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https://www.courtlistener.com/api/rest/v3/opinions/1510603/ | 821 F. Supp. 574 (1993)
The STATE OF CALIFORNIA, on behalf of the STATE DEPARTMENT OF TOXIC SUBSTANCES, Plaintiff,
v.
SUMMER DEL CARIBE, INC.; Dale E. Summer, an individual; Lynn J. Rodich, an individual; American National Can Co.; Beatrice Hunt/Wesson; Continental Can Co.; Crown Cork and Seal Co., Inc.; Del Monte Corp.; Castle & Cooke; *575 Gencan Packaging, Inc.; Kern Foods Liquidating Trust; Nestle Food Corp.; Silgan Container Corp.; Pan Pacific Fisheries, Inc.; Pacific Coast Producers; Progresso Foods, Inc.; Starkist Foods, Inc.; The Sherwyn-Williams Co.; TriValley Growers Container Division, Inc.; United States Can Co.; TMA/Noracal, Defendants.
No. C-89-3754 SAW.
United States District Court, N.D. California.
April 15, 1993.
*576 Daniel Lungren, CA Atty. Gen., Susan Fiering, Deputy Atty. Gen., Oakland, CA, for plaintiff.
Pillsbury, Madison & Sutro, Sarah Flanagan, James Meeder, James Wyatt, Beveridge & Diamond, George Wolff, San Francisco, CA, Robert Crow, Boornazian, Jensen & Garthe, Oakland, CA, James P. Bennett, *577 Kevin Haroff, Morrison & Foerster, San Francisco, CA, for defendants.
MEMORANDUM AND ORDER
WEIGEL, Senior District Judge.
BACKGROUND:
Plaintiff sues Defendants for the cost of an environmental cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. ("CERCLA"). Defendants are seventeen can companies, a metal reclamation facility, two individual officers of that facility, and a corporation that operated a site adjacent to the facility. The Court stayed the action against all Defendants except Summer del Caribe, Inc., Dale Summer, Lynn Rodich, and Castle & Cooke pending the results of an investigation into the nature and extent of contamination at the site. The parties stipulated to stay the action against Summer del Caribe and Dale Summer.[1] The remaining Defendant is Castle & Cooke ("Defendant").
Defendant manufactures cans. As a by-product of its can manufacturing process, Defendant generates "solder dross." One-third of the material comprising solder dross can be reclaimed and reused as solder. The remaining two-thirds are an unusable material containing high levels of lead and zinc compounds.
From 1975 to mid-1982, Defendant sold its solder dross to Summer del Caribe ("Summer"), which operated a metal reclamation facility in Richmond, California. Summer melted the solder dross to reclaim and resell the reusable portion. The unusable remainder of the solder dross was placed in drums and stored at Summer's facility. The drums remained on the site from 1975 through 1982. By late 1982, the drums had corroded and solder dross was leaking onto Summer's site. Subsequently Summer buried some of the solder dross drums on its site.
Plaintiff learned of Summer's storage and burial of the drums in late 1982. Test samples taken by Plaintiff in December 1982 showed that the buried and unburied solder dross drums contained hazardous levels of zinc and lead. Since that time Plaintiff has spent over $1.6 million to clean up the site. Plaintiff sues to recover these cleanup costs.
In a motion for summary judgment, Plaintiff sought a determination that, by selling a manufacturing by-product containing hazardous material to the metal reclamation facility, Defendant arranged for the "disposal or treatment" of a "hazardous substance" within the meaning of CERCLA, and is therefore liable for the cleanup costs under CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3). In a cross motion for summary judgment, Defendant sought a determination that it was not liable for cleanup costs under CERCLA.
On June 30, 1992, the Court granted summary judgment for Defendant. Relying on its reading of 3550 Stevens Creek Associates v. Barclays Bank of California, 915 F.2d 1355 (9th Cir.1990), cert. denied, ___ U.S. ___, 111 S. Ct. 2014, 114 L. Ed. 2d 101 (1991), the Court determined that a substance must be a "hazardous waste" under the Solid Waste Disposal Act ("SWDA") in order for "disposal" or "treatment" liability under CERCLA to attach. Because the Court concluded that the solder dross Defendant sold was not a hazardous waste within the meaning of the SWDA, it ruled that Defendant cannot be subject to disposal liability under CERCLA § 107(a)(3).
Plaintiff now moves for reconsideration of the June 30, 1992 order.
DISCUSSION:
The Court has discretion to reconsider interlocutory orders at any time prior to final judgment. Nobell v. Sharper Image Corp., 1992 WL 421456, at *6, 1992 U.S.Dist. LEXIS 20114, at *1 (N.D.Cal. June 12, 1992); Combs v. Nick Garin Trucking Co., 825 F.2d 437, 441 (D.C.Cir.1987). Such motions may be justified on the basis of an intervening change in the law, or the need to correct a clear error or prevent manifest injustice. Pyramid Lake Paiute Tribe of Indians v. Hodel, 882 F.2d 364, 369 n. 5 (9th *578 Cir.1989), discussing 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4478 at 790. To succeed in a motion to reconsider, a party must set forth "facts or law of a strongly convincing nature to induce the court to reverse its prior decision." Steiny and Co., Inc. v. Local Union 6, Int'l Brotherhood of Electrical Workers, 1991 WL 516835, at * 2, 1991 U.S.Dist. LEXIS 18804, at * 5 (N.D.Cal. Dec. 19, 1991) (citing Great Hawaiian Fin. Corp. v. Aiu, 116 F.R.D. 612, 616 (D.Haw.1987)).
In arguing for reconsideration, Plaintiff alleges that the Court's determination that a substance must be a "hazardous waste" under the SWDA in order for disposal liability under CERCLA to attach, is inconsistent with the decisions of the other courts that have addressed this issue and with the Congressional intent in enacting CERCLA. Plaintiff asserts that Stevens Creek does not require that a substance be a hazardous waste under the SWDA for CERCLA liability to attach. Plaintiff further contends that requiring a substance to be a hazardous waste under SWDA before imposing CERCLA liability will undermine both CERCLA's remedial purpose and the Congressional intent that CERCLA be broadly construed.
Reconsideration is justified on the grounds suggested by Plaintiff. Accordingly, the Court revisits the question whether a substance must be a "hazardous waste" under the SWDA in order for a defendant to be liable for cleanup costs under CERCLA.
I. CERCLA
Congress passed CERCLA in an effort to address the threat to public health and the environment caused by the disposal of hazardous substances. United States v. Ward, 618 F. Supp. 884, 892 (E.D.N.C.1985) (citing S.Rep. No. 848, 96th Cong., 2d Sess. 2 (1980)). A fund was created, commonly referred to as the "Superfund," to pay for the cleanup of the damages incurred at disposal sites and to ensure the recoupment of past and future response costs, so that no portion of the burden would fall on the public. United States v. Pesses, 794 F. Supp. 151 (W.D.Pa. 1991) and Order Adopting Magistrate's Decision (W.D.Pa., Mar. 30, 1992) (citing United States v. Shaner, 20 Chem. Waste Lit.Rep. 1130, 1132-33, 1991 WL 9352 (E.D.Pa.1991)). Congress intended that responsible parties be held strictly liable for cleanup costs. See New York v. Shore Realty Corp., 759 F.2d 1032, 1042 (2nd Cir.1985); see also Levin Metals Corp. v. Parr-Richmond Terminal Co., 799 F.2d 1312, 1316 (9th Cir.1986) (citing Shore Realty with approval).
To impose cleanup liability under CERCLA, a plaintiff must prove four elements, namely, that: (1) a release of a hazardous substance occurred, (2) at a site which is a facility, (3) causing the plaintiff to incur response costs, and (4) the defendant is a responsible person under the terms of the statute.[2] 42 U.S.C. § 9607(a); United States v. Marisol, Inc., 725 F. Supp. 833, 837 (M.D.Pa.1989).
Defendant does not contest that the first three elements are satisfied. The sole question before the Court is whether Defendant is a responsible party under the terms of the statute. Under 42 U.S.C. § 9607(a)(3), liability is imposed on:
any person who by contract, agreement, or otherwise arranged for disposal or treatment ... of hazardous substances owned or possessed by such person, by any other party or entity, at any facility ... owned or operated by another party or entity and containing such hazardous substances....
42 U.S.C. § 9607(a)(3) (emphasis added). Thus, under this section, to hold Defendant responsible for cleanup costs, Plaintiff must show that: (1) solder dross is a hazardous substance, (2) there was a disposal or treatment of solder dross, and (3) Defendant arranged for that disposal or treatment.
*579 A. "Hazardous Substances" under CERCLA
Under CERCLA, "hazardous substances" include, inter alia, any substances so designated by the Environmental Protection Agency ("EPA") pursuant to § 9602 or by any of four other environmental statutes, and any waste having certain characteristics defined by the EPA. 42 U.S.C. § 9601(14); see 40 C.F.R. 261.20 et seq.
Defendant does not dispute that the solder dross stored at the Summer site contained hazardous material. Plaintiff's investigations of samples taken from the site showed that the dross exhibited the requisite degree of toxicity to be considered hazardous under the CERCLA definition of hazardous substance. Defendant contends, however, that CERCLA defines "disposal" and "treatment" by reference to the definitions of those terms in the SWDA and that solder dross is not regulated under the SWDA. CERCLA, 42 U.S.C. § 9601(29). The SWDA, notes Defendant, defines "disposal" and "treatment" in terms of "solid wastes" or "hazardous wastes," not in terms of "hazardous substances." Since the terms "disposal" and "treatment" are defined with reference to the SWDA, and not CERCLA, Defendant contends that only those substances qualifying as "solid waste" or "hazardous waste" under the SWDA can create disposal or treatment liability under CERCLA. In support of this argument, Defendant cites the Ninth Circuit decision in 3550 Stevens Creek Associates v. Barclays Bank of California, 915 F.2d 1355.
In Stevens Creek a building owner sued the previous owner who had installed asbestos in the building to recover costs incurred in removing that asbestos. The court ruled that the party who installed insulation that contained asbestos in a building was not liable under CERCLA for "disposal of a hazardous substance." While the court assumed that the insulation was a "hazardous substance" under CERCLA, in holding that the building owner was not liable, it stated that "[o]n its face `disposal' pertains to `solid waste or hazardous waste,' not to building materials...." Id. at 1361.
Defendant urges that given the Ninth Circuit's use of the terms "solid waste" and "hazardous waste" rather than "hazardous substance" to define the materials for which disposal or treatment liability attaches, under Stevens Creek only the disposal of those substances designated as SWDA-regulated "solid wastes" or "hazardous wastes" can create CERCLA liability. However, a close reading of Stevens Creek reveals that although it used the terms "solid waste" and "hazardous waste" rather than "hazardous substance," the Ninth Circuit did not intend its decision to be read as Defendant urges. The Stevens Creek court was not asked to decide whether a hazardous substance must be a "hazardous waste" under the SWDA for disposal liability under CERCLA to attach. Rather, it was deciding whether installation of insulation containing asbestos constitutes "disposal." The court explained its substitution of the term "hazardous waste" for "hazardous substance," noting that "in the context of CERCLA, hazardous substances are generally dealt with at the point when they are about to, or have become, wastes." Id. at 1362.
Furthermore, the reading of Stevens Creek that Defendant urges would contradict or render moot important portions of CERCLA. CP Holdings v. Goldberg-Zoino & Associates, 769 F. Supp. 432, 437 (D.N.H.1991) (criticizing Stevens Creek). Section 9607(a) of CERCLA explicitly applies to the "disposal or treatment of hazardous substances," not merely to the disposal or treatment of hazardous waste. 42 U.S.C. § 9607(a)(3) (emphasis added). The drafters of CERCLA appear to have referred to sections 6903(3) and 6903(34) of the SWDA only to define the actions of "disposal" and "treatment," not to define the objects of those actions, the materials to be disposed of or treated. See State of California v. Verticare. No. C-92-1006 MHP, at 20 (N.D.Cal. Mar. 2, 1993). If the Court adopts the reading of Stevens Creek that Defendant urges, hazardous substances which are not hazardous wastes would be excluded from the statute's reach. Such a reading would be illogical in light of the use of the word "hazardous substance."
Finally, it is consistent with the purpose of CERCLA to impose liability under CERCLA for the disposal or treatment of *580 substances which do not meet the definition of waste under the SWDA. CERCLA and the SWDA serve different purposes. Recognizing the distinct purposes, "Congress and the EPA have carefully distinguished between wastes, to which the [SWDA] applies, and substances, to which CERCLA applies...." B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1202 (2d Cir.1992) (emphasis added).
The SWDA is preventative and regulates routine handling of potentially hazardous materials. For SWDA regulations to apply, the site must meet "threshold quantity or concentration requirementsconsiderations which are irrelevant in defining hazardous substances under CERCLA." Id. at 1202. CERCLA, on the other hand, is curative. It imposes liability when a release occurs that warrants a cleanup responseregardless of the amount of hazardous substances present. Id. Given the distinct purposes of the acts, it follows that they cover different materials. An EPA determination that solder dross is not sufficiently dangerous to justify imposing the most stringent regulations to govern its day to day handling under the SWDA, does not imply that the harm caused by solder dross's improper disposal is also insufficient to justify regulation under CERCLA. Id.
In sum, the explicit language of CERCLA, the apparent intent of the drafters, and the distinct purposes of CERCLA and the SWDA compel the conclusion that a substance need not be a "hazardous waste" under the SWDA for liability under CERCLA to attach. Nor does Stevens Creek dictate a contrary result.
B. "Disposal" and "Treatment" under CERCLA
Defendant contends that even if solder dross can potentially give rise to disposal and treatment liability, no "treatment" occurred at the Summer reclamation site and Summer, alone, was responsible for the "disposal."
CERCLA defines "disposal" and "treatment" by reference to the definitions of those terms in the SWDA. 42 U.S.C. § 9601(29). "Disposal" is defined as:
the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters.
42 U.S.C. § 6903(3).
"Treatment" is defined as:
any method, technique, or process, including neutralization, designed to change the physical, chemical, or biological character or composition of any hazardous waste so as to neutralize such waste or so as to render such waste nonhazardous, safer for transport, amenable for recovery, amenable for storage, or reduced in volume....
42 U.S.C. § 6903(34).
Summer heated the solder dross so that the metals it contained would melt and separate from the nonmetal impurities. See Decl. of Frank Guance in Reply. The process changed the physical character of the solder dross and allowed Summer to recover the reusable portion. Inducing this change constitutes "treatment" of a hazardous substance within the meaning of the statute.[3] Moreover, after treating the solder dross, Summer buried the remaining unusable material which contained high levels of lead and zinc compounds. This constitutes a "disposal" within the meaning of the statute. Thus, both a "disposal" and "treatment" occurred at the site.
*581 C. "Arranged" under CERCLA
Defendant argues that even if solder dross was disposed of or treated at the Summer site, Defendant did not "arrange for" its disposal or treatment. The term "arranged" is not defined by the statute. Whether a transaction constitutes an "arrangement for the disposal or treatment" of a hazardous substance is a fact-specific inquiry. Florida Power & Light Co. v. Allis-Chalmers Corp., 893 F.2d 1313, 1317 (11th Cir.1990). Although the Ninth Circuit has not yet examined whether a party which sells a by-product of its manufacturing process to another party for reclamation "arranged" for disposal or treatment under CERCLA, the Ninth Circuit has stated that CERCLA is to be construed broadly to accomplish its remedial purpose. Wilshire Westwood Associates v. Atlantic Richfield, 881 F.2d 801, 804 (9th Cir.1989); Stevens Creek, 915 F.2d at 1363.
Defendant argues that it is immune from liability because in selling solder dross to Summer, it was selling a useful product, rather than arranging for disposal or treatment of a waste product. However, characterizing a transaction as a "sale" instead of an "arrangement for disposal or treatment" does not protect a party from liability. See United States v. Conservation Chemical Co., 619 F. Supp. 162, 240-241 (W.D.Mo.1985); New York v. General Electric Co., 592 F. Supp. 291, 297 (N.D.N.Y. 1984). Rather, the relevant inquiry is "who decided to place the waste into the hands of a facility that contains hazardous wastes." Conservation Chemical Co., 619 F.Supp. at 240. In this case, Defendant did so.
Furthermore, the "sale of a useful product" defense applies when the sale is of a new product, manufactured specifically for the purpose of sale, or of a product that remains useful for its normal purpose in its existing state.[4] In contrast, the courts have consistently rejected the "sale of a useful product" defense when the purpose of the sale is to get rid of or treat a waste or by-product.[5] Here, the solder dross sold by Defendant was not manufactured specifically for purpose of sale. Rather, it was a by-product of Defendant's can manufacturing process. Defendant's sale of solder dross was accomplished to get rid of or treat the by-product of its manufacturing process. Thus, Defendant's attempt to characterize the transfer as a sale rather than an arrangement for disposal is unpersuasive.
Defendant further argues that liability under CERCLA is limited to the party who both owned the hazardous substance and decided how to dispose of or treat it.[6] The Ninth Circuit has never adopted this requirement. Moreover, this argument was expressly rejected as a per se rule in Florida Power, 893 F.2d at 1318. The court instead found that even though a manufacturer does not make the critical decisions as to how, when, and by whom a hazardous substance is to be disposed, the manufacturer may still be liable. The dispositive inquiry is whether the *582 manufacturer intended to otherwise dispose of hazardous waste when it sold the product. Id. at 319[7]; accord, Pesses, 794 F. Supp. 151 (Liability under CERCLA attaches even where the defendant does not retain ownership or control of the material, as long as there is evidence that the defendant otherwise arranged for the disposal or treatment).
Defendant disposed of hazardous waste when it sold the solder dross to Summer. The only options available to Defendant were to dispose of the solder dross itself, reclaim the useable portion and dispose of the remaining hazardous substance, or transfer it to a third party. In choosing the third option, Defendant, thus, arranged for treatment and disposal under CERCLA.
Accordingly, IT IS HEREBY ORDERED that:
(1) Plaintiff's Motion to Reconsider is GRANTED;
(2) Defendant's Motion for Summary Judgment is DENIED; and
(3) Plaintiff's Cross-motion for Summary Judgment is GRANTED.
NOTES
[1] The record does not reflect a stay against Lynn Rodich. However, because Mr. Rodich was an officer of Summer del Caribe and no further proceedings against him have gone forth, it appears the action against him has also been stayed.
[2] Section 9607(a) of CERCLA holds four classes of persons or entities liable for cleanup costs: (1) the current owner and operator of a vessel or facility, (2) the former owners or operators of a facility at the time of disposal of any hazardous substance, (3) any persons who arranged for disposal or treatment of a hazardous substance at any facility owned or operated by another person, and (4) transporters of such substances to a facility. 42 U.S.C. § 9607(a)(1)-(4).
[3] Defendant asserts that this process does not constitute "treatment" because Summer did not render the solder dross "amenable to recovery," but, rather, conducted the actual reclamation. Defendant differentiates between treatment and reclamation by reference to regulations promulgated by the EPA under the SWDA. However, these regulations define "treatment" to include "any process ... designed ... so as to recover ... material resources from the waste." 40 C.F.R. § 260.10. Because the reclamation process performed by Summer "was designed to recover material resources from the waste" it qualifies as treatment within the meaning of the regulations. See also, Pesses, 794 F.Supp. at 157 (melting scrap materials to make alloys constitute's "treatment" under CERCLA).
[4] See, e.g., Prudential Insurance Co. of America v. United States Gypsum, 711 F. Supp. 1244, 1254 (D.N.J.1989) (sale of asbestos containing material to be used in building construction does not subject a party to liability under CERCLA); Edward Hines Lumber Co. v. Vulcan Materials Co., 685 F. Supp. 651, 654, 656 (N.D.Ill.1988), aff'd on other grounds, 861 F.2d 155 (7th Cir.1988) (sale of chemicals to a wood treatment facility for use in the manufacturing process was a sale of a true product, not of a waste or a by-product and no liability attaches under CERCLA); Florida Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313, 1319 (11th Cir.1990) (sale of PCB filled transformers for continued use as transformers was a mere sale of a product and the manufacturers are not liable under CERCLA).
[5] See e.g., Pesses, 794 F.Supp. at 156 (sale of scrap material to be processed is an arrangement for treatment or disposal); General Electric Co., 592 F.Supp. at 297 (sale of used transformer oil to be used for dust control was an arrangement for treatment or disposal under CERCLA); United States v. A & F Materials, Inc., 582 F. Supp. 842, 845 (S.D.Ill.1984) (sale of spent caustic solution used to neutralize waste oil was arrangement for treatment or disposal under CERCLA); Conservation Chemical Co., 619 F.Supp. at 240-41 (sale of fly ash to neutralize wastes was arrangement for treatment or disposal under CERCLA).
[6] Defendant relies on Conservation Chemical, 619 F.Supp. at 241; C. Greene Equipment Corp. v. Electron Corp., 697 F. Supp. 983, 987 (N.D.Ill. 1988); Jersey City Redevelopment Authority v. PPG Industries, 655 F. Supp. 1257, 1260 (D.N.J. 1987); and State of California v. Verticare Inc., No. C-92-1006 MHP, at 17 (Mar. 1, 1993).
[7] While the court in Florida Power, 893 F.2d 1313, found that sale of a useful manufactured product without more could not subject a party to liability, this does not aid Defendant because solder dross is a waste by-product of its can manufacturing business and not a useful manufactured product in its own right. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510618/ | 148 N.J. Super. 194 (1977)
372 A.2d 374
JOAN GERSON, PLAINTIFF,
v.
SAUL GERSON, DEFENDANT.
Superior Court of New Jersey, Chancery Division.
Decided February 16, 1977.
*196 Mr. Sheldon M. Liebowitz for plaintiff (Messrs. Liebowitz, Krafte & Liebowitz, attorneys).
Mr. Elmer J. Skiba for defendant (Messrs. Skiba & Atkins, attorneys).
SORKOW, J.J.D.R.C., Temporarily Assigned.
This matter comes before the court on plaintiff's motion for an order to permit her accountant to inspect the financial books and records of the corporation in which defendant is a 50% stockholder and is actively engaged as director.
The corporation, Gerson-Ogden, Inc. is a corporation of the State of New York and is authorized to do business in *197 the State of New Jersey. The issued and outstanding stock is equally owned by defendant and his brother. The brother has, through defendant's counsel and by letter from his tax attorney, indicated his objection to plaintiff's examination, and defendant further maintains that as the corporation is a New York entity and not a party to the instant action this court cannot grant the relief plaintiff seeks.
Discovery is limited in matrimonial actions except for "good cause shown." R. 4:79-5. The reasons for the limits are well stated by defendant: to avoid harassment and confrontation of the parties and further aggravation of their hostilities toward each other. See comment to R. 4:79-5. The term "good cause shown" is flexible and each case for discovery must show its own good cause. Tholander v. Tholander, 34 N.J. Super. 150 (Ch. Div. 1955). However, the recent trend in general civil cases to broad and liberal discovery, Myers v. St. Francis Hospital, 91 N.J. Super. 377 (App. Div. 1966); Gureghian v. Hackensack Hospital, 109 N.J. Super. 143 (Law Div. 1970), should, where good cause is shown, be extended to the matrimonial area. For how else in a complex financial estate could the first two of the three requirements for equitable distribution found in Rothman v. Rothman, 65 N.J. 219, 232 (1974), be determined by a trial court without first establishing the value of the assets subject to equitable distribution? Indeed, it is apparently well settled now that a trial judge enters upon a three-step inquiry in a matrimonial proceeding where equitable distribution is in issue. The steps are (1) determination of the specific property subject to equitable distribution; (2) determination of value, and (3) determination of the allocation equitably among the parties. Rothman v. Rothman, supra. To determine valuation of the stock and its income-producing qualities requires sophisticated discovery by an accountant. This means more than a review by counsel of the furnished corporate tax returns and the naked answers to interrogatories or depositions. Of necessity it requires an examination and evaluation of corporate assets, good will, *198 capital accounts, cash flow, tax-sheltered income, travel and entertainment expenses, tax status of the corporation, etc. This court finds that where such a complex estate exists there is good cause shown for additional discovery to establish valuation and the income producing quality of a party's stock.
Another issue in this motion is the authority of this court to order discovery of the books and records of a corporation, 50% owned and operated by defendant husband, when the other 50% stockholder objects to the examination.
Defendant states in his memorandum that the corporation is a New York corporation and the books and records are in New York. It is made clear that the other 50% owner of the corporation's stock objects to the plaintiff accountant examining the books and records of this closely held corporation. Yet, in defendant's answers to interrogatories, which interrogatories were attached to plaintiff's moving papers, a New Jersey address is given for the corporation, and the books and records of the corporation are located with a corporate accountant in Fair Lawn, New Jersey.
Shall discovery here be blocked by the fact that the corporation is an out-of-state entity and not a party to the suit? As counsel has pointed out, there is little case law in New Jersey bearing directly on this point. In a suit by a broker to recover commissions, Gross v. Kennedy, 15 N.J. Super. 118 (Law Div. 1951), the court held:
Where, as in this case, the books in question are not those of a party but of corporations not a party to the suit, it would seem that three elements should be considered by the court in determining as a matter of discretion whether the defendant should be subjected to the order here sought: (a) whether good cause has been shown for the examination, (b) whether one not a party to the suit may be unduly affected by revelation of its private affairs; and (c) whether the books and records are within the possession, custody or control of the other party. The general rule with regard to inspection of documents is that inspection orders should issue upon a showing that the desired inspection of the document or other property is relevant to the subject matter of the pending action and will aid the moving party in the preparation of his case, or otherwise facilitate proof or progress at the trial, or that a denial would prejudice the moving party.
*199 See also, Lakewood Trust Co. v. Fidelity and Deposit Co., 81 N.J. Super. 329, 339 (Law Div. 1963).
Defendant contends that the books and records of the corporation are not within his custody and control that they are in fact in the possession of the corporation's New York counsel. Nowhere does defendant's attorney contend that the husband could not, as 50% shareholder and director, demand inspection of the records sought or order them opened to wife's accountant. In addition, he contends that the books and records sought are cloaked in a Fifth Amendment privilege since both shareholders and the corporation itself are presently under investigation by the Internal Revenue Service. Defendant's assertion that any investigation "could" cause harm is clearly not persuasive. "Counsel's naked assertion of a potential for a criminal prosecution * * * without more, is insufficient to salvage the privilege. Such a danger must be real and appreciable." Indeed the Fifth amendment is not applicable to ordinary civil proceedings. State v. Roma, 143 N.J. Super. 504 (Law Div. 1976). Counsel's argument that the court is without jurisdiction or power to make an effective order is also without merit. The husband here could be ordered to exercise his powers as a shareholder and director to obtain the information sought. Furthermore, since the corporation in question is authorized to do business in New Jersey it has submitted itself to this jurisdiction pursuant to N.J.S.A. 14A:13-2(2).
Cases from other jurisdictions also militate in favor of discovery in such situations. In Lytton v. Lytton, 289 So.2d 17 (Fla. App. 1974), the Florida Court of Appeals held that the wife was entitled to discovery of the books and records of an out-of-state corporation not party to the suit on the basis that it was a closely held corporation and the husband had control of the records sought. The court emphasized that the question of alimony and special equity, among others, could not fairly be decided without complete knowledge of the husband's assets. Although in our case *200 the husband is a 50% shareholder, this court holds that his interest in the corporation is sufficient to dictate a similar result. Belichick v. Belichick, 37 Ohio App.2d 95, 307 N.E.2d, 270 (Ct. App. 1973), can similarly be cited, in that case the court allowed a dentist's wife leave to inspect the financial aspects of the husband's wholly owned dental practice. The assets of a law partnership were the target of the wife's motion for discovery In re Lopez, 38 Cal. App.3d 93, 113 Cal. Rptr. 58, 59 (D. Ct. App. 1974); there the court held that the "wife had the right to depose the husband and his law partners concerning the value of all assets of the law practice * * *" (Emphasis supplied). The partners in Lopez were not parties to the action. Lopez is similar to Stern v. Stern, 66 N.J. 340 (1975). There a law partnership was also an asset of defendant husband's, but it appears that no objection was made by the partners. Discovery was allowed.
In the instant case the wife has shown good cause, under R. 4:79-5, why discovery should be compelled of the corporate books and records. A substantial portion of the husband's assets consists of his 50% ownership interest in Gerson-Ogden, Inc. Under the principle set down in Scherzer v. Scherzer, 136 N.J. Super. 397 (App. Div. 1975), at least a portion of that stock interest will be subject to equitable distribution under N.J.S.A. 2A:34-23. Once an asset falls within the bounds of the statute the court must of necessity be able to appraise the value of such an asset in order to make a fair allocation between the parties. In the case of a closely held corporation the only feasible method for valuing the husband's ownership interest lies in an examination of the corporation's entire financial structure and condition. If such an examination threatens the legitimate interests of other shareholders or the corporate entity itself, an appropriate protective order limiting disclosure of such information may be sought.
In Scherzer, supra, the court stated (at 400) that "So far as the equitable distribution principle is concerned there *201 should be no essential difference between a situation in which the husband has an interest in an individual business and one held in a corporate name. The form should not "control." This should be true as well in situations such as the instant case where the husband's ownership interest amounts to less than 66 2/3%. To hold otherwise would enable a husband to conceal substantial assets merely by taking minority shareholder portions in a number of small, closely held corporations. The corporate form should not be used as a shield behind which parties can conceal assets from the intent of our equitable distribution statutes. The form of ownership a husband chooses for his business ventures should not deprive the wife of the discovery to which she would otherwise be entitled.
An order will be allowed requiring defendant to provide all of the financial books and records of Gerson-Ogden, Inc. so that they may be examined within 30 days by plaintiff's accountant at a time and place mutually convenient to plaintiff's accountant and the corporate accountant or comptroller. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510620/ | 160 F.2d 298 (1947)
ZUMWALT
v.
GARDNER.
No. 13460.
Circuit Court of Appeals, Eighth Circuit.
April 4, 1947.
*299 Ford W. Thompson, of St. Louis, Mo. (Charles P. Noell, of St. Louis, Mo., on the brief), for appellant.
Charles M. Miller, of Kansas City, Mo. (Orville Richardson, of St. Louis, Mo., on the brief), for appellee.
Before GARDNER, THOMAS and RIDDICK, Circuit Judges.
*300 GARDNER, Circuit Judge.
This was an action brought by appellant against the trustee of the Alton Railroad Company to recover damages for personal injuries suffered by him while in the employ of appellee. On trial the jury returned a verdict in favor of appellee and from the judgment entered thereon, appellant prosecutes this appeal. The parties will be referred to as they were designated in the trial court.
Plaintiff at the time of receiving his injuries was employed by defendant as a switchman and had been so employed for four or five months prior to that time. He was on duty at Venice, Illinois. In his complaint he alleged that while attempting to get on the footboard of a Diesel switch engine, it suddenly, unexpectedly, and with an unusual and violent jerk threw and knocked him from the footboard of the engine, causing him to fall so that the engine ran over him, crushing his foot and otherwise injuring him. He alleged that the action of the Diesel engine was caused (1) by the negligence of the engineer operating the engine in the application and setting of the brakes in emergency, and so as to cause a sudden, violent, unusual and unexpected jerk, or (2) the jerk was caused by a defect or defects in the main reservoirs, equalizing reservoir, brake valve, distributing valves, governor, reducing valve, feed valve, safety valve and brake cylinders, together with the various pipes, connections, cocks and couplings appurtenant thereto, causing the brakes to be defective and to be set in emergency without intention on the part of the engineer. At the trial, the court withdrew the first alleged ground of negligence from the jury, but submitted the second ground alleged to have caused the accident, to the jury.
On this appeal plaintiff seeks reversal on substantially the following grounds: (1) the court erred in rulings pertaining to the admissibility of evidence offered by plaintiff; (2) the court erred in instructing the jury; (3) the court erred in its rulings on motion for new trial.
The brief of appellant is subject to criticism in that it has been prepared in disregard of Rule 11(b) Third of this court, requiring appellant's brief to contain "A concise statement of the case in so far as is necessary for the court to understand and decide the points to be argued in the brief or orally." Appellant's so-called statement comprises forty-six printed pages and is not only lengthy but confusing, with extensive reproductions verbatim of the record. Appellee moves for a dismissal of the appeal on this ground. Rule 12(e) of this court provides that records and briefs not printed in substantial conformity with the provisions of that rule will not be accepted or filed. This, however, refers to the form and not the substance of the brief. Rule 73 (a) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, provides that, "When an appeal is permitted by law from a district court to a circuit court of appeals and within the time prescribed, a party may appeal from a judgment by filing with the district court a notice of appeal. Failure of the appellant to take any of the further steps to secure the review of the judgment appealed from does not affect the validity of the appeal, but is ground only for such remedies as are specified in this rule or, when no remedy is specified, for such action as the appellate court deems appropriate, which may include dismissal of the appeal."
We think the harsh remedy of dismissal of the appeal should not be granted, and while the brief of appellant might be stricken and the cause redocketed, yet that would cause unnecessary delay, and inasmuch as sufficient can be gleaned from the brief to determine certain questions urged on this appeal, the fact that it may be insufficient in other particulars would not warrant us in dismissing the appeal.
In so far as appellant attempts to present errors in rejecting evidence, we think the points relied upon are insufficient to present specific rulings. Rule 11(b) Fourth of this court provides that appellant's brief must contain, "A separate and particular statement of each assignment of error (in criminal cases), or of each point relied upon (in civil cases), intended to be urged, with the record page thereof. If an error assigned or point relied upon relates *301 to the admission or exclusion of evidence, the statement shall quote the evidence referred to and the pertinent objections or exceptions taken, together with the rulings of the court thereon, giving the pages of the printed record on which the quotations appear."
This rule has been flagrantly disregarded and for that reason we do not feel warranted in considering in detail the rulings complained of. An examination of the record convinces that the alleged errors were either waived or objections properly sustained, and hence, no prejudicial error appears which might be given notice even without a proper record. Kincade v. Mikles, 8 Cir., 144 F.2d 784.
The important, if not the controlling, question in this case arises with reference to the applicability of the res ipsa loquitur rule. Proof of the sudden jarring or jerking of the engine would under the circumstances disclosed present, we think, a proper case for the application of the doctrine. The engine was under the control and management of the defendant, and the occurrence as testified to by the plaintiff at least was such as in the ordinary course of things would not have happened if those who had the engine in control or management had used proper care, and if the engine had been in proper repair. Pitcairn v. Perry, 8 Cir., 122 F.2d 881; Ramsouer v. Midland Valley R. Co., 8 Cir., 135 F.2d 101; May Department Stores Co. v. Bell, 8 Cir., 61 F.2d 830, 840. Since this action is based on the Federal statutes the rule of the state courts need not be reviewed. It is practically conceded that the facts and circumstances disclosed surrounding the happening of this accident would ordinarily under proper pleadings warrant the application of the res ipsa loquitur doctrine, but it is argued that the plaintiff in effect waived his right to rely upon that doctrine by pleading specific acts of negligence. In May Department Stores Co. v. Bell, supra, an exhaustive study of this subject was made and it was concluded that under the Missouri rule an allegation of specific negligence deprives plaintiff of the right to rely upon res ipsa loquitur. It must be noted, however, that since the opinion in that case was handed down, the Supreme Court has promulgated, pursuant to congressional authority, rules of civil procedure applicable to Federal courts. In the May Department Stores case we said, "We assume, without deciding, that it is a rule relating to pleading and practice, which under the provisions of the Conformity Act (section 724, title 28, U.S.C.A.), we are bound to recognize and apply in this case."
The Federal court need not therefore concern itself as to the rules of pleading and practice in the state courts. In the May Department Stores case we, among other things, said, "The Circuit Court of Appeals of this circuit, while it has adopted the rule that a plaintiff who charges specific negligence may not have the benefit of the maxim regardless of what the evidence may show, has never gone so far as to hold that, where a plaintiff points out the specific defect in the instrumentality which caused his injury, and then charges that the existence of the defect was due to the negligence of the defendant generally, he will be deprived of the use of the maxim."
Having made specific allegations of negligence plaintiff must rely for his recovery upon the specific acts or causes alleged and can not recover for any other. This, however, does not deprive him of the benefit of the doctrine of res ipsa loquitur to establish the specific acts of negligence. The mere allegation of a specific act of negligence or a specific cause for the accident does not deprive appellant of the benefit of the doctrine so far as the specific cause of the accident is concerned. In other words, the doctrine may be invoked to establish the particular acts causing the accident alleged, just as any proof which plaintiff might seek to introduce should be limited to the establishment of the negligence alleged. Having alleged specific acts, this would relieve defendant from the burden of disproving or meeting any other negligent acts but would not deprive plaintiff of the benefit of the doctrine of res ipsa loquitur. May Department Stores Co. v. Bell, supra.
Turning now to the pleadings, it is observed that two specific causes of the *302 accident resulting in plaintiff's injuries are pleaded in the alternative. Rule 8 (e) (2), Federal Rules of Civil Procedure, provides that, "A party may set forth two or more statements of a claim or defense alternately or hypothetically, either in one count or defense or in separate counts or defenses."
It is first charged that the accident was caused by the negligence of the defendant's engineer in charge of the engine. Plaintiff's testimony was to the effect that as he stepped onto the footboard and reached for the grabiron with his right hand, the engine went into an emergency stop and jarred him off backwards. This occurrence and the circumstances surrounding it furnished evidence from which the jury might have inferred negligence which if not explained or not explained satisfactorily would have supported a verdict for plaintiff. We do not mean by this that this evidence compelled a verdict for plaintiff but only that it would have warranted such a verdict. The sudden stopping of the engine resulting in jarring plaintiff from the footboard was, we think, circumstantial evidence of negligence because the engine was under the exclusive control and management of the defendant and the accident in the ordinary course of events would not have occurred if proper care had been observed.
At this stage of the evidence plaintiff sought to rest his case so far as the first allegation of negligence was concerned, and he called a witness by whom he sought to prove defects in the brakes in support of his second ground. Then occurred a colloquy between the court and counsel. As the result of this colloquy counsel for plaintiff asked, "Then we have to show the engineer didn't do it before we are permitted to have the expert testimony?
"The Court: I think you will have to show the engineer didn't do it, and I am inclined to think if it is shown he didn't do it you may be able to show what might have caused it. * * *"
At that time counsel for plaintiff in protest said, "The position we take, we have made a prima facie case * * *."
"The Court: You have to prove your negligence, the Court can't presume negligence, the burden is upon you to show it.
"Mr. Noell: We have proven negligence at the moment the plaintiff testifies he was knocked off the locomotive."
Plaintiff being refused the right of putting in testimony as to the second ground of negligence, called the engineer in charge of defendant's engine at the time of the accident and asked him whether or not at or prior to the time of the accident he had put the brakes of the engine on in emergency by turning the brake valve. To this the engineer replied that he had not. He was then cross-examined at great length on many matters not specifically covered by his direct examination.
The court in its instructions took from the jury the issue presented as to the negligence of the engineer and refused an instruction requested by plaintiff specifically submitting that issue. This we think was error. As said in May Department Stores Co. v. Bell, supra, "A verdict may be directed by the court in a case where the maxim res ipsa loquitur applies. (Citing cases). The rule is, however, that the question of negligence is generally for the jury; and `it is only where the facts are such that all reasonable men must draw the same conclusion from them that the question of negligence is ever considered as one of law for the court.'"
The engineer whom plaintiff was compelled to call as his witness was in the employ of the defendant and while plaintiff because of having called him, could not directly impeach him, he was not necessarily bound by his testimony. He could have offered testimony to contradict him. Swift & Co. v. Short, 8 Cir., 92 F. 567; Abdo v. Townshend, 4 Cir., 282 F. 476. The surrounding circumstances which made applicable the doctrine of res ipsa loquitur were themselves of an evidentiary character and in view of the testimony as to the happening of the accident the jury was not bound to accept as true the testimony of defendant's employee even though not directly *303 contradicted because facts in evidence made the truth of the engineer's statement questionable, and hence, different inferences might have been drawn from the evidence. The engineer, as has already been observed, was interrogated by counsel for defendant as to matters not covered by the direct examination. It is a rule of the Federal courts that the cross-examination of a witness is confined to matters touched on in his direct examination. Norwich Union Indemnity Co. v. Simonds, 8 Cir., 65 F.2d 134; Union Electric Light & Power Co. v. Snyder Estate Co., 8 Cir., 65 F.2d 297; Stone v. Chicago, M., St. P. & P. Ry. Co., 8 Cir., 53 F.2d 813; Fidelity & Deposit Co. v. Bates, 8 Cir., 76 F.2d 160. This rule, limiting the scope of cross-examination to the subject matter of the direct examination, was not changed by the adoption of the Federal Rules of Civil Procedure. Moyer v. Ætna Life Ins. Co., 3 Cir., 126 F.2d 141.
As to that part of the cross-examination which clearly went beyond the limits of the subject matter covered in direct examination, the witness became defendant's own witness. The evidence is undisputed both by the plaintiff and the engineer that the footboard of the engine was in good condition. The engineer testified relative to the plaintiff, "I saw him get on the footboard of the engine. * * * I saw him get upon the footboard, yes. * * * I saw one hand on the grabiron.
"Q. Are you sure that he got upon the footboard? A. Yes sir, I am sure."
He further testified that after he received the go ahead signal from plaintiff, he did not move the engine with a violent jerk; that there was no jerk at all; that up until the time he got the emergency signal from the switch foreman, the engine was running smoothly.
"Q. Was there any movement in the engine there that would cause him to fall from the front step of this engine? A. No, sir.
"Q. Was your engine working in perfectly good condition? A. Yes, sir."
Having in mind that this witness testified that the plaintiff got upon the footboard; that the footboard was in good condition, and that the plaintiff had hold of the grabiron, yet notwithstanding these circumstances it appears from the undisputed facts that the plaintiff in fact was thrown off or fell off this footboard. These physical facts may have impressed the jury as rendering doubtful the statement of the engineer that he did not apply the brake in emergency and that the engine was running smoothly without jerks or jars. The jury, it occurs to us, might well have wondered how the plaintiff, if the engineer was correct, fell off this footboard. In the final analysis the testimony of the engineer does not purport to explain how the accident happened, nor indeed, does it purport to explain how it might have happened. It tends rather to prove that it could not have happened a conclusion which in view of the admitted physical facts can not be accepted. As said by us in Carter v. Kurn, 8 Cir., 127 F.2d 415, 418: "Oral testimony loses its probative force when contradicted by admitted physical facts."
The first ground pleaded as the basis for recovery was bottomed upon negligence. So far as that ground was concerned the case was governed by the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq., under which liability can be predicated only upon negligence. The second ground alleged as basis for recovery, however, was governed by the Safety Appliance Act, 45 U.S.C.A. § 1 et seq., and it was not necessary to plead nor prove negligence. Although the court took from the jury the only issue involving proof of negligence, the court instructed the jury in part as follows: "Now in that regard, gentlemen, under the law it is the duty of the railroad company and every person operating a railroad to provide its engines and equipment with safe appliances such as brakes and mechanism necessary to the operation and control of these brakes. And any failure on the part of the railroad company to supply its equipment with safe brakes and equipment would, if you find these facts to be true, would in law be negligent. Now defendant denies that it was negligent in the maintenance of its equipment or its brakes."
*304 The Safety Appliance Act here involved imposes an absolute and continuing duty upon an interstate carrier to maintain its locomotives and all parts and appurtenances thereof in proper condition and safe to operate in active service as distinguished from the qualified duty at common law to use ordinary care. Lilly v. Grand Trunk Western R. Co., 317 U.S. 481, 63 S. Ct. 347, 87 L. Ed. 411; Southern Ry. Co. v. Lunsford, 297 U.S. 398, 56 S. Ct. 504, 80 L. Ed. 740; Baltimore & O. R. Co. v. Groeger, 266 U.S. 521, 45 S. Ct. 169, 69 L. Ed. 419; Chicago, St. P., M. & O. Ry. Co. v. Muldowney, 8 Cir., 130 F.2d 971; Johnson v. Great Northern Ry. Co., 8 Cir., 178 F. 643; Chicago, M., St. P. & P. R. Co. v. Linehan, 8 Cir., 66 F.2d 373. The court, however, calls attention in this instruction to the fact that the defendant denies that it was negligent in the maintenance of its equipment. This would, of course, be no defense, and therefore it was improper to call that matter to the attention of the jury, as it may well have left the impression with the jury that lack of negligence would be a defense. The court further instructed the jury: "If you shall find and believe from the preponderance of the evidence that at the time and place mentioned in evidence, while the plaintiff was attempting to board the engine, or while his foot was upon the footboard, the engine because of the defective condition of the appliances controlling the brakes as shown by the evidence, that is, because of a defective governor or dirt in the equipment controlling the brakes, suddenly caused the brakes to be applied thereby suddenly stopping the engine, shaking it and causing the plaintiff to be thrown to the roadbed and thereafter to move forward and run over him, then it will be your duty to find a verdict for the plaintiff. On the contrary, the court has stated that if the plaintiff was injured as a result of his own fault without any negligence on the part of the defendant, then it will be your duty to find a verdict for the defendant."
Here again, the court by implication at least left the impression with the jury that the question of the defendant's negligence was an issue, if indeed not a controlling one. While it is true the court in part charged correctly as to the basis of liability, yet the interspersed references to negligence made the instructions as a whole confusing, and instructions which are susceptible of two meanings are erroneous because the jury may be misled. Carpenter v. Connecticut General Life Ins. Co., 10 Cir., 68 F.2d 69; J. H. Sullivan Co. v. Wingerath, 2 Cir., 203 F. 460; Mideastern Contracting Corporation v. O'Toole, 2 Cir., 55 F.2d 909.
Other contentions will not be considered because it seems unlikely that the questions will again be presented on retrial of this action. The judgment appealed from is therefore reversed and the cause remanded with directions to grant plaintiff a new trial. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510615/ | 372 A.2d 1291 (1977)
Oliver William STROTHER, Administrator of the Estate of Charles Strother, Appellant,
v.
DISTRICT OF COLUMBIA, Appellee.
No. 9815.
District of Columbia Court of Appeals.
Argued January 21, 1976.
Decided April 29, 1977.
*1293 Patrick J. Moran, Washington, D. C., for appellant.
Dennis McDaniel, Asst. Corp. Counsel, Washington, D. C., with whom C. Francis Murphy, Corp. Counsel at the time the brief was filed, Louis P. Robbins, Principal Asst. Corp. Counsel, and Richard W. Barton, Asst. Corp. Counsel, Washington, D. C., were on the brief, for appellee.
David P. Sutton, Asst. Corp. Counsel, Washington, D. C., entered an appearance for appellee.
Before KELLY, GALLAGHER and HARRIS, Associate Judges.
