretation which finds him guilty” is simply duplicative of other granted instructions. The court already instructed the jury on the presumption of innocence (Instruction Number 1), including that “the Commonwealth [must] prove[] each and every element of the crime beyond a reasonable doubt.” The court likewise instructed, through Instruction Number 6, that “When the Commonwealth relies upon circumstantial evidence, the circumstances proved must be consistent with guilt and inconsistent with innocence. It is not sufficient that the circumstances proved create a suspicion of guilt, - 14 - however strong, or even a probability of guilt” and that “The evidence as a whole must exclude every reasonable theory of innocence.” The “court’s use of the[se] model jury instruction[s] left no vital issue unaddressed.” Shaikh v. Johnson, 276 Va. 537, 546 (2008). Instruction Number 1 and Instruction Number 6 fairly and adequately instructed the jury on the principles of law discussed in rejected Jury Instruction Q. To nevertheless grant Jury Instruction Q would be duplicative, inappropriately single out a particular fact or issue, and may cause confusion to the jury. Therefore, the trial court did not err in rejecting Jury Instruction Q. 3. Jury Instruction T The final rejected instruction cautioned the jury against the danger of convicting Holmes upon the uncorroborated testimony of an accomplice. Virginia appellate courts have consistently held that: if satisfied of guilt, [a jury] may convict an accused upon the uncorroborated testimony of an accomplice. Where accomplice testimony is uncorroborated, however, it is the duty of the court to warn the jury against the danger of convicting upon such uncorroborated testimony. This warning is required because the source of accomplice testimony is tainted with the temptation to exculpate oneself by laying the crime upon another. Dillard, 216 Va. at 821 (citations omitted). Dillard makes it clear that if an accomplice’s testimony is uncorroborated, it is error for a trial court to refuse the cautionary instruction. Id. In rejecting Jury Instruction T, the court held that the instruction was not warranted because the accomplice testimony was not uncorroborated. The court stated that “the testimony of the witness itself can contain the corroboration and in this case there was ample corroboration of the cases.” We disagree. “[T]he danger of collusion between accomplices and the temptation to exculpate themselves by fixing responsibility upon others is so strong that it is the duty of the court to warn the jury against the danger of convicting upon their uncorroborated testimony.” Jones v. Commonwealth, 111 Va. 862, 868 (1911). Moreover, “[I]f two or more accomplices are - 15 - produced as witnesses, they are not deemed to corroborate each other . . . and the same confirmation is required[] as if there were but one.” Id. (quoting 1 Greenleaf on Evidence § 381 (15th ed.)); see also Via v. Commonwealth, 288 Va. 114, 115 (2014) (“Whether accomplice testimony is corroborated is subject to the long established principle that accomplice testimony cannot be corroborated by the testimony of another accomplice.”). In this case, although the testimony of Holmes’s accomplices, Benjamin Hartless, Roger Holmes, and Andrea Verdi, corroborate each other, the “danger of collusion between [these three] accomplices and the temptation to exculpate themselves by fixing responsibility upon others” is not alleviated where the sole corroboration is the testimony of another accomplice to the crime. Jones, 111 Va. at 868. Whether the accomplice testimony was sufficiently corroborated is a question of law for the court. Dillard, 216 Va. at 824. It is, therefore, reviewed de novo on appeal. The correct standard for “determining whether a cautionary instruction should be granted becomes this: is corroborative evidence lacking? If it is, the instruction should be granted.” Id. at 822. The proper standard for determining whether sufficient corroboration exists to refuse the cautionary instruction is: “[T]he corroboration or confirmation must relate to some fact (or facts) which goes to establish the guilt of the accused.” Id. at 823 (alteration in original) (quoting Jones, 111 Va. at 869). This standard is “not as rigid as the ‘ultimate fact’ test. The corroborative evidence, standing alone, need not be sufficient either to support a conviction or to establish all essential elements of an offense.” Id. An example of the “relation to guilt” standard was outlined in Crosby v. Commonwealth, 132 Va. 518 (1922). In that case, Crosby was charged with illegally selling alcohol, which he denied. Id. at 520. “An accomplice, the purchaser of the liquor, testified for the Commonwealth that [Crosby] had made the sale.” Dillard, 216 Va. at 823. The Commonwealth’s only - 16 - remaining evidence came from “a police officer, who testified he saw the accused at the window of the house where the sale was alleged to have occurred; observed the accused look up and down the street; noticed the alleged purchaser enter the house; and afterwards found whisky in the possession of the purchaser.” Id. The officer’s testimony provided corroboration for “the occasion and opportunity for the crime as well as the possession (by the purchaser) of the whisky alleged to have been purchased.” Id. (quoting Crosby, 132 Va. at 520). As such, Crosby was not “convicted upon the uncorroborated testimony of his accomplice.” Id.; see also Johnson v. Commonwealth, 42 Va. App. 46, 57 (2003) (finding sufficient corroborating evidence where Johnson was seen with her accomplice “immediately prior to the two drug transactions”); Richards v. Commonwealth, 187 Va. 1, 4 (1948) (finding sufficient corroboration where “[t]he occasion and the opportunity for the crime, as well as the possession of the beer, were established by testimony other than that emanating from the alleged accomplice”). Contra Yates v. Commonwealth, 4 Va. App. 140, 143 (1987) (finding insufficient corroboration to an accomplice’s testimony where “[e]xcept for the testimony of [the accomplice], there was neither physical evidence nor testimony that tended to connect Yates with the crime”). The Commonwealth relies upon three different items of evidence which it argues corroborate the accomplice testimony in this case. First, that Roger told the Skyline Drug Task Force that Holmes would go to his house on December 21, 2018, to conduct a methamphetamine transaction, and although Holmes did not have methamphetamine on her person or in her vehicle and no transaction was attempted, she did arrive at the location at the approximate time she was expected. Second, both Hartless and Verdi testified that Holmes used SUVs for the drug transactions, and she in fact arrived at Roger’s home on December 21, 2018, in an SUV. Third, Officer Hilliard testified that “numerous people” identified Holmes as a drug dealer in Augusta County. None of this evidence tends to connect Holmes with the racketeering crimes for which - 17 - she was convicted. Unlike in Crosby, where the police officer’s observations established Crosby’s proximity to the location of the illegal liquor sale, as well as the reasonable inference that the purchaser received the liquor from him, there was no non-accomplice testimony in this case that Holmes was ever seen with methamphetamine, in Augusta County or otherwise. Roger’s “tip” that Holmes would arrive at his home at a specific time to conduct a drug deal failed to bear fruit when she arrived without any drugs and without attempting to collect any money. The bare fact that Holmes drove an SUV does not relate to her guilt to the extent that it can serve as the corroboration for the accomplice testimony. Finally, the testimony that “numerous people” had identified Holmes as a drug dealer, while “admitted without objection” and thus can be “properly” “considered” and “given its natural probative effect,” remains hearsay and is entitled to minimal weight. Baughan v. Commonwealth, 206 Va. 28, 31 (1965). “[T]he basis for the exclusion of hearsay testimony is that it is not subject to the tests which can ordinarily be applied for the ascertainment of the truth of such testimony. It has been said that it lacks ‘any guarantee of trustworthiness.’” Stevens v. Mirakian, 177 Va. 123, 131 (1941). The identity of the declarants, the context of the statements, and the bases of the declarants’ knowledge, are entirely unknown. It therefore cannot be known whether the declarants are likewise accomplices in this racketeering enterprise and thus subject to the same requirement of corroboration, or whether the statement that Holmes has been identified as a drug dealer even relates to the charged offenses. The testimony that “numerous” unidentified “people,” in unknown contexts, had, at some unknown point in time, identified Holmes as a drug dealer is so attenuated from the charged crimes, and so lacking in any indicia of reliability that it cannot, alone, serve as the corroboration necessary to obviate the need for the cautionary instruction warning against convicting based on the uncorroborated testimony of - 18 - accomplices. We, therefore, hold that the trial court erred in refusing to give the cautionary instruction. C. Harmless Error Analysis Having concluded that the trial court erred in refusing to caution the jury about convicting based on the uncorroborated testimony of accomplices, we now consider, as is required, whether that error was harmless. See Code § 8.01-678; Clay v. Commonwealth, 262 Va. 253, 259 (2001); Dandridge v. Commonwealth, 72 Va. App. 669, 685 (2021). “Non-constitutional error is harmless if other evidence of guilt is so ‘overwhelming’ and the error so insignificant by comparison that we can conclude the error ‘failed to have any “substantial influence” on the verdict.’” Dandridge, 72 Va. App. at 685 (quoting Lienau v. Commonwealth, 69 Va. App. 254, 270 (2018)). In a case such as this, where the trial court erred in refusing a cautionary instruction due to a lack of evidence corroborating accomplice testimony, there cannot be such overwhelming other evidence of guilt “that we can conclude the error failed to have any substantial influence on the verdict.” Id. Denial of the cautionary instruction was not harmless error and remand for a new trial, thus, is appropriate. 4 III. CONCLUSION Viewed in the light most favorable to the Commonwealth, the record contained sufficient evidence to convict Holmes of two counts of racketeering. Moreover, Jury Instructions I and Q 4 Although in Dillard the Court noted that its “research ha[d] not disclosed a single instance where a conviction was reversed because of a failure to grant a cautionary instruction,” that is no longer the case. 216 Va. at 822. Shortly after Dillard was decided the Supreme Court reversed and remanded a case solely based on the trial court’s error in refusing a cautionary instruction. See Smith v. Commonwealth, 218 Va. 455, 457 (1977) (“[T]he accomplice’s testimony was not sufficiently corroborated, and it was error to refuse a cautionary instruction. Accordingly, the judgment of the trial court will be reversed, and the case will be remanded for a new trial.”); Ward v. Commonwealth, 219 Va. 921, 926 (1979) (“For error in failing to grant the cautionary instruction, the judgment will be reversed and the case will be remanded for a new trial if the Commonwealth be so advised.”). The Supreme Court did not engage in harmless error analysis when reversing Smith and Ward. - 19 - were properly refused by the trial court as duplicative of other granted instructions. Nevertheless, the trial court erred in finding that the accomplice testimony of Hartless, Verdi, and Roger was sufficiently corroborated when it refused Jury Instruction T. Because this error was not harmless, we reverse and remand for a new trial. Affirmed in part, reversed in part, and remanded. - 20 -	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488602/	21-1342-cv SEC v. Govender (Fishoff) UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. 1 At a stated term of the United States Court of Appeals for the Second Circuit, 2 held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the 3 City of New York, on the 22nd day of November, two thousand twenty-two. 4 5 PRESENT: DENNIS JACOBS, 6 RICHARD C. WESLEY, 7 RAYMOND J. LOHIER, JR., 8 Circuit Judges. 9 ------------------------------------------------------------------ 10 SECURITIES AND EXCHANGE 11 COMMISSION, 12 13 Plaintiff-Appellee, 14 15 v. No. 21-1342-cv 16 17 DESHAN GOVENDER, 18 19 Defendant-Appellant. ∗ 20 ------------------------------------------------------------------ 21 ∗ The Clerk of Court is directed to amend the caption as set forth above. 1 FOR PLAINTIFF-APPELLEE: PAUL G. ALVAREZ, Senior 2 Litigation Counsel (John J. 3 Avery, Deputy Solicitor, on the 4 brief), for Dan M. Berkovitz, 5 General Counsel, U.S. 6 Securities and Exchange 7 Commission, Washington, DC 8 9 FOR DEFENDANT-APPELLANT: Deshan Govender, pro se, 10 Albany, NY 11 12 13 Appeal from judgments of the United States District Court for the 14 Southern District of New York (Andrew L. Carter, Judge). 15 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, 16 AND DECREED that the appeal is DISMISSED in part and the judgment of the 17 District Court is AFFIRMED in part. 18 Deshan Govender, proceeding pro se, appeals from a June 4, 2019 partial 19 consent judgment entered into with the Securities and Exchange Commission 20 (“SEC”), and a September 30, 2020 judgment of the District Court (Carter, J.) 21 ordering him to pay a civil penalty of $445,576. Govender also moves to 22 supplement the record on appeal with additional documents regarding his 23 financial situation. We assume the parties’ familiarity with the underlying facts 24 and the record of prior proceedings, to which we refer only as necessary to 2 1 explain our decision. 2 Turning first to Govender’s appeal of the consent judgment, we agree with 3 the SEC that Govender is precluded from appealing the consent judgment here. 4 “Appeal from a consent judgment is generally unavailable on the ground that the 5 parties are deemed to have waived any objections to matters within the scope of 6 the judgment.” LaForest v. Honeywell Int’l Inc., 569 F.3d 69, 73 (2d Cir. 2009). 7 We have recognized exceptions to this rule “where (i) the [appealing] party did 8 not actually consent . . . or (ii) the court lacked subject matter jurisdiction to enter 9 the judgment,” Priest v. C.I.R., 173 F.3d 845 (2d Cir. 1999) (table), or the 10 appealing party has “expressly preserve[d] the right to appeal” the judgment, see 11 LaForest, 569 F.3d at 73. None of these exceptions apply here. First, Govender 12 concedes that he entered into the partial consent judgment voluntarily – and 13 with the assistance of counsel – “so [he] could get on with [his] life and take 14 action to repair [his] reputation.” Pet. Br. 17. Second, the District Court clearly 15 had subject matter jurisdiction over this proceeding. See 28 U.S.C. § 1331; 15 16 U.S.C. § 78aa. Although Govender suggests otherwise and claims that the SEC 17 filed its complaint after the five-year statute of limitations for SEC enforcement 18 actions expired, we have held that the statute is not jurisdictional. See SEC v. 3 1 Fowler, 6 F.4th 255, 260–61 (2d Cir. 2021). Lastly, Govender did not expressly 2 preserve any right to appeal the consent judgment. In summary, Govender is 3 precluded from appealing the partial consent judgment. We therefore dismiss 4 his appeal insofar as it seeks review of that judgment. See Priest, 173 F.3d 845, 5 at *1; In re Refco, 505 F.3d 109, 120 (2d Cir. 2007). 6 Next, we consider whether the District Court abused its discretion when it 7 ordered Govender to pay $445,576 in civil penalties. 1 See SEC v. Kern, 425 F.3d 8 143, 153–54 (2d Cir. 2005). Govender argues that the District Court based its 9 civil-penalty determination on a flawed assessment of his ability to pay. We 10 disagree. When the District Court lowered Govender’s civil penalty from the 11 SEC’s proposed amount of $668,364 to $445,576, it credited Govender’s assertions 12 about his financial situation, specifically acknowledging “the amount of debt 13 Govender faces as well as the extent to which this action has hindered his ability 1 We deny Govender’s motion to supplement the record with additional documents regarding his financial situation. We consider new evidence on appeal only in “extraordinary circumstances,” Int’l Bus. Machs. Corp. v. Edelstein, 526 F.2d 37, 45 (2d Cir. 1975), such as when the new material would “clarif[y] our understanding of the process by which the District Judge reached the decision challenged on appeal,” Salinger v. Random House, Inc., 818 F.2d 252, 253 (2d Cir. 1987). Here, the District Court has already mitigated Govender’s civil penalty on account of his assertions of financial hardship. The additional proffered documents about his financial situation would not aid our ability to review the District Court’s civil-penalty order. 4 1 to find employment.” App’x 235. In concluding that Govender should be 2 subject to a “substantial fine,” App’x 234–35, the District Court also properly 3 considered that Govender’s conduct was egregious, knowing, and central to a 4 larger fraudulent scheme. The District Court’s decision to impose a civil penalty 5 of $445,576 after weighing these factors and Govender’s financial hardship fell 6 within “the range of permissible decisions,” SEC v. Razmilovic, 738 F.3d 14, 25 7 (2d Cir. 2013), and we therefore affirm the challenged judgment. 8 We have considered Govender’s remaining arguments and conclude that 9 they are without merit. For the foregoing reasons, Govender’s appeal of the 10 partial consent judgment is DISMISSED, and the September 30, 2020 judgment of 11 the District Court is AFFIRMED. Govender’s motion to supplement the record 12 on appeal is DENIED. 13 FOR THE COURT: 14 Catherine O’Hagan Wolfe, Clerk of Court 5	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488600/	21-2112-cr United States v. Barton UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. 1 At a stated term of the United States Court of Appeals for the Second Circuit, 2 held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the 3 City of New York, on the 22nd day of November, two thousand twenty-two. 4 5 PRESENT: RAYMOND J. LOHIER, JR., 6 SUSAN L. CARNEY, 7 ALISON J. NATHAN, 8 Circuit Judges. 9 ------------------------------------------------------------------ 10 UNITED STATES OF AMERICA, 11 12 Appellee, 13 14 v. No. 21-2112-cr 15 16 ALLAN BARTON, 17 18 Defendant-Appellant. 19 ------------------------------------------------------------------ 20 FOR DEFENDANT-APPELLANT: COLLEEN P. CASSIDY, Assistant 21 Federal Defender, Federal 22 Defenders of New 23 York, Inc., New York, NY 1 1 2 FOR APPELLEE: FRANK TURNER BUFORD, 3 Assistant United States 4 Attorney (Jo Ann M. Navickas, 5 Assistant United States 6 Attorney, on the brief), for Breon 7 Peace, United States Attorney, 8 Eastern District of New York, 9 Brooklyn, NY 10 11 Appeal from a judgment of conviction entered in the United States District 12 Court for the Eastern District of New York (William F. Kuntz, II, Judge). 13 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, 14 AND DECREED that the judgment of the District Court is AFFIRMED. 15 Allan Barton appeals from an August 27, 2021 judgment of conviction 16 entered in the United States District Court for the Eastern District of New York 17 (Kuntz, J.), following a jury trial at which he was found guilty of being a felon in 18 possession of a firearm in violation of 18 U.S.C. §§ 922(g)(1) and 924(a)(2). We 19 assume the parties’ familiarity with the underlying facts and the record of prior 20 proceedings, to which we refer only as necessary to explain our decision to 21 affirm. 22 I. The Admission of Statements by Uncalled Witnesses 23 Barton first argues that the District Court erroneously admitted the 2 1 statements of three uncalled witnesses, who allegedly told police officers that the 2 driver of a white van threatened them and had a gun. Assuming without 3 deciding that the District Court’s decision to admit these statements was error, 4 we conclude that any error was harmless. 5 The erroneous admission of evidence is harmless if “the appellate court 6 can conclude with fair assurance that the evidence did not substantially influence 7 the jury.” United States v. Riggi, 541 F.3d 94, 105 (2d Cir. 2008) (quotation marks 8 omitted). “In making this determination, we consider principally whether the 9 government’s case against the defendant[] was strong; whether the evidence in 10 question bears on an issue that is plainly critical to the jury’s decision . . .; 11 whether the evidence was emphasized in the government’s presentation of its 12 case and in its arguments to the jury; and whether the case was close.” Id. 13 (quotation marks omitted). 14 The evidence against Barton was overwhelming even without the specific 15 witness statements that bore directly on whether he possessed a gun. Police 16 officers testified that they approached a van after speaking with three men. As 17 they neared it, the driver fled the scene, sped several blocks with the officers in 18 pursuit, exited the van, and then ran, at which point the officers caught and 3 1 arrested him. The officers also testified that the driver, whom they later 2 identified as Barton, was the only person in the van. Sharon Daniels, a lay 3 witness, testified that she watched police pursue a white van, saw a hand throw 4 an object out of the van’s driver-side window, heard a loud noise as the object hit 5 a car, smelled “a faint scent like a fire cracker,” found a gun nearby, and 6 discovered that her car (which was parked on the street of the chase) was 7 damaged. Def. App’x 75-81. Physical and photographic evidence supported 8 Daniels’s testimony and showed that the gun she found was shattered. Finally, a 9 forensic specialist testified that Barton’s DNA was on the gun. 10 Moreover, although its witnesses referred several times to statements 11 made by the three men, see e.g., Def. App’x 43, 70, the Government only briefly 12 referenced their statements during its closing remarks and focused primarily on 13 Daniels’s testimony, see Gov’t App’x 145 (“Members of the jury, simply put, if 14 you believe Miss Daniels’ testimony . . . you have proof beyond a reasonable 15 doubt to convict the defendant.”). Accordingly, we conclude that any error that 16 the District Court may have committed in admitting the statements was 17 harmless. 18 Likewise, a Confrontation Clause violation is harmless if the reviewing 4 1 court is “satisfied beyond a reasonable doubt that the error complained of . . . did 2 not contribute to the verdict obtained.” United States v. Lee, 549 F.3d 84, 90 (2d 3 Cir. 2008) (quotation marks omitted). Because the evidence against Barton was 4 overwhelming, we conclude that any constitutional error that the District Court 5 may have committed in admitting the statements was also harmless. See id. 6 II. The Uncalled Witness Charge 7 Barton next argues that the District Court erred by providing an uncalled 8 witness charge, in which it explained that both parties “had an equal opportunity 9 or lack of opportunity to call” any of the “several persons who were identified 10 during the trial, but who did not . . . testify.” Def. App’x 132. The charge also 11 instructed the jury not to “draw any inference or reach any conclusions as to 12 what they would have testified to had they been called” and that “[t]heir absence 13 should not affect [the jury’s] judgment in any way.” Id. at 132-33. In connection 14 with the charge, the District Court reminded the jury that “the law does not 15 impose on a defendant in a criminal case the burden or duty of calling any 16 witnesses or producing any evidence.” Id. at 133. 17 We review challenges to jury instructions de novo and will reverse a 18 conviction on the basis of an erroneous instruction “only where, viewing the 5 1 charge as a whole, there was a prejudicial error.” United States v. Calderon, 944 2 F.3d 72, 90 (2d Cir. 2019) (quotation marks omitted). As for the specific 3 instruction that Barton challenges here, the general rule is that “[w]hen a witness 4 equally available to both sides is not called by either, the trial court may in its 5 discretion . . . instruct the jury that no unfavorable inference can be drawn 6 against either side.” United States v. Bahna, 68 F.3d 19, 22 (2d Cir. 1995). “[T]he 7 availability of a witness . . . depend[s] . . . on all the facts and circumstances 8 bearing upon a witness’s relation to the parties, rather than merely on physical 9 presence or accessibility.” United States v. Saa, 859 F.2d 1067, 1076 (2d Cir. 1988) 10 (quotation marks omitted). Here, the uncalled witnesses were equally 11 unavailable to both sides because they remained unidentified after police 12 canvassing and were never “peculiarly within the government’s control.” 13 United States v. Torres, 845 F.2d 1165, 1170 (2d Cir. 1988). 14 Barton argues that the uncalled witness charge was prejudicial because it 15 “suggested that the jury could not even consider the fact that the [three] men 16 disappeared and were not available at trial in determining whether to believe the 17 accusations.” Appellant’s Br. 40. Although the charge prohibited jurors from 18 considering the fact that the three uncalled witnesses did not testify, jurors 6 1 remained free to draw inferences about the credibility of the statements that they 2 made based on the fact that they disappeared after speaking with the police, 3 which was the argument actually advanced by defense counsel during the 4 summation. Def. App’x 114. Under these circumstances, we conclude that even 5 if giving the charge were error, it was not prejudicial. 6 We have considered Barton’s remaining arguments and conclude that they 7 are without merit. For the foregoing reasons, the judgment of the District Court 8 is AFFIRMED. 9 FOR THE COURT: 10 Catherine O’Hagan Wolfe, Clerk of Court 7	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488611/	USCA11 Case: 21-10455 Date Filed: 11/22/2022 Page: 1 of 2 [DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 21-10455 ____________________ UNITED STATES OF AMERICA, Plaintiff-Appellee, versus MUHAMMED MOMTAZ AL-AZHARI, Defendant-Appellant. ____________________ Appeal from the United States District Court for the Middle District of Florida D.C. Docket No. 8:20-cr-00206-TPB-AEP-1 ____________________ USCA11 Case: 21-10455 Date Filed: 11/22/2022 Page: 2 of 2 2 Opinion of the Court 21-10455 Before WILSON, JILL PRYOR, and HULL, Circuit Judges. PER CURIAM: The district court denied defendant-appellant Muhammed Momtaz Al-Azhari’s January 15, 2021 motion for injunctive relief on the basis that it lacked jurisdiction over the administrative forfeiture proceedings. Mr. Al-Azhari concedes that the purpose of his motion was to require the government to retain the forfeited property indefinitely so that he might eventually regain possession of it. After review, and with the benefit of oral argument, we conclude that Mr. Al-Azhari’s motion was an attempt to undo the forfeiture, and we agree with the district court that it lacked jurisdiction to do so. Accordingly, we affirm the district court’s denial of Mr. Al-Azhari’s motion. We also deny as moot the government’s July 21, 2021 motion to dismiss the appeal. AFFIRMED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488610/	United States Court of Appeals For the Eighth Circuit ___________________________ No. 21-3367 ___________________________ 375 Slane Chapel Road, LLC lllllllllllllllllllllPlaintiff - Appellant v. Stone County, Missouri, et al. lllllllllllllllllllllDefendants - Appellees ____________ Appeal from United States District Court for the Western District of Missouri - Joplin ____________ Submitted: June 15, 2022 Filed: November 22, 2022 ____________ Before LOKEN and KELLY, Circuit Judges, and MENENDEZ, District Judge.* ____________ LOKEN, Circuit Judge. Joseph and Yvonne Cordell own 375 Slane Chapel Road, LLC (“375”), a limited liability company that owns and operates a substantial vacation home adjacent to Table Rock Lake in Stone County, Missouri. When the Cordells’ personal use of * The Honorable Katherine M. Menendez, United States District Judge for the District of Minnesota, sitting by designation. the home declined, 375 applied in October 2020 for a conditional use permit (“CUP”) to rent out the property to short-term renters on platforms such as Airbnb. A CUP is required by Art. 4, § 25 of the Stone County Zoning Regulations (the “Short-Term Rental Regulation”). After a November 17 hearing at which 375 presented testimony and exhibits in favor of the application and Marlin Constance, a nearby property owner, spoke in opposition, the Stone County Planning & Zoning Commission approved the application by a 7-6 vote. Constance appealed the Commission’s decision to the Stone County Board of Adjustment. See Stone Cty. Zoning Reg., Art. 27, §§ 1(F), 3. After a hearing on April 13, 2021 at which those supporting and opposing 375’s application appeared, the Board of Adjustment voted 3-0 to reverse the Planning & Zoning Commission’s decision and deny 375 a CUP. On May 12, 375 filed separate actions in state and federal court to overturn the Board of Adjustment’s decision. In the Western District of Missouri, 375 filed this federal action, alleging that the Short-Term Rental Regulation is unconstitutionally vague on its face and as applied to 375 because, by using the word “may,” the regulation gives the Board of Adjustment unbridled discretion. One hour later, 375 filed a certiorari action in the Circuit Court of Stone County against the Board of Adjustment under Mo. Rev. Stat. § 64.870, alleging that the Board’s decision was not supported by competent and substantial evidence, and that the Board unlawfully applied the Short-Term Rental Regulation in a disparate and discriminatory manner in violation of the Equal Protection Clauses of the United States and Missouri Constitutions. U.S. Const. amend. XIV, § 1; Mo. Const. art. 1, § 2. Defendants promptly moved to dismiss this lawsuit, arguing, as relevant here, that 375’s federal claims are “barred by the Younger abstention doctrine.” Invoking Younger v. Harris, 401 U.S. 37 (1971), the district court granted the motion, abstained from adjudicating the federal complaint in deference to “the parallel state court proceeding,” dismissed 375’s complaint without prejudice, and subsequently denied 375’s Rule 59(e) motion to alter or amend the judgment. 375 appeals these -2- rulings. Concluding that the district court misinterpreted the “exceptional circumstances” warranting Younger abstention as defined in Sprint Communications v. Jacobs, 571 U.S. 69, 78, 82 (2013), we reverse. I. The Abstention Landscape In Younger v. Harris, the Supreme Court held that, absent “extraordinary circumstances,” “the possible unconstitutionality of a [state] statute ‘on its face’ does not in itself justify an injunction against good-faith attempts to enforce it.” 401 U.S. at 54. Though Younger reversed a federal court injunction of a state criminal prosecution, the Court later “clarified and expanded” the scope of the Younger abstention doctrine to include limited types of civil cases. See Minn. Living Assistance, Inc. v. Peterson, 899 F.3d 548, 551 (8th Cir. 2018), cert. denied, 139 S. Ct. 1195 (2019) (citing cases); 17B Charles Alan Wright, et al., Federal Practice & Procedure § 4254 (3d ed. 2022 Supp.). In Middlesex County Ethics Committee v. Garden State Bar Association, 457 U.S. 423 (1982), where an attorney challenged the constitutionality of ongoing state attorney disciplinary proceedings, the Court explained that “[t]he policies underlying Younger are fully applicable to noncriminal judicial proceedings when important state interests are involved,” such as the state bar disciplinary proceedings at issue. Id. at 432-34. Applying Middlesex, federal courts in subsequent cases considered what are called the three “Middlesex factors” in deciding whether to abstain: whether there is an “(1) ongoing state judicial proceeding, which (2) implicates important state interests, and (3) provides an adequate opportunity to raise federal challenges.” Sprint, 571 U.S. at 81 (cleaned up). In New Orleans Public Service, Inc. v. Council of the City of New Orleans (“NOPSI”), the Court altered this analysis when it emphasized that “only exceptional circumstances justify a federal court’s refusal to decide a case in deference to the States.” 491 U.S. 350, 368 (1989). The Court explained that the requisite “exceptional circumstances” are limited to three types of state civil and criminal -3- proceedings: (1) “pending state criminal prosecutions,” (2) certain “civil enforcement proceedings” warranting abstention, and (3) “civil proceedings involving certain orders that are uniquely in furtherance of the state courts’ ability to perform their judicial functions.” Id. In NOPSI, the Court reversed the lower courts’ decision to abstain in a federal case seeking judicial review of a city council’s rate-making decision because review of that decision was also pending in state court: [I]t has never been suggested that Younger requires abstention in deference to a state judicial proceeding reviewing legislative or executive action. Such a broad abstention requirement would make a mockery of the rule that only exceptional circumstances justify a federal court’s refusal to decide a case in deference to the States. . . . [W]e have never extended [Younger] to proceedings that are not ‘judicial in nature.’ . . . The Council’s proceedings in the present case were not judicial in nature. * * * * * There is no contention here that the Louisiana courts’ review [of the Council’s decision] involves anything other than a judicial act . . . . As a challenge to completed legislative action, NOPSI’s suit . . . is, insofar as our policies of federal comity are concerned, no different in substance from a facial challenge to an allegedly unconstitutional statute or zoning ordinance -- which we would assuredly not require to be brought in state courts. Id. at 368, 370, 372 (cleaned up). In reversing, the Court applied its long-standing principle that “federal courts lack the authority to abstain from the exercise of jurisdiction that has been conferred,” a principle that “do[es] not call into question, the federal courts’ discretion in determining whether to grant certain types of relief.” Id. at 358-59 (citations omitted). -4- Over two decades later, reviewing administrative action being challenged in federal and state court, the Supreme Court again reversed a circuit court abstention order, this time by our court, in Sprint Communications v. Jacobs. In an opinion by Justice Ginsburg, the unanimous Court, citing NOPSI, emphasized that “federal courts are obliged to decide cases within the scope of federal jurisdiction. Abstention is not in order simply because a pending state-court proceeding involves the same subject matter.” 571 U.S. at 72. Rather, Younger extends only to the three “exceptional circumstances” the Court identified in NOPSI – state criminal prosecutions, civil enforcement proceedings, and “civil proceedings involving certain orders . . . uniquely in furtherance of the state courts’ ability to perform their judicial functions.” Id. at 78, citing NOPSI, 491 U.S. at 368, and two prior cases NOPSI cited to define the third limited class of cases. Noting that our court had relied on the Middlesex factors to support abstention, the Court explained that the Middlesex factors are “additional factors appropriately considered . . . before invoking Younger,” id. at 81, to be considered after the NOPSI category has been satisfied: Divorced from their quasi-criminal context, the three Middlesex conditions would extend Younger to virtually all parallel state and federal proceedings, at least where a party could identify a plausibly important state interest. That result is irreconcilable with our dominant instruction that, even in the presence of parallel state proceedings, abstention from the exercise of federal jurisdiction is the “exception, not the rule.” In short, to guide other federal courts, we today clarify and affirm that Younger extends to the three “exceptional circumstances” identified in NOPSI, but no further. Id. at 81-82 (citations omitted). Applying this directive, we held in Minnesota Living Assistance, 899 F.3d at 552, that determining whether Younger abstention is appropriate requires a three-part inquiry: First, does the underlying state proceeding fall within one of the three “exceptional circumstances” where Younger abstention is appropriate? -5- Second, if the underlying proceeding fits within a Younger category, does the state proceeding satisfy what are known as the “Middlesex” factors? And third, even if the underlying state proceeding satisfies the first two inquiries, is abstention nevertheless inappropriate because an exception to abstention applies? The district court’s decision to abstain is reviewed for abuse of discretion. “Whether Younger abstention is appropriate is a question of law, and the district court abuses its discretion when it makes an error of law.” Id. at 551 (citations omitted). II. Discussion Citing Minnesota Living Assistance, the district court correctly recognized “that a federal court should abstain from exercising jurisdiction over a case [under Younger] if there is a parallel state proceeding which fits into one of three narrow categories.” But the court fell off the proper analytical path when it quoted the third category as paraphrased in Minnesota Living Assistance -- “a proceeding implicating a state’s interest in enforcing the orders and judgments of its courts,” 899 F.3d at 552 -- instead of the third category as carefully defined in NOPSI and quoted verbatim in Sprint -- “civil proceedings involving certain orders that are uniquely in furtherance of the state courts’ ability to perform their judicial functions.” 491 U.S. at 368. The district court’s definition of what we will call Category 3 shares the flaw in relying exclusively on the Middlesex factors identified by the Supreme Court in Sprint -- it “would extend Younger to virtually all parallel state and federal proceedings . . . where a party could identify a plausibly important state interest.” 571 U.S. at 81. The two cases cited by NOPSI as examples of Category 3 make clear that its focus is institutional -- “the state courts’ ability to perform their judicial functions” -- not simply the State’s interest in enforcing a particular court order. NOPSI, 491 U.S. at 368. Both involved challenges to the process by which a State compels compliance with the judgments of its courts. Juidice v. Vail, 430 U.S. 327, -6- 335-36 (1977), involved the state courts’ ability to enforce a civil contempt order; Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 13-14 (1987), involved the state courts’ ability to enforce a posting of bond pending appeal. See 430 U.S. at 335; 481 U.S. at 3-6. The parties’ briefs on appeal focused almost entirely on the Middlesex factors, skipping over the first inquiry which a party seeking Younger abstention must satisfy. When asked at oral argument which of the three NOPSI categories applies, counsel for Defendants said categories “two and three are both potential candidates to be applied in this situation.”1 We conclude neither category applies and therefore the district court erred in abstaining under Younger. A. Category 2. The second NOPSI category, a “civil enforcement proceeding,” is limited to cases involving state proceedings that are “akin to a criminal prosecution” “in important respects.” Huffman v. Pursue, Ltd., 420 U.S. 592, 604 (1975). That is, civil proceedings that are “quasi-criminal” in nature. Sprint, 571 U.S. at 81. In deciding this question, the Court in Sprint asked: (1) was the action commenced by the State in its sovereign capacity? (2) Was the proceeding initiated to sanction the federal plaintiff for some wrongful act? (3) Are there other similarities to criminal actions, such as a preliminary investigation culminating in the filing of formal charges? See id. at 79-80. We conclude that, without question, neither the administrative zoning proceeding, nor the on-going certiorari proceeding seeking judicial review of the Adjustment Board’s decision, was quasi-criminal in nature. There is no state enforcement proceeding here, no action initiated by “the State in its sovereign capacity.” Sprint, 571 U.S. at 80. 375, a private company, initiated the civil 1 NOPSI Category 1 unquestionably does not apply as this case does not involve a criminal proceeding. Sprint, 571 U.S. at 78. -7- administrative proceeding to obtain a needed permit. This private action is not “akin to a criminal prosecution.” Huffman, 420 U.S. at 604. 375’s federal complaint does not allege that a government authority investigated 375’s activities or lodged a formal complaint against 375. Defendants argue, without citing any authority, that Category 2 applies because Stone County might have begun enforcement proceedings had 375 not applied for a CUP. Counsel at oral argument could not identify a principle that would limit this theory of “exceptional circumstances,” and other courts have refused to apply the doctrine in similar circumstances. See Titlemax of Del., Inc. v. Weissmann, 24 F.4th 230, 237 (3d Cir. 2022) (“possibility of contempt” proceedings does not trigger Younger abstention). Abstention is “the exception, not the rule,” and Younger abstention is limited to the three NOPSI “exceptional categories.” Sprint, 571 U.S. at 82. Here, the NOPSI Category 2 shoe does not fit. B. Category 3. The third NOPSI category is limited to “civil proceedings involving certain orders that are uniquely in furtherance of the state courts’ ability to perform their judicial functions.” 491 U.S. at 368. The district court’s decision that this case falls within Category 3 reflected its flawed definition of the scope of this category. The court concluded that “this particular state court proceeding is sufficiently judicial in nature to ‘implicate the state’s interest in enforcing the orders and judgments of its court’” because judicial appeal of an action applying zoning regulations is “quasi-judicial in nature,” and “Missouri’s ability to administer zoning and land use-related matters is an important state interest implicating principles of comity and federalism.” In support, the court cited Night Clubs, Inc. v. City of Fort Smith, 163 F.3d 475 (8th Cir. 1998), a decision that applied the Middlesex factors without addressing whether the case fell within at least one of the NOPSI categories. At oral argument, Defendants argued that Category 3 applies because planning and zoning land-use issues are quintessential matters of state law and therefore federal courts should not interfere with these proceedings. Like the district court, Defendants focus on interference with matters of state interest, a Middlesex factor -8- that is only addressed if NOPSI Category 3 is satisfied. Defendants emphasize that “the State Action is ongoing and judicial in nature.” But this ignores the Supreme Court’s repeated reminder that parallel state court proceedings do not detract from the “virtually unflagging obligation” of federal courts “to exercise the jurisdiction given them.” Sprint, 571 U.S. at 77. Category 3 is limited to civil proceedings involving orders “uniquely in furtherance of the state courts’ ability to perform their judicial functions.” Category 3 does not include “a state judicial proceeding reviewing legislative or executive action,” such as denying 375 a zoning permit. NOPSI, 491 U.S. at 368; see FCA US, LLC v. Spitzer Autoworld Akron, LLC, 887 F.3d 278, 290 (6th Cir. 2018) (“[t]he Ohio administrative proceeding [at issue] has no relation to . . . orders that are uniquely in furtherance of the judicial function of the Ohio courts.”). Nor is Category 3 triggered simply because the state civil administrative proceeding involves a quintessentially state-law matter such as zoning and land-use planning. See, e.g., Cavanaugh v. Geballe, 28 F.4th 428, 432-35 (2d Cir. 2022) (probate proceedings); Cook v. Harding, 879 F.3d 1035, 1040-41 (9th Cir. 2018) (family law); Boerschig v. Trans-Pecos Pipeline, L.L.C., 872 F.3d 701, 705 n.2 (5th Cir. 2017) (eminent-domain proceedings). Because this parallel federal action does not interfere with “the state courts’ ability to perform their judicial functions,” it does not fall within the narrow parameters of NOPSI Category 3 and therefore does not deprive the district court of jurisdiction. The Judgment of the district court is reversed and the case is remanded to the district court for further proceedings not inconsistent with this opinion.2 On remand, given the parallel state court proceeding, we urge the district court to focus on the 2 As we conclude the district court erred in dismissing 375’s Complaint without prejudice, we need not address the court’s denial of 375’s motion for post-judgment relief under Fed. R. Civ. P. 59(e). -9- Supreme Court’s reminder that a decision not to abstain “do[es] not call into question, the federal courts’ discretion in determining whether to grant certain types of relief.” NOPSI, 491 U.S. at 358-59; cf. Window World, Int’l, LLC v. O’Toole, 21 F.4th 1029, 1034 (8th Cir. 2022). ______________________________ -10-	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488615/	Case: 22-161 Document: 11 Page: 1 Filed: 11/22/2022 NOTE: This order is nonprecedential. United States Court of Appeals for the Federal Circuit ______________________ In re: SOUND VIEW INNOVATIONS, LLC, Petitioner ______________________ 2022-161 ______________________ On Petition for Writ of Mandamus to the United States Patent and Trademark Office in No. 90/015,011. ______________________ ON PETITION ______________________ Before LOURIE, TARANTO, and STARK, Circuit Judges. STARK, Circuit Judge. ORDER Sound View Innovations, LLC petitions for a writ of mandamus to vacate the United States Patent and Trade- mark Office’s (“PTO”) order granting a request for ex parte reexamination and to remand with instructions to termi- nate proceedings. The Director of the PTO opposes the pe- tition. Sound View replies. We deny the petition. BACKGROUND Sound View is the owner of U.S. Patent No. 6,708,213 (“the ’213 patent”), which relates to caching of streaming multimedia data from a content provider over a network to Case: 22-161 Document: 11 Page: 2 Filed: 11/22/2022 2 IN RE: SOUND VIEW INNOVATIONS, LLC a client’s computer. In 2019, Sound View filed a patent in- fringement suit against DISH Network L.L.C., DISH Tech- nologies, L.L.C., and Sling TV L.L.C. (collectively, “DISH”). In 2020, DISH petitioned the PTO for inter partes review (“IPR”), arguing that claim 16 of the ’213 patent was antic- ipated and/or obvious based on two references: Sen and Geagan. * The Patent Trial and Appeal Board denied the petition, finding no reasonable likelihood of prevailing on those challenges. In particular, the Board determined that DISH had not shown a reasonable likelihood that Sen and Geagan taught the claimed step of “adjusting a data trans- fer rate,” DISH Network LLC v. Sound View Innovations, LLC, No. IPR2020-00969, 2020 WL 6951823, at 13 (P.T.A.B. Nov. 25, 2020). Five months later, DISH requested ex parte reexami- nation of claim 16 of the ’213 patent based on Sen and Geagan in combination with a new reference, Zheng, which DISH alleged “discloses adjusting a data rate, to the extent that adjusting a data transfer rate is not disclosed by the combination of Sen and Geagan.” Appx029. In response, Sound View petitioned the PTO to reject DISH’s reexami- nation request under 35 U.S.C. § 325(d), arguing that the reexamination request raised “substantially the same” art or arguments that were raised by DISH in the prior IPR petition. Appx137 (quoting the language of § 325(d)). On June 16, 2022, the examiner granted DISH’s re- quest and ordered reexamination of claim 16, determining that the combination of Sen, Geagan, and Zheng raised a substantial new question of patentability with respect to Hulu, LLC and Walmart Inc. et al. also filed sepa- rate IPR petitions challenging the same patent. The PTO denied institution based on Hulu’s petition, which relied on different prior art than in DISH’s petition. Walmart et al.’s petition also relied on the Sen reference, but those parties settled before the PTO issued a decision on institution. Case: 22-161 Document: 11 Page: 3 Filed: 11/22/2022 IN RE: SOUND VIEW INNOVATIONS, LLC 3 claim 16. In rejecting Sound View’s § 325(d) arguments, which were based on this court’s decision in In re Vivint, Inc., 14 F.4th 1342 (Fed. Cir. 2021), the examiner found that the reexamination petition was based on different grounds than DISH’s prior IPR petition that was denied and the “requester has not presented serial challenges to the ’213 patent, other than the single prior IPR petition.” Appx014. Sound View then filed this mandamus petition challenging that decision. We have jurisdiction under 28 U.S.C. §§ 1651(a) and 1295(a)(4)(A). See Mylan Lab’ys Ltd. v. Janssen Pharmaceutica, N.V., 989 F.3d 1375, 1379– 81 (Fed. Cir. 2021). DISCUSSION A writ of mandamus is a “drastic and extraordinary remedy” reserved for “exceptional circumstances.” Cheney v. U.S. Dist. Ct. for D.C., 542 U.S. 367, 380 (2004) (internal quotation marks and citations omitted). A petitioner must show that it has no other adequate means to obtain the de- sired relief and has a “clear and indisputable” right to the writ. Id. at 380–81 (internal quotation marks and citations omitted). And even when those two requirements are met, the issuing court, in the exercise of its discretion, must still be satisfied that the writ is appropriate under the circum- stances. Id. at 381. This demanding standard has not been met here. Mandamus relief is unavailable because a post-final decision appeal is an adequate remedy by which Sound View may seek to obtain relief based on its § 325(d) chal- lenge. See Vivint, 14 F.4th at 1350–54 (reviewing a § 325(d) challenge following appeal from the Board’s final decision); see also Automated Merch. Sys., Inc. v. Lee, 782 F.3d 1376, 1382 (Fed. Cir. 2015) (denying petition seeking to terminate ongoing reexamination due to “adequate rem- edy” of an appeal). Sound View argues that it will be forced to endure a wasteful and burdensome validity challenge to achieve meaningful judicial review. However, “the burden Case: 22-161 Document: 11 Page: 4 Filed: 11/22/2022 4 IN RE: SOUND VIEW INNOVATIONS, LLC of participating in the proceedings at issue” is typically in- sufficient to establish entitlement to the exceptional rem- edy of mandamus where, as here, the issue may be reviewed in a typical appeal. Automated Merch. Sys., 782 F.3d at 1382; see Cheney, 542 U.S. at 380–81 (“[T]he writ will not be used as a substitute for the regular appeals pro- cess.”); Bankers Life & Cas. Co. v. Holland, 346 U.S. 379, 383–84 (1953) (noting that the possibility of a “myriad of legal and practical problems as well as inconvenience” does not ordinarily warrant mandamus). Moreover, without drawing any definitive conclusion, we cannot say that Sound View has shown a clear and in- disputable right to terminate the reexamination proceed- ings under § 325(d). The examiner concluded that the addition of the Zheng reference presented different argu- ments that addressed in a different way the claimed limi- tation the Board found petitioner had not shown to be present in the reference combination underlying the earlier IPR petition. Appx012–013. That determination has not been shown by Sound View to be so clearly contrary to the law or the record as to warrant mandamus. Sound View’s reliance on our decision in Vivint does not change that calculus. In that case, we held, on direct ap- peal after a final decision, that the PTO had arbitrarily and capriciously applied § 325(d) when it granted the re- quester’s nearly identical request for ex parte reexamina- tion based on the same arguments raised in its previous IPR petition that was denied based on the requester’s abu- sive filing practices. 14 F.4th at 1354. Here, the PTO’s decision to allow the reexamination to proceed was a case- specific exercise of discretion that does not create the same kind of clear, arbitrary departure from prior agency deci- sions that was at issue in Vivint. And whatever the strength of the merits of Sound View’s § 325(d) challenge to that decision may be in an ordinary appeal, it has not shown a clear and indisputable right to mandamus relief. Case: 22-161 Document: 11 Page: 5 Filed: 11/22/2022 IN RE: SOUND VIEW INNOVATIONS, LLC 5 Accordingly, IT IS ORDERED THAT: The petition is denied. FOR THE COURT November 22, 2022 /s/ Peter R. Marksteiner Date Peter R. Marksteiner Clerk of Court	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488607/	In the United States Court of Appeals For the Seventh Circuit ____________________ No. 22-1489 ELIZABETH HUSTON, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. HEARST COMMUNICATIONS, INC., Defendant-Appellee. ____________________ Appeal from the United States District Court for the Central District of Illinois. No. 21-cv-01196 — Michael M. Mihm, Judge. ____________________ ARGUED OCTOBER 25, 2022 — DECIDED NOVEMBER 22, 2022 ____________________ Before SYKES, Chief Judge, and FLAUM and LEE, Circuit Judges. FLAUM, Circuit Judge. Elizabeth Huston, a Good Housekeep- ing magazine subscriber, ﬁled a putative class action com- plaint alleging a media conglomerate, Hearst Communica- tions, Inc., violated her right of publicity by oﬀering to sell and selling mailing lists containing her, and 9.1 million other subscribers’, identifying information. As redress, Huston 2 No. 22-1489 seeks statutory damages as provided by the Illinois Right of Publicity Act (IRPA) and an injunction requiring Hearst to ob- tain prior written consent before selling its subscribers’ infor- mation in this manner. The district court granted Hearst’s motion to dismiss be- cause it found Huston failed to suﬃciently allege an IRPA vi- olation. Judgment was entered, and this appeal ensued. For the following reasons, we aﬃrm the judgment of the district court. I. Background Huston alleges Hearst violated IRPA by oﬀering for sale and selling mailing lists that identiﬁed its magazine subscrib- ers, including Huston, by name, address, “gender, age, eth- nicity, income, political party, religion, and charitable dona- tion history,” among other personal attributes. Two mailing lists are at issue: (1) the Good Housekeeping Mailing List and (2) the Hearst Corporate Masterﬁle & Enhanced Mailing List. The ﬁrst contains personal information for “each of the 1,715,229 active U.S. subscribers to Good Housekeeping.” The other contains the same information for “all 9,108,589 active U.S. subscribers to all of Hearst’s various publications.” While Hearst directed its oﬀer to sell these mailing lists to the “com- munity at large,” the intended audience was data miners, ag- gregators, and brokers who use this information to target sub- scribers with direct-mail advertisements. IRPA provides: “A person may not use an individual’s identity for commercial purposes during the individual’s life- time without having obtained previous written consent.” 765 Ill. Comp. Stat. 1075/30(a). According to Huston, oﬀering to sell and selling these mailing lists violates IRPA because it No. 22-1489 3 constitutes using or holding out her identity for a commercial purpose. Hearst ﬁled a motion to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint failed to suﬃciently allege a commercial purpose and thus failed to state an IRPA claim. The district court agreed and granted Hearst’s motion. Huston declined to amend her com- plaint, the district court entered judgment in favor of Hearst, and Huston subsequently appealed. II. Discussion On appeal “[w]e review de novo the district court’s grant of [a] Rule 12(b)(6) motion to dismiss, accepting all well- pleaded factual allegations as true and drawing all reasonable inferences in [the plaintiﬀ’s] favor.” Leszanczuk v. Carrington Mortg. Servs., LLC, 21 F.4th 933, 937 (7th Cir. 2021). A. IRPA Claim IRPA codified and eliminated the common law tort of “ap- propriation of another’s name or likeness,” Dwyer v. American Express Co., 652 N.E.2d 1351, 1353 (Ill. App. Ct. 1995), and se- cured the right for a “person to control the commercial value of his or her identity,” Toney v. L'Oreal USA, Inc., 406 F.3d 905, 910 (7th Cir. 2005). To state a claim for a violation of IRPA, the plaintiff must allege: (1) an appropriation of the plaintiff’s identity, (2) without the plaintiff’s written consent, and (3) for defendant’s commercial purpose. § 30(a); see also Blair v. Nev. Landing P'ship, 859 N.E.2d 1188, 1192 (Ill. App. Ct. 2006) (dis- cussing elements of IRPA claim where defendants used plain- tiff’s photograph to advertise their restaurant and casino). Hearst does not dispute that the mailing lists identify Hus- ton and that Huston did not consent to being included on the 4 No. 22-1489 mailing lists. As a result, this appeal centers on the last ele- ment—whether Hearst used Huston’s identity for a commer- cial purpose. 1. Commercial Purpose IRPA defines “commercial purpose” disjunctively as “the public use or holding out of an individual’s identity (i) on or in connection with the offering for sale or sale of a product, merchandise, goods, or services; (ii) for purposes of advertis- ing or promoting products, merchandise, goods, or services; or (iii) for the purpose of fundraising.” § 5. Huston’s principal argument arises under the first prong of the Act’s definition: that Hearst publicly used or held out Huston’s identity “on or in connection with the offering for sale or sale of” the mailing lists. Id. The district court did not explicitly consider whether Hus- ton’s identity was used or held out by Hearst to sell the mail- ing lists. Instead, it concluded that IRPA liability is limited to instances where a person’s identity is used or held out to sell a separate product, and the mailing lists are not separate from Huston’s identity. 1 However, “[w]e may affirm on any ground that the record supports and that the appellee has not 1 On appeal, Huston argues that IRPA’s first commercial use prong (“on or in connection with the offering for sale or sale of a product”) does not require that the person’s identity be used to sell a separate product; only prong two (“for the purposes of advertising or promoting products”) has that requirement. The difference between a prong one and prong two violation is obscure, and there is no guidance from the Illinois Supreme Court. Ultimately, the distinction is not determinative to our resolution of this appeal. Even if the mailing lists are separate products, we affirm be- cause Huston’s identity was not used or held out in connection with their sale, advertisement, or promotion. No. 22-1489 5 waived.” Albert v. Oshkosh Corp., 47 F.4th 570, 577 (7th Cir. 2022) (citation and internal quotation marks omitted), reh'g denied, No. 21-2789, 2022 WL 4372363 (7th Cir. Sept. 21, 2022). The parties briefed the “public use or holding out” issue be- fore the district court and on appeal, so we will consider it. On this issue, the parties analogized to two recent IRPA cases in the background report context. In both cases, Do- browolski v. Intelius, No. 17-CV-1406, 2018 WL 11185289, at 3 (N.D. Ill. May 21, 2018), and Lukis v. Whitepages Inc., 542 F. Supp. 3d 831, 837−38 (N.D. Ill. 2020), the courts considered whether free previews and internet ads for paywalled back- ground reports constitute commercial use. The previews and ads held out a limited amount of information about the plain- tiffs, but a user could receive more information by purchasing a background report. Dobrowolski, 2018 WL 11185289, at 1; Lukis, 542 F. Supp. 3d at 835. The courts reached conflicting outcomes, hinging on whether the paywalled reports were sufficiently separate from the plaintiff’s identity or whether the two were effectively merged. Dobrowolski, 2018 WL 11185289, at 3; Lukis, 542 F. Supp. 3d at 838. However, in both cases it was clear that the free preview was intended to en- courage purchase of the background report. Dobrowolski, 2018 WL 11185289, at 1; Lukis, 542 F. Supp. 3d at 838. What distinguishes this case from the background report cases—and is outcome determinative—is that Huston did not allege that Hearst solicited mailing list purchasers by publi- cizing her information. She did not allege prospective mailing list purchasers were able to see her or any other subscribers’ information, in whole or part, prior to their purchase. She also did not allege her name was used to sell or promote the mail- ing lists themselves. Instead, Huston alleged that her identity 6 No. 22-1489 was included as part of the product sold. This is different from Dobrowolski and Lukis, where a free preview held out limited information about the plaintiffs to entice a commercial transaction. Dobrowolski, 2018 WL 11185289, at 1; Lukis, 542 F. Supp. 3d at 838; cf. U.S. News & World Rep., Inc. v. Avrahami, No. 95-1318, 1996 WL 1065557, at 4, 7 (Va. Cir. Ct. June 13, 1996) (concluding that “[t]he inclusion of an individual name as part of a mailing list constitutes neither a use for an adver- tising purpose nor a use for the purpose of trade" under a sim- ilar Virginia publicity statute because “U.S. News did not identify any individual name that would be contained on the [list]” or “promote or advertise its list” in that manner). Huston tries to minimize this distinction by arguing that “commercial purpose” includes both “public use” and “hold- ing out,” and that the word “public” does not modify “hold- ing out.” Consequently, she contends that Hearst did not need to publicly hold out her identity; it violated IRPA by in- cluding her name and information on a mailing list that any- one could purchase. This is a nonstarter. Regardless of whether “public” mod- ifies “holding out,” Huston’s argument ignores the timing re- quirement implicit in IRPA’s construction. On its face, the statute prohibits the use or holding out of a person’s identify- ing information to offer to sell or sell a product, piece of mer- chandise, good, or service. § 5. Thus, the statute contemplates a use or holding out of an individual’s identity with the aim of effectuating a sale. Necessarily, then, any use or holding out must either accompany an offer to sell or precede the sale, see Toney, 406 F.3d at 907 (where model’s image was used on the “packaging of a hair-relaxer product”), but it cannot fol- low the sale. A person’s identity cannot be employed to sell a No. 22-1489 7 product if their identity is only revealed after the sale is com- pleted. Legislative history supports this reading. On the Illinois House of Representatives floor, the Act’s sponsoring repre- sentative explained IRPA would require consent before using someone’s likeness “[i]n order to sell something.” 90th Ill. Gen. Assem., House Proceedings, April 24, 1997, at 226 (state- ments of Rep. Turner). He went on to offer an example of a commercial depicting “Fred Astaire dancing with a vacuum cleaner,” explaining that the vacuum company using such an advertisement without Astaire’s consent would be liable. Id. Under the facts Huston alleged, her information is dis- closed only after the sale of the mailing list is consummated and the purchaser begins perusing the 9.1 million names. Huston’s identity would not elicit the sale of the mailing list in the way Fred Astaire dancing with a vacuum cleaner would elicit viewers to buy the vacuum cleaner, or the way a model’s image would elicit someone to purchase a box of hair relaxer. Huston’s name and other information may have been sold, but it was not used to sell anything. That brings Hus- ton’s claim outside IRPA’s ambit. An Illinois appellate court recognized the significance of the “use or holding out” requirement in Trannel v. Prairie Ridge Media, Inc., 2013 IL App (2d) 120725. In that case, a mag- azine published a photograph of the plaintiff and her daugh- ter, taken originally to publicize the winner of its garden com- petition, on the cover of a media kit it sent to solicit advertis- ers. Id. ¶¶ 1, 4. The court interpreted IRPA to “prohibit[] the holding out—meaning the representation—of an individual’s identity on or in connection with certain activities.” Id. ¶ 21. Accordingly, the court concluded that the magazine violated 8 No. 22-1489 IRPA by “placing plaintiff’s and her daughter’s identities on the cover” of a media kit which offered for sale advertising services. Id. ¶¶ 21−22. The photo “was ‘on’ or ‘in connection’ with the media kit,” which in turn was “an offer for the sale of … [advertising] ‘design and production’ services.” Id. ¶ 22. There is no corollary to the media kit in Huston’s case. Her identity was not placed on the cover of the mailing list or held out to aid, effectuate, or propose a commercial transaction. Perhaps recognizing the pitfalls of her first statutory inter- pretation argument, Huston offers another: that Hearst vio- lated IRPA by using her identity on a product. However, IRPA does not prohibit the use of someone’s identity on a product. It prohibits, under the first commercial use prong, the use of someone’s identity “on … the offering for sale or sale of a product.” § 5. Huston’s reading leaves off an im- portant verb—sale. It is not enough for Huston’s name and other information to appear on or within a product. Her identity must help sell something—whether it is that product or a separate product or service. If Huston were correct, the Trannel court could have concluded its analysis after finding that the plaintiff’s and her daughter’s identities appeared on the media kit. 2013 IL App (2d) 120725, ¶ 21. Instead, it was integral that the me- dia kit was used to try to sell something else (there, advertis- ing space in the magazine). Id. ¶ 22. Huston’s cited cases on this issue are unavailing. First, Ainsworth v. Century Supply Co., a pre-IRPA case, is factually dissimilar. 693 N.E.2d 510, 512 (Ill. App. Ct. 1998). There, the plaintiff consented to be in a video to instruct Century Sup- ply’s customers on how to install tile. Id. Subsequently, Cen- tury Supply hired a third party, TCI, to create a television No. 22-1489 9 commercial, and TCI used a clip from the plaintiff’s instruc- tional video in the commercial. Id. Ainsworth did not consider the central issue in this case: whether the plaintiff’s identity was used for a commercial purpose under IRPA. Instead, the court evaluated the common law element of “commercial benefit” and focused on whether TCI benefitted from using the plaintiff’s image in the commercial it created for Century Supply. Id. at 513. The court concluded that it had, but there was no dispute that the commercial was designed to advertise Century Supply’s services. Id. at 513−15. Put in IRPA terms: There was no dispute that Century Supply’s services were what the plaintiff’s identity was held out to sell. Second, in Brown v. ACMI Pop Division, at issue was the defendant’s display of “a catalogue of over 2.1 million photo- graphic images it owns so that customers can identify the im- ages they choose to license.” 873 N.E.2d 954, 956 (Ill. App. Ct. 2007). Ultimately the court affirmed denial of the defendant’s motion to dismiss “[i]n light of the vast difference of opinion regarding the interpretation of the definition of what [the de- fendant] s[old] and the legal effect of such sales.” Id. at 962. The dispute centered on whether the defendant’s display of the preview images (low-resolution or watermarked ver- sions of the photographs) fell under an exception to IRPA (be- cause some of the defendant’s customers were news media) and whether federal copyright law applied where the defend- ant only licensed—and did not sell—the photographs of the plaintiff. Id. at 959–64. But again, like Ainsworth, it was clear that the plaintiff’s identity—represented in the preview pho- tos—was held out to advertise the sale of a license to use the high-resolution version of the same image. Huston alleged no facts suggesting her identity was held out in furtherance of 10 No. 22-1489 the sale of the mailing lists in a similar way to how the low- resolution images were held out to sell copyright licenses. As such, Brown is uninstructive. Last, Huston cites Doe v. Flava Works, Inc., 2014 IL App (1st) 121491-U, a nonprecedential order under Illinois Su- preme Court Rule 23(e)(1). Even putting aside the lack of precedential value, Flava Works is not persuasive because it does not discuss how IRPA was violated. The decision was limited to the plaintiff’s monetary recovery under the Act. Id. ¶ 1. A videographer brought an IRPA claim against an adult video producer because his likeness and voice were included in films without his consent. Id. ¶ 4. The appellate court did not consider or discuss the trial court’s conclusion that the plaintiff’s identity was used “for a commercial purpose be- cause plaintiff’s image could be identified during two parts of the [films] and the [films] were sold to the public.” Id. ¶ 6. If this limited reasoning was the extent of the trial court’s analysis, Flava Works would be in conflict with other Illinois decisions such as Trannel, as well as the plain reading of IRPA. However, it is possible the trial court’s reasoning is not fully reflected in the appellate court opinion. The tension would be resolved if, for example, the plaintiff’s image was used in pro- motional materials such as DVD cover art or free previews of the films. That would bring the fact pattern closer to Toney or Lukis. Regardless, in light of other, more persuasive authority, Flava Works does not alter our conclusion. 2. Alternative IRPA Arguments Huston offers two alternative bases for reversing the dis- trict court’s decision. First, she attempts to cobble together a connection between her identifying information and her No. 22-1489 11 purchase of the Good Housekeeping subscription. Second, she argues Hearst’s conduct also runs afoul of IRPA’s second commercial use prong, which concerns advertisement or pro- motion. Neither argument is persuasive. a. Huston’s Subscription to Good Housekeeping Huston contends that Hearst impermissibly used her identity in connection with its sale of the Good Housekeeping subscription to her. The sale of a magazine subscription fits neatly into IRPA’s definition of commercial use, much like the sale of advertising space in Trannel. The magazine is plainly a product. However, this argument can go no further. IRPA requires that the individual’s identity be used or held out to advance a commercial goal (selling, advertising, fundraising, etc.) and, necessarily, precede or accompany the activity. The stumbling block for Huston’s argument is that her identity was not used to sell her a Good Housekeeping sub- scription or held out in connection with that sale. Huston giv- ing her name and other identifying information to Hearst for purposes of subscribing to the magazine does not count. § 5. IRPA is clear that Hearst must be the party “us[ing] or hold- ing out … an individual’s identity.” Id. Therefore, any “hold- ing out” of Huston’s identity by Hearst could not have been in furtherance of the sale of Good Housekeeping to Huston. b. Endorsement Theory Huston’s final alternative argument is that including her information on the mailing list violated IRPA’s “endorsement prong” because it constitutes using Huston’s identity to en- dorse or promote Good Housekeeping without her consent. While “endorse” does not appear anywhere in the statute, Huston seems to argue that Hearst’s mailing lists violate the 12 No. 22-1489 second commercial use prong: public use or holding out of an individual’s identity “for purposes of advertising or promot- ing products, merchandise, goods, or services.” § 5. The problem is, Huston’s complaint does not allege facts to support a reasonable inference that Hearst used the mailing list to promote Good Housekeeping. Instead, the complaint de- votes pages to discussing the practice of data mining, the threat the industry poses to consumers, and the profit it gen- erates for companies willing to sell their customers’ infor- mation. She alleges that “when companies like Hearst sell the identities of its customers to data aggregators, … [they] put[] almost anyone within the reach of fraudulent telemarketers and other criminals.” This practice “puts consumers … at risk of serious harm from scammers,” “while Hearst profits hand- somely.” Therefore, Huston’s complaint does not plausibly suggest that Hearst’s commercial goal in holding out its cus- tomer mailing lists is to promote its own magazines. In sum, Huston failed to allege that Hearst used or held out her identity to effectuate the sale of the mailing lists. Be- cause Huston did not allege that Hearst made any portion of her information available to prospective mailing list purchas- ers or used her identifying information to solicit purchasers or consummate the sale, Hearst did not use or hold out Hus- ton’s information as is required for IRPA liability. Huston also failed to allege facts to support either of her alternative theo- ries: that Hearst held out her information in connection with her purchase of a Good Housekeeping subscription or that Hearst used her identifying information to promote its own magazines. As a result, Huston’s complaint fails to state a claim under IRPA. No. 22-1489 13 III. Conclusion For the reasons explained, the judgment of the district court is AFFIRMED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488613/	United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT Argued September 15, 2022 Decided November 22, 2022 No. 21-1270 IN RE: CENTER FOR BIOLOGICAL DIVERSITY AND CENTER FOR FOOD SAFETY, PETITIONERS FMC CORPORATION AND SYNGENTA CROP PROTECTION, LLC, INTERVENORS On Petition For Writ of Mandamus Stephanie M. Parent argued the cause for petitioners. With her on the petition for writ of mandamus and the reply was Jonathan C. Evans. Kamela A. Caschette, Attorney, U.S. Department of Justice, argued the cause for respondent. With her on the opposition to the petition for writ of mandamus were Todd Kim, Assistant Attorney General, and Patrick R. Jacobi, Attorney. Thomas A. Lorenzen argued the cause for intervenors. With him on the response to the petition for writ of mandamus were Kirsten L. Nathanson and Elizabeth B. Dawson. Amanda S. Berman entered an appearance. 2 Before: MILLETT and RAO, Circuit Judges, and TATEL, Senior Circuit Judge. Opinion for the Court filed by Senior Circuit Judge TATEL. TATEL, Senior Circuit Judge: Eight years ago, the Environmental Protection Agency registered a new pesticide without first determining, as required by the Endangered Species Act, whether it would have an adverse effect on endangered species. Then, five years ago, our court ordered EPA to fulfill that statutory obligation. Notwithstanding Congress’s mandate and our order, EPA has failed to make the required determination. Now, the Center for Biological Diversity and the Center for Food Safety seek the only legal relief left that would force EPA to comply with the statute: a writ of mandamus. For the reasons set forth below, we shall grant the writ. I. Two statutes lie at the heart of this case: the Endangered Species Act (ESA) and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The ESA, a broad decree to all executive agencies, requires them to consult with either the National Marine Fisheries Service or the Fish and Wildlife Service (“the Services”) to “insure that any action authorized, funded, or carried out . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in [their habitats’] destruction.” 16 U.S.C. § 1536(a)(2). If this seems a heavy burden for agencies to carry, that is by design: Congress “struck [the balance] in favor of affording endangered species the highest of priorities.” Tennessee Valley Authority v. Hill, 437 U.S. 153, 194 (1978). 3 An agency’s first step toward ESA compliance is an effects determination, an initial review to determine whether a proposed action “may affect” an endangered species or its habitat. 50 C.F.R. § 402.14(a). If the agency finds that its proposed action will “not affect any listed species or critical habitat” in any way, then it need not consult the Services. Center for Biological Diversity v. Department of Interior, 563 F.3d 466, 475 (D.C. Cir. 2009). But if it finds that the proposed action may affect an endangered species, then it must consult. 50 C.F.R. §§ 402.14(a); 402.13(a). This required consultation is critical because it includes inter-agency consideration of what plausible mitigation measures could be implemented to avoid adverse effects on endangered and threatened species. See 16 U.S.C. § 1536(a)(2); 50 C.F.R. § 402.14. Consultation, then, provides a roadmap forward that balances accommodating agency priorities with maintaining ESA compliance. See 50 C.F.R. § 402.14(h)(2). The second statute, FIFRA, regulates the sale and distribution of pesticides. No pesticide may be sold in the United States unless it is first registered with EPA. 7 U.S.C. § 136a(a). After receiving an application to register a pesticide, EPA must approve the application if it meets composition and labeling requirements and will “perform its intended function without unreasonable adverse effects on the environment” if used in accordance with widespread practices. 7 U.S.C. § 136a(c)(5). An EPA order registering a pesticide following notice-and-comment—like the one at issue in this case—may be challenged only in this court. Center for Biological Diversity v. EPA, 861 F.3d 174, 187 (D.C. Cir. 2017). EPA has long had a fraught relationship with the ESA. It has made a habit of registering pesticides without making the required effects determination. As pesticides registered without effects determinations pile up, private parties regularly haul 4 EPA into federal court to force ESA compliance. EPA has faced at least twenty lawsuits covering over 1,000 improperly registered pesticides. See Environmental Protection Agency, Balancing Wildlife Protection and Responsible Pesticide Use: How EPA’s Pesticide Program Will Meet its Endangered Species Act Obligations 4 (2022). EPA’s backlog even caught Congress’s attention. In 2014, it directed EPA and the Services to file a report describing “approaches and actions taken” to streamline the FIFRA and ESA processes. Agricultural Act of 2014, Pub. L. No. 113-79, § 10013, 128 Stat. 649, 951. As a result, an interagency working group now regularly reports to the House Committee on Agriculture and the Senate Committee on Agriculture, Nutrition, and Forestry on its progress. See Agriculture Improvement Act of 2018 § 10115, 7 U.S.C. § 136a(c)(11). The pesticide involved in this case, cyantraniliprole, provides protection from pests that feast on citrus trees and blueberry bushes. EPA classified cyantraniliprole as a “Reduced Risk” pesticide, a special category for pesticides it determines have a lower risk to human health and many non- target organisms. But in truth, cyantraniliprole poses a reduced risk to only some species. EPA’s own risk assessment indicates that it is “slightly to very highly toxic to freshwater invertebrates; moderately to highly toxic to estuarine/marine invertebrates[;] highly toxic to benthic invertebrates; [and] highly to very highly toxic to terrestrial insects.” Environmental Protection Agency, Environmental Fate and Ecological Risk Assessment for the Registration of the New Chemical Cyantraniliprole—Amended 57 (2013). Most significant for our purposes, EPA concluded that cyantraniliprole “ha[s] the potential for direct adverse effects to federally listed threatened/endangered” species. Id. at 5. Even so, EPA registered cyantraniliprole in 2014—without an effects determination and without consulting with the Services. 5 Cyantraniliprole’s registration has come before our court before. In 2014, petitioners, the Center for Biological Diversity and the Center for Food Safety (“the Centers”), filed a petition for review under FIFRA to force EPA to make an effects determination and, if required, consult with the Services. Center for Biological Diversity, 861 F.3d 174. EPA willingly admitted that it “ha[d] not made an ‘effects’ determination or initiated consultation . . . consistent with the ESA and its implementing regulations.” Id. at 188. After satisfying itself that it had exclusive jurisdiction under FIFRA to review cyantraniliprole’s registration and after EPA’s frank admission of culpability, it took this court only a paragraph to find that EPA had violated the ESA. Despite the faulty registration, the Centers chose not to seek vacatur, an understandable decision given that our court determined that vacating cyantraniliprole’s registration would “‘temporarily defeat . . . the enhanced protection of the environmental values covered by’” the registration and encourage the use of older, more toxic pesticides in cyantraniliprole’s place. Id. at 188–89 (quoting North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008) (per curiam)). The court remanded with instructions to EPA to replace the registration order with one “consistent with [its] opinion,” id. at 189—i.e., a new registration order signed after an effects determination and any required consultation. In the ensuing five years, however, EPA made no progress toward completing cyantraniliprole’s effects determination—that is, no progress until earlier this year. Only then did EPA schedule cyantraniliprole’s effects determination, though it took no steps to complete it. Matuszko Decl. ¶ 25 & n.22. Unsatisfied, the Centers have returned to court, seeking a writ of mandamus under the All Writs Act, 28 U.S.C. § 1651, to require EPA to finally perform its ESA duties. In support, 6 they argue that EPA is eight years past its statutory deadline, has failed to comply with our remand order, and is risking the health and habitats of endangered species. EPA responds that despite this near decade-long delay, it acted “reasonably by prioritizing development of a programmatic framework for addressing its pesticide program’s extensive ESA obligations.” EPA Br. 1. Cyantraniliprole’s registration owners, Syngenta Crop Protection, LLC and FMC Corporation, have intervened, arguing that vacating cyantraniliprole’s registration would be “disruptive.” Intervenors’ Br. 28. Fortunately for them, although the Centers originally requested that we order EPA to complete its effects determination within six months with automatic vacatur if it missed that deadline, counsel for the Centers made clear at oral argument that they were no longer seeking vacatur because EPA has now committed to completing the effects determination by September 2023. Matuszko Decl. ¶ 25 (“EPA has committed to the following schedule for making effects determinations: . . . Sept. 2023[:] final effects determinations for cyantraniliprole.”). The Centers now seek only a court order enforcing that deadline. Oral Arg. Rec. 4:14–19. II. Mandamus is an “extraordinary remedy, reserved only for the most transparent violations of a clear duty to act.” In re Bluewater Network, 234 F.3d 1305, 1315 (D.C. Cir. 2000). A petitioner seeking mandamus must first establish that the agency has violated “a crystal-clear legal duty.” In re National Nurses United, 47 F.4th 746, 752 (D.C. Cir. 2022). Absent a violation of a clear duty, this court is powerless to grant mandamus. 7 Violating a clear duty, however, is just the beginning of the mandamus analysis. A mandamus petitioner must show that it “has no other adequate means to attain the relief it desires.” In re Core Communications, 531 F.3d 849, 860 (D.C. Cir. 2008) (internal quotation marks and alteration omitted). Moreover, a court may grant mandamus relief only when it also “finds compelling equitable grounds.” In re Medicare Reimbursement Litigation, 414 F.3d 7, 10 (D.C. Cir. 2005) (internal quotation marks and alteration omitted). On the equities, the central question is “whether the agency’s delay is so egregious as to warrant mandamus.” Core Communications, 531 F.3d at 855 (internal quotation marks omitted). The “hexagonal” TRAC factors guide this inquiry: (1) the time agencies take to make decisions must be governed by a rule of reason; (2) where Congress has provided a timetable or other indication of the speed with which it expects the agency to proceed in the enabling statute, that statutory scheme may supply content for this rule of reason; (3) delays that might be reasonable in the sphere of economic regulation are less tolerable when human health and welfare are at stake; (4) the court should consider the effect of expediting delayed action on agency activities of a higher or competing priority; (5) the court should also take into account the nature and extent of the interests prejudiced by delay; and (6) the court need not find any impropriety lurking behind agency lassitude in order to hold that agency action is unreasonably delayed. 8 Telecommunications Research & Action Center (TRAC) v. FCC, 750 F.2d 70, 80 (D.C. Cir. 1984) (internal quotation marks and citations omitted). The mandamus petition in this case arises from relatively unique circumstances that implicate two distinct sources of mandamus jurisdiction under the All Writs Act: our power to compel unreasonably delayed agency activity and our power to require compliance with our previously issued orders. See NetCoalition v. SEC, 715 F.3d 342, 354 (D.C. Cir. 2013) (frustration of previous orders); National Nurses United, 47 F.4th at 752 (unreasonable agency delay). In a standard unreasonable delay case, we evaluate an agency’s delays in its own rulemaking or in responding to private parties’ requests. Core Communications, 531 F.3d at 856. But here, we also face EPA’s five-year-long failure to respond to our own order. When an agency ignores a court order, it creates a “different [problem].” Id. It “nullifie[s] our determination that its [action is] invalid” and “insulates its nullification of our decision from further review.” Id. By ignoring our instruction to “replace[]” cyantraniliprole’s registration order with “an order consistent” with the ESA, Center for Biological Diversity, 861 F.3d at 189, EPA prevents us from reviewing that new order. EPA has defied both the ESA and this court. The executive stands alone in opposition to both the judiciary and the legislature. In these situations, although the TRAC factors are “not unimportant,” a lesser showing is necessary to justify mandamus. Core Communications, 531 F.3d at 855–56. That said, mandamus in this case is warranted even under the ordinary TRAC factors. III. Our analysis flows easily from this framework. EPA has a “clear duty” to perform an effects determination before registering cyantraniliprole. Center for Biological Diversity, 9 861 F.3d at 188. It has a parallel “clear duty” to obey our order. Core Communications, 531 F.3d at 856. And EPA does not contest that the petitioners lack an adequate alternative remedy. Nor could it: a writ of mandamus is the only way to compel EPA to perform its clear duties in this case. The sole question, then, is whether EPA’s delay in undertaking an effects determination is “so egregious as to warrant mandamus.” Id. at 855 (internal quotation marks omitted). It is. Although EPA’s failure to “heed our remand” is the “[d]ecisive” factor here, In re People’s Mojahedin Org. of Iran, 680 F.3d 832, 837 (D.C. Cir. 2012) (per curiam), we shall nonetheless examine the TRAC factors, as we have in other cases. See id. at 837–38; Core Communications, 531 F.3d at 855–58. Congress set a plain deadline (TRAC factors one and two). The ESA required EPA to issue an effects determination and engage in any required consulting before registering cyantraniliprole. 16 U.S.C. § 1536(a)(3). Eight years of outright non-compliance flouts the “‘rule of reason,’” the “first and most important” TRAC factor. Core Communications, 531 F.3d at 855 (quoting TRAC, 750 F.2d at 80). Attempting to evade this congressional timeline, EPA insists that its delay is reasonable, pointing to the effects determination’s complexity, numerous competing obligations, and its new “programmatic approach” for pesticide registration. Such considerations might hold sway had Congress never set an exacting deadline. But when Congress imposes a timeline, that timeline “suppl[ies] content for th[e] rule of reason.” TRAC, 750 F.2d at 80. Here, Congress has spoken. Also weighing in favor of mandamus is the potential threat cyantraniliprole poses to endangered species. TRAC factors 10 three and five, which often “overlap[],” direct us to consider the effects of agency delay. In re Barr Laboratories, Inc., 930 F.2d 72, 75 (D.C. Cir. 1991). Delay is “less tolerable when human health and welfare” is at stake, TRAC, 750 F.2d at 80, and ESA-protected species are “valuable to the health and welfare of the nation,” In re American Rivers & Idaho Rivers United, 372 F.3d 413, 414 (D.C. Cir. 2004). The Supreme Court has made clear that “‘it is in the best interests of mankind to minimize the losses of genetic variations.’” Tennessee Valley Authority, 437 U.S. at 178 (emphasis omitted) (quoting H.R. Rep. No. 93–412, at 4–5 (1973)). True, we are in the dark about the exact threat cyantraniliprole poses. Indeed, that is precisely what the effects determination is designed to illuminate. But we do know from EPA’s internal risk assessment that cyantraniliprole “ha[s] the potential for direct adverse effects” on endangered species. Environmental Protection Agency, Environmental Fate and Ecological Risk Assessment for the Registration of the New Chemical Cyantraniliprole—Amended 5 (2013). Completing an effects determination and any required consultation would reveal whether such a threat exists, and if so, its magnitude. If EPA identifies risks to endangered species, it could revise cyantraniliprole’s labeling to include mitigation measures or limits on use. See 7 U.S.C. § 136j(a)(2)(G) (making it unlawful to use a registered pesticide “in a manner inconsistent with its labeling”). Echoing the concerns expressed in our court’s previous opinion, Center for Biological Diversity, 861 F.3d at 189, EPA argues that vacating cyantraniliprole’s registration would cause more harm by forcing more dangerous pesticides back on the markets and into our environment. The Centers, however, have abandoned their vacatur request. 11 The fourth TRAC factor, which instructs courts to consider “the effect of expediting delayed action on agency activities,” TRAC, 750 F.2d at 80, generally cautions against facilitating line-jumping and reordering agency priorities, In re Public Employees for Environmental Responsibility, 957 F.3d 267, 275 (D.C. Cir. 2020). But here the Centers make no request for cyantraniliprole to cut the line. They ask only that we order EPA to complete its effects determination according to its own proposed schedule—by September 2023. EPA argues that mandamus is unwarranted because a “‘reasonably definite schedule’” such as its voluntary “commitment to a September 2023” deadline “represents a ‘good faith effort by [the agency] to come into compliance with it[s] statutory obligations.’” EPA Br. 25 (quoting In re United Mine Workers of America International Union, 190 F.3d 545, 555 (D.C. Cir. 1999)). We, however, have reason to doubt whether EPA will meet its own deadline. For one thing, EPA failed to announce its commitment to the September 2023 deadline until after petitioners sought mandamus. Moreover, even the September 2023 date carries a caveat: EPA warns it may not meet the deadline because it intends to go through time consuming notice-and-comment rulemaking. Matuszko Decl. ¶ 25 n.15. As EPA acknowledges, however, it has no statutory obligation to do so, Oral Arg. Rec. 33:03–15, leaving us even more skeptical of its commitment to the September 2023 deadline. Finally, until at least 2030, EPA will make effects determinations only in cases where courts have ordered it to do so. See Environmental Protection Agency, Balancing Wildlife Protection and Responsible Pesticide Use: How EPA’s Pesticide Program Will Meet its Endangered Species Act Obligations 4 (2022). As it explained, “any future court decision or legal settlement to complete an [effects] determination during that time will stretch the [a]gency’s already very thin program capacity and may undermine EPA’s 12 ability to meet its other ESA commitments.” Id. at 26. In other words, EPA may be forced by a different court to prioritize another pesticide. For all of these reasons, “we cannot fairly describe [EPA’s] schedule as ‘reasonably definite.’” United Mine Workers, 190 F.3d at 555. In any event, whether EPA’s internal deadline demonstrates that it is acting in good faith is beside the point. We need not find bad faith to find unreasonable delay. TRAC, 750 F.2d at 80. No doubt EPA is now trying to meet its “numerous FIFRA-related ESA obligations,” along with the demands of “other equally complex environmental statutes,” armed only with “finite resources.” EPA Br. 21. Nevertheless, “‘[h]owever many priorities the agency may have, and however modest its personnel and budgetary resources may be, there is a limit to how long it may use these justifications to excuse inaction in the face of’” a statutory deadline and court order. American Hospital Association v. Burwell, 812 F.3d 183, 191 (D.C. Cir. 2016) (quoting United Mine Workers, 190 F.3d at 554). EPA has passed that limit. Accordingly, we grant the writ. EPA is ordered to complete cyantraniliprole’s effects determination and replace its previous order with an order consistent with the ESA by September 2023. To add bite to our writ, we will retain jurisdiction and monitor EPA’s progress. EPA is directed to submit status updates every 60 days between now and September 2023. Should EPA fail to meet its September deadline, petitioners are free to renew their motion for vacatur of cyantraniliprole’s registration order. So ordered.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488606/	20-2976 Arriola-Perez v. Garland BIA Fowler, IJ A209 240 418 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 22nd day of November, two thousand twenty- two. PRESENT: GERARD E. LYNCH, RAYMOND J. LOHIER, JR., STEVEN J. MENASHI, Circuit Judges. _____________________________________ JAIME DE JESUS ARRIOLA-PEREZ, Petitioner, v. 20-2976 NAC MERRICK B. GARLAND, UNITED STATES ATTORNEY GENERAL, Respondent. _____________________________________ FOR PETITIONER: Stephen K. Tills, Esq., Orchard Park, NY. FOR RESPONDENT: Brian Boynton, Acting Assistant Attorney General; John S. Hogan, Assistant Director; Stefanie A. Svoren-Jay, Trial Attorney, Office of Immigration Litigation, United States Department of Justice, Washington, DC. UPON DUE CONSIDERATION of this petition for review of a Board of Immigration Appeals (“BIA”) decision, it is hereby ORDERED, ADJUDGED, AND DECREED that the petition for review is DENIED. Petitioner Jaime De Jesus Arriola-Perez, a native and citizen of Guatemala, seeks review of an August 7, 2020, decision of the BIA affirming an August 14, 2019, decision of an Immigration Judge (“IJ”) denying his application for asylum, withholding of removal, and protection under the Convention Against Torture (“CAT”). In re Jaime De Jesus Arriola-Perez, No. A209 240 418 (B.I.A. Aug. 7, 2020), aff’g No. A209 240 418 (Immig. Ct. Buffalo Aug. 14, 2019). We assume the parties’ familiarity with the underlying facts and procedural history. We have reviewed the IJ’s decision as supplemented and modified by the BIA. See Xue Hong Yang v. U.S. Dep’t of Justice, 426 F.3d 520, 522 (2d Cir. 2005); Yan Chen v. Gonzales, 417 F.3d 268, 271 (2d Cir. 2005). The applicable standards of review are well established. “[T]he 2 administrative findings of fact are conclusive unless any reasonable adjudicator would be compelled to conclude to the contrary.” 8 U.S.C. § 1252(b)(4)(B). “Accordingly, we review the agency’s decision for substantial evidence and must defer to the factfinder’s findings based on such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. . . . By contrast, we review legal conclusions de novo.” Singh v. Garland, 11 F.4th 106, 113 (2d Cir. 2021) (internal quotation marks omitted). As an initial matter, the agency did not err in rejecting Arriola-Perez’s argument that his Notice to Appear (“NTA”) was insufficient to vest jurisdiction with the IJ because it did not include the date and time of his initial hearing. Arriola-Perez received a subsequent hearing notice providing the missing information and appeared in immigration court. See Banegas Gomez v. Barr, 922 F.3d 101, 112 (2d Cir. 2019) (“[A]n NTA that omits information regarding the time and date of the initial removal hearing is nevertheless adequate to vest jurisdiction in the Immigration Court, at least so long as a notice of hearing specifying this information is later sent to the alien.”); see also Chery v. Garland, 16 F.4th 3 980, 987 (2d Cir. 2021) (clarifying that “Banegas Gomez remains good law” following Niz-Chavez v. Garland, 141 S. Ct. 1474 (2021)). Arriola-Perez has not otherwise adequately raised any issues for review. He does not address his CAT claim, and his one sentence argument regarding the agency’s grounds for denying asylum and withholding of removal is not adequate to present the issue for judicial review. See Yueqing Zhang v. Gonzales, 426 F.3d 540, 541 n.1, 545 n.7 (2d Cir. 2005) (deeming a claim abandoned when the petitioner “devote[d] only a single conclusory sentence to the argument”). Even if he had adequately argued his particular social group claim, the agency did not err in concluding that his proposed group was not cognizable. To obtain asylum or withholding of removal, an applicant must establish a nexus to a protected ground, here a “particular social group.” 8 U.S.C. §§ 1158(b)(1)(B)(i), 1231(b)(3)(A). A particular social group must be “(1) composed of members who share a common immutable characteristic, (2) defined with particularity, and (3) socially distinct within the society in question.” Paloka v. Holder, 762 F.3d 191, 196 (2d Cir. 4 2014) (quoting Matter of M-E-V-G-, 26 I. & N. Dec. 227, 237 (B.I.A. 2014)); see also Ucelo-Gomez v. Mukasey, 509 F.3d 70, 72–74 (2d Cir. 2007). To be particular, a group “must be defined by characteristics that provide a clear benchmark for determining who falls within the group” and “must . . . be discrete and have definable boundaries—it must not be amorphous, overbroad, diffuse, or subjective.” Paloka, 762 F.3d at 196 (quoting M-E-V-G-, 26 I. & N. Dec. at 239). “To be socially distinct, a group . . . must be perceived as a group by society.” Id. (quoting M-E-V-G-, 26 I. & N. Dec. at 240). Arriola-Perez’s group, “young males in Guatemala who are being threatened to join the gangs due to their vulnerability as young men in Guatemala,” fails because it is “defined exclusively by the claimed persecution,” namely the recruitment by gangs. Matter of M-E-V-G-, 26 I. & N. Dec. at 232. “Persecutory conduct aimed at a social group cannot alone define the group, which must exist independently of the persecution.” Paloka, 762 F.3d at 196 (quoting Matter of W- G-R-, 26 I. & N. Dec. 208, 215 (B.I.A. 2014)). The group is also not sufficiently particular because the parameters do 5 not “provide a clear benchmark for determining who falls within the group,” as young males could encompass large swaths of the population and vulnerability can be subjective. Id. (quoting Matter of M-E-V-G-, 26 I. & N. Dec. at 239). And the fact that the gang targeted him is not alone evidence of social distinction because the relevant inquiry is society’s perception, not the persecutor’s perception. Id. For the foregoing reasons, the petition for review is DENIED. All pending motions and applications are DENIED and stays VACATED. FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court 6	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488608/	United States Court of Appeals For the Eighth Circuit ___________________________ No. 21-3327 ___________________________ United States of America Plaintiff - Appellee v. Bryan Kimble Defendant - Appellant ____________ Appeal from United States District Court for the Eastern District of Missouri - St. Louis ____________ Submitted: June 17, 2022 Filed: No: November 22, 2022 ____________ Before LOKEN and KELLY, Circuit Judges, and MENENDEZ, 1 District Judge. ____________ MENENDEZ, District Judge. Bryan Kimble was convicted of four counts related to the distribution of controlled substances in violation of 21 U.S.C. § 841(a)(1) and § 846. On appeal, 1 The Honorable Katherine M. Menendez, United States District Judge for the District of Minnesota, sitting by designation. he challenges three evidentiary rulings made by the district court 2 during his trial. For the reasons set forth below, we affirm. I. Background In 2019, following the receipt of information from a cooperating defendant, the Bureau of Alcohol, Tobacco and Firearms began investigating Bryan Kimble’s alleged involvement in the distribution of heroin, fentanyl, crack cocaine, and marijuana in the St. Louis area. A. The Investigation Special Agent Sean Becker (“SA Becker”) and other officers accessed various databases to corroborate the information the cooperator provided about Kimble. Officers obtained a booking photo of Kimble from an unrelated matter. In addition, SA Becker obtained a record of Kimble’s driver’s license from the Missouri Department of Revenue database. This document provided a home address, 5375 Wells Avenue, as well as a photograph of Kimble. SA Becker also viewed recent traffic citations Kimble received that listed the same address. On October 10th, the cooperator met with SA Becker and set up a meeting with Kimble to purchase crack cocaine. The cooperator called Kimble using SA Becker’s phone and put the call on speakerphone so that SA Becker could listen. This phone call was recorded by SA Becker. During this call, Kimble told the cooperator to “go to my house,” which the cooperator had previously visited. The cooperator and SA Becker then drove to 5375 Wells Avenue. Kimble soon arrived at the Wells address and told the pair to “follow me.” SA Becker testified at trial that he was able to identify Kimble at that time because Kimble’s appearance matched both the driver’s license photograph and the booking photo he had reviewed. The voice of the person telling them to follow him was the same, 2 The Honorable Stephen R. Clark, United States District Judge for the Eastern District of Missouri. -2- according to SA Becker, as the voice he had heard minutes before on the phone instructing them to “go to my house.” Ultimately, the deal between SA Becker and Kimble did not go through on that day because Kimble spotted law enforcement vehicles in the area. Later, SA Becker contacted Kimble directly, without the cooperator’s assistance, to get the deal back on track. They communicated through text messages and a phone call, using the phone number that the cooperator had provided. Kimble agreed to meet SA Becker the next day to sell him $250 worth of crack cocaine. When SA Becker arrived at the meeting place, Kimble pulled up in a car next to him. A woman in the passenger seat gave Becker the drugs and took the money. During a subsequent call that was also recorded, Kimble complained about only receiving $230, instead of the agreed upon $250. A second transaction, arranged via text message between Kimble and SA Becker, took place on October 16th. Again, Kimble was driving and the actual hand- to-hand deal was conducted by a woman in the passenger seat. The final transaction occurred on October 22, and it was arranged by phone between Kimble and SA Becker. On that day, another officer, Special Agent Liberto, saw Kimble driving toward the direction of the meeting place. This transaction, like the others, was also conducted by an unidentified woman with Kimble driving the vehicle. Kimble also had a subsequent call with SA Becker in which he discussed having been at that deal. B. Procedural History In April 2021, Kimble was indicted and charged with three counts of distribution and one count of conspiracy to distribute a controlled substance. Prior to trial, Kimble moved to exclude the text messages, phone calls, and video recordings from the October encounters, arguing that the government would be unable to lay the necessary foundation. At a pretrial hearing, the government set out its plan for laying the required foundation. The government described the events leading to the text messages and recordings, including how SA Becker got Kimble’s -3- phone number from the cooperator and that SA Becker directly saw and heard Kimble at the controlled buys. The district court ruled that, assuming the government could lay the proffered foundation during the trial, the evidence was admissible. Kimble renewed the objection before trial, referencing hearsay, lack of foundation, and insufficient authentication. He also indicated that he was seeking a standing objection so he would not have to object to each recording. Although the court allowed the standing objection, it was overruled. With respect to foundation, the judge reiterated that the government would need to lay the required foundation and instructed Kimble that if they did not, he would need to make a specific new objection at that time as opposed to just saying “as previously stated.” During trial, when the government offered the recordings and text messages for admission, Kimble’s counsel objected, saying “[j]ust the objection that’s previously stated.” The court overruled “for the reasons previously stated.” The government moved at trial to introduce as an exhibit the driver’s license record that SA Becker had reviewed when initially corroborating the information from the cooperator. Kimble objected on the grounds of lack of foundation and best evidence. At a sidebar outside the presence of the jury, he explained that “the best evidence would be the Department of Revenue record from the Department of Revenue itself with a business affidavit.” The government responded that “this is a database routinely utilized in [the] regular course of business by law enforcement officers; and they are able to testify to the authenticity of that document through their daily routine, their daily pulling of these documents.” The court overruled the objection, and the driver’s license record was admitted into evidence. The jury convicted Kimble on all counts, and he was sentenced to 255 months in prison. II. Discussion On appeal, Kimble argues that the district court erred in admitting (1) the driver’s license record with his name, address, and photograph; (2) the video and -4- audio recordings from the controlled buys, including the phone calls arranging those buys; and (3) the text messages SA Becker and Kimble exchanged during the undercover investigation. We generally review a district court’s evidentiary rulings for an abuse of discretion. United States v. Midkiff, 614 F.3d 431, 441 (8th Cir. 2010) (citation omitted). But even if we determine that the district court abused its discretion in admitting or excluding certain evidence, we will not reverse if the error was harmless. Id.; see also Fed. R. Crim. P. 52(a). An error is harmless if “no substantial rights of the defendant were affected,” and “the error did not influence or had only a very slight influence on the verdict.” United States v. Bercier, 506 F.3d 625, 632 (8th Cir. 2007) (quoting United States v. Cortez, 935 F.2d 135, 140 (8th Cir. 1991). If, however, the defendant failed to preserve an issue for appellate review, we review only for plain error. See United States v. Combs, 44 F.4th 815, 818 (8th Cir. 2022); see also Fed. R. Crim. P. 52(b). A. Missouri Department of Revenue Driver’s License Record We start with Kimble’s challenge to the admission of the driver’s license record. At trial, Kimble objected to the record’s admission on “[l]ack of foundation and on best evidence” grounds.3 However, the thrust of his argument below and on appeal is primarily that the driver’s license record is a record of a regularly conducted activity, often called a business record, and the government did not lay the proper foundation to meet the business record exception to the rule against hearsay, Fed. R. Evid. 803(6). 3 The government argues that we should treat Kimble’s hearsay objection as waived because it wasn’t raised with sufficient specificity below. Indeed, the bases for both the objection and the government’s response in support of admissibility were less than pellucid, both at trial and in the post-trial briefing, leaving the trial court to guess at the precise nature of the objection. However, we decline to consider the issue waived. Both Kimble’s attorney and the government discussed whether the business record exception applied, though they did so without explicit reference to either the rule number or the hearsay doctrine. -5- Kimble contends that because the Missouri Department of Revenue manages the driver’s license database, the government should have called a witness from that department to testify about the record rather than SA Becker. Fed. R. Evid. 803(6). We agree. Rule 803(6) provides in relevant part that a business record may be admitted at trial, even if it would otherwise be hearsay, so long as the record’s “custodian or another qualified witness” testifies that the record was “kept in the course of a regularly conducted activity” and “making the record was a regular practice of that activity.” Id. Even though the government established that SA Becker accesses this database as part of his “daily routine,” he is not a “qualified witness” under Rule 803(6). See United States v. Riley, 236 F.3d 982, 984 (8th Cir. 2001) (holding that a police officer was not a “qualified witness” for purposes of Rule 803 where he lacked personal knowledge about how the challenged record was prepared and maintained). The focus of the business record exception is on the process by which the record is created, not the process by which it is accessed. See, e.g., United States v. Voice, 622 F.3d 870, 879 (8th Cir. 2010) (holding that an employee of South Dakota’s Division of Criminal Investigation was a “qualified witness” for purposes of admitting a sex-offender registration document because her agency maintained the database in its normal course of business). The government argues on appeal that it was not necessary to have a custodian of the database testify because the driver’s license record was not hearsay. The government claims the record was not offered for the truth of Kimble’s address or identity, but rather to show the course of the investigation and the steps taken by SA Becker. We disagree for two reasons. First, the government failed to raise this argument below, significantly undermining its claim now that the purpose of the document was merely to explain the course of the investigation. In fact, the government responded to Kimble’s objection at trial by arguing that SA Becker is “able to testify to the authenticity” of the driver’s license record because of his “daily routine” and “daily pulling of these documents,” and made no mention of it not being -6- offered for the truth of its contents. In laying the foundation before admitting the record, the government asked SA Becker if this was a database he accesses as a law enforcement officer on a “daily or routine basis.” All of this suggests the government’s position at trial was that the evidence was being offered as a record of a regularly conducted activity, contemplated by Fed. R. Evid. 803(6), and not as non- hearsay evidence under Fed. R. Evid. 801. Additionally, the government relied on the document for its truth as to Kimble’s address and identity at multiple points during the trial. SA Becker testified, for example, that “[b]ased upon [his] review of Mr. Kimble’s Department of Revenue photograph,” he was “absolutely certain that Mr. Kimble was behind the Toyota Camry when it pulled up in front of 5375 Wells.” And the government’s own briefing explains that the driver’s license record “provided necessary information to confirm the appropriate target.” We reject the government’s reframing of the purpose of this evidence upon appeal. The driver’s license record was admitted as proof of Kimble’s address and photo to lend support to SA Becker’s identification of Kimble. Although the evidence was offered for the truth of the matter asserted and the government did not have a custodian from the Missouri Department of Revenue testify about the record, any resulting error was harmless. First, even without introducing the record at issue into evidence at trial, SA Becker was fully free to testify regarding the information he obtained from the database. Such testimony would not implicate the rule against hearsay, and he could have testified regarding the address it contained and the similarity of the photograph he reviewed to the man who conducted the drug deals. Moreover, the government had independent sources for Kimble’s address and photo, making the improperly admitted evidence entirely cumulative. See United States v. Melecio-Rodriguez, 231 F.3d 1091, 1094 (8th Cir. 2000). Regarding the address, SA Becker testified that the same address was listed on the traffic citations he viewed that Kimble had received a few weeks earlier. The cooperator also knew the address “because he’[d] been at the house before.” Further, when the cooperator and SA Becker called Kimble to set up the first buy, Kimble -7- instructed them to go to his house, and then the person SA Becker identified as Kimble appeared when they arrived at 5375 Wells Avenue. These additional connections between Kimble and 5375 Wells Avenue makes the address on the driver’s license record diminish in importance. As for the photo of Kimble on the driver’s license record, a booking photo of Kimble from an unrelated matter was admitted into evidence. SA Becker testified that he was certain it was Kimble who pulled up beside him at 5375 Wells Avenue not only because he had seen the driver’s license record but also because he had seen “numerous booking photos” captured by another database. And another officer, Special Agent Liberto, also identified Kimble as driving past him toward the direction of the third controlled buy. This is not a case where the “extra helping of evidence” from the challenged record is “so prejudicial as to warrant a new trial.” United States v. Bercier, 506 F.3d 625, 633 (8th Cir. 2007). The information on the improperly admitted driver’s license record was cumulative of other evidence, and any error from admitting the record is not reversible. B. Recordings of the Controlled Buys We next consider Kimble’s challenge to the admission of Government Exhibit 5 and its various subparts, which contained video and audio files from the four dates in which SA Becker purchased or attempted to purchase controlled substances from Kimble. We review the admission of these recordings for an abuse of discretion because Kimble preserved the issue for appeal. Midkiff, 614 F.3d at 441. Kimble first moved before trial to exclude the recordings on the grounds that the government would be unable to lay the proper foundation for their authentication. At the start of trial, he renewed his objection on the grounds that the recordings were hearsay, not properly authenticated, and without a proper foundation. The judge overruled Kimble’s standing objection to all the recordings at the outset but instructed Kimble that if the government did not lay a sufficient foundation, he should make a new and specific objection at that time rather than “just saying ‘as previously stated.’” While -8- Kimble’s counsel restated the original objection during the trial, he offered no new objection to the adequacy of the foundation laid. The Federal Rules of Evidence require audio and video recordings to be authenticated. Fed. R. Evid. 901. We have adopted a non-exhaustive list of factors for a court to consider in determining whether a proper foundation has been laid to authenticate recordings. United States v. McMillan, 508 F.2d 101 (8th Cir. 1974). We consider whether a party has established that (1) the device was capable of recording, (2) the operator of the recording device was competent, (3) the recording is authentic and correct, (4) the recording has not been changed, (5) the recording has been preserved, (6) any speakers in the recording are identified, and (7) the conversation was voluntary. Id. at 104. To be able to identify a speaker in a recording, a witness only needs to have “heard the voice of the alleged speaker at any time.” Id. at 105 (quotation omitted); see also Fed. R. Evid. 901(b)(5). Kimble argues that the government did not establish the second, third, and sixth McMillan factors for the video and audio files contained in Government Exhibit 5.4 We have repeatedly cautioned that the McMillan factors are not to be applied rigidly. In McMillan, for example, the officer did not satisfy the sixth factor by sufficiently identifying the defendant’s voice. Id. at 105. We nevertheless held that a proper foundation was laid for the recordings because sometimes “the substance of the communication may itself be enough to make prima facie proof” of its reliability. Id. at 105 (quotation omitted). The McMillan factors are “merely helpful guidelines.” United States v. Haire, 806 F.3d 991, 996 (8th Cir. 2015). A recording can be admitted “even if not every factor is explicitly and completely met,” as long 4 To the extent Kimble argues that additional McMillan factors were not satisfied for Government Exhibit 5E-1 and 5E-2, we decline to reach such an argument. Kimble’s objection to these parts of the Exhibit, which were offered for admission during redirect of SA Becker, was “[j]ust the same objection as previously stated.” For that reason, we treat his challenge to all files contained in Government Exhibit 5 as challenging the second, third, and sixth McMillan factor. -9- as the totality of the circumstances satisfy a court that the recording is reliable. United States v. Oslund, 453 F.3d 1048, 1057 (8th Cir. 2006). Here, Government Exhibit 5 included at least 14 separate files containing video and audio recordings, phone calls, and text messages. Kimble is correct that the government did not satisfy every McMillan factor before every piece of evidence in Exhibit 5 was admitted. The district court, however, did not abuse its discretion by admitting the recordings. Considering the “totality of the circumstances surrounding the recordings,” the government laid an adequate foundation to assure the district court of the recordings’ reliability. Oslund, 453 F.3d at 1057. And the government readily established all three McMillan factors that Kimble contests on appeal. First, the government established that SA Becker was operating the recording equipment and was competent to do so. Kimble’s contention that “it is unknown who was the operator of the recording device,” is in tension with his opening statement in which he described that SA Becker’s vehicle had “the capabilities of picking up audio . . . [and] video” and that SA Becker was “always wearing a microphone.” Before Government Exhibit 5 was admitted into evidence, SA Becker testified that there was video and audio of his encounter with Kimble on October 10. He explained that during undercover investigations, he “always attempt[s] to run video if not audio for sure.” And after Government Exhibit 5A-1 and 5A-2 were played to the jury, SA Becker specified that the camera is on “his person.” Later in his testimony, SA Becker explained aspects about capturing the recordings, such as why angles are restricted or how light saturation from the sun affects the shot. SA Becker’s testimony satisfies the second McMillan factor that he was competent to operate the recording equipment. We have also held that a recording’s existence itself can establish that the person operating the device was competent to operate the equipment. Haire, 806 F.3d at 996; see also United States v. Roach, 28 F.3d 729, 733 (8th Cir. 1994). -10- Second, we conclude that the government adequately established that the recordings in Government Exhibit 5 were “authentic and correct.” McMillan, 508 F.2d at 104. When presented with the evidence, SA Becker confirmed that he had reviewed the files, that they were “essentially a copy of evidence from the originals,” and that they were “in substantially the same condition as the original documents.” Kimble argues that “substantially the same condition” goes to whether the recordings had been altered and not whether they were “accurate and complete.” We think this elevates semantics over substance, especially in light of our guidance that the McMillan factors are guiding principles rather than a rigid test. Oslund, 453 F.3d at 1055. Further, there was no allegation at trial, or on appeal, that the recordings were anything but authentic and correct. Absent such a suggestion, a district court may “assume that the investigators properly maintained the tape and did not tamper with it.” Roach, 28 F.3d at 733. SA Becker also specifically testified after Exhibits 5B-1 and 5B-6 were played to the jury that the recordings “accurately” reflected the conversations he had with Kimble. For these reasons, the government satisfied the McMillan factor regarding whether the recordings were authentic and correct. Third, we reject Kimble’s argument that the government did not sufficiently identify the speakers in the recordings. Before Government Exhibit 5 was admitted, SA Becker testified that he had reviewed the files contained therein, and they were “videos as well as communication between [himself] and Mr. Kimble.” After Government Exhibit 5 was published and the first two phone calls were played to the jury, SA Becker provided further testimony identifying Kimble in the recordings. SA Becker testified that Exhibit 5A-1 was a “portion of a phone call with Mr. Kimble” that the cooperator initiated, in which Kimble directed them to go to his house. Exhibit 5B-1 was then played to the jury, and SA Becker explained that it was a video and audio recording capturing when he arrived at Kimble’s address with the cooperator, and a man in a vehicle drove up and instructed them to follow him. The government asked SA Becker who he heard in the recording, and SA Becker described that it was “the defendant talking to myself and the cooperating defendant.” SA Becker testified that he recognized the voice in the recording as “the same voice that [was] just heard on the previous phone call.” He explained that only -11- a few minutes had passed between when he heard the voice on the first phone call (Exhibit 5A-1) and when he heard the voice at Kimble’s address (Exhibit 5B-2). SA Becker later agreed that it was “safe to say all communication” was “between [him] and Mr. Kimble,” and the communication took place through phone calls and text messages. Throughout direct examination, SA Becker repeatedly identified the voice in the recordings as Kimble. To be able to identify a speaker’s voice in a recording, a witness only needs to have “heard the voice of the alleged speaker at any time.” McMillan, 508 F.2d at 105 (quotation omitted); see also Fed. R. Evid. 901(b)(5). SA Becker solidly meets this requirement and adequately identified Kimble in the recordings.5 Kimble takes the position that we should not consider SA Becker’s testimony identifying him as the speaker in the recordings because this testimony came after the recordings were admitted into evidence. We reject this argument for two reasons. First, it ignores the context in which the objection to the recordings arose. Kimble moved before trial to have the recordings excluded. At the pretrial hearing, the government set out a plan detailing how SA Becker’s testimony would provide the proper foundation. The district court concluded that if the government “can lay the foundation that they have stated, then it would become simply a question of weight, not admissibility,” and denied Kimble’s motion on that basis. At trial, Kimble made a standing objection to all files contained in Government Exhibit 5. The district court reiterated its ruling on Kimble’s previous motion, stating that “with respect to the foundational issues,” the government “will need to establish that foundation.” The district court overruled Kimble’s objection, but it instructed Kimble that should he think the government failed to lay the anticipated foundation, he should make a specific objection at that time and “get into it and say why no foundation has been laid as opposed to just saying ‘as previously stated.’” If Kimble believed it was a 5 Kimble’s contention that SA Becker failed to satisfy the identification requirement because Becker was unable to initially identify his own voice in one recording goes to the credibility of SA Becker’s identification (and thus the weight the jury should assign to the evidence), not its admissibility. -12- problem for the government to have laid an adequate foundation after the recordings were admitted, then he needed to object with specificity as to the foundational defects during the testimony. This he did not do. The second reason we reject Kimble’s temporal argument is that we will not reverse a defendant’s conviction simply because the full foundation for its authentication was laid after the evidence was admitted. We find support in the text of Federal Rule of Evidence 901, which does not specify a temporal requirement, just that evidence must be authenticated. Further, we did not find an abuse of discretion in United States v. Roach, where the district court admitted a videotape without requiring the government to first establish each McMillan factor. 28 F.3d at 733. It was enough for us in that case that an officer who was present at the meeting with the defendant later testified that the tape accurately reflected what transpired. Id. We explained in Roach that we would not find an abuse of discretion “simply because the McMillan guidelines were not explicitly addressed prior to the videotape’s admission into evidence.” Id. (emphasis added); see also United States v. Henley, 766 F.3d 893, 913 (8th Cir. 2014) (holding that the district court did not err by “examining the evidence of authenticity as a whole,” including later testimony by witnesses who testified after the recording’s admission). We are bound to the same conclusion here. SA Becker’s testimony, even though it came after the admission of the recordings into evidence, adequately laid the foundation to authenticate the recordings. As in McMillan, “[o]ur holding does not constitute approval of the procedure followed at the trial.” 508 F.2d at 105. Of course a party should lay the proper foundation before offering recordings for admission into evidence. See United States v. Webster, 84 F.3d 1056, 1064 (“As a preface to the introduction of a recording, the Government must make a prima facie showing of the tape's trustworthiness.”) (emphasis added). But because a proper foundation was laid, we cannot say that the district court abused its discretion by admitting the audio and video recordings into evidence. -13- C. Text Messages Between Special Agent Becker and Kimble Although Kimble addressed the text messages separately from the video and audio recordings, they were contained in the same exhibit, and the same analytical framework applies to their admissibility. For the reasons already explained, we hold that the government laid an adequate foundation to authenticate the text messages. Kimble specifically argues that the text messages were not properly authenticated because the only testimony regarding them before they were admitted was that SA Becker stated that Government Exhibit 5 included text messages. This is true. But after the exhibit was admitted, SA Becker testified that he “only communicated with one phone number during this investigation,” and it was “(314) 390-8781,” the number provided by the cooperator. Even though this authentication came after the text messages were in evidence, the district court did not abuse its discretion by “examining the evidence of authenticity as a whole,” Henley, 766 F.3d at 913. III. Conclusion The judgment of the district court is affirmed. ______________________________ -14-	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488609/	United States Bankruptcy Appellate Panel For the Eighth Circuit ___________________________ No. 22-6004 ___________________________ In re: Bryan S. Reichel, as surety for Rudy, Inc., as surety for Pure Choice, Inc., formerly doing business as America's Team Properties Debtor ------------------------------ Bryan S. Reichel Debtor - Appellant v. Mary Jo Anne Jensen-Carter Trustee - Appellee ____________ Appeal from United States Bankruptcy Court for the District of Minnesota - St. Paul ____________ Submitted: September 28, 2022 Filed: November 22, 2022 ____________ Before SCHERMER, SHODEEN and DOW, Bankruptcy Judges. ____________ DOW, Bankruptcy Judge. ____________ This case has been a lengthy and convoluted legal marathon. Essentially, Bryan Reichel (the “Debtor”) is appealing a bankruptcy court order dated June 30, 2022 (the “Order”) which disposes of a multitude of matters that were before the court. For the reasons that follow, we affirm. 1 STANDARD OF REVIEW At the core of this appeal are the Debtor’s repeated motions to reopen his case. A bankruptcy court's decision whether to reopen a bankruptcy case is reviewed for an abuse of discretion. In re Pennino, 299 B.R. 536, 538 (8th Cir. BAP 2003). A court abuses its discretion when its ruling is founded on an error of law or a misapplication of law to the facts. In re Skyline Woods Country Club, LLC, 431 B.R. 830, 833 (8th Cir. BAP 2010), aff'd sub nom In re Skyline Woods Country Club, 636 F.3d 467 (8th Cir. 2011). In its application, the abuse of discretion standard is nearly indistinguishable from the clearly erroneous standard. Id. (citations omitted). BACKGROUND The Debtor filed his Chapter 7 petition on April 29, 2011. He was represented by an attorney. He voluntarily waived his discharge by signing a stipulation in November, 2012. The case was closed in March of 2017, and the Chapter 7 Trustee (the “Trustee”) was discharged from service. A brief history of the events leading up to the Debtor’s bankruptcy filing and the Debtor’s conduct during the proceeding is noteworthy. The Debtor founded a company called PureChoice in 1992, and served as its president and CEO. He 1 The bankruptcy court ruling was issued by the Honorable Katherine A. Constantine, Judge of the United States Bankruptcy Court for the District of Minnesota. 2 obtained millions of dollars in bank loans for the company, but was unable to pay them back because PureChoice was not profitable. The Debtor subsequently obtained bridge loans from private investors without disclosing the full extent of the company’s dire financial state. He also represented that the funding would be used to restructure its debt and fund its operations when in fact, it wasn’t. Eventually, one of the investors sued the Debtor to recover $1.5 million in unpaid loans. The Debtor’s defense was that payment on the loans was not due until May of 2011, so the investor agreed to delay proceeding in the lawsuit until then. The Debtor filed bankruptcy on April 29, 2011, so the investor’s collection action was stayed. The Debtor was indicted and charged with seven counts of wire fraud in September of 2014 for obtaining loans from investors and employees, allegedly for his company, and using the proceeds instead to pay off other loans and to pay himself a large salary and bonuses. A superseding indictment added five counts of bankruptcy fraud, including filing bankruptcy in furtherance of a scheme to defraud, and making false statements in relation to the bankruptcy proceeding. In November, 2016, a jury convicted the Debtor on all but one of the counts. The Debtor appealed. On December 28, 2018, the Eighth Circuit affirmed the judgment: “[A] juror could have inferred fraudulent intent concerning the bankruptcy from the evidence that Reichel filed for bankruptcy just before a creditor planned to file his summary judgment motion, then transferred funds to a hidden account, and finally failed to disclose that account and other items to the trustee.” United States v. Reichel, 911 F. 3d 910, 916 (8th Cir. 2018). The Debtor is currently serving his prison sentence. On September 19, 2019, the Debtor filed a motion to reopen his case (the “First Motion to Reopen”). After a hearing, the bankruptcy court denied the motion, and the Debtor appealed the order to the Bankruptcy Appellate Panel. Prior to the 3 BAP ruling, the Debtor filed what was effectively a second motion to reopen (the “Second Motion to Reopen”) in which he sought a rehearing on the First Motion to Reopen, and reconsideration of the court’s denial of it. The bankruptcy court denied the Second Motion to Reopen. The BAP affirmed the order denying the Debtor’s First Motion to Reopen. The Debtor filed a motion seeking the bankruptcy court’s reconsideration of its first and second motions to reopen his case; the court denied the motion. The Debtor then appealed that ruling to the BAP. The BAP dismissed the appeal as an improper attempt to relitigate matters previously addressed. Following the dismissal, the Debtor filed what amounted to a third motion to reopen his case (the “Third Motion to Reopen”), arguing that he had standing due to a $7,500 tax penalty he was forced to pay the Trustee in addition to a $25,000 payment for the return of his family’s personal property. The Debtor also alleged that two creditors George Anderson and 7th Rig, LLC, filed false proofs of claims in his case that led to his criminal conviction (the “Proofs of Claim”). The bankruptcy court denied the Third Motion to Reopen and the Debtor appealed. The BAP dismissed the appeal as untimely. The Debtor subsequently appealed the BAP’s judgment to the Eighth Circuit Court of Appeals, which ultimately affirmed the BAP’s judgment. Amidst the appeals and the indictment described above, the Debtor filed a host of other pleadings, including a request for appointment of counsel, a motion for writ of mandamus ordering the trustee to return the $7,500 payment mentioned previously, a summary judgment motion, and a recusal motion. The Order which is the subject of this appeal disposed of all outstanding matters. 4 DISCUSSION A bankruptcy case may be reopened to administer assets, to provide relief to the debtor, or for other cause. 11 U.S.C. §350 (b). The party seeking to reopen the case bears the burden of proving that cause exists. In re Root, 318 B.R. 851, 853 (Bankr. W.D. Mo. 2004). The decision whether to grant a motion to reopen a case is committed to the discretion of the court, and should be granted “only where a compelling reason for reopening the case is demonstrated.” Mid-City Bank v. Skyline Woods Homeowners Ass’n, 431 B.R. 830, 835 (8th Cir. BAP 2010), aff’d, 636 F. 3d 467 (8th Cir. 2011). If a debtor’s request is futile because the relief sought lacks merit, a request to reopen is not warranted. In re Pennington-Thurman, 2020 WL 2114529 (E.D. Mo. May 4, 2020). In this instance, the Debtor is undeniably seeking to reopen his case to obtain relief from his conviction. This is an improper purpose that cannot constitute cause to reopen. Id. at 5 (affirming order denying request to reopen because debtor mounted an improper collateral attack on prior decisions of other courts). The trial court made such a finding and the Debtor does not contest it. In his Appellant Brief, the Debtor lists numerous instances in which he contends that the bankruptcy court abused its discretion, including denying his right to be heard, refusing to consider his objections to certain motions and proofs of claim, and refusing to grant summary judgment in his favor. He also describes several acts of alleged wrongdoing by the Trustee, asserting that it was an abuse of discretion for the Trustee to allow proofs of claim without “vetting them,” to seize certain assets, and to refuse to refund the $7,500 “late fee penalty,” to name a few. 2 2 The Trustee has filed a letter indicating that she is not participating in this appeal because the case was closed in 2017 and she was discharged of her duties as Trustee at that time. The Debtor is not entitled to reversal merely because there is no 5 Some of these accusations are addressed in the matters covered by the Order, while others are simply made by the Debtor in his Appellant Brief. Nevertheless, they are moot since the Trustee was discharged over five years ago. After reviewing the Order and the underlying record, we see no need to address every one of the matters addressed by the bankruptcy court. Although the Debtor states in his Appellant Brief that the bankruptcy court “blanket” denied all 27 of his motions, the Order itself belies that accusation – the court based its ruling on a thorough legal analysis of the individual pleadings and why denial of each was appropriate. A few of the matters involve letters or notices on which the Debtor is not seeking relief. [Matters 1, 19, 27]3 With regard to many of the others, the Debtor mischaracterizes the facts or the law. For example, he claims that the court erred in denying his motions for appointment of counsel [Matter 11] because the attorney he hired to complete his Chapter 7 proceeding was working, at the same time, as a full time Chapter 13 staff attorney at the bankruptcy court, thus creating a conflict of interest. Generally, however, a conflict of interest is actual only if it is likely that a professional will be placed in a position permitting him or her to favor one interest over an impermissibly conflicting interest. In re Jade Management Services, 2010 WL 2712319, 3 (3d Cir. July 9, 2010). That is not the case here. The Debtor mistakenly equates his attorney’s employment as counsel for the Standing Chapter 13 Trustee for the District of Minnesota to employment for the bankruptcy court presiding over his own proceeding; in his position as the former, the attorney would opposition to his appeal. See In re Donahue, 406 B.R. 407 (M.D. Fla. 2009) (holding that appellee’s failure to file a responsive brief did not mean that appellant’s contentions had to be regarded as established). 3 The reference to “Matters” throughout this opinion corresponds to the number associated with each matter listed in the Order, and is provided for clarity. 6 wield no authority in the Debtor’s case. The Debtor presented no evidence that his counsel’s job as staff attorney was detrimental to the Debtor, or interfered with counsel’s representation of the Debtor at all. Therefore, the court did not abuse its discretion in denying the Debtor’s request for appointment of counsel. The Debtor asserts that it was an abuse of discretion for the Trustee to allow the Proofs of Claim without vetting them [Matters 6, 7]. As a general matter, however, the Debtor missed several opportunities to object during the pendency of his case. For example, the only objection he filed was to the claim of Craig Reichel; that same objection was the only one the Debtor made to the Trustee’s Interim Report. He filed no objection at all to the Trustee’s Final Report, which proposed to pay the claims. Furthermore, the Debtor did not address in his Appellant Brief the court’s conclusion that principles such as laches, equity and waiver prevented him from raising the objections at this late date. We find that this ruling was well- supported by law and the record itself. In addition, the Debtor objected to the Proofs of Claim on the specific grounds that they were “false and fabricated due to the fact there is no supporting documentation on file with the US Bankruptcy Court….” This objection lacks merit. Bankruptcy Rule 3001(c)(2)(D) gives the court discretion to craft the relief when failure to file documentation is asserted. It is well-established in the Eighth Circuit that even if a proof of claim has not substantially complied with the documentation requirements of Rule 3001, the claim is still allowed unless the debtor establishes an exception under §502(b). See In re Dove-Nation, 318 B.R. 147, 152 (8th Cir. BAP 2004). In this instance, the Debtor did no such thing. Additionally, the bankruptcy court noted in the Order that the attorney for the creditors (on whose behalf the Proofs of Claim were filed) stated repeatedly in pleadings and at the objection hearing that supporting documentation was given to the Debtor’s then attorney six and a half years ago. The court found these 7 representations credible. The court’s denial of the multiple motions objecting to the Proofs of Claim, based on the facts and equitable principles, was not an abuse of discretion. Regarding the Debtor’s Motion for Free Copy of Transcripts [Matter 25], the court noted in the Order that this request was previously addressed by the Bankruptcy Clerk’s Office. In August of 2021, the clerk filed her Notice of Filing of Official Transcript which set forth the procedures for inspecting or purchasing the transcript. In a letter dated November 22, 2021, the clerk notified the Debtor once again that the bankruptcy court does not provide complimentary copies of transcripts, even to individuals who are granted in forma pauperis status, and offered him several options to obtain a copy. Despite these instructions, the Debtor did not meet his burden of requesting the transcript and supplying it to the court. See Fed. Rules Bankr. Proc. Rule 8009 (b). He even admits in his Appellant Brief that he could not find a legal basis for his demand that he be provided a free one by the court. Without a transcript, a reviewing court cannot conclude that a bankruptcy court’s findings are clearly erroneous. In re Huonder, 558 B.R. 303, 305 (8th Cir. BAP 2016) (citations omitted). For these reasons, the court’s denial of Matter 25 was not an abuse of discretion. Another example of the Debtor’s mischaracterization of facts is his assertion that the Trustee forced him to pay $7,500 as a “penalty fee” for his taxes, and that the court abused its discretion by interjecting defenses on behalf of the Trustee in connection with the Debtor’s Mandamus Motion requesting the return of that payment. [Matter 3] As the court correctly points out in the Order, the $7,500 payment was not a “penalty,” but rather a settlement payment to the Trustee. The Debtor himself signed the Stipulation Re Exempt Property that was filed on April 8 20, 2012, providing that the “Debtor shall pay the trustee the sum of $7,500.00, in good funds, on or before June 15, 2012, as a full and final settlement of the estate’s interest in his 2010 tax refunds.” Although the Debtor now claims in his Appellant Brief that he was harassed by the Trustee and signed the settlement agreement under duress, he presented no evidence to support those allegations. To assert those defenses nearly ten years after signing the stipulation is disingenuous at best. The court’s denial of the Debtor’s Mandamus Motion was a reasonable exercise of its discretion given these facts. Likewise, the Debtor mischaracterizes another stipulation that he signed as a situation in which he was “forced” to make a payment to the Trustee. He contends that, during a surprise raid, the Trustee seized several trailer loads of personal property belonging to his non-debtor spouse and daughter, and threatened to seize the rest of the property unless the Debtor’s spouse agreed to settle with the Trustee for $25,000. The recitals in the Stipulation of Settlement paint a different picture. According to the Stipulation signed by the Debtor and his wife, the Trustee conducted a court-approved inspection of the Debtor’s residence, and discovered significant assets which were not disclosed in the Debtor’s bankruptcy schedules. The Trustee seized various assets, as authorized by the inspection order. The Debtor objected to the proposed sale of the seized property, and amended his schedules to add property and claim additional exemptions. The Trustee objected to the latter. Prior to the hearing on the objections, the parties entered into the settlement agreement. As was the case regarding the $7,500 settlement payment described previously, the Debtor waited nearly ten years to allege duress, and produced no evidence to support his allegation. 