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https://www.courtlistener.com/api/rest/v3/opinions/8483631/	Filed 11/14/22 In re Wright CA3 NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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) ---- In re CHEVAL SHANNON WRIGHT C094514 on Habeas Corpus. (Super. Ct. No. 20HC00287) Defendant Cheval Shannon Wright’s 1995 convictions included murder, attempted murder and robbery. Various subsequent proceedings have modified defendant’s legal accountability for his involvement in the robbery, during which two people were shot. The instant matter involves the People’s appeal from the trial court’s ruling granting defendant’s petition for writ of habeas corpus and vacating the robbery-murder special- circumstance finding. The People argue that the trial court erred in applying the wrong standard of review by relying on the jury’s negative finding on the personal use of a firearm allegation to discount evidence that defendant was the shooter and, in doing so, reached a conclusion not supported by the record. In response, defendant argues that the jury’s verdicts point to only one conclusion; defendant’s actions in restraining the actual 1 shooter do not demonstrate a reckless disregard for human life. Because under our deferential standard of review, substantial evidence supports the jury’s true finding on the special circumstance allegation at issue here, we shall reverse. FACTUAL AND PROCEDURAL HISTORY This court first affirmed the convictions of defendant and codefendant Christian Abernathy in People v. Wright (1996) 52 Cal.App.4th 203. Four years later, a federal trial court adopted the findings of its magistrate who sustained defendant’s petition for habeas corpus, set aside defendant’s convictions and granted a new trial. On retrial, a jury again convicted defendant of first degree murder and attempted second degree robbery of Kevin Brown, and second degree robbery of Marlin Moore. (Pen. Code, §§ 187-189, 211-212.5, 664.)1 In contrast with the previous jury, however, it acquitted defendant of the attempted murder and the lesser included offenses of attempted voluntary manslaughter and assault with a firearm of Moore (§§ 187, 192, 245, 664), rejected all allegations that defendant personally used a firearm (§ 12022.5, subd. (a)) and instead sustained lesser included allegations that a principal was armed during the crimes (§ 12022, subd. (a)(1)). It also found the murder occurred during the commission of a robbery. (§ 190.2, subd. (a)(17)(A).) The trial court again sentenced defendant to prison without the possibility of parole. On appeal, this court affirmed defendant’s convictions. While we did not address the sufficiency of the evidence supporting the special circumstances finding, we did note that the jury resolved the issue of the identification of the shooter in favor of defendant. (People v. Wright (Dec. 11, 2002, C039121) [nonpub. opn.].)2 1 Unspecified statutory references are to the Penal Code. 2 We granted the People’s request to incorporate by reference the appellate record in People v. Wright, supra, C039121. 2 After defendant’s conviction became final, the California Supreme Court decided People v. Banks (2015) 61 Cal.4th 788 (Banks), People v. Clark (2016) 63 Cal.4th 522 (Clark), and later In re Scoggins (2020) 9 Cal.5th 667 (Scoggins), which clarified the meaning of the special circumstance statute. That statute provides that a person who is not the actual killer but “who, with reckless indifference to human life and as a major participant” aids or abets an enumerated felony that results in a death may be convicted of special circumstance murder and sentenced to death or life imprisonment without parole. (§ 190.2, subd. (d).) Banks and Clark clarified that fact finders must examine an aider and abettor’s personal culpability that led to a death during the commission of a felony before imposing a sentence of death or life without parole, and the Supreme Court provided guidance on how to make that evaluation. (Banks, at pp. 800-803; Clark, at pp. 618-623.) Also subsequent to defendant’s conviction, the Legislature adopted Senate Bill No. 1437 (2017-2018 Reg. Sess.; Stats. 2018, ch. 1015, eff. Jan. 1, 2019) (Senate Bill 1437). Senate Bill 1437 limited felony-murder liability to those who in the course of committing an enumerated felony were the actual killer, aided and abetted the actual killer with the intent to kill, or were major participants in the underlying felony and acted with reckless indifference to human life. (§ 189, subd. (e).) Senate Bill 1437 also provided in former section 1170.95,3 a procedure for defendants previously convicted of felony murder to petition for resentencing if they could not have been convicted under the amended felony-murder statute. Defendant unsuccessfully sought relief under the resentencing provisions of former section 1170.95. We affirmed the trial court’s denial of the postjudgment motion, concluding that a prerequisite to relief for defendants who, like Wright, are convicted of 3 Effective June 30, 2022, Assembly Bill No. 200 (2021-2022 Reg. Sess.) renumbered section 1170.95 as section 1172.6 with no change in text. (Stats. 2022, ch. 58, § 10.) 3 murder with a special circumstance finding that the murder was committed in the course of the robbery is to have the special circumstance finding vacated through a habeas corpus proceeding. (People v. Wright (Sept. 28, 2021, C091633) [nonpub. opn.], review granted Dec. 15, 2021, S271574, vacated & trans. for reconsideration in light of People v. Strong (2022) 13 Cal.5th 698 Oct. 26, 2022.)4 Defendant has done so, and we now review that ruling. Because there was no evidentiary hearing in the habeas corpus proceeding, we are bound by the facts established at the second trial. Like the trial court, we rely on the relevant facts recounted in the appellate opinion from defendant’s second trial, clarifying with evidence from the record where we deem appropriate. In 1993, defendant drove a Hyundai to the home of acquaintances, where he joined a group drinking alcohol and smoking marijuana. Five of the partiers, including defendant, departed in the Hyundai to buy more alcohol. Defendant was too inebriated, so he asked someone else to drive. Codefendant was also high. Prior to this, another partier saw codefendant with a gun. The two victims were among the four occupants of an Oldsmobile convertible that was dropping off one of the passengers in the North Highlands area. As the convertible neared the passenger’s home, it passed the Hyundai, which was heading the opposite direction. Defendant told the Hyundai driver to make a U-turn. As the convertible began its own U-turn to drop off the passenger, the Hyundai stopped in front of it. 4 The nature of the question on review in the direct appeal from the denial of defendant’s petition for relief under former section 1170.95 is distinct from the before us and review of the instant habeas corpus proceeding will not interfere with that matter while the People exercise their right under section 1506. (See France v. Superior Court (1927) 201 Cal. 122, 126-127 [the writ of habeas corpus is an action independent of the underlying criminal prosecution].) 4 According to a bystander who witnessed the crimes, a man got out of the Hyundai and approached the convertible. The Oldsmobile’s convertible top was lowered or open. The man from the Hyundai yelled at the occupants in the Oldsmobile, then pointed a gun at them. A second man got out of the Hyundai and attempted to restrain the first. The first man (who was darker-complected) broke free and fired two or three shots. The bystander identified defendant as the second man, based primarily on his lighter complexion and physical appearance in comparison with codefendant. In 1993, the bystander was not able to identify either codefendant or defendant in photo lineups. A deputy assigned to the jail in October 1994 testified that he conducted a random search of codefendant’s mail. He found an outgoing letter bearing codefendant’s return address and signature in which was written, “Just ‘cause I got out of the car with the [gun], that don’t prove shit.” Victim Accounts A. Marlin Moore The convertible driver, Marlin Moore, was deceased by the time of the retrial. His testimony from the first trial was read to the jury in the retrial. Moore testified that he and some of his passengers smoked marijuana and drank alcohol that day, but he was not high at the time of the incident.5 On their way to take someone home, a Hyundai pulled in front of him, stopped and cut him off. Two men simultaneously got out of the Hyundai. Both of them wore blue colored rags at their waists, which suggested gang membership. The first, who was dark-complected and later identified as codefendant, walked up to the convertible and asked where the occupants lived. He was holding a 5The effects of marijuana on Moore’s ability to perceive, interpret and remember events were explored on cross-examination. 5 gun.6 Moore said he was from Oakland and did not “gang bang.” Codefendant then demanded money and nudged or tapped Moore on the forehead with the gun. The other man, who had a lighter complexion and was later identified as defendant, hung back, did not say anything or take any money, but also did not try to stop the robbery. Moore was in the process of offering the $10 or so in cash he had in his pocket when he heard gunfire. Moore looked behind him and saw that Kevin Brown, the murder victim, was grimacing. Defendant looked “shocked,” “startled” and “stunned.” Defendant grabbed codefendant from behind in a bear hug and said something to the effect of “stop,” “cut it out,” “you already shot him.” Moore grabbed at the gun. Defendant pulled at codefendant, pulling him back. Codefendant waived the gun around and tried to point it at Moore’s head. Moore got hold of the gun, but as the barrel began to slip out of his hand, he pushed it away and floored the accelerator. From the rearview mirror, Moore saw codefendant fire a shot in the direction of the convertible as it drove off. After traveling about half a block, Moore discovered he had been shot. He had a bullet wound in his stomach. A couple of weeks later, Moore viewed two photo lineups. He identified codefendant as the shooter, but could not recall making the recorded statement “he’s the one that shot at me, that looks like the fool right there, I’m sure.” As to defendant, Moore testified that he recognized defendant’s photo in the lineup but told the officer he did not recognize anyone. He explained, “I felt he tried to stop it, and I didn’t feel as though he should get in any trouble for anything he did.” He credited defendant for saving his life and the lives of the rest of the people in his car. 6 Moore said that because he did not immediately see the gun, it was possible that defendant handed the gun to codefendant but it was a “guess” and he did not see it passed. 6 Moore was an unwilling witness; he did not wish to testify because he was facing the start of his own prison term and did not want to be known as a snitch for testifying. Before his initial testimony at the preliminary hearing, he found himself in the same holding cell as defendant, with whom he spoke. 7 He immediately recognized defendant as the person who grabbed the shooter and he testified that he wanted to help defendant with his testimony. While Moore was willing to adhere to his identification he made at the preliminary hearing of defendant as the person who attempted to restrain the shooter, he would not identify codefendant as the shooter even though he had picked his photo in a lineup a few weeks after the shooting. However, Moore had admitted to both defense and prosecution investigators in interviews before and after the preliminary hearing that codefendant was the shooter. B. Joe Jones The surviving male convertible passenger, Joe Jones, also testified that codefendant approached the car, gun in hand, and questioned them before demanding money. One of the men, believed to be codefendant, said “this is North Highlands, cuzz.” Jones saw codefendant shoot at the murder victim and Moore. Someone then grabbed codefendant, and they struggled for the gun. After the second gunshot injuring the driver, somebody, maybe defendant, grabbed the gun and said “you trippin.” He could not remember if defendant walked up with a gun; he only remembered that defendant had the gun when he grabbed codefendant after the second shot and struggle. A third person walked up at the time of the first shooting; this all happened within seconds. When confronted with his testimony at the preliminary hearing that someone had grabbed the gun from the first man, he corrected his recollection. He believed 7 During his appearances as a witness in the previous trial, he was in the same holding area with defendant and codefendant on at least 10 occasions. Norwood Armstrong, another Hyundai passenger, were also in the holding area. 7 codefendant was the second person to approach the car, at which point he took the gun from the first person and immediately fired it at them. Whatever his confusion, he was still certain that codefendant was the shooter. When asked if he remembered his testimony at the preliminary hearing whether he was certain that both codefendant and defendant had their hands on the gun, Jones said “yes.” He did not identify codefendant in a photo lineup, but the Jones attributed his difficulty due to the poor quality of the picture of codefendant. C. Nakisha Woods The female convertible passenger, Nakisha Woods, testified that the car containing defendant and codefendant pulled up in front of their car and blocked them and they could not get out of their car. Wood testified that codefendant approached the car, and aggressively questioned them about their places of residence. Codefendant was familiar to her from the neighborhood, but she did not know him. Defendant then approached the car. He was wearing a colored bandana and had a gun in his hand. None of the occupants of the convertible were wearing red or blue gang colors. Woods heard someone say “break yourself,” which meant for her group to give them money or anything of value. She was not sure which one of the defendants demanded money. She thought the murder victim pulled a dollar out of his pocket. She did not see who fired shots and could not recall if codefendant had the gun in his possession at any time (although she acknowledged testifying in the first trial that he held it at some point). In interviews with the police shortly after the shooting, Woods said three men got out of the Hyundai and ran toward the convertible, but she could not now recall the interviews. She made other statements in which she contradicted herself as to whether defendant or codefendant held the gun, the possibility there was a third person who approached from the Hyundai, and as to their physical appearances, but she was consistent in her statement that she was not sure who fired the gun. 8 Hyundai Occupant Accounts The occupants in the Hyundai riding with defendant were close friends and members or associates of the same gang faction as codefendant. The female Hyundai passenger and codefendant were also family members and she admitted there was a lot of pressure to not “snitch.” Defendant, on the other hand, was from a different neighborhood faction of the gang. The other occupants had only recently met defendant and did not owe any particular loyalty to him. A. Lovia Richardson The female Hyundai passenger, Lovia Richardson, testified that the plan was to buy more alcohol, and the occupants of the car pooled their money to do so. No one talked about robbing anyone and she never saw a gun in the car. When they encountered the second car, she did not see either defendant or codefendant with a gun. She could not hear what they said to the convertible occupants. When she heard a gunshot, she and the fourth Hyundai occupant got out of the car. She saw defendant with the gun in his hand. Defendant argued with codefendant, there was a scuffle that also involved the fourth Hyundai occupant, and a second shot was fired. She yelled “let’s go, what are you guys doing, let’s get out of here.” There was a lot more yelling, the men ran back to the Hyundai, got in and they drove away. Richardson testified she never saw a gun in codefendant’s hand. B. Raymond Rice The Hyundai driver, Raymond Rice, testified that as they were driving to the liquor store, there was no discussion about committing a robbery and he did not see a gun until after the shooting. Somebody told him to pull over. He could not remember who said it, although he admitted that at the first trial he testified it was defendant who waived to the people in a convertible as if he knew them and directed Rice to stop. Rice testified he pulled up in front of the convertible but did not block the path of the other car. He claimed that after he stopped, all of his passengers got out of the car. He heard someone 9 say, “break yourself,” but did not remember who said it. He heard two gunshots, with not too much time between them, but could not tell who fired the gun. Rice testified that he did not see anybody with a weapon and did not remember telling an investigator that he saw defendant with a gun in his hand. After the shot was fired, Rice saw Richardson and the other male Hyundai passenger, Norwood Armstrong, pulling defendant back to the car. After the shooting, they returned to Marsell Hobb’s house. While at the house there was discussion about what happened, and Rice saw defendant pull $10 out of his pocket and say, “All I got is ten dollars.” C. Norwood Armstrong The other male Hyundai passenger, Norwood Armstrong, testified that as they were driving to the liquor store, defendant made a motion to do a U-turn. After defendant and codefendant got out of the car, he heard defendant say, “break you all yourselves,” meaning give up the money, and he then heard a shot. He heard defendant say, “you all mother fuckers think I’m playing.” He got out of the Hyundai and saw defendant fire a second shot at the convertible driver, after which he helped codefendant to restrain defendant and pull him back to the Hyundai. He did not see a gun in the car prior to the shooting. Aftermath Everyone in the Hyundai returned to the house where they had been partying. They parked the car around the corner. People were agitated and talking about the shooting. Defendant looked shocked and asked for a change of clothes; he was pacing. Somebody attributed the shooting to defendant; though present, he remained silent and did not deny it.8 Rice said defendant pulled money out of his pocket and said “all I got was ten dollars from it.” 8 The witness testifying to this adoptive admission had not mentioned it in the earlier trial. 10 Defendant’s girlfriend at the time of the shooting testified that defendant borrowed the Hyundai from her roommate. Shortly after the shootings, defendant phoned his girlfriend and said she should report that the car was stolen. He would not elaborate. Later that night, defendant met with his girlfriend around the corner from her apartment and returned the keys. He then moved to Fairfield with his girlfriend, where he cut his hair and attempted to find a job. Defendant’s videotaped interview by law enforcement was played for the jury. He said that he let someone borrow the car, and that person left the car at a house that was raided. Defendant told his girlfriend that she should report the car stolen. At some point, the car keys were returned to defendant. Defendant said he did not know anything about a gun. Hearing of defendant’s August 1993 arrest, the murder victim’s widow came to see him in jail accompanied by her teenage niece. She identified herself and asked why he had killed her husband. Defendant said he was sorry for what happened, and he would trade his life for her husband’s if he could. She claimed the visit lasted 10 to 15 minutes. The widow did not mention this conversation at the first trial, nor did she tell the prosecutor retrying the case about it until one or two days after meeting the prosecutor. She could not explain the omission, other than having been “emotionally stressed out . . . and I just didn’t think about telling anybody.” She also thought that perhaps it was improper to have visited him. The jail records show a visit from the widow, accompanied by a minor, on September 2, 1993, at 1:06 p.m., and both an in and out time for defendant of 1:12 p.m. One cannot necessarily determine from these records either the length of a visit, or if an inmate refused to speak with a visitor. There was nothing otherwise to corroborate her conversation with defendant. 11 Gang Evidence The evidence suggested defendant was in a gang, including owning a blue bandana as well as a blue Georgetown University baseball cap. Another gang member testified defendant was a member of his gang, although in a different subset.9 A gang expert testified to general behavior from gang members. For example, he said it was common practice for gang members to stop unknown people for identification because neighborhoods are “territory” and those people may have to pay a toll for being there. The gang expert also testified that a gang member may elevate his own status within the gang by doing something ruthless, like committing an assault, robbery or homicide. The driver of the Hyundai, a self-proclaimed gang member, agreed with that assessment. The driver said once you are in the gang, “the dirt comes natural. That is part of being in a gang, selling dope, fighting, whatever.” He also said that, if a person was “living that lifestyle,” it would not be bizarre for that person to stop somebody in the neighborhood and find out who they are or to tell a stranger “this is North Highlands, cuzz” to claim a territory. Closing Arguments The prosecutor argued that if the jury believed defendant had a gun at any time during the robbery, it should find the personal use allegation true. Yet the prosecutor also emphasized that the jury did not need to find that defendant ever held the gun or was the shooter to find him guilty of robbery and murder. The prosecutor stated his theory of defendant’s culpability was felony murder. He continued with the following argument: Under the felony-murder theory of culpability, “[t]here are certain crimes that if you commit them and a death occurs during the commission of those crimes, you are guilty of murder. . . . [¶] . . . [¶] That’s because robbery is an inherently dangerous crime.” As a 9 The gang expert testified that defendant was not listed as a gang member and he did not know if codefendant was a gang member. 12 result, even if the jury believed that defendant grabbed codefendant from behind, it d id not matter because defendant participated in the robbery and the victim was killed. As for the special circumstance finding, the prosecution did not discuss what it meant to have reckless indifference to human life or how defendant’s purported actions in grabbing codefendant should be considered in the jury’s analysis. Jury Instructions and Verdicts The jury instructions included CALJIC No. 17.19, regarding personal use of a firearm, and CALJIC No. 17.15, regarding whether a principal was armed with a firearm. The jury was also instructed on CALJIC No. 8.80.1, which provides in part, that if the jury was unable to decide whether defendant was the actual killer or an aider and abettor, the jury could not find the special circumstance to be true as to defendant unless the jury either found beyond a reasonable doubt that defendant, with the intent to kill, aided and abetted the shooter in the commission of the first degree murder, or with reckless indifference to human life and as a major participant, aided and abetted in the commission of the crime of robbery which resulted in the death of the victim. The jury was further told that a “defendant acts with reckless indifference to human life when that defendant knew or was aware that his acts involved an extreme likelihood that such acts could result in the death of an innocent human being.” As mentioned, the jury found defendant guilty of first degree murder, second degree robbery and attempted second degree robbery. It found defendant not guilty of attempted murder of the Oldsmobile driver, Moore, and rejected allegations that defendant personally used a firearm. Instead, the jury sustained lesser-included allegations that a principal was armed during the crimes. It also found the murder occurred during the commission of a robbery. The trial court sentenced defendant to life in prison without the possibility of parole. 13 HABEAS CORPUS PETITION In his petition for writ of habeas corpus, defendant alleged that the evidence was insufficient to sustain the special circumstance finding in light of Banks, supra, 61 Cal.4th 788 and Clark, supra, 63 Cal.4th 532. In its ruling, the trial court stated there were two competing versions of the incident presented at trial: one version wherein defendant was the shooter and if anyone grabbed and restrained him, it was codefendant, and one wherein codefendant was the shooter, and it was defendant who grabbed and restrained him. The trial court found that the jury clearly believed the driver of the convertible who testified that codefendant was the shooter and did not believe the people who were with defendant in the Hyundai and who testified that defendant was the shooter. The court reasoned that by finding the personal use gun enhancement allegation not true, it was reasonable to infer that the jury must have rejected all the testimony that placed a gun in defendant’s hands and, instead, believed that defendant tried to prevent codefendant from firing the weapon again by physically restraining codefendant. The trial court also relied upon the jury’s acquittal of the attempted murder charge to find that it was “readily apparent” that the jury did not believe that defendant shot the driver or intended that anyone should die, and that the court could infer that the jury actually believed that defendant acted to prevent codefendant from firing any more shots from the gun. The trial court acknowledged that the jury found defendant guilty of robbery and found true the robbery-murder special-circumstances allegation. In terms of the robbery, the trial court found that the verdict meant the jury found defendant aided and abetted the robbery. The trial court was not confident, however, that the robbery-murder special- circumstance finding meant that the jury properly found defendant was actually a major participant with reckless indifference to human life. The trial court noted that neither the jury instructions nor the parties’ argument explained that the jury would have to find 14 defendant acted with reckless indifference to human life in all his actions, including his actions in restraining codefendant. After analyzing the factors as established in Banks and Clark, with its interpretation of the evidence shaped by the jury’s verdicts and its extrapolation thereof, the trial court concluded that defendant did not act with reckless indifference to human life, the true finding on the robbery-murder special circumstances was not supported by substantial evidence, and vacated that finding. Under section 1506, the People are entitled to an appeal from a trial court’s grant of relief through habeas corpus, and this court has appellate jurisdiction to review those proceedings. (In re Schiering (1979) 92 Cal.App.3d 429, 433-434.) DISCUSSION I Standard of Review The parties agree that a review for substantial evidence is the proper standard of review in challenges to the sufficiency of the evidence supporting a special circumstance finding. Although “sufficiency of the evidence claims are generally not cognizable on habeas corpus,” an exception to this rule applies when a new decision “clarifies the kind of conduct proscribed by a statute” and shows the court has acted in excess of its jurisdiction. (Scoggins, supra, 9 Cal.5th at pp. 673-674.) A defendant in Wright’s position is entitled to habeas corpus relief “ ‘ “if there is no material dispute as to the facts relating to his conviction and if it appears that the statute under which he was convicted did not prohibit his conduct.” ’ ” (Id. at p. 674.) A postconviction challenge to a special circumstance finding under Banks and Clark presents a legal question for the reviewing court. (In re Miller (2017) 14 Cal.App.5th 960, 979-980 (Miller); see also Banks, supra, 61 Cal.4th at p. 804.) In addition, because the trial court granted relief without an evidentiary hearing, there are no 15 disputed issues of fact and the usual deference that would apply to the review of a trial court’s ruling based on its superior ability to resolve factual questions (e.g., the credibility of witnesses appearing before it) is unwarranted, rendering our review of the trial court’s decision de novo. (In re Rosenkrantz (2002) 29 Cal.4th 616, 677 [where trial court granted a habeas corpus petition “based solely upon documentary evidence,” appellate court will “independently review the record”]; In re Zepeda (2006) 141 Cal.App.4th 1493, 1496-1497 [when a superior court grants habeas corpus relief without an evidentiary hearing the question presented on appeal is a question of law].) Faced with a challenge to the sufficiency of the evidence claim as to a special circumstance, our review of the record is deferential. The question is “whether, when evidence that is reasonable, credible, and of solid value is viewed ‘in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the [special circumstance] allegation beyond a reasonable doubt.’ [Citations.] . . . [Citation.] We presume, in support of the judgment, the existence of every fact the trier of fact could reasonably deduce from the evidence, whether direct or circumstantial.” (Clark, supra, 63 Cal.4th at p. 610.) To answer this question, we must first determine whether, and to what extent, the scope of the evidence is limited by the jury’s verdicts. II Impact of the Jury’s Verdicts Under statutory and constitutional law, the jury was required to determine the ultimate fact as to whether defendant personally used a firearm during the commission of the offense. (See §§ 1150, 1152, 1158a; Apprendi v. New Jersey (2000) 530 U.S. 466, 490 [“any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury and proved beyond a reasonable doubt”].) The jury found the allegation not true, and this is the equivalent of an acquittal. (See §§ 1155, 1165.) Because the burden of proof was on the prosecution, an acquittal will usually 16 mean only that the jury was not convinced beyond a reasonable doubt of a fact advanced by the prosecution. (People v. Harrison (2021) 73 Cal.App.5th 429, 440; see also In re Coley (2012) 55 Cal.4th 524, 554 [“numerous federal and California decisions . . . uniformly hold that a jury verdict acquitting a defendant of a charged offense does not constitute a finding that the defendant is factually innocent of the offense or establish that any or all of the specific elements of the offense are not true”].) As defendant’s jury was instructed that the “term ‘personally used a firearm’ . . . means that the defendant must have intentionally displayed a firearm in a menacing manner, intentionally fired it, or intentionally struck or hit a human being with it,” the not true finding means that the jury found the People failed to prove those facts beyond a reasonable doubt. (CALJIC No. 17.19.) The jury found true, however, that a principal was armed with a firearm. (CALJIC No. 17.15.) We conclude from these verdicts only that the People failed to prove beyond a reasonable doubt that defendant personally used a firearm, as defined in the jury instruction. The parties dispute to what extent the jury’s not true finding on the personal use allegation should be considered in our analysis. The People ask us to review the matter in complete ignorance of the jury’s finding10 and defendant asks us to adopt the position, as did the trial court, that the jury’s finding not only meant that he was not the shooter, and had never touched the gun, but that the jury believed he physically restrained the 10 The People’s failure to raise the issue below deprived the parties and the trial court the opportunity to appropriately shape and respond to this legal argument. Generally, a party’s “ ‘ “failure to make a timely and specific objection” ’ ” on the ground asserted on appeal makes that ground not cognizable on appeal. (People v. Partida (2005) 37 Cal.4th 428, 434.) However, because this argument relates to a challenge to the proper standard of review and we are aware of no authority holding a party may forfeit application of the proper standard of review by failing to object in the trial court, and in light of our de novo review, we will address the issue. (See Russell v. Department of Corrections & Rehabilitation (2021) 72 Cal.App.5th 916, 936.) 17 shooter in an attempt to prevent him from firing the weapon again, and thus “saved lives.” While there is a dearth of authority explaining the impact of a jury finding, on appellate review, of the sufficiency of the evidence for a special circumstance from a grant of habeas corpus relief, an examination of analogous cases leads us to conclude both parties ask too much. (See, e.g., People v. Cooper (2022) 77 Cal.App.5th 393 (Cooper) [and cases cited therein].) In rejecting both positions, we explain the factual and legal influence a jury’s finding has on a sufficiency of the evidence analysis in this context. Considering the evidence through the lens offered by the People would equalize the evidentiary value of all the trial evidence. In conducting our deferential review of whether substantial evidence supports the special circumstance finding, we would be able to consider any facts that substantially support the special circumstance finding without pause for consideration as to whether the jury already determined a contested fact or settled evidentiary or credibility conflicts. The People argue that this type of analysis is routinely conducted in cases reviewing the sufficiency of the evidence. In doing so they rely on cases that conducted this type of analysis in the face of inconsistent verdicts. (See, e.g., People v. Price (2017) 8 Cal.App.5th 409, 452-45; People v. Brugman (2021) 62 Cal.App.5th 608, 633-634.)11 Under those circumstances, a review for sufficiency of 11 At oral argument, the People relied on People v. Price as an example of a case that rejected a contention of inconsistent verdicts. Although the People did not specify which Price decision they referenced, we presume this refers to People v. Price, supra, 8 Cal.App.5th 409 (Price), as cited in their opening brief, as opposed to a subsequent appeal in the same case, People v. Price (A159439, app. pending), review granted February 9, 2022, S272572, vacated and transferred for reconsideration in light of People v. Strong, supra, 13 Cal.5th 698 on September 28, 2022. We disagree that Price rejected a contention of inconsistent verdicts. The defendant argued the special circumstance could not be affirmed on the basis that she was the actual killer because the jury found the allegation the defendant personally used a firearm causing great bodily injury to the victim not true. The court analyzed the claim in the context of inconsistent verdicts and 18 the evidence involves an assessment of whether the trial evidence could support any rational determination of guilt beyond a reasonable doubt, “independent of the jury’s determination that evidence on another count was insufficient.” (People v. Lewis (2001) 25 Cal.4th 610, 656, citing United States v. Powell (1984) 469 U.S. 57, 67.) Here, however, we do not have inconsistent verdicts, as the not true personal use finding is not clearly antagonistic to, and absolutely irreconcilable with, the other verdicts under any rational view of the evidence. (See People v. Taylor (2004) 118 Cal.App.4th 11, 23-24, citing Lowen v. Finnila (1940) 15 Cal.2d 502, 504.) Defendant’s participation in the robbery or felony murder did not require him to personally use a firearm, so there is no inconsistency between the guilty verdicts holding defendant accountable for those offenses and the not true finding on the personal use of a firearm allegation. Nor are those guilty verdicts irreconcilable with the jury’s acquittal of the charges relating to the attempted murder of Moore. The People present no argument to the contrary and do not offer any other authority for why wholly disregarding the negative finding in the absence of inconsistent verdicts, is required. Indeed, if we were to rely on the theory that defendant personally used a firearm in reviewing the sufficiency of the evidence of the special circumstances find ing, such reliance would be inconsistent with the jury’s finding, and effectively turn the jury’s acquittal and not true finding into their opposites. (See Cooper, supra, 77 Cal.App.5th at p. 413, citing People v. Arevalo (2016) 244 Cal.App.4th 836, 841 & People v. Piper (2018) 25 Cal.App.5th 1007.) This would also violate the well-settled rule that “courts must make every effort to interpret a jury’s verdict as being consistent.” (People v. Taylor, supra, 118 Cal.App.4th at p. 23.) rejected it. Price did not address whether the jury’s finding on the firearm use allegation constituted a credibility determination as to whether the defendant was the shooter, and thus foreclosed that factual consideration for purposes of Banks/Clark. 19 Moreover, the reason why a reviewing court disregards inconsistent jury findings when conducting a sufficiency of the evidence analysis does not justify disregarding the jury finding in this case. Generally, if a not true finding of an enhancement allegation is inconsistent with a conviction of the substantive offense, effect is given to both, because “it is unclear whose ox has been gored” by the jury’s verdicts. (United States v. Powell (1984) 469 U.S. 57, 65.) The jury may have been convinced of guilt but arrived at an inconsistent acquittal or not true finding “through mistake, compromise, or lenity . . . .” (Ibid.) Because the defendant is given the benefit of an acquittal, “it is neither irrational nor illogical to require her to accept the burden of conviction on the counts on which the jury convicted.” (Id. at p. 69.) Here, the jury rejected the allegations that defendant personally used a gun or attempted to kill the driver of the convertible but found him responsible for the robberies and murder that took place during those robberies. In our view, those findings reflect either a considered culpability determination, or a proof problem with the prosecution’s case, but are not irreconcilable with each other.12 (Cf. People v. Gonzalez (2018) 5 Cal.5th 186, 208 [where the verdicts and findings are reconcilable, the jury’s willingness to acquit a defendant of a firearm-related charge and find the gun-related allegations not true provides some indication the jury carefully weighed the evidence; the firearm-related findings constitute the jury’s determination that it could not be confident beyond a reasonable doubt about the veracity of certain facts].) We are therefore not convinced that this finding must be entirely disregarded. This is especially true where, as here, there was no evidentiary hearing in the habeas corpus proceedings, and thus no credibility determination, other than those made by the jury, to 12 We note the jury in the original trial also rejected allegations that codefendant was a principal armed with a handgun or personally used a firearm during the commission of the crimes, which leads us to suspect each jury found the evidence insufficient to determine the identity of the shooter. (People v. Wright, supra, 52 Cal.App.4th at p. 205.) 20 which we can defer. (See In re Long (2020) 10 Cal.5th 764, 774 [“ ‘The central reason for referring a habeas corpus claim for an evidentiary hearing is to obtain credibility determinations’ ”].) Defendant also argues that the doctrine of collateral estoppel, which “precludes relitigation of issues argued and decided in prior proceedings” prevents consideration of facts supporting defendant’s use of the firearm in any way. 13 (See Lucido v. Superior Court (1990) 51 Cal.3d 335, 341, fn. 3 [in modern usage, collateral estoppel is described as “issue preclusion”].) Collateral estoppel applies if certain conditions are met, including where the issue decided is identical to the one which is sought to be relitigated. (People v. Santamaria (1994) 8 Cal.4th 903, 910-913.) Here, the allegation that defendant personally used the gun is not being relitigated. Rather, the question before us is whether the facts of the case operate to preserve the special circumstances finding. Thus, collateral estoppel does not apply here. (Cf. People v. Myles (2021) 69 Cal.App.5th 688, 704 [in a former § 1170.95 proceeding, “double jeopardy principles are not at stake because defendant is voluntarily seeking to vacate her prior conviction, not subjecting herself to a new trial or the possibility of increased punishment”].) 13 Defendant cites to People v. Strong, supra, 13 Cal.5th at page 720, a decision in which the California Supreme Court considered the preclusive effect of a special circumstance finding on obtaining relief under section 1172.6. The court held that neither a jury’s special circumstances findings nor a court’s later sufficiency of the evidence review necessarily precludes relief under section 1172.6 because, although the requirements for collateral estoppel were met, the change in law regarding felony murder rendered the doctrine inapplicable. (Strong, at p. 717.) Under section 1172.6, that defendant could have an evidentiary hearing, with additional fact finding, because “changes in the law mean there is now ‘a different apple.’ [Citation.]” (Strong, at p. 718.) Strong provides no guidance on how to use the facts relating to an allegation the jury rejected, in reviewing a collateral proceeding held without the benefit of an evidentiary hearing and additional fact finding. 21 Defendant’s challenge to the special circumstance finding does not involve resolution of disputed facts; in fact, he is only entitled to habeas corpus relief if there is no material dispute as to the facts relating to his conviction and the statute under which he was convicted did not prohibit his conduct. (Scoggins, supra, 9 Cal.5th at p. 674.) Under a substantial evidence review, we must accept the reasonable inferences supporting the verdict over any inferences (even if reasonable) proffered by the party seeking to challenge it. (People v. Shamblin (2015) 236 Cal.App.4th 1, 15; see also People v. Rundle (2008) 43 Cal.4th 76, 137 [if there is substantial evidence supporting the verdict, it is insufficient for a defendant to cite to “various items of evidence in isolation . . .”], disapproved of on another ground in People v. Doolin (2009) 45 Cal.4th 390, 421, fn. 22.) Thus, we conclude that the “totality of the circumstances” required for reviewing the sufficiency of the evidence must be derived from the evidence presented in defendant’s trial and necessarily framed by the jury’s resolution of evidentiary conflicts and determination of the credibility of witnesses, including the jury’s rejection of the allegation that defendant personally used a gun. (See Banks, supra, 61 Cal.4th at p. 802 [requiring a reviewing court to look at the totality of the circumstances].) We find support for our conclusion in cases addressing various resentencing statutes. In Cooper, supra, 77 Cal.App.5th at page 417, the issue before the court was the defendant’s resentencing petition pursuant to former section 1170.95, which had recently been amended by Senate Bill 1437. The defendant was convicted at trial of first degree murder and kidnapping but acquitted of being a felon in possession of a firearm (while the jury found a principal was armed) and subsequently filed a petition for relief under former section 1170.95. The People argued that the acquittal only meant that the jury did not find him guilty beyond a reasonable doubt. The defendant argued that the acquittal should be treated as a finding that he did not have a gun on that day. (Cooper, at p. 407.) After an evidentiary hearing, the trial court denied the petition, finding that the defendant possessed and fired a gun on the day in question and was therefore a major participant 22 with reckless indifference to human life. (Id. at pp. 408-409.) On appeal, the appellate court considered the preclusive effect of the defendant’s acquittal of a firearm possession charge in considering his eligibility for relief under former section 1170.95. The court concluded that the previous acquittal of the firearm possession charge constituted a finding inconsistent with the trial court’s theory that he was a major participant because the trial court heavily relied on the theory, rejected by the jury, that the defendant was armed throughout the event. (Cooper, at p. 417.) The appellate court reversed the trial court’s order denying the petition and remanded the cause for a new hearing under former section 1170.95, subdivision (d), without consideration of evidence that the defendant possessed the gun. (Cooper, at pp. 418-419.) Cooper concluded that through former section 1170.95, the Legislature created a “parallel structure” to ensure that first degree murder convictions meet the requirements under amended sections 188 and 189, regardless of whether the defendant was convicted prior to or after the amendments. (Cooper, supra, 77 Cal.App.5th at p. 415.) The appellate court held that a trial court could not determine, in a proceeding under former section 1170.95, subdivision (d), whether the prosecution had proven beyond a reasonable doubt that the defendant could be convicted of murder under the amended law by considering evidence that the jury previously found not true beyond a reasonable doubt. (Cooper, at p. 414.) In this way, former section 1170.95 is similar to the resentencing provision in Proposition 36, as set forth in section 1170.126. (Cooper, at pp. 414-415 [noting similarity in the parallel structures of resentencing provisions of Prop. 36 and former § 1170.95].) In fact, Cooper relied upon the reasoning in cases involving resentencing eligibility under Proposition 36 in reaching its conclusion. For example, in People v. Arevalo, supra, 244 Cal.App.4th 836, the defendant was convicted at trial of a third strike but acquitted of a charge of possession of a firearm by a felon, and an allegation that he was armed with a firearm was found not true. The defendant subsequently petitioned for resentencing under Proposition 36, but the trial 23 court found him ineligible based on its own review of the trial evidence that supported the conclusion that the defendant was armed with a firearm or deadly weapon. (Arevalo, at pp. 843-844.) The trial court justified doing so by noting that the original trial court found the “ ‘armed with a firearm’ allegation” not true, but that “ ‘[a] finding of an allegation of “not true” does not mean the nonexistence of guilt, factual innocence, or incredulity of testimony given at trial.’ ” (Id. at p. 844.) The appellate court concluded that any factor precluding eligibility for resentencing under Proposition 36 must be proven beyond a reasonable doubt and because that standard was not met at trial, the trial court was precluded from finding otherwise. The court explained that otherwise, “nothing would prevent the trial court from disqualifying a defendant from resentencing eligibility consideration by completely revisiting an earlier trial, and turning acquittals and not-true enhancement findings into their opposites.” (Arevalo, at p. 853.) Similarly, in People v. Piper, supra, 25 Cal.App.5th 1007, the appellate court concluded that on a resentencing petition under section 1170.126, the trial court may not make an eligibility determination contrary to the jury’s verdict and findings at trial. To do so would allow the People to “ ‘compensate for any potential evidentiary shortcoming at a trial . . . .’ ” (Piper, at p. 1015.) We acknowledge that we are not dealing with a parallel structure between a resentencing provision, like former section 1170.95 and section 1170.126, and an amended law where each require proof beyond a reasonable doubt. Rather, this case involves a defendant who was initially denied access to the ameliorative parallel structure of the resentencing provision in former section 1170.95 and the amended law by virtue of his pre-Banks/Clark special-circumstance finding. Seeking to challenge this finding through a habeas corpus petition, he is required to carry the burden as to whether there is substantial evidence to support the finding. Nevertheless, through Senate Bill 1437, the Legislature intended “ ‘to ensure our state’s murder laws “fairly address[] the culpability of the individual and assist[] in the reduction of prison overcrowding, which partially 24 results from lengthy sentences that are not commensurate with the culpability of the individual.” [Citations.]’ ” (People v. Nash (2020) 52 Cal.App.5th 1041, 1082-1083.) Thus, the goal of Senate Bill 1437, just as in Proposition 36, is to seek a better fit between punishment and culpability. (See Cooper, supra, 77 Cal.App.5th at p. 415.) It would be contrary to that goal to require the defendant to labor under the burden of a theory that was rejected by the jury at trial, when doing so would invite inconsistencies in the deliberative process. Thus, we find it appropriate, when determining the sufficiency of the evidence of the special circumstance finding, to give defendant the benefit of the jury’s finding that he did not personally use a firearm in the commission of the offenses for which he was convicted. It is through this lens that we view the evidence. III Analysis The terms “major participant” and “reckless indifference to human life” in section 190.2, subdivision (d) are drawn from the United States Supreme Court’s jurisprudence on the constitutionality of the death penalty in cases of felony murder, ultimately concluding that if a defendant was not the actual killer but was a major participant in the underlying felony and acted with reckless indifference to human life, the Eighth Amendment does not prohibit the imposition of the death penalty as disproportionate. (Tison v. Arizona (1987) 481 U.S. 137, 158 (Tison).) Because section 190.2 incorporates the standard established in Tison, California courts have looked to Tison for guidance in defining the concepts of major participation and reckless indifference to human life. (See Scoggins, supra, 9 Cal.5th at p. 675; Banks, supra, 61 Cal.4th at p. 798.) Our California Supreme Court has viewed Tison, in conjunction with Enmund v. Florida (1982) 458 U.S. 782 (Enmund) as “represent[ing] points on a continuum.” (Banks, at p. 802.) The defendants in Tison were sufficiently 25 culpable to justify the application of the death penalty, but the defendant in Enmund was not. “Somewhere between them, at conduct less egregious than the Tisons’ but more culpable than Earl Enmund’s, lies the constitutional minimum for death eligibility.” (Ibid.) In Enmund, the defendant and two others robbed an elderly couple at their home. When the couple resisted, one or both of Enmund’s cohorts shot and killed the couple. Enmund, who was waiting in a car nearby, drove his cohorts away and helped them dispose of the murder weapons. (Enmund, supra, 458 U.S. at p. 784.) The court held that the imposition of the death penalty was an unconstitutionally disproportionate punishment as to Enmund, who had not intended for a killing to take place and was not present for the murders. (Id. at p. 788.) In contrast, the imposition of the death penalty in Tison was affirmed on appeal. Three brothers “assembled a large arsenal of weapons” to break their father and another inmate, both convicted murderers, out of prison. (Tison, supra, 481 U.S. at p. 139.) The brothers armed the two prisoners, locked up the prison guards, and helped the prisoners escape. (Ibid.) A few days later, the group got a flat tire and flagged down a passing car for help. (Id. at pp. 139-140.) They kidnapped the family that was in the car and robbed them. (Id. at p. 140.) Two brothers then guarded the family while their father considered what to do next. (Ibid.) Eventually, the father shot all of the family members, and the group of perpetrators left the victims to die without rendering aid. (Id. at p. 141; Scoggins, supra, 9 Cal.5th at p. 675.) In Banks and Clark, the California Supreme Court sought to provide further guidance for determining a felony murder aider and abettor’s eligibility for the death sentence or life imprisonment without parole, in light of section 190.2 and the Tison/Enmund continuum. (Banks, supra, 61 Cal.4th at pp. 800-801.) Noting that the statute “imposes both a special actus reus requirement, major participation in the crime, and a specific mens rea requirement, reckless indifference to human life,” the court 26 determined that a sentencing body “must examine the defendant’s personal role in the crimes leading to the victim’s death and weigh the defendant’s individual responsibility for the loss of life, not just his or her vicarious responsibility for the underlying crime.” (Id. at pp. 798, 801.) In Banks, the court established a list of factors relevant to determining whether a particular defendant was a major participant in the underlying felony and in Clark, the court considered the second requirement for the special circumstance, reckless indifference to human life. We now apply the Banks/Clark factors to determine whether substantial evidence supports the jury’s finding that defendant was a major participant in the robbery and acted with reckless indifference to human life, taking each question in turn. In conducting our analysis, we note that we take the jury’s not true finding on the personal use of a firearm allegation only for what it is, that defendant did not intentionally display a firearm in a menacing manner, intentionally fire it, or intentionally strike or hit a human being with it. We do not extend such finding to necessarily include, as the trial court did, the conclusion that the jury determined defendant had acted to prevent codefendant from continued firing, and thereby saved lives. We review the entirety of the evidence, in deference to the jury’s finding in support of the special circumstance allegation, and as we have indicated, are required to accept the reasonable inferences supporting such verdict. A. Major Participant To be a major participant, a defendant’s participation in criminal activities known to carry a grave risk of death must be sufficiently significant to be considered “major.” (Clark, supra, 63 Cal.4th at p. 611.) 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 27 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? No one of these considerations is necessary, nor is any one of them necessarily sufficient.” (Banks, supra, 61 Cal.4th at p. 803, fn. omitted.) Considering these Banks factors, we conclude substantial evidence supports the jury’s finding that defendant was a major participant in the robbery. First, there was evidence that defendant initiated the encounter leading to the robbery with codefendant. Defendant directed the driver to make a U-turn, and immediately got out of the car to approach the convertible with codefendant. Almost immediately, the robbery was instigated and a weapon was presented. The evidence demonstrates defendant was a willing participant in the robbery from its inception. Indeed, the jury’s finding defendant guilty of the robbery and attempted robbery charges, reflects this interpretation. Next, we consider whether defendant was aware of the “particular dangers posed by the nature of the crime, weapons used, or past experience or conduct of the other participants” of the robbery. (Banks, supra, 61 Cal.4th at p. 803.) We conclude the manner in which the robbery was conducted and the way it unfolded do support a finding that defendant was aware of the danger presented here. Notably, the gun was brandished in close proximity to the convertible passengers, codefendant demanded to know where they were from, and the driver was tapped on the head with the gun. As this transpired, defendant gained knowledge of the particular dangers posed by the nature of the armed robbery and, although there is some evidence that after shots were fired defendant may have intervened, he did not appear surprised by the brazen nature of the robbery itself and the violent and dangerous manner in which it occurred after he himself had initiated the encounter leading to the robbery by flagging down the victims’ car. Additionally, there was testimony that defendant was the one who demanded money, telling the occupants in the victims’ car to “break yourself.” 28 The People argue that it can also be reasonably inferred from defendant’s purported gang membership and knowledge of violence in the gang culture that codefendant would be willing to resort to violence. In other words, defendant should have expected codefendant to commit a violent felony at any time, solely due to his gang membership status. As defendant notes, courts have rejected such efforts to substitute generic evidence about the general dangerousness of gangs for actual proof that a given defendant was aware that the specific perpetrator was likely to employ fatal force. (See, e.g., Banks, supra, 61 Cal.4th at pp. 810-811 [where no evidence indicated the codefendants who belonged to the same gang had ever participated in shootings, murder, or attempted murder, or even that any member of their clique had, there could be no reasonable inference that the defendant knew the codefendants would be likely to kill]; Miller, supra, 14 Cal.App.5th at p. 976 [no reasonable inference the defendant knew codefendant was likely to kill where membership in the same gang and commission of follow-home robberies together in the past did not substitute for the lack of evidence that they had ever participated in shootings, murder, or attempted murder].) Although there is no evidence defendant knew the Hyundai passengers well or had any knowledge regarding codefendant’s criminal history, past gun use, or details regarding his propensity for violence at the time of the shooting, when this evidence is weighed against the manner in which the robbery was conducted, the balance weighs in favor of concluding defendant was aware of the particular dangers of the crime. We also consider whether defendant was present at the scene of the murder and in a position to prevent it, whether his own actions or inactions played a role in the death, and what defendant did after lethal force was used. As our Supreme Court explained, “ ‘ “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 29 at fault for the resulting murders.” ’ [Citation.]” (Scoggins, supra, 9 Cal.5th at p. 678.) First, there is no dispute that defendant was present at the scene of the murder, and actively involved in the robbery when the murder occurred. He was clearly in a position to prevent the murder, had he taken action when the gun was first produced during the robbery; instead, defendant failed to intervene or to stop the escalation of the crime. In fact, his presence could arguably be seen as bolstering codefendant’s confidence to act in a more reckless and cavalier manner. Second, as discussed above, defendant’s actions and inactions both played a role in the death, as he initiated the violent encounter, and emboldened codefendant by assisting him. After the lethal force was used, he ran away, changed his appearance, and attempted to hide the evidence, as we discuss in more detail below when discussing reckless indifference. Defendant argues that the record demonstrates that he took actions after the first shot was fired to prevent additional harm. In particular, his display of shock after the first gunshot suggests that he was surprised the gun was actually used, and at that point, he argues the evidence suggests that he physically restrained codefendant in an attempt to prevent further use of the gun. The People acknowledge the evidence indicated that defendant restrained the shooter but argue that the jury could have inferred those actions were really an attempt to flee. Defendant responds that this is not a reasonable inference from the evidence in light of the fact that several people testified that defendant yelled at the shooter to get him to stop either before or while he restrained codefendant. Like much of the testimony in this case, the evidence as to who grabbed who and for what purpose, is inconsistent and unclear. The time between the first and second shot was not very long, possibly as short as a couple of seconds. The driver of the convertible, Moore, testified that after codefendant fired the gun at the murder victim, Brown, defendant grabbed codefendant from behind in a bear hug and said something to the effect of “stop” or “cut it out,” “you already shot him” or “leave him alone.” At the same 30 time, or very close in temporal proximity, the female Hyundai passenger, Richardson, yelled “let’s go . . . let’s get out of here.” There was also testimony by Armstrong that after the shots were fired, it was defendant who was restrained and pulled back to the car. Overall, this evidence could support an inference either that defendant restrained the shooter in an effort to stop bloodshed, as defendant argues, or that he did so in an effort to flee, as the People argue. Notably, the jury verdicts do not assist us in determining which version the jury believed. In reaching its verdicts,14 the jury could have found that, even if defendant did restrain codefendant and whatever his intent in doing so, he did so after he acted as a major participant in the robbery, which lead to the murder. Reviewing the totality of the evidence in the light most favorable to the prosecution, without reliance on the People’s theory that defendant used a firearm, there is substantial evidence to support a finding that defendant was a major participant in the robbery that resulted in the murder. B. Reckless Indifference We next consider 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 14 Specifically, guilty of first degree murder and attempted second degree robbery of Brown, second degree robbery of Moore, but acquitting defendant of attempted murder and the lesser included offenses of attempted voluntary manslaughter and assault with a firearm of Moore. 31 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. (Ibid.) Specifically, we turn to several considerations our Supreme Court found relevant in determining 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, supra, 9 Cal.5th at p. 677.) Just as with consideration of major participant, these factors are not exhaustive, sufficient, or necessary to establishing whether the defendant’s conduct met the standard for the special circumstance. The People argue that defendant should be subject to the special circumstance finding because the armed robbery was gang related, took place in a residential neighborhood with bystanders nearby, the shooting was not an accident, and defendant later expressed dismay that all he got was $10. The People also seemingly admit that codefendant was the shooter, yet still maintain that the evidence supported the conclusion that defendant used the gun. As covered in our major participant discussion, we do not rely on the People’s theory that defendant personally used a firearm, as that would be inconsistent with the 32 jury’s finding the personal use allegation not true. (Cooper, supra, 77 Cal.App.5th at pp. 416-418.) We also acknowledge “[t]he intent to commit an armed robbery” or “[t]he mere fact of a defendant’s awareness that a gun will be used in the felony is not sufficient to establish reckless indifference to human life.” (Banks, supra, 61 Cal.4th at p. 799; Clark, supra, 63 Cal.4th at p. 618.) Notwithstanding such, we find there is substantial evidence supporting the conclusion that defendant acted with reckless indifference. The presence of a gun and the manner in which the gun was intended to be used are factors we may permissibly consider. (Banks, supra, 61 Cal.4th at p. 801; see Clark, supra, 63 Cal.4th at pp. 617-618.) Here, defendant instigated the encounter with the convertible by directing the driver to turn around. Two passengers in the convertible testified that the Hyundai stopped near the victims’ vehicle, blocking off their escape route. Defendant and codefendant then immediately approached the victims’ car as a pair while one of them wielded a gun and threatened the occupants of the convertible with it. Defendant not only knew about the presence of the gun, but tacitly approved of the use of the gun as a threat of force behind the robbery. The use of the gun posed an increased level of danger under these circumstances. It is reasonable to conclude that the gun was critical to enforce compliance with the robbery and that defendant, having directed the confrontation with the driver of the Hyundai, consciously disregarded the significant risk of death created by the use of the gun in those circumstances. Additionally, after the gun was used, defendant did not attempt to aid the murder victim. Defendant argues that the evidence supports the conclusion that he tried to prevent bloodshed by restraining the shooter. As previously stated, there is conflicting evidence on this, and this factor thus does not benefit defendant. In the end, however, defendant fled without rendering aid to, or inquiring on the condition of, the murdered victim. Instead, defendant returned to the party, changed into different clothes, expressed disappointment over the proceeds from the robbery, then attempted to concoct a story about the Hyundai being stolen in an attempt to distance himself from the robbery and 33 murder. This evidence supports the jury’s finding that defendant acted with reckless indifference and satisfies the requirements of Banks and Clark. Generally, defendants who have been successful in petitioning for a writ of habeas corpus to have their special circumstance findings vacated under Banks and Clark are those who were not present for the shooting (either because they were acting as getaway drivers or because they were involved in the planning of the crime only). (See, e.g., Miller, supra, 14 Cal.App.5th at p. 965 [the defendant selected the robbery target and was not at the scene of the robbery/murder]; In re Bennett (2018) 26 Cal.App.5th 1002, 1019- 1020 [the defendant was involved in planning the robbery but was not at the scene of the murder]; In re Ramirez (2019) 32 Cal.App.5th 384, 404-406 [the defendant acted as getaway driver and was not at the scene of the murder]; In re Taylor (2019) 34 Cal.App.5th 543, 559 [same].) Defendant’s conduct is clearly distinguishable. Considering the totality of the circumstances, we conclude the special circumstance finding was supported by substantial evidence. DISPOSITION The trial court’s order granting defendant’s habeas corpus relief is reversed. /s/ EARL, J. We concur: /s/ HULL, Acting P. J. /s/ DUARTE, J. 34	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483638/	2022 IL App (1st) 211331-U No. 1-21-1331 Order filed November 14, 2022 First Division NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________ WILLIAM F. PRUENTE, ) Appeal from the ) Circuit Court of Petitioner-Appellant, ) Cook County. ) v. ) No. 20 CH 03670 THE RETIREMENT BOARD OF THE POLICEMEN’S ) ANNUITY AND BENEFIT FUND OF THE CITY OF ) Honorable CHICAGO, ) Allen Price Walker, ) Judge, presiding. Respondent-Appellee. ) JUSTICE HYMAN delivered the judgment of the court. Presiding Justice Lavin and Justice Pucinski concurred in the judgment. ORDER ¶1 Held: Affirming Board’s decision to deny pension benefits to police officer convicted of felonies arising from his service as an officer. ¶2 Former Chicago police officer William Pruente was convicted of perjury, obstruction of justice, and official misconduct for providing false testimony in a narcotics case. When Pruente applied for a pension benefit, the Retirement Board of the Policemen’s Annuity and Pension Benefit Fund initially voted to approve his application. Later, the Board rescinded its approval 1-21-1331 to investigate his felony convictions further. After a hearing, the Board voted unanimously to deny Pruente a pension under section 5-227 of the Illinois Pension Code, which provides that “[n]one of the benefits provided for in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as a policeman.” 40 ILCS 5/5-227 (West 2020). ¶3 Pruente contends (i) the Board’s denial of his pension application constituted an excessive fine in violation of the eighth amendment of the United States Constitution; (ii) the Board violated the Open Meetings Act when it rescinded approval of his pension application without notifying him; and (iii) the Board violated its own rules by denying his application without good cause. We affirm. Pruente waived his excessive fine claim by failing to raise it before the Board. Further, the Board did not violate the Open Meetings Act or its rules in denying Pruente’s pension application. ¶4 Background ¶5 Pruente became a Chicago police officer in September 1995. In 2015, Pruente was charged with perjury, official misconduct, and obstruction of justice relating to his sworn testimony during a suppression hearing in a narcotics case. Pruente was found guilty and sentenced to 30 months felony probation and public service. The appellate court affirmed his convictions. People v. Pruente, 2019 IL App (1st) 170767-U. ¶6 In May 2019, Pruente applied for pension annuity benefits with the Retirement Board of the Policemen’s Annuity and Benefit Fund of the City of Chicago. The Board notified Pruente it would conduct a hearing to determine his eligibility for pension benefits under section 5-227 in light of his felony convictions. At the November 25, 2019, hearing at which Pruente testified, the Board orally voted in favor of granting his application. The Board next met on December -2- 1-21-1331 20, 2019. Before voting to ratify approval of Pruente’s pension application, a Board trustee moved to rescind the November 25 oral vote and further review the matter. The motion to rescind passed without opposition. ¶7 On December 31, 2019, the Board sent a letter to Pruente, advising him of its decision to rescind its approval and informing him the Board would address the matter at its regularly scheduled meeting on January 30, 2020. Before the January 30 meeting, Pruente filed an “Objection to Board’s Reconsideration and Brief in Support of Application for Pension Annuity,” which the Board admitted into the record. At the meeting, his attorneys made oral arguments asserting, in part, that the Board violated the Open Meetings Act (5 ILCS 120/1, et seq. (West 2020)) by failing to give him notice of the December 20, 2019, meeting where it voted to rescind its earlier decision to approve his pension benefits application, (ii) the Board did not have “good cause” to reconsider its prior vote approving his application, (iii) caselaw supported awarding him a pension despite his felony convictions, and (iv) the Pension Code provision allowing the attorney general to bring a civil action to enjoin pension payments to a convicted felon was unconstitutional. ¶8 After the hearing, the Board unanimously voted to deny Pruente’s pension benefits application due to his felony convictions. The Board issued its final written and appealable decision on February 27, 2020. In its decision, the Board found it complied with the Open Meetings Act when it voted to rescind its decision awarding him a pension benefit, and that regardless, Pruente had an opportunity to raise the same objections at the January 30, 2020, meeting. The Board determined that the vote taken on November 25, 2019, was not a final decision or order, as it was not in writing and the Board’s rules permitted reconsideration of a vote for “good cause.” The Board concluded it had “good cause” to reconsider because (i) -3- 1-21-1331 Pruente was not entitled to a pension benefit under section 5-227 of the Pension Act; (ii) awarding him a pension violated the Board’s fiduciary duties; and (iii) the Attorney General would likely sue the Board to enjoin payments to Pruente. The Board also concluded it did not have the authority to declare the divestiture provision of the Pension Code unconstitutional. ¶9 Pruente filed a petition for administrative review in the circuit court. Pruente argued that (i) the Board’s November 25, 2019, decision to grant his pension benefit was final and not subject to rescission; (ii) the Board’s rescission of his pension benefit without notice violated the Open Meetings Act; (iii) the Board’s decision denying him a pension annuity violated his due process rights and the Eighth Amendment’s prohibition on excessive fines, and (iv) the Board’s finding that his felony convictions were related to, arose out of, or was in connection to his service as a policeman was clearly erroneous and against the manifest weight of the evidence. ¶ 10 After a hearing, the circuit court issued a memorandum opinion and order denying Pruente’s petition for administrative review in part and affirming it in part. The court found Pruente’s felony convictions arose out of his service as a police officer because “but for” his position, he would not have offered false testimony at a suppression hearing. ¶ 11 The court further found unclear whether the Board followed the Open Meetings Act notice requirements before its December 20, 2019, meeting, but Pruente was not prejudiced because he had the opportunity at the January 30, 2020, hearing to object to the Board’s decision to reconsider. ¶ 12 As to the eighth amendment challenge, the court found Pruente failed to provide evidence of the potential amount of pension funds forfeited other than the vague assertion that it was “potentially in excess of millions of dollars.” Without evidence of the amount of pension -4- 1-21-1331 benefits being forfeited, the court could not find it was grossly disproportionate to the maximum $10,000 fine for his felony convictions. ¶ 13 The court found that the Board erred in denying Pruente a refund of contributions he made to the pension fund before his felony convictions and remanded with directions to the Board to determine what, if anything, Pruente was owed. (That issue is not before the court.) ¶ 14 Pruente filed a motion to reconsider, which the trial court denied. ¶ 15 Analysis ¶ 16 Standard of Review ¶ 17 In administrative review actions, we review the administrative agency’s decision, not the circuit court’s decision. Wade v. City of North Chicago Police Pension Board, 226 Ill. 2d 485, 504 (2007). The standard of review varies depending on whether the question is one of fact or law or a mixed question of fact and law. AFM Messenger Serv., Inc. v. Department of Employment Security, 198 Ill. 2d 380, 390 (2001); Kelly v. Retirement Board of Policemen’s Annuity & Benefit Fund of City of Chicago, 2022 IL App (1st) 210483, ¶ 30. We review findings of fact under the manifest weight of the evidence standard. Glaser v. City of Chicago, 2018 IL App (1st) 171987, ¶ 20. A finding is against the manifest weight of the evidence if the opposite conclusion is clearly evident. Kelly, 2022 IL App (1st) 210483, ¶ 30. We deem the Board’s factual findings prima facie true and correct. Glaser, 2018 IL App (1st) 171987, ¶ 20. We will not reverse a Board’s factual finding, however, because the opposite conclusion is reasonable. Kelly, 2022 IL App (1st) 210483, ¶ 30. Rather, we will affirm so long as evidence in the record supports the Board’s decision. Id. ¶ 18 When the issue presents purely a legal question, we apply the de novo standard of review. City of Belvidere v. Illinois State Lab. Relations Board., 181 Ill. 2d 191, 205 (1998). We review -5- 1-21-1331 a mixed question of law and fact for clear error. A mixed question of law and fact includes one in which “the historical facts are not in dispute and the issue is whether the established facts satisfy the statutory standard.” (Internal quotation marks omitted.) My Baps Construction Corp. v. City of Chicago, 2017 IL App (1st) 161020, ¶ 115. A clearly erroneous decision reveals “the definite and firm conviction that a mistake has been made.” Kelly, 2022 IL App (1st) 210483, ¶ 31. ¶ 19 Eighth Amendment ¶ 20 Pruente does not contest the Board’s factual finding that his felony convictions for perjury, obstruction of justice, and official misconduct constituted felonies arising out of his service as police officer under section 5-227 of the Pension Act. 40 LCS 5/5-227 (West 2020). Instead, he contends the Board’s decision to deny him a pension benefit constituted an “excessive fine” violating the eighth amendment of the United States Constitution because his penalty for his felony convictions was $10,000 while his lost pension benefits would presumably greatly exceed that amount. ¶ 21 On administrative review, a party forfeits arguments, issues, or defenses that it failed to raise in proceedings before the administrative agency. Demesa v. Adams, 2013 IL App (1st) 122608, ¶ 52; Cinkus v. Village of Stickney Municipal Officers Electoral Board, 228 Ill. 2d 200, 212 (2008) (defense not presented at administrative hearing is procedurally defaulted and may not be raised for the first time before circuit court). ¶ 22 Pruente raised the excessive fine issue in his petition for administrative review. The circuit court rejected it, finding Pruente failed to provide evidence of the potential amount of pension funds forfeited other than the vague assertion of “potentially in excess of millions of dollars.” But, as noted, we review the Board’s decision, not the circuit court’s decision. Wade v. City of -6- 1-21-1331 North Chicago Police Pension Board, 226 Ill. 2d at 504. Before the Board, Pruente did not argue that denying his pension application constituted an excessive fine but instead argued it constituted cruel and unusual government action under the eighth amendment. The excessive fine clause and the cruel and unusual clause involve distinct inquiries. See Alexander v. United States, 509 U.S. 544, 558 (1993) (“Unlike the Cruel and Unusual Punishment Clause, which is concerned with matters such as the duration or conditions of confinement, “[t]he Excessive Fines Clause limits the government’s power to extract payments, whether in cash or in kind, as punishment for some offense.”). Pruente waived the issue by failing to argue before the Board that its decision constituted an excessive fine under the Eighth Amendment. ¶ 23 Open Meetings Act ¶ 24 Pruente contends the Board violated the Open Meetings Act by failing to notify him of its December 20, 2019, meeting, where it rescinded its decision approving his pension application. The Board denies it violated the Open Meetings Act and, regardless, a violation was cured when Pruente had a full opportunity to raise objections at the January 30, 2020, meeting. Because this issue presents a mixed question of law and fact, whether the Board’s actions satisfied the standards in the Open Meetings Act, we review for clear error. My Baps Construction Corp. 2017 IL App (1st) 161020, ¶ 115. ¶ 25 The Open Meetings Act imposes specific notice requirements on public bodies, like the Board, for meetings. See 5 ILCS 120/2.02 (West 2020). The Act provides, “where the provisions of this Act are not complied with, or where there is probable cause to believe that the provisions of this Act will not be complied with, any person * may bring a civil action in the circuit court for the judicial circuit in which the alleged noncompliance has occurred or is about to occur, or in which the affected public body has its principal office, prior to or within -7- 1-21-1331 60 days of the meeting alleged to be in violation of this Act.” 5 ILCS 120/3(a) (West 2020). Among the remedies the court may issue include “declaring null and void any final action taken at a closed meeting in violation of this Act.” Pruente contends that because he did not receive notice of the December 20, 2019, meeting, the Board’s decision was null and void. We disagree. ¶ 26 Accepting Pruente’s contention that the Board violated the Open Meetings Act by failing to notify him, the Board cured the defect by later holding a meeting in compliance with the Act and affirming its prior decision. Argo High School Council of Local 571, IFT, AFT, AFL– CIO v. Argo Community High School District 217, 163 Ill. App.3d 578, 583 (1987). (“[I]t is well established that where there has been a prior violation of the Open Meetings Act [citation], a board is not prevented from calling a subsequent meeting, noticed in full compliance with the requirements of the Act, and there taking the identical action [citation].”). ¶ 27 On December 31, 2019, the Board notified Pruente of its decision to rescind and informed him it would meet on January 30, 2021, to address the matter. Pruente then submitted an objection to the Board’s decision to rescind his pension benefit and attended. His attorneys argued against the Board’s decision. The Board then took the same action by rescinding approval of Pruente’s pension application and issuing a final written decision denying it. Thus, the Board cured a prior defect, if any. ¶ 28 “Good Cause” ¶ 29 Pruente contends we should reverse the Board’s denial because, in the absence of “good cause,” which it failed to show, the Board had no authority to rescind its initial vote. ¶ 30 Under Rule 7.6 of the Board’s Rules and Regulations, “[a]ny decision of the Board regarding an application for benefits * shall be first orally announced at an open meeting of -8- 1-21-1331 the Board and thereafter, where necessary, reduced to a formal decision published in accordance with relevant statutory requirements. *** The decision orally announced by the Board shall be subject to revision as to form or substance until such time as the formal written order is published.” ¶ 31 Under section 2 of article 7 of the Board’s Rules and Regulations, “Action on any application may be reviewed or reconsidered at any time by majority vote of the Board for good cause shown, in accordance with provision of the law governing this fund.” Pruente concedes the Board has flexibility to reconsider its actions yet asserts the Board must show it had “good cause,” which it failed to do when it rescinded its decision. ¶ 32 “Good cause” is undefined in the Board’s Rules, so the Board must determine its meaning. A presumption of validity applies to administrative body’s interpretation of its rules as long as the interpretation relates to the agency’s power. Taylor v. Police Bd. of City of Chicago, 62 Ill. App. 3d 486, 489 (1978). A reviewing court decides whether the Board’s interpretation of its rules has a reasonable basis in law. Id., 62 Ill. App. 3d at 489. See also Walk v. Department of Children & Family Services, 399 Ill. App. 3d 1174, 1181 (2010) (agency’s interpretation of own rules and regulations “ ‘ “enjoys a presumption of validity.” ’ ” (citations omitted)). ¶ 33 When the Board voted on December 20, 2019, to rescind its oral vote to approve Pruente’s pension benefit application, it had not yet issued a final written decision and reasonably interpreted Rule 7.6, permitting recession and reconsideration. In its February 27, 2020, final written decision, the Board expressed three “good cause” reasons for reconsidering its decision: (i) Pruente was not entitled to a pension under the Pension Code because of his felony convictions; (ii) granting his pension application would violate the Board’s fiduciary duties; and (iii) granting the pension application would subject the Board, and perhaps individual -9- 1-21-1331 members, to a lawsuit by the Illinois Attorney General. The Board’s “good cause” finding under its rules was reasonable, which the Board demonstrated by correcting a perceived error, avoiding unnecessary litigation, and eliminating personal liability for breach of fiduciary duties. ¶ 34 Accordingly, we reject Pruente’s contention that the Board failed to find “good cause” or violated its rules in rescinding its oral vote. ¶ 35 Affirmed. - 10 -	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483630/	Filed 11/14/22 Karamooz v. Karamooz CA4/3 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 THREE NIMA KARAMOOZ, Plaintiff and Respondent, G060515 v. (Super. Ct. No. 30-2010-00380990) SAEED KARAMOOZ, OPI NION Defendant and Appellant. Appeal from a postjudgment order of the Superior Court of Orange County, Jacki C. Brown, Judge. Affirmed. Kermani LLP, Ramin Kermani-Nejad, Mohamad Ahmad; Law Office of Kathryn M. Davis, Kathryn M. Davis; One LLP and Peter R. Afrasiabi for Defendant and Appellant. Lefton Law, Jennifer Lefton; Conti Law and Alexander L. Conti for Plaintiff and Respondent. * * * Probate Code section 8804, subdivision (b), allows a court to remove the personal representative of an estate for refusing or negligently failing to timely file an 1 inventory and appraisal. In a prior appeal, a panel of this Court affirmed the trial court’s 2 removal of defendant Saeed Karamooz (Saeed) as personal representative of the estate of Nahid Karamooz (decedent) under this statute. Based on Saeed’s failure to timely file an inventory and appraisal, this Court also ruled plaintiff Nima Karamooz (Nima), the sole beneficiary of decedent’s trust, was entitled to attorney fees under section 8804, subdivision (c). On remand, the trial court awarded Nima $212,089.25 in fees. Saeed challenges this award on appeal. Primarily, Saeed contends Nima is not entitled to attorney fees under section 8804 because he has not shown that Saeed’s conduct damaged the estate. However, our prior holding that Nima is entitled to attorney fees under section 8804, subdivision (c), is law of the case, and it precludes Saeed’s argument on appeal. We also reject Saeed’s contention that Nima’s fee motion was untimely. Thus, we affirm the court’s postjudgment order awarding Nima attorney fees. I FACTS AND PROCEDURAL HISTORY A. The Trial The following facts are taken from the prior appeal in this matter, Karamooz v. Karamooz (Apr. 27, 2020, G056897) [nonpub. opn.] (Karamooz I). “Decedent, who died in December 2008, created a revocable trust (Trust) and also executed a pour-over will (Will). Decedent’s son Nima was the sole beneficiary of the Trust and, except for $1 each to Nima’s two siblings, the Will as well. Decedent 1 All further undesignated statutory references are to the Probate Code. 2 We use the parties’ first names for ease of reference. 2 was the original trustee of the trust; Nima was named as the successor trustee. Nima did not want to serve as the trustee and he appointed his father, Hossein Karamooz (Hossein), as successor trustee. [Hossein and decedent acrimoniously divorced about six years before the latter’s death.] The Will named decedent’s brother Saeed as the personal representative of the estate. “Estate assets at the date of death included two Wells Fargo bank accounts (Wells Fargo Accounts) totaling approximately $182,600; two US Bank accounts totaling approximately $7,000; a 34 percent interest in commercial real estate (Bonsall Property); a promissory note from Michael Mirpour and Majid Nourai (Mirpour Note) for approximately $530,000 secured by the Bonsall Property; and a promissory note from Mehdi Lurhassabi (Lurhassabi Note) for $150,000. “In August 2009 Nima filed a Heggstad petition [(see Estate of Heggstad (1993) 16 Cal.App.4th 943)] to confirm Trust ownership of the estate assets, to avoid having to probate the Will. . . . When the Heggstad petition was filed Saeed was given notice he was the personal representative of the estate. Saeed objected to the Heggstad petition, claiming the Will was not a pour-over will. The petition was denied. “In January 2010 Saeed filed a petition to probate the Will showing an approximate $4.85 million value for the estate. Dennis Illingworth (Illingworth) was appointed as the probate referee. The court issued letters testamentary to Saeed naming him the personal representative of the estate, and informed him in writing he was required to file an inventory and appraisal of all of the estate’s assets within four months, i.e., by October 2010. Saeed did not file an inventory and appraisal until June 2012 (2012 Inventory & Appraisal), when he also filed a final accounting and report (2012 Accounting). The only estate assets he listed were the Wells Fargo Accounts. The 2012 Accounting also stated there was no income or estate tax liability and no returns had been filed. 3 “Nima filed an objection to the 2012 Accounting raising several issues, including that the estate owned at least three pieces of real property. In addition, he believed state and federal taxes were due. He also filed a petition to remove Saeed as the personal representative (First Removal Petition), listing numerous grounds, including Saeed’s failure to file an inventory and appraisal, to account, to identify the estates assets and liabilities, to safeguard assets, and to file tax returns. “During litigation of the First Removal Petition, Saeed ‘reminded’ Nima Saeed made millions of dollars a year and ‘demanded’ Nima pay him $200,000 or he ‘would bury [him] under the ground.’ Nima believed this was a threat to prolong the litigation until there were no more estate assets and ‘beat [him] into submission.’ “The Will directed the personal representative to determine the method and location of decedent’s burial. Upon decedent’s death, Hossein had her buried in a Muslim cemetery in Oregon, although she had converted to Christianity. Later, when Saeed became the personal representative he took steps to have her body exhumed and moved to California to be buried in a Christian cemetery. Saeed spent $80,000 of the estate’s funds to pay for the exhumation and reburial without court authorization. “In May 2013, Saeed filed an action against Hossein (Conversion Action) for conversion, recovery of property under section 850, trespass to chattels, breach of implied contract, claim and delivery, replevin, and for double damages under section 859, seeking $3 million in damages. The Conversion Action was based on allegations Hossein took Persian rugs, a car, and other property including jewelry, precious metals, and crystals from the estate. “In September 2013 trial commenced on the First Removal Petition. After some testimony and admission of evidence, the parties entered into a settlement (Settlement). The 2012 Accounting and First Removal Petition were dismissed without prejudice. Nima agreed to help inventory the rugs in exchange for Saeed’s agreement not to proceed with the Conversion Action. Saeed agreed to marshal the assets of the estate, 4 including the Persian rugs, and file another inventory and appraisal so the estate could be closed. . . . “Despite the Settlement, the Conversion Action continued and Saeed did not file an inventory and appraisal. In June 2014 Nima filed a petition to compel a final accounting and to distribute assets. He reiterated he had filed an objection to the 2012 Accounting Saeed had filed due to multiple inadequacies. He also alleged the Settlement and Saeed’s failure to comply with its terms. Further, he alleged Saeed failed to provide an accurate inventory and appraisal, failed to protect assets, and failed to pay income taxes, among other alleged misdeeds. “In October 2014 Saeed filed an interim accounting and report. In February 2015 the court ordered Saeed to file another interim accounting by May 8. It was not filed. In June the court ordered Saeed to file an interim accounting by July 23, 2015. On August 3, 2017 Saeed filed an interim accounting, to which Nima filed an objection. “In July 2016 Nima filed another petition to suspend Saeed’s powers, remove him as executor, and appoint a special administrator. After the court sustained Saeed’s demurrer in part, Nima filed an amended petition (Second Removal Petition). The Second Removal Petition sought damages, attorney fees, and to surcharge Saeed. Nima alleged that over the past six years since Saeed was appointed personal representative he had breached his fiduciary duties, failed to account, wasted and mismanaged estate property, created substantial estate tax liability, and engaged in questionable litigation, i.e., the Conversion Action, on behalf of the estate. “In November 2017, Saeed filed a supplemental inventory and appraisal (2017 Inventory) listing only the judgment in the Conversion Action. “On the day before trial on the Second Removal Petition in May 2018, Saeed filed a First Report and Account and Petition for Settlement (2018 Accounting). It stated the inventory and appraisal previously filed were incorrect and had to be amended. Saeed noted he was ‘working on’ a corrected inventory. 5 [¶] . . . [¶] “The court issued a statement of decision on the Second Removal Petition, which was subsequently modified. The court denied Saeed’s motion for judgment on the pleadings based on the statute of limitations and motion for judgment as a matter of law. It found the duties of a fiduciary are ongoing and the statutes of limitations are not the same for a fiduciary as for a claim based on breach of contract or tort. The court noted it would focus on equitable remedies, including a consideration of laches. “The court found Saeed breached his fiduciary duty in several respects and removed him as the personal representative. He ‘did essentially very little to marshal the assets.’ Rather, he relied on information provided by professionals Hossein hired, which was unreasonable, especially in light of Saeed’s admitted lack of trust in Hossein and also the animosity between Hossein and Nima. The court also faulted Saeed’s ‘extreme delay’ in providing an inventory and an accounting and failing to explain ‘estate proceedings,’ and having estate properties appraised. “Saeed additionally breached his fiduciary duty by using estate funds to exhume and rebury decedent without court approval in light of Nima’s opposition to it. The court also found Saeed’s failure to recognize and understand the legal effect of a pour-over will while continuing to act as the personal representative ‘created a direct conflict of interest.’ Saeed breached his fiduciary duty to Nima, the beneficiary of the Will and the named successor trustee of the Trust to which the estate assets should have been transferred. “The court surcharged Saeed $500,000. It found the value of the estate in early 2010, when Saeed was appointed personal representative, was $617,590, as appraised by Illingworth and as evidenced by the exhibits admitted. Nima was denied that value for eight years. In calculating the surcharge amount, the court reduced the $617,590 by the $80,000 exhumation costs based on laches for Nima’s delay in bringing 6 that claim and by another $37,000 for certain potential tax liabilities because they would be owed by the Trust, not the estate. “In addition, [in the statement of decision and the modification of statement of decision,] the court found Saeed should bear the liability for penalties and interest for late filing of tax returns. “The court also awarded attorney fees, finding Saeed’s ‘repeated and persistent fail[ures] to properly file a timely inventory and accounting, to respond to demands for an accounting,’ and explain the Conversion Action and the basis of his ‘exorbitant expenditures’ ‘were all without reasonable cause.’ “The court denied Saeed’s motions for new trial and to vacate the judgment. Thereafter, Nima was appointed the special administrator of the estate.” (Karamooz I, supra, G056897, fns. omitted.) B. Karamooz I Saeed appealed his removal, the amount of the surcharge, and the award of attorney fees, which this Court addressed in Karamooz I. (Karamooz I, supra, G056897.) Saeed argued his removal was improper because his “delay in filing the inventory and appraisal did not damage the estate and Nima did not show there was tax liability.” (Ibid.) This Court disagreed. It found Saeed’s removal was proper under section 8804, subdivision (b), which allows a court to remove a personal representative for refusing or negligently failing to timely file an inventory and appraisal. (Ibid.; § 8804, subd. (b).) The Court concluded that “even if there had not been loss to the estate due to failure to timely file an inventory and appraisal, Saeed ha[d] not directed [the appellate court] to any authority prohibiting removal based on delay even where there is no loss to the estate. The delay here was lengthy and without excuse, justifying the [trial] court’s exercise of its discretion to remove Saeed.” (Ibid.) 7 As for the surcharge amount, it was primarily based on alleged losses to the bank accounts, Bonsall Property, Mirpour Note, and Lurhassabi Note. This Court concluded there was insufficient evidence to support these alleged losses. (Karamooz I, supra, G056897.) It reversed the $500,000 surcharge award but declared, “there will be penalties and interest due as a result of [Saeed’s] failure to timely file income and estate tax returns. Saeed is properly surcharged for that amount, whatever it is determined to be.” (Ibid.) The Court instructed the trial court on remand to “enter a new judgment ordering a surcharge in the amount of the liability for penalties and interest due to Saeed’s delay in filing tax returns and paying taxes in an amount to be determined by the trial court.” (Ibid.) It further clarified, “[t]his is not a remand for a new trial.” Finally, this Court found the award of attorney fees to Nima was proper under section 8804, subdivision (c), due to Saeed’s “‘repeated and persistent’” failure to timely file an inventory and appraisal. (Karamooz I, supra, G056897.) C. Hearings on Remand and Karamooz II On remand, the trial court separately considered the surcharge and attorney fees issues. As to the former, Saeed argued that since Karamooz I had specified no new trial would occur, the amount of lost interest and tax liability incurred by the estate should be based on the existing record. Thus, Nima could not introduce new evidence. The trial court agreed. It ruled Karamooz I prohibited the introduction of any new evidence concerning the surcharge amount. On March 22, 2021, the court ruled that based on the current record, it could not determine the amount of lost interest and tax penalties suffered by the estate. So, it awarded no surcharge against Saeed. Nima then filed a petition for a writ of mandate, requesting that this Court direct the trial court to hold an evidentiary hearing regarding the surcharge amount. (Karamooz v. Karamooz (Aug. 6, 2021, G060286) [nonpub. opn.] (Karamooz II).) The Court issued a peremptory writ of mandate directing the trial court to vacate its ruling and 8 “hold an evidentiary hearing to determine the amount of the liability for penalties and interest based on [Saeed’s] delay in filing tax returns and paying taxes.” (Ibid.) As explained by the Court, when considering Karamooz I “as a whole, [the trial] court was obligated to conduct an evidentiary hearing narrowly limited to establishing tax penalties and interest due as a result of real party’s failures. No broad ‘new trial’ (as to liability or damages) was authorized. Almost all of the parties’ disputes were conclusively decided by the prior opinion and, by prohibiting a ‘new trial,’ [this Court] simply wished to avoid any attempt to reopen settled matters . . . .” (Ibid.) Based on the record and representations of the parties, it does not appear this evidentiary hearing has occurred yet. Meanwhile, the parties were also filing supplemental briefs concerning Nima’s attorney fees award. Saeed argued Nima’s fee motion was untimely. He also believed Nima was not entitled to attorney fees because Nima had not prevailed on appeal. Specifically, Saeed claimed that under section 8804, a party is only entitled to attorney fees if they prove the personal representative’s failure or delay in filing the inventory and appraisal damaged the estate. He argued Nima’s recovery on the surcharge was reduced from $500,000 to nothing on appeal. Saeed further asserted nothing in the existing record showed his failure to timely file the inventory and appraisal caused any loss to the estate. And he again claimed that under Karamooz I, Nima could not introduce new evidence to show any such losses (the court ruled on the attorney fees issue prior to Karamooz II). Based on these assertions, Saeed insisted Nima could not establish the estate had suffered any damages; therefore, no attorney fees could be awarded under section 8804. The trial court rejected Saeed’s argument, concluding that whether Nima was entitled to attorney fees was no longer subject to argument: “[t]he authority of the [trial court] to award attorney’s fees has already been addressed and affirmed by the Court of Appeal [in Karamooz I].” The only remaining issue on remand was the amount of attorney fees Saeed owed. Following a hearing on May 21, 2022, the court awarded 9 Nima $212,089.25 in fees for legal services provided from 2012 through the date of his fee motion. Saeed now appeals the trial court’s attorney fee order. Primarily, he asserts attorney fees were improperly awarded under section 8804 because Nima failed to show damages to the estate. He also claims Nima’s fee motion was untimely. We reject both arguments and affirm the postjudgment order. II DISCUSSION A. Attorney Fees under section 8804 Saeed argues the trial court erred in applying section 8804, subdivision (c). This statute provides, “[t]he court may impose on the personal representative personal liability for injury to the estate or to an interested person that directly results from the refusal or failure [to file an inventory and appraisal]. The liability may include attorney’s fees, in the court’s discretion.” (§ 8804, subd. (c).) As Saeed interprets this statute, to be awarded attorney fees, Nima must first show Saeed’s failure to timely file the inventory and appraisal damaged the estate. Since Nima has not yet shown any damages to the estate, Saeed claims the attorney fee award must be reversed. We disagree. Nima’s entitlement to fees under section 8804 is already law of the case under Karamooz I and cannot be relitigated. “‘“The doctrine of ‘law of the case’ deals with the effect of the first appellate decision on the subsequent retrial or appeal: The decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case.”’” (Aghaian v. Minassian (2021) 64 Cal.App.5th 603, 612, italics omitted.) “This is true even if the court that issued the opinion becomes convinced in a subsequent consideration that the former opinion is erroneous.” (Santa Clarita 10 Organization for Planning the Environment v. County of Los Angeles (2007) 157 Cal.App.4th 149, 156.) “The doctrine promotes finality by preventing relitigation of issues previously decided.” (Sargon Enterprises, Inc. v. University of Southern California (2013) 215 Cal.App.4th 1495, 1505.) It “‘precludes a party from obtaining appellate review of the same issue more than once in a single action.’” (Aghaian, at p. 612.) Saeed’s appeal asks whether the trial court could award Nima attorney fees under section 8804, subdivision (c). Karamooz I answered this question in the affirmative, holding the trial court had “discretion to award attorney fees to Nima under [subdivision (c) of] section 8804.” (Karamooz I, supra, G056897.) The trial court subsequently awarded Nima $212,089.25 in attorney fees on remand. It rejected Saeed’s argument that fees were improper under section 8804 because Nima had not yet shown damage to the estate. It found the attorney fee issue was “fully resolved [in Karamooz I] and binding on the parties and [the trial] court.” We agree. Karamooz I’s holding on the fee issue is law of the case and cannot be relitigated in this appeal. Whether Karamooz I correctly analyzed the statute is immaterial. (Santa Clarita Organization for Planning the Environment v. County of Los Angeles, supra, 157 Cal.App.4th at p. 156.) In response, Saeed appears to assert the attorney fee ruling in Karamooz I presumed Nima would show damage to the estate on remand. Accordingly, he maintains the trial court could only award fees after Nima showed Saeed’s conduct had damaged the estate. Since this factual condition has not been met, he contends the fee award was improper. We are unpersuaded. It is true the law of the case doctrine does not apply to questions of fact. “[D]uring subsequent proceedings in the same case, an appellate court’s binding legal determination ‘controls the outcome only if the evidence on retrial or rehearing of an issue is substantially the same as that upon which the appellate ruling was based.’” (People v. Barragan (2004) 32 Cal.4th 236, 246.) Accordingly, the doctrine is inapplicable if the attorney fee ruling in Karamooz I presumed Nima would 11 establish damages to the estate on remand. But it did not. Rather, Karamooz I awarded Nima fees solely based on Saeed’s failure to timely file an inventory and appraisal. It did not require Nima on remand to show Saeed’s actions damaged the estate. The above conclusion is apparent from the text of Karamooz I: “where a ‘personal representative refuses or negligently fails’ to timely file an inventory and appraisal, section 8804 allows the court to award attorney fees.” (Karamooz I, supra, G056897, italics added.) It elaborated, “the inventory and appraisal was required to be filed within four months of [Saeed’s] appointment [citation], but Saeed did not file his original and designated ‘final’ inventory and appraisal until June 2012, almost two years after letters testamentary were issued. This inventory included only two bank accounts and none of the other estate property. He did not file another inventory and appraisal until the supplemental inventory and appraisal was filed in November 2017, almost five and a half years later. The only asset listed in the 2017 Inventory was the judgment in the Conversion Action. He never filed an inventory listing the other assets owned by the estate at the date of death. This significant violation of section 8800 justified the court exercising its discretion to award attorney fees to Nima under section 8804 . . . .” (Ibid., italics added.) Under Karamooz I, Saeed’s prolonged failure to timely file an accurate inventory and appraisal was by itself sufficient to warrant fees under section 8804, subdivision (c). Nothing in its analysis suggests Nima first needed to establish damages to the estate or that damages were even relevant to the fee award. Indeed, Karamooz I similarly rejected Saeed’s argument that a showing of damages to the estate was required to remove him as personal representative under section 8804, subdivision (b). (Karamooz I, supra, G056897.) While this Court instructed the trial court on remand to determine the amount of tax liability and interest with regard to the surcharge (ibid.), nothing in Karamooz I indicates this instruction had any connection to the attorney fee 12 ruling. As such, Karamooz I’s ruling that Nima may be awarded fees under section 8804, subdivision (c), is law of the case and governs here. B. Timeliness of Fee Motion Saeed also contends Nima’s attorney fee motion was untimely under the California Rules of Court and, therefore, improperly considered by the trial court. This issue was not expressly considered by Karamooz I. “‘Generally, the doctrine of law of the case does not extend to points of law which might have been but were not presented and determined in the prior appeal.’” (Leider v. Lewis (2017) 2 Cal.5th 1121, 1127.) But it does apply “‘to questions . . . implicitly decided because they were essential to the decision on the prior appeal.’” (Ibid.) Regardless of whether the doctrine applies here, Saeed has failed to show the fee motion was untimely. In unlimited civil cases, “[a] notice of motion to claim attorney’s fees for services up to and including the rendition of judgment in the trial court . . . must be served and filed within the time for filing a notice of appeal under rules 8.104 and 8.108 . . . . ” (Cal. Rules of Court, rule 3.1702(b)(1).) A notice of appeal must generally be filed on or before the earliest of: (1) 60 days after the superior court clerk serves notice of entry of judgment or a filed-endorsed copy of the judgment, (2) 60 days after the party filing the notice of appeal either serves or is served by a party with a notice of entry of judgment or a filed-endorsed copy of the judgment, or (3) 180 days after entry of judgment. (Cal. Rules of Court, rule 8.104(a)(1).) Significantly, here, the judgment is comprised of two separate documents: (1) a tentative Statement of Decision dated June 29, 2018 (the tentative decision), and (2) a Modification of Statement of Decision and Order dated July 31, 2018 (the modification). The court found the deadline for Nima’s attorney fee motion began to run on August 16, 2018, when Nima served Saeed with a notice of entry of judgment. Based on this date, it determined the deadline for Nima’s attorney fee motion was October 20, 13 2018. Nima’s motion was filed on October 15, 2018, so the court found it timely. However, Saeed maintains the clock began to run on August 7, 2018, when the superior court clerk served a file-stamped copy of the modification on the parties. Using this earlier date, he contends the deadline for the fee motion was October 8, 2018, a week prior to its filing. Saeed’s argument is unconvincing. For the deadline to begin running under California Rules of Court, rule 8.104(a)(1), complete judgment must be served by the clerk or one of the parties. “[R]ule 8.104(a)(1) . . . require[s] a single document—either a ‘Notice of Entry’ so entitled or a file-stamped copy of the judgment or appealable order—that is sufficient in itself to satisfy all of the rule’s conditions . . . . [T]he rule does not require litigants to glean the required information from multiple documents or to guess, at their peril, whether such documents in combination trigger the duty to file a notice of appeal. ‘Neither parties nor appellate courts should be required to speculate about jurisdictional time limits.’” (Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894, 905, italics added.) As set forth above, the judgment was comprised of two documents: the tentative decision and the modification. The clerk only served one of those documents, the modification, on August 7. The modification is not a complete recitation of the judgment. Rather, it states the tentative decision “remains the judgment of the . . . case,” then sets forth several revisions to it. The entire judgment cannot be gleaned from the modification alone. Both the modification and tentative decision are needed to comprehend the court’s judgment. Since the modification is not the complete judgment, the clerk’s service of it on August 7 did not start the timeline for Nima’s fee motion. 14 III DISPOSITION The postjudgment order is affirmed. Our opinion has no bearing on the authority of the trial court to award Nima additional attorney fees in this matter. Nima is 3 entitled to his costs on this appeal. MOORE, ACTING P. J. WE CONCUR: SANCHEZ, J. MOTOIKE, J. 3 Both parties filed requests for judicial notice of various documents. These documents are either immaterial to our analysis or are already in the record. Thus, we deny both parties’ requests for judicial notice. 15	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483645/	NOTICE 2022 IL App (5th) 220412-U NOTICE Decision filed 11/14/22. The text of this decision may be NOS. 5-22-0412, 5-22-0413 cons. This order was filed under changed or corrected prior to Supreme Court Rule 23 and is the filing of a Petition for not precedent except in the Rehearing or the disposition of IN THE limited circumstances allowed the same. under Rule 23(e)(1). APPELLATE COURT OF ILLINOIS FIFTH DISTRICT ______________________________________________________________________________ In re FORREST F., a Minor ) Appeal from the ) Circuit Court of (The People of the State of Illinois, ) Champaign County. ) Petitioner-Appellee, ) ) v. ) No. 18-JA-11 ) Sandra F. and Frank F., ) Honorable ) Brett N. Olmstead, Respondents-Appellants). ) Judge, presiding. ______________________________________________________________________________ PRESIDING JUSTICE BOIE delivered the judgment of the court. Justices Cates and Barberis concurred in the judgment. ORDER ¶1 Held: We affirm the circuit court’s judgment terminating the respondents’ parental rights where the circuit court’s findings that the respondents were unfit persons, and that termination of their parental rights was in the minor child’s best interests, were not contrary to the manifest weight of the evidence. ¶2 The respondents, Sandra F. and Frank F., are the parents of Forrest F. (minor child), born on December 28, 2016. On June 9, 2022, the circuit court entered a judgment terminating the respondents’ parental rights based on its findings that the respondents were unfit persons, and that termination of the respondents’ parental rights was in the best interest of the minor child. For the reasons that follow, we affirm the judgment of the circuit court. 1 ¶3 I. BACKGROUND ¶4 On November 6, 2017, the respondents appeared in the circuit court in an attempt to obtain emergency orders of protection against each other. Each respondent alleged that the other had abused the minor child in some manner, and Frank further alleged that Sandra was smoking “weed” and drinking alcohol daily. The circuit court denied both requests and instead, directed the reporter to make a hotline report to the Illinois Department of Children and Family Services (DCFS), based upon the allegations contained in the requests for orders of protection. ¶5 The next day, DCFS attempted to locate the respondents and the minor child but was unable to do so. DCFS was finally able to meet with Frank on November 20, 2017, and Frank informed DCFS that Sandra and the minor child had left the home on November 3, 2017. DCFS was unable to locate Sandra and the minor child until January 8, 2018. After locating Sandra, DFCS met with Sandra, Frank, and Sandra’s mother. At that meeting, an out-of-home safety plan was enacted, and the minor child was placed in the care of Sandra’s mother, with the respondents having daily, supervised visitation. The out-of-home safety plan also required that Sandra complete a drug and alcohol screening. ¶6 On January 10, 2018, Sandra completed the drug and alcohol screening, which was negative for alcohol, but positive for tetrahydrocannabinol (THC), an active ingredient in marijuana. As such, DCFS took protective custody of the minor child on January 24, 2018. ¶7 On January 25, 2018, the State filed a petition for adjudication of neglect pursuant to the Juvenile Court Act of 1987 (Act) (705 ILCS 405/1-1 et seq. (West 2018)). The State’s petition for adjudication of neglect alleged that the minor child was neglected as defined in section 2-3(1)(b) of the Act because the minor child was in an environment that was injurious to his welfare due to (1) the respondents failing to correct the conditions which resulted in a prior adjudication of 2 parental unfitness to exercise guardianship and custody of the minor child’s sibling, Angelia F.; (2) the environment exposed the minor child to domestic violence; and (3) the environment exposed the minor child to substance abuse. Id. § 2-3(1)(b). ¶8 The circuit court conducted a shelter care hearing on January 25 and 26, 2018. At the hearing, without objection, the circuit court took judicial notice of the findings and orders entered in In re Angelia F., No. 14-JA-21 (Cir. Ct. Champaign County), 1 terminating the respondents’ parental rights regarding Angelia F., the minor child’s older sibling. The circuit court found that there was probable cause to believe that the minor child was neglected based on the respondents’ failure to seek and complete remedial services that led to the termination of their parental rights in In re Angelia F. Id. ¶9 The circuit court also found that DCFS had made reasonable efforts to prevent or eliminate the removal of the minor child from the home by the implementation of the safety plan. The circuit court did not find, however, that there was an immediate and urgent necessity regarding temporary custody. As such, the circuit court denied the State’s request that the minor child be placed in temporary custody and directed that the minor child be released from protective custody. Finally, the circuit court appointed a special advocate (CASA) as guardian ad litem on behalf of the minor child and set the matter for an adjudicatory hearing. ¶ 10 The adjudication hearing was conducted by the circuit court on March 20, 2018. The circuit court found that the State had proven, by a preponderance of the evidence, that the minor child was neglected as defined by section 2-3(1)(b) of the Act (705 ILCS 405/2-3(1)(b) (West 2018)), 1 The findings and orders entered in In re Angelia F., No. 14-JA-21 (Cir. Ct. Champaign County), are not contained within the record on appeal. According to the respondents’ brief, in that matter, the respondents were found to be unfit persons regarding their minor child, A.F., “for refusal to address mental health issues, for domestic violence, for failure to comply with service requirements, and for failure to complete services in Kankakee County cases involving three still-older siblings, (J.F., L.F., and B.F.).” 3 based on the minor child being in an environment that was injurious to his welfare as alleged in the petition for adjudication of neglect. The circuit court entered a written adjudicatory order the same day and scheduled the matter for a dispositional hearing. ¶ 11 On April 12, 2018, the Children’s Home & Aid (CHA), acting on behalf of DCFS, filed a report with the circuit court. The CHA report stated that the service plan for Sandra required that she participate in parenting classes; obtain a mental health assessment and complete any recommended treatment; participate in random drug screens; complete a substance abuse assessment and comply with any recommendations of the substance abuse assessment; and participate in domestic violence services. ¶ 12 The CHA report stated that Sandra had been arrested on January 2, 2018, for driving on a suspended/revoked license and driving under the influence of alcohol (DUI). The CHA report further indicated that Sandra had failed to appear for her drug screening on March 2, 2018, but had completed drug screenings on March 6, 15, 23, and 28, 2018. The screenings conducted on March 6 and 15 were adulterated and as such, were counted as positive drug screenings. The results of Sandra’s drug screenings conducted on March 23 and 28, 2018, were negative. ¶ 13 With regard to Frank, the CHA report stated that his service plan required that he participate in parenting classes; obtain a mental health assessment and complete any recommended treatment; participate in random drug screenings; complete a substance abuse assessment and comply with any recommendations of the substance abuse assessment; and participate in domestic violence services. According to the CHA report, Frank had failed to appear for his drug screening on March 2, 2018, but had completed drug screenings on March 6, 15, 23, and 28, 2018, all of which were negative for any substances. The CHA report further indicated that Frank had completed his initial intake regarding his mental health assessment but had not started or completed any counseling. 4 The CHA report stated that Frank had been “very angry and upset” when he had been informed of the services that he would be required to complete and that he had often been uncooperative and argumentative with the caseworker. ¶ 14 On April 18, 2018, the circuit court conducted a dispositional hearing and entered a written dispositional order on April 19, 2018. The circuit court found that the respondents were unfit, for reasons other than financial circumstances alone, to care for, protect, train, or discipline the minor child and as such, the health, safety, and best interest of the minor child would be jeopardized if the minor child remained in their custody. The circuit court noted that there had been longstanding and continuing issues of domestic violence between the respondents and that neither of the respondents had enrolled in domestic violence education or treatment. As such, the circuit court found that the minor child’s current home was unsafe, directed that the minor child be made a ward of the court, and placed the custody and guardianship of the minor with the guardianship administrator of DCFS. Frank appealed the circuit court’s dispositional order, and it was affirmed on appeal. In re F.F., 2018 IL App (4th) 180309-U, ¶ 45. ¶ 15 Between July 2018, and April 2021, the circuit court reviewed this matter 10 times and entered a permanency order2 pursuant to section 2-28 of the Act after each review. 705 ILCS 405/2-28 (West 2018). On July 6, 2021, the State filed a motion seeking findings of unfitness and termination of the respondents’ parental rights regarding the minor child. The State’s motion alleged that the respondents were unfit persons as defined in section 1(D)(m)(ii) of the Adoption 2 At the circuit court’s hearing on the unfitness portion of the State’s motion seeking a finding of unfitness and termination of parental rights on April 11, 2021, the circuit court stated in open court that “any findings regarding progress or efforts in a permanency order in this file—while I have taken judicial notice of the orders—I am ignoring that completely. Those findings as the case moves along through permanency purposes are something different.” As such, this court will not summarize the circuit court’s findings contained in the permanency orders or any reports filed for the circuit court’s consideration at the permanency reviews. 5 Act, due to their failure to make reasonable progress towards the return of the minor child to the home during the period of October 26, 2020, through July 26, 2021. 750 ILCS 50/1(D)(m)(ii) (West 2020). The State’s motion also alleged that it would be in the best interest of the minor child that the respondents’ parental rights be terminated, and that guardianship of the minor child be permanently awarded to DCFS, with the authority to consent to his adoption. ¶ 16 The circuit court conducted a four-day hearing on the fitness portion of the State’s motion on February 14, March 23, March 28, and April 11, 2022. The first witness to testify at the hearing was Dr. Judy Osgood. Prior to Dr. Osgood’s testimony, the parties stipulated that Dr. Osgood was an expert in the field of psychology and was qualified to give opinions in that area. ¶ 17 Dr. Osgood testified that she had been a licensed clinical psychologist since 1987, and that in 2021, Frank had been referred to her for a parenting capacity assessment. Dr. Osgood stated that she had reviewed all of the reports and records from DCFS and One Hope United, acting on behalf of DCFS, including, but not limited to, the visitation reports, service plans, the integrated assessment, the substance abuse evaluation, and the domestic violence treatment report. Based upon her review, Dr. Osgood stated that Frank had an extensive mental health history since adolescence, including psychiatric hospitalizations, and had been diagnosed with bipolar disorder and histrionic personality disorder with narcissistic and schizotypal features. Dr. Osgood testified that the documentation she had reviewed also reflected that Frank had an extensive history of domestic violence, including an incident in 2020, where Sandra had stabbed Frank. ¶ 18 Dr. Osgood testified that she had met with Frank on one occasion on March 31, 2021, for approximately three hours. Dr. Osgood stated that she first met with Frank individually, and then the minor child was brought into the meeting, and she had observed Frank with the minor child. During her meeting with Frank individually, Dr. Osgood stated that Frank had informed her about 6 the circumstances that had resulted in the minor child being into care. When questioned about the domestic violence, Dr. Osgood testified that Frank acknowledged “pushing and shoving” between himself and Sandra but denied anything physical that led to any kind of injury. According to Dr. Osgood’s testimony, Frank acknowledged that he and Sandra had been in an argument and that she had stabbed him; however, Frank “really minimized the domestic violence issues.” Dr. Osgood stated that, according to the documentation, Frank had completed domestic violence services, but that it was her impression that the treatment had not been successful, given the stabbing incident. ¶ 19 Dr. Osgood further stated that Frank acknowledged that DCFS and the circuit court were concerned about Frank’s and Sandra’s mental health and substance abuse histories. Concerning his mental health, Dr. Osgood testified that Frank admitted to an extensive history of depression and treatment but denied taking any current medications. Dr. Osgood testified that it was her opinion that Frank’s behavior matched the diagnosis of bipolar disorder “as evident in terms of a history of substance abuse, the domestic violence, the history of arrests, [and] reports of sexualized behaviors that had continued even during visits with his [minor child].” Dr. Osgood also opined that, based upon her review of his history and her interview with Frank, the diagnosis of histrionic personality disorder with narcissistic and schizotypal features was also an appropriate diagnosis for Frank. Dr. Osgood testified that Frank had not reported any current psychiatric treatment but had reported that he was engaged in counseling, although he had not reported any meaningful or specific treatment goals. ¶ 20 Dr. Osgood went on to testify that Frank had disclosed a long history of illegal drug use, including free-based cocaine, and problems with alcohol abuse. Dr. Osgood stated that she did not believe that Frank had been under the influence of any substance at the time of the meeting. Dr. Osgood stated that Frank had minimized the impact of domestic violence and substance abuse on 7 the minor children and that Frank had not taken any real responsibility for the significance of these problems. ¶ 21 At the time of the meeting, Dr. Osgood stated that Frank had reported that he was residing with Sandra, due to his home being lost in a fire, but that they were no longer in a relationship because “the courts don’t like it.” Dr. Osgood also stated that Frank had reported that it was his belief that he could provide care for the minor child and had presented himself as not having any problems serious enough to interfere with his ability to parent the minor child. Dr. Osgood testified, regarding her observation of Frank with the minor child, that Frank had been able to interact with the minor child age appropriately. Dr. Osgood stated, however, that minor child had not demonstrated any real separation anxiety and that the minor child had been fine with leaving Frank at the end of the visit. ¶ 22 Dr. Osgood testified that Frank had been participating in his services with DCFS; however, she had several specific concerns regarding Frank’s parenting of the minor child based on her parenting capacity assessment. Specifically, Dr. Osgood stated that she was concerned with Frank’s chronic mental illness and substance abuse history, and the lack of treatment. Dr. Osgood also testified that she was very concerned with the ongoing domestic violence in his relationship with Sandra and that, in spite of being stabbed by Sandra in 2020, Frank had moved back into a residence with Sandra. Dr. Osgood further testified that she was concerned with the reports of arguments between Frank and Sandra concerning their relationship during their visitations with the minor child. ¶ 23 Finally, Dr. Osgood testified that it was her expert opinion that, at the time she authored her report, she believed that Frank was not able to safely have unsupervised contact with the minor child. Dr. Osgood stated that she based this opinion on her previous comments regarding Frank, 8 and upon the minor child exhibiting symptoms of trauma after visitations. According to Dr. Osgood’s testimony, it would take long-term progress in counseling, an absence of domestic violence, stability in his functioning, and the ability to empathize with the minor child to demonstrate that Frank could safely parent the minor child unsupervised. Dr. Osgood testified that she had not had any further contact with Frank or the minor child, nor had she reviewed any additional reports or documents, since the meeting on March 31, 2021. ¶ 24 Next, the State called Anne Kuna to testify. Kuna testified that she was employed by the Community Resource and Counseling Center (CRCC) as an adult and family therapist and worked with individuals on substance abuse and mental health issues. Kuna stated that she had begun conducting a substance abuse assessment with Sandra in June or July 2021, but that it had not completed until August 2021, because Sandra wanted to ensure that CRCC was accredited per her probation officer. Kuna testified that Sandra had been required to complete 75 hours of treatment due to her DUI charge. ¶ 25 Based upon the assessment, Kuna stated that Sandra had been diagnosed with alcohol abuse disorder. Kuna stated that the State had required Sandra to complete the highest amount of treatment hours because of her DUI, so Kuna had recommended substance abuse services that she believed would benefit Sandra. Kuna testified that Sandra began services in August 2021 but had never completed the services. ¶ 26 The next witness called by the State was Karen Kietzmann. Kietzmann testified that she was employed by One Hope United as a family support specialist. Kietzmann stated that from October 26, 2020, through July 26, 2021, she had supervised the visitation between the respondents and the minor child once a week and that the visits were held at the respondents’ residence. Kietzmann further stated that she would pick up the minor child from his foster home and drive 9 him to see his parents for a two-hour visit. During these visits, Kietzmann testified that it was “quite often” that she could tell that Sandra was upset with Frank or vice versa. Kietzmann stated that, frequently, when one of the respondents had left the room, the other respondent quietly made comments, or snide remarks, about the other in front of the minor child. ¶ 27 Kietzmann testified that the respondents had always been prepared for the visits and had age-appropriate toys, but that the meals provided to the minor child had been “kind of slim,” mainly dry cereal. Kietzmann also stated that the area of the home where the visits occurred had been “neatly cleaned” when she was there and also stated that the minor child’s maternal grandma had been present at about 98% of the visits. Between October 26, 2020, through July 26, 2021, Kietzmann testified that the respondents had most of their visits together and that it was her belief that the respondents were residing together a lot during that period. Kietzmann testified that when Frank had a visit with the minor child alone, Frank would take the minor child to a restaurant for breakfast. Kietzmann stated that Frank had done well at these visits. Kietzmann stated that Sandra also had done well when visiting with the minor child alone. ¶ 28 According to Kietzmann’s testimony, the respondents had not made any progress regarding their parenting skills. By that, Kietzmann stated she would have expected the respondents to be working together and agreeing on how to raise the minor child, such as the different activities the minor child would have been allowed, or not allowed, to do. Kietzmann testified, however, that for a couple of months, the minor child did not want to leave the respondents when the visitations had ended. Kietzmann further testified that at no point during her supervision of the visits, including the period ending in July 2021, had she ever reached a time where she felt it would have been appropriate for the respondents to have unsupervised visits because there had not been a 10 stable situation within the home. At the conclusion of Kietzmann’s testimony, the circuit court continued the hearing until March 23, 2022. ¶ 29 On March 23, 2022, the hearing was resumed, and the State called Joseph Mooney to testify. Mooney indicated that he was a mental health therapist and had previously been employed with CRCC. While employed with CRCC, Mooney stated that he had been Sandra’s therapist for a brief period of time, less than six months from approximately January to June 2021. Mooney stated that he had met with Sandra twice a month by telephone and that he had never met with Sandra in person because Sandra lacked transportation. According to Mooney’s testimony, Sandra had attended a total of six out of nine possible meetings. ¶ 30 Mooney stated that he could not recall Sandra’s treatment goals, but per his report, Sandra had made some progress as she had been able to find employment and had reported that she had abstained from substance use. Mooney testified that Sandra had not completed her substance abuse assessment at that time. Mooney stated that one of things he had worked on with Sandra had been her relationship with Frank and that Sandra had struggled with the thought of requiring Frank to move out of the home. Mooney concluded by stating that he had not successfully discharged Sandra from her individual counseling since Sandra still needed individual therapy to work through past trauma, as well as issues with depression and anxiety. ¶ 31 The next witness called by the State was Bettina Garner Earl. Garner Earl testified that she had previously been employed by CRCC as a mental health therapist. During that time, Garner Earl stated that she had provided services to Sandra and that she had treated Sandra prior to Mooney. Garner Earl testified that it had been Sandra’s request to stop counseling with Garner Earl and transfer to another counselor. Garner Earl stated that she had met with Sandra every other 11 week, but that Sandra’s attendance had been sporadic. Garner Earl testified that she had never successfully discharged Sandra from counseling. ¶ 32 Stephanie Beard then testified for the State. Beard testified that she was a licensed clinical counselor, and that she had treated Frank from December 2019 until either July or August 2021. In the beginning, Beard stated that she had met with Frank weekly, then after a while, biweekly, and then sometimes monthly. Beard stated that it had been difficult scheduling meetings with Frank’s work schedule, but that he had always been communicative about scheduling appointments. Beard stated that she had met with Frank by telephone, and at times, in person. ¶ 33 Beard testified that Frank’s treatment goals had been to understand why there was a foster care case, and his accountability and responsibility for whatever role he had played in the case being opened. Beard also stated that Frank needed to understand the dynamics between himself and Sandra, and the conflict that they had between the two of them, and that Frank needed to develop empathy and understanding of what the minor child was going through in terms of separation attachment and detachment between visits. ¶ 34 Concerning the goal of understanding why there was a foster care case, Beard stated that Frank had made progress, but that the goal had not been reached because, instead of looking internally, Frank had a pattern of looking externally. By “looking externally,” Beard stated that Frank had difficulty understanding the totality of his role in the minor child being placed in foster care. Beard further testified that, in July 2021, she did not believe that Frank would refrain from placing the minor child in the same environment that had resulted in the minor child being taken into care. ¶ 35 Concerning Frank’s relationship with Sandra, Beard testified that Frank had made progress with that goal, but that he had not met that goal as of July 2021. Beard stated that there still had 12 been a level of Frank not understanding what happens in a relationship, and she could not guarantee that with other stressors, the volatility would not occur again. Beard stated that she did not believe that Frank had resided with Sandra during the entire period from December 2019 through August 2021, but that it was her understanding that he had been residing with Sandra in July 2021. Beard testified that Frank had been displaced from his home due to a fire and that he had stated that he did not have anywhere else to reside. Beard testified that she believed Frank’s return to residing with Sandra had been a backward step in his treatment. ¶ 36 Finally, concerning Frank’s empathy for the minor child, Beard stated that she had worked with Frank on this goal and that he had made progress, but that Frank had not reached the goal by July 2021. Beard testified that Frank had still focused on what he believed was going wrong in the case instead of some “parenting attunement.” Beard stated that Frank’s attendance had been consistent and that he had been cooperative during their sessions; however, Frank had not been discharged from counseling. ¶ 37 The State then moved for a continuance, without objection, and the circuit court continued the hearing until March 28, 2022. On March 28, 2022, the State called its last witness, Bridgette Rasmussen, who testified that she had previously been employed by One Hope United as a foster care case manager from November 2020 through July 2021. During that entire period, Rasmussen stated that she had worked with the respondents and the minor child. ¶ 38 Rasmussen stated that when she first met with the respondents, they were residing together and that she had been concerned, given the ongoing domestic violence. Rasmussen stated that the respondents had acted as “separate entities” and that she had not believed this was a conducive environment in which to raise a child. During this time, Rasmussen stated that Sandra had reported that she and Frank were residing together but were not in a romantic relationship. 13 ¶ 39 Rasmussen testified that the services Sandra had been required to complete were domestic violence services; a substance abuse evaluation and, if recommended, substance abuse treatment; drug screenings; mental health or individual counseling; parenting services; and visitation. Concerning Sandra’s domestic violence services, Rasmussen stated that Sandra had completed those services in August 2019; however, there had been an incident in January 2020 where Sandra stabbed Frank. Because of the incident, Rasmussen testified that Sandra had been required to address domestic violence with her individual counselor at CRCC. With regard to her individual counseling, Rasmussen stated that Sandra had been attending, but that she had not been successfully discharged by July 2021. ¶ 40 Rasmussen testified that Sandra had completed her parenting classes by July 2021. Rasmussen further testified that Sandra had not been consistent in her drug screenings and had missed all four drug screenings scheduled from June 10 through July 14, 2021. Rasmussen also stated that Sandra had testified positive for marijuana and opiates in the fall of 2020. According to Rasmussen’s testimony, she had spoken to Sandra concerning the positive results and Sandra had reported that she had a prescription that she gave to the caseworker at the time. Rasmussen stated, however, that she had not been able to locate a prescription within the file. Rasmussen went on to testify that, at a later positive screening, Sandra had provided a valid prescription. ¶ 41 Rasmussen also testified that in December 2020, Sandra had not completed her substance abuse assessment and that Sandra had reported that she had not been able to afford it. As such, Rasmussen stated that she had made a referral for Sandra for substance abuse treatment and services at CRCC. Rasmussen testified that Sandra had completed 6 or 7 hours of her court ordered 75 hours of substance abuse treatment and had completed half of her intake assessment with CRCC, but that Sandra had not completed a single hour of substance abuse treatment from 14 November 2020 through July 2021. Rasmussen further testified that she had provided Sandra with numerous narcotic and alcohol anonymous meetings in the area, but that Sandra never attended a meeting. ¶ 42 Rasmussen went on to testify that Sandra had been consistent in her visitation with the minor child, but that Rasmussen had never considered unsupervised visitation because Sandra had not been on track to complete her services. Rasmussen also testified that she had been concerned regarding the interactions between Sandra and the minor child. Rasmussen stated that one such concern had been that the minor child preferred to be addressed by his middle name, and Sandra refused to do so. Rasmussen testified that as of May 2021, the minor child had been in foster care for approximately three years. Rasmussen also stated that Sandra’s visitations with the minor child had been suspended in either May or June 2021 for her failure to complete her drug screenings. ¶ 43 Regarding Frank, Rasmussen testified that the services Frank had been required to complete were parenting classes; a substance abuse evaluation and, if recommended, treatment; drug screenings; mental health or individual counseling; domestic violence services; and visitation with the minor child. Rasmussen stated that Frank had completed his substance abuse assessment in May 2018 and was not recommended for any follow up treatment. Rasmussen stated that Frank had been consistent in his drug screenings and that all of his screenings had been negative for any substance, including alcohol. ¶ 44 Rasmussen also testified that Frank had completed his parenting classes and had been referred for a parenting capacity assessment with Dr. Osgood. Rasmussen testified that Frank had been referred for the parenting capacity assessment because she still had concerns about Frank’s ability to connect with the minor child. Rasmussen further testified that Frank had completed his domestic violence services, but that she still had been concerned because there remained a volatile 15 relationship between him and Sandra, regardless of whether the relationship was romantic or not. Rasmussen testified that she had been receiving reports of verbal abuse from the respondents, individually, against the other respondent. Rasmussen stated, for example, that Sandra had reported that, when Frank was not residing with her, there were sex acts or drug use going on in the residence where Frank was staying and that the statement was made in front of the minor child. Rasmussen testified that there had also been inappropriate conversations in the presence of the minor child during some of the visits. During one visit, Rasmussen stated that Frank allegedly named towns in the United States that had sexually relevant names, such as Blue Balls, Pennsylvania, in the presence of the minor child. ¶ 45 With regard to Frank’s counseling services, Rasmussen stated that Frank had been engaged in counseling, but that he had not been successfully discharged as of July 2021. Rasmussen also stated that Frank had been consistent in his visitations with the minor child; however, there had been snide comments between Frank and Sandra during the visits, and it had been apparent that they did not like sharing their visitation hours. Rasmussen stated that Frank had housing instability starting in April 2021, and that he had been referred to a housing counselor, but by July 2021, Frank had not obtained stable housing and was residing with Sandra. Finally, Rasmussen testified that Frank had been cooperative with her and that he had not refused to participate in any of the services that had been recommended. ¶ 46 Frank was then called as witness on his own behalf. Frank testified that he was the father of the minor child, and that he had cooperated with all of his required services. Frank stated that he had completed his parenting classes; cooperated in a parenting capacity assessment; completed a substance abuse assessment; completed all required drug screenings; and completed domestic 16 violence counseling. Frank further testified that he had cooperated with individual counseling, but when the State’s motion for termination was filed, individual counseling was terminated by DCFS. ¶ 47 Frank went on to testify that Dr. Osgood had incorrectly testified that he had a history of DUIs, because he had never been convicted of a DUI. Frank further stated that the depression diagnosis that Dr. Osgood had referenced was a diagnosis he had received as a teenager, and he was now 57 years old and currently had no issue with depression. Frank testified that he was not on any medication for mental health issues, nor had any medical professional recommended medication for any mental health issue except when he was a teenager. ¶ 48 Frank also testified that his visitations with his minor child went well. Concerning the inappropriate comments about the towns’ sexual names, Frank stated that it had been something that came up on the television and it had been brought up by someone else, so it was not a conversation that he had started. Frank stated that he remained employed, but that he was currently on medical leave due to surgeries on both of his hips. ¶ 49 Next, Sandra testified on her own behalf. Sandra stated that she was the mother of the minor child and that she had completed her domestic violence services in 2019. Sandra testified that she had begun individual therapy in 2018, and had switched counselors to Mooney in 2020, because she had not believed that she had been receiving the help she needed. Sandra stated that CRCC and Mooney had set up the meeting telephonically, and that she had no difficulties with transportation. Sandra stated that her counseling goals with Mooney had been to maintain her residence, obtain employment, and provide the care that the minor child needed. Sandra testified that she had maintained her residence and had been employed “for a little while.” ¶ 50 Sandra further testified that she had participated in her required drug screenings and acknowledged that she had positive drug screenings for opiates in October 2020 and March or 17 April 2021. Sandra stated, however, that she had been prescribed Tylenol 3 after two dental procedures and had provided the prescriptions to her caseworker. In the beginning of 2020, Sandra stated that she had started her substance abuse treatment, but that the program had been stopped due to the pandemic. Then in March 2021, Sandra stated that she had completed half of her substance abuse assessment at CRCC, but that she could not complete the assessment until she had provided CRCC’s accreditation to her probation officer. Sandra also testified that the individual conducting the assessment had been absent for six weeks for medical reasons, and that Sandra had finally been able to complete her assessment and begin treatment in August 2021. ¶ 51 Sandra next testified that she had completed her parenting classes and had attended her scheduled visitations with the minor child. Sandra stated that she was no longer in a relationship with Frank, but that from October 26, 2020, through July 26, 2021, Frank had resided with her for several months because his residence had been lost due to arson. ¶ 52 At the conclusion of Sandra’s testimony, the circuit court continued the hearing until April 11, 2021. On that date, the circuit court heard the parties’ closing arguments and then presented its findings 3 in open court. Based upon those findings, the circuit court held that the State had proven, by clear and convincing evidence, that the respondents were unfit persons as defined in section 1(D)(m)(ii) of the Adoption Act (750 ILCS 50/1(D)(m)(ii) (West 2020)), due to their failure to make reasonable progress towards the return of the minor child to the home during the period of October 26, 2020, through July 26, 2021. The circuit court scheduled the matter for a best interest 3 The circuit court gave a lengthy and detailed explanation of its findings regarding the evidence presented at the hearing, along with the relevant standards by which a circuit court is required to make its determination. In the interest of brevity, we will summarize the circuit court’s findings relevant to this appeal in our analysis. 18 hearing and directed DCFS to prepare a report concerning the best interest of the minor child to be provided to the circuit court and all parties at least five days prior to the next hearing. ¶ 53 On May 4, 2022, CASA, as guardian ad litem for the minor child, filed a best interest report with the circuit court. The CASA report stated that Frank and Sandra had a long history of domestic violence and had petitioned, and received, various orders of protection against each other during the time when the minor child had been present and exposed to such violence. The CASA report also stated that Sandra had a history of substance abuse. ¶ 54 The CASA report further stated that the minor child was thriving and had become an integral part of the foster family. The minor child was happy, and did well in school, but had been recently diagnosed on the autism spectrum. The CASA report indicated that the minor child’s foster family had purchased private insurance costing approximately $1000 per month so that the minor child could receive help through ABA therapy 4 with the effects of his autism. ¶ 55 The CASA report went on to state that the minor child enjoyed physical safety, as well as emotional security, in his foster setting and had received all necessary medical treatment. The CASA report also stated that the minor child had been with his foster family since April 26, 2018, when he was 16 months old, and that he was currently 5 years old. The CASA report indicated that the minor child had bonded with his foster family and that, although the minor child had visited with the respondents monthly, he had not shown any evidence of missing them. The CASA report went on to state that the minor child, “having been pulled and pushed from one domestic situation to another since he was born,” needed and deserved the opportunity to continue to live with a sense of “really belonging in a home with loving parents and siblings.” As such, the CASA report 4 Applied behavior analysis (ABA) is the practice used most extensively in special education and the treatment of autism spectrum disorder that applies the psychological principles of learning theory in a systematic manner to modify behavior. www.appliedbehavioranalysisedu.org (last visited Oct. 21, 2022). 19 recommended to the circuit court that the respondents’ parental rights be terminated and that the minor child be allowed to move toward permanency with his foster parents. ¶ 56 DCFS filed its best interest report with the circuit court on May 13, 2022. The DCFS report addressed each factor, in the context of the minor child’s age and developmental needs, that the circuit court was statutorily required to consider in its determination of the best interest of the minor child. 705 ILCS 405/1-3(4.05) (West 2020). The DCFS report reflected much of the same information that had been provided in the CASA report, in that the minor child had been in a loving and stable environment; that the physical safety and welfare of the minor child were met, including food, shelter, health, and clothing; that the minor child had been in his current placement for much of his life and had a strong bond with his foster family; that the minor child had a sense of security; and that separating the minor child from his foster family would cause irreversible trauma as his foster placement had been the only stable home he had known. As such, the DCFS best interest report stated that the respondents were unable to parent the minor child and that adoption by his foster parents would be in the best interest of the minor child. ¶ 57 On June 9, 2022, the circuit court conducted a best interest hearing. At the beginning of the hearing, the circuit court inquired whether any party had additions or corrections to the CASA or DCFS best interest reports. The parties acknowledged that they had reviewed the reports and had no additions or corrections to the reports. The only witness called at the best interest hearing was Sandra. Sandra stated that she had cared for the minor child for a year and a half prior to the minor child being taken into care and that she believed that it was not in the minor child’s best interest for her parental rights to be terminated. According to Sandra’s testimony, the minor child had not wanted to return to his foster home after visiting with her. Sandra also testified that the minor child was familiar with his extended, biological family, including his other siblings. Sandra 20 stated that she was able to address all of the minor child’s needs and that the minor child had indicated to her that he would prefer to reside with her rather than his foster home. ¶ 58 After Sandra’s testimony and further arguments, the circuit court stated in open court that it had considered the reports filed and the evidence presented at the best interest hearing. The circuit court orally addressed each statutory factor, noting that it did so from the minor child’s perspective and the perspective of the minor child’s best interest. The circuit court stated that it found, by a preponderance of the evidence, and by clear and convincing evidence, that it was in the best interest of the minor child and the public, that all residual, natural parental rights, and responsibilities of the respondents be terminated. As such, the circuit court terminated the respondents’ parental rights and responsibilities regarding the minor child and entered a written order the same day reflecting its oral judgment. ¶ 59 The respondents each filed a timely notice of appeal, and on August 17, 2022, Frank filed a motion to consolidate the appeals. The same day, this court granted the motion to consolidate. On appeal, the respondents argue that the circuit court’s findings that the respondents were unfit persons, and that termination of their parental rights was in the best interest of the minor child, were against the manifest weight of the evidence. ¶ 60 II. ANALYSIS ¶ 61 “A parent’s right to raise his or her biological child is a fundamental liberty interest, and the involuntary termination of such right is a drastic measure.” In re B’Yata I., 2013 IL App (2d) 130558, ¶ 28. The Act (705 ILCS 405/1-1 et seq. (West 2020)), along with the Adoption Act (750 ILCS 50/0.01 et seq. (West 2020)), governs the proceedings for the termination of parental rights. In re D.F., 201 Ill. 2d 476, 494 (2002). The Act provides a two-stage process for the involuntary termination of parental rights. 705 ILCS 405/2-29(2) (West 2020). The State must first establish, 21 by clear and convincing evidence, that the parent is an unfit person under one or more of the grounds of unfitness enumerated in section 1(D) of the Adoption Act (750 ILCS 50/1(D) (West 2020)). 705 ILCS 405/2-29(2), (4) (West 2020); In re D.T., 212 Ill. 2d 347, 352-53 (2004). If the court finds the parent unfit, the State must then show that termination of parental rights would serve the child’s best interests. 705 ILCS 405/2-29(2) (West 2020); In re B’Yata I., 2013 IL App (2d) 130558, ¶ 28. ¶ 62 A determination of parental unfitness involves factual findings and credibility assessments that the circuit court is in the best position to make, and a finding of unfitness will not be reversed unless it is against the manifest weight of the evidence. In re Tiffany M., 353 Ill. App. 3d 883, 889- 90 (2004). “A factual finding is against the manifest weight of the evidence only if the opposite conclusion is clearly evident or if the determination is arbitrary, unreasonable, and not based on the evidence.” In re G.W., 357 Ill. App. 3d 1058, 1059 (2005). In this matter, the respondents argue that the circuit court’s findings at both stages of the termination proceedings were against the manifest weight of the evidence. As such, we begin our analysis with the issue of whether the circuit court erred in its determinations that the respondents were unfit persons. ¶ 63 A. Unfitness Findings ¶ 64 The circuit court found that the State had proven, by clear and convincing evidence, that the respondents were unfit persons as defined in section 1(D)(m)(ii) of the Adoption Act (750 ILCS 50/1(D)(m)(ii) (West 2020)). Section 1(D)(m)(ii) of the Adoption Act defines a person as unfit when that person fails to make reasonable progress toward the return of the minor child to the home during any nine-month period following the adjudication of neglect or abuse. Id. The statute allows the circuit court to consider any nine-month period after the adjudication of neglected or abused, regardless of the length of time that the matter had been pending in the circuit 22 court. Id. In this matter, the relevant nine-month period stated in the State’s motion, and considered by the circuit court, was October 26, 2020, through July 26, 2021. ¶ 65 The circuit court found that neither of the respondents had made reasonable progress toward the return of the minor child to the home during the period of October 26, 2020, through July 26, 2021. Reasonable progress is an objective standard that is not concerned with a parent’s individual efforts and abilities. In re D.D., 309 Ill. App. 3d 581, 589 (2000). Instead, the courts review reasonable progress using an objective standard relating to making progress toward the goal of returning the child home. In re R.L., 352 Ill. App. 3d 985, 998 (2004). Reasonable progress requires measurable or demonstrable movement toward the goal of reunification, and reasonable progress can be found if the circuit court can conclude that it can return the minor child to the parent in the near future. In re J.H., 2014 IL App (3d) 140185, ¶ 22. Although DCFS service plans are an integral part of the statutory scheme, our supreme court has rejected the view that the sole measurement of parental progress is the parent’s compliance with service plans. In re C.N., 196 Ill. 2d 181, 214-15 (2001). As our supreme court stated in In re C.N., 196 Ill. 2d 181 (2001): “[T]he benchmark for measuring a parent’s ‘progress toward the return of the child’ under section 1(D)(m) of the Adoption Act encompasses the parent’s compliance with the service plans and the court’s directives, in light of the condition which gave rise to the removal of the child, and in light of other conditions which later become known and which would prevent the court from returning custody of the child to the parent.” Id. at 216-17. ¶ 66 Moreover, it has been repeatedly stated that “a court is duty bound to ensure that serious parental deficiencies of whatever nature have been corrected before the court permits one of its wards to be returned to that parent’s custody.” In re L.L.S., 218 Ill. App. 3d 444, 464 (1991); see also In re C.M., 305 Ill. App. 3d 154, 164 (1999); In re C.S., 294 Ill. App. 3d 780, 790 (1998). 23 ¶ 67 1. Frank F. ¶ 68 Frank argues that the circuit court erred in finding him an unfit person because, prior to the period of alleged unfitness, he had completed his parenting classes, a substance abuse assessment that indicated no need for treatment, and his domestic violence classes. Frank states that he consistently appeared for his drug screenings, which were all negative for any substance, and consistently exercised his visitations. Frank argues that he had been involved in his individual counseling until DCFS discontinued the counseling when the State filed its motion to terminate parental rights. Frank states that the testimony of Stephanie Beard demonstrated that he had made progress on his counseling goals; that the testimony of Rasmussen evidenced that he had never declined a recommended service; that the testimony of Kietzmann demonstrated that the home was neat and there had been no safety concerns; and that his own testimony evidenced his bond with the minor child and his continued employment. ¶ 69 Frank further argues that Dr. Osgood’s testimony was based, in part, on erroneous information that had likely prejudiced her. Frank states that the erroneous information included a claim that Frank had a number of DUI tickets, which was untrue, and that he had an extensive history of mental illness. Frank states that his only mental health issues had occurred when he was a teenager and, at the time of the hearing, he was 58 years old. As such, Frank argues that the State had failed to prove, by clear and convincing evidence, that Frank was an unfit person for failing to make reasonable progress toward the return of the minor child to the home during the period of October 2020 to July 2021, and that the circuit court’s finding that he was an unfit person was against the manifest weight of the evidence. ¶ 70 The circuit court stated that it had found Frank’s testimony regarding his DUI history credible, and also acknowledged that Frank’s history of depression and treatment dated back 35 or 24 40 years. The circuit court stated, however, that Dr. Osgood’s “observations and gathering of records and review goes way beyond that,” and “those two problems aren’t the core of what opinion she had and developed.” The circuit court stated that it had found Dr. Osgood’s testimony to be credible, including her mental health assessment that Frank had bipolar disorder along with histrionic personality disorder with narcissistic and schizotypal features that affected the home environment, most notably present through domestic violence. The circuit court noted that Dr. Osgood had testified that these were chronic conditions that Frank had not been properly treating and that Frank would need specific counseling goals in order to address his mental health issues. The circuit court went on to state that: “It’s that diagnosis of histrionic personality disorder with narcissistic and schizotypal features, that’s what was coming through here in the information that [Dr. Osgood] was giving. That’s what comes through, frankly, in the testimony of a lot of the witnesses. [Frank] minimized the [e]ffects of mental health issues, domestic violence, substance abuse too on [the minor child]. [Frank] just—he didn’t recognize the seriousness of the problems in a home environment which was completely consistent with that diagnosis.” ¶ 71 The circuit court also noted that Frank had acknowledged to Dr. Osgood that there had been domestic violence in this relationship with Sandra, including the fact that Sandra had stabbed Frank, yet Frank minimized the domestic violence issues in his interview and minimized the problem that domestic violence would play in the home environment for the minor child. The circuit court stated that, although Frank had testified that he and Sandra were no longer in a relationship, they had still resided together; that Frank continued to refer to Sandra as his “other half”; and that Frank had made statements that he and Sandra were not together because “the court did not like it.” 25 ¶ 72 The circuit court also made positive findings regarding Frank, including the finding that there was a bond between Frank and the minor child, and that Kietzmann had testified to good things about Frank’s interaction with the minor child. The circuit court, however, also stated that Kietzmann had testified that there had been a constant undercurrent of tension and hostility between Frank and Sandra throughout the period, and that Frank had no real concern about what that meant for the minor child. The circuit court found that Frank was participating and completing his services but stated that it was not “about checking off boxes,” but making a change to move forward so that Frank could safely parent the minor child. The circuit court further addressed Beard’s testimony regarding Frank’s specific goals and his progress toward those goals, but that Frank had not been near completing those goals since he had continued to minimize his responsibility and accountability. As such, the circuit court found that it was not reasonable, in July of 2021, that custody of the minor child could have been returned to Frank at any time in the near future and that the State had proven, by clear and convincing evidence, that Frank was an unfit person. ¶ 73 Our review of the circuit court’s findings indicates that the circuit court carefully considered the testimony of all the witnesses, including the testimony that Frank cites in support of his argument. As previously stated, the circuit court is in the best position to make factual findings and credibility assessments and this court will not substitute its judgment for that of the circuit court. In re Tiffany M., 353 Ill. App. 3d at 889-90. In this matter, we do not find that the opposite conclusion is clearly evident or that the circuit court’s findings were arbitrary, unreasonable, and not based on the evidence. ¶ 74 Although Frank’s efforts were commendable, his compliance with his service plan was not the sole measurement that the circuit court was required to consider. In re C.N., 196 Ill. 2d at 214- 26 15. Frank remained in counseling and Dr. Osgood testified that it was her expert opinion that Frank was not able to safely have unsupervised contact with the minor child. Kietzmann testified that neither of the respondents had made any progress regarding their parenting skills, and Rasmussen testified that Frank had completed his domestic violence services, but that she still had been concerned because there remained a volatile relationship between he and Sandra. ¶ 75 As such, we find that there was sufficient evidence for the circuit court to determine that, in July 2021, there were unresolved issues that would have prevented the court from returning custody of the minor child to Frank in the near future. We therefore hold that the circuit court’s finding that Frank was an unfit person, as defined in section 1(D)(m)(ii) of the Adoption Act (750 ILCS 50/1(D)(m)(ii) (West 2020)), due to his failure to make reasonable progress towards the return of the minor child to the home during the period of October 26, 2020, through July 26, 2021, was not against the manifest weight of the evidence. ¶ 76 2. Sandra F. ¶ 77 Sandra also cites to the positive testimony regarding her fitness in support of her argument that the circuit court erred in finding her an unfit person. Sandra states that she had completed her domestic violence classes in August 2019 but acknowledges that she and Frank had another incident of violence in January 2020. Sandra argues, however, that the incident occurred 10 months prior to the relevant period and that no further incidents followed. ¶ 78 Sandra states that she also completed her parenting classes and that the two drug screenings that were positive for opiates were due to her prescription for Tylenol 3. Sandra states that the pandemic and costs interfered with her attempt to complete the substance abuse assessment, but that she had completed half of the assessment during the relevant period. Sandra goes on to state that she consistently exercised her visitation. 27 ¶ 79 Our review of the record indicates that, as it did with Frank, the circuit court carefully considered the positive testimony regarding Sandra’s fitness. The circuit court found, however, the same unresolved issue of domestic violence as it did with Frank. Unlike Frank, the circuit court also found that substance abuse was a serious issue for Sandra. The circuit court noted that Sandra’s substance abuse had been one of the issues, and one of the bases, of the adjudication in March of 2018, and that Sandra was aware of the issue and the need to address it long before the pandemic. The circuit court noted that Sandra had not been consistent in her drug screenings and that during the time period from June 10 to July 14, 2021, Sandra had not participated in any of her scheduled drug screenings. The circuit court further noted that Sandra had only completed six to seven hours of substance abuse treatment as of July 2021. As such, the circuit court found that Sandra’s substance abuse issue had not been resolved, and could not be resolved in the near future, such that the minor child could be returned to Sandra’s care. ¶ 80 We do not find that the opposite conclusion is clearly evident or that the circuit court’s findings were arbitrary, unreasonable, and not based on the evidence. Therefore, we find that the circuit court’s finding that Sandra was an unfit person as defined in section 1(D)(m)(ii) of the Adoption Act (id.), due to her failure to make reasonable progress towards the return of the minor child to the home during the period of October 26, 2020, through July 26, 2021, was not against the manifest weight of the evidence. ¶ 81 B. Best Interest ¶ 82 Together, the respondents argue that the circuit court’s finding that it was in the minor child’s best interest to terminate their parental rights was against the manifest weight of the evidence. The respondents argue that, at the time of the best interest hearing, Sandra had made improvements in her therapy and was “two-thirds through her substance abuse treatment.” The 28 respondents also argue that Frank remained employed, and that Sandra had testified that the minor child did not want to return to his foster home and that it was the minor child’s preference to live with her. The respondents further argue that the minor child had a strong bond with the respondents and that the respondents no longer resided together, so the problems that existed with joint visits no longer occurred. As such, the respondents state that severing the minor child’s relationship with the respondents would inevitably and adversely affect the development of his identity. ¶ 83 In determining the best interests of the child, the circuit court must consider the following statutory factors in the context of the child’s age and developmental needs: (1) the child’s physical safety and welfare; (2) the development of the child’s identity; (3) the child’s background and ties; (4) the child’s sense of attachments, including where the child feels love, attachment, and a sense of being valued, the child’s sense of security, the child’s sense of familiarity, the continuity of affection for the child, and the least disruptive placement alternative for the child; (5) the child’s wishes and long-term goals; (6) the child’s community ties; (7) the child’s need for permanence, which includes a need for stability and continuity of relationships with parent figures, siblings, and other relatives; (8) the uniqueness of every family and child; (9) the risks related to substitute care; and (10) the preferences of the persons available to care for the child. 705 ILCS 405/1-3(4.05) (West 2020). The court is not required to make specific findings of fact concerning the best interest factors as long as there is some indication in the record that it considered the enumerated factors when making the best interests determination. In re Marriage of Stribling, 219 Ill. App. 3d 105, 107 (1991). ¶ 84 In this matter, the circuit court stated that the respondents “absolutely love their son, always have loved their son,” and found that there was a bond between the minor child and both of the respondents. The circuit court also acknowledged that the respondents had “put a lot of work into 29 trying to do what they had to do to be there for their son.” The circuit court, however, found that Sandra had not reached a place where she could dependably and consistently be relied upon to provide for the physical safety and welfare of the minor child and that Frank still struggled to understand and accept the issues regarding his mental health that impact his ability to provide a safe, appropriate, nurturing home. As such, the record reflects that the circuit court considered the bond between the respondents and the minor child, and also considered the efforts the respondents had made concerning their services. ¶ 85 The circuit court further found that the minor child had been in his foster home since he was a year and a half old and had a strong bond with his foster family. The circuit court stated that the foster home had been a stable place for the minor child and that the minor child regarded his foster parents as his parents, and his foster brother as his little brother. The circuit court found that the minor child had a sense of security in his foster home and that the minor child had “a wonderful, stable, long-term potential home and has had this same home for more than four years. That’s permanence.” ¶ 86 The respondents do not allege, nor does the record indicate, that the circuit court failed to consider the enumerated factors when making the best interests determination. The circuit court acknowledged and evaluated the evidence related to the respondents’ progress and the bond that the respondents had with the minor child and found that those considerations did not outweigh the evidence in favor of termination. After considering the reports, the evidence presented at the best interest hearing, and the statutory factors, the circuit court found, by a preponderance of the evidence and also by clear and convincing evidence, that it was in the best interest of the minor child and the public that the respondents’ parental rights and responsibilities be terminated. 30 ¶ 87 After carefully reviewing the record and in light of the best interest factors that must be considered, we do not find that the opposite conclusion is clearly evident or that the circuit court’s findings were arbitrary, unreasonable, and not based on the evidence. As such, we find that the circuit court’s determination that it was in the best interest of the minor child to terminate the respondents’ parental rights was not against the manifest weight of the evidence. ¶ 88 Therefore, we find that the circuit court’s judgment terminating the respondents’ parental rights, based on its findings that the respondents were unfit persons, and that termination of their parental rights was in the minor child’s best interests, was not contrary to the manifest weight of the evidence. ¶ 89 III. CONCLUSION ¶ 90 Based on the foregoing, we affirm the judgment of the circuit court. ¶ 91 Affirmed. 31	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483640/	NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). 2022 IL App (3d) 210263-U Order filed November 14, 2022 ____________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS THIRD DISTRICT 2022 THE PEOPLE OF THE STATE OF ) Appeal from the Circuit Court ILLINOIS, ) of the 14th Judicial Circuit, ) Henry County, Illinois. Plaintiff-Appellee, ) ) Appeal Nos. 3-21-0263 and 3-21-0264 v. ) Circuit Nos. 16-CF-308 and ) 17-CF-328 ) MICHELLE L. JONES, ) Honorable ) Gregory G. Chickris, Defendant-Appellant. ) Judge, Presiding. ____________________________________________________________________________ JUSTICE McDADE delivered the judgment of the court. Presiding Justice O’Brien and Justice Holdridge concurred in the judgment. ____________________________________________________________________________ ORDER ¶1 Held: The circuit court did not abuse its discretion by sentencing defendant to a term of imprisonment. ¶2 Defendant, Michelle L. Jones, appeals from the Henry County circuit court’s denial of her motion to reconsider sentence. Defendant argues the court abused its discretion by sentencing her to a term of imprisonment because the State failed to present any evidence in aggravation and the court failed to properly weigh the endangerment posed by defendant’s medical conditions. We affirm. ¶3 I. BACKGROUND ¶4 Defendant was charged with unlawful possession with intent to deliver a controlled substance (720 ILCS 570/401(c)(11) (West 2016)) and unlawful possession of a controlled substance (id. § 402(c)) in case No. 16-CF-308. Defendant entered a negotiated plea of guilty to unlawful possession with intent to deliver a controlled substance in exchange for the State’s dismissal of the remaining charge. Pursuant to the plea, defendant was sentenced to 48 months of probation. The terms of the probation order prohibited her from possessing or using any controlled substances. ¶5 While on probation, defendant was charged with unlawful possession of methamphetamine with intent to deliver (720 ILCS 646/55(a)(1) (West 2016)), possession of methamphetamine (id. § 60(a)), and possession of drug paraphernalia (720 ILCS 600/3.5(a) (West 2016)) in case No. 17-CF-328. Additionally, the State filed a petition to revoke defendant’s probation in case No. 16-CF-308 which referenced the charges in case No. 17-CF- 328. In case No. 17-CF-328, defendant pled guilty to unlawful possession of methamphetamine with intent to deliver, and the State dismissed the remaining charges. In case No. 16-CF-308, defendant admitted the unlawful possession with intent to deliver allegation in the petition to revoke her probation, and the court granted the State’s motion. Pursuant to the plea, defendant was sentenced to 36 months of probation and 180 days in jail in case No. 17-CF-328. Defendant was prohibited from possessing or using controlled substances while on probation. ¶6 Thereafter, in both cases, the State filed a petition to revoke probation alleging that defendant tested positive for marijuana and methamphetamine. The State filed a supplemental 2 petition to revoke probation alleging defendant admitted to using methamphetamine. Defendant entered a blind admission of guilt to the allegations that she tested positive for controlled substances. The court accepted the admission. The court set the case for sentencing and ordered a presentence investigation report (PSI). ¶7 The PSI indicated defendant had prior drug offenses including unlawful possession of cannabis and unlawful possession of a controlled substance. Defendant reported that she was legally blind and had other health conditions. Defendant also had an extensive history of substance abuse. ¶8 The case was continued numerous times. During a status hearing, almost one year later, the court ordered an updated PSI. The updated PSI included additional information regarding defendant’s health. ¶9 At the sentencing hearing, the State did not offer any formal evidence in aggravation. In mitigation, defense counsel presented defendant’s unsworn statement. Defendant stated her health had diminished in recent years. She was “past legally blind” due to her underlying illnesses of rheumatoid arthritis and sarcoidosis. Defendant regularly saw several specialists for her conditions. Defendant accepted responsibility for her relapses and asked the court for leniency. Defendant requested the court either reinstate her probation or discharge her probation due to her health. ¶ 10 The State argued for a sentence of four years’ imprisonment on each case. Defense counsel argued for the court to unsuccessfully discharge defendant from probation based on defendant’s health. Alternatively, defense counsel argued for another term of probation. The court responded: 3 “The Court has considered the factual basis for the offenses, the evidence presented at trial, the [PSI], the history, character, and attitude of the defendant—and I would say her attitude today is very good—the evidence and arguments presented in this hearing, the unsworn statement of the defendant, the statutory factors in mitigation and aggravation, the financial cost of incarceration, and the circumstances of these offenses. The Court finds that a sentence of probation or conditional discharge would deprecate the seriousness of the crimes committed and would be inconsistent with the ends of justice and that a sentence of imprisonment is necessary for the protection of the public. Here’s the problem: You didn’t comply with probation. You continually violated the law during the greater portion of the probation. I’m sure that Probation doesn’t want you back. Recently, it appears you’ve been doing very good, and your attitude has been very good, but that doesn’t undercut what went on before. I can’t, in good conscience, sweep the previous conduct under the rug by basically letting you off the hook and sending a message that all you have to do is go to inpatient treatment a few years ago, and then you can continually not do what you’re supposed to do.” The court revoked defendant’s probation and sentenced defendant to four years’ imprisonment for unlawful possession with intent to deliver a controlled substance in case No. 16-CF-308. The court also sentenced defendant to a concurrent term of three years’ imprisonment for unlawful 4 possession of methamphetamine with intent to deliver in case No. 17-CF-328. Defense counsel filed a motion to reconsider sentence arguing defendant’s sentence was excessive. ¶ 11 At the motion hearing, defense counsel argued for a term of probation based on defendant’s health. The State argued the sentence was appropriate. The court continued the case and said: “And then see if you can figure out through the records when’s the last time she took meth. I’m concerned about two things: (1) She has all these health problems which she says are going to get worse and be devastating, but yet she’s taking meth during the same time period that she has these health problems. It didn’t seem to matter to her then, but now that she has to go to prison, it’s a big deal.” ¶ 12 At the resumed hearing, defendant’s probation officer testified that defendant had a substance abuse evaluation and was recommended for inpatient treatment. Defendant was placed on a waitlist since she was preparing to have eye surgery. In the interim, court services recommended outpatient treatment. Defendant completed orientation and one skills group. Defendant did not return for any further outpatient services. Defendant was discharged from outpatient treatment due to lack of communication. ¶ 13 Defendant testified that she did not maintain contact with outpatient services because she had gotten back on track with her recovery. Additionally, defendant’s doctors recommended she minimize travel due to her higher risk of contracting COVID-19 which is why she did not continue outpatient services or start inpatient services. Additionally, defendant requested the substance abuse evaluation, and inpatient and outpatient services. None were recommended or ordered. Defendant was scared when she relapsed and thought she needed inpatient services but 5 then realized she could utilize what she had previously learned in rehabilitation. Defendant no longer thought the services were necessary. ¶ 14 The court did not find defendant credible and denied the motion to reconsider. Defendant appeals. ¶ 15 II. ANALYSIS ¶ 16 Defendant argues the circuit court abused its discretion by sentencing her to a term of imprisonment because the State failed to present any evidence in aggravation and the court failed to properly weigh the endangerment of defendant’s medical condition. In support of this argument, defendant cites to People v. Kish, 58 Ill. App. 3d 215 (1978). ¶ 17 “It is well settled that a trial judge’s sentencing decisions are entitled to great deference and will not be altered on appeal absent an abuse of discretion.” People v. Jackson, 375 Ill. App. 3d 796, 800 (2007). A reviewing court “must not substitute its judgment for that of the trial court simply because the reviewing court would have weighed the factors differently.” Id. at 800-01. A sentence that falls within the statutorily prescribed range is presumptively valid (People v. Busse, 2016 IL App (1st) 142941, ¶ 27), and “is not an abuse of discretion unless it is manifestly disproportionate to the nature of the offense.” People v. Franks, 292 Ill. App. 3d 776, 779 (1997). ¶ 18 The sentencing range for unlawful possession with intent to deliver a controlled substance is 4 to 15 years’ imprisonment. 730 ILCS 5/5-4.5-30 (West 2016). The sentencing range for unlawful possession of methamphetamine with intent to deliver is three to seven years’ imprisonment. Id. § 5-4.5-35. Since defendant’s sentences are within the applicable ranges; they are presumptively valid. See Busse, 2016 IL App (1st) 142941, ¶ 27. 6 ¶ 19 “ ‘A trial court has wide latitude in sentencing a defendant, so long as it neither ignores relevant mitigating factors nor considers improper factors in aggravation.’ ” People v. Flores, 404 Ill. App. 3d 155, 157 (2010) (quoting People v. Roberts, 338 Ill. App. 3d 245, 251 (2003)). “The existence of mitigating factors does not obligate the trial court to impose the minimum sentence” (People v. Garibay, 366 Ill. App. 3d 1103, 1109 (2006)), and does not preclude it from imposing the maximum sentence (People v. Pippen, 324 Ill. App. 3d 649, 652 (2001)). The absence of aggravating factors does not require the circuit court to impose the minimum sentence. People v. Quintana, 332 Ill. App. 3d 96, 109 (2002). We presume the court considered the relevant factors and mitigation evidence presented. People v. Wilson, 2016 IL App (1st) 141063, ¶ 11. The court is not required to “recite and assign a value to each factor.” Id. It is defendant’s burden to show that the court did not consider the relevant factors. Id. ¶ 20 The record clearly shows the circuit court considered defendant’s medical conditions during the sentencing hearing and the hearing on the motion to reconsider. See 730 ILCS 5/5-5- 3.1(a)(12) (West 2016). Accordingly, we “must not substitute [our] judgment for that of the trial court simply because [we] would have weighed the factors differently.” Jackson, 375 Ill. App. 3d at 800-01. Additionally, the lack of evidence in aggravation does not prevent the court from sentencing defendant beyond the minimum sentence (Quintana, 332 Ill. App. 3d at 109), so we are not convinced that it prevents the court from imposing the minimum. Moreover, while the State did not present formal evidence in aggravation, the court noted several aggravating factors. Supra ¶ 10; see also 730 ILCS 5/5-5-3.2(a)(1), (3), (12) (West 2016). ¶ 21 Finally, we are not persuaded that our decision in Kish, 58 Ill. App. 3d at 216-17, directs the outcome in this case. In Kish, we found the circuit court abused its discretion because it sentenced defendant beyond the minimum based on an inference inherent in the statutory 7 penalties. Id. Here, defendant was sentenced to the minimum term of incarceration for each offense and the court based its decision on appropriate aggravating factors. Thus, the court did not abuse its discretion in sentencing defendant to a term of imprisonment. ¶ 22 III. CONCLUSION ¶ 23 The judgment of the circuit court of Henry County is affirmed. ¶ 24 Affirmed. 8	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483642/	NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). 2022 IL App (3d) 200257-U Order filed November 14, 2022 ____________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS THIRD DISTRICT 2022 THE PEOPLE OF THE STATE OF ) Appeal from the Circuit Court ILLINOIS, ) of the 12th Judicial Circuit, ) Will County, Illinois, Plaintiff-Appellee, ) ) Appeal No. 3-20-0257 v. ) Circuit No. 16-CF-2221 ) JOHNATHAN C. ELLIOTT, ) Honorable ) Daniel Rippy, Defendant-Appellant. ) Judge, Presiding. ____________________________________________________________________________ JUSTICE DAUGHERITY delivered the judgment of the court. Presiding Justice O’Brien and Justice Hettel concurred in the judgment. ____________________________________________________________________________ ORDER ¶1 Held: The circuit court did not err in dismissing defendant’s postconviction petition at the first stage. ¶2 Defendant, Johnathan C. Elliott, appeals from the first-stage dismissal of his postconviction petition. Defendant argues that the Will County circuit court erred in dismissing his petition because it presented the gist of claims of a due process violation and ineffective assistance of counsel. We affirm. ¶3 I. BACKGROUND ¶4 In October 2016, the State charged defendant with being an armed habitual criminal (AHC) (720 ILCS 5/24-1.7(a)(1) (West 2016)) along with four other charges stemming from the same incident. Relevant to this appeal, the AHC charge alleged: “[D]efendant knowingly possessed a firearm, a black Sig Sauer P320 pistol, after having been convicted of the offenses of Predatory Criminal Sexual Assault of a Child in Grundy County under docket number 1997 CF 74 in violation of Section 12-14.1 of Act 5 of Chapter 720 of the Illinois Compiled Statutes, and Aggravated Battery in Grundy County under docket number 1997 CF 8 in violation of Section 12-4(a) of Act 5 of Chapter 720 of the Illinois Compiled Statutes, in violation of Chapter 720, Section 5/24-l.7(a)(l) and (b), of the Illinois Compiled Statutes, 2016.” Counsel was appointed to represent defendant. ¶5 On May 11, 2017, defendant entered a negotiated plea agreement to the AHC charge in addition to two unrelated 2015 cases. In exchange, the State dismissed several pending charges and recommended a sentence of four years’ imprisonment on the 2015 cases and a consecutive term of six years’ imprisonment on the AHC charge. Defendant was fully admonished and persisted in his plea of guilty. The State provided a factual basis for each of the three charges. Regarding the prior convictions element of AHC, the State proffered that defendant “also does have the priors that are listed in that Bill of Indictment making it the armed habitual.” Defense counsel stipulated to the factual basis as presented by the State. Defendant filed no postplea motions or direct appeal. 2 ¶6 On May 11, 2020, defendant filed, as a self-represented litigant, a postconviction petition alleging, among other things, that his due process rights were violated because his prior conviction was for an aggravated battery that occurred in a public way, and it did not include great bodily harm, no evidence of great bodily harm was presented, which was necessary to qualify as a forcible felony, and counsel was ineffective for stipulating to the deficient factual basis and failing to challenge the facts of defendant’s criminal background. Defendant attached a copy of the police report for his 1997 aggravated battery case. In the report, the officer indicated that defendant “was charged with Agg. Battery under sec 720 act 5 section 12-4(b)(8). He was then transported to the jail.” On June 15, 2020, the court summarily dismissed defendant’s postconviction petition. Defendant appeals. ¶7 II. ANALYSIS ¶8 Defendant argues the court erred in dismissing his petition because it presented the gist of claims of a due process violation and ineffective assistance of counsel. Specifically, the petition alleged: (1) the factual basis provided for the AHC charge failed to provide evidence of an essential element of the offense where his prior conviction for aggravated battery was charged under section 12-4(b)(8)—aggravated battery in a public way—and did not include great bodily harm; (2) counsel erroneously advised defendant to plead guilty where the evidence was insufficient to support a conviction; and (3) counsel erroneously stipulated to the deficient factual basis. ¶9 The Post-Conviction Hearing Act creates a procedure for imprisoned criminal defendants to collaterally attack their convictions or sentences based on a substantial denial of their rights under the United States Constitution, the Illinois Constitution, or both. 725 ILCS 5/122-1(a)(1) (West 2020). At the first stage, the court independently assesses the merit of the petition. Id. 3 § 122-2.1. A defendant need only state the gist of a constitutional claim, which is a low threshold. People v. Gaultney, 174 Ill. 2d 410, 418 (1996). All well-pleaded facts are to be taken as true unless positively rebutted by the record. People v. Hodges, 234 Ill. 2d 1, 16 (2009). If the court finds the petition to be “frivolous or patently without merit,” the court shall dismiss the petition. People v. Moore, 2018 IL App (3d) 160271, ¶ 15. A petition is considered frivolous if it has no arguable basis in law or fact. Hodges, 234 Ill. 2d at 11-13, 16. ¶ 10 Defendant’s claims of both a due process violation and ineffective assistance of counsel stem from his allegation that his prior conviction for aggravated battery in a public way was insufficient to sustain a conviction for AHC. Illinois Supreme Court Rule 402(c) (eff. July 1, 2012) requires that “[t]he court shall not enter final judgment on a plea of guilty without first determining that there is a factual basis for the plea.” Further, a plea of guilty is not voluntarily made where a defendant relies on advice of counsel that falls outside “ ‘the range of competence demanded of attorneys in criminal cases.’ ” Hill v. Lockhart, 474 U.S. 52, 56 (1985) (quoting McMann v. Richardson, 397 U.S. 759, 771 (1970)). For claims of ineffective of counsel to avoid summary dismissal, a defendant must demonstrate that: (1) counsel’s performance arguably fell below an objective standard of reasonableness; and (2) the defendant was arguably prejudiced. Hodges, 234 Ill. 2d at 17. Where an underlying claim has no merit, no prejudice will result. People v. Pitsonbarger, 205 Ill. 2d 444, 465 (2002). ¶ 11 A conviction for AHC requires a defendant have two or more prior convictions for a qualifying offense. Section 24-1.7(a) defines a qualifying offense as “a forcible felony as defined in Section 2-8 of [the Criminal Code of 2012]” or one of the offenses specifically enumerated in sections 24-1.7(a)(2) and (a)(3). 720 ILCS 5/24-1.7(a) (West 2016). Section 2-8 states that forcible felonies are: 4 “treason, first degree murder, second degree murder, predatory criminal sexual assault of a child, aggravated criminal sexual assault, criminal sexual assault, robbery, burglary, residential burglary, aggravated arson, arson, aggravated kidnaping, kidnaping, aggravated battery resulting in great bodily harm or permanent disability or disfigurement and any other felony which involves the use or threat of physical force or violence against any individual.” Id. § 2-8. ¶ 12 Here, through the bill of indictment and the State’s proffer, the record reflects that defendant had prior convictions for predatory criminal sexual assault of a child and aggravated battery under section 12-4(a). In 1997, section 12-4(a) read: “[a] person who, in committing a battery, intentionally or knowingly causes great bodily harm, or permanent disability or disfigurement commits aggravated battery.” 720 ILCS 5/12-4(a) (West 1996). Accordingly, the record rebuts the claim that defendant’s prior conviction was for aggravated battery in a public way under section 12-4(b)(8) because defendant was convicted under section 12-4(a), which included the necessary great bodily harm element. ¶ 13 Even taking the attached police report as true, it merely reflects what charge the police arrested defendant for. However, it is the responsibility of the State alone “to evaluate the evidence and other relevant factors to determine what offenses can and should properly be charged.” People v. Edgeston, 243 Ill. App. 3d 1, 11 (1993). “An official other than the State’s Attorney does not have the authority to determine prosecution for criminal conduct.” People v. Dandridge, 152 Ill. App. 3d 941, 943 (1987). In other words, the felony offense that is relevant for purposes of the AHC conviction is the offense that defendant stands convicted of, not what he was initially arrested for. 5 ¶ 14 Defendant’s prior conviction for aggravated battery constitutes a forcible felony, and thereby, a qualifying offense under the AHC statute, sufficient to support the conviction which was entered against defendant. Thus, defendant’s claims of a due process violation and ineffective assistance of counsel are rebutted by the record, and the court did not err in dismissing his postconviction petition. ¶ 15 III. CONCLUSION ¶ 16 The judgment of the circuit court of Will County is affirmed. ¶ 17 Affirmed. 6	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483634/	IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE HASTINGS FUNERAL HOME, INC. ) ) Plaintiff, ) ) v. ) C.A. No. 2021-0373-PWG ) CHARLES W. HASTINGS, ) ) Defendant. ) MASTER’S REPORT Date Submitted: August 22, 2022 Final Report: November 14, 2022 Scott G. Wilcox, Esquire, MOORE & RUTT, P.A., Wilmington, Delaware, Attorney for Plaintiff Hastings Funeral Home, Inc. David C. Hutt, Esquire, Michelle Bounds, Esquire, MORRIS JAMES LLP, Georgetown, Delaware, Attorneys for Defendant Charles W. Hastings GRIFFIN, M. Pending before me is a dispute about a lease purchase agreement for real properties used in the operation of a funeral home business in Selbyville, Delaware. The new owner of a funeral home business sought to exercise the option to purchase the properties from the former owner under the agreement and began the process specified in the agreement for establishing the properties’ sale price. Disputes arose between the parties concerning the process and the sale price. In its motion for summary judgment, the new owner seeks specific performance of the agreement to purchase the properties, damages, and attorneys’ fees. In his cross-motion for summary judgment, the former owner denies the new owner’s entitlement to specific performance or damages, arguing that the new owner is in material breach of the agreement, and seeks indemnification for his attorneys’ fees under the agreement. I find that the evidence shows that the new owner is entitled to specific performance of the agreement, and recommend that the Court grant the new owner’s motion for summary judgment, deny the former owner’s cross-motion for summary judgment, order the sale of the properties and compensatory damages, and deny any award of attorneys’ fees. This is a final report. 1 I. BACKGROUND A. Factual Background On May 4, 2014, William Bryan Bishop, Jr. purchased all the shares and assets of Plaintiff Hastings Funeral Home, Inc. (“HFH”) from Defendant Charles W. Hastings (“Hastings”).1 On July 1, 2014, the parties entered into a separate lease purchase agreement (“Agreement”) for real property owned by Hastings and located at 19 South Main Street and 24 South Main Street, Selbyville, Delaware (“Properties”) out of which HFH operates the business.2 The Agreement’s initial five-year term ended on June 30, 2019, with HFH having the option to renew for two additional five-year terms.3 During the first and second terms, HFH had the option to purchase the Properties.4 The Agreement stated that HFH will purchase the Properties at their “then fair market value” to be agreed upon by HFH and Hastings.5 If the parties could not agree on the fair market value price, the Agreement provided a mechanism for determining fair market value (“Pricing Process”): 1 Docket Item (“D.I.”) 1, ¶¶ 4-5. HFH was founded in 1896 and purchased by Hastings around 1980, who operated the funeral home business until May 4, 2014. D.I. 30, at 4. 2 D.I. 1, ¶ 6; D.I. 30, Ex. A. 3 D.I. 30, Ex. A, art. 2; id., art. 20. 4 Id., art. 21(b). At the end of each term, if HFH did not exercise the option to renew under the Agreement, it was obligated to purchase the Properties. Id., art. 21(a). 2 [T]he fair market value shall be determined by calculating the average fair market value based upon two appraisals commissioned independently by [HFH] and [Hastings] and prepared by MAI, Delaware Licensed Appraisers, provided that any difference between the value does not exceed ten (10%) percent. If such difference is greater than ten (10%), then [HFH] and [Hastings] shall instruct those MAI, Delaware Licensed Appraisers to appoint a third MAI, Delaware Licensed Appraiser to prepare a third appraisal, the cost of which shall be born equally by [HFH] and [Hastings]. If the three MAI, Delaware Licensed Appraisers cannot agree on the fair market value of the [Properties], then [Hastings] and [HFH] shall be bound by the appraisal of the mutually chosen third MAI, Delaware Licensed Appraiser. In the event that [HFH] exercises the option, [HFH] and [Hastings] shall have thirty (30) days after the giving of notice by [HFH] of its intention to exercise the option to obtain the appraisals at their own expense of their own MAI, Delaware Licensed Appraiser. The third appraisal, if necessary, shall be obtained within thirty (30) days thereafter.6 If HFH exercised its option to purchase the Properties during one of the renewal terms, it must notify Hastings in writing and the “purchase of the Propert[ies] shall then take place ninety (90) days after the exercise of the option (unless the parties mutually agree to an alternate date).”7 The Agreement contains a time is of the essence clause.8 It also includes a default provision requiring that Hastings provide HFH with written notice of, and the opportunity to cure, any breach of a material term or condition of the Agreement, with HFH having 30 days to cure any default, unless the period was 5 Id., art. 21(d). 6 Id. 7 Id., art. 21(b). 3 reasonably extended.9 The Agreement contains an indemnification clause (“Indemnification Clause”) providing that HFH indemnifies Hastings for claims and expenses, including attorneys’ fees, in defense of claims or causes of action initiated against Hastings that arise “by, from or through [HFH’s] use, occupancy and possession of the Propert[ies].”10 It also includes a prevailing party provision (“Prevailing Party Provision”) requiring that HFH reimburse Hastings for all expenses, including attorneys’ fees, arising from or in connection with a default by HFH, if Hastings is the prevailing party in the dispute.11 On January 10, 2019, prior to the end of the Agreement’s initial term, HFH exercised its option to renew for another five-year term.12 On May 13, 2019, Hastings responded regarding the rent increase for the second term, provided notice that HFH had breached the Agreement by subletting a portion of the Properties, and asked HFH to pay him the rent collected to cure the default.13 On September 4, 2019, HFH notified Hastings that it was exercising its option to 8 Id., art. 26(b), (d). 9 Id., art. 22. See id., art. 22(d) (providing that the cure period is reasonably extended “if [HFH] has timely commenced and is diligently pursuing a cure of the default”). 10 Id., art. 15(e). 11 Id., art. 23(f). 12 Id., Ex. B. 13 Id., Ex. C. 4 purchase the Properties.14 Hastings responded, on September 12, 2019, that the purchase could not proceed because HFH had not cured the default nearly four months after Hastings provided notice of the default, but that, if HFH paid the rent collected, Hastings “would be glad to discuss the sale of the [Properties].”15 HFH made the requested payment on September 18, 2019, and indicated that the 30-day appraisal period should begin on that date.16 On December 6, 2019, Hastings wrote to HFH, stating that he was “sorry it took so long,” but he was ready to sell the Properties for $950,000.00.17 HFH responded, on December 20, 2019, that it did not agree that $950,000.00 was the fair market value price and that the Pricing Process needed to be followed.18 HFH had obtained an appraisal on August 26, 2019 from Harold L. Carmean (“Carmean”), who was a Delaware certified appraiser but not MAI-certified.19 Carmean appraised the Properties at $637,500.00.20 HFH provided the Carmean appraisal to Hastings on February 27, 2020, and asked to receive a copy of Hastings’ appraisal “as soon as possible,” given the 30-day period to obtain 14 Id., Ex. D. 15 Id., Ex. E. 16 Id., Ex. F. 17 Id., Ex. G. 18 Id., Ex. H. 19 Id., Ex. I. 20 Id. 5 appraisals in the Agreement.21 On March 3, 2020, Hastings responded that the appraiser he hired, William McCain (“McCain”), had completed his appraisal of the Properties in October 2019 but did not provide a copy of the McCain appraisal to HFH.22 On March 24, 2020, HFH again asked for a copy of the McCain appraisal, which Hastings mailed to HFH on March 27, 2020.23 McCain, who was a MAI and Delaware certified appraiser, appraised the Properties at $925,000.00, as of October 3, 2019.24 HFH communicated with Hastings by email on May 1, 2020, indicating that, since the difference in the appraisals’ values exceeded ten percent, the parties’ appraisers had agreed to Georgia Nichols (“Nichols”), a MAI and Delaware certified appraiser, as the third appraiser, and sought his approval, and payment of one-half of the cost, to retain the third appraiser.25 Hastings agreed to retain Nichols and signed the engagement letter on May 15, 2020.26 Nichols concluded, in her June 16, 2020 appraisal, that the market value of the Properties was $850,000.00 as of June 5, 2020.27 Hastings sent a June 19, 2020 email to HFH 21 Id. 22 Id., Ex. J. Hastings wrote HFH a week later indicating that he knew the appraised values weren’t “even close,” was asking his appraiser to review the Carmean appraisal, and would provide a copy of the McCain appraisal after that review. Id., Ex. K. 23 D.I. 32, at 7; D.I. 30, Ex. O. 24 D.I. 30, Ex. N. 25 Id., Ex. R. 26 Id.; id., Ex. S, Addendum B. 27 Id., Ex. S, at 65. 6 stating that he will not move forward on the Properties’ sale until the other appraisers discuss the Nichols appraisal.28 On July 9, 2020, Hastings wrote HFH stating that it has come to his attention that Carmean was not a MAI-certified appraiser as required by the Agreement so HFH was “going to have to start all over and hire an MAI Delaware appraiser to appraise the [Properties]” but, to avoid “gambling on the outcome of a new appraisal,” HFH can pay Hastings $900,000.00.29 HFH then hired a new MAI- certified appraiser, John Crognale (“Crognale”), who valued the properties at $615,000.00, as of October 19, 2020, in an appraisal dated November 2, 2020.30 On November 9, 2020, HFH sent the Crognale appraisal to Hastings, indicating that, although HFH believed that Hastings had waived his objection to Carmean’s lack of MAI certification, it had commissioned the Crognale appraisal and, since the value difference for the Properties still exceeded ten percent, it asked whether Hastings would agree to using the Nichols appraisal as the third appraisal or wanted Crognale and McCain to select a new third appraiser.31 After HFH followed up with an email on December 28, 2020, Hastings replied, in a December 29, 2020 email, that he had not seen HFH’s November 9, 28 Id., Ex. T. 29 Id., Ex. U. 30 Id., Ex. V. 31 Id. 7 2020 letter previously, questioned whether HFH was asking to use the Nichols appraisal as the third appraisal, and indicated that he would get back to HFH after consulting with his attorney and appraiser.32 HFH confirmed that it was asking whether the parties needed to hire a new third appraiser and set a response date of approximately ten days, to which Hastings responded that he will not make a decision by that date.33 Later on December 29, 2020, HFH responded that, if Hastings preferred, they could get the “the three appraisers [to] talk to see if they can come to a mutually agreed amount.”34 After HFH emailed Hastings on January 20, 2021 regarding his failure to respond to the December 29, 2020 email,35 Hastings replied, on January 25, 2021, that HFH had breached a material term or condition in the Agreement because Carmean lacked MAI certification and the Agreement did not provide for additional appraisals.36 He further stated that he had “fulfilled [his] obligation” under the Agreement and was “not required to recognize any redone appraisals or to spend any more money on appraisals,” and offered alternative price offers.37 32 Id., Ex. T. 33 Id. 34 Id., Ex. W 35 Id. 36 Id., Ex. X (“the [Agreement] does not have a provision allowing for an appraisal redo”). 37 Id. 8 HFH emailed Hastings on February 8, 2021 and on March 8, 2021, stating that the sale price was the Nichols appraisal’s value of $850,000.00, as set by the Pricing Process.38 Hastings responded in a March 9, 2021 email that he didn’t recall HFH’s “last offer,” and, on March 12, 2021, HFH reiterated the $850,000.00 price.39 On March 21, 2021, Hastings submitted additional price offers, which HFH rejected.40 Hastings’ March 26, 2021 letter reiterated that that the Agreement does not provide for a “do-over” since Carmean is not MAI-certified, and continued to provide alternative offers.41 B. Procedural History On April 29, 2021, HFH filed a complaint claiming Hastings breached the Agreement and seeking specific performance of the Agreement, damages representing rent paid by HFH during the dispute, and attorneys’ fees.42 Hastings filed a motion to dismiss on June 4, 2021, arguing that HFH was not entitled to specific performance or damages.43 HFH responded, on July 17, 2021, that it had 38 D.I. 32, Ex. O; HFH’s February 8, 2021 email indicated that the Agreement provides for the use of the third appraiser’s value because the parties’ appraisers will not agree to using the other’s value. Id. 39 Id. 40 Id. 41 D.I. 30, Ex. Z. 42 D.I. 1. HFH continues to pay rent under the Agreement. Id., ¶¶ 19, 20. 43 D.I. 5. 9 met its pleading burden for specific performance and damages.44 In a November 29, 2021 final master’s report (“November 29, 2021 Master’s Report”), I denied the motion to dismiss.45 Hastings filed an answer and a counterclaim seeking indemnification under the Agreement for his attorneys’ fees defending this action.46 Discovery followed and, on June 23, 2022, HFH filed an answer to Hastings’ counterclaim.47 On July 22, 2022, HFH filed its opening brief in support of its motion for summary judgment (“Motion”),48 and Hastings filed its motion for summary judgment and opening brief in support of its motion (“Cross-Motion”).49 On August 22, 2022, HFH and Hastings filed their answering briefs in opposition to the other party’s motion for summary judgment.50 II. STANDARD OF REVIEW Summary judgment is appropriate only where “the moving party demonstrates the absence of issues of material fact and that it is entitled to 44 D.I. 9. 45 D.I. 12 (holding that the Agreement does not lack a sufficiently definite price term for the Properties; the Pricing Process is not a condition precedent to the obligation to purchase or sell the Properties under the Agreement; waiver and damages have been sufficiently pled by HFH; and it is reasonably conceivable that HFH can prove the balance of equities tips in its favor). The November 29, 2021 Master’s Report was adopted by the Chancellor on December 14, 2021. D.I. 13. 46 D.I. 14. 47 D.I. 27. 48 D.I. 30. 49 D.I. 31; D.I. 32. 50 D.I. 36; D.I. 37. 10 judgment as a matter of law.”51 Evidence must be viewed “in the light most favorable to the non-moving party.”52 “In evaluating the summary judgment record, a trial court shall not weigh the evidence or resolve conflicts presented by pretrial discovery.”53 Summary judgment may not be granted when material issues of fact exist or if the Court determines that it “seems desirable to inquire more thoroughly into the facts in order to clarify the application of law to the circumstances.”54 When the Court is presented with cross-motions for summary judgment, the Court may “deem the motions to be the equivalent of a stipulation for decision,”55 but “[t]he existence of cross-motions … does [not] change the standard for summary judgment.”56 In evaluating cross-motions for summary judgment, the court examines each motion independently and only grants a motion for summary 51 Wagamon v. Dolan, 2012 WL 1388847, at 2 (Del. Ch. Apr. 20, 2012); see also Cincinnati Bell Cellular Sys. Co. v. Ameritech Mobile Phone Serv. of Cincinnati, Inc., 1996 WL 506906, at 2 (Del. Ch. Sept. 3, 1996), aff’d, 692 A.2d 411 (Del. 1997). 52 Williams v. Geier, 671 A.2d 1368, 1375-76 (Del. 1996) (citing Bershad v. Curtiss- Wright Corp., 535 A.2d 840, 844 (Del. 1987)). 53 AeroGlobal Cap. Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 444 (Del. 2005). 54 In re Est. of Turner, 2004 WL 74473, at 4 (Del. Ch. Jan. 9, 2004) (quoting Holladay v. Patten, 1995 WL 54437, at 3 (Del. Ch. Jan. 4, 1993)) (internal quotation marks omitted); see also Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962). 55 Ct. Ch. R. 56(h). 56 Bernstein v. Tact Manager, Inc., 953 A.2d 1003, 1007 (Del. Ch. 2007). 11 judgment to one of the parties when there is no disputed issue of material fact and that party is entitled to judgment as a matter of law.57 III. ANALYSIS The issues before me on summary judgment are whether HFH is entitled to specific performance of the Agreement to purchase the Properties, damages representing rent paid by HFH to Hastings, and an award of attorneys’ fees under the bad faith exception. In addition, I consider whether Hastings should be indemnified for his attorneys’ fees in this action under the Agreement. I address each issue below. A. HFH is Entitled to Specific Performance of the Agreement. Hastings argues that specific performance of the Agreement cannot be granted because HFH’s failure to follow the Pricing Process (by not obtaining a MAI-certified appraiser initially and by not complying with the time periods specified for the process when the Agreement had a time is of the essence clause) renders the Properties’ price indefinite, is a material breach of the Agreement, and the equities tip in Hastings’ favor.58 In contrast, HFH asserts that Hastings waived the applicable time requirements through his conduct and is equitably estopped 57 See Empire of Am. Relocation Servs., Inc. v. Commercial Credit Co., 551 A.2d 433, 435 (Del. 1988); Wimbledon Fund LP v. SV Special Situations LP, 2011 WL 378827, at 7 (Del. Ch. Feb. 4, 2011). 58 D.I. 32, at 13-26. 12 from enforcing those time periods.59 It claims that Hastings materially breached the Agreement, and the equities heavily favor it.60 With regard to the sale of the Properties, the Agreement provides that, after HFH exercises the option to purchase, the sale price is their fair market value at that time.61 If HFH and Hastings cannot agree on the fair market value of the Properties, the Agreement details a process for determining the sale price.62 First, HFH and Hastings commission independent appraisals of the Properties from “MAI, Delaware Licensed Appraisers” (“MAI-Certification”).63 They have 30 days after HFH exercises the option to purchase to obtain those appraisals (“First Appraisals Period”).64 If the difference in those appraisals exceeds ten percent, a third appraisal is obtained from a MAI, Delaware licensed appraiser selected by the first two appraisers, within 30 days after that (“Third Appraisal Period”).65 If the three appraisers cannot agree on the sale price, then the parties are bound by the third appraisal.66 The Agreement provides that the purchase of the Properties takes place 90 days after the exercise of the option to purchase “unless the parties 59 D.I. 36, at 5-13. 60 Id., at 13-15. 61 D.I. 30, Ex. A, art. 21(d). 62 Id. 63 Id. 64 Id. 65 Id. 13 mutually agree to an alternate date” (“Sale Period,” or collectively with the First Appraisals Period and the Third Appraisal Period, “Time Periods”).67 A party seeking specific performance must establish, by clear and convincing evidence, that (1) an enforceable contractual obligation exists; (2) it has performed (or is ready, willing, and able to perform) its own obligations; and (3) that the balance of the equities tips in its favor.68 “Specific performance is a remedy that is particularly suitable for land given its unique characteristics.”69 “The party seeking specific performance has the burden of proving entitlement by clear and convincing evidence.”70 1. The Agreement is Valid and Enforceable. I first address whether the Agreement is sufficiently definite to be enforceable. “[S]pecific performance will only be granted when an agreement is clear and definite and a court does not need to supply essential contract terms.”71 “A contract is sufficiently definite and certain to be enforceable if the court can … ascertain what the parties have agreed to do.”72 The essential terms of a real estate 66 Id. 67 Id., art. 21(b). 68 Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1158 (Del. 2010). 69 DeMarie v. Neff, 2005 WL 89403, at 4 (Del. Ch. Jan. 12, 2005). 70 Peden v. Gray, 886 A.2d 1278 (Del. 2005) (ORDER). 71 Osborn, 991 A.2d at 1159. 72 Eagle Force Hldgs., LLC v. EF Invs., LLC, 187 A.3d 1209, 1232 (Del. 2018). 14 contract are the names of the buyer and seller, description of the property to be sold, sales price or the means of determining the price, the terms and conditions of the sale, and the signature of the party to be charged.73 Hastings argues that HFH’s failure to comply with the Time Periods results in non-specific terms that renders the Properties’ price indefinite.74 I disagree. In the November 29, 2021 Master’s Report, I concluded that the Agreement did not lack a sufficiently definite price term for the Properties since it provided a means of determining the price – the fair market value of the Properties at the time of sale – through the Pricing Process.75 I further held that “HFH’s failure to comply with all aspects of the [Pricing Process] in the Agreement does not affect the parties’ intentions in making the Agreement or whether the Agreement’s terms are definite.”76 As discussed more fully below, the parties’ actions pertaining to the Agreement do not negate the Court’s ability to ascertain the Properties’ sale price. 2. HFH has Proven it is Ready, Willing and Able to Perform under the Agreement. I consider whether HFH is ready, willing and able to perform its obligations under the Agreement. First, I consider Hastings’ argument that HFH has failed to 73 Pulieri v. Boardwalk Properties, LLC, 2015 WL 691449, at 5 (Del. Ch. Feb. 18, 2015). 74 D.I. 32, at 13-16. 75 D.I. 12, at 9. 76 Id. 15 meet its obligations under the Agreement and materially breached the Agreement by failing to comply with the Time Periods and the time is of the essence clause.77 HFH responds that Hastings waived enforcement of the Time Periods and breached the Agreement, by delaying, “continually fail[ing] to comply with any of the time periods,” and “at no time … indicat[ing] or even appear[ing] to recognize the fact that the sale of the Propert[ies] was time sensitive.”78 As proof of Hastings’ waiver, it points to Hastings’ acceptance of the Carmean appraisal after the First Appraisals Period had elapsed, his continued price negotiation efforts beyond the Sale Period, and his July 9, 2020 letter indicating that HFH could seek a new appraisal from a MAI-certified appraiser.79 “Specific performance will not be granted to a party who is in default of a material obligation under the contract, unless that party is excused from performance of that obligation.”80 “It is fundamental law that a party seeking a decree for specific performance of a contract must, himself, have performed within the time specified [for] his own obligations under the contract.”81 However, “[i]t is well settled in Delaware that contractual requirements or conditions may be 77 D.I. 32, at 13-24. 78 D.I. 36, at 6, 9-13. 79 Id., at 9. 80 Peden, 886 A.2d at 1278. 81 Wells v. Lee Builders, Inc., 99 A.2d 620, 621 (1953) (citations omitted). 16 waived.”82 “Waiver is the voluntary and intentional relinquishment of a known right.”83 “A contractual requirement or condition may be waived where (1) there is a requirement or condition to be waived, (2) the waiving party must know of the requirement or condition, and (3) the waiving party must intend to waive that requirement or condition.”84 “The standard for demonstrating waiver is ‘quite exacting;’ because waiver is redolent of forfeiture, ‘the facts relied upon to demonstrate waiver must be unequivocal.’”85 “Waiver may be shown by a course of conduct signifying a purpose not to stand on a right and leading, by a reasonable inference, to the conclusion that the right in question will not be insisted upon.”86 Here, the evidence shows that adherence to the Time Periods was waived. Hastings’ first response after HFH exercised the option to purchase on September 18, 2019 was to offer his position on the sale price on December 6, 2019 – almost 80 days after HFH exercised the option to purchase.87 HFH responded 14 days later that it did not agree with Hastings’ price, indicating that the appraisal process 82 In re Coinmint, LLC, 261 A.3d 867, 893 (Del. Ch. 2021) (citations omitted). 