*1294 GALLAGHER, Associate Judge:
This action, brought under the Survival Act (D.C.Code 1973, § 12-101) and the Wrongful Death Act (D.C.Code 1973, §§ 16-2701 to -2703) is before us on appeal from the Civil Division of the Superior Court. The trial court granted defendant-appellee's motion to dismiss and thereafter denied plaintiff-appellant's motion for leave to file an amended complaint on the ground that appellant's claims were barred by the statute of limitations. We reverse and remand.
On November 16, 1973, appellant's father, a patient at D.C. General Hospital, died as a result of injuries allegedly caused by negligent acts and omissions of members of the hospital staff. Some six months later, on May 14, 1974, appellant commenced this action for damages by filing a complaint as plaintiff "Individually and on behalf of the Estate of Charles Strother Deceased." [Emphasis added.] Although styled simply "Complaint for Wrongful Death," this pleading contained, in addition to brief factual allegations, citations to the Survival Act (D.C.Code 1973, § 12-101)[1] as well as the Wrongful Death Act (D.C.Code 1973, §§ 16-2701 to -2703)[2] as grounds for relief. At the time the original complaint was filed no letters of administration had issued.
Appellee's original answer stated that "plaintiff lacks standing to bring this action" and later, on March 7, 1975, this defense was reasserted in a motion to dismiss for failure to state a claim upon which relief can be granted. Super.Ct.Civ.R. 12(b)(6). The bases of the motion were (1) that more than one year had passed since the death occurred and appellant had not been officially designated as administrator of his father's estate, and (2) that, as a result, appellant had not complied with the one-year limitations provision of the Wrongful Death Act,[3] even though the complaint had been filed only six months after the death.
At a hearing on March 21, 1975, the trial court granted appellee's motion to dismiss with leave to file an amended complaint within 20 days. Three days later, on March 24, 1975, appellant received letters of administration from the Probate Division of the Superior Court. Thereafter, appellant tendered, within the time allotted by the court, a proposed amended complaint which reiterated in more detail the original Survival Act and Wrongful Death Act claims and, in addition stated that the action was brought by appellant "Individually and in his Capacity as Administrator of the Estate of Charles Strother." [Emphasis added.] Appellant's motion for leave to file the amended complaint was denied after the trial court found that "if the proposed amended complaint were to be filed, the Court would be compelled to dismiss [it] on the ground of the statute of limitations, and that the filing of the amended complaint *1295 would therefore be futile" because the amended complaint was tendered more than one year after the death involved. At the hearing, the trial court rejected appellant's contention that the amended complaint, alleging the changed capacity of the plaintiff, was timely under the "relation back" concept embodied in Super.Ct.Civ.R. 15(c).[4]
We observe, as a preliminary matter, that the remedies provided by the Survival Act and the Wrongful Death Act are not mutually exclusive and may be pursued simultaneously. Sornborger v. District Dental Laboratory, Inc., 105 U.S.App.D.C. 290, 266 F.2d 694 (1959).[5] Thus, in the District of Columbia, negligent conduct resulting in death may give rise to two independent claims: one under the Survival Act, which allows recovery of damages (excluding pain and suffering) arising from personal injury to the decedent, and another under the Wrongful Death Act which allows recovery for pecuniary loss to the decedent's next of kin (e. g., loss of support) occasioned by the death. The Survival Act permits a claim which accrued to a decedent before his death to be enforced after his death by his "legal representative." On the other hand, the Wrongful Death Act creates a new cause of action which arises on the death of the decedent and is enforced by his "personal representative." D.C.Code 1973, § 16-2702.
I. The Survival Act Claim
Appellee's contention that appellant's original complaint did not include a claim under the Survival Act, D.C.Code 1973, § 12-101, is without foundation. Though the original complaint left much to be desired from the standpoint of form, it asserted that it was being brought under the Survival Act (among other statutory provisions) and, read as a whole, in light of the principles of notice pleading, it informed appellee of the existence of such a claim. See Super.Ct.Civ.R. 8(a).
Furthermore, appellee's contention that the Survival Act claim was void ab initio because appellant was without capacity to assert that cause of action is without merit. D.C.Code 1973, § 12-101 permits rights of action which accrued to a deceased person before his death to survive or to be pursued by that person's "legal representative." The underlying theory of appellee's position is that the Survival Act claim in the original complaint was a nullity because appellant was not yet administrator of his father's estate when the action was commenced. Thus, appellee asserts, essentially, that the term "legal representative" is synonymous with "personal representative" and that since appellant was not the decedent's personal representative at the time of the filing of the original complaint, the survival claim is barred by the statute of limitations. We believe that neither of these contentions is correct.
First, appellee's narrow interpretation of the term "legal representative" is contrary to the law of this jurisdiction. Thomas v. Doyle, 88 U.S.App.D.C. 95, 187 F.2d 207 (1950). That decision holds that a legal representative under the Survival Act *1296 may be any person who, whether by virtue of testamentary act or operation of law, stands in the place of the decedent with respect to his property,[6] and that Congress did not intend to restrict the right to bring a survival action to duly appointed personal representatives, i. e., executors or administrators.[7] Hence, as an heir-at-law, appellant was a proper party to sue on the Survival Act claim at the time of the filing of the original complaint, although he had not then been qualified as administrator of his father's estate. Thomas v. Doyle, supra, at 98, 187 F.2d at 210. Moreover, even at the time the amended complaint was tendered, the Survival Act claim was timely since it was filed within three years after the decedent would have had a claim if he had lived. D.C.Code 1973, § 12-301(8).[8]
II. The Wrongful Death Act Claim
We turn now to the issue of whether appellant's amendment seeking to reflect a change in the capacity in which he was suing under the Wrongful Death Act relates back under Super.Ct.Civ.R. 15(c) to the filing of the original complaint.
The trial court, in denying leave to amend, relied principally upon three decisions in this jurisdiction: Paris v. Braden, 98 U.S.App.D.C. 219, 234 F.2d 40 (1956); Harris v. Embrey, 70 App.D.C. 232, 105 F.2d 111 (1939); and Fleming v. Capital Traction Co., 40 App.D.C. 489 (1913). These cases are not controlling here, however, for in none of them did the court have before it the factor of the relation back of amendments under Rule 15(c), so far as it appears.[9] The earlier two cases simply hold that a wrongful death action must fail if not brought by decedent's personal representative.[10] The latest of those cases, Paris v. Braden, held that the plaintiffs, who were surviving children, but not appointed executors or administrators of the decedent, were not personal representatives within the meaning of the Wrongful Death Act. The court also found no abuse of discretion in a denial by the trial court of an application by the plaintiffs for additional time to qualify as personal representatives; but the latter point was disposed of without discussion in a single sentence, and the applicability of the relation back doctrine was not considered.
Appellant argues that because no new or different cause of action has been introduced and defendant was put on notice that he might have to defend such a claim, reason and our rules of procedure[11] require *1297 that he be allowed to amend his original complaint.
On the other hand, appellee, relying on several state cases,[12] argues that because appellant was not appointed administrator of the estate until after the expiration of the one-year statute of limitations, the filing of the original complaint was void ab initio due to appellant's lack of capacity to sue. He further argues that if the original complaint was void, there is nothing to which an amendment could relate back.[13]
While there is a split of authority on the issue of whether amendments seeking to change the capacity in which a plaintiff is suing relate back to the original filing,[14] federal courts and state courts which have adopted the substance of Fed.R. Civ.P. 15(c)[15] have interpreted the rule as permitting relation back. E.g., Longbottom v. Swaby, 397 F.2d 45 (5th Cir. 1968); Crowder v. Gordons Transports, Inc., 387 F.2d 413 (8th Cir. 1967); Russell v. New Amsterdam Casualty Co., 303 F.2d 674 (8th Cir. 1962); Atlanta Newspapers, Inc. v. Shaw, 123 Ga.App. 848, 182 S.E.2d 683 (1971); Gogan v. Jones, 197 Tenn. 436, 273 S.W.2d 700 (1954). These cases have found that there is no substantial prejudice to the defendant because "there is no change in the parties before the court [and] all parties are on notice of the facts out of which the claim arose." Moore's Federal Practice ¶ 15.15[4.-1] (1974). We think this reasoning is sound.
Rule 15 seeks to ensure that litigation be decided upon the merits rather than upon technical pleading rules. See generally Moore's, supra at ¶ 15.02[1]. Thus, subsection (c) of the rule allows a plaintiff (or defendant) to amend his pleadings after the running of the statute of limitations "whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading". The rationale behind the rule is that if, within the statute of limitations, the defendant was put on notice that the plaintiff was attempting to enforce a claim against him because of a certain occurrence or event, then there is no cognizable prejudice to the defendant when, after the running of the limitations period, plaintiff is allowed to amend the complaint to reassert the claim that was deficiently stated the *1298 first time. See, e. g., Tiller v. Atlantic Coast Line, 323 U.S. 574, 65 S. Ct. 421, 89 L. Ed. 465 (1945); C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1497 (1971).
Although Rule 15(c) does not specifically address itself to amendments changing the capacity in which a plaintiff is suing, by an amendment in 1966 there was provided a formula for determination of when an amendment changing the party against whom a claim is asserted will relate back to the filing of the original complaint. Relation back is allowed whenever the party "(1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that but for the mistake concerning the identity of the proper party, the action would have been brought against him." The major concern in this test is that of adequate notice to the defendant that the claim is being asserted. The Committee Notes on the amendment to the federal rule state that "the attitude taken in revised Rule 15(c) toward change of defendants extends by analogy to amendments changing plaintiffs." [Emphasis added.][16] It is only sensible that it should extend also to amendments changing the capacity in which a plaintiff is suing. In the case before us the defendants were on notice that they would have to defend a claim arising out of the death of appellant's father. See generally Link Aviation, Inc. v. Downs, 117 U.S.App.D.C. 40, 325 F.2d 613 (1963) (allowing relation back of amendment changing plaintiff even before the 1966 amendment when the defendant was put on notice as to the nature of the claim against him.) Consequently, it is our view that this case presents circumstances in which the relation back doctrine should, in reason, be applied.[17]
We note that even before the adoption of the Federal Rules of Civil Procedure and our adoption of Rule 15(c), the Supreme Court held, under circumstances similar to those before us, that an amendment to change the capacity in which a plaintiff sues ought to relate back to the original filing. Missouri, Kansas & Texas Ry. v. Wulf, 226 U.S. 570, 33 S. Ct. 135, 57 L. Ed. 355 (1913) (see note 13 supra). Wulf involved an action brought under the Federal Employee's Liability Act of 1908 (FELA), 45 U.S.C. §§ 51-60 (1970), which like our wrongful death statute, requires an action to be brought both in the name of the personal representative of the decedent for the benefit of the next of kin[18] and within a specified period after the date the cause of action accrued.[19] The plaintiff, a sole surviving parent, originally sued in her individual capacity in the trial court, relying upon Kansas law, and after the limitation period had expired she received an appointment as administratrix of her deceased son's estate and tendered an amended complaint with a claim under the FELA. The defendant argued, inter alia, that the amended petition set up an entirely new *1299 and distinct action which could not relate back to the original complaint. The Supreme Court found that aside from the changed capacity in which the plaintiff brought the suit, the amended complaint was essentially the same as the original complaint and that it was not the
equivalent to the commencement of a new action, so as to render it subject to the two years' limitation prescribed by § 6 of the employers' liability act. The change was in form rather than in substance. [Citation omitted.] It introduced no new or different cause of action, nor did it set up any different state of facts as the ground of action, and therefore it related back to the beginning of the suit. [Citations omitted.] [226 U.S. at 576, 33 S.Ct. at 137.]
Both Rule 15(c) and Wulf, supra, require that because there was no new or different cause of action introduced in the tendered amended complaint and because the cause of action in the amended complaint arose out of the same conduct set forth in the original complaint, the tendered amendment should be accepted by the trial court and such amendment will relate back to the date of the original pleading.
Reversed and remanded for further proceedings.
NOTES
[1] D.C.Code 1973, § 12-101. Survival of rights of action
On the death of a person in whose favor or against whom a right of action has accrued for any cause prior to his death, the right of action survives in favor of or against the legal representative of the deceased. In tort actions for personal injuries, the right of action is limited to damages for physical injury, excluding pain and suffering resulting therefrom. [Emphasis added.]
[2] The relevant portions of the Wrongful Death Act are:
D.C.Code 1973, § 16-2701. Liability; damages; prior recovery as precluding action
When, by an injury done or happening within the limits of the District, the death of a person is caused by the wrongful act, neglect, or default of a person or corporation, and the act, neglect, or default is such as will, if death does not ensue, entitle the person injured . . . to maintain an action and recover damages, the person who or corporation that is liable if death does not ensue is liable to an action for damages for the death, notwithstanding the death of the person injured, even though the death is caused under circumstances that constitute a felony.
. . . . .
D.C.Code 1973, § 16-2702. Party plaintiff; statute of limitations
An action pursuant to this chapter shall be brought by and in the name of the personal representative of the deceased person, and within one year after the death of the person injured. [Emphasis added.]
[3] See note 2 supra.
[4] Super.Ct.Civ.R. 15(c) provides in pertinent part:
Relation Back of Amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.
. . . . .
[5] While certain factors (e. g., projected future income of the decedent) may be relevant to damages under both the Survival Act and the Wrongful Death Act, "double recovery for the same elements of damage [are to] be avoided." See Hudson v. Lazarus, 95 U.S.App.D.C. 16, 21, 217 F.2d 344, 349 (1954). See Runyon v. District of Columbia, 150 U.S.App.D.C. 228, 463 F.2d 1319 (1972), for an analysis of some aspects of the double recovery problem.
[6] The concept embraced by the term "legal representative" is not, however, without limit. For example, non-heirs, who are beneficiaries under a will are not legal representatives for the purposes of the survival statute until probate is had and their rights have ripened. Norris v. Harrison, 91 U.S.App.D.C. 103, 105 n. 3, 198 F.2d 953, 954 n. 3 (1952).
[7] The phrase "personal representative" as used in the Wrongful Death Act, D.C.Code 1973, § 16-2702, is more restrictive and refers only to an officially appointed administrator or executor. Fleming v. Capital Traction Co., 40 App. D.C. 489 (1913); Southern Ry. Co. v. Hawkins, 35 App.D.C. 313 (1910). See also Thomas v. Doyle, supra, 88 U.S.App.D.C. at 97, 187 F.2d at 209.
[8] The Survival Act does not contain a time limitation. Accordingly, the three year statute of limitations (D.C.Code 1973, § 12-301(8)), generally applicable to tort claims, applies. See Emmett v. Eastern Dispensary & Cas. Hosp., 130 U.S.App.D.C. 50, 52 & n. 4, 396 F.2d 931, 933 & n. 4 (1967); Wharton v. Jones, 285 F. Supp. 634 (D.D.C.1968).
[9] Fleming v. Capital Traction Co., supra, was of course decided long before Rule 15(c) was promulgated.
[10] The term "personal representative" as used in the Wrongful Death Act is limited to qualified executors and administrators. See note 7 supra. However, a personal representative who brings an action under the Wrongful Death Act is a nominal party only and does not act in his capacity as executor or administrator. Damages recovered for wrongful death are not assets of the decedent's estate and (except for expenses of last illness and burial) may not be appropriated to payment of debts or liabilities of the decedent. Rather, any amount recovered inures to the benefit of the decedent's next of kin, and the personal representative acts only as a trustee on behalf of the decedent's family. Southern Ry. Co. v. Hawkins, supra; D.C.Code 1973, § 16-2703.
[11] Appellant relies upon Super.Ct.Civ.R. 15 and 17.
[12] E. g., Richard v. Slate, 239 Or. 164, 396 P.2d 900 (1964) (en banc); Schilling v. Chicago, N.S. & M. R.R., 245 Wis. 173, 13 N.W.2d 594 (1944).
[13] As additional support for his position appellee notes the proposition that a time limitation that is an integral part of a substantive statute which creates a right unknown at common law imposes a limitation on the right as well as the remedy and that "the right ordinarily would expire if not pursued within the time permitted by its creating statute." Young v. United States, 87 U.S.App.D.C. 145, 146, 184 F.2d 587, 588 (1950). See also Earll v. Searl, D.C.Mun. App., 101 A.2d 248 (1953), rev'd on other grounds, 95 U.S.App.D.C. 151, 221 F.2d 24 (1954). This is a correct statement of the law and we have no quarrel with appellee that the time limit for bringing a wrongful death action in the District of Columbia is a part of the right of action itself. Young v. United States, supra. We conclude, however, that this is not dispositive of the issue before us, viz., whether the filing of the complaint was void ab initio and whether the amendment can relate back to the original filing.
Several courts have found that the time limitation included in the limitations section of the Federal Employee's Liability Act of 1908 (FELA), 45 U.S.C. §§ 51-60, is a limitation on the right as well as the remedy. E. g., Dixon v. Martin, 260 F.2d 809 (5th Cir. 1958). Yet the Supreme Court in Missouri, K & T Ry. v. Wulf, 226 U.S. 570, 33 S. Ct. 135, 57 L. Ed. 355 (1913), held that in a suit brought under FELA, an amendment changing the capacity in which the plaintiff was suing related back to the original filing of the complaint despite the running of the statute of limitations. See discussion of Wulf, infra. We fail to see a compelling reason why a period of limitations should have a controlling effect if found in the substantive statute but not if located in a general statute of limitations, especially when a relation back issue is involved.
[14] Compare, e. g., Richard v. Slate, supra, with Crowder v. Gordons Transports, Inc., 387 F.2d 413 (8th Cir. 1967).
[15] Super.Ct.Civ.R. 15(c) is an adoption without modification of the corresponding federal rule and as such is to be given the same meaning. Campbell v. United States, D.C.App., 295 A.2d 498 (1972).
[16] Fed.R.Civ.P. 15(c), Committee Notes to 1966 Amendments.
[17] See also Super.Ct.Civ.R. 17(a) which provides in pertinent part:
Every action shall be prosecuted in the name of the real party in interest. . . . No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.
The fact that the rule allows the real party in interest to be substituted for the original party and that the substitution "shall have the same effect as if the action had been commenced in the name of the real party in interest", indicates a rationale similar to that in Rule 15(c): if within the statute of limitations the defendant has been put on notice that he will have to defend an asserted claim, that claim should be decided on the merits rather than on technical pleading rules. See Crowder v. Gordons Transports, Inc., supra.
[18] 45 U.S.C. § 51 (1970).
[19] At the time of Wulf the statutory period was two years; it is now three years. 45 U.S.C. § 56 (1970). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510596/ | 821 F. Supp. 877 (1993)
AMALGAMATED CLOTHING AND TEXTILE WORKERS UNION, National Council of the Churches of Christ in the U.S.A., Unitarian Universalist Association, and Literary Society of Saint Catherine of Sienna, Plaintiffs,
v.
WAL-MART STORES, INC., Defendant.
No. 92 Civ. 5517 (KMW).
United States District Court, S.D. New York.
April 26, 1993.
*878 Cornish F. Hitchcock, Alan B. Morrison, Public Citizen Litigation Group, Washington, DC, Hal S. Shaftel, Stein, Zauderer, Ellenhorn, Frischer & Sharp, New York City, Paul M. Neuhauser, Iowa City, IA, for plaintiffs.
Alan L. Dye, George H. Mernick, III, Hogan & Hartson, Washington, DC, Ediberto Roman, Lord Day & Lord, Barrett Smith, New York City, for defendant.
TABLE OF CONTENTS
I. Background ....................................................................... 880
II. Discussion ....................................................................... 881
A. Regulatory Framework ......................................................... 881
1. The Importance of Proxies ................................................. 881
2. Shareholder Proposals ..................................................... 881
3. Proxy Solicitations ....................................................... 881
4. SEC Review of Intent to Omit Proposals .................................... 883
B. Standard for Court's Determination Whether a Proposal May Be Excluded
as Pertaining to "Ordinary Business Operations" .............................. 883
*879
1. The SEC's Interpretive Release Standard .................................. 883
2. Development of SEC Interpretation Through No-Action Letter Review
Process .................................................................. 884
a. Deference Owed to No-Action Position ................................. 885
b. SEC's No-Action Letter Position on Ordinary Business Operations 886
C. Whether Wal-Mart May Exclude Plaintiffs' Proposal ............................ 889
1. Whether the Court Should Defer to the SEC's Cracker Barrel Position 890
2. Whether Application of the 1976 Interpretive Release Standard Independently
Permits Wal-Mart to Exclude the Proposal ................................. 890
III. Conclusion ....................................................................... 892
OPINION AND ORDER
WOOD, District Judge.
On April 19, 1993, the court issued an Order enjoining defendant Wal-Mart Stores, Inc. ("Wal-Mart") from mailing out proxy material omitting plaintiffs' proposed resolution (the "Proposal") as amended by the court. The court's factual and legal findings are set forth below.
Plaintiffs, Wal-Mart shareholders, sought to enjoin the company from omitting their Proposal from proxy solicitation material the company plans to distribute in advance of Wal-Mart's June 4, 1993 annual meeting. Plaintiffs seek to submit to a shareholder vote a request for Wal-Mart's directors to prepare and distribute reports about Wal-Mart's equal employment opportunity ("EEO") and affirmative action policies, programs and data, along with a description of Wal-Mart's efforts to 1) publicize its EEO policies to suppliers, and 2) purchase goods and services from minority- and female-owned suppliers. Plaintiffs allege that Wal-Mart's omission of their proposal violates Securities and Exchange Commission ("SEC" or "Commission") Rule 14a-8.[1]
Wal-Mart moves to dismiss the Amended Complaint. Wal-Mart asserts that it may exclude the proposal because it "deals with a matter relating to the conduct of [Wal-Mart's] ordinary business operations," an excludable category under Rule 14a-8(c)(7).[2] Plaintiffs cross-move for summary judgment. The court treats the motions as cross-motions for summary judgment.[3] The court *880 denies Wal-Mart's motion and grants plaintiffs' motion for the reasons, and to the extent, set forth below.
I. Background
Plaintiff Amalgamated Clothing and Textile Workers Union ("ACTWU") is a labor union representing approximately 250,000 workers internationally. (Amended Complaint at ถ 3). Plaintiffs National Council of Churches of Christ in the U.S.A., Unitarian Universalist Association and Literary Society of Saint Catherine of Sienna are religious organizations, which invest in socially responsible corporations as part of their religious missions. Each plaintiff believes that "issues concerning equal employment opportunity and affirmative action are important to shareholder value." (Id. at ถถ 4-6). Plaintiffs' stated ultimate goal is to improve Wal-Mart's EEO record and that of the discount retail store industry; to that end, they submit proposals, such as this one, to foster dialogue between plaintiffs and Wal-Mart and between plaintiffs and other shareholders. (Pls. Ex. 5, 6). Under SEC Rule 14a-8(a)(1), plaintiffs, as owners of at least $1,000 worth of Wal-Mart stock, are eligible to submit proposals for inclusion in Wal-Mart's proxy material. See 17 C.F.R. ง 240.14a-8(a)(1).
Wal-Mart operates a chain of retail stores throughout the United States. (Amended Complaint at ถ 7). Wal-Mart is a Delaware corporation with its principal place of business in Bentonville, Arkansas. As a Delaware corporation, Wal-Mart is subject to Delaware corporate law pertaining to the use of shareholder proxies at annual meetings and is concurrently subject to the rules adopted by the SEC, which regulate the content and solicitation of proxies.
Plaintiff ACTWU submitted a proposal to Wal-Mart in 1991 that is substantially similar to the 1993 Proposal at issue here. In 1992, plaintiffs collectively submitted a revised proposal to Wal-Mart that is identical to the 1993 Proposal. Plaintiffs' resubmitted their 1992 proposal for inclusion in Wal-Mart's 1993 proxy material. Wal-Mart refused to include any of the proposals submitted by plaintiffs. The 1993 Proposal requests Wal-Mart's board of directors to prepare the following reports by September 1993:
1. A chart identifying employees according to their sex and race in each of the nine major EEOC defined job categories for 1990, 1991, 1992 listing either numbers or percentages in each category.
2. A summary description of Affirmative Action Programs to improve performance especially in job categories where women and minorities are under utilized and a description of major problems in meeting the company's goals and objectives in this area.
3. A description of steps taken to increase the number of managers who are qualified females and ethnic minorities.
4. A description of ways in which Wal-Mart publicizes our company's policies to merchandise suppliers and service providers to encourage forward action on their part as well.
5. A description of Wal-Mart's efforts to purchase goods and services from minority and female owned business enterprises.[4]
*881 Plaintiffs envision a brief report, that could, in their view, range from the one page analysis produced by J.C. Penney as part of its annual report to a five page internal memorandum made available to shareholders of CIGNA Corporation. (Brouse Aff. at ถ 21 [discussing similar reports of seven different companies]).
II. DISCUSSION
A. Regulatory Framework
1. The Importance of Proxies
A proxy is a means by which a shareholder authorizes another person to represent her and vote her shares at a shareholders' meeting in accordance with the shareholder's instructions on the proxy card. Proxies have become an indispensable part of corporate governance because the "[r]ealities of modern corporate life have all but gutted the myth that shareholders in large publicly held companies personally attend annual meetings." Stroud v. Grace, 606 A.2d 75, 86 (Del.1992). As one leading commentator explained, the "widespread distribution of corporate securities, with the concomitant separation of ownership and management, puts the entire concept of the stockholders' meeting at the mercy of the proxy instrument." Louis Loss, Fundamentals of Securities Regulation 449 (2d ed. 1988). This is because under state law โ Delaware law, in Wal-Mart's case โ a quorum of the shares eligible to vote must be represented at an annual meeting either in person or by proxy in order to elect directors and transact "any other proper business" that may be conducted. See Del.Code Ann. tit. 8, งง 211(b), 212(b), 216 (1991). Thus, the failure of the vast majority of shareholders to attend annual meetings means that without the proxy mechanism for representing shares eligible to vote, corporations effectively would be unable to elect directors and take other required actions.
2. Shareholder Proposals
Under Delaware law, a shareholder in attendance at the annual meeting may offer a proposal for shareholder approval, as long as the proposal involves a proper subject on which shareholders may vote. See Del.Code Ann. tit. 8 ง 211(b). "[T]he right of security holders to present proposals at the meeting, as distinguished from the right to include such proposals in management's proxy materials, turns upon state law." Statement of Informal Procedures for the Rendering of Staff Advice with Respect to Shareholder Proposals, Exchange Act Release No. 12599, [1976-77 Transfer Binder] Fed.Sec.L.Reports ถ 80,635 at 86,602, 86,604 (July 7, 1976) ("Informal Procedures Release"). Unless the shareholders' proposed resolution is included in the proxy material, however, other shareholders would not have advance notice of the intention to make the proposal or have the ability to vote on the proposal via the proxy. See Stroud, 606 A.2d at 87 (Delaware law "does not require the board to disclose ... matters to be discussed at regularly scheduled annual meetings").
3. Proxy Solicitations
Congress delegated to the SEC the task of regulating proxy solicitations and thereby regulating one important avenue of management's communication with shareholders. Section ง 14(a) of the Securities Exchange Act of 1934 ("SEA") renders unlawful the solicitation of proxies in violation of the SEC's rules and regulations, which are codified at 17 C.F.R. ง 240.14a-1 et seq. Section ง 14(a) and the SEC's implementing regulations seek "to prevent management or others from obtaining authorization for corporate action by means of deceptive or inadequate disclosure in proxy solicitation." J.I. Case *882 Co. v. Borak, 377 U.S. 426, 431, 84 S. Ct. 1555, 15, 12 L. Ed. 2d 423 (1964). The Senate Report accompanying the SEA noted Congressional concern, at that time, that "[t]oo often proxies are solicited without explanation to the stockholder of the real nature of the questions for which authority to cast his vote is sought." S.Rep. No. 792, 73rd Cong., 2d Sess. at 12 (1934). Congress sought to insure "[f]air corporate suffrage," H.Rep. No. 1383, 73rd Cong., 2d Sess. at 13, and shareholders who were "enlightened not only as to the financial condition of the corporation, but also as to the major questions of policy, which are decided at stockholders' meetings." S.Rep. No. 792 at 12. These concerns led the SEC to adopt Rule 14a-9, which prohibits "false or misleading" statements made in any proxy statement, form of proxy, notice of meeting or other communication. 17 C.F.R. ง 240.14a-9(a).
The SEC has interpreted Rule 14a-9 to require companies to provide shareholders with the opportunity to submit proposals to management for inclusion in the corporation's proxy material. This interpretation grew out of the desire to ensure that the contents of the proxy statement reflect accurately all the issues that would properly arise at the annual meeting. As Judge Carter has explained:
[s]ince a shareholder may present a proposal at the annual meeting regardless of whether the proposal is included in a proxy solicitation, the corporate circulation of proxy materials which fail to make reference to a shareholder's intention to present a proper proposal at the annual meeting renders the solicitation inherently misleading.
New York City Employees' Retirement System v. American Brands, Inc., 634 F. Supp. 1382, 1386 (S.D.N.Y.1986). See also Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416, 422 (D.C.Cir.1992).
The SEC has also adopted Rule 14a-8, which is "complementary to, but distinct from, the Rule 14a-9 ban on misleading statements in proxy solicitations." Roosevelt, 958 F.2d at 421. Rule 14a-8 is "informational," and affords shareholders "[a]ccess to management proxy solicitations to sound out management views and to communicate with other shareholders on matters of major import...." Id. See also Lovenheim v. Iroquois Brands, Ltd., 618 F. Supp. 554, 561 (D.D.C.1985).
Rule 14a-8(a) requires a company to include a shareholder's proposal in the company's proxy statement and provide shareholders with the opportunity to vote on the proposal by executing the proxy card. See 17 C.F.R. ง 240.14a-8(a). This ostensibly broad directive is limited by thirteen content-based exceptions.[5] Most relevant to this case is Rule 14a-8(c)(7), which permits a company to omit a shareholder proposal if "the proposal deals with a matter relating to the conduct of the ordinary business operations of the registrant." 17 C.F.R. ง 240.14a-8(c)(7).[6] A shareholder proposal pertaining to "ordinary business operations" would be improper if raised at an annual meeting, because the law *883 of most states (including Delaware) leaves the conduct of ordinary business operations to corporate directors and officers rather than the shareholders. See e.g. Del.Code Ann. tit. 8 ง 141(a). As one court explained, "management cannot exercise its specialized talents effectively if corporate investors assert the power to dictate the minutiae of daily business decisions." Medical Committee for Human Rights v. SEC, 432 F.2d 659, 679 (D.C.Cir.1970), vacated as moot, 404 U.S. 403, 92 S. Ct. 577, 30 L. Ed. 2d 560 (1972). The SEC adopted this exception to save management the cost and burden of including a proposal in proxy material that would be improper if raised by a shareholder at the annual meeting. (Def. Ex. F [Address by SEC Commissioner Richard Y. Roberts to American Society of Corporate Secretaries, Oct. 5, 1991] at 6-7).
4. SEC Review of Intent to Omit Proposals
A company that objects to the inclusion of a proposal and wishes to omit it from the company's proxy statement must file with the SEC (1) a copy of the proposal, (2) any statement in support of the proposal submitted by the proponent, and (3) a statement of "the reasons why the [company] deems such omission to be proper in the particular case." 17 C.F.R. ง 240.14a-8(d). The "burden of proof [is] upon the management to show that a particular security holder's proposal is not a proper one for inclusion in management's proxy material." Adoption of Amendments to Proxy Rules, Securities Exchange Act Release No. 4979, 1954 SEC LEXIS 38, *3 (Jan. 6, 1954) ("1954 Amendments") (discussing prior incarnation of Rule 14a-8). See also New York City Employees' Retirement System v. Dole Food Co., 795 F. Supp. 95, 99 (S.D.N.Y), vacated as moot, 969 F.2d 1430 (2d Cir.1992); Austin v. Consolidated Edison Co., 788 F. Supp. 192, 194 (S.D.N.Y.1992).
In connection with its submission of the proposal and its objections, a company may ask the SEC to issue a "no-action" letter, in which the SEC staff informs the company whether the SEC believes the shareholder proposal may be omitted and opines on the SEC's enforcement position should the proposal be omitted. See Informal Procedures Release at 86,605. A company must notify the SEC of its intention to omit the proposal, but no response from the Commission or its staff is required before the company may mail out proxy material that omits the opposed shareholder proposal. See id.
B. Standard for Court's Determination Whether a Proposal May Be Excluded as Pertaining to "Ordinary Business Operations"
Determining whether Wal-Mart may exclude plaintiffs' Proposal under the "ordinary business operations" exception requires the court to construe the meaning of the SEC's own rules. When a court interprets an administrative regulation, "the ultimate criterion" is the agency's interpretation of the regulation, which becomes of controlling weight unless that interpretation is "plainly erroneous or inconsistent with the regulation." Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414, 65 S. Ct. 1215, 1217, 89 L. Ed. 1700 (1945). See also Mullins Coal Co. v. Director, O.W.C.P., 484 U.S. 135, 159, 108 S. Ct. 427, 439, 98 L. Ed. 2d 450 (1987); Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 566, 100 S. Ct. 790, 797, 63 L. Ed. 2d 22 (1980); New York City Employees' Retirement System v. Dole Food Co., 969 F.2d 1430, 1435 (2d Cir.1992) (Pollack, J., sitting by designation, concurring). Thus before deciding whether Wal-Mart may omit the Proposal on the basis of the "ordinary business operations" exception, I must first examine how the SEC interprets Rule 14a-8(c)(7).
1. The SEC's Interpretive Release Standard
Both the present form of Rule 14a-8, which contains the phrase "ordinary business operations," and the SEC Interpretive Release that accompanied it, were adopted after a formal notice and comment rule-making period in 1976. See Proposed Amendments to Rule 14a-8 under the SEA Relating to Proposals by Security Holders, Exchange Act Release No. 12598 [1976-77 Transfer Binder] Fed.Sec.L.Reports ถ 80,634 at 86,593 (Jul. 7, 1976). The 1976 Release "established the principles by which [the Commission] intended the `ordinary business' provision of *884 Rule 14a-8 to be interpreted." Brief of the Securities and Exchange Commission, Amicus Curiae at 29, filed in Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416 (D.C.Cir.1992). Writing in January 1992, the SEC stated that "[t]hese principles are no less applicable today than when the Commission adopted them" in 1976. Id.
The SEC issued the 1976 Interpretive Release to resolve previous interpretive difficulties over Rule 14a-8(c)(7)'s intended meaning. The Release states in pertinent part that
the term "ordinary business operations" has been deemed on occasion to include certain matters which have significant policy, economic or other implications inherent in them. For instance, a proposal that a utility company not construct a proposed nuclear power plant has in the past been considered excludable.... In retrospect, however, it seems apparent that the economic and safety considerations attendant to nuclear power plants are of such magnitude that a determination whether to construct one is not an "ordinary" business matter. Accordingly, proposals of that nature as well as others having major implications be considered beyond the realm of an issuer's ordinary business operations, and future interpretive letters of the Commission's staff will reflect that view.
... Thus, where proposals involve business matters that are mundane in nature and do not involve any substantial policy or other considerations, the subparagraph may be relied upon to omit them.
Adoption of Amendments Relating to Proposals by Security Holders, Exchange Act Release No. 12999, 41 Fed.Reg. 52,994, 52,998 (Dec. 3, 1976) ("1976 Interpretive Release") (emphasis added).[7]
2. Development of SEC Interpretation Through No-Action Letter Review Process
The general guidance provided to parties and the court by the 1976 Interpretive Release and state corporate law has been supplemented by the no-action letters issued by the SEC staff and the rare discretionary review of no-action letters provided by the full Commission.[8] No-action letters can provide insight into the meaning of the term "ordinary business operations," because, unlike general interpretive releases, no-action letters address specific issues and build upon the SEC's "vast experience of daily contact with the practical workings of this rule." Peck v. Greyhound Corp., 97 F. Supp. 679, 681 (S.D.N.Y.1951) (involving former exception for proposals of a "general, political, social, or economic nature"). However, as the SEC itself maintains, the ad hoc nature of these letters means that courts cannot place them on a precedential par with formal rulemaking or adjudication. Before turning to how the SEC has applied Rule 14a-8(c)(7) to similar proposals through numerous no-action letters, the court will, therefore, address the extent to which it *885 must defer to positions taken in no-action letters.
a. Deference Owed to No-Action Position
An individual no-action letter by itself is not an expression of agency interpretation to which the court must defer. See Roosevelt, 958 F.2d at 427 n. 19 (principle of deference to administrative regulation is not applicable to an SEC no-action letter regarding shareholder proposals because no-action letter does not "rank[] as an agency adjudication or rulemaking"); Dole Food, 795 F.Supp. at 100-01 (SEC no-action letters do not bind court).[9] By responding to a company's request for a no-action letter, the "Commission and its staff do not purport in any way to issue `rulings' or `decisions' on shareholder proposals management indicates it intends to omit, and they do not adjudicate the merits of a management's posture concerning such a proposal." Informal Procedures Release at 86,604.
The SEC staff reviews annually approximately 350 requests for no-action letters regarding shareholder proposals and over 6,700 proxy statements, see Roosevelt, 958 F.2d at 424; Informal Procedures Release at 86,604, and itself acknowledges that its staff "necessarily cannot do more in each case than make a quick analysis of the material submitted that, perforce, lacks the kind of in-depth study that would be essential to a definitive determination...." Id. at 86,604. Time and staff constraints require the staff to evaluate a shareholder proposal as an indivisible whole; if one part of a multi-part proposal is excludable, the entire proposal is treated as excludable. See id., 958 F.2d at 427 n. 17 (at the request of the Court of Appeals for the D.C. Circuit, Commission re-evaluated a two-part proposal and found the first part includable and second part excludable; the staff originally deemed the entire proposal excludable).[10] The administrative constraints on the SEC staff led the agency to express concern at its inability to enforce ง 14(a) on its own through the informal no-action letter process, and it has acknowledged a need for its efforts to be supplemented by private enforcement in the courts. See Roosevelt, 958 F.2d at 424.
However, although the court need not defer to an individual no-action position, courts have relied on the consistency of the SEC staff's position and reasoning on a given issue, or the lack of consistency, in determining whether a proposal that was deemed excludable by the SEC staff can in fact be omitted under Rule 14a-8(c)(7). Compare Austin, 788 F. Supp. 192, 195 (deferring to position expressed in more than fifty no-action letters over ten years that proposals *886 relating to pension plans may be excluded as related to "ordinary course of business") with I.N.S. v. Cardoza Fonseca, 480 U.S. 421, 447 n. 30, 107 S. Ct. 1207, 1221 n. 3, 94 L. Ed. 2d 434 (1987) (an agency interpretation that conflicts with the agency's earlier interpretation is entitled to considerably less deference than a consistently held agency view) (citations omitted); Dole Food, 795 F.Supp. at 101 (deference to no-action letter less warranted when SEC shifted rationales for excluding proposals on national health insurance). But see Dole Food, 969 F.2d at 1436 (Pollack, J., concurring) (deferring to SEC's position on health care reform as clearly expressed in twelve no-action letters issued within two years).
In determining whether to defer to a position drawn from a series of no-action letters, courts must recognize that a change in SEC position does not necessarily reveal capricious action by the agency; changes in conditions and public perceptions justify changes in the SEC's construction of the "ordinary business operations" exception. The nature of the exception permits, if not requires, the SEC to reevaluate earlier positions "in light of new considerations, or changing conditions which indicate that its earlier views are no longer in keeping with the objectives of Rule 14a-8." Informal Procedures Release at 86,605. The SEC has revised its position with respect to the inclusion of proposals on a number of issues formerly excludable under Rule 14a-8(c)(7) such as plant closings, tobacco production, cigarette advertising and all forms of senior executive and director compensation. See Lynne L. Dallas, "The Control and Conflict of Interest Voting Systems," 71 N.C.L.Rev. 1, 14-16 n. 55 (1992) (collecting recent changes in SEC no-action positions). In announcing the change in the Commission's position on senior executive and director compensation, SEC Chairman Breeden stated that the "the level of public and shareholder concern ... has become intense and widespread" and "dictates a reevaluation" of SEC policy. "Breeden Announces SEC Initiative on Executive Compensation Issues," 24 Securities Reg. & L.Rep. (BNA) 223 (Feb. 21, 1992). Thus, an SEC departure from a prior position must be considered in light of changing public and shareholder concerns. Having addressed the various considerations that help to determine the level of deference owed to no-action letters, the court now examines the SEC's interpretation of the "ordinary business operations" exception in its no-action letters dealing with similar EEO and affirmative action proposals.
b. SEC's No-Action Letter Position on Ordinary Business Operations
Although the SEC has been dealing with proposals like plaintiffs' since the mid-1970s, its treatment of these proposals has changed over time. Prior to 1983, the SEC took the position that proposals requesting reports on EEO data and policies could not be excluded, because the determination whether a report should be issued was matter of policy rather than ordinary business operations. See, e.g., Continental Airlines, Inc., SEC No-Action Letter, 1975 WL 9901, 1975 SEC No-Act, LEXIS 559, *1, *6 (Mar. 12, 1975); (company may not exclude proposal requesting report on EEO policies and data); Columbia Pictures Industries, Inc., SEC No-Action Letter, 1975 WL 9958, 1975 SEC No-Act. LEXIS 1791 *7, *10 (Aug. 29, 1975) (same); Gulf & Western Industries, Inc., SEC No-Action Letter, 1975 WL 9969, 1975 SEC No-Act. LEXIS 2212 *8โ *9, *11 (Oct. 23, 1975) (same). In 1983, the SEC changed its interpretation of the exception and determined that the subject of the report requested, rather than the fact that the information requested was in the form of a report, would determine the proposal's excludability under the "ordinary business operations" exception. See Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Exchange Act Release No. 20091, [1983-84 Transfer Binder] Fed.Sec.L.Rep. ถ 83,417, at 86,200, 86,205 (Aug. 16, 1983).
Since 1983, the SEC has determined whether employment policy proposals must be included in proxy materials by examining whether the proposals relate to "day-to-day" employment matters and, therefore, are excludable as relating to "ordinary business operations," or whether the proposals relate to significant policy considerations and, *887 therefore, are not excludable. Day-to-day employment matters have been interpreted as including matters concerning: employee health benefits, general compensation issues not focused on senior executives, management of the workplace, employee supervision, labor-management relations, employee hiring and firing, conditions of employment and employee training and motivation. See, e.g., United Technologies Co., SEC No-Action Letter, 1993 WL 48821, 1993 SEC No-Act. LEXIS 288 (Feb. 19, 1993) (SEC staff listing of excludable subjects of proposals based on past no-action letters). The SEC has also viewed a proposal requesting a company to hire contractors from within its service area as excludable under Rule 14a-8(c)(7). See Atlantic Energy, Inc., SEC No-Action Letter, 1989 WL 245614 (Feb. 17, 1989).
Despite the SEC's general view that employee hiring and firing and supplier decisions are related to a company's ordinary business operations, the SEC has until recently recognized that the issues of EEO and affirmative action raise policy considerations elevating them above the excludable day-to-day issues. Thus, in 1988, the SEC staff stated, and the full Commission affirmed, that AT & T may not exclude a shareholder proposal to phase out those aspects of AT & T's affirmative action program directed toward recruiting, employing or promoting individuals from any particular racial or ethnic group. See American Telephone & Telegraph Co., SEC No-Action Letter, 1988 WL 235275 at 15 (Dec. 21, 1988). The staff stated that AT & T could not rely on the exception for "ordinary business operations" because the proposal involved "policy issues," described by the SEC staff as "the Company's affirmative action program, designed to assure equal employment opportunities for minority group members...." Id., 1988 WL 235275 at 15-16. See also Ruddick Corporation, SEC No-Action Letter, 1989 WL 246671 at 13 (Nov. 20, 1989) (proposal that the company take steps to ensure that it respects "federal" rights in such matters as employment discrimination and union participation deemed non-excludable because its "subject matter" addressed "policy matters" that preclude omission).
Similarly, on February 14, 1991, the SEC took the position that a proposal requesting the publication of EEO data and the adoption of an affirmative action program and a program for purchasing from vendors controlled by women and minorities was not excludable, because it related to "general policy decisions which are beyond the conduct of the Company's day-to-day operations." V.F. Corp., SEC No-Action Letter, 1991 WL 178525, 1991 SEC No-Act. LEXIS 238 (Feb. 14, 1991).
In the same vein, on March 8, 1991 the SEC reviewed a proposal that was identical to a proposal plaintiff ACTWU submitted to Wal-Mart in 1991, and contained four of the five requests included in the 1993 Proposal at issue here. The SEC took the position that although the proposal "concerns employment and other matters that involve the Company's ordinary business operations, ... questions with respect to equal employment opportunity and affirmative action involve policy decisions beyond those personnel matters that constitute the Company's ordinary course of business." Dayton Hudson Corp., SEC No-Action Letter, 1991 WL 178560, 1991 SEC No-Act. LEXIS 428 (Mar. 8, 1991).
Thus, through March 1991, the SEC's no-action letters determined that companies could not exclude proposals requesting the information requested in plaintiffs' Proposal here. On April 4, 1991, however, the full Commission appeared to shift position, and voted 3-2 to reverse the staff position stated in a no-action letter issued to Capital Cities/ABC. The proposal there requested information quite similar to that requested here in plaintiffs' 1993 Proposal, although a notable difference is that in Capital Cities/ABC, the proposal requested a summary of timetables to implement affirmative action programs.[11] The divided Commission determined *888 that the proposal was excludable because it "involves a request for detailed information on the composition of the company's work force, employment practices and policies, and the selection of program content." (Def. Ex. P at 1 [Letter from Secretary of SEC to General Counsel of Capital Cities/ABC] Apr. 4, 1991).
On April 10, 1991, six days after the Commission's decision in Capital Cities/ABC, the SEC staff issued Wal-Mart a no-action letter with respect to ACTWU's 1991 proposal, relying on the rationale of Capital Cities/ABC. The SEC's views on the issues raised in the 1991 proposal are unclear, because the staff based its conclusion partly on an erroneous characterization of the proposal. The SEC incorrectly construed the request that the board of directors publicize Wal-Mart's EEO and affirmative action policies to Wal-Mart's suppliers as requesting "detailed information on the ... Company's practices and policies for selecting suppliers of goods and services." Wal-Mart Stores, Inc., SEC No-Action Letter, 1991 WL 178759, 1991 SEC No-Act. LEXIS 572 (Apr. 10, 1991) (emphasis added).