9 CONCLUSION The record is replete with the Debtor’s requests that the court reopen the case, review prior rulings, and revisit the Trustee’s actions, all with the underlying purpose of reversing his criminal conviction and securing his release from prison. As the court correctly stated, a collateral attack on the decision of another court does not constitute cause to reopen the case. The court’s analysis of each of the matters it considered in the Order was thorough and legally sound. We find no abuse of its discretion, and therefore, affirm the 27 rulings of the bankruptcy court. ________________________ 10	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488612/	USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 1 of 27 [DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 22-10132 Non-Argument Calendar ____________________ SCOTT MILLSPAUGH, Plaintiff-Appellant, versus COBB COUNTY FIRE AND EMERGENCY SERVICES, Defendant, RANDY CRIDER, KEVIN GROSS, in their individual capacities, USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 2 of 27 2 Opinion of the Court 22-10132 COBB COUNTY, GEORGIA, Defendants-Appellees. ____________________ Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:20-cv-03314-WMR ____________________ Before WILSON, LUCK, and LAGOA, Circuit Judges. LAGOA, Circuit Judge: Scott Millspaugh appeals the district court’s order granting summary judgment for Cobb County, Georgia (the “County”); Cobb County Director of Public Safety, Randy Crider, in his indi- vidual capacity; and Deputy Chief of Fire and Emergency Services, Kevin Gross, in his individual capacity (collectively “the Defend- ants”), in his suit alleging First Amendment retaliation under 42 U.S.C. § 1983. He argues that the district court erred in granting summary judgment for the Defendants because (1) he spoke as a citizen when leaving a voicemail with Cobb County Commissioner Keli Gambrill, and (2) Crider and Gross (“the Individual Defend- ants”) were not entitled to qualified immunity. After careful con- sideration, we hold that Millspaugh spoke as a public employee USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 3 of 27 22-10132 Opinion of the Court 3 when leaving his voicemail and that his voicemail was not pro- tected by the First Amendment. We also hold that the Individual Defendants were entitled to qualified immunity. We, therefore, affirm the district court’s order granting summary judgment. I. FACTUAL AND PROCEDURAL BACKGROUND On August 20, 2020, Millspaugh filed an amended complaint alleging that his First Amendment rights were violated under 42 U.S.C. § 1983. In the amended complaint, he alleged that he was a former firefighter for the Cobb County Fire Department (“the De- partment”) and that he was demoted after leaving a voicemail with Gambrill’s office regarding five non-operational firetrucks in Polit- ical District One (“the District”), which Gambrill represented. According to Millspaugh, he was a Firefighter III, who as- sisted with the scheduling of staff in Battalion Four. He regularly discussed staffing with his Battalion Chief, John Graham, as part of his job duties. Millspaugh sometimes received notifications from other firefighters regarding their use of leave, and Millspaugh was responsible for finding another firefighter to fill their scheduled shifts. He also helped call firefighters to work overtime if they were needed to cover a shift. Millspaugh was required to notify Graham of any staffing shortages within Battalion Four. In turn, Graham reported to Fire Department District One Chief, Scott White. White reported to the Deputy Chief of Response, Kevin Gross, who reported to the Fire Chief, Randy Crider. USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 4 of 27 4 Opinion of the Court 22-10132 On the morning of May 2, 2019, Millspaugh left a voicemail with Gambrill’s assistant, Ryan Williams. In the voicemail, he stated, “[h]ey, Ryan, this is Scott. . . . I was wanting to know if you guys knew why there was five fire trucks not operational today in [Political] District One. Thank you very much.” Millspaugh was at the fire station, in uniform, and on duty when he left the voicemail. He left the voicemail in hopes of scheduling a meeting to discuss staffing issues in more detail. Millspaugh did not get a call back from Gambrill’s office. This instance was the first time Millspaugh called Gambrill’s office. According to Millspaugh, he became concerned after re- viewing the Department’s status board, which showed the non-op- erational status of various fire-related vehicles. Ordinary citizens of the District did not have real time access to the information on the status board. A screenshot of the status board from May 2, 2019, reflected that six fire vehicles within District were out of ser- vice. On the day he called Gambrill’s office, Millspaugh did not raise his staffing concerns with anybody in his chain of command at the Department. Prior to leaving the voicemail, Millspaugh did not tell any manager or supervisor of the Department that he in- tended to contact Gambrill’s office. Rather than responding to Millspaugh, Gambrill’s office contacted Crider to confirm that the fire-related vehicles were not operational. Shortly after, Crider called Millspaugh to discuss the voicemail. Later in the day, Graham ordered Millspaugh to go to USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 5 of 27 22-10132 Opinion of the Court 5 the headquarters to discuss the voicemail. At some point on or af- ter May 2, 2019, Millspaugh told Graham that he called Gambrill’s office because of inadequate staffing. At the headquarters, Mill- spaugh met in Crider’s office with Crider, Gross, White, and Gra- ham. On July 19, 2019, Millspaugh again met with Crider, Gross, White, and Graham. At that meeting, Millspaugh was notified that he was being demoted from Firefighter III to Firefighter II. He was told that he was being disciplined for making poor decisions, vio- lating the chain of command, and making inaccurate or misleading statements in his voicemail to Gambrill’s office. The demotion re- sulted in a ten percent reduction in Millspaugh’s pay. Millspaugh’s annual performance evaluation was changed from exceeds expec- tations to meets expectations because of his voicemail to Gambrill. The reduction of his performance evaluation negatively affected the percentage of pay raise for which he was eligible the following year. In the amended complaint, Millspaugh asserted a First Amendment retaliation claim under § 1983, arguing that his voicemail was speech protected by the First Amendment and a mo- tivating factor in the Defendants’ retaliatory adverse employment actions. Millspaugh also stated a claim under Georgia’s whistle- blower law, but he does not raise that claim on appeal. The Defendants moved for summary judgment, arguing that Millspaugh’s First Amendment claim failed because he was on duty and acting as an employee when he conveyed his concerns USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 6 of 27 6 Opinion of the Court 22-10132 about staffing to Gambrill’s office. The Defendants argued that be- cause his speech fell within his ordinary duty of securing staffing, he spoke as an employee, and his speech was not protected by the First Amendment. The Defendants also argued that even if he spoke as a citizen, the County had a stronger interest in promoting the efficiency of public fire suppression services than Millspaugh had in the speech. They argued that their expert witnesses, Gordon Henderson and Tim Milligan, testified that a firefighter should only circumvent the chain of command in a life-threatening situation and that breaking the chain of command impacts the level of trust between firefighters and their supervisors. The Defendants also ar- gued that the Individual Defendants were entitled to qualified im- munity because they acted within the scope of their discretionary authority when the allegedly wrongful act occurred. Lastly, the Defendants argued that the Individual Defendants did not violate a clearly established constitutional right. In support of their motion for summary judgment, the De- fendants attached several transcripts, including the transcript from Millspaugh’s deposition. Responding to questions from the De- fendants’ attorneys, Millspaugh testified that a fire department is a work environment that relies particularly on trust between em- ployees in emergency situations. Millspaugh also testified that he understood that, on May 2, 2019, he had the duty to notify his su- pervisors of urgent matters by following the chain of command. Millspaugh further testified the Department was a paramilitary or- USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 7 of 27 22-10132 Opinion of the Court 7 ganization that operated under a rank system. The chain of com- mand established a route of communication from the lowest ranked firefighter up to the Fire Chief. He conceded that a break in the chain of command could cause communication-related prob- lems. The Defendants also attached Crider’s deposition. Crider testified that Millspaugh was demoted from Firefighter III to Fire- fighter II because of the voicemail. Crider told Millspaugh that leaving the voicemail with Gambrill’s office was a violation of trust. Crider also testified that shortly after Millspaugh left the voicemail with Gambrill’s office, Millspaugh stated that he left the voicemail because he was concerned about staffing in the District and the safety of people that lived in the District due to inadequate coverage. Crider testified that Millspaugh’s voicemail disrupted the Department’s operations because he and Graham had to take the time to meet with Millspaugh and decide whether it was appro- priate to discipline Millspaugh for the voicemail. The Defendants additionally attached Gross’s deposition. According to Gross, he oversaw the day-to-day operation of all fire- fighters in all stations within the Department. Gross authored a report recommending to Crider that Millspaugh be demoted be- cause Millspaugh’s assertion that five firetrucks were non-opera- tional on May 2, 2019, was misleading and inaccurate. Gross also testified that after the May 2, 2019, meeting, Gross called Mill- spaugh into his office and asked him why he left the voicemail with Gambrill’s office. Millspaugh did not respond, and that instance USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 8 of 27 8 Opinion of the Court 22-10132 was the only time in Gross’s disciplinary investigation that Gross discussed the voicemail with Millspaugh. On Millspaugh’s annual review prepared in October 2019, Gross recommended changing Millspaugh’s overall evaluation from exceeds expectations to meets expectations and including a note under the evaluation cat- egory for judgment and decision-making stating that Millspaugh was disciplined for contacting Gambrill’s office without permis- sion. And the Defendants attached Graham’s deposition. On May 2, 2019, Graham and Millspaugh discussed concerns about fire- trucks being out of service due to a lack of staffing, and Graham sent Millspaugh to another fire station to meet the minimum staff- ing requirements to keep a truck in service. Graham did not recall discussing safety concerns with Millspaugh until after he learned of Millspaugh’s voicemail to Gambrill’s office. He felt that Mill- spaugh undermined his authority by calling Gambrill’s office in- stead of giving him a chance to address the staffing shortage. Gra- ham also testified that leading up to May 2, 2019, it was generally known that staffing was an ongoing problem, due to a change in overtime hiring practices requiring battalion chiefs to wait to hire overtime staff until the day before the needed shift. Graham dis- cussed the change with his direct superiors, expressing concern that the difficulty in staffing would affect the safety of Cobb County res- idents. Graham prepared Millspaugh’s performance evaluation in 2019. Graham originally evaluated Millspaugh’s overall perfor- mance as exceeds expectations but was instructed to decrease the USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 9 of 27 22-10132 Opinion of the Court 9 evaluation to meets expectations. Graham disagreed with the de- cision to demote Millspaugh and believed a written reprimand was a more appropriate form of discipline. He expressed his disagree- ment to his superiors, but Millspaugh was still demoted. In response to the Defendants’ motion for summary judg- ment, Millspaugh argued that his voicemail was not within the or- dinary scope of his job’s duties but merely concerned his ordinary duties. Millspaugh asserted that he contacted Gambrill’s office as an informed constituent to offer ideas on how to solve the staffing problems. He also argued that the Individual Defendants were not entitled to qualified immunity because they knowingly violated his First Amendment rights. In support, Millspaugh attached his own declaration, in which he stated that his goal in reaching out to Gam- brill’s office was to offer ideas on long-term compensation policies that could improve the retention of firefighters and alleviate staff- ing concerns. In reply, the Defendants reasserted their argument that Mill- spaugh spoke as an employee when he left the voicemail with Gambrill’s office. The Defendants also maintained that Mill- spaugh’s interest in the voicemail did not outweigh their interest in protecting the Department’s ability to provide fire protection to Cobb County. Finally, the Defendants reiterated their argument that the Individual Defendants were entitled to qualified immun- ity. USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 10 of 27 10 Opinion of the Court 22-10132 On October 5, 2021, the district court held a hearing on the motion for summary judgment. The Defendants argued that Mill- spaugh’s call to Gambrill’s office was directly related to his review of the status board, which was part of his official job responsibili- ties. The district court asked Millspaugh what role his declaration should play in the litigation, and Millspaugh argued that the decla- ration explained his motivation in leaving the voicemail with Gam- brill’s office. The district court stated that the declaration appeared to be self-serving because it was an after-the-fact explanation of his reasoning that was unavailable to the Defendants when they de- cided to demote him. The district court stated that the declaration was relevant to some matters, but the after-the-fact reasoning for leaving the voicemail was irrelevant in evaluating the Defendants’ actions. After the hearing, the district court granted summary judg- ment for the Defendants on all of Millspaugh’s claims. The district court found that Millspaugh left the voicemail with Gambrill’s of- fice while on duty, shortly after discussing staffing issues with Gra- ham, and in direct response to information he acquired while per- forming his job as a Firefighter III. Therefore, the voicemail in- volved the subject matter of his job duties and was not protected by the First Amendment. The district court also determined that the County’s interest in the efficiency of the Department out- weighed Millspaugh’s interest in the speech. Trust is particularly important in providing effective emergency services to the public, and the voicemail undermined the trust Millspaugh’s superiors had USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 11 of 27 22-10132 Opinion of the Court 11 in him. Finally, the district court determined that the Individual Defendants were entitled to qualified immunity. The district court concluded that because Millspaugh did not engage in constitution- ally protected speech, he could not prove that the Individual De- fendants violated his constitutional rights. This appeal ensued. II. STANDARDS OF REVIEW We review the grant of summary judgment de novo. Thomas v. Cooper Lighting Inc., 506 F.3d 1361, 1363 (11th Cir. 2007). “Summary judgment is appropriate when ‘there is no gen- uine issue of material fact and . . . the moving party is entitled to a judgment as a matter of law.’” Id. (quoting Fed. R. Civ. P. 56(c)). Summary judgment may be affirmed if there exists any adequate ground for doing so, regardless of whether it is the one on which the district court relied. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1117 (11th Cir. 1993). In addition, we review the grant of qualified immunity de novo. Courson v. McMillian, 939 F.2d 1479, 1486 (11th Cir. 1991). III. ANALYSIS On appeal, Millspaugh sets forth two overarching argu- ments for why the district court erred in granting summary judg- ment. First, Millspaugh argues that his voicemail was protected by the First Amendment because he left the voicemail as a citizen, not an employee. Second, he argues that the Individual Defendants were not entitled to qualified immunity because they violated his USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 12 of 27 12 Opinion of the Court 22-10132 clearly established First Amendment rights. We address each argu- ment in turn. A. Millspaugh’s Speech Was Not Protected by the First Amendment Millspaugh argues the district court erred in determining that he left the voicemail as an employee, rather than a citizen, be- cause it misapplied the framework set forth in Garcetti v. Ceballos, 547 U.S. 410 (2006), and its progeny. He argues that the district court misapplied the five factors in determining whether a public employee is speaking as an employee or a citizen: “(1) speaking with the objective of advancing official duties; (2) harnessing work- place resources; (3) projecting official authority; (4) heeding official directives; and (5) observing formal workplace hierarchies.” Fer- nandez v. Sch. Bd. of Miami-Dade Cnty., 898 F.3d 1324, 1332 (11th Cir. 2018). As to the first factor, Millspaugh argues that the district court erroneously relied on Alves v. Board of Regents of the University System of Georgia, 804 F.3d 1149 (11th Cir. 2015), because, unlike Alves, he contacted Gambrill’s office not to complain about the workplace—specifically, the staffing shortages—but to ensure pub- lic safety. He argues that the district court improperly construed facts in the Defendants’ favor by concluding that the voicemail was offered pursuant to his job duties and improperly declined to con- sider his declaration as self-serving despite corroborating evidence indicating he left the voicemail out of concern for the safety of cit- izens. As to the second factor, Millspaugh argues that he did not USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 13 of 27 22-10132 Opinion of the Court 13 use official channels or harness the Department’s resources in con- tacting Gambrill’s office. As to the third factor, Millspaugh argues that he did not present himself as a figure of authority or even rep- resent that he was a firefighter. As to the fourth and fifth factors, he contends that he did not follow official directives or observe for- mal workplace hierarchies since he had no obligation to report non-operational vehicles to Gambrill. Millspaugh also argues that the district court erred in finding that even if his speech were protected, the County’s interest in ef- ficiency outweighed his interest in that protected speech. He ar- gues that the district court ignored the balancing requirement in Pickering v. Board of Education, 391 U.S. 563 (1968), and effec- tively created an “absolute bar” against public safety employees from speaking outside the chain of command by allowing an asser- tion of loss of trust to outweigh the employee’s speech interest. He also argues that the record does not reflect a disruption in the work- place or a loss of trust because (1) Graham disagreed with his de- motion and rated him highly in his annual evaluation, (2) the issue of understaffing was already well known to the Defendants, and (3) Crider conceded that the voicemail did not disrupt the Depart- ment’s service provision. Relatedly, Millspaugh argues that the district court’s Picker- ing analysis failed to appreciate the minimal weight that is typically assigned to a fire department’s interest in efficiency. While para- military organizations generally have a strong interest in efficiency, Millspaugh cites several cases in which firefighters reporting public USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 14 of 27 14 Opinion of the Court 22-10132 safety concerns weighed heavily in the interest of the protected speech because few subjects are of greater concern to the average citizen than the provision of basic fire and rescue services. See, e.g., Beckwith v. City of Daytona Beach Shores, 58 F.3d 1554 (11th Cir. 1995); Porter v. Califano, 592 F.2d 770 (5th Cir. 1979); Abad v. City of Marathon, 472 F. Supp. 2d 1374 (S.D. Fla. 2007); Rodin v. City of Coral Springs, 229 F. App’x 849 (11th Cir. 2007). Millspaugh sub- mits that a fire department’s paramilitary status is relevant only in a few extreme situations that are not applicable here. Finally, Mill- spaugh argues that the Defendants’ expert witnesses, who stated that firefighters should not go outside the chain of command unless there is a life-threatening situation, make it impossible for firefight- ers to engage in protected speech because life-threatening situa- tions only arise in the scope of their duties. In response, the Defendants argue that the district court cor- rectly held that Millspaugh was speaking as an employee and not as a private citizen. They first argue that to determine whether an individual is speaking as an employee or a citizen, the Court must consider the “content, form, and context” of the speech. See Moss v. City of Pembroke Pines, 782 F.3d 613, 621 (11th Cir. 2015). Based on the content, context, and form of the voicemail, the Defendants argue, Millspaugh’s speech owed its existence to, and was in fur- therance of, his official job duties. Specifically, as to the voicemail’s contents, the Defendants note that Millspaugh only mentioned the purported “not operational” status of five firetrucks on that partic- ular day due to a perceived lack of staffing, which coincided with USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 15 of 27 22-10132 Opinion of the Court 15 his duty to report staffing concerns to Graham. While Millspaugh did not indicate that he was a firefighter in the voicemail, there was similarly no indication that he was speaking as a citizen. Next, the Defendants contend that Millspaugh’s official duties in staffing var- ious stations and monitoring the status board, which ordinary citi- zens cannot access in real time, led Millspaugh—who was on duty, in uniform, and at the fire station—to leave the voicemail. Thus, the context indicates that he left the voicemail as an employee. Fi- nally, the Defendants assert that the form in which Millspaugh made the speech indicates he was speaking as an employee because he left a voicemail at Gambrill’s office, instead of speaking to the broader public in a public forum. The Defendants also argue that the motive behind Mill- spaugh’s voicemail is irrelevant because courts generally consider the motive for one’s speech only when determining whether the speech is a matter of public concern—not when determining whether the speaker is speaking as a citizen. They additionally ar- gue that Millspaugh’s decision to speak outside the chain of com- mand does not weigh in favor of finding that he was speaking as a citizen, as his failure to follow instructions does not change the fact that the speech arose in the course of his job responsibilities. The Defendants also argue that even if Millspaugh spoke as a citizen, the district court correctly concluded under Pickering that the County’s interest in promoting the efficiency of public ser- vices outweighed Millspaugh’s interest in his speech. They argue USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 16 of 27 16 Opinion of the Court 22-10132 that this Court must consider the Department’s status as a paramil- itary organization and give deference to the state’s heightened in- terest in regulating the conduct of employees and that the cases that Millspaugh relies on are inapposite. Finally, the Defendants argue that the record reflects that Millspaugh’s superiors lost trust in him because of the voicemail, causing a disruption within the Department. They note that Millspaugh’s superiors were pulled from other job responsibilities to handle the situation caused by Millspaugh’s voicemail and that Millspaugh himself acknowledged the potential harm of deviating from the chain of command. Millspaugh’s arguments are unavailing. State actors may be held liable for depriving persons of any rights secured by the Con- stitution. 42 U.S.C. § 1983. A § 1983 First Amendment retaliation claim requires a four-part analysis. Moss, 782 F.3d at 617–18. First, we determine whether the plaintiff’s speech “was made as a citizen and whether it implicated ‘a matter of public concern.’” Id. (quot- ing Carter v. City of Melbourne, 731 F.3d 1161, 1168 (11th Cir. 2013)). Second, if the plaintiff’s speech was made as a citizen and implicated a matter of public concern, then we weigh the plaintiff’s interests in free speech against the government’s interest in regu- lating speech “to promote ‘the efficiency of the public services it performs through its employees.’” Id. at 618 (quoting Carter, 731 F.3d at 1168–69). These first two inquiries inform whether the plaintiff’s speech is protected speech under the First Amendment. Id. Third, if the plaintiff’s speech is protected speech, the plaintiff must show that his speech was a “substantial motivating factor” in USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 17 of 27 22-10132 Opinion of the Court 17 the alleged adverse employment action. Id. Finally, if the plaintiff makes this showing, then the burden shifts to the government to prove that it would have performed the adverse action even in the absence of the plaintiff’s speech. Id. The first part of the four-part analysis requires that the em- ployee meet two elements: (1) that he spoke as a citizen and (2) that the speech addressed matters of public concern. Boyce v. Andrew, 510 F.3d 1333, 1342–43 (11th Cir. 2007). If the plaintiff cannot make this showing, then there can be no First Amendment issue, and the constitutional inquiry ends. Id. at 1343. These two elements are questions of law that the district court must decide. Vila v. Padron, 484 F.3d 1334, 1339 (11th Cir. 2007). Generally, whether a plaintiff speaks as a citizen depends on whether the speech itself is ordinarily within the scope of an em- ployee’s duties, not whether it merely concerns those duties. Lane v. Franks, 573 U.S. 228, 240 (2014). Speech made pursuant to an employee’s job duties is not speech made as a citizen and is, there- fore, not protected by the First Amendment. Moss, 782 F.3d at 618; see also Boyce, 510 F.3d at 1342 (explaining that where public em- ployees make statements pursuant to their official duties, they are not speaking as citizens for First Amendment purposes). There is no comprehensive framework for this analysis; rather, courts must inquire into whether, as a practical matter, the speech “owes its existence” to the employee’s professional responsibilities. Moss, 782 F.3d at 618 (quoting Garcetti, 547 U.S. at 421). Relevant, but nondispositive, factors include: “the employee’s job description, USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 18 of 27 18 Opinion of the Court 22-10132 whether the speech occurred at the workplace, and whether the speech concerned the subject matter of the employee’s job.” Id. Formal job descriptions do not control the inquiry because they may bear little resemblance to the duties an employee is actually expected to perform, and employers may craft broad descriptions to restrict the rights of employees under the First Amendment. Garcetti, 547 U.S. at 424–25. Instead, “we look to the ‘content, form, and context of a given statement, as revealed by the whole record.’” Vila, 484 F.3d at 1340 (quoting Connick v. Myers, 461 U.S. 138, 146 (1983)). Additionally, to determine “whether the purpose of the em- ployee’s speech was to raise issues of public concern or to further her own private interest, . . . ‘[w]e ask whether the main thrust of the speech in question is essentially public in nature or private.” Alves, 804 F.3d at 1162 (quoting Vila, 484 F.3d at 1340); accord Boyce, 510 F.3d at 1344; see also, e.g., Mitchell v. Hillsborough County, 468 F.3d 1276, 1285–86 (11th Cir. 2006) (“Thus, if [the plaintiff’s] speech, when context, form and motivation are weighed, truly did act as a satire or parody, and the point of that satire or parody was to express a viewpoint in the Public Access debate, the speech could touch on a matter of public concern.”). If we determine that the plaintiff spoke as a citizen and on a matter of public concern, we then weigh the plaintiff’s interest in his speech against the defendant’s interest in promoting the effi- ciency of the public services it performs through its employees. USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 19 of 27 22-10132 Opinion of the Court 19 Pickering, 391 U.S. at 568. In making this determination, we con- sider the “manner, time, and place” of the speech, as well as the context in which it arose. Moss, 782 F.3d at 621 (quoting Leslie v. Hancock Cnty. Bd. of Educ., 720 F.3d 1138, 1346 (11th Cir. 2013)). Other relevant factors include whether the statement “impairs dis- cipline by superiors or harmony amongst co-workers, has a detri- mental impact on close working relationships for which loyalty and confidence are necessary, or impedes the performance of the speaker’s duties or interferes with the regular operation of the en- terprise.” Id. (quoting Leslie, 720 F.3d at 1346). The government’s interest in avoiding disruption does not require proof of actual dis- ruption, and proof of a reasonable possibility of adverse harm is sufficient. Id. at 622. In applying the Pickering test, we consider the special concerns inherent to managing paramilitary organiza- tions, such as fire departments or police departments. Oladeinde v. City of Birmingham, 230 F.3d 1275, 1293 (11th Cir. 2000); Moss, 782 F.3d at 621. In this case, it is undisputed that Millspaugh’s speech ad- dressed matters of public concern. Indeed, Millspaugh’s voicemail concerned the staffing and availability of fire suppression services, which are important issues for the safety of the community, and therefore, matters of public concern. We thus must determine whether Millspaugh spoke as a cit- izen or an employee. And, in analyzing the content, form, and con- text of his speech as revealed by the whole record, we conclude that Millspaugh spoke pursuant to his official duties and his speech USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 20 of 27 20 Opinion of the Court 22-10132 owes its existence to his official responsibilities. We proceed by tracking Millspaugh’s arguments based on the factors set forth in Fernandez. See 898 F.3d at 1332. As for the first Fernandez factor of whether Millspaugh was speaking with the objective of advancing his official duties, id., it is undisputed that ensuring adequate staffing within his battalion was squarely within Millspaugh’s job responsibilities and that he often had conversations with Graham about finding adequate staff to keep their vehicles in operation. Millspaugh’s job duties also in- cluded receiving calls from firefighters who were missing a shift and calling other firefighters to work overtime to cover missed shifts. His voicemail, in which he stated, “[h]ey, Ryan, this is Scott . . . I was wanting to know if you guys knew why there was five fire trucks not operational today in [Political] District One[,]” sought to advance his professional responsibilities of securing more staff to operate firetrucks. Millspaugh’s attempt to draw a distinction be- tween his day-to-day responsibility in assigning staff to firetrucks and his voicemail purportedly seeking to address a public safety cri- sis is unpersuasive given the content of the voicemail itself. He plainly did not reference any staffing shortages beyond that partic- ular day, broader public safety concerns, or other policy issues. We therefore conclude this factor weighs against Millspaugh speaking as a citizen. As to the second factor of whether Millspaugh harnessed workplace resources, id., Millspaugh’s uncontested testimony re- USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 21 of 27 22-10132 Opinion of the Court 21 veals that before leaving the voicemail, he harnessed the Depart- ment’s resources by reviewing the status board, which is unavaila- ble to ordinary citizens. And we find Millspaugh’s argument that his use of the status board does not amount to a harnessing of workplace resources because he only used workplace resources to inform, not communicate, unpersuasive. As to the third factor of whether Millspaugh projected official authority, id., while Mill- spaugh is correct in that he did not present himself as a figure of authority, it is also evident that he did not state that he was a citi- zen, and he conveyed information to which only a firefighter would have access. We thus conclude that the second and third factors weigh against Millspaugh speaking as a citizen. Finally, while the fourth and fifth Fernandez factors may weigh in favor of Millspaugh because he did not follow official di- rectives or observe formal workplace hierarchies, see id., we con- clude they do not overcome the first three factors, which indicate that, as a practical matter, Millspaugh’s voicemail owes its exist- ence to his professional responsibilities. Cf. Alves, 804 F.3d at 1163 (holding that plaintiffs expressing their concerns to persons “well outside” their chain of command did not mean that they were speaking as citizens rather than employees). We also note that Millspaugh testified that he left the voicemail while he was on duty, at the fire station, and in direct response to checking the status board to see which vehicles were in service. While none of these USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 22 of 27 22 Opinion of the Court 22-10132 factors are dispositive, the factors ultimately weigh in favor of find- ing that Millspaugh was not speaking as a citizen but as an em- ployee. See Moss, 782 F.3d at 618. Further, Millspaugh’s argument that the Defendants’ focus on the content, form, and context of the speech must be analyzed “as revealed by the whole record,” while correct, does not advance his case. Vila, 484 F.3d at 1340. Viewing the record as a whole, the content, form, and context of the voicemail reveal that Millspaugh was speaking as an employee, not a citizen. Chronic staff shortages reflected in the record buttress the finding that the content of the voicemail was to further Millspaugh’s official duties in securing staffing for his battalion. Viewing the record as a whole, the con- text of the voicemail also indicates that Millspaugh was speaking as a public employee: Millspaugh was at the fire station, in uniform, and on duty when he left the voicemail. The form of the speech also supports the finding that Millspaugh spoke as an employee since he left a voicemail for Gambrill’s office and did not speak to the broader public in a public forum. Millspaugh provides no legal support for his contention that his form of speech indicates that he was speaking as a citizen because Gambrill could have made his voicemail public. Millspaugh argues that we should consider his declaration and contemporaneous explanation for the voicemail on May 2, 2019, but we disagree. As a preliminary matter, the Defendants argue that motive is relevant only in determining whether the USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 23 of 27 22-10132 Opinion of the Court 23 speech is a matter of public concern. While we have examined mo- tive to determine whether the speech in question is a matter of public concern, the Defendants’ cited cases do not establish that motive is relevant only in determining public concern. See Alves, 804 F.3d at 1162; Boyce, 510 F.3d at 1344; Mitchell, 468 F.3d at 1285–86. Rather, as Millspaugh rightly argues, we have considered motive in determining whether the speech was made as a citizen or employee. See Moss, 782 F.3d at 619 (considering the plaintiff’s testimony regarding motive in determining whether the plaintiff spoke as an employee or citizen). Motive is thus relevant for both inquiries. Nonetheless, Millspaugh’s reliance on his declaration and his contemporaneous explanation is misplaced. First, the district court correctly determined that his declaration was immaterial because it was an after-the-fact explanation of his reasoning that was una- vailable to the Defendants at the time. Second, Millspaugh’s con- temporaneous explanation for the voicemail on May 2, 2019, indi- cates that the purpose of the voicemail was, at least in part, to en- sure “adequate coverage in District 1” by increasing staffing. Fur- ther, Millspaugh repeatedly testified that he left the voicemail be- cause of understaffing. As noted above, securing additional staffing directly furthered Millspaugh’s duties in overseeing staffing on a day-to-day basis and ensuring sufficient staffing for his battalion. Thus, Millspaugh’s own contemporaneous explanation indicates that his voicemail was intended to advance his official duties. USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 24 of 27 24 Opinion of the Court 22-10132 Accordingly, the district court did not err in determining that Millspaugh’s voicemail arose within the scope of his profes- sional responsibilities and was not protected by the First Amend- ment. Because the district court did not err, this Court need not consider whether the Defendants’ interest in promoting efficiency in providing fire suppression services outweighs Millspaugh’s inter- est in the speech. See Boyce, 510 F.3d at 1343 (“If the government employee, however, was speaking as an employee, then there can be no First Amendment issue, and the constitutional inquiry ends with no consideration of the Pickering test.”). But even if Millspaugh’s voicemail were protected speech under the First Amendment, the district court correctly deter- mined that the Defendants’ interest in promoting the efficiency of fire suppression services outweighed Millspaugh’s interest in the speech. See Pickering, 391 U.S. at 568. As an initial matter, while Millspaugh relies on several cases to argue that we should not give deference to the fact that the Department is a paramilitary organi- zation with a heightened interest in regulating employees, we do not find these cases instructive. First, in Beckwith, 58 F.3d at 1564, the question of whether the plaintiff’s speech was protected was not disputed, and we have since held that the part of the Beckwith holding that Millspaugh relies on is dicta, see Anderson v. Burke County, 239 F.3d 1216, 1220 (11th Cir. 2001). Second, Millspaugh’s reliance on Porter, 592 F.2d 770, is unpersuasive as Porter did not involve a paramilitary organization. Third, Abad, 472 F. Supp. 2d 1374, is a non-binding district court decision in which the district USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 25 of 27 22-10132 Opinion of the Court 25 court relied on the aforementioned dicta in Beckwith. Finally, Ro- din, 229 F. App’x 849, is inapposite because the unpublished opin- ion concerned the issue of whether the speech was of public con- cern, not whether the speaker was speaking as an employee or cit- izen. Meanwhile, we have consistently held that fire departments are paramilitary organizations with a heightened interest in regu- lating the conduct of employees. Moss, 782 F.3d at 621; Anderson, 239 F.3d at 1222. Further, in Moss, we recognized the heightened interest of the fire department even though the case did not involve an extreme situation, thereby establishing that the heightened in- terest that fire departments have as a paramilitary organization is not limited to extreme situations as Millspaugh argues. Moss, 782 F.3d at 616. With this heightened interest in mind, we find that the un- disputed testimonies of several individuals establish that Mill- spaugh’s voicemail damaged his superiors’ trust in him and thereby undermined the Department’s heightened interest in promoting the efficiency of fire suppression services. Crider testified that Mill- spaugh’s voicemail violated his trust, and Graham testified that he felt undermined by Millspaugh’s conduct. Millspaugh himself tes- tified that fire departments rely on trust among employees when providing emergency services to the public. Millspaugh also ad- mitted that breaking the chain of command could cause issues be- tween a firefighter and his superiors. Given such undisputed testi- mony, even after viewing the evidence in the light most favorable USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 26 of 27 26 Opinion of the Court 22-10132 to Millspaugh, the record reflects that there was at least a reasona- ble possibility of adverse harm to Millspaugh’s working relation- ships with his superiors to tilt the Pickering analysis in the Defend- ants’ favor. See Moss, 782 F.3d at 622 (holding that proof of a rea- sonable possibility of adverse harm is sufficient). Accordingly, Millspaugh’s speech was not protected by the First Amendment. B. Crider and Gross Were Entitled to Qualified Immunity Millspaugh further argues that the district court erred in granting qualified immunity to the Individual Defendants because he engaged in speech that was protected by the First Amendment. He claims that the law is clearly established that he is entitled to First Amendment protections, the Individual Defendants did not articulate any risk to the efficiency of their operations, and the In- dividual Defendants knowingly violated the First Amendment by retaliating against him. In response, the Defendants argue that Millspaugh’s First Amendment rights were not violated for the rea- sons discussed above and that even if there were a First Amend- ment violation, the specific right was not clearly established. We review the grant of qualified immunity de novo. Courson, 939 F.2d at 1486. Qualified immunity is an affirmative defense that entitles a government actor not to stand trial or face the burdens of litigation in civil damages suits when he was en- gaged in discretionary conduct that did not violate clearly estab- lished statutory or constitutional rights that a reasonable person USCA11 Case: 22-10132 Date Filed: 11/22/2022 Page: 27 of 27 22-10132 Opinion of the Court 27 would have known. Koch v. Rugg, 221 F.3d 1283, 1294 (11th Cir. 2000). To be entitled to qualified immunity, the defendant must establish that “he was acting within the scope of his discretionary authority.” Gaines v. Wardynski, 871 F.3d 1203, 1208 (11th Cir. 2017). Once this threshold inquiry is met, the burden shifts to the plaintiff to establish that qualified immunity is not appropriate. Id. The plaintiff must show that: (1) the defendant violated his consti- tutional rights, and (2) that, at the time of the violation, those rights were clearly established. Id. Millspaugh’s arguments are unavailing. As Millspaugh con- cedes, qualified immunity turns on whether Millspaugh’s voicemail is protected by the First Amendment. For the reasons stated above, we find that Millspaugh’s voicemail was not pro- tected by the First Amendment. And because Millspaugh’s voicemail was not protected by the First Amendment, he fails to meet his burden of proving that the Individual Defendants violated any constitutional rights. See id. Accordingly, the district court did not err in determining that the Individual Defendants were entitled to qualified immunity, and we need not proceed further. IV. CONCLUSION For the reasons stated, we affirm the district court’s order. AFFIRMED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488614/	United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT Argued October 13, 2022 Decided November 15, 2022 No. 21-1162 OHIO NUCLEAR-FREE NETWORK AND BEYOND NUCLEAR, PETITIONERS v. U.S. NUCLEAR REGULATORY COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS AMERICAN CENTRIFUGE OPERATING, LLC, INTERVENOR On Petition for Review of an Order of the Nuclear Regulatory Commission Terry J. Lodge argued the cause for petitioners. With him on the briefs was Wallace L. Taylor. Eric V. Michel, Senior Attorney, U.S. Nuclear Regulatory Commission, argued the cause for respondents. With him on the brief were Todd Kim, Assistant Attorney General, U.S. Department of Justice, Justin D. Heminger, Attorney, and Andrew P. Averbach, Solicitor, U.S. Nuclear Regulatory Commission. 2 Brad Fagg argued the cause for intervenor American Centrifuge Operating, LLC in support of respondent. Before: SRINIVASAN, Chief Judge, HENDERSON, Circuit Judge, and EDWARDS, Senior Circuit Judge. Opinion for the Court filed by Circuit Judge HENDERSON. KAREN LECRAFT HENDERSON, Circuit Judge: Ohio Nuclear-Free Network (Ohio Nuclear) and Beyond Nuclear petition for review of a decision of the Nuclear Regulatory Commission (NRC, Commission), issuing an amended materials license to American Centrifuge Operating, LLC (American Centrifuge). The amended license authorizes American Centrifuge to produce high-assay, low-enriched uranium (HALEU) at a facility near Piketon, Ohio pursuant to a demonstration program with the U.S. Department of Energy (DOE). The petitioners contend, inter alia, that the NRC issued the amended license without first preparing an Environmental Impact Statement (EIS), which they assert was required by the National Environmental Policy Act (NEPA), 42 U.S.C. § 4332(C). Under the Hobbs Act, 28 U.S.C. § 2344, however, we lack jurisdiction to consider their petition because they failed to become parties to the NRC proceedings below. Accordingly, we dismiss their petition for review. I. The Atomic Energy Act (AEA), 42 U.S.C § 2011 et seq., authorizes the NRC to issue materials licenses for the handling of special nuclear material like enriched uranium—a substance enhanced in the uranium-235 isotope and used to fuel America’s nuclear power plants, see id. §§ 2073(a), 2077(a), 2014(aa); Nuclear Info. & Res. Serv. v. NRC, 509 F.3d 562, 565 (D.C. Cir. 2007). Pursuant to this authority, the NRC issued a 3 30-year materials license to U.S. Enrichment Corp. in 2007. The license authorized U.S. Enrichment Corp. to construct, operate and decommission the American Centrifuge Plant, a uranium-enrichment facility located on a DOE reservation near Piketon, Ohio. It further authorized uranium enrichment of up to ten per cent uranium-235 at the American Centrifuge Plant. NEPA requires all federal agencies to document the environmental impacts of certain proposed federal actions, including the issuance of a license to construct or operate a uranium-enrichment facility. See 42 U.S.C. § 4332(C). To meet its NEPA obligations, the NRC promulgated 10 C.F.R. Part 51, which specifies two forms of the environmental documentation that NEPA ordinarily requires: an EIS or an environmental assessment (EA). See Nat. Res. Def. Council v. NRC, 823 F.3d 641, 643 (D.C. Cir. 2016). An EIS is required for any proposed “major Federal action[] significantly affecting the quality of the human environment,” 42 U.S.C. § 4332(C); 10 C.F.R. § 51.20(a)(1), or for any proposed action for which the Congress or the Commission has categorically required an EIS, see 42 U.S.C. § 2243(a)(1); 10 C.F.R. § 51.20(a)(2), (b). An EA, by contrast, is required for any proposed federal action that does not require an EIS and is not otherwise categorically excluded from environmental review. 10 C.F.R. § 51.21; see Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1322 (D.C. Cir. 2015). Because an EIS is categorically required for the initial licensing of a uranium-enrichment facility, see 42 U.S.C. § 2243(a)(1); 10 C.F.R. § 51.20(b)(7), the NRC prepared one that addressed the environmental consequences of U.S. Enrichment Corp.’s proposed licensing of the American Centrifuge Plant before issuing the license in 2007. Despite receiving the license, U.S. Enrichment Corp. never constructed the American Centrifuge Plant or put it into 4 operation and later transferred the license to its wholly owned subsidiary, American Centrifuge. In 2019, American Centrifuge entered a three-year contract with the DOE to demonstrate its ability to produce uranium enriched between five and twenty per cent, commonly known as high-assay, low- enriched uranium (HALEU). See 42 U.S.C. § 16281(d)(4). Under the demonstration program, American Centrifuge would produce and provide to the DOE up to 600 kilograms of HALEU enriched at 19.75 per cent. The DOE wanted both to determine whether HALEU could be produced using existing technology and to assess HALEU’s potential for research and development activities. American Centrifuge then sought an amendment to its materials license to authorize the production of HALEU for the DOE demonstration program. It requested NRC authorization to produce and possess 19.75 per cent enriched uranium, with an upper limit of twenty-five per cent enrichment to account for minor variations in the enrichment process. With the amendment request, American Centrifuge also submitted an environmental report to assist the NRC in its independent review of the proposed amendment under NEPA, see 10 C.F.R. §§ 51.14, 51.45, as well as several other documents related to the NRC’s safety and security review of the proposed amendment, see 10 C.F.R. Parts 73–74. The NRC posted a notice of the amendment request on its website in accordance with its regulations, apprising any interested persons of the proposed amendment. See 10 C.F.R. § 2.105(a). The AEA and its regulations set forth the procedures by which an interested “person” may intervene in a licensing proceeding like the one at issue here. “In any proceeding . . . for the granting, suspending, revoking, or amending of any license or construction permit,” a “person whose interest may be affected by the proceeding” may request a hearing and 5 thereby be admitted “as a party” to the proceeding. 42 U.S.C. § 2239(a)(1)(A). The hearing request must specify the “contentions” such person “seeks to have litigated in the hearing” and must be submitted within sixty days after the NRC publishes notice of the proposed action on its website or sixty days after the hearing requestor receives actual notice of the proposed action, whichever is later. See 10 C.F.R. § 2.309(a), (b)(4). The Commission will grant a timely hearing request or petition for leave to intervene if the requestor has standing to intervene and proposes at least one “admissible” contention for adjudication. Id. § 2.309(a); see also id. § 2.105(e)(2). Petitioners Ohio Nuclear and Beyond Nuclear could have submitted a hearing request pursuant to 10 C.F.R. § 2.309 but they did not. Rather, on March 30, 2021, they emailed a letter to the NRC staff arguing that the proposed license amendment violated federal law and asking the NRC, in reviewing the proposal, to prepare an EIS and consider certain potential environmental consequences. The petitioners’ letter did not request a hearing or seek permission to intervene in the licensing proceedings, nor did the petitioners submit anything further to the NRC. In June 2021, the NRC completed an EA of the proposed license amendment and awarded American Centrifuge the amended license. The EA found that the proposal would have “no significant environmental impact,” see EA/FONSI Public Notice, 86 Fed. Reg. 31,539 (June 14, 2021) (App. 338), thereby rendering an EIS unnecessary, see 42 U.S.C. § 4332(C); 10 C.F.R. § 51.20(a)(1); Myersville Citizens, 783 F.3d at 1322. In granting the license, the NRC authorized American Centrifuge to possess twenty-five per cent enriched uranium but forbade it from extracting uranium enriched above twenty per cent. American Centrifuge has yet to produce 6 HALEU for the DOE demonstration program and in fact extended its contract with the DOE for an additional six months, through the end of November 2022. Ohio Nuclear and Beyond Nuclear now challenge before us the NRC’s authorization of the demonstration program. They filed a timely petition for review of the NRC’s final order awarding American Centrifuge the amended license, arguing that the NRC violated NEPA by failing to prepare an EIS and by failing to address the environmental concerns raised in their letter to the NRC staff. The NRC moved to dismiss the petition for lack of jurisdiction and American Centrifuge intervened on behalf of the NRC. II. Ohio Nuclear and Beyond Nuclear cite the Hobbs Act, 28 U.S.C. § 2344, as the basis for our jurisdiction. The Hobbs Act confers on this Court jurisdiction to review “all final orders” of the NRC that are “made reviewable by section 2239 of title 42.” 28 U.S.C. § 2342(4). Section 2239, in turn, makes “subject to judicial review . . . [a]ny final order entered in any proceeding” under the AEA, 42 U.S.C. ch. 23, “for the granting, suspending, revoking, or amending of any license.” 42 U.S.C. § 2239(b)(1), (a). But under the Hobbs Act, our jurisdiction “is invoked” only if a “party aggrieved by the final order” files a timely petition for review. 28 U.S.C. § 2344. The “party aggrieved” requirement, we have explained, demands “that petitioners have been parties to the underlying agency proceedings” in order to invoke our jurisdiction to review their petition. ACA Int’l v. FCC, 885 F.3d 687, 711 (D.C. Cir. 2018); see also Alaska v. FERC, 980 F.2d 761, 763 (D.C. Cir. 1992) (“We have routinely interpreted this phrase to allow petitions by parties who were intervenors before the Commission and who would suffer injury-in-fact from its final disposition.”). 7 When “intervention in agency adjudication or rulemaking is prerequisite to participation therein, standing to seek judicial review of the outcome will be denied to those who did not seek—or who sought but were denied—leave to intervene.” Water Transp. Ass’n v. ICC, 819 F.2d 1189, 1192 (D.C. Cir. 1987). Because neither petitioner properly intervened in the underlying NRC proceeding, they are not “part[ies] aggrieved” by the agency order and, accordingly, we lack jurisdiction to review their petition. Although the “degree of participation necessary to achieve party status varies according to the formality with which the proceeding was conducted,” Water Transp. Ass’n, 819 F.2d at 1192, the AEA and its regulations address the manner in which interested persons may become parties to the precise sort of proceeding at issue. “In any proceeding under” the AEA for the “amending of any license,” “the Commission shall grant a hearing upon the request of any person whose interest may be affected by the proceeding[] and shall admit [the] person as a party to such proceeding.” 42 U.S.C. § 2239(a)(1)(A). To request a hearing, a person “who desires to participate as a party” must file a written request specifying the contentions it intends to raise at the hearing. 10 C.F.R. § 2.309(a); see also id. § 2.309(f) (describing the admissibility standards applicable to contentions). The Commission “will grant the request” if the interested person raises “at least one admissible contention that meets the requirements of paragraph (f)” and “has standing under the provisions of paragraph (d).” Id. § 2.309(a); see also id. § 2.309(d). If the request is denied, the Commission’s regulations permit the interested person to immediately appeal that denial. Id. § 2.311(c); see Nat. Res. Def. Council, 823 F.3d at 643–44. Invocation of the “the appropriate and available administrative procedure” described above, we have held, “is 8 the statutorily prescribed prerequisite for this court’s jurisdiction to entertain [a] petition [to] review” a final NRC order described in 42 U.S.C. § 2239. Gage v. U.S. Atomic Energy Comm’n, 479 F.2d 1214, 1217 (D.C. Cir. 1973); see also Nat. Res. Def. Council, 823 F.3d at 643 (“To challenge the [NRC’s] grant of a license renewal . . . a party must have successfully intervened in the proceeding by submitting adequate contentions under 10 C.F.R. § 2.309.”). But the petitioners failed to request a hearing or submit contentions related to the amended license. Instead, they emailed a letter— which made no mention of a hearing—to the NRC staff. The “informal[] present[ation of] views” to the NRC by the petitioners, who “were neither unaware of the proposed [amendment] nor strangers to the [NRC] staff,” is insufficient to satisfy the Hobbs Act’s “party aggrieved” requirement. Gage, 479 F.2d at 1217 n.11. That the petitioners raise NEPA objections to the NRC’s issuance of the amended license does not change our thinking. NEPA does not give the petitioners an independent cause of action, Theodore Roosevelt Conservation P’ship v. Salazar, 616 F.3d 497, 507 (D.C. Cir. 2010), so they rely on the Hobbs Act and the AEA to challenge the license amendment. They are thus obliged to comply with the hearing procedures set out therein. NEPA “does not, by its own terms or its intent, alter the Commission’s hearing procedures.” Nat. Res. Def. Council, 823 F.3d at 652 (quoting Beyond Nuclear v. NRC, 704 F.3d 12, 18–19 (1st Cir. 2013)). Any person seeking to intervene in “any proceeding” under the AEA “for the . . . amending of any license”—including those who object to the agency’s discharge of its NEPA duties—must request a hearing or otherwise intervene in the proceeding as required by the AEA and its regulations. 42 U.S.C. § 2239(a)(1)(A); see 10 C.F.R. § 2.309. Indeed, the NRC’s regulations expressly permit interested persons to raise NEPA contentions in their request for a 9 hearing. 10 C.F.R. § 2.309(f)(2) (“On issues arising under [NEPA], participants shall file contentions based on the applicant’s environmental report.”); see also Union of Concerned Scientists v. NRC, 920 F.2d 50, 56–57 (D.C. Cir. 1990). Because the petitioners failed to properly intervene in the manner required by 42 U.S.C. § 2339 and the NRC’s AEA regulations, they were not parties to the licensing amendment proceeding they now ask us to review. Accordingly, under the Hobbs Act, 28 U.S.C. § 2344, we dismiss their petition for review for lack of jurisdiction. It is so ordered.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488604/	21-2928-cv Morrow v. Bauersfeld UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 22nd day of November, two thousand twenty-two. PRESENT: DENNIS JACOBS, RICHARD C. WESLEY, JOSEPH F. BIANCO, Circuit Judges. _____________________________________ Neb Morrow, III, Plaintiff-Appellant, v. Bauersfeld, Commissioner’s Hearing Officer (CHO), Auburn Correctional Facility, 21-2928-cv Defendant-Appellee, Harold Graham, Superintendent, Sergeant Van Fleet, Superintendent of D-Block, J. Perkins, Corrections Officer in D-Block, Auburn Correctional Facility, Defendants. _____________________________________ FOR PLAINTIFF-APPELLANT: Neb Morrow, III, pro se, Ossining, NY. FOR DEFENDANT-APPELLEE: Kate H. Nepveu, Assistant Solicitor General of Counsel, Victor Paladino, Senior Assistant Solicitor General, Barbara D. Underwood, Solicitor General, for Letitia James, Attorney General State of New York, Albany, NY. Appeal from a judgment of the United States District Court for the Northern District of New York (Hurd, J.). UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED. Plaintiff-appellant Neb Morrow, III, proceeding pro se, appeals the district court’s grant of summary judgment in favor of defendant-appellee Brian Bauersfeld with respect to Morrow’s retaliation claim under 42 U.S.C. § 1983. Morrow alleged that, after he filed several grievances while incarcerated at Sing Sing Correctional Facility, the defendant officers searched his cell without him present, in violation of a Department of Corrections and Community Supervision (“DOCCS”) directive. One of the corrections officers who searched the cell stated that he found a weapon under Morrow’s bed—a nine-inch piece of flat metal that had been sharpened to a point. Morrow was administratively charged with possession of a weapon but claimed the weapon was planted. Morrow further asserted that Bauersfeld, an attorney acting as the Commissioner’s Hearing Officer, wrongfully found Morrow guilty of the weapon possession charge after conducting a disciplinary hearing notwithstanding the officers’ alleged violation of the DOCCS’s directive. That decision was later overturned on administrative appeal and the charge expunged because of the officers’ violation of the DOCCS search procedure directive, but only after Morrow had spent a significant period of time in restricted custody due to the disciplinary sanction. Morrow brought this First Amendment retaliation claim against Bauersfeld, alleging that 2 Bauersfeld’s decision to sustain the charge against him was part of an ongoing pattern of retaliation arising out of his filing of constitutionally-protected grievances. 1 We assume the parties’ familiarity with the underlying facts, the procedural history, and the issues on appeal, to which we refer only as necessary to explain our decision to affirm. We review a district court’s grant of summary judgment de novo, construing facts in the light most favorable to the non-moving party and resolving all ambiguities and drawing all reasonable inferences against the moving party. Kee v. City of New York, 12 F.4th 150, 157–58 (2d Cir. 2021). Summary judgment should only be granted if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). To establish a First Amendment retaliation claim under Section 1983, “a prisoner must show (1) that the speech or conduct at issue was protected, (2) that the defendant took adverse action against the plaintiff, and (3) that there was a causal connection between the protected speech and the adverse action.” Burns v. Martuscello, 890 F.3d 77, 84 (2d Cir. 2018) (internal quotation marks and citation omitted). If a plaintiff establishes these elements, a defendant may still avoid liability by establishing that he “would have taken the adverse action even in the absence of the protected conduct.” Brandon v. Kinter, 938 F.3d 21, 40 (2d Cir. 2019) (internal quotation marks and citation omitted). Here, it is undisputed that Morrow’s filing of grievances is protected activity and the disciplinary sanction constitutes an adverse action. See, e.g., Gill v. Pidlypchak, 389 F.3d 379, 384 (2d Cir. 2004) (“[Plaintiff] has sufficiently alleged . . . participation in protected activity: the 1 Morrow also named the corrections officers as defendants, but his claims against those defendants were dismissed by the district court as time-barred. He does not challenge that decision on appeal. 3 use of the prison grievance system.”); see also id. (holding that the filing of false misbehavior reports resulting in disciplinary sanctions satisfied the “adverse action” element). Therefore, as Bauersfeld concedes, the sole element at issue is causation. To satisfy the causal element of a retaliation claim, a plaintiff must “introduce evidence sufficient to support the inference that the speech played a substantial part in the adverse action.” Brandon, 938 F.3d at 40 (internal quotation marks and citation omitted). In the absence of direct evidence, circumstantial evidence may satisfy a plaintiff’s burden if it is “sufficiently compelling.” Bennett v. Goord, 343 F.3d 133, 139 (2d Cir. 2003). We have considered as circumstantial evidence, among other things, the temporal proximity between speech and an adverse action and subsequent findings that the adverse action was unjustified. See, e.g., id. at 138. In response to Bauersfeld’s summary judgment motion, Morrow provided no direct evidence that Bauersfeld was motivated by retaliatory animus. Instead, Morrow contended that the timing of Bauersfeld’s decision, as well as the fact that it was later overturned, supplied sufficient circumstantial evidence to preclude summary judgment on the causation issue. The district court, however, concluded “[a]fter careful review of the underlying record, there is insufficient evidence from which a jury could find the causation requirement satisfied on these facts.” Supp. App’x at 245. We agree. As an initial matter, the strength of any inference drawn from the temporal proximity between the grievances and the disciplinary action must be examined in light of the circumstances. Here, it is uncontroverted that Bauersfeld did not play any role in the search that prompted the grievances, and the occurrence and timing of Morrow’s hearing were set by regulation, not Bauersfeld. Therefore, because Bauersfeld had no control over the timing of the hearing, any inference from the temporal proximity between the protected activity and the adverse action 4 following the hearing is substantially weakened. See McCullough v. Wyandanch Union Free Sch. Dist., 187 F.3d 272, 280 (2d Cir. 1999) (concluding that “when scrutinized” the surrounding factual context “render[s] unremarkable any temporal connection” between the protected conduct and the alleged retaliation); cf. Espinal v. Goord, 558 F.3d 119, 129 (2d Cir. 2009) (holding that temporal proximity was established where six months had elapsed and it was “plausible that the officers waited to exact their retaliation at an opportune time”). In any event, we have repeatedly held that temporal proximity alone is insufficient for a prisoner’s retaliation claim to survive summary judgment. See, e.g., Blue v. Koren, 72 F.3d 1075, 1085 (2d Cir. 1995) (“[A] temporal sequence may fuel . . . suspicions [of retaliatory motive]” but was insufficient to allow retaliation claim to survive summary judgment); see also Washington v. Afify, 681 F. App’x 43, 46 (2d Cir. 2017) (summary order) (“Although we have held that temporal proximity between protected conduct and an adverse action constitutes circumstantial evidence of retaliation, we have consistently required some further evidence of retaliatory animus before permitting a prisoner to proceed to trial on a retaliation claim.”); accord Faulk v. Fisher, 545 F. App’x 56, 58 (2d Cir. 2013) (summary order) (collecting cases). The only other evidence upon which Morrow relies to support an inference of retaliatory intent is the reversal of Bauersfeld’s decision on administrative appeal. However, as with the temporal proximity evidence, any inference from this reversal is substantially undermined by the surrounding circumstances. It is undisputed that Bauersfeld is not an official against whom Morrow previously filed grievances, but instead a civilian employee who had “little to no contact” with the corrections officers allegedly involved in the misconduct in his cell. Supp. App’x at 162; see Wright v. Goord, 554 F.3d 255, 274 (2d Cir. 2009) (holding no rational juror could find retaliatory motive by a corrections officer where, inter alia, inmate’s grievance letter did not name 5 that officer and that officer was not a participant in the alleged misconduct). Additionally, the record reveals no evidence about how the hearing took place, Bauersfeld’s conduct at the hearing, or any prior interactions between Bauersfeld and Morrow that could support retaliatory intent. Moreover, Bauersfeld’s determination was not reversed for lack of substantial evidence, but rather because, under the DOCCS directive, Morrow “should have [had] the ability to view [the] cell search in its entirety upon being removed.” Supp. App’x at 196. In other words, that reversal on appeal did not call into question Bauersfeld’s credibility assessments or his finding that Morrow possessed a weapon in his cell, but rather reversed the sanction on procedural grounds. Therefore, this record is distinguishable from cases in which the circumstantial evidence (including temporal proximity and the circumstances surrounding the inmate’s vindication on the charges) was sufficient to preclude summary judgment on the issue of retaliatory animus. See, e.g., Bennett, 343 F.3d at 138 (holding evidence precluded summary judgment where, in addition to the temporal proximity of the adverse actions to the protected activity, such actions were not overturned on “procedural or technical grounds” but rather were all “found to have been devoid of factual support,” including one instance where “the hearing officer [was] reprimanded for failing to develop a record supporting the conclusion he had reached”); Jones v. Coughlin, 45 F.3d 677, 679–80 (2d Cir. 1995) (holding that plaintiff’s testimony about retaliatory threats, along with the sequence of events and expungement of disciplinary charge, was sufficient to preclude summary judgment). In contrast to those cases, given the paucity of circumstantial evidence in this record, any inference of retaliatory animus from Bauersfeld’s failure to recognize the procedural defect in the search would be based on sheer speculation. See generally Harlen Assocs. v. Inc. Vill. of Mineola, 273 F.3d 494, 499 (2d Cir. 2001) (“Although all inferences must be drawn in favor of the nonmoving party, mere speculation and conjecture is insufficient to preclude the granting of [a 6 summary judgment] motion.”). In sum, we agree with the district court that the circumstantial evidence proffered by Morrow is an insufficient basis from which a rational jury could find that Bauersfeld’s decision in the disciplinary proceeding against Morrow was motivated, in substantial part, by retaliatory animus. Therefore, the district court properly granted summary judgment in Bauersfeld’s favor on the retaliation claim. * * * We have considered all of Morrow’s remaining arguments and find in them no basis for reversal. Accordingly, we AFFIRM the judgment of the district court. FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court 7	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488605/	20-3291 Lopez Marin v. Garland BIA Navarro, IJ A046 002 995 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 22nd day of November, two thousand twenty- two. PRESENT: GERARD E. LYNCH, MICHAEL H. PARK, STEVEN J. MENASHI, Circuit Judges. _____________________________________ HERNAN ANTONIO LOPEZ MARIN, Petitioner, v. 20-3291 NAC MERRICK B. GARLAND, UNITED STATES ATTORNEY GENERAL, Respondent. _____________________________________ FOR PETITIONER: Steven Haskos, Esq., Law Office of Craig Relles, White Plains, NY. FOR RESPONDENT: Brian M. Boynton, Acting Assistant Attorney General; Jonathan Robbins, Senior Litigation Counsel; Dana M. Camilleri, Trial Attorney, Office of Immigration Litigation, United States Department of Justice, Washington, DC. UPON DUE CONSIDERATION of this petition for review of a Board of Immigration Appeals (“BIA”) decision, it is hereby ORDERED, ADJUDGED, AND DECREED that the petition for review is DENIED. Hernan Antonio Lopez Marin, a native and citizen of Colombia, seeks review of an August 27, 2020, decision of the BIA affirming a May 24, 2018, decision of an Immigration Judge (“IJ”) denying his application for protection under the Convention Against Torture (“CAT”). In re Herman Antonio Lopez Marin, No. A046 002 995 (B.I.A. Aug. 27, 2020), aff’g No. A046 002 995 (Immig. Ct. N.Y. City May 24, 2018). We assume the parties’ familiarity with the underlying facts and procedural history. We have reviewed the IJ’s decision as modified by the BIA. See Xue Hong Yang v. U.S. Dep’t of Justice, 426 F.3d 520, 522 (2d Cir. 2005). The applicable standards of review are well established. “[T]he administrative findings of fact are conclusive unless any reasonable adjudicator would be compelled to conclude to the contrary.” 8 U.S.C. 2 § 1252(b)(4)(B). “Accordingly, we review the agency’s decision for substantial evidence and must defer to the factfinder’s findings based on such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. . . . By contrast, we review legal conclusions de novo.” Singh v. Garland, 11 F.4th 106, 113 (2d Cir. 2021) (internal quotation marks omitted); see also Nasrallah v. Barr, 140 S. Ct. 1683, 1694 (2020) (holding that removability on criminal grounds does not limit our jurisdiction to review the denial of CAT relief). The agency did not err in finding that Lopez Marin failed to establish a sufficient likelihood of torture in Colombia. A CAT applicant has the burden to demonstrate that he would “more likely than not” be tortured by or with the acquiescence of government officials. 8 C.F.R. §§ 1208.16(c)(2), 1208.18(a)(1). The agency considers “all evidence relevant to the possibility of future torture,” including “[e]vidence of past torture,” ability to relocate, and violations of human rights within the country of removal. Id. § 1208.16(c)(3). Lopez Marin provided background evidence on conditions in Colombia and alleged that he would be tortured by the guerilla group that murdered his father in 1981 because the 3 family’s report of the murder resulted in the conviction and imprisonment of two individuals. General evidence of violence and corruption is not sufficient to establish that an applicant is more likely than not to be tortured. See Jian Xing Huang v. U.S. INS, 421 F.3d 125, 129 (2d Cir. 2005) (“In the absence of solid support in the record . . . [an applicant’s] fear is speculative at best.”); Mu-Xing Wang v. Ashcroft, 320 F.3d 130, 144 (2d Cir. 2003) (holding that CAT applicant must provide some evidence “that someone in his particular alleged circumstances is more likely than not to be tortured” (emphasis omitted)); cf. Melgar de Torres v. Reno, 191 F.3d 307, 314 n.3 (2d Cir. 1999) (noting that general violence does not establish a well-founded fear of persecution absent evidence of a particular risk to the applicant). Lopez Marin did not otherwise establish that he will be targeted for torture by the group that killed his father: his father’s murder occurred over forty years ago, his family members in Colombia have not been targeted, and he had no information about the identity of any individuals or whether his father’s killers had been released from prison or were still alive. Given the passage of time and the absence of evidence that anyone is interested in harming Lopez Marin, 4 substantial evidence supports the denial of CAT relief. See Jian Hui Shao v. Mukasey, 546 F.3d 138, 157-58 (2d Cir. 2008) (“[W]hen a petitioner bears the burden of proof, his failure to adduce evidence can itself constitute the ‘substantial evidence’ necessary to support the agency’s challenged decision.”). We have considered Lopez Marin’s remaining arguments and find them to be without merit. For the foregoing reasons, the petition for review is DENIED. All pending motions and applications are DENIED and stays VACATED. FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court 5	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494677/	715Opinion STEPHEN RASLAVICH, Chief Judge. Introduction Before the Court is the Trustee’s Motion for Partial Summary Judgment Pursuant to Federal Rule of Bankruptcy Procedure 7056 (the “Motion”). In the Motion, PN Chapter 11 Estate Liquidating Trust, through its Liquidation Trustee (“Trustee”), seeks summary judgment against defendant, Inserts East, Incorporated (“Defendant”), with respect to the following Counts of the Trustee’s Amended Complaint: Count I for the avoidance of preferential transfers pursuant to 11 U.S.C. § 547; Count IV for the recovery of avoided transfers pursuant to 11 U.S.C. § 550; and Count V for the disallowance of claims pursuant to 11 U.S.C. § 502(d) and (j).1 While the original amount at issue in the Amended Complaint was $118,163.81, see Amended Complaint ¶ 10, the amount has been decreased to $65,655.26 as a result of: (i) the Trustee’s concession that six of the transfers at issue were made within the ordinary course of business between the parties; and (ii) the Trustee’s concession that the Defendant provided subsequent new value to the Debtor in the amount of $30,294.08. Upon consideration and for the reasons set forth below, the Trustee shall be granted summary judgment. However, based on the Court’s conclusion that the ordinary course of business exception under 11 U.S.C. § 547(c)(2)(A) protects some of the transfers which the Trustee is seeking to avoid, the amount of the judgment shall be $37,082.37 rather than the higher amount of $65,655.26 which the Trustee requested. However, the Trustee shall also be granted prejudgment interest at the federal judgment interest rate from the date upon which the Trustee filed the Amended Complaint. Background On February 22, 2009, Philadelphia Newspapers, LLC and its related debtor-entities (the “Debtors”)2 filed for relief under Chapter 11 of the Bankruptcy Code.3 The Debtors owned and operated numerous print and online publications in the Philadelphia area, including Philadelphia’s two major newspapers (i.e., the Philadelphia Inquirer and the Philadelphia Daily News) and Philly.com. Pursuant to the terms of the Debtors’ Fifth Amended Joint Chapter 11 Plan, which the Court approved by Order, dated September 30, 2010, the Trustee is authorized to prosecute this adversary proceeding. See Bankruptcy Case No. 09-11204, Docket Entry No. 2620. The adversary proceeding was commenced on February 18, 2011, by the filing 716of a complaint. Docket Entry No. 4 On February 24, 2011, the Trustee filed the Amended Complaint, Docket Entry No. 3, which the Defendant answer shortly thereafter, Docket Entry No. 15. Pursuant to a Stipulation and Consent Order, the discovery deadline in this proceeding was November 4, 2011, which means that the discovery period was over before the Trustee filed its Motion on December 19, 2011. See Docket Entry Nos. 22 & 86. Since the Debtors filed for bankruptcy on February 22, 2009, the ninety day period prior to the Debtors’ bankruptcy filings began on November 24, 2008. Therefore, the preference period, which is relevant to the Trustee’s claims, is November 24, 2008 to February 22, 2009 (the “Preference Period”). Philadelphia Newspapers, LLC (the “Debtor”) and the Defendant have had a business relationship dating back to at least February of 2003. See Exhibit E, F and G to the Trustee’s Brief and Exhibit B to the Memorandum of Law in Support of Defendant’s Response to Trustee’s Motion (“Defendant’s Brief’). The payment history compiled by the Defendant contains payment information for 93 invoices which the Defendant issued and for which it was paid prior to the preference period (the “Historical Period”). See Exhibit G (chart compiled by Trustee using payment history from Defendant) to Trustee’s Brief and Exhibit B to Defendant’s Brief. During the Historical Period, the Debtor paid the Defendant from 7 to 112 days after the date of the invoice. Id. The following chart (the “Frequency Chart”), which the Court compiled based on the payments made during the Historical Period, shows the amount of times an invoice was paid within the listed amount of days after the date of the invoice: FREQUENCY CHART FOR HISTORICAL PERIOD Days after Frequency of Days after Frequency of Days after Frequency of invoice_times_invoice_times_invoice_times_ 7_1_18_1_20_1_ 22_1_24_2_25_1_ 27_2_28_1_29_1_ 31_2_32_3_33_1_ 34_6_35_4_36_3_ 39_2_41_2_42_4_ 44_1_45_5_47_1_ 48_1_49_5_50_1_ 53_1_54_3_55_3_ 57_1_58_1_60_2_ 61_3_62_7_63_3_ 64_1_67_1_69_2_ 70_3_74_1_76_1_ 77_1_78_1_81_1_ 82_1_86_1_87_1_ 96 _1_112_1_ Of significance to this matter, the Frequency Chart shows the following: (i) a 717total of 21 invoices were paid between 30 to 40 days of the invoice date; and (ii) a total of 20 invoices were paid between 60 to 70 days of the invoice date. The relevance of these facts shall become apparent when the Defendant’s arguments are addressed below. During the Preference Period, the Debt- or made payments which covered the amounts owed on 17 invoices issued by the Defendant. See Exhibit I to the Trustee’s Motion. During this period, the Debtor paid the Defendant between 8 and 78 days from the date of the invoice. Id. The following chart (the “Preference Period Chart”) shows the invoice number, invoice date, payment date, number of days between the invoice date and payment date, and the amount of the invoice. In the first column, the chart lists a number for each payment transaction. The Court will use these numbers to refer to the Preference Period payments in this opinion. PREFERENCE PERIOD CHART INVOICE PAYMENT DAYS AFTER AMOUNT OF No. Invoice No. DATE_DATE_INVOICE_INVOICE 1 20558_10/16/08_12/05/08___50_$ 3,077.50 2 20616_10/24/08_12/22/08_62_$ 3,320,52 3 20615_10/25/08_01/02/08_69_$10,037.10 4 20707_11/05/08_01/08/09_64_$ 2,655.14 5 20753_11/05/08_01/22/09_78_$ 4,980.00 6 20763_11/12/08_01/22/09_71_$ 2,640.50 7 20752_11/11/08_01/12/09_62_$ 1,595.00 8 20827_11/20/08_01/12/09_53_$ 6,120.50 9 20753_11/20/08_01/16/09_57_$ 4,980.00 10 20883 12/02/08_02/02/09_62_$ 2,655.14 11 20896_12/04/08_02/02/09_60_$ 2,935.00 12 20897_12/04/08_02/02/09_60_$ 695.00 13 20988_12/19/08_02/09/11_52_$ 4,405.83 14 21086 01/14/09_01/22/09_8_$58,672.00 15 21082_01/14/09_02/18/09_35_$ 8,310.00 16 21227_02/04/09_02/20/09_16_$ 461.70 17 21254_02/06/09_02/20/09_14_$ 622.88 As mentioned above, the Trustee concedes that six payments made during the Preference Period were “made within the ordinary course of business between the parties, and does not seek summary judgment with respect thereto.” Trustee’s Brief at 21. These six payments are Payment Nos. 1, 8, 9, 11, 12 and 13. See Exhibit I to the Trustee’s Brief & Trustee’s Brief at 21,5 The Trustee’s concession that these six payments were made within the ordinary course of business between the parties is based on the fact that these six payments were made, within the range of JpO to 60 days of the date of the respective invoice. In its brief, the Trustee explains its rationale for using this range: [T]he payment history reflects that historically, the Defendant issued an invoice to the Defendant and demanded payment within 30-days thereof, and 718that the Debtor, on average, made payment to the Defendant approximately 50-days after the issuance of the invoice. Accordingly, the Trustee asserts that payments made approximately 50-days from the issuance of the invoice could be considered to have been made within the ordinary course of business between the parties. In the interest of fairness, the Trustee asserts that a reasonable “range” for purposes of establishing parameters for what payments were made within the ordinary course of business would be payments made between 40 and 60 days after the issuance of the invoice. This range provides a ten day cushion on both sides of the historical average—which is appropriate in this case. Trustee’s Brief at 21. As for the rest of the Preference Period payments (Payment Nos. 2-7, 10, 14-17), the Trustee asserts that they constitute avoidable preferences under 11 U.S.C. § 547(b) because the payments were made outside of the 40 to 60 day range. However, the Trustee concedes that the Defendant provided goods or performed services to or for the Debtor during the Preference Period for which the Defendant was not paid, thereby providing “new value” to the Debtor The Trustee agrees that the “new value” totals $30,294.08.6 After deducting this amount for “new value” from the total amount of the Preference Period payments which the Trustee contends are avoidable preferences, the Trustee asserts that Defendant should be held liable for $65,655.27 under § 547(b). In response to the Trustee’s motion, the Defendant submitted an affidavit by Andy Kavulich who is the Chief Financial Officer of the Defendant.7 According to Kavulich, the “[hjistory between the parties, dating back to 2003, shows that most payments made from the Debtor to Inserts East were made within 30 to 70 days from invoice.” Kavulich’s Affidavit ¶ ¿(a), Exhibit D to Defendant’s Brief. Based on this declaration and the parties’ transactional history, the Defendant argues that Preference Period payments made within 30 to 70 days of invoice are not avoidable by the Trustee pursuant to the ordinary course of business exception in § 547(c)(2)(A). In his affidavit, Kavulich also points out that the “[hjistory between the parties establishes that payments were made on account of multiple invoices” and that “this was common practice between the parties.” Id. at ¶ 4(b). According to Kavulich, this common practice was used with regard to: (i) Payment Nos. 7 and 8 which were made by one lump payment; (ii) Payment Nos. 5, 6 and 14 which were made by one lump payment; (iii) Payment Nos. 10 and 11 which were made by one lump payment; and (iv) Payment Nos. 16 and 17 which were made by one lump payment. Id. Based on the Debtor’s “common practice” of paying multiple invoices by one lump sum, the Defendant argues 719that Payment Nos. 5, 6, 14, 16 and 17 (which were made within 78, 71, 8, 16, and 14 days of invoice, respectively) were made “according to ordinary business terms”8 and, therefore, are not avoidable by the Trustee. Defendant’s Brief at Ip-5. Furthermore, Kavulich explains that Payment No. 14, for $58,672.00, was for “paper” for a “job that Inserts East printed in February of 2009.” Kavulich’s Affidavit 1U(c), Exhibit D to Defendant’s Brief The invoice which Defendant issued for this amount ($58,672.00), namely Invoice # 21086, dated 1/14/2009, states that payment was “Due on receipt.” Exhibit C to Defendant’s Brief. Nevertheless, Kavulich avers that “the terms of this invoice, due to the size of the job, was a prepayment!)]” Kavulich’s Affidavit ¶ Jp(c), Exhibit D to Defendant’s Brief. Importantly, Exhibit F to the Trustee’s Brief consists of all of the invoices for the transactions between the Defendant and the Debtor for the period beginning March 12, 2008 through February 16, 2009. See Exhibit F to Defendant’s Brief. Out of these 37 invoices, the “terms” of all but 5 of the invoices are listed as “Net 30.” Id. The “terms” on 4 of the remaining 5 invoices are listed as “ PREPAY.” Id. These 4 invoices are for the following amounts: $39,736.25; $1,595.00; $2,935.00 and $695.00. Id. Only 1 of the 37 invoices, namely Invoice # 21086, for $58,672.00, which is the invoice pertaining to payment No. 14, has the term listed as “Due on receipt.” Id. The date of Invoice # 21086 is the same as the “ship” date on the invoice, namely, 1/14/2009. The “description” on Invoice #21086 is the following: 50# CTD. # 3 (SOMERSET GLOSS) I-MAG—3/5 EVENT Paper to produce—120,000 copies/48 pg. Broadsheet Id. Significantly, Invoice # 20472, dated and having a “ship” date of 10/3/2008, has the following description: 50# CTD. # 3 (SOMERSET GLOSS) Paper to produce—120,000 copies/64 pg. Broadsheet Id. The descriptions on Invoice #21086 and Invoice #20472 are nearly identical except that the quantity of pages per copy on Invoice # 20472 is substantially higher than the quantity of pages per copy on Invoice #21086 which, also, accounts for the reason that the amount of Invoice #20472 is over $20,000 more than the amount due on Invoice # 21086; yet, the “terms” of Invoice # 20472 are “Net 30.” Id. In contrast, the “terms” of Invoice # 21086, which was issued during the Preference Period, are “Due on receipt.” Further, Invoice # 20472, which was issued during the Historical Period, was paid 20 days after its invoice date, whereas Invoice #21086 was paid within 8 days after its invoice date. Indeed, only 1 invoice that was issued during the Historical Period in an amount over $30,000, was paid in less than 10 days from the date of invoice. The other invoices for over $30,000 were paid in 20, 24, 28, 32, 45, 49, 54, 55 and 78 days from the date of invoice. Discussion I. Standard of Review Federal Rule of Civil Procedure 56(c) provides that summary judgment should be granted if, drawing all inferences in favor of the nonmoving party, “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no 720genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R.Civ.P. 56(c).9 A motion for summary judgment will not be defeated by the mere existence of some disputed facts, but may be defeated when there is a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether a genuine issue of material fact exists, the court’s function is not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 248-49, 106 S.Ct. 2505. See also Shubert v. Mull (In re Frey Mechanical Group, Inc.), 446 B.R. 208, 213 (Bankr.E.D.Pa.2011) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)) (“ ‘Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party,’ there is no genuine issue of fact for trial and summary judgment is appropriate.”) When a non-moving party relies upon an affidavit in opposing summary judgment, the affidavit is not sufficient to defeat summary judgment when it fails to aver “specific facts which are admissible at trial” and relies solely upon “conclusory statements, hearsay statements, or unfounded declarations.” Regan v. Estate Questa Verde, 2006 WL 3613280, at 5 (D.Vi. Nov. 22, 2006). Moreover, averments in an affidavit that are contradicted by documentary evidence are insufficient to create a genuine issue of material fact. Murray v. IBEW Local Union No. 98 Pension Plan, 2011 WL 1883168, at 4 (E.D.Pa. May 17, 2011). In addition, the entry of summary judgment is appropriate if, upon motion and after adequate time for discovery, the party against whom the motion for summary judgment is filed fails to “make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). As the Supreme Court stated in Celotex Corp.: In such a situation, there can be “no genuine issue as to any material fact,” since a complete failure of proof concerning an essential element of the non-moving party’s case necessarily renders all other facts immaterial. The moving party is “entitled to a judgment as a matter of law” because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof. Id. at 322-23, 106 S.Ct. 2548. See also Nathan and Miriam Barnert Memorial Hospital Association v. Onward Healthcare, Inc. (In re Nathan and Miriam Barnert Memorial Hospital Association), 2009 WL 3230789, at 4 (Bankr.D.N.J. Oct. 5, 2009) (applying summary judgment standard to matter involving preferential transfers). II. Preferential Transfers Section 547(b) of the Bankruptcy Code authorizes a trustee in bankruptcy to avoid certain payments made within ninety days before the debtor files for bankruptcy as “preferential transfers.” This section states, in pertinent part: [A] trustee may avoid any transfer of an interest of the debtor in property— 721(1) to or for the benefit of a creditor; (2) for or on account of an antecedent debt owed by the debtor before such transfer was made; (3) made while the debtor was insolvent; (4) made— (A) on or within 90 days before the date of the filing of the petition; (5) that enables such creditor to receive more than such creditor would receive if— (A) the case were a case under chapter 7 of this title; (B) the transfer had not been made; and (C) such creditor received payment of such debt to the extent provided by the provisions of this title. 11 U.S.C. § 547(b). The purpose of this provision is “to ensure that creditors are treated equitably, both by deterring the failing debtor from treating preferentially its most obstreperous or demanding creditors in an effort to stave off a hard ride into bankruptcy, and by discouraging the creditors from racing to dismember the debtor.” Fiber Lite Corporation v. Molded Acoustical Products, Inc. (In re Molded Acoustical Products, Inc.), 18 F.3d 217, 219 (3d Cir.1994). However, there are certain transfers which a Trustee may not avoid despite the fact that they fit within the scope of § 547(b). These exceptions are set forth in § 547(c) & (i). See 11 U.S.C. § 517(b) (“Except as provided in subsections (c) and (i) of this section, the trustee may avoid any transfer of an interest of the debtor in property ...). The Defendant raises two of the exceptions here; they are the ordinary course of business defense in § 547(c)(2) and the contemporaneous exchange for new value defense in § 547(c)(1). The trustee “has the burden of proving the avoidability of a transfer” under § 547(b). 11 U.S.C. § 517(g). However, the party against whom recovery is sought has the burden of proving that a transfer is not avoidable under § 547(b) based on one of the exceptions set forth in § 547(c). Id. In its motion, the Trustee asserts that it is entitled to summary judgment because there is no genuine issue as to any material fact that all of the elements for preferential transfers under § 547(b) are met as to Payment Nos. 2-7, 10 and 14-17. The Defendant does not dispute this assertion except as to Payment No. 14 for $58,672.00. As to this payment, the Defendant contends that the Trustee cannot satisfy its burden of showing that this payment was made on account of an “antecedent debt.” 11 U.S.C. § 547(b)(3). The Defendant also opposes the Trustee’s motion on the ground that Payment Nos. 2, 3, 4, 7, 10 and 15 are unavoidable transfers based on the ordinary course of business defense set forth in § 547(c)(2) because the history between the parties shows that most payments were made within 30 to 70 days from the date of invoice. See Defendant’s Brief at L Eliminating those transfers from the discussion, the Defendant then argues that the ordinary course of business defense applies to the remaining payments at issue, namely Payment Nos. 5, 6, 14, 16 and 17, because the history between the parties shows that it was common practice for the Debtor to make one lump payment on account of multiple invoices which resulted in the “invoice-to-payment range on the final invoice” being “much less.” See Defendant’s Brief at 1-5. The Defendant further argues that Payment No. 14, for $58,672.00, which was “[d]ue on receipt,” is also covered by the ordinary business defense, because “[t]he terms of the invoice, due to 722the size of the job, was a prepayment” and that “[s]uch an arrangement between the parties for a job of this size is [ ] consistent with the ordinary business terms between the parties.” See Defendant’s Brief at 5. Lastly, the Defendant asserts that, even if the Court concludes that Payment No. 14, for $58,672.00, was not made in the ordinary course of business, the transfer cannot be avoided because it falls within the contemporaneous exchange for new value defense under 547(c)(1). See Defendant’s Brief at 5-6. Each of these arguments is addressed below. Whether the Debtor’s payment of $58,672.00 was made for or on account of an antecedent debt? The Bankruptcy Code does not define the term “antecedent debt.” However, it defines “debt” as “liability on a claim.” 11 U.S.C. § 101(12). In Burtch v. Huston (In re USDigital, Inc.), 443 B.R. 22, 36 (Bankr.D.Del.2011), the bankruptcy court observed that a “debt is antecedent if it was incurred prior to the allegedly preferential transfer.” Similarly, the bankruptcy court in Maxwell v. Penn Media (In re marchFirst, Inc.), 2010 WL 4027723, at 7 (Bankr.N.D.III. Oct. 14, 2010), opined that “a debt is incurred when the debtor becomes legally obligated to pay.” Invoice # 21086 lists the “terms” of the invoice as “Due on receipt.” According to the invoice and to Kavulieh’s Affidavit, the invoice was for “paper” which the Defendant used to print a job in February of 2009. See Exhibit F to Trustee’s Brief & Kavulich Affidavit %I(c). Based on the terms of Invoice # 21086, the Debtor was obligated to make payment for the paper upon its receipt of the invoice. While Kavulich avers that the “terms of this invoice, due to the size of the job, was a prepayment,” see Kavulich Affidavit 1U(c), the terms set forth on Invoice # 21086, which is Defendant’s own document, directly refute this characterization. The invoice states that payment was “Due on receipt”; it does not state that it was a “prepayment.” Moreover, there are 4 invoices in Exhibit F to the Trustee’s Motion, namely Invoices #20642, #20752, #20896 and #20897, which list the terms thereon, in capital letters, as “PREPAY.” In other words, the Defendant did issue invoices which required prepayments and when it did so, the terms on the invoices were stated, in capital letters, as “PREPAY.” These 4 invoices, with the terms “PREPAY,” stand in stark contrast to the terms on Invoice #21086 which are “Due on receipt.” Moreover, the amounts due on the aforementioned four invoices were $39,736.25, $1,595.00, $2,935.00 and $695.00. Three out of four of these amounts are for less than $3,000, which is inconsistent with Kavulich’s averment that the Defendant required prepayment on Invoice # 21086 due to the “size of the job.” Defendant’s Brief at 5. Furthermore, the terms of a job of a similar size,10 which is listed on Invoice #20472, were “Net 30” and not “[D]ue on receipt” which further refutes the Defendant’s contention that a “prepayment” arrangement for a job of “this size” was consistent with the ordinary business terms of the parties.” Id. Thus, the conclusory statements which Kavulich made in his affidavit in an effort to defeat the Trustee’s Motion are irreconcilable with the parties’ transactional history and the Defendants’ invoices. Since the statements in the affidavit have no founda723tion in fact, no reasonable trier of fact could conclude, based on the statements, that the Debtor’s payment of $58,672.00, as billed on Invoice # 21086, was a “prepayment” rather than a payment on account of an antecedent debt. 11 U.S.C. § 547(b)(2). Whether the ordinary course of business defense applies to Payment Nos. 2-7, 10 and 14-17? As noted above, one exception to the Trustee’s authority to avoid a transfer under § 547(b) is set forth in § 547(c)(2).11 This exception, which is commonly referred to as the ordinary course of business exception, is meant to “induce creditors to continue dealing with a distressed debtor so as to kindle its chances of survival without a costly detour through, or a humbling ending in, the sticky web of bankruptcy.” In re Molded Acoustical Products, Inc., 18 F.3d at 219. Whether a transfer was made in the ordinary course of business is a subjective inquiry “calling for the Court to consider whether the transfer was ordinary between the debtor and the creditor.” United States Trustee v. First Jersey Securities, Inc. (In re First Jersey Securities, Inc.), 180 F.3d 504, 512 (3d Cir.1999). An important indicator to determine ordinary course of business is whether the timing of preference period payments was consistent with the timing of payments during the pre-preference period.12 Cunningham v. T & R Demolition, Inc. (In re ML & Associates, Inc.), 301 B.R. 195, 204 724(Bankr.N.D.Texas 2003). When there is a difference between pre-preference and preference period payment times, determining whether that difference is substantial enough to be considered outside of the ordinary course of business is a very fact-specific inquiry. J.P. Fyfe, Inc. of Florida v. Bradco Supply Corp., 891 F.2d 66, 70 (3d Cir.1989) (reasoning that “[w]hether or not a debtor made a particular payment in the ordinary course of business is a factual determination!)]”). In the instant proceeding, the Trustee conceded that payments made within 40 to 60 days from the date of invoice were made within the ordinary course of business and, therefore, not avoidable under § 547(b). The Defendant contends that the 40 to 60 day payment range is too narrow and that payments made by the Debtor within 30 to 70 days from the date of the invoice are within the ordinary course of business of the parties. The Court agrees with the Defendant on this issue. During the Historical Period, only 31 out of 93 payments, which is only 33% or 1/3 of the payments, were made in the 40 to 60 day range used by the Trustee. In contrast, 74 out of 93 of the payments which is equivalent to 80% of the payments, were made in the 30 to 70 day range. As the Court noted above, 21 invoices were paid between 30 to 40 days after the invoice date and 20 invoices were paid between 60 to 70 days after the invoice date. The 40 to 60 range used by the Trustee would mean that the 41 payments, made during the Historical Period, were made outside of the ordinary course of business of the parties.13 The Court simply does not agree with that proposition. The Debtor’s payment history during the Historical Period supports the Defendant’s position that a range of 30 to 70 days from the date of invoice is more appropriately used for application of the ordinary course of business defense. See Rifken v. Entec Distribution, LLC (In re Felt Manufacturing Co., Inc.), 2009 WL 3348300, at 7 (Bankr. D.N.H. Oct. 16, 2009) (rejecting payment range which was too narrow for broader payment range). Using the 30 to 70 day payment range, the Court concludes that the Defendant has satisfied its burden of showing that Payment Nos. 2, 3, 4, 7, 10 and 15 are transfers within the ordinary course of business exception contained in § 547(c)(2)(A).14 Therefore, only the following five Preference Period payments are still at issue: Payment No. 5: $4,980.00 payment made 78 days after invoice Payment No. 6: $2,640.50 payment made 71 days after invoice Payment No. 14: $58,672.00 payment made 8 days after invoice Payment No. 16: $461.60 payment made 16 days after invoice Payment No. 17: $622.88 payment made 14 days after invoice The Defendant asserts that these five remaining payments, totaling $62,834.98, are 725within the ordinary course of business exception because the history between the parties shows that it was common practice for the Debtor to make one lump payment on account of multiple invoices. The Court is unpersuaded by this argument. Accepting the fact that it was common practice for the Debtor to make lump payments on account of multiple invoices, the Debtor still made its payments on 80% of the Defendant’s invoices during the Historical Period within 30 to 70 days from the date of invoice. Therefore, regardless of whether the Debtor paid an invoice during the Preference Period by a lump sum which also paid other invoices or by an individual payment on a single invoice, the invoice to payment range of 30 to 70 days still applies. Since the Court has already determined that Payment Nos. 5, 6, 14, 16 and 17 were made outside of the 30 to 70 day range, the Defendant has failed to establish, by its lump payment argument, that its payments on these invoices were made in the ordinary course of business or financial affairs of the Debtor. Moreover, with regard to Payment No. 14, for $58,672.00, which was made within 8 days of invoice, the Defendant’s argument regarding the lump sum payments is even more untenable. The two other payments (Payment Nos. 9 and 6), which were made by the same lump sum as Payment No. 14, were: (i) for much lower amounts, namely $4,980.00 and $2,640.50, than Payment No. 15; and (ii) made within 57 and 71 days of invoice as compared to 8 days of invoice. In contrast, all of the other payments which the Defendant identified its brief as having been paid during the Preference Period by lump sums were paid within the same general time frames from the date of the invoice and on consecutively issued invoices. Payment Nos. 7 and 8 were made within 62 and 53 days of invoice; Payment Nos. 10 and 11 were made within 62 and 60 days of invoice; and Payment Nos. 16 and 17 were made within 16 and 14 days of invoice. These facts, based on the Defendant’s own documents, undercut its argument that Payment No. 14 just happened to occur within 8 days of invoice because it was the Debtor’s “common practice” to pay multiple invoices with a lump sum. Defendant’s last argument with regard to the ordinary course of business defense is that the terms of Invoice # 21086 and the Debtor’s payment on the invoice were “consistent with the ordinary business terms between the parties.” Defendant’s Brief at 5. The Defendant bases this argument on Kavulich’s representation that the terms of Invoice # 21086 “was a prepayment! ]” and that such an arrangement was “consistent with the ordinary business terms between the parties” for a “job of this size.” Id. The Court has already concluded that this representation is directly contradicted by the Defendant’s own documents and the parties’ transactional history. The terms stated on Invoice # 21086 are “Due on receipt” and not “PREPAY.” Moreover, it is the only invoice out of thirty-seven invoices in the record with the terms “Due on receipt.” The Defendant has not asserted that it ever sent another invoice to the Debtor stating that it was “due on receipt.” Furthermore, the terms listed on Invoice # 20472, which is for more money ($20,000 more) and a larger quantity of paper than that of Invoice #21086, are “Net 30.” Thus, no reasonable trier of fact could conclude that the terms of Invoice # 21086 and the Debtor’s payment on the invoice were “consistent with the ordinary business terms between the parties.” Whether the Debtor’s payment of $58,672.00 fits within the contemporaneous exchange for new value defense of § 547(c)(1)? The Defendant’s final argument in opposition to the Trustee’s Motion is that 726the Trustee “cannot satisfy its burden” that Debtor’s payment of $58,672.00 on Invoice # 21086 “was not intended by the [Djebtor and Defendant to be a contemporaneous exchange for new value given to the [D]ebtor under 11 U.S.C. § 547(c)(1)(A).” Defendant’s Brief at 5-6. Importantly, the Defendant’s argument is based on the erroneous proposition that it is the Trustee’s burden to establish that the contemporaneous exchange for new value exception under § 547(c)(1)(A) is inapplicable. To the contrary, as a matter of law, the Defendant bears the burden of proving that the exception is applicable. See Lichtenstein v. Aspect Computer (In re Computer Personalities Systems, Inc.), 320 B.R. 812, 817 (E.D.Pa.2005) (explaining that the Trustee has the initial burden of proving that a transfer is preferential, but that once this burden is met, the burden shifts to the creditor to prove the nonavoidability of the transfer); see also § 517(g). Thus, it is the Defendant’s burden, in opposing the Trustee’s Motion, to establish that a genuine issue of material fact exists regarding whether the contemporaneous exchange exception in § 547(c)(1) is applicable to the Debtor’s payment of $58,672.00. See Shubert v. Mull (In re Frey Mechanical Group, Inc.), 446 B.R. at 214. In order for the contemporaneous exchange exception to be applicable,15 the Defendant must show that: (i) it extended new value to the Debtor; (ii) the parties intended the new value and the Debtor’s payment to be contemporaneous exchanges; and (iii) the exchanges were, in fact, substantially contemporaneous. Lichtenstein, 320 B.R. at 817. Insofar as the first and third requirements of the contemporaneous exchange exception, the Court notes that Invoice # 21086 bills the Debtor for paper to produce 120,000 copies of 48 pages each, that the terms of the invoice are “Due on receipt,” and that the Debtor paid the invoice within 8 days of the date of the invoice. This evidence could potentially be construed to establish that there are genuine issues of material fact as to whether the Defendant extended new value to the Debtor and whether the exchange of new value for the Debtor’s payment was, in fact, substantially contemporaneous. However, it is unnecessary for the Court to reach a conclusion in this regard because there is no evidence in the record to support the second requirement of the test. In Creditors’ Committee v. Spada (In re Spada), 903 F.2d 971 (3rd Cir.1990), the Third Circuit observed that “‘[t]he critical inquiry in determining whether there has been a contemporaneous exchange for new value is whether the parties intended such an exchange.’” Id. at 975 (quoting Matter of Prescott, 805 F.2d 719, 727 (7th Cir.1986)). The Defendant has offered no evidence which supports this requirement of the test. In paragraph 4(c) of his Affidavit, -Kavulieh swears and affirms as follows: Upon further review of the circumstances surrounding the payment of $58,672.00 made on invoice 21086,1 have confirmed that the payment was for paper for a job that Inserts East had printed in February 2009. The invoice 727was to be paid upon receipt, and Inserts received the wire transfer eight days later. The terms of this invoice, due to the size of the job, was a prepayment and was not a payment made on account of antecedent debt or that it was not intended by the debtor and Defendant to be a contemporaneous exchange for new value given to the debtor under 11 U.S.C. § 547(c)(1)(A). Kavulich’s Affidavit attached to Defendant’s Brief (emphasis added). The last sentence in this paragraph is quite confusing. As written, it states: “The terms of the invoice, due to the size of the job, was a prepayment and was not a payment made on account of an antecedent debt or that it was not intended by the debtor and Defendant to be a contemporaneous exchange for new value given to the debtor under 11 U.S.C. § 547(c)(1)(A).” Id. (emphasis added). However, perhaps Kavulich meant to say that the terms of the invoice required a prepayment or that the Debtor and the Defendant intended for the Debtor’s payment on the invoice to be a contemporaneous exchange for new value. Nevertheless, even if this is what Kavulich meant to say, his statement is internally inconsistent. Either the Defendant intended for Debtor’s payment on the invoice to be a prepayment OR the Defendant intended the payment to be a contemporaneous exchange for new value, namely the paper for the printing job which Kavulich says the Defendant did in February of 2009. The conclusory contention that Defendant had one or, in the alternative, the other intention is absurd and disingenuous because the intentions are mutually exclusive. If the Defendant intended the Debtor’s payment on the invoice to be a prepayment, then it could not have intended for the payment to be a contemporaneous exchange for new value. Throwing both possibilities into the ring in order to try to defeat the Trustee’s Motion simply does not work. Since Kavulich offers two conflicting views in the very same sentence as to the Defendant’s intention with regard to Invoice #21086 and there is no evidence in the record as to the Debtor’s intent with regard to its payment, the Defendant has failed to “make a showing sufficient to establish the existence of an element essential to” its case, and on which it “will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. at 322, 106 S.Ct. 2548. See Riley v. National Lumber Company (In re Reale), 393 B.R. 821, 828 (1st Cir. BAP 2008) (emphasis in original) (rejecting creditor’s argument that contemporaneous exchange for new value defense applied since there was “no evidence” that the Debtor and the Defendant “intended the purported exchange to be contemporaneous for new value, an essential element of the defense.”). Therefore, the Trustee may avoid the $58,672.00 payment which the Debtor made during the Preference Period. III. Recovery of the Property Avoided Under § 550 Pursuant to 11 U.S.C. § 550(a), the Trustee is authorized to recover from the Defendant the value of the payments avoided under § 547(b). Deducting the total value of the payments, namely Payment Nos. 2-4, 7, 10 and 15 ($28,572.90), which the Court concluded are not avoidable due to the ordinary course of business defense set forth in § 547(c)(2)(A), from the total amount sought by the Trustee ($65,655.27), the Court concludes that the Trustee is entitled to recover $37,082.37 from the Defendant under § 550(a). The Trustee also seeks an award of prejudgment interest at the applicable federal rate of interest from the date its counsel filed the Amended Complaint. See Trustee’s Brief at 32. As the Defendant failed to offer any argument in opposition to this request, the Court shall grant it. Invest728ment Co. v. Universal Forest Products, Inc. (In re Hechinger Investment Co.), 489 F.3d 568, 579-580 (3d Cir.2007) (holding that prejudgment interest should be awarded under § 550(a) unless there is a “sound reason” for denying it).16 IY. Temporary Disallowance of Claims Under § 502(d) & (j) Pursuant to § 502(d) & (j),17 the Trustee seeks to have any and all claims of the Defendant disallowed until such time as it pays the Trustee an amount equal to the aggregate amount due for the avoided transfers, which the Court has concluded is $37,082.37 plus interest. See Amended Complaint, Count V. The Defendant has two claims in the Debtors’ bankruptcy case. It filed a proof of claim for an unsecured debt in the amount of $22,357.73 for “goods sold” prepetition. See Proof of Claim #5, dated 3/17/12, of Inserts East, Inc. It also has an allowed administrative claim in the amount of $6,000.00. See Amended Order, dated 1/22/10, at Docket Entry No. 1965. The Trustee’s request to have these claims disallowed until the Defendant pays $37,082.37 plus interest to the Trustee shall be granted. Conclusion The Court has concluded that, while Payment Nos. 2-4, 7, 10 and 15 are unavoidable pursuant to the ordinary course of business exception under § 547(c)(2)(A),18 the Trustee is entitled to avoid Payment Nos. 5, 6, 14, 16 and 17 as preferential transfers under § 547(b). Therefore, the Trustee is entitled to summary judgment in its favor with respect to Counts I, IV and V of the Amended Complaint. The Trustee shall be awarded a judgment in the amount of $37,082.37, plus prejudgment interest at the applicable federal rate from the date upon which the Trustee filed the Amended Complaint. Postjudgment interest shall also accrue at the applicable federal rate. The Trustee’s request for costs shall be denied. Lastly, Counts II and IV of the Amended Complaint shall be dismissed with prejudice based upon the representation made in open court that the Trustee does not intend to pursue relief under these counts of the Amended Complaint. ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AND NOW, this 22nd day of March, 2012, upon consideration of the Trustee’s 729Motion for Partial Summary Judgment Pursuant to Federal Rule of Bankruptcy Procedure 7056 (the “Motion”), the Defendant’s response thereto, and after a hearing with notice, it is hereby ORDERED and DECREED that: 1. The Motion is GRANTED IN PART; 2. Judgment is GRANTED in favor of the Trustee and against the Defendant in the amount of $37,082.37, plus prejudgment interest at the applicable federal rate as set forth in 28 U.S.C. § 1961 from 2/24/2011 (the date upon which the Trustee filed the Amended Complaint) until the date hereof and post-judgment interest pursuant to 28 U.S.C. § 1961; 3. The Trustee’s request for costs is DENIED; and 4. Counts II and IV of the Amended Complaint are DISMISSED with prejudice. . The Trustee's counsel advised the Court at the hearing on the Motion that the Trustee will not be proceeding on Counts II and III of the Amended Complaint. Transcript, dated 1/19/12, at 5. Accordingly, these counts shall be dismissed from this adversary proceeding with prejudice. . The Debtors consist of PMH Acquisition, LLC; Broad Street Video, LLC; Philadelphia Newspapers, LLC, Philadelphia Direct, LLC; Philly Online, LLC; Broad Street Publishing, LLC; Philadelphia Media, LLC; and Philadelphia Media Holdings, LLC ("PMH”). On February 24, 2009, the Debtors’ bankruptcy cases were consolidated for procedural purposes and thereafter jointly administered. See Bankruptcy Case No. 11204, Docket Entry No. 42 (Order Directing Joint Administration of the Debtors’ Related Chapter 11 Cases). . The exception to this statement is that PMH, which is the parent company of all of the rest of the Debtors, commenced its bankruptcy case on June 10, 2009. According to the Trustee, none of the transfers at issue in this adversary proceeding "related to PMH.” Trustee’s Memorandum of Law in Support of the Motion ("Trustee's Brief”) at 2 n.l. . Unless a docket entry number is preceded by reference to the Debtors' main bankruptcy case, the docket entry number refers to the docket relating to this adversary proceeding. . As noted on Exhibit I to the Trustee’s Brief, the table listed thereon contains one payment by the Debtor that was not included in the payment history provided by the Defendant. This payment is No. 9 on the Preference Period Chart. . Both parties agree that the Trustee acknowledged 100% of the Defendant's asserted new value defense. See Trustee’s Brief at 6; Defendant’s Brief at 2. Consequently, the new value defense contained in § 547(c)(4) is not at issue. . One of the interrogatories which the Trustee served upon the Defendant asked it to "identify any and all persons having knowledge of the facts relevant or material to the allegations of the Complaint and/or Answer and affirmative defenses!)]” See Interrogatory No. 1 in Plaintiff’s First Combined Set of Requests for Production of Documents, Interrogatories, and Requests for Admissions to the Defendant, Exhibit C to Trustee's Brief. In response to this request, the Defendant identified Andrew Kavulich as the person who "is knowledgeable as to invoices and payments!)]” See Defendant, Inserts East, Incorporated’s Objections and Answers to Plaintiff’s First Interrogatories, Exhibit D to Trustee's Brief. . The phrase "ordinary business terms” is used in § 547(c)(2)(B). The Court discusses the Defendant’s use of this term in footnote 11. . Rule 56 of the Federal Rules of Civil Procedure is applicable hereto pursuant to Rule 7056 of the Federal Rules of Bankruptcy Procedure. . As the Court noted in the "Background” section above, the quantity of paper listed on Invoice #20472, dated 10/3/08, is significantly higher than the quantity of paper listed on Invoice #21086 (120,000 copies of 64 pages compared to 120,000 copies of 48 pages) and the amount due on Invoice # 20472 is also more than $20,000 higher than the amount listed on Invoice #21086. . Section 547(c)(2) provides: (c) The trustee may not avoid under this section a transfer— (2) to the extent that such transfer was in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee, and such transfer was— (A) made in the ordinary course of business or financial affairs of the debtor and the transferee; or (B) made according to ordinary business terms. 11 U.S.C. § 547(c)(2). With regard to prong (B), the phrase "ordinary business terms” means "the range of terms that encompasses the practices in which firms similar in some general way to the creditor in question engage[.]” Fiber Lite Corporation v. Molded Acoustical Products, Inc. (In re Molded Acoustical Products, Inc.), 18 F.3d 217, 224 (3d Cir.1994) (emphasis in original) (quoting In re Tolona Pizza Prods. Corp., 3 F.3d 1029, 1033 (7th Cir.1993)). In its brief, the Defendant uses the phrase "ordinary business terms” in conjunction with its argument regarding invoices paid in lump sum payments. See Defendant's Brief at 5 (argument regarding it being the Debtor's common practice to pay multiple invoices with one lump sum). However, the Defendant failed to submit any evidence whatsoever that the payments at issue were made according to "ordinary business terms.” Therefore, any argument based on § 547(c)(2)(B) obviously lacks merit. Accordingly, the Court will give the Defendant the benefit of the doubt and assume that Defendants’ arguments are based upon § 547(c)(2)(A). . Other factors that are relevant in determining the ordinary course of business between parties for purposes of § 547(c)(2) include the following: (1) the length of time the parties have engaged in the type of dealing at issue; (2) whether the subject transfer was in an amount more than usually paid; (3) whether the payments were tendered in a manner different from previous payments; (4) whether there appears any unusual action by either the debtor or creditor to collect or pay on the debt; (5) whether the creditor did anything to gain an advantage (such as gain additional security) in light of the debtor's deteriorating financial condition. Official Committee of Unsecured Creditors v. Nucor-Yamato Steel Company (In re J. Allan Steel Co.), 336 B.R. 226, 229 (W.D.Pa.2005) (citing Troisio v. E.B. Eddy Forest Products, Ltd. (In re Global Tissue, L.L.C.), 302 B.R. 808, 812 (D.Del.2003), aff'd, 106 Fed.Appx. 99 (3d Cir.2004)). In the instant adversary proceeding, the parties' dispute of whether the preference payments were made within the ordinary course of business hinges on the timing of the payments. . Among the invoice and payments outside of the Trustee’s 40 to 60 day payment range are the following: (i) six payments that were made within 34 days of invoice; (ii) four payments that were made within 35 days of invoice; (iii) three payments that were made within 61 days of invoice; (iv) seven payments that were made within 62 days of invoice; (v) three payments that were made within 63 days of invoice; and (vi) three payments that were made within 70 days of invoice. Using the Trustee's 40 to 60 day range, none of these transfers from the Historical Period would be within the parties' ordinary course of business. . The total amount of Payment Nos. 2-4, 7, 10 and 15 is $28,572.90. . The contemporaneous exchange for new value exception under § 547(c)(1) states: (c) The trustee may not avoid under this section a transfer— (1) to the extent that such transfer was— (A) intended by the debtor and the creditor to or for whose benefit such transfer was made to be a contemporaneous exchange for new value given to the debtor; and (B) in fact a substantially contemporaneous exchanged] 11 U.S.C. § 547(c)(1)(A). . The Trustee also requests an award of costs as part of its relief. Bankruptcy Rule 7054 provides, in pertinent part, that a "court may allow costs to the prevailing party....” Fed. R. Bankr.P. 7054. Based on the language of this rule, the Court may exercise its discretion in awarding costs. Springel v. Prosser (In re Innovative Communication Corporation), 2011 WL 3439291, at *48 (Bankr.D.V.I. Aug. 5, 2011). The Court shall utilize its discretion and deny an award of costs. The Trustee can recover its costs from estate proceeds. Id. (denying award of costs on grounds that trustee "can recoup his costs from estate proceeds.”). . Section 502(d) & (j) provide, in pertinent part: (d) ... [T]he court shall disallow any claim of any entity from which property is recoverable under section 542, 543, 550, or 553 of this title or that is a transferee of a transfer avoidable under section 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of this title, unless such entity or transferee has paid the amount, or turned over any such property, for which such entity or transferee is liable under section 522(i), 542, 543, 550, or 553 of this title. (j) A claim that has been allowed or disallowed may be reconsidered for cause. A reconsidered claim may be allowed or disallowed according to the equities of the case. 11 U.S.C. § 502(d) & (¡). . As discussed above, the Trustee concedes that Payment Nos. 1, 8-9 and 11-13 are unavoidable under § 547(c)(2)(A).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494678/	MEMORANDUM OPINION ROBERT G. MAYER, Bankruptcy Judge. THIS CASE is before the court on the debtor’s objection to Proof of Claim 4 filed by Wells Fargo Financial National Bank. Wells Fargo asserts that its claim is a 804secured claim. The debtor objected to the classification of the claim as a secured claim, but not as to the amount of the claim. Facts The debt arose from a contract between the debtor and Window World for the installation of siding and windows for her home which was financed by Wells Fargo.1 The siding cost $12,638 and the windows, $1,357. In order to finance the purchase, the debtor opened a new credit card account with Wells Fargo. There are two documents involved. One is the purchase order with Window World. It provides: SECURITY INTEREST. Where applicable, you give us a purchase-money security interest in goods, described in this charge slip. We will not claim a security interest or other lien (except judgement liens) in your principal dwelling. You agree that any property described in this charge slip will remain personal property and will not become a fixture even if attached to real property. The other document is the Credit Card Account Application. It also contains a term relating to security interests which states: To the extent permitted by applicable law, you hereby grant to us and we are retaining a purchase money security interest under the Uniform Commercial Code in the merchandise purchased on your account using your regular or special HOME PROJECTS subaccounts until such merchandise is paid for in full. You agree to assist us in executing any documents necessary to perfect our security interest. Discussion Wells Fargo asserts a lien under the Uniform Commercial Code with respect to the items. The parties focused on whether the siding and windows were fixtures and cited several cases that are instructive under Virginia law as to what constitutes a fixture.2 Wells Fargo relies heavily on those aspects of the cases that hold that the parties’ intention controls and the provision in the purchase order that the siding and windows will “remain person property and will not become a fixture even if attached to real property”. It argues that this is a clear manifestation that the siding and windows were to remain personal property and that a UCC lien attached to them. There are two threshold questions to resolve before the intent of the parties is considered. The first threshold is whether a lien arose under the terms of the agreement. The purchase order expressly stated that a lien would not arise in “your principal dwelling”. The credit card application requested the debtor’s home address. It is the same address given in the purchase order as the address at which the siding and windows were to 805be installed. The address is also the debt- or’s address on the petition in this case. The court finds that the siding and windows were installed on the debtor’s principal dwelling. The security interest provision in the purchase order is inconsistent with the security interest provision in the credit card application. The documents are part of the same transaction and were apparently sent to Wells Fargo. They must be read together. The purchase order controls because its security interest provision is specific in excluding any materials installed on the debtor’s principal residence from the scope of the security agreement while the application is general. The court concludes that the terms of the agreement with Wells Fargo exclude the creation of a lien on the debtor’s principal residence. Even if the application were to control, the second threshold must be met, that is, whether a lien may arise under the Uniform Commercial Code as to the siding and windows. The applicable provision of the Code of Virginia (1950) is § 8.9A-334(a). It states: A security interest under this title may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this title in ordinary building materials incorporated into an improvement on land. The question is whether the siding and windows are “ordinary building materials”. It is not contested that they were incorporated into the house. Official Comment 3 to § 8.9A-334(a) addresses this matter. It states: Certain goods that are the subject of personal-property (chattel) financing become so affixed or otherwise so related to real property that they become part of the real property. These goods are called “fixtures.” ... Some fixtures retain their personal-property nature: A security interest under this article may be created in fixtures and may continue in goods that become fixtures. See subsection (a). However, if the goods are ordinary building materials incorporated into an improvement on land, no security interest in them exists. Rather, the priority of claims to the building materials are determined by the law governing claims to real property.... Thus, this section recognizes three categories of goods: (1) Those that retain their chattel character entirely and are not part of the real property; (2) ordinary building materials that have become an integral part of the real property and cannot retain their chattel character for purposes of finance; and (3) an intermediate class that has become real property for certain purposes, but as to which chattel financing may be preserved. The items in this case, siding and windows, are ordinary building materials that have become part of the real property and do not retain their chattel character. Ordinary building materials are the materials from which houses are built. They include, for example, wooden and metal studs, rafters and joists, pipes and duct work, and nails and screws. Some building materials are pre-assembled at a factory such as framed doors, windows, stairs, and roof trusses. Whether the items are assembled onsite at the home under construction or offsite at a factory, they constitute building materials. The building materials may be subject to a lien as personal property before they are incorporated into the structure, but they lose their character as separate chattels once they are incorporated into the structure. In this case, the siding and windows were incorporated into the debtor’s home. They became a part of the real estate and lost their separate identity. *806They are not subject to Article 8.9A of the Code of Virginia, Secured Transactions. This does not mean that a creditor cannot obtain a lien. A material supplier is entitled to claim a mechanic’s lien against the real property subject to the restrictions contained in the Virginia Mechanic’s Lien law. See Va.Code (1950) § 43-1 et seq. Alternatively, the homeowner may grant the supplier a deed of trust on the real property. What is not possible is to obtain a lien under Title 8.9 of the Code of Virginia in ordinary building materials that have been incorporated into the building. Conclusion The objection will be sustained. The proof of claim will be allowed in the full amount claimed as an unsecured claim. . The transaction was a single integrated transaction evidenced by two documents, a credit card application and a purchase order. Window World sold and installed the materials. Wells Fargo financed the transaction. The credit card application is titled "Window World Visa Credit Card Account Application”. However, both documents refer to Wells Fargo Financial National Bank, the purchase order with the notation at the bottom of "Original'—Wells Fargo Financial National Bank” and the credit card application with the option of mailing the application to "Wells Fargo National Bank, c/o Central Processing” in Des Moines, Iowa. . See Taco Bell of Am., Inc. v. Commonwealth Transp. Comm’r of Va., 282 Va. 127, 710 S.E.2d 478 (2011); Danville Holding Corp. v. Clement, 178 Va. 223, 16 S.E.2d 345 (1941); In re Dalebout, 454 B.R. 158 (Bankr.D.Kan. 2011); In re Adkins, 444 B.R. 374 (Bankr.N.D.Ohio 2011); In re Williams, 381 B.R. 742 (Bankr.W.D.Ark.2008); In re Alterman, 127 B.R. 356 (Bankr.E.D.Va.1991); In re Shelton, 35 B.R. 505 (Bankr.E.D.Va.1983).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494679/	Memorandum of opinion AND ORDER PAT E. MORGENSTERN-CLARREN, Chief Judge. The Senior Noteholders1 move to have $950,000.00 of their fees and expenses allowed as an administrative expense under 11 U.S.C. § 503(b) based on their having made a substantial contribution in these chapter 11 cases.2 The debtors support the motion,3 while the Federal Deposit Insurance Corporation, as Receiver of Am-Trust Bank (FDIC), and the United States trustee (UST) object.4 For the reasons stated below, despite the outstanding cooperation shown by the Senior Noteholders 830throughout these cases, their motion must be denied. I. JURISDICTION Jurisdiction exists under 28 U.S.C. § 1334 and General Order No. 84 entered by the United States District Court for the Northern District of Ohio. This is a core proceeding under 28 U.S.C. § 157(b)(2)(B) and (0), and it is within the court’s constitutional authority as analyzed by the United States Supreme Court in Stern v. Marshall, — U.S. -, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). II. THE MOTION The Senior Noteholders move under Bankruptcy Code § 503(b)(3) and (4) for the allowance of $950,000.00 as reasonable compensation which they paid or will pay for services rendered by their counsel and for amounts paid or to be paid by collateral agent Bank of New York Mellon to its counsel. They state that they incurred charges greater than $1,154,460.62, of which $1,015,353.62 was incurred in making a substantial contribution to these cases. They limit their application, though, to the $950,000.00 provided for in the confirmed plan. A. The Facts 5 The debtors filed their chapter 11 cases6 at the point in time when they concluded that the Office of Thrift Supervision (OTS) would likely seize control of AmTrust Bank—the debtor AFC’s federal savings bank subsidiary. At filing, the debtor AFC had approximately $100 million of principal debt attributable to the Senior Notes, with those creditors representing a very substantial portion 7 of the debt in the case. On the day the debtors filed the cases, they also filed an adversary proceeding against the Senior Noteholders seeking to avoid about $12 million in payments, guarantees, and liens as preferential transfers and constructively fraudulent transfers.8 The debtors dismissed the adversary proceeding one month later, and eventually compromised the issues with the Senior Noteholders. Early on in the cases, the OTS took control of the bank subsidiary and appointed the FDIC as receiver. The FDIC has two major disputes with the debtors. First, it initially contended that it had a $2 billion plus claim, all or substantially all of which was entitled to priority under the Bankruptcy Code based on AFC’s alleged commitment to maintain the capital of the bank subsidiary. The parties filed several contested matters related to that issue (Capital litigation). The District Court tried the matter on withdrawal of the reference, entering judgment in favor of the debtors. The case is on appeal. The second major dispute stems from a 2009 tax refund of about $194 million; the FDIC claims the refund is its property, 831while the debtors claim that it is their property. The FDIC filed a complaint for a declaratory judgment on that issue, the District Court withdrew the reference, and the matter is pending (Refund litigation). The debtors’ plan, confirmed consensually on November 4, 2011 with the FDIC litigation unresolved, necessarily poses a question as to the debtors’ ability to make the contemplated distributions. If the FDIC prevails in the Capital litigation, its priority claim exceeds the projected value of the debtors’ assets. The debtors cannot, therefore, make any distribution to unsecured creditors until the Capital litigation is resolved. From the first hearings in this case forward, the Senior Noteholders took the position that it made economic sense to reach agreement on their disputes, in lieu of heated litigation. This approach was successful. The confirmed plan incorporates the settlement terms, including these: (1) each holder of a Senior Note Claim is treated as the holder of a single unsecured claim in the aggregate amount of $100,763,414.93 against the substantively consolidated debtors; (2) any lien, guarantee, mortgage, or security interest which was granted under the Senior Notes Agreement is disregarded; and (3) a settlement amount of $2 million will not be distributed to the holders of Senior Note claims, but will instead be distributed to holders of other unsecured claims (other than Subordinated Note Claims) on a pro rata basis. This $2 million redistribution resolved the debtors’ claim to recover the approximately $12 million paid by the debtors to the holders of the Senior Note Claims in September 2009, and the debtors believed it reasonably approximated the net benefit which the adversary proceeding would have yielded had it been successfully prosecuted. Additionally, the debtors agreed not to object to the Senior Noteholders’ claim for substantial contribution up to a total of $950,000.00. B. 11 U.S.C. § 503(b)(3) and (4) Bankruptcy Code § 503(b)(3) and (4) provide in relevant part: (b) After notice and a hearing, there shall be allowed administrative expenses ... including— (3) the actual, necessary expenses, other than compensation and reimbursement specified in paragraph (4) of this subsection, incurred by— (D) a creditor ... in making a substantial contribution in a case under chapter 9 or 11 of this title ... (4) reasonable compensation for professional services rendered by an attorney or an accountant of an entity whose expense is allowable under subparagraph (A), (B), (C), (D), or (E) of paragraph (3) of this subsection, based on the time, the nature, the extent, and the value of such services, and the cost of comparable services other than in a case under this title, and reimbursement for actual, necessary expenses incurred by such attorney or accountant!.] 11 U.S.C. § 503(b)(3)(D) and (4).9 These provisions are an accommodation between the two objectives of encouraging meaningful creditor participation in the reorganization process and keeping administrative expenses and fees at a minimum to maximize the estate for creditors. Lebron v. Mechem Fin. Inc., 27 F.3d 937, 944 (3d Cir.1994); Pacificorp Ky. Energy Corp. v. Big Rivers Elec. Corp. (In re Big Rivers Elec. Corp.), 233 B.R. 739, 746 (W.D.Ky. 8321998). “Accordingly, ‘the integrity of section 503(b) can only be maintained by strictly limiting compensation to extraordinary creditor actions which lead directly to tangible benefits to the creditors, debtors, or estate.’” In re Bayou Grp., LLC, 431 B.R. 549, 560 (Bankr.S.D.N.Y.2010) (quoting In re Best Prods. Co., 173 B.R. 862, 866 (Bankr.S.D.N.Y.1994)); see also In re Sentinel Mgmt. Grp., Inc., 404 B.R. 488, 494 (Bankr.N.D.Ill.2009) (stating that substantial contribution is narrowly defined and limited to extraordinary creditor actions which lead directly to tangible and significant benefits to creditors). This approach is consistent with the Sixth Circuit’s position that § 503(b) claims are to be strictly construed. City of White Plains, New York v. A & S Galleria Real Estate, Inc. (In re Federated Dep’t Stores, Inc.), 270 F.3d 994, 1000 (6th Cir.2001). The issues, then, are whether the creditor made a substantial contribution to the chapter 11 process and, if so, whether the requested fees and expenses are reasonable. Gorski v. Eisen (In re Henrick’s Commerce Park, LLC), 347 B.R. 115, at 5 (6th Cir. BAP 2006) (unpublished opinion), aff'd 313 Fed.Appx. 740 (6th Cir.2007) (unpublished opinion). The moving party has the burden of proof. Hall Fin. Grp., Inc. v. DP Partners, Ltd. (In re DP Partners, Ltd.), 106 F.3d 667, 671 (5th Cir.1997); Haskins v. United States (In re Lister), 846 F.2d 55, 57 (10th Cir.1988); In re Gurley, 235 B.R. 626, 631 (Bankr.W.D.Tenn.1999). “[T]he principal test of substantial contribution is the extent of benefit to the estate.” Cellular 101, Inc. v. Channel Commc’ns, Inc. (In re Cellular 101, Inc.), 377 F.3d 1092, 1096 (9th Cir.2004) (quotation marks and citations omitted). The focus is on “whether the efforts of the applicant resulted in an actual and demonstrable benefit to the debtor’s estate and the creditors.” In re Lister, 846 F.2d at 57. The Bankruptcy Code does not define the term substantial contribution, but there is general agreement that “services which make a substantial contribution are those which ‘foster and enhance, rather than retard or interrupt the progress of reorganization.’ ” In re DP Partners, Ltd., 106 F.3d at 672 (quoting In re Consol. Bancshares, Inc., 785 F.2d 1249, 1253 (5th Cir.1986)); see also In re Lebron, 27 F.3d at 944; In re Big Rivers Elec. Corp., 233 B.R. at 746. More specifically— Factors which the courts have considered in determining whether an applicant has made a substantial contribution in a chapter 11 case include: whether the services were provided to benefit the estate itself or all of the parties in the bankruptcy case; whether the services conferred a direct, significant and demonstrably positive benefit upon the estate; and whether the services were duplicative of services performed by others. In re Best Prods. Co., 173 B.R. at 865. As one court noted, “extensive participation in a case, without more, does not constitute substantial contribution.” In re Alumni Hotel Corp., 203 B.R. 624, 631 (Bankr.E.D.Mich.1996). Courts have found that a creditor made a substantial contribution in a variety of situations. See, for example, Speights & Runyan v. Celotex Corp. (In re Celotex Corp.), 227 F.3d 1336, 1340 (11th Cir.2000) (finding that claimants’ attorney’s credibility, special experience, and significant role in negotiating a successful plan supported a finding of substantial contribution); In re DP Partners, Ltd., 106 F.3d at 673 (creditor’s discovery of a fraudulent conveyance, termination of exclusivity, and participation in a confirmation fight which resulted in a benefit of at least $3 million to all creditors found to support substantial contribution finding); 833In re Serv. Merch. Co., 256 B.R. 738, 743 (Bankr.M.D.Tenn.1999) (approving an award under § 503(b)(3) to professionals of an unofficial creditors committee based on their substantial contribution to the case); In re Primary Health Servs., Inc., 227 B.R. 479, 484-85 (Bankr.N.D.Ohio 1998) (finding that creditor who in essence performed the function of a creditors committee in a small business chapter 11 case was entitled to allowance of his professional fees and expenses under § 503(b)(3)(D) and (b)(4)). There is disagreement among the Circuits as to what weight, if any, should be given to a creditor’s self-interest. Compare In re Lebron, 27 F.3d at 944 (“Inherent in the term “substantial” is the concept that the benefit received by the estate must be more than an incidental one arising from activities the - applicant has pursued in protecting his or her own interests.”), and In re Lister, 846 F.2d at 57 (“Efforts undertaken by a creditor solely to further his own self-interest ... will not be compensable, notwithstanding any incidental benefit accruing to the bankruptcy estate.”), with In re Celotex Corp., 227 F.3d at 1339 (holding that a creditor’s motive in taking actions which benefit the estate has little relevance to the determination of whether the creditor made a substantial contribution), and In re DP Partners Ltd., 106 F.3d at 673 (same); see also In re Cellular 101, Inc., 377 F.3d at 1097 (noting the divergence of opinion but declining to decide the issue). The Sixth Circuit has not spoken on this issue. As other courts have noted, § 503 specifically permits compensation to a creditor’s counsel under certain circumstances, and that counsel is by definition always going to be acting in the creditor’s best interest. If by doing so the creditor also makes a substantial contribution to the success of the chapter 11 case, there is no reason to bar the creditor from recovering fees otherwise potentially available to it. The applicant’s motive for its actions is a factor that may be considered, but this court agrees with the Third Circuit that “the existence of a self-interest cannot in and of itself preclude reimbursement.” In re Lebron, 27 F.3d at 944; see also In re Cellular, 101, Inc., 377 F.3d at 1097-98 (“Any concern we have about evidence that Channel and Price benefitted from then-own efforts is outweighed by the extent of the benefit those efforts conferred on the estate.”); In re Big Rivers Elec. Corp., 233 B.R. at 748 (“To recoup costs as an administrative expense, the creditor must prove his or her actions transcended self protection.”). III. DISCUSSION The Senior Noteholders argue that they were instrumental in achieving a favorable outcome for creditors and that these cases could have followed a very different path without their cooperative and meaningful participation. As evidence of their substantial contribution, they cite: (1) their decision to settle the adversary proceeding rather than to litigate it, which would have drained funds from the estate to the detriment of creditors; and (2) the assistance they provided in developing a defense strategy against the FDIC in the Capital and Refund litigations, together with their active involvement in responding to discovery in the Capital litigation. They also argue that the settlement which they proposed for their own issues became the blueprint for the distribution scheme used in the confirmed plan and assured a quick plan process. On this point, they argue further that their agreement that the first $2 million would be distributed to general unsecured creditors essentially lowered their own priority to the direct benefit of the estates’ other creditors. 834The objectors challenge the Senior Noteholders’ characterization of their participation in the cases. They argue that the Noteholders did only what was required to protect their self-interest and not more. The FDIC also argues that the claim should be denied because the activities duplicated those of the estate professionals. On the record before it, this court cannot find that the Senior Noteholders proved that they made a substantial contribution to these cases within the meaning of § 503(b)(3)(D). It is beyond question that the Senior Noteholders recognized at the outset that litigating their position would not preserve value, and so they sensibly chose to focus on reaching a consensus. They did so sooner rather than later, which helped the case to proceed smoothly with respect to the issues involving the Senior Noteholders. It is equally clear that their counsel acted with the utmost professionalism, which approach avoided administrative and litigation costs for the estates. However, the efforts by the Senior Noteholders to settle their own claims are not properly characterized as a substantial contribution to the case. While the settlement spared the estates and other creditors from the expense and inconvenience of litigation, this is true of any settlement reached. The Senior Noteholders also point to the settlement term, incorporated into the plan, which provided for a $2 million distribution to general unsecured creditors. The Senior Note-holders agreed to this term as part of a settlement of the claims raised in the initial adversary proceeding, where the debtors sought to recover about $12 million paid to the noteholders before the chapter 11 filings. Agreeing to compromise that cause of action for $2 million does not establish that the settlement benefitted the estate beyond the benefit that accompanies any settlement; i.e. resolution of issues without expending more time and money. The claim that the Senior Note-holders made a substantial contribution to the Capital litigation is more promising, but there is insufficient evidence to prove this point. First, there is no evidence that the Senior Noteholders conferred a benefit on the estate by responding to discovery requests posed to them by the FDIC. The Senior Noteholders argue, without opposition, that the FDIC did not use any of the information it obtained from the Senior Noteholders. Rather than showing that participating in this discovery benefitted the debtors, this tends to show that it did not benefit anybody. While the Senior Noteholders’ frustration at having to spend this time is understandable, it does not show a substantial contribution to the estates. The second prong is that one of the counsel for the Senior Noteholders had a particular expertise in capital maintenance issues, which allowed him to aid the debtors’ counsel in a meaningful way. Again, however, there was little or no evidence as to what exactly this meant. Given that counsel for the debtor had the responsibility to defend the litigation, and ably did so, any assistance provided by the Senior Noteholders must be presumed in the first instance to duplicate those efforts. IV. CONCLUSION For the reasons stated, the UST and the FDIC objections are sustained, and the Senior Noteholders’ motion is denied. IT IS SO ORDERED. . The motion is brought by the holders and investment advisors or managers for the account holders of the 11.78% Senior Notes issued by the debtor AmFin Financial Corp. and due October 20, 2012, together with the Bank of New York Mellon as collateral agent in connection with the Senior Notes (collectively, the Senior Noteholders). . Docket 1373, 1401. . The debtors agreed, through a settlement incorporated into the confirmed plan, that they would not object to the § 503(b) claim for an amount up to $950,000.00. See Docket 1284, 1314. The debtors also filed a comment in support of the motion. Docket 1398. . Docket 1389, 1393. . The court heard this matter on February 9, 2012 and took it under submission at that time. Counsel did not request an evidentiary hearing. This factual background is drawn from the disclosure statement and from the factual background stated in the Senior Note-holders' motion and response. . The Reorganized Debtors are AmFin Financial Corporation (AFC) fka AmTrust Financial Corp., and its five subsidiaries: AmFin Real Estate Investments Inc. fka AmTrust Real Estate Investments Inc.; AmFin Insurance Agency Inc. fka AmTrust Insurance Agency, Inc.; AmFin Investments Inc. flea AmTrust Investments Inc.; AmFin Properties Inc. fka AmTrust Properties Inc.; and AmFin Management Inc fka AmTrust Management Inc. . At a hearing held on December 3, 2009, debtors’ counsel stated that Senior Noteholders might represent as much as two-thirds of economic interest in the cases and the Senior Noteholders’ counsel stated that it exceeded 90%. . AmFin Fin. Corp., et al. v. Allstate Life Ins. Co., et al., Adv. No. 09-1387. . Administrative expenses allowed under these provisions are entitled to priority in payment. See 11 U.S.C. § 507(a)(2).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494680/	MEMORANDUM OPINION JERRY W. VENTERS, Bankruptcy Judge. On April 21, 2011, the Plaintiffs, Debtor Josephine Washington and Chester Parks filed a three-count complaint seeking: 1) a determination that the Defendant’s asserted security interest in the Plaintiffs’ residence is invalid; 2) the removal of the cloud on the title allegedly resulting from the Defendant’s asserted interest in the property; and 3) the imposition of sanctions against the Defendant for alleged violations of the automatic stay. Both parties have moved for summary judgment. For the reasons stated below, the Court will grant the Defendant’s motion for summary judgment on all counts of the Plaintiffs’ complaint and will deny the Plaintiffs’ motion for summary judgment. BACKGROUND The Court limits its recitation of the facts to those germane to the Court’s holding. Notably, the Court omits many of the facts surrounding alleged violations of a “Pooling and Servicing Agreement” to which Deutsche is a party. The Plaintiffs argue that Deutsche Bank lacks standing to enforce the note and deed of trust at issue as a result of those violations. As explained below, the alleged violations of the Pooling and Service Agreement are irrelevant to Deutsche Bank’s standing here. On January 13, 2006, Chester Parks and Josephine Washington borrowed $200,000.00 from Argent Mortgage Company, LLC, and executed a thirty-year, fixed rate note (“Note”) payable to Argent. To secure payment of the Note, Parks and Washington executed a deed of trust in favor of Argent (“Deed of Trust”), granting Argent a security interest in real property commonly known as 1301 Sawgrass Drive, Grain Valley, Missouri 64029, and more particularly described as: LOT 136, VALLEY HILLS ESTATES 2ND PLAT, A SUBDIVISION IN GRAIN VALLEY, JACKSON COUNTY, MISSOURI, ACCORDING TO THE RECORDED PLAT THEREOF (the “Property”). The Deed of Trust was recorded with the Jackson County, Missouri Recorder of Deeds on January 20, 2006. On or about January 19, 2006, Argent endorsed the Note in blank, without recourse, and executed an Assignment of Deed of Trust in blank (i.e., the assignment did not designate an assignee). Possession of both of these documents as well as a conformed copy of the original Deed of Trust was transferred to Deutsche Bank. The Letter of Transmittal identified Parks and Washington as the borrowers and identified the Loan Number as 0092668193-9606. Counsel for Deutsche Bank attests that the original Note and original Deed of Trust are currently being held in her law firm’s vault and are available for inspection. 849The loan to the Plaintiffs was among hundreds of loans included in the Argent Securities Inc. Asset-Backed Pass-Through Certificates, Series 2006-W3 pool of assets (the “Trust Fund”). Certificates in the Trust Fund were issued pursuant to a Pooling and Servicing Agreement (“PSA”) dated March 1, 2006, among Argent Securities, Inc., as Depositor, Ameriquest, as Master Servicer, and Deutsche Bank, as Trustee. On April 4, 2007, Argent assigned the Deed of Trust and Note to Deutsche Bank without recourse (the “Deutsche Bank Assignment”). The Deutsche Bank Assignment was recorded with the Jackson County, Missouri Recorder of Deeds on April 18, 2007. On February 11, 2009, Argent again assigned the Deed of Trust and Note to Deutsche Bank (the “Second Deutsche Bank Assignment”).1 The Second Deutsche Bank Assignment was recorded with the Jackson County, Missouri Recorder of Deeds on February 17, 2009. Argent transferred the right to service the Loan, including the right to collect payments, to AMC Mortgage Services, Inc. (“AMC”), effective January 19, 2006. On September 14, 2007, AMC transferred the right to service the Loan, including the right to collect payments, to Citi Residential Lending Inc., effective October 1, 2007. On January 23, 2009, Citi transferred the right to service the Loan, including the right to collect payments, to American Home Mortgage Servicing, Inc. (“AHM-SI”) effective February 11, 2009. AHMSI is the current servicer of the Loan. AHMSI notified Washington and Parks that it was the current servicer of the Loan and provided a contact address for AHMSI at P.O. Box -631730, Irving, Texas 75063-1730. Washington and Parks are in default of their obligations under the Note and Deed of Trust for failure to make payments of principal and interest when such payments became due. As of June 7, 2011, Washington and Parks were approximately $51,000.00 delinquent in Loan payments, plus AHMSI/Deutsche Bank had advanced approximately $21,000.00 for taxes and insurance on the Property. Additional fees, costs and charges have accrued on the Loan balance pursuant to the terms of the Note and Deed of Trust.2 Washington’s Multiple Chapter 13 Bankruptcy Filings On April 20, 2007, Washington filed a Chapter 13 bankruptcy petition in this Court, case number 07-41282 (the “2007 Bankruptcy”). On February 19, 2008, Deutsche Bank, through its prior loan servicer, Citi, filed a Motion for Relief From Automatic Stay and Relief From the Co-Debtor Stay, wherein Citi, on behalf of Deutsche Bank, asserted that it was the holder of a secured claim based on the Note and Deed of Trust, that Washington had failed to make post-petition payments in accordance with her Chapter 13 plan, and requested relief from the automatic stay and co-debtor stay to foreclose the Deed of Trust [Docket No. 44] (the “First Stay Relief Motion”). On March 5, 2008, Washington filed an answer to the First Stay Relief Motion. Neither Parks nor the Trustee filed an answer or response, although both were served with the First Stay Relief Motion. 850. On April 21, 2008, the Court held a hearing on the First Stay Relief Motion, and on April 22, 2008, the Court entered a Consent Order and Stipulation in Settlement of Motion for Relief entered into between Washington and Citi to settle the First Stay Relief Motion [Docket No. 56]. The Order provided, inter alia, that Washington would tender $4,493.67 by April 21, 2008,'and pay an additional $324.65 per month for 6 consecutive months commencing May 15, 2008. Washington consented to Citi obtaining relief from the stay if she failed to comply with these terms. Upon Washington’s failure to meet her obligations under the Consent Order and after 10 days’ notice of her default, the Court entered on June 10, 2008 an “Order Granting Relief After Default of Settlement Order” (the “First Stay Relief Order”) in which the Court found that “Movant has a security interest in the [Property],” and terminated the automatic stay to permit “Movant to foreclose its security interest in the [Property] and to pursue its remedies in accordance with the security agreement and state law.” [Docket No. 59]. Neither Washington nor Parks appealed the First Stay Relief Order. The 2007 Bankruptcy was ultimately dismissed on February 8, 2010, due to Washington’s failure to file a confirmable plan. Deutsche Bank did not foreclose on the Property after the entry of the First Stay Relief Order, though, because Washington and Parks were pursuing a loan modification. On February 11, 2010, Washington filed her second Chapter 13 bankruptcy petition, case number 10-40531 (the “2010 Bankruptcy”). This case was short-lived. On March 17, 2011, the Court dismissed the 2010 Bankruptcy on the Trustee’s motion to dismiss based on a default in plan payments. On March 24, 2011, Washington filed the current Chapter 13 bankruptcy petition, case number 11-41288 (the “2011 Bankruptcy”). On April 5, 2011, Deutsche Bank filed a Motion to Dismiss, or in the Alternative for Relief From the Automatic Stay and Relief From Co-Debtor Stay (the “Second Stay Relief Motion”). Washington, Parks, and the Chapter 13 trustee were properly served with the Second Stay Relief Motion. On April 6, 2011, Deutsche Bank filed a Motion for Expedited Hearing on the Second Stay Relief Motion, which the Court granted. On April 11, 2011, the Court held a hearing on the Second Stay Relief Motion, and on April 13, 2011, the Court entered an Order (the “Second Stay Relief Order”) in which the Court found that “Movant has a security interest in the [Property],” and that “there exists a delinquency in mortgage payments and fees/ costs.” However, the Court conditioned Deutsche Bank’s entitlement to move forward with foreclosure on Washington’s default in plan payments [Docket No. 30]. The Second Stay Relief Order was' not appealed. THE ADVERSARY PROCEEDING As earlier noted, on April 21, 2011, the Plaintiffs filed their Complaint consisting of three counts. The crux of the first and second counts is that Deutsche Bank does not have a perfected secured claim in the Property, cannot enforce the Note, and lacks standing to foreclose the Deed of Trust because the Note was not “executed, indorsed, transferred, assigned or delivered” in accordance with the PSA. Plaintiffs therefore request that the Court' find that the Deed of Trust is either void or satisfied and order that it be stricken from the land records. In the third count, Plaintiffs allege that Deutsche Bank’s “efforts to collect the underlying debt are a 851prior and continuing violation of the automatic stay,” and seek an award of actual damages, punitive damages, reasonable attorney’s fees and costs for the alleged stay violation. However, Plaintiffs have not set forth any specific collection activity that they believe violated the automatic stay. STANDARD OF REVIEW Summary judgment is appropriate “if the pleadings, the discovery and disclosure of materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.”3 A court should grant a motion for summary judgment unless the facts, when viewed in the light most favorable to the nonmoving party and all reasonable inferences which can be drawn therefrom, demonstrate that some genuine issue of fact exists.4 Applying this standard, the Court finds that Deutsche Bank is entitled to summary judgment on all counts of the Plaintiffs’ complaint. Accordingly, the Plaintiffs’ motion for summary judgment will be denied. DISCUSSION As a preliminary matter, the Court disposes of Count III of the Plaintiffs’ Complaint. The Complaint fails to specifically identify the conduct the Plaintiffs allege violated the automatic stay, and the Plaintiffs’ response to the Defendant’s motion for summary judgment was also silent on this issue. Consequently, the Defendant is entitled to summary judgment on this Count. I. Counts I and II of Plaintiffs’ Complaint are Barred By Res Judicata, Collateral Estoppel, and Law of the Case. Put simply, the Court has entered two orders—one with Washington’s consent— finding that Deutsche Bank has a valid security interest in the Property. Those orders are final and binding on the Plaintiffs. And the present suit by the Plaintiffs challenging the validity of Deutsche Bank’s security interest constitutes an impermissible collateral attack on those orders—under multiple preclusion doctrines. Most immediately, Counts I and II are barred by the “law of the case” doctrine. The law of the case doctrine bars the re-litigation of a settled issue in a case.5 The doctrine “requires courts to adhere to decisions made in earlier proceedings in order to ensure uniformity of decisions, protect the expectations of the parties, and promote judicial economy.”6 In other words, the doctrine posits “that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.”7 The issue of whether Deutsche Bank has a valid security interest in the Property was settled in this case on April 13, 2011, when, after a hearing on the matter at which Washington was represented by counsel, the Court entered the Second Stay Relief Order which specifically found that Deutsche Bank “has a security interest in the [Property].” The Plaintiffs did not appeal or otherwise challenge this order. To the contrary, Washington consented to and benefitted from the spe852cific terms of the order which conditioned Deutsche Bank’s relief from the stay on her default in plan payments [Docket No. 30]. Counts I and II are also barred by the doctrines of res judicata and collateral estoppel. The doctrine of res judicata bars the re-litigation of a claim if: (1) the prior judgment was rendered by a court of competent jurisdiction; (2) the prior judgment was a final judgment on the merits; and (3) the same cause of action and the same parties or their privies were involved in both cases.8 “Whether a cause of action is the same for res judicata purposes depends on the facts presented, not the legal violations alleged.”9 Collateral estoppel, also known as “issue preclusion,” provides that when an issue of ultimate fact has been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in another lawsuit.10 Here, the First and Second Stay Relief Orders are entitled to res judicata and collateral estoppel effect.11 They were entered by a court of competent jurisdiction—this Court—and both are final judgments on the merits.12 The parties, or those in privy with them, are identical between the First and Second Stay Relief Motions and the Complaint. And finally, the First and Second Stay Relief Motions and the Complaint involve the same facts and ultimate issue, ie., Deutsche Bank’s right to enforce the Note and Deed of Trust. Plaintiffs had the opportunity to challenge Deutsche Bank’s right to enforce the Note and Deed of Trust in the context of the First and Second Stay Relief Motions but chose not to do so. Therefore, the Court’s prior determination in the First and Second Stay Relief Orders that Deutsche Bank has a valid security interest in the Property and can enforce the Note and Deed of Trust is entitled to res judicata and collateral estoppel effect. The Plaintiffs are thus barred from challenging that determination here. Although the Defendant is entitled to summary judgment on the basis of estoppel alone, the Defendant prevails on the merits as well. 11. Deutsche Bank has standing to enforce the Note and Deed of Trust. The Plaintiffs make several arguments why Deutsche Bank is not the proper party in interest based on various alleged violations of the PSA, e.cj., that Argent Securities, Inc., failed to comply with the “true sale” or other terms of the PSA. Aside from the fact that the Plaintiffs lack standing to seek relief for violations of the PSA,13 those violations (even if they’re 853true) are irrelevant to Deutsche Bank’s standing to enforce the Note under the Missouri Uniform Commercial Code.14 And despite the prolixity of the Plaintiffs’ arguments, the analysis is straightforward. The Note is a negotiable instrument and is therefore subject to the Missouri Uniform Commercial Code.15 Under Mo.Rev.Stat. § 400.3-301, a “Person entitled to enforce” an instrument is defined as “(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 400.3-309 or 400.3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.” 16 “Holder” with respect to a negofiable instrument-, means the person in possession if the instrument is payable to bearer.17 “If a negotiable instrument has been endorsed-in blank,18 as the Note in this case has been, the instrument becomes payable to ‘bearer’ and may be negotiated by transfer of possession alone.”19 “If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.”20 Finally, under Missouri law, a party entitled to enforce a note is also entitled to enforce the deed of trust securing that note, regardless of whether that transfer is recorded.21 “Possession of the note, insures that this creditor, and not an unknown one, is the one entitled to exercise rights under the deed of trust, and that the debtor will not be obligated to pay twice.”22 Deutsche Bank is in possession of the Note and has been since it was trans854ferred from Argent in January 2006. Argent endorsed the Note in blank so it is now a bearer note. Therefore, Deutsche Bank is entitled to enforce the Note as the party in physical possession of it. And under Missouri law, Deutsche Bank is entitled to enforce the Deed of Trust securing the Note, regardless of whether it is the assignee of record (although in this case it is in possession of the assignment as well as the assignee of record pursuant to the April 4, 2007 Deutsche Bank Assignment). Consequently, Deutsche Bank is entitled, as a matter of law, to enforce the Note and the Deed of Trust, and summary judgment in favor of the Defendant and against the Plaintiffs is warranted on the merits of Counts I and II of the Plaintiffs’ Complaint. CONCLUSION For the reasons stated above, the Defendant is entitled to summary judgment on all counts of the Plaintiffs’ Complaint and the Complaint will be dismissed with prejudice. The Plaintiffs’ Motion for Summary Judgment will be denied. Costs shall be taxed to Plaintiffs. SO ORDERED. . No explanation has been given for the second, redundant assignment. . According to a Stay Relief Motion filed by Deutsche Bank on April 5, 2011, the monthly mortgage payments were delinquent from July 1, 2008, and the total owed on the debt was $262,502.14, of which $ 196,938.1 i was principal. In her bankruptcy schedules, Washington valued the property at $250,000. . Fed.R.Civ.P. 56(c). . See Enterprise Bank v. Magna Bank of Missouri, 92 F.3d 743, 747 (8th Cir.1996). . See United States v. Bartsh, 69 F.3d 864, 866 (8th Cir. 1995). . Id. . Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983). . Lundquist v. Rice Memorial Hosp., 238 F.3d 975, 977 (8th Cir.2001). . Lingenfelter v. Stoebner, 2005 WL 1225950 at 5 (D.Minn. May 23, 2005) (citation omitted). . Anderberg-Lund Printing Co., 109 F.3d 1343, 1346 (8th Cir.1997). See also Chavez v. Weber, 497 F.3d 796, 803 (8th Cir.2007). . The Consent Order and Stipulation in Settlement of Motion for Relief entered in the 2007 Bankruptcy [Docket No. 56] is also entitled to res judicata effect. Although the order did not expressly state that Deutsche Bank had a security interest in the Property, that finding was necessarily implied by the order which permitted Citi (Deutsche Bank’s privy) to obtain an order lifting the stay if Washington failed to cure her default within ten days following written notice. . See Pollack v. Federal Deposit Ins. Corp. (In re Monument Record Corp.), 71 B.R. 853, 857 (Bankr.M.D.Tenn.1987)(an order entered by the bankruptcy court on a request for relief from the automatic stay is a final order) (citations omitted). . See In re Smoak, 461 B.R. 510, 518-21 (Bankr.S.D.Ohio.2011) (holding that debtors under securitized notes lacked standing to raise violations of the pooling and servicing 853agreement); Correia v. Deutsche Bank Nat’l Trust Co. (In re Correia), 452 B.R. 319 (1st Cir. BAP 2011) (same); In re Almeida, 417 B.R. 140, 149 n. 4 (Bankr.D.Mass.2009) (holding that debtors, as makers of the notes, were not parties or third-party beneficiaries to the pooling and servicing agreement and, therefore, lacked standing). See also Bittinger v. Wells Fargo Bank NA, 744 F.Supp.2d 619, 625-26 (S.D.Tex.2010) (obligor cannot sue for breach of contract based upon a pooling and servicing agreement to which it is not a party)- . See, e.g., In re Smoak, 461 B.R. at 519-23 (rejecting a similar argument by a debtor and holding that the - ability of a Trustee of a securitization trust to enforce the mortgage note was unaffected by alleged noncompliance with the terms of a pooling and servicing agreement governing the securitization trust, and that the pooling and servicing agreement could not eliminate the rights of a holder under the Ohio Uniform Commercial Code (substantially similar to the Missouri Uniform Commercial Code) to enforce the mortgage note). . See Mo.Rev.Stat. § 400.3-104. . Mo.Rev.Stat. § 400.3-301 (emphasis added). See also In re Hwang, 438 B.R. 661, 665 (Bankr.C.D.Cal.2010) (holding that the holder of a note has the right to enforce the note, regardless of whether the holder is the owner of the note or is in wrongful possession of the note). “It would seem relatively straightforward, then ... the party with the right to enforce a claim on the note ... is the real party in interest on this Motion.” Id. . Mo.Rev.Stat. § 400.1-201(20) . A "blank endorsement” is an endorsement that does not identify a person to whom the instrument is payable. See Mo.Rev.Stat. § 400.3-205(b). . Mo.Rev.Stat. § 400.3-205(b)’ . Mo.Rev.Stat. § 400.3-201(b). . See In re Tucker, 441 B.R. 638, 644-45 (Bankr.W.D.Mo.2010) (citing Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623 (Mo.Ct.App.2009)). . In re Box, 2010 WL 2228289, *5 (Bankr.W.D.Mo. June 3, 2010).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494682/	MEMORANDUM OPINION ROBERT H. JACOBVITZ, Bankruptcy Judge. THIS MATTER is before the Court on Walter R. Gould’s Objection to Claim of Exemptions filed May 19, 2010 (Docket No. 31), the Chapter 13 Trustee’s Objection to Amended Schedule C, filed June 7, 2010 (Docket No. 35); and the Debtor’s Motion to Avoid Liens Pursuant to 11 U.S.C. § 522(f), filed June 8, 2010 (Docket No. 36). Walter R. Gould (“Gould”) and the Chapter 13 Trustee objected to the Debtors’ claim of homestead exemption. The Debtors seek to avoid a judicial lien filed by Gould under 11 U.S.C. § 522(f) on the ground that the lien impairs their homestead exemption. The Debtors had objected to the Gould’s claim in this case. See Objection to the Claim of Creditor Gould, filed October 6, 2010. By a stipulated order, the Debtors and Gould resolved the claim objection. See Stipulated Order entered April 14, 2011. (Docket No. 91). Subsequently, Gould, the Debtors and the Chapter 13 Trustee stipulated to entry of an order in which they stipulated to certain facts, and jointly requested the Court to decide the objections to claim of homestead exemption and the Debtors’ motion to avoid judicial lien upon the stipulated facts. See Stipulated Order entered July 15, 2011. (Docket No. 97). After consideration of the Stipulated Findings of Fact, the Debtors’ and Gould’s briefs in support of their respective positions, and applicable statutes and relevant case law, the Court finds that the Debtor, Eloy T. Martinez, is not entitled to claim a homestead exemption in the property located at 501 Roman Drive, Es-pañola, New Mexico 87532 (“Española Property” or “Property”). Based on the stipulated value of the Property, and because the Debtors are only entitled to 77claim one homestead exemption in the Property, the judicial lien does not impair the Debtors’ exemption. Consequently, the Court will deny the Debtors’ motion to avoid the judicial lien held by Gould. STIPULATED FACTS The Stipulated Order entered July 15, 2011 contains a finding that the Debtors, Gould, and the Chapter 13 Trustee have stipulated and agreed to the following:1 1. Creditor Gould claims a debt secured by a judgment taken against Debtor Rosina Martinez prior to her marriage to Debtor Eloy Martinez. 2. Gould filed a suit to foreclose this judgment lien on February 4, 2007 and filed a lis pendens on the same date. 3. Debtors filed their petition for Chapter 13 relief on March 8, 2010 (the “Petition Date”). 4. The Debtors reside in a home that is part of the Española Property. The Debt- or Rosina Martinez-Archuleta inherited the Property from her mother’s estate on May 17,1995. 5. The Debtors were married on March 3, 2003. 6. On the date that Debtors filed for bankruptcy relief (March 8, 2010), Debtor Rosina Martinez’ name was the only name on the title to the deed to the Española Property and she held it as her sole and separate property. 7. Debtor Rosina Martinez executed a quitclaim deed to the Española Property to Debtor Eloy Martinez on March 18, 2010. There was no prior Court approval for this post-petition transfer. 8. Debtor Eloy Martinez executed a warranty deed to transfer the Española Property back to Debtor Rosina Martinez and himself on August 26, 2010. There was no prior Court approval for this transfer. 9. Debtor Eloy Martinez caused payments close to $18,000 to be made by checks from a joint bank account, which Debtor Eloy Martinez shares with his son Eloy Martinez Jr., to pay for repairs, changes or additions on the Española Property. Such payments for repairs were made within the last few years during which time the Debtors were already married, but after Gould’s judicial lien was recorded and before the foreclosure suit was filed by Gould. 10. According to Debtors, Debtor Eloy Martinez was not aware of the debt or the lien Creditor Gould had against Debtor Rosina Martinez at the time he assisted in paying for repairs on the Española Property or at any time until he accepted service for Debtor Rosina Martinez of the foreclosure suit. 11. Debtor Rosina Martinez initially claimed a $60,000 homestead exemption in the Española Property when both Debtors filed for bankruptcy relief, but the Debtors later amended Schedule C and are currently claiming a homestead exemption of $60,000 each for a total of $120,000 of homestead exemptions. 12. Debtors, Creditor Gould, and Trustee signed and agreed to a stipulated order that resolves Debtors’ objection to the Claim of Creditor Gould, Gould’s Motion for Summary Judgment, Debtors’ Motion for Additional Time Regarding Summary Judgment, and the value of the Española Property. In this stipulation, which was subsequently approved by the Court, the Debtors and Creditor Gould have stipu78lated that Debtor Rosina Martinez is entitled to one homestead exemption on the Española Property in the amount of $60,000. The homestead exemption of Debtor Eloy Martinez in the Española Property has not been resolved and is pending the resolution of the objections filed by the Chapter 13 Trustee and Creditor Gould. 13. The amount of Gould’s allowed claim is stipulated to be $85,000, bearing interest at the rate of 8.75% per annum from the date of the stipulated order and secured to the extent of the value in the Española Property remaining after the allowance of any homestead exemptions of Debtors. See Docket No. 91. 14. Debtors originally valued the Espa-ñola Property at $90,000. However, in the stipulated order referenced above (after an appraisal), the parties have stipulated that the value of the residence is $130,000 and the adjacent lot has a value of $38,000; therefore, the total value of the Española Property is $168,000. These properties have always been used together and were transferred to the Debtor in one conveyance. The adjacent lot is used for a back yard to the residence. 15. Pursuant to this stipulated order, certain other real property once owned by Debtor Rosina Martinez was transferred to her son Greg, has been devoted by Greg to the Plan, and will be sold. This property has recently been listed by Greg as required pursuant to the terms of the stipulation and the plan to be re-formatted. Proceeds from the sale of this property will be used to fund the plan; and, if this pays the Gould claim, per the stipulation of the parties, the Española Property will not have to be liquidated. 16. Debtor Rosina Martinez, in an attempt to transfer the Española Property to herself and Debtor Eloy Martinez, may have not effectively completed that transfer, and was advised by her counsel that, at the least, a correction deed needed to be filed. It is unclear at this point whether that has been accomplished. 17. Debtors, Creditor Gould, and Trustee have all agreed to a Joint Request for the Court to decide Debtors’ Motion to Avoid Lien and Trustee and Creditor Gould’s Objection to Exemptions based upon material facts stipulated to herein and legal arguments submitted separately. 18. It is the opinion testimony of Debt- or Rosina Martinez that the repairs, changes, and additions to the Española Property resulting from Debtor Eloy Martinez’s payments increased value of the Española Property by as much as $54,000 (three times the repaid, improvement cost). Creditor Gould does not agree with this opinion testimony. The Stipulated Order entered April 14, 2011 includes the following stipulation by the Debtors, Gould and the Chapter 13 Trustee: 19. The value of the residence at 501 Román Drive Española, NM 87532 is $130,000. The lot behind the residence owned by Debtor Rosina Martinez has a value of $38,000.00. The residence and the lot behind the residence together comprise the Española Property and together have a value of $168,000. This value is the agreed value for all purposes in this bankruptcy case and is binding on Debtors, Gould, and the Chapter 13 Trustee. The Court also finds: 20. Eloy Martinez claimed a homestead exemption under N.M.S.A.1978 § 42-10-9. OTHER STIPULATIONS The Stipulated Order entered April 14, 2011 includes the following additional stipulations and determinations by the Court based on those stipulations: 7921. Gould is a secured creditor to the extent that his lien is not avoided in regard to Española Property under 11 U.S.C. § 522(f). 22. Debtor Rosina Martinez is entitled to one homestead exemption in the Espa-ñola Property for herself in the amount of $60,000. 28. Gould has an allowed claim of $85,000.00, secured by the Española Property, and that claim shall bear interest at the rate of 8.75% from the date of entry of the stipulated order (April 14, 2011) (“Gould’s Allowed Claim”). Gould’s Allowed Claim is a secured claim to the extent of the value of the Española Property remaining after any allowed homestead exemption of Debtors. DISCUSSION A. Whether Eloy Martinez is Entitled to Claim, a Homestead Exemption in the Property The parties do not dispute that Rosina Martinez is entitled to a homestead exemption against the Española Property in the amount of $60,000. Eloy Martinez claims his own homestead exemption in the in the amount of $60,000 against the Espa-ñola Property. If his claim of exemption is allowed, the total amount of the Debtors’ homestead exemption against the Españo-la Property would be $120,000. Eloy Martinez asserts that his pre-petition use of his separate property to pay for repairs to the Española Property during his marriage to Rosina Martinez gave rise to an equitable lien in favor of Eloy Martinez against the Property. On the petition date, Eloy Martinez and Rosina Martinez resided at the Española Property, and Rosina Martinez continued to own the Española Property as her separate property. Eloy Martinez maintains that his equitable lien against the Española Property is a sufficient interest in the Property to support his claim of homestead exemption. The Court disagrees. It is undisputed that the applicable exemption statute is the New Mexico homestead exemption statute. That statute provides: Each person shall have exempt a homestead in a dwelling house and land occupied by the person or in a dwelling house occupied by the person although the dwelling is on land owned by another, provided that the dwelling is owned, leased or being purchased by the person claiming the exemption. Such a person has a homestead of sixty thousand dollars ($60,000) exempt from attachment, execution or foreclosure by a judgment creditor and from any proceeding of receivers or trustees in insolvency proceedings and from executors or administrators in probate. If the homestead is owned jointly by two persons, each joint owner is entitled to an exemption of sixty thousand dollars ($60,000). N.M.S.A. § 42-10-9 (1978) (Cum. Supp. 2007). Eloy Martinez asserts that the last phrase in the first sentence of the statute: “provided that the dwelling is owned, leased or being purchased by the person claiming the exemption,” modifies only the immediately preceding phrase: “in a dwelling house occupied by the person although the dwelling is on land owned by another.” Thus, Mr. Martinez’s construction of the statute would allow him to claim a homestead exemption based solely on his occupation of the Española Property as his residence. The Court finds that the New Mexico homestead exemption statute cannot be construed in the manner Mr. Martinez suggests. To decipher the meaning of a statute, the Court must begin with the 80language of the statute itself. See U.S. v. Ron Pair Enterprises, Inc., 489 U.S. 285, 241, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290 (1989) (“The task of resolving the dispute over the meaning of § 506(b) begins where all such inquiries must begin: with the language of the statute itself.”) (citation omitted). The grammatical structure of the statute indicates that the phrase, “in a dwelling house occupied by the person although the dwelling is on land owned by another,” applies to the entire portion of the sentence that precedes it. The modifying phrase at the end of the sentence is set off by the only comma used in the entire sentence. There is no comma separating the first two phrases in the sentence. Consequently, the last phrase necessarily modifies both preceding phrases, not just the immediately preceding phrase. A reading of the statute in the way Mr. Martinez requests would mean that any person occupying a dwelling as his or her residence could claim a homestead exemption in the residence without having any economic interest in the residence. This would include, for example, a friend of the owner or the spouse of an adult child of the owner who resides at the residence without charge. But the language of the statute requires that the person either own, lease, or be in the process of purchasing the dwelling on the property in which the person claims a homestead exemption. Such interests constitute economic interests in property. Mr. Martinez’s reading of the statute fails because a person who merely occupies a property as his or her residence would have no economic interest in the property to exempt. Eloy Martinez also asserts that his claim of an equitable lien against the Española Property is sufficient to entitle him to claim a homestead exemption in the Espa-ñola Property, relying on Nesset v. Blueher Lumber Co. (In re Nesset), 33 B.R. 326 (Bankr.N.M.1983). In Nesset, the debtors formed a trust under which they were the trust beneficiaries, transferred all of their real and personal property to the trust (including their residence), and recorded the transfer of legal title to their residence to the trust. Id. at 327. The Nesset court first found that if the debtors’ transfer of their residence were invalid, the debtors retained legal title to the residence and could claim it exempt. Id. at 328. The Nesset court further reasoned that if the transfer of the residence to trust were valid, the debtors were the equitable owners of the residence and could also claim it exempt under applicable New Mexico law. Id. Thus, either as legal title holders or as equitable owners of the real property, the debtors were entitled to claim a homestead exemption in the real property. Id. Nesset is consistent with holdings by many courts that equitable title or equitable ownership of a homestead can support a claim of homestead exemption.2 However, an equitable lien against a residence does not create an ownership interest in the residence.3 Nor does the holder 81of an equitable lien by virtue of the lien itself have a leasehold interest. Finally, an equitable lien does not constitute an interest of a person purchasing the property. Because an equitable lien does not constitute an ownership interest, a leasehold interest, or an interest of a person purchasing property, an equitable lien is insufficient to support a claim of homestead exemption under the New Mexico homestead exemption statute.4 Thus, Eloy Martinez is not entitled to a homestead exemption based on his claim of an equitable lien against the Española Property. Eloy Martinez’s final argument in support of his claim of homestead exemption in the Española Property is that he holds an ownership interest in the Es-pañola Property. Post-petition Rosina Martinez transferred an ownership interest in the Española Property to Eloy Martinez. Although the transfer was made without the required approval of the Bankruptcy Court, Eloy Martinez argues that, under 11 U.S.C. § 550, the transfer is merely voidable, not void; consequently, the transfer is valid unless and until it is avoided. The Court finds this argument unpersuasive. A debtor’s entitlement to claim an exemption of property in a bankruptcy case is determined as of the bankruptcy petition date.5 As a result, any interest Eloy Martinez acquired in the Es-panola Property post-petition is disregarded for purposes of determining whether he is entitled to a homestead exemption against the Española Property in this bankruptcy case. B. Whether the Debtors Can Avoid Gould’s Judicial Lien The Debtors seek to avoid Gould’s judicial lien as impairing their homestead exemptions pursuant to 11 U.S.C. § 522(f). Whether a judicial lien impairs a debtor’s exemption is determined in accordance with the formula found in 11 U.S.C. § 522(f)(2)(A). That section provides: [A] lien shall be considered to impair an exemption to the extent that the sum of— (i) the lien; (ii) all other liens on the property; and (iii) the amount of the exemption that the debtor could claim if there were no hens on the property; exceeds the value that the debtor’s interest in the property would have in the absence of any liens. 11 U.S.C. § 522(f)(2)(A). The parties have stipulated to the following facts relevant to the application of the formula found in 11 U.S.C. § 522(f)(2)(A): 821. The value of Gould’s judicial lien was $85,000 as of April 14, 2011.6 2. Eloy Martinez caused payments “close to” $18,000 to be made by checks from a joint bank account shared by Eloy Martinez with his son Eloy Martinez Jr. to pay for repairs, changes or additions on the Española Property. Such payments were made after the Gould’s judicial lien attached to the Property but before the Debtors commenced their bankruptcy case. 3. In Rosina Martinez’s opinion, the payments made to repair and make additions to the Española Property increased the value of the Española Property by as much as $54,000 (three times the amount paid from the joint account of Eloy Martinez and Eloy Martinez Jr.). Gould disputes this opinion testimony. 4. The value of the Española Property, for all purposes in this bankruptcy case, is $168,000. Eloy Martinez asserts that under New Mexico law, the use of his $18,000 of separate funds to enhance the value of the Española Property that Rosina Martinez owns as her separate property creates an equitable lien in favor of Eloy Martinez. He asserts further that the amount of the lien is equal to the amount by which the value of the Property was enhanced by the use of his separate funds, and that this lien should be included in application of the formula set forth in 11 U.S.C. § 522(f)(2)(A). New Mexico courts have held that when community funds of both spouses are used to make improvements to the separate real property of one spouse, the community is entitled to an equitable lien for the enhanced value of the separate property resulting from the use of community funds.7 An equitable lien arises only if the property has been acquired or the value of the property is increased through use of both separate and community funds, although the court equates use of community labor with use of community funds. Martinez v. Block, 115 N.M. 762, 764-65, 858 P.2d 429, 431-32 (Ct.App.1993). There is some support for the proposition that, under New Mexico law, an equitable lien in a spouse’s separate property may arise in favor of the other spouse as a result of use of the other spouse’s separate funds to improve the property. See, e.g., Sparks v. Sparks, 84 N.M. 267, 502 P.2d 292 (1972).8 The debtor has the burden of proof to establish that a lien should be avoided under 11 U.S.C. § 522(f)(2)(A).9 Eloy Martinez has not satisfied this burden. The Court, therefore, need not determine whether or to what extent the equitable lien Eloy Martinez claims against the Española Property should be included when applying 11 U.S.C. § 522(f)(2)(A). The parties stipulated that Eloy Martinez caused payments close to $18,000 to be made to repair and improve the Española Property by checks from a joint bank account which Debtor Eloy Martinez 83shares with his son Eloy Martinez Jr. There is no stipulation regarding whether all or part of those funds were Mr. Martinez’s separate property, whether any of the funds were community property, or to what extent the funds belonged to Eloy Martinez Jr.10 Further, the Court cannot find that use of the funds increased the value of the Española Property by $54,000 as Mr. Martinez asserts because the parties stipulated only that Rosina Martinez would have testified that the repairs in question increased the value of the residence “by as much as $54,000.” No detail is given about the nature of the repairs or to otherwise support Ms. Martinez’s testimony. The parties stipulated that Gould disputed the testimony. Consequently, the stipulated facts are insufficient to establish that Eloy Martinez holds an equitable lien against the Española Property that should be included when calculating impairment under 11 U.S.C. § 522(f)(2)(A). Application of the Stipulated Facts to the Impairment Formula11 The petition date is the operative date to make determinations under 11 U.S.C. § 522(f)(2)(A), including determinations of lien amounts and the value of the exempt property. To avoid a judicial lien under 11 U.S.C. § 522(f)(2)(A) against property that was property of the estate on the petition date, the lien must impair the exemption as of the petition date.12 Even if the Court were to assume that Eloy Martinez were entitled to an equitable lien in the amount of $18,000 that 84should be included for purposes of applying the formula contained in 11 U.S.C. § 522(f)(2)(A), and that the amount of Gould’s judicial lien on the petition date was $85,00013, the Gould judicial lien does not impair Rosina Martinez’s homestead exemption. Gould judicial lien $ 85,000 Equitable lien 18,000 Homestead exemption 60,000 TOTAL $ 63,000 Value of homestead $168,000 Because the sum of the liens and the amount of the homestead exemption are less than the value of the homestead, the judicial hen does not impair the homestead exemption. CONCLUSION Based on the stipulated facts as applied to the relevant law, the Court concludes that Eloy Martinez is not entitled to claim a homestead exemption in the Española Property and that the Gould’s lien does not impair the Debtors’ homestead exemption. The Court will enter separate orders consistent with this Memorandum Opinion. . The Court has made minor, non-substantive changes to some of the wording of the parties’ stipulations. . See, e.g., In re Kester, 339 B.R. 749, 753 (10th Cir. BAP 2006), aff'd, 493 F.3d 1208 (10th Cir.2007) (applying Kansas law); In re Takes, 334 B.R. 642, 650 (N.D.Iowa 2005), aff'd, 478 F.3d 902 (8th Cir.2007) (applying Iowa law); In re Mastowski, 135 B.R. 1, 1 (Bankr.W.D.N.Y.1992) (applying New York law). In New Mexico, the buyer under a real estate contract is vested with equitable title in and has equitable ownership of the real estate. Garcia v. Garcia, 111 N.M. 581, 588, 808 P.2d 31, 38 (1991). Nesset would support a buyer of a homestead under a real estate contract vested with equitable title to the residence having a sufficient interest in the real estate to claim a homestead exemption. . The Bankruptcy Code defines a "lien” as a "charge against or interest in property to secure payment of a debt or performance of an obligation.” 11 U.S.C. § 101(37). That definition is consistent with the commonly *81accepted definition of lien. See Black’s Law Dictionary 933 (7th ed. 1999) (defining lien as "[a] legal right or interest that a creditor has in another’s property, lasting usu[ally] until a debt or duty that it secures is satisfied.”). An equitable lien in real property does not create an ownership interest in the property. Rushton v. Williams (In re Williams), 271 B.R. 663, 672 (Bankr.D.Utah 2001) (acknowledging that "no ownership interest can arise based on an equitable lien”). See also In re Polimino, 345 B.R. 708, 712 (10th Cir. BAP 2006) (applying Colorado law, finding that the grant of a lien, such as a mortgage, against real property does not convey a real properly interest) (citing Columbus Invs. v. Lewis, 48 P.3d 1222, 1225 (Colo.2002)). . See N.M.S.A.1978, § 42-10-9 (Cum. Supp. 2007) ( ... owned, leased, or being purchased by the person claiming the exemption.”). . See, In re Mahendra, 131 F.3d 750, 757 (8th Cir.1997); In re Irwin, 338 B.R. 839, 850 (E.D.Cal.2006); In re Thompson, 311 B.R. 822, 825 (Bankr.D.Kan.2004) (citation omitted). . No stipulation was made regarding the amount of Gould's judicial lien on March 8, 2010, the date the Debtors filed their bankruptcy petition. . See, e.g., Portillo v. Shoppie, 97 N.M. 59, 636 P.2d 878 (1981). . The application of an equitable lien against community property most often arises in connection with the division of property between spouses when a marriage is dissolved. For that reason, it is not clear whether such equitable liens are valid against third party creditors. .In re DeCarolis, 259 B.R. 467, 471 (1st Cir. BAP 2001) (citation omitted); In re Gregory Rockhouse Ranch, 380 B.R. 258, 265 (Bankr.D.N.M.2007); In re Thompson, 263 B.R. 134, 138 (Bankr.W.D.Okla.2001). . The amount of the equitable lien in favor of Eloy Martinez would be reduced to the extent his son’s monies were used to pay for the repairs or to the extent Rosina Martinez’s interest in community property was used to pay for the repairs. . When there are multiple liens encumbering a debtor's interest in real property, applying this simple formula can become complicated. See 11 U.S.C. § 522(f)(2)(B) ("In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph (A) with respect to other liens.”). Bankruptcy courts are divided as to whether the state law priority of liens must be maintained in determining impairment under 11 U.S.C. § 522(f)(2)(A). Compare In re Shafner, 165 B.R. 660, 662 (Bankr.D.Colo. 1994), aff'd on other grounds, 82 F.3d 426 (10th Cir.1996) (Table) (finding that when judicial liens are "sandwiched” between consensual liens and statutory liens, the court must preserve the state law order of priority, without regard to whether the liens are avoidable) with In re Trahan, 337 B.R. 448, 451 (Bankr.D.Conn.2006) (applying lien avoidance formula literally to include non-avoidable statutory liens, even though it may upset state law priority). The Tenth Circuit has not decided this issue. However, all Circuit courts that have considered this issue have determined that 11 U.S.C. § 522(f) must be applied literally, without regard to state law priorities. See, In re Kolich, 328 F.3d 406, 410 (8th Cir.2003) (holding that 522(f)(1)(A) disrupts state law lien priorities so that the computation of lien impairment which directs the court to add "all other liens” requires the court to include consensual mortgage liens that are junior to the judicial lien at issue); In re Brinley, 403 F.3d 415 (6th Cir.2005) (same); In re Taras, 131 Fed.Appx. 167, 170 (11th Cir.2005)(junior tax lien properly included in calculating impairment under § 522(f)). It is not necessary to decide that issue here. .See In re Farnsworth, 384 B.R. 842, 851 (Bankr.D.Ariz.2008); In re Wilding, 475 F.3d 428, 432 (1st Cir.2007) (the Bankruptcy Court must calculate the value of the lien as of the filing of the petition.); In re Pacheco, 342 B.R. 352, 357 (Bankr.D.N.M.2006) ("the value of the liens, the value of the property and the amount of the exemption are all measured as of the date of the filing of the petition.”) (citations omitted); In re Levinson, 372 B.R. 582, 586-87 (Bankr.E.D.N.Y.2007), aff'd, 395 B.R. 554 (E.D.N.Y.2008)(stating that “the petition date has been held to be the operative date for all § 522(f) determinations, including determinations regarding the value of the debtor’s property and the value of the liens.”) (citations omitted). . The parties stipulated that the amount of the judicial lien as of April 14, 2011 was $85,000 and that the lien amount bears interest at the rate of 8.75% per annum. No stipulation was made regarding the amount of the judicial lien on March 8, 2010, the petition date. There is no evidence of any post-petition payment on the judicial lien.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494684/	OPINION REGARDING THE PARTIES’ MOTIONS FOR SUMMARY JUDGMENT THOMAS J. TUCKER, Bankruptcy Judge. In this adversary proceeding, the Chapter 7 Trustee filed a complaint seeking to recover $119,000.00 from Debtor’s ex-wife (“Defendant”) under 11 U.S.C. § 542.1 This amount represents one-half of the $238,000.00 in total cash advances that Defendant obtained, before Debtor’s bankruptcy, on a Comerica Bank fine of credit. Debtor and Defendant were jointly liable on that line of credit, and it is secured by the home that Defendant was awarded under the 2004 judgment of divorce entered between Debtor and Defendant. The Trustee’s complaint alleges that the $119,000.00 is “property of the estate” either under the “community property” provisions of 11 U.S.C. § 541(a)(2), or under 11 U.S.C. § 541(a)(1), and thus recoverable under the turnover provisions of 11 U.S.C. § 542.2 The parties each filed motions for summary judgment.3 The Court held a hearing on the motions and took them under advisement. The Court concludes that: (1) the Trustee’s “community property” theory under 11 U.S.C. § 541(a)(2) fails; and (2) the Debtor never had any legal or equitable interest under 11 U.S.C. § 541(a)(1) in any portion of the cash advance proceeds that Defendant obtained on the line of credit. As a result, no portion of the cash advance proceeds were ever property of the bankruptcy estate. For these reasons, Defendant is entitled to summary judgment. I. Facts The following facts are undisputed. In 2003, while Defendant and Debtor were still married, they jointly obtained a line of credit from Comerica Bank with a limit of $238,000.00, which was secured by a mortgage on the marital home. On September 14, 2004, a default judgment of divorce (“Divorce Judgment”) was entered between Defendant and Debtor.4 The Divorce Judgment awarded Defendant the marital home “as her sole property” and provided that Defendant was to “hold [Debtor] harmless for same.”5 The Divorce Judgment said nothing about the Comerica Bank line of credit. The line of credit was not modified or terminated during the parties’ divorce. Almost five years later, on March 11, 2009, Defendant made a $225,000.00 draw on the line of credit.6 Then on June 3, 2009, Defendant made a $13,000.00 draw on the line of credit, bringing the total amount of cash advances Defendant obtained up to the $238,000.00 limit.7 These advances en278cumbered Defendant’s home under Comer-ica Bank’s mortgage, which was the only mortgage or lien on Defendant’s home. Debtor, by contrast, never made any draws on the line of credit, and did not receive any of the $238,000.00 in proceeds that Defendant borrowed. On February 25, 2010, Debtor filed a voluntary petition for relief under Chapter 7. On Schedule F, Debtor listed an unsecured claim of Comerica Bank in the amount of $238,138.00, based on Debtor’s joint liability with the Defendant on the line of credit.8 On the date Debtor filed his Chapter 7 petition, Defendant still had at least $225,127.55 of the $238,000.00 in cash advance proceeds.9 On July 2, 2010, Debtor obtained a discharge of his debts under 11 U.S.C. § 727. Debtor’s debt to Comerica Bank, based on the line of credit, was discharged. II. Jurisdiction This Court has subject matter jurisdiction over this adversary proceeding under 28 U.S.C. §§ 1334(b), 157(a) and 157(b)(1), and Local Rule 83.50(a) (E.D. Mich.). This is a core proceeding under 28 U.S.C. § 157(b)(2)(E). III. Discussion A. The parties’ positions The Trustee seeks summary judgment in the amount of $112,563.76.10 The Trustee argues that “under Bankruptcy Code § 541, half of the $225,127.55 ($112,563.76) represents property of the bankruptcy estate ... as community property [under § 541(a)(2)]”; as an equitable right under § 541(a)(1); “or on equitable grounds.” 11 The only alleged “equitable ground” the Trustee has asserted, as a basis for recovering half of the cash advance proceeds, is a theory of unjust enrichment.12 And, Trustee says, because the $112,563.76 is property of the bankruptcy estate, Defendant must turn it over under § 542.13 The Trustee’s primary argument is that Debtor’s unused contractual right to draw on the line of credit survived the divorce between Debtor and Defendant; that it was the Debtor’s “property;” and that the draws Defendant took from the line of credit were proceeds of that property. As a result, says the Trustee, one-half of the cash proceeds remaining as of the petition date, from the Defendant’s draws on the line of credit, became property of the Debtor’s bankruptcy estate. Defendant argues that the line of credit was not “community property,” within the meaning of § 541(a)(2).14 Defendant argues further that the line of credit, and its proceeds, were not property of the Debtor, so the proceeds of Defendant’s draws on the line of credit were not property of the bankruptcy estate within the meaning of § 541(a)(1).15 And Defendant argues that “an application of the principle of unjust enrichment would imply an agreement between the [Defendant and Debtor] that, 279upon entry of the divorce, and upon [Defendant] receiving sole title and ownership to the home, any rights to the line of credit which [Debtor] may have had were terminated.” 16 B. Discussion Section 541(a) of the Bankruptcy Code defines what is property of a debtor’s bankruptcy estate. It provides, in relevant part: (a) The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held: (1) Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case. (2) All interests of the debtor and the debtor’s spouse in community property as of the commencement of the case that is— (A) under the sole, equal, or joint management and control of the debtor; or (B) liable for an allowable claim against the debtor, or for both an allowable claim against the debtor and an allowable claim against the debtor’s spouse, to the extent that such interest is so hable. 11 U.S.C. § 541(a) (emphasis added). To determine what Debtor’s property rights were in the proceeds of the line of credit on the petition date, if any, the Court must look to Michigan law. See Butner v. United, States, 440 U.S. 48, 55, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979) (“Property interests are created and defined by state law.”). 1. Any property interest that Debtor had in the line of credit or its proceeds was not community property. The Court agrees with Defendant that under Michigan law, any property interest that Debtor had in the line of credit or its proceeds was not “community property” within the meaning of § 541(a)(2). “The term ‘community property is not defined in the [Bankruptcy] Code but has been interpreted as a term of art referring only to the means of holding marital property in those states that have adopted a community property system.” 5 Collier on Bankruptcy ¶ 541.11[1], at 541-61 n.2 (Alan N. Resnick & Henry J. Sommer, ed., 16th ed. rev. 2011) (citing cases); see also Anderson v. Conine (In re Robertson), 203 F.3d 855, 859 (5th Cir.2000); In re Ward, 837 F.2d 124, 125 n. 3 (3d Cir.1988); Johnson v. Fisher (In re Fisher), 67 B.R. 666, 668 (Bankr.D.Colo.1986). There are eight states that “follow a community property system in characterizing property acquired during marriage: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, and Washington.” M. Read Moore, Coming Soon to Your State: Community Property, A.L.I.A.B.A. Continuing Legal Education Course of Study (2004), available at West-law at SJ066 ALI-ABA 167, 170. And another two states, Alaska and Wisconsin, have a community property system that residents may opt into or out of. See id.; see also Thomas A. Jacobs, Community Property Law, 4 Ariz. Prac., Community Property Law § 1.2: Acceptance in the United States (3d ed.), available at Westlaw at 4 AZPRAC 1.2. By statute adopted in 1947, Michigan became a “community property” state. But the statute was repealed in 1948, and 280since that time Michigan has not been a “community property” state. See 1948 Mich. Pub. Acts, 1st Ex.Sess., No. 39, § 1 (repealing the Michigan Community Property Act, effective May 10, 1948); Former Mich. Comp. Laws Ann. § 557.251 (repealing the Michigan Community Property Act, former Mich. Comp. Laws Ann. §§ 557.201 through 557.220, subject to the saving provisions contained in Mich. Comp. Laws Ann. § 557.252 et seq.); Koebke v. La Buda, 339 Mich. 569, 64 N.W.2d 914, 916 (1954) (referring to “P.A.1948, 1st Ex. Sess., No. 39” as “the repealing act” with regard to “the community property act, P.A.1947, No. 317”); Stephanie Hunter McMahon, To Save State Residents: States’ Use of Community Property for Federal Tax Reduction, 1939-19Jp7, 27 Law & Hist. Rev. 585, 622-23 (2009) (“[o]nce the federal government extended income-splitting to all couples [in the Revenue Act of 1948], those states with newly enacted community property statutes rapidly repealed the provisions, highlighting that the allure of the community property regime had been intimately linked to its tax savings,” and that “Michigan led the way, repealing its statute within months of the enactment of the Revenue Act of 1948”). “Generally speaking, in community property jurisdictions, all property acquired by either spouse before marriage, or after separation, and property acquired during marriage by gift, bequest, devise or descent, is separate property, all other property, real or personal acquired by either spouse during the marriage is community property.” 5 Collier ¶ 541.11[1], at 541-61; see also In re Field, 440 B.R. 191, 194 (Bankr.D.Nev.2009) (footnote and citation omitted) (“Nevada is a community property state, which means that Nevada law presumes that all property not acquired by gift, bequest, or devise belongs to the ‘community’ created when two people marry.”); C.I.R. v. Chase Manhattan Bank, 259 F.2d 231, 239 (5th Cir.1958) (applying Texas law) (“All property accumulated during marriage is community property, unless it is received by gift, devise, or inheritance.”). Under community property law, “each spouse owns one-half of the [community] property [and] each spouse can dispose of only one-half of the couple’s community property at death.” M. Read Moore, Coming Soon to Your State: Community Property, A.L.I.-A.B.A. Continuing Legal Education Course of Study (2004), available at Westlaw at SJ066 ALI-ABA 167, 171. “Community property states usually also restrict one spouse’s ability to sell or give away community property during lifetime without the other spouse’s consent.” Id. “[Community property law ... affects: a. Spousal rights to dispose and manage property during life, at divorce, and at death; b. Creditor rights in property of spouses; and c. Estate, gift, and income taxes.” Id. at 169-70. Relying on In re Brollier, 165 B.R. 286, 289-90 (Bankr.W.D.Okl.1994), the Trustee argues that rather than construing “community property” in § 541(a)(2) as a term of art, “community property must be given its common meaning and applied to all cases nationwide, not just those cases arising in the nine states with community-property schemes.”17 In Brollier, the court discussed the meaning of “community property” under § 541(a)(2) and § 363(i), and held that the term should accorded its “plain meaning;” namely, “property owned in common by husband and wife, each having an undivided one-281half interest by reason of their marital status.” 165 B.R. at 290 (citing Black’s Law Dictionary 351 (5th ed. 1979)). The Court disagrees with Brollier. Initially, the Court notes two distinctions between Brollier and this case: (1) the Chapter 7 debtor in Brollier was still married to his non-debtor spouse when he filed his bankruptcy case, and no divorce proceedings were .pending; and (2) in Brollier, “it [was] not disputed that the [property] interest in question [was] property of the bankruptcy estate under § 541.” Brollier, 165 B.R. at 288. In addition, the Court finds the reasoning in Brollier unpersuasive. Brollier relied on the rule that “[w]ords are to be taken in their ordinary meaning unless they are technical terms or terms of art,” and then concludes, with very little analysis, that “community property” is not a term of art. See 165 B.R. at 289 (citation omitted) (emphasis added). And Brollier did not reference or discuss 11 U.S.C. § 101(7), and its legislative history. That section defines the term “community claim” as a “claim that arose before the commencement of the case concerning the debtor for which property of the kind specified in section 541(a)(2) of this title is liable, whether or not there is any such property at the time of the commencement of the case.” (Emphasis added). The Senate committee report on the meaning of “community claim” under this section, makes clear that “community property” under § 541(a)(2) is a term of art. It states, in relevant part: “Paragraph [ (7) ] defines ‘community claim’ for those eight states that have community property laws.” S.Rep. No. 95-989 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5808, 1978 WL 8531, 20. For these reasons, the Court declines to follow Brollier. 2. On the petition date, Debtor had no legal or equitable interest in the $238,000.00 in cash advances that Defendant had obtained under the line of credit. Even though any property interest the Debtor had in the line of credit or its proceeds was not “community property,” such interest would still be property of the estate under 11 U.S.C. § 541(a)(1), to the extent Debtor had any legal or equitable interest in it as of the petition date. The Trustee argues that on the petition date, Debtor “had a right to half the money that [Defendant] still held from the advances taken on the line of credit.”18 The Court disagrees. In 2003, when Debtor and Defendant were still married and they obtained the line of credit from Comeriea Bank, Debtor and Defendant each obtained the contractual right to make draws on the line of credit up to the limit of $238,000.00, and to use and dispose of the funds advanced as he or she chose. Either Debtor or Defendant could unilaterally exercise his or her right to draw on the line of credit. And both of them would be jointly liable for any debt incurred as a result of any cash advance obtained by either of them. Because the line of credit was secured by a mortgage on the marital home, Comeriea Bank had the right, in the event of a default, to foreclose on the mortgage to satisfy any debt incurred on the line of credit by either Defendant or Debtor. At the time of their divorce in 2004, neither Debtor nor Defendant had exercised his or her right to take any advances on the line of credit, and so there were no proceeds from the line of credit that be282came part of the marital estate to be divided into separate property of Defendant and Debtor. However, because the Divorce Judgment did not say anything about the line of credit, it is possible that after the divorce, Debtor retained the legal right to make draws on the line of credit, even though it was secured by the home that was awarded to Defendant as her sole property. After Defendant and Debtor divorced, only Defendant exercised her right to draw on the line of credit, by taking advances up to the contractual limit. Because the parties were divorced, Debtor no longer had any interest in any of Defendant’s property, including the $238,000.00 in cash advance proceeds Defendant obtained on the line of credit. Assuming that after the divorce, Debtor still retained the right to make draws on the line of credit, on the date of filing the petition, the only interest Debtor had in the line of credit was an unexercised right to make a draw on the line of credit up to the contractual limit. Because the contractual limit had already been reached, however, Debtor’s property interest in the line of credit, if any, was effectively worthless on the petition date. Any contractual right(s) of the Debtor under the Comerica Bank line of credit that the Trustee succeeded to, upon the filing of the bankruptcy petition, was worth $0.00. So there is nothing for the Trustee to recover from anyone, based on the line of credit. 3. The Trustee cannot demonstrate the necessary elements of his unjust enrichment theory. The Trustee cannot show that Defendant was unjustly enriched, or that Defendant was enriched at Debtor’s expense. The only common law or equitable theory the Trustee has argued as a basis for recovering half of the cash advance proceeds is, in substance, a theory of unjust enrichment. But this theory fails, because the Trustee cannot establish the required elements of an unjust enrichment claim under Michigan law. “Unjust enrichment is defined as the unjust retention of money or benefits which in justice and equity belong to another. No person is unjustly enriched unless the retention of the benefit would be unjust.” Tkachik v. Mandeville, 487 Mich. 38, 790 N.W.2d 260, 266 (2010) (internal quotation marks and citations omitted). Even though no contract may exist between two parties, under the equitable doctrine of unjust enrichment, “[a] person who has been unjustly enriched at the expense of another is required to make restitution to the other.” The remedy is one by which the law sometimes indulges in the fiction of a quasi or constructive contract, with an implied obligation to pay for benefits received to ensure that exact justice is obtained. The essential elements of a quasi contractual obligation, upon which recovery may be had, are [1] the receipt of a benefit by a defendant from a plaintiff, [2] which benefit it is inequitable that the defendant retain. Michigan Educ. Employees Mut. Ins. Co. v. Morris, 460 Mich. 180, 596 N.W.2d 142, 151 (1999) (internal quotation marks and citations omitted). “The process of imposing a ‘contract-in-law’ or a quasi contract to prevent unjust enrichment ... should be approached with some caution.” B & M Die Co. v. Ford Motor Co., 167 Mich. App. 176, 421 N.W.2d 620, 622 (1988). The Trustee argues that both of the elements of an unjust enrichment claim are satisfied under the facts of this case. The Trustee argues that Defendant received the following benefit from Debtor: 283“she used his good name and credit to obtain and maintain a line of credit, which she kept even after they divorced. She then. used that line of credit to obtain money for herself.” 19 The Trustee then argues that it was unjust for Defendant to retain all of the cash advance proceeds because “[Debtor] has suffered an inequity because he was saddled with a debt, from which he obtained no benefit.”20 The Trustee argues further that because Defendant was unjustly enriched, the Trustee, as the successor to Debtor’s rights, is entitled to restitution in the amount of half of the cash advance proceeds.21 Arguably, at least, Defendant did receive a sort of benefit from Debtor, in being able to draw on the line of credit. But such benefit cannot be measured by the amount of money Defendant was able to borrow (or as one-half of that amount). This is because Defendant paid her own price for this loan — namely, she saddled herself with a debt of $238,000, and encumbered her own home with a mortgage debt of $238,000. Whatever the value of any “benefit” Defendant obtained from Debtor, however, the Court must reject the Trustee’s argument that Defendant’s retention of such benefit is unjust. And it is not unjust for Defendant to retain all of the cash advance proceeds. This is so for two reasons: first, because Defendant’s draws on the line of credit were secured by property belonging only to the Defendant (her home); and second, because Debtor ultimately suffered no quantifiable injury as a result of Defendant’s drawing on the line of credit. As to the first of these points, the Court agrees with Defendant’s argument that: an application of the principle of unjust enrichment would imply an agreement between the parties that, upon entry of the divorce, and upon [Defendant] receiving sole title and ownership to the home, any rights to the line of credit which [Debtor] may have had were terminated. To hold otherwise would allow [Debtor] to effectively nullify [Defendant’s] property rights in the home by unilaterally drawing on the line of credit and depleting the equity. In the context of this case, requiring the Defendant to pay the Trustee half of the line of credit proceeds would result in a significant payment of Debtor’s debts at the expense of Defendant. She would still have the entire mortgage to pay.22 The second point above, that Debtor did not suffer any quantifiable injury because of Defendant’s draw on the line of credit, is established by the following: First, Comerica Bank never sought recovery from Debtor of any amounts advanced under the line of credit. Second, beginning when Debtor filed his bankruptcy petition, the automatic stay under 11 U.S.C. § 362(a) prevented Comerica Bank from taking any collection action against Debt- or. Third, on July 2, 2010, Debtor received a discharge of his debt to Comerica Bank, so the bank can no longer seek to collect from Debtor. Fourth, the Trustee cannot establish, and does not argue, that Debtor’s liability to Comerica Bank on the line of credit forced Debtor to file bankruptcy. At the hearing on the motions, Trustee’s counsel admitted that he could not say that the debt to Comerica Bank precipitated Debtor’s bankruptcy filing, because Debtor had substantial other 284debts. And Debtor’s Schedule F supports this point — it shows that Debtor had a total of $487,573.21 in unsecured debt, of which $249,573.21 was unrelated to the Comerica Bank debt.23 For these reasons, the Court concludes that the Trustee cannot prevail on his unjust enrichment theory. 4. The “hold harmless” provision in the parties’ 2004 divorce judgment does not support the Trustee’s position. In the Trustee’s reply brief, under a heading labeled, “B. When he filed for bankruptcy, [Debtor] had an equitable right to half the money,” the Trustee argues as follows: Arguably, the “hold-harmless” language in the [D]ivorce [Jjudgment created an express contract or an implied-in-fact contract between [Defendant] and [Debtor]. And to hold [Debtor] harmless, [Defendant] should now turnover half the money. As things stand, however, [Defendant] is not holding [Debtor] harmless. Instead, as she herself points out, this is a classic case of unjust enrichment.24 The “hold-harmless” language in the Divorce Judgment that the Trustee refers to is in the section entitled “Property Settlement,” and states: “IT IS FURTHER ORDERED that the Defendant shall have the marital home as her sole property and hold Plaintiff [ (the Debtor) ] harmless for same.”25 The Court must reject the Trustee’s argument. First, it is not at all clear that the “hold harmless” provision of the Divorce Judgment applies to the debt owed to Comerica Bank on the line of credit. Second, even if this provision could be read to apply to the line of credit debt, it does not logically follow that holding the Debtor “harmless” with respect to such debt requires that Defendant turn over half of the proceeds she obtained from the line of credit. The Trustee fails to explain why this is so, or to cite any authority for such a proposition. Any “harm” Debtor may have suffered is not necessarily equivalent to the amount of money Defendant borrowed. Third, and most importantly, and as explained above, the Debtor has not been harmed by the Defendant’s draws on the line of credit. So the “hold harmless” provision does not apply here. 5. The Trustee’s oral request for leave to amend his Complaint must be denied. During the hearing on the summary judgment motions, the Trustee requested that if the Court rules against him on his legal theories pled so far, the Court grant him leave to amend his complaint. If the Court rules that the cash advance proceeds are not property of the bankruptcy estate, the Trustee wants an opportunity to allege any cause of action under Michigan law that Debtor may have had against Defendant on the petition date. The Trustee argues that, as successor in interest to the rights and interests of Debtor, he may have unspecified claims under Michigan law for the harm Debtor suffered from Defendant’s drawing on the line of credit. The Court has now ruled that no part of the cash advance proceeds are property of the bankruptcy estate. But the Defendant opposes the Trustee’s request for leave to amend his complaint, arguing that it is 285untimely, and also arguing, at least implicitly, that any amendment would be futile. The Court concludes that the Trustee’s delay in making his request has not prejudiced the Defendant in a way that would justify denying leave to amend. But the Court will deny the Trustee’s request, because amendment would be futile. Under Fed.R.Civ.P. 15(a)(2), which applies in this adversary proceeding under Fed.R.Bankr.P. 7015, “[t]he court should freely give leave [to amend a pleading] when justice so requires.” The court in United States v. Vehicle 2007 Mack 600 Dump Truck, 680 F.Supp.2d 816, 826-27 (E.D.Mich.2010) described the factors that courts consider in deciding whether to grant leave to amend a pleading: Granting or denying leave to amend a pleading is within the trial court’s discretion. See Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). A party seeking to amend an answer “must act with due diligence if it intends to take advantage of the Rule’s liberality.” United States v. Midwest Suspension & Brake, 49 F.3d 1197, 1202 (6th Cir.1995). A court may deny leave to amend when a party unnecessarily delayed in seeking amendment, thereby causing prejudice to the other party or unduly delaying the litigation. Phelps v. McClellan, 30 F.3d 658, 662-63 (6th Cir.1994) (citation omitted). “In determining what constitutes prejudice, the court considers whether the assertion of the new claim or defense would: require the opponent to expend significant additional resources to conduct discovery and prepare for trial; significantly delay the resolution of the dispute; or prevent the plaintiff from bringing a timely action in another jurisdiction.” Id. However, delay alone is insufficient to deny the proposed amendment. Robinson v. Michigan Consol. Gas Co. Inc., 918 F.2d 579, 581 (6th Cir.1990) (citations omitted). Finally, although liberal, it is well established that justice does not require the Court to grant leave to amend a pleading if to do so would be futile. See In re Ford Motor Co. Securities Litigation, Class Action, 381 F.3d 563, 574 (6th Cir.2004). a. Undue delay The following background is relevant to the timeliness of the Trustee’s oral request for leave to amend his complaint. The Trustee filed this adversary proceeding on February 3, 2011. The Court entered a scheduling order on March 28, 2011. In that order, the Court adopted the parties’ agreement regarding amendment of the pleadings — namely, that each party could amend his/her pleading without further Court order, until May 15, 2011. After that date, any amendments would require consent of the opposing party, or Court approval.26 The Court’s scheduling order also set deadlines of July 31, 2011 for the parties to complete all discovery, and August 15, 2011 for the parties to file any potentially dispositive motions. The order scheduled a trial date of September 6, 2011. After the Trustee filed his summary judgment motion on August 15, 2011, the Court held a status conference on August 22, 2011, and issued a further scheduling order. That order did not change any of the pretrial deadlines, except that it granted the Defendant leave to file her own summary judgment motion by August 22, 2011, one week after the original deadline *286for dispositive motions.27 The order also set a briefing and hearing schedule for the summary judgment motions, and adjourned the final pretrial conference and trial dates to accommodate that schedule. It was not until the October 5, 2011 hearing on the summary judgment motions that the Trustee first made his oral, conditional request for leave to amend his complaint. And the Trustee’s oral request was not accompanied by any proposed amended complaint. Nor did the Trustee describe any particular claim or legal theory that he wanted to add by amendment, if the Court ruled against him on his property-of-the-estate theories. Arguably, the Trustee’s delay in seeking leave to amend his complaint was unnecessary delay, but such delay has not caused the Defendant to suffer prejudice of the any of the types described in United States v. Vehicle 2007 Mack 600 Dump Truck, quoted above. That is, the Court cannot say that: “the assertion of the new claim or defense would: require the opponent to expend significant additional resources to conduct discovery and prepare for trial; significantly delay the resolution of the dispute; or prevent the plaintiff from bringing a timely action in another jurisdiction.” 680 F.Supp.2d at 827 (citation omitted). And “delay alone is insufficient to deny the proposed amendment.” Id. So the Court will not deny leave to amend on the ground of undue delay. b. Futility “[I]t is well established that justice does not require the Court to grant leave to amend a pleading if to do so would be futile.” United States v. Vehicle 2007 Mack 600 Dump Truck, 680 F.Supp.2d at 827 (citation omitted). In making his conditional, oral request for leave to amend his complaint, the Trustee has not identified any particular claim that he would add against Defendant. And for reasons discussed in this opinion, none of the legal theories that the Trustee has pled or argued so far (either in writing or in the summary judgment motion hearing) would support any meritorious cause of action against Defendant. As a result, the Court concludes that amendment would be futile. The Court will deny the Trustee’s request for leave to amend for this reason. IV. Conclusion For the reasons stated in this opinion, the Court will enter an order granting Defendant’s motion for summary judgment; denying the Trustee’s motion for summary judgment; and denying the Trustee’s oral motion for leave to amend his complaint. . Compl. (Docket # 1) at 3. . See Compl. (Docket # 1 at 3 ¶¶ 23-24). . Docket## 15, 19. . See Divorce Judgment (Ex. 1 of Compl. (Docket # 1)). . Id. at 4. . Ex. 2 of Compl. (Docket # 1) at pdf. p. 10. . See Ex. 3 of Compl. (Docket # 1) at pdf. p. 11. . Docket # 13 in main bankruptcy case (Case No. 10-45599) at 12. . See Ex. 3 of Pl.'s Br. in Supp. of Pl.’s Mot. for Summ. J. (Docket #15). . Pl.’s Mot. for Summ. J. (Docket # 15) at 4. . Id. at 4; Pl.'s Br. In Supp. of Mot. for Summ. J. (Docket # 15) at 5. . See Pl.’s Combined Resp. to Def.’s Mot. for Summ. J. and Reply in Supp. of Pl.’s Mot. for Summ. J. (Docket # 27, "Plaintiff’s Reply”) at 1, 5. . Id. . Def.’s Br. in Supp. of Mot. for Summ. J. (Docket # 20) at 2-3. . See id. . Id. at 5. . PL's Br. in Supp. of Mot. for Summ. J. (Docket # 15) at 4. . PL's Br. in Supp. of Mot. for Summ. J. (Docket # 15) at 3. . Pl.'s Reply (Docket # 27) at 5. . Id. .Id. . See Def.’s Br. in Supp. of Mot. for Summ. J. (Docket # 20) at 5. . See Docket # 13 in Case No. 10-45599. . Docket # 27 at 4-5. . Divorce Judgment (Ex. 1 of Compl.) at 4. . See Adversary Proceeding Scheduling Order (Docket # 7) at 1, Section I; Report of Parties’ Rule 26(f) Conference (Docket # 6) at 2. . Further Scheduling Order (Docket # 17).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494685/	MEMORANDUM OPINION AUDREY R. EVANS, Bankruptcy Judge. Now before the Court is the Complaint to Determine Dischargeability (“Complaint”) filed by the Plaintiffs, Stephen E. Myers and Siobhan Rigney-Myers, on October 5, 2010. The Defendant, Richard W. Dewese, Jr., fried his Answer to Complaint to Determine Dischargeability (“Answer”) on November 2, 2010.1 Prior to the trial on this matter, the Court entered an Order Denying Motion for Summary Judgment (“Order Denying Summary Judgment”), and Order Denying Jury Demand (“Order Denying Jury Demand”) in this case, each of which contains statements of the facts and/or law relevant to this determination. On February 15, 2012, this matter came before the Court for trial. For the reasons further explained below, the Court finds in favor of the Defendant. Summary of Legal Issues and Relevant Facts2 In the Order Denying Summary Judgment, the Court established the two issues that were to be determined during the trial: 1) whether the Defendant was liable for a debt to the Plaintiffs for fraud, and 2) whether that debt, if owed, should be excepted from the Defendant’s discharge pursuant to 11 U.S.C. § 523(a)(2)(A). That Order also made clear that a critical issue to both of those determinations was whether the Defendant intended to deceive the Plaintiffs by including charges for certain flooring materials on two specific invoices. After a trial on the merits, and following a thorough review of the evidence submitted, the Court is firmly convinced that the Defendant did not have an intent to deceive the Plaintiffs, and is not liable for fraud. The Plaintiffs, Stephen E. Myers and Siobhan Rigney-Myers, entered into a contractual agreement with Trade Seasons, L.L.C., to perform renovations on a property they owned in Maumelle, Arkansas. The Plaintiffs did not have a contractual agreement with the Defendant, Mr. Dewese. Thus, Mr. Dewese is only liable for a debt to the Plaintiffs if he is personally liable to them for fraud. The Plaintiffs’ allegations of fraud in this case are based on two invoices — Invoice No. 395 and Invoice No. 398 — that included charges for carpet, tile, and slate materials. The Plaintiffs assert that those charges were fraudulent because a provision in the contract states that Trade Seasons would only charge the Plaintiffs for completed work. Contrary to that contract provision, however, Mr. Dewese had not purchased the carpet, tile, and slate materials when he submitted the invoices for those materials, nor did he ever purchase the materials.3 The Plaintiffs assert 316that Mr. Dewese acted fraudulently with an intent to deceive them by including the flooring materials on the invoices. Viewing the allegations with only those facts in mind, the Plaintiffs make a compelling argument. The other facts and evidence brought to light during the trial, however, make clear that Mr. Dewese had no deceptive intent. At the time of the construction project, the Plaintiffs lived in California and oversaw the construction project from there. The Plaintiffs selected flooring materials for the project from materials available in California, but those exact flooring materials were not available in Little Rock. Because of the unavailability of the materials, Mr. Dewese attempted to match the selected materials with comparable materials in Little Rock, but that process required further approvals from the Plaintiffs. At one point, Mrs. Rigney-Myers came to Little Rock to check on the progress of the project, and to view what materials were available in the area. During her visit, Mrs. Rigney-Myers paid both of the invoices containing charges for the flooring materials. Mrs. Rigney-Myers paid one of the invoices upon arrival in Little Rock, and the other before she left a few days later. Mrs. Rigney-Myers testified that she knew Mr. Dewese had not purchased the slate and tile materials on Invoice No. 398 at the time she paid it. Additionally, the reasonable inference from Mrs. Rig-ney-Myers’ testimony was that at the time she paid Invoice No. 395, which contained the charges for carpet, she knew that Mr. Dewese had not yet purchased the carpet because she had not yet approved the carpet. The fact that Mrs. Rigney-Myers knew that Mr. Dewese had not purchased the materials when she paid the invoices standing alone provides a complete defense to the accusation that Mr. Dewese intended to deceive the Plaintiffs. Additionally, Mr. Dewese’s testimony makes clear that the flooring materials were included in the invoices as part of a logical, client-driven decision, and the Court finds this explanation credible. There were limited windows of opportunity in which to install the flooring materials. The first of those windows was coming to a close around the time Mrs. Rigney-Myers visited Little Rock. The evidence showed that if Mrs. Rigney-Myers had approved the flooring materials during her visit, then Mr. Dewese was going to act quickly to install the materials. Mr. Dewese included the flooring on the invoices in an effort to complete those tasks within the earlier time-frame for installation, and Mrs. Rigney-Myers knew that was the reason Mr. Dewese included the materials on the invoices. However, when the Plaintiffs did not make a final selection on the flooring materials, the window of opportunity closed. For that reason, Trade Seasons held the payments in the Plaintiffs’ account to obtain the flooring materials later in the project. The flooring materials issue provided the “fuse” for the real problem with this construction job, but the real problem resulted from Mrs. Rigney-Myers keeping information from her husband, and asking Mr. Dewese to do the same. That problem percolated into a series of miscommu-nications that ultimately resulted in the termination of the construction project and this lawsuit. Although Mr. Dewese may have furthered that lack of communication by complying with Mrs. Rigney-Myers request, none of his actions were taken with an intent to deceive, and as a result, Mr. Dewese is not liable for fraud. 317 Analysis Generally, the owner or agent of a limited liability company is not liable for the debts of that company. Ark.Code Ann. § 4-32-304 (“[A] person who is a member, manager, agent or employee of a limited liability company is not liable for a debt, obligation, or liability of the limited liability company, whether arising in contract, tort, or otherwise-”). However, the protections afforded to a limited liability company do not shield the owner or agent from liability for conduct that would justify a finding of fraud against that person individually. See 54 C.J.S. Limited Liability Companies § 50 (“Members or managers are not protected from personal liability for their own wrongs, such as torts_”)• Under Arkansas law, a cause of action for fraud requires proof of five elements: (1) a false representation of material fact; (2) knowledge that the representation is false or that there is insufficient evidence upon which to make the representation; (3) intent to induce action or inaction in reliance upon the representation; (4) justifiable reliance on the representation; and (5) damage suffered as a result of the reliance. Quality Foods, Inc. v. Donckers (In re Donckers), Case No. 5:05-bk-75192, Adv. No. 5:05-ap-07158, slip op. at 7 (E.D.Ark.Apr. 26, 2006) (citing Knight v. Day, 343 Ark. 402, 405, 36 S.W.3d 300, 302-03 (2001)). As stated above, the critical requirement of fraud that the Plaintiffs must show in this case is that the Defendant acted with the requisite intent when he included the flooring materials on the invoices. The Plaintiffs relied on three key pieces of evidence to establish intent: (1) the invoices; (2) a statement in an email from Mr. Dewese that “we have the carpet”; and (3) a spreadsheet listing the flooring materials under the category of “actual work completed.” The Court finds that the Plaintiffs have failed to establish the element of intent. First, with regard to the invoices, the evidence shows that the parties did not strictly follow the payment provision of the contract. Instead, at least with regard to Invoice No. 395 and Invoice No. 398, the parties agreed to a different course for invoicing and payment. Mrs. Rigney-Myers was aware that Mr. Dewese had not purchased the flooring materials at the time she paid the invoices. She specifically acknowledged this in her testimony. Mrs. Rigney-Myers testified that she knew that Mr. Dewese had not purchased the slate and tile materials on Invoice No. 398 at the time she paid that invoice. Additionally, it was clear from her testimony that Mrs. Rigney-Myers knew Mr. Dewese had not purchased the carpet at the time she paid Invoice No. 395 because she knew that he had not located, and the Plaintiffs had not approved, a suitable match for the carpet they had picked out in California. Mr. Dewese testified that he was still trying to find a way to satisfy the Plaintiffs’ demands for the specific carpet at the time Mrs. Rigney-Myers paid the invoice. Further, by her own testimony, Mrs. Rigney-Myers was in Little Rock when she hand-delivered the check for Invoice No. 395 for the specific purpose of checking on the progress of the project, and the Court does not accept Mrs. Rig-ney-Myers’ testimony that she thought Mr. Dewese had already purchased the carpet. Thus, the Court does not accept the inclusion of the materials on the invoices as evidence that Mr. Dewese intended to deceive the Plaintiffs. Mr. Dewese intended that the Plaintiffs pay the charges on the invoice, but he also intended to locate, purchase, and install the flooring materials. Mr. Dewese’s intent was 318focused on keeping the construction project on schedule and getting the flooring materials installed within a specific window of opportunity, not to fraudulently deceive the Plaintiffs into making the payments. Evidence provided during the hearing of a severe lack of communication between the parties furthers this conclusion. There were some communication problems between the Plaintiffs and the Defendant, but the more glaring communication problem was between the two individual Plaintiffs. Mrs. Rigney-Myers told Mr. Dewese and Trade Seasons one thing, while withholding that information from Mr. Myers, and asking that Mr. Dewese and Trade Seasons do the same. For instance, an email submitted to the Court shows that Mrs. Rigney-Myers requested that Trade Seasons conceal certain aspects of the renovation project from her husband. At trial, the Defendant testified that many of the conflicts were brought about by his efforts to abide by Mrs. Rigney-Myers’ requests. The Court found the Defendant’s testimony entirely credible, and that it provided a logical explanation that tied all of the exhibits and evidence into one reasonable believable narrative. Additionally, the Court believed Mrs. Rigney-Myers encouraged Mr. Dewese to participate in her strategy, which can be accurately described as a desire to have information parsed out to Mr. Myers in increments to prevent him from reacting negatively to her decisions regarding the renovation project. While these issues may have resulted in some confusion between Trade Seasons and Mr. Myers, they are not evidence that Mr. Dewese intended to deceive the Plaintiffs. Further, the Court found particularly convincing the testimony regarding the schedule for completion of the project. There were complications in obtaining particular materials that the Plaintiffs wanted in the house, and further approval by the Plaintiffs was required before the carpet, tile, and slate materials could be installed. It became clear from the testimony that Mr. Dewese, on behalf of Trade Seasons, was working hard to ensure that the flooring was completed within a certain window of time, so as to keep the project moving and in line with the budget for the renovations. It was Mr. Dewese’s efforts toward that end (toward fulfilling the Plaintiffs’ demands) that motivated the billing of the carpet, slate, and tile materials. After Mrs. Rigney-Myers had already paid the invoices, it became evident that the flooring tasks could not be completed in the desired time-frame. Thus, Trade Seasons held the funds for purchase of the materials at the time of the actual installation, and acknowledged that the Plaintiffs had paid for those materials in all representations concerning the materials from that point forward. Finally, the Plaintiffs relied on several additional pieces of evidence to support their assertions that Mr. Dewese intended to deceive them through the representations in the invoices. The Plaintiffs relied heavily on an email to the Plaintiffs from Mr. Dewese that states “we have the carpet ready to put in.” The Plaintiffs assert that this email shows that Mr. Dewese had intended to deceive them all along. In other words, the Plaintiffs assert that Mr. Dewese must have intended to deceive them with the representations in the invoices because he continued to assert that he had the carpet. However, to make this argument, the Plaintiffs lift this one sentence out of the context of the email, and out of the context of the circumstances surrounding it. The remainder of the email reads: “I want to overnite a sample to you just to make sure it is correct, since I have never seen it. If it is OK, then we’ll lay it. I would hate to lay carpet and 319it be wrong....” If Mr. Dewese intended to deceive the Plaintiffs into thinking he had already purchased the carpet, it is unlikely that he would tell them in the next sentence that he had never seen the carpet. The statements in this email, when read as a whole, only make sense when viewed in light of the surrounding circumstances. The Court believes Mr. Dewese’s testimony that the purpose of his statement was to acknowledge that the Plaintiffs had fully paid for the carpet, that all arrangements were made to have the carpet delivered and installed, and that the only remaining hurdle was the Plaintiffs’ approval. Similarly, the Plaintiffs relied on a statement in a spreadsheet that listed the carpet, tile, and slate under a column labeled actual work completed. Mr. Dewese testified that those items were in that category only because the Plaintiffs had already paid for the materials. The purpose of the spreadsheet was to let the Plaintiffs know how the project costs were accumulating, in comparison to the original plans for the project. Thus, it made sense for Mr. Dewese to include the cost of the materials in the “actual work completed” category because Trade Seasons already had the money for those materials. The spreadsheet is evidence that Trade Seasons had appropriately credited the Plaintiffs’ payments for the materials to the account. Based on the evidence, the Court finds that the statements in the email and the spreadsheet do not support a conclusion that Mr. Dewese included the charges for the materials on the invoices with an intent to deceive the Plaintiffs. Therefore, the Court finds that Mr. Dewese did not intend to deceive the Plaintiffs by including the carpet, tile, and slate materials in the invoices, and as a result, the Plaintiffs have failed to prove that the Defendant is personally liable to them for fraud. Because the Court finds that the Defendant did not intend to deceive the Plaintiffs, even if liability could be established, the debt would not be excepted from discharge under 11 U.S.C. § 523(a)(2)(A). IT IS SO ORDERED. . The Complaint and Answer were amended on November 10, 2010, and November 22, 2010, respectively. . The Court incorporates the facts and law as established in the Order Denying Summary Judgment and Order Denying Jury Demand as further support for this Memorandum Opinion. .It is important to keep in mind that the cause of action in issue is fraud, not breach of contract. There was no contract between the *316Plaintiff and the Defendant, and the Court makes no determination as to whether Trade Seasons was in breach of its contract with the Plaintiffs.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494686/	OPINION 1 ROBERT N. OPEL, II, Bankruptcy Judge. This matter concerns claims litigation in the above Chapter 12 case. Scarff Bros., Inc. filed an Amended Proof of Claim in the amount of $878,249.11. The Debtors objected to the Proof of Claim on several bases. For the reasons stated below, I will overrule the claim objections and allow the amended claim as filed. I. JURISDICTION This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 157(b)(2). This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B) and (C). II. FACTS Thomas H. McElwee, Jr. and Becky S. McElwee, his wife, family farmers (“Debtors”), filed a voluntary Chapter 12 petition on March 30, 2010. On July 9, 2010, Scarff Bros., Inc. filed Proof of Claim Number 11, the claim asserts a secured claim in the amount of $878,249.11. The Original Proof of Claim Number 11-1 consists of the one-page Official Form B10 and a one-page exhibit which is a numerical itemization of the amounts claimed. On July 9, 2010, Scarff Bros., Inc. filed an Amended Proof of Claim to Claim Number 11-2. The Amended Claim consists of the Official Form B10 and it continues to assert a secured claim in the amount of $878,249.11. The Amended Proof of Claim differs from the Original Claim only with respect to its attachments. The Amended Proof of Claim includes seven exhibits; in addition to the claim itemization, the Amended Claim attaches certain loan documents between the Debtors and Scarff Bros., Inc. The Amended Proof of Claim is hereinafter referred to as “Claim 11-2”. The Debtors objected to Claim 11-2 on October 21, 2010 (“Claim Objection”). The Claim Objection interposes several objections including objections to the amount of Claim 11-2, the default interest rate, and the extent to which the claim is a secured claim. Finally, the Claim Objection contains an eleventh paragraph which states: Debtors are entitled to a setoff, or, alternatively, hold a counterclaim against Scarff Brothers, for any sums remaining due and owing Scarff Brothers (after application of all credits to which Debtors are due), because of the aforesaid defaults by this Claimant. The amount of this-setoff, or counterclaim, is presently being calculated by Debtors, and that information will be available at a subsequent hearing to adjudicate these objections. Debtors will advise counsel for Scarff Brothers of the amount of the 570setoff or counterclaim due Debtors as soon as that information is available. Three days of testimony were taken regarding the Claim Objection. Briefs were filed by Scarff Bros., Inc. (“Claimant”) in support of Claim 11-2 and by the Debtors in support of the Claim Objection, respectively. The hearing record shows that the Debtors have been farming since 1985. In that year, they purchased a 28.43-acre parcel which is improved, in part, with the Debtors’ residence (“Jumper Road Property”). In 1999, the Debtors purchased 104.24 acres, which property is improved with an older two-story farmhouse, a barn, and other outbuildings (“Big Spring Road Property”). In 2003, the Debtors purchased a 7.49-acre parcel, improved with a brick dwelling, a barn, garage, and other outbuildings (“Wayne Road Property”). Much of the Debtors’ farming operations has been devoted to the purchase and sale of beef cattle. Mr. McElwee testified that he has purchased and sold beef cattle since 1980. The Debtors’ farming operation has included buying cattle from others, raising cattle for others, and raising cattle for their farm. The Debtors’ method of cattle raising has changed over the course of time. Pri- or to 2003, the Debtors generally purchased a cow weighing 300 to 400 pounds, raised it, and sold it when its weight reached the 1,200- to 1,400-pound range. Purchasers from the Debtors during that period of time were packing houses which slaughtered the cattle for their meat. The Debtors also operated a “receiving station”. They took possession of other farmers’ calves at the receiving station and transported them to purchasers on a commission basis. In 2003, the Debtors began business dealings with the Claimant. Their business dealings continued and evolved over the course of several years. Part of the business relationship included the Claimant making a series of loans to the Debtors. The loans were evidenced by promissory notes in the following amounts: (1) a note dated July 31, 2003, in the face amount of $200,000.00; (2) a note dated November 24, 2003, in the face amount of $300,000.00; (3) a note dated June 11, 2004, in the face amount of $500,000.00; and, (4) a note dated March 11, 2005, in the face amount of $750,000.00. The last three Notes were refinancings of the earlier obligations. For example, the $300,000.00 Note refinanced the outstanding balance on the $200,000.00 Note and made the difference available to the Debtors as new money. As noted above, Claim 11-2 is in the amount of $878,249.11. The Debtors used a portion of the loan proceeds obtained from the Claimant to remodel an existing barn into the wet barn and to construct a new feeder barn on the Jumper Road Property. No comprehensive agreement which spelled out the business arrangements between the Debtors and the Claimant was introduced into evidence. I do note that, absent a written agreement with specified terms, it is more difficult for a court to discern the parties’ intentions and to give effect to such intentions. I find that there were two essential relationships between the Debtors and the Claimant. First, the Debtors borrowed money under a loan facility pursuant to the terms of the promissory notes and other loan documents. Second, the parties entered into several contracts concerning the raising of calves. Beginning in 2003, the Debtors would purchase one- or two-day old calves which would generally each weigh 80 to 100 pounds (“New Calves”). New Calves were originally raised by the Debtors in a “wet barn” on their property where they were fed a milk diet. Grain was gradually intro-571dueed to the New Calves’ diet; on average, after six to eight weeks, such calves would then be on a grain diet and they would be moved to a second barn — also on the Debtors’ property — known as a “feeder barn”. Grain-fed calves generally remained in the feeder barn until they were 18 to 20 weeks old and weighed approximately 350 pounds (“Middling Calves”). I find that the Claimant agreed to purchase the Middling Calves from the Debtors at a purchase price which was periodically agreed to by the parties. After the Claimant purchased the Middling Calves from the Debtors, it would ship them to western feed lots to raise them to a butchering weight, generally, 1200 to 1400 pounds each. Hereafter, I shall refer to this arrangement as the “First Agreement”. After August, 2005,1 find that the Debtors and the Claimant entered into a second contractual arrangement. The Debtors then agreed to raise calves, which were owned by the Claimant, pursuant to the terms of several written Calf Feeding Contracts. The Debtors received a fee to feed a calf to a target weight of 350 pounds. Adjustments were made to the agreed to fee to compensate the Claimant for any calves which were not returned to it because of mortality or other cause. Similarly, the agreed to fee was adjusted upward or downward for each pound by which the weight of the subject calf was over or under the 350-pound target weight. I find that the arrangement between the parties based upon the series of Calf Feeding Contracts ended no later than January 2007. This arrangement shall hereinafter be referred to as the “Second Agreement”. After January 2007, the parties’ business dealings evolved into a third arrangement. Under this agreement, the Debtors would continue to raise New Calves which were owned by the Claimant. However, under this arrangement, the Debtors were paid only for their labor in raising New Calves to the agreed to target weight. Under this arrangement, the Claimant paid a per head daily charge; it also agreed to pay for all other expenses, including feed and veterinary expenses. Hereinafter, I will refer to this as the “Third Agreement”. I also find that the last cattle placed by the Claimant with the Debtors left their farm in May 2008. After the parties had submitted their Briefs concerning Claim 11-2 and the Claim Objection, the U.S. Supreme Court decided the case of Stern v. Marshall, — U.S. -, 131 S.Ct. 2594, 180 L.Ed.2d 475 (U.S.2011). Because the Claim Objection included what was denominated a setoff or counterclaim, I asked the parties to submit briefs concerning the applicability of Stern v. Marshall to the case at bar. The parties submitted Briefs on this issue and, on March 15, 2012, I heard oral argument on this question. The Claim Objection to Claim 11-2 is now ripe for decision. III. DISCUSSION A. Bankruptcy Court’s Authority to Enter Final Judgment on the Claim Objection Stern v. Marshall, — U.S. -, 131 S.Ct. 2594, 180 L.Ed.2d 475 (U.S.2011) considered the following question: Did Congress exceed its Constitutional authority when it gave the Bankruptcy Court, an Article I court, the ostensible authority to render final judgments on counterclaims-based on state law-against a claimant who filed a proof of claim in the bankruptcy case? The Supreme Court ultimately answered this question in the affirmative; finding that the subject counterclaim would not necessarily be resolved in ruling on the subject proof of claim. Stern v. Marshall, to say the least, has a convoluted procedural history. I will at572tempt to offer a broad brush outline of that procedural history. Vickie Marshall a/k/a Anna Nicole Smith (“Vickie”), filed a Chapter 11 bankruptcy in the Central District of California. Prior to the bankruptcy filing, Vickie was briefly married to J. Howard Marshall, II (“J. Howard”). A little more than thirteen months after his marriage to Vickie, on August 4, 1995, J. Howard died. J. Howard had made substantial gifts to Vickie during their courtship and marriage, but he did not include her in his will. The ultimate beneficiary of J. Howard’s estate plan was one of his sons, E. Pierce Marshall (“Pierce”). Marshall v. Marshall, 547 U.S. 293, 126 S.Ct. 1735, 1743, 164 L.Ed.2d 480 (U.S. 2006). The Marshall v. Marshall decision recounts the initial litigation between Vickie and Pierce, both in the U.S. Bankruptcy Court and in a probate court in Harris County, Texas. Suffice it to say, that Vickie’s Chapter 11 was filed during ongoing probate proceedings. After the Chapter 11 filing, Pierce filed a proof of claim in Vickie’s bankruptcy alleging that she had defamed him by alleging that he had engaged in “forgery, fraud, and overreaching to gain control of his father’s [J. Howard’s] assets”. Marshall v. Marshall, 126 S.Ct. at 1742. Vickie counterclaimed to Pierce’s proof of claim alleging that he had tor-tiously interfered with a gift she expected from J. Howard. By the time Stern v. Marshall reached the U.S. Supreme Court, both Vickie and J. Howard had died leaving the litigation field to the representatives of their decedents’ estates. Stern v. Marshall, — U.S. -, 131 S.Ct. 2594, 180 L.Ed.2d 475, FN1 (U.S. 2011). Chief Justice Roberts wrote the majority opinion in the 5-4 Stern v. Marshall decision. The Supreme Court’s description of the prior litigation includes: After J. Howard’s death, Vickie filed a petition for bankruptcy in the Central District of California. Pierce filed a complaint in that bankruptcy proceeding, contending that Vickie had defamed him by inducing her lawyers to tell members of the press that he had engaged in fraud to gain control of his father’s assets. The complaint sought a declaration that Pierce’s defamation claim was not dischargeable in the bankruptcy proceedings. Pierce subsequently filed a proof of claim for the defamation action, meaning that he sought to recover damages for it from Vickie’s bankruptcy estate. See § 501(a). Vickie responded to Pierce’s initial complaint by asserting truth as a defense to the alleged defamation and by filing a counterclaim for tortious interference with the gift she expected from J. Howard. As she had in state court, Vickie alleged that Pierce had wrongfully prevented J. Howard from taking the legal steps necessary to provide her with half his property. On November 5, 1999, the Bankruptcy Court issued an order granting Vickie summary judgment on Pierce’s claim for defamation. On September 27, 2000, after a bench trial, the Bankruptcy Court issued a judgment on Vickie’s counterclaim in her favor. The court later awarded Vickie over $400 million in compensatory damages and $25 million in punitive damages. Stern v. Marshall, at 2601. Pierce appealed from the Bankruptcy Court to the District Court. It appears that the District Court found that, while Vickie’s counterclaim for tortious interference was within the literal language of the designation of certain bankruptcy proceedings as “core” (see 28 U.S.C. § 157(b)(2)(C)), it would be unconstitutional to hold that all counterclaims by a bankruptcy estate are core. The District Court treated the Bankruptcy Court’s judgment 573as merely proposed findings and conclusions. After review, the District Court still found that Pierce had tortiously interfered with the expectancy from J. Howard and awarded Vickie compensatory and punitive damages each in the amount of $44,292,767.33. In the meantime, the Texas state court had conducted a jury trial on the merits of the parties’ claims and entered a judgment in Pierce’s favor. Stern v. Marshall, 131 S.Ct. at 2602. Later, the Court of Appeals for the Ninth Circuit held that Vickie’s counterclaim against Pierce “was a personal injury claim” and she could not defeat Pierce’s right to a jury trial before an Article III Court “... by shoehorning it into bankruptcy filing”. In re Marshall, 600 F.3d 1037, 1069 (9th Cir.2010). What did the U.S. Supreme Court decide in Stem v. Marshall, and how does it affect the Claim Objection to Claim 11-2? In my view, Stern v. Marshall represents the Supreme Court’s most recent review of the jurisdictional scheme for bankruptcy courts established by Congress after the Bankruptcy Code was enacted on October 1,1979. The purpose of this Section of my Opinion is to determine whether I have the authority to enter a final judgment on the Claim Objection, which Objection included a section denominated as a “counterclaim”. It is beyond the purview of this Opinion to offer a complete history of the U.S. Supreme Court’s prior decisions which have considered the appropriate division of powers between the Legislative and Judicial Branches as it relates to the authority of the U.S. Bankruptcy Court. However, I think it is important to reference at least two prior Supreme Court decisions which considered the proper division of powers. First, Northern Pipeline Const. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). In Northern Pipeline, the Chapter 11 debtor sued a creditor for damages from alleged breaches of contract and warranties. The Supreme Court noted that the claims of the debtor, Northern Pipeline, arose entirely under state law. It also noted the importance of allowing such claims to be adjudicated by an Article III judge conducting a jury trial. In Northern Pipeline, the Supreme Court emphasized the importance of the checks and balances among the three branches of government which the framers provided for in the Constitution. It noted that “[a]s an inseparable element of the constitutional system of checks and balances, and as a guarantee of judicial impartiality, Art. Ill both defines the power and protects the independence of the Judicial Branch”. Northern Pipeline, supra, 102 S.Ct. at 2865. The decision also stresses that Article III judges are vested with lifetime tenure and protection from salary diminution. Such protections are subject only to the “good behaviour” clause of Article III which provides that an Article III judge is subject to removal only by impeachment. The Court in Northern Pipeline noted, “[i]t is undisputed that the bankruptcy judges whose offices were created by the Bankruptcy Act of 1978 do not enjoy the protections constitutionally afforded to Art. Ill judges”. Northern Pipeline, supra, at 2866. The Supreme Court noted that bankruptcy judges are appointed for fourteen year terms and their salaries are not immune from diminution by Congress. Northern Pipeline notes that, historically, the right to a trial before an Article III judge had three exceptions: (1) territorial courts; (2) courts-martial; and, (3) legislative courts and administrative agencies adjudicating public rights cases. The first two exceptions appear relatively straightforward. The “public rights” exception is less easily defined. Northern Pipeline notes, “the distinction between public 574rights and private rights has not been definitively explained in our precedents”. Northern Pipeline at 2870. The decision suggests that a matter of public rights concerns a dispute between the government and other parties. Northern Pipeline recognizes that matters of public rights may be delegated by Congress to non-Article III legislative courts or administrative agencies for determination. “Private-rights disputes, on the other hand, lie at the core of the historically recognized judicial power.” Northern Pipeline at 2871. I understand private rights disputes to generally encompass the alleged liability of one individual or entity to another under applicable law. The Supreme Court in Northern Pipeline ultimately held that Congress’ broad grant of powers to bankruptcy judges, then codified at 28 U.S.C. § 1471, was unconstitutional in that it vested the essential attributes of the Article III District Court in a non-Article III adjunct, the Bankruptcy Court. Northern Pipeline was decided on June 28, 1992. The Supreme Court stayed its judgment until October 4, 1992. The Supreme Court appears to have been inviting Congress to enact a new bankruptcy jurisdictional statute which would comport with the Constitution’s Article III requirements. The second Supreme Court decision which I mention as a backdrop to Stern v. Marshall, is Granfinanciera, S.A. v. Nordberg, 492 U.S. 38, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989). In Granfinanciera, a Chapter 11 trustee brought a fraudulent transfer action against several Colombian defendants. The defendants, who had not filed proofs of claim in the bankruptcy case, requested a jury trial on the fraudulent transfer claims. Granfinanciera recognizes that the Constitution’s Seventh Amendment right to a jury trial may not lie for claims of “public rights”. The decision suggests that a public right need not always concern a dispute between the government and others. Like Northern Pipeline, Granfinanciera recognized that Congress may lawfully enact a statute which provides for the resolution of disputes concerning a comprehensive federal regulatory program by non-Article III forums. However: If a statutory right is not closely intertwined with a federal regulatory program Congress has power to enact, and if that right neither belongs to nor exists against the Federal Government, then it must be adjudicated by an Article III court. If the right is legal in nature, then it carries with it the Seventh Amendment’s guarantee of a jury trial. Granfinanciera at 2797. Granfinanciera held that a bankruptcy trustee’s right to recover a fraudulent conveyance under the Bankruptcy Code is “... more accurately characterized as a private rather than a public right as we have used those terms in our Article III decisions”. Granfinanciera at 2797. The Opinion also states, “[w]e do not suggest that the restructuring of debtor-creditor relations is in fact a public right”. Granfi-nanciera at FN11. The Supreme Court, in Granfinanciera, held that the Seventh Amendment entitled the defendants/petitioners to a jury trial on the fraudulent conveyance claims. It did not reach the question of whether or not the jury trial could be conducted by a non-Article III bankruptcy judge subject to District Court review pursuant to the 1984 Amendments to the bankruptcy jurisdictional scheme. What then is the outline of the bankruptcy jurisdictional scheme which the Supreme Court considered in Granfinanciera and, later, in Stern v. Marshall? Bankruptcy judges are currently appointed for fourteen year terms by the Court of Appeals for the Federal Circuit in which they 575sit. 28 U.S.C. § 152(a). Bankruptcy judges still do not enjoy lifetime tenure, nor do they enjoy protection from salary diminution. The statutory bases for Bankruptcy Court jurisdiction are set forth in 28 U.S.C. § 1334 (1984) and 28 U.S.C. § 157 (1984). Initially, the District Court has exclusive jurisdiction over all civil proceedings arising under the Bankruptcy Code, or arising in or related to cases under the Bankruptcy Code. 28 U.S.C. § 157(a) provides that bankruptcy cases shall be referred to the bankruptcy judges in the respective district. Bankruptcy judges may make final determinations in cases under Title 11. The statute also gives bankruptcy judges the authority to make final decisions concerning “core proceedings” which arise in a bankruptcy case. Illustrative examples of core proceedings are provided in the statute. 28 U.S.C. § 157(b)(2). Included among the enumerated core proceedings are “counterclaims by the estate against persons filing claims against the estate”. 28 U.S.C. § 157(b)(2)(C). The legislative bankruptcy scheme gives a bankruptcy judge lesser authority concerning a non-core proceeding that is related to a bankruptcy case. In such matters, the bankruptcy judge submits proposed findings of fact and conclusions of law to the District Court. The district judge makes a de novo review of the bankruptcy judge’s proposed findings and conclusions and the District Court is to enter the final judgment concerning the non-core proceeding. 28 U.S.C. § 157(c)(1). The statute further provides that, with the consent of all the parties to the proceeding, the District Court may refer a non-core, related to case to the bankruptcy judge to make a final judgment. 28 U.S.C. § 157(c)(2). Further, the statute provides that the District Court may withdraw the reference of a matter from the Bankruptcy Court, either on its own motion or on timely motion of any party. 28 U.S.C. § 157(d). Considerable jurisprudence has developed concerning the distinction among matters which arise under the Bankruptcy Code, those that arise in bankruptcy cases, and those that are related to bankruptcy cases: A case “arises under” title 11 if it invokes a substantive right provided by title 11.... The category of proceedings “arising in” bankruptcy cases includes such things as administrative matters, orders to turn over property of the estate and determinations of the validity, extent, or priority of liens. Proceeding “arise in” a bankruptcy case, if they have no existence outside of the bankruptcy. Finally, a proceeding is “related to” a bankruptcy case if the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy. Stoe v. Flaherty, 436 F.3d 209, 216 (3d Cir.2006) (internal quotations and citations omitted). Also see, In re Guild, and Gallery Plus, Inc., 72 F.3d 1171, 1178 (3d Cir.1996); Browning v. Levy, 283 F.3d 761, 773 (6th Cir.2002). Thus, in 1984, Congress gave Article I bankruptcy judges the power to enter final judgments concerning matters which arise under the Bankruptcy Code and to finally decide core proceedings including, but not limited to, those listed in 28 U.S.C. § 157(b)(2). Congress vested more limited authority in bankruptcy judges concerning non-core proceedings which are related to a bankruptcy case. In such instances, absent consent of all of the parties, the bankruptcy judge may only issue proposed findings and conclusions which are subject to de novo review by the District Court. I have tried to offer a brief historical and legislative backdrop to the Stem v. 576Marshall decision. I now return to the question of what Stern v. Marshall held and how it affects my authority to decide the Claim Objection to Claim 11-2. Stern v. Marshall held that allowing the Bankruptcy Court to enter a final judgment on Vickie’s counterclaim against Pierce violated Article III of the Constitution. It did so on the basis that the subject counterclaim was based upon state law claims which concerned private rights. The Supreme Court recognized that Vickie’s counterclaim against Pierce for tor-tious interference was a specified “core proceeding” under 28 U.S.C. § 157(b)(2)(C). The Supreme Court noted that “Congress may not ‘withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty ”. Stern v. Marshall, 181 S.Ct. at 2609, citing Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 18 How. 272, 284, 15 L.Ed. 372 (1856). The Supreme Court in Stern v. Marshall noted that after Northern Pipeline, Congress amended the statutes governing bankruptcy jurisdiction and bankruptcy judges. It noted that the 1984 legislation provided that bankruptcy judges would be appointed by the Courts of Appeal for the circuits in which their districts are located. 28 U.S.C. § 152(a). It rejected Vickie’s argument that the Bankruptcy Court’s entry of a final judgment on the state common law counterclaim was constitutional. The Supreme Court in Stern v. Marshall stressed: Here Vickie’s claim is a state law action independent of the federal bankruptcy law and not necessarily resolvable by a ruling on the creditor’s proof of claim in bankruptcy. Northern Pipeline and our subsequent decision in Granfmanciera, rejected the application of the “public rights” exception in such cases. Stern v. Marshall at 2611. The ultimate holding of Stern v. Marshall is: Article III of the Constitution provides that the judicial power of the United States may be vested only in courts whose judges enjoy the protections set forth in that Article. We conclude today that Congress, in one isolated respect, exceeded that limitation in the Bankruptcy Act of 1984. The Bankruptcy Court below lacked the constitutional authority to enter a final judgment on a state law counterclaim that is not resolved in the process of ruling on a creditor’s proof of claim. Stern v. Marshall at 2620. Under Stern v. Marshall, do I have the authority to render a final judgment on the Claim Objection, which included the paragraph 11 “counterclaim”? I answer this question in the affirmative because I conclude that the defensive counterclaim which was plead is necessarily resolved by ruling on the allowability of Claim 11-2. In this case, the “counterclaim” itself was included in paragraph 11 of the Claim Objection; it sought to reduce the amount that the Debtors owed to the Claimant. I contrast this to the situation where the bankruptcy estate is seeking affirmative monetary relief from a claimant to augment the bankruptcy estate. That was the case in Stern. Further, in the case at bar, the only basis for the purported counterclaim is the course of business dealings between the Claimant and the Debtors. It is true that the terms of the parties’ agreements evolved through the course of the First Agreement, the Second Agreement, and the Third Agreement. However, there is a common nucleus of law and fact in resolving the allowability of Claim 11-2 and in considering the Debtors’ counterclaim which merely seeks to reduce the amount owed by the Debtors to the Claimant. I 577distinguish the instant situation from the case presented in Stem where there were substantially different predicate facts and legal bases in considering the allowance of Pierce Marshall’s defamation claim against the Marshall bankruptcy estate and that estate’s counterclaim for alleged tortious interference. Numerous other bankruptcy courts have noted the narrowness of the holding in Stem v. Marshall. It has been noted, “[t]he opinion did not hold 28 U.S.C. § 157(b)(2)(C) to be facially unconstitutional. Rather, the court limited the holding to the debtor’s counterclaim and others substantially like it — namely, state law counterclaims that are not resolved in the process of ruling on a creditor’s proof of claim.” In re Olde Prairie Block Owner, LLC, 457 B.R. 692, 698 (Bankr.N.D.Ill.2011); In re Black, Davis and Shue Agency, Inc., 2012 WL 360062, 11-12 (Bankr.M.D.Pa.2012). Similarly, Bankruptcy Judge Morris in the Southern District of New York has noted: Nowhere in Marathon, Granfmanciera or Stem does the Supreme Court rule that the bankruptcy court may not rule with respect to state law when determining a proof of claim in the bankruptcy, or when deciding a matter directly and conclusively related to the bankruptcy. As noted, Stem repeatedly emphasizes that it addresses only the constitutionality of the bankruptcy court making a final ruling on a state-law counterclaim that would not be finally resolved in the process of allowing or disallowing a proof of claim. In re Salander O’Reilly Galleries, 453 B.R. 106, 117 (Bankr.S.D.N.Y.2011). In this case, resolution of Claim 11-2 and resolution of the counterclaim both require me to determine the nature of the contractual arrangements between the Claimant and the Debtors, then to determine the extent of the parties’ performances under the contracts. Pennsylvania state law will provide the underlying basis for determination of the parties’ agreement. It will also supply the basis for determining the existence of any breach of contract and the measure of damages for any breach. I conclude that Claim 11-2 and the defensively interposed counterclaim in this case are inextricably intertwined both factually and legally. Resolution of the counterclaim is necessarily implicated in ruling on the allowability of Claim 11-2. The procedural posture of this case has simplified the determination that resolution of the counterclaim is necessarily implicated in ruling on the Proof of Claim. As noted above, Stern v. Marshall was not decided until after the record in this case had been closed and the parties had submitted their initial post-hearing briefs. Thus, I had a complete record to review in making my determination concerning the application of Stern here. Here, both the Claimant and the Debtors have consented to my entering final judgments concerning the counterclaim to Claim 11-2.2 I will proceed to consider Claim 11-2 and the Claim Objection thereto, including the counterclaim. B. Claim Objection and Burden of Proof Federal Rule of Bankruptcy Procedure (“F.R.B.P.”) 3001(f) provides: (f) Evidentiary effect A proof of claim executed and filed in accordance with these rules shall constitute prima facie evidence of the validity and amount of the claim. 578The Third Circuit had occasion to discuss the shifting burden of proof concerning proofs of claims and objections thereto. It noted that: Initially, the claimant must allege facts sufficient to support the claim. If the averments in his filed claim meet this standard of sufficiency, it is “prima fa-cie ” valid. In other words, a claim that alleges facts sufficient to support a legal liability to the claimant satisfies the claimant’s initial obligation to go forward. The burden of going forward then shifts to the objector to produce evidence sufficient to negate the prima facie validity of the filed claim. It is often said that the objector must produce evidence equal in force to prima facie case. In practice, the objector must produce evidence which, if believed, would refute at least one of the allegations that is essential to the claim’s legal sufficiency. If the objector produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts to the claimant to prove the validity of the claim by a preponderance of the evidence. The burden of persuasion is always on the claimant. In re Allegheny Intern., Inc., 954 F.2d 167, 173-174 (3d Cir.1992) (internal citations omitted); also see, In re Stauder, 396 B.R. 609, 610-611 (Bankr.M.D.Pa.2008). Further, if the proof of claim is executed and filed in accordance with F.R.B.P. 3001, subpart (f) of the Rule provides that the claim constitutes prima fa-cie evidence of the validity and the amount of the claim. This evidentiary presumption remains in force even after an objection to the claim is filed. In re Sacko, 394 B.R. 90, 98 (Bankr.E.D.Pa.2008); In re Kincaid, 388 B.R. 610, 613 (Bankr.E.D.Pa.2008). A creditor’s claims in bankruptcy arise in the first instance from the underlying substantive law creating the debtor’s obligation, subject to any qualifying contrary provisions of the Bankruptcy Code. Butner v. U.S., 440 U.S. 48, 55, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979). The Supreme Court has also noted that “[t]he ‘basic federal rule’ in bankruptcy is that state law governs the substance of claims. Congress having ‘generally left the determination of property rights in the assets of a bankrupt’s estate to state law’ ”. Raleigh v. Illinois Dept. of Revenue, 530 U.S. 15, 20, 120 S.Ct. 1951, 1955, 147 L.Ed.2d 13 (U.S. 2000); also see Travelers Cas. & Sur. Co. of America v. Pacific Gas and Elec. Co., 549 U.S. 443, 127 S.Ct. 1199, 1201, 167 L.Ed.2d 178 (U.S.2007). The allowance of claims in bankruptcy is governed by 11 U.S.C. § 502.3 It provides, in part: “(a) A claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest, ... objects.” To determine what claims are enforceable against the bankruptcy estate, § 502 looks to non-bankruptcy law. In re Combustion Engineering, Inc., 391 F.3d 190 (3d Cir.2004); In re G-I Holdings, Inc., 443 B.R. 645, 663 (Bankr.D.N.J.2010). Thus, I will examine Claim 11-2 to determine whether it complies with F.R.B.P. 3001 and is, therefore, entitled to the pri-ma facie validity provided by F.R.B.P. 3001(f). If prima facie evidence of the validity and the amount of the claim is established, I will determine whether the Debtors have met their burden in overcoming the presumption of allowability and 579offering sufficient proof that the claim is invalid. I will apply the basic federal rule in bankruptcy that state law governs the substance of claims. I will, therefore, apply Pennsylvania law to evaluate Claim 11-2 and the Debtors’ objections thereto. In re Lampe, 665 F.3d 506, 515 (3d Cir.2011); also see, In re Armstrong World Industries, Inc., 348 B.R. 111, 123 (D.Del.2006). Thus, if prima facie validity has been established, the burden will shift to the Debtors to produce evidence sufficient to refute at least one of the allegations that is essential to Claim 11-2’s legal sufficiency. If the Debtors produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts to the Claimant to prove the validity of the claim by a preponderance of the evidence. In re Sacko, 394 B.R. 90, 97 (Bankr.E.D.Pa.2008); In re Allegheny Intern., Inc., 954 F.2d 167, 173-174 (3d Cir.1992). C. Presumption of Allowability I have reviewed Claim 11-2. The claim consists of the one-page Official Form BIO; all of the required information is completed, including the amount of the claim, $878,249.11. Box 4 on the Official Form is completed indicating that it is a secured claim, secured by “3 parcels of real estate and cattle”, an asserted collateral value of $2,200,000.00. Claim 11-2 indicates the basis for perfection as “Mortgage/UCC-1”. Claim 11-2 has seven exhibits consisting of: (1) a one-page itemization of claim; (2) a Third Amended and Restated Revolving Variable Rate Note dated March 11, 2005, from the Debtor, Thomas H. McElwee, Jr., to the Claimant in the face amount of $750,000.00; (3) a Third Amended and Restated Guaranty Agreement from the Debtor, Becky S. McElwee, as Guarantor, to the Claimant; (4) an Open-End Mortgage, Security Agreement and Fixture Filing as recorded in the Office of the Recorder of Deeds of Cumberland County, Pennsylvania, dated March 11, 2005, from the Debtors to the Claimant; (5) an Open-End Mortgage, Security Agreement and Fixture Filing as recorded in the Office of the Recorder of Deeds of Franklin County, Pennsylvania, dated March 11, 2005, from the Debtors to the Claimant; (6) a Second Amended and Restated Security Agreement dated March 11, 2005, from the Debtor, Thomas H. McElwee, Jr., to the Claimant; and, (7) a copy of a UCC-1 Financing Statement filed with the Secretary of the Commonwealth of Pennsylvania naming the Debtor as Thomas H. McEl-wee, Jr. filed on November 23, 2009. Claim 11-2, including its seven exhibits, was admitted into evidence during the hearing. No objections were interposed as to the authenticity of the Official Form B10 or any of the attendant exhibits. After review of Claim 11-2, including the exhibits thereto, I find that the subject Proof of Claim was filed in accordance with the requirements of F.R.B.P. 3001(a). Therefore, Claim 11-2 constitutes prima facie evidence of the validity and the amount of the claim by the Claimant. F.R.B.P. 3001(f); In re Lampe, 665 F.3d 506, 514 (3d Cir.2011); In re American Home Mortg. Holdings, Inc., 637 F.3d 246, 256 (3d Cir.2011); In re Smith, 463 B.R. 756, 766 (Bankr.E.D.Pa.2012). D. Evidence Refuting the Claim The Claim Objection was filed to Docket Number 61. The Claim Objection was not filed in numbered paragraph form, and this makes summarization of the objections more difficult. Essentially, the Claim Objection states seven objections as follows: 1. That Claim 11-2 is not fully secured; 2. That Claim 11-2 improperly includes a default rate of interest; 5803. That the Claimant breached the terms of the various agreements between the parties; 4. That the Claimant provided the Debtors with cattle which were “unhealthy and in poor condition” and that the Claimant failed to pay the Debtors the “fair and standard market price for all cattle at the time of sale”4; 5. That the Claimant failed to pay all of the veterinary, feed, and other necessary costs and expenses associated with cattle which the Claimant placed with the Debtors; 6. That the Claimant acted in bad faith; 7. That the Debtors “are entitled to a setoff, or, alternatively, hold a counterclaim against Scarff Brothers, for any sums remaining due and owing Scarff Brothers ...”5 1. The Claim is not fully secured. The first objection, that Claim 11-2 may not fully be secured, is easily disposed of. First, I note that this is a claim objection and not a proceeding under § 506 of the Bankruptcy Code to determine secured status. In any event, on June 6, 2011, I rendered a decision which determined the fair market values of the Debtors’ three real properties. The decision, In re McElwee, is reported at 449 B.R. 669 (Bankr.M.D.Pa.2011). Under the doctrine of judicial restraint, I will not, at this time, determine the extent of the Claimant’s secured claim. I overrule that portion of the Claim Objection. 