83 AeroGlobal Cap. Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 444 (Del. 2005) (citations omitted). 84 Id. 85 Simon-Mills II, LLC v. Kan Am USA XVI Ltd. P’ship, 2017 WL 1191061, at 34 (Del. Ch. Mar. 30, 2017) (citations omitted). 86 28 Am. Jur. 2d Estoppel and Waiver § 194. 87 See supra note 17 and accompanying text. 17 was triggered.88 From the beginning of the Pricing Process, the Time Periods were not followed because the parties had not determined they disagreed on the Properties’ fair market value until long after the First Appraisals Period had ended on October 18, 2019 (or even after the Third Appraisal Period ended on November 17, 2019). They had obtained the appraisals within the First Appraisals period,89 but did not share their appraisals with each other until February 2020 (HFH) and March 2020 (Hastings, after repeated requests from HFH).90 The next step in the Pricing Process – obtaining a third appraiser if the difference between the first two appraisals exceeded ten percent – was not implicated until that occurred.91 After HFH sought Hastings’ approval and payment for the third appraiser on May 1, 2020, Hastings agreed to hiring the third appraiser, and signed her engagement letter, on May 15, 2020.92 The third appraiser completed the Nichols appraisal on 88 See supra note 18 and accompanying text. 89 The evidence shows that HFH had obtained the Carmean appraisal on August 26, 2019 and Hastings had obtained the McCain appraisal on October 3, 2019, so they were in compliance with the plain language related to the First Appraisals Period. See supra notes 19, 24 and accompanying text; D.I. 30, Ex. A, art. 21(d). 90 See supra notes 21, 23 and accompanying text. 91 See supra note 65 and accompanying text. Hastings would have known on February 27, 2020 that the difference exceeded ten percent but took no steps towards obtaining a third appraisal. See supra notes 21, 22, 25 and accompanying text. 92 See supra note 26 and accompanying text. 18 June 16, 2020, which was far outside of the Third Appraisal Period, or the Sale Period, which ended on December 17, 2019.93 The evidence shows that Hastings never expressed any concern that the Agreement’s time deadlines were not being met; instead he delayed and took ample time responding to HFH’s communications seeking to move the Pricing Process forward. By executing the third appraiser’s engagement letter on May 15, 2020, he acknowledged, and approved, in writing that the third appraisal was occurring outside of the Third Appraisal Period. It appears the first time Hastings mentioned any concern about the lack of compliance with the Time Periods was in his motion to dismiss.94 By executing the Agreement, Hastings knew of the Time Periods and the time is of the essence clause,95 and was aware of the time passing while the Pricing Process progressed and that the Time Periods and the time is of the essence clause were not being followed. His conduct was unequivocal in signifying that the Time Periods and the time is of the essence clause were waived in this instance.96 93 See supra note 27 and accompanying text. 94 See D.I. 5, at 4-7. 95 See e.g., Sammons v. Andersen, 968 A.2d 492 (Del. 2009) (“It is well settled in Delaware that a person is bound by the details of a document he signed even if he failed to inform himself of the details.”). 96 “Delaware courts will generally give substantial weight to [time is of the essence] provisions.” Twin Willows, LLC v. Pritzkur, Tr. for Gibbs, 2021 WL 3172828, at 4 (Del. Ch. July 27, 2021). Courts, however, look to the conduct of the parties to determine whether time provisions in a contract, including a time is of the essence clause, are 19 Because of that waiver, I do not find that HFH materially breached the Agreement, or failed to satisfy its obligations related to the Time Periods and the time is of the essence clause here. Next, I consider whether HFH’s initial failure to use a MAI-certified appraiser prevents HFH’s entitlement to specific performance of the Agreement. Hastings argues that HFH’s failure to use a MAI-certified appraiser constituted a material breach since the MAI-certification requirement was specified in the Agreement and imposed heightened industry standards to ensure the “appraisal process was legitimate and fair.”97 HFH responds that it commissioned a new appraisal by a MAI-certified appraiser after Hastings complained about Carmean’s lack of MAI-certification.98 The Pricing Process specifies that the appraisers be MAI-certified.99 Carmean, who completed HFH’s initial appraisal, was not MAI-certified.100 After controlling. See HomeOwners Expert Serv., Inc. v. Bobb, 1977 WL 5315, at 2 (Del. Ch. Mar. 15, 1977). Further, the language detailing the Sale Period specifically authorizes flexibility in the Sale Period, by allowing the parties to change the Sale Period if they “mutually agree to an alternate date.” D.I. 30, Ex. A, art. 21(b). 97 D.I. 32, at 15-16, 22. 98 D.I. 30, at 22. 99 Id., Ex. A, art. 21(d). 100 It appears that HFH may have been confused about Carmean’s MAI-Certification. The Carmean Appraisal identifies Carmean as Delaware certified but does not mention MAI-certification. Id., Ex. I. HFH’s December 20, 2019 letter to Hastings identifies Carmean as MAI-certified, although other letters refer to using Delaware licensed appraisers. See id., Exs. H, I. 20 the Nichols appraisal was completed, on July 9, 2020, Hastings wrote HFH asserting the Carmean appraisal was invalid since Carmean lacked the required MAI-Certification.101 He stated that “it would seem that [HFH] is going to have to start all over and hire an MAI Delaware appraiser to appraise the [Properties].”102 I do not find that the MAI-Certification was waived by Hastings – the evidence does not show that Hastings intentionally relinquished that requirement.103 Instead, I find the evidence shows that HFH cured any default of its use of a non-MAI-certified appraiser when it commissioned the Crognale appraisal after receiving Hastings’ July 9, 2020 letter. In that letter, Hastings offered HFH the option to obtain an appraisal by a MAI-certified appraiser, which was, in effect, starting over.104 The Agreement provides that HFH will not be considered to be in default if it fails to comply with a material term or condition of the Agreement until Hastings provides written notice of the default and HFH has 30 days to cure, although the cure period is reasonably extended if HFH is diligently pursuing the cure.105 The approach to curing the default – starting over and obtaining a new appraisal by a MAI-certified appraiser – was proposed by 101 Id., Ex. U. 102 Id. 103 Hastings asserts that he only discovered Carmean was not MAI-certified immediately before complaining about it in his July 9, 2020 letter. D.I. 32, at 8. 104 See id., Ex. U. 105 See id., Ex. A, art. 22(d). 21 Hastings in his July 9, 2020 letter, and followed by HFH. Accordingly, I find that HFH cured any default regarding its failure to initially use a MAI-certified appraiser.106 3. The Equities Favor HFH. Finally, I consider whether the balance of equities tip in HFH’s favor to support its specific performance claim. Hastings argues that the equities tip in his favor because HFH breached the terms of the Agreement.107 HFH responds that the equities weigh in its favor because it made every effort to complete the Agreement, in contrast to Hastings’ conduct in contravention of the Agreement.108 In balancing the equities for specific performance, the Court must consider whether “specific enforcement of a validly formed contract would cause even greater harm than it would prevent.”109 I find that the equities tip in HFH’s favor since it has not breached the Agreement, and I recognize that the funeral home business it purchased from Hastings appears to have operated out of the Properties since before 1900.110 106 HFH did not provide the new Crognale appraisal to Hastings until November 9, 2020, but Hastings’ previous action regarding defaults (allowing HFH to cure the default four months after notice), and his failure to object to the Crognale appraisal because of timing, indicate that the time for the Crognale appraisal was reasonably extended. See id., Ex. V. 107 D.I. 32, at 25-26. 108 D.I. 30, at 23-25. 109 Walton v. Beale, 2006 WL 265489, at 7 (Del. Ch. Jan. 30, 2006). 110 See supra note 1. 22 In conclusion, I find that that HFH has shown, by clear and convincing evidence, that it is entitled to specific performance of the Agreement and that the sale price for the Properties is $850,000.00, which is the fair market value as determined by the third appraisal and the sale price under the Agreement.111 The sale of the Properties to HFH shall occur within 45 days after the order implementing this report is entered. B. Compensatory Damages for the Delay in the Properties’ Transfer are Due. HFH seeks the return of rent it paid to Hastings on the Properties beginning in August 2020 due to Hastings’ breach by preventing closing on the Properties within the Time Periods.112 Hastings argues that HFH’s rent and specific performance claims fail for the same reasons, and rent is due until the sale is completed.113 111 I recognize that my decision allows a gap in the Pricing Process – the step in which the three MAI-certified appraisers determine if they can mutually agree on the Properties’ sale price. Given the duration of this dispute and the large disparity among the MAI- certified appraisers’ valuations of the Properties across a relatively short time period – McCain appraised the Properties at $925,000.00 (as of October 2019), Nichols at $850,000.00 (as of June 2020), and Crognale at $615,000.00 (as of October 2020), I find that requiring the three MAI-certified appraisers to meet to determine if they can mutually agree on the sale would be a useless exercise and do not require that they do so. See, e.g., W. Air Lines, Inc. v. Allegheny Airlines, Inc., 313 A.2d 145, 154 (Del. Ch. 1973). Therefore, the controlling provision in the Pricing Process compels the use the third appraisal to decide the sale price. 112 D.I. 30, at 25; D.I. 36, at 13-14. 113 D.I. 32, at 27; D.I. 37, at 22. 23 “Equity may, when its jurisdiction is invoked to obtain specific performance of a contract, award damages or pecuniary compensation along with specific performance when the decree as awarded does not give complete and full relief.”114 In ordering specific performance, the Court will “adjust the equities of the parties in such a manner as to put them as nearly as possible in the same position as if the contract had been performed according to its terms.”115 An order of specific performance ... will be so drawn as best to effectuate the purposes for which the contract was made and on such terms as justice so requires. As is the case here, an order of specific performance seldom results in performance within the time the contract requires. To that end, damages for the delay will usually be appropriate.116 “Where the delay is on the part of the [seller], the purchaser is entitled to the rents and profits from the time when, according to the terms of the contract, possession should have been delivered, and the [seller] is entitled to a credit for the interest earned by the purchaser on the unpaid purchase money.”117 “[A] court of equity may award damages for what the purchasers have lost by reason of the seller’s delay in conveying the property.”118 And, “equity may require a party to pay interest on the purchase price as a condition to obtaining specific performance 114 Tri State Mall Assocs. v. A. A. R. Realty Corp., 298 A.2d 368, 371 (Del. Ch. 1972). 115 Id. at 371-72. 116 Snow Phipps Grp., LLC v. Kcake Acquisition, Inc., 2021 WL 1714202, at 55 (Del. Ch. Apr. 30, 2021) (internal quotation marks and citations omitted). 117 Tri State Mall Assocs., 298 A.2d at 371. 24 where one party would otherwise inequitably receive a windfall at the other’s expense.”119 Here, the evidence shows that Hastings caused delay in the transfer of the Properties to HFH. After HFH obtained the Crognale appraisal, it shared the appraisal with Hastings on November 9, 2020, and inquired whether Hastings agreed to using the Nichols appraisal, or desired to have a new third appraiser selected.120 Hearing no response from Hastings, HFH offered, on December 29, 2020, to have the three MAI-certified appraisers discuss the sale price.121 Hastings did not respond to that offer either, but, on January 25, 2021, stated that he believed HFH had breached the MAI-Certification, he would not recognize “any redone appraisals,” and he would do “[n]othing more.”122 Between January 25, 2021 and his March 26, 2021 letter, Hastings’ communications with HFH contained varying sale price offers for the Properties that were not based on the Pricing Process.123 Throughout that time HFH remained steadfast in its position that, under the Agreement, the third appraisal set the sale price at $850,000.00.124 118 Romero v. Killy, 1987 WL 13521, at 7 (Del. Ch. July 1, 1987). 119 Vaughan v. Creekside Homes, Inc., 1994 WL 586833, at 3 (Del. Ch. Oct. 7, 1994). 120 D.I. 30, Ex. V. 121 See supra note 34 and accompanying text. 122 See D.I. 30, Ex. X. 123 See supra notes 39-41 and accompanying text. 124 See supra notes 38-40 and accompanying text. 25 When asked about next steps under the Pricing Process, Hastings indicated he would not do anything else. He had an obligation to complete the Pricing Process and determine the sale price under the Agreement. As of January 25, 2021, Hastings refused to move forward to complete the Pricing Process (although he continued to try to negotiate the sale price after that, he did so in contravention of the Pricing Process). On that date, the sale price could have been set at the third appraisal’s value (based on the final method for determining the sale price in the Agreement), and HFH’s purchase of the Properties could have occurred, under the Agreement. After the purchase, HFH would no longer owe rent on the Properties. So, to put the parties in as close as possible to the positions they would have been in if possession of the Properties had been delivered as of January 25, 2021, I find that rent paid on the Properties by HFH after that date should be credited against the sale price of $850,000.00.125 In addition, if delivery had occurred, Hastings would have received the sale proceeds from HFH on January 25, 2021, and he is entitled to a credit for interest on the unpaid purchase money since January 25, 2021. Therefore, the rent paid by HFH to Hastings since January 25, 2021 should be deducted from the sale price, and pre-judgment interest at the legal rate on the $850,000.00 sale price should be added for the same period. 26 C. Attorneys’ Fees Should not be Awarded to Either Party. First, I consider Hastings’ counterclaim that he is entitled to indemnification for his attorneys’ fees to defend this action under the Agreement.126 HFH refutes that the Indemnification Clause covers Hastings’ defense in this case.127 The Indemnification Clause provides that HFH will indemnify Hastings for attorneys’ fees incurred “in defense” of actions initiated against him.128 The Agreement also contains the Prevailing Party Provision, which requires HFH to reimburse Hastings for expenses, including attorneys’ fees, when Hastings is the prevailing party in an action related to HFH’s default under the Agreement.129 “Delaware follows the ‘American Rule,’ which provides that each party is generally expected to pay its own attorneys’ fees regardless of the outcome of the litigation.”130 “One of the exceptions to the American Rule, however, is that parties may agree to shift fees contractually,” through using indemnification provisions.131 Indemnification clauses, however, “are presumed not to require 125 HFH states that it has paid Hastings rent of $6,468.00 per month throughout this litigation. D.I. 30, at 16. 126 D.I. 32, at 28. 127 D.I. 30, at 32. 128 Id., Ex. A, art. 15(e). 129 Id., art. 23(f). 130 Shawe v. Elting, 157 A.3d 142, 149 (Del. 2017) (citation omitted); see also ATP Tour, Inc. v. Deutscher Tennis Bund, 91 A.3d 554, 558 (Del. 2014). 131 Paul Elton, LLC v. Rommel Delaware, LLC, 2022 WL 793126, at 1 (Del. Ch. Mar. 16, 2022); see also Dittrick v. Chalfant, 2007 WL 1378346, at 1 (Del. Ch. May 8, 2007). 27 reimbursement for attorneys’ fees incurred as a result of substantive litigation between the parties to the agreement absent a clear and unequivocal articulation of that intent.”132 “[P]urely contractual indemnification provisions only shift first- party claims if the contract explicitly so provides.”133 “When a contract contains both an indemnification provision and a ‘prevailing party’ provision elsewhere in the contract, the courts of this state will not construe the indemnification provision to allow first-party fee-shifting.”134 Here, the Agreement contains both the Prevailing Party Provision and the Indemnification Clause, which does not explicitly provide for first-party fee-shifting. As a result, I do not construe the Indemnification Clause as allowing for first-party fee-shifting, so Hastings’ indemnification claim fails, and I recommend that the Court deny Hastings’ claim for attorneys’ fees.135 132 Paul Elton, LLC, 2022 WL 793126, at 1 (internal quotation marks and citation omitted); see also Deere & Co. v. Exelon Generation Acquisitions, LLC, 2016 WL 6879525, at 1 (Del. Super. Nov. 22, 2016) (“Standard indemnity clauses are not presumed to apply to first-party claims.”). 133 Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, 2020 WL 7861336, at 5 (Del. Ch. Dec. 31, 2020), aff’d sub nom. Herzog v. Great Hill Equity Partners IV, LP, 269 A.3d 983 (Del. 2021). 134 Paul Elton, LLC, 2022 WL 793126, at 2. 135 Assuming arguendo that the Indemnification Clause would control and allow first- party fee-shifting, the Indemnification Clause provides for indemnification of “reasonably incurred attorneys fees,” I would not shift fees since reasonable attorneys’ fees are “related to the result achieved in the litigation” and HFH effectively prevails on all claims in this litigation. Great Hill Equity Partners IV, LP, 2020 WL 7861336, at 6. 28 Next, I consider HFH’s claim for attorneys’ fees under the bad faith exception to the American Rule. It argues that Hastings’ conduct in delaying his responses to HFH’s communications and taking baseless positions related to this matter before and during the litigation justifies an attorneys’ fee award.136 Hastings refutes HFH’s claim that the bad faith exception applies.137 The bad faith exception to the American Rule applies only in “extraordinary cases” where the “losing party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons.’”138 To apply the bad faith exception to pre-litigation conduct, courts determine whether “the pre-litigation conduct of the losing party was so egregious as to justify an award of attorneys’ fees as an element of damages.”139 Courts have found bad faith for the conduct of litigation “where parties have unnecessarily prolonged or delayed litigation, falsified records or knowingly asserted frivolous claims.”140 To find bad faith, a party must have acted in 136 D.I. 30, at 28-31. 137 D.I. 37, at 25-29. 138 Brice v. State, Dep’t of Correction, 704 A.2d 1176, 1179 (Del. 1998) (citations omitted). 139 Hardy v. Hardy, 2014 WL 3736331, at 18 (Del. Ch. July 29, 2014). 140 Kaung v. Cole Nat. Corp., 884 A.2d 500, 506 (Del. 2005) (quoting Johnston v. Arbitrium (Cayman Islands) Handels AG, 720 A.2d 542, 546 (Del. 1998)) (internal quotation marks omitted); see also RBC Capital Markets, LLC v. Jervis, 129 A.3d 816, 877 (Del. 2015) (citation omitted). 29 subjective bad faith, which “involves a higher or more stringent standard of proof, i.e., ‘clear evidence.’”141 It is evident that Hastings feels strongly about the sale of the Properties,142 but the evidence does not show that his actions prior to litigation were so egregious as to justify awarding attorneys’ fees as damages,143 or that he acted for oppressive reasons, unnecessarily delayed the litigation, or knowingly asserted frivolous contentions, during litigation. Thus, I conclude that the high standard for awarding attorneys’ fees for bad faith has not been met here and recommend that the Court decline to award attorneys’ fees to HFH in this matter. IV. CONCLUSION For the reasons stated above, I recommend that the Court grant Plaintiff Hastings Funeral Home, Inc.’s motion for summary judgment and deny Defendant Charles W. Hastings’ cross-motion for summary judgment, and direct that Defendant sell the Properties located at 19 South Main Street and 24 South Main Street, Selbyville, Delaware to Plaintiff. I recommend that the Court conclude that the sale price for the Properties is $850,000.00 and that, beginning as of January 25, 2021, prejudgment interest at the legal rate should be added to the sale price, 141 Arbitrium (Cayman Islands) Handels AG v. Johnston, 705 A.2d 225, 232 (Del. Ch. 1997), aff’d, 720 A.2d 542 (Del. 1998) (citations omitted). 142 See D.I. 30, Ex. J. 143 Hastings states that he was proceeding pro se prior to litigation. D.I. 37, at 28. 30 and the rent paid by HFH to Hastings on the Properties should be subtracted, to determine the final amount of sale proceeds to be exchanged for the transfer of the Properties between the parties. I further recommend that the Court decline to award attorneys’ fees to either party. This is a final report, and exceptions may be taken under Court of Chancery Rule 144. The parties shall submit an implementing order (reflecting reductions for rent and additions for interest) within 15 days of this report becoming final, and the sale of the Properties shall take place within 45 days after the implementing order is entered. /s/ Patricia W. Griffin Master Patricia W. Griffin 31	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483646/	NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). 2022 IL App (3d) 220248-U Order filed November 14, 2022 ____________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS THIRD DISTRICT 2022 In re A.A., ) Appeal from the Circuit Court ) of the 12th Judicial Circuit, a Minor ) Will County, Illinois, ) (The People of the State of Illinois, ) ) Appeal No. 3-22-0248 Petitioner-Appellee, ) Circuit No. 18-JA-153 ) v. ) ) Mohammed A., ) Honorable ) John J. Pavich, Respondent-Appellant). ) Judge, Presiding. ____________________________________________________________________________ JUSTICE HAUPTMAN delivered the judgment of the court. Presiding Justice O’Brien and Justice McDade concurred in the judgement ____________________________________________________________________________ ORDER ¶1 Held: The circuit court’s unfitness and best interest findings are not contrary to the manifest weight of the evidence. Respondent received due process of law during the parental rights termination proceedings. ¶2 Respondent, Mohammed A., appeals from the Will County circuit court’s order terminating his parental rights to A.A. Respondent argues: (1) the court’s unfitness finding was against the manifest weight of the evidence; (2) the court’s finding that termination of respondent’s parental rights was in the best interest of A.A. was contrary to the manifest weight of the evidence; and (3) his due process rights were violated. We affirm. ¶3 I. BACKGROUND ¶4 On September 5, 2018, the State filed its original petition for adjudication of wardship alleging A.A., born June 24, 2015, was neglected due to an environment injurious to her welfare pursuant to section 2-3(1)(b) of the Juvenile Court Act of 1987 (Act) (705 ILCS 405/2-3(1)(b) (West 2018)). The petition listed A.A.’s mother as Ravay M., and father as Eduardo D. The petition alleged that there was “ongoing domestic violence in the home.” 1 That same day, however, the State was granted leave to amend the petition on its face to name respondent as the father. The amended petition was identical to the first except that Eduardo’s name was struck out and respondent’s name was handwritten onto the petition. Also handwritten under the “Residence” heading was “Florida” and the following notations located at the bottom of the first page: “Not on BC” and “No VAP.” 2 ¶5 The matter proceeded to a shelter care hearing. An order following the shelter care hearing established that the court found probable cause to believe that A.A. was neglected and her “parents have a history of domestic violence.” The order directed the parties to cooperate with the Department of Children and Family Services (DCFS). ¶6 On September 14, 2018, the State filed an affidavit to support notice by publication and a notice of publication, which generally provided that upon diligent inquiry, respondent’s whereabouts or place of residence was unknown, such that service in person or by mail was 1 A report from Lutheran Child and Family Services indicated that there was a physical altercation between Ravay and Eduardo. While in a car with the children, Eduardo hit and kicked Ravay. Ravay then broke a beer bottle over Eduardo’s head and stabbed him with the broken glass. Both parents required medical attention and were subsequently charged with domestic battery. 2 The parties seem to agree that these indicate that respondent was not on the birth certificate and had not voluntarily acknowledged paternity. 2 impossible. Respondent was provided notice by publication. On that same date, the court’s docket reflects that the matter was before the court on a “Re-Shelter Care Hearing” and, by stipulation of the parties, the court found probable cause for neglect and that the environment was injurious to A.A.’s welfare. ¶7 On September 18, 2018, a summons, with an attached affidavit identifying a specific address in Florida, was filed directing respondent to appear and answer the amended petition on November 14, 2018. On September 21, 2018, a certificate of publication was filed, which included copies of the published notice to respondent. ¶8 On November 14, 2018, the cause came before the court for status regarding service on respondent. Though no transcript of the hearing is included in the record on appeal, the court found respondent in default for failing to appear. The case was continued for an adjudicatory hearing on December 11, 2018. ¶9 On that date, the court conducted an adjudicatory hearing. Although respondent was not present, the court adjudicated A.A. neglected in that her environment was injurious to her welfare due to a history of domestic violence between Ravay and Eduardo. The order provided that respondent remained in default. ¶ 10 A dispositional report filed by Lutheran Child and Family Services (agency) on December 26, 2018, by caseworker Erica Hall provided that respondent was A.A.’s biological father. The report did not indicate what proof established respondent’s paternity. During an October 11, 2018, telephone conversation, Hall informed respondent of his parental rights. Respondent stated that he was aware of the juvenile proceeding and “was allowing [Ravay] to handle the situation to get their [child] back in [Ravay’s] care.” Respondent asked how A.A. was doing and if she was “safe with her current placement.” Hall told respondent that A.A. was doing 3 well. Respondent indicated that he “could not come to Illinois at this time.” According to Hall, respondent declined to participate in an integrated assessment. ¶ 11 Hall attempted to reach respondent via telephone on three additional occasions in November and December 2018 and left him voicemails. The report noted that little was known about respondent’s parenting capacity, mental health, or other relevant factors as respondent was not available to participate in the integrated assessment, was residing in Florida, and could not be contacted at the time of the assessment. ¶ 12 On January 9, 2019, respondent failed to appear at a dispositional hearing where A.A. became a ward of the court. The court stated that “[v]isitation by [respondent] is suspended until such time as he presents himself either to the Court or to the agency to engage in services.” The court’s written dispositional order further memorialized that respondent was not engaged in services and remained in default. ¶ 13 An April 10, 2019, permanency review report stated that respondent had contacted Hall on January 15, 2019, to inquire about A.A.’s wellbeing. At that time, respondent indicated that he was not interested in being assessed for services so long as Ravay was working toward A.A.’s return home. The report further provided that respondent was not currently participating in any services or visitation. While a permanency hearing was held on April 25, 2019, respondent was not present and the “Order Following Permanency Hearing” entered made no reference to respondent. ¶ 14 An October 7, 2019, permanency review report stated that respondent contacted the agency in June 2019, and expressed interest in working toward a goal of return home for A.A. However, the conversation was hindered due to a language barrier. The report indicated that Hall was attempting to obtain an interpreter for a second integrated assessment. Respondent said that 4 he planned on attending court on October 21, 2019, for the next scheduled permanency hearing. Hall recommended that a DNA test be ordered because respondent was requesting visitation but was not listed on A.A.’s birth certificate. ¶ 15 Respondent appeared in court for the first time on October 21, 2019, with his counsel who had just been appointed at that court appearance. The court entered an “Order Following Permanency Hearing” finding that respondent had not made reasonable efforts or progress and, inter alia, continued the cause for status “on father [respondent] services, IA, DNA” to November 22, 2019. The court also ordered that an Arabic interpreter be present for the next hearing. ¶ 16 On November 22, 2019, the court ordered the “report & service plan” to be filed on April 14, 2020. Throughout 2020, the cause was continued several times for, inter alia, status on respondent’s services, an integrated assessment, and DNA testing. During this period, no integrated assessment or DNA testing was conducted and no services were recommended. ¶ 17 A June 25, 2020, permanency review report stated that the agency had yet to receive any record that respondent completed a DNA test and had been unable to reschedule respondent’s integrated assessment due to issues with contacting respondent. The report related that between December 2019 and March 2020, five attempts were made to schedule an integrated assessment, and that the agency had not heard from respondent since March 2020. Respondent was present at a permanency review hearing that same day with counsel and an interpreter. Counsel explained that no DNA test was ordered because respondent was instructed “to do it through family court.” Counsel further explained that it was difficult for respondent to coordinate the DNA test because A.A. did not currently reside in Will County and respondent resided in Florida. Respondent also alleged that he attempted to contact the agency on many occasions to no avail. The court 5 deferred any finding regarding respondent’s progress as it appeared confusion existed as to respondent’s contact with the agency. ¶ 18 On August 24, 2020, the State filed a motion to terminate respondent’s parental rights, alleging respondent was the putative father. The motion alleged that respondent was unfit in that he failed to (1) maintain a reasonable degree of interest, concern, and responsibility as to A.A.’s welfare (750 ILCS 50/l(D)(b) (West 2020)); (2) make reasonable efforts to correct the conditions which were the basis for A.A.’s removal during the nine-month period from December 11, 2018, through September 11, 2019 (id. § 1(D)(m)(i)); and (3) make reasonable progress toward the return following adjudication during the nine-month period from December 11, 2018, through September 11, 2019 (id. § l(D)(m)(ii)). Multiple summonses were sent to respondent regarding the motion to terminate, however, the certified mail was returned. Thereafter, the State filed an “Affidavit to Support Notice by Publication” and on December 11, 2020, a certificate of publication was filed. ¶ 19 A December 16, 2020, permanency review report provided that when respondent appeared in court on June 25, 2020, he indicated he wanted to engage in services. Caseworker Erik Morgan informed respondent that he still needed to complete the integrated assessment. Morgan attempted to follow up with respondent after the hearing but never heard from him. Though no transcript is included in the record on appeal, the court entered an order that same day indicating that respondent was present at the permanency review hearing with counsel and an interpreter. The court found that respondent had not made reasonable efforts or progress. ¶ 20 After several continuances, on June 11, 2021, the matter proceeded to the fitness portion of the State’s motion to terminate parental rights. Respondent was present with counsel and was assisted by an interpreter. The State called Morgan to testify. Morgan testified that during the 6 pendency of the case, there was periodic contact by telephone with respondent. Respondent did not complete an integrated assessment between December 11, 2018, and September 11, 2019. Despite the agency’s instructions to do so, respondent never took the requisite steps to establish his paternity. Respondent had no contact with A.A. since the proceedings were initiated. ¶ 21 On cross-examination, Morgan testified that he became the assigned caseworker in October 2020, though the proceedings began in September 2018. As such, portions of Morgan’s testimony stemmed from his recollection of the casefile. Morgan agreed that he had contact with both respondent and respondent’s counsel about obtaining a DNA test. Morgan had no knowledge of any further effort on respondent’s behalf to obtain a test and stated that he would have cooperated with obtaining A.A.’s DNA if counsel had petitioned for it. Respondent was unable to have visitation with A.A. because he had not established paternity. Morgan acknowledged that respondent’s difficulties with completing certain tasks were partially due his out-of-state residency but noted “it’s been over two years.” Respondent obtained an integrated assessment on January 4, 2020. The assessment did not recommend any services until respondent established paternity, though Morgan recommended respondent have therapy with A.A. Morgan was unaware of any problems respondent had with alcohol or domestic violence. ¶ 22 On re-direct examination, Morgan testified that respondent had offered no proof of any attempt to establish his paternity during the period from December 11, 2018, through September 11, 2019. Morgan explained DCFS would not offer services to a purported father until paternity was established. Respondent sent a text message to Morgan in January or February 2021 and inquired about obtaining a DNA test. Morgan informed respondent that he needed to coordinate with his attorney to obtain a DNA test. At the conclusion of Morgan’s testimony, the court took judicial notice of the April 25, 2019, October 21, 2019, June 25, 2020, and December 16, 2020, 7 permanency review orders and its assessments of respondent’s progress on those dates. Following argument, the court took the matter under advisement. ¶ 23 On June 17, 2021, the State filed a motion to reopen proofs, alleging several documents were admitted during Ravay’s testimony at the June 11, 2021, fitness hearing that were never tendered to the State. Additionally, the State requested that the agency supervisor, Natalie Bauer, be allowed to testify. The court granted the State’s motion over objection. ¶ 24 A permanency review report filed on December 23, 2021, provided that while respondent had completed an integrated assessment, he had not completed any services or verified his paternity. On the same date, a DCFS family service plan was filed. The plan stated that respondent failed to obtain a DNA test despite being advised in 2019 that he needed to petition the family court for a test. The plan recommended that respondent engage in parent education and coaching specific to A.A.’s mental health needs but that such services could not commence until paternity was established. ¶ 25 On December 27, 2021, respondent filed a petition seeking temporary parenting time. On January 27, 2022, respondent filed a petition to establish parentage and allocate parental responsibilities. The petition alleged, inter alia, that respondent was A.A.’s father pursuant to the attached voluntary acknowledgement of parentage. ¶ 26 On February 9, 2022, the parties resumed the termination proceeding. Respondent’s counsel informed the court that since termination of parental rights was at issue, the record should formally establish that respondent was A.A.’s father. Respondent was sworn in and testified that A.A. had been born during his relationship with Ravay, though the couple never married. Respondent admitted that he was A.A.’s biological father. The court accepted respondent’s admission of paternity. 8 ¶ 27 Bauer testified that she had been involved in the case since September 2018. Bauer indicated that the case originated based on “[a]llegation 60(b), which was risk of harm. There was a domestic violence incident between * Ravay, and [Eduardo].” The domestic violence incident did not involve respondent. Respondent was asked to participate in an integrated assessment at the beginning of the case but failed to do so, stating that he would let Ravay handle the case. Respondent called the agency in January 2019 and wanted to know how Ravay was progressing. Respondent was told the agency could not disclose information about Ravay and was again offered an opportunity to participate in an integrated assessment and services. Respondent was not interested at that time and did not contact the agency again until July 2019, at which time he indicated a willingness to complete an integrated assessment. A caseworker began an assessment with respondent but respondent stated that he could not continue because he needed an interpreter. Thereafter, there was no communication with respondent until October 2019, when respondent appeared in court for the first time. At this time, the court informed respondent of his need to establish parentage. ¶ 28 Bauer testified that she had to reschedule an integrated assessment to be completed in December 2020. Thereafter, Bauer unsuccessfully tried to contact respondent to reschedule on several occasions. Respondent called in March 2020 and arranged to participate in an integrated assessment. However, when Bauer called respondent at the prearranged time, respondent did not answer. When respondent called back, he told Bauer that he was at work and could not complete the assessment. Bauer did not hear from respondent before the June 2020 court date. ¶ 29 On cross-examination, Bauer stated that there was no history of violence, criminal activity, or drug and alcohol usage in respondent’s background, nor did respondent present A.A. with an environment injurious to her welfare. Bauer noted that respondent did not indicate that 9 he wished to establish paternity until one year and two months into the case. Bauer opined that respondent neglected A.A. by showing no interest in her case from September 2018 through July 2019, failing to call on birthdays and holidays, call the agency to check on her, or request to speak to A.A.’s foster parents. During the relevant nine-month period, respondent made “very minimal efforts” as far as facilitating A.A.’s return home. Bauer also noted that respondent did not admit that he was A.A.’s father until the termination hearing, nearly four years after A.A. was taken into shelter care. ¶ 30 Respondent’s counsel called Ravay to testify. Ravay stated that A.A. lived with respondent in Florida from when she was born in 2015 until 2017. Ravay believed respondent was a good parent but provided that respondent never said he wanted to have anything to do with A.A. Respondent was able to tend to A.A.’s needs and sent monthly financial support payments. Ravay opined that respondent was a fit parent that maintained a reasonable degree of interest in A.A.’s wellbeing. ¶ 31 On cross-examination, Ravay clarified that she lived with respondent during the years that A.A. resided in Florida. Ravay agreed she had lost custody of A.A. in September 2018 and had no visits since 2019. Thus, anything she learned about A.A. since that time was through a third-party source. ¶ 32 Respondent testified that he resided in Florida and was employed as a butcher. Respondent believed his income was sufficient to support his household and testified that he provided A.A. with financial support. Respondent provided for all of A.A.’s needs during the first three years of her life. Respondent kept in daily contact with A.A when she moved with Ravay. Respondent bought toys for A.A. and tried to give her an iPad so that they could share photographs. However, the agency would not accept the gift. Respondent tried to see A.A., but 10 alleged the agency prevented him from doing so. Respondent testified that he never behaved in a manner that would have rendered him an unfit parent during the relevant time period. However, respondent, perhaps mistakenly, answered “[y]es” when asked whether he failed to maintain interest or contact with A.A. during the relevant time period. Respondent subsequently indicated that he maintained contact with A.A. when she and Ravay moved to Illinois. Respondent said that he contacted A.A. via video and called Ravay “[e]very day” after they moved. ¶ 33 Respondent parroted much of Bauer’s testimony concerning the scheduling issues related to his integrated assessment, though respondent maintained that he called the agency several times per week but was unable to get through. Respondent left messages and voicemails that were not always returned. Respondent claimed he was present at every court date. Respondent wanted custody of A.A. and wished to provide for her financial and psychological needs. Respondent was willing and prepared to complete court-ordered services. ¶ 34 On cross-examination, respondent testified that he had not seen A.A. in person since 2017. Respondent never traveled to Illinois to visit A.A. A caseworker informed respondent of the instant proceedings at the inception of the case. Respondent claimed he reached out to A.A.’s foster family to check on A.A. Despite being aware that a series of court dates would ensue after September 2018, respondent did not attend court until June 2019. Respondent denied being informed by the court that he needed a DNA test, instead testifying that the court told him the opposite. Similarly, respondent stated that his attorney told him he needed a DNA test but subsequently told respondent he did not. ¶ 35 The State recalled Bauer, who testified that agency personnel was always available for a concerned parent regarding issues with their child’s case. Bauer recalled that respondent wanted to give A.A. an iPad, but Bauer did not feel comfortable holding on to it to give to A.A. because 11 of how expensive it was. Bauer refuted respondent’s claims of his frequent attempts to contact the agency. ¶ 36 Following the close of evidence and the arguments of the parties, the court took the matter under advisement. On March 23, 2022, the court found by clear and convincing evidence that respondent was unfit in that he failed to (1) maintain a reasonable degree of interest, concern, and responsibility as to A.A.’s welfare, and (2) make reasonable progress toward A.A.’s return during the relevant time period. The court reasoned that respondent failed to complete an integrated assessment, maintain consistent contact with the agency, complete any services, take steps to establish his paternity, and visit A.A. or call to check on her during the relevant time period. ¶ 37 On May 12, 2022, the court conducted the best interest portion of the termination proceeding. Child Appointed Special Advocates volunteer Sarabeth Butler testified that A.A. was six years old at the time of the hearing. A.A. and her sibling were placed with foster parents Luke and Alexa Bell. A.A. had been in the Bell’s home since July 2019. The Bell’s three biological children also resided in the home. Butler observed A.A. within the home monthly and described the home as loving and stable. A.A. had been diagnosed with attention deficit hyperactivity disorder (ADHD) and expressive language disorder. A.A. was in therapy and took medication for the disorders. The Bells expressed interest in adopting A.A. Butler recommended that A.A. be adopted by the Bells. ¶ 38 On cross-examination, Butler testified that she had visited A.A. approximately 24 times and had not observed disciplinary issues. Butler had never been contacted by respondent in any manner. Butler described the foster home as clean and A.A. as appropriately dressed. A.A. has her own, well-furnished bedroom, and appropriate toys, books, and other items. 12 ¶ 39 Luke testified that A.A. had been with the family since July 2019. The Bells wished to adopt A.A. and her sibling. ¶ 40 On cross-examination, Luke testified that he was employed as a teacher and made a salary of approximately $56,000 per year in addition to Alexa’s comparable salary. The Bells provide for A.A.’s physical needs, safety, and housing. Luke described A.A.’s special needs and that he is actively involved in attending to her educational needs. A.A. expressed to the Bells that she wanted to remain with the family permanently. Luke testified that A.A. has visits with her other siblings sporadically. A.A. participates in tumbling, dance, and soccer, and attends a local Christian church. ¶ 41 Morgan testified that he visited the Bell’s home every month. Morgan described the home as loving and observed the children playing frequently. A.A. calls the Bells mom and dad. The Bells treat A.A. the same as their biological children. Morgan did not believe A.A. was old enough to opine on where she would like to be placed permanently. ¶ 42 Respondent’s counsel called respondent to testify. Respondent lived in Florida, where his mother and sister also reside. Respondent said that his mother and sister are available to assist respondent if he had custody of A.A. Respondent recounted his employment as a butcher and described his residence as a two-bedroom apartment. Respondent had resided at the apartment for four years. Respondent earned $1000 per week and testified that he was able to support A.A. Respondent was a practicing Muslim and attended mosque weekly. Respondent stated that he used neither drugs nor alcohol and had no criminal record. ¶ 43 Respondent recounted that A.A. lived with him from 2015 to 2017. Respondent did not object to Ravay moving to Illinois with A.A. because he believed he would still see her. After A.A. left, respondent saw A.A. on FaceTime weekly and came to Illinois to visit A.A. three or 13 four times prior to the instant case. Respondent testified that he traveled to Illinois 14 times to participate in the instant proceedings. Respondent attempted to contact A.A.’s foster parents on one occasion but the agency would not allow contact. Respondent also had difficulty contacting the agency, stating that he called and tried to leave voicemails on more than 40 occasions. ¶ 44 Respondent wished for A.A. to reside with him and stated that he would take the requisite steps to retain custody of A.A. Respondent would provide A.A. with a loving, stable home, address A.A.’s special needs, ensure she received proper schooling, and foster A.A.’s religious upbringing. Respondent would not consent to A.A.’s adoption. At the conclusion of the hearing, the court took the matter under advisement. ¶ 45 On May 18, 2022, the court found by a preponderance of the evidence that it was in A.A.’s best interest to terminate respondent’s parental rights. The court found that while respondent loved A.A., he had had minimal interaction with her over the last several years. In contrast, the court found that a strong bond had developed between A.A. and her foster family and that A.A. deserved the permanency of a loving and supporting family. The court appointed DCFS as guardian and custodian of A.A. with the authority to consent to A.A.’s adoption. Respondent appeals. ¶ 46 II. ANALYSIS ¶ 47 A. Fitness ¶ 48 Respondent argues that the circuit court’s unfitness finding was against the manifest weight of the evidence. Respondent contends that the court did not enter an order adjudicating A.A. neglected by respondent prior to the December 11, 2018, to September 11, 2019, time frame cited in the State’s termination petition. Respondent further argues that Bauer testified that he was never indicated for “[a]llegation 60(b), which was risk of harm. There was a domestic 14 violence incident between * Ravay, and [Eduardo].” Additionally, respondent maintained a reasonable degree of interest as to A.A., but his efforts were hindered by the agencies supervising A.A. ¶ 49 Parental rights termination proceedings are initiated by the filing of a termination petition pursuant to the provisions of the Act. 705 ILCS 405/2-13 (West 2020). Thereafter, a parent’s rights may be terminated upon clear and convincing evidence that the parent is unfit under any of the grounds enumerated in section 1(D) of the Adoption Act. In re D.D., 196 Ill. 2d 405, 417 (2001); 750 ILCS 50/1(D) (West 2020). To warrant an unfitness finding, the State must show that the parent is unfit during any nine-month time period after an adjudication of abuse or neglect. 750 ILCS 50/1(D)(m) (West 2020). A court need only find one of the grounds alleged in the State’s petition to find a parent unfit. In re Gwynne P., 215 Ill. 2d 340, 349 (2005). A court’s fitness determination will not be reversed on appeal unless the ruling is against the manifest weight of the evidence. Id. A ruling is against the manifest weight of the evidence where the opposite conclusion is clearly evident. Id. ¶ 50 In this case, the State alleged that respondent was unfit due to the following three grounds: (1) failure to maintain a reasonable degree of interest, concern, or responsibility as to A.A.’s welfare; (2) failure to make reasonable efforts to correct the conditions that were the basis for the removal of A.A. during the period of December 11, 2018, to September 11, 2019; and (3) failure to make reasonable progress toward the return of A.A. within nine months after an adjudication of neglected or abused minor, that period being December 11, 2018, to September 11, 2019. See 750 ILCS 50/1(D)(b), (D)(m)(i), (D)(m(ii) (West 2020)). ¶ 51 From our review, the evidence at the unfitness hearing clearly and convincingly established that respondent failed to maintain a reasonable degree of interest, concern, or 15 responsibility. Respondent testified that he had not had contact with A.A. since September 2018 and had not travelled to Illinois to visit A.A. since 2017. For nearly the first three years of this case, respondent did not complete the integrated assessment, a necessary step to obtain his service plan and make reasonable progress. Respondent also took no steps to establish paternity before the 2022 termination hearing began. Instead, respondent originally showed disinterest in the proceedings as he initially indicated to the agency that he did not want to participate because he was allowing Ravay to handle the case. It was not until the October 21, 2019, hearing, more than one year after the wardship petition was filed, that respondent attended a court hearing. Notably, respondent did not attempt to establish paternity early on in the case to enable him to obtain a service plan and possible visitation with A.A. As indicated by Bauer’s testimony and numerous reports, respondent only inquired as to how A.A. was doing in her foster placement twice—October 2018 and January 2019. Respondent did not attempt to contact A.A. or request to speak with the Bells. ¶ 52 During the termination hearing, respondent testified that he had provided financial support for A.A. after she and Ravay moved to Illinois from Florida. However, the record is unclear as to the amount of financial support respondent provided. Additionally, there is no indication that respondent continued to send financial support after the State filed the wardship petition in September 2018. Instead, the only evidence that respondent provided financial support or gifts for A.A. after the beginning of this case was his attempt to give to the agency an iPad to enable him to communicate with A.A. Ultimately, the agency refused to accept this gift, and respondent made no additional attempts to provide gifts through the agency for A.A. or other financial support. Standing alone, respondent’s single attempt to give A.A. an iPad is insufficient to establish a reasonable degree of interest or concern. 16 ¶ 53 We note that between September 2018 and October 2019, the record establishes that respondent’s address and unfamiliarity with the English language were relatively unknown barriers to his participation in the proceedings. These issues very likely created impediments to respondent’s ability to exhibit concern and make progress. After all, the agency did not seek the use of an Arabic language interpreter until after its June 2019 telephone call with respondent was ended due to the language barrier. However, these impediments do not completely excuse respondent’s general indifference. Importantly, during this period, respondent was able to ask how A.A. was doing in October 2018 and January 2019. This was the extent of respondent’s expressed concern about A.A. As noted above, respondent did not further inquire about A.A., seek to speak with A.A., or attempt to speak with A.A.’s foster family. Therefore, even after the use of an interpreter, respondent demonstrated minimal concern for A.A. ¶ 54 Given respondent’s initial indifference, delay in establishing paternity and completing the integrated assessment, and lack of expressed concern about A.A., the court’s unfitness finding on this ground was not contrary to the manifest weight of the evidence. Having found that the evidence clearly and convincingly established that respondent failed to maintain a reasonable degree of interest, we need not determine whether respondent made reasonable efforts or progress. ¶ 55 B. Best Interest ¶ 56 Respondent argues the circuit court’s best interest finding was contrary to the manifest weight of the evidence. Respondent points to several of the best interest factors that disfavored terminating his parental rights, including: (1) respondent wanted custody of A.A.; (2) he cared for A.A. for the first two to three years of her life; (3) he has a home for A.A.; (4) he is employed and makes enough money to support himself and A.A.; (5) his sister and mother live near him 17 and would be willing to help care for A.A.; (6) he is religious and attends mosque regularly; (7) he is committed to making sure A.A. receives assistance and/or treatment for her ADHD and language issues; and (8) he is A.A.’s biological father. Respondent also points out that the court failed to consider the instability of the foster care system and that A.A. has been transferred between several homes during the pendency of this case. ¶ 57 Following a finding of parental unfitness, the court’s focus must shift to the child’s interest in “a stable, loving home life.” In re D.T., 212 Ill. 2d 347, 364 (2004). At this stage, the State’s burden of proof lessens to a preponderance of the evidence. Id. at 366-67. When considering whether the termination of parental rights serves the child’s best interest, courts consider: (a) the physical safety and welfare of the child, including food, shelter, health, and clothing; (b) the development of the child’s identity; (c) the child’s background and ties, including familial, cultural, and religious; (d) the child’s sense of attachment; (e) the child’s wishes and long-term goals; (f) the child’s community ties; (g) the child’s need for permanence; (h) the uniqueness of every family and child; (i) the risks attendant to entering and being in substitute care; and (j) the preferences of the persons available to care for the child. 705 ILCS 405/1-3(4.05) (West 2020); In re A.F., 2012 IL App (2d) 111079, ¶ 45. A circuit court’s finding that the termination of parental rights is in the child’s best interest will not be disturbed on appeal unless it is contrary to the manifest weight of the evidence. In re Parentage of J.W., 2013 IL 114817, ¶ 55. ¶ 58 Here, the evidence from the best interest hearing favored terminating respondent’s parental rights. Specifically, A.A.’s foster parents, the Bells, had provided for A.A.’s safety and welfare. A.A. had her own bedroom and was well provided for in the Bell’s home. A.A. had also started to identify as a member of the Bell’s family. By all accounts, A.A. was happy and well- 18 adjusted to her foster family. She referred to the Bells as mom and dad and her foster siblings as brother and sister. According to the caseworkers and Luke, A.A. had a strong bond with her foster family, and the Bells expressed a desire to adopt A.A. and her sibling. A.A. had been with the Bells since July 2019, nearly three years at the time of the termination hearing. A.A. had also developed ties to the community through her school, church, and extracurricular activities. At school, A.A. had an education plan designed to address her ADHD and learning disorder. Finally, the permanence factor weighs heavily in favor of terminating respondent’s parental rights. A.A. spent more than half of her life in foster placements during the pendency of the case. For nearly three years she has been a part of the Bell family and they have expressed a willingness to permanently make her a part of their family. In contrast, respondent has not had a major role in A.A.’s life since she left Florida in 2017. Even before the case began, respondent visited A.A. in Illinois only a couple of times. After the instant case began, respondent only became somewhat involved after the proceedings had been ongoing for a year. Respondent’s on- record participation in this case and testimony did not establish a strong interest in reestablishing strong familial ties with A.A. As noted above, respondent rarely asked how A.A. was doing and waited until very late in the case to seek visitation. Supra ¶ 51. ¶ 59 The only factor weighing against termination were the cultural differences between respondent, a devout Muslim, and the Bells, who were taking A.A. to their Christian church. However, there was no indication in the record that A.A. was being raised as a Muslim before the case began. Therefore, the court’s best interest finding and termination of respondent’s parental rights were not contrary to the manifest weight of the evidence. ¶ 60 C. Due Process ¶ 61 Respondent raises a general argument that he was denied due process of law. 19 ¶ 62 Parents have a fundamental liberty interest in maintaining a parental relationship with their children. In re Vanessa C., 316 Ill. App. 3d 475, 481 (2000); In re J.J., 201 Ill. 2d 236, 267 (2002). However, in limited circumstances, the State may interfere with a parent’s fundamental right when it becomes necessary to protect the health, safety, and welfare of the children. In re D.T., 2017 IL App (3d) 170120, ¶ 23. Ultimately, due process is achieved in this context through compliance with the Act and fundamental fairness. Id. “In juvenile proceedings, due process requires adequate notice of the proceedings to a minor and his parents.” In re E.S., 324 Ill. App. 3d 661, 669 (2001). If a pleading fails to name and notify the necessary respondent, it fails to invoke the jurisdiction of the court and renders its subsequent orders void. Id. Appellate courts review potential due process violations de novo. In re J.M., 2020 IL App (2d) 190806, ¶ 37. ¶ 63 To the extent that respondent contends that the court violated his right to due process when it found him in default for not appearing at the initial dispositional hearing on January 8, 2019, we find that we do not have jurisdiction to consider this issue. Because a dispositional order is a final order (see In re M.J., 314 Ill. App. 3d 649, 655 (2000)), respondent had 30 days from the January 8, 2019, order to file a notice of appeal. As respondent did not file a notice of appeal during this 30-day period, this court does not have jurisdiction to consider the circuit court’s prior order. See In re Ay. D., 2020 IL App (3d) 200056, ¶ 38. ¶ 64 We further find that the court did not infringe on respondent’s right to procedural due process. Procedural due process requires that respondent: (1) receive notice of the proceedings; and (2) have an opportunity to be heard. In re D.M., 2020 IL App (1st) 200103, ¶ 39 (citing In re D.P., 319 Ill. App. 3d 554, 558 (2001)). The record conclusively establishes that respondent received notice of the proceedings as he was informed by the caseworker and was served with summons. Approximately one year into the case, respondent appeared for a hearing. In total, 20 respondent appeared for 14 proceedings, including the termination hearings. Thus, respondent received notice and was provide multiple opportunities to be heard during the proceedings. ¶ 65 III. CONCLUSION ¶ 66 The judgment of the circuit court of Will County is affirmed. ¶ 67 Affirmed. 21	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483647/	[Cite as State v. Geib, 2022-Ohio-4037.] STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF MEDINA ) STATE OF OHIO C.A. Nos. 21CA0019-M 21CA0020-M Appellee 21CA0021-M v. JONATHAN GEIB APPEAL FROM JUDGMENT ENTERED IN THE Appellant MEDINA MUNICIPAL COURT COUNTY OF MEDINA, OHIO CASE Nos. 20 CRB 00955 20 CRB 00956 20 CRB 00857 20 CRB 00858 DECISION AND JOURNAL ENTRY Dated: November 14, 2022 HENSAL, Judge. {¶1} Jonathan Geib appeals his convictions from the Medina Municipal Court. For the following reasons, this Court affirms. I. {¶2} In three separate cases, Mr. Geib was charged with a total of two counts of criminal mischief, two counts of assault, one count of disorderly conduct, and one count of sexual imposition. All the counts involved the same victim and were set for trial together. The original trial date was converted to a change of plea hearing, but at the hearing Mr. Geib decided not to change his plea. His counsel subsequently withdrew from the matter. The municipal court reset the trial date, advising that it would not reschedule the trial again. New counsel entered an appearance for Mr. Geib but withdrew a month later, alleging that he had done so by mistake. At 2 a pretrial hearing eight days before the trial date, the municipal court appointed new counsel for Mr. Geib. That attorney moved for a continuance, arguing that he needed to conduct more discovery to be prepared for trial. A fourth attorney also entered a conditional notice of appearance, indicating that he would take over as counsel if the municipal court granted a continuance. The municipal court denied the written motion for continuance, however, and oral motions that Mr. Geib made before voir dire and opening statements. {¶3} All the charges except the disorderly conduct one were tried to a jury. It found Mr. Geib guilty of one count of assault and one count of criminal mischief. The municipal court found him guilty of the disorderly conduct count and sentenced him to a total of 105 days in jail. Mr. Geib has appealed, assigning two errors. II. ASSIGNMENT OF ERROR THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN IT WOULD NOT GRANT APPELLANT A CONTINUANCE FOR ADDITIONAL TIME FOR NEWLY APPOINTED COUNSEL TO PREPARE FOR TRIAL. {¶4} In his first assignment of error, Mr. Geib argues that the municipal court should have granted his motion for continuance to allow his appointed counsel time to prepare for trial. “The grant or denial of a continuance is a matter that is entrusted to the broad, sound discretion of the trial judge.” State v. Unger, 67 Ohio St.2d 65 (1981), syllabus. Accordingly, this Court “will not reverse a trial court’s decision absent a showing of an abuse of discretion.” State v. Chambers, 9th Dist. Wayne No. 17AP0032, 2018-Ohio-5050, ¶ 17. An abuse of discretion “implies that the court's attitude is unreasonable, arbitrary or unconscionable.” Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). When applying an abuse of discretion standard, a reviewing court may not simply substitute its own judgment for that of the trial court. Chambers at ¶ 17. 3 {¶5} In Unger, the Ohio Supreme Court explained that “[t]here are no mechanical tests for deciding when a denial of a continuance is so arbitrary as to violate due process. The answer must be found in the circumstances present in every case, particularly in the reasons presented to the trial judge at the time the request is denied.” Id. at 67, quoting Ungar v. Sarafite, 376 U.S. 575, 589 (1964). Among the factors the court should consider are: the length of the delay requested; whether other continuances have been requested and received; the inconvenience to litigants, witnesses, opposing counsel and the court; whether the requested delay is for legitimate reasons or whether it is dilatory, purposeful, or contrived; whether the defendant contributed to the circumstance which gives rise to the request for a continuance; and other relevant factors, depending on the unique facts of each case. Id. at 67-68. “This Court examines the same factors in its review of the municipal court’s decision relative to the motion for continuance.” State v. Robinson, 9th Dist. Lorain No. 19CA011495, 2020-Ohio-4502, ¶ 25, quoting R.H. v. J.H., 9th Dist. Medina No. 18CA0115-M, 2020-Ohio-3402, ¶ 7. {¶6} Mr. Geib filed a written motion for continuance indicating that he wanted to continue the trial so that he could obtain police reports and other materials pertaining to one of the witnesses because they would challenge her credibility. He noted that his present counsel had only been recently appointed and argued that counsel would not be able to obtain the documents in time for trial. Mr. Geib also explained that his counsel was seeking to withdraw because their relationship had deteriorated. {¶7} In denying Mr. Geib’s written motion, the municipal court noted that Mr. Geib had presented two bases for his requested continuance: his request for additional discovery and his counsel’s motion to withdraw. The court noted Unger and all its factors. After describing the history of the case, including the fact that Mr. Geib’s counsel had been appointed only six days earlier, the court concluded that the Unger factors did not justify another continuance. It explained 4 that Mr. Geib had not set forth any specific time period for the continuance, that Mr. Geib’s conduct had resulted in protracting the case, that Mr. Geib had previously been granted time to engage counsel, that he had terminated two attorneys in close proximity to the trial date, that the State had already twice issued subpoenas for its witnesses, and that the Court’s jury trial schedule would require adding undue delay to the case. The court also found that Mr. Geib had not alleged that anything had prevented him from conducting the discovery he was seeking earlier and that, if Mr. Geib’s relationship with his counsel deteriorated within six days, Mr. Geib must have had a hand in it. The court, therefore, inferred that Mr. Geib was purposefully obstructing the progression of the case. The court further found that any prejudice to Mr. Geib was of his own creation. {¶8} At trial, Mr. Geib’s counsel argued that the trial should be continued because he was not prepared to properly and effectively represent Mr. Geib. He also noted that Mr. Geib wished to introduce police reports and other documents regarding one of the witnesses, which he had not been able to obtain. Mr. Geib asserted that his first attorney misled him about the evidence the State had against him and the plea that had been negotiated then refused to continue to represent him when he declined the plea. He alleged that he had called around 30 attorneys to represent him but they were either too expensive or did not want to try a case in Medina County. {¶9} The municipal court found that Mr. Geib’s attorney knew when he accepted representation of Mr. Geib when the trial was scheduled and that the date would not be changed. It found there was still time to issue subpoenas that day. It also found that Mr. Geib had four months to obtain discovery from his first counsel and an additional six weeks to obtain it after the attorney withdrew. It further found that Mr. Geib had not given a credible reason to distrust his appointed counsel. The following day Mr. Geib’s counsel renewed his motion to continue in front 5 of a different judge who was presiding, arguing that he was not prepared to proceed. The court denied the motion, finding that there had been nothing new argued that it had not previously considered. {¶10} Mr. Geib has not cited Unger or discussed any of its factors. Instead, he argues that the municipal court pressured him to go forward even though his counsel was not prepared. He also argues that, if the court had granted the continuance, he could have been acquitted on all the charges instead of only some of them. {¶11} Mr. Geib has not contested the municipal court’s findings that he did not indicate how long of a continuance was necessary, that the trial had previously been continued, that the State had subpoenaed its witnesses multiple times, or that it would be some time before the court could reschedule the case. He has also not contested the court’s finding that he could have obtained discovery earlier or that he contributed to the circumstances that gave rise to his request. In addition, this Court’s review is limited to the record before it, and we cannot presume that the additional discovery would have aided Mr. Geib’s defense. {¶12} Upon review of the record, we conclude that Mr. Geib has failed to establish that the municipal court exercised improper discretion when it denied his motions to continue. Mr. Geib’s first assignment of error is overruled. II. ASSIGNMENT OF ERROR II DEFENDANT-APPELLANT’S TRIAL COUNSEL PROVIDED INEFFECTIVE ASSISTANCE OF COUNSEL IN VIOLATION OF THE SIXTH AMENDMENT TO THE UNITED STATES CONSTITUTION. {¶13} In his second assignment of error, Mr. Geib argues that his trial counsel was ineffective. To prevail on a claim of ineffective assistance of counsel, Mr. Geib must establish (1) 6 that his counsel’s performance was deficient to the extent that “counsel was not functioning as the ‘counsel’ guaranteed the defendant by the Sixth Amendment” and (2) that but for his counsel’s deficient performance the result of the trial would have been different. Strickland v. Washington, 466 U.S. 668, 687 (1984). A deficient performance is one that falls below an objective standard of reasonable representation. State v. Bradley, 42 Ohio St.3d 136 (1989), paragraph two of the syllabus. A court, however, “must indulge a strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance; that is, the defendant must overcome the presumption that, under the circumstances, the challenged action ‘might be considered sound trial strategy.’” Strickland at 689, quoting Michel v. Louisiana, 350 U.S. 91, 101 (1955). In addition, to establish prejudice, Mr. Geib must show that there existed “a reasonable probability that, but for his counsel’s errors, the outcome of the proceeding would have been different.” State v. Sowell, 148 Ohio St.3d 554, 2016-Ohio-8025, ¶ 138. {¶14} Mr. Geib’s argument rests on his trial counsel’s assertion that he was not prepared to effectively represent Mr. Geib because of how soon he was appointed before trial. According to Mr. Geib, his counsel’s lack of adequate time to investigate and prepare affected the outcome of his trial. {¶15} Mr. Geib’s argument is premised on evidence outside the record. Because he was tried in municipal court, Mr. Geib may attempt to introduce such evidence through a motion for relief from judgment under Civil Rule 60(B). State v. Denihan, 11th Dist. Ashtabula No. 2016-A- 0003, 2016-Ohio-7443, ¶ 19; State v. Burner, 1st Dist. Hamilton No. C-180516, 2020-Ohio-2930, ¶ 7-8. This Court cannot determine based on the record before it, however, whether there is a reasonable probability that the additional discovery Mr. Geib alleges could have been obtained 7 would have led to his exoneration on all the charges. We, therefore, overrule Mr. Geib’s second assignment of error. III. {¶16} Mr. Geib’s assignments of error are overruled. The judgment of the Medina Municipal Court is affirmed. Judgment affirmed. There were reasonable grounds for this appeal. We order that a special mandate issue out of this Court, directing the Medina Municipal Court, County of Medina, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27. Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30. Costs taxed to Appellant. JENNIFER HENSAL FOR THE COURT 8 TEODOSIO, P. J. SUTTON, J. CONCUR. APPEARANCES: ERIC HALL, Attorney at Law, for Appellant. J. MATTHEW LANIER, Prosecuting Attorney, for Appellee.	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483655/	[Cite as State v. March-Natali, 2022-Ohio-4061.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY STATE OF OHIO, CASE NO. 2022-T-0022 Plaintiff-Appellee, Criminal Appeal from the - vs - Newton Falls Municipal Court BENJAMIN THOMAS MARCH-NATALI, Trial Court No. 2021 CRB 00476 Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed Chris Crull, City of Newton Falls Prosecutor, 20 South Canal Street, Newton Falls, OH 44444 (For Plaintiff-Appellee). Mary Ellen Ditchey, Urban Co., LPA, 434 High Street, N.E., P.O. Box 792, Warren, OH 44482 (For Defendant-Appellant). MATT LYNCH, J. {¶1} Defendant-appellant, Benjamin Thomas March-Natali, appeals his convictions for two counts of Aggravated Menacing following a bench trial in the Newton Falls Municipal Court. For the following reasons, we affirm the convictions. {¶2} On July 15, 2021, a Complaint was filed charging March-Natali with two counts of Aggravated Menacing, misdemeanors of the first degree in violation of R.C. 2903.21(A). {¶3} On February 8, 2022, the case was tried to the court. The following testimony was given: {¶4} Detective Steve Lyden of the Newton Falls Police Department testified that at about 8:00 p.m., on July 14, 2022, he responded to a reported disturbance at Advance Auto Parts on Milton Boulevard in Newton Falls. En route to the store, Lyden stopped March-Natali’s vehicle which matched the description of the suspect’s vehicle. Lyden recovered an unloaded Taurus handgun that March-Natali had in a hip holster. {¶5} Detective Lyden proceeded to Advance Auto Parts where he took written statements from two store clerks who were present during the disturbance. Each clerk testified at trial regarding his impression of the disturbance. {¶6} Joshua Garvey testified that he was working at Advance Auto Parts when March-Natali came in the store wanting to return a toggle switch. After being told he could not return it, March-Natali raised his shirt exposing a handgun and said, “I bet you will” or “you’re gonna take it back.” Garvey thought the handgun was probably in a holster. March-Natali became angry and hostile. Garvey called the police believing that March- Natali was threatening harm. Then March-Natali left the store. {¶7} Ethan Davenport testified that he was also working at Advance Auto Parts when March-Natali asked to return the toggle switch. Davenport refused to accept the return, and March-Natali “proceeded to make some sort of motion where I [Davenport] saw his weapon tucked into his side of his hip and tell me I am going to return it.” As March-Natali was driving away he stopped, pointed at Davenport’s and Garvey’s vehicles, and mouthed the words, “you better watch out.” Davenport understood March-Natali’s conduct as threatening harm. {¶8} March-Natali testified in his own defense that he only wanted to exchange the toggle switch, not return it. He swore at the clerks but never threatened them. He did 2 Case No. 2022-T-0022 not lift up his shirt but did pull his shorts up because they were falling down. As he was pulling out of the parking lot, he stopped to laugh at the clerks’ trucks because they “were a couple of beaters.” {¶9} The municipal court found March-Natali guilty of both counts of Aggravated Menacing but merged them “under the circumstances of this case.” The court fined March-Natali $500 and sentenced him to 90 days in the Trumbull County Jail; $300 of the fine and the jail sentence were suspended on the condition that he comply with the terms of probation for one year. {¶10} On March 16, 2022, March-Natali filed a Notice of Appeal. On appeal, he raises the following assignments of error: [1.] Defendant’s convictions were against the manifest weight of the evidence. [2.] Trial counsel was ineffective because he failed to: (A) request a separation of witnesses, (B) impeach witnesses, (C) subpoena any video footage of the incident. [3.] Defendant was prejudiced by the refusal of the trial court to grant him separate trials of the two complaints under Crim.R. 14. [4.] Defendant was denied his rights under the Sixth Amendment to self- representation. [5.] Defendant’s due process rights were violated when the State failed to subpoena potentially exculpatory evidence. {¶11} The assignments of error will be considered out of order. {¶12} Under the fourth assignment of error, March-Natali claims that “he voiced his desire to represent himself and there was never a colloquy by the court regarding that issue.” Brief of Defendant-Appellant at 9, citing Faretta v. California, 422 U.S. 806, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975). 3 Case No. 2022-T-0022 {¶13} “The Sixth Amendment, as made applicable to the states by the Fourteenth Amendment, guarantees that a defendant in a state criminal trial has an independent constitutional right of self-representation and that he may proceed to defend himself without counsel when he voluntarily, and knowingly and intelligently elects to do so.” State v. Gibson, 45 Ohio St.2d 266, 345 N.E.2d 399 (1976), paragraph one of the syllabus; Faretta at 819 (the Sixth Amendment “grants to the accused personally the right to make his defense”); Ohio Constitution, Article I, Section 10 (“[i]n any trial, in any court, the party accused shall be allowed to appear and defend in person and with counsel”). {¶14} A defendant must explicitly and unequivocally invoke his right to self- representation before a court is obligated to consider whether the defendant may waive his right to representation by counsel. State v. Cassano, 96 Ohio St.3d 94, 2002-Ohio- 3751, 772 N.E.2d 81, ¶ 39; State v. Obermiller, 147 Ohio St.3d 175, 2016-Ohio-1594, 63 N.E.3d 93, ¶ 30 (“a defendant’s unambiguous assertion of the right to self-representation triggers a trial court’s duty to conduct the Faretta inquiries to establish that the defendant is knowingly and voluntarily waiving his constitutional right to counsel”). {¶15} Where the right to self-representation is invoked after the commencement of trial, “the denial of the right is reviewed under the abuse of discretion standard.” State v. Struble, 11th Dist. Lake No. 2016-L-108, 2017-Ohio-9326, ¶ 35. {¶16} In the present case, March-Natali never explicitly or unequivocally asserted his right to self-representation and, therefore, he waived rather than was denied the right. The nearest thing to the assertion of the right to self-representation in the record is the following from the beginning of the bench trial: The Court: And the defense ready to proceed? 4 Case No. 2022-T-0022 Mr. Zeigler: Yes, Your Honor. March-Natali: Yes. The Court: Any opening statement? March-Natali: Yes. The Court: Your attorney is talking for you. March-Natali: Well, I - - The Court: If you want to talk, Ben, I’ll ask you to speak. Okay? [Prosecutor begins making his opening statement.] The Court: Wait a minute. Wait a minute. There’s a problem, Ben? March-Natali: Well, I was just conversing with my attorney. The Court: Yeah. March-Natali: And he started talking. The Court: Well, I asked him to start talking. I asked you to stop talking. March-Natali: Oh, I didn’t hear you. The Court: Okay. The trial is on now. You’re going to be talking - - Mr. Zeigler is going to be - - he’s representing you. We’ve done this a long time ago. You’ve had prior - - counsel withdrew. Okay. If you have an issue, you can write stuff down for him, but I can’t hear both people at the same time. March-Natali: All right. * Mr. Ziegler: We would move to dismiss any tapes of the - - the videotape - - at the store. It is not offered as evidence. And any audiotape regarding any phone calls are not offered. We move to dismiss for lack of evidence. March-Natali: It’s all hearsay. 5 Case No. 2022-T-0022 Mr. Zeiger: Because it’s all hearsay. The Court: Okay. March-Natali: I mean, you had the tape. * The Court: Hey, Mr. Natali, I’ve got to tell you, Mr. Ziegler knows the Rules of Evidence and the Rules of Procedure. You really should rely on him when he files a motion and if he’s going to file a motion. I’ve heard you argue motions. I’ve heard him argue motions. I can guarantee you he knows more about it than you do. Okay? {¶17} The desire to actively participate in one’s own defense does not rise in the present case to an unambiguous assertion of the right to self-representation. Obermiller at ¶ 29 (“courts must ‘indulge in every reasonable presumption against waiver’ of the right to counsel”) (citation omitted). {¶18} The fourth assignment of error is without merit. {¶19} In the third assignment of error, March-Natali argues that he was prejudiced by the joint trial of his Aggravated Menacing charges in Newton Falls Mun. Case No. CRB-2100476 with a charge of Intimidating a Witness in Newton Falls Mun. Case No. CRB-2100574. {¶20} Subsequent to the filing of the Aggravated Menacing charges, March-Natali was separately charged with Intimidating a Witness wherein it was alleged that he contacted the Advance Auto Parts and claimed to be a detective in order to learn the names and addresses of the store clerks involved in the July 14 incident. Trial on the two sets of charges was originally scheduled on different days. The Intimidating a Witness trial was rescheduled to the same day as the Aggravated Menacing trial because counsel 6 Case No. 2022-T-0022 for March-Natali was ill. Counsel was apparently unaware that the separate charges were then to be tried jointly and moved the court to bifurcate the proceedings at trial. The court assured counsel that it could “separate the charges and the evidence” and inquired if there would be any prejudice from the joint trial. Counsel responded, “I would ask the Court to recess until a later date so that I can fully prepare for the second [Intimidating a Witness] case as well.” The court denied the request. March-Natali was acquitted of Intimidating a Witness. {¶21} “If it appears that a defendant * * * is prejudiced * * * by such joinder for trial together of indictments, informations or complaints, the court shall order an election or separate trial of counts, grant a severance of defendants, or provide such other relief as justice requires.” Crim.R. 14. A trial court’s decision regarding the joinder of offenses is reviewed for abuse of discretion. State v. Ford, 158 Ohio St.3d 139, 2019-Ohio-4539, 140 N.E.3d 616, ¶ 106. {¶22} The present case demonstrates neither prejudice nor an abuse of discretion. In fact, the record (described above) indicates that there was no issue with joinder per se, but that counsel for March-Natali wished to continue trial on the Intimidating a Witness charge in order to have additional time to prepare as he did not anticipate it being tried on the same date as the Aggravated Menacing charges. Inasmuch as March- Natali was acquitted of the Intimidating a Witness charge, it is difficult to imagine how that part of the proceeding prejudiced him with respect to the Menacing charges. {¶23} The third assignment of error is without merit. 7 Case No. 2022-T-0022 {¶24} Under the second assignment of error, March-Natali contends that trial counsel was ineffective for failing to request a separation of witnesses, impeach witnesses, and subpoena video footage of the incident. {¶25} “Counsel’s performance will not be deemed ineffective unless and until counsel’s performance is proved to have fallen below an objective standard of reasonable representation and, in addition, prejudice arises from counsel’s performance.” State v. Bradley, 42 Ohio St.3d 136, 538 N.E.2d 373 (1989), paragraph two of the syllabus; State v. Madrigal, 87 Ohio St.3d 378, 388-389, 721 N.E.2d 52 (2000). With respect to counsel’s performance, the defendant must demonstrate that “counsel made errors so serious that counsel was not functioning as the ‘counsel’ guaranteed the defendant by the Sixth Amendment.” Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). The element of prejudice means “that counsel’s errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable.” Id. “Unless a defendant makes both showings, it cannot be said that the conviction or death sentence resulted from a breakdown in the adversary process that renders the result unreliable.” Id. {¶26} Trial counsel was not ineffective for failing to request a separation of witnesses because counsel did, in fact, request and obtain a separation of witnesses: Mr. Ziegler: Your Honor, I do want to ask for a separation of witnesses in case there’s anybody here who - - The Court: That’ll be granted. All witnesses will have to separate. Sit out in the hallway. You’re not allowed to discuss the case or the testimony. {¶27} With respect to the impeachment of witnesses, March-Natali argues Garvey and Davenport testified at trial that he never brandished the weapon or made direct 8 Case No. 2022-T-0022 threats. In the police report of the incident, however, it is noted that March-Natali showed them the gun and threatened to use it. “Failure to point out the inconsistencies in the testimony of the two store clerks prevented the trier of fact from being able to judge the credibility of the witnesses.” Brief of Defendant-Appellant at 7. {¶28} The police report (in the record but not admitted at trial) fails to substantiate March-Natali’s claims. The written statements by Garvey and Davenport are substantially consistent with their trial testimony, i.e., that, after refusing to accept the return, March- Natali raised his shirt exposing the handgun while insisting that they will “take it back.” Detective Lyden’s narrative provides: “Dispatch advised that a customer, who was in the store, was yelling at employees and showed them a gun he had in his waistband and threatened to use it.” This description of March-Natali’s conduct was provided by dispatch. As to what Lyden was told by Garvey and Davenport, the report states: Ethan advised me that Benjamin came into the store and asked where the toggle switches were. Ethan advised that he pointed Benjamin in the right direction and then Benjamin wanted to return one. Ethan advised that the packaging to the one Benjamin had was destroyed and he could not produce proof of purchase. Ethan advised that he told Benjamin that he could not return it. Ethan advised that Benjamin became very angry and started cussing at both Ethan and Joshua. Ethan advised that Benjamin stated, “You are going to return this,” as he briefly lifted his shirt, revealing what Ethan described as the pistol grip to a gun. Ethan advised that he was not able to tell if the gun was loaded but was afraid for his life and the life of Joshua. Ethan then provided me a written statement. Joshua gave me the same story as Ethan and also provided a written statement. In Ethan’s statement, he also wrote that Benjamin muttered what he believed to have been “watch out.” {¶29} The third purported failure of trial counsel was the failure to subpoena video footage from Advance Auto Parts. At trial, the prosecutor, Detective Lyden, and both store clerks denied that there were either cameras or video of the incident. March-Natali 9 Case No. 2022-T-0022 acknowledges this testimony, but “contends that the store did, in fact, have cameras, contrary to the statements of the store clerks.” In the absence of evidence to support the contention, however, it is of no consequence. {¶30} The second assignment of error is without merit. {¶31} In the fifth assignment of error, March-Natali asserts his due process rights were violated by the State’s failure to produce and/or preserve the video of the incident available from Advance Auto Parts: “A video of this incident would have changed the trajectory of the case, potentially exonerating Defendant.” Brief of Defendant-Appellant at 10. {¶32} As noted above, the insistence that video footage exists is not supported by any evidence in the record and, accordingly, is not grounds for finding error. The fifth assignment of error is without merit. {¶33} The first assignment of error purports to challenge the manifest weight of the evidence, but in substance March-Natali’s position encompasses both the sufficiency and the manifest weight of the evidence. {¶34} The question of whether a conviction is supported by sufficient evidence “invokes a due-process concern and raises the question whether the evidence is legally sufficient to support the jury verdict as a matter of law.” State v. Clinton, 153 Ohio St.3d 422, 2017-Ohio-9423, 108 N.E.3d 1, ¶ 165; State v. Thompkins, 78 Ohio St.3d 380, 386, 678 N.E.2d 541 (1997) (“a conviction based on legally insufficient evidence constitutes a denial of due process”). In reviewing the sufficiency of the evidence, “[t]he relevant inquiry is whether, after viewing the evidence in a light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime proven beyond 10 Case No. 2022-T-0022 a reasonable doubt.” State v. Jenks, 61 Ohio St.3d 259, 574 N.E.2d 492 (1991), paragraph two of the syllabus. {¶35} Whereas “sufficiency of the evidence is a test of adequacy as to whether the evidence is legally sufficient to support a verdict as a matter of law, * * * weight of the evidence addresses the evidence’s effect of inducing belief.” State v. Wilson, 113 Ohio St.3d 382, 2007-Ohio-2202, 865 N.E.2d 1264, ¶ 25, citing Thompkins at 386-387. “[A] reviewing court asks whose evidence is more persuasive—the state’s or the defendant’s?” Id. An appellate court must consider all the evidence in the record, the reasonable inferences, the credibility of the witnesses, and whether, “in resolving conflicts in the evidence, the jury clearly lost its way and created such a manifest miscarriage of justice that the conviction must be reversed and a new trial ordered.” (Citation omitted.) Thompkins at 387. “Since there must be sufficient evidence to take a case to the jury, it follows that ‘a finding that a conviction is supported by the weight of the evidence necessarily must include a finding of sufficiency.’” (Citation omitted.) State v. Heald, 11th Dist. Lake Nos. 2021-L-111 and 2021-L-112, 2022-Ohio-2282, ¶ 19. {¶36} In order to convict March-Natali of Aggravated Menacing, the State was required by prove, beyond a reasonable doubt, that he “knowingly cause[d] another to believe that [he] will cause serious physical harm to the person or property of the other person.” R.C. 2903.21(A). {¶37} “Aggravated menacing does not * * * require proof that the offender is able to carry out his threat or that he intends to carry it out or believes himself capable of carrying it out,” nor does it “require proof that the offender threatened imminent serious physical harm.” State v. McDonald, 11th Dist. Ashtabula No. 2018-A-0008, 2018-Ohio- 11 Case No. 2022-T-0022 3845, ¶ 34. “What is necessary to establish the crime of aggravated menacing is the victim’s subjective belief that the defendant will cause serious physical harm.” (Citation omitted.) Id. “[A] person can be convicted of aggravated menacing even though the person has not made any movement toward carrying out the threat.” (Citation omitted.) Id. {¶38} As to the sufficiency of the evidence, March-Natali notes: “there were no verbal threats made”; “[t]he only thing Defendant did was lift his shirt”; and “[a]t no time did Defendant point a gun at anyone or even remove the gun from his person.” Brief of Defendant-Appellant at 5-6. Contrary to March-Natali’s position, it is well-established that merely revealing the possession of a firearm, even in the absence of direct or explicit threats, may be sufficient to sustain an Aggravated Menacing conviction. State v. El- Hardan, 2d Dist. Montgomery No. 24293, 2011-Ohio-4453, ¶ 43 (“merely displaying a weapon is enough to support a conviction for Aggravated Menacing when this act causes the victim to believe that the defendant will cause him serious physical harm”); State v. Yoder, 6th Dist. Erie No. E-19-031, 2020-Ohio-4546, ¶ 16 (“appellant [was] really intimidating, shaking, staring, angry, red-faced, and looming over them with a gun in his waist”); State v. Goodwin, 10th Dist. Franklin Nos. 05AP-267 and 05AP-268, 2006-Ohio- 66, ¶ 25 (“appellant arrived at the Price and Huggard residence, banged on the door, stood there, and did not respond to Huggard and Price’s invitations for appellant to come into the house” and, “[t]hen, without talking, appellant lifted his shirt, revealing a firearm, and then he left”). {¶39} As to the manifest weight of the evidence, March-Natali argues “there was no corroborating evidence of the two store clerk’s [sic] testimony, * * * no independent 12 Case No. 2022-T-0022 witnesses and no physical evidence to support the allegations.” Brief of Defendant- Appellant at 6. {¶40} Initially, we note that neither physical nor corroborating evidence is necessary to sustain a conviction. In re C.S., 10th Dist. Franklin No. 11AP-667, 2012- Ohio-2988, ¶ 30 (absence of corroborating or physical evidence does not negate witness testimony). This is particularly true with respect to a crime such as Aggravated Menacing where the essential act is causing someone to believe something. In the present case, Garvey’s and Davenport’s testimony was consistent with the other’s testimony and consistent with what was reported to the police. In some Aggravated Menacing cases, the failure or delay of the alleged victim to report the menacing conduct has been argued to be evidence that the victim did not actually fear physical harm. Here, the police were contacted immediately and the two clerks’ conduct was consistent with their statements that they felt threatened by March-Natali. We find no cause to overturn the verdict. {¶41} The first assignment of error is without merit. {¶42} For the foregoing reasons, March-Natali’s convictions for Aggravated Menacing are affirmed. Costs to be taxed against the appellant. THOMAS R. WRIGHT, P.J., CYNTHIA WESTCOTT RICE, J., concur. 13 Case No. 2022-T-0022	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483653/	[Cite as State v. Reyes, 2022-Ohio-4046.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY STATE OF OHIO, CASE NO. 2022-P-0018 Plaintiff-Appellee, Criminal Appeal from the - vs - Court of Common Pleas WALTER E. REYES, Trial Court No. 2009 CR 00623 Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed Victor V. Vigluicci, Portage County Prosecutor, and Pamela J. Holder, Assistant Prosecutor, 241 South Chestnut Street, Ravenna, OH 44266 (For Plaintiff-Appellee). Walter E. Reyes, pro se, PID# A590-238, Richland Correctional Institution, 1001 Olivesburg Road, P.O. Box 8107, Mansfield, OH 44905 (Defendant-Appellant). THOMAS R. WRIGHT, P.J. {¶1} Appellant, Walter E. Reyes, appeals the judgment denying his postconviction motion to reclassify him under Megan’s Law. We affirm. {¶2} In June 2010, Reyes pleaded guilty to four counts of rape, committed between October 1, 2006, and January 1, 2007, and a subsequent count of violating a protection order. The trial court sentenced Reyes on July 8, 2010, to an aggregate 30- year prison term. Reyes was classified a Tier III Sex Offender under the Adam Walsh Act, in effect at the time of Reyes’ sentencing. Megan’s Law, however, was in effect at the time Reyes committed the offenses. {¶3} In 2013, this court denied Reyes leave to file a delayed direct appeal and, in 2014, upheld the trial court's denial of Reyes’ first motion to withdraw his guilty pleas. State v. Reyes, 11th Dist. Portage No. 2013-P-0012, 2013-Ohio-1493; State v. Reyes, 11th Dist. Portage No. 2013-P-0049, 2014-Ohio-1679. In 2015, this court upheld the trial court’s denial of Reyes’ untimely postconviction relief petition and, in 2016, upheld the trial court’s denial of Reyes’ third motion to withdraw his guilty pleas. State v. Reyes, 2015-Ohio-5344, 55 N.E.3d 485 (11th Dist.); State v. Reyes, 11th Dist. Portage No. 2016- P-0010, 2016-Ohio-5673. {¶4} Most recently, in 2021, this court upheld the trial court’s denial of Reyes’ motion to vacate his Tier III Sex Offender classification. State v. Reyes, 11th Dist. Portage No. 2021-P-0014, 2021-Ohio-3478. In that appeal, Reyes argued that the trial court’s failure to vacate his Adam Walsh Act classification under its continuing jurisdiction to correct void judgments was an abuse of discretion. Id. at ¶ 6. We rejected this argument because “any error in his classification, including any constitutional violation, would result in a voidable judgment.” Id. at ¶ 9. We upheld the trial court’s decision because “Reyes’ classification was not void; his motion, construed as a postconviction relief petition, was untimely; and he [had] not established the statutory conditions for the trial court to consider a second petition.” Id. at ¶ 15. Moreover, “[b]ecause Reyes could have challenged the trial court’s retroactive application of the Adam Walsh Act in a timely direct appeal from his conviction, any review of that issue in a postconviction relief petition [was] barred by res judicata.” Id. at ¶ 16. 2 Case No. 2022-P-0018 {¶5} The matter now before us is the trial court’s denial of Reyes’ pro se motion to reclassify him under Megan’s Law, from which Reyes advances one assignment of error: The trial court abused its discretion when it denied Appellant’s motion to classify Defendant under Megan’s [Law], because the classification requirements inherent in Megan’s Law are civil and remedial, and are not a punishment within the defendant’s sentence. {¶6} Ohio’s version of Megan’s Law, the codified system for the classification and registration of sex offenders in effect at the time Reyes committed the rape offenses, was enacted in 1996 and significantly amended in 2003 (Am.Sub.S.B. No. 5, 2003 Ohio Laws File 29). The Supreme Court of Ohio consistently held that Megan’s Law was a remedial statute providing civil consequences of a sex offense conviction, rather than a punitive component of a criminal sentence. See State v. Williams, 129 Ohio St.3d 344, 2011-Ohio-3374, 952 N.E.2d 1108, ¶ 10-11. {¶7} Ohio’s version of the Adam Walsh Act, the current codified system, was enacted in 2007 (Am.Sub.S.B. No. 10, 2007 Ohio Laws File 10) and was in effect when Reyes was sentenced in 2010. The Adam Walsh Act repealed Megan’s Law and replaced it with new classification standards and additional registration requirements. In 2011, the Supreme Court of Ohio held that, unlike Megan’s Law, these registration requirements are punitive and therefore a part of the offender’s criminal sentence. Williams at ¶ 21. Accordingly, the Adam Walsh Act, “as applied to defendants who committed sex offenses prior to its enactment, violates Section 28, Article II of the Ohio Constitution, which prohibits the General Assembly from passing retroactive laws.” Id. at syllabus. 3 Case No. 2022-P-0018 {¶8} Reyes contends that the trial court has jurisdiction to reclassify him under Megan’s Law because his sentence and classification “are separate entries and treated as separately appealable orders.” {¶9} First, the premise of Reyes’ argument—that the trial court has jurisdiction to reclassify him because the sentence and classification are treated as separate orders under Megan’s Law—is misplaced. Reyes was classified under the Adam Walsh Act, meaning the registration requirements are a punitive component of his criminal sentence. See Williams at ¶ 21; see also State v. Schilling, 1st Dist. Hamilton No. C-210363, 2022- Ohio-1773, ¶ 9. {¶10} We have already determined, in Reyes’ last appeal, that his failure to file a timely direct appeal resulted in the forfeiture of his challenge to the trial court’s retroactive application of the Adam Walsh Act and that his collateral attack on this alleged sentencing error is barred by the doctrine of res judicata. Reyes, 2021-Ohio-3478, at ¶ 9, ¶ 16; see also State v. Henderson, 161 Ohio St.3d 285, 2020-Ohio-4784, 162 N.E.3d 776, ¶ 90 (Donnelly, J., dissenting), citing State v. Harper, 160 Ohio St.3d 480, 2020-Ohio-2913, 159 N.E.3d 248, ¶ 41 (“A direct appeal is the available legal process to address a trial court’s alleged sentencing error, and the failure to challenge a sentencing error on direct appeal operates as res judicata to any later collateral attack on the judgment.”). {¶11} Reyes attempted to reframe his challenge, filing a motion for reclassification rather than a motion to vacate his classification, but the result is the same. Because the trial court had subject matter jurisdiction and personal jurisdiction over Reyes, any error in the sentence—including the Adam Walsh Act Tier III classification—was voidable, not void. Reyes, 2021-Ohio-3478, at ¶ 8-9, citing Henderson at ¶ 43. Thus, even though 4 Case No. 2022-P-0018 retroactive application of the Adam Walsh Act is an error that is constitutional in nature, it cannot be corrected now because Reyes did not timely and directly appeal his sentence. Reyes, 2021-Ohio-3478, at ¶ 9-10, citing Henderson at ¶ 17, citing Tari v. State, 117 Ohio St. 481, 495, 159 N.E. 594 (1927). {¶12} For this reason, the trial court has no authority to enter an order reclassifying Reyes under Megan’s Law and did not err in denying Reyes’ motion. See also Schilling, 2022-Ohio-1773, at ¶ 20 (where the First District vacated the trial court’s order reclassifying under Megan’s Law an offender who was originally, and retroactively, classified under the Adam Walsh Act). {¶13} Reyes relies on an opinion from the Twelfth District, which held that the Supreme Court’s “voidable criminal sentence” analysis in Henderson does not apply to Megan’s Law reclassification proceedings because they are civil in nature. State v. Jones, 12th Dist. Butler No. CA2020-07-080, 2021-Ohio-2149, ¶ 22. In Henderson, the Supreme Court of Ohio held that “sentences based on an error are voidable, if the court imposing the sentence had jurisdiction over the case and the defendant, including sentences in which a trial court failed to impose a statutorily mandated term.” Henderson, 2020-Ohio-4784, at ¶ 27. “The question simply turns on whether the court had jurisdiction over the subject matter and the person.” Id. at ¶17, citing Tari at 492. Henderson marked a return, in sentencing cases, to the traditional distinction between void and voidable judgments in all cases, specifically recognizing that “adopting anything but a bright-line jurisdictional rule to govern all cases, civil and criminal, would ‘result in hopeless confusion.’” (Emphasis added.) Henderson at ¶ 18, quoting Tari at 498. In Jones, the Twelfth District refused to apply Henderson to the defendant’s reclassification because 5 Case No. 2022-P-0018 Megan’s Law proceedings are civil and remedial, not criminal. Jones at ¶ 30-31. It noted that the Supreme Court of Ohio held that Megan’s Law does not affect the finality of a sentence because it is a civil, remedial consequence of a conviction. Id. at ¶ 24, citing State ex rel. Grant v. Collins, 155 Ohio St.3d 242, 2018-Ohio-4281, 120 N.E.3d 804, ¶ 17. {¶14} We find the reasoning in Jones unpersuasive. First, Collins was decided prior to Henderson. Further, the well-established law of void versus voidable was relied on, but not created, by Henderson. Yet the Twelfth District does not explain why the distinction does not apply to Megan’s Law merely because it is a civil judgment. Moreover, the pronouncement in Collins was made in the context of a prohibition action. The Supreme Court affirmed the dismissal of the action on the basis that the trial court did not patently or unambiguously lack jurisdiction to proceed with a Megan’s Law classification hearing nearly three decades after the defendant’s conviction. Collins at ¶ 18. The defendant had never been classified under any law during that time and remained in prison. Id. at ¶ 2, ¶ 14. Thus, the Supreme Court was emphasizing that the criminal sentence and the separate classification under Megan’s Law need not be imposed at the same time, i.e., the finality of the criminal sentence did not foreclose the trial court from imposing civil consequences under Megan’s Law decades later. The Court did not hold, however, that the finality of the criminal sentence rendered a classification error void and subject to collateral attack. We do not agree with and decline to adopt the Twelfth District’s reasoning in Jones. See also Schilling at ¶ 20 (“We decline to adopt the reasoning in Jones. Instead, we follow the reasoning in Reyes.”). 6 Case No. 2022-P-0018 {¶15} Reyes’ sole assigned error is without merit, and the judgment of the Portage County Court of Common Pleas is affirmed. CYNTHIA WESTCOTT RICE, J., MARY JANE TRAPP, J., concur. 7 Case No. 2022-P-0018	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483650/	[Cite as State v. Wagner, 2022-Ohio-4051.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT LAKE COUNTY STATE OF OHIO, CASE NO. 2021-L-101 Plaintiff-Appellee, Criminal Appeal from the -v- Court of Common Pleas MARK R. WAGNER, JR., Trial Court No. 2020 CR 001117 Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed in part and reversed and remanded in part Charles E. Coulson, Lake County Prosecutor, and Kristi L. Winner, Assistant Prosecutor, Lake County Administration Building, 105 Main Street, P.O. Box 490, Painesville, OH 44077 (For Plaintiff-Appellee). Brandon J. Henderson, Justin M. Weatherly, and Calvin Freas, Henderson, Mokhtari & Weatherly Co., LPA, 1231 Superior Avenue, East, Cleveland, OH 44114 (For Defendant-Appellant). MATT LYNCH, J. {¶1} Defendant-appellant, Mark R. Wagner, Jr., appeals from his convictions for Felonious Assault, Discharge of a Firearm on or Near Prohibited Premises, Improperly Handling Firearms in a Motor Vehicle, and Falsification in the Lake County Court of Common Pleas. For the following reasons, we affirm in part and reverse in part the judgment of the lower court and remand for further proceedings consistent with this opinion. {¶2} On January 29, 2021, the Lake County Grand Jury issued an Indictment, charging Wagner with Felonious Assault (Count One), a felony of the second degree, in violation of R.C. 2903.11(A)(2); Discharge of a Firearm on or Near Prohibited Premises (Count Two), a felony of the third degree, in violation of R.C. 2923.162(A)(3); Improperly Handling Firearms in a Motor Vehicle (Count Three), a felony of the fourth degree, in violation of R.C. 2923.16(A); and Falsification (Count Four), a misdemeanor of the first degree, in violation of R.C. 2921.13(A)(3). Counts One and Two also had firearm specifications pursuant to R.C. 2941.145 and .146. {¶3} A jury trial was held on July 20-22, 2021. The following pertinent testimony and evidence were presented: {¶4} On September 22, 2020, Solomon Ford was driving on I-271 North and encountered another vehicle in front of him, a Chevy Silverado, later determined to have been driven by Wagner. According to Ford’s testimony, Wagner was driving aggressively and slamming on his brakes. Ford testified that after the two travelled onto I-90 West, Wagner moved into the right lane while Ford remained in the fast lane. When Ford looked to the right, he observed Wagner with a gun and then saw and heard two gun shots. Ford followed Wagner to obtain his license plate number and gave a statement at the Wickliffe Police Department. Ford allowed police to access his vehicle, which had two bullet holes in it, and officers subsequently swabbed the inside of his vehicle for gunshot residue. At this point in the testimony, defense counsel indicated to the court that he was unaware a swab had been taken of Ford’s car. The State indicated a reference to the kit had been included on the index of discovery provided to the defense. 2 Case No. 2021-L-101 {¶5} Patrolman David Cook of the Wickliffe Police Department spoke with Wagner, who described the shooting, observed two bullet holes in his passenger side and found a bullet inside the vehicle on the rear passenger floorboard. Around the same time, Officer Salvatore Continenza of the Willoughby Hills Police Department spoke with Wagner, who came to the department after the shooting. According to Continenza, Wagner identified that Ford fired at him first but Wagner did “not remember if he [Wagner] fired or not.” Continenza turned over the statement to the Wickliffe Police Department as it was determined the incident occurred within their jurisdiction. {¶6} Lieutenant Manus McCaffery of the Wickliffe Police Department searched Wagner’s vehicle, wherein two shell casings were recovered. He observed no signs of a shooting within Ford’s vehicle, which he inspected the day after the incident. He swabbed the interior of Ford’s vehicle for gunshot residue on July 28. He testified that this was not sent to a laboratory because “there is no laboratory in the State of Ohio that will test them for gunshot residue” and labs would only test gunshot residue found on a person. {¶7} As to his supplemental report that discussed swabbing Ford’s vehicle for gunshot residue, McCaffery testified that he personally gave a copy to the prosecutor for the first time on the day preceding his testimony, the first day of trial. He was unaware of when the prosecutor first received the report but provided a copy because it had been indicated to him they did not have his supplement. {¶8} Detective Don Dondrea of the Wickliffe Police Department examined Wagner’s vehicle and did not observe bullet holes. He swabbed the vehicle for gunshot residue but after speaking with Ohio BCI, he was informed that they would only test residue from hands. He did not discover any evidence that showed Ford shot at Wagner 3 Case No. 2021-L-101 other than Wagner’s statement. {¶9} Wagner testified that Ford tried to merge his vehicle into him while driving on I-271, which resulted in Wagner “brake checking” him. After Ford tailgated him and followed him in traffic, Wagner separated from him and drove in the right lane while Ford remained in the far left lane. Subsequently, Wagner observed Ford holding a gun. Wagner reached for a firearm in his vehicle while crouching down, heard a shot and saw a flash, and then fired his gun twice. He observed no damage to his vehicle and told Continenza that he “wasn’t sure if I shot him. But I fired.” He testified that he fired the shots in self-defense. {¶10} The jury found Wagner guilty of all counts as charged in the indictment. Its verdict was memorialized in a July 28, 2021 Judgment Entry. {¶11} A sentencing hearing was held on August 30, 2021. The court found that Counts Two and Three merged into Count One. It ordered Wagner to serve a minimum prison term of three years and a maximum term of four and a half years on Count One, with a term of three years for the first firearm specification and five years on the second, all to be served consecutively. Wagner was ordered to serve a concurrent term of 180 days for Count Four. {¶12} Wagner timely appeals and raises the following assignments of error: {¶13} “[1.] The trial court committed prejudicial error when it instructed the jury to consider whether Mr. Wagner had a duty to retreat as a factor of his self-defense claim because the plain language of the statute in effect at the time of trial and jury deliberations prohibited such an instruction: ‘the trier of fact shall not consider the possibility of retreat’ in determining whether the self-defender ‘reasonably believed that the force was 4 Case No. 2021-L-101 necessary . . .’ R.C. 2901.09(C). {¶14} “[2.] The Defendant was reversibly prejudiced when crucial evidence that was directly related to the cross-examination of the State’s primary witness—and whose cross-examination had already been completed—was not given to his defense until one day into the three-day trial even though the Defendant had triggered Crim.R. 16 by demanding discovery months previously.” {¶15} In his first assignment of error, Wagner argues that, after the offense occurred but prior to trial, a “Stand Your Ground” law came into effect, removing the duty to retreat for the purposes of self-defense and, thus, the trial court erred by denying his request not to give a duty to retreat instruction. {¶16} Generally, “[a]n appellate court reviews a trial court’s decision to give a particular set of jury instructions under an abuse of discretion standard.” (Citation omitted.) State v. Settle, 2017-Ohio-703, 86 N.E.3d 35, ¶ 37 (11th Dist.). However, “[w]hether the jury instructions correctly state the law is a question that is reviewed de novo.” State v. Dean, 146 Ohio St.3d 106, 2015-Ohio-4347, 54 N.E.3d 80, ¶ 135. {¶17} R.C. 2901.09 was amended effective April 6, 2021, and provides the following: (B) For purposes of any section of the Revised Code that sets forth a criminal offense, a person has no duty to retreat before using force in self-defense, defense of another, or defense of that person’s residence if that person is in a place in which the person lawfully has a right to be. 5 Case No. 2021-L-101 (C) A trier of fact shall not consider the possibility of retreat as a factor in determining whether or not a person who used force in self- defense, defense of another, or defense of that person’s residence reasonably believed that the force was necessary to prevent injury, loss, or risk to life or safety. The version of the statute in effect prior to that date, known as the Castle Doctrine, provided that a person lawfully in that person’s residence has no duty to retreat before using force in self-defense, defense of another, or defense of a residence and a person in their vehicle had no duty to retreat before using force in self-defense or defense of another. Section (C) was not part of the prior version. {¶18} “The Supreme Court of Ohio has articulated a two-part test” for “determining whether a statute is impermissibly retroactive under Section 28, Article II.” State v. McEndree, 2020-Ohio-4526, 159 N.E.3d 311, ¶ 43 (11th Dist.). “Because R.C. 1.48 establishes a presumption that statutes operate prospectively only, ‘[t]he issue of whether a statute may constitutionally be applied retrospectively does not arise unless there has been a prior determination that the General Assembly specified that the statute so apply.’” (Citation omitted.) State v. Walls, 96 Ohio St.3d 437, 2002-Ohio-5059, 775 N.E.2d 829, ¶ 10. “If there is no ‘clear indication of retroactive application, then the statute may only apply to cases which arise subsequent to its enactment.’ * * * If we can find, however, a ‘clearly expressed legislative intent’ that a statute apply retroactively, we proceed to the second step, which entails an analysis of whether the challenged statute is substantive or remedial.” (Citations omitted.) Id. If the law is substantive, it cannot be applied retroactively. Bielat v. Bielat, 87 Ohio St.3d 28, 721 N.E.2d 28 (2000). 6 Case No. 2021-L-101 {¶19} It has been held, however, that “if a statute is amended and becomes effective while the defendant’s case is pending in the trial court, then its applicability to the defendant’s case is guided by R.C. 1.58.” State v. Stiltner, 4th Dist. Scioto No. 19CA3882, 2021-Ohio-959, ¶ 54, vacated, State v. Stiltner, __ Ohio St.3d __, 2022-Ohio- 3589, __ N.E.3d __, ¶ 1, citing State v. Kaplowitz, 100 Ohio St.3d 205, 2003-Ohio-5602, 797 N.E.2d 977, ¶ 8 (“R.C. 1.58(B) identifies which law to apply when a statute is amended after the commission of a crime but before sentence is imposed”). R.C. 1.58 provides that an amendment of a statute does not, inter alia, affect any right accrued under the statute or affect a violation thereof prior to the amendment but that “[i]f the penalty, forfeiture, or punishment for any offense is reduced by * * * amendment of a statute” such penalty or punishment “shall be imposed according to the statute as amended.” R.C. 1.58(A) and (B). {¶20} The State argues that this law cannot be applied retroactively because it is substantive in nature. Wagner argues that it is unnecessary to conduct a retroactivity analysis because the statute was in effect at the time his trial began and, thus, the application relating to the jury instruction was prospective. {¶21} We initially observe that there is limited authority on the prospective or retroactive application of the specific statute at issue in the present case. Two courts have addressed this issue in relation to R.C. 2901.09. In State v. Degahson, 2d Dist. Clark No. 2021-CA-35, 2022-Ohio-2972, the court found that retroactive application of the statute would be unconstitutional since the change in law relating to the duty to retreat is substantive. In State v. Hurt, 8th Dist. Cuyahoga No. 110732, 2022-Ohio-2039, the Eighth District found that former R.C. 2901.09 applied during the trial since substantive 7 Case No. 2021-L-101 provisions of the former law apply to pending prosecutions under R.C. 1.58. In support of its conclusion, it cited Stiltner, 2021-Ohio-959. In Stiltner, the appellate court held that the trial court did not err in instructing the jury on a former version of the self-defense law, R.C. 2901.05, because the new version of the statute became effective while the defendant’s case was pending and the legislature did not indicate it intended to apply the statute retroactively. It rejected the argument that inclusion of the words “at trial” in the statute was an express intent to apply the statute to pending cases. Id. at ¶ 56. Degahson also cites Stiltner for the proposition that substantive provisions of the former law should not apply to pending prosecutions. Degahson at ¶ 22. {¶22} The issue addressed in Stiltner, whether the prior version of the self- defense statute applied at trial when the offense had been committed prior to the amendment of the statute, is instructive in this case. In both instances, relating to self- defense and the issue of duty to retreat, the courts are asked to consider how to instruct a jury at trial for an offense that was committed under the former version of this statute. Courts in this state have been split on the resolution of this matter as to the self-defense statute. In support of his position, Wagner cites to State v. Gloff, 2020-Ohio-3143, 155 N.E.3d 42 (12th Dist.), which addresses the foregoing. In Gloff, while the trial was taking place, the amended self-defense statute went into effect, which provides: “If, at the trial of a person who is accused of an offense that involved the person’s use of force against another, there is evidence presented that tends to support that the accused person used the force in self-defense, * * * the prosecution must prove * * * that the accused person did not use force in self-defense.” Id. at ¶ 3, citing R.C. 2901.05(B)(1). The lower court’s determination that this statute applied only to offenses committed after its effective date 8 Case No. 2021-L-101 was rejected. The appellate court determined that a retroactivity analysis was not required since the amended statute applied prospectively to trials and “focuses on when the trial is held, as opposed to when the offense was committed.” Id. at ¶ 22. Some other appellate districts reached similar conclusions. State v. Smith, 6th Dist. Wood No. WD- 19-070, 2020-Ohio-5119, ¶ 32 (where defendant’s conduct occurred before amendment and trial occurred after, the amended statute applied at trial and the jury should have been instructed as to the new burden of proof); State v. Pitts, 2020-Ohio-5494, 163 N.E.3d 1169, ¶ 25 (1st Dist.). In contrast, other districts held that where the offense was committed before the effective date of the amendment, an instruction under the amended version should not be given at trial. Stiltner, 2021-Ohio-959, ¶ 55. See also State v. Williams, 3d Dist. Allen No. 1-19-39, 2019-Ohio-5381, ¶ 12, fn. 1 (“[w]e apply the version of R.C. 2901.05 in effect at the time the defendant committed the offense”); State v. Irvin, 2020-Ohio-4847, 160 N.E.3d 388, ¶ 26 (2d Dist.), vacated, State v. Irvin, __ Ohio St.3d __, 2022-Ohio-3587, __ N.E.3d __, ¶ 1. This court reached the same conclusion and determined that, “inasmuch as the amended self-defense statute creates a new burden of proof on the state, we find that it is substantive and cannot be applied retroactively.” McEndree, 2020-Ohio-4526, at ¶ 44. {¶23} The Ohio Supreme Court recently resolved the foregoing conflict in State v. Brooks, ___ Ohio St.3d ___, 2022-Ohio-2478, ___ N.E.3d ___. The court evaluated the issue of whether “legislation that shifts the burden of proof on self-defense to the prosecution * * * appl[ies] to all subsequent trials even when the alleged offenses occurred prior to the effective date of the act.” Id. at ¶ 1. The Supreme Court held that amended R.C. 2901.05 applies “to all trials conducted on or after its effective date” regardless of 9 Case No. 2021-L-101 when the underlying criminal conduct occurred. Id. at ¶ 2. In its analysis, the court found this was not an ex post facto law since it did not create a new crime or increase the burden or punishment for a past crime. Id. at ¶ 13. {¶24} The court also held that, as amended, the statute did not apply retroactively but prospectively to all trials occurring after its effective date, emphasizing the right to self-defense was stated in the present tense (“[a] person is allowed to act in self-defense” and “at the trial of a person * * * the prosecution must prove” self-defense). Id. at ¶ 14. It concluded that since “[t]he amendment here applies prospectively and, because it does not increase the burden on a criminal defendant, there is no danger of its violating Ohio’s Retroactivity Clause or the United States Constitution’s Ex Post Facto Clause.” Id. at ¶ 19. {¶25} Similar to the argument presented by Wagner, the Supreme Court in Brooks did not perform an analysis as to whether the statute was properly applied retroactively, including whether the change is substantive, because it found that, as written, it has a prospective application. See McEndree at ¶ 43 (“if we can find, however, a ‘clearly expressed legislative intent’ that a statute apply retroactively, we proceed to the second step, which entails an analysis of whether the challenged statute is substantive or remedial”). In relation to self-defense, R.C. 2901.05(B)(1) states “at the trial of a person * * * the prosecution must prove” self-defense. In other words, the amended statute should apply since the language related to the date of the trial rather than the date the offense was committed. Likewise, in the present matter, the duty to retreat statute, R.C. 2901.09(C) states, in part: “A trier of fact shall not consider the possibility of retreat as a factor in determining whether or not a person who used force in self-defense, defense of 10 Case No. 2021-L-101 another, or defense of that person’s residence reasonably believed that the force was necessary to prevent injury, loss, or risk to life or safety.” It also has a prospective application and sets forth how the jury should be instructed as of the date of the trial. Also similar to Brooks, there are no concerns about the application of the amended statute negatively impacting the defendant since it does not deprive him of any rights or subject him to a harsher penalty. {¶26} This sentiment was echoed by the dissenting opinion in Hurt, 2022-Ohio- 2039. The opinion addressed the similarities between R.C. 2109.05 and .09, citing Gloff in support, which the Supreme Court upheld as “correctly decided” in Brooks. Hurt at ¶ 99; Brooks at ¶ 19. As the dissenting opinion explained, “Gloff held that the 2019 amendment to R.C. 2109.05 applies prospectively to trials held after the effective date of the statute per the statutory language that prescribes the actions ‘at the trial.’ * * * Likewise, the plain language of R.C. 2105.09(C) provides that ‘a trier of fact [at trial] shall not consider the possibility of retreat as a factor.’” Hurt at ¶ 99 (Mays, P.J., concurring in part and dissenting in part). We agree with this conclusion and do not find the majority opinion in Hurt to be persuasive given its reliance on Stiltner which is no longer valid law following the holding in Brooks. As to Degahson, we observe that, while it recognized the Brooks opinion, it did not address its applicability in relation to this matter. It also utilized Stiltner’s interpretation that, under R.C. 1.58(B), the court could not apply the self-defense law as amended due to its substantive nature, which is inconsistent with Brooks. Degahson also fails to consider the fact that the provision requiring a jury instruction appears to have prospective application on its face, as discussed above. As such, we decline to apply its holding. 11 Case No. 2021-L-101 {¶27} We recognize the State’s argument that this case differs slightly from the self-defense issue addressed in Brooks and addresses a more substantive matter as it relates to the right to defend oneself without retreating rather than a change in burden for a self-defense instruction. However, given the similarities in the prospective application and the fact that the duty to retreat statute proscribes the actions to be taken at trial, we find the Brooks analysis to be applicable in the present matter. {¶28} Since we conclude the jury instruction should have been given under the amended version of the statute, we remand for a retrial on the counts relating to the shooting of the vehicle: Felonious Assault (Count One), Discharge of a Firearm on or Near Prohibited Premises (Count Two), and Improperly Handling Firearms in a Motor Vehicle (Count Three). The Falsification conviction, relating to statements Wagner made to police about the incident that were unrelated to the duty to retreat, was not impacted by the jury instruction issue and is affirmed. {¶29} The first assignment of error is with merit. {¶30} In his second assignment of error, Wagner argues that a violation of Crim.R. 16 occurred when the prosecution failed to disclose a report from a detective showing that he performed a gunshot residue swab of Ford’s vehicle, which caused prejudice and warrants a new trial. Given the disposition of the first assignment of error, and since this error does not relate to or impact the Falsification conviction, we decline to address this issue as it is moot. {¶31} The second assignment of error is moot. {¶32} For the foregoing reasons, Wagner’s conviction for Falsification is affirmed and his convictions for Felonious Assault, Discharge of a Firearm on or Near Prohibited 12 Case No. 2021-L-101 Premises, and Improperly Handling Firearms in a Motor Vehicle are reversed and this matter is remanded for a new trial on those charges. Costs to be taxed against appellee. THOMAS R. WRIGHT, P.J., CYNTHIA WESTCOTT RICE, J., concur. 13 Case No. 2021-L-101	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483656/	[Cite as State v. Malachin, 2022-Ohio-4047.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY STATE OF OHIO, CASE NO. 2022-T-0002 Plaintiff-Appellee, Criminal Appeal from the - vs - Court of Common Pleas ANDREW W. MALACHIN, Trial Court No. 2021 CR 00188 Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed Dennis Watkins, Trumbull County Prosecutor, and Ryan J. Sanders, Assistant Prosecutor, Administration Building, Fourth Floor, 160 High Street, N.W., Warren, OH 44481 (For Plaintiff-Appellee). Martin Yavorcik, 940 Windham Court, Suite 7, Youngstown, OH 44514 (For Defendant- Appellant). JOHN J. EKLUND, J. {¶1} Appellant, Andrew Malachin, appeals his sentence from the Trumbull County Court of Common Pleas. Appellant raises four assignments of error arguing: (1) that trial counsel rendered ineffective assistance of counsel; (2) that his conviction is not supported by sufficient evidence; (3) that his conviction is against the manifest weight of the evidence; and (4) that R.C. 2967.271, the Reagan Tokes indefinite sentencing law, is unconstitutional. {¶2} After review of the record and the applicable caselaw, we find appellant’s assignments of error to be without merit. Trial counsel was not ineffective for failing object to the State’s theory of the case. Counsel was not ineffective for failing to object to a reworked DNA report which was performed by a new analyst less than 21 days before trial. Next, appellant’s conviction was supported by the manifest weight of the evidence and even appellant’s own testimony did not preclude the jury from concluding that he raped the victim. Finally, we have previously upheld the constitutionality of the Reagan Tokes Law in State v. Reffitt, 11th Dist. Lake Case No. 2021-L-129, 2022-Ohio-3371, and State v. Joyce, 11th Dist. Lake Case No. 2021-L-006, 2022-Ohio-3370. {¶3} Thus, we affirm the judgment of the Trumbull County Court of Common Pleas. Substantive and Procedural History {¶4} In May 2021, appellant was indicted for two counts of Rape, in violation of R.C. 2907.02(A)(1)(c) (substantial impairment) and (A)(2)(b) (force), both first-degree felonies. {¶5} Jury trial was set for November 22, 2021. At the final status hearing held on November 4, the State notified the court that their DNA expert would be unavailable for trial because she was on maternity leave. The State said it would provide a reworked DNA report and the name of the substitute witness. On November 5, 17 days before trial, the State provided appellant the reworked DNA report, the name of the expert, and his curriculum vitae. Appellant’s trial counsel did not object to the new report, and it appears that the original report and the new report were identical save that they were performed by different experts. 2 Case No. 2022-T-0002 {¶6} The case proceeded to jury trial. The State first called the victim, Amber Gadd. She testified that she had grown up in Trumbull County, but that she had moved away when she turned 18 and only recently moved back to the area. She explained that she and her two children had moved in with her aunt, Cheyanne Grove, and uncle, John Grove in Liberty Township, Trumbull County, Ohio. {¶7} Gadd said that she has known appellant all her life. Gadd, now 37, described her relationship with appellant as “like family to us. He’s almost like an uncle.” She said that she refers to him as “Pappy Andy” and that he would call her “baby girl” or “princess.” She said that appellant would introduce her “like a daughter of mine” to other people. {¶8} Gadd said that on February 5, 2021, she made a plan to meet appellant at Ice Breakers Pool Hall in Austintown, Ohio. According to Gadd, appellant and his wife, Heidi, go to Ice Breaker’s nearly everyday. {¶9} Gadd arrived at the pool hall around 10:00 pm. She said that she talked with appellant and his wife for approximately one hour before she ordered her first drink, a Tito’s and ginger ale. Gadd said that she is not a drinker and that it only takes two or three drinks before she feels intoxicated. After she ordered her first drink, appellant ordered a shot of tequila for everyone in their group. {¶10} During the evening, Eddie, one of Gadd’s friends arrived at the bar. She said that appellant and Heidi were standoffish to Eddie. Appellant asked Gadd if she had ever had a Tito’s and cranberry. She said she had not, and that she saw appellant walk behind the bar to make the drink. At the same time, Heidi began insisting that Eddie was 3 Case No. 2022-T-0002 “not taking her [Gadd] home.” Eddie told Gadd that he did not want to deal with appellant and Heidi’s behavior and left the pool hall. {¶11} While Eddie was leaving, Gadd noticed the drink that appellant had made was in front of her. She said that she drank about half of the drink and started to feel sick. She began to have trouble seeing, started vomiting, and lost control of her bowels. She said that she could no longer stand after that point and was hovering over a trash can by the bar. She said that the last clear memories of the evening were being at the bar and being violently ill. {¶12} Gadd said that she did not remember how she got home that night. She said that she got a call at 2:00 a.m. on February 6, and she woke up with rectal pain. She was naked and in her bed. Gadd said that she does not sleep naked and always wears a hoodie and sweatpants. She was still unable to see clearly or stand. She said that she attempted to text her daughter “don’t let him in your room.” However, the text itself was mostly unintelligible. Gadd said that for the next 20 minutes, she was crying, sitting on the floor of her room and unable to get up or open the door to her room. Cheyanne Grove eventually came into her room and then Cheyanne and Gadd’s daughter helped to clean her up in the shower. She reported that she continued to have rectal discomfort for two weeks. {¶13} At 2:59 in the morning, appellant texted Gadd “Sweet heart I did nothing to u or thn kids. I dnt remember the kids name at the bar. See if he got ur card or jst cancel it and u can starts new one. Tell the babies I love thm” {¶14} In the morning, Gadd went to St. Elizabeth Hospital to receive a sexual assault examination and she then filed a criminal report. 4 Case No. 2022-T-0002 {¶15} The State next called A.V., Gadd’s 13-year-old daughter. She said that she knows appellant but has only interacted with him a few times. A.V. said that she was playing video games when Gadd returned to the home around 12:45 a.m. A.V. said that the gaming system was in Gadd’s bedroom. She said that appellant brought her mother into the room and that A.V. saw Gadd stumble onto her bed. A.V. described Gadd as “unaware” and that “[s]he has no clue what’s going on and he is behind her holding her up by just under her armpit and was just like trying to move her towards the bed.” She said that “[i]t’s not like she was drunk, she was completely out of it * * * I’ve never seen her like that ever. * * * I just knew something was wrong, something had happened, but I was not sure what. So I kind of just left it at that thinking okay, she’s tired, I’ll let her sleep.” {¶16} A.V. said that appellant started to yell at her to get off her gaming system and to go to her bedroom because it was late and her mom was tired and needed time to herself. A.V. told appellant that it was the weekend and that she did not need to get off the gaming system. Appellant then began to scold A.V. because she had left candy wrappers laying around in the room. He picked up the wrappers and shoved them down her shirt. After he did that, A.V. left the room and went to her own room where she was on her phone with headphones in. A.V. said that she thought that appellant had left the house and that her mother was sleeping in the bed. {¶17} About 15-20 minutes later, appellant came out of Gadd’s room and entered A.V.’s room. She said that appellant was not wearing shoes, socks, or a shirt. Appellant told A.V. that her mother was undressing herself, so he left. A.V. told appellant that was a lie because her mom sleeps in a hoodie and sweatpants. Appellant told A.V. that he was going to lay with her and started crawling onto her bed. A.V. began to hear crying 5 Case No. 2022-T-0002 coming from her mother’s room and then heard a crashing sound. She then received a text message from her mother with jumbled words but that she understood the first line to mean to tell appellant to leave her room. A.V. testified that in that moment she understood that something bad had happened. {¶18} A.V. recalled that John and Cheyanne Grove woke up and entered her room. They saw appellant in A.V.’s room and her uncle took appellant home. A.V. then helped her aunt get Gadd into the bathroom to clean her up. A.V. said that the water was discolored and a reddish color. Gadd was crying and still unable to stand up. She kept saying he hurt me and asking if he had done anything to A.V. or her sister. {¶19} The State next called Terry Benetis, a bartender at Ice Breaker’s Pool Hall. She testified that she is familiar with appellant and his wife Heidi and that they come to the bar nearly everyday. Benetis also said that appellant has a habit of going behind the bar to make his own drinks. Although he is not allowed to, she said that he continues to do so. She said that she saw him behind the bar that evening but was not sure what he did while there. She said she served Gadd two drinks. {¶20} Benetis said that she saw Gadd become suddenly sick and that her second drink was still on the bar when she became ill. She said that it was “hard to describe” Gadd’s state, noting that it was hard to get her to speak enough just to give them her address. Eventually, Gadd muttered her address while in the bar. {¶21} Benetis said she was “just out of it like.” Benetis said that Gadd’s state did not align with someone who had only had two drinks or even three or four. Benetis testified that appellant was not drunk “in any way, shape, or form like that girl was.” 6 Case No. 2022-T-0002 {¶22} The State next called Gadd’s uncle, John Grove. He said that around 12:30 - 1:00 a.m. on February 6, his wife woke him up to let Gadd into the house. He said that Gadd never came home drunk and did not make a habit of going out drinking while she stayed with him. Gadd did not look like herself and needed assistance walking. Gadd’s daughter was in her room, so he went back to bed. {¶23} Next, John said that his wife woke him up around 2:00 a.m. saying that Gadd was in her room crying and that something was wrong. He said that he forced the door open and saw Gadd curled up in the corner of the room. He said Gadd had difficulty speaking, but that he thought he heard her say “get him out of here.” He did not realize appellant was still in the house at this point. He said that appellant was not wearing his shirt, shoes, or socks. John told appellant to gather his things so he could take him home. John did not believe that appellant showed signs of intoxication. {¶24} Gadd’s aunt, Cheyanne Grove, testified that she knew Gadd had gone out to meet appellant and his wife. She received a call around 12:30 a.m. from appellant saying that Gadd had had too much to drink and that he would be bringing her home in her car. She did not get out of bed when Gadd arrived, but she woke up hearing banging coming from A.V.’s room and the sound of Gadd crying in her room. Cheyanne went into the children’s room and saw appellant on the floor with no shirt, shoes, or socks on. She asked what he was doing in the girls’ room. She called her husband to the room and told him to get appellant out of the house. {¶25} Cheyanne then went into Gadd’s room and found her on the floor having difficulty talking, crying, and hysterical. Gadd told Cheyanne that appellant had raped her. 7 Case No. 2022-T-0002 During the night, Cheyanne used Gadd’s phone to call appellant. She called and said, “You f****, you raped my niece.” Appellant did not respond when he heard this. {¶26} The State called Officer Ashley Kitchen of the Liberty Police Department. She was called to St. Elizabeth Hospital in Boardman to take Gadd’s sexual assault report. Kitchen described Gadd’s demeanor as teary-eyed and her appearance as disheveled. She said that Gadd appeared to be in physical discomfort. Gadd gave an oral and written statement. {¶27} The State next called Liberty Police Department Detective Michael Shuster. Shuster investigated Gadd’s report of sexual assault and in the course of that investigation he gathered evidence including two socks from Gadd’s bedroom and a chewing tobacco can that did not belong there. {¶28} On February 8, Shushter interviewed appellant at the Liberty Police Department. During the interview, he observed that appellant chews tobacco. Appellant told Shushter that he had no reason to believe that his DNA would be found in the rape test kit performed on Gadd. During the interview, appellant denied the rape and expressed a clear and articulate recollection from the night. His statement to Shushter did not indicate any gaps or lapses in memory and did not indicate that he blacked out at any point. Appellant consented to give a DNA sample to Shushter. Shushter sent the socks and appellant’s DNA sample to the Ohio Bureau of Criminal Investigation (BCI) for analysis. {¶29} Collen Monahan was the registered nurse who conducted Gadd’s Sexual Assault Nursing Exam (SANE). She explained the process used to complete the paperwork and to conduct an examination including the rape kits that are used to collect 8 Case No. 2022-T-0002 DNA samples. Monahan collected vaginal, anal, and cheek swabs from Gadd. Monahan’s completed report indicated that Gadd complained of rectal tenderness, but that there was no visual sign of tenderness. Monahan said that it is actually rare to observe physical signs of trauma. She agreed that bleeding could indicate internal trauma. {¶30} Registered Nurse Barbara Turner also testified that she reviewed the SANE report that Monahan conducted for purposes of her testimony. However, Turner did not treat Gadd. She testified that she is a SANE certified nurse and that she had performed over 500 SANE reports. She discussed drug-facilitated sexual assault, which involves a person being under the influence of drugs or alcohol and that in those cases, it is less likely to see signs of physical trauma because the person’s body is in a relaxed state, especially if they have passed out. She reported that studies of anal rape in reported drug-facilitated sexual assault indicate only six percent of patients had anal trauma. {¶31} Turner indicated that due to COVID-19, certain routine SANE practices had been discontinued and that ER staff were given a four-hour training course to fill in the gap for the full SANE program. She said that some aspects of the SANE program suffered as a result. One specific issue she highlighted was that no one collected Gadd’s urine or blood to provide to law enforcement to perform a toxicology analysis. {¶32} The State’s final witness was David Miller, the forensic scientist with BCI. Miller performed the DNA analysis of the evidence in this case. His report indicated that he analyzed two vaginal samples, two anal samples, and two oral samples from Gadd’s rape kit. He analyzed a DNA standard for comparison purposes and a DNA standard obtained from appellant. Finally, he analyzed two swabs taken from the socks found in Gadd’s bedroom. 9 Case No. 2022-T-0002 {¶33} Miller said that his test determined that Gadd’s vaginal and anal samples were positive for acid phosphate activity. Acid phosphate activity is a presumptive test for the presence of semen in a sample. He said that it is not confirmatory but is a quick screening test. If the test is positive, there is a good likelihood that it is due to the presence of semen in the sample. Once a presumptive positive has been confirmed, further testing is done. {¶34} Based on the presumptive positive result, Miller conducted further testing called a differential extraction. That additional testing separates out the sperm cells from the non-sperm cells to provide a “sperm fraction” DNA sample. Miller said that Gadd’s vaginal and anal samples showed two distinct contributors of DNA – Gadd herself and appellant. Miller said that the presence of DNA consistent with appellant’s sample in the sperm fraction test does not “confirm” that appellant’s sperm was present. However, he said the sperm fraction test and the presumptive acid phosphate test both being positive make it “difficult for me to come up with a reasonable alternative to that being the case seeing as the DNA profile that was consistent with Andrew Malachin was in that sperm fraction that I mentioned before.” {¶35} In addition, Miller tested the swab for the socks found in Gadd’s bedroom and the DNA profile for the samples was consistent with appellant. {¶36} The State rested its case and appellant called his wife, Heidi Malachin to testify. Heidi said that on February 5, Gadd met her and appellant at the pool hall. Heidi said that the group was drinking and having conversation. Heidi recalled that she, appellant, and Gadd had four double shots and shared a bucket of beer. She denied seeing appellant prepare a drink for Gadd but did say that appellant poured shots for the 10 Case No. 2022-T-0002 group. Heidi said that all three became intoxicated while they were drinking. Heidi said that after Gadd became sick, the group was in the bar for about an hour after it stopped serving alcohol because they were trying to get Gadd “settled.” She believed that Gadd’s behavior was consistent with intoxication. She denied that Gadd was unable to talk or barely conscious at the time she left the bar. {¶37} She said that after appellant took Gadd home, he texted her around 1:15 a.m. to say he would be staying the night so that Heidi did not have to drive to pick him up. However, she said that Gadd’s uncle brought appellant home around 3:00 a.m. {¶38} According to Heidi, appellant did not remember anything from that night besides arriving at the house, putting Gadd into the bed, taking his shoes off, and passing out. Heidi admitted that on a recorded jail phone call she told appellant that “maybe this will teach you to appreciate what you have at home.” She also agreed that some sex had to have taken place for appellant’s semen to be in Gadd’s vagina and anus. {¶39} Finally, appellant testified on his own behalf. He said that he was at the pool hall all day, but that he was practicing pool and did not start drinking until about 6:00 pm. Appellant said that once Gadd arrived at the pool hall, she ordered a mixed drink for herself and shots for herself, Heidi, and appellant. Appellant explained that the pool hall serves double shots. In total, appellant said that Gadd had two mixed drinks and four double shots. {¶40} Appellant recounted Gadd’s friend Eddie coming up to them and that Gadd was already intoxicated. Eddie offered to take Gadd home and appellant said, “that wasn’t going to happen for the fact that she was as drunk as she was and I didn’t know this guy.” 11 Case No. 2022-T-0002 {¶41} He said that Gadd became sick and was throwing up, needed help in the bathroom, and was stumbling. He said that Gadd mumbled her address, which he used to get her home. Appellant said that he was “pretty buzzed up” by this point of the night. {¶42} Appellant recalled taking Gadd into the house and that she was stumbling and would not have made it in the house without his assistance. He said that her uncle and aunt were sitting in the kitchen. They directed him to the bedroom where he rolled Gadd into bed, put a cover over her, “and that was it.” He said he remembers sitting on the floor and taking his shoes off. Appellant testified that he then passed out. {¶43} He next remembers waking up, leaving Gadd’s room and talking to AV in her room. After that, Gadd’s uncle came and took him home. He said that he did not remember too much of the trip home. {¶44} Appellant addressed his statement to the police that it would be “impossible” that his DNA would be at the scene. He said that he has no clue how his DNA was found and that he was passed out. When asked if he had sex with Gadd, he said that he did not recall. When pressed with the information that his sperm was found in Gadd’s vagina and anus, appellant said that “I would have to have” had sex with Gadd. When asked to admit what he did to Gadd, appellant said “I don’t recall.” He agreed that Gadd was heavily intoxicated and had a present reduction of her abilities that continued for the remainder of the evening. When asked if it was possible that he raped Gadd while she was unconscious, he said that “[a]nything is possible.” {¶45} In closing arguments, the State presented a theory that appellant had drugged Gadd’s drink, which caused her to black out. Appellant’s counsel countered this with information from trial indicating that Gadd herself reached out to appellant to meet 12 Case No. 2022-T-0002 up and that the meeting was unplanned. Counsel argued that it would be highly unlikely that appellant would have planned to drug Gadd. Appellant’s counsel also noted that the State did not provide any evidence that would prove that appellant drugged Gadd, such as a toxicology report. {¶46} After deliberation, the jury returned a guilty verdict for both counts. The two rape counts merged for purposes of sentencing and the State elected to proceed on Count 1, in violation of R.C. 2907.02(A)(1)(c). {¶47} Appellant timely appealed asserting four assignments of error. Assignments of Error and Analysis {¶48} Appellant’s first assignment of error states: {¶49} “[1.] The trial court erred in allowing a conviction despite ineffective assistance of trial counsel.” {¶50} Appellant argues that his trial counsel was ineffective because counsel failed to object when the State sought to substitute its DNA expert and report less than 21 days before trial. Appellant also argues that counsel was ineffective for conceding that appellant’s semen was present in Gadd’s vagina and anus and not thoroughly cross- examining the State’s DNA expert. Finally, appellant argues that trial counsel was ineffective for failing to file a motion in limine and failing to object to the State’s theory that appellant somehow drugged Gadd’s drink to perpetrate a drug-facilitated sexual assault. {¶51} In reviewing an ineffective assistance of counsel claim, the standard we apply is “‘whether counsel's conduct so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result.’” State v. Story, 11th Dist. Ashtabula No. 2006-A-0085, 2007-Ohio-4959, ¶ 49, quoting 13 Case No. 2022-T-0002 Strickland v. Washington, 466 U.S. 668, 686, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). An appellant must demonstrate (1) his counsel was deficient in some aspect of his representation, and (2) there is a reasonable probability, were it not for counsel's errors, the result of the proceedings would have been different. Strickland at 669. “A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Id. A failure to “satisfy one prong of the Strickland test negates a court’s need to consider the other.” State v. Madrigal, 87 Ohio St.3d 378, 389, 2000-Ohio-448, 721 N.E.2d 52, citing Strickland at 697. {¶52} An appellant must be able to demonstrate that “the attorney made errors so serious that he or she was not functioning as ‘counsel’ as guaranteed by the Sixth Amendment,” and that he was prejudiced by the deficient performance. Story, supra, 2007-Ohio-4959, ¶ 49, quoting State v. Batich, 11th Dist. Ashtabula No. 2006-A-0031, 2007-Ohio-2305, ¶ 42. Ohio courts presume that every properly licensed attorney is competent, and therefore a defendant bears the burden of proof. State v. Smith, 17 Ohio St.3d 98, 100, 477 N.E.2d 1128 (1985). “Counsel’s performance will not be deemed ineffective unless and until counsel’s performance is proved to have fallen below an objective standard of reasonable representation and, in addition, prejudice arises from counsel’s performance.” State v. Bradley, 42 Ohio St.3d 136, 142, 538 N.E.2d 373 (1989). “Debatable trial tactics generally do not constitute a deprivation of effective counsel.” State v. Phillips, 74 Ohio St.3d 72, 85, 656 N.E.2d 643 (1995). “Failure to do a futile act cannot be the basis for claims of ineffective assistance of counsel, nor could such a failure be prejudicial.” State v. Henderson, 8th Dist. Cuyahoga No. 88185, 2007–Ohio–2372, at ¶ 42. 14 Case No. 2022-T-0002 Crim.R. 16(K): {¶53} Appellant argues that his trial counsel was ineffective for failing to object to the reworked expert report after the State notified the trial court and appellant that the DNA expert they it intended to call would be on maternity leave during the trial. Appellant states that Crim.R. 16(K) requires that expert witnesses and reports must be provided at least 21 days prior to trial. In this instance, the State provided the name of the new expert and his report only 17 days prior to trail. Appellant therefore believes it was error for trial counsel not to object to the admission of the expert report and expert testimony. He further states that the DNA testimony was severely injurious to his case and was the only definitive evidence that appellant had sex with Gadd. {¶54} Crim.R. 16(K) provides: Expert Witnesses; Reports. An expert witness for either side shall prepare a written report summarizing the expert witness’s testimony, findings, analysis, conclusions, or opinion, and shall include a summary of the expert’s qualifications. The written report and summary of qualifications shall be subject to disclosure under this rule no later than twenty-one days prior to trial, which period may be modified by the court for good cause shown, which does not prejudice any other party. Failure to disclose the written report to opposing counsel shall preclude the expert’s testimony at trial. {¶55} Significantly, appellant does not address the language of the rule that provides that the 21 day “period may be modified by the court for good cause shown, which does not prejudice any other party.” The State’s reworked DNA report is nearly identical to the original report. The new report states that it “replaces the original reports * .” Further, the State’s DNA witness, David Miller testified that laboratory reports are reviewed by a second analyst to confirm the findings. Miller stated that he reviewed the 15 Case No. 2022-T-0002 prior report when it was issued and conducted an entirely new analysis when he was called to testify. {¶56} The State showed good cause for why it submitted a new report an expert witness less than 21 days before trial because its witness was unavailable. Next, the replacement report was virtually identical to the prior report. Therefore, the change did not prejudice appellant. We are to presume that trial counsel is competent and trial counsel’s lack of objection to the new report and witness demonstrates the lack of prejudice rather than ineffective assistance of counsel. See State v. Smith, 17 Ohio St.3d at 100. Cross-examination of DNA Expert: {¶57} Appellant also believes trial counsel was ineffective because he did not conduct a stronger cross-examination of Miller. Particularly, appellant believes that trial counsel should have attacked Miller’s testimony that he could not “actually confirm” the presence of appellant’s semen in Gadd’s vagina and anus. {¶58} Although discussed in more detail below relative to the sufficiency and manifest weight of the evidence, appellant appears to mischaracterize Miller’s testimony. Miler testified that he conducted a preliminary confirmatory test to determine whether semen was present in the tested samples. After that test, Miller conducted a differential extraction to obtain a sperm fraction sample. Miller then tested that sample and found DNA consistent with appellant’s DNA profile in the sperm fraction sample. Miller did not find any unknown or unexpected sources of DNA in that sperm fraction sample. Although Miller did not “confirm” that appellant’s sperm was present in the sperm fraction sample, he did say that it would be “difficult for me to come up with a 16 Case No. 2022-T-0002 reasonable alternative to that being the case seeing as the DNA profile that was consistent with Andrew Malachin was in that sperm fraction that I mentioned before.” {¶59} “‘The scope of cross-examination falls within the ambit of trial strategy * .’” State v. Rogers, 11th Dist. Lake No. 2018-L-119, 2019-Ohio-4834, ¶ 40, quoting State v. Conway, 109 Ohio St.3d 412, 2006-Ohio-2815, 848 N.E.2d 810, ¶ 101. “Debatable trial tactics generally do not constitute a deprivation of effective counsel.” State v. Phillips, 74 Ohio St.3d 72, 85, 656 N.E.2d 643 (1995). We will not second guess trial counsel’s strategic cross-examination questions, particularly as Miller’s testimony thoroughly detailed his analysis. Objection/Motion in limine to State’s Theory of the Case: {¶60} Appellant argues that the State’s drug-facilitated sexual assault theory of the case was not supported by the record. Appellant is correct that the State did not present specific evidence that appellant drugged Gadd or toxicology reports that would indicate the presence of drugs in Gadd’s system. {¶61} The State called Registered Nurse Barbara Turner who discussed drug- facilitated sexual assaults. Appellant suggests that this testimony should have been qualified as expert testimony and argued that Turner did not treat Gadd and that there was no toxicology to support a theory of drug-facilitated sexual assault. {¶62} However, Turner did not specifically allege that appellant drugged Gadd. Turner testified as to her experience with SANE procedures and explained that the term drug-facilitated sexual assault refers to individuals who are under the influence of drugs or alcohol. The term does not necessarily mean that a perpetrator has administered drugs 17 Case No. 2022-T-0002 or alcohol to a victim. Instead, it broadly indicates that drugs or alcohol incapacitate a person who is then subjected to a sexual assault. {¶63} The State openly acknowledged that it had no direct proof that appellant did anything specifically to Gadd’s drink to incapacitate her. However, there was circumstantial evidence that warranted the State’s theory. Gadd testified that appellant told her he would make her a drink and that she quickly fell violently ill and blacked out after consuming only half of the drink he said he would make for her. Other witnesses, including Benetis and AV indicated that she did not seem to be merely intoxicated and both used the phrase “out of it” to describe her condition. Indeed, appellant himself agreed that Gadd had a present reduction of her abilities that continued during the night. {¶64} Further, Benetis testified that appellant had a habit of making his own drinks, despite her telling him on prior occasions not to do so. She further testified that she saw him making drinks that day, although she denied seeing him prepare the specific drink in question. {¶65} The State’s drug-facilitated sexual assault theory of the case certainly had support and an objection to the introduction of that theory would not likely have been successful. Trial counsel addressed the logic of the State’s drug-facilitated sexual assault theory during closing arguments rather than through an objection to the theory per se. In doing so, trial counsel allowed the State to present a theory of the case that appellant could counter as being illogical and therefore untrue. This amounts to a tactical decision, and we will not second guess that approach. {¶66} Accordingly, appellant’s first assignment of error is without merit. {¶67} Appellant’s second and third assignments of error state: 18 Case No. 2022-T-0002 {¶68} “[2.] The trial court erred in allowing a conviction where it was not supported by sufficient evidence.” {¶69} “[3.] The trial court erred in entering judgment on the verdict against the manifest weight of the evidence.” {¶70} Appellant asserts that his conviction was not supported by sufficient evidence and that it was against the manifest weight of the evidence. In support of this, he argues that the State’s DNA expert could not confirm the presence of sperm in the tested samples, that Gadd was unable to recall the rape, that Gadd suffered no physical injury, that the State did not prove that Gadd’s drink was drugged or that appellant drugged it, appellant testified that he did not remember having sex with Gadd, and that no witness witnessed or heard any sexual encounter at all. Sufficiency of the Evidence: {¶71} “‘Sufficiency’ is a term of art meaning that legal standard which is applied to determine whether the case may go to the jury or whether the evidence is legally sufficient to support the jury verdict as a matter of law.” State v. Thompkins, 78 Ohio St. 3d 380, 386, 678 N.E.2d 541 (1997), quoting Black's Law Dictionary (6 Ed.1990) 1433; See also Crim.R. 29(A). The appellate court’s standard of review for sufficiency of evidence is to determine, after viewing the evidence in a light most favorable to the prosecution, whether a rational trier of fact could find the essential elements of the crime proven beyond a reasonable doubt. State v. Jenks, 61 Ohio St. 3d 259, 574 N.E.2d 492 (1991), paragraph two of the syllabus. {¶72} When evaluating the sufficiency of the evidence, we do not consider its credibility or effect in inducing belief. Thompkins at 387. Rather, we decide whether, if 19 Case No. 2022-T-0002 believed, the evidence can sustain the verdict as a matter of law. Id. This naturally entails a review of the elements of the charged offense and a review of the State’s evidence. State v. Richardson, 150 Ohio St.3d 554, 2016-Ohio-8448, 84 N.E.3d 993, ¶ 13. Manifest Weight of the Evidence: {¶73} “Although a court of appeals may determine that a judgment of a trial court is sustained by sufficient evidence, that court may nevertheless conclude that the judgment is against the weight of the evidence.” Thompkins, 78 Ohio St. 3d at 389. Weight of the evidence concerns “the inclination of the greater amount of credible evidence, offered in a trial, to support one side of the issue rather than the other. It indicates clearly to the jury that the party having the burden of proof will be entitled to their verdict, if, on weighing the evidence in their minds, they shall find the greater amount of credible evidence sustains the issue which is to be established before them.” (Emphasis sic.) Id. at 386, quoting Black’s Law Dictionary 1594 (6th Ed.1990). {¶74} “When a court of appeals reverses a judgment of a trial court on the basis that the verdict is against the weight of the evidence, the appellate court sits as a ‘thirteenth juror’ and disagrees with the factfinder’s resolution of the conflicting testimony.” Id. {¶75} The reviewing court “weighs the evidence and all reasonable inferences, considers the credibility of witnesses and determines whether in resolving conflicts in the evidence, the jury clearly lost its way and created such a manifest miscarriage of justice that the conviction must be reversed and a new trial ordered. The discretionary power to grant a new trial should be exercised only in the exceptional case in which the evidence 20 Case No. 2022-T-0002 weighs heavily against the conviction.” Id. at 387, quoting State v. Martin, 20 Ohio App.3d 172, 175, 485 N.E.2d 717 (1st Dist.1983). {¶76} The trier of fact is the sole judge of the weight of the evidence and the credibility of the witnesses. State v. Landingham, 11th Dist. Lake No. 2020-L-103, 2021- Ohio-4258, ¶ 22, quoting State v. Antill, 176 Ohio St. 61, 67, 197 N.E.2d 548 (1964). The trier of fact may believe or disbelieve any witness in whole or in part, considering the demeanor of the witness and the manner in which a witness testifies, the interest, if any of the outcome of the case and the connection with the prosecution or the defendant. Id., quoting Antil at 67. This court, engaging in the limited weighing of the evidence introduced at trial, must defer to the weight and factual findings made by the jury. State v. Brown, 11th Dist. Trumbull No. 2002-T-0077, 2003-Ohio-7183, ¶ 52, citing Thompkins at 390 and State v. DeHass, 10 Ohio St.2d 230, 227 N.E.2d 212 (1967), paragraph two of the syllabus. {¶77} A finding that a judgment is supported by the manifest weight of the evidence necessarily means the judgment is supported by sufficient evidence. State v. Arcaro, 11th Dist. Ashtabula No. 2012-A-0028, 2013-Ohio-1842, ¶ 32. {¶78} In this case, appellant was convicted of Rape in violation of R.C. 2907.02(A)(1)(c) which provides that: No person shall engage in sexual conduct with another who is not the spouse of the offender or who is the spouse of the offender but is living separate and apart from the offender, when any of the following applies: ** (c) The other person's ability to resist or consent is substantially impaired because of a mental or physical condition or because of advanced age, and the offender knows or has reasonable cause to believe that the other person's ability to resist or consent is 21 Case No. 2022-T-0002 substantially impaired because of a mental or physical condition or because of advanced age. R.C. 2907.01(A) defines “sexual conduct” as: vaginal intercourse between a male and female; anal intercourse, fellatio, and cunnilingus between persons regardless of sex; and, without privilege to do so, the insertion, however slight, of any part of the body or any instrument, apparatus, or other object into the vaginal or anal opening of another. Penetration, however slight, is sufficient to complete vaginal or anal intercourse. {¶79} We must therefore determine whether the jury lost its way and created a manifest miscarriage of justice in finding appellant guilty of Rape under R.C. 2907.02. To do so, we will address each of appellant’s arguments in turn. DNA Evidence: {¶80} The State presented evidence through Miller, its DNA expert, that appellant’s DNA was present in the rape kit samples. Miller’s testimony did not “confirm” that appellant’s sperm was present in Gadd’s vaginal or anal samples. However, Miller stated that he conducted a presumptive test which indicated the presence of semen in the tested samples. Miller said that after conducting the presumptive test, that he completed a differential extraction which separates sperm cells from the sample. He tested that “sperm fraction” sample and concluded that appellant’s DNA was present in the sample. Although Miller could not “confirm” that appellant’s sperm was present, he said that it would be difficult to think of any other possible explanation. {¶81} Further, Miller did confirm that appellant’s DNA was present in both the anal and vaginal samples. Importantly, ejaculation is not necessary to complete the crime of rape. It hardly matters whether appellant’s sperm was present when his DNA was found in the vaginal and anal samples because that alone demonstrates that appellant engaged 22 Case No. 2022-T-0002 in vaginal and anal sexual intercourse with Gadd. This alone is demonstrative that appellant engaged in sexual conduct with Gadd. Gadd’s Lack of Memory and Gadd’s Lack of Physical Injury: {¶82} Next, appellant argues that Gadd’s lack of memory and lack of physical trauma precludes finding that she was sexually assaulted. Despite Gadd’s lack of memory, the State presented significant circumstantial evidence that appellant engaged in sexual conduct with Gadd while she was unconscious. Such evidence included appellant not wearing a shirt as he left Gadd’s room and Gadd’s physical discomfort when she woke. Further, the State presented direct evidence of sexual conduct because a DNA profile consistent with appellant was present in the samples recovered from Gadd. Gadd’s lack of memory demonstrated her inability to resist or consent. Multiple witnesses attested to her diminished state. That diminished state, coupled with the DNA profile consistent with appellant’s in the vaginal and anal samples, is strong evidence that appellant engaged in sexual conduct with Gadd when he had reasonable cause to believe that she could not resist or consent. {¶83} As to physical injury, the State presented evidence from registered nurse Barbara Turner that physical injury is uncommon in cases of drug-facilitated sexual assault. Gadd testified that she woke up with rectal pain and other witnesses noted that she appeared uncomfortable lying on her back. A.V. noticed red discoloration in the water when showering Gadd. While Gadd’s sexual assault examination did not indicate any visible physical injury, the report did note that Gadd was complaining of rectal tenderness. In light of the other evidence in this case, the lack of physical injury does not demonstrate a lack of evidence of sexual assault. 23 Case No. 2022-T-0002 Drug-Facilitated Sexual Assault: {¶84} The State presented a case dependent on drug-facilitated sexual assault. However, appellant’s argument is that the State did not put forth evidence to support this theory. Although the State suggested that appellant may have drugged Gadd’s drink, the State’s theory of the case did not necessarily depend on proof that appellant drugged Gadd or that Gadd had drugs in her system. Instead, the State presented clear evidence that Gadd’s ability to resist or consent had been substantially impaired because of her physical condition. The Ohio Supreme Court has held that a “condition” under R.C. 2907.02(A)(1)(C) is “something that affects the victim independently” and need not be a condition caused by the accused. State v. Horn, 159 Ohio St.3d 539, 2020-Ohio-960, 152 N.E.3d 241, ¶ 10. {¶85} Whether as the result of alcohol consumption or an illicit drug placed in her drink, Gadd testified that she remembers very little after she drank half of the drink appellant prepared for her. She said that she became violently ill, vomited, defecated, and lost the ability to stand. Other witnesses confirmed this. A.V. and Benetis both described Gadd’s condition as being “out of it” and Benetis did not believe Gadd’s condition was consistent with the number of drinks Gadd had consumed. Benetis said that Gadd could barely communicate. Multiple witnesses, including appellant, indicated that Gadd had trouble standing or walking. Heidi testified that Gadd’s level of drunkenness was a “nine” on a scale of “ten”, but she was unable to describe what additional factors would constitute a “ten.” {¶86} Further, appellant himself acknowledged that Gadd’s ability to consent or resist had been substantially impaired and that impairment continued throughout the 24 Case No. 2022-T-0002 night. Therefore, appellant had reasonable cause to believe that Gadd’s ability to resist or consent was substantially impaired. Whether that impairment was the result of alcohol or drugs, appellant knew that Gadd’s physical condition rendered her unable to resist or consent. Appellant’s lack of memory: {¶87} Appellant’s testimony at trial was that after he brought Gadd into her room, he passed out on the floor. Appellant claimed that he could not remember having sex with Gadd. He was unable to deny that he raped Gadd and said that “[a]nything is possible.” {¶88} However, during his recorded interview, appellant had a clear and articulate recollection from the night. His recorded statement to Detective Shuster did not indicate any gaps or lapses in memory and he did not say that he blacked out at any point. {¶89} It is compelling evidence that appellant’s testimony was so vague and that he insisted that he could not recall having sex with Gadd when he previously had seemingly clear recollection. Lack of Witnesses to sexual encounter: {¶90} Although no witness could testify that a sexual encounter took place much less that appellant sexually assaulted Gadd, this lack of witness testimony does not render appellant’s conviction against the manifest weight of the evidence. John and Cheyanne Grove testified that they saw appellant in the house without a shirt, shoes, or socks on. A.V. said that appellant was in Gadd’s room for 15-20 minutes and that he came out without a shirt, shoes, or socks. Gadd testified that she woke up with rectal pain and other witnesses noted that she appeared uncomfortable lying on her back. A.V. noticed red discoloration in the water when showering Gadd. Finally, as discussed above, 25 Case No. 2022-T-0002 the DNA consistent with appellant’s profile was evidence that he engaged in sexual conduct with Gadd. {¶91} In viewing the evidence in a light most favorable to the State, there was sufficient evidence to convict appellant of engaging in sexual conduct with Gadd when appellant had reasonable cause to believe that Gadd’s ability to resist was substantially impaired because of a then existing physical condition. Further, the greater amount of credible evidence supports appellant’s conviction. The State was entitled to its verdict. This is not the exceptional case in which the evidence weighs heavily against conviction. {¶92} Accordingly, appellant’s second and third assignments of error are without merit. {¶93} Appellant’s fourth assignment of error states: {¶94} “[4.] As amended by the Reagan Tokes Act, the Revised Code’s sentences for qualifying felonies violates the constitutions of the United State and the State of Ohio.” {¶95} In this assignment of error, appellant challenges the constitutionality of R.C. 2967.271, the Reagan Tokes Law. Based on this District’s recent holdings in State v. Reffitt, 11th Dist. Lake Case No. 2021-L-129, 2022-Ohio-3371, and State v. Joyce, 11th Dist. Lake Case No. 2021-L-006, 2022-Ohio-3370, the challenges that appellant advances against the constitutionality of the Reagan Tokes Law have previously been overruled. Appellant does not advance any novel argument left unaddressed by our prior decisions. {¶96} Pursuant to the above authorities, appellant’s challenges to the constitutionality of the Reagan Tokes Law are overruled. {¶97} Accordingly, appellant’s fourth assignment of error is without merit. 26 Case No. 2022-T-0002 {¶98} For the foregoing reasons, the judgment of the Trumbull County Court of Common Pleas is affirmed. THOMAS R. WRIGHT, P.J., MARY JANE TRAPP, J., concur. 27 Case No. 2022-T-0002	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483657/	[Cite as State v. Lefkowitz, 2022-Ohio-4052.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY STATE OF OHIO, CASE NO. 2021-T-0054 Plaintiff-Appellee, Criminal Appeal from the - vs - Court of Common Pleas CRAIG N. LEFKOWITZ, Trial Court No. 2021 CR 00417 Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed Dennis Watkins, Trumbull County Prosecutor, and Ryan J. Sanders, Assistant Prosecutor, Administration Building, Fourth Floor, 160 High Street, N.W., Warren, OH 44481 (For Plaintiff-Appellee). John B. Juhasz, 7081 West Boulevard, Suite 4, Youngstown, OH 44512 (For Defendant- Appellant). MARY JANE TRAPP, J. {¶1} Appellant, Craig N. Lefkowitz (“Mr. Lefkowitz”), appeals from the judgment of the Trumbull County Court of Common Pleas, which sentenced him to an eight-year term of imprisonment following his guilty pleas to four counts of sexual battery and one count of compelling prosecution. Mr. Lefkowitz was a technology teacher and an athletic director at Southington Local Schools, who used his former position to engage in an inappropriate relationship with a minor student. {¶2} Mr. Lefkowitz raises two assignments of error on appeal, contending that the trial court erred in imposing consecutive sentences without making the statutory findings pursuant to R.C. 2929.14(C)(4) and in imposing maximum sentences. {¶3} After a careful review of the record and pertinent law, we find Mr. Lefkowitz’s assignments of error are without merit. Firstly, the trial court considered the R.C. 2929.14(C)(4) factors both at the sentencing hearing and in the sentencing judgment entry. The trial court is not required to state a “talismanic incantation” of the statute, and the necessary findings are supported by evidence in the record and incorporated in the judgment entry. Secondly, the trial court is no longer required to make findings on the record to support the imposition of a maximum sentence. Mr. Lefkowitz’s argument that he is a first-time offender is unpersuasive. The trial court made numerous findings at the hearing, including noting the severe, psychological harm the victim suffered and the evidence of the multiple offenses Mr. Lefkowitz committed, some in the presence of other minors, while using his position of trust as a teacher and athletic director to do so. {¶4} The judgment of the Trumbull County Court of Common Pleas is affirmed. Substantive and Procedural History {¶5} A Trumbull County Grand Jury indicted Mr. Lefkowitz on nine counts of sexual battery, third-degree felonies, in violation of R.C. 2907.03(A)(7) and (B), and one count of compelling prostitution, a third-degree felony, in violation of R.C. 2907.21(A)(3) and (B). {¶6} Ultimately, Mr. Lefkowitz entered into a plea agreement with the state and pleaded guilty to four counts of sexual battery and one count of compelling prostitution. {¶7} At the sentencing hearing, the trial court declared Mr. Lefkowitz a Tier III sex offender and informed him of the registration requirements. The trial court reviewed that Mr. Lefkowitz served alcohol to underage students, developed a big brother relationship with a minor male student so he could manipulate him, showed him pornography, performed sexual acts with him, paid him money, took nude pictures of him, 2 Case No. 2021-T-0054 took the minor victim on a road trip, where he gave the student alcohol and had sex with him, kept a notebook with a nude picture of the minor victim, and kept a sample of his pubic hairs. As a result, the minor male victim has serious psychological issues, tried to ease his pain with alcohol and drug addictions, has a broken marriage, and suffered for years as a victim of sexual abuse. While Mr. Lefkowitz was being investigated by the sheriff’s department, he attempted to bribe the victim not to reveal the incidents. The trial court further noted that Mr. Lefkowitz used his position as a teacher and an athletic director, like many other predators, to violate his victim. {¶8} The court then made the following specific findings: the mental injury suffered by the victim due to Mr. Lefkowitz’s conduct was exacerbated because of the age of the victim, and the victim suffered and will continue to suffer serious psychological harm. Mr. Lefkowitz’s manipulation of his relationship as a teacher with the student victim facilitated the offense. Mr. Lefkowitz is likely to commit future sex crimes of the same nature. He committed the offense in the vicinity of other children who were not victims of the offense; he accepted no genuine responsibility for the offenses; and he has “a dearth of remorse” for the crimes he committed. {¶9} The trial court imposed consecutive sentences, stating, “Pursuant to R.C. 2929.14, the Court finds that consecutive sentences are necessary to protect the public from future crimes by the Defendant, consecutive sentences are not disproportionate to the seriousness of the Defendant’s conduct, and due to the conduct of the Defendant a single prison term would not adequately reflect the seriousness of the conduct of the Defendant.” {¶10} The court then sentenced Mr. Lefkowitz to 60 months in prison on each count of sexual battery, concurrent to each other, and 36 months in prison on the count 3 Case No. 2021-T-0054 of compelling prostitution, to be served consecutively to the concurrent 60-month terms, for a total of 96 months or eight years in prison. {¶11} The sentencing entry reflects that the court found “consecutive service is necessary to protect the public from future crime and to punish the Defendant, and that consecutive sentences are not disproportionate to the seriousness of the Defendant’s conduct and to the danger the Defendant poses to the public. Further, the Court finds that at least two of the multiple offenses were committed as part of the same course of conduct, and the harm caused by two or more of the multiple offenses so committed was so great that no single prison term for any of the offenses committed adequately reflects the seriousness of the offender’s conduct.” {¶12} Mr. Lefkowitz raises two assignments of error on appeal: {¶13} “[1.] The trial court abused it[s] discretion and committed plain error when sentencing Mr. Lefkowitz to a consecutive prison sentence for a violation of OHIO REV. CODE ANN. §2907.219(A)(3) when the court did not also find that the offenses were committed while Mr. Lefkowitz was awaiting trial or sentencing, under post-release control or awaiting another sanction, the offense was not so great or unusual, or that Mr. LEFKOWITZ’s criminal history demonstrates that consecutive sentences are necessary. {¶14} “[2.] The trial Court Erred in Sentencing Appellant to Maximum Sentences.” Plain Error Standard of Review {¶15} Mr. Lefkowitz did not object to his sentence in the trial court, thus our review is limited to consideration of whether the trial court committed plain error. State v. Ferrell, 11th Dist. Portage No. 2017-Ohio-0069, 2019-Ohio-836, ¶ 36. In order to prevail under a plain error standard, an appellant must demonstrate that there was an obvious error in the proceedings and, but for the error, the outcome would have been otherwise. State v. 4 Case No. 2021-T-0054 Waxler, 2016-Ohio-5435, 69 N.E.3d 1132, ¶ 7 (6th Dist.), citing State v. Noling, 98 Ohio St.3d 44, 2002-Ohio-7044, 781 N.E.2d 88, ¶ 62. Consecutive Sentences {¶16} R.C. 2953.08(G)(2) provides that when reviewing felony sentences, a reviewing court may overturn the imposition of consecutive sentences where the court “clearly and convincingly” finds that (1) “the record does not support the sentencing court’s findings under * * * [R.C. 2929.14(C)(4)] * * *,” or (2) “the sentence is otherwise contrary to law.” {¶17} R.C. 2929.14(C)(4) provides that in order to impose consecutive sentences, the trial court must find (1) that consecutive sentences are necessary to protect the public from future crime or to punish the offender, (2) that such sentences are not disproportionate to the seriousness of the conduct and to the danger the offender poses to the public, and (3) that one of the following applies: {¶18} (a) The offender committed one or more of the multiple offenses while the offender was awaiting trial or sentencing, was under a sanction imposed pursuant to section 2929.16, 2929.17, or 2929.18 of the Revised Code, or was under postrelease control for a prior offense. {¶19} (b) At least two of the multiple offenses were committed as part of one or more courses of conduct, and the harm caused by two or more of the multiple offenses so committed was so great or unusual that no single prison term for any of the offenses committed as part of any of the courses of conduct adequately reflects the seriousness of the offender’s conduct. {¶20} (c) The offender’s history of criminal conduct demonstrates that consecutive sentences are necessary to protect the public from future crime by the offender. 5 Case No. 2021-T-0054 {¶21} The Supreme Court of Ohio has held that “[i]n order to impose consecutive terms of imprisonment, a trial court is required to make the findings mandated by R.C. 2929.14(C)(4) at the sentencing hearing and incorporate its findings into its sentencing entry, but it has no obligation to state reasons to support its findings.” State v. Bonnell, 140 Ohio St.3d 209, 2014-Ohio-3177, 16 N.E.3d 659, syllabus. {¶22} “[W]hile the court has the obligation to make separate and distinct findings under R.C. 2929.14(C)(4) before imposing sentence, support for those findings may appear anywhere in the ‘record’ and not just at the time the court imposes consecutive sentences.” State v. Venes, 2013-Ohio-1891, 992 N.E.2d 453 ¶ 22 (8th Dist.). {¶23} The Supreme Court of Ohio has explained that “as long as the reviewing court can discern that the trial court engaged in the correct analysis and can determine that the record contains evidence to support the findings, consecutive sentences should be upheld.” Bonnell at ¶ 29. {¶24} As our review of the sentencing hearing and sentencing entry reveals, the trial court made the necessary findings pursuant to R.C. 2929.14(C) and incorporated those findings in the sentencing entry. Thus, the trial court found at the hearing, pursuant to R.C. 2929.14(C)(4), that consecutive sentences were (1) “necessary to protect the public from future crime” and (2) “not disproportionate to the seriousness” of Mr. Lefkowitz’s conduct. Pursuant to R.C. 2929.14(C)(4)(b), the trial court found that (3) “due to the conduct of the Defendant a single prison term would not adequately reflect the seriousness” of Mr. Lefkowitz’s conduct. {¶25} Preceding these findings, the court reviewed Mr. Lefkowitz’s multiple offenses, including using his position of trust as a teacher to manipulate the minor male victim, giving alcohol to his underage students, taking the victim on a trip where they drank 6 Case No. 2021-T-0054 alcohol and engaged in sexual relations, taking nude photographs of the minor victim, and showing the victim pornography. {¶26} Thus, Mr. Lefkowitz failed to demonstrate that the trial court did not make the “necessary findings” or that there was no evidence supporting the trial court’s findings in the imposition of consecutive sentences pursuant to R.C. 2929.14(C)(4). {¶27} Mr. Lefkowitz’s first assignment of error is without merit. Maximum Sentences {¶28} In his second assignment of error, Mr. Lefkowitz contends the trial court erred in sentencing him to maximum terms of imprisonment because he is a first-time offender and fifteen years have passed since these offenses were committed without Mr. Lefkowitz reoffending. {¶29} Whether Mr. Lefkowitz is a first-time offender is not necessarily determinative in the court’s findings of the term of an offender’s individual sentence. We explained in State v. Burrell, 11th Dist. Portage Nos. 2020-P-0026, 2020-P-0027, & 2020- P-0028, 2020-Ohio-6685, that relative to the imposition of maximum sentences, the Supreme Court of Ohio has declared that trial courts have full discretion to impose a prison sentence within the statutory range and are no longer required to make findings or give their reasons for imposing maximum or more than minimum sentences. Id. at ¶ 9; see State v. Foster, 109 Ohio St.3d 1, 2006-Ohio-856, 845 N.E.2d 470, paragraph seven of the syllabus. {¶30} Even though the trial court is not required to make findings, as our review of the sentencing hearing indicates, the trial court made numerous findings to support its imposition of maximum sentences for sexual battery and compelling prostitution, including the serious harm the victim suffered and Mr. Lefkowitz’s multiple offenses involving the 7 Case No. 2021-T-0054 victim, some in the presence of other minors. Further, Mr. Lefkowitz used his position as a teacher and athletic director for his school as a vehicle to commit those crimes. See State v. O’Connor, 2d Montgomery No. 28259, 2020-Ohio-4402, ¶ 41 (finding unpersuasive the argument that maximum sentences were unwarranted because the appellant was a first-time felony offender). {¶31} Quite simply, Mr. Lefkowitz’s sentence is within the statutory range, and he has failed to demonstrate an obvious error. {¶32} Mr. Lefkowitz’s second assignment of error is without merit. {¶33} The judgment of the Trumbull County Court of Common Pleas is affirmed. MATT LYNCH, J., JOHN J. EKLUND, J., concur. 8 Case No. 2021-T-0054	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483649/	[Cite as State v. Watters, 2022-Ohio-4060.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY STATE OF OHIO, CASE NO. 2022-T-0015 Plaintiff-Appellee, Criminal Appeal from the -v- Court of Common Pleas GEORGE F. WATTERS, JR., Trial Court No. 2021 CR 00662 Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed Dennis Watkins, Trumbull County Prosecutor, Administration Building, Fourth Floor, 160 High Street, N.W., Warren, OH 44481 (For Plaintiff-Appellee). Katherine E. Rudzik, 26 Market Street, #904, Youngstown, OH 44503 (For Defendant- Appellant). MATT LYNCH, J. {¶1} Defendant-appellant, George F. Watters, Jr., appeals his conviction for Aggravated Possession of Methamphetamine following a jury trial in the Trumbull County Court of Common Pleas. For the following reasons, the conviction is affirmed. {¶2} On October 7, 2021, the Trumbull County Grand Jury returned an Indictment against Watters charging him with Aggravated Possession of Methamphetamine, a felony of the fifth degree in violation of R.C. 2925.11(A) and (C)(1)(a). {¶3} On February 1, 2022, the case was tried before a jury. The following testimony was presented at trial: {¶4} Detective Adam Gilger of the Warren City Police Department testified that, on October 12, 2020, he observed a pickup truck on Palmyra Road fail to signal when turning. Gilger ran the truck’s license plate through his MDT (mobile data terminal) and learned that the owner of the vehicle had an expired driver’s license. Gilger stopped the truck on Southwest Boulevard. Watters was the owner and driver of the truck and there was a female passenger, Heather Parker. {¶5} As Detective Gilger approached the vehicle, he observed that Parker “had a large bag on her lap and * * * she was reaching into [it] * * * and move[d] it to the floor,” while Watters was “reaching towards the center console.” Gilger kept his “eyes on her the whole time” thinking she might have a weapon. When she pulled her (right) hand from the bag, it was empty. {¶6} Gilger described Watters as sweating and shaking, “making weird movements that didn’t really make too much sense.” Parker had a warrant out for her arrest and she was removed from the vehicle. Because Watters’ license was expired Gilger decided to tow the truck. While conducting an inventory search of the vehicle, he discovered “a meth pipe in between the driver’s seat and the console stuffed * * * tightly between the seat.” Gilger also found a bag of methamphetamine on a shelf underneath the radio in the center console. There was a pack of cigarettes on top of the bag of methamphetamine. Watters was smoking during the stop. {¶7} Watters testified that, on the night in question, he had picked up Parker, his “girlfriend-kind of,” at her friend’s house and was driving her home. He denied having any 2 Case No. 2022-T-0015 methamphetamine in his possession. He was aware that Parker had a large bag, but did not pay much attention to anything she did. {¶8} The jury found Watters guilty of Aggravated Possession of Methamphetamine. {¶9} Watters’ sentencing hearing was held on February 18, 2022. The trial court sentenced him to one year in prison. Watters’ sentence was memorialized in a February 22, 2022 Entry on Sentence. {¶10} On March 2, 2022, Watters filed a Notice of Appeal. Counsel for Watters subsequently filed an Anders Brief and Motion to Withdraw pursuant to Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967), indicating that she could “find no error by the trial court prejudicial to the rights of appellant.” Counsel requested this court “review the following potential assignments of error: (1) whether the trial court erred by imposing the maximum prison sentence; and (2) whether the verdict was against the weight and sufficiency of the evidence.” {¶11} Under Anders, appellate counsel must conduct a conscientious examination of the case and, if the appeal is found to be wholly frivolous, counsel should so advise the court and request permission to withdraw. “A ‘frivolous’ appeal pursuant to Anders is ‘one that presents issues lacking in arguable merit.’” (Citation omitted.) State v. Pal, 11th Dist. Ashtabula No. 2021-A-0007, 2021-Ohio-3706, ¶ 16. “‘An issue lacks arguable merit if, on the facts and law involved, no responsible contention can be made that it offers a basis for reversal.’” (Citation omitted.) Id. The appellant is furnished with a copy of the Anders brief and given the opportunity to raise additional issues. Thereafter, this court must review the entire record to determine whether the appeal is wholly 3 Case No. 2022-T-0015 frivolous. If this court is unable to find issues of arguable merit, the decision is affirmed on the merits and counsel is allowed to withdraw. State v. Wright, 11th Dist. Ashtabula No. 2021-A-0029, 2022-Ohio-2100, ¶ 5. {¶12} Watters has not raised additional issues for review. Accordingly, we will proceed to consider counsel’s proposed assignments of error. {¶13} In the first proposed assignment, counsel proposed that this court review the sentence imposed. Watters received a one-year prison sentence, the maximum potential sentence for a felony of the fifth degree. R.C. 2929.14(A)(5). {¶14} “The appellate court may increase, reduce, or otherwise modify a sentence that is appealed under this section or may vacate the sentence * * * if it clearly and convincingly finds * * * [t]hat the sentence is * * * contrary to law.” R.C. 2953.08(G)(2)(b). Presently in Ohio, “[t]rial courts have full discretion to impose a prison sentence within the statutory range and are [not] required to make findings or give their reasons for imposing maximum * * * or more than the minimum sentences.” (Citation omitted.) State v. Vieira, 11th Dist. Lake No. 2021-L-110, 2022-Ohio-1636, ¶ 12. {¶15} In State v. Jones, 163 Ohio St.3d 242, 2020-Ohio-6729, 169 N.E.3d 649, the Ohio Supreme Court held that the phrase “contrary to law” meant, at the time of R.C. 2953.08’s enactment, a sentence “in violation of statute or legal regulations at a given time.” (Citation omitted.) Id. at ¶ 34. The Court noted that, since R.C. 2953.08’s enactment, none of the amendments to the statute have “materially changed R.C. 2953.08(G)(2)” with respect to the phrase “otherwise contrary to law.” Id. at ¶ 37. In State v. Bryant, __ Ohio St.3d __, 2022-Ohio-1878, __ N.E.3d __, the Court clarified that, “when a trial court imposes a sentence based on factors or considerations that are extraneous 4 Case No. 2022-T-0015 to those [seriousness and recidivism factors] that are permitted by R.C. 2929.11 and 2929.12, that sentence is contrary to law.” Id. at ¶ 22. {¶16} Watters’ sentence is within the statutory range for a fifth-degree felony. The only indication given by the trial court as to its reasoning for imposing the sentence it did was the recollection that, at trial, Watters “attempted to blame somebody other than [himself] for the drugs involved in this case.” This consideration is not extraneous to the factors contained in R.C. 2929.11 and 2929.12. Compare R.C. 2929.12(D)(5) (“[t]he offender shows no genuine remorse for the offense”). We find no grounds for challenging Watters’ sentence. {¶17} Counsel also requested review of the sufficiency and manifest weight of the evidence supporting Watters’ conviction. A challenge to the sufficiency of the evidence raises the issue of “whether the evidence is legally sufficient to support the jury verdict as a matter of law.” State v. Clinton, 153 Ohio St.3d 422, 2017-Ohio-9423, 108 N.E.3d 1, ¶ 165. In reviewing the sufficiency of the evidence, “[t]he relevant inquiry is whether, after viewing the evidence in a light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime proven beyond a reasonable doubt.” State v. Jenks, 61 Ohio St.3d 259, 574 N.E.2d 492 (1991), paragraph two of the syllabus. {¶18} In contrast to sufficiency, “weight of the evidence addresses the evidence’s effect of inducing belief.” (Citation omitted.) State v. Wilson, 113 Ohio St.3d 382, 2007- Ohio-2202, 865 N.E.2d 1264, ¶ 25. An appellate court must consider all the evidence in the record, the reasonable inferences, the credibility of the witnesses, and whether, “in resolving conflicts in the evidence, the jury clearly lost its way and created such a manifest 5 Case No. 2022-T-0015 miscarriage of justice that the conviction must be reversed and a new trial ordered.” (Citation omitted.) State v. Thompkins, 78 Ohio St.3d 380, 387, 678 N.E.2d 541 (1997). {¶19} In order to convict Watters of Aggravated Possession of Methamphetamine, the State had to prove, beyond a reasonable doubt, that he “knowingly * * * possess[ed]” methamphetamine.1 R.C. 2925.11(A). The only material issue at trial was whether Watters possessed the methamphetamine recovered from his truck. {¶20} Possession is defined as “having control over a thing or substance, but may not be inferred solely from mere access to the thing or substance through ownership or occupation of the premises upon which the thing or substance is found.” R.C. 2925.01(K). “Constructive possession exists when an individual knowingly exercises dominion and control over an object, even though that object may not be within his immediate physical possession.” (Citation omitted.) State v. Perry, 11th Dist. Lake No. 2021-L-005, 2021- Ohio-2183, ¶ 27. “The discovery of readily accessible drugs in close proximity to the accused constitutes circumstantial evidence that the accused was in constructive possession of the drugs.” (Citation omitted.) State v. Mickey, 12th Dist. Clermont Nos. CA2019-07-055 and CA2019-07-056, 2020-Ohio-1432, ¶ 27. {¶21} In the present case, there was sufficient evidence to establish Watters’ constructive possession of the methamphetamine by virtue of the location of the drug in the console of his truck where he was able to exercise ready dominion and control over it. State v. Meddock, 2017-Ohio-4414, 93 N.E.3d 43, ¶ 59 (4th Dist.) (although “[a] defendant’s mere presence in an area where drugs are located does not conclusively 1. The weight and identity of the methamphetamine recovered from Watters’ truck were stipulated to at trial. 6 Case No. 2022-T-0015 establish constructive possession, * * * readily usable drugs found in very close proximity to a defendant may constitute circumstantial evidence and support a conclusion that the defendant had constructive possession”) (citation omitted). {¶22} Moreover, the evidence weighed heavily in favor of the jury’s finding that Watters knowingly exercised ready dominion and control over the methamphetamine. There was a pipe used for smoking methamphetamine found between the driver’s seat and the console dividing the driver’s seat from the passenger’s seat. Detective Gilger observed Watters “touching that exact area” where the methamphetamine was found whereas Parker’s hand was inside her bag and he did not see her remove anything from the bag. Parker was also removed from the truck first so that, from the time the stop was initiated, she was never alone in the truck. Finally, Watters was smoking a cigarette during the stop and his package of cigarettes was lying on top of the methamphetamine. Moreover, we note that Watters need not be the owner or the source of the methamphetamine in order for his conviction to be sustained. That is, the methamphetamine could have belonged to Parker and Watters still would have been found guilty if the jury believed he knowingly exercised dominion and control over it. State v. Fester, 2021-Ohio-410, 167 N.E.3d 1021, ¶ 58 (12th Dist.) (“[t]wo or more persons may have possession of an object together if they have the ability to control it, exclusive of others”) (citation omitted). {¶23} Accordingly, we find no grounds for challenging Watters’ conviction based on the sufficiency or manifest weight of the evidence. {¶24} Finally, as part of this court’s duty to review the entire record, we will consider briefly the possibility that Watters received ineffective assistance of counsel 7 Case No. 2022-T-0015 resulting from counsel’s failure to challenge the stop and seizure of the truck and/or counsel’s trial performance. {¶25} The legitimacy of the stop cannot be reasonably disputed as Detective Gilger observed a traffic violation (failure to signal) and determined that the vehicle’s owner did not have a valid license. State v. Lewis, 11th Dist. Geauga No. 2021-G-0034, 2022-Ohio-3006, ¶ 19 (“[s]everal appellate districts in Ohio have held that an officer has reasonable suspicion to conduct a stop when he determines the license plate is registered to a person who is not permitted to drive”); State v. Powell, 3d Dist. Auglaize No. 2-21- 20, 2022-Ohio-882, ¶ 10 (“the failure to activate a turn signal * * * is a traffic violation that provides a law enforcement officer ‘with legal justification to initiate a traffic stop’”) (citation omitted). {¶26} Nor is there reason to believe that a challenge to the inventory search of the vehicle would have had a reasonable chance of success. “[A] routine inventory search of a lawfully impounded vehicle is not unreasonable within the meaning of the Fourth Amendment when performed pursuant to standard police practice and when the evidence does not demonstrate that the procedure involved is merely a pretext for an evidentiary search of the impounded vehicle.” Blue Ash v. Kavanagh, 113 Ohio St.3d 67, 2007-Ohio- 1103, 862 N.E.2d 810, ¶ 11. Here, neither Watters nor Parker had valid driver’s licenses and the vehicle could not be left on a public roadway. Compare Warren Codified Ordinance 303.08(a)(1) and (9) (“[p]olice officers are authorized to provide for the removal of a vehicle * * * [w]hen any vehicle is left unattended upon any street” and “[w]hen any vehicle has been operated by any person who is driving without a lawful license or while his license has been suspended or revoked”). Detective Gilger described the inventory 8 Case No. 2022-T-0015 search as attendant upon the decision to tow a vehicle. The methamphetamine was discovered in a part of the truck typically encompassed within the scope of an inventory search. State v. Mesa, 87 Ohio St.3d 105, 110, 717 N.E.2d 329 (1999) (“consoles * * * are areas of a vehicle that are normally part of a standard inventory search”). {¶27} With respect to the evidence presented at trial, the only witness to testify on behalf of the State was Detective Gilger. He testified to his own actions and observations in the course of the traffic stop. The evidence admitted at trial consisted of the video from Gilger’s dashcam, the methamphetamine, the methamphetamine pipe, and a stipulated laboratory report from the Bureau of Criminal Investigation confirming the identity and weight of the methamphetamine recovered from the truck. There were no trial issues meriting appeal. {¶28} Having independently reviewed the record, we conclude that the present appeal is wholly frivolous. Counsel’s motion to withdraw is granted, and the Judgment of the Trumbull County Court of Common Pleas is affirmed. MARY JANE TRAPP, J., JOHN J. EKLUND, J., concur. 9 Case No. 2022-T-0015	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491121/	STATEMENT ARTHUR M. GREENWALD, Bankruptcy Judge. The debtor/plaintiffs have filed a complaint objecting to claims filed by the named defendants against the debt- or/plaintiff s’ estates, asserting twenty-one claims for relief. Each claim for relief identifies the suing debtor/plaintiff and the defendant against whom relief is sought. The debtor/plaintiffs request the disallowance of the defendants’ claims. Each claim for relief alleges that the defendant has filed a general unsecured claim against the debtor/plaintiffs estate, and denies generally that the debtor/plaintiff is indebted to the defendant for the amount asserted in the claim. In addition, most of the claims for relief specifically allege that the debtor/plaintiffs have not breached the applicable management, assignment and/or indemnity agreement upon which the defendants’ claims are based. With the exception of the defendants, Ralph E. Hazelbaker and John N. Haem-merle, the defendants named are partnerships organized under the laws of the State of Ohio. The complaint alleges that the action constitutes a core proceeding. The debtor/plaintiffs also have filed forty-one counterclaims, asserting that these counterclaims arise out of the same transactions and occurrences as the defendants’ claims. Named as counterdefendants are the defendants named in the complaint, as well as the following additional parties alleged to be general partners of certain of the partnerships named as defendants and counterdefendants. [[Image here]] 236Additional Party Defendant/Counterclaimant Relationship Thomas Stewart Alliance Health Care Co. General Partner _Partnership_ Gerico Company Alliance Health Care Co. General Partner Dennis Sherman Alliance Health Care Co. General Partner Tri-Inv. Co. Alliance Health Care Co. General Partner Camino del Sol, Ltd. Camino del Sol Health Care Co.General Partner Camino Investment Corp.1 See footnote 1 below. It is alleged that the counterclaims are core proceedings under 28 U.S.C. § 157(b). Each counterclaim identified one or more of the defendant partnerships and the general partners of that partnership. One or more of these counterclaims allege a breach of the management agreements, assignment agreements, and/or indemnity or guarantee agreements referred to in the complaint and the defendants’ claims filed against the debtor/plaintiffs’ estates. In addition, one or more of the counterclaims allege a tortious breach of the implied covenant of good faith and fair dealing, quasi contract, money had and received, or money borrowed and paid. These assertions appear to stem from the agreements and related transactions which are the subject of the defendants’ claims and the debtor/plaintiffs’ complaint. In response to the complaint and counterclaims, the defendants and counterdefen-dants filed a motion to dismiss the complaint and counterclaims pursuant to Bankruptcy Rule 7012(b) and Rule 12(b) Fed.R. Civ.P. A separate motion was filed by the counterdefendant, Cseplo. Prior to the resolution of these motions, the defendants and counterdefendants filed with the District Court a motion to withdraw the reference pursuant to 28 U.S.C. § 157(d). This motion is presently before the Honorable William J. Rea, District Judge Presiding. This Bankruptcy Court has stayed further proceedings in this adversary action pending Judge Rea’s disposition of the motion. In accordance with 28 U.S.C. § 157(b)(3), this Bankruptcy Court has been requested to determine whether the complaint and counterclaims constitute core proceedings. DECISION This Bankruptcy Court, having considered the moving and opposition papers, as well as the arguments of counsel, finds that the twenty-one claims for relief asserted in the complaint constitute core proceedings in accordance with 28 U.S.C. § 157(b)(2)(B), as each of these claims for relief concern the allowance or disallowance of claims asserted by the defendant against the debtor/plaintiffs’ estates. This Court also finds that in accordance with 11 U.S.C. § 157(b)(2)(C), the forty-one counterclaims asserted against the counter-defendants are core proceedings, as the partnerships and their named general partners constitute persons who have filed claims against the debtor/plaintiffs’ estates. DISCUSSION All The General Partners Named In The Counterclaims Constitute Persons Who Have Filed Claims Against The Debt- or/Plaintiffs’ Estates. There does not appear to be any dispute that the claims for relief asserted in the complaint constitute core proceedings in accordance with 28 U.S.C. § 157(b)(2)(B), as they concern the allowance or disallowance of claims filed against the debtor/plaintiffs’ estates. Nor is there any disagreement that to the extent that counterclaims are asserted against the 237partnerships and the individuals named as defendants in the complaint, these counterclaims are core proceedings under 28 U.S.C. § 157(b)(2)(C), as these counterde-fendants constitute persons who have filed claims against the estates. However, the counterdefendants, Cseplo, Gaulke, Bradeen, Steward, the Gerico Company, Dennis Sherman, Tri-Inv. Co., Cami-no del Sol, and Camino Investment Corp., assert that as they did not file proofs of claims against the debtor/plaintiffs’ estates, the counterclaims as to each of them are non-core. This Court does not find the counterde-fendants’ argument persuasive. • Counterdefendant, Cseplo, is alleged to be one of three general partners of the defendant and counterdefendant, Columbus West Health Care Co., (Columbus West). It is alleged that Cseplo possesses a sixty percent interest in the profits and losses of Columbus West. Columbus West has filed a creditor’s claim with a face amount of $13,439,926.00 against Americare Corp., reportedly based on the alleged breach of the management agreement by Americare Corp. The counterclaim by Americare Corp. against Columbus West seeks damages for the alleged breach of the management agreement by Columbus West and the recovery of over one million dollars alleged to have been advanced to such partnership. It is alleged that these monies directly benefited Cseplo. Americare Corp. also seeks $727,140.00 from Columbus West for the alleged repayment of working capital advance loans made by Americare Corp., plus $360,666.00 due for non-working capital advance loans made by Americare Corp., plus $272,587.00 due to its alleged loss of compensation for management of the facility, plus the alleged lost future profits and the alleged loss in the value of the option to purchase the facility at 97.5 percent of fair market value. Counterdefendants Gaulke, Bradeen, Stewart, Sherman and Tri-Inv. Co. are alleged general partners of Alliance Health Care Co. (Alliance). It is alleged that these partners possess approximately a one-half interest in the profits and losses of Alliance. Alliance has filed two creditor’s claims against Americare Corp., one in the amount of $14,506,188.82, alleged to be based upon a breach of the management agreement by Americare Corp., and the other in the amount of $2,700,000.00, alleged to be based upon a breach of an assumption agreement. The counterclaim by Americare Corp. against Alliance seeks damages for the alleged breach of the management agreement by Alliance, and the recovery of $330,754.00 for the alleged repayment of working capital advance loans made by Americare Corp., plus $203,728.00 due for alleged non-working capital advance loans by Americare Corp., plus $268,573.00 due to an alleged loss of compensation for the management of the facility, plus the alleged loss of future profits and the alleged loss in the value of the option to purchase the facility at 97.5 percent of fair market value. Counterdefendant, Camino del Sol, Ltd., is an alleged general partner of the defendant and counterdefendant, Camino del Sol Health Care Co. Counterdefendant, Cami-no Investment Corp., is the alleged general partner of the counterdefendant, Camino del Sol, Ltd. Camino del Sol Health Care Co. filed a creditor’s claim against Ameri-care Southwest of Arizona, Inc. in the face amount of $6,383,438.00, for the alleged breach of the management agreement, and a creditor’s claim against Americare Corp. in the face amount of $4,915,500.00, for the alleged breach of an assumption agreement. The counterclaim by Americare Southwest of Arizona, Inc. seeks not only damages for the alleged breach of the management agreement by Camino del Sol Health Care Co., but also the recovery of $2,496,-376.00 for the alleged repayment of working capital advance loans made by Ameri-care Southwest of Arizona, Inc., plus $99,-575.00 due to the alleged loss of compensation for management of the facility, and allegedly lost future profits. 238In the case of Scott v. United States, 354 F.2d 292, 299, 173 Ct.Cl. 650 (1965), the Court of Claims stated, in pertinent part, as follows: The theoretical argument that the partnership is an entity and it, rather than the partners individually, must be held to be the sole plaintiff in this suit does not convince us. Unlike corporations, partnerships are not consistently treated as units, but just as often (or more so) as an aggregation or combination of individuals. Uniform Partnership Act § 6. That they may bring suit in the entity name (e.g., “Linda Scott, A Partnership Consisting of Harold Beeten, Edward Frank and Sam M. Slosberg * * ”), rather than in the name of the co-owners (e.g., “A & B, Partners Trading As * * * ”), does not usually determine the way courts will view them for a particular purpose, and is generally no more than a matter of form or preference. The choice of how to deal with partnerships in various contexts must be based on weightier considerations of substance. The salutary objectives of the counterclaim rules should not turn on the sequence of the names in the pleadings, or be defeated by a reversal of that order. Nor should the rules be read as permitting partners to avoid individual counterclaims by the simple expedient of bringing the action in the name of the partnership and omitting their' own names entirely. We recognize that, in these days, courts consider partnerships as entities for some procedural purposes — such as venue and service of process (see Joscar Co. v. Consolidated Sun Ray, Inc., 212 F.Supp. 634, 634-638 (E.D.N.Y.1963))— but the ultimate aim of such treatment is usually fairness and convenience, rather than the acceptance of the entity theory for all purposes. Cf. Sperry Products Inc. v. Association of American Railroads, 132 F.2d 408, 410-411 (C.A.2, 1942). Thus, while state statutes permit partnerships to sue and be sued in the partnership name, and Federal Rule of Civil Procedure 17(b) similarly provides in suits for the enforcement of rights existing under the Constitution and laws of the United States, the main reason for adoption of these provisions is that plaintiffs suing partnerships under the common law rule were burdened with the task of ascertaining and naming the members of the partnership as defendants. See Ruzicka v. Rager, 305 N.Y. 191, 111 N.E.2d 878, 881 (1953); 2 Barron & Holtzoff, Federal Practice and Procedure § 487 (Wright ed.1961). In the present situation, however, there are no similarly compelling practical reasons to consider partnerships as entities, rather than as aggregates of individuals. Whatever merit there may be to the point that consistency entails a uniform entity treatment of partnerships for all procedural purposes, we find outweighed by the realistic considerations mentioned earlier, as well as by the theory of the present-day counterclaim system (to be discussed presently), (footnote omitted) In the instant case, there is no dispute that the objecting general partners did not file proofs of claims, or otherwise make a claim against the debtor/plaintiffs’ estates. However, this Court is of the view that fairness and the realistic considerations in this case require that this Court recognize the partnerships named in the complaint and counterclaims as an aggregate of individual persons rather than a separate entity.2 As such, the claim filed against the debtor/plaintiffs’ estates by the partnerships are deemed to have been filed by the named general partners, as well. Accordingly, the general partners constitute persons filing claims against the estate within the meaning of 28 U.S.C. § 157(b)(2)(C). Therefore, the counterclaims asserted against them are core proceedings. In arriving at this determination, the Court believes that the realistic considerations which compel the adoption of the aggregate approach are (1), the general 239partners will personally benefit from the claims filed by their partnership,3 (2) under Ohio law, these general partners bear person liability for obligations of these partnerships,4 (3) the purpose in naming these general partners is to establish personal liability and facilitate the collection of any judgment secured against the partnership, and (4) having the partnerships and general partners before the Court in one lawsuit will facilitate judicial economy. Further, this Court believes that fairness dictates that if the general partners are in a position to acquire substantial benefits from the asserted partnership claims, they should be prepared to accept the burdens of being general partners, including becoming parties to proceedings wherein the partnerships’ claims and the claims against these partnerships will be determined in one lawsuit. Cseplo And The Other General Partners Are Not Third-Party Claimants Cseplo and the other objecting general partners contend that the claims asserted against them are third-party claims and not counterclaims. This argument also lacks merit, as Cseplo and these general partners are appropriate counterdefen-dants under Rule 13(h), Fed.R.Civ.P. Rule 13(h) provides that “[pjersons other than those made parties to the original action may be made parties to a counterclaim in accordance with the provisions of Rules 19 and 20.” Joinder of the general partners in question satisfies the requirements of Rule 19(a), Fed.R.Civ.P. because if they were not named, complete relief may not be accomplished from those who are named as coun-terdefendants. Their joinder as counterdefendants also satisfies Rule 20(a), Fed.R.Civ.P., which provides that all persons may be joined as defendants if there is asserted against them jointly or severally any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question or law or fact common to all defendants will arise in the action. Under Ohio law, the general partners appear to be jointly liable as to the contractual obligations of the partnership and jointly and severally liable with respect to the tort claims asserted against these partnerships. Therefore, Cseplo and the objecting general partners are parties to the counterclaims under Rule 13(h). APPENDIX OHIO REVISED CODE ANNOTATED § 1775.05 PARTNERSHIP DEFINED (A) A partnership is an association of two or more persons to carry on as co-owners a business for profit. (B) Any association formed under any other statute of this state, or any statute adopted by authority, other than the authority of this state, is not a partnership under sections 1775.01 to 1775.42, inclusive, of the Revised Code, unless such association would have been a partnership in this state prior to September 14, 1949, but such sections apply to limited partnerships except in so far as the statutes relating to such partnerships are inconsistent herewith. § 1775.14 LIABILITY OF PARTNERS Subject to section 1339.65 of the Revised Code, all partners are liable as follows: (A) Jointly and severally for everything chargeable to the partnership under sections 1775.12 and 1775.13 of the Revised Code. This joint and several liability is not subject to division (d) of section 2315.18 of the Revised Code 240with respect to a negligence claim that otherwise is subject to that section. (B) Jointly for all other debts and obligations of the partnership, but any partner may enter into a separate obligation to perform a partnership contract. § 1775.12 LIABILITY FOR WRONGFUL ACT OF PARTNER Where loss or injury is caused to any person not a partner in the partnership or any penalty is incurred, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his partners, the partnership is liable therefor to the same extent as the partner so acting or omitting to act. § 1775.13 PARTNERSHIP BOUND BY PARTNER’S BREACH OF TRUST The partnership is bound to make good the loss: (A) Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; (B) Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the cyisto-dy of the partnership. . Camino del Sol, Ltd., allegedly is a general partner of Camino del Sol Health Care co., the latter having filed a claim against the debt- or/plaintiffs' estates. Camino Investment Corp. allegedly is a general partner of Camino del Sol, Ltd. Neither filed a claim against the debtor/plaintiffs’ estates. . Under Ohio law, a partnership is defined as an association of two or more persons to carry on as co-owners a business for profit. See Section 1775.05, Ohio Revised Code, Appendix A, attached. . In the Scott case, the Court of Claims stated as follows regarding such person benefit. "[J]udgments rendered on partnership demands result in an immediate pro rata gain to the individual partners, since they actually own the claim in most senses. Inherent in the notion of ticking off the parties’ debts and obligations to achieve an ultimate balance — the concept underlying the counterclaim rules — is the necessary condition that the parties against whom counterclaims may be lodged have a personal, beneficial interest in the claim declared in the complaint or petition." 354 F.2d at 301. . See Sections 1775.12 through 1775.14, Ohio Revised Code, Appendix A, attached.