After the Commission's decision in Capital Cities/ABC, the parties there reached a settlement whereby the shareholder proponents withdrew their petition for review of the Commission's action in the Court of Appeals for the District of Columbia Circuit. In exchange, Capital Cities/ABC agreed not to object to the shareholder proponents' request to vacate the Commission's April 4, 1991 letter. By letter dated July 15, 1991, the Commission agreed to vacate its earlier action (Def. Ex. R [Letter from Secretary of SEC to General Counsel of Capital Cities/ABC] July 15, 1991), rendering the decision of no precedential value, according to Richard Y. Roberts, one of the SEC Commissioners. (See Def. Ex. F [Address by Richard Y. Roberts to American Society of Corporate Secretaries, Oct. 5, 1991] at 12).[12]
On April 10, 1992, the staff issued Wal-Mart a no-action letter with respect to plaintiffs' 1992 proposal, also relying on the rationale of Capital Cities/ABC, notwithstanding that the Commission had earlier vacated its decision in Capital Cities/ABC. The letter to Wal-Mart stated that the Division would not recommend an enforcement action to the SEC if Wal-Mart excluded plaintiffs' proposal from its 1992 proxy materials because there appeared "some basis" for Wal-Mart's omission of the proposal, because the proposal "involves a request for detailed information on the composition of the Company's work-force, its employment practices and policies as well as its relationships with suppliers and other businesses." (Wal-Mart Stores, Inc., SEC No-Action Letter, 1992 WL 178127, 1992 SEC No-Act. LEXIS 574 (Apr. 10, 1992)). Wal-Mart, thereafter, omitted plaintiffs' proposal from its 1992 proxy materials.
In October 1992 the SEC staff expressed in more sweeping terms the view that companies could exclude EEO proposals, reversing the position it took in AT & T in 1988 and Dayton Hudson in 1991. See Cracker Barrel Old Country Stores, Inc., No-Action Letter, 1992 WL 289095, 1992 SEC No-Act. LEXIS 984, *43 (Oct. 13, 1992). The articulated reason for that decision was that the SEC found distinctions between policies implicating broad social issues and the conduct of day-to-day business simply too hard to draw as regards the employment of the general workforce. The shareholder proposal in Cracker Barrel was prompted by that company's announcement of a policy to discriminate against gay men and lesbians. The proposal *889 asked the corporation (1) to include sexual orientation in its anti-discrimination policy, and (2) to enforce its amended policy. See Cracker Barrel, 1992 SEC No-Act. LEXIS 984, *42. The SEC staff and later the Commission characterized the proposal as requesting that the directors "implement hiring policies relating to sexual orientation and incorporate such policies into the corporate employment policy statement." Id. at *2- *3. Based on this characterization of the proposal, the SEC staff explained:
Notwithstanding the general view that employment matters concerning the workforce of the company are excludable as matters involving the conduct of day-to-day business, exceptions have been made in some cases where a proponent based an employment-related proposal on "social policy" concerns. In recent years, however, the line between includable and excludable employment-related proposals based on social policy considerations has become increasingly difficult to draw. The distinctions recognized by the staff are characterized by many as tenuous, without substance and effectively nullifying the application of the ordinary business exclusion to employment-related proposals.
The Division has reconsidered the application of Rule 14a-8(c)(7) to employment-related proposals in light of these concerns and the staff's experience with these proposals in recent years. As a result, the Division has determined that the fact that a shareholder proposal concerning a company's employment policies and practices for the general workforce is tied to a social issue will no longer be viewed as removing the proposal from the realm of ordinary business operations of the registrant. Rather, determinations with respect to any such proposals are properly governed by the employment-based nature of the proposal.
Id. at *2- *3 (emphasis added). On January 15, 1993, the Commission affirmed the Division's position that the proposal was excludable from the Company's proxy material, relying on Rule 14a-8(c)(7), without any further elaboration on the staff's rationale for its determination. (Def. Ex. 1 to Supplemental Mem. [Letter from Secretary of SEC to Deputy Counsel, Office of the Comptroller of New York City] Jan. 15, 1993).
During 1993 the SEC staff issued several no-action letters on shareholder proposals involving employment-related matters. In each case, including those raising EEO issues, the staff decided that the proposal was excludable based on its view that the proposal was "principally directed at the Company's employment policies and practices which are matters relating to the conduct of ordinary business operations." See e.g. Wal-Mart Stores, Inc., SEC No-Action Letter, 1993 WL 107957, 1993 SEC No-Act. LEXIS 588 (Mar. 26, 1993); GTE Corp., 1993 WL 54309, 1993 SEC No-Act. LEXIS 322 (Feb. 25, 1993); United Technologies Co., SEC No-Action Letter, 1993 WL 48821, 1993 SEC No-Act. LEXIS 288 (Feb. 19, 1993); Unisys Corp., SEC No-Action Letter, 1993 WL 48814, 1993 SEC No-Act. LEXIS 270 (Feb. 19, 1993).
Thus, the SEC's current no-action position is that it can no longer continue to draw the lines between includable and excludable proposals that it drew in AT & T, Ruddick Corp., V.F. Corp. and Dayton Hudson. As a result, shareholder proposals involving EEO and affirmative action policies are now deemed excludable by the SEC because they relate to employment policies, and employment policies are viewed as ordinary business matters.
C. Whether Wal-Mart May Exclude Plaintiffs' Proposal
Having considered the SEC's formal interpretive guidelines for Rule 14a-8 and the SEC's application of those guidelines through the no-action letter process, the court turns to whether Wal-Mart carries its burden of showing that the Proposal may be excluded from management's proxy material because it falls within the "ordinary business operations" exception. See 1954 Amendments, 1954 SEC LEXIS 38, *3. Wal-Mart first contends that the court should defer to Cracker Barrel and the 1993 Wal-Mart no-action letter, which categorically reject the SEC's prior position on EEO and affirmative *890 action proposals. It alternatively contends that the Proposal's request for "detailed" information about Wal-Mart's employee and supplier relations involves shareholders in the details of implementing rather than adopting corporate policy, and that the Proposal is thus excludable because the choice between ways to implement corporate policy is mundane in nature and does not involve substantial policy considerations.
1. Whether the Court Should Defer to the SEC's Cracker Barrel Position
The court does not defer to the SEC's position in Cracker Barrel and is not persuaded by its reasoning, because the reasoning in Cracker Barrel sharply deviates from the standard articulated in the 1976 Interpretive Release. The parties, the SEC and courts all agree that courts must defer to the 1976 Interpretive Release. See Pls.Mem. Supp. at 10-14; Def.Mem.Sup. at 18; Brief of Securities Exchange Commission, Amicus Curiae at 30, filed in Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416; Grimes v. Centerior Energy Corp., 909 F.2d 529, 531 (D.C.Cir.1990), cert. denied 498 U.S. 1073, 111 S. Ct. 799, 112 L. Ed. 2d 860 (1991); Dole Food, 795 F.Supp. at 100; Austin, 788 F.Supp. at 194. See also, Zenith Radio Corp. v. United States, 437 U.S. 443, 450, 98 S. Ct. 2441, 24, 57 L. Ed. 2d 337 (1978) (agency's contemporaneous construction of a statute or its own regulations is to be given great weight). As discussed above, that Release interpreted Rule 14a-8(c)(7) as permitting the exclusion of "proposals that are mundane in nature and do not involve any substantial policy or other considerations." 1976 Interpretive Release, 41 Fed.Reg. at 52,998 (emphasis added).
Cracker Barrel fails to apply both parts of the Release's conjunctive standard. In Cracker Barrel, the Commission explicitly acknowledged that proposals in favor of or against the adoption of an EEO program continue to raise "social policy" issues, and it did not suggest any diminished public or shareholder interest in these social issues. It nonetheless took the position that the SEC's inability to continue to draw lines warranted an across-the-board rule that any proposal relating to employment matters is excludable because it relates to day-to-day business affairs, regardless of whether the proposal also involves a substantial policy consideration. This interpretation contravenes the 1976 Interpretive Release's explicit recognition that all proposals could be seen as involving some aspect of day-to-day business operations. That recognition underlay the Release's statement that the SEC's determination of whether a company may exclude a proposal should not depend on whether the proposal could be characterized as involving some day-to-day business matter. Rather, the proposal may be excluded only after the proposal is also found to raise no substantial policy consideration. See 1976 Interpretive Release, 41 Fed.Reg. at 52,998 (proposal requesting company not to construct nuclear power plant may not be excluded even though the proposal also relates to the mundane matters of the fuel mix and types of electrical generating methods), referring to Potomac Electric Power Co., SEC No-Action Letter, 1976 SEC No-Act. LEXIS 622, *3 (Mar. 5, 1976). The SEC did not follow the 1976 Interpretive Release standard in Cracker Barrel or in the 1993 no-action letter issued to Wal-Mart, in that the SEC focused only on whether employment policies generally involve day-to-day business matters.[13]
2. Whether Application of the 1976 Interpretive Release Standard Independently Permits Wal-Mart to Exclude the Proposal
Having concluded that deference is not owed to Cracker Barrel and the 1993 *891 Wal-Mart no-action letter, the court considers whether Wal-Mart has carried its burden for excluding the Proposal under the standard articulated by the 1976 Interpretive Release and the corpus of SEC no-action letters that properly applied that standard, including Dayton Hudson Corp., 1991 WL 178560, 1991 SEC No-Act. LEXIS 428 (Mar. 8, 1991) and American Telephone & Telegraph Co., 1988 WL 235275 at 15 (Dec. 21, 1988).
Wal-Mart itself does not deny that equality and diversity in the workplace involve substantial policy considerations. (Def.Mem.Supp. at 27-28). Indeed, it would be difficult to sustain such a position in light of, among other things, the continual interest of Congress in employment discrimination since 1964, which was most recently underscored in the Civil Rights and Glass Ceiling Acts of 1991.
Rather, Wal-Mart argues that the Proposal would involve shareholders in dictating the implementation of a policy, albeit one of social import. Plaintiffs challenge that characterization of their Proposal. Regardless of whether the court characterizes the Proposal as seeking to adopt a policy or as seeking to implement a policy, the same inquiry guides the court: Does the proposal involve shareholders in dictating mundane matters that involve no substantial policy considerations? See Medical Committee for Human Rights, 432 F.2d at 679; 1976 Interpretive Release, 41 Fed.Reg. at 52,998. See also Roosevelt, 958 F.2d at 429 (the adoption/implementation distinction is not dispositive under all circumstances because, depending on the situation, "implementation arrangements" may "implicate[] significant policy issues"); Lovenheim, 618 F.Supp. at 561 (refusing to exclude proposal asking directors to consider whether further distribution of pat้ de foie gras should be discontinued until a more humane production method is found).
The Proposal seeks to identify general corporate policy regarding equal employment opportunities and efforts, if any, to promote those policies among its suppliers, on whom Wal-Mart may have some influence. As plaintiffs argue, the Proposal does not involve shareholders in demanding, or monitoring compliance with, a specific timetable to accomplish plaintiffs' ultimate goal of improving Wal-Mart's EEO record. This aspect of the Proposal notably distinguishes it from the proposal considered in Capital Cities/ABC that the Commission found excludable. (Def. Ex. P [Letter from Secretary of SEC to General Counsel of Capital/Cities ABC, Apr. 4, 1991] at 1). Plaintiffs' Proposal does not require Wal-Mart to gather any employee-related information that it does not already gather for the purpose of complying with government regulations. The Proposal states that the report should be prepared "at reasonable cost, omitting confidential information," and may be comparable to the one or two page reports produced by other companies in Wal-Mart's industry. (Brouse Aff. at ถถ 19, 21a). The information about employees and policies toward suppliers requested in the Proposal is the same as the information the SEC considered appropriate in Dayton Hudson. See Dayton Hudson Corp., SEC No-Action Letter, 1991 SEC No-Act. LEXIS 428 (Mar. 8, 1991). See also General Electric Co., SEC No-Action Letter, 1991 SEC No-Act. LEXIS 143 (Jan. 25, 1991); CBS, Inc., SEC No-Action Letter, 1991 SEC No-Act. LEXIS 437 (Mar. 7, 1991). The Proposal thus generally involves a significant policy consideration and does not otherwise fall within the exception for proposals relating to the conduct of Wal-Mart's "ordinary business operations."
However, the court finds that a literal reading of the Proposal suggests that the requested report must contain every "step" Wal-Mart management has taken to increase the number of female and minority managers and state all the "ways" Wal-Mart publicizes its EEO and affirmative action policies. Such "steps" could range from formal policies announced by the board of directors and officers, to the individual acts of each supervisor who implements these policies, and to other personnel and purchasing actions that occur hundreds of times each business day. A request for this latter information is excludable because it involves the mundane matters of Wal-Mart's day-to-day business affairs that involve no substantial policy consideration. The court, therefore, finds that *892 the Proposal may not be omitted from Wal-Mart's 1993 proxy material to the extent that plaintiffs agree[14] to the inclusion of the following proposal as an alternative to paragraphs 1-5 of the Proposal they submitted to Wal-Mart:
1. A chart identifying employees according to their sex and race in each of the nine major EEOC defined job categories for 1990, 1991, and 1992, listing either numbers or percentages in each category.
2. A summary description of any Affirmative Action policies and programs to improve performances, including job categories where women and minorities are underutilized.
3. A description of any policies and programs oriented specifically toward increasing the number of managers who are qualified females and/or belong to ethnic minorities.
4. A general description of how Wal-Mart publicizes our company's Affirmative Action policies and programs to merchandise suppliers and service providers.
5. A description of any policies and programs favoring the purchase of goods and services from minority- and/or female-owned business enterprises.
In modifying the Proposal, the court notes the practice of the SEC staff to revise a proposal submitted to it to correct minor defects. Brief of Securities and Exchange Commission, Amicus Curiae at 26 n. 21, filed in Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416 (D.C.Cir.1992). These changes to the Proposal reflect a balance of the rights of shareholders to obtain information on an issue raising significant policy considerations and the right of management to run the day-to-day affairs of the corporation free from shareholder supervision.
III. Conclusion
To summarize, Congress delegated to the SEC the task of ensuring that shareholders are informed on all the major questions of policy to be raised at an annual meeting. The SEC continues to implement Congress's goals by providing shareholders with the right to communicate with other shareholders and with management through the dissemination of proxy material on matters of broad social import such as plant closings, tobacco production, cigarette advertising and executive compensation. The SEC cannot, in effect, eliminate this avenue of shareholder communication with management and other shareholders on a topic of broad social import simply because it finds the line between proper and improper issues for communication hard to draw, and still act consistently with the principles enunciated in the 1976 Interpretive Release. If the SEC wishes to amend its rules or the 1976 Interpretive Release, it may do so. Or if the SEC no longer considers EEO and affirmative action policies to have broad social import โ if a shift in public concerns has diminished interest in these social issues โ the SEC simply can so state, consistent with the 1976 Interpretive Release. The SEC's difficulties in drawing these lines do not excuse it or the courts from making these decisions, which Congress has entrusted to the SEC and, ultimately, to the courts. The court draws a line here between includable and excludable proposals that is consistent with the line previously drawn by the SEC and the courts between matters involving substantial policy considerations and matters involving only "ordinary business operations." When assessed in light of this standard, the Proposal is not excludable.
For all the reasons discussed above, the court concludes that Wal-Mart has not sustained its burden of establishing that it may omit plaintiffs' Proposal, as modified, from Wal-Mart's 1993 proxy solicitation material. The court, therefore, denies Wal-Mart's motion and grants plaintiffs' motion for summary judgment. As stated in the court's Order dated April 19, 1993, Wal-Mart is enjoined from omitting plaintiffs' Proposal, as amended, from Wal-Mart's 1993 proxy material.
*893 Wal-Mart's time to file a notice of appeal or to request a stay of this court's Order contained herein pending appeal shall run from the issuance of this Opinion and Order.
SO ORDERED.
NOTES
[1] This court's jurisdiction is predicated generally upon 28 U.S.C. ง 1331 and specifically upon ง 27 of the Securities Exchange Act of 1934 ("SEA"), which gives federal courts exclusive jurisdiction over all suits "brought to enforce any liability or duty created by this chapter or the rules and regulations thereunder." 15 U.S.C. ง 78aa (West's Supp.1992). The existence of a private right of action by a shareholder under ง 14(a) of the SEA and Rule 14a-8 is well settled and uncontested here. See Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416, 418-25 (D.C.Cir.1992); New York City Employees' Retirement System v. American Brands, Inc., 634 F. Supp. 1382, 1386 (S.D.N.Y.1986).
[2] Wal-Mart filed its motion to dismiss the original complaint on September 23, 1992 for lack of subject matter jurisdiction and for failure to state a claim for which relief can be granted. Wal-Mart based its subject matter jurisdiction argument on its view that plaintiffs' claims were either moot with respect to the 1992 meeting or not yet ripe with respect to the 1993 meeting. (Def.Mem.Supp. at 9-13). The original Complaint was filed after Wal-Mart's 1992 annual meeting and before plaintiffs had submitted a proposal to Wal-Mart for inclusion in the 1993 proxy material. Since then, plaintiffs resubmitted their proposal, Wal-Mart rejected it, and plaintiffs filed an Amended Complaint pertaining solely to the upcoming 1993 annual meeting. Wal-Mart stipulated that the current dispute between the parties "is now a ripe, justiciable controversy." (Def.Renewed Mem. at 1). The court concurs. See American Motorists Ins. Co. v. United Furnace Co., 876 F.2d 293, 302 n. 4 (2d Cir.1989) (intervening events after the filing of the original complaint that are relevant to the ripeness inquiry "should be considered and may be determinative").
[3] By stipulation of the parties, plaintiffs were permitted to respond to Wal-Mart's motion to dismiss by moving for summary judgment on Oct. 30, 1992. Plaintiffs supplied affidavits containing factual information in support of their motion; Wal-Mart supplied exhibits and other matters outside the pleadings and responded to plaintiffs' Local Rule 3(g) statement "solely for the purpose of responding to, and enabling a resolution of plaintiffs' motion." For these reasons, the court treats the motions as cross-motions for summary judgment. See Fonte v. Board of Managers of Continental Towers Condominium, 848 F.2d 24, 25 (2d Cir.1988). The parties agree as to all material facts; their dispute is limited to questions of law. Consequently, this case is appropriate for resolution on summary judgment. See Brady v. Town of Colchester, 863 F.2d 205, 210 (2d Cir.1988).
[4] The resolution is preceded by the following preamble:
WHEREAS, Wal-Mart is one of the nation's largest employers in what is rapidly becoming a service oriented job market for many Americans;
We believe the vast majority of Wal-Mart's customers are either women or members of a racial minority group.
By the beginning of the next century, the majority of new entrants to our nation's workforce will be women and/or minority group members.
We believe it makes good business sense for Wal-Mart to describe and publicize its employment standards which relate to its core customer groups and potential employees. By publicizing its standards, Wal-Mart will be an example to companies with whom it does business.
We share the concern stated by U.S. Labor Department Secretary Lynn Martin who has declared a new goal of challenging the "glass ceiling investigation to remedy this situation."
We believe a report containing basic information requested in this resolution keeps the issue high on management's agenda. It will also reaffirm our public commitment to non-discriminatory employment practices and equal economic opportunity and be responsive to the concerns of women and minorities. The format of the report requested is not important. Different companies use different styles and levels of detail in telling their story to shareholders. Bristol-Myers, Squibb and Travellers produced a magazine style report. Campbell Soup produced a four page document. GM discloses in its Public Interest Report.
(Pls. Ex. 4 at 2).
[5] Shareholders seeking to communicate with fellow shareholders have another avenue for doing so, provided by Rule 14a-7. Rule 14a-7 provides that the corporation must mail out a shareholder communication to other shareholders if the shareholder is willing to pay for both the printing and mailing costs. See 17 C.F.R. ง 240.14a-7(a). Rule 14a-7 imposes no content restriction on the communication and management has no choice but to mail out the statement of shareholder willing to underwrite the cost. In contrast, Rule 14a-8 imposes content restrictions, but a proposal that passes muster is included in a management solicitation at no charge to the shareholder. See Patrick J. Ryan, "Rule 14a-8, Institutional Shareholder Proposals, and Corporate Democracy," 23 Ga.L.Rev. 97, 108 n. 40 (1988) (discussing interplay between the two rules).
[6] Other situations in which a shareholder proposal may be omitted are where the proposal: (1) is not a proper subject for action by security holders under the laws of the registrant's domicile, 17 C.F.R. ง 240.14a-8(c)(1); (2) would require the registrant to violate the law if implemented, id. at ง 240.14a-8(c)(2); (3) relates to the redress of a personal grievance, id. at ง 240.14a-8(c)(4); (4) relates to operations that do not meet a specified economic level, id. at ง 240.14a-8(c)(5); and (5) deals with a matter beyond the registrant's power to effectuate, id. at ง 240.14a-8(c)(6). The term "registrant" refers to a company whose securities are registered pursuant to the SEA.
[7] The law of the company's state of incorporation is also a source of authority as to which proposals relate to "ordinary business operations" under Rule 14a-8(c)(7) and which proposals are "proper subject for action by shareholders" under Rule 14a-8(c)(1). See Medical Committee for Human Rights, 432 F.2d at 678 (discussing Senate hearings on SEC enforcement problems); Dole Food, 795 F.Supp. at 100 n. 3; Def. Ex. F. [Address by Richard Y. Roberts to American Society of Corporate Secretaries, Oct. 5, 1991] at 8. However, most states, including Delaware, have not developed the law on this issue beyond the statement that the directors and officers shall manage the business affairs of the corporation. See Del.Code Ann. tit. 8 ง 141(a). In practice over the last half century the SEC rather than state courts have been determining whether proposals may be excluded on these bases. See Louis Loss & Joel Seligman, 4 Securities Regulation 2012 (3rd ed. 1990) (SEC staff develops a "common law" of includable proposals).
[8] Shareholders and management have no right to appeal staff advice to the Commission, although the Commission may, in its discretion, grant a party's request for review. See Informal Procedures Release at 86,605-06; 17 C.F.R. ง 202.1(d). The position of the full Commission in affirming or reversing a staff determination is also informal, see 17 C.F.R. ง 202.1(d), and does not "affect[] the right of ... a shareholder ... to institute a private action with respect to the management's intention to omit the proposal from its proxy materials." Informal Procedures Release at 86,604.
[9] Although in the past courts in this district have relied on the SEC's determination that the particular proposal before the court could be excluded, without referring to other no-action letters or case law, these decisions pre-date the SEC's explanation of the role of its informal review process and pre-date the D.C. Circuit's clear statement in Roosevelt that no-action letters do not merit the deference afforded formal rulemaking and agency adjudication. See, e.g., Brooks, 308 F. Supp. 810, 813 (S.D.N.Y.1969); Peck v. Greyhound Corp., 97 F. Supp. 679, 681 (S.D.N.Y. 1951).
[10] In the employment policy area, compare Capital Cities Communications, Inc., 1984 WL 45007 (Mar. 14, 1984) (company may omit proposal requesting EEO data as well as overall company policy on employee fringe benefits generally); Transamerica Corp., 1986 WL 66511 (Jan. 22, 1986) (company may omit proposal requesting directors to develop code of conduct pertaining to community and government relations as well as equal employment opportunity); Capital Cities/ABC, 1987 WL 107813 (Mar. 23, 1987) (company may omit a proposal that included a request for a report on criteria regarding utilization of racial minorities and women in acting roles and production crews as well as a report on policies and processes designed to ensure accuracy of dramatizations in television programming) with General Electric Co., SEC No-Action Letter, 1991 WL 176574, 1991 SEC No-Act. LEXIS 143 (Jan. 25, 1991); CBS, Inc., SEC No-Action Letter, 1991 WL 178540, 1991 SEC No-Act. LEXIS 437 (Mar. 7, 1991); Capital Cities/ABC, 1991 WL 178565, 1991 SEC No-Act. LEXIS 422 (Mar. 7, 1991) (companies may not omit a proposal that requested both EEO information about its own employees and their efforts to make program content more responsive to women and minorities).
On April 4, 1991, the full Commission reversed the staff position in Capital Cities, finding that the proposal "involves a request for detailed information on the composition of the company's work force, employment practices and policies, and selection of program content." (Def. Ex. P at 1).
[11] The proposal in Capital Cities/ABC requested:
1) a breakdown by race and sex of all employees in each of the nine major EEOC job categories for 1988, 1989 and 1990 (equivalent to Proposal request in part 1);
2) a summary of affirmative action programs and timetables to implement these programs, and a description of major problems in meeting the goals of these programs (substantially similar to Proposal request in part 2 except for the reference to a timetable);
3) a description of the actions taken with the producers of television programming to increase the number of female and ethnic minority writers, producers and directors; (substantially similar to Proposal request in part 3); and
4) a description of the actions taken to ensure that the content of those programs is responsive to the concerns of women and minorities.
(Def. Ex. N at 1-2; Capital Cities/ABC, 1991 WL 178565, 1991 SEC No-Act. LEXIS 422 (Mar. 7, 1991).
[12] The significance of this statement is unclear in light of the SEC's position that "because the staff's advice on contested proposals is informal and nonjudicial in nature, it does not have precedential value with respect to identical or similar proposals submitted to other issuers in the future." Informal Procedures Release at 86,604.
[13] This is not to say that the SEC cannot change its views with regard to what issues involve substantial policy considerations. If the SEC finds that the issues of EEO and affirmative action programs no longer implicate significant policy considerations, the 1976 Interpretive Release permits exclusion of proposals relating to them. No such change of view was expressed in Cracker Barrel.
Nor does the court suggest that the SEC may not abandon the 1976 Interpretive Release altogether, so long as, in doing so, it complies with appropriate procedures, which procedures need not be addressed here. The court's holding today is limited solely to the proposition that a court should not defer to a position taken by the SEC in a no-action letter that is inconsistent with an SEC interpretation offered in the context of formal notice and comment rulemaking.
[14] Plaintiffs consented to this change in language in an April 19, 1993 telephone conference with the court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510646/ | 856 S.W.2d 45 (1993)
Tom G. DINGUS and James D. Adams, Appellants,
v.
FADA SERVICE CO., INC.; H.C.M.C., Inc.; Pikeville Investors, Inc.; P & P Investors, Inc.; Holiday Inn, Inc.; Prestonsburg Investors, Inc.; Paintsville Investors, Inc.; H.D. Fitzpatrick, Jr.; Jack Absher; and Middleton & Reutlinger, Appellees.
No. 91-CA-3052-MR.
Court of Appeals of Kentucky.
June 11, 1993.
Shelby C. Kinkead, Jr., Bulleit, Kinkead, Irvin & Reinhardt, Lexington, Eugene C. Rice, Rice, Preston & Brown, Paintsville, for appellants.
Richard E. Fitzpatrick, Gess, Mattingly & Atchison, Lexington, Clifford B. Latta, Prestonsburg, for appellees, Fitzpatrick and Absher.
*46 Brooks Alexander, James R. Higgins, Vonnell C. Tingle, Julie Ann Gregory, Middleton & Reutlinger, Louisville, Ralph H. Stevens, Combs & Stevens, Prestonsburg, James G. LeMaster, Greenebaum, Doll & McDonald, Lexington, for appellees.
Before DYCHE, McDONALD and WILHOIT, JJ.
McDONALD, Judge.
This appeal involves questions of deadlocked shareholders' voting, shareholders' pre-emptive rights, ultra vires acts, corporate custom, directors/shareholders' estoppel and ratification, all pursued in an action for judicial dissolution under KRS 271B.14-300(2).
Paintsville Investors, Inc. (Paintsville) was formed for the purpose of constructing and operating a nursing home under the corporate umbrella, FADA Service Co. (FADA), a holding company.
FADA, as the parent company of Paintsville and the other appellee corporations, operates nursing homes in eastern Kentucky, along with a Holiday Inn in Prestonsburg. For a glimpse at the scope of its corporate business, FADA's corporate revenues amounted to about 8.5 million dollars a year, with nearly 300 active employees and a $300,000 monthly payroll. The nursing home operations care for about 280 patients, with 225 employees, and the Holiday Inn employs 70 people servicing 2500 guests each month. FADA's ownership and the ownership of its subsidiaries are represented by four shareholders, each with 25% of the stock. The shareholders are Tom G. Dingus and Dr. James D. Adams, the plaintiffs in the trial court and appellants on appeal, and H.D. Fitzpatrick, Jr. and Jack Absher, who with the named corporations and their counsel, Middleton & Reutlinger, were the defendants in the trial court and the appellees herein.
A history of the corporations shows quite a successful operation. After almost 20 years of entrepreneurial achievement, corporate philosophical differences surfaced among the shareholders.[1] Dingus and Adams were nearing retirement age. They wanted to ultimately withdraw from active operation of the corporations, while Fitzpatrick and Absher desired to expand their operations.
Over the years, with Fitzpatrick as president and the most assertive of the shareholders, the shareholders would meet every Tuesday and handle corporate affairs. Connie Sammons, the business office manager, handled the supervision of corporate affairs and day-to-day corporate operations. She also attended the Tuesday meetings with the shareholders.
Paintsville was incorporated in 1987 for the purpose of obtaining a certificate of need for a nursing home facility in Johnson County. The first filed certificate of need application was denied because the state had a ban or moratorium on the development of such facilities in the state. After the application's denial, Paintsville remained dormant.
The historical practice of these shareholders, directors, and officers was that when a corporate debt was incurred Mrs. Sammons would make a monetary call and each shareholder contributed an equal sum. This procedure was done until each of the corporations was able to generate a profit on its own. After the contributions reached a sum of $500 by each shareholder, stock in the corporations was issued. No formal minutes were kept concerning the Tuesday meetings, no motions were made, and no formal voting was recorded. It is undisputed that the corporation by-laws were offended by issuing the corporate stock in such manner, but it was the manner in which the business was conducted from its inception.
In November, 1990, Connie Sammons informed the shareholders that Fitzpatrick wanted to go forward with a new application for a certificate of need for Paintsville. The state had lifted the ban on nursing homes, and it was quite possible that the *47 new application would be approved with adequate demonstration of the need for such facility in Johnson County. Mrs. Sammons initially informed the shareholders that there were sufficient funds in the corporation to complete the application. Subsequently, Mrs. Sammons advised that more money was needed for the new application and for the purchase of an option on the property necessary for the facility. The amount of $2100 was needed for the option, and the Paintsville corporate account was already overdrawn $871 for the payment of necessary corporate expenses. The call was for $1250 from each shareholder.
Initially, Dingus and Adams were reluctant to be part of the Paintsville application renewal and, with the request for additional money, Dingus and Adams balked.
Finally, Dingus and Adams agreed to renew the application for the Paintsville project. Prior to the meeting on November 20, 1990, Mrs. Sammons informed the shareholders, at Fitzpatrick's direction, that a contribution of $2500 would be requested from each. This sum, according to Dingus and Adams, was five times greater than the amount needed for the application renewal. Dingus and Adams made their feelings known and Fitzpatrick was so informed. The minutes of the November 20, 1990 meeting do not reflect these circumstances, but testimony has reconstructed it. Revealing is the fact that on November 20, 1990, after Fitzpatrick and Absher made their individual contributions, Dingus and Adams signed checks for the property option, knowing full well that previously there were no funds to make such payment.
A special meeting of the shareholders was formally called by Mrs. Sammons for January 30, 1991, requested by Dingus and Adams. The corporate minutes reflect the following: (1) that each shareholder owned 14 shares;[2] (2) that Fitzpatrick and Absher had five shares each of unissued stock because of their $2500 contributions in response to the previous monetary call; (3) that demand was made on Dingus and Adams to contribute $2500 each for five additional shares; (4) Dingus and Adams refused any additional contributions; and (5) Dingus and Adams offered to be bought out for $7000 each, the amount they had previously contributed to the corporation.
On March 18, 1991, five additional shares were issued and registered to Fitzpatrick and Absher. This stock issuance broke the deadlock between the warring factions which triggered the filing for dissolution of the corporation in the circuit court. After the conclusion of the trial, the circuit court made findings of fact, summarized and paraphrased as follows:
1) Paintsville's business affairs were tightly but informally managed, as the same shareholders, directors and officers did for the holding company and its other subsidiaries since 1965. A custom for doing business was established which included the method of issuing stock, albeit in violation of its own by-laws, and therefore, by inference, a technical violation of KRS 271B.6-211.
2) It was customary that when a legitimate corporate debt arose, current or anticipated, with insufficient funds to cover it, an informal call for equal contributions was made to cover the debt. The calls were made by telephone requests or at the regular Tuesday meetings.
3) Once the contributions amounted to $500, a share of stock was issued. Shareholders were not obligated to make additional contributions.
4) Dingus and Adams knew that Fitzpatrick and Absher contributed $2500 each for additional Paintsville debt coverage. They were asked to contribute but refused. They did not object to the minutes of the March 18, 1991 meeting verifying these matters nor did they object to Fitzpatrick and Absher receiving five additional unissued shares of stock. No corrections of the corporate minutes were ever offered.
5) The value of Paintsville was found to be $75,000, based on sums spent in planning, legal costs for certificate of need, *48 property option and the cost of proof of value.
6) The proof of value by the Cardinal Group of $250,000 as the value of Paintsville was rejected and excluded by the circuit court.
The first issue on appeal is that the "issuance" of the five shares of Paintsville investors' stock to Fitzpatrick and to Absher on March 18, 1991, was ultra vires and without effect.
Dingus and Adams argue that to comply with KRS 271B.6-210 and § 7(e) of the corporate by-laws,[3] there had to be a call for monetary contribution, a second to the call, an affirmative vote and then a resolution prior to the corporation issuing stock. Fitzpatrick and Absher assert that, as it was understood by all, if any shareholder did not want to answer a call, he could walk away from it and keep his status quo in the corporation by retaining the number of shares he owned. Those who wanted to go forward with the opportunity to acquire more shares would answer the call and make a contribution. This method of corporate financing was not only a tacit understanding among the shareholders; it was, in fact, the only method in which stock issuances were made, and the issuance in question was not ultra vires.
Professor Harry G. Henn in his hornbook Law of Corporations, 3d Edition (1983), § 184, explains:
The approach to ultra vires acts [ultra vires acts are sometimes confused with illegal acts, or with acts within the power of the corporation but exercised either by the improper corporate organ or by the proper corporate organ without complying with the required procedures] has undergone a drastic change over the years. As a result the Ultra Vires Doctrine is no longer as important as it once was.
In times past, corporations were formed with more limited purposes (or objects) and powers, and these more strictly construed. By the traditional theories, a corporation was deemed to be an artificial entity created by the state with limited capacity. Any corporate act beyond such capacity was deemed ultra vires, void, illegal, and a nullity.
. . . .
By the more modern approach, an ultra vires act if not a public wrong is not illegal. The question is not one of "capacity" but of powers.
In his treatise on Corporations found in Kentucky Jurisprudence, Revised Volume, 1992, William S. Haynes instructs that the doctrine of ultra vires has lost its favor with courts. Clear distinction must be made between conduct which is illegal, tainted by fraud, prohibited by statute and contrary to public policy; and conduct alleged to be ultra vires or beyond the expressed or implied powers of a corporation. The enactment of KRS 271B.3-040 under the Kentucky Business Corporation Act, effective 1989, greatly limited the ultra vires doctrine. It states, with four exceptions, which we conclude are not applicable, that:
(1) . . . [T]he validity of corporate action shall not be challenged on the ground that the corporation lacks or lacked power to act.
While the claims of ultra vires acts are curtailed, it remains that the statute is accommodated by equitable proceedings. The mentality of the present law is when the corporation benefits from acts, absent fraud, self dealing and illegality, the doctrine of ultra vires is not readily available for application.
Herein, the directors/shareholders failed to comply with the corporate by-laws in that the stock issuance of March 18, 1991, was not by resolution. However, such, in our opinion, was not an illegal or fraudulent act. Certainly, the corporation was empowered to issue 10 additional shares because its articles authorized 2000 shares with only 56 shares issued as of March 18. Professor Henn's previously cited instruction *49 is apropos in stating, "The question is not one of `capacity' but of powers."
Regardless, there was ample time for Dingus and Adams to petition for injunctive relief to enjoin the issuance of the stock. It was on November 20, 1990, that Dingus and Adams knew Fitzpatrick and Absher contributed $2500 each. It was on January 30, 1991, that Dingus and Adams knew Fitzpatrick and Absher claimed five shares of additional but unissued stock. It was March 18, 1991, when the stock was actually issued and registered. Dingus and Adams did not object or move to prevent the issuing of the stock and its registration.
A close look at the actions taken makes it obvious the corporation benefited. The moneys contributed were for the payment of legitimate corporate debts and anticipated expenses. The securing of the certificate of need was in the furtherance of the corporation's purpose and business interest. Potentially, the certificate will be a corporate asset far beyond the value of the shareholders' individual contributions.
The stock issuance of March 18, 1991, the trial court found, was a de jure issuance because it was done in the same manner as all of the prior issuances. This corporate behavior established a custom. It was also the usual past practice of not only Paintsville, but of FADA and the other subsidiaries. The trial court's findings rested on inferred facts from the record, which have the same dignity as evidentiary facts. Unless clearly erroneous, we cannot disturb them on appeal. CR 52.01.
However, we detect a serious flaw in the trial court's analysis. The trial court did not take into consideration that all of the prior stock issuances were accomplished by some type of majority board/shareholder agreement or acquiescence, notwithstanding the fact that a resolution was lacking. In the instance before us, the directors/shareholders were deadlocked. Being deadlocked, the action taken cannot fall within the scope of corporate custom, and the findings and conclusions of the trial court to this effect are clearly erroneous. The trial court's declaration of corporate custom is reversed.
The argument of Dingus and Adams that the money contributed after the call was a loan by Fitzpatrick and Absher to the corporation is baseless in fact. It was never the experience of Paintsville that its directors/shareholders made loans to it. It was never the experience of any of the corporations that such a method of corporate financing was utilized. Contending that these contributions were loans is fantasy. Stock was always issued after the shareholders advanced or contributed money for corporate debts.
We are persuaded that principles of estoppel and ratification will prevent Dingus and Adams from challenging the stock issue. In this regard, we affirm the trial court.
A good lesson is taught from an old case. That lesson is found in Elk Valley Coal Co. v. Thompson, 150 Ky. 614, 150 S.W. 817, 822 (1912):
Where the unauthorized act is beneficial to the corporation, and the directors have individual knowledge of it, slight evidence will be sufficient to establish ratification by acquiescence or failure to repudiate, and this upon the theory that a party who accepts benefits will be deemed to have done so with a knowledge of the conditions and circumstances surrounding the transaction out of which the act creating the benefit arose, and must take the burdens with the benefits.
Appellants Dingus and Adams rely on Roach v. Bynum, Ala., 437 So. 2d 69 (1983), where an owner of a closely held corporation, without notice, issued himself an additional 500 shares of stock after it was clear he was losing control of the corporation. The Alabama Supreme Court declared the issuance void. The facts in Roach do not come close to our facts; therefore, the precedential value of the case is immaterial to us.
Herein, Dingus and Adams agreed reluctantly to be part of the renewal of the application and then refused to contribute any money for legitimate expenses. Dingus *50 and Adams sat back and witnessed Fitzpatrick and Absher make up their part of the expenses by additional contributions. They knew Fitzpatrick and Absher contributed with the anticipation of receiving additional shares. The facts are substantial to support the trial court's finding of Dingus and Adams' waiver of their preemptive rights to equal ownership, and the findings of estoppel and ratification by acquiescence.
We affirm the trial court in adjudging that Fitzpatrick and Absher are the legal owners of five additional shares each of the authorized shares of Paintsville. The issue over the fair market value of the certificate of need is now moot and we will not address it.
The last issue is that the trial court erred by failing to remove Middleton & Reutlinger as counsel for the corporate defendants and in approving payment of their fees.
Dingus and Adams claim that the law firm, Middleton & Reutlinger, which serviced Paintsville, and the other corporations, took sides in the dispute and militantly advanced the interests of Fitzpatrick and Absher. They also assert that the law firm charged too much in fees for services performed.
When this litigation was filed, in its early injunctive stages, the trial court charged Middleton & Reutlinger, as corporate counsel, to take care of the corporations and preserve the assets. We conclude Middleton & Reutlinger did nothing in handling the corporate affairs inconsistent with the sensible admonitions of the trial court.
The corporations were represented by Middleton & Reutlinger; Dingus and Adams had separate counsel as did Fitzpatrick and Absher. It would have been foolhardy to have the corporations represented by strangers.
Dingus and Adams cite In re Dissolution of Clemente Bros., Inc., 239 N.Y.S.2d 703, 19 A.D.2d 568 (1963), for the proposition that in a dissolution proceeding the corporation, through its counsel, could not militantly align itself on one side of the dispute which was antagonistic to the other side. The Clemente Bros., Inc. opinion is not very enlightening, but it does hint that militant alignment on the side of one of two equal, discordant stockholders is unwarranted.
In our review of Middleton & Reutlinger's performance, we see not the taking of one side or the other, but the taking of a stance for preserving and defending the corporations under the entrustment orders of the trial court. We affirm the trial court in this regard.
The dispute over the amount of the fees is a matter within the sound discretion of the trial court. Reasonableness of an attorney fee must encompass the time involved, the task assigned, and the degree of difficulty of the work under the circumstances. Reasonableness of attorney's fee is for the trial court to determine, subject only to the abuse of discretion. Cf. Woodall v. Grange Mutual Casualty Co., Ky., 648 S.W.2d 871 (1983). There was no abuse of discretion in this matter.
In conclusion, the judgment of the Floyd Circuit Court is affirmed in part and reversed in part, and the case is remanded for the circuit court to dismiss the action by Dingus and Adams to dissolve Paintsville Investors, Inc.
All concur.
NOTES
[1] The shareholders were not only equal owners, but were also the directors and officers of the appellee corporations.
[2] The articles of incorporation authorized 2000 shares of no par common stock.
[3] "Section 7. Secretary. The Secretary shall:. . . (e) sign with the President, certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; . . ." (emphasis added). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511628/ | 398 A.2d 783 (1979)
Jerome FRANKS, Defendant Below, Appellant,
v.
STATE of Delaware, Plaintiff Below, Appellee.
Supreme Court of Delaware.
Submitted on Re-Argument January 11, 1979.
Decided January 31, 1979.
Dean C. Johnson, Dover, for defendant below, appellant.
Harrison F. Turner, Deputy Atty. Gen., Dover, for plaintiff below, appellee.
Before HERRMANN, C. J., DUFFY and McNEILLY, JJ.
McNEILLY, Justice:
The United States Supreme Court, reversing a decision of this Court, has held that a defendant in a criminal proceeding has a right to an evidentiary hearing under the Fourth and Fourteenth Amendments, *784 subsequent to the ex parte issuance of a search warrant, to challenge the truthfulness of factual statements made in supporting affidavits if the defendant makes a substantial preliminary showing that the affiant included a false statement knowingly and intentionally, or with reckless disregard for the truth, in the warrant affidavit, and if the allegedly false statement is necessary to the finding of probable cause. Jerome Franks, Petitioner, v. State of Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978); Franks v. State, Del.Supr., 373 A.2d 578.
Speaking for the majority, Justice Blackman stated:
"In the present case the Supreme Court of Delaware held, as a matter of first impression for it, that a defendant under no circumstances may so challenge the veracity of a sworn statement used by police to procure a search warrant. We reverse, and we hold that, where the defendant makes a substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit, and if the allegedly false statement is necessary to the finding of probable cause, the Fourth Amendment requires that a hearing be held at the defendant's request. In the event that at that hearing the allegation of perjury or reckless disregard is established by the defendant by a preponderance of the evidence, and, with the affidavit's false material set to one side, the affidavit's remaining content is insufficient to establish probable cause, the search warrant must be voided and the fruits of the search excluded to the same extent as if probable cause was lacking on the face of the affidavit."
* * * * * *
"In sum, and to repeat with some embellishment what we stated at the beginning of this opinion: There is, of course, a presumption of validity with respect to the affidavit supporting the search warrant. To mandate an evidentiary hearing, the challenger's attack must be more than conclusory and must be supported by more than a mere desire to cross-examine. There must be allegations of deliberate falsehood or of reckless disregard for the truth, and those allegations must be accompanied by an offer of proof. They should point out specifically the portion of the warrant affidavit that is claimed to be false; and they should be accompanied by a statement of supporting reasons. Affidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained. Allegations of negligence or innocent mistake are insufficient. The deliberate falsity or reckless disregard whose impeachment is permitted today is only that of the affiant, not of any nongovernmental informant. Finally, if these requirements are met, and if, when material that is the subject of the alleged falsity or reckless disregard is set to one side, there remains sufficient content in the warrant affidavit to support a finding of probable cause, no hearing is required. On the other hand, if the remaining content is insufficient, the defendant is entitled, under the Fourth Amendment, to his hearing. Whether he will prevail at that hearing is, of course, another issue."[1]
*785 It appears in the affidavit under attack in this case that the victim was allegedly raped at knifepoint at her residence by "an unknown black male, approximately 5'7", 150 lbs., dark complexion, wearing white thermal undershirt, black pants with a belt having a silver or gold buckle, a brown leather ¾ length coat with a tie belt in the front and a dark knit cap pulled around the eyes." It further appears that:
"15. On Tuesday, 3/9/76, your affiant contacted Mr. James Williams and Mr. Wesley Lucas of the Delaware Youth Center where Jerome Franks is employed and did have personal conversation with both these people.
16. On Tuesday, 3/9/76, Mr. James Williams revealed to your affiant that the normal dress of Jerome Franks does consist of a white knit thermal undershirt and a brown leather jacket.[2]
17. On Tuesday, 3/9/76, Mr. Wesley Lucas revealed to your affiant that in addition to the thermal undershirt and jacket, Jerome Franks often wears a dark green knit hat."
Based upon the facts stated, the Magistrate found probable cause and issued the search warrant. Pursuant thereto, the police searched defendant's apartment and found a white thermal undershirt, a knit hat, dark pants, a leather jacket, and a single-blade knife, all of which were introduced into evidence at trial which resulted in defendant's conviction.
Prior to trial, defense counsel moved to suppress the clothing and knife alleging that the warrant on its face did not show probable cause and that the ensuing search and seizure were in violation of the Fourth and Fourteenth Amendments. At the suppression hearing, defense counsel amended the challenge to include an attack on the veracity of the affiant's statements. Additionally, counsel requested the right to call as witnesses Lucas and Morrison asserting they would testify they had not been personally interviewed by the warrant affiant as stated in paragraphs 15, 16 and 17 of the affidavit and that the misstatements were included in "bad faith."
Because of this Court's original resolution of this appeal by a determination that no attack upon the veracity of a search warrant affidavit could be made, appellant's contentions relating to the proffer of evidence that would have been introduced for impeachment were not considered.