2. The Claim improperly includes a default interest rate. Claim 11-2 clearly included a default interest rate in the itemization of its claim. The second page of Claim 11-2 includes the following entry: (c) Accrued interest from $153,461.02 3/16/08 to 3/30/10 at contractual default rate of WSJ Prime plus 7% (Current per diem is $202.29) The note dated March 11, 2005, in the face amount of $750,000.00, does make provision for a default rate of interest. A “default interest rate” is defined on page one of the note. Further, page five of the note provided, in part, “[u]pon the occurrence of an Event of Default, interest shall accrue thereafter at the Default Interest Rate, It is noted that allowing the default of interest will allow the Claimant to recover pre-petition interest at a rate which is five percent higher than the contract interest rate stated in the note. Both the default interest rate and the contract interest rate are monthly adjustable rates and are based upon the Wall Street Journal published prime rate of interest. Debtors’ Brief in support of the Claim Objections includes the following: Given the significant evidence proving Scarff Brothers’ lack of good faith and fair dealings throughout this entire case, it must be concluded that Scarff Brothers is not entitled to any default rate of interest on the outstanding balance of the Scarff Brothers’ claim, whatever the Court may determine that outstanding balance to be. Debtors’ Br. on Objections to Scarff Brothers’ Proof of Claim 22. The Debtors 581have not cited any statutory or case law to support their argument that the default rate of interest should not apply. I have considered other bankruptcy court decisions which analyze the propriety of a post-petition default interest rate when sought by an oversecured creditor. For example, In re La Guardia Associates, LP, noted: At least 3 distinct rules have been applied by courts in dealing with post-bankruptcy default rate interest claims by oversecured creditors. One line of authority holds that the only limitation on the oversecured creditor’s right to default rate interest is the enforceability of such right under applicable non-bankruptcy law. A second line of authority takes the position that a claim for default rate interest is not a claim for interest at all, but rather a claim for a “charge”, which, as noted above, must be reasonable under § 506(b). ... A third line of authority reasons that the Bankruptcy Code has the equitable power and duty to examine the circumstances of the oversecured creditor in each particular case and consider notions of fairness and equity in determining whether to award default rate interest. This appears to be the majority view. In re La Guardia Associates, LP, 2006 WL 6601650, 38 (Bankr.E.D.Pa.2006) (internal citations omitted); also see In re 100 Walnut Associates, L.P., 461 B.R. 308, 317 (Bankr.E.D.Pa.2011). Some courts have found that there is a rebuttable presumption in favor of allowing the contract default interest rate post-petition. The presumption may be rebutted based upon equitable considerations of the specific facts of a case. Matter of Terry Ltd. Partnership, 27 F.3d 241, 243 (7th Cir.1994). I find the above authority readily distinguishable from the case at bar. First, the Claimant is seeking the default rate of interest only to the petition date, March 30, 2010. Second, no record was established concerning market rates of interest or other factors which are normally considered in challenges. to post-petition claims for a default rate of interest. Finally, I have not found the Claimant’s relevant conduct to fall below a good faith standard. Therefore, I overrule the Claim Objection to the extent it challenged the application of the pre-petition default interest rate. 3. The Claimant breached its contract with the Debtors. Generally, in Pennsylvania, certain material facts must be plead to allege a breach of contract. There are three essential elements—there was a contract, the defendant breached it, and the plaintiffs suffered damages from the breach. McShea v. City of Philadelphia, 606 Pa. 88, 995 A.2d 334, 340 (Pa.2010); Hart v. Arnold, 884 A.2d 316, 332 (Pa.Super.2005). As part of the Claim Objection, the Debtors maintain that the Claimant agreed to pay the “market price” for the Middling Calves which the Claimant purchased from the Debtors pursuant to the First Agreement. The Claimant’s representatives vigorously disputed this allegation. My resolution of this issue is largely based upon my review of the record and the credibility of the witnesses. I noted above the disadvantages in parties conducting business based upon verbal agreements. However, I appreciate that there can be advantages to a verbal arrangement. Here, the Debtors retained the freedom to sell their Middling Calves to third parties if they felt that the Claimant’s purchase price was insufficient. The Claimant, as a potential purchaser, would have the same freedom if it felt that the Debtors’ price was too high. Pennsylvania 582courts, historically, have recognized freedom of contract. De Lage Landen Financial Services, Inc. v. M.B. Management Co., Inc,, 888 A.2d 895, 900-901 (Pa.Super.2005) (under the Pennsylvania Uniform Commercial Code, parties still enjoyed freedom of contract concerning agreed to terms); Karkaria v. Karkaria, 405 Pa.Super. 176, 592 A.2d 64, 70 (1991) (the legislature and the trial court give due deference to the parties’ freedom to contract); Pennsylvania State Camp Patriotic Order Sons of America v. Washington Camp No. 135, Patriotic Order Sons of America, 385 Pa. 492, 123 A.2d 701, 704-705 (1956) (absent an impingement on public policy, the principle of freedom of contract allows for the enforcement of the terms of parties’ agreement). I note that the Claimant’s representatives and the Debtor, Thomas McElwee, each had significant prior experience in the purchase and sale of cattle before they entered into the First Agreement. I also find that the First Agreement, the Second Agreement, and the Third Agreement were all voluntary agreements and were perceived by each party to be of mutual benefit. Both parties sought to gain by each transaction. The Claimant sought to secure a stable source of Middling Calves for its western feed lot operation. Another of the Claimant’s objectives was to be able to purchase Middling Calves at a predetermined price, thus serving as a hedge against potential price increases in the open cattle market. I conclude that the Debtors sought the advantage of having a known, ready, and willing purchaser for the Middling Calves they raised. Further, having an agreed to price for the sale of Middling Calves would serve to hedge the Debtors against significant price decreases in the open cattle market. I conclude that the Debtors have not met their burden to show the Claimant agreed to purchase the Middling Calves for the “market price” or “market rate”. I do not find it credible that the Claimant, whose principals are experienced cattlemen, would extend a $750,000.00 credit facility to the Debtors and enter into all of the attendant arrangements only to be able to purchase calves for the same price at which they could purchase them on the open cattle market. I find that there was an initial base price that the Claimant agreed to pay the Debtors per Middling Calf during the First Agreement. The base price was adjusted, from time to time, based upon the parties’ subsequent oral agreements. There was an offer and acceptance each time a calf was sold and purchased and each party performed their obligations under the First Agreement. I conclude that the Debtors have not proven a breach of contract concerning the First Agreement under applicable Pennsylvania law. The Debtors also asserted that during the time periods covered by the Second Agreement and the Third Agreement, the Claimant provided them with unhealthy cattle which caused disease to their herd with attendant damages. At hearing, the Debtors presented the testimony of two veterinarians, Dr. Jeffrey Pyle and Dr. Trent Lartz. Both veterinarians testified that they had treated the Debtors’ cattle for a period of time. Dr. Pyle from June 2004, until December 2005; Dr. Lartz from September 2006, to April 2007. Dr. Pyle testified that while he was treating the Debtors’ cattle, the amount of the antibiotics they were purchasing increased significantly. He also testified that such antibiotics were primarily used for treating pneumonia or other respiratory disease in cattle. In response to several hypothetical questions, Dr. Pyle opined that introduction of diseased cattle into a herd would be the primary way to intro583duce respiratory disease into the cattle herd. However, I do not find that Dr. Pyle linked any of the respiratory disease suffered by the Debtors’ cattle to the Claimant — either by its actions or inac-tions. Dr. Lartz’s testimony included his observations, like Dr. Pyle’s, that the Debtors’ facilities were generally very adequate for raising feeder calves. He also testified that he performed approximately six to twelve necropsies on dead animals from the Debtors’ herd. His findings included that the animals had minimal internal fat, and lung lesions that “... showed ehronicity, meaning that they had been sick for a while”. Trial tr. vol. 3, 42:10, Feb. 24, 2011. Dr. Lartz also testified that the Debtors’ herd experienced an exceedingly high mortality rate. Like Dr. Pyle, Dr. Lartz testified that the most likely cause of disease in the herd was the introduction of other diseased animals. Dr. Lartz testified that Mr. McElwee told him that weaker or “culled” calves were being brought in from other farms. Dr. Lartz testified that he told Mr. McEl-wee that this practice needed to be stopped, if at all possible. The record does not show any concrete action by the Debtors to change their practice of accepting cattle. I find that Dr. Lartz’s testimony did not establish that the increased disease and mortality suffered by the Debtors’ herd was caused by the actions or inactions of the Claimant. Mrs. McElwee also testified in the course of the hearings. In her testimony, twenty-eight photographs were introduced into evidence. Generally, the photographs depicted dead or apparently diseased cattle; the photographs contained time stamps between September 2, 2006, and January 29, 2008. Some of the cattle shown are obviously dead; others show hair loss, a potential sign of ill health. Mrs. McElwee, like her husband, attempted to link the increased mortality in their herd to cattle brought to their facility by the Claimant. I will say that, on a personal level, I sympathize with the Debtors about the loss of cattle which they suffered. However, I must decide this case, free of emotion, based upon the proven facts and applicable law. I find that the Debtors did not show by a preponderance of the evidence that the actions or inactions of the Claimant contributed to the increased disease and mortality suffered by their herd. An allegation of damages alone is not sufficient to support a breach of contract claim. Generally, three elements must be proven to support a breach of contract claim: (1) the existence of a contract, including its essential terms; (2) a breach of a duty imposed by the contract; and, (3) resultant damages. CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa.Super.1999); Cargill-Alliant, LLC v. GPU Service, Inc., 2001 WL 118967, 7 (E.D.Pa.2001). I find that the arrangements between the Claimant and the Debtors was not a long-term contract of adhesion. “An adhesion contract is defined as a standard form contract prepared by one party, to be signed by the party in the weaker position, (usually) a consumer, who has little choice about the terms.” In re Frascella Enterprises, Inc., 349 B.R. 421, 429 (Bankr.E.D.Pa.2006) (internal citations omitted); Huegel v. Mifflin Const. Co., Inc., 796 A.2d 350, 357 (Pa.Super.2002). I find that the contractual arrangements between the Claimant and the Debtors were commercial transactions. This is consistent with § 101(8) of the Bankruptcy Code which provides that a consumer debt is a debt which is primarily incurred for a personal, family, or household purpose. Further, a consumer debt is distinguished from a business debt, the latter of which is in584curred with a profit motive. In Liegey, 2009 WL 3817902, 3, (Bankr.M.D.Pa. 2009); In re Runski 102 F.3d 744, 747 (4th Cir.1996). I find that the Debtors’ transactions with the Claimant were motivated by the pursuit of profit. This is not a case where the Debtors have alleged a breach of express or implied warranties concerning calves which they purchased. Further, the record is devoid of corroborating evidence that the Debtors unsuccessfully attempted to reject any of the calves which were brought to their facility. No written correspondence to the Claimant to that effect was introduced nor did any third party testify to either of the Debtors orally rejecting calves provided to them by the Claimant. I find that the Debtors never rejected, as non-conforming, any of the calves provided to them by the Claimant. The Debtors suggested that the Claimant introduced diseased calves which sickened their herd and increased their veterinary expenses. The Claimant’s representative suggested that the Debtors were purchasing inferior calves which were not suitable for the feeding program. I reiterate my finding that the Debtors failed to prove a breach of contract by a preponderance of the evidence. In Section D.6, infra, I concluded that an obligation of good faith was implied in the parties’ Agreements. I also indicated in that Section that I would address here whether the Claimant breached this implied obligation. Pennsylvania state courts have described the implied obligation of good faith and the doctrine of necessary implication in essentially the same terms. The Pennsylvania Superior Court thus described the doctrine of necessary implication: In the absence of an express provision, the law will imply an agreement by the parties to a contract to do and perform those things that according to reason and justice they should do in order to carry out the purpose for which the contract was made and to refrain from doing anything that would destroy or injure the party’s right to receive the fruits of the contract. Palmieri v. Partridge, 853 A.2d 1076, 1079 (Pa.Super.2004) (internal citations omitted). More recently, the Pennsylvania Superi- or Court indicated, “[b]oth the implied covenant of good faith and the doctrine of necessary implication are principles for courts to harmonize the reasonable expectations of the parties with the intent of the contractors and the terms in their contract.” Stamerro v. Stamerro, 889 A.2d 1251, 1259 (Pa.Super.2005). The Stamerro court also noted that these implied duties cannot override the express provisions of the parties’ contract. As with many subjective standards, it is difficult to catalog what conduct constitutes a lack of good faith in a contractual context. A complete catalog of the types of bad faith is impossible, but certain strains of bad faith include: “... evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms, and interference with or failure to cooperate in the other party’s performance.” Stamerro, at 1259; Somers v. Somers, 418 Pa.Super. 131, 613 A.2d 1211, 1213 (1992). I agree that the implied covenant of good faith is analogous to what the Pennsylvania courts refer to as the doctrine of necessary implication. A contracting party is impliedly obligated to do what is required to implement the purposes of a contract—he is also obligated to refrain from actions that would injure the other party’s rights to receive the fruits of the contract. For example, the Pennsylvania 585Superior Court held that a shopping center lessee may have violated the doctrine where it paid its rent to the lessor, but failed to occupy the leased premises. Slater v. Pearle Vision Center, Inc., 376 Pa.Super. 580, 546 A.2d 676, 679-680 (1988) (reversing allowance of preliminary objections). I have acknowledged that the Debtors suffered losses from their herd. However, I do not find that the Claimant’s conduct failed to meet the good faith standard. My review of the record shows that the Claimant endeavored to discharge its contractual obligations while exercising due regard to the Debtors’ contractual rights. I find it significant that when the First Agreement failed, the Claimant continued to bargain with the Debtors to see if their contractual goals could be accomplished under different terms. This gave rise to the Second and, in turn, the Third Agreements. I conclude that the Claimant did not breach its implied duty to perform in good faith. I also conclude that the Claimant did not violate the doctrine of necessary implication. 4.The Claimant provided cattle which were unhealthy and failed to pay the fair and standard price for cattle at the time of sale. This portion of the Claim Objection was addressed in Section D.3. 5.The Claimant failed to pay all the veterinary, feed and other necessary costs and expenses. Much of this portion of the Claim Objection is also subsumed in Section D.3. The documentary evidence and testimony which the Claimant submitted on this allegation was credible and complete. The Debtors’ allegation was not substantiated by credible testimony or documentary proof. The Debtors did not introduce into evidence any veterinary or feed bills. I overrule this portion of the Claim Objection. 6.The Claimant acted in bad faith. For some time now, the courts of Pennsylvania have struggled with the issue of whether every contract includes an implied covenant of good faith and fair dealing. The Pennsylvania Supreme Court’s decision in Ash v. Continental Ins. Co., 593 Pa. 523, 932 A.2d 877, 883 (Pa.2007) illustrates this uncertainty. The Court noted, “despite the apparent conflict over the applicability of the implied duty of good faith, we decline to engage in a discussion of this issue as it is not presently before us.” Additionally, footnote two in Ash notes that there is some disagreement in Pennsylvania’s intermediate appellate courts. Some of them have found a general implied duty of good faith and fair dealing in every contract. Others have held the covenant of good faith is recognized only in limited situations (e.g., franchise agreements and insurance contracts). Where there is no binding state court precedent on an issue, it is the responsibility of a federal court to predict how it believes the highest state court would rule on a particular issue. In re Ressler Hardwoods and Flooring, Inc., 427 B.R. 312, 324 (Bankr.M.D.Pa.2010); In re SemCrude, L.P., 407 B.R. 82, 96 (Bankr.D.Del.2009); Borman v. Raymark Industries, Inc., 960 F.2d 327, 331 (3d Cir.1992). Generally, if the state’s highest court has not clearly ruled on a matter, a federal court may rely on the decisions of intermediate state courts, unless the federal court is convinced that the highest state court would decide the issue differently. Leonard v. Dorsey & Whitney, LLP, 553 F.3d 609, 612 (8th Cir.2009); Fidelity Union Trust Co. v. Field, 311 U.S. 169, 61 S.Ct. 176, 177-178, 85 L.Ed. 109 (1940). I find myself in agreement with two recent federal district court cases 586which predicted that the Pennsylvania Supreme Court would adopt § 205 of the Restatement (Second) of Contracts and find that every contract imposes on each party a duty of good faith and fair dealing in performance and enforcement. District Judge Pollack so held in Kamco Indus. Sales, Inc. v. Lovejoy, Inc., 779 F.Supp.2d 416, 425 (E.D.Pa.2011). The Kamco court held “[t]his court agrees that the Pennsylvania Supreme Court would adopt Section 205 of the Restatement if squarely confronted with the question.” Zaloga v. Provident Life and Acc. Ins. Co. of America, 671 F.Supp.2d 623 (M.D.Pa.2009) also predicts Pennsylvania law on the issue of an implied covenant of good faith in every contract. The Zaloga court reviewed historical Pennsylvania precedents and held “... that the Supreme Court of Pennsylvania would adopt § 205—and impart a contractual obligation of good faith and fair dealing to all contracts—if it were squarely presented with the issue.” Zaloga, supra at 629-630. I join the Kamco and Zaloga courts in predicting that, given the occasion, the Supreme Court of Pennsylvania would adopt the Restatement (Second) of Contracts § 205. I believe this holding is consistent with Pennsylvania’s adoption of numerous other sections of the Restatement (Second) of Contracts. Middletown Tp. v. Unemployment Compensation Bd. of Review, 40 A.3d 217, 231 (Pa.Cmwlth.2012) (applying Restatement Contracts (Second) § 39(1)); TruServ Corp. v. Morgan’s Tool & Supply Co., Inc., 39 A.3d 253, 261 (Pa.2012) (citing Restatement (Second) Contracts § 354); Guerra v. Redevelopment Authority of City of Philadelphia, 27 A.3d 1284, 1293 (Pa.Super.2011) (citing Restatement (Second) Contracts § 90). Further, this prediction of the law is consistent with the requirement that I give due deference to the decisions of Pennsylvania’s intermediate appellate courts. Rolick v. Collins Pine Co., 925 F.2d 661, 664 (3d Cir.1991). I have determined that the Pennsylvania courts would imply a covenant of good faith and fair dealing in the contractual arrangements between the Debtors and the Claimant. I must now consider whether the Claim Objection has stated a cause of action for a breach of this covenant. As noted above, the Pennsylvania courts have long implied the covenant of good faith and fair dealing to insurance contracts. The Pennsylvania Supreme Court has noted, “[w]e believe that this recent case law, employing contractual terms for the obligation of the insurer to represent in good faith the rights of the insured, indicates that a breach of such an obligation constitute a breach of the insurance contract for which an action in assumpsit will lie.” Gray v. Nationwide Mut. Ins. Co., 422 Pa. 500, 223 A.2d 8, 11 (1966). I conclude that if the Claimant breached any covenant of good faith to the Debtors, it did so in the context of their contractual dealings. I, therefore, considered the alleged violation of the implied covenant in Section D.3, supra, concerning the Debtors’ allegations that the Claimant breached its agreements with them. However, I note there is no independent cause of action for a breach of the covenant of good faith and fair dealing arising in contracts in Pennsylvania. Zaloga at 631. I find that any cause of action for alleged breach of the implied covenant of good faith and fair dealing is merged into the breach of contract claims. Meyer v. Cuna Mut. Group, 2007 WL 2907276, 14 (W.D.Pa.2007). 7. The Debtors are entitled to a setoff or counterclaim against the Claimant. I have already concluded that the Debtors have failed to adduce proof that the Claimant breached any of its express or *587implied obligations to them. Therefore, I grant judgment on the counterclaim in favor of the Claimant and against the Debtors. IY. CONCLUSION In summary, I find that the Debtors failed to prove cognizable damages under the First, Second, or Third Agreements. I also find that the Debtors failed to produce sufficient evidence to refute any of the allegations of Claim 11-2 which are essential to its legal sufficiency. I find that the prima facie validity of Claim 11-2 has not been overcome. I, therefore, overrule the Claim Objection and allow Claim 11-2 as filed in the following amounts: a. unpaid principal balance $710,467.70 b. accrued interest through 3/15/08 at WSJ Prime plus 2% $ 6,937.04 c. accrued interest from 3/16/08 to 3/30/10 at contractual default rate of WSJ $153,461.02 Prime plus 7% (LESS) interest paid ($36,326.39) d. late charges $ 1,888.35 e. attorneys’ commission (5% as authorized) $ 41,821.39 TOTAL $878,249.11 An Order will be entered consistent with this Opinion. . Drafted with the assistance of Ryan B. White, Esquire, Law Clerk. . Scarff Bros., Inc.’s Supplemental Br. Regarding the Application of Stern v. Marshall 10; Debtors' Supplemental Br. Regarding the Application of Stern v. Marshall 4. . Unless otherwise noted, all future statutory references are to the Bankruptcy Code, 11 U.S.C. § 101, et seq., as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub.L. No. 109-8, 119 Stat. 37 (“BAPCPA”). . Objections to All Scarff Brothers, Inc. Proofs of Claim, Including Claim Nos. 11-1 and 11-2 4 ¶ 5. . Objections to All Scarff Brothers, Inc. Proofs of Claim, Including Claim Nos. 11-1 and 11-2 6 ¶ 11.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494687/	MEMORANDUM RULING ROBERT SUMMERHAYS, Bankruptcy Judge. This is an action to revoke the discharge of Shannon Jude Wilkerson (the “Debtor”) pursuant to 11 U.S.C. § 727(d)(1) filed by Paul N. DeBaillon, the duly-appointed Chapter 7 trustee (the “Trustee”). The court took this case under advisement following a trial on the merits. As explained further below, the court rules that the Debtor’s discharge should be revoked under section 727(d)(1). JURISDICTION This case has been referred to this court by the Standing Order of Reference entered in this district which is set forth as Rule 83.4.1 of the Local Rules of the United States District Court for the Western District of Louisiana. No party in interest has requested a withdrawal of the reference. The court finds that this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). These Reasons for Decision constitute the court’s findings of fact and conclusions of law pursuant to Rule 7052, Federal Rules of Bankruptcy Procedure. BACKGROUND The crux of this case is whether the Debtor obtained his discharge through fraud by failing to disclose a safe deposit box with approximately $70,000 of cash. The Debtor was primarily in the business of owning and managing nightclubs, and handled significant amounts of cash in connection with his business. The Debtor first filed for relief under Chapter 11 of the Bankruptcy Code in June 2003. That case was subsequently dismissed in June 2005 without the Debtor receiving a discharge. (Trial Exhibit No. 22) The dismissal order provided that the Debtor was barred from filing for relief under any chapter of the Bankruptcy Code for a period of two (2) years. On January 21, 2008, the Debtor filed for relief under Chapter 7 of the Bankruptcy Code. The Debtor received a Chapter 7 discharge on February 13, 2009. Several of the Debtor’s business entities have also filed for relief under the Bankruptcy Code. The Debtor filed his required schedules in connection with his 2003 Chapter 11 case and his 2008 Chapter 7 case. Question number 12 of the Debtor’s Statement of Financial Affairs (“Question 12”) required him to identify “each safe deposit or other box or depository in which the debtor has or had securities, cash, or other valuables within one year immediately preceding the commencement of this case.” (Trial Exhibit Nos. 23, 25) The Debtor’s response to this question was “none” with respect to the Statement of Financial Affairs filed in his 2003 and 2008 cases. Contrary to these representations, the record reflects that the Debtor had two safe deposit boxes with Whitney Bank at the time he filed his schedules in both bankruptcy cases. The first safe deposit box was initially rented in January 1994, and the second safe deposit box was initially rented in January 1997. (Trial Exhibit No. 1) The Debtor testified that he used the boxes for “cash savings,” and to store cash for business deals. He testified that 400he liked to see his savings in the form of cash as opposed to an entry on a bank statement. The Debtor testified that he frequently accessed the boxes prior to 2000. Whitney Bank’s access records for both safe deposit boxes show that the last time the boxes were accessed by the Debt- or was in 2000. (Id.) In June 2006, WTiitney Bank sent the Debtor “drill notices” stating that the rent for the two boxes was delinquent. These drill notices were apparently sent to the business address of one of the Debtor’s clubs that had previously closed. The Debtor testified that he did not receive the notices. On March 18, 2008, Whitney Bank opened the two safe deposit boxes after it received no response from the Debtor. One of the safe deposit boxes contained $70,000 in cash. On March 21, 2011, the Debtor pled guilty in federal court to a charge of failing to disclose the safe deposit box containing $70,000 in connection with his 2003 bankruptcy case. In the stipulated facts entered in connection with the Debtor’s guilty plea, the Debtor admitted that (1) he was asked whether he had any safe deposit boxes, (2) he “knew he had safe deposit boxes, and had reason to believe they still contained cash,” and (3) the Debtor failed to disclose the safe deposit boxes and their contents. (Trial Exhibit No. 21) The Debtor also did not disclose the safe deposit box and cash in the bankruptcy eases filed by his various business entities. DISCUSSION 11 U.S.C. § 727(d)(1) provides that “the court shall revoke a discharge granted under subsection (a) of this section if ... such discharge was obtained through the fraud of the debtor, and the requesting party did not know of such fraud until after the granting of such discharge.... ” The fraud required for purposes of Section 727(d)(1) “is fraud ‘in fact,’ such as the intentional omission of assets from the schedules, and must involve intentional wrong.” In re Donald, 240 B.R. 141, 146 (1st Cir. BAP 1999) (citing 6 Lawrence P. King, et al., Collier on Bankruptcy ¶ 727.15[2] (5th ed. 1999)). In other words, the Trustee must show “that the debtor’s actions or mistakes were knowingly and fraudulently made, and that the mistakes were material....” In re Darby, 376 B.R. 534, 541 (Bankr.E.D.Tex.2007) Courts have repeatedly found that a debt- or’s failure to report assets on bankruptcy schedules is sufficient to revoke the discharge under section 727(d)(1). Id.; In re Yonikus, 974 F.2d 901, 904 (7th Cir.1992). A finding of fraudulent intent “may be based on inferences drawn from a course of conduct ... [or] from all of the surrounding circumstances.” Darby, 376 B.R. at 540 (quoting Yonikus, 974 F.2d at 905). The Debtor acknowledges that the safe deposit box and cash were not disclosed and that his response to Question 12 on the Statement of Financial Affairs that he filed in this case was false. However, the Debtor contends that his response to Question 12 and his failure to disclose the $70,000 cash was inadvertent and that he had simply “forgotten” about the safe deposit boxes and the cash when he filed his schedules. The Debtor testified that he was suffering from stress and depression at the time he filed his bankruptcy cases in 2003 and 2008, and that his mental condition made it difficult for him to manage his financial affairs. Since his business was largely cash based, Wilkerson had difficulty managing the cash that he regularly handled. The Debtor submitted a psychological report that addresses his mental condition. The Debtor also contends that he could have avoided the 2003 repossession of his car, the 2006 foreclosure of his house, and his bankruptcy filings by ac401cessing the cash in the safe deposit box, and the fact that he did not do so supports his position that he forgot about the existence of the safe deposit box and the cash. Taking into account the circumstances as a whole and the Debtor’s course of conduct from his 2003 case through his 2008 case, the court does not find it credible that the Debtor simply “forgot” about $70,000. The Debtor testified about how he enjoyed seeing his savings in cash, and that he visited the safe deposit box frequently prior to 2000. The Debtor’s last visit to the safe deposit box in 2000 coincides with the period when, according to the Debtor’s testimony, his business started to experience financial problems. Yet, the Debtor did not attempt to access the cash in 2000, 2001, 2002, or 2003 to save his business. Moreover, in connection with his guilty plea, the Debtor admitted that he “knew he had safe deposit boxes, and had reason to believe they still contained cash,” at the time he filed his schedules in the 2003 case. Since the Debtor filed that case and his schedules after his business began to decline and his car was repossessed in 2003, he cannot rely on these facts to support his claim that he had forgotten about the cash. Nor is the Debtor’s argument credible that he subsequently forgot about the safe deposit box and cash when he filed his second case in 2008 — merely 3 years after the 2005 dismissal of his first case. The foreclosure of the Debtor’s home in 2006 does not overcome the weight of the evidence, considered as a whole, that the Debtor knew about the safe deposit box and cash at the time he filed his schedules in the 2008 case. The court also notes that the psychological report by Dr. F.T. Friedberg does not support the Debtor’s position that any omissions or misstatements in his bankruptcy schedules were the result of his mental condition at the time he filed the schedules. Specifically, the report states that Dr. Friedberg’s observations and conclusions were drawn from his examination of the Debtor on March 1, 2011. Dr. Friedberg did not examine the Debtor in or around the time period he filed his schedules. Thus, Dr. Friedberg could not opine on the Debtor’s mental condition based on a direct examination of the Debt- or at the time he filed the bankruptcy schedules in the 2008 case. In sum, the Trustee has proven by a preponderance of the evidence that the Debtor knew about the safe deposit box and the cash at the time he filed his schedules and answered Question 12 of his Statement of Financial Affairs in connection with the present bankruptcy case. Given the value of the cash in the safe deposit box, the Debtor’s omissions and false statement on the Statement of Financial Affairs is material. The court concludes that the Debtor’s discharge should be revoked under 11 U.S.C. § 727(d)(1). CONCLUSION For the foregoing reasons, the court finds for the Trustee on his claim under section 727(d)(1) and orders that the Debt- or’s discharge be revoked. The Trustee shall submit a judgment in conformity with this Memorandum Ruling within 30 days. SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494688/	461OPINION SHEA-STONUM, Bankruptcy Judge. Kellie Ward Smyth (the “Debtor”) appeals from the bankruptcy court’s order finding the Debtor’s student loans had not been discharged in her no asset Chapter 7 case and denying the Debtor’s motion to reopen her case to pursue an alleged violation of the discharge injunction by the holders of her student loans. I.ISSUES ON APPEAL The issue raised in this appeal is whether the bankruptcy court abused its discretion in denying the Debtor’s motion to reopen her bankruptcy case. II.JURISDICTION AND STANDARD OF REVIEW The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States Bankruptcy Court for the Middle District of Tennessee has authorized appeals to the Panel, and neither party has timely elected to have this appeal heard by the district court. 28 U.S.C. §§ 158(b)(6), (c)(1). A final order of the bankruptcy court may be appealed as of right pursuant to 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S.Ct. 1494, 1497, 103 L.Ed.2d 879 (1989) (citations and internal quotations omitted). A bankruptcy court’s order denying a motion to reopen the debtor’s bankruptcy case is a final and appealable order. See, e.g., In re Staffer, 306 F.3d 967, 971 (9th Cir.2002). The decision on a motion to reopen is committed to the sound discretion of the trial court and the reviewing court should not set aside the bankruptcy court’s decision absent an abuse of discretion. See In re Madaj, 149 F.3d 467, 468 (6th Cir.1998). Therefore, findings of fact are not set aside unless clearly erroneous and matters of law are reviewed de novo. See Id. at 468. III.FACTS The Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on July 17, 2003. No student loan debts were listed in her voluntary petition for relief. A notice of Chapter 7 Bankruptcy filing was sent to the creditors listed by the Debtor on her schedules. The notice directed creditors not to file a proof of claim unless and until they receive further notification. On October 16, 2003, the Debtor filed an amended Schedule F which lists Edameri-ca as a creditor holding a student loan in the amount of $76,654.86. On October 23, 2003, the bankruptcy court issued a general Chapter 7 discharge to the Debtor. No adversary proceedings were commenced during the pendency of the Debtor’s Chapter 7 case, and it is undisputed that no determination of undue hardship was requested of or made by the bankruptcy court. On April 29, 2004, the Chapter 7 Trustee filed a no asset report, and thereafter, the bankruptcy court entered a final decree and closed the case on May 21, 2004. On February 28, 2011, the Debtor filed a motion to reopen her Chapter 7 case, not to seek a discharge of her student loans, but to pursue sanctions and damages against the holder of her student loans for an alleged violation of the discharge injunction. Edamerica, Inc. and various other parties, including the guarantor of the Debtor’s student loans, opposed the motion to reopen. The bankruptcy court held a hearing on the motion to reopen. At the conclusion of the hearing, the bankruptcy court denied the motion to reopen and 462entered an order in accordance with that ruling on April 29, 2011. The Debtor timely filed this appeal. IV. DISCUSSION Section 350(b) provides that a bankruptcy court, in its discretion, may reopen a bankruptcy case to provide relief to the debtor or for other cause. 11 U.S.C. § 350(b). A bankruptcy case should not be reopened if doing so is futile. In re Jenkins, 330 B.R. 625, 628 (Bankr.E.D.Tenn.2005). See also Zirnhelt v. Madaj (In re Madaj), 149 F.3d 467, 472 (6th Cir.1998) (case will not be reopened where the reopening will have no effect). Here, the only reason the Debtor seeks to reopen her case is to obtain relief from what she alleges is a violation of the discharge injunction. The appellees argue that the relief sought by the Debtor is unavailable or futile. The Debtor relies on United Student Aid Funds v. Espinosa, — U.S. -, 130 S.Ct. 1367, 176 L.Ed.2d 158 (2010), for the proposition that her student loan was discharged by the entry of the general discharge order in her no asset Chapter 7 case. As noted by the bankruptcy court in its order denying the Debt- or’s motion to reopen, Espinosa is not applicable to a Chapter 7 case and does not provide the Debtor with a basis for the relief sought in her motion to reopen. See also, In re Walker, 427 B.R. 471, 479-80 (8th Cir. BAP 2010) (chapter 7 discharge order could not be construed as a final order determining the dischargeability of student loans). Student loans are not discharged in bankruptcy absent a determination of undue hardship in an adversary proceeding. See 11 U.S.C. § 523(a)(8) and Fed. R. Bankr.Pro. 7001(6). In addition, Edamerica filed a motion for fees and costs pursuant to Fed. R. Bankr.Pro. 8020 (the “Motion for Costs”). Bankruptcy Rule 8020, which mirrors Fed. R.App. Pro. 38, provides, “If a district court or bankruptcy appellate panel determines that an appeal from an order, judgment, or decree of a bankruptcy judge is frivolous, it may, after a separately filed motion or notice from the district court or bankruptcy appellate panel and reasonable opportunity to respond, award just damages and single or double costs to the appellee.” An appeal is frivolous “when the result is obvious or when the appellant’s argument is wholly without merit.” Pieper v. Am. Arbitration Assoc., 336 F.3d 458, 465 (6th Cir.2003). Although the Panel finds the appeal is frivolous, the Panel declines to award sanctions in this instance because there is not a Sixth Circuit ease addressing the precise substantive issue raised by Debtor in this appeal. See Walker v. City of Bogalusa, 168 F.3d 237, 241 (5th Cir.1999). Y. CONCLUSION The bankruptcy court did not abuse its discretion in denying the Debtor’s motion to reopen. The decision of the bankruptcy court is AFFIRMED. The Motion for Costs is denied for the reasons stated above.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494689/	MEMORANDUM OPINION JAMES D. WALKER, JR., Bankruptcy Judge. This matter comes before the Court on confirmation of Debtor’s second amended plan of reorganization. This is a core matter within the meaning of 28 U.S.C. § 157(b)(2)(L). After considering the pleadings, the evidence, and the applicable authorities, the Court enters the following findings of fact and conclusions of law in conformance with Federal Rule of Bankruptcy Procedure 7052. Findings of Fact Background Debtor, Rosewood at Providence, operates a single-asset real estate development consisting of medium-rise luxury condominiums in Charlotte, North Carolina. On February 11, 2010, Debtor filed a voluntary Chapter 11 petition. Debtor continues to operate its business and manage its property as a debtor-in-possession. On March 14, 2011, Debtor filed its second amended plan of reorganization and disclosure statement. The Court set a deadline of April 18, 2011, for casting ballots and filing objections to the plan. Star Electric Company, Batson-Cook Company (Debtor’s general contractor), and Rosewood at Providence Homeowner’s Association, Inc. (“HOA”) filed objections to confirmation based on unresolved water intrusion issues affecting the condominium units and voted to reject the plan. Branch Banking & Trust Company (“BB & T”) filed an objection alleging multiple failures to comply with the confirmation requirements and other provisions of the Bankruptcy Code. BB & T also voted to reject the plan. The Court held a hearing on the plan and disclosure statement on April 20, 2011, during which Debtor introduced evidence of the plan’s compliance with the requirements for confirmation. BB & T and the Multi-Lender Agreement On April 14, 2006, Debtor entered into a Construction Loan Agreement (the “Loan Agreement”) with multiple lenders to finance the development of condominium units that are owned by Debtor and that 622serve as collateral for the loans.1 The Loan Agreement provides that Debtor will “borrow from each Lender” and that each lender will “make advances of its Pro Rata Share of the Loan proceeds.” (Loan Agreement § 2.1(a), docket no. 561, exhibit A.) On the petition date, three lenders were parties to the Loan Agreement: (1) MV Rosewood as successor to Regions Bank, N.A. and PNC Bank, N.A.; (2) First Tennessee Bank; and (3) BB & T as successor to Colonial Bank, N.A. (the “secured lenders”). In connection with the Loan Agreement, Debtor executed a promissory note in favor of Colonial Bank, which is now held by BB & T. The note requires Debtor to pay Colonial Bank “under that certain Construction Loan Agreement ... as agent for the benefit of the Lenders[.]” (Promissory Note, docket no. 561, exhibit E; First Amended and Restated Promissory Note, docket no. 561, exhibit F.) The obligations governed by the Loan Agreement are divided in approximate proportion as follows: MV Rosewood holds 76%, First Tennessee holds 13%, and BB & T holds 11%.2 The Loan Agreement provides for the appointment and authorization of an administrative agent. Debtor and BB & T agree that the administrative agent is MV Rosewood (as successor of Regions Bank). Section 7.1 of the Agreement sets forth the scope of the agent’s authority in relevant part as follows: (a) Each lender hereby irrevocably (subject to Section 7.93) appoints, designates and authorizes Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein [.] (c) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy reorganization, arrangement, adjustment, composition or other judicial proceeding relative to Borrower or Guarantor, no individual Lender or group of Lenders shall have the right, and the Administrative Agent ... shall be exclusively entitled and empowered on behalf of itself, and the Lenders, by intervention in such proceeding or otherwise: (i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loan and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the lenders and the Administrative Agent ... allowed in such judicial proceeding; and (ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same[J 623Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of the Lenders except as approved by the Required Lenders or to authorize the Administrative Agent to vote in respect of the claims of the Lenders except as approved by the Required Lenders in any such proceeding. Loan Agreement § 7.1 (emphasis added). The Loan Agreement defines “Required Lenders” as “Lenders having more than 50% of the Aggregate Commitments^]” Loan Agreement § 1.1. Because MV Rosewood holds approximately 76% of the commitments under the Loan Agreement, it is the sole required lender. Debtor’s second amended plan of reorganization classifies the secured lenders in Class IB. No other creditors are included in the class. Section 3.2.2 of the plan makes the following provisions for Class IB: Debtor’s remaining condominium units, along with certain other claims and interests of Debtor will be transferred to Newco, a newly created limited liability company. Newco will be owned by the secured lenders on the effective date of the plan in pro-rata shares equal to each lender’s interest in the Loan Agreement. The secured lenders will receive the LLC membership shares in exchange for full satisfaction of their claims4 and the assumption of exit financing. MV Rosewood will provide the exit financing to Debtor in the amount of $2.25 million, which will be secured by a first priority lien in the remaining units. In addition, § 10.7 of the plan provides for the release of all liens on the condominium units other than the Class 1A mechanics’ liens and the exit financing lien. The Plan Debtor’s plan is a liquidating plan. It provides for seven classes of claims as follows: • Class 1A: Allowed secured claims of materialmen whose liens are senior to the members of Class IB. • Class IB: Allowed secured claims of the secured lenders under the Loan Agreement. • Class 1C: Allowed secured claims of materialmen whose liens are junior to the members of Class IB. • Class ID: The HOA’s claims for unpaid dues. • Class IE: The claims of Batson-Cook. • Class 2: Priority claims. • Class 3: Allowed claims of convenience creditors whose claims total $5,000 or less or who have voluntarily reduced their claims to $5,000. • Class 4: General unsecured creditors. • Class 5: Unliquidated tort claims of individual condominium owners and of the HOA for the negligent construction of the units, resulting in water intrusion problems. • Class 6: Claims of Jerry Stephens, the principal of Debtor. • Class 7: Equity interests of Debtor. 624The plan identifies all classes as impaired. Classes 1A, IB, 1C, ID, IE, 3, 4, and 5 have accepted the plan. Classes 1A, IE, and 5 initially voted to reject the plan but have provided written acceptances based on a plan modification filed on October 19, 2011.5 The modification did not affect the treatment of Class IB claims. With respect to Class IB, MV Rosewood and Bank of Tennessee, who account for 89% of the claim amount and 2/3 of the members of the class, cast votes accepting the plan, and BB & T cast a vote rejecting the plan. No priority claims have been filed in the case; thus, no votes were cast for Class 2. Although Class 6 is a voting class, its sole claim holder did not submit a ballot and, therefore, has not accepted the plan. Class 7 is a nonvoting class because its interests are being extinguished, and it is deemed to reject the plan. As discussed above, the plan provides for the transfer of the remaining condominium units to Newco, owned by the Class IB secured lenders, in full satisfaction of the Class IB claims. Exit financing will be used to fund payments to several classes of junior creditors. In addition, the plan provides a mechanism for satisfying Debtor’s delinquent dues obligations to the HOA, which will serve to. remove barriers to retail financing for buyers of the units,6 and it provides a means of correcting the water intrusion issues. During the April 20, 2011, confirmation hearing, Debtor introduced the testimony of multiple witnesses: Jerry Stephens, the principal of Debtor, testified regarding the plan’s general compliance with the confirmation criteria. T.B. Harris, Jr., an appraiser, provided expert testimony regarding the present value of the remaining units owned by Debtor in a quick sale to an unrelated party. Doug Stephan, a representative of MV Rosewood and Newco, testified about the intent of the parties acquiring Debtor’s remaining units under the plan to continue to develop those units for sale at retail and to maximize their value. Mr. Stephens testified that, to the best of his knowledge, the plan complies with all applicable provisions of the Bankruptcy Code, and the plan proponent has complied with all applicable provisions of the Bankruptcy Code. Mr. Stephens also testified that no government regulatory commission governs rates charged by Debtor. Mr. Stephens further testified he believes the plan is fair and equitable to creditors because it provides for finishing the units, and solving the water intrusion problem, which will increase the retail value of the units and provide creditors with a greater distribution than they would receive in a Chapter 7 liquidation. Mr. Harris testified that the value of the 49 units that were unsold as of March 11, 2011, is $15.5 million from a bulk sale on the effective date of the plan to a third party. Mr. Harris arrived at this figure by applying a 20% discount rate to the expected future net cash flows from the property over an absorption period of 36 months. The 20% discount rate includes the cost of funds plus a risk factor representing an acceptable return to an investor in an arm’s length transaction.7 Although 625Mr. Harris did not conduct a Chapter 7 liquidation analysis, he testified that in his opinion, the liquidation value of the remaining units would be significantly below $15.5 million. Doug Stephan testified that the parties acquiring the remaining units intend to develop and market the units for sale at retail and that they have a plan for doing so. He also testified that the Chapter 11 plan will provide a greater return on the units than a liquidation sale because it provides a means for resolving the water intrusion issues and it eliminates obstacles to homeowner financing posed by the existence of the bankruptcy case, underfunded HOA accounts, and past due HOA membership fees. At the conclusion of the hearing, Debtor requested a continuance to attempt to resolve objections to the plan. The Court granted the continuance and reconvened the hearing on October 19, 2011. At that time, Debtor announced a resolution with Star Electric, Batson-Cook, and the HOA, each of which withdrew its objection and changed its vote to accept the plan. The only remaining objection outstanding is that of BB & T. The Court heard oral arguments on BB & T’s objection and solicited briefs from the parties. Having considered all the relevant facts and legal arguments, the Court concludes that BB & T has accepted the plan through the vote of its agent and that the plan meets all the requirements for confirmation. Therefore, the plan will be confirmed. Conclusions of Law BB & T Authorized MV Rosewood to Vote on and to Accept the Plan on Its Behalf As a threshold matter, the Court must determine whether BB & T is entitled to vote on the plan. BB & T contends that because it holds a secured claim against Debtor, it is entitled to vote on and object to the plan. The parties agree that the Loan Agreement establishes a syndication loan, under which each lender, including BB & T, has a contractual relationship with Debtor.8 However, BB & T also has a contractual relationship with the other secured lenders through which it voluntarily bargained away certain rights in the event of Debtor’s bankruptcy. BB & T concedes that the administrative agent has authority under § 7.1(c) to vote on and accept the plan on behalf of BB & T when so approved by the required lender. However, BB & T contends the agent’s authority to do so is qualified by § 8.9 of the Loan Agreement, which requires the unanimous approval of the secured lenders for certain actions. 626Section 8.9 of the Loan Agreement is titled “Amendments; Survival.” It provides in relevant part as follows: Administrative Agent and Lenders shall be entitled to amend any of the terms, conditions or agreements set forth in Article VII or as to any other matter in the Loan Documents respecting payments to Administrative Agent or Lenders or the required number of the Lenders to approve or disapprove any matter or to take or refrain from taking any action, without the consent of Borrower.... Subject to the foregoing, Administrative Agent may amend or waive any provision of this Agreement or any other Loan Document, or consent to any departure by any party to the Loan Documents therefrom which amendment, waiver or consent is intended to be within Administrative Agent’s discretion or determination, or otherwise in Administrative Agent’s reasonable determination shall not have a Material Adverse Effect; provided however, otherwise no such amendment, waiver or consent shall be effective unless in writing, signed by the Required Lenders and Borrower or the applicable party to the Loan Documents, as the case may be, and acknowledged by Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided further however, no such amendment, waiver or consent shall: (g) release the liability of Borrower or any existing Guarantor without the written consent of each Lender; (h) permit the sale, transfer, pledge, mortgage or assignment of any Loan collateral or any direct or indirect interest in Borrower, except as expressly permitted under the Loan Documents, without the written consent of each Lender; or (i)transfer or release any lien on, or after foreclosure or other acquisition of title by Administrative Agent on behalf of the Lenders transfer or sell, any Loan collateral except as permitted in Section 7. 10, without the written consent of each Lender[.] Loan Agreement § 8.9 (emphasis in original). In short, under § 8.9 the administrative agent may amend or waive provisions of the Loan Agreement or consent to a departure from the loan documents, except that the amendment, waiver, or consent cannot release guarantors, transfer collateral, or release liens without the written consent of all lenders. BB & T argues that section 8.9 conflicts with the administrative agent’s right to accept Debtor’s Chapter 11 plan on behalf of BB & T because the plan will result in the transfer of collateral, release of liens, and release of guarantors without BB & T’s written consent. Under North Carolina law, which governs the Loan Agreement, when the general and specific terms of an agreement conflict, the specific terms prevail. Development Enter. of Raleigh v. Ortiz, 86 N.C.App. 191, 356 S.E.2d 922, 924-25 (1987). To the extent there is any conflict between § 7.1(c) and § 8.9 of the Loan Agreement, § 7.1(c) is the more specific provision because it applies in a specific set of narrowly defined circumstances— the agent’s authority to act in the event of Debtor’s bankruptcy.9 Section 8.9, on the 627other hand, applies to amendments to the Loan Agreement or loan documents. In this case, the agent has not proposed any amendment to or waiver of any provisions of the Loan Agreement and, thus, its actions do not implicate § 8.9. On the contrary, by voting to accept the plan on behalf of the secured lenders, the agent proposes to implement an existing provision of the Loan Agreement according to its terms. The consequences BB & T complains of — release of liens, release of guarantors, and transfer of collateral — are the foreseeable results of a borrower’s bankruptcy and could have been expressly excluded from the administrative agent’s power under § 7.1(c), as they were excluded from the agent’s amendment power. However, the Court will not imply a limitation on the agent’s authority to act in the borrower’s bankruptcy case simply because the parties agreed to limit the agent’s authority to amend the Loan Agreement. BB & T does not dispute that MV Rosewood is both the administrative agent and the required lender under the Loan Agreement. Furthermore, BB & T does not dispute that MV Rosewood, as the required lender, has approved the administrative agent to vote on and to accept the plan on behalf of all the secured lenders. Therefore, MV Rosewood is authorized to vote on behalf of all the secured lenders, including First Tennessee Bank and BB & T. Any separate votes cast by those lenders are of no consequence and shall not be included in the tally of votes. The Plan Does not Require the Court to Act Outside Its Jurisdiction BB & T argues that the plan requires the Court to act outside the scope of its authority because, by virtue of confirming the plan, the Court will be ordering BB & T to enter into an LLC agreement where none previously existed and will be modifying BB & T’s contractual rights with its agents. BB & T is mistaken. As the Court has determined, MV Rosewood is authorized to accept the plan on BB & T’s behalf. Thus, BB & T, through its agent, is voluntarily taking on new contractual obligations. This was part of the bargain BB & T agreed to when it purchased Colonial’s interest in the Loan Agreement. The Court’s role is merely to determine whether the confirmation criteria are satisfied. While a confirmation order binds the parties to the provisions on the plan pursuant to 11 U.S.C. § 1141(a), the parties here are being bound to their own consensual agreements, not to any treatment unilaterally imposed by the Court. The Plan Meets all Requirements for Confirmation The requirements for confirmation of a Chapter 11 plan are set forth in 11 U.S.C. § 1129(a). The Court has an independent duty to ensure each requirement is satisfied. See In re Lett, 682 F.3d 1216, 1229 (11th Cir.2011) (citing In re Piper Aircraft Corp., 244 F.3d 1289, 1299-1300 n. 4 (11th Cir.2001); In re Baugh, 73 B.R. 414, 416 (Bankr.E.D.Ark.1987)). The requirements are evaluated under a preponderance of the evidence standard. In 628re Atlanta S. Bus. Park, Ltd., 173 B.R. 444, 447-48 (Bankr.N.D.Ga.1994). Section 1129(a)(1): The plan complies with the Bankruptcy Code. Section 1129(a)(1) requires the plan to comply “with the applicable provisions” of the Bankruptcy Code. Jerry Stephens, the principal of Debtor, testified it does. BB & T disagrees. Specifically BB & T points to violations of § 524(e) because the plan releases guarantors; § 364 because the plan provides for a priming lien on the remaining condominium units without providing adequate protection to the secured lenders; and § 1123 because the plan does not classify BB & T’s unsecured deficiency claim. The Court finds no merit in any of these arguments. Guarantors: At the time the Loan Agreement was executed, Jerry Stephens, Sheryl Stephens, and WCDM Development also executed guarantees of the loan. The plan provides for full satisfaction of Debtor’s obligations under the Loan Agreement via membership interests in an LLC that will become the owner of the condominium units securing the loan. BB & T argues that, by providing for full satisfaction of its obligations, the plan effectively releases the guarantors from liability 10 and that such a result is barred by § 524(e). Section 524(e) states: “Except as provided in subsection (a)(3) of this section, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt.” As the Sixth Circuit Court of Appeals noted in In re Dow Corning Corp., 280 F.3d 648, 657 (6th Cir.2002), “this language explains the effect of a debtor’s discharge. It does not prohibit the release of a non-debtor.” Because the plan at issue in this case is a liquidating plan,11 confirmation will not result in entry of a discharge. 11 U.S.C. § 1141(d)(3)(A). Furthermore, courts generally hold that a plan provision releasing guarantors does not violate § 524(e) if the creditor consents to the release. In re Specialty Equip. Cos., Inc., 3 F.3d 1043, 1047 (7th Cir.1993). In this case, BB & T, through its agent, consented to the plan and all its consequences. Thus, BB & T’s argument fails on three grounds. First, the plan does not by its terms provide for the release of the guarantors’ liability. Second, BB & T consented to full satisfaction of its debt and any results that flow from that. Third, while the guarantors may be released from liability by the extinguishment of the outstanding debt — which extinguishment is detailed in the plan — such a release is not a function of entry of a discharge. Therefore, the Court concludes the plan does not run afoul of § 524(e). Priming liens: Section 364(d)(1) authorizes the trustee to obtain credit secured by a lien on property that primes an existing lien if “(A) the trustee is unable to obtain such credit otherwise; and (B) there is adequate protection of the interest of the holder of the lien on the property of the estate on which such senior or equal lien is proposed to be granted.” Under the plan, the condominium units that currently serve as collateral under the Loan Agreement will be transferred to Newco, BB & T will receive a membership interest in Newco in full satisfaction of its debt, and the secured lenders’ liens against the units will be released. MV Rosewood will pro629vide exit financing that will be secured by a new lien on the units. BB & T contends the exit financing lien primes its lien and cannot be allowed unless BB & T receives adequate protection. BB & T is incorrect. The plan provides for the extinguishment of its liens, not for the priming of its liens. However, even if the plan were construed to prime BB & T’s lien, BB & T agreed to such treatment by accepting the plan. Therefore, the plan does not violate § 364. Classification of deficiency claims: Section 1123(a)(l)-(3) requires a Chapter 11 plan to “designate ... classes of claims,” to specify whether or not the class is impaired, and to specify treatment for impaired claims. BB & T argues that the secured lenders have an unsecured deficiency claim under § 506(a)12 because the amount of their claim (approximately $23 million) exceeds the value of the collateral as it existed on March 11, 201113 ($15.5 million). And, the plan’s failure to classify and provide treatment for their unsecured claim violates § 1123. First, the secured lenders have not asserted an unsecured claim. On the contrary, their proof of claim asserts a secured claim of $23,982,731.21 and no unsecured claim. Pursuant to Bankruptcy Rule 3001(f), “[a] proof of claim executed and filed in accordance with these rules shall constitute prima facie evidence of the validity and amount of the claim.” Furthermore, under § 502(a), when a proof of claim is filed, the claim “is deemed allowed, unless a party in interest ... objects.” Because no objection to the claim has been filed, the secured lenders are deemed to have an allowed secured claim in the amount set forth in their proof of claim. Thus, there is no unsecured claim to be classified. Second, even assuming the secured lenders held an unsecured claim, the Code does not require such claims to be classified separately. Instead, it requires similar claims to be placed in the same class. 11 U.S.C. § 1122(a). The court in In re Orfa Corp. of Philadelphia, 129 B.R. 404, 416-17 (Bankr.E.D.Penn.1991), found that a plan may place a creditor’s secured and unsecured claims in the same class when the claims arise out of the same obligation and when such classification is not the result of gerrymandering to obtain acceptance of the plan by an impaired class. In this case, BB & T’s claim arises in its entirety from BB & T’s interest in the Loan Agreement. It is included in Class IB, which contains only claims arising from the Loan Agreement. The plan identifies the class as impaired and fully explains the class’s treatment. BB & T accepted such treatment through its agent. Furthermore, there is no suggestion of gerrymandering to create an accepting impaired class, because multiple impaired voting classes have accepted the plan. The facts here show no violation of § 1123. For the foregoing reasons, the Court finds the plan complies with the applicable provisions of the Bankruptcy Code and therefore satisfies § 1129(a)(1). Section 1129(a)(2): The proponent of the plan complies with the Bankruptcy Code. Section 1129(a)(2) requires that a plan proponent “complfy] with the applicable provisions of this title,” including without limitation §§ 1125 and 1126. Mr. Stephens testified that Debtor has complied, and no party has asserted otherwise. Therefore, the Court finds that § 1129(a)(2) is satisfied. 630Section 1129(a)(3): The plan is proposed in good faith. Section 1129(a)(3) requires the plan to be “proposed in good faith and not by any means forbidden by law.” Debtor can establish good faith by showing: there is a reasonable likelihood that the plan will achieve a result consistent with the objectives and purposes of the Code.... Where the plan is proposed with the legitimate and honest purpose to reorganize and has a reasonable hope of success, the good faith requirements of section 1129(a)(3) are satisfied.... The focus of a court’s inquiry is the plan itself, and courts must look to the totality of the circumstances surrounding the plan, ... keeping in mind the purpose of the Bankruptcy Code is to give debtors a reasonable opportunity to make a fresh start. McCormick v. Banc One Leasing Corp. (In re McCormick), 49 F.3d 1524, 1526 (11th Cir.1995) (citations omitted). In this case, the totality of the circumstances indicate the plan has been proposed in good faith. The plan is the result of extensive negotiations. It provides for payment in full of Class 1A claims, it provides for remedying defects on assets that will be transferred to the Class IB claim holders, and it provides for distributions to other creditors who would have received nothing in a liquidation. For these reasons, the plan satisfies § 1129(a)(3). Section 1129(a)(4): Payment of costs and expenses is subject to court approval. Section 1129(a)(4) requires that any payments “for services or for costs and expenses in or connection with the case” be approved by the Court as reasonable. Section 9.1 of the plan provides for retention of jurisdiction by the Court to hear and determine all applicable applications for allowance of compensation and reimbursement of expenses. Section 3.1.1 of the plan establishes a 60-day deadline from the service of notice of the confirmation order for filing of final applications for professional fees. The procedures set forth in the plan satisfy the requirements of § 1129(a)(4). Section 1129(a)(5): Identity of management and insiders has been disclosed. Section 1129(a)(5) requires that: (i) the plan proponent disclose the identity and affiliations of the proposed officers and directors of the reorganized debtor or any successor to the original debtor; (ii) the appointment of such officers and directors be consistent with the interests of the creditor and equity security holders and with public policy; and (iii) the plan proponent disclose the identity and compensation of any insiders to be retained or employed by the reorganized debtor. This information is disclosed in Article IV of the plan, which provides that the manager of the debtor-in-possession will be its sole member, WCDM Development L.P., acting through its general partner, J & S Acquisitions, Inc., acting through its president, Jerry L. Stephens, who will not be compensated. This disclosure is sufficient to satisfy § 1129(a)(5). Section 1129(a)(6): No regulatory approvals are needed. Section 1129(a)(6) requires that any regulatory commission having jurisdiction over the rates charged by the reorganized debtor approves any rate changes provided for in the plan. Mr. Stephens testified Debtor does not charge any rates subject to regulatory approval. Therefore, § 1129(a)(6) is satisfied. Section 1129(a)(7): Best interests test. Section 1129(a)(7) provides as follows With respect to each impaired class of claims or interests— (A) each holder of a claim or interest of such class— (i) has accepted the plan; or 631(ii)will receive or retain under the plan on account of such claim or interest property of a value, as of the effective date of the plan, that is not less than the amount that such holder would so receive or retain if the debtor were liquidated under chapter 7 of this title on such date[.] 11 U.S.C. § 1129(a)(7) (emphasis added). To satisfy the best interests test, each claim holder in an impaired class must either accept the plan or receive not less than it would receive in Chapter 7 liquidation. BB & T contends the test is not satisfied because the plan will not provide it with at least the present value of what it would receive in a Chapter 7 liquidation. The plan identifies all classes , as impaired. However, all classes entitled to vote under the plan have accepted the plan, except Class 6. Although BB & T objects to the plan, it accepted the plan through the vote of its agent. Even if BB & T held a separate and independent claim and had voted against the plan, the Court finds it will receive more under the plan that it would in a liquidation. Mr. Harris testified that the liquidation value of the units would be substantially less than the present value of $15.5 million. His opinion was uncontested. Under the plan, BB & T will have an interest in the remaining condominium units (via its membership in the Newco LLC), which can be sold in a finished state, free from water intrusion defects, and free from obstacles to retail financing. By contrast, in a liquidation, BB & T would merely receive a share in the proceeds from unfinished, defective units. Even taking into account the $2.25 million exit financing lien on the units, the Court is persuaded the plan offers a better value to BB & T than Chapter 7 liquidation would. With respect to the nonaccepting impaired classes, Class 6 did not vote to accept the plan, but Class 6 has previously subordinated its claims to other creditors and will receive no more than it would receive in a Chapter 7 liquidation. Class 7, which neither receives nor retains any property under the Plan, is deemed to have rejected the plan pursuant to § 1126(g). A Chapter 7 liquidation of Debtor’s estate would decrease the proceeds available for distribution to creditors, because the units would be sold subject to the water intrusion issues and without the Fannie Mae certification that benefits retail buyers. As a result, Class 7 would receive no distribution in a liquidation. Therefore, the class is not harmed by the plan, and § 1129(a)(7) is satisfied. Section 1129(a)(8): Class acceptance. Under § 1129(a)(8), each class must either accept the plan or not be impaired by it. In this case all classes entitled to vote have accepted the plan, except Class 6. In addition, Class 7 is deemed to reject the plan under § 1126(g) because the interests in the class will not receive or retain any property under the plan. While § 1129(a)(8) is not satisfied, the plan may still be confirmed pursuant to a cramdown under § 1129(b), discussed below. Section 1129(a)(9): Priority claims. Section 1129(a)(9) sets forth the treatment that must be afforded to priority claims, unless the claim holder agrees otherwise. Section 3.1.1 of the plan provides that administrative claims will be paid in full on the effective date of the plan or on the date in which such claim becomes an allowed claim. Section 3.1.2 provides the same treatment for priority tax claims. These provisions satisfy the requirements § 1129(a)(9). Section 1129(a) (10): One consenting impaired class. Under § 1129(a)(10), at 632least one class of impaired claims, other than insiders, must vote to accept the plan. In this case, all impaired classes entitled to vote, other than Class 6, have accepted the plan. Therefore, § 1129(a)(10) is satisfied. Section 1129(a) (11): Feasibility. Under § 1129(a)(ll), the Court may not confirm a plan that is “likely to be followed by the liquidation, or the need for further financial reorganization ... unless such liquidation or reorganization is proposed in the plan.” Section 4.1 of the plan provides that the plan is a liquidating plan. Furthermore, MV Rosewood has committed to provide exit financing to pay creditors under the plan. Therefore, there will be no further need for reorganization, and the plan meets the feasibility requirement of § 1129(a)(ll). Section 1129(a) (12): Payment of U.S. Trustee fees. Section 1129(a)(12) requires that all fees payable under 28 U.S.C. § 1930 have either been paid or will be paid on the effective date of the plan. Section 3.1.1 of the plan provides that such fees shall be paid in full on the effective date either out of cash on hand or out of the exit financing. Therefore, § 1129(a)(12) is satisfied. Sections 1129(a)(13) to (a)(16): Miscellaneous inapplicable provisions. The remaining provisions of § 1129(a) are inapplicable to this case. Subsection (a)(13) applies to certain retiree benefits not present in this case, subsection (a)(14) applies to domestic support obligations, subsection (a)(15) applies to individual debtors, and subsection (a)(16) applies to nonprofit entities. Section 1129(b): Cramdown. Based on the foregoing, Debtor has demonstrated the plan’s compliance with all subsections of § 1129(a) except (a)(8). Therefore, the plan is not eligible for consensual confirmation. Nevertheless, the plan may be confirmed if the provisions of § 1129(b), commonly known as cramdown, are satisfied. Section 1129(b)(1) provides as follows: [I]f all of the applicable requirements of subsection (a) of this section other than paragraph (8) are met with respect to a plan, the court, on request of the proponent of the plan, shall confirm the plan notwithstanding the requirements of such paragraph if the plan does not discriminate unfairly, and is fair and equitable with respect to each class of claims or interests that is impaired under, and has not accepted the plan. The only impaired classes that have not accepted the plan are Classes 6 and 7. Class 6 includes the unsecured insider claim of Mr. Stephens. A plan is fair and equitable with respect to a class of unsecured claims if junior claims or interests “will not receive or retain under the plan on account of such junior claim or interest any property[.]” 11 U.S.C. § 1129(b)(2)(B)(ii). In this case, the only junior claims or interests are the interests in Class 7, which will be extinguished. Thus, the cramdown requirements are satisfied as to Class 6. Class 7 consists of the holders of equity interests, who were deemed to reject the plan under § 1126(g) on account of not receiving or retaining any interest or property under the plan. Section 1129(b) (2)(C) (ii) provides that a plan is fair and equitable with respect to a class of interests if the holder of a junior interest “will not receive or retain on account of such junior interest any property.” Class 7 claims will receive no distribution and the equity interests will be cancelled; no interests are junior to Class 7. Thus, no junior interests are retaining property on account of their interest, and the cram-down requirements are satisfied as to Class 7. 633Because all nonaccepting impaired classes will receive fair and equal treatment under the plan, and because there is no evidence that the plan discriminates unfairly, the plan may be confirmed by cramdown. Conclusion The Court finds Debtor’s plan satisfies the requirements § 1129(a) other than (a)(8) and satisfies § 1129(b)(1). Therefore, the Court will confirm the plan. An Order in accordance with this Opinion will be entered on this date. SO ORDERED. . Also on April 14, 2006, Jerry L. Stephens, Sheryl B. Stephens, and WCDM Development, L.P. executed agreements guaranteeing the loan. . Debtor contends BB & T has an interest in 11% of the debt, and BB & T contends it has an interest in 13.5% of the debt. The difference in these figures is not material for purposes of this opinion. .Section 7.9 provides for a successor administrative agent upon the resignation or removal of the original administrative agent. . Pursuant to the terms of the Loan Agreement, the administrative agent filed one proof of claim in the amount of $23,892,731.21 for the total obligations outstanding under the Loan Agreement. BB & T did not file a separate proof of claim. Any references to BB & T's claim in this memorandum opinion are to its interest in the master claim. The Court makes no determination about whether BB & T’s interest in the master claim may be deemed a separate and independent secured claim, because such a ruling is unnecessary to resolve the issues in this case. . On October 19, 2011, Debtor filed a motion to modify a plan before confirmation pursuant to Fed. R. Bankr.P. 3019(a). The Court granted the motion. . Buyers of new units will not be eligible for government-backed financing as long as 15% or more of the units in the development are delinquent on HOA dues. Debtor currently retains more than 15% of the units and is past due on the HOA dues for those units. .Mr. Harris also calculated a present value for the remaining units of $20.1 million using a discount rate of 5%. Debtor apparently requested this calculation because the maxi625mum interest the secured lenders may receive under the Loan Agreement is 5%. However, the relationship between a 5% discount rate on future cash flows of the collateral and a 5% yield on loan principal is not clear, which renders the $20.1 million figure of dubious relevance. . This Court has previously observed that multi-lender transactions often take one of two forms: a syndication loan or a participation loan. "[W]ith syndication loans, multiple lenders loan money to the borrower, and each lender has a contractual arrangement with the borrower. By contractual agreement among the lenders, one lender is designated agent for all the lenders.... In a participation agreement, one lender (the lead lender) provides the loan, and only that lender has a contractual relationship with the borrower[.]” Tidwell v. Legrand (In re Amron Tech., Inc.), Bankr.Case No. 06-50508, Adv. No. 06-5081, 2007 WL 917236 (Bankr.M.D.Ga. March 22, 2007) (Walker, J.) (citing W. Crews Lott et al., Multiple Lender Transactions: Current Issues, 112 Banking L.J. 846, 846-47 (1995)). Based on these definitions, the Loan Agreement in this case is a syndication loan. . See Development Enter, of Raleigh, 356 S.E.2d at 925. At issue was construction of a partnership agreement regarding the appropriate price for acquiring the interest of a deceased partner from that partner’s estate. Section 7 of the partnership agreement pro627vided that defaulting partners (which expressly included deceased partners) were entitled to receive the "net value” of their interest. Section 19 provided that the partners could reacquire partnership interests that were in the hands of a stranger to the partnership agreement at a price determined by majority vote of the partners. The court held Section 7 was the more specific provision and should prevail because it "specifically deals with the death of a partner ... [wjhile section 19 deals generally with transferred partnership interests[.]” Id. Similarly § 7.1(c) of the Loan Agreement specifically deals with the bankruptcy of the borrower while § 8.9 deals generally with amendments to the Loan Agreement. . No provision of the plan expressly provides for the release of the guarantors’ liability. . See Second Amended Plan of Reorganization of the Debtor, § 8. 1, docket no. 359 ("This is a liquidating plan. The Debtor shall not receive a discharge as provided under 11 U.S.C. § 1141(d)(3).”). . Section 506(a) provides for bifurcation of oversecured claims into separate secured and unsecured claims. . At least seven of the units have since been sold.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494690/	MEMORANDUM OPINION JAMES D. WALKER, JR., Bankruptcy Judge. This matter comes before the Court on Plaintiffs complaint to determine the extent and validity of a lien and Defendants’ motion for summary judgment. This is a core matter within the meaning of 28 U.S.C. § 157(b)(2)(K). After considering the pleadings, the evidence, and the applicable authorities, the Court enters the following findings of fact and conclusions of law in conformance with Federal Rule of Bankruptcy Procedure 7052. Undisputed Facts On May 12, 2006, Debtor-Plaintiff Sharon D. Bishop borrowed $115,900 from Defendant GMAC Mortgage and executed a promissory note in that amount. Also on May 12, 2006, Plaintiff gave Defendant Mortgage Electronic Registration Systems, Inc. (“MERS”) a security deed on real property serving as her primary residence for the purpose of securing the note held by GMAC. The security deed provided that “MERS ... is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the grantee under this Security Instrument.” (Def. Mot. Summ. J’mt., Aff. of Juan Aguirre, Ex. B., Security Deed, p. 1., docket no. 24.1) It further provided that “Borrower does hereby grant and convey to MERS (solely as nominee for Lender and Lender’s successors and assigns) and to the successors and assigns of MERS, with the power of sale” of the property secured by the deed. (Security Deed, p. 3.) The security deed identifies GMAC as the lender, identifies the note by date and amount, and identifies the loan as the debt evidenced by the note. (Security Deed, p. 2.) The security deed was recorded on May 15, 2006, in the records of the Clerk of the Superior Court of Houston County, Georgia. At some unspecified later date, Plaintiff defaulted on the note payments. 635On September 9, 2010, MERS executed a transfer and assignment of the security-deed to GMAC. The assignment was recorded on September 20, 2010. On October 5, 2010, GMAC conducted a foreclosure sale of Debtor’s residence. GMAC was the highest bidder at the foreclosure sale in the amount of $99,093.09. On the same date as the foreclosure sale, GMAC executed a deed under power of sale to convey the property to GMAC. On November 3, 2010, Plaintiff filed a Chapter 13 petition. On January 20, 2011, GMAC recorded the deed under power of sale. Plaintiff filed a complaint to determine the extent and validity of lien, for declaratory judgment, and for other and further relief. In the complaint, Plaintiff challenges the validity of the foreclosure sale, alleging (1) the transfer the security deed from MERS to GMAC was void because MERS had no rights in the property to transfer, and therefore Plaintiffs residence was property of the estate; and (2) the recordation of the deed under power of sale violated the automatic stay. The three Defendants filed a motion for summary judgment. The Court held a hearing on the motion on November 21, 2011. At the hearing, the Court granted Defendants’ motion. This memorandum opinion supplements the announcement made at the hearing. Conclusions of Law Summary judgment is governed by Federal Rule of Bankruptcy Procedure 7056 and Federal Rule of Civil Procedure 56, which provides, “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(a). Defendants provided a statement of uncontested facts with their motion for summary judgment as required by Local Rule 7056-l(a). Although Debtor filed a brief raising various legal arguments, she did not file a “separate, short, and concise statement of the material facts” she contends are in dispute. LBR 7056 — 1(b). Therefore, the facts offered by Defendants are deemed admitted.2 LBR 7056-l(e). Because the material facts are undisputed, the only question is whether Defendants are entitled to judgment as a matter of law. In her brief, Debtor contends Defendants are not entitled to summary judgment because (1) the foreclosure sale is void or voidable due to a defect in the assignment of the power of sale from MERS to GMAC; or (2) she had an equitable right to appeal the foreclosure proceeding that had not expired as of the petition date. Validity of the Foreclosure Sale Debtor contends that the foreclosure sale is void or voidable because of a defect in the transfer of the power of sale. First, Debtor argues that MERS’s rights as a nominee are not defined in the security deed. Therefore, it is not authorized to transfer the power of sale under the security deed. Second, Debtor argues that the assignment of the power of sale from MERS to GMAC was made without consideration and was, therefore, ineffective. The Court finds both arguments unpersuasive. 636The security deed defines MERS’s authority and its relationship to GMAC. The relevant language includes the following: MERS ... is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the grantee under this Security Instrument. Borrower does hereby grant and convey to MERS (solely as nominee for Lender and Lender’s successors and assigns) and to the successors and assigns of MERS, with the power of sale, the following described property ... TO HAVE AND TO HOLD this property unto MERS (solely as nominee for Lender and Lender’s successors and assigns) and to the successors and assigns of MERS.... Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property!.] (Security Deed, p. 1, 3 (emphasis added).) Debtor first argues that because the security deed fails to define the rights of the nominee, Defendants are estopped from enforcing a particular definition of a nominee. Debtor cites Moss v. Moss, 265 Ga. 802, 463 S.E.2d 9 (1995) to support her argument. Moss involved a divorce settlement agreement that required the husband to transfer property of a certain value to the wife. Id. at 9. However, the court found the agreement was unenforceable because it did not include an essential term-the method of appraising the property to be transferred. Id. at 9-10. The security deed in this case has no similar deficiency. It states in at least four places that MERS is acting as GMAC’s nominee. Furthermore, it sets forth specific rights and duties of MERS: MERS is the grantee of the security deed and has the power of sale. This is sufficient to identify MERS as GMAC’s agent for a limited purpose. See O.C.G.A. § 10-6-1 (2009) (“The relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him[.]”); Drake v. Citizens Bank of Effingham (In re Corley), 447 B.R. 375, 380 (Bankr.S.D.Ga.2011) (“The language used in the Security Deed is sufficient to create an agency relationship [between the lender and MERS]”); contra Landmark Nat’l Bank v. Kesler, 289 Kan. 528, 216 P.3d 158, 166 (2009) (describing MERS as a straw man rather than an agent of the lender). For these reasons, the Court finds the security deed does not lack any essential terms regarding MERS’s role or its rights and duties. Debtor next argues that the assignment of the security deed from MERS to GMAC was invalid because it lacked consideration. In Bank of Cave Spring v. Gold Kist, Inc., 173 Ga.App. 679, 327 S.E.2d 800 (1985), which involved a dispute over the assignment of milk proceeds, the court said, “An assignment is a contract and, in order to be valid, must possess the same requisites (parties, subject matter, mutual assent, consideration) as any other contract.” Id. at 802 (citing 4A Words and Phrases 109). In this case, the transfer and assignment recited consideration (“value received”) but there is no evidence any consideration actually exchanged hands. However, the Court is not persuaded that consideration was necessary for this transaction. First, transfer of a security deed is significantly different from the assignment of 637a right to receive a stream of payments that was at issue in Bank of Cave Spring. The Court located no cases that discuss consideration in the context of the transfer of a security deed. However, such transfers are governed by statute. O.C.G.A. § 44-14-64(a) provides as follows: “All transfers of deeds to secure debt shall be in writing; shall be signed by the grantee or, if the deed has been previously transferred, by the last transferee; and shall be witnessed as required for deeds.” It makes no mention of consideration.3 Second, even if consideration is necessary to transfer a security deed, the transaction here was not an arm’s length transfer between independent parties. Instead, it was a transaction between a principal and agent that involved a change in the rights and duties of the agent. Although the document that memorialized the transaction is titled “Transfer and Assignment,” it is more akin to a revocation of MERS’s authority to act as GMAC’s nominee with respect to the security deed, for which no consideration is required.4 In this case, GMAC initiated the foreclosure sale, but earlier in its history, MERS itself often did so.5 However, MERS ceased this practice and established a policy of transferring the security instrument to the note holder — as in this case — in an apparent response to unfavorable court decisions that prevented MERS from exercising its power of sale in certain states. Adam Leitman Bailey & Dov Treiman, Correcting the MERS Errors to Establish a Secure, Profitable National Title System, 23 BNA’s Bankruptcy Law Reporter 1307, 1309-10 (Oct. 20, 2011). In some jurisdictions, including Georgia, MERS has been more successful. The courts here have refused to invalidate or enjoin a foreclosure sale initiated by the holder of the security deed who was not also the holder of the note. Kabir v. Statebridge Co., LLC, No. 1:11-cv-2747-WSD, 2011 WL 4500050, at 5 (N.D.Ga. Sept. 27, 2011) (collecting cases); see also LaCosta v. McCalla Raymer, LLC, No. 1:1-cv-1171-RWS, 2011 WL 166902, at 5-6 (N.D.Ga. Jan. 18, 2011). The issue of a split note and security instrument are not present in this case because GMAC, the original note holder and the foreclosing party, is in possession of both the note and the security deed. For the foregoing reasons the Court finds no defect in either the security deed or the transfer and assignment. At the 638time of the foreclosure sale, GMAC was vested with the power to sell Debtor’s residence. Therefore, the foreclosure sale was neither void nor voidable. Equitable Right of Redemption Debtor argues that because the foreclosure sale had not yet been recorded at the date of her bankruptcy filing, she retained an equitable right of redemption that became part of her bankruptcy estate, and the post-petition recordation of the sale violated the automatic stay. Debtor is mistaken. The law in Georgia is well established that the foreclosure sale itself cuts off all the debtor’s rights in real property. Williams v. SunTrust Bank (In re Williams), 393 B.R. 813, 820 (Bankr.M.D.Ga.2008); First Nationwide Mortg. Corp. v. Davis (In re Davis), No. 97-11093, 1998 WL 34066146, at *2-3 (Bankr.S.D.Ga. Jan. 21, 1998); see also Pearson v. Fleet Fin. Ctr., Inc. (In re Pearson), 75 B.R. 254, 255 (Bankr.N.D.Ga.1985) (“Georgia law states that the equity of redemption expires when the high bid is received at the foreclosure sale.”) The automatic stay prohibits certain actions against the debtor, property of the debtor, and property of the estate. 11 U.S.C. § 362(a). In this case, Debtor retained no interest in her residence on the petition date, so it did not become property of the estate. Consequently, GMAC did not violate the automatic stay by recording the sale post-petition. Equitable Right of Appeal Debtor’s final argument is that she has an equitable right to appeal the foreclosure pursuant to O.C.G.A. § 5-6-33(a)(1) that was still ripe on the petition date, and through that right of appeal, the bankruptcy estate retained an interest in the property. O.C.G.A. § 5 — 6—33(a)(1) provides as follows: “Either party in any civil case ... may appeal from any sentence, judgment, decision, or decree of the court [.]” Id. (emphasis added). Unfortunately for Debtor, foreclosure in Georgia does not involve any judgment, decision, or decree of a court. Thus, § 5 — 6—33(a)(1) does not apply to create a right to appeal. A court judgment may arise from a confirmation proceeding if the foreclosing creditor seeks to pursue a deficiency. O.C.G.A. § 44-14-161. However, no confirmation proceeding has been initiated in this case. Therefore, Debtor has no equitable right to appeal the foreclosure sale. , Conclusion The Court finds no defect in GMAC’s right to exercise the power of sale in the security deed or any other defect that would render the foreclosure sale void or voidable. Furthermore, the Court finds that Debtor retained no interest in her residence on the petition date. For these reasons, the Court concludes Defendants are entitled to judgment as a matter of law, and their motion for summary judgment will be granted. An Order in accordance with this Opinion will be entered on this date. SO ORDERED. . Hereinafter cited as “Security Deed.” . To the extent Debtor’s brief purports to dispute facts offered by Defendants, that effort is untimely. A response to the movant’s statement of uncontested facts must be filed “within 21 days of service” of the movant’s statement. LBR 7056-l(b). In this case, Defendants’ statement of facts was served on October 11, 2011, and Debtor’s response was not filed until 35 days later on November 15, 2011. . By comparison, O.C.G.A. § 44-5-30, which governs deeds to land generally provides that such deeds "must be in writing, signed by the maker, and attested by at least two witnesses. It must be delivered to the purchaser or his representative and be made on a good or valuable consideration.” . “Generally, an agency is revocable at the will of the principal.” O.C.G.A. § 10-6-33 (2009). . "In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system. The initial MERS mortgage is recorded in the County Clerk's office with 'Mortgage Electronic Registration Systems, Inc.’ named as the lender's nominee or mortgagee of record on the instrument. During the lifetime of the mortgage, the beneficial ownership interest or servicing rights may be transferred among MERS members (MERS assignments), but these assignments are not publicly recorded; instead they are tracked electronically in MERS's private system.” Merscorp, Inc. v. Romaine, 8 N.Y.3d 90, 828 N.Y.S.2d 266, 861 N.E.2d 81, 83 (2006) (footnotes omitted).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494691/	MEMORANDUM OPINION JAMES D. WALKER, JR., Bankruptcy Judge. The Court considers the matter of this involuntary petition sua sponte. This is a core matter within the meaning of 28 U.S.C. § 157(b)(2)(A), (O). After considering the pleadings, the evidence, and the applicable authorities, the Court enters the following findings of fact and conclusions of law in conformance with Federal Rule of Bankruptcy Procedure 7052. Findings of Fact On February 9, 2012, James Robert Rogers filed an involuntary Chapter 7 petition against Denise Fachini. On the petition, Mr. Rogers listed a claim against Ms. 640Fachini in the amount of $10 million. He attached to the petition a UCC-3, which is an amendment to a UCC financing statement, and three documents addressed to the Secretary of the United States Treasury Department. In summary, the documents first demand the Secretary to pay Ms. Fachini $10 million from Mr. Rogers’ U.S. Treasury trust account and then demand a chargeback of that amount to be deposited back into Mr. Rogers’ trust account. The UCC filing cites dishonor of the chargeback. The three documents addressed to the Secretary are dated September 10, 2011, and all reference HJR-192. First is an “International Bill of Exchange” labeled with invoice number JRR 9102011 8758 1919 9741. It names the Treasury Department as the Drawee, Ms. Fachini as the Payee, and Mr. Rogers as the Drawer/Maker. In the document, Mr. Rogers directs the Secretary to pay Ms. Fachini $10 million “from my UCC CONTRACT TRUST ACCOUNT NO. [redacted].1 This is in accord with PUBLIC POLICY 73-10 and HJR-192.” Second is a “Charge Back” that provides as follows: I have accepted for value all related endorsements in accordance with U.C.C. 3-419 and HJR-192. Please charge my UCC Contract Trust Account ... for the registration fees and command the memory of account number [redacted] to charge the same, to the debtors Order, or your Order. The total amount of this Bill of Exchange in the enclosed filing is $10,000,000 (Ten Million Dollars) and attached to said Birth Certificate instrument is the Birth Certificate Bond for Set Off for deposit into the UCC Contract Trust Account Number [redacted]. Third is a letter to the Secretary regarding the chargeback. The letter states: Please “Charge-Back (deposit) into my “UCC Contract Trust Account, [redacted], $10,000,000.00 (Ten Million Dollars) and charge my account for the fees necessary for securing and registration for the priority exchange for the tax exemption to discharge the public liability of my personal possessions, and command memory of account no. [redacted] to charge the same to the debtors order or your order. With this POSTED transaction the “CHARGEBACK” documented by the enclosed forms are for use by the Republic and is complete. Finally, Mr. Rogers filed the UCC-3 with the Clerk of the Superior Court of Crisp County, Georgia, on February 6, 2012. In Box 8, titled “AMENDMENT (COLLATERAL CHANGE),” he wrote the following: This Statement is an assignment of Collateral or Product of Collateral ... in which debtor holds all interest. This amendment partially releases and Partially assigns the value of the DISHONOR of the Invoice/Actual and Constructive Notice by DENISE FACHINI, ... INVOICE NO. JRR 9102011 8758 1919 9741[.] At issue in this case is whether or not the involuntary petition was properly commenced. Because the Court finds that Mr. Rogers does not hold a valid claim against Ms. Fachini, the case will be dismissed. 641Conclusions of Law Section 303 of the Bankruptcy Code governs involuntary petitions. An involuntary petition may be commenced by an entity that “is either a holder of a claim against [the debtor] that is not contingent as to liability or the subject of a bona fide dispute as to liability or amount, or an indenture trustee representing such a holder.” 11 U.S.C. § 303(b). A “claim” is defined as follows: (A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or (B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured. 11 U.S.C. § 101(5). On the petition, Mr. Rogers alleges he holds a “commercial” claim against Ms. Fachini in the amount of $10 million. The documents filed by Mr. Rogers to support his claim only serve to undermine it by revealing it to be a sham. Mr. Rogers purported to write Ms. Fachini the equivalent of a check (the bill of exchange) for $10 million drawn on his account with the U.S. Treasury. There is no indication that he ever tendered the check to Ms. Fachini or that she ever presented it for payment. Nevertheless, Mr. Rogers sought a charge-back of the $10 million dollars on the same date that he issued the bill of exchange. He then filed a UCC-3 statement indicating the chargeback had been dishonored. Nothing in the documents indicates why Mr. Rogers issued the bill of exchange to Ms. Fachini or why she was obligated to return the funds to him. More importantly, the bill of exchange had no legal effect. Other courts have found bills of exchange purporting to be drawn against a trust account at the U.S. Treasury to be “nothing more than a string of words that sound as though they belong in a legal document, but which, in reality, are incomprehensible, signifying nothing.” McElroy v. Chase Manhattan Mortg. Corp., 134 Cal.App.4th 388, 393, 36 Cal.Rptr.3d 176 (Cal.App. 4 Dist.2005). See also Bryant v. Washington Mutual Bank, 524 F.Supp.2d 753 (W.D.Va.2007); Hennis v. Trustmark Bank, No. 2: 10CV20-KS-MTP, 2010 WL 1904860 (S.D.Miss. May 10, 2010) (collecting cases). Even the Treasury Department has issued an alert about fraudulent bills of exchange. See “Bogus Sight Drafts/Bills of Exchange Drawn on the Treasury,” available online at http://www.treasurydirect.gov/instit/ statreg/fraud/fraud_bogussightdraft.htm (noting that “bills of exchange drawn on the U.S. Treasury Department ... have been used in an attempt to pay for everything from cars to child support.... All these Bills of Exchange drawn on the U.S. Treasury are worthless.”). In Bryant, the plaintiffs were homeowners who attempted to use a bill of exchange drawn on a “contract trust account” to pay off their mortgage. The mortgage company refused to accept the draft and foreclosed on the home. The court found the bill of exchange was not a legitimate negotiable instrument. Id. at 758. The court attempted to summarize the argument for these so-called trust accounts as follows: Supposedly, prior to the passage of the Fourteenth Amendment, there were no U.S. citizens; instead people were citizens only of their individual states. Even after the passage of the Fourteenth Amendment, U.S. citizenship remains optional. The federal govern642ment, however, has tricked the populace into becoming U.S. citizens by entering into “contracts” embodied in such documents as birth certificates and social security cards. With these contracts, an individual unwittingly creates a fictitious entity (i.e., the U.S. citizen) that represents, but is separate from, the real person. Through these contracts, individuals also unknowingly pledge themselves and their property, through their newly created fictitious entities, as security for the national debt in exchange for the benefits of citizenship. However, the government cannot hold the profits it makes from this use of its citizens and their property in the general fund of the United States because doing so would constitute fraud, given that the profits technically belong to the actual owners of the property being pledged (i.e., the real people represented by the fictitious entities). Therefore, the government holds the profits in secret, individual trust accounts, one for each citizen. Id. at 758-59 (internal footnote omitted). In 1933, the government provided a means for citizens to recover the profits held in their trust accounts through House Joint Resolution 1922 and the Uniform Commercial Code. Id. at 759. Although the remedy is kept secret so the government can retain the profits, a person “who learns of and is able to implement the remedy, can supposedly use the debt owed to her by the government to discharge her debts to third parties with Bills of Exchange that are drawn on her trust account.” Id. The court dismissed this theory — known as redemption theory — as “nonsense in almost every detail.” Id. at 760. It found no legal support for this argument and instead concluded that the debtor had tendered to the mortgage company “a worthless piece of paper.” Id. Furthermore, the court warned the debtor that “people frequently end up in prison” for passing bills of exchange drawn against the U.S. Treasury. Id. at 763. Based on the foregoing, the Court is persuaded that Mr. Rogers’ UCC Contract Trust Account is completely fictitious. Therefore, the bill of exchange drawn on the account and the subsequent charge-back have no legal effect and are not sufficient either to create a right to payment or to create an equitable remedy for breach of performance that gives rise to a right to payment. Consequently Mr. Rogers does not hold a claim as defined in 11 U.S.C. § 101(5) against Ms. Fachini and does not meet the requirements to file an involuntary bankruptcy petition against her. An opinion of the Eleventh Circuit Court of Appeals raises some question about whether the Court can consider the requirements of § 303(b) on its own motion. In Trusted Net Media Holdings, LLC v. The Morrison Agency, Inc. (In re Trusted Net Media Holdings, LLC), 550 F.3d 1035 (11th Cir.2008), the court said, [t]here is no indication from the text of § 303 that Congress intended bankruptcy courts to consider sua sponte at any point in the proceedings whether the involuntary petition filing requirements have been met. In fact, the statutory language strongly suggests the opposite. Section 303(h) provides that if an involuntary petition “is not timely controverted, the court shall order relief against the debtor in an involuntary case under the chapter under which the petition was filed.” 643Id. at 1044 (quoting 11 U.S.C. § 303(h)) (emphasis in original). However, Trusted Net differs significantly from this case. The debtor in Trusted Net did not object to the involuntary petition until four years after the petition was filed. Id. at 1037. At that time, the debtor argued the debt of the petitioning creditor (who claimed to be the debtor’s only creditor) was subject to a bona fide dispute, and because the petition was not filed by the holder of an undisputed noncontingent claim, the bankruptcy court had no subject matter jurisdiction over the case. Id. at 1037-38. Thus, the issue under consideration by the circuit was whether § 303 implicates the court’s subject matter jurisdiction. Id. at 1038. The circuit court held that it does not. Id. at 1043. The lack of a statutory mechanism for sua sponte review of involuntary petitions was a factor in support of the court’s holding on jurisdiction. Id. at 1045. However, it does not necessarily preclude a sua sponte inquiry in all circumstances. Here, there is no dispute over the validity of the debt that requires a factual inquiry. On the contrary, petition is invalid on its face because the petitioning creditor’s claim is founded on a financial instrument that has been ruled illegitimate as a matter of law by multiple state and federal courts and has been declared worthless by the Treasury Department. To assume such a claim is valid would give dignity to Mr. Rogers’ efforts to fabricate a debt and invoke the bankruptcy process for an improper purpose (or at least some purpose that has no relationship to collecting a legitimate debt). In these circumstances, any delay in the disposition of this case would constitute a manifest injustice to Ms. Fachini and would transform the ideal of due process into an instrument of chicanery. For the foregoing reasons, the Court will dismiss this case. An Order in accordance with this Opinion will be entered on this date. . The Court has redacted the account number because it appears to be Mr. Rogers' Social Security Number. . As noted in the Findings of Fact, all the documents Mr. Rogers addressed to the Treasury Department referred to HJR 192. HJR 192 "addresses nothing more than the U.S. monetary shift away from the gold standard!)]’' 524 F.Supp.2d at 760.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494692/	MEMORANDUM OPINION KEVIN R. HUENNEKENS, Bankruptcy Judge. Before the Court are several separate motions1 filed by the Defendants to dis772miss this adversary proceeding pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”), as made applicable to this proceeding by Federal Rule of Bankruptcy Procedure 7012(b). A hearing on the motions was held on November 17, 2011. At the conclusion of the hearing, counsel for the parties requested leave to file supplemental legal memoranda, the last of which was filed with the Court on December 15, 2011. The Court thereupon took the motions under advisement. For the reasons set forth below, the Court will deny the motions in part and grant the motions in part. The Court has subject-matter jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 157 and 1334 and the general order of reference from the United States District Court for the Eastern District of Virginia dated August 15, 1984. The Court has exclusive jurisdiction over this matter under Article XV of the Joint Chapter 11 Plan of LandAmerica Financial Group and its Affiliated Debtors (the “Joint Chapter 11 Plan”). This is a core proceeding under 28 U.S.C. § 157(b)(2)(B), (C), (H), and (0), in which final orders or judgments may be entered by a bankruptcy court. Venue is appropriate in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. In reviewing a motion to dismiss under Rule 12(b)(6), the Court must take as true the factual allegations in the Trustee’s complaint. Bass v. E. I. DuPont de Nemours & Co., 324 F.3d 761, 764 (4th Cir. 2003). Statement of Facts The Parties LandAmerica Financial Group (“LFG”) is a corporation organized under the laws of the Commonwealth of Virginia with offices throughout the United States and in Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LFG’s primary business involved the facilitation of residential and commercial real estate sales. LFG was the third-largest title insurance underwriter in the United States. LFG issued title insurance policies primarily through two principal title underwriting subsidiaries, Commonwealth Land Title Insurance Company and Lawyers Title Insurance Corporation. LFG also owned two other title insurance underwriters, Commonwealth Land Title Insurance Company of New Jersey and United Capital Title Insurance Company. LandAmerica 1031 Exchange Services, Inc. (“LES”) was a wholly-owned subsidiary of LFG organized under the laws of the State of Maryland. LES’s principal business was serving as a qualified intermediary for like-kind property exchanges consummated by taxpayers pursuant to § 1031 of the Internal Revenue Code. LES accounted for less than one percent of the revenue of LFG and its subsidiaries. Plaintiff Bruce H. Matson (the “LFG Trustee” or “Plaintiff’) was appointed as a fiduciary responsible for implementing the provisions of the Joint Chapter 11 Plan confirmed by this Court by order entered February 16, 2010. The Plan established 773a liquidating trust (the “LFG Trust”), and appointed the LFG Trustee as a fiduciary responsible for administering the LFG Trust. Defendant Janet Alpert (“Alpert”) served as a member of the LFG Board of Directors. Alpert also served as a member of LFG’s Investment Funds Committee, a committee of the LFG Board of Directors (the “Investment Funds Committee”). Defendant Gail K. Caruso (“Caruso”) served as a member of the LFG Board of Directors and also served as a member of the Investment Funds Committee and the LFG Audit Committee, a committee of the LFG Board of Directors (the “Audit Committee”). On or about May 13, 2008, Caruso became Chairman of the Investment Funds Committee. Defendant Theodore L. Chandler, Jr. (“Chandler”) served as Chairman of the LFG Board of Directors, and as President and Chief Executive Officer of LFG. Chandler also served as a member of LFG’s Risk Committee, a committee of LFG management (the “Risk Committee”). Defendant Michael Dinkins (“Dinkins”) served as a member of the LFG Board of Directors and as a member of the Investment Funds Committee. Defendant Charles H. Foster, Jr. (“Foster”) served as a member of the LFG Board of Directors and as a member of the Investment Funds Committee. Foster had served formerly as Chairman of the LFG Board of Directors and Chief Executive Officer of LFG. Defendant John P. McCann (“McCann”) served as a member of the LFG Board of Directors and as a member of the Audit Committee. McCann had served formerly as Chairman of the Investment Funds Committee until May 13, 2008. Defendant Diane M. Neal (“Neal”) served as a member of the LFG Board of Directors and as a member of the Audit Committee. Defendant Robert F. Norfleet, Jr. (“Norfleet”) served as a member of the LFG Board of Directors and as a member of the Audit Committee. Defendant Robert T. Skunda (“Skunda”) served as a member of the LFG Board of Directors and as a member of the Audit Committee. Defendant Julius P. Smith, Jr. (“Smith”) served as a member of the LFG Board of Directors and as a member of the Investment Funds Committee. Defendant Thomas G. Snead, Jr. (“Snead”) served as a member of the LFG Board of Directors and as Chairman of the Audit Committee. Defendant Eguene P. Trani (“Trani”) served as Lead Director of the LFG Board of Directors. The duties of the LFG Lead Director included, inter alia, ensuring that the Board operated independently of management and that the Directors received on a timely basis the reports, background materials and resources necessary or desirable to assist them in carrying out their responsibilities. The Lead Director was also responsible for making recommendations about the retention of consultants reporting to the entire Board. Defendant Marshall B. Wishnack (“Wishnack”) was a member of the LFG Board of Directors. Defendant G. William Evans (“Evans”) served as Executive Vice President and Chief Financial Officer of LFG and as a member of the Risk Committee. Defendant Evans also served as a member of the LES Board of Directors. Defendant Michelle H. Gluck (“Gluck”) served as Executive Vice President and 774Chief Legal Officer of LFG. Gluck had served as the Meeting Chair of the Risk Committee until June 2008, at which time she began serving as Chairperson of the Risk Committee. Defendant Pamela K. Saylors (“Say-lors”) served as a member of the LES Board of Directors. Beginning on April 3, 2008, Saylors also served as (i) President of the Commercial Services Division of LFG, (ii) President of LES, and (iii) a member of the Risk Committee. Defendant Jeffrey C. Selby (“Selby”) served until April 3, 2008, as (i) President of LES, (ii) a member of the LES Board of Directors, and (iii) as President of the Commercial Services Division of LFG. Defendant Christine R. Vlahcevic (“Vlahcevic”) served as Senior Vice President and Corporate Controller of LFG and as a member of the Risk Committee. Defendant Stephen Connor (“Connor”) served as Senior Vice President of LFG. Connor also served as Senior Vice President of LES and as a member of the LES Board of Directors. Connor was responsible for managing the day-to-day operations of LES. Defendant Brent Allen (“Allen”) served as a Vice President and National Underwriting Counsel of LES. Defendant Ronald B. Ramos (“Ramos”) served as Senior Vice President and Treasurer of LFG and as Vice President and Treasurer of LES. The Business Operation of LES LES operated as a “qualified intermediary” under § 1031 of the Internal Revenue Code (“Tax Code”). Section 1031 of the Tax Code permits a taxpayer to defer all or a portion of the gains from the disposition of business or investment property under certain circumstances. To qualify for this tax treatment, the taxpayer must structure the transaction as an exchange of one property for another of “like kind.” LES entered into agreements with its customers (the “Exchangers”) to facilitate these 1031 “like kind” exchanges (“Exchange Agreements”). Under the Exchange Agreements, the net proceeds from the sale of the taxpayer’s property (the “Exchange Funds”) would be transferred to LES. LES would then maintain exclusive possession and control over the Exchange Funds and any interest earned on the Exchange Funds, until the taxpayer identified a “like kind” replacement property (the “Replacement Property”). See Millard Refrigerated Services, Inc. v. LandAmerica 1031 Exchange Services, Inc., 412 B.R. 800 (Bankr.E.D.Va.2009). LES was required within 180 days to either use the Exchange Funds to purchase the identified Replacement Property or disburse the Exchange Funds to the taxpayer (the “Exchange Obligation”). LES’s general business practice was to commingle the Exchange Funds it received from the sale of one Exchanger’s property with the Exchange Funds received in connection with the 1031 transactions of other customers. LES maintained a general multipurpose checking account at SunTrust Bank for use as its general operating account (the “Operating Account”). The commingled Exchange Funds were deposited into this Operating Account. To maximize its revenues, LES invested the commingled Exchange Funds held in its Operating Account in a variety of short term investments, including money market mutual funds, short term bonds, certificates of deposit, floating rate notes, and auction rate securities (“ARS”). An ARS is a debt instrument with a long term nominal maturity that is structured to provide liquidity through a Dutch Auction 775process.2 Since 2002, LES invested a substantial portion of the commingled Exchange Funds deposited into its Operating Account in ARS. The LES Business Failure Leading up to 2008, the 1031 industry as a whole had experienced a number of scandals that caused considerable public concern about the reliability and solvency of 1031 companies. LES’s marketing materials sought to capitalize on the 1031 related scandals by touting LES’s solvency. During the week of February 11, 2008, demand for ARS plummeted. Auctions of ARS failed and the market for ARS collapsed and remained frozen (the “ARS Freeze”). As a result of the ARS Freeze, LES was unable to liquidate its ARS at any price near par value. As of March 31, 2008, approximately $290.5 million out of a total LES commingled Exchange Fund portfolio of approximately $612 million was invested in illiquid ARS. This caused a significant liquidity problem for LES, as LES could not access the securities necessary to meet its existing 1031 Exchange Obligations. Notwithstanding the ARS Freeze, LES continued to accept money from new Exchange customers and continued to commingle the new Exchange Funds it received with other Exchange Funds in its portfolio in order to meet its existing 1031 Exchange Obligations. Plaintiff alleges that LES did not revise its marketing material or its scripts for LES employees in the field working to attract new Exchangers as a result of the ARS Freeze. Plaintiff also alleges that LES failed to segregate the new Exchange Funds or to increase oversight and control over LES personnel who interacted with customers. LES did not commence legal action against the financial institutions that had sold the illiquid ARS to LES. LES failed to monetize the ARS, close its business, or file for bankruptcy. Plaintiff alleges that the Board of Directors of LES never considered whether LES should make any changes to the way LES conducted its business in light of the fact that close to half of the assets in its commingled portfolio were no longer accessible to meet its existing 1031 obligations to Exchangers. The balance of LES’s commingled Exchange Fund portfolio began to decline. In every month from the time of the ARS Freeze in February 2008 until LES and LFG filed for bankruptcy in November 2008, there was a substantial monthly net outflow of commingled customer Exchange Funds. The balance of LES’s commingled Exchange Fund portfolio stood at approximately $1.1 billion in August 2007. That balance fell to just above $600 million in April 2008. The balance fell below $500 million by the end of June 2008, and was below $400 million before September 2008. The percentage of illiquid ARS in LES’s commingled Exchange Fund dramatically increased as the balance in the Operating Account steadily declined. By September 2008, approximately 70% of LES’s commingled Exchange Fund portfolio was invested in illiquid ARS. Plaintiff alleges that the steady net outflow of commingled customer Exchange Funds meant that LES’s practice of soliciting new Exchange Funds to meet existing 1031 Exchange obligations was likely to fail. The Bankruptcy Filing The LFG Board of Directors held a special meeting on September 26, 2008. By that time, the percentage of illiquid ARS that comprised LES’s commingled 776Exchange Fund portfolio had grown to over 80%. The LFG Board of Directors created a Special Committee of the Board (the “Special Committee”) to explore transaction opportunities including a potential sale of LFG. On October 16, 2008, Defendants Chandler, Evans, Gluck and Ramos met with SunTrust Bank, one of LFG’s primary lenders, to discuss LFG’s third quarter results and the impact of these results on certain loan covenants in LFG’s credit agreement with SunTrust. During the meeting, an attorney with Sun-Trust stated that the bank was leery of entering into any further transactions with LFG because LES’s practice of using new Exchange Funds to pay its existing 1031 Exchange Obligations, at a time when most of the assets in its portfolio were illiquid, might be viewed as fraudulent. On October 20, 2008, Chandler wrote to the United States Treasury Secretary, the Honorable Henry M. Paulson, Jr., requesting financial assistance for LFG under the Emergency Economic Stabilization Act of 2008. This request was not granted. Following a failed merger with Fidelity National Title Insurance Company, Chicago Title Insurance Company, and Fidelity National Financial, Inc. (collectively, “Fidelity”), LFG and LES filed voluntary petitions for relief in this Court under Chapter 11 of the Bankruptcy Code on November 26, 2008 (the “Petition Date”). The Complaint Plaintiff alleges that the LFG Board of Directors exercised no independent business judgment and failed to take or consider timely action with respect to the LES liquidity issue. The Plaintiff also alleges that the LFG Board failed to act in good faith and grossly mismanaged LFG by failing in its oversight responsibility. Plaintiff alleges that the LFG directors failed to inform themselves about the effects of the LES liquidity issue. Plaintiff alleges that the LES Board of Directors did not hold any meetings at all in 2008. Plaintiff alleges that the LES Board of Directors exercised no independent business judgment, failed to take or consider any timely action with respect to the LES liquidity issue, and failed to exercise adequate oversight and control over LES and its officers with respect to the LES liquidity issue. Plaintiff alleges further that the LES directors failed to timely or adequately inform themselves about issues pertaining to the LES liquidity issue. Plaintiff alleges that the LFG Officers breached the fiduciary duties that they owed to LFG by (i) failing to timely inform themselves about the LES liquidity issue, (ii) failing to consider any timely action to address the liquidity issue, (iii) failing to take any action to prevent or mitigate the effect of the LES liquidity issue on LFG, (iv) and failing to inform the LFG Board of Directors of crucial facts regarding the LES liquidity issue. Plaintiff alleges that the LES Officers breached the fiduciary duties that they owed to LES and LFG by (i) failing to timely inform themselves about the LES liquidity issue, (ii) failing to consider any timely action to address the liquidity issue, (iii) failing to take any action to prevent and/or mitigate the effect of the LES liquidity issue, (iv) failing to exercise the duties they owed in good faith, in the best interest of the corporation, and with the care that an ordinary prudent person in a like position would have used under similar circumstances, and (v) failing to exercise adequate oversight and control over LES’S employees. Plaintiff alleges that between September 25, 2008, and October 17, 2008, LFG made significant, unauthorized transfers totaling 777$65 million to LES. These transfers violated the authority guidelines established by the LFG Board of Directors in 2006, which required prior review and consent by the LFG Board of Directors or the Executive Committee for such transactions exceeding $10 million. The authority guidelines also required the Chairman of the LFG Board, the Chief Executive Officer of LFG, and the Chief Financial Officer of LFG to review and consent to such transactions between $5 million and $10 million. Plaintiff alleges that the LFG Board of Directors and the LFG Officers failed to adhere to these corporate requirements with respect to the unauthorized transfers totaling $65 million made by LFG to its wholly owned subsidiary, LES. Counts I-IV Counts I through IV allege breach of fiduciary duty claims against all of the LFG and LES Defendants. Count I alleges breach of fiduciary duty claims on behalf of LES and LFG against the members of LES’s Board of Directors (the “LES Director Defendants”). Count II alleges breach of fiduciary duty claims on behalf of LES and LFG against the LES Officers named in the Complaint (the “LES Officer Defendants”).3 Count III alleges breach of fiduciary duty claims on behalf of LFG against the members of LFG’s Board of Directors (the “LFG Director Defendants”). Count IV alleges breach of fiduciary duty claims on behalf of LFG against the LFG Officers named in the Complaint (the “LFG Officer Defendants”).4 Count V Count V alleges a claim for corporate waste against Defendants Evans and Ramos for causing the unauthorized transfers totaling $65 million to occur in violation of LFG’s Authority Guidelines. Count VI Count VI seeks to equitably subordinate the proofs of claim filed by the Defendants against the Estate. Count VII Count VII seeks to avoid certain change of control employment agreements of some of the Defendant Officers as fraudulent conveyances. Rule 12(b)(6) Standard A motion to dismiss under Rule 12(b)(6) must be assessed in light of the liberal pleading standard set forth in Rule 8 of the Federal Rule of Civil Procedure as incorporated in this adversary proceeding by Rule 7008 of the Federal Rules of Bankruptcy Procedure (“Rule 8”). Rule 8 requires only a short and plain statement of the claim showing that the pleader is entitled to relief. iCore Networks, Inc. v. McQuade Brennan LLP, 2009 WL 36596, at 2 (E.D.Va. January 5, 2009). Motions brought under Rule 12(b)(6) are evaluated under a “plausibility standard.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-55, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009). The plausibility standard does not require heightened fact pleading of specifics, but only fact pleading sufficient to state a claim for relief that is plausible on its face. Under this standard, the “[fjactual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint’s allegations are true.” Twombly, 550 U.S. at 545, 127 S.Ct. 1955. See also 5 Charles Alan Wright & Arthur R. Miller, Federal 778Practice And Procedure § 1216, at 235-36 (3d ed. 2004) (“[T]he pleading must contain something more by way of a claim for relief than a bare averment that the pleader wants compensation and is entitled to it or a statement of facts that merely creates a suspicion that the pleader might have a legally cognizable right of action.”)- A claim has facial plausibility when the plaintiff pleads factual content that allows a court to draw the reasonable inference that the defendant may be liable for the misconduct alleged. A motion under Rule 12(b)(6) tests the legal sufficiency of the complaint. The motion does not resolve contests surrounding the facts, the merits of the claim, or the applicability of defenses. Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008); Wu v. Tseng, 2007 WL 201087, at 5 (E.D.Va. January 24, 2007). The factual allegations in the plaintiffs complaint must therefore be accepted as true and must be construed in the light most favorable to the plaintiff. Iqbal, 129 S.Ct. at 1949. A party may set out two or more statements of a claim or defense alternatively or hypothetically, and a pleading is sufficient if any one of them is sufficient. Fed.R.Civ.P. 8(d)(2); Lathon v. Wal-Mart Stores, E., LP, 2009 WL 1172864, at 2 (E.D.Va. April 29, 2009). Choice of Law The claims for breach of fiduciary duty alleged in the complaint are state law claims arising out of the Defendants’ service as officers and directors of LFG and LES. Under traditional conflict of laws principles, the law of the state of incorporation applies to claims that relate to the internal affairs of the corporation. See, e.g., First Nat’l City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 621, 103 S.Ct. 2591, 77 L.Ed.2d 46 (1983) (“As a general matter, the law of the state of incorporation normally determines issues relating to the internal affairs of a corporation.”); Stockbridge v. Gemini Air Cargo, Inc., 269 Va. 609, 611 S.E.2d 600, 602 (2005) (applying the law of the state of incorporation because the controversy involved the internal affairs of the corporation); Storetrax.com, Inc. v. Gurland, 397 Md. 37, 915 A.2d 991, 1000 (2007) (stating that “the laws of the state of incorporation generally will govern matters involving the internal workings of a corporation”). As LFG is a corporation organized under the laws of the Commonwealth of Virginia, Virginia law applies to Plaintiffs claims against the LFG Defendants in their capacities as officers and directors of LFG. As LES is a corporation organized under the laws of the State of Maryland, Maryland law applies to Plaintiffs claims against the LES Defendants in their capacities as officers and directors of LES. The Plan On the Petition Date, any and all legal and equitable interests belonging to LFG and LES became property of their respective bankruptcy estates. 