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491122/	MEMORANDUM OPINION MARK B. McFEELEY, Bankruptcy Judge. This matter came before the Court on March 7, 1990, for presentment of a judgment submitted by the debtors. The two issues before the Court are the priority of claims to Liquor License Number 1429 and the effect of the Thirty Day Credit Law, N.M.S.A, § 60-7A-9 (Repl.Pamp.1987), on the liquor wholesalers’ liens. Having considered the arguments of counsel, legal memoranda submitted by the parties, having consulted the appropriate authorities and being otherwise fully informed and advised, the Court issues this memorandum opinion. FACTS A complaint to determine value, priorities, and extent of liens; allowance or disal-lowance of secured claims; and sale of property pursuant to § 368 out of the ordinary course of business was filed May 16, 1988. The liquor license was allowed to be sold free and clear of liens, pursuant to 11 U.S.C. § 363 by order of this Court filed March 6, 1989. United New Mexico Bank at Gallup (bank) was allowed to bid a portion of its claim to acquire some or all of the assets being sold. The bank had perfected a security interest in the liquor license by filing a financing statement with the New Mexico Secretary of State on April 26, 1985. A portion of the proceeds from the sale, in the amount of $34,000.00, were ordered to be segregated pending the decision of this Court on the claimed priority of the New Mexico Taxation and Revenue Department, Quality Import Company, and Joe G. Maloof & Company (wholesalers), or if the bank acquired the liquor license, it would refund this sum of money to these parties if their liens were determined to have priority. The liens of the parties attached to the proceeds of the sale as set forth in the March 6, 1989, order. The State of New Mexico’s Alcohol and Gaming Division was authorized by this Court to transfer Liquor License Number 1429 free and clear of all liens or claims of liquor wholesalers or the New Mexico Department of Taxation and Revenue. On March 7, 1989, the real estate, chattels and liquor license were sold at auction. United New Mexico Bank was the highest bidder and acquired the liquor license. On August 7, 1989, a partial settlement agreement was filed resolving all of the pending issues except the priority of claims to Liquor License Number 1429, and the effect of the Thirty Day Credit Law on the wholesalers’ liens. DISCUSSION A. Priority of Claims to Liquor License Number 1429 The bank alleges that its lien has priority over debts to liquor wholesalers arising after April 26, 1985, as its security interest was perfected on that date. Further, the bank alleges that the financing statement was filed prior to the date all of the unpaid claims of either wholesaler originated, with the exception of the sum of $264.70 which is shown as dated April 2, 1985, in favor of Joe G. Maloof & Company. The wholesalers claim priority over the bank, regardless of when it perfected its lien, alleging that the New Mexico legislature statutorily created a priority lien for wholesalers, the 276payment of which is a condition precedent to the transfer of liquor licenses. The applicable authority is set forth in N.M.S.A. § 60-6B-3(E) (Repl.Pamp.1987): Transfer of licenses. E. The transfer, assignment, sale or lease of any license shall not be approved until the director is satisfied that all wholesalers who are creditors of the licensee have been paid or that satisfactory arrangements have been made between the licensee and the wholesaler for the payment of such debts. Such debts shall constitute a lien on the license, and the lien shall be deemed to have arisen on the date when the debt was originally incurred. The interpretation of this statute was set forth in In re What D’Ya Call It, Inc., 105 N.M. 164, 730 P.2d 467 (1986). The New Mexico Supreme Court held: The requirements of Section 7-1-38 and general lien law do not apply to claims made under Section 60-6B-3(E). A lien pursuant to Section 60-6B-3(E) has a superpriority status over other lienhold-ers, including the tax lien in favor of the State, unless the latter liens were perfected under Section 7-1-38 or under applicable general law prior to the date the licensee incurred debts owed to wholesaler creditors. Id. at 165, 730 P.2d at 468. The bank argues that the above language in What D’Ya Call It describing “latter liens” includes other perfected security interests, and concludes that its security interest was perfected first by filing on April 26, 1985, and therefore has priority over the wholesalers’ liens arising after that date under the general Uniform Commercial Code priority rule, N.M.S.A. § 55-9-312(5)(a) (Repl.Pamp.1987).1 The Court disagrees. This Court’s interpretation of N.M.S.A. § 60-6B-3(E) (Repl.Pamp.1987) and In re What D’Ya Call It, Inc., 105 N.M. 164, 730 P.2d 467 (1986) is that liquor wholesalers have a superpriority lien over all lien holders, with the exception of the New Mexico State Taxation and Revenue Department, if the tax lien is perfected pursuant to N.M.S.A. § 7-1-38 (Repl.Pamp. 1988).2 The tax lien is effective as of the date the notice is filed. What D’Ya Call It, 105 N.M. at 165, 730 P.2d at 468. Section 60-6B-3(E), on the other hand, does not require notice of the lien to be filed to perfect the liquor wholesaler’s lien. Id. Automatic perfection of the wholesaler’s lien occurs on the date the debt is incurred. The statute allows a wholesale liquor distributor to forego the requirement of filing a financing statement each time a credit sale is made to a retail distributor. It does not, however, allow the wholesaler to claim priority for each subsequent sale as of the date of the first transaction. Instead, each separate credit sale creates a separate lien. All liens other than tax liens become subordinate to the wholesaler’s liens regardless of the date of perfection. “General lien law do[es] not apply to a claim made under 277Section 60-6B-3(E).” What D’Ya Call It, 105 N.M. at 165, 730 P.2d at 468. Thus, the liquor wholesalers’ liens have priority over the bank’s security interest in this case. The Court need not reach the issue of whether the statute creates a condition precedent to the transfer of the liquor license in favor of the wholesalers. The wholesalers waived the argument by signing and agreeing to the March 6, 1989, order allowing the sale of the liquor license free and clear of liens, with the liens attaching to the proceeds of the sale, and authorizing the State of New Mexico’s Alcohol and Gaming Division to transfer the license free and clear of liens or claims of liquor wholesalers. B. The Thirty Day Credit Law The bank argues that its security interest has priority over the wholesalers’ liens which violate the Thirty Day Credit Rule because the statute does not provide that the lien it creates primes prior filed security interests which have been properly perfected. The wholesalers argue that the statute was amended on June 14, 1985, to allow wholesalers to collect their total debt from retailers, even though there may be a violation of the Thirty Day Credit Law. The Thirty Day Credit Law is set forth in N.M.S.A. § 60-7A-9 (Repl.Pamp.1987) which states: Credit extension by wholesalers. It is a violation of the Liquor Control Act for any wholesaler to extend credit or to agree to extend credit for the sale of alcoholic beverages to any retailer, dispenser, canopy licensee, restaurant licensee, club licensee or governmental licensee or its lessee for any period more than thirty calendar days from the date of the invoice required under the provisions of Section 608A3 NMSA 1978. A violation of this section does not bar recovery by the wholesaler for the total indebtedness of the retailer, dispenser, canopy licensee, restaurant licensee, club licensee or governmental licensee or its lessee. (Emphasis added). Section 60-7A-9 was amended, effective June 14, 1985, by the addition of the last sentence of the statute. Prior to June 14, 1985, wholesalers could not collect debts for liquor sold in violation of the statute. New Mexico Beverage Co. v. Blything, 102 N.M. 533, 697 P.2d 952 (1985). Blything relied on N.M.S.A. § 60-8A-5 (1978), which provided that “no action shall be maintained ... to collect any debt for merchandise sold, served or delivered in violation of the Liquor Control Act.” Id. at 534, 697 P.2d at 953. The effect of the June 14, 1985, amendment was determined by Judge Howard C. Bratton in two memorandum opinions in The Liquor Co., et al. v. Phillip F. Maloof & Co., et al., CIV 87-462 HB (D.N.M. March 22, 1989, and June 29, 1989), in which the court held that any amounts owed in violation of the Thirty Day Credit Law before the June 14, 1985, amendment were not collectible, and any amounts owed in violation of the Thirty Day Credit Law after the amendment were collectible. While the opinions did not address the effect of the statute on a prior perfected security interest, it is clear from reading the statute as a whole that the legislature intended to create a superpriority lien in the wholesaler that is collectible even if it is in violation of the Thirty Day Credit Rule. N.M.S.A. § 60-7A-9 must be read in conjunction with N.M.S.A. § 60-6B-3(E), as the Court must give effect to all provisions of a statute. Legislative intent is to be determined from the language used in the statute as a whole, and each section should be construed in connection with every other section to reconcile different provisions to make them consistent. State v. Sinyard, 100 N.M. 694, 675 P.2d 426 (Ct.App.1983), cert. denied, 100 N.M. 689, 675 P.2d 421 (1984). The adoption of an amendment is evidence of an intention by the legislature to change the provisions of the original law. Stein v. Hertz Corp., 81 N.M. 69, 463 P.2d 45 (Ct.App.1969), affirmed 81 N.M. 348, 467 P.2d 14 (1970), appeal after remand, 83 N.M. 217, 490 *278P.2d 475 (Ct.App.1971), rev'd, on other grounds, 83 N.M. 730, 497 P.2d 732 (1972). The purpose of the amendment was to eliminate the forfeiture and allow the wholesaler to collect its debt even though there may be a violation of the Thirty Day Credit Law. Thus, this Court finds that the wholesalers’ superpriority liens created by N.M.S.A. § 60-6B-3(E) are prior to the bank’s perfected security interest even if there is a violation of the Thirty Day Credit Law. Therefore, any amount owed to the wholesalers after the June 14, 1985, amendment is collectible. It is not possible for this Court to rule on other debts or the extension of credit prior to the June 14, 1985, amendment, as there is not enough evidence before the Court to determine if there was a preamendment violation of the Thirty Day Credit Law. This memorandum opinion constitutes the Court’s findings of fact and conclusions of law. Bankruptcy Rule 7052. An appropriate order shall enter. ORDER This matter came before the Court on March 7, 1990, for presentment of a judgment. For the reasons set forth in the memorandum opinion entered in connection herewith, IT IS ORDERED that Joe G. Maloof & Company and Quality Import Company have priority liens over the security interest of United New Mexico Bank at Gallup. IT IS FURTHER ORDERED that counsel for the debtors shall prepare a judgment in conformity with the Court’s memorandum opinion including the appropriate amount of each claim plus statutory interest, approved as to form by counsel for Joe G. Maloof & Company, Quality Import Company, and United New Mexico Bank at Gallup, and submit it to the Court for entry within 30 days. . Priorities among conflicting security interests in the same collateral. (5) In all cases not governed by other rules stated in this section ... priority between conflicting security interests in the same collateral shall be determined according to the following rules: (a) conflicting security interests rank according to priority in time of filing or perfection. Priority dates from the time a filing is first made covering the collateral or the time the security interest is first perfected, whichever is earlier, provided that there is no period thereafter when there is neither filing nor perfection; N.M.S.A. § 55-9-312(5)(a) (Repl.Pamp.1987). . Notice of lien. A notice of the lien provided for in Section 7-1-37 NMSA 1978 may be recorded in any county in the state in the tax lien index established by Sections 48-1-1 through 48-1-7 NMSA 1978, and a copy thereof shall be sent to the taxpayer affected. Any county clerk to whom such notices are presented shall record them as requested without charge. The notice of lien (a) shall identify the taxpayer whose liability for taxes is sought to be enforced, and the date or approximate date on which the tax became due; and (b) shall state that the State of New Mexico claims a lien for the entire amount of tax asserted to be due, including applicable interest and penalties. Recording of the notice of lien shall be effective as to both real and tangible personal property. N.M.S.A. § 7-1-38 (Repl.Pamp.1988).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491123/	MEMORANDUM AND DECISION ON MOTIONS FOR SUMMARY JUDGMENT ALAN H.W. SHIFF, Bankruptcy Judge. On April 26, 1989, the plaintiffs commenced these adversary proceedings which seek declaratory judgments that the defendants have no interest in unsold books and accounts receivable from books that were sold. On March 12 and 14, 1990, the plaintiffs filed the instant motions for summary judgment, claiming that the material facts necessary for the conclusion that the defendants have no interest in the accounts receivable were enumerated in this court’s July 21, 1989 decision which held that Connecticut Bank & Trust Company, N.A. (“CBT”) and Key Book Service, Inc. (“Key”) had no interest in the unsold books. The motions have been withdrawn against Kampmann and Company, Inc. (“Kampmann”), and Key has not objected. I. The following findings of fact and conclusions of law from the July 21, 1989 decision, familiarity with which is assumed, are material here. In re Key Book Serv., Inc., 103 B.R. 39 (Bankr.D.Conn.1989), aff'd, Civ. Nos. B-89-424, B-89-425 (JAC), 1989 WL 221311 (D.Conn. December 13, 1989). Kampmann performed sales and order fulfillment services for book publishers. As of March 21, 1989, Kampmann was the exclusive distributor and sales representative for approximately sixty-five publishers, who are the plaintiffs in these adversary proceedings. Kampmann’s duties included services referred to in the book trade as fulfillment services, such as shipping, billing, collection of accounts receivable, and processing returns. Key bought and sold books for its own account, conducted a book order "fulfillment business, and operated a small publishing company. Prior to February 1, 1988, Kampmann and Key entered into an agreement under which Key was to provide warehouse facilities for the plaintiffs who were under contract with Kampmann. Key and Kamp-mann entered into a Marketing and Distribution Agreement dated February 1, 1988 (the “Marketing Agreement”), under which Key was to perform certain fulfillment services. Contrary to the assertions of Key and CBT, Key did not purchase books under the Marketing Agreement. On Febru347ary 25, 1988, CBT and Key entered into a security agreement, which was perfected by a financing statement filed on March 2, 1988 and covered all inventory then owned and thereafter acquired by Key. On March 9, 1989, Key filed a petition under chapter 11 of the Bankruptcy Code. On March 21, 1989, an involuntary chapter 7 petition was filed against Kampmann in the Southern District of New York, on March 31, 1989, Kampmann filed a petition under chapter 11 in this court, and on May 8, 1989, the two Kampmann cases were consolidated here. At the commencement of these cases, thousands of unsold or returned books, valued at approximately $1,000,000.00, were stored at Key’s warehouse at 540 Barnum Avenue, Bridgeport, Connecticut, pursuant to Kampmann’s contracts with the plaintiffs and the Marketing Agreement, and an unspecified amount of accounts receivable were due from book purchasers. On May 31, 1989, an order entered permitting Kampmann to reject all of its exec-utory sales and distribution contracts with the plaintiffs.1 Kampmann subsequently entered into a contract with National Book Network (“NBN”) under which Kampmann is to serve as NBN’s sales representative for publishers who contract with NBN for sales and distribution services. Several of the plaintiffs entered into such contracts and their books were to be shipped to NBN in Maryland. On May 31, a restraining order entered which, with the exception of 100 copies of each book title to be used for promotion purposes, enjoined Kampmann from transferring any of the unsold books until an order entered on CBT’s motions for adequate protection under § 363(e). In support of its § 363(e) motion, CBT asserted a security interest in the unsold books pursuant to Connecticut General Statutes § 42a-2-326, which provides in part: (2) Except as provided in subsection (3), ... goods held on sale or return are subject to [the claims of the buyer’s creditors] ... while in the buyer’s possession. (3) Where goods are delivered to a person for sale and such person maintains a place of business at which he deals in goods of the kind involved, under a name other than the name of the person making delivery, then with respect to claims of creditors of the person conducting the business the goods are deemed to be on sale or return_ However, this subsection is not applicable if the person making delivery (a) complies with an applicable law providing for a consignor’s interest or the like to be evidenced by a sign, or (b) establishes that the person conducting the business is generally known by his creditors to be substantially engaged in selling the goods of others, or (c) complies with the filing provisions of article 9. CBT argued that the books were sold to Key and/or Key was a consignee of the books under the Marketing Agreement. CBT’s § 363(e) motion was denied in the July 21 decision because it was found that under the Marketing Agreement Key had no property rights or interests in the books, that § 2-326 was not applicable because the books were not delivered to Key for “sale”, and that CBT was not the type of creditor which § 2-326 is intended to protect because it knew that the unsold books were the property of the plaintiffs. In re Key Book Serv., Inc., supra, 103 B.R. at 39. The plaintiffs assert the doctrine of collateral estoppel and argue that the conclusion reached in the July 21 decision was based upon findings which necessarily lead to the conclusion that CBT and Key have no interest in the accounts receivable. CBT counters that there are disputed material issues of fact which preclude the entry of summary judgment. The principal thrust of CBT’s argument is that it loaned money to Key in reliance upon Key’s claim that it owned the unsold books and accounts receivable, that Kampmann knew 348that Key believed it had such an interest and had expressed that opinion to CBT, and that the plaintiffs as principals of Kamp-mann are therefore estopped from claiming an interest superior to that of CBT or contesting the validity of CBT’s security interest. CBT also contends that the Marketing Agreement is ambiguous. II. A. Rule 56 Fed.R.Civ.P., made applicable by Bankruptcy Rule 7056, provides: (c) ... [Summary judgment] shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.... [[Image here]] (e) ... When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party’s pleading, but the adverse party’s response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. In determining whether to grant summary judgment, “the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Thus, while “[pjroperly employed, summary judgment allows the court to dispose of meritless claims before becoming involved in a frivolous and costly trial ..., [i]t must ... be used selectively to avoid trial by affidavit.” Donahue v. Windsor Locks Bd. of Fire Comm’r, 834 F.2d 54, 58 (2d Cir.1987). The moving party has the burden of showing that there are no material facts in dispute, and all reasonable inferences are to be drawn and all ambiguities are to be resolved in favor of the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); Donahue, supra, 834 F.2d at 57 (“[N]ot only must there be no genuine issue as to the evidentiary facts, but there must also be no controversy regarding the inferences to be drawn from them.”). However, to defeat a properly supported motion for summary judgment, the non-moving party “must offer concrete evidence raising genuine disputes of material fact tending to show that his version of the events is more than fanciful ... or, alternatively, must show that the defendant is not entitled to summary judgment as a matter of law.” Johnson v. Carpenter Technology Corp., 723 F.Supp. 180, 182 (D.Conn.1989). B. Collateral estoppel bars “the relitigation of an issue of law or fact that was raised, litigated, and actually decided by a judgment in a prior proceeding between the parties, if the determination of that issue was essential to the judgment, regardless of whether or not the two proceedings are based on the same claim.” N.L.R.B. v. United Technologies Corp., 706 F.2d 1254, 1259-60 (2d Cir.1983). See also Tucker v. Arthur Andersen & Co., 646 F.2d 721, 727-28 (2d Cir.1981); Stone v. Stone (In re Stone), 90 B.R. 71, 75 (Bankr.S.D.N.Y.1988), aff'd, 94 B.R. 298 (S.D.N.Y.1988). An issue of fact raised, litigated, and decided in the July 21 decision was whether CBT or Key had any interest in the unsold books under the Marketing Agreement. It was concluded that they did not and since they had none, neither Key nor CBT can have an interest under the Marketing Agreement in the accounts receivable from the sale of books. To hold otherwise would require this court to revisit the findings made in the July 21 decision. Neither Key nor CBT have claimed an interest in the accounts receivable arising out of a source other than the Marketing Agreement. It therefore necessarily follows from the July 21 decision that they have no interest in the accounts receivable. *349CBT argues that the plaintiffs are estopped from challenging its interest in the accounts receivable because their agent Kampmann knew CBT was relying on Key’s claim that Key owned those accounts, but no authority was cited for that proposition and none has been found. More to the point, Kampmann had no duty to challenge any such claim by Key to CBT, and CBT cannot avoid the consequences of its failure to test the validity of Key’s claim by now asserting that it relied upon such claims. I conclude that any knowledge Kampmann had of Key’s claim to CBT and any reliance by CBT upon such a claim is immaterial. CBT’s contention that ambiguities in the Marketing Agreement create issues of fact is also unavailing. Further, affidavit statements by Barbara Woelk, a CBT officer, and Harold Levine, Key’s president, that they believed that under the Marketing Agreement the accounts receivable would belong to Key are unpersuasive. As the plaintiffs correctly state, the July 21 decision resolved the ambiguities in the Marketing Agreement. III. The plaintiffs motions are granted, and IT IS SO ORDERED. . Code § 365(a) provides: "Except as provided in sections 765 and 766 of this title and in subsections (b), (c), and (d) of this section, the trustee, subject to the court’s approval, may assume or reject any executory contract or unexpired lease of the debtor.”	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491124/	MEMORANDUM OF DECISION DAVID E. RUSSELL, Bankruptcy Judge. The above-entitled motion was brought regularly before this court by Claimant Piper Acceptance Corporation (hereinafter “PAC”) and was taken under submission by this court following oral arguments. Alleging that George T. Gott, Jr. (hereinafter “Debtor”) failed to properly notify it of the referenced objection to the claim, the opportunity for a hearing therefor, and the subsequent order sustaining the Debtor’s objection, PAC moves this court to reconsider its August 15, 1989 order denying PAC’s $154,030.30 unsecured claim and to overrule Debtor’s objections thereto. Generally, a court may properly deny a Rule 60(b) motion where (1) the party not in default will be prejudiced if the motion to vacate the default is granted, (2) the defaulting party’s conduct led to the default, or (3) the party in default has no meritorious defense. (Direct Mail Spec. v. Eclat Computerized Tech., 840 F.2d 685, 690 (9th Cir.1988), citing Pena v. Seguros la Comercial, S.A., 770 F.2d 811,815 (9th Cir.1985) and Falk v. Allen, 739 F.2d 461, 463 (9th Cir.1984)). In this particular case, Debtor does not contend that he would be significantly prejudiced by the vacation of the default. Furthermore, it is not readily apparent that the defaulting party’s conduct caused the default. Rather, the confusion clearly stemmed from Debtor’s decision, inadvertent or otherwise, to ignore the mailing address on the face of the claim and, instead, mail notice only to PAC’s former special counsel.1 In light of the acknowledged theory that a Claimant’s failure to reflect his or her correct address on the proof of claim and the Debtor’s reliance thereon may result in a waiver by the former of the right to notice2, it would be grossly unfair to preclude the claimant who has included the correct, current address on the claim from responding to an objection to that claim simply because the objecting party chose to mail notice to some other entity or address.3 Finally, Debtor argues that PAC is unable as a matter of law to raise a meritorious defense to Debtor’s objection to its claim because PAC failed to dispose of its collateral (a Piper airplane) in a “commercially reasonable” manner and, pursuant to applicable law4, is absolutely precluded from seeking a deficiency judgment against Debtor5. The court must disagree 710both with Debtor’s contention that PAC has failed to raise a meritorious defense and that the sale of the collateral in this instance was conducted in a commercially unreasonable manner. The gist of Debtor’s argument is that although PAC gave notice of a “private sale”, it actually utilized a “public sale” procedure (manifested by the great lengths PAC went to advertise the plane in a multitude of various trade magazines and aircraft listings) thereby triggering the necessity of compliance with the public sale notice requirements (notice of “time and place” of the sale) rather than the more liberal notice allowed for private sales (notice only of the time after which any sale or other intended disposition was to have been made).6 (F.S.A. § 679.9504(3)). Although neither the text of F.S.A. § 679.9-504(3) nor the Florida Code Comments shed any immediate light upon the distinction between a “public” versus a “private” sale, the Official Comments state that “[although public sale is recognized, it is hoped that private sale will be encouraged where, as is frequently the case, private channels will result in higher realization on collateral for the benefit of all parties.” (Uniform Comm.Code Comment, ¶ 1, reprinted, West, F.S.A. § 679.9504). This language leads the court to believe that authors of the U.C.C. intended that “privately arranged” sales constitute “private sales” while auctions and “fire sales” are indicative of a “public sale”7. The court finds further support for this interpretation in paragraph 4 of the Official Comments to U.C.C. § 2-7068 which expressly defines public and private sales for the purposes of determining “reasonable commercial practices” as sale by “auction” and sale by “solicitation and negotiation” respectively.9 711Consequently, because PAC provided the requisite notice to Debtor of the proposed private sale and, further, because PAC did an exemplary and, indeed, successful job of “drumming up” bidders for the sale, the court is not inclined to find that the sale was conducted in a commercially unreasonable manner.10 DISPOSITION Consistent with and for the reasons set forth in the above Memorandum, the court will grant PAC’s motion for reconsideration, overrule the Debtor’s objections to PAC’s first amended claim, and allow PAC’s unsecured claim in the amount of $154,030.30. Furthermore, the Debtor shall be required to transfer the full amount of each $25,000.00 quarterly payment due to class # 11 under the confirmed Chapter 11 plan to PAC until such time that RAC has received payment on account of its claim proportionate in value to that already received by the other members of the class. (11 U.S.C. § 502©). Finally, PAC’s motion for sanctions will be denied as inappropriate under the circumstances. As the prevailing party, Counsel for PAC shall recover costs upon submission of an appropriate cost billing (Local Rule 292(b), United States District Court, Eastern District of California) and should forthwith prepare and submit a separate, proposed judgment consistent with this decision. . The special counsel in question was the Law Offices of James G. Schwartz, whose limited involvement with the case (objecting to Debtor’s disclosure statement) had ended on or about March 23, 1988, almost a full year before the notice of the objection was filed and served upon his offices (July 17, 1989). (Declaration of James G. Schwartz, filed 2/8/90, at p. 2, ¶¶ 5, 7). . 8 Collier on Bankruptcy (15th Ed.1989), ¶ 3007.03(4], note 2, citing, inter alia, In re Auto-Train Corp., 57 B.R. 566 (Bankr.D.C.1986). . Mr. McManus, Debtor's counsel, has testified that he served Mr. Schwartz' office with the notice of the objection in reliance of his understanding that Schwartz had substituted in as PAC’s regular counsel. (Declaration of Michael S. McManus, filed 2/27/90, at p. 4, ¶ 10(b), p. 6, ¶ 18). The better practice, of course, would be to always send notice to the address specified in the claim, and then to such other addresses as are appropriate. . The court agrees with PAC that pursuant to California "conflicts" law (Cal.Com.Code § 1105(1)) and the “choice of forum" provision set forth in the original sales agreement between PAC and Debtor (Ex. "Q”, Declaration of Leon R. Acor, filed 2/8/90, at ¶ 13, p. 2), the purchase/sale agreement and, specifically, the issue of the commercial reasonableness of PAC’s disposition of the collateral pursuant to ¶ 11 (Remedies) of said contract shall be governed by Florida state law. . The Florida Supreme Court has recently decided that when a secured party fails to dispose of collateral in a commercially reasonable manner, there arises only the rebuttable presumption that the fair market value of the collateral at the time of repossession was equal to the 710amount of the total debt it secured. (Weiner v. American Petrofina Marketing, Inc., 482 So.2d 1362 (Fla.1986)). This analysis jibes with the decisions coming out of a growing minority of jurisdictions. (See generally, Tinney, "Failure of Secured Party to Make ‘Commercially Reasonable’ Disposition of Collateral under U.C.C. § 9504(3) as Bar to Deficiency Judgment”, 10 ALR4th 413; Spivey, "Failure of Secured Creditor to Give Required Notice of Disposition of Collateral as Bar to Deficiency Judgment”, 59 ALR3d 401). Nonetheless, where as here the sale has been found to have been conducted in a commercially reasonable manner, the distinction necessarily becomes moot. .The actual notice sent to Debtor on or around May 31, 1988 read as follows; "YOU ARE HEREBY NOTIFIED that pursuant to a default under the terms and conditions of that certain Security Agreement executed on the 18th day of January, 1983, ... [PAC] will sell the following described aircraft: 1982 Piper PA602P N6899D s/n 60-8265014 at one or more private sales on or after the 27th day of June, 1988.” (Ex. “S", Declaration of Leon R. Acor, Filed 2/8/90). PAC solicited bids for the Piper on April 28, 1988 (Ex. "B”, Acor Declaration) and again on May 28, 1988 (Ex. "C”, Acor Dec!.). The listing required that the bids be executed by an authorized individual via telex, mailgram, or letter to PAC, and that no bids would be accepted after 2:00 pm, June 28, 1988. PAC reserved the right to reject any and all bids and represented that the highest acceptable bidder would be notified promptly and required to make payment in full of their bid or satisfactory financing arrangements by 10.00 a.m., EST, June 30, 1988, or the bid might be voided. (Ex. “C", Acor Deck). The Piper was ultimately sold on or around July 16, 1988 to Tampa Wings, Inc., a Florida retailer, for the high bid of $105,750.00. (Acor Deck, at p. 5, ¶ 16; Ex. "P", Acor Deck (Purchase agreement)). . For scholarly analyses of the distinction between public and private sales for the purposes of U.C.C. § 9-504(3), see, e.g., 60 ALR4th 1012, "Public or Private Sale Under U.C.C. § 9-504(3)"; 2 White & Summers, Uniform Commercial Code, Hornbook Series (3rd Ed. 1988), at § 27-11; 2 Gilmore, Security Interests in Personal Property § 44.6, et seq. (1965). . § 2-706 (incorporated by F.S.A. § 672.2-706) governs a seller’s remedy to resell wrongfully rejected goods (2-703) and provides, inter alia, that a seller may recover certain described damages if the goods are resold in good faith and in a commercially reasonable manner. (§ 2-706(1)). The section further provides that the resale may be at either a "public” or "private" sale (§ 2-706(2)) and dictates the type of notice required for each. (§§ 2-706(3), (4)). Not. unlike § 9-504(3), § 2-706 prescribes a! vastly more liberal notice requirement for the/private versus the public sale. j . Certainly the Debtor is not unduly prejudiced by the court’s position in this matter. Not only did he receive over one month’s notice of the 711sale during which time he was free to inquire into the nature of the sale, but he expressly stipulated to the disposition of the collateral in his confirmed plan of reorganization. Further, the ultimate resale price recovered by PAC ($105,750.00) was well within the $100,000 to $110,000 estimate offered earlier by Debtor himself. (Ex. “X”, Acor Declaration). . Assuming that Debtor continues to rely upon U.C.C. § 3-606 (F.S.A. § 673.606) for relief from the deficiency judgment, and to the extent said section applies to the disposition of collateral other than negotiable instruments, the court finds for the reasons set forth above that PAC did not "unjustifiably impair” any such collateral. The court also rejects Debtor's contention that the "wholesale" as opposed to the "retail” disposition of the airplane was commercially unreasonable for the reasons set forth in Piper Acceptance Corporation v. Yarbrough, 702 F.2d 733, 735 (8th Cir.1983). Further, the court overrules Debtor’s objection that the foreclosure sale notice was fatally flawed because no statement that a deficiency following sale would be sought was included. The U.C.C. imposes no such notice requirement and, as PAC correctly points out, the only case provided by Debtor in direct support of such a contention was expressly overruled by the Supreme Court of Nebraska in the decision of First State Bank, Fremont v. Reed, 422 N.W.2d 359 (Neb.1988). Finally, the court finds no flaws, facial or otherwise, in PAC’s first amended proof of claim.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491127/	ORDER ON MOTION FOR SUMMARY JUDGMENT ALEXANDER L. PASKAY, Chief Judge. THIS IS a Chapter 7 liquidation case. The matter under consideration is a Motion for Summary Judgment filed by Charles Medearis (Trustee), filed in the above-captioned adversary proceeding. The Trustee in his complaint seeks a turnover of certain properties from the Defendants, James H. Ingersoll, Jr. (Junior), and James H. Inger-soll, Sr. (Senior). The claim set forth in Count I is based on Section 542 of the Bankruptcy Code and alleges that certain real property located in Benzie County, Michigan, a 1979 motor vehicle, and the proceeds from the sale of certain condominium units in Pinellas County,- are properties of the estate and, therefore, pursuant to Section 542, the Defendants should be compelled to turnover the items described to the Trustee. Prior to the trial this Court granted a partial summary judgment concerning the proceeds from the sale of the condominium unit but denied the Motion as moot concerning the Trustee's attempt to obtain a 759turnover of the real property located in Benzie County, Michigan. The Court also deferred ruling on the Trustee’s Motion as it relates to a 1979 motor vehicle based on the statement of the Trustee that he is in the process of negotiating a compromise. The claim set forth in Count II is based on Section 547(b) of the Bankruptcy Code and contends that the transfer of the real property located in Benzie County, Michigan by the Debtor to his father is a voidable preference. The claim set forth in County III of the Complaint seeks to avoid the transfer by the Debtor to his father of the same real property located in Benzie County, Michigan on the basis that the transfer was a fraudulent transfer within the meaning of Section 548(a) of the Bankruptcy Code. The Trustee’s Motion directed to this count was denied. This leaves for consideration the Motion for Summary Judgment directed to the Trustee’s claim set forth in Count II which is the claim of the preferential transfer. The following facts are without dispute indeed and are relevant to the resolution of the remaining controversy. Prior to January 29, 1988, the real property involved in this controversy, property located in Benzie County, Michigan, was owned by the Debtor and his non-debtor wife as tenants by the entireties. On January 29, 1988, the Debtor and his non-debtor wife executed a deed and conveyed their interest in the subject property to the Debt- or’s father, Ingersoll, Sr. The Debtor filed his Voluntary Petition for Relief under Chapter 7 on March 1, 1988. Thus, it is without dispute that the transfer occurred within the ninety days immediately preceding the commencement of the bankruptcy case. There is nothing in this record to indicate that prior to this conveyance there were joint creditors of both the Debtor and his wife who could have reached this property under the laws of the State of Michigan. Basically these are the undisputed facts based on which the Trustee claims that he is entitled to set aside this transfer as a voidable preference pursuant to Section 547(b) of the Bankruptcy Code. It is indeed without dispute that there was a transfer of an interest in a property of the estate of the Debtor for the benefit of a creditor on account of an antecedent debt during the ninety days immediately preceding the commencement of the case and the transfer was made while the Debt- or was insolvent. This last operating element of a voidable preference is established by Section 547(f) which provides that for the purpose of this Section, the Debtor is presumed to have been insolvent during the ninety days and there is nothing in this record which warrants the finding that the presumption has been overcome. The difficulty with the Trustee’s position is, however, that there is an additional element before the Trustee can recover a preference which is that it is the burden of the Trustee to establish that the transfer enabled the recipient of the transfer to receive more than it would have received under Chapter 7 if a transfer had not been made. This is so because, as noted earlier, the property transferred was owned by the Debtor and his non-debtor spouse and there is nothing in this record to establish that Ingersoll, Sr., the Debtor’s father, did not have a valid claim against both the Debtor and his non-debtor spouse thus under the applicable laws of the State of Michigan would not have subjected this property to his claim thus receiving the same satisfaction in Chapter 7 as he has received as a result of the transfer in question. While it is true that after the hearing the Debtor filed an affidavit, together with copies of documents which indicate that the debt owed to the father was a joint obligation of both the Debtor and his wife, this affidavit and the documents cannot be considered inasmuch as they were not filed and submitted prior to the hearing on the Motion for Summary Judgment as required by Fed.R.Civ.P. 56(c) as adopted by Rule 7056(c). This being the case, this Court is satisfied that the Trustee is not entitled to a judgment as a matter of law on the claim of voidable preference and the matter shall be scheduled for final eviden-tiary hearing for the limited issue of whether or not Ingersoll, Sr. did have a 760valid joint claim against both the Debtor and the non-debtor spouse and had a right superior to the property transferred to the exclusion of other creditors under the applicable laws of the State of Michigan. Accordingly, it is ORDERED, ADJUDGED AND DECREED that the Motion for Summary Judgment be, and the same is hereby, denied. It is further ORDERED, ADJUDGED AND DECREED that the claims set forth in Count II (voidable preference) and Count III (fraudulent transfer) shall be scheduled for final evidentiary hearing. DONE AND ORDERRED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491128/	MEMORANDUM AND ORDER DISALLOWING INDEPENDENT POWER PRODUCER CLAIMS JAMES E. YACOS, Bankruptcy Judge. Various independent power producers (IPPs) filed proofs of claims in this chapter 11 case. Most of the claims were either fixed claims for power sold to the debtor before the commencement of the case or contingent claims for rejection or anticipatory breach of the arrangements under which the IPPs sell power to the debtor. These arrangements are either rate orders of the New Hampshire Public Utilities 805Commission (the “NHPUC”) or contracts between the debtor and the IPP. Public Service Company of New Hampshire filed objections to the claims of the IPPs. A hearing was held on the objections on April 13, 1990, at which numerous claimants were represented. The Third Amended Joint Plan of Reorganization of Northeast Utilities Service Company et al., which has been the subject of confirmation hearings for six days during the weeks of April 2 and April 9, 1990, provides for assumption of all of these arrangements. Neither the Plan nor Public Service takes a position on whether the NHPUC rate orders constitute executory contracts within the meaning of section 365 of the Bankruptcy Code. The Plan contemplates that after reorganization, the reorganized debtor may seek, either through NHPUC procedures and under and consistent with New Hampshire law or through voluntary renegotiation with the IPPs, to modify the prices and other terms of the arrangements under which the reorganized debtor would continue to buy power from these IPPs. Neither the Plan nor its feasibility is dependent on success in this effort. Under the Plan, most of the benefits of a reduction in the price paid under the IPP arrangements would inure to the benefit of the reorganized debtor’s customers. Only 10% of the benefits of reductions in the prices paid to only thirteen IPPs listed in the Rate Agreement on which the Plan is based would inure to the benefit of the reorganized debtor. The IPPs argue that they are entitled to the allowance in this chapter 11 case of unsecured claims in the aggregate amount of over $600 million on account of any damage they may suffer as a result of any modification ordered by the NHPUC in, or agreed to by themselves through renegotiation of, their power sale arrangements with the reorganized debtor after the Effective Date of the Plan. They do not argue that the reorganized debtor will be unable to perform the arrangements according to their terms, nor did they file any objection to assumption of the arrangements or to confirmation of the Plan on that ground. Rather, they argue that the Plan provision that evidences the reorganized debtor’s intent to seek modification of the arrangements under State law fails the test of “adequate assurance of future performance” of the existing arrangements, as required by section 365(b) of the Bankruptcy Code, because, if the reorganized debtor is successful in obtaining modification of the arrangements, the reorganized debtor will not be performing the arrangements as they currently exist. Public Service objected to the allowance of any such claims. Public Service also objected to the allowance under the Plan as Class 10 (general unsecured) claims of any claims for power sold to the debtor before the commencement of this case for which the debtor had not yet paid, contending that any such claim would be paid as a cure of defaults under the power purchase arrangement, as required by section 365(b) of the Bankruptcy Code. It is clear from the terms of the Plan, and the IPPs do not dispute, that the Plan provides for assumption of the power sale arrangements, subject to the reorganized debtor’s intent to seek modification of the arrangements under State law after the Effective Date of the Plan. It is also clear from the record in this case, and the IPPs do not dispute, that the reorganized debtor is fully capable of performing the power sale arrangements according to their terms as they currently exist. The only real question is whether contingent claims for over $600 million should be allowed on the theory that the Plan includes a Rate Agreement under which the reorganized debtor will seek modification, with the support of the State of New Hampshire, of the arrangements by the NHPUC, or will seek to renegotiate the arrangements with the IPPs. The issue is whether there is any present claim against this debtor based on these facts. This Court finds that there is no anticipatory breach theory available to the IPPs based on these facts. The Plan and the Rate Agreement do not indicate breach. All that is contemplated is renegotiation or 806a petition to the NHPUC, which may or may not have the power to order modification. If it does not have any such power, or if there is no right in the arrangement to modify, then the modification will not happen and the IPPs will suffer no damage. If the NHPUC does have such a power, and if there is a right to modify, as determined by the NHPUC in the proceeding that the reorganized debtor might commence, then the modification will not constitute a breach of the arrangement, and the IPP will not be entitled to any damages against the debtor or the reorganized debt- or for a breach. The NHPUC might attach various terms and conditions to any modification which could include changed obligations on the part of the reorganized debt- or, but this possibility does not create a present claim, contingent or noncontingent, against either the debtor or the reorganized debtor. For the foregoing reasons, all objections to the claims of the IPP for contingent breach or rejection of the power sale arrangements should be sustained, and it is ORDERED: 1. The objections of Public Service to the claims of the IPPs listed in paragraph 6 of this Order on the grounds that the claims constitute contingent claims for damages arising from rejection under the Plan of executory power sale arrangements are sustained. 2. The objections of Public Service to the allowance as general unsecured claims in Class 10 under the Plan of the claims of the IPPs listed in paragraph 6 of this Order on the grounds that the claims are for power sold to the debtor before the commencement of this chapter 11 case, which will be paid on the Effective Date of the Plan, are sustained, except that— (a) this Order is without prejudice to the determination of the actual amount owing for power sold and not yet paid for; and (b) the payment under the Plan on the Effective Date of the amounts actually allowed for power sold shall be with interest at the legal rate from the date on which such payments would have been due but for the commencement of the chapter 11 case to the date of payment. 3. Paragraphs 1 and 2 of this Order shall become void if confirmation of the Third Amended Joint Plan of Reorganization of Northeast Utilities Service Company et al. is denied or if the order of confirmation is vacated for any reason, including the failure of the Effective Date of the Plan to occur, as provided in the Plan. 4. Based on the stipulation of Public Service and the claimant on the record at the hearing, the objection of Public Service to Claim No. 8829900008 of American Hydro, Inc. — Peterborough, in the amount of $1700.00 for a prepetition prepayment for an interconnect study is sustained, and the claim is disallowed, without prejudice to any dispute between Public Service and the claimant over Public Service’s performance of the interconnect study after the commencement of this case. 5. The objection of Public Service to Claim No. 8827700010 of Hillsboro Mills in the amount of $13,296.00 is sustained, and the claim is disallowed. 6. The claims to which paragraph 1 and 2 of this Order apply are listed on the Appendix to this Order. DONE and ORDERED. APPENDIX _CLAIMANT_CLAIM NO. CLAIM AMOUNT Alden Engineering Company Greenville Road, RR # 1 Box 213 Mason, NH 03048 8806400253 2,771.40 807CLAIMANT_CLAIM NO. CLAIM AMOUNT Alexandria Power Assoc. Ltd. Ptn. c/o Legeis Resources, Inc. 1200 Crown Colony Drive Quincy, MA 02169 8931000003 8829800029 43,435,917.00 348,935.00 Ashuelot/HDI Associates, Inc. 10394 W. Chatfield Ave., Suite 108 Littleton, CO 80127 8930000007 3,091,427.30 Avery Hydroelectric Assoc. Box 240, 36 Bay Street Manchester, NH 03105 8830200219 8930000001 24,509.89 1,358,294.89 Beech River Mill Company Old Route 16 Center Ossippee, NH 03814 8807100189 8807400663 2,099.61 2,099.61 Bethlehem Hydro Electric Co. 86 Lafayette Road, Box 947 North Hampton, NH 03862 8806700424 1,700.00 Bio Energy Corporation Route 127 Hopkinton, NH 03301 8830100060 8931000004 923,522.60 59,830,443.90 Boston Felt Company on the Salmon Falls River P.O. Box 6258 E. Rochester, NH 03867 8806000369 8930000002 8829800304 4,125.60 278,494.60 4,125.60 Briar Hydro Associates 114 State Street Boston, MA 02109 8830100242 8930000003 167,092.59 8,566,683.59 Bridgewater Power Company LP c/o Comm. Energy Alternatives 1200 East Ridgewood Avenue Ridgewood, NJ 07450 8817200005 8828400015 8830100026 8931000002 1,518,382.68 1,518,382.68 1,518,382.68 81,508,705.60 Steven V. and Holly M. Brown P.O. Box 1371 Dover, NH 03820 8827700076 11.11 Chamberlain Falls Hydro Station Greenville Road, RR # 1 Box 213 Mason, NH 03048 8806400018 963.19 Charwill Realty Badger Bond Hydro P.O. Box 689 Meredith, NH 03253 8829800302 7,317.28 808_CLAIMANT CLAIM NO. CLAIM AMOUNT Chrysler Capital Corp. Greenwich Office Park I Attn: Corporate Finance Group Greenwich, CT 06836 8830600049 8830600050 8,000,000.00 12,000,000.00 Clement Dam Development, Inc P.O. Box 1011 Portsmouth, NH 03801 8809800017 8930000004 113,004.00 3,770,266.87 Cocheco Falls Associates P.O. Box 1073 Dover, NH 03820 8830100237 8930000005 41,229.10 1,147,467.30 Concord Steam Corporation P.O. Box 1377 Concord, NH 03302-1377 8808400057 86,697.90 Consolidated Hydro Maine, Inc. c/o Consolidated Hydro, Inc. 2 Greenwich Plaza Greenwich, CT 06830 8930000010 8830500035 3,298,973.69 12,312.69 Consolidated Hydro New Hampshire, Inc. c/o Consolidated Hydro, Inc. 2 Greenwich Plaza Greenwich, CT 06830 8930000008 8930000009 8930000006 0000100008 8830500034 756,557.00 1,426,269.29 1,533,996.25 53,320.25 74,661.29 Paul Crane 172 Main Street Lancaster, NH 03584 8806300156 331.21 Errol Hydroelectric Limited Partnership c/o Swift River/Hafslund Company 100 Commercial Street Portland, Maine 04101 8930000011 8829800303 10,438,651.40 274,111.40 Exeter River Hydro c/o Paul T. Phillips Main Street Freemont, NH 03044 8930000012 8829400142 45,299.98 689.98 Fisk Hydro, Inc. P.O. Box 2520 So. Hamilton, MA 01982 8809800020 16,603.57 Franklin Falls P.O. Box 216 Franklin, NH 03235 8807400748 73,415.12 Franklin Industrial Complex Smith & Canal Streets Franklin, NH 03235 8827800006 59,885.79 809CLAIMANT_CLAIM NO. CLAIM AMOUNT Garland Mill RD1 Garland Road Lancaster, NH 03584 8806400117 268.11 Goodrich Falls Hydro Electric P.0. Box 152 Lowell, MA 01853 8807100173 8807400747 25,086.69 25,086.69 Golden Pond Hydropower Associates c/o Mainstreet Associates George K. Lagassa 110 Lafayette Road, P.O. Box 947 North Hampton, NH 03862 8829800305 8930000013 9,734.26 342,744.26 Gregg Falls Hydroelectric Associates c/o Schooner Capital Corporation 99 Bedford Street Boston, MA 02111 8930000014 8830200215 6,508,083.97 80,872.97 Hadley Falls Assoc. Box 240, 36 Bay Street Manchester, NH 03105 8930000015 8830200217 143,327.33 8,236.33 Hemphill Power & Light Company c/o Thermo Electron of N.H. Inc. Attn: Parimel Patel 101A First Avenue Waltham, MA 02254-9047 8931000005 8831900006 8827700680 68,643,692.20 1,375,390.20 1,375,390.20 Hopkinton/HDI Associates I 10394 W. Chatfield Ave., Suite 108 Littleton, Colorado 80127 8930000016 523,117.00 Hydroelectric Dev. Inc. Assoc. Bay Bank of Boston, NA 175 Federal Street Boston, MA 02110 8830300007 8830300008 29,538.00 10,962.00 Hydroelectric Dev., Inc. Michael P. Demos, Pres. 10394 W. Chatfield Ave., Suite 108 Littleton, CO 80127 8830300005 8830300006 25,260.12 29,913.30 Hydro-Op One Associates c/o Schooner Capital Corporation 99 Bedford Street, 2nd Floor Boston, MA 02111 8930000017 8830200216 2,224,003.00 64,953.00 James River New Hampshire Electric Inc. 650 Main Street Berlin, NH 03570 8806400191 5,941.16 810_CLAIMANT_CLAIM NO. CLAIM AMOUNT Lakeport Hydroelectric Corp. Box 240, 36 Bay Street Manchester, NH 03105 8930000018 8830200218 1,550,661.15 25,004.15 Lochmere/HDI Associates I 10394 W. Chatfield Ave., Suite 108 Littleton, CO 80127 8930000019 2,024,039.00 Lower Robertson Dam/HDI Associates III 10394 W. Chatfield Ave., Suite 108 Littleton, CO 80127 8930000020 3,332,193.12 Mad River Power Associates c/o Ransmeier & Spellman P.O. Box 1378 Concord, NH 03302-1378 8930000021 8829500148 1,035,931.41 5,722.41 Marlow Power 44 Hanover Street Keene, NH 03431 8805700238 8828500183 8,586.00 8,586.00 Micon Wind Turbines, Inc. 1435 Frazee Rd, 305 San Diego, CA 92108-1336 8806800218 8811600006 6,423.74 4,869.35 Mine Falls Hydroelectric Limited Partnership c/o Paul F. Avery, Jr. 178 Drinkwater Road Kensington, NH 03833 8930000022 8829900045 148,569.96 148,569.96 Minnewawa Hydro Company, Inc. c/o Consolidated Hydro, Inc. 2 Greenwich Plaza Greenwich, CT 06830 8930000023 8830500032 2,754,340.00 10,940.00 Monadnock Paper Mills, Inc. Attn RC Van Horn Antrim Road Bennington, NH 03442 8805700123 4,950.00 Mount Washington Attn Howard M Wemyss P.O. Box 278 Gorham, NH 03581 8806000740 53.82 Nashua Hydro Associates c/o Essex Hydro Associates 114 State Street Boston, MA 02109 8930000024 8830100241 3,111,077.08 82,015.08 811CLAIMANT_CLAIM NO. CLAIM AMOUNT Neaf/Manchester PO Box 7, 124 Sills Road Energy Tactics, Inc. Yaphank, NY 11980 8829400005 1,702.29 New Hampshire Hydro Associates c/o Essex Hydro Associates 114 State Street Boston, MA 02109 8930000025 8830100239 5,819,386.00 315,650.00 Newfound Hydroelectric Company 4 Midland Street Concord, NH 03301 8930000026 8805600385 4,664,547.20 35,620.11 Pembroke Hydro Associates c/o Schooner Capital Corporation 99 Bedford Street Boston, MA 02111 8930000027 8830200220 5,941,183.02 106,999.02 Penacook Hydro Associates c/o Essex Hydro Associates 114 State Street Boston, MA 02109 8930000028 8830100240 9,370,416.84 267,346.84 Pinetree Power, Inc. Westinghouse Building Gateway Center Pittsburgh, PA 15222 8830500055 1,570,067.15 Pittsfield Hydropower Co. P.O. Box 149-A Hamilton, MA 01936 8829900046 17,586.09 River Street Associates River Street Peterborough, NH 03458 8930000030 8930000029 8830200222 286,252.05 181,591.98 14,311.03 Bruce P. Sloat P.O. Box 424 Lost Nation Road Lancaster, NH 03584 8828400029 227.39 Somersworth Hydro Company, Inc. c/o Consolidated Hydro, Inc. 2 Greenwich Plaza Greenwich, CT 06830 8930000031 8830500033 1,278,402.36 35,286.36 Steels Pond Hydro, Inc. PO Box 2520 S. Hamilton, MA 01982 8830100226 33,352.42 Sugar River Hydroelectric Power PO Box 293 Newport, NH 03773 8830500085 8,343.11 812_CLAIMANT CLAIM NO. CLAIM AMOUNT Sunnybrook Hydro # 1 RFD # 2 Box 40 Lancaster, NH 03584 8810900019 8827700080 231.46 231.46 Swans Falls Corporation PO Box 40 South Windham, ME 04082 8817900029 22,127.02 Thomas Hodgson & Sons Inc. Canal Street Suncook, NH 03275 8827000072 37,735.24 Timco Inc. Depot Street Ctr. Barnstead, NH 03225 8803500041 8829800024 8931000001 264,082.20 264,082.20 15,182,095.90 Town of Sunapee, a NH Municipality Main Street, P.O. Box 717 Sunapee, NH 03782 8930000032 8829800306 849,583.00 15,519.19 Watson Associates P.O. Box 1073 Dover, NH 03820 8930000033 8830100238 867,081.79 14,064.79 W.M. Lord Excelsior Division of Siemon Company Carl N. Siemon, President 60 Echo Lake Rd., Box 400 Watertown, CT 06795 8826300082 2,094.10 Whitefield Biomass Energy Corp. c/o Chrysler Capital Corp. Greenwich Office Park I Attn: Corporate Financing Grp. Greenwich, CT 06836 8830100211 8830200188 35,000,000.00 35,000,000.00 Whitefield Power & Light Co 101 First Avenue Waltham, MA 02254 8830600048 8931000006 35,000,000.00 68,466,197.00 Woodsville/Rochester P.O. Box 689 Meredith, NH 03253 8826600213 2,293.92	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491129/	MEMORANDUM OPINION WILLIAM T. BODOH, Bankruptcy Judge. The matter before the Court is the Motion of the NORTHEAST OHIO DISTRICT COUNCIL OF CARPENTERS for an order directing the Trustee to execute a check and enforce a statutory trust. The Trustee filed a brief in response to the Motion, and both parties filed supplemental memoran-937da. For the reasons set forth below, the Motion of NORTHEAST OHIO DISTRICT COUNCIL OF CARPENTERS is overruled. FACTS Although the facts of this case have not been stipulated by the parties, the pleadings set forth the following facts of this case which are not in dispute. The Debtor, UNIVERSAL TREND, INC., filed its Petition for relief under 11 U.S.C. Chapter 7 on July 21, 1989. Prior to the filing of its Petition, the Debtor was engaged in the commercial installation of drywall. The Debtor employed members of the NORTHEAST OHIO DISTRICT COUNCIL OF CARPENTERS (the “Union”) and agreed to comply with the terms of a collective bargaining agreement of the Union. As a part of this agreement, the Debtor agreed to pay working dues and fringe benefit contributions to the Union for the benefit of its members. On one of its jobs, the Debtor was engaged as a subcontractor to GQ DRYWALL COMPANY on the Calvary Towers construction project in Youngstown, Ohio. At the time of the filing of the Petition, the Debtor was owed approximately Nineteen Thousand Dollars ($19,000.00) from GQ DRYWALL. The president of the Debtor, Mr. Thomas Behnke, indicates in an Affidavit filed with the Trustee’s brief that the Union contacted him pre-petition and asked that he authorize GQ DRYWALL to issue a check payable to the Union and the Debtor as co-payees. Mr. Behnke refused to consent to such an arrangement; nonetheless, a check for Twelve Thousand Four Hundred Seventeen and 21/100 Dollars ($12,-417.21) was issued by GQ DRYWALL to the Debtor and the Union as co-payees on July 24, 1989, three days after the Petition was filed. The Union asserts that the Debtor is indebted to the Union in the amount of Seventeen Thousand Fifty-Three and 09/100 Dollars ($17,053.09), and that this amount is the subject of a statutory trust imposed by state law. That sum is composed as follows: Health and Welfare/ Pension Contributions $13,149.44 Working Dues 1,336.34 Penalties 2,567.31 $17,053.09 On November 30, 1989, this Court entered an Order directing the Union to appear and show cause why it should not be held in violation of the provisions of the automatic stay of 11 U.S.C. § 362. After a hearing on that Order, this Court concluded, in an Order dated December 26, 1989, that the issuance of the co-payee check did violate the provisions of the automatic stay and that there is an affirmative obligation upon creditors to restore the pre-petition status quo which was altered by a creditor’s actions. In re Dungey, 99 B.R. 814, 816, 818 (Bankr.S.D.Ohio 1989). This Court also found that there was no evidence that the Union took any action after it had actual knowledge of the filing of the bankruptcy Petition, and, therefore, no sanctions would be imposed under 11 U.S.C. § 362(h). Finally, this Court authorized the Trustee to endorse and negotiate the July 24, 1989 check and to hold those funds in a separate interest-bearing account, but this Court “[l]eft for determination ... the extent to which [the Union] may be entitled to funds of the estate outside the priority set forth in the Bankruptcy Code.... ” DISCUSSION Before reaching the primary issue of this case, the ramifications of this Court’s previous findings should be emphasized. In the December 26, 1989 Order, this Court found that the issuance of the co-payee check was in violation of the provisions of the automatic stay imposed by 11 U.S.C. § 362. Post-petition actions taken by creditors to collect a debt from the debtor are void ab initio and have no legal effect, even if the creditor had no notice of the bankruptcy filing. Dungey, 99 B.R. at 816; Kalb v. Feuerstein, 308 U.S. 433, 60 S.Ct. 343, 84 L.Ed. 370 (1940). Therefore, the fact that the check was issued to two payees is of no consequence. This discussion will assume that the funds in question were paid directly to Debtor. That the 938funds are currently on deposit in a separate account is also of no significance, as that action was taken by order of the Court for administrative convenience. It is possible that the Union took no actual steps with regard to the check after the bankruptcy Petition was filed; nonetheless, it is undisputed that the manner in which the check was issued was a result of the Union’s collection activity. GQ DRYWALL issued the co-payee check at the suggestion or request of the Union, and because this action occurred post-petition, it has no legal effect. The Union’s arguments with respect to its rights in a co-payee check, including its reliance in In re Duracraft Products, Inc., 26 B.R. 92 (Bankr.S.D.Ohio 1982), are without merit. The primary issue in this proceeding is whether O.R.C. § 4113.15(C), through a purported statutorily imposed trust, gives the Union superior rights to the funds in question over the Trustee in bankruptcy. Put another way, does the trust created by Ohio statute prevent these moneys from becoming part of the bankruptcy estate? If the funds are in fact property of the estate under 11 U.S.C. § 541, then the trustee has the unimpaired right to use or distribute those funds according to applicable bankruptcy law. 11 U.S.C. §§ 363, 704. It is the Union’s primary contention that a statutory trust “arises in connection with an employer’s duty to pay fringe benefits” as soon as those moneys are owed, pursuant to O.R.C. § 4113.15(C). That section provides as follows: In the absence of a contest, court order or dispute, an employer who is party to an agreement to pay or provide fringe benefits to an employee or to make any employee-authorized deduction becomes a trustee of any funds required by such agreement to be paid to any person, organization, or governmental agency from the time that the duty to make such payment arises. The Union contends that because the statutory trust arises simultaneously with the duty to make payment, the funds owed to the Union by Debtor in this case were the subject of this trust and never became property of the bankruptcy estate. Therefore, the Union urges that the Trustee has no interest in the GQ DRYWALL check and that it should be endorsed over to the Union. In its Motion, the Union cites In re Davis, 13 B.R. 456 (Bankr.S.D.Ohio 1980) for the proposition that “[wjhere a statutory trust has been created under state law, it must be enforced in accordance with the law creating it.” Motion of Union at 4. This Court fails to find any such proposition in the Davis case. Indeed, as the Trustee points out, In re Davis reaches a very different conclusion: Even if a trust has been created under state law, the Bankruptcy Court has a special duty to decide whether or not it is a trust for purposes of the Bankruptcy Act. Schleckt v. Thornton (In re Thornton), 544 F.2d 1005 (9th Cir.1976).... If a trust is created, it must exist before the incident creating the debt and separate from it. Davis v. Aetna Acceptance Co., 293 U.S. 328 [55 S.Ct. 151, 79 L.Ed. 393] (1934). Davis, 13 B.R. at 460. This Court finds no authority in In re Davis for the application of a statutory trust in the manner proposed by the Union. In its supplemental brief, the Union points to Selby v. Ford Motor Co., 590 F.2d 642 (6th Cir.1979) as “controlling precedent.” Selby was a case decided under the Bankruptcy Act in which the debtor company had performed work for Ford Motor Company. Upon completion of the project, the debtor company owed its subcontractors approximately the same amount which Ford owed to it, so it authorized Ford to pay the subcontractors directly. The final payments occurred within the Bankruptcy Act’s preference period, and after the filing of the petition, the trustee in bankruptcy sought to recover these payments as preferences. The subcontractors claimed that the money was not recoverable as it constituted the corpus of a trust under the Michigan Builders Trust Fund Act, which, for purposes of this proceeding, is significantly similar to O.R.C. § 4113.15(C). The Sixth Circuit Court of Appeals considered various 939interpretations of a statutory trust under the Bankruptcy Act and concluded: ... a state statute creating a builders trust fund should be given effect in bankruptcy. The beneficial interests of subcontractors and materialmen in a building fund should not be regarded as the property of the bankrupt debtor, at least so long as the beneficial interests are traceable. Selby, 590 F.2d at 649. Although the Union asserts that this case is controlling in this District under the Bankruptcy Code, the Sixth Circuit in Selby stated more than once that it would “look to the new Bankruptcy Act [the Code] and its legislative history to see if its treatment of statutory trusts should be used as persuasive authority.” Selby, 590 F.2d at 645 (emphasis added). The Trustee is correct in his assertion that any conclusions made in Selby regarding the application of the Bankruptcy Code are dicta. See, Drabkin v. District of Columbia, 824 F.2d 1102, 1110 n. 27 (D.C.Cir.1987). The facts of the Selby case were also much different than those found in the present case. In Selby, the funds in question had already been paid to the subcontractors prior to the filing of the petition. The trustee in bankruptcy then sought to recover those funds as preferences, and the subcontractors relied on the State Trust Fund Act as a defense to the preference action. In the present case, the funds in question were paid to the Debtor post-petition, and the Union seeks to exclude these funds from the bankruptcy estate pursuant to state law. In Selby, the subcontractors clearly had a beneficial interest in the property which had previously been paid to them. Here, however, the Union’s claim to an interest in the property is grounded entirely on the statutory trust. Furthermore, the already difficult question of identifying the trust fund property has been complicated in this case by the post-petition activity. As the Sixth Circuit noted in a recent discussion of Selby: It is beyond peradventure that, as a general rule, any party seeking to impress a trust upon funds for purposes of exemption from a bankrupt estate must identify the trust fund in its original or substituted form.... In the instant case, appellants have not attempted to trace their funds beyond the deposits into the commingled Salem Central Account, which evidence, standing alone, is insufficient to support their constructive trust theory of recovery. First Federal of Michigan v. Barrow, 878 F.2d 912, 915 (6th Cir.1989). As a practical matter, tracing the funds in question creates no problem in the present case, as they are held in a separate account by the Trustee. But for the issuance of the check in violation of the stay, however, these funds would be in the general account of the Debtor. Whether the funds would be traceable there is somewhat speculative. The broader, if less relevant, issue is whether the funds would be traceable in Debtor’s general account if the transfer was made pre-petition, while the Debtor was still operating. Such tracing seems unlikely. Having determined that Selby is not dispositive of the present case, we return to a discussion of the underlying issues. From the moment a petition for relief is filed in bankruptcy, an estate is formed comprising “all legal or equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541(a)(1). However, “[p]roperty in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest ... becomes property of the estate ... only to the extent of the debtor’s legal title to such property_” 11 U.S.C. § 541(d). Therefore, property which is shown to be held by the debtor in trust for the benefit of another is not included in the bankruptcy estate. In addition to written express trusts, the argument that property is excluded from the estate in this manner has been applied to constructive and statutory trusts, and its implications reach not only the estate provisions of § 541, but also the preference, statutory lien, priority, and dischargeability provisions of the Code. 11 U.S.C. §§ 547, 545, 507, 523; See, Selby, 590 F.2d at 645. 940As the D.C. Circuit Court of Appeals summarized: In a very limited number of cases involving what would normally be considered a debtor-creditor relation, courts have found specific funds subject to a trust in favor of a creditor. In many of these cases, the trust is imposed by virtue of a state statute designed to provide additional protection to certain types of creditors, usually contractors. See, e.g., Selby ... Carrier Corp. v. J.E. Sheckter Corp., 347 F.2d 153, 155 (2d Cir.1965), cert. denied, 382 U.S. 904 [86 S.Ct. 239, 15 L.Ed.2d 157] (1965). In cases not involving such a statute, the courts have uniformly required a contract irrevocably obligating the debtor both to segregate the “trust funds” from the debtor’s own funds and to deliver the “trust funds” to the creditor. In re Auto-Train Corp., Inc., 810 F.2d 270, 274 (D.C.Cir.1987) (citations and footnote omitted). In addition, a distinct line of cases has developed concerning trust funds impressed for the payment of taxes to a taxing authority. See, e.g., Drabkin, 824 F.2d at 1110-1112. Statutory provisions which create trusts for the benefit of a creditor continue to be recognized under the Bankruptcy Code as they were under the Bankruptcy Act. The legislative history to § 541 indicated as follows: This section [§ 541] and proposed 11 U.S.C. 545 also will not affect various statutory provisions that give a creditor of the debtor a lien that is valid outside as well as inside bankruptcy, or that creates [sic] a trust fund for the benefit of a creditor of the debtor. See, Packers and Stockyards Act, § 206, 7 U.S.C. 196. S.REP. No. 989, 95th Cong., 2d Sess. (1978), reprinted in 1978 U.S.CODE CONG. & ADMIN.NEWS 5787, 5868. A problem arises, however, when state law, rather than federal law as cited in the Senate Report above, is the basis for the creation of the trust. As the leading bankruptcy commentator notes: Statutory enactments may operate to create trust funds in favor of certain specified persons, [citing Selby]. However, such trusts must stand the tests of being termed disguised priorities in violation of section 507 or statutory liens avoidable under section 545. Otherwise, this has, in the past[,] been generally regarded as a matter of local law to be followed by the bankruptcy court. 4 Collier on Bankruptcy § 541.13 (15th ed. 1990). In a case under the Bankruptcy Act, the United States District Court for Connecticut concluded: There is plainly a tension between the Bankruptcy Act’s recognition of trusts created by state law and its preclusion of state-created priorities, and threading their way between the two principles has been a difficult matter for the courts. In re Faber’s, Inc., 360 F.Supp. 946, 949 (D.Conn.1973). With these concerns in mind, we now address the application of the Ohio statute. Twice O.R.C. § 4113.15(C) has been interpreted by the Bankruptcy Court of this District. In the first case, In re Hayden (Toledo Area Constr. Workers Health and Welfare Plan v. Hayden), 44 B.R. 9 (Bankr.N.D.Ohio 1984), Judge Walter J. Krasniewski considered whether § 4113.15(C) created a fiduciary relationship under 11 U.S.C. § 523(a)(4).1 Judge Krasniewski found that “the statutory language of O.R.C. 4113.15(C) does not create an express trust prior to an act of wrongdoing or apart from contractual obligations^] and therefore, it does not convert the employer’s status to that of fiduciary for purposes of the Bankruptcy Code.” Hayden, 44 B.R. at 10. The second bankruptcy case to apply the Ohio statute is Matter of Gibbons-Grable Company (Ironworkers Combined Fund v. Society Bank of Eastern Ohio), 100 B.R. 901 (Bankr.N.D.Ohio 1989). In that case, as here, the debtor company was de941linquent in making benefit payments to a union pursuant to a collective bargaining agreement, and it was also in default to Society Bank where it maintained several bank accounts. Just prior to the filing of the petition, Society Bank set-off nearly Seven Hundred Thousand Dollars ($700,-000.00) from accounts maintained by Gibbons-Grable. Subsequently, the union asserted that a portion of the funds set-off by Society was held in trust by Gibbons-Grable under O.R.C. § 4113.15(C). Chief Judge James H. Williams concluded that any possible claim of the union to the set-off funds was defeated by the trustee in bankruptcy pursuant to the strong-arm clause, 11 U.S.C. § 544(a).2 Judge Williams considered the state court case United Bhd. of Carpenters and Joiners of America v. Paul Lugger Displays, Inc., 2 Ohio App.3d 190, 441 N.E.2d 581 (1981), but he noted that in that case, the creditor had notice of the claims of the union, while under the strong-arm clause, the trustee is considered to be a perfected lien creditor without knowledge of any purported claims. Gibbons-Grable, 100 B.R. at 904; 11 U.S.C. § 544(a). Judge Williams then added: ... the court finds it contrary to the provisions and the intent of the bankruptcy laws to construe the Ohio statute as granting a priority over the trustee’s claim as a lien creditor. Ohio Rev.Code § 4113.15(C) purports to create a constructive trust in favor of employees which trust covers any unencumbered assets of the employer. Such an inchoate claim cannot be found to be superior to that of the [trustee in bankruptcy]. This court, along with that in In re North American Coin and Currency, Ltd, “cannot accept the position that the bankruptcy estate is automatically deprived of any fund that state law might find subject to a constructive trust.” [767 F.2d 1573, 1575 (9th Cir.1985) cert. denied, 475 U.S. 1083 [106 S.Ct. 1462, 89 L.Ed.2d 719] (1986) ]. To hold otherwise would be to ignore the priorities established by 11 U.S.C. § 507 to the detriment of the debtor’s other unsecured creditors. Gibbons-Grable, 100 B.R. at 904. The state court case cited in Gibbons-Grable is one of only two located by this Court interpreting O.R.C. § 4113.15(C). In United Bhd., the Franklin County Court of Appeals found that pursuant to § 4113.15(C) “any unencumbered funds of the corporation immediately became subject to a constructive trust for the benefit of plaintiffs at the time of the employer’s obligation to pay.” United Bhd., 2 Ohio App.3d at 192, 441 N.E.2d 581. However, the Court went on to note the conflict between this statute and the objectives of Article 9 of the U.C.C.: The object of the notice requirement of Article 9 of the Uniform Commercial Code is to provide protection for creditors who may need to know whether certain property is encumbered. R.C. 4113.15(C) would appear to leave prospective creditors without any way of knowing, other than through direct inquiry, that certain funds of an employer were actually held in trust for the benefit of its employees. R.C. 4113.15(C) is apparently intended to reserve for employees the fruits of their labors. Thus, the General Assembly has sought to protect both employees and creditors without specifying which group has a priority. United Bhd., 2 Ohio App.3d at 193, 441 N.E.2d 581. The other Ohio case to interpret § 4113.15(C) supports the conclusions made in Gibbons-Grable. In First National Bank of Akron v. Saalfield Publishing Co., No. 8572 (Ohio Ct.App., 9th Dist., Jan. 94219, 1978) (available on Lexis), perfected lien creditors initiated an action to collect against the collateral of a bankrupt publishing company. The Graphic Arts International Union intervened, claiming it had priority in certain assets of the company pursuant to its collective bargaining agreement and § 4113.15(C). The court reviewed that section and the collective bargaining agreement and concluded: We seriously doubt whether subsection (C) creates a trust as claimed by the Union. Assuming arguendo that it does, the “trust” is created at, “the time the duty to make such payment arises.” ... [I]n conjunction with the terms of the collective bargaining agreement previously mentioned, we can only conclude that Saalfield’s obligation concerning vacation pay arose after the bank’s security interests were perfected and the real estate mortgage became effective. R.C. 4113.15 establishes no preference in favor of the union. As a matter of state law, then, any rights that the union has as the beneficiary of a statutory trust under § 4113.15(C) are subordinate to the rights of a perfected lien creditor. In the present case, the time that the duty to make benefit payments arose was post-petition at the moment when Debtor received funds from GQ DRYWALL. The Trustee became invested with all the powers of a perfected lien creditor at the moment of filing, and, therefore, the Trustee has a superior claim to the funds. 11 U.S.C. § 544. Reconciling the state trust fund statute with the Bankruptcy Code is not a difficult matter in the present case. Any trust in favor of the Union would have arisen, if at all, after the filing of the Petition in bankruptcy.3 The filing of a petition in a voluntary case “constitutes an order for relief” under the chapter in which the petition was filed. 11 U.S.C. § 301. Section 4113.15(C) impresses a trust only “[i]n the absence of a contest, court order or dispute.... ” It is the finding of this Court that in the present case, the § 301 order for relief constitutes a “court order” which prevents the application of O.R.C. § 4113.15(C). This conclusion is consistent with the broad scope which Congress intended to give § 541. The House and Senate Reports on the Bankruptcy Code indicate that § 541(a)(l)’s scope is broad. Most important, in the context of this case, § 541(a)(1) is intended to include in the estate any property made available to the estate by other provisions of the Bankruptcy Code. See, HR Rep. No. 95-595 p. 367 (1977). Several of these provisions bring into the estate property in which the debtor did not have a possessory interest at the time the bankruptcy proceedings commenced. United States v. Whiting Pools, Inc., 462 U.S. 198, 205, 103 S.Ct. 2309, 2313-14, 76 L.Ed.2d 515 (1983). The Union here urges this Court to recognize a statutory trust from the moment the duty to make benefit payments to the Union arises. Such a “trust” would be imposed despite the fact that (a) no actual express trust document exists, (b) no person is designated as a trustee, except in the statute, and (c) there is neither a designation of the specific trust property nor a separate trust bank account. Indeed, the “trust property” would most likely be commingled in the “trustee’s” general account. We adopt the conclusions of the state appellate courts that it is doubtful whether, under generally accepted principles of trust law, O.R.C. § 4113.15(C) actually creates something which could be called a trust and that this statute clearly undermines the strong policy of Article 9 of the U.C.C. which sought to abolish silent liens. The Bankruptcy Code often takes account of property rights which are determined by state law, as for example, the perfection of security interests and exempt property of the Debtor. Nonetheless, the state law *943must attend to the realities and technicalities of the property rights created, or else those rights will be dismissed as disguised priorities under the Bankruptcy Code. Simply calling certain funds a “trust” no more creates a trust than calling a loan “perfected” creates a mortgage. Courts have recognized this policy when interpreting the dischargeability provisions of the Bankruptcy Act and Code and have declared ineffective provisions which purport to create a “trust” at the moment the duty to make payment arises. Such trusts ex maleficio, arising from the wrongs themselves, establish no fiduciary relationship. Davis v. Aetna Acceptance Co., 293 U.S. 328, 333, 55 S.Ct. 151, 153 79 L.Ed. 393 (1934). Similarly, the statutory trust here arises from the wrong itself and lacks the qualities of an actual, express trust. Finally, the applicability of § 4113.15(C) raises constitutional issues. Giving effect to a “trust” when one has not been literally created, awards to a state legislature favored creditor a super-bankruptcy priority which contravenes those priorities established by the Bankruptcy Code. Under our Constitution, bankruptcy laws are exclusively the purview of Congress, and federal law is supreme over that of the states. U.S. Const, art. I, § 8, cl. 4; art. VI, cl. 2. The priority scheme established by the Bankruptcy Code takes precedence over any state created priorities. It is ... clear that the Bankruptcy Act of 1978 [the Code] explicitly defined the order of creditor priority and declared the congressional intent of federal supremacy over declared but conflicting state law orders of priority. See, e.g., Danning v. Bozek (In re Bullion Reserve of North America), 836 F.2d 1214 (9th Cir.), cert. denied, [486] U.S. [1056], 108 S.Ct. 2824, 100 L.Ed.2d 925 (1988); In re Kennedy & Cohen, Inc., 612 F.2d 963 (5th Cir.), cert. denied, 449 U.S. 833, 101 S.Ct. 103, 66 L.Ed.2d 38 (1980); Gulf Petroleum v. Collazo, 316 F.2d 257 (1st Cir.1963); Elliott v. Bumb, 356 F.2d 749 (9th Cir.), cert. denied, 385 U.S. 829, 87 S.Ct. 67, 17 L.Ed.2d 66 (1966). First Federal, 878 F.2d at 915. With respect to the present case, Congress has already allocated a high priority to employees and employee related contributions. 11 U.S.C. § 507(a)(3), (4). These priorities should not be supplanted by provisions of state law. An appropriate Order shall issue. ORDER The matter before the Court is the Motion of the NORTHEAST OHIO DISTRICT COUNCIL OF CARPENTERS for an order directing the Trustee to execute a check and enforce a statutory trust. For the reasons set forth in the accompanying Memorandum Opinion, the Motion of NORTHEAST OHIO DISTRICT COUNCIL OF CARPENTERS is overruled. The funds held by the Trustee from the co-payee check are part of the bankruptcy estate and may be disposed of by the Trustee in accordance with his duties under the Bankruptcy Code. IT IS SO ORDERED. . 11 U.S.C. § 523(a)(4) excepts from discharge any debt “for fraud or defalcation while acting in a fiduciary capacity...." . 11 U.S^C. § 544(a) provides "The 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 debt- or 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. ...” . The Union may contend that the trust arose under the statute "from the time the duty to make such payment arises,” and that this means the moment the employees performed services for Universal Trend. A trust, however, must have a corpus, and the only funds the Union has identified as a trust corpus in this case came into the hands of the Debtor post-petition. Any trust could not have come into existence before this time.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491130/	MEMORANDUM OPINION JAMES E. YACOS, Bankruptcy Judge. Before me is a Motion to Dismiss by debtor’s principal creditor Realty Funding Corporation on the ground that a non-business debtor is not entitled to file a chapter 11 petition as a matter of law. This Court has jurisdiction to decide this matter pursuant to 28 U.S.C. § 157, and the general reference order dated February 11, 1985 by the U.S. District Court for New Hampshire. A hearing was held on February 23, 1990, and on that date I ordered that the motion be denied, but took leave to refine my remarks in an opinion. The debtor lives with a companion in a house subject to a mortgage held by the moving creditor. The debtor has no regular source of income, and, therefore, would not be entitled to chapter 13 relief. The debtor intends to finance her plan of reorganization with cash provided by her companion, who is not a debtor in this court.1 There is no First Circuit decision on this issue. However, one court in this circuit has recently decided this issue. In In re Cook, 98 B.R. 624 (Bankr.D.Mass.1989), Judge Queenan held that an individual not engaged in business could seek chapter 11 relief. Courts elsewhere are split on this issue with the bulk favoring allowing relief. Compare In re Moog, 774 F.2d 1073 (11th Cir.1985); Gonzales v. Parks, 830 F.2d 1033, 1034 n. 1 (9th Cir.1987) (dictum); Grundy Nat’l Bank v. Shortt, 80 B.R. 802 (W.D.Va.1987); In re McStay, 82 B.R. 763 (Bankr.E.D.Pa.1988); In re Greene, 57 B.R. 272 (Bankr.S.D.N.Y.1986) with Wamsganz v. Boatmen’s Bank of DeSota, 804 F.2d 503 (8th Cir.1986). (The movant also contends two other circuit court decisions favor its position. See Matter of Little Creek Dev. Co., 779 F.2d 1068 (5th Cir.1986)2; Matter of Winshall Settlor’s Trust, 758 F.2d 1136 (6th Cir.1985)3). The start, and in this case the end, of our inquiry is with the statutory language. This method for deciding a dispute involving statutory construction is now the prevailing rule established by the United States Supreme Court. As I stated recently in In re PSNH, 108 B.R. 854 (Bankr.D.N.H.1989): Generally speaking, the “plain meaning rule” will be applied in the federal 12courts to statutory language free from ambiguity, notwithstanding policy arguments presented by those contending for an interpretation contrary to the apparent thrust of the language selected by the legislature. The most recent pronouncements by the Supreme Court on this issue in the bankruptcy area make this clear. The decision in United States v. Ron Pair Enter., Inc., 489 U.S. 235, 109 S.Ct. 1026, 103 L.Ed.2d [290] (1989), is apposite. In this case, the Court read Section 506(b) of the Bankruptcy Code as allowing postpetition interest on an ov-ersecured nonconsensual prepetition claim. In making its ruling, the Court emphasized the plain language of the statute with a reading compelled by the punctuation (notwithstanding an allegedly “misplaced” comma) employed by the legislative drafters. The court stated: 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. Landreth Timber Co. v. Landreth, 471 U.S. 681, 685, 105 S.Ct. 2297, 2301, 85 L.Ed.2d 692 (1985). In this case it is also where the inquiry should end, for where, as here, the statute’s language is plain, “the sole function of the courts is to enforce it according to its terms.” Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 194, 61 L.Ed. 442 (1917). $ # # * * The plain meaning of legislation should be conclusive, except in the “rare cases [in which] the literal application of a statute will produce result demonstrably at odds with the intention of its drafters.” Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 3250, 73 L.Ed.2d 973 (1982). Id. 109 S.Ct. at 1030, 1031, 103 L.Ed.2d at 298, 299. Cf. Mansell v. Mansell, — U.S. -, 109 S.Ct. 2023, 2031, 104 L.Ed.2d 675, 688 (1989) (“Our task is to interpret the statute as best we can, not to second guess the wisdom of the congressional policy choice”). In this case, the plain meaning of the pertinent statutes is that non-business debtors can use chapter 11. Section 109(d) reads: Only a person that may be a debtor under chapter 7 of this title, except a stockbroker or a commodity broker, and a railroad may be a debtor under chapter 11 of this title. This debtor is clearly entitled to chapter 7 relief. Indeed, a “person” is defined to include an individual. See 11 U.S.C. § 101(35).4 Moreover, Congress showed it knew how to exclude non-business entities when it wanted to because, for example, with regard to trusts filing bankruptcy petitions, it allowed only “business trusts” to be entities entitled to bankruptcy court relief. See 11 U.S.C. § 101(8) and 109. In short, I must agree with the Virginia court that decided this issue that “[a] plain reading of the statutory language ... does not preclude nonbusiness debtors from utilizing chapter 11 ...” Grundy Nat’l Bank, supra at 804. The only exception to the plain meaning rule is “when the literal language of the statute will lead to patently absurd results.” In re PSNH, supra. However, that principle is not implicated here because it must be remembered that when Congress enacted the Bankruptcy Code in 1978 it was the consolidation of a prior act which had had three separate reorganization chapters, and one of those chapters allowed an individual with real property to reorganize. It is true that Congress limited chapter 13 to restrict individuals from modifying their first mortgage on their principal residence. See 11 U.S.C. § 1322(b)(2). This indicates that allowing non-business debt*13ors to file a chapter 11 petition proposing such lien modification arguably conflicts with this aspect of Congressional intent, but I don’t think Congress necessarily concluded that if a non-business debtor wanted to go through chapter 11 they couldn’t do it because of this feature of chapter 13. Indeed, allowing a non-business individual to file a chapter 11 petition in the present situation, where the debtor does not qualify for chapter 13 with her only alternative being liquidation under chapter 7, just as arguably would comport with overall Congressional intent.5 See In re Moog, supra (debtor could not qualify for chapter 13 relief); In re McStay, supra, (same). Although it is unnecessary to refer to legislative history, see In re PSNH, supra, the more persuasive history is that individuals would be allowed chapter 11 relief. The House report states: Chapter 11, Reorganization, is primarily designed for businesses, but permits individuals to use the chapter. The procedures of chapter 11, however, are sufficiently burdensome that their use will only make sense in the business context, and not in the consumer context. H.R. Report No. 95-595, 95th Cong., 1st Sess. 6 (1977), U.S.Code Cong. & Admin. News 1978, pp. 5787, 5968. See also S.Rep. No. 95-989, 95th Cong. 2d Sess. 3 (1978), U.S.Code Cong. & Admin.News 1978, pp. 5787, 5789. In short, this Court is compelled to conclude as Judge Queenan of Massachusetts recently did: Congress could have denied Chapter 11 relief to those who do not operate a business, and it can be argued that it should have. But these considerations are not the province of a court. Both the statute and its legislative history make it plain that Congress did not do so. In re Cook, supra, at 626. . This Court renders no opinion on whether the petition should be dismissed for cause under § 1112(b) of the Code by virtue of this fact. A motion raising this issue is scheduled for subsequent hearing by this Court. . This case did not rule on this legal issue, in my opinion, but merely discussed the requirements for finding “bad faith" in filing the petition. A bad faith inquiry is a separate issue from the one I am deciding today. See In re Bryan, 104 B.R. 554 (Bankr.D.Mass.1989). .This case was not a substantial ruling on the question of the disqualification of a non-business debtor as a subsequent decision in that circuit has accurately pointed out. See In re Markunes, 78 B.R. 875 (Bankr.S.D.Ohio 1987). . That section reads in full: “person" includes individual, partnership, and corporation, but does not include governmental unit, Provided, however, that any governmental unit that acquires an asset from a person as a result of operation of a loan guarantee agreement, or as receiver or liquidating agent of a person, will be considered a person for purposes of section 1102 of this title. . One way to read Wamsganz, supra, is to distinguish it on this basis. In that case, chapter 13 relief still remained available to the debtors. Id. at 505.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491132/	ORDER EDWARD R. GAINES, Bankruptcy Judge. This matter is before the Court on the motion for an order to be admitted pro hac vice to practice in these proceedings in this Court, filed by Glenn W. Merrick, a member of the law firm of Davis, Graham and Stubbs of Denver, Colorado, on behalf of the debtor, Nu-South Industries, Inc. Having reviewed the motion, the objections thereto filed by Mississippi Chemical Corporation and the United States Trustee, and the briefs submitted by the parties, the Court is of the opinion that serious and incapacitating conflicts of interest are abundantly present in this case, which require that the objections be sustained and that the motion filed by Glenn W. Merrick be denied. I.Facts This Chapter 7 proceeding was commenced by the filing of a voluntary petition on February 1, 1990. Stephen H. Leech, Jr., of the law firm of Phelps, Dunbar, Marks, Claverie and Sims (“Phelps Dunbar”) of Jackson, Mississippi, is counsel for the debtor. H.S. Stanley, Jr., is the Chapter 7 trustee. The motion filed by Glenn W. Merrick of the law firm of Davis, Graham and Stubbs, Denver, Colorado, requests that Mr. Merrick be admitted pro hac vice to serve as co-counsel for the debtor with Phelps Dunbar. Mr. Merrick is not licensed to practice law in the State of Mississippi. It is undisputed that Mr. Merrick and his law firm have been serving as both counsel for the debtor and another corporation known as Nu-West Industries, Inc. (“Nu-West”). Mr. Merrick seeks to serve simultaneously as counsel for the debtor and Nu-West in this Chapter 7 proceeding. Based on the schedules filed by the debt- or, information developed at the first meeting of creditors, and other pleadings filed in this case, the following facts have been established concerning the relationship between the debtor and Nu-West: 1. Nu-West is the sole shareholder of the issued and outstanding shares of the debtor’s common stock. 2. Nu-West is scheduled as an unsecured creditor in the amount of $43,243,-000.00. This amount represents 97% of the unsecured claims and 68% of the total debt owed by the debtor. 3. The debtor and Nu-West are joint obligors on an indebtedness owed to John Deere Industrial Equipment Company in the alleged amount of $488,571.99. This indebtedness was in default at the time of filing. Several pieces of equipment held as security by John Deere are essential to the treatment of the contaminated water on the debtor’s property. 4. A constant and uninterrupted supply of natural gas is vital to the preservation and safety of the facility. Steven W. Gampp, Vice-President and Secretary for Nu-South Industries, Inc. (“debtor”) testified at the first meeting of creditors that the debtor’s board of directors had authorized Lou Whitlock, a Vice President of 91Nu-West Industries, Inc. (“Nu-West”) with experience negotiating natural gas contracts, to negotiate and execute a natural gas contract on behalf of the debtor with Trade and Development Corporation (“TDC”). A proof of claim in the debtor’s case has been filed by TDC in the amount of $40,462.10. 5. Winthrop Resources Corporation (“WRC”) is mentioned on the debtor’s Schedule A-2 as a lessor of computer and radio equipment and photostatic copiers. The amount listed as owing to WRC under the leases is $115,486.00. The following is noted next to WRC in Schedule A-2: Listed for informational purposes only. Obligor on Winthrop Resources corporation instruments is Nu-West Industries, Inc. and property to be returned to Nu-West Industries, Inc. This is consistent with the notation found at Item No. 8 of debtor’s Statement of Financial Affairs (“Property held for another person”). 6. Steven Gampp, Vice-President, Treasurer and Secretary of Nu-West, was a Vice-President and Secretary of the debtor. Mr. Gampp testified at the first meeting of creditors that Craig Harlen, President of Nu-West, was President of the debtor. Mack Barber and A1 Daubach, Executive Vice-Presidents of Nu-West, were Executive Vice-Presidents of the debtor. Mr. Daubach was a director of the debtor, but was not a director of Nu-West. Mr. Gampp also testified that certain administrative functions were performed by Nu-West for the debtor, the primary one being marketing of finished goods by Nu-West for the debtor. Mr. Gampp testified that the sales staff of Nu-West sold finished goods for the debtor and charged the Debt- or on inter-company allocations. 7. Mr. Gampp testified at the first meeting of creditors that authorized signatories on accounts of the debtor included two officers of Nu-West, who were also officers of the debtor. To date, no evidence has been presented to the Court that any of these persons improperly executed control over any debtor’s account for the benefit of Nu-West (although there has been no reason to present any such evidence at this point in time). 8. The debtor and Nu-West filed consolidated tax returns. 9. At the initial meeting of creditors in this case, Mr. Gampp testified that in order to realize economies of coverage cost, Nu-West negotiated a master insurance policy to cover the assets of each of the corporations in the corporate group. Mr. Gampp testified that the debtor (and all other Nu-West subsidiaries) were then billed their proportional share of the resulting premiums under the Master Policy by Nu-West. 10. Invoices for payment by Nu-Gulf Industries, Inc., a subsidiary of Nu-West which was recently sold, appear as liabilities of the debtor. The corporate representative of the debtor at the first meeting of creditors, Steven Gampp (also an officer of Nu-West), indicated that these debts total approximately $260,000.00 and are properly listed as obligations of the debtor since the debtor received the product or service that forms the basis of the claim. 11. Nu-West appears to be an insider of the debtor under § 101(30) of the Bankruptcy Code. The debtor appears to have made payments to Nu-West during the one-year period prior to the filing of the bankruptcy petition. It is alleged that Nu-West became the credit facility for the debtor when other credit became unavailable. 12. Nu-West has guaranteed payment of Mr. Merrick’s charges for legal services and expenses on behalf of the debtor. 13. The debtor and Nu-West are co-defendants in the lawsuit styled Big River, Inc. v. Nu-South Industries, Inc. and Nu-West Industries, Inc., U.S. Bankruptcy Court, E.D. Ark., Case No. AP 89-2011. II. Issue of Law The issue to be decided here is whether a conflict of interests exists which requires disqualification of Glenn W. Merrick and his law firm from representing the debtor with Phelps Dunbar, in light of the fact that Davis, Graham and Stubbs represents and will continue to represent Nu-West Industries, Inc., simultaneously with the debtor, in a wide range of corporate litigation and other legal matters. III. Conclusions of Law The standards for the employment of professionals are strict in bankruptcy. Congress has determined that strict standards are necessary in light of the unique nature of the bankruptcy process. In re Cropper Co., 35 B.R. 625, 629 (Bankr.M.D.Ga.1983). The standards for reviewing 92conflicts of interests are best summarized by Judge Harold C. Abramson in the case of In re Michigan General Corp., 78 B.R. 479 (Bankr.N.D.Tex.1987), aff'd in part, rev’d and remanded in part on other grounds, sub nom. Diamond Lumber v. Unsecured Creditors’ Committee, 88 B.R. 773 (N.D.Tex.1988). Judge Abramson held that any possibility of conflict may warrant disqualification. If there is any doubt as to the existence of a conflict, that doubt should be resolved in favor of disqualification. 78 B.R. at 484 (citing In re Johore Investment Co. (U.S.A.), Inc., 49 B.R. 710, 713 (Bankr.D.Hawaii 1985). The ABA Code of Professional Responsibility requires that an attorney avoid even the appearance of impropriety. ABA Code of Prof. Res., Canon 9. Mr. Merrick has clearly indicated that his law firm has represented and will continue to represent Nu-West on a regular basis in a variety of matters and litigation. In addition to this ongoing representation of Nu-West, Mr. Merrick seeks through his motion to represent Nu-South in this Chapter 7 proceeding. The motion for an order to be admitted pro hac vice did not disclose the fact that Mr. Merrick and his law firm would be representing both Nu-West and the debtor. Said motion was prepared by local counsel, Phelps Dunbar. The continued representation of Nu-West by Mr. Merrick and his firm was disclosed to Nu-South’s largest secured creditor, Mississippi Chemical Corporation, prior to Nu-South’s Chapter 7 filing. It was counsel for Mississippi Chemical Corporation who first informed the Court of the dual representation of Nu-West by Mr. Merrick. But for the objection filed by Mississippi Chemical Corporation as joined by the United States Trustee, this Court would not have known of the duality of representation by Mr. Merrick. The law requires that counsel for the debtor assist the trustee in performing his duties. The failure to have counsel for the debtor with undivided loyalty poses a serious threat of injury to other creditors. As pointed out by Mississippi Chemical Corporation on pages 4 and 5 of its rebuttal brief, would Mr. Merrick assist the trustee in: 1. filing a preference action against Nu-West? 2. filing an alter ego or piercing the corporate veil action against Nu-West? objecting to the claim of Nu-West? CO reclassifying or subordinating the claim of Nu-West? ^ 5. having the deficiency owed to John Deere paid by Nu-West instead of the estate? 6. investigating the affairs of the debt- or to determine whether obligations purportedly owed by the debtor are actually owed by Nu-Gulf? 7. investigating the affairs of the debt- or to determine whether obligations purportedly owed by the debtor are actually owed by Nu-West? These questions clearly demonstrate the potential conflict of interests which are so glaringly obvious in this case. Courts have consistently held that if there exists any doubt as to whether or not there is a conflict of interests, such doubt should be resolved in favor of disqualification. Hull v. Celanese Corp., 513 F.2d 568, 571 (2nd Cir.1975); In re Johore Investment Co. (U.S.A.), Inc., 49 B.R. 710, 713 (Bankr.D.Hawaii 1985); In re Whitney-Forbes, Inc., 31 B.R. 836, 838-39 (Bankr.N.D.Ill.1983). The role of debtor’s counsel in this Chapter 7 proceeding is significant. In the case of In re Freedom Solar Center, Inc., 776 F.2d 14 (1st Cir.1985), one attorney represented both the debtor and the debtor’s sole shareholder in the Chapter 7. The trustee sought to have the attorney disqualified as a result of the dual representation. The first Circuit found a prima facie case for disqualification requires three elements: 1. representation of multiple clients by the attorney; 2. differing interests of the clients; and 3. absence of full disclosure of the multiple representation and consent of the clients. As Mississippi Chemical Corporation points out, the prima facie elements set forth above by the First Circuit exist in this case. First, Mr. Merrick would be representing multiple clients. Second, these clients have differing and conflicting interests. The debtor would benefit from the John Deere and Nu-Gulf debts being removed from this case, the law suit damages being paid by Nu-West, and transfers to Nu-West being recovered. These interests differ and conflict with the interests of Nu-West. Third, the trustee in this case has not consented to Mr. Merrick’s dual *93representation, and disclosure of the dual representation was not made until Mississippi Chemical Corporation filed its objection. In addition to the foregoing, authority for denying Mr. Merrick’s motion is contained in Canon 5 of the ABA Model Code of Professional Responsibility, which states that “a lawyer should exercise independent professional judgment on behalf of a client.” The disciplinary rules and ethical considerations, cited on pages 12 through 14 of the rebuttal brief of Mississippi Chemical Corporation bind this Court to deny Mr. Merrick’s motion. Additional authority for denying the motion is found in Canon 9 of the ABA Model Code of Professional Responsibility which states “a lawyer should avoid even the appearance of the professional impropriety.” Actual impropriety is not required. It is “the appearance of impropriety” that must be avoided. Both Nu-West and Mississippi Chemical discuss in their briefs § 327(a) of the Bankruptcy Code. Although this particular section of the Code is not technically applicable to Chapter 7 cases, the ethical considerations and standards set forth above require disqualification under the extraordinary circumstances of this case. IV. Conclusion If this Court were to grant the motion, Mr. Merrick would be serving as counsel for the debtor on the one hand, and counsel for Nu-West, a creditor, alleged insider, stockholder, joint obligor, co-defendant, and guarantor of fee payments on the other hand. The trustee’s role in this ease is complicated and if he is going to be assisted by debtor’s counsel it must be counsel that is totally independent of and from Nu-West. The debtor is presently being represented by Phelps Dunbar, a Mississippi law firm. The Court has been informed that Nu-West has guaranteed payment of the legal fees of Phelps Dunbar in this case. This greatly concerns the Court. Phelps Dunbar, the United States Trustee, Mississippi Chemical Corporation, the case trustee, the attorney for the case trustee, and all creditors must be vigilant in assuring that the payment of fees by Nu-West in no way adversely influences debtor’s counsel. A separate order shall be entered pursuant to Federal Rule of Civil Procedure 58 and Bankruptcy Rule 9021.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491133/	FINDINGS OF FACT, OPINION AND CONCLUSIONS OF LAW J. VINCENT AUG, Jr., Bankruptcy Judge. This matter came on for trial before the Court on May 22 and 23, and June 7, 1989 on the Complaint for Turnover Order, filed by Frederick R. Reed, Trustee for the estate of Bill Young & Company, Debtor in Case No. 1-87-04107, a Chapter 11 case, and the Counterclaim of Dayton Electroplate, Inc. (“DEI”). The trustee’s complaint asserts a claim for recovery against DEI on a business account for goods sold by Debtor to DEI prior to the filing of Debtor’s petition for relief under Chapter 11. DEI’s counterclaim seeks recovery for damages resulting from negligence and breach of contract in the performance of services by Debtor in connection with the sale of goods. We find that the Trustee is entitled to judgment in his favor on his turnover complaint. We also find . that the Trustee is entitled to judgment in his favor on DEI’s counterclaim. The Court having considered evidence offered by the parties, the stipulation of facts as set forth in their Joint Pre-Trial Statement, the arguments of the parties, and the parties’ respective proposed findings of fact and conclusions of law, and being otherwise sufficiently advised, hereby makes and enters the following Findings of Fact and Conclusions of Law, pursuant to Bankruptcy Rule 7052. FINDINGS OF FACT 1. On November 20, 1987, Bill Young & Company filed a voluntary bankruptcy peti103tion in the United States Bankruptcy Court for the Southern District of Ohio, Western Division, Case No. 1-87-04107. Frederick R. Reed was appointed Trustee in the bankruptcy action. 2. On March 22, 1988, the Trustee filed a Complaint for Turnover Order against DEI to collect money owed by DEI to Bill Young & Company. 3. Bill Young & Company was a supplier of chemicals and equipment to the electroplating industry. It supplied proprietary chemicals, generic chemicals, equipment, and stripping chemicals to DEI. MacDermid, Inc. is a supplier of proprietary chemicals. MacDermid supplied chemicals to Bill Young & Company, but is not a party to this lawsuit. 4. DEI obtained relief from the automatic stay and asserted a counterclaim against Bill Young & Company alleging damages arising out of breach of contract and negligence. DEI claims that Bill Young assumed the duty to provide technical chemical expertise to DEI’s electroplating business and that Bill Young breached that duty by failing to realize that the “low concentration” chemical mixture it was recommending resulted in a large number of defectively plated goods and scrap parts. 5. DEI is an Ohio corporation whose sole shareholder is Charles J. Borum. It was incorporated in May, 1984, for the purpose of purchasing certain assets of Dayton Rustproof, a company in the electroplating business. DEI is in the business of electroplating parts manufactured by other companies. DEI primarily plates wire goods, such as fan guards and wire shelving; metal stamped goods, such as computer housings; and other metal parts, such as refrigerator shelving brackets, refrigerator and oven door handles. Electroplating 6. Electroplating is a process of depositing a metal finish on a part by means of passing an electric current through a solution which includes the metal. An electrical current is generated and passed through the metal which is being plated (the anode), then through the conducting solution, depositing the metal on the surface of the part to be plated (the cathode). 7. In nickel electroplating, the electrons passing through the current change the electrically neutral nickel into nickel ions, positively charged particles, which then travel to the cathode, the part to be plated, and are deposited as nickel on the surface of the part. 8. DEI uses automatic platers in its nickel and nickel-chrome plating operation. The part to be plated is suspended from a rack and the part is automatically transferred from one tank to another during the course of the operation. The first part of the nickel and nickel-chrome plating operation is the cleaning and rinsing cycle, which is followed by the nickel plating. The operation is then followed by another series of rinsing, followed by chromium plating and then once again, rinsing. Surface finish, roughness, weld marks, and spatter, among other things, are defects from the part fabricator which can affect the plating process. 9. Parts may be plated for a variety of reasons, including the prevention of rusting, general appearance, and the production of base metal parts with the surface properties of a metal such as nickel, but which would be produced at a lesser cost than one of solid nickel. 10. Nickel sulfate, nickel chloride and boric acid are basic chemicals, or commodities used in a nickel plating bath. Proprietary chemicals include the conditioners, brighteners, and wetting agents which are added to the bath. A proprietary chemical is one which is normally produced through a patented process. 11. The basic formula deposits what is characterized as a dull nickel finish. Organic additives have been produced which permit a modification of the grain structure of the nickel to impart brightness to the finish, commonly referred to as a bright nickel process. The additives generally consist of a control agent, primary and secondary brighteners and wetting agents. 10412. During the 1970’s, the electroplating industry faced problems with respect to costs and treatment of pollution. As a result, lower concentration nickel plating formulas were developed. Dayton Rustproofing and DEI used a low concentration formula. Throughout the time period in which DEI used the low concentration formulation, it experienced a problem in its nickel plating operations in that a number of parts, whether plated with nickel alone or nickel and chrome, yielded defective plating. These defects were manifested primarily in the form of “burns” at high current density areas and very thin plating in low current density areas. Efforts by DEI to rectify these problems by adjusting the DC current flow were to no avail. Increasing the current to alleviate poor plating in the low current density areas resulted in “burning” in the high current density areas, while decreasing the current to avoid “burning” in the high current density areas resulted in thin plating in low current density areas. Prior to the fall of 1987, the period during which the low concentration formulation was in use at DEI, Mr. Borum, the owner of DEI, estimated the percentages of parts that manifested defects ranged from approximately 8% to 30%. Upon conversion to a bath with an increased sulfate concentration in November of 1987, Mr. Borum estimated his reject rate to be in the range of 2%. He also switched to another chemical supplier. DEI, however, did not keep records of defectively plated parts or scrap parts during the period from June, 1984 to October, 1987. Charles J. Borum and DEI 13. Charles J. Borum, the sole shareholder of DEI, has an engineering degree from the University of Texas and a law degree from the American University, Washington College. He is a member of the bar of the State of Ohio. At one time, he was a member of the patent bar. 14. Mr. Borum left employment with Hobart Industries in 1983 or at the end of 1982. He had begun with Hobart as a patent lawyer and then went into management. He was senior vice president of Hobart Industries at the time of his retirement, and was also a member of the Board of Directors until Hobart Industries was acquired by Dart-Kraft. Mr. Borum was one of the chief financial officers of Hobart Industries. 15. Mr. Borum and the principals of Dayton Rustproof came to an agreement regarding DEI’s purchase of the assets of Dayton Rustproof some time in April, 1984. The purchase of certain of the assets of Dayton Rustproof was concluded on or about June 1, 1984. Charles J. Borum did a careful review of the financial aspects of Dayton Rustproof and developed a business plan to determine that the business was viable and that he had an interest in purchasing it. 16. On a frequent basis in March, April and May, 1984, Mr. Borum was present at Dayton Rustproof. This even included going there at night and watching the night shifts run, and talking to various employees. 17. Prior to the purchase of Dayton Rustproof, Charles Borum began reading technical books on plating, as well as other periodicals. He also had available to him technical literature from MacDermid Chemical Company and understood the basic principles of electroplating. 18. In May or June, 1984, Mr. Borum became aware that DEI was running a low concentration bath. At trial, he testified that he recalled Mr. Greene saying the bath was run differently than the MacDermid technical data sheet advised. 19. Prior to the purchase of the assets of Dayton Rustproof, Mr. Borum felt that Bob Greene and Bill Young & Company were providing good service to Dayton Rustproof. 20. Prior to the execution of the agreement to purchase certain of the assets of Dayton Rustproof, Charles J. Borum recognized what he perceived to be a high level of scrap and defectively plated parts in 105both the zinc and nickel plating operations of Dayton Rustproof. On June 1, 1984, Charles Borum began instituting production changes to improve quality control both in the zinc and nickel plating operations of DEI. (The problems on the “zinc side” of the business were rectified and are not part of this lawsuit.) 21. In May, 1984, Charles Borum met with Bob Greene and Richard Evans, then president of Bill Young & Company, to discuss a relationship between Bill Young & Company and DEI. 22. At the meeting, Charles J. Borum asked if Bill Young & Company would continue to supply chemicals and related technical assistance if Mr. Borum bought Dayton Rustproof. Mr. Borum also requested assurance that Mr. Greene would continue to service the account. 23. Bill Young & Company agreed to provide proprietary chemicals to DEI and to provide technical support services in connection with the use of those chemicals. Bill Young & Company also agreed to supply basic chemicals and equipment. There were no specific orders for chemicals or equipment at that time. It was merely understood that Bill Young & Company was willing to provide material and services if requested by DEI. 24. No agreement or understanding with Bill Young & Company prevented DEI from seeking an outside consultant with respect to its nickel plating operation, or any of its other operations. 25. There was no aspect of the understanding or agreement between Bill Young & Company and DEI that prevented DEI from having the composition of its baths tested by sources other than Bill Young & Company. Bob Greene and DEI 26. Bob Greene was employed by Bill Young & Company from May, 1972 through October, 1987 as a sales representative. DEI was one of the customers to which Bob Greene was assigned by Bill Young & Company. He visited DEI at least once a week. 27. From approximately 1975 or 1976, Robert Greene called on the Dayton Rustproof account. From approximately 1980 or 1981, Bill Young & Company supplied proprietary and generic chemicals to Dayton Rustproof to use in its nickel plating baths. 28. Dayton Rustproof ran a low concentration formula in its nickel baths prior to Bob Greene servicing the account. After Bill Young & Company began providing proprietary chemicals for the nickel plating baths, Dayton Rustproof continued to run the nickel baths with a low concentration formula. 29. Bob Greene and John Thomas, the DEI operations manager, measured the various tanks at Dayton Rustproof and he (Bob Greene) compiled what is generally referred to as the “grey book” which indicated the size of the various tanks and the operating parameters of the baths, including the nickel bath composition formulas. 30. At the time DEI purchased the assets of Dayton Rustproof, John Thomas stayed on as operations manager of DEI. 31. Initially after the purchase of Dayton Rustproof, John Thomas was placed in charge of the nickel plating operation. Subsequently, Bob Schaeffer, an employee of DEI, had responsibility over the nickel plating operation. 32. From June, 1984 through approximately October, 1987, DEI utilized the same nickel bath formula which had been used by Dayton Rustproof. 33. DEI placed various orders with Bill Young & Company for proprietary and generic chemicals and equipment between June, 1984 and October, 1987. 34. At various times between June, 1984 and October 1987, DEI obtained proprietary chemicals directly from MacDer-mid Chemical Company. DEI did not receive any technical support from MaeDer-mid, Inc. with respect to proprietary chemicals purchased directly from MacDermid, Inc. 35. As part of the technical support provided by Bill Young & Company to DEI, 106Bob Greene did Hull Cell tests on the nickel baths. A Hull Cell is a miniature plating bath. 36. As an additional part of the technical support, Bob Greene took samples of the baths, sometimes testing them at DEI, sometimes having them tested at Bill Young & Company, and at times sending them to MacDermid, Inc. for testing. DEI was provided with copies of the results of the tests done by MacDermid. Bob Greene did the tests on a regular basis. 37. DEI hired Kevin Rommel to do some of the testing of its nickel operations in-house. DEI purchased its own Hull Cell tester and had the ability to conduct its own Hull Cell tests. 38. Bob Greene recognized problems in the nickel plating operation at DEI. In providing advice to assist in correcting the problems, he concentrated on areas other than the composition of the bath since historically, the low concentration bath had been run with effective results. 39. Bob Greene assisted DEI in setting up procedures to strip off chrome that was not satisfactorily plated, reactivate the part, and replate it with chrome. 40. Mr. Greene had a number of discussions with Mr. Borum and others at DEI regarding the subject of defectively plated nickel parts. 41. Bob Greene and Bill Young & Company provided the required technical service to DEI in a reasonably skillful or workmanlike manner. Stripping Process 42. Bob Greene advised DEI of a way to change the nickel stripping line to get away from using a cyanide stripping system. He advised DEI to use a new stripping system called Yoltastrip. The changeover assisted DEI with respect to waste treatment. 43. DEI and its predecessor, Dayton Rustproof, stripped defectively plated nickel parts and replated them. Bob Greene advised DEI with respect to techniques and methods to use for the stripping operation. He also advised it on how to reactivate chrome parts after they had been stripped of chrome so that the nickel would not have to be stripped. 44. DEI ran a stripping line for defectively plated nickel parts. DEI has no business records to verify the running of the strip line. DEI did not maintain records of the number of rejected parts or number of parts stripped during the period of June, 1984 through October, 1987. Bidding on New Jobs 45. During the period from June 1, 1984 to October, 1987, DEI obtained new customers, among other methods, by obtaining requests to quote on jobs. Mr. Borum was the individual at DEI who bid on the jobs, In the bidding process, Mr. Borum had a pricing system for calculating the price to charge for plated parts. 46. Among other things, Mr. Borum took into consideration the costs to DEI to plate particular products with the intention of making a profit on the particular part. 47. In considering the amount to charge a customer, Mr. Borum considered his labor costs, including the amount of time it would take to run a particular part and how difficult it would be to provide a properly finished part to the customer. 48. In addition, Mr. Borum took into consideration cycle time, the ability of his employees, and the anticipated scrap rate, based on the company experience. Terms of Payment 49. Debtor’s invoices to DEI contained the following language: Products are warranted to be free from defects in material and workmanship at the time sold. The sole obligation of seller and manufacturer under this warranty shall be to replace any product defective at the time sold. Under no circumstances shall manufacturer or seller be liable for any loss, damage, or expense, direct or consequential, arising out of the use of or inability to use the product. # * * # # * 107A SERVICE CHARGE equal to 1V&> per month (18% per annum) or the maximum rate allowed by applicable law, whichever is less, will be charged on past due invoices. We find that this invoice represented the written contract interest rate between the parties. We further find that Bill Young & Company may charge interest of 18% on $96,665.18 from November 20, 1987 as specified by the contract on the bottom of the invoice. 50. As of November 20,1987, DEI owed Bill Young & Company the sum of $96,-665.18, which sum reflects past due invoices for goods and materials delivered to DEI by Bill Young & Company. DEI also owes the sum of $9,624.94 in interest only invoices. DEI does have a credit, however, of $4,159.26. Thus, the total amount owed to Bill Young & Company (absent interest from November 20, 1987) is $102,130.86. Discussion We find that Mr. Borum was not the inexperienced entrepreneur which he attempted to portray at trial. He would have this Court believe that a man with his extensive technical and financial background would rely totally on one individual, Mr. Greene. Mr. Greene was a salesman for the debtor, Bill Young & Company and not even employed by Mr. Borum. Mr. Borum stated at trial that he could not afford a full-time employee such as Mr. Greene. Yet, this is exactly what Mr. Bo-rum sought — full time expert technical assistance from Bill Young & Company. While Mr. Borum may have been inexperienced in the electroplating business at first, he spent a good deal of time at Dayton Rustproofing prior to the purchase. Both before and after the purchase he had technical literature available to him and he testified that he understood the basic principles of electroplating. Mr. Borum, Mr. Greene, and the other employees of DEI were trying to lower the high scrap rate. Nothing, however, prevented Mr. Borum from calling upon an expert, such as Mr. Benning, who testified at trial. Indeed, logic would dictate that if the people around you cannot help, you look elsewhere. Mr. Greene did realize that there were problems at DEI. At trial he testified that he concentrated on looking for electro-me-chanical problems versus any chemical problems. Nonetheless, we find Mr. Bo-rum’s extreme reliance on Mr. Greene to be unreasonable. In point of fact, Mr. Greene was only at DEI once a week. In addition, we note that this chemical bath was inherited from Dayton Rustproofing and it apparently plated some products in an acceptable fashion while resulting in large scrap rates in others. DEI has brought the counterclaim in contract and in negligence. This is, however, purely a contract action for chemicals sold by Bill Young & Company to DEI. As part of the selling of these chemicals, Bill Young & Company tested the baths to insure adequate compliance with the type of bath in use. Mr. Greene also recommended other changes which he thought might benefit DEI and in all probability, his employer, Bill Young & Company, too. One of the changes was the Voltastrip. This was the extent of the contract and Bill Young & Company performed it in a reasonable manner. At no time did this case arise to the level of a negligence action. There was no duty assumed on the part of Bill Young & Company to lend total technical assistance to DEI. The argument made by DEI that Bill Young & Company somehow waived interest on its interest-only invoices both before and after December 31,1986 by not submitting additional interest-only invoices does not make sense to this Court. Joint Exhibit 19 dated June 30, 1987 sets forth a payment schedule between Bill Young & Company and DEI. It was anticipated that all deliveries would be C.O.D. with a percentage added to each invoice until DEI was on a 90 day payment plan. A further term of this agreement was that Bill Young & Company would apply all payments to the oldest invoices. Although DEI made payments to Bill Young & Com108pany after June 30, 1987, those payments were credited not to the oldest invoices, being the interest-only invoices, but to invoices for materials purchased for the period during January and February of 1987. This worked to DEI’s benefit, however, in that Bill Young & Company did not charge interest on the interest-only invoices. Thus, the total amount of DEFs principal amount was being reduced. Furthermore, neither side adhered to the conditions set forth in Joint Exhibit 19. We therefore found that the 18% interest rate on the bottom of the invoices to be controlling. Conclusions of Law 1. Bill Young & Company and DEI entered into a series of agreements for the delivery of equipment, as well as proprietary and generic chemicals. 2. Bill Young & Company and DEI did not enter into a contract for the provision of technical services aside from those services anticipated to be performed in connection with chemicals and equipment actually supplied by Bill Young & Company. 3. To sustain a cause of action in negligence, DEI must present evidence of a duty owed by Bill Young & Company to DEI, a breach of that duty, and an injury proximately resulting from that breach. See, e.g., Menifee v. Ohio Welding Prods., Inc., 15 Ohio St.3d 75, 77, 472 N.E.2d 707 (1984). The scope of the duty which arises in the context of the sale of goods and services is defined in part by reference to the parties’ contractual obligations. See, Whitaker-Merrell Co. v. Profit Counselors, Inc., 748 F.2d 354, 358 (6th Cir.1984). 4. Bill Young & Company owed no duty to DEI with respect to the providing of technical support aside from the implied contractual duty to perform the technical services it was obligated to perform, in a reasonably skillful or workmanlike manner. Cincinnati Gas & Electric Co. v. General Electric Co., 656 F.Supp. 49, 61 (S.D.Ohio 1986). 5.The nickel plating bath services by Bill Young & Company was within the range of acceptable plating solutions in the industry. The failure of Bill Young & Company to recommend a change in the plating solution does not, as a matter of law, constitute a failure to perform technical services in a reasonably skillful or workmanlike manner. Cincinnati Gas & Electric Co. v. General Electric Co., Id. at 61. 6. Bill Young & Company did not guarantee its infallibility, nor the infallibility of its sales representative. Bill Young & Company had a duty to provide acceptable technical services. The technical services provided were performed in a reasonably skillful or workmanlike manner, and therefore Bill Young & Company did not breach any duty to DEI. Barton v. Ellis, 34 Ohio App.3d 251, 252, 518 N.E.2d 18 (Franklin Co.1986). Even if we were to find that DEI stated a cause of action in negligence, Bill Young & Company performed its service to sell chemicals and limited technical services in a reasonably skillful or workmanlike manner. Invacare Corp. v. Sperry Corp., 612 F.Supp 448 (N.D.Ohio 1984). 7. The Trustee is entitled to judgment in his favor on DEFs counterclaim. DEI is not entitled to setoff, having proved no claim against Bill Young & Company. 8. The Trustee is entitled to judgment in his favor on his turnover complaint. The trustee should submit a judgment entry within 10 days of the date of this opinion setting forth a judgment plus interest calculated as specified herein. 9. As of November 20, 1987, DEI owed Bill Young & Company the sum of $96,-665.18, which sum reflects past due invoices for goods and materials delivered to DEI by Bill Young & Company. DEI also owes the sum of $9,624.94 in interest-only invoices. DEI does have a credit, however, of $4,159.26. Thus, the total amount owed to Bill Young & Company (absent interest from November 20, 1987) is $102,130.86. 10. Bill Young & Company may charge interest of 18% on $96,665.18 from November 20, 1987 as specified by the contract on *109the bottom of the invoice. See, Ohio Rev. Code Ann. § 1343.03(A). Because we have decided this ease in the Trustee’s favor against Dayton Electroplate, Inc. on its counterclaim, we do not reach the issue of the timeliness of Dayton Electroplate’s proof of claim. We also do not reach the issue of Bill Young & Company’s disclaimer at the bottom of its invoice or DEI’s damages because we found that Bill Young & Company performed its contract to sell chemicals and limited technical assistance in a reasonably skillful manner. A motion for sanctions is also pending before the Court. The Court held this “discovery dispute” in abeyance pending trial (Doc. 25). The motion is DENIED. Each side is to bear its own costs. IT IS SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491135/	FINDINGS OF FACT L. CHANDLER WATSON, Jr., Bankruptcy Judge. At Anniston, Alabama, on April 19 and 20, 1990, there was tried before the Court 326that aspect of the above-styled adversary proceeding whereby the Court is requested to determine to whom the plaintiff should make the payments on its promissory notes to Karen Rush for $1,050,000, secured by a purchase-money mortgage on its real property, as between Karen Rush and Rush Building Company, Inc. Upon a due consideration of said issue and of the stipulations of the defendants, of the evidence presented, and of the facts admitted, the Court finds the facts as here stated. 1. Charles Edward Rush (hereafter Edward Rush) and Karen Rush were married to each other in 1974. [R.B.C. Stip.] 2. In 1981 Karen Rush executed and delivered to Edward Rush a broad power of attorney, of unlimited duration and including authority to sign her name by use of a “facsimle.” [sic] [R.B.C. Ex. 11] 3. Included in the power of attorney was the following provision: “[i]f at any time there should become a conflict between our two interests concerning financial or legal matters then his interest will come first and mine second.” 4. She also provided him with a rubber stamp by which a facsimile of her signature could be affixed in ink to a paper or document. [R.B.C. Ex. 4] 5. On December 30, 1986, Karen Rush was the owner of record of a fee-simple title to a large tract of partially improved real property which lies along the easterly side of U.S. Highway 431, about one mile south of its descent from Sand Mountain into Guntersville, Alabama. [K.R. Ex. 57] 6. At that time she sold and conveyed her title to the property to the debtor, for the sum of $1,100,000.00, and the debtor executed and delivered promissory notes and a mortgage of the property to evidence and secure the unpaid balance of $1,050,-000.00 of the purchase price. [R.B.C. Exs. 17 and 18] 7. The sale of the property to the debt- or was arranged by Edward Rush and was the culmination of negotiations begun by him some four months earlier. 8. On March 18, 1987, Karen Rush separated from Edward Rush under his threats of violence to her, and they have been estranged from then to now. 9. About two weeks after her separation, Karen Rush consulted with Chris and Nell Rush as to the possibility for her living with them so that she could resume her employment at Huntsville, Alabama, but this arrangement was not made because of their unwillingness to agree to her insistance that Edward Rush be barred from their home. 10. On or about March 24, 1987, Edward Rush had an attorney prepare an assignment of the debtor’s note [sic] and mortgage and the indebtedness secured, from Karen Rush to Rush Building Co., Inc., (hereafter the corporation) [K.R. Ex. 56] 11. Edward Rush affixed a facsimile of Karen Rush’s signature on the assignment and dated it December 31st, 1986, but no reference was made in it to its having been executed by an agent. [R.B.C. Ex. 20] 12. In a generally similar fashion, Edward Rush at that time undertook to execute for Karen Rush four or more deeds to effect a transfer of all real estate of record in the name of Karen Rush to Shamrock Farm & Land Corporation, partially owned by Nell Rush, except for one tract. 13. Nell N. Rush, mother of Edward Rush and wife of Chris Rush, record owner of most of the capital stock of the corporation and corporate secretary, and a notary public, purported to take the acknowledgement of Karen Rush’s execution of the assignment. [R.B.C. Ex. 20] 14. On or about April 1, 1987, Kristine Rush, the daughter of Karen and Edward Rush, visited with her mother in Birmingham, Alabama, and at the request of her father asked her mother to sign an assignment to the corporation of the mortgage in question, but Karen Rush refused, and Kristine Rush relayed this information to her father, at an unspecified time. 15. On May 28, 1987, a general power of attorney from Karen B. Rush to Ralph Smith, Jr. was recorded in the office of the 327Judge of Probate of Marshall County, Alabama, and was accompanied by an instrument revoking all powers of attorney granted prior to April 10, 1987. [K.R. Ex. 10] 16. In July, 1988, while a jail prisoner at Orlando, Florida, on criminal charges brought at the complaint of Karen Rush, Edward Rush affixed her facsimile signature to another purported assignment to the corporation of the debtor’s note [sic] and mortgage, the indebtedness secured and the mortgaged property, which “assignment” was dated July 6, 1988, and filed for record in the office of the Probate Judge of Marshall County, Alabama; however, this instrument recited that it was done in her name, by him as her attorney-in-fact. [K.R. Ex. 13]. 17. The debtor has paid to the corporation about $57,000 in payments on the mortgage note, but the down payment of $50,000 was by a check which Karen Rush deposited in her bank account. 18. Karen Rush does not have possession of the mortgage note and has never demanded that it be given to her. 19. The debtor’s property was originally purchased in 1974, in the names of Edward and Karen Rush, who, on September 14, 1976, conveyed all but one acre to Chris and Nell Rush (his parents), and they shortly thereafter conveyed it to the corporation, which on February 26, 1986, conveyed it to Karen Rush. The other acre of the property was deeded by Edward and Karen Rush to his brother, Wendell, and the latter’s wife, and later was deeded by Wendell and his wife to Karen Rush. [K.R. Exs. 1, 2, 3, 4, and 5] 20. The purchase price of the property was $175,000. A note, secured by a mortgage on the property, was given for an unpaid balance of $150,000, which was payable in 20 annual installments of $7,500, plus interest which accrues at of the unpaid portion per annum. 21. Edward Rush paid the 1975 installment on the mortgage note, Chris Rush paid the 1976 installment, Nell Rush paid the 1977 and 1988 installments, the corporation paid the 1978, 1979, 1980, 1981, 1982, 1983, 1984, 1985, and 1987 installments, and the 1986 installment was paid by a check drawn on Karen Rush’s bank account. [R.B.C Ex. 13] 22. During the ownership of the property by Edward and Karen Rush, a building having 13,800 square feet of space was constructed on it by him, with his investment in the property being about $200,000; and later the corporation made improvements to the property at an estimated cost of $75,000 to $100,000. 23. In 1974, Chris Rush was contracting to do commercial building work as “Rush Building Co.” and formed the corporation which is a party defendant herein, but his business and that of the corporation were not maintained as strictly distinct. 24. During the same period Edward Rush was engaged in the same type of business under the trade name of “Rush Contracting and Development Co.” 25. At about this time Chris Rush obtained a general contract to build a hospital at Jacksonville, Alabama, and assigned the contract to Edward Rush. 26. Due to severe financial reverses suffered by Edward Rush while engaging in the business of coal strip-mining, he was unable to complete the hospital project without substantial financial advances or other assistance from Chris Rush and the corporation, and found himself substantially in debt to them and others, as well as locked in a dispute with the project bonding company, and it was to satisfy his obligations to Chris Rush and the corporation that the subject property was conveyed to Chris and Nell Rush, to the exclusion of his other creditors. 27. Originally, Nell Rush owned 30% of the capital stock of the corporation, and in 1980 Chris Rush conveyed to her all of his stock in the corporation, being 64%. 28. Throughout the corporation’s existence, Edward Rush and his brother have, each, owned three percent of its capital stock, except, possibly, part of the time when Karen Rush may have held the three percent of Edward Rush. Chris Rush was 328president of the corporation for a number of years, and Edward Rush, for most, if not all, of the corporation's existence, served as an officer or agent of the corporation, being its president at the time of trial. 29. After Edward Rush’s financial difficulties arose, he kept his creditors at bay by not maintaining any banking account or acquiring any property in his own name and instead used Karen Rush’s bank account and used her to receive for him title to property -and to receive payments, regularly utilizing her facsimile signature stamp to draw checks on her bank account. 30. In order to enable Edward Rush to obtain needed loans, Nell Rush agreed for Karen Rush to show on financial statements submitted by her to prospective lenders the 64% of the corporate stock transferred to Nell Rush by Chris Rush. During this period, the corporate tax returns and other corporate papers showed that Karen Rush was the owner of 64% of the corporate stock. 31. Karen Rush states that the conveyance of the subject property to her by the corporation was in exchange for “her” 64% of the corporate stock; however, Chris Rush, who signed the deed as corporate president, says that she owned no such stock and that he agreed to the conveyance in order to dampen Karen Rush’s threat to reveal to Nell Rush a substantial extramarital affair carried on by Chris Rush; but the true motivation for the conveyance to her more likely was to further some deception deemed advantageous to the business interests of Edward or Chris Rush or the corporation or all of them. 32. During the ten years prior to her estrangement from Edward Rush, Karen Rush was employed by and performed work, from time to time, for Chris Rush, the corporation, or an unrelated party at Huntsville. 33. During this period of time or after-wards, the business activities of Edward and Chris Rush and the corporation involved false or mock notarial certificates on conveyances of land and other documents by Nell Rush and the. execution by Edward and Chris Rush of sworn statements, certificates, or other documents, without regard to their truthfulness always tailoring the same to what appeared at the moment to be to the best interests of one or more members of this communal unit or of the community itself, with Karen Rush participating in the related transactions or schemes, as called upon by Edward Rush, until her estrangement from him — she having characterized her role as being that of a “pawn.” The evidence does not establish whether, according to the testimony of Karen Rush and her minor son, on the night that Karen Rush left Edward Rush, that she told Nell Rush to get the facsimile signature stamp from her husband and to destroy it, or whether, according to the testimony of Nell Rush and others, Karen stated to Nell Rush that Edward had her power of attorney and signature stamp, that Nell was a notary public, and that they could do whatever they wanted to do with the property, as all she wanted was to leave. Entered at Anniston, Alabama, on this 27th day of April, 1990. CONCLUSIONS BY THE COURT ON PAYEE FOR PROMISSORY NOTES SECURED BY DEBTOR’S REAL ESTATE This case is pending before the Court under chapter 11, title 11, United States Code. One aspect of the above-styled adversary proceeding in said case is the plaintiff’s (debtor’s) request that the Court determine whether it is indebted to Rush Building Company, Inc. (R.B.C.) upon its proof of claim for $1,267,539.58, or to Karen B. Rush (K. Rush) upon her proof of claim for a like amount. On April 27, 1990, following an evidentia-ry trial, the Court entered detailed findings of fact upon this question, and only limited reference to the factual issues will be made here. These claims are competing and mutually-exclusive claims and actually are one claim to a debt for the unpaid balance of the purchase price of the debtor’s large 329tract of commercial real property adjoining U.S. Highway 431 near the south boundary of the City of Guntersville, Alabama. The debt is evidenced by the debtor’s promissory notes made payable to K. Rush and secured by the debtor’s mortgage to her on said real property, recorded in Mortgage Record Book 819, beginning on page 124, in the office of the Probate Judge of Marshall County, Alabama. On September 21, 1989, this Court entered an order in this case, which determined the value of this property to be $950,000 and allowed this claim as secured to that extent and as unsecured for the excess of that amount. The order recognized that there were two proofs of the one claim and “left to the further findings and determination by this Court” the question of whether the claim was owned by R.B.C. or K. Rush. At the trial of this adversary proceeding, R.B.C. and K. Rush reiterated that neither was questioning the right, title, or interest of the debtor in or to the real property, despite some questions which otherwise might be raised as to the formalities of the conveyance of this real property from K. Rush to the debtor. In view of the two purported assignments of the mortgage debt by K. Rush to R.B.C., the latter is the record owner of the bankruptcy claim. K. Rush, however, repudiates these assignments and attacks their effectiveness on a number of grounds. She asserts that the March, 1987, assignment is invalid for want of any disclosure or indication on its face that it was not executed by K. Rush personally but by or through her agent, Charles Edward Rush, with her signature facsimile having been stamped upon it by him. At that time he was her estranged husband and owned three percent of the capital stock of R.B.C., with three percent owned by his brother and the remaining 94% owned by his mother (even, if in name only). Charles Edward Rush held a 1981 broad power of attorney from K. Rush, which included authority to sign her name by imprinting a facsimile of her signature with a rubber stamp. It contained a provision that “[i]f at any time there should become a conflict between our two interests concerning financial or legal matters then his interest will come first and mine second.” In support of K. Rush’s motion for summary judgment, which was denied, her counsel cited the opinion in Gillespy v. Hollingsworth, 169 Ala. 602, 53 So. 987 (1910) (reh’g denied); offering it in support of their theory that the purported March, 1988, assignment from K. Rush to R.B.C. was ineffective because signed only with the facsimile “Karen B. Rush,” rather than including “by Charles Edward Rush as her attorney in fact.” The Alabama Supreme Court, however, upheld a deed there which was signed only in the name of the grantor’s agent, followed by words descriptive of the agency. The decision may add some very slight weight to her position if any heed is given to the thought that the case indicates that at least some reference to the agency was made there and that without it (as is the case here) the deed would have been held defective. Any real support for K. Rush’s contention comes from Mr. Justice Simpson’s statement that such a “deed” would have been found defective at common law but that a court of equity will cure the defect and “not permit the parties to be disappointed and their just rights defeated merely ... from inadvertence or ... ignorance.” 53 So. 987, 988. This more subtle but much more helpful proposition is that without the help of the equity court the grantee would have lost the property to the principal’s heir. The execution of the instrument in Gil-lespy was distinctly different from the case here. There, the agent signed the agent’s name, followed by words which described him as the property owner’s agent, but, here, the assignment is signed with the payee’s name, impressed upon the instrument by the facsimile stamp, without the agent’s name or any reference to the agency- The point is that, if K. Rush can get this Court to adopt the proposition that the type of execution of the document here, also, is defective and legally insufficient, R.B.C. 330must rely upon equitable principals to establish its ownership of the debt and, if barred by unclean hands from receiving grace for its legally-insufficient assignment, R.B.C. will be decreed to have no recognizable claim to the debt. See Carter v. Carter, 282 Ala. 289, 210 So.2d 800 (1968); Owens v. Owens, 281 Ala. 239, 201 So.2d 396 (1967) (reh’g. denied). It is apparent that some distinction between the execution of conveyances of an interest in real property and the execution of other types of instruments has been asserted when consideration has been given to the form which the execution took when the execution was by an agent for a principal. In the article on “agency” in American Jurisprudence 2d., there are two sections headed “Signing principal’s name only,” 1 with the first (§ 191) dealing with contracts and the second (§ 195) dealing with deeds. As to contracts, it is stated that the “well-settled general rule is that the mere fact that the agent’s name does not appear ... alone does not render the execution insufficient.” The text, in § 195, is to somewhat the same effect as regards the execution of deeds, if on the face of the deed the principal and the agent are identified. If, however, as here, only the principal’s name is signed to the deed, the text states that there is authority to the contrary, citing Wood v. Goodrich, 6 Cush 117 (Mass.1850). See Gillespy v. Hollingsworth, 169 Ala. 602, 53 So. 987 (1910) (reh’g denied). In a later case, however, the Massachusetts court did not apply the Wood doctrine to a contract for the sale of personal property. Hunter v. Giddings, 97 Mass. 41 (1867). That court, in referring to Wood, said that, without considering the precise accuracy of all the observations found in that opinion, upon a point which was not necessary to its decision, the Court did not think it applicable to the contract of sale.2 In Kiekhoefer v. United States National Bank, 2 Cal.2d 98, 39 P.2d 807 (1934) (in banc), the court rejected a check payee’s contention that her endorsement on the check was a “forgery” simply because her authorized agent only signed her name. Besides refusing to apply the Wood doctrine to the endorsement of the check, the court stated that the Wood ruling had been criticized by the Supreme Court of Maine in Forsyth v. Day, 41 Me. 382, 391 (1856) and had been rejected by Prof. Williston in his work on Contracts, volume 1, page 564. The California court further wrote that the prevailing rule as to negotiable instruments had been correctly cited in Flat Top National Bank v. Parsons, 90 W.Va. 51, 110 S.E. 491 (1922), which found that under negotiable instrument statutes there was no necessity that the name of an agent must appear upon a note signed for his or her principal. Despite the skepticism shown for the soundness of the views expressed in the Wood case, the Alabama Supreme Court, in Gillespy, indicated that a strict formality was applied at common law to a deed executed for a land owner by an agent and that defective deeds were saved only by the intervention of courts of equity. It is, therefore, appropriate to turn to the question of what kind of document is involved in the present case. The March, 1987, instrument purports to assign to R.B.C. the mortgage from the debtor to K. Rush and “the note and indebtedness that it secures, together with all of the lands in said mortgage described.” Under the mortgage, K. Rush held a defeasible legal title to the real property which interest could be defeated by satisfaction of the promissory notes given by the debtor. Obviously, the part of the assignment which purports to convey this interest in real property, to be effective, would have to meet the requirements for a deed — such as the requirement for a witness, as provided by Ala.Code § 35-4-20 (1975), or an acknowledgment before a notary public, as provided by Ala.Code § 35-4-23 (1975). Ala.Code § 35-4-25 331(1975) validates an acknowledgment of a conveyance to or by a corporation taken by a notary public who is not an officer of and owns not more than 1% of the capital stock of the corporation, but here the acknowledgment purported to be of K. Rush’s execution of the assignment before Nell Rush, notary public, who “held” 94% of the capital stock of R.B.C. The inference to be drawn from the statute is that the acknowledgment is ineffective. This leaves the question of whether the assignment can be said to have been witnessed by Nell Rush, by virtue of her having signed it as notary public. Due to the questions which may arise from her being the assignee’s principal stockholder and the manner in which the instrument was executed, the writer turns aside from this aspect and considers the other aspects of the purported assignment. The words purporting to assign to R.B.C. the debtor’s mortgage to K. Rush appear to be about the same as the effort to convey her interest in the land, but the March, 1987, instrument also purports to assign to R.B.C. “the note [sic] and indebtedness” which the mortgage secured. This aspect of the instrument is not an attempted “alienation of lands” governed by Ala. Code § 35-4-20 (1975). It is a purported assignment of the promissory notes and the debt evidenced thereby. An assignment of the debt and of the promissory notes does not appear to be a matter regulated by Alabama statute, but the Alabama Uniform Commercial Code — Commercial Paper § 7-3-202(2) states that “[a]n indorsement must be written by or on behalf of the holder and on the instrument or on a paper so firmly affixed thereto as to become a part thereof.” The first part of that statute provides among other things, that “[i]f the instrument is payable to order it is negotiated by delivery with any necessary indorsement....” In the present case, there is no evidence of endorsement of the notes, but there is no reason to impose upon a separate assignment of the debt and notes any greater degree of formality of execution than the statute imposes upon an endorsement of the notes. In that article of the Alabama Commercial Code, Part 4 is titled “Liability of Parties,” and § 7-3-401(2) thereunder provides that “[a] signature is made by use of any name, including any trade or assumed name, upon an instrument, or by any word or mark used in lieu of a written signature.” Also in Part 4 is § 7-3-403(1) which provides that “[a] signature may be made by an agent or other representative, and his authority to make it may be established as in other cases of representation.” Under these statutes, had a duly-authorized agent stamped her signature on these promissory notes, followed or preceded by delivery of the notes to R.B.C., there would have been an effective endorsement and negotiation in favor of R.B.C. See Oquendo v. Federal Reserve Bank of New York, 98 F.2d 708 (2d Cir.1938); Kiekhoefer v. United States National Bank, 2 Cal.2d 98, 39 P.2d 807 (1934) (in banc); Flat Top National Bank v. Parsons, 90 W.Va. 51, 110 S.E. 491 (1922). In addition to the provision previously mentioned, § 7-3-202(1) includes the following: “[njegotiation is the transfer of an instrument in such form that the transferee becomes a holder.” If the stamping of K. Rush’s signature on the notes by a duly-authorized agent, followed or preceded by delivery to R.B.C., would constitute R.B.C. as the “holder” of the notes, there does not appear to be any sufficient reason why a similar application of her signature to an assignment of the debt and notes would not be legally sufficient. That being so or not, counsel for K. Rush argue that her estranged husband could not exercise the power given him under her power of attorney so as to effect a transfer or assignment for which she received no present consideration or, put differently, was contrary to her best interests or which benefited him, at her expense. It is an obvious proposition that an agent who is authorized to act for a principal, under an ordinary power of attorney, owes a fiduciary duty to the principal not to exercise the power against the princi332pal’s interests and for those of the agent. Miller v. Louisville & N. R.R., 83 Ala. 274, 4 So. 842 (1887). Further, it is held in Alabama that a power of attorney does not authorize a conveyance of the principal’s real estate to an agent, unless there is an express authorization of both (1) conveyances of real estate and (2) conveyances to the agent. Hall v. Cosby, 288 Ala. 191, 258 So.2d 897 (1972); Dillard v. Gill, 231 Ala. 662, 166 So. 430 (1936). The distinction between these cases and the question of the assignment of the debt and notes — that the cases involved conveyances of real property — does not appear significant on the principles of agency involved.3 There are at least two other distinctions — of greater significance. In those cases, the property was conveyed to the principal’s agent, but here the assignment was to R.B.C. The corporation was, however, owned by the agent to the extent of three percent of the stock, by his brother to the same extent, and by his mother to the extent of 94% of the stock. On the other hand, R.B.C. was the source of K. Rush's title to the real property whose sale produced the purchase-money debt and notes assigned. Also, in those cases there was no indication in the powers of attorney that the parties contemplated an exercise of the power for the benefit of the agent and to the detriment of the principal or that such an exercise of the power was condoned. Here, the power of attorney from K. Rush provides that “[i]f at any time there should become a conflict between our two interests concerning financial or legal matters then his interest will come first and mine second.” It appears that this is exactly what occurred. K. Rush left her husband after he had threatened her with physical harm, and about a week later he executed on her behalf the assignment to R.B.C. of the debt and notes owed by the debtor. Her husband had some lingering doubt as to the legal sufficiency of the assignment and undertook to obtain from K. Rush an assignment physically executed by her but was unsuccessful and later, from his jail cell, issued a second assignment which showed that he was acting as her agent and which bore a certificate by a different notary public. His doubt as to the legal sufficiency of the March, 1988, assignment did not prevent its being filed for record and is immaterial. In the Hall and Dillard opinions, the Alabama Supreme Court observed that, had the wife in the case intended that her husband have her property, she could have given him her conveyance or deed instead of the power of attorney. But here, the power of attorney was given by K. Rush to her husband years before the assignment of the mortgage and had been utilized down to that time to cloak various business activities of his with K. Rush’s identity. In the present case, the most likely explanation for the conveyance of the real estate by R.B.C. to K. Rush and its sale in her name, with the resulting notes being made payable to her, is that it furthered some scheme by K. Rush and her husband and his parents and brother to disguise the true ownership of, first, the property and, later, the promissory notes for $1,050,000. When K. Rush became estranged from her husband, the scheme put at peril the interests of the other Rushes in this significant debt, bringing into play the efforts to undo the concealment of this asset. There appears little need to discuss at length the second purported assignment, for prior to its execution K. Rush had issued to legal counsel then retained by her a new power of attorney, which expressly revoked the 1981 power of attorney to her husband, and it had been filed for public record. If notice to her agent-husband of the revocation was necessary to the effectiveness of the termination of his authority, such notice was probably supplied by inferences to be drawn from his incarceration at her behest. Further, there appears little need to discuss the “equitable” powers which this Court is said to possess under the much cited and discussed section 105(a) of title 33311, United States Code. No exercise of an equitable power is necessary to sustain the ownership of R.B.C. of the debt and notes, under the March, 1988, assignment. To hold that their estrangement, commencing about a week before the execution of the assignment, revoked the power of attorney from K. Rush to her husband appears to require the application of some equitable doctrine of implied revocation. K. Rush, though, perhaps as she said, a “pawn,” was a knowing participant with the other Rushes in these and similar devious transactions and may not now obtain some form of extraordinary relief from this Court. Where unclean hands have clasped and then become unjoined, the Court will leave what they now grasp as the Court finds it. Under such circumstances, the conscience of the Court is not pricked by a cry of “unjust enrichment” by either party. See Carter v. Carter, 282 Ala. 239, 210 So.2d 800, at 282 (1968). Besides, it would be an act of questionable precision for the Court to undertake a straightening out of this lengthy skein tied to events running back 15 to 20 years. In at least two instances, the Alabama Legislature has expressed its policy as to the effect of the transfer of debt secured by real property. Alabama Code § 8-5-24 (1975) (Effect of transfer of bill, note, etc., given for purchase money of lands.) states: The transfer of a bond, bill or note given for the purchase of lands, whether the transfer be by delivery merely or in writing, expressed to be with or without recourse on the transferor, passes to the transferee the lien of the vendor of the lands. Alabama Code § 35-10-1 (1975) (Power of sale constitutes part of security; by whom executed; effect of conveyance; index of foreclosure deeds.) provides: Where a power to sell lands is given to the grantee in any mortgage, or other conveyance intended to secure the payment of money, the power is part of the security, and may be executed by any person, or the personal representative of any person who, by assignment or otherwise, becomes entitled to the money thus secured; and a conveyance of the lands sold under such power of sale to the purchaser at the sale, executed by the mortgagee, any assignee or other person entitled to the money thus secured, his agent or attorney, or the auctioneer making the sale, vests the legal title thereto in such purchaser. Probate judges shall index foreclosure deeds by the names of the original grantor and grantee in the mortgage, and also by the names of the grantor and grantee in the foreclosure deeds. Under these two statutes, R.B.C., being the assignee of the debt and notes which are secured by the debtor’s tract of land, possesses the purchase-money lien on the land and holds the power of sale under the mortgage — sufficient to effect a foreclosure sale in the event of the debtor’s default. The Court must decree that R.B.C. holds and owns the lien on the debt- or’s land, securing this debt, as evidenced by the mortgage notes. One aspect of the debtor’s complaint must be taken as an alternate objection to these two bankruptcy case claims, and it must be overruled as to the claim of R.B.C. and sustained as to K. Rush. In accordance with the primary disclaimer of R.B.C. and of K. Rush, it must be ordered that R.B.C. has no other or different claim to the debtor’s land and that K. Rush has none at all and may not further assert any. A final order conforming hereto will be entered. . 3 Am.Jur.2d. §§ 191 and 195 (1961). . See Annotation, Sufficiency of execution of instrument by agent or attorney in fact in name of principal without his own name appearing, 96 A.L.R. 1251, 1255 (1935). . The Dillard case involved transfers of personalty, as well as conveyances of real property.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491136/	ORDER ON MOTION TO AMEND PROOF OF CLAIM LEWIS M. KILLIAN, Jr., Bankruptcy Judge. Connecticut General Life Insurance Company, a creditor in this Chapter 11 case filed a motion for leave to file an amended proof of claim to which the debtor-in-possession, Synergetics, Inc. has objected. Having considered the arguments of counsel together with the memorandum of law filed in support of the debtor’s objection, and for the reasons set forth below the motion for leave to file an amended proof of claim will be denied. On November 21, 1988, this Court entered an order setting a bar date for filing of proofs of claim for January 20, 1989. Connecticut General filed its original proof of claim in the amount of $24,720.00 on January 20, 1989. Subsequently thereto, we entered an order setting an amended bar date for the filing of proofs of claim for October 1, 1989. The basis for the original proof of claim filed by Connecticut General was a civil action brought by George Blewitt and Anne Blewitt, former employees of the debtor against Connecticut General and Synergetics, Inc. for failure to reimburse medical expenses incurred by the Blewitts. The Blewitt’s cause of action arose out of a claim for group health insurance benefits under a policy issued by Connecticut General to Synergetics. Syn-ergetics had failed to forward premium payments for the coverage to Connecticut General and accordingly Connecticut General denied coverage to the Blewitts for medical expenses incurred. Due to the failure of Synergetics to forward the premium payments to Connecticut General, coverage under the policy was cancelled on January *36214, 1987. Connecticut General settled the lawsuit by the Blewitts on May 12, 1988 and through its proof of claim is seeking indemnity from Synergetics for the amounts it paid to the Blewitts. In the amendment which Connecticut General seeks to make to its original proof of claim, Connecticut General adds additional sums which it paid out in a settlement of a similar action to Gary Sinkus and Lisa Davis a/k/a Lisa Sinkus. The Sinkus litigation arose out of a similar factual circumstance as did the Blewitt litigation with the Sinkus’ having filed their lawsuit against Connecticut General on August 1, 1988. The Sinkus action was settled for the sum of $22,716.16 on December 19, 1989. By the amendment to its proof of claim, Connecticut General seeks indemnity from Synergetics for payment of the claim to the Sinkus’ in addition to the claim of the Blewitts. In its objection, the debtor asserts that even though the Sinkus litigation was filed well before the bar date for filing claims in this case, it failed to file any claim based on the Sinkus litigation notwithstanding the fact it was fully aware of its possible exposure in view of its settlement with the Blewitts. Thus, even though the Sinkus litigation had not actually been settled before the second bar date, thus liquidating Connecticut General’s damages, it was still aware of the claim and had an obligation to file it. Even if it felt it could not actually file the proof of claim based on the Sinkus litigation, Connecticut General was aware of the possibility of liability and could have filed a motion prior to the bar date for an extension of time to file a proof of claim relating to the Sinkus claim when liability and amount was determined. The circumstances under which an amended proof of claim may be filed are set out by the 11th Circuit in In re International Horizons, Inc., 751 F.2d 1213 (11th Cir.1985). There the 11th Circuit stated the following guideline as to when an amended claim would be allowed: Thus in a bankruptcy case, amendment to a claim is freely allowed where the purpose is to cure a defect in a claim as originally filed, to describe the claim with a greater particularity or to plead a new theory of recovery on the facts set forth in the original claim. See, Szatkowski v. Meade Tool & Die Co., 164 F.2d 228, 230 (6th Cir.1947); In re G.L. Miller & Co., 45 F.2d 115 (2nd Cir.1930). Still the court must subject post bar date amendments to careful scrutiny to assure that there was no attempt to file a new claim under the guise of amendment. In the Matter of Commonwealth Corp., 617 F.2d 415, 420 (5th Cir.1980). See, Wheeling Valley Coal Corp. v. Mead, 171 F.2d 916, 920 (4th Cir.1949). Id. at 1216 to 1217. Here, while the original claim of Connecticut General and its amendment arise under very similar factual circumstances, they are in fact two separate and unrelated claims and accordingly the amendment of the proof of claim to add damages incurred as a result of the Sinkus action is not proper under the guidelines set forth in International Horizons. Accordingly, it is hereby ORDERED AND ADJUDGED that the motion of Connecticut General Life Insurance Company for leave to file an amended proof of claim be and same is hereby denied. DONE AND ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491138/	MEMORANDUM OF OPINION ON DISCHARGEABILITY OF EMPLOYMENT TAXES JOHN C. AKARD, Bankruptcy Judge. Richard A. Pierce (Debtor) seeks to discharge employment taxes owed to the State of Texas for the benefit of the Texas Employment Commission (Commission). The decision involves the interplay of §§ 507(a)(3) and 507(a)(7)(D) of the Bankruptcy Code.1 The court determines that the taxes are discharged. FACTS The Debtor operated a business known as Regal Building Systems. He filed for relief under Chapter 7 of the Bankruptcy Code on September 13, 1988, and has received his discharge. When he filed his bankruptcy petition, the Debtor owed employment taxes of $5,319.48 arising from wages earned by individuals from the Debt- or more than 90 days before the filing of the bankruptcy petition and more than 90 days before the date of cessation of the Debtor’s business. The returns on these taxes were all due within three years before the Debtor filed bankruptcy. STATUTES Section 523 Exceptions to Discharge Section 523(a) provides that a discharge under § 727 does not discharge an individual debtor from any debt: (1) for a tax or a customs duty— A. of the kind and for the period specified in section 507(a)(2) or 507(a)(7) of this title, whether or not a claim for such tax was filed or allowed. ... 507 Priorities Section 507 states the priorities for distribution in a bankruptcy case. The pertinent portions of § 507(a)(7) read as follows: (7) Seventh, allowed unsecured claims of governmental units, only to the extent that such claims are for— [[Image here]] (D) an employment tax on a wage, salary or commission of the kind specified in paragraph (3) of this subsection earned from the debtor before the date of the filing of the petition, whether or not actually paid before such date, for which a return is last due, under applicable law or under any extension, after 525three years before the date of the filing of the petition.... Section 507(a)(3) reads as follows: (3) Third, allowed unsecured claims for wages, salaries, or commissions, including vacation, severance, and sick leave pay— (A) earned by an individual within 90 days before the date of the filing of the petition or the date of the cessation of the debtor’s business, whichever occurs first; but only (B) to the extent of $2,000 for each such individual.2 Positions of the Parties The Debtor asserted that the reference in § 507(a)(7)(D) to paragraph (3) means that the non-dischargeable taxes are only those with respect to wages earned within the appropriate 90 day period. The Commission asserted that the reference to paragraph (3) is simply descriptive of the type of wage, salary or commission and that non-dischargeability extends to all such taxes upon which a return was due within three years prior to the filing of the petition. In effect, the Commission’s position is that the reference to paragraph (3) would serve only to add “including vacation, severance, and sick leave pay” to the definition of “wage, salary or commission” while the Debtor’s position is that all of the limitations in paragraph (3) including (3)(A) and (B) are applicable.3 This appears to be a case of first impression because neither party has cited an applicable case nor has the court been able to find one. DISCUSSION The reason for the reference to paragraph (3) in § 507(a)(7)(D) is not readily apparent, nor does the legislative history offer any help. The Debtor asserted that the purpose of that language is to limit the non-dischargeable employment taxes to those wages which are entitled to priority. If the court adopts such a reading, however, what is the need for the phrase “for which a return is last due ... after three years before the date of the filing of the petition?” The Debtor asserted that this language would apply where priority wages are due for a business terminated by the Debtor up to three years before the date the petition is filed. Phrases similar to “for which a return is last due ... after three years before the date of the filing of the petition” appear in § 507(a)(7)(A)(i) with respect to income taxes and in § 507(a)(7)(E)(i) with respect to excise taxes. A one year limitation with respect to property taxes is contained in § 507(a)(7)(B) and there is no limit on taxes collected or withheld under § 507(a)(7)(C). There is a one year limit on customs duties in (F). The statement by Representative Edwards and Senator DeConcini in the Congressional record concerning the Bankruptcy Reform Act of 1978 support the three year limitation: The employer’s share of the employment taxes on wages earned before the bankruptcy petition will receive sixth priority to the extent the return for those taxes was last due (including extensions of time) within 3 years before the filing of the petition, or was due after the petition was filed. Older tax claims of this nature will be payable as general claims. In the case of wages earned by employees before the petition, but actually paid by the trustee (as claims against the 526estate) after the title 11 case commenced, the employer’s share of the employment taxes on third priority wages will be payable as sixth priority claims and the employer’s taxes on prepetition wages which are treated only as general claims will be payable only as general claims. In calculating the amounts payable as general wage claims, the trustee must pay the employer’s share of employment taxes on such wages ... in the case of employment taxes relating to wages earned and paid after the petition both the employees’ share and the employer’s share will receive first priority as administrative expenses of the estate. 125 Cong. Rec. H 11112-13 (Daily Ed. September 28, 1978); S 17429-30 (Daily Ed. October 6, 1978); as reprinted in Bankruptcy Code, Norton Bankruptcy Law and Practice at 331, (1989-1990 Ed.) See also § Collier on Bankruptcy, 507.04 (15th ed. (1989)). The legislators’ statements indicate an intent to include as non-dischargeable the employer's share of employment taxes on wages earned within the last three years, but the plain reading of the statute does not yield this result. Section 507(a)(7) contemplates that priority prepetition wages will be paid either prepetition or postpetition and that the employment taxes with respect to the priority wages will be paid under a seventh (formerly sixth) priority. The only exception is that if the business closed several years before the bankruptcy and the return was last due (including extensions) more than three years before the date of the filing of the petition, then those taxes lose their priority. The court holds that § 507(a)(7) does not grant a general priority for prepetition employment taxes and thus the Debtor’s obligations to the Commission are discharged. ORDER ACCORDINGLY. . The Bankruptcy Code is 11 U.S.C. § 101 etseq. References to section numbers are references to sections in the Bankruptcy Code. . Prior to the 1984 amendments § 507(a)(7) was numbered § 507(a)(6). . The Commission pointed to the administrative convenience of being able to file a claim from tax returns which have been filed (presumably with estimates where the returns have not been filed) as opposed to calculating the taxes only on priority wages which the Commission asserted would require a field audit of the Debtor’s books in every case. Administrative convenience, however, is not a canon of statutory construction and therefore was not considered by the court. The Commission also asserted that the Debtor’s construction would result in discharging large amounts of state and federal unemployment taxes which could be subsequently collected if they were declared non-dis-chargeable. Tax policy is a matter for Congressional concern and is not a concern which this court should undertake in construing a statute.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491139/	MEMORANDUM KEITH M. LUNDIN, Bankruptcy Judge. This is a dispute between the Internal Revenue Service and a material supplier to the debtor over rights in the balance due under a construction contract. Because Tennessee law does not impose a trust on construction funds and this subcontract does not include a provision for retainage, the IRS’s lien attaches to the balance due the debtor. I. In 1987, Hayes and Sons Construction Company (“Hayes”) was hired to build a service station. Hayes hired the debtor as a subcontractor. Pruitt supplied materials and labor to the debtor. Pruitt had no contractual relationship with Hayes. On March 3, 1988 the IRS filed a tax lien against the debtor. Pruitt’s services began on April 12, 1988 and were completed on May 2, 1988. On May 11, 1988, the debtor filed Chapter 7. The debtor scheduled an account receivable from Hayes for the balance of its subcontract. Pruitt, unpaid by the debt- or, recorded a notice of lien for materials and labor and commenced an action as required under TENN.CODE ANN. 66-11-101. Hayes interpleaded into state Chancery Court the balance due on its subcontract with the debtor, naming Pruitt, the IRS (and others) as respondents. That action was removed to this court. On motion for summary judgment, Pruitt conceded that the March 3, 1988 tax lien would have priority over his materialman’s lien because under 26 U.S.C. § 6323 the lien cannot predate April 12, 1988 — the day on which labor or materials were first supplied by Pruitt. However, Pruitt argues entitlement to the interpleaded funds on the theory that the debtor had no interest in those funds to which the tax lien could attach. II. Under 26 U.S.C. § 6321, the United States has a perfected tax lien on all of a taxpayer’s “property and rights to property” by filing a notice of tax lien. United States v. Durham Lumber Co., 363 U.S. 522, 80 S.Ct. 1282, 4 L.Ed.2d 1371 (1960); Aquilino v. United States, 363 U.S. 509, 80 S.Ct. 1277, 4 L.Ed.2d 1365 (1960); United Pac. Ins. Co. v. Laurel County, 805 F.2d 628 (6th Cir.1986), cert. denied, 484 U.S. 817, 108 S.Ct. 72, 98 L.Ed.2d 36 (1987); Cardinal Constr. Co. v. Besmec, Inc., 701 F.Supp. 1274 (S.D.W.Va.1988). State law determines whether a taxpayer has a property interest subject to the IRS’s lien. Id. Once a property interest is found, federal law controls lien priorities. Id. Entitlement of debtors to construction funds under state law has been addressed by the bankruptcy courts in turnover actions, receivables litigation, preference litigation, motions for setoff, and miscellaneous priority disputes. Some courts have concluded that the debtor has no interest in contract proceeds where the debt- or’s failure to pay for labor and materials would excuse payment under the contract. Tri-City Serv. District v. Pacific Marine Dredging and Constr. (In re Pacific Marine Dredging and Constr.), 79 B.R. 924, 16 BANKR.CT.DEC. (CRR) 915 (Bankr.D.Or.1987); United States v. Commonwealth of Pennsylvania, Dept. Of Highways, 349 F.Supp. 1370 (E.D.Pa.1972). Contra In re Null’s Serv., Inc., 109 B.R. 301 (Bankr.W.D.Tenn.1990). Other courts exclude construction funds from property of the estate, where state law imposes a trust on money owed to a contractor that has not paid all subcontractors and materi-almen. United States v. Durham Lumber Co., 363 U.S. 522, 80 S.Ct. 1282, 4 L.Ed.2d 1371 (North Carolina); Selby v. Ford Motor Co., 590 F.2d 642 (6th Cir.1979) (Michigan); United Parcel Serv., Inc. v. Weben *604Indus., 794 F.2d 1005 (5th Cir.1986) (Georgia); Carrier Corp. v. J.E. Schector Corp., 347 F.2d 153 (2nd Cir.), cert. denied, 382 U.S. 904, 86 S.Ct. 239, 15 L.Ed.2d 157 (1965) (New Jersey); In re Dunwell Heating & Air Conditioning Contractors Corp., 78 B.R. 667, 16 BANKR.CT.DEC. (CRR) 852 (Bankr.E.D.N.Y.1987) (New York). But see United Pacific Ins. Co. v. Laurel County, 805 F.2d. 628 (6th Cir.1986), cert. denied, 484 U.S. 817, 108 S.Ct. 72, 98 L.Ed.2d 36 (1987) (Kentucky); Georgia Pacific Corp. v. Sigma Serv. Corp., 712 F.2d 962 (5th Cir.1983) (Arkansas and Mississippi). At least one court reached the same result based on a retainage provision that authorized the contractor to withhold funds to insure a subcontractor paid all downstream expenses. Fiberglass Specialty Co., Inc. v. Bor-Son Constr., Inc., 678 F.2d 78 (8th Cir.), cert. denied, 459 U.S. 990, 103 S.Ct. 347, 74 L.Ed.2d 387 (1982). None of these theories supports Pruitt’s argument in this case. The debtor’s contract with Hayes does not condition payment as in Pacific Marine. Tennessee law does not impose a trust for the benefit of mechanic or material lienors. In re Null’s Serv., Inc., 109 B.R. 301 (Bankr.W.D.Tenn.1990); Kannon v. Blalock (In re Blalock), 15 B.R. 33 (Bankr.E.D.Tenn.1981); Noland Co. v. Edmondson (In re Cedar City Elevator & Refrigeration Co.), 14 B.R. 623 (Bankr.M.D.Tenn.1981); Sequatchie Concrete Serv., Inc. v. Cutter Laboratories, 616 S.W.2d 162 (Tenn.Ct.App.1980). The debtor’s subcontract with Hayes does not include a retainage provision. Pruitt’s reliance on Hamilton Bank v. Long, 189 Tenn. 562, 226 S.W.2d 293 (Tenn.1949) is misplaced. In Long the Supreme Court of Tennessee held that a lien creditor could not garnish a landowner for funds unpaid to a contractor where the contractor had subcontracted the entire job, the subcontractor commenced work prior to service of the writ of garnishment on the owner and the contractor had no right to payment from the owner. The decision was based on the trial court’s finding that the owner owed payment to the subcontractor, not to the contractor, thus there was nothing due the contractor to be garnished from the owner. Here it is conceded that there was no relationship between Pruitt and Hayes. The debtor had a contract right to payment from Hayes notwithstanding Pruitt’s provision of supplies or labor to the debtor. Long does not change this result. An appropriate order will be entered.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491140/	MEMORANDUM OPINION JOHN E. RYAN, Bankruptcy Judge. Plaintiff Cornwell Quality Tools (“Corn-well”) filed a complaint objecting to dis-chargeability of debts under 11 U.S.C. § 523(a)(2)(A) and (B) (the “Complaint”). The Complaint alleges that debtor, Joseph L. Rodgers (“Rodgers” or “debtor”), used a false financial statement in order to become a dealer for Cornwell. The Complaint further alleges that Rodgers committed “actual fraud” by ordering tools within a six-week period with no intention of paying. I heard this adversary proceeding on March 27, 1990 and took the matter under submission. JURISDICTION This court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. § 1334(a) (the district courts shall have original and exclusive jurisdiction of all cases under Title 11), 28 U.S.C. § 157(a) (authorizing the district courts to refer all Title 11 cases and proceedings to the bankruptcy judges for the district) and General Order No. 266, dated October 9, 1984 (referring all Title 11 eases and proceedings to the bankruptcy judges for the Central District of California). This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). STATEMENT OF FACTS Cornwell is a supplier of small hand tools which it distributes through a nationwide network of dealers. Once a dealer is approved, he can purchase tools on credit. 680In 1981, Rodgers, who had been operating as an independent tool dealer under the name Tools on Wheels, Inc., learned that his wife would inherit $100,000. The inheritance was received in March 1982. On April 6, 1982, Rodgers signed and submitted to Cornwell a document entitled “Personal and Credit Information” (the “Credit Application”). Cornwell required each applicant to submit a Credit Application. In the Credit Application, Rodgers disclosed the value of his personal assets at less than $5,000 and the inheritance. Rodgers also indicated that he had never “been through bankruptcy”. This statement was not true because Rodgers had received a discharge in bankruptcy in 1969. Rodgers further disclosed that he was a renter and not a homeowner. On April 19, 1982, Cornwell entered into a “Dealer Agreement” (the “Agreement”) with Rodgers. Under the Agreement, Rodgers could order tools on credit without limit. The terms of the Agreement, however, required payment in full within 15 days of the billing. Later, in 1984, Rodgers was allowed to defer for ten weeks payment on a maximum limit of $3,000 (the “Deferred Account”). From April, 1982 to October, 1987, Corn-well and Rodgers enjoyed a mutually beneficial business relationship. During this period, Rodgers ordered and paid for tools amounting to approximately $500,000. Beginning in 1987, however, problems arose in the relationship. Rodgers, who was experiencing financial difficulties, reduced his weekly orders from approximately $1,400 to $650. Cornwell knew Rodgers was having financial problems. According to the branch operations manager with supervisory responsibilities over the Los Angeles territory, it was necessary for a dealer to sell between $100,000 and $150,000 in order to make a “decent living”. In response, Corn-well reduced the limit on the Deferred Account from $3,000 to $2,000. Although Rodgers was not required to purchase a minimum amount of tools, Corn-well nevertheless pressed Rodgers to buy more. In fact, around August or September 1987, Rodgers was told by a Cornwell representative that he would be terminated as a dealer if he failed to increase his purchases. Up until this point, Rodgers had been current in his billings. In response to Cornwell’s threat and desiring to stockpile tools in case of termination, Rodgers increased his purchases dramatically during the ensuing six weeks. Following October 2, 1987, Rodgers purchased tools valued at $26,240.86 while making only $2,955.10 in payments. The following accounting shows the sudden change in Rodgers’ pattern of purchases during a 12-week period: Amounts Purchases Payments Due Week Ending 8-28-87 - 142.11 547.87 1,669.95 9-4-87 136.35 529.96 1,810.87 9-11-87 1,809.64 0 2,638.80 9-18-87 163.70 541.73 2,790.73 9-25-87 105.32 1,057.34 2,324.31 10-2-87 0 0 2,856.77 10-9-87 3,311.08 823.80 2,351.60 10-16-87 3,087.92 690.39 5,438.50 10-23-87 3,565.94 589.82 9,024.27 10-30-87 4,336.52 532.46 13,353.69 11-6-87 8,128.02 318.63 20,434.68 11-13-87 3,811.38 0 24,744.16 Rodgers admits that he knew he could not pay according to the terms of the Agreement when he increased his orders. For 1987, Rodgers had a net income of $1,893. Moreover, for the same period, Rodgers had no alternate source of income. When Rodgers was confronted about paying, he offered to pay $700 per week and make further purchases on a C.O.D. basis. Cornwell rejected this offer demanding payment in full or the return of all tools sent to Rodgers. On February 1, 1988, Cornwell terminated Rodgers as a dealer. Rodgers sold tools for another six months. He did not make any further payments to Cornwell on the outstanding indebtedness. DISCUSSION A. Nondischargeability Based on False Credit Application. Cornwell contends that Rodgers’ debt is nondischargeable under § 523(a)(2)(B) because the Credit Application was materially 681false and submitted by Rodgers so he could become a dealer for Cornwell. Section 523(a)(2)(B) exempts from discharge any debt: (2) [F]or money, property, services, or an extension, renewal or refinancing of credit, to the extent obtained by— (B) use of a statement in writing— (i) that is materially false; (ii) respecting the debtor’s ... financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services or credit reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive .... Pursuant to this section, Cornwell must establish that: (1) the debtor obtained money, property, services or credit, (2) by a financial statement, (3) in writing, (4) concerning the debtor’s or an insider’s financial condition, (5) that the financial statement was materially false, (6) that the debtor caused it to be made or published with intent to deceive the creditor, (7) that the creditor relied on it, (8) that such reliance was reasonable, and (9) that the loss was the proximate result of the publication of the financial statement. In re Pascucci, 90 B.R. 438, 445 (Bankr.C.D.Cal.1988); see also In re Lansford, 822 F.2d 902, 904 (9th Cir.1987). The burden here is on Cornwell to establish each of these elements. In re Taylor, 514 F.2d 1370, 1373 (9th Cir.1975). Each element must be proven by clear and convincing evidence. In re Tilbury, 74 B.R. 73, 77 (9th Cir. BAP 1987), aff'd without opinion, 851 F.2d 361 (9th Cir.1988). In order to preserve a debtor’s “fresh start”, exceptions to discharge are narrowly construed. In re Houtman, 568 F.2d 651 (9th Cir.1978). Cornwell failed to prove by clear and convincing evidence that it reasonably relied upon the Credit Application. Corn-well asserts that it relied on Rodgers’ representation that he had not been a bankrupt and if it had known that fact, it would not have made Rodgers a dealer and extended credit to him. This assertion is unconvincing. The national credit manager who testified that Cornwell relied on the Credit Application was not the credit manager of Cornwell when Rodgers became a dealer. Frankly, he had no personal knowledge of what transpired at the time. The credit manager did, however, provide some helpful information regarding the application process at Cornwell. He testified that Cornwell’s approach is to look for home ownership as a primary indicator of credit worthiness. The Credit Application clearly reflects that Rodgers did not own a home, yet despite this, Cornwell accepted Rodgers as a dealer. When this was pointed out to the credit manager, he acknowledged that the credit manager approving the Credit Application probably relied on the inheritance. Rodgers testified that he had numerous discussions with Cornwell representatives prior to his completing the Credit Application. These occurred after Rodgers knew about the inheritance. Rodgers further testified that by late 1981 or early 1982 he had already been approved as a Cornwell dealer. Once the inheritance was received, he became a dealer. The Credit Application was, therefore, only a formality. Even if the bankruptcy had been disclosed, it is unlikely that this would have prevented Rodgers from being approved as a dealer. The credit manager testified that just two months before trial, he had approved an applicant who had previously filed bankruptcy. In other words, a prior bankruptcy was not an absolute bar. Moreover, Rodgers had filed his bankruptcy almost 13 years prior to the time the Credit Application was submitted. Under these circumstances, Rodgers’ bankruptcy would likely have had little affect on whether to accept him as a dealer. Finally, the credit that was actually extended and the subject of this nondis-chargeability proceeding was extended six years after Rodgers became a dealer. During the six-year period, Rodgers had timely paid his bills. He had an excellent 682credit history. Cornwell’s credit experience with Rodgers was the most critical factor in continuing the relationship and extending credit. Nobody testified that Rodgers’ file was pulled and the six-year old Credit Application reviewed before tools were shipped. In reality, the Credit Application had no relevance in 1987. I should also point out that the evidence does not support a finding that Rodgers intended to deceive Cornwell when he submitted the Credit Application without disclosing his prior bankruptcy. According to him, he did not believe a 13-year-old bankruptcy was relevant to the process. Under the circumstances, his explanation is believable and it was not rebutted by contrary evidence. Accordingly, I hold that Cornwell has not sustained its burden under § 523(a)(2)(B) by clear and convincing evidence. B. Nondischargeability Based upon Actual Fraud. Cornwell also seeks to except the debt from discharge under § 523(a)(2)(A) which provides in pertinent part that: (a) A discharge ... does not discharge an individual debtor from any debt— ... (2) for obtaining money, property, services, or an extension, renewal, or refinancing of credit to the extent obtained by— (A) false pretenses, a false representation or actual fraud, other than a statement respecting the debtor's or an insider’s financial condition.... (Emphasis added). A cause of action under this provision requires that the creditor prove by clear and convincing evidence that: (1) the debtor made a representation; (2) at the time he made the representation, he knew the representation was false; (3) he made it with the intention and purpose of deceiving the creditor; (4) the creditor relied on such representation; and (5) the creditor sustained the alleged loss and damage as the proximate result of the representation. In re Dougherty, 84 B.R. 653, 656 (9th Cir. BAP 1988). In Dougherty, the debtor incurred $4,000 in credit card charges in a seven-month period. The creditor argued that these charges should be excepted from discharge because when the debtor incurred these debts, he had no intent to repay. In holding for the creditor, the court stated that “Where purchases are made through the use of a credit card with no intention at that time to repay the debt, that debt must be held to be nondischargeable pursuant to section 523(a)(2)(A).” 84 B.R. at 657 (quoting In re Faulk, 69 B.R. 743, 753-54 (Bankr.N.D.Ind.1986) (Emphasis added). The court went on to state that the creditor must “[P]rove by clear and convincing evidence that ‘the debt was incurred through actual fraud, i.e., where the debtor made the changes with no intention of paying for same.’ ” Id. The Dougherty court recognized that it is often difficult to ascertain the debtor’s intent. To assist the trial court make this determination, it set forth a nonexclusive list of factors that should be considered. From that list there are three that are relevant to this proceeding: (1) the amount of the charges; (2) the financial condition of the debtor at the time the charges are made; and (3) whether there was a sudden change in debtor’s buying habits. Id. Here, the amount of the charges increased substantially within a six-week period. Before October 2, 1987, Rodgers averaged $643.92 per week in purchases over a 34-week period. During the next six weeks, however, the weekly average was $3,743.25. Rodgers testified that he purposely increased the amount of his purchases in response to threats by Cornwell’s representatives that they would terminate him as a dealer if he did not order more tools. Rodgers also testified that he wanted to stockpile tools in the event he was terminated as a Cornwell dealer. Rodgers’ financial condition was not good. Rodgers testified that he did not purchase many tools prior to October 2 because he was having difficulty selling the tools he had on hand. The evidence shows that Rodgers’ net income for the year was only $1,893. 683Moreover, Tools on Wheels was Rodgers only source of income. Rodgers responds that he intended to pay for the tools, but he was unable to do so. Rodgers testified that he offered to pay Cornwell1 $700 per week until the debt was completely paid. Cornwell, however, refused to accept this offer and demanded payment in full immediately or the return of the tools. Rodgers did not comply with either request. Rodgers testified that when he placed the orders he was fully aware of his financial predicament and knew that he could not possibly pay for the tools according to the terms of the Agreement. He hoped that he could arrange some alternate form of payment. Rodgers argues that his intent to pay at some time in the future is sufficient to preclude a finding of actual fraud. The issue then is whether an intent to pay at substantial variance from the express terms of the Agreement constitutes actual fraud. The Dougherty court did not address this issue. Dougherty held that actual fraud exists where the debtor at the time of the charges had no intent to pay. A later case, In re Karelin, 109 B.R. 943 (9th Cir. BAP 1990), is helpful. In Karelin, the debtor obtained cash advances to gamble. The debtor obtained a cash advance on her credit card in the form of a cashier’s check payable to a casino, used the check to pay down her existing debt to the casino, and then gambled on the new credit extended by the casino. On her return, to the extent she had some funds, she made a payment on her credit card account. The trial court found that at the time she accepted the cash advances she was “hopelessly insolvent” with a negative net worth of $400,-000. The court concluded that the debtor “[M]ust have been aware of the extent of the debt she was incurring by taking the cash advances, and that she could not possibly have failed to perceive the hopelessness of repaying the resulting obligation.” Id. at 947. Given this, the court concluded that the debtor had no intention to pay in accordance with the Dougherty standard. Id. at 948. In another case, In re Salett, 53 B.R. 925 (Bankr.D.Mass.1985), the creditor, a meat supplier, asserted that the debt was incurred under false pretenses and it should be declared nondischargeable pursuant to § 523(a)(2)(A). The debtor had ordered meat costing approximately $32,000. The invoice provided that full payment was to be made within seven days. At the time of the order, the debtor had a buyer for the meat. Debtor received payment from the buyer, but instead of paying on the line of credit, debtor used the money to finance his operations. When the creditor requested payment, the debtor responded that he was undergoing business difficulties and that he could not pay according to the terms of the agreement. He was, however, willing to pay off the line of credit by making $200 installments until fully paid. Debtor made only five payments prior to going out of business. During the prior two years, the debtor made over $500,000 in purchases and had paid all but the final order. In holding the debt dischargeable the court found that the debtor intended to pay for the goods at the time of the purchase and had the ability to fulfill the terms of the agreement when the order was placed. Id. at 928. (Emphasis added.) The court suggested a different result, however, if the debtor had known that he could not fulfill the terms of the agreement. The Salett court stated that “[0]nly where one purchases goods on credit knowing he does not intend to pay for the goods or knowing he is unable to comply with the payment requirements of the contract, does he fraudulently obtain the goods, making the debt nondischargeable.’’ Id. (Emphasis added.) Here, Rodgers has admitted that he could not pay according to the terms of the Agreement. Furthermore, given his financial condition, it was highly unlikely that he would be in a position to pay on the debt in the foreseeable future. His offer to pay $700 per week in light of his monthly net *684income of $387 is a feeble attempt to justify what he did. When Rodgers placed the purchase orders, he impliedly represented that he would pay in accordance with the terms of the Agreement. Cornwell reasonably relied upon this representation in shipping the tools. A contrary result would undercut commercial agreements of this type. Accordingly, I hold that the debt is nondischargeable. Separate findings of fact and conclusions of law with respect to this ruling are unnecessary. This memorandum opinion shall constitute my findings of fact and conclusions of law.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491141/	83FINDING AS TO APPLICATION OF COLLATERAL HAROLD F. WHITE, Bankruptcy Judge. On October 31, 1988, Debtor Mark J. Buzek, dba Buzek Construction Co., filed for relief under Chapter 13 of the Bankruptcy Code. On January 9, 1989, the Internal Revenue Service (IRS) filed a proof of claim for $86,514.38, representing federal taxes, interest and penalties. The facts are not in dispute. Debtor’s Plan was confirmed on January 24, 1989. On July 17, 1989, Debtor filed an objection to the IRS’s claim for taxes on the basis that a portion of the IRS's claim is an unsecured priority claim and a general unsecured non-priority claim. On November 2, 1989, the IRS filed an amended proof of claim for $86,514.38. On December 18, 1989, the IRS filed a second amended proof of claim for $80,236.89, which represents claims for FUTA taxes and withholding taxes, interest and penalties for the tax period December 31, 1987 to March 31, 1987. The IRS filed its notice of liens prior to the filing of the Petition. The IRS’s claims exceed the value of Debtor’s estate, which amounts to approximately $30,000. This matter was heard November 16, 1989 with all parties present and represented by counsel. ISSUE Is the IRS entitled to direct the application of the value of the collateral to the penalty portion of its secured claim. CONCLUSIONS OF LAW If the IRS is permitted to apply the collateral to the penalty portions of its claim first, it will be enabled to maximize its recovery, since the tax and interest portions of its unsecured claims will qualify as priority claims, pursuant to 11 U.S.C. § 507. However, unsecured tax penalties are not given a priority status and fall into a general unsecured status. . The first question this court must address is whether or not the payments pursuant to a Chapter 13 Plan are to be considered “involuntary”. When payments are involuntary, the IRS may direct the payments whichever way it chooses. However, when the payments are “voluntary”, the taxpayer is the one who is permitted to direct the payments. See Technical Knockout Graphics, Inc., 833 F.2d 797, 799 (9th Cir.1987); In re DuCharmes & Co., 852 F.2d 194 (6th Cir.1988); Matter of Ribs-R-Us, Inc., 828 F.2d 199 (3rd Cir. 1987); and In re Maranatha Trucking Co., Inc., Ch. 7 Case No. 587-1438, slip op. (N.D.Ohio.Dec. 22, 1988) “Payments made to the IRS pursuant to a chapter 13 plan are involuntary. Accordingly, the IRS will be entitled to direct the application of payments.” [citations omitted] Matter of Mikrut, 79 B.R. 404, 407 (Bankr.W.D.Wis. 1987) Also see In re Davis, 111 B.R. 234 (Bankr.E.D.Mo.1990) (LEXIS Genfed Library, Court file); In re Junes, 76 B.R. 795, 796 (Bankr.D.Oregon 1987); and In re Frost, 47 B.R. 961 (D.C.Kansas 1985) The court in the Matter of Riley, 88 B.R. 906 (Bankr.W.D.Wis.1987) stated: “Tax payments made in the course of a bankruptcy proceeding are by their nature involuntary. See First National City Bank v. Kline, 439 F.Supp. 726, 729 (S.D.N.Y.1977).” In accordance with the preceding case law, this Court finds that in a Chapter 13 proceeding the payments are involuntary; and thus in the case sub judice, the IRS is entitled to direct the application of payments. Debtor argues that the pre-petition tax penalties, being punitive in nature, should not be afforded priority treatment. 11 U.S.C. § 507(a)(7)(F), (G) provides that only penalties in compensation for actual pecuniary loss are given priority treatment. However, in a Chapter 13 repayment plan, “ * * the approach is to pay the secured tax claim in full and then to provide for priority payments for the balance of the unsecured tax claims.” In re Healis, 49 B.R. 939, 941 (Bankr.M.D.Pa.1985). Also see Mikrut, 79 B.R. at 407. *84“The IRS may allocate an involuntary payment from a taxpayer in any manner to maximize the amount of tax collected.” [citations omitted] Junes, 76 B.R. at 796. Furthermore, since the Chapter 13 payments are involuntary, the IRS may first allocate the collateral to those claims not otherwise entitled to priority. See Junes, 76 B.R. at 797; Healis, 49 B.R. at 941; and Mikrut, 79 B.R. at 407. In the case sub judice, this Court finds that the IRS will be permitted to direct the payments of collateral first to the pre-petition tax penalties. The remaining unsecured taxes and interest will be given priority status; however, any remaining penalties would not be given priority status under 11 U.S.C. § 507. Debtor’s brief in this matter, filed October 10, 1989, also questioned the accuracy of the IRS’s proof of claim. However, this matter was heard before the Court on November 16, 1989. Subsequent to that hearing, the IRS filed a second amended claim in the amount of $80,236.89 as of December 18, 1989, thus rendering, and this court finds, the objection to the proof of claim of the Internal Revenue Service to be moot. A separate Order in accordance with this Finding shall be entered.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491142/	MEMORANDUM OF DECISION JIM D. PAPPAS, Bankruptcy Judge. The Court took under advisement an objection by the Chapter 7 Trustee to the *228Debtors’ claim of an exemption in 400 video cassette tapes as “tools of the trade” under the applicable Oregon statute.1 The tapes are used by the Debtors in their video tape rental business.2 Little Oregon case law exists to assist the Court in resolving this issue. However, language found in one decision was helpful in construing the statute: “The word tool is defined to be some simple instrument used by the hand, and the object of the legislature evidently was to exempt articles of small value and of frequent and daily use by a poor mechanic upon whose manual occupation of these tools his family depended for subsistence. It was never intended that the debtor should be protected in carrying on an extensive trade with a large capital, even in tools, while his creditor was suffering for the money justly due him.” [quoting with approval Kirksey v. Rowe, 114 Ga. 893, 40 S.E. 990 (1902).] In re Lindsay, 29 B.R. 25, 26 (Bankr.D.Ore.1983). In the case cited, Judge Luckey finds a vehicle not exemptible as a “tool of the trade” because it was not “uniquely suited for and principally used in connection with a principal business activity.” Id. at 26. Case law dictates that exemption statutes should be construed liberally in favor of the debtor. See Blackford v. Boak, 73 Or. 61, 143 P. 1136 (1914). Did the authors of ORS § 23.160(1)(c) have the foresight to envision its application to video cassettes? Hardly, even under an extremely liberal view. The Oregon legislature substantially revised the exemptions available to debtors in 1981, but evidently chose not to broaden the scope of this particular exemption. See Perris, Creditors’ Rights and Remedies 11-4 (Oregon State Bar, 2d ed. 1990). It is for the legislature and not this Court to expand the protective provisions of the exemption statutes to what is basically these Debtors’ inventory. Debtors’ claim of exemption will be denied, and the Trustee’s objection sustained by separate order. . ORS § 23.160(1), provides in pertinent part that a debtor may exempt from execution: (c) The tools, implements, apparatus, team, harness or library, necessary to enable the judgment debtor to carry on the trade, occupation or profession by which the judgment debtor habitually earns a living, to the value of $750. . Mrs. Bannon operates the video store. Mr. Bannon is employed full-time elsewhere. While the record is unclear which of the two endeavors produces the larger share of the family income, this fact is not dispositive and if otherwise allowable, the exemption may be properly allowed.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491143/	OPINION HENRY L. HESS, Jr., Chief Judge. This matter came before the court upon the objections to confirmation of the Higher Education Assistance Foundation (HEAF), Hemar Insurance Corporation (Hemar) and the Oregon State Scholarship Foundation (OSSC). The parties filed a Stipulation of Facts on January 19,1990. Based upon that stipulation and the evidence presented at trial, the court finds the following facts: Prior to entering law school the debtor was employed as a bartender. From September, 1984 through July, 1987, the debt- or borrowed a total of approximately $42,-500 in student loans from the objecting creditors for the purpose of attending law school. She also obtained student loans from other creditors, bringing her total student loan debt to over $55,070. Despite the burdens of raising two children, the debtor was able to complete her law school education in 1988. She then went to work as a deputy district attorney for Multnomah County. She testified that she had been interested in law enforcement and was pleased to have found this position. Her net monthly income from that position was $1,683 at the time of the confirmation hearing. All unsecured debt in this case consists of student loans which might' not be dis-chargeable in a chapter 7 case. The proposed plan calls for the payment of 4% to nonpriority unsecured creditors based upon monthly payments to the trustee of $100. An amended budget subsequently increased the monthly net disposable income to $110. The debtor agreed to amend the plan to provide payments for 36 months. The debtor agreed to file quarterly reports of income and expenses. If the debtor’s income increases, the creditor or trustee could request modification of the plan pursuant to § 1329. The debtor also agreed to pay the trustee any income tax refunds received during the life of the plan. The creditors object to confirmation on the basis that the plan was not proposed in good faith as required by 11 U.S.C. § 1325(a)(3). The creditors allege the following facts and circumstances as evidencing a lack of good faith: (1) All of the debt is student loans, which would be nondischargeable in a chapter 7 case; (2) The plan calls for a minimal dividend to unsecured creditors and payments will only be made for 36 months; (3) The debtor either did not intend to repay the loans at the time they were incurred, or recklessly ignored the fact that she would be unable to do so after graduation; (4) Immediately before filing, the debtor made luxury purchases and otherwise spent money extravagantly; (5) The debtor intentionally understated income and overstated expenses in her chapter 13 statement. 234THE BURDEN OF PROOF REGARDING GOOD FAITH—IN GENERAL As stated in In re Chinichian, 784 F.2d 1440, 1444 (9th Cir.1986), For a court to confirm a plan, each of the requirements of section 1325 must be present and the debtor has the burden of proving that each element has been met. Therefore, the burden of proving good faith, if challenged, falls upon the debtor. Some courts have embellished upon that rule where good faith is challenged, characterizing the burden as “especially heavy” when a “superdischarge” is sought. See, e.g., In re Warren, 89 B.R. 87, 93 (9th Cir. BAP 1988) (quoting In re Wall, 52 B.R. 613, 616 (Bankr.M.D.Fla.1985). This court questions the appropriateness of imposing an enhanced burden of proof.1 The broad discharge provisions of § 1328(a) were obviously enacted for the benefit of debtors, not creditors. It seems incongruous to gratuitously place a handicap upon debtors seeking to take advantage of a provision enacted for their benefit. That conclusion is consistent with Bankr.R. 3020(b)(2), which provides: If no objection is timely filed, the court may determine that the plan has been proposed in good faith and not by any means forbidden by law without receiving evidence on such issues. If Congress intended debtors to have an “especially heavy” burden in establishing good faith in chapter 13 cases, then a finding of good faith would not be pro forma in the absence of evidence indicating bad faith. This court would have problems applying an “especially heavy” burden of proof when a “superdischarge” is sought. What is the difference between a burden of showing good faith and an “especially heavy” burden of showing good faith? If the debtor has been honest in the answers given to questions contained in the Chapter 13 Statement and answers given to questions propounded by the court and creditors, the plan fulfills all of the requirements of § 1322 and § 1325, and the debtor is not seeking relief other than that prescribed by the statutes, what else must the debtor do to carry the burden of proving good faith? Is it enough that the debtor testifies that the case is filed in good faith and that the plan is proposed in good faith? What additionally must the debtor do to meet an “especially heavy” burden of proving good faith? The mere fact that the debtor has the burden of proof, without enhancement, can be a hard obstacle for debtors to meet given the lack of any Congressional guidelines and the resultant myriad of conflicting opinions based upon the subjective predispositions of each individual judge. The reported decisions regarding good faith seem to depend more upon the particular judge and his or her personality than upon any particular rule of law. For the reasons set forth above, this court rejects imposing an “especially heavy” burden of showing good faith where a “superdischarge” is sought. THE PERCENTAGE TO BE PAID UNSECURED CREDITORS, THE LENGTH OF THE PLAN AND THE NATURE OF THE DEBT In re Goeb, 675 F.2d-1386, 1390 (9th Cir.1982) instructs that while a court “may consider the substantiality of the proposed repayment, the court must make its good-faith determination in the light of all militating factors.” Many courts have seized upon this and similar language to inquire into the percentage to be paid and the nature of the debts to be discharged in determining good faith. See, e.g., In re Warren, 89 B.R. 87 (9th Cir. BAP 1988). This court believes that the scope of the 235above-cited statement in Goeb2 has been narrowed by subsequent Congressional action, and the amount of the proposed repayment and length of the plan are no longer factors which are properly considered in determining good faith. In 1984, after Goeb, Congress amended 11 U.S.C. § 1325 to add subsection (b). That new subsection added a further requirement to confirmation of a chapter 13 plan. (1) If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan ... (B) the plan provides that all of the debtor’s projected disposable income to be received in the three-year period beginning on the date that the first payment is due under the plan will be applied to make payments under the plan. I agre'e with commentators who have observed that the amendment was intended to eliminate certain factors from the good-faith equation: The ongoing dispute regarding whether there should be a minimum level of payments in chapter 13, other than that set by the section 1325(a)(4) best interests of creditors test, was resolved by Congress in the Bankruptcy . Amendments and Federal Judgeship Act of 1984. That Act added a new section 1325(b) to the Code.... The new amendment thus clarifies that the “good faith” standard of section 1325(a)(3) does not set any minimum amount or percentage of payments that must be made to unsecured creditors, and will allow courts to once again give to the term “good faith” its traditional historical interpretation. 