Defendant's petition for certiorari to the United States Supreme Court presented only the issue of whether the Trial Court had erred in refusing to consider his allegation of misrepresentation in the warrant affidavit. By reversing this Court's absolute rule the United States Supreme Court answered that issue in the affirmative if the guidelines for mandating an evidentiary hearing laid down in the Court's opinion by Justice Blackmun are met. Assuming for purposes of this case only that defendant has met the requirements of those guidelines, we turn to the proffered evidence to determine that if by setting the alleged false paragraphs of the warrant affidavit aside there remains sufficient content to support a finding of probable cause. Excised of the alleged false paragraphs the warrant affidavit contains sufficient uncontested allegations to establish probable cause, i. e., the rape occurred a short distance and within sight of where defendant lived; six days prior to the rape defendant had sexually assaulted another female at his residence; the physical description of the rape perpetrator matched the description of defendant; when arrested on an unrelated sex offense, on the day of the rape, defendant stated to a police officer *786 that he thought the charge concerned the rape victim and not the person he was arrested for sexually assaulting; the defendant had a prior criminal record involving rape; the items of clothing to be searched for were described by the victim as being worn by defendant at the time of committing the rape. See Edwards v. State, Del.Supr., 320 A.2d 701 (1974).
The United States Supreme Court stated in its opinion that the framing of suitable rules to govern proffers challenging the veracity of a sworn statement used by police to procure a search warrant, is a matter suitably left to the States. The State in its argument before the United States Supreme Court contended that Delaware Superior Court Criminal Rule 41(e) is a suitable rule providing an independent and adequate state ground and that defendant had failed to comply with the requirements of the rule.[3] Because this Court disposed of defendant's Fourth Amendment claim of right to attack the veracity of a search warrant affidavit on its merits, without reaching defendant's proffer, the question of right, being a federal question, was left open to review requiring the United States Supreme Court to accept certiorari.
In future cases attacking the veracity of a sworn statement used by police to procure a search warrant the procedural requirements of Rule 41(e) must be strictly adhered to. In addition to compliance with the requirements of 41(e), affidavits or otherwise reliable statements of witness shall be filed with the motion or their absence satisfactorily explained in the motion.
Based upon the foregoing the judgment of conviction is affirmed.
NOTES
[1] The dissenting opinion written by Justice Rehnquist, with whom Chief Justice Burger joins, expressing concern over the result of the majority's ruling states in part:
"The Court's opinion in this case carefully identifies the factors which militate against the result which it reaches, and emphasizes their weight in attempting to limit the circumstances under which an affidavit supporting a search warrant may be impeached. I am not ultimately persuaded, however, that the Court is correct as a matter of constitutional law that the impeachment of such an affidavit must be permitted under the circumstances described by the Court, and I am thoroughly persuaded that the barriers which the Court believes that it is erecting against misuse of the impeachment process are frail indeed."
* * * * * *
"I greatly fear that this generalized language will afford insufficient protection against the natural tendency of ingenious lawyers charged with representing their client's cause to ceaselessly undermine the limitations which the Court has placed on impeachment of the affidavit offered in support of a search warrant. I am sure that the Court is sincere in its expressed hope that the doctrine which it adopts will not lead to `any new large-scale commitment of judicial resources,'...."
[2] The record reveals that the name "James Williams" was incorrectly inserted in the affidavit, the correct name being James Morrison, defendant's supervisor at the Youth Center.
[3] Superior Court Criminal Rule 41(e) provides:
"Motion for Return of Property and to Suppress Evidence. An application for the return of property and to suppress for use as evidence anything obtained as a result of an unlawful search and seizure shall be made by motion supported by the affidavit of the person on whose behalf the motion is made. The motion shall state the grounds upon which it is made and shall set forth the standing of the moving party to make the application. The motion shall be made before the trial or hearing in which the property seized may be used as evidence, unless opportunity therefor did not exist or the moving party was not aware of the grounds for the motion; but the Court in its discretion may entertain the motion at the trial or hearing. Issues of fact shall be determined by the Court on affidavits or in such other manner as the Court directs." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510668/ | 472 Pa. 473 (1977)
372 A.2d 788
COMMONWEALTH of Pennsylvania
v.
Leo WALLOE, Appellant.
Supreme Court of Pennsylvania.
Argued November 18, 1975.
Decided April 28, 1977.
*474 *475 Richard F. Furia, Philadelphia, for appellant.
F. Emmett Fitzpatrick, Dist. Atty., Steven H. Goldblatt, Asst. Dist. Atty., Chief, Appeals Div., Benjamin H. Levintow, Philadelphia, for appellee.
Before EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.
ORDER
PER CURIAM:
The Court being equally divided, the judgment of sentence is affirmed.
POMEROY, J., files an Opinion in Support of Affirmance, joined by EAGEN, C.J., and O'BRIEN, J. MANDERINO, J., files an Opinion in Support of Reversal, joined by ROBERTS and NIX, JJ.
JONES, former C.J., did not participate in the consideration or decision of this case.
OPINION IN SUPPORT OF AFFIRMANCE
POMEROY, Justice.
The opinion in support of reversal, infra, would grant a new trial in this case because the trial judge refused to allow defense counsel to introduce at appellant's second *476 trial testimony given by a missing witness, Charles Anderson, at appellant's first trial. In my view, the trial court did not abuse its discretion in ruling as it did, and I would affirm the judgment of sentence.
The statute governing the admission of the testimony of a witness given at a prior trial reads in relevant part as follows: "Whenever any person has been examined as a witness . . . for the defense, in any criminal proceeding . . ., if such witness afterwards. . . cannot be found, . . . notes of his examination shall be competent evidence upon a subsequent trial of the same criminal issue . . . ." Act of May 23, 1887, P.L. 158, § 3, 19 P.S. § 582. "A witness `cannot be found'" within the meaning of the above-quoted Act, however, "only if a good-faith effort to locate the witness and compel his attendance at trial has failed." Commonwealth v. Blair, 460 Pa. 31, 34, 331 A.2d 213, 214 (1975). The burden of demonstrating such a "good-faith effort" is on the party seeking to introduce the prior testimony, Commonwealth v. Blair, supra, and "[t]he question of the sufficiency of the preliminary proof as to the absence of a witness is largely within the discretion of the trial judge." Commonwealth v. Miller, 203 Pa.Super. 511, 516, 201 A.2d 256, 259 (1964), quoted in Commonwealth v. Jackson, 463 Pa. 301, 305, 344 A.2d 842, 844 (1975). Accord, Commonwealth v. Beach, 445 Pa. 257, 261, 284 A.2d 792, 794 (1971). Thus, the question here is whether the trial court abused its discretion in ruling that appellant had failed to present sufficient evidence to prove that Charles Anderson was unavailable to testify.
The opinion in support of reversal relies upon Commonwealth v. Jackson, supra, to support its conclusion that the efforts to locate the missing witness were sufficient to establish the "good-faith" requirement of the Act. In my view, Jackson does not dictate the result *477 which Mr. Justice MANDERINO would reach in the instant case. In Jackson, the trial court admitted the prior testimony into evidence, and this Court merely held that the lower court's ruling, under the facts there presented, did not constitute an abuse of discretion. Jackson, supra, 463 Pa. at 306, 344 A.2d at 844. Simply because in Jackson we held that the trial judge did not abuse his discretion in allowing the prior testimony does not mean that in another case, involving facts which may indicate an equally diligent effort to locate a witness, the trial judge automatically abuses his discretion by refusing to allow the prior testimony to be admitted. Whether or not there is an abuse of discretion is an issue which must be determined on the basis of the facts and circumstances of each case.
Even if, however, our decision in Jackson be deemed to represent a minimum threshold of effort required to establish the present unavailability of a prior witness, I am not convinced that the efforts exerted in the case at bar to locate Anderson were, as the opinion in support of reversal puts it, post at 794, "obviously more extensive" than those in Jackson. In Jackson, the Commonwealth's proof of unavailability consisted of subpoenaing the missing witness without response, a single phone call to him and a statement from the witness' grandmother that the witness was a frequent runaway. In upholding the trial judge's determination that this evidence was sufficient, we noted that "[t]he trial court could reasonably conclude that any search would be futile." Jackson, supra at 306 n. 2, 344 A.2d at 844 n. 2. In the present case, in contrast, the only facts which appear are that defense counsel subpoenaed a witness who failed to appear on the day he was scheduled to testify. Defense counsel requested a continuance which was denied,[1] but at the same time the trial judge offered to *478 have a bench warrant issued for the witness. This invitation was declined by defense counsel,[2] whereupon the court ruled that the witness could be put on the stand "at any time before the speeches to the jury." Since rebuttal witnesses remained to be called, the defense, as it turned out, in effect was given four days within which to secure the attendance of the witness. During this time period defense counsel twice attempted to make contact with Anderson by telephone. Both times he was told that the witness was out of town and his whereabouts unknown. At no time during these four days, however, did counsel inform or attempt to inform the court that he was having difficulty in locating the witness. Under these circumstances I am simply unable to conclude that the trial court abused its discretion when it ruled that Anderson was not "unavailable" and, therefore, refused to allow his prior testimony to be introduced into evidence.
If it be assumed, arguendo, that the opinion in support of reversal is correct in declaring that the trial court *479 erred in the disputed ruling, I am satisfied that the error was harmless beyond a reasonable doubt.
In this case, the evidence of appellant's guilt was strong. In addition to substantial circumstantial evidence, the victim, Mr. Goldsleger, unequivocally identified appellant as one of his assailants at the preliminary hearing and at both trials. As the Commonwealth points out, "[t]he opportunity for identification was ample. The store was well lighted; the robbers were in the store before they announced the holdup 10 minutes, possibly longer . . .; Goldsleger first spoke with them in front of the meat case, face to face." Appellee's Brief at 4. In addition, Goldsleger testified that it was Leo Walloe who pistol-whipped him, thereby giving the witness further opportunity to identify Walloe as his assailant.
At the second trial, Mr. Goldsleger was questioned by defense counsel concerning Anderson's visit to Goldsleger's store and his attempted impersonation of appellant. Goldsleger's responses to these questions clearly show that he was not misled by Anderson's ruse. Furthermore, Anderson's testimony at the first trial relative to this encounter with Goldsleger was of minimal substance and importance; Anderson never testified that Mr. Goldsleger addressed him as Leo Walloe. Finally, the questioning of Goldsleger itself indicates that the substance of Anderson's testimony at the earlier trial was put before the jury.
For all of the foregoing reasons, I would affirm the judgment of sentence.
EAGEN, C.J., and O'BRIEN, J., join in this opinion in support of affirmance.
OPINION IN SUPPORT OF REVERSAL
MANDERINO, Justice.
On December 9, 1970, appellant, Leo Walloe, was arrested and charged with carrying a concealed deadly *480 weapon, unlawfully carrying a firearm without a license, aggravated assault and battery, and aggravated robbery. Motions to suppress certain physical evidence were denied, and appellant was brought to trial before a jury. At the close of the prosecution's case, the trial judge sustained appellant's demurrer to the weapons charge. The trial ended in a mistrial because of the jury's inability to reach a verdict.
Represented by new court-appointed counsel, appellant's retrial began on April 13, 1973. Appellant was found guilty by a jury on all charges (except that which had been dismissed in appellant's first trial). Post-verdict motions were denied, and appellant was sentenced to imprisonment on the aggravated robbery charge for ten to twenty years, sentence to run consecutively with another sentence appellant was then serving for an unrelated offense. On appeal, the Superior Court affirmed the judgment of sentence in a per curiam, opinionless order. Commonwealth v. Walloe, 229 Pa.Super. 747, 322 A.2d 375 (1974). On March 3, 1975, we granted appellant's petition for allowance of appeal limited to two questions: (1) whether the trial court properly ruled on appellant's motion for continuance until a certain witness could be located, or alternatively, (2) whether the trial court properly denied appellant's request to introduce into evidence the notes of testimony of this witness, who had testified at appellant's first trial, and who, it was alleged, was unavailable at the second trial.
The facts relevant to these questions are as follows. At appellant's first trial, one Charles Anderson testified to the effect that the complainant the victim of the robbery had, subsequent to appellant's arrest, mistaken him, Charles Anderson, for appellant. Anderson was asked:
"Q. What happened when you went into [complainant's] store?
*481 A. When I walked into the store [complainant] and one man and a lady was in the store. I told [complainant] that I was accused of robbing [complainant's] store and my name is Leo Walloe and I want to make restitution to pay the money back.
Q. What was [complainant's] reaction?
A. He asked me are you one of the kids that robbed my store and I said yes, so he told me that I had . . . he told me that I had to talk to his lawyer in court.
Q. Did [complainant] carry on any other conversation with you?
A. Yes, he asked me where was my brother.
Q. Meaning where was Bernard Walloe (a co-defendant)?
A. Yes.
Q. Did he say anything else to you?
A. No, after he told me he would see me in court with his lawyer, I left."
At both trials, the complainant referred to in the above testimony identified appellant as one of the perpetrators of the robbery of his store on December 9, 1970, the incident resulting in the instant charges against appellant.
At appellant's second trial, it was learned that Charles Anderson had not appeared to testify, even though he had been subpoenaed to do so by appellant's trial counsel. This revelation came from defense counsel on Thursday, April 19, 1973, eight days after jury selection had commenced, and six days after commencement of the taking of testimony. At that time defense counsel stated to the trial judge that Charles Anderson was not present; that he had been subpoenaed; that defense counsel had been informed that the witness had been present earlier, "out in the hall waiting to testify"; that the witness had left a message at counsel's office that he was "rushing his daughter to the hospital"; and that counsel was now unable *482 to reach the witness. Defense counsel requested a continuance. After further discussion, the trial court indicated that, if requested, an attachment would be issued for the missing witness. Defense counsel declined this suggestion. The trial court then stated that, since rebuttal witnesses were still to be called, the witness could be put on the stand at "any time before the speeches to the jury."
Four days later, Monday, April 23, 1973, counsel were ready to deliver their summations to the jury; however, the witness had still not been produced. Defense counsel stated to the trial court that he was informed that "Mr. Anderson is out of town," and that his previous statement to the court that the witness had to take his sick daughter to the hospital was not true, defense counsel having been misinformed by someone at Anderson's residence. Defense counsel then requested that he be permitted to read into the record the testimony given by Anderson at appellant's first trial. This motion was refused.
I agree with appellant that a new trial is required because of the refusal of the trial judge to allow defense counsel to introduce the testimony given by the missing witness at appellant's first trial. The substance of this testimony has already been stated.
The Act of May 23, 1887, P.L. 158, § 3, (19 P.S. § 582) states:
"Whenever any person has been examined as a witness, either for the commonwealth or for the defense, in any criminal proceeding conducted in or before a court of record, and the defendant has been present and has had an opportunity to examine or cross-examine, if such witness afterwards die, or be out of the jurisdiction so that he cannot be effectively served with a subpoena, or if he cannot be found, or if he become incompetent to testify for any legally sufficient reason *483 properly proven, notes of his examination shall be competent evidence upon a subsequent trial of the same criminal issue; . . . ." (Emphasis added.)
Before a witness ". . . cannot be found" within the meaning of the Act, however, the party attempting to introduce the prior testimony must demonstrate that ". . . a good-faith effort to locate the witness and compel his attendance at trial has failed." Commonwealth v. Jackson, 463 Pa. 301, 305, 344 A.2d 842, 844 (1975); see also Commonwealth v. Blair, 460 Pa. 31, 331 A.2d 213 (1975). In Jackson, a majority of this Court concluded that the prosecution had made such a good faith effort. That conclusion was based upon the following factual situation.
"Here, the absent witness was living at St. Michael's School for Boys near Scranton, Pa. When notified by the District Attorney's office that he would be called as a witness, his grandmother contacted the school authorities who released the boy into her custody. He arrived at her home in Philadelphia the evening before trial. As the grandmother was preparing to leave for court the next morning, the child disappeared. When the grandmother could not find him, she came to court alone and informed the District Attorney of the boy's disappearance. A subsequent phone check to the grandmother's home went unanswered. To establish unavailability, the Commonwealth called the grandmother who, in addition to the facts outlined above, testified that the child had a history as a runaway."
The prosecution's efforts to locate the missing witness in Jackson were ruled adequate by the majority because the prosecution showed that it ". . . had initiated the witness' transfer from Scranton to Philadelphia [and had] presented evidence that the child mysteriously disappeared shortly before trial and that he had run away `many times.'" Id., 463 Pa. at 305, 344 A.2d at 844.
*484 Defense counsel in the instant case had subpoenaed the missing witness, the witness had appeared at trial on Monday, April 16, 1973, and was ready to testify. The prosecution argues that appellant has no right to object at this stage because at the time the witness was first discovered missing, defense counsel declined the court's suggestion that a bench warrant issue. At that point, however, defense counsel had no reason to disbelieve the explanation that had been given to him concerning the missing witness' whereabouts. Counsel stated to the court that a telephone call to the witness' home had revealed that the witness was taking his sick daughter to the hospital. That version of the witness' activities came on Thursday, April 19, 1973. Defense counsel could reasonably have believed that a warrant was unnecessary to produce the witness and could reasonably have declined to have it issue in order to avoid unnecessarily antagonizing his own witness. On Monday, April 23, 1973, counsel informed the court that the witness still remained absent, and that counsel's efforts to locate him over the weekend had revealed that the earlier version of his whereabouts had been fabricated by someone at the witness' home.
The efforts made to locate the missing witness in the instant case were thus obviously more extensive than those held sufficient to satisfy the "good-faith" requirements of the Act in Jackson, supra. There the prosecution's proof of unavailability rested solely on one phone call and the statement of the witness' grandmother that the witness was a frequent runaway. Furthermore, in the instant case, unlike Jackson, there are no countervailing Sixth Amendment considerations which might operate against the use, at a second trial, of testimony taken at a prior hearing. The prior testimony, therefore, should have been admitted.
Lastly, the prosecution argues that even if it were error to deny the defense request to introduce the prior *485 testimony of the missing witness, such error was harmless. I cannot conclude that the omission of the evidence was error beyond a reasonable doubt. The complainant in this case was the only eyewitness to the crime for which appellant was accused. That testimony placed appellant at the store at the time of the robbery. The testimony of the missing witness tended to weaken the complainant's contention that he recognized appellant as one of the perpetrators of the crime charged. The jury was entitled to have this evidence of the complainant's alleged misidentification before it when called upon to decide whether or not the complainant's identification of appellant was accurate.
Judgment of sentence should be reversed and a new trial granted.
ROBERTS and NIX, JJ., join in this opinion in support of reversal.
NOTES
[1] As an alternative ground in support of his request for a new trial, appellant contends that the trial court abused its discretion in refusing this motion for a continuance. As will be observed in the text, however, despite the trial court's formal denial of the motion, appellant in fact received a four day continuance. Thus if any error was committed in this regard, it was clearly harmless.
[2] Mr. Justice MANDERINO in the opinion supporting reversal argues that defense counsel's action in declining to have the warrant issued at this time was justified since he "could reasonably have believed that a warrant was unnecessary to produce the witness and could reasonably have declined to have it issue in order to avoid unnecessarily antagonizing his own witness." (Opinion in Support of Reversal, post at 793). With respect, I consider this analysis specious. First, it is highly questionable whether any antagonism engendered by issuing a warrant would have been significant. Anderson was not a voluntary witness but had to be subpoenaed. Second, even if Anderson might have been antagonized by the warrant, it does not follow that he would have refused to testify or that his testimony would have been any less effective and forthright. While counsel may have felt that he could secure Anderson's presence without the aid of the court, such a decision, in my view, must be considered a calculated gamble which failed; counsel should not later be heard to complain of judicial error when the result complained of was due in large measure to his own unsuccessful tactics. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510891/ | 64 F.2d 521 (1933)
UNITED STATES CASUALTY CO.
v.
TAYLOR et ux.
TAYLOR et ux.
v.
UNITED STATES CASUALTY CO. et al.
Nos. 3410, 3411.
Circuit Court of Appeals, Fourth Circuit.
April 4, 1933.
*522 Frederick H. Horlbeck, of Charleston, S. C. (Julian Mitchell, Jr., of Charleston, S. C., on the brief), for United States Casualty Co.
John I. Cosgrove, of Charleston, S. C. (Paul M. Macmillan, of Charleston, S. C., on the brief), for John and Olive Taylor.
Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.
SOPER, Circuit Judge.
No. 3410.
The question in this case is whether the Longshoremen's and Harbor Workers' Compensation Act of March 4, 1927, c. 509, 44 Stat. 1424, 33 USCA §§ 901 to 950, covers the case of a workman who has been injured while engaged in the construction of a new ship that has been launched and nearly but not quite completed. On February 27, 1930, Robert A. Taylor, an employee of the Charleston Dry Dock & Machine Company at Charleston, S. C., was engaged in drilling holes for the placing of lights on the mast of U. S. lightship No. 115, a vessel which the company was building. She had been launched and was then afloat at a dock in the Cooper river, and was 96 or 97 per cent. complete. While doing the work, Taylor fell to the deck and received injuries from which he died on the same day. His parents filed a claim for compensation under the act in the office of the appropriate deputy commissioner, which was contested by the employer and by United States Casualty Company, its insurance carrier, on the ground that the injury and death of the employee occurred under circumstances not covered by the act, and that therefore the United States Employers' Compensation Commission lacked jurisdiction in the premises.
The deputy commissioner found the facts outlined above, and rejected the claim on the ground that the construction of a new vessel does not involve a maritime contract. The claimants then brought a bill of complaint against the deputy commissioner under the provisions of section 921 of USCA title 33 to secure an injunction restraining him from enforcing the order of rejection and to cause it to be set aside. The case was considered on the record made before the deputy commissioner; and the District Judge, observing that the question was new and not free from difficulty, held that the deceased was engaged in maritime employment at the time of his death, and that his injury and death fell within the purview of the act. He therefore decreed that the order of the deputy commissioner be reversed, and that he proceed to award compensation to the claimants in the manner provided by the statute. Subsequently, the insurance company was granted leave to intervene, and brought the case to this court on appeal.
The gist of the argument presented to sustain the decision of the District Court is that the place of the accident is the test of the jurisdiction of the Commission over claims for compensation for personal injury, just as the jurisdiction of the federal courts over maritime torts, as distinguished from their jurisdiction over matters of contract depends upon the locality of the wrong, State Industrial Commission v. Nordenholt Corp., 259 U.S. 263, 42 S. Ct. 473, 66 L. Ed. 933, 25 A. L. R. 1013; and that in each instance the power of Congress to deal with the matter rests upon the same basis. In Crowell v. Benson, 285 U.S. 22, 39, 55, 52 S. Ct. 285, 287, 76 L. Ed. 598, it was said: "As the act relates solely to injuries occurring upon the navigable waters of the United States, it deals with the maritime law, applicable to matters that fall within the admiralty and maritime jurisdiction (Const. art. 3, § 2; Nogueira v. N. Y., N. H. & H. R. Co., 281 U.S. 128, 138, 50 S. Ct. 303, 74 L. Ed. 754), and the general authority of the Congress to alter or revise the maritime law which shall *523 prevail throughout the country is beyond dispute. * * * In amending and revising the maritime law, the Congress cannot reach beyond the constitutional limits which are inherent in the admiralty and maritime jurisdiction. Unless the injuries to which the act relates occur upon the navigable waters of the United States, they fall outside that jurisdiction. Not only is navigability itself a question of fact, as waters that are navigable in fact are navigable in law, but, where navigability is not in dispute, the locality of the injury, that is, whether it has occurred upon the navigable waters of the United States, determines the existence of the congressional power to create the liability prescribed by the statute."
State Legislatures first provided compensation for industrial injuries, irrespective of fault or negligence, and the attempt was made to apply the state laws to workmen engaged in maritime employment upon navigable waters; but it was held that the acts when so applied were in conflict with the provisions of article 3, § 2, and article 1, § 8, of the Federal Constitution, whereby Congress was given paramount power to fix and determine the maritime law which shall prevail throughout the country. Southern Pacific Company v. Jensen, 244 U.S. 205, 37 S. Ct. 524, 61 L. Ed. 1086, L. R. A. 1918C, 451, Ann. Cas. 1917E, 900. Thereupon Congress took notice of the gap in the application of compensation laws to industrial workers in this country and successively passed two acts by which it undertook to permit the application of state workmen's compensation laws to injuries received by employees engaged upon maritime work within the admiralty and maritime jurisdiction. See the Act of October 6, 1917, c. 97, 40 Stat. 395, and the Act of June 10, 1922, c. 216, 42 Stat. 634 (28 USCA §§ 41(3), 371). Both of these acts, however, were held to be unconstitutional as a delegation of the legislative power of Congress and as defeating the purpose of the Constitution respecting the harmony and uniformity of the maritime law. Knickerbocker Ice Co. v. Stewart, 253 U.S. 149, 40 S. Ct. 438, 64 L. Ed. 834, 11 A. L. R. 1145; Washington v. W. C. Dawson & Co., 264 U.S. 219, 44 S. Ct. 302, 68 L. Ed. 646. To meet this situation, the present act of 1927 was passed, whereby Congress enacted a statute defining the persons to be affected and the injuries to be covered, and providing machinery whereby the claims of injured parties could be examined and enforced. The obvious purpose of this act was to accomplish within its sphere the same general purpose as the workmen's compensation laws of the states. Crowell v. Benson, 285 U.S. 22, 40, 52 S. Ct. 285, 76 L. Ed. 598.
Emphasizing these considerations, the appellee contends that it was the intent of Congress to exercise its power to the full extent, and that, if an injury has occurred on navigable water, and the other limitations of the act are observed, it is immaterial that the employee was not engaged in maritime employment or in the execution of a maritime contract in the literal sense of these terms. We are not concerned with the power of Congress to include within the scheme of a federal compensation law the kind of employment involved in this case, unless it appears that it was the intention of Congress to cover it within the terms of the act. Congress obviously did not intend to cover all possible maritime employees, for by section 903 it expressly provided that no compensation should be payable in respect of the disability or death of a master or member of a crew of any vessel, or any person engaged in loading, unloading, or repairing a small vessel under eighteen tons net. There are other limitations in the act. Section 902(4) defines the term "employer" as an employer any of whose employees are employed in maritime employment, in whole or in part, upon the navigable waters of the United States. The term "employee" is not otherwise defined, but the act is obviously restricted to persons engaged in maritime employment. So it was said by the Chief Justice in Nogueira v. N. Y., N. H. & H. R. Co., 281 U.S. 128, 131, 50 S. Ct. 303, 74 L. Ed. 754: "The general scheme of the Longshoremen's and Harbor Workers' Compensation Act was to provide compensation to employees engaged in maritime employment, except as stated, for disability or death resulting from injury occurring upon the navigable waters of the United States where recovery through workmen's compensation proceedings might not validly be provided by state law"; and again, in Crowell v. Benson, 285 U.S. 22, 37, 38, 52 S. Ct. 285, 287, 76 L. Ed. 598: "The act has two limitations that are fundamental. It deals exclusively with compensation in respect of disability or death resulting `from an injury occurring upon the navigable waters of the United States' if recovery `through workmen's compensation proceedings may not validly be provided by State law,' and it applies only when the relation of master and servant exists."
Section 903(a) of the act provides: "Compensation shall be payable under this *524 chapter in respect of disability or death of an employee, but only if the disability or death results from an injury occurring upon the navigable waters of the United States (including any dry dock) and if recovery for the disability or death through workmen's compensation proceedings may not validly be provided by State law." We are particularly concerned here with so much of this limitation as restricts recovery to those instances where recovery through workmen's compensation proceedings may not validly be provided by state law. The significance of this phrase was brought out in Crowell v. Benson, 285 U.S. 39, 52 S. Ct. 285, 287, 76 L. Ed. 598, where it was said: "In limiting the application of the act to cases where recovery `through workmen's compensation proceedings may not validly be provided by State law,' the Congress evidently had in view the decisions of this Court with respect to the scope of the exclusive authority of the national Legislature. The propriety of providing by federal statute for compensation of employees in such cases had been expressly recognized by this Court, and within its sphere the statute was designed to accomplish the same general purpose as the Workmen's Compensation Laws of the States." The cases referred to as bearing out this interpretation of the language were Southern Pacific Co. v. Jensen, Knickerbocker Ice Co. v. Stewart and Washington v. Dawson, supra, in which the authorized scope of state compensation statutes was discussed, and it was shown that, in so far as they attempted to deal with cases within the maritime and admiralty jurisdiction, they were unconstitutional.
We conclude from these pronouncements of the Supreme Court that the federal act is applicable only to workmen engaged in maritime employment, and that compensation under the act may lawfully be paid only in those cases in which a state has no authority to act. The phrase "may not validly be provided by State law" obviously refers to the authority of a state to act and not to the inquiry as to whether a state has exercised its power. Congress intended to occupy only a portion of the field (the crews of ships being excepted) from which the states are excluded, and to abstain altogether from duplicating the work of the states in the field which they are permitted to enter. Concurrent remedies in both state or federal proceedings are not available. It was the original policy of Congress to leave to the states, as far as possible, to provide compensation to workers for industrial accidents, and this policy has been continued in the present statute. It is noteworthy that by this course of action the requirement of uniformity in matters of admiralty and maritime jurisdiction is observed. Southern Pacific Company v. Jensen, 244 U.S. 205, 215, 216, 37 S. Ct. 524, 61 L. Ed. 1086, L. R. A. 1918C, 451, Ann. Cas. 1917E, 900.
We come then to the nature of the injured man's employment in this case, and to determine whether it lay within the scope of permissible state compensation legislation. He was engaged upon navigable waters in the completion of a new ship launched but not quite finished or placed in navigation as an instrumentality of commerce. Such work is not maritime in the accepted meaning of that term. In Grant Smith-Porter Co. v. Rohde, 257 U.S. 469, 42 S. Ct. 157, 66 L. Ed. 321, 25 A. L. R. 1008, it was held that a carpenter at work upon the construction of a vessel lying at a dock in the Willamette river, substantially completed but not ready for delivery, was not engaged in an activity which had any direct relation to navigation or commerce. He claimed that he was injured through the negligence of his employer in the construction and maintenance of a scaffolding, and brought suit in admiralty for tort. The locality of the injury would ordinarily have warranted such a suit, but the Oregon State Compensation Law was applicable to the situation, and it provided that the right of a workman to receive compensation under the statute for injuries should be in lieu of all other claims against the employer therefor. It was held that the parties had contracted with reference to this statute, and that the action in admiralty could not be maintained. This conclusion was declared to be in harmony with such cases as Southern Pacific Co. v. Jensen, 244 U.S. 205, 37 S. Ct. 524, 61 L. Ed. 1086, L. R. A. 1918C, 451, Ann. Cas. 1917E, 900; Chelentis v. Luckenbach S. S. Co., 247 U.S. 372, 38 S. Ct. 501, 62 L. Ed. 1171; Union Fish Co. v. Erickson, 248 U.S. 308, 39 S. Ct. 112, 63 L. Ed. 261; Knickerbocker Ice Co. v. Stewart, 253 U.S. 149, 40 S. Ct. 438, 64 L. Ed. 834, 11 A. L. R. 1145, for in each of them the employment or contract was maritime, and hence the provisions of the state compensation law could not be applied. More recently, it was held in Baizley v. Span, 281 U.S. 222, 50 S. Ct. 306, 74 L. Ed. 819, that the provision of the Workmen's Compensation Act of Pennsylvania (77 PS § 1 et seq.) could not be applied to the case of a workman engaged in making repairs to a completed vessel afloat in the Delaware river because *525 the work had a direct relation to navigation and commerce, and a claim for injuries suffered in the course of such employment is controlled exclusively by the maritime law. These cases make it clear that a state has the power to provide compensation for injuries suffered by a workman employed in the construction of a vessel afloat upon navigable waters.
It follows that the deputy commissioner was barred from awarding compensation in this case by the limitation imposed by section 903(a) of the act. This conclusion is in harmony with the provisions of section 902(4), which defines an employer under the act as one whose employees are employed in maritime employment; for workmen so engaged may not be provided with compensation by state law. We think it is clear that Congress used the words "maritime employment" in the same sense as they were used by the Supreme Court in the cited cases pertaining to state compensation laws, for these decisions were in the mind of Congress when it passed the act of 1927 in order to provide for compensation to maritime workers that the states could not supply.
South Carolina, unlike most of the states, has not seen fit to pass a workmen's compensation act. But this circumstance is not material in the pending case, for our decision depends upon the existence, and not upon the exercise, of the power of the state to give to its people the benefits of such legislation.
No. 3411.
This case, although docketed as a separate suit, is in effect a cross-appeal by the complainants and successful parties below in the foregoing suit from so much of the decree of the court as permitted intervention by the insurance carrier. After the District Court had rendered its original decree, United States Casualty Company, the insurance carrier for the employer, filed a petition in the case praying that the decree be set aside, and that it be allowed to intervene as party defendant so that it might prosecute an appeal to this court. It had been a party to the proceedings before the deputy commissioner, and its counsel had assisted the United States attorney in defending the suit in the District Court, but it had not been a formal party thereto. The United States attorney, on behalf of the deputy commissioner, filed an answer to the intervening petition to the effect that he did not desire to prosecute an appeal, but did not object to intervention by the carrier for that purpose. The complainants demurred to the petition on the ground that the court was without power under the act to allow the intervention. The District Court vacated the decree and granted the petition, making the casualty company a party defendant in the case upon condition that it adopt the answer of the deputy commissioner and be bound by the testimony that had been taken. Thereafter a formal decree was entered, whereby the prior decree was confirmed against the deputy commissioner and the casualty company. The casualty company appealed from the reversal of the decision of the deputy commissioner, as we have seen, and the complainants in the District Court appealed from its order permitting the carrier to intervene.
The complainants contend that the District Court was without power to allow an intervention after the rendition of its final decree, and that the casualty company had no such interest in the litigation as entitled it to intervene. The carrier's interest is said not to be direct and immediate, but secondary and consequential, the primary liability resting upon the employer. References are made to the several sections of the act which provide, without mentioning the carrier, that notice of injury or death must be given to the employer, section 912(a); that liability to pay compensation may be controverted by the employer, section 914(a), and that the claimant and employer may each present evidence at the hearing, section 919(d). There are, however, other sections of the act which show conclusively that the sections quoted, while mentioning only the rights and liabilities of the employer, have a direct bearing upon the rights and obligations of the insurance carrier, and clearly contemplate the right of the carrier to be heard in opposition to any claim. Undoubtedly the carrier is an interested party within the meaning of section 919(b), which provides that, within ten days after a claim for compensation has been filed, the deputy commissioner shall give notice thereof to the employer and any other person whom he considers an interested party; and within the meaning of section 919 (c), which directs the deputy commissioner to order a hearing upon the application of any interested party upon ten days' notice to all interested parties; and within the meaning of section 921(b), which authorizes any party in interest to bring injunction proceedings to suspend or set aside a compensation order which is not in accordance with law. Section 919(h) requires the injured employee to submit to a physical examination by a duly qualified physician designated *526 by the commission, and such physicians as the employer, employee, or carrier may select and pay for may participate in the examination. Under the similar provisions of the New York Compensation Act (Consol. Laws N. Y. c. 67), upon which the federal act was modelled [see Wheeling Corrugating Company v. McManigal (C. C. A.) 41 F. (2d) 593], it has been held that the insurance carrier is a party in interest [Jaabeck v. Theodore A. Crane's Sons Co., 238 N.Y. 314, 144 N.E. 625].
An important part of the whole scheme of administration under the act is that contained in section 932, which requires the employer to secure payment of compensation in divers ways, including insurance with any stock company or mutual company or association authorized by law to insure workmen's compensation. Section 935 makes sweeping provisions for the substitution of the carrier for the employer in order that the liability for compensation may be most efficiently discharged and the administration of the law may be facilitated. The Commission is directed to provide by regulation for the discharge by the carrier for the employer, of such obligations imposed by the act as the Commission considers proper in order to carry the law into effect. The section provides that "for such purposes (1) notice to or knowledge of an employer of the occurrence of the injury shall be notice to or knowledge of the carrier, (2) jurisdiction of the employer by a deputy commissioner, the commission, or any court under this chapter shall be jurisdiction of the carrier, and (3) any requirement by a deputy commissioner, the commission, or any court under any compensation order, finding, or decision shall be binding upon the carrier in the same manner and to the same extent as upon the employer."
These provisions of the statute show that the insurance carrier of an employer has such an interest in the claim of an injured employee as to justify the carrier's intervention in a suit to review the compensation order of the deputy commissioner. Equity Rule 37 (28 USCA § 723) provides that any one claiming an interest in the litigation may at any time be permitted to assert his right by intervention; and it is well established that, if the party applying for intervention has a direct legal interest in the pending litigation, so that he will obtain immediate gain or suffer loss from any judgment that may be rendered between the original parties, the court is authorized, in its discretion, to allow the intervention to take place; and in some instances intervention is a matter of right. Smith v. Gale, 144 U.S. 509, 518, 12 S. Ct. 674, 36 L. Ed. 521; Radford Iron Co. v. Appalachian Electric & Power Co. (C. C. A.) 62 F.(2d) 940. The propriety of the exercise of the discretion by the court in the carrier's favor in such a case as the present is unassailable, if there is no statute forbidding it, since there was no one else who was damaged by the reversal of the deputy commissioner's decision. The employer was protected by his policy of insurance, and the deputy commissioner had only the interest of an impartial tribunal.
The claimants, however, contend that the carrier may not properly be made a party defendant in the suit in equity because section 921(b) of USCA, title 33, directs that the suit be brought against the deputy commissioner, while section 921a, 33 USCA, imposes the duty upon the United States attorney to appear for him in the District Court and in any court to which the case may be carried on appeal. If this interpretation is correct, the result would be that only the losing party before the deputy commissioner, whether it be the injured workman on the one hand, or the employer or the insurance carrier on the other, would have the right to be heard in the injunction suit in either the District Court or in the Circuit Court of Appeals, and the successful party before the deputy commissioner would have no right to defend the advantage which he had won. This conclusion is too unreasonable to be entertained.
The injured employee, the employer, and the carrier are all clothed with a sufficient interest in the result of such a suit as to be granted permission to intervene as a matter of course, under the established practice prevailing in equity; and it cannot be supposed that it was the intent of Congress to forbid this just procedure merely because it failed expressly to authorize the joining of the successful party before the deputy commissioner as a defendant in the subsequent suit. On the contrary, the court should be all the more ready to exercise its discretion so that the act may be enforced according to its spirit, and a speedy decision of controverted cases may be accomplished. Indeed, it would seem to be good practice for the plaintiff in the equity suit to notify all adverse interested parties of the institution of the case so that any one who desires may apply for leave to intervene; and the deputy commissioner should perhaps be required to do so by regulation promulgated by the Commission under the authority of section 939 of USCA, *527 title 33. An interested person who is not a party to the suit may well dispute the authority of the District Court to bind him by its decree, and, if it be held that the decree of the District Court is not binding upon him, then, if the action of the deputy commissioner is reversed and a new award is made in accordance with the decree of the District Court, a second suit could be brought therein to review the final action of the deputy commissioner.
The petition for intervention in this case was not too late. Counsel for the carrier had been permitted to take part in the case to support the finding of the deputy commissioner, and the petition of intervention was promptly filed after the adverse decree. Equity Rule 37 (28 USCA § 723), above quoted, declares that intervention may be permitted at any time, and the decisions show that it may be allowed after a final decree when it is necessary to do so to preserve some right which cannot otherwise be protected. United States v. Northern Securities Co. (C. C.) 128 F. 808, 810; Cincinnati, I. & W. R. Co. v. Indianapolis Union Ry. Co. (C. C. A.) 279 F. 356, 363.
The right of the carrier to intervention in such a case as the one now before the court does not seem to have been denied heretofore, for the cases show that in practice permission to intervene has been freely granted. New Amsterdam Casualty Co. v. Hoage, 60 Ohio App. D. C. 40, 46 F.(2d) 837; Georgia Casualty Co. v. Hoage, 61 Ohio App. D. C. 195, 59 F.(2d) 870; Howard v. Monahan (D. C.) 31 F. (2d) 480, 481.
The order of intervention was well founded, but the decree on the merits of the case must be reversed.
Case No. 3410, reversed.
Case No. 3411, affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510972/ | 64 F.2d 593 (1933)
GARDEN HOMES CO.
v.
COMMISSIONER OF INTERNAL REVENUE.
No. 4868.
Circuit Court of Appeals, Seventh Circuit.
March 30, 1933.
*594 *595 *596 G. A. Youngquist, Asst. Atty. Gen., Sewall Key and Paul D. Miller, Sp. Assts. to Atty. Gen., and William H. Riley, Jr., and Walter Gellhorn, Department of Justice, both of Washington, D. C., for respondent.
Maxwell H. Herriott and Malcolm K. Whyte, both of Milwaukee, Wis., for petitioner.
Before ALSCHULER, EVANS, and SPARKS, Circuit Judges.
SPARKS, Circuit Judge (after stating the facts as above).
It is contended by petitioner that it is exempt from Federal income taxation because it is (1) a domestic building and loan association; (2) a co-operative purchasing agent; (3) a municipal agency; or (4) a civic organization not operated for profit.
Under the laws of Wisconsin the organization of building and loan associations is authorized under chapter 215, Statutes 1931. This is an entirely different statute from the one under which petitioner is organized, and the two are in no way connected or related. The requirements and the scheme of regulation of the former statute are not present in the latter, and from a reading of both statutes it is quite obvious that the Wisconsin legislature did not intend that petitioner should be considered a building and loan association. In support of its contention in this respect petitioner relies upon United States v. Cambridge Loan & Building Co., 278 U.S. 55, 49 S. Ct. 39, 73 L. Ed. 180. That case originated in Ohio, and it is to be distinguished from the instant case in that the laws of Ohio recognized the Cambridge Loan and Building Company as a building and loan association. We think the Board's ruling was right in holding that petitioner was not a building and loan association.
Petitioner concedes that it did not purchase supplies and equipment in the strict sense, but claims that it was a co-operative purchasing agent under section 231 (11) of the Revenue Act of 1924 (26 USCA § 982 note), and section 231 (12) of the Act of 1926, 26 USCA § 982 (12). The exempted groups which fall within those sections are farmers, fruit growers, or like associations, which are organized and operated either as sales agents for the purpose of marketing the products of members and turning back to them the proceeds of the sales, less the necessary selling expenses, or else as purchasing agents for the purpose of purchasing supplies and equipment for the use of members at actual cost. In construing corresponding sections of the Revenue Acts of 1916 and 1918, the Treasury Department said (I. T. 1312; C. B. I-1 p. 263) "In framing the Statute, Congress appears to have had in mind agricultural, fruit growing, and similar occupations. Under the doctrine of ejusdem generis the term `like associations' should be confined to pursuits similar to farming and fruit growing." The subsequent re-enactment of that statutory provision requires that the administrative construction be considered as having been adopted by Congress. Brewster v. Gage, 280 U.S. 327, 50 S. Ct. 115, 74 L. Ed. 457; McCaughn v. Hershey Chocolate Co., 283 U.S. 488, 51 S. Ct. 510, 75 L. Ed. 1183. We are convinced that petitioner was not a co-operative purchasing agent within the meaning of the statute.
Petitioner's contention that it is exempt as a municipal agency is without merit. The exemption of state agencies and instrumentalities from national taxation is limited to those which are of a strictly governmental character, and does not extend to those which are used by the State in the carrying on of an ordinary private business. South Carolina v. United States, 199 U.S. 437, 26 S. Ct. 110, 59 L. Ed. 261, 4 Ann. Cas. 737; Flint v. Stone Tracy Co., 220 U.S. 107, 31 S. Ct. 342, 55 L. Ed. 389, Ann. Cas. 1912B, 1312. It is clear that petitioner performed no governmental functions.
In order to classify petitioner as a civic organization two facts must appear: (1) It must not have been organized for profit, and (2) it must be operated exclusively for the promotion of social welfare. Revenue Act of 1924, c. 234, § 231 (8), 43 Stat. 253, 282; Revenue Act of 1926, c. 27, § 231 (8), 44 Stat. 9, 39, 26 USCA § 982 (8); Article 519 of Treasury Regulations 65 under Revenue Act of 1924, and of Treasury Regulations 69 under Revenue Act of 1926.
We think it is quite obvious from the facts found that petitioner was not organized for profit. It is true that, so far as the statute and the articles of incorporation disclose, the organization might have been one for profit, but the history of the project and the manner in which it was conducted clearly indicate that no profit was contemplated. It is not controverted that the tenant stockholders were eventually to secure their homes at as nearly the cost price as was possible. The expense of conducting the business was of *597 course to be borne proportionately by the tenant stockholders, and this included taxes, repairs, depreciation, insurance, interest on borrowed money and a sufficient amount to pay the fixed return upon the preferred stock. All items of expense were deducted from the monthly dues of the tenant stockholders. Indeed there was no other source from which the expenses could be paid. After the payment of all expenses it was contemplated that the remaining portions of the monthly dues should be applied to the payment of the shares of common stock for which the tenant stockholders had subscribed. That this method was followed is proven by the passbook which was introduced in evidence, and it is admitted to be typical of all passbooks used. The expenses were estimated and it was provided by resolution that any overcharge would be refunded. The passbook discloses that dividends were declared upon the common stock and there is no evidence which indicates that petitioner retained or intends to retain as profits any amount in excess of the actual expense of the business, unless the amounts declared as dividends on both the preferred and common stock and the surplus derived from the monthly payments shall be so considered.
It is contended by respondent, however, that the books of petitioner do not reflect the distribution and application of balances upon the common stock as disclosed by the passbooks, but if that contention be true, we think it is not conclusive as against petitioner. The entries on the passbooks as well as those on petitioner's books of account were made by petitioner, and under the circumstances surrounding the unique project we think both should be considered in arriving at the intention of the parties. The passbooks disclose facts which are consistent in every respect with the original plan of operation without profit, and we think that petitioner's books of account are not necessarily inconsistent therewith. The articles of incorporation and the tenant stockholder's lease agreement in many respects are not clear, due no doubt to the novelty of the enterprise, but we think those uncertainties are not fatal to petitioner's contention. It does not appear from petitioner's books of account that tenant stockholders' monthly payments, after deducting the estimated expenses, were applied to the payment of common stock, but they were carried as an aggregated asset of the company, under the heading of rents received from common stockholders. The passbooks, however, disclose that said amounts were applied annually to the reduction of the several amounts owing on the respective shares, and the respective balance remaining due thereon was placed on each passbook. A perusal of the evidence and the findings convinces us that this was the method actually contemplated and followed and the fact that petitioner's books of account did not disclose such application ought not to militate against the plain intention of all parties concerned. Haugh & Keenan Storage & Transfer Co. v. Heiner (D. C.) 20 F.(2d) 921; Corn Exchange Bank v. United States (C. C. A.) 37 F.(2d) 34. Regardless of what petitioner's books disclosed it was bound to make the application as shown by the passbooks, for it was the intention and agreement so to do.