11 U.S.C. § 541. Property of the bankruptcy estates included any causes of action that LFG and LES had against the prepetition officers and directors of LFG and LES. Section 8.2(d) of the Joint Chapter 11 Plan confirmed by this Court on February 16, 2010, provides that “on the effective date and in accordance with and pursuant to the terms of the Plan, LES and LFG shall transfer, assign and deliver to the applicable Trust, all of their rights, title and interests in all of the Trust assets, notwithstanding any prohibition of assignability under non-bankruptcy law.” Section 1.216 of the Plan defines Trust assets to include “LFG Trust assets and LES Trust assets.” Section 1.138 of the Plan defines LFG Trust assets to include “other litigation,” which under § 1.158 of the Plan includes 779“all causes of action of LFG and/or LES against (a) prepetition officers and directors of LFG, LES or former underwriter subsidiaries, in their capacity as such.... ” Therefore, any claims that LFG and LES had against the prepetition directors and officers of LFG and LES (the “D & 0 Claims”), which had become property of the bankruptcy estates on the Petition Date, were transferred by the Joint Chapter 11 Plan to the LFG Trust, which now holds those D & 0 Claims. The LFG Trustee is exclusively authorized pursuant to § 8.3 of the Plan to prosecute the “other litigation” (which includes the D & 0 Claims) and to object to and/or seek to subordinate claims against LFG. Plaintiff emphasizes the fact that the existence of LFG was not terminated as a result of the confirmation of the Joint Chapter 11 Plan in this case. Not all of the property of the LFG bankruptcy estate was transferred to the LFG Trust— some was intentionally left behind. The Joint Chapter 11 Plan provides that the “post-effective-date LFG” is to be managed by a dissolution trustee. The dissolution trustee and the post-effective-date LFG are entities separate and apart from the LFG Trust.5 The LFG Trustee is not the successor in interest to LFG, but rather is the fiduciary for the assignee of certain property interests held by LFG and LES. The Plan expressly prohibits the post-effective-date LFG from pursuing the D & 0 Claims and provides that all third party actions against the former directors and officers of LFG and LES are enjoined until the LFG Trustee has concluded this litigation.6 The proceeds of the D & 0 claims will not benefit the former shareholders of LFG and LES.7 Rather, the D & 0 claims belong to and are asserted by the LFG Trustee for the sole benefit of the LFG Trust, the LES Trust, and their respective beneficiaries, including the former 1031 Exchangers and former LFG creditors.8 Standing Defendants take issue with the assignment of the D & 0 Claims, arguing that the LFG Trustee lacks standing to assert the LFG and LES D & 0 Claims against them. The LFG Trustee acknowledges that under Virginia Law, claims for breach of fiduciary duty are not assignable. Va.Code § 8.01-26; FDIC v. Cocke, 7 F.3d 396, 401-02 (4th Cir.1993). However, the D & O Claims, the right to pursue the D & O Claims, and the right to any proceeds realized therefrom were transferred to the LFG Trust free and clear of all claims, liens, etc. in a taxable transaction under § 1123 of the Bankruptcy Code.9 Section 1123(a) of the Bankruptcy Code provides: “(a) notwithstanding any other applicable non-bankruptcy law, a plan shall ... (5) provide adequate means for the plan’s implementation such as ... (B) transfer of all or any part of the property of the estate to one or more entities, whether organized before or after the confirmation of such plan.” 11 U.S.C. § 1123(a)(5) (emphasis added). Plaintiff asserts that the D & O Claims were assigned to the LFG Trust notwithstanding Va.Code § 8.01-26.10 780The Fourth Circuit has held that the scope of preemption under § 1123(a) of the Bankruptcy Code is broad enough to preempt any state law that would restrict the objectives and operation of a debtor’s reorganization plan. Universal Cooperatives, Inc. v. FCX, Inc. (In re: FCX Inc.), 853 F.2d 1149 (4th Cir.1988). Section 1123(a)(5) is an empowering statute. It does not simply provide a means to exercise the debtor’s pre-bankruptcy rights; it enlarges the scope of those rights. Id. at 1155. The prepetition D & 0 Claims for breach of fiduciary duty were transferred to the LFG Trustee under the terms of the Joint Chapter 11 Plan and in accordance with § 1123(a)(5)(B) of the Bankruptcy Code. Accordingly, the LFG Trustee has standing to bring the LFG and LES D & 0 Claims for breach of fiduciary duty on behalf of the LFG Trust notwithstanding Virginia law that would otherwise restrict the assignability of those claims to the Trust. The LES Defendants further complain that in advancing the D & 0 Claims, the LFG Trustee has employed superficial logic in bundling disparate grievances from multiple sources into a single cause of action. The LES Defendants contend that the causes of action that were assigned to the LFG Trustee cannot be any broader than the causes of action originally held by LFG and LES. In that regard, the LES Defendants argue that the LES Officers and Directors may only be sued for breach of duty by the corporation for which they served. At issue is the Trustee’s assertion of D & 0 Claims on behalf of LFG against the LES Defendants in Counts I and II of the Complaint. The LES Defendants contend that the Trustee lacks standing to bring such claims as they never belonged to LFG in the first instance.11 The LFG Trustee counters that he is entitled to bring a direct cause of action against the LES Defendants on behalf of LFG in its capacity as the sole shareholder of LES. Maryland law is applicable to the resolution of this issue.12 When a corporation refuses to pursue a claim in its own right against its officers or directors, shareholders may be permitted to sue derivatively to enforce the corporate cause of action. See, e.g. Shenker v. Laureate Educ., 411 Md. 317, 983 A.2d 408, 423 (2009). “The purpose of the derivative action is to ‘place in the hands of the individual shareholder a means to protect the interests of the corporation from the misfeasance and malfeasance of “faithless directors and managers.” ’ ” Id. (citation omitted). While a derivative suit is prosecuted by shareholders, a corporation’s directors and officers “are liable to the corporation, not to its creditors or stockholders, and any damages recovered are assets of the corporation.” Waller v. Waller, 187 Md. 185, 49 A.2d 449, 452 (1946). As the LFG Trustee has asserted claims directly on behalf of LES against the LES Defendants for breach of the fiduciary duties that the officers and directors owed to the corporation, no derivative action may be main781tained by the shareholder of LES to enforce those same rights. Shareholders, in certain instances, may assert a direct suit against officers and directors of a corporation. Shenker, 983 A.2d at 423. Non-derivative suits permit shareholders to enforce personal causes of action against a corporation’s officers and directors. Courts applying Maryland law have held that shareholders may bring a direct action against a corporation’s officers and directors if the shareholders suffered a direct harm that is distinct from any harm suffered by the corporation. Strougo v. Bassini 282 F.3d 162, 170 (2d Cir.2002) (applying Maryland law). See also Giddens v. CorePartners, Inc., 2011 WL 2934855, at 5, 2011 U.S. Dist. LEXIS 77408, at 13 (D.Md. July 18, 2011) (“[Plaintiff] is unable to claim a direct harm to her as a shareholder that would support a direct action against the majority shareholders and directors.”). Where the harm to shareholders flows from injuries to a corporation, including injuries that decrease the value of a corporation’s assets or impairs the corporation’s ability to generate profits, there is no direct shareholder standing and only the corporation may bring suit. Seidl v. Am. Century Cos., 427 Fed.Appx. 35, 38 (2d Cir.2011) (applying Maryland law); Waller, 49 A.2d at 452 (stating that corporate malfeasance that reduces or destroys the value of a corporation’s stock is not considered to cause a direct harm to shareholders and the cause of action belongs to the corporation). The alleged direct injury to a shareholder must be independent of any injury to the corporation itself. Tooley v. Donaldson, Lufkin, & Jenrette, Inc., 845 A.2d 1031, 1039 (Del.2004).13 Courts applying Maryland law have also held that a shareholder may bring a direct action against a corporation’s officers and directors if there is a breach of a duty owed directly to the shareholder. See, e.g. Waller, 49 A.2d at 454 (holding that a direct action could not be maintained because the “declaration does not allege the violation of any right personal to plaintiff, but only violation of rights common to all the stockholders”);14 Schettino v. Modanlo, 2005 WL 914376, at 7-8, 2005 Md. Cir. Ct. LEXIS 14, at 21 (Md.Cir.Ct.2005) (holding that a shareholder had standing to bring a direct action against a director of a corporation because the director owed the shareholder a duty “separate and apart from that which [the director] owed to the company”). Such duties may be established by statute, common law, or contract. See, e.g. Waller, 49 A.2d at 453 (holding that a shareholder may bring a direct suit for violation of a duty “arising from contract or otherwise”); Shenker, 983 A.2d at 420 (holding that a shareholder may pursue a direct claim for breach of the common law duty of candor and the duty to maximize shareholder value once a decision to sell a corporation has been made). These cases suggest that both the nature of the wrong and the nature of the relief sought are relevant to a court’s in782quiry into whether a shareholder has standing to bring a direct (as apposed to a derivative) suit against the officers and directors of a Maryland corporation. See, e.g. Tooley, 845 A.2d at 1039 (“The stockholder must demonstrate that the duty breached was owed to the stockholder and that he or she can prevail without showing an injury to the corporation.”). The existence of both of these elements in a complaint should inform a court that a direct cause of action is available. A direct suit may be maintained by shareholders of a Maryland corporation against the officers and directors of a corporation where it is alleged (i) that the corporation’s officers and directors breached a duty directly owed to the shareholders and (ii) that the shareholders suffered a direct harm distinct from that suffered by the corporation. Id. Here, Plaintiff alleges that the LES Defendants breached fiduciary duties that they owed directly to LFG. The general rule in Maryland is that a corporation’s officers and directors do not owe fiduciary duties directly to shareholders. Werbowsky v. Collomb, 362 Md. 581, 766 A.2d 123, 133 (2001) (“[Directors are required to perform their duties in good faith, in a manner they reasonably believe to be in the best interest of the corporation, and with the care that an ordinarily prudent person in a like position would use under similar circumstances. That obligation runs, however, to the corporation and not, at least directly, to the shareholders.”); Wasserman v. Kay, 197 Md.App.586, 14 A.3d 1193, 1207 (2011) (“Because directors’ fiduciary duties relating to management do not extend to shareholders, a minority shareholder generally does not have a direct action for breach of those duties against the directors, except in cases affecting fundamental shareholder rights.”); Waller, 49 A.2d at 454 (“It is generally stated that directors occupy a fiduciary relation to the corporation and all its stockholders, but they are not trustees for the individual stockholders. The reason for this distinction is that in law the corporation has a separate existence as a distinct person, in which all the corporate property is vested and to which the directors are responsible for a strict and faithful discharge of their duty, but there is no legal privity or immediate connection between the directors and the individual stockholders.”) (citations omitted). This general rule does not apply, however, in the context of a wholly-owned corporation. The directors and officers of a wholly-owned corporation owe fiduciary duties both to the corporation itself and to the parent. See Anadarko Petroleum Corp. v. Panhandle E. Corp., 545 A.2d 1171, 1174 (Del.1988) (“[I]n a parent and wholly-owned subsidiary context, the directors of the subsidiary are obligated only to manage the affairs of the subsidiary in the best interests of the parent and its shareholders.”); Williams v. McGreevey (In re Touch Am. Holdings, Inc.), 401 B.R. 107, 129 (Bankr.Del.2009) (“[T]he directors of a wholly-owned subsidiary owe fiduciary duties to both the subsidiary and to the sole shareholder, the parent corporation.”); VFB LLC v. Campbell Soup Co., 482 F.3d 624, 635 (3d Cir.2007) (holding that directors of a wholly-owned corporation could consider the interests of the parent company as well as the interests of their corporation because there was only one substantive interest to be protected). The imposition on the officers and directors of a wholly-owned subsidiary of a fiduciary responsibility owed directly to the parent corporation is entirely appropriate as there exists only one, singular interest to be served. The wholly-owned subsidiary should act in the best interests of its parent company. A corporation with a 783sole shareholder should be required to tailor its decisions and actions accordingly. As LES was a wholly-owned subsidiary of LFG, the LES Defendants owed fiduciary duties directly to LFG independent of those owed to LES. The LFG Trustee also alleges that LFG suffered significant damages directly as a result of the LES Defendants’ breach of the fiduciary duties they owed to LFG. Among the damages cited are the destruction of hundreds of millions of dollars of LFG enterprise value, the unauthorized transfer of $65 million to LES in violation of corporate guidelines, the decrease in value of LFG’s Underwriting Companies due to certain ARS Swaps,15 the cost of defending litigation brought by Exchangers against LFG, the cost of responding to multiple government investigations arising out of the LES liquidity issue, and the diminution in the value of LFG subsidiaries other than LES. These damages represent injuries unique to LFG and are completely independent from any harm suffered by LES. Plaintiff has met both of Maryland’s alternative tests for allowing a shareholder to bring a direct cause of action against the officers and directors of a corporation. The LFG Trustee has alleged that, as LES was a wholly-owned subsidiary of LFG, the LES Defendants owed LFG direct fiduciary duties. The Trustee has also alleged that LFG suffered distinct harms independent from those suffered by LES. But meeting both prongs of Maryland’s alternative tests does not end the inquiry. Plaintiffs direct right of action is further qualified by statute. The LFG Trustee may not assert any claims against the LES Defendants on behalf of LFG for the breach of the fiduciary duties set forth in § 2-405.1 of the Corporations and Associations Article of the Maryland Code. That section sets forth a standard of conduct required of directors of Maryland corporations.16 Section 2-405.1(g) provides that claims for mismanagement based upon a breach of the standard of conduct set forth in § 2-405.1 may only be asserted by the corporation or in a derivative action on behalf of the corporation.17 The prohibition set forth in § 2-405.1(g) is specifically limited to actions for breach of the standard of conduct set forth in that statute. Shenker, 983 A.2d at 421 (stating that § 2-405.1(a) does not supersede or supplant other recognized common 784law duties that pre-existed the adoption of the statute in 1976). Section 2-405.1 does not preclude direct shareholder actions for the breach of other fiduciary duties, such as the duties of candor and good faith efforts to maximize shareholder value. See Id. at 426; Parish v. Milk Producers Ass’n., 250 Md. 24, 242 A.2d 512, 539 (1968). It also does not preclude direct shareholder actions for intentional misconduct. Provided that Maryland’s test for allowing a shareholder to bring a direct cause of action against the officers and directors of a corporation has otherwise been satisfied, a claim for breach of fiduciary duties (other than the duty set forth in Section 2-405.1) may be asserted in a direct action by the shareholders of a corporation. The Liquidation Trustee may properly assert direct shareholder actions on behalf of LFG against the LES Defendants for their breach of the fiduciary duties they owed to LFG (other than those set forth in § 2-405.1(a)) in his capacity as assignee of the parent of LES. Exculpation LFG Officers and Directors The LFG Defendants argue that any liability they might have had for the demise of LFG and LES was eliminated by LFG’s corporate governing documents and Virginia law. The Virginia Stock Corporation Act permits the elimination of liability of directors and officers if such a limitation is set forth in a corporation’s articles of incorporation: In any proceeding brought by or in the right of a corporation or brought by or on behalf of shareholders of the corporation, the damages assessed against an officer or director arising out of a single transaction, occurrence or course of conduct shall not exceed the lesser of: 1. The monetary amount, including the elimination of liability, specified in the articles of incorporation or, if approved by the shareholders, in the bylaws as a limitation on or elimination of the liability of the officer or director. Va.Code Ann. § 13.1-692.1(A) (emphasis added). Pursuant to this section, LFG properly adopted articles of incorporation that included such a provision limiting liability for its officers and directors in actions brought by or on behalf of LFG or its shareholders.18 Plaintiff argues that this exculpatory provision does not apply to the claims before the Court for several reasons. First, the LFG Trustee asserts that the exculpatory provision is not available to the LFG Defendants in this case because the D & 0 Claims are not “brought by or in the right of a corporation or brought by or on behalf of shareholders of the corporation” as required by the statute. The LFG Trustee argues that the D & 0 Claims are brought by a third party — the LFG Trustee in accordance with the Joint Chapter 11 Plan. The LFG Trustee maintains that the D & 0 Claims were transferred to him from the bankruptcy estate of LFG free and clear of all encumbrances in accordance with 11 U.S.C § 1123(a)(5). He argues that the LFG Trust is an entity separate and distinct from LFG or the shareholders of LFG. The LFG Trustee also has the exclusive authority to bring the D & 0 Claims against the LFG Defen785dants. Plaintiff concludes, therefore, that the D & 0 Claims are not being brought by or in the right of LFG. The LFG Trustee correctly asserts that the claims that he has brought are not derivative claims of LFG. A derivative claim as defined by the Virginia Stock Corporation Act is a “civil suit in the right of a domestic corporation.” Va.Code Ann. § 13.1-603. The Virginia Supreme Court has further elaborated that a derivative claim is an “equitable proceeding in which a shareholder asserts, on behalf of the corporation, a claim that belongs to the corporation rather than the shareholder.” Simmons v. Miller, 261 Va. 561, 573, 544 S.E.2d 666 (2001). As the Trustee is neither a shareholder of LFG nor asserting the claims on the behalf of shareholders of LFG, the claims by definition are not being brought in the right of the corporation. Neither are the claims brought by LFG or by a successor in interest to LFG. Rather, the Trustee is asserting the D & O Claims of LFG that were transferred to the LFG Trustee by virtue of the Joint Chapter 11 Plan.19 As the LFG Trustee now possesses the D & O Claims against LFG’s directors and officers, he can assert those claims in his own right. The LFG Trustee argues that Virginia Code Section 13.1-692.1(A) is inapplicable because the D & O Claims are not being “brought by or in the right of [LFG] or brought by or on behalf of shareholders of [LFG].” The LFG Trustee argues that applying the Virginia exculpation statute would hinder the purposes of the Joint Chapter 11 Plan and that the LFG defendants are precluded from invoking the exculpation statute under principles of federal preemption. The Court need not revisit its discussion regarding the transfer of claims or federal preemption law to arrive at the conclusion that Plaintiffs argument here is unavailing. The Joint Chapter 11 Plan provides that the D & O Claims were transferred to the LFG Trustee subject to any defenses that the LFG Defendants could have asserted directly against LFG. Section 7.9(d) of the Plan explicitly preserved all defenses available to the LFG directors and officers, stating that “[n]oth-ing herein shall preclude (i) any LFG/LES D & O from asserting setoff or any other affirmative defenses in any litigation, including the Other Litigation, against such LFG/LES D & O....” As the Joint Chapter 11 Plan preserved all defenses, it would be incongruous to find that the application of the Virginia exculpation statute to the claims asserted by the LFG Trustee would undermine the purposes of the Plan. The LFG Defendants are not barred from asserting the Virginia exculpation statute as an affirmative defense to the Trustee’s claims. Plaintiff further argues that the Virginia exculpation statute does not apply to the LFG Defendants because the alleged misconduct was willful. As set forth in part B of the Virginia exculpation statute, “the liability of an officer or director shall not be limited as provided in this section if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any federal or state securities law.” Va.Code Ann. § 13.1-692.1(B). Plaintiff maintains that the LFG Defendants failed to inform themselves with respect to the LES liquidity problem. Specifically, plaintiff alleges that the directors and officers of LFG knew or should have known (i) that the ARS in LES’s portfolio were inaccessible because the market for ARS was frozen, (ii) that LES nevertheless continued to solicit new Exchange Customers in order to procure new Ex786change Funds so that it would be able to complete the Exchange transactions for which it was already liable, (iii) that this business strategy of LES was destined for failure unless LES could continue to generate new Exchange Funds at a rate that was at least equal to the outflow of funds required to complete Exchange Transactions for which it was already liable, (iv) that LES failed to disclose this business strategy to the new Exchange Customers that it solicited, and instead continued to use its old marketing materials touting the financial stability and solvency of LES, (v) that LES continued to commingle the new Exchange Funds it received with the holdings of other Exchange Funds in its portfolio to the detriment of the new Exchangers, and (vi) that any reasonable Exchange Customer would not have agreed to commit new Exchange Funds to LES under such circumstances especially in light of the fact that the liquid portion of the LES commingled Exchange Fund portfolio had diminished considerably and was continuing to diminish month after month. The LFG Trustee contends that, charged with this knowledge about LES and its business practices, the conduct of the LFG Defendants’ was a knowing dereliction of duty or a conscious disregard of duty that rises to the level of willful misconduct. The LFG Defendants urge the Court to apply a “willful and malicious” conduct standard consistent with that set forth in § 523(a)(6) of the Bankruptcy Code to the “willful misconduct” standard used in the Virginia exculpation statute. Courts interpreting the phrase “willful and malicious” as used in § 523(a)(6) have focused on the term “injury.”20 These courts have held that a willful act is an act intended to cause injury and not merely an intentional act that results in injury. See, e.g. In re Swyter, 2002 WL 34591432, at 5-6, 2002 Bankr.LEXIS 2055, at 19 (Bankr.E.D.Va. Mar. 14, 2002) (citing Kawaauhau v. Geiger, 523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998)). The LFG Defendants also cite several Virginia state court opinions that adopt a definition of willful requiring a wrongful intent. See, e.g. King v. Empire Collieries Co., 148 Va. 585, 139 S.E. 478 (1927) (stating that “willful,” as applied to the Virginia Workers’ Compensation Statute, “imports something more than a mere exercise of the will in doing the act. It imports a wrongful intention.”); Smith v. Litten, 256 Va. 573, 507 S.E.2d 77 (1998) (“Willful and wanton conduct is acting consciously in disregard of another person’s rights, or acting with a reckless indifference to the consequences to another person while aware of one’s conduct and while also aware, from one’s knowledge of existing circumstances and conditions, that one’s conduct would probably result in injury to another.”). The Court declines to apply the “willful and malicious injury” standard of § 523(a)(6) of the Bankruptcy Code to the “willful misconduct” terminology used in the Virginia exculpation statute. The term “willful” as used in § 523(a)(6) modifies thé word “injury.” Courts have thus required that injury be the intended outcome, or at least be the substantially certain outcome, of the act in order for this standard to be met. See, e.g. In re Trammell, 388 B.R. 182, 187 (Bankr.E.D.Va.2008). Here, however, “willful” modifies the word “misconduct.” An act constitutes “willful misconduct” if the actor commits an intentional act or omission that is wrongful, regard787less whether injury was intended. See Allen C. Goolsby, Goolsby On Virginia Corporations § 10.1 at 229 (4th ed. 2011) (“In the case of willful misconduct the perpetrator not only must have intentionally acted or failed to act, but also must have done so knowing that what he or she was doing was wrong.”); Branch v. Virginia Employment Com., 219 Va. 609, 612, 249 S.E.2d 180 (1978) (holding that an “employee is guilty of ‘misconduct connected with his work’ when he deliberately violates a company rule reasonably designed to protect the legitimate business interests of his employer, or when his acts or omissions are of such a nature or so recurrent as to manifest a willful disregard of those interests and the duties and obligations he owes his employer”); Ogburn v. Southside Gin, Inc., 1997 WL 133290, at 2, 1997 Va.App. LEXIS 161, at 5 (Va.Ct. App. March 25, 1997) (observing that the disregard of an express order in a worker’s compensation context can constitute “willful misconduct”). Plaintiff has alleged that the LFG Defendants consciously failed to act in response to the LES liquidity problem despite repeated warning signs, both internal and in the industry at large. Specifically, the Trustee alleges that allowing LES to continue its usual business practice of co-mingling new Exchange Funds with existing Exchange Funds and permitting LES to use new Exchange Funds to satisfy old Exchange liabilities despite (i) LES’s steadily declining revenues since August 2007, (ii) the ARS freeze in February 2008, and (iii) the fact that nearly half of LES’s commingled Exchange portfolio was frozen constitutes a conscious failure to respond to a critical risk facing LFG. The Trustee also alleges that defendants Evans, Ramos, Chandler, and Gluck knowingly violated corporate guidelines when they transferred a total of $65 million from LFG to LES without the requisite review and approval of the LFG Board of Directors. The Court finds that these allegations, taken as true for the purposes of this motion, rise to the level of willful misconduct. While the LFG Defendants may assert the Virginia Exculpation Statute as an affirmative defense, the statute does not apply to claims alleging willful misconduct. LES Directors and Officers The Trustee’s claims against the LES Defendants are not barred by the Maryland exculpation statute. Maryland statutory law authorizes a corporation to include an exculpation provision in a corporate charter. Section 2-405.2 of the Corporations and Associations Article of the Maryland Code states: “The charter of the corporation may include any provision expanding or limiting the liability of its directors and officers to the corporation or its stockholders as described under § 5-418 of the Courts and Judicial Proceedings Article.” Md. Code Ann., Corps. & Ass’ns, § 2-405.2. Section 5-418 of the Courts and Judicial Proceedings Article provides that, subject to specifically enumerated exceptions, “[t]he charter, as defined under § 1-101 of the Corporations and Associations Article, of a Maryland corporation may include any provision expanding or limiting the liability of its directors and officers to the corporation or its stockholders for money damages.... ” Md. Code Ann., Cts. & Jud. Proc. § 5-418. The exculpation provision upon which the LES Defendants rely does not appear in the corporate charter of LES. It is contained, instead, in its corporate by-laws. This difference is significant. By-laws are separate and distinct from and form no part of the corporation’s charter. 788Greenbelt Homes, Inc. v. Nyman Realty, Inc., 48 Md.App. 42, 426 A.2d 394, 403 n.4 (Md.Ct.Spec.App.1981). The term “charter” is defined in § 1-101 of the Maryland Corporations and Associations Code. This section does not include by-laws in the definition of the charter or otherwise incorporate them into the charter documents.21 The Corporations and Associations Article of the Maryland Code clearly establishes that when a corporation’s charter and by-laws are in conflict, the charter controls: “The by-laws may contain any provision not inconsistent with law or the charter of the corporation for the regulation and management of affairs of the corporation.” Md. Code Ann., Corps. & Ass’ns, § 2 — 110(a); 8 Fletcher Cyclopedia Corporations § 4190, at 765 (2010) (“Where by-laws conflict with the articles of incorporation, the articles of incorporation control and the by-laws in conflict are void.”). “Furthermore, as a general rule, when the applicable statute commands that the provision governing shareholder rights be set out in the certificate of incorporation but the provision is not so set out, a by-law purporting to regulate shareholder rights is void.... The silence of the charter on a particular subject may imply a limitation concerning such subject that cannot be violated by inconsistent bylaws.” 8 Fletcher Cyclopedia Corporations § 4190, at 765 (2010). The LES Defendants argue that § 2-110(a) of the Corporations and Associations Article of the Maryland Code permits an exculpation provision to be located in a corporation’s by-laws because § 2^05.2 and § 5-418 of the Corporations and Associations Article of the Maryland Code state that a corporation “may include” an exculpation provision in its charter, rather than “must include.” The LES Defendants contend that § 2^405.2 and § 5^418 are permissive rather than limiting and do not foreclose a corporation’s ability to place an exculpation provision in its by-laws. Therefore, the LES Defendants maintain that such an exculpation provision may be placed in the by-laws as they would not be rendered inconsistent with law or the corporation’s charter. In support of this argument, the LES Defendants cite the unpublished Fourth Circuit decision Badlands Trust Co. v. First Fin. Fund, Inc., 65 Fed.Appx. 876 (4th Cir.2003). The court in Badlands held that a corporation could alter voting requirements for the election of directors in its by-laws despite § 2 — 104(b)(4) of the Corporations and Associations Article of 789the Maryland Code, a statute similar in construction to § 2-405.2, that allows corporations to include provisions in their charters raising voting requirements above those prescribed by statute.22 Badlands Trust Co. v. First Fin. Fund, Inc., 65 Fed.Appx. 876 at 879-80. The LES Defendants’ reliance on Badlands is misplaced. In addition to § 2—104(b)(4) of the Corporations and Associations Article. of the Maryland Code, Maryland has enacted § 2—404(d), of the Maryland Code which explicitly permits that voting requirement changes may be contained in a corporation’s by-laws in addition to its charter. Md. Code Ann., Corps. & Ass’ns, § 2—404(d).23 The court in Badlands found that the by-law provision was permissible under § 2-110 because it was explicitly authorized by statute and was not inconsistent with the corporation’s charter. Here, however, there is no such law providing that a corporation may place an exculpation provision in the by-laws of a corporation. Quite to the contrary, there are two laws, § 2-405.2 and § 5-418, which specifically require exculpation provisions to be included in a corporation’s charter. Placing an exculpation provision in a corporation’s by-laws in lieu of the corporation’s charter is therefore “inconsistent with law” and § 2-110 does not apply. The specific requirements of § 2-405.2 and § 5-418 are controlling and any exculpation provision placed in a corporation’s by-laws is void. The LES Defendants argue next that the LFG Trustee is estopped from contesting the validity of the exculpation clause. The LES Defendants assert that both the Fourth Circuit and the Maryland Court of Appeals have held that a shareholder who accepts a corporate act does not have the right to challenge it. See Williams v. 5300 Columbia Pike Corp., 1996 WL 690064, at 4 (4th Cir. Dec. 3, 1996) (applying Delaware law) (stating that a shareholder may be es-topped from challenging a transaction where the “shareholder votes for a given transaction, the corporation relies on the shareholder’s expression of approval, and, subsequently, the shareholder seeks to challenge the transaction”); Oregon Ridge Dinner Theatre, Inc. v. Hamlin, 253 Md. 462, 253 A.2d 382, 385 (1969). The LES Defendants argue that this prohibition extends to challenges asserted by shareholders against by-laws that shareholders enacted. Campau v. McMath, 185 Mich.App. 724, 463 N.W.2d 186 (1990) (“Although a bylaw may be invalid, it is nonetheless binding on shareholders who themselves, voluntarily and for their own benefit and protection, enacted it. Since they participated in the enactment of the foregoing bylaw, defendants are now es-topped from challenging its validity.”).24 790As LFG was the sole shareholder of LES, the LES Defendants maintain that the LFG Trustee is estopped, because of his status as the sole shareholder of LES, from challenging the validity of the exculpation clause contained in the by-laws of LES.25 Defendants bear the burden of establishing that Plaintiff is estopped from challenging the exculpation provision contained in the LES by-laws that LFG adopted as the sole shareholder of LES. The question of estoppel raises issues of fact that must be raised and resolved as an affirmative defense.26 Any such affirmative defense requires factual determinations that cannot be resolved in the context of a motion to dismiss under Rule 12(b)(6). In re James River Coal Co., 360 B.R. 139, 170 n. 23 (Bankr.E.D.Va.2007).27 The Business Judgment Rule LFG Directors Virginia’s standard of conduct owed by corporate directors, codified in Va.Code Ann. § 13.1-690, states that “[a] director shall discharge his duties as a director, including his duties as a member of a committee, in accordance with his good faith business judgment of the best interests of the corporation.” Va.Code Ann. § 13.1-690(A). When exercising his or her business judgment, a director is entitled to rely on information, opinions, reports, or statements prepared or presented by other officers or employees of the corporation, legal counsel and other professionals, and committees of the board of directors of which the director is not a member, unless the director has knowledge or information concerning the matter in question that makes reliance unwarranted. Va.Code Ann. § 13.1-690(B). Virginia’s Business Judgment Rule states that “a director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with [§ 13.1-690(A) ].” Va.Code Ann. § 13.1-690(C). This safe harbor afforded to directors must be asserted as an affirmative defense. In re James River Coal Co., 360 B.R. 139, 170 n. 23 (Bankr.E.D.Va.2007). Pursuant to § 13.1-690(D), the person alleging a violation of the Business Judgment Rule bears the burden of proving the violation. A director’s compliance with § 13.1-690(A) is not measured against what a reasonable person would do in similar circumstances or by the rationality of the ultimate decision. Willard ex rel. Moneta Bldg. Supply, Inc. v. Moneta Bldg. Supply, Inc., 258 Va. 140, 515 S.E.2d 277, 284 (1999). In Virginia, the relevant inquiry focuses on the subjective beliefs of the director and on the process that the director employed to arrive at a defensible business decision. WLR Foods, Inc. v. Tyson Foods, Inc., 155 F.R.D. 142, 145-146 (W.D.Va.1994), aff'd, 65 F.3d 1172 (4th Cir.1995). The procedural soundness of a business decision may be assessed by examining (i) the qualifications of the persons with whom the director consulted, (ii) the general topics, not the substance, of 791the information sought or imparted, and (iii) whether the advice was followed. Id. Plaintiff alleges that the LFG Board of Directors consciously failed to take any action and consciously failed to make any decision about critical issues facing LFG despite repeated warning signs of which the LFG Board was aware. Specifically, the Trustee alleges that as of the April 29, 2008, LFG Board of Directors Meeting, the LFG Board of Directors (i) was aware that LES had invested in ARS; (ii) was aware of the ARS Freeze; (iii) was aware that nearly half of LES’s portfolio was illiquid as a result of the ARS freeze, and, therefore, nearly half of LES’s portfolio could not be used to meet its existing 1081 Exchange Obligations; (iv) was aware of, or had sufficient information to make inquiries about, the fact that LES was relying on the inflow of Exchange Funds from new 1031 Exchange transactions to finance the completion of existing 1031 Exchange transactions; (v) was aware, as reported by CFO Evans on April 29, 2008, that the real estate market was in decline, that “recession loom[ed],” and that there was “much uncertainty in the market” which made “forecasting difficult”; (vi) was aware of the 1031-related industry scandals that brought increased scrutiny on 1031 companies; and (vii) was aware of, or had sufficient information to make inquiries about, the impact that an alleged scandal at LES could have on the Lan-dAmeriea brand and on LFG. The LFG Trustee asserts that despite this information, the LFG Board of Directors “exercised no independent judgment and failed to take or consider any timely action with respect to the LES liquidity crisis” at this meeting, as Board minutes reflect that the only decision reached was that “the [Investment Funds Committee] will continue to monitor the securities.” Plaintiff further alleges that at the July 2008 meeting of the LFG Investment Funds Committee, there was no substantive discussion of the LES liquidity problem as the discussion of the matter was postponed until the Board of Directors’ scheduled October 27, 2008, meeting. The minutes of the LFG Board of Directors meeting held the following day state: “At its October 2008, meeting, the Committee will review the 1031 portfolio to gain an understanding of the timing of commitments, and management will present the Company’s options if greater liquidity is needed.” Plaintiff alleges that this entry reveals that “more than five months after the LES Liquidity Crisis arose, the members of the Investment Funds Committee and the members of the full LFG Board of Directors had yet to ‘gain an understanding’ of the LES Liquidity Crisis and had still not informed themselves of options to solve or mitigate the LES Liquidity Crisis.” Plaintiff alleges that these facts evidence the LFG Board of Directors’ failure to make any decisions or take specific action regarding the LES liquidity problem. Plaintiff alleges further that, given these facts, the LFG Board of Directors consciously failed to make any decisions or take any specific action regarding the legal, financial, and reputational ramifications of continuing to allow LES to take in new 1031 Exchanger money for more than five months after the ARS Freeze began, and of continuing to allow LES to use new Exchanger money to satisfy old Exchange Obligations. Alternatively, the Trustee alleges that even if this failure to take affirmative action was the result of a conscious business decision, the LFG Board of Directors’ failure to gain an understanding of the LES liquidity problem prior making any such decision indicates that the LFG Board of Directors failed to implement an adequate process “that would produce a 792defensible business decision.” Taken as true for the purposes of this Rule 12(b)(6) motion, these allegations are sufficient to preclude the application of Virginia’s Business Judgment Rule. To the extent that the LFG Directors dispute these allegations, such disputes reflect the existence of factual issues that may not be resolved in a Rule 12(b)(6) motion to dismiss. LES Directors The Maryland Business Judgment Rule provides that a director who performs his or her duties in accordance with § 2-405.1 of the Corporations and Associations Article of the Maryland Code has no liability for violating the standard of conduct set forth therein by reason of being or having been a director of a corporation. Md.Code Ann., Cts. & Jud. Proc. § 5-417, Md. Code Ann., Corps. & Ass’ns, § 2-405.1(c). Section 2-405.1 sets forth a standard of conduct to which corporate directors must adhere: (a) A director shall perform his duties as a director, including his duties as a member of a committee of the board on which he serves: (1) In good faith; (2) In a manner he reasonably believes to be in the best interests of the corporation; and (3) With the care that an ordinarily prudent person in a like position would use under similar circumstances. (b)(1) In performing his duties, a director is entitled to rely on any information, opinion, report, or statement, including any financial statement or other financial data, prepared or presented by: (i)An officer or employee of the corporation whom the director reasonably believes to be reliable and competent in the matters presented; (ii) A lawyer, certified public accountant, or other person, as to a matter which the director reasonably believes to be within the person’s professional or expert competence; or (iii) A committee of the board on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence. (2)A director is not acting in good faith if he has any knowledge concerning the matter in question which would cause such reliance to be unwarranted. Md. Code Ann., Corps. & Ass’ns, § 2-405.1(a)-(b). Maryland courts have described the Business Judgment Rule as a “presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interest of the company.” Yost v. Early, 87 Md.App. 364, 589 A.2d 1291, 1296-98 (1991). While § 2-405.1(a)(1) focuses on the subjective good faith of the director, §§ 2-405.1(a)(2) and (3)focus on the reasonableness of the decision-making process, and authorize inquiry into whether a director used ordinary care to become properly informed before making a decision. Under § 2-405.1(a)(2), “to be reasonable, a decision must be based on adequate information. ‘Any decision undertaken on the basis of insufficient knowledge is inherently unreasonable.’ ” James J. Hanks, Jr., Maryland Corporation Law § 6.6 at 171-72 (2010) (quoting NCR Corp. v. Am. Tel. & Tel. Co., 761 F.Supp. 475, 491 (S.D.Ohio 1991) (applying Maryland law)). Under § 2-405.1(a)(3): The process by which a director makes his decision will necessarily vary with the significance, complexity and other 793aspects of the decision. As a general rule, directors should have available to them information material to the decision and should have some opportunity to ask questions of management and to meet and discuss the matter among themselves. Hanks, supra, § 6.6 at 178. “[T]o avail themselves of the business judgment rule, directors have a duty to inform themselves of all material information reasonably available to them and to act with requisite care in the discharge of their duties.” Werbowsky v. Collomb, 362 Md. 581, 766 A.2d 123, 138-39 (2001) (citing Aronson v. Lewis, 473 A.2d 805 (Del.1984)). The LES Defendants disagree with this application of the Business Judgment Rule. Citing the ease of Wittman v. Crooke, 120 Md.App. 369, 707 A.2d 422 (1998), they argue that Maryland courts have held that the Business Judgment Rule applies unless a director engages in fraud, self-dealing, or unconscionable conduct. In Wittman, the court stated that “if the corporate directors’ conduct is authorized, a showing must be made of fraud, self-dealing or unconscionable conduct to justify judicial review.” Wittman, 707 A.2d at 425 (citing Black v. Fox Hills North Cmty. Ass’n., Inc., 90 Md.App. 75, 599 A.2d 1228 (1992)). This standard does not pertain to all applications of the Business Judgment Rule. It applies only where a business judgment itself is being challenged. In Black v. Fox Hills North Community Association, the case cited by Wittman for the proposition that fraud, self-dealing or unconscionable conduct must be present to justify judicial review, the court explains that the Business Judgment Rule “precludes judicial review of a legitimate business decision of an organization, absent fraud or bad faith.” Black v. Fox Hills North Cmty. Ass’n., Inc., 599 A.2d at 1231 (emphasis added). This concept is also found in Wittman itself. Immediately pri- or to the language cited by the LES Defendants, the court stated: It is, of course, Svell established that courts generally will not interfere with the internal management of a corporation’ and that the ‘conduct of the corporation’s affairs are placed in the hands of the board of directors and if the majority of the board properly exercises its business judgment, the directors are not ordinarily liable.’ Id. (citations omitted) (emphasis added). The heightened standard in which a plaintiff must show fraud, self-dealing or unconscionable conduct applies only if a proper and well-informed exercise of business judgment has occurred. Here, the LFG Trustee alleges that the LES Board of Directors never met in 2008. Taking this fact as true for the purposes of this motion, the LES Board of Directors cannot be said to have conducted a decision-making process exercised with “the care that an ordinary prudent person in a like position would use under similar circumstances” or “in a manner [it] reasonably believes to be in the best interests of the corporation.” Despite the fact that half of LES’s commingled Exchange Fund portfolio was rendered illiquid as a result of the ARS Freeze, that the balance in the LES commingled Exchange Fund portfolio was declining sharply, and that LES had a backlog of impending 1031 Exchanger Obligations for which it was liable, the LES Board of Directors failed to even once convene to discuss the significant challenges facing the corporation. Hence, no business judgment was ever exercised. The failure to exercise any business judgment whatsoever is not protected by the Business Judg794ment Rule.28 Breach of Fiduciary Duty Claims Maryland Breach of Fiduciary Duty Law The duty owed to a Maryland corporation by its directors is set forth in § 2-405.1(a) of the Corporations and Associations Article of the Maryland Code.29 While § 2-405.1(a) specifically refers to directors, the duties enumerated in this section also serve as the standard of conduct applicable to officers of a corporation. See Shenker v. Laureate Educ., 411 Md. 317, 983 A.2d 408, 419 (2009) (stating that while undertaking managerial decisions “directors and officers owe the duty of care contained in § 2-405.1(a)”). Section § 2-405.1(a) does not supplant other common law fiduciary duties or serve as the sole source of duties owed to a corporation. Shenker, 983 A.2d at 421. Common law fiduciary duties remain in place. Id. Notwithstanding the contentions of the LES Defendants to the contrary, Maryland recognizes an independent claim for breach of fiduciary duty. The LES Defendants argue that an independent claim for the breach of fiduciary duty does not exist under Maryland law based on the case of Kann v. Kann. There the Maryland Court of Appeals stated that “there is no omnibus tort for the breach of fiduciary duty by any and all fiduciaries.” Kann v. Kann, 344 Md. 689, 690 A.2d 509, 520-21 (1997). Maryland Courts have not entirely agreed on how to interpret this language in Kann. Compare Int’l Bhd. of Teamsters v. Willis Corroan Corp. of Maryland, 369 Md. 724, 802 A.2d 1050, 1052 n. 1 (2002) (“[A]l~ though the breach of a fiduciary duty may give rise to one or more causes of action, in tort or in contract, Maryland does not recognize a separate tort action for breach of fiduciary duty.”), with Giddens v. Core-Partners, Inc., 2011 WL 2934855, at 5, 2011 U.S. Dist. LEXIS 77408, at 12 (D.Md. July 18, 2011) (“The Court does not agree with Defendants’ argument that Maryland does not recognize a tort for breach of fiduciary duty.”). This Court will not apply Kann to preclude a claim for the breach of fiduciary duty in this case. Kann is distinguishable from the case at bar in that the plaintiff in Kann sought to create a general tort claim, including damages for “stress, mental anguish, and exacerbation of various physical ailments and conditions directly resulting from [the defendant’s] actions,” for any breach of fiduciary duty. Kann, 690 A.2d at 520. Kann repeatedly stresses that the type of tort liability that the plaintiff sought to establish in that case would have permitted the award of damages even in the event that there was no economic loss to the beneficiary. Id. (“It is not at all clear that [the plaintiff] would limit damages for emotional distress to cases in which the trustee has caused some economic loss to the beneficiary.... [The plaintiffs] arguments strongly suggest that she seeks emotional distress damages if [the trustee] made any misstep, even if it did not cause loss. [The plaintiffs] quest for this new tort liability of trustees is particularly unpersuasive when one considers that there may be instances in which a trustee may commit a breach of trust mistakenly and non-negligently.”). The court in Kann tied the legitimacy of the asserted claim for breach of fiduciary duty to an 795actual economic loss incurred by the beneficiary. The court sought to bar general and amorphous claims based on breaches of fiduciary duty that result in no actual harm. This reading of Kann is supported by the court’s immediate qualification of the language cited by the LES Defendants, in which the court explains: This does not mean that there is no claim or cause of action available for breach of fiduciary duty. Our holding means that identifying a breach of fiduciary duty will be the beginning of the analysis, and not its conclusion. Counsel are required to identify the particular fiduciary relationship involved, identify how it was breached, consider the remedies available, and select those remedies appropriate to the client’s problem. Kann, 690 A.2d at 521. Thus, while no general “omnibus tort for the breach of fiduciary duty” may exist, Kann contemplates tailored claims for a breach of fiduciary duty that are tied to discrete harms capable of being rectified by an appropriately remedy. Here, the fiduciary relationship is established by § 2-405.1(a) as well as by common law. The LFG Trustee asserts that the LES Defendants failed to act in good faith, in a manner they reasonably believed to be in the best interests of the corporation, and with the care that an ordinarily prudent person in a like position would use under similar circumstances as required by § 2-405.1(a). The LFG Trustee also alleges the violation of other common law fiduciary duties, including, inter alia, the duties of officers and directors to remain sufficiently informed about corporate affairs and to maximize shareholder value. Finally, it is alleged that the LES Defendants’ breach of their fiduciary duties directly resulted in actual and quantifiable economic losses that can be remedied by the monetary damages sought. The Court finds that the claims that the LFG Trustee has asserted for breach of fiduciary duty under Maryland law are permissible claims under Kann and its progeny.30 Claims Against the LES Directors The LFG Trustee alleges that the LES Board of Directors never met in 2008. The LES Board of Directors cannot be said to have conducted a decision-making process exercised with “the care that an ordinary prudent person in a like position would use under similar circumstances” or “in a manner [it] reasonably believes to be in the best interests of the corporation” without holding a single Board meeting. Although the LES Directors assert that the responsibility for managing LES during the ARS freeze was transferred to the LFG Board of Directors, there are insufficient facts currently in the record to support this contention. Whether any such abdication occurred is a factual matter that cannot be resolved by a motion to dismiss under Rule 12(b)(6). The LFG Trustee has properly stated a claim for the breach of fiduciary duty against the LES Directors under Maryland law. Claims Against the LES Officers In Maryland, officers as well as directors are fiduciaries of a corporation 796and owe fiduciary duties accordingly. Shenker v. Laureate Educ., 411 Md. 317, 983 A.2d 408, 419 (2009) (stating that the duties owed by officers of a corporation are set forth in § 2-405.1(a)). See also Gantler v. Stephens, 965 A.2d 695, 708-09 (Del.2009) (holding that under Delaware law the “fiduciary duties of officers are the same as those of directors”). Officers are also subject to general agency principles, including the duty to exercise reasonable care and skill in the performance of the officer’s responsibilities as well as the duties of loyalty, good faith and candid disclosure. Hanks, supra, § 6.19 at 217. These duties include the responsibility to disclose to the agent’s principal “any information that the principal may reasonably want to know.” Ins. Co. of N. Am. v. Miller, 362 Md. 361, 765 A.2d 587, 597 (2001). This includes a duty to provide a board of directors with information regarding corporate risks. Implicit in this responsibility is a requirement that officers adequately inform themselves about risks facing the company. The LFG Trustee alleges that the LES Officers failed to inform either themselves or the LES Board of Directors of significant and immediate risks facing LES. Connor was a Senior Vice President of LES and was responsible for the day-to-day operations of LES. It is alleged that Connor knew as of April 2008 that LES was heavily invested in the frozen ARS market. It is further alleged that Connor was aware that LES’s business volume had declined by almost 50% and that the declining trend was “not going to change anytime soon.” Nevertheless, Connor continued to allow LES to commingle Exchange Funds. The LFG Trustee alleges that Connor did not take any action to protect LES from the impending catastrophe, including sufficiently informing the LES and LFG Boards of Directors regarding the looming crisis. Saylors was the President of LES and was a member of the LES Board of Directors and a member of the Risk Committee. It is alleged that Saylors failed to take or to consider action to address the severe risk posed by the ARS Freeze despite being aware of the scandals and failures in the 1031 industry and the liquidity problems that the ARS Freeze presented to LES. It is alleged that Saylors failed to obtain even basic information regarding the financial stability of LES prior to informing LES’s current and prospective customers that LES was fiscally sound. Allen was National Underwriting Counsel to LES and was responsible for providing legal advice to the company. It is alleged that Allen neglected to provide any legal advice as to whether it was legally permissible or advisable for LES to continue to conduct business as usual, including continuing to commingle Exchange Funds, after the ARS Freeze. Ramos was Treasurer and a Vice-President of LES. It is alleged that Ramos failed to adequately inform himself of the growing severity of the LES liquidity problem and subsequently failed to properly inform the LES and LFG Boards of Directors about key issues relevant to addressing the LES liquidity problem, including the continuing practice of using new Exchange Funds to pay for LES’S existing Exchange Obligations especially in light of the continuous steady decline of the balance of the commingled Exchange Fund portfolio. It is further alleged that Ramos failed to consider timely action to address the potential reputational, financial, and legal impact of the ARS Freeze and of the continued practice of LES of conducting business as usual. 797The LFG Trustee has properly stated a claim for breach of fiduciary duty by these four LES Officers under Maryland law. Selby Selby retired from LES in early April of 2008, less than seven weeks after the ARS Freeze began. The Complaint says relatively little about this seven-week period. It is alleged that prior to his retirement Selby had served as President of LES. However, nearly all of the events and omissions that Plaintiff claims led to the demise of LFG and LES are alleged to have occurred following Selby’s departure. Selby’s tenure with LES ended prior to the specific actions that the other four LES officers and directors are alleged to have failed to have taken in response to the ARS Freeze. The Complaint does not aver that any of these failed actions could or should have been taken prior to Selby’s departure on April 3, 2008. Selby can only be held accountable for losses attributable to the period prior to his departure from LES. Lawson v. Baltimore Paint & Chem. Corp., 347 F.Supp. 967 (D.Md.1972). As the Complaint does not allege what actions Selby failed to take or consider during the seven-week period he remained with LES after the ARS Freeze or what damage occurred as a result thereof, the Complaint fails to state a plausible cause of action for breach of fiduciary duty against Selby. Virginia Fiduciary Duty Law The standard of conduct for Virginia directors is set forth in § 13.1-690 of the Virginia Stock Corporation Act, which states that “[a] director shall discharge his duties as a director, including his duties as a member of a committee, in accordance with his good faith business judgment of the best interests of the corporation.” Va. Code Ann. § 13.1-690(A). As discussed supra, a Virginia director’s compliance with § 13.1—690(A) is not measured against the objective standard of what a reasonable person would do in similar circumstances. Rather, the proper inquiry focuses on the subjective beliefs of the director and the director’s use of a decision-making process that would produce a defensible business decision. WLR Foods, Inc. v. Tyson Foods, Inc., 155 F.R.D. 142, 145-146 (W.D.Va.1994), aff'd, 65 F.3d 1172 (4th Cir.1995) (“The question is not what some person external to the transaction, and looking at it with perfect hindsight, might believe to have been an exercise of reasonably good or bad judgment based on the substance of advice given. Rather, good faith under the statute presents the question whether a process was engaged that would produce a defensible business decision.”). The procedural soundness of a business decision may be assessed by examining the qualifications of the persons with whom the director consulted, the general topics, not the substance, of the information sought or imparted, and whether the advice was followed. Id. Corporate officers are agents who owe duties to both the corporation and its shareholders. See WLR Foods, Inc. v. Tyson Foods, Inc., 869 F.Supp. 419, 421 (W.D.Va.1994) (“A Virginia corporation’s directors and officers owe a duty of loyalty both to the corporation and to the corporation’s shareholders.”) (citation omitted); Upton v. S. Produce Co., 147 Va. 937, 133 S.E. 576, 580 (1926) (stating that officers “owed the duty of frankness and fair dealing as fiduciaries to [stockholders]”); Gantler v. Stephens, 965 A.2d 695, 708-09 (Del.2009) (holding under Delaware law that corporate officers owe the same fiduciary duties as directors). An officer has a specific duty to “tell his principal about anything ‘which might affect the principal’s decision whether or how to act.’ ” Allen Realty Corp. v. Holbert, 227 798Va. 441, 318 S.E.2d 592, 595 (1984) (citation omitted). Implicit in this duty is the requirement that an officer seek out any information that might reasonably be needed to inform a principal’s decision-making process, especially regarding risks to the corporation. The LFG Directors Plaintiff alleges that despite being aware of the ARS freeze, the scandals and failures in the 1031 industry, and the continuing practice of LES of using new Exchange funds to pay existing Exchange Obligations, the LFG Board of Directors failed to make any conscious decision about the critical issues or to take any action to address the worsening liquidity problem. To the extent that any decisions were actually made, Plaintiff alleges that such decisions were not made following an informed decision-making process. Specifically, Plaintiff alleges that the LFG Board of Directors did not timely solicit (i) any legal opinion regarding the propriety of using new Exchange Funds to meet existing Exchange Obligations in light of the frozen ARS market or (ii) any financial analysis of LES’s financial stability following the ARS Freeze. The LFG Trustee also alleges that the LFG Board of Directors did not seek out the advice or opinions of LES management, as it continued to permit LES to conduct business as usual despite the belief of LES’s Senior Vice President that LES’s business volume was dramatically declining, that the “trend [was] not going to change any time soon,” and that LES’s prospects were “very bleak.” Plaintiff maintains that even judged on a subjective standard, the LFG Directors failed to employ a decision-making process sufficient to properly inform themselves and to make a defensible decision. The LFG Defendants argue that the LFG Trustee does not state a case for breach of fiduciary duty, but rather alleges a general failure to monitor for corporate risks subject to the standard set forth in In re Caremark International Inc. Derivative Litigation, 698 A.2d 959 (Del.Ch.1996).31 This argument is misguided. Caremark concerned a general systemic failure to implement processes and procedures to identify employee wrongdoing and illegal conduct. Caremark, 698 A.2d 959. In contrast to Caremark, this case involves the alleged failure of the LFG Directors to take any action in response to specific threats to the company about which the LFG Directors had numerous warning signs.32 Plaintiff is not alleging that the LFG Directors were not aware of the ARS Freeze or of the declining value of the commingled Exchange Fund portfolio due to a failure to implement a sufficient information-gathering apparatus; rather, the Plaintiff alleges that the LFG Directors had or should have had knowledge of these and other risks yet failed to act. The Caremark standard is inapplicable to this case. Plaintiff has sufficiently stated a claim for the breach of fiduciary duty against the LFG Directors under Virginia law. 799The LFG Officers The LFG Officers argue that the Complaint does not adequately set forth the individual duties that they are alleged to have violated as required by Bank of America v. Musselman, 222 F.Supp.2d 792 (E.D.Va.2002). The court in Musselman stated: [W]ith respect to officers, one court applying Delaware law has noted an important limitation: ‘no fiduciary duty governing the management of a corporation’s affairs can be imposed on persons who have no authority to manage those affairs. In the absence of allegations that an officer has such authority under the certificate of incorporation, that officer has no fiduciary duty.’ (citation omitted). This is a sensible limitation as some corporate officers may have little or no managerial authority over some or all of a company’s operations. Musselman, 222 F.Supp.2d at 797 n. 10. The LFG Officers assert that the LFG Trustee has not pleaded sufficient information to establish that the LFG Officers had a responsibility to investigate the impending ARS crisis and inform the LFG Board of Directors accordingly. This argument fails for two reasons. First, in addition to the principle cited by the LFG Officers, Musselman also establishes that certain high-ranking positions, such as Chief Financial Officer, have a commonly understood meaning and do not require the level of particularity of pleading that would be required by a more esoteric post. Id. (“In this case, however, Hacker was ECS’s Chief Financial Officer, and as such, it appears from the face of the complaint that he possessed the requisite degree of managerial authority with respect to the development and use of WIP and the use of trust account funds for company operations.”). Under Mussel-man, positions such as President, Chief Financial Officer, Treasurer, and other customary positions do not require an explicit pleading of the position’s general duties. Second, the Complaint here pleads significantly more detail regarding the duties of the LFG Officers than the complaint did in Musselman. The Trustee has specifically set forth the position of each of the LFG Officers named as defendants in the Complaint, and, although all are commonly understood positions, the LFG Trustee also describes with particularity how each Officer failed to fulfill his or her duty to LFG. Gluck was LFG’s Chief Legal Officer and chaired the Risk Committee. It is alleged that Gluck failed to timely question whether LES’s business practices, including the continued use of new Exchange Funds to satisfy existing Exchange Obligations, were legally permissible following the ARS Freeze. As such, Gluck did not timely inform the LFG Board of Directors of any liability that might result from permitting LES to continue to conduct business as usual in the face of the ARS Freeze. Special obligations of legal counsel to inform the board of directors of risks to the corporation, such as those imposed by the Sarbanes-Oxley Act, are implicated where the continuation of usual business practices creates exposure to legal claims and investigations. Ramos was the Treasurer of LFG. The duties of the LFG Treasurer were set forth in the LFG Bylaws: SECTION 4.9. Treasurer. The Treasurer shall exercise general supervision over the receipt, custody and disbursement of corporate funds and shall cause such funds to be deposited in such banks as may be authorized by the Board of Directors, or in such banks as may be designated as depositaries in the manner provided by resolution of the Board of 800Directors. The Treasurer shall have such further powers and duties as shall be properly assigned by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President. Bylaws of LandAmerica Financial Group (Amended and Restated October 25, 2006), Article IV, § 4.9. Despite being responsible for the supervision of corporate funds, it is alleged that Ramos failed to inform himself, and thus also the Board of Directors, that LES would run out of liquid funds by late September 2008. It is also alleged that Ramos failed to provide the “contingency plan” requested by the LFG Board of Directors at its April Board meeting until October 2008. It is alleged that by then, the damage had been done. It is unclear whether Ramos ever informed the Investment Funds Committee or the full Board, as he should have, that LES’s business practices, even after the ARS Freeze, entailed commingling new Exchange money and using those funds to pay out old, existing Exchanger Obligations. The LFG Trustee has alleged that, as the officer directly responsible for corporate funds, Ramos failed to adequately inform himself about the topics crucial to the LES liquidity problem and failed to consider timely action. Evans was the Chief Financial Officer (“CFO”) of LFG and a member of the Risk Committee. The duties of the LFG CFO were set forth in the LFG Bylaws: SECTION 4.8. Chief Financial Officer. The Chief Financial Officer shall act in an executive financial capacity and shall assist the Chief Executive Officer and the President in the general supervision of the Corporation’s financial policies and affairs. Bylaws of LandAmerica Financial Group (Amended and Restated October 25, 2006), Article IV, § 4.8. It is alleged that Evans knew that LES was using new Exchange money to pay out old, existing Exchange obligations and that he knew about the scandals and failures in the 1031 industry, but he did not inform the LFG directors. To the extent that Evans was unaware of any aspects of the ARS Freeze or 1031 industry scandals, he failed to adequately inform himself about the LES liquidity problem. Chandler was the President, Chief Executive Officer, and Chairman of the Board of LFG. Although the duties of a corporate President and Chief Executive Officer are commonly understood, Chandler’s duties were also set forth in the LFG Bylaws: SECTION 4.5. Chief Executive Officer. The Chief Executive Officer shall be responsible for the general management of the affairs of the Corporation and shall perform all duties incidental to his office which may be required by law and all such other duties as are properly assigned by the Board of Directors. The Chief Executive Officer shall make reports to the Board of Directors and the shareholders, and shall see that all orders and resolutions of the Board of Directors, and of any committee thereof, are carried into effect. The Chief Executive Officer shall, in the absence of or because of the inability to act as the Chairman of the Board, perform all of the duties of the Chairman of the Board including, in the absence of any Vice Chairman of the Board, presiding at all meetings of shareholders and of the Board of Directors. SECTION 4.6. President. The President shall act in a general executive capacity and shall assist the Chief Executive Officer in the administration and operation of the Corporation’s business and general supervision of its policies and affairs. The President shall, in the 801absence of or because of the inability to act of the Chief Executive Officer, perform all duties of the Chief Executive Officer. Bylaws of LandAmerica Financial Group (Amended and Restated October 25, 2006), Article IV, §§ 4.5-46. It is alleged that as Chief Executive Officer, Chandler either knew about and failed to disclose or did not know about and failed to inform himself that LES was using new Exchange Funds to meet existing Exchange Obligations. Chandler had a duty to make sure that an LFG subsidiary was not engaging in activities that would expose LFG to legal liability or accusations of wrongdoing. The LFG Trustee alleges that Chandler failed to timely inform himself about the topics crucial to the LES liquidity problem and that he failed to consider timely action. Vlaheevic was the Controller of LFG and one of the three signatories of LFG’s June 30, 2008, Form 10-Q. Plaintiff alleges that, as such, Vlaheevic was presumably aware of the downward trend in the balance of LES’s commingled Exchange Fund portfolio. She was also presumably aware that LES was using new Exchange Funds to pay existing Exchange Obligations. Despite this knowledge, Vlaheevic failed to alert the Risk Committee, of which she was a member, or the LFG Board of Directors about the extent of the LES liquidity problem. To the extent that Vlaheevic was unaware of the downward trend in the balance of LES’s commingled Exchange Fund portfolio and/or of its use of new Exchange Funds to pay for existing Exchange obligations, she failed to adequately inform herself about the LES Liquidity problem. Connor was a Senior Vice President of LFG as well as a Senior Vice President of LES and was a member of the LES Board of Directors. Connor was responsible for the daily business functions of LES. It is alleged that he had knowledge of key topics relevant to the LES liquidity problems. It is alleged that Con-nor breached his duties as an officer of LFG by failing to inform the LFG Board of Directors regarding critical issues, including his views about LES’s dire financial prospects and about the downward trend in the balance of LES’S commingled Exchange Fund portfolio, his awareness of LES’s use of new commingled Exchange Funds to pay existing Exchange Obligations, and his knowledge of specific scandals and failures in the 1031 Industry. It is alleged that Connor also failed in his duty to consider timely action with respect to the LES liquidity problem. Saylors served as a member of the LFG Risk Committee. Saylors also served as President of LES and a member of the LES Board of Directors beginning in April 2008. Plaintiff alleges that Say-lors was uniquely positioned and obligated to address and inform herself about the LES Liquidity Crisis. It is alleged that Saylors failed to do so, and thus also failed to timely inform the Risk Committee and LFG Board of Directors about the risks of allowing LES to continue to conduct business as usual following the ARS Freeze. Saylors also failed to consider timely action with respect to the LES Liquidity problem. The Trustee has sufficiently stated a claim for the breach of fiduciary duty against the LFG Officers under Virginia law. The $65 Million Transfer On October 25, 2006, the LFG Board of Directors unanimously approved a resolution titled “Levels of Authority” (the “Authority Guidelines”). The Authority Guidelines required prior review and consent by the LFG Board of Directors or its 802Executive Committee for (i) any capital or general operating expenditure exceeding $10 million; (ii) any loan exceeding $10 million; or (iii) any other material contract or obligation which is not in the ordinary course of business and which provides for a monetary commitment exceeding $10 million. Additionally, prior review and consent by the Chairman of the LFG Board of Directors, the Chief Executive Officer of LFG and the Chief Financial Officer of LFG was required for (i) any capital or general operating expenditure above $5 million but not exceeding $10 million; (ii) any loan above $5 million but not exceeding $10 million; and (iii) any other material contract or obligation which is not in the ordinary course of business and which provides for a monetary commitment above $5 million but not exceeding $10 million. It is alleged that between September 25, 2008, and October 17, 2008, Evans and Ramos caused LFG to transfer a total of $65 million to LES so that LES could meet its Exchange Obligations. The $65 Million was transferred in the following transactions: (i) a $35 million transfer from LFG to LES, dated September 25, 2008; (ii) a $15 million transfer from LES back to LFG, dated September 30, 2008; (iii) a $10 million transfer from LFG to LES, dated October 8, 2008; (iv) a $10 million transfer from LFG to LES, dated October 14, 2008; (v) a $15 million transfer from LFG to LES, dated October 17, 2008; and (vi) a $10 million transfer from LFG to LES, dated October 17, 2008. Evans and Ramos did not obtain the prior approval of either the LFG Board of Directors or the Chairman, Chief Executive Officer, or Chief Financial Officer of LFG for any of these transfers. During the October 1, 2008, meeting of the Investment Funds Committee of the LFG Board, the Committee was informed that LFG might transfer money to LES. On October 15, 2008, the LFG Board of Directors was notified during a Special Committee meeting that LFG had “advanced $20 million to date to the 1031 Exchange Company.” The reported figure was incorrect. The actual amount of the transferred funds as of this meeting of the Special Committee was $40 million. On October 17, 2008, the date of the final transfer of funds, Ramos sent an e-mail to Gluck, .Evans, and Chandler informing them that as of that time he had transferred a total of $55 million from LFG to LES to address LES’s liquidity problem. An additional transfer of $10 million occurred later that same day. It is alleged that Evans and Ramos breached their fiduciary duty by transferring the $65 million to LES without obtaining the requisite approval required by the Authority Guidelines. This was not merely a “technical non-compliance” as argued by the Defendants. The allocation of authority to approve significant corporate expenditures is an integral part of corporate governance. See O’Connor v. United States, 956 F.2d 48, 51 (4th Cir.1992) (“The separation of authority within a business enterprise, and the limitation on authority held by officers is a practical reality which is acknowledged and given effect by the courts”) (citation omitted). It is alleged that Chandler and Gluck breached their fiduciary duty upon being informed of the unauthorized transfers from LFG to LES on October 17, 2008. Neither Chandler nor Gluck consulted the Authority Guidelines or informed the full LFG Board of Directors that $65 million had been transferred in violation of corporate guidelines. Gluck did not fulfill her obligations as Chief Legal Officer to investigate and provide advice with respect to the violation of the 803Authority Guidelines and the $65 Million Transfer. Chandler did not fulfill his obligation under the LFG Bylaws to ensure that LFG Board resolutions such as the Authority Guidelines were carried into effect. To the extent that Chandler was aware of any transfers in the amount of $10 million before they occurred, he failed to conduct a prior review of and consent to the transfers. To the extent that Chandler was aware of any transfers exceeding $10 million before they occurred, he failed to ensure that the LFG Board of Directors was notified and had an opportunity to approve the transfers before they occurred. It is alleged that the members of the LFG Board of Directors breached their fiduciary duty with respect to the $65 million transfer. Despite being aware of at least some of the transfers, the members of the LFG Board of Directors did nothing to inform themselves as to whether the transfers were in the best interest of LFG, to inquire whether the transfers had occurred in violation of the Authority Guidelines, or to prevent further unauthorized transfers. The Trustee has sufficiently alleged a breach of fiduciary duty claim against Evans, Ramos, Chandler, and Gluck individually, and against the LFG Board of Directors with respect to the unauthorized transfer of $65 million from LFG to LES. Deepening Insolvency The Defendants’ contentions to the contrary notwithstanding, the Plaintiffs Complaint cannot be re-characterized as a claim for deepening insolvency.33 Plaintiff alleges that the failure of the LFG and LES Officers and Directors to properly inform themselves of the risks facing LFG and LES and to take timely action to address the ARS Freeze and the ensuing LES liquidity problem caused the demise of LFG. Plaintiff alleges that the Defendants should not have allowed LES to continue to collect new Exchange Funds, to commingle those new Exchange Funds, and then to use the new Exchange Funds to pay existing Exchange obligations after the ARS Freeze. The Trustee alleges that the Defendants failed to take timely action that would have saved LFG. This is entirely different from some theory of deepening insolvency under which Plaintiff might seek to impose liability for failing to concede defeat, for failing to sell, or for failing to liquidate LFG and LES when faced with financial difficulties and potential insolvency. Defendants advance this straw man argument only to knock it down. As the allegations advanced by the LFG Trustee have nothing to do with the legal theory of deepening insolvency, the Court need not address the Defendants’ argument that claims for deepening insolvency are not recognized in Virginia. See Schnelling v. Crawford, (In re James River Coal Co.), 360 B.R. 139, 176 (Bankr.E.D.Va.2007). Waste The LFG Trustee alleges that Evans and Ramos wasted corporate assets by transferring the $65 million from LFG to LES. No Virginia court has explicitly held that there exists an independent common law claim for corporate waste under Virginia law. Schnelling v. Crawford (In re James River Coal Co.), 360 B.R. 139, 176 (Bankr.E.D.Va.2007). Rather, corporate waste is considered to be a breach of fiduciary duty to the corporation. Id. (“Corporate waste as a cause of action is based on 804each fiduciary’s duty of highest loyalty to the corporation. Waste is therefore similar to a claim for breach of fiduciary duty.”) (quoting Pereira v. Centel Corp. (In re Argo Commc’ns Corp.), 134 B.R. 776 (Bankr.S.D.N.Y.1991)). Count V fails to state a claim against Evans and Ramos for causing the unauthorized transfer of $65 from LFG to LES for corporate waste. Count V must, therefore, be dismissed. The dismissal of this count is of no practical import, however, as the LFG Trustee has properly asserted a breach of fiduciary duty claim against Evans and Ramos in Count IV regarding the unauthorized transfer of the $65 million to LES. Damages The LFG Trustee has pleaded cognizable damages. “Breach of fiduciary duty is a tort, and the tortfeasor is liable for all damages proximately caused by the breach.” In re Fairfax W. Apartment Owners Ass’n. Inc., 1991 WL 76035, at 4, 1991 U.S.App. LEXIS 9564, at 10 (4th Cir. May 14, 1991). A complaint need not plead damages with specificity to survive a Rule 12(b)(6) motion to dismiss. See, e.g. Koschene v. Hutchinson, 73 Va. Cir. 103, 106 (Va. Cir. Ct.2007) (“While the Plaintiff failed to go into specific detail regarding his damages, they certainly can be inferred from the pleading.... [T]he Plaintiff has sufficiently stated a viable cause of action for breach of fiduciary duty by the Defendant.”); First Am. Mktg. Corp. v. Canella, 2004 WL 250537, at 8, 2004 U.S. Dist. LEXIS 2251, at 25 (E.D.Pa. Jan. 26, 2004) (“[I]t is not necessary to plead specific damages to survive a 12(b)(6) motion .... The purpose of a Rule 12(b)(6) motion to dismiss is to test the sufficiency of a complaint, not to resolve disputed facts or decide the merits of the case.”). For the purposes of a Rule 12(b)(6) motion, it is sufficient “that the plaintiff has alleged facts that would allow it to recover some damages on its breach of fiduciary duty claim.” United States v. Douglas, 626 F.Supp. 621, 623 (E.D.Va.1985). The Complaint contains specific allegations of damage caused by the Defendants’ actions. Among the damages alleged are: (i) the destruction of LFG enterprise value, (ii) the unauthorized transfer $65 million from LFG to LES, (iii) the decrease in value of LFG’s Underwriting Companies due to ARS Swaps,34 (iv) the cost of defending litigation brought by LES’s exchange customers, (v) the cost of responding to government investigations arising out of the LES liquidity issues, and (vi) the diminution in value of LFG subsidiaries other than LES. The Court finds that the LFG Trustee has alleged facts that, if proven at trial, would allow the LFG Trustee to recover at least “some damages” on his claim. The Complaint, therefore, pleads sufficient damages to withstand a 12(b)(6) motion to dismiss. The Defendants challenge Plaintiffs contention that the Defendants are liable for the cost of litigation arising out of the LES liquidity problem. The Defendants are correct in their assertion that the presumption in both Maryland and Virginia is that the parties bear their own legal costs. See MR Crescent City, LLC v. Draper (In re Crescent City Estates, LLC), 588 F.3d 822, 825 (4th Cir. 2009), cert. denied, - U.S. -, 130 S.Ct. 3278, 176 L.Ed.2d 1184 (2010); Weichert Co. of Md., Inc. v. Faust, 419 Md. 306, 19 A.3d 393, 400 n. 2 (2011); West Square, LLC v. Commc’n Techs., 274 Va. 425, 649 S.E.2d 698, 702 (2007). However, the legal costs the Trustee seeks are not those re-805suiting from this litigation. Rather, they are the legal costs incurred as a result of numerous government investigations into the company and third party lawsuits brought by Exchangers against LFG. A plaintiff may recover attorneys’ fees arising from legal disputes with third parties caused by a defendant’s tortious conduct. See PCS Nitrogen, Inc. v. Ross Dev. Corp., 2010 WL 3893619, at 16-17, 2010 U.S. Dist. LEXIS 105219, at 46 (D.S.C. Sept. 30, 2010) (“PCS may collect attorney’s fees as damages to the extent that it proves its allegations that the Ross Directors’ tor-tious conduct caused PCS to become involved in legal disputes with third parties ... and PCS incurred attorney’s fees connected with these disputes.”) The Trustee’s demand for damages for expenses incurred defending third party litigation arising from the Defendants’ misconduct is properly included in the Complaint. The Defendants also challenge Plaintiffs assertion of joint and several liability against all of the Defendants. Joint and several liability may be imposed on two categories of defendants: true joint tortfeasors, defined as those who act in concert, and concurrent tortfeasors. Consumer Prot. Div. v. Morgan, 387 Md. 125, 874 A.2d 919, 950 (2005); See also Wright v. Eli Lilly & Co., 66 Va. Cir.195, 212 (Va.Cir.Ct.2004). “[T]he predicate for concurrent tortfeasors’ joint and several liability is the indivisibility of the injury.... [W]hen tortfeasors act independently and their acts combine to cause a single harm, the tortfeasors are jointly and severally liable.” Consumer Prot. Div. v. Morgan, 874 A.2d at 950. Joint and several liability also attaches to acts of omission if the tortfeasors act in concert or the omissions are concurrent. McKean v. Wal-Mart Stores, Inc., 2005 WL 1785260, at 2, 2005 U.S. Dist. LEXIS 25452, at 8 (S.D.W.Va. Jul. 26, 2005). Directors and officers of a corporation may be held jointly and severally liable if they jointly participate in the breach of fiduciary duty or approve of, acquiesce in, or conceal a breach by a fellow director or officer. 3 Fletcher Cyclopedia Corporations § 1002, at 666 (2010). See also Lawson v. Baltimore Paint & Chemical Corp., 347 F.Supp. 967, 978 (D.Md.1972) (“[T]he liability of fiduciaries who act together in breach of their fiduciary obligations is joint and several”) (citations omitted); Seaboard Indus., Inc. v. Monaco, 442 Pa. 256, 276 A.2d 305, 309 (1971) (“It is axiomatic that directors and officers of a corporation are jointly as well as severally liable for mismanagement, willful neglect or misconduct of corporate affairs if they jointly participate in the breach of fiduciary duty or approve of, acquiesce in, or conceal a breach by a fellow officer or director.”). Here, it is alleged that many breaches of fiduciary duty by these Defendants combined to cause the downfall of LFG. The injury to LFG is therefore indivisible and the imposition of concurrent joint and several liability is appropriate. Equitable Subordination Each of the Defendants has filed one or more proofs of claim for amounts allegedly owed to them by the LFG estate. Proofs of claim have been filed by Defendants Gluck, Saylors, Ramos, Chandler, Evans, and Ylahcevic (collectively, the “Change of Control Defendants”) in connection with the execution of certain Change of Control Employment Agreements dated October 27, 2008 (collectively, the “Change of Control Agreements”). Proofs of claim have also been filed by all the Defendants for indemnification. The Trustee asserts that all of these claims should be equitably subordinated due to the Defendants’ misconduct. Section 510(c)(1) of the Bankruptcy Code provides 806that a bankruptcy court may, “under principles of equitable subordination, subordinate for purposes of distribution all or part of an allowed claim to all or part of another allowed claim.” 11 U.S.C. § 510(c)(1). To equitably subordinate a claim, “(1) the claimant must have engaged in inequitable conduct; (2) the misconduct must have resulted in injury to the creditors of the bankrupt or conferred an unfair advantage on the claimant; and (3) equitable subordination of the claim must not be inconsistent with the provisions of the Bankruptcy Code.” In re SI Restructuring, Inc., 532 F.3d 355, 360 (5th Cir.2008). As equitable subordination is an extraordinary remedy that should be applied sparingly, the party seeking equitable subordination must generally “demonstrate ... egregious conduct such as gross misconduct tantamount to fraud, misrepresentation, overreaching, or spoliation.” Official Comm. Of Unsecured Creditors v. Fairchild Dornier GmbH (In re Dornier Aviation (N. Am.) Inc.), 2005 WL 4781236, at 16-17, 2005 Bankr.LEXIS 561, at 49-50 (Bankr.E.D.Va. Feb. 8, 2005) (citations omitted). Where the creditor is an insider or fiduciary, however, the standard is not as strict, and the party seeking subordination “need only show some unfair conduct, and a degree of culpability, on the part of the insider.” Id. (citations omitted). “Inequitable conduct for subordination purposes encompasses the breach of fiduciary duties.” Wilson v. Moir (In re Wilson), 359 B.R. 123, 138 (Bankr.E.D.Va.2006). See also Hovis v. Powers Constr. Co., Inc., (In re Hoffman Ass., Inc.), 194 B.R. 943, 965 (D.S.C.1995) (“The inequitable conduct of the claimant under § 510(c) generally involves conduct such as ... breach of fiduciary duty.”). In addition to affirmative actions, a failure to act appropriately may constitute inequitable conduct sufficient for the purposes of equitable subordination. See Miller v. Greenwich Fin. Prods., Inc. (In re Am. Bus. Fin. Servs., Inc.), 362 B.R. 149, 164-65 (Bankr.D.Del.2007) (holding that a “failure to service [ ] loan portfolios properly” constitutes inequitable conduct sufficient to warrant equitable subordination). Here, the Court has determined supra that the LFG Trustee has sufficiently alleged that the Defendants breached certain fiduciary duties owed to LFG by failing to properly address the LES liquidity problem. If proven, the breach of these duties would constitute inequitable conduct sufficient to warrant equitable subordination. The LFG Trustee has also properly alleged that the breach of these fiduciary duties, such as the continued co-mingling of new Exchange Funds and the continued use of those fund to retire existing Exchange obligations despite the severe liquidity problems that LES encountered after the ARS Freeze, resulted in the demise of LFG and significant harm to the creditors of LFG. Finally, the Court is aware of no provision within the Bankruptcy Code barring the equitable subordination of the Defendants’ claims. The LFG Trustee has properly alleged a claim for equitable subordination. Fraudulent Conveyance The complaint adequately pleads a claim for the avoidance of the obligations created by the Change of Control Agreements under § 548(a)(1)(B).35 The LFG Trustee alleges that Gluck, Saylors, Ramos, Chandler, Evans, and Vlahcevic entered into the Change of Control Agree807ments with LFG approximately one month prior to the Petition Date and while LFG was insolvent. The LFG Trustee further alleges that LFG received less than a reasonably equivalent value in exchange for executing the Change of Control Agreements. The Change of Control Defendants contest the sufficiency of this pleading on the grounds that it does not meet the “plausibility standard” articulated in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, which requires that the complaint contain facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 545, 127 S.Ct. 1955. Specifically, the Change of Control Defendants assert that the Trustee failed to sufficiently plead facts supporting the allegation that the Debtor received less than a reasonably equivalent value in exchange for the Change of Control Agreements. While the Complaint does not specifically set forth the value received by LFG or the industry standards for change of control agreements, such facts are not necessary to survive a motion to dismiss under Rule 12(b)(6). The Complaint states that the Change of Control Defendants entered into the Change of Control Agreements approximately one month before the Petition Date, and that LFG did not receive a reasonably equivalent value in exchange. The Complaint states a plausible claim on these facts. The level of detail requested by the Change of Control Defendants involves issues of proof and exceeds that required at this stage of the proceeding. The LFG Trustee has properly alleged a claim for the avoidance of the Change of Control Agreements under § 548 of the Bankruptcy Code. Conclusion The LFG Trustee has standing pursuant to the provisions of the Joint Chapter 11 Plan confirmed in this bankruptcy case to pursue the prepetition D & 0 Claims of LFG and LES against their respective officers and directors. The LFG Trustee also has standing to pursue the prepetition D & 0 Claims of LFG, as the sole shareholder of LES, directly (as opposed to derivatively) against the LES Defendants, as these claims derive from fiduciary duties that the LES Defendants owed to LFG and as the resulting damage claims of LFG are separate and distinct from any harm suffered by LES. As the provisions of the Joint Chapter 11 Plan confirmed in this bankruptcy case preserved all affirmative defenses notwithstanding the assignment of the D & 0 Claims to the LFG Trustee under § 1123(a)(5) of the Bankruptcy Code, the LFG Defendants may invoke the Virginia exculpation statute as an affirmative defense. The Virginia exculpation statute, however, does not bar claims for willful 808misconduct. The LFG Trustee has alleged that the LFG Defendants consciously failed to act in response to the LES liquidity problem despite repeated warning signs, both internal and in the industry at large. If proven, the LFG Trustee’s allegations would rise to the level of willful misconduct. The LES Defendants, on the other hand, may not invoke the Maryland exculpation statute as an affirmative defense, as the exculpation provision was not included in the corporate charter of LES as required by Maryland law. Nevertheless, the LES Defendants may be able to assert the affirmative defense of estoppel. The LES Defendants maintain that the LFG Trustee is estopped from asserting the corporate formality that the exculpation provision had to be included in the charter and not in the by-laws. The LES Defendants’ claim of estoppel must be pleaded and proved by the LES Defendants as an affirmative defense. But even if the LES Defendants are able to prevail in asserting this affirmative defense, the Maryland exculpation statute would not bar a claim for willful misconduct to the extent that the misconduct constitutes active and deliberate dishonesty material to the cause of action. With the exception of Selby, the LFG Trustee has stated a claim for breach of fiduciary duty against all of the LFG Defendants and all of the LES Defendants. Neither the Virginia business judgment rule nor the Maryland business judgment rule serves to bar the LFG Trustee’s claims as alleged as a matter of law. Defendants are free to raise the applicability of the respective business judgment rules as affirmative defenses at trial. The LFG Trustee’s Complaint against Selby will be dismissed for failure to state a plausible claim for relief with leave to Plaintiff to amend. The LFG Trastee has properly asserted a claim for the breach of fiduciary duty against Evans, Ramos, Chandler, Gluck and the LFG Board of Directors for LFG’s unauthorized transfer of $65 million to LES in violation of the Authority Guidelines established by the LFG Board of Directors. However, the separate cause of action asserted against Evans and Ramos for corporate waste based on the same allegations must fail. Virginia law does not recognize an independent tort for corporate waste. The Trustee has stated a viable claim for equitable subordination of all' claims filed by the Defendants against the LFG estate. The LFG Trustee has also properly pleaded a plausible cause of action for the avoidance of the Change of Control Agreements as fraudulent conveyances under § 548(a)(1)(B) of the Bankruptcy Code. Finally, if the LFG Trustee is able to prevail at trial on the claims he has alleged in the Complaint, the Defendants may be held jointly and severally liable for the damages suffered by LFG. A separate order shall issue. . Defendants Chandler, Evans, Gluck, Vlah-cevic and Ramos’ Motion to Dismiss Plaintiffs Adversary Complaint Pursuant to Rule 12(b)(6) [Docket No. 18]; Motion of Defendant Pamela K. Saylors to Dismiss Plaintiff's Adversary Complaint Pursuant to Rule 12(b)(6) [Docket No. 21]; Defendant Jeffrey C. Selby's Motion to Dismiss Plaintiff's Adversary Complaint [Docket No. 25]; Defendant Brent Allen's Motion to Dismiss Plaintiff's Adversary Complaint Pursuant to Rule 12(b)(6) [Docket No. 29]; Defendant Stephen Con-nor’s Motion to Dismiss [Docket No. 27]; Motion of LFG Former Independent Directors to Dismiss the Complaint [Docket No. 31]. . A Dutch Auction is a type of auction where-under the interest rate is established by an auctioneer beginning at a high asking rate, which is lowered until some participant is willing to accept the auctioneer's rate, or a predetermined reserve rate is reached. . The LES Director Defendants and the LES Officer Defendants are hereinafter referred to as the "LES Defendants.” . The LFG Director Defendants and the LFG Officer Defendants are hereinafter referred to as the "LFG Defendants.” . See Joint Chapter 11 Plan at §§ 7.3 and 7.16. . See Joint Chapter 11 Plan at §§ 8.3(b) and 14.4. . See Joint Chapter 11 Plan at §§ 5.12(a) and 8.2(b). . See Joint Chapter 11 Plan at §§ 8.2(b) and 8.3(b). . See Joint Chapter 11 Plan at §§ 8.2(b) and 8.9. . See Joint Chapter 11 Plan at § 8.2(d). . The Defendants also argue that the Trustee may not advance claims on behalf of creditors of the corporations. See N. Am. Catholic Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92 (Del.Supr.Ct.2007) ("[individual creditors of an insolvent corporation have no right to assert direct claims for breach of fiduciary duty against corporate directors. Creditors may nonetheless protect their interest by bringing derivative claims on behalf of the insolvent corporation or any other direct nonfiduciary claim ... that may be available for individual creditors.”). As the Trustee has disavowed advancing any such direct claims on behalf of the creditors of LFG or LES, this challenge is not at issue. . See discussion supra. . While Tooley was decided under Delaware law, Maryland courts accord significant respect to Delaware decisions on corporate law. See, e.g. Shenker, 983 A.2d at 420; Werbowsky, 766 A.2d at 143. . Waller addressed both whether the shareholder suffered a direct harm and whether the corporation owed a personal duty to the shareholder, but was ultimately decided on the nature of the duty owed to the shareholder. See Schettino v. Modanlo, 2005 WL 914376, 2005 Md. Cir. Ct. LEXIS 14 (Md.Cir.Ct.2005) (analyzing Waller and determining that the nature of the duty owed to the shareholder controls). . In late October and early November of 2008, approximately $70 million of liquid securities were transferred from LFG’s two principal title insurance subsidiaries to LES in exchange for approximately $88 million face value of wholly illiquid ARS in what was referred to as the “ARS Swaps.” The effect of the ARS Swaps was to diminish the value of LFG's two principal title insurance subsidiaries by tens of millions of dollars. On November 24, 2008, the Nebraska Department of Insurance, the insurance regulatory agency governing LFG’s two principal title insurance subsidiaries, filed a petition with the Court of Lancaster County, Nebraska, to place LFG's two principal title insurance subsidiaries in rehabilitation. . Section 2-405.1 states: (a) A director shall perform his duties as a director, including his duties as a member of a committee of the board on which he serves: (1) In good faith; (2) In a manner he reasonably believes to be in the best interests of the corporation; and (3) With the care that an ordinarily prudent person in a like position would use under similar circumstances. .Section 2-405.1(g) of the Corporations and Associations Article of the Maryland Code provides: "Nothing in this section creates a duty of any director of a corporation enforceable otherwise than by the corporation or in the right of the corporation.” . Article Tenth of the LFG Articles of Incorporation states: To the full extent that the Virginia Stock Corporation Act, as it exists on the date hereof or may hereafter be amended, permits the limitation or elimination of the liability of directors or officers, a director or officer of the Corporation shall not be liable to the Corporation or its shareholders for any monetary damages. . See discussion supra. . 11 U.S.C 523(a)(6) states: "A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt ... (6) for willful and malicious injuiy by the debtor to another entity or to the property of another entity.” . The definition states: (f) Charter.— (1) "Charter” includes: (i) A charter granted by special act of the General Assembly; (ii) Articles or certificate of incorporation; (iii) Amended articles or certificate of incorporation; (iv) Articles of restatement, if approved as described in § 2-609 of this article; (v) Articles of amendment and restatement; and (vi) Articles or agreements of consolidation. includes the documents referred to in paragraph (1) of this subsection, either as: (i) Originally passed or accepted for record; or (ii) As amended, corrected, or supplemented by special act of the General Assembly, articles of amendment, articles of amendment and reduction, articles of extension, articles supplementary, articles or agreements of merger, articles of revival, or a certificate of correction. (g) Charter document. — "Charter document" means any: (1) Document enumerated in subsection (f) of this section; and (2) Articles of reduction, articles or agreements of transfer, articles of merger, articles of share exchange, articles of dissolution, and stock issuance statements. Md. Code Ann., Corps. & Ass’ns, § 1-101. . Section 2-104(b)(4) states: "The articles of incorporation may include ... (4) Any provision that requires for any purpose the concurrence of a greater proportion of the votes of all classes or of any class of stock than the proportion required by this article for that purpose." Md. Code Ann., Corps. & Ass’ns, § 2-104(b)(4). . Section 2-404(d) states: "Unless the charter or bylaws of a corporation provide otherwise, a plurality of all the votes cast at a meeting at which a quorum is present is sufficient to elect a director." Md. Code Ann., Corps. & Ass’ns, § 2-404(d). .In Maryland, a shareholder that has "acquiesced, ratified, or participated in [a] transaction cannot bring suit thereafter” to challenge the transaction. Shapiro v. Greenfield, 136 Md.App. 1, 764 A.2d 270, 283 (2000) (citing Winter v. Bernstein, 149 Misc.2d 1017, 566 N.Y.S.2d 1012, 1014 (N.Y.Sup.Ct.1991) (stating that "[a] shareholder is estopped to challenge a corporate policy which he or she affirmatively approved”)). . The Trustee has asserted direct causes of action against the LES Defendants on behalf of LFG as sole shareholder of LES. . The Trustee argues, for instance, that the issue of detrimental reliance raises questions of fact. .If Plaintiff ultimately is estopped from challenging the By-law provision, Maryland would not apply the exculpation provision to the extent that the misconduct constitutes "active and deliberate dishonesty and [is] material to the cause of action.” Md.Code Ann., Cts. & Jud. Proc. § 5-418(a)(2). . While the Court notes the Defendants’ argument that the LFG Board of Directors assumed the responsibility for saving LES, there is nothing in the record that indicates that the LES Board made a conscious decision to transfer its responsibilities to the LFG Board. Whether it did so, and to what extent, if any, is a question of fact. . See discussion supra. . See, e.g. Giddens, 2011 WL 2934855, at 5, 2011 U.S. Dist. LEXIS at 12 (“Although the Maryland Court of Appeals has made clear that no omnibus tort so named exists, a cause of action for breach of fiduciary duty may proceed when a plaintiff identifies the appropriate fiduciary relationship, such as principal and agent or trustee and beneficiary, identifies how the relationship was breached, considers the available remedies, and selects the remedies appropriate to the plaintiff's problem.)” . The court in Caremark established a test that plaintiffs must meet in order to show that directors breached their duty of care by failing adequately to control a corporation’s employees. Under this test, a plaintiff must demonstrate (1) that the directors knew or should have known that violations of law were occurring, (2) that the directors took no steps in a good faith effort to prevent or remedy that situation, and (3) that such failure proximately resulted in the alleged losses. Caremark, 698 A.2d at 971. . Plaintiff repeatedly refers to these warning signs throughout the Complaint as "bright red flags." . "Deepening insolvency” refers to a theory of liability asserting that a defendant fraudulently or negligently prolonged a company's life, thereby causing the dissipation of corporate assets and exacerbating its insolvency. . See discussion supra. . Section 548(a)(1)(B) states: (a)(1) The trustee may avoid any transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of the debtor in property, or any obligation (including any obli*807gation to or for the benefit of an insider under an employment contract) incurred by the debtor, that was made or incurred on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily— (B)(i) received less than a reasonably equivalent value in exchange for such transfer or obligation; and (ii)(I) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation; (II)was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the debtor was an unreasonably small capital; (III) intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor's ability to pay as such debts matured; or (IV) made such transfer to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, under an employment contract and not in the ordinary course of business. 11 U.S.C. § 548(a)(1)(B).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494695/	OPINION AND ORDER ENRIQUE S. LAMOUTTE, Bankruptcy Judge. This case is before the court upon the Motion for Summary Judgment filed by defendant Banco Popular de Puerto Rico (as servicing agent for Fannie Mae, hereinafter “BPPR”) praying to be deemed a secured creditor and to deny the Debtor’s request to have its secured credit voided (Docket No. 17). Also before the court is Debtor’s Opposition [Thereto] and Cross Motion for Summary Judgment (the “Opposition & Cross Motion”, Docket No. 35) seeking to void BPPR’s mortgage, rendering it an unsecured creditor. For the reasons stated below, BPPR’s Motion for Summary Judgment is granted, Plaintiffs Cross Motion is denied and the instant adversary proceeding is hereby dismissed. Procedural Background On October 10, 2000, the Debtor (along with her former spouse, Reinaldo Villegas Maldonado) executed Deed No. 428 before Notary Public Jesus M. Rivera Delgado to segregate and purchase a real property located at Lot # 3, Block B, Hato Tejas Ward, Bayamon, Puerto Rico (the “Real Property”). Said Deed was filed at the Property Registry on September 15, 2003 at Entry No. 283 of the Daily Entries Book No. 447. See Docket Nos. 23, pp. 6-9, and 60, pp. 7-8 (Property Registrar’s Certifications issued on March 5, 2010 and May 25, 2011, respectively, affirming that Deed No. 428 was filed on that date at that entry). Also on October 10, 2000, the Debtor executed two mortgage deeds to secure two separate liens on the Real Property: (1) Deed No. 207 executed before Notary Public Ahmed Arroyo Romeu to secure a first mortgage in favor of Champion Mortgage Corp. (which was subsequently assigned to BPPR) filed at the Property Registry on September 15, 2003 at Entry No. 284 of the Daily Entries Book No. 447 (the “Mortgage Deed ”); and (2) Deed No. 429 executed before Notary Public Jesus M. Rivera Delgado to secure a second mortgage in favor of the Puerto Rico Pub-679lie Housing Administration (the “PR Housing Administration”) filed at the Property-Registry on September 15, 2003 at Entry No. 285 of the Daily Entries Book No. 447. See Docket No. 16, pp. 10-11. Also see Docket No. 60, p. 8 (Property Registrar’s Certification issued on May 25, 2011 confirming that both mortgage deeds were filed on that date at those entries). On September 3, 2004, Debtor, along with several of her neighbors, filed a Complaint against the PR Housing Administration and the Commonwealth of Puerto Rico before the Court of First Instance, Superior Court of Bayamon (the “PR Court of First Instance”), Case No. D PE 2004-0752(504), alleging that the defendants had not filed any of the executed segregation and purchase deeds for the registration of their properties at the Property Registry. Plaintiffs in that case, including the Debtor, sought a temporary and permanent injunction relief against defendants, as well as monetary damages. See Docket No. 16, pp. 41-59. On March 1, 2007, R & G Mortgage Corp. (“R & G”, now BPPR) filed an ordinary foreclosure Complaint (“demanda de ejecución de hipoteca por la vía ordinaria”) against the Debtor and her former husband before the Court of First Instance, Superior Court of Bayamon, Case No. D CD 2007-0623(503), alleging that the Debt- or (and her husband) had defaulted on their mortgage payments. See Docket No. 36, pp. 7-9. On or about September 18, 2007, R & G (now BPPR) filed a Motion informing that its mortgage had not then been recorded at the Property Registry and thus requested the entry of a collection of monies judgment. See Docket No. 36, pp. 10-11. On October 8, 2007, notified and docketed on November 5, 2007, the PR Court of First Instance issued a Collection of Monies Judgment against the Debtor and her former husband, in the amount of $54,958.73, including principal, interests and late fees, $5,350.00 in attorneys fees and a fixed annual interest rate at 12.00%. See Docket No. 36, pp. 12-16. On December 6, 2007, R & G filed a Motion for a lis pendens lien on the Debtor’s Real Property under Puerto Rico’s former Civil Procedure Rule 56.4, 32 L.P.R.A. Ap. Ill R. 56.41, to which Debtor opposed on or about January 11, 2008. See Docket No. 36, pp. 17-19 and 20-21. On December 20, 2007, the PR Court of First Instance issued an Order granting the lien requested by R & G, and on January 8, 2008, issued the corresponding Writ of execution ordering the Property Registrar to record a lien over the Debtor’s Real Property (Docket No. 36, pp. 24 & 25-26). On May 1, 2008, the PR Court of First Instance issued an Order to its Marshal to hold a public auction to sell the Debtor’s Real Property in execution of the Collection of Monies Judgment (Docket No. 36, pp. 29-30). On May 16, 2008, the Debtor filed a Motion to set aside the Order authorizing the lien requested by R & G (Docket No. 36, pp. 31-33). On July 21, 2008, the Debtor filed a Chapter 13 Bankruptcy Petition (Lead Case Docket No. 1). On June 2, 2009, the Debtor, along with the rest of the co-plaintiffs in Case No. D PE2004-0752 (504), signed a Stipulation of Judgment by Settlement with the PR Housing Administration whereby plaintiffs would receive a total amount of $140,400.00 for all the alleged damages and defendants would take all the necessary actions to 680have all the purchase deeds filed and registered at the Property Registry within 6 months (Docket No. 16, p. 50-59). On June 12, 2009, notified and docketed on June 22, 2009, the PR Court of First Instance issued a Settlement Judgment approving said Stipulation (Docket No. 16, pp. 56-59). On August 11, 2009, the Debtor filed the instant Complaint alleging that BPPR has not perfected its mortgage lien on her Real Property and therefore its Claim 2-1 should be reclassified as unsecured (Docket No. 1). On December 7, 2009, BPPR filed its Answer to the Complaint (Docket No. 11) alleging that a title search performed at that time revealed that the Property Registry had not notified any defects that could impair BPPR’s Mortgage Deed and that the fact that a mortgage deed that has been filed but not yet not recorded, absent of a finding or notice of error in the mortgage deed, does not render BPPR an unsecured creditor. On December 8, 2009, a pre-trial hearing was held in which the court granted the parties 60 days to conclude discovery. A continuance was scheduled for March 5, 2010 at 9:30 a.m. (Docket No. 14). On March 2, 2010, BPPR filed the Motion for Summary Judgment along with its Statement of Uncontested Facts (Docket Nos. 17 & 16, respectively). BPPR sustains that the Mortgage Deed was filed at the Property Registry on September 15, 2003, without the Registrar having notified any defects on it, which had been pending registration in the Property Registry’s back-log ever since. Consequently, BPPR argues that pursuant to Sections 362(b)(3), 506 and 547 of the Bankruptcy Code and this court’s decision in Soto-Rios v. BPPR (In re Soto-Rios), 420 B.R. 57 (Bnkr.D.P.R.2009)2, it is a secured creditor. On March 5, 2010, the continuation of the pre-trial was held and was continued without a date pending a decision on BPPR’s Motion for Summary Judgment. Debtor was granted 20 days to file her opposition (Docket No. 18). On April 12, 2010, BPPR filed a Motion Submitting Documents in Support of [its] Motion for Summary Judgment (Docket No. 23). On June 21, 2010, Debtor filed her Opposition & Cross Motion for summary judgment along with its Statement of ... Uncontested Facts (Docket Nos. 35 & 36). The Debtor alleges that BPPR “abandoned” the execution of its mortgage foreclosure cause of action because since the Mortgage Deed had not registered at the Property Registry, it decided and requested from the PR Court of First Instance to only continue a personal collection of monies judgment instead (Docket No. 35, p. 9, referring to Docket No. 36, pp. 10-11). Based on the “abandonment” argument, the Debtor also purports that the res judi-cata doctrine precludes BPPR from foreclosing the Debtor’s mortgage based on the decision by the Supreme Court of Puerto Rico in Banco de la Vivenda v. Carlo Ortiz, 130 D.P.R. 730 (1992). Additionally, and also following the “abandonment” premise, Debtor sustains that the PR Court of First Instance’s Order granting the judicial lien is null because it was issued without a hearing contrary to the Puerto Rico Supreme Court’s decision in 681Rivera Rodriguez & Co. v. Lee Stowell Taylor, 133 D.P.R. 881 (1993). On December 10, 2010, the Court issued an Order & Notice scheduling a hearing for February 8, 2011 to consider the motions for summary judgment and oppositions filed by BPPR and Debtor, which was subsequently rescheduled for May 11, 2011 (Docket Nos. 48, 50, 52, 54 & 55). In that hearing, the court ordered the parties to inform the court whether the Stipulation in Case No. D PE2004-0752 (504) before the PR Court of First Instance had been complied with by the PR Housing Administration to ensure that the properties were recorded in plaintiffs’ name, including the Debtor. On July 12, 2011, BPPR filed a Motion in Compliance with Order (Docket No. 60) including an updated Certification issued by the Property Registrar on May 25, 2011 that reveals that BPPR’s Mortgage Deed had been filed since September 13, 2003 and that no defects had been notified to that effect as to that date. On September 7, 2011, the court issued an Order (Docket No. 64) for Debtor to show cause within 21 days why the instant Complaint should not be dismissed for failure to comply with this court’s order of May 11, 2011 (Docket No. 58) and defendant BPPR’s request (Docket No. 60). On September 26, 2011, Debtor filed a Motion to Show Cause (Docket No. 66) alleging that the delay was caused by the inability of her attorney to obtain the evidence to reflect the status of the mortgage in question in the Property Registry, notwithstanding efforts directed to obtain the same, which was granted on October 3, 2011 (Docket No. 67). On November 3, 2011, Debtor filed an Informative Motion (Docket No. 69) attaching the latest title search on the Real Property dated October 11, 2011, which reveals that the Property has been recorded to Debtor’s name (and her husband Reinaldo Villegas Maldonado), along with BPPR’s Mortgage Deed. It also shows that the Property Registrar recorded a lis pen-dens and a judicial lien Order from the PR Court of First Instance dated February 14, 2008, both in favor of BPPR (Docket No. 69, pp. 2-3). Applicable Law & Analysis Automatic Stay under 11 U.S.C. § 862(a) The automatic stay is one of the fundamental debtor protections in the Bankruptcy Code. It provides the debtor with a “breathing spell” from creditors and it stops all collection efforts, all harassment, and all foreclosure actions upon filing for bankruptcy. H.R.Rep. No. 95-595, 95th Cong. 1st Sess. 340-342 (1977); S.Rep. No. 989, 95th Cong., 2nd Sess. 54-55 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5840, 6296-97. “It allows the debtor to attempt a repayment or reorganization plan or simply be relieved of the financial pressures that drove him into bankruptcy.” Id. The automatic stay prohibits “any act to create, perfect, or enforce any lien against property of the estate.” 11 U.S.C. § 362(a)(4). Despite the fundamental importance of the automatic stay, Congress has allowed certain exceptions to the automatic stay, such as those included under Section 362(b) of the Bankruptcy Code. See Soto-Rios v. BPPR (In re Soto-Rios), 662 F.3d at 116; 229 Main St. Ltd. Pshp. v. Mass. DEP (In re 229 Main St.), 262 F.3d 1, 3-4 (1st Cir.2001); Perez Mujica v. FirstBank, P.R. (In re Perez Mujica), 457 B.R. 177, 184-185 (Bankr.D.P.R.2011). Exception to Automatic Stay under 11 U.S.C. § 362(b)(3) Section 362(b)(3) of the Bankruptcy Code provides an exception to the automatic stay, under subsection (a) of Section 362 of the Bankruptcy Code by 682allowing “any act to perfect, or to maintain or continue the perfection of, an interest in property to the extent that the trustee’s rights and powers are subject to such perfection under Section 546(b) of this title.” 11 U.S.C. § 362(b)(3) (emphasis added). “Section 362(b)(3) does not authorize the creation of new rights or interests for the creditor. Instead, it merely permits perfection, or maintenance or continuation of perfection, free of the automatic stay that would otherwise be applicable, under circumstances in which the creditor’s action would be effective against a trustee.” Alan N. Resnick & Henry J. Sommer, 5 Collier on Bankruptcy ¶ 362.05[4] (16th ed. 2012). To qualify for this particular exception to the automatic stay, a creditor must satisfy the following three requirements: (i) an act to perfect; (ii) an interest in property; and (in) under the circumstances in which the perfection-authorizing statute fits within the parameters of Section 546(b) of the Bankruptcy Code. Soto-Rios v. BPPR (In re Soto-Rios), 662 F.3d at 116; In re 229 Main St., 262 F.3d at 5. Thus, Section 362(b)(3) depends on the limitations imposed on the trustee’s avoiding powers pursuant to Section 546(b) of the Bankruptcy Code. The purpose of Section 546(b)(1) is to “protect, in spite of the surprise intervention of a bankruptcy petition, those whom State law protects by allowing them to perfect their liens as of an effective date that is earlier than the date of perfection.” Alan N. Resnick & Henry J. Sommer, 5 Collier on Bankruptcy ¶ 546.03[1] (16th ed. 2012) quoting S.Rep. No. 989, 95th Cong., 2nd Sess. 86-87 (1978), H.R.Rep. No. 595, 95th Cong., 1st Sess. 371-371 (1977). Section 546(b)(1) exempts from the trustee’s avoiding powers under Sections 544, 545 and 549 of the Bankruptcy Code “any generally applicable law that permits the perfection of an interest in property to be effective against an entity that acquires rights in such property before the date of perfection; or provides for the maintenance or continuation of perfection of an interest in property to be effective against an entity that acquires rights in such property before the date on which action is taken to effect such maintenance or continuation.” 11 U.S.C. §§ 546(b)(1)(A) & 546(b)(1)(B). “Thus, simply stated, if a creditor possesses a pre-petition interest in property, and state law establishes a time period for perfection of a lien based upon that interest, the ‘lien does not lose its preferred standing by reason of the fact that it [is] not perfected until after the commencement of a bankruptcy’ so long as it is perfected within the time period established by state law.” Lincoln Sav. Bank, FSB v. Suffolk County Treasurer (In re Parr Meadows Racing Ass’n), 880 F.2d 1540, 1546 (2nd Cir.1989), cert. denied, 493 U.S. 1058, 110 S.Ct. 869, 107 L.Ed.2d 953 (1990), quoting from Poly Industries, Inc. v. Mozley, 362 F.2d 453, 457 (9th Cir.1966). “For a creditor to enjoy this haven, (1) the creditor must act pursuant to a law of general applicability; (2) that law must allow the creditor to perfect an interest in property; and (3) such perfection must be effective against previously acquired rights in the property.” Soto-Rios v. BPPR (In re Rios), 662 F.3d at 116. “The gist of this exception is that the filing of a bankruptcy petition does not prevent the holder of an interest in property from perfecting its interest if, absent the bankruptcy filing, the interest holder could have perfected its interest against an entity acquiring rights in the property before the date of perfection.” Id. at 116 (quotations omitted). BPPR’s Pre-petition Interest in Debtor’s Real Property One of the requirements that BPPR must satisfy under Sections 362(b)(3) and 683546(b)(1) of the Bankruptcy Code is that to demonstrate a pre-petition property interest in Debtor’s Real Property. See Soto-Rios v. Banco Popular de P.R., 662 F.3d at 117-121. The existence and extent of an entity’s interest in property is dictated by local law. Soto-Rios v. Banco Popular de P.R., 662 F.3d at 117. A mortgage is a hen3 and a “lien” is defined in the Bankruptcy Code as a “charge against or interest in property to secure payment of a debt”. 11 U.S.C. § 101(37). Puerto Rico Mortgage Law follows that trend applying the “hen theory”, meaning that “the mortgage is a mere security for the debt, creating a hen interest without divesting the mortgagor of legal title during the period of the debt repayment”. Soto-Rios v. Banco Popular de P.R., 662 F.3d at 118. Also see Article 155 of Puerto Rico’s Mortgage Law, 30 L.P.R.A. § 2551; Liechty v. Descartes Sauri, 9 P.R. Offic. Trans. 660, 109 P.R. Dec. 496 (1980) (holding that a “mortgage” encompasses “a property right”). BPPR argues that it acquired a pre-petition property interest in Debtor’s Real Property when it acquired the mortgage loan from Champion Mortgage Corp., evidenced by the Debtor’s execution of a mortgage note incorporated into the Mortgage Deed on October 10, 2000, which was presented at the Property Registry on September 15, 2003, that is, about 6 years and 6 months prior to the Debtor’s filing for bankruptcy. See BPPR’s Motion for Summary Judgment (Docket No. 17, pp. 11-21). The Debtor does not dispute these facts. Instead, she purports that BPPR “abandoned” its mortgage upon requesting from the PR Court of First Instance to only continue only the personal collection of monies cause of action instead of prosecuting the foreclosure of the mortgage in Case No. D CD2007-0623 (507). See Debtor’s Opposition & Cross Motion (Docket No. 35, p. 9, referring to Docket No. 36, pp. 10-11). Debtor also argues that the res judicata doctrine precludes BPPR from foreclosing the Debtor’s mortgage based on Banco de la Vivenda v. Carlo Ortiz, 130 D.P.R. 730 (1992). Additionally, Debtor sustains that because BPPR “abandoned” its mortgage, it only holds a judicial hen over Debtor’s Real Property and that the PR Court of First Instance’s Order granting the judicial lien is null because it was issued without a hearing contrary to the Puerto Rico Supreme Court’s decision in Rivera Rodriguez & Co. v. Lee Stowell Taylor, 133 D.P.R. 881 (1993). The court rejects Debtor’s argument that BPPR “abandoned” its mortgage when it sought a personal collection of monies judgment and a judicial lien over the Real Property. Contrary to the Debt- or’s contention, BPPR’s motion for a personal Collection of Monies Judgment before the PR Court of First Instance does not constitute an abandonment of its in rem cause of action. In Puerto Rico, an ordinary foreclosure action — like in the one initiated by BPPR before the PR Court of First Instance against Debtor — is mixed in nature, meaning that “it is real and personal”. P.R. Prod. Credit Ass’n v. Registrador, 23 P.R. Off. Trans. 213, 222 (1989), 123 D.P.R. 231, 241 (1989), citing Widow of Carlo v. Toro, 99 P.R.R. 196, 212 (1970). Both remedies are considered to 684be merged into “one single mixed claim” when they are sought against the owner of the mortgaged real property like the instant case. P.R. Prod. Credit Ass’n v. Registrador, 23 P.R. Off. Trans, at 224, 123 D.P.R. at 245-246; First Federal Savings v. Nazario, 138 D.P.R. 875, 880-881 (1995). A creditor seeking personal and in rem remedy within the ordinary foreclosure action may only continue with the personal collection of monies action as “it is perfectly lawful for a creditor to resort to a preventive measure as is the attachment to protect [its] rights and prevent the judgment from becoming ineffective”. P.R. Prod. Credit Ass’n v. Registrador, 23 P.R. Off. Trans, at 224, 123 D.P.R. at 244. The First Circuit has adopted a similar posture. For instance, in Goya Foods, Inc. v. Wallack Management Co., 290 F.3d 63, 71 (1st Cir.2002), the Court of Appeals for the First Circuit ruled that the “greatest virtue” of Rule 56.4 of the Puerto Rico Rules of Civil Procedure is the “flexibility” upon which it must be interpreted instead of “mystifying it with technical concepts”. The only “limitation [to that flexibility] is that the measure be reasonable and adequate to the essential purpose of the same, which is to guarantee the effectiveness of the judgment which in due time may be rendered.” Id. at 71. That is exactly what BPPR did before the PR Court of First Instance: take all the necessary steps to secure its judgment. Ultimately, the remedy is one and the same: ordering the payment of the unpaid credit. See First Federal Savings v. Nazario, 138 D.P.R. at 880. Therefore, while BPPR awaited the Property Registrar to record the Mortgage Deed filed on September 15, 2003, it was entitled to seek a provisional collection of monies judgment and a judicial lien to secure it over the Real Property. Such a course of action does not constitute an “abandonment” on its potential in rem mortgagor rights and subsequent execution mechanisms upon the registration of Mortgage Deed nor does it invalidate BPPR’s secured credit in these proceeding. Consequently, BPPR had a valid interest in the Debtor’s Real Property. Because the Debtor used the alleged “abandonment” of the mortgage as the main premise for its remaining arguments of res judicata and the nullity of the judicial lien (which Debtor’s sustains is BPPR’s only security interest over the Real Property), both are also denied. Moreover, as of today, BPPR’s Mortgage Deed has already been recorded at the Property Registry, as well as the lis pen-dens and a post-judgment pre-petition judicial lien in BPPR’s favor as to the Collection of Monies Judgment. See Docket No. 60, pp. 2-3. BPPR’s acts to perfect its pre-petition property interest The second requirement for the exception of the automatic stay under Section 362(b)(3) of the Bankruptcy Code is “any act to perfect, or to maintain or continue the perfection, of an interest in property”. 11 U.S.C. § 362(b)(3). “[T]he filing of a bankruptcy petition does not automatically stay an act to perfect, the simultaneous post-petition creation and perfection of a lien may come within the pertinent exception to the automatic stay so long as the creditor holds a valid pre-petition interest in the property.” In re 229 Main St., 262 F.3d at 9. A “[creditor's pre-petition property interest in the real properties is based on taking all possible administrative steps ... in order for its property interest to be duly recorded by the Property Registrar so that their mortgage lien could become effective from the date the mortgage deeds were presented to the Property Registry pursuant to Article 53 of the Mortgage 685Law of Puerto Rico4, 30 L.P.R.A. § 2256.” Soto-Rios v. BPPR (In re Soto-Rios), 420 B.R. at 69, aff'd at 662 F.3d 112. Puerto Rico law regards the filing of a mortgage at the Property Registry to be a legally significant act that initiates the certifying role of the Property Registrar, begins the process of registration and operates as the decisive point for resolving any competing registrations in the same property. See 30 L.P.R.A. § 2256; Soto-Rios v. BPPR (In re Soto-Rios), 662 F.3d at 121. Registration will relate-back -to the filing of the deed. Id. at 121. BPPR satisfies this requirement: it filed its Mortgage Deed for registration on September 15, 2003, which had been pending registration ever since without any notifications of defects from the Property Registrar. See the Property Registrar’s Certification dated May 25, 2011 (Docket no. 60, p. 8). Therefore, the second prong is also met. Circumstances for the perfection-authorizing statutes within the parameters of 11 U.S.C. § 54.6(b) The third requirement for the exception to the automatic stay to apply is that creditor meets the requirements set forth in Section 546(b)(1) of the Bankruptcy Code, namely: (i) that the creditor must act pursuant to the law of general applicability; (ii) that law must allow the creditor to perfect an interest in property; and (Hi) such perfection must be effective against previously acquired rights in the property. The first two (2) elements established pursuant to Section 546(b)(1) were previously discussed under the requirements of Section 362(b)(3) of the Bankruptcy Code. As to this third requirement, there is no dispute regarding the general applicability of the Puerto Rico Mortgage Law and that its Article 53 has a specific relation-back provision which provides for the perfection of a creditor’s secured interest (interest in property) to relate back to the date of presentation. 30 L.P.R.A. § 2256. This requirement consists of whether absent of the bankruptcy filing, the creditor could have perfected its interest against an entity acquiring rights in the property before the date of perfection. It is intimately related to Mortgage Law of Puerto Rico’s relation back-provision, since any other liens or encumbrances presented or registered with a prior date to the filing of the bankruptcy petition but with a subsequent date to the dates the mortgage liens were presented would not take precedence over the mortgage liens based on the principle of prior tempore potior iure. See Ponce Federal Savings v. Registrador, 105 P.R.R. 563, 570, 105 D.P.R. 486, 492 (1976) (“The principle of register priority (prior tempore potior iure) compels the Registrar to handle the titles presented by the strict order of their presentation to the Registry.”) In this case, BPPR’s Mortgage Deed has already been recorded by the Property Registrar as of October 11, 2011, which pursuant to Article 53 of the Mortgage Law, relates-back to September 15, 2003. See Docket No. 69, pp. 2-3. Avoidance Action under 11 U.S.C. §§ 544(a)(1) & 544(a)(3) Sections 544(a)(1) and 544(a)(3) of the Bankruptcy Code provide in their relevant parts that: 686[t]he trustee shall have, as of the commencement of the case, and without regard to any knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any transfer of property of the debtor or any obligation incurred by the debtor that is voidable by — (1) a creditor that extends credit to the debtor at the time of the commencement of the case, and that obtains, at such time and with respect to such credit, a judicial lien on all property on which a creditor on a simple contract could have obtained such a judicial lien, whether or not such a creditor exists; ... (3) a bona fide purchaser of real property, other than fixtures, from the debtor, against whom applicable law permits such transfer to be perfected, that obtains the status of a bona fide purchaser at the time of the commencement of the case, whether or not such a purchaser exists [and has perfected such transfer], 11 U.S.C. §§ 544(a)(1) & 544(a)(3). The rights of a trustee under 11 U.S.C. § 544 are determined by state law. Abboud v. The Ground Round, Inc., 482 F.3d 15, 20 (1st Cir.2007) (holding that Pennsylvania law determined the rights of a hypothetical lien creditor under 11 U.S.C. § 544(a)(1)). See also In re Santos & Nieves, Inc., 814 F.2d 57, 61 (1st Cir.1987) citing Carina Mercury, Inc. v. Igaravides, 344 F.2d 397 (1st Cir.1965). Moreover, the extent of the trustee’s rights as a judicial lien creditor or a bona fide purchaser of real property is dictated by the state law of the jurisdiction governing the property in question. Alan N. Resnick & Henry J. Sommer, 5 Collier on Bankruptcy ¶ 544.03[1] (16th ed. 2012). The purpose of the trustee’s avoiding powers is simply “to foster the equal distribution of a debtor’s assets among its general non-priority creditors.” Segarra v. Melendez-Os-ario (In re Chardon-Rubero), 2006 Bankr.LEXIS 3912 at 8, 2006 WL 3909922 at 3 (Bankr.D.P.R.2006). However, the trustee’s avoiding powers under Section 544(a) are subject to Section 546(b) of the Bankruptcy Code, which provides an important exception to the trustee’s avoiding powers since the same are subject to “any generally applicable law that permits” relation-back. Alan N. Resnick & Henry J. Sommer, 5 Collier on Bankruptcy ¶ 544.04 (16th ed. 2012). As previously discussed, this court concludes that BPPR satisfies the requirements under Section 546(b) of the Bankruptcy Code, thus falling within the exception to the trustee’s avoiding powers pursuant to Section 544(a) of the Bankruptcy Code. Preferential Transfers under 11 U.S.C. §§ 51.7(b) & 517(e)(1)(A) Section 547(b) of the Bankruptcy Code allows the trustee to avoid, as a preference: any transfer of an interest of the debtor in property — (1) to or for the benefit of a creditor; (2) for or on account of an antecedent debt owed by the debtor before such transfer was made; (3) made while the debtor was insolvent; (4) made — (A) on or within 90 days before the date of the filing of the petition; or (B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and (5) that enables such creditor to receive more that such creditor would receive if — (A) the case were a case under chapter 7 of this title; (B) the transfer had not been made; and (C) such creditor received payment of such debt to the extent provided by the provisions of this title. 11 U.S.C. § 547(b). Section 547(e)(1)(A) provides that “a transfer of real property other than 687fixtures, but including the interest of a seller or purchaser under a contract for the sale of real property, is perfected when a bona fide purchaser of such property from the debtor against whom applicable law permits such transfer to be perfected cannot acquire an interest that is superior to the interest of the transferee.” 11 U.S.C. § 547(e)(1)(A). Moreover, Section 547(e)(3) establishes that “a transfer is not made until the debtor has acquired rights in the property transferred.” 11 U.S.C. § 547(e)(3). Perfection as to real property depends entirely upon state law. See Alan N. Resnick & Henry J. Sommer, 5 Collier on Bankruptcy ¶ 547.06[1] (16th ed. 2012). As discussed above, the applicable state law is Article 53 of the Mortgage Law of Puerto Rico, 30 L.P.R.A. § 2256, which has a relation back mechanism that establishes that mortgage liens become effective against third parties from the date the mortgage deeds were presented to the Property Registry. It is important to note that, “the entry of presentation is constructive notice to all the world until the document is recorded.” Flores v. Arroyo, 43 D.P.R. 282, 283 (1932). Thus, in order for a bona fide purchaser to acquire an interest superior to BPPR’s interest in these properties the same had to present to the Property Registrar for recordation a deed prior to the date in which BPPR presented its Mortgage Deeds, to wit, September 15, 2003. See Docket No. 16, pp. 14 — 39, and Docket No. 60, p. 8. No such evidence exists in the docket of this case. Conclusion For the reasons stated above, this court finds that the actions by BPPR satisfy the requirements of Sections 362(b)(3) and 546(b)(1) of the Bankruptcy Code, thus falling within the exception to the automatic stay and the exception to the trustee’s avoiding powers under Section 544(a) of the Bankruptcy Code. This court also concludes that Plaintiffs have not established the necessary elements of a preferential transfer under Section 547(b) and 547(e)(1)(A) of the Bankruptcy Code. In view of the foregoing, BPPR’s Motion for Summary Judgment is hereby GRANTED and Debtor’s Opposition & Cross Motion for summary judgment is hereby DENIED. Therefore, it is now ordered that the instant adversary proceeding be and is hereby dismissed. Judgment shall be entered accordingly. . Puerto Rico's Civil Procedure Rules of 1979 were repealed through Act No. 20 of December 29, 2009, adopting the current Rules of Civil Procedure of 2009, which became effective on July 1, 2010. The citation of the current rule is 32 L.P.R.A. Ap. V R. 56.4. The amendment to Rule 56.4 does not vary the result of this Opinion & Order. . The decision was appealed to the District Court for the District of Puerto Rico and to the Court of Appeals for the First Circuit. See Soto Rios v. BPPR (In re Soto-Rios), 662 F.3d 112 (1st Cir.2011). The Court is aware that at the time that BPPR filed its Motion for Summary Judgment (Docket No. 17), the Opinion by the First Circuit had not been issued or published. The First Circuit affirmed this court’s decision. . See Black’s Law Dictionary, 9th ed. 2009, p. 1101 (defining a "mortgage” as a "lien against property that is granted to secure an obligation”). Also see In re Endlich, 47 B.R. 802, 807 (Bankr.E.D.N.Y.1985) (“A mortgage is a consensual lien”); In re Acevedo-Vargas, 2012 Bankr.LEXIS 1701 at 14, 2012 WL 1345076 at *5 (Bankr.D.P.R.2012) ("A mortgage is a lien and a ‘lien’ is a security interest pursuant to 11 U.S.C. § 101(37)"). . Article 53 of the Puerto Rico Mortgage Law provides that "[r]egistered titles become effective for third parties from the date of their registration. For all intents and purposes, the registration date, including the determination of the term needed for cancellation of entries must appear in the registration itself. In order to determine preference between two or more registrations of the same property, attention shall be given to the date, hour and presentation number of the respective titles in the Registry.” 30 L.P.R.A. § 2256.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494696/	MEMORANDUM ON MOTION TO AVOID JUDICIAL LIEN AND OBJECTION TO EXEMPTIONS RICHARD STAIR, JR., Bankruptcy Judge. This contested matter is before the court on the Motion to Avoid Judicial Lien filed by the Debtors on December 8, 2011, asking the court to avoid, pursuant to 11 U.S.C. § 522® (2006), the judgment lien of 717Knoxville TVA Employees Credit Union encumbering the Debtors’ residential real property located in Grainger County, Tennessee, which the Debtors aver impairs their homestead exemption. Knoxville TVA Employees Credit Union (Credit Union) filed the Response of Knoxville TVA Employees Credit Union in Opposition to Debtors’ Motion to Avoid Judicial Lien on December 27, 2011, arguing that the Debtors own two parcels of real property and they are entitled to claim the homestead exemption only in their principal residence.1 The Credit Union also filed, on December 27, 2011, an Objection to Debtors’ Claim of Exemption objecting to the Debtors’ claimed homestead exemption. The facts and documents essential for the resolution of this contested matter are before the court through the Joint Stipulation of Facts and Documents filed by the parties on March 22, 2012. The Brief in Support of Avoiding Judicial Lien was filed by the Debtors on April 4, 2012, and the Memorandum of Law in Support of Knoxville TVA Employees Credit Union’s Response in Opposition to Debtors’ Motion to Avoid Judicial Lien and Objection to Debtors’ Claim of Exemption was filed by the Credit Union on April 4, 2012. The court also takes judicial notice, pursuant to Rule 201 of the Federal Rules of Evidence, of material undisputed facts of record in the Debtors’ bankruptcy case. This is a core proceeding. 28 U.S.C. § 157(b)(2)(K) (2006). I The Debtors filed the Voluntary Petition commencing their bankruptcy case under Chapter 7 on November 4, 2011. They were granted a general discharge of their debts on February 17, 2012. Jt. Stips. at ¶ 8. The assets of the Debtors include real property located at 250 Tampico Church Road, Rutledge, Grainger County, Tennessee (Tampico Church Road Property), which is improved with a dwelling used by the Debtors as their principal residence (Residence) and a second residential structure (Farmhouse) that is unoccupied. Jt. Stips. at ¶¶ 2-3. The Debtors have claimed a homestead exemption in the amount of $50,000.00 in the Tampico Church Road Property. Jt. Stips. at ¶ 7. The Tampico Church Road Property is encumbered by a mortgage in favor of Bank of America approximating $96,000.00 which is evidenced by a Deed of Trust. Jt. Stips. at ¶ 4. The Credit Union is a creditor of the Debtors, holding a perfected judgment lien encumbering the Tampico Church Road Property in the amount of $9,054.70 as of February 24, 2012, plus accruing interest. Jt. Stips. at ¶¶ 5-6; EX. A. On December 8, 2011, the Debtors filed a number of motions to avoid judicial liens, including the Motion to Avoid Judicial Lien as to the Credit Union, and on January 3, 2012, the court entered separate orders avoiding judicial liens held by FFPMyCarmel Holdings, LVNV Funding, LLC as assignee of HSBC Bank Nevada, N.A., and LVNV Funding, LLC as assign-ee of Paypal Buyers Credit GE Capital that encumbered the Tampico Church Road Property. Jt. Stips. ¶ 9. As set forth in the Joint Statement of Issues filed by the parties on February 24, 2012, the court is to resolve the following issues: 1. Can a debtor claim a homestead exemption on all or any part of a single parcel of real property that includes two residential dwellings being the principal 718place of residence for the debtors and their minor children and a second residence that is vacant? 2. If the debtors can only claim a homestead exemption on the parcel of land and the debtor’s [sic] principal place of residence, but not the second residential dwelling that is vacant, what remedy does the creditor have with regards to the second residential dwelling? Does the judicial lien attach to [the] second vacant residential dwelling, and if so, how does it attach? II Upon the filing of their petition, the Debtors’ bankruptcy estate, inclusive of all property and interests they owned, was created. 11 U.S.C. § 541 (2006). To facilitate the “fresh start” purpose of bankruptcy relief, the Bankruptcy Code allows debtors to exempt certain property which is subtracted from the bankruptcy estate. 11 U.S.C. § 522(b)(2) (2006); In re Ar-wood, 289 B.R. 889, 892 (Bankr.E.D.Tenn. 2003). As is relevant to this contested matter, the Debtors have claimed a homestead exemption in the Tampico Church Road Property under Tennessee Code Annotated § 26-2-301 which provides, in material part: (a) An individual, whether a head of family or not, shall be entitled to a homestead exemption upon real property which is owned by the individual and . used by the individual or the individual’s spouse or dependent, as a principal place of residence.The homestead exemption shall not be subject to execution, attachment, or sale under legal proceedings during the life of the individual. Upon the death of an individual who is head of a family, any such exemption shall inure to the benefit of the surviving spouse and their minor children for as long as the spouse or the minor children use such property as a principal place of residence. (b) If a marital relationship exists, a homestead exemption shall not be alienated or waived without the joint consent of the spouses. (f) Notwithstanding subsection (a) to the contrary, an individual who has one (1) or more minor children in the individual’s custody shall be entitled to a homestead exemption not exceeding twenty-five thousand dollars ($25,000) on real property that is owned by the individual and used by the individual as a principal place of residence. Tenn.Code Ann. § 26-2-301 (Supp.2011). Since they are married and have custody of one or more minor children, each of the Debtors is entitled to claim the enhanced $25,000.00 exemption resulting in a total homestead exemption of $50,000.00. In re Hogue, 286 S.W.3d 890, 897 (Tenn.2009). The Debtors filed their Motion to Avoid Judicial Lien pursuant to 11 U.S.C. § 522(f) which allows debtors to “avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is — (A) a judicial lien ... [.]” 11 U.S.C. § 522(f)(1)(A). Whether an exemption is impaired is calculated by the formula set forth in subsection (f)(2): (2)(A) for the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of— (i) the hen; (ii) all other liens on the property; and (in) the amount of the exemption that the debtor could claim if there were no liens on the property; 719exceeds the value that the debtor’s interest in the property would have in the absence of any liens. (B) In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph (A) with respect to other liens. (C) This paragraph shall not apply with respect to a judgment arising out of a mortgage foreclosure. 11 U.S.C. § 522(f)(2). This formula is “a relatively simple calculation of value minus the sum of other liens, the exemption, and the judicial lien to be avoided. In the event this formula produces a negative number, the judicial lien must be avoided in that amount since this is the extent to which the exemption is impaired.” In re Northern, 294 B.R. 821, 827 (Bankr.E.D.Tenn.2003) (quoting Sheth v. Affiliated Realty & Mgmt. Co. (In re Sheth), 225 B.R. 913, 916 (Bankr.N.D.Ill.1998)); see also Brinley v. LPP Mortg., Ltd. (In re Brinley), 403 F.3d 415, 421 (6th Cir.2005). In other words, the amount of a judicial lien exceeding the impairment is not avoided, as “partial lien avoidance is appropriate in these circumstances and ... full avoidance is inconsistent with the language and intent of the statute.” Tedesehi v. Falvo (In re Falvo), 227 B.R. 662, 666 (6th Cir. BAP 1998). As the party seeking to avoid the hen, the Debtors bear the burden of proof by a preponderance of the evidence. In re Loucks, 2012 WL 260383, at 1, 2012 Bankr.LEXIS 377, at 3 (Bankr.N.D.Ohio Jan. 27, 2012). The value of the real property in question “is critical to the calculation[.]” Loucks, 2012 WL 260383, at 1, 2012 Bankr.LEXIS 377, at 3. The Bankruptcy Code defines “value” as the “fair market value as of the date of the filing of the petition[,]” 11 U.S.C. § 522(a)(2) (2006); therefore, the petition date is “the operative date for all § 522(f) determinations, including determinations regarding the value of the debtor’s property and the value of the liens.” In re Hettinger, 463 B.R. 835, 837 (Bankr.W.D.Ky.2011). The parties stipulate that the value of the real property, without the improvements (Real Property), is $17,500.00, the value of the Residence is $95,800.00, and the value of the Farmhouse is $30,400.00.2 Jt. Stips. at ¶¶ 1-3. The Debtors contend that the value of the Tampico Church Road Property includes all improvements and their $50,000.00 homestead exemption applies to the Real Property as well as to all improvements, namely, the Residence and the Farmhouse. The Credit Union argues that because the homestead exemption applies only to the Real Property and Residence, its hen cannot be avoided and should remain as against the Farmhouse since it does not impair the homestead exemption. The Credit Union holds a judgment lien on the Tampico Church Road Property through Tennessee Code Annotated § 25-5-101 (b), which states that: (b)(1) Except as provided in subdivision (b)(2), judgments and decrees obtained from and after July 1, 1967, in any court of record and judgments in excess of five hundred dollars ($500) obtained from and after July 1, 1969, in any court of general sessions of this state shall be liens upon the debtor’s land from the time a certified copy of the judgment or decree shall be registered in the lien book in the register’s office of the county where the land is 720located. If such records are kept elsewhere, no lien shall take effect from the rendition of such judgments or decrees unless and until a certified copy of the same is registered as otherwise provided by law. Tenn.Code Ann. § 25 — 5—101(b)(1) (Supp. 2011); see also Tenn. R. Civ. P. 69.07(2) (“A judgment lien against the judgment debtor’s realty is created by registering a certified copy of the judgment in the register’s office of the county where the realty is located.”). A judgment lien “attaches to the judgment debtor’s real property from the time a certified copy of the judgment is recorded in the register’s office[,]” Ingle v. Head, 2007 WL 4530825, at 8, 2007 Tenn. App. LEXIS 801, at 23 (Tenn.Ct.App. Dec. 26, 2007), and is effective for a period of ten years from the date of final judgment. Tenn.Code Ann. § 25-5-105(a) (Supp.2011); see also Tenn. R. Crv. P. 69.07(2) (“Once a judgment lien is created by registration, it will last for the time remaining in a ten-year period from the date of final judgment entry in the court clerk’s office ... [.]”). Additionally, “[u]pon proper recordation, the judgment also becomes effective against any person having or later acquiring an interest in the debtor’s real property regardless of whether that person was a party to the action resulting in the judgment.” ATS, Inc. v. Kent, 27 S.W.3d 923, 924 (Tenn.Ct.App. 1998) (citing Tenn.Code Ann. § 25-5-101(c)). The record reflects that the Credit Union obtained a judgment against the Debtors in the amount of $5,379.90 in the Knox County General Sessions Court on February 9, 2005, which was recorded with the Grainger County Register of Deeds on March 1, 2005, thus constituting a judgment lien on any real property owned by the Debtors in Grainger County, Tennessee, on that date or later acquired prior to the lien’s expiration. Jt. Stips. at ¶ 5; EX. A; see also Northern, 294 B.R. at 825. The judgment lien, however, attaches to and encumbers only real property owned by the Debtors, including the improvements thereon. The fact that the parcel of real property comprising the Tampico Church Road Property includes more than one improvement is immaterial for the purposes of the judgment lien, which does not attach to the individual improvements themselves and cannot be divvied up as the Credit Union seeks to do. Real property is, by definition, “[l]and and anything growing on, attached to, or erected on it-” BlaoKS Law Dictionary 7th ed. (1999).3 In sum, the value of the Tampico Church Road Property is measured by the Real Property as improved by the Residence and Farmhouse. With respect to the Debtors’ claimed homestead exemption, they are “entitled to a [$50,000.00] homestead exemption upon real property which is owned by the individual and used by the individual or the individual’s spouse or dependent, as a principal place of residence.” Tenn.Code Ann. § 26-2-301(f). The Credit Union correctly states that debtors cannot claim a homestead exemption in real property that is not used as their principal place of residence. “The exemption is meant to protect the home of any person *721who owns one; the exemption is no longer an exemption for any real estate.” In re Wilson, 347 B.R. 880, 885 (Bankr. E.D.Tenn.2006) (quoting In re Sivley, 14 B.R. 905, 908 (Bankr.E.D.Tenn.1981)). Nevertheless, contrary to the Credit Union’s argument, the Tennessee homestead exemption applies as against real property owned by the Debtors, with the caveat that they use the real property as their principal place of residence, which this court has defined as “his or her home, the place where the debtor lives with his family, inclusive of any real property acquired therewith.” Wilson, 347 B.R. at 885-86. The homestead exemption, however, does not apply simply to a debtor’s principal place of residence itself; the “real property” is the necessary prerequisite, and any improvements on the real property upon which a debtor’s principal place of residence is located are included within the scope of the homestead exemption. Accordingly, the Debtors are entitled to claim their $50,000.00 homestead exemption in the Tampico Church Road Property as a whole, inclusive of the Real Property, the Residence, and the Farmhouse. Applying the formula set forth in § 522(f)(2)(A), the following amounts were stipulated by the parties: (i) Credit Union’s lien $ 9,054.70 (ii) all other liens on the property: (a) Bank of America mortgage $96,000.00 (iii) homestead exemption $50,000.00 Total of liens & exemption $155,054.70 Value of the Tampico Church Road Property $143,700.00 Extent of Impairment $ 11,354.70 Under this formula, the Debtors may avoid any judicial lien up to $11,354.70, which includes 100% of the Credit Union’s lien. See Northern, 294 B.R. at 830. An Order consistent with this Memorandum will be entered. . As acknowledged by the Credit Union in its brief and in the Joint Statement of Issues filed by the parties on February 24, 2012, the Debtors, in fact, only own a single parcel of real property. . The court has referred to the Real Property, Residence, and Farmhouse collectively as the "Tampico Church Road Property.” . This definition is adhered to in Tennessee Code Annotated § 26-2-301 which, as material to this contested matter, provides at subsection (f) that an individual falling within its provisions "shall be entitled to a homestead exemption ... on real property that is ... used by the individual as a principal place of residence.” (italics added). See also Tenn.Code Ann. § 67-5-501(9)(A) (2011) (" 'Real property’ includes lands, tenements, hereditaments, structures, improvements, ... and all rights thereto and interests therein, equitable as well as legal[.]”).