5 King, Collier on Bankruptcy 111325.08 at 1325-46 (15th ed. 1989). Congress has effectively legislated regarding the type of debts which may be discharged, the amount which must be repaid creditors and the length of a plan. Section 1328(a) sets forth what debts are excluded from discharge.3 Section 1325(b) specifies the method of determining the amount which must be paid to unsecured creditors, and the minimum length of payment.4 As to those questions, Congress has preempted the field.5 Courts are not free to judicially overrule the acts of Congress under the guise of an inquiry into “good faith.” Those who disagree with the Acts of Congress should appeal to their legislators rather than the courts. INCORRECT ITEMS ON CHAPTER 13 STATEMENT A. Child Support In her original Chapter 13 Statement, the debtor failed to list as income a 236$100 per month child support obligation from Danny Hayter. She also omitted a $7,200 child support arrearage owed by Hayter. The debtor’s explanation for that omission is credible and satisfactory. She does not know where Hayter lives and has not heard from him in years. At last account, he was a chemically dependent alcoholic facing extradition to another state on felony charges. The debtor sought the assistance of the Support Enforcement Division of the State of Oregon to collect the obligation without success. She does not expect to ever receive anything from Mr. Hayter, and is willing to assign his obligation to the creditors. The debtor also omitted child support paid by Kim Walter. Mr. Walter’s paternity has never been established, and no judgment has been rendered against him. Nevertheless, Mr. Walter voluntarily pays $250 per month child support. The debtor omitted that sum from the original Chapter 13 Statement, explaining that since it was not taxable as income, she believed it was not includable as income for Chapter 13 purposes. To compensate for the omitted child support, she also omitted from the budget portion of the Chapter 13 Statement certain expenses attributable to the children. She has since filed an amended budget which shows the child support and includes the increased expenses. The creditors do not believe that explanation is credible, noting that question 3(a) of the chapter 13 statement specifically asks if the debtor receives “alimony, maintenance or support.” The debtor explained that she interpreted the question as referring to spousal support rather than child support. The court finds that explanation credible. During a rule 2004 examination of the debtor, when the subject of child support came up she readily disclosed the payments by Walter. If she intended to deceive, then it is not likely that the debtor would volunteer the very information she is accused of concealing. As shown by the amended budget, expenses equivalent to the omitted support payments were not listed on the original chapter 13 statement. The court concludes that the debtor’s omission of the $250 was an error rather than an intentional attempt to deceive the court or creditors as to her income. B. Expenses Here again we face a question of the burden of proof. The creditors argued strenuously that the burden is on the debt- or to show good faith by establishing the reasonableness of every single budget item, even if no evidence suggests that a particular item was unreasonable. However, Bankr.R. 3020(b)(2), discussed supra, recognizes that a debtor should not be obligated to meet every argument that could possibly be made against a finding of good faith, even if no such argument is presented. To require the debtor to engage in that type of shadow-boxing is a waste of time and resources. The debtor need not go through each budget item and offer proof that it is a reasonable projection of future income or expenses. If the creditors believe that a particular budget item is unreasonable, it is incumbent upon the creditors to specify the objectionable item so that the debtor may meet the issue. The only item which the court believes should be adjusted is heat. Historically, the debtor’s average monthly electrical expense was approximately $50, rather than the $80 projected by the debtor. In the event that the expenses for heat are at the higher figure, then the debtor may file a modified budget and plan reflecting that fact. The court finds nothing particularly sinister in the debtor’s listing heat at $80 per month. Paragraph 4(b)(2) of the Chapter 13 statement calls for “estimated average future monthly expenses.... ” (Emphasis added.) Thus, the debtor is called upon to predict future expenses rather than list historical averages. The creditors point out that the debtor’s annual income is approximately $7,000 more than when she was in school, and therefore questions that she can only afford to pay $1,320 per year to creditors. However, the debtor’s standard of living in law school was marginal. The Code does 237not require that chapter 13 debtors live in abject poverty. The standing trustee, who has occasion to examine thousands of chapter 13 budgets annually, recommended confirmation of the plan. That fact underscores that the amended budget proposed by the debtor is reasonable. The creditors thoroughly examined the debtor’s records and examined her at length regarding the projected budget. The only questionable expense is heat, which exceeds historical expenses by $30. That does not strike the court as signifying a determined effort to inflate expenses. The court concludes that the debtor has done her best to accurately reflect future expenses. Except for an excess of $30 per month for heat, there is no evidence that any items are excessive or unreasonable. INTENT OF DEBTOR AT THE TIME DEBT INCURRED The creditors assert that when the debtor obtained some of the loans in question, she planned to discharge them in bankruptcy rather than repaying them. If that were proven, this court would have no problem finding that this plan, and any other proposing to discharge such loans, was not proposed in good faith. However, the creditors have not shown that fact.6 The debtor lived frugally during the period she was being supported by the student loans. She often had insufficient money to adequately heat her residence. She depended upon donated food and clothing to help feed and clothe her children. The debtor testified that she fully intended to repay the loans at the times she borrowed the money, and the facts support that testimony. There is no evidence that the debtor knew about the dischargeability of student loans when she incurred the debt at issue. While in law school, and despite her severe financial distress, the debtor borrowed less than the full amount for which she was eligible. If she did not intend to repay the debt, one would expect that the debtor would have accepted all the financial assistance available through student loans and other lenders. After graduation, the debtor inquired about consolidating or otherwise restructuring her. student loans, thereby reducing the monthly debt service. She was advised that after consolidation, her monthly payment would be $450 per month, an impossibility on the debtor’s salary as a deputy district attorney. No feasible options were presented to the debtor. The fact that student loans are the only debts is strong evidence of good faith in proposing the plan. If the debtor intended to manipulate the Bankruptcy Code by incurring debt with the intent to discharge it at a later date, then one could logically expect to see evidence that the debtor took advantage of the availability of credit to the fullest extent. That is not the case here, as shown by the lack of any debt other than student loans. LUXURY PURCHASES The creditors suggest that at a time when her loans were starting to become payable, the debtor was living an extravagant lifestyle. The following summarizes the expenditures complained of by 238the creditors, along with other relevant circumstances: In the Spring of 1988, the debtor graduated from law school. She and her two daughters shared a , small two-bedroom apartment costing $350 per month. The children had reached an age where sharing a bedroom was causing conflicts. To resolve the problem, the debtor moved to a three-bedroom apartment close to the children’s school. As of the confirmation hearing, the rent was $485 per month, which the trustee did not find objectionable. By September of 1988 the debtor had taken the bar examination and obtained employment with the Multnomah County District Attorney. In the Fall of 1988 she started receiving demand letters from the lenders. She consulted an attorney, who advised her that a chapter 13 case might be appropriate. The debtor elected not to file a bankruptcy petition at that time, explaining that she was hoping there was some other solution. At that point, all her loans had not yet become payable, and she was still not sure what the monthly debt service would total. Her employer had a dress code which required the debtor to present a professional appearance. Therefore, during this period the debtor began establishing a work wardrobe. She wanted clothes that would last, and shopped at higher-quality stores. By January, 1989 she had spent at least $1,060 on work clothes. In March of 1989, the debtor replaced her broken stereo system by purchasing a tape deck and receiver for $790.00. The stereo and tape system were the primary source of entertainment for her children, and she wanted equipment that would last. The creditors point to a “vacation” taken by the debtor in 1989 at Sunriver, Oregon. That “vacation” was a professional conference. The debtor, five other deputy district attorneys and four children all stayed in the same residence. The conference enabled the debtor to fulfill her mandatory continuing professional education. While attending that conference the debtor and her children spent money on a raft trip. The creditors also object to some other minor expenses, such as $150 for picture and frames. All the above items, taken either individually or collectively, are too insignificant for the court to seriously consider as evidencing a lack of good faith. After all is said and done, the most damning evidence of a lack of good faith consists of an expensive stereo, some nice work clothes and an overestimate of $30 for heat. The court doubts that Congress intended that to be a basis for denying the debtor the relief she so greatly needs. CONCLUSION The matter of disposable income covered by § 1325(b) establishes a mathematical equation under which the dividends to creditors will follow. Therefore, the amount of the dividend to creditors is no longer an appropriate consideration in determining good faith. Likewise, since § 1328(a) legislatively defines what debts are dischargea-ble, whether or not the plan contemplates the discharge of a debt which would not be dischargeable in a Chapter 7 case is of little weight in determining good faith. Those cases which have varying laundry lists of factors which might be considered in determining good faith give no indication of the weight which should be attached to any single factor. Instead such cases seem to instruct the trial judge that the decisions can be made on an ad hoc, case by case basis which can depend upon the predilections of the judge before whom the case is pending. Following these teachings and considering all militating factors as suggested by Goeb, supra, as they apply to the facts of this case, I find that the plan is proposed in good faith. The plan should be amended as follows: (1) the debtor shall pay an additional $30 per month to the trustee, for a total of $140 per month; (2) the debtor shall pay to the trustee any income tax refunds to which she may be entitled during the life of the plan; 239(3) the debtor shall submit quarterly reports of income and expenses to the trustee and objecting creditors. (4) paragraph 1 of the plan should be amended to reflect that plan payments shall be for a 36 month period; (5) paragraph 2(d) of the plan should be amended to state that the dividend upon nonpriority unsecured claims will be not 4% but approximately 4%. (The exact percentage will depend upon the total amount paid by the debtor to the trustee during the 36 month period and the total amount in which the nonpriority unsecured claims are filed and allowed). An appropriate order will be entered. . This court has stated on numerous occasions that it is not bound by holdings of the Bankruptcy Appellate Panel unless that decision arises *235from the District of Oregon. See, e.g., In re Staples, 87 B.R. 645, 646 n. 1 (Bankr.D.Or.1988). . For this court’s analysis of the Goeb decision, see In re Costello, 98 B.R. 523 (Bankr.D.Or.1989). . Congress knows how to limit the discharge-ability of certain types of student loans. For example, the discharge of Health Education Assistance Loans is limited by 42 U.S.C. § 294f(g). See In re Battrell, 105 B.R. 65 (Bankr.D.Or.1989). . The provision of § 1322(c) which permits a plan to extend for more than 36 months was inserted for the benefit of debtors, not creditors. In re Gunn, 37 B.R. 432, 435 (Bankr.D.Or.1984). Therefore, the fact that a plan does not extend for more than 36 months cannot be relied upon by a creditor as indicating lack of good faith. If Congress intended good faith to require plans paying less than a 100% dividend to extend for more than 36 months, then § 1323(b) would mandate that all plans extend for 60 months or a 100% dividend be paid. .For the reasons stated in In re Adamu, 82 B.R. 128, 130 (Bankr.D.Or.1988) and herein, this court does not find the dischargeability of a given debt particularly relevant in determining good faith, and therefore need not determine whether the debt would be nondischargeable in a chapter 7 case. In any event, it should be noted that the student loans are dischargeable in chapter 7 to the extent that excepting them from discharge would impose an undue hardship upon the debtor or her dependents. 11 U.S.C. § 523(a)(8)(B). Based upon the debtor’s budget, it would appear that even in a chapter 7 much of the student loan debt would be dis-chargeable. . The creditors make much of the fact that the debtor should have realized early in her law school career that she was unlikely to obtain high-paying employment. The inference is that before accepting any of the loans, the debtor should have carefully weighed the probability of her future ability to repay the loans. If it appeared that she would be unable to do so, she should have withdrawn from school, presumably to return to her prior employment as a bar maid. That premise is difficult for this court to accept. Student loans are granted on the basis of present need rather than future ability to repay. Repayment is ultimately dependent upon the total amount borrowed during the course of the debtor’s education and the future employability of the debtor, both of which may be difficult to predict at the time a loan is taken. There is no evidence that the debtor misrepresented her outstanding indebtedness or her ability to repay the loans upon graduation. In fact, there is no evidence that they were factors into which the creditor inquired. If the lender did not deem it important to evaluate the debtor’s future ability to repay her debt, it is difficult to expect the debtor to do so.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491144/	MEMORANDUM OPINION AND ORDER HELEN S. BALICK, Bankruptcy Judge. This is a declaratory judgment action on an issue pertinent to another lawsuit between the parties presently scheduled for trial. See 28 U.S.C. § 2201. Collated Products Corporation, a Chapter 11 debtor, seeks a determination as to whether United Jersey Bank has a security interest in $329,767 deposited in Collated’s “commingled” operating account at the Delaware Trust Company. It does not by virtue of NJ.Stat.Ann. § 12A:9-306(4)(d). Facts On August 18, 1988, Collated and the Bank settled a dispute by executing a series of documents which resulted in a reduction of Collated’s debt aggregating several million dollars to $910,000 in exchange for Collated dropping certain claims against the Bank. The Bank’s collateral described in a schedule attached to a security agreement and financing statement filed with the Delaware Secretary of State includes inventory, accounts, equipment, instruments, general intangibles and the proceeds thereof. Under the terms of the settlement agreement, Collated was granted explicit authority to retain and use cash proceeds: 2. Effective as of the date of this Agreement, Collated shall be permitted to retain and use, in Collated’s sole discretion, all of the proceeds of Collated’s accounts. The Bank hereby agrees that upon the written request of Collated, the Bank will subordinate its lien upon the accounts of the Borrower as described in Section (ii) of Schedule A to the General Security Agreement to either, (i) a lien in favor of a lending institution providing a line of credit for working capital purposes to Collated or (ii) the general unse408cured creditors of Collated in return for more favorable payment terms upon Collated’s accounts payable. All documents state that New Jersey law governs. Following August 18, Collated moved its accounts from the Bank to Delaware Trust Company. Collated’s business is the production of game cards and card decks, the latter of which represents 65% to 70% of its gross sales. Collated prints, collates, cuts, and arranges for the mailing of its customers’ card decks. When an order is placed, Collated undertakes production of samples and various art and graphics paperwork necessary to satisfy the customer’s specifications. After a customer’s approval, that deck is printed and collated. The ordered number of the finished product is labeled, sealed, sorted and tied into mail bags. Collated requires its customers to deliver funds for mailing costs 15 days prior to the mailing date. After receipt of the postage check, the mail bags are delivered to the Postmaster. He completes a form which verifies the amount of postage charged for a particular mailing. Three modes of postal payments evolved over the years. First, the customer delivers to Collated a check payable to the Postmaster which results in a credit to Collated’s mailing permit account. Second, the customer delivers to Collated a check payable to the Postmaster which identifies that customer's permit number as the account to be credited. Third, the customer delivers a check payable to Collated. Under the first two methods, Collated delivers the checks to the Postmaster and appropriate credit is given either to Collated’s permit account or the customer’s permit account. Under the third method, Collated deposited the check into an account designated “Postage Segregated Account” 1 until May 1989. Thereafter, postage funds were deposited in its operating account. Collated indicates on its invoices the postage charges as well as the method of payment chosen by the customer. Since the postal charges are set by the Post Office, Collated cannot determine the exact amount in advance. However, the overwhelming number of invoices reflect nominal deviations of actual costs compared to the deposited amount (the average overpayment being $263.81 or 2.6% of the average postage charge, and the average underpayment being $361.15 or 3.5% of the average postage charge). Postage charges are substantial in comparison to the billings for the actual card deck job. In fact, for the period February through August 16, 1989, Collated billed a total of $1,556,-914 for card deck jobs. Customers made advance payments for postage costs of $1,050,357. (See Exhibits 4A and 3A, respectively). On May 12, 1989, Collated transferred approximately $26,000 from its segregated postage account into its operating account. From that date to August 4, Collated deposited postage checks directly into its operating account for the express purpose of creating a “commingled” account. Collated’s analysis of this account shows $116,-380 deposited from customer postage prepayments along with $3,645 interest income, miscellaneous income from scrap metal sales and vending machine commissions of around $1,062, a federal income tax refund of $5,000, and an unspecified amount of routine accounts receivable. (See Exhibit 6A). Collated’s last deposit before filing bankruptcy was made on August 4. Issue and Applicable Law Did the Bank waive its security interest in Collated’s accounts under paragraph 2 of the settlement agreement; or, in the alternative, is Collated’s security interest in the commingled account limited by § 9-306(4) of the U.C.C.? Although the pertinent Delaware and New Jersey U.C.C. section is nearly identical, New Jersey law rather than Delaware law governs the interpretation and operation of the security instruments. The security agreement and note expressly 409state they are governed by the laws of New Jersey. Section 12A:1-105 of the New Jersey Code permits a choice of law. The parties’ agreement prevails. No Waiver of Security Interest Collated’s contention that the Bank waived its security interest because the settlement agreement provided that Collated could retain and use its proceeds and subordinate the Bank’s lien under certain circumstances is without merit. Section 12A:9-205 of the New Jersey Code authorizes a “floating lien” that relieves the Bank from policing its collateral: A security interest is not invalid or fraudulent against creditors by reason of liberty in the debtor to use, commingle or dispose of all or part of the collateral (including returned or repossessed goods) or to collect or compromise accounts or chattel paper, or to accept the return of goods or make repossessions, or to use, commingle or dispose of proceeds, or by reason of the failure of the secured party to require the debt- or to account for proceeds or replace collateral. * * * (emphasis added). In interpreting this section, the Court of Appeals has observed that “the Code position is perfectly clear that a security interest is not invalid because of failure of the secured party to police the conduct of the debtor.” In re United Thrift Stores, Inc., 363 F.2d 11, 15 (3d Cir.1966). Clearly, the parties’ security agreement is valid even though Collated was given wide latitude in controlling its assets. The subordination provisions of paragraph 2 of the settlement agreement do not affect the vitality of the Bank’s floating lien. See Brown & Williamson Tobacco Corp. v. First Nat’l Bank of Blue Island, 504 F.2d 998, 1001-02 (7th Cir.1974). Finally, the settlement agreement, the security agreement and all the other instruments executed on August 18, 1988 were part of a negotiated settlement. All these documents must be construed harmoniously rather than in an uncomplementary fashion. In summary, the liberty accorded Collated under the settlement agreement did not operate as a waiver of any security interest covered by the security agreement and related instruments. Advance Postage Payments are not Proceeds Subject to Bank’s Security Interest The Bank’s argument that § 9-306(1) includes all funds and monies in connection with Collated’s business is much too broad and must be rejected. Section 12A:9-306(1) of the New Jersey Code defines proceeds as follows: “Proceeds” includes whatever is received when collateral or proceeds is sold, exchanged, collected or otherwise disposed of. The term also includes the account arising when the right to payment is earned under a contract right. Money, checks and the like are “cash proceeds”. All other proceeds are “non-cash proceeds”. The first sentence of the statute indicates that proceeds must flow from transactions involving the original or substitute collateral and proceeds. .Obviously, the customers’ advance postage payments cannot be deemed proceeds because they are not substituted for nor derived from the original collateral. See In re SMS, Inc., 15 B.R. 496, 499 (Bankr.D.Kan.1981). The advance postage monies were tangential to production of the card decks and did not flow from the job proceeds. The postage amounts represent mailing costs Collated collected from a specific customer in the ordinary course of business, escrowed and ultimately paid to the Postmaster for mailing that specific customer’s card deck. If the Bank’s interpretation were adopted, then anything remotely relating to the business which had value would be included under the definition notwithstanding its non-relationship to the original or substituted collateral. The Bank extends its sweeping construction of § 9-306(1) to argue that Collated’s policy requirement of advance payment of postage costs was á contract right or general intangible encompassed under the security agreement. The second sentence of the section states that “the term [proceeds] also includes the account arising when the right to payment is earned under a contract 410right.” “Proceeds” under this part of the statute is limited to proceeds received by the debtor upon the debtor’s performance of the contract. American East India Corp. v. Ideal Shoe Co., 400 F.Supp. 141, 167-68 (E.D.Pa.1975). Here, the postage payments were not made to Collated for its performance; rather, the performance was made by the Postmaster who mailed the card decks. Collated only transferred the customers’ prepayments in accordance with its obligations to the customers. As a result, the postage funds cannot be considered a contract right or general intangible because Collated had no direct right to payment. Thus, the Bank’s security interest could not attach to the postage monies. See NJ.Stat.Ann. §§ 12A:1-201(11), :9-106. Section 9-306(4)(d) Limits the Bank’s Security Interest in the Commingled Account Section 12A:9-306(4)(d) of the New Jersey Code limits a secured party’s interest in commingled accounts in the event of insolvency proceedings of a debtor. If cash proceeds have been commingled with other money in a bank account, subsection 4(d) limits the security interest in proceeds to an amount not greater than the cash proceeds collected within 10 days of the institution of insolvency proceedings when a right to set-off exists. Thus, the grant of a security interest in commingled funds under 9-306(d)(4) is not an expansion of a secured creditor’s pre-U.C.C. right to trace proceeds, but instead, it is a substitution and limitation of that right. Maxl Sales Co. v. Critiques, Inc., 796 F.2d 1293, 1300 (10th Cir.1986); Fitzpatrick v. Philco Fin. Co., 491 F.2d 1288, 1292 (7th Cir.1974). The statute is written in the conjunctive requiring a right of set-off along with the limitation of the security interest to deposits measured by the 10-day rule. On May 12, 1989, the separate postage account was closed and the money was transferred to the operating account. Thus, the funds were commingled and therefore unidentifiable under New Jersey law. In re Glaubinger Machinery Co., Inc., 58 B.R. 38, 40 (Bankr.D.N.J.1986); Morrison Steel Co. v. Gurtman, 113 N.J. Super. 474, 481, 274 A.2d 306, 310 (1971). Collated’s last deposit into its operating account before filing bankruptcy was on August 4. Twelve days later, August 16, Collated filed its Chapter 11 case thereby initiating insolvency proceedings. See N.J. Stat.Ann. § 12A:1-201(22) (“ ‘Insolvency proceedings’ includes any assignment for the benefit of creditors or other proceedings intended to liquidate or rehabilitate the estate of the person involved.”) Since no deposits were made in the commingled account within 10 days of Collated going into Chapter 11, the Bank could not have a security interest in the commingled account. Moreover, even if there had been deposits, the Bank had no right of set-off since Collated severed their banking relationship in 1988 and moved its accounts to Delaware Trust. Section 9-306(4)(d) is the flip-side of the substitution of collateral doctrine authorized under §§ 9-205, 9-306(1), and other U.C.C. provisions. As was the case here, this doctrine grants a creditor latitude in perfecting a lien against a wide array of assets belonging to a debtor. However, these rules change when insolvency proceedings are initiated and some of the collateral or proceeds are commingled with other funds. Though it may be possible to distinguish the postage funds from proceeds, that fact is immaterial under the plain language of this provision. Maxi Sales Co., 796 F.2d at 1300. Thus by operation of law, NJ.Stat.Ann. § 12A:9-306(4)(d), the Bank has no security interest in Collated’s operating account in the amount of $329,767 deposited at Delaware Trust. Equitable Remedies Not Applicable Unclean Hands The Bank contends that Collated’s manipulation in commingling the postage funds with money in its operating account should prevent it from escaping the Bank’s security interest. A fundamental maxim of equity is that one who comes into equity must come with clean hands. Johnson v. Johnson, 212 N.J.Super. 368, 515 A.2d 255 411(Ch.Div.1986). This usually means that a court of equity will refuse relief to a party who has acted in a manner contrary to the principles of equity. 515 A.2d at 263. The bankruptcy court is a court of equity with power to sift through circumstances to see that injustice and unfairness is not done in the administration of a debtor’s estate. Pepper v. Litton, 308 U.S. 295, 60 S.Ct. 238, 84 L.Ed. 281 (1939). However, bankruptcy judges cannot ignore the plain language of a statute in order to reach results in keeping with notions of equity. In re Shoreline Concrete Co., 831 F.2d 903, 905 (9th Cir.1987). Here, the law2 states that equitable principles shall supplement its provisions unless displaced by a particular provision. There is no language suggesting that equity may usurp specific Code provisions. Collated’s intentional commingling of the postage monies with its operating account did not violate any provision of the settlement agreement or security agreement. Nor was the act overtly dishonest so to violate Collated’s implied obligation of good faith under the U.C.C. See. N.J.Stat. Ann. §§ 12A:l-203 (good faith obligation under U.C.C.), :1 — 201(19) (definition of good faith). Insolvency proceedings, especially bankruptcy under the 1978 Code, provide debtors with assorted opportunities to limit or unperfect creditors’ security interests; however, the Bank’s security interest in Collated’s operating account terminated by operation of state law — not federal bankruptcy law — in accordance with the New Jersey version of Article 9. Fiduciary Collated was not akin to a trustee with respect to the Bank’s security interest in the operating account proceeds. Accordingly, the trust analogy suggested by the Bank which would improperly apply fiduciary principles to secured transactions must be rejected. An order in accordance with this Memorandum Opinion is attached. ORDER AND NOW, March 19, 1990, for the reasons stated in the attached Memorandum Opinion, the court finds that United Jersey Bank/Central, N.A. did not waive its security interest in Collated Products Corporation’s accounts under paragraph 2 of the settlement agreement executed on the same day as the security agreement; however, . by operation of law, N.J.Stat.Ann. § 12A:9-306(4)(d), the Bank does not have a security interest in funds deposited in Collated’s commingled operating account in the approximate amount of $329,767. IT IS SO ORDERED. . The Segregated Postage Account was actually two accounts: an IMMA account and a checking account. These accounts are used in a complementary fashion; thus, the two accounts are here treated as one. . Unless displaced by the particular provisions of this Act, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estop-pel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy or other validating or invalidating cause shall supplement its provisions. (emphasis added.) N.J.Stat.Ann. § 12A:1-103.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491145/	HELEN S. BALICK, Bankruptcy Judge. This is the court’s Opinion on the question of whether Frederic A. Lang’s claim has secured status in the CPM Energy Systems Corporation’s Chapter 11 case. Lang’s claim arises out of a $200,000 loan made to CPM in October 1986 that was refinanced in February 1987. The original loan is evidenced by two $100,000 promissory notes, two stock purchase agreements authorized by corporate resolution and a financing statement filed December 18, 1986, with the Secretary of the Commonwealth of Pennsylvania. On February 19, CPM again executed two promissory notes each in the amount of $100,000 and two stock purchase agreements, authorized by corporate resolution dated February 18. A financing statement was subsequently filed with the Prothonotary of Northampton County on May 26, 1987. Both financing statements had attached a detailed list of machinery and equipment located at 840 Line Street, Easton, Pennsylvania. CPM did not sign any security agreement in connection with either loan transaction. Lang forwarded what he called security agreements to CPM for signature the end of March 1988 and followed with a letter dated April 7 requesting their return. These agreements were actually financing statements. Lang also obtained a judgment against CPM on September 19, 1988, in the amount of $210,000 plus interest and costs upon which a writ of execution issued on November 22. The Sheriff’s list of CPM’s machinery and equipment levied upon on December 19, 1988, is identical to that listed in the U.C.C. filings. Under the Pennsylvania version of the U.C.C. in order to create a security interest there must be a security agreement filed by the debtor containing a description of the collateral or types of collateral. 13 Pa.C.S.A. § 9203(a)(1). The statute provides that a security agreement may serve as a financing statement if it is signed by the debtor but it is silent as to the converse. 13 Pa.C.S.A. § 9402. However, the law of this Circuit is that no formal security agreement is required if there is a writing or writings signed by the debtor describing the collateral which demonstrates an intent to create a security interest in the collateral. In the Matter of Bollinger Corp., 614 F.2d 924 (3rd Cir. 1980). *413Here, related documents satisfy the Bol-linger test. The stock purchase agreements signed in conjunction with the promissory notes in both the 1986 and 1987 transactions specifically state that: (d) The loan shall be secured by security agreements executed in connection with certain personal property owned by CPMES and now located at the CPMES facility at 840 Line Street, Easton, Pennsylvania. The Security Agreement shall take the form as attached at Exhibit “B” and shall constitute a Security Agreement under the Uniform Commercial Code, as enacted by the Commonwealth of Pennsylvania and State of Delaware. The financing statements, signed by the debtor, list in detail the machinery and equipment intended as collateral. The failure to execute formal security agreements is explained by the parties mistakenly calling a financing statement a security agreement. Thus, Lang has a valid security interest in the property described, listed and attached to the financing statements. In Pennsylvania, the lien of any judgment or other order of the Court of Common Pleas for the payment of money is a lien upon real property effective upon its entry in the office of the Clerk of Court of the County where the real property is located. 42 Pa.C.S.A. § 4303(a). The delivery of a writ of execution to the Sheriff creates a lien against personal property. DeAngelis v. Commonwealth Land Title Ins. Co., 467 Pa. 410, 358 A.2d 53 (1976). Consequently, the delivery of the writ of execution to the Sheriff on November 22, 1988, more than 90 days before the bankruptcy filing, resulted in a lien against the same machinery and equipment described in the financing statements with the exception of four Accurate trailers. Lang has standing to proceed with his motion for relief as a secured creditor. This Opinion however does not deal with priority of the liens which may be asserted against the property in issue. IT IS SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491148/	MEMORANDUM OPINION JOHN C. MINAHAN, Jr., Bankruptcy Judge. THIS MATTER comes before the court on the debtor’s Motion for New Trial, for Amended Findings of Fact and for an Amended Order (Fil. #111). The court concludes that the motion should be granted in part and denied in part. The debtor’s motion for new trial and amended findings was filed in response to the court’s January 16, 1990 memorandum opinion in this matter. The January 16, 1990 opinion generally held that for purposes of 11 U.S.C. § 365 a Nebraska installment land contract is executory if the land contract can be strictly foreclosed under Nebraska law. 116 B.R. 694 (Bkrtcy. D.Neb.). Nebraska law allows strict foreclosure if the vendee has no equity in the property and strict foreclosure would not offend justice and equity. In the January 16, 1990 opinion, the court concluded that strict foreclosure of the debtor’s interest under the land contract was available under Nebraska law because the debtor had no equity in the property and strict foreclosure would not offend justice and equity. Accordingly, the court held that the debtor’s installment land contract was not an executory contract for purposes of § 365. ARGUMENT At the hearing on debtor's motion for new trial and amended findings, the debtor advanced three principal arguments in support of its motion. First, the debtor asserted that it is entitled to a new trial because several facts demonstrate that strict foreclosure of the March 1, 1978 land contract would offend justice and equity under Nebraska law. Second, the debtor argued that it is entitled to a new trial because the rule of decision in the court’s January 16, 1990 opinion is erroneous as a matter of law. Third, the debtor requested that the 701court amend its finding as to the value of the real estate subject to the March 1, 1978 land contract. With respect to debtor’s first principal argument, the debtor asserted that several facts present in this case demonstrate that strict foreclosure of the land contract would offend justice and equity. First, the debtor asserted that allowing strict foreclosure would deprive the • debtor of the rights associated with foreclosing a mortgage, including an equity of redemption and a judicial sale under state law. Second, the debtor stated that although there is currently no equity in the property, the debtor has reduced the purchase price of the property by 40 percent. The debtor states that the original purchase price of the land in 1978 was approximately $504,-000.00, and the debtor has reduced the balance due by payments to approximately $310,000.00. Third, the debtor stated that it has improved the real estate during the contract term. Fourth, the debtor argued that the debtor and the vendor, Stokes Estate have agreed as a matter of contract that termination of the debtor’s interest could take place only by foreclosure as a mortgage. Debtor asserts that both the March 1, 1978 land contract and a subsequent settlement agreement between Mr. Charles Raymond, debtor’s predecessor in interest, and the Stokes Estate contain language which allows termination of the debtor’s interest only through foreclosure as a mortgage. Fifth, the debtor asserted that the lack of equity in the real estate is not attributable to the debtor, but is due to a systemic decline in the value of farm and ranch land in Nebraska during the 1980’s. The debtor asserted that its lack of control over the decline in value is a factor the court should consider in determining whether strict foreclosure would offend justice and equity. The second principal argument advanced by the debtor at the hearing on its motion for new trial and amended findings is that the rule of decision in the court’s January 16, 1990 opinion is erroneous as a matter of law. The debtor asserted that Congress’ intent in enacting Chapter 12 was to provide protection for farmers that Chapters 11 and 13 failed to provide. The debtor stated that a purpose of Chapter 12 is to protect the value of property rather than a creditor’s interest in property. However, debtor argues that the rule of decision announced in the January 16, 1990 opinion protects a creditor’s interest in property and fails to follow the policies behind Chapter 12. Farm and ranch land values have declined in Nebraska in the 1980’s. Debtor contends that the court’s decision allows the decline in value to transform a nonexe-cutory contract into an executory contract through no fault or control of debtors. Therefore, the debtor requests the court to reconsider its decision in light of the policies of Chapter 12. The third principal request advanced by the debtor at the hearing on its motion for new trial and amended findings is a request that the court amend its finding as to the value of the property subject to the March 1, 1978 land contract. The court’s January 16, 1990 opinion stated that debt- or’s plan valued the property at $144,000.00 and that an appraisal attached to the plan valued the property at $150,000.00. Debtor asserted that this finding was incorrect because the plan and an appraisal attached to the plan valued the property at $260,000.00. DISCUSSION I conclude that debtor’s motion for new trial and amended findings should be granted in part and denied in part. Debtor’s motion for new trial should be denied because strict foreclosure of the March 1, 1978 land contract would not offend justice and equity under Nebraska law, and because the court’s January 16, 1990 opinion is not erroneous as a matter of law. Debt- or’s motion for amended findings should be granted with respect to the court’s finding of the value of the property. First, debtor’s motion for new trial should be denied. I conclude that strict foreclosure of debtor’s interest under the March 1, 1978 land contract is available under Nebraska law. Strict foreclosure is available under Nebraska law if the vendee has no equity in the property and strict 702foreclosure would not offend justice and equity. Debtor acknowledged at the hearing on the motion for new trial and amended findings that debtor has no equity in the property. I conclude that the facts raised by the debtor do not demonstrate that strict foreclosure would offend justice and equity under Nebraska law. First, a failure to provide the debtor with the rights associated with foreclosure as a mortgage would not offend justice and equity. The rights to be protected by requiring a land contract to be foreclosed as a mortgage include the vendee’s equity of redemption and the right to a judicial sale. A failure to provide these rights to the vendee, Heartline Farms, Inc. on the facts of this case would not offend justice and equity. See, e.g., In re Coffman, 104 B.R. 958, 963 (Bkrtcy.S.D.Ind.1988). With respect to a vendee’s equity of redemption, a sale of the property could be stayed up to nine (9) months under Nebraska law and the vendee would be provided an opportunity to refinance or purchase the property. However, on the facts of this case, even if this right was provided to the debtor, the debtor would not exercise the right. Debt- or’s purchase price of the property is much greater than the value of the property and there is thus no economic incentive for the debtor to redeem the property. With respect to a judicial sale, such sale provides for judicial review of the purchase price, and the debtor would benefit from any equity in the property upon sale. However, on the facts of this case, the debt owed to the vendor, Stokes Estate is much greater than the value of the property. The entire purchase price would be paid to the vendor, and the debtor does not stand to benefit from any equity. Second, a reduction in the purchase price of the property by 40 percent does not bar strict foreclosure in this case. Despite a reduction in the purchase price, the debtor nevertheless has no equity in the property. Third, the fact that debtor may have made improvements to the real estate would not offend justice and equity upon strict foreclosure. Based on the statements of counsel at the hearing, any improvements made by the debtor were not substantial. However, notwithstanding the improvements, debtor still has no equity in the property. Thus, a forfeiture of equity would not occur upon strict foreclosure. Fourth, at the hearing in this matter the debtor argued that parties have agreed as a matter of contract that termination of the vendee’s interest upon default could take place only by foreclosing the land contract as a mortgage. I conclude that the agreements between the parties do not prohibit strict foreclosure. The original March 1, 1979 land contract states that upon default the vendor “shall be entitled to immediate possession of the premises and to foreclose the contract as provided by law.” A subsequent settlement agreement between the vendor and Charles Raymond, debtor’s predecessor in interest, simply refers to a “foreclosure action.” Although a contractual agreement between parties respecting the manner of foreclosure upon default may control, neither the language in the land contract, nor the language in the settlement agreement requires the land contract to be foreclosed as a mortgage. The language in both instruments is not specific and can be construed to allow either strict foreclosure or foreclosure as a mortgage. Thus, I conclude that the agreements between the parties do not specify the manner in which the vendee’s interest may be foreclosed. Therefore, based on the reasons set forth, I conclude that none of the facts raised by the debtor would cause justice or equity to be offended upon strict foreclosure. The debtor, Heartline Farms, Inc. also asserted that it is entitled to a new trial because the court’s January 16, 1990 opinion is erroneous as a matter of law. The debtor asserted that the opinion fails to follow the policies behind Chapter 12. I conclude that this assertion is insufficient to warrant a new trial. Although a systemic failure of farm and ranch land values may be an appropriate consideration from a legislative point of view, it is not an appropriate fact for this court to consider in the context of this case. Under decisions of the Eighth Circuit Court of Appeals, this court is required to follow state law to *703determine whether a contract is executory for purposes of § 365. See In re Speck, 798 F.2d 279 (8th Cir.1986); Brown v. First Nat’l Bank in Lenox, 844 F.2d 580 (8th Cir.1988). Based on the reasons discussed in the January 16, 1988 opinion and the instant memoranda, I have concluded that the March 1, 1978 land contract may be strictly foreclosed under Nebraska law. Therefore, the land contract is executory for purposes of § 365. Although the debtor’s motion for a new trial should be denied, I conclude that the motion for amended findings should be granted. The court’s January 16, 1990 opinion held that the debtor’s plan valued the property subject to the March 1, 1978 land contract at $144,000.00, and that an appraisal attached to the plan valued the property at $150,000.00. Upon a review of debtor’s plan and the appropriate appraisal attached thereto, I conclude that this finding was incorrect. Debtor’s plan and an appraisal attached to the plan values the property subject to the March 1, 1978 land contract at $260,000.00. Therefore, the court’s finding of fact respecting the value of the real estate should be amended to reflect that debtor’s plan and an appraisal attached thereto value the real estate subject to the land contract at $260,000.00. However, the court’s finding that the debt on the property is approximately $361,-639.30 remains unchanged. Therefore, the amended finding as to the value of the property does not change the court’s conclusion that debtor has no equity in the property. Based on the reasons set forth, it is ordered, 1. Motion for New Trial, for Amended Findings of Fact, and for an Amended Order (Fil. #111) is granted in part and denied in part. The request for new trial is denied. The request for amended findings of fact and an amended order respecting the value of real estate subject to the March 1, 1978 land contract is granted to the extent stated in paragraph 2 below; and 2. The court’s finding of fact in the January 16, 1990 Memorandum Opinion (Fil. # 110) that the debtor’s plan values the real estate subject to the March 1, 1978 land contract at $144,000.00, and that an appraisal attached to the plan values the real estate at $150,000.00 is hereby amended to state that the debtor’s plan and an appraisal attached to the plan value the real estate subject to the March 1, 1978 land contract at $260,000.00.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491151/	AMENDED MEMORANDUM DECISION AND ORDER JON J. CHINEN, Bankruptcy Judge. On June 7, 1989, Edward J. Stanley, the Trustee herein, filed his Final Report and Account of Trustee, Application to Determine Priorities, to Pay Expenses of Administration, and To Make Disbursements to Creditors. However, no date was set for any hearing. On March 13, 1990, the Office of the United States Trustee filed an objection to the Trustee’s Final Report, wherein it particularly objected to the storage fees charged by the Trustee for failure to provide documentation to substantiate the expenses allegedly incurred. On April 16, 1990, the Court set May 10, 1990 as the hearing date for Final Account of Trustee and for Application of Compensation. Then, on April 30, 1990, the Trustee filed his Amended Final Report and Account of Trustee, Application to Determine Priorities, to Pay Expenses of Administration, and to Make Disbursement to Creditors. Among others, the Trustee requested reimbursement for miscellaneous expenses of $200.00, packing, boxing and shipping of 774records expenses of $287.62, and storage expenses of $1,583.27 paid to Ed Stanley Associates by which name he sometimes conducted his business. At the hearing held on May 10, 1990, Leah Bussell, Esq. and Curtis Ching, Esq., represented the Office of the United States Trustee and Susan Tius, Esq., represented the Trustee, who was also present and actively participated in the hearing on his own behalf. Following the evidentiary hearing, the Court took the matter under advisement. Based upon the evidence presented, the records in the file and arguments of counsel, the Court renders this Memorandum Decision. At the hearing, the Trustee testified that he was charging for storage only at the rate that he was being charged. He claimed that the $2.31 per square foot for storage charges was the amount being charged by his landlord. To support his claim, the Trustee referred to alleged statements from Waikiki Marina Hotel for storage. And, the Trustee stated that such statements were never delivered by mail or in person but were always slipped under the door of his office. The Office Rental Agreement executed on November 25, 1986 by Waikiki Marina Hotel, Inc. and Ed Stanley Associates shows that the rent at the outset was $1.00 per square foot and, after three months, was $1.15 per square foot. And, James L. Walter, the vice-president and Manager of Waikiki Marina Hotel testified that Waikiki Marina Hotel never used or issued the type of statement that the Trustee claimed was placed under the door of his office. The Court finds that the statements allegedly placed under the door of the Trustee’s Office were neither prepared by Waikiki Marina Hotel nor delivered by it to Stanley associates. Instead, the Court finds that the statements were fabricated to support the claim for storage charges. The burden is on the Trustee to prove that his request for reimbursement of expenses is reasonable. It is not for the Court to expend time in justifying any expense for the Trustee. Because humans do err, when an individual makes an error in his report, the Court will accept an amended report. But, when an individual is not candid, then the Court may impose sanctions. An officer of the Court must at all times maintain the highest of standard. And, a Trustee is an officer of the Court. The Office Rental Agreement shows that the maximum rent charged by Waikiki Marina Hotel to Ed Stanley Associates was $1.15 per square foot. However, the manufactured statements from Waikiki Marina Hotel to Stanley Associates show a charge of $1.50 per square foot. And, the statements from Stanley Associates to Debtor show $2.31 per cubic foot. The Trustee is using his dba Stanley Associates to make a profit for himself at the expense of the estate. This is a clear conflict on the part of the Trustee, as more fully explained hereinafter. The Court finds that the Trustee has not been candid with the Court and the Office of the United States Trustee. Not only in this but in other cases, the Trustee insisted that, in seeking reimbursement for storage charges, he was only asking for the amount that he was being charged. However, the evidence shows otherwise. In In re Central Pacific Boiler & Piping, Ltd., 88 B.R. 277 (Bkrtcy.D.Haw.1988), in a case involving the same Trustee, this Court stated at page 278: The Chapter 7 trustee may be compensated or reimbursed for expenses that are actually and reasonably incurred by the Trustee. In re Thacker, 48 B.R. 161 (Bankr.N.D.Ill.E.D.1985). However, the documentation of the expenses must be adequate and sufficiently detailed to enable the Court to render an independent decision. Matter of Perez Hernandez, 73 B.R. 329 (Bankr.D.Puerto Rico 1987).... The Court cautions the Trustee that, as an officer of the Court, he must avoid a conflict of interest. As the 9th Circuit Court so aptly stated in York International Building, Inc. v. Chaney, 527 F.2d 1061 (9th Cir.1976), “a trustee cannot serve two masters.” 775In the instant case, on the one hand, as owner of Edward Stanley & Associates, the Trustee is interested in making a profit for himself. On the other hand, as Trustee, he has a sworn obligation and duty to keep the administrative expenses of the estate at a minimum. Where there is a conflict of interest, the Court may deny all compensation or reimbursement. For his conflict of interest and for not being candid, the Court denies the Trustee’s request for compensation and reimbursement for storage charges. In addition, if the Trustee has been previously paid $2.31 per square foot for storage charges, then he is hereby ORDERED to refund to the estate such payment forthwith. The Court finds the fees requested by the attorney for the Trustee to be reasonable. With the adjustment made in the proposed distribution based on this Court’s decision herein, the Court approves the proposed distribution as amended. SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491152/	ORDER JOHN L. PETERSON, Bankruptcy Judge. In this Chapter 12 case, secured creditors Lasar et al. (Lasar) have filed a Motion under Section 365 of the Bankruptcy Code to require the Debtors to Assume or Reject an Executory Contract. The issue presented upon the Briefs filed by the parties is whether a Contract for Deed for the sale and purchase of Debtor’s farm is an exec-utory contract under § 365 of the Code. The Contract for Deed was executed April 11, 1978, providing for payment by the Debtor to the sellers of $300,200.00, with a down payment of $75,050.00, and annual installments of $20,644.00 at 7%% interest until March 31, 2004, when the 784final balance became due. The contract reserved mineral interests in the Seller, together with access to explore and recover such minerals. According to Lasar, two provisions of the contract render it exec-utory, to-wit: “SURFACE DAMAGES DUE TO MINERAL EXPLORATION. Seller agrees to indemnify or compensate Purchaser for any surface damages caused by any drilling operations conducted upon the above described property by any lease or assignee of Seller engaged for the purpose of exploring for and recovering any oil, gas, coal, hydrocarbons, or any and all other minerals located in and under said property. SUBORDINATION. On or after January 1, 1991, Seller agrees to subordinate Seller’s interests in this contract in and to the security being provided by Purchaser in favor of the lender of any sum of money loaned or to be loaned to the Purchaser for Purchaser’s obligations, but in no event in excess of One Hundred Thousand and no/100 Dollars ($100,-000.00).” The deeds were deposited in escrow, and await delivery upon final payment. No exploration for minerals has been made by the Seller. The payments went into default, with $201,000.00 due on the contract. Under the proposed Chapter 12 Plan, Debt- or has valued the Lasar property at $112,-000.00, and proposes to pay that sum over 20 years in annual installments of $13,-155.00 at 10% interest. In re Henke, 84 B.R. 693, 698 (Bankr.Mont.1988) following court decisions from the Ninth Circuit holds citing Griffel v. Wegner (In re Wegner), 839 F.2d 533, 5 Mont.B.R. 305 (9th Cir.1988): “ ‘Whether a contract is executory within the meaning of the Bankruptcy Code is a question of federal law. Benevides v. Alexander, (In re Alexander), 670 F.2d 885, 888 (9th Cir.1982). Although the code does not define “executory contract”, Courts have generally defined such a contract as one which performance is due to some extent on both sides. NLRB v. Bildisco & Bildisco, 465 U.S. 513, 522 N.6 [104 S.Ct. 1188, 1194 n. 6, 79 L.Ed.2d 482] (1984). Also, in executory contracts the obligations of both parties are so far unperformed that failure of either party to complete performance would constitute a material breach and thus excuse the performance of the other. Pacific Express, Inc. v. Teknekron Infoswitch Corp., (In re Pacific Express, Inc.), 780 F.2d 1482, 1487 (9th Cir.1986). The question of the legal consequences of one parties failure to perform its remaining obligations under a contract and whether one of the parties’ failure to perform its remaining obligations would give rise to a material breach is an issue of state contract law. Hall v. Perry (In re Cochise College Park, Inc.), 703 F.2d 1339, 1348 N. 4 (9th Cir.1983).’ ” Id. at 536. See also, In re Aslan, 909 F.2d 367 (9th Cir.1990), adopting the Alexander case definition on executory contracts. It seems apparent to the Court that both provisions of the contract cited above are covenants, and if brought into play and breached by the Seller, would not excuse performance under the contract of the Buyer. Indeed, at the date of the Chapter 12 Petition, neither provision was unperformed. In other words, the failure of Seller to complete performance would only result in an action for damages as to the mineral reservation clause or an action for specific performance as to the subordination clause, but would, in no event, excuse the Buyer from making further payments under the contract. Moreover, both provisions call for happening of future events, neither of which have yet occurred. The subordination clause lies squarely in the discretion of the Buyer, and even if triggered, as I read the clause, the $100,000.00 loan would have to be paid over to the Seller “for purchaser’s obligations” under the contract. Likewise, there is no mandatory duty of Seller under the contract to explore for minerals. But if the Seller, in its discretion, elects to do so in the future, and surface damage does occur, the Seller has, by the damage clause, contractually obligated itself to damages, which does not excuse any performance by the Buyer un785der the contract. Under the Countryman definition of executory contract, Countryman, Executory Contracts in Bankruptcy: Part I, 57 Minn.L.R. 439 (1973); Part II, 58 Minn.L.Rev. 479 (1974)1, expressly approved by Wegner, supra, Alexander, supra, Pacific Express, supra and Aslan, supra, the Seller’s duty under the subordination and surface damage clauses could never rise, and have not risen, to the level of being material to a breach of the entire contract which would excuse Debtor’s performance. In accordance with Wegner, supra, one must look to state law as to the “legal consequences of one parties failure to perform its remaining obligations under a contract * * .” The Montana law on this matter is well-settled and stated in Atlantic Pacific Oil Co. v. Gas Development Co., 105 Mont. 1, 69 P.2d 750 (1937), where the Court, following Montana statutory law, discussed in depth the difference between conditions precedent, conditions subsequent, and covenants. The court explained: “A ‘condition precedent’ is one that is to be performed before the agreement becomes effective and which calls for the happening of some event or the performance of some act after the terms of the agreement have been agreed on, before the contract shall be binding on the parties. (citing cases). [[Image here]] * * ‘Condition subsequent’ operates upon the estate already created and vested, rendering it liable to be defeated if condition is broken, (citing case). * * * * * * Conditions must be strictly construed, (citing cases). When in doubt whether a clause in a deed is a condition precedent, condition subsequent, or a covenant, courts will construe it as a covenant, (citing cases). [[Image here]] A ‘covenant’ is an agreement between parties to do or not to do a particular act. (citing eases). A ‘condition’ differs from a covenant. ‘A condition is created by mutual agreement of the parties and is binding on both; whereas a covenant is an agreement of the covenantor only. * * * The difference between a covenant and a condition relates largely to the remedy. If the breach of the agreement pertains to the validity of the instrument or is a ground of forfeiture, it is a condition; but, if the remedy for a breach is merely an action at law for damages, then the agreement is a covenant. The legal responsibility for non-fulfillment of a covenant is that the party violating it must respond in damages. The consequences of non-fulfillment of a condition is a forfeiture of the estate. 12 C.J. p. 402.’ ” Id. 69 P.2d 754-757. The two provisions relied upon by Lasar are clearly covenants in the contract, the breach of which could not defeat the estate or title of the Debtor through forfeiture, and excuse Debtor’s performance to pay. As an example, Debtor’s obligation to pay is a condition subsequent, breach of which could cause forfeiture of the entire contract and Debtor’s interest in the property. In sum, each clause provides independent remedies to the Debtor, which would be triggered by Seller’s breach only in the event of each future contingency happening, but are not material to the continued existence of the contract as a whole. I hold the Contract for Deed is not exec-utory. IT IS ORDERED Lasar’s Motion to assume or reject the executory contract is denied. . For a thorough discussion of case authorities dealing with land installment contracts under § 365, the Countryman definition and In re Reh-bein, 60 B.R. 436 (9th Cir. BAP 1986), see In re McDaniel, 89 B.R. 861, p. 869-876 (Bankr.E.D.Wash.1988).	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483658/	[Cite as State v. Kessler Scott, 2022-Ohio-4054.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT LAKE COUNTY STATE OF OHIO, CASE NO. 2022-L-018 Plaintiff-Appellee, Criminal Appeal from the - vs - Court of Common Pleas BRANDON J. KESSLER SCOTT, Trial Court No. 2021 CR 001215 Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed Charles E. Coulson, Lake County Prosecutor; Teri R. Daniel and Haley L. Gold, Assistant Prosecutors, Lake County Administration Building, 105 Main Street, P.O. Box 490, Painesville, OH 44077 (For Plaintiff-Appellee). Adam Parker, The Goldberg Law Firm, 323 West Lakeside Avenue, Suite 450, Cleveland, OH 44113 (For Defendant-Appellant). MARY JANE TRAPP, J. {¶1} Appellant, Brandon J. Kessler Scott (“Mr. Kessler Scott”), appeals from the judgment of the Lake County Court of Common Pleas, which sentenced him to two years of community control after he was found guilty by a jury of possession of a fentanyl-related compound. {¶2} Mr. Kessler Scott raises three assignments of error on appeal, contending that (1) the evidence was insufficient to sustain his conviction because there was no evidence of constructive possession; (2) the manifest weight of the evidence does not support the verdict because the testimony of his alleged accomplice, Andrew Combs (“Mr. Combs”), was the only evidence linking him to the crime, and Mr. Combs was not credible; and (3) the trial court committed plain error by instructing the jury on flight as consciousness of guilt because he simply returned home after fleeing the traffic stop that initiated the instant case, and the police easily located him the following day. {¶3} After a careful review of the record and pertinent law, we overrule Mr. Kessler Scott’s assignments of error, finding them to be without merit. Firstly, the state introduced sufficient evidence from which a jury could find beyond a reasonable doubt that Mr. Kessler Scott was guilty of possession, i.e., both he and Mr. Combs admitted to using the drugs, the drugs were stored in his container, and the drugs were found in close proximity to his person (the center console of Mr. Combs’ grandmother’s vehicle). {¶4} Secondly, the manifest weight of the evidence more than supports the jury’s verdict. The jury was free to believe all, part, or none of Mr. Combs’ testimony, and the jury was aware that Mr. Combs purchased the drugs, pleaded guilty to possession of the same drugs in a separate case, and admitted to initially lying to the police during the traffic stop. Further, Mr. Combs’ testimony was not the only evidence linking Mr. Kessler Scott to the crime. The state introduced testimony from the officers on the scene and from the police interview once Mr. Kessler Scott was in custody, a forensic analyst, photographs of the drugs and the container, as well as an aerial map detailing the officers’ search for Mr. Kessler Scott after he fled from the traffic stop. {¶5} Thirdly, the trial court did not commit plain error by instructing the jury on flight as consciousness of guilt. The state produced sufficient evidence to warrant the instruction, and the trial court provided a neutral instruction, i.e., the jury was instructed it “may” consider whether Mr. Kessler Scott’s conduct in fleeing from the traffic stop was 2 Case No. 2022-L-018 motivated by consciousness of guilt for possession of drugs. The jury was aware that Mr. Kessler Scott had an outstanding warrant in an unrelated case. {¶6} Finding Mr. Kessler Scott’s assignments of error to be without merit, the judgment of the Lake County Court of Common Pleas is affirmed. Substantive and Procedural History {¶7} In late summer 2021, a deputy from the Lake County Sheriff’s Office was on patrol when he observed a vehicle with an expired registration tag. He initiated a traffic stop, and as the 2016 Chrysler pulled over and shifted into park, the passenger, later identified as Mr. Kessler Scott, exited the vehicle and fled. The deputy reported to dispatch that Mr. Kessler Scott was running westbound while he detained Mr. Combs, the driver of the vehicle and Mr. Kessler Scott’s long-time acquaintance and alleged accomplice. {¶8} At least four officers attempted to find Mr. Kessler Scott, conducting a search that spanned the surrounding area, including several barns, a house, and a wooded area, as well as setting up a perimeter. After over an hour of searching, however, the officers ended the search and returned to the vehicle. {¶9} Mr. Combs identified Mr. Kessler Scott for the officers and gave them permission to search his grandmother’s vehicle. In the center console, the officers found a white box with two envelopes inside, which Mr. Combs disclosed contained fentanyl. A forensic analyst from the Lake County Crime Laboratory later confirmed the white powder in the envelopes was fentanyl. {¶10} Following a tip from Facebook, the officers were able to locate Mr. Kessler Scott at Mr. Combs’ residence the next day. He was living in the garage of Mr. Combs’ home, which Mr. Combs shared with his grandmother. The officers found Mr. Kessler 3 Case No. 2022-L-018 Scott inside a barn just south of the house, and he was placed under arrest for an outstanding warrant in an unrelated case. {¶11} During the police interview, Mr. Kessler Scott disclosed to the officers that he and Mr. Combs had driven to Cleveland to purchase the fentanyl. On their way home, they stopped to snort some of the drugs. Mr. Kessler Scott identified the drugs as belonging to Mr. Combs. {¶12} Ultimately, both Mr. Combs and Mr. Kessler Scott were charged in separate cases for possession of the drugs. Mr. Combs pleaded guilty in his case while Mr. Kessler Scott’s case was pending. Mr. Kessler Scott was charged with possession of a Schedule I controlled substance, fentanyl, in violation of R.C. 2925.11, a fifth-degree felony. He pleaded not guilty, and the case proceeded to a one-day jury trial. {¶13} The state introduced the testimony of Mr. Combs, two of the officers who were at the scene, one of whom conducted a police interview once Mr. Kessler Scott was taken into custody, and a forensic analyst from the Lake County Crime Laboratory, as well as photographs of the drugs, the container, and an aerial map depicting the officer’s search for Mr. Kessler Scott after he fled Mr. Combs’ vehicle. {¶14} Mr. Combs testified that on the date of the incident, he and Mr. Kessler Scott drove to Cleveland where he purchased 1.2 grams of fentanyl, something they did “every morning.” They stored the drugs in Mr. Kessler Scott’s container. After snorting it on the side of the road, they purchased some crack. On their return to Lake County, they got “high” at Mr. Combs’ grandmother’s house, and decided to drive to the store, which is when the traffic stop occurred. Mr. Combs consented to a search of the vehicle because he thought Mr. Kessler Scott had taken all of the drugs with him when he fled. Mr. Combs admitted that he initially lied to the police when he told them that he picked up Mr. Kessler 4 Case No. 2022-L-018 Scott on the side of the road. He was “scared” and, knowing that Mr. Kessler Scott had a warrant out for his arrest, did not want the officers to know that Mr. Kessler Scott was staying at his house. {¶15} As relevant to the instant appeal, the trial court overruled defense counsel’s Crim.R. 29 motion challenging the sufficiency of the evidence and the renewed Crim.R. 29 sufficiency of the evidence motion in which defense counsel argued that the state failed to meet its burden of proof. {¶16} Further, the trial court instructed the jury on the impact of flight, explaining: {¶17} “Testimony has been admitted indicating that the defendant fled the scene of the alleged crime. You are instructed that flight alone does not raise a presumption of guilt, but it may tend to indicate the defendant’s consciousness or awareness of guilt. If you find that the facts do not support that the defendant fled the scene of the alleged crime or if you find that some other motive prompted the defendant’s conduct, or if you are unable to decide what the defendant’s motivation was, then you should not consider this evidence for any purpose. However, if you find that the facts support that the defendant engaged in such conduct, and if you decide that the defendant was motivated by a consciousness or awareness of guilt, you may, but are not required to, consider that evidence in deciding whether the defendant is guilty of the crime charged. You alone will determine what weight, if any, to give to this evidence.” {¶18} The jury returned a verdict finding Mr. Kessler Scott guilty of possession of a fentanyl-related compound. Several weeks later, at the sentencing hearing, the trial court sentenced Mr. Kessler Scott to two years of community control, which included 99 days in jail with 39 days of jail-time credit. {¶19} Mr. Kessler Scott raises three assignments of error on appeal: 5 Case No. 2022-L-018 {¶20} “[1.] Appellant’s Conviction is not Supported by Sufficient Evidence. {¶21} “[2.] Appellant’s Conviction was Against the Manifest Weight of the Evidence. {¶22} “[3.] The Trial Court Committed Plain Error in Giving a Jury Instruction on Flight.” Sufficiency of the Evidence {¶23} In his first assignment of error, Mr. Kessler Scott contends the evidence was insufficient to support his conviction for possession of a fentanyl-related compound because there was no evidence he had control over the drugs while he was in Lake County. Specifically, Mr. Kessler Scott contends there was insufficient evidence that he exerted constructive possession, i.e., dominion or control, over the drugs. Rather, the evidence reflected that his alleged accomplice, Mr. Combs, admitted that he purchased the fentanyl and shared it with Mr. Kessler Scott. Mr. Combs also admitted that he placed it in his grandmother’s vehicle. {¶24} “‘“[S]ufficiency” is a term of art meaning that legal standard which is applied to determine whether the case may go to the jury or whether the evidence is legally sufficient to support the jury verdict as a matter of law.’” State v. Thompkins, 78 Ohio St.3d 380, 386, 678 N.E.2d 541 (1997), quoting Black’s Law Dictionary 1433 (6th Ed.1990). “In essence, sufficiency is a test of adequacy.” Id. {¶25} “An appellate court’s function when reviewing the sufficiency of the evidence to support a criminal conviction is to examine the evidence admitted at trial to determine whether such evidence, if believed, would convince the average mind of the defendant’s guilt beyond a reasonable doubt.” State v. Jenks, 61 Ohio St.3d 259, 574 N.E.2d 492 (1991), paragraph two of the syllabus. “The relevant inquiry is whether, after 6 Case No. 2022-L-018 viewing the evidence in a light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime proven beyond a reasonable doubt.” Id. {¶26} When conducting a sufficiency of the evidence analysis, this court is to look at the actual evidence admitted at trial, both admissible and inadmissible. State v. Rose, 11th Dist. Lake No. 2014-L-086, 2015-Ohio-2607, ¶ 34. Further, a claim of insufficient evidence invokes a question of due process, the resolution of which does not allow for a weighing of the evidence. Id. at ¶ 33. {¶27} Mr. Kessler Scott was convicted of one count of possession of a Schedule I controlled substance, a fifth-degree felony, in violation of R.C. 2925.11. {¶28} Pursuant to R.C. 2925.11(A), “[n]o person shall knowingly obtain, possess, or use a controlled substance analog.” Further, “[a] person acts knowingly, regardless of purpose, when the person is aware that the person’s conduct will probably cause a certain result or will probably be of a certain nature. A person has knowledge of circumstances when the person is aware that such circumstances probably exist. When knowledge of the existence of a particular fact is an element of an offense, such knowledge is established if a person subjectively believes that there is a high probability of its existence and fails to make inquiry or acts with a conscious purpose to avoid learning the fact.” R.C. 2901.22(B). “Possess” or “possession” means “having control over a thing or substance, but may not be inferred solely from mere access to the thing or substance through ownership or occupation of the premises upon which the thing or substance is found.” R.C. 2925.01(K). {¶29} “‘Actual possession exists when the circumstances indicate that an individual has or had an item within his immediate physical possession.’” State v. 7 Case No. 2022-L-018 Kingsland, 177 Ohio App.3d 655, 2008-Ohio-4148, 895 N.E.2d 633, ¶ 13 (4th Dist.), quoting State v. Fry, 4th Dist. Jackson No. 03CA26, 2004-Ohio-5747, ¶ 39. “Constructive possession exists when an individual knowingly exercises dominion and control over an object, even though that object may not be within his immediate physical possession.” State v. Hankerson, 70 Ohio St.2d 87, 434 N.E.2d 1362 (1982), syllabus; State v. Brown, 4th Dist. Athens No. 09CA3, 2009-Ohio-5390, ¶ 19. For constructive possession to exist, the state must show that the defendant was conscious of the object’s presence. Hankerson at 91; Kingsland at ¶ 13. Both dominion and control and whether a person was conscious of the object’s presence may be established through circumstantial evidence. Brown at ¶ 19. “Moreover, two or more persons may have joint constructive possession of the same object.” Id. {¶30} As our review of the evidence reveals, the state introduced sufficient evidence from which a jury could find that Mr. Kessler Scott was in constructive possession of the drugs at issue. Mr. Kessler Scott admitted to using the drugs, the drugs were stored in his container, and the drugs were found in the vehicle’s center console between Mr. Combs and Mr. Kessler Scott, readily accessible to both while they were in Lake County. As the Eighth District explained in State v. Trammer, 8th Dist. Cuyahoga No. 85456, 2005-Ohio-3852, where the appellant made a similar argument that the evidence was insufficient because the state failed to prove the drugs belonged to him: “While mere presence in the vicinity of the item is insufficient to justify possession, ready availability of the item and close proximity to it support a finding of constructive possession.” Id. at ¶ 24. In that case, crack cocaine was found between the center console and the passenger’s seat, which the Eighth District determined was “obviously within control of the passenger” and the appellant (the driver). Id. at ¶ 25. Recognizing 8 Case No. 2022-L-018 that “‘[j]oint possession exists when two or more persons together have the ability to control an object exclusive of others,’” the appellant and the passenger were found to jointly possess the drugs. Id., quoting State v. Alicea, 8th Dist. Cuyahoga No. 78940, 2001 WL 1243944, 6 (Oct. 18, 2001). {¶31} Similarly, in State v. Tackett, 11th Dist. Ashtabula No. 2018-A-0052, 2019- Ohio-5188, we found there was sufficient evidence that the passenger of a vehicle had constructive joint possession of methamphetamine where the drugs were found in the backseat of the vehicle at the time of the traffic stop, readily available and in close proximity to the passenger seat. Id. at ¶ 42. Further, the appellant-passenger was observed twisting and turning in her seat, which supported an inference that she was actually exercising dominion and control over items in the vehicle. Id. Because the driver was also able to exercise dominion and control over the drugs, the evidence further supported an inference of joint possession. Id. See also State v. Jones, 11th Dist. Ashtabula No. 2016-A-0017, 2017-Ohio-251, ¶ 27-28 (sufficient evidence of constructive possession existed where drugs were found under passenger seat). {¶32} This is not a case where the drugs were simply in Mr. Kessler Scott’s vicinity or where he lacked knowledge that drugs were in the vehicle. See, e.g., State v. Criswell, 4th Dist. Scioto No. 13CA3588, 2014-Ohio-3941, ¶ 26 (the state failed to introduce sufficient evidence that the appellant had knowledge there was crack cocaine in the van; thus, it failed to establish constructive possession); State v. Mitchell, 190 Ohio App.3d 676, 2010-Ohio-5430, 943 N.E.2d 1072, ¶ 6 (1st Dist.) (where there was no evidence connecting the appellant-passenger to the drugs located in the vehicle other than his proximity, the evidence was insufficient to establish constructive possession). Rather, there are multiple factors from which inferences can be drawn that the drugs were in his 9 Case No. 2022-L-018 constructive, joint possession, i.e., both he and Mr. Combs admitted to using the drugs, the drugs were stored in his container, and the drugs were in close proximity to his person in the vehicle, readily available and in his vicinity. {¶33} Because we find there was sufficient evidence from which a jury could find, beyond a reasonable doubt, that Mr. Kessler Scott constructively and jointly possessed the fentanyl while he was in Lake County, his first assignment of error is overruled. Manifest Weight of Evidence {¶34} In his second assignment of error, Mr. Kessler Scott contends his conviction is against the manifest weight of the evidence since the testimony of Mr. Combs was the only testimony linking him to the fentanyl. Further, Mr. Combs testified that he purchased the drugs and pleaded guilty to possession of the drugs in a separate case. {¶35} “[W]eight of the evidence addresses the evidence’s effect of inducing belief.” State v. Wilson, 113 Ohio St.3d 382, 2007-Ohio-2202, 865 N.E.2d 1264, ¶ 25. “In other words, a reviewing court asks whose evidence is more persuasive—the state’s or the defendant’s?” Id. {¶36} “‘The court, reviewing the entire record, weighs the evidence and all reasonable inferences, considers the credibility of witnesses and determines whether in resolving conflicts in the evidence, the jury clearly lost its way and created such a manifest miscarriage of justice that the conviction must be reversed and a new trial ordered.’” Thompkins, supra, at 387, quoting State v. Martin, 20 Ohio App.3d 172, 175, 485 N.E.2d 717 (1st Dist.1983). {¶37} “When a court of appeals reverses a judgment of a trial court on the basis that the verdict is against the weight of the evidence, the appellate court sits as a ‘thirteenth juror’ and disagrees with the factfinder’s resolution of the conflicting testimony.” 10 Case No. 2022-L-018 Id., quoting Tibbs v. Florida, 457 U.S. 31, 42, 102 S.Ct. 2211, 72 L.Ed.2d 652 (1982). “‘The discretionary power to grant a new trial should be exercised only in the exceptional case in which the evidence weighs heavily against the conviction.’” Id., quoting Martin at 175. {¶38} Firstly, whether Mr. Combs’ testimony was credible was for the jury to decide. The jury was aware that Mr. Combs purchased the drugs, that he pleaded guilty to possession of the same drugs, and that he admitted to lying to the police. As we have stated in regard to similar arguments in the past, this court is not in a position to view the witnesses who testified below, observe their demeanor, gestures, and voice inflections, and use those observations in weighing the credibility of the proffered testimony. State v. Thompson, 2016-Ohio-7154, 71 N.E.3d 1219, ¶ 7 (11th Dist.). Therefore, in weighing the evidence submitted at a criminal trial, an appellate court must give substantial deference to the factfinder’s determinations of credibility. Id. The trier of facts is free to believe all, part, or none of the testimony of each witness appearing before it. State v. Masters, 11th Dist. Lake No. 2019-L-037, 2020-Ohio-864, ¶ 19. {¶39} Secondly, Mr. Combs’ testimony was not the only evidence linking Mr. Kessler Scott to the crime. Rather, the state introduced the testimony of two of the officers who were at the scene, one of whom conducted a police interview once Mr. Kessler Scott was taken into custody, and a forensic analyst from the Lake County Crime Laboratory, as well as photographs of the drugs, the container, and an aerial map depicting the officer’s search for Mr. Kessler Scott after he fled Mr. Combs’ vehicle. {¶40} The jury was free to believe the state’s version of events, which indicated that Mr. Kessler Scott drove with Mr. Combs to purchase fentanyl in Cleveland. They stopped to use the drugs and “get high” on the side of the road before returning to Lake 11 Case No. 2022-L-018 County. A traffic stop was initiated on their way to the store after they spent a brief period of time at home, and upon searching the vehicle, the officers found fentanyl stored in Mr. Kessler Scott’s container in the center console, readily available to Mr. Kessler Scott and Mr. Combs. Mr. Combs testified to Mr. Kessler Scott’s use of the drugs, and once in police custody Mr. Kessler Scott admitted that he used the fentanyl, although he claimed the drugs belonged to Mr. Combs. {¶41} Because we find the manifest weight of the evidence weighs heavily in support of the jury’s verdict, and there is nothing to indicate the jury lost its way, Mr. Kessler Scott’s second assignment of error is overruled. Jury Instruction on Flight {¶42} Lastly, Mr. Kessler Scott contends the trial court committed plain error by instructing the jury on flight as consciousness of guilt. He contends this instruction was erroneous because he did not flee but rather returned to his home where he was easily found by the officers the following day. {¶43} Requested jury instructions should be given if they are (1) correct statements of the applicable law, (2) relevant to the facts of the case, and (3) not included in the general charge to the jury. State v. McEndree, 2020-Ohio-4526, 159 N.E.3d 311, ¶ 63 (11th Dist.). {¶44} This court generally reviews jury instructions under an abuse of discretion standard so long as the instruction is a correct statement of law. If the instruction was not a correct statement of law, appellate courts review the instruction de novo to “‘determine whether the incorrect jury instruction probably misled the jury in a matter materially affecting the complaining party’s substantial rights.’” State v. Kovacic, 11th Dist. Lake No. 2010-L-018, 2010-Ohio-5663, ¶ 17, quoting Humphrey v. Belmont, 7th Dist. Belmont 12 Case No. 2022-L-018 No. 95-BA-51, 1998 WL 670669, 2 (Sept. 24, 1998). Because defense counsel failed to object at trial, however, we are limited to reviewing for plain error. See State v. Gordon, 11th Dist. Ashtabula No. 92-A-1696, 1996 WL 200564, 1 (Mar. 22, 1996). “An erroneous jury instruction does not constitute plain error unless, but for the error, the outcome of the trial clearly would have been otherwise.” State v. Cunningham, 105 Ohio St.3d 197, 2004- Ohio-7007, 824 N.E.2d 504, ¶ 56. {¶45} “[A]n accused’s ‘“flight, escape from custody, resistance to arrest, concealment, assumption of a false name, and related conduct, are admissible as evidence of consciousness of guilt, and thus of guilt itself.”’” State v. Hand, 107 Ohio St.3d 378, 2006-Ohio-18, 840 N.E.2d 151, ¶ 167, quoting State v. Eaton, 19 Ohio St.2d 145, 160, 249 N.E.2d 897 (1969), quoting 2 Wigmore, Evidence, Section 276, at 111 (3d Ed.1979). “Flight is more than merely leaving the scene of the crime—it would be unrealistic to expect persons who commit crimes to remain on the scene for ready apprehension.” State v. Ramos, 8th Dist. Cuyahoga No. 103596, 2016-Ohio-7685, ¶ 28. In this regard, “‘[f]light means some escape or affirmative attempt to avoid apprehension.’” State v. Robinson, 10th Dist. Franklin No. 17AP-853, 2019-Ohio-558, ¶ 29, quoting State v. Robinson, 1st Dist. Hamilton No. C-060434, 2007-Ohio-2388, ¶ 19. Flight requires the accused to appreciate that he or she has been identified as a person of interest in a criminal offense and is taking active measures to avoid being found. Ramos at ¶ 28. The jury may infer that such circumstances demonstrate that the accused is avoiding the police only because he or she knows he or she is guilty and wishes to avoid the inevitable consequences of his or her crime. Id. {¶46} As we explained in State v. Norwood, 11th Dist. Lake Nos. 96-L-089 & 96- L-090, 1997 WL 663423 (Sept. 30, 1997), “‘The probative value of flight as circumstantial 13 Case No. 2022-L-018 evidence of guilt depends upon the degree of confidence with which four inferences can be drawn: (1) from the defendant’s behavior to flight; (2) from flight to consciousness of guilt; (3) from consciousness of guilt to consciousness of guilt concerning the crime charged; and (4) from consciousness of guilt concerning the crime charged to actual guilt of the crime charged.’” Id. at 4, quoting United States v. Myers, 550 F.2d 1036, 1049 (5th Cir.1977). A mere departure from the scene of a crime, however, is not to be confused with deliberate flight from the area in which the suspect is normally to be found. Id. at 5. {¶47} As our review of the evidence indicates, Mr. Kessler Scott fled as soon as the traffic stop was initiated. The deputy testified that as he left his patrol vehicle, “the passenger door opened up and I observed a male exit the passenger door, look back at me, and then run across Fairport Nursery Road westbound.” A search ensued, with at least four officers pursuing Mr. Kessler Scott for over an hour. Thus, this was not a “mere departure from the scene of a crime,” but an individual who deliberately fled from a traffic stop before the officer had an opportunity to approach the vehicle. He did not, as he contends, simply leave the scene of a crime and return home. He fled a traffic stop before a crime was even suspected. Under these circumstances, it cannot be said that the evidence does not warrant such an instruction. {¶48} Whether Mr. Kessler Scott’s flight was consciousness of guilt for the possession of the fentanyl or for the outstanding warrant in an unrelated case was for the jury to decide, since the jury was instructed that it “may” consider Mr. Kessler Scott’s flight as consciousness of guilt for possession, and the jury was aware of the outstanding warrant. As the Second District explained in State v. White, 2015-Ohio-3512, 37 N.E.3d 1271 (2d Dist.): 14 Case No. 2022-L-018 {¶49} “Ultimately, though, the flight instruction is all but innocuous. It explains the limited use of the flight evidence and clearly says that the jury may consider [the appellant’s] flight only if it finds that he was ‘motivated by a consciousness or awareness of guilt.’ And even if the jury finds that this motivated him, the instruction says that it still is not required to consider the flight evidence. We do not believe that giving the jury this particular instruction could have affected the outcome of the trial.” Id. at ¶ 51. {¶50} Mr. Kessler Scott cites to Norwood in support of his argument, which we find factually distinguishable from the instant case. In that case, the appellant entered the victim’s apartment on three separate occasions and inflicted varying degrees of physical harm upon her. Id. at 6. On the first occasion, the appellant “left out of the building and ran into another building.” Id. at 5. On the second, the appellant was arrested in the victim’s apartment, and on the third, the appellant left with his sister and was dropped off at his mother’s home instead of his father’s. Id. at 6. We determined there was no evidence of flight on each occasion. Thus, the jury instruction was improper, inappropriate, and for the third occasion, insufficient because the appellant did not flee “to a situs where he could not have been located.” Id. at *6. We determined, however, that any error in giving the instruction was harmless beyond a reasonable doubt due to the overwhelming evidence of guilt against the appellant. Id. {¶51} The circumstances presented in Norwood are markedly different from the instant case, where Mr. Kessler Scott fled from a traffic stop before the officer even approached the vehicle. {¶52} In sum, the state produced sufficient evidence to warrant the consciousness of guilt instruction, and the trial court provided a neutral instruction that the jury “may” 15 Case No. 2022-L-018 consider whether Mr. Kessler Scott’s conduct was motivated by a consciousness of guilt for the instant crime. {¶53} Mr. Kessler Scott’s third assignment of error is overruled. {¶54} The judgment of the Lake County Court of Common Pleas is affirmed. THOMAS R. WRIGHT, P.J., CYNTHIA WESTCOTT RICE, J., concur. 16 Case No. 2022-L-018	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483666/	IN THE SUPREME COURT OF PENNSYLVANIA IN RE: : NO. 540 : REAPPOINTMENT TO THE CRIMINAL : CRIMINAL PROCEDURAL RULES PROCEDURAL RULES COMMITTEE : DOCKET : ORDER PER CURIAM AND NOW, this 14th day of November, 2022, David R. Crowley, Esquire, Centre County, is hereby reappointed as a member of the Criminal Procedural Rules Committee for a term expiring January 1, 2029.	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483667/	IN THE SUPREME COURT OF PENNSYLVANIA IN RE: : NO. 541 : ORDER AMENDING PENNSYLVANIA : CRIMINAL PROCEDURAL RULES DOCKET RULE OF CRIMINAL PROCEDURE : 131 : ORDER PER CURIAM AND NOW, this 14th day of November, 2022, the proposal having been submitted without publication pursuant to Pa.R.J.A. 103(a): It is Ordered pursuant to Article V, Section 10 of the Constitution of Pennsylvania that Rule 131 of the Pennsylvania Rules of Criminal Procedure is amended in the attached form. This Order shall be processed in accordance with Pa.R.J.A. 103(b), and shall be effective in 30 days. Additions to the rule are shown in bold and are underlined. Deletions from the rule are shown in bold and brackets.	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483669/	IN THE SUPREME COURT OF PENNSYLVANIA IN RE: : NO. 539 : DESIGNATION OF CHAIR AND : CRIMINAL PROCEDURAL RULES DOCKET VICE-CHAIR OF THE CRIMINAL : PROCEDURAL RULES COMMITTEE : ORDER PER CURIAM AND NOW, this 14th day of November, 2022, the Honorable Stefanie J. Salavantis is hereby designated as Chair, and David R. Crowley, Esquire, is designated as Vice- Chair, of the Criminal Procedural Rules Committee, commencing March 1, 2023.	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483665/	[Cite as Antonious v. Selvaggio, 2022-Ohio-4056.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT LAKE COUNTY NASHAAT ANTONIOUS, et al., CASE NO. 2022-L-047 Plaintiffs, Civil Appeal from the - vs - Court of Common Pleas BRANDON SELVAGGIO, et al., Trial Court No. 2016 CF 001567 Defendant-Appellant, - vs - TAX EASE OHIO, LLC, US BANK AS CUSTODIAN, et al., Defendant-Appellee. OPINION Decided: November 14, 2022 Judgment: Affirmed Richard D. Eisenberg, P.O. Box 43083, Richmond Heights, OH 44143 (For Defendant- Appellant). Daniel A. Friedlander, Weltman, Weinberg & Reis Co., LPA, 965 Keynote Circle, Cleveland, OH 44131 (For Defendant-Appellee). MARY JANE TRAPP, J. {¶1} Appellant, Brandon Selvaggio (“Mr. Selvaggio”), appeals the judgment of the Lake County Court of Common Pleas granting summary judgment to appellee, Tax Ease Ohio, LLC, US Bank as Custodian (“Tax Ease”), on its cross-claim for the foreclosure of tax liens. {¶2} Mr. Selvaggio asserts one assignment of error, contending that the trial court erred by granting Tax Ease’s motion for summary judgment because there were genuine issues of material fact. Specifically, Mr. Selvaggio contends that the tax certificates upon which Tax Ease sought to foreclose are void because the county treasurer failed to send him written notice of their sale pursuant to R.C. 5721.33(K). {¶3} After a careful review of the record and pertinent law, we find that Mr. Selvaggio’s assignment of error lacks merit. The county treasurer’s compliance with R.C. 5721.33(K) was not an issue of “material fact” precluding summary judgment in favor of Tax Ease. Even if the county treasurer failed to comply with R.C. 5721.33(K), such noncompliance would not create a legal basis upon which to invalidate the tax certificates. {¶4} Thus, we affirm the judgment of the Lake County Court of Common Pleas. Substantive and Procedural History {¶5} The underlying matter arose in 2016 when the plaintiffs, Nashaat Antonious and JERMC Management Corp., filed a complaint against Mr. Selvaggio and others in the Lake County Court of Common Pleas seeking to foreclose on a judgment lien encumbering three parcels of real property in Mentor, Ohio (“the Mentor properties”). {¶6} Tax Ease was a named defendant as the holder of recorded tax certificates on the Mentor properties. Tax Ease also held two recorded tax certificates in relation to Mr. Selvaggio’s real property at 10640 Bayshire Trail, Willoughby, Ohio (“the Bayshire property”). Tax Ease purchased the tax certificates from the Lake County Treasurer in 2015 (certificate nos. 15-204 and 15-431). During the pendency of the plaintiffs’ foreclosure action, Tax Ease purchased two additional tax certificates from the county treasurer in relation to the Bayshire property (certificate nos. 16-276 and 17-173). 2 Case No. 2022-L-047 {¶7} In 2018, with leave of court, Tax Ease filed cross-claims to foreclose on its tax certificates encumbering the Mentor properties and the Bayshire property. Following the litigation of issues not relevant to this appeal, Tax Ease voluntarily dismissed its cross- claim involving the Mentor properties. In 2022, with leave of court, Tax Ease filed a motion for summary judgment in relation to the Bayshire property. {¶8} Mr. Selvaggio filed a brief in opposition, contending, in relevant part, that the county treasurer failed to comply with R.C. 5721.33(K), which required it to send written notice of the tax certificate sales to Tax Ease, rendering the tax certificates void and unenforceable. In support, he attached an affidavit averring that he resided at the Bayshire property at all relevant times; that he never received notice that the certificates had been sold; and that the case file at the clerk of court’s office does not contain a signed return receipt card. {¶9} The trial court filed a judgment entry and decree of foreclosure granting Tax Ease’s motion for summary judgment. The trial court determined that Tax Ease was entitled to the foreclosure of its lien interests and was permitted to file a praecipe for an order of sale. {¶10} Mr. Selvaggio appealed and presents the following assignment of error: {¶11} “The Trial Court committed prejudicial error in granting Crossclaim Appellee, Tax Ease Ohio, LLC’s Renewed Motion for Summary Judgment, when there remained material issues of fact to be tried.” Standard of Review {¶12} We review a trial court’s order granting summary judgment de novo. Sabo v. Zimmerman, 11th Dist. Ashtabula No. 2012-A-0005, 2012-Ohio-4763, ¶ 9. “A de novo review requires the appellate court to conduct an independent review of the evidence 3 Case No. 2022-L-047 before the trial court without deference to the trial court’s decision.” Peer v. Sayers, 11th Dist. Trumbull No. 2011-T-0014, 2011-Ohio-5439, ¶ 27. {¶13} Summary judgment is proper when (1) no genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence, viewing that evidence most strongly in favor of the nonmoving party, that reasonable minds can come to but one conclusion, which is adverse to the nonmoving party. Civ.R. 56(C). The initial burden is on the moving party to demonstrate that no issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). If the movant meets this burden, the burden shifts to the nonmoving party to establish that a genuine issue of material fact exists for trial. Id. at 293. {¶14} However, not every factual dispute precludes summary judgment. Oliveri v. OsteoStrong, 2021-Ohio-1694, 171 N.E.3d 386, ¶ 15 (11th Dist.). Rather, “‘[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.’” Turner v. Turner, 67 Ohio St.3d 337, 340, 617 N.E.2d 1123 (1993), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Law and Analysis {¶15} In his sole assignment of error, Mr. Selvaggio contends that the trial court erred in granting summary judgment to Tax Ease because there were genuine issues of material fact for trial. Specifically, he argues that the tax certificates encumbering the Bayshire property are “void ab initio” because the county treasurer did not send him written notice of their sale pursuant to R.C. 5721.33(K). 4 Case No. 2022-L-047 {¶16} “‘Ohio’s tax certificate legislation, R.C. 5721.30 through 5721.43, allows a county government to sell tax certificates to private investors. A tax certificate entitles the certificate holder to the first lien on the real property. A property owner can redeem the certificate and remove the lien by paying the certificate holder the purchase price plus interest, penalties, and costs. If the property owner fails to redeem the certificates, the tax certificate holder may initiate foreclosure proceedings on the real property after complying with certain statutory requirements.’” (Citations omitted.) PNC Bank Natl. Assn. v. Graham, 11th Dist. Lake No. 2021-L-076, 2022-Ohio-888, ¶ 6, quoting Woods Cove II, L.L.C. v. Am. Guaranteed Mgt. Co., L.L.C., 8th Dist. Cuyahoga No. 103652, 2016- Ohio-3177, ¶ 2. {¶17} To demonstrate its entitlement to summary judgment, Tax Ease was required to submit evidence to show (1) the purchase of the tax liens, (2) the amounts due, (3) the statutory notice of intent to foreclose, and (4) documents indicating that Mr. Selvaggio is the owner of the Bayshire property. See Tax Ease Ohio, LLC v. Blankenship, 2d Dist. Montgomery No. 27168, 2017-Ohio-2786, ¶ 13. {¶18} This case implicates the first element, i.e., Tax Ease’s purchase of the tax liens. The record establishes that Tax Ease purchased the tax certificates pursuant to R.C. 5721.33, which provides that “[a] county treasurer may, in the treasurer’s discretion, negotiate the sale or transfer of any number of tax certificates with one or more persons, including a county land reutilization corporation.” R.C. 5721.33(A). The statutory sale process is as follows: {¶19} First, “[t]he county treasurer shall adopt rules governing the eligibility of persons to purchase tax certificates or to otherwise participate in a negotiated sale under this section.” R.C. 5721.33(E)(1). 5 Case No. 2022-L-047 {¶20} Second, “[a]ny person that intends to purchase a tax certificate in a negotiated sale shall submit an affidavit to the county treasurer that establishes compliance with the applicable eligibility criteria and includes any other information required by the treasurer.” R.C. 5721.33(E)(2). {¶21} Third, “[t]he purchaser in a negotiated sale under this section shall deliver the certificate purchase price or other consideration, plus any applicable premium and less any applicable discount and including any noncash consideration, to the county treasurer not later than the close of business on the date the tax certificates are delivered to the purchaser.” R.C. 5721.33(F). “The purchaser also shall pay on the date the tax certificates are delivered to the purchaser the fee, if any, negotiated under division (J) of this section.” Id. {¶22} Fourth, “[u]pon receipt of the full payment from the purchaser of the certificate purchase price or other agreed-upon consideration, plus any applicable premium and less any applicable discount, and the negotiated fee, if any, the county treasurer * * * shall issue the tax certificate and record the tax certificate sale by entering into a tax certificate register the certificate purchase price, any premium paid or discount taken, the certificate rate of interest, the date the certificates were sold, the name and address of the certificate holder or, in the case of issuance of the tax certificates in a book-entry system, the name and address of the nominee, and any other information the county treasurer considers necessary.” R.C. 5721.33(G). “The county treasurer also shall transfer the tax certificates to the certificate holder.” Id. “Upon issuing the tax certificates, the delinquent taxes that make up the certificate purchase price are transferred, and the superior lien of the state and its taxing districts for those delinquent taxes is conveyed intact to the certificate holder or holders.” Id. 6 Case No. 2022-L-047 {¶23} “Upon the sale and delivery of a tax certificate, the tax certificate vests in the certificate holder the first lien previously held by the state and its taxing districts under section 5721.10 of the Revised Code for the amount of taxes, assessments, interest, and penalty charged against a certificate parcel, superior to all other liens and encumbrances upon the parcel described in the tax certificate, in the amount of the certificate redemption price, except liens for delinquent taxes that attached to the certificate parcel prior to the attachment of the lien being conveyed by the sale of such tax certificate.” R.C. 5721.35(A). In addition, “[t]he tax certificate purchased by the certificate holder is presumptive evidence in all courts and boards of revision and in all proceedings, including, without limitation, at the trial of the foreclosure action, of the amount and validity of the taxes, assessments, charges, penalties by the court and added to such principal amount, and interest appearing due and unpaid and of their nonpayment.” R.C. 5721.37(F). {¶24} Mr. Selvaggio’s argument is based on R.C. 5721.33(K), which, at the time Tax Ease purchased the tax certificates, provided as follows: {¶25} “After selling tax certificates under this section, the county treasurer shall send written notice by certified mail to the last known tax-mailing address of the owner of the certificate parcel. The notice shall inform the owner that a tax certificate with respect to such owner’s parcel was sold or transferred and shall describe the owner’s options to redeem the parcel, including entering into a redemption payment plan under division (C)(2) of section 5721.38 of the Revised Code. However, the county treasurer is not required to send a notice under this division if the treasurer previously has attempted to 7 Case No. 2022-L-047 send a notice to the owner of the parcel at the owner’s last known tax-mailing address and the postal service has returned the notice as undeliverable.” (Emphasis added.)1 {¶26} The parties dispute whether the county treasurer complied with R.C. 5721.33(K), although neither party issued discovery to the county treasurer. Tax Ease argues there is a presumption that a public official has discharged his or her official duties in accordance with law. Mr. Selvaggio argues that he raised an issue of material fact in his affidavit, where he averred that he never received written notice of the tax certificate sales. {¶27} Based on our de novo review, we find that the county treasurer’s compliance with R.C. 5721.33(K) was not an issue of “material fact” precluding summary judgment in favor of Tax Ease. Even if the county treasurer failed to comply with R.C. 5721.33(K), there is no legal basis upon which to invalidate the tax certificates. {¶28} As an initial matter, there is no language in R.C. 5721.33(K) or elsewhere that supports Mr. Selvaggio’s position. He also cites no case law in which a court has invalidated a tax lien on this or any similar basis. {¶29} In addition, the statutory text expressly contradicts Mr. Selvaggio’s assertion that the county treasurer’s compliance with R.C. 5721.33(K) is a “condition precedent” to a valid tax certificate sale. The Supreme Court of Ohio has defined a “condition precedent” as “one that is to be performed before the agreement becomes effective, and which calls for the happening of some event or the performance of some 1. Effective November 2, 2018, the first sentence of R.C. 5721.33(K) was amended to state, “After selling tax certificates under this section, the county treasurer shall send written notice to the owner of the certificate parcel by either certified mail or, if the treasurer has record of an internet identifier of record associated with the owner, by ordinary mail and by that internet identifier of record. A mailed notice shall be sent to the owner’s last known tax-mailing address of the owner of the certificate parcel.” (Bolding and redlining added.) The 2018 amendments do not affect the issues on appeal. 8 Case No. 2022-L-047 act after the terms of the contract have been agreed on, before the contract shall be binding on the parties.” Mumaw v. W. & S. Life Ins. Co., 97 Ohio St. 1, 119 N.E. 132 (1917), syllabus; see Wroblesky v. Hughley, 2021-Ohio-1063, 169 N.E.3d 709, ¶ 45 (11th Dist.), appeal not accepted, 164 Ohio St.3d 1421, 2021-Ohio-2923, 172 N.E.3d 1049. As indicated, a tax certificate becomes effective upon “sale and delivery.” R.C. 5721.35(A). The county treasurer’s written notice obligation under R.C. 5721.33(K) expressly arises “[a]fter selling tax certificates.” (Emphasis added.) {¶30} We further disagree with Mr. Selvaggio’s suggestion that the alleged lack of written notice precluded him from exercising his right to redeem the Bayshire property pursuant to R.C. 5721.38(C)(2). That provision provides, “During the period beginning on the date a tax certificate is sold under section 5721.33 of the Revised Code and ending on the date the decree is rendered on the foreclosure proceeding under division (F) of section 5721.37 of the Revised Code, the owner of record of the certificate parcel, or any other person entitled to redeem that parcel, may enter into a redemption payment plan with the certificate holder and all secured parties of the certificate holder.” (Emphasis added.) {¶31} A property owner’s redemption rights under R.C. 5721.38(C)(2) are not dependent on the issuance of written notice under R.C. 5721.33(K). Rather, the notice simply describes the property owner’s existing redemption rights. See id. (“The notice * * * shall describe the owner’s options to redeem the parcel, including entering into a redemption payment plan under division (C)(2) of section 5721.38 of the Revised Code”). Despite the fact that Tax Ease filed its cross-claims in 2018, there is no indication in the record that Mr. Selvaggio attempted to exercise his redemption rights at any time during the protracted litigation. See Aurora Bank F.S.B. v. Gordon, 8th Dist. Cuyahoga No. 9 Case No. 2022-L-047 103138, 2016-Ohio-938, ¶ 26 (“[Appellant]’s protracted litigation and failure to make any offer of payment belie her claim that timely notice of the purchaser’s deposit would have prompted her to exercise her right to redemption”). Further, we note that Mr. Selvaggio is entitled to redeem the Bayshire property at any time before the confirmation of a sale. See R.C. 5721.38(B). {¶32} On appeal, Mr. Selvaggio contends that the county treasurer’s alleged failure to comply with R.C. 5721.33(K) violated his constitutional right to due process. Since Mr. Selvaggio did not raise this due process claim in the trial court, it is waived. Atlantic Mtge. & Invest. Corp. v. Sayers, 11th Dist. Ashtabula No. 2000-A-0081, 2002 WL 331734, 3 (Mar. 1, 2002). In any event, a party must demonstrate prejudice resulting from an alleged due process violation. See State v. Nagle, 11th Dist. Lake No. 99-L-089, 2000 WL 777835, 6 (June 16, 2000). Mr. Selvaggio has not alleged, much less demonstrated, the existence of prejudice. And, as explained above, his redemption rights were not prejudiced. {¶33} In sum, the county treasurer’s compliance with R.C. 5721.33(K) was not an issue of “material fact” precluding summary judgment in favor of Tax Ease. Accordingly, the trial court did not err in granting summary judgment to Tax Ease. {¶34} Mr. Selvaggio’s sole assignment of error is without merit. {¶35} For the foregoing reasons, the judgment of the Lake County Court of Common Pleas is affirmed. MATT LYNCH, J., JOHN J. EKLUND, J., concur. 10 Case No. 2022-L-047	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483668/	Rule 131. Location of Proceedings Before Issuing Authority. (A) An issuing authority within the magisterial district for which he or she is elected or appointed shall have jurisdiction and authority to receive complaints, issue warrants, hold preliminary arraignments, set and receive bail, issue commitments to jail, and hold hearings and summary trials. (1) Except as provided in paragraph (A)(2), all preliminary arraignments shall be held in the issuing authority’s established office, a night court, or some other facility within the Commonwealth designated by the president judge, or the president judge’s designee. (2) Preliminary arraignments may be conducted using advanced communication technology pursuant to Rule 540. The preliminary arraignment in these cases may be conducted from any site within the Commonwealth designated by the president judge, or the president judge’s designee. (3) All hearings and summary trials before the issuing authority shall be held publicly at the issuing authority’s established office. For reasons of emergency, security, size, or in the interests of justice, the president judge, or the president judge’s designee, may order that a hearing or hearings, or a trial or trials, be held in another more suitable location within the judicial district. (4) The issuing authority may receive complaints, issue warrants, set and receive bail, and issue commitments to jail from any location within the judicial district, or from an advanced communication technology site within the Commonwealth. (B) When local conditions require, the president judge may establish procedures for preliminary hearings or summary trials, in all cases or in certain classes of cases, to be held at a central place or places within the judicial district at certain specified times. The procedures established shall provide either for the transfer of the case or the transfer of the issuing authority to the designated central place as the needs of justice and efficient administration require. The president judge shall petition the Administrative Office of Pennsylvania Courts (AOPC) for such relocation of proceedings at a central place or places, and the Supreme Court of Pennsylvania shall make the ultimate decision as to whether to approve the petition. The petition procedure is as follows: (1) Notice (a) Written notice of the proposed change in location of proceedings shall be provided to all magisterial district judges in the county and to each municipality and each police department that would be affected by the proposed petition. (b) Notice of the proposal shall be provided to the public by posting of the proposal on the court or county official website and by any additional means that the president judge deems appropriate. The notice must be placed at least 30 days before submission of the proposal to the AOPC and must invite members of the public to provide written comment on the proposal. All written comments must be attached to the petition. (c) Each magisterial district judge shall provide a written statement whether the judge supports or opposes the recommendation. These statements shall be attached to the petition. If any judge affected by the proposal fails to submit a statement within 30 days of the distribution of the written notice in subsection (a) above, the president judge shall note this fact in the petition. (2) Petition (a) A petition containing the proposal shall be transmitted to the AOPC, with a copy sent to all magisterial district judges in the judicial district, to all municipalities affected by the proposal, to all police departments affected by the proposal, and to the Supreme Court of Pennsylvania. The petition shall contain the following: (i) a statement detailing what local conditions require the formation of a central court and what improvement would be made to the Magisterial District Court system with any data or other documentation, (ii) an assessment of the impact on public -2- accessibility to the relocated court proceedings, (iii) an estimate of the fiscal impact of the proposal for the county, municipalities, police departments and other stakeholders, (iv) a copy of the statements from all affected magisterial district judges as to their position on the proposal, or a notation of any magisterial district judge who declined to provide such a statement, and (v) a copy of the public notice that was posted regarding the proposal and all written comments. (b) Answers in opposition to the petition may be submitted to the AOPC by any interested party within thirty days of the submission of the original petition. Any answer should include a concise statement of reasons why the petition should be denied and should reference the standards listed below. A copy of the answer shall be sent to the president judge and to the Supreme Court of Pennsylvania. The president judge may submit a response to the answer within fifteen days of the submission of the answer. (3) Standards (a) Any change shall not diminish the equitable distribution of cases between the magisterial district judges in the county. (b) No change shall restrict public access to the courts. (c) No change may create a situation where a duly elected magisterial district judge is hearing cases from outside the district from which he or she was elected on a regularly scheduled basis. (4) Decision The AOPC shall provide its recommendation as to whether to approve the petition to the Supreme Court of Pennsylvania. -3- The Supreme Court of Pennsylvania shall decide whether to approve the petition. (5) Implementation Following the approval of a petition, the president judge shall consult with the affected magisterial district judges to ensure that the changes are implemented without undue disruption. Comment: [The 2002 amendments to paragraph (A) divided the paragraph into subparagraphs to more clearly distinguish between the locations for the different types of proceedings and business that an issuing authority conducts.] Paragraph (A)(3) permits the president judge, or the president judge’s designee, to order that a hearing or hearings be held in a location that is different from the issuing authority’s established office. [Nothing in this rule is intended to preclude the president judge, or the president judge’s designee, from issuing a standing order for a change in location. For example, this might be done when a state correctional institution is located in the judicial district and the president judge determines that, for security reasons, all preliminary hearings of the state correctional institution’s inmates will be conducted at that prison.] The creation of central courts is governed by paragraph (B) of this rule. See Rule 540 and Comment for the procedures governing the use of advanced communication technology in preliminary arraignments. See Rule 130 concerning the venue when proceedings are conducted by using advanced communication technology. [Paragraph (B) of this rule is intended to facilitate compliance with the requirement that defendants be represented by counsel at the preliminary hearing. Coleman v. Alabama, 399 U. S. 1 (1970).] Paragraph (A)(4) permits issuing authorities to perform their official duties from an advanced communication technology site within the Commonwealth. The site may be located outside the magisterial district or judicial district where the issuing authority presides. [This rule allows the president judge of a judicial district the discretion to determine what classes of cases require centralized preliminary hearings or summary trials, and requires the president judge, or the president judge’s designee, to establish a schedule of central places within the Commonwealth to conduct such hearings or summary trials, and the hours for the hearings or trials at the central locations.] -4- [Ideally, this rule should minimize the inconvenience to defense counsel and the attorney for the Commonwealth by eliminating the necessity of travel at various unpredictable times to many different locations throughout the judicial district for the purpose of attending preliminary hearings or summary trials. Finally, this rule allows preliminary hearings or summary trials for jailed defendants to be held at a location close to the place of detention.] Paragraph (B) sets forth a procedure requiring examination of the effects of relocation to a central place or places, including inconvenience to the public. Such changes in location affect access to justice and may change procedures. Therefore, this procedure mandates approval by the Supreme Court of Pennsylvania to ensure a more unified system as is done in similar matters like Reestablishment of Magisterial Districts (42 Pa.C.S. §1503), Establishment of Offices (Pa.R.Civ.P.M.D.J. 101), etc. Nothing in this rule limits the President Judges’ authority to develop county-wide systems for preliminary arraignments and coverage for other after-hours emergency matters per Pa.R.Crim.P. 117 (Coverage: Issuing Warrants; Preliminary Arraignments and Summary Trials; and Setting and Accepting Bail). Ideally, the location of a central court should minimize inconvenience to the public. Long travel discourages the public from attending hearings, paying fines, or posting bail, may result in dispositional delays and increased litigation costs, and may hinder access to emergency relief, such as protection from abuse orders. Proximity to magisterial district courts “is an important ingredient in the public’s. . .trust in the judicial branch.” Report of the Magisterial District Reestablishment Subcommittee Intergovernmental Task Force to Study the District Justice System, 2001. This rule is not intended to reverse existing orders relocating magisterial district judge proceedings to a central court. -5-	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483661/	[Cite as Kent v. Lusane, 2022-Ohio-4057.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY CITY OF KENT, OHIO, CASE NO. 2022-P-0011 Plaintiff-Appellee, Criminal Appeal from the - vs - Municipal Court, Kent Division MATTHEW M. LUSANE, Trial Court No. 2021 TRD 01381 K Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed Hope L. Jones, The City of Kent, Ohio Law Director, and Eric Fink, Assistant Law Director, 320 South Depeyster Street, Kent, OH 44240 (For Plaintiff-Appellee). Matthew M. Lusane, pro se, P.O. Box 465, Ravenna, OH 44266 (Defendant-Appellant). MARY JANE TRAPP, J. {¶1} Appellant, Matthew M. Lusane (“Mr. Lusane”), appeals his minor misdemeanor conviction for failure to yield following a bench trial in the Portage County Municipal Court, Kent Division. {¶2} Mr. Lusane asserts three assignments of error, contending that (1) appellee, the city of Kent (“the city”), and the City of Kent Police Department (“the Kent PD”) failed to preserve and disclose material exculpatory evidence or destroyed potentially useful evidence in bad faith; (2) the trial court erred in finding him guilty beyond a reasonable doubt; and (3) his conviction is against the manifest weight of the evidence. {¶3} After a careful review of the record and pertinent law, we find as follows: {¶4} (1) Mr. Lusane did not meet his burden to establish that his due process rights were violated. Mr. Lusane offered no proof that video evidence of the vehicle collision or investigation would have been materially exculpatory. Even assuming the video evidence was at least potentially useful, Mr. Lusane failed to establish that the city and/or the Kent PD acted in bad faith in failing to preserve it. {¶5} (2) Mr. Lusane has not established that there was insufficient evidence to support his conviction for failure to yield. The police officer’s testimony constituted “evidence” that, if believed, could properly serve as the basis for the trial court’s verdict. In addition, Mr. Lusane cites no authority indicating that the necessary elements of the offense include the preferred driver’s lack of negligence in avoiding a collision. {¶6} (3) Mr. Lusane’s conviction is not against the manifest weight of the evidence. Despite Mr. Lusane’s efforts to impeach the officers’ credibility, the trial court chose to believe their testimony. Upon review of the record, we cannot say that the trial court clearly lost its way or created a manifest miscarriage of justice. {¶7} Thus, we affirm the judgment of the Portage County Municipal Court, Kent Division. Substantive and Procedural History {¶8} On the evening of July 12, 2021, Officer Allen Womack (“Ofc. Womack”) of the Kent PD was driving his cruiser north on Vine Street in Kent, Ohio, on his way back to the police station. At the same time, Mr. Lusane was backing his vehicle out of a residential driveway onto Vine Street. According to Ofc. Womack, Mr. Lusane continued backing up his vehicle as the cruiser approached. Ofc. Womack stopped his cruiser and 2 Case No. 2022-P-0011 honked his horn. However, Mr. Lusane’s vehicle collided with the front driver’s side bumper of the cruiser. {¶9} After the collision, Ofc. Womack activated his overhead lights, which automatically turned on his dash camera. Ofc. Womack would later testify that when the dash camera is activated, it captures the previous thirty seconds. Ofc. Womack called his superior, Lieutenant Ryan Gaydosh (“Lt. Gaydosh”), to complete a traffic investigation. Mr. Lusane exited his vehicle and began taking photos with his cell phone. Ofc. Womack approached and asked Mr. Lusane for his identification and proof of insurance. According to Ofc. Womack, he was not wearing a body camera because the Kent PD had not issued them. {¶10} Lt. Gaydosh arrived at the scene and activated his body camera. He would later testify that the Kent PD was testing a new body camera system at that time but cameras were only deployed to sergeants and lieutenants. Upon arrival, Lt. Gaydosh spoke to both Ofc. Womack and Mr. Lusane, at which time Mr. Lusane said that Ofc. Womack “should have backed up out of his way.” Lt. Gaydosh used his body camera to record the damage to both vehicles. He did not take written statements or review Ofc. Womack’s dash camera video. Lt. Gaydosh issued a traffic citation to Mr. Lusane. Later that evening, Lt. Gaydosh took additional photos of Ofc. Womack’s cruiser at the station. {¶11} The next day, on June 13, Lt. Gaydosh charged Mr. Lusane in the Portage County Municipal Court, Kent Division, with failure to yield while entering the roadway, a minor misdemeanor, in violation of Kent Codified Ordinance (“KCO”) 331.22. Mr. Lusane filed a request to plead not guilty and for a hearing within 90 days, which the trial court granted. 3 Case No. 2022-P-0011 {¶12} On July 20, i.e., eight days after the accident, Mr. Lusane filed a discovery demand pursuant to Crim.R. 16, in which he requested, among other items, “[t]he dash camera video (in its entirety) from both police vehicles at the scene” and “[t]he body camera video (in its entirety) from both officers at the scene.” The certificate of service states that Mr. Lusane sent his discovery demand to the prosecutor via regular mail at “215 East Summit Street, Kent, Ohio 44240.” {¶13} A pretrial was held on October 14. The prosecutor informed the trial court that Mr. Lusane had filed a discovery demand but sent it to the city’s “old address”; thus, it was never delivered. However, Mr. Lusane communicated the requests, and the prosecutor provided him with the police report and a video release. The trial court instructed Mr. Lusane to bring a blank DVD to the Kent PD so that it could “burn [him] a copy of whatever they have.” {¶14} After the pretrial, Mr. Lusane submitted the video release to the Kent PD. Detective Dave Marino (“Det. Marino”) serves as the Kent PD’s evidence room manager. He issued a written response to Mr. Lusane indicating that no video of the July 12 incident existed. Det. Marino would later testify that pursuant to the Kent PD’s current retention policy, videos regarding “traffic stops with enforcement and crashes” are only retained on the department’s computer system for 60 days. Since Mr. Lusane submitted his request beyond this time period, no video existed at that time. {¶15} The city’s “records retention schedule” provides, in relevant part, that “Digital Recording Media,” i.e., “cruiser video, handheld video, and other audio/video recording of departmental activities,” are retained for a period of “30 days and no further administrative or legal value.” 4 Case No. 2022-P-0011 {¶16} Section 4.45 of the Kent PD’s policy manual (revised November 14, 2019) provides, in relevant part: {¶17} “All recordings captured by cruiser-mounted recording systems are subject to Ohio Public Records law, and are presumed to have evidentiary, investigative or administrative value. They are stored on the server for a pre-determined retention period in compliance with the City of Kent’s Records Retention Policy, and then are purged automatically unless reclassified for a longer retention period according to their legal or administrative value.” {¶18} On November 18, 2021, the parties appeared for a bench trial. Mr. Lusane informed the trial court that he had not received video evidence in response to his discovery demand. A Kent PD officer was in attendance1 and responded that the department no longer had access to the body camera footage. However, the officer indicated that the department responded to Mr. Lusane’s request for dash camera video and burned the footage onto DVDs. The officer stated that he called Mr. Lusane’s phone number but was unable to reach him. As a result, he left the DVDs at the records department. {¶19} Mr. Lusane replied that he submitted the request form to the Kent PD along with blank CDs (as opposed to DVDs) and received a response stating that there was no video. However, if video evidence was in fact available, he requested a continuance to review it. The trial court granted the continuance and instructed Mr. Lusane to go to the Kent PD that day. 1. Although the hearing transcript does not identify the officer, other portions of the record suggest that it was Lt. Gaydosh. 5 Case No. 2022-P-0011 {¶20} On January 3, 2022, Mr. Lusane filed a motion to dismiss, contending that the city and Kent PD violated Crim.R. 16 and his due process rights. In his motion, he stated that he provided blank DVDs to the Kent PD following the November 18 hearing and was again informed that no video existed. He alleged that the city and Kent PD “lied” to the trial court regarding the existence of video evidence. {¶21} On January 13, the parties appeared for the bench trial. Both sides presented argument on Mr. Lusane’s motion to dismiss. The trial court overruled Mr. Lusane’s motion, and the trial commenced. {¶22} The prosecution presented testimony from Ofc. Womack and Lt. Gaydosh. Mr. Lusane recalled Ofc. Womack, presented testimony from Det. Marino, and submitted documentary exhibits. Mr. Lusane renewed his motion to dismiss, which the trial court overruled. Following closing arguments, the trial court found Mr. Lusane guilty of failure to yield in violation of KCO 331.22, imposed a $100 fine and court costs, and granted him 180 days to pay. The trial court also granted Mr. Lusane’s oral motion to stay the judgment pending appeal. {¶23} On the same date, the trial court filed judgment entries memorializing the verdict, sentence, and stay. Mr. Lusane subsequently filed a motion for a new trial pursuant to Crim.R. 33, which the trial court denied. {¶24} Mr. Lusane appealed his judgment of conviction and presents the following three assignments of error: {¶25} “[1.] The City of Kent & KPD failed to preserve and disclose material exculpatory evidence, or destroyed potentially useful evidence in ‘bad faith.’ {¶26} “[2.] The conviction is against the manifest weight of the evidence. 6 Case No. 2022-P-0011 {¶27} “[3.] The trial court erred in finding appellant-defendant guilty beyond a reasonable doubt.” Due Process {¶28} In his first assignment of error, Mr. Lusane contends that the city and Kent PD violated his due process rights by failing to preserve and disclose material exculpatory evidence or, alternatively, by destroying potentially useful evidence in bad faith. {¶29} We construe Mr. Lusane’s first assignment of error as challenging the trial court’s denial of his motion to dismiss, which we review de novo. See State v. Blackshaw, 8th Dist. Cuyahoga No. 85432, 2005-Ohio-5203, ¶ 10. Legal Principles {¶30} Due process and the interests of fundamental fairness “require that criminal defendants be afforded a meaningful opportunity to present a complete defense.” California v. Trombetta, 467 U.S. 479, 485, 104 S.Ct. 2528, 81 L.Ed.2d 413 (1984). To safeguard this right, the Supreme Court of the United States has established “‘what might loosely be called the area of constitutionally guaranteed access to evidence.’” Id., quoting United States v. Valenzuela-Bernal, 458 U.S. 858, 867, 102 S.Ct. 3440, 73 L.Ed.2d 1193 (1982). {¶31} The Supreme Court has held that the state violates a defendant’s due process rights when it fails to preserve “material exculpatory evidence.” See id. at 486- 489. “Exculpatory evidence” is evidence favorable to an accused, which, “if disclosed and used effectively, * * * may make the difference between conviction and acquittal.” United States v. Bagley, 473 U.S. 667, 676, 87 L.Ed.2d 481, 105 S.Ct. 3375 (1985). “[E]vidence shall be deemed material only if there is a reasonable probability that, had 7 Case No. 2022-P-0011 the evidence been disclosed to the defense, the result of the proceeding would have been different. A ‘reasonable probability’ is a probability sufficient to undermine confidence in the outcome. This standard of materiality applies regardless of whether the evidence is specifically, generally or not at all requested by the defense.” State v. Johnston, 39 Ohio St.3d 48, 529 N.E.2d 898 (1988), paragraph five of the syllabus. “The defendant bears the burden to show that the evidence was materially exculpatory.” State v. Powell, 132 Ohio St.3d 233, 2012-Ohio-2577, 971 N.E.2d 865, ¶ 74. {¶32} The Supreme Court has drawn a distinction between “material exculpatory evidence” and “potentially useful evidence.” State v. Geeslin, 116 Ohio St.3d 252, 2007- Ohio-5239, 878 N.E.2d 1, ¶ 10. According to the court, the police do not have “an undifferentiated and absolute duty to retain and to preserve all material that might be of conceivable evidentiary significance in a particular prosecution.” Arizona v. Youngblood, 488 U.S. 51, 58, 109 S.Ct. 333, 102 L.Ed.2d 281 (1988). Thus, “[i]f the evidence in question is not materially exculpatory, but only potentially useful, the defendant must show bad faith on the part of the state in order to demonstrate a due process violation.” Geeslin at ¶ 9; see Youngblood at 57 (finding semen samples to be only “potentially useful” where “no more can be said than that it could have been subjected to tests, the results of which might have exonerated the defendant”). {¶33} “‘The term “bad faith” generally implies something more than bad judgment or negligence.’” Powell at ¶ 81, quoting State v. Tate, 5th Dist. Fairfield No. 07 CA 55, 2008-Ohio-3759, ¶ 13. “‘“It imports a dishonest purpose, moral obliquity, conscious wrongdoing, breach of a known duty through some ulterior motive or ill will partaking of the nature of fraud. It also embraces actual intent to mislead or deceive another.”’” Id., 8 Case No. 2022-P-0011 quoting Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 276, 452 N.E.2d 1315 (1983), quoting Slater v. Motorists Mut. Ins. Co., 174 Ohio St. 148, 187 N.E.2d 45 (1962), paragraph two of the syllabus. Materially Exculpatory {¶34} Mr. Lusane asserts that the video evidence was “materially exculpatory” because it was the “only objective, non-comparable evidence that captured the collision as it occurred.” While we agree that video evidence may be “objective,” this does not necessarily mean it is exculpatory. {¶35} “Generally, missing videotape evidence that purports to contain images of an actual crime or event at issue speaks for itself. Simply put, such direct evidence is by its very nature either inculpatory or exculpatory, or some combination of the two * * .” State v. Durham, 8th Dist. Cuyahoga No. 92681, 2010-Ohio-1416, ¶ 16. {¶36} Here, the dash and body camera videos would have either supported the officers’ version of events, and were inculpatory, or they would have contradicted it, and were exculpatory. They may have also shown a combination of the two. Crucially, however, Mr. Lusane offered no proof that the video evidence would have been materially exculpatory. See State v. Lothes, 11th Dist. Portage No. 2006-P-0086, 2007-Ohio-4226, ¶ 47. In fact, he never contended that the video evidence would contradict the officers’ testimony and support his acquittal. Thus, this case is distinguishable from those Mr. Lusane cites in support. See State v. Benton, 136 Ohio App.3d 801, 806, 737 N.E.2d 1046 (6th Dist.2000) (the appellant testified that he disputed much of the officer’s testimony); State v. Benson, 152 Ohio App.3d 495, 2003-Ohio-1944, 788 N.E.2d 693, ¶ 9 Case No. 2022-P-0011 12 (1st Dist.) (the testimony of the defendant and two eyewitnesses disputed much of the officer’s testimony). {¶37} Instead, Mr. Lusane appears to assert a “best evidence” type of argument, i.e., that only objective evidence could establish his guilt beyond a reasonable doubt. Courts have held that “a conviction may rest solely on the testimony of a single witness, if believed, and there is no requirement that a witness’ testimony be corroborated to be believed.” See State v. Nicholson, 8th Dist. Cuyahoga No. 110595, 2022-Ohio-2037, ¶ 180. Courts have also held that the best evidence rule does not apply when a witness testifies from his or her personal knowledge. See United States v. Conteh, 234 Fed.Appx. 374, 387 (6th Cir.2007); D’Angelo v. United States, 456 F.Supp. 127, 131 (D.Del.1978) (finding that the best evidence rule “is not applicable when a witness testifies from [p]ersonal knowledge of the matter, even though the same information is contained in a writing”). Accordingly, Mr. Lusane failed to establish that the video evidence was materially exculpatory. Bad Faith {¶38} Even assuming the video evidence was at least “potentially useful,” Mr. Lusane failed to establish that the city and/or the Kent PD acted in bad faith in failing to preserve it. {¶39} “Why and when” video evidence was destroyed “are important considerations in determining whether the state acted in bad faith.” State v. Miller, 161 Ohio App.3d 145, 2005-Ohio-2516, 829 N.E.2d 751, ¶ 13 (2d Dist.). Det. Marino testified that he received Mr. Lusane’s request for video evidence on October 14, 2021. Since this request was submitted beyond the department’s 60-day retention policy, no video 10 Case No. 2022-P-0011 evidence existed. This result was also consistent with the 30-day period set forth in the city’s records retention schedule and the Kent PD’s policy manual (as revised in November 2019). {¶40} Mr. Lusane asks us to find bad faith based on his submission of a discovery demand eight days after the collision in which he specifically requested all dash and body camera video. Pursuant to Crim.R. 49(B), discovery requests shall be served upon opposing counsel in accordance with Civ.R. 5(B). Civ.R. 5(B), in turn, delineates proper methods of service, including “mailing it to the person’s last known address by United States mail, in which event service is complete upon mailing.” Civ.R. 5(B)(2)(c). This court has held that “[i]f a defendant’s service of a discovery request does not comply with Crim.R. 49(B) and Civ.R. 5(B), the prosecutor has no duty to respond.” Timberlake v. Graham, 2018-Ohio-1450, 110 N.E.3d 592, ¶ 19 (11th Dist.). Here, Mr. Lusane mailed his request to the prosecutor at an incorrect address, and the record suggests that the prosecutor was not even aware of his request until the October 2021 pretrial. {¶41} Mr. Lusane further asks us to find bad faith because the city and Kent PD sent him on a “wild goose chase” to obtain video evidence that no longer existed. It appears that the prosecutor and Lt. Gaydosh made assertions during the November 2021 hearing that turned out to be factually inaccurate. However, Lt. Marino, as the evidence room manager, was the individual who processed Mr. Lusane’s request for video evidence. Thus, he had direct personal knowledge of the facts, and there is no indication that he was present at the November 2021 hearing. {¶42} The cases that Mr. Lusane cites in support of his position are factually distinguishable. In Benton, supra, the appellant specifically requested the videotape of 11 Case No. 2022-P-0011 his traffic stop, and the state did not respond in good faith. See id. at 806. In Benson, supra, the prosecutor informed the defendant during discovery that no videotape of his arrest existed; however, the officer’s testimony at the suppression hearing clearly indicated that a videotape had existed. Despite being aware of the defendant’s request for the videotape, the officer did not look for it. See id. at ¶ 3-5. Finally, in State v. Durnwald, 163 Ohio App.3d 361, 2005-Ohio-4867, 837 N.E.2d 1234 (6th Dist.), the state highway patrol officer partially erased the videotape of the defendant’s arrest despite policy regulations requiring that all traffic stops, pursuits, and crash scenes be recorded on videotape and preserved as evidence until all criminal and civil actions have been completed. See id. at ¶ 32-33. {¶43} In sum, Mr. Lusane did not meet his burden to establish that his due process rights were violated. Therefore, the trial court did not err in denying his motion to dismiss. {¶44} Mr. Lusane’s first assignment of error is without merit. Sufficiency of the Evidence {¶45} We consider Mr. Lusane’s second and third assignments of error out of order for ease of discussion. {¶46} In his third assignment of error, Mr. Lusane contends that the trial court erred in finding him guilty beyond a reasonable doubt. We construe Mr. Lusane’s third assignment of error as challenging the sufficiency of the evidence to support his conviction for failure to yield. {¶47} “‘“[S]ufficiency” is a term of art meaning that legal standard which is applied to determine whether * * the evidence is legally sufficient to support the * * * verdict as a matter of law.’” State v. Thompkins, 78 Ohio St.3d 380, 386, 678 N.E.2d 541 (1997), 12 Case No. 2022-P-0011 quoting Black’s Law Dictionary 1433 (6th Ed.1990). “In essence, sufficiency is a test of adequacy.” Id. {¶48} “An appellate court’s function when reviewing the sufficiency of the evidence to support a criminal conviction is to examine the evidence admitted at trial to determine whether such evidence, if believed, would convince the average mind of the defendant’s guilt beyond a reasonable doubt.” State v. Jenks, 61 Ohio St.3d 259, 574 N.E.2d 492 (1991), paragraph two of the syllabus. “The relevant inquiry is whether, after viewing the evidence in a light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime proven beyond a reasonable doubt.” Id. {¶49} Mr. Lusane was convicted of violating KCO 331.22, which provides, in relevant part: {¶50} “(a) Subject to compliance with any traffic control device, the operator of a vehicle about to enter or cross a highway from an alley or from any place other than another roadway shall yield the right of way to all traffic approaching on the roadway to be entered or crossed. {¶51} “(b) Except as otherwise provided in this subsection, whoever violates this section is guilty of a minor misdemeanor.” See also R.C. 4511.44. {¶52} KCO 301.32(a) defines “right of way” as “[t]he right of a vehicle or pedestrian to proceed uninterruptedly in a lawful manner in the direction in which it or the individual is moving in preference to another vehicle or pedestrian approaching from a different direction into its or the individual’s path[.]” See also R.C. 4511.01(UU)(1). 13 Case No. 2022-P-0011 {¶53} Accordingly, a driver with the right of way has an absolute right to proceed uninterruptedly in a lawful manner, and other drivers must yield to him. In re Neill, 160 Ohio App.3d 439, 2005-Ohio-1696, 827 N.E.2d 811, ¶ 10 (3d Dist.). A driver proceeds in a lawful manner by complying with Ohio traffic laws. Id. Evidence that the progress of the preferred vehicle was impeded or impaired is sufficient to establish a failure to yield the right of way. State v. Williams, 10th Dist. Franklin No. 81AP-109, 1981 WL 3206, 2 (May 21, 1981). {¶54} Mr. Lusane suggests that Ofc. Womack’s testimony, by itself, was insufficient to establish the facts underlying the collision. However, the term “evidence” encompasses “every form of evidence,” including “testimony as well as documentary evidence, exhibits, * * and every other thing which may properly give information to the court upon the issues presented.” Scherck v. Knapp, 14 Ohio C.D. 588, 589 (1903); see Black’s Law Dictionary, evidence (11th Ed.2019) (defining “evidence” as “[s]omething (including testimony, documents, and tangible objects) that tends to prove or disprove the existence of an alleged fact; anything presented to the senses and offered to prove the existence or nonexistence of a fact”). Thus, Ofc. Womack’s testimony constituted “evidence” that, if believed, could properly serve as the basis for the trial court’s verdict. {¶55} Mr. Lusane also contends that Ofc. Womack was negligent, or at least contributorily negligent, in his attempts to avoid the collision after his right of way was breached. Mr. Lusane does not articulate how Ofc. Womack’s alleged negligence precluded his conviction for failure to yield. However, it appears Mr. Lusane is mistakenly relying on cases involving civil actions for damages. 14 Case No. 2022-P-0011 {¶56} For instance, Mr. Lusane cites Deming v. Osinski, 24 Ohio St.2d 179, 265 N.E.2d 554 (1970), a civil action for negligence, where the Supreme Court of Ohio stated: {¶57} “‘The driver of a vehicle lawfully approaching from the right has the right to assume that the driver of the vehicle approaching from the left will obey the law by yielding the right of way. If however the former, just as he is approaching or entering the intersection, discovers that the latter is not yielding the right of way and has thereby placed himself in a perilous situation, it becomes the duty of the former to use ordinary care not to injure the latter after becoming aware of his perilous situation.’” (Emphasis added). Id. at 182, quoting Morris v. Bloomgren, 127 Ohio St. 147, 187 N.E. 2 (1933). {¶58} Mr. Lusane cites no authority indicating that the necessary elements of a failure to yield offense include the preferred driver’s lack of negligence during a “perilous situation.” Accordingly, Mr. Lusane has not established that there was insufficient evidence to support his conviction. {¶59} Mr. Lusane’s third assignment of error is without merit. Manifest Weight of the Evidence {¶60} Finally, in his second assignment of error, Mr. Lusane contends that his conviction for failure to yield is against the manifest weight of the evidence. {¶61} “[W]eight of the evidence addresses the evidence’s effect of inducing belief.” State v. Wilson, 113 Ohio St.3d 382, 2007-Ohio-2202, 865 N.E.2d 1264, ¶ 25. “In other words, a reviewing court asks whose evidence is more persuasive—the state’s or the defendant’s?” Id. “‘The court, reviewing the entire record, weighs the evidence and all reasonable inferences, considers the credibility of witnesses and determines whether in resolving conflicts in the evidence, the [factfinder] clearly lost its way and 15 Case No. 2022-P-0011 created such a manifest miscarriage of justice that the conviction must be reversed and a new trial ordered.’” Thompkins, supra, at 387, quoting State v. Martin, 20 Ohio App.3d 172, 175, 485 N.E.2d 717 (1st Dist.1983). {¶62} “‘When a court of appeals reverses a judgment of a trial court on the basis that the verdict is against the weight of the evidence, the appellate court sits as a ‘thirteenth juror’ and disagrees with the factfinder’s resolution of the conflicting testimony.’” Id., quoting Tibbs v. Florida, 457 U.S. 31, 42, 102 S.Ct. 2211, 72 L.Ed.2d 652 (1982). “‘The discretionary power to grant a new trial should be exercised only in the exceptional case in which the evidence weighs heavily against the conviction.’” Id., quoting Martin at 175. {¶63} Mr. Lusane challenges the credibility of Ofc. Womack’s and Lt. Gaydosh’s trial testimony. However, this court is not in a position to view the witnesses who testified below, observe their demeanor, gestures, and voice inflections, and use those observations in weighing the credibility of the proffered testimony. State v. Thompson, 2016-Ohio-7154, 71 N.E.3d 1219, ¶ 7 (11th Dist.). Thus, in weighing the evidence submitted at a criminal trial, we must give substantial deference to the factfinder’s determinations of credibility. Id. The trier of facts is free to believe all, part, or none of the testimony of each witness appearing before it. State v. Masters, 11th Dist. Lake No. 2019-L-037, 2020-Ohio-864, ¶ 19. {¶64} Despite Mr. Lusane’s efforts on cross-examination, the trial court chose to believe the officers’ testimony. Upon review of the record, we cannot say that the trial court clearly lost its way or created a manifest miscarriage of justice. Accordingly, Mr. Lusane’s conviction for failure to yield is not against the manifest weight of the evidence. 16 Case No. 2022-P-0011 {¶65} Mr. Lusane’s second assignment of error is without merit. {¶66} For the foregoing reasons, the judgment of the Portage County Municipal Court, Kent Division, is affirmed. THOMAS R. WRIGHT, P.J., MATT LYNCH, J., concur. 17 Case No. 2022-P-0011	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483664/	[Cite as Coppa v. Doherty, 2022-Ohio-4059.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY NICHOLAS E. COPPA, CASE NO. 2022-P-0045 Relator, Original Action for Writ of Mandamus - vs - JUDGE BECKY L. DOHERTY, Respondent. PER CURIAM OPINION Decided: November 14, 2022 Judgment: Dismissed Nicholas E. Coppa, pro se, Portage County Justice Center, 8240 Infirmary Road, Ravenna, OH 44266 (Relator). Victor V. Vigluicci, Portage County Prosecutor, 241 South Chestnut Street, Ravenna, OH 44266 (For Respondent). PER CURIAM. {¶1} Pending before this court is relator, Nicholas E. Coppa’s, Complaint for Writ of Mandamus filed on August 19, 2022. Coppa asks this Court to either vacate his sentence or order his resentencing in State v. Coppa, Portage C.P. No. 2020CR00566, and require “the judge * * * to justify why consecutive sentences were necessary.” {¶2} “At the time that an inmate commences a civil action or appeal against a government entity or employee, the inmate shall file with the court an affidavit that contains a description of each civil action or appeal of a civil action that the inmate has filed in the previous five years in any state or federal court.” R.C. 2969.25(A). “The requirements of R.C. 2969.25 are mandatory, and failure to comply with them subjects an inmate’s action to dismissal.” State ex rel. White v. Bechtel, 99 Ohio St.3d 11, 2003- Ohio-2262, 788 N.E.2d 634, ¶ 5. {¶3} An original action for mandamus filed in the court of appeals is considered a “civil action” for the purposes of R.C. 2969.25(A). State ex rel. McGrath v. McDonnell, 126 Ohio St.3d 511, 2010-Ohio-4726, 935 N.E.2d 830, ¶ 3; State ex rel. Hawk v. Athens Cty., 106 Ohio St.3d 183, 2005-Ohio-4383, 833 N.E.2d 296, ¶ 3. {¶4} At the time Coppa filed his Complaint, he was an inmate at the Portage County Jail. Coppa did not attach the affidavit required by R.C. 2969.25(A) to his Complaint. Accordingly, Coppa’s Complaint is dismissed. State ex rel. McDougald v. Greene, 155 Ohio St.3d 216, 2018-Ohio-4200, 120 N.E.3d 779, ¶ 6 (“[w]e [the Ohio Supreme Court] have consistently affirmed the judgments of courts of appeals dismissing inmates’ civil suits against the government when the complaints or petitions have not included a complete affidavit of prior actions”); State ex rel. Parker Bey v. Bur. of Sentence Computation, 166 Ohio St.3d 497, 2022-Ohio-236, 187 N.E.3d 526, ¶ 19. {¶5} Complaint dismissed. THOMAS R. WRIGHT, P.J., MATT LYNCH, J., JOHN J. EKLUND, J., concur. 2 Case No. 2022-P-0045	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491153/	MEMORANDUM OPINION GEORGE L. PROCTOR, Bankruptcy Judge. This case is before the Court upon objection of the debtors to amended proof of Claim No. 4063, filed by Barteroil, S.p.A. The Court held hearings on January 11 and January 16, 1990, and upon the evidence presented, enters the following Memorandum Opinion: FACTS Barteroil, S.p.A., (“Barteroil”), entered into a consulting agreement with Charter Oil Company (“Charter Oil”) dated June 17, 1980, which was extended by letter agreement dated August 31,1981. This contract retained Barteroil as a “general adviser and consultant ... on various business opportunities pertaining to petroleum ... affairs in Italy and in certain other areas of the world.” With respect to compensation, the con-suiting agreement, as amended, provided in relevant part: 2. Compensation. Charter [Oil] shall pay Barteroil for all services rendered by Barteroil, and in reimbursement for all costs and expenses incurred by Barteroil in performing such services, an annual sum of U.S. $140,000 payable in such manner as Barteroil may direct. In addition to this amount, Charter [Oil] shall pay to Barteroil: (i) All reasonable sums for travel, hotel and entertainment expenses previously authorized by Charter [Oil] in performance of services under this agreement. (ii) Such other sums as may be appropriate as consideration for consummated contracts or other beneficial business opportunities brought to Charter solely by Barteroil. Charter Oil Company was the lead company, operating as a holding company of a group of subsidiaries engaged in the oil industry which was referred to as the Charter Oil Group. All the companies in the Oil Group reported to the President of Charter Oil. Charter Oil also had the responsibility for obtaining financing, determining all aspects of the sales, and establishing personnel policies. Charter Oil and New England Petroleum Company (NEPCO), one of the members of the Charter Oil Group, had dealt with National Oil Corporation of Libya prior to 1982. NEPCO was a member of Carey Energy Group which was purchased by Charter during the first half of 1979. Carey Energy owed to National Oil Company of Libya the approximate sum of $175 million dollars. In order for Charter Oil to purchase Carey Energy, it was necessary for it to stay the Bahamian liquidation proceedings of Carey Energy’s subsidiaries by paying the three major creditors of those subsidiaries. National Oil Company of Libya was such a creditor and was paid pursuant to an agreement whereby Brega Petroleum Marketing (“BREGA”), the marketing subsidiary of the National Oil Company of Libya, would ship oil to Charter Oil, and would be paid a substantial premium per barrel over the market price until the debt was paid. Charter Oil fully paid the Carey Energy debt through this agreement in December 1980, and ceased doing business with BREGA. Subsequent to December of 1980 and pri- or to the spring of 1982, Charter Oil’s employees were under instructions from the Charter Company not to do business with Libya. In the early summer of 1982, Richard Bastien, President of NEPCO, asked management of Charter Oil to purchase oil products from BREGA. Charter approved this request and contacted Giuseppe Vicentini of Barteroil to arrange a meeting with Ahmed Ferjani of BREGA to purchase oil products. Vicentini contacted Ferjani by telephone and telex. Vicentini met in Jacksonville 831with the President of The Charter Company and confirmed Charter’s willingness to do business with BREGA. Upon returning to Rome, Vicentini initiated a series of telexes to Ferjani and associates seeking to arrange a meeting between Charter Oil and BREGA to discuss the purchase of oil. The telexes included the names of the Charter representatives: Bastien, Easterlin, and Arnold. Ferjani contacted Arnold and arranged a meeting in the Bahamas on August 22, 1982. The three Charter representatives met with Ferjani and reached a tentative agreement to purchase crude oil from BRE-GA. Vicentini was neither advised of this meeting nor invited to attend. After the meeting Arnold advised Vicen-tini of the status of the Libyan negotiations and of a meeting to be held in London on September 1, 1982, to finalize the agreements between Charter and BREGA for the purchase of crude oil. Vicentini prepared documents concerning means of pricing the Libyan oil and went to London, expecting to participate in the negotiations. One of the Charter representatives met with Vicentini and received the documents prepared by him, but did not invite him to attend or participate in the meeting. Vicentini returned to Rome two days later after conducting other business with Charter but did not learn that a contract with BREGA and Charter had been signed until October, 1982. At the London meeting, Charter Oil Bahamas, Inc. (“COBI”) and Charter Oil Bahamas, Ltd. (“COBL”), entered into agreements to purchase crude oil from Libya effective September 1, 1982. The contract was extended on December 15, 1982, with BREGA delivering 39,740,917 barrels of oil to the Charter Group from October 1, 1982, through January of 1984. During his visit to Jacksonville in October, 1982, Vicentini was advised of the Libyan agreement from Alexander Zechella, the President of Charter Oil. Vicentini asked Zechella to investigate his company’s rights to a commission in connection with the Libyan oil contracts. Zechella in turn requested Jim Francis, Executive Vice President, Operations of Charter Oil, to study the facts surrounding the Libyan contracts to determine if a commission was due Barteroil. Francis concluded, based on memoranda from Bastien and Arnold, that Barteroil was not entitled to a commission. Francis and Vicentini continued to correspond over the next year concerning Bar-teroil’s entitlement to a commission. When The Charter Company and subsidiaries, including Charter Oil, filed Chapter 11 petitions in April, 1984, Barteroil filed a claim, subsequently amended, for commissions in the amount of $5,563,721, based on $.14 per barrel. Debtor maintains that the telephone calls and telexes sent by Barteroil were done so in its consulting capacity, for which it was being paid $140,000 per year, and that this contact was not a “beneficial business opportunity] brought to Charter solely by Barteroil.” The debtor also claims that it had an existing business relationship with Ferjani of the National Oil Corporation of Libya, and any contact by Vicentini with Ferjani was only for convenience. Vicentini retorts that the peculiarities of dealing with Middle Eastern nationalized oil companies, mandates services such as those of Barteroil. Vicentini testified that the major reason Barteroil was engaged by the debtor was to have close, easy access to Ferjani. Both sides failed to have Ferjani testify at deposition or hearing. Apparently the strained relations between the governments of the United States and Libya made such testimony impossible. The testimony of experts at trial revealed that there is no easy standard for determining a commission in the oil industry. Evidence showed that there was a range of $.025 to $.25 per barrel, depending upon the relationship between the parties, and the size and duration of the transaction. This Court is convinced that a commission of approximately $.0125 per barrel 832is reasonable in light of the facts of this case. DISCUSSION The equitable powers of the bankruptcy court have been expressly recognized by the United States Supreme Court. Bank of Marin v. England, 385 U.S. 99, 87 S.Ct. 274, 17 L.Ed.2d 197 (1966). In that case the trustee sought an order holding the bank liable for its payment of checks drawn by the debtor before its bankruptcy but presented for payment after the filing of the bankruptcy petition. The trustee argued that the bank’s payment of the checks was a “transfer,” therefore avoidable by the trustee. The Supreme Court held that although a literal reading of the statute might suggest otherwise, it would be inequitable to make the bank liable to the trustee. The court held that there was “an overriding consideration that equitable principles govern the exercise of bankruptcy jurisdiction.” 385 U.S. at 103, 87 S.Ct. at 277. Several circuit courts have followed this principle: Essential to any analysis of the meaning and policy behind ... the Bankruptcy Code is the recognition that a bankruptcy court is a court of equity. In re Briggs Transportation Co., 780 F.2d 1339, 1343 (8th Cir.1986). See also, In re Ranch House of Orange-Brevard, Inc., 773 F.2d 1166, 1169 (11th Cir.1985); In re Mobile Steel Co., 563 F.2d 692, 698-99 (5th Cir.1977). The cornerstone of the bankruptcy courts has always been the doing of equity. In re Waldron, 785 F.2d 936, 941 (11th Cir.), cert. dismissed, 478 U.S. 1028, 106 S.Ct. 3343, 92 L.Ed.2d 763 (1986); In re Littleton, 888 F.2d 90, 94 (11th Cir.1989) (quoting Waldron, supra.). Bankruptcy courts have used their equitable powers in numerous factually different cases to ensure fairness and equity among parties. See, In re Jarax Intern., Inc., 81 B.R. 715 (Bankr.S.D.Fla.1987) (bankruptcy court may use its equitable power to modify an attorney retaining lien for the protection of the debtor, trustee, and attorney); In re Interstate Restaurant Systems, Inc., 61 B.R. 945, 948 (S.D.Fla.1986) (bankruptcy court not bound to rigidly adhere to procedural formalities and ignore the underlying equities); In the Matter of Triangle Chemicals, Inc., 697 F.2d 1280 (5th Cir.1983) (bankruptcy court has the sound discretion to consider whether a nunc pro tunc order should be issued to validate a previous failure to obtain the requisite court approval). This Court will exercise its equitable powers to bring this case to a fair and reasonable conclusion. The parties to this dispute alternatively claim that the services of Barteroil had everything or nothing to do with the resulting contracts between-the debtor and BREGA. The only witness who could offer this Court definitive evidence as to the role of Vicentini and Barteroil is Ferjani. However, due to the current state of international affairs, sucfy evidence is not forthcoming. Thus, this Court must rely upon the evidence that was presented and fashion an equitable remedy. It is undisputed that Barteroil, through the influence and efforts of Vicentini, had a direct effect on the debtor receiving a valuable contract. The dispute lies as to what the value for those services are. The Court concludes that the reasonable value of these services is $500,000.00, approximately $.0125 per barrel of oil. CONCLUSION A separate order will be entered consistent with this Memorandum Opinion allowing the amended Claim No. 4063 of Barter-oil, S.p.A., in the amount of $500,000.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491154/	ORDER ON OBJECTION TO CLAIM OF BACKER NAVID ALEXANDER L. PASKAY, Chief Judge. THIS is a confirmed Chapter 11 case and the matter under consideration is an Objection to a Proof of Claim filed by Uiterwyk Corporation (Debtor) challenging the allow-ability of Claim No. 1010 filed by Backer Navid (Navid), d/b/a Brothers Trading Firm. The claim, in the amount of $1,150,-256.00, is based on an alleged “civil theft” and conversion of $383,418.72, plus prepetition interest and attorney fees. The Debt- or’s objection is based on the contention that the Debtor is not indebted to the claimant in any amount. The underlying facts which are relevant to the matter under consideration are without dispute, and both Navid and the Debtor agree that the matter could be resolved as a matter of law. These facts, as appear from the Stipulation of the parties, the record, arguments of counsel, and from documentary evidence submitted both by Navid and the Debtor, can be summarized as follows: At the time relevant to this controversy, the Debtor was a general agent for Iran Express Lines (IEL), a corporation engaged in the business of operating sea-going vessels carrying general cargo. According to the agency agreement entered into between IEL and the Debtor (Debtor’s Exh. No. 2), the Debtor was to act as general agent for IEL in the United States between the Gulf and Atlantic coast ports and various ports in the Persian Gulf for the conduct of all the vessels either owned or chartered by IEL. On February 2, 1978, Navid entered into an agreement with the Debtor, acting as agent for IEL, for the shipment of 19 containers of air-conditioning equipment from New York to Khorramshahr, Iran on the “Margitta”, a motor vessel operated by IEL. The air-conditioning equipment was delivered to the Debtor “as general agent for IEL” (Debtor’s Exh. No. 2). In due course, it was loaded on the “Margitta” which left the New York harbor on its journey to Iran. While on the high seas, the Margitta was hit by a typhoon. As a result, some of the cargo on board, including Navid’s equipment, was severely damaged. On June 5, 1978, Navid sent a written claim concerning the damage to his cargo to IEL. (Claimant's Exh. No. 2) On February 20, 1980, Walter A. Rollins, Senior Vice-President of the Debtor, acknowledged that Navid’s cargo was damaged and confirmed that the Debtor received a settlement claim for damage to cargo on the Margitta in the amount of $386,000.00. Rollins stated that the money was for the benefit of the Debtor as agent for IEL; however, he admitted that it was paid to Grindlay Brandts, Ltd., a creditor of IEL whose debt was guaranteed by the Debtor. It is without dispute that Rollins requested that Navid execute a release in exchange for payment of $383,418.72. This release was to relinquish any claims Navid may have against the Margitta, her masters, owners, agents, charters, managers and underwriters from any claim based on damage to the cargo shipped by Navid on the Margitta. (Claimant’s Exh. No. 3) It appears that the release executed by Navid was unacceptable to the insurance company because it was not notarized. For this reason, Rollins requested, and received from Navid, a properly notarized release which was nearly identical to the first release. (Claimant’s Exh. No. 4) In a letter to Navid, Rollins assured him that as soon as the Debtor received sufficient funds from its principal, IEL, Navid’s claim would be paid. The letter expressly provided, however, that any agreements or representations made by the Debtor were 856strictly in the Debtor’s capacity only as agents for IEL and without any liability to the Debtor. (Claimant’s Exh. No. 9) On October 3, 1979, the Debtor received a check from the insurance carrier, Lowndes Lambert Group, Ltd., in the amount of $200,000.00, less a commission of $2,000.00, or a net of $198,000.00. The Debtor then received a second check in the amount of $183,418.72, less a commission of $1,834.18, or a net of $181,548.54. (Claimant’s Exh. Nos. 5 and 6) Thus, the Debtor received the total sum of $379,-548.54 from the insurance carrier in settlement of the claims that arose during the Margitta’s voyage from New York to Khor-ramshahr, Iran. It is without dispute that Navid was not a named insured on the insurance policy carried by IEL, nor was he a third-party beneficiary of the contract between IEL and its insurance carrier. Navid had no contract with an insurance carrier to cover his air-conditioning equipment while in transit. It is equally without dispute that the money paid in settlement of the insurance claim by the insurance carrier was paid to the Debtor only as agent for IEL, the operator of the Margitta. Navid never received any payments on his claim for the cargo damage, and having released his claim against IEL and its agent, he apparently no longer has a valid, enforceable claim against IEL or anyone else covered by the release, including the Debtor. These are the salient facts on which the claim of civil theft filed by Navid in this Chapter 11 case is based. This claim is challenged by the Debtor on the basis that it is not indebted in any amount to Navid because it merely acted as an agent for a disclosed principal, and because Navid was not entitled to any of the insurance proceeds which were paid in settlement of a claim of IEL, not of Navid. Although Navid’s claim is based primarily on civil theft and conversion, this Court is satisfied that it is appropriate to first examine the issue of agency, as the determination of that issue may moot the claims of civil theft and conversion. It is undisputed that the Debtor was an agent for IEL, and this Court is satisfied that Navid was aware at all times that the Debtor acted in an agency capacity for a disclosed principal, IEL. The contract to carry Navid’s air-conditioning equipment was between Sea-Man-Pak Co., Ltd., as agent for IEL, and Navid. Navid’s air-conditioning equipment was delivered to the Debtor, again only in its capacity as agent for IEL. The Debtor did not own or charter the Margitta; instead, it acted as a general agent in the United States for IEL, which operated the Margit-ta. After Navid’s cargo was damaged on the Margitta, Navid submitted a claim for damages to IEL, not to its agent, the Debt- or. Navid clearly sought satisfaction for IEL only, not from the Debtor. It is generally accepted principle that when a contract is made with an agent who is known to be acting as such, and the principal is disclosed, the agent is not personally liable on the contract, without his consent. 2 Fla.Jur.2d, Agency and Employment, § 80, p. 236. It is the disclosed principal, not the agent, who is legally bound and responsible for obligations created by the transaction. In this instance, there is no doubt that Navid knew at all times that the Debt- or was acting only as an agent for IEL. Navid certainly had at least a constructive knowledge of this agency relationship because of his experience in shipping cargo and his knowledge of the shipping industry in general. More importantly, however, this Court is satisfied that all of the documents in evidence leave no doubt that Navid had more than constructive knowledge, but in fact an actual knowledge, of this agency relationship. In sum, this Court is satisfied that the Debtor acted at all times as an agent for IEL, a disclosed principal, and that this agency relationship was known to Navid. Therefore, the Debtor cannot be held liable for claims that arose out of a contract with the agent acting on behalf of the disclosed principal. It is, therefore, ORDERED, ADJUDGED AND DECREED that the Objection of the Debtor to 857Navid’s proof of claim is sustained, and the claim is disallowed. DONE AND ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491372/	OPINION EDWARD R. GAINES, Bankruptcy Judge. Before the Court for consideration is the Objection to Claim of Exempt Property filed by Builders Supply Company. The issue before the Court is whether or not the objection is time-barred due to the failure of Builders Supply Company to file said objection timely pursuant to Bankruptcy Rules 9006(b)(1) and (b)(3) and 4003(b). The parties have submitted this issue to the Court upon memoranda without any hearing or oral argument. Having reviewed the pleadings, memoranda of counsel for the parties, and additional law not cited in said memoranda, the Court finds that the objection of Builders Supply Company was not filed timely and should be denied. I. FACTS The debtor filed for relief pursuant to Chapter 7 of the Bankruptcy Code on February 27, 1991. The first meeting of creditors pursuant to § 341(a) of the Bankruptcy Code was first duly scheduled for April 5, 1991. Builders Supply Company did not appear at said meeting. In the original schedules filed by the debtor various items of personal property and real property were claimed as exempt to the extent of $11,102.00. Builders Supply Company filed its objection to the claim of said exempt property on June 5, 1991, which date was sixty-one (61) days after the date first scheduled for the meeting of creditors. II. LAW Bankruptcy Rule 4003 deals with the claim of exemptions by a debtor and objections thereto by the trustee or any creditor. Bankruptcy Rule 9006(b) deals with enlargement of the time constraints set forth under Bankruptcy Rule 4003. There is a split in authority as to whether a debtor may claim property as exempt where an objection is filed outside the thirty day deadline set by Bankruptcy Rule 4003. The recent case of Taylor v. Freeland & Kronz, 938 F.2d 420 (3rd Cir.1991), petition for cert. filed, — U.S. -, 112 S.Ct. 632, 116 L.Ed.2d 602 (1991), contains a thorough discussion of this issue and the three different approaches taken by various courts on this question. The first approach is the “literal approach” whereby a court will not examine the merits of a claimed exemption if an objection thereto is not filed within the strict time constraints set forth by the aforesaid bankruptcy rules. The second approach holds that an objection is not necessary if the debtors claimed exemption is invalid under § 522(b) of the Bankruptcy Code. The third approach, a middle ground in this split in authority, holds that a Court should exam*2ine a claimed exemption, even when no timely objection has been filed, to determine if there exists a good-faith statutory exemption. As set forth in the Kronz case cited above, the Third Circuit Court of Appeals adopted the first or literal approach holding that if no objection is filed within 30 days after the first meeting of creditors, and no enlargement of time to file an objection pursuant to Bankruptcy Rule 9006 has been sought by the trustee or creditor, the property claimed as exempt is exempt. The Tenth Circuit Court of Appeals also adopted the strict or literal approach on this issue. See In re Brayshaw, 912 F.2d 1255 (10th Cir.1990). The Fifth Circuit Court of Appeals in the case of Neeley v. Murchison, 815 F.2d 345 (5th Cir.1987), applied the strict approach toward deadlines for dischargeability complaints. The Court stated that Rule 9006(b)(3), the same rule which is applicable for enlargements of time for objections to claimed exemptions under Bankruptcy Rule 4003(b), explicitly excepts Bankruptcy Rule 4007 from the excusable neglect standard, permitting time enlargement only to the extent and under the conditions stated in Bankruptcy Rule 4007. In Neeley, the Fifth Circuit held that an objection to dis-chargeability was time-barred even when the clerk’s office had informed the creditor that no deadline had been set. This reflects the Fifth Circuit’s propensity for strict adherence to deadlines under the Bankruptcy Rules. Although not elaborating these issues, the Fifth Circuit in the case of In re Kolstad, 928 F.2d 171 (5th Cir.1991), cert. denied, — U.S. -, 112 S.Ct. 419, 116 L.Ed.2d 439 (1991) referenced Bankruptcy Rule 9006(b) in stating that a creditor who fails to file its proof of claim before the bar date, and who fails timely to request an extension of time so to file, may not file a late claim and participate in the voting or distribution from the debtor’s estate. The Fifth Circuit stated that the consequences for missing various bankruptcy deadlines are severe and also held that the deadlines have a purpose, to-wit: to enable a debtor and his creditors to know what parties are making claims against the estate, etc. Builder Supply Company cited In re Young, 806 F.2d 1303 (5th Cir.1987) as supporting authority for its position on this question. Since the Neeley and Kolstad decisions were rendered by the Fifth Circuit subsequent to Young, this Court is of the opinion that the Fifth Circuit would apply the literal or strict approach which would bar the objection to claim of exempt property filed by Builders Supply Company herein. III. CONCLUSION While these guillotine-deadlines are harsh and often unjustifiable in the opinion of this Court, changes in the law are in the exclusive province of Congress and not bankruptcy judges. Based on the foregoing, this Court concludes that the Objection to Claim of Exempt Property filed by Builders Supply Company is time-barred and should be overruled. An order shall be entered consistent with these findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 58 and Bankruptcy Rule 9021.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491373/	ORDER JAMES E. RYAN, Chief Judge. On this 26th day of November, 1991, Creditor Dolores Gammill’s Motion for Partial Summary Judgment and Brief in Support thereof filed October 25, 1991 (Docket Entry No. 101) and the Response thereto filed by the Debtor on November 14, 1991 (Docket Entry No. 103) came before this Court for consideration. After review of these pleadings, this Court does hereby enter the following Findings of Fact and Conclusions of Law in conformity with Rule 7052, Fed.R.Bankr.P., in this core proceeding: STATEMENT OF ISSUE The issue presented by the Motion is whether the Debtor’s interest in an annuity policy is exempt under Oklahoma law and therefore the Bankruptcy Code or whether the Oklahoma statute that establishes this exemption is unconstitutional as being a violation of the contracts clause of the United States Constitution. FINDINGS OF FACT 1. Upon filing a voluntary Petition seeking relief under Chapter 11 of the Bankruptcy Code on April 18, 1991, the Debtor submitted a Schedule of Exempt Property which included the Debtor’s interest in an annuity policy issued by New York Life Insurance & Annuity Corporation for the stated value of $173,000.00. 2. The Debtor and the movant were divorced on July 6, 1979 as modified by the Oklahoma Court of Appeals on May 12, 1985. The annuity was issued on January 13, 1986. CONCLUSIONS OF LAW A. Debtor claims an exemption of the annuity pursuant to Okla.Stat.Ann. tit. 31, Sec. 1(A)(20) which establishes an exemption from “attachment or execution and every other species of forced sale for the payment of debts” for retirement plans, *29including individual retirement accounts and annuities, “provided, such interest shall be exempt only to the extent the contributions by or on behalf of a participant were not subject to federal income taxation to such participant at the time of such contributions.” It has not previously been established with the certainty required by law that the annuity at issue meets the requirements of this statute. However, the movant is challenging the Debtor’s ability to exempt this annuity on the basis of a line of cases emanating from the United States Bankruptcy Court in the Northern District of Oklahoma which finds that the Oklahoma statute found at Okla.Stat.Ann. tit. 31, Sec. 1(A)(20) is unconstitutional as violating the contracts clause of the United States Constitution. See In re Garrison, 108 B.R. 760 (Bankr.N.D.Okla.1989); In re Walker, 108 B.R. 769 (Bankr.N.D.Okla.1989) and In re Ree, 114 B.R. 286 (Bankr.N.D.Okla.1990). B. We note the unpublished reversal of the Walker case by the United States District Court for the Northern District of Oklahoma. See unpublished order Walker, Case No. 89-C-1070-C entered June 26, 1990. We concur with the holding in this case and also with the more detailed and well reasoned opinion contained in the case of In re Ridgway, 108 B.R. 294 (Bankr.N.D.Okla.1989) which finds that, in general, individual retirement accounts, and presumably annuities, that are contemplated under the Oklahoma exemption statute are exempt. These vehicles for retirement savings are not subject to the ERISA statute and therefore are not preempted as ERISA qualified retirement plans have been deemed to be in this District. See In re Weeks, 106 B.R. 257 (Bankr.E.D.Okla.1989). The constitutionality argument raised by the movant and the line of cases upon which she relies are not persuasive to this Court since the criteria for establishing a violation of the clause required by the United States Supreme Court have not been met. See Energy Reserves Group, Inc. v. The Kansas Power & Light Co., 459 U.S. 400, 103 S.Ct. 697, 74 L.Ed.2d 569 (1983). Thus, while substantial factual questions still exist as to whether the annuity at issue qualifies for exemption under Okla. Stat.Ann. tit. 31, Sec. 1(A)(20), we are not persuaded by the legal position taken in the Motion for Partial Summary Judgment. IT IS THEREFORE ORDERED that Creditor Dolores Gammill’s Motion for Partial Summary Judgment and Brief in Support Thereof filed October 25,1991 (Docket Entry No. 101) is hereby denied. The hearing currently set for November 27,1991 at 10:00 a.m. to consider the Objection to Exemptions filed by Dolores Gam-mill (Docket Entry No. 79) and the Response thereto filed by the Debtor (Docket Entry No. 85) shall be conducted as previously scheduled.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491374/	ORDER ON APPLICATION OF THE IRS FOR PAYMENT OF ADMINISTRATIVE EXPENSE ALEXANDER L. PASKAY, Chief Judge. THIS CAUSE came on for hearing with notice to all parties in interest upon an Application of the Internal Revenue Service (IRS) for payment of administrative expenses in the above-captioned Chapter 11 case. The facts are without dispute and T.J. Lunsford, Jr., d/b/a T.J. Express (Debtor) admits that he is in fact indebted to the IRS for taxes accrued post-Petition in the amount claimed by the IRS. The Debtor has raised the somewhat novel proposition in opposition to the Application claiming that post-Petition tax liabilities are not chargeable as administrative expenses because they are excepted from the application by Section 503. The argument of the Debtor runs as follows. 11 U.S.C. Section 503(b)(1)(B) provides that any tax incurred by the estate shall be allowed as an administrative expense unless the tax is a kind specified in 11 U.S.C. § 507(a)(7). (emphasis added) Specifically, Section 507(a)(7)(C) accords priority to taxes which were “required to be collected or withheld for which the Debtor is liable in whatever capacity”. The Debt- or contends that a literal reading of Section 507(a)(7) compels the conclusion that the FICA and FUTA taxes incurred postpetition by a debtor-in-possession fall within this category and, therefore, are excepted from the operation of Section 503(b)(1)(B). While the proposition urged by the Debt- or may appear to be attractive at first blush, it does not bear close analysis. First, the Debtor’s argument fails to take *48into account the difference between the “debtor” and the “estate”. Section 507(a)(7)(C) includes taxes for which the debtor is liable. The use of the term “debt- or” implies that this Section refers only to prepetition tax liabilities and not to liabilities of a “debtor-in-possession”, a separate legal entity. Moreover, Section 503 provides for the allowance of administrative expenses incurred by the “estate”. This necessarily must refer to postpetition liabilities since there is no bankruptcy estate until after the commencement of the case. Since the Code provides for allowance of postpetition taxes incurred by the “estate” as administrative expenses under Section 503(b)(1)(B) as distinguished by tax liability of the Debtor, the exception for the operation of Section 503 does not apply to taxes incurred by the estate postpetition but is limited to the taxes incurred by the “debt- or” prepetition. United States v. Friendship College, Inc., 737 F.2d 430 (4th Cir.1984). This leaves for consideration the issue of whether interest accrued on the tax liability for unpaid post-petition taxes should be allowed as an administrative expense. As a general proposition, postpetition liabilities incurred by the estate do not earn interest. Payment of interest on post-petition taxes is not mentioned by the Code. It is equally clear, however, that by virtue of specific statutory provisions the Government is entitled to interest on past due taxes until they are paid. 26 U.S.C. § 6601. There is no logical reason to treat post-petition taxes and the interest accruing on the same unpaid postpetition taxes differently. The legislative history of Section 503 suggests that interest should also be accorded to first priority status. See Report of the Senate Judiciary Committee, S.Rep. No. 95-989, 95th Cong., 2d Sess. (1978), at 66, Reprinted in, 1978 U.S.Code Cong, and Admin.News, 5787-5852. In addition, case law supports the conclusion that interest accrued on unpaid postpetition taxes should also be treated an administrative expense status. United States v. Friendship College, supra; In re Roy Amerson, Inc., 90 B.R. 526 (Bankr.M.D.Fla.1988). Based on the foregoing, this Court is satisfied that the Debtor’s argument is without merit. Accordingly, it is ORDERED, ADJUDGED AND DECREED that the Application for Administrative Expense filed by the IRS be, and the same is hereby, approved. It is further ORDERED, ADJUDGED AND DECREED that the administrative expense claim of the IRS for FICA, FUTA and highway use taxes be, and the same is hereby, allowed as an administrative expense with interest pursuant to 11 U.S.C. § 503(b)(1)(B), without prejudice to the Debtor to challenge the amount of such administrative expense claim, if so deemed to be advised. It is further ORDERED, ADJUDGED AND DECREED that the postpetition tax claim of the Government shall be paid in full as condition precedent to confirmation of any plan of reorganization unless the Government accepts different treatment. DONE AND ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491375/	MEMORANDUM DECISION AND ORDER SIDNEY M. WEAVER, Chief Judge. THIS CAUSE came on for trial before the Court on November 20, 1991. The Court has heard the testimony presented, has examined the documents submitted in evidence, has observed the candor and demeanor of the witnesses, and has considered the argument presented by counsel for the parties. The Court makes the findings of fact and conclusions of law which are hereinafter set forth. It should first be noted that the Defendant, BROTHERS TRUCK SALES, INC., (hereinafter referred to as BROTHERS), demanded a trial by jury. However, prior to the commencement of the case, counsel for BROTHERS announcéd in open court and on the record of the proceedings, that the demand for trial by jury was waived by BROTHERS. COLE & STEVENS ROOFING CO., INC. (hereinafter referred to as the DEBTOR) filed a voluntary petition under Chapter 7 of the Bankruptcy Code. Prior to the filing of the bankruptcy petition, the DEBTOR was engaged in the business of a roofing contractor. The Plaintiff, MARI-KA TOLZ, (hereinafter referred to as TOLZ), is the Trustee in the Chapter 7 case. The DEBTOR’S assets consisted among other things, of machinery, fixtures, equipment, inventory, and seventeen motor vehicles including a 1980 Ford Tanker Truck 61which is the subject of the dispute in this adversary case. TOLZ sought authorization from this Court to employ an auctioneer to conduct an auction sale of the DEBTOR’S assets, including the truck in issue. Pursuant to an Order entered by this Court on June 27, 1991, the Trustee employed HARRY P. STAMPLER, INC., Auctioneer to conduct the auction sale. (See TOLZ Exhibit 1.) On July 3, 1991, TOLZ, through her counsel (whose employment had previously been authorized by this Court) served a Notice of Proposed Sale with respect to the DEBTOR’S assets, including the truck which is the subject matter of the instant dispute. (See TOLZ Exhibit 2.) The Notice provided that an auction sale would be held on Saturday, July 27, 1991, at 11:00 o’clock a.m. at the business premises of the DEBTOR. It further provided that items to be sold would be available for inspection on the date of the sale commencing at 9:00 o’clock a.m. or could be inspected prior to the sale date by contacting the Trustee for a special appointment. The Notice then provided: “All items are to be sold ‘as is’ for cash at the time of sale, unless other arrangements for payment are made with the Trustee. There shall be a ten percent (10%) buyer’s premium payable to the auctioneer at the time of the sale.” (Emphasis supplied.) BROTHERS was a registered bidder at the auction sale. The auctioneer testified that each registered bidder received a bid package which included written terms and conditions of the auction sale. One of the written terms and conditions was that all items being sold were sold “as is”, with all sales being final on the fall of the auctioneer’s gavel. According to the auctioneer, the terms of the sale were also orally announced prior to the commencement of the sale. That all items were being sold “as is” was clearly understood by BROTHERS whose representative testified that it was in the business of buying and selling vehicles, that it had purchased vehicles at previous “as is” auction sales, that it knew the sale in this case was on an “as is” basis, and in fact representatives of BROTHERS had inspected the truck which is in issue in this case before bidding on it. BROTHERS was the high bidder at the auction sale for the truck which is now in dispute with a bid of $11,000.00. This amount would be subject to the auctioneer’s commission and applicable State of Florida sales tax. Florida Law provides that a sale by auction is complete when the auctioneer so announces by the fall of his gavel or in some other customary manner. Section 672.328(2), Florida Statutes (1989). It is the fall of the auctioneer’s gavel which creates the binding contract between the seller and the high bidder and the high bidder cannot later withdraw his already accepted bid. See Rohlfing v. Tomorrow Realty and Auction, 528 So.2d 463 (Fla. 5th DCA 1988). Subsequent to the acceptance of BROTHERS high bid for the truck in dispute, BROTHERS notified the auctioneer that the truck did not have a V.I.N. (Vehicle Identification Number) plate. A representative of BROTHERS testified that this notification to the auctioneer occurred the date of the auction sale shortly after BROTHERS high bid on the truck had been accepted. The auctioneer’s representative testified that the notification concerning the missing VIN plate did not occur until the Monday following the auction. It is unnecessary for the Court to resolve this minor conflict in the testimony because in either event, the notification to the auctioneer of the missing VIN plate on the truck did not take place until after the fall of the auctioneer’s gavel in an “as is” auction sale and thus the binding contract between TOLZ and BROTHERS had already been created. The Court doubts that once the binding contract between TOLZ and BROTHERS had been created, that TOLZ had any obligation whatsoever to have the missing VIN plate on the truck replaced. However, it is unnecessary to decide that issue. But, the Court does note that from the testimony presented, whether she had a legal obligation to do so or not, TOLZ and her representatives actually did undertake to have a replacement VIN plate issued by the Flor62ida Department of Motor Vehicles and affixed to the truck in question. Obviously this dispute is before the Court because BROTHERS refused to pay its bid price (plus the auctioneer’s commission and applicable State of Florida sales tax) subsequent to the auction sale. TOLZ has sued BROTHERS to require it to specifically perform, that is to require it to make payment of the bid price (plus the auctioneer’s commission and applicable State of Florida sales tax) and take possession of the truck in issue, namely a 1980 Ford Tanker Truck Vehicle Identification Number U91WVHA6985. A high bidder who refuses to consummate a purchase at auction may be subject to specific performance. See In re Governor’s Island, 45 B.R. 247 (Bkrtcy.E.D.N.C.1984) and Frazier v. Ash, 234 F.2d 320 (5th Cir.1956). The Court finds that TOLZ is entitled to the relief sought in her Adversary Complaint and that the Defendant’s Counterclaim should be dismissed. One further matter should be addressed by this Court and that is the defense asserted by BROTHERS that this is a non-core proceeding and thus this Court cannot enter a Final Order or Judgment. 28 U.S.C. § 157(b)(2) provides: “Core proceedings include, but are not limited to— (A) Matters concerning the administration of the estate; (0) Other proceedings affecting the liquidation of the assets of the estate ...” Nothing can be more fundamental to the administration of a Chapter 7 liquidation case than liquidation of the DEBTOR’S assets by the Chapter 7 Trustee. It is quite clear to this Court that the conduct of an auction sale by a Chapter 7 Trustee, in this case TOLZ, through the auctioneer whom she employed with authorization of this Court, after appropriate notice as required under the Bankruptcy Code and Rules, is a core proceeding relating to the administration of the Chapter 7 estate and the liquidation of the estate’s assets. The Court finds this proceeding to be core. Based upon the foregoing findings of fact and conclusions of law, the Court orders and directs BROTHERS to specifically perform its contract with TOLZ. Within ten (10) days from the date of the entry of this Memorandum Decision and Opinion, BROTHERS shall pay to TOLZ the sum of its bid, namely $11,000.00, plus the auctioneer’s commission and applicable State of Florida sales tax, and take possession of the subject truck. Should it fail to do so, a Final Judgment for the relief sought by TOLZ shall be entered by this Court without the necessity of further hearing upon the filing of an affidavit by TOLZ or her counsel confirming the failure of BROTHERS to specifically perform its contract with TOLZ. Costs in the amount of $120.00 representing the Clerk’s filing fee for this adversary proceeding are taxed in favor of TOLZ and against BROTHERS. DONE AND ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491376/	DECISION RE INSURANCE PROCEEDS BURTON PERLMAN, Chief Judge. Debtors filed a motion for turnover of insurance proceeds from fifth layer excess liability insurance carriers, A.I.G. Insurance and Lexington Insurance Companies (hereinafter, “Insurers”). The coverage is for up to $10 million in damages and expenses incurred in connection with asbestos-related personal injury claims manifesting themselves from February 1, 1978 through January 1,1979. The Insurers are only required to make payments under the policies after debtors have exhausted the policy limits of $42.5 million of underlying asbestos-related personal injury insurance. Debtors submitted a claim to the Insurers, and the Insurers have objected to elements of the claim. Specifically, the Insurers contend that the amount paid out by debtors in settlement of certain claims is not reimbursable because the only evidence in those cases that the injury was diagnosed within the applicable time period, is contained in the complaint filed against debtors, and the Insurers say that this is not probative. The Insurers also assert that, pursuant to the terms of the policies, Liberty Mutual Service Fees and the ACF surcharges are not reimbursable. This court has jurisdiction of this matter pursuant to 28 U.S.C. § 1334(b) and the General Order of Reference entered in this District. This is a core proceeding arising under 28 U.S.C. § 157(a). Debtors and the Insurers have agreed that this court is the appropriate forum for resolution of the controversy with respect to the disputed insurance coverage. Eagle-Picher in the past has sought coverage under its primary and excess policies for asbestos claims asserted against it. Questions arose regarding which policy covered the claims. Eagle-Picher filed two declaratory judgment actions against its carriers seeking a declaration of the rights, liabilities, and obligations of the parties under the insurance policies. See, Eagle-Picher Indus., Inc. v. Liberty Mutual Ins. Co., 523 F.Supp. 110 (D.Mass.1981), aff'd as modified, 682 F.2d 12 (1st Cir.1982), cert. denied sub nom. Froude v. Eagle-Picher Indus., Inc., 460 U.S. 1028, 103 S.Ct. 1279, 75 L.Ed.2d 500 (1983) and Eagle-Picher Indus., Inc. v. Liberty Mutual Ins. Co., 460 U.S. 1028, 103 S.Ct. 1280, 75 L.Ed.2d 500 (1983) (hereinafter Eagle-Picher I). In light of Eagle-Picher I and faced with the possibility of further protracted and costly litigation, Eagle-Picher and the Insurers negotiated a settlement with respect to the coverage for asbestos-related claims that may have occurred during the Insurers’ term of policy coverage. In 1984, the Insurers separately entered into identical confidential settlement agreements with Eagle-Picher. Under those agreements, the parties agreed that the application and interpretation of the Insurers’ policies with respect to claims would be governed by Eagle-Picher I. Thus, the agreements said at p. 1, para. 1: “The application and interpretation of the policies shall be governed by (i) the decision of the United States Court of Appeals for the First Circuit in the Eagle-Picher insurance coverage litigation and (ii) the terms of the Agreement.” The parties then compromised and agreed upon a mechanism for determining the date of occurrence, determinative of one of the issues here in controversy, of the asbestos-related bodily injuries alleged in the underlying complaints. Section 1.2. of both settlement agreements state: 2. The date of occurrence for any Asbestos-Related Disease Claim against Eagle-Picher shall be the date five years prior to the first date of the actual diagnosis of such disease. In the event the first date of actual diagnosis is not known when the claim is made or the action is filed, the date of occurrence 251shall be deemed to be the date five years prior to (i) the date the claim or action is received by Liberty Mutual Insurance Company [Eagle-Picher’s primary insurance carrier] or (ii) the date of death, whichever occurs first, provided, however, that if the first date of actual diagnosis is subsequently determined for such a claim or action, then the date five years prior thereto shall become the date of occurrence. To establish that a claim has occurred during the Insurers’ period of policy coverage and is thus covered under those policies, evidence had to be provided of: (1) the first date of actual diagnosis; (2) the date that Liberty Mutual received the underlying claim; or (3) the date of death. Liberty Mutual was Eagle-Picher’s primary carrier in debtors’ underlying insurance coverage. When the Liberty Mutual underlying coverage was exhausted, Eagle-Picher entered into an entirely separate claims-handling agreement with Liberty Mutual whereby Liberty Mutual continued to handle the entire defense, management and administration of a sizable percentage of asbestos claims. Liberty Mutual received approximately $450.00 per case for administering and managing each case. Subsequent to the negotiation of the confidential settlement agreement in 1984, Eagle-Picher joined the Asbestos Claims Facility (hereinafter ACF), which was established in late 1985. The ACF was created by certain asbestos defendants and their insurers to act as a central clearinghouse for asbestos claims, administering, defending, and settling them, and then determining who pays how much for the associated costs. Each participant paid a share of costs of ACF based upon a predetermined formula, incurred in administering, defending, and diagnosing asbestos-related claims. In other cases where outside defense counsel were retained by debtors, Liberty Mutual provided management and administrative services. Debtors have requested reimbursement for costs paid, respectively, to Liberty Mutual on account of the claim’s handling agreement, and to ACF for its surcharges. The Insurers have declined payment of the amounts requested. The controlling language in the agreements was, at p. 2, para. 3: “For purposes of determining Eagle-Picher’s right to reimbursement from the Insurers for ‘ultimate net loss’ as defined in the policies, the aggregate limits in the underlying policies shall be exhausted, or shall be deemed to be impaired or exhausted, in accordance with the terms of paragraph 2 above.” Thus we are told that the definition of “ultimate net loss” is to be found in the “policies”. “Policies” here refers to Policy No. 75-100102 issued by AIU, and Policy No. 5512868 written by Lexington Insurance Co. The parties agree that both such policies incorporate definitions contained in an underlying Lloyd’s Policy No. 75-16280-3. That policy contains the definition of ultimate net loss to be applied here: “The terms ‘Ultimate Net Loss’ shall mean the total sum which the Assured, or his Underlying Insurers as scheduled, or both, become obligated to pay by reason of personal injuries, property damage or advertising liability claims, either through adjudication or compromise, and shall also include hospital, medical and funeral charges and all sums paid as salaries, wages, compensation, fees, charges and law costs, premiums on attachment or appeal bonds, interest, expenses for doctors, lawyers, nurses and investigators and other persons, and for litigation, settlement, adjustment and investigation of claims and suits which are paid as a consequence of an occurrence covered hereunder, excluding only the salaries of the Assured’s or of any underlying insurer’s permanent employees. The Underwriters shall not be liable for expenses as aforesaid when such expenses are included in other valid and collectible insurance.” Eagle-Picher ultimately submitted to the Insurers a claim for the asbestos-related injury complaints. After deducting the $42.5 million in underlying coverage which had been exhausted, Eagle-Picher sought reimbursement from the Insurers for the 252remainder. Of the amount originally sought, the Insurers paid $4,600,933.00 to Eagle-Picher pursuant to this court’s Order of August 21, 1991. The Insurers refuse to pay: (1) claims totaling $853,074.00 that Eagle-Picher submitted to the Insurers based upon a complaint diagnosis date; (2) Liberty Mutual’s service fees, amounting to $1,937,206.00; and (3) the ACF surcharges amounting to $1,010,210.00. 1. Date of Diagnosis. We have above quoted the paragraph of the agreement which is here pertinent. We are not informed specifically the language employed by claimants in complaints filed against debtors, but both parties to the present controversy argue on the basis that there were 104 complaints filed containing an allegation of “the first date of the actual diagnosis of such disease.” Such allegations are asserted by debtors, if the date falls within the time period of coverage, to warrant payment by the Insurers. Debtors argue, first, simply that the assertion of a diagnosis date in a complaint means that “the first date of actual diagnosis” is known. Secondly, debtors argue that the law of the State of Ohio is here applicable, and state law per Willoughby Hills v. Cincinnati Insurance Co., 9 Ohio St.3d 177, 180, 459 N.E.2d 555, 558 (1984) holds that allegations in pleadings are sufficient to lay upon an insurer the duty to defend a claim arguably within policy coverage. Debtors say that by the same token, complaint allegations should be sufficient to require the indemnification by the Insurers here sought. In response, the Insurers say that allegations in a complaint of a date of diagnosis plainly are outside the language of the agreement. To support their position, the Insurers present authority that the obligation of an insurer to indemnify requires proof of actual rather than alleged facts. See Cooper Laboratories, Inc., v. International Surplus Lines, Co., 802 F.2d 667, 675 (3d Cir.1986); Air Products and Chemicals, Inc. v. Hartford Accident and Indem. Co., 707 F.Supp 762, 766 (E.D.Pa.1989), on reconsideration in part, 1989 WL 73656, 1989 U.S.Dist. LEXIS 7435 (June 30, 1989). As rebuttal to debtors’ position that authority regarding duty to defend is here applicable, the Insurers argue that such authority is inapplicable here because the duty of an insurer to defend is broader than its duty to indemnify. See Reliable Springs Co. v. St. Paul Fire & Marine Ins. Co., 869 F.2d 993, 994 (6th Cir.1989); Morton v. Safeco Ins. Co., 905 F.2d 1208, 1211 (9th Cir.1990). The court finds itself in the curious position of having to tell the parties who negotiated an agreement what they meant by the language they employed, for there is no proposition more firmly established in the law that in interpreting a contract the court looks to the intention of the parties. See e.g., Aultman Hosp. Ass’n. v. Community Mut. Ins. Co., 46 Ohio St.3d 51, 53, 544 N.E.2d 920, 923 (1989). See also 17A Am.Jur.2d Contracts § 350 at 364-65 (1991); 18 O.Jur.3d Contracts § 136 at 19 (1980). The language which the parties employed seems perfectly clear. The policies in question were not general indemnification policies for all asbestos related claims. Instead, they were for such claims which arose in a circumscribed time period, the period of coverage. The parties reached agreement upon that time period. But it was also necessary for the parties to reach agreement about how it was to be established that a claim was within the period of coverage. The parties agreed that for a claim to be within the covered time period, a date of occurrence of disease would be assumed to be five years prior to the first date of actual diagnosis. The question before us turns on what the parties meant by the phrase “actual .diagnosis.” (In their agreement, they provided alternatives in the event that the date of “actual diagnosis” was “not known.” So in reaching their agreement, they contemplated that in some instances, the date of “actual diagnosis” would “not” be “known”.) The parties probably would not disagree that actual diagnosis means an opinion by a physician of asbestos related disease. The 253difference between the contending parties is whether, on the one hand, a dated document comprising a medical opinion must be presented in support of a claim, or whether it is sufficient if the existence of such a medical report is alleged in a complaint. We are impressed by the assertion of the Insurers that debtors initially submitted 199 claims based upon complaint allegations alone, and that after refusal of the Insurers to pay those claims, debtors obtained medical reports establishing the diagnosis dates for 95 of the claims. It seems fair to infer from this that debtors are unable to secure medical reports for the remaining 104 claims. They now contend that they are entitled to indemnification without such support. After considering the arguments of the parties, but most importantly, the language of the agreements themselves, we hold that mere allegation in a complaint of a date of diagnosis is insufficient to warrant indemnification. See, e.g., Reliance Ins. Co. v. Kent Corp., 896 F.2d 501, 503 (11th Cir.1990); C.H. Heist Caribe Corp. v. American Home Assur. Co., 640 F.2d 479, 483 (3d Cir.1981) (distinguishing between the duty to defend and the duty to indemnify); Air Products and Chemicals, Inc. v. Hartford Accident and Indem. Co., 707 F.Supp. 762, 766 (E.D.Pa.1989), on reconsideration in part, 1989 WL 73656, 1989 U.S.Dist. LEXIS 7435 (June 30, 1989) (citing C.H. Heist). Instead, evidence by way of a documented medical opinion was intended in the agreement. There is no reason why debtors should not be required to present direct evidence of “actual diagnosis”. That is what the contract in plain language says. See Allen v. Standard Oil Co., 2 Ohio St.3d 122, 124, 443 N.E.2d 497, 499 (1982) (contract interpretation unnecessary where language of contract is unambiguous). Notwithstanding our holding, debtors are not precluded from recovery, although they say that considerable effort on their part will be required, because the contract itself provides alternatives in the event that debtors are unable to provide an "actual diagnosis”. 2. Ultimate Net Loss Issues. As depicted above, debtors entered into agreements with Liberty Mutual and with the ACF. These entities on a contract basis handled the disposition of the many asbestos related claims that were filed against debtors. Debtors now contend that these expenditures are within the present insurance coverage because they represent sums paid by debtors in defending asbestos claims, and are specifically contemplated by the definition of “ultimate net loss” appearing in the coverage and quoted at pp. 251 and 252 above. Debtors say that involved are expenses for "... lawyers ... and other persons, and for litigation, settlement, adjustment and investigation of claims.” Using this language, debtors argue that if the fees in question are for attorneys, they are expenses as expressly provided for lawyers. If they are related unallocated expenses, i.e. not for lawyers, then they are expenses to “other persons” for services mentioned in the defining clause. Debtors argue that by entering into an agreement with Liberty Mutual and with the ACF, they saved the Insurers considerable amounts of money, for if the cases were handled in conventional fashion by retained counsel, the cost would have been substantially greater. Additionally, debtors point out that the London Market Insurers made payment on the underlying coverage, and in doing so paid the kinds of fees here in issue. This, they say, confirms the obligation of Insurers to pay the present expenses. Debtors also cite us to Eagle-Picher Industries, Inc. v. Liberty Mutual, 523 F.Supp. 110 (D.Mass.1981), as useful precedent. The present expenses, say debtors, are no different than reimbursement for outside defense counsel fees which Insurers have already paid. Insurers argue, first, that administrative expenses are simply excluded from the coverage of the policies. They argue that the Liberty Mutual service fees represent the cost of doing business, and this is not provided for in the agreement and therefore not covered. It cites Aetna Casualty & Sur. Co. v. Gulf Resources & Chem. 254Corp., 709 F.Supp. 958, 962 (D.Idaho 1989), rev’d on other grounds, Aetna Casualty and Surety Co. v. Pintlar Corp., 948 F.2d 1507 (9th Cir.1991), for the proposition that cost of doing business is not covered under a comprehensive general liability policy. Insurers take the position that only identifiable indemnity amounts or legal fees are reimbursable under the policy. Once again, we turn to the language of the policies, particularly the definition of “ultimate net loss” quoted above. We find the charges of Liberty Mutual and ACF to be clearly within that language. Ultimate net loss in its definition starts out with inclusion of the “total ” sum which debtors are obligated to pay “by reason of personal injuries, property damage or advertising liability claims, either adjudication or compromise.” The remaining language of the paragraph does not limit the broad sweep of that language. There can be no doubt that the sums paid to Liberty Mutual and ACF were by reason of personal injuries, and are included within the total sum which debtors became obligated to pay. “Total” is inconsistent with so limited an interpretation of the policy language as that urged by the Insurers, that only indemnification and attorneys’ fees are intended. The follow on clause after “adjudication or compromise” in the definitional paragraph says what is “also” included in addition to the “total sum”. If there were any question of the scope of the earlier language, the express inclusion of sums paid as salaries, of expenses for investigators and other persons, and for adjustment and investigation of claims amplify the intent of the parties that the coverage be very comprehensive, certainly enough to embrace the reasonable steps taken by debtors in retaining the services of Liberty Mutual to dispose of claims, and to participate in the ACF, likewise an expert facility in this field. 3. Interest. Because we resolve the disputes before us in part in favor of debtors, we reach the further question of whether debtors are entitled to prejudgment interest on that award. The parties are in agreement that state law governs this decision. Further, they agree that Ohio Revised Code § 1343.03(A) dealing with money due and payable upon an instrument in writing, governs the present decision. That statute provides that interest is due when money becomes due and payable upon an instrument in writing. An insurance policy is such an instrument. Clevenger v. Westfield Co., 60 Ohio App.2d 1, 3, 395 N.E.2d 377, 379 (Ohio App.1978). While the parties are in agreement about the general rules here applicable, they disagree as to how they should be applied to the controversy before us. Insurers say that to qualify for prejudgment interest, the underlying amount sought must both be liquidated and due and payable. They say that neither condition is met here. Debtors, to the contrary, assert that the amount is clearly liquidated, and was due and payable upon the date of demand, April 16, 1991. In Motorists Mutual Insurance Co. v. Badr Said, No. 57418, 1990 WL135659, 1990 Ohio App. LEXIS 4092, at 21 (Cayahoga Cty., Ct.App. September 20, 1990), the court said: Generally, a trial court shall order an award of prejudgment interest pursuant to R.C. 1343.03(A) where the dispute is over liability itself and the amount of liability is not in dispute or readily ascertainable. Horning-Wright Co. v. Great American Ins. Co. (1985) 27 Ohio App.3d 261, 263 [500 N.E.2d 890]. In the matter before us, certainly the dispute is over liability itself, for the parties are arguing for differing interpretations of relevant provisions of the insurance policies. There is no real dispute about the amount of liability. While there has been a trifling difference between the parties with respect to the claim on account of the Liberty Mutual segment, the amount of the difference is certainly de minimis. Accordingly, we hold that debtors are entitled to recover from Insurers the amount of $1,937,206.00 on account of Liberty Mutual service fees and $1,010,210.00 on account of ACF surcharges, with interest on both those amount from April 16, 1991 at 10% per annum as provided by O.R.C. § 1343.03(A). We hold further that 255debtors are not entitled to recover from Insurers for claims submitted by debtors to the Insurers based upon a diagnosis date stated only in the complaint.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491377/	ORDER SUPPLEMENTING MEMORANDUM OPINION AND ORDER GRANTING PRELIMINARY INJUNCTION DATED OCTOBER 18, 1990 A. JAY CRISTOL, Bankruptcy Judge. Upon the Motion (the “Motion”) of Prime Motor Inns, Inc. and Prime Management Co., Inc. (collectively “Prime”) seeking entry of a temporary restraining order and preliminary injunction (the “Supplemental Relief”) supplementing the Court’s Memorandum Opinion and Order Granting Preliminary Injunction dated October 18, 1990, 123 B.R. 104, (the “Order”), inter alia, (a) directing First Fidelity Bank, National Association, New Jersey, in its capacity as the Indenture Trustee (the “Indenture Trustee”) to return the proceeds of certain letters of credit, as more particularly described in the Verified Complaint (the “Letters of Credit”) to Manufacturers Hanover Trust Company (“MHT”) and First Fidelity Bank, National Association, New Jersey (“First Fidelity”), as issuers of the Letters of Credit (the “Letters of Credit Issuers”); (b) directing the Letters of Credit Issuers to reinstate the Letters of Credit as they existed as of the filing of these Chapter 11 cases on September 18, 1990; and (c) reinstating the indentures, -loan agreements, reimbursement agreements, and deacceler-ating the bonds, as more particularly de446scribed in the Verified Complaint (the “Bonds”), inter alia, to the same force and effect they enjoyed pre-petition, notwithstanding Prime’s filing its Chapter 11 petitions and directing all parties thereto to fully perform thereunder; and telephonic notice of the Motion having been given to counsel to the Indenture Trustee, First Fidelity and MHT; and no other notice of the Motion for the Supplemental Order need be given; and after a hearing held before the Court by telephone conference on October 25, 1990, with the appearances and positions of the aforesaid parties in support of and in opposition thereto having been noted on the record thereof; and the Court having further found that its findings of facts and conclusions of law as set forth in its Order are applicable to the Motion and justify the Court’s construing the relief sought by Prime as a request for a Supplemental Order; and sufficient cause appearing therefor; IT IS ORDERED that: (a) The Indenture Trustee is directed forthwith to return the proceeds of the Letters of Credit including interest earned thereon, to the Letters of Credit Issuers, with such proceeds and interest being first applied by the Letters of Credit Issuers to principal and then to interest owing on account of the draws of the Letters of Credit; (b) the Letters of Credit Issuers are directed to reinstate the Letters of Credit in such form as they existed as of the date of the filing of these Chapter 11 cases on September 18, 1990; (c) the indentures pursuant to which the Bonds were issued shall be deemed in full force and effect (but no event of default due solely to the Chapter 11 filing of Prime shall exist), with the Indenture Trustee authorized and directed to effect the payment of interest, principal and premium, if any, to the holders of the Bonds in accordance with the terms of the respective indentures and in the same form and manner which characterized the operation of the indentures pre-petition; (d) that the indentures, loan agreements, reimbursement agreements and the Bonds shall be and be deemed reinstated to the same force and effect as they existed as of the date of the filing of Prime’s chapter 11 cases on September 18, 1990 and the respective parties thereto shall be authorized to fully perform their obligations and shall retain any and all of their rights as specifically set forth therein, including but not limited to: (i) Prime’s obligations, to make payments of principal, interest and premium for payment on the Bonds to the Indenture Trustee, as the same become due; (ii) the Indenture Trustee’s obligations to apply such payments received from Prime to the payment of principal, interest and premium on the Bonds; (iii) the Indenture Trustee’s rights to draw upon the Letters of Credit in order to make the payment of the principal, interest and premium including the payment of any tender price due the Bondholders in accordance with the terms of the Bonds in the event that payments received form Prime are insufficient to pay the Bonds in accordance with their terms; and (iv) Prime's obligations to make payments to any Letters of Credit Issuers to reimburse such Letters of Credit Issuers for any draws under the Letters of Credit as contemplated by the reimbursement agreements between Prime and such Letters of Credit Issuers; and it is further ORDERED that upon notice to Prime by MHT and/or First Fidelity of the amount of unpaid interest owed to MHT and/or First Fidelity on account of the draws on the letters of credit issued by MHT and/or First Fidelity, after application by MHT and/or First Fidelity of the proceeds and interest earned thereon received from the Indenture Trustee, Prime shall pay the unpaid interest owed to MHT and/or First Fidelity; provided, however, that such payment shall be without prejudice to any and all of Prime’s rights, claims and defenses including the right, if any, to recover or offset such payment, plus interest, against the Indenture Trustee, the bondholders and/or any other responsible party; and it is further ORDERED that this Court’s Memorandum Opinion and Order dated October 18, 1990 be and the same is hereby vacated to 447incorporate the provisions of this Supplemental Order and the Memorandum Opinion and Order of October 18,1990, together with the provisions of the Supplemental Order, be and the same are hereby determined to be the Order of the Court with respect to Prime’s application for a preliminary injunction in this adversary proceeding. DONE AND ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491378/	CORRECTED DECISION ON ORDER DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT, GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT, AND DISMISSING TRUSTEE’S COMPLAINT THOMAS F. WALDRON, Bankruptcy Judge. This proceeding, which arises under 28 U.S.C. § 1334(b) in a case referred to this court by the Standing Order of Reference entered in this district on July 30, 1984, is determined to be a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(F) — proceedings to determine, avoid, or recover preferences. This proceeding is presently before the court on the parties’ cross-motions for summary judgment (Docs. 20, 29). The parties request that summary judgment be entered upon the issue of whether payments made to the defendant, Society Corporation (Society), by the debtor, David A. Perks (Debt- or), and his parents, Donald and Onie Perks, within one year of the date the Debtor filed his bankruptcy petition, are avoidable by the plaintiff (Trustee) as preferences under 11 U.S.C. § 547(b). Society asserts that these payments are not avoidable as preferences pursuant to 11 U.S.C. § 547(c)(2) and 11 U.S.C. § 547(c)(7). FACTS The pleadings, including the parties’ Stipulations Of Fact (Doc. 27, attachment) and affidavits (Docs. 21, 22, and 27 (attachments)), establish the following relevant facts: 1) On or about November 16, 1988, the Debtor purchased a 1988 Ford Thunderbird (Thunderbird) "with the proceeds of a loan (Loan) from Society. The amount financed by the Debtor was $19,021.74 (Doc. 27, JE1). 2) The Debtor’s parents, Onie and Donald Perks, cosigned the Debtor’s Loan. 3) This Loan was secured by notation of a lien on the certificate of title to the Thunderbird which was issued in the Debt- or’s name. 4) The Loan was made by Society in accordance with ordinary business terms. Society makes automobile loans in the ordinary course of its business. 5) Prior to the purchase of this Thunderbird, the Debtor had purchased and financed three or four other automobiles. 6) The Thunderbird was used by the Debtor for his own personal use. The Debtor had actual and exclusive possession and use of the Thunderbird from the date the Loan was executed until July 3, 1990, the date of repossession. 7) The Debtor filed for relief under chapter 7 of the Bankruptcy Code on July 6, 1990. On this date and within the preceding year, the Debtor’s liabilities exceeded his assets (Doc. 22). 8) On the date the Debtor filed his bankruptcy petition Society was an underse-cured creditor. 9) The Debtor’s parents are insiders pursuant to 11 U.S.C. § 101(31)(A)(i). 10) The Trustee may recover payments made within the one year preference period if these payments benefited insider creditors or guarantors. 11 U.S.C. § 547(b)(4)(B). 11) Within one year before the date the Debtor filed for bankruptcy, $3,965.07 was paid to Society on the Loan. During the course of the Loan, the Debtor made a total of fifteen payments to Society each in the amount of $428.51. Prior to the one year preference period, the Debtor made 629seven payments on the Loan ranging from nine to twenty days late. During the one year preference period, the Debtor made eight payments on the Loan ranging from ten to twenty days late. The Debtor’s parents made one payment on the Debtor’s Loan in the amount of $506.99. This payment was made with funds belonging to the Debtor’s parents. This payment, made forty days late, was the last received by Society on the Debtor’s loan and is identified on the loan reconstruction document submitted by Society as it is the only payment made in this exact amount. 12) Society assessed late charges against the Debtor in accordance with the terms of the Loan in the ordinary course of its business. The Loan note and security agreement (Doc. 27, JE1) provides that the borrower “agree to pay a late charge of 10% of the payment, but not more than $30 for each late payment.” Prior to the one year preference period, four late charges were assessed by Society against the Debtor and only two late charges, each in the amount of thirty dollars, were paid. During the one year preference period, eleven late charges were assessed against the Debtor and only one thirty dollar late charge was paid. 13) With the exception of the repossession and sale of the Thunderbird, Society did not engage in any collection activity with respect to the Loan. 14) On November 15, 1990, the Trustee made a formal demand requesting that Society make payment of the alleged transfer. Society did not remit any portion of this amount to the Trustee. 15) On November 28, 1990, the Trustee commenced this adversary proceeding. 16) The Trustee filed a Motion For Summary Judgment By Trustee in Bankruptcy (Doc. 20), Affidavit Of James R. Warren, Trustee In Bankruptcy In Support Of The Motion For Summary Judgment By Plaintiff, James R. Warren, Trustee In Bankruptcy (Doc. 21), Affidavit Of David A. Perks, In Support Of Motion For Summary Judgment, By Plaintiff, James R. Warren, Trustee In Bankruptcy (Doc. 22), Memorandum Of Trustee In Bankruptcy Re Motion For Summary Judgment (Doc. 28), and Memorandum Of Trustee In Bankruptcy In Opposition To Motion For Summary Judgment By Defendant Society Corporation (Doc. 30). Society filed a Notice Of Submission (Doc. 27) with stipulations and various affidavits and exhibits attached, and a Motion For Summary Judgment Of Defendant Society (Society Bank, NA) and Memorandum In Support Thereof And In Opposition To Plaintiff’s Motion For Summary Judgment (Doc. 29). DISCUSSION Summary judgment is governed by Bankruptcy Rule 7056, which incorporates Rule 56 of the Federal Rules of Civil Procedure. Rule 56(c) in relevant part, provides: The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. “[Tjhis standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in original). Materiality is determined by substantive law. Id. “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Id: Additionally and more importantly, a dispute over a material fact must be genuine, “that is, if the evidence is such that a reasonable jury could return a verdict for the nonmov-ing party.” Id. [Ajt the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.... [Tjhere is no issue for trial unless there is sufficient evidence favoring the non-630moving party for a jury to return a verdict for that party. If the evidence is merely colorable ... or is not significantly probative ... summary judgment is appropriate. Id. 106 S.Ct. at 2511 (citations omitted). “[I]n ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burden”; for example, “whether a jury [fact finder] could reasonably find either that the plaintiff proved his case by the quality and quantity of evidence required by the governing law or that he did not.” Id. at 2513 (emphasis in original). See generally Carl Subler Trucking, Inc. v. Kingsville-Ninety Auto/ Truck Stop, Inc. (In re Carl Subler Trucking, Inc.), 122 B.R. 318, 320-21 (Bankr.S.D.Ohio 1990); Talbot v. Warner (Matter of Warner), 65 B.R. 512, 515-18 (Bankr.S.D.Ohio 1986). No genuine issue of material fact exists; thus, this proceeding is appropriate for summary judgment. The Trustee asserts that the payments made to Society in the amount of $3,965.07 constitute an avoidable preference. To be a preference, a transfer must satisfy all the requirements of 11 U.S.C. § 547(b). Section 547(b) provides: (b) Except as provided in subsection (c) of this section, the trustee may avoid 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 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. The Trustee bears the burden of proving that the payments made to Society are avoidable as preferences under section 547(b). 