Respondent calls our attention to the facts that the lease agreement refers to tenant stockholder's monthly payments as rentals and designates no time when they shall cease, and he suggests that those facts lend support to his contention that petitioner was organized for profit. Rentals are quite generally fixed at a sum sufficient to provide a fair return upon the value of the property, over and above the expense of maintaining it. In the instant case, however, there was no return whatever to petitioner in excess of the expenses, except the amounts which it was bound to apply upon the common and preferred stock, and in this respect it was acting as a mere conduit, without remuneration except its expenses, in performing the promise it had made to the tenant stockholders. See Central Life Assurance Soc., Mut. v. Commissioner (C. C. A.) 51 F.(2d) 939. Regardless of the form by which petitioner characterized those monthly payments, a consideration of their substance convinces us that they were not rents, and especially is this true with respect to the portions of those payments which were placed as credits upon the common stock. See Weiss v. Stearn, 265 U.S. 242, 44 S. Ct. 490, 68 L. Ed. 1001, 33 A. L. R. 520; Eisner v. Macomber, 252 U.S. 189, 40 S. Ct. 189, 64 L. Ed. 521, 9 A. L. R. 1570; Industrial Cotton Mills Co. v. Commissioner (C. C. A.) 61 F.(2d) 291; Tulsa Tribune Co. v. Commissioner (C. C. A.) 58 F.(2d) 937.
Notwithstanding the uncertainties which exist in the articles of incorporation and the lease agreements, those instruments should be given a reasonable interpretation in arriving at the intention of the interested parties. It is true that there is no time designated when the monthly payments shall cease, but it is not reasonable to suppose that the parties intended that a tenant stockholder's payments should continue beyond the time when he had paid for his common stock in *598 compliance with the terms of the agreement. Any other construction would frustrate the very purpose for which petitioner was organized and that of the statute under which it was incorporated.
Respondent contends that petitioner's entity as a corporation must be preserved, and on that premise he insists that all funds received by it, less the amounts deducted for expenses, must be considered as profit to petitioner out of which the distributions to the stockholders were to be made, and hence is taxable as income to petitioner. We quite agree that ordinarily the entity of a corporation should be recognized and preserved, but if by so doing the plain and lawful intention of the parties will become frustrated and of no effect, we conceive it to be the court's duty to have regard for the substance of the transactions rather than to the form, and to grant such relief under the law and the facts as will preserve and give effect to the intentions of the parties. Conceding that the monthly payments constitute income to petitioner, yet, to the extent that they exceeded the expenses and the amount used for the redemption of the preferred stock and the payment of dividends thereon, those funds were, or should have been, applied to the payment of tenant stockholders' common stock. Hence they are to be considered as capital contributions and not as profit to petitioner within the meaning of the statute. A corporation can not receive profit from the sale of its common stock sold at par, or by reason of the receipt of capital contributions from its stockholders. Articles 66 and 67 of Regulations 74, Revenue Act of 1928.
It is further contended by respondent that the funds from which the dividends on the preferred stock were paid must in any event be considered as profit to petitioner. With that contention we are not in accord. In Jones Syndicate v. Commissioner, 23 F. (2d) 833, this court held that the holders of stock certificates to evidence their transactions with the company may be in fact creditors and not stockholders, and that each case presenting such question must be determined from its own facts. In that case preferred stock had been issued for the purpose of circumventing the usury statute of Illinois, and the court, looking to the substance of the transaction rather than to the form in which it was expressed, held that the dividends thereon were in fact interest and in violation of the statute. On a similar state of facts a like ruling was made by the Circuit Court of Appeals for the First Circuit in Wiggin Terminals, Inc., v. United States, 36 F.(2d) 893, 898. There the court said, "If it be shown that dividends paid are, according to the intent of the parties, in fact interest, and the stock on which the dividends are paid is merely held by the creditor as security, it makes no difference what the reason was for paying in that form. The courts look to the real character of the payment, and construe the statute liberally in favor of the taxpayer." In the instant case there was no attempt to circumvent any statute by issuing the preferred stock, but we see no reason why the presence of such an attempt should be required in order to give petitioner the benefit of the principle announced in those decisions. That principle seems to be based primarily upon the intention of the parties rather than upon any illegal method by which that intention was effected. The method employed in those cases was evidence of the intention.
The facts in the instant case disclose a laudable enterprise for furnishing at cost much needed homes for working men. Much more money was needed for that purpose than they were then able to furnish and it was quite apparent that the necessary amount could not be raised upon the individual credit of the working men. The desired result was accomplished by an issue of preferred stock which provided for annual five per cent. cumulative dividends. Public spirited men were informed of the plan and were solicited to purchase the preferred stock. The approach for subscriptions was made on the ground that the project was a public or civic enterprise. It was explained that the project was not a money making scheme but an attempt to bring employers and employees together on common grounds in order to eliminate profit and waste. Subscriptions thereto were not sought as a gift, nevertheless subscribers were told not to consider the same as an investment, and that the project was to be on a non-profit basis with the entire benefits accruing to the home owners in the form of reduced cost of their homes. It was under those circumstances that the money was readily secured and the stock was issued, and under those facts we are constrained to hold that the return on the preferred stock should be considered as interest rather than dividends. If the so-called dividends upon the preferred stock and the payments upon the common stock are to be considered as profits to the taxpayer, then the intention of the parties and the object of the organization will be defeated. We are convinced that under the facts here presented petitioner was not organized for profit and that none accrued to it.
*599 That petitioner was operated exclusively for social welfare we think there can be no doubt. It was contemplated that the same opportunity should be extended to all working men who might desire it and who could comply with the terms required. As a result of the plan one hundred and five homes were constructed for that number of families and at a minimum cost. That indeed was social service and it constituted the exclusive business of petitioner. We think that petitioner was a civic organization within the meaning of the statute, and even though it were conceded to be otherwise, we are of the opinion that it received no profit within the meaning of the statute.
The orders of the Board of Tax Appeals are reversed, and the cause remanded for further proceedings not inconsistent with this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511486/ | 119 N.H. 72 (1979)
RUDY LORTIE, ADMINISTRATOR OF ESTATE OF SCOTT GUY LORTIE
v.
ROBERT BOIS, INDIVIDUALLY AND d/b/a ROTO-ROOTER SEWER & DRAIN SERVICE
No. 78-163.
Supreme Court of New Hampshire.
February 14, 1979.
*73 Stark & Peltonen, of Manchester (Michael M. Ransmeier orally), for the plaintiff.
Wiggin & Nourie, of Manchester (William S. Orcutt orally), for the defendant.
BROCK, J.
The defendant appeals from denial of his motion for summary judgment in a wrongful death action. He moved for summary judgment pursuant to RSA 491:8-a (Supp. 1977) and submitted several affidavits in support thereof. The plaintiff objected and filed a counter-affidavit, sworn to by his attorney. The defendant then moved to strike the counter-affidavit on the ground that it was not based on *74 personal knowledge or admissible facts to which the affiant would be competent to testify. On May 12, 1977, the Trial Court (Flynn, J.) denied both the defendant's motion to strike and motion for summary judgment. The defendant excepted to both rulings and all questions of law were reserved and transferred.
The plaintiff's decedent, his 23-month-old son, drowned on May 17, 1973, after falling into a septic tank whose cover had been removed to allow access by Roto-Rooter Sewer and Drain Service. The writ alleges that the defendant, Robert Bois, visited the subject premises on May 17, 1973, to provide "labor and services with regard to the septic tank," and that he negligently left the septic tank uncovered. The defendant, in support of his motion for summary judgment, filed several affidavits to the effect that he was not an agent or employee of Roto-Rooter, did not assist in any way in the work performed, and was present solely as a social companion to his brother-in-law, Daniel H. McCauley, who actually did the work. The defendant contends that if he did not assist Mr. McCauley in servicing the septic system, he cannot be held liable for negligent performance of that work and is entitled to judgment as a matter of law. W. PROSSER, LAW OF TORTS §§ 56, 104 (4th ed. 1971).
[1] In objecting to the motion for summary judgment, the plaintiff submitted the affidavit of his attorney, which stated,
Based on the police investigation, depositions, and other pre-trial discovery, the plaintiff represents that the evidence will be that Robert Bois entered upon the premises of Jacqueline Moore and undertook to perform services, namely the repair of a septic system; that Robert Bois did excavate on the premises and negligently did leave the cover off of the septic tank, into which the plaintiff's decedent, an infant of two years of age, did fall and drown.
If the plaintiff's affidavit is sufficient under RSA 491:8-a (Supp. 1977) a genuine issue of material fact exists as to whether Robert Bois participated in the repair work on the day in question, and the trial court properly denied the defendant's motion for summary judgment. RSA 491:8-a (Supp. 1977).
[2-4] While the party opposing summary judgment may not rest upon mere denials, he may respond by an affidavit setting forth specific contradictory facts, and incorporating by reference existing products of discovery. RSA 491:8-a (Supp. 1977); Arsenault v. Willis, 117 N.H. 380 A.2d 264, 266 (1977). The plaintiff's affidavit here refers to *75 "depositions and other pre-trial discovery." While the affidavit could be more specific, it is clear on the record before us, and we presume was clear to the trial court, that the reference was to a deposition of the defendant taken in June 1975 in connection with this and several companion cases. In that deposition, Robert Bois stated under oath that he did perform work at the Moore residence on the day in question, including helping Mr. McCauley lift the cover off the septic tank. This statement of the defendant would be admissible upon trial as an admission of an adverse party. Angelowitz v. Nolet, 103 N.H. 347, 348, 172 A.2d 103, 104 (1961); Profile & Flume Hotels Co. v. Bickford, 72 N.H. 73, 54 A. 699 (1903). It was certainly appropriate for the trial court to consider the statement in determining whether a genuine issue of material fact existed.
[5-9] The defendant argues for a different result solely because the deposition referred to was not on file with the trial court at the time of the motion. See RSA 517:11. We disagree. The summary judgment statute does not expressly limit depositions that may be considered to those on file with the court. RSA 491:8-a (Supp. 1977); accord, FED. R. CIV. P. 56(c); 10 C. WRIGHT & A. MILLER, FEDERAL PRACTICE AND PROCEDURE, § 2722 (1973). The affiant, counsel for the plaintiff, had personal knowledge of the contents of the deposition, and thus was in a position to direct the trial court's attention to it. On a motion for summary judgment the trial court was entitled in its discretion to rely on the representations of counsel concerning the contents of the deposition and other products of discovery. Town of Gilmanton v. Champagne, 116 N.H. 507, 509, 363 A.2d 411, 412 (1976). If the defendant seriously questioned the existence, authenticity, or contents of the deposition, he was obligated to raise those objections at the hearing. See 10 C. WRIGHT & A. MILLER, FEDERAL PRACTICE AND PROCEDURE, § 2722 (1973). In the absence of a transcript of the hearing below, we presume that the proceedings supported the court's rulings. Adams v. Adams, 117 N.H. 43, 44, 369 A.2d 196, 197 (1977). Any error was harmless, as the defect could easily have been cured by either party filing a copy of Robert Bois' deposition with the court. Community Oil Co. v. Welch, 105 N.H. 320, 323, 199 A.2d 107, 110 (1964).
[10] While the trial court on a motion for summary judgment is not authorized to consider facts wholly outside the record, neither do we require that it close its eyes when presented with reliable evidence that a genuine issue of material fact exists. Coburn v. First Equity Associates, Inc., 116 N.H. 522, 524-25, 363 A.2d 402, 404 (1976). "If there is such an issue, it is not the purpose of the act to foreclose a trial upon *76 technical grounds." Chemical Insecticide Co. v. State, 108 N.H. 126, 129, 229 A.2d 167, 169-70 (1967).
Exceptions overruled.
All concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511655/ | 166 N.J. Super. 1 (1979)
398 A.2d 1297
ANNA M. BIDDLE, PLAINTIFF-APPELLANT,
v.
RALPH T. BIDDLE, DEFENDANT, AND PATRICIA L. BIDDLE, DEFENDANT-RESPONDENT.
Superior Court of New Jersey, Appellate Division.
Argued January 8, 1979.
Decided February 6, 1979.
*3 Before Judges CONFORD, PRESSLER and KING.
Mr. Robert F. Renaud argued the cause for appellant (Messrs. Palumbo and Renaud, attorneys).
Mr. Charles L. Morgan argued the cause for respondent (Messrs. Morgan & Falvo, attorneys).
The opinion of the court was delivered by KING, J.A.D.
Plaintiff brought this action against her son Ralph Biddle and her son's former wife Patricia Biddle to impose an equitable lien based on an alleged purchase money resulting trust upon Ralph and Patricia's former marital residence in Little Silver. Ralph defaulted. On the day of trial prior to the presentation of testimony Patricia *4 successfully moved to dismiss the complaint and plaintiff appeals.[1]
Plaintiff advanced money to her son Ralph and his then wife Patricia for use as payment on a lot and a home subsequently built thereon. Plaintiff claims that the advance was a loan and that she, Ralph and Patricia agreed that she was to have an equitable interest in the property and was to be paid a sum proportionate to her contribution (57%) if it was ever sold. Patricia contends the advance was an unconditional gift. Legal title was held by Ralph and Patricia as tenants by the entirety.
When Patricia and Ralph Biddle litigated their divorce action, plaintiff moved to intervene therein in order to assert her claim to an interest in the property. She apparently contended that her interest should be considered when the matrimonial judge determined the value of the property and the subject of equitable distribution. Her motion was denied and no appeal or motion for leave to appeal therefrom was taken. At the trial of the divorce action Ralph apparently argued that plaintiff's lien claim reduced the value of the premises subject to equitable distribution and increased the debts he and his wife owed. Plaintiff testified in the divorce action in support of her lien claim. The divorce judgment expressly awarded Patricia full title to the premises "free and clear of any alleged liens by Ralph T. Biddle and Anna M. Biddle against the title."
*5 The divorce judgment was never appealed. Four months after entry of that judgment plaintiff filed this action asserting her claim to a lien on the premises. The trial judge granted Patricia's motion to dismiss this action, concluding that the judgment in the divorce action barred relitigation of plaintiff's claim. We disagree and reverse.
Generally, adjudication of an issue or claim does not, by operation of res judicata or collateral estoppel, bar a person not a party or privy to a party to the prior action from seeking another adjudication of the issue or claim because every person is entitled to his day in court. Brunetti v. New Milford, 68 N.J. 576, 587 (1975); Bd. of Directors, Ajax, etc., v. First Nat'l Bank of Princeton, 33 N.J. 456, 463 (1960); Lehigh Zinc and Iron Co. v. N.J. Zinc and Iron Co., 55 N.J.L. 350, 357 (E. & A. 1893): Restatement, Judgments 2d (Tent. Draft No. 2, 1975), § 78(3) at 2; 46 Am. Jur.2d, Judgments, §§ 518-519 at 669-671. Here Ralph Biddle could not be plaintiff's privy by operation of law because his legal ownership interest in the land, a tenancy by the entirety, conflicted with plaintiff's claim. Bd. of Directors, Ajax, etc., supra 33 N.J. at 463. Plaintiff plainly was not a party to the divorce action. However, Patricia argued, and the trial judge found, that plaintiff's alleged participation in the divorce action and Ralph's assertion of her claim as part of his case established that plaintiff actually consented to adjudication of her claim therein, received her day in court, and was bound by the divorce judgment notwithstanding her non-joinder as a party to that action.
Defendant's contentions suggest several possible theories that might bar plaintiff from bringing this action. Plaintiff may have expressly or impliedly authorized her son to prosecute the claim in her behalf, making him her representative in fact and binding her to the adjudication. Restatement, Judgments 2d (Tent. Draft No. 2, 1975), § 85(1) (b) at 56, and comment (b) thereto at 59-60; 50 C.J.S. Judgments § 776(a) at 306; 46 Am. Jur.2d, Judgments, § 538 at 694-695; *6 see Lyon v. Stanford, 42 N.J. Eq. 411, 414-415 (E. & A. 1886). Plaintiff may have controlled or substantially participated in control of the presentation of her claim to the extent that she was a real party, not a nominal party, and therefore should be barred from relitigation. Petersen v. Preferred Accident Ins. Co., 114 N.J.L. 180, 183 (E. & A. 1935); Ludy v. Larsen, 78 N.J. Eq. 237, 242-243 (E. & A. 1911); Lyon v. Stanford, supra 42 N.J. at 414; Restatement, Judgments 2d (Tent. Draft No. 2, 1975), § 83 at 44; 46 Am. Jur.2d, Judgments, §§ 535-537 at 688-694; 50 C.J.S. Judgments §§ 782-783 at 317-320, §§ 785-786 at 321-322. Possibly plaintiff actually did submit her claim for adjudication notwithstanding the denial of her motion to intervene. Miller v. Headley, 109 N.J. Eq. 436, 433-444 (Ch. 1932), aff'd o.b. 112 N.J. Eq. 89 (E. & A. 1933); Lake v. Weaver, 80 N.J. Eq. 395, 401 (Ch. 1912), aff'd o.b. 80 N.J. Eq. 554 (E. & A. 1912); Sbarbero v. Miller, 72 N.J. Eq. 248, 254 (Ch. 1907), aff'd o.b. 74 N.J. Eq. 453 (E. & A. 1908); 50 C.J.S. Judgments § 784 at 320. Indeed, the trial judge on the motion to dismiss found that Ralph had advanced plaintiff's claim on her behalf and that she had participated to the full extent possible as if her motion to intervene had been granted. However, the judge's conclusions could only have been the result of speculation because Patricia did not provide him with an adequate record to make any factual findings with respect to her contentions.
It was incumbent upon Patricia as the party asserting a bar by judgment, to present to the judge so much of the record of the divorce proceeding as was necessary to support her contention that plaintiff should have been bound by the judgment. See State v. Ebron, 61 N.J. 207, 215-217 (1972); Robinson-Shore Develop. Co. v. Gallagher, 26 N.J. 59, 68 (1958); Knutsen v. Brown, 96 N.J. Super. 229, 234-237 (App. Div. 1967). Patricia only supplied the trial judge with a copy of the matrimonial judge's short written opinion and the divorce judgment. No transcripts of the trial, the *7 depositions or the motion to intervene were provided. The available record showed only that Ralph had raised the question of plaintiff's lien, that he and the plaintiff had testified and that the judge did not find them credible. The opinion provided that if plaintiff was to be repaid anything, Ralph should pay her, but did not conclude that a particular debt did or did not exist.
Plainly participation in a trial as a witness does not, without more, bind one to the determination therein, State v. Redinger, 64 N.J. 41, 46 (1973); Bacon v. Fay, 63 N.J. Eq. 411 (Ch. 1902), nor does a mere familial relationship to a party in the action. See Rizzi v. Pohan, 102 N.J. Eq. 239 (E. & A. 1928). Furthermore, a person who has unsuccessfully attempted to intervene in an action prior to entry of judgment is not bound as to the claims adjudicated therein unless he is thereafter represented by one who is a party. 46 Am. Jur.2d, Judgments, § 530 at 680; 50 C.J.S. Judgments § 781 at 317; Restatement, Judgments 2d (Tent. Draft No. 2, 1975), § 78, Reporter's Note at 6.
Nothing in this record demonstrates the extent of plaintiff's participation in the presentation of her claim at the divorce trial or her submission to that forum. The record shows only that plaintiff was a witness in the prior proceeding. Accordingly, the trial judge should not have granted defendant's motion to dismiss the complaint on the record presented below.
Our review of the remarks and conclusions of the trial judge persuades us that he has in effect given his opinion on the substantive merits of plaintiff's claim. On remand the cause should be heard by a different trial judge. R. 1:12-1(d).
Reversed.
NOTES
[1] The record does not reveal the ultimate disposition with respect to Ralph Biddle. By virtue of the divorce judgment between him and Patricia, she was awarded full title to the premises in question. Plaintiff disavowed any intention to seek money damages from Ralph at present and sought a voluntary dismissal as to him. The judge denied it, but stated he would "certify" the dismissal as to Patricia as a final judgment, presumably under R. 4:42-2. No order under R. 4:42-2 or dismissal or other resolution as to Ralph appears in the record. This is therefore an appeal from an interlocutory order. Nonetheless, we grant leave to appeal nunc pro tunc and consider the merits. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511681/ | 398 A.2d 393 (1979)
Glenn WENTZELL
v.
WEBSTER RUBBER COMPANY and Travelers Indemnity Company.
Supreme Judicial Court of Maine.
March 1, 1979.
*394 Linnell, Choate & Webber by Jon S. Oxman, Auburn (orally), for plaintiff.
Norman & Hanson by Robert F. Hanson, Portland (orally), for defendant.
Before McKUSICK, C. J., POMEROY, ARCHIBALD, DELAHANTY and GODFREY, JJ., and DUFRESNE, A. R. J.
DUFRESNE, A. R. J.[1]
Appellant-employee Glenn Wentzell appeals from a pro forma decree of the Superior Court affirming an order of the Industrial Accident Commission[2] dismissing employee's petition for award of compensation. The sole issue on appeal is whether the commissioner erred as a matter of law in holding that the employee's injury did not arise (1) out of and (2) in the course of his employment. We sustain the appeal.
FACTS
The commissioner made the following findings of fact which neither party contests:
Wentzell worked as a molder for appellee-employer Webster Rubber Company at employer's plant in Sabattus, Maine. The plant machinery consisted in part of a number of "heel presses" which flatten out rubber *395 and mold it into square forms. The rubber squares must then be trimmed by hand. Each machine was operated by a different employee independently responsible for obtaining his own supplies and molding and trimming the slabs produced by his machine.
Wentzell worked the third shift, which was formally scheduled to begin at 11:00 p. m. On December 19, 1977, Wentzell punched in for his job at the plant between 10:15 and 10:30 p. m. "in accordance with his usual practice as to time of reporting." Before reaching his machine, Wentzell stopped to talk to his brother and father who also worked at the plant. While the three men were talking, Robert Crowley, who worked Wentzell's machine on the second shift, approached and ordered Wentzell to trim sheets that Crowley had molded. Wentzell refused. Greatly angered, Crowley left but then returned, called Wentzell "several names," threatened to have Wentzell fired, and then struck the appellant in the jaw. Approximately ten minutes elapsed between the time Crowley ordered Wentzell to trim the sheets and the assault. The commissioner expressly found that the appellant "neither provoked [the attack] nor responded with (sic) verbal abuse by Crowley."
On January 9, 1978, Wentzell filed a petition for award of compensation for injuries stemming from the assault by Crowley. After a hearing which consisted solely of testimony by Wentzell and the submission of a doctor's report, the commissioner denied Wentzell's claim on grounds that the injury did not arise (1) out of and (2) in the course of Wentzell's employment. Each ground for the decree will be examined separately.
I. Whether the Employee's Injury Arose Out of His Employment
The commissioner rested his conclusion that Wentzell's injury did not arise out of his employment on three grounds: (1) "Crowley was not a supervisor and had no authority to issue the orders"; (2) "there was nothing to indicate that this was a hazard connected with business or any evidence that it had ever occurred before"; and (3) there was a ten-minute "cooling off" period between the argument and the assault that transformed the work-related quarrel into a personal one. The appellant-employee argues that these factors do not, as a matter of law, support the commissioner's conclusion.
Ramsdell v. Naples, Me., 393 A.2d 1352 (1978), decided after the date of the commissioner's decree in the instant case, is dispositive of this issue. Ramsdell worked as a meat cutter in a small room along with one Crawford. On the day of the incident, Ramsdell threw a piece of meat against the wall of the room, an action which offended Crawford since Crawford was responsible for cleaning the room. After a verbal exchange, Crawford drove a boning knife through Ramsdell's hand. In affirming the commissioner's conclusion that Ramsdell's injury arose out of his employment, we cited Larson's treatise for the proposition that "it is universally agreed that if the assault grew out of an argument over the performance of the work . . . the assault is compensable." 1 Larson, Workmen's Compensation Law § 11.12, cited in Ramsdell v. Naples, supra at 1355. See also Wolfe v. Shorey, Me., 290 A.2d 892 (1972).
In the instant case, there is no doubt that the assault arose out of an argument over the performance of work. The dispute centered on the question of which employee would trim the rubber sheets, an important part of each employee's job. As the commissioner found, there was no evidence of prior animosity between Wentzell and Crowley. Moreover, since their shifts were back to back, the dispute arose at the only time the employees could discuss the allocation of responsibility to trim the sheets. The fact that Crowley was not in a supervisory capacity is irrelevant.
Finally, we reject the commissioner's conclusion that the ten-minute period between the argument and the assault transformed the dispute from a quarrel having its origin in work to a personal vendetta between the co-employees. While recognizing that some *396 jurisdictions have held that a cooling off period between a work-related dispute and the actual attack may relieve an employer of liability, see 1 Larson, supra at § 11.13 n. 56, the critical element is not the length of the cooling off period but what occurred during that period. Id. at § 11.13. In the instant case, there was no intervening quarrel between the employees that severed the link between the argument over the performance of work and the assault. The commissioner erred in concluding that Wentzell's injury did not arise out of his employment.
II. Whether the Injury Arose in the Course of Employment
In order to obtain compensation, Wentzell must show not only that his injury arose out of his employment but also that it was "in the course of his employment." Westman's Case, 118 Me. 133, 139-140, 106 A. 532, 537 (1919); Johnson v. Highway Commission, 125 Me. 443, 444, 134 A. 564 (1926). The commissioner advanced two reasons in support of his conclusion that Wentzell's injury did not arise in the course of his employment. The commissioner found that at the time of the assault, Wentzell (1) "was engaged in conversation with his brother and father which had no relationship to his work" and (2) "had not entered upon his work having reported earlier than he was obligated to." The first rationale is insufficient to support the commissioner's conclusion. Non-work-related conversations are a normal incident of the work place. The subject matter of a discussion between employees does not, in and of itself, remove the employees from the protections afforded by the Workers' Compensation Act.
Nor is the second rationale adequate, in and of itself, to support the commissioner's conclusion that Wentzell's injury did not arise in the course of employment. Certainly, an employer is not an insurer of his employee's safety whenever the employee chooses to enter the work place. But "[w]e have long recognized that an employee going to or departing from his regular work-shift is within the course of his employment while on the employer's premises or a way maintained by the employer to provide ingress or egress." Rioux v. Franklin County Memorial Hospital, Me., 390 A.2d 1059, 1060 (1978) (emphasis in original). As we stated in Roberts' Case, 124 Me. 129, 131, 126 A. 573, 574 (1924), "`the course of employment' does not begin and end with the actual work he was employed to do, but covers the period between his entering his employer's premises a reasonable time before beginning his actual work . . .."
Thus, having found that Wentzell had "reported earlier than he was obligated to," the commissioner should have proceeded to determine if the employee's time of arrival was nonetheless reasonable in light of the time Wentzell was actually to begin work. This entails finding the employee's time of arrival and the time that the employee actually was to begin work and then drawing a legal conclusion as to whether the time of arrival was reasonable.
Ordinarily, it might be necessary to remand to the commissioner to make these determinations. However, where the essential facts are undisputed and the legal inference to be drawn from those facts is beyond doubt, considerations of judicial economy and the interest of the parties in obtaining a speedy resolution of their dispute dictates that the Law Court make the final determination without remanding to the commissioner. Beaulieu v. Francis Bernard, Inc., Me., 393 A.2d 163 (1978).
The instant case is amenable to final disposition on this appeal. The commissioner expressly found that Wentzell arrived for work between 10:15 and 10:30 p. m. The commissioner did not expressly find the time Wentzell was to begin work. However, the employee testified that although his shift was formally scheduled to begin at 11:00 p. m., he "would start at ten-thirty." Wentzell explained that the previous shift would usually "knock off, stop work at ten-thirty so they can wash up and get ready to go." The employer did not rebut this testimony. The conclusion that Wentzell ordinarily began his shift a half-hour early is *397 bolstered by the commissioner's express finding that Wentzell punched in for his job on the day of the incident "between 10:15 p. m. and 10:30 p. m., in accordance with his usual practice as to time of reporting." If Wentzell did not actually begin work until 11:00 p. m., it is highly unlikely that he would have made a usual practice of reporting 30-45 minutes early.
In short, the record provides firm support for a finding that Wentzell was actually to begin work at 10:30 p. m., a half hour before his shift was formally scheduled to begin. Given this fact, it is clear that Wentzell's arrival at the plant between 10:15 and 10:30 p. m. was not unreasonable.
Accordingly, we hold that Wentzell's injury arose out of and in the course of his employment. We remand to the commissioner to determine the amount of compensation to which the employee is entitled.
The entry will be
Appeal sustained.
Pro forma decree of the Superior Court vacated.
Remanded to the Workers' Compensation Commission for further proceedings consistent with this opinion; and
It is further ordered that the employer pay to the employee $550 for his counsel fees, plus his reasonable out-of-pocket expenses for this appeal.
WERNICK and NICHOLS, JJ., did not sit.
NOTES
[1] Sitting by assignment.
[2] The name of the Industrial Accident Commission was changed to Workers' Compensation Commission by P.L.1978, c. 612. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511042/ | 372 A.2d 1043 (1977)
HURRICANE ISLAND OUTWARD BOUND
v.
TOWN OF VINALHAVEN et al.
Supreme Judicial Court of Maine.
May 3, 1977.
*1044 Samuel W. Collins, Jr., Stephen W. Hanscom, Collins & Crandall, P. A., Rockland, for plaintiff.
Richard B. Sanborn, Peter T. Dawson, Sanborn, Moreshead, Schade & Dawson, Augusta, for defendant.
Before DUFRESNE, C. J., and WEATHERBEE, WERNICK, ARCHIBALD and DELAHANTY, JJ.
DELAHANTY, Justice.
Defendants, Town of Vinalhaven and Board of Assessors, appeal from a declaratory judgment holding that plaintiff Hurricane Island Outward Bound (Outward Bound) is a "scientific institution" entitled to property tax exemption by 36 M.R.S.A. § 652(1)(B). Two principal issues are canvassed by counsel: (1) whether the court erred in exempting Outward Bound as a "scientific" institution; and (2) whether the presiding Justice erred in admitting prejudicial evidence. We reach only the first issue and we sustain the appeal.
It is conceded that Outward Bound is a nonstock, nonprofit corporation organized in accordance with 13 M.R.S.A. §§ 901 et seq. It operates facilities on Hurricane Island in the summer, and at Greenville during the winter. Only the property owned by Outward Bound at Hurricane Island is involved in this dispute.[1]
*1045 Outward Bound is organized to "provide an opportunity for students to develop their own self-concept and heighten their awareness for other people. Our purpose is self-discovery through shared adventure. We are not a survival school, a summer camp, or outdoor skills school." Through the medium of nature, the "laboratory" at Outward Bound, each student is asked to "risk the difficult and unfamiliar in search of a better understanding of [one's] own resources and capabilities." As part of the program at Hurricane Island, students participate in first aid training, seamanship, navigation, rock climbing, community service, and an island solo. As an educational facility, Outward Bound employs seventy-five instructors on a part-time basis, many of whom hold college degrees and have had substantial teaching experience.
Students at Outward Bound must be at least 16½ years old and in good health. In 1974, 948 people took part in Maine's Outward Bound; sixty-three were Maine residents. The 1973 alumni numbered 814, including forty-five Maine residents.[2] The standard summer course runs twenty-six days, and costs $600.00, approximately $160.00 each week, though other course offerings are available for terms of five, ten, twenty-three, and thirty days. At the end of the program each student receives a diploma and a written personal evaluation.
I.
Appellants contend that the presiding Justice erred in finding that Outward Bound is a "scientific institution" within 36 M.R.S.A. § 652(1)(B) and is therefore exempt from any property tax.[3] In pertinent part, 36 M.R.S.A. § 652 provides:
The following property of institutions and organizations is exempt from taxation:
(1)(B) The real estate and personal property owned and occupied or used solely for their own purposes by literary and scientific institutions.
The judge below found and ruled as follows:
Outward Bound's activities on Hurricane Island are educational, though its curriculum be somewhat different from that of most schools. It teaches no courses under the rubrics of botony, zoology, ecology. Yet there is no doubt that the subject matter which it teaches is scientificapplied science at a vital and graphic level. If there is no course called "botany" nonetheless there is education designed to cause the student to recognize comestible plants so that the student may survive when no grocery or restaurant is available. Similarly, if there is no course labeled "zoology", nonetheless the student is led to have a real understanding and appreciation of the sea creatures of the oceans for the practical purpose of survival. And if there is no course called "environmental studies," the student is nonetheless called upon to master those arts and crafts which will enable the student on the individual level to survive in and with his world. (R-A-13) (Emphasis added).
The presiding Justice concluded that it was unnecessary to decide whether all educational institutions are "scientific," because "[t]he courses taught by Outward Bound are in essence scientific in the sense that the courses deal with applied science on the most practical and pragmatic level." In its effect, the judgment holds that, without *1046 more, the teaching of scientific subjects by an institution automatically categorizes such an institution as "scientific."
Our construction of what is a "scientific institution" must be a narrow one, for tax exemption statutes must be strictly construed, and all doubt and uncertainty as to the meaning of the statute must be weighed against exemption. Inhabitants of Town of Owls Head v. Dodge, 151 Me. 473, 121 A.2d 347 (1956); In re Camden Shipbuilding Co., 227 F. Supp. 751 (D.C.Me.1964). Such an interpretation is in accord with our policy that taxation is the rule and tax exemption is the exception. State Young Men's Christian Association of Maine v. Town of Winthrop, Me., 295 A.2d 440 (1972); Green Acre Baha'i Institute v. Town of Eliot, 150 Me. 350, 110 A.2d 581 (1954). The burden of establishing tax exemption is upon the plaintiff. Exemption is a special favor conferred. The party claiming it must bring his case unmistakably within the spirit and intent of the act creating the exemption. Holbrook Island Sanctuary v. Inhabitants of Town of Brooksville, 161 Me. 476, 483, 214 A.2d 660, 664 (1965); City of Bangor v. Rising Virtue Lodge No. 10, Free and Accepted Masons, 73 Me. 428 (1882).
In gauging the full import of 36 M.R.S.A. § 652(1)(B), we are guided by the familiar and general rule that any interpretation of language as shall be adopted by this Court will be that definition which is most reasonable according to the natural and obvious import of the statutory language. Davis v. State, Me., 306 A.2d 127 (1973); Frost v. Lucey, Me., 231 A.2d 441 (1967). An elementary rule of statutory construction is that words must be given their common meaning unless the act discloses a legislative intent otherwise. Union Mutual Life Insurance Co. v. Emerson, Me., 345 A.2d 504 (1975); Canal National Bank of Portland v. Bailey, 142 Me. 314, 51 A.2d 482 (1947). Because 36 M.R.S.A. § 652(1)(B) discloses no legislative directions as to the meaning of "literary and scientific institutions," we are left to effect the common meaning and plain meaning of those terms.
We read 36 M.R.S.A. § 652(1)(B) exempting "literary and scientific institutions" as enunciating a test that such an institution may be exempt from property tax only if it is either "literary" or "scientific." The word "and" is a conjunctive in its commonly accepted meaning and serves, in this statute, to warrant exemption for both literary institutions and scientific institutions; an institution need qualify under only one of these two broad headings. The appellee makes no argument that Outward Bound is a "literary institution"; thus, appellee's sought-after property tax exemption must be denied unless Outward Bound is a "scientific institution."
In Holbrook, supra, this Court focused on the issue of when an institution is "scientific" for purposes of property tax exemption. There we held, inter alia, that a nonstock corporation which used property as a wildlife sanctuary was not a "scientific" institution within the tax exemption statute, where its purpose was to establish a game preserve. Even though the area was available for nature study, observation and photography, there was a small library on nature and conservation, and the warden took a census of the animals, such "uses (were) too small on which to place the plaintiff in the ranks of a scientific institution. Such uses are only incidental to the main object of the plaintiff." Holbrook, supra at 667. Scientific pursuits of an institution must be of a primary or substantial character; an "incidental" scientific objective is insufficient to qualify for exemption. We find appropriate the language of New England Theosophical Corp. v. City of Boston, 172 Mass. 60, 63, 51 N.E. 456, 457 (1898):
To make an institution scientific, it should be devoted either to the sciences generally, or to some department of science as a principal object, and not merely as an unimportant incident to its important objects.
The primary purpose of Outward Bound is acknowledged in its corporate charter as:
In general, to promote exclusively educational purposes and objects by establishing *1047 and operating an educational institution or institutions to instruct, improve and develop the intellectual and physical characteristics of the individual in contact with the forces of nature.
The stated aim of Outward Bound is "educational." The narrower question must then be faced of whether an educational institution which teaches "scientific" courses is a "scientific institution," for purposes of the property tax exemption.
Outward Bound attempts to vindicate its avowed purpose as a "scientific institution" by urging upon this Court that it teaches courses in "applied science" such as survival, navigation, nutrition, and rock climbing. Although we recognize that Outward Bound's activities may well be "educational" in a broad sense, the exemption sought is a narrow one. It excludes only "literary and scientific institutions." In declaring that only "literary and scientific institutions" may qualify for tax exemption, the legislature made no provision under the penumbra of "education," even though it is common for taxing statutes to fashion exemptions for institutions "organized and operated for religious, charitable, scientific, testing for public safety, literary or educational purposes." 26 U.S.C.A. § 501(c)(3). The answer does not lie within the immutable nature of the written words of the statute. To the best extent that we can give one, the answer lies rather in the context of the words of the statute, which is the solemn expression of the legislature. When used collectively, "scientific" must have a meaning separate and distinct from that of "educational." We conclude that this separate meaning was not lost when the legislature provided tax exemptions only for "scientific" but not "educational" institutions.
We decline to hold therefore, that every "educational" organization offering instruction in the sciences, in the "scientific" methods of sailing or rock climbing or of nutrition, must necessarily qualify as a "scientific institution." That it might be possible in a broad sense, to find a scientific aspect of some of Outward Bound's courses and activities is insufficient as a matter of law to bring Outward Bound within the restricted meaning of a "scientific institution" as used in 36 M.R.S.A. § 652(1)(B). The teaching of "scientific" courses is, without more, insufficient to warrant a finding that the institution is "scientific" for purposes of property tax exemption.[4]
Outward Bound serves a unique and meritorious educational function, in that it is a valuable tool for building confidence and self-reliance and deepens an individual's appreciation of nature and of man's role in his environment. The program offered by Outward Bound is truly a "powerful supplement to traditional forms of education." The purposes of Outward Bound, while laudable, surely are not wholly scientific. Nowhere in its charter is there any statement that its objects are exclusively scientific. Science is not its only primary object and hence it is not entitled to enjoy immunity within 36 M.R.S.A. § 652(1)(B) from the tax imposed. The result reached by the Court below is erroneous as a matter of law.
II.
Since we sustain the appeal, we find no occasion to discuss certain evidentiary issues raised by the defendants.
*1048 The entry must be:
(1) Appeal sustained
(2) Remanded to Superior Court for determination of property tax due on defendants' counterclaim.
All Justices concurring.
WEATHERBEE, J., sat at oral argument and participated in conference but died before this opinion was adopted.
POMEROY, J., did not sit.
NOTES
[1] The property at Hurricane Island owned by Outward Bound consists of: a combination mess hall-administrative building, which also serves as an indoor classroom; a combination boathouse-logistics building which is also used to store equipment; twelve cabins for faculty housing; forty-five tent platforms for student housing; a generator building; a laundry; a staff washhouse; a student washhouse; an infirmary; numerous piers and moorings; and forty boats. The facility has a library of four hundred books, primarily novels and reference manuals.
[2] Outward Bound is precluded from exemption under 36 M.R.S.A. § 652(1)(A) as a "charitable organization" because charitable institutions are not entitled to tax exemption if conducted or operated principally for the benefit of persons who are not residents of Maine and if stipends or charges for its services are in excess of $30 a week.
[3] Organizations qualifying for tax exemptions under 36 M.R.S.A. § 652(1)(B) must also satisfy the requirements of ownership and of § 652(1)(C). As appellants have not contested such qualification, the only issue on appeal is whether Outward Bound qualifies under § 652(1)(B) as a "scientific institution."
[4] Without specifying the necessary elements of a "scientific institution," we note that several jurisdictions, having statutes similar in language to 36 M.R.S.A. § 652(1)(B), define "scientific" as "including the carrying on of scientific research." Federal Tax Regulations, 1.501(c)(3)-1(5)(c); Explorers Club v. Lewisohn, 34 N.Y.2d 143, 356 N.Y.S.2d 555, 559, 313 N.E.2d 30, 33 (1974); Lineal v. United States, 366 F. Supp. 118 (D.C.Ark.1973); American Concrete Institute v. Michigan State Tax Institute, Commission, 163 N.W.2d 508 (Ct.App. of Mich. Div. 1, 1968); Amirikian v. United States, 100 F. Supp. 263 (D.C.Md.1951); C.I.R. v. Orton, 173 F.2d 483 (6th Cir. 1949); Lois Grunow Memorial Clinic v. Oglesby, 42 Ariz. 98, 22 P.2d 1076 (1933). We find it unnecessary to determine today whether the Maine statute, 36 M.R.S.A. § 652(1)(B) warrants the requirement of "scientific" research as an essential component of a "scientific institution." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511048/ | 88 F.2d 97 (1937)
YOUNG
v.
RALSTON-PURINA CO.
No. 10748.
Circuit Court of Appeals, Eighth Circuit.
February 17, 1937.
*98 Allen A. Herrick and Herschel G. Langdon, both of Des Moines, Iowa (D. Cole McMartin, of Des Moines, Iowa, on the brief), for appellant.
William Hossfeld, of Des Moines, Iowa (F. W. Lehmann, Jr., and W. B. Hurlburt, both of Des Moines, Iowa, on the brief), for appellee.
Before SANBORN, WOODROUGH, and BOOTH, Circuit Judges.
WOODROUGH, Circuit Judge.
The petition in this case presented a cause of action at law in two counts within the federal jurisdiction because of diverse citizenship of the parties. In the first count the plaintiff alleged that he had invented a certain toy movie theater for which he had a patent pending during the summer of 1934 and that during that summer he entered into negotiations with defendant to sell the use of the invention to the defendant; that defendant stated it was interested in utilizing plaintiff's idea on the basis of paying plaintiff a royalty on each toy theater used; that at defendant's request plaintiff disclosed all the details of his invention to defendant, and the defendant thereupon utilized the plaintiff's idea and invention and produced and distributed one million of said toy theaters and became thereby indebted to plaintiff for a reasonable royalty, figured at $12,500.
In the second count the allegations were "that on or about October 22, 1934, the defendant offered to purchase the use of plaintiff's invention to use said toy theatre idea" at a certain royalty price; that the plaintiff accepted the offer; and that the "defendant did produce and utilize * * * one million of said toy theatres and thereby became indebted to plaintiff in the sum of $12,500.00."
There was a prayer for judgment in the sum of $12,500, with interest and costs.
The defendant answered that it did cause toy movie theaters to be made and distributed as a premium during the latter part of 1934 and the early part of 1935, but the toys did not embody the plaintiff's invention and they were not made or distributed pursuant to any contract express or implied between plaintiff and defendant; that the structure of the toy movie picture theater was old and well-known to the public prior to plaintiff's alleged invention; and that the structure of those made and distributed by defendant was fully illustrated and described in six certain letters patent issued to inventors other than the plaintiff and identified in the answer.
At the conclusion of all the testimony offered on the trial of the case the defendant moved to direct a verdict in its favor, the motion was sustained, and judgment of dismissal at plaintiff's costs was entered on the verdict. The plaintiff has appealed.
It appears that the plaintiff is a commercial artist, and that prior to the summer of 1934 he had invented and applied for a patent upon a toy movie theater and carton combined; that is, "a carton which could be used to contain merchandise for storage and shipping and display and, which, after the removal of the merchandise contents, could be folded and adjusted to form a toy movie theatre." His agent, L. W. Hoppe, called upon a purchasing agent of the defendant, a Mr. Ledbetter, in June, 1934, and tried to interest him in the plaintiff's article with a view to making a sale to the defendant. Mr. Hoppe's idea was that the defendant could use the plaintiff's carton as a container for its product. Mr. Ledbetter declined to consider it for that purpose. But a method of advertising used by the defendant, Ralston-Purina Company, at that time was to send a premium by mail to any of its customers who would tear the top off the box in which defendant's product was sold and return the top to the defendant, and, after some discussion, it appeared to Mr. Hoppe and Mr. Ledbetter that a toy movie theater that could be made for a small price and inclosed in a mailing envelope would make a suitable premium to be given away in such an advertising campaign.
*99 Accordingly, the plaintiff endeavored to sell the defendant toy movie theaters for such use as advertising premiums. He made up and submitted a model of the toy theater that he wanted to sell (Exhibit 4), but it appeared that such a toy would cost too much. Mr. Hoppe testified that Mr. Ledbetter said that he could not pay over five cents. "He (Mr. Ledbetter) said if you can produce one of these for five cents I will buy it." The plaintiff then made up and submitted another model toy theater (Exhibit 7) of the same construction but smaller and apparently of lighter stock, and on October 19, 1934, he submitted to defendant a formal proposition in writing based on Exhibit 7 proposing to furnish to the defendant two million each of his envelopes, film strips, and die-cut toy theaters on certain specified terms and conditions (the price closely approximating five cents), and the defendant declined the proposal.
Mr. Hoppe testified, however, that afterwards, on October 22d, Mr. Ledbetter made a definite oral offer to pay the plaintiff a royalty of 1½ cents a theater (up to 500,000 theaters) for the use of the toy theater which had been submitted by the plaintiff and that the defendant accepted the offer and Mr. Hoppe orally communicated the acceptance to Mr. Ledbetter before the same was withdrawn. Mr. Ledbetter denied making any such oral offer. There were no further transactions or negotiations between the parties.
It appears that the defendant made inquiries concerning toy movie theaters and prior art and that there were various such devices known and patented prior to the plaintiff's invention. In general, they were made of cardboard to be folded into box shape. The front of the box would be marked with a design of a stage and within the design there would be a picture aperture or sight opening. A long strip of paper bearing a series of pictures and called a film was attached at its ends to rollers journaled in the cardboard and could be wound back and forth from one roller to the other so that the pictures on the film would come into view, one after the other, through the sight opening in front. Such devices were shown and illustrated in the patent No. 269,764, issued to Whitelaw December 26, 1882, patent No. 1,917,977, issued to Kalert July 11, 1933, British patent No. 237,957, issued to Batchelor & Co., April 30, 1924, and patent No. 1,237,161, issued to Bowen August 14, 1917.