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494697/	BAILEY, Bankruptcy Judge. Before this Panel are two appeals by Banco Bilbao Vizcaya Argentaría Puerto Rico (“BBVA”) from a total of three bankruptcy court orders. The appeals have been consolidated for briefing and oral argument. In the first, BAP No. PR 11-088, BBVA appeals from an order granting the motion of José Antonio Santiago Vázquez (the “Debtor”) for fees and costs (the “Fee Order”) and from a related order, set forth in the same document, denying BBVA’s motion for an extension of time to file a surreply to the fee motion (the “Surreply Order”). In the second, BAP No. PR 11-089, BBVA appeals from an order denying its motion to amend the Fee Order (the “Reconsideration Order”). For the reasons set forth below, the Panel concludes: (i) the appeal of the Surreply and Fee Orders is untimely and, therefore, must be DISMISSED; and (ii) that the bankruptcy court did not abuse its discretion in denying BBVA’s motion to amend and there754fore that the Reconsideration Order must be AFFIRMED. BACKGROUND On May 24, 2010, BBVA filed a complaint seeking a denial of the Debtor’s discharge (the “Complaint”) pursuant to § 727(a)(7)1 (authorizing denial of discharge where “the debtor has committed any act specified in paragraph (2), (3), (4), (5), or (6) of this subsection, on or within one year before the date of the filing of the petition, or during the case, in connection with another case, under this title or under the Bankruptcy Act, concerning an insider”). In the Complaint, BBVA explained that the Debtor is the former president and principal stockholder of J & B Enterprises Inc. (“J & B”), which operated a beauty spa. BBVA financed J & B’s acquisition of spa equipment via a loan of $345,080, secured by a lien on the equipment. J & B filed a petition for relief under chapter 7 of the Bankruptcy Code in 2005. The chapter 7 trustee in that case abandoned the spa equipment in 2006, and in that same year that case was closed. From 2005 through 2007, BBVA contended, it unsuccessfully attempted to recover the spa equipment. BBVA alleged that the Debtor, as an insider of J & B and with intent to hinder, delay, or defraud BBVA, transferred, removed, destroyed, mutilated or concealed the spa equipment after J & B filed for bankruptcy relief and thereby committed an act specified in § 727(a)(2) in the J & B case, warranting denial of his discharge in this, his own bankruptcy case. On January 4, 2011, the Debtor filed a motion to dismiss the Complaint (the “Dismissal Motion”) for failure to state a claim on which relief could be granted. He argued that the Complaint failed to state a claim on which relief could be granted because, on the facts alleged- — specifically, that the J & B trustee abandoned the J & B property in 2006, and that the J & B case was closed in 2006 — the Debtor cannot have committed an act specified in § 727(a)(2) in the J & B case on or within one year .before March 3, 2009, the date of the filing of the Debtor’s bankruptcy petition: at no time in the year before March 3, 2009, did the J & B property remain property of the J & B bankruptcy estate. At the conclusion of the Dismissal Motion, the Debtor requested that the Complaint be dismissed and that costs and attorney’s fees be imposed for bringing the Complaint against the Debtor. Initially, BBVA moved for a one-week extension of time to respond to the Dismissal Motion because it was exploring settlement. The court extended the response deadline as requested, but BBVA never filed a response. On March 7, 2011, the court entered a two-sentence order that granted the Dismissal Motion and ordered the Debtor’s attorney to “file a motion stating his attorney’s fees and costs.”2 In accordance with the court’s order, on March 24, 2011, the Debtor filed a motion for fees of $7,272.50 and costs of $18.88 (the “Fee Motion”). As justification for the award of fees and costs, the Debtor stated in the Fee Motion only that BBVA’s Complaint “was not substantially justified.” The Fee Motion did not specify a 755statutory or other legal basis for the requested award of fees. The Debtor further explained that the fees and costs he requested were reasonable, necessary, and actually incurred in defending the Complaint. The Debtor’s counsel attached detailed time entries to the Fee Motion. On April 26, 2011, BBVA filed an opposition to the Fee Motion in which it argued: (1) that, in the absence of bad' faith, statutory authorization, or contractual provision, attorney’s fees may not be awarded in an adversary proceeding; (2) that although it made a crucial mistake in understanding the relevant law, BBVA did not act in bad faith; and (3) that there exists no statutory or contractual basis for an award of fees. In its opposition, BBVA did not dispute the amount of the fees and costs that the Debtor had requested but, without an explanation as to why further time was required or warranted, asked the court to afford it more time to do so if the court concluded that an award of fees and costs was appropriate at all. The Debtor moved for leave to file a reply to BBVA’s opposition to the Fee Motion, and the court granted leave.3 In his reply, filed June 15, 2011, the Debtor explained that the Complaint had no basis in law, particularly given BBVA’s admissions in its opposition, and the Debtor alleged that, contrary to BBVA’s opposition, BBVA had made little attempt to settle the matter. The Debtor further asserted that there was ample authority for the court to impose sanctions; he cited Fed. R. Bankr.P. 9011, 28 U.S.C. § 1927, 11 U.S.C. § 105, and case law that he alleged stands for the proposition that federal courts have the inherent power to sanction misconduct. On June 22, 2011, BBVA filed a motion to extend the time to file a surreply to July 15, 2011.4 BBVA alleged that the Debtor’s reply contained false factual contentions and that its surreply would respond to these and to the “legal arguments in reference to Rule 11.” On July 1, 2011, before BBVA filed a surreply, the bankruptcy court entered, in a single document, orders that denied BBVA’s motion for extension of time to file a surreply and granted the Fee Motion. The court did not at this time issue findings and rulings or any explanation of its reasons for these orders. On July 14, 2011, BBVA moved under Fed. R. Bankr.P. 7052 for issuance of findings of fact and conclusions of law with respect to the Surreply and Fee Orders (the “Rule 7052 Motion”).5 On August 31, 2011, the court issued a document entitled Opinion and Order (the “Opinion and Order”) in which it provided the requested findings and conclusions and amended the Fee Order in two respects: first, by specifying that the fees and costs were being 756assessed against both the plaintiff and its counsel,6 and second, by setting a 20-day deadline for payment of the fees and costs. In the Opinion, the court set forth the procedural background, including the numerous extensions that BBVA had obtained during the course of the adversary proceeding. The court cited various authorities — Fed. R. Bankr.P. 7054(b), Fed. R. Bankr.P. 9011, 11 U.S.C. § 105, 28 U.S.C. § 1927, and applicable case law — as authorizing the imposition of fees and costs and held that it had “the inherent power to regulate litigants’ behavior and to sanction a litigant for bad-faith conduct.” The court further wrote: Relying upon its inherent authority to impose sanctions and in the exercise of its discretion, this court finds that the proper sanction that should be imposed as the minimum necessary to deter future litigation abuse is the reimbursement of the Defendants’ reasonable legal expenses generated in defending this groundless action. The imposition of sanctions in the amount of the Defendants’ reasonable attorney’s fees is necessary to deter future unnecessary litigation and to educate the Plaintiff and her attorney. In re Allnutt, 220 B.R. 871 ([Bankr.D.Md.1998]). This Court construed Plaintiffs questionable legal and factual grounds to commence this proceeding and its refusal to reply to Defendant’s motion to dismiss as the latent manner in which it unreasonably and vexatiously multiplied the proceedings. Hence, Plaintiff and/or his attorney is required to satisfy the reasonable attorneys’ fees and costs incurred because of such conduct in the amount of $7,291.38 within twenty (20) days. On September 14, 2011, BBVA then filed a motion to amend the judgment (the “Motion to Amend Judgment”). The Debtor filed an opposition to the Motion to Amend Judgment, and BBVA filed a surreply.7 On November 4, 2011, the bankruptcy court issued a document, also entitled Opinion and Order (the “Reconsideration Order”), in which it denied the Motion to Amend Judgment and set forth its reasons for doing so. The bankruptcy court explained that in the Motion to Amend Judgment, BBVA had requested simply that it be permitted to satisfy the award for fees and costs by setoff against the balance of Debtor’s mortgage debt to BBVA. The court further explained that it was only in its surreply that BBVA further requested “that the Court correct alleged manifest 757errors of law and fact under [Fed.R.Civ.PJ 59(e) or [Fed.R.Civ.P. 60(b) ].” Ultimately, the court construed the motion to amend as one under Fed.R.Civ.P. 59(e) (made applicable by Fed. R. Bankr.P. 9023), which, it explained, requires a showing of manifest error of law and fact, newly discovered evidence, manifest injustice, or an intervening change in controlling law. The bankruptcy court also explained that a motion under Fed.R.Civ.P. 59(e) cannot be used to introduce arguments that could and should have been presented earlier. The court observed that in the surreply, BBVA had argued that the court had erred by entering sanctions for bad faith without clear evidence that the claims were without merit and had been brought in bad faith. In support, BBVA had cited In re Green, 422 B.R. 469 (Bankr. S.D.N.Y.2010) (sanctioning chapter 13 lawyer who failed to disclose pre-petition judgment resulting in unnecessary stay motion). The bankruptcy court rejected this argument for reconsideration on the basis that BBVA could have made this argument in its opposition to the Fee Motion but had failed to do so. The court further stated that BBVA had failed to establish a manifest error of law and that it was “unnecessary to re-enter a discussion of the arguments advanced by [BBVA] that were already rejected in the analysis that resulted in the order awarding attorney’s fees and costs.” For these reasons, the court denied the Motion to Amend Judgment. On November 18, 2011, BBVA filed two Notices of Appeal. By the first, BAP No. PR 11-088, BBVA appeals from the Surre-ply and Fee Orders. By the second, BAP No. PR 11-089, BBVA appeals from the Reconsideration Order. BBVA identified three issues on appeal: 1.Whether the bankruptcy court’s denial of BBVA’s request to allow a surre-ply induced it to commit manifest errors of law, or to abuse its discretion, by imposing sanctions on BBVA and its attorney. 2. Whether the bankruptcy court had clear evidence to justify the imposition of sanctions. 3. Whether the Surreply Order denied the bankruptcy court the opportunity to rule correctly on a motion to reconsider or set aside its Opinion and Order imposing, sanctions on BBVA and its attorney. JURISDICTION The bankruptcy appellate panel has jurisdiction to hear appeals from “final judgments, orders, and decrees” pursuant to 28 U.S.C. § 158(a)(1) or, , “with leave of the court, from interlocutory orders and decrees” pursuant to 28 U.S.C. § 158(a)(3). Fleet Data Processing Corp. v. Branch (In re Bank of New England Corp.), 218 B.R. 643, 645 (1st Cir. BAP 1998). The Panel must satisfy itself that the orders on appeal are final or otherwise appealable and that the appeals from those orders were timely taken. When it ruled on the Dismissal Motion, the bankruptcy court ordered the Debtor to file a motion for fees and costs. Therefore, that order was not final. By the subsequent Fee Order, the court granted the motion for fees and costs, leaving nothing remaining to resolve the adversary proceeding. Although the court did not issue a judgment, the Fee Order was a final order because it was clear at that point that all matters in the adversary proceeding were resolved and that the court was not going to take any further steps. Likewise, at that point, the Surre-ply Order became final. BBVA then timely filed its Rule 7052 Motion, a motion for issuance of findings 758and conclusions under Fed.R.Civ.P. 52(b), which tolled the deadline for appealing the Surreply and Fee Orders. See Fed. R. Bankr.P. 8002(b)(1). Approximately thirty days after the issuance of the Surreply and Fee Orders, the court issued its Opinion and Order, disposing of the Rule 7052 Motion. BBVA did not then file an appeal of the Surreply and Fee Orders. Rather, within 14 days of the court’s issuance of the Opinion and Order, BBVA filed its Motion to Amend Judgment. Only after disposition of that motion did BBVA file the Notices of Appeal. “An order denying reconsideration is final if the underlying order is final and together the orders end the litigation on the merits.” Morse v. Earle (In re Earle), No. RI 08-014, 2008 WL 8664763, at 4 (1st Cir. BAP Nov. 18, 2008). The underlying order, the Opinion and Order, was a final order as it was a ruling on a postjudgment motion and served to end the litigation on the merits. Therefore, the Reconsideration Order, too, was a final order. BBVA filed the Notice of Appeal as to the Reconsideration Order within 14 days after the court issued that order. We are therefore satisfied that the appeal from the Reconsideration Order is a timely appeal from a final order and, accordingly, within our jurisdiction. Our jurisdiction over the appeal of the Surreply and Fee Orders, however, is more complicated. It is well settled that the time limits established for filing a notice of appeal are “mandatory and jurisdictional.” Yamaha Motor Corp. v. Perry Hollow Mgmt. Co., Inc. (In re Perry Hollow Mgmt. Co., Inc.), 297 F.3d 34, 38 (1st Cir.2002) (citations omitted); Balzotti v. RAD Invs., LLC (In re Shepherds Hill Dev. Co., LLC), 316 B.R. 406, 414 (1st Cir. BAP 2004). If a notice of appeal is not timely filed, the Panel does not have jurisdiction over the appeal, and the appeal will fail. See Ahhoud v. The Ground Round, Inc. (The Ground Round, Inc.), 335 B.R. 253, 258 (1st Cir. BAP 2005), affd, 482 F.3d 15 (1st Cir.2007); In re Shepherds Hill, 316 B.R. at 414. Pursuant to Fed. R. Bankr.P. 8001(a) and 8002(a), an appellant must file an appeal within 14 days after the entry of the judgment, order, or decree of the bankruptcy court. Under Bankruptcy Rule 8002(b), however, certain motions will toll the appeal period if timely filed. See Fed. R. Bankr.P. 8002(b).8 To be timely, a motion for reconsideration under Fed. R. Civ. P. 59, as made applicable by Fed. R. Bankr.P. 9023, or a motion for amended or additional findings of fact under Fed. R. Civ. P. 52(b), as made applicable by Fed. R. Bankr.P. 7052, must be filed “no later than 14 days after entry of judgment.” See Fed. R. Bankr.P. 9023 and 7052. In its Notice of Appeal, BBVA contends that the appeal is timely because the deadline to appeal was tolled first by the Rule 7052 Motion and then by the Motion to Amend Judgment. The Panel and the First Circuit have held, however, that where there are successive postjudgment 759motions, only the first such motion tolls the time period for filing a notice of appeal with respect to the underlying judgment. See Colombo, v. Solomon (In re Colombo), 257 B.R. 368, 370 (1st Cir. BAP 2001) (quoting Aybar v. Crispin-Reyes, 118 F.3d 10 (1st Cir.1997)). In Aybar, the appellants timely filed a motion for reconsideration after the judgment issued, and, after the court issued a ruling on reconsideration, they filed a further motion under Fed.R.Civ.P. 52(b) and 59(e) to reconsider and amend. 118 F.3d at 13. Only after the court issued the order on this second postjudgment motion did the appellants file a notice of appeal. Id. The First Circuit ruled that the notice of appeal applied to the order disposing of the second postjudgment motion but did not include an appeal of the underlying judgment. Although the first post-judgment motion tolled the appeal period for the judgment, “a subsequent motion for reconsideration served within ten days of the order denying the initial motion for reconsideration but more than ten days after the entry of the original judgment does not toll ‘the time for appealing from that judgment.’ ” Id. (citing Acevedo-Villa-lobos v. Hernandez, 22 F.3d 384, 389 (1st Cir.1994)). In this case, BBVA timely filed the Rule 7052 Motion, and the bankruptcy court disposed of that motion with its Opinion and Order on August 31, 2011. As a result, the deadline for BBVA to file a notice of appeal of the Surreply and Fee Orders would have been September 14, 2011. Instead, BBVA filed its notice of appeal on November 18 — two months later. Under Aybar and Colombo, BBVA’s appeal of the Surreply and Fee Orders is untimely, and the Panel lacks jurisdiction to consider the appeal.9 Accordingly, we will dismiss BAP No. PR 11-088 and proceed to consider only the appeal of the Reconsideration Order. STANDARD OF REVIEW Appellate courts reviewing decisions of the bankruptcy court generally apply de novo review to conclusions of law and the “clearly erroneous” standard to findings of fact. See Aja v. Emigrant Funding Corp. (In re Aja), 442 B.R. 857, 860 (1st Cir. BAP 2011). The Panel reviews a “court’s denial of a motion for reconsideration for abuse of discretion.... Abuse occurs when a material factor deserving significant weight is ignored, when an improper factor is relied upon, or when all proper and no improper factors are assessed, but the court makes a serious mistake in weighing them.” In re Earle, 2008 WL 8664763, at 4. DISCUSSION In the Motion to Amend Judgment, BBVA requested amendment of the Fee Order in two respects: first, an amendment permitting BBVA to satisfy the order by setoff instead of by actual payment, and second, (and more fundamentally) reconsideration of the Fee Order itself. The Reconsideration Order denied both. In its appeal from the Reconsideration Order, BBVA does not challenge the denial of leave to satisfy the Fee Order by setoff.10 Rather, BBVA challenges the Reconsider760ation Order only insofar as it denied reconsideration of the Fee Order itself. The First Circuit has explained that a motion for reconsideration brought under Fed.R.Civ.P. 59(e) must be based upon newly discovered evidence or a manifest error of law or fact. Aybar v. Cris-pin-Reyes, 118 F.3d at 16. “The rule does not provide a vehicle for a party to undo its own procedural failures, and it certainly does not allow a party to introduce new evidence or advance arguments that could and should have been presented to the district court prior to the judgment.” Id. (citing Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th Cir.1996)). In the Reconsideration Order, the bankruptcy court explained that BBVA had moved to amend the Fee Order on the basis that it was an error of law to impose sanctions without having found clear evidence that the Complaint was without merit and was filed in bad faith, meaning with some improper purpose, such as harassment or delay. The bankruptcy court denied reconsideration because BBVA could have presented this argument in its opposition to the Fee Motion. On appeal, BBVA contends that it was error for the bankruptcy court to deny reconsideration because the bankruptcy court did not have the benefit of the surre-ply brief that BBVA had hoped to file in response to the Fee Motion. BBVA contends that it was only in the Debtor’s response to BBVA’s objection to the Fee Motion that BBVA was first presented with the grounds under which the Debtor was seeking sanctions, and then BBVA was denied an extension of time to file a surreply to the Debtor’s response. Therefore, BBVA argues, it was only in the Motion to Amend Judgment that it was first able to raise the factual and legal arguments that it advanced in support of that motion. In response to these arguments, the Debtor counters that BBVA failed to establish a manifest error of law that could have entitled it to reconsideration. Upon review of the record below, we conclude that the bankruptcy judge was correct in ruling that BBVA could have raised its arguments as to clear evidence of bad faith prior to entry of the Fee Order. The Debtor first requested fees in the Dismissal Motion, and BBVA declined the initial opportunity to respond when it failed to file an objection to that motion.11 Nonetheless, BBVA did take advantage of a second opportunity to interpose its arguments when it filed an opposition to the Fee Motion. In that opposition, it argued that the court could impose fees and costs only upon a showing of bad faith and that BBVA had not acted in bad faith. Although BBVA did not fine tune that argument by asserting that the court was required to find clear evidence of bad faith, or by defining the specific requirements of bad faith, it did raise the issue of bad faith. It thus appears that, notwithstanding the court’s denial of leave to file a surreply, BBVA had two previous opportunities to raise the arguments that it sought to make for the first time in the Motion to Amend Judgment. Moreover, BBVA took advantage of one of those opportunities by actually arguing that bad faith was required and lacking. The bankruptcy court’s deni761al of BBVA’s request to extend the deadline to file a surreply brief was not an impediment to BBVA’s raising the issues advanced for the first time on reconsideration. Therefore, in denying reconsideration, the bankruptcy court correctly applied the foregoing First Circuit precedent against a second bite at the apple: litigants may not use Fed.R.Civ.P. 59(e) to advance arguments they could have made earlier. The bankruptcy court did not abuse its discretion in denying to BBVA yet another opportunity to be heard. CONCLUSION For the reasons set forth above, the Panel DISMISSES the appeal from the Fee and Surreply Orders in BAP No. PR 11-088 as untimely and, in BAP No. PR 11-089, AFFIRMS the Reconsideration Order. . Unless expressly stated otherwise, all references to "Bankruptcy Code” or to specific statutory sections shall be to the Bankruptcy Reform Act of 1978, as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA”), Pub.L. No. 109-8, 119 Stat. 23, 11 U.S.C. §§ 101, et seq. . BBVA has not appealed from the order dismissing the Complaint and does not challenge its propriety. .At oral argument, the parties explained that because the Puerto Rico Local Bankruptcy Rules do not have a rule addressing replies to objections, the U.S. Bankruptcy Court for the District of Puerto Rico applies the local rules of the U.S. District Court for the District of Puerto Rico ("District Rules"). See Puerto Rico Local Bankruptcy Rule 1001-1 (b). Local Rule 7(c) of the District Rules provides that "[w]ith prior leave of Court and within seven (7) days of the service of any objection to a motion, the moving party may file a reply memorandum, which shall not exceed ten (10) pages in length and which shall be strictly confined to replying to new matters raised in the objection or opposing memorandum.” . By the extension motion, BBVA sought only an extension of the deadline to reply to the Debtor's response. BBVA did not request authority to file a reply pursuant to Local Rule 7(c) with extended deadline. See footnote 3, infra. . In relevant part, Fed. R. Bankr.P. 7052 states that Fed.R.Civ.P. 52 applies in adversary proceedings. . The Debtor’s request for fees and costs did not specify against whom the award should be made: BBVA, its counsel, or both. Nor had the Fee Order specified against whom fees and costs were thereby being assessed. . BBVA did not designate the Motion to Amend Judgment, the Debtor’s opposition, and BBVA’s surreply as part of its record on appeal and did not include them in its appendix. Rather, BBVA wrote in its brief that the Motion to Amend Judgment is not part of the appendix "because its content is largely exposed below.” Although the Debtor attached a supplementary appendix to his brief that included the Motion to Amend Judgment, the opposition, and the surreply, the supplementary appendix is not an excerpt of the previously designated record, and we must therefore disregard the same. See Fed. R. Bankr.P. 8009(b) (appendix consists of excerpts of the record), see also Perri.no v. BAC Home Loans Servicing, LP (In re Trask), 462 B.R. 268, 276-77 (1st Cir. BAP 2011); Kyle v. Dye (In re Kyle), 317 B.R. 390, 394 (9th Cir. BAP 2004) (“an appellee is permitted to file an appendix containing excerpts of the record”), aff d, 170 Fed.Appx. 457 (9th Cir.2006). Although the Motion to Amend Judgment, the opposition, and the surreply are not part of the record on appeal, their essential features were described by the bankruptcy court in the Reconsideration Order, and therefore our ability to effectively review that order is unimpaired. . Fed. R. Bankr.P. 8002(b) provides, in pertinent part: If any party makes a timely motion of a type specified immediately below, the time for appeal for all parties runs from the entry of the order disposing of the last such motion outstanding. This provision applies to a timely motion: (1) to amend or make additional findings of fact under Rule 7052, whether or not granting the motion would alter the judgment; (2) to alter or amend the judgment under Rule 9023 ... or (4) for relief under Rule 9024 if the motion is filed no later than 14 days after the entry of judgment. Fed. R. Bankr.P. 8002(b). . "Federal courts recognize an exception to the general rule if a grant of the earlier post-trial motion effectively results in a new judgment and the motion to reconsider is filed by the adversely affected party requesting reinstatement of the original judgment.” Larson v. Larson, 653 N.W.2d 869, 873 (N.D.2002). That exception does not apply here. . BBVA’s Brief on Appeal at 14 ("The bank is not appealing the court decision to not allow the set off[.j”). . BBVA stated in a number of places, both on appeal and below, that when he ordered the Debtor to file a fee application, the bankruptcy judge was raising the fee issue sua sponte. This plainly is incorrect. In the Motion to Dismiss, the Debtor had requested that fees and costs be imposed for BBVA's bringing the Complaint against the Debtor. The court’s directive to the Debtor to "file a motion stating his attorney's fees and costs" followed upon this request.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494698/	MEMORANDUM OF DECISION WILLIAM C. HILLMAN, Bankruptcy Judge. I. INTRODUCTION The matters before the Court are the “Motion To Avoid Judicial Lien Pursuant to 11 U.S.C. § 522(f)(1)(A) and MLBR 4003-l(a)” (the “Motion to Avoid Writ of Attachment”), the “Motion to Avoid Judicial Lien Execution Pursuant to 11 U.S.C. § 522(f)(1)(A) and MLBR 4003-l(a)” (the “Motion to Avoid Execution”, collectively, the “Motions to Avoid Judicial Liens”) filed by the debtor, Charles F. Andris (the “Debtor”), “Edward L. Kilwein [sic] Jr.’s Objection to Motion to Avoid Judicial Lien” (the “Objection to Motion to Avoid Writ of Attachment”), and “Edward L. Kilwein [sic] Jr.’s Objection to Motion to Avoid Judicial Lien Execution” (the “Objection to Motion to Avoid Execution,” collectively, the “Objections”) filed by creditor Edward L. Kilwien, Jr. (“Kilwien”). Through his motions, the Debtor seeks to avoid two judicial liens held by Kilwien to the extent that they impair his homestead exemption. Kilwien objects, contending that the Debtor’s homestead exemption is invalid. For the reasons set forth below, I will overrule the Objections and grant the Motions to Avoid Judicial Liens. II. BACKGROUND The facts necessary to decide this matter are undisputed. The Debtor and Patricia Winters-Andris (‘Winters-Andris”) married on November 14, 1987. On November 15, 1996, they acquired, and now jointly own, real property located at 79 763Trotters Lane in Marston Mills, Massachusetts (the “Property”)- On December 10, 1996, the Debtor recorded a declaration of homestead pursuant to Mass. Gen. Laws ch. 188, § 1 (the “Homestead Statute”) with respect to the Property (the “1996 Declaration”). In January 2003, the Debtor and Winters-Andris separated, but did not divorce. The Debtor has not lived at the Property since the separation, but Winters-Andris and the couple’s youngest daughter have continued to live at the Property without interruption. Nevertheless, the Debtor asserts that he has kept a significant connection to the Property by virtue of his daughter living there and his performance of various maintenance and repair jobs. Since the Debtor and Winter-Andris parted ways, the Property has become subject to several encumbrances. First, on January 10, 2007, PHH Mortgage Service recorded a mortgage securing an obligation in the amount of $122,609. Second, on January 23, 2007, the Barnstable Superior Court issued a writ of attachment on the Property in the amount of $70,000 in favor of Kilwien, which he recorded the same day. Third, Kilwien also obtained an execution in the amount of $156,659.37 from the Barnstable Superior Court on October 2, 2008, which he later recorded on October 15, 2008. Winters-Andris recorded two subsequent declarations of homestead under the same section of the Homestead Statute with respect to the Property on January 10, 2003 (the “2003 Declaration”) and February 2, 2007 (the “2007 Declaration”). Then, on February 11, 2011, the Debtor recorded a fourth declaration of homestead pursuant to Mass. Gen. Laws ch. 188, § 1 with respect to the Property (the “2011 Declaration”). Although he did not occupy the Property at the time of the 2011 Declaration, the Debtor states that he intended the Property to be the primary residence of Winters-Andris and his daughter, while also believing that there was “a possibility of reconciliation with his wife and [of] moving back” to the Property.1 Kilwien disputes that the Debtor has any real intent to reconcile with his wife and return to the Property, asserting that he has lived with another woman since 2006 and has discussed the possibility of marriage with her.2 The Debtor filed a voluntary Chapter 7 petition on February 16, 2011.3 On the Petition, he listed his street address as 60 Stoney Point Road, Cummaquid, Massachusetts and his mailing address as P.O. Box 145, Cummaquid, Massachusetts. Further, on the Statement of Financial Affairs filed by the Debtor on March 3, 2011, the Debtor indicated that he had not lived at any other address during the prior three years. Schedule A — Real Property (“Schedule A”), reflected that the only real property owned by the Debtor was the Property, for which he valued his interest at $137,500, and disclosed encumbrances in the amount of $279,268.37. On Schedule 764C — Property Claimed as Exempt (“Schedule C”), the Debtor claimed an exemption claimed in the Property pursuant to Mass. Gen. Laws ch. 188, § 1, but listed the value of the exemption as $0 (the “Exemption”). On Schedule D — Creditors Holding Secured Claims (“Schedule D”), he listed two secured creditors: PHH Mortgage Service, as the holder of a mortgage on the Property in the amount of $122,609, and Kilwien, as the holder of a judicial lien in the amount of $156,659.37. Kilwien’s attachment was not reflected anywhere in the Debtor’s schedules. On June 1, 2011, the Property was appraised with a value of $268,000. On September 13, 2011, the Debtor then filed a Motion to Amend Schedules A, C, D and F to reflect the appraised value of the Property. On Amended Schedule A, he listed his interest in the Property as $134,000, or one-half of the $268,000 value, and reduced the secured liens against the property to $122,609. On amended Schedule C, the Debtor increased the amount of the Exemption from $0 to $145,391. Consistent with his change to Schedule A, he then removed Kilwien as a secured creditor from Amended Schedule D, and added him to Amended Schedule F — Creditors Holding Unsecured Nonpriority Claims (“Schedule F”) as an unsecured creditor with one claim in the amount of $70,000 and another in the amount of $156,659.37. On November 8, 2011, the Debtor filed the Motions to Avoid Judicial Liens, seeking to avoid both the attachment and execution to the extent that they impaired the Exemption. Kilwien filed the Objections on November 29, 2011, contesting the validity of the Exemption.4 I held a hearing on December 2, 2011, at which time I took the matter under advisement and ordered the parties to file supporting briefs. III. POSITIONS OF THE PARTIES The Debtor The Debtor begins by noting that the Homestead Statute is to be construed liberally and is designed to protect a family’s home from creditors. While he concedes that he did not live at the Property when he recorded the 2011 Declaration, he maintains that he intended to live there in the future and would have but for his separation from his wife. The Debtor further contends that he has complied with the Homestead Statute because he and Winters-Andris remain married and are therefore members of the same family, his wife and child’s occupancy of the Property has been continuous, and his connections to the Property are significant. In support, he cites In re Tofani,5 a case where Judge Somma found that a debtor satisfied the “intent to occupy requirement” of the Homestead Statute by virtue of his strong and continuing connection to the residence. Alternatively, the Debtor argues that if the 2011 Declaration is invalid, he may nonetheless rely on the 2007 Declaration, which he asserts would not have been terminated by the subsequent invalid declaration. Kilwien Kilwien argues that the Motions to Avoid Judicial Liens should be denied because the Debtor is not entitled to the Exemption in the Property in light of his failure to occupy or intend to occupy the Property at the time of the 2011 Declaration. In support, Kilwien states that the Debtor has not lived at the Property for eight years and has no intent to return based upon the fact that he is living with 765another women, with whom he has considered marriage. Moreover, relying on In re Gunnison,6 he asserts that neither the 2003 Declaration nor the 2007 Declaration were effective to terminate the homestead created by the 1996 Declaration because one spouse cannot unilaterally terminate a prior homestead recorded by the other spouse. In the event that I disagree, Kil-wien argues that the 2011 Declaration, which he maintains is invalid, was nonetheless sufficient to terminate the estate created by either the 2007 Declaration or 1996 Declaration. IV. DISCUSSION Section 522(f) of the Bankruptcy Code provides that a debtor may avoid the fixing of a judicial lien “on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled....”7 Pursuant to Fed. R. Bankr.P. 4003(d), “a creditor may object to a motion filed under § 522(f) by challenging the validity of the exemption asserted to be impaired by the hen.”8 This is precisely the procedural posture adopted by Kilwien and therefore, he has the initial burden of proving the Exemption is not properly claimed.9 Under 11 U.S.C. § 522(b), “an individual debtor may exempt from property of the estate the property listed in ... paragraph (3) of this subsection,” which allows a debtor to claim the exemptions provided for under applicable state law.10 In Massachusetts, the Homestead Statute as in effect on the petition date provides that “[a]n estate of homestead to the extent of $500,000 in the land and buildings may be acquired pursuant to this chapter by an owner or owners of a home ... who occupy or intend to occupy said home as a principal residence.”11 To reiterate, the statutory requirement is that the declar-ant, at the time the declaration is recorded, “occupy or intend to occupy” the principal residence.12 Moreover, pursuant to Mass. Gen. Laws ch. 188, § 1, “only one owner may acquire an estate of homestead in any such home for the benefit of his family.”13 “For the purposes of [the Homestead Statute], the word “family” shall include ... a husband and wife and their children ....”14 It is well-established in this district that separated spouses who have not yet divorced are still a family.15 Courts in this district have uniformly recognized that the Homestead Statute 766provides that an estate of homestead can be terminated one of three ways.16 Mass. Gen. Laws ch. 188, § 7 provides that: An estate of homestead created under section two may be terminated during the lifetime of the owner by either of the following methods: — (1) a deed conveying the property in which an estate of homestead exists, signed by the owner and the owner’s spouse, if any, which does not specifically reserve said estate of homestead; or by (2) a release of the estate of homestead, duly signed, sealed and acknowledged by the owner and the owner’s spouse, if any, and recorded in the registry of deeds for the county or district in which the property is located.17 Additionally, under Mass. Gen. Laws ch. 188, § 2, “[t]he acquisition of a new estate or claim of homestead shall defeat and discharge any such previous estate.”18 This, however, does not end the inquiry into whether an estate of homestead is effectively terminated. In Dwyer v. Cempellin,19 the Massachusetts Supreme Judicial Court held that once an owner records a valid declaration on a home, “any subsequent recording [on the same home] would be entirely ineffective without a release of the first.”20 Nevertheless, sequential declarations of homestead on the same property by the same declarant will terminate the prior estate of homestead.21 With this backdrop in place, I conclude that the Objections are ill taken, but that it is ultimately unnecessary to determine which declaration forms the basis of the Exemption. To start, I concur with Kilwien that the 2003 Declaration and the 2007 Declaration recorded solely by Winters-Andris were not effective to discharge the homestead created by the 1996 Declaration recorded solely by the Debtor, under the rule set forth in Dwyer v. Cem-pellin. This, however, is where I part company with his argument. Assuming, arguendo, that the 2011 Declaration is valid, it discharged the estate created by the 1996 Declaration, properly forming the basis for the Exemption and I need go no further. If, however, Kilwien is correct and the Debtor lacked the requisite intent to occupy the Property at the time he recorded the 2011 Declaration, a finding that would certainly require a trial and submission of evidence, then the 2011 Declaration would be invalid and, by definition, could not have created a new claim of homestead to discharge the prior one created by the 1996 Declaration. In effect, Kilwien seeks to have his cake and eat it too by asserting that the recor-dation of the 2011 Declaration, even if invalid, must have terminated any prior 767estate. I find such an argument at odds with both the statutory text which speaks of “[t]he acquisition of a new estate or claim of homestead,”22 and the Supreme Judicial Court’s directive that the exemption laws “should be liberally construed to comport with their beneficent spirit of protecting the family home,”23 and predict that the Supreme Judicial Court would reject it.24 Therefore, the Exemption is properly supported and it is unnecessary to determine whether the 1996 Declaration or the 2011 Declaration forms its basis. Turning now to the question of lien avoidance, 11 U.S.C. § 522(f)(2)(A) provides the following formula to determine whether a debtor’s exemption is impaired: For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of— (i) the lien; (ii) all other liens on the property; and (iii) the amount of the exemption that the debtor could claim if there were no liens on the property; exceeds the value that the debtor’s interest in the property would have in the absence of any liens.25 In the Motion to Avoid Writ of Attachment, the Debtor applied the formula as follows: Therefore, with respect to the subject lien of Edward L. Kilwien, Jr. totaling $70,000, the formula under 11 U.S.C. § 522(f)(2)(A) provides: A lien should be considered to impair an exemption to the extent that the sum of: (i) The subject lien ($70,000.00); (ii) All other secured liens on the property ($122,609.00);26 (iii) The amount that the debtor could claim if there were no liens on the property ($145,391.00) using the Massachusetts exemptions from Schedule C27 [e]xceeds the value of the Debtor’s property ($268,000.00). The total of the aforementioned liens ($338,000.00) exceeds the value of the Debtor’s property ($268,000) by $70,000.00.28 768Similarly, the Debtor applied the formula to avoid Kilwien’s execution, stating: Therefore, with respect to the subject lien Execution of Edward L. Kilwien, Jr. totaling $156,659.87, the formula under 11 U.S.C. § 522(f)(2)(A) provides: A lien should be considered to impair an exemption to the extent that the sum of: (i) The subject hen ($156,659.37); (ii) All other secured liens on the property ($122,609.00); (ni) The amount that the debtor could claim if there were no liens on the property ($145,391.00) using the Massachusetts exemptions from Schedule C [e]xceeds the value of the Debtor’s property ($268,000.00). The total of the aforementioned liens ($424,659.37) exceeds the value of the Debtor’s property ($268,000.00) by $156,659.37.29 Based upon these calculations, which I note that Kilwien has not contested, both the attachment and the execution are fully avoidable. Y. CONCLUSION In light of the foregoing, I will enter an order overruling the Objections and granting the Motions to Avoid Judicial Liens. . Debtor Charles Andris’ Brief in Support of a Valid Homestead Exemption, Docket No. 78 atffll 11, 13. . Memorandum in Support of Edward L. Kil-wien Jr.'s Objection to Motion to Avoid Judicial Lien Execution (Docket No. 53) and Motion to Avoid Judicial Lien (Docket No. 52), Docket No. 79 at ¶¶ 18-19. . The Massachusetts Homestead Statute was substantially revised in 2010, and the new version came into effect on March 16, 2011. Because the Debtor filed his petition prior to the effective date and rights to exemptions are fixed as of the date of the petition, see 11 U.S.C. § 522(b)(3)(A), the revised statute does not apply to this case. Therefore, all references to Mass. Gen. Laws ch. 188, § 1 et seq. shall refer to the version that was in effect on February 16, 2011. . Kilwien does not advance any other argument in opposition to the Motions to Avoid Judicial Liens. . In re Tofani, 365 B.R. 338 (Bankr.D.Mass. 2007). . In re Gunnison, 397 B.R. 186 (Bankr. D.Mass.2008). . 11 U.S.C. § 522(f)(1). . Fed. R. Bankr.P. 4003(d). . Fed. R. Bankr.P. 4003(c) (“The objecting party has the burden of proving that the exemptions are not properly claimed.”). . 11 U.S.C. § 522(b)(1), (3)(A). . Mass. Gen. Laws ch. 188, § 1. . In re Gender, 426 B.R. 407, 417-418 (Bankr.D.Mass.2010); In re Tofani, 365 B.R. at 345; In re Roberts, 280 B.R. 540, 547 (Bankr.D.Mass.2001). . Mass. Gen. Laws ch. 188, § 1. . Id. . See In re Gunnison, 397 B.R. at 190 ("While the Debtors may be separated in fact, they remain legally married and thus are a single 'family' for purposes of the Homestead Statute.”); In re Taylor, 280 B.R. 294, 298 (Bankr.D.Mass.2002) (finding separated spouses still legally married to be in the same “family” for purposes of Mass. Gen. Laws ch. 188, § 1.); see also In re Cassese, 286 B.R. 472, 475 (Bankr.D.Mass.2002) (finding that upon divorce, former spouses were no longer *766in the same "family” for purposes of Mass. Gen. Laws ch. 188, § 1). . In re Leigh, 307 B.R. 324, 329-330 (Bankr. D.Mass.2004); In re Taylor, 280 B.R. at 297; In re Webber, 278 B.R. 294, 298 n. 4 (Bankr. D.Mass.2002); In re Garran, 274 B.R. 570, 574 (Bankr.D.Mass.2002). . Mass. Gen. Laws ch. 188, § 7. . Mass. Gen. Laws ch. 188, § 2. . Dwyer v. Cempellin, 424 Mass. 26, 673 N.E.2d 863 (1996). . Id. at 30, 673 N.E.2d 863. See In re Gun-nison, 397 B.R. at 191; In re Sebio, 237 B.R. 1, 3 (Bankr.D.Mass.1999); but see Garran v. SMS Financial V, LLC (In re Garran), 338 F.3d 1 (1st Cir.2003) (holding that a Chapter 7 debtor’s homestead under Mass. Gen. Laws ch. 188, § 1A was terminated by his non-debtor spouse's subsequent declaration of a homestead under Mass. Gen. Laws ch. 188, § 1 because it created a new claim of homestead). . In re Leigh, 307 B.R. at 330; see In re Gunnison, 397 B.R. at 191. . Mass. Gen. Laws ch. 188, § 2. . Dwyer v. Cempellin, 424 Mass, at 29-30, 673 N.E.2d 863. . See In re Miller, 113 B.R. 98, 101 (Bankr. D.Mass.1990); see also In re Garran, 338 F.3d at 6 (recognizing that where Massachusetts courts have not yet addressed an issue, the court must predict how the Massachusetts Supreme Judicial Court would interpret the statute); Caron v. Farmington Nat'l Bank (In re Caron), 82 F.3d 7, 9 (1st Cir.1996) (holding that a federal court must decide an issue regarding the interpretation of a state law according to its anticipation of how the highest state court would hold); Hildebrandt v. Collins (In re Hildebrandt), 320 B.R. 40 (1st Cir. BAP 2005); In re Desroches, 314 B.R. 19 (Bankr.D.Mass.2004). . 11 U.S.C. § 522(f)(2)(A). . 11 U.S.C. § 522(f)(2)(A)(ii) states that "all other liens on the property” shall be included in the calculation, and therefore the Debtor could have also included Kilwien's $156,659.37 execution as part of the first calculation. However, his failure to do so only prejudices him, because it lowers the amount by which the sum exceeds the value of the Property. . While the Debtor only claimed an exemption in the amount of $145,391 on Schedule C, 11 U.S.C. § 522(f)(2)(A)(iii) states that for the purposes of the lien avoidance formula, a debtor may use the amount of the exemption that he could claim. Here, that amount is $500,000, pursuant to Mass. Gen. Laws ch. 188, § 1. Again, the fact that the Debtor used a lesser amount in applying the 11 U.S.C. § 522(f)(2)(A) formula only prejudices him. . Motion to Avoid Writ of Attachment, Docket No. 52 at ¶¶ 9-10. . Motion to Avoid Execution, Docket No. 53, ¶¶ 9-10.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494699/	MEMORANDUM OF DECISION ON (1) DEFENDANT’S MOTION TO DISMISS, (2) PLAINTIFF’S MOTION TO AMEND COMPLAINT, AND (3) PLAINTIFF’S MOTION TO EXTEND TIME FOR FILING ADVERSARY COMPLAINT FRANK J. BAILEY, Bankruptcy Judge. The plaintiff, creditor Gilbert C. Sullivan (the “Plaintiff’), brought this adversary 771proceeding to determine the dischargeability of a debt under 11 U.S.C. § 523(e). The defendant, debtor Andrew J. Costa (the “Debtor”), promptly moved to dismiss the complaint as untimely under Fed. R. Bankr.P. 4007(c). In response, the Plaintiff brought two motions: one asking for leave to amend his complaint to add several counts under 11 U.S.C. § 727(a), each new count being an objection to the Debt- or’s discharge; and another for permission to extend the time to file complaints under §§ 523(c) and 727(a). For the reasons set forth below, the Court will dismiss this adversary proceeding and deny the motions to amend the complaint and to extend time to file complaints. FACTUAL BACKGROUND On January 28, 2011, the Debtor filed a petition for relief under Chapter 7 of the Bankruptcy Code, thereby commencing the case in which this adversary proceeding arises. The first date set for the first meeting of creditors was February 24, 2011. Accordingly the initial deadline for filing complaints to object to discharge and to determine the dischargeability of certain debts was April 25, 2011. See Fed. R. Bankr.P. 4004(a), 4007(c) (in both instances specifying that complaints within then-purview “shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a)”). At the Debtor’s own request, this deadline was extended for the benefit of all creditors to May 31, 2011. On May 20 and August 10, 2011, the Plaintiff filed timely motions to further extend the deadline for himself, and these motions were allowed, further extending the deadline for the Plaintiff first to August 15, 2011, and then to September 15, 2011. When that date had come and gone, the Plaintiff had filed no further motion to extend. By way of explanation for the missed deadline, the Plaintiff has offered the explanation that, when the deadline expired, he was in the process of transitioning from one attorney to another; he was unable to secure successor counsel until after the time expired. He argues that the resulting lapse in the deadline was the result of excusable neglect. On October 4, 2011, almost a month after the deadline, he filed another motion to extend. The Debtor filed an objection the next day, arguing that the time to file a complaint objecting to discharge or to determine the dischargeability of certain debts had expired. Soon after, without comment or a hearing on the Debtor’s objection, the Court granted the Plaintiffs motion, further extending the deadline for the Plaintiff to November 22, 2011. This order was entered by administrative error, apparently without awareness that the Debtor had filed an objection. The Court’s standard practice upon receiving an objection of this nature is to set the matter for a hearing. Nonetheless, the Court did grant the motion, and the Plaintiff filed the complaint commencing this adversary proceeding on November 21, 2011. The Plaintiff’s complaint asserted only counts under 11 U.S.C. § 523 to determine the dischargeability of a debt. In one count, the basis of nondischargeability is identified as paragraph (a)(2) of § 523; the other counts do not cite a specific paragraph of § 523(a) but in each instance the alleged bases are fraudulent misrepresentations. In the complaint’s introductory paragraph, the Plaintiff indicated that he was also thereby seeking an order under 11 U.S.C. § 727 prohibiting the discharge of the Debtor, but the complaint in fact contained no objection to discharge. In his answer, the Debtor (i) observed that the complaint included no count under § 727(a) and (ii) asserted as an affirmative 772defense that the complaint was not timely filed and therefore is time-barred. By a series of five separate motions, the chapter 7 trustee, too, sought and obtained extensions of time for the trustee to object to the Debtor’s discharge, ultimately to March 23, 2012. Each motion asked that the time be extended “for the trustee” and did not ask for an extension as to any other party. Each motion was granted, and in each instance but one the order specified that the time was being extended “for the trustee.” The other order did not so specify but merely granted the motion and in effect did the same. These orders did not extend the time to object to discharge for any party other than the trustee. The parties then filed, in sequence, the motions that are the subject of this decision. First, the Plaintiff, realizing his error, asked for leave to amend his complaint to add the absent counts under § 727(a). Second, the Debtor filed a motion to dismiss the adversary complaint on the basis that it was untimely filed. Third, the Plaintiff filed a motion to extend the time for filing complaints under §§ 528(c) and 727(a) nunc pro tunc, calling upon the equitable power of this Court under 11 U.S.C. § 105(a). DISCUSSION a. The Extension Order As a pi'eliminary matter, the Court must address its October 21, 2011 Order extending time for the Plaintiff to file complaints under §§ 523(c) and 727(a). That order was entered by administrative error, the Court having been unaware of the Debtor’s timely filed objection to it. The order was thus entered without the Debt- or’s having been afforded the benefit of consideration of his objection. The order is therefore obviously infirm from the standpoint of due process. Moreover, the order is not yet final and would not be subject to appeal by the Debtor until it resulted in an adverse judgment against him. Accordingly, in the present proceedings, the Court will treat the order as subject to reconsideration de novo in light of Debtor’s objection to that motion. The Plaintiff argues that he has relied on the order&emdash;by subsequently filing the complaint commencing this adversary proceeding&emdash;and therefore that the court may not now reconsider it. His suggestion that he relied on the order is unfounded, at least insofar as he implies that his reliance has made any difference. By the time he filed the motion on which that order was entered, the time for him to file a complaint objecting to discharge or to determine the dischargeability of a debt had already lapsed. For the reasons set forth below, that is the dispositive fact. Nothing the Plaintiff did in reliance on the extension order could have altered that dispositive fact. I need not determine whether reliance should preclude reconsideration because there was no reliance that made a difference. b. The Debtor’s Motion to Dismiss The Debtor has moved for dismissal based on the contents of the pleadings. Accordingly, the Court will treat the motion as one under Federal Rule of Civil Procedure 12(c) for judgment on the pleadings. On a Rule 12(c) motion, the court must accept the factual assertions in the complaint as true and draw all reasonable inferences in favor of the nonmoving party. Rivera-Gomez v. de Castro, 843 F.2d 631, 635 (1st Cir.1988). A court must deny the motion unless it is beyond doubt that the plaintiff has no ability to prove facts in the complaint entitling him to relief. Id. At least where the facts are undisputed, a Rule 12(c) motion is a proper vehicle for seeking dismissal on the basis of an affirmative defense that the claim is time-773barred. See 5C Charles Alan Wright and Arthur R. Miller, Federal Practice & Procedure § 1367 (3d ed. West 2012). In this instance, the dispositive facts are matters of record in the Debtor’s bankruptcy case and this adversary proceeding, and there is no dispute as to those facts. Section 523(c) of the Bankruptcy Code provides in relevant part that “the debtor shall be discharged from a debt of a kind specified in paragraph (2), (4), or (6) of subsection (a) of this section unless, on request of the creditor to whom such debt is owed, and after notice and a hearing, the court determines such debt to be excepted from discharge.” 11 U.S.C. § 523(c)(1). Bankruptcy Rule 4007(c) establishes the time within which a complaint required by § 523(c)(1) must be filed. This rule requires that “a complaint to determine the dischargeability of a debt under § 523(c) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a).” Fed. R. Bankr.P. 4007(c). A party may move to extend this deadline, but the rule explicitly requires that “the motion shall be filed before the time has expired.” Additionally, Rule 4007(c) must be read in conjunction with Rule 9006(b)(3), which permits a bankruptcy court to enlarge the time for taking action under Rule 4007(c) “only to the extent and under the conditions stated in [that] rule[ ].” Fed. R. Bankr.P. 9006(b)(3). Consequently, Rules 4007(c) and 9006(b)(3) operate mechanically to preclude a court from granting an extension of time to file a complaint required by § 523(c) unless the plaintiff has complied with the requirement in Rule 4007(c) that a motion to extend be filed before the time has expired. Here, the Plaintiff has simply failed to follow the rule; the period for filing a motion to extend the time within which to bring a § 523(c) complaint expired on September 15, 2011. The Plaintiff did not file another extension motion until October 10, 2011, after the time had expired. Other courts have strictly construed the plain meaning of Rule 4007(c), and so shall this Court. See Francis v. Eaton {In re Eaton), 327 B.R. 79, 81 (Bankr.D.N.H.2005) (“Rule 9006(b)(3) provides that the Court may not enlarge the time to file a complaint under Rule 4007(c) for any reason outside of the provisions of Rule 4007(c)”). Because the complaint was untimely filed, the Court will grant the Debtor’s motion to dismiss the counts contained in the initial complaint. c. Plaintiff’s Motion to Amend the Complaint Next, the Court must consider the Plaintiffs motion to amend the complaint to add counts under § 727(a) to object to the Debtor’s discharge. The Court must deny this motion for the same reasons it granted the motion to dismiss: any claims now brought under § 727(a) are untimely by virtue of Bankruptcy Rule 4004(a) and (b). Paragraph (a) of Rule 4004 requires that a party intending to file a complaint objecting to discharge do so “no later than 60 days after the first date set for the meeting of creditors under § 341(a).” Paragraph (b) of this rule governs extensions of the 60-day period. Rule 4004(b)(1) requires that a party ask for such an extension by motion and directs that “the motion shall be filed before the time has expired.”1 Rules 4004(a) and (b) operate as does Rule 4007(e). Both rules contain the same language with respect to filing deadlines. 774Additionally, Rule 9006(b)(3) operates in the same manner with respect to the deadline in Rule 4004(a) as it does with respect to the deadline in Rule 4007(c): it specifies that a court may extend the deadline in Rule 4004(a) “only to the extent and under the conditions stated in [that] rule[ ].” Fed. R. Bankr.P. 9006(b)(3). Courts routinely construe Rules 4004(b) and 4007(c) as operating identically. See e.g. Kontrick v. Ryan, 540 U.S. 443, 448 n. 3,124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (observing that because of the practical identity in the timing requirements as to complaints under §§ 523(c) and 727(a), courts have considered decisions construing those timing requirements together); Torres Vazquez v. Prego Cruz (In re Prego Cruz), 323 B.R. 827, 831 (1st Cir. BAP 2005) (analyzing the timing requirements of Rules 4004(b) and 4007(c) jointly). Here, the Plaintiff did not bring his amended counts within the time allotted in Rule 4004, which expired on September 15, 2011. Accordingly, the requirements of Rule 4004 would bar the counts with which the Plaintiff would amend his complaint. The Court will therefore deny leave to amend on the basis that the proposed amendments are time-barred and would for that reason be futile.2 d. Plaintiffs Motion to Extend Time to File a Complaint Upon realizing that his motion to extend needed to have been filed before the time had expired, the Plaintiff filed a motion under Federal Rules of Bankruptcy Procedure 4004(a) and 9006 for an enlargement of time to file his adversary complaint, with the order to have nunc pro tunc effect. It is unclear from the motion whether the Plaintiff is asking that the time be enlarged to November 22, 2011, or that the order be effective as of that date. By later briefs filed in support of the motion, it has become clear that (i) he is seeking an extension of time to file both his original complaint and the counts under § 727(a) with which he would amend it and (ii) he is arguing that, on various grounds, he is entitled to such an extension notwithstanding that it was requested after the time expired. He argues that there are six independent grounds on which the Court can afford him this treatment: (i) that his failure to act before the deadline was the result of excusable neglect; (ii) that 11 U.S.C. § 105(a) permits the court to disregard and override the express limitations on the court’s power to extend that are set forth in Fed. R. Bankr.P. 4004(b), 4007(c), and 9006(b)(3); (iii) that the time limits in Rules 4004(b) and 4007(c) are not jurisdictional, may therefore be waived, and were waived by virtue of failure of the Debtor’s failure to assert them in a motion to dismiss that expressly referenced Fed.R.Civ.P. 12(b)(6); (iv) that the Court did in fact grant the 775Plaintiffs motion to extend the filing deadline, and the Plaintiff relied on that order by filing a complaint, warranting enforcement of the order notwithstanding that it was entered in error; (v) that the time limits in Rules 4004(b) and 4007(c) are subject to equitable tolling; and (vi) that the Court’s orders extending the time for the chapter 7 trustee to object to discharge through March 23, 2012, may be deemed to have extended that deadline for the benefit of all creditors. The Court will address these in turn. 1. Excusable Neglect As a general rule, Rule 9006(b)(1) permits a court, for cause shown and in its discretion, to extend the time within which an act must be done “on motion made after the expiration of the specified period ... where the failure to act was the result of excusable neglect.” Fed. R. Bankr.P. 9006(b)(1). That general rule, however, is prefaced by the language “except as provided in paragraphs (2) or (3) of this subdivision.” As described above, “paragraph (3) of this subdivision” makes clear that general rule has no application to the time limits established by Rules 4004(a) and 4007(c). Rather as to those time limits, Rule 9006(b)(3) states that the court may enlarge the time for taking action under those rules “only to the extent and under the conditions stated in those rules.” Fed. R. Bankr.P. 9006(b)(3). Rules 4004 and 4007 in turn require that a motion for enlargement, for whatever cause, be filed before the time has expired. Accordingly, a court does not have discretion to grant a motion to extend on the basis of excusable neglect where that motion is filed after the time has expired. The argument based on excusable neglect is therefore of no help to the Plaintiff. 2. 11 U.S.C. § 105(a) The Plaintiff argues that 11 U.S.C. § 105(a) permits the court to disregard and override the express limitations on a court’s power to extend that are set forth in Fed. R. Bankr.P. 4004(b), 4007(c), and 9006(b)(3). The Court disagrees. Section 105(a) of the Bankruptcy Code expressly authorizes the court to “issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” 11 U.S.C. § 105(a). It is well-settled, however, that “section 105(a) may not be invoked where the result of its application would be inconsistent with any other Code provision or it would alter other substantive rights set forth in the Code.” Ameriquest Mortgage Co. v. Nosek (In re Nosek), 544 F.3d 34, 44 (1st Cir.2008). “The authority bestowed thereunder may be invoked only if, and to the extent that, the equitable remedy dispensed by the court is necessary to preserve an identifiable right conferred elsewhere in the Bankruptcy Code.” In re Jamo, 283 F.3d 392, 403 (1st Cir.2002). The Plaintiff has offered no reason why this case should not be resolved by the usual application of Federal Rules of Bankruptcy Procedure 4004(b), 4007(c), and 9006(b)(3). Rather, his pleading of excusable neglect suggests that this matter falls well-within the competence of the usual rules, with a clear (albeit unfortunate) outcome for the Plaintiff. 3.Waiver- The Plaintiff next argues that the Debtor waived his right to contest the timeliness of the complaint by failing to bring a motion under Fed.R.Civ.P. 12(b)(6) to dismiss the complaint as untimely. The Plaintiff supports this argument with a citation to Kontrick'v. Ryan, 540 U.S. 443, 459-60, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004). Kontrick stands for the proposition that the time limits in Rules 4004(b) and 9006(b)(3) are not jurisdictional and 776for that reason may be waived if not timely asserted. The Plaintiff contends that it stands for the further proposition that the defense of untimeliness under these rules will be deemed waived if not first asserted in a timely motion under Rule 12(b)(6). The decision does not support that reading. In Kontrick, the defense was deemed waived because it was first raised only after the party had litigated and lost the case on the merits. Kontrick itself states: “Ordinarily, under the Bankruptcy Rules as under the Civil Rules, a defense is lost if it is not included in the answer or amended answer.” Id. at 459, 124 S.Ct. 906. The Debtor in the present case raised the defense in his answer. He has not waived it. 4. Reliance The Plaintiff further argues that where the court did in fact grant the Plaintiffs motion to extend the filing deadline, and the Plaintiff relied on that order by filing a complaint, the order should be enforced notwithstanding that it was entered in error. The Court addressed this argument above and need not reiterate it here. There was no reliance that made a difference, the dispositive lapse having occurred before entry of the erroneous order. 5. Equitable Tolling The Plaintiff next argues that the time limits in Rules 4004(b) and 4007(c) are subject to equitable tolling. Whether these time limits are subject to equitable tolling is not a settled question, but the Court need not resolve that question here.3 The doctrine of equitable tolling allows a court to deem a statute of limitations tolled where extraordinary or misleading circumstances cause a party to miss a deadline. Ortega Candelaria v. Orthobiologics, LLC, 661 F.3d 675, 679-81 (1st Cir.2011) (limitations period was equitably tolled where one party prevented the timely filing of an ERISA claim by its misleading conduct). Even if equitable tolling were possible, the Plaintiff has not alleged facts that would permit tolling. Instead he contends he missed the deadline as a result of confusion arising from his decision to seek new legal counsel. Cases where courts have applied equitable tolling are based on markedly different facts. See e.g. Erie Ins. Co. v. Romano {In re Romano), 262 B.R. 429, 432 (Bankr. N.D.Ohio 2001) (creditor did not find out about debtor’s fraudulent conduct until after discharge and thus had no knowledge of potential § 523(c) complaint before deadline expired). As a matter of law, the facts alleged by the Plaintiff do not constitute the extraordinary circumstances required to apply the doctrine of equitable tolling. 6.Time Extended by Orders on Trustee’s Motions The Plaintiffs final argument is that, by operation of the Court’s orders granting successive motions by the chapter 7 trustee to extend the time to object to discharge, ultimately to March 23, 2012, the time should be deemed extended not only for the trustee but also for all creditors. On the basis of this reasoning, the Plaintiff would have the Court conclude that his proposed counts objecting to discharge were timely filed. 777A brief review of the docket in this case shows this argument to be implausible. The trustee filed a series of five motions to extend the time to object to discharge. Each expressly asked that the time to be extended “for the trustee” and did not request an extension for any other party in interest. Four of the five orders that extended the time for the trustee to file a complaint objecting to discharge expressly extended the time “for the trustee” and for the trustee alone. The fifth order did not specify “for the trustee” but merely granted the extension requested, which itself was “for the trustee.” There is no reasonable basis upon which the orders granting extensions to the trustee can be deemed to have extended the time for the benefit of any other party. Each of Plaintiffs arguments having fallen short, the Court will deny the Motion to Extend Time to File Complaint. CONCLUSION For the foregoing reasons, the court will enter a separate order that denies Plaintiffs motion to amend his complaint to add § 727(a) counts, denies Plaintiffs nunc pro tunc motion to extend time for filing adversary complaints under §§ 523(c) and 727(a), and dismisses the adversary complaint with prejudice. . Rule 4004(b) has recently been amended to permit a motion to extend the time to object to discharge to be filed after the time has expired in certain limited circumstances. 774Specifically, the motion "may be filed after the time for objection has expired and before discharge is granted if (A) the objection is based on facts that, if learned after the discharge, would provide a basis for revocation under § 727(d) of the Code, and (B) the mov-ant did not have knowledge of those facts in time to permit an objection.” Fed. R. Bankr.P. 4004(b)(2) (amendment effective Dec. 1, 2011). The amendment has no application here because Plaintiff does not invoke it and does not allege the discovery of new facts. . The Plaintiff's additional arguments concerning the relation back doctrine — that the amended counts are timely because they "relate back” to the date of the initial complaint — are without merit. I need not determine whether the counts to be added would relate back to the date of the original complaint; even if they did relate back, they would still be time-barred, the original complaint having itself been filed after the time had expired. . At least one court in this circuit has held that, where a party has failed to file a dis-chargeability complaint by the deadline, a strict reading of Bankruptcy Rules 4007(c) and 9006(b)(3) precludes altogether the application of the equitable tolling principle. See Francis v. Eaton (In re Eaton), 327 B.R. 79, 85 (Bankr.D.N.H.2005).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494702/	MEMORANDUM DECISION AND ORDER DENYING THE MOTION FOR AN ORDER CONFIRMING THAT CERTAIN LIMITED PARTNERS ARE HOLDERS OF ALLOWED LIMITED PARTNER INTERESTS AND MEMBERS OF CLASS 4 UNDER THE AMENDED PLAN BURTON R. LIFLAND, Bankruptcy Judge. Before the Court is the motion (the “Motion”) of Christopher McLoughlin Keough, Quantum Hedge Strategies Fund, LP, and SIM Hedged Strategies Trust (the “Purported Limited Partners” or “Movants”), purported limited partners in Greenwich Sentry, L.P. (“Sentry,” and together with Greenwich Sentry Partners, L.P., the “Debtors”), seeking an order declaring that the Movants are holders of allowed limited partner interests entitled to distributions under the Debtors’ confirmed plans. The liquidating trustee (the “Liquidating Trustee”) for the liquidating trusts of the Debtors, 217 Canner Associates, LLC, filed an opposition to the Motion. The instant Motion was brought by a number of parties who elected to blatantly ignore an explicit order of this Court. The order at issue stated, in bold capital letters, that all interest holders must file proofs of interest by the bar date, notwithstanding what is contained in the Debtors’ schedules. Rather than comply and file proofs of interest, the Purported Limited 802Partners attempt to evade that order by advancing several unpersuasive arguments. Accordingly, the Motion is DENIED. BACKGROUND The Debtors operated as private investment partnerships, sold limited partnership interests to investors through confidential offering memoranda, and used the proceeds to invest pursuant to an investment program. On November 19, 2010, the Debtors filed a petition for chapter 11 relief in this Court. Shortly thereafter, the Debtors filed a summary of schedules and statement of financial affairs (the “Schedules”). See Dkt. No. 44. The Debtors’ Schedules included a list of known interest holders and the “Estimated Percentage Ownership” for each of them. The list provides: This list of equity holders is based upon the administrator’s records of investors in Greenwich Sentry, L.P. and in Greenwich Sentry Partners, L.P. as of November 30, 2008. This list may include limited partners that made redemption requests prior to November 30, 2008, but to whom no redemption payments were made as a result of the disclosure on or about December 11, 2008 of the ponzi scheme that had been operated by Bernard L. Madoff Investment Securities LLC. Schedules, Ex. B. On April 6, 2011, the Court entered the First Bar Date Order1 setting May 23, 2011 (the “First Bar Date”) as the bar date for filing proofs of claim and proofs of interest. According to this order, purported interest holders need not file proofs of interest if their interest is listed in the Debtors’ schedules, provided that the “[i]n-terest is not scheduled as ‘disputed,’ ‘contingent,’ or ‘unliquidated.’ ” First Bar Date Order, p. 3. On July 20, 2011, the Debtors filed their proposed plans of reorganization (the “Proposed Plans”). See Dkt. Nos. 173, 175. The Debtors construed the plans as disallowing limited partner interests unless the holder of such interests had timely filed proofs of interest. Certain limited partners (the “Original Objecting Limited Partners”) objected to the Proposed Plans and the accompanying disclosure statements. See Dkt. No. 192. The Original Objecting Limited Partners argued that their interests had been listed in the Schedules and were not listed as “disputed,” “contingent,” or “unliquidated” and, therefore, they were exempt from filing a proof of interest pursuant to section 1111(a) of the Bankruptcy Code (“Section 1111(a)”). The Debtors countered that the Original Objecting Limited Partners were required to file proofs of interest because the interests in the Schedules were not liquidated, but were “estimated” and subject to redemption payments. The above notwithstanding, the Debtors agreed to extend the bar date and notify all interest holders that they must file proofs of interest, even if their interests were not scheduled as disputed, contingent, or unliquidat-ed. Consequently, on September 20, 2011, this Court entered the Extended Bar Date Order,2 extending the time for interest 803holders to file proofs of interest to October 20, 2011 (the “Extended Bar Date”). The Extended Bar Date Order and its accompanying notice (“the Extended Bar Date Notice”), see Dkt. No. 208, Ex. A, warned interest holders that they must file proofs of interest or they would forfeit their right to any distribution from the estate. Specifically, the Extended Bar Order stated: The Extension Notice shall, among other things, advise [interest holders in the Debtors] that notwithstanding the fact that their applicable Interests may not be scheduled as ‘disputed,’ ‘contingent’ or ‘unliquidated’ in the List of Equity Holders annexed to each of Debtor’s Statement of Financial Affairs, such [interest holders in the Debtors] are still required to timely file a Proof of Interest. Extended Bar Date Order, p. 4, ¶4. In turn, the Extended Bar Date Notice provided: “If you have an Interest against either of the Debtors that arose on or prior to the Filing Date ... you MUST file a Proof of Interest to share in distributions from the Debtors’ bankruptcy estates and vote with respect to such Interest on a Chapter 11 plan filed by the Debtors.” See Extended Bar Date Notice, p. 2, ¶ 1 (emphasis in original). The notice also provided in bold capital letters: REGARDLESS OF WHETHER YOUR INTEREST IS NOT SCHEDULED AS “DISPUTED,” “CONTINGENT” OR “UNLIQUIDATED” IN THE LIST OF EQUITY HOLDERS ANNEXED TO EACH DEBTOR’S STATEMENT OF FINANCIAL AFFAIRS, YOU ARE STILL REQUIRED TO FILE A TIMELY PROOF OF INTEREST. Id. at p. 3 (emphasis in original). Moreover, unlike the First Bar Date Notice, the Extended Bar Date Notice did not include an exception under the heading “Who Need Not File A Proof Of Interest” for interest holders listed in the Schedules but not listed as “disputed,” “contingent,” or “unliquidated.” Each of the Purported Limited Partners received notice of the Extended Bar Date. See Certificate of Service of the Extended Bar Order (Dkt. No. 210). On December 22, 2011, the Debtors filed their first amended plans of reorganization (the “Amended Plans”), see Dkt. Nos. 211, 213, which provided for distribution on “Allowed” claims and interests. “Allowed” claims and interests entitled to distribution require the filing of a proof of claim or interest, unless the “[e]laim or [interest has been or hereafter is listed by the Debtor in the Schedules as liquidated in amount and not disputed or contingent.” See Amended Plans, p. 4. By order dated December 22, 2011, this Court entered the Confirmation Order,3 which provided that the terms of the Plans shall govern classification of claims and interests for pur804poses of distribution. See Confirmation Order, p. 17, ¶ 3. DISCUSSION I. The Purported Limited Partners are Bound by the Extended Bar Date Order Bar dates ensure the sound administration of a bankruptcy estate by “enabling the parties to a bankruptcy case to identify with reasonable promptness the identity of those making claims against the bankruptcy estate and the general amount of the claims, a necessary step in achieving the goal of successful reorganization.” Midland Cogeneration Venture Ltd. P’ship v. Enron Corp. (In re Enron), 419 F.3d 115, 128 (2d Cir.2005) (citing First Fidelity Bank, N.A. v. Hooker Invs. Inc. (In re Hooker Invs., Inc.), 937 F.2d 833, 840 (2d Cir.1991)). “If individual creditors were permitted to postpone indefinitely the effect of a bar order ... the institutional means of ensuring the sound administration of the bankruptcy estate would be undermined.” Hooker Invs., 937 F.2d at 840. Despite the importance of filing proofs of claim or interests, it is deemed unnecessary by the Code in certain situations. See, e.g., 11 U.S.C. § 1111(a) (stating that “[a] proof of claim or interest is deemed filed ... for any claim or interest that appears in the schedules ... except a claim or interest that is scheduled as disputed, contingent or unliquidated”). Consistent with Section 1111(a), the Federal Rule of Bankruptcy Procedure (“Bankruptcy Rule”) 3003 provides that “the list of equity security holders” filed with the debtor’s schedule of liabilities “shall constitute prima fa-cie evidence of the validity and amount of the equity security interests.... ” Fed. R. Bankr.P. 3003(b)(2). The purpose underlying Section 1111(a) is to “lessen the fury of the inevitable paper storm that descends upon bankruptcy proceedings.” In re Crouthamel Potato Chip Co., 786 F.2d 141, 145 (3d Cir.1986). In other words, this section was “designed to eliminate unnecessary practices and procedures where money is tight, time is expensive, proceedings are by necessity protracted, and [its] goal is to achieve administrative efficiency and, as much as possible, to conserve time and money, administrative expenses and fees.” Id. In essence, Section 1111(a) is premised on procedural efficiency, and if the amount of a claim or interest is clear to all parties, filing proof of that claim or interest is unnecessary and wasteful. In the instant case, it was not evident from the Debtors’ Schedules and Proposed Plans whether scheduled limited partners were required to file proofs of interest. For administrative efficiency and to prevent unnecessary protracted litigation as to the status of any purported limited partners’ interests, this Court entered the Extended Bar Date Order. This order extended the bar date to file proofs of interest and explicitly cautioned all limited partners in the Debtors to file proofs of interest, notwithstanding the manner in which they were listed on the Schedules. See Extended Bar Date Notice, pp. 2-3. Having failed to comply with the Extended Bar Date Order, the Purported Limited Partners now advance several arguments as to why they are not bound by it: (i) Section 1111(a) prevented this Court from ordering them to file proofs of interest; (ii) Sentry’s Amended Plan and the Confirmation Order nullified the requirement to file proofs of interest; and (iii) disallowance of their interests for failure to file proofs of interest deprives them of property interests without due process. As ex805plained below, these arguments are unpersuasive. A. This Court had Authority to Enter the Extended Bar Date Order In an attempt to justify ignoring the Extended Bar Date Order, the Purported Limited Partners assert that: (i) their interests were listed on the Schedules in a manner deemed filed per Section 1111(a) and (ii) courts cannot enter a bar date order that overrides Section 1111(a). Contrary to the Purported Limited Partners’ argument, courts clearly have the authority to enter orders requiring interest holders to file proofs of interest, regardless of what is stated in the schedules. See In re Yonkers Prof'l Hosp., 113 B.R. 153, 157 (Bankr.S.D.N.Y.1990) (holding that by specifically ordering interest holders to file proofs of interest, “the ‘double deeming’ effect of § 1111(a) of the Bankruptcy Code and [the corresponding Bankruptcy Rule], which ... provide for a claim to be deemed filed, ... was rebutted by this court’s order”); In re McLean Enters., 98 B.R. 485, 486 (Bankr.W.D.Mo.1989) (finding “that it had, has, and will have in the future the ability to issue bar orders in Chapter 11 cases” requiring claimants to file proofs of claim even if not scheduled as disputed, contingent, or unliquidated); see also ETrade Fin. Corp. v. MarketXT Holdings Corp (In re MarketXT Holdings Corp.), 336 B.R. 67, 71 (Bankr.S.D.N.Y.2006) (“The ‘bar date order’ entered in the Chapter 11 case required all creditors with secured or unsecured, contingent or fixed, liquidated or unliquidated claims to file a proof of claim by a date certain. This order was binding on [the creditor].”) (emphasis added). The Movants misplace reliance on The Tenth RMA Partners, L.P. v. DiCroce (In re DiCroce), where it was determined that a bankruptcy court cannot establish a bar date for claims deemed filed under Section 1111(a). DiCroce, No. 97-057, 1998 WL 35416878, at 4 (1st Cir. BAP Feb. 25, 1998) (“[A]lthough the court could establish a bar date by which creditors who needed to file proofs of claim were required to do so, it could not extend such an order to cover claims already ‘deemed filed’ under § 1111(a).”). In that case, the schedules listed the creditor “as the holder of a liquidated, noncontingent, undisputed, unsecured, nonpriority claim in the amount of $287,486.49.” Id. at 1. As such, the liquidated amount of the claim was undis-putable and the court’s order requiring the claim holder to file a proof of claim served no administrative purpose. Here, in contrast, the Debtors’ Schedules were ambiguous4 and led to disputes between the Debtors and the limited partners regarding the need to file proofs of interest. Thus, it is illogical to use Section 1111(a)— a section grounded in administrative efficiency — to prohibit a court from entering an order aimed at minimizing disruptive litigation on peripheral issues and facilitating the parties’ negotiations and plan con806firmation. Accordingly, issuing the Extended Bar Order was well within the scope of this Court’s authority. B. The Confirmation Order Did Not Nullify the Requirements of the Extended Bar Date Order The Purported Limited Partners further argue that Sentry’s Amended Plan and the Confirmation Order somehow nullified the Extended Bar Date Order’s requirement of filing proofs of interest. Under Sentry’s Amended Plan, “allowed interests” include an interest for which no proof of interest was filed, but “is listed by the Debtor in the Schedules as liquidated in amount and not disputed or contingent” See Amended Plans, p. 4. The Confirmation Order permanently enjoins challenges to classification and distribution under the Amended Plan. As such, the Purported Limited Partners posit that the Confirmation Order nullifies the Extended Bar Date Order’s requirement that limited partners must file proofs of interest by the Extended Bar Date. The Purported Limited Partners are misguided, however, for two principal reasons. First, the Purported Limited Partners manufacture an inconsistency between the Amended Plans and the Extended Bar Date Order. The Amended Plans allows for distribution on unfiled claims or interests only if the “[cjlaim or [i]nterest has been or hereafter is listed by the Debtor in the Schedules as liquidated in amount and not disputed or contingent.” Amended Plans, p. 4 (emphasis added). The Purported Limited Partners’ interests were not listed as liquidated in the Schedules. Indeed, the interests were listed as “estimated” and subject to redemption payments made by investors. Second, while the Confirmation Order provided that the terms of the Amended Plans shall govern classification of claims and interests for purposes of distribution, neither the Confirmation Order nor the Amended Plans provided that they supersede or otherwise nullify the Extended Bar Date Order. C. Due Process is Not Offended By Denying Distribution to the Purported Limited Partners Finally, the Purported Limited Partners contend that disallowance of their interests for failure to file proofs of interest would deprive them of property interests without due process. Of course, “[s]etting an outside limit for the time to assert a right triggers due process concerns of which every court must be cognizant.” In re New Century TRS Holdings, Inc., 465 B.R. 38, 46 (Bankr.D.Del.2012). But “[t]his concern is resolved through notice.” Id. To comport with due process requirements, “a party seeking relief must provide notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Morgan Olson, LLC v. Frederica (In re Grumman Olson Indus.), 445 B.R. 243, 254 (Bankr.S.D.N.Y.2011) (quotations and citations omitted). In the context of bar dates, due process requires that known creditors and interest holders receive clear and unambiguous notice of the bar date in order to afford them the opportunity to file proofs of claim or interest. See Wilzig v. Lopez (In re Lopez), 192 B.R. 539, 544 (9th Cir. BAP 1996); In re Enron Corp., No. 01-16034, 2006 WL 898031, at 4 (Bankr.S.D.N.Y. Mar. 29, 2006). In the instant case, due process is not offended by denying distribution to the 807Purported Limited Partners. It is uncontested that they received notice of the Extended Bar Date, which unambiguously stated, in bold font and capital letters, that all interest holders must file proofs of interest by the Extended Bar Date. As such, the timely filing of proofs of interest was the Purported Limited Partners’ only means to secure a distribution through Sentry’s Amended Plan. See In re Hooker Invs., 937 F.2d at 840 (“Indeed, so important are the interests served by the bar order that ... a creditor who fails to file a proof of claim by the bar date may be entirely barred from sharing in the distribution of the bankruptcy estate.”); In re New York Seven-Up Bottling Co., 153 B.R. 21, 23 (Bankr.S.D.N.Y.1993) (“A creditor in a Chapter 11 case who receives appropriate notice of the bar date and fails to file timely a proof of claim with respect to a disputed claim will not be treated as a creditor for distribution purposes.”). The Purported Limited Partners’ failure to file proofs of interest by the Extended Bar Date cannot be condoned. They received notice of the bar date and ignored the Extended Bar Date order at their own peril. CONCLUSION In light of the foregoing, the Purported Limited Partners’ Motion is DENIED. IT IS SO ORDERED. . See Order (A) Fixing a Date for Filing Proofs of Claim and Proofs of Interest Pursuant to Bankruptcy Rule 3003(c)(3) and (B) Fixing The Form and Manner of Notice Thereof [hereinafter the "First Bar Date Order"] (Dkt. No. 93). . See So Ordered Stipulation Between Greenwich Sentry, L.P. and Greenwich Sentry Part*803ners, L.P. and Pasha S. Anwar, Julia Anwar, ABR Capital Fixed Option/Income Strategic Fund LP, Diversified Investment Associates Class A Units, Natalia Hatgis and Core Equity Trust, on Behalf of Themselves and on Behalf of the Putative Class of all Similarly Situated Limited Partners in Class 4 Included in the Excluded Limited Partners, RE: Extending Bar Date For Class 4 Limited Partners [hereinafter the “Extended Bar Date Order”] (Dkt. No. 208). . See Order Confirming First Amended Plans of Reorganization Under Chapter 11 of the Bankruptcy Code Proposed by Greenwich Sentry, L.P. and Greenwich Sentry Partners, L.P., Debtors and Debtors-in-Possession [hereinafter the “Confirmation Order"] (Dkt. No. 306). . This ambiguity is exemplified by the parties’ widely divergent interpretations of the manner in which the Schedules listed the interests. The Liquidating Trustee argues that (i) these interests were clearly not liquidated given that they were listed as estimated and subject to redemption payments, and (ii) Section 1111(a) does not require the term "unliq-uidated” to be noted on the Schedules. The Original Objecting Limited Partners argued that their interests were liquidated on the Schedules, and even if they were not, Section 1111(a) requires the Debtors to affirmatively note that an interest is unliquidated in order to trigger a requirement to file a proof of interest	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488621/	NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. IN THE ARIZONA COURT OF APPEALS DIVISION ONE STATE OF ARIZONA, Respondent, v. RANDY JEROME HARRIS, Petitioner. No. 1 CA-CR 22-0198 PRPC FILED 11-22-2022 Petition for Review from the Superior Court in Maricopa County No. CR0000-144541 The Honorable Laura M. Reckart, Judge REVIEW GRANTED; RELIEF DENIED COUNSEL Maricopa County Attorney’s Office, Phoenix By Krista Wood Counsel for Respondent Randy Jerome Harris, Buckeye Petitioner STATE v. HARRIS Decision of the Court MEMORANDUM DECISION Presiding Judge Jennifer M. Perkins, Judge James B. Morse Jr., and Judge Michael J. Brown delivered the decision of the Court. PER CURIAM: ¶1 Petitioner Randy Jerome Harris seeks review of the superior court's order dismissing his petition for post-conviction relief, filed pursuant to Arizona Rule of Criminal Procedure 32.1. This is petitioner's fourth petition. ¶2 Absent an abuse of discretion or error of law, this court will not disturb a superior court's ruling on a petition for post-conviction relief. State v. Gutierrez, 229 Ariz. 573, 577, ¶ 19 (2012). It is petitioner's burden to show that the superior court abused its discretion by denying the petition for post-conviction relief. See State v. Poblete, 227 Ariz. 537, 538, ¶ 1 (App. 2011) (petitioner has burden of establishing abuse of discretion on review). ¶3 We have reviewed the record in this matter, the superior court's order denying the petition for post-conviction relief, petition, and appendix. Petitioner has not established an abuse of discretion. ¶4 For the foregoing reasons, we grant review but deny relief. AMY M. WOOD • Clerk of the Court FILED: JT 2	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488622/	NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. IN THE ARIZONA COURT OF APPEALS DIVISION ONE STATE OF ARIZONA, Petitioner, v. CARMEN BRENDA LEE GONZALEZ, Respondent. No. 1 CA-CR 22-0097 PRPC FILED 11-22-2022 Petition for Review from the Superior Court in Yuma County No. S1400CR201800578 The Honorable Brandon S. Kinsey, Judge REVIEW GRANTED; RELIEF DENIED COUNSEL Yuma County Attorney’s Office, Yuma By Charles V. S. Platt Counsel for Petitioner Yuma County Legal Defender’s Office, Yuma By Zachary John Dumyahn Counsel for Respondent STATE v. GONZALEZ Decision of the Court MEMORANDUM DECISION Presiding Judge Jennifer M. Perkins, Judge James B. Morse Jr., and Judge Michael J. Brown delivered the decision of the Court. PER CURIAM: ¶1 Petitioner State of Arizona seeks review of the superior court's order granting Carmen Brenda Lee Gonzalez’s petition for post-conviction relief, filed pursuant to Arizona Rule of Criminal Procedure 32.1. ¶2 Absent an abuse of discretion or error of law, this court will not disturb a superior court's ruling on a petition for post-conviction relief. State v. Gutierrez, 229 Ariz. 573, 577, ¶ 19 (2012). It is petitioner's burden to show that the superior court abused its discretion by denying the petition for post-conviction relief. See State v. Poblete, 227 Ariz. 537, 538, ¶ 1 (App. 2011) (petitioner has burden of establishing abuse of discretion on review). ¶3 We have reviewed the record in this matter, the superior court's order denying the petition for post-conviction relief, petition for review, and response. Petitioner has not established an abuse of discretion. ¶4 For the foregoing reasons, we grant review but deny relief. AMY M. WOOD • Clerk of the Court FILED: JT 2	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488629/	IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT SANDRA TUFANO, : No. 254 MAL 2022 : Petitioner : : Petition for Allowance of Appeal : from the Order of the v. : Commonwealth Court : : TAMMY L. CLAUSE, P.C. (WORKERS' : COMPENSATION APPEAL BOARD), : : Respondents : ORDER PER CURIAM AND NOW, this 21st day of November, 2022, the Petition for Allowance of Appeal is DENIED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488631/	IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT COMMONWEALTH OF PENNSYLVANIA, : No. 283 MAL 2022 : Respondent : : Petition for Allowance of Appeal : from the Order of the Superior Court v. : : : ZEPHANIAH STOREY, : : Petitioner : ORDER PER CURIAM AND NOW, this 21st day of November, 2022, the Petition for Allowance of Appeal is DENIED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488628/	SupREME Count OF Nevapa (0) 19474 eZee IN THE SUPREME COURT OF THE STATE OF NEVADA STATE OF NEVADA, DEPARTMENT \| No. 84763 OF CORRECTIONS, \| Petitioner, Vs. THE FIRST JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OF CARSON CITY; AND THE HONORABLE JAMES TODD RUSSELL, DISTRICT JUDGE, Respondents, and JESSE HAINES, Real Party in Interest. ORDER DENYING PETITION This is an original petition for writ of mandamus asking this court to compel the district court to vacate its order granting judicial review and remanding and instead affirm the agency decision in an employee claim for overtime compensation. Having considered the petition, the answer, and supporting documents, we conclude that the Nevada Department of Corrections (NDOC) has not sufficiently demonstrated that this case warrants extraordinary writ intervention. See Nev. Const. art. 6, § 4; D.R. Horton, Inc. v. Kighth Judicial Dist. Court, 123 Nev. 468, 474-75, 168 P.3d 731, 736- 37 (2007) (affirming that writ relief is an extraordinary remedy within this court’s sole discretion); Pan v. Eighth Judicial Dist. Court, 120 Nev. 222, 224, 228, 88 P.3d 840, 841, 844 (2004) (finding that petitioner bears burden to show that extraordinary relief is warranted). __27-3U85 \| SuPREME CouRT OF NEVADA LO) 107A a First, NDOC argues that writ review is warranted since the district court erred by failing to defer to the Employee Management Committee's (the committee) interpretation of NRS 281.100. While a court owes deference to an agency’s intertwined findings of fact and conclusions of law, a reviewing court remains free to decide pure legal questions without deference to the agency. Beavers v. State, Dep't of Motor Vehicles & Pub. Safety, 109 Nev. 435, 438, 851 P.2d 432, 434 (1993). Here, the district court found that NRS 281.100 cannot limit the definition of compensable overtime work as a matter of law and remanded this case to the committee to correct legal error by applying the facts of the case to the relevant statutes. Therefore, this court declines to compel the district court to vacate its order and deny Haineg’ petition for judicial review absent any claim that the order was “manifestly unreasonable.” Walker v. Second Judicial Dist. Court, 136 Nev. 678, 680, 476 P.3d 1194, 1196 (2020) (finding that, where a lower court’s order is based on its discretion, mandamus relief is only available where the court’s judgment is manifestly unreasonable). Next, as NDOC concedes, an eventual appeal is available in this case following the committee’s decision on remand. The right of eventual appeal generally precludes writ review. See Pan, 120 Nev. at 224, 88 P.3d at 841. Deferring appellate review to the conclusion of the matter is appropriate here, since the committee never determined whether the pre- and post-shift activities at issue qualified as compensable work under NRS 284.180 beyond its exclusive reliance on NRS 281.100, and ruling on the legal question in the abstract would deprive this court of the benefit of reviewing a fully developed agency record. See Walker, 136 Nev. at 681, 476 P.3d at 1197; Valley Bank of Nev. v. Ginsburg, 110 Nev. 440, 444, 874 P.2d ante, Bn T° aBEPAe ES 88 ae fal Supreme Count OF NEvapa (On yuaTA ati 729, 733 (1994) (describing the goal of promoting judicial economy as “avoiding the specter of piecemeal appellate review’). Finally, while the question of whether NRS 281.100 governs Nevada’s definition of compensable overtime work is a matter of first impression of statewide importance, this court declines to grant writ relief because, in this instance, the importance of the issue favors further administrative review. Here, the committee failed to make a conclusion of law that was necessary to resolve the dispute, and the decision was remanded for the committee on that basis. This court will not disturb the committee's review, especially given NDOC’s argument that these issues are properly decided by the committee to “promote uniformity across the State personnel system.” See Walker, 136 Nev. at 684, 476 P.3d at 1199 (finding that hindering fact-finding through writ review would “unnecessarily limit[\| the records for this court’s appellate review,” particularly where administration of these issues fall within a streamlined and centralized body). Furthermore, since there are no precedential cases interpreting NRS 281.100’s limits on the state’s definition of compensable overtime work, no split interpretation between district courts, and no other cases awaiting resolution of this issue, we are not compelled to intervene prior to further review by the committee. Cf. In re Bendectin Prods. Liab. Litig., 749 F.2d 300, 307 (6th Cir. 1984) (finding an issue of first impression sufficiently important for the purpose of granting writ review due to the “sheer magnitude” of the number of litigants awaiting a decision), In sum, while this petition for writ of mandamus presents a novel legal question of first impression with statewide importance, writ review is not appropriate considering the availability of appeal following the committee’s decision on remand, lack of prior precedent on the relevant we PPR, Supreme Gourt OF Nevapa 1 WTA, see legal issues, and principles of judicial economy favoring a decision by the committee prior to further judicial review.' Therefore, we cc: ORDER the petition DENIED.? > (oft. , Ds ckuwe ag. / e at we £ Ertan 5 S$ J . Hon. James Todd Russell, District Judge Attorney General/Carson City Attorney General/Las Vegas Thierman Buck LLP Carson City Clerk ‘On November 18, 2022, real party in interest filed a notice of settlement and motion to stay the writ proceedings. In light of our conclusion that this court’s intervention is not warranted and because staying this matter pending settlement will cause it to linger indefinitely on this court’s docket, the motion for stay is denied. 2The Honorable Mark Gibbons, Senior Justice, participated in the decision of this matter under a general order of assignment.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488623/	NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. IN THE ARIZONA COURT OF APPEALS DIVISION ONE STATE OF ARIZONA, Appellee, v. DUANE EDWARD BEARDEN, Appellant. No. 1 CA-CR 21-0464 FILED 11-22-2022 Appeal from the Superior Court in Maricopa County No. CR2017-112750-001 The Honorable Eartha K. Washington, Judge Pro Tempore AFFIRMED COUNSEL Arizona Attorney General’s Office, Phoenix By Jillian Francis Counsel for Appellee Maricopa County Public Defender’s Office, Phoenix By Cory Engle Counsel for Appellant STATE v. BEARDEN Decision of the Court MEMORANDUM DECISION Judge Paul J. McMurdie delivered the Court’s decision, in which Presiding Judge Brian Y. Furuya and Judge Jennifer B. Campbell joined. M c M U R D I E, Judge: ¶1 Duane Edward Bearden appeals from his conviction and sentence for producing marijuana. He argues that the superior court abused its discretion by denying his motion to suppress evidence obtained during a warrantless search. Because the emergency aid exception to the warrant requirement applied, we affirm. FACTS AND PROCEDURAL BACKGROUND ¶2 Around 2:30 a.m., police received a 9-1-1 call from an unknown caller. The caller sounded distressed and said, “Help, help, help,” before the call suddenly ended. The dispatcher traced the call to a specific address in Peoria and sent two police deputies for a welfare check. ¶3 When the deputies arrived, they found a large property enclosed by a seven-foot-tall block fence with a padlocked, corrugated steel gate. The deputies did not see or hear anyone needing help, so they peered over the wall but saw no one. Considering the 9-1-1 call, the officers concluded that there still may be an ongoing emergency and decided to climb the wall to continue their search for the distressed caller. ¶4 The deputies walked outside a residential building and the attached garage, looking through windows and open doors for anyone who needed aid. As they neared one window, a deputy smelled unburnt marijuana. Through another window, the deputy saw a closed interior door with a bright light emanating from beneath it. The odor of fresh marijuana had also grown stronger. ¶5 At this point, the deputies believed marijuana was growing on the property. And with the 9-1-1 call in mind, they felt this was a potentially dangerous situation. They returned to their car and retrieved rifles before heading toward a large, open, detached garage. Inside the garage, they smelled a strong odor of marijuana and noticed a marijuana 2 STATE v. BEARDEN Decision of the Court grow tent. Deeper into the garage, they saw a man lying on a cot and a rifle1 hanging on a nail nearby. The man appeared asleep, uninjured, and not in distress. The deputies believed the man might be guarding the marijuana and opted not to wake him. ¶6 They left the property and remained outside the wall until they obtained a search warrant. Before the search, a SWAT team secured the property and found Bearden. When police searched the home, they found growing marijuana plants and drug paraphernalia. ¶7 The State charged Bearden with five drug-related counts and three counts of misconduct involving weapons. Before the trial, Bearden moved to suppress the evidence found during the search, arguing that no exigent circumstances existed to justify a warrantless search. The court conducted an evidentiary hearing, at which Bearden argued that the deputies “didn’t have enough cause . . . to enter and to go over the wall.” The superior court disagreed and allowed the evidence, ruling that exigent circumstances existed because the deputies believed someone at that address had called for help and then gone silent. ¶8 The case proceeded to trial, and the jury found Bearden guilty of producing marijuana, a Class 4 felony under A.R.S. § 13-3405.2 The jury could not reach a verdict on the remaining counts. Instead of retrial, Bearden pled guilty to attempted possession of heroin for sale, a Class 3 felony, and one count of misconduct involving weapons, a Class 4 felony. The remaining counts were dismissed. The court sentenced Bearden to concurrent prison terms of five years for attempted possession of heroin for sale, five-and-a-half years for producing marijuana, and three years for weapons misconduct. ¶9 Bearden appealed his conviction and sentence for producing marijuana, and we have jurisdiction under A.R.S. §§ 12-120.21(A)(1), 13-4031, and 13-4033(A). 1 The rifle was later found to be a paintball or pellet gun. 2 In the time since Bearden’s conviction, Arizona legalized the production of marijuana in some cases. See A.R.S. §§ 13-3405(A), 36-2852(A). 3 STATE v. BEARDEN Decision of the Court DISCUSSION ¶10 “We review the denial of a motion to suppress for an abuse of discretion” and consider only the evidence presented at the suppression hearing, viewing it in the light most favorable to sustaining the court’s ruling. State v. Manuel, 229 Ariz. 1, 4, ¶ 11 (2011). In doing so, we review de novo the court’s ultimate legal conclusion that the search complied with the Fourth Amendment. State v. Jean, 243 Ariz. 331, 334, ¶ 9 (2018). ¶11 Bearden contends the court erred by denying his motion to suppress, arguing that the emergency aid exception to the warrant requirement does not apply. The Fourth Amendment to the United States Constitution and Article 2, Section 8 of the Arizona Constitution protect against unreasonable searches and seizures. Warrantless searches and seizures inside a home are presumptively unreasonable. Brigham City v. Stuart, 547 U.S. 398, 403 (2006). But under exigent circumstances, a warrantless search may be justified. Mincey v. Arizona, 437 U.S. 385, 393–94 (1978). The emergency aid exception allows for a warrantless search if “(1) police have reasonable grounds to believe that there is an emergency that requires their immediate assistance to protect life or property and (2) there is a reasonable basis to associate the emergency with the place to be searched.” State v. Inzunza, 234 Ariz. 78, 82, ¶ 12 (App. 2014). ¶12 Bearden argues that the first element is not met here because an anonymous 9-1-1 call “with no other evidence” does not provide police with reasonable grounds to believe there is an ongoing emergency. But in a similar case, State v. Bennett, 237 Ariz. 356 (App. 2015), we held that the emergency aid exception applied. ¶13 In Bennett, police received a 9-1-1 “hang up” call traced to a specific address. 237 Ariz. at 357, ¶ 2. When the deputies arrived, they knocked on the front door, but no one responded. Id. at 357–58, ¶ 3. The deputies proceeded past an unlocked gate and eventually noticed marijuana plants inside a window and in the yard. Id. at 358, ¶ 3. The court denied the defendant’s motion to suppress the evidence. We affirmed because there was “more than only a 911 hang-up call” linked to the address to justify a reasonable belief that there was an emergency. Id. at 358–59, ¶¶ 6, 11. We noted that the deputies knocked but heard no answer, leaving them “unable to verify that either there had never been an emergency or the emergency had passed.” Id. at 359, ¶ 11. ¶14 Bearden first argues that Bennett should not control because it was wrongly decided. He contends that Bennett permits officers to conduct 4 STATE v. BEARDEN Decision of the Court warrantless searches until they verify that no emergency exists. And he asserts this contradicts the rule that police “must gather evidence” to support their belief that there is an ongoing emergency because “[t]he absence of proof that no one is in danger is not the same as positive proof that someone is at risk of serious harm.” To support this assertion, Bearden cites cases in which the emergency aid exception was based on more than just a 9-1-1 call. But he ultimately cites no case that requires officers to “gather evidence.” ¶15 Police only need “reasonable grounds” to support the belief that an emergency exists. Inzunza, 234 Ariz. at 82, ¶ 12. The original 9-1-1 call from the address with someone crying for help gave the deputies reasonable grounds to believe there was an ongoing emergency at the location. See Bennett, 237 Ariz. at 359, ¶ 11. ¶16 Bearden also argues that Bennett is distinguishable. He relies only on the fact that the deputies in Bennett knocked on the front door before proceeding, unlike the deputies here. But Bennett does not require police to knock before investigating a 9-1-1 hang-up call. The knocking “gave the deputies additional objective information that the emergency that had first brought them to the address had not abated.” Bennett, 237 Ariz. at 359, ¶ 11. Here, the deputies were informed that a 9-1-1 call came from the address and that the caller had said, “Help, help, help.” They saw no one out front or over the wall when they arrived. As in Bennett, the 9-1-1 call gave the deputies reason to believe there was an emergency at the specific location. And like the deputies in Bennett who knocked but heard no answer, the deputies here looked for someone needing help but were still “unable to verify that either there had never been an emergency or the emergency had passed.” See id. The deputies were justified in entering the property without a warrant because they reasonably believed that someone inside needed emergency aid. CONCLUSION ¶17 We affirm. AMY M. WOOD • Clerk of the Court FILED: JT 5	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488624/	IN THE ARIZONA COURT OF APPEALS DIVISION ONE VINCENT MCCAW; CARLY MCCAW; ANDREW MCCAW, Plaintiffs/Appellants, v. ARIZONA SNOWBOWL RESORT, Defendant/Appellee. No. 1 CA-CV 21-0585 FILED 11-22-2022 Appeal from the Superior Court in Coconino County No. S0300CV201800634 The Honorable Dan R. Slayton, Judge VACATED AND REMANDED COUNSEL Fuller Law Group PC, San Diego, CA By Craig D. Fuller Counsel for Plaintiffs/Appellants Jones Skelton & Hochuli, Phoenix By Jack Klecan, Kristin W. Basha, Eileen Dennis GilBride, Elizabeth B.N. Garcia, Co-Counsel for Defendant/Appellee McClaugherty and Silver PC, Santa Fe, NM By Joe L. McClaugherty, admitted pro hac vice Co-Counsel for Defendant/Appellee MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court OPINION Judge Jennifer B. Campbell delivered the opinion of the Court, in which Presiding Judge Brian Y. Furuya and Judge Paul J. McMurdie joined. C A M P B E L L, Judge: ¶1 Vincent, Carly, and Andrew McCaw (the McCaws) appeal from the superior court’s ruling granting summary judgment in favor of Arizona Snowbowl Resort (Snowbowl). Because the Arizona Ski Safety Act (the Act) does not shield a ski area operator from liability for injuries arising from ski lift accidents, it does not bar the McCaws’ negligence claims. Accordingly, we vacate the superior court’s summary judgment ruling and remand for proceedings consistent with this opinion. BACKGROUND ¶2 In December 2016, Vincent and his two children, 17-year-old Andrew and 14-year-old Carly, visited Snowbowl for a day of skiing and snowboarding. While they waited to load the ski chair lift, Andrew’s snowboard crossed Carly’s skis, causing her skis to “[go] out [from] underneath her.” Unable to steady herself and sit properly, Carly’s arms caught the approaching lift chair, leaving her “in a very severe slouch” position. With the skis and snowboard still entangled and believing she “would be able to get back on” properly, Carly did not attempt to maneuver away from the chair as it proceeded five to ten feet along a cable wire before beginning its ascent. ¶3 Upon realizing Carly’s precarious position, Vincent and Andrew grabbed her arms, turned toward the ski lift operator, and yelled for him to “stop” the ski lift. As other ski lift passengers became aware of the situation, they also began shouting at the operator for help. By that time, however, the operator was attending to other skiers in the load line and could not hear the passengers’ pleas over the sound of blaring music. Andrew and Vincent tried to hold onto Carly, but as she began to slip from their grasp, they determined they would have to let her go. When their chair traveled over powdered snow, Vincent and Andrew dropped Carly, hoping the unpacked snow would provide a safe landing. Carly fell over 34 feet but “popped right up” and waved to Vincent and Andrew upon landing. 2 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court ¶4 After the ski lift incident, the McCaws resumed their normal lives and activities. However, Carly, Vincent, and Andrew began having recurring nightmares. ¶5 Alleging the ski lift incident caused them “emotional distress” and “psychiatric injuries,” the McCaws filed a negligence complaint against Snowbowl. Snowbowl answered, denying liability, and moved for summary judgment. Specifically, Snowbowl asserted that it “owed no duty” to the McCaws under the Act. Snowbowl also claimed that the McCaws failed to present evidence they sustained emotional distress “result[ing] in the kind of bodily manifestation of physical injury or illness cognizable under Arizona law.” ¶6 After oral argument on the motion, the superior court granted summary judgment in favor of Snowbowl, agreeing that the ski area operator owed no duty to the McCaws. The superior court found that the Act “comprehensively defines the duties of skiers and the duties of a ski area operator.” Construing the Act’s provisions, the court determined that “the duty to safely (1) load, (2) ride, and (3) unload a chair lift is the skier’s exclusive duty and not a duty of the ski area operator.” Without ruling on Snowbowl’s alternative argument regarding insufficient evidence of cognizable damages, the superior court dismissed the matter with prejudice.1 ¶7 Over the McCaws’ objection, the superior court awarded Snowbowl its requested costs and entered a final judgment in its favor. The McCaws timely appealed. DISCUSSION ¶8 The McCaws challenge the superior court’s summary judgment ruling, contending Snowbowl owed them a duty to monitor the ski lift and promptly intercede when the misloading occurred. Disagreeing with the superior court’s determination that the Act assigns all duties related to ski lift safety “exclusively” to skiers, the McCaws argue that the Act provides ski area operators the affirmative defenses of contributory negligence and assumption of the risk. As a corollary, and for the first time on appeal, the McCaws assert that the superior court’s ruling violated Article 18, Section 5, of the Arizona Constitution by infringing on their right 1 Contrary to Snowbowl’s assertion, the superior court did not enter a “ruling” regarding the legal sufficiency of the McCaws’ damages evidence. 3 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court to have a jury determine the existence or extent of their contributory negligence and assumption of risk. ¶9 In reviewing a grant of summary judgment, we view the facts and the reasonable inferences drawn from those facts in the light most favorable to the non-moving party and affirm “if the evidence produced in support of the defense or claim has so little probative value that no reasonable person could find for its proponent.” State Comp. Fund v. Yellow Cab Co. of Phx., 197 Ariz. 120, 122, ¶ 5 (App. 1999). We review de novo the superior court’s application of the law. Id.; see also Ariz. R. Civ. P. 56(a) (“The court shall grant summary judgment if the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law.”). ¶10 “To establish a claim for negligence, a plaintiff must prove four elements: (1) a duty requiring the defendant to conform to a certain standard of care; (2) a breach by the defendant of that standard; (3) a causal connection between the defendant’s conduct and the resulting injury; and (4) actual damages.” Gipson v. Kasey, 214 Ariz. 141, 143, ¶ 9 (2007). “Whether the defendant owes the plaintiff a duty of care is a threshold issue[,]” subject to our de novo review. Id. at ¶¶ 9, 11; Guerra v. State, 237 Ariz. 183, 185, ¶ 7 (2015). To survive a motion for summary judgment, the plaintiff must show a duty exists; “absent some duty, an action for negligence cannot be maintained.” Quiroz v. ALCOA Inc., 243 Ariz. 560, 563, ¶ 2 (2018); Gipson, 214 Ariz. at 143, ¶ 11. ¶11 A duty is an “obligation, recognized by law, which requires the defendant to conform to a particular standard of conduct in order to protect others against unreasonable risks of harm.” Gipson, 214 Ariz. at 143, ¶ 10 (quotation and citation omitted). “The existence of a duty of care is a distinct issue from whether the standard of care has been met in a particular case.” Id.; Markowitz v. Ariz. Parks Bd., 146 Ariz. 352, 355 (1985) (noting the existence of a duty must not “be confused with details of the standard of conduct” required to satisfy the duty); see also Stephens v. Bashas’ Inc., 186 Ariz. 427, 431 (App. 1996) (explaining that the existence of a duty must be determined “on the basis of the parties’ relationship, not on the details of their conduct”). ¶12 “As a legal matter, the issue of duty involves generalizations about categories of cases.” Gipson, 214 Ariz. at 143, ¶ 10. “Thus, a conclusion that no duty exists is equivalent to a rule that, for certain categories of cases, defendants may not be held accountable for damages they carelessly cause, no matter how unreasonable their conduct.” Id. at 143-44, ¶ 11. 4 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court ¶13 “Duties of care may arise from special relationships based on contract, family relations, or conduct undertaken by the defendant,” as well as from public policy considerations. Id. at 145, ¶¶ 18, 23. “Foreseeability of harm is not a relevant consideration in determining the threshold legal issue of whether a duty exists, nor are case-specific facts.” Guerra, 237 Ariz. at 185, ¶ 8; see also Quiroz, 243 Ariz. at 563, ¶ 2; Gipson, 214 Ariz. at 144, ¶ 15. ¶14 In this case, the McCaws assert that Snowbowl owed them a duty of care based on their special relationship and status as Snowbowl’s business invitees. “A business visitor is a person who is invited to enter or remain on land for a purpose directly or indirectly connected with business dealings with the possessor of the land.” Nicoletti v. Westcor, Inc., 131 Ariz. 140, 143 (1982) (internal quotations and citations omitted). Under the common law, a business owner has a duty to both maintain its premises in a reasonably safe condition and conduct its business in a reasonably safe manner to avoid causing injury to invitees. Stephens, 186 Ariz. at 430-31; see also Restatement (Second) of Torts § 343 cmt. b (1965) (stating that “an invitee enters [land] upon an implied representation or assurance that [it] has been prepared and made ready and safe for his reception”). ¶15 It is undisputed that the McCaws were Snowbowl’s business invitees at the time of the ski lift incident. The question is whether the Act abrogates common-law negligence principles, relieving ski area operators of a duty of care they would otherwise owe to ski lift passengers. ¶16 “When interpreting a statute, our primary goal is to give effect to the legislature’s intent.” Wilks v. Manobianco, 237 Ariz. 443, 446, ¶ 8 (2015) (quotation and citation omitted). To derive that intent, we consider the “statutory language in view of the entire text, considering the context and related statutes on the same subject.” Nicaise v. Sundaram, 245 Ariz. 566, 568, ¶ 11 (2019). “If the language is clear and unambiguous,” we follow the text as written and “need not resort to other methods of statutory construction.” Indus. Comm’n of Ariz. v. Old Republic Ins. Co., 223 Ariz. 75, 77, ¶ 7 (App. 2009). Only if a statute is ambiguous will we examine “the statute’s history, context, consequences, and purpose.” Wilks, 237 Ariz. at 446, ¶ 8. When statutes relate to the same subject or general purpose, they “should be read in connection with, or should be construed with other related statutes, as though they constituted one law.” Pinal Vista Props., L.L.C. v. Turnbull, 208 Ariz. 188, 190, ¶ 10 (App. 2004) (quotation and citation omitted). “Further, each word or phrase of a statute must be given meaning so that no part is rendered void, superfluous, contradictory or insignificant.” Id. 5 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court ¶17 “If the legislature seeks to preempt a cause of action[,] . . . the law’s text or at least the legislative record should say so explicitly.” Orca Commc’ns Unlimited, LLC v. Noder, 236 Ariz. 180, 182, ¶ 10 (2014) (quotation and citation omitted). “Absent a clear manifestation of legislative intent to displace a common-law cause of action, we interpret statutes with every intendment in favor of consistency with the common law.” Id. (quotation and citation omitted); see also A.R.S. § 1-201 (“Adoption of common law; exceptions”). To be clear, “it is not the function of the courts to rewrite statutes,” and we will not “interpret a statute in favor of denial or preemption of tort claims - even those that are not or may not be constitutionally protected - if there is any reasonable doubt about the legislature’s intent.” Id. at ¶¶ 10-11 (quotations and citations omitted). ¶18 In 1997, the legislature enacted the Act, A.R.S. §§ 5-701 through -707, which regulates ski areas and delineates the responsibilities of both operators and skiers. Section 5-702 requires ski area operators to “prominently display signs” outlining “pertinent information for the protection and instruction” of ski lift passengers. A.R.S. § 5-702(A), (B). As relevant here, ski area operators must post a sign at the loading point of each ski lift admonishing “any person not familiar with the operation” of the ski lift to “ask ski area personnel for assistance and instruction.” A.R.S. § 5-702(B)(1) (emphasis added). In addition, ski area operators must place a sign on the interior of each ski lift chair “that gives instructions for procedures in the case of emergencies.” A.R.S. § 5-702(B)(3) (emphasis added). Similarly, A.R.S. § 5-703 requires ski area operators to display signs containing “pertinent information for the protection and instruction of skiers.” Among the required postings, ski area operators must display signs indicating the difficulty level of each slope and trail. A.R.S. § 5-703(B), (C). Ski area operators must also clearly mark the ski area boundaries and either place a warning sign or rope off closed areas. A.R.S. § 5-703(D), (F). Apart from posting signs at designated areas, ski area operators must maintain certain equipment, A.R.S. § 5-704, and mark all ski lift tickets and passes with the following admonition: Warning: Under Arizona law, a skier accepts the risk of any injury to person or property resulting from any of the inherent dangers and risks of skiing, including changing weather conditions, existing and changing snow surface conditions, surface or subsurface conditions, whether marked or unmarked, collisions with natural or man-made objects, whether marked or unmarked and the failure of skiers to ski within their own abilities. 6 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court A.R.S. § 5-703(G). This mandatory warning derives from A.R.S. § 5-701(5)’s definition of “[i]nherent dangers and risks of skiing”: [T]hose dangers or conditions that are an integral part of the sport of skiing, excluding acts of ordinary or gross negligence, or reckless or intentional conduct on the part of the ski area operator. Inherent dangers and risks of skiing include: (a) Changing weather conditions. (b) Existing and changing snow surface conditions, such as ice, hard pack, powder, packed powder, wind pack, corn, crust, slush, cut-up and machine-made snow. (c) Surface or subsurface conditions, whether marked or unmarked, such as bare spots, forest growth, rocks, stumps, streambeds, trees or other natural objects. (d) Impacts with lift towers, signs, posts, fences or other enclosures, hydrants, water pipes or other man-made structures and their components, whether marked or unmarked. (e) Variations in steepness or terrain, including roads, catwalks and other terrain modifications, whether natural or as a result of slope design, snowmaking or grooming operations. (f) Collisions with other skiers. (g) The failure of skiers to ski within their own abilities. (Emphasis added.) ¶19 In turn, A.R.S. § 5-705 outlines the “duties of a skier” for purposes of “any civil action brought by a skier against a ski area operator.” First and foremost, A.R.S. § 5-705(1) provides that “[a] skier expressly accepts the total risk of and all legal responsibility for injury to person or property resulting from any of the inherent dangers and risks of skiing.” (Emphasis added.) Specific to this appeal, subsection (2) states: “Before using a chair lift . . . a skier shall have the knowledge and ability to safely load, ride and unload from the device,” and subsection (5) states: “A skier shall heed all posted information, signs and other warnings and shall refrain from acting in a manner that may cause or contribute to the injury of the skier or other 7 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court persons or property.” A.R.S. § 5-705(2), (5). The remaining enumerated duties pertain to skiers’ conduct on slopes and trails. A.R.S. § 5-702(3), (4), (6)-(12). ¶20 Reading these related provisions together, the legislature adopted an analytical framework under which skiers assume all legal responsibility for injuries arising out of the inherent dangers of skiing while ski area operators retain common-law liability for both ordinary and gross negligence. As part of this framework, the legislature also imposed duties on ski area operators and skiers. Sections 5-702 to -704 impose certain posting and equipment maintenance duties on ski area operators, the breach of which constitutes negligence per se. Likewise, A.R.S. § 5-705 imposes certain responsibilities on skiers, the violation of which constitutes a defense to a civil action. This reading is consistent with the plain language of the Act. ¶21 While no previous Arizona case has interpreted the Act, courts in numerous other jurisdictions have construed similar ski safety acts enacted by their legislatures. Although not controlling, we find the two-tier assumption of risk analysis conceptualized in many of these out-of-state cases persuasive. ¶22 Under the first tier, or “primary assumption of risk,” a ski area operator owes no duty to a skier as a matter of law, and a negligence action cannot stand. Van Dyke v. S.K.I. Ltd., 79 Cal. Rptr. 2d 775, 778 (Cal. Ct. App. 1998); see also Lopez v. Ski Apache Resort, 836 P.2d 648, 653 (N.M. Ct. App. 1992) (“[P]rimary assumption of the risk is an alternative expression for the proposition that the defendant . . . owed no duty to the plaintiff.”). The primary assumption of the risk principle applies only when the plaintiff has engaged in a sport, or other activity regarded as dangerous and “the injury suffered arises from an inherent risk in the activity.” Van Dyke, 79 Cal. Rptr. 2d at 778 (emphasis added); see also Jagger v. Mohawk Mountain Ski Area, Inc., 849 A.2d 813, 828 (Conn. 2004) (“[F]or inherent hazards, ski area operators owe skiers no duty of care and skiers assume the risk of those hazards in the primary sense.”); Murray v. Great Gorge Resort, Inc., 823 A.2d 101, 106 (N.J. Super. Ct. Law Div. 2003) (“In the skiing context, an inherent risk is one that cannot be removed through the exercise of due care if the sport is to be enjoyed.” (citation omitted)); Horvath v. Ish, 979 N.E.2d 1246, 1251 (Ohio 2012) (“To be covered under the [primary-assumption-of-the-risk] doctrine, the risk must be one that is so inherent to the sport or activity that it cannot be eliminated.” (citation omitted)). Determining what constitutes an “inherent risk” presents a legal question for the court. Van Dyke, 79 Cal. Rptr. 2d at 778. 8 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court ¶23 In contrast, under the secondary assumption of the risk tier, both the ski area operator and the skier have reciprocal responsibilities. See Horvath, 979 N.E.2d at 1251 (determining the duties of operators and skiers “are reciprocal,” with “skiers ow[ing] ski-area operators certain enumerated responsibilities”); see also Jagger, 849 A.2d at 828 (“For those hazards which are not an innate part of the sport of skiing, or over which an operator can act reasonably to eliminate or minimize the potential for harm, operators owe skiers a duty of reasonable care.”). Whether the parties breached their respective duties of care, and the comparative negligence of the parties, if any, present questions of fact for a jury. See Jagger, 849 A.2d at 829. ¶24 Applied to the Act, the primary assumption of risk tier governs any injury arising from the “inherent dangers and risks of skiing,” as statutorily defined. A.R.S. §§ 5-705(1), -701(5). Because a ski area operator owes no duty to eliminate or guard against risks inherent to skiing, it is only liable for a plaintiff’s injuries arising out of the dangers inherent to skiing if it breached its posting and equipment requirements as delineated in A.R.S. §§ 5-702 through -704, thereby contributing to the injuries sustained. “This is a rational solution for limiting ski area operators’ liability and promoting safety.” Grieb v. Alpine Valley Ski Area, Inc., 400 N.W.2d 653, 656 (Mich. Ct. App. 1986); see also Gipson, 214 Ariz. at 146, ¶ 29 (“When a court or legislature adopts a no-duty rule, it generally does so based on concerns that potential liability would chill socially desirable conduct or otherwise have adverse effects.”). ¶25 When an injury does not arise out of a risk inherent to skiing, common-law negligence principles apply, including a duty of care owed to business invitees. See Horvath, 979 N.E.2d at 1251. Because an operational failure with a ski lift is not an “inherent risk” of skiing, as that term is statutorily defined, the Act does not immunize a ski area operator from liability for ski lift negligence. See Pietruska v. Craigmeur Ski Area, 614 A.2d 639, 641 (N.J. Super. Ct. Law Div. 1992) (“Improper operation of a ski lift is not an inherent risk of skiing since, with due care, it can be eliminated. While the [ski safety act] imposes certain duties on a skier who uses a lift, it does not identify proper usage thereof as an inherent risk.”). This, too, is a rational solution because, unlike the slopes and trails, where a skier has “freedom of movement and choice,” a skier has no control over the movement of a ski lift. See Mannhard v. Clear Creek Skiing Corp., 682 P.2d 64, 66 (Colo. Ct. App. 1983). ¶26 In sum, the Act provides a liability framework that generally maintains common-law negligence principles while immunizing ski area 9 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court operators from lawsuits for injuries arising from the inherent risks of skiing. By its clear terms, the Act imposes a duty on skiers to have the knowledge and ability to safely load, ride, and unload from a ski lift, but it does not identify passage on a ski lift as an inherent risk of skiing. Indeed, other provisions in the Act demonstrate that a ski area operator owes a duty of care to ski lift passengers. For example, A.R.S. § 5-702(B)(1) requires ski area operators to assist inexperienced passengers in loading ski lifts, and A.R.S. § 5-702(B)(3) requires ski lift operators to have predetermined emergency procedures in place in the event of a ski lift mishap. While the Act charges a ski lift passenger with a duty of care to safely ride a ski lift,2 it does not relieve a ski area operator of the common-law duty to maintain and operate ski lifts with care for its business invitees. Had the legislature intended to foreclose a passenger from bringing a negligence claim against a ski area operator for an injury arising out of passage on a ski lift, it was required to do so by expressly abrogating the common law and including passage on a ski lift within the enumerated inherent risks of skiing. Young v. Beck, 227 Ariz. 1, 4, ¶ 13 (2011) (“We generally do not find that a statute changes common law unless the legislature clearly and plainly manifests an intent to have the statute do so.” (cleaned up)). Absent express preemption language, we will not construe the Act as barring common-law negligence claims. See Bayer v. Crested Butte Mountain Resort, Inc., 960 P.2d 70, 72 (Colo. 1998) (“A ski lift operator must exercise the highest degree of care commensurate with the lift’s practical operation . . . .”); D’Amico v. Great Am. Recreation, Inc., 627 A.2d 1164, 1166-67 (N.J. Super. Ct. Law Div. 1992) (concluding ski lift operators “should be held to the highest standard of care” because a “skier has no ability to stop the cable from moving” and cannot “exit the chair once it has begun its ascent”). ¶27 Having determined that ski area operators owe a duty of care to maintain and operate ski lifts safely and that passengers owe a duty of care to safely board, ride, and disembark ski lifts, whether Snowbowl or the McCaws, or both, breached their respective duties presents a question of 2 The McCaws posit that A.R.S. § 5-705(2) requires ski lift passengers only to possess the requisite knowledge to safely ride a ski lift, without requiring them to conform to that knowledge for both their protection and the safety of others. Stated differently, the McCaws argue that ski lift passengers have no duty to safely ride ski lifts under the Act. We reject this construction as nonsensical. See Walgreen Ariz. Drug Co. v. Ariz. Dep’t of Revenue, 209 Ariz. 71, 73, ¶ 12 (App. 2004) (explaining courts “interpret statutes to give them a fair and sensible meaning and to avoid absurd results”). 10 MCCAW, et al. v. ARIZONA SNOWBOWL Opinion of the Court fact.3 See Wilks, 237 Ariz. at 447, ¶ 15. Therefore, the superior court erred by granting summary judgment in Snowbowl’s favor on the basis that it owed no duty as a matter of law.4 CONCLUSION ¶28 For the foregoing reasons, we vacate the superior court’s summary judgment ruling and award of costs and remand for proceedings consistent with this opinion. In their briefing, the McCaws requested their attorneys’ fees incurred on appeal, failing to cite any supporting legal authority, but withdrew their request at oral argument. We award the McCaws their costs incurred on appeal, conditioned upon compliance with ARCAP 21. AMY M. WOOD • Clerk of the Court FILED: JT 3 In this case, the extent of the plaintiffs’ contributory negligence, if any, must be determined individually. 4 Given our resolution of the duty issue, we need not address the McCaws’ constitutional claim. 11	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488626/	COURT OF CHANCERY OF THE STATE OF DELAWARE PAUL A. FIORAVANTI, JR. LEONARD L. WILLIAMS JUSTICE CENTER VICE CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734 November 22, 2022 John G. Harris, Esquire Stephen C. Norman, Esquire David B. Anthony, Esquire Jaclyn C. Levy, Esquire Berger Harris LLP Potter Anderson & Corroon LLP 1105 N. Market Street, Suite 1100 Hercules Plaza Wilmington, DE 19801 1313 N. Market Street, 6th Floor Wilmington, DE 19801 Kevin G. Abrams, Esquire J. Peter Shindel, Jr., Esquire Michael P. Kelly, Esquire April M. Ferraro, Esquire Sarah E. Delia, Esquire Abrams & Bayliss LLP McCarter & English LLP 20 Montchanin Road, Suite 200 405 N. King Street, 8th Floor Wilmington, DE 19807 Wilmington, DE 19801 Martin S. Lessner, Esquire Kurt M. Heyman, Esquire Daniel M. Kirshenbaum, Esquire Aaron M. Nelson, Esquire M. Paige Valeski, Esquire Heyman Enerio Gattuso & Hirzel LLP Young Conaway Stargatt & Taylor, LLP 300 Delaware Avenue, Suite 200 Rodney Square Wilmington, DE 19801 1000 N. King Street Wilmington, DE 19801 Re: Bocock et al. v. Innovate Corp., Inc. et al. C.A. No. 2021-0224-PAF Dear Counsel: Plaintiffs have moved pursuant to Court of Chancery Rule 59(f) for reargument (the “Motion”)1 of the court’s October 28, 2022 memorandum opinion 1 Dkt. 63. Bocock et al. v. Innovate Corp., Inc. et al. C.A. No. 2021-0224-PAF November 22, 2022 Page 2 (the “Opinion”).2 The Opinion granted in part and denied in part the Defendants’ motions to dismiss Plaintiffs’ amended verified complaint (the “Complaint”).3 The Motion seeks reargument and reconsideration of the court’s dismissal of Plaintiffs’ claim that the Innovate Defendants misappropriated DTV America’s DTV Cast technology. The Opinion concluded that this claim was time-barred.4 In dismissing the DTV Cast claim as time-barred, the court relied on the following allegations of the Complaint: Misappropriating the DTV Cast Technology and using it as its “hub” for an economically feasible, fully integrated network of LPTV stations located anywhere in the United States made it possible for the HC2 Entities to go on a $150,000,000 acquisition spree to purchase stations, starting in November 2017. Many of the acquisitions were originally identified by DTV America. Yet, none of those acquisitions were made for the benefit of DTV America. In fact, DTV America did not acquire one company or subsidiary following the November 2017 takeover by the HC2 Entities.5 In the Opinion, the court concluded that the only reasonable reading of these allegations is that the misappropriation of DTV Cast occurred outside the three-year presumptive limitations period because the Complaint alleges that the 2 Dkt. 62 (“Opinion”). Unless otherwise noted, capitalized terms have the same meaning ascribed to them in the Opinion. 3 Dkt. 30. 4 Op. at 37–38. 5 Compl. ¶ 75 (emphasis added). Bocock et al. v. Innovate Corp., Inc. et al. C.A. No. 2021-0224-PAF November 22, 2022 Page 3 misappropriation of DTV Cast made it possible for the acquisition spree to occur “starting in November 2017.” The Motion argues that the court misapprehended the facts and misapplied the plaintiff-friendly standard governing a motion to dismiss. Mot. ¶¶ 8–12. A party seeking reargument “bears a heavy burden.” Neurvana Med., LLC v. Balt USA, LLC, 2019 WL 5092894, at 1 (Del. Ch. Oct. 10, 2019). “The Court will deny a motion for reargument ‘unless the Court has overlooked a decision or principle of law that would have a controlling effect or the Court has misapprehended the law or the facts so that the outcome of the decision would be affected.’” Nguyen v. View, Inc., 2017 WL 3169051, at 2 (Del. Ch. July 26, 2017) (quoting Stein v. Orloff, 1985 WL 21136, at 2 (Del. Ch. Sept. 26, 1985)). A motion for reargument “may not be used to relitigate matters already fully litigated or to present arguments or evidence that could have been presented before the court entered the order from which reargument is sought.” Standard Gen. Master Fund L.P. v. Majeske, 2018 WL 6505987, at 1 (Del. Ch. Dec. 11, 2018). “Where the motion merely rehashes arguments already made by the parties and considered by the Court when reaching the decision from which reargument is sought, the motion must be denied.” Wong v. USES Hldg. Corp., 2016 WL 1436594, at 1 (Del. Ch. Apr. 5, 2016). Bocock et al. v. Innovate Corp., Inc. et al. C.A. No. 2021-0224-PAF November 22, 2022 Page 4 Plaintiffs argue that the court misapprehended the fact that the acquisition spree spanned the period from June 2017 through December 2020, citing paragraph 34 of the Complaint. The Complaint and the Plaintiffs’ answering brief did not attempt to link paragraphs 34 and 75, and the court did not misapprehend the facts. The Complaint alleged that the acquisition spree, which was made possible by the Innovate Defendants’ misappropriation of DTV Cast, started in November 2017. The fact that the alleged acquisition spree continued after November 2017 does not alter the conclusion that the only reasonable reading of the Complaint is that the misappropriation first occurred at or before November 2017. The Plaintiffs had every opportunity to make this argument during the briefing on the motions to dismiss but failed to do so. To be sure, the Innovate Defendants’ opening brief in support of their motion to dismiss specifically highlighted the allegations in paragraph 75 and made the same argument that the court accepted in granting the motion to dismiss the DTV Cast claim.6 The Plaintiffs never addressed the Defendants’ argument in their answering brief or at oral argument. Indeed, the 6 HC2 Defs.’ Opening Br. 40 (“Thus, the Complaint concedes that Defendants purportedly misappropriated DTV’s technology and intellectual property before the ‘acquisition spree’ that ‘start[ed] in November 2017.’”). Bocock et al. v. Innovate Corp., Inc. et al. C.A. No. 2021-0224-PAF November 22, 2022 Page 5 Innovate Defendants noted in their reply brief that the Plaintiffs had failed to respond to this argument.7 Plaintiffs argue in the Motion that each of the alleged unlawful acquisitions was itself a distinct misappropriation of the DTV Cast technology. In other words, they seek to avoid the statute of limitations by contending that the misappropriation of DTV Cast was a continuing wrong that recurred with each acquisition during the buying spree. Mot. ¶¶ 12–13. This argument is improperly raised for the first time in the Motion. Plaintiffs’ Complaint did not allege and their answering brief did not argue that the Innovate Defendants’ alleged misappropriation of DTV Cast constituted a continuing wrong. Plaintiffs acknowledged as much at oral argument.8 7 HC2 Defs.’ Reply Br. 27. 