11 U.S.C. § 547(g). Although Society received a payment from the Debtor’s parents within 90 days before the date the Debtor filed for bankruptcy, this payment is not avoidable by the Trustee. A transfer to a creditor can only be avoided under 11 U.S.C. § 547(b) if it was made with property belonging to the debtor. The payments made by the Debtor’s parents with funds belonging to them are not avoidable as preferences. Thus, the Trustee cannot recover the payment made to Society in the amount of $506.99. The Debtor did not make any payments to Society within the ninety day preference period; however, the Trustee may recover avoidable payments from non-insiders made during the extended preference period of one year when these payments benefited insider creditors or guarantors. See Ray v. City Bank and Trust Co. (In re C-L Cartage Co., Inc.), 899 F.2d 1490 (6th Cir.1990). The Debtor’s parents are insiders and they benefited by the payments made to Society. Excluding the payment made by the Debtor’s parents, this court concludes, based upon the pleadings, including the parties’ affidavits and stipulations, that the elements of § 547(b) are satisfied and the transfers made to Society are preferences. However, preferences may not be avoided by a trustee if any of the affirmative defenses of § 547(c) are met. The party asserting a defense under 11 U.S.C. § 547(c) bears the burden of proving that a transfer is not avoidable. 11 U.S.C. § 547(g). Society asserts that the payments it received from the Debtor within one year of the date the Debtor filed for bankruptcy are not avoidable as preferences under § 547(c)(2) and § 547(c)(7). Pursuant to 631§ 547(c)(2), a trustee may not avoid transfers (2) to the extent that such transfer was— (A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee; (B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and (C) made according to ordinary business terms[.] The Bankruptcy Code does not define “ordinary course of business” or “ordinary business terms.” Sprowl v. Miami Valley Broadcasting Corp. (In re Federated Marketing, Inc.), 123 B.R. 265, 269 (Bankr.S.D.Ohio 1991) (quoting Waldschmidt v. Ranier (In re Fulghum Const. Corp.), 872 F.2d 739 (6th Cir.1989)). Further, no precise legal standards can be utilized for determining whether a payment was made in the “ordinary course”; rather, a court must engage in a “peculiarly factual” analysis of “the business practices unique to the particular parties.” Gosch v. Burns (In re Finn), 909 F.2d 903, 907 (6th Cir.1990) (quoting In re Fulghum at 743). Accord Federated Marketing at 269. The Trustee asserts that, considering the length of the Loan and its large amount it was not incurred in the “ordinary course,” and that considering the Debtor’s financial condition it was not “ordinary” to incur a debt of this magnitude. Further, the Trustee asserts that because the Debtor habitually made late payments and because Society assessed late charges, the payments were not made “according to ordinary business terms.” The Supreme Court in Union Bank v. Wolas, — U.S. -, 112 S.Ct. 527, 533, 116 L.Ed.2d 514 (1991), addressing the issue of whether long-term debt may come within the ordinary course exception of § 547(c)(2), concluded that payments on long-term debt may qualify for the ordinary course of business exception to the trustee’s power to avoid preferential transfers. This is the same conclusion reached by the Sixth Circuit decision of Finn. In Finn the court held: Long-term debt is as amenable to the exception of § 547(c)(2) as is any other type of debt, so long as the facts of the situation bring it within the “ordinary course of business or financial affairs” language. The legislative history does state that “[t]he purpose of this exception is to leave undisturbed normal financial relations.” H.R.Rep. No. 595, 95th Cong., 1st Sess., reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 6329. This language fociises on the “normalcy” of the relations, and is buttressed by the next phrase of the report, stating that the exception “does not detract from the general policy of the preference section to discourage unusual action by either the debtor or his creditors during the debtor’s slide into bankruptcy.” Finn at 906-07 (citation omitted). In determining whether a transaction was made in the “ordinary course,” analysis must consist of an examination of several factors including the “amount, manner, and timing of the transaction and the circumstances under which the transfer was made.” Federated Marketing at 270. Courts have determined that the following constitute transfers that are not ordinary: untimely payments, payments made in an unusual form, payments made in an unusual amount, and payments made for transactions that are unusual as between the parties. Federated Marketing at 270 (quoting Warren v. Huntington Nat’l Bank (Matter of Ullman), 80 B.R. 101, 103 (Bankr.S.D.Ohio 1987)). However, the critical inquiry in determining whether a transfer is “ordinary” is whether the transfer is “consistent with the course of dealings between the particular parties.” Finn at 907. Applying the provisions of § 547(c)(2) and the foregoing authority, this court concludes that the debt existing between the Debtor and Society is one which is typically “incurred” in the ordinary course of business or financial affairs of the Debtor and Society. The parties stipulated that making automobile loans was in the “ordinary course of business” of Socie632ty and that the Debtor, prior to the inception of this Loan, financed three or four other automobiles. In addition, the Loan documents demonstrate that the Loan, including the provisions providing for late charges, was made “according to ordinary business terms.” The payments were not made in an unusual form, nor were they made in an unusual amount, nor were the payments unusual as between the parties. Thus, this court must determine whether the payments, including the late charge payments, were untimely, i.e. not in the “ordinary course” of financial affairs of the Debtor and Society. The Debtor’s Loan with Society was a consumer loan. The Debtor made every payment due on the Loan; however, no payment was made on the first date it was due pursuant to the parties’ contract. The court notes that the parties’ contract recognized that, if any payment was not paid within ten (10) days from the date it was due, a late charge could be added to any other amount due pursuant to the contract (Doc. 27, JE1). Throughout the history of the Loan, the Debtor made late payments on a consistent basis to Society. Prior to the one year preference period, the Debtor made seven payments on the Loan ranging from nine to twenty days late. During the one year preference period, the Debtor made eight payments on the Loan ranging from ten to twenty days late. A comparison of the Debtor’s payment history prior to the one year preference period with the debtor’s payment history during the one year preference period demonstrates a regular pattern of delinquent payment by the Debtor to Society. With respect to the late charge made by the Debtor, the court notes that prior to the one year preference period, Society assessed four late charges against the Debt- or and two of these late charges were paid by the Debtor. During the one year preference period Society assessed eleven late charges against the Debtor and one of these late charges was paid by the Debtor. The Debtor’s payment of the late charges during the one year preference period is consistent with his prior history of payments of late charges. The fact that the debtor consistently made payments later than the date they were first due pursuant to the parties' contract, standing alone, is not a sufficient basis to conclude the payments were “untimely”. Based upon the foregoing “peculiarly factual” analysis of “the business practices unique to these particular parties”, this court concludes that the Debtor’s payments to Society during the one year preference period were consistent with the entire course of dealings between the parties and thus “ordinary.” Therefore, pursuant to § 547(c)(2), the payments made by the Debtor to Society are not avoidable by the Trustee. Having determined that the payments made to Society are not avoidable under § 547(c)(2), it is unnecessary to address Society’s assertions under § 547(c)(7). Accordingly, the motion for summary judgment (Doc. 20) filed by the plaintiff, James R. Warren, Trustee, is DENIED. The motion for summary judgment (Doc. 29) filed by the defendant, Society Corporation, is GRANTED. The trustee’s complaint (Doc. 1) is DISMISSED. An order in accordance with this decision is simultaneously entered. SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491379/	OPINION ON FEE AWARD TO DEBTOR’S ATTORNEY A. POPE GORDON, Bankruptcy Judge. Old South Transportation Company, Inc., a trucking entity, filed a petition under chapter 11 on May 19, 1989.1 On August 30, 1990, the case was converted to a case under chapter 7. During this fifteen-month period, a local attorney served as attorney for the debtor in possession.2 The debtor’s attorney filed an application for compensation for services in the amount of $37,674.00, based on an hourly rate of $90.00, and for reimbursement of expenses in the amount of $3,856.01. The application chronologically3 itemizes 418.6 hours of work for the period May 12, 1989 to August 17, 1990. 662The debtor’s attorney requests payment of his claim as a priority administrative expense4 under 11 U.S.C. § 503(b).5 The debtor’s attorney supported his application for compensation with his own affidavit and the affidavits of three other practicing attorneys. Creditor Concord Commercial Corporation filed an objection with an opposing affidavit made by its attorney. Cecil W. Salter (president of the debtor corporation) and the bankruptcy administrator also filed objections.6 At the hearing on December 11,1990, the parties submitted the matter on the record. No evidentiary hearing was requested.7 I. Compensation for Services A. General Principles Section 330(a)(1) provides that the court may award to a debtor’s attorney— reasonable compensation for actual, necessary services rendered ... based on the nature, the extent, and the value of such services, the time spent on such services, and the cost of comparable services other than in a case under this title. The debtor’s attorney should be compensated only for those professional services which are beneficial to the estate economically or beneficial to the administration of the estate.8 Collier on Bankruptcy, ¶1330.05[2][d], at 330-41 (15th ed. 1979). Courts begin the process of determining the dollar amount of compensation by multiplying the attorney’s reasonable hourly rate by the number of hours reasonably expended, which produces the lodestar amount. Determination of the reasonableness of the attorney’s rates and hours usually involves consideration of appropriate Johnson factors.9 Grant v. 663Schumann Tire & Battery Co., 908 F.2d 874 (11th Cir.1990). The lodestar amount may then be enhanced or reduced for cause, including contingency of the fee10 and the results obtained. In reducing the lodestar amount for results obtained, “the court may attempt to identify specific hours spent in unsuccessful claims or it may simply reduce the award by some proportion.” See Norman v. Housing Authority of Montgomery, 836 F.2d 1292, 1302 (11th Cir.1988). B. Attorney’s Duties The attorney was employed under § 327(a) to “represent or assist the [debtor in possession qua trustee] in carrying out the trustee’s duties.” The debtor in possession in the instant case was required to (1) file “as soon as practicable” a plan or to report to the court why no plan would be filed and recommend dismissal or conversion of the case; (2) file the required tax returns; (3) .account for estate property; (4) examine claims and object to improper claims “if a purpose would be served”; (5) furnish information about the estate when requested; and (6) file the required periodic reports and summaries of business operations.11 C. Objections to Application for Compensation Concord Commercial Corporation objects that the claim for compensation is excessive. Specifically, the creditor argues that the attorney unnecessarily spent a substantial amount of time in opposing Concord’s motion to require the debtor to assume or reject the lease between Concord and the debtor, which unnecessarily cost the estate $25,000 in administrative expense. Cecil Salter, as president of the debtor corporation, was in close contact with the attorney throughout the fifteen-month period. He argues that the attorney was “ineffective” in negotiating with secured creditor attorneys to the detriment of the unsecured creditors.12 The bankruptcy administrator reported that the debtor sustained a $37,398.00 loss in income and a $289,820.00 depletion in assets during one year’s operation under chapter 11. In addition, the debtor failed to file timely a disclosure statement, a proposed chapter 11 plan, and financial statements reflecting the debtor’s operations. The bankruptcy administrator further reported that the debtor’s attorney allowed the debtor to continue in chapter 11 when there was no longer any likelihood of a successful reorganization. The bankruptcy administrator recommended that the fee be reduced based on the limited results obtained by the representation. He recommended an award of no more than the $4,000 retainer and $1,145 reimbursement for expenses already paid to the attorney. 664The debtor’s attorney, in reply to the bankruptcy administrator’s report and recommendation, contends that the fee should not be reduced because of the failed reorganization. He argues that making fee awards contingent on successful reorganizations would discourage attorneys from representing chapter 11 debtors. The court agrees that the failure should not be the sole reason for reducing compensation, but it is a factor that should be considered. See In re James Contracting Group, Inc., 120 B.R. 868 (Bankr.N.D.Ohio 1990). The objections of Concord, Salter, and the bankruptcy administrator have merit. The court will scrutinize the application for compensation in light of these arguments and reduce the number of hours by the unnecessary hours claimed, in consonance with § 330 and the Norman and Grant principles already enunciated. D. Determination of Lodestar Amount (1) Reasonable Hourly Rate The hourly rate of $90.00 requested by the attorney is supported by sufficient affidavits. The amount of the rate has not been challenged. The court concludes that this rate meets the Norman criteria13 for reasonableness. (2) Hours Reasonably Expended (a) Appeal of Concord Litigation Prior to filing the chapter 11 petition,' the debtor leased from Concord Commercial Corporation 36 van trailers which it used in its trucking operation. These trailers constituted over one-third of the debt- or’s trailer fleet. The debtor contended that these trailers were irreplaceable and necessary to an effective reorganization. The debtor failed in its attempts to pay the monthly installments under the lease after filing its petition.14 The court entered an order on December 12, 1989 requiring the debtor to assume or reject the Concord lease. The debtor appealed the court order, but the appeal was settled by the parties. The trailers were repossessed by Concord March 15, 1990 after the unsuccessful efforts of the debtor to assume the lease. The attorney listed 68.4 hours from December 19, 1989 to February 16, 1990 representing work on matters connected with the appeal of the December 12, 1989 order requiring the debtor to assume or reject the lease with Concord. This work began at a time when the attorney knew, or should have known, that the debtor was financially unable to assume the lease.15 The hours expended in pursuing the appeal were unnecessary; the work was counterproductive and the results costly to the estate. These hours will be deducted from the total hours claimed. See Appendix A. (by Five Disclosure Statements The court order of May 24, 1989 required the debtor to file a plan accompanied by a disclosure statement by September 16, 1989.16 The plan and disclosure 665statement were not filed until October 24, 1989, about one month after the bankruptcy administrator filed a report recommending that the case be dismissed or converted to chapter 7 because of failure to file these documents timely. The disclosure statement, when finally filed, did not provide creditors with “adequate information” as that term is defined in 11 U.S.C. § 1125(a)(1). It failed to furnish the amounts necessary to fund the proposed plan. Thereafter, during the six-month period from December 12, 1989 to June 25, 1990, the attorney amended the disclosure statement four times to correct errors. The amended statements contained information which was at the time known, or should have been known, by the attorney or the officers of the debtor corporation to be inadequate, incorrect, and even misleading.17 Whether this happened by design, carelessness or inexperience need not be decided here. It is sufficient to caution the attorney that, as an officer of the court, he has a duty not to file documents of this character. See Bankruptcy Rule 9011. The 42.1 hours reportedly spent on the disclosure statements will be deducted. See Appendix B. (3) Calculating the Lodestar Amount The hourly rate of $90.00 multiplied by the 308.1 hours remaining after deduction of the 68.4 Concord hours and the 42.1 disclosure statement hours from the 418.6 hours claimed, is $27,729.00 — the lodestar amount. (4) Factors in Adjusting the Lodestar Amount The court concludes that the lodestar amount is excessive based on the ineffectiveness of the debtor’s counsel as described above. A substantial portion of the services rendered by the attorney (1) did not benefit the estate economically and (2) did not benefit administration of the estate. (a) Economic Results Economic loss to this estate began when the debtor sustained an operating loss of $70,999.95 in June 1989. In September 1989 gasoline prices increased dramatically, contributing in part to the operating loss of $38,658 for that month. From December 1989 to August 1990 the debtor was unable to furnish required adequate protection on a regular basis to at least two major creditors, Concord Commercial Corporation and Paccar Financial Corporation.18 These creditors held liens on trucks and trailers necessary for the debtor’s reorganization. In March 1990 Concord repossessed over one-third of the debtor’s trailers then in use. During the 15-month period from June 1989 to August 1990, the debtor sustained a diminution in assets of at least $289,800. In addition, the estate incurred a $25,000 priority administrative expense claim by delaying release of the Concord trailers for two and one-half months while unsuccess666fully attempting assumption of the Concord lease without the financial means to do so. The attorney allowed19 the debtor to remain in chapter 11 until August 30, 1990— many months after there was obviously no likelihood of effective reorganization. U.S. Bankruptcy Judge A. Thomas Small explains the detriment to the estate and the prejudice to creditors resulting from such unnecessary delay:20 ... Inessential delay frustrates creditors, exasperates debtors, and burdens an already overburdened bankruptcy system. Inevitably, complex chapter 11 cases take time, but less complicated reorganizations should not ... To a creditor waiting for payment, time is money. Unsecured creditors are not paid interest on their claims and the longer they wait for distribution, the greater is their loss. Undersecured creditors likewise do not get interest on their secured claims and, in addition, are not entitled to recoup their “lost opportunity costs” while the debtor reorganizes. United Savings Ass’n v. Timbers of Inwood Forest Associates, Ltd., [484 U.S. 365, 108 S.Ct. 626, 98 L.Ed.2d 740] (1988) [[Image here]] ... There may be circumstances in which it is advantageous to the debtor to delay confirmation of a plan, but in the typical case the debtor derives no benefit from a delay in confirmation. After all, a stalled reorganization extends the court’s control of the debtor’s affairs, increases the possibility of litigation, multiplies the debtor’s costs, and continues the bankruptcy stigma. ... [C]hapter 11 cases that languish unresolved for no apparent reason impair the efficiency of the bankruptcy system. An extended confirmation period means more reports for the U.S. Trustee or Bankruptcy Administrator to examine, more paperwork for the clerk to record and monitor, and more litigation for the court. (b) Administrative Results An attorney for a debtor in possession, as an officer of the court, has a duty to notify the bankruptcy administrator and the court whenever it becomes evident that a reorganization is unlikely to succeed. In re James Contracting Group, Inc., 120 B.R. 868 (Bankr.N.D.Ohio 1990); see In re Blue Top Family Restaurant, Inc., 110 B.R. 777, 777 (Bankr.W.D.Pa.1990): Counsel filing cases in this court on behalf of debtors, in order to obtain the relief and protection accorded by the Bankruptcy Code, stand in a fiduciary relation to their clients, the prepetition creditors and the postpetition creditors; inflicting further damage on those parties is a violation of that fiduciary duty. In this case it should have become evident to the attorney by December 1989, and certainly no later than March 1990 when the Concord repossession took place, that reorganization would not succeed. The attorney, however, while exhibiting little regard for provisions of the Bankruptcy Code, Bankruptcy Rules, and court orders, delayed the ultimate conversion of this case. He filed the plan and disclosure statement five weeks after the filing date fixed by the court. Weeks of further delay occurred from correcting the plan and disclosure statements and from failure to make service of these documents on creditors within the time required by court order. Nine months elapsed between filing of the first plan21 and disclosure statement 667and the final confirmation hearing — which is at least six months too long for a case no more complex than this. In addition to the late plan filing, the attorney did not file the first financial report 22 on time or seek an extension of time for cause, as permitted by court order. Further delay occurred following reminders by the bankruptcy administrator. It then became necessary to issue show cause orders and conduct hearings — which resulted in unnecessary litigation and delay. (5) Reducing the Lodestar Amount Because specific hours leading to these results cannot be identified with certainty in the application for compensation,23 the court concludes that the lodestar should be reduced by applying a proportionate factor of 0.5 to the lodestar amount of $27,729.00, which will result in a nonexcessive fee award of $13,864.50. II. Reimbursement of Expenses The attorney applied for reimbursement of expenses in the amount of $3,856.01. Of this amount, $1,882.50 is claimed for photocopying. The application fails to show the number of copies made, the identity of the documents copied, the actual cost per copy to the attorney, and whether photocopying was the least expensive method of reproducing the documents. This amount will be disallowed. A showing of actual and necessary costs must be provided in sufficient detail to substantiate the actual and necessary nature of expenditures.24 Collier on Bankruptcy, ¶ 330.06[3], at note 6b, (15th ed. 1979) (quoting In re Motor Freight Express, 80 B.R. 44 (Bankr.E.D.Pa.1987)) (“In the case of photocopying, counsel should inform the Court of the number of copies, the cost of each copy, and provide, if possible, a breakdown of the reasons why photocopying of certain documents was necessary.”) Reimbursement of the other expenses claimed can be substantiated from the fee application and will be allowed in the amount of $1,973.51. III. Conclusion The fee award of $13,864.50 and reimbursement of expenses of $1,973.51 totals $15,838.01, of which $5,145.00 has been paid. The balance of $10,693.01 will be allowed as a priority administrative expense claim subject to the provisions of 11 U.S.C. § 726(b).25 An appropriate order will enter separately- APPENDIX A [[Image here]] 668[[Image here]] 669[[Image here]] APPENDIX B [[Image here]] 670[[Image here]] . At the time the petition was filed, the trucking company had been engaged in interstate and intrastate hauling for eight years. It operated a fleet of 48 trucks and 62 trailers, employed 60 people, and served 85 customers. . On May 25, 1989, the debtor filed an application under 11 U.S.C. § 327 for approval of employment of the attorney. The court approved the employment, under a general retainer, on June 30, 1989. .This chronological listing extended for 45 pages and contained no groupings of related activities. Norman v. Housing Authority of Montgomery, 836 F.2d 1292, 1303 (11th Cir.1988), reminds a fee applicant that "[a] well-prepared fee petition also would include a sum662mary, grouping the time entries by the nature of the activity or stage of the case." . Section 503(b)(2) provides for the allowance as administrative expenses of claims for “compensation and reimbursement awarded under section 330(a) of [title 11].” Section 330(a) provides for compensation of attorneys employed under § 327 to represent or assist trustees in carrying out trustee duties. Under Bankruptcy Rule 9001(10), “trustee” includes "a debtor in possession in a chapter 11 case.” Under § 1101(1), "debtor in possession” means debtor when, as here, no trustee has been appointed under § 1104. . This claim was incurred prior to conversion of this case to chapter 7 on August 30, 1990. It does not have priority over § 503(b) claims incurred after conversion. See 11 U.S.C. § 726(b). . The latter objections were not supported by affidavits. . There appears to be no factual dispute that the services were actually performed as recorded in the application. In such case, an evidentiary hearing is unnecessary. Norman, 836 F.2d at 1303-04. . In a chapter 11 case, a debtor’s attorney owes it to himself and to his client to advise the client that the court may conclude that some of the services the client expects are unnecessary and therefore noncompensable from the estate. .The twelve factors listed in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974), which is binding precedent in this court under Bonner v. City of Prichard, 661 F.2d 1206, 1210 (11th Cir.1981), are (1) the time and labor required, (2) the novelty and difficulty of the legal questions, (3) the skill required to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee for similar work in the community, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) experience, reputation and ability of the attorney, (10) the undesirability of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases. Johnson, 488 F.2d at 717-19. Since Johnson, courts in the Fifth and Eleventh Circuits have used these factors almost exclusively as a guide, in both nonbankruptcy and bankruptcy cases. See Matter of United States Golf Corp., 639 F.2d 1197 (5th Cir.1981). However, the application of these factors has been criticized by the Supreme Court as creating "theoretical" attorney's fees and, because of their subjectivity, as producing "disparate results” among the courts. Norman, 836 F.2d at 1298-99, citing Pennsylvania v. Delaware Valley Citizens’ Council, 478 U.S. 546, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986). The Eleventh Circuit, however, has suggested that these factors might be considered in terms of their influence on the lodestar amount, which according to Pennsylvania v. Delaware, includes all of the twelve 663factors, "except on rare occasions the factor of results obtained and, perhaps, enhancement for contingency." See Norman, 836 F.2d at 1299. It is noteworthy that the majority of these factors are codified in § 330(a). Collier on Bankruptcy, ¶ 330.05[2][a], at 330-29 (15th ed. 1979). . Contingency of the fee in the instant case will not influence the enhancement factor, because this case is an asset case and the attorney has already been paid $5,145. . The trustee duties made applicable to the debtor in possession by 11 U.S.C. § 1107 appear in § 1106(a)(1), (5), (6), and (7) and § 704(2), (5), (7), (8), and (9). . Salter’s other objections are without merit. Salter asserts that under the debtor’s attorney’s fee arrangement the fee was set at $4,000, the amount of the retainer, plus expenses. The application he signed for the debtor to employ counsel, however, recites, It is the desire of your Applicant to employ said attorney under a general retainer to be applied against a total fee based on the time, the nature, the extent, and the value of such services, and the cost of comparable services ... and to reimburse the attorney for his actual, necessary expenses (emphasis added). Salter additionally argues that the attorney was inaccessible and rarely returned his telephone calls. However, the fee application shows that the attorney made numerous calls to Salter, almost daily, including the last day for which compensation is claimed. . According to the supporting affidavits filed by the debtor's attorney, the hourly rate of $90 reflects the prevailing market rate for the work done. Among other Johnson factors, the novelty and difficulty of the questions presented by this case and the skill requisite to perform the legal services properly have been considered. . The last monthly payment the debtor made to Concord was by check in February 1990 for the month of December 1989, after one other check had been returned for lack of sufficient funds. . The debtor had argued that the lease was actually a security agreement. However, the debtor had no more financial means to bring the lease current than to pay adequate protection payments to Concord as a lien creditor. See supra, note 14. Based on the debtor’s contention that Concord was oversecured, adequate protection payments to Concord would have been in the same amount as the lease payments. See 11 U.S.C. § 506(b). Therefore, the outcome of the appeal was irrelevant. .The order required the debtor to file any request for an extension of time to comply with the court order at least five days before the deadline. One month after the deadline the attorney filed a request for an extension in which he stated that he "inadvertently misread the Court’s order of May 24, 1989, as granting the Debtor a 120 day exclusive period for filing a Plan and Disclosure Statement." . Violations of disclosure requirements occurred in every statement filed. They included failure to disclose pending litigation with Concord (including the appeal); failure to disclose the debtor’s financial inability to post an appeal bond; failure to disclose repossession of one-third of the debtor’s van trailers by Concord which the debtor contended were irreplaceable and necessary to an effective reorganization; listing as an \|800,000 asset litigation against a creditor without disclosing that the creditor was in chapter 11; listing as an asset of the debtor corporation real estate owned by the principal stockholder; failure to disclose a $25,000 priority administrative expense claim against the debtor; representing that postpetition federal employment taxes (Form 941 taxes) had been paid without disclosing the $35,000 claim of Internal Revenue Service for these taxes; listing as a debt of the debtor corporation a $117,614 debt owed solely by the principal stockholder and another party; failure to disclose completely operating losses suffered by the debtor; and failure to disclose possible preferential payments made by the debtor to the principal stockholder. . Some 112 contacts with Paccar were recorded in the attorney’s application for compensation, many of which appear to involve nonprofessional work on such matters as renewal of insurance policies, vehicle inspections, and the indebtedness balance. The other contacts largely regard late payment of installments on 32 trucks and efforts to prevent the trucks' repossession. Many of the hours are excessive but these hours cannot be isolated with certainty from the fee application. . There is no evidence that the debtor sought to remain in chapter 11 against the advice of its attorney. . This quote is excerpted from an unpublished paper given by Judge Small at a workshop for bankruptcy judges of the 8th, 9th and 10th Circuits, at Phoenix, Arizona, during December 4 to 6, 1989. . Altogether, three plans were filed. They all proposed essentially the same method of reorganization: (1) payment of priority administrative and tax claims first; (2) payment of secured claims in full, according to the terms of the security agreements, with payment of arrearage to be postponed until the end of the terms of the agreements; (3) payment of unsecured claims in full over a nine-year period without interest; and (4) payment of insider claims after payment of unsecured claims. None of the plans gained acceptance by the creditors. Financial reports and operating loss667es while in chapter 11 showed that the debtor lacked sufficient funds to carry out the plan. In fact, the debtor would have been financially unable to pay the priority administrative and tax claims on the effective date of a confirmed plan as required. See 11 U.S.C. § 1129(a)(9). .Prompt and regular filing of financial reports by the debtor is vital. This is the chief means the bankruptcy administrator employs in carrying out his statutory duty of supervising bankruptcy estates. See § 302(d)(3)(I), Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986. The information in the reports is used to detect possible diminution of estate assets and to determine ability to effectuate or consummate a plan. . This is true even though the application for compensation contains a detailed statement as to the services rendered, including the general subject matter of each activity, and the amount of time expended, as required by Bankruptcy Rule 2016. . Section 330(a)(2) provides that the court may award to a debtor’s attorney "reimbursement for actual, necessary expenses.” . See supra note 5.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491380/	MEMORANDUM JOHN C. MINAHAN, Jr., Bankruptcy Judge. This case came before the court to consider confirmation of the debtor’s proposed Chapter 13 plan. Gene Oglesby appeared on behalf of debtor. Ms. Kathleen Laugh-lin appeared as Chapter 13 Trustee. The plan is not confirmed because the best interest of creditors test is not satisfied and because the debtor has claimed excessive exemptions. The confirmation hearing was scheduled under 11 U.S.C. § 1324 upon affidavit evidence. The order scheduling the hearing stated that debtor had the burden of proving all the requisites to confirmation, including satisfaction of the requirements of 11 U.S.C. §§ 1322 and 1325. Debtor was to provide notice of the hearing and of the plan to all creditors. The order also required the Chapter 13 standing trustee to attend and be heard pursuant to 11 U.S.C. § 1302(b). See, In re Perskin, 9 B.R. 626 (Bkrty.N.D.Tex.1981). Prior to issuance of the order scheduling the confirmation hearing, the trustee filed a motion specifically requesting entry of a confirmation order. The trustee’s motion states that upon “faith and belief” no objection to confirmation had been filed and that the plan should be confirmed. However, the trustee’s motion falls short of containing a specific confirmation recommendation. The trustee filed no objection to confirmation. I conclude that plan should not be confirmed because if fails to comply with 11 933U.S.C. § 1325(a)(4), which precludes confirmation unless: the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date. Satisfaction of § 1325(a)(4), which is referred to as the “best interest of creditors’ test,” is a fundamental condition to confirmation. It assures that creditors will be paid, at minimum, the amount which they would be paid if the case was a Chapter 7 liquidation. Chapter 13 is advantageous to debtors because they retain all their assets, including non-exempt assets, and make payments to creditors over a period of time during which debtors enjoy the protection afforded by bankruptcy law. This benefit to debtors is carefully balanced by the best interest of creditors’ test of § 1325(a)(4). Under this statutory quid pro quo the debtor keeps his or her assets and creditors are assured of receiving what they would be paid in a Chapter 7 liquidation. In order to determine compliance with the best interest of creditors test: a hypothetical liquidation of the debtor’s estate under Chapter 7 on the “effective date of the plan” must be compared to the value on “the effective date of the plan” of what the debtor proposes to distribute to the holders of allowed unsecured claims. A mathematical calculation must be made of the value of what would be available for distribution to unsecured claim holders in a Chapter 7 case. The debtor’s proposed distributions to unsecured claim holders must be “present valued” (discounted) as of the effective date of the Chapter 13 plan. Keith M. Lundin, Chapter 13 Bankruptcy § 5.25 (1990). The best interest of creditors’ test is not satisfied in this case because of $28,000.00 worth of equity in the debtors’ home. Debtor has also claimed excessive exemptions. In completing a hypothetical liquidation analysis under § 1325(a)(4) to determine how much an unsecured creditor would be paid in Chapter 7, exempt property is excluded since creditors would not be paid any funds from such property in a Chapter 7 case. The assertion of an exemption has a direct impact upon the best interest of creditor test because classification of property as exempt effects the hypothetical Chapter 7 liquidation analysis. The greater the claimed exemption, the lesser will be the required payments to unsecured creditors. On the facts of this case, the debtor has asserted a $12,000.00 homestead exemption. The claimed exemption is not supported by Nebraska law. The Nebraska homestead exemption is limited to $10,-000.00. See Neb.Rev.Stat. § 40-101 (Reissue 1988). Indeed, the asserted exemption could not be claimed under a reasonable extension of Nebraska law. See, Rule 11, Fed.R.Civ.P. When the best interest of creditors’ test is applied on the facts of this case using a $10,000.00 homestead exemption as is permitted by Nebraska law, it appears that there is approximately $28,000.00 equity in the property which would be available for payments in a hypothetical Chapter 7 case. Debtor’s home is valued at $50,-000.00 and it is subject to a $12,000.00 mortgage. Of the $38,000.00 in equity, $10,000.00 may be claimed as exempt under the homestead exemption, thus having $28,-000.00 net equity for creditors. On the facts of this case, under the plan a total of $3,600.00 will be paid to the trustee. Pursuant to the plan, the $3,600.00 will be applied to the payment of $360.00 trustee statutory fee and $3,230.00 to holders of unsecured creditors. Since the unsecured creditors in this Chapter 13 case will receive $3,230.00 under the proposed plan and in a Chapter 7 case they would receive $28,000.00 less certain costs, the best interest of creditors’ test is not satisfied and the plan cannot be confirmed. The Chapter 13 trustee did not object to confirmation of this plan. Nor did the Chapter 13 standing trustee object to the claimed exemptions in this case. The Chap934ter 13 trustee gave no satisfactory explanation as to why no objections were filed. If this plan had been confirmed it would have deprived unsecured creditors of a great deal of money, perhaps as much as $25,-000.00 to $28,000.00 to which they were entitled under § 1325(a)(4) as a condition to confirmation. On the facts of this case, it is unclear whether debtors own one or two tracts of real estate. Debtors’ valuation of the real estate is also unclear. Within fourteen (14) days of today, debtors shall file amended schedules which claim exemptions in compliance with Nebraska law, identify debtor’s real estate and location thereof, and identify all claims secured by the real estate. Within said fourteen (14) days, debtors shall also file an amended plan with supporting affidavits, which shall include a hypothetical Chapter 7 liquidation analysis. For the reasons stated herein, the plan is not confirmed. IT IS SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491381/	ORDER ON MOTION TO DISMISS CASE ALEXANDER L. PASKAY, Chief Judge. THIS IS a “Chapter 14” case in that this is the second Chapter 7 case filed by Glen Eugene Weeks and Alethia Belle Weeks (Debtors). The matter under consideration is a Motion to Dismiss the second Chapter 7 case filed by the Debtors for “cause” pursuant to § 707(a) of the Bankruptcy Code. The Motion is filed by Citizens & Southern National Bank (C & S). The unusual procedural background of this second Chapter 7 case requires a somewhat detailed recap of the undisputed facts which appear not only from the first and but also from the second Chapter 7 case and they are as follows. On May 8, 1990, the Debtors filed their first Petition for Relief under Chapter 7 of the Bankruptcy Code. In the Schedules submitted with their Petition, the Debtors claimed as exempt an annuity valued at $175,000.00 based on Fla.Stat. § 222.14 and § 222.18. Since no objection was filed to the claim of exemptions, the same was allowed automatically by virtue of § 522(Z) of the Bankruptcy Code. On July 23,1990, the Debtors sought to avoid payment of a lien of C & S, which if not avoided would have enabled C & S to attack and establish its claim against the Debtor’s annuity. On August 21, 1990, the Motion was withdrawn by the Debtors for unexplained reasons. In their first Petition the Debtors scheduled a tax liability to the United States of America (IRS) in the amount of $1,500.00 and secured debts totalling $126,-489.47. This last obligation related to a mortgage encumbering property in Tennessee owned by the Debtors and some household goods and vehicles. The unsecured obligations scheduled by the Debtors to-talled $211,412.48. The bulk of the debts were characterized as “business debts” and out of the total, only the following appear to be consumer debts: Bryan, Rawl Gore Agnew & O’Brien 5 30.00 CitiBank Mastercard 936.33 Credit Card Center 4,748.04 Discover Card 1,987.07 First Bank Card Center 2,681.69 Garrett & Associates, M.D. 469.68 Lee Memorial Hospital 3,626.40 Master Card 1,879.50 Ruiloua & Shook Surgical Assoc. 1,180.20 Smith, Hendra & Gerson, M.D. 26.00 Since no challenge was made to the Debtors’ right to a discharge, on August 14, 1990, they obtained their general bankruptcy discharge. On October 9, 1990, C & S filed a Motion entitled “Motion to Determine Secured Status of Claims.” The motion was denied for improper service and the Motion was refiled again on October 24, 1991 and scheduled for hearing before the undersigned on November 30, 1990. The Debtors filed an objection to the secured nature of the C & S claim on November 27,1990. On November 13,1990, the Trustee of the estate filed a Notice of Abandonment of the property located in Tennessee as burdensome and 974since no one interposed an objection to the proposed abandonment, this real property was effectively abandoned and no longer remained property of the estate. On December 20, 1990, this Court entered an Order and allowed the C & S claim as a secured claim but provided that C & S shall not be entitled to any distribution, if one was made, because none of the properties subject to the lien claim of C & S were administered by the Trustee. On February 27, 1991, the Trustee filed a Report of No Distribution, and the case was closed on September 20, 1991. Following the entry of discharge, C & S instituted a State Court action to foreclose on its lien claim based on the assignment of the annuity by the Debtors. On June 20, 1991, while the first Chapter 7 case was still pending, the Debtors filed their second Petition for Relief under Chapter 7. In their Schedule B-4, the Debtors again claimed as exempt all their assets, including their annuity claimed in their first Chapter 7 case, but, unlike in the first case, they did not claim the entire value of the annuity. Instead, for reasons not explained, the Debtors conceded that $10,-000.00 of the total value would be property of the estate and theoretically available for distribution by the Trustee to the creditors to pay dividends on the allowed claims. The ironic part of this strange turn of events is, of course, that these Debtors no longer have any unsecured debts because all of them were discharged in the previous case, including their personal obligation in the amount of $112,119.00 owed to C & S. In this connection, it should also be noted that the discharge obtained by the Debtors in their first case had no effect on the validity of the lien claimed by C & S. It further appears that the Debtors entered into a fee agreement with their present counsel, Mr. Miller, pursuant to which counsel would receive “one ninth of that portion of the annuity which is claimed as exempt for his services, or $16,500.00.” The Debtors’ right to maintain this Chapter 7 case is challenged by the Motion to Dismiss filed by C & S, who contends that this Chapter 7 case should be dismissed for “cause” pursuant to § 707(a) on the basis that it is an abusive, serial filing made in bad faith and there is no valid purpose to be served by maintaining this case. The United States Trustee did not seek a dismissal of this second Chapter 7 case, but filed an objection to the fee arrangement between the Debtors and their present attorney. He also sought an examination of the Debtors’ transactions with their attorney pursuant to § 329 of the Bankruptcy Code and Bankruptcy Rule 2017. Considering the grounds for dismissal urged by C & S, this Court is satisfied that there are more than ample reasons to sustain the position of C & S and to dismiss this second Chapter 7 case for the following reasons. First, these Debtors cannot get a discharge again by virtue of § 727(a)(8), and it is equally evident that even if they now generously make available $10,000.00 to be administered by the Trustee, there are no creditors who would be entitled to share and receive any distribution, since they no longer have enforceable claims against the Debtors. Second, with the exception of the commission which may be awarded to the Trustee, under § 326, which cannot be more than $900.00, the balance would have to be returned to the Debtors. Third, it is clear from the record of this Chapter 7 case that to retain the case would not serve any legitimate purpose. To do so would permit these Debtors to use the jurisdiction of this Court to relitigate their ongoing dispute with C & S. This would not only be a misuse of this Court’s jurisdiction, but the previous allowance of the secured claim of C & S in the first Chapter 7 case would trigger the principle of res judicata and would present an absolute bar to relitigate that issue. There is hardly any doubt that the attempt to use this Court for this purpose is highly improper and certainly represents “cause” to dismiss this second Chapter 7 case based on § 707(a) of the Bankruptcy Code. In light of the foregoing, this Court is of the opinion that this Chapter 7 case should be dismissed. This being the case this Court declines to consider the objection to 975the fee arrangement by the Debtors and counsel and also declines to re-examine the fee paid by the Debtors to counsel pursuant to § 329 and Bankruptcy Rule 2017. Accordingly, it is ORDERED, ADJUDGED AND DECREED that the Motion to Dismiss Case be, and the same is hereby, granted. It is further ORDERED, ADJUDGED AND DECREED that the above-captioned Chapter 7 case be, and the same is hereby, dismissed. DONE AND ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491382/	FINDINGS OF FACT AND CONCLUSIONS OF LAW ON CLAIM OF LOCAL 73 JACK B. SCHMETTERER, Bankruptcy Judge. Introduction The Debtor Waner Corporation was formerly engaged in heating and ventilation work. Its former employees are members of Sheet Metal Worker’s International Association Local 73 (“Local 73”). Debtor’s bankruptcy proceeding pends under Chapter 7 of the Bankruptcy Code. Debtor’s estate is administered by a Chapter 7 Trustee. Local 73 has moved for immediate payment of the priority wage and benefit claims of its members who formerly worked for Debtor. Local 73 earlier received part of those wages and benefits from third parties on claims filed on behalf of these workers under the Illinois Mechanics Liens Act, and on performance bonds. The Trustee Andrew Maxwell (“Trustee”) argues that the amounts thereby collected for each former employee reduce the priority part of that worker’s claim for distribution in bankruptcy under 11 U.S.C. § 507. The Trustee does not otherwise object to the Local 73 claims. [[Image here]] The parties stipulated to all facts deemed by them to be relevant, the stipulation was admitted into evidence, and each party waived the right to offer any further evidence. Based upon that record and the argument of counsel, the motion is allowed and the Court now makes and enters the following Findings of Fact and Conclusions of Law on which allowance rests. FINDINGS OF FACT 1. On October 21,1987, Waner Corporation (the “Debtor”) filed a voluntary case under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the “Chapter 7 Case”). It formerly contracted for heating and air conditioning work in Illinois. 2. Subsequent to the filing of the Chapter 7 Case, Andrew J. Maxwell was appointed interim Trustee and thereafter permanent Trustee. Mr. Maxwell duly qualified and is now acting as Trustee of the estate of Waner Corporation. 3. On April 19, 1988, Local 73 timely filed a proof of multiple claims for wages, salary, commissions and employee benefits, a copy of which is attached hereto as Exhibit A and by this reference made a part hereof. [Editor’s Note: Exhibit A has been omitted from publication.] The proof of claim is summarized as follows: 301[[Image here]] 4. Subsequent to filing of this Chapter 7 Case, Local 73 representatives filed mechanics lien claims under Illinois law to recover certain wages and benefits due and owing from the owners or general contractors who initially employed Waner Corporation in connection with heating and air conditioning work. Additionally, Local 73 sought recovery under one or more bonds for recovery of wages and benefit due and owing. This Court granted the motion of Local 73 for the modification of the automatic stay, allowing Local 73 to perfect and prosecute its respective bonds and mechanics liens. 5. As a result of the mechanics lien and bond claims, Local 73 was able to collect on behalf of its members the total sum of $55,280.43, and said sum has been distributed to members of Local 73 as described on Exhibit B attached hereto and by this reference made a part hereof. [Editor’s Note: Exhibit B has been omitted from publication.] 6. The Trustee contends that there remains due and owing on the Local 73 Wage and Benefit Claim the sum of $49,165.42. Local 73 contends that there remains due and owing on the Local 73 Wage and Benefit Claim the sum of $50,608.48. The Trustee and Local 73 stipulated to split the difference between those amounts. It was thereby stipulated that there remains due on that claim the total amount of $49,-886.95. The unpaid Local 73 Wage and Benefit Claim includes unpaid wages in the amount of at least $9,656.50 as described on Exhibit C, attached hereto and by this reference made a part hereof, and benefit claims including savings plan contributions in the amount of at least $39,508.92 (collectively the “Unpaid Local 73 Wage and Benefit Claim”).1 [Editor’s Note: Exhibit C has been omitted from publication.] CONCLUSIONS OF LAW 1. This Court has core jurisdiction over claim disputes. 28 U.S.C. § 157(b)(2)(B). 2. Claims filed in bankruptcy proceedings are presumed valid as to liability 302and amount unless the Debtor or other party-in-interest objects and demonstrates some objection thereto. 11 U.S.C. § 502(a). Since the Trustee raised no objections to the amount of and liability for the original claim of Local 73 on behalf of its members, that claim is allowed with such priorities as are provided under 11 U.S.C. § 507(a)(3) and (4). Claimant’s Rights under Illinois 3. Moneys were collected by Local 73 from third parties on the mechanics liens claims filed on behalf of the Debtor’s former employees, and on bonds posted for asserted benefit of the laborers. The Trustee argues that those funds should go to reduce the wage priority claims of those employees who received portions thereof, against distribution out of this estate for priorities under 11 U.S.C. § 507. That argument assumes that Trustee had rights to collect on the bonds and mechanics liens claims filed on behalf of the employees. However, this assumption is flawed. First, the Trustee has not shown any evidence or authority to suggest that Debtor or he had any rights at all under the bonds in question. Second, rights in the employees’ mechanics liens claims belonged under Illinois law only to those employees, not to Debtor and therefore not to the Trustee. Not only did Trustee not collect on those mechanics liens, but he had no right to do so. The proceeds of those liens claims were not property of the bankruptcy estate and could not become estate property. 4. Employees of a contractor or a subcontractor may file liens under § 21 of the Illinois Mechanics Liens Act, IlLRev. Stat. ch. 82, 11111-39. Section 21 states, Subject to the provisions of section 5, every mechanic, worker or other person who shall furnish materials, apparatus, machinery, or fixtures, or furnish or perform services or labor for the contractor ... shall be known under this act as a sub-contractor, and shall have a lien for the value thereof ... on the same property as provided for the contractor ... on the moneys and other considerations due from the owner under the original contract_ (emphasis added). Illinois state courts have interpreted § 21 to allow employees to file liens under this Act. Stepuncik v. Michalek, 67 Ill.App.3d 440, 23 Ill.Dec. 732, 384 N.E.2d 526 (1978); Malicki v. Holiday Hills, Inc., 30 Ill.App.2d 459, 174 N.E.2d 915 (1961). Furthermore, several other sections in the Act recognize the right of employees to file mechanic’s liens for unpaid wages. Section 15 states “the claim of any person for wages by him personally performed shall be a preferred lien.” This preference is reinforced by § 19 (“the claims of all persons for labor as provided in Section 15 of this Act shall first be paid”) and § 26 (“the claim of any person for wages as a laborer under sections 15, 21 and 22 of this act shall be a preferred lien”). Section 16 states “no incumbrance upon land ... shall operate upon buildings erected, or materials furnished until a lien in favor of the persons having done work or furnished material have been satisfied.” 5. Employers have no rights in liens filed by their employees. It is well established that the Act must be strictly construed with reference to all the statutory requirements upon which the right to a lien depends. M.L. Ensminger Co., Inc. v. Chicago Title & Trust Co., 74 Ill.App.3d 677, 30 Ill.Dec. 627, 393 N.E.2d 663 (1979). Under the Act, a potential lienor must comply with several requirements. An employer who has done nothing but claim an interest in its employee’s lien clearly has not complied with the requirements such as giving notice to the owner or filing the lien with the proper county office. Mech. Liens Act, § 21. Therefore, the Act itself denies the employer any rights in his employee’s lien because of the employer’s own noncompliance with requirements of the Act. The Act contemplates that each lien is personal to the party that filed it because it sets out a system of preferences for the payment of different mechanic’s liens. Sections 15, 19 and 26 each reinforce the other provisions in granting laborers’ mechanics liens priority over all other mechanics liens. Finding that an employer has an interest in its employees’ liens would de303stroy this preference scheme. Such a finding would force the employees to share the proceeds of their liens with the employer in derogation of their priority rights under sections 15, 19 and 26. The statutory language bars such a result. The whole purpose of granting laborers the right to file mechanic’s liens is to give them an additional remedy in case their employer does not pay them. It works by allowing them to collect funds from the property owner if the employer does not pay their wages. State law does not allow an employer who does not pay wages to benefit from this breach by gaining an interest in the lien which was specifically created to protect employees in such a contingency. The liens filed by employees are free and clear under state law of any employer’s interest. 6. Since Debtor had no interest in the liens filed by its employees, those liens cannot be property of the employer’s bankruptcy estate, and money collected on the liens was not property of Debtor’s estate. Therefore, collection on the liens should have no bearing on the allowance of the instant priority claim in bankruptcy. The fact that this might lead to different treatment among the various creditors is irrelevant. It is not novel to find secured creditors coming out better in bankruptcy than other creditors, and there is nothing unjust in this result. 7. Under bankruptcy law, a laborer who perfects a mechanics lien claim is a secured creditor entitled to receive proceeds of his lien. If a deficiency then remains that creditor is to be paid out of estate funds in accordance with the priorities as established under § 507 of the U.S. Bankruptcy Code. The distinction between a claim entitled to priority under section 507(a)(3) and a lien upon the assets of the debtor’s estate is especially important, for the laws of many states create liens for wages due. Generally, these and all other liens should be fully satisfied before any payment can be made out of the debtor’s estate unless the lien was avoided pursuant to Section 545. A further distinction must be made between state laws creating liens for wages due, and those which provide merely for priority in liquidation proceedings. If a lien for wages is created by the laws of a state it should be entitled to payment ahead of all priorities in section 507(a) unless avoided pursuant to section 545. On the other hand, if the state law merely provides for priority of payment for the wage claim, not making the claim a lien, it will have no effect whatsoever upon the order of payment. (Emphasis supplied) 3 COLLIER ON BANKRUPTCY II 507.04[d] p. 507-24-25 (15th ed. 1990). Thus, once all mechanics lien recoveries are fully satisfied, any deficiencies will be treated and paid in accordance with the scheme of the U.S. Bankruptcy Code. In the case at hand mechanics liens were properly filed and perfected on behalf of the workers under Illinois law. Recoveries thereupon were made in accord with Illinois law. Those recoveries were not property of the estate. Therefore, the Unpaid Local 73 Wage and Benefit Claim should be paid out of estate funds in accord with treatment under Section 507(a)(3) and (4) priorities. The estate and its creditors may not get a benefit or credit for collection by the laborers of moneys on their own lien and bond claims.2 304In this case the claims for unpaid wages and benefit claims for 37 employees will be satisfied under Section 507(a)(3) and (4) of the Code, to the extent cash is available after administrative claims are paid. CONCLUSION For the foregoing reasons, the Motion of Local 73 to Compel Allowance and Immediate Payment of Priority Wage and Benefit Claims is allowed. Counsel will present an order in accord with this ruling. . The foregoing stipulated amounts total only $49,165.42, the total originally asserted by the Trustee, not the total of $49,886.95. The Order entered this date has been drafted by the parties to deal with available funds in accord with the Court’s previously announced ruling. . The foregoing analysis is further supported by comparing priority claims with lien rights. As stated in Collier on Bankruptcy: Assets of a debtor in the trustee’s hands are subject to all of the equities, liens and encumbrances in favor of third persons that exist at the date of bankruptcy and are not invalidated by the law. Thus, liens which arose before bankruptcy and are not invalidated are recognized as a charge upon the assets. Certain other classes of liens arising even after bankruptcy may also be valid against a trustee. At the time for distribution, therefore, the trustee may find that much of the property of the estate is encumbered by still-valid liens. These liens, with certain exceptions, must be satisfied in full before any payment of dividends to unsecured creditors or administrative expenses can be made. Only after the discharge of valid liens and encumbrances are assets available for distribution to priority *304claimants. 3 COLLIER ON BANKRUPTCY ¶ 507.03[a] p. 507-14-15.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491383/	MEMORANDUM OPINION RONALD S. BARLIANT, Bankruptcy Judge. In February, 1988, David Ellerman, the Debtor, told his wife, MaryAnn, that he had lost his job and was going to Denver to take a new one. The Debtor told MaryAnn that he would not be able to send money at first, but hoped to eventually. While the Debtor was away, MaryAnn supported herself with help from her son. She made the mortgage payments on the Ellerman’s home. The Debtor regularly called MaryAnn, purportedly from cities all over the world where his new job had taken him. The Debtor, in fact, never left Illinois. Instead, he had entered into a bigamous marriage with another woman and had begun a new life without telling MaryAnn. MaryAnn found out about the Debtor’s deceit and bigamy around October, 1989. The Debtor instituted divorce proceedings around December, 1989. A divorce settlement was reached in state court requiring the Debtor to make support payments for his daughter. The Debtor filed this Chapter 7 case in August, 1990. There is only one factual dispute in this case. The Debtor took out a second mortgage (a home equity line of credit) on the Ellermans’ home. Douglas Savings & Loan is now seeking to foreclose. MaryAnn alleges that her signatures on the loan documents and mortgage were forged by the Debtor and that she never agreed to a second mortgage on her inter310est in the property. The Debtor testified that MaryAnn signed the papers in front of him. MaryAnn is also seeking damages from the Debtor for losses she incurred due to his deceit. MaryAnn asks that these damages be deemed non-dischargeable in the Debtor’s bankruptcy case. Although the Debtor’s behavior is reprehensible, MaryAnn has not established facts necessary to recover non-dischargeable damages under the United States Bankruptcy Code. Further, this Court need not and should not determine the validity of Mary Ann’s signature on the mortgage. Discussion This Court will not make any finding on the issue of whether MaryAnn actually signed the second mortgage document. The bank is the real party in interest against MaryAnn and it is not a party here. The bank is seeking the foreclosure. Even if the Court finds that MaryAnn did not sign the documents, that finding would not control against the bank. The bank will surely litigate the same issue in state court, and the state court will have to make its own findings. Once the state court resolves this issue, it will no longer be an issue in this Court. If the state court finds that MaryAnn did not sign the document, she will prevail against the bank and will no longer have a complaint against the Debtor regarding the second mortgage. If the bank prevails, she will- be entitled to no relief. MaryAnn also seeks damages arising from the Debtor’s ongoing scheme to create a false appearance that he was working for the family, while he was actually with another woman. MaryAnn argues that had she known that the Debtor had purported to marry another woman, she would have divorced him immediately, would not have made the mortgage payments for him, and would not have had to support her daughter alone, since the Debt- or would have had to make child support payments to her. The Court has jurisdiction to enter a money judgment for the amount of the plaintiff’s claim found to be excepted from discharge. Matter of Hallahan, 936 F.2d 1496, 1507-1508 (7th Cir.1991). The bankruptcy code, 11 U.S.C. § 523(a)(2)(A), excepts from discharge “any debt for money, property, services ... to the extent obtained by false pretenses, a false representation, or actual fraud ... ”. To succeed on a claim under section 523(a)(2)(A), three elements must be proven: (1) The debtor obtained money (or property) through representations which the debtor knew to be false or made with such reckless disregard for the truth as to constitute willful misrepresentation; (2) the debtor possessed scienter, i.e., intent to deceive; and (3) the false representation was actually relied upon, and such reliance was reasonable. In re Kimzey, 761 F.2d 421, 423 (7th Cir.1985). The elements must be proven by a pre-ponderance of the evidence. Grogan v. Garner, — U.S. —, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). The Court finds that the Debtor’s acts constituted false pretenses. False pretenses are “a series of events, activities or communications which, when considered collectively, create a false and misleading set of circumstances.” In re Dunston, 117 B.R. 632, 641 (Bkrtcy.D.Colo.1990). 'The Debtor created an elaborate scheme to trick MaryAnn into believing he was traveling the world, working and being a good husband, while he was actually living with another woman. To succeed under section 523(a)(2)(A), however, money, property, or services must have been obtained as a result of the reliance on the false pretenses. In re Cerar, 97 B.R. 447, 448 (C.D.Ill.1989). The Debtor did not receive any tangible money or property from MaryAnn, and does not retain any benefits of property or money procured by fraudulent means. See 3 Colliers 523.08 at 523-46. MaryAnn’s complaint is that, had she known the truth, she would have sought to compel the Debtor to pay money to her (in the form of maintenance and support), not that she ever paid money to him. Even if the Court were to somehow find that the Debtor received property from MaryAnn, the Court could not find that 311MaryAnn proved by a preponderance of the evidence that her reliance on the Debtor’s false pretenses caused the Debtor to obtain that property. With regard to the first mortgage, even if MaryAnn had known the truth about the Debtor, she would have been required to make the full mortgage payments or else lose the house. Thus, she has not proven that she only made the payments due to the Debtor’s false pretenses. Further, it is too speculative to determine when and whether MaryAnn would have sought support payments from the Debtor had she known that he was having an affair with another woman. Perhaps they would have reconciled, or perhaps not. Certainly, the Court can not determine when the Debtor would have begun paying support. This case is distinguishable from Matter of Milbank, 1 B.R. 150 (Bkrtcy.S.D.N.Y.1979). In Milbank, the Court held that a loan received by a debtor husband from his wife was a debt nondischargeable in bankruptcy because at the time of the loan, the debtor was having an affair with his next door neighbor. 1 B.R. at 152. In Milbank, there had been prior marital problems, and the debtor represented to his wife that “by loaning him money for his needs she would show her faith in him and in their marriage thus strengthening the bond between them.” 1 B.R. at 154. Thus, the loan was made in direct reliance upon the debtor’s representations that he was striving to improve the marriage, while he was in fact having an affair. 1 B.R. at 154. In this case, MaryAnn has not proven any direct reliance on the Debtor’s false pretenses that resulted in the Debtor receiving any of her property. The remedy for the Debtor’s wrongdoing does not lie within the bankruptcy code. Other courts will have to fashion any such remedy. Accordingly, judgment will be entered in favor of the Debtor. An appropriate Order will be entered.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491386/	ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS AMENDED COMPLAINT MARY D. SCOTT, Bankruptcy Judge. THIS CAUSE is before the Court upon the defendant’s Motion to Dismiss the Amended Complaint. The trustee initiated this action alleging counts sounding in fraud, conversion, breach of contract, tor-tious interference with contractual rights, and equitable subordination. The defendant Simmons First Bank of Lake Village (“the Bank”) has moved to dismiss the amended complaint on several grounds, one of which has some merit. In determining a motion to dismiss, the Court must take all of the allegations of the complaint as true. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). A cause should not be dismissed “unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). The law is clear that Rule 8, Federal Rules of Civil Procedure, is to be liberally construed and motions to dismiss are disfavored. Having reviewed the Complaint, the Motion and the Response, and upon a review of the applicable law, the Court will deny in part and grant in part the Motion to Dismiss. The trustee alleges that the debtor and the Bank entered into negotiations to bring certain loans current and obtain extensions of financing. During the negotiations, the following proposal was made: Melvin Can-atella was to liquidate three parcels of real 610property and apply the proceeds to a cure of the defaults on loans, reduce the debt of the loan guaranteed by the SBA, and obtain a reduction of the interest rate on the loan guaranteed by the SBA. In addition, there would be sufficient proceeds for Can-atella to infuse approximately $100,000 into the debtor corporation as working capítol. In return, the SBA was to release its first mortgage on the Canatella properties. First Amended Complaint, para. 7. According to the Complaint, the Bank’s president made the proposal to the SBA and the SBA agreed. However, the Bank’s president misrepresented to the debtor that the SBA rejected the proposal, upon which representation the debtor relied, resulting in damage to the debtor. Applying the liberal rule regarding motions to dismiss, the Motion must be denied with respect to Counts II and V. If all of the allegations are taken as true, the trustee has stated a cause of action for fraud under Arkansas law, Bishop v. Tice, 622 F.2d 349 (8th Cir.1980), and for equitable subordination under section 510(c) of the Bankruptcy Code (11 U.S.C.).1 The Motion will be granted as to Counts I (conversion), III (breach of contract), and IV (tortious interference with contractual relationship). A cause sounding in conversion requires that the plaintiff plead and prove an ownership interest — or at least a superior right — in the item converted and that the defendant violated that right. Big A Warehouse Distributors, Inc. v. Rye Auto Supply, Inc., 19 Ark.App. 286, 719 S.W.2d 716 (1986). In the instant case, the trustee has not so pleaded. Accordingly, Count I will be dismissed. While Count III is titled breach of contract, the allegations sound primarily in lender liability tort. Taken as a contract count, it must be dismissed because the elements of a contract have not been pleaded. Nor, does it appear from the allegations, that a contract was ever formed such that plaintiff could recover under any circumstances in contract. If the plaintiff means to state a count in bad faith, the allegations there, too, must fail because Arkansas has not expanded the bad faith tort outside the scope of insurance claims. Quinn Companies, Inc. v. Herring-Marathon Group, Inc., 299 Ark. 431, 773 S.W.2d 94, 95 (1989). Cf. Deason v. Farmers and Merchants Bank of Rogers, 299 Ark. 167, 771 S.W.2d 749 (Ark.1989). Accordingly, Count III will be dismissed. Count IV alleges that the defendant tortiously interfered with a contractual relationship of the debtor. A contractual relationship need not exist in order for this form of action to be maintained: it is sufficient to plead an “unjustified interference with a reasonable expectancy of commercial relations even where an existing contract is lacking.” Mason v. Funderburk, 247 Ark. 521, 446 S.W.2d 543, 547 (1969) (quoting Downey v. United Weatherproofing, Inc., 363 Mo. 852, 253 S.W.2d 976 (1953)); see Bishop v. Tice, 622 F.2d 349. However, in this instance, the Complaint does not even allege any contact between the debtor and the SBA — two of the purported parties to the relationship. This failure makes any “business expectancy” so tenuous as render the count subject to dismissal. While the actions of the Bank may rise to the level of fraud, the acts of the parties — at least as they are pleaded— do not rise to the level of a business expectancy or contract to support such a cause of action.2 Further, even were there a contract or business expectancy, this count must be dismissed because it appears that the alleged tortfeasor — the Bank — was a party to the purported contract or relationship. Navorro-Monzo v. Hughes, 297 Ark. 444, 763 S.W.2d 635 (1989); Mason v. Funderburk, 446 S.W.2d at 548. 611The remainder of the assertions made by the defendants in the Motion to Dismiss are without merit. Accordingly, it is ORDERED that the Motion to Dismiss First Amended Complaint is granted with respect to Counts I, III, and IV; the Motion is denied with respect to Count II and V. IT IS SO ORDERED. . See generally, Benjamin v. Diamond, 563 F.2d 692 (5th Cir.1977); Schultz Broadway Inn v. United States, 912 F.2d 230 (8th Cir.1990). . In so ruling, this Court makes the distinction between the underlying existing business relationship — the lender relationship between the debtor, the SBA and the Bank — and the negotiations to enter into extensions of financing and renewal of loans. The basis of the Complaint regards the latter.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491389/	MEMORANDUM OPINION MARY D. SCOTT, Visiting Judge. The cause before the Court includes three adversary proceedings consolidated for trial in which Plaintiffs, Citibank, N.A. (“Citibank”), First Bankcard Center (“FBC”), and Norwest Card Services, Inc. (“Norwest”), seek, pursuant to 11 U.S.C. § 523(a)(2)(A) and (C), to determine the dis-chargeability of credit card debt. Trial was held November 20, 1991. The debtor appeared personally and by counsel, Richard Freeman, Esq. The three Plaintiffs appeared by counsel, Darrell Payne, Esq. This Court has subject matter jurisdiction over these proceedings pursuant to 28 U.S.C. §§ 1334(a) and 157(a). Moreover, the Court finds that these are “core proceedings” within the meaning of 28 U.S.C. § 157(b)(1) as exemplified in section 157(b)(2)(I). Accordingly, this Court may enter a final judgment in the matter. Plaintiffs assert debtor, Karen Olson Edwards, obtained credit and cash advances by false pretenses. The Court concludes for the following reasons that the debts owed to the three Plaintiffs should not be discharged. 11 U.S.C. § 523(a)(2)(A) provides in pertinent part: (a) A discharge under section 727, ... of this title does not discharge an individual debtor from any debt— (2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by— (A) false pretenses, a false representation, or actual fraud ... In addition, subsection (C) under this section of the Bankruptcy Code adds a presumption of nondischargeability as to consumer debts aggregating more than $500 for “luxury goods and services” incurred within forty (40) days before the order for relief or for cash advances aggregating more than $1000 obtained within twenty (20) days before the order for relief. 11 U.S.C. § 523(a)(2)(C). Testimony revealed the following facts. The debtor filed her Chapter 7 bankruptcy petition May 17, 1991. She has been employed in various part-time occupations which netted her less than $10,000 per year in income. Her income for each of the two years preceding this bankruptcy case was less than $10,000. She apparently hoped various job prospects would eventually elevate her income to approximately $65,000, but those prospects were never realized. During the same three to four year time period the debtor obtained 16-17 different credit cards.1 Seven (7) of those credit cards are at issue in these adversary pro695ceedings. Debtor charged various amounts for goods and services, but, in the main, drew cash advances. Creditors seek a determination that $30,743.65 is nondis-chargeable. The seven (7) credit cards issued by the three creditors are as follows: Creditor Tifie Account # FBC Mastercard 5411 1709 4658 7998 H-1 FBC Visa 4418 0237 2150 3654 to Norwest Visa 4205 0061' 0491 5568 CO Citibank Visa 4128 733 658 079 ^ Norwest Mastercard 5317 0014 9150 0190 C7I Citibank Visa 4128 343 026 824 OS Citibank Preferred Visa 4271 3824 0050 8996 -3 Records for these accounts reveal the following relevant information. The Court will refer to various cards as # 1 through #7 as designated above. Card # 1: FBC statements date from 8-3-90 through 6-3-91 when the account was closed. Activity in the account reveals cash advances of $1,000 on 9-19-90 and $1,000 on 1-24-91. From 8-3-90 through the end of the year the account history reveals the debtor had a credit limit of $3,000. She charged various small amounts in October, 1990 totalling only $282. In September she made two payments of $15 each, in October a $15 payment, in December two payments of $40 and $38 and a final $10 payment in February, 1991. The only other activity in this account occurred when she made significant cash withdrawals. The first occurred on 10-3-90 in the amount of $1,000, and a second $1,000 was withdrawn on 1-24-91. In that same month her credit limit was increased to $4,000. The March, 1991 statement reveals that the debtor owed a balance of $2,209 and made her minimum payment of $70 in February. Finally, on 3-19-91 debtor received a cash advance of $1,875 which brought the account total to the card’s credit limit. Account # 1 also reveals the account was issued in the name of Karen E. Olson, 110 Creekmont, Roswell, Georgia. Her address, but not her name, changed three times according to the statements; the 9-4-90 statement (1800 Louisiana St., Minneapolis, MN), the 12-4-90 statement (333 S. Ocean Blvd., Deerfield Beach, FL), and the 2-1-91 statement (3939 N.E. 5th Ave., C-102, Boca Raton, FL). Card # 2: FBC statements date from 7-10-90 through 6-10-91 when the account was listed as three months past due. Activity in this account reveals relatively small amounts charged for store purchases through October, 1990. The debtor also appeared to make minimum payments. On November 7, 1990 debtor received a $1,000 cash advance, on December 7, 1991 another $1,000 cash advance, and on December 27, 1991 another $1,000 cash advance. During this time period she did make her minimum monthly payments. Finally, after no activity in January and February, on 3/21/91 she received a cash advance of $1,500 bringing her to her credit limit of $5,000. Account two reveals the account was issued to Karen E. Olson, 1800 Louisiana Ave., Golden Valley, Minnesota. Her address, but not her name changed two times according to the statements; the 12-11-90 statement (333 S. Ocean Blvd., # 303, Deer-field Beach, FL) and the 1-10-91 statement (3939 N.E. 5th Ave., C-102, Boca Raton, FL). Card #3: Norwest statements date from 2-14-91 through 5-15-91 when the account was listed as past due. Activity in this account reveals a $664 amount owed to a Dr. Schlapkohl of Lighthouse Point, Florida and a balance transfer of $497.37. She made one minimum payment of $35 on March 11, 1991. Finally on March 22, 1991 she received a cash advance of $1,200 bringing her to her credit limit. The account is in the name of Karen E. Olson, 6963939 N.E. 5th Ave., C-102, Boca Raton, Florida. No address or name changes noted. Card #4: Citibank statements date from 12-24-90 through 6-25-91. The 5-24-91 statement reveals the account was past due and credit privileges suspended. In December, 1990 and January, 1991 debtor incurred various charges at Delray Mazda. The accounts reveal she made her minimum payments of $40 in December, $20 in January, $30 in February, and $30 in March. Her credit limit of $500 at the beginning of these statements was increased to $2,100 in January 1991. On March 25, 1991, debtor received a cash advance of $1,000 bringing her to her credit limit. The account is in the name of Karen O. Edwards at 3939 N.E. 5th Ave., C-102, Boca Raton, Florida. No address or name changes noted. Card #5: Norwest statements date from 2-20-91 to 5-21-91. This account started and ended with a credit limit of $7,500. The 2-20-91 statements shows a balance due of $2,837.91. She made her minimum payment of $86 in February and $85 in March. Debtor obtained cash advances of $2,300 on March 25, 1991 and $2,350 on March 26, 1991 bringing her to her credit limit. This account with Nor-west, unlike Account #3, is listed in the name of Karen O. Edwards. The address in Boca Raton, Florida, however, is the same. Card # 6: Citibank statements date from 12-1-90 through 7-12-91 when the account was listed as past due. There is no activity in this account until April of 1991. Her credit limit increased from $2,500 to $3,300. Debtor obtained cash advances of $1,500 at Home Federal, Chula Vista, California and $500 at Wells Fargo, Chula Vista, California on 4-8-91. On 5-2-91 she obtained a cash advance of $850 at Marquette Bank, Golden Valley, Minnesota, bringing her account balance to approximately $3,000, the card’s cash advance limit. Her account activity is minimal. No payments are shown. This account is listed in the name of Karen O. Edwards, but unlike Citibank Account # 4, her address is listed as 333 S. Ocean Blvd., Deerfield Beach, Florida. No other address or name changes noted. Card # 7: Citibank statements date from 12-1-90 through 6-20-91 when the account is listed as past due. This Citibank account, like Account # 6, contains no activity until April of 1991. The credit limit increased from $5,000 to $6,500. Debtor obtained cash advances of $1,200 at Wells Fargo, Chula Vista, California on 4-10-91, $1,800 at Great Western, Boca Raton, Florida on 4-19-91, and $950 at Norwest Bank, Minneapolis on 5-1-91. Other account activity during a 10-day period from 4-22-91 to 5-2-91 reveals that the debtor charged various store and airline purchases total-ling $2,034 ($546 at Saks Fifth Avenue, stores located in both Boca Raton as well as Minneapolis, $117 to Jonay’s of Pompano Beach, Florida, $407 at Dayton’s in Minneapolis, and $810 to American Airlines, Minneapolis). Debtor’s last cash advance, $950 on 5-1-91 at Norwest Bank, Minneapolis, and the Saks and Dayton store charges in Minneapolis on 5-1-91 and 5-2-91 brought the total on her account to $6,198.19. Debtor made a $50 minimum payment on April 22, 1991. This account is listed in the name of Karen 0. Edwards, but unlike Citibank, cards # 4 and # 6, her address is listed as 1800 N. Louisiana Ave., Minneapolis, Minnesota. No change in address is noted until the May 21, 1991 statement to 3939 N.E. 5th Ave., C-102, Boca Raton, Florida. Recapitulations of debtor’s name and address changes as well as cash advances as follows are noteworthy. [[Image here]] FBC Card # 1: 8-3-90 Karen E. Olson Roswell, GA 9-4-90 Karen E. Olson Minneapolis, MN 12-4-90 Karen E. Olson Deerfield Beach, FL 2-1-91 Karen E. Olson Boca Raton, FL 697FBC Card # 2: 7-10-90 Karen E. Olson Golden Valley, MN2 12-11-90 Karen E. Olson Deerfield Beach, FL 1-10-91 Karen E. Olson Boca Raton, FL Norwest Card #3: 2-14-91 Karen Olson Boca Raton, FL Card # 5: 2-20-91 Karen O. Edwards Boca Raton, FL Citibank Card # 4: 12-24-90 Karen O. Edwards Boca Raton, FL Card #6 1-10-91 Karen O. Edwards Deerfield Beach, FL Card #7 1-18-91 Karen O. Edwards Minneapolis, MN CASH ADVANCES FROM ACCOUNTS $1,000 9-19-90 Bankcard Extra Check Card # 1 hr] td $1,000 11-07-90 Bankcard Extra Check Card #2 It] tri $1,000 12-07-90 Bankcard Extra Check Card #2 hr] tri $1,000 12-27-90 Bankcard Extra Check Card #2 >r] td $1,000 1-24-90 Bankcard Extra Check Card # 1 hr) td $1,875 3-19-91 1st Union Boca Raton Card # 1 It] td $1,500 3-21-91 Great Western Boca Raton Card # 2 It] tri $1,200 3-22-91 Deerfield Beach Bank, FL Card # 3 $1,000 3-25-91 Great Western Boca Raton Card # 4 $2,300 3-25-91 Barnett Boca Raton Card # 5 $2,350 3-26-91 Lighthouse Point, FL Card # 5 $1,500 4-08-91 Home Federal, Chula Vista, CA Card # 6 $ 500 4-08-91 Wells Fargo, Chula Vista, CA Card # 6 $1,200 4-10-91 Wells Fargo, Chula Vista, CA Card #7 $1,800 4-19-91 Great Western, Boca Raton Card # 7 $ 950 5-01-91 Norwest Bank, MN Card #7 $ 850 5-02-91 Marquette Bank, Golden Valley, Card #7 MN These recapitulations reveal that the debtor, during the half-year or so before she filed bankruptcy, used two names and four different addresses. From March 19, 1991 to May 2, 1991 she withdrew $17,-025.00 in cash advances from nine (9) different locations in three different states. Further, she appears to have methodically withdrawn available cash using one card at a time while keeping some accounts current with minimum payments until all credit was exhausted. Debtor avers she used the funds to “survive” robbing “Paul to pay Peter.” The evidence does not support her averment. Rather, the evidence supports a different conclusion. The debtor, during her testimony, was vague about her financial circumstances and generally did not present a demeanor consistent with truthfulness. For at least three years she never earned an annual income over $10,000 or less than $1,000 per month. Hence, her defense that she used the funds to survive is contradicted by the actual numbers. Her defense is further contradicted by the non-cash charges: charges to Saks Fifth Avenue and Daytons are not “necessities.” Large cash advances were withdrawn, to the credit limits, in a short period of time prior to the filing of the Petition in bankruptcy. The systematic mode by which the withdrawals were made also indicates her fraudulent intent. From the facts and surrounding 698circumstances presented, the Court can conclude that a fraud has been committed. The debtor never intended to repay these debts. See In re Smith, 120 B.R. 986, 989 (Bankr.E.D.Ark.1990); see also In re Collins, 946 F.2d 815 (11th Cir.1991). The purpose of the Bankruptcy Code is to provide an honest debtor an opportunity to “start afresh.” Transouth Financial Corporation of Florida v. Johnson, 931 F.2d 1505, 1508 (11th Cir.1991) (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S.Ct. 695, 699, 78 L.Ed. 1230 (1934)). However, a debtor who attempts to abuse the relief afforded by bankruptcy proceedings is not entitled to the complete protection of the Court. Id. Indeed, the nondis-chargeability provisions were provided in order “that dishonest debtors would not benefit from their wrongdoing.” Collins, 946 F.2d 815. The Court agrees with the creditors’ contention that debtor’s pre-petition activities belie honest intentions. The debtor abuses the bankruptcy process. The debtor's discharge should not include the total amounts owed to the three complaining creditors. The Court specifically includes those amounts charged and/or cash advances taken by the debtor prior to the forty (40) day presumptive period of section 523(a)(2)(C). Nothing in the debt- or’s testimony or any other evidence convinced the Court that she ever intended to repay these accounts. A separate judgment will be entered in accordance with the foregoing. IT IS SO ORDERED. . Debtor's Chapter 7 schedules were not made a part of the adversary proceeding records so the exact number of cards and debt incurred is unknown. . The Golden Valley, Minnesota address includes the same zip code as the Minneapolis address.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491390/	MEMORANDUM DECISION DETERMINING PRIORITIES A. JAY CRISTOL, Bankruptcy Judge. THIS CAUSE came before the Court on September 23, 1991 upon the Florida De702partment of Law Enforcement’s (FDLE) motion for determination of priority status of its claim against Debtor’s estate. In its motion, the FDLE asserts that it is owed the sum of $4,160.00 for fees which were collected by the debtor pursuant to § 790.-065, Florida Statutes. In relevant part, the statute states: (1) No ... licensed dealer shall sell or deliver from his inventory any ... firearm to another person ... until he has: $ jjt * & * (b) Collected a fee from the potential buyer for processing the criminal history check of the potential buyer. During the first full year of operation the fee shall be $10, thereafter the fee shall be no more than $3 until this section sunsets or is repealed. Rules shall be promulgated by the Department of Law Enforcement to establish procedures for the fees to be transmitted by the licensee to the Department of Law Enforcement. All such fees shall be deposited into the Department of Law Enforcement Operating Trust Fund. The FDLE asserts that the sum of $4,160.00 is due as a result of fees collected by the debtor for the processing of background checks of potential firearms buyers. Of that amount, $3,010.00 was for background investigations performed prior to the filing of debtor’s petition for reorganization and $1,150.00 was for investigations performed post-petition. The FDLE claims a priority under 11 U.S.C. § 507(a)(7)(C) or (E), alleging that the monies collected by the debtor are either a “trust fund” tax or an “excise” tax. The position of First Eastern Bank, N.A., the debtor’s primary secured creditor, is that the FDLE’s claim is not a tax at all, but merely an unsecured debt with no priority status. At the hearing on this matter, the debtor, First Eastern Bank and the FDLE stipulated that the FDLE would be entitled to reimbursement of criminal history check fees collected by the debtor during the post-petition period as administrative expenses. Thus, the issue remaining before the Court is whether the $3,010.00 owing for background investigations performed prior to the filing of debtor’s petition for reorganization is a claim entitled to priority status. This being a case of first impression within this jurisdiction, the Court has looked to other jurisdictions for the definition of “tax”, as that term is used in the Bankruptcy Code. Other courts have defined “tax” as an “involuntary exaction for a public purpose....” In re Jenny Lynn Mining Co., 780 F.2d 585, 588 (6th Cir.1986) quoting United States v. River Coal Co., 748 F.2d 1103, 1106 (6th Cir.1984). Accord Williams v. Motley, 925 F.2d 741, 743 (4th Cir.1991); In re Metro Transp. Co., 117 B.R. 143, 153 (Bankr.E.D.Pa.1990); In re Downs, 99 B.R. 51, 52 (Bankr.W.D.Wash.1987). A “fee”, the antithesis of a “tax”, has been defined as a “voluntary payment for a private benefit.” In re Jenny Lynn Mining Co., 780 F.2d at 589. See also In re Metro Transp. Co., 117 B.R. at 154; In re Downs, 99 B.R. at 52. Courts primarily distinguish whether a payment is a “tax” or a “fee” by determining its purpose, private or public. In re Jenny Lynn Mining Co., 780 F.2d at 588. Accord, In re Metro Transp. Co., 117 B.R. at 154; In re Downs, 99 B.R. at 52. The payment of monies designed to recoup the costs of regulation from the people regulated, rather than to raise general revenues, is considered to be a “fee”. Id. See, e.g., Union Pacific v. Public Utility Comm’n, 899 F.2d 854, 859 (9th Cir.1990); Brock v. Washington Metropolitan Area Transit Auth., 796 F.2d 481, 489 (D.C.Cir.1986). As the court recognized in In re Jenny Lynn Mining Co., the inevitable benefit to the public from govemmentally imposed fees [that are designed to support the agency administering the program under which the fee is charged] is insufficient to establish that such a fee is a tax. 780 F.2d at 589. Otherwise, “all such fees would be ‘taxes’ for bankruptcy purposes.” Id. In the present case, the nature of the payment is voluntary. Payment is required only if one desires to purchase a firearm. The purpose of the payment is *703for private benefit. Only people who pay the fee may purchase a firearm. Furthermore, this payment is clearly designed to recoup the costs of regulation from the people regulated, rather than to raise general revenues. This payment can not be reasonably construed to be an involuntary exaction for a public purpose. Accordingly, it appears to this Court that the payment forming the basis of the FDLE’s claim is not a “tax” but a “fee” and, as such, is not entitled to priority status. It is hereupon ORDERED that the FDLE does not have a claim entitled to priority under 11 U.S.C. § 507(a)(7)(C) or (E). DONE and ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491391/	MEMORANDUM RICHARD S. STAIR, Jr., Bankruptcy Judge. By this adversary proceeding, the trustee seeks to avoid a security interest in and recover a Yamaha Grand Piano or its value from one or more of the defendants. The trustee’s claim is grounded upon 11 U.S.C.A. §§ 544(a), 549(a) and 550(a) (West 1979 & Supp.1991). Additionally, the trustee contends that the defendants, American General Finance, Inc.1 (American) and Peter Calandruccio (Calandruccio) violated the automatic stay and that he is entitled to damages pursuant to 11 U.S.C.A. § 362(h) (West Supp.1991). A Pretrial Order defining the issues to be resolved by the court was entered on August 15, 1991. A trial was held October 29, 1991. For reasons hereafter discussed, the court has determined that the piano in dispute was not property of the debtor’s estate and that the trustee’s complaint, filed March 12, 1991, as amended April 1, 1991, must be dismissed. Various cross-claims asserted by the defendants are thus rendered moot and need not be addressed by the court. This is a core proceeding. 28 U.S.C.A. § 157(b)(2)(K) & (O) (West Supp.1991). 822I Boyd Ashley Capps, Jr. (the debtor) managed and operated a Knoxville entertainment club, Ella Guru’s, Ltd. (Ella Guru's). In September, 1988, the debtor went to Music House Keyboards West (Music House), a local business establishment, seeking to purchase a grand piano for Ella Guru’s. Music House maintained a financing relationship with American by which American provided purchase money financing to qualified Music House customers. The debtor advised a representative of Music House that the piano was being purchased for Ella Guru's. He was advised that Ella Guru’s could not obtain financing. The debtor thereafter attempted, unsuccessfully, to obtain financing from American through Music House in his individual name. Finally, American agreed to extend credit when Calandruccio, the general partner to Ella Guru’s landlord, agreed to sign the contract. On September 27, 1988, the debtor as “Buyer” executed a Retail Installment Contract governing the purchase of the piano for the sum of $11,184.00, including tax.2 American financed the $10,000.00 net purchase price under the terms of the Retail Installment Contract assigned to it by Music House and was granted a security interest in the piano.3 It is undisputed that American filed a financing statement locally in the office of the Register of Deeds for Knox County. It did not file its financing statement centrally in the office of the Secretary of State as is required under Tennessee law for perfection of a security interest in goods used or bought for use primarily in business. See Tenn.Code Ann. §§ 47-9-109 (1979) and 47-9-401 (1991). The piano was delivered by Music House to Ella Guru’s business establishment and was in possession of and used by Ella Guru’s at all material times thereafter. All monthly installments under the September 27, 1988 Retail Installment Contract were paid by Ella Guru’s as were expenses associated with the maintenance and upkeep of the piano.4 Ella Guru’s filed a voluntary petition under Chapter 11 on May 25, 1990, which is Case No. 90-32126. On June 26, 1990, an order was entered in the Ella Guru’s case, approved by counsel for American and Ella Guru’s, which “lifted” the automatic stay.5 This order, drafted by one of the attorneys, provides “that any automatic stay which may have gone into effect as a result of the filing of this bankruptcy be lifted as to any indebtedness owed by Boyd Ashley Capps, Jr. and/or Peter C. Calandruccio to American General Finance, Inc....” The Ella Guru's case was converted to Chapter 7 on December 19, 1990, and a trustee was thereafter appointed. The debtor filed the petition initiating his Chapter 7 case on January 7, 1991. On February 7, 1991, the court entered an agreed order approved by the plaintiff and counsel for American and the debtor, which provides in its entirety: Upon agreement of the parties as evidenced by their signatures below and it appearing to the Court that American General Finance, Inc. asserts a security 823interest on a Yamaha Grand Piano as is more fully set forth in the attached Proof of Claim, which Proof of Claim is incorporated herein for all purposes, and it further appearing to the Court that the parties have agreed that American General may take possession of the collateral pending further Order of the Court, it is hereby ORDERED that the Automatic Stay pursuant to 11 USC Section 362 be modified so as to allow American General Finance, Inc. to obtain possession of the Yamaha Grand Piano, pending further Order of the Court. After the debtor commenced his bankruptcy case, American contacted Calan-druccio seeking payment on the September 27, 1988 Retail Installment Contract. At this time the monthly payments were in arrears. In response, Calandruccio approached American seeking to pay off the note. After discussions, American agreed to accept $8,527 from Calandruccio in satisfaction of the note. On February 15, 1991, upon receipt of the $8,527, Charles Moore, American’s manager, at Calandruccio’s request, endorsed the following type-written language on the note: We hereby assign our complete interest in one Yamaha Grand Piano, Serial # 501187, model # C3E, including cover and dolly to Peter C. Calandruccio. We have no future interest in this piano. Our interest in the title is transferred to Peter Calandruccio. Calandruccio thereafter obtained possession of the piano from Michael H. Fitzpatrick, trustee of Ella Guru’s bankruptcy estate. Calandruccio subsequently sold the piano to the defendant, Rodney Napier, for $8,625. American never took physical possession of the piano pursuant to the February 7, 1991 agreed order. Until Calandruc-cio took possession, the piano was located at the closed Ella Guru’s business site under Mr. Fitzpatrick’s control. Calandruccio removed the piano upon Mr. Fitzpatrick’s authorization. II The procedural posture of this adversary proceeding is somewhat convoluted. The trustee filed a complaint seeking to avoid American’s security interest in the piano pursuant to Code § 544(a) and to recover the piano or its value from American pursuant to Code § 550(a). The complaint was amended to add Calandruccio and Napier as defendants. The trustee contends that American failed to perfect its security interest in the piano because it filed its financing statement locally, in the Office of the Knox County Register of Deeds. The trustee contends that as the piano was purchased for a business use, ie., use by Ella Guru’s, perfection of American’s security interest is dependent upon the filing of its financing statement with the Secretary of State pursuant to TenmCode Ann. § 47-9-401 (Supp.1991). The trustee further contends that American and Calan-druccio transferred the piano in violation of the automatic stay, thus entitling him to recover damages pursuant to Code § 362(h).6 In response to the trustee’s claims, Calandruccio filed a cross-claim against American grounded on alleged violations of the Tennessee Consumer Protection Act of 1977, Tenn.Code Ann. §§ 47-18-101 to 47-18-5002 (1988 & Supp.1991). American responded by filing a counterclaim against Calandruccio. Finally, Napier filed a cross-claim against Calandruccio based on breach of an implied warranty of good title. III Preliminarily, Calandruccio disputes that the piano is property of the debtor’s estate. Rather, he contends that the piano was property of Ella Guru’s. Although this issue is not raised in the Pretrial Order, it is an issue fundamental to the trustee’s ability to maintain his claims. If the piano was not property of the debtor’s estate, the 824trustee has no claim against any defendant.7 Ella Guru’s was a limited partnership established under Tennessee law.8 Its sole general partner was a corporation, Signs of Life, Inc., of which the debtor was president.9 There are thirteen limited partners.10 Under the Tennessee Uniform Limited Partnership Act, a general partner, with exceptions immaterial to this adversary proceeding, had “all the rights and powers and ... [was] subject to all the restrictions and liabilities of a partner in a partnership without limited partners....” Tenn.Code Ann. § 61-2-109 (1980). The rights and powers of a general partner under the Revised Uniform Limited Partnership Act are substantially the same. See Tenn.Code Ann. § 61-2-403 (1989). Under Tennessee law, limited partners are not liable for the obligations of a limited partnership and do not participate in the control of the business. Tenn.Code Ann. § 61-2-107 (1980) (Uniform Limited Partnership Act); Tenn.Code Ann. § 61-2-302 (1989) (Revised Uniform Limited Partnership Act). In the case of Ella Guru’s, the general partner, Signs of Life, Inc., acting through its president, the debtor, operated, and was in control of, Ella Guru’s. Tennessee’s version of the Uniform Partnership Act states in material part: (a) All property originally brought into the partnership stock or subsequently acquired, by purchase or otherwise, on account of the partnership is partnership property. (b) Unless the contrary intention appears, property acquired with partnership funds is partnership property. Tenn.Code Ann. § 61-1-107 (1989). Further, whether property is owned by an individual or a partnership is primarily a matter of the intentions of the partners. Holcomb v. Fulton (In re Fulton), 43 B.R. 273 (Bankr.M.D.Tenn.1984) (trailer was property of partnership even though purchased individually by only one partner). The intent of the partners generally determines what property will be considered partnership property as distinguished from separate property. Ascertaining that intent is a question of fact. 59A Am.Jur.2d Partnership § 354 (1987). [T]he partners’ actual intent is determined from their apparent intent at the time the property is acquired, as shown by the facts and circumstances surrounding the transaction of purchase, considered with the conduct of the parties toward the property after the purchase. 59A Am.Jur.2d Partnership § 355 (1987). At the time the piano was purchased, the general partner of Ella Guru’s, acting through the debtor, intended that Ella Guru’s would purchase and own the piano. Due to the inability of Ella Guru’s to obtain financing, the piano was purchased in the debtor’s name. Based on the evidence before the court, it can hardly be disputed that the general partner of Ella Guru’s intended the piano to be partnership property. The piano was purchased exclusively for use by Ella Guru’s in its business; it 825was at all times subsequent to its purchase located at Ella Guru’s business establishment and used exclusively by Ella Guru’s; all monthly payments under the September 27, 1988 Retail Installment Contract were made by Ella Guru’s; expenses associated with the maintenance and upkeep of the piano were paid by Ella Guru’s; and the debtor never used the piano for personal use. The only suggestion that the debtor might have considered himself to have an interest in the piano is in the fact that the piano is scheduled as an asset in his individual case while it is not scheduled as an asset of Ella Guru’s. The debtor did not, however, testify that he considered himself the owner of the piano. The explanation perhaps lies in the fact that the Retail Installment Contract assigned to American is in the debtor’s name. Clearly, the evidence establishes that Ella Guru’s owned the piano. The court accordingly finds that the piano was not property of the debtor’s estate. Because the piano was not property of the debtor’s estate, the trustee has no standing to maintain this adversary proceeding. Accordingly, the court need not consider the merits of the trustee’s claims against the respective defendants. The trustee’s complaint must be dismissed as to all three defendants. This holding renders moot the cross-claims of Calandruccio and Napier and the counter-claim of American. These claims will also be dismissed. This Memorandum constitutes findings of fact and conclusions of law as required by Fed.R.Bankr.P. 7052. An appropriate judgment will be entered. . American General Finance, the name in which this defendant was sued by the plaintiff, and American General Finance, Inc., are the same entity. . The Retail Installment Contract specifies that “Boyd Ashley Capps, Jr." is the “Buyer.” The contract is, however, signed by the debtor and Calandruccio, each of whom is identified at their respective signature line by the pre-printed word “Buyer.” The court concludes from the proof that Calandruccio was, at best, an accommodation party under Tenn.Code Ann. § 47-3-415 (1979). See Commerce Union Bank v. Davis, 581 S.W.2d 142 (Tenn.App.1978). . The Retail Installment Contract reflects that a $1,199.00 down payment was given toward the $11,184.00 purchase price, and that an additional $15.00 was added for "Official Fees For Security Interest Charges.” The record does not establish whether a down payment was in fact paid, or, if paid, by whom paid. . The Retail Installment Contract calls for 120 monthly payments of $167.52 each commencing October 30, 1988. Ella Guru's made all monthly payments through May, 1990. Its check for the May, 1990 payment was written June 2, 1990, after it filed a petition under Chapter 11. Further, on December 7 and December 20, 1988, Ella Guru’s paid Khalsa Piano Service $45.00 and $50.00, respectively, to have the piano tuned. A check to Khalsa Piano Service written by Ella Guru's on February 15, 1989, in the amount of $220.00 contains no explanation of the services rendered. See Exhibit 20. . The debtor’s counsel, John P. Newton, Jr., is erroneously identified at his signature line on the June 26, 1990 order as "trustee.” . Bankruptcy Code § 362(h) provides: "An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorney’s fees, and, in appropriate circumstances, may recover punitive damages.” 11 U.S.C.A. § 362(h) (West Supp.1991). . Property of the estate is defined generally under Code § 541(a) as "all legal or equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C.A. § 541(a) (West 1979). . Tennessee's version of the Uniform Limited Partnership Act, Tenn.Code Ann. §§ 61-2-101 to 61-2-130 (1980), was repealed by Acts 1988, Chapter 922, § 1, effective January 1, 1989. All limited partnerships formed on or after January 1, 1989, are governed by Tennessee's Revised Uniform Limited Partnership Act, codified at Tenn.Code Ann. §§ 61-2-101 to 61-2-1208 (1989). Presumably, Ella Guru’s, which according to its schedules commenced business in June, 1988, was established under the now repealed Uniform Limited Partnership Act. . The debtor testified that he was the general partner of Ella Guru’s. It is undisputed that the debtor operated and controlled Ella Guru’s and the distinction as to who was the general partner is perhaps one more of form rather than substance. . These facts are not part of the evidence introduced during the trial of this adversary proceeding, but are judicially noticed facts established from a review of the voluntary petition and accompanying Exhibit A filed by Ella Guru’s on May 25, 1990, and by a review of the list of Equity Security Holders filed by Ella Guru’s on June 14, 1990.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491392/	MEMORANDUM OPINION AND ORDER AFTER TRIAL OF ADVERSARY PROCEEDING WILLIAM H. BROWN, Bankruptcy Judge. In this adversary proceeding, the Trustee sued James O. Marty (“Marty”) for avoidance of two transfers as either preferences or fraudulent conveyances under 11 U.S.C. §§ 547 or 548. The Estate of Ausencio L. 827Campos, through Steven Campos, Executor (“Campos”), after an order approving intervention, filed an answer and cross claim against Marty. Campos basically took the position that the funds paid to Marty could be traced to an investment made by Campos with the debtor Mark Benskin & Co., Inc., that the debtor held the Campos investment in trust, and that payment to Marty out of the Campos funds was fraudulent. Campos sought recovery of $6,300.00 from Marty. This adversary proceeding was tried on July 29, 1991. The parties have now submitted post-trial briefs. The following contains findings of fact and conclusions of law pursuant to F.R.B.P. 7052. APPLICABLE LAW This proceeding was originally brought by the Trustee under 11 U.S.C. § 547 and § 548. Section 547(b) provides: (b) Except as provided in subsection (c) of this section, the trustee may avoid 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 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. Section 548(a) was pled by the Trustee but was not relied upon in this trial. Mr. Marty relied upon a defense that the subject transfers to him were withdrawals of his own property and were not property of the debtor’s estate. No § 547(c) defenses were alleged nor proven. The Campos cross-plaintiff relied upon tracing concepts which will be more fully discussed. However, the Court will first address whether the transfers to Marty are avoidable by the Trustee. FINDINGS OF FACT 1. The Trustee called Mark Benskin (“Benskin”), the principal of the debtor Mark Benskin & Co., Inc., and himself an involuntary debtor in this Court in case number 89-23263-B. In fact, Benskin operated this debtor as a sole proprietorship rather than as a corporation. Mr. Benskin has previously entered guilty pleas in a fifty count indictment in the United States District Court in this District, Criminal Number 89-20166-G (Ex. 16), and he is presently serving a sentence in a federal institution at Millington, Tennessee. 2. In 1989, Benskin was acting as an unlicensed investment adviser. Investors, such as Marty and Ausencio Campos, would open investment accounts with Bens-kin and/or his company. Checks were normally payable to Mark Benskin & Co., Inc. and were deposited and commingled in a client escrow fund account. From that account, Benskin withdrew or transferred funds for all operating expenses and for Benskin’s personal expenses. The debtor did not maintain separate depository accounts for each of its clients; although, it maintained separate files for each client. 3. Mr. Marty was a client of the debtor and beginning in 1988 the debtor accepted certain funds from Marty. There were no specific instructions or restrictions as to the investments to be made, and Marty’s money went into the general escrow account. 4. The debtor issued to its clients, including Marty and Campos, statements confirming the client deposit. (Ex. 12) However, no separate account actually was created and the confirmation statements were fictitious. 8285. On July 21, 1988, Marty transferred by check payable to Mark Benskin & Company, Inc., $5,000.00, with the notation on the check “Escrow.” (Ex. 3) This check was deposited into this debtor’s commingled escrow account. 6. On November 4, 1988, Marty transferred by check payable to Mark Benskin, $6,000.00, with the notation on the check “Investment.” (Ex. 5) This check was deposited into this debtor’s commingled escrow account. 7. No security was given nor intended in exchange for the Marty “investments.” 8. When Marty paid his money, he and Benskin talked generally about investments, and Marty did not authorize Bens-kin to utilize Marty’s investment funds for operating or personal expenses. Mr. Marty was given and signed a four page “Customer Agreement,” which agreement was routinely signed by most of the debtor’s clients. (Ex. 4) Mr. Benskin did not sign the Marty “Customer Agreement.” Mr. Benskin testified that at the time Marty made his investments, he (Benskin) intended to place Marty’s money in escrow and invest it. 9. On July 22, 1988, the debtor deposited $20,784.06 into its commingled escrow account at National Bank of Commerce (“NBC”), which deposit consisted of seven items including the Marty $5,000.00 check. (Ex. 6) This deposit was representative of the manner in which the debtor commingled deposited funds. 10. Each month the debtor issued a statement to clients such as Marty and Campos. (Exs. 2,13) However, these statements were often fictitious and did not accurately reflect the condition of the client’s “investment.” 11. In February, 1989, Marty made demand for a withdrawal of $6,300.00 and a check was written to Marty, drawn on the debtor’s NBC escrow account on February 10, 1989, in that amount. (Ex. 1) At that point, Marty had deposited $11,000.00 but his money was probably not invested, according to Benskin’s testimony. Clearly, it was not invested distinctly for Marty. Marty’s statement dated February 10, 1989, reflected a fictitious balance of $13,-091.26 from which the $6,300.00 was paid. (Ex. 2) In February, 1989, there was a general run being made on the debtor by clients and the debtor was using commingled clients’ funds to pay those other clients who made demand. 12. The debtor was operating a Ponzi scheme under which he took clients’ funds and used them to pay other clients. Payments to some clients exceeded the “investments” made by those clients. 13. Mr. Benskin could not testify exactly what happened to Marty's money since he did not maintain separate accounts for each client and since the common escrow account was used for business and personal purposes. 14. Some investors placed notations on their investment checks, such as “CM Account” or “For Dep. in Am Capital” or “Stock Investments.” (Ex. 7) Nevertheless, their checks were commingled in one escrow account. (Ex. 7) Mr. Benskin testified that the memo line on a client’s check was irrelevant to what he did with the check. The debtor did in fact invest some of the client’s funds, for example in American Capital Trust Co. (“American Capital”). (See Ex. 8) The debtor was not an authorized agent for American Capital; although, the debtor did receive funds and sales material from American Capital. 15. The debtor on February 29, 1988, acknowledged receipt of a deposit from Au-sehcio L. Campos in the amount of $88,-000.00, which letter and attached documents referred to an investment in American Capital government securities. (Ex. 9) The debtor in fact did not invest the $88,-000.00 in American Capital and those funds were not restricted. 16. The debtor, in January, 1989, obtained an additional $50,000.00 from Campos under false representations that those funds would be delivered to American Capital. (Ex. 11) Mr. Campos expressed a desire for a conservative investment approach; however, the $50,000.00 were neither specifically restricted nor invested. 82917. As to Campos, fictitious account statements were generated. (Exs. 12 & 13) 18. The debtor did not have Campos’ permission to use Campos’ funds for operating expenses or for any purpose other than investment. 19. The Campos $50,000.00 funds were deposited in the NBC escrow account on January 25,1989. (Exs. 11 & 14) The Campos funds were used like all other commingled funds. 20. The checks posted by NBC to the escrow account between January 25 and February 13, 1989 were introduced as Exhibit 15. 21. The debtor made no distinction between new and old client funds, which all were deposited in the same escrow account. 22. The Court conducted a bifurcated insolvency trial, as to the pending non-jury adversary proceedings, on January 7, 1991, after notice to all necessary parties, at which time the uncontroverted proof offered by the Trustee established that both debtors were insolvent for the entire one year preceding the bankruptcy filing. 23. By the time of Benskin’s arrest in April, 1989, all of the Marty and Campos funds had been depleted. In fact, only a nominal amount remained in the debtor’s escrow account. 24. Mr. Marty testified that he intended his two checks to be used for investment only, and he understood that he could obtain a return of his “investment” upon demand. 25. James L. Lindsey, Vice President and Manager of NBC’s auditing department, testified that Exhibit 14 represented the posting by the bank to the debtor’s escrow account, for January and February, 1989, of both deposits and checks. Between January and March, 1989, (the time relevant here), the bank’s policy was to post the smallest debit (checks, withdrawal, or charge) first. After that time the bank changed its policy and began posting the largest debit first. The date a check was posted was the date the check was presented to the bank. NBC followed the “first in — first out” rule; that is, the first money credited as a deposit was the first money paid out when checks were presented. 26. Mr. Lindsey testified that the debt- or’s escrow account was not monitored by the bank to maintain a watch on what occurred. 27. Jerry Whitehorn, a certified public accountant, testified as an expert witness on NBC’s posting practices and on tracing of funds through the account. Mr. White-horn had examined Exhibits 14 (account statements for January and February, 1989) and 15 (checks posted to the escrow account on January 25, 1989), and he testified that Exhibit 18 accurately reflected by charts, analysis and graphs the information contained in Exhibits 14 and 15. 28. As an auditor, Mr. Whitehorn would use the “first in — first out” method for tracing funds. He testified that this was the only logical method to use. Page one of Exhibit 18 traced the $50,000.00 Campos check from its deposit on January 25, 1989, at which time there was a pre-existing $143,391.81 credit which would be paid out first. Under the “first in — first out” method, money is traced in progression as credits and debits are made. Under the “first in — first out” tracing method, the $6,300.00 check payable to James O. Marty would have been paid out of the Campos $50,-000.00 deposit. (See Ex. 18) Mr. Whitehorn rejected the “last in — first out” method as illogical in banking, and he was unfamiliar with the “lowest intermediate balance” test. 29. Mr. Whitehorn conceded that tracing is a methodology and that funds in a bank account lose their separate identity upon commingling. 30. Mr. Whitehorn was not concerned, as an accountant, with whether the “first in — first out” method would result in equality for creditors in a bankruptcy scenario. 31. Mr. Whitehorn confirmed that on the dates at issue, NBC’s over-draft policy was that on a given day the smallest checks would clear first. 32. Mr. Steve Campos, Executor of his deceased father’s estate, testified that he and his father met with Benskin and dis830cussed his father’s conservative investment goals. He acknowledged that no restrictive notation appeared on his father’s $60,-000.00 cashier’s check. (Ex. 11) Mr. Campos thought, based upon the false information received from the debtor, that the funds had been invested in American Capital. 33. Mr. Benskin was re-called by the Trustee to testify that his company did on occasion purchase American Capital investments but in the name of the debtor and that by the time of his arrest, all American Capital investments had been sold. Specifically, the Campos $50,000.00 was not used to purchase American Capital. CONCLUSIONS OF LAW The Trustee’s complaint is a core proceeding. 28 U.S.C. § 157(b)(2)(F) and (H). As the Court’s findings indicate, it is clear that the debtor was operating a Ponzi scheme, through which the debtor obtained funds from clients under the false pretense of making investments for them. Illusory profits were often paid to some clients out of the funds paid in by new clients, and that is frequently the case in such schemes. See, e.g., Rosenberg v. Collins, 624 F.2d 659, 663-664 (5th Cir.1980). Tragically, some “investors,” such as Marty and Campos, were deceived by Mr. Benskin, while other “investors” were paid profits from their illusory investments. See, U.S. v. Benskin, 926 F.2d 562 (6th Cir.1991). There is no dispute that the debtor deposited and commingled all client funds into one “escrow” account at NBC. At least as to Marty and Campos, no investments were ever made in their names, and the debtor failed to maintain separate accounts for any of its clients. Fictitious statements were issued to the clients showing false balances. The debtor utilized the commingled escrow account for all business and some personal expenses. PREFERENTIAL TRANSFER TO MARTY First, the Court finds that the Trustee has not proven all elements of § 547(b)1 so as to establish that the transfer on February 10, 1989, by the debtor’s check to James O. Marty of $6,300.00 was a preferential transfer (Ex. 1), and the Court concludes that this transfer may not be avoided by the Trustee under § 547(b) and that it may not be recovered from Marty, who was the initial transferee, under § 550(a)(1). There is no factual dispute that the transfer was from the debtor’s account to Marty, who was a creditor, or one who had a pre-bankruptcy claim against the debtor. 11 U.S.C. § 101(10). Mr. Marty had previously deposited with the debtor a total of $11,000.00 and Marty acknowledged that this constituted an antecedent debt since Marty felt that he could demand its return at any time. In addition to the statutory presumption of insolvency under 11 U.S.C. § 547(f), this Court has found, after a separate insolvency trial, that both related debtors were insolvent for the entire year preceding the bankruptcy filing on April 14, 1989. The $6,300.00 transfer was by check dated February 10, 1989, clearly within the ninety day reach-back period of § 547(b)(4)(A). However, there was no proof concerning § 547(b)(5)’s requirement that Marty received more than he would have received in a Chapter 7 hypothetical liquidation. See, e.g., Braniff Airways, Inc. v. Exxon Co., 814 F.2d 1030, 1034 (5th Cir.1987) (“To compare what the creditor would have received in a Chapter 7 liquidation with what it received pre-petition, it is necessary to consider how the debt would have been treated in a Chapter 7 liquidation.”) The hypothetical Chapter 7 liquidation is measured from the date of the bankruptcy filing. In re Tenna Corp., 801 F.2d 819, 823 (6th Cir.1986). This of course is a Chapter 7 case. At the point of the bankruptcy filing, the debtor was insolvent which obviously means that there were insufficient assets to pay all debts in full. See 11 U.S.C. § 101(32). However, it would appear that Marty was not paid 100% of his claim. Mr. Marty had an unsecured claim for $11,000.00 and he received $6,300.00 or approximately 60% of his total claim. Section 547(b)(5)’s test requires close analysis. 831At the insolvency trial on January 7, 1991, of which Marty, like all non-jury avoidance defendants, was given notice, the Trustee’s expert, Mr. Alan Axelbeard, a certified public accountant, testified that at no point during 1988 and up until the bankruptcy filing did the debtor come within $400,000.00 of being solvent. The Court notes that there was no proof at the January 7, 1991 hearing or at this trial as to the percentage which would be available to unsecured creditors such as Marty in a hypothetical Chapter 7 liquidation. However, the proof at the insolvency hearing established that the debtor was insolvent throughout the year before and until the bankruptcy filing. It is clear from the proof that Marty was a general unsecured creditor. As such, it has been said by one Circuit Court that under § 547(b)(5) Marty “must be charged with the value of what was transferred [$6,300.00] plus any additional amount that he would be entitled to receive from a Chapter 7 liquidation [on the balance of his $11,000.00 unsecured claim]. [The] net result is that, as long as the distribution in bankruptcy is less than one hundred percent, any payment ‘on account’ to an unsecured creditor during the preference period will enable that creditor to receive more than he would have received in liquidation had the payment not been made.” In re Lewis W. Shurtleff, Inc., 778 F.2d 1416, 1421 (9th Cir.1985), applying Palmer Clay Products Co. v. Brown, 297 U.S. 227, 56 S.Ct. 450, 80 L.Ed. 655 (1936); see generally 4 KING, COLLIER ON BANKRUPTCY II 547.08 at 547-42 & 43 (1991); 2 NORTON BANKR. LAW & PRAC. § 32.09 (1991). There has never been any dispute concerning the unsecured creditors receiving less than one hundred percent, a fact which was established by the insolvency of the debtor as of the bankruptcy filing date. This Court finds the expression of the § 547(b)(5) test in Shurtleff to be somewhat confusing. As stated by the Sixth Circuit in Tenna and again in In re Royal Golf Products Corp., 908 F.2d 91, 95 (6th Cir.1990), the hypothetical Chapter 7 liquidation is conducted as of the bankruptcy filing date, at which point this debtor was insolvent. Section 547(b)(5) requires an assumption that the $6,300.00 transfer to Marty had not been made and that instead Marty would be treated as a general unsecured creditor as of the bankruptcy filing date. On that date, because of the debtor’s insolvency, the unsecured creditors would clearly not receive full payment on their claims. In contrast, Marty received $6,300.00, which of course diminished the estate which otherwise would have been available on the bankruptcy filing date. Another Circuit Court has observed: “As long as the [preferential] transfers diminish the bankrupt’s estate available for distribution, creditors who are allowed to keep transfers would be enabled to receive more than their share ... [otherwise] they will ultimately receive a larger share of their unsecured claims than other unsecured creditors.” Barash v. Public Finance Corp., et al., 658 F.2d 504, 509 (7th Cir.1981). However, the Barash test appears to assume that the suspect preferential transfer would keep similar unsecured creditors from receiving the same percentage as the alleged preferred creditor received. As COLLIER expresses the test, “any payment to a general unsecured creditor within the ninety-day period preceding the filing of the petition would be preferential if other creditors in the same class would not receive the same payment in a chapter 7 liquidation, i.e., the chapter 7 distribution plus the payment received.” COLLIER ON BANKRUPTCY, ¶ 547.08 at 547-41 & 42. Palmer Clay Products requires the bankruptcy court to look at the “actual effect of the [preferential] payments as determined when bankruptcy results.” In re Royal Golf Products Corp., 908 F.2d at 94, quoting Palmer Clay Products, 297 U.S. at 229, 56 S.Ct. at 450. It can not be determined from the proof that the actual effect of the $6,300.00 payment to Marty is that Marty received preferential treatment over similarly positioned unsecured creditors. In other words and quite simply, there was no proof offered by the Trustee as to the percentage available to unsecured creditors as of the bankruptcy filing date or as to the effect a return of this $6,300.00 would have on oth832er unsecured creditors. In the absence of proof this Court should not assume that Marty received more than he would have received in a Chapter 7 liquidation. There were no defenses offered under § 547(c).2 However, because of failure of proof under § 547(b)(5), the Court concludes that the $6,300.00 transfer to Mr. Marty was not a preference which is avoidable by the Trustee. TRACING BY CAMPOS The initial result of the Court's pri- or conclusion is that the $6,300.00 is not property of this bankruptcy estate and the remaining issue is whether the Campos estate may prevail over Marty. At this stage, the difficult question of the bankruptcy court’s jurisdiction should be discussed. Had the Court concluded that the Trustee could avoid and recover the preference from Marty, the dispute between Campos and the Trustee would certainly be core since it would involve property of the estate. 28 U.S.C. § 157(b)(2)(A), (B) and (O). Now, the focus is different in that the dispute does not involve the Trustee nor property of the estate. This Court is cautious about construing its core jurisdiction too broadly. See, e.g., In re G. Weeks Securities, Inc., 89 B.R. 697, 707 (Bankr.W.D.Tenn.1988). However, the parties treated this entire trial as a core proceeding, and the resolution of the dispute between Campos and Marty will affect claims against this estate and does affect “the adjustment of the debtor-creditor ... relationship.” 28 U.S.C. § 157(b)(2)(A) and (O). Further, forcing Campos and Marty to retry their dispute in state court would be burdensome on the parties and that court. Therefore, the Court will enter a final order, which of course will not prejudice the rights of the parties to have Article III appellate review under 28 U.S.C. § 158. Mr. Marty had pointed to § 541(b)(1) which excludes from property of the bankruptcy estate “any power that the debtor may only exercise solely for the benefit of an entity other than the debtor.” This exception is now moot but clearly does not apply under the facts presented to this Court. While Marty intended for his funds to be invested and while Benskin testified to a short-lived intent to invest Marty’s funds, the over-whelming evidence is that Benskin was operating a Ponzi scheme, that he used Marty’s funds for whatever purpose suited Benskin, and that he did not in fact invest Marty’s funds for Marty. Marty argues that his funds were placed in trust and there is some irony in that this argument is identical to that of Campos. The difference is that Marty’s funds were dissipated by Benskin and no identifiable Marty trust res existed when Marty received his $6,300.00 check. The term “escrow” on the NBC account was an obvious misnomer. Mr. Benskin was engaging in a fraudulent activity and the Court concludes that he never actually or specifically intended to invest Marty’s funds. Clearly, Benskin retained sole control over the disposition of those funds, notwithstanding any fiduciary obligation Benskin owed to his clients.3 In determining whether Campos may trace its deposit to the Marty check, the first issue is whether the Marty and/or Campos funds were held by the debtor in either an express or constructive trust. State law may certainly be a factor in the analysis of whether a trust existed; although, in a bankruptcy case, state law would not necessarily determine the outcome, since bankruptcy law and policy and the supremacy clause to the United States Constitution come into play. See, e.g., In re Winkle, 128 B.R. 529, 534-35 (Bankr.S.D.Ohio 1991). “In short, state law must be applied in a manner consistent with federal bankruptcy law.” Id. at 535. Bankruptcy law and policy is still relevant notwithstanding the conclusion that the Marty check is not recoverable by the Trustee, because both Marty and Campos remain 833creditors of this bankruptcy estate, and the “adjustment of the debtor-creditor ... relationship” is a continuing issue. 28 U.S.C. § 157(b)(2)(0). However, bankruptcy law and policy will be more significant in those proceedings where the Trustee does establish the elements of § 547 or § 548. Campos’ counsel argues that Bens-kin did not have Campos’ permission to use the Campos check for noninvestment purposes. The same is true for Marty and presumably for all Benskin clients. It is extremely doubtful that any client “investing” funds with Benskin would consent to noninvestment uses. There is no question that Benskin obtained the Campos funds with fraudulent intent and that the Campos $50,000.00 check was not invested, notwithstanding the fictitious statement sent to Campos indicating that investments had been made. Campos of course argues that use of the “first in-first out” tracing method logically demonstrates that the $6,300.00 check to Marty was paid out of the $50,000.00 Campos deposit. (See Ex. 18) Further, Campos argues that the fact that Campos desired to have a conservative investment in American Capital, that Benskin falsely represented that such an investment would be made, and that Benskin did in fact invest another client’s funds in American Capital (Exs. 7 & 8), all point to a conclusion that Benskin misappropriated Campos’ $50,000.00 and that Benskin held the Campos funds in actual or constructive trust. Campos’ counsel and witnesses have done an excellent job of graphically depicting their tracing concept, and there is no factual dispute that under the “first in-first out” method the Marty check was paid out of the Campos $50,000.00 deposit. This tracing method appears to be accepted in Tennessee, at least outside of a bankruptcy context. See, e.g., State ex rel. Robertson v. Bank of Bristol, 165 Tenn. 461, 55 S.W.2d 771 (1933); State ex rel. Robertson v. Thomas W. Wrenne & Co., 170 Tenn. 131, 92 S.W.2d 416 (1936). However, the threshold issue is whether the Campos $50,000.00 was received and held in trust by Benskin or his company. An analysis of the Campos arguments involves many factors. For example, Marty also argues, as would all of Benskin’s clients, that their “investments” were paid in a trust relationship to Benskin. Of course, the Marty “investment” had been consumed by the time Marty received his $6,300.00 check. It may nevertheless be argued that the equities do not on their face favor Campos any more than any other “investor” who lost money in this Ponzi scheme. The Court, however, concludes in this particular proceeding that the equities favor Campos over Marty. Further, while Mr. Campos expressed a desire for a conservative investment, the $50,000.00 check was not specifically restricted nor was it placed into a separate or true escrow account. Rather, it was commingled into a common fund. Mr. Campos of course did not know how Benskin would deposit the money. It is true that Campos could easily have established a written trust, could have restricted the use of the funds in writing, or could otherwise have expressed a written intent to impose a trust obligation on Benskin. The fact is that there was no written trust agreement. The establishment of an oral trust in Tennessee requires proof “greater than a preponderance of the evidence.” Kopsombut-Myint Buddhist Center v. State Board of Equalization, 728 S.W.2d 327, 333 (Tenn.App.1986). “The existence of a trust requires proof of three elements: (1) a trustee who holds property and who is subject to the equitable duties to deal with it for the benefit of another, (2) a beneficiary to whom the trustee owes the equitable duties to deal with the trust property for his benefit, and (3) identifiable trust property.” Id. Mr. Campos made two investments with Benskin, neither of which was specifically restricted in writing. Steve Campos testified that he and his father met with Bens-kin and that this father wanted to invest conservatively in government backed treasury bills. They assumed that the money had been so invested because of fictitious statements issued by the debtor. Former Bankruptcy Judge Clive Bare observed: “Subject to genera] rules as to the essentials of an express trust [citing Bo-834gert, Law of Trusts ], where a person has or accepts possession of personal property with the express or implied understanding that he is not to hold it as his own absolute property, but is to hold and apply it for certain specific purposes or for the benefit of certain specified persons, a valid and enforceable express trust exists.” In re Elrod, 42 B.R. 468, 473 (Bankr.E.D.Tenn.1984). However, Judge Bare has also noted that it is dependent “upon the manifested intention of the parties whether a trust or a debt is created. If the intention is that the money shall be kept or used as a separate fund for the benefit of the payor or a third person, a trust is created. If the intention is that the person receiving the money shall have the unrestricted use thereof, being liable to pay a similar amount whether with or without interest to the payor or to a third person, a debt is created.” In re Property Leasing & Management, Inc., 50 B.R. 804, 807-808 (Bankr.E.D.Tenn.1985), citing, Restatement (Second) of Trusts, § 12 comment g (1959). The proof in the present case is that Mr. Campos desired to have his money invested in treasury bills or American Capital and he discussed that with Benskin. Mr. Bens-kin did hold himself out to represent American Capital. It is true that Campos failed to express that his “investments” should be kept in a separate fund, but Campos intended for a distinct investment to be made on his behalf. The intention of Benskin is clear — he intended to defraud Mr. Campos. Nevertheless, Benskin through his fraudulent intent can not escape his fiduciary obligation to Campos. Benskin represented to Campos through words and actions that he was a legitimate investment adviser, and Benskin accepted Campos’ $50,-000.00 with an equitable duty to deal with the $50,000.00 for Campos’ benefit. The fact that Benskin failed to do that does not destroy the trust relationship. Campos has traced the $6,300.00 check to Marty from an identifiable $50,000.00 deposit of Campos’ check. Therefore, from the facts presented here, the Court concludes that the $50,000.00 was paid in trust to Benskin and that to the extent it is identifiable, the trust property still existed. From an equitable view, Marty’s money had already been dissipated when Marty received his $6,300.00 check, and it is not fair for Marty to receive a return of his nonexistent funds from Campos’ deposit. The Court feels compelled to observe that this result may be unique to this proceeding. Had the Trustee carried the burden of proving all elements of § 547(b), the Marty transfer would have been an avoidable preference and, as such, it would have been property of the estate. Then, a different tracing methodology may have been employed. See, e.g., First Federal of Michigan v. Barrow, 878 F.2d 912, 916 (6th Cir.1989). Further, Mr. Campos would have been competing as an unsecured creditor for his pro-rata share of the bankruptcy estate. Therefore, this opinion should not be read as a per se ruling that all intervenors necessarily would prevail against the bankruptcy Trustee. But, under the unique facts of this proceeding, the Campos estate must prevail over Mr. Marty. IT IS THEREFORE ORDERED: 1. The Trustee failed to prove the necessary element of § 547(b)(5), and the $6,300.00 check to Mr. Marty is not an avoidable preferential transfer; 2. Applying Tennessee trust law, the Court concludes that the Campos $50,-000.00 was trust property which was identifiable and to which the $6,300.00 Marty check was traceable; 3. The Marty funds had been dissipated and the $6,300.00 check to Marty was paid by the bank from the Campos $50,000.00 deposit; and 4. Judgment is rendered in favor of the Campos estate against James O. Marty for $6,300.00 plus post-judgment interest, at the Tennessee statutory rate, until paid. SO ORDERED. . Section 547(g) places upon the trustee the burden of proving each element of § 547(b). . See, e.g., In re Southern Industrial Banking Corp., 87 B.R. 524 (Bankr.E.D.Tenn.1988) (concluding that Ponzi schemes are not legitimate businesses and thus § 547(c)(2) is not an available defense). . For example, Benskin testified that the memo line of any client checks was not determinative of his disposition of those checks. See, Finding of Fact, No. 14.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491395/	ORDER J. VINCENT AUG, Jr., Bankruptcy Judge. BACKGROUND On February 1, 1989, Chubb Insurance Company of Canada (“Chubb”) issued an Executive Liability and Indemnification Policy (“Policy”) to Campeau Corporation and its direct and indirect subsidiaries, including Allied Stores Corporation (“Debt- or”). The Policy obligates Chubb to pay on behalf of the directors and officers of the Debtor all amounts which they become legally obligated to pay on account of claims asserted against them for a wrongful act committed, attempted, or allegedly committed or attempted, in their respective capacities as officers or directors. Endorsement No. 3 of the Policy provides that coverage is excluded if the claim is “brought by an Insured Person or by any Insured Organization except ... a claim that is a shareholder’s derivative action made on behalf of an Insured Organization ... by one or more claimants who are not Insured Persons ...”. The word “claim” is not defined in the Policy. On May 2, 1990, the Debtor and the Bondholders entered into a Stipulation and Order wherein the Bondholders were empowered to investigate possible claims arising out of certain intercompany transactions, including the sale by Allied of its Ann Taylor subsidiary and the sale by Allied of its Brooks Brothers subsidiary. The Bondholders further agreed that no litigation would be commenced prior to September 12, 1990 regarding said claims. On September 6, 1990, the Bondholders wrote to the Debtor expressing their intent to commence litigation after expiration of the requisite time period. The Debtor transmitted a copy of this letter to Chubb. On September 10, 1990, the Debtor moved for an order that the Bondholders not be permitted to file a complaint in the Debtor’s name for at least the duration of the exclusive filing period or until February 28, 1991; the requested relief was granted by this Court on October 26, 1990. On March 1, 1991, this Court then ordered that its Order of October 26, 1990, be continued at least sixty days. In December of 1990, a draft complaint was apparently prepared and at some time forwarded to Chubb. A copy of this draft complaint has not been presented to this Court. On April 1, 1991, Chubb wrote to the Debtor denying any liability under the Policy because: 1) no claim was currently made against any insured person under the Policy and because 2) Endorsement No 3 excluded any claim from coverage. In April and May of 1991, the Debtor and the Bondholders agreed on a mechanism for compromising the Bondholders’ various claims in the context of a plan of reorganization. In pertinent part, the Bondholders agreed not to commence litigation regarding the subject claims before May 31,1992, unless a plan of reorganization was filed which provided for a materially adverse change in the agreed amount to be received by the Bondholders as set forth in the plan filed on April 29, 1991. On July 3, 1991, Chubb, by letter, again denied any liability under the Policy, especially in view of the agreement between the Debtor and the Bondholders prohibiting claims against the directors and officers under the then present circumstances. However, Chubb did request additional information from the Debtor regarding the 949subject claims. Also, on July 3, 1991, the Committee sent a more detailed analysis of the subject claims to Chubb. On October 3, 1991, Chubb sent a letter denying coverage under the Policy to Campeau Corporation, with a copy to the Debtor and the Bondholders. On October 28, 1991, the Debtor filed its Third Amended Joint Plan of Reorganization (“Plan”) and accompanying Disclosure Statement which incorporated the above referenced provision of the April/May 1991 agreement. The Plan also contains provisions that would operate to settle and compromise the Bondholders' claims if the Plan is approved and confirmed. Three days prior to the filing of the Plan, the Debtor and the Bondholders (collectively, “Plaintiffs”), filed their Complaint for Declaratory Judgment (Doc. 1) requesting a declaratory judgment from this Court a) that the Bondholders have in fact asserted a claim under the Policy and b) that the coverage of the policy is not barred by Endorsement No. 3. On November 15, 1991, the Plaintiffs filed their Motion for Summary Judgment (Doc. 4) and Supporting Memorandum (Doc. 5). On December 2, 1991, Chubb filed its Motion to Dismiss (Doc. 28), Motion to Abstain (Doc. 29), Motion for Temporary Stay Pending Determination of Motions to Dismiss and to Abstain (Doc. 30), and Motion for Determination That Proceeding is Non-Core (Doc. 31). Four days later, the Debt- or and the Bondholders responded with their Memorandum in Opposition (Doc. 38). On December 11, 1991, the Bondholders filed their separate Supplemental Memorandum (Doc. 45). Also on December 11, 1991, Chubb filed its two Reply Memoranda (Docs. 46 & 47). On December 13, 1991, Chubb filed its Motion to Strike the Supplemental Memorandum (Doc. 55), which was followed by the Bondholders’ Opposition (Doc. 57) and Chubb’s Reply (Doc. 61). Also, on December 13, 1991, the Bondholders filed their Motion for Leave to File Supplemental Affidavit Under Seal (Doc. 51). Chubb responded with its Memorandum in Opposition (Doc. 59). I. Bondholder’s Motion for Leave to File Supplemental Affidavit While perhaps the Supplemental Affidavit would have been better presented as an Amended Complaint, given the flurry of pleadings in this adversary proceeding and the Plaintiffs’ need to obtain a decision from the Court prior to the scheduled confirmation hearing, we find the Bondholders’ Motion to be well taken and hereby grant same. Chubb did receive the correspondence which is the substance of the Supplemental Affidavit back in July of 1990 and we find that no prejudice to Chubb is caused by our ruling. II. Chubb’s Motion to Dismiss We find Chubb’s Motion to Dismiss to be well taken and hereby grant same on the ground that there is no justiciable case or controversy before this Court at this time. Mootness is a jurisdictional question. A court may declare the rights and liabilities of parties only when they are engaged in a case of actual controversy. 28 U.S.C. § 2201. In the present case, Plaintiffs are asking for an advisory opinion as to whether or not they have asserted a claim under the Policy and, if this Court finds that they have asserted a claim, if the Endorsement No. 3 does not exclude coverage. The following two facts are dispositive: First, if the proposed Plan is confirmed, the directors and officers will be released from any liability and no claim against them may ever be brought by the Plaintiffs. Second, the Bondholders have agreed not to commence litigation against the directors and officers until at least May 31, 1992. With regard to the Plaintiffs’ request for a declaratory judgment that the Bondholders have asserted a claim under the Policy, we find that this is not a controversy ripe for review at this time. See City Communications, Inc. v. City of Detroit, 888 F.2d 1081, 1089 (6th Cir.1989) (case “anchored in future events that may not occur as anticipated, or at all” found to lack ripeness for jurisdiction); International Union v. Dana Corporation, 697 F.2d 718 (6th Cir.9501983) (where parties had signed settlement agreement resolving all issues in the case, case moot for lack of justiciable case or controversy); In re Murray Indus., Inc., 122 B.R. 135 (Bankr.M.D., Fla.1990) (proceeding dismissed for lack of case or controversy where plaintiff sought declaration concerning question of whether there will be coverage under policy issued by insurer if debtor pursues claims against its officers and directors). In view of the above ruling, we find that it is not necessary for us to reach the question as to whether or not Endorsement No. 3 would exclude coverage. This Court cannot help but note with some amusement the contradictory position taken by the Debtor on this issue with regard to the proof of claim filed by Robert Campeau. A portion of Campeau’s claim sought payment for undetermined amounts of indemnification for potential claims against Campeau arising out of actions he took while director of the Debtor. In opposition to that proof of claim, the Debtor stated that no claim had yet been asserted against Campeau and therefore the portion of the proof of claim seeking indemnification should fail (Doc. 6421, filed Nov. 11,1991). The Debtor cannot have its cake and eat it too. If a claim has not been made against a director for purposes of satisfying 11 U.S.C. § 502(e)(1)(B), then a claim has not been made against a director for purposes of payment on the Policy. In the interest of judicial economy, we find it unnecessary to rule on Chubb’s additional defenses that the adversary proceeding does not meet the jurisdictional thresholds set forth in 28 U.S.C. § 1334(b) and § 1334(d), that the complaint should be dismissed for failure to join indispensable partners, and that the Court lacks personal jurisdiction over Chubb. III.Chubb’s Motion to Strike Supplemental Memorandum Although the Bondholders’ Supplemental Memorandum is in violation of Local Bankruptcy Rule 5.4(b), which limits the filing of additional memoranda, we hereby deny Chubb’s Motion to Strike the Supplemental Memorandum because said Memorandum cuts to the chase in this adversary proceeding: The Bondholders are desperate for a contribution from Chubb. But therein lies the rub. The Bondholders have, for the time being, negotiated away their right to bring claims against the directors and officers. This Court will not grant what the Bondholders have already given away. IV. Chubb’s Motion to Abstain In view of our above ruling on Chubb’s Motion to Dismiss, we find it not necessary to rule on Chubb’s Motion to Abstain, which was made in the alternative. V. Chubb’s Motion for Temporary Stay In view of our above ruling on Chubb’s motion to Dismiss, we find that Chubb’s Motion for Temporary Stay has been mooted. IT IS SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483648/	[Cite as State v. Williams, 2022-Ohio-4062.] IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY STATE OF OHIO, CASE NO. 2022-T-0043 Plaintiff-Appellee, Criminal Appeal from the - vs - Court of Common Pleas PIERRE L. WILLIAMS, Trial Court No. 2021 CR 00917 Defendant-Appellant. OPINION Decided: November 14, 2022 Judgment: Affirmed Dennis Watkins, Trumbull County Prosecutor, and Ryan J. Sanders, Assistant Prosecutor, Administration Building, Fourth Floor, 160 High Street, N.W., Warren, OH 44481 (For Plaintiff-Appellee). Sean P. Martin, 113 North Chestnut Street, Suite A, Jefferson, OH 44047 (For Defendant-Appellant). MARY JANE TRAPP, J. {¶1} Appellant, Pierre L. Williams (“Mr. Williams”), appeals from the judgment entry of the Trumbull County Court of Common Pleas, which sentenced him to serve 180- days in jail after he pleaded guilty to one count of domestic violence, a first-degree misdemeanor. {¶2} Mr. Williams raises one assignment of error on appeal, in which he contends the trial court erred in sentencing him to serve time in jail, contrary to the purposes of misdemeanor sentencing. {¶3} After a careful review of the record and pertinent law, we overrule Mr. Williams’ assignment of error, finding it to be without merit. During the sentencing hearing, the trial court reviewed Mr. Williams’ extensive criminal history, which included five domestic violence convictions, as well as a conviction that occurred while this case was pending (not a pending charge as Mr. Williams suggests). In addition, the probation department recommended that he should not be placed on probation. Mr. Williams’ previous sentences, which consisted mostly of probation, seemingly did nothing to deter him from repeatedly committing the same type of offense. Further, his sentence is within the statutory range, and there is nothing to suggest that his sentence is contrary to law. Thus, we cannot say the trial court abused its discretion by sentencing Mr. Williams to serve 180-days in jail. {¶4} The judgment of the Trumbull County Court of Common Pleas is affirmed. Substantive and Procedural History {¶5} After being bound over from the Warren Municipal Court to the Trumbull County Court of Common Pleas, a grand jury handed down an indictment charging Mr. Williams with one count of domestic violence, with a previous domestic violence conviction, a fourth-degree felony, in violation of R.C. 2919.25(A), (D)(1) and (D)(3). {¶6} Mr. Williams entered into a plea agreement with the state, and the court accepted his guilty plea to one count of domestic violence, a first-degree misdemeanor, in violation of R.C. 2919.25(A), (D)(1), and (D)(2). {¶7} Several months later, after a pre-sentence investigation, the case proceeded to a sentencing hearing. The victim, Mr. Williams’ daughter, urged the court to order anger management and rehabilitation instead of serving time in jail. The court 2 Case No. 2022-T-0043 stated it “reviewed the presentence investigation prepared by the Adult Probation Department. The Court does take note the Defendant has five prior convictions for Domestic Violence, as well as an additional conviction for Domestic Violence while this case was pending.” {¶8} The court sentenced Mr. Williams to serve 180 days in the county jail. {¶9} Mr. Williams raises one assignment of error on appeal: {¶10} “The court erred in sentencing the Appellant to incarceration contrary to the purposes of misdemeanor sentencing.” Misdemeanor Sentencing {¶11} In his sole assignment of error, Mr. Williams contends the trial court erred in imposing a jail sentence contrary to the purposes of misdemeanor sentencing because the victim requested community control with a focus on alcohol and anger management treatment, the state made no request for jail time, and further, the trial court impermissibly referenced a pending domestic violence charge in an unrelated case. {¶12} “‘Misdemeanor sentencing is within the discretion of the trial court and a sentence will not be disturbed absent an abuse of discretion.’” State v. Corbissero, 11th Dist. Ashtabula No. 2011-A-0028, 2012-Ohio-1449, ¶ 53, quoting Conneaut v. Peaspanen, 11th Dist. Ashtabula No. 2004-A-0053, 2005-Ohio-4658, ¶ 18. An abuse of discretion is the trial court’s “‘failure to exercise sound, reasonable, and legal decision- making.’” State v. Beechler, 2d Dist. Clark No. 09-CA-54, 2010-Ohio-1900, ¶ 62, quoting Black’s Law Dictionary 11 (8th Ed.2004). {¶13} R.C. 2929.21(A) provides that a court sentencing a misdemeanor offender “shall be guided by the overriding purposes of misdemeanor sentencing,” i.e., “to protect 3 Case No. 2022-T-0043 the public from future crime by the offender and others and to punish the offender.” A sentence imposed for a misdemeanor “shall be reasonably calculated to achieve the two overriding purposes of misdemeanor sentencing * * , commensurate with and not demeaning to the seriousness of the offender’s conduct and its impact upon the victim, and consistent with sentences imposed for similar offenses committed by similar offenders.” R.C. 2929.21(B). {¶14} To achieve the two overriding purposes of misdemeanor sentencing, the sentencing court must consider the criteria set out in R.C. 2929.22(B). State v. Cooper, 11th Dist. Ashtabula Nos. 2015-A-0042, 2015-A-0043, 2015-A-0044, & 2015-A-0045, 2016-Ohio-4730, ¶ 9. R.C. 2929.22 does not, however, mandate that the trial court state on the record that it considered the applicable statutory factors. State v. Kish, 11th Dist. Lake No. 2010-L-138, 2011-Ohio-4172, ¶ 8. “‘A silent record raises the presumption that the trial court considered all of the factors * *.’” State v. Peppeard, 11th Dist. Portage No. 2008-P-0058, 2009-Ohio-1648, ¶ 75, quoting Peaspanen at ¶ 26. Consequently, when the misdemeanor offender’s sentence is within the statutory limits and there is no affirmative indication on the record that the trial court failed to consider the factors set forth in R.C. 2929.22, the reviewing court is to presume the trial court considered the applicable statutory factors when it imposed the sentence. Peaspanen at ¶ 18. {¶15} Because a silent record raises the presumption that the trial court considered the misdemeanor purposes and factors pursuant to R.C. 2929.21 and R.C. 2929.22, and Mr. Williams’ sentence is within the statutory limits, we cannot say the trial court abused its discretion in ordering Mr. Williams to serve 180-days in jail. During the sentencing hearing, the trial court reviewed Mr. Williams’ extensive criminal history, which 4 Case No. 2022-T-0043 included five domestic violence convictions. Further, the probation department recommended that he should not be placed on probation. {¶16} In addition, we do not need to address Mr. Williams’ argument that the trial court erroneously considered a pending charge during sentencing because, as our review of the transcript reveals, the trial court considered an additional conviction that occurred while the instant case was pending. {¶17} The court reviewed that Mr. Williams’ previous sentences, which consisted mostly of probation, seemingly did nothing to deter him from repeatedly committing the same type of offense. Mr. Williams’ sentence is within the statutory range, and there is nothing to suggest that his sentence is contrary to law. {¶18} Mr. Williams’ assignment of error is overruled. {¶19} The judgment of the Trumbull County Court of Common Pleas is affirmed. THOMAS R. WRIGHT, P.J., JOHN J. EKLUND, J., concur. 5 Case No. 2022-T-0043	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483637/	NOTICE 2022 IL App (4th) 210667-U This Order was filed under FILED Supreme Court Rule 23 and is November 14, 2022 NO. 4-21-0667 not precedent except in the Carla Bender limited circumstances allowed 4th District Appellate IN THE APPELLATE COURT under Rule 23(e)(1). Court, IL OF ILLINOIS FOURTH DISTRICT TRENT JACOB WARREN, ) Appeal from the Plaintiff-Appellant, ) Circuit Court of v. ) Sangamon County THE DEPARTMENT OF CORRECTIONS, ) No. 21MR26 Defendant-Appellee. ) ) Honorable ) Christopher G. Perrin, ) Judge Presiding. JUSTICE ZENOFF delivered the judgment of the court. Justices DeArmond and Turner concurred in the judgment. ORDER ¶1 Held: The appellate court affirmed, concluding the circuit court properly dismissed the plaintiff’s complaint because he failed to state a cause of action under the Illinois Freedom of Information Act. ¶2 Plaintiff, Trent Jacob Warren, appeals from the Sangamon County circuit court’s dismissal of his complaint under the Illinois Freedom of Information Act (FOIA) (5 ILCS 140/11 (West 2020)), which alleged defendant, the Illinois Department of Corrections (Department), improperly denied several of his requests for public records. Warren argues the circuit court erroneously dismissed his complaint because it sufficiently stated a claim the Department violated FOIA in denying his requests for records. The Department argues the court properly allowed its motion to dismiss Warren’s complaint. We affirm the circuit court’s judgment. ¶3 I. BACKGROUND ¶4 A. Warren’s FOIA Requests ¶5 Warren is an individual residing at the Pinckneyville Correctional Center (Pinckneyville) in the custody of the Department. Between October 2019 and July 2020, Warren filed six requests for records with the Department, which we summarize chronologically below. ¶6 In October 2019, Warren filed a FOIA request with the Department seeking temperature monitoring records from the chief engineer’s office of Lawrence Correctional Center (Lawrence) for “every hour” for two housing units at Lawrence. Warren specifically requested “computer printouts showing the temperature at each building for every hour of each day.” In response, the Department notified Warren it did not “maintain or possess records responsive” to his request. ¶7 On March 6, 2020, Warren requested two reports from Pinckneyville. Specifically, Warren requested (1) monthly “health and safety” reports from the years 2019 to 2020 and (2) “building inspection reports” from 2019. The Department denied respondent’s request, asserting the materials requested were exempt from disclosure under FOIA because they were prepared for internal audits of public bodies. ¶8 On April 21, 2020, Warren requested (1) copies of all FOIA requests denied in 2020, (2) “information of why psychotropic meds Effexor was banned from [the Department] and its short term and long term side effects,” and (3) a copy of his current FOIA request. In response, the Department asked Warren to clarify whether he sought copies of the denials of his own FOIA requests or the denials of all requests that occurred in 2020. The Department further requested Warren to narrow the time period to a specific range to facilitate locating the requested records. The Department then explained Warren’s “general request” for “information” on -2- Effexor did not reasonably identify a public record but provided Warren a copy of his current FOIA request. ¶9 On June 11, 2020, Warren requested records from Menard Correctional Center (Menard). Warren requested Menard’s (1) monthly health and sanitation reports for 2017, April 2020, and May 2020 and (2) copies of the denials of his own FOIA requests from 2020, the originals of those requests, and the original of his current request. The Department provided Warren copies of his FOIA requests from 2020 with the exception of four requests which it had already sent previously. The Department did not provide Warren with the denials of those requests, explaining it had already sent Warren those documents. The Department further denied Warren’s request for the health, safety, and sanitation records from Menard, asserting they were exempt from disclosure under FOIA because they were materials prepared for internal audits of public bodies. ¶ 10 In July 2020, Warren requested (1) all records and staff operating procedures and policies regarding inmate property, specifically protocols for when an inmate is unable to pack his own property and (2) copies of the Department’s denials of two of his previous FOIA requests. In response to the first request, the Department provided Warren with a Pinckneyville institutional directive titled, “Use and Control of Offender Storage Boxes.” The Department did not provide the relevant administrative directive, asserting the record was exempt from disclosure under FOIA because it was available to Warren in the correctional center library. The Department denied Warren’s second request because it had previously mailed him copies of those documents. ¶ 11 Also in July 2020, Warren requested all “protocol[s] and policies regarding video camera footage” from Department prison cameras; rules and protocols regarding maintenance, -3- retention, and disposal of video camera footage; and the parties responsible for keeping those records. Warren additionally requested information regarding “rules and staff protocol[s] of grievances and grievance officer routine[s] regarding investigation of their complaint of grievances.” The Department responded that (1) it did not maintain or possess records responsive to the former request and (2) the latter request did not reasonably identify a public record. ¶ 12 B. Requests for Review ¶ 13 In each of its responses to Warren’s six aforementioned FOIA requests, the Department stated Warren could seek review of each denied request by filing an action in court under section 11 of FOIA (5 ILCS 140/11 (West 2020)), or by requesting review from the Public Access Counselor (PAC) under section 9.5(a) of FOIA (5 ILCS 140/9.5(a) (West 2020)). The Department indicated respondent was required to attach a copy of his original FOIA request and the corresponding denial letter in a request for review by the PAC. ¶ 14 1. PAC Review and Complaint ¶ 15 Warren sought PAC review of each of the Department’s denials of his requests for records. The PAC declined to review Warren’s March 2020 and two July 2020 FOIA requests because he failed to include copies of his underlying FOIA requests within the 60-day period to submit his requests for PAC review, citing section 9.5(a) of FOIA (5 ILCS 140/9.5(a) (West 2020)). The PAC determined that no further inquiry was warranted regarding the other three requests, indicated it would resolve the requests by means other than a binding opinion, and closed the file. ¶ 16 In January 2021, Warren filed the instant complaint, alleging the Department improperly denied his six FOIA requests. Warren sought (1) a declaration the Department violated FOIA and otherwise acted in bad faith by denying his FOIA requests, (2) an order -4- directing the Department to provide all requested documents, and (3) civil penalties, attorney fees, and court costs. Warren attached to his complaint the copies of his FOIA requests, the Department’s responses, his requests for PAC review, the PAC’s responses, and a “Physical Plant Service Work Order Log” that appeared to have been obtained from the Department. ¶ 17 2. Department’s Motion to Dismiss ¶ 18 In July 2021, the Department filed a combined motion to dismiss Warren’s complaint under section 2-619.1 of the Code of Civil Procedure (Procedure Code) (735 ILCS 5/2-619.1 (West 2020)). ¶ 19 The Department argued the circuit court should dismiss two claims under section 2-615 of the Procedure Code (735 ILCS 5/2-615 (West 2020)), namely (1) his request for “copies of all denial[s] of FOIA requests for 2020” (count II) and (2) the Department’s administrative directive on the storage of inmate property (count I). The Department argued Warren failed to state a claim the Department improperly denied these requests because (1) the former request was overbroad, vague, and did not reasonably identify a public record and (2) the latter requested materials were exempt from disclosure as they were available to Warren in the Pinckneyville library. ¶ 20 The Department argued the circuit court should dismiss the remaining claims under section 2-619 of the Procedure Code (735 ILCS 5/2-619 (West 2020)). Specifically, the Department argued both Warren’s inquiries for information on Effexor (count II) and “rules and staff protocols” governing grievances (count IV) did not reasonably identify public records. The Department further argued the requested video camera footage (count IV) and temperature monitoring records (count VI) were exempt from disclosure because the Department did not maintain such records. As to the building inspection reports (count V) and health, sanitation, and -5- safety reports (counts III and V), the Department argued those materials were exempt from disclosure because they were prepared for use in internal audits. Finally, the Department argued Warren’s requests for copies of its denials of Warren’s previous FOIA requests (counts I and III) were unduly burdensome because the Department previously provided these documents to Warren when the requests were denied. ¶ 21 In October 2021, following a hearing, the circuit court entered a written order allowing the Department’s motion to dismiss for the reasons stated in the memorandum attached to the Department’s motion. ¶ 22 This appeal followed. ¶ 23 II. ANALYSIS ¶ 24 On appeal, Warren argues the circuit court erroneously dismissed his complaint because it sufficiently stated a claim the Department violated FOIA in denying his requests for records. The Department argues the circuit court’s dismissal was proper. We agree with the Department and affirm the circuit court’s judgment. ¶ 25 A. Applicable Law ¶ 26 A motion under section 2-619.1 of the Procedure Code allows a party to “combine a section 2-615 motion to dismiss based upon a plaintiff’s substantially insufficient pleadings with a section 2-619 motion to dismiss based upon certain defects or defenses.” Edelman, Combs & Latturner v. Hinshaw & Culbertson, 338 Ill. App. 3d 156, 164 (2003). On appeal, this court reviews the circuit court's dismissal of a complaint pursuant to section 2-619.1 de novo. Morris v. Harvey Cycle & Camper, Inc., 392 Ill. App. 3d 399, 402 (2009). ¶ 27 In Illinois, FOIA governs the inspection of public records. 5 ILCS 140/1.2 (West 2020) (“All records in the custody or possession of a public body are presumed to be open to -6- inspection or copying.”). Unless subject to exemption, “[e]ach public body shall make available to any person for inspection or copying all public records.” 5 ILCS 140/3(a) (West 2020). A FOIA request must “reasonably identify a public record and not general data, information or statistics.” Chicago Tribune Co. v. Department of Financial and Professional Regulation, 2014 IL App (4th) 130427, ¶ 33. FOIA does not create an independent duty upon a public body to maintain or prepare a public record that it is not already legally required to keep, and “[t]he nonexistence of requested documents is a cognizable affirmative defense” to a FOIA claim. Barner v. Fairburn, 2019 IL App (3d) 180742, ¶ 12. ¶ 28 “When a public body receives a proper request for information, it must comply with that request unless one of the narrow statutory exemptions applies.” Lieber v. Board of Trustees of Southern Illinois University, 176 Ill. 2d 401, 408 (1997). “In the event a public body asserts that a record is exempt from such disclosure, the public body bears the burden of proving by clear and convincing evidence that the record is exempt.” Mancini Law Group, P.C. v. Schaumburg Police Department, 2021 IL 126675 ¶ 16. “Where the public body claims that a requested document falls within one of these specifically enumerated categories and is able to prove that claim, no further inquiry by the court is necessary.” Lieber, 176 Ill. 2d at 408. ¶ 29 FOIA provides a plethora of exemptions to a public body’s duty to make certain records available for copying. See generally 5 ILCS 140/7(1)(a)-(mm) (West 2020). As relevant to the issues presented in this appeal, FOIA specifically exempts from disclosure “materials prepared or compiled with respect to internal audits of public bodies” (5 ILCS 140/7(1)(m) (West 2020)) and “records requested by persons committed to the Department of Corrections * if those materials are available in the library of the correctional * facility *where the inmate is confined” (5 ILCS 140/7(1)(e-5) (West 2020)). Additionally, section 3(g) of FOIA -7- provides, “Requests calling for all records falling within a category shall be complied with unless compliance with the request would be unduly burdensome for the complying public body and there is no way to narrow the request and the burden on the public body outweighs the public interest in the information.” (Emphasis added.) 5 ILCS/140/3(g) (West 2020). ¶ 30 B. This Case ¶ 31 Here, Warren claims the Department failed to show each of the six denials of his FOIA requests were based on a valid exemption and therefore violated its duty to make the requested records available for copying under FOIA. We address each of Warren’s claims in relation to the Department’s asserted rationale for denial. ¶ 32 1. Records the Department Does Not Possess ¶ 33 Warren argues the Department improperly denied his requests for “protocol[s] and policies regarding video camera footage” (count IV) and temperature monitoring records (count VI). The Department argues those materials were exempt from disclosure because the Department did not possess or maintain such records. We agree with the Department. ¶ 34 a. Surveillance Footage Protocols ¶ 35 In its motion to dismiss, the Department argued it did not possess records responsive to the request for the policies regarding video camera footage. Attached to the motion was an affidavit from the Department’s assistant legal counsel, who averred he contacted the Department’s operations unit, which maintains the surveillance systems in Department facilities, to inquire about the maintenance of surveillance footage. The assistant legal counsel averred the operations unit informed him there was no Department procedure for the maintenance of surveillance footage and the Department did not possess any records responsive to Warren’s request. -8- ¶ 36 Warren nonetheless asserts the Department does, in fact, possess responsive records and failed to conduct an adequate search, as evidenced by (1) “20-IL-AD 5.1-104” of the Illinois Administrative Code and (2) a document from the Department listing “Staff Operating Procedures/Policies” as a category of records the Department shall immediately disclose upon request under section 3.5(a) of FOIA (see 5 ILCS 140/3.5(a) (West 2020)). Although there is no such provision in the Administrative Code, the Department suggests Warren may be referring to administrative directive No. 05.01.104 (eff. Apr. 1, 2021), which relates to the Department’s intent to “maintain systems for strict accountability of all cameras, digital media and related equipment to ensure that such materials are only issued to or accessed by authorized personnel, and that all cameras and related equipment are properly and securely stored when not in use.” ¶ 37 While we agree with Warren the administrative directive may have been responsive to his FOIA request, we nonetheless find the Department did not violate FOIA because it has demonstrated the administrative directive was exempt from disclosure under section 7(1)(e-5). 5 ILCS 140/7(1)(e-5) (West 2020) (exempting “records requested by persons committed to the Department of Corrections * if those materials are available in the library of the correctional * facility * where the inmate is confined”). To the extent Warren refers to the administrative directive, the Department submits it is available to Warren in the Pinckneyville library. ¶ 38 Furthermore, the second document Warren relies upon does not refer to policies or protocols for video surveillance footage at all; the fact the Department has a general duty to disclose “Staff Operating Procedures/Policies” under section 3.5(a) of FOIA does not prove the existence of protocols relating to video surveillance. Accordingly, the circuit court did not err in dismissing this claim. -9- ¶ 39 b. Temperature Monitoring Records ¶ 40 The Department’s assistant legal counsel also averred, in his affidavit attached to the motion to dismiss, he had consulted with Lawrence’s chief engineer and found no records responsive to Warren’s request for “temperature monitoring records” for various Lawrence housing units over several periods in 2019. Warren argues the Department’s assertion is inaccurate because the Department possesses “thermometers that monitor temperatures.” ¶ 41 Here, the Department provided clear and convincing evidence it did not possess the records sought by Warren. The fact the Department’s facilities contain thermometers does not contradict the assistant legal counsel’s affidavit stating the Department does not aggregate data regarding temperature readings from those thermometers. As stated above, FOIA does not create an independent duty upon a public body to maintain or prepare a public record that it is not already legally required to keep, and “[t]he nonexistence of requested documents is a cognizable affirmative defense.” Barner v. Fairburn, 2019 IL App (3d) 180742, ¶ 12. Because the Department demonstrated it does not possess these records, the circuit court properly dismissed this claim. ¶ 42 2. Request Not Identifying a Public Record ¶ 43 Next, Warren argues the Department improperly denied his requests for (1) information on the Department’s Effexor ban and the drug’s effects (count II), (2) “copies of all denial[s] of FOI[A] requests for 2020” (count II), and (3) staff protocols regarding the investigation of grievances (count IV). The Department asserts Warren’s requests did not reasonably identify a public record and therefore were properly denied. We agree with the Department. - 10 - ¶ 44 As stated above, a FOIA request must “reasonably identify a public record and not general data, information or statistics.” Chicago Tribune Co., 2014 IL App (4th) 130427, ¶ 33. Furthermore, FOIA “does not compel the agency to provide answers to questions posed by the inquirer.” Kenyon v. Garrels, 184 Ill. App. 3d 28, 32 (1989). ¶ 45 Here, the Department properly denied Warren’s request for information regarding the Department’s ban of the drug Effexor because he did not reasonably identify any public record. In his request, Warren asked for “information of why psyc[h]otropic med[ication] Effexor was banned from [the Department] and its short term and long term side effects.” This was clearly a request for data or general information not contemplated by FOIA, the focus of which is “access to records or documents.” Warren counters that he did, in fact, identify a public record, because in order for the Department to “notify all mental health professionals * that they are no longer able to provide/pr[e]scribe ‘Effexor’ to mental health patients,” it would have sent “a memorandum email” containing “the order, and reasoning for it.” Even assuming such a memorandum email exists, Warren’s original request referenced no such record or document. Warren cannot now complain on appeal that the Department failed to produce a record he never requested. Because the Department is not required to respond to general data requests, the circuit court properly dismissed this claim. ¶ 46 Similarly, the Department properly denied Warren’s request for rules and staff protocols governing grievances. In his request, Warren sought “what rules and staff protocol[s] of grievances and grievance officer routine[s] regarding investigation of their complaint of grievances.” Once again, Warren’s request sought general information regarding grievances without identifying any public record or document. Warren counters “a reasonable person could have identified what records were being sought” and the Department therefore acted in bad faith - 11 - for not producing them. We disagree. Warren’s request clearly contemplated a compilation of information, a task which FOIA does not impose on public bodies, and the Department’s refusal to prepare a compilation it is not required to make does not constitute an act of bad faith. See Kenyon, 184 Ill App. 3d at 32. Accordingly, the circuit court properly dismissed this claim. ¶ 47 Finally, the Department also properly denied Warren’s request for “copies of all denial of FOIA requests for 2020.” Warren’s request did not specify whether he sought information regarding every FOIA request denial issued by the Department for all requestors or only those pertaining to his own previous FOIA requests. In response, the Department specifically asked Warren to clarify and narrow the scope of the records he sought pursuant to this request, but Warren did not reply to the Department’s letter. (We note Warren later requested all of the denials of his own FOIA requests from 2020 (count III), which the Department denied on the basis it would be unduly burdensome to produce. We discuss the denial of that request below.) We conclude the circuit court properly dismissed this claim because it did not reasonably identify which FOIA denials Warren sought. ¶ 48 3. Records for Internal Audit ¶ 49 Warren next argues the Department failed to show it was statutorily exempt from disclosing the requested building inspection reports (count V) and health, sanitation, and safety reports (counts III and V). The Department argues it presented clear and convincing evidence it was exempt from disclosing these documents because they were prepared for internal auditing purposes. We agree with the Department. ¶ 50 As stated above, section 7(1)(m) of FOIA specifically exempts from disclosure “materials prepared or compiled with respect to internal audits of public bodies.” 5 ILCS 140/7(1)(m) (West 2020). Although FOIA does not define “internal audit,” Black’s Law - 12 - Dictionary (11th ed. 2019) defines an audit as “[a] formal examination of an * organization’s accounting records, financial situation, or compliance with some other set of standards,” and an internal audit as being “performed by an organization’s personnel to ensure that internal procedures, operations, and accounting practices are in proper order.” ¶ 51 Here, the Department provided clear and convincing evidence the reports requested by Warren were exempt. In its motion to dismiss, the Department asserted the requested health, safety, sanitation, and building inspection reports were exempt from disclosure because they were prepared for Department internal auditing purposes. In his affidavit, the Department’s assistant legal counsel averred the Department “does not have any reports entitled ‘building inspection reports.’ ” He further averred that while the Department’s “Building Safety and Sanitation Inspection Reports were likely responsive” to Warren’s requests, “they were materials prepared or compiled for internal audits” and were therefore exempt from disclosure. Specifically, he averred those reports “summarize [the Department’s] methodical reviews of compliance with certain sets of standards established by [the Department]. The reports document whether standards were met in each particular area and what corrective actions were recommended.” This affidavit shows the requested records were prepared for the purpose of determining whether the Department had complied with its own standards of building safety and sanitation, and therefore we find they qualify as records prepared for “internal audits of public bodies.” 5 ILCS 140/7(1)(m) (West 2020). ¶ 52 Warren, relying on Uptown People’s Law Center v. Department of Corrections, 2014 IL App (1st) 130161, contends the exemption is inapplicable because the Department disclosed a similar category of records in that case. Warren’s reliance is misplaced. In Uptown, the plaintiff nonprofit organization filed a complaint against the Department, asserting the - 13 - Department failed to respond to its requests, on three separate dates, for “records relating to prison conditions, facility maintenance and sanitation reports.” Uptown, 2014 IL App (1st) 130161, ¶ 3. Following the filing of the organization’s complaint, the Department tendered all of the requested materials. We acknowledge the requested records in Uptown, as described by the court in that case, appear to be similar in nature to those requested by Warren here. However, the Uptown court at no point opined on whether the records were exempt from disclosure under section 7(1)(m) because the Department never asserted such an exemption. The mere fact it voluntarily disclosed records of a similar nature in that case has no bearing on whether the exemption is applicable here. The court did not state the exact wording of the request in that case, and because the documents were voluntarily disclosed, the Department presumably concluded it possessed responsive, nonexempt records to the organization’s request. Accordingly, we disagree with Warren’s assertion the exemption did not apply here and find the court’s dismissal of these claims was proper. ¶ 53 4. Records Available at Pinckneyville ¶ 54 The Department asserts it was statutorily exempt from disclosing the administrative directive on the storage of inmate property (count I) because it was available to Warren in the Pinckneyville library, and Warren nonetheless forfeited any claim to the contrary by failing to raise it in the circuit court or in this court on appeal. The Department correctly notes Warren does not raise this issue in his opening brief on appeal and appears to have abandoned it. “Issues not raised in either the trial court or the appellate court are forfeited.” 1010 Lake Shore Ass’n v. Deutsche Bank National Trust Co., 2015 IL 118372, ¶ 14. Warren does not dispute the Department’s assertion of forfeiture, and we therefore decline to address this issue. ¶ 55 5. Unduly Burdensome Requests - 14 - ¶ 56 Lastly, Warren argues the Department improperly denied his requests for copies of the denials of his previous FOIA requests (counts I, II, and III). The Department asserts these requests were unduly burdensome to produce because it had already sent him these documents. We agree with the Department. ¶ 57 As stated above, “[r]equests calling for all records falling within a category shall be complied with unless compliance with the request would be unduly burdensome for the complying public body and there is no way to narrow the request and the burden on the public body outweighs the public interest in the information.” (Emphasis added.) 5 ILCS 140/3(g) (West 2020). This section of FOIA specifically provides that “[r]epeated requests from the same person for the same records that are unchanged or identical to records previously provided or properly denied under this Act shall be deemed unduly burdensome under this provision.” 5 ILCS 140/3(g) (West 2020). ¶ 58 Here, the Department properly declined to resend its denials of Warren’s previous FOIA requests because, pursuant to section 3(g) of FOIA, they were “unchanged or identical to records previously provided” under FOIA. The Department asserts it provided Warren the denials of his previous FOIA requests in response to the underlying requests. Warren argues the “repeated requests” exemption should not apply because although the denial letters were provided to him as a response to a request for records, he did not make repeated requests for the denial letters. Essentially, Warren argues the “repeated requests” exemption applies only when the individual has previously requested the same record. Our reading of the statute does not support such an application. Although the statutory language refers to “repeated” requests from the same person, we agree with the Department that this phrase “simply reflects that, generally, records that have been previously provided (and thus need not be re-disclosed) will have been - 15 - obtained via a FOIA request for those records, rather than, as here, sent in the course of FOIA proceedings.” Even assuming arguendo Warren’s reading of the statute is correct, the Department nonetheless properly denied Warren’s requests under section 3(g)’s general exemption for unduly burdensome requests because the Department did, in fact, already provide the documents to Warren—a fact Warren does not dispute. Accordingly, we conclude the circuit court properly denied Warren’s claim regarding the denial of his requests for his previous FOIA denial letters. ¶ 59 Because Warren has failed to show the Department violated FOIA when it denied his aforementioned requests for records, the circuit court properly allowed the Department’s motion to dismiss, and we affirm. ¶ 60 III. CONCLUSION ¶ 61 For the reasons stated, consistent with Illinois Supreme Court Rule 23(b) (eff. Jan. 1, 2021) we affirm the trial court’s judgment. ¶ 62 Affirmed. - 16 -	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483644/	2022 IL App (1st) 211651-U FIRST DISTRICT, FIRST DIVISION November 14, 2022 No. 1-21-1651 NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). _____________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT _____________________________________________________________________________ GAYLE KALMIN, individually and as trustee of the ) Gayle’s Children’s Trust, and, derivatively, as ) partner of AJW Partnership, an Illinois general ) partnership, and AC & Associates Partnership, an ) Illinois general partnership, ) ) Plaintiff-Appellant, ) Appeal from the v. ) Circuit Court of ) Cook County, Illinois. ALVIN J. WEINBERG, individually, as trustee of ) the Alvin J. Weinberg Revocable Trust and as partner ) No. 21 L 4778 of AJW Partnership, SHARON OBERLANDER, and ) MERRILL LYNCH, PIERCE, FENNER & SMITH ) Honorable INCORPORATED, a Delaware corporation, ) Michael F. Otto, ) Judge Presiding. Defendants ) ) (Sharon Oberlander and Merrill Lynch, Pierce, ) Fenner & Smith Incorporated, a Delaware ) corporation, ) ) Defendants-Appellees). ) _____________________________________________________________________________ JUSTICE COGHLAN delivered the judgment of the court. Justices Pucinski and Hyman concurred in the judgment. ORDER No. 1-21-1651 ¶1 Held: Arbitration clause in contracts was enforceable where (1) plaintiff failed to state a claim that her signature was procured through fraudulent concealment and (2) contracts were properly authenticated. ¶2 Plaintiff Gayle Kalmin brought an action for fraudulent concealment, fraud, and breach of fiduciary duty against her father Alvin Weinberg, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), and Sharon Oberlander, a managing director at Merrill Lynch. When Kalmin’s mother, Cecile Weinberg, died in 2015, Kalmin “acquired authority over millions of dollars in assets being held in partnership accounts at Merrill Lynch.” Kalmin alleged that defendants concealed her authority from her and induced her to sign “a series of virtually blank signature pages” attached to forms giving Alvin “complete and unfettered control over all the substantial assets in the partnership accounts, to [Kalmin’s] exclusion.” ¶3 Merrill Lynch and Oberlander (henceforth, the ML defendants) moved to compel arbitration1, citing an arbitration provision incorporated into the Merrill Lynch forms bearing Kalmin’s signature. The trial court granted their motion, and Kalmin filed an interlocutory appeal under Supreme Court Rule 307(a)(1) (eff. Nov. 1, 2017). See Clanton v. Oakbrook Healthcare Center, Ltd., 2022 IL App (1st) 210984, ¶ 38 (“An order granting or denying a motion to compel arbitration is injunctive in nature and is appealable under Rule 307(a)(1).” (internal quotation marks omitted)). For the reasons that follow, we affirm. ¶4 BACKGROUND ¶5 Cecile and Alvin created two Illinois partnerships—AJW Partnership (“AJW”) in 1979 and AC & Associates (“AC”) in 1981—for which they opened Merrill Lynch brokerage accounts holding over $21,000,000 in combined assets. Oberlander was the financial advisor for both partnership accounts. 1 Alvin did not join in the motion to compel arbitration and is not a party to this appeal. -2- No. 1-21-1651 ¶6 In 2006, Cecile became a co-trustee of twelve trusts (the Weinberg Family Trusts) that each held an ownership interest in either AJW or AC, and Kalmin was named as a successor co- trustee in the event of Cecile’s death. When Cecile died in 2015, the successor provision triggered automatically. Kalmin was allegedly unaware of her trusteeship and the fact that it made her a partner in AJW and AC. Alvin was aware but “[a]t no time prior to September 28, 2018 did Alvin notify, inform, or disclose to Kalmin her co-trusteeship of the Weinberg Family Trusts or the consequences thereof.” In March or April 2016, Kalmin told Oberlander that Alvin refused to increase the quarterly trust distributions and asked Oberlander to “talk to Alvin about it.” Based on this conversation, “it was obvious that Kalmin did not know that she and her co- trustees, not Alvin, were empowered to make decisions about trust distributions.” ¶7 On May 11, 2016, Alvin, who was administering Cecile’s estate, requested Kalmin’s signature on five pages. Each page was titled “WCMA Account Application” with a bolded header “III. ENTITY AUTHORIZATION FORM (continued)” and a footer “Page 8 \| Authorization Form for Partnerships.” There was a space labeled “General Partner Name (Individual or Entity),” in which one of the Weinberg Family Trusts is printed, and a space labeled “Print Name and Title (If General Partner is an Entity),” in which “Gayle Kalmin, TTEE” is printed. Each page stated that “[a]ll General Partners must sign.” Since Kalmin “trusted her father” and “had no reason to believe [he] would deceive her,” she signed the pages without requesting or reviewing the remaining pages of the forms. ¶8 On May 16, 2016, Alvin faxed the signed pages to Oberlander, who attached them to the remaining pages of the forms (henceforth, the WCMA forms 2) designating Alvin as an authorized representative of the partnership accounts, with exclusive powers as “Agreement 2 WCMA stands for Working Capital Management Account. -3- No. 1-21-1651 Signer,” “Check Signer,” and authority over “Fund/Security Distribution” and “Trade.” In effect, the forms “give Alvin complete, exclusive, and unfettered control over the Partnership Accounts, to [Kalmin’s] exclusion.” Kalmin alleged that Alvin “conceal[ed] from [Kalmin] the nature, meaning, and purpose” of the forms, as well as the fact that “without [Kalmin’s] signature, Alvin had no authority whatsoever over the Partnership Accounts.” ¶9 Kalmin first realized she was a trustee of the Weinberg Family Trusts on September 28, 2018, when Alvin requested her signature on a form entitled “Designation of Successor Trustees” that sought to replace Kalmin and her co-trustees with Alvin’s friend Mark Slutsky. Kalmin refused to sign and began “to gather and review documents and information relating to the Weinberg Family Trusts and the AC and AJW Partnerships.” On July 25, 2019, one of Oberlander’s team members faxed Kalmin the completed WCMA forms bearing her signature, at which time Kalmin “realize[d] what had transpired in May 2016.” ¶ 10 On May 21, 2021, Kalmin filed her complaint pro se, bringing claims for fraudulent concealment, fraud, and breach of fiduciary duty against Alvin and the ML defendants. 3 In count I (fraudulent concealment), Kalmin alleged that the ML defendants concealed the fact that she was a trustee of the Weinberg Family Trusts and a majority partner in AJW and AC, with the intent “to induce [Kalmin] into falsely believing that she was not a co-trustee of the Weinberg Family trusts, that she had no authority over any of the Partnership Assets, and that Alvin had such authority.” Had this information not been concealed from her, Kalmin would not have unknowingly relinquished her authority over the partnership accounts to Alvin or anyone else. ¶ 11 In count III (fraud), Kalmin alleged that the ML defendants’ failure to inform her of her trusteeship and her authority over the partnership accounts “constitutes the making of a false 3 Counts II, IV, and VI are against Alvin and are not relevant to this appeal. -4- No. 1-21-1651 statement of material fact,” and she reasonably relied on the ML defendants’ silence “as a representation that [she] was not a co-trustee of the Weinberg Family Trusts and lacked any authority whatsoever over the Partnership Assets.” ¶ 12 In count V (breach of fiduciary duty), Kalmin alleged that the ML defendants owed a fiduciary duty to AJW, AC, and their respective partners, including Kalmin. As a factual basis for her claim of fiduciary duty, Kalmin alleged that: • For “10-15 years,” Oberlander “served as the sole financial manager to Alvin and Cecile, both individually, and in their respective capacities as partners of AJW and AC.” • Oberlander “cultivated a years-long close and personal relationship with Alvin and Cecile” and attended various social events with them, including New Year’s Day parties, events at the Chicago Opera House, and Kalmin’s wedding. • “At some time prior to August 20, 2015, [Oberlander] also became the personal financial advisor for [Kalmin] and her husband, Fred Kalmin.” ¶ 13 Kalmin alleged that the ML defendants breached their fiduciary duty to her by not disclosing her trusteeship and failing to contact her about the management of the AJW and AC accounts. Kalmin further alleged that the ML defendants: “l. Allowed ALVIN, a non-trustee, to misappropriate the Partnership Assets, which had been entrusted to them, as fiduciaries, although they had actual knowledge of sufficient facts to show the ‘signed’ WCMA Forms were obtained through fraudulent means and not legitimate; m. Unreasonably rel[ied] upon the ‘signed’ Signature Pages or WCMA Forms that ALVIN provided to them on or about May 16, 2016 *. * -5- No. 1-21-1651 p. Continue[] to rely upon the legitimacy of the WCMA Forms in bad faith.” ¶ 14 Kalmin sought compensatory damages, costs of bringing the action, and a declaration that “the ‘signed’ WCMA forms [are] void ab initio and of no force and effect.” ¶ 15 The ML defendants moved to compel arbitration based on the WCMA forms signed by Kalmin on May 16, 2016, which stated on page 7 that “the partnership has received a copy of the WCMA Financial Service Account Agreement and Program Description Booklet (the ‘Agreement’) and agrees to the terms and conditions contained therein; * [and] that, in accordance with section 17, page 18, of the Agreement, the partnership is agreeing in advance to arbitrate any controversies that may arise with Merrill Lynch.” ¶ 16 The WCMA Financial Service Account Agreement and Program Description Booklet (“Account Agreement”) incorporated by reference into the WCMA forms provides: “This Agreement contains a predispute arbitration clause. By signing an arbitration agreement, the parties agree as follows: • All parties to this Agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed. * You agree that all controversies that may arise between us shall be determined by arbitration.” ¶ 17 The ML defendants argued that New York law governed the question of whether the parties agreed to arbitrate, per a choice-of-law provision in the WCMA forms, and, under New York law, Kalmin was bound by the arbitration agreement notwithstanding her alleged failure to -6- No. 1-21-1651 read the documents that she executed. They also argued that “[t]he Partnership Accounts have always been governed by a mandatory arbitration provision,” referencing the WCMA Account Agreement for the AJW partnership account and the account opening documents for the AC partnership account. ¶ 18 Kalmin opposed the motion to compel arbitration, arguing that she did not enter into an arbitration agreement because she was only provided with signature pages that did not mention arbitration or indicate that she was entering into a contract with Merrill Lynch. In the alternative, she argued that enforcing the arbitration agreement would be procedurally unconscionable since she was not aware of her trusteeship and “was deceived by her father into signing signature pages that did not contain an arbitration clause [or] Merrill’s name.” ¶ 19 On December 9, 2021, the trial court granted the motion to compel. The court found that although Kalmin was provided only the signature pages of the WCMA forms, those pages “clearly indicate[]” that they are the eighth page of a document, and “[i]f the plaintiff did not wish to enter into a contract or wished to review the contract before affixing her signature to it, thereby evidencing her assent to its term[s], she could have easily withheld that signature until she were provided a contract.” The court additionally found it significant that the motion to compel was brought solely by the ML defendants and not Alvin, stating: “Whether the contract might be enforceable or not as between plaintiff and [Alvin] is a question the court is not called upon to decide today and does not decide. But as to Merrill Lynch, they were entitled to rely on that signature. This was a contract that included a clear and conspicuous arbitration clause. And there is no question in the court’s mind that the contract was entered into.” -7- No. 1-21-1651 ¶ 20 ANALYSIS ¶ 21 A motion to compel arbitration “is essentially a section 2-619(a)(9) motion to dismiss or stay an action in the trial court based on an affirmative matter” (Sturgill v. Santander Consumer USA, Inc., 2016 IL App (5th) 140380, ¶ 21; see 735 ILCS 5/2-619(a)(9) (West 2018)), which admits all well-pleaded allegations in the complaint as true. Doe v. University of Chicago Medical Center, 2015 IL App (1st) 133735, ¶ 4. Since the court granted the motion without an evidentiary hearing, our review is de novo. Hollingshead v. A.G. Edwards & Sons, Inc., 396 Ill. App. 3d 1095, 1099 (2009). ¶ 22 Under the Federal Arbitration Act (“FAA”), a “written provision in * a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction * shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2; see Board of Managers of Courtyards at Woodlands Condominium Ass’n v. IKO Chicago, Inc., 183 Ill. 2d 66, 74 (1998) (“once a contract containing a valid arbitration clause has been executed, the parties are irrevocably committed to arbitrate all disputes arising under the agreement”). However, “there is no arbitration without a valid contract to arbitrate.” (Internal quotation marks omitted.) Tortoriello v. Gerald Nissan of North Aurora, Inc., 379 Ill. App. 3d 214, 226 (2008). “The party seeking to compel arbitration has the burden to establish that the parties have a valid agreement to arbitrate and that the controversy falls within the scope of the arbitration provision.” Sturgill, 2016 IL App (5th) 140380, ¶ 16. ¶ 23 Choice of Law ¶ 24 Initially, the ML defendants argue that New York law is controlling due to a choice-of- law provision in the WCMA forms. “A contract’s choice-of-law provision may not apply if the -8- No. 1-21-1651 contract’s legality is fairly in doubt, for example, if the contract is unconscionable, or if there is some other issue as to the validity of the very formation of the contract.” Life Plans, Inc. v. Security Life of Denver Insurance Co., 800 F.3d 343, 357 (7th Cir. 2015). Since the validity of the WCMA forms is a central disputed issue, applying the choice-of-law provision “would presume the applicability of a provision before its adoption by the parties has been established.” Schnabel v. Trilegiant Corp., 697 F.3d 110, 119 (2d Cir. 2012) (citing B–S Steel of Kansas, Inc. v. Texas Industries, Inc., 439 F.3d 653, 661 n. 9 (10th Cir. 2006) (referring to “the logical flaw inherent in applying a contractual choice of law provision before determining whether the underlying contract is valid”)). In the absence of the choice-of-law provision, Illinois law provides that “the validity, construction and obligations of a contract are governed by the law of the place where it is made.” Progressive Insurance Co. v. Williams, 379 Ill. App. 3d 541, 546 (2008). Thus, we apply Illinois law in reviewing the trial court’s decision to grant the motion to compel arbitration. ¶ 25 Whether a Valid Arbitration Agreement Was Formed ¶ 26 Kalmin argues that the ML defendants have not met their burden of showing the parties have a valid agreement to arbitrate because there was no mutual assent regarding the terms of any contract. Alternately, she argues the WCMA forms are void because defendants procured her signature through fraud. ¶ 27 For a contract to be enforceable, there must be mutual assent as to its terms. Arbogast v. Chicago Cubs Baseball Club, LLC, 2021 IL App (1st) 210526, ¶ 20. “[H]owever, it is not necessary that the parties share the same subjective understanding as to the terms of the contract. [Citation.] It suffices that the conduct of the contracting parties indicates an agreement to the terms of the alleged contract.” (Internal quotation marks omitted.) Midland Hotel Corp. v. -9- No. 1-21-1651 Reuben H. Donnelley Corp., 118 Ill. 2d 306, 313-14 (1987). Such agreement is most commonly shown by signing a contract. Arbogast, 2021 IL App (1st) 210526, ¶ 21. It is a “maxim of contract law that a party to an agreement is charged with knowledge of and assent to the agreement signed.” Melena v. Anheuser-Busch, Inc., 219 Ill. 2d 135, 150 (2006). As this court has stated: “[T]he contract cannot be avoided by proof that one of the parties, if he was sound in mind and able to read, did not know the terms of the agreement. One must observe what he has reasonable opportunity for knowing *. A person is presumed to know those things which reasonable diligence on his part would bring to his attention.” (Internal quotation marks omitted.) Bunge Corp. v. Williams, 45 Ill. App. 3d 359, 364-65 (1977) (arbitration clause printed on back of contract was enforceable despite defendants’ allegation that they never read the clause, since the front contained a bolded notice that additional terms were on the back). ¶ 28 Here, Kalmin acknowledges signing the signature pages provided by her father, but argues that her signature is insufficient to show assent because she was not given the remaining pages of the forms and was not aware she was executing a contract with Merrill Lynch. She claims the signature pages were “not obviously contractual in nature.” We disagree. Each page was titled “WCMA Account Application” and bore the header “III. ENTITY AUTHORIZATION FORM (continued)” and the footer “Page 8 \| Authorization Form for Partnerships.” It was apparent on the face of the pages Kalmin signed that she was authorizing something related to partnerships and/or other entities and that there were seven other pages of terms to which she was lending her assent. Under these circumstances, Kalmin’s failure to read the remaining pages does not negate her assent to those terms. Melena, 219 Ill. 2d at 150; see -10- No. 1-21-1651 Navistar Financial Corp. v. Curry Ice & Coal, Inc., 2016 IL App (4th) 150419, ¶ 39-45 (enforcing contract despite defendant’s claim that signatory was only provided with a signature page). ¶ 29 Kalmin next argues that the WCMA forms are void because the ML defendants procured her signature through fraudulent inducement. This argument is forfeited since Kalmin failed to raise it in response to the ML defendants’ motion to compel. See Kane v. Option Care Enterprises, 2021 IL App (1st) 200666, ¶ 33 (“Arguments that have not been raised in the trial court are forfeited and cannot be raised for the first time on appeal”). ¶ 30 Even if we overlook Kalmin’s forfeiture (see People v. $8,450 U.S. Currency, 276 Ill. App. 3d 952, 954 (1995) (forfeiture rule is an admonition to the parties, not a restriction on our jurisdiction)), her argument fares no better on its merits. “[I]f [a party’s] signature is secured by some fraudulent trick or device as to the context of the contract, which prevents him from reading the agreement, he may by proper action avoid the contract.” (Internal quotation marks omitted.) Bunge, 45 Ill. App. 3d at 364. Such fraudulent inducement is a form of common-law fraud, the elements of which are “(1) a false statement of material fact; (2) knowledge or belief by the defendant that the statement was false; (3) an intention to induce the plaintiff to act; (4) reasonable reliance upon the truth of the statement by the plaintiff; and (5) damage to the plaintiff resulting from this reliance.” Avon Hardware Co. v. Ace Hardware Corp., 2013 IL App (1st) 130750, ¶ 15. ¶ 31 Kalmin does not allege any false statements of material fact made by the ML defendants. Instead, she argues that they were her fiduciaries and had an affirmative duty to inform her of her trusteeship and the consequences of signing the WCMA forms. A fiduciary relationship exists where “one party reposes special trust and confidence in another[,] who accepts that trust and -11- No. 1-21-1651 confidence and thereby gains superiority and influence over the subservient party.” (Internal quotation marks omitted.) Tummelson v. White, 2015 IL App (4th) 150151, ¶ 21. In such a relationship, the dominant party has a duty to act for the benefit of the subservient party on matters within the scope of the relationship (In re Estate of Baumgarten, 2012 IL App (1st) 112155, ¶ 17) and must disclose all material facts to the subservient party (Guvenoz v. Target Corp., 2015 IL App (1st) 133940, ¶ 107). Concealment of such facts constitutes fraud “if done with the intention to deceive under circumstances creating an opportunity and duty to speak.” (Internal quotation marks omitted.) Guvenoz, 2015 IL App (1st) 133940, ¶ 107. ¶ 32 Here, Kalmin did not allege sufficient facts to state a claim that the ML defendants had a fiduciary duty to inform her of her trusteeship or the consequences of signing the WCMA forms. Since an agent’s fiduciary duty is limited to actions taken within the scope of her agency, “[t]he duty of care owed by a broker carrying a nondiscretionary account for a customer is an exceedingly narrow one, consisting at most of a duty to properly carry out transactions ordered by the customer.” Index Futures Group, Inc. v. Ross, 199 Ill. App. 3d 468, 475-76 (1990); see also First American Discount Corp. v. Jacobs, 324 Ill. App. 3d 997, 1012 (2001) (same). As a factual basis for her claim of fiduciary duty, Kalmin alleges that Oberlander managed funds for her, her husband Fred, Alvin, and Cecile, and attended social events with them. Taking these allegations as true (see Doe, 2015 IL App (1st) 133735, ¶ 4), they do not support the imposition of a fiduciary duty on the ML defendants. See Khoury v. Niew, 2021 IL App (2d) 200388, ¶ 46 (“Whether a legal duty exists is a question of law, to be determined by the court”). ¶ 33 Kalmin argues the present case is analogous to Janowiak v. Tiesi, 402 Ill. App. 3d 997 (2010), in which we found a material issue of fact as to whether a trustee procured a release from a beneficiary through fraudulent inducement. Id. at 1017. Kalmin’s reliance on Janowiak is -12- No. 1-21-1651 misplaced because that case involved a fiduciary relationship between trustee and beneficiary (id. at 1006), which is not at issue here. ¶ 34 Accordingly, the ML defendants have met their burden of showing a valid arbitration agreement exists between them and Kalmin. In reaching this conclusion, we note that, as the trial court stated, “Whether the contract might be enforceable or not as between plaintiff and [Alvin] is a question the court is not called upon to decide today and does not decide. But as to Merrill Lynch, they were entitled to rely on that signature.” ¶ 35 Admissibility of the WCMA Forms ¶ 36 Kalmin argues that the trial court erred in considering the WCMA forms submitted by the ML defendants in support of their motion to compel arbitration because the forms were not properly authenticated. ¶ 37 The ML defendants filed their initial motion to compel on July 19, 2021. In support, they attached copies of the WCMA forms executed by Kalmin, as well as the Account Agreement Booklet incorporated by reference into the WCMA forms. They also attached the affidavit of Shirley Williams, a market supervision manager for Merrill Lynch. Williams stated that she is familiar with WCMA forms and, in particular, with the WCMA forms executed by Kalmin. She stated that the attached WCMA forms were “true and accurate copies,” and the attached Account Agreement Booklet is given to account holders “[i]n the ordinary and regular course of the business” of Merrill Lynch. Said documents “have been duly maintained in the files of [Merrill Lynch] in the ordinary and regular course of its business.” ¶ 38 On October 22, 2021, the ML defendants moved for leave to file a corrected motion to compel arbitration, stating that in attaching the copies of the WCMA forms to its initial motion, “the attorneys preparing the exhibits * mistakenly used the exhibits from Plaintiff’s complaint -13- No. 1-21-1651 rather than pulling the copies from the documents that had been provided to [counsel’s] office by [Merrill Lynch].” Due to this “honest mistake,” the ML defendants sought leave to file amended exhibits that were “substantively identical,” as well as a supplemental affidavit by Williams stating that the amended exhibits were true and accurate. The trial court granted the ML defendants’ motion. ¶ 39 In Williams’ deposition, she testified that Merrill Lynch client documents are stored in the Client Documents Online System (CDOL) by investor account number. Someone from Merrill Lynch’s legal department retrieved and compiled the documents attached to her second affidavit. Williams then reviewed the documents and compared them page-by-page to the documents in CDOL to verify their completeness and accuracy. She admitted not performing the same page-by-page review for the documents attached to her first affidavit. She also admitted she did not witness Kalmin signing the forms and did not have any knowledge as to whether Kalmin was provided the forms in their entirety. ¶ 40 Rule 191(a) provides that affidavits submitted in support of a section 2-619 motion to dismiss “shall have attached thereto sworn or certified copies of all documents upon which the affiant relies; shall not consist of conclusions but of facts admissible in evidence; and shall affirmatively show that the affiant, if sworn as a witness, can testify competently thereto.” Ill. S. Ct. R. 191(a) (eff. Jan. 4, 2013). For a document to be admissible, the proponent must present evidence “to demonstrate that the document is what its proponent claims it to be.” Anderson v. Human Rights Comm’n, 314 Ill. App. 3d 35, 42 (2000). This is typically done “through the testimony of a witness who has sufficient personal knowledge to satisfy the trial court that a particular item is, in fact, what its proponent claims it to be.” (Internal quotation marks omitted.) CCP Ltd. Partnership v. First Source Financial, Inc., 368 Ill. App. 3d 476, 484 (2006). -14- No. 1-21-1651 ¶ 41 Here, the ML defendants properly laid a foundation for the introduction of the WCMA forms through Williams’ supplemental affidavit and deposition testimony. Although Williams did not compile the amended exhibits herself, she reviewed them and verified their completeness and accuracy by comparing them page-by-page with Merrill Lynch’s digital client records. Thus, she has sufficient knowledge to aver that they are what they claim to be, i.e., the WCMA forms that Kalmin signed on May 16, 2016. ¶ 42 Kalmin argues that Williams’ testimony is insufficient to authenticate the forms because she “has no personal or independent knowledge as to how [Kalmin’s] signature was obtained.” However, Kalmin acknowledges signing the signature pages in her complaint and gives a detailed account as to how her signature was obtained, which we take as true in reviewing the grant of a section 2-619 motion (Doe, 2015 IL App (1st) 133735, ¶ 4). Indeed, she admits in her brief that “there is no dispute as to the authenticity of the signature pages themselves.” Kalmin’s admissions, combined with Williams’ testimony as to how she verified the integrity of the WCMA forms within the CDOL system, are sufficient to authenticate the WCMA forms. ¶ 43 CONCLUSION ¶ 44 For the foregoing reasons, we affirm the trial court’s order granting the ML defendants’ motion to compel arbitration. ¶ 45 Affirmed. -15-	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483627/	Filed 11/14/22 P. v. Foster CA5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT THE PEOPLE, F084076 Plaintiff and Respondent, (Super. Ct. No. CF93499134) v. RICKY TYRONE FOSTER, OPINION Defendant and Appellant. THE COURT * APPEAL from an order of the Superior Court of Fresno County. David C. Kalemkarian, Judge. Michelle T. LiVecchi-Raufi, under appointment by the Court of Appeal, for Defendant and Appellant. Office of the State Attorney General, Sacramento, California, for Plaintiff and Respondent. -ooOoo- * Before Levy, Acting P. J., Poochigian, J. and Snauffer, J. Appointed counsel for defendant Ricky Tyrone Foster asked this court to review the record to determine whether there are any arguable issues on appeal. (People v. Wende (1979) 25 Cal.3d 436.) Defendant was advised of his right to file a supplemental brief within 30 days of the date of filing of the opening brief. Defendant responded, contending the superior court erroneously denied his Penal Code section 1170.95 1 petition. We affirm the order denying the petition. BACKGROUND The following facts are taken from our opinion following defendant’s trial in this case, People v. Foster (1995) 34 Cal.App.4th 766 (Foster): “At about 10 or 10:30 p.m. on October 19, 1993, [the victim] arrived at his home …. He was driving his brother’s white Jeep. When he arrived, he pulled into the driveway, then got out of the vehicle to move a trash can. He left the keys in the ignition and the motor running, as he intended to open the garage door and pull the Jeep into the garage. “[The victim] had just moved the trash can when he was accosted by [defendant,] who was wearing a ski mask and had a cocked gun. [Defendant] grabbed [the victim] by the shoulder, then told him to get down and get in the Jeep. [The victim] opened the driver’s door and [defendant] pushed him into the vehicle. [Defendant] had the gun to the back of [the victim’s] head and got into the vehicle with [the victim]. [Defendant] continued to hold onto [the victim] and told [the victim] not to look at him. “Still holding the gun to [the victim’s] head, [defendant] backed the Jeep out of the driveway and drove off with [the victim]. [Defendant] said he would shoot [the victim] if [he] tried to jump. [Defendant] drove to an alley and stopped. He instructed [the victim] to climb over the seat into the back seat. [The victim] did as he was told. In the backseat was a plastic bag which [defendant] placed over [the victim’s] head. When [the victim] 1 All statutory references are to the Penal Code. Section 1170.95 has since been renumbered as section 1172.6, effective June 30, 2022 (Stats. 2022, ch. 58, § 10), but we will refer to it as section 1170.95 in this opinion as that number was in effect at the time of defendant’s petition. 2. pleaded with him, [defendant] told [him] to shut up or [he] was going to die that way. “[The victim] managed to bite a hole in the bag so he could breathe. A few seconds later, some headlights turned into the alley. [The victim] was instructed to get on the floor and face the back passenger side door. [Defendant], who kept the gun right to [the victim’s] head, told [the victim] to stay down, keep the bag over his head, and not try to get out. “[The victim] got down as he was told and they began to move again. [The victim] pulled up on the front of the bag so he could see where they were going. After they turned onto Elm Street, the vehicle was ‘going kind of fast’ and [defendant] again told [the victim] not to try to jump out or he would shoot. At this point, [defendant] still had hold of the back of [the victim’s] shirt and the gun to the back of [his] head. “As they proceeded up Elm Street, [defendant] removed the ski mask. They turned onto California and proceeded toward Martin Luther King Boulevard. As they crossed that street, [the victim] sat up, looked in the rear view mirror, and recognized the man as [defendant]. [The victim] had grown up with [defendant’s] cousin and had known [defendant] for several years. He had last seen [defendant] a week or two before the incident. “[Defendant] also looked in the mirror; when he saw [the victim], he said he was going to take [the victim] out into the country and blow his head off. Fearing for his life, [the victim] grabbed [defendant’s] arm and they wrestled for the gun. [The victim] was reaching between the seats; the top part of his body was in the front seat. At this point, the Jeep was traveling 50 to 55 miles an hour and swerving as the men struggled. “The Jeep crashed into a tree by Edison High School. [The victim] remembered being thrown forward and then backward. He found himself in the backseat; the driver’s seat had fallen all the way back and [defendant] was beside him. They continued to struggle for the gun. [The victim] pulled on the gun to try to get it away from [defendant]; the gun discharged once, the Jeep door opened, and [the victim] fell out. [Defendant] said something which sounded like [the victim’s] name. “[The victim] got up, but could only see the shadow of a person because his head had hit the windshield and his vision was hindered by blood running in his eyes. He could not tell if the person was coming toward him or not, so he pointed the gun and fired at the shadow. He believed the gun went off two or three times, after which it would no longer 3. fire. [The victim] did not yell anything to [defendant] while he was shooting, nor, as far as he could recall, did he chase [defendant].[2] “[The victim] ran to [a] nearby home …. When [a female] answered the door, [the victim] asked her to call the police, then he laid the gun down on the porch. When a police officer arrived, [the victim] reported that he had been carjacked and the vehicle had wrecked. The officer then proceeded to the location of the accident, while [the victim] waited at the house for an ambulance. A friend [of the victim] … came over to help. [The victim] described himself as being excited and almost ‘knocked out in a sense.’ According to [the friend], [the victim] appeared to be in shock and said he had been ‘jacked.’ [The victim] said he took the gun from the person who did it, and he pointed to the apartment at which he had left the gun. [The friend] assisted him in reaching the paramedics, who were at the accident site. “Fresno Police Officer Amey responded to the scene. She found [defendant] in a fenced area at 415 Kern Street, just east of California. He was wearing dark sweat clothes. Officer Ellis also responded. When he contacted [the victim], [he] was covered with blood and appeared to be in some pain. He was very distraught. [He] told Ellis that he had been at his residence earlier in the evening and that he had parked his car in the driveway. When he returned to the vehicle from the front of the house, he was accosted by a Black male who had him enter the vehicle, tried to put a plastic bag over his head, took him westbound on California, and intimated that he was going to take [him] out in the country and kill him. [The victim] said the Black male stated he had a gun, and that a struggle ensued over the weapon, after which they had the accident. [The victim] reported that he was able to fight with [defendant], take the gun from him, and fire shots at [him]. “The police found that the Jeep’s windshield was broken outward on the passenger side, consistent with a person’s face hitting it during a traffic accident. There was some blood in the vehicle, near the windshield and on the right front passenger side. A ski mask was recovered from the front floorboard on the driver’s side. A .45-caliber automatic handgun was located on the porch of the [female’s] residence …. The slide was in a 2 “[A witness] was returning home from a student union meeting at Fresno City College when she saw the Jeep and two men fighting nearby. The one man chased the other person into the street and shot at him three times. While he was shooting, he yelled, ‘Motherf[***]er.’ The police subsequently took [the witness] to an ambulance, where she identified [defendant].” (Foster, supra, 34 Cal.App.4th at p. 770, fn. 3.) 4. locked back position; this occurs after the last round is fired from the magazine. There were spots of blood on the porch and wall, directly above the gun. “[The victim] was eventually transported to the hospital. He had received cuts on his forehead and the left side of his face; a fractured left shoulder; a sore nose; and a black eye. In addition, he had lost two teeth and a third was broken. At the hospital, he was questioned regarding the description of the suspect. He was not asked for, nor did he give, [defendant’s] name at that time. At trial, [the victim] explained that he had heard [defendant’s] voice before the incident; when he saw the person with the ski mask, he thought he knew the voice, but he was not sure. “[Defendant] was treated at the same hospital. He had suffered a bullet wound to the chest and another to the leg. According to … the treating physician, [defendant] had none of the injuries which are commonly seen in victims of motor vehicle accidents. “[The victim] saw [defendant] again at the hospital. [Defendant] was wearing the black pants he had worn during the incident, although his shirt was now off.” (Foster, supra, 34 Cal.App.4th at pp. 769–771.) On October 21, 1993, a complaint was filed against defendant, charging him with attempted murder, kidnapping, and taking a vehicle. On November 29, 1993, the Fresno County District Attorney filed an information that did not include an attempted murder charge. It charged carjacking (§ 215, subd. (a); count 1), assault with a firearm (§ 245, subd. (a)(2); count 2), kidnapping during a carjacking (§ 209.5, subd. (a); count 3), kidnapping (§ 207, subd. (a); count 4), kidnapping with the intent to commit robbery (§ 209, subd. (b); count 5), and robbery (§§ 211, 212.5, subd. (b); count 6). As to each count, the information alleged that defendant personally used a firearm (§ 12022.5, subd. (a)). The information further alleged that defendant had suffered one prior serious felony conviction (§ 667, subd. (a)) and had served three prior prison terms (§ 667.5, subd. (b)). On January 26, 1994, a jury found defendant not guilty of count 4, but found him guilty of all remaining counts and found true the firearm allegation as to each of those counts. 5. On February 24, 1994, the trial court sentenced defendant to 12 years to life in prison: an indeterminate life term with the possibility of parole on count 5, plus a five-year firearm enhancement. In addition, the court imposed a five-year prior serious felony conviction enhancement, and two one-year prior prison term enhancements. On the remaining counts, the court imposed the upper terms and stayed them pursuant to section 654. Defendant appealed, and on May 1, 1995, we affirmed the judgment in Foster, supra, 34 Cal.App.4th 766. On December 22, 2021, defendant filed a petition for resentencing under section 1170.95, alleging he had been charged with attempted murder and therefore was eligible for relief under the statute. On February 8, 2022, the superior court denied the petition because defendant had not been convicted of murder, attempted murder, or manslaughter. On March 7, 2022, defendant filed a notice of appeal. DISCUSSION Defendant contends the superior court should have granted his petition for resentencing pursuant to section 1170.95 and Senate Bill No. 1437 (2017–2018 Reg. Sess.) (Senate Bill 1437). He argues he is eligible for relief under the statute because he was charged with attempted murder. He acknowledges, however, that he was not convicted of attempted murder in his jury trial. Senate Bill 1437, effective January 1, 2019, substantially modified the law governing accomplice liability for murder, significantly narrowing the felony-murder exception to the malice requirement for murder (§§ 188, subd. (a)(3), 189, subd. (e); see People v. Strong (2022) 13 Cal.5th 698, 707–708; People v. Lewis (2021) 11 Cal.5th 952, 957), and eliminating the natural and probable consequences doctrine as a basis for finding a defendant guilty of murder (People v. Gentile (2020) 10 Cal.5th 830, 842–843). Senate Bill 1437 amended “the felony murder rule and the natural and probable 6. consequences doctrine, as it relates to murder, to ensure that murder liability is not imposed on a person who is not the actual killer, did not act with the intent to kill, or was not a major participant in the underlying felony who acted with reckless indifference to human life.” (Stats. 2018, ch. 1015, § 1, italics added.) Senate Bill No. 1437 also added former section 1170.95, which provides a procedure for resentencing, authorizing an individual convicted of felony murder or murder based on the natural and probable consequences doctrine to petition the superior court to vacate the conviction and be resentenced on any remaining counts if he or she could not now be convicted of murder because of the changes Senate Bill 1437 made to the definitions of the crime. (See People v. Strong, supra, 13 Cal.5th at p. 708; People v. Lewis, supra, 11 Cal.5th at p. 957; People v. Gentile, supra, 10 Cal.5th at p. 843.) Then, Senate Bill No. 775 (2021–2022 Reg. Sess.), extended the provisions of section 1170.95 to convictions for attempted murder and manslaughter. This bill modified the law to “expand the authorization to allow a person who was convicted of murder under any theory under which malice is imputed to a person based solely on that person’s participation in a crime … to apply to have their sentence vacated and be resentenced,” and to clarify “that persons who were convicted of attempted murder or manslaughter under a theory of felony murder and the natural probable consequences doctrine are permitted the same relief as those persons convicted of murder under the same theories.” (Stats. 2021, ch. 551, §§ 1–2.) At this time, the statute has not been extended to other convictions. Here, the record clearly establishes that defendant’s complaint charged him with attempted murder, but his information did not, and he was not convicted of attempted murder. His declaration in support of his petition, however, attests that he was charged with attempted murder under the natural and probable consequence doctrine, and that he was convicted as charged. This is not true. He proceeds to claim he was not even present 7. during the crimes and no evidence supported the jury’s verdicts. He then stresses that he was not convicted of murder or attempted murder. Section 1170.95 applies to convictions of murder, felony murder, attempted murder, and manslaughter. It does not apply to convictions of other crimes, such as carjacking, kidnapping, or robbery. Thus, because defendant was not convicted of murder, felony murder, attempted murder, or manslaughter at his trial, he simply does not satisfy the statute and is not eligible for resentencing under it. The superior court correctly denied defendant’s petition for resentencing. This is the only issue properly before us; the remaining issues mentioned by defendant are not cognizable. Having undertaken an examination of the entire record, we find no evidence of ineffective assistance of counsel or any other arguable error that would result in a disposition more favorable to defendant. DISPOSITION The order denying defendant’s section 1170.95 petition is affirmed. 8.	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483629/	Filed 11/14/22 M.E. v. Superior Court CA1/3 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 FIRST APPELLATE DISTRICT DIVISION THREE M.E., A166054 Petitioner, v. (San Mateo County THE SUPERIOR COURT OF SAN Super. Ct. No. 21JD0383) MATEO COUNTY, Respondent, SAN MATEO COUNTY HUMAN SERVICES AGENCY CHILDREN AND FAMILY SERVICES, et al., Real Parties in Interest. M.E. (mother)1 seeks extraordinary writ relief from an August 25, 2022 order terminating reunification services between her and her 14- year-old child (“the child”) and setting a hearing under Welfare and 1 The child’s father is not a party to this writ proceeding. 1 Institutions Code section 366.26 2 to consider termination of parental rights and the child’s permanent placement. Mother seeks reversal of the order based on a single argument, that the juvenile court’s finding that she had been offered or provided reasonable reunification services cannot be sustained because the agency did not provide court-ordered in-person visitation (except on one occasion). We find no merit to mother’s argument and, accordingly, we deny the petition for an extraordinary writ on the merits. We also deny as moot mother’s related request for a temporary stay of the section 366.26 hearing set for December 19, 2022. FACTS A. Background In November 2021, real party in interest San Mateo County Human Services Agency Children and Family Services (the agency) filed a petition under section 300, subdivisions (b) (failure to protect) and (c) (serious emotional damage), asking the court to assume jurisdiction over the then 13-year-old child. The petition contained the following allegations. Mother’s “ongoing substance abuse and unaddressed mental health issues” jeopardized the child’s safety and placed the child at substantial risk of harm and neglect. Mother had been diagnosed with bipolar disorder and polysubstance dependence and had an extensive history of mental health and addiction issues. Since the child’s birth in May 2008, the child had been twice declared a court dependent (May 2008 to April 2010 and April 2015 to October 2016) based on substantiated 2 All undesignated statutory references are to the Welfare and Institutions Code. 2 allegations of mother’s neglect. Despite three years of reunification and family maintenance services, mother continued to abuse alcohol and drugs. The child reported that mother’s substance use (alcohol and presumed methamphetamine) escalated mother’s emotional volatility and anger, resulting in verbal and physical altercations between them. Mother’s unaddressed substance abuse and mental health issues had also caused the child to become depressed, suffer anxiety, and engage in self-harming behaviors, thereby placing the child’s safety and emotional well-being at risk. The child had been diagnosed with major depressive disorder and post-traumatic stress disorder based on suicidal ideation, incidents of body-cutting, and an attempt to overdose with over the counter medication resulting in a psychiatric hospitalization. The child felt unsafe in the home based on mother’s threat to physically assault and actual physical assault of the child (hitting the child in the face with her open hand). B. November 15, 2021 Detention Hearing At the November 15, 2021 detention hearing, mother was present and represented by counsel. The court found mother’s testimony was not credible. The court found the child was a person described in section 300, subdivisions (b) and (c), the agency was granted custody of the child for placement in a foster care home, and mother was granted supervised in-person visits of two hours twice a week for a total of four hours and supervised “[v]irtual visitation.” The agency was directed to provide the following reunifications services to mother: alcohol and drug testing; substance abuse treatment; parenting education; and counseling. 3 C. February 23, 2022 Combined Jurisdictional and Dispositional Hearing Before the February 23, 2022 combined jurisdictional and dispositional hearing, the agency filed several reports with the court concerning the status of mother’s participation in reunification services and visitation. The agency social worker (“social worker”) reported that mother had been given referrals and arrangements were made for her attendance at anger management classes and for alcohol and other drug (AOD) assessment, but mother had not participated in any of the offered services. Mother was scheduled to drug test on six dates in January 2021 but failed to appear on those dates. Mother was also scheduled for three additional drug tests, which were apparently missed because mother’s telephone was not functioning. The social worker had asked the child to participate in an in- person visit on six dates, but the child did not want to visit mother. However, on February 13, 2022, the child sent a text message – “ ‘I want to visit my mom’ ” – and the social worker scheduled a supervised in-person visit for February 16. The social worker also reported that mother had sent the child “harsh messages via text and Instagram DM” that indicated mother did not believe the child’s mental health issues had anything to do with the way she treated the child. Mother was not present at the jurisdictional and dispositional hearing, but she was represented by counsel. The child was present and represented by counsel. The juvenile court considered the agency’s reports and the child’s testimony. 4 The juvenile court found true the allegations as stated in the petition and declared the child a dependent of the court. Having found that mother had made no progress in alleviating or mitigating the causes necessitating the child’s out of home placement and that the child would be at substantial risk if returned to mother, the court granted the agency custody of the child for continued placement in a foster family home. The court granted mother reunification services, specifically directing her to participate in the following services as part of her case plan: (1) mental health assessment and, if appropriate, therapeutic services including individual and/or family therapy; (2) a 16-week anger management program; and (3) outpatient substance abuse treatment and substance abuse testing at least once a week. The court also granted mother supervised in-person visits of two hours, twice per week. D. The Agency’s Section 388 Motion to Terminate Reunification Services/Six-Month Status Review On August 12, 2022, the agency filed a section 388 motion seeking an order terminating mother’s reunification services at the six- month status review. The social worker asserted that since February 23, 2022 when dependency was declared and reunification services were ordered, mother had “expressed multiple times that she does not want reunification services,” and the child did not want to reunify with mother and was interested in exploring permanency options through adoption or guardianship. The social worker further asserted that termination of reunification services would be better for the child because “the family” did not wish to reunify and the child was “now in 5 need of a permanent plan.” As far as the social worker knew, mother and the child agreed with the agency’s request to terminate services, but the positions of counsel for mother and counsel for the child were then unknown. The court ordered the section 388 motion to be heard with the six-month status review. The agency also filed a report to be considered at the six-month status review. The social worker reported on the efforts made to encourage mother to participate in court-ordered case plan services, specifying the dates on which mother was contacted concerning services (December 2021 through July 27, 2022), and mother’s responses or lack of response. While mother initially stated she was willing to engage in some reunification services and was given referrals, mother did not actually participate in any services. The social worker reported that when mother was questioned about her participation in services, mother responded with emails stating, among other things, that she felt she had lost custody of the child due to the child’s false attempted suicide and the child’s false statements about mother’s conduct, and mother was no longer willing to participate in services as she did not expect that the child would be returned to her custody. The social worker also reported on efforts made to arrange for supervised in-person visits and other forms of communication between mother and the child. Since the agency’s last reports to the court, the social worker had spoken to the child on four occasions and asked the child to visit with mother, but the child declined all visits stating mother’s voice “triggered” the child and the child preferred to have written contact with mother. The social worker told mother that the child was not ready for in-person visits. Mother was offered other 6 means of contacting the child, including virtual visits. However, she declined, stating she would participate only in in-person visits. The social worker also discussed the possibility of arranging visits between mother and child with a therapist but mother would be required to complete a Clinical Parenting and Needs Assessment to participate in such visits. Mother had contacted the child through Facebook and the child had responded with a statement that child missed mother but needed space. Mother opined that the child did not understand the seriousness of the case, and the child did not seem to understand that adoption was permanent if there were no reunification. Mother also opined that the agency was giving the child “too much autonomy” as the child was “too young” to make these decisions. The social worker agreed to continue to encourage the child to visit mother. In April 2022, the child asked to write a letter to mother. After agreeing to have the social worker review the letter, the child wrote a letter to mother, and the letter was given to mother. Mother’s only response was a text message to the social worker saying, “ ‘Thank you for the letter I appreciate it.’ ” While the social worker encouraged mother to write back, mother did not respond to the child’s letter. When the child was told mother had not written back, the child expressed an intent to send another letter to mother. The child wrote another letter that was to be given to mother together with a clay dish that the child had made, but mother did not respond to the agency’s notification that the child had prepared another letter and gift for mother. 7 The agency also reported on the child’s circumstances in the out- of-home placement since February 2022. The child had stabilized in a therapeutic foster care home. The child was actively engaged in individual, behavioral, and group therapy, and was being treated by a psychiatrist who oversaw the child’s psychotropic medications. The foster parents were not able to commit to the child’s permanent placement in their home but were committed to caring for the child until the child returned home or secured a permanent placement. In its assessment and evaluation, the social worker reported that the child stated a belief that the child’s return to mother’s care would be detrimental to the child’s mental and physical safety, and the child was adamant that death was preferable to reunifying with mother. The child preferred to work on having healthy communications with mother, hoping to build an emotionally safe relationship, but wanted to pursue other permanent options. As to mother’s situation, the social worker reported that mother had not engaged in any reunification services, had been hostile to social workers and proposed service providers, and had made it clear she would not engage in any case plan. On July 22, 2022, mother sent a text in which she referred to the child using negative and hostile language and stated once more that she was not interested in reunifying with the child, sentiments that mother had communicated multiple times throughout the dependency. E. August 25, 2022 Hearing on Section 388 Motion and Six-Month Status Review At the August 25, 2022 hearing, neither mother nor child were present, but both were represented by counsel. The court confirmed that the hearing would include rulings on both the agency’s section 388 8 motion to terminate reunification services and the six-month status review. The court commenced the hearing by noting it had read, reviewed, and considered the agency reports prepared for the previous hearings and the six-month status review, which reports were admitted into evidence without objection. The court also heard testimony from the social worker who had been assigned to the case since July 7, 2022 and had prepared the section 388 motion and the report for the six- month status review. The social worker testified that during the past six months after the child had been placed in her current foster care home, mother had one in-person visit with the child; the visit “did not go well and it was ended early.” While mother stated she only wanted in-person visits, the social worker offered virtual visits and telephone calls; mother refused to participate in those forms of communication. Additionally, the child had written to mother stating the child wanted to start communication by letters, but mother had not responded to the child’s letter. The social worker confirmed that the child had prepared a second letter and gift for mother, but mother had not responded to the social worker’s text and so the letter and gift had not been delivered to mother. The social worker also stated that at one time mother had indicated she was willing to participate in “DYAD” (parent-child) therapy. However, that type of therapy was not available because the child’s service providers had indicated the child was not ready for DYAD therapy. The social worker further testified that the agency’s recommendation to terminate services would not change if it were true, 9 as mother had alleged in her texts, that the child had not attempted to commit suicide in November 2021. While the child’s purported suicide attempt was part of the allegations in the sustained petition, the incident was “only a small part” of the agency’s concern about mother’s conduct toward the child, including mother’s “emotional and physical abuse” of the child and the “ongoing mental health issues” of both mother and the child. In response to the court’s questions, the social worker confirmed that mother was not willing to accept communications with the agency, with mother stating that if any attempt at communication was made mother would change her contact information. Counsel for the agency and counsel for the child urged the juvenile court to terminate mother’s reunification services and set a section 366.26 hearing. In pertinent part, the child’s counsel specifically argued that mother had not and clearly indicated she would not engage in any reunification services; in addition, the child did not want reunification. Counsel also asked the court to consider that during an earlier proceeding, the child had appeared in court, and “we witnessed an extremely resilient, young [child] express [the] one great fear in life . . . that [the child] would be forced to go back to . . . [mother] and be subject, again, to additional physical and emotional abuse, . . . suffered at the hands of . . . mother for many years.” Mother’s counsel urged the court not to terminate reunification services, explaining that mother had made clear throughout the dependency that she had mental health issues that needed to be addressed, at times she was willing to participate in counseling and DYAD therapy, she was willing to visit the child albeit she was only 10 willing to agree to in-person visits, which had not been provided for a number of reasons including that the child was not ready for in-person visits, and while mother did not want to participate in court proceedings, she “still wants to direct how things go.” The juvenile court explained its reasons for granting the agency’s section 388 petition to terminate reunification services, as follows: “While . . . [mother] is willing, in theory, to have in-person visits with [the child], that is not what [the child] wants. . . . [M]other is not willing to start with Zoom and start gently. [The child] is. That is the irony of this young child who has been subjected to physical and emotional abuse at the hands of . . . mother, yet [the child] is still willing and we see this all the time, to kind of open a dialogue with . . . mother through a letter or through a Zoom visit, and it is mother that refuses to respond to those letters and have any contact with [the child] unless it is on her terms, which is in person. And they tried that, and it didn’t go so well. And I think it was difficult for [the child] – very difficult for [the child] emotionally. [The child] gets triggered. [¶] So it’s mother that is refusing. In the six months, mother has refused any and all services here. So to say she is willing to meet in person and therefore she is willing to participate in reunification services is really not the answer to this situation. [¶] Mother is clearly not participating in reunification services. The record is replete with her responses which are filled with bad language. And it clearly demonstrates . . . that I think that mother has some serious mental health issues. But we can’t even get her to the table to look at those mental health issues so that we can try and provide [the child] with an environment that is without physical and emotional abuse at the hands of . . . mother. [¶] So I think the Agency . . . did the right thing by filing the [section] 388 motion here because mother is refusing to participate in reunification services. [¶] . . . [¶] So the Court does find that the Agency has proved by clear and convincing evidence that mother’s inaction, in this case, lead to a substantial likelihood that reunification . . . will not occur. Mother is not participating in reunification services, and I do so find by clear and convincing evidence. [¶] . . . [¶] I also find, in this case, that continued reunification services are not in the best interest of 11 [the child]. And I do find that it is appropriate to terminate those services at this time. [The child] does not want to participate in in-person visits with . . . mother on . . . mother’s terms, although [the child] is willing to . . . write . . . letters and open a dialogue. But it is not in [the child’s] best interest, at this time, to have in- person visits with mother. . . . [¶] So based on the fact that mother has had six months of services and has clearly demonstrated that she is not willing to participate in reunification services and it is not in [the child’s] best interest, at this point, to continue with reunification services – mother has made zero progress in her treatment plan – the Court is going to grant the [section 388] motion at this time. And that is based on everything that I have read, reviewed and considered in this case as well as the testimony of [the social worker]. [¶] So the Court is going to terminate reunification services to mother.” In addressing the additional findings to be made following a six- month status review, the court stated, in pertinent part, as follows: “The Court also finds that the Agency has provided reasonable services in this case. Several social workers continue to reach out to mother in different forms – by e-mail, by text – and mother continues to refuse to participate or respond to them except in a litany of bad language, which is all reflected in the report. [¶] So I do find . . . and I don’t know if the standard is by clear and convincing evidence that reasonable services were offered. I believe that may be that standard. And if so, I do so find. [¶] And I also find . . . by clear and convincing evidence that mother has failed to participate regularly and ma[k]e substantial progress in the case plan. [¶] And is there a substantial probability that [the child] may be returned within the six months to . . . mother, absolutely not. That is not the Court’s finding. [¶] Therefore, the Court is going to terminate reunification services and set this matter for a .26 hearing. [¶] . . . [¶] “As it relates to the . . . [six month status review], does the Court find by [a] preponderance of the evidence that the return of the child to the physical custody of the parent would create a substantial risk of detriment to the child’s safety, protection, or physical well-being; yes, the Court so finds. [¶] . . . [D]oes the 12 Court find by clear and convincing evidence that the parent has failed to contact or visit with the child for six months? Well, that’s an interesting question. What I have found is that there was one visit. It didn’t go so well. So I think she has failed to contact or visit the child in the last six months. [¶] . . . [¶] But does the Court find by clear and convincing evidence that reasonable services were offered; yes. [¶] . . . [¶] Therefore, the Court may terminate reunification services and set a .26 hearing.” Pending the section 366.26 hearing, the court granted mother visits of a minimum of one supervised two-hour in-person visit each month and directed that “[s]upervised video chats, phone calls and letters are permitted at the discretion” of the social worker. DISCUSSION Mother challenges the juvenile court’s reasonable service finding, arguing that the agency did not provide any supervised in-person visits following the child’s detention, and then provided only one supervised in-person visit during the next six months of the dependency. She contends the lack of face to face contact with the child deprived her of the ability to maintain her bond with the child and it is impossible to predict how face to face visits might have motivated mother and the child to work diligently towards repairing their relationship and remedying the “unhealthy communication patterns that had developed in their relationship.” We find mother’s arguments unavailing. I. Applicable Law and Standard of Review “At each review hearing, if the child is not returned to the custody of his or her parent, the juvenile court is required to determine whether reasonable services that were designed to aid the parent in overcoming the problems that led to the initial removal and the continued custody of the child have been offered or provided to the 13 parent (reasonable services finding).” (In re J.P. (2014) 229 Cal.App.4th 108, 121.) When the court determines to terminate reunification services at a six-month status review, as occurred in this case, the juvenile court may not set a section 366.26 hearing unless it finds, by clear and convincing evidence, that the agency has offered or provided reasonable services to the parent. (§ 366.21, subd. (b)(4).) Additionally, “[a]ny motion to terminate court-ordered reunification services prior to the 12-month review hearing for a child who is three years of age or older” at the time of removal, as in this case, “shall be made pursuant to section 388, subdivision (c).) [¶] Section 388, subdivision (c) provides that any party . . . may petition the court, prior to the applicable review hearing, to terminate court- ordered reunification services only if one of the following conditions exist: (1) it appears that a change of circumstances or new evidence exists that satisfies a condition set forth in the reunification bypass provisions under section 361.5, subdivision (b) or (e), or (2) the action or inaction of the parent creates a substantial likelihood that reunification will not occur, including, but not limited to, the parent’s failure to visit the child, or the failure of the parent to participate regularly and make substantive progress in a court-ordered treatment plan. (§ 388, subd. (c)(1)(A), (B).)” (In re J.P., supra, 229 Cal.App.4th at p. 122.) “The court shall terminate reunification services during the above- described time periods only upon a finding by a preponderance of evidence that reasonable services have been offered or provided, and upon a finding of clear and convincing evidence that one of the conditions in subparagraph (A) or (B) of paragraph (1) exists.” (§ 388, subd. (c)(3).) 14 In seeking writ relief, the burden is on mother to show that there is no substantial evidence to support the juvenile court’s reasonable services findings. (In re L.Y.L. (2002) 101 Cal.App.4th 942, 947.) And, in reviewing the court’s reasonable services finding, we “determine whether the record, viewed as a whole, contains substantial evidence from which a reasonable trier of fact could have made the finding of high probability demanded by” the clear and convincing standard of proof. (Conservatorship of O.B. (2020) 9 Cal.5th 989, 1005, fn. omitted.)3 However, we do not “reweigh the evidence itself,” or “insert [our] views regarding the credibility of witnesses” for those of the juvenile court; rather we “view the record in the light most favorable” to that court’s order, indulging all “reasonable inferences” that the court may have drawn from the evidence and accepting the court’s resolution of conflicting evidence. (Id. at p. 1008.) II. Analysis Mother limits her challenge to a contention that the juvenile court’s reasonable services finding is not sustainable because the agency did not comply with the court’s directive to provide her with supervised in-person visits with the child, except on one occasion, since the child’s detention in November 2021. For the reasons we now explain, we see no merit to mother’s contention. 3 Concededly, the juvenile court’s reasonable services finding is subject to different standards of proof when considering a motion to terminate reunification services under section 388, subdivision (c)(3) (preponderance of the evidence) and when considering termination of reunification services at a six-month status review (clear and convincing evidence) (§ 366.21, subd. (g)(4)). For purposes of our resolution of this writ petition, we will review the court’s reasonable services findings under the stricter standard applicable at a six-month status review. 15 “ ‘An obvious prerequisite to family reunification is regular visits between the noncustodial parent . . . and the dependent [child] “as frequent[ly] as possible, consistent with the well-being of the [child.]” ’ ” (In re S. H. (2003) 111 Cal.App.4th 310, 317; see § 362.1, subd. (a)(1)(A).) “At the same time, visitation orders must provide for ‘flexibility in response to the changing needs of the child and to dynamic family circumstances.’ [Citation.] ‘In addition, the parents’ interest in the care, custody and companionship of their children is not to be maintained at the child’s expense; the child’s input and refusal and the possible adverse consequences if a visit is forced against the child’s will are factors to be considered in administering visitation.’ ” (In re Brittany C. (2011) 191 Cal.App.4th 1343, 1356.) While visitation is, without question, an important component of any plan to reunify a family, it is “but a partial component” where “circumstances have placed [the] child at substantial risk of harm and . . . intervention by the juvenile court is deemed necessary to protect the child.” (In re Moriah T. (1994) 23 Cal.App.4th 1367, 1375.) Preliminary, we find no merit to mother’s argument that the juvenile court’s visitation orders either allowed the child “to totally control the visitation,” or granted the agency “complete discretion to determine whether visitation will occur.” The court specifically ordered the agency to provide mother with supervised in-person visits for a total of four hours each week. In ruling that the agency had made reasonable efforts to assist mother in maintaining contact with the child, the juvenile court properly relied on the agency’s reports and the social worker’s testimony. Mother cites no decisional law that the court was required 16 to seek information from the child’s therapist in making its reasonable services finding. In reviewing the sufficiency of evidence to support a questioned finding, we “must accept as true all evidence tending to establish the correctness of the finding as made, taking into account, as well, all inferences which might reasonably have been thought by the trial court to lead to the same conclusion. [Citation.] There is no corollary to this rule which authorizes [us] . . . to draw inferences from the absence of evidence to overturn the questioned finding.” (Steve J. v. Superior Court (1995) 35 Cal.App.4th 798, 813.) Further, the record reflects that the juvenile court specifically addressed mother’s contention that the agency had not provided court- ordered in-person visits, except on one occasion during the nine months of the dependency. The court found that, after an unsuccessful in- person visit in February 2022, the child had made a reasonable request that the agency arrange for the child’s continued contact with mother by means of virtual visits and written communications. The court further found that mother’s insistence on only in-person visits – to the exclusion of virtual visits and written communications – was evidence that mother had refused contact with the child. We see no error in the court’s evaluation of the situation: mother had been offered reasonable means to maintain contact with the child but chose not to pursue them. “While reunification is the preferred outcome when it serves the interest of both parent and child, no interest is well served by compelling inadequate parents to shoulder responsibilities they are unwilling to accept or unable to discharge.” (In re Nolan W. (2009) 45 Cal.4th 1217, 1234.) Absent visitation, mother does not challenge the juvenile court’s finding that the agency offered her reasonable 17 reunification services to assist her in reunifying with the child. If mother felt aggrieved by the agency’s failure to arrange supervised in- person visits, “she had the assistance of counsel to seek guidance from the juvenile court in formulating a better plan.” (In re Christina L. (1992) 3 Cal.App.4th 404, 416; see In re Sofia M. (2018) 24 Cal.App.5th 1038, 1046 [where child refuses to comply with valid visitation order, it is parent’s burden to seek enforcement or modification in the juvenile court]; In re Moriah T., supra, 23 Cal.App.4th at p. 1377 [if the agency is not responsibly “managing the details of visitation, the parent or guardian may bring that matter to the attention of the juvenile court by way of a section 388 petition to modify the visitation order”].) What mother could not do was “wait silently by” until the six-month status review “to seek an extended reunification period based on a perceived inadequacy in the reunification services occurring long before that hearing.” (Los Angeles County Dept. of Children etc. Services v. Superior Court (1997) 60 Cal.App.4th 1088, 1093.)4 IV. Conclusion We deny mother’s petition for writ relief as she has failed to meet her appellate burden of demonstrating that the juvenile court’s reasonable services finding was in error. DISPOSITION The petition for an extraordinary writ is denied on the merits. (Welf. & Inst. Code, § 366.26, subd. (l); Cal. Rules of Court, rule 8.452(h).) The request for a temporary stay is denied as moot. Our 4 Contrary to mother’s contentions, the cases cited in her petition are factually distinguishable and do not support a different outcome. 18 decision is final in this court immediately. (Cal. Rules of Court, rules 8.452(i) & 8.490(b).) 19 _________________________ Petrou, J. WE CONCUR: _________________________ Fujisaki, Acting P.J. _________________________ Rodríguez, J. A166054/M.E. v. Superior Court of San Mateo County 20	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483632/	Filed 11/14/22 In re Samuel A. CA2/7 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN In re SAMUEL A., a Person B316997, B317751 Coming Under the Juvenile Court Law. (Los Angeles County Super. Ct. No. 19CCJP00325A) LOS ANGELES COUNTY DEPARTMENT OF CHILDREN AND FAMILY SERVICES, Plaintiff and Respondent, v. PATRICIA A., Defendant and Appellant. PATRICIA A., B318877 Petitioner, (Los Angeles County Super. Ct. No. v. 19CCJP00325A) THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; LOS ANGELES COUNTY DEPARTMENT OF CHILDREN AND FAMILY SERVICES et al., Real Parties in Interest. APPEALS from orders of the Superior Court of Los Angeles County, Philip L. Soto, Judge. Dismissed. ORIGINAL PROCEEDINGS; writ petition to review order setting hearing under Welfare and Institutions Code section 366.26, Philip L. Soto, Judge. Petition denied. Liana Serobian, under appointment by the Court of Appeal, for Defendant, Appellant and Petitioner. No appearance by Respondent Los Angeles County Superior Court. Amir Pichvai for Plaintiff, Respondent and Real Party in Interest the Los Angeles County Department of Children and Family Services. Marissa Coffey, under appointment by the Court of Appeal, for Real Party in Interest Samuel A. ___________________ 2 Patricia A., the mother of now-six-year-old Samuel A., appeals from December 17, 2021 and January 19, 2022 orders denying multiple petitions filed by Patricia for modification of 1 court orders. (Welf. & Inst. Code, § 388.) Because subsequent events preclude us from providing Patricia any effective relief, we dismiss these appeals as moot. In a separate original proceeding Patricia seeks extraordinary writ relief (§ 366.26, subd. (l); Cal. Rules of Court, rule 8.452) from the juvenile court’s February 23, 2022 order after a combined statutory review hearing (§§ 366.21, subds. (e)(1), (f)(1), 366.22, subd. (a)(1)) terminating family reunification services and setting a hearing pursuant to section 366.26 to consider a permanent plan of adoption for Samuel. Patricia contends the court erred in terminating family reunification services and in concluding further visitation with Samuel would be detrimental to him. The petition is denied. FACTUAL AND PROCEDURAL BACKGROUND 1. The Initial and Amended Dependency Petitions, Jurisdiction Hearing and Disposition Order On March 20, 2019 the juvenile court sustained the first amended petition filed by the Los Angeles County Department of Children and Family Services pursuant to section 300, subdivision (b)(1), finding Patricia’s unresolved history of alcohol abuse left her unable to care for Samuel; Patricia suffered from untreated mental health issues, including anxiety and depression; Patricia self-medicated with alcohol to alleviate her suffering; and her alcohol abuse and untreated mental health 1 Statutory references are to this code unless otherwise stated. 3 issues placed Samuel at substantial risk of serious physical harm. The court declared Samuel a dependent child of the court and removed him from Patricia’s custody, finding by clear and convincing evidence there would be substantial danger to Samuel’s physical health and safety if he were returned to Patricia. The court placed Samuel in the care and custody of the Department and ordered family reunification services for Patricia, including monitored visitation for a minimum of six hours per week, participation in a drug and alcohol program with random weekly testing, and individual counseling, including a psychiatric evaluation, to address alcohol addiction, anxiety 2 and depression. 2. The Statutory Review Hearings and Reversals on Appeal The extensive post-disposition proceedings, including Patricia’s section 388 petition to set aside the jurisdiction findings pursuant to section 390 following a favorable Evidence Code section 730 evaluation and her refusal to work with, and active harassment of, the multitude of attorneys appointed to represent her, as well as the juvenile court’s improper attempt to address Patricia’s behavior by appointing a guardian ad litem for her, are detailed in our prior decisions in In re Samuel A. (2020) 55 Cal.App.5th 1 (Samuel II) (reversing the juvenile court’s order summarily denying Patricia’s section 388/390 petition as an unauthorized motion for new trial) and In re Samuel A. (2021) 2 We affirmed the court’s jurisdiction finding as to Patricia’s alcohol abuse and disposition order. (In re Samuel A. (Dec. 16, 2019, B296535) [nonpub. opn.] (Samuel I).) We did not reach the court’s additional jurisdiction finding of emotional instability. (Ibid.) 4 69 Cal.App.5th 67 (Samuel III) (reversing court order appointing guardian ad litem). Our decision in In re Samuel III, supra, 69 Cal.App.5th 67, filed September 21, 2021, directed the juvenile court to vacate all orders made at hearings where Patricia, under the appointment of a guardian ad litem, was denied the right to communicate directly with her counsel, including the orders made at the combined section 366.21, subdivisions (e) and (f), hearing and the May 7, 2021 order pursuant to section 366.26 terminating parental rights. We afforded the Department the opportunity to show cause why Samuel III did not require summary reversal of Patricia’s pending appeals from the juvenile court’s November 4, 2020 and December 17, 2020 orders denying multiple section 388 petitions seeking to set aside the guardian ad litem order and appointment of new counsel; the April 8, 2021 order denying without a hearing Patricia’s section 388 petition to modify the order terminating her reunification services; and its May 7, 2021 order terminating her parental rights. Receiving no response from the Department, we reversed each of those orders. (See In re Samuel A. (Dec. 6, 2021, B312480) [nonpub. opn.]; In re Samuel A. (Dec. 6, 2021, B310032 [nonpub. opn.].) 3. Proceedings on Remand Leading to the Most Recent Statutory Review Hearing Terminating Reunification Services On October 27, 2021, before issuance of our remittitur in Samuel III, supra, 69 Cal.App.5th 67, Patricia filed in propria persona a section 388 petition seeking immediate visitation with Samuel, citing our disposition in Samuel III as the basis for her request. On November 5, 2021 the matter was transferred to a 5 new bench officer who scheduled a hearing on Patricia’s petition on November 29, 2021. Our remittitur in Samuel III issued on November 24, 2021. In its November 24, 2021 written response to Patricia’s October 27, 2021 section 388 petition, the Department urged the court to deny any visitation, asserting Samuel was the most stable he had ever been in the six months since Patricia’s rights were terminated and visitation had ceased. The Department argued it would not be in Samuel’s best interests to reinstate visits with Patricia. The Department requested the court consider the issue of visitation at the new statutory review hearing (§§ 366.21, subds. (e), (f), 366.22). Alternatively, if the court were inclined to order visitation immediately, the Department requested the visits be three hours once a week at the Department’s office with a security guard present. Samuel’s counsel also opposed Patricia’s section 388 petition as contrary to Samuel’s best interests and, like the Department, requested the court consider the matter of visitation at the statutory review hearing. On November 29, 2021 the juvenile court, citing our remittitur in Samuel III, vacated its April 20, 2020 order appointing a guardian ad litem for Patricia and continued the hearing on Patricia’s October 27, 2021 petition to December 10, 3 2021. The court ordered the Department to provide information 3 Although Patricia had filed her October 27, 2021 section 388 petition in propria persona, the court stated it would consider it rather than ordering counsel to refile it, but reminded Patricia she is represented by counsel, advised her it would only consider pleadings filed by her counsel, and ordered her to stop filing in propria persona any more documents in the court. 6 by December 8, 2021 whether visits in a therapeutic setting were feasible. On December 8, 2021 the Department provided a last minute information advising the court Samuel’s therapist had told the Department in a voicemail, without further elaboration, she would not be able to provide the information the court was requesting. The Department’s further attempts to contact the therapist went unanswered. The Department once again urged the court to postpone any ruling on visitation to the statutory review hearing. It also asked the court to deny Patricia’s petition as not being in Samuel’s best interest. a. The December 17, 2021 hearing on Patricia’s October 27, 2021 Section 388 Petition At the hearing on Patricia’s October 27, 2021 section 388 petition, which was continued to December 17, 2021, Patricia’s counsel argued our remittitur in Samuel III had “rewound the statutory clock back to the [original] .21(e) hearing date of September 2019.” Because Patricia was now within the statutory reunification period, she argued, the court and the Department had a duty to assist Patricia with, and provide, visitation. Patricia’s counsel urged the court not to wait to the statutory review hearing but to order visitation immediately, “beginning today.” The court disagreed “the clock, the reunification clock, is unwound on account of the court’s decision about the [guardian ad litem].” According to the juvenile court, our decision did not mean we “go back in time to the .21(e). We are moving forward in time. And we will be setting a [statutory review] hearing in January or February, whichever is appropriate, for a full hearing on whether or not there’s still a substantial risk to the child if the 7 child were returned to mother if there’s some reason why additional services should be provided to try and reunify the child with the mother. That does not mean that we roll back time and give her another 18 months to try and reunify.” The court agreed with the Department and Samuel there was no evidence of “changed circumstances” (other than our opinion in Samuel III) and it was not in Samuel’s best interests “to reinitiate on a regular basis visits or services for the mother to try and reunify.” The court denied Patricia’s October 27, 2021 4 section 388 petition. Notwithstanding the denial of Patricia’s section 388 petition seeking visitation, the court ruled it would, over the objections of the Department and Samuel, order one monitored visit between Samuel and Patricia for two hours at the Department with a security guard present. The court explained, “I’m doing this because I want to see whether or not she will learn to regulate her behavior so that I know . . . whether or not this child actually can be safe with this mother. I don’t know if that’s possible, but I think I at least owe her the opportunity for her to show me that it is.” The court told the parties it would receive reports from the caretakers and the Department as to how Samuel reacted to the visit and would be making any further rulings on visitation at the combined sections 366.21, subdivisions (e), (f) and 366.22 hearing, which it set for February 17, 2022. That visit took place on December 22, 2021. 4 Before the court could finish its ruling, Patricia interrupted the hearing, which was held remotely, and, after several warnings, was excluded from the hearing. 8 b. The January 19, 2022 hearing on several section 388 petitions filed prior to our decision in Samuel III On January 19, 2022 the court held a hearing on the three section 388 petitions Patricia had filed on November 3, 2020, November 25, 2020, and March 11, 2021, which we had summarily reversed on appeal in December 2021 based on our decision in Samuel III. All the petitions sought modification of orders since reversed or vacated (with the exception of Patricia’s request for new appointed counsel, which the court denied the same day at a Marsden hearing). Rather than simply deny them as moot, however, the court considered them as if they were new section 388 petitions again seeking immediate and regular visitation and, like the Department and Samuel, focused on Patricia’s December 22, 2021 visit with Samuel. In its lengthy January 10, 2022 written response for the January 19, 2022 hearing the Department detailed the history of Patricia’s case and added information concerning the events that had occurred after the termination of parental rights in May 2021. Among other things, the Department reported Patricia had called police in May, June and November 2021 complaining Samuel’s foster parents were abusing him, a complaint Patricia had made about every foster parent with whom Samuel had been placed, causing two families to request Samuel be moved and, according to the Department, contributing to Samuel’s diagnosed post-traumatic stress disorder. The welfare checks conducted never found evidence of abuse. The night before Samuel’s scheduled December 22, 2021 visit, Samuel asked his foster parents if he could conduct the visit by telephone. After he was told he was going to see Patricia in person, Samuel went to bed. He became distraught and had 9 difficulty calming down. The foster parents said he had not exhibited that behavior since his visits with Patricia had been terminated six months earlier. “Overall,” the Department reported, “the visit went well.” Samuel referred to Patricia as “other Mama,” and he and Patricia interacted well. Samuel told Patricia the judge had said they were just going to do this “one time” visit together and no more. Patricia responded that was not true and was told by the social worker not to discuss the case. Patricia said, “Well, he’s the one bringing it up.” Near the end of the visit Samuel told Patricia, “I’m going to miss you a lot when I’m back home.” Patricia responded, “I’m going to miss you a lot too.” A few minutes before the visit ended, the social worker saw Patricia with her telephone and heard multiple clicks from the mobile phone, indicating Patricia was taking photographs of Samuel. The social worker asked her to stop photographing Samuel; Patricia denied she was taking photographs and insisted, in any event, she had the right to do it. Samuel hugged Patricia goodbye. He “did not cry or appear to be sad.” At the end of the visit, Patricia refused to comply with a court order requiring she remain for 15 minutes after Samuel left. She screamed at the social worker and the security guard and told them she intended to report them both to the FBI. Then she left. After the visit the foster parents reported Samuel had “displayed some emotional dysregulation.” He asked his foster mother to go with him to any other visits with Patricia and did not like going without her there. At bedtime Samuel screamed and cried and became inconsolable. It took 45 minutes for him to calm down. The next night, he developed a rash over his upper body that was identical to those he used to get when he was first 10 placed with them and was suffering from post-traumatic stress disorder. Since the December 2021 visit, the Department reported, Samuel had not expressed any interest in visiting with Patricia. The Department and Samuel’s counsel urged the court to deny any further visitation pending the statutory review hearing as not in Samuel’s best interests. Patricia, still represented by counsel, submitted in propria persona a last-minute “walk-on” request challenging the Department’s “false reports” and accusing the Department of railroading and gaslighting her. She told the court she “fears for her son’s life.” Patricia’s counsel argued all the Department’s evidence was immaterial to the issue of visitation. There was no risk of harm to Samuel in Patricia’s presence and, even if there were, any risk could be ameliorated with an order of monitored visitation. Given the absence of any danger to Samuel, Patricia’s counsel argued, visitation must be ordered. Treating the three pending petitions separately, the court denied the earliest one, emphasizing Samuel’s adverse response to his last visit with Patricia. “He’s having a very negative reaction to these visits. And it’s not something that demonstrates to this court that the child would be benefitted by further visits with the mother or other services to the mother. For those reasons, the 388 will be denied.” Before ruling on the remaining two petitions the court permitted Patricia to testify. Patricia described herself as a “great mama” and insisted it was in Samuel’s best interests to be with her. Patricia testified Samuel had told her during the last visit that he loved and missed her and did not believe the things 11 others were saying to him about Patricia. Patricia denied ever yelling at social workers, making negative comments to Samuel about how he was dressed or shoving a table in anger during a visit. She also denied taking photographs of Samuel at the last visit or yelling at the security guard. The court denied the remaining section 388 petitions, again stating renewed visitation was not in Samuel’s best interests. The court found Patricia’s denials of misconduct and abusive behavior not to be credible and commented, as it had previously, that Patricia resisted the efforts of the social workers, monitors and lawyers who were part of the process. As for the December visit, the court found, although there were some good aspects, “there was still much of the same conduct that we had before with mother saying things that she wasn’t supposed to say to the child, speaking about the court case, being abusive to the social workers, security guards and other personnel. This is all part and parcel of mother not understanding and demonstrating the things that we had hoped she’d learn in these classes that she says she completed. . . . I wanted to give mom a visit and the child a visit to see how everybody would react and see whether or not that was a good signpost, if you will, to whether we can resume more frequent visits that would be beneficial for the child as well as the parent. It’s very clear to this court that’s not the case. I’m sorry to say.” The court ordered Patricia, over her counsel’s objection, to submit to weekly on demand alcohol and drug tests prior to the statutory review hearing and reminded her a missed test is considered a dirty test. 12 Patricia’s counsel again requested immediate visitation pending the statutory review hearing. The court denied the request. 4. The Statutory Review Hearing and Order Terminating Family Reunification Services and Setting the Selection and Implementation Hearing In the Department’s report for the combined section 366.21, subdivisions (e) and (f), and section 366.22 hearing and in a trial brief prepared specially for the hearing, the Department recommended the court terminate family reunification services and set the matter for a selection and implementation hearing. Samuel’s counsel also filed a trial brief similarly requesting the termination of family reunification services and an order setting the selection and implementation hearing. Both the Department and Samuel’s counsel argued that Patricia had received nearly 24 months of family reunification services, from at least the March 2019 jurisdiction hearing up until reunification services were originally terminated in May 2021. Although Patricia maintained she had completed parenting classes and individual counseling early in the case, they argued, it was clear she had not learned anything. If anything, her impulse control issues were worse than ever, and she lacked all insight into how her temper tantrums, some violent and in Samuel’s presence, affected Samuel. a. The Department’s last minute information In a last minute information for the court filed February 16, 2022, the Department reported: Patricia did not show up for alcohol and drug testing on February 1, 2022 and February 7, 2022 as scheduled. On February 10, 2022 Patricia called the California Highway Patrol reporting the social worker transporting Samuel to visits had been physically and 13 emotionally abusing him. She stated Samuel had a red stripe on his face and on his torso when she last saw him and did not believe those marks were seat belt related, as the officer had suggested. She told the officer she had “won all her appeals” and the dependency case was a fraud. She asked the officer to investigate the social worker for abuse, but the officer explained Patricia lacked personal knowledge of abuse. Patricia told the officer she would be reporting him to the FBI, among other authorities. The officer terminated the exchange. On February 10, 2022 Patricia also called the local police department’s child protective hotline to insist the police conduct a welfare check on Samuel at the foster parents’ home. The police officers visited the foster parents’ home, spoke with Samuel and reported no concerns. On February 14, 2022 a member of the Santa Monica Police Department’s Mental Evaluation Team (MET) called the Department to report Patricia had called the 911 emergency number on February 8, 2022 . The MET officer stated she could not provide details of Patricia’s health condition pursuant to the Health Insurance Portability and Accountability Act (HIPAA) without Patricia’s consent, but was concerned: Patricia had suggested she had a child, and the MET officer was fearful of a child being in Patricia’s care at that time. The Department related that Samuel was not in Patricia’s custody. On February 8, 2022 the fire department went to Patricia’s home after she had called the 911 emergency number. Due to Patricia presenting with depressive symptoms, she was placed on a psychiatric hold for 24 hours. On February 16, 2022 the Department received a call from a Santa Monica Fire Department paramedic, “Mr. M.,” who said 14 that in the last two months he had had been called to Patricia’s residence three or four times. He reported it was abundantly clear Patricia was not taking care of her health or well-being and required immediate mental health assistance. b. The continuance of the statutory review hearing and Patricia’s walk-on request filed in propria persona The court continued the statutory review hearing to February 22, 2022 after Patricia’s counsel filed another motion to withdraw and Patricia filed, in propria persona, a motion to disqualify Judge Soto. On February 22, 2022 the court denied the motion by Patricia’s counsel to withdraw, struck the disqualification motion, and proceeded to the statutory review hearing. The same day Patricia filed in propria persona a walk-on request. She told the court not to believe Samuel’s foster parents, noting they had made clear their intent to adopt Samuel and had posted on social media (after Patricia’s parental rights were initially terminated in May 2021) that they intended to be Samuel’s “forever family.” As to her no-shows for alcohol testing, Patricia claimed the Department had sent the testing referral to an email address she does not routinely check; the email went to her spam folder; and, when she finally saw the email on February 9, 2022, she replied immediately and told the Department she would gladly resume testing. Patricia acknowledged going to the hospital—on February 10, 2022, not on February 8, 2022—but for injuries she sustained in a bicycle accident, which resulted in a concussion. She said she was not placed on a psychiatric hold. According to Patricia, due process demanded that she be provided with a new attorney, new social 15 workers, and a new juvenile court judge who would not be biased against her. c. The parties’ arguments at the hearing At the hearing (after her motion to withdraw was denied) Patricia’s counsel requested six more months of services for Patricia. Counsel told the court Patricia was willing and able to comply with whatever additional orders the court deemed appropriate. Asserting Patricia had a stable home and income, counsel contended there was a substantial likelihood that Samuel could be returned to Patricia’s home within the next six months. Counsel specifically requested weekly monitored in-person visits. The Department urged the court to terminate reunification services and set a selection and implementation hearing. According to the Department Patricia’s compliance with her case plan had been “woefully inadequate.” Although Patricia had received a positive mental health evaluation from her therapist in 2019, the same therapist had diagnosed Samuel with a life- threatening parasitic illness, even though the therapist had never seen Samuel. The Department asserted that the therapist’s unprofessional diagnosis undermined the therapist’s expertise and credibility. In addition, although Patricia had attended parenting classes early in the case, she did so without notifying the Department and without the instructor having knowledge about the Department’s concerns. The instructor later told the Department she wished she would have been informed so she could have provided more help to Patricia. Patricia attended Alcoholic Anonymous meetings but continued to deny she had any problem with alcohol even though she had shown up to court in 2019 with alcohol on her breath. More recently, in February 2022 she exhibited the same 16 concerning behaviors that had led to the initiation of dependency proceedings: Stomach pain complaints accompanied by alcohol intoxication and emotional instability, leading to a 24-hour psychiatric hold. Patricia did not show up for drug and alcohol testing on February 1, 2022 and February 7, 2022. Although Patricia displayed a “willingness” to test at her convenience, that was not sufficient to protect Samuel, as the court had repeatedly explained to her throughout these dependency proceedings. Samuel’s counsel similarly argued against extending the reunification period. In addition to matters argued by the Department, Samuel’s counsel stated Patricia had no impulse control and posed a threat to Samuel’s safety. Both the Department and the Samuel’s counsel argued that there was no likelihood Patricia could reunify with Samuel and that Patricia, even if she had completed her case plan, lacked insight into her own addiction and behavior and the effect of both on Samuel. They also argued visitation was not only not in Samuel’s best interests, as the court had earlier decided, but it was also, in fact, detrimental to him, as the December 2021 visit had confirmed. d. The court’s ruling The court found by a preponderance of the evidence that return of Samuel to Patricia’s custody would create a substantial risk of detriment to his safety, protection and physical and emotional well-being. The court found by clear and convincing evidence that Patricia, even if she had technically completed her case plan, had failed to make substantial progress in the court- ordered treatment plan over the nearly three years the case had been in dependency proceedings, and it was not reasonable to conclude Samuel could be returned safely to Patricia’s custody if 17 another six-months of reunification services were ordered. Based on Samuel’s strong physical and emotional reaction both just before and immediately following the December 2021 visit, the court found further visitation with Patricia would be detrimental to Samuel and denied Patricia visitation in the post-reunification period. e. Patricia’s statement in court After the court finished stating its ruling, the court granted Patricia’s request to speak on her own behalf. Patricia repeated the explanations for her no-show at the alcohol tests that she had made in her walk-on papers. As for insight into her alcohol abuse, Patricia stated she is a sponsor at Alcoholics Anonymous, a member of Al-Anon and regularly attends meetings for both. She had tested negative for alcohol for nearly two years during these dependency proceedings. She insisted she had done everything the court had asked her to do in order to bring her son home. Patricia acknowledged being hospitalized in February 2020 but again claimed it was due to a concussion following a bicycle accident, an injury that might have looked like a mental health episode to an outsider—she was very dizzy—but was not. She stated she had been taken to an “inappropriate” hospital location and later moved to a proper treatment facility for her head injury. Patricia also asserted she had not been well-served by her current attorney Niti Gupta, the same attorney who had requested the appointment of a guardian ad litem against Patricia’s wishes. Patricia had been trying since before the guardian ad litem was appointed to have Gupta removed from 18 her case. Gupta had also asked the court several times to be relieved. Patricia claimed social workers had lied, Gupta had lied or withheld information from her, Samuel’s lawyer had lied, and Samuel’s foster parents had lied. She had reported all of them to the appropriate authorities. But, in the meantime, the court should not believe the social workers, law enforcement officers or the unnamed paramedic whose recent reports the court cited in its ruling. Finally, Patricia stated the Department and the court were correct that Samuel had been emotionally and physically traumatized. But that trauma resulted from Samuel’s enormous separation anxiety after being removed from Patricia and then precluded for most of the proceedings from having meaningful visits with her. The court thanked Patricia for her input and advised her of her right to file a writ petition challenging its decision. DISCUSSION 1. Patricia’s Appeals from the Orders Denying Her Section 388 Petitions Are Now Moot Patricia has appealed from the court’s December 17, 2021 order (denying after hearing her October 27, 2021 section 388 petition seeking to vacate the court’s May 7, 2021 order terminating her parental rights) and January 19, 2022 order (denying after hearing multiple section 388 petitions originally filed on November 3, 2020, November 25, 2020 and March 11, 2021, requesting removal of the guardian ad litem, appointment of new counsel and liberalized visitation). The January 19, 2022 order also denied without a hearing Patricia’s January 3, 2022 section 388 petition, filed in propria persona, seeking to modify 19 the court’s December 17, 2021 order granting Patricia a single visit in December 2021. Patricia sought in that petition to increase visitation to three hours per week. All of these orders have been mooted by subsequent events: Samuel III reversed the order appointing a guardian ad litem and directed the court to vacate orders made at all statutory review hearings, including the order terminating her parental rights. The court found at the February 2022 statutory review hearing that any additional visitation with Patricia would be detrimental to Samuel. And, in July 2022, while these appeals were pending, the juvenile court granted the motion of Patricia’s counsel, Niti Gupta, to be relieved and appointed new counsel for 5 Patricia. In light of our denial of Patricia’s rule 8.452 petition for extraordinary writ relief, effectively affirming the juvenile court’s finding that further visitation would be detrimental to Samuel, reversal of these orders denying Patricia’s various section 388 petitions would not afford Patricia effective relief. (See In re N.S. (2016) 245 Cal.App.4th 53, 58-59 [“[a]n appellate court will dismiss an appeal when an event occurs that renders it impossible for the court to grant effective relief”]; In re E.T. 6 (2013) 217 Cal.App.4th 426, 436.) 5 We granted Patricia’s request for judicial notice of the court’s July 28, 2022 minute order granting Gupta’s motion to withdraw as counsel. 6 As discussed at oral argument, it may have more appropriately been the Department’s burden following our reversals to move in the juvenile court to restrict Patricia’s visitation with Samuel, not Patricia’s to request visitation. Nevertheless, given the court’s order allowing one visit and its 20 2. The Court Did Not Err in Summarily Denying Patricia’s January 3, 2022 Petition Filed in Propria Persona Patricia’s appeal from the court’s January 19, 2022 order denying her January 3, 2022 section 388 petition filed in propria persona fails for an additional reason. There was nothing improper about the court’s order prohibiting Patricia, while represented by counsel, from directly filing documents with the court. Whether that petition should have been summarily denied or precluded from being filed at all is immaterial. The court did not err in refusing to consider it. 3. The Court Did Not Err in Terminating Patricia’s Reunification Services at the Statutory Review Hearing a. Governing law When the court removes a dependent child from parental custody, absent a specific statutory exception, it is required to order the child protective services agency (here the Department) to provide the parent with services to facilitate the reunification of the family. (§ 361.5, subd. (a); see Tonya M. v. Superior Court (2007) 42 Cal.4th 836, 843; In re Marilyn H. (1993) 5 Cal.4th 295, 307 [reunification services are among the “[s]ignificant safeguards” that are built into the dependency statutory scheme]; In re M.F. (2019) 32 Cal.App.5th 1, 13 [“[f]amily reunification services play a critical role in dependency proceedings”].) For a child under three years old on the date of initial removal, as Samuel was, this period of reunification is presumptively limited to six months. (§ 361.5, subd. (a)(1)(B); subsequent finding further visitation by Patricia would be detrimental to Samuel, any procedural error in this regard was harmless. 21 Tonya M., supra, 42 Cal.4th at p. 843.) The period may be extended at both the six- and 12-month review hearing only upon findings made at those hearings that continuation of services was likely to facilitate reunification. (§ 366.21, subds. (e), (f); Tonya M., at p. 844.) The Legislature has determined (with a limited exception not relevant here) the maximum period for services is 18 months. (§§ 361.5, subd. (a)(3), 366.22, subd. (a); Cynthia D. v. Superior Court (1993) 5 Cal.4th 242, 249.) At the 18-month permanency review hearing the juvenile court must order a child returned to a parent’s custody unless it finds, by a preponderance of the evidence, that return of the child will create a substantial risk of detriment to the child’s safety, protection or physical or emotional well-being. (§ 366.22, subd. (a).) If the child is not returned to a parent at the 18-month review hearing or at least placed in the parent’s custody with services (see Bridget A. v. Superior Court (2007) 148 Cal.App.4th 285, 311-312), the court must terminate reunification services and order a hearing pursuant to section 366.26 after finding, by clear and convincing evidence, that reasonable services have been offered or provided to the parent or guardian. (§ 366.22, 7 subd. (a)(3).) 7 In Michael G. v. Superior Court (2021) 69 Cal.App.5th 1133, the court of appeal held that reunification services must be terminated at the 18-month review hearing (barring applicability of a limited exception of section 366.22, subdivision (b)), even if the juvenile court determines reasonable services were not provided during the most recent review period. The court reasoned the statutory language did not condition the setting of the section 366.26 hearing on the reasonable services finding. 22 The Department must offer or provide services designed to eliminate the conditions that led to the juvenile court’s jurisdiction finding. (T.J. v. Superior Court (2018) 21 Cal.App.5th 1229, 1240; Patricia W. v. Superior Court (2016) 244 Cal.App.4th 397, 420; see Cal. Rules of Court, rule 5.502(33) [“‘reasonable services’ means those efforts made or services offered or provided by the county welfare agency or probation department to prevent or eliminate the need for removing the child, or to resolve the issues that led to the child’s removal in order for the child to be returned home, or to finalize the permanent placement of the child”].) In assessing whether reasonable services have been provided, the standard is not whether the services “‘were the best that might be provided in an ideal world, but whether the services were reasonable under the circumstances.’” (In re J.E. (2016) 3 Cal.App.5th 557, 566; accord, In re Misako R. (1991) 2 Cal.App.4th 538, 547.) We review the court’s finding that reasonable services were offered or provided for substantial evidence. (See In re M.F., supra, 32 Cal.App.5th at p. 14 [“we review a reasonable services finding ‘“in the light most favorable to the trial court’s order to determine whether there is substantial evidence from which a reasonable trier of fact could make the necessary findings based on the clear and convincing evidence standard,”’” italics omitted]; T.J. v. Superior Court, supra, 21 Cal.App.5th at p. 1238 [same]; see Conservatorship of O.B. (2020) 9 Cal.5th 989, 1011-1012 [addressing appellate review of order requiring a finding by clear (Michael G., at p. 1143.) On January 19, 2022 the Supreme Court granted review, S271809. 23 and convincing evidence].) We do not substitute our judgment for the juvenile court or reweigh the evidence. (In re M.F., at p. 15.) b. Patricia has not demonstrated any error in failing to revise her case plan following our remand in Samuel III In challenging the court’s reasonable services finding, Patricia contends the court failed to craft a new case plan following our remand in Samuel III that was specifically tailored to Patricia’s needs as they had evolved. For example, she observes, the court did not order any additional mental health treatment or alcohol programs other than random drug and alcohol testing. Not only did Patricia fail to make this argument in the juvenile court (she asked the court simply to order “whatever services” it found appropriate to afford Patricia six more months of reunification), but also she cites no authority for the proposition that a revised case plan was required, particularly here, where Patricia refused to cooperate or provide any information when the Department specifically asked Patricia for an update on her progress following our remand. In response to the Department’s inquiry, Patricia told the social worker she had completed all of her court-ordered case plan; she had no unresolved mental health or alcohol issues; the social workers were the ones with mental health issues; and she was reporting them to law enforcement. Moreover, the court explained its order terminating reunification services had little to do with Patricia’s case plan. The court accepted that Patricia may have completed her court- ordered programs, but emphasized her lack of insight and apparent inability to learn anything from them. Patricia did not believe she had a problem, and no amount of services it seemed 24 8 would benefit her or facilitate reunification. Patricia has cited no evidence and no authority to support her claim the court erred “as a matter of law” in failing to revise her case plan with additional services after our remand. c. Substantial evidence supports the court’s limited visitation order after our remand Patricia also contends she received inadequate services following our remand in Samuel III because she was only allowed a single visit with Samuel. As Patricia’s counsel argued below, the effect of our opinion in Samuel III, while not negating the time or services Patricia had already received (and thus not arguing for an additional 18 months of reunification as the court had suggested), effectively returned Patricia to the reunification phase where, absent a finding that visitation would jeopardize Samuel’s physical safety (§ 362.1, subd. (a)(1)(B)), she was statutorily entitled to some visitation. (See Serena M. v. Superior Court (2020) 52 Cal.App.5th 659, 673 [visitation is “‘a critical component, probably the most critical component, of a 8 In rejecting Patricia’s request for “whatever services” the court found appropriate, the court explained providing Patricia with additional services would not facilitate reunification: “The Department and everyone else involved in this case has bent over backwards to try and accommodate the mother and provide her with all services needed to reunify with her child despite the fact that mother has been extremely argumentative, rude, threatening, menacing to social workers, to professional monitors, to foster parents, to the MAT [Multidisciplinary Assessment Team] evaluator, to virtually everyone who was responsible for providing services for her which she perceived, apparently, as a threat instead of as somebody trying to help her with this problem.” 25 reunification plan’”]; In re T.W.-1 (2017) 9 Cal.App.5th 339, 347 [same].) The visitation ordered during the reunification period “shall be as frequent as possible, consistent with the well-being of the child.” (§ 362.1, subd. (a)(1)(A).) Patricia correctly observes the court did not make a finding at the December 2021 hearing that visitation would jeopardize Samuel’s safety. However, neither did the court deny her visitation. To the contrary, on November 29, 2021, the first hearing following issuance of our remittitur, the juvenile court ordered the Department to contact Samuel’s therapist concerning the feasibility of immediate visitation in a therapeutic setting. When that information proved unavailable, the court ordered a monitored visit between Samuel and Patricia to assess whether renewed visitation after a period of no visitation would be, as the Department and Samuel argued, harmful to Samuel. The court did exactly what it was supposed to do: It ordered visitation, while limiting the frequency pending the next hearing, to address the concerns Samuel’s counsel had expressed about Samuel’s well-being. In January 2022, after receiving conflicting reports as to whether the December visit had proved detrimental to Samuel, the court advised the parties it would address Patricia’s request for more visitation at the upcoming statutory review hearing. Then, at the combined statutory review hearing the court expressly found that reasonable services, including visitation, had been provided to Patricia following our remand. Patricia argues that a “single visit” during the period between issuance of our remittitur and the statutory review hearing cannot, “as a matter of law,” be considered reasonable services, ignoring the nearly 24 months of services and visitation 26 she was previously afforded. Viewed in isolation, we might agree. However, considering the record as a whole, including the services Patricia had already received, the marked improvement Samuel had made after Patricia’s parental rights were terminated and visitation had ceased, and the court’s effort to balance Patricia’s entitlement to renewed visitation during the limited period between our remand and the statutory review hearing with concerns of Samuel’s well-being, we have no difficulty finding substantial evidence supports the court’s reasonable services finding and order terminating reunification services. 4. The Court Did Not Err in Refusing To Extend the Reunification Period 9 Relying on section 352 and cases holding that the juvenile court has discretion in an extraordinary circumstance to continue the 18-month review hearing and extend reunification services beyond the statutory limit (see, e.g., In re Elizabeth R. (1995) 35 Cal.App.4th 1774, 1787, 1796 [mother was hospitalized during most of the reunification period; and, after her release, the child welfare agency attempted to restrict visitation]; In re Dino E. (1992) 6 Cal.App.4th 1768, 1777-1778 [child welfare agency never developed a reunification plan for father]), Patricia contends the guardian ad litem order, in effect for more than a year, presented the type of extraordinary external circumstance that inhibited 9 Section 352, subdivision (a)(1), provides in part, “[T]he court may continue any hearing under this chapter beyond the time limit within which the hearing is otherwise required to be held, provided that a continuance shall not be granted that is contrary to the interest of the minor.” 27 her ability to reunify with Samuel and justified extending the reunification period. Although the guardian ad litem order may have silenced Patricia during hearings and prevented her from communicating directly with her counsel, Patricia has provided no evidence, and the record does not suggest, the guardian ad litem order had any effect on the extended period of reunification services provided to Patricia. Moreover, the juvenile court expressly acknowledged its discretion under section 352 to continue the statutory review hearing in an appropriate circumstance and found no basis to exercise it. In fact, it explained, exercising that discretion would have been contrary to Samuel’s interests. That finding was well within the court’s discretion. 5. The Court’s Finding That Visitation Following Termination of Reunification Services Would Be Detrimental to Samuel Was Supported by Substantial Evidence A parent is entitled to visitation even after reunification services are terminated unless the court finds visitation would be detrimental to the child. (§§ 366.21, subd. (h); 366.22, subd. (a)(3).) In finding continued visitation would be detrimental to Samuel, even in a monitored setting, the court focused on the reports of the foster parents and the social worker, each of whom described a return of Samuel’s extreme emotional dysregulation immediately preceding and following the December 22, 2021 visit, including, according to the foster parents, a physical reaction that included a rash covering the better part of his upper body. Patricia challenges the credibility of this evidence, noting the absence of photographs of the rash, a statement under 28 penalty of perjury by the foster parents or other indicia of reliability, particularly since the foster parents, who wanted to adopt Samuel, had a “vested interest” in thwarting reunification efforts. However, the Department’s reports were received without objection, the court properly considered them and found that Samuel, who had previously overcome his post-traumatic stress, had begun again exhibiting concerning physical and emotional responses immediately before and right after the December 2021 visit. To be sure, there was also evidence, which Patricia emphasizes on appeal, as she did at the hearing, that the majority of the holiday visit had gone well and Samuel told Patricia he would miss her when he returned “home.” The court considered all the evidence and found the additional trauma caused by further visitation would be detrimental to Samuel. Patricia disagrees with the court’s conclusion, but substantial 10 evidence supports the court’s detriment finding. 10 Samuel’s counsel’s October 6, 2022 request for judicial notice of a post-appeal juvenile court minute order dated September 16, 2022 is denied as unnecessary. 29 DISPOSITION Patricia’s appeals from the court’s December 17, 2021 and January 19, 2022 orders denying her section 388 petitions are dismissed as moot. Patricia’s petition for extraordinary writ relief from the court’s order terminating her reunification services, setting a selection and implementation hearing and denying her visitation is denied. PERLUSS, P. J. SEGAL, J. FEUER, J. 30	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483672/	IN THE SUPREME COURT OF PENNSYLVANIA In the Matter of : No. 131 DB 2022 (No. 52 RST 2022) : DANIELLE SUZANNE PY-SALAS : Attorney Registration No. 200156 : PETITION FOR REINSTATEMENT : FROM ADMINISTRATIVE SUSPENSION : (Out of State) ORDER PER CURIAM AND NOW, this 10th day of November, 2022, the Report and Recommendation of Disciplinary Board Member dated November 1, 2022, is approved and it is ORDERED that DANIELLE SUZANNE PY-SALAS, who has been on Administrative Suspension, has demonstrated that she has the moral qualifications, competency and learning in law required for admission to practice in the Commonwealth, shall be and is, hereby reinstated to active status as a member of the Bar of this Commonwealth. The expenses incurred by the Board in the investigation and processing of this matter shall be paid by the Petitioner.	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483680/	IN THE SUPREME COURT OF THE STATE OF MONTANA 11/14/2022 Supreme Court No. DA 22-0303 ROBERT MATTHEW WITTAL, Case Number: DA 22-0303 Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. ORDER Pursuant to authority granted under Mont. R. App. P. 26(1), the Appellant is given an extension of time until December 8th, 2022 to prepare, file and serve the Appellant’s opening brief. Electronically signed by: Mike McGrath Chief Justice, Montana Supreme Court November 14 2022	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483681/	11/14/2022 IN THE SUPREME COURT OF THE STATE OF MONTANA Case Number: DA 22-0107 No. DA 22-0107 STATE OF MONTANA, Plaintiff and Appellee, v. SHANE THOMPSON FREIBURG, Defendant and Appellant. ORDER Upon consideration of Appellant’s motion for extension of time, and good cause appearing, IT IS HEREBY ORDERED that Appellant is granted an extension of time to and including December 21, 2022, within which to prepare, file, and serve Appellant’s opening brief on appeal. Electronically signed by: Mike McGrath Chief Justice, Montana Supreme Court November 14 2022	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483675/	No. 17-1898T, 17-2022T, 17-2023T (Decided: November 10, 2022) ************************ DILLON TRUST COMPANY LLC, et al., Plaintiffs, Keywords: federal income tax; I.R.C. § 6603 v. deposits; underpayment interest; interest on THE UNITED STATES, deposits; jurisdiction; illegal exaction Defendant. ************************ Lawrence M. Hill, Steptoe & Johnson LLP, Washington, DC, with whom were Richard A. Nessler, Steven R. Dixon, Caitlin R. Tharp, for plaintiffs. Joseph A. Sergi, Attorney of Record, United States Department of Justice, Tax Division, Court of Federal Claims Section, Washington, DC, with whom were David A. Hubbert, Deputy Assistant Attorney General, David I. Pincus, Chief, Court of Federal Claims Section, G. Robson Stewart, Assistant Chief, Court of Federal Claims Section, Dara B. Oliphant, Assistant Chief, Civil Trial Section – Central, Margaret E. Sheer, Trial Attorney, Jeffrey N. Nunez, Trial Attorney, Ryan O. McMonagle, Trial Attorney, Emily K. Miller, Trial Attorney, for defendant. OPINION BRUGGINK, Judge. This is a consolidated case of actions brought by Dillon Trust Company LLC, as trustee for three Dillon family trusts (“Trust 709204,” “Trust 709210,” and “Trust 8545”). 1 Plaintiffs seek in these actions a refund of the taxes, penalties, and interest 1 Plaintiffs are three of the nine original Dillon family trusts (“Original Trusts”) against which the IRS asserted transferee liabilities under I.R.C. § 6901 (2018). The other six Original Trusts were terminated by 2012 and assets distributed to 1 that the Internal Revenue Service (“IRS”) collected pursuant to its determination that plaintiffs were liable under I.R.C. § 6901 (2018) as transferees of Humboldt Shelby Holding Corporation (“HSHC”). 2 Plaintiffs raise several arguments in these consolidated refund suits. Most importantly, plaintiffs assert that they are entitled to a refund of all taxes, penalties, and interest paid because they are not liable as transferees under § 6901. Even if they were liable as transferees, however, plaintiffs contend they are still entitled to certain refunds. Specifically, plaintiffs argue that their transferee liabilities cannot include HSHC’s gross valuation misstatement penalty, because they lacked knowledge of HSHC’s plan to carry out the tax shelter scheme that formed the basis of the I.R.C. § 6662 penalty. Plaintiffs also argue that underpayment interest on HSHC’s tax deficiency should not have accrued beyond May 8, 2015, the date when the IRS posted plaintiffs’ I.R.C. § 6603 deposits. (As will be discussed below, § 6603(b) provides for the suspension of underpayment interest from the date a deposit is made, “to the extent such deposit is used by the Secretary to pay tax.”) It is this last interest-related claim which is the subject of defendant’s pending dispositive motion. With trial set for January 2023, defendant has moved for partial dismissal for lack of subjection matter jurisdiction, or in the alternative, for partial summary judgment, 3 solely with respect to plaintiffs’ interest-related claim. For this claim, plaintiffs argue that § 6603 bars the continued running of underpayment interest when taxpayers make deposits and later request that the IRS use those deposits for Successor Trusts. The parties agree that the liabilities of the terminated Original Trusts and their Successor Trusts will be determined as if they were also parties to this action. Appendix to Plaintiffs’ Response (“App”) 315. The Original and Successor Trusts together will be referred to as the Dillon Family Trusts. 2 Plaintiffs filed separate complaints in December 2017, and defendant answered each in March 2018. The three cases were consolidated in August 2018. 3 Although defendant has moved for partial dismissal under both RCFC 12(b)(1) and 12(b)(6), a 12(b)(6) motion for failure to state a claim is inappropriate when the court is presented with matters outside the pleading and the court has not excluded them. See RCFC 12(d) (“If, on a motion under RCFC 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under RCFC 56.”). Because plaintiffs have presented matters outside the pleadings, we consider this motion to be for partial dismissal for lack of subject matter jurisdiction, or in the alternative, for partial summary judgment. 2 tax payments. Plaintiffs thus seek a refund of the underpayment interest that they paid for the period after they made their § 6603 deposits, alleging that IRS’s collection of interest violated § 6603. Defendant, however, seeks dismissal of this claim on the ground that the United States has not waived sovereign immunity for the relief plaintiffs seek. Defendant further argues that plaintiffs are not entitled to a refund as a matter of law, because the IRS returned their deposits without using them as payments for tax and § 6603 mandates suspension of interest only when the IRS uses a deposit for tax payment. Defendant filed its motion on October 6, 2022, and plaintiffs filed their response on October 21, 2022. Oral argument was heard on November 2, 2022. For the foregoing reasons, we DENY the motion for partial dismissal for lack of subject matter jurisdiction and GRANT the motion for partial summary judgment. BACKGROUND 4 I. Notice of Potential Transferee Liabilities and Making of § 6603 Deposits By the end of August 2014, HSHC was subject to a federal income tax deficiency of $25,617,887 and a gross valuation misstatement penalty of $10,247,155, plus interest, which remained unpaid. 5 Stip. ¶ 89. In letters dated November 20, 2014, the IRS notified each of the nine original Dillon family trusts (“Original Trusts”) that they might be held liable as transferees under § 6901 for HSHC’s unpaid liabilities. Appendix to Plaintiffs’ Response (“App”) 1-86. Acting on behalf of all Dillon Family Trusts, Dillon Trust Company informed the IRS that six of the Original Trusts had terminated and provided a list of Successor Trusts that 4 The facts are taken as alleged from the following: (1) plaintiffs’ complaints (“Compl. 709204,” “Compl. 709210,” “Compl. 8545”); (2) the complaint filed in Dillon Tr. Co. LLC v. Koskinen, No. 1:17-CV-01571 (D. Colo. June 27, 2017) (“Mand. Compl.”); (3) the parties’ stipulation of facts (“Stip.”); (4) plaintiffs’ pretrial memorandum of fact and law (“Mem.”); (5) the appendix to plaintiffs’ response to the pending motion (“App.”). 5 The IRS first issued a statutory notice of deficiency to HSHC on August 14, 2007, having determined the deficiency and penalty as stated for the tax year ending on November 30, 2003. A Tax Court proceeding followed in which HSHC contested its liability, and the Tax Court upheld the Commissioner’s decision. See Humboldt Shelby Holding Corp., v. Comm’r, T.C. Memo, 2014-47 (2014), aff’d, Humboldt Shelby Holding Corp. & Subsidiaries v. Comm’r, 606 Fed. Appx. 20 (2d Cir. 2015). 3 would be liable for any assessments made against the terminated trusts. See App. 95. On May 4, 2015, while the IRS examination was still ongoing, Dillon Trust Company sent the IRS a single check for $71,741,583.28, which was marked as a “deposit.” See App. 98. The letter enclosed with the check reiterated that the check is “designated a deposit and is not intended as a payment of tax.” Id. at 95 The stated purpose in “enclosing a deposit as provided under IRC Section 6603 and Rev. Proc. 2005-18” was to “stop the accrual of interest” on HSHC’s underlying liabilities in the event that the Original Trusts were held liable as transferees. Id. Given the Successor Trusts’ assumption of liabilities for the terminated Original Trusts, Dillon Trust Company intended the $71.7 million to be posted as separate deposits for thirty different taxpayer accounts (two Original and twenty- eight Successor Trusts) to cover each of their potential liabilities. The same letter dated May 4, 2015, therefore instructed the IRS to distribute the $71.7 million according to an attached allocation schedule. App. 95, 97. According to the deposition testimony of IRS Agent Timothy Stern, however, the $71.7 million in deposit was ultimately “posted to the general ledger account and not the [individual] taxpayer’s account [for each trust]” on May 8, 2015. See id. at 324; Compl. 709204 ¶ 82. II. Requesting Use of § 6603 Deposits as Payments for Transferee Liabilities On October 25, 2016, the IRS issued statutory notices of liability to each Original Trust, whereby each trust was assessed with a portion of HSHC’s income tax deficiency, penalty, and underpayment interest that was still running. See App. 157-160. For terminated trusts, notices were issued to the Original Trust rather than its Successor Trusts. See id. HSHC’s underlying liabilities totaled $68,511,826.68 by then, $32,646,784.68 of which was in interest accrued as of October 17, 2016. Id. at 166. In addition to filing protests seeking a hearing with IRS Appeals, Dillon Trust Company requested on behalf of all Dillon Family Trusts that the IRS use portions of the § 6603 deposits as payments for some of the assessed liabilities. See id. at 207. Relying on the allocation schedule previously provided to the IRS, Dillon Trust Company requested in writing on January 20, 2017, that: (1) $19,707,494 be paid for Trust 8454, taken from four Successor Trusts’ deposits; (2) $248,655 be paid for Trust 709204, taken from a Successor Trust’s deposit as well as its own; (3) $249,655 be paid for Trust 709210, taken from a Successor Trust’s deposit as well as its own. Id. at 208. The letter also clarified that the “remaining amount of the Dillon deposit, $52,168,338 should remain as a deposit.” Id. at 209. 4 The IRS, however, had not applied any of the deposits as payments for the Original Trusts’ liabilities by March 2017. See App. 211. Upon Dillon Trust Company’s query, IRS Agent Timothy Stern addressed the discrepancies between the trusts that owed the liabilities and the trusts making the deposits, and explained orally that “the Service’s procedures do not authorize a person to direct the Service to apply a deposit to pay another person’s liability.” See id. at 218. He also advised Dillon Trust Company to make a request in writing for the return of the deposits so that plaintiffs could make payments with the returned money. See id.; Mand. Compl. ¶ 31. III. Requesting Return of § 6603 Deposits On March 16, 2017, Dillon Trust Company requested in writing that the IRS return $19,770,229.68 of deposits, which represented the sum of just four Successor Trusts’ deposits. App. 218. Dillon Trust Company also filed an IRS Form 911 on April 6, 2017, seeking the assistance of the Taxpayer Advocate for the immediate return of those deposits and stay of any collection action. Mand. Compl. ¶ 35; see also App. 245. By the end of May 2017, the IRS had not returned the requested deposits. It notified plaintiffs on May 29, 2017, however, that deposits for Trust 709204 and Trust 709210 had been applied as payments for their respective liabilities as of May 13, 2017—but no other deposits were applied as payments. See Compl. 709204 ¶ 63; Compl. 709210 ¶ 60; App. 245. Despite its letter on January 20, 2017, that had requested such use of the deposits for payments, Dillon Trust Company considered the IRS’s use as “erroneous[]” at this time, because the 911 form it filed “should have stayed all collection action.” App. 245; see also Mand. Compl. ¶ 38. Faced with the “threat of collections actions,” Pls’ Resp. 8, Dillon Trust Company filed a mandamus action against the IRS on June 27, 2017, seeking the return of the four Successor Trusts’ deposits it had already requested. Mand. Compl. ¶ 11. On July 31, 2017, the mandamus action was voluntarily dismissed without prejudice after the IRS agreed to return the deposits. Four days later, on August 4, 2017, the IRS returned the requested $19.8 million in deposits. See App. 279. Then, on August 28, 2017, Dillon Trust Company requested in writing that the IRS return the remaining deposits of $51,536,779.28. 6 Id. The IRS returned the remaining deposits on October 6, 2017, in addition to paying $1,056,892.98 in interest. See 6 Plaintiffs’ calculations of the remaining deposits did not include the two deposits of $217,287.16 that the IRS had already used as payments for Trust 709204 and 709210. See App. 280. 5 Pls’ Resp. 9; Mem. 39. IV. Payment of Transferee Liabilities, Including Underpayment Interest Once the requested deposits were returned, Dillon Trust Company paid in full for transferee liabilities assessed against the Original Trusts. Over $18 million was paid on August 9, 2017, and over $ 61 million was paid on October 13, 2017, with an additional $4 million paid later. See App. 263, 292, 294. Because the IRS did not stop underpayment interest on HSHC’s underlying liabilities as of May 8, 2015, the date plaintiffs’ § 6603 deposits were posted, plaintiffs allege that they paid $11,306,496 in interest that they did not owe. See Mem. 40. Allowing for the interest the IRS paid on the returned deposits, plaintiffs now seek the difference between the $11 million of excess interest they paid and the $1 million of statutory deposit interest they received. Pls’ Resp. 14. DISCUSSION A. Partial Dismissal for Lack of Subject Matter Jurisdiction Defendant argues that plaintiffs’ interest claim must be dismissed under RCFC 12(b)(1) because this court’s jurisdiction depends wholly upon the extent to which the United States has waived its sovereign immunity to suit, and no such waiver exists here. Defendant cites Schortmann v. United States, 82 Fed. Cl. 1 (2008) and argues that while “I.R.C. § 6611 waives the United States’ sovereign immunity to authorize the allowance of interest on tax overpayments,” § 6611 does not “authorize[], let alone mandate[], the conversion of a deposit into a payment at the taxpayer’s request.” Mot. To Dismiss 7. Plaintiffs respond that this court has subject matter jurisdiction because I.R.C. § 7422 waives sovereign immunity for tax refund suits. See I.R.C. § 7422(a) (requiring a claim of refund to be filed with the Secretary before instituting a suit in any court “for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected . . . or any sum alleged to have been excessive or in any manner wrongfully collected”); I.R.C. § 6601(e)(1) (providing that any reference to “tax” under the I.R.C. “shall be deemed also to refer to interest imposed by this section on such tax”). Plaintiffs further cite 28 U.S.C. § 1491 (2018) as granting this court jurisdiction over “any claim against the United States founded either upon . . . any Act of Congress.” It is well-established that courts lack subject matter jurisdiction in suits against the federal government unless the United States has waived sovereign 6 immunity. United States v. Testan, 424 U.S. 392, 399 (1976) (“United States, as sovereign, is immune from suit save as it consents to be sued . . . and the terms of its consent to be sued in any court define that court’s jurisdiction to entertain the suit.”) (internal quotations omitted). The “no-interest” rule addressed in Schortmann is a specific assertion of sovereign immunity, which recognizes that the United States is immune from suits that seek an interest award as part of damages unless there is express congressional authorization. Schortmann, 82 Fed. Cl. at 5. The no- interest rule does not apply here, however, because seeking interest on overpayment—as was the case in Schortmann—is not the same as alleging that interest charged by the government was improper. See, e.g., Libr. of Cong. v. Shaw, 478 U.S. 310, 314 (1986) (explaining that the “requirement of a separate waiver [for an interest award] reflects the historical view that interest is an element of damages separate from damages on the substantive claim”); Marathon Oil Co. v. United States, 374 F.3d 1123, 1125 (Fed. Cir. 2004) (“We hold that the Oil Companies have not demonstrated a waiver of sovereign immunity for post-judgment interest on final judgments against the United States . . . .”). The inapplicability of the no-interest rule, however, does not remove other hurdles to subject matter jurisdiction. For this court, which derives its jurisdiction from the Tucker Act, these hurdles principally involve whether there is a source of law outside the Tucker Act that creates the right to payment from the federal government. Fisher v. United States, 402 F.3d 1167, 1173 (Fed. Cir. 2005) (“[T]he absence of a money-mandating source [is] fatal to the court’s jurisdiction under the Tucker Act.”). A separate source of law is necessary because although the Tucker Act waives sovereign immunity, it does not create any substantive right enforceable against the United States for monetary relief. United States v. Navajo Nation, 556 U.S. 287, 290 (2009); see 28 U.S.C. § 1491(a)(1) (“The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States . . . .”). Our subject matter jurisdiction therefore turns on how “other sources of law (e.g. statutes or contracts)” provide the substantive basis for the monetary relief that parties seek. See Navajo Nation, 556 U.S. at 290. Where that other source of law is not a contract with the government, two types of claims fall within the jurisdictional provision of the Tucker Act: a claim for illegal exaction or a claim under a money-mandating statute. See Boeing Co. v. United States, 968 F.3d 1371, 1382 (Fed. Cir. 2020). The distinction between the two lies not only in the necessary facts but also the underlying legal theory, to the extent that they are considered “flip side[s]” of each other. Aerolineas Argentinas v. United States, 77 F.3d 1564, 1579 (Fed. Cir. 1996) (Nies, J., concurring). In an illegal exaction claim, the plaintiff has already “paid money over to the 7 Government, directly or in effect” and seeks the “return of all or part of that sum.” Eastport S.S. Corp., v. United States, 372 F.2d 1002, 1007 (Ct. Cl. 1967)); see also Testan, 424 U.S. at 400 (endorsing the Eastport S.S. Corp. formulation of different Tucker Act claims). The plaintiff alleges, in other words, that “the value sued for was improperly paid, exacted or taken from the claimant in contravention of the Constitution, a statute, or a regulation.” Eastport, 372 F.2d at 1007. In a money- mandating statute claim, on the other hand, “money has not been paid but the plaintiff asserts that he is nevertheless entitled to a payment from the treasury” because “the particular provision of law relied upon grants the claimant, expressly or by implication, a right to be paid a certain sum.” Id. For subject matter jurisdiction to exist over a money-mandating statute claim, the statute that is relied upon must be amenable to “fair interpretation” as mandating compensation by the federal government. See United States v. White Mountain Apache Tribe, 537 U.S. 465, 472 (2003). It was thus long assumed that an illegal exaction claimant must also “demonstrate that the statute or provision causing the exaction itself provides, either expressly or by necessary implication, that the remedy for its violation entails a return of money unlawfully exacted.” Norman v. United States, 429 F.3d 1081, 1095 (Fed. Cir. 2005) (quoting Cyprus Amax Coal Co. v. United States, 205 F.3d 1369, 1373 (Fed. Cir. 2000)) (internal quotations omitted). The Federal Circuit has clarified in Boeing Company, however, that the “money-mandating” jurisdictional requirement does not apply to illegal exaction claims, because such a requirement would erase the distinction between the two types of claims. Boeing Co., 968 F.3d at 1384 (“The [Norman] court’s statement thus was not addressing an illegal exaction of the sort Boeing alleges . . . . Boeing’s claim falls under the Eastport S.S. category for which the ‘money-mandating’ standard need not be met.”). Thus, for subject matter jurisdiction to exist over an illegal exaction claim, all that is required is that “a party that has paid money over to the government and seeks its return . . . make a non-frivolous allegation that the government, in obtaining the money, has violated the Constitution, a statute, or a regulation.” Id. at 1383. The non-frivolous allegation standard is a relatively low standard. The illegal exaction claim need only “exceed a threshold that has been equated with such concepts as essentially fictitious, wholly insubstantial, obviously frivolous, and obviously without merit.” Boeing Co., 968 F.3d at 1383 (quoting Shapiro v. McManus, 577 U.S. 39, 45-46 (2015)) (internal quotations omitted). Moreover, adverbs such as “wholly” and “obviously” in this context are “no mere throwaways” and have “cogent legal significance.” Shapiro, 577 U.S. 39 at 46. Nor does this inquiry require the court to determine whether the complaint states “a nonfrivolous claim on the merits.” See Jan’s Helicopter Serv., Inc., v. Fed. Aviation Admin., 525 F.3d 1299, 1309 (Fed. Cir. 2008) (emphasis added); see Aerolineas Argentinas, 77 F.3d at 1574 (explaining that plaintiffs’ failure to “establish that the exaction was 8 contrary to law” does not “deprive the court of jurisdiction” because such a finding is an “adjudication on the merits”). As a threshold matter, plaintiffs’ claim here is better characterized as an illegal exaction claim than a money-mandating statute claim. An illegal exaction claim presupposes an exaction, which exists in this case. The IRS has already collected underpayment interest from plaintiffs for the period at issue. Neither does the possibility of reading the refund suit provision of the I.R.C. as a money- mandating statute change the essential nature of plaintiffs’ claim that the exaction was illegal. 7 Indeed, because I.R.C. § 7422(a) contemplates refund suits only for tax alleged to have been “erroneously or illegally assessed or collected,” § 7422 operates more like a procedural statute that allows refund suits when plaintiffs can establish erroneous or illegal collection under another provision of law. In other words, refund suits such as the plaintiffs’ necessarily require establishing illegal exaction. Taking the allegations stated in the complaint as true, see Aerolineas 77 F.3d at 1572, we hold that plaintiffs have met the threshold for making a non-frivolous allegation of an illegal exaction claim. Here, plaintiffs allege that over $71 million of deposits were posted on May 8, 2015, that the IRS held them until their two-part return in August and October 2017, and that the IRS violated § 6603 by failing to suspend underpayment interest as of the date the deposits were posted, so that plaintiffs paid over $11 million in interest that they did not owe. Such allegations are not “essentially fictitious,” “wholly insubstantial,” “obviously frivolous,” and “obviously without merit.” We therefore have subject matter jurisdiction over plaintiffs’ claim, and we deny defendant’s motion to dismiss. B. Partial Summary Judgment Defendant moves in the alternative for partial summary judgment, arguing that the material facts are undisputed and that plaintiffs are not entitled to a refund of their interest payment as a matter of law. Defendant maintains that § 6603 mandates interest suspension only when the IRS uses a deposit for payment of tax and that plaintiffs cannot benefit from such a suspension without retroactive treatment of their deposits as having been applied as tax payments—a power that defendant argues this court lacks. 7 Nonetheless, because I.R.C. § 7422 may fairly be read as a money-mandating statute, this court would have subject matter jurisdiction under the Tucker Act even if we were to treat plaintiffs’ claim as a money-mandating statute claim rather than an illegal exaction claim. 9 Plaintiffs respond that defendant, first of all, mischaracterizes their claim as requiring retroactive treatment of deposits as payments of tax. What they seek, rather, is a determination that the IRS improperly collected interest while the deposit was in its possession. To complete their argument, plaintiffs further contend that the IRS refused without legal grounds to use the deposits for tax payment. Although plaintiffs’ response points out many facts not included in defendant’s statement of the undisputed material facts, defendant asserts that any dispute is over the characterization of the facts or their materiality, rather than the facts in themselves. Because materiality refers to whether a fact “might affect the outcome of the suit under the governing law,” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), we turn to the governing law to determine which facts are material and whether defendant is entitled to judgment as a matter of law under the undisputed material facts. See RCFC 56(a). To begin, the issue here is not whether this court may retroactively treat a deposit the IRS returned as having been used for a payment of tax. Rather, the proper question is whether the IRS violated the law by exacting underpayment interest when it was forbidden from doing so. Without a finding of illegality on the part of the IRS, plaintiffs cannot succeed on the merits of their illegal exaction claim. See Aerolineas, 77 F.3d at 1574 (explaining that an adjudication on the merits for an illegal exaction claim requires considering “whether the authorization on which the [agency] relies was misinterpreted, misapplied, or invalid”); I.R.C. § 7422(a) (referring to civil actions for refunds where taxes were “illegally assessed or collected” or any sum was “in any manner wrongfully collected”); Illegal, BLACK’S LAW DICTIONARY (11th ed., 2019) (defining “illegal” as “[f]orbidden by law”). We thus address each provision of law that might establish the necessary illegality. As a general matter, the IRS has the statutory authority to collect underpayment interest under I.R.C. § 6601(a). See I.R.C. § 6601(a) (mandating underpayment interest “[i]f any amount of tax imposed by this title . . . is not paid on or before the last date prescribed for payment”). The rate of interest is established by § 6621, and such interest must be paid from the last date prescribed for the payment of tax to the date actually paid. I.R.C. § 6601(a). The IRS, however, may not collect underpayment interest in circumstances described under I.R.C. § 6603, which has several relevant subsections. First, §6603(a) permits a taxpayer to make a “cash deposit” with the IRS for any tax that has “not been assessed at the time of the deposit.” Once a taxpayer makes a deposit as authorized by § 6603(a), underpayment interest is effectively suspended from the date of the deposit “to the extent such deposit is used by the Secretary to pay tax.” § 6603(b) (providing that “the tax shall be treated as paid when the deposit is made”). To the extent the IRS does not use a deposit as a tax payment, § 6603(c) 10 requires the IRS to return any amount of the deposit that the taxpayer requests in writing. § 6603(c) (“Except in a case where the Secretary determines that collection of tax is in jeopardy, the Secretary shall return to the taxpayer any amount of the deposit (to the extent not used for a payment of tax) which the taxpayer requests in writing.”); see also Rev. Proc. 2005-18 § 6.91 (“A deposit made pursuant to section 6603 is not subject to a claim for credit or refund as an overpayment until the deposit is applied by the Service as payment of an assessed tax of the taxpayer. A taxpayer may request the return of all or part of a deposit at any time before the Service has used the deposit for payment of a tax.”). Certain logical conclusions follow from the plain language of these statutory provisions. First, a deposit is not a tax payment until and unless the IRS uses the deposit for a payment—these provisions would make no sense if a deposit was in fact the functional equivalent of a tax payment, regardless of whether the IRS used it for such a purpose. Plaintiffs’ argument that they “cannot have been delinquent for the period of time that they had $71 million in Cash Deposits with the IRS against a $68 million liability,” Pls’ Resp. 16, is thus untenable. Second, if the IRS does not use any portion of a deposit to pay tax, no interest-suspension benefit is triggered under § 6603(b). Indeed, § 6603(b) makes clear that it is only “[t]o the extent such deposit is used by the Secretary to pay tax” that underpayment interest must be suspended. A taxpayer therefore has no statutory entitlement to a suspension of underpayment interest if the IRS does not actually use a deposit for a payment of tax. Third, § 6603 does not require the use of deposits as tax payments, whether as a result of the IRS making an assessment or a taxpayer requesting the deposit to be used. Whereas other subsections of § 6603 mandate a certain outcome through the use of “shall,” § 6603(a) is pointedly permissive: “A taxpayer may make a cash deposit with the Secretary which may be used by the Secretary to pay any tax imposed under subtitle A or B or chapter 41, 42, 43, or 44 which has not been assessed at the time of the deposit.” (emphasis added). The decision to use a deposit for a payment of tax is thus subject to IRS discretion, and the statute does not limit such discretion with conditions or exceptions. There is, for instance, no provision comparable to §6603(c) that requires the IRS to use a deposit as a tax payment upon the taxpayer’s request in writing. At best, Revenue Procedure 2005-18 § 4.02 provides for § 6603 deposits to be “posted to the taxpayer’s account as payment of tax upon the expiration of the 90 or 150-day period” after a taxpayer has received a notice of deficiency. This procedure, however, cannot establish illegality on the part of the IRS for not using the deposits as payments of tax in this case. Above all, IRS revenue procedures do not “confer substantive rights on taxpayers.” Giambrone v. Comm’r, T.C. Memo. 2020-145, *9 (2020); see also Fed. Nat’l Mortg. Ass’n v. United States, 379 F.3d 11 1303, 1308 (Fed. Cir. 2004) (holding that the Revenue Procedure at issue was “of the nature of an enforcement guideline—not a legislative-like interpretation—and thus ineligible for Chevron treatment”); Est. of Shapiro v. Comm’r, 111 F.3d 1010, 1017 (2d Cir. 1997) (“[T]he failure to comply with [a] Revenue [Procedure] . . . is not dispositive, as IRS procedures are mere guidelines without force of law.”) (internal quotations omitted). Even if IRS procedures could confer substantive rights, this procedure does not in any event contemplate a taxpayer’s request as obligating the IRS to use a deposit for tax payment. In fact, it provides only for a taxpayer’s ability to request that a deposit continue to be a deposit: the application of deposits as payments is automatic at the end of the 90 or 150-day period “unless the taxpayer . . . requests in writing before the expiration of that period that the deposit continue to be treated as a deposit . . . .” Rev. Proc. 2005-18 § 4.02. As for IRS’s failure to automatically apply the Successor Trusts’ deposits to the Original Trusts’ liabilities in this case, the IRS explained to Dillon Trust Company that it could only use the deposits as tax payments when the taxpayer who owes the liability made the deposit. See I.R.S. Off. of Chief Couns. Mem. 20171801F (May 5, 2017) (“While a person making a deposit may direct the Service to use the deposit as payment of other of his liabilities, Rev. Proc. 2005-18 does not authorize a person to direct the Service to apply a deposit to pay another person’s liability.”). The IRS did not, at any rate, violate a provision of law that mandated the use of plaintiffs’ deposits for tax payments. Plaintiffs find fault with the IRS, nonetheless, for the inevitable discrepancies in this case between the taxpayers who made the deposits and the taxpayers who owed the liabilities. Plaintiffs assert that if the IRS had issued the statutory notices of liabilities to the Successor Trusts instead of the terminated Original Trusts, there would have been no administrative impediment to applying the deposits as payments. Pls’ Resp. 6. They characterize the failure to do so as the “first mistake” the IRS made, once again citing internal guidance that directs the IRS to issue notices of deficiency for a terminated entity to the entity’s successor in interest. Id. at 4; see also I.R.S. Field Serv. Advisory 200036022, 2000 WL 33119638. Plaintiffs then argue that this “first mistake” led directly to the IRS’s “second mistake” of refusing to use the deposits as tax payments. Pls’ Resp. 6. Such an argument involving a series of “mistakes” fails to show, however, that the IRS violated the law in collecting underpayment interest—especially since the Field Service Advisory plaintiffs rely on states that it is “not to be cited as precedent.” See also Chai v. Comm’r, 851 F.3d 190, 220 (2d Cir. 2017) (“Of course, the IRS’s internal guidance is neither legally binding nor entitled to more deference than its persuasive value.”); United States v. Mead Corp., 533 U.S. 218, 234 (holding that Customs classification rulings made without notice-and-comment procedures are comparable to “interpretations contained in policy statements, 12 agency manuals, and enforcement guidelines” that lack “force of law”). If anything, plaintiffs’ argument effectively morphs into a claim for the abatement of interest attributable to unreasonable errors and delays by the IRS, a claim over which this court lacks subject matter jurisdiction. See I.R.C. § 6404(e); Hinck v. United States, 550 U.S. 501, 503 (2007) (holding that the Tax Court provides the exclusive forum for judicial review of a failure to abate interest under § 6404(e)(1)). Even so, plaintiffs find it unacceptable that the IRS could be vested with discretion “so broad as to allow [it] to reap a windfall from its own bureaucratic incompetence or intransigence or both.” Pls’ Resp. 17. Yet Congress can and does sometimes vest agencies with discretion so broad that some agency decisions are considered “committed to discretion by law” and not even judicially reviewable. 5 U.S.C. § 701(a)(2) (2018). Where judicial review is not available, courts may not set aside the discretionary decisions as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2); Dep’t of Commerce v. New York, 139 S. Ct. 2551, 2567 (2019). Although plaintiffs do not bring their claim here under the Administrative Procedure Act (“APA”), 8 case law involving “discretion by law” under § 701(a)(2) is instructive for showing the kind of statutory language necessary to limit agency discretion. To be sure, courts interpret “agency discretion by law” narrowly, “restricting it to those rare circumstances where the relevant statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion.” Dep’t of Commerce, 139 S. Ct. at 2568 (quoting Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 139 S. Ct. 361 370 (2018)) (internal quotations omitted). For instance, the use of the word “may” is not sufficient to commit an agency’s decision to discretion by law. See Weyerhaeuser Co., 139 S. Ct. at 371; In re Vivint, Inc., 14 F.4th 1342, 1351 (Fed. Cir. 2021) (“But permissive language, alone, does not render a question committed to agency discretion under 5 U.S.C. § 701(a)(2).”). If a statute—whether in the same subsection or in others—sets forth relevant factors to guide the agency in the exercise of its discretion, the agency’s discretion is limited even if permissive language is used. See In re Vivint, 14 F.4th at 1351 (rejecting agency discretion by law where the relevant statute provides that the agency “may take into account whether . . . the same or substantially the same prior art or arguments previously were presented”); Weyerhaeuser Co., 139 S. Ct. at 371 (rejecting agency discretion by law because the Endangered Species Act requires the Secretary to “consider the economic and other impacts of designation when making his [discretionary] exclusion decisions”). Here, however, § 6603 does not set forth any factors that constrain IRS discretion on whether to use a taxpayer’s 8 We therefore need not consider whether the IRS’s decision is even judicially reviewable. 13 deposit for payment of tax. 9 The same is true of IRS discretion in the time it takes to return a deposit upon the taxpayer’s request. At oral argument, plaintiffs contended that it was unlawful for the IRS to collect interest while it delayed the return of the deposits they requested. See Oral Arg. Tr. 26. According to plaintiffs, if the IRS has returned the deposits immediately when the request was made in March 2017, they could have paid their liabilities earlier and thus stopped interest sooner than August 2017. See id. Even if we were to assume that chain of event, however, this court could not find the IRS “delay” of five months to have violated the law. Although § 6603(c) makes it nondiscretionary for the IRS to return any deposit when a taxpayer makes a request in writing before the deposit is used for tax payment, it does not prescribe a timeline for the IRS in returning the deposits. For instance, § 6603(c) does not enumerate the number of days or months in which the IRS must return the deposits, nor does it use time-sensitive phrases such as “immediately” or “within a reasonable time.” See § 6603(c) (“Except in a case where the Secretary determines that collection of tax is in jeopardy, the Secretary shall return to the taxpayer any amount of the deposit (to the extent not used for a payment of tax) which the taxpayer requests in writing.”). This court therefore could not determine when the IRS should have returned the deposits under the law—in thirty days, sixty days, or ninety days?—such that any delay past that point would make the collection of underpayment interest illegal. Against this backdrop, no provision of law allows for a finding of illegality necessary to support plaintiffs’ illegal exaction claim. 10 For the IRS collection of underpayment interest here to have violated the law, one of two things must have been true: either the I.R.C. mandates applying a deposit as a tax payment when the taxpayer makes such a request (thus triggering interest suspension under § 6603(b)), or the I.R.C. requires suspension of interest when a § 6603 deposit is made, even if the Secretary does not use the deposit for a payment of tax. The plain language of the I.R.C. does not allow for either result. 9 Plaintiffs also cite no Treasury Regulation that limits IRS discretion in this regard. 10 The record leaves unclear whether the IRS suspended underpayment interest to the extent it applied the two separate deposits of $217,287.16 as payments for Trust 709204 and 709210’s liabilities in May 2017. Because these deposits were used for tax payments, the IRS would have violated § 6603(b) if it did not suspend interest for such amounts from the date the deposits were made. The overwhelming majority of plaintiffs’ deposits were not applied as payments, however, and where those deposits are concerned, we hold that the IRS collection of interest for the period at issue did not violate the law. 14 We thus hold that defendant is entitled to judgment as a matter of law because, under the undisputed material facts, the IRS’s collection of interest for the period at issue did not violate the law. CONCLUSION For the foregoing reasons, defendant’s motion for partial dismissal for lack of subject matter jurisdiction is DENIED while the motion for partial summary judgment is GRANTED. s/Eric G. Bruggink Eric G. Bruggink Senior Judge 15	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483676/	Filed 11/14/22 Seidl v. Cohesity CA6 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT RANDALL SEIDL, H048981 (Santa Clara County Cross-complainant and Respondent, Super. Ct. No. 19CV348133) v. COHESITY, INC., Cross-defendant and Appellant. Appellant Cohesity, Inc. (Cohesity) sent a letter to respondent Randall Seidl demanding that Seidl remit to Cohesity his profit on Cohesity stock that he had sold notwithstanding Cohesity’s prior right to repurchase it. Seidl did not comply with this demand. Cohesity then sued Seidl for breach of contract and related causes of action. Seidl responded with a cross-complaint against Cohesity for breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief. Cohesity moved to strike Seidl’s breach of contract and breach of the implied covenant causes of action under Code of Civil Procedure section 425.16 (anti-SLAPP or section 425.16 motion).1 The trial court found that Seidl’s causes of action did not arise from protected activity and denied Cohesity’s motion. 1 Unspecified statutory references are to the Code of Civil Procedure. On appeal, Cohesity contends that Seidl’s two causes of action are based solely on protected activity, namely, Cohesity’s demand letter and its lawsuit against Seidl. We agree. We further decide that Seidl’s causes of action lack minimal merit because they are barred by the litigation privilege. Accordingly, we reverse the trial court’s order and remand with directions to grant Cohesity’s anti-SLAPP motion and to award Cohesity its attorney fees and costs. I. FACTS AND PROCEDURAL BACKGROUND Cohesity is an enterprise software company. In July 2015, Seidl began serving on Cohesity’s advisory board. Cohesity granted Seidl stock options for 70,274 shares of Cohesity stock in return for this work. The vesting schedule of Seidl’s stock options was tied to his continued work on the advisory board. The agreement between Cohesity and Seidl provided that, beginning in July 2015, 1/36 of the shares would vest each month during Seidl’s service on Cohesity’s advisory board. The agreement permitted Seidl to exercise the options (i.e., purchase) prior to their vesting. Under the agreement, if Seidl were terminated, Cohesity had the right to repurchase any unvested shares from him. Upon his termination, Cohesity’s repurchase of such shares was automatic unless Cohesity specifically notified Seidl it had elected not to repurchase the unvested shares. The agreement provided, “The Company shall be deemed to have exercised its Repurchase Right automatically for all Subject Shares as of the Termination Date, unless within ninety (90) days thereafter, the Company notifies the holder of the Subject Shares pursuant to Section 16 that it will not exercise its Repurchase Rights as to some or all of the Subject Shares.” In September 2015, Seidl exercised all of his options, including the unvested ones. His service on Cohesity’s advisory board was terminated in June 2016 after only 11 months. Many of his Cohesity shares had not yet vested. In 2018, Seidl sold most of his Cohesity shares, including most of the unvested ones, for a net gain of $654,248. 2 On February 21, 2019, Timothy Robbins, Cohesity’s general counsel, sent a letter to Seidl entitled “Repurchase of Unvested Shares.” The letter began: “I am writing you concerning an error related to your exercise and subsequent sale of unvested shares in [Cohesity] and to request your cooperation in correcting the error. [¶] On September 21, 2015, you purchased 70,274 shares (the ‘Shares’) of Common Stock of Cohesity pursuant to a stock option agreement dated August 18, 2015 (the ‘Option Agreement’). The Shares are subject to repurchase by the Company, which repurchase right lapses in accordance with your continuous service to the Company. [¶] . . . The Option Agreement provides that unvested shares are to be repurchased automatically unless the Company notifies you to the contrary, which it did not. [¶] On October 26, 2018, you purported to sell a total of 66,760 shares of common stock (comprised of all of your Vested Shares plus 45,288 Unvested Shares) via a tender offer, which contained an error that we believe should have been apparent to you at the time. The portion of the net proceeds that you received from your unwarranted sale of Unvested Shares equals $443,822.40. [¶] Because we cannot fully unwind your errant sale of Company stock, we are instead requesting that you promptly remit $405,268.82 (the net proceeds minus the contractual repurchase price) to Cohesity via enclosed wire instructions. Once received, Cohesity will send you amended tax forms. [¶] Prior to sending this letter, we researched the legalities of this matter and conclusively determined that Cohesity is entitled to this restitution that we are seeking, both as a matter of law and contract. Aside from the legalities, I am sure that you will also appreciate that your errant gain was not earned via service to Cohesity and does not truly belong to you. I am hopeful that we can get this resolved expeditiously and cooperatively and am thus sparing you from any legal demands at this time. Meanwhile, as I’m sure you’ll understand, we are reserving all rights and will take whatever actions are required to remediate this situation.” On March 5, 2019, Robbins sent an e-mail to Seidl asking him to confirm receipt of the February letter. Seidl did not respond. On March 27, Robbins sent another e-mail 3 to Seidl. This one read: “Please respond to the below email [attaching the prior letter and email] or I will be forced to escalate to our external legal advisors.” On March 29, 2019, without having responded to any of the communications from Robbins, Seidl filed an action against Cohesity in Massachusetts.2 In May 2019, Cohesity filed an action against Seidl in Santa Clara County seeking to recover $405,268.82, the amount that its February letter had asked Seidl to remit. Seidl filed a cross-complaint countering Cohesity’s claims. Seidl’s July 2020 cross- complaint alleged three causes of action: declaratory relief; breach of contract; and breach of the implied covenant of good faith and fair dealing. Seidl’s cross-complaint alleged that when he left the advisory board, Cohesity’s chief operating officer expressly waived Cohesity’s repurchase rights to the unvested shares. He also alleged that he had continued to assist Cohesity for two more years after he left its advisory board. Seidl alleged that Cohesity did not attempt to exercise its repurchase rights before he sold his shares in 2018. He alleged that, under the agreement, there was a 90-day deadline for Cohesity to repurchase unvested shares. Seidl’s breach of contract cause of action alleged that Cohesity had breached the contract “by, among other things, attempting to exercise its repurchase rights long after their lapse and attempting to recover funds from Seidl’s sale of Cohesity shares to which Cohesity is not entitled pursuant to the Option Agreement.” The breach of the implied covenant of good faith and fair dealing cause of action alleged that Cohesity had breached the implied covenant “by, among other things, telling Seidl ‘not to worry’ about his shares of Cohesity [when he left the advisory board], attempting to exercise rights which it did not have, attempting to claim entitlement to $405,268.82 in stock sale proceeds contrary to the parties’ agreement and the representations of its duly authorized 2 This action was later dismissed. 4 officers in order to secure a substantial and unwarranted economic benefit for itself at Seidl’s expense.” In August 2020, Cohesity filed a motion to strike Seidl’s breach of contract and breach of the implied covenant causes of action under section 425.16. Cohesity asserted that Seidl’s causes of action were “based on Cohesity sending him a demand letter requesting that he return those proceeds, and subsequently filing a lawsuit,” both of which were protected activity. Cohesity also maintained that Seidl’s causes of action lacked minimal merit because they were barred by the litigation privilege. 3 Cohesity’s motion was accompanied by a declaration from Robbins, who declared that Seidl had never responded to his letter or e-mails. In November 2020, Seidl filed an opposition to Cohesity’s motion to strike. He maintained that Robbins’s February 2019 letter, “attempting to exercise Cohesity’s repurchase right,” was the breach of contract and was not protected activity. Seidl also argued that his causes of action had merit and were not subject to the litigation privilege. Seidl submitted his own declaration in support of his opposition. He declared that, shortly after the June 2016 termination of his advisory board position, Cohesity’s chief operating officer “told me ‘don’t worry about the stock,’ or words to that effect, which I understood to mean that Cohesity was electing not to repurchase any of my shares and waiving its rights to do so.” The trial court denied Cohesity’s anti-SLAPP motion. The court decided that neither the breach of contract nor the breach of implied covenant cause of action “arise[s] from the filing of Cohesity’s complaint or the demand letter and subsequent communications by attorney Robbins. Instead, the gravamen of these claims is Cohesity’s attempt to exercise its repurchase rights in violation of the Option Agreement. Seidl alleges any such attempt constitutes a breach of contract as the time for exercising 3 Cohesity’s reply was consistent with its motion. 5 those rights has elapsed. That breach would exist independent of any action filed by Cohesity or demand letters by attorney Robbins proposing a threat of litigation. The mere fact that a demand letter may have triggered the filing of the cross-complaint does not mean these causes of action arise from such conduct.” The court did not address whether Seidl’s causes of action had merit. Cohesity timely filed a notice of appeal from the trial court’s denial of its anti- SLAPP motion. II. DISCUSSION A. Legal Framework “ ‘We review de novo the grant or denial of any anti-SLAPP motion. [Citation.] We exercise independent judgment in determining whether, based on our own review of the record, the challenged claims arise from protected activity.’ [Citation.] We consider the pleadings and declarations, accepting as true the evidence that favors the plaintiff and evaluating the defendant’s evidence ‘ “ ‘ “only to determine if it has defeated that submitted by the plaintiff as a matter of law.” ’ ” ’ ” (Laker v. Board of Trustees of California State University (2019) 32 Cal.App.5th 745, 759 (Laker).) “If a defendant brings a special motion under the anti-SLAPP statute to strike a cause of action, the trial court evaluates that motion using a two-step process: The first examines the nature of the conduct that underlies the plaintiff’s allegations to determine whether the conduct is protected by section 425.16; the second assesses the merits of the plaintiff’s claim. [Citation.] [¶] In the first step of the analysis, the trial court determines whether the cause of action ‘arises from’ an ‘ “ ‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue.’ ” ’ [Citation.] The first step of the anti-SLAPP analysis ‘turns on two subsidiary questions: (1) What conduct does the challenged cause of action “arise[] from”; and (2) is that conduct “protected activity” under the anti-SLAPP statute?’ ” (Laker, supra, 32 Cal.App.5th at pp. 759–760.) 6 “ ‘[A]rising from’ means ‘based on.’ ” (Laker, supra, 32 Cal.App.5th at p. 760.) Conduct is “ ‘protected activity’ ” if it falls within one of the categories set forth in section 425.16, subdivision (e). (Ibid.) Cohesity, as the moving party, bore the burden on the first prong: it was required to make a prima facie showing that Seidl’s causes of action arose from protected activity. (Ibid.) If Cohesity satisfied the first prong, the burden would shift to Seidl on the second prong. Seidl’s causes of action would be stricken unless he showed that they had “ ‘at least “minimal merit.” ’ ” (Ibid.) “ ‘[A] claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.’ [Citation.] To determine whether the speech constitutes the wrong itself or is merely evidence of a wrong, ‘in ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.’ ” (Laker, supra, 32 Cal.App.5th at p. 763.) B. First Prong: Did Seidl’s Causes of Action Arise From Protected Activity? Cohesity maintains that Seidl’s breach of contract and breach of the implied covenant of good faith and fair dealing causes of action were based on Cohesity’s letter and its lawsuit against Seidl, both of which were protected activity. Cohesity contends Seidl’s claims “necessarily depend on Cohesity’s demand that Seidl return his wrongfully obtained funds in Cohesity’s prelitigation correspondence and lawsuit.” Seidl, on the other hand, maintains that Cohesity’s letter was not protected activity and that his claims were not based on the letter or the lawsuit but on Cohesity’s “conduct in breaching the contract.” Seidl argues that his claims arose out of Cohesity’s “wrongful position” that it had a right to repurchase his unvested shares. We first address whether Cohesity’s February 2019 letter was protected activity. Seidl acknowledges that prelitigation communications may be protected activity. He 7 claims that this letter did not qualify as protected activity because it did not relate to litigation that was contemplated in good faith and under serious consideration. “Prelitigation communications may constitute protected activity, but only if those communications are ‘relate[d] to litigation that is contemplated in good faith and under serious consideration.’ [Citation.] Litigation is not ‘ “under [serious] consideration” ’ if it is only a ‘ “possibility.” ’ [Citation.] Statements made in connection with issues that later become subject to consideration or review in litigation may be protected under the anti-SLAPP statute, but only where such prelitigation statements were made in good faith anticipation of litigation under serious consideration at the time the statements were made.” (People ex rel. Allstate Ins. Co. v. Rubin (2021) 66 Cal.App.5th 493, 499.) “[P]ayment demands with vague references to future ‘ “legal remedies” ’ may not demonstrate that litigation was actually under serious consideration.” (Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.5th 924, 941.) The February 2019 letter conveyed Cohesity’s serious and good faith intent to pursue litigation if Seidl did not promptly remit the requested funds. The letter stated: “Prior to sending this letter, we researched the legalities of this matter and conclusively determined that Cohesity is entitled to this restitution that we are seeking, both as a matter of law and contract. . . . I am hopeful that we can get this resolved expeditiously and cooperatively and am thus sparing you from any legal demands at this time. Meanwhile, as I’m sure you’ll understand, we are reserving all rights and will take whatever actions are required to remediate this situation.” (Italics added.) Robbins’s declaration underscored Cohesity’s intent to bring legal action if the letter failed. “I contemplated that Cohesity may need to engage in litigation to recover the proceeds of Mr. Seidl’s sale of unvested option shares to which Cohesity was entitled, if Mr. Seidl were unresponsive or uncooperative. My reference to Cohesity being forced to escalate the matter to its external legal advisors in my March 27, 2019 email was 8 intended to inform Mr. Seidl that Cohesity would institute litigation should he continue to ignore Cohesity’s correspondence.” We conclude that Cohesity satisfied its burden of making a prima facie showing that Cohesity’s February 2019 letter from its general counsel was protected as prelitigation communication related to litigation under serious consideration that Cohesity contemplated in good faith. As Seidl concedes that Cohesity’s lawsuit against him was protected activity, we consider whether Cohesity met its burden of showing that Seidl’s breach of contract and breach of the implied covenant causes of action arose from Cohesity’s letter and lawsuit. Seidl argues on appeal that his causes of action did not arise from Cohesity’s letter or lawsuit but from Cohesity’s “wrongful position” that Seidl’s shares had not vested, it had a right to repurchase the alleged unvested shares, and it was entitled to $405,268.82 from Seidl. However, Seidl’s cross-complaint identified no conduct taken by Cohesity to manifest this “wrongful position” other than its letter and subsequent lawsuit. Breach constitutes a necessary element of Seidl’s causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing. “[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) Breach of the implied covenant similarly requires a breach. (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1244.) The only acts by Cohesity that Seidl alleged breached the contract or the implied covenant of good faith and fair dealing were the sending of Cohesity’s letter and the filing of the lawsuit. He did not allege that Cohesity did anything prior to or after its letter and lawsuit that constituted a breach of contract or a breach of the implied covenant. Therefore, the causes of action arose from Cohesity’s letter and lawsuit. As the petitioning activity itself was the wrong complained of, Cohesity has met its burden 9 under the first step of the anti-SLAPP analysis. (See Laker, supra, 32 Cal.App.5th at p. 763.) Seidl’s reliance on Gotterba v. Travolta (2014) 228 Cal.App.4th 35 is misplaced. In Gotterba, the plaintiff’s cause of action sought declaratory relief to resolve an underlying dispute about a contract, not damages caused by a prelitigation demand letter. (Id. at pp. 38–39.) The prelitigation demand letters in Gotterba were merely evidence of the existence of a dispute. (Id. at p. 42.) Here, in contrast, Cohesity did not move to strike Seidl’s declaratory relief cause of action but only his breach of contract and breach of the implied covenant causes of action, both of which required proof of a breach and were based on Cohesity’s letter and lawsuit. We conclude that Cohesity met its first prong burden and established that Seidl’s breach of contract and breach of the implied covenant of good faith and fair dealing causes of action arise from protected activity. The burden, therefore, shifts to Seidl to demonstrate these causes of action have at least minimal merit. C. Second Prong: Did Seidl Establish Minimal Merit? Cohesity asserts that Seidl’s breach of contract and breach of the implied covenant causes of action lack even minimal merit. Cohesity maintains that Seidl cannot support the factual basis for these causes of action with admissible evidence because the litigation privilege bars admission of evidence of Cohesity’s letter and lawsuit. Seidl claims that the litigation privilege does not apply because the application of that privilege to contract actions is limited to cases where the privilege’s underlying purposes will be served by its application, and those purposes will not be served by its application here. Under the second step of the anti-SLAPP analysis, “a plaintiff seeking to demonstrate the merit of the claim ‘may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence.’ ” (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 940.) “The litigation privilege, codified at Civil Code section 47, subdivision (b), provides that a 10 ‘publication or broadcast’ made as part of a ‘judicial proceeding’ is privileged. This privilege is absolute in nature . . . ‘the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that [has] some connection or logical relation to the action.’ [Citation.] The privilege ‘is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards.’ ” (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241.) The litigation privilege “will apply to contract claims only if the agreement does not ‘clearly prohibit’ the challenged conduct, and if applying the privilege furthers the policies underlying the privilege.” (Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 787.) The policies underlying the litigation privilege are “ ‘ “to afford litigants and witnesses [citation] the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions,” ’ ” and to “ ‘promote[] effective judicial proceedings by encouraging “ ‘open channels of communication and the presentation of evidence’ ” without the external threat of liability [citation], and “by encouraging attorneys to zealously protect their clients’ interests.” ’ ” (Id. at p. 788.) In Vivian v. Labrucherie (2013) 214 Cal.App.4th 267, the court applied the litigation privilege in a contract action where the agreement did “not clearly prohibit the conduct that plaintiff challenges” (id. at p. 276) and application of the privilege would further the privilege’s underlying purposes. (Id. at p. 277.) Similarly, in Feldman v. 1100 Park Lane Associates (2008) 160 Cal.App.4th 1467, the court found that the litigation privilege applied to a breach of contract cause of action because application “of the privilege furthers the policy of allowing access to the courts without fear of harassing derivative actions.” (Id. at p. 1498.) 11 Seidl does not deny that the litigation privilege may apply to prelitigation communications (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 889; Olsen v. Harbison (2010) 191 Cal.App.4th 325, 334) or that it may apply to a lawsuit. He claims only that the underlying purposes of the litigation privilege do not support its application here because this case does not involve “a significant public concern” and it would “frustrate the purpose of the parties’ bargained for exchange.” We disagree. Application of the litigation privilege here would serve the purposes of the privilege. It would free litigants, like Cohesity, from the fear that their prelitigation communications and subsequent legal actions would subject them to harassment by derivative actions. And it would promote effective judicial proceedings by encouraging open communication between litigants without subjecting them to liability for their mere participation in a legal dispute. Consequently, we decide the litigation privilege applies. Since the application of the privilege means that Seidl’s causes of action cannot succeed due to the lack of admissible evidence,4 the trial court should have granted Cohesity’s section 425.16 motion and stricken these two causes of action. III. DISPOSITION The trial court’s order denying Cohesity’s section 425.16 motion is reversed. On remand, the court is directed to enter a new order granting Cohesity’s section 425.16 motion and to award Cohesity its attorney fees and costs. (§ 425.16, subd. (c)(1).) Cohesity shall recover its appellate costs. (Cal. Rules of Court, rule 8.278(a)(1).) 4 In light of this conclusion, we need not reach Cohesity’s alternative assertion that Seidl’s causes of action lack minimal merit because he could not prove the required element of damages. 12 ______________________________________ Danner, Acting P.J. WE CONCUR: ____________________________________ Lie, J. ____________________________________ Wilson, J. H048981 Seidl v. Cohesity, Inc.	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483678/	Filed 11/14/22 P. v. Perez CA5 Opinion following transfer from Supreme Court CA5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT THE PEOPLE, F079351 Plaintiff and Respondent, (Super. Ct. No. SUF18323B) v. GUY PEREZ, OPINION Defendant and Appellant. THE COURT * APPEAL from a judgment of the Superior Court of Merced County. Mark V. Bacciarini, Judge. Sandra Gillies, under appointment by the Court of Appeal, for Defendant and Appellant. Xavier Becerra, Attorney General, Lance E. Winters, Chief Assistant Attorney General, Michael P. Farrell, Assistant Attorney General, Daniel B. Bernstein and Doris A. Calandra, Deputy Attorneys General, for Plaintiff and Respondent. -ooOoo- * Before Hill, P. J., Detjen, J. and Peña, J. INTRODUCTION Petitioner Guy Perez petitioned the superior court, pursuant to former section 1170.95 (now § 1172.6) of the Penal Code,1 for resentencing on his conviction for first degree murder (§ 187). The superior court denied the petition at the prima facie stage, without appointing counsel, on the ground petitioner was a major participant in the underlying felony who acted with reckless indifference to human life. On appeal, petitioner argues the superior court erred in failing to appoint counsel and ultimately in denying the petition at the prima facie stage. He argues the court improperly resolved disputed factual issues. He further contends the jury’s true finding on a kidnapping circumstance, which required the jury to find he was a major participant in the underlying felony and acted with reckless indifference to human life (§ 190.2, subds. (a)(17), (d)), does not preclude relief because it was made prior to our Supreme Court’s decisions in People v. Banks (2015) 61 Cal.4th 788 (Banks) and People v. Clark (2016) 63 Cal.4th 522 (Clark). In our original opinion we held the jury’s special circumstance finding rendered petitioner ineligible for resentencing as a matter of law. Accordingly, we held any error in failing to appoint counsel or otherwise follow the procedures set out in former section 1170.95, subdivision (c) was harmless. We therefore affirmed the superior court’s denial of the petition. (People v. Perez (June 16, 2021, F079351) [nonpub. opn].) Petitioner petitioned the California Supreme Court for review (S270034). The state high court granted review and ultimately transferred the matter to us with directions to vacate our opinion and reconsider the cause in light of People v. Strong (2022) 13 Cal.5th 698 (Strong). Pursuant to the California Supreme Court’s order, we vacated our prior opinion. We also advised the parties of our intention to reverse and remand this 1 Undesignated statutory references are to the Penal Code. Former section 1170.95 recently was renumbered section 1172.6, with no change in text. (Stats. 2022, ch. 58, § 10.) We will refer to the current section 1172.6 in this opinion. 2. matter with directions to issue an order to show cause, in light of the holding in Strong. Petitioner filed a letter brief stating his agreement with the court’s proposed disposition. The People filed a letter brief stating they had no objection to the proposed disposition. In light of Strong, we will reverse the superior court’s order denying the petition and remand with directions for the court to appoint counsel to represent petitioner and to issue an order to show cause. FACTUAL AND PROCEDURAL HISTORY On November 20, 1996, a jury convicted petitioner of first degree murder (§ 187; count 1), with a special circumstance that the murder was committed during the commission of a kidnapping (§§ 190.2, subd. (a)(17), 207) and kidnapping (§ 207, subd. (a); count 2).2 On count 1, the court sentenced petitioner to life without the 2 The People filed a motion requesting that we take judicial notice of the record of petitioner’s direct appeal in case No. F027679 on the ground that “[t]he trial court appears to have reviewed the trial record leading to its ruling.” Petitioner opposes the motion. We grant the People’s request in part and take judicial notice of our prior nonpublished opinion, People v. Perez (Aug. 6, 1998, F027679), which was submitted to the trial court and is referred to by both parties in their briefing. That opinion suggests petitioner’s convictions arose out of an incident in which the victim was shot in the head multiple times in an orchard. The victim was taken to the orchard in the trunk of petitioner’s vehicle, and the actual killer was accompanied on that trip by petitioner and several others. (Ibid.) We provide these facts as context for the parties’ arguments and the court’s ruling, but do not rely on them for our holding. (See § 1172.6, subd. (d)(3).) The remaining record in case No. F027679 is not relevant to our disposition of the instant appeal, and we therefore decline to grant the People’s request for judicial notice as to that record. (See People v. Young (2005) 34 Cal.4th 1149, 1171, fn. 3 [court may not take judicial notice of any matter that is irrelevant].) We note, in particular, that the court reporter was unable to prepare transcripts of petitioner’s trial for the instant record on appeal due to the age of the case. It therefore is apparent the trial court did not consider the trial transcripts when addressing the instant petition. (See People v. Preslie (1977) 70 Cal.App.3d 486, 493 [generally, court should not take judicial notice of matter that has not been presented to and considered by the trial court in the first instance]; see also Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3 [same].) 3. possibility of parole. Sentence on count 2 was imposed and stayed pursuant to section 654. On March 25, 2019, petitioner filed a petition for resentencing pursuant to section 1172.6. In the form petition, petitioner stated that a complaint, information, or indictment was filed against him that allowed him to be prosecuted under a theory of felony murder; he was convicted of first or second degree murder at trial; and he was not the actual killer, did not act with an intent to kill, and was not a major participant in the underlying felony or did not act with reckless indifference to human life in the course of the crime. He requested counsel be appointed to represent him. On April 29, 2019, the People filed an opposition to the petition, arguing section 1172.6 is unconstitutional and, in any event, petitioner does not qualify for resentencing because the jury’s finding on the kidnapping-murder special circumstance precluded him from making a prima facie showing that his conviction falls within the provisions of section 1172.6. The People included with their opposition a copy of this court’s nonpublished opinion in petitioner’s direct appeal (People v. Perez, supra, F027679), and also asked the court to take judicial notice of the entire court file. On May 7, 2019, the court summarily denied the petition as follows: “The record shows petitioner was prosecuted under the felony murder theory. He was not the actual killer. He did not, with the intent to kill, aid, abet, counsel, command, induce, solicit, request, or assist the actual killer in the commission of murder in the first degree. However, petitioner could be convicted of first degree murder today, regard less of the changes to sections 188 or 189, because he was a major participant who acted with reckless indifference to human life, as evidenced in the true finding on the special circumstance, as described in subdivision (d) of section 190.2. “Thus, the petition is DENIED.” This timely appeal followed. 4. DISCUSSION I. Applicable Law Effective January 1, 2019, the Legislature passed Senate Bill No. 1437 (2017-2018 Reg. Sess.) “to amend the felony murder rule and the natural and probable consequences doctrine . . . to ensure that murder liability is not imposed on a person who is not the actual killer, did not act with the intent to kill, or was not a major participant in the underlying felony who acted with reckless indifference to human life.” (Stats. 2018, ch. 1015, § 1, subd. (f); see § 189, subd. (e); accord, Strong, supra, 13 Cal.5th at pp. 707- 708.) Senate Bill No. 1437 also added former section 1170.95, now renumbered as section 1172.6, which provides a procedure for persons convicted of felony murder to seek vacatur of the conviction and resentencing. (§ 1172.6, subd. (a); accord, Strong, at p. 708.) Under section 1172.6, an offender seeking resentencing must first file a petition in the sentencing court, and the sentencing court must determine whether the petitioner has made a prima facie showing that he or she is entitled to relief. (§ 1172.6, subd s. (a)-(c); accord, Strong, supra, 13 Cal.5th at p. 708.) If the sentencing court determines the petitioner has made such a showing, the court must issue an order to show cause and hold a hearing to determine whether to vacate the murder conviction. (§ 1172.6, subds. (c), (d)(1).) At this evidentiary hearing, “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).) To demonstrate prejudice from the denial of a section 1172.6 petition before the issuance of an order to show cause, the petitioner must show it is reasonably probable that, absent error, his or her petition would not have been summarily denied without an evidentiary hearing. (People v. Lewis (2021) 11 Cal.5th 952, 972-974 (Lewis); see People v. Watson (1956) 46 Cal.2d 818, 836.) 5. II. Appointment of Counsel Petitioner contends the trial court erred by summarily denying his facially sufficient petition without appointing counsel and permitting further briefing. At the time the trial court ruled on the petition, our Supreme Court had not resolved whether section 1172.6 requires the appointment of counsel or further briefing immediately upon the filing of a facially sufficient petition. (See Lewis, supra, 11 Cal.5th at pp. 961-967.) However, our Supreme Court and Legislature have since clarified that counsel must be appointed if requested, and briefing must proceed, so long as the petition complies with the requirements of section 1172.6, subdivision (b)(1) and (2). (§ 1172.6, subd. (b)(3); accord, Lewis, at pp. 962-963, 967.) Here, the People do not suggest the petition failed to meet the requirements of section 1172.6, subdivision (b). Accordingly, appointment of counsel and a full opportunity for briefing were required by section 1172.6, subdivisions (b)(3) and (c).3 (See Lewis, supra, 11 Cal.5th at pp. 961- 963, 967.) The court erred in disposing of the petition without following these procedures. III. Prejudice Because the trial court erred in failing to appoint counsel or permit further briefing, we may affirm only if petitioner was not prejudiced by the error. (Lewis, supra, 11 Cal.5th at pp. 972-974.) Because the record does not establish petitioner is ineligible for resentencing as a matter of law, we cannot conclude the court’s error in failing to appoint counsel was harmless. While this appeal was pending, our Supreme Court issued its opinion in Strong, supra, 13 Cal.5th 698. Therein, the high court held that a special circumstance finding 3 We reject petitioner’s argument that the denial of counsel violated his constitutional rights. Our Supreme Court has determined the failure to appoint counsel in a section 1172.6 proceeding is error under state statutory law only. (Lewis, supra, 11 Cal.5th at pp. 972-973.) 6. entered pursuant to section 190.2, subdivision (a)(17) prior to the court’s decisions in Clark, supra, 63 Cal.4th 522 and Banks, supra, 61 Cal.4th 788 did not preclude a section 1172.6 petitioner from making a prima facie showing of eligibility for relief. 4 (Strong, at p. 703.) In light of Strong, the special circumstance finding in the instant case is not preclusive on prima facie review of the petition under section 1172.6. (Strong, at p. 703.) Strong is dispositive of this case. The special circumstance finding was made before Banks and Clark and therefore is not preclusive on prima facie review of the petition under section 1172.6. (Strong, supra, 13 Cal.5th at p. 703.) The petition was facially sufficient and alleged the essential facts necessary for relief under section 1172.6. Because the People have presented no other basis to deny the petition at the prima facie stage,5 the order denying the petition must be reversed and the matter remanded with directions to appoint counsel, to issue an order to show cause and, to the extent necessary, to conduct an evidentiary hearing under subdivision (d) of section 1172.6. We express no opinion on the ultimate resolution of the petition. DISPOSITION The May 7, 2019 order denying the petition is reversed and the matter remanded with directions to appoint counsel, issue an order to show cause and, to the extent necessary, hold an evidentiary hearing pursuant to section 1172.6, subdivision (d). 4Banks and Clark “substantially clarified the law” regarding “what it means to be a major participant and . . . to act with reckless indifference to human life.” (Strong, supra, 13 Cal.5th at pp. 706-707.) 5 The People do not argue the factual record before the trial court permitted the court to deny the petition at the prima facie stage. We therefore need not address petitioner’s contention that the trial court may have resolved disputed factual issues in denying the petition. 7.	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483674/	UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _________________________________________ ) ) LETICIA SANCHEZ-ANGELES, et al., ) ) Plaintiffs, ) ) v. ) ) Case No. 22-cv-00614 (APM) UNIVERSAL PROTECTION SERVICE, LLC, ) ) Defendant. ) ) _________________________________________ ) MEMORANDUM OPINION AND ORDER I. Plaintiffs Leticia Sanchez-Angeles and Jamil Arouni bring this action on behalf of themselves and other similarly situated current and former Special Police Officers (“SPOs”) assigned to security posts at the U.S. Government Accountability Office (“GAO”). Plaintiffs are employed by Defendant Universal Protection Service, LLC (“Allied Universal”), an entity that provides contract security services to the GAO building located at 441 G Street N.W. Plaintiffs filed suit before this court, alleging violations of (1) the Fair Labor Standards Act (“FLSA”), and (2) the District of Columbia Minimum Wage Revision Act (“DCMWRA”) based on the same underlying conduct: Defendant’s alleged failure to compensate Plaintiffs for daily pre- shift, post-shift, and meal period overtime work. Before the court is Defendant’s Motion to Dismiss. See Def.’s Mot. to Dismiss, ECF No. 8 [hereinafter Def.’s Mot.]. Defendant does not at this juncture challenge Plaintiffs’ claim under FLSA. Defendant seeks only to dismiss Plaintiffs’ DCMWRA claim, arguing that the claim is preempted by Section 301 of the Labor Management Relations Act (“LMRA”) because the alleged violation implicates a collective bargaining agreement (“CBA”) governing the parties’ employment relationship. Defendant attaches to its Motion to Dismiss two CBAs (“the CBAs”) that governed Plaintiffs’ employment relationship with Allied Universal and the prior servicers of the GAO security account. As discussed below, the court holds that Plaintiff’s DCMWRA claim has not been shown to be preempted by Section 301 at this point in the litigation. Accordingly, the court denies Defendant’s Motion to Dismiss. II. “[W]hen resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a [Section] 301 claim[1] or dismissed as pre-empted by federal labor-contract law.” Allis Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985) (citation omitted). Preemption under Section 301 does not, however, serve as an outright bar on state-law claims raised by employees who are covered by a CBA. The focus of a Section 301 preemption analysis is on whether the claim “confers nonnegotiable state-law rights on . . . employees independent of any right established by contract.” Id. at 213. III. Before the court can evaluate the merits of the preemption argument, it must first address the issue of whether the CBAs can properly be considered at this stage of the litigation. Plaintiffs argue that consideration of the CBAs is not permitted on a motion to dismiss and that doing so 1 Defendant asserts that if Plaintiffs’ DCMWRA claim is treated as a Section 301 claim, the claim should nonetheless be dismissed because Plaintiffs have failed to exhaust their administrative remedies. Def.’s Mot. at 9. Plaintiffs do not contest that they have not pleaded exhaustion of administrative remedies under the CBA, see Pl.’s Mem. of P. & A. in Opp. to Def.’s Mot., ECF No. 10 [hereinafter Pl.’s Mem.], but this is ultimately irrelevant; the court need not treat the DCMWRA claim as a Section 301 claim because there is insufficient evidence at this stage to establish that this state statutory claim is substantially dependent upon analysis of the terms of the CBAs. 2 would require conversion of the motion into one for summary judgment. Pl.’s Mem. of P. & A. in Opp. to Def.’s Mot., ECF No. 10 [hereinafter Pl.’s Mem.]. Defendant counters that a court may consider documents on which a plaintiff’s complaint “necessarily lies, even if the document is produced by the defendant in a motion to dismiss,” without need to convert the motion. Def.’s Mot. at 7. The court finds it cannot consider the CBAs in this case without converting the motion into one for summary judgment. Furthermore, the court declines to exercise its discretion to convert the pending motion. In deciding a Rule 12(b)(6) motion, the court may consider the facts alleged in the complaint as well as documents “referred to in the complaint and . . . central to the plaintiff’s claim.” Marshall v. Honeywell Tech. Solutions, Inc., 536 F. Supp. 2d 59, 65 (D.D.C. 2008); Kim v. United States, 632 F.3d 713, 719 (D.C. Cir. 2011). Rule 12(d) provides, however, that “[i]f, on a motion under Rule 12(b)(6), . . . matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56.” FED. R. CIV. P. 12(d); Wiley v. Glassman, 511 F.3d 151, 160 (D.C. Cir. 2007) (per curiam). The decision whether to convert a motion to dismiss into one for summary judgment is within the court’s discretion. Kim, 632 F.3d at 719; Search v. Uber Techs., Inc., 128 F. Supp. 3d 222, 228 (D.D.C. 2015). In this case, the court finds that the CBAs are “outside the pleadings.” FED. R. CIV. P. 12(d). First, it is undisputed that Plaintiffs did not expressly reference or attach the CBAs to the Complaint. See Def.’s Reply to Pl.’s Mem of P. & A., ECF No. 12 [hereinafter Def.’s Reply], at 7–8. Defendant argues instead that Plaintiffs’ statement in the Complaint that “the union representing SPOs . . . has repeatedly raised to [Defendant] issues regarding the unlawful pay policies and practices described herein” constitutes sufficient reference to the CBAs to render the 3 documents incorporated or integral to the Complaint. Id. (quoting Compl., ECF No. 1, ¶ 16 and citing out-of-circuit cases). The court disagrees. Mere reference to grievances raised to the SPOs’ union about the alleged unlawful conduct at issue in this case does not fairly implicate collective bargaining contracts entered into by the parties. See Freeman v. MedStar Health, Inc., 87 F. Supp. 3d 249, 258–59 (D.D.C. 2015). This fact intuitively follows from the nature of Plaintiffs’ claims. Plaintiffs do not allege, for example, a breach of contract, which would fairly implicate the underlying contractual agreement. Plaintiffs instead allege the violation of a “non-negotiable and mandatory right originating outside of the CBA” to statutory minimum wage protections. Bratton v. Starwood Hotels & Resorts Worldwide, Inc., 65 F. Supp. 3d 8, 14 (D.D.C. 2014); see also Hernandez v. Stringer, 210 F. Supp. 3d 54, 63 (D.D.C. 2016) (explaining that “DCMWRA . . . claims cannot be waived” by contract). Because the court finds that the CBAs constitute material outside of the pleadings, consideration of the documents would require conversion to a motion for summary judgment. The court declines to exercise its discretion to do so. In the present circumstances, where the parties have not had an opportunity to develop the evidentiary record or present meaningful evidentiary support to assist the court in evaluating the preemption claim, the court finds summary judgment consideration would be premature. See Search, 128 F. Supp. 3d at 228–29; Freeman, 87 F. Supp. 3d at 259. IV. In the absence of any reference in the Complaint to the CBAs, Defendant’s preemption argument fails. On the face of the Complaint, resolution of the state-law claim is not “substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract.” Allis Chalmers, 471 U.S. at 220 (citation omitted). Thus, Defendant’s Motion to 4 Dismiss fails. The court notes, however, that nothing in the court’s opinion precludes re-raising these issues in a future motion for summary judgment. V. For the foregoing reasons, the court denies Defendant’s Motion to Dismiss, ECF No. 8. Dated: November 14, 2022 Amit P. Mehta United States District Court Judge 5	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483679/	Filed 11/14/22 P. v. Perez CA2/8 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION EIGHT THE PEOPLE, B317043 Plaintiff and Respondent, Los Angeles County Super. Ct. No. VA155869 v. ANTHONY PEREZ, Defendant and Appellant. APPEAL from a judgment of the Superior Court of Los Angeles County, Lee W. Tsao, Judge. Affirmed. Larenda R. Delaini, under appointment by the Court of Appeal, for Defendant and Appellant. No appearance for Plaintiff and Respondent. ____________________ Pursuant to People v. Wende (1979) 25 Cal.3d 436, we review this appeal following a bench trial. We affirm the judgment of conviction. Statutory citations are to the Penal Code. An information charged Anthony Perez with resisting a peace officer (§ 148, subd. (a)(1)) and assault with a deadly weapon (§ 245, subd. (a)(1)). Perez’s victim—Abdel Rahman Al-Aqad—testified at trial that he was at a gas station on Whittier Boulevard in April 2021 when he saw Perez standing at a pump with a yellow box cutter. Perez told him to get out of his car. Al-Aqad asked what he wanted. Perez started cursing and threatened to kill Al-Aqad if he did not get out. Perez swung the box cutter at Al-Aqad from a close range: less than two feet away. He yelled “very bad words” and made threats. Al-Aqad told Perez to take the car. He backed away and kicked to try to fend off his attacker and avoid the box cutter. Perez kept swinging the blade and coming towards him. Al-Aqad grabbed a piece of metal from his car to scare off Perez. Then he called the police. Al-Aqad’s colleague arrived to see if he was okay. Al-Aqad got into his car to drive to a pump because he still needed gas. But Perez returned, banged on the window, and tried to open the locked door. Perez was undeterred when the police arrived and tried to calm him down. He yelled at them and said, “I’m not going to stop.” So Al-Aqad grabbed the metal bar again and used it to hold onto Perez until the police took him. 2 A sheriff witness corroborated part of Al-Aqad’s account. The deputy testified he asked Perez to come over, but Perez refused. Perez maintained someone tried to hit him with a stick and he was not the one causing trouble. The deputy saw the victim go to Perez with the metal pole. He separated the two when they fought for possession of the pole. The deputy tried to grab Perez, but Perez broke free. Perez then turned his shoulder toward the deputy, “blading his body, and clenched his fist in a fighting stance.” He was one or two feet away. The deputy feared Perez was going to assault him. He struck Perez, who fell to the ground. The trial court found Perez guilty on both counts. The court sentenced him to the low term of two years in prison on the base count (assault with a deadly weapon), and a concurrent term of 365 days in county jail on the other count (resisting arrest). The court also imposed various fines and fees and awarded Perez 452 days of custody credits. Perez appealed, and we appointed counsel to represent him. Appointed counsel examined the record and filed an opening brief raising no issues and asking this court to review the record independently under People v. Wende. Counsel also wrote to Perez advising him of his right to file a supplemental brief for us to consider. Perez did not file a response. We have examined the entire appellate record. We are satisfied Perez’s counsel fully complied with counsel’s responsibilities and no arguable issues exist. (See People v. Wende (1979) 25 Cal.3d 436, 441–442.) 3 DISPOSITION The judgment is affirmed. WILEY, J. We concur: STRATTON, P. J. HARUTUNIAN, J.* * Judge of the San Diego Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. 4	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491185/	ORDER JAMES E. RYAN, Chief Judge. On this 24th day of September, 1990, Defendant’s Motion for Summary Judgment (Docket Entry No. 4) with Brief in Support (Docket Entry No. 5) as well as the Response of Plaintiff to Motion of Defendant for Summary Judgment and Brief in Support (Docket Entry No. 7) came before this Court for consideration. After review of these pleadings, this Court does hereby enter the following Findings of Fact and Conclusions of Law in conformity with B.R. 7052 in this core proceeding: STATEMENT OF ISSUES The facts and circumstances presented in this adversary proceeding give rise to the following issues: (1) whether the perfection requirement to except a transfer from the Trustee’s avoidance power of 11 U.S.C. § 547(c)(3) is applicable to the instant case; (2) whether the perfection of Defendant’s security interest pursuant to Oklahoma state law is an exception to the Plaintiff’s ability to avoid a preferential 266transfer pursuant to 11 U.S.C. § 547; and (3) whether the transfer between Debtors and Defendant represents a substantially contemporaneous exchange for new value. FINDINGS OF FACT 1. On August 4, 1989, the Defendant made a loan to the Debtors in exchange for a non-purchase money security interest in a 1988 Izusu pickup truck owned by the Debtor, Olen Carson. This agreement was evidenced by a completed and executed Promissory Note and Security Agreement, combined in a single document. 2. On August 18, 1989, the Defendant delivered to agents of the Oklahoma Tax Commission an Oklahoma Lien Entry Form dated August 16, 1989, reflecting the Defendant’s security interest in the subject truck. 3. On September 20, 1989, the Debtors filed a Petition seeking relief under Chapter 7 of the United States Bankruptcy Code. 4. The Plaintiff instituted this action to avoid an allegedly preferential transfer of the security interest in the truck. 5. Defendant contends in the Motion for Summary Judgment that the ten (10) day perfection exception to avoidance of a preferential transfer found at § 547(c)(3)(B) is inapplicable to this case, but rather, the fifteen (15) day perfection requirement of the Oklahoma Statutes represents an exception to the Trustee’s ability to avoid the transfer. Plaintiff asserts that complying with the perfection requirements under Oklahoma state law does not constitute a “substantially contemporaneous exchange” and thus is not an exception to the Trustee’s attempt to avoid the transfer of the security interest. CONCLUSIONS OF LAW A. The issues in this matter are largely legal in nature. However, all facts necessary for this Court’s determination are indisputable and thus, we find that there is no genuine issue as to the material facts involved. As a result, we may examine the respective legal positions of the parties set forth in their briefs. B.R. 7056. This Court has conducted extensive independent research and incorporated same herein due to the dearth of case law presented by the parties. B. The initial question that the Defendant seeks to have this Court resolve concerns the applicability of 11 U.S.C. § 547(c)(3) to the facts and circumstances in the instant case. It is well recognized that this particular exception to the Trustee’s ability to avoid a preferential transfer applies only in transactions involving the granting of a purchase money security interest, or so-called “enabling loans.” With such purchase money loans, the Trustee cannot avoid the granting of the security interest where perfection is accomplished within ten (10) days after the security interest attaches. In the instant case, this exception is inapplicable since the security interest at issue is of a non-purchase money character. Thus, this exception to the Trustee’s avoidance power under § 547 is not available to the Defendant. C. The Trustee’s attempt to avoid a non-purchase money security interest is subject to the exception found at 11 U.S.C. § 547(c)(1), which states: 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 exchange; The Defendant urges this Court to adopt the Oklahoma statutory time for perfection of motor vehicle liens as an objective standard for determining contemporaneity. The Oklahoma statutes provide at Okla.Stat.Ann. tit. 47, § 1110 (West Supp. 1990) that if the secured party delivers a 267Lien Entry Form, fee and Certificate of Title to the Oklahoma Tax Commission or a Motor License Agent within fifteen (15) days after the date of the Lien Entry Form, perfection of the secured party’s security interest is deemed to have occurred on the date of execution of the Lien Entry Form. We do not see the merit or applicability of adopting this time period for determining whether a particular transaction represents a contemporaneous exchange. The adoption by Congress of the ten (10) day rule for perfection of “enabling loans” under § 547(c)(3) was an obvious attempt to create uniformity among the state laws governing perfection pursuant to the Uniform Commercial Code. See 4 Collier on Bankruptcy 11 546.11, n. 2, at 547-53 (15th ed. 1990). If this same degree of uniformity was intended for establishing a security interest in non-purchase money transactions, we must presume that Congress would have clearly set forth an objective standard. Other sections of the Code make express reference to state law grace periods and thus we must consider that the failure of Congress to do so in the exceptions to the Trustee’s ability to avoid preferential transfers was cognizant. In re Ken Gardner Ford Sales, Inc., 10 B.R. 632, 643 (Bankr.E.D.Tenn.1981). Some Courts have attempted to “boot strap” the provisions of § 547(e)(2) into the determination of a “contemporaneous exchange.” This section is utilized to determine when a particular transfer occurred, depending on the time for perfection. If such transfer is perfected at or within ten (10) days of the transfer, the transfer is deemed to have occurred at the time of the transaction. However, if perfection occurs after ten (10) days of the transfer, the transfer is deemed to have occurred at the time of perfection. § 547(e)(2)(A) and (B). We respectfully decline to follow the Courts which found some correlation between this ten (10) day rule and the contemporaneous exchange standard. See In re Arnett, 731 F.2d 358 (6th Cir.1984). The reasoning of this case stretches the relationship between § 547(c)(1) and § 547(e)(2) beyond recognizable bounds. The purpose for § 547(e)(2) is multifaceted. First, it was established to resolve any questions as to whether a particular transaction fell within the ninety (90) day period pre-petition, so that the Trustee may attack the transfer as being preferential. Second, this section was necessary to eliminate questions of whether a particular debt was antecedent; that is, whether the debt was incurred prior to the granting of a security interest. And, finally, this section was adopted to aid the Court in determining the point in time in which the required element of insolvency of the debtor is relevant. Under no circumstances can we find applicability to the contemporaneous exchange issue. As a result, we find that the question of whether an exchange is contemporaneous is a question of fact to be determined from the intent of the parties and the facts and circumstances of each case. See In re Telecash Industries, Inc., 104 B.R. 401 (Bankr.D.Utah 1989). D. The required element of “intent” or a determination of whether a transaction is substantially contemporaneous is a recognized codification of the rule established in the case of National City Bank of New York v. Hotchkiss, 231 U.S. 50, 34 S.Ct. 20, 58 L.Ed. 115 (1913). In that case, the Bank made an unsecured loan to a borrower in the morning. Later that same day, Bank learned that the borrower was experiencing financial difficulties, whereupon it sought and received security on the loan. Although the period of time between the granting of the loan and the transferring of the security interest was short, the transaction was deemed to be preferential. Further, the “substantially contemporaneous” standard was codified to preserve the rule of Dean v. Davis, 242 U.S. 438, 37 S.Ct. 130, 61 L.Ed. 419 (1917), wherein the Court found that exchange of the proceeds of the loan and the security interest was intended by the parties to be substantially contemporaneous. The Bankruptcy Code fails to provide a definition for what may be contemporaneous. The dictionary defines “contemporaneous” as something “arising, existing, or *268occurring during the same period of time.” Webster’s Ninth New Collegiate Dictionary 283 (1985). Many Courts have struggled with the issue of “how long is too long” between the granting of the loan and the creation of the security interest. See the discussion contained in In re Damon, 34 B.R. 626 (Bankr.D.Kansas 1983). In the case at bar, however, we are able to ascertain the intent of the parties from the documentary evidence provided to this Court. The security agreement/promissory note executed by the Defendant on August 4, 1989 clearly demonstrates that the parties intended the exchange to be contemporaneous. The creation of the obligation and the security interest are in fact on the same document. Thus, by executing the agreement, the Debtors and Defendant simultaneously created a security interest in the subject truck while agreeing to terms on the loaning of money. Whether the money was received on the same day as the execution of the agreement is irrelevant, since even if the money were received after execution, the security interest would have been established prior to receipt of the money, and thus the exchange would have been contemporaneous. Under the facts and circumstances of this case, the matter of perfection is irrelevant since § 547(c)(1) clearly requires this Court to make inquiry as to the intent inter se between the debtor and creditor. As a result, any perfection against interests of third parties does not enter into this Court’s inquiry. Therefore, we find that the transfer of the security interest was substantially contemporaneous with the granting of the loan. E. For the exception of § 547(c)(1) to apply, this Court must also find that the exchange was for “new value” given to the debtor. The Code defines “new value” as “money or money’s worth in goods, services, or new credit, or release by a transferee of property previously transferred to such transferee in a transaction that is neither void nor avoidable by the debtor or the trustee under any applicable law, including proceeds of such property, but does not include an obligation substituted for an existing obligation.” 11 U.S.C. § 547(a)(2). The transaction between the Debtors and Defendant was clearly for “new value” under this definition, as the Debtors received new money for the transferring of the security interest. F. As a result of the findings and conclusions of this Court, we deem that the transaction between the Debtors and Defendant is not a transfer which may be avoided by the Trustee due to the existence of the circumstances proving the exception of § 547(c)(1) and this Court need not determine whether all elements for a preferential transfer found at § 547(b) are present. The Plaintiff could not maintain this action in any event. IT IS THEREFORE ORDERED that Defendant’s Motion for Summary Judgment is hereby granted. As a result, this adversary proceeding is hereby dismissed. IT IS FURTHER ORDERED that the Pre-Trial Conference currently scheduled for October 26, 1990 at 11:30 a.m. is hereby stricken.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483682/	11/14/2022 IN THE SUPREME COURT OF THE STATE OF MONTANA Case Number: DA 22-0151 No. DA 22-0151 STATE OF MONTANA, Plaintiff and Appellee, v. RICHARD HAROLD VIERECK, Defendant and Appellant. ORDER Upon consideration of Appellant’s motion for extension of time, and good cause appearing, IT IS HEREBY ORDERED that Appellant is granted an extension of time to and including December 21, 2022, within which to prepare, file, and serve Appellant’s opening brief on appeal. Electronically signed by: Mike McGrath Chief Justice, Montana Supreme Court November 14 2022	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/9350211/	Matter of Williamsviile Residents Opposed To Blocher Redevelopment, LLC v Village of Williamsville Planning & Architectural Review Bd. (2022 NY Slip Op 07422) Matter of Williamsviile Residents Opposed To Blocher Redevelopment, LLC v Village of Williamsville Planning & Architectural Review Bd. 2022 NY Slip Op 07422 Decided on December 23, 2022 Appellate Division, Fourth Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports. Decided on December 23, 2022 PRESENT: SMITH, J.P., LINDLEY, CURRAN, AND WINSLOW, JJ. (Filed Dec. 23, 2022.) MOTION NO. (634/22) CA 21-01052. [*1]IN THE MATTER OF WILLIAMSVIILE RESIDENTS OPPOSED TO BLOCHER REDEVELOPMENT, LLC, CHRISTINE HUNT, DANIEL HUNT, RICHARD CUMMINGS, KATHLEEN CUMMINGS, REBECCA WALSER, RUDOLPH HEIN, WILLIAM HEIN, DIANE HEIN AND VICTORIA D'ANGELO, PETITIONERS-APPELLANTS, vVILLAGE OF WILLIAMSVILLE PLANNING AND ARCHITECTURAL REVIEW BOARD, VILLAGE OF WILLIAMSVILLE, NEW YORK, THE BLOCHER HOMES, INC., AND PEOPLE, INC., RESPONDENTS-RESPONDENTS. MEMORANDUM AND ORDER Motion for reargument denied.	01-04-2023	12-23-2022
https://www.courtlistener.com/api/rest/v3/opinions/9350349/	NUMBER 13-22-00226-CV COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI – EDINBURG GERARDO CASTILLO, Appellant, v. U.S. BANK, N.A., SUCCESSOR TRUSTEE TO LASALLE BANK NATIONAL ASSOCIATION, ON BEHALF OF THE HOLDERS OF BEAR STEARNS ASSET BAKED SECURITIES I TRUST 2007-HE7, ASSET-BACKED CERTIFICATES SERIES 2007-HE7, Appellees. On appeal from the County Court at Law No. 4 of Hidalgo County, Texas. ORDER TO FILE APPELLANT’S BRIEF Before Justices Benavides, Hinojosa, and Tijerina Order Per Curiam This cause is currently before the Court on appellant’s second amended motion for extension of time to file brief. The Court, having fully examined and considered the extensions previously granted in this cause and appellant’s pending motion is of the opinion that the extension requested should be granted by Order. It is therefore ordered that pro se appellant Gerardo Castillo file an appellate brief with this Court on or before 5:00 p.m. on January 27, 2023. Appellant is reminded the Court may dismiss the appeal for want of prosecution, unless appellant complies with this order or timely requests an extension which reasonably explains the failure and appellees are not significantly injured by the appellant’s failure to timely file a brief. See TEX. R. APP. P. 38.8(a)(1), 42.3(b),(c). PER CURIAM Delivered and filed the 22nd day of December, 2022. 2	01-04-2023	12-26-2022