Mr. Ledbetter testified that he had "been out" to obtain a price on the making of toy theaters and came in contact with other theaters that had been made and sold previously and that after the negotiations with plaintiff had come to an end he collaborated with the "cereal committee" of the defendant and its "legal department" and others, having the prior art before them, and ultimately the defendant had ordered and caused 300,000 toy theaters to be made up (exemplified by Exhibit 9), of which 289,143 had been distributed at the time plaintiff's petition was filed. Mr. Ledbetter's testimony is positive that the defendant did not intend to embody the plaintiff's patent in the structure which it procured and distributed. He said, "I was sure that we had the exclusive right to manufacture this theatre (Exhibit 9). That is what I was advised by our legal department."
The plaintiff tore off the tops from some of the boxes in which defendant's products were sold and sent the tops in to the defendant and procured examples of the toy movie theaters which defendant had had made and was distributing. Thereupon, the plaintiff's attorney, with the defendant's theater in mind, drew up a claim numbered 17 and added it to the plaintiff's application for patent then pending in the patent office. The added claim was intended to cover, and did cover, the defendant's structure, and it was ultimately allowed by the Patent Office along with plaintiff's other sixteen claims and patent issued to the plaintiff on March 26, 1935.
If the suit had been for damages for patent infringement, defendant's infringement would appear as to claim numbered 17 (assuming validity of the claim) because the plaintiff had the claim drawn upon defendant's own theater, but both parties insist (and it is apparent) that the suit is not one for patent infringement. Neither does the plaintiff claim to be entitled to recover anything from defendant for disclosing to defendant the idea of using a toy movie picture theater as a premium to be given away in the defendant's advertising campaign. His only claim is that the theater which he had invented and exhibited to defendant was taken and used by defendant upon an express or implied promise to pay a royalty for the use of it.
The trial court had the structure which plaintiff had offered to defendant and the defendant's structure both before it for *100 comparison and concluded, on making such comparison, that the defendant had not used or embodied the toy movie picture theater which plaintiff had submitted to defendant in the structure which defendant caused to be made up and distributed and, therefore, that defendant could not be held for breach of a contract, express or implied, to pay a royalty for using the plaintiff's theatre.
We assume, without deciding, that an unpatented invention, such as claimed by plaintiff, might be the subject of a contract express or implied for payment of a royalty for using it, and that a cause of action might be based upon the breach of such a contract. Acme Chair & Metal Crafts Co. v. Northern Corrugating Co., 209 Wis. 8, 243 N.W. 415, 244 N.W. 582; Myers v. Gerhardt, 344 Ill. 620, 176 N.E. 713; Burton v. Burton Stock-Car Co., 171 Mass. 437, 50 N.E. 1029; Ingraham v. Schaum, 157 Pa. 88, 27 A. 404; Marston v. Swett, 66 N.Y. 206, 23 Am.Rep. 43; Ullman v. Thompson, 57 Ind.App. 126, 106 N.E. 611; Hamilton v. Park & McKay Co., 112 Mich. 138, 70 N.W. 436. Although, as quoted by this court in Lueddecke v. Chevrolet Motor Co. et al. (C.C. A.) 70 F.(2d) 345, 349: "Without denying that there may be property in an idea or trade secret or system, it is obvious that its originator or proprietor must himself protect it from escape or disclosure. If it cannot be sold or negotiated or used without a disclosure, it would seem proper that some contract should guard or regulate the disclosure; otherwise, it must follow the law of ideas, and become the acquisition of whoever receives it."
But we agree fully with the trial court that no such case of liability on a contract to pay royalty for such use could be made out by the plaintiff unless there was proof that the article which the defendant used was the same as that offered to it by the plaintiff. We also agree with the trial court that there was no proof that the defendant did make use of the toy theater which had been submitted to it by the plaintiff.
There is no dispute or uncertainty as to what the plaintiff offered to the defendant. It was a toy movie theater exemplified by the physical exhibits 4 and 7 before the trial court and now before this court. It was illustrated by drawings, Exhibit 6A, and it was represented by plaintiff in his attorneys' letter submitted to defendant "that the form of theatre which your representative has been discussing with Ralston (Purina Company) is exactly covered by our allowed Claim 6. * * *"
The toy movie picture theater so identified and which was the subject of the negotiations between plaintiff and defendant, in addition to having the old elements general to such toy theaters, was constructed with a false bottom into which the bottom ends of the film rollers were inserted so that the theater could be placed on a table and the rollers would not protrude out the bottom, and flaps were provided in which slots were cut through which the film passed and which guided the film straight across the sight opening horizontally, and, at the same time, held the film uniformly against the sight opening so that, as the film was wound from one roller to the other, it would always pass in the same relative position to the sight opening.
On the other hand, the toy theater structure put out by defendant (also completely identified) embodied the general elements of the old toy theaters, namely, the box structure with the sight opening in the front and rollers upon which to roll the film back and forth so that the film would pass across the sight opening. But it did not embody the false bottom of the plaintiff's device, nor the slotted film guides, which were the novel elements included in the first sixteen claims of the plaintiff's invention, all of which was apparent upon comparing the two structures.
The case may be put thus: The defendant (according to plaintiff) said to the plaintiff, "I will use your toy theatre which you have submitted to me and pay you 1½ cents for each such theatre I produce," and plaintiff accepted the offer. Then the defendant determined not to use plaintiff's toy theater. Instead of doing so, it made up from old art and its own devising another toy theater which, on advice of counsel, it believed was different from that submitted by the plaintiff, and which was in fact different. Manifestly, the defendant never promised or intended to pay a royalty on the toy theater of its own devising, and we know of no rule of law by which such a promise could be imputed to it.
It has been contended for appellant that there was some "expert" testimony that the defendant's toy theater embodied a mechanical equivalent of one of the elements of plaintiff's invention and that *101 there was, therefore, a question for the jury whether the defendant had used the plaintiff's invention.
Two patent attorneys and the plaintiff testified as experts. They did not question that the claim numbered 17 of plaintiff's patent was broad enough to cover the defendant's structure, because the claim had been drawn on defendant's structure. But it is manifest that the defendant did not enter into any contract with plaintiff with reference to any structure made under that claim. The claim was not devised until after the negotiations between the parties had ceased and no contract could be imputed to defendant in regard thereto. There was no testimony that defendant's structure embodied the false bottom feature of the plaintiff's invention. But the defendant's theater has slotted tabs at one end which fold inwardly and the roller fits into the slots, and the plaintiff and the patent attorney Bair gave opinion testimony that the slotted film guides of the plaintiff's patent were mechanical equivalents of the slotted tabs used in the defendant's structure. They were contradicted by the expert for defendant. We think this testimony of the witness Bair is inconsistent with the testimony he gave to the effect that defendant's theater was not covered by any of the first sixteen claims of plaintiff's patent and by his testimony that the slotted tabs of defendant's structure do not perform the function of the plaintiff's slotted film guides of holding the film paper against the inside of the front wall, but we are convinced that there was no issue on the claimed question for the jury.
Comparison of the physical structures demonstrates as a physical fact that the slotted tabs used in the defendant's structure at one end are not equivalents of the plaintiff's film guides. The slotted tabs neither perform the service of affording any substantial guide to the film nor do they tend to perform the function of holding the film against the inside of the front wall. They do tend to hold one of the film rollers in its proper position. On the other hand, the film guides of plaintiff's structure are positive guides which inclose the film and position it in the sight opening space and against the inside of the front. There is no substantial equivalence.
When it appears, in a patent infringement suit, that extrinsic evidence is not needed to explain the terms of art involved and the court is able, from mere comparison, to comprehend what the invention described in a patent is, and, from a mere comparison of the structures, to determine whether one device infringes on another, the question of infringement or no infringment is one of law. Singer Mfg. Co. v. Cramer, 192 U.S. 265, 275, 24 S. Ct. 291, 48 L. Ed. 437; Sanitary Refrigerator Co. v. Winters, 280 U.S. 30, 36, 50 S. Ct. 9, 74 L. Ed. 147; Market Street Cable Ry. Co. v. Rowley, 155 U.S. 621, 625, 15 S. Ct. 224, 39 L. Ed. 284; Edward G. Budd Mfg. Co. v. C. R. Wilson Body Co. (C.C.A.6) 21 F.(2d) 803, 805; Hurin v. Electric Vacuum Cleaner Co. (C.C.A.6) 298 F. 76. The principle is most plainly applicable here.
Here the plaintiff's claim was that the structure which defendant put out was the particular structure concerning which the parties had contracted. That claim could not be made out by a showing merely that defendant had, through the use of mechanical equivalents, infringed upon some claim of a patent afterwards granted to the plaintiff. It could only have been made out by proof according to the allegations of the petition of use of the theater disclosed by plaintiff and which the defendant promised, expressly or impliedly, to pay for using. The proof entirely failed to sustain the allegation of the petition that the defendant used the movie picture theater disclosed to it by the plaintiff.
In view of the foregoing conclusion, the other points argued for the appellant need not be discussed.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510707/ | 64 F.2d 422 (1933)
HARMER
v.
RENDLEMAN.
No. 3414.
Circuit Court of Appeals, Fourth Circuit.
April 4, 1933.
Garland A. Thomasson and J. E. Swain, both of Asheville, N. C., for appellant.
Harkins, Van Winkle & Walton, of Asheville, N. C., for appellee.
Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.
PARKER, Circuit Judge.
Appellant, who was plaintiff in the court below, instituted this action against the receiver of the American National Bank of Asheville, N. C., to recover certain bonds and notes deposited with that bank, or, in lieu thereof, damages on account of their loss or conversion. By consent of parties the trial judge submitted the following issue to the jury: "Were the securities described in the complaint stolen or lost through the gross negligence of the American National Bank?" And the jury, at the direction of the court, answered this issue "Yes." Judgment was then entered that plaintiff recover the securities in question from the receiver and that, upon failure of the receiver to deliver them to her, she have receiver's certificates in the amount of the bonds not delivered so as to constitute her a general creditor of the bank without preference over other creditors. Plaintiff moved for a judgment which would declare the amount due her a preferred claim against funds in the hands of the receiver; and upon the denial of her motion excepted to the judgment as entered and appealed to this court.
It is perfectly clear that plaintiff has been awarded the only judgment to which she is entitled in the legal action which she has instituted. A court of law can render judgment that the possession of property wrongfully withheld be restored to the rightful owner or can award damages for negligent loss or wrongful conversion; but it has no power to declare a trust or to impress a fund with a lien on the theory that trust funds have entered into it. The latter is a power which only courts of equity can exercise. If we thought, however, that upon the pleadings and proof plaintiff was entitled to *423 such equitable relief, it would not be denied because she had mistakenly sought relief on the law side of the court. Great American Insurance Co. v. Johnson (C. C. A. 4th) 25 F.(2d) 847; Id. (C. C. A.) 27 F.(2d) 71; Clarksburg Trust Co. v. Commercial Casualty Ins. Co. (C. C. A. 4th) 40 F.(2d) 626. But to justify this court in granting equitable relief in a suit mistakenly instituted at law, it must appear that plaintiff's right to same is supported both by the pleadings and the proofs in the court below. Here it is supported by neither.
Plaintiff's original complaint alleges merely that she placed certain securities with the bank for safe keeping and for the purpose of having the bank collect the interest and dividends from same and deposit them to her credit; that, after the failure of the bank, she demanded a return of the securities, which she was unable to obtain; and that the securities were worth face value. An amendment to the complaint alleges that the bank was guilty of gross negligence resulting in the loss of the securities. The proofs show that the bonds were left by plaintiff with the bank for safe keeping and in order that the interest and dividends might be collected and deposited to her account; that the interest and dividends were so collected and deposited until the bank's failure; that, with two exceptions not here material, plaintiff was not credited with the principal amount of any of the securities; and that in some manner, not shown by the evidence, the securities were taken from the safety deposit box in which they were kept and were not there when the receiver took charge of the bank. There is nothing to show what became of the securities whether they were sold by the bank and their proceeds covered into its general funds, whether they were used as security for loans obtained by it, whether they were used to extinguish its obligations, or whether they were used by its officers for their private purposes; and there is neither allegation nor proof that the securities or their proceeds augmented in any way the funds which passed into the hands of the receiver when he took over the bank's affairs.
The old rule with regard to the tracing of trust funds wrongfully misapplied, or the proceeds of property wrongfully converted, was that the right ceased when the property was turned into money and mixed and confounded in the general mass of property of the same description. 2 Story Eq. Jurisprudence 1258, 1259; Philadelphia Nat. Bank v. Dowd (C. C.) 38 F. 172, 2 L. R. A. 480. The modern rule, however, is that where such property or its proceeds has gone to swell the aggregate in the possession of the fraudulent party, it may, under proper proceedings, be segregated in amount from such aggregate sum, and made the subject of a trust, in order to accomplish the ends of justice. Quin v. Earle (C. C.) 95 F. 728, 731; Central Nat. Bank v. Conn. Mut. Life Ins. Co., 104 U.S. 54, 26 L. Ed. 693; Knatchbull v. Hallett, 13 Ch. Div. 696; notes 32 Am. St. Rep. 129; L. R. A. 1916C, 31.
But there is a limitation upon this modern rule as well settled as the rule itself, viz., that it is not sufficient to prove merely that the trust property has gone into the general estate and has presumably increased its amount and value. It is indispensable that clear proof be made that the trust property or its proceeds has gone into a specific fund, or into a specific identified piece of property, or has directly augmented a fund upon which the trust is to be declared. When it is sought to impress funds in the hands of a receiver with a trust on account of the wrongful conversion of trust property by an individual or corporation to whose rights he has succeeded, it must be shown that the funds in his hands have been directly augmented by the presence of the trust property or its proceeds, so that a court of equity can see with certainty that the trust property is in his hands. Peters v. Bain, 133 U.S. 670, 693, 694, 10 S. Ct. 354, 33 L. Ed. 696; First National Bank of Ventura v. Williams (D. C.) 15 F.(2d) 585; Marshburn v. Williams (D. C.) 15 F.(2d) 589; Smith Reduction Corporation v. Williams (D. C.) 15 F.(2d) 874; Schumacher v. Harriett (C. C. A. 4th) 52 F.(2d) 817, 818, 819, 82 A. L. R. 1; Ellerbe v. Studebaker Corporation of America (C. C. A. 4th) 21 F. (2d) 993; Frelinghuysen v. Nugent (C. C.) 36 F. 229, 239; City Bank of Hopkinsville v. Blackmore (C. C. A. 6th) 75 F. 771; Richardson v. New Orleans Debenture Redemption Co. (C. C. A. 5th) 102 F. 780, 52 L. R. A. 67; American Can Co. v. Williams (C. C. A. 2d) 178 F. 420; Empire State Surety Co. v. Carroll County (C. C. A. 8th) 194 F. 593, 604; Farmers' Nat. Bank v. Pribble (C. C. A. 8th) 15 F.(2d) 175, 176; Dudley v. Richards (C. C. A. 8th) 18 F.(2d) 876. And see exhaustive note in 82 A. L. R. 46, 52, 71, 73, and cases there cited.
The rule with the limitation upon it is thus stated by Mr. Justice Bradley in Frelinghuysen v. Nugent, supra, and this statement is quoted with approval by the Supreme Court in Peters v. Bain, supra: "Formerly the equitable right of following misapplied *424 money or other property into the hands of the parties receiving it, depended upon the ability of identifying it; the equity attaching only to the very property misapplied. This right was first extended to the proceeds of the property, namely, to that which was procured in place of it by exchange, purchase, or sale. But if it became confused with other property of the same kind, so as not to be distinguishable, without any fault on the part of the possessor, the equity was lost. Finally, however, it has been held as the better doctrine that confusion does not destroy the equity entirely, but converts it into a charge upon the entire mass, giving to the party injured by the unlawful diversion a priority of right over the other creditors of the possessor. This is as far as the rule has been carried. The difficulty of sustaining the claim in the present case is that it does not appear that the goods claimed, that is to say, the stock on hand, finished and unfinished, were either in whole or in part the proceeds of any money unlawfully abstracted from the bank."
And the late Judge Sanborn thus states the limitation on the rule in Empire State Surety Co. v. Carroll County, supra, the statement being quoted with approval in the subsequent case of Farmers' Nat. Bank v. Pribble, supra: "It is indispensable to the maintenance by a cestui que trust of a claim to preferential payment by a receiver out of the proceeds of the estate of an insolvent that clear proof be made that the trust property or its proceeds went into a specific fund or into a specific identified piece of property which came to the hands of the receiver, and then the claim can be sustained to that fund or property only and only to the extent that the trust property or its proceeds went into it. It is not sufficient to prove that the trust property or its proceeds went into the general assets of the insolvent estate and increased the amount and the value thereof which came to the hands of the receiver."
Judge Sanborn follows this with the statement: "Proof that a trustee mingled trust funds with his own and made payments out of the common fund is a sufficient identification of the remainder of that fund coming to the hands of the receiver, not exceeding the smallest amount the fund contained subsequent to the commingling, * * * as trust property, because the legal presumption is that he regarded the law and neither paid out nor invested in other property the trust fund, but kept it sacred." And this rule was applied by us in Schumacher v. Harriett, supra; but there is nothing in the record to justify its application here, for there is no proof that the securities of plaintiff or their proceeds were ever mingled with any fund that came into the hands of the receivers.
It is true, of course, that where it is shown that securities have been delivered to a bank to be held for a special purpose and that the bank or its receiver has failed to return them upon demand, a prima facie case of liability on the part of the bank is made out in a suit instituted to secure the return of the securities or damages for their conversion. Beck v. Wilkins-Ricks Co., 179 N. C. 231, 102 S.E. 313, 9 A. L. R. 554, and cases there cited. But in order to impress funds in the hands of the receiver with a trust in favor of the owner of the securities, it is necessary to do more than establish liability for conversion. The owner must trace the securities or their proceeds into the funds which have come into the hands of the receiver, or show that such funds were directly augmented as a result of the conversion of the securities. This the plaintiff in this case has not done.
For the reasons stated, the judgment appealed from will be affirmed.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510842/ | 258 F. Supp. 862 (1966)
FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a Corporation, Plaintiff,
v.
A TO Z EQUIPMENT CORP. et al., Defendants.
No. 64 C 854.
United States District Court E. D. New York.
June 20, 1966.
*863 Maurice & McNamee, New York City, for plaintiff, Joseph P. Hoey, U. S. Atty., Cyril Hyman, Asst. U. S. Atty., of counsel.
George Weisbrod, New York City, for defendant, Murray-Benjamin Electric Co.
Kirlin, Campbell & Keating, New York City, for defendants, Chilean Line, Inc. and Pittston Stevedoring Corp., Richard H. McKenna, New York City, of counsel.
Seymour Goldstein, Brooklyn, N. Y., for defendant, Seaboard Electric Co. Inc.
Theodore D. Ostrow, Esq., Brooklyn, N. Y., Special Master.
Arnold M. Schwartz, Brooklyn, N. Y., for defendant, Dunham-Bush, Inc.
MEMORANDUM
BRUCHHAUSEN, District Judge.
The plaintiff instituted this action for interpleader. The plaintiff now moves for confirmation of the report of Theodore D. Ostrow, Esq., Special Master appointed by the Court. As additional relief, the plaintiff seeks an award of $12,500 counsel fees, also costs and disbursements, payable out of the fund.
The plaintiff, as surety, issued a bond, pursuant to 40 U.S.C. § 270a in the penal sum of $122,479.50 in behalf of Main Ship Repair Corp., as principal, in favor of the United States of America, as obligee. It accompanied a contract for the repair of a vessel, entered into between the said principal and obligee. Subsequently, the principal was adjudicated a bankrupt. There were 114 unpaid subcontractors. The Special Master conducted hearings on the claims of the defendants and made findings and conclusions of law.
Several of the claimants entered objections to the Special Master's recommendation that the plaintiff be awarded reasonable attorneys fees, costs and disbursements.
The law on this subject is well settled. In the absence of extraordinary circumstances an interpleading plaintiff will not be entitled to payment of such allowances from the fund. The ordinary costs of the plaintiff in transacting its business may not be taxed to the parties insured. Travelers Indemnity Company v. Israel, 2 Cir., 1965, 354 F.2d 488, and cases cited therein.
The plaintiff's request for its counsel fees, costs and disbursements is denied excepting that there is allowed the sum of $1991.50, payable out of the fund to reimburse it for the minutes of the hearings.
The Special Master's compensation is fixed at the sum of Ten Thousand Dollars, payable out of the fund.
The Special Master allowed the assignee of claimant
No. 101, Seaboard Electric Co., the sum of ........ $12,215.75
Less Allowance to claimant
No. 73, Murray Benjamin
Electric Co. of $4797.38
and
Less U. S. tax lien of 6300.42 11,097.80
______________________________
Net $ 1,117.95
*864 The claimant (73), Murray Benjamin Electric Co., objects to the ruling of the Special Master, relegating it to a separate action for recovery of the balance of its claim for materials furnished to the defendant, Seaboard Electric Company, Inc, (101). It also objects to the ruling that out of the pro rata share of the allowed claim of Seaboard, the tax claim of the Government be accorded priority and that any balance be paid to Seaboard's assignee. In short the objectant, a materialman of Seaboard seeks priority over the Government's tax lien.
It is settled law that property of the United States is generally not subject to State lien laws, Continental Casualty Company v. United States, etc., 8 Cir., 305 F.2d 794; certiorari denied 371 U.S. 922, 83 S. Ct. 290, 9 L. Ed. 2d 231. The Miller Act, 40 U.S.C. § 270b gives a property right to a claimant to sue which right may be attached. Lee v. Mack, 15 Misc. 2d 657, 182 N.Y.S.2d 391. See also Section 6321 of the Internal Revenue Code of 1954. The authorities cited by the objector are inapplicable. Its objections are overruled.
Seymour Goldstein, Esq., attorney for Seaboard claims a 33 1/3 percent attorney's lien. He should be paid one-third of the amount payable to Seaboard's assignee out of the fund, without prejudice to any further claim he may have against Seaboard or its assignee.
Claim No. 12 of Bethlehem Steel Company for $800 was disallowed by the Special Master.
The claimant submitted evidence of a purchase order received from the contractor, Main Ship Repair Corporation, also of an entry in the contractor's accounts payable ledger, reflecting receipt of claimant's invoice.
The Special Master rejected the claim upon the ground that the claimant produced no evidence of delivery of the material.
The claimant objected to the disallowance, contending that no issue was raised as to delivery and that the documentary proof submitted shifted the burden of proof of non-delivery to the contractor.
Claim No. 34 of Dunham-Bush for $250 was likewise disallowed by the Special Master upon the grounds of no proof of delivery, value, agreed price nor of an order for the merchandise other than the invoice.
The claimant asserts that it submitted sufficient evidence to support the claim, i. e., the claimant's invoice, reflecting delivery of the goods to the contractor, and the contractor's accounts payable ledger, containing an entry, indicating the posting of the aforesaid invoice.
The objections of claimants, Bethlehem Steel Company and Dunham-Bush are overruled.
The Special Master's report is confirmed excepting as hereinabove indicated.
Submit judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510841/ | 64 F.2d 506 (1933)
W. H. HILL CO.
v.
COMMISSIONER OF INTERNAL REVENUE.
No. 6191.
Circuit Court of Appeals, Sixth Circuit.
April 10, 1933.
Robert P. Smith, of Washington, D. C. (William Rolston Brown, of Detroit, Mich., and Arthur H. Deibert and William Ristig, both of Washington, D. C., on the brief), for petitioner.
William Cutler Thompson, of Washington, D. C. (G. A. Youngquist, Sewall Key, Norman D. Keller, C. M. Charest, and John D. Foley, all of Washington, D. C., on the brief), for respondent.
*507 Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.
HICKENLOOPER, Circuit Judge.
During the years 1917, 1918, and 1919, the W. H. Hill Company kept its books upon a fiscal year basis, but for each of these years it filed its returns for income and excess profits taxes upon a calendar year basis. For the year 1920, the return was filed for the fiscal year beginning April 1, 1920, and ending March 31, 1921, so that there was a period of three months (January 1, 1920, to March 31, 1920) for which no return was filed. While the return for 1920 was being prepared an audit was made on behalf of the Commissioner of Internal Revenue, and the attention of the company was called both to the fact that no return covered the interim period above mentioned and to the fact that the prior returns should have been made on the fiscal year basis. Returns were accordingly prepared, inter alia, for the fiscal years ending March 31, 1919, and March 31, 1920, which returns were delivered to the internal revenue agent making the audit, and by him were delivered to the internal revenue agent in charge, at Detroit, under date of July 16, 1921. This procedure was adopted at the suggestion of the examining agent who said he "would attend to the filing."
No official action seems to have been taken upon these new returns until January 25, 1924, when a jeopardy assessment was made for the fiscal year ending March 31, 1919. In his notice of this assessment the commissioner said that in view of the fact that a request for relief under the provisions of section 210, Revenue Act of 1917 (40 Stat. 307), or sections 327, 328, Revenue Act of 1918 (40 Stat. 1093), had been made, and the further fact "that any overassessments found due by reason of the application of the above provisions may be jeopardized by the tolling [running] of the statute of limitations unless a formal claim is filed, it is deemed expedient by this office that the above tax be assessed immediately * * * and that a claim be filed by you to protect your interests in the matter." Thereupon a claim for abatement was filed for the net amount of the deficiency assessment, the amounts theretofore paid on the calendar year basis having been deducted, but no action was taken upon the return for the year ending March 31, 1920, except that, seemingly, an application for special assessment under sections 327, 328 of the Revenue Act of 1918 was also filed for the latter year.
On January 11, 1926, this request for special assessment was denied and the petitioner protested against such denial under date of February 6, 1926. Again delay ensued, no action being taken until August 25, 1926, when the commissioner reversed his former ruling, allowed the request, and, upon the data contained in the several returns and the report of the audit, found an overassessment of $27,867.60 for the year ending March 31, 1919, and a deficiency of $63,679.57 for the year ending March 31, 1920. The claim for abatement already pending was therefore allowed for the amount of the overassessment, and denied as to the balance, leaving $3,392.87 still due under the assessment of January 25, 1924, which amount is not here involved.
Petitioner appealed to the Board of Tax Appeals as to the assessment for the year ending March 31, 1920, claiming that the return for that year was filed, within the intent of the act, on July 16, 1921, when it was delivered to the representative of the commissioner conducting the audit, and by him delivered to the internal revenue agent in charge, and that the statute of limitations had thus run against any deficiency assessment or the collection of any further tax. It is conceded by the government that the statute had run if the returns are to be regarded as "filed" on the date above mentioned; and it is conceded by the petitioner that its contention is without merit unless the delivery of the returns to the revenue agents was sufficient compliance with the act to start the running of the statute. This is the principal question involved. The Board of Tax Appeals held against petitioner and the present petition to review followed.
It may be conceded for the purposes of this case that the returns of July, 1921, were promptly forwarded to the commissioner, and even that the commissioner had the power to assess the tax where the taxpayer had filed no return. Rev. Stat. § 3176 (26 USCA § 97); Revenue Act 1918, § 250 (c), 40 Stat. 1083. But there seems to us to be a radical difference between lodging a paper, designated a return, with the commissioner, and filing the same paper with the collector. In the first case no tax is assessed and no payment is required until the commissioner shall have acted on the record before him. In the other, the amount of the tax is immediately entered upon the appropriate list and collection is made in due course unless a claim for abatement is filed which will suspend the running of the statute. Here the law required that returns be filed with the collector. This was obviously for the purpose of facilitating the prompt and orderly assessment and collection of taxes. At best the internal *508 revenue agent was but the agent of the taxpayer for the purpose of filing the returns, and the situation is no different than it would have been had the taxpayer itself delivered the returns to the commissioner.
In Lucas v. Pilliod Lumber Co., 281 U.S. 245, 50 S. Ct. 297, 74 L. Ed. 829, 67 A. L. R. 1350, it was held that the delivery of an unverified return to the collector did not start the running of the statute of limitations, that "no officer had power to substitute something else for the thing specified," and that "meticulous compliance by the taxpayer with all named conditions" was necessary to secure the benefit of the limitation. Compare, also, Florsheim Bros. Drygoods Co. v. United States, 280 U.S. 453, 50 S. Ct. 215, 74 L. Ed. 542. If the filing of a return to which the verification was inadvertently omitted, but upon which the tax was in fact assessed, is insufficient to start the running of the statute, we cannot conclude that lodging a return with the commissioner, upon which return no tax was then assessed, was that meticulous compliance with the act which was necessary to start the running of such statute.
The present case is not one merely of an inaccurate or erroneous return. Cf. United States v. Mabel Elevator Co., 17 F.(2d) 109 (D. C. Minn.). Nor is it a case, strictly speaking, of a deficiency assessment upon audit of returns properly filed. Until the return for the fiscal year ending March 31, 1920, was duly filed there was not only no return covering that fiscal year, but no return whatever for the three months interim between January 1 and March 31, 1920. In Paso Robles Mercantile Co. v. Commissioner, 33 F.(2d) 653 (C. C. A. 9), there may be an intimation that where the taxpayer's books are kept on a fiscal year basis, but returns are made upon the calendar year basis, the statute will begin to run whenever returns have been filed which actually cover the entire fiscal period, for it then becomes the duty of the commissioner to make the readjustments; but even this principle, if it be sound, does not help the petitioner in the present case. As we have said, it is conceded by the petitioner that the statute has not run unless the returns which were delivered to the internal revenue agent are to be regarded as "filed"; and we cannot so regard them.
It is also contended by the petitioner that in view of the fact that nine months of the calendar year of 1919 are included in the fiscal year ending March 31, 1920, the taxes paid in 1920 for the calendar year 1919 should be applied, and, as we understand the contention, could be applied, only to the payment of taxes found due for the fiscal year ending March 31, 1920. The contention is without merit. The petitioner has received credit upon the tax assessed for the fiscal year ending March 31, 1919, for all payments made during the calendar years 1919 and 1920, and cannot complain. This is consistent with the procedure recognized in American Hide & Leather Co. v. United States, 284 U.S. 343, 52 S. Ct. 154, 76 L. Ed. 331.
Lastly, it is urged that the Board of Tax Appeals erred in refusing to allow to petitioner an increase of at least $500,000 in invested capital for the year ending March 31, 1920. During the early years of its corporate life (1895 to 1913) the petitioner had spent approximately $750,000 in house-to-house sample advertising, these expenditures being charged to expense. In 1914 this method of advertising was discontinued and publicity was secured through newspaper and magazine advertising. In 1913 the company received an offer from responsible purchasers of $500,000 for the trade-name "Hill's Cascara Bromide Quinine" and the good will established by the sample advertising. It is therefore contended that this offer definitely establishes the value of such good will and that petitioner should be permitted to set up an earned surplus of at least that amount.
It is apparent that the only theory upon which this item might be included in invested capital is that it was definitely paid for out of earnings, that is, that it forms a part of the earned surplus which, after being earned, was invested from time to time in the purchase of good will and the establishment of a valuable trade-name. Where there has been an actual purchase from another of patents, trade-names, good will, or other intangibles, paid for from surplus, of course no question can arise as to the fact of investment or the amount to be included in the invested capital; but where such an asset is built up with the business itself it is almost always impossible to allocate any item of the expense of promotion and of carrying on the business to the purchase of the good will which has been thus gradually established. In order to include such value there must have been, in effect, a purchase [Cf. La Belle Iron Works v. United States, 256 U.S. 377, 388, 41 S. Ct. 528, 65 L. Ed. 998; Landesman-Hirschheimer Co. v. Commissioner, 44 F.(2d) 521, 523 (C. C. A. 6)], or a definite appropriation from earnings already accumulated for the specific purpose; for it is the cost to the corporation which is controlling, and unless the line of demarcation can be drawn between expense of conducting the *509 business, including normal sales promotion, and the purchase price of an established asset, the value of the intangible property may not be included. The burden was upon the petitioner to clearly establish this [Morris Coal Co. v. Commissioner, 48 F.(2d) 810 (C. C. A. 6)], and a failure to do so is fatal. Richmond Hosiery Mills v. Commissioner, 29 F.(2d) 262 (C. C. A. 5); Three-in-One Oil Co. v. United States, 35 F.(2d) 987 (Ct. Cl.). Compare, Concrete Engineering Co. v. Commissioner, 58 F.(2d) 566 (C. C. A. 8).
In the present case we are of the opinion that no distinction can be drawn between house-to-house sample advertising and any other type of advertising. It is not shown that the value of the good will arose from the advertising alone, or that such advertising was more intensive or more costly than was normal and necessary for the continuance of the business. The value of the good will may have been in substantial part due to the inherent merit of the product, and the advertising but a normal expense of placing it before the public.
Upon the authorities cited and for the reasons above stated the decision of the Board of Tax Appeals must be affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510850/ | 856 S.W.2d 519 (1993)
Velma McCASKELL, Appellant,
v.
The METHODIST HOSPITAL, Appellee.
No. 01-91-01050-CV.
Court of Appeals of Texas, Houston (1st Dist.).
May 13, 1993.
Forrest Jackson, Houston, for appellant.
Thomas H. Wilson, Robert W. Horton, Vinson & Elkins, L.L.P., Houston, for appellee.
Before WILSON, SAM BASS and DUNN, JJ.
OPINION
WILSON, Justice.
The appellant, Velma McCaskell, appeals from the trial court's dismissal of her suit against the appellee, the Methodist Hospital ("Methodist"). We affirm.
*520 Fact Summary
On December 2, 1985, McCaskell filed suit against Methodist and Mary M. Edwards,[1] alleging misconduct arising out of the termination of her employment at the hospital. In her second amended petition, filed on November 28, 1990, McCaskell alleged she had been subjected to libel, slander, racial discrimination, invasion of privacy, breach of good faith and fair dealing, infliction of mental anguish, and wrongful discharge by Methodist. The trial court granted summary judgment in favor of Methodist on McCaskell's defamation and racial discrimination claims as stated in her first petition.
On February 22, 1991, Methodist filed special exceptions to McCaskell's second amended petition, which were set for submission to the trial court on March 4. McCaskell did not respond to the special exceptions. On April 10, the trial court sustained the exceptions, and ordered McCaskell to file an amended pleading in accordance with the special exceptions within 21 days of receipt of its order.
On May 21, 1991, Methodist filed a motion to strike McCaskell's pleadings and dismiss the case. On May 30, a month after the deadline, McCaskell filed her third amended petition.[2] On July 9, the trial court granted Methodist's motion to strike McCaskell's third amended petition and dismissed the suit. Specifically, the court found that McCaskell's amendments in her third amended petition did not overcome Methodist's special exceptions, and struck the objectionable paragraphs. The court further found that the remaining portions of the third amended petition did not state a cause of action and dismissed the lawsuit. McCaskell now brings this appeal.
1. McCaskell's arguments
McCaskell's appellate brief does not specify points of error, as required by TEX. R.APP.P. 74(d), but instead proceeds directly into multiple arguments. We understand McCaskell to complain that the trial court erred in sustaining the special exceptions, in striking the paragraphs that were not amended, and in dismissing her suit.
McCaskell further contends the trial court erred in sustaining Methodist's special exceptions because the special exceptions were vague. Many of the exceptions were vague. We will focus on one that was not. Methodist excepted to paragraphs 16, 27, 31, 34, 35, and the prayer of McCaskell's petition because they did not state specific maximum damages.[3] In each of those paragraphs, McCaskell pled for damages "in excess" of certain specified amounts: paragraph 16$160,000; paragraph 27$500,000; paragraph 31 $100,000; paragraph 34$100,000; paragraph 35$100,000; and the prayerattorney fees "not less than" $160,000.
Under Tex.R.Civ.P. 47, Methodist was entitled to have the plaintiff state the maximum amount of damages she was seeking. See Phillips v. Vinson Supply Co., 581 S.W.2d 789, 791 (Tex.Civ.App.-Houston [14th Dist.] 1979, no writ). Rule 47 provides that, "upon special exception the court shall require the pleader to amend so as to specify the maximum amount claimed."
In her third amended petition, McCaskell did not replead in compliance with the order on the special exceptions. The allegations of damages in the third amended petition all asked for money damages "in excess" of certain amounts.
Once the trial court found that McCaskell had failed and refused to limit damages to a maximum amount, the trial court had the authority to strike the offending paragraphs. The offending paragraphs in the third amended petition were *521 paragraphs 16, 28, 32, 35, 36, and the prayer for relief. Once the court struck all the paragraphs that related to damages, McCaskell was left with a petition that did not state a claim for damages. The trial court was then authorized to dismiss the suit.[4]
McCaskell cites Geochem Laboratories, Inc. v. Brown & Ruth Laboratories, Inc., 689 S.W.2d 288, 288-89 (Tex.App.-Houston [1st Dist.] 1985, writ ref'd n.r.e.), as authority for her claim that the trial court erred in dismissing her case. In Geochem, the plaintiff amended its petition three times, and the defendants filed special exceptions after each of the three amendments. Following a hearing on the defendant's exceptions to the plaintiff's third amended petition, the trial court sustained the exceptions and dismissed the suit. Geochem, 689 S.W.2d at 289. This Court found the dismissal improper because the trial court did not give the plaintiff an opportunity to amend its petition again. Id. at 290.
In the present case, Methodist filed special exceptions to McCaskell's second amended petition. The trial court granted the special exceptions and gave McCaskell 21 days to amend her pleadings. McCaskell amended her pleadings one month after the deadline by filing her third amended petition. Although it was not required to do so, the trial court considered McCaskell's untimely third amended petition, found it did not cure the defects complained of in the seconded amended petition, and dismissed the law suit. Unlike Geochem, Methodist did not file additional special exceptions to McCaskell's third amended petition. McCaskell was provided with an opportunity to amend her second amended petition, and did in fact amend it, after the trial court sustained the sole special exceptions filed by Methodist. McCaskell cites no authority for the proposition that a pleader is entitled to unlimited opportunities to amend a petition after special exceptions are sustained.
McCaskell also contends the trial court erred in dismissing the suit after she filed a fourth amended petition. McCaskell did not file either her third or fourth amended petitions within the time limit required by the trial court's order. McCaskell does not contend that she did not receive notice of this order. A trial court has discretion to permit or deny late filings. Jones v. Houston Materials Co., 477 S.W.2d 694, 696 (Tex.App.-Houston [14th Dist.] 1972, no writ). Nothing in this record shows that the trial court had notice of the fourth amended petition.[5]
We find the trial court did not abuse its discretion in dismissing McCaskell's suit.
2. Crosspoints
In two crosspoints, Methodist contends the appeal should be dismissed for want of jurisdiction because McCaskell did not timely file her bond or the record for this appeal.
The timely filing of bond is a jurisdictional prerequisite. Butts v. Capitol City Nursing Home, Inc., 705 S.W.2d 696, 697 (Tex.1986). An appeal bond in a civil case shall be filed with the clerk within 30 days after the judgment is signed, or within 90 days after the judgment is signed if a timely motion for new trial has been filed by any party. Tex.R.App.P. 41(a)(1). A motion to reinstate has the same effect on appellate deadlines as a motion for new trial. Butts, 705 S.W.2d at 698. The trial court signed the judgment on July 9, 1991. McCaskell filed a motion to reinstate on July 26, 1991. McCaskell filed her appeal bond on September 9, 1991, well within 90 days of the trial court's entry of judgment.
The transcript and statement of facts must be filed within 120 days of the signing of the judgment when a timely motion for new trial has been filed. Tex.R.App.P. 54(a). McCaskell filed the transcript on *522 November 6, 1991. This date is within the statutory time period.
Methodist's crosspoints are overruled. The judgment of the trial court is affirmed.
NOTES
[1] Edwards is not a party to this appeal.
[2] McCaskell filed a fourth amended petition on July 8, the same day the trial court heard Methodist's motion to strike and dismiss. The trial court's order addresses the third amended petition, and does not mention the fourth amended petition. We cannot determine from this record if the trial court was aware of the fourth amended petition.
[3] Although Methodist also excepted to paragraph 44, that paragraph does not contain any statement of damages.
[4] We do not think it is reasonable for a litigant to expect the trial court to edit his pleadings for him.
[5] We have reviewed McCaskell's fourth amended petition, even though we are not obligated to do so, and we found it did not cure the defects complained of in Methodist's special exceptions to McCaskell's second amended petition. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510885/ | 266 S.W.2d 924 (1954)
SEWELL et al.
v.
SEWELL et al.
No. 6728.
Court of Civil Appeals of Texas, Texarkana.
March 18, 1954.
Rehearing Denied April 8, 1954
Morris Rolston, Ward & Benson, Mt. Pleasant, for appellants.
Boyet Stevens, Daingerfield, Florence & Florence, Gilmer, for appellees.
HALL, Chief Justice.
Although this suit was instituted by appellees as one in trespass to try title to a certain tract of land located in Morris County, it resolved itself into an action contesting the will of G. W. Sewell, deceased. Omitting the formal portions of the will not material here, it reads as follows:
"Second: To M. L. Sewell, my wife, I give and bequeath all the property of every kind that I may possess at the time of my death, to my wife, M. L. Sewell. Third: I will and want my children and their heirs to have as follows; to-wit: Mamie Littlefield, $50.00 Fifty Dollars for herself and her heirs Jim Sewell, $50.00 Fifty Dollars for his self and his heirs Bulah Goolsby, $50.00 Fifty Dollars for herself and her heirs Mannie Brantley. $50.00 Fifty Dollars for herself and her heirs Mat Gay $25.00 Twenty Five Dollars for herself and her heirs Estellar Sewell and Cassie Sewell, I want them to have rest of all the property of any and every kind whatever it may be, I will and bequeath to them the said Estellar Sewell and Cassie Sewell and their heirs if they have any; Fourth: I hereby nominate and appoint Estellar Sewell, and Cassie Sewell the sole executors or either of them at the death of either of them, of this my last will and testament and do hereby direct that no bond be required of them or either of them as the case may be, and that no shall be had in the probate court under this will, other than the filing of an inventory and appraisement and a list of claims as required by law for this is my last will and testament and I want all parties interested in this matter to abide by this." The facts show that M. L. Sewell, the wife of G. W. Sewell, the beneficiary listed in paragraph *925 2 of the will, died before G. W. Sewell and the bequest lapsed.
In construing the above will the trial court concluded that the last part of the third paragraph reading: "Estellar Sewell and Cassie Sewell, I want them to have the rest of all the property of any and every kind whatever it may be, I will and bequeath to them the said Estellar Sewell and Cassie Sewell and their heirs if they have any" to be a general residuary clause, and therefore the lapsed devise to the wife was held by the trial court to fall into said general residuary clause.
The above holding forms the basis for the only point brought forward by appellants. Many rules for the construction of wills are listed in the decisions of the courts. In our opinion the first and controlling rule is that the intention of the testator as shown by the terms of the will must be followed in construing same, and secondly, unless a contrary intention is clearly expressed or necessarily implied, it will be presumed, from the mere fact of making will, that testator intended to dispose of his entire estate, and did not intend to die intestate as to whole or any part of his property. Kuehn v. Bremer, Tex. Civ.App., 132 S.W.2d 295, 298 writ ref. It seems clear to us, first, that G. W. Sewell intended to dispose of all of his property by his will. In fact he did that very thing. Mrs. Sewell, wife of G. W. Sewell, having predeceased her husband, the bequest to her lapsed and there was only one place for it to fall and that was in the residuary clause. Such a construction would result in the disposition by the will of all of the property of G. W. Sewell and none of it to be disposed of by the law of descent and distribution. (Italics ours).
In discussing a situation very similar to the one here involved the Waco Court of Civil Appeals in Kuehn v. Bremer, supra, has this to say: "The language employed evinces a general intent on the part of August Spitzer to dispose of all of his estate, real and personal, by his will after death, as we have heretofore seen. It likewise indicates that he, in making the will, contemplated the likelihood of his wife predeceasing him, and that he, with that contingency in mind, inserted section 5 to carry out his scheme for the distribution of his entire estate. The language employed further indicates that he, while contemplating the probability of his wife predeceasing him, made such bequests to his next of kin as he desired them to have out of his estate. Therefore, we are of the opinion that August Spitzer used the words `remainder' and `including' in section 5 of his will advisedly and in their common and broader sense and for the purpose of manifesting his intent to rest in William A. Bremer on his death, in the event his wife departed this life before him, all of his estate, both real and personal, remaining after payment of his debts, expenses incident to last sickness, burial and bequests to church and designated next of kin, as set out in sections 3 and 4." Appellants rely very strongly on the case of Bittner v. Bittner, Tex.Com.App., 45 S.W.2d 148, 152, to support their contention of error by the trial court in its construction of the will here under consideration. That case sets out many of the rules enumerated in Kuehn v. Bremer, supra, and cites numerous other authorities substantiating them, and concludes with the following assertion: "The trial court, after hearing the testimony, held that the testatrix did not intend that the property bequeathed to Ida Bittner should become a part of the residuum of her estate and pass to the persons described in paragraph 10 of the will; but that it became a lapsed devise because of the death of Ida Bittner prior to the death of testatrix and therefore became a part of her estate as property undisposed of by her will, and as to which she died intestate * * *." The same authority states further: "The rule is recognized and is supported by the weight of authorities that in the absence of a statute upon this question under a will containing a general residuary clause, a bequest of property, which, valid when *926 made, fails for any reason, such as the death of the legatee or devisee prior to the death of the testator and thereby becomes a lapsed legacy or devise, falls into the residuary clause and passes to the residuary legatees or devisees, unless a different intention is expressed in the will." (Italics ours.) There is no such "different intention" expressed or implied in the will here involved. In Alexander on Wills, Vol. 2, sec. 669, p. 997, it is said: "A residuary devise or bequest requires no particular form of words, any expression is sufficient if from it the testator's intention may be gathered that a designated person shall take the surplus of his estate. Such words as `rest,' `residue,' `remainder,' are not indispensable. It is a well settled rule that a testator who makes a will intends thereby to dispose of his entire estate, and even partial intestacy is not favored." In the same Work, at page 1126, sec. 777, it is said: "Accordingly, the modern rule may be stated to be that where there is a residuary clause, unqualified and absolutely general in its terms, not only lapsed bequests of personalty, but lapsed devises of realty also, will sink into the residue, and neither the next of kin nor the heir at law will take any interest therein, unless there be expressions in the will manifesting a contrary intention."
Since it clearly appears that the testator, G. W. Sewell, intended to dispose of all of his property by his will and not to die intestate as to any portion thereof, we think the trial court was correct in concluding that the lapsed devise fell into the general residuary clause. We have examined the decisions cited by appellant but we do not think they are controlling here.