8 When the court inquired whether the continuing wrong theory had been addressed in Plaintiffs’ answering brief, Plaintiffs’ counsel responded: “I don’t know that it is. Although, I would just say that it’s – in my mind, at least, it’s an unremarkable or well- accepted doctrine that is a part of the statute of limitations analysis.” Hrg. Tr. 55 (Dkt. 56). Plaintiffs’ mere reference to a continuing wrong theory at oral argument, which was neither developed nor tied to the DTV Cast claim, is not sufficient to avoid waiver. Emerald P’rs v. Berlin, 2003 WL 21003437, at 43 (Del. Ch. Apr. 28, 2003) (“It is settled Delaware law that a party waives an argument by not including it in its brief.”), aff’d, 840 A.2d 641 (Del. 2003); Winshall v. Viacom Int’l, Inc., 55 A.3d 629, 642 (Del. Ch. 2011) (ruling that an argument raised for the first time at a hearing was “not fairly or timely presented and was waived”), aff’d, 76 A.3d 808 (Del. 2013); see Roca v. E.I. du Pont de Nemours & Co., 842 A.2d 1238, 1242 n.12 (Del. 2004) (“[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived . . . . It is not enough merely to mention a possible argument in the most Bocock et al. v. Innovate Corp., Inc. et al. C.A. No. 2021-0224-PAF November 22, 2022 Page 6 Consequently, the Plaintiffs waived any argument at the motion to dismiss stage that the misappropriation of DTV Cast constituted a continuing wrong, and they may not raise it for the first time in a motion for reargument. Parties moving for reargument are not permitted “to raise new arguments that they failed to present in a timely way.” Sunrise Ventures, LLC v. Rehoboth Canal Ventures, LLC, 2010 WL 975581, at 1 (Del. Ch. Mar. 4, 2010), aff’d, 7 A.3d 485 (Del. 2010) (TABLE); see, e.g., Strauss v. Angie’s List, Inc., 2019 WL 399910, at 7 (D. Kan. Jan. 31, 2019) (denying motion to alter or amend judgment, noting that the plaintiff “waived any argument that the continuing [wrong] theory should apply to Defendant’s affirmative defense of laches by failing to raise the argument in prior briefing”), aff’d, 951 F.3d 1263 (10th Cir. 2020). Plaintiffs also argue that the court “erred in declining to apply equitable tolling to the DTV Cast technology claims because Plaintiffs do not allege that they learned of the DTV Cast technology claims though FCC filings.”9 The court did not reject Plaintiffs’ equitable tolling argument as to the DTV Cast claim because the information was publicly available in FCC filings. Rather, the court held that skeletal way, leaving the court to do counsel’s work . . . . Judges are not expected to be mindreaders. Consequently, a litigant has an obligation to spell out its arguments squarely and distinctly, or else forever hold its peace.”) (internal citations and quotations omitted). 9 Mot. ¶ 18. Bocock et al. v. Innovate Corp., Inc. et al. C.A. No. 2021-0224-PAF November 22, 2022 Page 7 Plaintiffs failed to allege facts to satisfy their burden to support equitable tolling as to the misappropriation of DTV Cast. Op. at 32 (citing Eni Hldgs., LLC v. KBR Gp. Hldgs., LLC, 2013 WL 6186326, at *11 (Del. Ch. Nov. 27, 2013); State ex rel. Brady v. Pettinaro Enters., 870 A.2d 513, 524 (Del. Ch. 2005)). As the Opinion explained, it was Plaintiffs’ burden to offer facts to show when they “learned of the [challenged transaction] . . . ; when [Plaintiffs] had notice of facts concerning possible unfairness of the terms; and the reasonable steps [Plaintiffs] took to oversee [their] investment.” Op. at 33 (citations and internal quotations omitted). The Opinion concluded that the Plaintiffs had not satisfied any of these criteria. The Motion does not argue that the court misstated the law or that the Plaintiffs offered the necessary factual support for equitable tolling. The Complaint alleged that the misappropriation of DTV Cast occurred no later than November 2017. Thus, the alleged misappropriation claim as to DTV Cast accrued outside the analogous limitations period, and the Plaintiffs failed to establish equitable tolling. In holding that the misappropriation claim as to DTV Cast was time-barred, the court did not overlook a decision or principle of law that would have a controlling effect or misapprehend the law or the facts so that the outcome of the decision would be affected. Bocock et al. v. Innovate Corp., Inc. et al. C.A. No. 2021-0224-PAF November 22, 2022 Page 8 For the foregoing reasons, Plaintiffs’ motion for reargument is DENIED. IT IS SO ORDERED. Very truly yours, /s/ Paul A. Fioravanti, Jr. Vice Chancellor	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488632/	IN THE SUPREME COURT, STATE OF WYOMING 2022 WY 146 OCTOBER TERM, A.D. 2022 November 22, 2022 IN THE INTEREST OF: BN and DN, minor children, NP, Appellant (Respondent), S-22-0071 v. THE STATE OF WYOMING, Appellee (Petitioner). Appeal from the District Court of Albany County The Honorable Tori R.A. Kricken, Judge Representing Appellant: Melissa R. Theriault, Woodhouse Roden Ames & Brennan, LLC, Cheyenne, Wyoming. Representing Appellee: Bridget L. Hill, Attorney General; Misha Westby, Deputy Attorney General; Christina F. McCabe, Senior Assistant Attorney General; Wendy S. Ross, Senior Assistant Attorney General. Argument by Ms. Ross. Guardian ad Litem Program: Joseph Belcher, Director, and Kim Skoutary-Johnson, Chief Trial and Appellate Counsel, Wyoming Office of the Guardian ad Litem. Before FOX, C.J., KAUTZ, BOOMGAARDEN, GRAY, and FENN, JJ. An Order Allowing Withdrawal of Counsel was entered July 26, 2022. NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume. BOOMGAARDEN, Justice. [¶1] NP (Mother) appeals the juvenile court’s order changing the permanency plan for her and her two youngest children from family reunification to adoption. Mother asserts the juvenile court abused its discretion when it determined the Department of Family Services (DFS) made reasonable, but unsuccessful, efforts to reunify the family without specifically tailoring their efforts to Mother’s mental health needs. We affirm. ISSUE [¶2] Mother raises one issue on appeal, which we rephrase: Whether the juvenile court abused its discretion when it found DFS made reasonable efforts at reunification and the permanency plan for the children should be changed to adoption. FACTS Background and Proceedings [¶3] This matter involves Mother and her two children, BN and DN (born in 2015 and 2014, respectively). 1 Mother has a significant history of child endangerment across Wyoming, Colorado, and Utah, as well as a significant history of substance abuse. DFS first took BN and DN into protective custody in 2016 when Mother was arrested after fleeing from police in her vehicle with the children inside. The children have been in and out of protective custody since that time. [¶4] This case began on January 20, 2021, when police officers in Colorado received a tip about a possible child kidnapping. The officers made contact with Mother, who then allegedly shot at the officers and fled the scene in a vehicle. The officers followed in pursuit. Mother fled from Colorado into Albany County, Wyoming with both children seated in the vehicle. Mother drove at high rates of speed to elude the officers and drove into oncoming traffic to avoid tactical vehicle intervention. The officers eventually stopped Mother’s vehicle, arrested her, and took BN and DN into protective custody. The State charged Mother with numerous felonies and misdemeanors. [¶5] On January 22, 2021, the State filed a neglect petition against Mother. In addition to describing the above incident, the petition indicated Mother was subject to an active 1 Mother has two older children whose status we addressed in a companion appeal. See Int. of BP & CS, 2022 WY 128, 518 P.3d 698 (Wyo. 2022). The juvenile proceedings underlying this case involve only Mother because the father of BN and DN passed away in 2017. 1 protection order which prohibited her from contacting the children due to a DUI criminal offense in Colorado. [¶6] The juvenile court held a shelter care hearing the same day the petition was filed. Mother appeared and the court entered a denial of the allegations on her behalf. The court placed the children in DFS custody for placement in foster care. The court also ordered Mother to submit to a substance abuse and mental health evaluation; comply with the examiner’s recommendations; and comply with random urinalysis testing. The court permitted Mother to have visitation with the children by letter or telephone at the discretion of DFS and the guardian ad litem. [¶7] On March 23, 2021, Mother plead no contest to the neglect petition. The juvenile court found she neglected the children and ordered DFS to prepare a predisposition report (PDR). It also ordered Mother to undergo a substance abuse evaluation. After DFS’ referral, Mother completed an Addiction Severity Index (ASI) and then applied to an inpatient substance abuse treatment facility in Sheridan. In the context of her criminal case, the district court ordered Mother to be evaluated by the Wyoming State Hospital to assess her competency to proceed to trial. Mother was eventually admitted to the Wyoming State Hospital for inpatient psychiatric treatment. 2 [¶8] On May 12, 2021, the State filed the PDR. It contained a detailed history of Mother’s neglect of BN and DN, along with her extensive criminal history. It indicated the children had been subjected to significant neglect and abuse for most of their lives while in Mother’s care. Between 2016 and 2020, Mother’s criminal history included at least seven instances of law enforcement contacts related to child neglect, abuse, or abandonment, and one contact involving a DUI with children in the car. Mother’s criminal history also involved, among other crimes, drug possession, domestic violence, theft, and assault. [¶9] The PDR set forth Mother’s history with child protective services with BN and DN. The PDR indicated DFS took all four of Mother’s children into protective custody in November 2016 after her arrest for domestic violence and evading police in a vehicle with the children present. DFS had BN and DN placed in foster care from November 2016 through January 2018, and again from March 2018 through March 2020. Reunification was achieved in each prior case when Mother substantially completed her case plans. The PDR noted the children’s current removal from Mother was the third time in five years and they have spent the majority of their lives in DFS custody. 2 On May 13, 2021, the Wyoming State Hospital found Mother incompetent to proceed to trial in the criminal matter. In December, the district court found Mother’s competency had been restored but kept the criminal proceedings suspended for further evaluation due to Mother’s plea of not guilty by reason of mental illness or deficiency. Mother was still being held at the Wyoming State Hospital during the permanency hearing in January 2022, see infra ¶¶ 21–22. 2 [¶10] The juvenile court held a disposition hearing on May 20, 2021. In its order following the hearing, the court determined the permanency goal for the children would be family preservation with a concurrent goal of adoption. The court ordered Mother to utilize any and all programs while she was incarcerated to address substance abuse, parenting, trauma, and corrective thinking; “[f]ollow the recommendations of her ASI”; “[p]articipate in a parental capacity screening if deemed appropriate by her therapist”; and “seek individual counseling . . . as much as she is able[.]” The court further ordered Mother’s visitation with the children would be by letter and any other visitation would “be at the discretion of the [DFS], Guardian ad Litem, and in consultation with therapists of [BN and DN], and conducted in a therapeutic setting.” Reunification Efforts [¶11] DFS developed and filed the first case plan for the current juvenile proceedings related to BN and DN in March 2021. Mother’s DFS caseworker attempted to confer with Mother on the details of the case plan while she was incarcerated but she refused to cooperate. Mother did not sign the case plan. [¶12] The unsigned first case plan, filed prior to the juvenile court’s disposition order, listed family reunification as the permanency goal, with a concurrent permanency plan of adoption or guardianship. It identified several areas for Mother to focus on, such as “be[ing] free from incarceration,” “be[ing] sober and mentally stable,” and being able to “provide prudent, safe, non-harmful and reasonable parenting to her children.” It also listed tasks for her to complete to accomplish the plan’s goals. Those tasks included: • Serve and complete terms of felony and misdemeanor convictions in Wyoming and Colorado; • “Serve and complete probation revocation from Cheyenne, WY”; • “Follow terms of probation, parole, or bond conditions”; • “Recognize and address substance abuse/use”; • “Identify and begin participation in drug treatment program while incarcerated”; • “Complete drug treatment program while incarcerated”; 3 • “Enroll in after care drug treatment program, such as an IOP program as recommended by the team, therapist, or program manager”; • “Participate fully in random UAs upon release from incarceration at DFS or program discretion”; • “Receive psychiatric evaluation”; • “Receive mental health evaluation and follow recommended treatment and therapy for mental health needs”; • “Take all prescribed medications regularly”; • “Identify and accept[] responsibility for what actions have caused her children trauma by creating list with therapist”; • “Participate [in] and complete [] any parenting program, class, or workbook offered while incarcerated”; • “Complete a parenting capacity assessment with Dr. Turlington upon release and follow recommendations of such assessment”; and • “Work diligently and successfully with WRAP program upon release to establish safe and appropriate boundaries and communication with children.” [¶13] The DFS caseworker met monthly with Mother at the detention center and noted that Mother needed “significant mental health support.” The caseworker regularly encouraged Mother to get a therapist and an evaluation so she could begin to work on her mental health. Mother declined the caseworker’s suggestions saying she could not receive those services in the detention center. The caseworker stressed that DFS could connect Mother with a therapist to provide mental health support while she was at the detention center, but Mother insisted on waiting until she was at the Wyoming State Hospital to receive any mental health treatment. [¶14] DFS offered Mother several other services: the “Love and Logic” parenting workbook, “classes through parents as teachers,” and parenting books. DFS also initially gave Mother the option to have video visits with the children. Mother refused to accept these services. 4 [¶15] Following the disposition hearing, the DFS caseworker again met with Mother to update the case plan. Mother felt the case plan had several inaccuracies related to her criminal and factual background. Mother also requested DFS provide her with a Native American spiritual book on parenting, which DFS could not find. Mother did not sign the case plan. As filed with the juvenile court, the unsigned second case plan listed the same goals and tasks as the previous plan but contained handwritten notes indicating drug treatment programs were not available at the detention center, Mother’s competency evaluation would be performed at the Wyoming State Hospital, and Mother would get a parental capacity assessment only if it was recommended by a therapist. [¶16] The DFS caseworker requested Mother write letters to BN and DN, which DFS, the guardian ad litem, or the children’s therapists would review and edit before giving them to the children. Between March and June, Mother wrote two letters to BN and DN. She was discouraged when they did not write back. In June, the caseworker encouraged Mother to continue writing letters even if the children did not respond. Mother then wrote over 30 letters to BN and DN. DFS withheld about half of those letters because their content was age-inappropriate. The inappropriate letters included statements about Mother’s experience of sexual abuse, conspiratorial statements that she believed the children were being turned against her and groomed to favor adoption, and that many agencies were tracking her and the children and were dangerous. [¶17] By September, BN had been in therapy and shown positive progress, but DN’s behavior deteriorated over the summer and the children were separated after DN exhibited inappropriate sexual behavior and violence towards his sister. DFS helped obtain a psychiatric evaluation for DN and then facilitated his placement into residential treatment based on the recommendations of the evaluation. BN remained in foster care placement. [¶18] By late November, the DFS caseworker worked with Mother to prepare a third case plan. Mother had been receiving treatment at the Wyoming State Hospital and was more cooperative with DFS. The third case plan required Mother to focus on: resolving her criminal charges, providing safe parenting to her children by improving her mental health, demonstrating ongoing sobriety, and operating a vehicle safely. Mother signed the updated case plan but made several handwritten edits indicating she did not have a substance abuse problem, had not been neglectful or abusive to her children, and would not see a therapist. [¶19] Between May 2021 and January 2022, the State filed four multidisciplinary team (MDT) meeting reports prepared by DFS. The first three reports discussed significant issues with Mother’s willingness and ability to follow the case plans and noted her many refusals to cooperate with DFS. Mother refused to receive any mental health treatment, including therapy, prior to being sent to the Wyoming State Hospital. Mother was also uncooperative with DFS in releasing her treatment information once she was a patient at the Wyoming State Hospital. The reports noted Mother’s lack of understanding of her role in endangering and traumatizing her children and her refusal to take accountability. From 5 the outset, DFS and the guardian ad litem recommended the permanency plan be changed to adoption. The county attorney initially recommended DFS continue reunification efforts but later changed her permanency plan recommendation to adoption. [¶20] The State filed the fourth, and final, MDT meeting report in January 2022 prior to the permanency hearing. The report noted Mother had provided DFS access to some of her treatment information and was voluntarily working with DFS. The Wyoming State Hospital diagnosed Mother with “unspecified schizophrenic spectrum and other psychotic disorder.” The report further noted Mother had asked why the abuse and neglect case was opened, and she did not appear to comprehend the nature of the allegations against her and the impact of her alleged criminal activity on the children. The entire MDT, except Mother and her counsel, recommended changing the permanency plan to adoption. Permanency Hearing [¶21] The juvenile court held the permanency hearing in January 2022. It heard testimony from two witnesses: the DFS caseworker and Lisa Theis, the children’s foster parent. The State also introduced four exhibits, which included the three case plans and a summary of Mother’s letters to the children. Mother presented no evidence but cross-examined the State’s witnesses. The guardian ad litem also presented no evidence but cross-examined the DFS caseworker. [¶22] The caseworker testified to his efforts to engage Mother in the services offered by DFS, as discussed above. He also testified to Mother’s minimal progress and repeated refusals to cooperate, along with Mother’s struggles with mental health and substance abuse. The caseworker stated that after learning about Mother’s mental health diagnosis and looking back on the case, he did not think he “would have done a whole lot different[.]” He further testified there was no clear timeline when Mother would be released from her psychiatric placement or from incarceration, as Mother was facing felony and misdemeanor criminal proceedings in both Wyoming and Colorado. He stated that Mother could not provide a consistent stable home environment to the children and that the children on multiple occasions expressed their desire to be adopted. For these reasons, the caseworker opined adoption was in the children’s best interest. [¶23] Ms. Theis testified to her interactions with the children while in her care. She testified the children were extremely difficult at first and displayed behaviors indicating past trauma such as fear for their safety and food insecurity. She stated both children often told her they did not want to live with Mother again. Ms. Theis also testified about the progress both children made while in her care. [¶24] At the close of the hearing, the State argued DFS had made reasonable, but unsuccessful, efforts to reunify Mother with BN and DN and therefore should be relieved of that obligation, and it was in the best interest of the children to change the permanency 6 plan to adoption. The guardian ad litem agreed with the State, arguing the children need stability, Mother continues to defer responsibility, and Mother refuses to acknowledge that her actions traumatized her children. [¶25] The juvenile court issued its order the next day. The court determined the evidence made clear DFS had made reasonable efforts at reunification without success and it was in the best interest of both children for the permanency plan to change to adoption. Mother appealed. STANDARD OF REVIEW [¶26] The juvenile court may order a permanency plan be changed from family reunification to adoption if it finds DFS “made reasonable efforts to achieve reunification without success and that reunification is no longer in the children’s best interest.” Int. of MA, 2022 WY 29, ¶ 25, 505 P.3d 179, 185 (Wyo. 2022) (quoting Int. of RR, 2021 WY 85, ¶ 97, 492 P.3d 246, 270 (Wyo. 2021)). We review the court’s reasonable efforts finding for an abuse of discretion. Id. (citing RR, ¶ 98, 492 P.3d at 270–71). “A court does not abuse its discretion unless it acts in a manner which exceeds the bounds of reason under the circumstances.” Int. of AM, 2021 WY 119, ¶ 9, 497 P.3d 914, 918 (Wyo. 2021) (quoting Int. of: AA, 2021 WY 18, ¶ 33, 479 P.3d 1252, 1261 (Wyo. 2021)). [¶27] DFS had the burden at the permanency hearing to prove it made reasonable efforts to reunify Mother with her children. MA, ¶ 26, 505 P.3d at 185 (citing AM, ¶ 15, 497 P.3d at 920). “On appeal, we must look at whether the court’s determination that [DFS] met its burden was reasonable and supported by a preponderance of the evidence.” Id. (citing RR, ¶ 98, 492 P.3d at 270–71). In reviewing the sufficiency of the evidence: [W]e defer to the juvenile court’s judgment, examining all evidence in the light most favorable to the State and resolving all evidentiary conflicts in its favor. We assume all of its evidence is true and disregard any contrary proof adduced by the parent challenging the juvenile court’s decision. Id. ¶ 27, 505 P.3d at 185–86 (quoting RR, ¶ 98, 492 P.3d at 271). DISCUSSION [¶28] In neglect cases, Wyo. Stat. Ann. § 14-3-440(a) requires DFS to “make reasonable efforts to ‘preserve and reunify the family[.]’” Id. ¶ 29, 505 P.3d at 186 (quoting Int. of SW, 2021 WY 81, ¶ 19, 491 P.3d 264, 270 (Wyo. 2021)); Wyo. Stat. Ann. § 14-3-440(a) (LexisNexis 2021). DFS’ reasonable efforts must be aimed at preventing or eliminating the need for removing the children from their home and making it possible for the children to safely return home. Wyo. Stat. Ann. § 14-3-440(a); MA, ¶ 29, 505 P.3d at 186 (citing 7 AM, ¶ 15, 497 P.3d at 920). The health and safety of the children are the paramount consideration in determining what efforts are required. Wyo. Stat. Ann. § 14-3-440(b); SW, ¶ 19, 491 P.3d at 270. As such, the “timely placement of children in accordance with a permanency plan may take precedence over family reunification, and reunification efforts inconsistent with the permanency plan may be discontinued.” SW, ¶ 19, 491 P.3d at 270 (quoting Int. of VS, 2018 WY 119, ¶ 43, 426 P.3d 14, 26 (Wyo. 2018)). [¶29] Whether DFS made reasonable efforts is “determined on a case-by-case basis.” Id. ¶ 20, 491 P.3d at 270 (quoting In re DRS, 2011 WY 128, ¶ 33, 261 P.3d 697, 706 (Wyo. 2011)). “To be considered reasonable, [DFS’] efforts must ‘have been accessible, available and appropriate.’” MA, ¶ 29, 505 P.3d at 186 (quoting SW, ¶ 20, 491 P.3d at 270); Wyo. Stat. Ann. § 14-3-440(e). DFS’ efforts must be tailored to “the unique situation of the family involved.” MA, ¶ 30, 505 P.3d at 186 (quoting SW, ¶ 20, 491 P.3d at 270). To demonstrate reasonable efforts, DFS “must make clear the reasons that necessitated the out of home placement in the first place, and then show how its efforts were directed at remedying those reasons.” Id. (citations omitted). DFS is not excused from making reasonable efforts to reunify the family just because the parent is incarcerated. See BP, ¶ 19, 518 P.3d at 703 (citing Int. of JW, 2018 WY 22, ¶ 26, 411 P.3d 422, 427 (Wyo. 2018); In re FM, 2007 WY 128, ¶¶ 12–14, 163 P.3d 844, 848 (Wyo. 2007)). Moreover, we have stated that without parental cooperation “continuing efforts to rehabilitate the parent become not only unreasonable, but contrary to a child’s best interest at some point.” RR, ¶ 99, 492 P.3d at 271 (quoting JW, ¶ 21, 411 P.3d at 426). [¶30] In its January 14, 2022 order, the juvenile court found “[Mother] has had DFS support for almost the entirety of the minor children’s lives” and “[i]t is clear from the evidence that DFS has made reasonable efforts to achieve the goal of reunification.” The court also found adoption was in the children’s best interest. Mother does not dispute the court’s best interest finding. Instead, Mother asserts the court abused its discretion when it found DFS made reasonable efforts to reunify her with BN and DN. Mother argues DFS did not make reasonable efforts because it failed to demonstrate that it considered how Mother’s mental health affected her ability to cooperate. See MA, ¶¶ 29, 36, 505 P.3d at 186, 188. For the reasons stated below, we conclude the juvenile court did not abuse its discretion when it found DFS made reasonable, but unsuccessful, efforts to reunify Mother with BN and DN. [¶31] Mother relies on MA to support her claim that DFS failed to tailor its efforts to her mental health needs. 3 Id. ¶¶ 30–31, 505 P.3d at 186. We considered Mother’s argument in her companion appeal. BP, ¶¶ 23–25, 518 P.3d at 704. In BP, we reasoned “Mother’s 3 “To the extent Mother argues that to meet its statutory requirement to provide reasonable efforts to reunify the family DFS had to obtain a diagnosis of and treatment for schizophrenia, we disagree.” BP, ¶ 23 n.9, 518 P.3d at 704 n.9. The reasonable efforts DFS is required to make do not extend to ensuring a mental health diagnosis and treatment. See Wyo. Stat. Ann. § 14-3-204(a)(iv) (stating the duty of DFS is only to “assist” the family “in resolving problems that lead to or caused the child abuse or neglect”). 8 reliance on MA [was] out of context” because the State never made “allegations of abuse or neglect against the mother,” DFS never provided “reasons for removing the children from the mother’s home,” and the consideration of how the mother’s mental health affected her ability to comply with her case requirements “was one factor which cannot be viewed in isolation.” Id. ¶ 23, 518 P.3d at 704 (citing and quoting MA, ¶¶ 32–33, 35–36, 505 P.3d at 187–90). As in the companion appeal, and in contrast to MA, Mother has been adjudicated neglectful and received extensive services over the course of several years from DFS and from child protective services in Colorado and Utah. Id. ¶ 24, 518 P.3d at 704. And again, we cannot look at Mother’s mental health issues in isolation, but we must consider them in the context of Mother’s unique circumstances, which are different from the circumstances in MA. Id. ¶ 23, 518 P.3d at 703 (citing MA, ¶ 36, 505 P.3d at 188). [¶32] For example, in this case Mother was incarcerated throughout the pendency of the juvenile proceedings. When the court conducted the permanency hearing in January 2022, Mother was a patient at the Wyoming State Hospital awaiting an evaluation for her pending criminal cases. We have recognized that, “[w]hat is reasonable must take into account Mother’s incarceration and what services are available under the circumstances.” Id. ¶ 25, 518 P.3d at 704 (citing JW, ¶ 21, 411 P.3d at 426 n.8). [¶33] Taking Mother’s incarceration into account, DFS initially met with Mother at the detention center to develop a case plan and identify her needs to help her achieve reunification. In the first and subsequent case plans, DFS not surprisingly identified Mother’s needs as being free from incarceration, being sober and mentally stable, and being able to provide prudent, safe, non-harmful and reasonable parenting to her children. [¶34] In its efforts to address Mother’s needs, DFS regularly met with Mother to discuss the progress of her case and offer services. 4 However, as the juvenile court recognized, Mother’s incarceration limited the availability of DFS’ services. Prior to Mother’s admission to the Wyoming State Hospital, DFS referred her to therapy, repeatedly informed her such mental health supports were available at the detention center, and DFS could connect her with such support. 5 Mother’s reluctance to cooperate with DFS, as discussed below, ultimately prevented DFS from providing any specific mental health services to Mother during that time. [¶35] To assist Mother with sobriety and comply with the juvenile court’s order requiring her to receive an ASI, DFS referred Mother to Peak Wellness for a substance abuse evaluation. DFS’ efforts resulted in Mother completing the ASI and applying for inpatient substance abuse treatment in Sheridan upon her release from incarceration. To assist 4 In addition to efforts discussed here, DFS was simultaneously providing services to Mother in a separate Laramie County case for her other children. See BP, ¶¶ 3, 20–21, 518 P.3d at 703. 5 DFS acknowledged in Mother’s companion case that Mother’s acceptance of counseling at the Wyoming State Hospital satisfied this requirement of her case plan. BP, ¶ 20, 518 P.3d at 703. 9 Mother with improving her parenting, DFS offered her parenting classes and books such as the “Love and Logic” workbook. [¶36] DFS also made efforts to address the health and safety of BN and DN. SW, ¶ 27, 491 P.3d at 271 (“In determining what efforts are required, the child’s health and safety are the paramount concern.” (citing Wyo. Stat. Ann. § 14-3-440(b))). DFS obtained counseling and therapy for both children, obtained a psychiatric evaluation for DN after he exhibited inappropriate sexual behaviors and violence, and helped facilitate DN’s placement into residential treatment. At Mother’s request, DFS also considered putting BN and DN into a family placement, including placement with extended family, though DFS denied the requested placements after background checks. Further, DFS facilitated and monitored Mother’s communication with BN and DN through letters. DFS also offered Mother the opportunity to have video visits with BN and DN. [¶37] Though DFS considered Mother’s incarceration when it made efforts to reunify her with BN and DN, DFS had no control over when Mother would be released and able to provide a safe and stable living environment for the children. We have explained that because the children’s health and safety are paramount, their “timely placement . . . in accordance with a permanency plan may take precedence over family reunification[.]” Id. ¶ 19, 491 P.3d at 270 (quoting VS, ¶ 43, 429 P.3d at 26). Mother had multiple pending felony criminal charges, and the Wyoming State Hospital informed DFS that Mother may be at the Hospital for up to a year before her criminal evaluation is completed. Even if the State released Mother, the caseworker testified at the permanency hearing that given Mother’s history with DFS, Mother had proven she is unable to provide a consistent stable environment for BN and DN. The juvenile court expressed a similar concern stating “it is very unclear at what point [Mother] would be free from incarceration and able to provide any shelter or structure or a safe living environment for [BN and DN].” [¶38] Further, despite DFS’ efforts, Mother was often uncooperative and refused to accept the services DFS offered. For instance, Mother refused to sign the first two case plans and, when she signed the third case plan, she made several handwritten changes challenging the plan’s stated goals and tasks. Mother also refused to see a therapist while at the detention center despite DFS’ referrals and efforts to connect her with mental health treatment. Mother also refused to sign releases to provide DFS with her treatment information from the Wyoming State Hospital. The DFS caseworker felt Mother’s refusals “thwarted” their efforts to reunify Mother with the children. This Court has stated that “[a] parent’s failure to take advantage of available services, or to meaningfully participate in a case plan developed by DFS with [her] input, is persuasive evidence that reasonable rehabilitative efforts have been unsuccessful.” JW, ¶ 21, 411 P.3d at 426 (citing SD v. Carbon Cty. Dep’t of Family Servs., 2002 WY 168, ¶ 23, 57 P.3d 1235, 1241 (Wyo. 2002)) (footnote omitted); SW, ¶ 27, 491 P.3d at 271 (stating that “[a]t some point, the rights and needs of the children rise above the rights and needs of the parent[]” (citation omitted)). 10 [¶39] Viewing the evidence in the light most favorable to the State, MA, ¶ 27, 505 P.3d at 185–86, we conclude the record adequately supports the juvenile court’s determination that DFS met its burden to prove its efforts at reunifying Mother with BN and DN were reasonable but unsuccessful. Further, considering Mother’s history with child protective services, her incarceration, DFS’ efforts to provide Mother services despite her minimal cooperation, and BN’s and DN’s paramount need for timely placement in a safe and stable home, the juvenile court could reasonably conclude the permanency plan should be changed to adoption. See BP, ¶ 25, 518 P.3d at 705. The juvenile court did not abuse its discretion. [¶40] Affirmed. 11	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488789/	Filed 11/22/22 P. v. Houseman CA3 NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ---- THE PEOPLE, C093921 Plaintiff and Respondent, (Super. Ct. No. 79293) v. RANDALL HOUSEMAN, Defendant and Appellant. Over 30 years ago, defendant Randall Houseman was convicted of two counts of murder after his accomplice killed two people during a burglary. The prosecution’s theory of murder was based on the former felony-murder rule, which provided that all participants in a burglary (and certain other crimes) are guilty of murder when one of them kills while acting in furtherance of the crime. That theory, although a valid theory at the time, is valid no more. Effective January 1, 2019, the California Legislature narrowed the felony-murder rule “to ensure that murder liability is not imposed on a person who is not the actual killer, did not act with the intent to kill, or was not a major participant in the underlying felony who acted with reckless indifference to human life.” 1 (Stats. 2018, ch. 1015, § 1, subd. (f).) It also, with the addition of Penal Code1 section 1172.6 (former § 1170.95),2 established a procedure for convicted murderers who could not be convicted under the law as amended to retroactively seek relief. In this appeal, defendant challenges the trial court’s denial of his petition to vacate his murder convictions under section 1172.6. The trial court found defendant ineligible for relief because, after reviewing the evidence produced at trial, it found the evidence showed that defendant remained liable for the murders under two still-valid theories of murder. First, it found he remained liable for the murders because the evidence showed he was a major participant in the crime and acted with reckless indifference to human life. Second, it found he remained liable for the murders because the evidence showed he aided and abetted his accomplice with the intent to kill. Challenging the trial court’s findings, defendant asks us to independently evaluate whether his murder convictions should be set aside under section 1172.6. He further asks us to correct two alleged factual misstatements in his probation report. We affirm. Because defendant’s challenge to the trial court’s findings raises predominantly factual questions—including, for instance, whether defendant was a major participant in the crime and acted with reckless indifference to human life—we review these findings for substantial evidence. Applying that deferential standard here, rather than defendant’s preferred independent standard of review, we find the evidence sufficient to support the trial court’s findings that defendant was a major participant in the crime and acted with reckless indifference to human life. Because that is enough to sustain defendant’s murder convictions, we need not address the trial court’s additional ground for finding defendant guilty of murder. We also will not address defendant’s final claim concerning the alleged 1 All further statutory references are to the Penal Code. 2 Effective June 30, 2022, section 1170.95 was renumbered section 1172.6, with no change in text. (Stats. 2022, ch. 58, § 10.) 2 factual misstatements in his probation report, which is a matter outside the scope of this appeal. BACKGROUND A. The Murders of Donna and Katherine Roberts The Roberts family—consisting of father Lawrence, mother Katherine, and daughters Donna and Michelle—lived in Sacramento in the summer of 1986. One of Donna’s best friends, Rebecca Palanuk, stayed with them for three weeks in July and August of that summer. During that summer, Palanuk briefly dated Gary Hines. At some point during the summer, Katherine learned of Hines’s criminal record and told him “not to come around.” Notwithstanding Katherine’s request, Hines continued to visit Palanuk at the Robertses’ house on two to three occasions and, during one of these visits, Donna told him about her father’s roadster, a pink fiberglass replica of a 1923 Ford Model-T roadster. On seeing the car, Hines told Palanuk, “I am going to get [that car] one way or another.” Hines afterward “rambl[ed]” to others about the roadster, claimed it was his, and said he had to collect it from “some friends.” Defendant met Hines during this summer at a time when he was living “off and on” with Steven Tabor. On September 14, 1986, both defendant and Hines spent the night at Tabor’s house. Jaime Pyle, who was then in a “love relationship” with Hines, saw Hines that evening playing with a white-handled pistol in Tabor’s living room. Although defendant could have been present at the time, Pyle could not “say for sure.” The following morning, around 8:30 a.m., a woman who defendant was dating, Cindy Wilson, drove defendant, Hines, Tabor, and Pyle to an area in south Sacramento at Hines’s direction. Hines and defendant got out two to three blocks from the Robertses’ house and the others drove off. Hines and defendant then walked to the Robertses’ house. Donna was home at the time and, around 10:00 a.m., she called a friend. According to the friend, Donna sounded “kind of scared a little bit,” though when asked, 3 she denied that anything was wrong. The friend heard at least two male voices in the background and, when the friend asked who was present, Donna mentioned “Gary,” the “one that [Palanuk] was going out with.” Shortly after, the friend said, a man told Donna to “hurry up and get off the phone.” Donna then hung up. A little over an hour later, a person walking home saw a man trying to pry the lock off the Robertses’ garage door with a crowbar. Around the same time, another person saw a man get into the Robertses’ car in the driveway and roll it down the driveway. The man then got out of the car and walked back toward the house. Also around this time, a third person saw a man getting out of the Robertses’ car that had been parked in the driveway and another man standing in the front doorway smoking a cigarette. The garage door was open at the time and a roadster was parked inside. Multiple witnesses afterward saw two males driving the Robertses’ pink roadster through Sacramento. According to one witness, the driver was “roaring up the engine” and the passenger was viewing himself in the mirror and fixing his hair. According to another witness, the guys in the car were waving at the girls on the street and “having a good time.” And according to a third witness, the passenger waved at her daughters, who were 14 and 17, and “sort of stood up in the seat” and “wav[ed] real happy.” Several witnesses testified that the men were in their late teens or 20’s. Defendant was 16 years old at the time; Hines’s age, as best we can tell, is unclear from the record, though our Supreme Court has said he was 20 at the time. (People v. Hines (1997) 15 Cal.4th 997, 1016 (Hines).) Several others identified defendant as the car’s passenger. Sometime after the ride in the roadster, Tabor’s neighbor saw Hines and defendant polishing the roadster. Defendant exclaimed, “Look at what we got.” Hines and defendant eventually drove the roadster to Wilson’s sister’s house and they, along with Pyle, stayed there overnight. Around the time Hines and defendant were riding around town in the roadster, officers found the lifeless bodies of Donna, who was 15, and Katherine. Both had been 4 shot multiple times. Donna had been shot four times—in her right eye, her left thigh, her neck, and the middle of her back. Donna had also been blindfolded, her mouth gagged with a cloth, her wrists bound with a shoestring, and her ankles bound with a telephone cord. Katherine, in turn, had been shot four times—in the head, in her left wrist, and twice in the torso. Katherine had also suffered several head abrasions and lacerations consistent with being struck with a blunt object; a broken jaw likely caused by blunt force; several stab wounds to her neck, possibly inflicted by scissors; injuries to her neck consistent with having been “grabbed . . . around the neck”; several bruises; a stab wound to her left hand; and multiple injuries to her right hand that appeared to be defensive wounds, including a stab wound, several lacerations, and broken fingers. Apart from finding the two murdered women, the officers further found an empty gun cabinet in the master bedroom, a padlock on the outside of the gun cabinet that had been forced open, a pair of damaged scissors in front of the gun cabinet, and a “locking device on the garage [that] appeared to have been pried.” B. Defendant’s Arrest and Testimony The morning after the murders, officers drove to Wilson’s sister’s home after receiving a tip about the roadster’s location. The officers found defendant talking to two people in a truck when they arrived. They tried to detain the truck when it left but the driver, Wilson, took off at high speed. Shortly after, however, Wilson crashed and was arrested. In the truck, officers found five rifles and shotguns that had been stolen from the Robertses’ home wrapped in a blanket. Pyle later testified that before the officers arrived, she saw six or eight rifles and shotguns laid out on a blanket on the floor in Wilson’s sister’s home; but at some point, defendant told her the guns would be moved and then later told her Wilson and another person had taken the guns. The officers also found the Robertses’ roadster parked behind the house, partially covered with blankets and tarps. A detective noticed that someone had tampered with the roadster’s ignition 5 and hot-wired the car. He also found that the car’s license plates had been removed and placed under a cushion in the car. Shortly after arresting Wilson, officers found both Hines and defendant in the home. The officers found Hines sitting in a chair in the living room beside a woman’s bag. The bag contained, among other things, the ignition switch from the roadster, a pocketknife, and a loaded revolver with a white handle. The officers found defendant sitting nearby on a couch and, beneath the cushion where he sat, they found a loaded handgun. On a nearby table, the officers found two notes of paper describing the guns taken from the Robertses’ house and, next to each gun, a dollar amount—for instance, “410 shotgun,” “$40.” The officers arrested Hines, but not defendant, at this time.3 Two experts later opined on several matters that tied Hines and defendant to the Robertses’ home, guns, and roadster. A handwriting expert testified that he believed defendant wrote one of the two notes describing the guns taken from the Robertses’ home. A fingerprint expert testified he found fingerprints matching Hines’s fingerprints at the Robertses’ home, on the roadster, on the note paper listing the guns, and on several items found in the woman’s bag that had been next to Hines. He further testified that he found fingerprints matching defendant’s fingerprints at the Robertses’ home, on the roadster, on the roadster’s license plate, on the note paper listing the guns, and on several items found in the woman’s bag. Following Hines’s arrest, two detectives questioned defendant about his activities the day of the murders. Defendant said he did yard work during the day, hung out with a friend afterward, and then went to Wilson’s sister’s house at night. He also claimed he 3 At Hines’s trial, one witness (a criminalist) testified that he saw blood on Hines’s pants and shoes and “blood on the shirt [defendant] was wearing when he was arrested.” (Hines, supra, 15 Cal.4th at p. 1018.) Although this same witness also testified in defendant’s trial, he never discussed these matters in his testimony. Nor, as far as we can tell, did any other witness. 6 knew nothing of any guns being at the house while he was there, said he only knew Hines for about a week, and said Hines was “act[ing] like he had something on his mind” before the officers arrived. After a detective advised him that he had reason to believe defendant knew more about “the homicide we’re investigating,” defendant maintained he knew nothing, denied being with Hines the day before, and denied seeing the roadster. After a detective told defendant that he was under arrest for double murder and that Hines had placed the blame on him, defendant changed his story. He said Hines “just asked me if I could run over to his place with him,” which resulted in them going to the Robertses’ house. According to defendant, because he had not met Donna before, he “cut a rose off the stem” and gave it to her when Hines introduced them. He then entered the house with Hines and Donna. Defendant said Hines acted like Donna was his girlfriend and, at some point, Hines and Donna were laughing about Hines jumping on top of her and tying her up. Hines asked for defendant’s help in binding Donna but, instead of helping, he went in the garage to look at the roadster. Hines then started shooting Donna. Until that time, defendant claimed, he had not known Hines was carrying a gun. After seeing Donna shot on the floor, defendant ran toward the front door just as Katherine was coming in. Defendant then sought a different exit and, as he ran, Hines “started shooting her.” Defendant eventually left the home through the front door and, after Hines started the roadster, he joined Hines in the car. After further questioning, defendant again changed his story. He said that he had known Hines for about a month, not just a week; that Hines asked him to join him for “protection” and “back-up” after getting “burnt” on a “transaction,” not to “run over to his place”; and that he knew Hines had a gun shortly before he started firing, not just afterward. Defendant added that he watched Hines tie up Donna “[a]nd all this time, I ke[pt] thinking, ‘Wait a minute, you know. He’s going to fuckin’ probably try to shoot her.’ ” He further said Hines had threatened Donna, saying, “I could shoot you right now,” and Donna responded, “Don’t threaten unless you’re going to do it.” When a 7 detective asked how Hines held the gun and bound Donna at the same time, defendant responded, “[H]e was here, in front of her with the gun. She was already in a fuckin[’] thing, like this, you know, and all he had to do was put her stomach, or whatever, against her knees, and she was just stuck in that kind of position.” When a detective further asked what he did after Hines tied up Donna, defendant said he told Hines, “[Y]ou better think.” Defendant later testified about these same events. He said he met Hines less than a week before the murders and, the day before the murders, Hines asked if he “would go with him to pick up this money this guy owed him.” Hines said they would then return to Tabor’s house, buy some drugs, and “party” with the money they obtained. Defendant agreed to join, believing Hines only wanted him to join for moral support. The following morning, Wilson drove Hines and defendant to meet “the guy” to collect the money. After she dropped them off, Wilson drove off and Hines knocked on the door of a house. Donna, defendant went on, answered the door and let them in. Defendant, “to introduce [him]self to her,” picked a rose for her and told her his name. After some time in the home, Hines told defendant he was going to tie up Donna. After defendant told him not to, Hines added that he was going to shoot her too. Defendant did not ask Hines for his reasons and, at some point, went to look at the Robertses’ roadster, which was parked in the garage. When defendant returned to the house, Hines was showing Donna his gun—the one with the white handle. Hines asked Donna if he could shoot it in the house, but she said no, and defendant then asked Hines to put the gun away because it was scaring Donna and making him nervous. Hines complied with the request. Hines again told defendant he was going to tie up Donna, and defendant again told him not to. Defendant also asked Hines for an explanation at this time, but Hines offered none. Sometime after, according to defendant, he saw Hines on the couch with Donna, attempting to tie her up. Both Hines and Donna were laughing at the time. Defendant told Hines to “think” and to untie her. Defendant then returned to the garage, and Hines 8 told him to “[g]et what they got.” But defendant said, “No, I don’t want no part of it.” Moments later, while standing in the doorway leading from the kitchen to the garage, defendant heard several gunshots and saw Hines firing one shot at Donna. Seeing no exit from the garage, defendant entered the house and sought to leave through the front door. But on seeing Katherine entering the home, he sought another exit. Defendant heard several shots as he ran. Not knowing what to do next or where to go, defendant decided to remain at the house. After Hines pulled out from the garage in the roadster, Hines called defendant and told him to get in. Defendant, although fearful of Hines, joined him in the car. After getting into the roadster, defendant continued, he saw the Robertses’ guns for the first time wrapped in a blanket. Although he acknowledged he afterward moved the guns to Wilson’s truck, he said he only did so because Wilson’s sister wanted them out of her house. And although he acknowledged the handwriting on one of the scraps of paper that listed the Robertses’ guns could have been his, he did not remember writing the list. He denied removing the license plates from the roadster, though he said he could have handled them after they were removed. He also denied putting the handgun under the couch cushion on which he sat when the officers found him. In his telling, he had been sitting on the couch for less than 30 seconds when the officers arrived. C. Defendant’s Conviction and Petition for Resentencing Following the murders, defendant was charged with two counts of first degree murder (§ 187, subd. (a)) and one count each of burglary (§ 459), robbery (§ 211), and auto theft (former § 487.3). As an enhancement for each count, the charging document also alleged that a principal was armed with a firearm. (§ 12022, subd. (a).) The jury found defendant guilty on all counts and found true the firearm allegation. The trial court afterward sentenced defendant to 25 years to life for each murder count, plus additional time for the associated armed enhancements. The court stayed the sentences on the remaining counts under section 654. Our court affirmed on appeal. 9 Over 30 years after sentencing, in 2019, defendant petitioned the trial court to have his murder convictions vacated under section 1172.6. Section 1172.6 (formerly § 1170.95) was part of a bill that “ ‘amend[ed] the felony murder rule and the natural and probable consequences doctrine, as it relates to murder, to ensure that murder liability is not imposed on a person who is not the actual killer, did not act with the intent to kill, or was not a major participant in the underlying felony who acted with reckless indifference to human life.’ [Citation.]” (People v. Lewis (2021) 11 Cal.5th 952, 959.) The bill amended several statutes defining murder (namely, §§ 188 & 189) and, more relevant here, added former section 1170.95 to “provide[] a procedure for convicted murderers who could not be convicted under the law as amended to retroactively seek relief.” (Lewis, at p. 959.) Under the procedure established in section 1172.6, if a petitioner makes a prima facie showing for entitlement to relief, the trial court must issue an order to show cause and then hold a hearing “to determine whether to vacate the murder . . . conviction and to recall the sentence and resentence the petitioner on any remaining counts in the same manner as if the petitioner had not previously been sentenced, provided that the new sentence, if any, is not greater than the initial sentence.” (§ 1172.6, subds. (c), (d)(1).) The statute adds that, at the hearing stage, “the burden of proof shall be on the prosecution to prove, beyond a reasonable doubt, that the petitioner is guilty of murder . . . under California law as amended by the changes to Section 188 or 189 made effective January 1, 2019.” (§ 1172.6, subd. (d)(3).) After defendant filed his petition for resentencing under this statute, the trial court issued an order to show cause and then held a hearing. After hearing the parties’ arguments and reviewing the trial record, the court denied defendant’s petition in a 123- page written opinion. It acknowledged that the jury must have found defendant guilty under the former felony-murder rule, a no longer valid theory of murder; but after reviewing the record, it found the evidence established his guilt under a still-valid theory 10 or murder for two independent reasons. First, it found beyond a reasonable doubt that defendant was a major participant in the crime who acted with reckless indifference to human life. Second, it found beyond a reasonable doubt that defendant “actually directly aided and abetted both murders, and acted with intent to kill with regard to each murder.” In the course of reaching these findings, the court noted defendant’s “consistent evasiveness” and changing story, found critical parts of his trial testimony not credible, and, in the end, among other things, concluded “beyond a reasonable doubt that the defendant actually assisted in tying up Donna before she was shot,” that he “stabbed Katherine after Hines shot her,” and that he “choked and assisted beating [Katherine] with a blunt instrument.” Defendant timely appealed. DISCUSSION A. Standard of Review We start with the standard of review for reviewing the trial court’s findings. According to defendant, we should independently evaluate the evidence to determine whether defendant is ineligible for resentencing. He reasons that “a reviewing court is equally capable of resolving factual disputes presented in a ‘cold record’ and the issues under review present predominantly legal questions.” According to the Attorney General, however, we should instead consider whether substantial evidence supports the trial court’s decision. We agree with the Attorney General. The questions raised here are predominantly factual—namely, whether defendant was a major participant in the crime and acted with reckless indifference to human life. (See People v. Clements (2022) 75 Cal.App.5th 276, 302 [“the question whether [the defendant] acted with reckless indifference to human life is predominantly a factual determination”].) And when an appellate court is tasked with reviewing “mixed questions of fact and law” that are “predominantly factual,” it evaluates only for substantial evidence. (People v. Gamache (2010) 48 Cal.4th 347, 385 11 [“To the extent mixed questions of fact and law are present, they are reviewed de novo if predominantly legal and for substantial evidence if predominantly factual”].) That is true even when, as in this case, the trial court’s findings are based on a paper record rather than on live testimony. Our Supreme Court’s decision in People v. Perez (2018) 4 Cal.5th 1055 (Perez) is instructive on this point. The court there considered whether a defendant was eligible for resentencing following an amendment to the Three Strikes law that both narrowed the class of third strike felonies that triggered the law’s sentencing enhancements and allowed inmates sentenced under the original Three Strikes law to seek resentencing consistent with the amended law. (Perez, at pp. 1061-1062.) Under that resentencing scheme, similar to the law here, “once an inmate has made an initial showing of eligibility for resentencing, the burden is on the prosecution to prove beyond a reasonable doubt that one of the grounds for ineligibility applies.” (Id. at p. 1062; see also § 1172.6, subd. (d)(3).) Also under that resentencing scheme, similar to the law here, when evaluating whether the prosecution has made this showing, the court may consider, among other things, evidence previously admitted at trial. (§ 1170.126, subd. (g) [broadly allowing courts to consider relevant evidence]; see also § 1172.6, subd. (d)(3) [allowing courts to consider, among other things, “evidence previously admitted at any prior hearing or trial that is admissible under current law”].) Attempting to meet its burden in Perez, the prosecution contended the defendant was statutorily ineligible for resentencing because the evidence produced at trial for his third strike offense showed he had been armed with a deadly weapon—and under the Three Strikes law, even as amended, that fact triggers the law’s sentencing enhancements. (Perez, supra, 4 Cal.5th at p. 1061; see id. at pp. 1065-1066; see also § 1170.12, subd. (c)(2)(C)(iii).) But the trial court disagreed after considering the record from the defendant’s earlier trial. (Perez, at p. 1061; see also id. at p. 1065.) Although, on review, the Supreme Court acknowledged that the trial court’s eligibility determination was based only on the record of conviction, and although it further 12 acknowledged that a reviewing court has no “advantage” over the trial court “in determining eligibility based on the record of conviction,” it still found the trial court’s finding should be reviewed only for substantial evidence. (Id. at p. 1066.) It reasoned that “the question whether a defendant was armed with a deadly weapon during his or her current offense remains a question of fact, and we see no reason to withhold the deference generally afforded to such factual findings.” (Ibid.) We find similarly here. Because the questions of whether a defendant served as a major participant in a crime and acted with reckless indifference to human life are predominantly factual questions—and indeed, are questions traditionally submitted to a jury—we similarly see no reason to withhold the deference generally afforded to such findings. (See People v. Gamache, supra, 48 Cal.4th at p. 385 [mixed questions of law and fact with predominantly factual questions are reviewed for substantial evidence]; People v. Banks (2015) 61 Cal.4th 788, 804-811 (Banks) [reviewing for substantial evidence a jury’s findings that a defendant was a major participant who acted with reckless indifference to human life].) Our decision in this respect accords with all other Courts of Appeal to have considered this issue to date. (See, e.g., People v. Richardson (2022) 79 Cal.App.5th 1085, 1090 [courts review trial court’s finding for substantial evidence]; People v. Clements, supra, 75 Cal.App.5th at p. 298 [same]; People v. Garrison (2021) 73 Cal.App.5th 735, 747 [“We review the trial court’s determination at the section 1170.95, subdivision (d)(3) hearing for substantial evidence”].) Defendant nonetheless maintains that “[t]he issue presented on review of a . . . hearing based on a cold record is a ‘predominantly legal’ question since the real issue for the reviewing court to decide is whether a determination based on facts gleaned from that record satisfies the changed legal standard of culpability now required to justify continuing to punish a petitioner for murder instead of a lesser crime.” But on that logic, Perez was wrongly decided. In that case, again, after reviewing a paper record, a trial court concluded that a defendant was eligible for resentencing following an amendment 13 to the Three Strikes law that changed the legal standard for enhanced sentencing. There too, then, under defendant’s reasoning, the “real issue” on review was whether the evidence satisfied “the changed legal standard,” which “is a ‘predominantly legal’ question.” But our Supreme Court necessarily rejected this type of logic when it found the reviewing court must only review the trial court’s decision for substantial evidence. (Perez, supra, 4 Cal.5th at p. 1066.) Again, we find this conclusion favors a similar conclusion here. Defendant also cites various cases from different legal contexts that he contends support his position, including several concerning a trial judge’s excusal of a juror (including People v. McKinnon (2011) 52 Cal.4th 610, 647), several others concerning a decision to deny parole (including In re Rosenkrantz (2002) 29 Cal.4th 616, 625), and several more concerning a claim of ineffective assistance of counsel (including In re Cudjo (1999) 20 Cal.4th 673, 688). But none of these cases suggested that the standard of review should vary depending on whether the trial court heard live testimony. A decision to deny parole to a defendant, for instance, is reviewed only for “ ‘some evidence’ ” even when the court has considered live testimony. (See In re Shaputis (2011) 53 Cal.4th 192, 209 [stating the relevant standard of review without qualification].) A trial court’s decision to excuse a juror, in turn, is reviewed under the “ ‘ “demonstrable reality” ’ ” test even when the court has considered live testimony. (People v. Peterson (2020) 10 Cal.5th 409, 472.) And a trial court’s resolution of a claim of ineffective assistance of counsel is typically subject to the independent standard of review even when the court has considered live testimony. (In re Resendiz (2001) 25 Cal.4th 230, 248 (lead opn. of Werdegar, J.) [noting that these matters generally raise “ ‘predominantly questions of law’ ”], abrogated on other grounds by Padilla v. Kentucky (2010) 559 U.S. 356; see In re Resendiz, at p. 255 (conc. & dis. opn. of Mosk, J.).) Lastly, defendant contends we should follow People v. Vivar (2021) 11 Cal.5th 510, not Perez, and subject the trial court’s decision to de novo review. But we find 14 Vivar readily distinguishable. That case involved an issue—whether “a prejudicial error . . . affected the defendant’s ability to meaningfully understand the actual or potential immigration consequences of a plea”—that our Supreme Court found “analogous” to its past immigration cases raising “predominantly questions of law.” (Id. at pp. 517, 524, italics omitted.) After considering this detail, along with “multiple factors with special relevance [t]here,” the court “embrace[d] . . . independent review in th[at] context.” (Id. at p. 527.) But unlike the court in Vivar, we are tasked with resolving predominantly factual questions. Consistent with Perez and the rule that mixed questions of law and fact that are predominantly factual are reviewed for substantial evidence, we will review the trial court’s findings for substantial evidence. B. Defendant’s Murder Convictions Having established the appropriate standard of review, we now consider whether substantial evidence supports the trial court’s findings that defendant was a major participant in the crime who acted with reckless indifference to human life. In addressing these types of issues, courts have “described the range of felony- murder participants as a spectrum. At one extreme [is] ‘the minor actor in an armed robbery, not on the scene, who neither intended to kill nor was found to have had any culpable mental state.’ [Citation.] At the other extreme [a]re actual killers and those who attempted or intended to kill.” (Banks, supra, 61 Cal.4th at p. 800.) In the former example involving the minor actor, a jury could not find the defendant was a major participant in the crime. Nor could it find the defendant acted with reckless indifference to human life. But in the latter scenario involving “those who attempted or intended to kill,” a jury could readily find both elements satisfied. (Ibid.) Defendant’s culpability lies somewhere between these two extremes. In evaluating his level of culpability, we focus on both his conduct and his mental state. To determine whether his conduct was sufficient to support the jury’s verdict, we consider whether he was a major participant in the crime. And to determine whether his mental 15 state was sufficient to support the jury’s verdict, we consider whether he acted with reckless indifference to human life. (See Banks, supra, 61 Cal.4th at p. 798.) 1. Major Participant We consider first whether defendant was a major participant in the crime. “The ultimate question pertaining to being a major participant is ‘whether the defendant’s participation “in criminal activities known to carry a grave risk of death” [citation] was sufficiently significant to be considered “major.” ’ ” (People v. Clark (2016) 63 Cal.4th 522, 611 (Clark).) In answering that question, we consider the totality of the circumstances. Relevant considerations include: “ ‘What role did the defendant have in planning the criminal enterprise that led to one or more deaths? What role did the defendant have in supplying or using lethal weapons? What awareness did the defendant have of particular dangers posed by the nature of the crime, weapons used, or past experience or conduct of the other participants? Was the defendant present at the scene of the killing, in a position to facilitate or prevent the actual murder, and did his or her own actions or inaction play a particular role in the death? What did the defendant do after lethal force was used?’ ” (Ibid.) “No one of these considerations is necessary, nor is any one of them necessarily sufficient.” (Banks, supra, 61 Cal.4th at p. 803.) Considering these several factors and viewing the record in the light most favorable to the trial court’s decision, as we must when reviewing a challenge to the sufficiency of the evidence, we find substantial evidence supports the trial court’s finding that defendant was a major participant in the crime. (See Banks, supra, 61 Cal.4th at p. 804 [“When reviewing a challenge to the sufficiency of the evidence, we ask ‘ “whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt” ’ ”].) We start with the two factors that favor defendant. First, nothing in the record shows that defendant played a role in planning the events that led to the two deaths. 16 Nothing in the record suggests, for example, that he planned the time, place, or manner of the crime. Second, also favoring defendant, nothing in the record shows that defendant played a role in supplying weapons. Although Hines was armed with a gun, nothing in the record suggests that defendant supplied this gun. Nor does anything in the record show that defendant arrived at the Robertses’ home with any weapon of his own. Both these factors, then, favor defendant. But the remaining considerations cut against defendant. First, the evidence supports a finding that defendant understood the particular dangers posed by the crime. Several facts are relevant to this topic. To start, in his statement to officers following the murders, defendant claimed he joined Hines because Hines wanted “protection” and “back-up . . . just in case something happens”—evidencing an anticipation of some danger. Second, although defendant disclaimed any knowledge of the criminal nature of Hines’s plan, his shifting explanations suggest otherwise. At first, he denied being with Hines on the day of the murders. Later, after acknowledging he joined Hines, he claimed Hines “just asked me if I could run over to his place with him.” And later still, he claimed Hines asked him to join him for “protection” and “back-up” after getting “burnt” on a “transaction.” Considering defendant’s shifting explanations, the trial court “could infer that he was lying to conceal his guilt.” (People v. Thomas (1992) 2 Cal.4th 489, 515.) Lastly, as we will cover more below, Hines informed defendant that he planned to shoot Donna shortly after they entered the Robertses’ home. Taken together, this evidence tends to show that defendant understood the particular dangers posed by the crime. Second, the evidence shows defendant was present at the scene of the murders and in a position to prevent both murders. As our Supreme Court has explained, “ ‘[p]roximity to the murder and the events leading up to it may be particularly significant where . . . the murder is a culmination or a foreseeable result of several intermediate steps, or where the participant who personally commits the murder exhibits 17 behavior tending to suggest a willingness to use lethal force. In such cases, “the defendant’s presence allows him to observe his cohorts so that it is fair to conclude that he shared in their actions and mental state. . . . [Moreover,] the defendant’s presence gives him an opportunity to act as a restraining influence on murderous cohorts. If the defendant fails to act as a restraining influence, then the defendant is arguably more at fault for the resulting murders.” ’ ” (In re Scoggins (2020) 9 Cal.5th 667, 678 (Scoggins).) In this case, defendant was present during the entire sequence of events leading up to the murders. He entered the home shortly after defendant. He heard Hines say he planned to tie up Donna and then shoot her. He heard Hines tell Donna, after tying her up, “I could shoot you right now.” And he afterward told officers, “[A]ll this time, I ke[pt] thinking, ‘Wait a minute, you know. He’s going to fuckin’ probably try to shoot her.’ ” Early on in the crime, then, defendant understood the potential for murder. Yet he remained at the house until after both Donna and Katherine had been murdered, offering no assistance to either. More than being simply present, moreover, according to the trial court’s findings, defendant affirmatively assisted Hines in binding Donna. Substantial evidence supports this finding. The record shows that Donna had been blindfolded, her mouth gagged with cloth, her wrists bound behind her back with a shoelace, and her ankles bound with a phone cord. It shows no evidence that Donna had any defensive wounds, suggesting she either acquiesced to the binding or was overpowered with little or no struggle. (See People v. Lewis (2009) 46 Cal.4th 1255, 1283 [“absence of injuries” are relevant to establish that the defendant could and did overpower the victim with “little struggle”].)4 4 In defendant’s telling, “the lack of any description of defensive wounds in the pathologist’s testimony does not constitute evidence Donna either did or did not sustain 18 And it shows that, although defendant testified that Hines managed to bind Donna single- handedly, his testimony was not credible. In defendant’s telling, Hines and Donna were laughing while Hines bound her and, although Hines asked for his assistance, he instead went to look at the roadster. But as the trial court found, defendant’s claim that Donna laughingly participated in being bound is not at all believable. The record, significantly, shows that Donna appeared scared when Hines and defendant were in her home the day of the murders. After the two arrived, Donna called a friend and sounded a little scared. But the call quickly ended after, according to the friend, a man told Donna to “hurry up and get off the phone.” The record further shows that Katherine, after learning of Hines’s criminal record, had told him not to come around her home. Considering the circumstances of Donna’s binding, defendant’s unbelievable explanation for how Hines managed to single- handedly perform the binding, and defendant’s active role in assisting Hines after the murders (which we will cover in detail next), the trial court reasonably could have concluded that defendant assisted Hines in binding Donna. (See People v. Thomas, supra, 2 Cal.4th at p. 515 [jury could infer the defendant was trying to conceal his guilt when he gave an “apparently false reason” for his actions and provided inconsistent descriptions of his activities].) Third, as alluded to above, the evidence shows defendant continued to act as a major participant in the crime after lethal force was used. Although defendant claims he attempted to flee after Hines shot Donna, the trial court reasonably could have doubted this self-serving statement—a statement that does not align with defendant’s conduct after the murders. Defendant, for example, did not flee the scene and attempt to distance defensive wounds.” We disagree. The pathologist described the wounds he found and, as defendant concedes, he did not describe defensive wounds. That is evidence of an absence of defensive wounds. (See People v. Lewis, supra, 46 Cal.4th at p. 1283 [absence of injuries in photographs was evidence of an absence of injuries].) 19 himself from Hines following the murders of Donna and Katherine. He instead, the evidence shows, remained on site, afterward joined defendant in the roadster in a ride around town, and then participated in efforts to conceal the roadster and sell the Robertses’ guns. According to an expert witness on handwriting, for instance, following the murders, defendant prepared a document that described some of the guns acquired from the Robertses’ home and, beside each gun, listed an apparent sale price. According to an expert on fingerprinting, moreover, defendant’s fingerprints appeared on the gun list and on the license plates that had been removed from the roadster—tending to show that defendant sought to conceal the unlawful taking of the roadster. And according to several witnesses who saw Hines and defendant cruising around town in the roadster following the murders, defendant appeared to be “having a good time,” “was waving real happy” to those he passed, and exclaimed to one person, “Look at what we got.” This evidence of defendant’s conduct after the use of lethal force strongly depicts him as a willing participant in the criminal enterprise, not simply a passive bystander. Considering these circumstances together, we find substantial evidence supports the finding that defendant was a major participant in the crime that led to the deaths of Donna and Katherine. And we find that true even though, as defendant points out, he was only 16 at the time of the crime. Defendant, rightly so, considers this an important detail. As the Supreme Court has found, “[c]hildren ‘generally are less mature and responsible than adults[]’ [citation]; . . . they ‘often lack the experience, perspective, and judgment to recognize and avoid choices that could be detrimental to them[]’ [citation]; [and] . . . they ‘are more vulnerable or susceptible to . . . outside pressures’ than adults.” (J.D.B. v. North Carolina (2011) 564 U.S. 261, 272.) These peculiar characteristics of children, as one court has explained, carry relevance in evaluating whether a defendant “was actually aware ‘of particular dangers posed by the nature of the crime . . . .’ ” (People v. Harris (2021) 60 Cal.App.5th 939, 960.) 20 But considering the facts of this case, we find the evidence sufficient to show that defendant, despite his youth, was still aware of the particular dangers posed here. On defendant’s own admission, he knew Hines wanted “protection” and “back-up . . . just in case something happen[ed]”—evidencing a potentially dangerous endeavor—and, shortly after entering the Robertses’ home, he knew Hines planned to shoot Donna. But despite being explicitly told of these plans to shoot Donna, the evidence tends to show that defendant proceeded to help Hines tie up Donna. And after Hines shot Donna and Katherine, the evidence shows that defendant joined Hines in a celebratory ride in the roadster, took steps to sell the guns taken from the family following the murders, and attempted to conceal the taking of the roadster. On these facts, the trial court reasonably could have concluded that, youth notwithstanding, defendant was a major participant in the crime.5 2. Reckless Indifference We consider next whether defendant acted with reckless indifference to human life. “Reckless indifference to human life has a subjective and an objective element. [Citation.] As to the subjective element, ‘[t]he defendant must be aware of and willingly involved in the violent manner in which the particular offense is committed,’ and he or she must consciously disregard ‘the significant risk of death his or her actions create.’ [Citations.] As to the objective element, ‘ “[t]he risk [of death] must be of such a nature and degree that, considering the nature and purpose of the actor’s conduct and the circumstances known to him [or her], its disregard involves a gross deviation from the 5 In finding defendant to be a major participant, the trial court further concluded that defendant stabbed Katherine when she returned home and “choked and assisted beating [her] with a blunt instrument.” But because we find the evidence discussed above sufficient to conclude that defendant was a major participant without addressing the merits of these findings, we need not address them here. 21 standard of conduct that a law-abiding person would observe in the actor’s situation.” ’ [Citation.] ‘Awareness of no more than the foreseeable risk of death inherent in any [violent felony] is insufficient’ to establish reckless indifference to human life; ‘only knowingly creating a “grave risk of death” ’ satisfies the statutory requirement.” (Scoggins, supra, 9 Cal.5th at p. 677.) To determine whether defendant had the requisite mental state, “[w]e analyze the totality of the circumstances” in a manner that largely overlaps with our major participant discussion. (Scoggins, supra, 9 Cal.5th at p. 677.) The overlap is not unusual. As our Supreme Court has explained, “ ‘[a]lthough we state these two requirements separately, they often overlap,’ ” “ ‘for the greater the defendant’s participation in the felony murder, the more likely that he acted with reckless indifference to human life.’ ” (Clark, supra, 63 Cal.4th at p. 615.) With that in mind, we turn to several considerations our Supreme Court has found particularly relevant in analyzing whether a defendant acted with reckless disregard to human life: “Did the defendant use or know that a gun would be used during the felony? How many weapons were ultimately used? Was the defendant physically present at the crime? Did he or she have the opportunity to restrain the crime or aid the victim? What was the duration of the interaction between the perpetrators of the felony and the victims? What was the defendant’s knowledge of his or her confederate’s propensity for violence or likelihood of using lethal force? What efforts did the defendant make to minimize the risks of violence during the felony?” (Scoggins, at p. 677.) As with our major participant discussion, we begin with the considerations that favor defendant. First, as covered already, nothing in the record indicates that defendant used a gun during the burglary. Second, although the duration of the crime was long, it does not, under the circumstances of this case, tend to support the conclusion that defendant exhibited reckless indifference to human life. The record suggests that defendant and Hines arrived at the Robertses’ house around 8:30 a.m. and that Hines shot 22 Donna a little after 10:00 a.m.—a long enough period for Katherine to return home and become a victim herself. But even so, this was not a case where a victim was “held at gunpoint . . . in the presence of perpetrators for prolonged periods”—the traditional circumstance understood to create “ ‘a greater window of opportunity for violence.’ ” (Clark, supra, 63 Cal.4th at p. 620.) Considering the record, Hines only appears to have revealed his criminal intent to Donna toward the end of his time with her. At the time Donna called her friend, around 10:00 a.m., Donna told her friend that Hines was in her home, and she appeared a little scared. But she never suggested he had a gun on the call, nor is it evident she even appreciated the criminal nature of Hines’s and defendant’s visit until after the call. Under these circumstances, although the duration of the burglary was substantial, we find the crime’s duration does not itself tend to support the conclusion that defendant exhibited reckless indifference to human life. (Cf. id. at pp. 620-621 [finding the same when, although the duration of a planned crime was to be substantial and involve “the prolonged detention of [several individuals],” “the period of interaction between perpetrators and victims was designed to be limited ”].) But we find the remaining considerations sufficient to show defendant acted with reckless indifference to human life. First, the record shows that Hines wanted defendant to accompany him to the Robertses’ house as “protection” and “back-up . . . just in case something happen[ed].” And, given defendant’s shifting explanations for his reasons for joining Hines, it supports the conclusion that defendant understood the criminal nature of Hines’s plan. All this evidence, as covered above, tends to show that defendant understood the criminal nature of Hines’s plan and knew executing the plan could be dangerous and require “back-up.” Second, we find significant defendant’s proximity to the murders and the events leading up to them. Defendant’s conduct was, in some sense, comparable to the defendants in Tison v. Arizona (1987) 481 U.S. 137—the case that is the source of the “major participant” and “reckless indifference” language that the California Legislature 23 initially added in section 190.2, subdivision (d) and, in time, added to section 189 too. (See Clark, supra, 63 Cal.4th at p. 616 [“Tison is the source of the language of section 190.2, subdivision (d)” and thus relevant to “the meaning of the statutory phrases derived from it”].) The defendants there, after helping their father and another escape from prison, flagged down a passing car containing a family of four with the intent of stealing their car. (Tison, at pp. 139-140.) They afterward guarded the family while their father considered next steps, including the possibility of killing the family, and then watched as their father and the other escaped prisoner, to the defendants’ surprise, murdered the family. (Id. at pp. 140-141.) Because, the California Supreme Court has said in summarizing Tison, the defendants “had ample opportunity to restrain the crime and aid the victims” but “did neither,” “the high court [found] they exhibited reckless indifference to human life.” (Scoggins, supra, 9 Cal.5th at p. 678; see Tison, at pp. 157- 158.) Considering the facts here, the trial court reasonably could have concluded the same—that is, that defendant, like the defendants in Tison, “had ample opportunity to restrain the crime and aid the victims” but “did neither.” (Scoggins, supra, 9 Cal.5th at p. 678 [discussing Tison].) In defendant’s telling, he told Hines to “think” after Hines disclosed that he would bind and then shoot Donna, to put the gun away when Hines first revealed it, not to tie up Donna, and later, to untie her. But the trial court reasonably could have found these self-serving claims not credible. Again, the trial court ultimately concluded that defendant, rather than attempt to restrain Hines as he claimed, actively assisted Hines in binding Donna. As covered above, we find substantial evidence supports this finding. Third, defendant knew Hines was likely to use lethal force shortly after he entered the Robertses’ home. As our Supreme Court has explained, a “defendant’s knowledge of factors bearing on a cohort’s likelihood of killing are significant to the analysis of reckless indifference to human life” and “may be evident before the felony or may occur 24 during the felony.” (Clark, supra, 63 Cal.4th at p. 621, italics added.) Here, defendant heard Hines say he planned to tie up Donna and then shoot her shortly after they entered the home. He heard Hines tell Donna, after tying her up, “I could shoot you right now.” And he afterward told officers, “[A]ll this time, I ke[pt] thinking, ‘Wait a minute, you know. He’s going to fuckin’ probably try to shoot her.’ ” On defendant’s own admission then, he knew early on that Hines was likely to use lethal force. Fourth, defendant took no meaningful steps to minimize the risk of violence during the burglary. As our Supreme Court has found, “a defendant’s apparent efforts to minimize the risk of violence can be relevant to the reckless indifference to human life analysis.” (Clark, supra, 63 Cal.4th at p. 622.) But here, we find little evidence tending to show that defendant attempted to minimize the risk of violence during the burglary. Defendant, again, claimed he told Hines to “think,” to put the gun away when Hines first pulled it out, not to tie up Donna, and then to untie her. But as noted, the trial court reasonably could have found (and in fact, did find) that defendant was not credible and that, rather than attempt to minimize the risk of violence, defendant enhanced the risk of violence when he assisted Hines in binding Donna. Defendant counters that, in evaluating his failure to minimize the risk of violence, we should consider “the age difference between [him and Hines] and [his] understandable fear of the armed, older man.” We agree this type of consideration can be important, though in this case, defendant cites no evidence showing Hines was older.6 But even assuming he was older, the record here does not persuasively show, as defendant claims, 6 Defendant claims Hines was 24 at the time of the murders but in support cites only defense counsel’s argument before the trial court. That, however, is not evidence. (In re Zeth S. (2003) 31 Cal.4th 396, 414, fn. 14 [“unsworn statements of counsel are not evidence”].) As best we can tell, no evidence in the record reveals Hines’s age at the time of the murder, though as we previously noted, our Supreme Court has said Hines was 20 at the time. (Hines, supra, 15 Cal.4th at p. 1016.) 25 that he feared Hines. Defendant, for instance, did not attempt to distance himself from Hines after Hines shot Donna and Katherine. He instead joined him in a celebratory ride in the roadster around town. And defendant did not attempt to separate himself from Hines after they parked the roadster. He instead assisted Hines in attempting to conceal the roadster, assisted Hines in attempting to sell the Robertses’ guns, and remained with Hines until the time of his arrest the following day. This conduct tends to depict someone who is comfortable around Hines. Ultimately, considering the totality of the circumstances, we find substantial evidence supports the finding that defendant acted with reckless indifference to human life. To sum up some of the most salient details, the evidence supports the finding that defendant understood the criminal nature of Hines’s plan and knew executing the plan could be dangerous. The evidence further supports the finding that defendant knew Hines intended to bind and then shoot Donna shortly after they entered the Robertses’ home and, despite knowing this, defendant nonetheless helped Hines bind her. And the evidence shows that following the murders of Donna and Katherine, defendant joined Hines in a celebratory ride in the roadster around town, assisted Hines in attempting to conceal the taking of the roaster, and assisted Hines in taking steps to sell the guns taken from the Robertses’ home. We find this evidence together sufficient to show that defendant acted with reckless indifference to human life. Before ending our discussion on this issue, we return once more to a topic we touched on already—defendant’s age at the time of the crime. Defendant raised this topic in the context of discussing the age difference between him and Hines, but we also find it relevant more generally. As other courts have stated, “ ‘a defendant’s youth is a relevant factor in determining whether the defendant acted with reckless indifference to human life.’ ” (People v. Ramirez (2021) 71 Cal.App.5th 970, 987.) But under the facts of this case, we find this consideration offers defendant only limited support here. Although defendant was perhaps more likely to engage in reckless activity because of his youthful 26 age (see People v. Franklin (2016) 63 Cal.4th 261, 274), we cannot say his age meaningfully undermined his ability to appreciate the grave risk of death associated with his actions—particularly when Hines expressly told him he planned to shoot Donna. Nor, considering the totality of the circumstances, including defendant’s age, can we say that insufficient evidence supported the trial court’s finding. In the end, we find defendant’s age at the time of the crime carries more relevance on the topic of punishment (see ibid.; § 3051) than on the topic of guilt. But that consideration does not assist defendant in his appeal here.7 C. Probation Report Lastly, we consider defendant’s request that we order several corrections to his probation report. According to defendant, the probation report includes two inaccuracies. First, it says “defendant was armed in the commission of all these crimes”; and second, it says “defendant was armed with a .22 caliber revolver when these crimes were committed.” Defendant characterizes these as “clerical errors” and then, citing People v. Mitchell (2001) 26 Cal.4th 181, says courts have inherent authority to correct these types of errors at any time (see id. at p. 185 [“ ‘a court has the inherent power to correct clerical errors in its records so as to make these records reflect the true facts’ ”]). The Attorney General, in turn, contends any asserted errors in the probation report are outside the scope of this appeal. We agree with the Attorney General. Although courts have broad authority to correct clerical errors at any time—including, for instance, errors in the abstract of 7 Because we find substantial evidence supports the trial court’s finding that defendant is guilty of murder under the theory that he was a major participant who acted with reckless indifference to human life, we need not address the trial court’s additional ground for finding defendant guilty of murder under the theory that he aided and abetted Hines with the intent to kill. 27 judgment that fail to reflect the judgment actually rendered (People v. Mitchell, supra, 26 Cal.4th at p. 185)—the alleged errors here are not clerical errors. They are instead factual statements that are allegedly not supported by substantial evidence in the record. General error correction of that sort, however, is outside the scope of this appeal. Section 1172.6 grants courts limited jurisdiction to vacate certain murder, attempted murder, and manslaughter convictions, not broad authority to evaluate every factual finding or statement that is allegedly not supported by substantial evidence. Defendant could have sought to correct these alleged factual misstatements in his initial appeal. But he did not. Considering the limited scope of our jurisdiction in this appeal, together with the interest in conserving judicial resources, we will not entertain defendant’s request here. (See People v. Senior (1995) 33 Cal.App.4th 531, 535 [“California law prohibits a direct attack upon a conviction in a second appeal after a limited remand for resentencing or other posttrial procedures”].) DISPOSITION The judgment is affirmed. /s/ EARL, J. We concur: /s/ HULL, Acting P. J. /s/ KRAUSE, J. 28	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488791/	Filed 11/22/22 P. v. Chatman CA4/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO THE PEOPLE, Plaintiff and Respondent, E079081 v. (Super.Ct.No. BAF002088) LAWRENCE VERNON CHATMAN, Jr., OPINION Defendant and Appellant. APPEAL from the Superior Court of Riverside County. John D. Molloy, Judge. Affirmed. John Derrick, under appointment by the Court of Appeal, for Defendant and Appellant. No appearance for Plaintiff and Respondent. 1 Defendant and appellant Lawrence Vernon Chatman, Jr. appeals the Riverside County Superior Court’s denial of his petition motion to vacate his judgment made pursuant to section 1473.6 of the Penal Code.1 We affirm. BACKGROUND In 2003, defendant was convicted of first degree robbery of a person over 65 years of age and first degree burglary of that victim’s home in violation of sections 211, 212.5, 459, and 667.9, subdivision (b). He admitted four prior prison terms (§ 667.5, subd. (b)), two prior serious felony convictions (§ 667.5, subd. (a)), and two prior strike convictions (§§ 667.5, subds. (c) and (e), 1170.12, subd. (c)). He was sentenced to a total prison term of 62 years and eight months (which did not include the prior prison terms because two were stayed and the others stricken). Defendant appealed and we affirmed. (People v. Chatman (Nov. 15, 2004, E034544) [nonpub. opn.].) In May 2022, defendant noticed a motion pursuant to section 1473.6, which permits a person who is no longer in custody to move to vacate a judgment based upon newly discovered evidence of fraud, false testimony, or other misconduct on the part of a governmental official that resulted in their unlawful imprisonment or restraint. The purpose of defendant’s motion was to vacate the two prior strike convictions he had admitted in connection with his 2003 conviction for robbery and burglary. It appears from the first amended information in the 2003 case that the prior strikes were a conviction in 1985 for burglary in violation of section 459 and a conviction for assault to 1 All further statutory references are to the Penal Code. 2 intent to commit a specific sex offense in violation of section 220. Defendant mentions the years of those two convictions in his moving papers, but only specifically identifies the burglary offense. As to that offense, he attached an abstract of judgment showing he entered a plea. He argues both convictions are invalid because (i) he was not given the required advisements when he pled guilty, (ii) the court and the People did not establish his waivers of rights were knowing and intelligent, and (iii) the court and counsel engaged in fraud because they violated their obligations to ensure he was properly advised, that his waiver was knowing and intelligent, and that there was a factual basis for his plea. Defendant concluded that, because the two convictions are invalid, they could not be used as strikes against him with respect to the 2003 robbery and burglary convictions. He posits he is entitled to relief pursuant to section 1473.6 because he was not aware of the violations until a fellow inmate brought them to his attention in December 2021 and because he is no longer in custody on account of the convictions he is seeking to vacate. In an unreported proceeding, the trial court denied defendant’s motion because he is in custody. Defendant appealed. DISCUSSION Defendant’s appointed appellate counsel has filed an opening brief that sets forth statements of the case and facts but does not present any issues for adjudication. 3 We offered defendant an opportunity to file a personal supplemental brief, which he has not done. Although we are not required to independently review the record for potential errors in a postjudgment appeal, we exercised our discretion to do so in keeping with our opinion in People v. Griffin (Nov. 14, 2022, E079269) ___ Cal.App.5th ___. We found no arguable issues. DISPOSITION The judgment is affirmed. NOT TO BE PUBLISHED IN OFFICIAL REPORTS RAMIREZ P. J. We concur: McKINSTER J. FIELDS J. 4	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488792/	Filed 11/22/22 P. v. Castaneda CA3 NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Yolo) ---- THE PEOPLE, C094775 Plaintiff and Respondent, (Super. Ct. No. CRF20204660) v. MARCELINO RENE CASTANEDA, Defendant and Appellant. A jury found defendant Marcelino Rene Castaneda guilty of one count of unlawfully taking or driving a vehicle (Veh. Code, § 10851 subd. (a)—count 1), two counts of misdemeanor possessing or making burglary tools (Pen. Code, § 466—counts 2 and 9),1 one count of possession of a firearm by a person who has been convicted of a felony (§ 29800, subd. (a)(1)—count 4), two counts of possession of ammunition by a person prohibited from owning or possessing a firearm (§ 30305, subd. (a)—counts 5 and 1 Undesignated statutory references are to the Penal Code. 1 11), one count of possession of methamphetamine while armed with a loaded firearm (Health & Saf. Code, § 11370.1, subd. (a)—count 6), one count of misdemeanor possession of methamphetamine (Health & Saf. Code, § 11377, subd. (a)—count 7), one count of misdemeanor possession of controlled substance paraphernalia (Health & Saf. Code, § 11364, subd. (a)—count 8), and one count of misdemeanor resisting or obstructing a peace officer (§ 148, subd. (a)(1)—count 12).2 The jury also found that defendant committed count 11 while he was released from custody on bail or on his own recognizance. (§ 12022.1, subd. (b).) Counts 1 and 2 related to events that occurred on November 10, 2020. Counts 3 through 9 related to events that occurred on December 22, 2020. Counts 1 through 9 were initially charged in case number 20-4660. Counts 11 and 12 were based on events that occurred February 2, 2021, and that were initially charged in case number 21-0258.3 At the People’s request, the court consolidated the two cases as to defendant. In a bifurcated proceeding, the trial court found true that defendant had suffered a prior strike conviction. The trial court sentenced defendant to a total prison term of 10 years and 8 months: six years for count 6 (the middle term of three years, doubled for the prior strike), plus one year and four months each on counts 1 and 11 (one-third the middle term, doubled for the prior strike), plus two years for the on-bail enhancement. The court imposed and stayed sentences on counts 4, 5, and 7 pursuant to section 654. The court also sentenced defendant to concurrent sentences of 180 days in county jail on counts 2, 8, 9, and 12. 2 The People moved to dismiss count 3, and the count was dismissed. 3 Count 10 was not alleged as to defendant. 2 On appeal, defendant argues: (1) the trial court’s decision to consolidate resulted in gross unfairness to him in violation of his right to due process; (2) the trial court erred in not instructing with respect to count 1 that the vehicle had to be worth more than $950 to convict defendant of a felony under a temporary taking theory of the offense; (3) his conviction for count 1 was not supported by substantial evidence; (4) the trial court erred in not giving a unanimity instruction with respect to count 12; (5) the prosecutor committed misconduct during closing argument; (6) the cumulative prejudicial impact of the two instructional errors and prosecutorial misconduct requires reversal of his convictions; (7) his trial counsel rendered ineffective assistance in not asking the court to strike his prior strike; and (8) resentencing is required under recent amendments to section 1170. We agree the trial court erred in instructing the jury on count 1. Accordingly, we will reverse the Vehicle Code section 10851 conviction. On remand, the People will have the choice of either accepting the conviction’s reduction to a misdemeanor or retrying the charge as a felony. Additionally, the People concede resentencing is required under amended section 1170. We will remand for resentencing consistent with this opinion. In all other respects, we will affirm the convictions. I. BACKGROUND A. November 10, 2020 (Counts 1 and 2) On November 10, 2020, a police officer for the City of West Sacramento saw a car matching the description of a stolen 2000 Honda Civic and pulled it over. Defendant was driving the car. The officer found shaved keys, a lock picking set, and bolt cutters inside the car. B. December 22, 2020 (Counts 3 through 9) On December 22, 2020, a different police officer received a notification of a stolen car coming into West Sacramento. The officer pulled over the car. Defendant was the driver, and there was also a passenger. Officers searched the car and found a loaded nine-millimeter handgun in a plastic bag under a purse in the front passenger area. 3 Officers also found a nine-millimeter firearm magazine, methamphetamine, a methamphetamine pipe, a ski mask, and shaved keys. C. February 2, 2021 (Counts 11 and 12) On February 2, 2021, Detective Cameron was looking for Trenton McCarty, who was suspected of being a felon in possession of a firearm. Detective Cameron saw McCarty standing in front of a motel with a backpack. Defendant, who also had a backpack, approached McCarty. As other officers approached the two men, McCarty ran. Officer Lewis saw that McCarty was running and told defendant to sit down twice before chasing after McCarty. Defendant also ran away. Officer Venikov followed defendant, detained him, and searched for the backpack defendant had been wearing earlier. Officers found the backpack in a parking lot between two vehicles. Inside the backpack, officers found an empty gun holster, an empty nine-millimeter magazine, a nine-millimeter magazine with ammunition in it, three hypodermic needles, a crowbar, and a set of keys. II. DISCUSSION A. Motion to Sever 1. Trial Court Proceedings Prior to trial, the People filed a motion to consolidate case No. 20-4660 with case No. 21-0258 and a third case that is not part of this appeal. Defendant opposed consolidation. The court held that it would consolidate case Nos. 20-4660 and 21-0258 as to defendant. Defendant subsequently moved to sever counts 1 through 9 from counts 11 through 12, arguing, in part, that the People’s case with respect to counts 3 through 9 was weaker than its case with respect to counts 11 and 12. The court denied defendant’s motion to sever, explaining: “[E]ssentially what we have here, is related offenses, ammunition, and then later a firearm. But it’s not that it’s so far out there that it’s bootstrapping a weak case to a strong case.” 4 2. Alleged Gross Unfairness Section 954, in relevant part, permits the joinder of “two or more different offenses connected together in their commission” or “two or more different offenses of the same class of crimes or offenses.” Joinder conserves judicial resources and is therefore preferred by law. (People v. Simon (2016) 1 Cal.5th 98, 122.) Defendant does not dispute that the counts met the requirements for joinder. Nevertheless, the trial court may, “in the interests of justice and for good cause shown,” sever the charges into groups to be tried separately. (§ 954.) Review of a trial court’s ruling on a motion to sever generally proceeds in two steps. “First, we examine whether, in light of the information available at the time, the trial court abused its discretion in denying” defendant’s motion to sever. (People v. Simon, supra, 1 Cal.5th at p. 122.) “ ‘ “The state’s interest in joinder gives the court broader discretion in ruling on a motion for severance than it has in ruling on admissibility of evidence.” ’ [Citation.] Where, as here, the statutory requirements for joinder are met, the defendant must make a clear showing of prejudice to demonstrate that the trial court abused its discretion. [Citation.] [¶] In reviewing such a ruling, we consider: ‘(1) whether evidence of the crimes to be jointly tried is cross-admissible; (2) whether some charges are unusually likely to inflame the jury against the defendant; (3) whether a weak case has been joined with a stronger case so that the spillover effect of aggregate evidence might alter the outcome of some or all of the charges; and (4) whether any charge carries the death penalty or the joinder of charges converts the matter into a capital case.’ ” (People v. Holmes, McClain & Newborn (2022) 12 Cal.5th 719, 746.) Defendant has effectively conceded the trial court did not abuse its discretion in denying his motion to sever by conceding the trial court did not abuse its discretion in consolidating the cases and not making any argument pertaining to the first, second, or fourth considerations. 5 Rather, defendant’s argument is based on the case as tried and the second step of our analysis. Under the second step, even where a trial court “was well within its discretion in denying severance pretrial, we must also discern ‘ “whether events after the court’s ruling demonstrate that joinder actually resulted in ‘gross unfairness’ amounting to a denial of defendant’s constitutional right to fair trial or due process of law.” ’ [Citation.] Whether joinder worked a gross unfairness turns upon assessing whether it was ‘reasonably probable that the jury was influenced by the joinder in its verdict of guilt.’ ” (People v. Vargas (2020) 9 Cal.5th 793, 819.) Defendant argues the trial court’s decision to consolidate resulted in gross unfairness during his trial because the evidence supporting the counts involving gun possession on December 22, 2020, (counts 4 and 6) was weaker than the evidence supporting the count involving possession of ammunition on February 2, 2021, (count 11) because counts 4 and 6 relied on the doctrine of constructive possession. This argument is insufficient to demonstrate it is reasonably probable the jury was influenced by the joinder of the charges. “[A]s between any two charges, it always is possible to point to individual aspects of one case and argue that one is stronger than the other. A mere imbalance in the evidence, however, will not indicate a risk of prejudicial ‘spillover effect,’ militating against the benefits of joinder and warranting severance of properly joined charges.” (People v. Soper (2009) 45 Cal.4th 759, 781.) “The core prejudice concern arising in connection with this issue is that jurors may aggregate evidence and convict on weak charges that might not merit conviction in separate trials. [Citation.] This concern is especially pronounced when evidence of a lesser but inflammatory incident might be used to bolster a weak prosecution case as to another incident. [Citation.] But even where evidence from one incident could be considered ‘inflammatory’ as the term is understood in our case law [citation], we will find no abuse of discretion if the evidence of guilt for each of the joined incidents is sufficiently compelling.” (People v. Simon, supra, 1 Cal.5th at p. 127.) “Appellate courts have found 6 ‘ “no prejudicial effect from joinder when the evidence of each crime is simple and distinct.” ’ ” (People v. Soper, supra, at p. 784.) Here, the evidence of each crime was simple and distinct. Additionally, defendant notes the parties “vigorously disputed whether [defendant] was in constructive possession of the gun” during closing argument. The jury was instructed on the People’s burden of proof and the requirements for each count including the requirements of proving possession. These instructions “mitigated the risk of any prejudicial spillover.” (Ibid.) “Considering the proceedings as a whole, we conclude that defendant’s trial was not grossly unfair.” (Ibid.) B. Unlawfully Taking or Driving a Vehicle (Count 1) Defendant was convicted in count 1 of violating Vehicle Code section 10851, subdivision (a), which prohibits driving or taking a vehicle without the owner’s consent “with intent either to permanently or temporarily deprive the owner” of title or possession of the vehicle. (Veh. Code, § 10851, subd. (a).) Defendant raises two challenges to this conviction that relate to the value of the vehicle at issue. He argues we should reverse the count because: (1) the trial court did not instruct that the vehicle had to be worth more than $950 to convict defendant of a felony under a temporary taking theory of the offense; and (2) his conviction is not supported by substantial evidence that the vehicle was worth more than $950. Because both arguments require an und erstanding of the testimony regarding the value of the vehicle, we begin by summarizing this testimony. 1. Testimony Regarding Valuation of the Car On direct examination, the owner testified his car, a 2000 Honda Civic, was worth “a thousand dollars, around” at the time it was taken. On cross-examination, the owner was asked, “Is it fair to say that that could be plus or minus a couple hundred dollars?” The owner responded, “I don’t know, maybe.” The owner also testified that he bought the car for $1,000 in 2019. In the interim, the car had been stolen four times and repainted. The car had also been dented three times. The owner testified the car had 7 around 250,000 miles on it, and around 210,000 when he purchased it. On redirect, the owner explained he had purchased the car from a friend. 2. Instructional Error The trial court instructed the jury, in relevant part: “The defendant is charged in Count 1 with unlawfully taking or driving a vehicle in violation of Vehicle Code section 10851. “To prove that the defendant is guilty of this crime, the People must prove that: “1. The defendant took someone else’s vehicle without the owner’s consent; “AND “2. When the defendant took the vehicle, he intended to temporarily deprive the owner of possession or ownership of the vehicle; “OR “1. The defendant took someone else’s vehicle without the owner’s consent; “AND “2. When the defendant took the vehicle, he intended to permanently deprive the owner of possession or ownership of the vehicle; “AND “3. The vehicle was worth more than $950.” The jury was not instructed on posttheft driving under Vehicle Code section 10851. (See People v. Page (2017) 3 Cal.5th 1175, 1188 [“Posttheft driving in violation of Vehicle Code section 10851 consists of driving a vehicle without the owner’s consent after the vehicle has been stolen, with the intent to temporarily or permanently deprive the owner of title or possession”].) Unlike posttheft driving, both a temporary and a permanent taking under Vehicle Code section 10851 must be punished as a misdemeanor if the vehicle is worth $950 or less. (People v. Bullard (2020) 9 Cal.5th 94, 99-100, 110.) Defendant argues, and the People concede, that the trial court erred in instructing on count 1 by omitting the element that the vehicle was worth more than $950 with respect 8 to a temporary vehicle taking. We accept the People’s concession and turn to the question of prejudice. “When a trial court instructs a jury on two theories of guilt, one of which was legally correct and one legally incorrect, reversal is required unless there is a basis in the record to find that the verdict was based on a valid ground.” (People v. Chiu (2014) 59 Cal.4th 155, 167, superseded by statute on other grounds.) The conviction “must be reversed unless we conclude beyond a reasonable doubt that the jury based its verdict on [a] legally valid theory.” (Ibid.) Likewise, an instructional error in omitting an element of an offense is subject to the “beyond a reasonable doubt” standard articulated in Chapman v. California (1967) 386 U.S. 18, and will be deemed harmless only in unusual circumstances, such as where the element was undisputed, the defense was not prevented from contesting the omitted element, and overwhelming evidence supports the omitted element. (People v. Mil (2012) 53 Cal.4th 400, 409, 414.) “Our task, then, is to determine ‘whether the record contains evidence that could rationally lead to a contrary finding with respect to the omitted element.’ ” (Id. at p. 417.) Here, there is no basis to conclude the jury relied upon permanent as opposed to temporary taking in convicting defendant of count 1. The prosecutor argued both theories to the jury and noted the latter did not require a finding related to the value of the car. Additionally, the value of the car was not uncontested or supported by overwhelming evidence. The jury could have been persuaded by the testimony elicited during cross-examination that the People had not met their burden of proof. Thus, we cannot conclude the trial court’s instructional error was harmless beyond a reasonable doubt. The remedy is to “reverse the felony conviction for unlawful driving or taking a vehicle and remand the matter to allow the People either to accept a reduction of the conviction to a misdemeanor or to retry the offense as a felony with appropriate 9 instructions.” (People v. Gutierrez (2018) 20 Cal.App.5th 847, 857.) We will reverse defendant’s conviction with respect to count 1 and remand accordingly. 3. Substantial Evidence Defendant also argues we should reverse count 1 because it is not supported by substantial evidence. We disagree. Accordingly, defendant may be retried for the offense. (People v. Franco (2009) 180 Cal.App.4th 713, 726.) “ ‘In reviewing a challenge to the sufficiency of the evidence, we do not determine the facts ourselves. Rather, we “examine the whole record in the light most favorable to the judgment to determine whether it discloses substantial evidence—evidence that is reasonable, credible and of solid value—such that a reasonable trier of fact could find the defendant guilty beyond a reasonable doubt.” [Citations.] We presume in support of the judgment the existence of every fact the trier could reasonably deduce from the evidence. . . . “[I]f the circumstances reasonably justify the jury’s findings, the judgment may not be reversed simply because the circumstances might also reasonably be reconciled with a contrary finding.” [Citation.] We do not reweigh evidence or reevaluate a witness’s credibility.’ ” (People v. Nelson (2011) 51 Cal.4th 198, 210.) On direct examination, the owner of the car testified that it was worth around $1,000 at the time it was taken. On cross-examination, defense counsel asked, “Is it fair to say that that could be plus or minus a couple hundred dollars?” and the owner responded ambiguously: “I don’t know, maybe.” We disagree with defendant’s assertion this was an admission that the car could be worth $800 or less. The jury could have found this statement and the other evidence regarding the condition of the vehicle insufficient to undermine the owner’s assessment during direct examination that the car was worth around $1,000. Accordingly, we must conclude defendant’s conviction was supported by substantial evidence and retrial on count 1 is permitted. 10 C. Unanimity Instruction (Count 12) Defendant was convicted in count 12 of resisting or obstructing a peace officer (§ 148, subd. (a)(1)). Defendant argues we must reverse this conviction because the court committed instructional error and violated his state and federal constitutional rights by not giving a unanimity instruction on this count. We disagree. The jury was instructed with respect to count 12 that the People had to prove: “1. [Officer] Lewis was a police officer lawfully performing or attempting to perform his duties as a police officer; “2. The defendant willfully resisted, obstructed, or delayed [Officer] Lewis in the performance or attempted performance of those duties; “AND “3. When the defendant acted, he knew, or reasonably should have known, that [Officer] Lewis was a police officer performing or attempting to perform his duties.” Although section 148, subdivision (a)(1) is most often applied to the physical acts of a defendant, such as physical resistance, hiding, or running away from a peace officer (In re Muhammed C. (2002) 95 Cal.App.4th 1325, 1329), it also applies to “passive delay or obstruction of an arrest, such as refusal to cooperate” (People v. Curtis (1969) 70 Cal.2d 347, 356, fn. 6). For example, in In re Muhammed C., the appellate court concluded that “a reasonable inference could be drawn that appellant willfully delayed the officers’ performance of duties by refusing the officers’ repeated requests that he step away from the patrol car.” (In re Muhammed C., supra, at p. 1330.) Officer Lewis testified that, on February 2, 2021, he saw defendant and McCarty outside of a motel, each carrying backpacks. McCarty was beginning to flee, so Officer Lewis told defendant to sit down twice, and then he and Officer Montez chased after McCarty. Officer Lewis testified that defendant never had a seat. 11 Instead, defendant ran away. Officer Venikov testified to following defendant while he was running away. Officer Venikov stopped defendant, detained him in a police car, and then searched for defendant’s backpack. Officer Lewis testified that he returned to the motel to help Officer Venikov after he found McCarty’s firearm and the other officers had found defendant and his backpack. The jury was played a video from Officer Venikov’s body camera that showed Officer Venikov asking defendant to get out of the car, and defendant initially refusing and talking back to Officer Venikov. Officer Venikov testified this video was taken after the backpack was found. “As a general rule, when violation of a criminal statute is charged and the evidence establishes several acts, any one of which could constitute the crime charged, either the state must select the particular act upon which it relied for the allegation of the information, or the jury must be instructed that it must agree unanimously upon which act to base a verdict of guilty. [Citation.] There are, however, several exceptions to this rule. For example, no unanimity instruction is required if the case falls within the continuous- course-of-conduct exception, which arises ‘when the acts are so closely connected in time as to form part of one transaction’ [citation], or ‘when the statute contemplates a continuous course of conduct of a series of acts over a period of time’ [citation]. There also is no need for a unanimity instruction if the defendant offers the same defense or defenses to the various acts constituting the charged crime.” (People v. Jennings (2010) 50 Cal.4th 616, 679.) Defendant argues “the People offered evidence of two separate and distinct acts to support a single charge of resisting arrest: (1) when the police first arrived on the scene, and appellant ran way [sic] when told by Officer Lewis to have a seat as Officer Lewis and Officer Montez chased after McCarthy; and (2) when appellant was inside the police car, and stalled and talked back to Officer Venikov while Officer Venikov tried to search him.” Defendant argues the two acts were separated by time and space because the first 12 occurred against Officer Lewis when the police first arrived on the scene, and the second act occurred against Officer Venikov inside and outside the police car after defendant was already handcuffed, arrested, and seated inside the police car. Defendant has failed to establish any error in not giving a unanimity instruction because the jury instructions required the jury to base its conviction on an act that “resisted, obstructed, or delayed [Officer] Lewis in the performance or attempted performance of” his duties, and defendant has not demonstrated there were multiple separate and distinct acts of resistance as to Officer Lewis. (Italics added.) (See People v. White (1980) 101 Cal.App.3d 161, 169, fn. 3 [explaining that where the information does not specify which officer was the victim of a section 148 charge, “the jury must specifically be instructed as to the officer involved to assure a defendant, if convicted, that the jury has reached a unanimous verdict”].) We conclude no unanimity instruction was required because, as indicated by the jury instructions, the People elected to proceed based on defendant’s disregarding Officer Lewis’s instruction to sit and then running away. D. Alleged Prosecutorial Misconduct Defendant argues the prosecutor committed prejudicial misconduct during closing arguments by inciting the jury to render a guilty verdict based on fear of being adversely judged by their family members if they acquitted defendant. We disagree. 1. Closing Argument During her rebuttal, the prosecutor argued: “And now I just want to comment a little bit on reasonable doubt. . . . [I]t’s a concept that we don’t use very much in everyday life, but it’s not insurmountable, it’s not unobtainable. It’s not something—I’ll try to give an example that will hopefully put it kind of in a tangible—a little bit more tangible form for you. And keep in mind that it’s the same standard that’s used in every single case; every DUI that happens across the country and every murder case is decided using the standard of proof beyond a 13 reasonable doubt. And jurors convict people accused of crimes every d ay using that standard. “So, you know, you’ve been ordered since you’ve been on jury duty not to talk to anybody about the case, and I’m sure you’re going home . . . to your loved ones every night and they’re probably a little bit curious, and you probably kind of want to talk to them about it and . . . kind of decompress from your day. But you can’t do it because you can’t talk to anybody about what you’ve been doing all day. And so think about when you finally do reach a verdict and you get to go home and you finally get to tell your loved one what you’ve been doing this week and what the case was about. Think about what you’re going to tell them. Are you going to tell them there’s this guy that was arrested by the West Sacramento Police Department on three separate occasions and he was accused of having a gun and ammunition, but he didn’t have any of that, he didn’t know anything, he was innocent. Are you going to tell your loved ones that? “[Defense Counsel]: Objection, improper argument. “THE COURT: Not yet. May be approaching the threshold of going overboard. “Go ahead, Counsel. “[Prosecutor]: . . . [Y]ou’re not going to tell them that. You’re going to go home and you’re going to describe this case to your family and say it was evidence about a guy who was arrested by the police department. He had a stolen car. And then on another day, he had a gun and some ammunition and some drugs. And on the third day, he had more ammunition, ammunition that fit or was the same caliber as the gun he had had on a previous occasion. “Or think about when . . . maybe you meet with a family reunion this summer. You get together with some family and . . . you guys are talking and they kind of are interested in like, Hey, what’s been new, what have you been doing? And you’ll tell them, Oh, hey, I served on a jury. I had jury duty, and actually was a juror on a criminal trial. And they might be interested and say, Oh, well, tell me about that. So think about 14 what you are going to tell your family when you see them . . . midsummer, maybe people you haven’t seen in a while. Are you going to tell them there was this innocent guy that got arrested and targeted by the police department for having a gun that he didn’t know about, or having ammunition he didn’t know about? No. That’s not how you’re going to describe this case. You’re going to tell them that there’s this guy who was arrested on three separate occasions for having a stolen car, for having a gun, for having ammunition, and having drugs.” 2. Analysis “When a prosecutor’s intemperate behavior is sufficiently egregious that it infects the trial with such a degree of unfairness as to render the subsequent conviction a denial of due process, the federal Constitution is violated. Prosecutorial misconduct that falls short of rendering the trial fundamentally unfair may still constitute misconduct under state law if it involves the use of deceptive or reprehensible methods to persuade the trial court or the jury. [Citation.] ‘To preserve a claim of prosecutorial misconduct for appeal, a criminal defendant must make a timely objection, make known the basis of his objection, and ask the trial court to admonish the jury.’ [Citation.] There are two exceptions to this forfeiture: (1) the objection and/or the request for an admonition would have been futile, or (2) the admonition would have been insufficient to cure the harm occasioned by the misconduct. Forfeiture for failure to request an admonition will also not apply where the trial court immediately overruled the objection to the alleged misconduct, leaving defendant without an opportunity to request an admonition. A defendant claiming that one of these exceptions applies must find support for his or her claim in the record. [Citation.] The ritual incantation that an exception applies is not enough.” (People v. Panah (2005) 35 Cal.4th 395, 462.) Here, defendant did not expressly invoke any exceptions. Nonetheless, we conclude defendant’s claim is without merit. 15 “ ‘To prevail on a claim of prosecutorial misconduct based on remarks to the jury, the defendant must show a reasonable likelihood the jury understood or applied the complained-of comments in an improper or erroneous manner. [Citations.] In conducting this inquiry, we “do not lightly infer” that the jury drew the most damaging rather than the least damaging meaning from the prosecutor’s statements.’ ” (People v. Seumanu (2015) 61 Cal.4th 1293, 1337.) Additionally, “ ‘[t]he prosecutor has a wide- ranging right to discuss the case in closing argument. He has the right to fully state his views as to what the evidence shows and to urge whatever conclusions he deems proper.’ ” (People v. Panah, supra, 35 Cal.4th at p. 463.) We agree with the People that the prosecutor’s comments were attempting to explain, in the context of the reasonable doubt standard, how the jurors would be able to explain their conclusions in the future using evidence. We disagree with the defendant’s assertion that the prosecutor’s comments incited the jury into rendering a guilty verdict based on the fear of being adversely judged by their families if they acquitted. The prosecutor’s argument was rooted in evidence rather than fear. Defendant’s argument relies primarily on People v. Hail (1914) 25 Cal.App. 342, in which this court found misconduct where the prosecutor argued, “ ‘Men have been acquitted who have committed cold-blooded murder, and if you were to acquit this man under the testimony here you would be allowing a cold-blooded murderer with human gore yet dripping upon his hands to go unwhipt of justice; gentlemen, you cannot do it, you will not do it. Should you do it you would be afraid to go out on the street and meet your fellow-men.’ ” (Id. at pp. 356-357.) This court explained, “That the effect of the statement that the jurors, in the event that they acquitted the defendant, would be afraid to go out upon the public streets and meet their fellow-men, was to intimidate or influence them to return a verdict of conviction, regardless of their views as to the effect of the evidence, cannot for a moment be doubted.” (Id. at p. 357.) Further, this court stated, “The language complained of amounts, substantially, to a direct declaration to the jury 16 that, if they did not convict the defendant, they would lose the respect and confidence of their friends and neighbors. Thus the question of the honesty and the integrity of the jury was injected into the case. In other words, the jurors themselves were put upon trial by the district attorney, and whether they could bravely meet their fellow-citizens and face them with clear consciences was made by that official to depend upon whether they found the defendant guilty.” (Id. at p. 358.) The prosecutor’s arguments in this proceeding were not analogous to those made in Hail. We find no prosecutorial misconduct. E. Alleged Cumulative Error Defendant alleges the cumulative prejudicial impact of the alleged instructional error and prosecutorial misconduct necessitates reversal of his convictions. We have found only one error, instructional error with respect to count 1, and we have reversed the conviction on that count. There is no additional error to cumulate. F. Sentencing As set forth above, in August 2021, the trial court sentenced defendant to a total prison term of 10 years and 8 months: six years for count 6 (the middle term of three years, doubled for the prior strike), plus one year and four months each on counts 1 and 11 (one-third the middle term, doubled for the prior strike), plus two years for the on-bail enhancement. On appeal, defendant argues, and the People concede, the matter must be remanded for resentencing pursuant to amended section 1170. We accept the People’s concession. At the time of defendant’s sentencing, section 1170, subdivision (b) provided that “[w]hen a judgment of imprisonment is to be imposed and the statute specifies three possible terms, the choice of the appropriate term shall rest within the sound discretion of the court.” (Stats. 2020, ch. 29, § 14.) This provision was amended effective January 1, 2022, and divided into subparts. (Stats. 2021, ch. 731, § 1.3.) Section 1170, subdivision (b)(1) provides “the court shall, in its sound discretion, order imposition of a sentence not 17 to exceed the middle term, except as otherwise provided in paragraph (2).” The referenced exception provides that an upper term sentence may be imposed “only when there are circumstances in aggravation of the crime that justify the imposition of a term of imprisonment exceeding the middle term, and the facts underlying those circumstances have been stipulated to by the defendant, or have been found true beyond a reasonable doubt at trial by the jury or by the judge in a court trial.” (§ 1170, subd. (b)(2).) However, “the court may consider the defendant’s prior convictions in determining sentencing based on a certified record of conviction without submitting the prior convictions to a jury.”4 (§ 1170, subd. (b)(3).) Additionally, “unless the court finds that the aggravating circumstances outweigh the mitigating circumstances that imposition of the lower term would be contrary to the interests of justice, the court shall order imposition of the lower term if any of the following was a contributing factor in the commission of the offense,” including “(B) The person is a youth, or was a youth as defined under subdivision (b) of Section 1016.7 at the time of the commission of the offense.” (§ 1170, subd. (b)(6).) A youth under section 1016.7 is “any person under 26 years of age on the date the offense was committed.” (§ 1016.7, subd. (b).) “[T]he amended version of section 1170, subdivision (b) that became effective on January 1, 2022, applies retroactively in this case as an ameliorative change in the law applicable to all nonfinal convictions on appeal.” (People v. Flores (2022) 73 Cal.App.5th 1032, 1039.) Further, defendant argues, and the People concede, that because defendant was 25 at the time of the offenses, he is entitled to resentencing in light of the new low-term presumption. We accept this concession and remand for resentencing consistent with this opinion. (See ibid. [“Undisputedly, defendant was under age 26 when he committed this crime. Accordingly, we agree with the parties that 4 “This paragraph does not apply to enhancements imposed on prior convictions.” (§ 1170, subd. (b)(3).) 18 under section 1170, subdivision (b), defendant’s six-year midterm sentence must be vacated”].) As defendant notes, we need not address his claim that his trial counsel rendered ineffective assistance by not asking the court to strike his prior strike. Defendant will already receive a full resentencing based on the recent amendments to section 1170 and our reversal of count 1. During that resentencing, the trial court may reconsider all sentencing choices previously made. (People v. Burbine (2003) 106 Cal.App.4th 1250, 1258.) Defendant may ask the trial court to strike the prior strike finding at that time. III. DISPOSITION The conviction for unlawful taking or driving of a vehicle under Vehicle Code section 10851 is reversed, the sentence is vacated, and the matter is remanded for further proceedings consistent with this opinion. On remand, the People may elect to accept a reduction of the Vehicle Code section 10851 conviction to a misdemeanor, in which case the trial court is to resentence defendant, or to retry him for a felony violation of Vehicle Code section 10851. The remaining convictions are affirmed. /S/ RENNER, J. We concur: /S/ DUARTE, Acting P. J. /S/ EARL, J. 19	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488790/	Filed 11/22/22 P. v. Curry CA3 NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ---- THE PEOPLE, C095569 Plaintiff and Respondent, (Super. Ct. No. 12F00909) v. JAZZ KAYLENN CURRY, Defendant and Appellant. Defendant Jazz Kaylenn Curry contends the trial court, in resentencing him following his direct appeal, failed to consider ameliorative sentencing legislation that became operative shortly before the resentencing hearing. The People argue defendant forfeited these contentions and, in any event, the errors were harmless. We will reach the merits and conclude remand is warranted. We also conclude that, on remand, defendant’s 1 booking and classification fees must be stricken and his custody credits recalculated. We otherwise affirm the judgment. BACKGROUND Defendant and a friend robbed a drug dealer at gunpoint. During the robbery, defendant shot the dealer three times, killing him. In 2015, a jury found defendant guilty of first degree murder (Pen. Code, § 187, subd. (a))1 and second degree robbery (§ 211). The jury also found true the robbery-murder special-circumstance allegation (§ 190.2, subd. (a)(17)(A)) and the allegation that defendant personally and intentionally discharged a firearm that proximately caused the death of a person (§ 12022.53, subd. (d)). The trial court sentenced him to life without the possibility of parole for murder, plus a consecutive term of 25 years to life for the firearm enhancement and a stayed sentence for the robbery offense. The court imposed certain fines and fees, including a $340 booking fee and a $62 classification fee pursuant to former Government Code section 29550.2. The court granted defendant 1,124 days of custody credits. In 2020, this court affirmed defendant’s convictions but remanded the matter for the trial court to consider striking or dismissing the firearm enhancement pursuant to Senate Bill No. 620 (2017-2018 Reg. Sess.) (Stats. 2017, ch. 682) and to correct the robbery sentence by selecting, imposing, and staying a full term (People v. Curry (Dec. 16, 2020, C078652) [nonpub. opn.]). Defendant’s resentencing brief, submitted in October 2021, noted that when defendant committed the offense, he was 20 years old and had one prior adult conviction for firearm possession. He also had a tumultuous childhood and was shot six times when he was 18 years old, causing him to suffer posttraumatic stress disorder. The prosecution’s rebuttal, submitted in November 2021, noted the 2015 presentencing 1 Undesignated statutory references are to the Penal Code. 2 probation report indicated defendant did not report having been abused as a child or having suffered psychological problems as a result of being shot. The prosecution also noted defendant had 20 documented rules violations in prison, many involving violence. In the January 21, 2022, sentencing hearing, the parties reiterated these points but did not specifically discuss ameliorative sentencing legislation that had become operative at the start of the year. The trial court focused on its authority under Senate Bill No. 620 and People v. Tirado (2022) 12 Cal.5th 688, which held trial courts have discretion under Senate Bill No. 620 to replace a section 12022.53 enhancement with an uncharged lesser enhancement under that section. The court stated, “I recognize the fact that I can impose lesser terms, and I have considered the Defendant’s youthfulness in evaluating the facts of this case.” The court emphasized the deliberate nature of the murder, the fact that defendant had an extensive record of violence in prison, and that he had failed to accept responsibility for his actions. “So for all of those reasons the Court will decline to exercise the [Senate Bill No.] 620 authority to do any of the things I’m able to do, that is to impose a different sentence than the [section] 12022.53 originally imposed.” The court also imposed and stayed a three-year middle term for the robbery. The court reimposed defendant’s booking and classification fees and did not recalculate his custody credits. DISCUSSION I Sentencing Discretion Defendant contends we should reverse and remand for resentencing under ameliorative legislation that became operative January 1, 2022: Senate Bill No. 81 (2021-2022 Reg. Sess.), which governs a court’s discretion in considering whether to dismiss an enhancement (Stats. 2021, ch. 721, § 1); Senate Bill No. 567 (2021-2022 Reg. Sess.), which governs triad sentencing discretion (Stats. 2021, ch. 731, § 1.3); and Assembly Bill No. 518 (2021-2022 Reg. Sess.), which allowed courts, when a defendant 3 violates multiple laws in a single course of action, to choose the punished offense (Stats. 2021, ch. 441, § 1). The People acknowledge the trial court’s failure to apply this legislation at defendant’s January 21, 2022, resentencing hearing, but contend defendant forfeited these claims and that any errors are harmless. For purposes of this appeal, we shall assume no forfeiture and reach the merits. We conclude defendant’s sentence must be vacated and remand the matter for full resentencing. Senate Bill No. 81 amended section 1385 to provide that certain mitigating circumstances—relevant here, the enhancement may have a discriminatory racial impact 2 or the offense may have been connected to mental illness, prior victimization, or childhood trauma—weigh greatly in favor of dismissing an enhancement, unless the court finds that doing so would endanger public safety. (§ 1385, subd. (c)(2), (3).) These provisions “apply to all sentencings occurring after January 1, 2022,” including resentencing. (§ 1385, subd. (c)(7); People v. Sek (2022) 74 Cal.App.5th 657, 674.) Where a trial court cannot have acted with “ ‘ “informed discretion,” ’ ” “the appropriate remedy is to remand for resentencing unless the record ‘clearly indicate[s]’ that the trial court would have reached the same conclusion ‘even if it had been aware that it had such discretion.’ ” (People v. Gutierrez (2014) 58 Cal.4th 1354, 1391.) Here, the record does not clearly indicate how the trial court would exercise its discretion under amended section 1385. The court focused on its authority under Senate Bill No. 620. The record does not indicate if the court considered potentially applicable mitigating circumstances, as required under Senate Bill No. 81. Nor does the record indicate how the court would assess the danger to the public, if any, posed by dismissing an enhancement for a defendant otherwise sentenced to life without parole. Given this uncertainty and defendant’s remaining contentions regarding ameliorative sentencing 2 Defendant is African-American. 4 legislation, we remand for full resentencing wherein defendant may raise any arguments available to him. (See People v. Ramirez (2019) 35 Cal.App.5th 55, 64.) We express no opinion as to how the trial court should exercise its discretion on remand. II Booking and Classification Fees We agree with the parties that, as of July 1, 2021, the balance of defendant’s booking and classification fees, imposed pursuant to former Government Code section 29550.2, became unenforceable and uncollectible. These fees must be vacated. (Gov. Code, § 6111, subd. (a).) III Custody Credits We agree with the parties that the trial court erred by not recalculating defendant’s custody credits upon resentencing. On remand the court shall recalculate defendant’s custody credits to account for the period between his initial sentencing and resentencings. (See § 2900.1; People v. Buckhalter (2001) 26 Cal.4th 20, 23, 37.) DISPOSITION Defendant’s sentence is vacated and the matter is remanded for a full resentencing. The judgment is modified to vacate the unpaid balance of defendant’s booking and classification fees. In all other respects, the judgment is affirmed. Following resentencing, the court shall recalculate defendant’s custody credits, modify the abstract 5 of judgment as necessary, and forward the modified abstract of judgment to the Department of Corrections and Rehabilitation. /s/ HOCH, J. We concur: /s/ ROBIE, Acting P. J. /s/ EARL, J. 6	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488616/	UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA v. Case No. 08-cr-271-RCL-1 EDDIE RAY KAHN, Defendant. MEMORANDUM OPINION Having served more than half of his 36-month term of supervised release, defendant Eddie Ray Kahn moves for early termination pursuant to 18 U.S.C. § 3583(e)(l). Def.'s Mot., ECF No. 584. The government opposes Mr. Kahn's motion. See ECF No. 585. The U.S. Probation Office recommends that the Court grant Mr. Kahn's motion. ECF No. 589 at 2. Upon consideration of the submissions, the record herein, and the applicable law, the Court will GRANT Mr. Kahn's motion for early termination of supervised release. I. BACKGROUND Mr. Kahn founded and operated American Rights Litigators ("ARL"), a large-scale organization that sold tax defiance schemes to help thousands of individuals obstruct efforts by the Internal Revenue Service ("IRS") to collect taxes for nearly a decade. See Presentence Investigation Report ("PSR"), ECF No. 357, at ,r,r 14-16. It did so through a variety of schemes, including by selling fictitious financial instruments to its customers and encouraging them to send those documents to the U.S. Department of the Treasury and to the IRS in purported payment of their taxes. Id. ,r 23. The organization was registered in Florida, id. ,r 15, but Mr. Kahn promoted the scheme-and the organization's misrepresentations of federal law-throughout the country via seminars, videotapes, phone calls, newsletters, and a book. Id. ,r 17. 