https://www.courtlistener.com/api/rest/v3/opinions/9350356/	NUMBER 13-22-00594-CV COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI – EDINBURG IN RE BAYSHORE ENERGY TX LLC AND ATLAS OPERATING LLC On Petition for Writ of Mandamus. ORDER Before Chief Justice Contreras and Justices Longoria and Silva Order Per Curiam On December 20, 2022, relators Bayshore Energy TX LLC and Atlas Operating LLC filed a petition for writ of mandamus seeking to compel the trial court to vacate a December 19, 2022 order expunging a lis pendens and to reinstate the lis pendens. We request the real party in interest, VDA Solar Texas 1, LLC, or any others whose interest would be directly affected by the relief sought, to file a response to the petition for writ of mandamus on or before the expiration of ten days from the date of this order. See TEX. R. APP. P. 52.2, 52.4, 52.8. PER CURIAM Delivered and filed on the 21st day of December, 2022. 2	01-04-2023	12-26-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483677/	Filed 11/14/22 Salmon v. Salmon 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 MELISSA BETH SALMON, Respondent, E075748 v. (Super.Ct.No. DVHE1906683) STEPHEN SALMON, OPINION Appellant. APPEAL from the Superior Court of Riverside County. James T. Warren, Judge. Affirmed. Stephen Salmon, in pro. per.; Westover Law Group and Andrew L. Westover for Appellant. Steven S. Kondo for Respondent. 1 I. INTRODUCTION Stephen Salmon (Husband) and Melissa Beth Salmon (Wife) filed competing requests for domestic violence restraining orders against each other pursuant to the Domestic Violence Prevention Act (DVPA). (Fam. Code, § 6200 et seq.)1 The trial court held a joint hearing on both petitions that included live witness testimony presented over the course of multiple days. At the conclusion of the hearing, the trial court issued an order granting Wife’s petition and denying Husband’s petition. Husband appeals from this order. On appeal, Husband does not challenge the sufficiency of the evidence to support the trial court’s factual findings or to support the issuance of a DVPA restraining order in favor of Wife. Instead, he challenges only the trial court’s denial of his petition, arguing (1) the trial court misunderstood the scope of its discretion to the extent it believed section 6305 constrained its authority to simultaneously grant both requests for protective orders in this case; (2) even if section 6305 applies, the trial court abused its discretion by choosing between two identified aggressors in order to grant relief to only one of them; and (3) the trial court abused its discretion by failing to grant Husband’s request for custody of the parties’ children. We conclude that section 6305 does govern the parties’ competing requests for protective orders; the statute expressly permits the trial court to weigh the acts of the parties to determine if one should be considered the dominant aggressor before issuing a 1 Undesignated statutory references are to the Family Code. 2 mutual restraining order; and the trial court did not abuse its discretion in denying Husband’s custody request. As such, we affirm the order. II. PROCEDURAL HISTORY On October 30, 2019, Wife filed a petition seeking a domestic violence restraining order against Husband. Wife alleged that on October 28, Husband had attempted to physically discipline one of their children with a belt; Wife had attempted to intervene; and Husband physically battered Wife as a result. Police eventually arrived at the scene and arrested Husband for domestic violence. On November 27, 2019, Husband filed his own petition seeking a domestic violence restraining order against Wife. With respect to the October 28, 2019 incident, Husband alleged that Wife had initiated the conflict, and he only struck Wife accidentally when acting in self-defense. Husband also alleged that Wife had committed various acts of physical abuse in the past, with the most recent act of abuse occurring in April 2019. In addition to his request for a DVPA restraining order to protect himself, Husband also requested the trial court make an order awarding him sole legal and physical custody of the parties’ four minor children. The trial court held a hearing on both petitions that included live witness testimony presented over the course of multiple days. At the conclusion of the hearing, the trial court granted Wife’s petition and denied Husband’s petition. In a written minute order, the trial court made the following findings: (1) Husband was the primary aggressor with respect to the October 28, 2019 incident; (2) Wife was the primary aggressor with respect to the alleged April 2019 incident; (3) Wife had previously 3 inflicted injuries to the parties’ minor children that would qualify for a presumption under section 3044; (4) Husband was “grossly derelict” in permitting corporal punishment by Wife against their children; and (5) Husband was “grossly negligent” for leaving loaded firearms in the home accessible to the parties’ children. Other than setting forth findings of fact, the written order did not explain the reasons for the trial court’s decision. However, the trial court provided an oral explanation of its reasons on the record at the hearing. The trial court explained that its findings meant that both Husband and Wife had committed acts of domestic violence within the meaning of section 3044; that while Wife had inflicted unnecessary and inappropriate injuries to the children, Husband had also failed to protect the children from this alleged abuse; and that the trial court believed Husband to be “the primary aggressor in this case,” notwithstanding the fact that Wife had also committed acts of abuse in the past. III. DISCUSSION A. General Legal Principles and Standard of Review “Pursuant to the Domestic Violence Prevention Act (DVPA) (§ 6200 et seq.), a court may issue a protective order to restrain any person for the purpose of preventing a recurrence of domestic violence and ensuring a period of separation of the persons involved.” (S.M. v. E.P. (2010) 184 Cal.App.4th 1249, 1264.) The trial court may issue such an order “ ‘if the party seeking the order “shows, to the satisfaction of the court, reasonable proof of a past act or acts of abuse.” ’ ” (K.L. v. R.H. (2021) 70 Cal.App.5th 965, 977 (K.L.).) A trial court is also empowered to make visitation or custod y orders in 4 conjunction with a DVPA restraining order. (§ 6323 [custody orders authorized on ex parte basis upon showing of immediate harm to child]; § 6340 [custody orders authorized after notice and hearing].) However, the statutory scheme also constrains the trial court’s ability to issue a mutual protective order. Section 6305 provides that “the court shall not issue a mutual order enjoining the parties from specific acts of abuse” unless it makes “detailed findings of fact indicating that both parties acted as a primary aggressor and that neither party acted primarily in self-defense.” (Id. at subd. (a).) “[I]n determining if both parties acted primarily as aggressors, the court shall consider the provisions concerning dominant aggressors set forth in [Penal Code section 836, subdivision (c)(3)].” (§ 6305, subd. (b).) In turn, Penal Code section 836, subdivision (c)(3), explains that “[t]he dominant aggressor is the person determined to be the most significant, rather than the first, aggressor” and specifies various factors to consider in making such a determination, including: “(A) the intent of the law to protect victims of domestic violence from continuing abuse, (B) the threats creating fear of physical injury, (C) the history of domestic violence between the persons involved, and (D) whether either person involved acted in self-defense.” (Pen. Code, § 836, subd. (c)(3).) “We review DVPA orders [citation] and custody and visitation orders [citation] for abuse of discretion.” (K.L., supra, 70 Cal.App.5th at p. 979.) However, “[t]he abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court’s ruling under review.” (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711.) Thus, “ ‘ “[t]he question of ‘whether a trial court applied the 5 correct legal standard to an issue in exercising its discretion is a question of law [citation] requiring de novo review.’ ” ’ ” (K.L., at p. 979; see In re Marriage of F.M. & M.M. (2021) 65 Cal.App.5th 106, 116 [“ ‘The question of whether a trial court applied the correct legal standard to an issue in exercising its discretion is a question of law [citation] requiring de novo review.’ ”].) “[T]o the extent we are called upon to review the court’s factual findings, we apply the substantial evidence standard of review.” (Curcio v. Pels (2020) 47 Cal.App.5th 1, 12; see K.L., at p. 979.) Finally, with respect to the trial court’s application of the law to the facts, “ ‘[a]n abuse of discretion occurs when the ruling exceeds the bounds of reason.’ ” (Perez v. Torres-Hernandez (2016) 1 Cal.App.5th 389, 396; see In re Marriage of G. (2017) 11 Cal.App.5th 773, 780.) In this appeal, Husband expressly concedes the evidence is sufficient to support the trial court’s factual findings. Thus, the only questions presented involve whether the trial court applied the correct legal standard, which we review de novo, and whether the trial court’s application of the law to the undisputed facts exceeded the bounds of reason. As we explain, we find no abuse of discretion on this record. B. Section 6305 Governs the Granting of Separate Orders That Have the Effect of a Mutual Protective Order Husband’s primary contention on appeal is that section 6305 does not apply when two competing petitions allege different incidents of domestic violence as the basis for seeking a protective order under the DVPA. Husband believes that in such cases “each petition for protection must be determined on its own merits and independent of the other,” regardless of whether the petitions are heard separately or together. Thus, 6 according to Husband, the trial court misunderstood the scope of its discretion to the extent it believed section 6305 constrained its ability to grant both Husband’s and Wife’s competing petitions in this case. We acknowledge that the limited published decisions addressing this point are divided. In Conness v. Satram (2004) 122 Cal.App.4th 197 (Conness), the First Appellate District concluded two orders entered close in time to each other, but following separate hearings on different days, did not fall under the definition of a mutual order for purposes of section 6305, despite the fact the orders together resulted in a restraining order in favor of each party to the dispute. (Id. at pp. 202-205.) However, more recently, in Melissa G. v. Raymond M. (2018) 27 Cal.App.5th 360 (Melissa G.), the Second Appellate District held that, “[a]s used in section 6305, the phrase ‘mutual order’ may refer to a single order restraining two opposing parties . . . or two separate orders which together accomplish the same result as a single order.” (Id. at p. 368.) Husband contends that Melissa G. was wrongly decided. For the reasons we set forth below, we disagree. First, it is a codified maxim of jurisprudence that “[t]he law respects form less than substance.” (Civ. Code, § 3528.) Thus, “[o]n appeal, the substance and effect of the order controls, not its label.” (Brown v. Wells Fargo Bank, NA (2012) 204 Cal.App.4th 1353, 1356; Gaines v. Fidelity National Title Ins. Co. (2016) 62 Cal.4th 1081, 1092-1094 [“The label the trial court uses is not dispositive of the inquiry,” and the reviewing court will look to the functional nature of an order to determine whether a statute applies].) In our view, this consideration strongly weighs in favor of the interpretation adopted in Melissa G. Two separate orders that collectively accomplish the same result as a single 7 mutual restraining order are the functional equivalent of a mutual restraining order. To declare that two separate orders cannot constitute a “mutual restraining order” under these circumstances would require us to ignore their substantive, legal effect on the rights of the parties in favor of their form or label. Second, “ ‘ “[t]he fundamental purpose of statutory construction is to ascertain the intent of the lawmakers so as to effectuate the purpose of the law,” ’ ” and “ ‘ “ ‘ “we ‘ “select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute . . . .” ’ ” ’ ” ’ ” (Carrasco v. State Personnel Bd. (2021) 70 Cal.App.5th 117, 139; Select Base Materials v. Board of Equal. (1959) 51 Cal.2d 640, 645.) It is undisputed that one of the primary purposes of section 6305 is to “hel[p] ensure that a mutual order is the product of the careful evaluation of a thorough record and not simply the result of the moving party yielding to the other party’s importunities or the court deciding that a mutual order is an expedient response to joint claims of abuse.” (Conness, supra, 122 Cal.App.4th 197 at p. 204; Melissa G., supra, 27 Cal.App.5th at p. 369.) In our view, the interpretation adopted in Melissa G. most effectively promotes this legislative purpose. It would ensure that the trial court engages in the contemplated “careful evaluation of a thorough record” in all cases in which parties have competing petitions seeking DVPA restraining orders; whereas the contrary view would permit a trial court or a party to avoid the required analysis simply by calendaring or noticing competing petitions for separate hearings. We fail to see how the recognized legislative purpose of section 6305 would be advanced by an interpretation that permits the parties or trial court 8 to avoid the higher evidentiary burden simply through fortuitous calendaring choices by the clerk’s office or intentional or unintentional scheduling of hearings on each party’s request for DVPA restraining orders on different dates or times. Third, we find no support in the statute or case authority for Husband’s suggestion that the Legislature intended section 6305 to apply only in situations where the parties seek competing restraining orders based upon the same alleged incident of domestic violence. The DVPA expressly contemplates that a single restraining order may be based upon multiple acts of abuse. (§ 6300, subd. (a) [authorizing an order to issue based upon “reasonable proof of a past act or acts of abuse”].) More importantly, the provision of the Penal Code that was expressly incorporated into section 6305, states that the trial court should consider “the history of domestic violence between the persons involved” in determining which party should be deemed the primary or dominant aggressor. (Pen. Code, § 836, subd. (c)(3).) This provision would be rendered entirely superfluous if section 6305 was intended to apply only to situations in which a single incident of domestic violence is alleged in two separate petitions. “ ‘An interpretation that renders statutory language a nullity is obviously to be avoided.’ ” (Toulumne Jobs & Small Business Alliance v. Superior Court (2014) 59 Cal.4th 1029, 1039; Scher v. Burke (2017) 3 Cal.5th 136, 146 [“we ordinarily construe enactments to avoid rendering any provision superfluous”].) Thus, we decline to adopt Husband’s interpretation here.2 2 We also note that Husband’s position on appeal overlooks the fact that his petition expressly sought a DVPA restraining order based upon the same incident alleged as the basis for Wife’s petition. In closing arguments, Husband expressly conceded that [footnote continued on next page] 9 Finally, we do not believe that our interpretation of section 6305 creates the hypothetical procedural conflicts suggested by Husband or the Court of Appeal in Conness, supra, 122 Cal.App.4th 197. Husband argues that we should avoid an interpretation of the statute that results in disparate treatment of similarly situated litigants. We agree, but we believe it is Husband’s interpretation that creates the potential for this result. Under Husband’s interpretation, one party could simply wait for the issuance of an order on the opposing party’s petition, immediately file a new petition against the opposing party, and effectively achieve the same result as a mutual restraining order without being subject to the same level of scrutiny as if the petitions had been heard together. In contrast, holding that competing petitions for DVPA restraining orders must be subject to section 6305, regardless of whether they are heard together or separately ensures that in every case the same standard is applied regardless of how the trial court calendars the matter in any given case. We also respectfully disagree with our colleagues in Conness that requiring compliance with section 6305, even where petitions are heard separately, creates a “procedural snarl” that trial courts are not equipped to unravel. (Conness, supra, 122 Cal.App.4th at p. 203.) The Court of Appeal in Conness hypothesized that a party who had already obtained a restraining order could “thwart [the opposing party’s] effort the most recent incident of alleged abuse upon which both petitions were based was the October 28, 2019 incident. Thus, even if we agreed with Husband’s interpretation of section 6305, the trial court would still have been required to conduct an analysis under section 6305, and its discussion of which party should be considered the “primary aggressor” would not suggest an erroneous application of the law. 10 to obtain a second, ‘mutual,’ order by the simple expedient of failing to appear”; that a trial court would have difficulty retroactively applying section 6305 to an order that had already been issued; or that difficulties might arise when a subsequent petition is filed in a different county. (Conness, at pp. 202-203.) However, we believe the trial court is well equipped to deal with any such concerns. DVPA restraining orders are not permanent orders. Instead, they are “subject to termination or modification by further order of the court,” either upon stipulation or after a noticed hearing (§ 6345, subds. (a), (d)); and, such a termination or modification is proper “upon a showing that there has been a material change in the facts upon which the injunction or temporary restraining order was granted . . . or that the ends of justice would be served by the modification or dissolution of the injunction or temporary restraining order” (Code Civ. Proc., § 533; Loeffler v. Medina (2009) 174 Cal.App.4th 1495, 1503-1504 [Code of Civil Procedure section 533 applies to the dissolution or modification of DVPA restraining orders.]). Moreover, when petitioning for a DVPA restraining order, a party is required to disclose the existence of any other restraining orders currently in place as well as any other court cases involving the parties (Jud. Council Form DV-100). Thus, to the extent a DVPA restraining order has already been issued in favor of one party, the trial court need not do any more than provide notice that the hearing on the subsequently filed petition will also address modification or termination of that prior order to avoid the perceived procedural hurdles envisioned in Conness, supra, 122 Cal.App.4th 197. At the hearing, the trial court can then evaluate the competing 11 petitions under section 6305 and, if necessary, terminate a prior order, issue a new mutual restraining order, and make the necessary findings of fact in support of such an order. Notice of the intent to consider modification or termination of the prior order also seems sufficient to dissuade any party from willingly refusing to appear. While it is true that the failure of one party to appear would prevent the issuance of a mutual restraining order, the absent party would risk termination of any prior order and issuance of a new order in favor of the opposing party. (§ 6345, subd. (d).) Under such circumstances, the incentive for a party to attempt to hold the proceedings hostage by refusing to appear would seem minimal. Finally, to the extent a prior DVPA restraining order has already been issued by a trial court in a different county, the trial court is already empowered to issue an order to show cause why the matter should not be transferred to the court that issued the original order. (Williams v. Superior Court (1989) 216 Cal.App.3d 378, 386 [trial court may order transfer of action after “a noticed motion or order to show cause”].) While transfer of the cause to a different county may represent an inconvenience to the subsequent petitioner, it represents no greater inconvenience than that imposed by the DVPA’s provisions for renewal of orders. (§ 6345 [providing for renewal of protective order after noticed motion].) For the above reasons, we agree with Melissa G. that section 6305 should apply to all cases in which parties present competing petitions for DVPA restraining orders, regardless of when the petitions are filed or calendared for hearing. Interpreting the statute in this manner promotes the legislative purpose of section 3605 by ensuring that 12 mutual restraining orders are not issued absent the careful scrutiny envisioned by the Legislature; ensuring that all parties similarly situated have their requests evaluated under the same standards; and avoiding the very conflicts identified by Husband that might arise as the result of different methods of calendaring used by different courts. Thus, we find no error in the trial court’s application of the law to the extent it believed it was constrained by the provisions of section 6305 in this case. C. Section 6305 Permits the Trial Court to Designate One Party the Dominant Aggressor Alternatively, Husband argues that, even if section 6305 applies, the trial court abused its discretion in applying the statute. In making this argument, Husband does not challenge the trial court’s factual findings or the sufficiency of those findings to support granting a DVPA restraining order in favor of Wife. Instead, Husband only argues that under section 6305, once the trial court determined both Husband and Wife to be aggressors, it was not permitted to choose between the two in granting relief to only one of them. We disagree. Husband’s argument was recently addressed and rejected in K.L., supra, 70 Cal.App.5th 965. As explained in that case, “in making [the findings required by section 6305,] the court ‘shall consider’ both the intent of the law protecting domestic violence victims and the specific circumstances of the history of domestic violence in the case before it. [Citation.] Specifically, the statute mandates that the court determine which of the parties is the ‘most significant’ aggressor. [Citation.] Such a determination requires that the acts of the parties be weighed against each other. As a result, in 13 deciding whether mutual restraining orders should issue, the trial court must consider the parties’ respective alleged acts of domestic violence in concern, and not separately . . . .” (Id. at p. 979.) We agree with K.L. that the plain words of the statute clearly contemplate the trial court will: weigh the acts of the parties; determine whether one of the parties should be considered the primary or dominant aggressor; and issue a mutual restraining order only in the event neither party can fairly be characterized as the primary aggressor. In reply, Husband acknowledges the holding in K.L., supra, 70 Cal.App.5th 965, but claims that even if a trial court is permitted to weigh the acts of the parties, the trial court in this case still abused its discretion by failing to make factual findings with respect to each of the factors identified in section 6305. However, this argument ignores the fact that section 6305 acts only to limit the issuance of a mutual restraining order. The presence of the statutory factors and requirement of detailed factual findings are necessary prerequisites to a grant of mutual relief. (§ 6305, subd. (a); K.L., supra, 70 Cal.App.5th at p. 979 [“[T]he language of the statute makes clear that mutual restraining orders are the exception, and ‘shall not issue’ unless the trial court makes specific findings . . . .”].) Nothing in the statute mandates the issuance of a mutual restraining order. Nor does the statute require detailed findings of fact when the court declines to issue a mutual restraining order. In this case, the trial court granted Wife’s petition for a DVPA restraining order and denied Husband’s competing petition. While it was appropriate for the trial court to consider the factors set forth in section 6305 in order to determine whether granting mutual relief would be appropriate, the trial court was not required to make detailed 14 factual findings because it ultimately decided not to grant mutual relief. Because section 6305 does not impose any requirements when denying relief, the trial court was required only to follow the general rule applicable to all petitions and provide “a brief statement of the reasons for the decision in writing or on the record.” (§ 6340, subd. (b).) The trial court clearly did so here, expressly stating on the record that it considered Husband to be “the primary aggressor in this case,” notwithstanding the fact that it also believed Wife had been a primary aggressor with respect to one of the alleged incidents. Thus, the trial court did not abuse its discretion by considering whether Husband should be considered a dominant or primary aggressor within the meaning of section 3605. Nor did the trial court abuse its discretion by failing to make detailed factual findings on all factors referenced in section 3605, since such findings are not required where the trial court does not grant mutual relief. D. Denying Husband’s Custody Request Was Not an Abuse of Discretion Finally, Husband contends that, separate from the issue of whether a DVPA restraining order was appropriate, the trial court abused its discretion in denying his request for custody of his children. According to Husband, the trial court was mandated by section 6304 to consider the children’s welfare when denying his petition but failed to do so. We disagree. Initially, we note that Husband has conflated two separate issues on appeal, arguing that the trial court abused its discretion because it “did not consider whether the issuance of a protective order, to protect the children from Wife’s domestic violence, was appropriate” and thereafter repeatedly arguing that the trial court should have, at the very 15 least, issued a protective order to protect his children from Wife. However, the question of whether the trial court should have issued a protective order for the purpose of protecting the children from Wife is distinct from the question of whether the trial court should have issued a custody order in Husband’s favor. With respect to the first question, the record shows that Husband never asked the trial court to issue a restraining order for the purpose of protecting his children. His petition requested a restraining order only to protect himself, despite having the option to include his children as part of his request. Even at the time of the hearing, Husband expressly acknowledged in his closing argument that his request for a restraining order did not include his children. Thus, Husband never raised the issue in the trial court proceedings, and we decline to consider whether such an order would have been appropriate in this case. (Franz v. Board of Medical Quality Assurance (1982) 31 Cal.3d 124, 143 [“Appellate courts generally will not consider matters presented for the first time on appeal.”]; Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th 657, 699 [same].) Instead of seeking a restraining order for the protection of his children, Husband’s petition requested the trial court change the current custody arrangement between the parties in order to award him sole legal and physical custody of his children. Thus, the only issue the trial court was called upon to decide with respect to the children was whether awarding Husband sole custody of his children was appropriate. The trial court denied Husband’s custody request; referred the matter for the relevant child welfare services agency to conduct an investigation; and set the matter for a hearing on the issue 16 of custody pursuant to section 3027.3 It is this decision that we review on appeal and, as we explain, the record clearly shows the trial court did not abuse its discretion. Following an extensive evidentiary hearing, the trial court made affirmative findings that Husband committed domestic violence within the meaning of section 3044. It also made findings that, even assuming Wife had committed acts of domestic abuse against the children in the past, Husband had been “grossly derelict” in failing to take any action to protect his children at the time of these events. Finally, the trial court found that Husband had been “grossly negligent” for leaving loaded firearms within access of his minor children. Husband expressly concedes the evidence was sufficient to support these findings on appeal. Given these findings, the trial court could reasonably conclude that Husband, as the party requesting a change of custody, had not met his burden to show that such an order was in the children’s best interest. (In re Marriage of Mehlmauer (1976) 60 Cal.App.3d 104, 109 [“[T]he moving party [bears] the burden of showing that the best interests of the child require[s] the sought custody change.”].) While Husband complains that the trial court also made findings that Wife had previously abused the children, he ignores the fact that the trial court expressly referred the matter to the relevant child welfare agency for further investigation and set the matter for a further hearing to consider any necessary orders upon completion of that investigation. This procedure is expressly authorized by statute whenever the trial court 3 Section 3027, subdivision (b), provides in pertinent part: “If allegations of child abuse . . . are made during a child custody proceeding, the court may request that the local child welfare services agency conduct an investigation of the allegations . . . . Upon completion of the investigation, the agency shall report its findings to the court.” 17 develops concerns regarding a child’s safety during a custody hearing (§ 3027) and Husband has not explained why such an order was insufficient to address any perceived safety concerns in this case. As such, Husband has failed to show the trial court abused its discretion in denying his custody request. IV. DISPOSITION The order is affirmed. Respondent to recover her costs on appeal. NOT TO BE PUBLISHED IN OFFICIAL REPORTS FIELDS J. We concur: McKINSTER Acting P. J. SLOUGH J. 18	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483699/	11/14/2022 IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON Assigned on Briefs October 3, 2022 JOHN E. SULLIVAN, JR. GST EXEMPT TRUST ET AL. v. FRANK G. SULLIVAN ET AL. Appeal from the Probate Court for Shelby County No. PR020125 Kathleen N. Gomes, Judge ___________________________________ No. W2022-00518-COA-R3-CV ___________________________________ This case concerns the administration of a generation-skipping exempt trust. On review of the record, we conclude that the trial court’s order is not a final judgment, so as to confer subject matter jurisdiction on this Court. Specifically, the trial court did not adjudicate: (1) the parties’ requests for attorney’s fees; (2) Appellees’ prayer to remove David M. Sullivan as trustee; (3) Appellees’ motion to disqualify David M. Sullivan from acting as legal counsel for the Trust; or (4) Trustee’s motion for sanctions against Appellees and Appellees’ legal counsel. Appeal dismissed. Tenn. R. App. 3 Appeal as of Right; Appeal Dismissed KENNY ARMSTRONG, J., delivered the opinion of the court, in which FRANK G. CLEMENT, JR., P.J., M.S., and JOHN W. MCCLARTY, J., joined. David M. Sullivan and Paul Royal, Memphis, Tennessee, for the appellant, John E. Sullivan, Jr. GST Exempt Trust. Janet Davis Lamanna, J. Mark Griffee, and Brent R. Watson, Memphis, Tennessee, for the appellees, Frank G Sullivan and John Sullivan, III. MEMORANDUM OPINION1 1 Rule 10 of the Rules of the Court of Appeals of Tennessee provides: This Court, with the concurrence of all judges participating in the case, may affirm, reverse or modify the actions of the trial court by memorandum opinion when a formal opinion would have no precedential value. When a case is decided by memorandum opinion it shall be designated “MEMORANDUM OPINION,” shall not be published, and shall not be cited or relied on for any reason in any unrelated case. I. FACTUAL AND PROCEDURAL HISTORY The issues raised in this appeal involve the administration of a testamentary generation-skipping exempt trust established under the last will and testament of John E. Sullivan (“Testator”).2 The relevant background facts are not disputed. In April 2005, Testator executed a will that contained specific gifts of tangible personal property and directed that the residuary of his estate be allocated to marital and family trusts if his wife survived him, and to the family trust should his wife not survive him. The family trust established under Article Seven of Testator’s will provides, in relevant part: Upon the death of the last to die of my spouse and me (the “division date”), the trustee shall allocate the remaining principal of all trusts then held under this instrument, which is not otherwise effectively disposed of, among as many separate equal trusts as shall be necessary to establish one trust named for each child of mine who is either living on the division date or then deceased leaving one or more descendants then living. Each GST Exempt Trust named for a child of mine that is created pursuant to the provisions of this paragraph and the GST administration provisions of this instrument, or was created under Article Five, shall be administered as provided in Article Eight of this instrument. Any trust named for any of my children that is not GST Exempt shall be designated “non-exempt and shall be administered as provided in Article Nine of this instrument. 2 A testamentary trust is “[a] trust that is created by a will and takes effect when the settlor (testator) dies. Also termed trust under will. Cf. inter vivos trust; continuing trust (1). The provisions of an enforceable testamentary trust are set forth in a valid will. At minimum, therefore, there must have been compliance with the formal execution requirements applicable to wills generally. The testator and the attesting witnesses, for example, must have signed the will. A testamentary trust arises when title to a portion or all of the decedent's probate estate is transferred from the executor or personal representative to the testamentary trustee. Thus, a testamentary trust cannot arise until after the testator dies. Only then does the probate property come into existence, because only then does the will speak.” Trust, Black’s Law Dictionary (11th ed. 2019) (quoting Loring: A Trustee's Handbook § 2.1.2, at 45 (Charles E. Rounds Jr. & Charles E. Rounds III eds., 2008)). A generation-skipping trust is “[a] trust that is established to transfer (usu. principal) assets to a skip person (a beneficiary more than one generation removed from the settlor). The transfer is often accomplished by giving some control or benefits (such as trust income) of the assets to a nonskip person, often a member of the generation between the settlor and skip person.” Id. -2- Article Eight provides: Any GST Exempt Trust named for any child of mine shall be administered as follows: A. Commencing as of the division date, the trustee shall distribute to any one or more of my child and my child’s descendants living at the time of the distribution as much of the net income and principal of the trust, even to the extent of exhausting principal, as the trustee determines from time to time to be required for the health, education, maintenance and support of my child and my child’s descendants; provided, however, that: 1. The trustee shall add any undistributed net income to principal from time to time, as the trustee determines; 2. My primary concern during the period described in this paragraph is to preserve trust principal for ultimate distribution to the child’s descendants while at the same time reasonably providing for the health, education, maintenance and support of the child and the child’s descendants; 3. No distribution made under this paragraph to a descendant of the child shall be charged as an advancement; and 4. The trustee may make unequal distributions to the beneficiaries or may at any time make a distribution to fewer than all of them, and shall have no duty to equalize those distributions. B. If the child for whom the trust is named is living on the division date, then upon the death of the child, the trustee shall distribute the remaining principal of the trust to such one or more of my descendants as the child may appoint by will. C. At such time at or after the death of the child for whom the trust is named, or, if later, the division date, the trustee shall distribute the principal of the trust not otherwise effectively disposed of in equal shares to the then living descendants of the child per stirpes or if none to my then living descendants per stirpes, and each share shall be held in a separate trust and administered as set forth in Article Ten, paragraph B. Article Ten provides, in relevant part: B. Despite the preceding provisions of this instrument, upon termination of any trust at the end of its stated term under this instrument: -3- 1. Principal which is not effectively appointed and is otherwise distributable to a beneficiary for whom a trust then held hereunder is named shall be added to that trust; and 2. The trustee shall withhold any principal which is not effectively appointed and is otherwise required to be distributed to a beneficiary not covered by subparagraph 1 of this paragraph, who has not attained the age of forty (40) years or is disabled. The trustee shall retain any principal so withheld in a separate trust named for that beneficiary, to be administered as follows: a. The trustee shall distribute to the beneficiary as much of the net income and principal of the trust, even to the extent of exhausting principal, as the trustee determines from time to time to be required for the health, education, maintenance and support of the beneficiary. b. The trustee also shall distribute to the beneficiary if the beneficiary has attained the age of thirty (30) years, such amounts of the principal of the trust as the beneficiary may from time to time request by written instrument delivered to the trustee during the life of the beneficiary, but until such time as the beneficiary has attained the age of thirty-five (35) years, the beneficiary may not request more than one-half (1/2) in value of the principal of the trust determined as of the date the beneficiary has attained the age of thirty (30) years. c. The trustee also shall distribute to the beneficiary if the beneficiary has attained the age of thirty-five (35) years, such amounts of the principal of the trust as the beneficiary may from time to time request by written instrument delivered to the trustee during the life of the beneficiary, but until such time as the beneficiary has attained the age of forty (40) years, the beneficiary may not request more than one-half (1/2) in value of the principal of the trust determined as of the date the beneficiary has attained the age of thirty-five (35) years. d. The trustee also shall distribute to the beneficiary if the beneficiary has attained the age of forty (40) years, such amounts of the principal of the trust, even to the extent of exhausting the principal, as the beneficiary may from time to time request by written instrument delivered to the trustee during the life of the beneficiary, even to the extent of exhausting principal, and upon distribution of all trust assets, the trust shall terminate. e. Upon the death of the beneficiary for whom the trust is -4- named before withdrawal of the entire balance or complete distribution of the trust, or on the division date if that occurs after the death of the child, the trust shall terminate and the trustee shall distribute the principal of the trust as follows: (1) If the child is living on the division date, to such one or more of the child’s descendants as the child may appoint by will; or (2) In default of effective appointment, in equal shares to the then living descendants of the child, per stirpes, or, if none, to my then living descendants, per stirpes and each share shall be held in a separate trust and administered as set forth in this paragraph B. Testator died in August 2019. In October 2019, the generation-skipping exempt trust (“the Trust”) established for one of Testator’s children, John E. Sullivan Jr. (Mr. Sullivan), received its first distribution from Testator’s estate. In 2020, Mr. Sullivan made several distributions from the Trust to his children, Frank G. Sullivan (“FGS”) and John E. Sullivan, III (“JES”), and in May 2020 Mr. Sullivan appointed David M. Sullivan as co- trustee and successor trustee of the Trust. Mr. Sullivan died in November 2020, and David M. Sullivan (“Trustee”) assumed duties as the sole trustee. JES was 35 years of age when Mr. Sullivan died; FGS was 33. They each had one minor child (collectively, “the great- grandchildren”). In August 2021, Trustee filed a complaint for declaratory judgment against FGS and JES (together, “Appellees”) in the Probate Court for Shelby County. In his complaint, Trustee asserted that the controversy between the parties concerned: (1) [Appelees’] entitlement to immediate distributions of trust principal; (2) the withholding of distributions to [Appellees] who are disabled; (3) the share of the trust principal that [Appellees’] two minor children are entitled to receive and whether a guardian ad litem should be appointed for them; and (4) what reports, if any, the trustee must give to [Appellees] when the trust instrument provides (a) the trustee in his sole discretion shall make accountings to beneficiaries when he deems advisable, and (b) the trustee is not required to make any current reports or accountings to any court or beneficiaries. Trustee prayed for a declaratory judgment as to four counts:  Count I: Frank G. Sullivan’s requests for distributions  Count II: John E Sullivan, III’s requests for distributions  Count III: Whether the Appellees’ minor children are entitled to a share of the Trust principal -5-  Count IV: Frank G. Sullivan and John E. Sullivan, III’s requests for reports In his complaint, Trustee asserted that FGS and FES requested distribution of 50 percent of the Trust; that they were not entitled to such distributions under Article Ten (B); and that FGS and JES “would never be entitled to 50% of [the Trust] principal because at the time of his death John E. Sullivan, Jr. had four then living descendants and the Will provides each would receive an equal amount of trust principal. (Article Eight (C) at 5). The maximum amount each would receive is 25%., not the 50% [Appellees] claim[].” Trustee also asserted that a dispute has arisen with respect to whether FGS is disabled and therefore not entitled to any direct distribution under Article Ten (B)(2) because FGS “is ninety percent (90%) disabled and receives veterans benefits for his disabilities.” Trustee also prayed for a declaration that he was not required to make any reports or accountings other than as he, in his sole discretion, deemed advisable. Trustee additionally prayed for attorney’s fees and costs. Following a hearing on August 31, 2021, the trial court appointed a guardian ad litem (“GAL”) to investigate the allegations of the complaint and to determine the best interests of the great-grandchildren. The trial court’s instructions to the GAL included an order directing the GAL to advise the court whether an attorney ad litem was necessary to represent the great-grandchildren in the matter. In September 2021, Appellees filed a motion to dismiss for improper venue and a motion to set aside the trial court’s order appointing the GAL. The trial court denied the motions by orders entered on November 1, 2021. In October 2021, Appellees filed a motion to remove the Trustee pursuant to Tennessee Code Annotated section 35-15-706. Appellees asserted that Trustee was not only acting as a party to the lawsuit, but also as an attorney representing the Trust. They further asserted that Trustee was acting as the personal representative of Mr. Sullivan’s estate, and that a motion to remove him as personal representative was pending in the Chancery Court for Knox County. Appellees also filed a motion to disqualify Trustee from acting as counsel for the Trust pursuant to rules 1.8 and 3.7 of the Tennessee Rules of the Supreme Court. In November, Appellees filed subpoenas duces tecum to E-Trade Securities, LLC (E-Trade) and Thoroughbred Financial Services seeking all documents related to the Trust and Trustee from November 1, 2016, forward. On November 23, 2021, Trustee filed motions in his individual capacity and as Trustee seeking a protective order; to quash subpoenas for financial records; for sanctions; and for a restraining order and temporary injunction. In his motion, Trustee asserted that, under the Trust instrument, Appellees were not entitled to the financial information sought and prayed for a protective order an injunction prohibiting “discovery be conducted related to the Trust’s financial condition or records, until the Court issues a ruling on the merits of the Declaratory Judgment -6- Complaint.” He also prayed for sanctions against Appellees and Appellees’ counsel for bad faith and misrepresentation about the subpoenas. Appellees filed their answer on November 24, 2021. Appellees generally denied Trustee’s positions. They prayed for a declaration that they are the only two “current and mandatory beneficiaries of the Trust”; that they are not disabled; that they are entitled to a distribution of 50 percent of the Trust principal at age 30 and the remainder at age 40; that Trustee be required to account for Trust assets and expenditures; for removal of Trustee and appointment of a successor trustee by Appellees; and for attorney’s fees. Following a November 29 hearing by Zoom on Trustee’s motion to quash subpoenas and for a temporary restraining order, on December 2 the trial court directed the Trustee to provide the GAL with information about the Trust assets by December 13, 2021, and ordered that the information remain confidential pending further orders of the court. The trial court ordered the parties to conduct no discovery pending further orders and set the declaratory judgment action to be heard on January 24, 2022. On December 2, the trial court also entered an order granting Trustee’s motion for a temporary restraining order and to quash the subpoenas for financial records. On December 7, 2021, Trustee filed a notice of compliance with the trial court’s order to provide financial records to the GAL. The GAL filed her initial report on January 6, 2022, and a corrected report on January 18.3 The GAL determined that the Trust required distribution of the Trust assets per stirpes and not per capita, and that the great- grandchildren therefore were not entitled to a share of the Trust. She also determined that the appointment of an attorney ad litem was not appropriate and that, with respect to the Trustee’s duty to report, “the [c]ourt must determine whether the Trustee is justified in withholding the information from the beneficiaries, or whether it is being done to control, harass or punish the beneficiaries based on the perceptions the Trustee has regarding the beneficiaries.” On January 17, 2022, Trustee filed an objection to the GAL’s report and a motion to appoint an attorney ad litem for the great-grandchildren. He also filed a motion to amend the complaint for declaratory judgment to name the great-grandchildren as Appellees, and Appellees filed a response in opposition to Trustee’s motion to amend. The trial court heard the motions by Zoom on January 24, 2022. By order entered on February 10, the trial court denied Trustee’s motion to appoint an attorney ad litem for the great-grandchildren and Trustee’s motion to amend the complaint. On February 14, Appellees filed psychiatric reports attesting that neither Appellee suffered from a disability 3 In her original report, the GAL incorrectly identified the relevant article of the Trust. She corrected her report to correctly reference Article Eight. -7- that would prevent him from managing his financial affairs. On February 21, 2022, the trial court entered a “partial order” on Trustee’s complaint for declaratory judgment. The trial court determined that Article Eight (c) is not ambiguous, that it provides for distribution of the Trust to the “then living descendants of the children, per stirpes”; that FGS and JES are the only two beneficiaries of the trust; and that the interests in the Trust are to be held in separate sub-trusts and administered pursuant to Article Ten (B). The trial court determined that, since FGS and FES were both more than 30 years of age when Mr. Sullivan died, they each were entitled to an immediate distribution of one-half of his sub-trust principal and for additional distributions in accordance with Article Ten. The trial court ordered the Trustee to make immediate distributions from the sub-trusts “in accordance with the above so long as a medical affidavit completed by a physician, testifying that the Appellees are competent to manage their financial affairs, is filed with th[e] [c]ourt within thirty (30) days.” The trial court reserved any objections by the Trustee to the affidavits pending a hearing on the matter. It also reserved the Appellees’ request for attorney’s fees and costs and “a determination as to the timing, method, and disclosure of information by Trustee to the Appellees related to the Trust and their separate sub-trusts” to be decided at a hearing set for February 21, 2022. Following the February 21 hearing, the trial court entered its “second order” on Trustee’s complaint for declaratory judgment on March 31, 2022. The trial court reiterated the determinations made in its partial order and “affirmatively” found that neither FGS nor JES “are disabled, under legal disability, or inflicted with any condition (whether temporary or permanent) which substantially would impair their ability to transact ordinary business, and both are competent to receive distributions from the Trust.” The trial court ordered the Trustee to provide sufficient evidence of the Trust assets to allow Appellees to determine the value of their separate sub-trusts and distributions from the trusts “[c]ontemporaneously with the Trustee’s immediate distributions to the [Appellees.]” The trial court reserved the issue of attorney’s fees. The Trustee filed a notice of appeal to this Court on April 25, 2022. On April 26, Appellees filed a Tennessee Rules of Civil Procedure Rule 60 motion for correction of the trial court’s February 21 order on April 26, 2022. In their motion, Appellees submitted that the trial court’s order “incorrectly provided in paragraphs 8 and 9 that any requests made by each individually named [Appellee] for distributions from the Trust until age 35 or age 40 must be ‘for his health, education, maintenance, or support.’ However, the language in Article Ten (B) of the Trust does not limit [Appellees] to only requesting distributions for their health, education, maintenance or support.” The Trustee filed a motion to dismiss Appellees’ Rule 60 motion for lack of subject matter jurisdiction on May 5, asserting that, because a notice of appeal had been filed, the Rule 60 motion could only be granted with leave of this Court. This Court remanded Appellees’ motion for correction to the trial court on June 21, and the trial court denied the motion on July 25, 2022. -8- In the meantime, on April 28, 2022, Trustee filed a motion pursuant to Rule 62.04 of the Tennessee Rules of Civil Procedure to stay enforcement and execution of the trial court’s judgment pending appeal. Appellees filed a response in opposition to Trustee’s motion to stay on May 31. The trial court denied Trustee’s motion to stay by order entered June 30, 2022. Trustee filed a motion for expedited review of the order pursuant to Rule 7(a) of the Tennessee Rules of Appellate Procedure; we denied the motion on July 18, 2022. Briefing of the matter was completed on September 22, 2022. II. ISSUES The Trustee raises the following issues for our review, as stated in his brief: I. Whether the phrase per stirpes limits the designated multigenerational class of beneficiaries consisting of the then living descendants of decedent to only those descendants closest in kinship to decedent. II. Whether the trial court abused its discretion by denying trustee’s motions to amend the complaint and to appoint an attorney ad litem. Appellees raise the additional issues of whether this Court lacks subject matter jurisdiction because this appeal is time-barred under the Tennessee Rules of Appellate Procedure. It also asserts that it is entitled to attorney’s fees on appeal. III. STANDARD OF REVIEW Subject matter jurisdiction involves a court’s authority to adjudicate a matter, New v. Dumitrache, 604 S.W.3d 1, 14 (Tenn. 2020) (citations omitted), and is a threshold inquiry which must be addressed by the court. Johnson v. Hopkins, 432 S.W.3d 840, 844 (Tenn. 2013) (citation omitted). The construction of a will presents a question of law that we review de novo with no presumption of correctness. In re Estate of Clifton, 633 S.W.3d 557, 559 (Tenn. Ct. App. 2021). The construction of a trust instrument also is a question of law that we review de novo with no presumption of correctness for the trial court’s judgment. Harvey ex rel. Gladden v. Cumberland Trust and Inv. Co., 532 S.W.3d 243, 252 (Tenn. 2017). It is well-settled that a testator has the “absolute right” to direct the disposition of his/her property. Daugherty v. Daugherty, 784 S.W.2d 650, 653 (Tenn. 1990) (citations omitted). Accordingly, when construing a will the courts seek to ascertain and enforce the testator’s directions. Id. “The basic rule in construing a will is that the court shall seek to discover the intention of the testator, and will give effect to it unless it contravenes some rule of law or public policy. That intention is to be ascertained from the particular words used, from the context and from the general scope and purpose of the instrument.” Id. -9- (citations omitted). Id. (citations omitted). We will presume that every word contained in the will has some meaning and, when the will has been drafted by legal counsel, technical words will be construed in accordance with their technical meanings. Id. (citations omitted). With this standard in mind, we turn to the issues raised by the parties. IV. ANALYSIS Subject Matter Jurisdiction We turn first to whether we have subject matter jurisdiction over this appeal. Generally, a notice of an appeal as of right to this Court must be filed within 30 days of entry of the judgment appealed from. Tenn. R. App. P. 3(e) and 4(a). The failure to file a timely notice of appeal within 30 days of entry of the trial court’s final judgment precludes this Court from assuming subject matter jurisdiction. Ball v. McDowell, 288 S.W.3d 833, 836 (Tenn. 2009) (citations omitted). A late-filed notice of appeal must be dismissed for lack of jurisdiction. Arfken & Assoc., P.A. v. Simpson Bridge Co., Inc., 85 S.W.3d 789, 791 (Tenn. Ct. App. 2002) (holding that, absent intervening proceedings as provided by the Rules, the time for filing a notice of appeal runs from the date of entry of the trial court’s judgment disposing of all the claims of all the parties and not upon entry of a subsequent judgment that is identical to the first.) Appellees assert that the Trust’s March 31, 2022 notice of appeal in this case was untimely because it was filed beyond the 30-day period mandated by the Tennessee Rules of Appellate Procedure. Appellees contend that the Trust seeks to reverse the trial court’s February 21, 2022 order, which “is the order that conclusively determined the Trust beneficiaries and ordered that the distributions take place so long as affidavits from physicians were filed with the trial court within thirty (30) days.” They submit that the trial court’s March 31 order did not affect the relief granted on February 21, 2022, and that the issue regarding who should take under the Trust was “conclusively decided” by the court’s February order. Appellees rely on In Re Estate of Wilson, No. M2021-01549- COA-R3-CV (Tenn. Ct. App. May 11, 2022), for the proposition that the 30–day period ran from February 21 because the February order decided the parties’ substantive rights.4 It is well-settled that, under Rule 3 of the Tennessee Rules Appellate Procedure, we assume jurisdiction over appeals from final judgments only. Bayberry Assoc. v. Jones, 783 S.W.2d 553, 559 (Tenn. 1990). Rule 3(a) of the Tennessee Rules of Appellate Procedure provides, in relevant part: 4 Without addressing the merits of Appellees’ analysis of In Re Estate of Wilson, we observe that the Opinion is designated “Memorandum Opinion” as permitted by Rule 10 of the Rules of the Court of Appeals of Tennessee. In Re Estate of Wilson, No. M2021-01549-COA-R3-CV, 2022 WL 2195526, at 1 n.1 (Tenn. Ct. App. May 11, 2022). Therefore, it may not be relied on in any unrelated case. Id. Appellees’ reliance on Estate of Wilson accordingly is misplaced. - 10 - In civil actions every final judgment entered by a trial court from which an appeal lies to the Supreme Court or Court of Appeals is appealable as of right. Except as otherwise permitted in rule 9 and in Rule 54.02 Tennessee Rules of Civil Procedure, if multiple parties or multiple claims for relief are involved in an action, any order that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties is not enforceable or appealable and is subject to revision at any time before entry of a final judgment adjudicating all the claims, rights, and liabilities of all parties. This is not an interlocutory appeal pursuant to Rule 9 of the Tennessee Rules of Civil Procedure, and the trial court did not certify its March 31, 2022 order as final and appealable pursuant to Tennessee Rules of Civil Procedure Rule 54.02.5 We have long 5 This Court has observed: Rule 54.02 “is an exception to Rule 3 that permits the trial court, without permission from the appellate court, to certify an order as final and appealable, even if parts of the overall litigation remain pending in the trial court.” Johnson v. Nunis, 383 S.W.3d 122, 130 (Tenn. Ct. App. 2012). It allows “the trial court to convert an interlocutory ruling into an appealable order.” Mann v. Alpha Tau Omega Fraternity, 380 S.W.3d 42, 49 (Tenn. 2012). However, “the trial court's authority to direct the entry of a final judgment is not absolute.” Brentwood Chase Cmty. Ass’n v. Truong, No. M2014–01294–COA–R3– CV, 2014 WL 5502393, at 2 (Tenn. Ct. App. Oct. 30, 2014) (citing Crane v. Sullivan, No. 01A01–9207–CH–00287, 1993 WL 15154, at 1–2 (Tenn. Ct. App. Jan. 27, 1993)). “Rule 54.02 does not apply to all orders that are interlocutory in nature.” Konvalinka v. Am. Int’l Grp., Inc., No. E2011–00896–COA–R3–CV, 2012 WL 1080820, at 3 (Tenn. Ct. App. Mar. 30, 2012). An order can only be certified as final in limited circumstances. Johnson, 383 S.W.3d at 130. Because Rule 54.02 provides that a trial court may “direct the entry of a final judgment as to one or more but fewer than all of the claims or parties,” the order certified as final must be dispositive of an entire claim or a party. Bayberry, 783 S.W.2d at 558. In other words, the order at issue must dispose of at least one entire claim or resolve all of the claims against at least one party. Konvalinka, 2012 WL 1080820, at 3. “The purpose of the certification rule is to enhance judicial economy and ‘to prevent piecemeal appeals in cases which should be reviewed only as single units.’ ” Cates v. White, No. 03A01–9104–CH–00130, 1991 WL 168620, at 3 (Tenn. Ct. App. Sept. 4, 1991) (quoting Curtiss–Wright Corp. v. General Electric Co., 446 U.S. 1, 10 (1980) ). Whether a particular order disposes of a distinct and separable “claim” that is subject to Rule 54.02 certification is a question of law reviewed de novo. Ingram, 379 S.W.3d at 238; Brown v. John Roebuck & Assocs., Inc., No. M2008–02619–COA–R3– CV, 2009 WL 4878621, at 5 (Tenn. Ct. App. Dec. 16, 2009). If the trial court certifies a judgment as final, but it is not conclusive as to an entire claim or party, an appeal from it will be dismissed even though the trial court decided to treat the order as final. FSG Bank, N.A. v. Anand, No. E2011–00168–COA–R3–CV, 2012 WL 554449, at 4 (Tenn. Ct. App. Feb. 21, 2012). Without a final adjudication of at least one claim, Rule 54.02 is simply inapplicable. King v. Kelly, No. M2015–02376–COA–R3–CV, 2016 WL 3632761, at 4 (Tenn. Ct. App. June 28, 2016), perm app. denied (Tenn. Jan. 19, 2017). - 11 - stated that, absent an exception provided by the Rules or by statute, a judgment is final when it adjudicates all the claims asserted in the case and leaves “nothing else for the trial court to do.” Discover Bank v. Morgan, 363 S.W.3d 479, 488 n.17 (Tenn. 2012) (quoting In re Estate of Henderson, 121 S.W.3d 643, 645 (Tenn. 2003); Davis v. Davis, 224 S.W.3d 165, 168 (Tenn. Ct. App. 2006) (quoting Mosley v. Mosley, No. E2000–01445–COA–R3– CV, 2000 WL 1859006, at 2 (Tenn. Ct. App. Dec. 20, 2000) (quoting Hoalcraft v. Smithson, 19 S.W.3d 822 (Tenn. Ct. App. 1999))). Upon review of the record in this case, we have determined that this Court does not have subject mater jurisdiction over this appeal because the trial court has not entered a final judgment in the matter. As noted above, the trial court specifically reserved the parties’ requests for attorney’s fees in its February 21 and March 31, 2022 orders. “‘This Court has concluded on several occasions that an order that fails to address an outstanding request for attorney’s fees is not final.’” E Sols. for Buildings, LLC v. Knestrick Contractor, Inc., No. M201700732COAR3CV, 2018 WL 1831116, at 2 (Tenn. Ct. App. Apr. 17, 2018) (quoting City of Jackson v. Hersh, No. W2008–02360–COA–R3–CV, 2009 WL 2601380, at 4 (Tenn. Ct. App. Aug. 25, 2009)). It also appears from the record transmitted to this Court that Appellees’ prayer to remove David M. Sullivan as trustee, which Appellees asserted by motion in October 2021 and in their answer in November 2021, has not been adjudicated by the trial court. It further appears that Appellees’ October 2021 motion to disqualify David M. Sullivan from acting as legal counsel for the Trust has not been adjudicated by the trial court. It also appears that the trial court has not adjudicated Trustee’s November 2021 motion for sanctions against Appellees and Appellees’ legal counsel. Accordingly, the trial court has not entered a final, appealable order in this case, and we do not have subject matter jurisdiction over this appeal. V. CONCLUSION For the foregoing reasons, the appeal is dismissed, and the case is remanded to the trial court for further proceedings. Costs of the appeal are taxed one-half to the Appellees, Frank G Sullivan and John Sullivan, III, and one-half to the Appellant, John E. Sullivan, Jr. GST Exempt Trust, for all of which execution may issue if necessary. s/ Kenny Armstrong KENNY ARMSTRONG, JUDGE E Sols. for Buildings, LLC v. Knestrick Contractor, Inc., No. M201700732COAR3CV, 2018 WL 1831116, at *3 (Tenn. Ct. App. Apr. 17, 2018). - 12 -	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483701/	11/14/2022 IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE AT JACKSON Assigned on Briefs October 4, 2022 CHRISTOPHER BROWN v. STATE OF TENNESSEE Appeal from the Criminal Court for Shelby County No. 13-05989 J. Robert Carter, Jr., Judge ___________________________________ No. W2021-01331-CCA-R3-PC ___________________________________ The Petitioner, Christopher Brown, was convicted of one count of first degree murder and three counts of aggravated assault by a Shelby County jury. The Petitioner later filed a petition for post-conviction relief alleging that he was denied the effective assistance of counsel when trial counsel failed to disclose discovery materials and failed to call particular witnesses. The post-conviction court denied the petition after an evidentiary hearing. On appeal, we affirm the judgment of the post-conviction court. Tenn. Rule App. P. 3 Appeal as of Right; Judgment of the Criminal Court Affirmed TOM GREENHOLTZ, J., delivered the opinion of the court, in which ROBERT H. MONTGOMERY, JR., and J. ROSS DYER, JJ., joined. Shae Atkinson, Memphis, Tennessee, for the appellant, Christopher Brown. Herbert H. Slatery III, Attorney General and Reporter; Hannah-Catherine Lackey, Assistant Attorney General; Amy P. Weirich, District Attorney General; and Leslie Byrd, Assistant District Attorney General, for the appellee, State of Tennessee. OPINION FACTUAL BACKGROUND Following a jury trial, the Petitioner was found guilty of first degree murder and three counts of aggravated assault, and he received a total effective sentence of life imprisonment plus ten years. State v. Brown, No. W2015-00990-CCA-R3-CD, 2016 WL 1446221, at 1 (Tenn. Crim. App. Apr. 12, 2016), perm. app. denied (Tenn. Sept. 22, -1- 2016). On the Petitioner’s direct appeal, this Court summarized the proof introduced at his trial: At trial, Carolyn Pratcher testified that the [Petitioner] was the father of her thirteen-year-old son. She acknowledged that her relationship with the [Petitioner] had been a difficult one. She stated that she lived with the [Petitioner] until 2013, when he kicked her out of their house on Hanley Street. Carolyn recalled that, before moving to Hanley Street, she and the [Petitioner] had lived at Kingsgate Apartments in 2011. In October of that year, she and the [Petitioner] had a disagreement that turned physical. Carolyn explained that there had been an apartment on fire next door and, when she told the [Petitioner] about it, he said, “B * * , I told you to stay out of other people’s business.” The [Petitioner] started pulling her hair and dragging her upstairs. Although she got away from the [Petitioner] and ran out the door, she did not want to leave her children there and went back for them. Her sixteen-year-old son eventually called the police, and the [Petitioner] was arrested and later convicted in connection with the assault. Carolyn recalled that sometime after this incident, she moved to Hanley Street with the [Petitioner]. However, in June 2013, the [Petitioner] “put [her] out,” and she moved in with Mr. Fips, who lived four or five houses down from the [Petitioner]. Carolyn testified that the [Petitioner] began “sending text messages, threatening messages.” She also recalled that, on one occasion after she moved in with Mr. Fips, the [Petitioner] came into Mr. Fips’s house unexpectedly. Mr. Fips told the [Petitioner] to walk outside so they could talk. Once outside, the two men “had words,” but they did not have a physical confrontation. Carolyn also stated that, around June 7, 2013, Mr. Fips’s tires were slashed. The [Petitioner] later admitted to Carolyn that he slashed Mr. Fips’s tires. Carolyn stated that she had additional problems with the [Petitioner] on June 17, 2013. She explained that the [Petitioner] called her and said that he was going to give her some money for their son’s birthday. However, when she went to the [Petitioner]’s house to get the money, the [Petitioner] grabbed her around the neck and tried to drag her into the house. The [Petitioner] told her, “I’m going to get [your] a [.]” Carolyn recalled that the [Petitioner] only let her go when their son ran across the street. She stated that she had no physical injuries from this incident. Carolyn testified that, on June 22, 2013, she went to the dog track with Mr. Fips; her aunt, Ida Pratcher; and another man, Michael Douglas. The group left the dog track between 9:00 p.m. and 10:00 p.m. Upon returning -2- to Memphis, they stopped at Church’s Chicken and a convenience store. Carolyn recalled that Mr. Fips was driving his SUV when they turned onto Hanley Street and she was sitting in the front passenger seat. As Mr. Fips drove past the [Petitioner]’s residence, Carolyn saw the [Petitioner] sitting on his front porch. She recalled that Mr. Fips was driving past the [Petitioner] “slowly” but that they did not say anything to the [Petitioner]. The [Petitioner] got off the porch and walked towards Mr. Fips’s vehicle, shining a light from his cell phone towards them. Carolyn stated that, when Mr. Fips saw the light, he put the vehicle in reverse and backed up. Mr. Fips rolled the driver’s side window down and told the [Petitioner] that he wanted to speak with him “man to man” about the text messages that the [Petitioner] sent him. Carolyn testified, “[T]hat’s when all the shooting just started.” She explained that the [Petitioner] stood about ten to fifteen feet away when he began shooting and that he shot into the vehicle approximately five times. Carolyn stated that neither she nor anyone else in Mr. Fips’s vehicle had a weapon. Moreover, Mr. Fips did not own a gun and was not known to carry a gun. Carolyn recalled that, when she heard the shots, she felt her arm “hurting and burning real bad” and that she tried to get out of the vehicle but that the door would not open. Carolyn said that Mr. Fips attempted to “drive off” but that he did not “make it in time enough.” When she got her car door open after the third or fourth try, Carolyn got out of the SUV and stood beside it. She wanted to reach in for Mr. Fips, who was not moving, but she was afraid that the [Petitioner] would shoot her again, so she ran behind an abandoned house. Carolyn recalled that the [Petitioner] chased her around the abandoned house several times. She had been shot twice, was losing a lot of blood, and felt like she was going to pass out, so she stopped running. At that time, the [Petitioner] caught up to her and grabbed her “around [the] neck.” He had something in his hand, but she could not tell if it was a knife or a gun. Carolyn testified that there were people outside, and some were calling 911. The [Petitioner] let her go and ran from the scene before police arrived. Carolyn spoke briefly to police and was then taken to the hospital. According to Carolyn, the [Petitioner] called her from California a couple of weeks after the shooting. During the call, the [Petitioner] stated that he used a .22 to shoot her and Mr. Fips. The [Petitioner] called Carolyn a second time after he was arrested and placed in jail. During the phone call, the [Petitioner] encouraged her to change her story and tell police that Mr. Fips had a gun and that “it was self[-]defense.” -3- On cross-examination, Carolyn acknowledged that there were other ways to get to Mr. Fips’s house that did not involve driving past the [Petitioner]’s residence. She stated that, although Mr. Fips drove slowly down Hanley Street, he was not looking for the [Petitioner]. She agreed that Mr. Fips was upset with the [Petitioner] about the text messages that the [Petitioner] had sent. She stated that Mr. Fips put his SUV in reverse and then in park and rolled his window down “the rest of the way” before he asked the [Petitioner] if they could talk. Carolyn’s aunt, Ida Pratcher, testified that on the day of the shooting she went to a casino in Arkansas with Carolyn, Mr. Fips, and Michael Douglas. Ida recalled that the group stayed at the casino for about an hour and a half and then returned to Memphis around 10:00 p.m. On the way home, Mr. Fips stopped at a store and at Church’s Chicken. Ida recalled that, as Mr. Fips drove down Hanley Street, she saw the [Petitioner] sitting on the porch of his house. When Mr. Fips saw the [Petitioner], he said, “[d]amn,” stopped the vehicle, and starting backing up. Mr. Fips said that the [Petitioner] wanted to talk to him, and when Mr. Fips stopped, the [Petitioner] came off the porch towards them. Mr. Fips asked the [Petitioner] why the [Petitioner] was following him and texting his phone. Ida stated that Mr. Fips was “fixing to open the door,” and she thought that the [Petitioner] came to the truck and “pushed, shut the door back up.” According to Ida, the [Petitioner] told Mr. Fips, “I told you mother f * * * * when I see you . . . mother f* * * * * when I texted you I told you mother f* * * * * when I see you again, I’m going to kill you.” Then, the [Petitioner] “started shooting.” Ida testified that she was in the back seat behind Mr. Fips and Mr. Douglas was in the back seat behind Carolyn. When the [Petitioner] began shooting into the truck, Ida “duck[ed]” down and yelled at Mr. Douglas to get out of the car. Ida heard Mr. Fips saying “ouch, ouch” and then saw him fall over. Ida testified that, as she followed Mr. Douglas out of the vehicle, she fell and hurt her knee and that the vehicle ran over the side of her foot. The vehicle then coasted down the street and ran into a curb before stopping. Ida stated that no one inside Mr. Fips’s vehicle had a gun, that no gunshots came from inside the vehicle, and that she was in fear when the [Petitioner] started shooting. Following the shooting, Ida was transported to the hospital and treated for a fractured ankle. She also identified the [Petitioner] in a photo lineup that night. On cross-examination, Ida stated that she did not know if Mr. Fips put the vehicle in park before the shooting began. She also said that the [Petitioner] never pointed the gun directly at her or Mr. Douglas. -4- Michael Douglas testified that he lived next door to Mr. Fips for the five months preceding Mr. Fips’s death. Mr. Douglas recalled that, on the day of the shooting, he went with Mr. Fips, Carolyn, and Ida to the dog track and estimated that they returned to Memphis around 10:00 p.m. Before going home, the group stopped at a liquor store, a convenience shop, and Church’s Chicken. Mr. Douglas stated that, before leaving the parking lot of Church’s Chicken, Mr. Fips looked at his cell phone and turned to Carolyn and asked, “[H]ow did he get my number?” Mr. Douglas recalled that, on Hanley Street, Mr. Fips “coasted” by the [Petitioner]’s house. Mr. Douglas heard Carolyn say, “[N]o you don’t have to do it like this here,” and then he saw someone “just shooting at the car[.]” Mr. Douglas testified that he heard approximately three gunshots. He stated that he did not know the [Petitioner] and could not identify the shooter because it was “dark down there.” Mr. Douglas recalled that he tried to open his door when the shooting started but the door would not open. He said Ida yelled at him to “get out of the car” and that they pushed at each other while trying to exit the vehicle. Mr. Douglas testified that he was afraid and that he fell after getting out of the vehicle. He then ran from the scene. Mr. Douglas testified that he did not have a weapon and that no one else inside the vehicle had a weapon. He further stated that he never knew Mr. Fips to carry a gun. On cross-examination, Mr. Douglas testified that Mr. Fips purchased two small bottles of liquor while at the corner store. He recalled that, when they were ready to leave Church’s Chicken, Mr. Fips took one of the bottles and “took a swallow of it[.]” Mr. Fips was looking at his cell phone, and he asked Carolyn, “[H]ow did he get my number?” Mr. Douglas agreed that it was dark outside by the time they returned to Hanley Street. He agreed that the interior light of Mr. Fips’s vehicle was off and that the driver’s window was partially down. Mr. Douglas recalled that Mr. Fips coasted down Hanley Street slowly, but he did not recall Mr. Fips’s putting the vehicle in reverse before the shooting began. Mr. Douglas agreed that there were other ways to get to Mr. Fips’s house from Church’s Chicken other than going past the [Petitioner]’s residence. Carolyn and the [Petitioner]’s thirteen-year-old son testified that, on June 17, 2013, he was standing across the street from the [Petitioner]’s house when he saw the [Petitioner] drag his mother “to the back of the house[.]” When he ran across the street to confront the [Petitioner], the [Petitioner] “walked off.” He testified that the [Petitioner] had his hands around Carolyn’s neck. -5- .... Dr. Miguel Laboy testified that he worked in the Office of the Medical Examiner in Memphis and that he performed Mr. Fips’s autopsy. Dr. Laboy determined the cause of death to be multiple gunshot wounds. Specifically, he found that Mr. Fips had two gunshot wounds to the chest, a gunshot wound to the right arm and buttock, and grazing wounds to the left hand and left arm. Dr. Laboy explained that the gunshot wounds to the chest fractured Mr. Fips’s ribs and perforated his lungs and heart. Brown, 2016 WL 1446221, at 3-7. Following the conclusion of the proof, the jury found the Petitioner guilty of one count of first degree premeditated murder and three counts of aggravated assault. Id. at 7. The Petitioner timely filed a direct appeal, and this Court affirmed the trial court’s judgment. Id. at 1. Our supreme court denied the Petitioner’s application for permission to appeal on September 22, 2016. Thereafter, the Petitioner filed a pro se petition for post-conviction relief, raising, among other claims, that he was denied the effective assistance of counsel in two areas: (1) trial counsel’s failure to call a ballistics expert in the Petitioner’s defense and (2) trial counsel’s failure to cross-examine the State’s witnesses properly. After an evidentiary hearing, the post-conviction court denied relief. The Petitioner appealed, arguing, in part, that his “post-conviction counsel had a conflict of interest that disqualified him from representing the Petitioner at the hearing[.]” Brown v. State, No. W2018-01705-CCA-R3- PC, 2020 WL 1877785, at 1 (Tenn. Crim. App. Apr. 15, 2020). On appeal, we agreed and remanded the case for a new evidentiary hearing. Id. at 1, 9. On remand, the Petitioner filed an amended petition in which he raised additional allegations of ineffective assistance of counsel. More specifically, the Petitioner alleged that trial counsel was ineffective in failing to provide the Petitioner with the defense investigator’s report and in not calling an individual named “Mac”1 as a witness at trial. The post-conviction court held a new evidentiary hearing, and it heard testimony from both the Petitioner and his trial counsel.2 1 The spelling of “Mac” varies throughout the record. We use the spelling adopted by the trial court and also by this Court in the first post-conviction appeal. 2 Of the grounds raised in his original and amended petitions, the Petitioner presents only three of those grounds for review by this Court. As such, we do not address the resolution of any other issue originally brought by the Petitioner, but not presented on appeal. See State v. Bristol, __ S.W.3d __, No. M2019-00531-SC-R11-CD, 2022 WL 5295777, 3 (Tenn. 2022) (“[A]n appellate court’s authority ‘generally will extend only to those issues presented for review.’” (quoting Tenn. R. App. P. 13(b)). -6- The Petitioner testified that trial counsel did not deliver to him any discovery materials. He said that he gave trial counsel the “ins and outs” of his case by letting him know that the killing was not premeditated. In particular, the Petitioner said that the victim “made like a gun play [on the night of the shooting] and the victim “scared [him] basically.” The Petitioner testified that, on the night of the shooting, the victim drove past his home, placed his SUV in reverse, and called out to the Petitioner to come to his vehicle. The Petitioner said that once he was at the victim’s vehicle, the victim threatened him and started reaching for something outside of the Petitioner’s view. Due to his fear, the Petitioner began shooting at the victim. The Petitioner asserted that there was one piece of evidence that would help his claim that he was threatened by the victim: the defense investigator’s report. When questioned about the report’s significance, the Petitioner testified that the report contained “favorable information that would have helped [him] at trial.” He concluded that the report “would prove that this wasn’t premeditation, [but] it was like swept under the rug.” The Petitioner also testified to the need for a ballistics expert. According to the Petitioner, he requested that trial counsel hire a ballistics expert to show that another gun was present at the time of the shooting. The Petitioner stated that the victim was shot from left to right, as the Petitioner stood outside of the driver’s side door and fired into the victim’s vehicle. However, the medical examiner testified that the victim had a wound in his right buttocks, and according to the Petitioner, there was “no way possible that [he] did that. No way possible.” The Petitioner asserted that had trial counsel hired a ballistics expert, “it would have prov[en] one of two things: it was another gun or it wasn’t.” The Petitioner also testified about text messages between the victim and Mac. The Petitioner asserted that, in these text messages, the victim said, “I need a showstopper for this Chris guy.” The Petitioner clarified that a “showstopper” was a gun. Because the Petitioner and the victim were not friends, the Petitioner reasoned that the victim was asking for a gun “to use on [the Petitioner].” The Petitioner said he hoped that trial counsel would call Mac to get a better understanding of the conversation that Mac had with the victim, but trial counsel never investigated the matter. The Petitioner also claimed that had Mac been present at trial, Mac would have shown that the victim “was plotting and planning to get a gun to do harm to [the Petitioner].” On cross-examination, the Petitioner conceded that he did not provide trial counsel with any information to help him investigate who, or where, Mac was. Trial counsel testified that he had been a public defender for 23 years and that he had conducted “dozens” of jury trials on serious felony cases, including homicide cases. In recalling the facts of the Petitioner’s case, trial counsel described the underlying situation as a “love triangle” that led to “several shots at night with people in the car.” Trial -7- counsel testified that the Petitioner’s version of events was that the victim, on the night of the shooting, “pistol played him. Like, acted like he [the victim] had a gun, but then he [the Petitioner] shot in fear.” Trial counsel testified that his strategy was to argue for conviction of a lesser- included offense. He claimed that “the State’s position was it was premeditated and intentional and ours was that it was not. That it was an act of fear, maybe even justifiable.” He acknowledged that the Petitioner’s case was difficult, as there were statements from eyewitnesses who knew the Petitioner and identified him. There was also proof from Ms. Pratcher identifying the Petitioner’s intent before the shooting and also claiming that the Petitioner chased her after the shooting. In addition, trial counsel testified that he lost the “battle” to exclude Rule 404(b) evidence and that there were “considerable priors.” Trial counsel stated that he attempted to establish a defense that the Petitioner believed the victim had a weapon in the vehicle on the night of the shooting. While being questioned about his investigation, trial counsel stated that he hired a defense investigator and that she spoke to at least one of the State’s witnesses before trial. He could not recall if the Petitioner had been given a copy of the report created by the investigator, but he noted that “as a general rule,” he gave “all of [his] investigations to [his] clients.” Trial counsel testified that he did not recall Ms. Pratcher’s statement to the investigator, but he recalled that her testimony was “damaging to the [Petitioner’s] case.” On re-direct examination, trial counsel acknowledged that he “probably should have” cross-examined Ms. Pratcher with the investigator’s report, “but [he] didn’t.” Although the Petitioner claimed a ballistics expert was discussed with trial counsel, trial counsel testified he did not “remember that at all.” On cross-examination, trial counsel testified that, if he believed an expert was needed in the Petitioner’s case, then he would have sought one. With respect to the issues surrounding Mac, trial counsel testified that he could not recall if he had any information to locate Mac, or if he had ever contacted Mac. Trial counsel recalled that the only information he had on Mac was “one text message and a phone number.” Nevertheless, trial counsel stated that at trial, he “got into” the victim looking for a “showstopper.” Upon the conclusion of the proof, the post-conviction court entered a written order denying the post-conviction petition. The court found that trial counsel’s “performance was [not] prejudicially deficient.” Accordingly, the court denied post-conviction relief. The Petitioner filed a timely appeal. -8- In this second appeal, the Petitioner challenges the post-conviction court’s denial of his request for relief, asserting that his trial counsel was ineffective in three areas: (1) trial counsel failed to provide the Petitioner with the defense investigator’s report before trial and failed to use the same report during cross-examination of Ms. Pratcher; (2) trial counsel failed to call a ballistics expert as a defense witness; and (3) trial counsel failed to investigate the victim looking for a “showstopper” before the shooting. The State asserts that the Petitioner failed to present proof to the post-conviction court to support the Petitioner’s ineffective assistance of counsel claims and that he is therefore not entitled to relief. We agree with the State, and for the reasons given below, we affirm the judgment of the post-conviction court. STANDARD OF APPELLATE REVIEW Our supreme court has recognized that “the first question for a reviewing court on any issue is ‘what is the appropriate standard of review?’” State v. Enix, __ S.W.3d __, No. E2020-00231-SC-R11-CD, 2022 WL 4137238, at 4 (Tenn. Sept. 13, 2022). As our supreme court has made clear, Appellate review of an ineffective assistance of counsel claim is a mixed question of law and fact that this Court reviews de novo. Witness credibility, the weight and value of witness testimony, and the resolution of other factual issues brought about by the evidence are entitled to a presumption of correctness, which is overcome only when the preponderance of the evidence is otherwise. On the other hand, we accord no presumption of correctness to the post-conviction court’s conclusions of law, which are subject to purely de novo review. Phillips v. State, 647 S.W.3d 389, 400 (Tenn. 2022) (citations omitted). ANALYSIS The Tennessee Post-Conviction Procedure Act provides an avenue for relief “when the conviction or sentence is void or voidable because of the abridgment of any right guaranteed by the Constitution of Tennessee or the Constitution of the United States.” Tenn. Code Ann. § 40-30-103. A post-conviction petitioner has the burden of proving his or her allegations of fact by clear and convincing evidence. Tenn. Code Ann. § 40-30- 110(f). For evidence to be clear and convincing, “it must eliminate any ‘serious or substantial doubt about the correctness of the conclusions drawn from the evidence.’” Arroyo v. State, 434 S.W.3d 555, 559 (Tenn. 2014) (quoting State v. Sexton, 368 S.W.3d 371, 404 (Tenn. 2012)). -9- Article I, section 9 of the Tennessee Constitution establishes that every criminal defendant has “the right to be heard by himself and his counsel.” Similarly, the Sixth Amendment to the United States Constitution, made applicable to the states by the Fourteenth Amendment, guarantees that all criminal defendants “shall enjoy the right . . . to have the [a]ssistance of [c]ounsel.” “These constitutional provisions guarantee not simply the assistance of counsel, but rather the reasonably effective assistance of counsel.” Nesbit v. State, 452 S.W.3d 779, 786 (Tenn. 2014). A petitioner’s claim that he or she has been deprived “of effective assistance of counsel is a constitutional claim cognizable under the Post-Conviction Procedure Act.” Moore v. State, 485 S.W.3d 411, 418 (Tenn. 2016); see also Howard v. State, 604 S.W.3d 53, 57 (Tenn. 2020). “To prevail on a claim of ineffective assistance of counsel, a petitioner must establish both that counsel’s performance was deficient and that counsel’s deficiency prejudiced the defense.” Moore, 485 S.W.3d at 418-19 (citing Strickland v. Washington, 466 U.S. 668, 687 (1984); Goad v. State, 938 S.W.2d 363, 369 (Tenn. 1996)). A petitioner may establish that counsel’s performance was deficient by showing that “‘counsel’s representation fell below an objective standard of reasonableness.’” Garcia v. State, 425 S.W.3d 248, 256 (Tenn. 2013) (quoting Strickland, 466 U.S. at 688). As our supreme court has also recognized, this Court must look to “‘all the circumstances’” to determine whether counsel’s performance was reasonable and then objectively measure this performance against “the professional norms prevailing at the time of the representation.” Kendrick v. State, 454 S.W.3d 450, 457 (Tenn. 2015) (quoting Strickland, 466 U.S. at 688). “If the advice given or services rendered by counsel are ‘within the range of competence demanded of attorneys in criminal cases,’ counsel’s performance is not deficient.” Phillips, 647 S.W.3d at 407 (quoting Baxter v. Rose, 523 S.W.2d 930, 936 (Tenn. 1975)). Notably, because this inquiry is highly dependent on the facts of the individual case, “[c]onduct that is unreasonable under the facts of one case may be perfectly reasonable under the facts of another.” State v. Burns, 6 S.W.3d 453, 462 (Tenn. 1999). In addition, a petitioner must establish that he or she has been prejudiced by counsel’s deficient performance such that counsel’s performance “‘render[ed] the result of the trial unreliable or the proceeding fundamentally unfair.’” Kendrick, 454 S.W.3d at 458 (quoting Lockhart v. Fretwell, 506 U.S. 364, 372 (1993)). In other words, the petitioner “must establish ‘a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different.’” Davidson v. State, 453 S.W.3d 386, 393-94 (Tenn. 2014) (quoting Strickland, 466 U.S. at 694). “‘A reasonable probability is a probability sufficient to undermine confidence in the outcome.’” Howard, 604 S.W.3d at 58 (quoting Strickland, 466 U.S. at 694). - 10 - Because a post-conviction petitioner bears the burden of establishing both deficient performance and resulting prejudice, “a court need not address both concepts if the petitioner fails to demonstrate either one of them.” Garcia, 425 S.W.3d at 257. Indeed, “[i]f it is easier to dispose of an ineffectiveness claim on the ground of lack of sufficient prejudice[,] . . . that course should be followed.” Strickland, 466 U.S. at 697; see also Phillips, 647 S.W.3d at 401 (“The petitioner must prove sufficient facts to support both the deficiency and prejudice prongs of the Strickland inquiry—or, stated another way, the post- conviction court need only determine the petitioner’s proof is insufficient to support one of the two prongs to deny the claim.”). Importantly, when considering a claim of ineffective assistance of counsel, this Court begins with “the strong presumption that counsel provided adequate assistance and used reasonable professional judgment to make all strategic and tactical significant decisions,” Davidson, 453 S.W.3d at 393, and “[t]he petitioner bears the burden of overcoming this presumption,” Kendrick, 454 S.W.3d at 458. This Court will “not grant the petitioner the benefit of hindsight, second-guess a reasonably based trial strategy, or provide relief on the basis of a sound, but unsuccessful, tactical decision made during the course of the proceedings.” Berry v. State, 366 S.W.3d 160, 172 (Tenn. Crim. App. 2011) (citation omitted). Of course, “the fact that a particular strategy or tactic failed or hurt the defense, does not, standing alone, establish unreasonable representation.” Goad, 938 S.W.2d at 369. However, this Court will give deference to the tactical decisions of counsel only if counsel’s choices were made after adequate preparation of the case. Moore, 485 S.W.3d at 419. Again, we note that in the present case, the Petitioner alleges that he was denied the effective assistance of trial counsel in three areas. We address each of these issues in turn. A. FAILURE TO PROVIDE AND USE INVESTIGATOR’S REPORT As to his first ground for post-conviction relief, the Petitioner asserts that he was denied the effective assistance of counsel with respect to his investigator’s report in two ways: (1) that trial counsel did not deliver a copy of the report to him before the trial; and (2) that trial counsel did not use the information in the report to cross-examine Ms. Pratcher at trial. The Petitioner claims “there was valuable information in the report because Ms. Pratcher stated [the victim] threatened [the Petitioner] that night. [The Petitioner] said [the report] would show that this killing wasn’t premeditated but that it was swept under the rug.” For its part, the State contends that the Petitioner did not call Ms. Pratcher at the post-conviction hearing to show her testimony would have benefitted him at trial and that he did not offer any proof establishing that trial counsel provided him with the report after trial. - 11 - It is unclear when the Petitioner received the investigator’s report. The Petitioner asserts that he did not receive the report before trial, but trial counsel testified that “as a general rule,” he gave “all of [his] investigations to [his] clients.” The post-conviction court did not make a specific finding on this point. In any event, when a post-conviction petitioner claims that trial counsel did not disclose pretrial discovery to him or her, the petitioner cannot establish prejudice unless the petitioner shows how knowledge of that discovery would have affected the outcome of the proceeding. See, e.g., Birdwell v. State, No. M2012-02062-CCA-R3-PC, 2013 WL 6405733, at 6 (Tenn. Crim. App. Dec. 6, 2013). Here, the Petitioner did not show the post-conviction court how his actual possession of the investigator’s report at an earlier time would have changed the outcome of his trial. For example, he did not show that his earlier receipt of this report would have affected the defense strategy, see Bishop v. State, No. W2017-00709-CCA-R3-PC, 2018 WL 2228195, at 6 (Tenn. Crim. App. May 15, 2018); that “his objectives were not accomplished by trial counsel’s representation” due to the late receipt, see McWilliams v. State, No. E2017-00275-CCA-R3-PC, 2017 WL 5046354, at 4 (Tenn. Crim. App. Nov. 2, 2017); or that other benefits would have been obtained with the earlier disclosure, see Johnson v. State, No. E2019-02259-CCA-R3-PC, 2021 WL 5834385, at 13 (Tenn. Crim. App. Dec. 9, 2021). We conclude that the post- conviction court properly denied relief on this basis. The Petitioner also asserts that trial counsel was ineffective in failing to impeach the State’s witness, Ms. Pratcher, with a prior statement that was contained in the investigator’s report. More specifically, the Petitioner notes that the report states, “[Ms. Pratcher] never heard [the victim] call out or threaten [the Petitioner] at all except for the night of the shooting.” The Petitioner contends that this statement proves that the victim “threatened” him on the night of the shooting and that, as such, the Petitioner was not the initial aggressor. Trial counsel testified that it was unclear what Ms. Pratcher actually meant by the statement contained in the report. This Court has repeatedly held that trial counsel’s decision as to the manner of and subject matter of cross-examination “is a strategical or tactical choice, if informed and based upon adequate preparation.” Pierce v. State, No. M2005-02565-CCA-R3-PC, 2007 WL 189392, at 7 (Tenn. Crim. App. Jan. 23, 2007) (citing Hellard v. State, 629 S.W.2d 4, 9 (Tenn. 1982)). Furthermore, “strategic decisions during cross-examination are judged from counsel’s perspective at the point of time they were made in light of all the facts and circumstances at that time.” Reeves v. State, No. M2004-02642-CCA-R3-PC, 2006 WL 360380, at 10 (Tenn. Crim. App. Feb. 16, 2006). When evaluating the performance of trial counsel on cross-examination, the petitioner must show “what additional beneficial evidence could have been elicited” through his or her preferred cross-examination. See Ortiz v. State, No. M2020-01642- - 12 - CCA-R3-PC, 2021 WL 5080514, at 4 (Tenn. Crim. App. Nov. 2, 2021), perm app. denied (Tenn. Jan. 14, 2022). In addition, the petitioner must also present that witness at the post- conviction evidentiary hearing to show how the witness would have responded to trial counsel’s questioning. See Britt v. State, No. W2016-00928-CCA-R3-PC, 2017 WL 1508186, 4, 7 (Tenn. Crim. App. Apr. 25, 2017) (“[T]he Petitioner did not present Ms. Tackett’s testimony at the post-conviction hearing to show how she would have responded had trial counsel asked about her inability to see the fight. . . . The Petitioner has failed to prove . . . that there is any reasonable probability of another outcome had trial counsel cross-examined Ms. Tackett differently.”). In this case, the Petitioner did not call Ms. Pratcher as a witness at the post- conviction hearing. This omission is significant. Without Ms. Pratcher’s testimony, we cannot know how she would have responded had trial counsel asked the additional questions suggested by the Petitioner. Black v. State, 794 S.W.2d 752, 757 (Tenn. Crim. App. 1990). Respectfully, we decline to speculate as to how Ms. Pratcher would have answered had she been asked about the single statement in the investigator’s report. We therefore affirm the judgment of the post-conviction court denying post-conviction relief on this ground. B. BALLISTICS EXPERT Next, the Petitioner alleges that trial counsel was ineffective by failing to call a ballistics expert to testify in his defense. The Petitioner testified at the evidentiary hearing that a ballistics expert was needed to establish his belief that the victim had a gun on his person the night of the shooting. The Petitioner claims that a ballistics expert would have bolstered his argument for a lesser-included offense if the expert were able to testify that the victim possessed a gun at the time of the shooting. It is well established that when a petitioner contends trial counsel failed to discover, interview, or present a witness in support of his defense, the petitioner must generally call that witness to testify at an evidentiary hearing. Black, 794 S.W.2d at 752. Indeed, this is the only way the petitioner can establish: that (a) a material witness existed and the witness could have been discovered but for counsel’s neglect in his investigation of the case, (b) a known witness was not interviewed, (c) the failure to discover or interview a witness inured to his prejudice, or (d) the failure to have a known witness present or call the witness to the stand resulted in the denial of critical evidence which inured to the prejudice of the petitioner. - 13 - Id. at 757; see also Taylor v. State, 443 S.W.3d 80, 85 (Tenn. 2014) (“Our Court of Criminal Appeals has observed that, ‘[a]s a general rule, . . . the only way [a] petitioner can establish’ that trial counsel improperly failed to interview a witness is by calling the witness to testify at the post-conviction hearing.” (quoting Black, 794 S.W.2d at 757 and alterations and omission in original)). Thus, even if a petitioner is able to show counsel was deficient in the investigation of the facts or in failing to call a known witness, the petitioner is not entitled to post-conviction relief unless he also produces that material witness at his post- conviction evidentiary hearing who “(a) could have been found by a reasonable investigation and (b) would have testified favorably in support of his defense if called.” Black, 794 S.W.2d at 758. These principles apply equally to claims that trial counsel should have retained or called an expert witness to testify. See, e.g., Delosh v. State, No. W2019-01760-CCA-R3- PC, 2020 WL 5667487, 1, 9 (Tenn. Crim. App. Sept. 23, 2020), perm. app. denied (Tenn. Jan. 14, 2021); Canales v. State, No. E2020-01040-CCA-R3-PC, 2021 WL 3363454, at 5 (Tenn. Crim. App. Aug. 3, 2021), perm. app. denied (Tenn. Nov. 12, 2021). However, the Petitioner here did not present the testimony of a ballistics expert at the post-conviction hearing. Because we may not speculate as to how this expert would have testified had the witness been presented, we affirm the judgment of the post-conviction court denying post- conviction relief on this ground. See Banks v. State, No. W2020-01164-CCA-R3-PC, 2021 WL 4786373, at *9 (Tenn. Crim. App. Oct. 14, 2021) (“Petitioner contends that trial counsel was ineffective for failing to retain an independent ballistics expert to rebut the State’s ballistics expert witness. Petitioner acknowledges that he failed to establish how he was prejudiced by trial counsel’s decision not to retain an expert by not presenting the testimony of an expert at the post-conviction hearing.” (citing Black, 794 S.W.2d at 757)). C. INVESTIGATION OF A “SHOWSTOPPER” Finally, the Petitioner argues that trial counsel was ineffective by failing to investigate that the victim was looking for a “showstopper” before the shooting. At the post-conviction hearing, the Petitioner testified that the victim told Mac that he needed “a showstopper for this Chris guy.” From this, the Petitioner asserts that if trial counsel had located Mac and called him to testify, Mac would have established that the victim “was plotting and planning to get a gun to harm [the Petitioner].” As with his ballistics expert, however, the Petitioner did not call Mac to testify at the post-conviction hearing. As noted above, we cannot speculate as to how Mac would have testified had he been called as a witness at trial. Black, 794 S.W.2d at 757. As such, we affirm the judgment of the post-conviction court denying post-conviction relief on this ground. - 14 - CONCLUSION In summary, we hold that the post-conviction court properly found that the Petitioner was not denied the effective assistance of counsel during his trial. Accordingly, because the Petitioner’s conviction or sentence is not void or voidable because of a violation of a constitutional right, we affirm the denial of post-conviction relief in all respects. ____________________________________ TOM GREENHOLTZ, JUDGE - 15 -	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483700/	11/14/2022 IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE AT JACKSON Assigned on Briefs October 4, 2022 STATE OF TENNESSEE v. DEMARCUS WOOTEN Appeal from the Criminal Court for Shelby County No. 20-01517 W. Mark Ward, Judge ___________________________________ No. W2022-00315-CCA-R3-CD ___________________________________ A Shelby County jury found the Defendant, Demarcus Wooten, guilty of the offenses of first degree murder, attempted first degree murder, and employing a firearm during the commission of a dangerous felony. The trial court imposed a total effective sentence of life plus twenty-nine years. On appeal, the Defendant argues that the evidence is insufficient to sustain his murder and attempted murder convictions, arguing principally that the proof did not establish the elements of intent and premeditation. We respectfully disagree, and we affirm the judgments of the trial court. Tenn. R. App. P. 3 Appeal as of Right; Judgments of the Criminal Court Affirmed TOM GREENHOLTZ, J., delivered the opinion of the court, in which ROBERT H. MONTGOMERY, JR., and J. ROSS DYER, JJ., joined. Joshua J. Roberts (on appeal) and John Dolan (at trial), Memphis, Tennessee, for the appellant, Demarcus Wooten. Herbert H. Slatery III, Attorney General and Reporter; Benjamin A. Ball, Senior Assistant Attorney General; Amy P. Weirich, District Attorney General; and Paul Hagerman and Doug Carriker, Assistant District Attorneys General, for the appellee, State of Tennessee. OPINION FACTUAL BACKGROUND On June 30, 2020, the Shelby County Grand Jury returned a multi-count indictment charging the Defendant in count one with the attempted first degree premeditated murder of Lewis Holman; in count two with employing a firearm during a dangerous felony, specifically the attempted first degree murder of Mr. Holman; and in count three with the first degree premeditated murder of Willie Gandy. At trial, Marquasha Williams testified that in June 2019, she was living in Memphis. She was twenty-one years old, was not working, and was not in school. On the night of June 11, 2019, Ms. Williams was with Antionesha Lurry. Although the women had not known each other long, they were friends. They were at Ms. Williams’s house when Ms. Williams received a call from a friend identified only as “Cameron,” who asked them to drive him to a friend’s apartment. Because Ms. Williams did not “feel like driving,” Ms. Lurry drove Ms. Williams’s car. After they arrived at the apartment where Cameron was waiting, Ms. Williams was introduced to five other men. One of these men was the Defendant, Demarcus Wooten, though Ms. Williams knew him only by the nickname, “Hot Head.” The eight people got into two cars, including Ms. Williams’s car. In Ms. Williams’s car, Ms. Lurry sat in the driver’s seat, Ms. Williams sat in the front passenger’s seat, the Defendant sat behind Ms. Lurry, and Cameron sat behind Ms. Williams. While in the cars, everyone smoked marijuana. They stayed at the apartment complex for approximately twenty-five minutes, and Cameron asked if he could be driven to his cousin’s house. The four then went to McDonald’s for food and thereafter followed Cameron’s directions to his cousin’s house. After they dropped off Cameron at his cousin’s house, the Defendant remained seated in the car behind Ms. Lurry. As they drove on Mt. Moriah Road approaching the intersection with Willow Road, Ms. Williams heard a loud gunshot from the driver’s side of the car. Until that time, Ms. Williams did not know that the Defendant had a gun. The gunfire caused Ms. Williams to be afraid. Although she did not ask Ms. Lurry to stop the car, nor did she ask the Defendant to stop shooting or to get out of the car, Ms. Williams asked the Defendant why he shot the gun. Ms. Williams said that the Defendant responded to her that “he do[es] what he wants.” Ms. Lurry continued to drive on Mt. Moriah Road and stopped at a red light near a church. A man, who was later identified as Mr. Gandy, walked in front of Ms. Williams’s -2- car at a crosswalk. Ms. Williams looked down at her phone, then she heard another gunshot. She looked up and saw Mr. Gandy fall to the ground. Ms. Lurry asked the Defendant why he shot the man, and the Defendant told her to “go, go, go.” The Defendant tried to add an address to the global positioning system (GPS), but it froze. Ms. Lurry then made a U-turn and drove by Mr. Gandy’s body lying in the road. Then, they drove onto the interstate and took the Defendant to a woman’s house on Riverdale Road. Afterward, Ms. Williams and Ms. Lurry drove to Binghampton to take Ms. Lurry home. During the drive, Ms. Williams and Ms. Lurry discussed what had happened, but neither of them reported it to the police. Ms. Williams explained that she was terrified because she had “just seen a man get shot.” After dropping off Ms. Lurry, Ms. Williams drove home. Ms. Williams said that she did not know the Defendant before the night of the shootings and that they were not friends on Facebook. Nevertheless, sometime after the shootings, the Defendant contacted Ms. Williams via Facebook Messenger. Ms. Williams said she knew the message came from the Defendant because it “was like a threat of saying that if I was to say anything they would have killed me.” Ms. Williams explained that the threat was part of the reason she did not immediately report the crimes to the police. On November 9, 2019, approximately five months after the shootings, Ms. Williams gave a statement to investigators at the Memphis Police Department. She also identified the Defendant from a photographic lineup, though she accidentally wrote the wrong date on the identification form because she was nervous. Ms. Williams identified a video recording that showed her car making a wide turn as it drove onto an entrance ramp for the interstate right after the shooting. Ms. Williams said that no one had done anything to provoke the Defendant before either of the shootings. On cross-examination, Ms. Williams acknowledged that she did not wear a watch and that she kept track of time on her cell phone. However, she did not know when she, Ms. Lurry, and Cameron went to the apartment complex. She agreed that it could stay light outside until 9:00 p.m. in June and that it was dark outside when they went to the apartment. She agreed that the shootings took place sometime after 2:00 a.m., approximately five hours after they went to the apartment complex. Ms. Williams agreed that she, Ms. Lurry, Cameron, and the Defendant smoked marijuana for twenty minutes at the apartment complex. But, she could not recall what they did for the other four hours and forty minutes between the time that they left the apartment complex and when the shootings began. -3- Ms. Williams said that at least one of her car’s windows was down when the Defendant fired the first shot. She agreed that the gunshot “scared the daylights out of” her. She did not get out of the car because it was in motion, and she was afraid her life was in danger. Ms. Williams said that she previously had been to the area where the first shooting occurred but that she did not “hang out” there. Ms. Williams recalled hearing another gunshot after seeing Mr. Gandy walk across the crosswalk in front of her car. After the Defendant shot Mr. Gandy, Ms. Lurry asked, “[W]hat the f*. Why you just shoot that person?” Ms. Williams did not say anything to the Defendant, and she did not contact anyone about the shootings. Lewis Holman was the victim in the Defendant’s first shooting. He testified that shortly after midnight on June 12, 2019, he was at home in bed near the University of Memphis when a friend called and asked for a ride home from work. A little after 2:00 a.m., Mr. Holman drove his friend to a residence on Helene Street off of Mt. Moriah Road, and he thereafter headed home. He was driving on Mt. Moriah Road, but someone shot his car as he started to turn right onto Willow Street. Although the windows of his car were up, he heard the gunshot, as well as glass “falling in on [him]” from the rear driver’s side door. After the shot, Mr. Holman crouched down, put his car in park, and waited a few minutes before getting out to check himself and his car. Although he did not call the police immediately because he wanted to be safe at home if someone was shooting, he did speak with officers later that morning. Joshua Echols, who was one of the five other people originally introduced to Ms. Williams, also testified at trial. Mr. Echols said on “that night in 2019,” he was “chilling” with Ms. Lurry, Ms. Williams, the Defendant, and Cameron. Mr. Echols testified that he knew Ms. Lurry from school and that he also knew the Defendant, but not well. He confirmed that he was inside one of the cars at the apartment complex and was “chilling, smoking.” Mr. Echols testified that he called someone named “Steve-O” to take him home, and he left the apartment complex. After he arrived home, Mr. Echols received a call from Ms. Lurry saying that something “had just happened.” At 3:16 a.m., Mr. Echols sent a Facebook message to the Defendant, saying, “You tweaking gang,” which Mr. Echols explained meant he was asking if the Defendant was “bullshing.” The Defendant responded, “Y u you say that?” Mr. Echols replied, “[D]id him dirty,” which Mr. Echols -4- explained meant that he “[k]illed somebody.” The Defendant said, “He dead.” After Mr. Echols again accused the Defendant of “bullsh*ing,” the Defendant replied, “Hope he okay,” followed by several laughing emojis. Mr. Echols did not talk to the Defendant after exchanging the Facebook messages, and he testified on cross-examination that, because he did not see who sent the Facebook messages, he could not be certain the messages came from the Defendant. Memphis Police Officer Fredrick Reading testified that between 2:30 and 2:40 a.m. on June 12, 2019, he responded to a “man down call” in the area of Mt. Moriah Road and Quince Road. Upon his arrival, Officer Reading saw Mr. Gandy lying on the ground. A man and a woman tried to help him, but Mr. Gandy was unresponsive. The couple told Officer Reading that they were driving when they saw Mr. Gandy, and they stopped to help and called for assistance. Officer Reading summoned the paramedics to the scene. When the paramedics lifted Mr. Gandy’s shirt, they found gunshot wounds to his chest and back. The paramedics put Mr. Gandy into an ambulance and took him to the hospital. Sergeant Michael Coburn with the homicide bureau of the Memphis Police Department testified that he investigated Mr. Gandy’s death. Around 2:00 or 2:15 a.m. on June 12, 2019, Sergeant Coburn went to the scene of Quince Road and Mt. Moriah Road. Sergeant Coburn saw a couple of squad cars “securing the scene.” Mr. Gandy had already been transported from the scene. The police searched for evidence, but they only found “a little blood on the ground.” The police then searched the larger area and discovered a couple of real-time crime center (RTCC) cameras. Sergeant Coburn explained that the RTCC cameras were installed and monitored by law enforcement. Sergeant Coburn said that later that morning on June 12, he learned that someone’s car had also been shot near Mt. Moriah Road and Willow Road, which was south of the intersection where Mr. Gandy was killed. The sergeant suspected that the two shootings were connected, and he viewed the RTCC camera footage from both locations. The State played for the jury a portion of the camera footage from the RTCC camera near the intersection where Mr. Gandy was killed. The video recording showed the suspect vehicle stopped at a red light. It also showed a person walking across the road and the person falling to the ground. Mr. Gandy’s body was discovered in the area where the person in the camera footage fell. Separately, Memphis Police Department Detective Christopher Malsom encountered the Defendant on June 21, 2019. During this encounter, the Detective -5- recovered from the Defendant a nine-millimeter “Glock 19, Gen4” handgun. The recovered weapon had an extended magazine, which held 40 rounds, and it was fully loaded with a round in the chamber. The recovery of this nine-millimeter handgun was of interest to Sergeant Coburn, as he had recovered a spent nine-millimeter cartridge casing during his investigation of the location where Mr. Holman’s car was shot. Sergeant Coburn suspected that the cartridge casing was related to one of the two shootings, and he sent the pistol and the cartridge casing for forensic testing. After law enforcement recovered the nine-millimeter handgun from the Defendant, Sergeant Coburn became interested in the Defendant’s connection with the crimes. The sergeant researched the Defendant’s Facebook records and, as a result, went to speak with Mr. Echols. After this conversation, the sergeant spoke with Ms. Williams and Ms. Lurry. He also spoke with Mr. Holman and realized that the shooting of his car might have been connected to the killing of Mr. Gandy because the two shootings were “seconds, minutes” apart, “[t]he time it would take to travel that one big block.” Agent Cervinia Braswell with the Tennessee Bureau of Investigation (TBI) testified as an expert in the field of forensic firearms analysis and ammunition analysis. She compared the Defendant’s Glock handgun with the recovered cartridge casing and determined that the casing was fired from the Defendant’s handgun. On cross- examination, Agent Braswell acknowledged that she could not determine when the cartridge was fired or who fired the gun. Dr. Katrina Vanpelt, who performed the autopsy of Mr. Gandy, testified as an expert in forensic pathology. During the autopsy, Dr. Vanpelt found a “perforating gunshot wound to the back.” The bullet passed through a vertebra and the right lung before exiting on the right side of the chest. The bullet caused substantial damage and resulted in Mr. Gandy’s death. No bullet was recovered, and drugs and alcohol were absent from Mr. Gandy’s system. Before the State rested its case, the parties entered into the following stipulation: On June the 21st of 2019 at 1632 hours, Demarcus Wooten, the defendant in this case, made a phone call from the Shelby County Jail intake that was monitored and recorded by jail staff. A copy of this call had been retained in evidence by Shelby County Deputies. -6- In that phone call, Demarcus Wooten makes a statement about being charged with a homicide that occurred on Mt. Moriah. He denies committing the homicide but states that, if the police have his gun, he could be charged with murder. After the State rested, the Court denied the Defendant’s motion for judgment of acquittal, and the Defendant chose to present evidence of his own. The first defense witness, Brianna Flowers, testified that the Defendant was the father of her child. On Tuesday, June 11, 2019, the Defendant came to her house at 11:30 p.m. and did not leave until 8:00 a.m. on June 14, 2019. The Defendant’s cousin, Keosha Wooten, drove him to and from Ms. Flowers’s house. Ms. Flowers did not keep any records, such as a calendar, text message, or note in her phone, to help her remember the date. On cross-examination, Ms. Flowers said that she and the Defendant had talked and exchanged letters while he was incarcerated. Ms. Flowers said that she knew “[a] lot” about the Defendant’s life in 2019 and maintained that he “wasn’t hanging with nobody.” Ms. Flowers did not know Steve-O, Cameron, or Ms. Lurry. She knew the Defendant had a Facebook account, but she could not look at the Defendant’s Facebook page because she did not have a Facebook account. Nevertheless, she said that there were no photographs on Facebook showing the Defendant “hanging out with guys . . . with guns.” Ms. Flowers said that she knew the Defendant was with her on June 11 because they were “cooking, watching Lifetime, chilling as usual” and because they were “with each other most of the time.” Keosha Wooten testified that she drove the Defendant to Ms. Flowers’s house at 11:30 p.m. on June 11, 2019. Ms. Wooten thought that the Defendant remained there until she picked him up on the morning of June 14, 2019. Ms. Wooten agreed that she was “relying strictly on [her] memory about where [she] was at that day at that time.” On cross-examination, Ms. Wooten confirmed that she had spoken with the Defendant since he had been in jail. She did not know what the Defendant did after she left him at Ms. Flowers’s house. When asked how she remembered the time in question, Ms. Wooten responded, “Because I remember it. It’s something to remember when your family member gets locked up.” She acknowledged, however, that she could not remember the specific day the Defendant was arrested, but she knew that the Defendant was not arrested at the time she left him at Ms. Flowers’s house. -7- After the close of proof, the jury found the Defendant guilty of the charged offense in each count of the indictment. The trial court sentenced the Defendant to life imprisonment for the first degree murder conviction, and to twenty-three years for the attempted first degree murder conviction. As for the Defendant’s conviction for employing a firearm during the commission of a dangerous felony, the trial court imposed a sentence of six years. The court ordered that the sentences be served consecutively, for an effective sentence of life plus twenty-nine years. In this appeal, the Defendant challenges only the sufficiency of the evidence supporting his convictions for first degree murder and attempted first degree murder. Upon consideration of the arguments raised and the record as a whole, we affirm the convictions for each offense. STANDARD OF REVIEW Our supreme court has recognized that “the first question for a reviewing court on any issue is ‘what is the appropriate standard of review?’” State v. Enix, __ S.W.3d __, No. E2020-00231-SC-R11-CD, 2022 WL 4137238, at 4 (Tenn. Sept. 13, 2022). In reviewing a challenge to the sufficiency of the evidence, “a guilty verdict removes the presumption of innocence and replaces it with a presumption of guilt.” State v. Reynolds, 635 S.W.3d 893, 914 (Tenn. 2021) (internal quotation marks and citations omitted). As such, “the defendant has the burden on appeal of demonstrating why the evidence was insufficient to support the jury’s verdict.” State v. Jones, 589 S.W.3d 747, 760 (Tenn. 2019) (citing State v. Tuggle, 639 S.W.2d 913, 914 (Tenn. 1982)). “The standard for appellate review of a claim challenging the sufficiency of the State’s evidence is ‘whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” State v. Miller, 638 S.W.3d 136, 157 (Tenn. 2021) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)). When “‘making this determination, we afford the prosecution the strongest legitimate view of the evidence as well as all reasonable and legitimate inferences which may be drawn therefrom.’” State v. Davis, 354 S.W.3d 718, 729 (Tenn. 2011) (quoting State v. Majors, 318 S.W.3d 850, 857 (Tenn. 2010)). The trier of fact, not this Court, resolves “all questions as to the credibility of trial witnesses, the weight and value of the evidence, and issues of fact raised by the evidence,” and this Court “may not re-weigh or re-evaluate the evidence.” State v. Lewter, 313 S.W.3d 745, 747 (Tenn. 2010). “The standard of review is the same whether the conviction is based upon direct or circumstantial evidence.” State v. Dorantes, 331 S.W.3d 370, 379 (Tenn. 2011) (internal quotations and citations omitted). -8- ANALYSIS On appeal, the Defendant challenges the sufficiency of the evidence sustaining his convictions for the first degree murder of Mr. Gandy and the attempted first degree murder of Mr. Holman. More specifically, the Defendant asserts that the proof is insufficient to establish the elements of intent and premeditation. For its part, the State asserts that, viewing the evidence in the light most favorable to the State, a reasonable juror could have concluded that the State proved all essential elements of the charged offenses beyond a reasonable doubt. We agree with the State. First degree murder is defined as the unlawful and “premeditated and intentional killing of another[.]” Tenn. Code Ann. §§ 39-13-201; 39-13-202(a)(1). A person acts intentionally “when it is the person’s conscious objective or desire to engage in the conduct or cause the result.” Id. § 39-11-302(a). As charged in this case, the offense of attempted first degree murder is committed when a person acts with the intent to commit premeditated first degree murder and “[a]cts with intent to cause a result that is an element of the offense, and believes the conduct will cause the result without further conduct on the person’s part.” Id. § 39-12-101(a)(2). Our General Assembly has defined “premeditation” as being an act done after the exercise of reflection and judgment. “Premeditation” means that the intent to kill must have been formed prior to the act itself. It is not necessary that the purpose to kill preexist in the mind of the accused for any definite period of time. The mental state of the accused at the time the accused allegedly decided to kill must be carefully considered in order to determine whether the accused was sufficiently free from excitement and passion as to be capable of premeditation. Tenn. Code Ann. § 39-13-202(d) (2018) (subsequently amended). Like any other element of an offense, “the State must prove premeditation beyond a reasonable doubt.” Miller, 638 S.W.3d at 159. The question of “[w]hether premeditation is present in a given case is a question of fact to be determined by the jury from all of the circumstances surrounding the killing.” State v. Davidson, 121 S.W.3d 600, 614 (Tenn. 2003). As our supreme court has observed, -9- Several factors are considered to infer premeditation: the use of a deadly weapon upon an unarmed victim, the particular cruelty of the killing, declarations by the defendant of an intent to kill, evidence of procurement of a weapon, preparations before the killing for concealment of the crime, and calmness immediately after the killing. Additional considerations include a lack of provocation on the victim’s part and a defendant’s failure to render aid to a victim. State v. Clayton, 535 S.W.3d 829, 845 (Tenn. 2017) (internal citations omitted). “[I]n determining the existence of premeditation, the trier of fact ‘may not engage in speculation.’” Reynolds, 635 S.W.3d at 918 (quoting State v. Jackson, 173 S.W.3d 401, 408 (Tenn. 2005)). That said, “Tennessee cases have long recognized that premeditation may be proved by circumstantial evidence” because “premeditation involves the defendant’s state of mind, concerning which there is often no direct evidence.” Davidson, 121 S.W.3d at 614-15. A. FIRST DEGREE MURDER The Defendant first argues that the proof is insufficient to support his conviction for the first degree murder of Mr. Gandy. The Defendant does not challenge his identity as the perpetrator, but he instead contends that the State failed to establish the element of premeditation. He acknowledges that Mr. Gandy was unarmed, that he was “shot in the back in the chest region from a close distance,” that the Defendant failed to render aid to the victim, that the messages the Defendant exchanged with Mr. Echols immediately after the killing showed little or no remorse for the killing, and that the Defendant threatened a witness. However, the Defendant argues that “without more,” each of these factors was insufficient for a jury to find that he killed Mr. Gandy with intent and premeditation. We respectfully disagree and conclude that the evidence is sufficient to support his conviction of this offense. Viewing the evidence in a light most favorable to the State, the proof shows that Ms. Lurry drove a car belonging to her friend, Ms. Williams, on June 12, 2019. Ms. Williams herself rode in the front passenger seat, and the Defendant was in the back seat on the driver’s side. When Ms. Lurry stopped at a red light, Mr. Gandy began walking across the street in the crosswalk. From his seat in the car, the Defendant shot Mr. Gandy in the back, and Mr. Gandy fell to the ground with a fatal wound. Mr. Gandy was unarmed, and he did not provoke the shooting. His back was also to the Defendant at the time he was shot. The circumstances of the killing support the jury’s finding of premeditation and intent to kill. See Clayton, 535 S.W.3d at 845 (concluding that evidence was sufficient to - 10 - establish first degree murder when the defendant fired a deadly weapon on four unarmed victims, there was no provocation, the Defendant failed to render aid, and the Defendant fired a second, fatal bullet after injuring one of the victims); State v. Frazier, No. E2018- 00202-CCA-R3-CD, 2019 WL 2750138, at 18 (Tenn. Crim. App. July 1, 2019) (holding that the evidence was sufficient to show premeditation, in part, when “[t]he Defendant used a deadly weapon against an unarmed victim, who was running away from the Defendant at the time of the shooting”). Moreover, the Defendant’s actions following the killing also support the jury’s finding that the Defendant acted with premeditation and intent to kill. First, the Defendant did not stop to render aid to his victim or ask others to do so. Instead, he instructed Ms. Lurry to “go, go, go” so that he could flee from the scene of his crimes. These circumstances support the jury’s finding of premeditation. See State v. Rivas, No. M2019- 02241-CCA-R3-CD, 2021 WL 1625530, at 23 (Tenn. Crim. App. Apr. 27, 2021), perm. app. denied (Tenn. Aug. 4, 2021) (holding that the evidence was sufficient to show premeditation, in part, when “[a]fter the shooting, Defendant Rivas and Defendant Fryer fled the scene and did not render aid to the victim.”). Second, shortly after the shootings, the Defendant exchanged Facebook messages with Mr. Echols, a person who was with him earlier in the evening. After Mr. Echols accused the Defendant of killing someone, the Defendant responded, “He dead,” and “Hope he okay.” These messages from the Defendant show that he was calm and, through the repeated use of the laughing emojis, appeared to find humor somehow in Mr. Gandy’s death. These circumstances support the jury’s finding of premeditation. See State v. Allen, No. E2020-00632-CCA-R3-CD, 2021 WL 1561579, at 10 (Tenn. Crim. App. Apr. 21, 2021), perm. app. denied (Tenn. Aug. 6, 2021) (holding that the evidence was sufficient to show premeditation, in part, when “hours after the shooting, the Defendant and Alexis Godwin exchanged Facebook messages and the Defendant stated, ‘Lex, I got [the victim].’” (alteration in original)); State v. Lowe, No. E2017-00435-CCA-R3-CD, 2018 WL 3323757, at 12 (Tenn. Crim. App. July 6, 2018) (holding that the evidence was sufficient to show premeditation, in part, when “Ms. Blair described that, once the men were inside her car, it seemed like they did not care about what they done, ‘like it was a joke,’ or they were doing ‘it for fun.’”). Finally, the Defendant sent Ms. Williams messages through Facebook messenger threatening to kill her if she spoke with anyone about the shootings. The Defendant’s attempts to silence potential witnesses to his actions support the jury’s finding of premeditation. See State v. Parker, No. E2018-01306-CCA-R3-CD, 2019 WL 5260863, at 9 (Tenn. Crim. App. Oct. 17, 2019) (holding that the evidence was sufficient to show - 11 - premeditation, in part, when “each witness testified that the Defendant threatened to shoot one of them if they said anything.”). Based on this evidence, we conclude that a reasonable jury could have determined beyond a reasonable doubt that the defendant acted intentionally and with premeditation when he shot Mr. Gandy. In response, the Defendant argues that he had no relationship with, or motive to kill, Mr. Gandy and that, as such, the jury’s finding of premeditation and intent cannot be sustained. We respectfully disagree. As this Court has recognized previously, “[a] senseless, random killing is in no way inapposite to the concept of premeditation; otherwise, only planned assassinations would meet the elements of first degree premeditated murder.” State v. Ison, No. E2018-02122- CCA-R3-CD, 2020 WL 3263384, at 7 (Tenn. Crim. App. June 17, 2020), no perm. app. Moreover, a defendant’s motive is not an element that needs to be proven to sustain a conviction for first degree premeditated murder. State v. Bell, 512 S.W.3d 167, 191 (Tenn. 2015); State v. Brown, No. M2017-00904-CCA-R3-CD, 2019 WL 1514551, at 36 (Tenn. Crim. App. Apr. 8, 2019) (stating that “proof of motive is not necessary to sustain a conviction for first degree premeditated murder. Rather, motive is only one of many factors that may support a finding of premeditation.” (citation omitted)). Moreover, this Court does not re-weigh or re-evaluate the evidence when reviewing the sufficiency of the evidence supporting a conviction. Lewter, 313 S.W.3d at 747. Given the clear evidence of premeditation and intent to kill, we conclude that the evidence is sufficient to support the Defendant’s conviction for first degree murder. B. ATTEMPTED FIRST DEGREE MURDER The Defendant next argues that the proof is insufficient to support his conviction for the attempted first degree murder of Mr. Holman. Although the Defendant admits that he caused property damage to Mr. Holman’s car—and, in so doing, concedes his identity as the shooter—he nevertheless asserts that the evidence does not show an intention to kill Mr. Holman apart from evidence that Mr. Holman was unarmed. We again respectfully disagree. Viewing the evidence in a light most favorable to the State, the proof adduced at trial shows that the Defendant armed himself with a loaded pistol before entering Ms. Williams’s car and that he kept this weapon concealed from others until he fired at Mr. Holman. Because Mr. Holman was driving a moving car, the jury could have reasonably inferred that the Defendant knew that a person was in the car at the time he fired the shot. - 12 - Moreover, the jury could also have reasonably inferred that the Defendant intentionally aimed at the driver of the car, as the bullet came “close by” through the rear window on the driver’s side of the car. When Ms. Williams asked the Defendant why he fired a shot, the Defendant responded that “he do[es] what he wants,” indicating that he “wanted”—or had the conscious objective or desire—to fire a deadly weapon directly at the driver of the other car. The intentional firing of an aimed shot at a car, knowing that an unarmed person is inside, is a factor that supports a finding that the defendant intended to kill. Cf. State v. Avant, No. W2018-01154-CCA-R3-CD, 2019 WL 3072131, at 12 (Tenn. Crim. App. July 12, 2019) (“In our view, the proof supported a finding by the jury that Defendants had the requisite intent to attempt to commit first degree murder. They opened fire on a home with people inside and were seen by Mr. Ware firing shots from the car.”). In addition, similar to the later murder of Mr. Gandy, the Defendant used a deadly weapon upon an unarmed victim who did nothing to provoke the Defendant’s attack. The Defendant expressed no concern about Mr. Holman’s welfare, and the Defendant took no action to render aid or to ask others to do so. And, the Defendant later threatened to kill Ms. Williams to ensure that she remained silent about his conduct. Taken together, all of these factors establish that the Defendant had an intention to kill Mr. Holman. In response, the Defendant contends that, although Mr. Holman was unarmed, this fact alone is insufficient to establish he had the intent to kill Mr. Holman. However, this fact is not alone in the analysis. Rather, as identified above, the record is replete with evidence establishing the essential elements of attempted first degree murder, including that the Defendant’s conscious objective or desire was to kill a person. We conclude that the evidence is sufficient to sustain the Defendant’s conviction for the attempted first degree murder of Mr. Holman. CONCLUSION In summary, we hold that the evidence, when viewed in the light most favorable to the State and with all reasonable inferences drawn in the State’s favor, is sufficient to support the jury’s finding of the essential elements of the crimes of first degree murder and attempted first degree murder. As such, we conclude that the evidence supports the Defendant’s convictions for each of these offenses, and we affirm the judgments of the trial court. ____________________________________ TOM GREENHOLTZ, JUDGE - 13 -	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483703/	2022 IL App (4th) 220302 FILED November 14, 2022 NO. 4-22-0302 Carla Bender 4th District Appellate IN THE APPELLATE COURT Court, IL OF ILLINOIS FOURTH DISTRICT GABE YOUNG and ANNETTA YOUNG, ) Appeal from the Plaintiffs-Appellees, ) Circuit Court of v. ) Carroll County DUSTIN WILKINSON, d/b/a Hammer It Construction, ) No. 19L7 Defendant-Appellant. ) ) Honorable ) Scott Brinkmeier, ) Judge Presiding. JUSTICE DOHERTY delivered the judgment of the court, with opinion. Justices Steigmann and Zenoff concur in the judgment and opinion. OPINION ¶1 Plaintiffs Gabe and Annetta Young contracted with defendant Dustin Wilkinson, doing business as Hammer It Construction, to build a residence. The home was built in 2014, but the Youngs asserted that certain items were either not completed or were built in an unworkmanlike manner. This dispute about the quality of the construction led to the initial litigation with the parties in 2015. The Youngs initiated that litigation but voluntarily dismissed their claims before trial. The 2015 litigation went to hearing only on Wilkinson’s counterclaim for breach of contract (count I) and mechanic’s lien foreclosure (count II) seeking the outstanding balance on the contract. The Youngs prevailed on both of Wilkinson’s 2015 claims. ¶2 The instant litigation commenced in September 2019, when the Youngs refiled their breach of contract claim. Wilkinson unsuccessfully moved for dismissal of the 2019 complaint on res judicata grounds. Following a bench trial, the trial court found for the Youngs on their breach of contract claim and awarded them $168,223.44 in damages plus court costs. ¶3 Wilkinson appeals from the trial court’s verdict, arguing that res judicata barred the Youngs’ 2019 complaint. Alternatively, he seeks a remand to recalculate damages. ¶4 We affirm. ¶5 I. BACKGROUND ¶6 In March 2014 the Youngs contracted with Wilkinson (and his then-partner, Chad Gallagher) for the construction of a residence in Mt. Carroll, Illinois, to be “completed in a substantial workmanlike manner” for the sum of $253,400. Construction of the residence began in June 2014. In September of that year, the Youngs raised concerns with Wilkinson and Gallagher about the porch settling. By that time, the Youngs had paid all but $10,000 of the contract price. The Youngs met with Wilkinson concerning the construction defects and told him they would not make the final payment until the items were corrected. Wilkinson did not return to the property to address the defects. ¶7 A. The 2015 Complaint ¶8 In late 2015 the Youngs filed a breach of contract complaint against Wilkinson and Gallagher, doing business as Hammer It Construction, which alleged, in part, that “despite the obligations created by their Contract” and “despite receiving substantially full payment,” Wilkinson failed or refused to fulfill his contractual obligations. They allege that Wilkinson improperly constructed a concrete porch; installed electrical wiring out of compliance with the applicable code; improperly installed light fixture junction boxes, windows, and hot water piping; failed to install a floor drain; failed to install a proper seal around the chimney; refused to complete -2- the interior work; and improperly constructed foundations/footings for the house and garage. It further alleged Wilkinson failed to perform the work in a workmanlike manner. ¶9 B. The 2015 Counterclaim ¶ 10 Count I of Wilkinson’s 2015 counterclaim alleged breach of contract and alleged that, “although all of the work was performed in a workmanlike manner” and “all contract specifications were met,” the Youngs “refused to pay” the final $10,000 on the contract. Count II alleged compliance with the mechanic’s lien statute and sought foreclosure of the mechanic’s lien to recover the outstanding $10,000 remaining on the contract, as well as interest, costs, and statutory attorney fees. ¶ 11 In March 2019, the Youngs voluntarily dismissed their 2015 complaint. Although the full record from the 2015 case was not provided to this court as part of the record on appeal, the pleadings in the 2019 case reflect that the docket entry of the voluntary dismissal stated as follows: “03/19/2019 Attorney Guzzardo present for the Petitioners. Attorney Potter present with the Defendants. Conference held in chambers. Plaintiffs’ Motion heard and denie[d]. Plaintiff taking volunt[ary] nonsuit. Previously set date for April 22, 2019 to remain.” This ruling was elaborated on by the trial court in its April 26, 2019, order (the final disposition of 2015 case), wherein the court stated, “Of course, the Youngs’ damages claim for money damages was voluntarily dismissed but still could be refiled in a new proceeding.” ¶ 12 C. Trial of Counterclaims ¶ 13 With the Youngs’ 2015 complaint voluntarily dismissed, the 2015 case proceeded to a bench trial on Wilkinson and Gallagher’s counterclaims. Because no transcripts were provided -3- for the first trial, we rely on the facts set forth in the trial court’s April 26, 2019, order to glean what took place. ¶ 14 During Wilkinson and Gallagher’s case, the testimony revealed that the Youngs met with Wilkinson in October 2014 and informed him they would not pay the final $10,000 until certain defects were rectified. Wilkinson prepared a “punch list” of items needing correction, and the Youngs added further items, including leaking windows, loose support posts, and that the porch was “settling.” Wilkinson told the Youngs the porch repairs would need to wait until spring to allow the porch to finish settling. It also came to light that Wilkinson had credited back $5000 to the Youngs for work not performed, leaving the total balance Wilkinson sought in his counterclaim at $5000. ¶ 15 At the close of the contractors’ case-in-chief on the counterclaims, a directed verdict was entered against Gallagher without opposition from his counsel. ¶ 16 As part of their defense to the counterclaims, the Youngs presented the testimony of two licensed professional home inspectors and a professional fireplace installer, which the trial court later characterized as “demonstrating, without establishing a measure of damages, that the newly constructed home was plagued with several substantial construction defects in need of expensive remedy.” Some of the issues included the settling porch, steps pulling away from the porch, unstable posts, soffits not being cut for lights, a sewer line “clean out” that ran into the middle of the front porch, exposed nail heads on the metal roof, water issues, and an improperly constructed fireplace chimney. There was also testimony that the foundation and footings were improperly constructed and that the electrical box was improperly wired for 100 amps, rather than 200 amps as required by code. ¶ 17 According to the trial court’s order: -4- “Mr. Wilkinson was required to prove substantial performance of his obligations under the contract to construct the Youngs’ new home. But given the proof described above, particularly that the attached garage was without proper footings and was not properly attached to the house, the porch was likewise without footings, the “I-joists” had been weakened, and the chimney was such a fire danger that it had to be replaced, it cannot be concluded that Mr. Wilkinson has[ ] met his burden of proving substantial performance to support his counterclaim.” ¶ 18 The trial court concluded that the deficiencies were “more than just ‘some omissions or deviations from the contract.’ ” Judgment was entered against Wilkinson and in favor of the Youngs on both counts of the counterclaim; no appeal was taken from that order. ¶ 19 D. The 2019 Complaint ¶ 20 In September 2019, the Youngs refiled their breach of contract claim against Wilkinson, seeking damages for his failure to substantially comply with the contract. Other than omitting reference to Gallagher, the 2019 complaint was nearly identical to the voluntarily dismissed 2015 complaint. Wilkinson filed a section 2-619(a)(4) motion to dismiss, arguing the 2019 complaint was barred by res judicata. 735 ILCS 5/2-619(a)(4) (West 2020). The motion was denied, with the trial court finding “the claim presented by the Youngs for money damages arising from what they assert were construction defects is a separate cause of action from that brought by Wilkinson in his counterclaims and that the Youngs were not required to litigate their claim in the counterclaim proceeding.” The trial court further found “[n]or did—or could—the court’s ruling on the counterclaim bind the Youngs under the doctrine of res judicata. The only issue necessarily litigated in the counterclaim was whether Wilkinson had met his burden of proving that he had substantially performed under the contract.” -5- ¶ 21 Wilkinson answered and filed two affirmative defenses, one charging a failure to mitigate damages and the second asserting res judicata. For the failure to mitigate defense, Wilkinson asserted: “Plaintiffs failed to mitigate their damages, in that, rather than engaging contractors to repair some or all of the alleged defects in construction, inter alia, the concrete porch, chimney, and ‘otherwise,’ they opted or will opt for complete tear out and replacement.” ¶ 22 As his second affirmative defense, Wilkinson asserted that “this matter is barred by the doctrine of res judicata, for the reason that plaintiffs’ claims were at issue in the trial of defendant’s counterclaim in case number 2015 L 12.” ¶ 23 E. Trial on the 2019 Complaint ¶ 24 The 2019 case proceeded to a bench trial in December 2021, with the Youngs presenting testimony and opinions from six witnesses—a fireplace installer, building inspector, home inspector, licensed real estate appraiser, experienced contractor, and licensed electrician— concerning the extent of the work, non-compliance, and repairs necessary, including the cost to correct the defects. One of the Youngs’ witnesses, real estate appraiser Thomas Howe, offered opinions on the value of the residence both “as built” and as of October 2020. According to Howe, the residence, as originally built by Wilkinson “was in such a poor workmanlike condition that it was only valued at $34,528.” Had the residence been built in a substantially workmanlike manner, its value would have been $275,000; thus, the difference in value equaled $240,472. ¶ 25 Wilkinson testified during his case but offered no other experts or other witnesses. Wilkinson offered his opinion that the porch could have been repaired using shims and that he had advised the Youngs to wait to complete the porch until spring. The Youngs denied the latter -6- conversation. He also said the porch posts were meant to be decorative, not load-bearing. Wilkinson further testified that he was unaware that some of the foundation “fox blocks” did not contain any concrete—they were supposed to be filled with concrete. As far as the electrical work, Wilkinson testified there were no provisions in the contract to upgrade the electrical service to 200 amps. ¶ 26 In March 2022, the trial court issued its memorandum opinion and order, finding in favor of the Youngs and against Wilkinson and awarding the Youngs damages in the amount of $168,223.44 plus court costs. On liability, the trial court found that the “construction defects were not merely omissions or deviations from the contract but were substantial and material defects and that defendant failed to construct this new residence in a substantial workmanlike manner.” It further found that Wilkinson’s “defective workmanship led to immediate problems with the new residence and caused most of the damages” claimed by the Youngs. It then concluded that the Youngs were “entitled to be put into the same position that they would have been had the defendant built the residence in a substantial workmanlike manner.” ¶ 27 The trial court utilized the cost of repairs methodology to calculate damages because the diminution in value approach resulted in damages that exceeded repair costs. The trial court found the total cost of repairs proven at trial—$168,223.44—was attributable to Wilkinson’s “defective construction of the residence” and that, “due to the poor quality of the construction,” the porch and garage had to be completely replaced, “thus destroying a fair amount” of Wilkinson’s work. ¶ 28 Because Wilkinson had raised his res judicata claim as an affirmative defense, the trial court addressed the issue in its memorandum decision, again finding that res judicata did not -7- bar the 2019 complaint for the reasons set forth in the trial court’s prior order denying the initial section 2-619(a)(4) motion. ¶ 29 This appeal followed. ¶ 30 II. ANALYSIS ¶ 31 This appeal presents three issues for our review: (1) whether the doctrine of res judicata bars the Youngs’ 2019 complaint because of the final judgment obtained on Wilkinson’s counterclaim filed in the 2015 lawsuit, (2) whether the Youngs’ appraisal expert’s opinions should have been barred, and (3) whether the evidence at trial was sufficient to support the trial court’s damages calculation and its rejection of the mitigation of damages defense. We address these issues in turn. ¶ 32 A. Res Judicata ¶ 33 1. Doctrine of Res Judicata ¶ 34 The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction bars any subsequent actions between the same parties or their privies on the same cause of action. A&R Janitorial v. Pepper Construction Co., 2018 IL 123220, ¶ 16; River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 302 (1998). Res judicata bars not only what was actually decided in the first action but also those matters that could have been decided. A&R Janitorial, 2018 IL 123220, ¶ 16. The policies underlying the doctrine are to promote judicial economy and to protect defendants from the burden of having to relitigate essentially the same claim. Richter v. Prairie Farms Dairy, Inc., 2016 IL 119518, ¶ 21 (citing Hayashi v. Illinois Department of Financial & Professional Regulation, 2014 IL 116023, ¶ 45). ¶ 35 2. Application of the Elements -8- ¶ 36 Three requirements must be met for res judicata to apply: (1) an identity of parties or their privies, (2) a final judgment on the merits rendered by a court of competent jurisdiction, and (3) an identity of cause of action. A&R Janitorial, 2018 IL 123220, ¶ 16. The burden of establishing res judicata is upon the party invoking it. Torcasso v. Standard Outdoor Sales, Inc., 157 Ill. 2d 484, 491 (1993). Whether a claim is barred under the doctrine of res judicata is a question of law, which we review de novo. Arvia v. Madigan, 209 Ill. 2d 520, 526 (2004). ¶ 37 a. Identity of Parties ¶ 38 The first requirement for res judicata, an identity of parties or their privies, is clearly present in this case. Both the 2015 litigation and the 2019 litigation involved the Youngs and Wilkinson. ¶ 39 b. Final Judgment ¶ 40 A judgment or order is considered “final” when it terminates the litigation and fixes absolutely the parties’ rights, leaving only enforcement of the judgment. Richter, 2016 IL 119518, ¶ 24. There is no question that the April 26, 2019, order denying recovery on Wilkinson’s counterclaim was a final and appealable order. By the time that order was entered, the entirety of the Youngs’ claim had been voluntarily dismissed, and a verdict was directed against Gallagher; the order disposed of all the remaining claims in the 2015 litigation, i.e., Wilkinson’s counterclaim. Moreover, no appeal was taken from that order. Accordingly, the April 26, 2019, order entering judgment on Wilkinson’s counterclaim for lack of substantial performance was a final judgment on the merits. ¶ 41 c. Identity of Cause of Action ¶ 42 The third requirement for applying res judicata is an “identity of cause of action.” Identity of the causes of action may be determined from the record as well as from the pleadings -9- in both causes. Pierog v. H.F. Karl Contractors, Inc., 39 Ill. App. 3d 1057, 1061 (1976). A cause of action is defined by the facts that give rise to a right to relief. Wilson v. Edward Hospital, 2012 IL 112898, ¶ 10. ¶ 43 In his breach of contract claim, Wilkinson was required to establish (1) the existence of a valid and enforceable contract, (2) performance by the plaintiff, (3) breach of contract by the defendant, and (4) resultant injury to the plaintiff. See Timan v. Ourada, 2012 IL App (2d) 100834, ¶ 24. On his mechanic’s lien count, Wilkinson was required to establish that (1) the lien claimant had a valid contract (2) with the property owner (3) to furnish labor services or materials and (4) the lien claimant performed pursuant to the contract or had a valid excuse for its nonperformance. Tefco Construction Co. v. Continental Community Bank & Trust Co., 357 Ill. App. 3d 714, 719 (2005). ¶ 44 Although the general rule requires a mechanic’s lien claimant to establish full performance of the contract to enforce a lien for the value of the work or services performed, a lien claimant may still enforce a lien by proving substantial performance. Fieldcrest Builders, Inc. v. Antonucci, 311 Ill. App. 3d 597, 610 (1999). Substantial performance is “ ‘honest and faithful performance of the contract in its material and substantial parts, with no willful departure from, or omission of, the essential elements of the contract.’ ” Mani Electrical Contractors v. Kioutas, 243 Ill. App. 3d 662, 668 (1993) (quoting Folk v. Central National Bank & Trust Co. of Rockford, 210 Ill. App. 3d 43, 46-47 (1990)). Indeed, “[a] building contract may be held to be substantially performed, although there may be some omissions or deviations from the contract, or some defects in the material or workmanship, when these are not due to bad faith, do not impair the structure as a whole, [and] are remediable without doing material damage to other parts of the building.” Philip - 10 - Carey Manufacturing Co. v. Weygandt, 143 Ill. App. 297, 298 (1908); Doornbos Heating & Air Conditioning, Inc. v. Schlenker, 403 Ill. App. 3d 468, 483 (2010). ¶ 45 In defending against Wilkinson’s 2015 counterclaim, the Youngs were not required to prove Wilkinson’s noncompliance; it was Wilkinson’s burden as the lien claimant to establish substantial performance. Doornbos, 403 Ill. App. 3d at 483-84. Regarding the Youngs’ 2019 breach of contract claim, they were obligated to meet the same proofs outlined in Timan, namely, (1) the existence of a valid and enforceable contract, (2) performance by the plaintiff, (3) breach of contract by the defendant, and (4) resultant injury to the plaintiff. Timan, 2012 IL App (2d) 100834, ¶ 24. ¶ 46 Under the “transactional test” used by Illinois courts, separate claims are considered the same cause of action if they “arise from a single group of operative facts, regardless of whether they assert different theories of relief.” River Park, Inc., 184 Ill. 2d at 311. “ ‘[S]eparate claims will be considered the same cause of action for purposes of res judicata if they arise from a single group of operative facts, regardless of whether they assert different theories of relief.’ ” Hayashi, 2014 IL 116023, ¶ 46 (quoting River Park, Inc., 184 Ill. 2d at 311). Certainly, the Youngs’ 2019 breach of contract claims against Wilkinson arise from the same operative facts as Wilkinson’s 2015 lien and contract claims, as both arise from his construction of the Youngs’ house. Does this mean that the Youngs were required to have their claims against Wilkinson adjudicated in the 2015 litigation or lose them to res judicata? ¶ 47 The answer lies in understanding how Wilkinson’s 2015 claims were resolved. Illinois courts have also held that res judicata bars a subsequent action only “if successful prosecution of that action would, in effect, nullify the judgment entered in the original action.” See Corcoran-Hakala v. Dowd, 362 Ill. App. 3d 523, 530-31 (2005); Blumenthal v. Brewer, 2016 IL - 11 - 118781, ¶¶ 42-43. Specifically, res judicata bars a subsequent action if “successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action.” Restatement (Second) of Judgments § 22(2)(b) (1982); Carey v. Neal, Cortina & Associates, 216 Ill. App. 3d 51, 58 (1991) (describing subsection 22(2)(b) of the Restatement as a “ ‘common law’ rule of compulsory counterclaim”); see also Cabrera v. First National Bank of Wheaton, 324 Ill. App. 3d 85, 92 (2001); Corcoran-Hakala, 362 Ill. App. 3d at 530-31. ¶ 48 According to Restatement (Second) of Judgments, section 22: “(1) Where the defendant may interpose a claim as a counterclaim but he fails to do so, he is not thereby precluded from subsequently maintaining an action on that claim, except as stated in Subsection (2). (2) A defendant who may interpose a claim as a counterclaim in an action but fails to do so is precluded, after the rendition of judgment in that action, from maintaining an action on the claim if: (a) The counterclaim is required to be interposed by a compulsory counterclaim statute or rule of court, or (b) The relationship between the counterclaim and the plaintiff’s claim is such that successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action.” (Emphasis added.) Restatement (Second) of Judgments § 22 (1982). ¶ 49 Section 22’s Comment b points out that a defendant’s claim against a plaintiff is not normally merged in the judgment and “issue preclusion does not apply to issues not actually litigated *. The defendant, in short, is entitled to his day in court on his own claim.” Id. § 22, cmt. b, at 186; see Carey, 216 Ill. App. 3d at 56-57. - 12 - “In the interests of allowing a party his ‘day in court,’ then, the general rule assumes that the defendant in one lawsuit is not barred from suing the plaintiff in another, as long as the claim in issue is not one that must have been joined in the first suit as a counterclaim, either by statute, rule of court, or by those considerations that are expressed in subsection 22(2)(b).” Carey, 216 Ill. App. 3d at 57. ¶ 50 Under section 22(b), “[i]f the second suit would result in the nullification of the first judgment, res judicata bars the second suit in what may be viewed as a ‘common law’ rule of compulsory counterclaim.” (Emphasis omitted.) Id. at 58. Carey explained the principle as follows: “The central question is whether “allowance of a subsequent action would so plainly operate to undermine the initial judgment that the principle of finality requires preclusion of such an action. * For such an occasion to arise, it is not sufficient that the counterclaim grow out of the same transaction or occurrence as the plaintiff’s claim, nor is it sufficient that the facts constituting a defense also form the basis of the counterclaim. The counterclaim must be such that its successful prosecution in a subsequent action would nullify the judgment, for example, by allowing the defendant to enjoin enforcement of the judgment, or to recover on a restitution theory the amount paid pursuant to the judgment, * or by depriving the plaintiff in the first action of property rights vested in him under the first judgment.” (Emphasis omitted and added.) Id. at 58-59 (citing Restatement (Second) of Judgments § 22, cmt. f, at 189-90 (1982)). Since Carey, section 22 has been applied or cited with approval by several Illinois courts, including Agriserve, Inc. v. Belden, 268 Ill. App. 3d 828, 835 (1994), Corcoran-Hakala, 362 Ill. App. 3d at - 13 - 531, Kasny v. Coonen & Roth, Ltd., 395 Ill. App. 3d 870 (2009), and most recently Blumenthal, 2016 IL 118781, ¶¶ 42-43. ¶ 51 In Illinois, counterclaims are generally permissive rather than mandatory. See 735 ILCS 5/2-608(a) (West 2020); Marsh v. Nellessen, 235 Ill. App. 3d 998, 1001 (1992). As a general rule, “the defendant retains the choice of bringing a separate action against the plaintiff instead of filing a counterclaim.” Carey, 216 Ill. App. 3d at 56. Pertinent to the issues here, the Mechanics Lien Act provides that parties “may” litigate other matters between them, does not expressly require them to do so or to file a counterclaim. 770 ILCS 60/9 (West 2020). In other words, counterclaims remain permissive in a mechanic’s lien action, not compulsory. The danger in choosing not to bring any permissive counterclaim is that resolution of the earlier litigation may bar the later suit via res judicata, but only if the second suit might nullify the results of the first. ¶ 52 Application of the foregoing principles to the instant case is straightforward. The only issue decided in the 2015 litigation was that Wilkinson failed to establish that he substantially performed his obligations under the home construction contract. The judgment in that litigation cannot conceivably be nullified by successful resolution of the Youngs’ subsequent 2019 complaint seeking damages for Wilkinson’s failure to comply with the contract terms and complete the job in a workmanlike manner. Far from nullifying the outcome of the 2015 case, what the Youngs seek is consistent with it. ¶ 53 Because successful prosecution of the 2019 action could not nullify the judgment entered in the original 2015 action, we conclude that res judicata does not apply to bar the subsequent 2019 complaint. If anything, by operation of collateral estoppel, the 2015 judgment should have precluded Wilkinson from relitigating his compliance with the contract. Herzog v. - 14 - Lexington Township, 167 Ill. 2d 288, 294-295 (1995). This argument was, in fact, raised below, but it is now moot because the trial court found against Wilkinson. ¶ 54 Wilkinson’s related contention that the Youngs have engaged in “claim splitting” is misplaced. It is true that, where a cause of action is in its nature entire and indivisible, a plaintiff cannot divide it in order to maintain separate lawsuits. Best Coin-Op, Inc. v. Paul F. Ilg Supply Co., 189 Ill. App. 3d 638, 657 (1989). That is, a plaintiff is not permitted to sue for part of a claim in one action and then sue for the remainder in another action. Rein v. David A. Noyes & Co., 172 Ill. 2d 325, 340 (1996). Instead, a plaintiff must assert all the grounds of recovery he may have against a defendant arising from a single cause of action in one lawsuit. Handley v. Unarco Industries, Inc., 124 Ill. App. 3d 56, 66 (1984); Piagentini v. Ford Motor Co., 387 Ill. App. 3d 887, 890-91 (2009). Simply put, none of the Youngs’ claims were split. Their claims were brought in the 2015 litigation, voluntarily dismissed without resolution, and then refiled in 2019. The prohibition against claim splitting is not implicated here. ¶ 55 For the reasons outlined above, we affirm the trial court’s ruling in favor of the Youngs on the issue of res judicata. ¶ 56 B. Admissibility of Expert Opinions ¶ 57 Wilkinson raises the following issues with respect to the Youngs’ expert, Thomas Howe: (1) whether Howe’s testimony should be barred due to late disclosure, (2) whether Howe’s testimony should be stricken due to a failure in his methodology, and (3) if not, whether Howe’s opinion testimony be stricken because he did not utilize industry standard methodology in his appraisal calculations and because his opinions did not assist the trier of fact. ¶ 58 The admissibility of expert testimony is reviewed using an abuse of discretion standard. People v. Becker, 239 Ill. 2d 215, 234 (2010); Gill v. Foster, 157 Ill. 2d 304, 312-313 - 15 - (1993). “An abuse of discretion occurs only where no reasonable person would take the view adopted by the trial court.” (Internal quotation marks omitted.) In re Marriage of Berberet, 2012 IL App (4th) 110749, ¶ 41. ¶ 59 As explained below, we conclude there was no error in the admission of Howe’s opinion testimony. ¶ 60 1. Late Disclosure ¶ 61 Wilkinson argues that Howe’s opinion testimony in the 2019 litigation should have been barred because the Youngs failed to timely disclose Howe during the 2015 litigation. The Youngs, in fact, were denied leave to disclose a late expert in the 2015 litigation, which was apparently the reason they voluntarily dismissed those claims. Wilkinson argues that Illinois Supreme Court Rule 219(e) (eff. July 1, 2002) requires that the Youngs should not have been permitted to disclose an expert in 2019 litigation when they failed to timely do so in the 2015 litigation. Rule 219(e) provides, in relevant part, as follows: “A party shall not be permitted to avoid compliance with discovery deadlines, orders or applicable rules by voluntarily dismissing a lawsuit. In establishing discovery deadlines and ruling on permissible discovery and testimony, the court shall consider discovery undertaken (or the absence of same), any misconduct, and orders entered in prior litigation involving a party.” Ill. S. Ct. R. 219(e) (eff. July 1, 2002). ¶ 62 Relying on Freeman v. Crays, 2018 IL App (2d) 170169, ¶ 49, Wilkinson argues that, “[w]hen a case is refiled, the rule requires the court to consider the prior litigation in determining what discovery will be permitted, and what witnesses and evidence may be barred.” (Internal quotation marks omitted.) He further asserts that it is the trial court’s duty to “consider - 16 - the prior litigation in a refiled action * regardless of whether there has been a finding of misconduct.” Id. Wilkinson contends that, in accordance with Freeman, the trial court, in making this assessment, must consider the factors set forth in Smith v. P.A.C.E., 323 Ill. App. 3d 1067 (2001). ¶ 63 Initially, we note that Wilkinson forfeited the issue because, although he raised it in a pretrial motion to bar Howe, he did not renew the objection when Howe testified. See Illinois State Toll Highway Authority v. Heritage Standard Bank & Trust Co., 163 Ill. 2d 498, 502 (1994) (denial of motion in limine in a civil case does not preserve the issue for appeal if there is no contemporaneous objection at least the first time the evidence is offered at trial); Wingo v. Rockford Memorial Hospital, 292 Ill. App. 3d 896, 904 (1997); Schuler v. Mid-Central Cardiology, 313 Ill. App. 3d 326, 333 (2000). Wilkinson did, in fact, object to Howe’s opinions concerning the methodology used in his “as built” calculations, but that objection did not extend to any of the Rule 219(e) grounds asserted in the pretrial motion to bar. ¶ 64 Even if we were to consider Wilkinson’s Rule 219(e) argument, however, we would reject it. A review of the trial court’s August 19, 2021, order denying the motion to bar shows unequivocally that the trial judge thoroughly considered Rule 219(e) and the various factors enunciated in P.A.C.E. and provided his rationale for ruling on the motion. Two factors specifically addressed by Wilkinson are the good faith of the Youngs and Wilkinson’s timeliness in raising the issue. With respect to the Youngs’ good faith, the trial court felt that their failure to disclose an expert in the original action was due to their attorney’s mistake “as to the plaintiffs’ burden of proof on the issue of damages” and that this was “an honest mistake” and not “intentionally non- compliant or intentionally dilatory.” As to Wilkinson’s own timeliness in raising the issue, the trial - 17 - court was concerned that Wilkinson waited for months before challenging a witness he had known about early in the case. ¶ 65 The trial court gave appropriate consideration to the factors to be examined under Illinois Supreme Court Rule 219(e) (eff. July 1, 2002). Having done so, we cannot now on appeal reweigh those factors, absent an abuse of discretion. In re Marriage of Donovan, 361 Ill. App. 3d 1059, 1064 (2005). We find no abuse of discretion here. ¶ 66 2. Striking Howe’s Valuation Opinions ¶ 67 Alternatively, Wilkinson argues that Howe’s opinions should be stricken because he utilized an improper methodology in conducting his “as built” appraisal and wrongly relied on the Youngs’ cost valuations rather than conducting his own independent research. On this point, Wilkinson contends Howe’s methodology failed to satisfy the standard for admissibility established in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923). He then argues that numerous deficiencies in Howe’s testimony go to the admissibility of Howe’s testimony, instead of its weight. ¶ 68 a. Summary of Objections Raised at Trial ¶ 69 During Howe’s testimony, Wilkinson was permitted to voir dire the witness “as to his method in obtaining the value as built.” When counsel completed his voir dire, he then moved to exclude Howe’s “testimony of the appraisal *** because all he’s doing is subtracting numbers that the Youngs gave him and all that does is beg the question.” Counsel’s objection was overruled, with the trial court finding, “I think those issues that you’re raising go to the weight and not the admissibility.” - 18 - ¶ 70 Counsel offered no further objection until the Youngs tendered plaintiffs’ exhibits 21 and 23—Howe’s appraisal report and his supplemental appraisal report. When asked the basis for his objection to the exhibits, Wilkinson’s counsel stated: “There is no skill or expertise that went into the as built number. I don’t have any problem with the as is number. I’m talking about the as built number and all he really did was subtract and a fifth grader could have done that. It didn’t take an appraiser to take the Youngs’ numbers and say, okay, I guess these are all exactly correct and to give an opinion based on that and the opinion doesn’t include the lay of the land.” Counsel’s objections were overruled, with the trial judge again finding that the objection went to “the weight, not the admissibility”—“what weight is given to it.” ¶ 71 At the conclusion of trial, each party was permitted to submit additional arguments on Howe’s testimony. In the preface to Wilkinson’s supplemental authorities, Wilkinson stated: “Because the opinions of Plaintiffs’ appraisal expert, Thomas F. Howe, were admitted into evidence over objection, it being the courts [sic] ruling that any flaws should go to weight rather than admissibility, Defendant’s following authorities discussing admissibility should be read as going to giving the testimony no weight.” ¶ 72 The trial court, in its memorandum decision, concluded that Wilkinson’s objections went to weight rather than admissibility. ¶ 73 b. Any Frye Issue Is Forfeited ¶ 74 Though it was not the basis of his objection to Howe’s opinion testimony below, Wilkinson argues on appeal that the testimony fails to satisfy the Frye test for admissibility. Commonly called the “general acceptance” test, the Frye standard dictates that scientific evidence - 19 - is admissible at trial only if the methodology or scientific principle upon which the opinion is based is “sufficiently established to have gained general acceptance in the particular field in which it belongs.” Id. at 1014. In this context, “general acceptance” does not mean universal acceptance, nor does it require that the methodology be accepted by unanimity, consensus, or even a majority of experts. Donaldson v. Central Illinois Public Service Co., 199 Ill. 2d 63, 78 (2002), abrogated on other grounds, In re Commitment of Simons, 213 Ill. 2d 523, 529-530 (2004). Instead, it is sufficient that the underlying method used to generate an expert’s opinion is reasonably relied upon by experts in the relevant field. Donaldson, 199 Ill. 2d at 77; Simons, 213 Ill. 2d at 530. Significantly, the Frye test applies only to “new” or “novel” scientific methodologies. Donaldson, 199 Ill. 2d at 78-79; Simons, 213 Ill. 2d at 530. Generally speaking, a scientific methodology is considered “new” or “novel” if it is “ ‘original or striking’ ” or “does ‘not resembl[e] something formerly known or used.’ ” Donaldson, 199 Ill. 2d at 79 (quoting Webster’s Third New International Dictionary 1546 (1993)); Simons, 213 Ill. 2d at 529-30. ¶ 75 Simply put, Wilkinson never invoked Frye by name or in substance in the trial court, a point counsel conceded at oral argument. He never asked the trial court to conduct a Frye hearing, nor did he specifically invoke Frye as a basis to exclude Howe’s testimony. Wilkinson clearly expressed disagreement with the soundness of Howe’s methodology, but he never argued that Howe’s methodology was “new,” “novel,” or “not generally accepted.” Nor did Wilkinson introduce any such evidence himself. Frye applies to opinions “based on new or novel scientific methodology or principle.” See Ill. R. Evid. 702 (eff. Jan. 1, 2011). As the proponents of Howe’s testimony, the Youngs would have borne the “burden of showing the methodology or scientific principle on which the opinion is based is sufficiently established to have gained general acceptance,” but only if Howe’s methodology was “new or novel.” Id. Here, there was no evidence - 20 - of the newness or novel nature of Howe’s methodology, so the Youngs’ obligation to establish its general acceptance was never triggered. ¶ 76 In Snelson v. Kamm, 204 Ill. 2d 1, 24-25 (2003), the supreme court held that the failure to request a Frye hearing or object to the testimony on that basis resulted in forfeiture of the issue for appellate review. We find that Wilkinson has not properly preserved the Frye issue here. It would be patently unfair to now require the Youngs to defend the general acceptance of Howe’s methodology per Frye when the issue was not raised below. ¶ 77 c. The Remaining Objections Impact Weight, Not Admissibility ¶ 78 Of course, Frye is only one aspect of what might limit admissibility of an expert’s testimony, and Wilkinson did raise an objection to the soundness of Howe’s calculation of the “as built” valuation. However, outside of the Frye setting, the admission of expert testimony is a matter of trial court discretion, and we review only for any abuse of that discretion. See Simons, 213 Ill. 2d at 530-531. ¶ 79 Specifically, the sole objection raised to Howe’s testimony and to the admission of plaintiffs’ exhibits 21 and 23 (Howe’s appraisal reports) was that of improper methodology. Wilkinson conducted a limited voir dire of Howe on the issue and further cross-examined him as to how he arrived at the “as built” valuation. ¶ 80 Like the trial court, we consider the challenge to Howe’s methodology to go to the weight of that testimony, not its admissibility. “A person will be allowed to testify as an expert if his experience and qualifications afford him knowledge that is not common to laypersons, and where his testimony will aid the trier of fact in reaching its conclusions.” Thompson v. Gordon, 221 Ill. 2d 414, 428 (2006) (citing People v. Miller, 173 Ill. 2d 167, 186 (1996)). An expert’s qualifications by knowledge, skill, experience, training, or education in a field require “ ‘at least a - 21 - modicum of reliability.’ ” Turner v. Williams, 326 Ill. App. 3d 541, 552 (2001) (quoting Wiegman v. Hitch-Inn Post of Libertyville, Inc., 308 Ill. App. 3d 789, 799 (1999)). ¶ 81 Furthermore, the basis for a witness’s opinion generally does not affect his standing as an expert; such matters go only to the weight of the evidence, not its sufficiency. See National Bank of Monticello v. Doss, 141 Ill. App. 3d 1065, 1072 (1986). The weight to be assigned to an expert opinion is for the trier of fact to determine in light of the expert’s credentials and the factual basis of his opinion. Treadwell v. Downey, 209 Ill. App. 3d 999, 1003 (1991). The burden is placed upon the adverse party during cross-examination to elicit the facts underlying the expert opinion. Wilson v. Clark, 84 Ill. 2d 186, 194 (1981); Griffin v. Prairie Dog Ltd. Partnership, 2019 IL App (1st) 173070, ¶ 69. Here, Wilkinson’s counsel was given ample opportunity to question Howe’s credentials, his experience, and the bases for his opinions. ¶ 82 We find that the trial court properly admitted Howe as an expert witness subject to the foregoing issues affecting the weight to be given to his testimony. ¶ 83 C. Proof of Damages ¶ 84 Beyond issues of the admissibility of the Youngs’ evidence on damages, Wilkinson argues that the evidence admitted was insufficient to support the damages awarded. An award of damages is reviewed under a manifest weight standard, and a trial court’s award is against the manifest weight “only if the opposite result is clearly evident.” (Internal quotation marks omitted.) Swigert v. Gillespie, 2012 IL App (4th) 120043, ¶ 28. In a bench trial, it is for the trial judge to determine the credibility of the witnesses, to weigh the evidence and draw reasonable inferences therefrom, and to resolve any conflicts in the evidentiary record. Dowd & Dowd, Ltd. v. Gleason, 352 Ill. App. 3d 365, 376 (2004). - 22 - ¶ 85 Wilkinson contends that the trial court’s damages award should be reversed, arguing, inter alia, that the court (1) utilized an improper methodology in measuring damages, (2) made various errors in calculating cost of repairs damages, namely (a) not specifying how it arrived at the $168,233.44 cost of repairs figure and (b) wrongly awarding cost of repair damages based on Derrer Construction’s invoices, (3) did not properly consider the necessity of repairs as to Johnson Heating & Plumbing, (4) failed to consider “comparable sales” for the ‘as built” residence, (5) wrongly considered Howe’s “cost of repair” methodology used in rendering his “as built” valuation, and (6) erred in rejecting Wilkinson’s mitigation of damages defense. We address each contention in turn. ¶ 86 1. Method of Calculation of Damages Awarded ¶ 87 It is well settled in Illinois that the measure of damages for a breach of contract when a builder has provided less than full performance or has provided defective performance is generally the cost of correcting the defective condition. Park v. Sohn, 89 Ill. 2d 453, 464 (1982); Arch of Illinois, Inc. v. S.K. George Painting Contractors, Inc., 288 Ill. App. 3d 1080, 1082 (1997). However, two exceptions exist: (1) when the defects can only be corrected at a cost unreasonably disproportionate to the benefit to the purchaser or (2) when correcting the defects would entail an unreasonable destruction of the builder’s work. If either exception applies, then the proper measure of damages is the amount by which the defects have reduced the value of the property. Park, 89 Ill. 2d at 464-65; Wells v. Minor, 219 Ill. App. 3d 32, 40 (1991). ¶ 88 Here, the trial court examined the second exception because the garage and porch had to be completely replaced. Moreover, it made the express finding that this “destruction” was reasonable due to the defective construction. “[D]ue to the poor quality of the construction, the repairs that were required to correct certain aspects of the construction[ ] led to the porch and the - 23 - garage having to be completely replaced, thus destroying a fair amount of the defendant’s work.” For this reason, the trial court applied the cost of repair measure of damages, concluding that “the evidence of damages based upon diminution in value [$240,472.00] exceeds the evidence of damages for the cost of repairs [$168,233.44]” and that the second exception noted in Arch of Illinois and Parks did not apply. It is “not merely the destruction of the original work that must be considered” but its “unreasonable destruction.” (Emphasis in original.) Arch of Illinois, 288 Ill. App. 3d at 1083. The rule requires the diminution-in-value method only “when correcting the defective work would result not only in discarding the defective work but also in destroying, for example, those portions of a building which were largely free of defects.” Id. ¶ 89 The trial court concluded that the destruction was not unreasonable and, as a result, the proper measure of damages was cost of repairs. No evidence was presented suggesting that the work correcting the construction defects would involve the “unreasonable destruction” of Wilkinson’s initial work. While some of Wilkinson’s work was surely replaced—for example the porch and garage—there was no showing that this was not necessary to address the defects. In McIntyre, the court observed, “The correction of the defects here will not involve an unreasonable destruction of plaintiff’s work as the record reflects that the necessary corrections could only be made if the siding installed by plaintiff was removed.” J-M Builders & Supplies Corp. v. McIntyre, 56 Ill. App. 3d 714, 716 (1978). The same observation applies here. For these reasons, we find the trial court’s conclusion and methodology are supported by the evidence of record. ¶ 90 2. Amount of the Costs of Repairs ¶ 91 We now address Wilkinson’s numerical challenges to the damages awarded. Here, Wilkinson argues that the trial court (1) failed to specify how it arrived at the $168,233.44 damages - 24 - figure and (2) improperly awarded contractor Derrer Construction damages in the amount of $146,523.44, when the invoices submitted by the Youngs totaled only $113,766.28. ¶ 92 a. Failure to Specify Precise Damages Awarded ¶ 93 Wilkinson first challenges the trial court’s failure to list the repairs awarded, claiming that he has no idea how the court reached its conclusion on damages. Yet in its March 2022 memorandum decision, the trial court expressly denoted the dollar amount of each of the contractor invoices offered by the Youngs as plaintiffs’ exhibits 14-20 during its rendition of the facts of the case. Then, after determining that the Youngs failed to prove that two of the bills were caused by Wilkinson’s defective construction, the court calculated the total cost of repairs by adding the remaining amounts to reach the total of $168,233.44. This amount correlates exactly with plaintiffs’ exhibit 22, which listed the total of all bills paid by the Youngs. We find no error in the trial court’s failure to list those numbers specifically or separately in its memorandum decision. ¶ 94 b. Discrepancy in Derrer Construction’s Invoice Versus Amount Awarded ¶ 95 As to Wilkinson’s argument regarding the discrepancy in Derrer Construction’s invoices versus the amount awarded, we further decline to disturb the trial court’s ruling. While it is true that the invoices submitted for Derrer Construction’s work totaled only $113,766.28, Annetta Young testified and documented by way of cancelled checks that she paid Derrer Construction $146,523.44 for the work it performed repairing her residence. She further testified that it was “very possible” the exhibit containing Derrer Construction’s invoices was not complete and that an invoice might be missing. ¶ 96 Based on Annetta Young’s testimony, we cannot say that an opposite result is clearly apparent on this issue. Simply because there was “some evidence” supporting Wilkinson’s - 25 - claim—namely, the invoices totaling only $113,766.28 in charges—does not mean that the trial court’s finding was against the manifest weight of the evidence. See Scalise v. Board of Trustees of the Westchester Firemen’s Pension Fund, 264 Ill. App. 3d 1029, 1035 (1993) (finding may not be against manifest weight of evidence even if there is “some evidence” contradicting it). Stated another way, “[i]t will not suffice to show that the record will support a contrary decision; rather, if the record contains any evidence to support the trial court’s judgment, the judgment should be affirmed.” Department of Transportation ex rel. People v. 151 Interstate Road Corp., 209 Ill. 2d 471, 488 (2004). ¶ 97 As trier of fact, the trial court was entitled to credit Annetta Young’s testimony and find it sufficient to establish the amounts paid to Derrer Construction. We do not find the trial court’s award to be against the manifest weight of the evidence. ¶ 98 3. Necessity of Repairs ¶ 99 Wilkinson challenges several of the cost of repairs bills based on their necessity, most notably the $5329.23 in plumbing and heating repair bills. Other than the heating and plumbing bill, all repair bills relevant to this appeal were admitted without objection. The Youngs further presented testimony concerning payment of the various bills, which in Illinois constitutes prima facie evidence that the bill was reasonable. Baker v. Hutson, 333 Ill. App. 3d 486, 493 (2002). There was appropriate testimony from the various contractors about the work they performed. The trial court properly found these latter bills reasonable and necessary, and we conclude that this finding is not against the manifest weight of the evidence. ¶ 100 As to the heating and plumbing bill, Wilkinson objected only as to necessity of the work. The trial court found that the Youngs presented evidence of “defects in the plumbing and heating features of the new residence” and specifically found that the “master bedroom tub pulled - 26 - away from the wall when filled with water” and that “the hot water heat that had been installed in the garage floor” did not work properly. The garage, the court found, had to be completely replaced due to the construction defects. Johnson Plumbing & Heating was hired to repair this work. ¶ 101 At trial, Gabe Young discussed the master bedroom tub issues and the garage in- floor heating, and Annetta Young testified that the bills she paid covered the repair work needed to fix the construction defects. Moreover, many of the plumbing and heating defects were outlined by the two home inspectors, Michael Musgrave and Casper Manheim, who inspected the home for construction defects and prepared written reports, which were received into evidence. ¶ 102 Accordingly, the trial court’s findings on this point are not against the manifest weight of the evidence. ¶ 103 4. Comparable Sales for “As Built” Residence ¶ 104 Wilkinson next contends that Howe failed to conduct a “comparable sales” assessment when he determined the residence’s “as built” value. Wilkinson acknowledges that comparable sales were used to determine the value of the residence “as is” or “as repaired” but criticizes the failure to consider comparable sales when valuing the residence when first constructed. However, Howe’s calculation of the “as built” value was never challenged on the use of comparable values at trial or in the posttrial supplementation of authorities; therefore, it is forfeited. Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 413 (2002). Wilkinson’s sole challenge at trial to the “as built” value was based on Howe’s valuation of repair costs, which he subtracted from the initial value, and not on how the initial value was calculated. ¶ 105 5. Cost of Repairs Methodology in Calculation of “As Built” Valuation ¶ 106 As an additional argument concerning Howe’s “as built” valuation calculation, Wilkinson asserts error in Howe’s methodology for determining “cost of repairs,” which Howe - 27 - then used to calculate the residence’s “as built” value. Although we rejected Wilkinson’s challenge to the admissibility of Howe’s opinion testimony on this point, we now consider those points in the context of the sufficiency of the evidence of damages. Howe testified that he used the actual cost of repair figures provided by the Youngs, adjusted those costs for various price increases, and then subtracted that number from his assessed “as is” or “as repaired” value based on comparable properties to arrive at his “as built” value and, therefore, the diminution in value due to the construction defects. Wilkinson’s counsel objected to this method and argued for application of what he called the “breakdown approach,” which Howe said was a depreciation method. ¶ 107 Howe went on to discuss why he used his methodology, stating that he conducted his assessment “the way a buyer would look at what it was going to cost them to repair the damage if they wanted to buy that property.” He further explained why he adjusted the actual costs of repairs, which was to accommodate the fact the expenses had been incurred in prior years and were not reflective of current prices. Wilkinson’s counsel had ample opportunity to develop his points at trial and in a posttrial supplemental memorandum. These points were considered by the trial court, as trier of fact, in its assessment of damages. The trial court’s conclusions are not against the manifest weight of the evidence. ¶ 108 We also note that, because the trial court used the cost of repairs measure of damages, the importance of Howe’s testimony on diminution of value is greatly diminished. The trial court’s conclusion that the destruction of the garage and porch was necessitated by the “poor construction” is the equivalent of concluding the destruction was not unreasonable. This finding obviates the need to rely on the diminution in value methodology, and thus, even if were to find some error regarding Howe’s valuation testimony, it made no difference to the ultimate outcome - 28 - of this case. Moreover, Howe’s testimony played no role in the trial court’s determination as to the reasonableness of the destruction of the garage and porch. ¶ 109 6. Mitigation of Damages ¶ 110 Finally, Wilkinson argues that the Youngs failed to properly mitigate their damages. Related to this mitigation, he contends that the trial court erred in awarding certain aspects of damages because no evidence was offered “as to which ‘cures,’ repairs or rebuilds added value and which weren’t worth it, the choice of rebuilding rather than repairing.” But Wilkinson bore the burden of proof on the affirmative defense of failure to mitigate, yet he himself offered little evidence on that defense. One who asserts an affirmative defense has the burden of proving it. Baylor v. Thiess, 2 Ill. App. 3d 582, 584 (1971); Capitol Plumbing & Heating Supply, Inc. v. Van’s Plumbing & Heating, 58 Ill. App. 3d 173, 175 (1978). We cannot say that the trial court’s decision on that issue is against the manifest weight of the evidence. ¶ 111 III. CONCLUSION ¶ 112 For the reasons stated, we affirm the trial court’s judgment. ¶ 113 Affirmed. - 29 - Young v. Wilkinson, 2022 IL App (4th) 220302 Decision Under Review: Appeal from the Circuit Court of Carroll County, No. 19-L-7; the Hon. Scott Brinkmeier and the Hon. Val Gunnarsson, Judges, presiding. Attorneys Thomas J. Potter, of Ludens & Potter, of Morrison, for appellant. for Appellant: Attorneys John A. Guzzardo, of Ward, Murray, Pace & Johnson, P.C., of for Sterling, and Matthew D. Cole, of Ward, Murray, Pace & Appellee: Johnson, P.C., of Dixon, for appellees. - 30 -	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483702/	Filed 10/14/22 Modified and Cert. for Partial Pub. 11/14/22 (order attached) IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT WILLIAM HOBBS et al., H047705 (Monterey County Plaintiffs and Appellants, Super. Ct. No. 18CV002411) v. CITY OF PACIFIC GROVE et al., Defendants and Respondents. This appeal by plaintiffs William and Susan Hobbs and Donald and Irma Shirkey asks us to hold that defendant City of Pacific Grove (the City)—by granting them one-year licenses to offer residential real properties for short-term vacation rentals— conferred a property right protected by the state and federal constitutions in the renewal of those licenses. The Hobbses have since sold their home, rendering their claims moot. In our independent judgment, we conclude the Shirkeys’ claims are devoid of constitutional merit. I. BACKGROUND1 A. The Regulatory Framework For the first time in 2010, with the enactment of Pacific Grove Ordinance No. 10- 0012, the City allowed “transient use of residential property for remuneration,” subject to licensing, taxes, and other regulation. Licenses were issued upon application for a period of one year, subject to earlier revocation for good cause. By January 2011, the City had licensed 85 active short-term rentals. In 2016, the City capped the overall number of short-term rental licenses citywide at 250 and further established a density cap of “15 [percent] per block.” (Ord. No. 16-007; Pacific Grove Mun. Code, former § 7.40.25.)3 In 2017, the City reaffirmed its 250-license citywide maximum, prohibited more than one license per parcel, and required a 55-foot buffer “zone of exclusion” between licensed properties. (Ord. No. 17-024; Mun. Code, § 7.40.040.) The 2017 ordinance included several provisions regarding renewal or revocation of short-term rental (SRT) licenses. “The City Manager or his/her designee may delay or deny issuance of an STR license for any reason.” (Ord. No. 17-024; Mun. Code, § 7.40.060(g).) “No STR license shall be automatically renewed.” (Ord. No. 17-024; Mun. Code, § 7.40.080.) “Any STR license issued pursuant to this Chapter may be withdrawn, suspended or revoked for any reason.” (Ord. No. 17-024; Mun. Code, § 7.40.090.) Each applicant for a license was required to affirm the following language: “I understand this license expires on March 31 each year, renewal of this license is not 1 We take the facts in parts I.A and I.B. from the parties’ separate statements of undisputed material facts, evidence admitted in conjunction with the motion for summary judgment, and admissions in the parties’ briefs. (See Thompson v. Ioane (2017) 11 Cal.App.5th 1180, 1186, fn. 4.) 2 Further references to “Ordinance” or “Ord.” are to Pacific Grove ordinances. 3 Further references to “Mun. Code” are to the Pacific Grove Municipal Code. 2 guaranteed, and the penalty for operation without a license is 100% forfeiture of rents received.” By early 2018, the City had in fact issued 289 short-term rental licenses, in excess of the 250-license maximum established in Ordinance 16-007 and, in certain areas, in excess of the 15 percent density limit. Accordingly, in areas where short-term rental licenses exceeded the 15 percent cap per block, the City resolved to select licenses to “sunset” after a grace period following the scheduled expiration of their existing term. (Ord. No. 18-005, § 2.) The City settled upon a random lottery as a “means to avoid substantive favoritism” in reducing the number of licenses “in a fair and equitable manner.” The City conducted the lottery in May 2018, selecting 51 licenses to sunset the following year. These licenses would remain active past their existing term through April 2019, to afford licensees time to cease accepting new bookings and prepare the property for alternative uses, such as rentals for longer than 30 days. On November 6, 2018, Pacific Grove voters approved Measure M, by which the City would prohibit and phase out, over an 18-month sunset period, all existing short- term rentals in residential districts, except in the City’s “Coastal Zone,” as defined by the California Coastal Act of 1976 (Pub. Resources Code, § 30103), which remained governed by Ordinance No. 18-005. (Measure M, approved by Pacific Grove voters (Monterey Voter Information Guide, Gen. Elec. (Nov. 6, 2018)) (Measure M).) Measure M did not restrict short-term rentals in nonresidential districts or otherwise modify “existing rules for bed and breakfast inns, motels, hotels, and other visitor lodging.” Measure M also provided that “residents may allow short-term occupancy of their homes for home sharing, house swaps, house sitting, pet sitting, work trade, and similar arrangements[,]” which the voters deemed “compatible with residential uses.” Of the 51 licenses that had been selected by lottery to sunset under Ordinance No. 18-005, 22 were in the Coastal Zone. 3 B. Plaintiffs’ Participation in Short-Term Rentals In 2013, Susan Hobbs inherited a single-family residence in Pacific Grove that her parents had purchased over 50 years ago. She and her husband, William Hobbs, made $50,000 in repairs and improvements to what was then “an unmaintained eyesore,” before making it available for rent. They obtained a short-term rental license in 2013, which they renewed annually until 2019. Donald and Irma Shirkey own a single-family home on 5th Street in Pacific Grove’s Coastal Zone. They purchased the property in 1999 as a second home for their children and grandchildren to use when they visit. When their family is not visiting, the Shirkeys offer the home as a vacation rental in order to cover costs. They often rent it as a single unit and the City only required one short-term rental license when the property was first licensed in 2010. In 2017, the City required them to obtain a second short-term rental license for the separate guest quarters above the garage. The license assigned to Donald and Irma Shirkey for their main property was chosen for nonrenewal; the license for the upstairs guest quarters in the Shirkey property was not. Measure M has the effect of permanently prohibiting the short-term rental of the Hobbs property. The Shirkey property, in the Coastal Zone, remains subject to Ordinance No. 18-005. C. Trial Court Proceedings Plaintiffs filed the operative first amended complaint for declaratory and injunctive relief in December 2018, alleging the City unconstitutionally deprived plaintiffs of “their right to allow guests to stay in their home.” In the first count, plaintiffs alleged that the City was required to obtain the California Coastal Commission’s approval before adopting Ordinance No. 18-005. In the second count, plaintiffs alleged that Ordinance No. 18-005 violates plaintiffs’ right to due process by arbitrarily limiting the number of homes that can be offered as short-term 4 rentals and by subjecting them to random selection for nonrenewal of licensure. Plaintiffs further allege that Measure M violates William and Susan Hobbs’s right to due process by prohibiting all homes outside of the Coastal Zone from being offered as short- term rentals. Plaintiffs moved for summary judgment or, in the alternative, summary adjudication of each count in the first amended complaint. The trial court issued an order granting summary adjudication as to count 1 and denying it as to count 2. As to count 1, the court declared that “Ordinance 18-005 constitutes development within the Coastal [Z]one, and the City needs to obtain approval by the California Coastal Commission . . . of a Local Coastal Program or obtain a Coastal Development Permit from the Commission”; as to count 2, the court determined that plaintiffs failed to “carry their burden of proof” on whether they “have a substantive or procedural due process right to renew the time-limited short-term rental licenses.” Plaintiffs then filed what they denominated a motion in limine to exclude all evidence except their 2018 short-term rental license applications4 and to enter judgment in favor of defendants with respect to count 2. The trial court denied the motion. Plaintiffs thereafter sought dismissal of count 2 with prejudice, citing Ashland Chemical Co. v. Provence (1982) 129 Cal.App.3d 790, 792-793 (treating order of dismissal on plaintiff’s voluntary request as appealable). The trial court issued an order dismissing count two. Plaintiffs timely appealed from the order of dismissal. Defendants cross-appealed from the trial court’s order granting summary adjudication as to count one. 4 The applications were attached as Exhibits 2 and 7 to the Declaration of Ben Harvey, City Manager, in Opposition to Plaintiffs’ Motion for Summary Judgment or in the Alternative for Summary Adjudication. 5 II. DISCUSSION A. Preliminary Matters 1. Justiciability “It is well settled that an appellate court will decide only actual controversies and that a live appeal may be rendered moot by events occurring after the notice of appeal was filed. We will not render opinions on moot questions or abstract propositions, or declare principles of law which cannot affect the matter at issue on appeal.” (Daily Journal Corp. v. County of Los Angeles (2009) 172 Cal.App.4th 1550, 1557.) Defendants’ cross-appeal pertains only to count 1 of the operative complaint, by which plaintiffs challenge Ordinance No. 18-005 on the theory that it required Coastal Commission approval. After the trial court granted summary adjudication as to count 1, the Coastal Commission approved the City’s Local Coastal Program, including Ordinance No. 18-005.5 As both parties acknowledge, the Coastal Commission’s approval of the City’s Local Coastal Program, including the 2018 Ordinance, has rendered moot both the City’s cross-appeal and count 1 in its entirety, warranting dismissal of both. We therefore dismiss the cross-appeal and will direct the trial court to dismiss count 1. (See Monterey v. California Coastal Com. (1981) 120 Cal.App.3d 799, 805, 807; Coalition for a Sustainable Future in Yucaipa v. City of Yucaipa (2011) 198 Cal.App.4th 939, 947.) A further event impeding justiciability of plaintiffs’ claims for declaratory and injunctive relief as to Measure M is the Hobbses’ loss of standing by virtue of their sale 5 We grant the City’s unopposed request for judicial notice of (1) the March 11, 2020, minutes of the California Coastal Commission meeting; (2) the City’s certified Implementation Plan codified in Pacific Grove Municipal Code section 23.90.220(c)(8). (Evid. Code, § 452, subd. (b); Services Union v. City and County of San Francisco (1991) 234 Cal.App.3d 1093, 1098, fn. 3, Stockton Citizens for Sensible Planning v. City of Stockton (2012) 210 Cal.App.4th 1484, 1488, fn. 3.) 6 of the residence at issue.6 Plaintiffs’ allegations in count 2 regarding the constitutionality of Measure M are predicated wholly upon the asserted injury to William and Susan Hobbs, by virtue of their ownership of a residential property outside of the Coastal Zone. “In California, the right to appeal civil actions is statutory. [Citation.] In order to exercise that statutory right, an appellant must have standing. [Citation.]” (In re Marriage of Burwell (2013) 221 Cal.App.4th 1, 12.) “To have appellate standing, one must (1) be a party and (2) be aggrieved.” (Ibid.) A party is “ ‘aggrieved’ ” if his or her rights or interest are injuriously affected by the judgment and the interest is “immediate, pecuniary, and substantial.” (County of Alameda v. Carleson (1971) 5 Cal.3d 730, 737.) Moreover, the doctrine of mootness adds a durational requirement to standing: “ ‘ “ ‘ “The requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness).” ’ [Citations.]” ’ [Citation.]” (Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1574.) Due to the sale of their house, William and Susan Hobbs do not own property subject to Measure M and therefore are no longer affected by the trial court’s ruling on the motion for summary adjudication.7 The only other plaintiffs, Donald and Irma Shirkey, also lack standing as to Measure M because their property is within the Coastal Zone and is not impacted by Measure M. Because no plaintiff has an “immediate, pecuniary, and substantial” interest in the trial court’s order with regard to Measure M, no plaintiff has standing to pursue an appeal with regard to Measure M. We grant the City’s unopposed request for judicial notice of the grant deed 6 documenting the sale of William and Susan Hobbs’s property in Pacific Grove. (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1382). 7 Plaintiffs have asserted no claim for damages, only declaratory and injunctive relief. 7 We retain discretion to decide a moot issue if the case presents an issue of substantial and continuing public interest and is capable of repetition yet evades review. (Citizens Oversight, Inc. v. Vu (2019) 35 Cal.App.5th 612, 615.) Although we assume the issue presented by the electorate’s 2018 approval of Measure M, with its one-time impact on short-term rental licenses, is capable of repetition, we have no reason to conclude that the requirement of an affected property owner’s continued standing would cause a recurrence of the issue to evade review. We therefore limit our review to the Shirkeys’ due process challenge to Ordinance No. 18-005. 2. Appealability The City contends that plaintiffs’ appeal is not proper because it does not arise from a final judgment that disposes of all issues between the parties. We do not construe plaintiffs’ voluntary dismissal of count two as forfeiting their right to appeal. Typically, “an appeal cannot be taken from an order preliminary to judgment, even one that sounds the death knell for a lawsuit or severable portion thereof” (Schmidlin v. City of Palo Alto (2007) 157 Cal.App.4th 728, 763) and “a plaintiff’s voluntary dismissal is deemed to be nonappealable on the theory that dismissal of the action is a ministerial action of the clerk, not a judicial act.” (Stewart v. Colonial Western Agency, Inc. (2001) 87 Cal.App.4th 1006, 1012 (Stewart).) Denial of plaintiffs’ motion for summary adjudication signified only that they had not demonstrated their entitlement to relief without the need for a trial but remained free to litigate their claims at trial. (See Code Civ. Proc., § 437c, subd. (p)(1).) But contrary to the City’s contention, the dismissal here was not a ministerial act of the clerk of court, but a judicial act on plaintiffs’ request over the City’s written opposition.8 “[A]ppellate courts treat a voluntary dismissal with prejudice as an 8 Although the order of dismissal does not make clear that the trial court specifically intended to facilitate plaintiffs’ appellate objective, had the court wished to foreclose appealability on the existing record, prior to the commencement of trial on the 8 appealable order if it was entered after an adverse ruling by the trial court in order to expedite an appeal of the ruling.” (Stewart, supra, 87 Cal.App.4th at p. 1012 [voluntary dismissal to expedite appeal from order imposing discovery sanctions]; Austin v. Valverde (2012) 211 Cal.App.4th 546, 551 [voluntary dismissal of mandamus petition to expedite appeal from order denying request for free administrative hearing transcript]; Goldbaum v. Regents of University of California (2011) 191 Cal.App.4th 703, 708 [dismissal pursuant to settlement is appealable judgment permitting appeal from fee order].) Where, as here, the trial court exercised its discretion to grant plaintiffs’ request to dismiss count 2 with prejudice, a request in which they signaled their intention to expedite an appeal they viewed as sounding purely in law, we see no utility in requiring the trial court to preside over further litigation as a precondition to plaintiffs’ preservation of their claim for appeal. (See Building Industry Assn. v. City of Camarillo (1986) 41 Cal.3d 810, 817.) This is particularly so here, where the trial court in its denial of summary adjudication of count 2 stated that plaintiffs failed to carry their burden of establishing whether they “have a substantive or procedural due process right to renew their time-limited short-term rental licenses.” The legal character of plaintiffs’ interest in renewal of short-term rental licenses—as the City and amici have argued—is the linchpin to plaintiffs’ constitutional claims. That the order of dismissal stopped short of entering judgment as to count 1 similarly does not strike us—on this unique record and procedural history—as fatal to plaintiffs’ appeal. (Cf. Angell v. Superior Court (1999) 73 Cal.App.4th 692, 697 [“one final judgment rule” generally requires deferral of appeal until final judgment in entire action].) Plaintiffs prevailed on their motion for summary adjudication of count 1. Although no judgment as to count 1 has since been entered, it appears that (1) the only merits, it could have declined to enter dismissal, leaving plaintiffs to elect between trial and a purely ministerial dismissal—forfeiting the right to appeal—from the clerk of court. (Code Civ. Proc., § 581, subd. (b)(1).) 9 impediment to the entry of judgment as to count one was the anticipation of trial as to count 2; and (2) the City has since satisfied the requirement—as construed by the trial court—of obtaining Coastal Commission approval. To the extent the trial court’s order of dismissal with prejudice as to count 2 omitted reference to count 1, we construe that omission as inadvertent, given the trial court’s reliance on the plaintiff’s proposed form of order, rather than an intention to reserve adjudication of count 1 for trial of factual issues unrelated to count 2. (See Griset v. Fair Political Practices Commission (2001) 25 Cal.4th 688, 700; Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 920- 921.) Moreover, because the parties agree the City’s appeal as to count 1 is now moot, and because there remains nothing to adjudicate on that count here or in the trial court, it is difficult for us to discern the prejudice to which the City generically alludes. We therefore turn to the merits of the Shirkeys’ appeal relating to the trial court’s denial of summary adjudication of count 2. B. Due Process Plaintiffs, in moving for summary adjudication of count 2, contended that their economic interest in renting their vacation homes exclusively for transient visitors was an entitlement subject to state or federal constitutional protection as a matter of law. To the extent they assert a “vested right” in that particular economic use of their real property, they have established neither right—beyond the expressly defined terms of their license—nor vesting on this record. Nor have they established that the City’s curtailment of short-term rental licenses is so unrelated to legitimate state interests that it can be said to infringe on substantive due process. 1. Legal Principles and Standard of Review Under the Fourteenth Amendment of the United States Constitution, the requirements of procedural due process apply to state action infringing liberty and property interests. (Board of Regents of State Colleges v. Roth (1972) 408 U.S. 564, 569.) The range of interests protected by due process, however, “is not infinite.” (Id. at 10 p. 570.) “ ‘To have a property interest in a benefit, a person clearly must have more than an abstract need or desire’ and ‘more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.’ [Citation.] Such entitlements are, ‘ “of course, . . . not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.” ’ [Citation.]” (Town of Castle Rock v. Gonzales (2005) 545 U.S. 748, 756.) Under article I, section 7 of the California Constitution, “ ‘[t]he “requirement of a statutorily conferred benefit limits the universe of potential due process claims: presumably not every citizen adversely affected by governmental action can assert due process rights; identification of a statutory benefit subject to deprivation is a prerequisite.” ’ ” (Las Lomas Land Co., LLC v. City of Los Angeles (2009) 177 Cal.App.4th 837, 855 (Las Lomas).) Where such a statutory benefit exists, “[t]he procedures that are constitutionally required are those that will, without unduly burdening the government, maximize the accuracy of the resulting decision and respect the dignity of the individual subjected to the decisionmaking process.” (Smith v. Bd. of Medical Quality Assurance (1988) 202 Cal.App.3d 316, 327.) Beyond the procedural rights, if any, implicated by government action, the substantive reasonableness of a governmental decision impacting private rights is not immune from constitutional scrutiny. But “ ‘[a] law regulating or limiting the use of real property for the public welfare does not violate substantive due process as long as it is reasonably related to the accomplishment of a legitimate governmental interest.’ [Citations.]” (Guinnane v. San Francisco City Planning Commission (1989) 209 Cal.App.3d 732, 741.) “ ‘[A]n ordinance restrictive of property use will be upheld, against due process attack, unless its provisions “are clearly arbitrary and unreasonable, having no substantial relation to public health, safety, morals or general welfare.” ’ [Citation.]” (Terminal Plaza Corp. v. City and County of San Francisco (1986) 177 11 Cal.App.3d 892, 908.) “Substantive due process protects against arbitrary government action. [Citation.] A substantive due process violation requires more than ‘ordinary government error,’ and the ‘ “ ‘arbitrary and capricious’ ” ’ standard applicable in other contexts is a lower threshold than that required to establish a substantive due process violation. [Citation.] A substantive due process violation requires some form of outrageous or egregious conduct constituting ‘a true abuse of power.’ [Citation.]” (Las Lomas, supra, 177 Cal.App.4th at pp. 855-856.) We review de novo an order granting or denying summary adjudication: “In practical effect, we assume the role of a trial court and apply the same rules and standards that govern a trial court’s determination of a motion for summary judgment or summary adjudication. [Citations.]” (Romero v. Superior Court (2001) 89 Cal.App.4th 1068, 1077.) Because a ruling on the motion “involves pure questions of law, ‘we are required to reassess the legal significance and effect of the papers presented by the parties in connection with the motion.’ ” (Ibid.) “ ‘[W]e examine the facts presented to the trial court and determine their effect as a matter of law.’ [Citation.] We review the entire record, ‘considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained.’ [Citation.] Evidence presented in opposition . . . is liberally construed, with any doubts about the evidence resolved in favor of the party opposing the motion.” (Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 618.) 2. Procedural Due Process Plaintiffs argue that the City’s adoption and enforcement of Ordinance No. 18-005 violated their procedural due process rights because its selection of one of their licenses by lottery for nonrenewal denied them an opportunity to be heard on what they characterize as the deprivation of a vested right to continued renewal of their one-year licenses. They base their argument on the theory that they enjoyed a vested right amounting to a property interest in the renewal of their licenses, such that nonrenewal 12 was effectively a deprivation of that interest. But plaintiffs fail to establish that they held any right—vested or otherwise—in the renewal of short-term rental licenses expressly limited in term, or that the City “revoked” any license granted; these failures are fatal to their claims. Plaintiffs must establish a right to renewal because, generally, “[a] person seeking a benefit provided by the government has a property interest in the benefit for purposes of procedural due process only if the person has ‘a legitimate claim of entitlement to it.’ ” (Las Lomas, supra, 177 Cal.App.4th at p. 853, fn. omitted.) a. Legislative, Adjudicative, and Ministerial Acts Plaintiffs argue that the very adoption of Ordinance No. 18-005—by implementing a randomized process for selecting licenses that would not be renewed beyond the existing term, rather than affording licensees an opportunity to be heard as to the merits of their particular property usage—offended procedural due process. As a threshold matter, however, “only those governmental decisions which are adjudicative in nature are subject to procedural due process principles. Legislative action is not burdened by such requirements.” (Horn v. County of Ventura (1979) 24 Cal.3d 605, 612 (Horn).) While an adjudicative governmental action often “requires the procedural due process standards of reasonable notice and opportunity to be heard, . . . [l]egislative action generally is not governed by these procedural due process requirements because it is not practical that everyone should have a direct voice in legislative decisions . . . .” (Calvert v. County of Yuba (2006) 145 Cal.App.4th 613, 622 (Calvert).) Plaintiffs contend that the application of the ordinance was necessarily adjudicatory because it applied to the Shirkeys’ individual property. But not every nonlegislative action is adjudicative, and not every administrative decision requires a hearing. We do not infer a hearing right unless there is “ ‘some language’ ” in the operative legislation “from which such a requirement can be implied.” (Traverso v. 13 People ex rel. Dept. of Transportation (1993) 6 Cal.4th 1152, 1164.) Nor may we disregard express language foreclosing such a hearing. (Ibid.) “[C]onstitutional notice and hearing requirements are triggered only by governmental action which results in ‘significant’ or ‘substantial’ deprivations of property, not by agency decisions having only a de minimis effect on land. Nor would action involving only the nondiscretionary application of objective standards entitle a landowner to such protections.” (Horn, supra, 24 Cal.3d at p. 616.) The random selection process under Ordinance No. 18-005 involved no exercise of discretion or judgment. It was therefore purely ministerial. (Calvert, supra, 145 Cal.App.4th at p. 622 [ministerial actions involve nondiscretionary decisions based only on fixed and objective standards].) Like legislative acts, ministerial acts are “not within this constitutional realm[,] . . . because ministerial decisions are essentially automatic based on whether certain fixed standards and objective measurements have been met.” (Id. at pp. 622-623.) To the extent that it is precisely the ministerial, nondiscretionary nature of the lottery that offends plaintiffs, we note that a random lottery removes the potential for illegitimate considerations—such as access to counsel to press one’s claim, or to capital to expand the property—to influence the selection process, and, as the City notes, has long been recognized as a legitimate means of selection even where a substantial right is implicated. (See, e.g., United States v. Steele (9th Cir. 1972) 461 F.2d 1148, 1152 [“[m]ere random selection would suffice” as justification for prosecution of persons refusing to answer census questionnaires]; McDonnell v. Hunter (8th Cir. 1987) 809 F.2d 1302, 1308 [upholding random selection of correctional institution staff for drug testing]; Geinosky v. City of Chicago (7th Cir. 2012) 675 F.3d 743, 749 [“because officers must choose among violators, random selection is certainly rational” as a means of selecting parking violators for enforcement].) Accordingly, even if the reasonableness of the City’s legislatively prescribed ministerial method of selection were properly subject to 14 our review, we would be unable to conclude random selection is, as a matter of law, an unreasonable method of accomplishing that goal. b. “Vested Rights” To circumvent these limitations on their procedural due process claims, plaintiffs assert that the nature of their interest in renewal of their licenses is a “vested right” that compels adjudicatory process. Plaintiffs’ characterization of their interest, however, depends on a misreading of the City’s short-term rental regulatory scheme and a loose patchwork of mismatched authorities. At the outset, we disregard as inapt plaintiffs’ reliance on the doctrine of “fundamental vested rights” borrowed from administrative mandamus.9 In administrative mandamus proceedings under Code of Civil Procedure section 1094.5, “[t]he courts must decide on a case-by-case basis whether an administrative decision or class of decisions substantially affects fundamental vested rights and thus requires independent judgment review,” as opposed to deference to agency findings.10 (Bixby v. Pierno (1971) 4 Cal.3d 130, 144; Interstate Brands v. Unemployment Ins. Appeals Bd. (1980) 26 Cal.3d 770, 778; JKH Enterprises, Inc. v. Department of Industrial Relations (2006) 142 Cal.App.4th 1046, 1056-1057.) “If the decision of an administrative agency will substantially affect a 9 (See, e.g., Goat Hill Tavern v. City of Costa Mesa (1992) 6 Cal.App.4th 1519 [denial of application for renewal of conditional use permit by city council]; Malibu Mountains Recreation, Inc. v. County of Los Angeles (1998) 67 Cal.App.4th 359 [revocation of permit by regional planning commission]; Bauer v. City of San Diego (1999) 75 Cal.App.4th 1281 [denial of conditional use permit after administrative hearing]; Berlinghieri v. Department of Motor Vehicles (1983) 33 Cal.3d 392 (Berlinghieri) [suspension of driver’s license following hearing by DMV]; Clerici v. Department of Motor Vehicles (1990) 224 Cal.App.3d 1016 [denial of salesperson’s license by DMV].) 10 “[J]udicial review by [Code of Civil Procedure] section 1094.5 applies only to adjudicatory administrative action and not to action which is legislative in nature.” (City of Rancho Palos Verdes v. City Council (1976) 59 Cal.App.3d 869, 882.) 15 ‘fundamental vested right,’ then the trial court must not only examine the administrative record for errors of law, but also must exercise its independent judgment upon the evidence.” (Berlinghieri, supra, 33 Cal.3d at p. 395.) These authorities accordingly presuppose the existence of such a right and the administrative adjudication of that right under the operative regulatory scheme; they do not purport to confer or create rights or to impose the adjudicatory process plaintiffs seek. As a legislative act, the passage of Ordinance No. 18-005 set the rules for regulation of short-term rentals; in accordance with those rules, no adjudicatory determination was required, only the ministerial act of conducting the lottery. Consequently, the concept of a fundamental vested right has no application here. In contrast, under the distinct “vested rights” doctrine relating to land use and development, a property owner acquires the irrevocable right to complete construction “notwithstanding an intervening change in the law that would otherwise preclude it.” (Whaler’s Village Club v. California Coastal Commission (1985) 173 Cal.App.3d 240, 252-253 [no “vested right” to construct sea wall for protection of dwelling, absent prior government approval to do so]; McCarthy v. California Tahoe Regional Planning Agency (1982) 129 Cal.App.3d 222, 230 (McCarthy).) “In short, a vested right for review purposes means a preexisting right while a vested right for construction means a right the government is estopped to deny.” (McCarthy, supra, at p. 230.) Plaintiffs suggest that they acquired a right to renewal of their licenses beyond the natural term by virtue of detrimental reliance on the issuance of one-year renewable licenses “by sacrificing thousands of dollars and numerous hours to improve and maintain the properties to offer” as short-term rentals. Detrimental reliance must at a minimum be reasonable to justify estopping the City from enforcement of the licenses’ expressly limited term. (See Schafer v. City of Los Angeles (2015) 237 Cal.App.4th 1250, 1261.) Plaintiffs defend their preferred interpretation of the licensing scheme, asserting “[i]t is undisputed that [they] would have been entitled to the renewal of their 16 licenses upon the expiration of the twelve-month period, because the City itself considered [short-term rental] licenses to be ‘ministerial and issued over the counter,” “and [plaintiffs] never committed misconduct or violations that would have subjected them to revocation or nonrenewal.” Not so. As the City noted in objecting to this assertion by Plaintiffs in their statement of undisputed facts, this assertion is “[m]aterially misleading.” That issuance of licenses was “ministerial” did not entitle plaintiffs to renewal, given the citywide maximum of 250 and the density limits per block the City adopted as early as 2016. Moreover, in viewing the record in the light most favorable to the City, as we must, the evidence before the trial court on summary adjudication did not establish such reliance on the issuance or renewal of short-term rental licenses, as opposed to the generic investment potential of residential real property, whether for long-term rental, for sale or for personal or family enjoyment.11 The Shirkeys purchased and maintained their second home 10 years before the City ended its prohibition on short-term rentals, because they intended it for the use of their children and grandchildren; the Shirkeys rented it on a short-term basis only “in order to cover costs.” Nothing in the plaintiffs’ declarations endeavors to quantify what if any expenses they incurred solely as a consequence of specifically short-term rental expectations, as opposed to the general maintenance of their capital investment. Nothing in the plaintiffs’ evidence establishes that the expenses were incurred after issuance of a license. (See Avco Community Developers, Inc. v. South Coast Regional (1976) 17 Cal.3d 785, 793 (Avco) [landowner’s acts prior to issuance of permit could not have been undertaken in reliance on permit].) To the extent plaintiffs rely on Avco for the proposition that their good-faith reliance on the license confers a vested right in the license, what they overlook are the limitations on that vested right, as 11 To the extent that the scope of plaintiffs’ actual reliance is subject to dispute, plaintiffs by their voluntary dismissal elected to waive their right to litigate that factual issue at trial. 17 provided by the terms of the very license or permit at issue. (Id. at p. 791, italics added [“Once a landowner has secured a vested right the government may not, by virtue of a change in the zoning laws, prohibit construction authorized by the permit upon which he relied.”].) To be sure, the City, once it issued a short-term rental license, did not have authority to revoke that license prior to expiration of the contemplated one-year term absent notice to the licensee and an opportunity for the licensee to be heard. (See, e.g., Ord. No. 10-001; Mun. Code, former § 7.40.180; Ord. No. 16-007; Mun. Code, former § 7.40.180; Ord. No. 17-024; Mun. Code, §§ 7.40.060(g) & 7.40.090.) But to the extent that this limitation on the City’s revocation authority could be said to “vest” plaintiffs’ right to the license, such a right is limited to the express terms and conditions of the license, including the applicable expiration date. (Metropolitan Outdoor Advertising Corp. v. City of Santa Ana (1994) 23 Cal.App.4th 1401; Avco, supra, 17 Cal.3d at p. 791 [developer’s vested right is “to complete construction in accordance with the terms of the permit”].) The process due to a licensee facing revocation of an existing license therefore has no bearing on whether a license expiring on its express terms must thereafter be renewed. 3. Substantive Due Process For substantive due process purposes, plaintiffs have variously asserted as fundamental their “right to allow guests to stay in their home,” and “right to rent their homes to overnight guests.” Countenancing plaintiffs’ claim that Ordinance 18-005 violates their right to substantive due process by infringing on their right to invite guests into their homes would breach the already narrow and now shrinking boundaries of the doctrine. The “ ‘substantive’ ” component of the Due Process Clause protects rights that “are ‘so rooted in the traditions and conscience of our people as to be ranked as fundamental,’ and therefore cannot be deprived without compelling justification.” (Obergefell v. Hodges (2015) 576 U.S. 644, 694-695 (Obergefell); cf. Dobbs v. Jackson 18 Women’s Health Org. (2022) ___U.S.___ [142 S.Ct. 2228, 2247, 213 L.Ed.2d 545, 565] [directing that we “guard against the natural human tendency to confuse what that Amendment protects with our own ardent views about the liberty that Americans should enjoy”].) First, we reject plaintiffs’ effort to frame their issue as one of associational freedom, where the short-term relationships previously negotiated via plaintiffs’ property manager were plainly not of the social type. Ordinance No. 18-005 merely prevents them from operating as a commercial innkeeper in a residential district. Nothing in the record reflects any infringement of plaintiffs’ right to entertain guests, host overnight visitors, or rent the premises for periods of 30 days or more. Plaintiffs cite no authority for the proposition that their economic preference for short-term over long-term rental income is “ ‘implicit in the concept of ordered liberty’ ” such that strict scrutiny is warranted. (See Obergefell, supra, 576 U.S. at 698.) As to the limited infringement on plaintiffs’ economic use of their property, “[l]and use regulation in California historically has been a function of local government under the grant of police power contained in article XI, section 7 of the California Constitution.” (Big Creek Lumber Co. v. County of Santa Cruz (2006) 38 Cal.4th 1139, 1151.) “This inherent local police power includes broad authority to determine, for purposes of the public health, safety, and welfare, the appropriate uses of land within a local jurisdiction’s borders . . . .” (City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc. (2013) 56 Cal.4th 729, 738.) “[C]ourts generally have emphasized the breadth of municipal power to control land use and have sustained the regulation if it is rationally related to legitimate state concerns and does not deprive the owner of economically viable use of his property.” (Schad v. Borough of Mount Ephraim (1981) 452 U.S. 61, 68.) “A law regulating or limiting the use of real property for the public welfare does not violate substantive due process as long as it is reasonably related to the accomplishment of a legitimate governmental interest.” (Terminal Plaza Corp. v. City 19 and County of San Francisco (1986) 177 Cal.App.3d 892, 908.) This is because “in the substantive due process realm, it is not the extent of the burden to be borne by the landowner that is the focus of the inquiry. It is rather the reasonableness of the government regulation or exercise of police power and the rational relationship of the regulation or action to a government purpose.” (Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 266.) Arguing for strict scrutiny rather than rational basis review, plaintiffs assert that their “vested right”—for which we have found neither doctrinal nor evidentiary support—may be infringed only upon a showing of “a compelling public necessity.” For this, they rely on a misapplication of O’Hagen v. Board of Zoning Adjustment (1971) 19 Cal.App.3d 151. Plaintiffs misread O’Hagen as entitling them to renewal of licenses they expressly acknowledged were term-limited, when O’Hagen in fact addressed the revocation on nuisance grounds of an existing, permanent use permit originally issued for the construction years earlier and the continued operation of a Burger King. (Id. at p. 158.) Because the right at issue in O’Hagen was legitimately a vested one, the requirement there of “compelling public necessity” provides no support for importing the same level of scrutiny here. Alternatively, plaintiffs contend that the City’s findings were inadequate to satisfy even rational basis review. But “[a] legislative act is presumed valid, and a city need not make explicit findings to support its action.” (Federation of Hillside & Canyon Assns. v. City of Los Angeles (2004) 126 Cal.App.4th 1180, 1195.) “When considering a statute under the rational basis test, we acknowledge a statute bears a strong presumption of validity. The test is extremely deferential and we do not inquire into the wisdom of governmental action. Nor do we assess the wisdom, fairness, or logic of legislative choices.” (American Coatings Assn., Inc. v. State Air Resources Bd. (2021) 62 Cal.App.5th 1111, 1132.) 20 After it began licensing short-term rentals in residential zones in 2010, the City found that its regulations failed to anticipate the proliferation of “online host sites such as VRBO, Airbnb and others,” “a dramatic increase in license applications,” and “the surge in short-term rental activity.” (Ord. No. 16-007.) Pacific Grove over time imposed limits on short-term rentals “to address negative impacts on the quality and character of the City’s residential neighborhoods and on the availability and affordability of housing” and “protect the public health, safety, and welfare.” (Ord. No. 17-024.) In furtherance of that objective, when the number and density of distributed licenses otherwise resisted reduction, the City enacted Ordinance No. 18-005 to address density in “over-dense blocks.” The City’s stated interest echoes what an earlier panel of this court upheld in Ewing v. City of Carmel-By-The-Sea (1991) 234 Cal.App.3d 1579. As with the zoning ordinance there at issue, Ordinance No. 18-005 left the plaintiffs with several economically viable uses of their property—live in the homes, allow guests to use the homes without remuneration, rent the homes for periods of at least 30 days, or sell their homes. (See id. at p. 1592.) The “intrusion into plaintiffs’ bundle of ownership rights … is minimal and far outweighed by the public interest in enhancing and maintaining permanent residential areas.” (Ibid.) “It stands to reason that the ‘residential character’ of a neighborhood is threatened when a significant number of homes . . . are occupied not by permanent residents but by a stream of tenants staying a weekend, a week, or even 29 days.” (Id. at p. 1591.) “Limiting transient commercial use of residential property for remuneration” addresses the goal of enhancing and maintaining the residential character of a neighborhood. (Id. at p. 1596.) Because the ordinance is rationally related to the 21 City’s goal of enhancing and maintaining its residential character, it was not so clearly arbitrary and unreasonable as to offend substantive due process.12 (Id. at pp. 1592, 1596.) III. DISPOSITION The order of dismissal as to count 2 is affirmed. The City’s cross-appeal is dismissed as moot, and the trial court is directed to dismiss count 1. Costs on appeal are awarded to the City. 12 Given the nature of the substantive due process inquiry, plaintiffs’ record of performance as licensees is immaterial to the legitimacy of the government purpose in reducing the total number and density of licenses. 22 LIE, J. WE CONCUR: DANNER, ACTING P.J. WILSON, J. Hobbs et al. v. City of Pacific Grove et al. H047705 Filed 11/14/22 CERTIFIED FOR PARTAL PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT WILLIAM HOBBS et al., H047705 (Monterey County Plaintiffs and Appellants, Super. Ct. No. 18CV002411) v. ORDER MODIFYING OPINION AND CERTIFYING OPINION FOR CITY OF PACIFIC GROVE et al., PARTIAL PUBLICATION [NO CHANGE IN JUDGMENT] Defendants and Respondents. THE COURT: It is ordered that the opinion filed herein on October 14, 2022, be modified as follows: 1. On page 15, line 9, the word “doctrine” is changed to “treatment” and on line 10 the words “borrowed from” are changed to “in” so the sentence reads: At the outset, we disregard as inapt plaintiffs’ reliance on the treatment of “fundamental vested rights” in administrative mandamus. 2. On page 16, line 3, after the citation “(Berlinghieri, supra, 33 cal.3d at p. 395.)” delete the sentence beginning with “These authorities” and ending with “plaintiffs seek” and insert the following sentence: In determining the scope of judicial review of such adjudicatory agency decisions, these authorities do not purport to confer or create rights to the adjudicatory process plaintiffs seek. 3. On page 16, line 9 the sentence beginning with “Consequently” and ending in “application here” is deleted. There is no change in the judgment. The opinion in the above-entitled matter filed on October 14, 2022, was not certified for publication in the Official Reports. For good cause it now appears that the opinion should be partially published in the Official Reports. Under California Rules of Court, rules 8.1105(c) and 8.1110, the opinion is ordered published in part. The portions of the opinion certified for publication are the first introductory paragraph on page 1, and sections I, II(B), and III. Section II(A) is not certified for publication. It is so ordered. ___________________________ LIE, J. ________________________________ DANNER, ACTING P.J. ________________________________ WILSON, J. Hobbs et al. v. City of Pacific Grove et al. H047705 Trial Court: Monterey County Superior Court Superior Court No.: 18CV002411 Trial Judge: The Honorable Lydia M. Villareal Attorneys for Plaintiffs and Appellants Scharf-Norton Center for Constitutional William Hobbs et al.: Litigation at the Goldwater Institute Timothy Sandefur Christina Sandefur Attorneys for Defendants and Respondents De Lay & Laredo City of Pacific Grove et al.: David C. Laredo Colantuono, Highsmith & Whatley, PC David J. Ruderman Attorneys for Amicus Curiae for Shute, Mihaly & Weinberger LLP Pacific Grove Neighbors United: Robert “Perl” Perlmutter Andrew P. Miller Attorneys for Amicus Curiae for Best Best & Krieger LLP League of California Cities Trevor L. Rusin Emily S. Chaidez Hobbs et al. v. City of Pacific Grove et al. H047705	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483704/	NOTICE 2022 IL App (5th) 190377 Decision filed 11/14/22. The text of this decision may be NO. 5-19-0377 changed or corrected prior to the filing of a Petition for Rehearing or the disposition of IN THE the same. APPELLATE COURT OF ILLINOIS FIFTH DISTRICT ______________________________________________________________________________ THE PEOPLE OF THE STATE OF ILLINOIS, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) St. Clair County. ) v. ) No. 18-CF-1120 ) CORTEZ WILSON, ) Honorable ) John J. O’Gara, Defendant-Appellant. ) Judge, presiding. ______________________________________________________________________________ JUSTICE WHARTON delivered the judgment of the court, with opinion. Justices Cates and Vaughan concurred in the judgment and opinion. OPINION ¶1 The defendant, Cortez Wilson, appeals his convictions for aggravated battery (720 ILCS 5/12-3.05(a)(4), (c) (West 2016)). He argues that he was prejudiced by the substitution of a juror after deliberations had begun where the original jurors had already voted and signed verdict forms before the substitution, where there was a significant disparity in the length of deliberations before and after the substitution, and where the alternate juror was not questioned before rejoining the jury nearly five hours away from the court. We reverse the defendant’s convictions and remand for a new trial. ¶2 I. BACKGROUND ¶3 The events at issue occurred on July 19, 2018, at the Community Interfaith Food Pantry, a nonprofit organization that provides food for people in need in Belleville and nearby communities. 1 An altercation took place during which the defendant struck two other individuals in the face—the organization’s 62-year-old executive director, Michael Foppe, and Roscoe McCoy, a volunteer. As a result, McCoy suffered minor injuries, and Foppe permanently lost vision in his left eye. ¶4 The State filed an information charging the defendant with four counts of aggravated battery. Count I and count II alleged that the defendant struck Foppe in the face, thereby causing great bodily harm (count I) and permanent disability (count II) to an individual who was 60 years of age or older. See 720 ILCS 5/12-3.05(a)(4) (West 2016). Count III alleged that the defendant struck Foppe in the face in a place of public accommodation. Id. § 12-3.05(c). Count IV alleged that the defendant struck McCoy in the face on a public way. Id. The charges in counts I and II are Class 2 felonies. Id. § 12-3.05(h). The charges in counts III and IV are Class 3 felonies. Id. ¶5 In March 2019, the defendant provided notice of his intent to raise the affirmative defense of self-defense. The State then sought to admit evidence of three prior criminal convictions for purposes of impeaching the defendant’s testimony at trial. The court granted the State’s request with respect to only one of the defendant’s prior convictions—a 2012 conviction for domestic battery. ¶6 The matter came for trial in November 2019. Foppe testified about events leading up to the incident at issue. He stated that the first time he recalled seeing the defendant at the food pantry was July 17, 2018, two days before the incident. On that day, the defendant received one week’s worth of food. The following afternoon, July 18, at around 3 p.m., when the pantry was about to close, the defendant returned, requesting more food. Foppe told the defendant that he would have to return in 30 days and asked him to leave the premises. At trial, Foppe explained that the clients could receive 7 days’ worth of food once every 30 days. He testified that the defendant refused to 2 leave when asked. Foppe stated that he had to escort the defendant to the door “[a]t least four or five times.” The defendant eventually left, but he lingered outside the building. ¶7 The following day, July 19, 2018, was a Thursday. Foppe testified that the food pantry is closed to the public on Thursdays. At approximately 10 in the morning, however, Foppe saw the defendant at the delivery door to the warehouse. Foppe testified that he went to the alarm system and hit the “panic button.” He explained that this caused the building’s alarm to sound and also alerted the security company, which in turn called the police. Foppe stated that after pushing the panic button, he went back to the warehouse and informed the defendant that he had called the police. He also told the defendant to leave the premises. In addition, Foppe instructed the volunteers working in the warehouse not to give the defendant the items he had requested. He explained that it was policy not to give out items when the food pantry was closed to the public. ¶8 Foppe next described the defendant’s reaction to being asked to leave. According to Foppe, the defendant said, “You punk-a* b,” and then hit Foppe in the chest. This occurred inside the delivery area of the warehouse. Foppe stated that he did not place his hands on the defendant at any point. ¶9 Foppe testified that after the confrontation inside the warehouse, he and another volunteer escorted the defendant out to the parking lot. There, the defendant struck Foppe in his left eye with his right hand. Foppe stated, that “it felt like a cue ball” had struck him. He acknowledged, however, that he did not see any object in the defendant’s hand. As a result of the incident, Foppe lost sight in his left eye. ¶ 10 Food pantry volunteer McCoy also testified about the events of July 19, 2018. He explained that even though the food pantry was closed to the public that morning, the delivery door was open to allow deliveries to be brought in and to provide ventilation in the warehouse on a hot day. An 3 individual McCoy identified as the defendant came into the warehouse and requested hand sanitizer and a bottle of water. McCoy testified that Foppe pushed the panic button, causing the alarm to sound, and then told the defendant that he needed to leave the premises and that the police would arrive in 30 seconds. According to McCoy, the defendant became belligerent. He cursed at Foppe and remained inside the warehouse. ¶ 11 McCoy testified that Foppe escorted the defendant to the parking lot. He further testified that the defendant shoved Foppe, and the two men then “grabbed each other.” McCoy later clarified that the shoving began inside the warehouse and continued outside in the parking lot. McCoy saw the defendant’s arm come forward, after which Foppe screamed and retreated. Foppe then asked someone to call 9-1-1, saying that he needed an ambulance. McCoy thought that the defendant threw something at Foppe. He explained that he “heard like a skipping of maybe a rock on the asphalt.” He testified, however, that he did not see the defendant pick up a rock or other object. ¶ 12 McCoy testified that Foppe and the other volunteers went inside, while he remained outside to see where the defendant went. He explained that he wanted to be able to tell the police where the defendant was when they arrived. McCoy further testified that the defendant initially began walking away from the scene. However, he turned around, approached McCoy, and asked, “Why are you following me?” McCoy stated that he told the defendant he was not following him and that he just wanted to be sure he left the premises. At this point, the defendant accused McCoy of trying to trip him. McCoy turned away, at which point the defendant struck him on the right side of his jaw. McCoy testified that he was on the sidewalk when the defendant struck him. Although McCoy had a sore jaw and some scratches on his neck, he did not suffer severe or permanent injuries. 4 ¶ 13 Shelter volunteer James Donovan was inside the building stocking canned goods in a room located next to the warehouse when the incident at issue began. At trial, he testified that he heard the alarm go off, and he walked to the warehouse. Finding no one there, he continued through the delivery doors to the parking lot. There, he saw Foppe, McCoy, and a third volunteer walking an individual toward the public sidewalk. Donovan identified the individual as the defendant. He testified that Foppe pulled back, turned around, and “cried out in pain” while grabbing his face. Donovan testified that he did not hear anything that sounded like a rock hitting the ground and did not see any object flying in his direction. He further testified that he did not see the incident between the defendant and McCoy, although he testified that he remained outside the warehouse attempting to keep the defendant within his line of sight until the police arrived. ¶ 14 Michael Orbst, the owner of an automotive shop across the street from the food pantry, testified that, on the morning of July 19, 2018, he heard a commotion at the food pantry. When he looked to see what was happening, he saw Foppe and McCoy, both of whom he recognized, with an individual he identified as the defendant. Although he did not see the defendant strike Foppe, he did see the defendant move his arm in a manner that looked like he was either punching Foppe or throwing something at him. Orbst testified that Foppe then screamed loudly and held his head. Orbst further testified that he saw the defendant punch McCoy. However, he did not provide any details. ¶ 15 Much of the defendant’s testimony was similar to the accounts given by the State’s witnesses, although it differed in key respects. He testified that he passed the food pantry while he was walking to his aunt’s house. He thought it was open because he could see that the garage doors to the warehouse were open and that people were working inside. The defendant testified that he 5 continued on to his aunt’s house, where he intended to pick up some of the food he had received from the food pantry and to ask his aunt for a drink of water. However, his aunt was not home. ¶ 16 The defendant testified that he returned to the food pantry and asked two volunteers for water and hand sanitizer. He stated that the volunteers said they would get these items for him and told him to wait outside. However, Foppe stopped the two volunteers from getting the items for the defendant. According to the defendant, Foppe then “got in [his] face” and pushed him. The defendant testified that Foppe told him to leave. He acknowledged that Foppe also told him that he had been asked to leave multiple times but that he kept coming back. According to the defendant, he asked Foppe if he had done anything to anyone at the food pantry, but Foppe did not answer. ¶ 17 The defendant testified that Foppe told him he was going to activate the alarm and call the police. Although the defendant initially testified that he told Foppe to “go ahead” because he wanted to tell the police what had happened, he testified that he walked away. According to the defendant, as he walked away, he could see two volunteers attempting to restrain Foppe. However, Foppe got away from them and ran toward him. The defendant acknowledged that at this point, he struck Foppe with his fist. He stated that he did so because he was afraid Foppe was going to hurt him. He explained that Foppe was larger than him and that he had already shoved the defendant while they were next to the warehouse. ¶ 18 The defendant next testified that one of the pantry volunteers tried to grab him, but he kept walking. He admitted that he picked up some rocks from a flower bed, approached McCoy, and “got in his face.” He further admitted that he told McCoy that “maybe” he should hit McCoy, but he denied actually striking him. When asked what happened to the rocks he picked up, the defendant said that he threw them on the ground. 6 ¶ 19 On cross-examination, the defendant admitted that he told police he was “jumped” by Foppe, McCoy, and one other person. Although he acknowledged that he was not “jumped,” he stated Foppe shoved him and that all three tried to “put their hands on” him. ¶ 20 After trial, the jury went to the jury room to begin its deliberations at 10:48 a.m. The court asked William Raby, the alternate juror, to remain in the courtroom for additional instructions. The court informed Raby that he would receive a phone call once the jury reached a verdict. The court instructed him not to discuss “any subject connected with this case” with anyone until that time. The court further instructed Raby not to read or listen to any news accounts involving the case, not to conduct any independent research or investigation, and not to form an opinion regarding the defendant’s guilt or innocence “until or unless” Raby was “actually asked to come back here and deliberate with the other jurors.” Raby was then permitted to leave. ¶ 21 At 11:36 a.m., the court received the following note from the jurors: “By ‘knowingly caused permanent disability’ to Michael Foppe, does that mean (1) knowingly hit him, which caused the permanent disability, or (2) knowingly caused the permanent disability?” Counsel for both parties agreed that the jury should be told to continue reviewing the instructions it had been given, which were sufficient to decide the issues before them. ¶ 22 At 1:20 p.m., the court received another note from the jury, asking, “Can you please simply define the word ‘knowingly’?” The parties again agreed that the court should tell the jurors to review the instructions they had been given. ¶ 23 At 1:30 p.m., the court received a note from the jury asking if the word “knowingly” was “equal to” the word “intent.” The court noted that although jurors had been given an instruction defining “knowingly,” they had not been given a definition of the word “intent.” The judge asked counsel whether he should provide jurors with a definition of “intent.” Both parties agreed that 7 providing the definition would not be proper, although the State argued that it would be proper to tell jurors that “knowing” and “intent” do not mean the same thing. The court again told the jurors that they had been given all the instructions they needed. ¶ 24 At 2:14 p.m., the court reconvened outside the presence of the jury. The judge stated, “I’ve been instructed that, apparently, the jurors were—usually they don’t bring phones with them into the deliberation room. But they all have phones.” The judge also noted that one of the jurors had sent him a note asking to be excused early to pick his son up from daycare. ¶ 25 Bailiff Wendell Vaughn was called to testify under oath at the court’s request. He stated that 10 of the 12 jurors had cell phones. Juror Connie Stanley admitted to Vaughn that she used her phone to look up a word related to the case. Vaughn testified that another juror used his phone to try to make arrangements to pick up his child from daycare, and a third juror used his phone to play solitaire during deliberations. Vaughn did not know whether Stanley communicated anything to the other jurors concerning the word she looked up. ¶ 26 The parties and the court agreed that the jurors should be questioned individually. Defense counsel indicated that he would move for a mistrial if any of them said that Stanley had shared information with them. At 2:29 p.m., after the jury had been deliberating for 3 hours and 41 minutes, the bailiff returned to the jury room to tell the jurors to stop deliberating. The jurors were then questioned in open court one by one. ¶ 27 Juror Terris Gully was asked if he knew anything about another juror using her phone to look up a word. He replied, “I really stopped paying attention.” He noted that he was “kind of getting mad.” We note that Gully is the juror who used his phone to attempt to make arrangements for someone to pick up his child at daycare. Gully further stated that the other jurors “all had their phones out.” 8 ¶ 28 Juror Shaquita Hicks stated that another juror looked up the word “knowingly” but did not show the other jurors what she found. The court asked Hicks, “Did they actually quote from what they found out on their phone?” Hicks replied, “Yes, ‘knowingly’ and ‘intent’ and also ‘possibility.’ That’s what they said they kind of saw.” The court asked, “She must have looked up three words?” Hicks responded, “No, she looked up ‘knowingly’ and * like what other words could be used for ‘knowingly.’ ” Defense counsel inquired, “When you said that she—referring to looking at the words, did she provide a definition, her own definition then of ‘knowingly?’ ” In response, Hicks indicated that the juror was still confused and did not provide a definition. We note that Hicks was not asked to clarify her statements further. However, Stanley herself was later questioned and indicated that the bailiff took her phone from her before she could find an answer. ¶ 29 The court questioned the remaining jurors other than Stanley. Each indicated that Stanley looked up the word “knowingly.” Each stated that they did not hear her discuss what, if anything, she found with the other jurors. One juror noted that the bailiff took Stanley’s phone from her very quickly, and she did not know if Stanley was able to find a definition. Each juror indicated that the jury did not discuss anything related to Stanley’s search. ¶ 30 After all the jurors except Stanley had been questioned, the State argued that the appropriate remedy would be to dismiss Stanley for cause, substitute the alternate juror, and instruct the jurors to begin their deliberations anew. Defense counsel stated, “I’m inclined to agree with the State. I believe I’m satisfied with the polling of the jurors and that there was no tainting of the jurors done by any outside information.” ¶ 31 The court reminded Stanley that she had received an explicit instruction not to conduct her own research and informed her that she might be held in contempt of court for defying this instruction. Stanley admitted that she tried to look up a word related to the case. However, as 9 mentioned earlier, she stated that the bailiff took her phone before she was able to look at a definition. ¶ 32 After Stanley left, the remaining 11 jurors were brought back into the courtroom. The judge instructed them to suspend their deliberations until the alternate juror arrived. The court then stated, “When he gets here, you’re required to begin your deliberations from the beginning *. * You are being ordered at this point to begin your deliberations as if you had just gone back there.” The court told the jurors that they would be able to take a break for a meal, which would be provided to them. ¶ 33 The court began to dismiss the jurors for their meal, but one juror asked, “What do we do with the old verdict forms? Some of them are signed.” The court informed the jurors that the used verdict forms would be destroyed and that the jury would be supplied with clean verdict forms. The court then dismissed the jurors and recessed. ¶ 34 The record indicates that at 3:44 p.m., all jurors, including the alternate, went to the jury room to begin their deliberations. There is no indication that the court questioned Raby about any exposure to outside information during the five hours he was away from the courtroom and no indication that defense counsel had an opportunity to question him. At 4:10 p.m., the court reconvened because the jury had reached a verdict. The jury foreman announced a verdict of guilty on all four charges, and the jurors were polled. The court dismissed the jurors and indicated that the verdict forms signed by the original jury would be kept under seal rather than being destroyed. ¶ 35 The defendant filed a motion for a new trial, which the court denied. The court subsequently sentenced the defendant to consecutive sentences of 7 years in prison on count I and 30 months of probation on count IV. The court found that count II and count III merged with count I and did not enter sentences on those charges. This appeal followed. 10 ¶ 36 II. ANALYSIS ¶ 37 The defendant argues that he was prejudiced by the substitution of a juror under the facts of this case, thereby depriving him of his right to be tried by a fair and impartial jury. He acknowledges that the issue was not preserved for appellate review because counsel agreed to the substitution and did not raise the issue in his posttrial motion. See People v. Enoch, 122 Ill. 2d 176, 186 (1988). However, he urges us to consider his claim under the plain error rule. That rule allows us to review forfeited claims (1) when the evidence is so closely balanced that the error threatened to tip the scales against the defendant or (2) when the error is so egregious that it undermined the fairness of the trial and the integrity of the judicial system. People v. Herron, 215 Ill. 2d 167, 186- 87 (2005). The defendant argues that review of his claim is proper under either prong of the plain error rule. Alternatively, he argues that counsel’s failure to request a mistrial constituted ineffective assistance of counsel. ¶ 38 The State argues that even plain error review is foreclosed by the invited error doctrine. Under that doctrine, a party that affirmatively acquiesces to a procedure followed by the trial court cannot later challenge that procedure on appeal. People v. Cox, 2017 IL App (1st) 151536, ¶ 73. The State contends that counsel’s statement expressly agreeing to the replacement of Stanley with Raby invited the procedure the defendant now challenges. The State correctly points out that invited error “goes beyond mere” forfeiture and acts as a form of estoppel precluding appellate review of even plain errors. See People v. Harvey, 211 Ill. 2d 368, 385 (2004). ¶ 39 In response, the defendant argues that (1) counsel’s acquiescence to the substitution of a juror should not be considered invited error because it was the State that continually argued in 11 favor of substitution;1 (2) while the invited error doctrine precludes first-prong plain error review, it should not preclude review under the second prong of the plain error rule; and (3) even if counsel is deemed to have invited the error by agreeing to the substitution initially, he cannot be deemed to have agreed to everything that came after his statement. In addition, the defendant correctly notes that review of claims of ineffective assistance of counsel is not precluded by the invited error doctrine. See People v. Villarreal, 198 Ill. 2d 209, 228 (2001) (considering a defendant’s claim of ineffective assistance of counsel after finding the invited error doctrine to be applicable). ¶ 40 We need not consider all of the defendant’s arguments concerning the applicability of the invited error doctrine. We agree with his contention that defense counsel cannot be deemed to have invited any error that occurred after he agreed to the substitution. As we will explain, many of the factors pertinent to our decision occurred or came to light after defense counsel initially agreed to the substitution of alternate juror Raby. As such, we need not consider the remaining arguments about the applicability of the invited error doctrine or the defendant’s claim of ineffective assistance of counsel. We need only consider whether plain error occurred. ¶ 41 The first step in plain error analysis under either prong of the plain error rule is to determine whether an error occurred at all. See Cox, 2017 IL App (1st) 151536, ¶ 52. Without error, there can be no plain error. Id. ¶ 87. With this in mind, we turn our attention to the merits of the defendant’s contentions. 1 We note that courts have drawn a distinction between “active participation in the direction of the proceedings” and a mere failure to bring the issue to the trial court’s attention. Harvey, 211 Ill. 2d at 385. However, the applicability of the invited error doctrine does not depend upon whether a party requests an action rather than expressly acquiescing to it. See, e.g., id. at 381, 398 (finding the invited error doctrine applicable where defense counsel in one case expressly agreed to—but did not request—the trial court’s decision to allow “mere fact” impeachment of the defendant); Cox, 2017 IL App (1st) 151536, ¶¶ 74-76 (finding the invited error doctrine applicable where defense counsel repeatedly stated that he had “no objection” to the admissibility of evidence). 12 ¶ 42 The seminal case addressing the issue before us is People v. Roberts, 214 Ill. 2d 106 (2005). There, the Illinois Supreme Court held that the decision to substitute an alternate juror after deliberations begin is a matter within the discretion of the trial court. Id. at 121. The court recognized, however, that substitution once jury deliberations have begun “involves substantial potential for prejudice.” Id. at 123-24. Therefore, a trial court must “take significant precautions to avoid prejudice before allowing substitution.” Id. at 124. ¶ 43 In considering whether the trial court abused its discretion in allowing the substitution of a juror after deliberations began, the primary question before this court is whether the defendant was prejudiced as a result. See id. at 121 (explaining that the potential for prejudice must be our “primary consideration”). Relevant factors include (1) whether the alternate juror and any of the remaining original jurors were exposed to prejudicial outside information or influences, (2) whether the original jurors formed opinions regarding the case before the substitution, (3) whether the court instructed the reconstituted jury to begin its deliberations anew, (4) any indications that the jurors failed to follow instructions, and (5) the length of time jurors deliberated before and after the substitution. Id. at 124. We consider the totality of the circumstances. Id. ¶ 44 In this case, the 11 remaining jurors were questioned on their exposure to the outside information Stanley attempted to find. Most said unequivocally that they did not hear what, if any, information Stanley found online. As the defendant points out, Shaquita Hicks’s statements on the matter were somewhat vague and could be interpreted to mean that Stanley stated aloud that she had learned that the words “intent” and “possibility” could be used interchangeably with the word “knowingly.” However, because Stanley stated that the bailiff took her phone before she was able to obtain any information, we believe the record establishes that the remaining jurors were not exposed to outside information related to the case. 13 ¶ 45 We cannot reach the same conclusion with respect to the alternate juror, Raby, however. Raby left the court at 10:48 a.m. and returned to join the remaining jurors at 3:44 p.m. Thus, he was away from the court for a period of just under five hours. Upon his return, the court did not question him concerning any exposure to outside information or influences during this extended period, and there is no indication that defense counsel had an opportunity to do so. ¶ 46 We recognize that the court properly instructed Raby not to discuss the case or read any information about it until he received a phone call informing him that the jury had reached a verdict. Ordinarily, we presume that jurors follow the instructions they have been given. See People v. Birge, 2021 IL 125644, ¶ 40. However, there exists a real possibility for unintentional exposure to outside information or influence when an alternate juror is away from the controlled environment of the courthouse for an extended period. Due to the substantial potential for prejudice inherently involved in substitutions of jurors during deliberations, our supreme court has held that trial courts must “take significant precautions to avoid prejudice.” (Emphasis added.) Roberts, 214 Ill. 2d at 123-24. Questioning an alternate juror upon his or her return to court is an important step for the trial court to take and an important consideration for this court. See, e.g., id. at 125 (considering the court’s failure to question the alternate juror upon her return, among other considerations, in finding the substitution was prejudicial to the defendant); People v. Carrilalez, 2012 IL App (1st) 102687, ¶ 43 (finding the substitution did not prejudice the defendant where the alternate juror confirmed to the court that she had not discussed the case, formed an opinion, or been exposed to outside information before joining the remaining original jurors); People v. Hayes, 319 Ill. App. 3d 810, 818 (2001) (finding no prejudice where the alternate juror confirmed to the court that he did not discuss the case or form an opinion and where counsel had an opportunity to question him further). Here, the court failed to do so. 14 ¶ 47 Turning to the second Roberts factor, the record reveals that the original jurors reached conclusions and signed verdict forms with respect to three of the four charges before they were told to stop deliberations. See Roberts, 214 Ill. 2d at 124. The Roberts court found it significant that the original jurors had “formed and declared” their opinions when they voted twice before the substitution. See id. at 125. Turning to the third factor, although there is no indication the court instructed the reconstituted jury to begin deliberations anew, the court did provide this instruction to the 11 remaining original jurors before they were dismissed for lunch, and the court also told Raby that the jury was to begin its deliberations anew if he were asked to return. See id. at 124. ¶ 48 We next consider the fourth Roberts factor, whether there are any indications that jurors failed to follow the court’s instructions. See id. While there was no indication that any of the jurors other than Stanley directly refused to follow specific instructions, there are indications that multiple jurors had allowed themselves to be distracted from the “faithful performance of their duties” as jurors. See Illinois Pattern Jury Instructions, Criminal, No. 1.01 (4th ed. 2000). One juror admitted that he had stopped paying attention to the discussions, and another juror was playing video games on his phone. In Roberts, our supreme court found that the failure of jurors to report violations of instructions “may be indicative of a lack of appreciation for their responsibility as jurors.” Roberts, 214 Ill. 2d at 125 (citing People v. Jones, 105 Ill. 2d 342, 352 (1985)). We believe similar reasoning applies here. While the use of cell phones during deliberations, standing alone, may not have been sufficient to require reversal, this conduct at least gives an indication that some of the jurors may not have fully appreciated their duty to begin deliberations anew. ¶ 49 Finally, we consider the amount of time jurors spent deliberating both before and after the substitution. As discussed previously, the original jury deliberated for 3 hours and 41 minutes 15 before the substitution while the reconstituted jury deliberated for at most 26 minutes before reaching verdicts. Substantial disparities between the time spent deliberating before and after the substitution can be a strong indication that the original jurors, having already formed opinions, did not, in fact, begin their deliberations anew when joined by Raby. See, e.g., United States v. Lamb, 529 F.2d 1153, 1156 (9th Cir. 1975). ¶ 50 The State contends, however, that the disparity in the length of deliberations before and after the substitution is merely one factor and is not dispositive. See Roberts, 214 Ill. 2d at 124 (explaining that we must consider the totality of the circumstances); Carrilalez, 2012 IL App (1st) 102687, ¶ 49 (rejecting a defendant’s claim that shorter deliberations after the substitution established that the reconstituted jury failed to follow the court’s instruction to begin deliberating anew under the facts of that case). The State also points out that the jury sent its first note to the court asking for clarification concerning the definition of the word “knowingly” after deliberating for 48 minutes. The State posits that this indicates that the original jury likely took only 48 minutes to reach its verdicts on three of the four charges. ¶ 51 We agree with the State that the disparity in the length of deliberations before and after the substitution is not dispositive standing alone. However, we reject the State’s overall argument concerning this factor for two reasons. First, we have no basis to make the assumption the State asks us to make. We do not know—and cannot know—in what order the original jurors discussed the four charges. ¶ 52 Second, and more fundamentally, as we explained earlier, our determination depends on the totality of the circumstances. Here, one of the jurors stated on the record that he was getting angry and had stopped paying attention to the deliberations. Significantly, as we have already discussed at length, the original jurors had already signed verdict forms declaring their opinions 16 with respect to three of the four charges. When considered in light of these facts, the disparity in the length of deliberations before and after the substitution raises serious questions as to whether the original jurors were truly willing and able to begin their deliberations anew or whether Raby felt pressure to agree to a conclusion the others had already reached. Considering the five Roberts factors and the totality of the circumstances, we believe the defendant was prejudiced by the substitution and the court, therefore, abused its discretion. ¶ 53 We note that the key factors underlying our conclusion are the court’s failure to question Raby before allowing him to rejoin the jury and the coercive environment suggested by the fact that the jurors had already signed verdict forms coupled with the disparity in the length of deliberations before and after the substitution. As we stated earlier, these factors all either occurred or came to light after defense counsel agreed to the substitution. For this reason, we find the invited error doctrine inapplicable. ¶ 54 As the defendant acknowledges, however, the error was not properly preserved for review. Defense counsel did not move for a mistrial or ask the court to revisit the decision to substitute Raby for Stanley when it was revealed that the original jury had signed three verdict forms, and he did not raise the issue in the defendant’s posttrial motion. Therefore, we must now consider whether review is proper under either prong of the plain error doctrine. ¶ 55 As we noted earlier, plain error review is appropriate under two circumstances: (1) where the evidence is so closely balanced that the error alone threatened to tip the scales against the defendant, or (2) where the error is so fundamental that it undermined the fairness of the defendant’s trial and the integrity of the judicial process. See Herron, 215 Ill. 2d at 186-87. Although we do not agree with the defendant that the evidence was closely balanced, we find that review is proper under the second prong of the plain error doctrine. 17 ¶ 56 As the defendant points out, our supreme court has repeatedly held that an error resulting in a biased jury would constitute the type of “structural error” that is subject to review under the second prong of the plain error rule. See People v. Sebby, 2017 IL 119445, ¶ 52; People v. Thompson, 238 Ill. 2d 598, 610-11 (2010). In addition, errors that impede a jury’s ability to deliberate freely and appropriately are subject to second-prong plain error review. See People v. Cavitt, 2021 IL App (2d) 170149-B, ¶ 60, appeal denied, No. 127264 (Ill. Sept. 29, 2021). Here, the substitution of a juror after the original jurors had formed and declared their opinions created a strong likelihood that the alternative juror would enter a coercive environment, and the court failed to take precautions to ensure that the alternate juror had not been exposed to any improper outside information during his five hours away from the court. Under these circumstances, we conclude that second-prong plain error occurred. As such, we must reverse the defendant’s conviction and remand for a new trial. ¶ 57 Finally, we note that the defendant raises additional issues. He argues that the court erred in admitting evidence of his prior conviction for aggravated battery for purposes of impeachment, and he argues that the court abused its discretion in failing to discharge other jurors for cause along with Stanley. Because we reverse and remand for a new trial, we need not address these claims. ¶ 58 III. CONCLUSION ¶ 59 For the foregoing reasons, we reverse the defendant’s conviction and remand for a new trial. ¶ 60 Reversed and remanded. 18 People v. Wilson, 2022 IL App (5th) 190377 Decision Under Review: Appeal from the Circuit Court of St. Clair County, No. 18-CF- 1120; the Hon. John J. O’Gara, Judge, presiding. Attorneys James E. Chadd, Ellen J. Curry, and Kyle P. Smith, of State for Appellate Defender’s Office, of Mt. Vernon, for appellant. Appellant: Attorneys James A. Gomric, State’s Attorney, of Belleville (Patrick Delfino, for Patrick D. Daly, and Sharon Shanahan, of State’s Attorneys Appellee: Appellate Prosecutor’s Office, of counsel), for the People. 19	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483706/	2022 IL App (1st) 200744 No. 1-20-0744 Opinion filed November 14, 2022 First Division ___________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ___________________________________________________________________________ ) THE PEOPLE OF THE STATE OF ILLINOIS, ) Appeal from the Circuit Court ) of Cook County. Plaintiff-Appellee, ) ) No. 19 CR 07016 v. ) ) The Honorable DEON HILLIARD, ) Brian Flaherty, ) Judge, presiding. Defendant-Appellant. ) JUSTICE HYMAN delivered the judgment of the court, with opinion. Justice Walker concurred in the judgment and opinion. Justice Coghlan dissented, with opinion. OPINION ¶1 At his arraignment, Deon Hilliard asked to proceed “in proper persona” three times. The third time he included in his request a repudiation of his then-counsel’s agreement to a continuance. On the next court date, the trial court admonished Hilliard about representing himself and allowed him to discharge counsel. During the following months, Hilliard persisted in his demand for a speedy trial, and the parties agreed the State occasioned 93 days of delay. Now Hilliard argues that the total days should include the 29 days between his arraignment and the day the trial court allowed his counsel to withdraw. We agree. Considering the totality of the record, including No. 1-20-0744 Hilliard’s words and conduct, we find his request to represent himself was “clear and unequivocal” the first day he made it. Therefore, his counsel’s agreement to a continuance cannot be attributed to him, and the State brought him to trial outside the 120-window provided in section 103-5(a) of the Code of Criminal Procedure of 1963 (commonly known as the Speedy Trial Act) (725 ILCS 5/103-5(a) (West 2018)). Hilliard acknowledges he forfeited this claim, but the State makes no argument that an error we might find is not plain error. We reverse. ¶2 Background ¶3 Hilliard and his then-girlfriend, Paris Williams, lived in an abandoned house in Harvey, Illinois. In 2019, the two had an altercation, and a witness called the police. Officers arrived and detained Hillard after speaking to Williams. Once Hilliard was in custody, Williams told one of the officers that a gun was in the house. The officer followed Williams inside and saw a Marlin .22 rifle leaning against the wall near the door. The officer seized the gun (which was unloaded) and searched Hilliard, finding a magazine clip in his pocket. The clip fit the rifle. ¶4 Before officers left, Hilliard got out of the squad car and ran up some nearby train tracks shouting, “I don’t want to go back to prison.” Officers caught Hilliard, brought him back to the squad car, and successfully arrested him. ¶5 A jury found Hilliard guilty of armed habitual criminal, unlawful use of a weapon by a felon, and escape. ¶6 Before trial, Hilliard was initially represented by counsel. At the first appearance on April 16, 2019, this exchange took place: “THE COURT: This is Mr. Hilliard. Counsel, here is a copy of the charging instrument. -2- No. 1-20-0744 MS. THORNTON: Assistant Public Defender Starr Thornton on behalf of the defendant. Your Honor, we acknowledge receipt, waive formal reading, enter plea of not guilty. I seek leave to file my appearance at this time as well as written motions. MR. DEON HILLIARD: Defendant proceeds proper persona. THE COURT: Mr. Hilliard, there’s a statute in the State of Illinois that says if you willfully fail to appear at your trial, a trial could be conducted in your absence. You then would be giving up your right to see and hear the witnesses testify against you. If you were convicted, you would be sentenced in your absence. Do you understand that? [HILLIARD]: Yes, sir, I do. THE COURT: Okay. [HILLIARD]: I wish to proceed proper persona, Judge. THE COURT: What day do you want to come back? MS. THORNTON: Judge, I was looking to come back on May 15th. THE COURT: By agreement 5-15-19 for status on further discovery. [HILLIARD]: Defendant demands trial not by agreement. I wish to proceed proper persona.” No one addressed Hilliard’s statement, and the court continued the case. On May 15, the next court date, Hilliard again asked to represent himself: “MS. NESBIT [(ASSISTANT PUBLIC DEFENDER)]: * And I believe on the last court date, Mr. Hilliard wished to address the Court. He wanted to represent himself. -3- No. 1-20-0744 But Ms. Thornton has had an opportunity to speak to him. At this time, he still wishes Ms. Thornton to represent him. Is that correct? [HILLIARD]: That’s correct. That’s what I was trying to talk to her. She didn’t come back. I did want to represent myself still proceeding proper persona and demand trial.” Immediately after this exchange, the trial court admonished Hilliard about representing himself and accepted his decision to do so. Before continuing, the trial court asked Hilliard what he meant by “pro per.” Hilliard explained that he learned through a class he was taking that “proper persona,” or “pro per,” was the correct way of saying pro se. The trial court told him that “pro per means nothing in the law” and admonished Hilliard not to refer to himself that way anymore. Hilliard demanded trial, and the court continued the case on the State’s motion between May 15 and June 4. ¶7 At the court date on June 4, Hilliard agreed to one continuance to prepare a motion but decided to abandon the motion because he did not receive enough time in the law library. ¶8 On June 24, Hilliard reasserted his demand for trial. At the next court date, the State answered not ready for trial because a witness was out of town. The State moved to join the related misdemeanor domestic violence case, and the court continued the matter by agreement so Hilliard could draft a response. After the court denied the State’s motion for joinder, Hilliard reasserted his demand for trial. The court set the case for trial, but the State answered not ready due to “witness issues.” The next week, the case proceeded to a jury trial during which Hilliard represented himself. ¶9 Analysis -4- No. 1-20-0744 ¶ 10 Hilliard raises several claims against the judgment: (i) he was not brought to trial within 120 days as required by the Speedy Trial Act, (ii) the trial court denied him a “constitutionally sufficient opportunity to prepare his defense,” (iii) the trial court erred by empaneling three jurors who “expressed self-doubt concerning their ability to be impartial,” (iv) the trial court erred by denying Hilliard’s request for standby counsel, (v) the officers unlawfully entered Hilliard’s home and seized the gun, (vi) the trial court erred by admitting other-crimes evidence related to the domestic altercation that led to the officers’ presence at Hilliard’s home and arrest, (vii) there was a fatal variance between the charge for escape in the indictment and the evidence presented at trial, and (viii) Hilliard’s simultaneous conviction for armed habitual criminal and unlawful use of a weapon by a felon violates the one-act, one-crime rule. ¶ 11 Because we find it dispositive, we only address Hilliard’s first argument. The State initially argues Hilliard forfeited his speedy trial claim. Hilliard acknowledges that he did not bring a motion to dismiss under the Speedy Trial Act and did not raise a speedy trial argument in his posttrial motion. So, we agree the claim is forfeited. See People v. Staake, 2017 IL 121755, ¶ 30 (preserving claim requires raising it in trial court by objecting at time of error and including the error in posttrial motion). ¶ 12 In Staake, however, our supreme court acknowledged and declined to overrule a body of appellate court decisions finding that errors under the Speedy Trial Act can be reviewed as second- prong plain error. Id. ¶¶ 31, 33 (collecting cases and declining State’s invitation to overrule those cases). Under second-prong plain error, we need not honor a defendant’s procedural default because “ ‘a clear or obvious error occurred and that error is so serious that it affected the fairness of the defendant’s trial and challenged the integrity of the judicial process, regardless of the closeness of the evidence.’ ” Id. ¶ 31. The State argues that no error occurred and, significantly, -5- No. 1-20-0744 makes no challenge to Hilliard’s invocation of second-prong plain error. Because the State makes no plain error argument, we take our cue from the court in Staake and decline to take a position on the soundness of our appellate court’s decisions reviewing forfeited Speedy Trial Act claims under the second prong of the plain error doctrine. We instead will determine whether an error occurred and assume, without deciding, that any error constitutes second-prong plain error. ¶ 13 The Speedy Trial Act provides: “Every person in custody in this State for an alleged offense shall be tried by the court having jurisdiction within 120 days from the date he or she was taken into custody unless delay is occasioned by the defendant . Delay shall be considered to be agreed to by the defendant unless he or she objects to the delay by making an oral demand for trial on the record.” 725 ILCS 5/103-5(a) (West 2018). The parties’ dispute is narrow. Hilliard and the State agree that the State contributed to 93 days of pretrial delay. But they disagree about the attribution of delay for the 29 days between April 16 and May 15, 2019. Attributing these days to the State would mean trial began on the one hundred twenty-second day, outside the speedy trial term. The State argues we should attribute the delay to Hilliard because he was represented by counsel, who agreed to a continuance on April 16. Hilliard responds that he attempted to discharge counsel—and was ignored—so his counsel’s actions should not bind him. If freed from the representations of counsel, Hilliard argues he demanded trial on April 16, meaning that the delay to May 15 cannot be counted against him. ¶ 14 Delays agreed to by counsel are attributable to the defendant unless the defendant “clearly and convincingly” attempted to assert the right to discharge counsel and proceed to an immediate trial. People v. Mayo, 198 Ill. 2d 530, 537 (2002). An attempt to waive counsel must be “clear and unequivocal” to avoid needless appeals about denial of the right to counsel or self-representation -6- No. 1-20-0744 and to prevent a defendant from waffling back and forth about their decision to represent themselves. Id. at 538. To determine whether a statement is clear and unequivocal, we examine “ ‘the overall context of the proceedings’ ” while indulging every reasonable inference against waiver. Id. ¶ 15 Reading the proceedings in context, we find Hilliard attempted to represent himself starting at his arraignment. On April 16, immediately after Hilliard’s counsel introduced herself, Hilliard said, “Defendant proceeds proper persona.” No one acknowledged him. The trial court admonished him about trying him in his absence if he was released and failed to appear. Again, Hilliard immediately said, “I wish to proceed proper persona.” Everyone ignored him. Counsel then agreed to a continuance to May 15, but before proceedings adjourned, Hilliard said, “Defendant demands trial not by agreement. I wish to proceed proper persona.” No one paid attention. ¶ 16 The State argues that Hilliard used the wrong language, “proper persona,” when he really should have said, “pro se.” Besides being overly formalistic, this argument assumes a familiarity with Latin legal terms foreign to most laypeople. Yet, the State acknowledges that the phrases “in propria persona” and “pro se” are “equivalent.” (“Pro se” is the abbreviation of “in propria persona.” Another abbreviation of “in propria persona” is “pro per,” favored by courts in some states. See Judicial Council of Cal., Handling Cases Involving Self-Represented Litigants: A Benchguide for Judicial Officers 1-5 (Apr. 2019), https://www.courts.ca.gov/documents/ benchguide_self_rep_litigants.pdf [https://perma.cc/6L43-74X9]. (“Pro per” is often used in California trial courts. “In fact, it has been said that ‘many pro pers do not even know that that is what they are.’ ”) ¶ 17 Indeed, our supreme court has used “in propria persona” and “pro se” interchangeably. See People v. Bowman, 40 Ill. 2d 116, 122-23 (1968). Even assuming “in propria persona” stands -7- No. 1-20-0744 for “pro se,” the State argues that Hilliard did not use those words. We will not accept the State’s invitation to read ambiguity into Hilliard’s statement because of the judge’s unfamiliarity with “pro per” as an accepted abbreviation of “in propria persona.” See Pro se, Black’s Law Dictionary (11th ed. 2019) (noting pro se is “[a]lso termed” in propria persona, propria persona, and pro per). ¶ 18 The State goes on to argue it is “clear” the trial court did not understand what Hilliard was saying. Context resolves that argument against the State. Every time counsel attempted to make a representation on Hilliard’s behalf, he rebuffed her and articulated his decision to proceed “proper persona.” He said it immediately after counsel introduced herself. He repeated it after she agreed to a continuance, which expressly demanded trial contrary to her request for a continue of the proceedings. ¶ 19 The dissent repeats the State’s argument finding “[t]he court obviously did not understand” what Hilliard meant based on the court’s comments on May 15. Infra ¶ 33. The trial court’s misunderstanding of “proper persona,” a term interchangeable with “pro se,” is not Hilliard’s burden to bear. The question is whether Hilliard’s request was unambiguous, not whether the person hearing the request was subjectively confused about his meaning. The trial judge’s understanding of a defendant’s request may be the best evidence of clarity (see People v. Rainey, 2019 IL App (1st) 160187, ¶ 43), but we have found no case suggesting the defendant’s plain words are unclear because the trial judge either did not understand them or, as here, ignored them. And to the extent the trial court was confused by the term, the time to clarify its confusion was April 16, when Hilliard said three times (and was ignored three times) that he wanted to proceed “proper persona.” Based on legal definitions of “in propria persona,” and the term’s use in our -8- No. 1-20-0744 courts, we find Hilliard unambiguously requested to represent himself on April 16. The trial court’s unfamiliarity with the term is not a basis on which to reject Hilliard’s claim. ¶ 20 Beyond the context on April 16, the discussion on May 15 shows that counsel understood Hilliard wanted to discharge her at his arraignment. Another assistant public defender stepped up for Hilliard’s counsel and explained that Hilliard “wanted to represent himself.” Hilliard agreed he and counsel had since spoken but clarified—in the same sentence—that he still wanted to represent himself and demanded trial. Reading the proceedings on April 16 and May 15 together, we find Hilliard had consistently made his demand to represent himself known. ¶ 21 The State resists this conclusion with one more argument, that the trial court was not required to rule on Hilliard’s request to represent himself at the time he made it, relying on People v. Baez, 241 Ill. 2d 44 (2011). There, our supreme court found no error in the trial court suggesting a continuance for the defendant to consult with his counsel before accepting the defendant’s request to represent himself. Id. at 117. Importantly, however, the court’s decision in Baez was not inflected by the ticking time of the speedy trial clock. We could easily apply Baez in the context of a request for self-representation unaccompanied by a demand for trial, but those are not the facts before us. ¶ 22 The court in Baez also relied on Mayo, which did involve delay in ruling on a self- representation request in the context of a speedy trial demand. In Mayo, however, the defendant had repeatedly flipped back and forth between requesting counsel and dismissing counsel. Mayo, 198 Ill. 2d at 538-39. For instance, the defendant dismissed his counsel only to request counsel be appointed eight days later. Id. at 538. About four months after that, the defendant reaffirmed he wanted counsel to represent him but, in the same proceeding, asked to represent himself again. Id. The court found the defendant’s request was not unequivocal because he had switched positions -9- No. 1-20-0744 and, therefore, the trial court did not err in granting a continuance for the defendant to consider his choice. Id. at 539. Hilliard consistently and firmly said he wanted to represent himself and demanded trial. ¶ 23 But there is an even more important distinction. In Mayo, our supreme court found the trial court did not abuse its discretion in ordering a continuance after considering the context of the defendant’s request to represent himself. Id. Here, however, there is no evidence that the trial court exercised similar discretion because no one acknowledged Hilliard the three times he spoke up during his arraignment. ¶ 24 Two principles guide us. First, the trial court’s failure to exercise discretion, where it has discretion, is itself an abuse of discretion. E.g., People v. Lovelace, 2018 IL App (4th) 170401, ¶ 33 (“a trial court errs if it * wholly fails to exercise its discretion”). Second, even if the trial court had ordered a continuance for Hilliard to confer with counsel, the circumstances differ markedly from Mayo. So, any decision the trial court might have made to continue the case for discussions with counsel would likely have been an abuse of discretion because Hilliard did not flip-flop between requesting counsel and requesting self-representation. ¶ 25 The State’s argument boils down to one proposition: the trial court properly ignored Hilliard’s request to represent himself because he did not use what the court considered the right words. But our supreme court has emphasized we are guided by context—not linguistic precision—in determining whether a self-representation request is “clear and unequivocal.” People v. Burton, 184 Ill. 2d 1, 22-23 (1998) (describing factors like whether defendant’s request was made for improper purpose, whether defendant later acquiesced in appointment of counsel, whether defendant’s later conduct was consistent with relinquishing counsel, whether defendant remained silent at critical points in proceedings, and whether request timely). From his - 10 - No. 1-20-0744 arraignment, Hilliard asked to represent himself, and even if his words were interpreted as imprecise, he made his intent explicit by contradicting counsel every time she spoke. Moreover, he requested early in the proceedings and never wavered in his request to proceed pro se or used his request to delay or avoid litigating his case. ¶ 26 Considering the record in context, we find Hilliard’s request to represent himself was “clear and unequivocal” on April 16, 2019. The delay of 29 days between April 16 and May 15 should not be attributable to him, meaning the State tried him outside the 120-day window provided in the Speedy Trial Act. As we mentioned, the State presents just one argument on this issue—there was no error and does not contest any error we find as plain error. ¶ 27 We reverse Hilliard’s convictions as obtained in violation of the Speedy Trial Act. See People v. McGee, 2015 IL App (1st) 130367, ¶ 26 (describing remedy for violating Speedy Trial Act). ¶ 28 Reversed. ¶ 29 JUSTICE COGHLAN, dissenting: ¶ 30 Although a criminal defendant has the right of self-representation, “[i]t is well settled that waiver of counsel must be clear and unequivocal, not ambiguous.” (Internal quotation marks omitted.) People v. Baez, 241 Ill. 2d 44, 116 (2011). Our supreme court has emphasized that a defendant waives his right to self-representation unless he “articulately and unmistakably demands to proceed pro se.” (Internal quotation marks omitted.) People v. Burton, 184 Ill. 2d 1, 22 (1998). “A defendant must explicitly inform the trial court he wants to proceed pro se because ‘[a]nything else is an effort to sandbag the court and the opposition, to seek an acquittal with an ace up the sleeve to be whipped out in the event of conviction.’ ” Id. (quoting Cain v. Peters, 972 F.2d 748, 750 (7th Cir. 1992)). - 11 - No. 1-20-0744 ¶ 31 Here, defendant did not “articulately and unmistakably” demand to proceed pro se at his April 16 arraignment. Defendant was represented by an assistant public defender (APD) who acknowledged receipt of the indictment, waived formal reading, and entered a plea of not guilty on his behalf. The defendant interjected: “Defendant proceeds proper persona.” The record does not reflect any response to this comment by the trial court. The record does reflect that the trial court proceeded to admonish the defendant that if he willfully failed to appear at trial, he could be tried and sentenced in his absence, and the following colloquy occurred: “THE COURT: * Do you understand that? [DEFENDANT]: Yes, sir, I do. THE COURT: Okay. [DEFENDANT]: I wish to proceed proper persona, Judge. THE COURT: What day do you want to come back? [APD]: Judge, I was looking to come back on May 15th. THE COURT: By agreement 5-15-19 for status on further discovery. [DEFENDANT]: Defendant demands trial not by agreement. I wish to proceed proper persona.” The proceedings ended there. ¶ 32 At the next status hearing on May 15, a different APD appeared on behalf of defendant because the APD of record “had to run to another room.” The APD stated: “[O]n the last court date, [defendant] wished to address the Court. He wanted to represent himself. But [the APD of record] has had an opportunity to speak to him. At this time, he still wishes [the APD of record] to represent him. Is that correct?” Defendant clarified: “I did want to represent myself still proceeding proper persona and demand trial.” The trial judge admonished defendant in accordance - 12 - No. 1-20-0744 with Illinois Supreme Court Rule 401 (eff. July 1, 1984) and permitted the APD to withdraw. The judge then asked: “THE COURT: One of the things you said when you addressed me, you said you were pro per. [DEFENDANT]: Proper persona. THE COURT: What does that mean? [DEFENDANT]: Pro se. It’s the proper way of saying it . ** THE COURT: Pro per means nothing in law. It doesn’t mean anything. So don’t refer to yourself as pro per any more.” ¶ 33 Defendant did not “clear[ly] and unequivocal[ly]” (Baez, 241 Ill. 2d at 116) attempt to assert his right to discharge his attorney at the April 16 hearing. The court obviously did not understand defendant’s request to proceed “proper persona” as a request to waive his right to counsel, as evidenced by the fact that it specifically asked defendant what “proper persona” meant at the next court date. Even defendant’s counsel was unsure as to his meaning, as shown by her mistaken belief at the May 15 hearing that defendant still wanted to be represented by the public defender. Notably, as soon as defendant clarified that he wished to represent himself, the trial court properly admonished him and allowed his counsel to withdraw. ¶ 34 “When a defense attorney requests a continuance on behalf of a defendant, any delay caused by that continuance will obviously be attributed to the defendant.” People v. Kaczmarek, 207 Ill. 2d 288, 296 (2003). Because defendant’s counsel requested a continuance at the April 16 hearing and defendant did not “ ‘articulately and unmistakably’ ” (Burton, 184 Ill. 2d - 13 - No. 1-20-0744 at 22) assert his right to waive counsel, the delay caused by the continuance is properly attributed to defendant and his right to a speedy trial was not violated. ¶ 35 I respectfully dissent and would affirm the defendant’s conviction and sentence. - 14 - No. 1-20-0744 People v. Hilliard, 2022 IL App (1st) 200744 Decision Under Review: Appeal from the Circuit Court of Cook County, No. 19-CR-07016; the Hon. Brian Flaherty, Judge, presiding. Attorneys Michael W. Weaver, of McDermott Will & Emery, LLP, of for Chicago, for appellant. Appellant: Attorneys Kimberly M. Foxx, State’s Attorney, of Chicago (John E. Nowak for and Stacia Weber, Assistant State’s Attorneys, of counsel), for the Appellee: People. - 15 -	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483705/	NOTICE 2022 IL App (5th) 200221 Decision filed 11/14/22. The text of this decision may be NO. 5-20-0221 changed or corrected prior to the filing of a Petition for Rehearing or the disposition of IN THE the same. APPELLATE COURT OF ILLINOIS FIFTH DISTRICT ______________________________________________________________________________ THE PEOPLE OF THE STATE OF ILLINOIS, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Effingham County. ) v. ) No. 19-CF-137 ) JOSHUA D. ROWLANDS, ) Honorable ) Allan F. Lolie, Defendant-Appellant. ) Judge, presiding. ______________________________________________________________________________ JUSTICE MOORE delivered the judgment of the court, with opinion. Justices Welch and Cates concurred in the judgment and opinion. OPINION ¶1 The defendant, Joshua D. Rowlands, was convicted, following a trial by jury in the circuit court of Effingham County, of one count of aggravated criminal sexual abuse and one count of predatory criminal sexual assault of a child. 720 ILCS 5/11-1.60(c)(1)(i), 11-1.40(a)(1) (West 2018). He was thereafter sentenced to a total of 13 years of imprisonment in the Illinois Department of Corrections (IDOC), to be followed by a term of mandatory supervised release (MSR). In this direct appeal, he contends the State did not prove him guilty beyond a reasonable doubt and that the trial judge erred in his admonishments to the potential jurors. For the reasons that follow, we affirm. 1 ¶2 I. BACKGROUND ¶3 On March 28, 2019, the defendant was charged, by information, with one count of aggravated criminal sexual abuse. The information alleged that between March 8 and March 10, 2019, the defendant “knowingly committed an act of sexual conduct with B.H., who was under 13 years of age when the act was committed, in that the defendant knowingly touched the breast of B.H. with his hand for the purpose of sexual arousal of the defendant.” On April 17, 2019, the defendant was charged, by indictment, with the same offense. On January 24, 2020, the defendant was charged, by information, with one count of predatory criminal sexual assault of a child. The information alleged that between March 8 and March 10, 2019, the defendant “knowingly committed an act of sexual contact with B.H., who was under 13 years of age when the act was committed, in that the [d]efendant touched the vagina of B.H. with his finger for the purpose of sexual arousal of the defendant.” On February 19, 2020, the defendant was charged, by indictment, with the same offense. ¶4 The case proceeded to a trial by jury on both counts. Jury selection was conducted on February 24, 2020, during which the trial judge read to the potential jurors the four principles of law required by Illinois Supreme Court Rule 431(b) (eff. July 1, 2012), which are known commonly as the Zehr principles.1 The trial judge asked each potential juror if that juror heard the four principles, agreed with them, and accepted them to be true. Each potential juror answered affirmatively. The trial judge did not ask any of the potential jurors if they understood the four principles. 1 The four principles are that a defendant (1) is presumed innocent of the charge(s) against him or her, (2) is not required to offer any evidence on his or her own behalf, (3) must be proved guilty beyond a reasonable doubt, and (4) may not have his or her failure to testify held against him or her. See People v. Zehr, 103 Ill. 2d 472, 477 (1984). 2 ¶5 Testimony in the trial began on February 27, 2020. The first witness to testify for the State was B.H. She testified that at the time of trial she was 12 years old and that she was born on March 15, 2007. She testified that in March 2019, prior to her birthday, she went to a sleepover at the home of her friend, Kyleigh. She testified that Kyleigh’s stepfather is the defendant. B.H. testified that while she was sleeping at Kyleigh’s home, the defendant lay down beside her and began to touch her. She testified that the defendant first rubbed her stomach, then moved his hand to her chest, then down to “in [her] pants.” B.H. was asked where “in particular” the defendant touched her under her pants. When B.H. did not respond, counsel for the State added, “Do you know, [B.H.], or can you elaborate? [B.H.], could you answer the question? Besides your breast and your stomach, where else did he touch you at? However—whatever you want to say, say it.” When B.H. still did not respond, counsel asked to withdraw his question and continued with other, more general, questions about the sleepover, which adduced testimony from B.H. that she and Kyleigh were sleeping together on a hide-a-bed on the Saturday morning that the touching occurred. ¶6 Thereafter, counsel for the State asked B.H., “after he touched your breasts, did he touch any other parts of your body?” B.H. answered, “Yes.” When asked to elaborate, B.H. did not respond, and counsel again asked to withdraw his question. The trial judge responded, “Give her time. You can withdraw it if you like, but there’s no hurry here.” Counsel then stated, “[B.H.], you can answer the question when you feel ready.” B.H. still did not respond. The trial judge then stated, “State, maybe you can proceed to further questioning for a little bit if you have more.” Counsel asked B.H. to identify the defendant in court, which she did. He thereafter stated, “And I’ll ask one more time. [B.H.], anything else that you want to add where [the defendant] touched you when he woke you up that morning?” B.H. did not respond verbally. Counsel then stated, “She is nodding, Judge, for the record that she doesn’t wish to answer it. No more questions.” 3 ¶7 Defense counsel requested a short recess, after which he declined to cross-examine B.H. The State then called Robyn Carr to testify. She testified that she was the senior forensic investigator at the Children’s Advocacy Center of East Central Illinois (CAC). She testified with regard to her qualifications, certifications, and the general procedures of the CAC, then testified that on March 25, 2019, she conducted an approximately 45-minute forensic interview with B.H. at the CAC. She authenticated People’s exhibit No. 1 as a copy of the audio and video recording of that interview. The exhibit was admitted into evidence and immediately published to the jury. ¶8 Of significance to this appeal, in the interview that was viewed by the jury, the ceiling- mounted camera showed that B.H. and Carr entered the interview room together, then sat on chairs that were approximately three feet away from each other, with no table or other obstruction between them. Carr gave B.H. some background information about the CAC interview room and ensured that B.H. understood that, if she did not know the answer to a question or did not remember, she should tell that to Carr and that B.H. should only talk about things that B.H. knew “are true and really happened.” Carr also told B.H. that, if Carr got “something wrong,” B.H. should correct her. ¶9 With regard to the alleged incident in this case, B.H. stated that she went to her friend Kyleigh’s house “a little bit after school on Friday” and stayed until Sunday. She stated that “Saturday morning is when everything happened.” B.H. stated that she and Kyleigh were sleeping on the hide-a-bed in the living room and that “he came over and lay next to me.” She stated that he put his arm around her “for a few minutes,” then began rubbing her stomach “up and down,” then stopped “for a minute,” then began rubbing her stomach again and squeezing it. She described the pajamas she was wearing as having an elastic band, and she stated that she felt “his hands kind of going down a little bit.” She stated that this happened a few times and that, because she was scared, she tried to move away but could not move and “just froze there.” 4 ¶ 10 She stated that “eventually” his fingers moved inside her pants and that he “tried to go into [her] underwear,” at which point “he didn’t really touch [her] private that much, but he did a little bit.” She stated that, when Kyleigh’s sister Reagan got on the bed, “he moved his hand away really fast” and that he also stopped when the dog got on the bed. She stated that eventually “he started rubbing [her] stomach again,” then started trying to “go up” the sports bra she was wearing but “really didn’t,” and instead “stayed on the outside and was squeezing.” B.H. stated that he had his hand on her back and was rubbing her back, and then started rubbing her “butt and was squeezing it” over her pants “for a long time.” ¶ 11 B.H. then stated, “I’m going to show you,” and stood up. She pointed with her right hand to an area between her legs, approximately midway between her knees and her hips, stating as she did so (and as she quickly then sat back down), “in the middle, down here, he took his finger and started rubbing,” which made her “really scared.” She stated that, although Kyleigh was in the same bed, right next to her, “even if I did try to say something, I don’t know what I would say.” She added that “he also smelled really bad,” which she described as a “weird body odor.” ¶ 12 B.H. stated that she “was kind of scared to go home” because she “didn’t really want to talk about” what had happened, so she stayed another night at Kyleigh’s house, which she stated she also did because she “really didn’t know what to do” and “was just scared.” She stated that, for the rest of the weekend, he would stare at her and seem upset if she did not smile at him, so she would smile at him to reassure him “it was okay.” She stated that on Sunday morning, he again came into the room where she was sleeping and “held [her] hand.” She stated that, when she got home, she did not want to tell her guardian, Betsy, so she called her grandmother in Colorado and told her, then asked her grandmother to tell Betsy, which her grandmother did. ¶ 13 Carr then asked B.H. the name of the man she had been referring to. B.H. answered “Josh” and added that he was “Kyleigh’s step-dad” and “the dad of the house.” After a discussion of 5 other matters, Carr eventually asked again about the alleged incident. B.H. stated that “one thing I forgot was he kissed my neck a few times,” which she stated made her “really uncomfortable.” Subsequently, Carr stated that she wanted to make certain she had all the details correct and so wanted to ask B.H. some specific questions. She asked B.H. to tell her more about the defendant touching B.H.’s “privates.” B.H., who was still seated across from Carr, moved her right hand back and forth horizontally near the tops of her thighs, stating “he kind of just like went like halfway, not all the way.” She stated that “he didn’t really like go fully in my underwear, but he was, he kind of stopped halfway because I wouldn’t let him go farther.” She stated that she “locked [her] legs shut” but “couldn’t move” away because she was frozen and scared. She stated that the defendant tried to move her legs but that she did not let him. She stated that he tried to move her underwear at one point as well. ¶ 14 After a general discussion of other details not relevant to the issues raised on appeal by the defendant, and after Carr briefly left the interview room, Carr returned and thereafter asked B.H. to tell her “where the touching was when you’re talking about your privates” and to describe more about when the defendant’s hand was in her underwear and “was touching the skin of [her] body.” Carr added, “Where did his hand go?” B.H. answered that she was beginning to get “a little bit” of pubic hair and that “when he was kind of like going down a little bit right here”—at which point she touched an area near her genitalia—the defendant “was kind of like * playing with” her pubic hair and “twisting it around on his finger,” which also made her “really uncomfortable.” She then moved her right hand back and forth horizontally across her thighs at the point where her legs separated from her midsection and stated, “he kind of got like right to like right about here.” She thereafter added, “on my private, through my clothes,” he “played around with” her “private.” She agreed with Carr’s statement that the defendant’s hand was “further down” on her “privates” when it was over her clothes than when it was underneath. 6 During the interview, B.H. also explained that it made her uncomfortable to discuss changes in her body, such as puberty, with Betsy. ¶ 15 We note that, although we have described the relevant parts of the entire interview chronologically from start to finish, at trial a short recess was taken at approximately the 18- minute mark of the interview, so that the video could be fast-forwarded past comments of a potentially sexual nature made by B.H. about the defendant and his oldest stepdaughter, as well as about the defendant and another young girl known to B.H., which the parties agreed prior to trial the jury should not hear. During the recess, outside the presence of the jury, defense counsel made the following statement on the record: “For the benefit of the Appellate Court if, God forbid, this case makes it that far, I as a matter of tactics, decided not to cross-examine the alleged victim, [B.H.]. I did that realizing that it is a massive tactical risk. I did that after consulting with [the defendant], and considering our goal in the litigation. Now, if this tactical decision that I made backfires, that’s on me, I understand I can’t pass that off on my client. The goal in the litigation for the defendant is not to just beat Count II. If we wanted to resolve this case with a judgment against him on Count I, we had that opportunity. So [the defendant’s] goal in this litigation is to win. We think, I think that this is an appropriate tactical decision in light of that goal. We felt that * cross-examining [B.H.] would have given the State another opportunity to get her to say what they wanted her to say, and we didn’t want to give her that chance. If we had cross-examined her, I suppose there could have been a beyond the scope objection if they tried to get back into that, but there is no security in that because that’s a matter for the [trial judge’s] discretion. Any cross-examination that I would have made of her would have been, you know, specific to the allegations so it probably would not have been beyond the scope for the State’s Attorney to redirect her in 7 that fashion. So we recognize that this was a massive tactical risk, but for the benefit of the record, I thought it would be appropriate to explain what we are doing here.” ¶ 16 The trial judge then asked the defendant if he disagreed with anything his counsel had stated. The defendant responded, “No.” The trial judge then stated the following: “I would note just for the record, they were lengthy, these periods of silence, and sobbing when the witness, [B.H.,] was on the stand and she was unable to respond to the main question in the State’s direct. And I just think that’s important to mention that in light of what you said as well.” Following the recess, the remainder of the recorded interview, described in detail above, was played for the jury. ¶ 17 The next witness to testify was Elizabeth “Betsy” Butler. She testified that she was B.H.’s legal guardian and was a friend of B.H.’s mother, who was now deceased. She testified that she had known B.H. since B.H. was two years old. Betsy testified that on Friday, March 8, 2019, B.H. went to a sleepover at the home of her best friend, Kyleigh. She testified that, when she spoke to B.H. on Saturday, B.H. wanted to stay an additional night, which Betsy let her do. Betsy testified that she picked B.H. up on Sunday, March 10, 2019, and that “[w]hen [B.H.] got in the car, I could tell she was a little off. Quiet. Not looking at me.” She testified that B.H. was usually “[h]appy * [c]arefree[, and] adventurous.” She testified that instead, B.H. was “really sullen and quiet” on that Sunday. She testified that B.H. later called B.H.’s grandmother and that, when Betsy walked into the room where the call was taking place, B.H. was crying. She testified that, when she asked what was wrong, B.H. asked her to talk to B.H.’s grandmother. As a result of what B.H.’s grandmother told Betsy and as a result of a subsequent conversation between Betsy and B.H., Betsy called the police. Defense counsel declined to cross-examine Betsy. 8 ¶ 18 Jason McFarland testified that he was a police officer with the Effingham Police Department and that on Sunday, March 10, 2019, he was a lieutenant assigned to investigations. He identified the defendant in court, then testified that on March 10, 2019, he received a report from Officer Jason Gouchenour, which led McFarland to speak to B.H. on March 11. He testified that he did not discuss the substance of the allegations with B.H. in much detail at that time, because he wanted her to participate in a forensic interview at the CAC first. McFarland testified that the CAC could not conduct an interview until March 25, due to scheduling issues with CAC staff. He testified that he interviewed the defendant for approximately one hour on March 13, along with Detective Joshua Douthit, and that the interview was audio and video recorded. He authenticated People’s exhibit No. 2 as a copy of the audio and video recording of that interview. The exhibit was admitted into evidence and immediately published to the jury. ¶ 19 Of significance to this appeal, in the interview that was viewed by the jury, McFarland and Douthit entered the interview room together, where the defendant was already seated on a chair. After discussions not relevant to this appeal, McFarland began to question the defendant about the incident. The defendant stated that B.H. had spent the entire previous weekend at his house, and his statements about the details of the sleeping arrangements and events of the weekend— other than the alleged improper touching—were for the most part consistent with the statements of B.H. He denied that anything memorable happened over the weekend. He agreed that he got into the hide-a-bed with B.H. and Kyleigh on Saturday morning but stated that it was not unusual for his two youngest stepdaughters, Kyleigh and Reagan, to climb into his bed, with their mother present as well, or to want to be hugged. The defendant denied that he touched B.H., even inadvertently or in a way that could be misconstrued by her, while he was on the hide-a-bed with B.H. and Kyleigh. 9 ¶ 20 Douthit then told the defendant that it was “very clear” from talking to B.H. and others that touching occurred on the bed and that the officers needed to understand the specifics of it and whether it was innocent or not. He stated that the defendant needed to be honest with them. The defendant stated that he and B.H. “wrestled” on the bed a little on Friday night, as he often did with his kids and their friends, but stated that there was nothing of a sexual nature about it. Douthit then asked him to be “very specific” about any contact with B.H. on the hide-a-bed on Saturday morning. The defendant stated that he did not remember any contact on Saturday morning, although he remembered that B.H. asked him for a hug on Sunday morning and that he gave her one then. ¶ 21 The defendant stated that, on Saturday night, Kyleigh fell asleep on the bed, with her head on his chest, while the others watched a scary movie and that B.H., who was facing away from him, held onto his hand at times during the movie because she was scared. He stated that, during that time, B.H. sometimes moved or pulled on his hand and arm, including onto her “side,” which he thereafter described as around her hip and leg area. He denied that his hand or arm were ever on any part of her body that was “inappropriate.” He denied that any part of his body other than perhaps his “upper” arm could have touched B.H.’s breasts when she was pulling on him. ¶ 22 McFarland then mentioned that “in this day and age * kids get sexualized very early” and that some girls become “hyper-sexualized at that age,” which he suggested could lead a child to take the sexual initiative with an adult. He then stated that he had spoken with B.H. and believed her when she said that touching had occurred but was not sure if she had told him the entire truth about what happened. The defendant denied that B.H. had made sexual advances toward him and continued to deny that any inappropriate touching occurred but reiterated that the upper part of his arm could have “brushed across” B.H.’s chest when she was pulling on it during the scary movie. McFarland then discussed DNA evidence and asked if there was any 10 reason the defendant’s DNA would be on B.H.’s underwear and bra. The defendant answered “No” and thereafter stated, when asked, that he would give a DNA sample that day. He thereafter reiterated that his DNA would not be on her bra and underwear and again offered to give a DNA sample. He stated that possibly DNA could be on B.H.’s pajama pants because of the innocent contact they had during the movie, but not in the area of her vagina or buttocks. ¶ 23 Subsequently, Douthit again emphasized that the defendant needed to be truthful with the officers because they found B.H. to be “super believable” and needed to hear his side of what happened. The defendant continued to deny that there was inappropriate contact and stated that the only possible explanation for B.H.’s contention that she was touched inappropriately was inadvertent or accidental touching near her vagina or buttocks when she pulled on his arm during the movie. McFarland again brought up the DNA evidence, telling the defendant that it was important for his statements to the officers to match up with any DNA evidence that was later discovered. He again mentioned the possibility that B.H. initiated sexual contact with the defendant, such as by sticking the defendant’s hand down her pants, and stated, as he had previously, that he believed the defendant’s DNA would be found on B.H.’s underwear. ¶ 24 The defendant thereafter stated that he remembered feeling B.H.’s “stomach” when she clinched the defendant’s hand and arm because B.H. was wearing a shirt that was short and would “slide” but that B.H. did not put the defendant’s hand or arm down her pants. When again asked when this touching occurred, he again stated that he was talking about Saturday night, when they all watched the movie together. When asked if there was a possibility that his hand touched her underwear or pajama pants, the defendant answered, “It may have, depending on * where” her clothing was exactly on her body. He stated that he was paying attention to the movie, not her. He stated that at times he moved his arm back to its original position, because it was sometimes uncomfortable when B.H. was pulling on it, and that he could have accidentally touched her at 11 those times too. He stated that, if B.H. thought he touched her inappropriately, it was “totally a misunderstanding” on her part. When asked, he reiterated that, if B.H. “got touched,” it was not intentional. ¶ 25 Douthit again emphasized that the officers believed B.H. and were trying to figure out what happened. He stated that he believed there was definitely rubbing of the vagina area over the clothing. The defendant stated that there may have been “inadvertent” or “accidental” touching but thereafter stated that the only way that was possible was if it happened while B.H. had her arms wrapped around his arms as they watched the scary movie. When asked about Saturday morning, he again stated that nothing happened at that time, although he gave her a hug on Sunday morning. He then stated, “come to think about it, it was Saturday morning too.” Douthit then asked the defendant to “walk [Douthit] through Saturday.” ¶ 26 The defendant stated that “nothing” happened and that he got on the hide-a-bed, where the girls were both “on their phones” and where he stayed and talked to them for “a while.” With regard to the way he hugged B.H. on Saturday morning, the defendant stated that B.H. was lying down and he was standing up, so he put his arms “lower” near her “lower back.” He denied that he could have touched her buttocks. As far as touching B.H. while they were both lying in the bed, he said it would have only occurred because she was lying “right next to” him. He stated that it was “pretty much the exact same thing” on Saturday and Sunday. ¶ 27 Douthit thereafter asked if the defendant believed B.H. was trustworthy and then asked if he thought she could be imagining being touched on the waist or buttocks or would “make this up.” The defendant stated that he did not think so. Douthit then gave the defendant some of the details about B.H.’s allegations of the defendant touching her, including that B.H. stated that she felt the defendant touching her buttocks area and below her waist area where her vagina would be. Douthit asked, “Can you explain that to us please?” The defendant answered, “No, I can’t 12 explain it to you.” He denied that he embraced or hugged B.H. while the two were together in the bed, reiterating that he hugged her only when he was standing up and she was lying on the bed. ¶ 28 McFarland then left the interview room, and Douthit mentioned to the defendant that the defendant should think about B.H., and not putting her “through a long ordeal,” and should explain any innocent touching that may have happened and been misunderstood by B.H. Douthit stated that there had to be an explanation because B.H. “didn’t just make up that she was touched in the buttocks and the vagina area.” The defendant stated that if he touched “her anywhere around there” it was “certainly * inadvertently.” Douthit asked him if he remembered doing that. The defendant stated that he did not. He also stated that if he touched her while they were all wrestling around, that was inadvertent as well and that, if that happened, he was “very, very sorry, but it wasn’t intentional in any way.” ¶ 29 After more questioning, Douthit told the defendant, “I know you want to say what happened.” The defendant continued to deny that he intentionally touched B.H. in a sexual way and continued to state that he did not remember touching her, although he reiterated that when he hugged her, it was on her lower back, which he noted was near the top of her butt. He stated, “Maybe that’s what it was.” Douthit asked if that would explain the defendant’s DNA being in that area, to which the defendant answered, “Yes, that would be the reason.” He reiterated that, to the extent he hugged her in the bed, any inappropriate touching was inadvertent and involved, at most, her buttocks. He again denied that he touched her in “the front.” He conceded that he might have touched her “around the waistline” when removing his hand after the hug, but “no lower.” Douthit asked him if he was “sure,” to which the defendant responded, “Yes.” The officers then took a DNA sample from the defendant and concluded the interview, telling the 13 defendant that, if he thought of anything else they should know, he should ask to speak to them again. ¶ 30 After the interview was played for the jury, McFarland testified that, although the DNA sample was taken, it was not sent off for analysis, because officials at the crime lab indicated that, based upon the allegations in this case, it was highly unlikely there would be any DNA found. Following McFarland’s testimony, the State rested its case. Outside the presence of the jury, defense counsel made a motion for a directed verdict with regard to both counts. Counsel stated that he would focus his remarks on count II, predatory criminal sexual assault of a child. He argued that “[t]here has been no testimony, either live testimony or in the statements [of the defendant and B.H.] that there was any contact of any nature between [the defendant’s] finger and the vagina of” B.H. He argued that, accordingly, there was simply no evidence to support count II. Counsel for the State countered that B.H.’s CAC interview—which he reminded the court could be considered as substantive evidence by the jury pursuant to Illinois statute— included statements from her that the defendant touched her pubic hair and included her pointing “to exactly the area where he stops underneath her underwear.” Counsel argued that “[i]t can be inferred by a jury that he was at the beginning or start of her genitals which would be the vagina in this case and a reasonable jury can make that inference.” The trial judge stated that he agreed, and he denied the defendant’s motion for a directed verdict. ¶ 31 The first witness to testify on behalf of the defendant was Kyleigh O’Dell. She testified that the defendant was her stepfather. When asked if she remembered the weekend that B.H. last spent the night with her at her house, Kyleigh testified, “Not that much but I do some.” She agreed that B.H. came over on Friday night. She testified that she and B.H. slept together on the hide-a-bed in the living room and that two of her siblings slept in the living room with them as well. She did not know why the four of them slept in that room instead of their bedrooms. When 14 asked if the defendant got in the hide-a-bed with Kyleigh and B.H., Kyleigh testified, “No. I don’t think so.” She testified that she did not see the defendant touch B.H. She testified that on Saturday night, they watched a movie together. She testified that she and B.H. were on the hide- a-bed and that she could not remember where the defendant was sitting, although he was watching the movie with them. Kyleigh testified that she did not recall anything happening during the movie and that they slept in the living room again that night. She testified that on Sunday morning, the defendant came into the living room to say hi to everyone. She did not see anything happen between the defendant and B.H. She testified that, when it was time for B.H. to go home, B.H. “basically, kind of started crying, being like she started whining because she said she didn’t like Betsy.” At no point did Kyleigh testify to any physical contact, whether accidental, incidental, or purposeful, between the defendant and B.H. ¶ 32 The next witness to testify on behalf of the defendant was Reagan O’Dell. She testified that she was 14 years old and that she lived with, inter alia, the defendant (who is her stepfather) and Kyleigh. She testified that among the furniture in her living room was a hide-a-bed. Reagan testified that she remembered the last time B.H. slept over at her house. She testified that B.H. came over on that Friday afternoon and that all she could remember about that night was them watching a movie together. She testified that she saw B.H. and Kyleigh on the hide-a-bed on Saturday morning but did not see the defendant there. She did not remember anything she did on Saturday or Saturday night. She testified that B.H. and Kyleigh slept in Kyleigh’s room on Saturday night. She testified that she remembered that on Sunday, when it was time for B.H. to go home, B.H. “was crying because she didn’t want to leave.” Reagan testified that she never saw the defendant touching B.H. at any time during the weekend. At no point did Reagan testify to any physical contact, whether accidental, incidental, or purposeful, between the defendant and B.H. The State declined to cross-examine Reagan, and thereafter, the defendant rested his case 15 and, outside the presence of the jury, again argued for a directed verdict on count II. The trial judge again agreed with the State that there was sufficient evidence for the case to go to the jury, stating that, in his “recollection of the video, she pointed specifically to the area immediately between her legs, which obviously would be indicative of her genitalia.” ¶ 33 A jury instruction conference followed. Neither party objected to any of the proposed instructions. The following morning, February 28, 2020, the trial resumed, with the parties delivering their closing arguments. Counsel for the State acknowledged that at trial B.H. “kind of got quiet and never fully answered the question” about being “touched below near her genitalia” but reminded the jurors that they could consider her CAC interview, in which she stated, inter alia, that the defendant “rubbed the outside of her genitals over the clothes.” Counsel argued that B.H. was believable because she “didn’t equivocate[,] * was not evasive[, and] * was not inconsistent.” Counsel also pointed out that, during her CAC interview, B.H. was very descriptive, including facts such as that the defendant had a strong body odor and that B.H. disclosed the abuse in a timely manner on the day she returned home from the defendant’s house. He argued that the defendant’s statement corroborated B.H. because in his statement, the defendant admitted that he was in the hide-a-bed with B.H., whereas the testimonies of both Kyleigh and Reagan “were all over the place,” which made them “simply not believable” as witnesses. Counsel for the State played part of People’s exhibit No. 2 for the jury, pointing out that the defendant admitted to (1) lying on the hide-a-bed beside B.H., (2) touching B.H.’s stomach, then her side, near her hip, and (3) possibly having his hand on her underwear. ¶ 34 With regard to the charges the State was required to prove, counsel thereafter argued to the jury that “[y]ou can draw the inference that if you are playing with somebody’s pubic hair near the region she was pointing, he was making contact with her vagina. It’s perfectly plausible that happened.” Counsel for the defendant, on the other hand, argued that, in essence, the defendant 16 was coerced by the police into confessing to things he did not do because he was questioned over and over again by the officers about the same things and because the officers would not accept his innocent answers for what happened. He did not argue, at all, that, anatomically speaking, it was not physically possible for the defendant to have touched B.H.’s vagina or that the evidence showed, at most, that the defendant touched only B.H.’s pubic hair. ¶ 35 The trial judge thereafter instructed the jury, inter alia, that, to find the defendant guilty beyond a reasonable doubt of the charge found in count II, the jury must conclude that, inter alia, “the defendant knowingly committed an act of contact, however slight, between the sex organ of one person and the body part of another for the purposes of arousal of the defendant.” The trial judge also instructed the jury, inter alia, that (1) “[c]ircumstantial evidence is the proof of facts or circumstances which give rise to a reasonable inference of other facts which tend to show the guilt or innocence of the defendant” and (2) “[c]ircumstantial evidence should be considered by you together with all the other evidence in the case in arriving at your verdict.” Outside the presence of the jury, the trial judge noted that he was not sending the video exhibits back to the jury unless they requested to watch them again, in which case he would inform the parties and they would “decide how we wish to proceed.” The jury did not request to view the video exhibits or send any other kind of note to the judge. The jury found the defendant guilty of both counts against him. ¶ 36 On March 2, 2020, the defendant filed a motion for acquittal or, in the alternative, for a new trial. Therein, he contended, inter alia, that he was not proven guilty beyond a reasonable doubt of either count. He did not allege that the trial judge failed to properly admonish the jury in any way. Subsequently, the defendant hired new counsel to assist him. New counsel did not file a new posttrial motion, opting instead to stand on the motion filed by the defendant’s prior counsel. On July 27, 2020, a hearing on the motion was held. Defense counsel renewed, 17 inter alia, the argument that there was not sufficient evidence presented at trial to support a finding of guilt on count II. The trial judge denied the motion, noting, inter alia, his recollection that B.H. “appeared quite believable” and that, even though she “froze up and started to cry” during her testimony at trial, that testimony, coupled with her CAC interview, provided sufficient evidence to support the jury’s finding of guilt. ¶ 37 Thereafter, the case proceeded to sentencing. Ultimately, the defendant was sentenced to five years in IDOC on the count of aggravated criminal sexual abuse (count I) and eight years in IDOC on the count of predatory criminal sexual assault of a child (count II), with the sentences to be served consecutively and followed by a term of MSR. This timely appeal followed. ¶ 38 II. ANALYSIS ¶ 39 On appeal, the defendant contends that (1) the State failed to prove him guilty beyond a reasonable doubt of count II, “because vague descriptions of alleged touching of the pubic hair do not prove the specific touching necessary for predatory criminal sexual assault” of a child and (2) the trial judge erred when he “failed to ask the potential jurors if they both understood and accepted the Zehr principles.” With regard to his first contention, he posits that, “where the State charged [the defendant] with touching B.H.’s vagina, it was required to present proof of an intrusion into B.H.’s body to prove [the defendant] guilty beyond a reasonable doubt” and, in the alternative, posits that, as used in the jury instructions, “the term ‘sex organ’ is too vague and does not encompass nearly as much as the State argues,” which means that, “[u]nder the rule of lenity, a bare allegation that a defendant touched a victim’s pubic hair should not be seen as proof beyond a reasonable doubt that there was touching of the sex organ for purposes of the statute” in question. He acknowledges the State’s argument that the jury could infer from B.H.’s testimony and her CAC interview that the defendant touched her vagina but argues that “the evidence does not present such an inference, and the State did not present any other evidence that 18 would prove the predatory charge beyond a reasonable doubt.” He further argues that “this Court should hold the State to the manner in which it charged the crime, which required the State to prove that [the defendant] touched B.H.’s ‘vagina’—and not just her ‘sex organ’—beyond a reasonable doubt.” He posits that “[i]n order to do that, as shown by Illinois case law, the State was required to prove that [the defendant’s] finger made an intrusion into B.H.’s body.” ¶ 40 With regard to his second contention, the defendant argues that the trial judge “asked if the potential jurors accepted the [Zehr] principles without asking if they understood them.” (Emphases in original.) He contends that the evidence in this case was closely balanced and that, accordingly, reversal of the defendant’s convictions is required. He acknowledges that this purported error was not preserved in the trial court but asks this court to consider it under the first prong of the plain-error doctrine, described in more detail below. ¶ 41 The State responds to the defendant’s first contention of error by asserting, as it did in the trial court, that there was in fact sufficient evidence to convict the defendant of both charges and lays out some of that evidence in its brief on appeal. The State also notes that the defendant did not raise his “vagina” versus “sex organ” argument in the trial court and contends that, in any event, the State did not have to prove a “bodily intrusion” into B.H.’s vagina. The State argues that the jury was properly instructed that what was required to be proven to sustain count II was “an act of contact, however slight, between the sex organ of one person and the part of the body of another.” The State notes that the defendant did not challenge the jury instructions at trial or in his opening brief on appeal. The State further notes that, even if this court does not find the defendant’s “vagina” versus “sex organ” argument to be forfeited, it is without merit, because “the statutory term ‘sex organ’ is not ambiguous.” The State responds to the defendant’s second contention of error by conceding that the trial judge erred by failing to ask the potential jurors if they understood the Zehr principles but posits that the defendant is not entitled to invoke plain- 19 error review in this case because the defendant cannot meet his burden to “show that the evidence was so closely balanced that the error alone severely threatened to tip the scales of justice.” The State notes that, to determine this question, this court must conduct a qualitative, commonsense assessment of the totality of the evidence presented at trial. ¶ 42 In his reply brief, the defendant, inter alia, reiterates his arguments with regard to the sufficiency of the evidence, clarifies that he is not contesting the validity of the charging instrument or the propriety of the jury instructions, and presents argument for why he believes the evidence in this case was closely balanced and why, therefore, the trial judge’s Zehr principles error requires reversal and remand for a new trial. ¶ 43 We first note that we agree with the State that de novo review is not appropriate with regard to the first issue raised by the defendant in this case. As the State points out, in People v. Curry, 2018 IL App (1st) 152616, ¶ 16, our colleagues in the First District reiterated the well-established principle of law that de novo review applies only when the facts are not in dispute and the defendant’s guilt under the undisputed facts is a question of law. In this case, the fact of whether the defendant touched B.H.’s vagina is very much in dispute and has been since trial. Therefore, the defendant’s challenge on appeal is clearly a challenge to whether the evidence adduced at his trial was sufficient to support his conviction for count II. When a defendant challenges the sufficiency of the evidence used to convict that defendant, this court reviews the evidence presented at trial in the light most favorable to the prosecution to determine whether any rational trier of fact could have found beyond a reasonable doubt the essential elements of the crime or crimes of which the defendant was convicted. See, e.g., People v. Saxon, 374 Ill. App. 3d 409, 416-17 (2007). We will not reverse a criminal conviction unless the evidence presented at trial is so unreasonable, improbable, or unsatisfactory as to justify a reasonable doubt as to the guilt of the defendant. Id. at 416. We allow all reasonable inferences from the record in favor of the 20 prosecution, whether the evidence in the case is direct or circumstantial. Id. There is no requirement that this court disregard inferences that flow from the evidence or that this court search out all possible explanations consistent with innocence and raise them to a level of reasonable doubt. Id. We do not retry the defendant, instead leaving it to the trier of fact to judge the credibility of witnesses, resolve conflicts in the evidence, and draw conclusions based on all the evidence properly before the trier of fact. Id. As we undertake our review of the evidence under the above standard, we are mindful of the fact that it is axiomatic in Illinois that the testimony of a single witness, if positive and credible, is sufficient to sustain a criminal conviction, even if the testimony is disputed by the defendant. See, e.g., People v. Loferski, 235 Ill. App. 3d 675, 682 (1992). ¶ 44 In this case, as described above, the defendant challenges the sufficiency of the evidence used to convict him of count II. He does not challenge the sufficiency of the evidence used to convict him of count I. As also described above, count II alleged the offense of predatory criminal sexual assault of a child and specifically alleged that between March 8, 2019, and March 10, 2019, the defendant “knowingly committed an act of sexual contact with B.H., who was under 13 years of age when the act was committed, in that the [d]efendant touched the vagina of B.H. with his finger for the purpose of sexual arousal of the defendant.” The jury was instructed that, to find the defendant guilty of this count, the jury was required to conclude that the State had proven beyond a reasonable doubt that, inter alia, “the defendant knowingly committed an act of contact, however slight, between the sex organ of one person and the body part of another for the purposes of arousal of the defendant.” In closing argument, the State specifically argued that the jury should find that the defendant touched B.H.’s vagina, stating, “You can draw the inference that if you are playing with somebody’s pubic hair near the region she was pointing, he was making contact with her vagina. It’s perfectly plausible that happened.” 21 ¶ 45 On appeal, the defendant—while simultaneously claiming not to challenge the jury instructions or the charging instrument—makes much of the distinction between “sex organ” and “vagina” and claims that the State was required to prove some penetration, however slight, of B.H.’s vagina by the defendant’s finger. For the following reasons, we conclude that, even if we assume, arguendo, that the defendant is correct that the State was required to prove some penetration, however slight, of B.H.’s vagina by the defendant’s finger, the evidence adduced at trial was sufficient to sustain the defendant’s conviction for count II. ¶ 46 We begin our analysis of the defendant’s arguments on this issue by noting that they all are built upon the premise, repeated multiple times throughout his briefs on appeal, that “the evidence put forward by the State only suggests a touching of B.H.’s pubic hair.” We reject this premise, as it is factually incorrect. It is certainly true that in the CAC interview that was presented to the jury as substantive evidence, B.H. was asked to tell “where the touching was when you’re talking about your privates,” to describe more about when the defendant’s hand was in her underwear and “was touching the skin of [her] body,” and to answer Carr’s question, “Where did his hand go?” It is equally true that B.H. answered that she was beginning to get “a little bit” of pubic hair and that “when he was kind of like going down a little bit right here”—at which point she touched an area near her genitalia—the defendant “was kind of like * playing with” her pubic hair and “twisting it around on his finger.” ¶ 47 However, at no point did B.H. state that the defendant touched only her pubic hair. To the contrary, at the outset of the CAC interview, B.H. stated that the defendant climbed onto the hide-a-bed with her, put his arm around her “for a few minutes,” then began rubbing her stomach “up and down,” then stopped “for a minute,” then began rubbing her stomach again and squeezing it. She described the pajamas she was wearing as having an elastic band, and she stated that she felt “his hands kind of going down a little bit.” She stated that this happened a few times 22 and that, because she was scared, she tried to move away but could not move and “just froze there.” B.H. stated that “eventually” the defendant’s fingers moved inside her pants and that he “tried to go into [her] underwear,” at which point “he didn’t really touch [her] private that much, but he did a little bit.” ¶ 48 A rational jury, having heard both that the defendant “played with” B.H.’s pubic hair and that, when he “tried to go into [her] underwear,” he touched her “private * a little bit,” could have concluded beyond a reasonable doubt that both contacts occurred, perhaps within seconds of each other, and could have concluded beyond a reasonable doubt that the defendant’s touching of B.H.’s “private” constituted penetration, however slight, of her vagina. There is certainly nothing unreasonable, improbable, or unsatisfactory about B.H.’s statements or about that conclusion (see Saxon, 374 Ill. App. 3d at 416), as the conclusion is a reasonable inference from her statements (see id.). This is particularly true in light of B.H.’s other CAC interview statements and physical gesturing, described in detail above, in which she consistently used the word “private” to describe the area he touched and during which she gestured, multiple times, to an area of her body that a rational jury could have concluded was meant to encompass her vagina to an extent that penetration, however slight, could have occurred when the defendant touched her “private * a little bit.” ¶ 49 Such a conclusion by a rational jury also would not be inconsistent with B.H.’s gesturing and verbal statement later in the CAC interview when she was asked to tell Carr more about the defendant touching B.H.’s “privates.” B.H., who was still seated across from Carr, moved her right hand back and forth horizontally near the tops of her thighs, stating “he kind of just like went like halfway, not all the way.” She stated that “he didn’t really like go fully in my underwear, but he was, he kind of stopped halfway because I wouldn’t let him go farther.” She stated that she “locked [her] legs shut” but “couldn’t move” because she was frozen and scared. 23 She stated that the defendant tried to move her legs but that she did not let him. Having heard this and having heard B.H.’s clear and unequivocal statement that the defendant touched her “private * a little bit,” a rational jury could have concluded beyond a reasonable doubt—and without venturing into the realm of impermissible speculation—that, even if the defendant’s entire hand did not “go fully” into B.H.’s underwear, if it went, as B.H. stated, “halfway”— because B.H.’s locking of her legs stopped it from going farther—one or more of the defendant’s fingertips still could have penetrated B.H.’s vagina, depending upon the size, type, and position of her underwear, the relative position of his hand and fingers to her vagina, and the angle at which the defendant was attempting to enter her underwear. This is particularly true in light of B.H.’s statement that the defendant tried to “move” her underwear at one point as well. ¶ 50 Likewise, although B.H. agreed with Carr’s statement that the defendant’s hand was “further down” on her “privates” when it was over her clothes than when it was underneath, this was in no way inconsistent with slight penetration of her vagina occurring when part of the defendant’s hand was inside of B.H.’s underwear and touching her “private * a little bit.” In sum, there was nothing inconsistent between any of B.H.’s later statements and gestures and her earlier statement—which we reiterate was clear and unequivocal—that the defendant touched her “private * a little bit.” Moreover, as explained above, when this court reviews a challenge to the sufficiency of the evidence, we allow all reasonable inferences from the record in favor of the prosecution, whether the evidence in the case is direct or circumstantial, and we remain mindful of the fact that there is no requirement that we disregard inferences that flow from the evidence, or that we search out all possible explanations consistent with innocence and raise them to a level of reasonable doubt. See id. ¶ 51 In addition, we reject the defendant’s argument that B.H.’s statements should be viewed with some skepticism because the CAC interview did not occur until approximately two weeks 24 after the incident in question. It is clear from viewing the CAC interview that B.H. had a detailed, consistently described memory of the incident, and we do not believe that two weeks is such a long period of time as to inherently distort B.H.’s memory and render her statements suspect or unreliable. We note as well that, as described above, after Carr gave B.H. some background information about the CAC interview room, she ensured that B.H. understood that, if she did not know the answer to a question or did not remember, she should tell that to Carr and that B.H. should only talk about things that B.H. knew “are true and really happened.” Carr also told B.H. that, if Carr got “something wrong,” B.H. should correct her. For all of the foregoing reasons, we conclude there was sufficient evidence for a rational jury to find the defendant guilty, beyond a reasonable doubt, of count II. ¶ 52 Having concluded that the defendant’s first argument on appeal fails, we turn to his second argument: whether the trial judge’s purported Zehr principles error requires reversal and remand for a new trial. As noted above, the four Zehr principles are that a defendant (1) is presumed innocent of the charge(s) against him or her, (2) is not required to offer any evidence on his or her own behalf, (3) must be proved guilty beyond a reasonable doubt, and (4) may not have his or her failure to testify held against him or her. See People v. Zehr, 103 Ill. 2d 472, 477 (1984). A trial judge must ensure that each prospective juror both understands and accepts each of the four principles. See, e.g., People v. Olla, 2018 IL App (2d) 160118, ¶ 29. It is error for a trial judge “to ask the prospective * jurors whether they agree with the principles but fail to also ask whether they understand them.” Id. Thus, as the defendant alleges in this case and as the State agrees, there was error because, as described above, the trial judge asked each potential juror if that juror heard the four principles, agreed with them, and accepted them to be true, but he did not ask any of the potential jurors if they understood the four principles. 25 ¶ 53 Because the defendant did not object at trial to this error, we must determine whether he is entitled to relief under the plain-error doctrine. Id. ¶ 27. For purposes of a Zehr principles error, plain-error review is available in two general circumstances: where the error produced a biased jury or where the evidence of guilt was closely balanced. Id. ¶ 31. Here, the defendant argues for the latter circumstance, contending that the evidence of guilt was closely balanced. He does not argue that the error produced a biased jury. Accordingly, to be entitled to relief in this case, the defendant bears the burden of persuasion to demonstrate that the evidence adduced at trial “was so closely balanced [that] the error alone severely threatened to tip the scales of justice” against the defendant. People v. Sebby, 2017 IL 119445, ¶ 51. To determine if the evidence meets the standard of being this closely balanced, this court evaluates the totality of the evidence and conducts a qualitative, commonsense assessment of it within the context of the case. Olla, 2018 IL App (2d) 160118, ¶ 32. This requires us to assess the evidence with regard to the elements of the charged offense or offenses, along with any evidence regarding the credibility of the witnesses. Id. If the outcome of a case depends on a choice between two versions of facts that both are credible, the evidence may be deemed to be closely balanced. Id. ¶ 34. This also may be true “when witnesses for the State and witnesses for the defense gave plausible opposing versions of the events, neither of which was corroborated by extrinsic evidence.” Id. Courts must be careful not to brand the testimony of the defendant’s witnesses as less plausible merely because those witnesses were relatives or friends of the defendant and might be biased. Id. ¶ 54 On the other hand, evidence is not closely balanced, and there is no “ ‘credibility contest,’ ” if one party’s version of the facts is implausible or if one party’s version of the facts is corroborated by other evidence. Id. ¶ 35. In the context of cases, such as this one, that involve charges and convictions for offenses such as predatory criminal sexual assault of a child and aggravated criminal sexual abuse, a commonsense assessment of the evidence may include 26 examining whether (1) the victim had a motive to lie, (2) other evidence exists to explain the victim’s knowledge of sexual acts, and (3) the defendant’s own statements or testimony corroborate some or all of the allegations. Id. ¶¶ 36-37. There is no requirement that the evidence must be overwhelming for it to be considered not closely balanced for purposes of plain-error review. Id. ¶ 38. ¶ 55 Accordingly, we now evaluate the totality of the evidence presented at trial and conduct a qualitative, commonsense assessment of it within the context of this case. See id. ¶ 32. As described above, B.H.’s CAC interview statements and testimony at trial presented a clear and consistent version of what happened on Saturday morning on the hide-a-bed, and also as described in detail above, the CAC statements—which were both credible and plausible—were sufficient to prove beyond a reasonable doubt the elements of the offenses with which the defendant was charged. See id. There is nothing in the record on appeal—at all—that suggests that B.H. had a motive to lie about what happened (see id. ¶¶ 36-37) or that suggests that at the time of the incident she was anything other than a normal 11-year-old, sixth-grade girl. Indeed, in his statement to McFarland and Douthit, even the defendant stated that he did not believe B.H. would “make this up.” With regard to whether other evidence exists to explain the victim’s knowledge of sexual acts (see id.), we do not believe this factor is relevant in this case, because B.H.’s account of what happened did not involve recounting knowledge of explicit sexual acts that a girl of her age would be unlikely to know and the words that she did use to describe the touching that occurred—such as “privates” and “pubic hair”—were age-appropriate. With regard to whether the defendant’s own statements or testimony corroborate some or all of the allegations (see id.), we discuss this factor in detail below. ¶ 56 With regard to other aspects of the State’s evidence, we agree with the State that Betsy’s testimony about B.H.’s withdrawn and sullen behavior after the sleepover, as well as Betsy’s 27 testimony about what she observed during B.H.’s phone call with B.H.’s grandmother in Colorado, corroborates to some extent the State’s theory that B.H. was sexually assaulted by the defendant at the sleepover. Although the defendant contends that B.H.’s request to spend an additional night at the defendant’s house calls into question B.H.’s contention that an assault occurred, B.H. explained this in her CAC interview, stating that she “was kind of scared to go home” because she “didn’t really want to talk about” what had happened, so she stayed another night at Kyleigh’s house, which she stated she also did because she “really didn’t know what to do” and “was just scared.” This was completely consistent with B.H.’s many other assertions, during the CAC interview, that she was very scared and uncomfortable during the assault and was consistent with the testimony of Kyleigh and Reagan that on Sunday, B.H. was crying because she did not want to go home. It was also completely consistent with B.H.’s explanation, during the CAC interview, that she was uncomfortable discussing things like puberty with Betsy, which is why she called her grandmother in Colorado and asked her to tell Betsy what happened, rather than B.H. telling Betsy. ¶ 57 Having concluded that B.H.’s testimony and statements in this case were both credible and plausible and were corroborated to some extent by Betsy’s testimony about B.H.’s post-sleepover behavior, we must determine whether the defendant and his witnesses at trial also presented a credible and plausible version of events, and whether, therefore, the evidence in this case was closely balanced. See id. ¶ 34. As we consider the evidence put forward by the defendant at trial, we are mindful of the fact, explained above, that courts must be careful not to brand the testimony of the defendant’s witnesses as less plausible merely because those witnesses were relatives or friends of the defendant and might be biased. See id. In this case, however, with regard to the testimony of the defendant’s stepdaughters, Kyleigh and Reagan, there is no need for this court to assess their credibility or the plausibility of their testimony, because both witnesses testified 28 that they did not remember much about the sleepover and both testified that they did not see the defendant touch B.H. at all—in fact, as explained above, at no point did Kyleigh or Reagan testify to any physical contact, whether accidental, incidental, or purposeful, between the defendant and B.H.—whereas the defendant stated to the police that some innocent, inadvertent touching may have occurred, either when (1) he “wrestled” playfully with B.H., (2) he “hugged” B.H., (3) he lay in the hide-a-bed with her in the morning, or (4) the scary movie was on during the evening, but that any touching that happened during these times was not of a sexual nature. ¶ 58 Thus, the testimony of the defendant’s two witnesses—which we reiterate was the only evidence the defendant presented—does not corroborate the defendant’s version of the facts with regard to the key issues that were determinative of whether the defendant was guilty of the charged offenses, as stated in the indictment and as argued by the State at trial: whether, for count I, he “knowingly touched the breast of B.H. with his hand for the purpose of sexual arousal of the defendant” and whether, for count II, he “knowingly * touched the vagina of B.H. with his finger for the purpose of sexual arousal of the defendant.” Indeed, Kyleigh’s testimony and Reagan’s testimony to some extent contradict the defendant’s version of the events in question, because Kyleigh testified that she did not think the defendant ever got into the hide-a-bed with her and B.H., whereas the defendant freely admitted that he did get into the hide-a-bed with the girls, both on Saturday morning and on Sunday morning, and while watching the scary movie on Saturday night. Reagan testified that she did not see the defendant on the hide-a-bed on Saturday morning. We therefore conclude that the evidence put forward by the defendant at trial is of little probative value when considering whether the evidence that the defendant committed the offenses was closely balanced for purposes of plain-error review, because it certainly cannot be said to corroborate the defendant’s version of the events, as ascertained by the jury when it viewed the defendant’s statement to McFarland and Douthit. 29 ¶ 59 We return, therefore, to the question of whether the defendant’s own statements or testimony corroborate some or all of the allegations against him. See id. ¶¶ 36-37. On appeal, the defendant contends that, for purposes of plain-error review, “the evidence at trial simply came down to B.H.’s accusations and [the defendant’s] recorded statements” and posits that his recorded statement “presents a counter to B.H.’s testimony, and demonstrates that, at the very least, this was a credibility contest, so the case is necessarily closely balanced.” The State, however, is correct that the defendant’s recorded statement in fact corroborates the allegations against him in multiple ways, such as the fact that B.H. slept over the entire weekend, the sleeping arrangements, and the fact that the defendant was in the hide-a-bed with B.H. and Kyleigh on Saturday morning. ¶ 60 The State is also correct that the defendant’s initial denial that he hugged B.H. on Saturday morning—and his focus instead on the events he alleged occurred while they were watching a scary movie on Saturday night—could be construed as an attempt to deflect the officers’ attention away from Saturday morning, which the defendant knew was when the assault in question actually occurred. This, in turn, could be construed as a further corroboration of B.H.’s statement that the assault took place as she claimed on Saturday morning. Notably, no other witness provided a statement or testimony that corroborated the defendant’s contention that B.H. held onto the defendant’s hand and arm and pulled them onto parts of her body as the group watched a scary movie together on Saturday night, which further calls into question the defendant’s credibility and all of his statements about what happened on the weekend in question. Likewise, although the defendant claimed that he “wrestled” around with B.H. on the bed in an innocent manner on Friday night—a claim the defendant made after Douthit told the defendant that it was “very clear” from talking to B.H. and others that touching occurred on the bed—no other witness corroborated the defendant’s claim, and in fact the testimony of both Kyleigh and Reagan, 30 discussed in detail above, calls the defendant’s claim into question. This too diminishes the credibility of the defendant and the plausibility of his explanations of innocent contact with B.H., which in turn leads to the reasonable inference that his uncorroborated assertions of playful, innocent, or inadvertent contact with B.H. were nothing more than fabrications to attempt to explain away the presence of any physical evidence, such as DNA, the police might uncover. ¶ 61 Indeed, we agree with the State that the defendant’s “evolving story about the physical touching significantly diminished his credibility,” and we conclude that it ultimately rendered his version of events to be not plausible. As McFarland and Douthit repeatedly stated that they believed B.H. was credible and repeatedly stated that they believed the defendant’s DNA would be found on B.H.’s underwear, the defendant adapted his story multiple times and in multiple ways, including shifting his narrative so that he did hug B.H. on the hide-a-bed on both Saturday and Sunday, rather than hugging her only on Sunday as he first claimed, all apparently in an effort to provide a potentially innocent explanation for the presence of his DNA on B.H.’s underwear, were it to be found there. Common sense dictates that there is no rational explanation for why the defendant would believe his DNA might be found on B.H.’s underwear other than that he knew more touching had occurred than he initially admitted had occurred. As the State notes, the defendant went from denying any contact—even innocent or inadvertent contact— occurred, to stating that touching might have occurred but that, if it did, it was innocent, accidental contact of a nonsexual nature. By the end of his interview, the defendant was stating that “accidental” touching of B.H.’s stomach, chest, buttocks, and/or the area near her vagina could have occurred. These are, of course, the very areas that B.H. alleged the defendant touched—intentionally and repeatedly—as he proceeded with his assault of her on that Saturday morning. 31 ¶ 62 As explained above, evidence is not closely balanced, and there is no “ ‘credibility contest’ ” if one party’s version of the facts is implausible or if one party’s version of the facts is corroborated by other evidence. See id. ¶ 35. Our qualitative, commonsense assessment of the evidence in this case demonstrates, for the reasons explained above, both that the defendant’s changing explanations regarding his physical contact with B.H. were not credible, plausible, or corroborated and that B.H.’s version of the facts was credible, plausible, and corroborated—at least to some extent—by other evidence presented at trial. Accordingly, we conclude that the defendant has not met his burden of persuasion to demonstrate that the evidence adduced at trial “was so closely balanced [that] the [Zehr principles] error alone severely threatened to tip the scales of justice” against the defendant. Sebby, 2017 IL 119445, ¶ 51. For that reason, he is not entitled to reversal and remand for a new trial on the basis of the trial judge’s Zehr principles error. See, e.g., Olla, 2018 IL App (2d) 160118, ¶ 27. ¶ 63 III. CONCLUSION ¶ 64 For the foregoing reasons, we affirm the defendant’s convictions, as well as his unchallenged sentences. ¶ 65 Affirmed. 32 People v. Rowlands, 2022 IL App (5th) 200221 Decision Under Review: Appeal from the Circuit Court of Effingham County, No. 19- CF-137; the Hon. Allan F. Lolie, Judge, presiding. Attorneys James E. Chadd, Ellen J. Curry, and Christopher Sielaff, of State for Appellate Defender’s Office, of Mt. Vernon, for appellant. Appellant: Attorneys Bryan M. Kibler, State’s Attorney, of Effingham (Patrick for Delfino, Patrick D. Daly, and Timothy D. Berkley, of State’s Appellee: Attorneys Appellate Prosecutor’s Office, of counsel), for the People. 33	01-04-2023	11-14-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483707/	UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA RANCHO VISTA DEL MAR, Plaintiff, v. No. 22-cv-141 (DLF) UNITED STATES OF AMERICA et al., Defendants. MEMORANDUM OPINION Rancho Vista del Mar, a corporation that owns nearly 500 acres of land adjacent to the Mexican border in San Diego County, brings this suit against the United States, the Department of Homeland Security (DHS) and its Secretary, and the Chief Patrol Agent for the San Diego Sector of Customs and Border Protection (CBP). See Compl. ¶¶ 1–5, Dkt. 1. Rancho Vista alleges that the government’s decision “to terminate the construction contracts and abandon work on the partially finished border fence” adjacent to Rancho Vista’s property violated the Administrative Procedure Act, the National Environmental Policy Act, and the Endangered Species Act. Id. at 1; see also id. ¶¶ 16, 17, 21. Before the Court is the defendants’ Motion to Dismiss, Dkt. 12. For the reasons that follow, the Court will grant the motion. I. BACKGROUND A. Statutory Framework The APA permits judicial review of “final agency action” unless it “is committed to agency discretion by law” or a “statute preclude[s] judicial review.” 5 U.S.C. §§ 701(a), 704. It empowers the Court to “hold unlawful and set aside” agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Id. § 706(2)(A). In an arbitrary and capricious challenge, the core question is whether the agency’s decision was “the product of reasoned decisionmaking.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 52 (1983). The National Environmental Policy Act (NEPA) “establishes procedural requirements to ensure that the government gives ‘appropriate consideration’ to environmental impacts before undertaking major actions.” Gulf Restoration Network v. Haaland, 47 F.4th 795, 798 (D.C. Cir. 2022) (quoting 42 U.S.C. § 4332(2)(B)–(C)). Among other things, it requires the agency “to take a ‘hard look’ at the reasonably foreseeable impacts of a proposed major federal action” and to “consider alternatives to the proposed action.” Id. (quotation marks omitted). The agency must prepare and publish an environmental impact statement to that effect. See 42 U.S.C. § 4332(C); Friends of Cap. Crescent Trail v. Fed. Transit Admin., 877 F.3d 1051, 1055 (D.C. Cir. 2017). The statute is a procedural one, “designed to ensure fully informed and well-considered decision[s] by federal agencies,” and it “does not mandate particular results.” Del. Riverkeeper Network v. FERC, 753 F.3d 1304, 1309–10 (D.C. Cir. 2014) (quotation marks omitted). The Endangered Species Act (ESA) likewise imposes requirements on federal agencies before taking certain actions. See 16 U.S.C. § 1531 et seq. For instance, “[i]f an agency concludes that its action ‘may affect’ a listed species or critical habitat, then the agency must pursue either formal or informal consultation with the [National Marine Fisheries Service] or Fish and Wildlife [Service].” Ctr. for Biological Diversity v. Dep’t of Interior, 563 F.3d 466, 474–75 (D.C. Cir. 2009) (citing 16 U.S.C. § 1536(a)(2); 50 C.F.R. §§ 402.13, 402. 14). “If the agency determines that its action will not affect any listed species or critical habitat, however, then it is not required to consult with [National Marine Fisheries] or Fish and Wildlife.” Id. at 475. 2 B. Factual Background 1 In February 2019, former President Trump declared a national emergency requiring the use of armed forces at the southern border of the United States. Pres. Proc. No. 9844, 84 Fed. Reg. 4949 (Feb. 15, 2019). In that proclamation, the President “invoked and made available” to the Secretary of Defense a statutory authority applicable during national emergencies requiring armed forces. Id. (citing 10 U.S.C. § 2808). That statute, in turn, allows “the Secretary of Defense, without regard to any other provision of law,” to “undertake military construction projects” necessary to help address the emergency. 10 U.S.C. § 2808(a). Invoking § 2808 authority, the Secretary of Defense then “determined that 11 military construction projects along the international border with Mexico” were “necessary to support the use of the armed forces in connection with the national emergency.” Memorandum from Mark Esper, Secretary of Defense, to Secretaries of the Military Departments, et al., Guidance for Undertaking Military Construction Projects Pursuant to Section 2808 of Title 10, U.S. Code (Sept. 3, 2019) at 1, Defs.’ Mot. Ex. A, Dkt. 12-1 (Sec’y of Def. Mem.). One of those projects was “San 1 The Court accepts the facts alleged in the complaint “as true and draw[s] all reasonable inferences from those allegations” in Rancho Vista’s favor. Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1129 (D.C. Cir. 2015). The Court also considers materials attached to the complaint, documents incorporated by reference, and judicially noticeable materials, including government records. See EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997); Kaempe v. Myers, 367 F.3d 958, 965 (D.C. Cir. 2004) (holding that public records, including agency documents, are “subject to judicial notice on a motion to dismiss”); see also Democracy Forward Found. v. White House Off. of Am. Innovation, 356 F. Supp. 3d 61, 63 n.2 (D.D.C. 2019) (explaining that “judicial notice may be taken of government documents available from reliable sources,” including an executive memorandum); Pharm. Research & Mfrs. of Am. v. Dep’t of Health & Human Servs., 43 F. Supp. 3d 28, 33 (D.D.C. 2014) (“Courts in this jurisdiction have frequently taken judicial notice of information posted on official public websites of government agencies.”); Herron v. Fannie Mae, No. 10-cv-943, 2012 WL 13042852, at 1–2 (D.D.C. Mar. 28, 2012) (“[P]ublic records of federal agencies are a proper subject of judicial notice.”). 3 Diego Project 4,” which planned for the Secretary of the Army to construct 1.5 miles of border fence in the Otay Mesa area of California. See id., Attach. The Department of Defense (DOD) sought a strip of land owned by Rancho Vista on which to build that fence. Compl. ¶ 9. On March 21, 2019, Rancho Vista deeded approximately seventeen acres to the United States, while retaining nearly 500 adjacent acres. Id. ¶¶ 8–9. About a year later, in March 2020, DOD began San Diego Project 4. 2 Id. ¶ 10. The Secretary authorized construction to begin “without regard to” the NEPA or the ESA. Sec’y of Def. Mem. at 1. Over the next several months, government contractors extensively graded and excavated the land, poured concrete foundations, installed steel bollards, and completed portions of the fence. Compl. ¶¶ 10–11. After taking office, President Biden terminated the national emergency at the southern border. Id. ¶ 12 (citing Pres. Proc. No. 10142, 86 Fed. Reg. 7225 (Jan. 20, 2021)). The President declared that “the authorities invoked in [the February 2019] proclamation will no longer be used to construct a wall at the southern border.” Pres. Proc. No. 10142. He directed the DOD and DHS Secretaries to “pause work on each construction project on the southern border wall, to the extent permitted by law, as soon as possible but in no case later than seven days from the date of this proclamation.” Id. § 1(a)(i). Following President Biden’s declaration, DOD immediately directed “all border barrier military construction projects” authorized by § 2808’s emergency authority to be “pause[d],” no new contracts awarded, and no new expenses incurred. Memorandum from David Norquist, 2 Rancho Vista’s complaint alleges that the defendants—which include the United States, DHS, and CBP (a component of DHS)—were responsible for constructing this portion of fence. See, e.g., id. ¶ 10. The Court takes judicial notice of the fact that this portion of fence was being constructed by DOD, not DHS or CBP. See Sec’y of Def. Mem., Attach. 4 Deputy Secretary of Defense, to Chairman of the Joint Chiefs of Staff, et al., Department of Defense Actions Regarding the Proclamation of January 20, 2021 (Jan. 23, 2021) at 2, Defs.’ Mot. Ex. B, Dkt. 12-2 (First Deputy Sec’y of Def. Mem.). The Deputy Secretary subsequently instructed the Secretary of the Army to “take immediate action to . . . cancel all section 2808 border barrier construction projects” on April 30, 2021. Memorandum from Kathleen Hicks, Deputy Secretary of Defense, to Secretary of the Army, et al., Department of Defense Actions Implementing Presidential Proclamation 10142 (Apr. 30, 2021) at 1, Defs.’ Mot. Ex. C, Dkt. 12- 3 (Second Deputy Sec’y of Def. Mem.). This included all of the eleven projects laid out in the earlier memorandum, including San Diego Project 4. See First Deputy Sec’y of Def. Mem. at 2. Accordingly, government contractors were instructed to cease all work on the portion of the border fence next to Rancho Vista’s property. Compl. ¶ 13. At that point, though portions of the fence were already erected, a 700-foot gap remained. Id. ¶ 11. The contractors left the site uncleaned, partially excavated, and with both installed and uninstalled materials left behind. Id. According to Rancho Vista, the abandonment of the construction site “has caused erosion, desedimentation, destruction of habitat, and threatened the continued existence of endangered species on and near Rancho Vista’s property,” id. ¶ 15, part of which is designated as critical habitat for several endangered species, id. ¶ 1. In addition, because several miles of fence were constructed on either end, the 700-foot gap continuously “channels illegal immigrants crossing the border from Mexico” directly onto Rancho Vista’s property. Id. ¶ 13. C. Procedural History Rancho Vista brought suit on January 20, 2022. It first alleges that the government’s decision to order contractors to stop all work on the fence bordering Rancho Vista’s property was arbitrary, capricious, and contrary to law, in violation of the Administrative Procedure Act (APA). 5 Id. ¶ 16. It also claims that the government abandoned the site without following the procedures required by the NEPA and the ESA. Id. ¶¶ 19, 25. Rancho Vista asks the Court to hold unlawful and set aside the government’s decision to cease all construction on the fence bordering its property, id. at 9, and to order the government to finish and clean up the construction site, id. at 10. The government moved to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure on the ground that Rancho Vista lacks Article III standing. See Defs.’ Mot. at 12–17, 26–31. It alternatively moved to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted under any of the three statutes. See id. at 17–26. II. LEGAL STANDARDS Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a defendant to move to dismiss an action for lack of subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Federal law empowers federal district courts to hear only certain kinds of cases, and it is “presumed that a cause lies outside this limited jurisdiction.” Kokkonen v. Guardian Life Ins., 511 U.S. 375, 377 (1994). When deciding a Rule 12(b)(1) motion, the court must “assume the truth of all material factual allegations in the complaint and construe the complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the facts alleged, and upon such facts determine [the] jurisdictional questions.” Am. Nat. Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (quotation marks and citations omitted). But the court “may undertake an independent investigation” that examines “facts developed in the record beyond the complaint” to “assure itself of its own subject matter jurisdiction.” Settles v. U.S. Parole Comm’n, 429 F.3d 1098, 1107 (D.C. Cir. 2005) (quotation marks omitted). A court that lacks jurisdiction must dismiss the action. Fed. R. Civ. P. 12(b)(1), (h)(3). 6 Rule 12(b)(6) allows a defendant to move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). To survive a Rule 12(b)(6) motion, a complaint must contain factual matter sufficient to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A plaintiff’s well-pleaded factual allegations are “entitled to [an] assumption of truth.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). And the court construes the complaint “in favor of the plaintiff, who must be granted the benefit of all inferences that can be derived from the facts alleged.” Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012) (quotation marks omitted). A Rule 12(b)(6) dismissal “is a resolution on the merits and is ordinarily prejudicial.” Okusami v. Psychiatric Inst. of Wash., Inc., 959 F.2d 1062, 1066 (D.C. Cir. 1992). III. ANALYSIS A. Article III Standing Article III of the Constitution limits the “judicial Power” of federal courts to “Cases” and “Controversies.” U.S. Const. art. III, § 2, cl. 1. “[T]here is no justiciable case or controversy unless the plaintiff has standing.” West v. Lynch, 845 F.3d 1228, 1230 (D.C. Cir. 2017). As the Supreme Court has interpreted this requirement, “the irreducible constitutional minimum of standing contains three elements”: (1) the plaintiff must have suffered an “injury in fact” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical”; (2) there must exist “a causal connection between the injury and the conduct complained of”; and (3) it must be “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992) (quotation marks omitted). “The burden of establishing these elements falls on the party invoking federal jurisdiction, and at the pleading stage, a plaintiff must allege facts demonstrating each element.” Friends of Animals v. Jewell, 828 7 F.3d 989, 992 (D.C. Cir. 2016). The plaintiff “must demonstrate standing separately for each form of relief sought.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 185 (2000). As to the first requirement, Rancho Vita has alleged a sufficient injury-in-fact. Rancho Vista alleges that the land “on and near [its] property” has been “le[ft] open to environmental destruction,” including through “erosion, desedimentation, destruction of habitat, and [a] threat [to] the continued existence of endangered species.” Compl. ¶¶ 13, 15. In addition, it alleges that “hundreds” of “undocumented immigrants” each night “pass through the gap . . . in the fence[] and stream across Rancho Vista’s property,” also fueling the environmental destruction. Id. ¶ 13. These injuries are concrete, particular to Rancho Vista, and “actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560–61; see also Tex. Gen. Land Off. v. Biden, No. 7:21-cv- 000420, 2022 WL 3086333, at 3–4 (S.D. Tex. Aug. 3, 2022) (concluding that a landowner adjacent to the border had standing to challenge border wall gaps based on similar injuries). Contrary to the government’s assertion, these injuries-in-fact suffice to sustain Rancho Vista’s ESA claim. See Defs.’ Mot. at 26. It is true that “[t]he relevant showing for Article III standing . . . is not injury to the environment but injury to the plaintiff.” Laidlaw, 528 U.S. at 169. But this does not impose a higher standard for ESA injury than other contexts; it simply means that general allegations of remote environmental threats are not sufficiently particular or imminent to confer standing. See Lujan, 504 U.S. at 563–67 (no standing for ESA claim where plaintiffs had no “concrete plans” to visit threatened areas); Pub. Emps. for Env’t Resp. v. Bernhardt, No. 18-cv-1547, 2020 WL 601783, at 6 (D.D.C. Feb. 7, 2020) (no standing for ESA claim where plaintiffs alleged “interest only in [a region] generally, without identifying portions of [it] that they use . . . designated as critical habitat”). That is not the case here, as Rancho Vista owns the critical 8 habitat allegedly being destroyed. Compl. ¶¶ 1, 25; Mass. Coal. For Immigration Reform v. DHS, No. 1:20-cv-3438, 2022 WL 3277349, at 4–5 (D.D.C. Aug. 11, 2022) (standing for NEPA challenge to halted border wall where plaintiff alleged that “trespassers on and around his land” near the southern border “impaired his enjoyment” of and “harmed his ranch and the surrounding environment”); cf. Otay Mesa Prop., L.P. v. Dep’t of Interior, 144 F. Supp. 3d 35, 57–58 (D.D.C. 2015) (Jackson, J.) (holding that Rancho Vista had injury-in-fact to challenge designation of its property as critical habitat). The second standing requirement, traceability, is not contested. Crediting Rancho Vista’s injury as true, that injury was caused by DOD abandoning its ongoing construction of the San Diego Project 4 fence near Rancho Vista’s land. 3 Compl. ¶¶ 13, 15. Furthermore, the continuing injury is also traceable to the government’s subsequent decisions not to clean up the construction site or close the fence gap. See id. ¶ 16. The government does challenge Rancho Vista’s standing on the third prong: redressability. “Redressability examines whether the relief sought, assuming that the court chooses to grant it, will likely alleviate the particularized injury alleged by the plaintiff.” Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 663–64 (D.C. Cir. 1996) (footnote omitted). Rancho Vista seeks two substantive forms of relief: (1) “an order holding unlawful and setting aside [the government’s] decision to cease all work on the border fence segment adjacent to Rancho Vista’s property,” and (2) “an order requiring [the government] to secure and finish the site in a workmanlike manner.” 3 The Court notes that DOD was not named specifically as a defendant, but this poses no traceability issue. The injury is traceable at least to the United States government generally— which is named as a defendant, as is allowed for APA challenges to agency action. See 5 U.S.C. § 703 (APA actions “may be brought against the United States”). 9 Compl. at 9–10, Prayer for Relief ¶¶ 1–2. 4 The requested relief, if granted, would likely redress Rancho Vista’s alleged injury. Rancho Vista states that the ongoing environmental destruction and immigrant foot traffic stem from the unfinished construction site; it follows that vacating the government’s decision to halt the project and/or ordering it to finish would alleviate that harm. The government’s objections to each form of relief are both unavailing. First, the government claims that ordering it to complete construction would be beyond the Court’s power. Defs.’ Mot. at 14 n.6. “But the redressability prong of the standing test is not an inquiry into the scope of the court’s power to grant relief” and “does not ask whether it is likely that the court’s determination would provide the ultimate relief sought.” In re Thornburgh, 869 F.2d 1503, 1511 (D.C. Cir. 1989) (quotation marks omitted). “Rather, the test assumes that a decision on the merits would be favorable and that the requested relief would be granted; it then goes on to ask whether that relief would be likely to redress the party’s injury.” Id. (emphasis omitted). Therefore, as in Thornburgh, the Court will “examine below the [government’s] assertion that no relief is available in this case; [it] decline[s], however, to conduct that analysis under the rubric of standing doctrine.” Id. Second, the government argues that a vacate-and-remand order will not redress Rancho Vista’s injuries because DOD is incapable of making a different decision on remand, since President Biden’s declaration terminated its § 2808 construction authority. Defs.’ Mot. at 14. But this argument requires the Court to assume that Rancho Vista will lose on the merits. Rancho Vista asserts that the agencies could finish construction under exceptions to the presidential declaration or other statutory authorities, and not doing so was arbitrary and capricious. Which 4 Rancho Vista also seeks attorneys’ fees and costs, id. ¶ 3, and any other relief the Court deems just, id. ¶ 4. 10 party has the better argument is again an analysis for the merits phase. At this point, the Court must “assume that on the merits the plaintiffs would be successful in their claims.” City of Waukesha v. EPA, 320 F.3d 228, 235 (D.C. Cir. 2003) (“[I]n reviewing the standing question, the court must be careful not to decide the questions on the merits for or against the plaintiff.”). And assuming Rancho Vista is right that it was arbitrary and capricious for the government to leave the construction site unfinished, then vacating and remanding that decision could redress Rancho Vista’s injuries. 5 Since Rancho Vista has “clear[ed] th[e] comparatively low bar” to plausibly allege standing at the motion to dismiss phase, Mass. Coal., 2022 WL 3277349, at 6, the Court turns to the merits of its claims. B. APA Claim In an arbitrary and capricious challenge, the Court “is not to substitute its judgment for that of the agency,” and it “must consider whether the [agency’s] decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” State Farm, 463 U.S. at 43 (quotation marks omitted). An agency action is arbitrary and capricious if “the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before [it], or [the explanation] is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Id. “The party challenging an agency’s action as arbitrary and capricious bears the burden of proof.” Pierce v. SEC, 786 F.3d 1027, 1035 (D.C. Cir. 2015). 5 Though the parties do not address the redressability of Rancho Vista’s procedural injuries under the ESA or the NEPA, any doubt may be put to rest, for “the plaintiff in a procedural-injury case is relieved of having to show that proper procedures would have caused the agency to take a different action.” Hawkins v. Haaland, 991 F.3d 216, 225 (D.C. Cir. 2021) (cleaned up). 11 Rancho Vista claims that the government’s decision to halt construction on the fence near its property and to “leave th[e] site in its unfinished condition” was arbitrary and capricious. Compl. ¶ 16. That contention lacks merit. The agency responsible for that decision followed an unambiguous statutory and executive command, and thus its actions cannot be considered arbitrary or capricious. 6 Although the complaint obscures this fact, DOD constructed the portion of the border fence adjacent to Rancho Vista’s property as part of San Diego Project 4. Sec’y of Def. Mem., Attach. That project was explicitly premised on DOD’s § 2808 emergency construction authority. Id. at 1. By that statute’s very terms, such authority is only available during “the declaration by the President of a national emergency.” 10 U.S.C. § 2808(a). The decision to end a national emergency belongs to the president, not an agency. And when the emergency ends, § 2808 leaves no room for agency discretion, nor does it specify any factors that the Secretary must consider in deciding whether to terminate a construction project. Cf. State Farm, 463 U.S. at 43 (explaining that an agency decision that fails to consider “relevant factors” or “has relied on factors which Congress has not intended it to consider” may be arbitrary and capricious). Rather, § 2808 simply provides that the emergency construction authority “shall terminate” at the end of the emergency. 10 U.S.C. § 2808(f). 6 The parties disagree about the legal standard relevant to this claim, with the government claiming that Rancho Vista cannot bring a “freestanding” APA claim untethered to substantive guideposts, Defs.’ Mot. at 17–18, and Rancho Vista responding that its APA claim is based on the Fifth Amendment Takings Clause, Pl.’s Resp. at 16–17, Dkt. 15. Neither approach is appropriate. First, the APA claim is not “freestanding,” as can be analyzed in relation to § 2808 and other statutes relevant to border fence construction. And second, Rancho Vista did not plead a takings claim in its complaint, so the Court will not consider it now either under the APA or Rancho Vista’s non- statutory theory, see Pl.’s Resp. at 18–21. 12 In this case, when DOD halted its § 2808 border fence projects—including the portion adjacent to Rancho Vista’s land—it explained that it no longer had authority to continue them. See First Deputy Sec’y of Def. Mem. at 1–2 (explaining that “the President terminated the national emergency with respect to the southern border . . . and the authorities based on that emergency,” and so the “Army Corps of Engineers [shall] take immediate action to pause work on all border barrier military construction projects authorized by [§] 2808”). That decision tracked § 2808(f)’s command. Accordingly, it was not arbitrary or capricious. Rancho Vista does not challenge the President’s decision to end the national emergency. Nor does it dispute that the President’s decision terminated DOD’s § 2808 authority to continue San Diego Project 4. See Pl.’s Resp. at 1, 6. It claims to challenge instead the Army Corps of Engineers’ May 1, 2021 order directing federal contractors to “stop all work” on San Diego Project 4. See id. (citing Letter from CJW Joint Venture to Rancho Vista del Mar (May 28, 2021), id. Ex. 2). But this distinction is one without a difference. The Army Corps of Engineers’ order came a single day after the Deputy Secretary ordered all § 2808 border construction projects immediately canceled—explicitly because “the termination of the national emergency with respect to the southern border in Proclamation 10142 made the authority provided in section 2808 no longer available.” Second Deputy Sec’y of Def. Mem. at 1. That the Army Corps of Engineers’ order was issued three months after the presidential proclamation does not mean the two were unrelated, as Rancho Vista appears to suggest, see Pl.’s Resp. at 1. Further, Rancho Vista’s assertion that the presidential proclamation did not compel the stop-work order is similarly unpersuasive. It argues that the proclamation cannot alone halt all border fence construction and, even if it could, it included an “exception to the pause” in border wall projects “for urgent measures needed to avert immediate physical dangers.” Pl.’s Resp. at 18 13 (quoting 86 Fed. Reg. 7225). Both are beside the point. The only effect of the proclamation relevant here is that it terminated the national emergency and thus the § 2808 authority used to construct the fence up until that date. Rancho Vista concedes that both terminations were lawful. See id. at 8. DOD’s decision to halt construction under § 2808 was thus not arbitrary, but mandatory. For this case, that ends the matter, and there is no need to inquire into the proclamation’s effect on other border fence projects based on other statutory authorities. Rancho Vista suggests that DOD or DHS should have invoked a different statutory authority to finish the project. Pl.’s Resp. at 10–14 (citing 10 U.S.C. § 284 (DOD); 8 U.S.C. § 1103 (DHS)). This argument likewise fails. “[T]he only agency action that can be compelled under the APA is action legally required.” Norton v. S. Utah Wilderness All., 542 U.S. 55, 63 (2004). And Rancho Vista has not pointed to any legal requirement that DOD or DHS use separate statutory authorities to complete San Diego Project 4. It therefore has no viable APA claim premised on the government’s failure to take further action to construct the border wall. None of the three relevant statutes require DOD or DHS to finish the project. First, § 2808 does not require DOD to consider alternative statutes it could use to finish terminated projects. See 10 U.S.C. § 2808(f) (providing only that “[t]he authority described in subsection (a) shall terminate . . . at the end of the . . . national emergency.”). Second, DOD’s authority under § 284 to “construct[] . . . fences . . . to block drug smuggling corridors across international boundaries” also does not require it to build any particular portion of fence, especially in any particular area. See id. § 284(b)(7) (using the term “may”). In fact, DOD may only invoke § 284 construction authority if requested by appropriate officials, id. § 284(a)(1), which Rancho Vista has not alleged occurred here. 14 Finally, DHS’s power to “control and guard the boundaries and borders of the United States against the illegal entry of aliens,” 8 U.S.C. § 1103(a)(5), is likewise inapposite for two reasons. For one, Rancho Vista has challenged the DOD’s “decision to cease all work” on San Diego Project 4. Compl. ¶¶ 13, 14, 15, 16. It has provided no authority for the Court to order a separate agency to clean up DOD’s unfinished work. And to the extent that Rancho Vista intends to challenge DHS’s failure to step in, that challenge would fail for the same reason as above: finishing DOD’s halted project is not legally required by any statute. Section 1103 gives DHS “substantial discretion in determining where to build fencing.” United States v. Arizona, No. 10-cv-1413, 2011 WL 13137062, at 8 (D. Ariz. Oct. 21, 2011) (dismissing APA claim against DHS for failure to build border fence). The APA does not authorize the Court to order DHS to exercise its discretionary enforcement power in such a specific way. See Heckler v. Chaney, 470 U.S. 821, 831 (1985). In sum, once the President declared an end to the national emergency, DOD was legally required to halt construction of the border fence under § 2808. DOD or DHS arguably could finish San Diego Project 4 using other statutory authorities, but there is no basis under the APA for this Court to order them to do so. C. NEPA and ESA Claims The NEPA and the ESA both require agencies to comply with certain procedural requirements before undertaking certain major actions. But neither statute applies to agency decisions that are nondiscretionary. Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267 F.3d 1144, 1151 (D.C. Cir. 2001) (“The touchstone of whether NEPA applies is discretion.”); Nat’l Ass’n of Home Builders v. Defs. of Wildlife, 551 U.S. 644, 673 (2007) (“[The ESA consultation requirement] appl[ies] only to ‘actions in which there is discretionary Federal involvement or 15 control.’” (quoting 50 CFR § 402.03)). For if “the agency does not have sufficient discretion to affect the outcome of its actions,” then “the information that NEPA provides can have no [e]ffect on the agency’s actions, and therefore NEPA is inapplicable.” Citizens Against Rails-to-Trails, 267 F.3d at 1151. The same is true for the ESA’s consultation requirement, and so “the Supreme Court itself has made clear that [that provision] of the ESA does not alter mandatory duties imposed on agencies by statute.” Am. Forest Res. Council v. Hammond, 422 F. Supp. 3d 184, 191 (D.D.C. 2019) (emphasis omitted) (citing Nat’l Ass’n of Home Builders, 551 U.S. at 644). That is sufficient to resolve Rancho Vista’s NEPA and ESA claims. Rancho Vista alleges that DOD should have followed NEPA and ESA procedures before “making the decision to order its contractors to abandon the border fence construction site adjacent to Rancho Vista’s property.” Compl. ¶¶ 19, 25. But as explained, DOD did not have any discretion to rely on § 2808 authority once the President declared an end to the national emergency. Because neither the ESA nor the NEPA applies to nondiscretionary agency action, Rancho Vista has failed to state a claim under either statute. 7 CONCLUSION For the foregoing reasons, the Court grants the defendants’ motion to dismiss with prejudice. A separate order consistent with this decision accompanies this memorandum opinion. ________________________ DABNEY L. FRIEDRICH November 14, 2022 United States District Judge 7 Because Rancho Vista purports to bring its ESA claim under the APA, see Compl. at 1; Pl.’s Resp. at 27–29, the Court need not decide whether Rancho Vista failed to comply with the ESA’s citizen-suit provision, see Defs.’ Mot. at 29–31. 16	01-04-2023	11-15-2022
https://www.courtlistener.com/api/rest/v3/opinions/8483708/	UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA OKIA FERGUSON, Plaintiff, v. No. 21-cv-1201 (DLF) KILOLO KIJAKAZI, Defendant. 1 MEMORANDUM OPINION Plaintiff Okia Ferguson, on behalf of her minor son K.J., challenges the Social Security Administration’s (SSA’s) denial of K.J.’s claims for Supplemental Security Income benefits. Before the Court are Ferguson’s Motion for Judgment of Reversal, Dkt. 13, and the Social Security Commissioner’s Motion for Judgment of Affirmance, Dkt. 16. For the reasons that follow, the Court will grant the Motion for Judgment of Reversal and deny the Motion for Judgment of Affirmance. I. BACKGROUND A. Statutory and Regulatory Background “To qualify for disability insurance benefits and supplemental security income under Titles II and XVI of the [Social Security] Act, [a claimant] must establish that []he is ‘disabled.’” Butler v. Barnhart, 353 F.3d 992, 997 (D.C. Cir. 2004). The Act considers a minor disabled if he “has a medically determinable physical or mental impairment resulting in marked and severe functional limitations” that is either fatal or will last for more than one year. 42 U.S.C. § 1382c(a)(3)(C)(i); 1 Pursuant to Rule 25(d) of the Federal Rules of Civil Procedure, Kililo Kijakazi, the acting director of the Social Security Administration, has been substituted for Andrew Saul as defendant. accord 20 C.F.R. § 416.906. A minor cannot be considered disabled if he “engages in substantial gainful activity.” 42 U.S.C. § 1382c(a)(3)(C)(ii). For child claimants, the Commissioner uses an “abbreviated version” of its normal five- step process to determine whether the claimant is disabled. Sullivan v. Zebley, 493 U.S. 521, 526 (1990); see 20 C.F.R. § 416.924. First, the claimant must show that he is not “doing substantial gainful activity.” 20 C.F.R. § 416.924(a), (b). Second, he must demonstrate that his impairment is “severe,” as opposed to a “slight abnormality . . . that causes no more than minimal functional limitations.” Id. § 416.924(a), (c). Third, the claimant must show that his impairments “meets, medically equals, or functionally equals” one of the listings at 20 C.F.R. Part 404, Subpart P, Appendix 1. Id. § 416.924(a), (d). If he does, and the impairment “meets the duration requirement,” then the Commissioner will deem the child disabled. Id. § 416.924(d). But “[i]f a child cannot qualify under these listings,” or his impairment does not meet the duration requirement, then “he is denied benefits.” Zebley, 493 U.S. at 526. “There is no further inquiry corresponding to the fourth and fifth steps of the adult test.” Id. The listing relevant here is Listing 112.10, which describes autism spectrum disorder for children aged three to eighteen. To meet or medically equal the severity of the impairment in the listing, the child must show “[m]edical documentation of both . . . (1) [q]ualitative deficits in verbal communication, nonverbal communication, and social interaction; and (2) [s]ignificantly restricted, repetitive patterns of behavior, interests, or activities.” 20 C.F.R. pt. 404, subpt. P, app. 1, § 112.10 (emphasis omitted). In addition, the child must also establish “[e]xtreme limitation of one, or marked limitation of two, of the following areas of mental functioning: (1) Understand, remember, or apply information. (2) Interact with others. (3) Concentrate, persist, or maintain pace. (4) Adapt or manage oneself.” 2 Id. (citations omitted). To functionally equal the listing, the child must similarly show “‘marked limitations’ in two . . . or an ‘extreme’ limitation in one” of the following domains: (1) Acquiring and using information; (2) Attending and completing tasks; (3) Interacting and relating with others; (4) Moving about and manipulating objects; (5) Caring for [one]self; and (6) Health and physical well-being. 20 C.F.R. § 416.926a(a), (b)(1). B. Factual Background In K.J.’s early childhood, his mother became concerned about his delayed “speech and language development.” A.R. 253. She brought him into Children’s National Health System for an evaluation on October 23, 2018 (at one year, six months old). Id. At that visit, an evaluator tested K.J.’s hearing, and his “[r]esults were consistent with normal hearing for at least part of the speech frequency range in at least the better ear, if one exists.” Id. (quotation marks omitted). An evaluator also administered the Receptive-Expressive Emergent Language Test (REEL-3) to test K.J.’s receptive language, expressive language, and language ability. Id. at 254. K.J. scored below the first percentile on all three. Id. K.J. would “not stop if someone call[ed] his name,” was “not consistently responding to commands,” “d[id] not appear to understand the mood of others,” reportedly understood only a handful of words, and could say only the word “mama.” Id. On several of the indicators, including articulation, voice, and fluency, the evaluator wrote that K.J. “could not be appropriately assessed . . . due to paucity of output.” Id. at 254–55. Approximately one month later, on November 14, 2018 (at one year, seven months old), K.J. had ear tubes placed in his ears due to recurring ear infections. See id. at 295. An evaluation of K.J.’s hearing at a follow-up appointment showed “normal hearing in sound field testing,” and his mother reported that she felt K.J.’s “hearing ha[d] improved.” Id. 3 A few months after the surgery, on January 7, 2019 (at one year, eight months old), K.J. was given another standardized assessment called the Battelle Development Inventory-2 (BDI-2). Id. at 272. K.J. again scored below the first percentile in both receptive communication and expressive communication. Id. His overall communication score was in the 0.1st percentile and indicated a sixty percent delay in communication skills. Id. at 272–73. At that point, while K.J. sometimes (but not always) “respond[ed] to his name by looking up,” he did “not yet respond to different tones [of] voices, pay attention to the conversations that go on around him, or follow routine directions.” Id. at 272. He still did not use any words other than “mama.” Id. K.J. was given an Individualized Family Service Plan that included weekly therapy with a speech and language pathologist and an occupational therapist. Id. at 284, 286. On March 20, 2019 (at one year, eleven months old), K.J. had another developmental evaluation at Children’s National. Id. at 310. The doctors observed, among other things, that K.J.’s “[r]eceptive language skills [we]re broadly delayed and presently appear to be slightly below the [twelve]-month level,” and they described him as “nonverbal.” Id. at 312. The doctors diagnosed K.J. with autism spectrum disorder. Id. at 313. In addition, they recommended that K.J. continue to receive weekly speech and occupational therapy and add applied behavioral analysis therapy, which would “have a direct and positive impact on [his] current functional skills as well as his long-term prognosis.” Id. On September 25, 2019 (at two years, five months old), K.J. was again evaluated at Children’s National. Id. at 483. At that time, the doctor observed that K.J. had “made some progress in the areas of language, socialization, and play skills.” Id. at 485. But the doctor noted that K.J. “continue[d] to demonstrate problematic behaviors, some of which are quite dangerous such as throwing himself down and running away from caregivers.” Id. K.J. was “consistently 4 using” only two words: “Mommy and blue,” and he was “not tuning into spoken language,” as he responded to his name only half of the time and could not follow instructions. Id. at 484. The doctor estimated that K.J.’s cognitive skills were now “at the [eighteen] to [twenty-one]-month level, which illustrates an improvement of approximately [six] months in as many months.” Id. at 485. She recommended an increase in weekly therapy. Id. On November 20, 2019 (at two years, seven months old), K.J. was again given the BDI-2 standardized evaluation. Id. at 453. He once again placed below the first percentile in both receptive communication and expressive communication, and his skills were at an eight-month and fourteen-month level, respectively. Id. at 454. Overall, his communication development was in the 0.3rd percentile, and he exhibited a 64% developmental delay. Id. K.J. reportedly made “intermittent[]” eye contact and was “beginning to respond to simultaneous verbal and gestural commands,” but was not yet “looking around the room for” family members or objects when named. Id. He could consistently say a few more words, including “hi,” “uh oh,” and “yay,” but “primarily indicate[d] his wants and needs by crying.” Id. He was “not yet communicating in a back-and-forth, turn-taking style or using more than [ten] words.” Id. C. Procedural History Ferguson filed a claim for Social Security benefits for K.J. on March 1, 2019. A.R. 152. After K.J.’s claim was denied, she requested reconsideration and a hearing before an Administrative Law Judge (ALJ). Id. at 30–50. On June 23, 2020, the ALJ denied K.J.’s application, finding that he was not disabled under the Social Security Act. Id. at 13–24. At step one of the disability evaluation process, the ALJ determined that K.J. had not engaged in any substantial gainful activity. Id. at 17. At step two, he found that K.J. had the 5 following severe impairments: bilateral otitis media status post bilateral myringotomy; 2 delays in receptive and expressive language, pragmatic language, and speech; upper respiratory infection; asthma; autism spectrum disorder; and obesity. Id. But the ALJ found that K.J.’s claim failed at step three, because his impairments or combination thereof did not meet, medically equal, or functionally equal the severity of any listing, including Listing 112.10 for autism spectrum disorder. Id. at 17–18 (citing 20 C.F.R. §§ 416.924, 925, 926). The ALJ first concluded that K.J.’s mental impairment did not meet or medically equal the autism listing because his medical record did not show “extreme limitation of one, or marked limitation of two, of the four areas of mental functioning” identified in the listing. Id. at 18. The ALJ explained that while K.J. had a “marked limitation” in one domain (ability to interact with others), he had a “less than marked limitation” in the other three areas. Id. The ALJ acknowledged K.J.’s history of difficulty with language and social skills, but noted his improvement with therapy. Id. The ALJ further concluded that K.J.’s impairments did not functionally equal the severity of the autism listing. Id. at 18–19. In making that determination, the ALJ considered all of the evidence in the record, including K.J.’s medical records and Ferguson’s testimony, to evaluate K.J.’s functioning on the six domains. Id. at 18–24. The ALJ again concluded that K.J. had a “marked limitation” in only “interacting and relating with others,” while he had a “less than a marked limitation” in the other five domains. Id. at 19–24. Because K.J. did not have “‘marked’ limitations in two domains of functioning or an ‘extreme’ limitation in one domain,” the ALJ found 2 This refers to K.J.’s ear infections and surgically-placed tubes. See Def.’s Mot. at 3, Dkt. 16; A.R. 591–92. 6 that his impairments did not functionally equal the listing. Id. at 24. As a result, the ALJ concluded that K.J. was not disabled under the Social Security Act. Id. The Appeals Council denied review of the ALJ’s decision on March 1, 2021. Id. at 1. Ferguson subsequently brought this suit and moved for reversal of the ALJ’s decision. Pl.’s Mot., Dkt. 13. II. LEGAL STANDARD “In a disability proceeding, the ALJ ‘has the power and the duty to investigate fully all matters in issue, and to develop the comprehensive record required for a fair determination of disability.’” Simms v. Sullivan, 877 F.2d 1047, 1050 (D.C. Cir. 1989) (quoting Diabo v. Sec’y of Health, Educ. & Welfare, 627 F.2d 278, 281 (D.C. Cir. 1980)). Once an ALJ issues a decision, the claimant may seek review by the Administration’s Appeals Council. 20 C.F.R. § 416.1467. If the Council denies review, the ALJ’s decision becomes the final decision of the Administration’s Commissioner. See id. § 416.1481. The Social Security Act gives federal district courts review over the Commissioner’s final decisions. 42 U.S.C. §§ 405(g), 1383(c)(3). A reviewing court must affirm the Commissioner’s decision if it is supported by substantial evidence, see id. § 405(g), and if it correctly applied the relevant legal standards, Butler, 353 F.3d at 999. Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. (quoting Richardson v. Perales, 402 U.S. 389, 401 (1971)). This standard “requires more than a scintilla, but can be satisfied by something less than a preponderance of the evidence.” Fla. Mun. Power Agency v. FERC, 315 F.3d 362, 365–66 (D.C. Cir. 2003) (quotation marks and citation omitted). “Substantial-evidence review is highly deferential to the agency fact-finder.” Rossello ex rel. Rossello v. Astrue, 529 F.3d 1181, 1185 (D.C. Cir. 2008). On review, the “plaintiff bears the 7 burden of demonstrating that the Commissioner’s decision [was] not based on substantial evidence or that incorrect legal standards were applied.” Settles v. Colvin, 121 F. Supp. 3d 163, 169 (D.D.C. 2015) (quoting Muldrow v. Astrue, No. 11-1385, 2012 WL 2877697, at 6 (D.D.C. July 11, 2012)). Further, the reviewing court may not replace the ALJ’s judgment “concerning the credibility of the evidence with its own.” Goodman v. Colvin, 233 F. Supp. 3d 88, 104 (D.D.C. 2017) (quotation marks omitted). Rather, “[t]he credibility determination is solely within the realm of the ALJ.” Grant v. Astrue, 857 F. Supp. 2d 146, 156 (D.D.C. 2012). III. ANALYSIS The ALJ concluded that K.J. did not meet, medically equal, or functionally equal the listing for autism spectrum disorder in part because K.J. had only a marked limitation, not an extreme limitation, in his ability to interact with others. That conclusion was not supported by substantial evidence. The “interact with others” domain in the autism listing considers a child’s ability to communicate with language and make connections. See 20 C.F.R. pt. 404, subpt. P, app. 1, § 112.00(E)(2) (“Interact with others . . . refers to the abilities to relate to others age-appropriately at home, at school, or in the community,” including “initiating or sustaining conversation” and “understanding and responding to social cues”). The “interacting and relating with others” domain, which is used to determine if a child functionally equals the listing, likewise measures a child’s ability to “initiat[e] and respond[] to exchanges with other people, for practical or social purposes.” 3 20 C.F.R. § 416a(i)(1)(i). In this domain, one- to three-year-old children should “be 3 The ALJ analyzed treated these two domains as the same, see A.R. 18 (discussion of the domain in listing cross-referencing discussion of the domain in the functional equivalence test), and so do both parties, see Pl.’s Mot. at 13; Def.’s Mot. at 9. The Court will do the same, and its conclusion accordingly implicates both the ALJ’s analysis of whether K.J. meets the autism listing and whether he functionally equals the listing. 8 able to express emotions and respond to the feelings of others,” “initiat[e] and maintain[] interactions with adults,” “interact with other children [their] age,” and “communicate [their] wishes or needs” through gestures and words. Id. § 416a(i)(2)(ii). According to federal regulations, a child’s limitation is considered “marked” if he has scores between two and three standard deviations below the mean on a “standardized test designed to measure ability or functioning in that domain.” Id. § 416.926a(e)(2)(iii). The limitation is considered “extreme” if the child’s scores are three standard deviations or more below the mean. Id. § 416.926a(e)(3)(iii). In addition, for a child under the age of three where test scores are unavailable, a limitation is “marked” if he functions at a level between one-half and two-thirds of his age and “extreme” if he functions at a level one-half of his age or less. Id. § 416.926a(e)(2)(ii), (e)(3)(ii). K.J.’s record includes multiple test scores and age-equivalency evaluations that support a finding that he has an “extreme” limitation in his ability to interact with others. The first such test was REEL-3, which K.J. took in October 2018. REEL-3 is a standardized test that measures receptive language (including “comprehension skills and follow through for directions”), expressive language, and “pragmatic (social) language skills for adult interaction.” A.R. 254. Accordingly, it is designed to measure ability or functioning in the “interact with others” domain. See 20 C.F.R. § 416a(i) (defining the domain to include language skills). Because the mean REEL-3 score is one hundred with a standard deviation of fifteen, see Pl.’s Mot. at 8 (citing Kenneth R. Bzoch et al., REEL-3 (3d ed. 1991)), scores of fifty-five or less indicate an “extreme” limitation under the regulations. See 20 C.F.R. § 416.926a(e)(3)(iii). In October 2018, K.J.’s language ability was forty-eight—far below that cut-off. A.R. 254. This score indicates that in October 2018, K.J. had an extreme limitation in language ability. 9 Second, K.J. was evaluated using the BDI-2 in January 2019 (at one year, eight months old). A.R. 272. The BDI-2 “is a standardized assessment battery for children” that measures several things, including cognitive, communication, personal-social, motor, and adaptive skills. A.R. 272, 272–74. The communication skills category thus corresponds to the “interacting with others” domain. In that category, K.J.’s developmental quotient was fifty-five—in the 0.1st percentile. Id. at 272–73. Under the regulations, such percentile scores “can be converted to standard deviations” for the purposes of determining the extent of limitation. 20 C.F.R. § 416.926a(e)(1)(ii). In a normal distribution, a score at three standard deviations below the mean corresponds to the 0.15th percentile. Barbara Illowsky & Susan Dean, Introductory Statistics, § 6.1 (2013), available at https://openstax.org/books/introductory-statistics/pages/6-1-the- standardnormal-distribution. Thus, K.J.’s 0.1st-percentile communication score is “three standard deviations or more below the mean.” 4 20 C.F.R. § 416.926(a)(e)(iii). Once again, this score shows that according to the regulations, K.J.’s limitation in this domain was “extreme” in January 2019. K.J.’s estimated age equivalency during that same evaluation leads to the same conclusion. K.J. was twenty months old at the time, yet he had the receptive communication and expressive communication skills of an eight-month-old (two-fifths of his actual age). A.R. 272. In addition, the evaluator concluded that K.J.’s communication was 60% delayed, meaning he was functioning at less than half (40%) of his age. Id. at 273. K.J.’s functioning “at a level one-half of his age or less” indicates his communication limitation was “extreme” under the regulatory definition. 20 C.F.R. § 416.926a(e)(3)(ii). 4 This conclusion is confirmed by K.J.’s numerical score on this domain. Because “[t]he standard mean score on the BDI–2 is 100 with a standard deviation of 15,” Boyington ex rel. J.O.J.H. v. Colvin, 48 F. Supp. 3d 527, 531 (W.D.N.Y. 2014), K.J.’s score of fifty-five is three standard deviations below the mean. See A.R. 272–73. 10 Eleven months later, in November 2019, K.J. was again administered the BDI-2. A.R. 453. At that time, his BDI-2 results for both receptive and expressive communication were below the first percentile. Id. at 453–54. Although his overall communication development had marginally improved to a score of fifty-eight (the 0.3rd percentile), the evaluator concluded that he now had a 64% delay in communication skills development. Id. at 454. At thirty-one months old, K.J. was displaying the receptive communication skills of an eight-month-old and the expressive communication skills of a fourteen-month-old—both well below half his actual age. Id. at 453– 54. While the ALJ noted the first two test scores, the ALJ did not consider the November 2019 evaluation, the most recent score. See id. at 20 (citing only the October 2018 REEL-3 and January 2019 BDI-2, but not the November 2019 BDI-2). This was reversible error, as the regulations instruct the ALJ to consider K.J.’s November 2019 test score “together with the other information” in the record. 20 C.F.R. § 416.926a(e)(4); see also 20 C.F.R. § 416.926a(e)(4)(iii)(B) (“When we do not rely on test scores, we will explain our reasons for doing so in your case record or in our decision.”). While K.J.’s score of fifty-eight (0.3rd percentile) on this test was not per se “extreme” under the regulations, it was only “slightly higher than the level provided” in the regulations for extreme limitations. 5 Id. § 416.926a(e)(4)(ii)(A). Thus, under the regulations, his limitation might still be extreme “if other information in [his] case record shows that [his] functioning in day-to-day activities is seriously or very seriously limited because of [his] impairment(s).” Id. 5 Scores of seventy and below indicate “marked” limitations, while scores of fifty-five and below indicate “extreme” limitations. See Boyington, 48 F. Supp. 3d at 531. K.J.’s score was twelve points below the “marked” threshold, but only three points above the “extreme” threshold. 11 The November 2019 evaluation is directly relevant to the ALJ’s inquiry. It found that K.J.’s communication showed, among other things, a “[s]ignificant [d]evelopmental [d]elay” and that K.J. “[wa]s not yet communicating in a back-and-forth, turn-taking style or using more than 10 words.” A.R. 454. Moreover, the evaluation also reflected that K.J.’s communication skills were extremely delayed compared to typical children his age. Most noteworthily, K.J.’s receptive communication functioning was almost one-quarter of his actual chronological age—far below the regulation’s cut-off for extreme limitations. Id.; see also id. (also noting that K.J.’s expressive communication functioning was 45% and overall communication was 60% of actual age); 20 C.F.R. § 416.926a(e)(3)(ii) (explaining that functioning at less than half of one’s actual age is an “extreme” limitation). While these age equivalency metrics are not dispositive because K.J. also had a standardized test score in his record, see 20 C.F.R. § 416.926a(e)(3)(ii), they constitute “other evidence [that] shows that [K.J.’s] impairment(s) cause[d] [him] to function in school, home, and the community far below [his] expected level of functioning.” Id. § 416.926a(e)(4)(ii)(A). And they would help the ALJ “compare [K.J.’s] functioning to the typical functioning of children [his] age who do not have impairments,” as is required in the evaluation of each domain. Id. § 416.926a(f)(1). But the ALJ did not consider them at all. Indeed, the ALJ’s failure to consider the November 2019 evaluation was material, because doing so would have directly undermined his reasoning for why K.J.’s limitation was only marked. The ALJ reasoned that since the October 2018 and January 2019 tests, K.J. had received ear surgery and began weekly therapy—and after those two interventions, K.J. “made some progress in the areas of language, socialization, and play skills.” A.R. 20–21 (citing the September 2019 follow-up evaluation, see id. at 485). Because of this progress, the ALJ concluded that the earlier scores did not compel finding an “extreme” limitation, despite falling in the regulations’ range for 12 “extreme.” Id. at 18, 20–21. But the November 2019 score squarely calls that conclusion into question. In November 2019—over one year after his first test score in the “extreme” category, and just one month after some noted progress—K.J. was still scoring in the less-than-first percentile on standardized tests for communication. See id. at 454. At the same time, K.J.’s communication skills had worsened four percentage points since the January 2019 evaluation. See id. at 272–73, 454. In sum, the ALJ did not “analyze[] all evidence” relevant to the interacting with others domain. See Goodman, 233 F. Supp. 3d at 104. His omission was more than harmless error because the evidence he failed to consider undermines his conclusion; indeed, it flatly contradicts the reasoning he provided to explain why K.J.’s limitation was not extreme. See Bethel o/b/o C.B. v. Berryhill, No. 18-cv-00247, 2019 WL 12251881, at 11 (D.D.C. Aug. 29, 2019) (“An ALJ may not simply ignore evidence in the record that might undercut his ultimate conclusion.”), report and recommendation adopted, 2019 WL 12251879 (D.D.C. Oct. 2, 2019). Because a finding that K.J. had an “extreme” limitation in one domain would be sufficient to conclude that K.J. met, medically equaled, or functionally equaled the listing, 20 C.F.R. pt. 404, subpt. P, app. 1, § 112.10; 20 C.F.R. § 416.926a(a), (b)(1), the ALJ’s determination will be reversed and remanded. 6 Turning to relief, Ferguson asks the Court to order the ALJ to award benefits to K.J. Pl.’s Mot. at 14–15. Although the Court agrees that the ALJ’s opinion ignored relevant evidence, that evidence does not “clearly indicat[e]” that K.J. had a disability so as to warrant such an order. Espinosa v. Colvin, 953 F. Supp. 2d 25, 36 (D.D.C. 2013). The Court will instead remand the case to the ALJ to reconsider his determination, giving proper consideration to the evidence in the 6 For this reason, the Court need not address Ferguson’s additional arguments that the ALJ also erred in the analysis of other domains, see Pl.’s Mot. at 10–13. 13 record, including the November 2019 BDI-2 standardized evaluation, in the “interacting with others” domain. CONCLUSION For the foregoing reasons, the Court grants the plaintiff’s Motion for Judgment of Reversal and denies the defendant’s Motion for Judgment of Affirmance. A separate order consistent with this decision accompanies this memorandum opinion. ________________________ DABNEY L. FRIEDRICH United States District Judge November 14, 2022 14	01-04-2023	11-15-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491230/	AMENDED DECISION AND ORDER GRANTING MOTION FOR RELIEF FROM STAY WILLIAM A. CLARK, Bankruptcy Judge. This matter is before the court on the motion of First National Bank of Dayton to modify the automatic stay filed on July 25, 1990. Paul D. Gilbert, trustee herein, objects to the relief from the automatic stay. This contested matter was heard by Judge William A. Clark in the absence of Judge Thomas F. Waldron at the date of the hearing on the motion pursuant to 11 U.S.C. § 362(e) requiring such hearing within thirty days after the request for relief from stay. This court has jurisdiction over this contested matter pursuant to 28 U.S.C. § 1334(b) and the general order of reference entered in this district. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). The following constitutes the court’s findings pursuant to Bankruptcy Rule 7052. The facts of the matter are undisputed that First National Bank granted a line of credit (loan) of $500,000 to Levitón Construction Company (debtor) as evidenced by a revolving note dated May 31, 1989 and agreement. The loan is secured by security agreements granting a security interest in debtor’s assets, including accounts receivable and the proceeds thereof. The security agreement was perfected by filing with the Montgomery County Ohio Recorder and Ohio Secretary of State. The debtor is the owner of a certain account at First National Bank which on the date of the petition and of the motion had a balance of $78,507. The funds in the account constitute proceeds of debtor’s accounts receivable in which First National has a security interest. The loan documents reveal that Alan L. Rosenberg, a principal of the debtor corporation, individually guaranteed the line of credit for the corporation by an addendum to the revolving credit note dated April 30, 1990. In reaching its determination the court considered the documents filed in the case, including the original motion, response of trustee, hearing brief of First National Bank of Dayton, trustee’s brief and the reply brief of First National Bank and the oral arguments of counsel at the hearing on August 16, 1990. The bank desired modification of the automatic stay to permit the bank as a secured creditor, to apply the funds in the bank account to the outstanding loan presented by the revolving credit note as partial satisfaction thereof. The trustee objected to such relief on the ground that the bank should be required to pursue its claim against the principal of the debtor, Alan L. Rosenberg, before proceeding against the assets of the debtor. The trustee maintains that under equitable principles the bank should be required to pursue assets of the guarantor, Alan L. Rosenberg, rather than assets of the debtor which would disadvantage unsecured creditors of the debtor corporation. In the alternative, the trustee contends (1) that to the extent that the bank recovers from the debtor corporation’s bank account the trustee should have a right of contribution against the assets of Alan L. Rosenberg, (2) be subrogated to the bank’s claim against Alan L. Rosenberg, (3) that the court should apply the “marshaling” doctrine to this case because the trustee is a 532secured creditor, as well as the bank, against the assets of the debtor corporation, or (4) that to allow the bank to reduce the obligation of Allen L. Rosenberg constitutes a preference to such insider principal of the debtor corporation. The trustee’s first issue based upon equitable principles raises the question of marshaling of the assets. The parties having engaged in their financing arrangement under Ohio law, Ohio law must govern. The doctrine of marshaling is a familiar one in equity, growing out of the equitable principle that a party having two funds to satisfy his demands shall not, by his election, disappoint a party who has only one of the funds upon which to rely thus preventing him from exercising his right of recourse against the property or assets in question in an unreasonable manner or so as to satisfy his claim to the exclusion of such other claimants. Homan v. Michles, 118 Ohio App. 289, 194 N.E.2d 162 (1963). Ohio law requires that to apply the doctrine of marshaling there are several requirements. One is that the parties must be creditors of the same debtor, that there are two funds to which creditors may resort which are derived from a common source or are in the hands of a common debtor. The last requirement is that compelling a party to resort to one of the funds rather than the other will not work an injustice to any party connected with the litigation, i.e. the application of marshaling will not work an injustice either to the common debtor or to other persons under circumstances where it would be inequitable to apply the principle. Green v. Ramage, 18 Ohio 428 (1849); Langel v. Moore, 119 Ohio St. 299, 164 N.E. 118 (1928). The court in Homan, supra, stated: Cases throughout the United States seem to be in full accord that a junior creditor of a common debtor cannot, under the guise of the doctrine of marshaling assets, require a senior creditor, who is additionally secured by the common debt- or’s surety, to resort first to the surety’s property before having recourse to the property of the principal debtor, (citation omitted) The surety has a prevailing equity enforceable by way of subro-gation to the position of the paramount creditor and the doctrine of marshaling assets shall not be thus applied to the prejudice of the surety and his property taken before resort is made to the assets of the debtor primarily liable, (citation omitted) In this case there is not a common debtor. The debtor corporation was the maker of the note and Alan L. Rosenberg is the guarantor, so that the application of the doctrine of marshaling is inappropriate. Under Ohio law and general corporation law, a shareholder is an entity separate and distinct from the corporation. In this ease the source of recovery is from separate entities, either Levitón Construction Company or Alan L. Rosenberg. The trustee has not attempted or proved that the debtor corporation is in some way the alter ego of the guarantor, under capitalized or that a type of misconduct occurred on the part of the individual, the debtor corporation, or the First National Bank. The bank raises the doctrine of subrogation under general guaranty law and under Bankruptcy Code section 509 to demonstrate that even if the bank proceeds against Alan L. Rosenberg, the guarantor, payment upon the debt will result in subro-gation rights to the guarantor. The effect of the subrogation rights to the guarantor will prevent unsecured creditors from benefiting from enforced collection of the bank’s debt from Mr. Rosenberg. The trustee contends that an avoidable preference will result if the bank proceeds against the asset of the debtor corporation because it will reduce the liability of the guarantor. See In re C-L Cartage Co., 899 F.2d 1490 (6th Cir.1990). This concept is recent, novel and troublesome to the lending community. ■ Whatever difficulty in lending practices the cited case may have caused the lending community, the principal of avoidable preference does not 533apply in this case. The proposed action by First National Bank against the asset of the debtor corporation is a post petition transaction. An avoidable preference under 11 U.S.C. § 547 is effective against transfers made while the debtor was insolvent and (a) on or within ninety 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 said transfer was an insider. The transfer in this case is proposed by the bank after the petition is filed. The argument concerning avoidable preference is therefore inapplicable in this instance. The court therefore finds that the motion for modification of the stay to permit the bank to exercise its security rights in collateral of the debtor corporation is granted. IT IS SO ORDERED.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491231/	OPINION JONES, Bankruptcy Judge: I. OVERVIEW Home Savings of America, F.A., appeals a bankruptcy court order denying its motion to dismiss Maria Luna’s Chapter 13 case. Home Savings argues that the order should be reversed because Luna’s Chapter 13 case was filed in violation of 11 U.S.C. § 109(g)(2) (1988), which prohibits repeat bankruptcy filings in certain circumstances. We affirm. II. FACTS On August 10, 1988, Luna filed a petition for relief under Chapter 13 of the Bankruptcy Code. On June 27, 1989, Home Savings, a creditor holding a first deed of trust on Luna’s home, filed a motion for relief from the automatic stay. On August 15, 1989, the bankruptcy court entered its order granting Home Savings relief from the stay. In the order, the bankruptcy court stated that Home Savings’ publication of a foreclosure sale could not commence until Home Savings had provided Luna “with a statement as to the funds necessary to both reinstate and pay off [the] loan on [Luna’s home].” On August 30, 1989, Luna filed a motion to voluntarily dismiss her pending Chapter 13 ease. On September 1, 1989, the bankruptcy court, per Luna’s voluntary request, entered its order dismissing Luna’s Chapter 13 case. Thereafter, a dispute arose as to whether Home Savings had provided Luna with the court required loan demand, Luna contending with . some justification that she had not been furnished with such a statement. On October 5, 1989, Luna filed a second Chapter 13 petition. Home Savings then, with specific knowledge of the filing of the second petition and with knowledge of an offer by Luna of $10,000 for the cancellation of the foreclosure sale, authorized its agent to proceed with the foreclosure sale, which occurred on October 26, 1989. Luna subsequently filed an objection to the foreclosure sale on the ground that the sale violated the automatic stay imposed by Luna’s second Chapter 13 petition. Home Savings responded by filing a motion to dismiss the second petition on the ground that it violated section 109(g)(2)’s provision against repeat bankruptcy filings. After a hearing on the dispute, the bankruptcy court concluded that Home Savings’ motion should be denied because section 109(g)(2) was “inapplicable” to Luna’s second bankruptcy petition. Home Savings timely appealed. III. STANDARD OF REVIEW Resolution of this appeal requires us to review a conclusion of law. Accordingly, the issue presented in this appeal, whether the bankruptcy court properly applied § 109(g)(2), is subject to de novo review. Trustees of Amalgamated Ins. Fund v. Geltman Industries, 784 F.2d 926, 929 (9th Cir.1986) (statutory interpretation is a question of law reviewed de novo). *577IV. DISCUSSION Section 109(g)(2) provides: no individual ... may be a debtor under this title who has been a debtor in a case pending under this title at any time in the preceding 180 days if ... the debtor requested and obtained the voluntary dismissal of the case following the filing of a request for relief from the automatic stay provided by section 362 of this title. There are two lines of cases interpreting section 109(g)(2)’s language. One line of cases holds that the application of section 109(g)(2) is mandatory. See generally Smith v. First Fed. Sav. & Loan Ass’n (In re Smith), 58 B.R. 603, 605 (W.D.Pa.1986); In re Denson, 56 B.R. 543, 546 (Bankr.N.D.Ala.1986). The other line of cases holds that the application of section 109(g)(2) is discretionary. See generally Economy Motors, Inc. v. Jones (In re Jones), 99 B.R. 412, 413 (Bankr.E.D.Ark.1989); Fulton Fed. Sav. & Loan Ass’n v. Milton (In re Milton), 82 B.R. 637, 639 (Bankr.S.D.Ga.1988). We decline to follow the line of authority which requires mandatory application of section 109(g)(2). Mechanical application of section 109(g)(2) would reward Home Savings for acting in bad faith and punish Luna for acting in good faith. Accordingly, because “[legislative enactments should never be construed as establishing statutory schemes that are illogical, unjust, or capricious”, we conclude that the bankruptcy court properly declined to apply section 109(g)(2) to Luna’s second bankruptcy petition. Bechtel Constr., Inc. v. United Bhd. of Carpenters & Joiners of America, 812 F.2d 1220, 1225 (9th Cir.1987). V. CONCLUSION Because the mandatory application of section 109(g)(2) to Luna’s second bankruptcy petition would have produced an illogical and unjust result, we conclude that the bankruptcy court properly exercised its discretion when it declined to dismiss Luna’s second bankruptcy petition. Accordingly, we affirm the bankruptcy court’s decision to deny Home Savings’ motion to dismiss.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491233/	FINDINGS OF FACT AND CONCLUSIONS OF LAW A. JAY CRISTOL, Bankruptcy Judge. This cause came before the court on July 23, 1990 on the complaint of T.R.C., Inc. for non-dischargeability of a debt in accordance with 11 U.S.C. § 523(a)(6). The debt was an award against the debtor in the Maryland Circuit Court for tortious interference with TRC’s contract with the Ta-Yang Yacht Building Company. This award included punitive damages and a finding of malicious intent. The cause was prevented from a finding of res judicata by two factors: (1) the issue of a different standard of malicious intent in the Maryland Court, and (2) the lower standard of proof in the Maryland ease from that laid down by the Eleventh Circuit for a § 523(a)(6) case. Chrysler Credit Corporation v. Rebhan, 842 F.2d 1257, 1262 (11th Cir.1988) (citing Matter of Wise, 6 B.R. 867 (Bankr.M.D.Fla.1980). At pretrial conference the parties agreed that the court would review the transcript of the Maryland trial and that further hearings would be unnecessary. Having reviewed the Maryland transcript and the exhibits submitted by counsel, heard and considered the arguments of the parties, and being fully advised in the premises, the court makes the following findings of fact and conclusions of law. This is a core matter, and the court has jurisdiction under 28 U.S.C. §§ 157 and 1334, and 11 U.S.C. § 523. For ease of analysis, the following opinion is labled with headings. The headings are not definitive, and to the extent that the subject matter conflicts with the heading, the subject matter controls. In like manner, should any finding of fact be included with the conclusions of law, or vice versa, the nature of the finding, and not the label, controls. FINDINGS OF FACT The plaintiff herein is T.R.C., Inc. [TRC] which is a corporation wholly owned by Thomas R. Cooper [Cooper], a resident of Annapolis, Md. Mr. Cooper also owns another corporation, Sextant Yacht Sales, Inc. 801[Sextant]. To some extent, witnesses tended to refer to these three entities interchangeably. Charles Michael English [English] is the defendant in this action and was co-defendant with the Ta-Yang Yacht Building Company in the Maryland Circuit Court action, T.R.C., Inc. v. Ta-Yang Yacht Building Company, Ltd., Civil Action 1111288, in the Circuit Court in and for Anne Arundel County. A jury verdict was entered. English was found liable for intentionally interfering with a contract between TRC and the Ta-Yang Yacht Building Company, Ltd. [Ta-Yang], The verdict included an award of punitive damages, for which the jury had to find malice. The jury instructions stated that the requirement for malice could be satisfied by actual or implied malice. The standard of proof for both the tort and the punitive damages was a preponderence of the evidence. English has sold yachts since 1969, and Ta-Yang’s product [Tayana] since 1975. In 1980 he established himself in Annapolis, Maryland, and in 1983 entered into a written agreement with Cooper, who also sold Tayana yachts. Cooper considered English a salesman; English characterized the arrangement as a “joint venture.” This arrangement lasted approximately a year, and ended in the spring of 1984 with a verbal agreement between Cooper, English, and Ta-Yang that the two sellers would split the line, with Cooper having the rights to sell the Tayana 37 among others, and English having rights to the “Trunk Cabin” 42, in which he had a special interest, and the Tayana 52. The details of this agreement were not clear to the court. It apparently was in the nature of a “gentlemen’s agreement” and there is some evidence that it included an agreement that neither seller would seek an exclusivity contract with the manufacturer. English testified that Ta-Yang subsequently offered him an exclusive dealer agreement or distributorship which he refused because of this obligation. The principals of Ta-Yang denied offering English an exclusive distributorship. Various negotiations were had among these parties throughout the spring of 1984, culminating with a written distributorship agreement between Ta-Yang and Cooper, signed July 11, 1984. This agreement was for a one year term, after which it was to be signed again, and it provided exclusivity for Cooper from South Carolina to New York, with New York designated as a “grey area.” The testimony of the principals of Ta-Yang was not very dynamic and candid in reference to this contract, at times bordering on the evasive. This testimony casts doubt on their credibility on the issue of their entry into exclusive deals. English did not sign the agreement, and claims that he was unaware of it until after he was served process in the state court action. English has filed this Chapter 7 case, and seeks to discharge his debts, including the jury award of $158,768.68 plus interest on which he was held jointly and severally liable with Ta-Yang, and the $100,000 in punitive damages for which he is solely responsible. There is evidence that English paid $20,000 on this debt prior to filing bankruptcy. The state court judge expressed doubts about the sufficiency of the evidence before letting the case go to the jury (Transcript IV, p. 22), and entered a remittitur of $100,000 of the original jury award of $200,000 in punitive damages. CONCLUSIONS OF LAW The court’s decision that this debt is dischargeable depends on two elements of the proceedings in the Maryland Circuit Court which were not proven by clear and convincing evidence: damages to the plaintiff, and willful and malicious intent on the part of the debtor. There is no question but that the party seeking to except a debt from discharge must prove the willfulness and maliciousness of the act by clear and convincing evidence. Chrysler Credit Corp. v. Rebhan, 842 F.2d 1257, 1261 (11th Cir.1988). The cases under § 523(a)(6) have tended to analyze the term “willful and malicious’-' as a two pronged test, both elements of which must be met to except discharge. The Eleventh Circuit, to whom 802the court must defer, has followed this tendancy. MALICIOUS Despite the language of congressional intent to overrule the Tinker v. Col-well 1 case and the strong policy of providing debtors with a fresh start, the Eleventh Circuit may have returned to the reckless disregard standard of malice first announced in Tinker v. Colwell, 193 U.S. 473, 24 S.Ct. 505, 48 L.Ed. 754 (1904). The reasoning is complicated and the logic confusing because of the ambiguity of Tinker v. Colwell and the similarity and overlap of meaning of the terms willful and malicious. The preferred alternative of the several lines of cases on this issue was announced in this circuit in Chrysler Credit Corporation v. Rebhan. This holding is that the congressional language only applies to the element of “willful,” and that willful is satisfied by an act intentionally done. 842 F.2d at 1263, citing United Bank of Southgate v. Nelson, 35 B.R. 766, 774 (N.D.Ill.1983). The application of the Re-bhan decision is not clear in the case sub judice. If the decision means that any act in the chain of causation, however innocent, can satisfy the willfulness element by being intentionally done, the Rebhan decision leaves us with the conclusion that the reckless disregard standard that Congress attempted to overrule has been re-established. This court feels that the better view, in light of expressed congressional intent, is the approach that it takes knowledge, without actual ill will, that an act will harm a creditor, and then acting in the face of that knowledge, to establish malice. See Wisconsin Finance Co. v. Ries, 22 B.R. 343 (Bankr.W.D.Wis.1982). But this court is bound by decisions of the Eleventh Circuit, and so must apply the rule of Chrysler Credit Corporation v. Rebhan, and the reckless disregard standard of malice. English does not meet this standard. The sale of a yacht is not an inherently dangerous act. Without some special knowledge, the sale of a yacht is not reckless, and so cannot meet a reckless disregard standard for implied malice. Nor has TRC proved actual malice. There is no evidence that English knew, believed, or thought that his acts would be harmful to a third party, since he had developed the sales leads himself. Without his work, there would be no accretion to anyone. TRC’s losses are lost profits, on sales that they never made. There is no evidence that the sales would have ever been made without the efforts of English. The Maryland jury, applying the standard of a preponderance of the evidence and a presumption of harm to an exclusive dealer, reached the conclusion that English acted with malice. This court, having reviewed the entire trial transcript and exhibits, finds that it is not clearly convinced that English acted with malice. In fact, the court entertains serious doubt that the Maryland jury reached a proper conclusion on this issue, even on the lesser standard. But this is not an appellate court to the Maryland Circuit Court, nor is it necessary to reach that issue. We find, as a matter of both fact and law, that the evidence that English acted with malice, is not clear and convincing. WILLFUL In a similar analysis, the court is not convinced that English acted willfully. There is no doubt that he intentionally sold the yachts, and he had strong indications, if not certain knowledge, that Ta-Yang had some sort of agreement with TRC which impacted on their legal ability to sell him the Tayana 37, at least prior to July, 1985. Tinker v. Colwell speaks in terms of willfully performing a malum in se. “[W]e think a willful disregard of what one knows to be his duty, an act which is against good morals, and wrongful in and of itself, and which necessarily causes injury and is done intentionally, may be said to be done willfully and maliciously, so *803as to come within the exception.” 193 U.S. at 487, 24 S.Ct. at 509 (emphasis supplied). Selling a yacht is not a malum in se. Inducing a manufacturer to violate an exclusive distributorship may be, but inducing goes beyond the mere placing of an order. The manufacturer can and should enforce its own contracts for exclusivity. The court is troubled by Mr. Griffin’s testimony that English knew that Ta-Yang would sell him the yachts whether or not they had an exclusive with Cooper. Given one scintilla of evidence of contemporary intent to harm Cooper or knowledge or belief on the part of English that harm might come of these acts, this issue might have gone the other way. The only evidence of contemporary intent or belief is in the testimony of English. English’s testimony indicates that he felt that these were his customers, and that he attempted to obtain yachts for which he had orders from Cooper, who refused to supply them. Having sold them, he felt no obligation to convert his customers to another product. In his view, no harm came to Cooper, who was selling customers away from the Ta-Yang line. It is not clear whether Mr. English’s yacht purchasers were individuals who had to have a Tayana 37 no matter who sold it to them, or those individuals who were going to buy from English no matter what he sold them. In the first alternative, the harm to TRC is manifest, in the second, it is equally clear that there is no harm at all. The burden was on TRC to prove with clear and convincing evidence that the debtor’s acts were willful. By willful, this court does not mean a possibly harmless act, intentionally done. The act must be a breach of duty, which necessarily causes injury, and which is done intentionally. TRC has not carried this burden. This analysis of “willful” is consistent with that of the Eleventh Circuit. In Chrysler Credit Corp. v. Rebhan, the conduct complained of was the crime of conversion. The Eleventh Circuit analyzed the intentional commission of a crime and found that conduct to be willful. The Circuit did not reach the issue in this case: the willfulness of possibly harmless non-criminal conduct, intentionally done. DAMAGES In Maryland there is a presumption in an exclusive contract that sales of the product would have gone to the agent with the contract. The court does not find it necessary to reach the issue of whether the presumption is binding on this court in a dischargeability hearing. We assume, without deciding, that the presumption is valid. There is, however, significant evidence to rebut the presumption, and little to support it. The Maryland jury only had to find damage more likely than not, and they had a legal presumption working in favor of damages. This court must find that the damage was caused by the debtor on a clear and convincing standard in order to find that the debt is non-dischargeable. In light of the evidence introduced by debt- or that his contacts and sales techniques brought in the sales, and that the plaintiff actually refused to provide him product for these sales, we must conclude that the presumption of harm to Cooper is rebutted. It is certainly not evident on a clear and convincing standard that the actions of the debtor in bypassing the plaintiffs’ exclusive contract with Ta-Yang actually caused damage to the plaintiff. For the foregoing reasons, we find that English is entitled to discharge the award of the Maryland State Court in Anne Arun-del County Civil Action Case Number 1111288. A Final Judgment will be entered in accordance with these Findings of Fact and Conclusions of Law. DONE and ORDERED. . "To the extent that Tinker v. Colwell [citations omitted] held that a less strict standard is intended, and to the extent that other cases have relied on Tinker to apply a 'reckless disregard' standard, they are overruled.” Senate Report, No. 95-989. 95th Cong.2d Sess. (1978), 1978 U.S.Code Cong. & Admin.News 5787, 5865; House Report, No. 95-595, 95th Cong., 1st Sess. (1977), 1978 U.S.Code Cong. & Admin.News 5963, 6320.	01-04-2023	11-22-2022
https://www.courtlistener.com/api/rest/v3/opinions/8491396/	ORDER GRANTING DEBTORS’ OBJECTION TO STATE PROOFS OF CLAIM UNDER STATE ABANDONED PROPERTY LAWS J. VINCENT AUG, Jr., Bankruptcy Judge. INTRODUCTION The States of Arkansas, California, Colorado, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Maine, Missouri, Montana, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, Utah and Washington, and the Commonwealths of Kentucky, Maryland and Pennsylvania (collectively “States”) have filed claims for that property of the Debtors which would qualify as abandoned property under the various States’ abandoned property laws. On March 13, 1991, the Debtors filed their Objection to State Proofs of Claim Under State Unclaimed Property Laws (Doc. 3771), which was followed by a First Amendment (Doc. 5164) and a Second Amendment (Doc. 5261) thereto. The Objection was supported by the Official Committee of Unsecured Creditors and Official Committee of Bondholders of Allied Stores Corporation (Doc. 5525) and the Official Committee of the Federated Unsecured Creditors, the Official Committee of the Federated Pre-merger Bondholders and the Official Committee of the Federated Bondholders (Doc. 5527). New York State filed its separate Response (Doc. 4216); Arkansas and 16 other states filed their Response (Doc. 5634). Debtors then filed their Reply Memorandum (Doc. 5963). The hearing on the Objection was held on October 24,1991, at which time the parties filed a Stipulation of Facts and Authenticity of Documents (Doc. 6217). At the request of the Court, Post-Hearing Briefs were filed by the Debtors and Arkansas and 16 other states (Docs. 6501 and 6497 respectively). In accordance with Local Bankruptcy Rule 5.6(d), the claims of the nonrespond-ing states, California, Ohio, Oregon, Rhode Island, and South Carolina, and the Commonwealths of Kentucky and Maryland are hereby disallowed by virtue of their failure to respond to the Debtors’ Objection. We hold the remaining States’ claims1 to be preempted by the federal Bankruptcy Code as more fully set forth below. I.The States’ Claims Directly Conflict With and Are Therefore Preempted by Federal Bankruptcy Law The proper standard for supremacy clause analysis is set forth in Louisiana Pub. Serv. Comm’n. v. Federal Communications Comm’n., 476 U.S. 355, 106 S.Ct. 1890, 90 L.Ed.2d 369 (1986). In that case, the Supreme Court clearly delineated the cases where federal preemption of state law would occur: 1. Where Congress, in enacting a federal statute, expresses a clear intent to preempt state law; 2. Where there is outright or actual conflict between federal and state law; 3. Where compliance with both federal and state law is in effect physically impossible; 9764. Where there is implicit in federal law a barrier to state regulation; 5. Where Congress has legislated comprehensively, thus occupying an entire field of regulation and leaving no room for the states to supplement federal law; or 6. Where the state law stands as an obstacle to the accomplishment and execution of the full objective of Congress. Id. at 368-69, 106 S.Ct. at 1898. In short, if there is a conflict between state law and federal law, the latter shall prevail. The States’ claims, based on the States’ abandoned property laws, run afoul of the Bankruptcy Code in no less than three applications. The States have cited several cases for the proposition that class proofs of claim for unknown persons are valid; however, the cases are either distinguishable or are overcome by cases directly on point. In In re Evans Products, 60 B.R. 863 (S.D.Fla.1986), where the Federal Trade Commission had filed a proof of claim based upon a then-pending action it had filed against the debtor which sought equitable relief, including restitution, on behalf of an estimated 10,000 customers of the debtor, the District Court merely allowed an estimation of the claim for purposes of its allowance pursuant to 11 U.S.C. § 502(c). In the line of cases cited by the States involving claims by the Department of Energy, e.g., DOE v. West Texas Marketing Corp., 763 F.2d 1411 (TECA 1985), the thrust of the rulings was that the claims were for restitution and not for a penalty. That issue is not before this Court. The cases cited by the States for the proposition that state abandoned property laws should be allowed in the face of national banking laws, e.g., Anderson Nat’l Bank v. Luckett, 321 U.S. 233, 64 S.Ct. 599, 88 L.Ed. 692 (1944), are decisively narrowed in that while such state laws may not be preempted when the national bank is active and doing business, such state laws are preempted when up against bank liquidation statutes. See Roth v. Delano, 338 U.S. 226, 70 S.Ct. 22, 94 L.Ed. 13 (1949) (state escheat claims would be preempted if such interfered or conflicted with federal function of orderly bank liquidation); Rushton v. Schram, 143 F.2d 554 (6th Cir.1944) (decision of the Anderson court pertains to solvent national bank, not bank in liquidation). It must also be noted that state abandoned property laws have been found to be preempted when in conflict with various other types of federal legislation. See, United States v. Oregon, 366 U.S. 643, 81 S.Ct. 1278, 6 L.Ed.2d 575 (1961) (state abandoned property laws preempted by federal statutes regarding intestate veterans who die without heirs); Blue Cross & Blue Shield v. Dept. of Banking, 791 F.2d 1501 (11th Cir.1986) (state abandoned property laws preempted as applied to unclaimed federal health benefits); In re Standard Gas and Electric Company, 301 F.Supp. 1382 (D.Del.1969), aff'd., 433 F.2d 139 (3rd Cir.1970) (provision in utility company plan of liquidation approved by Securities Exchange Commission prevailed over state abandoned property law); Alabama v. Bowsher, 734 F.Supp. 525 (D.D.C.1990), aff'd., 935 F.2d 332 (D.C.Cir.1991) (state abandoned property laws preempted as applied to unclaimed funds held by U.S. Treasury). A. Federal Bankruptcy Laws Regarding Bar Date and Discharge Creditors whose claims are scheduled as undisputed are not required to file proofs of claim. 11 U.S.C. § 1111(a); Fed.Rule of Bankr.P. 3003(b)(1). Alternatively, creditors whose claims are unscheduled or are scheduled as contingent, disputed or unliq-uidated are required to submit proofs of claim, or their claims will be disallowed. 11 U.S.C. § 1111(a); Fed.Rule Bankr.P. 3003(c)(2). Allowing the States’ claims would permit this latter type of creditor to escape the mandates of a bar date and discharge. The Bankruptcy Code requires creditors to assert their claims in a timely fashion or to lose them. In fact, in this Court’s Order of May 7, 1990, a bar date was firmly established in this case as follows: 977Creditors who are required to file a proof of claim ... that fail to file a proof of claim on or before the Bar Date shall be forever barred, estopped or enjoined from ... asserting any claims that such creditor may have against Debtors or any particular Debtor.... If allowed, the States’ claims would eliminate this requirement for the least diligent of the Debtors’ creditors. Furthermore, allowing the States’ claims would work a detriment to the Debtors’ creditors who did file timely proofs of claims, since, to the extent that creditors who must file proofs of claim fail to do so, these “unclaimed” funds are to be made available for distribution to the Debtors’ other creditors. While sparse, the case law on this matter is consistent. In In re Alan Wood Steel Co., 5 B.R. 620 (Bankr.E.D.Pa.1980), where the state claimed funds that became es-cheated prior to the filing of the bankruptcy petition, the court disallowed the claim on the following grounds. First, the court reasoned that there is no need to worry about “self-service by first comers” when the estate is in a bankruptcy proceeding, and, second, the court reasoned that it would be against the policy of the bankruptcy statutes to reserve funds for those creditors who did not file claims. In the recent case of In re Thomson McKinnon Securities, Inc., 125 B.R. 88, 93 (Bankr.S.D.N.Y.1991), aff'd. without opinion (S.D.N.Y.1991), where the state claimed funds based on its abandoned property laws, the court held that the state laws were in “direct conflict with the distribution scheme established under the federal bankruptcy laws” and, therefore, that the state law “must give way to the distribution scheme established under the federal bankruptcy laws.” The Thomson court also noted that the state’s claim did not reflect a right to payment arising out of any transactions, dealings or contracts between the state and the debtor and that allowing the state’s claim would be detrimental to those creditors of the debtor who did file timely proofs of claim. Id. B. Federal Bankruptcy Laws Regarding Unclaimed Dividends It must be admitted that in this large bankruptcy, as well as in most large bankruptcies, there will be a fair number of creditors who simply will not negotiate their distribution checks for one reason or another. Undoubtedly, some creditors will ■never even receive their distribution checks because the Debtors are bound to have incorrect and/or old addresses for a number of their creditors. But the Code and the case law have addressed this issue: dividends which go unclaimed, for any reason, revert to the debtor in a Chapter 11 case. The issue of unclaimed dividends is governed by 11 U.S.C. § 347 which states in pertinent part as follows: (b) Any security, money or other property remaining unclaimed at the expiration of the time allowed in a case under chapter ... 11 ... becomes the property of the debtor.... The case law on this question is equally clear. See In re Thompson's Estate, 192 F.2d 451 (3rd Cir.1951) (state escheat not allowed against unclaimed dividends since by the very terms of § 66 of the Bankruptcy Act they go back to the debtor); In re George Rodman, Inc., 50 B.R. 313 (Bankr.N.D.Okla.1985) (Bankruptcy Code regulates distribution of unclaimed property so that state escheat is not applicable); In re Goldblatt Bros., Inc., 132 B.R. 736 (Bankr.N.D.Ill.1991) (§ 347(b) “provides a clear bright-line rule that unclaimed funds are automatically to be returned to the debtor. Congress thereby ensured that estates could be closed without costly protracted litigation over undistributed funds among the debtor, its creditors under the plan, or state treasurers under state laws of es-cheat”). Since most if not all of the anticipated unclaimed dividends in this bankruptcy would qualify as abandoned property claims under the states’ claims, allowing such claims would work an impermissible end run against 11 U.S.C. § 347(b). 978C. Federal Bankruptcy Laws Regarding Equality of Distribution The Bankruptcy Code requires equal treatment for creditors in the same class. Notwithstanding any applicable nonbank-ruptcy law, a plan shall— ... provide the same treatment for each claim or interest of a particular class, unless the holder of a particular claim or interest agrees to a less favorable treatment of such particular claim or interest. 11 U.S.C. § 1123(a)(4). However, not all the States have identical abandoned property laws or methods of distribution. For example, some States allow interest on claims and some States do not; relevant abandonment periods vary among the States; and the various States use various procedures to locate creditors. Allowing the States’ claims would, in effect, create 25 additional separate estates which would result in unequal distribution to creditors in the same class. D. Debtors Are Not Benefitting from Wrongdoing There is an exception to the above-described preemption of state abandoned property laws, but such exception is not applicable in the present case. In In re Berry Estates, Inc., 812 F.2d 67 (2nd Cir.1987), the debtor, who had been found guilty of charging excessive rent for rent-controlled apartments, was ordered by a state court to return the excess rent to the tenants and to pay the excess rent into the county clerk to be held in escrow. Subsequently, the debtor filed a petition in Chapter 11. The state comptroller filed a claim for excess rent on behalf of unknown tenants and those who had moved from the apartments before and during the litigation. The Second Circuit held that the unclaimed funds should not revert to the debtor but should go to the state comptroller as abandoned property if not claimed by the tenants within five years from the deposit with the county clerk. The rationale of the Berry court was two-fold. First, the Second Circuit held that a debtor should not be able to profit from its own misconduct: A determination in bankruptcy that Berry was entitled to keep the unrefunded excess rents would fly in the face of New York state’s regulatory powers and the deference pledged to them by the bankruptcy laws. Id., at 71. The court noted that Congress neither intended for bankruptcy laws to abrogate the states’ police powers nor that bankruptcy court would be a haven for wrongdoers. See, e.g., Kelly v. Robinson, 479 U.S. 36, 107 S.Ct. 353, 93 L.Ed.2d 216 (1986) (criminal restitution not dischargeable); Mid Atlantic Nat’l. Bank v. New Jersey Dept. of Environmental Protection, 474 U.S. 494, 106 S.Ct. 755, 88 L.Ed.2d 859 (1986) reh’g denied, 475 U.S. 1090, 106 S.Ct. 1482, 89 L.Ed.2d 736 (1986) (state environmental protection laws not abrogated by bankruptcy laws); In re Flight Transp. Corp. Securities Litigation, 730 F.2d 1128 (8th Cir.1984), cert. denied, 469 U.S. 1207, 105 S.Ct. 1169, 84 L.Ed.2d 320 (1985) (property obtained by fraud of the debtor, or by other tort, is not properly part of debtor’s estate). We do not find it necessary to address the issue of whether or not unclaimed property laws are police powers of the state because, unlike Berry, there had been no adjudication in any state court that the Debtors in this case are not in compliance with any state law. The States had ample time and opportunity prior to January 15, 1990 to bring claims against the Debtors. Further, the States may always move for relief from stay in order to pursue their alleged claims against the Debtors in the appropriate state forum. In any event, this Bankruptcy Court is not the place to litigate alleged violations of 25 different state abandoned property laws. Second, the Berry court noted the importance of the fact that there were no other creditors with claims against the debtor, id. at 71, which fact served to amplify the benefit to be reaped by the debtor should the debtor be allowed to retain the unre-funded rent excesses. Unlike Berry, there are many other creditors of the Debtors in this case. It can hardly be said that these Debtors filed their bankruptcy petitions to 979escape any liability in the states based on abandoned property laws. The States have alleged that the debtors “wrongfully” listed as contingent the claims of approximately 6,000 former shareholders of the Debtors who did not tender their shares in connection with the Allied-Campeau merger in 1986 and the Federated/Campeau merger in 1988, thereby gaining an advantage when some of these creditors failed to file proofs of claim. The States also claim that they should have received notice directly from the Debtors regarding the motion to deny these claims. This Court has already entered an order granting the above-referenced motion. If this argument is to be pursued, 11 U.S.C. § 502(j) and Bankruptcy Rule 3008 provide the appropriate procedural vehicle. The States have also alleged that the Debtors knew or should have known that they were using out-dated mailing lists and, therefore, that the Debtors knew or should have known that notice to their creditors would be inadequate. This argument is without merit. First, every large corporate debtor is going to have numerous creditors for which it has old or incorrect addresses. This problem is cured by notice by publication. Second, this simply does not give rise to an act of such wrongdoing to allow an exception to federal preemption. II. Post-petition Escheat of Pre-petition Obligations Are Also Preempted by Federal Bankruptcy Law By virtue of the very nature of abandoned property, in that it must go unclaimed for a certain period of time before becoming “abandoned” property, there are three categories of abandoned property claims which may be found to exist in this bankruptcy, as in all bankruptcies. First, there are claims which would qualify as abandoned property claims as of the date of the filing of the bankruptcy petition. As we have discussed above, we hold these claims to be preempted by federal bankruptcy laws regarding the establishment of a bar date, distribution of unclaimed dividends and equality of distribution, provided the debtor is not benefitting from any wrongdoing which has been previously solidified in the appropriate forum. Second, there are claims which would qualify as abandoned property claims after the date of the filing of the bankruptcy petition but before the confirmation of the plan. While claims do not have to be fixed or matured or reduced to judgment to qualify as claims, 11 U.S.C. § 101(5), a creditor must be an entity that has a “claim against the debtor that arose at the time of or before the order for relief concerning the debtor”. 11 U.S.C. § 101(10)(A) (emphasis added). State claimants with abandoned property claims arising after the date of the filing of the bankruptcy petition violate the definition of creditor as set forth in the Bankruptcy Code. Furthermore, the post-filing metamorphosis of such “regular” claims into abandoned property claims would create an extreme administrative burden on the Debtors, causing the need for almost daily amendments to the bankruptcy schedules and notices to creditors regarding the status of their claims. Third, there are claims which would qualify as abandoned property claims after confirmation of the debtors’ plan. However, confirmation of the plan results in the discharge of all prepetition obligations. 11 U.S.C. § 1141(d)(1). To allow these claims as abandoned property claims would essentially eviscerate the Bankruptcy Code concept of discharge. Of course, it is not to say that the post-petition Debtors are free to violate state abandoned property laws. Any obligations of the Debtors which arise post-petition shall be treated by the Debtors as “business as usual.” These obligations may eventually give rise to abandoned property under state abandoned property laws. III. States Are Not § 543(b) Custodians We find the Debtors’ argument that the States’ role as “custodians” under their abandoned property laws required the states to turn over the abandoned property *980to the debtor under 11 U.S.C. § 543(b) to be without merit. The purpose of § 543(b) is to cause a transfer of property from the debtor’s custodian to the trustee. Under abandoned property laws, the states are custodians for the creditors. IV. Class Proof of Claim We find that it is not necessary to make a ruling on the Debtors’ argument that the States are not in compliance with the Bankruptcy Code and Rules regarding class proofs of claim. However, it would seem inherently unfair to disallow a class proof of claim based on abandoned property laws because verified names and addresses of the class members might not be available. If names and addresses could be ascertained with certainty, undoubtedly many of the abandoned claims would no longer be abandoned. Similarly, it would be metaphysically impossible to have an abandoned property owner as the class representative since as soon as he came forward to represent the class, his claim would no longer be abandoned. Such should not be fatal to this type of class proof of claim. V. Conclusion Without discounting the good purpose behind state abandoned property laws, the Bankruptcy Code has in place an elaborate system for the distribution of the debtor’s property, which system serves to protect both creditors and debtors. The application of state abandoned property laws would conflict with and serve to confuse the bankruptcy distribution process. Furthermore, in a case of this magnitude, which not only received much “free press”, but wherein notice of the bankruptcy was given to all creditors through extensive national publication in The Wall Street Journal, The New York Times, and numerous other major newspapers, this court is hard pressed to muster much sympathy for those persons who are the “rightful” owners of abandoned property. Even in a court of equity, there comes a time when the creditor must step forward and protect his own rights. While designed to protect, state abandoned property laws must yield to the federal Bankruptcy Code. IT IS SO ORDERED. . The remaining States’ claims were more clearly defined at the October 24, 1991 hearing and by Post-Hearing Brief to be for that property which was presumed abandoned under each State’s abandoned property laws prior to the filing of the Debtors’ petitions on January 15, 1990, and which property was not previously reported and paid by the Debtors as well as for that property which had become presumptively abandoned since January 15, 1990.	01-04-2023	11-22-2022

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