It is our opinion that this case is ruled by Kuehn v. Bremer, Tex.Civ.App., 132 S.W.2d 295, w/r.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510890/ | 172 Conn. 54 (1976)
MICHAEL SHEA
v.
SUZANNE TOUSIGNANT ET AL.
Supreme Court of Connecticut.
Argued October 12, 1976.
Decision released December 7, 1976.
HOUSE, C. J., LOISELLE, BOGDANSKI, LONGO and BARBER, Js.
*55 Donald W. O'Brien, for the appellants (defendants).
William F. Gallagher, with whom, on the brief, was John P. McKeon, for the appellee (plaintiff).
LONGO, J.
The plaintiff, Michael Shea, brought this action to recover damages for personal injuries and other losses he sustained on May 15, 1970, as a result of a collision between the automobile he was operating and an automobile owned by the defendant Noe Tousignant and operated by his daughter, the other defendant, Suzanne Tousignant. The plaintiff alleged in his complaint that the named defendant negligently drove the automobile which she was operating in a northerly direction into the southbound lane of route 2 directly into the plaintiff's vehicle which was proceeding in the opposite direction. The plaintiff further alleged that the defendant had consumed alcoholic beverages and was unfit to operate her car at the time of the collision. The defendants pleaded the plaintiff's contributory negligence as a special defense. Following a trial, the jury awarded the plaintiff $36,600 as damages.
The defendants have appealed to this court from the judgment rendered upon the verdict and claim error in the court's denial of their motion to set *56 the verdict aside, in the court's charge to the jury, and in several rulings on the admissibility of evidence.
The defendants first claim that the trial court erred in refusing to charge the jury with respect to the effect on liability of the named defendant's having either fallen asleep or become unconscious, contending that this was an issue which should have been submitted to the jury as the trier of fact. See Bushnell v. Bushnell, 103 Conn. 583, 131 A. 432.
The named defendant testified that before the accident she had been in an East Hartford restaurant for about four hours during which time she had consumed two beers. She testified that she did not know how the accident happened, stating that she either passed out or fell asleep before the accident, and that before she lost consciousness she did not in any way feel sleepy, nor did she feel herself dozing, nor feel her eyes closing. She testified further that she felt no effect from the two beers she had consumed while in the restaurant, and that the beers had not affected her driving ability. She also stated she was not feeling well when she left the restaurant. The defendants requested that the court charge the jury as follows: "The defendant Suzanne Tousignant has testified in this case that prior to the accident she had lost consciousness, fainted or fallen asleep. I instruct you that under the law of this state it is not negligent merely to fall asleep, faint or suddenly lose consciousness, and thereby lose control of a car. For you to find that the defendant was negligent by reason of falling asleep, fainting, or losing consciousness, you must first find that she had some advance notice that she was going to fall asleep, faint or lapse into unconsciousness. *57 If you do not find that she had such advance notice, then you may not find that her falling asleep, fainting, or losing consciousness was negligence. Likewise, if you so find that her falling asleep or losing consciousness was without any advance notice, then you may not find her negligent by reason of failing to keep a reasonable and proper lookout for other vehicles, or failing to keep her vehicle under reasonable and proper control, or by reason of driving in the wrong direction on the highway, or by operating her vehicle in such a manner as to endanger life, limb and property." The court refused to charge as requested. It is the defendants' contention that by failing to give the requested charge, the court left the jury totally without guidance as to the effect of becoming unconscious or falling asleep. In the leading case of Bushnell v. Bushnell, supra, where the defendant operator momentarily fell asleep, causing the automobile to run off the highway and to strike a tree, resulting in injuries to a passenger, the trial court submitted to the jury the question whether, in view of the circumstances preceding and surrounding the accident, the fact that the defendant momentarily fell asleep constituted negligence. This court stated (p. 590): "Certainly in all reason he who, stricken by paralysis or seized by an epileptic fit, still continues with his hands upon the wheel of the automobile he was driving, and, unconscious, so directs it as to cause its collision with another, cannot be held negligent for the way in which he controlled it; and no more can he who exercises a like direction after he has been overtaken by sleep. In such a case, the question must be, was the defendant negligent in permitting himself to fall asleep." See annot., 28 A.L.R. 2d 44, § 22, and cases collected *58 therein. Similar reasoning applies when a driver momentarily lapses into unconsciousness. "Negligence is not to be imputed to the driver of an automobile merely because he suddenly blacks out, faints, or suffers a sudden attack, losing consciousness or control of the car, when he is without premonition or warning of his condition." 8 Am. Jur.2d 245, Automobiles and Highway Traffic, § 693 n. 17.
We stated further in Bushnell v. Bushnell, supra, 592, that in the case of the ordinary driver "the mere fact of his going to sleep while driving is a proper basis for an inference of negligence sufficient to make out a prima facie case, and sufficient for a recovery, if no circumstances tending to excuse or justify his conduct are proven." By the trial court's refusal to charge the jury on the effect of unforeseeably falling asleep or losing consciousness, the jury were left uninstructed on this issue.
Because we find merit in the defendants' first assignment of error, we need not treat all of the defendants' claims in detail, but since the case must be remanded for a new trial, it is appropriate to discuss one other issue relating to the court's charge to the jury which may be significant at the second trial. Thomas v. Commerford, 168 Conn. 64, 70, 357 A.2d 476.
The defendants assigned error in the failure of the court adequately to charge the jury with respect to the inference which might be drawn from the plaintiff's failure to produce a witness. See Secondino v. New Haven Gas Co., 147 Conn. 672, 165 A.2d 598. There was evidence that the plaintiff had been referred by two of his attending physicians to John X. R. Basile, a neurosurgeon, for examination of *59 his back. Dr. Basile, after examination, performed a myelogram to rule out a discogenic disorder, and the hospital record reflected a consultation report by Basile before the myelogram and a visit to the plaintiff after the myelogram. There was sufficient evidence from which the jury could have concluded that Dr. Basile was a witness whom the plaintiff would naturally have produced and there was ample evidence that that witness was available to testify. Secondino v. New Haven Gas Co., supra.
The defendants contend that the trial court made no effort to relate its instruction to the facts of the case, or even to identify the person about whom the charge was given.[1] Although the charge given by the court was legally correct, it was given in the abstract and was insufficient fully to apprise the jury of the identity of the witness who was the subject of the charge. "The purpose of a charge is to call the attention of the members of the jury, unfamiliar with legal distinctions, to whatever is *60 necessary and proper to guide them to a right decision in a particular case. It should be a succinct statement of the legal principles involved, with a sufficient reference to the claims of the parties so that the jury can appreciate the bearing of those claims on the facts." Phoenix Mutual Life Ins. Co. v. Brenckman, 148 Conn. 391, 397, 171 A.2d 194; Maltbie, Conn. App. Proc. § 74. The charge gave no reference to the evidence or to the identity of the particular missing witness to whom the instruction was meant to apply. See Berniere v. Kripps, 157 Conn. 356, 361, 254 A.2d 496. "`While the degree to which reference to the evidence may be called for lies largely in the discretion of the court; Corrievau v. Associated Realty Corporation, 122 Conn. 253, 256, 188 A. 436; an allusion to it is required sufficient to furnish a practical guide to the jury as to how the stated law is to be applied to the evidence before them.' Schiesel v. S. Z. Poli Realty Co., 108 Conn. 115, 124, 142 A. 812; Laukaitis v. Klikna, 104 Conn. 355, 360, 132 A. 913." Vita v. McLaughlin, 158 Conn. 75, 77, 255 A.2d 848.
There is error, the judgment is set aside and a new trial is ordered.
In this opinion the other judges concurred.
NOTES
[1] The court charged the jury as follows: "Now, I have been asked to recite the law on a party's failure to call a witness in the case. The law in regard to that is as follows: Where a party fails to call to the stand a witness who is within his power to produce and who would naturally have been produced by him, you are entitlednot required, but you are entitledto infer that had that person testified, the testimony would have been unfavorable to the party failing to call him, and you are to consider that fact in arriving at your decision. However, there are two requirements before you apply that rule. Ask yourself was the witness available. And, two, was he a witness whom the party would naturally produce? A witness who would naturally be produced by a party is one who is known to that party and who, by reason of his relationship to that party, or to the issue or both, could reasonably be expected to have peculiar or superior information material to the case which, if favorable, the party would produce. The failure of a party to call as a witness a person who is available to both parties and who does not stand in such a relationship to the party in question or to the issues so that the party would naturally be expected to produce him affords no basis for an unfavorable inference." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510978/ | 266 S.W.2d 91 (1954)
PATTERSON
v.
PATTERSON.
Court of Appeals of Kentucky.
March 19, 1954.
Ben B. Morris, Wickliffe, for appellant.
M. C. Anderson, Wickliffe, for appellee.
DUNCAN, Justice.
This appeal is from the reviewable portion of a judgment which awards the *92 appellee an absolute divorce, restoration of property in the amount of $2,050, lump sum alimony of $4,500, and $60 per month for the maintenance of two children whose custody was awarded to appellee. The judgment also makes an allowance of $500 to appellee's attorney and taxes the fee as cost against appellant.
The suit was filed by appellee on June 29, 1951, seeking a divorce and incidental relief on the ground of cruel and inhuman treatment. Appellant's answer consisted of a denial of appellee's ground and a counterclaim for divorce upon the same ground. An amended counterclaim, filed after the testimony in chief had been concluded, charged appellee with lewd and lascivious conduct and adultery.
The parties to this action were married on May 31, 1932, and except for two brief separations, resided in or near the city of Wickliffe until their final separation on June 24, 1951. Four children, two boys and two girls, ranging in ages from eighteen to nine years, were born as a result of the marriage. In fixing custody, the wishes of the children were respected and appellant was given custody of the boys and appellee of the girls. On this feature of the case, the parties are, apparently, satisfied with the arrangement.
It is unnecessary to relate the series of incidents which are relied upon as constituting cruel and inhuman treatment. There is some evidence of physical mistreatment by appellant, but the occasions referred to are infrequent and remote in point of time. Prior to the separation, appellant's cruelty, if any, seems to have been more mental than physical, consisting principally of acts of omission and commission revealing some lack of a proper consideration for his wife's happiness. If the evidence was restricted to his conduct before the separation, it would be difficult to justify the Chancellor's conclusion that appellee had sustained her ground of divorce. However, appellant's conduct since the separation is such as to amply sustain appellee's allegation of cruel and inhuman treatment.
After testimony in chief on the original grounds had been completed, the appellant tendered and, upon his motion, was permitted to file an amended counterclaim charging appellee with lewd and lascivious conduct and an act of adultery alleged to have been committed some eighteen years before the separation. Appellant's evidence in support of these charges indicates that they are completely unfounded and could not have been made in good faith. This Court is committed to the view that a baseless and unfounded charge of adultery against the wife by the husband is such cruel and inhuman treatment in and of itself as to sustain the wife's action for divorce on that ground. Logan v. Logan, 171 Ky. 115, 188 S.W. 301; Johnson v. Johnson, 183 Ky. 421, 209 S.W. 385; Williamson v. Williamson, 243 Ky. 544, 49 S.W.2d 337. This groundless allegation completely supports the judgment of divorce and the Chancellor was, therefore, justified in awarding alimony to appellee. This leaves for our consideration the question of whether the amounts awarded by way of alimony, maintenance, and restoration of property are excessive.
The Chancellor found that the total value of appellant's property was $13,650, consisting in the main of a farm, livestock, farm equipment, and town lots. The value placed upon the respective items of property seems to have been conservative, and there is little controversy concerning the fact that this figure represents a fair minimum valuation. Much of the property now owned by appellant was accumulated as a result of the operation and sale of an independent telephone system. The telephone system was purchased from appellant's father on October 1, 1942, for the sum of $5,000, payable at the rate of $50 per month. This business was operated profitably for the ensuing seven years, during which time the appellee kept all books, operated the switchboard, and trained relief operators. The property was finally sold on October 1, 1949, for $10,000, payable at the rate of $300 per month. When this suit was filed, approximately $4,000 of this amount remained unpaid.
*93 We do not think appellee's services in connection with the operation of the telephone system may properly be classified as domestic within the rule discussed in Johnson v. Johnson, Ky., 255 S.W.2d 610; Eckhoff v. Eckhoff, Ky., 247 S.W.2d 374; Fain v. Minge, 241 Ky. 131, 43 S.W.2d 504, and the other cases cited in those opinions. We think services of the type rendered by appellee constitute a valuable consideration within the meaning of Section 425 of the Civil Code of Practice (now KRS 403.065) which would justify the court in ordering a restoration. The amount of $2,050 adjudged on this item is very modest under the circumstances.
On the question of alimony, no hard and fast rule has ever been evolved for measuring the amount which should be awarded in each case. In fixing the amount of alimony, the elements to be considered are: the size of the husband's estate, his income and earning capacity, the age and ability to labor of both the husband and wife, the principal cause of the divorce and the relative responsibility of the parties, and whether or not the wife has aided in the accumulation of the husband's estate. Jones v. Jones, 261 Ky. 647, 88 S.W.2d 673; Lewis v. Lewis, 204 Ky. 5, 263 S.W. 366; Watkins v. Watkins, 202 Ky. 141, 259 S.W. 20. Upon a consideration of all the facts, we are unable to say that the Chancellor abused his discretion in the sum which was fixed as alimony in this case. The award, although generous, is not so unreasonable as to justify our reducing it.
The appellant does not complain in his brief concerning the sum which he is required to pay for the maintenance of his daughters. The question concerning the allowance to appellee's attorney is not properly before us. The attorney was not made a party to the appeal, and we are without jurisdiction to consider the reasonableness of his fee. King v. King, 214 Ky. 171, 283 S.W. 73; Arms v. Arms, 246 Ky. 827, 56 S.W.2d 536.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511000/ | 258 F. Supp. 735 (1966)
UNITED MEDICAL LABORATORIES, INC., an Oregon corporation, Plaintiff,
v.
COLUMBIA BROADCASTING SYSTEM, INC., a New York corporation, Walter Cronkite, Jay McMullen, Morris Schaeffer, and Victor Buhler, Defendants.
Civ. No. 65-318.
United States District Court D. Oregon.
September 8, 1966.
Rehearing Denied October 4, 1966.
*736 *737 Roland F. Banks, Jr., Mautz, Souther, Spaulding, Kinsey & Williamson, Portland, Or., for plaintiff.
Manley B. Strayer, Cleveland C. Corey, Davies, Biggs, Strayer, Stoel & Boley, Portland, Or., for defendants.
OPINION
KILKENNY, District Judge:
Plaintiff charges the defendants with maliciously publishing false and defamatory statements related to plaintiff by means of radio, television and the press. Substantial special, compensatory and punitive damages are claimed. Previously, the Court quashed the service of process on defendants Morris Schaeffer and Victor Buhler. United Medical Laboratories, Inc. v. Columbia Broadcasting System, Inc., et al., 256 F. Supp. 570 (D.Or.1966).
The cause is before the Court on the motion of the remaining defendants to dismiss.
All of the broadcast material is before the Court and in the course of the hearing on the motion to dismiss, the Court actually viewed the telecasts. The parties have indicated that all relevant and material matters with reference to plaintiff's claim are now before the Court.
Plaintiff is an Oregon corporation operating a clinical testing laboratory. It tests and analyzes biological specimens and samples, which it receives by mail from physicians and pharmaceutical companies throughout the United States. Defendant McMullen is head of the Fact Finding Unit of defendant Columbia Broadcasting System, Inc. (CBS). Shaeffer is head of the Bureau of Laboratories of the New York City Department of Health. Cronkite is the featured news commentator on "CBS Evening News," a nightly television broadcast. Buhler is President of the College of American Pathologists.
Defendants participated in the telecasts "CBS Evening News with Walter Cronkite" on the evenings of June 22nd, 23rd and 24th, 1965, and in the broadcasts of "The World Tonight" on June 22nd and 23rd. Defendants also caused the publication of a news release on June 23rd, describing the disclosures made on the telecast of the night before.
Before the programs and news release were published on June 23rd, plaintiff demanded, by telephone, that CBS retract the alleged implications of statements during the June 22nd programs. CBS took no such action. Later on June 23rd, CBS contacted plaintiff through its affiliate, KOIN-TV, requesting pictures of plaintiff's operations and an interview with its employees, with a view toward publishing these as a part of the June 24th edition of "CBS Evening News." Pictures were taken by KOIN-TV personnel, and an interview with one of plaintiff's employees was recorded. These materials were sent to CBS on June 24th, but did not appear on the June 24th programs, and have not appeared since.
Plaintiff claims that the broadcasts of June 22nd and June 23rd were seen and heard by persons within and without Oregon. These persons, and the persons and organizations who received the news release, are said to have understood the matter therein to refer to plaintiff. Plaintiff claims that its business damage as a result of these publications totals $500,000.00, that it has lost $100,000.00 worth of physicians' accounts, and that *738 it is entitled to exemplary damages in the sum of $500,000.00.
The broadcasts publicized the results of a five-month investigation by Jay McMullen and the CBS News Fact Finding Unit. Under the name of a "cooperating physician" in New York City, letters were sent to 43 mail-order laboratories outside New York State, in 33 cities in 14 states (not including Oregon, as a map displayed on one of the broadcasts showed.) Thirteen of these did not reply; thirteen others, according to McMullen, "said that most of the tests required could not be handled accurately through the mails * * * and suggested that these tests be done locally in New York City." Seventeen, or 39%, sent the equipment and mailing containers requested in the letters, indicating their willingness to conduct one or more of the six routine laboratory experiments described. Specimens were prepared and packaged in the containers and immediately airmailed back. Samples of each specimen were also sent to four control laboratories in New York City. Comparison of the findings formed the basis of the "Special Report." The results, in substance, were as follows:
1. Bacterial specimen Salmonella, Group D: 100% of the mail-order laboratories tested failed to identify it as a Salmonella of any kind. Group D Salmonella includes an organism capable of causing typhoid fever.
2. Prothrombin Time Test how quickly does blood clot?: the control laboratories found that the blood specimen submitted was in a normal range. The mail-order laboratories which reported said that the clotting time was between 50 and 53% below normal.
3. Acid Phosphatase Test control laboratories said the specimen was normal: of the mail-order laboratories tested, 25% said it was abnormal.
4. Blood Sugar found by control laboratories to be abnormally high in blood sugar, an indication of diabetes; 4 mail-order laboratories said it was normal; the reports of 71% of the mail-order laboratories replying varied from the control laboratories' reports by from 20% to 104%.
5. Complete blood count and urinalysis the medical experts agreed that the reports of the mail-order laboratories showed "a disturbing variation" from the reports of the hospital control laboratories.
Of five New York City laboratories subsequently tested, and one of the control laboratories, all failed the "Salmonella Group D" test.
These disclosures were made on the Cronkite broadcast of June 22nd and repeated on "The World Tonight" later that evening. The next evening, both programs were devoted to a single laboratory that had failed the same test, a "hormone assay" on urine, 12 times, and to the unethical practices in which CBS research indicated the laboratory's owners were involved. The third telecast discussed the implications of the findings. The news release of June 23rd summarized the first telecast.
Plaintiff contends that slogans flashed across the television images during the first telecast, stating the percentage of error among the mail-order laboratories tested, did not limit the reference to only those laboratories which participated in the survey, e. g., "Mail Order Laboratories 100% Wrong." The dialogue set forth in the Addenum is representative of the materials and includes all references that conceivably could be construed as relating inferentially to United Medical Laboratories.
CONTENTIONS
I. Were the "references" published clearly limited to parties explicitly identified, or identified as participants in the CBS tests?
On the telecast of June 22nd, Cronkite noted the widespread reliance by doctors on mail-order tests. Giving short shrift to the view that such reliance is often necessary because of the deficiencies of local laboratories, he said that "for some small town doctors the inducement may be partly convenience." (Emphasis supplied.) This, coupled with the dramatic *739 statement that "anyone" can engage in such a business without fear of federal interference, the two statements being sandwiched around a charge that some mail-order laboratories advertise "cut rate service," conveys the impression that the practice may often be neither necessary nor greatly advantageous in the treatment of patients.
Dr. Buhler is then heard to say that results are often inaccurate due to the deterioration of specimens in the mails; McMullen, however, immediatey refers to this as a "doubt," shared by many experts, as to the possibility of accurate testing of certain specimens through the mails.
All of this is immediately clarified as speculation, insofar as it may suggest inferences relating to mail-order laboratories generally, by McMullen's explanation of the CBS investigation. Of 43 laboratories contacted outside New York, 13 replied, saying that the specimens mailed could not be tested accurately by mail. Only 17 labs, less than half of those contacted (excluding the five New York laboratories), attempted to perform the tests.
Despite whatever might have been suggested by the slogans flashed across the screen, the dialogue clearly emphasized the fact that the results being reported related only to the laboratories actually tested. The concluding comments of Cronkite and McMullen referring to the "labs in question" and the "labs tested," may hint at problems inherent in mail-order work, but include the following clear qualification by McMullen: "How typical are these results? We don't know, but a sick patient may get only one chance to find out."
Similarly, McMullen's explanation of the investigation, and his concluding remarks, clarified any possible broad connotations of Calmer's remarks on the radio broadcast of June 22nd. Calmer spoke briefly of "mail-order medicine," then of how far "your doctor" might ship a sample of "your blood," but his remarks were immediately followed by the interview and comment aired earlier on the Cronkite show.
The news release of June 23rd is nothing more than a recitation of the test results, clearly indicating, in context, that the figures quoted related only to the laboratories tested, and were not projected estimates of the probable performance of mail-order laboratories generally. It merely repeats the fact that various authorities "doubted" the ability of such laboratories to perform certain kinds of tests, due to the deterioration of the specimens in the mails.
The telecast of June 23rd includes a summary by Cronkite of the test-results broadcast the night before, showing "widespread error among the mail order labs checked by the CBS News Fact Finding Unit." (Emphasis supplied.) The rest of the program was devoted to the Science Laboratories incident. Calmer's introduction to the same incident also clearly restated the findings of the tests, and included a reference to the "doubts" of medical authorities about mail-order testing of certain specimens. His program ended with a statement by Dr. Luther Terry that Terry's office was investigating "the matter," and with Calmer's report that Senator Javits had proposed legislation requiring mail-order laboratories generally to be inspected and licensed. Throughout these programs, the only trace to be found of a reference to mail-order laboratories generally is Cronkite's conclusion: "And how do the mail order labs themselves react to the findings * * *? A laboratory spokesman replies on this program tomorrow night."
The telecast of June 24th, including interviews with government officials who were investigating the same general subject of mail-order testing, contained an explicit statement by Cronkite that CBS had not "necessarily" intended to indict mail-order laboratories generally. There was then presented an interview with a research-laboratory medical consultant who insisted that the specimens used were amenable to testing by mail, provided *740 that proper precautions were taken by the laboratories and doctors.
From a survey of the allegedly defamatory materials taken together, or of any one of them taken singly, I conclude that the programs and news release were clearly limited in reference to the participants in the CBS tests. No inference could reasonably be made, from what was said, that mail-order laboratories generally would perform as poorly as those which were tested, or that any particular laboratory would perform poorly at all.
It is certainly true that the programs are reasonably calculated to attract attention to the business generally, and to create concern, if not suspicion, from which no mail-order medical laboratory would be altogether immune. However, no "charges" were made or insinuated. I believe from the transcripts that the programs were carefully planned to avoid that error. By repeated reference to the "labs tested," etc., and to the "doubts" rather than the "conclusions" or "opinions" of medical authorities about mail-order testing of certain specimens, the error was avoided. The whole point of such a "Special Report," however, is to create interest and, thus, inspire inquiry to determine if there are problems with which the public, and public officials, should be concerned. That much is evident from the repeated references to the absence of federal effective state supervision of mail-order testing. The materials here in issue are perhaps best described as "calling into question" the practices of mail-order laboratories generally, and the reliability of mail-order testing itself.
It has long been settled that on matters of public concern, reporting and questioning the conduct of private individuals and public officials is a proper function of public communications media. Thornhill v. State of Alabama, 310 U.S. 88, 101-2, 60 S. Ct. 736, 84 L. Ed. 1093 (1940).
Furthermore, it is well established that radio and television media share these rights for the same reasons. American Broadcasting Co. v. United States, 110 F. Supp. 374, 389 (S.D.N.Y. 1953), aff'd sub nom, FCC v. American Broadcasting Co., 347 U.S. 284, 74 S. Ct. 593, 98 L. Ed. 699 (1954). By virtue of the requirements of 47 U.S.C. § 315(a) (4), all FCC licenses are subject to a statutory requirement that they "afford reasonable opportunity for the discussion of conflicting views on issues of public importance." This applies not only to editorial comment, but also to programing. There may even be a social and moral duty to inform the public, with good motives, and proper purposes, of medical problems in a community. Blanchard v. Claremont Eagle (1941), 95 N.H. 375, 63 A.2d 791, 794 (1941) and, there is no doubt that medical quackery is a matter of great public concern. Brinkley v. Fishbein, 110 F.2d 62, 64 (5th Cir. 1940). That the performance of the laboratories here under scrutiny, relating, as it does, to public health, is a matter of public interest, cannot be questioned. Any discussion of the conduct of some persons or institutions in any business or profession, will naturally lead to questions with reference to the members of businesses or professions similarly situated. True enough, the statements, at times, went somewhat beyond bare reporting, but certainly that fact is not controlling. Even a statement of the bare findings, would, in my opinion, raise the same questions in the public's mind. Conceding that there are a number of statements, when taken out of context, which could conceivably refer to mail-order laboratories other than those tested, the overwhelming majority of those statements, when read in context, either clearly restrict the scope of the presentation or explicitly attribute the test results to the errors of individually named laboratories. I am persuaded that any actionable references were here clearly limited to the parties explicitly identified and to the laboratories participating in the surveys. Plaintiff does not fall in either one of those categories. The complaint does not state a claim.
*741 II. Although my views just expressed dispose of the case, I recognize the probability of an appeal and that the appellate court might be interested in my impressions on other theories, so ably briefed by counsel.
It is inevitable, as previously stated, that public discussion of the conduct of persons and institutions will suggest public interest in persons and institutions similarly situated. If such "suggestion" is actionable, and we must inquire into the composition of the "class," the following observations are pertinent.
First, it was made clear that not all of the laboratories participated in all of the tests. Excepting only the five New York laboratories which performed only the "Salmonella" test, the findings reveal that not all of the laboratories were wrong on all of the tests they did perform. While all laboratories did fail the "Salmonella" test, 13 of the 48 laboratories contacted frankly admitted that they could not perform the requested tests, and another 13 made no reply at all to the CBS solicitations. Thus, at least 27.1% of the laboratories surveyed, and conceivably as many as 54.2%, were conscientious enough not to try to perform the analyses requested. At most, then, the suggestion is that some, but not all similarly situated laboratories might also try and fail to perform some, but not all of these analyses.
Secondly, the commentative materials, taken together or singly, simply do not justify the inference that the CBS findings call into question more than an unspecified portion of the "class" of "mail-order laboratories." Aside from the apparent care taken by defendants to avoid generalizations, as shown by the phrasing of the excerpts, the first and third telecasts, and the first radio broadcast, included explicit statements by Cronkite and McMullen that the laboratories tested did not necessarily typify the industry generally. The third telecast included the vigorous assertions of Dr. Winkelman to the same effect. Dr. Winkelman, concededly, did "fear" that mail-order laboratories had gotten a "bad reputation" because of Cronkite's programs.
Thirdly, as to the suitability of certain specimens for mail-order testing, it is not fair to treat either the findings or the commentary as "class" references. The emphasis is, to repeat it again, on the "doubts" of the experts. Most of the findings are recited in terms of the laboratories "tested" or "replying," and in all but one of the tests it is evident that not all of the laboratories were in error. It is apparent that all 17 of the first-contacted laboratories took, and failed, the "Salmonella" test; at least, the materials do not say otherwise. Counting the New York laboratories later tested, all laboratories participating failed the test. Dr. Buhler's commentary, however, says that there are "specimens" which "deteriorate due to time and temperature," then offers this perfectly innocuous observation:
"Any laboratory that would accept a specimen on which accurate results cannot be obtained may be endangering the health and even the life of a patient."
He does not say, or imply, that any of the specimens used in the tests are never susceptible of accurate mail-order analysis. Thus, if the discussion of the specimens here tested is deemed to go beyond the laboratories participating in the CBS survey, it still would not refer to all those who accept these specimens. It would imply, at most, that these specimens present problems for mail-order testing, and that "Salmonella Group D" presents a bigger problem than most.
I hold that the materials here made no reference to an ascertainable "class" of laboratories. In American Civil Liberties Union v. Kiely, 40 F.2d 451 (2d Cir. 1930), a statute forbade the mailing of defamatory matter. The Postmaster refused to transmit certain envelopes on which appeared slogans condemning the unjust conviction of one Tom Mooney, and impugning "California *742 justice" Judge Augustus Hand recognized "an old rule of the common law":
"* * * where words complained of reflect on a class of persons generally without making it evident that every person of the class is referred to, no member can maintain an action. * * * When, however, the words reflect on each member of a class, each one may have an action, because the charge is made broadly against all.
* * * * * *
(T)he words * * * must charge some identifiable person with something. Here the inscription contains general charges against a state, a system, or an indefinite class." (40 F.2d at 453.) (Emphasis applied.)
The principle just stated is acknowledged in Marr v. Putnam, 196 Or. 1, 17-22, 246 P.2d 509 (1952), citing, inter alia, Ryckman v. Delavan, 25 Wend. 186 (N.Y. 1840); and Le Fanu v. Malcomson, 1 HLC 637, 9 Eng.Rep. 910, both also cited by Judge Hand. "An impersonal reproach of an indeterminate class is not actionable," according to Gross v. Cantor, et al., 270 N.Y. 93, 200 N.E. 592, 593 (1936). The same precept is stated in Service Parking Corp. v. Washington Times Co., 67 App.D.C. 351, 92 F.2d 502, 504-506 (1937), where the reference was to fraudulent practices by "parking lot owners" in the "downtown section" of a city and in Blaser v. Krattiger, 99 Or. 392, 195 P. 359 (1921), where the reference was to a "son of a bitch" who was "in this room," a room full of people. The plaintiff had no action; "people in this room" was not the class, as the reference was singular; the court doubted that plaintiff could establish membership in the class of those with female canine ancestry.
While the size of the class is not of paramount importance, there is a general rule that no action will lie unless some circumstance makes the statements reasonably susceptible of special application to the plaintiff. Watts-Wagner Co., Inc. v. General Motors Corp., 64 F. Supp. 506, 508 (S.D.N.Y.1945); Riss & Co. v. Ass'n of American Railroads, 187 F. Supp. 323, 326 (D.D.C.1960); Fowler, et al. v. Curtis Publishing Co., et al., 86 U.S.App.D.C. 349, 182 F.2d 377 (1950); Golden North Airways, Inc. v. Tanana Publishing Co., 218 F.2d 612, 618-620, 15 Alaska 303 (9th Cir. 1954).
Having already said that the materials here did not refer to an ascertainable class, I feel the above cases should govern. Plaintiff might still have an action, if it could show special reference to itself; that is, other than as a member of a class. Its evidence in that connection, however, is very scanty, which explains why its briefs are geared to the class-reference theory. It makes the point that C. Howard Lane, of the local CBS affiliates, said that CBS would normally send a news release like the one in question to KOIN and KOIN-TV, and to the Portland newspapers, "where the program dealt specifically with something in our area * * *." Thus, the papers might infer that the programs had been aimed at United Medical Laboratories. The theory is tenuous on its face, as the inference would still not seem to be reasonable. Further weakening the theory is the fact that the release was sent by teletype from New York City and Los Angeles, and by mimeographed copy from New York City, to cities throughout the country.
Plaintiff's cases such as Marr v. Putnam, supra, are clearly distinguishable. There, the plaintiff was the only person who would fit in the "racket" of advertising radio repair service. In other cases such as Lathrop v. Sundberg, 55 Wash. 144, 104 P. 176, 25 L.R.A.,N.S., 381 (1909); Chapa v. Abernethy, 175 S.W. 166 (Texas, Civil App. 1915); Palmerlee v. Nottage, et al., 119 Minn. 351, 138 N.W. 312, 42 L.R.A.,N.S., 870 (1912), the class was so small that immediate identification was possible of all members. It is my belief that Fawcett Publications, Inc. v. Morris, 377 P.2d 42 (Okl.1962), appeal dismissed and cert. denied 376 U.S. 513, 84 S. Ct. 964, 11 L. Ed. 2d 968 (1964), rehearing denied 377 U.S. 925, 84 S. Ct. 1218, 12 L. Ed. 2d 217 (1964), should be placed in the same classification. *743 There, the article in True Magazine suggested that the football players of the University of Oklahoma had, in full view of television cameras at a game, sniffed "pep-up" drugs. While the article did not state that all of the team members had "sniffed," it did leave the inference that at least the "regulars," the players who participated, "sniffed." Since there was a class to which the plaintiff was a member, there was a strong inference that he either participated in taking the "sniff," or countenanced the taking of the drug by others.
The critical inquiry into the actionability of a class reference is a reasonable certainty of reference to the plaintiff as a member. Here, two classes were involved: (1) "mail-order laboratories" and (2) "mail-order laboratories performing the particular tests." The class referred to in the materials under scrutiny would necessarily be one of the above. It is my conclusion that only class number two was covered by the published materials. Plaintiff urges that the programs made particular reference to "laboratories which operate interstate and actually service thousands of doctors."
As a matter of law, no greater aspersions were cast upon them than upon other mail-order laboratories. Cronkite did introduce the first telecast by saying,
"Across this nation an untold number of doctors with untold thousands of patients depend on medical analysis conducted by mail order laboratories."
In no way, however, did he suggest how many doctors relied on the larger laboratories, or how many dealt with interstate operators. Nowhere in the series, or in the news release, was there any hint that most of the laboratories tested "operate interstate and serviced thousands of doctors." Indeed, any viewer who knew if it is a fact that these numbered about 12, knew that the odds were against it, since 48 labs were contacted initially and 22 were finally tested. The materials did comment repeatedly on the absence of federal regulation of "mail-order laboratories," but they also commented on the lack of effective state regulation, and on the variances among the states' provisions. The officials interviewed were federal officials; but federal jurisdiction could rest as well upon the laboratories' use of the mails as upon their shipments across state lines, and this was specifically noted during the interviews of the Chief Postal Inspector and the FDA Commissioner. Finally, though the New York laboratories tested were sent specimens from out of the state, the fact is not mentioned on the air. The news release mentions it only incidentally, to show that these laboratories, like the others, were tested with specimens sent from a distance, "outside the New York city area." In short, the materials make no reference whatever to the size of the laboratories tested or contacted, and no particular point about the interstate character of the analyses conducted. Any inferences they suggest, therefore, could not reasonably be understood to apply specially to interstate concerns, small or large.
Of course, it is then irrelevant that plaintiff is among the few concerns who did the most business. No one who took his business elsewhere because of the laboratory-exposé here, obviously, would take it to another mail-order laboratory, large or small.
SPECIAL PRIVILEGE
Defendants also urge that a forthright discussion of subjects pertaining to "public health" should be granted the same partial immunity as that granted to a discussion of "public officials." Rosenblatt v. Baer, 383 U.S. 75, 86 S. Ct. 669, 15 L. Ed. 2d 597 (1966); New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964); Garrison v. State of Louisiana, 379 U.S. 64, 85 S. Ct. 209, 13 L. Ed. 2d 125 (1964). While the doctrine of partial immunity, as taught in those cases, may eventually find its way into the field of public health, I can find no supporting authority for application at this time. Quite frankly, the suggestion is not judicially *744 unattractive. There is no reason why the communications media should keep the public less well informed about those engaged in the public health field, than about the merits and demerits of public officials. The mantle of partial immunity might well cover both.
Although I am well aware of the directives of the Court of Appeals to the trial courts in connection with the danger, under ordinary circumstances, of allowing a motion to dismiss, I find no alternative on the record before me. For that matter, the essential facts are undisputed. No claim is made by the plaintiff that the complaint could be amended so as to show additional facts beyond the present record. Since I would direct a verdict in defendants' favor on the present record, I find no reason why I should place the heavy burden of additional attorney fees and other expenses on the parties by forcing them to pre-trial and to trial.
On appeal, I would suggest that the appellate court be offered the privilege which was mine of seeing the telecasts. No doubt, the jurisdictional question raised by defendants will also find its way to the Court of Appeals.
ADDENDUM
There follows here representative excerpts from the telecasts, broadcasts and news releases which gave rise to this case.
A. TELECAST OF JUNE 22.
CRONKITE: "* * * Across this nation an untold number of doctors with untold thousands of patients depend on medical analysis conducted by mail order laboratories. * * For some small town doctors the inducement may be partly convenience. But some mail order laboratories advertise the economic benefits of their cut rate service. * * But the mail order laboratory business operates virtually without government control. As far as the Federal law is concerned, anyone, no matter what his qualifications, can open up a clinical laboratory and engage in interstate business. * * *"
BUHLER: "* * * While it is true that accurate results can be obtained on some specimens sent through the mail, there are many which deteriorate due to temperature and time and the results are inaccurate. Any laboratory that would accept a specimen on which accurate results cannot be obtained may be endangering the health and even the life of a patient."
McMULLEN: "Because numerous health authorities share the doubt that many types of human medical specimens cannot be tested accurately after they have been sent through the mails, we decided to set up an experiment to test mail order laboratories. * * *"
SHAEFFER: (Throughout the statement of the test results by McMullen on this first broadcast, Shaeffer interjected comments as to the gravity of the errors involved.)
McMULLEN: "* * * The final results of our experiment; 88 per cent of the 17 mail order laboratories tested were wrong on one or more of the tests they undertook. (He then reported that the 5 New York City laboratories tested, and one control lab, were all wrong on the `Salmonella Group D' test.) * * * How typical are these results? We don't know, but a sick patient may get only one chance to find out."
CRONKITE: "And * * * we'd like to underscore that the labs in question are all mail order laboratories, not the community laboratories that do the bulk of the nation's medical testing. * * *"
B. RADIO BROADCAST OF JUNE 22.
CALMER (introducing the program): "From a CBS NEWS fact-finding team, disclosures on mail order medicine; * * *."
"* * * Today your doctor may take a sample of your blood, urine *745 or some other medical specimen, air mail it for testing to a mail order laboratory across the country, and receive back a report on the results. Mail order labs, some of them offering cut rates to doctors, operate virtually without state or federal control. * * *"
(Thereafter there followed the same byplay with McMullen and Shaeffer as occurred on Cronkite's telecast.)
C. NEWS RELEASE OF JUNE 23.
"Of medical specimen tests undertaken by mail order medical laboratories throughout the country during a CBS News Fact Finding Unit investigation into the accuracy of mail order labs, 100 per cent of the labs failed to identify two specimens; 88 per cent were wrong in one or more of the tests they undertook."
(There follows a recitation of the test results, in which it is clear that the percentages of error refer to laboratories which participated, not laboratories generally.)
"The accuracy of mail order laboratories was tested because numerous health authorities, including members of the American Medical Association and the College of American Pathologists, have doubted the ability of mail order labs to perform accurately many types of routine laboratory tests, particularly since the specimens involved in these tests are affected by temperature and decompose rapidly during mail shipments."
D. TELECAST OF JUNE 23.
CRONKITE: "Last night, we presented the first in a series of reports on mail order medical laboratories. Our report indicated widespread error among the mail order labs checked by the CBS News Fact Finding Unit. Eighty-eight per cent of those labs were wrong on one or more of the tests they undertook, tests that could involve life or death. That first report involved many laboratories testing actual medical specimens. But tonight's report involves only one lab. * * *"
(There followed a byplay among Cronkite, McMullen and Drs. Shaeffer and Kogon, relating to the detailed investigation of the Nutritional Research Science Laboratories Professional Foods nexus. Nutritional Research had sent literature to one of CBS' cooperating physicians, advertising Urine Hormone Assays at a low price. Physicians sent 12 samples of distilled water, colored yellow; these were tested by Science Laboratories, which found hormones of seven different categories. All of its reports suggested low metabolism, and suggested nutritional supplements. Several days later, and in following weeks, representatives of Professional Foods contacted each of the physicians; these representatives received copies of the assays from Nutritional Research. The same man is president of Nutritional Research and owner of Professional Foods.)
CRONKITE: "* * * And how do the mail order labs themselves react to the findings of the CBS News Fact Finding Unit? A laboratory spokesman replies on this program tomorrow night."
E. RADIO BROADCAST OF JUNE 23.
CALMER: "Last evening THE WORLD TONIGHT presented an exclusive report on a CBS News Fact Finding unit investigation of cut-rate mail-order medical laboratories. Many medical authorities have doubted that these labs, virtually without federal or state regulation, can accurately test various types of medical specimines [sic] sent them by doctors. Yet, thousands of doctors use them. In the CBS investigation 87 per cent of the labs were wrong on one or more of the tests they undertook. 100 per cent were wrong on two of the tests. * * *"
*746 TERRY (Surgeon General):
"Well, as a physician I am greatly concerned about the inaccuracies of laboratories as reflected by these studies. I think from two standpoints the Federal Government has a definite concern. * * * Certainly as soon as I can get back to my office we'll study the matter very carefully."
CALMER: "Following last night's disclosures * * * Senator Jacob Javits proposed that Congress pass a bill requiring federal inspection and licensing of medical laboratories which diagnose specimens sent to them through the mails."
F. TELECAST OF JUNE 24. (Chief Postal Inspector Henry Montague, and Food and Drug Administration Commissioner George Larrick, were interviewed. Both said they were conducting investigations in the general area of the mail-order testing business.)
LARRICK: "* * * I have not been briefed on our most recent investigation in this field * * * which is being stimulated by Mr. McMullen's investigation. And we will, when we conclude the study of that investigation, then reach a conclusion about whether we should recommend additional legislation."
CRONKITE: "* * * The CBS News investigation of mail order medical laboratories has indicated that many firms submitted faulty reports on specimens. But this is not necessarily to be considered an indictment of all laboratories that do business by mail. Many others insist their standards are high, and that mail order medical testing can be reliable. * * *"
WINKELMAN (Medical Consultant at Kings County Research Laboratory in Brooklyn):
(In an interview with Dave Dugan of CBS, Winkelman said that it was "possible" for specimens to deteriorate in the mails, but that "precautions can easily be taken and proper instructions can be given to the doctors who are going to submit their specimens through the mail so as to preserve the stability and the sterility of the specimens * * * especially in the six tests that were described by your office." He said further, "The value of performing laboratory tests through the mail is going to increase in the future. There are many tests that are being done now that are simply beyond the realm of a small, local laboratory." He felt "very strongly" that "laboratories that do their business through the mail have gotten a bad reputation." "The condemnation," he said, "has been in the last two days on Mr. Cronkite's program that the inaccuracy of these results has been due to the fact that the specimens were submitted by the mail. I maintain that tests of specimens submitted by the mail are and can be performed accurately. If accurate results were found in those laboratories listed in the last two days, it was not due to the fact that it was submitted by the mail. The error is due to the laboratory itself.")
CRONKITE: "Our problem, as Jay McMullen pointed out originally, is that many mail order laboratories operate virtually without Government supervision; laws vary widely from state to state, and the quality of laboratory analysis can vary just as widely."
On Petition for Rehearing.
This cause is before the Court on the plaintiff's motion for a rehearing on the defendants' motion for a dismissal, which the Court treated as a motion for a summary judgment, or in the alternative for an order supplementing the record with an affidavit tendered with said motion. The motion was served on the 21st day of September, 1966, which would be the *747 thirteenth day following the entry of the judgment of dismissal.
Rule 59(a) and (b),[1] F.R.Civ.P., fixes the grounds and the time within which a motion for a new trial may be served in either a trial by jury or a trial by the Court.
It has been uniformly held that a petition for a rehearing is, under these rules, in all respects the same as a motion for a new trial. Safeway Stores, Inc. v. Coe, 78 U.S.App.D.C. 19, 136 F.2d 771, 148 A.L.R. 782 (1943); Slater v. Peyser, 91 U.S.App.D.C. 314, 200 F.2d 360 (1952); American Oil Co. v. Carey, 246 F. Supp. 773 (E.D.Mich.S.D.1965).
On the showing before me, I find no mistake, inadvertence, excusable neglect nor any other reason which might justify relief under Rule 60(b), F.R.Civ.P. Certainly, I cannot find that the interests of justice require a rehearing. Sternstein v. "Italia"-Societa Per Azioni Di Navigazione-Genoa, 275 F.2d 502 (2d Cir. 1960). For that matter, Rule 60(b) is not intended to serve the same purposes as Rule 59. John E. Smith's Sons Co. v. Lattimer Foundry & Mach. Co., 19 F.R.D. 379 (D.C.), aff'd 239 F.2d 815 (3d Cir. 1956).
Aside from the legal roadblock which may be presented by the requirements of Rule 59(a) and (b), the record reveals that counsel for both parties, at the time of submission, stated that the Court had before it all of the evidence on liability that might be presented at the time of trial. The record shows that I viewed the films on February 22nd, the last memorandum being received before mid-March, 1966. The opinion and order of dismissal were dated September 8, 1966. Counsel offers no reasonable explanation as to why the additional material could not have been supplied, either before or after submission, or in the lengthy period in which the Court had the matter under submission. I must, therefore, exercise my discretion against granting a rehearing or permitting the plaintiff to supplement the record.
For that matter, I seriously question if the tendered affidavit presents evidence which would, in any way, alter my original opinion.
The motion for a rehearing, and the alternative to supplement the record, is denied.
It is so ordered.
NOTES
[1] Rule 59(a) and (b) provides as follows:
"(a) Grounds. A new trial may be granted to all or any of the parties and on all or part of the issues (1) in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States; and (2) in an action tried without a jury, for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of the United States. On a motion for a new trial in an action tried without a jury, the court may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment."
"(b) Time for Motion. A motion for a new trial shall be served not later than 10 days after the entry of the judgment. * * *" | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511056/ | 171 Conn. 691 (1976)
MELVIN TAYLOR
v.
CARL ROBINSON, WARDEN, CONNECTICUT CORRECTIONAL INSTITUTION, SOMERS, ET AL.
Supreme Court of Connecticut.
Argued June 10, 1976.
Decision released September 21, 1976.
HOUSE, C. J., LOISELLE, BOGDANSKI, LONGO and BARBER, JS.
*692 Richard Foster, with whom, on the brief, were Igor I. Sikorsky and Robert Brill, for the appellant (plaintiff).
Stephen J. O'Neill, assistant attorney general, with whom, on the brief, was Carl R. Ajello, attorney general, for the appellees (defendants).
BARBER, J.