1 In 2006, a jury in the Middle District of Florida convicted Mr. Kahn of conspiring to defraud the United States, in violation of 18 U.S.C. § 371, and making false or fraudulent claims to the United States, in violation of 18 U.S.C. § 287. See Jury Verdict, United States v. Snipes et al., No. 5:06-cr-022-2 (WTH) (PRL), ECF No. 418. He was sentenced to a total of 120 months' imprisonment, followed by 36 months of supervised release. See J., Snipes, ECF No. 459. In 2010, a jury in this District convicted Mr. Kahn of conspiring to defraud the United States and commit mail fraud in violation of 18 U.S.C. §§ 2 & 371 and mail fraud in violation of 18 U.S.C. §§ 2 & 1341. Verdict Forms, ECF No. 328, at I. The Court sentenced Mr. Kahn to a total of240 months' imprisonment, followed by 36 months of supervised release. J., ECF No. 409. Mr. Kahn's conviction was affirmed on appeal. Mandate, ECF No. 484. When Mr. Kahn had approximately 59 months remaining on his term of imprisonment, accounting for good behavior time, he filed an emergency motion for compassionate release. Emergency Mot., ECF No. 559. Based on his advanced age and serious medical conditions, he asked this Court to reduce his sentence to time served and allow him to "serve some or all of his supervised release term on home detention." Id. at 7. The government did not oppose Mr. Kahn serving the rest of the 59 months of his sentence on home detention. Gov't Resp., ECF No. 564. On December 22, 2020, this Court granted Mr. Kahn's motion in part, reducing his sentence to time served and converting his 36-month period of supervised release to home detention. 1 Mem. Order, ECF No. 566. Mr. Kahn now argues for early termination of supervised release under 18 U.S.C. § 3583(e)(l). He argues that early termination of his home confinement is proper because he has 1 The Court's order also required that Mr. Kahn be subject to location-monitoring during the 36-month home confinement period. Id. Mr. Kahn later moved to modify his conditions of release remove this condition, which the government did not oppose. Unopposed Mot., ECF No. 580. This Court granted Mr. Kahn's request. Order, ECF No. 581. 2 complied with all of the conditions of his supervised release, he is of advanced age, and he has no history of violence. Def.'s Mot. at 4-5. Mr. Kahn further represents that, were this Court to terminate his supervised release, "he would not walk away unsupervised; he would continue to be supervised by the same U.S. Probation Office ... from his case in Florida. The only practical effect of terminating his supervision early in this District would be that he is no longer subject to home confinement." Id. at 6. He asks for the early termination of his supervised release so that he can travel and spend time with his family, including his wife, two children, and eight grandchildren. Id. After receiving Mr. Kahn's motion, the Court ordered the U.S. Probation Office to provide a recommendation on the motion. See Minute Entry (Oct. 11, 2022). In its response, tlie Probation Office reported that Mr. Kahn currently maintains a stable residence with his wife in Colorado, has not engaged in any criminal conduct while under supervision, and has provided a DNA sample in accordance with his terms of supervised release. Id. Additionally, the Probation Office reports that Mr. Kahn has made "$5,589.44, in restitution payments with an outstanding balance of $19,410.56"2 and that "[t]here is no evidence to suggest he is not compliant with his financial disclosure." Probation Off. Petition at 2. The Probation Office'recommended that this Court grant Mr. Kahn's motion, concluding that, "[i]n [its] assessment, Mr. Kahn does not presently pose a specific risk to the community" and that the Probation Office "do[ es] not believe his removal from supervision will result in an increase[d] chance of a specific risk to the community." Id. The government opposes Mr. Kahn's motion. The government agrees with Mr. Kahn that he has thus far complied with his terms of supervised release. Gov't Opp'n at 2. However, the government argues that the seriousness of Mr. Kahn's crime and statements attributed to Mr. Kahn 2 Though the Probation Office narrative uses the word "restitution," Mr. Kahn was sentenced to pay a fine, not restitution. See Probation Off. Petition at 1. 3 posted to a blog suggest that he still poses a danger to the community and thus weigh against an early termination of supervised release. Id. at 3---4. II. LEGAL STANDARD Motions for early termination of supervised release are governed by 18 U.S.C. § 3583(e)(l). That section allows courts to terminate a term of supervised release early when three conditions have been met and when certain factors set forth in 18 U.S.C. § 3553(a) support the early termination. See 18 U.S.C. § 3583(e)(l). First, a defendant seeking early termination must have served at least one year of supervised release. Id. Second, the court must be satisfied that the early termination is "warranted by the conduct of the defendant." Id. Third, the court must find that the early termination is in "the interest of justice." Id. If these three requirements have been met, the court must consider whether an early termination is consistent with certain Section 3553(a) factors. Those factors are: (a)(l) the nature and circumstances of the offense and the history and characteristics of the defendant; (2) the need for the sentence imposed - (B) to afford adequate deterrence to criminal conduct; (C) to protect the public from further crimes of the defendant; (D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner; (4) the kinds of sentence and the sentencing range established for (A) the applicable category of the offense committed by the applicable category of defendant as set forth in the [U.S. Sentencing Guidelines] ... in effect on the date the defendant is sentenced; (5) any pertinent policy statement - (A) issued by the Sentencing Commission pursuant to [28 U.S.C. § 994(a)(2)] subject to any amendments made to 4 such a policy statement by act of Congress (regardless of whether such amendments have yet to be incorporated by the Sentencing Commission into amendments issued under [28 U.S.C. § 994(p)]); and (B) that, except as provided in section 3742(g), is in effect on the date the defendant is sentenced; (6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and (7) the need to provide restitution to any victims of the offense. 18 U.S.C. § 3553(a); see id. at§ 3583(e) (listing the§ 3553(a) factors courts must consider). III. ANALYSIS A. Mr. Kahn is Eligible for Early Termination of Supervised Release Under 18 U.S.C. § 3583(e)(l) As a threshold matter, the Court finds that Mr. Kahn is eligible for early termination of supervised release. Mr. Kahn has served more than one year on supervised release. See Def.' s Mot. at 2; Gov't Opp'n at 2. The Court is also satisfied that the early termination of supervised release is "warranted by the conduct of the defendant." 18 U.S.C. § 3583(e)(l). Since Mr. Kahn began his term of supervision in January 2021, he "has complied perfectly with all conditions of his supervised release" of supervised release. De£' s Mot. at 2. In addition to complying with all conditions of supervised release, Mr. Kahn has successfully reintegrated into his community. Id. At age 79, Mr. Kahn maintains a stable residence with his wife, attends church on Sundays, and is building close relationships with his children and grandchildren. De£' s Mot. at 6. Given Mr. Kahn's spotless record on supervised release, along with his efforts to reintegrate into his community, the Court finds that the early termination of supervised release is warranted by Mr. Kahn's conduct. See 18 U.S.C. § 3583(e)(l). The Court also finds that the early termination of Mr. Kahn's term of supervised release is in "the interest of justice." Id. The Court sentenced Mr. Kahn to concurrent terms of 36 months' 5 supervised release, which was (and is) the maximum term authorized by statute. See 18 U.S.C. § 3583(b)(2) (authorizing a term of "not more than three years" for a Class C felony); see also PSR i! 76. A sentence of 22 months of supervised release thus falls within Congress's prescribed term of supervised release for Mr. Kahn's offenses. Moreover, as explained above, Mr. Kahn has fully complied with all terms of supervision during that time. For these reasons, the Court finds that the early termination of supervised release is in "the interest of justice." 18 U.S.C. § 3583(e)(l). B. The Relevant 18 U.S.C. § 3553(a) Factors Support the Early Termination of Supervised Release Because the threshold requirements for early termination of supervised release under 18 U.S.C. § 3583(e)(l) have been met, the Court next must consider whether early termination is consistent with the relevant 18 U.S.C. § 3553(a) factors. See 18 U.S.C. § 3583(e)(l); accord United States v. Mathis-Gardner, 783 F.3d 1286, 1288 (D.C. Cir. 2015). This inquiry is guided by the purpose of supervised release, which is to "fulfil[] rehabilitative ends." United States v. Johnson, 529 U.S. 53, 59 (2000). On balance, the Court finds that the Section 3553(a) factors weigh in favor of an early termination. i. Nature and Circumstances of the Offenses Mr. Kahn was convicted of serious offenses against the United States. See 18 U.S.C. § 3553(a)(l). As explained above, Mr. Kahn founded and led an organization that sold tax-defiance schemes to scores of customers. PSR ,r,r 14-16. In so doing, Mr. Kahn helped thousands of people frustrate the IRS's tax collection and enforcement efforts. PSR ,r 18. He also profited off this fraudulent scheme: from 1996 to 2004, his organization made $2 million in membership fees. Id. Based on this deceitful conduct, a jury found Mr. Kahn ~ilty of conspiring to defraud the United States and to commit mail fraud and of committing mail fraud. See Verdict Forms. This Court, 6 understanding the seriousness of the offense, sentenced Mr. Kahn to 20 years of imprisonment and 36 months of supervised release, the statutorily prescribed maximum term of imprisonment and supervised release for his convictions. PSR ,r,r 72, 76. The serious nature of Mr. Kahn's offenses suggest that a three-year term of supervised release could be necessary to ensure his transition back into the community. ii. Mr. Kahn's History and Characteristics While Mr. Kahn's criminal history does not weigh in favor of the early termination of supervised release, his characteristics do favor release. 18 U.S.C. § 3553(a)(l). As previously discussed, prior to the instant offenses, Mr. Kahn was convicted in the Middle District of Florida of conspiring to defraud the United States and making false or fraudulent claims to the United States. Approximately 20 years before those convictions, Mr. Kahn was convicted in the North District of Texas of three counts of willful failure to file tax returns, for which he was sentenced to three years' incarceration. PSR ,r 55. Despite his criminal history, since Mr. Kahn's release from prison and start of home confinement last year, Mr. Kahn has fully complied with all terms of supervision. iii. The Need to Afford Adequate Deterrence to Criminal Conduct and Protect the Public from Further Crimes Next, the Court finds that requiring Mr. Kahn to complete his term of supervised release is unnecessary to "afford adequate deterrence to criminal conduct" and "to protect the public from further crimes of the defendant." 18 U.S.C. § 3553(a)(2)(B)-(C). Based on the information before it, the Court has no reason to believe that Mr. Kahn will reoffend. Based on its analysis of Mr. Kahn's offenses and characteristics, the Probation Office does not believe that Mr. Kahn, at age 79, poses a danger to the community. None of Mr. Kahn's offenses involved violence. PSR at p. 13-15. Finally, since his release from prison, he has complied with all terms of supervision. In so 7 doing, Mr. Kahn has demonstrated his respect for this Court and for the law. For these Mr. Kahn, the Court has no reason to believe he will commit further crimes. The government nevertheless insists that a full period of supervised release is necessary "because of the seriousness of defendant Kahn's crimes and to continue to deter him from engaging in criminal conduct." Gov't Opp'n at 2. In support of its argument that "Mr. Kahn might still wish to offer followers" "the same false and frivolous positions that he promoted through ARL," the government points to a blog, Year of Jubile. Id. at 3-4. The blog, apparently run by two individuals, displays profiles of certain incarcerated and formerly incarcerated individuals and contains a letter written by Mr. Kahn, shortly after his release from incarceration, as well as a written interview of and a recorded phone call with Mr. Kahn, both dated at least one year before release. Id. The government argues that certain statements attributed to Mr. Kahn indicate that he still wishes to share a disrespect for the law with others. Id. The Court does not share the government's concerns. Only the letter posted to the blog is potentially relevant to this Court's determination on Mr. Kahn's motion, given its timing. In the letter, Mr. Kahn appears to acknowledge and respect the conditions of his release. See Ex. A to Gov't Opp'n, ECF No. 585-1, at 3. Additionally, none of his statements indicate a current willingness to participate in unlawful activities. Regardless, Mr. Kahn is not at liberty to commit the same or different crimes. Even with the early termination of the supervised release imposed by this Court, Mr. Kahn remains under supervised release by the Middle District of Florida. Finally, Mr. Kahn, through counsel, has represented to the Court "that if he has any 'followers,' he is unaware of them." Def.'s Reply at 2. Thus, because requiring Mr. Kahn to finish his full term of supervised release is not necessary to deter future criminal conduct or to protect the public, this factor weighs in favor of the early termination of supervised release. 8 iv. Sentencing Range for Mr. Kahn's Offenses The sentencing range established for Mr. Kahn's offenses further supports the early termination of supervised release. As explained above, the Court sentenced Mr. Kahn to the maximum term of supervised release: 36 months. See 18 U.S.C. § 3583(b)(2); see also PSR ,r 76. Terminating his supervised release after 22 months is thus fully consistent with Congress's prescribed term of supervised release for Mr. Kahn's offenses. v. Pertinent Policy Statement The Court is not aware of any "pertinent policy statement," so this factor has no impact on the Court's analysis. 18 U.S.C. § 3553(a)(S). vi. Need to Avoid Unwarranted Sentencing Disparities Reducing Mr. Kahn's term of supervised release from 36 months to 22 months will not cause "unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct." 18 U.S.C. § 3553(a)(6). Mr. Kahn was convicted at trial alongside three other ARL employees: Stephen Hunter, Danny True, and Allan Tanguay. PSR ,r,r 8-10. A third ARL employee, Jerry Williamson, pleaded guilty. Id. at ,r 11. As explained in the sections that follow, the early termination of Mr. Kahn's supervised release will not create an unwarranted sentence disparity with any of these co-defendants. See 18 U.S.C. § 3553(a)(6). a. Stephen Hunter and Danny True Co-defendants Stephen Hunter and Danny True were employees of ARL. PSR ,r,r 15-16. Hunter and True were both convicted of conspiring to defraud the United States and three counts of mail fraud. Id. ,r,r 8-9. Hunter and True both had a Criminal History Category of I. See Final PSR, United States v. Hunter, No. 08-cr-271-2, ECF No. 503, at ,r 56; Final PSR, United States v. True, No. 08-cr-271-3, ECF No. 505, at ,r 56. The Court sentenced each defendant to an aggregate 9 term often years' imprisonment plus 36 months' supervised release. Am. J, Hunter, ECF No. 530, at 3--4; Am. J., True, ECF No. 532, at 3--4. Because Hunter and True were convicted of three counts of mail fraud while Mr. Kahn was convicted of only one, reducing Mr. Kahn's term of supervised release to 22 months would not create an unwarranted sentencing disparity with these co-defendants. b. Allan Tanguay Co-defendant Allan Tanguay was another employee of ARL. PSR ,r,r 15-16. Tanguay was convicted of conspiring to defraud the United States and one count of mail fraud. Id. ,r 10. Like Hunter and True, Tanguay had a Criminal History Category ofl and was sentenced to an aggregate term of ten years' imprisonment as well as the maximum term of supervised release: 36 months. Am. J., United States v. Tanguay, No. 08-cr-271-5, ECF No. 406, at 2. Last year, Tanguay, at age 78, moved pro se for an early termination of supervised release after serving approximately half of his term of supervised release without incident. Mot., Tanguay, ECF No. 569. This Court reduced Tanguay's supervised release period to 22 months. Order, Tanguay, ECF No. 577. Given that Mr. Kahn and Tanguay were a) convicted of the same offenses and b) of similar ages and had served approximately half of their supervised release term before moving for a reduction, granting Mr. Kahn's motion would maintain consistency with his co-defendant Tanguay. c. Jerry Williamson Mr. Kahn's fourth co-defendant, Jerry Williamson, also worked as an employee for ARL. Plea Agreement, United States v. Williamson, No. 08-cr-271-4, ECF No. 104, at ,r,r 11-12. Based on his participation in the business, Williamson pleaded guilty to one count of mail fraud. Id. ,r 12. The Court sentenced him to five months in a community correctional facility, plus 36 months of supervised release. Am. J, Williamson, ECF No. 445, at 1-2. Unlike Mr. Kahn, however, 10 Williamson had a Criminal History Category of VI. Sentencing Mem., Williamson, ECF No. 338, at 6 n.4. Thus, the disparity between Williamson's and Kahn's terms of supervised release is not "unwarranted." 18 U.S.C. § 3553(a)(6). vii. Need to Provide Restitution Finally, Mr. Kahn was not sentenced to pay restitution, so "the need to provide restitution to any victims of the offense" does not affect the Court's analysis. 18 U.S .C. § 3553(a)(7). *** Taken together, the Court finds that the relevant Section 3553(a) factors support the early termination of supervised release. Though the serious nature of Mr. Kahn's offenses could suggest that a three-year term of supervised release is necessary to ensure his transition into the community, Mr. Kahn's record while under supervision shows this not to be the case. Early termination is further supported by the fact that Mr. Kahn was originally sentenced to the maximum term of supervised release authorized by statute, is unlikely to reoffend, and has both the means and ability to continue to make payments toward the satisfaction of his fine. For these reasons, the Court finds that the Section 3553(a) factors support the early termination of supervised release. IV. CONCLUSION Because Mr. Kahn meets the threshold requirements for an early termination of supervised release under 18 U.S.C. § 3583(e)(l ), and because the relevant 18 U.S.C. § 3553(a) factors support an early termination, the Court will GRANT Mr. Kahn's motion. A separate Order consistent with this Memorandum Opinion shall issue this date. Signed this 1,.~ day of November, 2022. Hon. Royce C. Lamberth United States District Judge 11	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488618/	NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. IN THE ARIZONA COURT OF APPEALS DIVISION ONE STATE OF ARIZONA, Respondent, v. OWEN ARVIE THOMPSON, Petitioner. No. 1 CA-CR 22-0156 PRPC FILED 11-22-2022 Petition for Review from the Superior Court in Maricopa County No. CR1997-012793 The Honorable Kathleen H. Mead, Judge REVIEW GRANTED; RELIEF DENIED COUNSEL Maricopa County Attorney’s Office, Phoenix By Krista Wood Counsel for Respondent Owen Arvie Thompson, Florence Petitioner STATE v. THOMPSON Decision of the Court MEMORANDUM DECISION Presiding Judge Jennifer M. Perkins, Judge James B. Morse Jr., and Judge Michael J. Brown delivered the decision of the Court. PER CURIAM: ¶1 Petitioner Owen Arvie Thompson seeks review of the superior court's order dismissing his petition for post-conviction relief, filed pursuant to Arizona Rule of Criminal Procedure 32.1. This is petitioner's third petition after being retried but his fourth in the case overall. ¶2 Absent an abuse of discretion or error of law, this court will not disturb a superior court's ruling on a petition for post-conviction relief. State v. Gutierrez, 229 Ariz. 573, 577, ¶ 19 (2012). It is petitioner's burden to show that the superior court abused its discretion by denying the petition for post-conviction relief. See State v. Poblete, 227 Ariz. 537, 538, ¶ 1 (App. 2011) (petitioner has burden of establishing abuse of discretion on review). ¶3 We have reviewed the record in this matter, the superior court's order denying the petition for post-conviction relief and amended petition for review. Petitioner has not established an abuse of discretion. ¶4 For the foregoing reasons, we grant review but deny relief. AMY M. WOOD • Clerk of the Court FILED: JT 2	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488641/	This is a mortgage foreclosure case. Upon consideration of the Motions for Summary Judgment filed by M&T Bank (“Plaintiff”) and Virginia Poore (“Defendant”) and the facts, arguments, and authorities set forth by the parties the Court finds as follows: 1. On March 28, 2006, Defendant executed a mortgage and note to Wilmington Trust. Defendant borrowed $80,000 through a home equity loan which was secured by the mortgage property located at 325 Canal Court, Bethany Beach, Delaware 19930. 2. The exact dates are unknown, but at some point after Defendant executed the mortgage with Wilmington Trust, Defendant’s grandson, Brandon Hottes, forged Defendant’s signature on checks from the Wilmington Trust home equity loan account. When Defendant spoke with Hottes about the fraud, he admitted to forging checks with at least one being for $5,000.1 Hottes is unsure of the number of checks he forged and how much money he stole.2 Hottes was later incarcerated for an unrelated offense in October 2010.3 Defendant never reported Hottes’ forgeries and thefts regarding the account to either Wilmington Trust or the police.4 1 Affidavit of Brandon Hottes. 2 Id. 3 Affidavit of Daniel Conway, Esq. 4 Id. 1 3. Wilmington Trust subsequently merged with Plaintiff and the entire account was assigned to Plaintiff on October 14, 2011. 4. On September 12, 2019, Plaintiff filed a scire facias sur mortgage action demanding the outstanding principle of $79,451.91 plus interest and fees. The complaint alleges that Defendant failed to pay the monthly installments of the mortgage. Defendant answered the complaint on October 15, 2019. 5. A scire facias sur mortgage action “is an in rem proceeding used to foreclose on a mortgage”.5 Delaware Law only recognizes three possible defenses to a scire facias sur mortgage action: payment, satisfaction, and plea in avoidance.6 A plea in avoidance challenges the validity of “the original mortgage sued upon.”7 Pleas in avoidance include, “an act of God, assignment of cause of action, conditional liability, discharge, duress, exception or proviso of statute, forfeiture, fraud, illegality of transaction, nonperformance of condition, precedent, ratification, unjust enrichment, and waiver.”8 6. As the movant, Plaintiff has the initial burden of demonstrating that there are no genuine issues of material fact. The Court has reviewed all of the documents submitted by Plaintiff and Defendant and cannot find anything that 5 JPMorgan Chase Bank v. Hopkins, 2013 WL 5200520, at 2 (Del. Super. Sept. 12, 2013). 6 Id. 7 LaSalle Nat’l Bank v. Ingram, 2005 WL 1284049, at 1 (Del. Super. May 19, 2005). 8 Shrewsbury v. The Bank of New York Mellon, 160 A.3d 471, 475 (Del. 2017) (quoting Gordy v. Preform Bldg. Components, Inc., 310 A.2d 893, 895-96) (Del. Super. Aug. 13, 1973)). 2 creates a genuine issue of material fact. Plaintiff has provided the document proving assignment of the mortgage and note from Wilmington Trust to Plaintiff. A successor bank after a merger can enforce the note and mortgage of the predecessor.9 Pursuant to 12 U.S.C. § 215a(e) banking associations participating in a merger shall be deemed the same corporation as each banking association participating in the merger and all rights, franchises, and interests shall be transferred to the receiving association. Accordingly, the successor bank after the merger acquires the rights of the predecessor bank.10 Plaintiff acquired the right to act and subsequently foreclose on Defendant’s account. Defendant does not contest that she entered into a mortgage and note with Plaintiff’s predecessor, Wilmington Trust.11 Plaintiff has met its burden on this issue. Once the movant has met its burden, the party opposing summary judgment must come forward with admissible evidence, other than mere denials, showing the existence of a genuine issue of fact.12 7. Defendant has not demonstrated an existence of a genuine issue of fact. Further, Defendant has not raised any cognizable defenses. Defendant attempts to assert a plea in avoidance due to Hottes’ forgeries and thefts. However, pursuant to 6 Del. C. § 4-406, it is the customers responsibility to exercise reasonable 9 CFS, LLC v. Bank of Am., 962 N.E.2d 151 (Ind. Ct. App. 2012). 10 Id. at 154. 11 Answer § Defenses ¶ 1. 12 Kennedy v. Giannone, 527 A.2d 732, 732 (TABLE) (Del. 1987) (citing E.K. Geyser Co. v. Blue Rock Shopping Center, Inc., 229 A.2d 499, 501 (Del. Super. 1967)). 3 promptness in examining their statements and to notify the bank of any unauthorized payment or use of the account. Defendant received numerous monthly statements alerting her to the balance she incurred on the account. It is clear Defendant breached her duty by failing to report Hottes’ activity to the bank and the police. Common sense dictates that a borrower cannot profit from failing to report fraudulent activity and then later deny use of the funds. 8. Essentially, Defendant attempts to merely deny she did not use the funds from the equity line and should not be responsible for paying back the money. What Defendant misses is her claim of fraud by Hottes is not relevant fraud. The fraudulent activity must have occurred on the part of the lender at the time of the initial mortgage transaction.13 The fraudulent activity cannot be something that occurs afterwards such as the thefts by Defendant’s grandson. 9. Defendant also moved for summary judgment but her motion must be denied. As previously stated, Plaintiff is able to satisfy its burden of proving no genuine issues of material fact exist. Plaintiff has proven that Defendant is indebted to it and Defendant does not deny that the mortgage exists.14 Defendant’s attempted defense of plea in avoidance has no merit for the reasons stated in this opinion. 13 La Salle, 2005 WL 1284049, at *2. 14 Answer § Defenses ¶ 1. 4 10. Plaintiff is entitled to summary judgment. There is no dispute as to any material fact and Defendant cannot establish any cognizable defenses. Plaintiff is the valid assignee of the mortgage and is entitled to enforce the underlying note. NOW, THEREFORE, this 22 day of November 2022, Plaintiff’s Motion for Summary Judgment is hereby GRANTED and JUDGMENT is entered in favor of Plaintiff M&T Bank. IT IS SO ORDERED. /s/ Mark H. Conner Mark H. Conner, Judge cc: Prothonotary 5	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488635/	USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 1 of 9 [DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 21-14057 Non-Argument Calendar ____________________ UNITED STATES OF AMERICA, Plaintiff-Appellee, versus GUSTAVO ALBRIZA, JR., Defendant-Appellant. ____________________ Appeal from the United States District Court for the Northern District of Florida D.C. Docket No. 1:20-cr-00012-AW-GRJ-1 ____________________ USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 2 of 9 2 Opinion of the Court 21-14057 Before LUCK, BRASHER, and EDMONDSON, Circuit Judges. PER CURIAM: Gustavo Albriza, Jr., appeals his convictions for possessing with intent to distribute methamphetamine and a mixture contain- ing heroin and fentanyl and for being a felon in possession of am- munition. On appeal, Albriza challenges the district court’s denial of his motion to suppress evidence seized during a traffic stop. No reversible error has been shown; we affirm. I. In March 2021, Deputy Jeffrey Stadnicki was on patrol in a high-crime area of Fairbanks, Florida. Deputy Stadnicki observed Albriza at a gas station with two other persons, including Crystal Cummings: a woman known to Deputy Stadnicki as a local drug dealer. A couple of weeks earlier, Deputy Stadnicki had received a tip “that a white Hispanic male with tattoos from Ocala was sup- plying Crystal Cummings with methamphetamine.” Albriza’s physical appearance matched this description. Deputy Stadnicki ran a search on the tag on the car Albriza was driving and discovered that the tag was assigned to a different vehicle. Deputy Stadnicki continued to observe Albriza as Albriza drove out of the gas station. Shortly thereafter, Albriza failed to stop properly at an intersection. Deputy Stadnicki stopped the car. Deputy Stadnicki also called for backup. USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 3 of 9 21-14057 Opinion of the Court 3 At 5:44 PM, Deputy Stadnicki instructed Albriza to get out of the car. Deputy Stadnicki told Albriza that one reason for the stop was because the tag was not assigned to the car Albriza was driving. Albriza confirmed that he knew the tag did not match the car. Albriza said he lost the title for the car and was thus unable to register the car in his name or update the tag. The only documen- tation Albriza provided for the car was an insurance card with an- other person’s name on it. Albriza also gave inconsistent information about the owner of the car. Albriza first said he bought the car from his friend “Zay” (a male) but could not provide Zay’s full name. After running the VIN number on the vehicle, Deputy Stadnicki learned that the car’s owner was listed as a woman with the last name “Calvin.” Albriza later said that he bought the car from “Zay’s aunt.” Never did Al- briza mention “Calvin.” After determining that the car had not been reported stolen, Deputy Stadnicki told Albriza he was going to issue three written warning citations: for having an unassigned tag, for stopping im- properly, and for failing to change the address on his driver’s li- cense. While writing the citations, Deputy Stadnicki continued asking Albriza questions, including questions about how Albriza came to possess the car. At 6:18 PM -- while Deputy Stadnicki was still completing the written citations -- a K-9 unit arrived on the scene. Deputy Stadnicki asked one of the backup officers to finish the citations. Deputy Stadnicki then ordered the two passengers out of the car. USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 4 of 9 4 Opinion of the Court 21-14057 An officer walked the police dog around the vehicle, and the dog alerted immediately to the presence of narcotics. Then, Dep- uty Stadnicki searched the vehicle and discovered a large quantity of methamphetamine and fentanyl. Officers also found a bullet in Albriza’s pocket. An arrest was made. Albriza moved to suppress the drugs and the bullet seized during the traffic stop. Albriza conceded that the initial traffic stop was lawful but argued that Deputy Stadnicki prolonged unlawfully the traffic stop to wait for the K-9 unit to arrive. Following a sup- pression hearing, the district court denied Albriza’s motion. The district court determined that the traffic stop lasted no longer than necessary to address its initial mission. In the alternative, the dis- trict court also determined that -- to the extent the stop was pro- longed -- reasonable suspicion existed to justify the extension. Albriza entered a conditional guilty plea, reserving his right to appeal the district court’s denial of his motion to suppress. The district court sentenced Albriza to imprisonment followed by some supervised release. II. We review the district court’s denial of “a motion to sup- press evidence under a mixed standard, reviewing the court’s find- ings of fact for clear error and the application of law to those facts de novo, construing the facts in the light most favorable to the pre- vailing party below.” See United States v. Pierre, 825 F.3d 1183, 1191 (11th Cir. 2016). We review de novo a district court’s USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 5 of 9 21-14057 Opinion of the Court 5 determinations about reasonable suspicion. See Ornelas v. United States, 517 U.S. 690, 699 (1996). In this appeal, we consider only whether the duration of the traffic stop was lawful. At the motion-to-suppress hearing, Albriza said expressly that he raised no argument challenging the lawful- ness of the initial traffic stop. Albriza concedes -- and we agree -- that Albriza has thus waived that argument. Nor does Albriza chal- lenge the lawfulness of the dog sniff itself: Albriza argues only that Deputy Stadnicki prolonged the traffic stop to give time for the K- 9 unit to arrive. When an officer makes a lawful traffic stop, he does not have “unfettered authority to detain a person indefinitely.” United States v. Campbell, 26 F.4th 860, 881 (11th Cir. 2022) (en banc). A traffic stop “is unlawfully prolonged when an officer, without rea- sonable suspicion, diverts from the stop’s purpose and adds time to the stop in order to investigate other crimes.” Id. at 884. The pur- pose of the traffic stop includes addressing the traffic violation that prompted the stop and attending to “related safety concerns.” Ro- driguez v. United States, 575 U.S. 348, 354 (2015). An officer’s mis- sion during a traffic stop includes “ordinary inquiries incident to the traffic stop” such as “checking the driver’s license, determining whether there are outstanding warrants against the driver, and in- specting the automobile’s registration and proof of insurance.” Id. at 355 (brackets omitted). “These checks serve the same objective as enforcement of the traffic code: ensuring that vehicles on the road are operated safely and responsibly.” Id. USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 6 of 9 6 Opinion of the Court 21-14057 A. On appeal, Albriza contends that Deputy Stadnicki pro- longed unlawfully the duration of the traffic stop (1) by frisking Al- briza, (2) by asking questions about Albriza’s destination, (3) by ask- ing questions about the car’s ownership after learning that the car had not been reported stolen, (4) by asking questions of Albriza while writing the warning citations, and (5) by failing to seek more assistance from the backup officers. Viewing the evidence in the light most favorable to the gov- ernment, we cannot conclude that Deputy Stadnicki prolonged un- lawfully the traffic stop. First, Deputy Stadnicki was permitted to conduct a brief pat-down search of Albriza’s person. See United States v. Purcell, 236 F.3d 1274, 1277 (11th Cir. 2001) (“[O]fficers conducting a traffic stop may ‘take such steps as are reasonably nec- essary to protect their personal safety,’” including “conducting a protective search of the driver.”). Further, the questions Deputy Stadnicki asked about Al- briza’s destination and about the car’s ownership were questions related reasonably to the purpose of the traffic stop. See Rodri- guez, 575 U.S. at 355 (ordinary inquiries incident to a traffic stop include “inspecting the automobile’s registration and proof of in- surance”); Campbell, 26 F.4th at 885 (“Generally speaking, ques- tions about travel plans are ordinary inquiries incident to a traffic stop.”); United States v. Braddy, 11 F.4th 1298, 1311 (11th Cir. 2021) (determining that questions about the car’s ownership were “well within the scope of the traffic stop”); United States v. Holt, 777 F.3d USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 7 of 9 21-14057 Opinion of the Court 7 1234, 1256 (11th Cir. 2015) (“[A]n officer may prolong a traffic stop to investigate the driver’s license and the vehicle registration.”). That the car had not been reported stolen did not resolve conclusively that Albriza was in lawful possession of the car. Given Albriza’s inability to provide proof of registration and Albriza’s conflicting answers about the identity of the person from whom he supposedly bought the car, Deputy Stadnicki’s inquiries about the car’s true owner -- even after learning that the car was not reported stolen -- fell within the scope of the traffic stop’s mission. We also reject Albriza’s argument that Deputy Stadnicki prolonged unlawfully the traffic stop by not delegating more tasks to the backup officers. The backup officers were called to the scene chiefly to avoid having Deputy Stadnicki outnumbered by the car’s three occupants: a purpose related to officer safety. The backup officers also assisted Deputy Stadnicki by escorting Albriza to re- trieve his cell phone and by completing the written warnings after the K-9 unit arrived. That Deputy Stadnicki performed many of the routine traffic-related tasks himself is no evidence that he failed to act “diligently” and “expeditiously.” The stop has not been shown to have been too long. B. Albriza next challenges the district court’s separate determi- nation that any prolongation of the stop was justified by reasonable suspicion of other criminal activity. USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 8 of 9 8 Opinion of the Court 21-14057 In deciding whether reasonable suspicion existed at the per- tinent time, we “look at the ‘totality of the circumstances’ of each case to see whether the detaining officer has a ‘particularized and objective basis’ for suspecting legal wrongdoing.” See United States v. Arvizu, 534 U.S. 266, 273 (2002). We consider whether reasonable suspicion existed objectively under the circumstances: an officer’s subjective motivations are immaterial to whether a traf- fic stop is reasonable under the Fourth Amendment. See Whren v. United States, 517 U.S. 806, 813 (1996). Police may rely “on their own experience and specialized training to make inferences from and deductions” about the infor- mation before them, and we “give due weight to the officer’s expe- rience” when examining the totality of the circumstances. See United States v. Lindsey, 482 F.3d 1285, 1290-91 (11th Cir. 2007); United States v. Briggman, 931 F.2d 705, 709 (11th Cir. 1991). Rea- sonable suspicion need not be based solely on an officer’s personal observations; information supplied by a third person may also give rise to reasonable suspicion justifying an investigatory stop if the information bears “sufficient indicia of reliability.” See Navarette v. California, 572 U.S. 393, 397 (2014). The totality of the circumstances involved in this case, viewed in the light most favorable to the government, gave rise to reasonable suspicion that Albriza was involved in criminal activity beyond the initial traffic violation. Deputy Stadnicki had received an earlier confidential tip that a person matching Albriza’s physical description was supplying a known drug dealer (Cummings) with USCA11 Case: 21-14057 Date Filed: 11/22/2022 Page: 9 of 9 21-14057 Opinion of the Court 9 methamphetamine. Albriza and Cummings were then seen to- gether in a high-crime area. Shortly after being stopped, Albriza confirmed that he was from Ocala: information that corroborated another detail from the confidential tip. Albriza appeared unusually nervous during the stop. Albriza told Deputy Stadnicki that he was headed to Cummings’s home but declined to identify Cummings by name. Albriza also admitted that the tag attached to the car was not assigned to that car: a tactic Deputy Stadnicki recognized based on his training and experience as indicative of drug-trafficking or other criminal activity. Albriza was also unable to produce proof of ownership of the car and gave conflicting stories about the car’s owner. Given these circumstances, an objective officer in Deputy Stadnicki’s position would have a particularized and objective basis to suspect that the car might be stolen and that Albriza was in- volved in drug-trafficking activity. Thus -- even to the extent Dep- uty Stadnicki’s repeated inquiries about the car’s owner constituted questions aimed at investigating criminal activity beyond the initial traffic infraction -- Deputy Stadnicki by then had reasonable suspi- cion to justify extending the stop to conduct further investigation. Those questions, thus, could not prolong unlawfully the traffic stop. The district court committed no error in denying Albriza’s motion to suppress. We affirm Albriza’s conviction. AFFIRMED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488642/	2022 IL App (1st) 210575 SECOND DIVISION November 22, 2022 No. 1-21-0575 ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________ PROJECT44, INC., ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County. ) v. ) 20-L-4183 ) FOURKITES, INC., ) Honorable ) James E. Snyder, Defendant-Appellee. ) Judge Presiding. ) _____________________________________________________________________________ JUSTICE ELLIS delivered the judgment of the court, with opinion. Justices Howse and Cobbs concurred in the judgment and opinion. 1 OPINION ¶1 This appeal concerns defamation, the making of a false statement (written or oral) about the plaintiff that injures the plaintiff’s reputation. Because defamation is premised on reputational harm, it is not enough that the plaintiff, personally, heard or read the false statement; that statement must be transmitted to at least one other person besides the plaintiff. In legal vernacular, the false statement must be “published” to a “third party,” meaning literally anyone else besides the plaintiff. So, for example, if Individual A falsely tells Individual B, and only 1 Oral argument was held in this case via Zoom technology. Due to technical difficulties, Justice Cobbs was unable to fully participate in the oral argument but has listened to the full recording of the argument, as well having reviewed the briefs and otherwise participated in deliberations. No. 1-21-0575 Individual B, that Individual B does business with terrorists, no defamation has occurred, because only Individual B heard the false statement—it was not “published” to a third party. A private conversation like that would not be actionable defamation. But if another person—even one more person—heard the defamation, the defamation would be deemed “published.” ¶2 This publication rule is a cornerstone of defamation law. But it becomes more complicated when the one being defamed is not an individual but a corporation—and when the “third parties” to whom the defamatory statement was “published” are officers or employees of that same corporation. Are directors, executives, officers, or employees of a corporation “third parties” when the entity being defamed is the very corporation they serve? Or are these people to be considered so much a part of the corporation as to constitute the corporation itself? That is the question before us here. ¶3 The two corporations at the center of this appeal—project44, Inc. (which intentionally styles itself by the lowercase), and FourKites, Inc.—compete against each other in the hotly contested field of shipping logistics, where they both track and monitor packages sent throughout the world. In 2019, two members of project44’s board of directors received an email from an anonymous Gmail account that accused project44, among other things, of engaging in accounting fraud and being associated with the Chicago mafia. Shortly thereafter, project44’s recently hired chief financial officer received a similar message from a different e-mail address. ¶4 Project44 tried to discover who sent the e-mails. Its investigation tied the e-mail accounts to computers associated with FourKites. Believing that its competitor was trying to sabotage its business, project44 sued FourKites and several unknown “Does” for defamation. ¶5 In the circuit court, FourKites argued that the defamatory messages were never published to a “third party,” as required by defamation law. FourKites claimed that project44’s board 2 No. 1-21-0575 members and CFO were part and parcel of the corporation and inseparable from it—in other words, the people who received the messages were project44. And since you must publish a defamatory message to a third party for it to be harmful, there was no publication. The trial court agreed and dismissed the case on the basis that no publication occurred. ¶6 We do not agree. Our law has long recognized that a corporation can have its own reputation and identity, and if that reputation is attacked, it may use defamation actions to defend itself. And because a company’s reputation can be separate and distinct from those who run it, even at an executive level, we reject the idea that the corporation is the same as the agents who oversee it. Since the allegedly defamatory messages targeted project44’s reputation—not the reputation of the recipients—the defamatory messages were published to a third party. We thus reverse the judgment of dismissal and remand for further proceedings. ¶7 BACKGROUND ¶8 Because this case was dismissed for failure to state a claim, we accept all well-pleaded facts in the complaint as true and adopt all reasonable inferences in favor of the plaintiff. Kolegas v. Heftel Broadcasting Corp., 154 Ill. 2d 1, 8-9 (1992); 735 ILCS 5/2-615 (West 2020). ¶9 Project44 and FourKites are shipping logistics companies who directly compete with one another for both customers and employees. Both are incorporated in Delaware but primarily operate out of Chicago. ¶ 10 Jim Baum and Kevin Dietsel are members of project44’s board of directors but are not employees. On May 19, 2019, they received an e-mail from “Ken Adams,” from a seemingly valid Gmail address. The e-mail’s subject line read “Accounting improprieties at P44.” ¶ 11 In the e-mail, Adams claimed to be a former project44 employee who recently left. He wrote that project44 used the threat of libel and defamation lawsuits to silence former 3 No. 1-21-0575 employees, and that the family of one of project44’s employees “used to be the book keeper [sic] for the Chicago Mafia and they are using that to silence folks.” The message also accused project44 of “rampant accounting improprieties” and encouraged Baum and Dietsel to look at the company’s contracts for malfeasance. The e-mail also alleged that “there is widespread discontent brewing and it’s just a matter of time before people go public and another Theranos happen [sic] in Chicago.” ¶ 12 For context, the complaint alleges that the reference to “Theranos” compared project44 to Theranos, Inc., a company that fraudulently claimed to create a revolutionary blood-testing device that later was determined to be bunk. See, e.g., In re Arizona Theranos, Inc., Litigation, 308 F. Supp. 3d 1026, 1036-39 (D. Ariz. 2018). The company is now embroiled in extensive and well-publicized litigation, and two of its key leaders, Elizabeth Holmes and Ramesh Balwani, have been convicted of various counts of fraud. ¶ 13 On May 27, 2019, a sender from another Gmail address going by the name “Jason Short” sent Tim Bertrand, project44’s chief financial officer (CFO), an e-mail. Jason congratulated Bertrand on joining project44 but added that he wanted to give Bertrand some information so he could “fled [sic] ASAP and go find another job.” Referring to a social media post Bertrand made, Jason said “you mention people, investors etc. in your [post]. There is one ingredient you missed—a great product. At some point you have to stop selling [expletive] and start delivering.” ¶ 14 Jason also claimed project44 was a Ponzi scheme and compared it to Theranos. He invited Bertrand to talk to the company’s former CFO, other ex-employees, customers, prospects, and outside investors but said that Bertrand would be making “a mistake” if he forwarded the message to project44’s current CEO. “I sincerely wish you the best,” Jason said in closing. “You seem like a nice guy, you deserve better.” 4 No. 1-21-0575 ¶ 15 Neither a “Ken Adams” or “Jason Short” ever worked at project44. On the assumption that both names were pseudonyms, project44 began investigating the source of the defamatory messages. Using petitions for discovery, project44 traced the Gmail accounts to computers associated with FourKites. Additionally, project44 was able to trace one of the accounts to an unknown internet protocol (IP) address operated by AT&T Mobility. Based on the investigation, project44 determined the messages came from someone associated with FourKites. ¶ 16 Coming up on the one-year limitations period, project44 filed a three-count suit against FourKites and various unknown “Does” who allegedly sent the messages. Counts I and II alleged that the May 19 and 26 e-mails were defamation per se against project44’s reputation, while count III alleged that the parties engaged in a civil conspiracy to defame project44. Court filings indicate that project44 intended to continue trying to identify the anonymous “Does” and would presumably add them to the suit if their identities were discovered. ¶ 17 FourKites moved to dismiss the complaint, among other reasons, because the alleged defamatory statements were never “published” to a third party. In the eyes of FourKites, since Baum and Dietsel, the directors, and Bertrand, the CFO, were core members of project44’s leadership, the defamatory messages were, in essence, communicated to the “person” being defamed. In other words, Baum, Dietsel, and Bertrand were project44, not third parties separate and distinct from the corporate entity. ¶ 18 The circuit court agreed and dismissed the case, finding that the messages were not published and, thus, the defamation claim failed as a matter of law. Since the defamation claims failed, the court also dismissed the claim for civil conspiracy to commit defamation. ¶ 19 ANALYSIS ¶ 20 We are presented with a question that might be seem easy, even obvious, if the defendant 5 No. 1-21-0575 were a natural person and not a corporate form, but which becomes more complicated when we introduce the corporate entity: When a false statement about a corporation is transmitted only to the people who make up the leadership of that company, has that false statement been “published” to a third party for purposes of defamation law? Are the directors, officers, agents, and employees of a corporation sufficiently separate and distinct from the corporation as to qualify as “third parties” in that context? ¶ 21 We begin with the basics. To establish defamation, the plaintiff must show that (1) the defendant made a false statement about the plaintiff, (2) the defendant published that false statement to a third party, and (3) the published statement damaged the plaintiff’s reputation. Goldberg v. Brooks, 409 Ill. App. 3d 106, 110 (2011). There is no question that a corporation, just as a natural person, may maintain a defamation action under the same elements. See, e.g., American International Hospital v. Chicago Tribune Co., 136 Ill. App. 3d 1019, 1024-25 (1985); Audition Division, Ltd. v. Better Business Bureau of Metropolitan Chicago, Inc., 120 Ill. App. 3d 254, 256 (1983); Life Printing & Publishing Co. v. Field, 327 Ill. App. 486, 488-49 (1946). ¶ 22 This appeal turns on the element of publication to a third person. “Publication” is a term of art in defamation law, but it is an essential element of any defamation claim. Missner v. Clifford, 393 Ill. App. 3d 751, 763 (2009). Usually, satisfying the publication element is straightforward; an allegedly defamatory statement is “published” when the defendant communicates that statement to anyone besides the plaintiff. See Brooks, 409 Ill. App. 3d at 110; Emery v. Northeast Illinois Regional Commuter R.R. Corp., 377 Ill. App. 3d 1013, 1022 (2007); Jones v. Britt Airways, Inc., 622 F. Supp. 389, 391 (N.D. Ill. 1985) (applying Illinois law). ¶ 23 FourKites, at this pleading stage, does not dispute that the allegedly defamatory e-mail messages were sent to Baum, Dietsel, and Bertrand. But the parties disagree over whether these 6 No. 1-21-0575 three individuals constitute “third parties” for purposes of defamation law. ¶ 24 Project44 claims that its directors, Baum and Dietsel, and its CFO, Bertrand, are “third parties” because the corporation has its own separate and distinct reputation. On the other hand, FourKites responds that a corporation can only act through its agents, managing principals, and governing board, which of course is true. See Small v. Sussman, 306 Ill. App. 3d 639, 647 (1999). So for all intents and purposes, says FourKites, the directors and CFO are the company. FourKites thus believes there was no “publication” here, as the messages were only transmitted to the company itself. ¶ 25 We are aware of no case law from Illinois that addresses this question, and we have been cited none. The parties consider this a question of first impression. For that matter, neither the parties nor our independent research have found more than a small handful of cases dealing with our precise question. ¶ 26 But we are not entirely adrift. We have considered a similar question in the context of defamatory communications made entirely within a corporation. More specifically, we have held that, when one employee defames another employee, and that defamation is transmitted to other coworkers within that same corporate structure, those other coworkers are considered “third parties” for defamation purposes. See, e.g., Popko v. Continental Casualty Co., 355 Ill. App. 3d 257, 260-61 (2005). The defamed employee has a reputational interest separate and apart from that of the corporation. See id. ¶ 27 The court in Popko referred to this doctrine as the “publication rule” or its converse, the “nonpublication rule” (id.), but since that could confuse things in the different context in which we find this appeal, we will refer to that doctrine from Popko more specifically as the “intracorporate publication” rule. Under that doctrine, interoffice reports or communications that 7 No. 1-21-0575 are circulated among employees within a corporation have been “published” to “third parties” for defamation purposes. Id.; see also Gibson v. Philip Morris, Inc., 292 Ill. App. 3d 267, 272 (1997); Jones, 622 F. Supp. at 391 (interpreting Illinois law). ¶ 28 This “intracorporate publication” rule often comes into play when employees are terminated based on defamatory comments made by management or coworkers within the corporation. See, e.g., Popko, 355 Ill. App. 3d at 259. The aggrieved employee then sues her former employer (and the employee who defamed her) for transmitting those defamatory statements. See id. at 259-60; Gibson, 292 Ill. App. 3d at 269-72; Jones, 622 F. Supp. at 390-91. In Illinois, the corporation that is named as the defendant in such an action cannot claim a lack of publication—it cannot defeat the lawsuit by claiming that the interoffice statements were merely “the corporation talking to itself.” Popko, 355 Ill. App. 3d at 263; Gibson, 292 Ill. App. 3d at 274. ¶ 29 For what it’s worth, Illinois is part of a growing majority of jurisdictions that has adopted the “intracorporate publication” rule. See 2 Rodney A. Smolla, Law of Defamation §§ 15:8, 15:9 (2d ed. 2022) (collecting cases; “This now appears to be the majority position and is gaining momentum.”); Jane M. Draper, Defamation: Publication by Intracorporate Communication of Employee’s Evaluation, 47 A.L.R.4th 647 (2022). The Restatement adopts this view as well. See Restatement (Second) of Torts § 577 cmt. i (1977) (“The communication within the scope of his employment by one agent to another agent of the same principal is a publication not only by the first agent but also by the principal and this is true whether the principal is an individual, a partnership or a corporation.”). ¶ 30 So we know from our adoption of the “intracorporate publication” rule that an employee of a corporation can be a “third party” when hearing or reading defamatory statements made by 8 No. 1-21-0575 one employee about another employee within the company. And that is as it should be. In that context, Employee A has attacked the reputation of Employee B with defamatory matter transmitted to their coworkers. It would make no sense to lump Employee A, Employee B, and those coworkers into one corporate bundle and claim that what transpired was just “the corporation talking to itself.” Popko, 355 Ill. App. 3d at 263; Gibson, 292 Ill. App. 3d at 274. Doing so would deny the reality that Employee B has her own personal reputation within the company deserving of protection, just as she has one outside the company. It is only proper to allow that employee redress. ¶ 31 Project44 submits that, just as the “intracorporate publication” rule respects the distinction between the reputations of an individual employee and that of the corporation, we should likewise recognize that distinction here. That is, in the context here, where it is the corporation being defamed, the individual employees or directors to whom the defamation is published likewise should be considered “third parties” to the defamation. ¶ 32 Though the analogy is not perfect, we agree with project44. And it comes down to this: A corporation is not only concerned with its reputation to the outside world. Just as employees care about their reputation within the corporation, the corporation cares about its reputation among its own employees—be they high-ranking executives, lower-level workers, or non-employee directors. Any corporation has an interest in attracting and keeping good employees. Indeed, many people today choose to work for a company based as much on the culture or values of that company as on the job functions they perform. Defamation that threatens the corporation’s reputation within the company can be just as damaging as defamation published beyond the corporate walls. It would be odd, indeed, for the law to redress one of those reputational harms but not the other. 9 No. 1-21-0575 ¶ 33 Perhaps the most fitting illustrations of this point would be those involving corporate sabotage. A competitor might communicate false statements about Corporation A to employees of Corporation A in the hopes of damaging the corporation’s reputation among its workforce— whether to generally sow discontent, throw a wrench in its productivity, cause valuable employees to leave, or even steal away those employees. ¶ 34 We need look no further than the allegations of the complaint before us (which we say again are only allegations at this point). If we are to believe the allegations, agents of FourKites sent an e-mail to project44’s recently hired CFO, falsely alleging accounting improprieties at project44 and explicitly urging him to leave before a major fraud scandal broke. If true, it requires no imagination to say that the point of this e-mail, if nothing else, was to drive that CFO out of a company he had just joined. The other e-mail was sent to two members of the board of directors, likewise (allegedly falsely) accusing project44 of accounting improprieties and urging them to conduct an internal investigation. It would be reasonable to infer that the sender of this e- mail, at a minimum, was trying to inject chaos into project44’s workplace. ¶ 35 Simply put, the complaint alleges that FourKites was sending false, destructive messages to high-ranking officers and directors of project44, obviously intending to cause damage to project44 in various ways. It would be unrealistic, unfair, and contrary to any principle of defamation law we recognize to embrace the artifice that these directors and officers were merely part and parcel of the corporation, that no harm to project44’s reputation occurred because nobody besides the corporation itself received these messages. We thus hold that, by alleging the transmission of defamatory messages about project 44 to directors and an officer of project44, the complaint adequately alleges publication. ¶ 36 Our view is in line with those of leading scholars on the subject, as well as the 10 No. 1-21-0575 Restatement provision on publication. See 3 Dan B. Dobbs, The Law of Torts § 520 (2d ed. 2011) (“the plaintiff is entitled to her reputation with her agents as well as with others”); Prosser and Keeton on the Law of Torts § 113, at 798 (W. Page Keeton et al. eds., 5th ed. 1984) (defamatory message may be published “to any third person. It may be made to a member of the plaintiff’s family, including his wife, or to the plaintiff’s agent or employee.” (Emphasis added.)); Restatement (Second) of Torts § 577 cmt. e (1977) (“the communication to a servant or agent of the person defamed is a publication”). ¶ 37 As project44 notes, our view is also in line with that of New York, which has addressed this very subject. As a federal court of appeals recently quoted New York law on this subject: “ ‘There are decisions in some States that a communication of defamatory matter to an agent of the person defamed in response to an inquiry does not constitute a publication to a third person ... [b]ut the better view seems to us to be that taken in another line of cases, holding that the communication to the plaintiff’s agent is a publication, even though the plaintiff’s action may ultimately be defeated for other reasons. The agent is, in fact, a different entity from the principal; the communication to the agent is, in fact, a publication to a third person.’ ” (Emphasis added.) Sleepy’s LLC v. Select Comfort Wholesale Corp., 909 F.3d 519, 528 (2d Cir. 2018) (quoting Teichner v. Bellan, 181 N.Y.S.2d 842, 845 (App. Div. 1959)). ¶ 38 FourKites raises several arguments why we should find that the CFO and directors were, in fact, part and parcel of the corporation, and thus no publication was alleged here. First, it cites decisions from Utah and Florida where the courts held that transmitting a defamatory message about a corporation to an officer of that corporation is not publication. ¶ 39 We are not persuaded by the Florida decision, Hoch v. Loren, 273 So. 3d 56, 57 (Fla. 11 No. 1-21-0575 Dist. Ct. App. 2019), principally because Florida is a jurisdiction that, unlike Illinois, does not recognize the “intracorporate publication” doctrine we discussed earlier. See, e.g., American Airlines, Inc. v. Geddes, 960 So. 2d 830, 834 (Fla. Dist. Ct. App. 2007) (communications between executive or managerial employees of the same corporation are “the corporation talking to itself”). Florida courts do not believe that individual employees have reputational interests distinct from their corporation, but Illinois does. ¶ 40 The district court in Fausett v. American Resources Management Corp., 542 F. Supp. 1234, 1241 (D. Utah 1982), noted that this question was one of first impression in Utah. The court reasoned that the individuals there who received the defamatory message, the top management of a company known as ARMCOR, could not be considered distinct from the company: “The law of defamation protects against the impugning of one’s reputation or causing his alienation from his peers. There simply exists no potential for ARMCOR’s reputation to be reduced or for ARMCOR to be alienated from its managers, customers, shareholders, institutional lenders, etc., when the defamatory statements are made to its management.” Id. ¶ 41 For the reasons we have already stated, we do not accept that there is “no potential” for a corporation’s reputation to be impugned to its employees at any level. And again, the allegations at issue here tell the story, if true, of a message sent to the newly hired CFO of project44 that made damaging allegations about project44 and explicitly advised the CFO to leave the company before a scandal broke. Taken as true at this stage, is that not the very definition of trying to drive a wedge between a corporation and its employee—to cause the CFO “to be alienated” from project44? Id. 12 No. 1-21-0575 ¶ 42 Beyond that, the district court in Fausett addressed the passages in Professor Prosser’s treatise and the Restatement, which we discussed above and cite again here. See Prosser and Keeton on the Law of Torts § 113, at 798 (W. Page Keeton et al. eds., 5th ed. 1984) (defamatory message may be published “to any third person. It may be made to a member of the plaintiff’s family, including his wife, or to the plaintiff’s agent or employee.” (Emphasis added.)); Restatement (Second) of Torts § 577 cmt. e (1977) (“the communication to a servant or agent of the person defamed is a publication”). ¶ 43 The district court noted that the cases that Prosser and the Restatement cited for support did not involve communications to upper management of the corporation. Fausett, 542 F. Supp. at 1241-42. But that is more a reflection of the dearth of case law on this subject than anything else. Both sources used the word “agent.” We do not see why a CEO or president or director would be considered any less of an “agent” of a corporation than low-level employees. If either Prosser or the Restatement (or, for that matter, Professor Dobbs) had intended to carve out an exception within the corporate realm for “agents” who were higher up on the corporate ladder, one would think it would have warranted at least a brief mention. See 3 Dan B. Dobbs, The Law of Torts § 520 (2d ed. 2011) (“the plaintiff is entitled to her reputation with her agents as well as with others”). ¶ 44 FourKites further argues that, if we hold that the transmission of an anticorporate message to the corporation’s top executives qualifies as publication, we will be effectively “eviscerating” the publication requirement in the context of commercial defamation. And doing so, says FourKites, will lead to a floodgate of lawsuits in which corporations will bludgeon its critics into silence through defamation claims—even those critics who raise valid concerns in good faith about the practices of that corporation. 13 No. 1-21-0575 ¶ 45 We certainly agree that the law should and does protect those who engage in valid discourse about corporate practices. We likewise agree that the leaders of that corporation are the people to whom those criticisms are best addressed. As FourKites aptly puts it, “If an individual cannot contact the chief executives or board members of a company to express their concerns about the company, who can they contact?” (Emphasis in original.) ¶ 46 Our disagreement is not on whether defamation law protects sincere, good-faith communications regarding corporate practices but on how the law does so. FourKites would have us use the “publication” element of a defamation claim to close the door to these defamation claims. But doing so would go too far—it would not only protect sincere, good-faith communicators from defamation liability; it would also protect those who transmit false messages in bad faith. If we hold, as FourKites urges, that a false statement about a corporation that is transmitted to an officer of that corporation can never be deemed published, then we will be insulating from liability not only those who act in good faith but those who act in bad faith, as well. ¶ 47 The tool the law uses is not the impenetrable wall of “publication” but the filter of “privilege.” That is, a published defamatory statement is not necessarily actionable if the defendant can establish either an absolute or qualified privilege for publishing the communication. “A privileged communication is one that might be defamatory and actionable except for the occasion on which, or the circumstances under which, it is made.” Dent v. Constellation NewEnergy, Inc., 2022 IL 126795, ¶ 30. “The defense of privilege rests upon the idea ‘that conduct which otherwise would be actionable is to escape liability because the defendant is acting in furtherance of some interest of social importance, which is entitled to protection even at the expense of uncompensated harm to the plaintiff’s reputation.’ ” Edelman, 14 No. 1-21-0575 Combs & Latturner v. Hinshaw & Culbertson, 338 Ill. App. 3d 156, 164 (2003) (quoting Prosser and Keeton on the Law of Torts § 114, at 815 (W. Page Keeton et al. eds., 5th ed. 1984)). ¶ 48 The circumstances under which a qualified privilege may be found, at least in Illinois, include “ ‘(1) situations in which some interest of the person who publishes the defamatory matter is involved[;] (2) situations in which some interest of the person to whom the matter is published or of some other third person is involved[;] and (3) situations in which a recognized interest of the public is concerned.’ ” (Internal quotation marks omitted.) Dent, 2022 IL 126795, ¶ 31 (quoting Fowler V. Harper, Fleming James & Oscar S. Gray, The Law of Torts § 5.25, at 216 (2d ed. 1986)); see also Kuwik v. Starmark Star Marketing & Administration, Inc., 156 Ill. 2d 16, 28-29 (1993). ¶ 49 Courts in Illinois have not hesitated to apply a qualified privilege to insulate defendants from commercial defamation liability. See, e.g., Dent, 2022 IL 126795, ¶ 35 (published defamatory statements by investigator of workplace sexual harassment allegations were privileged); Kamberos v. Schuster, 132 Ill. App. 2d 392 (1971) (defamatory statements about attorney made by her supervisors in memoranda and job evaluation reports were published but protected by qualified privilege); Welch v. Chicago Tribune Co., 34 Ill. App. 3d 1046 (1975) (defamatory message about employee posted on newsroom bulletin board was published, but defense of qualified privilege might shield defendant from liability). ¶ 50 Indeed, we made this same observation in Popko, 355 Ill. App. 3d 265, when discussing the “intracorporate publication” doctrine, in response to a concern by the defendant that an expansive view of the “publication” element would inordinately expose a company to 15 No. 1-21-0575 defamation claims for communications that served a valid purpose. We found that such communications, when made for a valid reason in good faith, are protected by a qualified privilege. Id. We reasoned that using privilege to differentiate between valid and invalid claims of commercial defamation “properly balances competing interests,” as opposed to “granting what would amount to an absolute privilege” for defendants if we applied an across-the-board rule that no statement transmitted to corporate executives could ever be deemed “published.” Id. ¶ 51 Simply put, holding that anti-corporation statements made to an officer of that corporation could never be deemed “published” would throw out defamation lawsuits that otherwise had merit—even if the statements were false, even if they were made deliberately in bad faith, even if they damaged the reputation of the corporation in the eyes of those officers. It would go too far. But deeming those statements “published,” when received by that corporate officer, would permit meritorious cases to go forward while still allowing for the defense of qualified privilege (or in the rare case, absolute privilege) to insulate those statements deserving of protection. ¶ 52 We are aware that some courts have blurred this distinction between publication and privilege. Indeed, in discussing the split in jurisdictions over the “intracorporate publication” doctrine, one commentator noted that “[t]he conflict of views is, apparently, attributable to a confusion between publication and privilege.” Jane M. Draper, Defamation: Publication by Intracorporate Communication of Employee’s Evaluation, 47 A.L.R.4th 647, § 2[a] (2022). Illinois law, however, firmly respects that distinction. ¶ 53 We have discussed the defense of qualified privilege only to fully explain our reasoning and to respond to concerns raised by FourKites. We express no opinion on the application of qualified privilege to this matter. 16 No. 1-21-0575 ¶ 54 We simply hold here that the two e-mails at issue—one sent to two directors of project44 and the other to project44’s CFO, each of which included derogatory statements about project44—were “published” for the purposes of defamation law. The judgment of the circuit court is reversed. ¶ 55 CONCLUSION ¶ 56 The judgment of the circuit court is reversed. The cause is remanded for further proceedings. ¶ 57 Reversed and remanded. 17 No. 1-21-0575 Project44, Inc. v. FourKites, Inc., 2022 IL App (1st) 210575 Decision Under Review: Appeal from the Circuit Court of Cook County, No. 20-L-4183; the Hon. James E. Snyder, Judge, presiding. Attorneys Douglas A. Albritton and Peter G. Hawkins, of Actuate Law, LLC, for of Chicago, for appellant. Appellant: Attorneys Scott M. Gilbert and Adam Weiss, of Polsinelli PC, of Chicago, for for appellee. Appellee: 18	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488638/	UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA KEVIN HATTON, Plaintiff, v. Civil Action No. 22-1587 (RDM) ANUJA MEHROTRA, et al. Defendants. MEMORANDUM OPINION In April 2022, pro se Plaintiff Kevin Hatton filed a complaint in the Superior Court of the District of Columbia, naming the Court Services and Offender Supervision Agency (“CSOSA”) and Community Supervision Officer (“CSO”) Anuja Mehrotra as Defendants. Dkt. 1-2 at 4. The complaint stated: “I have been on a 4 p.m. curfew with a GPS for 22 months. While employed[,] I am constantly harassed and denied my rights to op[]erate my music career . . . . I am also a victim of false imprisonment . . . [and] was . . . framed as non-compli[ant] with no documented proof.” Id. He seeks $50,000 in damages. Id. at 25. CSOSA and Mehrotra removed the case to federal district court pursuant to 28 U.S.C. § 1442, Dkt. 1, and then moved to dismiss the action for lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to effect proper service under Rule 12(b)(5), Dkt. 9. Defendants assert that the doctrine of derivative jurisdiction precludes this Court’s exercise of subject-matter jurisdiction, id. at 7, and that Plaintiff has not properly served the federal defendants as required under Rule 4, id. at 9. The Court issued a Fox/Neal order, advising Plaintiff that, if he “fail[ed] to respond to Defendant’s motion in the time provided, the Court may (1) treat the motion as conceded; (2) rule on Defendants’ motion based on Defendants’ arguments alone and without considering Plaintiff’s arguments; or (3) dismiss Plaintiff’s claims for failure to prosecute.” Dkt. 10 at 1 (internal citations omitted). Plaintiff’s opposition to the motion to dismiss was due on October 11, 2022; that date passed without Plaintiff filing any opposition. On October 25, 2022, the Court noted that Plaintiff had not responded to Defendants’ motion and that Plaintiff had not appeared in the case since it was removed on June 3, 2022. See Min. Order (Oct. 25, 2022). At that time, the Court again ordered Plaintiff to respond to the pending motion to dismiss—this time, on or before November 15, 2022—and admonished Plaintiff that failure to respond to the motion or to otherwise respond to the Court’s order would result in dismissal for failure to prosecute. Id. A copy of the Court’s October 25, 2022 order was returned to the Court as undeliverable on November 17, 2022. 1 See Dkt. 11. The Court may dismiss a case for failure to prosecute “upon the Court’s own motion.” Local Civ. R. 83.23; Bristol Petrol. Corp. v. Harris, 901 F.2d 165, 167 (D.C. Cir. 1990) (“‘[W]hen circumstances make such an action appropriate,’ a district court may dismiss an action on its own motion because of a party’s failure to comply with court orders designed to ensure orderly prosecution of the case.” (quoting Link v. Wabash R.R. Co., 370 U.S. 626, 633 (1962))). Furthermore, the Court may order a party to “file a memorandum of points and authorities in opposition” to a motion, and, “[i]f such a memorandum is not filed within the prescribed time, the Court may treat the motion as conceded.” Local Civ. R. 7(b). Because Plaintiff (1) has had no contact with this Court and has taken no action in this case after filing his complaint; (2) has 1 It is Plaintiff’s obligation to keep this Court apprised of his current address. This Court’s local rules provide that “[n]otice of a change in address . . . of . . . a party not represented by an attorney must be filed within 14 days of the change. Unless changed by notice filed with the Clerk, the address and telephone number of a party or an attorney noted on the first filing shall be conclusively taken as the last known address and telephone number of the party or attorney.” Local Civ. R. 5.1(c)(1). 2 failed to respond to Defendants’ long-pending motion to dismiss; and (3) has disregarded the Court’s orders, the Court will dismiss the action for failure to prosecute. See Bristol Petrol. Corp., 901 F.2d at 167. CONCLUSION For the foregoing reasons, the Court will dismiss this action without prejudice. A separate order will issue. /s/ Randolph D. Moss RANDOLPH D. MOSS United States District Judge Date: November 22, 2022 3	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8488636/	USCA11 Case: 19-14439 Date Filed: 11/22/2022 Page: 1 of 5 [DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 19-14439 Non-Argument Calendar ____________________ ROBERTO ANTONIO CANALES-VASQUEZ, Petitioner, versus U.S. ATTORNEY GENERAL, Respondent. ____________________ Petition for Review of a Decision of the Board of Immigration Appeals Agency No. A206-315-173 ____________________ USCA11 Case: 19-14439 Date Filed: 11/22/2022 Page: 2 of 5 2 Opinion of the Court 19-14439 Before ROSENBAUM, JILL PRYOR, and BLACK, Circuit Judges. PER CURIAM: Roberto Canales-Vasquez seeks review of the Board of Im- migration Appeals’ (BIA) final order affirming the Immigration Judge’s (IJ) denial of his application for protection under the United Nations Convention Against Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment (CAT). He further con- tends the IJ’s denial of his asylum and withholding of removal claims was based on a failure to consider the totality of the circum- stances. We first address his CAT claim, then his arguments about asylum and withholding of removal. I. DISCUSSION A. CAT Claim We review only the BIA’s decision, except to the extent it expressly adopts the decision of the IJ. Sanchez-Castro v. U.S. Att’y Gen., 998 F.3d 1281, 1285 (11th Cir. 2021). Factual determinations, including whether a noncitizen has established eligibility for CAT relief, are reviewed under the substantial evidence test. Lingeswa- ran v. U.S. Att’y Gen., 969 F.3d 1278, 1293–94 (11th Cir. 2020); Ro- driguez v. U.S. Att’y Gen., 735 F.3d 1302, 1308 (11th Cir. 2013). To be eligible for CAT relief, an alien has the burden of showing that he will, more likely than not, be tortured if removed to his country of removal. 8 C.F.R. § 208.16(c)(2). In this context, “torture” means USCA11 Case: 19-14439 Date Filed: 11/22/2022 Page: 3 of 5 19-14439 Opinion of the Court 3 any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a per- son for such purposes as obtaining from him or her or a third person information or a confession, punishing him or her for an act he or she or a third person has committed or is suspected of having committed, or intimidating or coercing him or her or a third person, or for any reason based on discrimination of any kind, when such pain or suffering is inflicted by or at the instigation of or with the consent or acquiescence of a public official or other person acting in an official capacity. Id. § 208.18(a)(1). Government officials will be deemed to have ac- quiesced to torture only when they are aware of the activity con- stituting torture before such activity happens and then breach their legal responsibility to intervene to prevent it. Sanchez-Castro, 998 F.3d at 1288. The government does not acquiesce to torture where it attempts to combat the violence or other criminal activity, even if its attempts are unsuccessful. Id. (explaining even if the peti- tioner was correct in arguing the police were not effective in con- trolling gang violence, “it is dispositive that they are trying to do so”). Substantial evidence supports the determination Canales- Vasquez did not demonstrate he more likely than not would be tortured by or with the acquiescence of the Salvadoran govern- ment. Canales-Vasquez specifically acknowledged no one on be- half of the government had threatened to harm him in the past or USCA11 Case: 19-14439 Date Filed: 11/22/2022 Page: 4 of 5 4 Opinion of the Court 19-14439 intended to harm him in the future. Additionally, the Country Re- port and other documentary evidence Canales-Vasquez submitted shows the Salvadoran government has jailed more than 13,000 cur- rent or former gang members, out of a total gang population of approximately 70,000, and has attempted to combat gang activities despite public distrust, equipment shortages, and other obstacles. The limited success, or lack thereof, of these efforts does not influ- ence a finding of governmental acquiescence, as the attempt alone is dispositive. See id. Accordingly, we deny Canales-Vasquez’s pe- tition as to CAT relief. B. Asylum and Withholding of Removal We “may review a final order of removal only if . . . the alien has exhausted all administrative remedies available to the alien as of right.” 8 U.S.C. § 1252(d)(1). The exhaustion requirement is ju- risdictional and precludes review of a claimant’s argument if it was not presented to the BIA. Amaya-Artunduaga v. U.S. Att’y Gen., 463 F.3d 1247, 1249-50 (11th Cir. 2006). To the extent Canales-Vasquez references asylum and with- holding of removal in his initial brief to the Court, his failure to brief those issues before the BIA precludes this Court’s review for two reasons. First, the BIA did not make any holdings that Canales- Vasquez was ineligible for asylum and withholding of removal and instead only held those applications were not before it because he had conceded them, which Canales-Vasquez does not challenge on appeal. Thus, his arguments about past and future persecution or a nexus to a protected ground are not before this Court as those USCA11 Case: 19-14439 Date Filed: 11/22/2022 Page: 5 of 5 19-14439 Opinion of the Court 5 arguments are unrelated to any conclusions reached by the BIA in its decision. See Gonzalez v. U.S. Att’y Gen., 820 F.3d 399, 403 (11th Cir. 2016) (explaining because the BIA’s decision is the final agency judgment, we do “not consider issues that were not reached by the BIA”). Additionally, in any event, Canales-Vasquez did not exhaust any argument he is eligible for asylum or withholding of removal because he did not raise this issue in his brief to the BIA and, in fact, expressly conceded his ineligibility before the BIA. He therefore failed to give the BIA a full opportunity to consider these claims and reverse any potential error by the IJ. See Indrawati v. U.S. Att’y Gen., 779 F.3d 1284, 1297 (11th Cir. 2015) (“Though ex- haustion does not require a petitioner to use precise legal terminol- ogy or provide a well-developed argument to support her claim, it does require that she provide information sufficient to enable the BIA to review and correct any errors below.” (quotation marks and alteration omitted)). Accordingly, we dismiss his petition as to this issue. II. CONCLUSION We deny Canales-Vasquez’s petition as it relates to CAT re- lief, and dismiss his petition as it relates to asylum and withholding of removal. PETITION DENIED IN PART, DISMISSED IN PART.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494703/	MEMORANDUM OPINION WENDELIN I. LIPP, Bankruptcy Judge. Before the Court is the “Amended Complaint by Lafarge North America, Inc. to Determine Dischargeability of Debt (11 U.S.C. § 528(a)) and to Object to Debtor’s Discharge (11 U.S.C. § 727(a))” (the “Amended Complaint”) and the “Debtor’s Supplemental Answer and Affirmative Defenses to All Counts of Plaintiffs Complaint” (the “Answer”). The Court held a two-day trial on May 10-11, 2011, at the conclusion of which the parties were permitted to file post-trial briefs. The Court has considered the pleadings filed by the parties, the oral arguments made by counsel, the testimony given at trial, and the exhibits admitted into evidence. For the following reasons, the Court finds in favor of the Plaintiff on Count II of the Amended Complaint and the Debtor shall be denied a discharge pursuant to 11 U.S.C. § 727(a)(7). I. Findings of Fact The following facts were either stipulated to by the parties or established at trial, and are relevant to the Court’s determination.1 Plaintiff, Lafarge North America, Inc., (“Plaintiff’ or “Lafarge”) is a Maryland Corporation that maintains its principal places of business in Herndon, Virginia, and Southfield, Michigan. Defendant, William Everett Poffenberger (“Debtor”, “Defendant” or “Poffenberger”) is a resident of Maryland. Poffenberger was the stockholder (with his wife, as tenants by the entirety), officer and director of Everett V. Moser, Inc. (“Moser”), a ready-mix concrete producer.2 Moser can be described as a family business. Moser was started by the Debtor’s grandfather and was eventually inherited by the Debt- or and his siblings.3 The Debtor’s son, Dwayne Poffenberger, worked for Moser performing maintenance and dispatch duties and driving a truck from the time he was a teenager until it ceased operating. The Debtor’s daughter, Billi Jo Horseman, worked for Moser from 1996 until it ceased operating. While working for Moser, Ms. Horseman handled Moser’s accounts receivable, accounts payable, payroll, and answered Moser’s telephones. In September, 2000, Moser sought and obtained credit from Lafarge so that it could make open-account purchases of cement from Lafarge. On or about September 8, 2000, Poffenberger and Moser signed and submitted to Lafarge a written Credit Application and Agreement (the “Application”). Pursuant to the Application, Poffenberger personally guaranteed payment of the amounts due to Lafarge by Moser. After establishing credit with La-farge, and for years thereafter, Moser purchased cement from Lafarge and, in due course, made payment therefore. Neither 812Moser nor the Debtor made any payment to Lafarge for any cement purchased by Moser from and after early June, 2008. In July, 2009, Lafarge filed suit in the Circuit Court for Frederick County, Maryland against Moser and the Debtor (the “State Court Action”). In the State Court Action, the Debtor and Moser denied the allegations of Lafarge’s complaint concerning the amounts due Lafarge and their obligations to pay those amounts. In the State Court Action, Lafarge served document discovery requests to Poffenberger and Moser by mail on September 16, 2009. At some point in October, 2009, Poffenber-ger concluded that Moser could no longer continue in business and he informed his children that he was going to close Moser and file for bankruptcy protection. Also in October, 2009, Poffenberger retained his bankruptcy counsel, Craig Palik, Esq. On October 19, 2009, Poffenberger and Moser served written responses to the document discovery requests served by Lafarge on September 16, 2009. On October 30, 2009, Moser first produced documents to La-farge. Moser’s accounts payable ledger pertaining to Lafarge, a copy of which had been requested by Lafarge on September 16, 2009, was not produced to Lafarge until November 16, 2009. The Debtor testified that between the end of October, 2009, and the beginning of November, 2009, the Comptroller of Maryland placed a lien on Moser’s business bank accounts. The Debtor further testified that approximately two weeks later, the Comptroller of Maryland placed a lien on the Debtor’s personal bank account. On or around November 4, 2009, the Debtor, in contemplation of a sale of Mos-er’s concrete mixing vehicles, obtained an appraisal of those vehicles. On November 18, 2009, the documents for the formation of Bolivar Ready Mix, LLC (“Bolivar”) were signed. Like, Moser, Bolivar is a ready-mix concrete business. Bolivar is owned by the Debtor’s children, Dwayne Poffenberger and Billi Jo Horseman. On November 23, 2009, Bolivar filed its Articles of Organization. On November 25, 2009, Lafarge filed a motion for summary judgment in the State Court Action. On December 6, 2009, Moser ceased operations. On December 7, 2009, Bolivar deposited a check in the amount of $2,000.00 into its operating account. The check was from Compass, a former customer of Mos-er’s, and was a prepayment for materials purchased by Compass from Bolivar. On December 8, 2009, Moser purchased materials from Lafarge despite having ceased operations two days earlier. Also on December 8, 2009, Bolivar commenced operations out of the same plant from which Moser had operated, Bolivar made its first delivery to Compass, the same customer who had pre-paid Bolivar, and Bolivar hired the Debtor as a driver. On December 10, 2009, a bill of sale was executed reflecting the sale of all of Moser’s concrete mixing vehicles to Bolivar. Without its vehicles, Moser no longer had the ability to produce or deliver concrete. Moser Farms, Inc. (owned by Poffenberger and his wife as tenants by the entirety) provided the financing to Bolivar that enabled Bolivar to acquire the Moser vehicles. The Debtor testified that Moser Farms, Inc. acquired the funds it loaned to Bolivar from the Debtor and his wife, who had borrowed the money from John and Nancy Hendricks (the “Hendricks Loan”). The Hendricks Loan was neither listed on the Debtor’s original bankruptcy schedules, nor on the Debtor’s amended bankruptcy schedules, as either an obligation of the Debtor’s or as a debt owed to the Debtor by Moser Farms, Inc. On December 10, 8132009, Moser and Poffenberger’s counsel in the State Court Action (Leslie Powell, Esq.) moved to withdraw from her representation. On December 23, 2009, Poffen-berger filed his Chapter 7 Voluntary Petition (the “Petition Date”). Prior to cessation of its business operations, Moser had operated on (and was obligated to pay rent for its use of) real property owned by an entity known as Moser, LLC, and utilized (and was obligated to pay rent for its use of) a concrete batching plant also owned by Moser, LLC. Moser, LLC was and still is owned by Poffenberger and his wife as tenants by the entirety. Beginning in December, 2009, and continuing since then, Bolivar has operated its ready-mix concrete business at the same location from which Mos-er had operated. Bolivar has also been utilizing the same trucks (which were purchased by Bolivar) and concrete batching plant (leased now by Bolivar) as was used by Moser in the operation of its business. Bolivar pays or is obligated to pay Moser, LLC for the use of the real property and concrete plant used by Bolivar. Other than the concrete-mixing vehicles, Bolivar did not purchase any of Moser’s assets— tangible or intangible. On February 25, 2010, Lafarge informally requested documents regarding any transactions between Bolivar and either or both Moser or the Debtor. Prior to Moser’s bankruptcy filing on March 30, 2010, no public notice was given or public filing made disclosing the sale and transfer of Moser’s concrete mixing vehicles to Bolivar. Prior to March 30, 2010, Moser did not advise Lafarge of the sale and transfer of its concrete mixing vehicles to Bolivar. During the first nine months of Bolivar’s operations, Bolivar billed approximately $690,000.00 to Moser’s former customers. After its formation, Bolivar continued to make payments to North Star Foundations, a foundation company, for a loan North Star Foundations made to Moser that was guaranteed by the Debtor, Dwayne Poffenberger and Billi Jo Horseman. Although Bolivar is not indebted to North Star Foundations, it continued to pay this obligation. The Debtor testified that he had not made any payments to North Star Foundations since he filed his bankruptcy petition and that he believed that the loan was being paid by Bolivar. Dwayne Poffenberger and Billi Jo Horseman both testified that they had guaranteed the loan from North Star Foundations to Moser and that Bolivar was making payments to North Star Foundations on account of its loan to Moser. Lafarge’s summary judgment motion against Moser (filed in the State Court Action) was granted, without any opposition, on March 3, 2010, and judgment was entered in favor of Lafarge and against Moser in the amount of $357,172.29 (the “Judgment”). In aid of enforcement of the Judgment, on March 15, 2010, a subpoena seeking information was issued by the Circuit Court for Frederick County, Maryland to Bolivar. The Parties stipulated that the subpoena was duly served on Bolivar. Similar discovery was sought from Moser. In March, 2010, Lafarge sought court-ordered discovery from Moser in the State Court Action on an expedited basis. In response to Lafarge’s motion, on March 18, 2010, Douglas K. Thornton, Esquire appeared for Moser in the State Court Action and requested additional time to respond to Lafarge’s discovery requests. Mr. Thornton’s March 18, 2010 appearance for Moser was made at Moser’s request and direction, communicated by Poffenber-ger. On March 18, 2010, the Court in the 814State Court Action entered an Order (the “Discovery Order”) compelling Moser to produce, on or before March 30, 2010, all of the documents Lafarge had sought in its motion. Moser did not respond to the Discovery Order on or prior to March 30, 2010. On March 30, 2010, Moser filed a petition under Chapter 7 of the Bankruptcy Code (“Moser Bankruptcy”), as authorized by Moser’s shareholders. At all times during the period January, 2008 through March 30, 2010, Poffenberger was the President of Moser. At all times during the period January, 2008 through March 30, 2010, Poffenberger and his -wife were, as tenants by the entirety, the sole shareholders of Moser. On April 22, 2010, Lafarge filed motions in the Moser Bankruptcy and in the Debt- or’s bankruptcy case seeking separate orders for Rule 2004 examinations of Moser and Poffenberger, respectively. Lafarge’s motions for Rule 2004 examinations were granted by Orders dated April 26, 2010 and May 7, 2010, respectively (the “Rule 2004 Orders”). Poffenberger and Moser timely provided some, but not all of the documentary discovery required by the Rule 2004 Orders. Documents were first produced by Moser and Poffenberger via e-mail at 7:00 p.m. on May 20, 2010. Both Moser and Poffenberger advised on May 21, 2010, that additional documentary discovery required by the Rule 2004 Orders would be provided. Poffenberger’s deposition was rescheduled in order to permit production of materials required by the Rule 2004 Orders, and extensions of time to object to Poffenberger’s discharge were correspondingly required. Motions for those extensions were made and orders obtained upon consent of the parties. The documents reflecting the use of the proceeds arising from the sale of Moser’s vehicles to Bolivar (the “Moser-Bolivar Transaction”) were not disclosed to La-farge until June 4, 2010. During the June 17, 2010 examination of Poffenberger (individually and on behalf of Moser), Lafarge’s counsel requested that Moser and Poffenberger provide evidence to support the claims set forth in the verified schedules filed in the Moser Bankruptcy, that Moser was indebted to Dwayne Poffenberger and Billi Joe Horseman. Also during the June 17, 2010 examination of Poffenberger, Lafarge requested documents to support the financing of the Moser-Bolivar Transaction, which documents Lafarge ultimately received. On or about June 17, 2010, Moser agreed to provide whatever documents it had to support the claims of Poffenberger’s children against Moser. Moser did not produce any documents to support the claims of Poffenberger’s children against Moser.4 II. Analysis Count I of the Amended Complaint seeks a determination that the debt owed by the Debtor to Lafarge is nondischargeable under 11 U.S.C. § 523(a)(6). Count II of the Amended Complaint seeks a denial of the Debtor’s discharge pursuant to 11 U.S.C. §§ 727(a)(2), (4), and (7). Because the Court finds that Plaintiff prevails on Count II of the Amended Complaint, it will begin its analysis there. A. 11 U.S.C. §§ 727(a)(2) and (7) Count II of the Amended Complaint seeks a denial of the Debtor’s dis815charge under 11 U.S.C. § 727(a). “Section 727 of the Bankruptcy Code allows debtors to receive a general discharge of their debt in keeping with the Code’s purpose of giving honest debtors a fresh start ‘unhampered by the pressure and discouragement of preexisting debt.’ ” Wachovia Bank, N.A. v. Voccia (In re Voccia), Adv. No. 09-03242-DOT, 2011 WL 351187, at 5 (Bankr.E.D.Va. Feb. 1, 2011) (citing Farouki v. Emirates Bank Int’l, Ltd,., 14 F.3d 244, 249 (4th Cir.1994)). “However, provisions enumerated in § 727(a)(1)-(10) prohibit a discharge for those who ‘play fast and loose with their assets or with the reality of their affairs.’ ” Id. (citing Farouki, 14 F.3d at 249). Due to the extreme penalty imposed by Section 727, i.e., the denial of discharge, objections to discharge are construed strictly against the objecting party and liberally in favor of the debtor. See State Bank of India v. Chalasani (In re Chalasani), 92 F.3d 1300, 1310 (2d Cir.1996). The party objecting to a debtor’s discharge bears the burden of proving its objection by a preponderance of the evidence. See Farouki, 14 F.3d at 249. “Although the burden may shift to the debtor to provide satisfactory, explanatory evidence once the creditor has established a prima facie case, the ultimate burden rests with the creditor.” Id. “A party objecting to discharge need prove only one of the grounds for non-dischargeability under § 727(a) because the provisions of § 727(a) are phrased in the disjunctive.” Id. at 250. In this case, Count II of the Amended Complaint seeks a denial of the Debtor’s discharge pursuant to Sections 727(a)(2)(A), (a)(4), and (a)(7). Section 727(a)(2)(A) provides, in relevant part: (a) The court shall grant the debtor a discharge, unless— (2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed— (A) property of the debtor, within one year before the date of the filing of the petition; or (B) property of the estate, after the date of the filing of the petition[.] 11 U.S.C. § 727(a)(2).5 Section 727(a)(2) “serves to deny a discharge when the debtor ‘attempts to prevent the collection of his debts by concealing or disposing of assets.’ ” In re Voccia, 2011 WL 351187, at 5 (quoting Butler v. Ingle (In re Ingle), 70 B.R. 979, 983 (Bankr.E.D.N.C.1987)). To bar a debtor’s discharge under Section 727(a)(2)(A), the plaintiff must prove each of the following elements by a preponderance of the evidence: (1) the debtor transferred, removed, destroyed, mutilated or concealed, (2) his or her property, (3) within one year of the bankruptcy petition’s filing, (4) with the actual intent to hinder, delay, or defraud a creditor. See Adamson v. Bernier 816(In re Bernier), 282 B.R. 773, 780 (Bankr.D.Del.2002). “Because direct evidence of a debtor’s intent usually will be unavailable, it may be inferred from the circumstances surrounding his objectionable conduct.” Matter of Krehl, 86 F.3d 737, 743-744 (7th Cir.1996). “The intent determination often will depend upon a bankruptcy court’s assessment of the debtor’s credibility, making deference to the court’s finding particularly appropriate.” Id. Because direct evidence of fraudulent intent is rare, courts may rely on certain badges or indicia of fraud to determine whether a transfer was fraudulently conducted under Section 727. See Zanderman, Inc. v. Sandoval (In re Sandoval), No. 96-2391, 1998 WL 497475, at 2 (4th Cir. Aug. 10, 1998). These “badges of fraud” include: (1) whether there is a lack or inadequacy of consideration for the transfer; (2) whether there is a family or insider relationship between the parties; (3) whether there is some retention of possession, benefit or use of the property in question by the debtor; (4) whether the financial condition of the debtor before and after the transfer is suspicious; (5) whether there is a pattern or series of transactions after the onset of the financial difficulties or pendency of threat of suit by creditors; (6) whether there is a suspicious chronology of events and transfers; (7) whether the debtor attempted to keep the transfer a secret; and (8) the proximity of the transfer to the debtor’s bankruptcy filing. See id.; West v. Abdelaziz (In re Abdelaziz), Adv. No. 11-6017, 2012 WL 359756, at 3 (Bankr.M.D.N.C. Feb. 2, 2012) (citing Perkins v. Arnold (In re Arnold), 2009 WL 5217056, at 4 (Bankr.M.D.N.C.2009)). “The presence of just one of the above listed factors can warrant a court’s conclusion that a transfer was fraudulently made, and, certainly, the presence of several factors ‘can lead inescapably to the conclusion that the debtor possessed the requisite intent.’ ” In re Sandoval, 1998 WL 497475, at 2 (quoting In re Penner, 107 B.R. 171, 175 (Bankr.N.D.Ind.1989)). “Indeed, certain ‘badges of fraud’ will strongly suggest a purpose to defraud unless some other convincing evidence appears.” Cullinan Associates, Inc. v. Clements, 205 B.R. 377, 380 (W.D.Va.1995) (citing In re Woodfield, 978 F.2d 516, 518 (9th Cir.1992)). In this case, the Court finds that Plaintiff proved, by a preponderance of the evidence, that the Debtor transferred Mos-er’s assets with the intent to hinder, delay and defraud Plaintiff. In fact, the Court finds that of the eight enumerated badges of fraud set forth above, seven are present in this case and when taken together, warrant the denial of the Debtor’s discharge. The timeline of events is key to the Court’s analysis and highlights the various indicia of fraud present in this case. In July of 2009, Lafarge commenced the State Court Action against Moser and the Debtor for their failure to pay amounts due and owing to Lafarge. At some point in October of 2009, the Debtor retained his bankruptcy counsel, Craig Palik, Esq. Also in October of 2009, the Debtor concluded that Moser could no longer continue in business and the Debtor informed his children that he was going to close Moser and file for bankruptcy.6 Somewhere between the end of October, 2009 and the first of November, 2009, the Comptroller of Mary817land placed a lien on Moser’s business bank accounts. Approximately two weeks later, the Comptroller of Maryland placed a lien on the Debtor’s personal bank account. On November 4, 2009, the Debtor obtained an appraisal of Moser’s vehicles in contemplation of their sale. On November 16, 2009, Moser’s accounts payable ledger was produced to Lafarge in connection with the State Court Action. On November 18, 2009, the documents for the formation of Bolivar were signed. Bolivar is owned by the Debtor’s two children, Dwayne Poffenberger and Billi Jo Horseman. On November 23, 2009, Bolivar filed its Articles of Organization. On December 6, 2009, Moser ceased operations. On December 8, 2009, Bolivar commenced operations out of the same plant from which Moser had operated. Also on December 8, 2009, Ms. Horseman testified that Bolivar made its first delivery and hired the Debt- or as a driver. Moser’s bank statement for December, 2009, which was admitted into evidence as Plaintiffs Exhibit No. 45, reflects that on December 8, 2009, after it ceased operations, Moser purchased materials from Lafarge. On December 10, 2009, a bill of sale was executed reflecting the sale of all of Moser’s trucks to Bolivar. Without its vehicles, Moser no longer had the ability to produce or deliver concrete. The vehicles were purchased with funds borrowed from the Debtor and his spouse, and then loaned to the Debtor’s children.7 No other equipment, inventory or personal property of Moser’s, including customer lists, was purchased by Bolivar. On December 23, 2009, the Debtor filed his personal bankruptcy petition. On February 25, 2010, Lafarge requested, informally, documents regarding any transactions between Bolivar and either or both of Moser or the Debtor. On March 3, 2010, judgment was entered in favor of Lafarge and against Moser in the amount of $357,172.29 in the State Court Action. On March 18, 2010, an Order compelling Moser to produce documents requested by Lafarge was entered in the State Court Action setting a production deadline of March 30, 2010. The documents were not produced by March 30, 2010. Instead, on March 30, 2010, Moser, through the Debtor, filed its bankruptcy petition. Prior to March 30, 2010, Moser did not advise Lafarge that it sold all of its vehicles to Bolivar. From December 2009 through August 2010, Bolivar billed nearly $700,000.00 to Moser’s former customers. This timeline reveals several badges of fraud. It highlights the undisputed fact that the transfer of Moser’s assets to Bolivar was between family members. It also shows that the Debtor retained some benefit from the transfer because he was employed by Bolivar. The chronology of events and transfers are suspicious in that the aforementioned events all happened within a very short period of time and while Lafarge and other creditors were actively pursuing their claims against the Debtor and Moser. The Debtor testified that he did not dispute that Moser owed money to Lafarge or that he had guaranteed Moser’s obligation. Rather, the Debtor testified that he merely questioned approximately $10,000.00 of the total balance due to Lafarge, which was ultimately determined to exceed $350,000.00. More818over, the transfer of Moser’s assets and formation of Bolivar were done without Lafarge’s knowledge, and the delay in producing documents that would have revealed the transfer is evidence of the Debtor’s efforts to keep the transfer a secret until it was completed. Lastly, the transfer of Moser’s assets to Bolivar took place less than two weeks before the Debt- or’s bankruptcy filing. An additional indicia of fraud present in this case is the lack of consideration paid by Bolivar for Moser’s assets. Although Bolivar paid what appears to be the fair market value for Moser’s trucks, nothing was paid for any of the intangible assets Bolivar received from Moser. For instance, during the first nine months of its operations, Bolivar billed approximately $690,000.00 to former customers of Moser. Nevertheless, Bolivar paid nothing for Moser’s customer lists. Bolivar also received the benefit of Moser’s reputation, it retained key employees of Moser, and it operated out of the same location as Mos-er. These intangible assets, including the transfer of Moser’s customers and Moser’s goodwill, have value and the fact that Bolivar paid nothing for them is evidence that Bolivar was created to carry on Moser’s business free from the pressures of La-farge and other creditors. Further evidence that Bolivar was simply a continuation of Moser is the fact that Moser purchased materials from Lafarge on December 8, 2009, even though it had ceased operating on December 6, 2009. Coincidentally, Bolivar first poured concrete on December 8, 2009, and made its first delivery on December 8, 2009, two days prior to the execution of the bill of sale for the vehicles purchased from Moser by Bolivar. There was no evidence that Bolivar had purchased materials on or pri- or to December 8, 2009, and Ms. Horseman could not recall whether she or her brother had used their personal credit cards to purchase materials for Bolivar during the month of December, 2009. This circumstantial evidence leads to the conclusion that Bolivar used materials purchased by Moser to mix its first batch of concrete on December 8, 2009. There is no other explanation for Moser’s purchase of materials after it ceased operating. Also important is the fact that Bolivar continued to make payments to North Star Foundations for a loan North Star Foundations made to Moser that was guaranteed by the Debtor, Dwayne Poffenberger and Billi Jo Horseman. Although Bolivar was not indebted to North Star Foundations, it continued to pay this obligation, which benefitted Moser and the Debtor until their respective bankruptcy cases were filed. The timeline and indicia of fraudulent intent set forth above lead to the conclusion that the Debtor and his children moved swiftly to effectuate Moser’s closing and Bolivar’s opening to shield the transaction from Lafarge and to delay, hinder and defraud Lafarge. Once La-farge established a -prima facie case that the Debtor’s discharge should be denied, the burden of proof shifted to the Debtor to provide satisfactory, explanatory evidence for his actions. Farouki, 14 F.3d at 249-250. Here, the Debtor, Dwayne Pof-fenberger and Billi Jo Horseman all testified at trial and had the opportunity to provide convincing evidence that Bolivar’s formation and the Moser-Bolivar Transaction were effectuated for legitimate reasons. Unfortunately, all three witnesses were unable to remember important facts to such an extent that their testimony was either unreliable or not credible. For example, none of the witnesses could recall 819the circumstances surrounding the Debt- or’s hiring by Bolivar. Nor could the witnesses give a consistent time-frame to establish when the Debtor told his children that Moser would be closing operations or how Bolivar’s clients were acquired. Ms. Horseman, who handled Moser’s accounts receivable, accounts payable and payroll from 1994 until it closed, and who assumed those same duties with Bolivar, could neither recall nor explain the following facts: (i) the date that Moser closed; (ii) whether there was a dispute between Moser and Lafarge concerning amounts due and owing to Lafarge, despite no payments having been made to Lafarge since June 2008 and Moser’s bank accounts having been frozen by the Comptroller of Maryland; (iii) the discrepancy between Bolivar’s first delivery date (December 8, 2009) and the date Bolivar purchased Moser’s trucks (December 10, 2009). Although the Court can understand that the closing of a family business in the face of mounting judgments would be stressful, there were simply too many inconsistencies and convenient lapses in memory in all three witnesses’ testimony for the Court to find their accounts credible. All three witnesses failed to provide satisfactory evidence to overcome the badges of fraud present in this case. Accordingly, this Court finds that the transfer of Mos-er’s assets to Bolivar was effectuated with the intent to hinder, delay and defraud Lafarge. B. 11 U.S.C. § 727(a)(4)(A) To be denied a discharge pursuant to Section 727(a)(4)(A) of the Bankruptcy Code, the objecting party must prove by a preponderance of the evidence that: 1)the debtor made a statement under oath; 2) the statement was false; 3) the debtor knew the statement was false; 4) the debtor made the statement with fraudulent intent; and 5) the statement materially related to the bankruptcy case. Sheehan v. Stout (In re Stout), 348 B.R. 61, 64 (Bankr.N.D.W.Va.2006) (citing Williamson v. Fireman’s Fund Ins. Co., 828 F.2d 249, 251-52 (4th Cir.1987)). “Once it reasonably appears that the oath is false, [however,] the burden falls upon the bankrupt to come forward with evidence that he has not committed the offense charged.” Hatton v. Spencer (In re Hatton), 204 B.R. 477, 482 (E.D.Va.1997). Section 727(a)(4)(A) necessitates a showing that the false oath was made “knowingly and fraudulently.” 11 U.S.C. § 727(a)(4)(A); Hatton v. Spencer (In re Hatton), 204 B.R. 477, 483 (E.D.Va.1997). Because a debtor is unlikely to admit that he acted with fraudulent intent, fraudulent intent may be established in one of two ways. Id. at 483-484. First, it may be established by circumstantial evidence or by inference drawn from a course of conduct. Id. (citing Williamson, 828 F.2d at 252). “Thus a ‘pattern of concealment and nondisclosure’ would permit an inference of the requisite intent.” Id. (citing In re Ingle, 70 B.R. 979, 983 (Bankr.E.D.N.C.1987)). Second, “courts have determined that a ‘reckless indifference to the truth’ constitutes the ‘functional equivalent of fraud.’ ” Id. (citing In re Johnson, 139 B.R. 163, 166 (Bankr.E.D.Va.1992)). Where a debtor subsequently discloses omitted assets, such later disclosure does not expunge a prior false oath. Rosenbaum v. Kilson (Matter of Kilson), 83 B.R. 198, 203 (Bankr.D.Conn.1988). Nevertheless, courts have held that a debtor’s dis820closure of previously omitted information is “some evidence of innocent intent.” Id; see also Gullickson v. Brown (In re Brown), 108 F.3d 1290, 1294 (10th Cir.1997). “A debtor will not be denied discharge if a false statement is due to mere mistake or inadvertence.” Id. at 1294 - 1295. In this case, Lafarge argues in its post-trial memorandum that the Debtor should be denied a discharge under Sections 727(a)(4) and (a)(7) based on (i) the values the Debtor assigned to his interests in Moser, LLC and Moser Farms, Inc. in the Debtor’s initial Schedule B, and (ii) the lack of documentation evidencing a loan from Dwayne Poffenberger to Moser and the conflicting testimony of Dwayne Pof-fenberger regarding said loan. It was also stipulated to at trial that the Debtor did not list the Hendricks Loan on his bankruptcy schedules. Addressing the arguments made in Lafarge’s post-trial memorandum first, the Court finds that the aforementioned inconsistencies and omissions are insufficient to deny the Debtor a discharge under Sections 727(a)(4) or (a)(7). The Debtor filed an amended Schedule B reflecting higher valuations for his interests in Mos-er, LLC and Moser Farms, Inc. on April 9, 2010, which was less than three months after he filed his initial Schedule B and nearly two months prior to the filing of the Chapter 7 Trustee’s Report of No Distribution. The Amended Schedule B was filed with ample time for the Trustee to investigate whether the assets had any liquidation value for joint creditors.8 As for the inconsistencies between Dwayne Poffenberger’s deposition testimony and his trial testimony regarding the structure of a loan he made to Moser, and the lack of evidence supporting any such loan, these inconsistencies do not prove that the Debt- or had any fraudulent intent with respect to his bankruptcy schedules or Moser’s bankruptcy schedules. Loans by family members to support a family business are not always reflected by documentation and there was no evidence to contradict the testimony that family members loaned money to Moser. Thus, the Court finds that the lack of documentary evidence alone is insufficient to deny the Debtor a discharge under Section 727(a)(4) under these circumstances. Of greater significance to the Court is the omission of the Hendricks Loan from the Debtor’s schedules. As stated previously, the Parties stipulated that Moser Farms, Inc. provided the financing to Bolivar that enabled Bolivar to acquire the vehicles from Moser. Although the Debtor testified that Moser Farms, Inc. borrowed the money from the Hendricks and the proceeds of the Hendricks Loan were never in his or his wife’s possession, he also testified that he believed the loan documents evidencing the Hendricks Loan incorrectly reflect that the Hendricks Loan was made to the Debtor and his spouse, not to Moser Farms, Inc. The Debtor testified on cross-examination that he later learned that there was a tax savings realized from the manner in which the Hendricks Loan was documented and that the Hendricks Loan 821was structured for that purpose. The Debtor’s testimony and the documentary evidence clearly establish that the Hendricks Loan was made to the Debtor and his wife. Although the Debtor and his wife subsequently loaned the money to Moser Farms, LLC,9 the loan from the Hendricks to the Debtor and his spouse should have been included as a liability on the Debtor’s bankruptcy schedules, and the obligation of Moser Farms, LLC to the Debtor should have been included as an asset on the Debtor’s bankruptcy schedules. In light of these omissions, the question becomes whether the Debtor knowingly and fraudulently omitted these transactions from his bankruptcy schedules. Although the Court did not find the Debtor to be a credible witness generally, the Court does not believe he intentionally omitted the Hendricks Loan and the related loan to Moser Farms, Inc. from his bankruptcy schedules. The Court finds that the omission was either an oversight by the Debtor, or, as the Debtor testified, a consequence of the Debtor’s belief that the Hendricks Loan was meant to be between the Hendricks and Moser Farms, Inc. A comparison of the docket in the Debtor’s bankruptcy case, of which this Court can take judicial notice, and the Debtor’s amended bankruptcy schedules, reflects that the Debtor reaffirmed all of his debts for which his spouse is a joint obligor. The Debtor could have simply scheduled the Hendricks Loan and then reaffirmed it. In fact, by not scheduling and reaffirming the Hendricks Loan, the Debtor has exposed his assets owned as tenants by the entirety to possible liquidation by the Chapter 7 Trustee to satisfy this obligation.10 For this reason, the Court does not find that the Debtor intentionally omitted the Hendricks Loan from his bankruptcy schedules. In sum, Lafarge failed to establish that the Debtor knowingly and fraudulently made a false oath in connection with his bankruptcy schedules. Specifically, La-farge failed to establish “a pattern of concealment and nondisclosure” and failed to establish that the Debtor possessed a “reckless indifference to the truth” with respect to his bankruptcy schedules or Moser’s bankruptcy schedules. See In re Hatton, 204 B.R. at 482. Accordingly, La-farge’s request to deny the Debtor a discharge under Section 727(a)(4) is denied. C. 11 U.S.C. § 523(a)(6) Lastly, the Amended Complaint seeks a determination that the debt owed by the Debtor to Lafarge is nondis-chargeable under 11 U.S.C. § 523(a)(6). Section 523(a)(6) excepts from discharge any debt “for willful and malicious injury by the debtor to another entity or to the property of another entity.” 11 U.S.C. § 523(a)(6). “The word ‘willful’ in (a)(6) 822modifies the word ‘injury,’ indicating that nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury.” Kawaauhau v. Geiger, 523 U.S. 57, 61, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998). “Had Congress meant to exempt debts resulting from unintentionally inflicted injuries, it might have described instead ‘willful acts that cause injury.’” Id. “Or, Congress might have selected an additional word or words, ie., ‘reckless’ or ‘negligent,’ to modify ‘injury.’ ” Id. Implied malice satisfies the malice standard of Section 528(a)(6) and can be shown by the conduct of the debtor in the context of his or her surrounding circumstances. Miller v. Cigna Ins. Co., 311 B.R. 57, 62 (D.Md.2004) (citing Hagan v. McNalien (In re McNallen), 62 F.3d 619, 625 (4th Cir.1995)). “Since the Geiger decision, courts have struggled to determine whether a debtor must have specifically intended the injury or whether the commission of an intentional tort that is ‘substantially certain to result in injury’ is sufficient to satisfy the willfulness requirement.” Haas v. Trammell (In re Trammell), 388 B.R. 182, 186-187 (Bankr.E.D.Va.2008). “The Court of Appeals for the Fourth Circuit appears to have adopted the ‘objective substantial certainty’ or ‘subjective motive’ test to satisfy the willfulness requirement.” Id. (citing Parsons v. Parks (In re Parks), No. 03-1072, 2003 WL 22989684, at 1 (4th Cir. Dec. 19, 2003) (“[t]he test, then, is whether the debtor acted with ‘substantial certainty [that] harm [would result] or a subjective motive to cause harm.’ ”)). A debtor’s misconduct under Section 523(a) need only be shown by a preponderance of the evidence. First Nat’l. Bank v. Stanley (In re Stanley), 66 F.3d 664, 667 n. 4 (4th Cir.1995) (citing Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991)). In this case, Plaintiff does not allege that the underlying obligation owed by Moser and the Debtor to Lafarge was incurred as a result of Debtor’s willful and malicious injury. Rather, Plaintiff alleges that the Debtor’s conduct in the State Court Action leading up to and after entry of the Judgment warrants a finding that the debt owed to Plaintiff is nondischargeable under Section 523(a)(6). Specifically, Lafarge alleges that Debtor’s actions in transferring Moser’s assets and unreasonably delaying the State Court Litigation were deliberate and intentional, and were part of a calculated scheme “to vex, delay and impede Lafarge in the pursuit and enforcement of its claims.... ” Lafarge alleges that the Debtor acted with malice when he willfully and intentionally caused Moser to hinder and delay enforcement of Lafarge’s claims by selling and/or transferring Moser’s business and assets to the detriment of Lafarge. Lafarge further alleges that the Debtor acted with malice when he caused Moser to file a petition in bankruptcy and has continued to act with malice and intent to injure Lafarge “by willfully and intentionally frustrating and delaying, and causing Moser and Bolivar to frustrate and delay, Lafarge’s lawful rights, and by harassing Lafarge with a false and frivolous motion for contempt.” In its post-trial memorandum, Plaintiff argues that the “debtor further hindered and delayed Lafarge’s efforts (and further needlessly and baselessly increased La-farge’s legal fees), when he filed a cross-motion for contempt in this proceeding which was not based on any applicable legal authority and sought relief contrary to binding principles of law.” Count I asserts that the Debtor’s actions constitute willful and malicious injury by the Debtor to Lafarge and that there is no just cause or excuse for the Debtor’s conduct. La-*823farge alleges that such damages include not only Moser’s debt to Lafarge (the total Judgment amount of $357,172.29 plus accrued interest thereon), but also some measure of Lafarge’s attorney’s fees and costs incurred as a result of the Debtor’s efforts to hinder and delay Lafarge’s enforcement of its claims. As stated above, the burden of proof in a dischargeability action is the preponderance of the evidence standard. See In re Stanley, 66 F.3d at 667. Here, Lafarge failed to meet this burden with respect to Count I. As stated above, Count I does not assert that the underlying obligation owed by the Debtor to Lafarge was incurred as a result of a willful and malicious injury. Rather, Count I argues that the Debtor’s lack of cooperation and legal maneuvering in the State Court Action and in the two bankruptcy cases caused Lafarge to incur additional legal fees and that such conduct constitutes a willful and malicious injury under Section 523(a)(6). Although the Court commends Plaintiffs creativity, Plaintiff cites no case law to support its novel legal theory that the Judgment and any legal fees incurred as a result of Debt- or’s lack of cooperation constitutes a non-dischargeable debt under Section 523(a)(6). Plaintiff simply did not establish that the Debtor acted with malicious intent to harm Lafarge. Any legal fees incurred by La-farge as a result of the Debtor’s dilatory actions was a consequence of the Debtor’s actions, but not the intended purpose of his actions. Accordingly, the Court finds that the Plaintiff failed to prove that the Debtor’s actions constitutes a willful and malicious injury under Section 523(a)(6). III. Conclusion For the reasons set forth herein, the Court finds that the Debtor shall be denied his discharge pursuant to 11 U.S.C. § 727(a)(7). A separate Order will issue. . To the extent any of the following findings of fact constitute conclusions of law, they are adopted as such, and to the extent any conclusions of law constitute findings of fact, they are so adopted. . Moser filed a Chapter 7 Voluntary Petition on March 30, 2010, Case No. 10-16844-PM. Moser’s bankruptcy case was closed on December 22, 2010. .The Debtor testified that he bought his brothers and sisters out over a several-year period after they inherited the business. By approximately 1996, the Debtor and his wife were the 100% owners of Moser. . At trial, the Defendant attempted to introduce documentation supporting the loans allegedly made to Moser by the Defendant's children into evidence; however, the Defendant was precluded from doing so based on a pre-trial ruling. . Related to Section 727(a)(2) is Section 727(a)(7), which provides: (a) The court shall grant the debtor a discharge, unless— (7) the debtor has committed any act specified in paragraph (2), (3), (4), (5), or (6) of this subsection, on or within one year before the date of the filing of the petition, or during the case, in connection with another case, under this title or under the Bankruptcy Act, concerning an insiderf.] 11 U.S.C. § 727(a)(7). Here, Section 727(a)(7) renders Section 727(a)(2)(A) applicable to the Debtor's actions in connection with the Moser Bankruptcy. . The Debtor’s children, Dwayne Poffenber-ger and Billi Jo Horseman, were both employed by Moser during this time. . The Debtor testified that Moser Farms, Inc., which is owned by the Debtor and his non-filing spouse as tenants by the entirety, obtained a loan from John and Nancy Hendricks (the "Hendricks Loan”). The Parties stipulated that Moser Farms, Inc. then loaned the money to Bolivar to purchase the vehicles from Moser. Defendant's Exhibit No. 11, however, reflects that the Hendricks' Loan was made directly to the Debtor and his wife. . As stated previously, the Debtor owns Mos-er, LLC and Moser Farms, Inc. with his spouse as tenants by the entireties. Therefore, his interest in both entities was exempt except as to joint creditors and federal tax obligations. See United States v. Craft, 535 U.S. 274, 122 S.Ct. 1414, 152 L.Ed.2d 437 (2002); Sumy v. Schlossberg (In re Sumy), 777 F.2d 921 (4th Cir.1985). . Plaintiff's Exhibit 15 is letter from Moser Farms, Inc. to Bolivar stating that Moser Farms, Inc. has agreed to loan Bolivar $158,143.50 for the purpose of purchasing equipment. The Parties also stipulated that Moser Farms, Inc. provided the financing to Bolivar to enable Bolivar to purchase the vehicles from Moser. The Court notes, however, that no loan documents evidencing the loan from the Debtor and his spouse to Moser Farms, Inc. were admitted into evidence at trial. . The Court notes that Fed. R. Bankr.P. 4008(a) provides that reaffirmation agreements “shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a) of the Code.” Fed. R. Bankr.P. 4008(a). Fed. R. Bankr.P. 4008 further provides that the Court "may, at any time and in its discretion, enlarge the time to file a reaffirmation agreement.” Id.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8494704/	ORDER TERRENCE W. BOYLE, District Judge. This matter is before the Court on the Bankruptcy Administrator’s appeal from the bankruptcy court’s August 17, 2011 denial of her motion to dismiss pursuant to 11 U.S.C. § 707(b)(1) and (b)(3). Because the bankruptcy court’s factual findings are not clearly erroneous, and because the bankruptcy court properly conducted the presumption of abuse analysis in section 707(b)(2) and the totality of the circumstances analysis in section 707(b)(3), the bankruptcy court acted within its discretion in denying the Bankruptcy Administrator’s motion to dismiss and its judgment is AFFIRMED. BACKGROUND Diana Maria Gregory filed a voluntary petition under Chapter 7 of the Bankruptcy Code on November 24, 2010. At the time of filing the petition, Ms. Gregory was married and living with her husband and four daughters (ages 7 to 21). She scheduled $59,152.35 of unsecured debts on Schedule F, including $8,000.00 of non-dischargeable student loans. All of her unsecured debts were hers alone. Her only secured debt was the mortgage on her current residence of $237,800.00, which was a joint debt of Ms. Gregory and her husband, upon which the monthly payment was $1,482.00. Ms. Gregory’s current monthly income for the six months prior to the filing of bankruptcy was $3,943.72, which represents $4,549.67 in gross income, reduced by employee business expenses in the amount of $605.95. Her husband’s gross income for that period was $9,155.00. On her Amended Form B22A, Ms. Gregory reported current monthly income for purposes of section 707(b)(2)(A) in the amount of $6,606.72. She then deducted the “marital adjustment” at Line 17 in the amount of $6,784.80 for her husband’s payment of certain student loans ($166.00) and for expenditures related to the couple’s former residence. Her monthly disposable income was then calculated to be negative $178.08. Ms. Gregory also owned a former residence in tenancy by the entirety with her husband, the value of which she represented as $260,000.00. Relevant to this appeal, on February 2, 2011, the Bankruptcy Administrator filed a motion to dismiss the case. The bankruptcy court held a hearing on the motion and on Ms. Gregory’s response on June 21, 2011. The bankruptcy court entered its order on August 17, 2011, denying the Bankruptcy Administrator’s amended motion to dismiss. On September 19, 2011, the Bankruptcy Administrator timely filed its notice of appeal to this Court. 826The Bankruptcy Administrator argues that the Bankruptcy Judge erred (1) in concluding that payments made by a non-filing spouse on a regular basis for the upkeep, maintenance, and improvement of joint property do not constitute a “household expense” of the debtor pursuant to 11 U.S.C. § 101(10A)(B) and (2) in finding that the totality of the debtor’s circumstances did not constitute an abuse pursuant to 11 U.S.C. § 707(b)(3). JURISDICTION AND STANDARD OF REVIEW Jurisdiction over this appeal is proper pursuant to 28 U.S.C. § 158(a), which provides that “[t]he district courts of the United States shall have jurisdiction to hear appeals ... from final judgments, orders, and decrees ... of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under section 157 of this title.” A bankruptcy court’s findings of fact shall not be set aside unless clearly erroneous and conclusions of law are reviewed de novo. In re White, 487 F.3d 199, 204 (4th Cir.2007). A bankruptcy court’s definition of the statutory term “household expense” is a conclusion of law, which is reviewed de novo. The totality of the circumstances test used to determine whether discharging a debt- or’s debt would constitute abuse is reviewed for abuse of discretion. Cf. Hebbring v. U.S. Trustee, 463 F.3d 902, 907-08 (9th Cir.2006). DISCUSSION The Bankruptcy Administrator raises two issues on appeal relating to Ms. Gregory’s husband’s payments for repairs on their former residence. First, she contends that the bankruptcy court should have included the payments within Ms. Gregory’s current monthly income under section 707(b)(2). Second, she argues that, even if inclusion of these payments would have been improper in establishing a presumption of abuse, the payments should have been considered within the bankruptcy court’s totality of the circumstances analysis under section 707(b)(3). Chapter 7 Abuse In determining whether providing chapter 7 relief to a debtor constitutes abuse under 11 U.S.C. § 707(b)(3), bankruptcy courts apply a “means test” to the debtor’s financial situation, to screen a debtor’s income and expenses to determine whether the debtor is able to repay her debt. See 11 U.S.C. § 707(b)(1), (2). If the debtor’s income exceeds the “highest median family income of the applicable State for a family of the same number or fewer individuals,” the means test creates a rebuttable presumption of abuse. 11 U.S.C. § 707(b)(2), (6), (7). The means test evaluates the debtor’s monthly expenses such as health insurance, housing, utilities, taxes, and an allowance for food and clothing. 11 U.S.C. § 707(b)(2)(A). The debtor’s monthly disposable income is then determined by subtracting these allowable expenses from his monthly income. If that monthly disposable income is greater than a benchmark figure provided in the statute, then a presumption of abuse arises. This presumption is rebuttable if the debtor can demonstrate special circumstances, as provided in 11 U.S.C. § 707(b)(2)(B)(i). As described by the Court of Appeals for the Fourth Circuit, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) and amended Section 707(b) of the Bankruptcy Code with the intent of relaxing the standard for dismissing a petition brought under Chapter 7 and characterized as abusive. H.R.Rep. No. 109-31(1), at 7-8 (2005), 827reprinted in 2005 U.S.C.C.A.N. 88, 98-99. Specifically, the standard for dismissal under section 707(b) was changed from “substantial abuse” to simply “abuse.” 11 U.S.C. § 707(b)(1). The amendment also eliminated a presumption in favor of granting a debtor’s discharge. As amended by the BAPCPA, § 707(b) permits the court’s dismissal of “a case filed by an individual debtor under this chapter whose debts are primarily consumer debts ... if it finds that the granting of relief would be an abuse of the provisions of this chapter.” 11 U.S.C. § 707(b)(1). Calhoun v. U.S. Trustee, 650 F.3d 338, 340 (4th Cir.2011). If the presumption of abuse does not arise or is rebutted, the court must then determine whether granting a debtor relief would be an abuse of the provisions of Chapter 7 by considering “whether the debtor filed his petition in bad faith” and/or by considering “the totality of the circumstances ... of the debtor’s financial situation.” 11 U.S.C. § 707(b)(3). Here, the bankruptcy court concluded that Ms. Gregory’s expenses, when subtracted from her income, left a monthly net income that was insufficient to trigger a presumption of abuse under § 707(b)(2). The bankruptcy court further concluded that granting relief to Ms. Gregory would not be an abuse of the provisions of Chapter 7 by considering “the totality of the circumstances ... of the debtor’s financial situation.” 11 U.S.C. § 707(b)(3). A. The bankruptcy court properly declined to consider Ms. Gregory’s non-filing husband’s payments under section 707(b)(2) in its presumption of abuse analysis. This Court agrees that Ms. Gregory’s husband’s payments were properly excluded from the section 707(b)(2) presumption of abuse analysis because they do not constitute “household expenses.” In enacting the BAPCPA, Congress included within the debtor’s current monthly income “any amount paid by any entity other than the debtor ... on a regular basis for the household expenses of the debtor or the debtor’s dependents ...” 11 U.S.C. § 101(10A)(B). In other words, Ms. Gregory’s non-filing spouse’s payments for repairs to the second residence are relevant to the application of the section 707(b)(2) means test to the extent that they are made on a regular basis for household expenses. The term “household expense” is not defined within the Bankruptcy Code. On June 21, 2011, Ms. Gregory testified at the hearing on the motion to dismiss that the payments went to new carpeting, to repainting the entire house, to landscaping, to insurance, and to combatting rot. In evaluating the expenses, the bankruptcy court cited to Black’s Law Dictionary and Merriam-Webster’s College Dictionary to hold that “[t]he ordinary, contemporary, and common meaning of ‘household’ only includes one’s primary residence and those who live within that household. Here, the expenses related to the former residence are not attributable to any expenses related to the debtor’s primary residence. If the non-filing spouse were to stop making the $1,628.00 payment related to the former residence, it would not affect the day-to-day functioning of the debtor’s household. The statute could have been written more broadly to capture as income any payment made by a non-debtor for the benefit of the debtor, but the actual lan828guage is more narrow” [DE 1-1 at 7].1 The Bankruptcy Administrator argues that Ms, Gregory’s husband’s payments to renovate the property are household expenses paid for the benefit of the debtor and should not be taken as a marital adjustment. If these expenses were not deducted, an additional $1,628.00 in funds should have been considered as monthly disposable income under the means test, resulting in monthly disposable income sufficient to trigger the presumption of abuse within 11 U.S.C. § 707(b)(2). Ms. Gregory cites to the Fourth Circuit’s opinion in In re McGreevy, in which the court defined a similar term, “household goods,” as “those items of personal property that are typically found in or around the home and used by the debtor or his dependents to support and facilitate day-to-day living within the home, including maintenance and upkeep of the home itself.” 955 F.2d 957, 961-62 (4th Cir.1992). By analogy, she argues that the expenditures made by her husband on their former residence during the six months prior to filing for bankruptcy were “for purposes of making the house more ‘sellable’,” and did not enhance the day-today living of the household. Lacking a “functional nexus” to the household, Ms. Gregory concludes that her husband’s expenses were not household expenses, and were properly excluded from the bankruptcy court’s section 707(b)(2) presumption of abuse analysis. This Court perceives, on de novo review, that Ms. Gregory has the better of the argument. The expenses to which she testified at the hearing were directed toward the goal of selling the former residence— consistent with Ms. Gregory’s theory that her husband’s payments were in the nature of investments and did not have a meaningful nexus to Ms. Gregory’s household expenses. Further, the bankruptcy court correctly noted that the household expenses analysis does not “capture as income any payment made by a non-debtor for the benefit of the debtor.” Given the narrow statutory definition and the lack of a factual nexus between these payments and the day-to-day functioning of her household, the bankruptcy court’s analysis on this issue is affirmed. B. The bankruptcy court properly declined to consider Ms. Gregory’s non-filing husband’s payments under section 707(b)(3) in its totality of the circumstances analysis. If the presumption of abuse does not arise or is rebutted, the court must then determine whether granting a debtor relief would be an abuse of the provisions of Chapter 7 by considering “whether the debtor filed his petition in bad faith” and/or by considering “the totality of the circumstances ... of the debtor’s financial situation.” 11 U.S.C. § 707(b)(3). Prior to enactment of the BAPCPA, this circuit considered the “totality of the circumstances” test to encompass five factors: (1) whether the bankruptcy petition was filed 829because of sudden illness, calamity, disability or unemployment; (2) whether the debtor incurred cash advances and made consumer purchases far in excess of his ability to repay; (3) whether the debtor’s proposed family budget is excessive or unreasonable; (4) whether the debtor’s schedules and statement of current income and expenses reasonably and accurately reflect the true financial condition; and (5) whether the petition was filed in good faith. Green v. Staples, 934 F.2d 568, 572 (4th Cir.1991). After BAPCPA, Form B22A implements the section 707(b)(2)(A) ability to repay test, leaving unresolved whether that test, and the Green factors, have continued vitality in the section 707(b)(3) totality of the circumstances analysis. However, the Fourth Circuit acknowledged the bankruptcy court’s analysis of the Green factors in Calhoun v. U.S. Trustee, without making “a determination as to the enduring applicability of the holding in Green.” Calhoun, 650 F.3d at 342. In light of that language, this Court views the Green factors as instructive guidance in evaluating the totality of Ms. Gregory’s financial circumstances. The Bankruptcy Administrator argues that sale of the former residence will result in sufficient liquid assets to pay all creditors in full, as it is an unencumbered asset valued at $260,000.00 and Ms. Gregory’s total debt liability is $59,912.00. She cites to the Fourth Circuit’s affirmance of the bankruptcy court in Calhoun v. U.S. Trustee on the grounds that the totality of the circumstances of the Calhouns’ financial situation rendered discharge of the their debt an abuse of the provisions of Chapter 7, despite the fact that no presumption of abuse arose. However, in Calhoun, the Fourth Circuit considered a multitude of factual findings, none of which are present in the instant case. For example, the Calhouns had made almost two years of payments to unsecured creditors, their monthly expenses “border[ed] on the extravagant,” and they failed to justify their excessive expenses. Calhoun, 650 F.3d at 342. Moreover, the Gregorys’ property held in tenancy by the entirety is exempt property under 11 U.S.C, § 522. In affirming the bankruptcy court in the Calhouns’ case, the Fourth' Circuit expressly noted that the exempt assets— there, social security benefits — were not required to support the finding of abuse. Id. at 342-43. Absent any indication that these additional factors are present in the case before the Court, this Court finds no abuse of discretion in the bankruptcy court’s refusal to dismiss under section 707(b)(3). CONCLUSION In sum, the bankruptcy court’s factual findings are not clearly erroneous. Moreover, the bankruptcy court correctly conducted the presumption of abuse analysis in section 707(b)(2) and the totality of the circumstances analysis in section 707(b)(3). Thus, the bankruptcy court acted within its discretion in denying the Bankruptcy Administrator’s motion to dismiss. Accordingly, the bankruptcy court’s judgment is AFFIRMED. SO ORDERED. . Even if the statute were written more broadly, the bankruptcy court could not automatically conclude that these payments would accrue to the benefit of Ms. Gregory. As noted by the Western District of Michigan, given changing attitudes toward marriage and financial independence, "one can no longer simply accept as fact that a married couple will pool all income and expenses like a quasi-partnership ... [a]t best, a court today can only presume that a married couple pools income and/or shares expenses ... [e]ach debtor must be given the opportunity to establish that his or her household is managed differently.” In re Welch, 347 B.R. 247, 254 (Bankr.W.D.Mich.2006).	01-04-2023	11-22-2022

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