The plaintiff has appealed from a judgment of the Superior Court denying his application for a writ of habeas corpus. In his application, the plaintiff alleged that he was an inmate at the Connecticut correctional institution at Somers, that he had been denied parole on not less than four occasions, and that the procedures followed by the board of parole at parole release hearings complied with neither the Uniform Administrative Procedure Act (c. 54 of the General Statutes, hereinafter referred to as UAPA) nor the due process clauses of the United States and Connecticut constitutions. In his prayer for relief, he requested the court to order that he either be granted a parole release hearing conforming to the UAPA and complying with the mandates of due process or, in the alternative, that he be immediately released from custody.[1] In denying the application, the trial court determined that the UAPA did not apply to parole release hearings, and that the usual procedures followed at such hearings did satisfy the minimum requirements of due process. On appeal, the plaintiff has challenged both of these conclusions.
*693 I
The plaintiff's claim that the procedures followed by the board of parole at parole release hearings do not comply with the minimum requirements of the due process clauses is not properly before this court. The trial court's finding of fact, stipulated to by the parties, merely recites in general terms the usual procedures followed by the board of parole and does not disclose whether these usual procedures were actually followed by the board in considering the plaintiff's eligibility for parole. Nor does it appear that the plaintiff offered any evidence that the procedures actually followed in his particular case resulted in a denial of his rights to due process of law. Questions of constitutional law presented in abstract rather than concrete form are not susceptible of proper determination. Kellems v. Brown, 163 Conn. 478, 497, 313 A.2d 53, appeal dismissed, 409 U.S. 1099, 93 S. Ct. 911, 34 L. Ed. 2d 678; Adams v. Rubinow, 157 Conn. 150, 152, 251 A.2d 49; State v. Sul, 146 Conn. 78, 81, 147 A.2d 686; see 1 Antieau, Modern Constitutional Law § 15.21. In this case, the record discloses no substantial injury to the plaintiff from any concrete ruling involving minimum due process requirements. "This court does not sit to determine questions where the record shows that at most only remote or possible injuries can be suffered from leaving undisturbed the judgment of the lower court." Winchester Repeating Arms Co. v. Radcliffe, 134 Conn. 164, 168, 56 A.2d 1. We, therefore, do not consider the due process claims raised by the plaintiff.
*694 II
In the interim between the trial court's judgment and the perfection of this appeal, the plaintiff has been granted parole. Under similar circumstances, the United States Supreme Court has dismissed challenges to parole board procedures as moot. Weinstein v. Bradford, 423 U.S. 147, 96 S. Ct. 347, 46 L. Ed. 2d 350; Regan v. Johnson, 419 U.S. 1015, 95 S. Ct. 488, 42 L. Ed. 2d 289, vacating United States ex rel. Johnson v. Chairman, New York State Board of Parole, 500 F.2d 925 (2d Cir.). Despite the plaintiff's lack of an immediate interest in the outcome of this appeal, we are persuaded that we should consider the merits of the plaintiff's claim that the UAPA is applicable to parole release hearings. Recently, in Liistro v. Robinson, 170 Conn. 116, 365 A.2d 109, we reached the merits of the plaintiffs' claim that they were entitled to bail pending the outcome of parole revocation proceedings, even though, by the time the appeal was argued, the proceedings to revoke the plaintiffs' parole had been completed. We noted (p. 121) that "[t]he single issue involved is one which is `capable of repetition, yet evading review.' Southern Pacific Terminal Co. v. Interstate Commerce Commission, 219 U.S. 498, 515, 31 S. Ct. 279, 55 L. Ed. 310 .... It directly affects the ongoing parole program of the state's penal system, and could very well affect the petitioners .... Hence, practical relief can follow directly from our decision and `the public importance of the question involved makes it desirable that we decide the point.' Winnick v. Reilly, 100 Conn. 291, 296, 123 A. 440."
Similar considerations are involved in the present appeal. The board of parole conducts some 1700 *695 parole release hearings each year, and the issue of whether the procedures mandated by the UAPA apply to those hearings is obviously one of considerable public interest and both parties seek a determinative resolution. The trial court decision in this case has been relied upon in dismissing the relief sought in at least eleven other applications for a writ of habeas corpus. Also, in view of § 54-126 of the General Statutes, which authorizes the commissioner of corrections to retake and imprison a paroled convict upon violation of parole conditions, a determination of the issue presented on appeal might well affect the plaintiff upon a later application to be reparoled. We shall, therefore, consider the merits of the plaintiff's appeal, although our discussion is limited to the single issue of whether the UAPA applies to parole release hearings.
III
The UAPA "applies to all agencies and agency proceedings not expressly exempted"; § 4-185; and mandates the procedures to be followed by such agencies in the adoption of regulations; §§ 4-168 through 4-176; and in conducting hearings on "contested cases"; §§ 4-177 through 4-184. The plaintiff claims that a parole release hearing is a contested case to which the appropriate provisions of the UAPA apply. In determining the merits of this claim, we must consider (1) whether the board of parole is a nonexempt "agency"; and (2), if so, whether a parole release hearing is a "contested case."
An "agency" is defined for purposes of the UAPA as "each state board, commission, department or officer ... authorized by law to make regulations or to determine contested cases." *696 § 4-166 (1). The board of parole, as established by §§ 54-124a through 54-126 of the General Statutes, is an autonomous body "within the department of correction for fiscal and budgetary purposes only" and consists of a chairman and ten other members who are assigned by the chairman to sit on panels of three members each, which panels serve as the paroling authorities of the state correctional institutions. § 54-124a. The panel may, in its discretion, permit an inmate who has served his minimum term to go at large on parole, provided the panel is satisfied that there is a reasonable probability that the inmate will remain at liberty without violating the law, and is satisfied that parole is "not incompatible with the welfare of society." § 54-125. The board of parole is authorized to "establish such rules and regulations as it deems necessary," and a panel may establish special rules governing the release of any particular inmate. § 54-126. Section 18-78 of the General Statutes provides that the board of parole shall be a part of the department of correction and § 18-78a provides that the UAPA shall apply to the department, except that "cases involving disciplinary action, classifications and outof-state transfers" are not required to be determined in accordance with the procedures mandated for contested cases. § 18-78a (b). Without resolving the apparent inconsistency between § 54-124a and §§ 18-78 and 18-78a, we assume, for the purposes of this decision, that the board of parole is an "agency." Such an assumption is not dispositive of the issues presented on appeal, however, for it remains to be determined whether a parole release hearing is a contested case.
A "contested case" is defined as "a proceeding... in which the legal rights, duties or privileges *697 of a party are required by statute to be determined by an agency after an opportunity for hearing or in which a hearing is in fact held." § 4-166 (2). A parole release hearing obviously qualifies as a proceeding "in which a hearing is in fact held," and parole may arguably be characterized as a "privilege" of the inmate.[2] The third criterion for classification as a "contested case," however, is not met by a parole release hearing because there is no statutory requirement that the parole board determine the eligibility for parole of any particular prisoner.
The sole statute concerning parole, § 54-125, simply provides that an inmate who has served his minimum sentence "may be allowed to go at large on parole in the discretion of the panel of the board of parole for the institution in which the person is confined." There is no statutory requirement that the panel actually consider the eligibility of any inmate for parole, the statute does not vest an inmate with the right to demand parole, and there is no statutory provision which even permits an inmate to apply for parole. The only statutory limits upon the discretion of the board of parole are the requirement that the inmate serve his minimum *698 sentence, that it appear that the inmate will remain at liberty without violating the law, and that the release of the inmate not be incompatible with the welfare of society. § 54-125. The statute does not deposit a power with an agency for the benefit of specifically designated persons, and does not establish the conditions upon which these persons would be entitled to call for the exercise of the power, as in State ex rel. Markley v. Bartlett, 130 Conn. 88, 94, 32 A.2d 58. For even if the inmate has complied with the minimum requirements of § 54-125, the statute does not require the board to determine his eligibility for parole. The parole situation thus bears little resemblance to those cases in which we have held that the UAPA provisions concerning contested cases do apply. Murphy v. Berlin Board of Education, 167 Conn. 368, 373, 355 A.2d 265, and McDermott v. Commissioner of Children & Youth Services, 168 Conn. 435, 363 A.2d 103, both involved hearings which were statutorily required to be held before dismissing a tenured teacher. §§ 10-151 (b), 5-242.
We conclude that there is no statutory requirement that the board of parole determine the eligibility for parole of any particular inmate, and that a parole release hearing is therefore not a "contested case" to which the provisions of the UAPA apply. This is not to say that a qualified inmate has no constitutional right to a parole release hearing or that an inmate has no due process rights at a parole release hearing. See Childs v. United States Board of Parole, 511 F.2d 1270, 1279 (D.C. Cir.). We hold only that the procedures which the UAPA requires for "contested cases," which procedures exceed the minimal procedural safeguards mandated by the due process clause; *699 Haymes v. Regan, 525 F.2d 540 (2d Cir.); La Bonte v. Gates, 406 F. Sup. 1227 (D. Conn.); are not statutorily required at parole release hearings.
There is no error.
In this opinion the other judges concurred.
NOTES
[1] The defendants filed a special defense, claiming that habeas corpus relief was not appropriate under the circumstances alleged, because the application did not challenge the validity of the judgment under which the plaintiff was confined, nor did it challenge the jurisdiction of the court which rendered that judgment. Cf. Flaherty v. Warden, 155 Conn. 36, 40, 229 A.2d 362. The trial court resolved this issue in favor of the plaintiff and that ruling has not been challenged on appeal.
[2] Compare In re Schoengarth, 66 Cal. 2d 295, 300, 425 P.2d 200 (characterizing parole as a "privilege") and Berry v. Parole Board, 148 Colo. 547, 548, 367 P.2d 338, cert. denied, 370 U.S. 927, 82 S. Ct. 1569, 8 L. Ed. 2d 507 (holding that "parole is a mere matter of grace, favor, or privilege") with Donnelly, "The Connecticut Board of Parole," 32 Conn. B.J. 26, and comment, "The Parole System," 120 U. Pa. L. Rev. 282, 294 (parole is neither a right nor a privilege, but the implementation of a correctional policy). See Morrissey v. Brewer, 408 U.S. 471, 482, 92 S. Ct. 2593, 33 L. Ed. 2d 484, a case dealing with parole revocation rather than parole release, which comments: "It is hardly useful any longer to try to deal with this problem [parole revocation] in terms of whether the parolee's liberty is a `right' or a `privilege.'" | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511242/ | 696 A.2d 491 (1997)
116 Md. App. 363
MONTGOMERY CABLEVISION LIMITED PARTNERSHIP, et al.
v.
Julia D. BEYNON, et al.
No. 841, Sept. Term, 1996.
Court of Special Appeals of Maryland.
July 3, 1997.
*493 Hugh E. Donovan (Donovan & Broderick, P.C., Silver Spring and John G. Packard, Baltimore, on the brief), for appellant, Cablevision.
Nancy L. Harrison, Annapolis, for appellant Lumbermens Mut.
Charles B. Day (David Barmak, Mark S. Carlin and Sherman, Meehan & Curtin, P.C., on the brief), Washington, DC, for appellees.
Argued before MURPHY, C.J., EYLER, J., and THEODORE G. BLOOM, Judge (retired), Specially Assigned.
*492 THEODORE G. BLOOM, Judge, Specially Assigned.
Appellees, Julia D. Beynon, individually and as personal representative of her son's estate, and Douglas K. Beynon, Sr., filed in the Circuit Court for Montgomery County complaints against James R. Kirkland, James Lee, and Montgomery Cablevision Limited Partnership, doing business as Cable TV Montgomery ("Montgomery Cable"). Lumbermens Mutual Casualty Company ("Lumbermens") intervened as a defendant. In a consolidated trial, the jury returned verdicts for substantial sums against the defendants. Montgomery Cable and Lumbermens, appealing from the judgments entered on those verdicts, present several questions for our review.
ISSUES
Montgomery Cable and Lumbermens both raise the following issues, albeit in somewhat different language:
1. Did the trial court err in failing to find that the decedent was contributorily negligent as a matter of law?
2. Did the trial court err in failing to find as a matter of law that there can be no recovery for "pre-impact fright"?
3. Was there any evidence to sustain the judgment for pecuniary losses?
Montgomery Cable also raises the following three issues:
4. Was there any evidence of primary negligence on the part of appellant Montgomery Cable?
5. Was there any evidence that any act of appellant Montgomery Cable was a proximate cause of the injuries and damages sustained by appellees?
6. Did the trial court err in instructing the jury on: (a) sudden emergency; (b) the State Police's responsibility in controlling traffic; (c) presumptions regarding decedent's conduct?
Lumbermens presents two additional issues:
7. Did the trial court err in refusing to permit appellants' expert witness to testify regarding photographs of the accident scene?
8. Is intervenor Lumbermens Mutual Casualty Company entitled to judgment on cross-claims against the individual defendants?
FACTS
At some point during the late evening hours of 7 June 1990, Montgomery Cable discovered that one of its cables, having either broken or fallen from a utility pole, was in need of repair. Montgomery Cable also perceived that the Maryland State Police ("State Police") would have to stop traffic on Interstate 495 (the Capitol Beltway) so that a replacement cable could be re-positioned across both the inner and outer loops of that heavily travelled highway.[1]*494 Montgomery Cable informed the State Police that the repairs would take from five to ten minutes and requested that the Capitol Beltway be closed to traffic. Montgomery Cable employees were dispatched to the location of the damaged cable so they could begin preparing for the project before the State Police arrived. At some time after 2:00 a.m. on 8 June 1990, two State Police officers, one on the outer loop and one on the inner loop, successfully stopped traffic and indicated that the repairs could safely begin. Unfortunately, it took Montgomery Cable employees between thirty and forty-five minutes to secure the new cable. The prolonged delay caused a traffic backup of approximately one mile in each direction. At the rear of the backup on the outer loop, James Kirkland was driving a tractor-trailer owned by James Lee.[2]
The jurors heard Mr. Kirkland testify that he brought his rig to a complete stop in the center lane of traffic, occasionally moving forward as the vehicles ahead of him did so. During that period of stop and go progress, he noticed that another large tractor-trailer was to his left, and he recalled that there may have been another truck of some sort to his right. In any event, he was certain that all lanes of traffic were full of vehicles. Mr. Kirkland had been waiting in this fashion for approximately five minutes when the rear of his truck was struck by a van. The driver of that van, Douglas K. Beynon, Jr., died, apparently instantly, from the impact.
The jurors also heard testimony that (1) immediately prior to the accident, the decedent was travelling at roughly fifty-five miles per hour, and (2) under ideal conditions a vehicle moving at that rate of speed would require 192 feet to come to a complete stop. The decedent's vehicle left skid marks of just over seventy-one feet before striking the rear of Mr. Kirkland's rig. Conflicting testimony was presented on the issue of whether the tail lights on Mr. Kirkland's trailer were functioning properly at the time of the accident.
At the conclusion of a lengthy trial, the court presented the jury with the following written questions:
(1) Have Plaintiffs established by a preponderance of the evidence that Defendant, James Kirkland, was negligent?
(2) Have Plaintiffs established by a preponderance of the evidence that Defendant, James Lee, was negligent?
(3) Have Plaintiffs established by a preponderance of the evidence that Defendant, Cable TV Montgomery, was negligent?
(4) If you do not believe Plaintiffs have established the negligence of either James Kirkland or James Lee or Cable TV Montgomery, please stop your deliberations here. If you indicated "YES" to any of the above questions, please continue.
(5) Have Defendants established by a preponderance of the evidence that Douglas K. Beynon, Jr., was negligent?
(6) If you believe Defendants have established the negligence of Douglas K. Beynon, Jr., please stop your deliberations here. If you indicated "NO" to this question, please continue.
The jurors answered "yes" to the first three questions and "no" to question five. They then awarded the following damages on that portion of the verdict sheet that directed them to "[i]ndicate the amounts you deem as compensation for Plaintiffs:"
Decedent
________
Pre-Impact Fright: $1,000,000.00
Funeral Expenses: $ 2,000.00
Douglas K. Beynon, Sr.
______________________
Economic Losses: $ 212,000.00
Past Mental Pain/Suffering: $ 500,000.00
Future Mental Pain/Suffering: $ 750,000.00
Julia D. Beynon
_______________
Economic Losses: $ 165,000.00
Past Mental Pain/Suffering: $ 500,000.00
Future Mental Pain/Suffering: $ 750,000.00
_____________
TOTAL: $3,879,000.00
Pursuant to Md.Code (1974, 1995 Repl. Vol.) § 11-108(b) of the Courts and Judicial Proceedings Article, the court reduced the $1,000,000 awarded for the decedent's "preimpact *495 fright" to $350,000. He otherwise entered judgments in accordance with the verdicts. This appeal followed.
DISCUSSION
I.
Both appellants argue that the decedent was contributorily negligent as a matter of law and, therefore, that the court erred in submitting the issue of contributory negligence to the jury. We are persuaded, however, that the evidence generated a jury question on this issue. The trial court cannot take the issue of contributory negligence from the jury unless no reasonable person could reach a contrary conclusion. Campbell v. Baltimore Gas & Elec. Co., 95 Md.App. 86, 94, 619 A.2d 213, cert. denied, 331 Md. 196, 627 A.2d 538 (1993); Le Vonas v. Acme Paper Board Co., 184 Md. 16, 40 A.2d 43 (1944).
In order that a case may be withdrawn from a jury on the ground of contributory negligence, the evidence must show some prominent and decisive act which directly contributed to the accident and which was of such a character as to leave no room for difference of opinion thereon by reasonable minds.... In addition, before a person killed in an accident can be declared to have been guilty of contributory negligence as a matter of law, the trial court must give consideration to the presumption that he exercised ordinary care for his own safety....
Baltimore & Ohio R.R. Co. v. Plews, 262 Md. 442, 454, 278 A.2d 287 (1971) (quoting Baltimore Transit Co. v. State for Use of Castranda, 194 Md. 421, 434, 71 A.2d 442 (1950)).
Appellants contend that the testimony of the accident reconstruction experts established beyond any doubt that Kirkland's trailer was clearly visible and that the decedent contributed to the happening of the accident because he was not paying attention to the roadway in front of him. The jurors did hear testimony that Kirkland's trailer was equipped with several rear lights and that, if the lights were functioning properly at the time of the accident, the trailer would be visible from several hundred feet away. There was a dispute, however, over the number of lights that were functioning on that occasion. The distance at which the decedent could see the lights is a question of fact that was properly submitted to the jury.
II.
Both appellants contend that the court erred in failing to rule as a matter of law that there could be no recovery for "pre-impact fright." They objected to the court's inclusion on the verdict sheet of a "pre-impact fright" category of damages, to the court's instructions on that issue, and to the court's allowing appellee's counsel to advance an argument to the jury with respect to an award of such damages. On appeal, their arguments are broadly, rather than pointedly, stated, admitting to various interpretations. They assert that in this case there was no evidence to support such an award, and their contention that under Maryland law there can be no recovery for "pre-impact damages" can be interpreted as asserting:
(1) that as a matter of law such damages can never be awarded in any case;
(2) that as a matter of law, such damages can never be awarded when the victim of a tort does not survive the impact and thus suffers no conscious pain or suffering; or
(3) that as a matter of law, on the basis of the evidence in this case, no damages could be awarded for "pre-impact fright."
Before we address the foregoing contentions, we deem it appropriate to distinguish between the two causes of action that arose from the tragic accident and death of Douglas K. Beynon, Jr.
At common law, if a victim of a tort died prior to recovery in tort, the victim's cause of action died as well. Similarly, the victim's survivors had no cause of action for their financial or emotional loss. States have changed this result by statute, although not all in the same way. In Maryland, a wrongful death statute permits recovery by dependents of the decedent, in accordance with its terms, Md.Code (1974, 1995 Repl.Vol., 1996 Supp.), §§ 3-901 through 3-904 of the Courts and Judicial Proceedings Article; by separate statute, a survival action permits a personal *496 representative to sue on behalf of the estate. Md.Code (1974, 1991 Repl.Vol., 1996 Supp.), § 7-401(x)(2) of the Estates & Trusts Article.
The distinction between the two causes of action was explained by Judge Moylan in Globe American Casualty v. Chung, 76 Md. App. 524, 547 A.2d 654 (1988), and is relevant here:
When a victim dies because of the tortious conduct of someone else, two entirely different types of claim may arise. One is a survival action commenced or continued by the personal representative of the deceased victim, seeking recovery for the injuries suffered by the victim and prosecuted just as if the victim were still alive. It is called a "survival action" in the sense that the claim has survived the death of the claimant. The other is a wrongful death action, brought by the relatives of the victim and seeking recovery for their loss by virtue of the victim's death. A deceptive similarity inevitably results from the prominent common denominator fact that the victim has died. In other essential characteristics, however, the two types of claim are clearly distinct. The first arises from the tortious infliction of injury upon the victim; the second, only from the actual death of the victim. In the first, damages are measured in terms of harm to the victim; in the second, damages are measured in terms of harm to others from the loss of the victim. In the first, the personal representative serves as the posthumous agent of the victim; in the second, his surviving relatives do not serve as his agent at all. They act in their own behalf.
In some states, the distinction between the two types of claim has been lostor badly blurred. In Maryland, in no small measure because of the landmark opinion of Chief Judge James McSherry for the Court of Appeals in Stewart v. United Electric Light and Power Co., 104 Md. 332, 65 A. 49 (1906), that distinction has been meticulously maintained.
Id. at 526-27, 547 A.2d 654.
The claim for pre-impact fright damages in the case before us was in the survival action, and the disputed damages were awarded in that action. The personal representative of the decedent's estate conceded that there was no evidence of conscious pain and suffering by the decedent after impact, and there was no claim for medical expenses incurred as the result of injuries received in the accident. The only damages claimed were funeral expenses, statutorily limited to $2,000, and for pre-impact fright.
Appellants advance two theories for the proposition that there can be no recovery in any case for pre-impact fright:
(1) section 7-401(x) of the Estates and Trust Article of the Maryland Code, which permits the personal representative of an estate to commence ` "a personal" action which the decedent might have commenced or prosecuted," is a statute in derogation of the common law, and the common law did not recognize a cause of action for preimpact fright; and
(2) a claim for pre-impact fright is equivalent to an action for negligent infliction of emotional distress, a cause of action not recognized in Maryland.
We reject both of those theories.
The statutory survival actions that a deceased victim of a tort might have brought and maintained had he lived is a departure from the common law rule that a tort action died with the victim of the tort. It made no change in the law with respect to what might have been recoverable damages had the victim survived, however. That there has not previously been any recovery for pre-impact fright in a survival action is not a basis for concluding that there can never be an appropriate set of facts and circumstances that would permit a tort victim to recover damages for such emotional distress. Indeed, the allowance of recovery of damages for the consequences of fright when no impact has occurred, which we shall discuss infra, would indicate the contrary.
The argument based on analogy of pre-impact fright to negligent infliction of emotional distress confuses the concept of allowance of damages for emotional distress as a consequence of a negligent tort with the refusal to recognize the existence of a separate tort of negligent infliction of emotional *497 distress. When a negligent act or omission constituting a tort results in injury, the tort victim is entitled to recover damages for all of the injuries he or she sustains, including physical pain and mental anguish or suffering, which may be termed "emotional distress." If one deliberately engages in conduct that is not otherwise tortious, with the intent to cause another to suffer extreme mental distress, and the conduct has its intended effect, an action will liethe otherwise non-tortious conduct coupled with the intent to cause mental suffering is a separate tort known as "intentional infliction of emotional distress." Unintended emotional distress negligently inflicted by conduct not itself tortious, however, is not a recognized tort. See Hamilton v. Ford Motor Credit Company, 66 Md.App. 46, 61-64, 502 A.2d 1057 (1986); Chew v. Paul D. Meyer, 72 Md.App. 132, 139, 527 A.2d 828 (1987). In this case, the negligent conduct of Montgomery Cable in causing a traffic backup for a mile in each direction, lasting more than thirty minutes, without providing required warning to motorists, and the negligent failure of James Kirkland and James Lee to display proper lights on their truck were negligent torts causing injury. If provable injuries resulting from those negligent torts included mental anguish or emotional distress, an action to recover for such injuries would not be one for the non-existent tort of negligent infliction of emotional distress.
There are no Maryland cases involving recoverability of damages for pre-impact fright suffered by one who did not survive the impact. There are, however, cases from other jurisdictions dealing with that issue.
The case most favorable to the personal representative is an intermediate appellate court decision from Georgia. In Monk v. Dial, 212 Ga.App. 362, 441 S.E.2d 857 (1994), an award of damages for preimpact fright was upheld, based on evidence that the decedent motorist veered shortly before the collision, which permitted an inference that he was aware of the impending crash in which he died instantly. That inference, in turn, was held to support a further inference as to the decedent's mental state during the brief interval between his awareness of the impending crash and the fatal impact. The court ruled that under Georgia law mental pain and suffering need not follow physical injury, but cited no precedent for that conclusion. The existence of seventy-one feet of skid marks from the decedent's vehicle in this case is obviously analogous to the evidence that the deceased motorist in Monk v. Dial "veered" before the collision. It leads to a rational inference that there was an awareness of the likelihood of an impending crash.
A contrary result was reached by the Supreme Court of Kansas despite similar evidence at the scene of a fatal crash. St. Clair v. Denny, 245 Kan. 414, 781 P.2d 1043 (1989) arose out of a highway crash in which the vehicle of a motorist who died as a result of the crash left sixty feet of "yaw" marks (marks made by front wheels turned away from impending impact, but not constituting evidence of an attempt to stop). There was no evidence of conscious pain and suffering. Referring to a prior federal district court case, Fogarty v. Campbell, 66 Exp. Inc. 640 F. Supp. 953 (D.Kan.1986) in which O'Connor, J. predicted that the Kansas Supreme Court would deny recovery for pre-impact emotional distress, the Supreme Court stated that it was not necessary to test Judge O'Connor's prediction because the sixty feet of yaw marks suggest that the decedent might have been aware of the possible collision a moment before the impact but do not support a finding of emotional distress.
There are several federal cases, purporting to apply state law, granting or affirming awards of damages for pre-impact fright in fatal airplane crashes. None of them cites any existing state law on the subject that would justify their conclusions.
In Shu-Tao Lin v. McDonnell Douglas Corp., 742 F.2d 45 (2nd Cir.1984), an award of damages for a deceased passenger's preimpact fear was affirmed on the basis of the court's interpretation of two opinions by the Appellate Division of the New York Supreme Court. Neither of the New York cases relied upon by the federal court is directly on point. Juiditta v. Bethlehem Steel Corp., 75 A.D.2d 126, 428 N.Y.S.2d 535 (1980), involved an award for post-impact pain and suffering, in *498 which the jury was permitted to consider, along with physical pain, emotional distress, including apprehension of impending death. In Anderson v. Rowe, 73 A.D.2d 1030, 425 N.Y.S.2d 180 (1980), the appellate court affirmed denial of any award for conscious pain and suffering by two young girls who were killed when the airplane in which they were travelling crashed. The basis for affirmance was the lack of evidence of conscious pain and suffering; as for pre-impact fright or mental suffering, there was no evidence from which the jury might infer that the girls were aware of danger or suffered any pre-impact fright. The federal court concluded that the failure of the New York appellate court to state that no damages could ever be awarded for pre-impact fright signified that such damages would have been allowable if there had been evidence of awareness of danger.
In Haley v. Pan American World Airways, 746 F.2d 311 (5th Cir.1984), the federal court, purporting to apply Louisiana law of damages, concluded that it allowed recovery for a tort victim's pre-impact "fear of doom" in a fatal airplane crash. There was no Louisiana appellate decision directly on point, but there was precedent for recovery by a tort victim for pre-impact fear followed by injury"fright during ordeal."
The federal court in Platt v. McDonnell Douglas Corp., 554 F. Supp. 360 (E.D.Mich. 1983), undertook to apply Michigan law in awarding damages for pre-impact fright to the surviving family of an airplane crash victim. Michigan does not authorize a survival action; in the absence of any Michigan case law, the district court concluded that such damages were awardable under the Michigan Wrongful Death Act because that statute did not preclude recovery of damages for pre-impact fright.
Purporting to follow Florida law, the federal court in Solomon v. Warren, 540 F.2d 777 (5th Cir.1976), affirmed an award of damages for pre-impact fright to the personal representative of a husband and wife who died when their small plane crashed into the sea. There was no indication that either decedent suffered conscious pain, but the trial judge inferred that they must have suffered excruciating mental pain, realizing that they were about to die leaving their three cherished children alone. Judge Gee, dissenting, pointed out that Florida had always required impact in order to recover for mental distress, i.e., that "compensable pain must be caused by the physical impact." Id. at 96-97. Judge Gee asserted that the majority opinion, which was based on a conclusion that it made no difference whether the mental distress preceded or followed an impact, misconstrued the reasoning behind the Florida rule and created a new element of damages based on "sheer speculation." Id.
A federal district court judge in Delaware, applying what he believed to be Maryland law in D'Angelo v. United States, 456 F. Supp. 127 (D.Del.1978), aff'd, 605 F.2d 1194 (3rd Cir.1979), awarded damages including $25,000 for fright that the judge concluded a passenger in a small plane "must have" suffered over a period of several minutes before the plane crashed after it was struck by a jeep just as it was taking off at an airport in Maryland. The district court judge noted that, under Maryland law, "recovery requires that the defendant's negligence was the direct and proximate cause of the accident, that the victim lived after the accident, and that he suffered conscious pain and suffering... [and] recovery may be had even though the period of time between the accident and the death was short." The recovery for the mental anguish that the court assumed the passenger suffered was for post-impact fright during the period between the time when the jeep hit the plane and the time the plane crashed. The Third Circuit Court of Appeals affirmed the judgment summarily, without opinion.
We do not consider any of the federal airplane crash cases to be persuasive in our analysis of Maryland law. We must look to Maryland case law on the subject of damages under analogous circumstances.
Eighty-eight years ago, in the seminal case of Green v. T.A. Shoemaker & Co., 111 Md. 69, 73 A. 688 (1909), the Court of Appeals, for the first time in this State, recognized the right to recover for fright resulting in a "material physical injury," caused by a wrongful act, even though there was no evidence of "physical impact or corporal injury *499 to the plaintiff." The wrongful act or series of acts in that case, constituting an actionable nuisance, consisted of repeated blasting of large quantities of rocks by explosives during construction work on a railroad line about two hundred yards from the plaintiff's dwelling. The blasting shook the house and caused plaster to fall and the explosives hurled large rocks that crashed through walls, ceilings, windows, and doors. The plaintiff and others in the house were in constant fear of being killed. The plaintiff testified that her "nerves were completely broken down by fright and [she] was not able to do [her] work." She further testified that before the blasting started she was in ordinary health and never was nervous. "Since then," she said, "I have had no health at all." Her family physician testified that after the blasting began the plaintiff developed "nervous prostration" which he attributed to the shock of the blasting.
The Court, noting that there was "a wide divergence of judicial opinion as to whether a cause of action will lie for actual physical injuries resulting from fright and nervous shock caused by the wrongful acts of another," stated that "it may be considered as settled, that mere fright, without any physical injury resulting therefrom, cannot form the basis of a cause of action." Id. at 77, 73 A. 688. (Emphasis in original.) "This is so," the Court explained, "because mere fright is easily simulated, and because there is no practical standard for measuring the suffering occasioned thereby, or of testing the truth of the claims of the person as to the results of the fright. But when it is shown that a material physical injury has resulted from fright caused by a wrongful act, and especially, as in this case, from a constant repetition of wrongful acts, in their nature calculated to cause constant alarm and terror, it is difficult, if not impossible, to perceive any sound reason for denying a right of action in law, for such physical injury." Id. (Emphasis in original.)
The Court in Green v. Shoemaker further observed that courts that had denied recovery for physical injuries caused by fright did so upon two-fold grounds: " `1st, that physical injury produced by mere fright caused by a wrongful act, is not the proximate result of the act; and 2nd, that upon the ground of expediency, the right should be denied, because of the danger of opening the door to fictitious litigation, and the impossibility of estimating damages.' Huston v. Freemansburg, 3 L.R.A. New Series, page 50, Editor's note." The Court rejected the first of those grounds on the basis of its earlier holding in Baltimore City Passenger Railway Co. v. Kemp, 61 Md. 74, 80-81 (1883), in which it said:
It is not simply because the relation of cause and effect may be somewhat involved in obscurity, and therefore difficult to trace, that the principle obtains that only the natural and proximate results of a wrongful act are to be regarded. It is only where there may be a more direct and immediate sufficient cause of the effect complained of, that the more remote cause will not be charged with the effect. If a given effect can be directly traced to a particular case, as the natural and proximate effect, why should not such effect be regarded by the law, even though such cause may not always, and under all conditions of things, produce like results? It is the common observation of all, that the effects of personal physical injuries depend much upon the peculiar conditions and tendencies of the person injured; and what may produce but slight and comparatively uninjurious consequences in one case, may produce consequences of the most serious and distressing character in another. * * * Hence, the general rule is, in actions of tort like the present, that the wrongdoer is liable for all the direct injury resulting from his wrongful act, and that too, although the extent or special nature of the resulting injury could not, with certainty, have been foreseen or contemplated as the probable result of the act done.
Green v. Shoemaker, 111 Md. at 77-78, 73 A. 688 (emphasis in original).
Addressing the question of "expediency," i.e., the "danger of opening the door to fictitious litigation," as a reason for denying recovery for physical injuries resulting from fright caused by tortious conduct, the Court stated:
*500 The argument from mere expediency cannot commend itself to a Court of justice, resulting in the denial of a logical legal right and remedy in all cases, because in some a fictitious injury may be urged as a real one. The apparent strength of the theory of expediency lies in the fact that nervous disturbances and injuries are sometimes more imaginary than real, and are sometimes feigned, but this reasoning loses sight of the equally obvious fact that a nervous injury arising from actual physical impact is as likely to be imagined as one resulting from fright without physical impact, and that the former is as capable of simulation as the latter.
It must be conceded that the numerical weight of authority supports the general rule that there can be no recovery for nervous affections unaccompanied by contemporaneous physical injury, but the sounder view, in our opinion, is that there are exceptions to this rule, and that where the wrongful act complained of is the proximate cause of the injury, within the principles announced in Kemp's Case, supra, and where the injury ought, in the light of all the circumstances, to have been contemplated as a natural and probable consequence thereof, the case falls within the exception and should be left to the jury.
Id. at 81, 73 A. 688 (emphasis in original).
The Court of Appeals has continued to apply the principles and follow the reasoning of Green v. Shoemaker. In Bowman v. Williams, 164 Md. 397, 165 A. 182 (1933), there was evidence to the effect that the plaintiff, who saw a coal truck crash into the basement of his house, was so affected with fright and alarm for the safety of his children who were in the basement that he suffered a severe shock to his nervous system, as a result of which he could not work for six months. The Court held that the evidence was sufficient to support an award of damages, stating, at 404:
In Maryland, the decision in Green v. T.A. Shoemaker & Co., 111 Md. 69, 76-83, 73 A. 688, and followed in Baltimore & O.R. Co. v. Harris, 121 Md. 254, 268-270, 88 A. 282; Patapsco Loan Co. v. Hobbs, 129 Md. 9, 16, 98 A. 239, and Great Atlantic and Pacific Tea Co. v. Roch, 160 Md. 189, 153 A. 22, have settled the principle that a plaintiff can sustain an action for damages for nervous shock or injury caused, without physical impact, by fright arising directly from defendant's negligent act or omission, and resulting in some clearly apparent and substantial physical injury, as manifested by an external condition or by symptoms clearly indicative of a resultant pathological, physiological, or mental state.
In Vance v. Vance, 286 Md. 490, 408 A.2d 728 (1979), the Court held that, despite the absence of medical testimony, the evidence supported an award of damages for emotional distress suffered by the plaintiff, Muriel Vance, as a result of negligent misrepresentation by Dr. Arnold Vance that he was divorced at the time he and Muriel participated in a religious marriage ceremony. The plaintiff's son testified that after his mother discovered that her marriage of eighteen years was a nullity, her appearance "changed from that of a woman of beauty to a person who looked `a wreck,' with unkempt hair, sunken cheeks, and dark eyes." Her son stated that he has great difficulty in communicating with her, that she was detached, unaware of her own presence, and spent long periods of time crying and sobbing. Following the rule in Green v. Shoemaker and Bowman v. Williams recognizing that an action may be maintained for mental distress when such distress results in "material physical injury," the Court held that the term "physical" was not used in the ordinary dictionary sense, but was "used to represent that the injury for which recovery is sought is capable of objective determination."
Faya v. Alvaraz, 329 Md. 435, 620 A.2d 327 (1993), began with two separate actions by female patients who alleged that they suffered fear of acquiring the AIDS virus from the surgeon who operated on them without disclosing that he was HIV positive. Both alleged that their fear and mental distress upon learning that the surgeon had AIDS was accompanied by headaches and sleeplessness, and they had to endure the physical and financial sting of blood tests for the AIDS virus. Citing Green v. Shoemaker and cases that had followed and expanded *501 upon it, including Bowman v. Williams and Vance v. Vance, the Court held that the plaintiffs may recover for those injuries "to the extent that they can objectively demonstrate their existence." 329 Md. at 459, 620 A.2d 327.
Belcher v. T. Rowe Price, 329 Md. 709, 621 A.2d 872 (1993), was a workers' compensation case. Mrs. Belcher, an employee of T. Rowe Price, was at her desk, working, when a three-ton beam being hoisted by a construction crane during the erection of a building next door broke loose without warning and crashed through the concrete roof over Mrs. Belcher's head, landing five feet from her. Although she sustained no bodily injury directly from the impact, she suffered severe mental and emotional distress that resulted in sleep disturbances, nightmares, heart palpitations, chest pain, and headaches. The issue before the Court was whether Mrs. Belcher had sustained a compensable accidental injury. Since the Workers' Compensation Act did not define "injury" in terms of physical or mental trauma, the Court turned to tort cases for guidance. Citing and quoting extensively from Green v. Shoemaker and the cases that followed it, particularly Bowman v. Williams and Vance v. Vance, which refined the meaning of "material physical injury" resulting from fright or emotional distress that would support a cause of action, the Court ruled that "an injury under the Act may be psychological in nature if the mental state for which recovery is sought is capable of objective determination."
Finally, in Dobbins v. Washington Suburban Sanitary Commission, 338 Md. 341, 658 A.2d 675 (1995), the Court of Appeals was presented with an issue of whether recovery could be had for emotional distress resulting in alleged physical problems caused by negligent release of a large amount of water that greatly damaged the plaintiffs' home. The Court, reviewing the line of cases from Green v. Shoemaker to Belcher v. T. Rowe Price, said:
We have advanced two separate theories under which we have limited recovery for emotional distress. First, motivated by a concern over feigned claims, we adopted the so called "physical impact" rule and later the "physical injury" rule. Under the "physical impact" rule, which we followed in Maryland until our decision in Green v. T.A. Shoemaker & Co., 111 Md. 69, 73 A. 688 (1909), a plaintiff could not recover for emotional distress unless "there was physical impact upon the plaintiff coincident in time and place with the occasion producing the mental distress." See Vance v. Vance, 286 Md. 490, 496-97, 408 A.2d 728 (1979). When we rejected the "physical impact" rule in Green, we adopted the "physical injury" rule, which "permitted recovery for negligent infliction of mental distress if a `physical injury' results from the commission of a tort, regardless of impact." See Vance, supra, 286 Md. at 497, 408 A.2d 728. Then, in Bowman v. Williams, 164 Md. 397, 165 A. 182 (1933), we said that physical injury could be "manifested by an external condition or by symptoms clearly indicative of a resultant pathological, physiological, or mental state." Id. at 404, 165 A. 182. Later, in Vance, supra, we stated:
"We think it clear that Bowman provides that the requisite `physical injury' resulting from emotional distress may be proved in one of four ways. It appears that these alternatives were formulated with the overall purpose in mind of requiring objective evidence to guard against feigned claims. The first three categories pertain to manifestations of a physical injury through evidence of an external condition or by symptoms of a pathological or physiological state. Proof of `physical injury' is also permitted by evidence indicative of a `mental state,'.... In the context of the Bowman rule, therefore, the term `physical' is not used in its ordinary dictionary sense. Instead, it is used to represent that the injury for which recovery is sought is capable of objective determination."
Id. at 500, 408 A.2d 728.
In Belcher, supra, we noted that the "physical injury" rule had dispelled "the fear that the right to damages for emotional distress would open the floodgates to feigned claims." Id. at 734, 621 A.2d 872. We further stated: "Vance adequately answered *502 the troubling basic policy issues surrounding the definition of the limits of liability for negligently inflicted emotional harm by requiring that such harm be capable of objective determination. Such an objective determination provides reasonable assurance that the claim is not spurious." Id. at 735, 621 A.2d 872.
A second and separately viable theory under which we have limited recovery for emotional injuries is based on the rules concerning foreseeability of harm, which courts have used both "in determining the existence of a duty owed to the Plaintiff [and] in resolving the issue of proximate cause." Henley v. Prince George's County, 305 Md. 320, 333, 503 A.2d 1333 (1986). We have explained that the foreseeability rules exist "to avoid liability for unreasonably remote consequences." Id. at 333, 503 A.2d 1333. Further, we have stated:
"In applying the test of foreseeability... it is well to keep in mind that it is simply intended to reflect current societal standards with respect to an acceptable nexus between the negligent act and the ensuing harm, and to avoid the attachment of liability where, in the language of Section 435(2) of the Restatement (Second) of Torts (1965), it appears `highly extraordinary' that the negligent conduct should have brought about the harm."
Id. at 334, 503 A.2d 1333.
In this context, we have distinguished the duty inquiry from the proximate cause inquiry. In Henley, supra, 305 Md. at 336, 503 A.2d 1333, we said: "Foreseeability as a factor in the determination of the existence of a duty involves a prospective consideration of the facts existing at the time of the negligent conduct. Foreseeability as an element of proximate cause permits a retrospective consideration of the total facts of the occurrence...." See also Stone v. Chicago Title Ins., 330 Md. 329, 338, 624 A.2d 496 (quoting Henley).
Dobbins, 338 Md. at 347-348, 658 A.2d 675.
It was on the basis of lack of foreseeability, rather than any retreat from the holdings and reasoning of Green v. Shoemaker, Bowman v. Williams, Vance v. Vance, and Belcher v. T. Rowe Price, that the Court held that the Dobbinses could not recover for the emotional distress resulting from the Sanitary Commission's negligent discharge of water, even if the emotional distress resulted in physical problems that would have satisfied the test of "pathological, physiological, or mental state" referred to in Bowman or injury "capable of objective determination" as described in Vance.
The Dobbinses pointed to the following language in Belcher as a basis for abandoning the rule adopted by the Court in State v. Baltimore Transit Co., 197 Md. 528, 539, 80 A.2d 13 (1951) that "[u]nder ordinary circumstances there can be no recovery for mental anguish suffered by plaintiff in connection with an injury to his property.":
"We have traced the development of the law of Maryland as interpreted in our judicial opinions concerned with liability for negligently inflicted mental harm, from a standard limiting such liability to purely physical trauma to a standard permitting recovery for damages for trauma resulting from purely emotional distress that can be objectively determined. The recognition that a person should be compensated for mental harm resulting from the negligent act of another is in accord with the ever increasing knowledge in the specialties which have evolved in the field of medicine and in the disciplines of psychiatry and psychology. Persons suffering from severe mental distress are no longer simply warehoused in Bedlam type institutions; they are treated by medical experts at no small cost. We are now aware that mental injuries can be as real as broken bones and may result in even greater disabilities."
To that argument the Court replied:
Clearly, however, these comments referred only to the trend toward liberalizing the "physical injury" rule. We did not in any way signal relaxation of the foreseeability rules relating to duty and proximate cause, which formed the basis of the Baltimore Transit rule. Indeed, we reaffirm the conclusions reached in Baltimore Transit that (1) ordinarily, emotional injuries are not the consequences that ensue in the ordinary and natural course of events' from *503 negligently inflicted property damage and (2) such injuries should not be contemplated, in light of all the circumstances, "as a natural and probable consequence" of a negligently inflicted injury to property.
From the cases cited above, we conclude that there can be no award of damages for pre-impact fright suffered by a tort victim who died instantly upon impact or who never regained consciousness after the impact, because no cause of action will lie for "mere fright" without physical injury (Green v. Shoemaker) or injury capable of objective determination (Vance) resulting therefrom. Obviously, one who died instantly upon impact or at least died without recovering consciousness following impact cannot have suffered any injury capable of objective determination as a result of preimpact fright," i.e., fear, terror, or mental anguish or distress from anticipation of imminent injury or death.
If the reluctance to award damages for "mere fright" stemmed from concern about the "danger of opening the door to fictitious litigation," or "expediency," referred to in Green v. Shoemaker, 111 Md. at 77-81, 73 A. 688, the fact that there was an impact after the tort victim experienced the fright might tend to alleviate that concern. But the Court of Appeals in Green v. Shoemaker expressly excluded "expediency" as a basis for denying recovery of damages for fright. Id. The Court of Appeals stated unequivocally in Green v. Shoemaker and has since repeatedly reaffirmed that, to be compensable, fear suffered by a tort victim must result in an injury capable of being determined by objective signs or symptoms. When, as in this case, the tort victim dies instantly or, at least without regaining consciousness, from the impact, there is no evidence of injury resulting from fright. Indeed, although there is a reasonable inference in this case, from the existence of skid marks, that the deceased may have experienced some mental distress upon realizing his peril, the extent of that distress and its consequences is a matter of sheer speculation, there being, in the language employed by the Court of Appeals, "no practical standard for measuring the suffering occasioned by" that mental distress. Green v. Shoemaker, 111 Md. at 77, 73 A. 688.
It should be recognized that pre-impact fright, mental distress caused by expectation or anticipation of impending doom, is an entirely different phenomenon from post-impact mental suffering or emotional distress. The latter results from and exacerbates bodily injuries sustained upon impact, e.g., concern about the extent of recovery and the length of the recovery period; worry over the effect of the injuries and the duration of the recovery period on the victim's finances; and, if there is not a complete recovery, the loss of happiness or enjoyment of life suffered by one who has been rendered unable to do at all or do with the same degree of facility those things that formerly produced pleasure. All of those forms of mental distress are as much the natural, proximate, and foreseeable result of tortious conduct as bodily injury and physical pain. Pre-impact fright engendered by recognition of danger, however, does not result from bodily injuries and is compensable only to the extent that it causes or results in demonstrable or objectively determinable injury.
III.
The jury awarded economic damages of $212,000.00 to Mr. Beynon and $165,000.00 to Mrs. Beynon. We agree with appellants' contention that the judgments for pecuniary or economic damages cannot be sustained.
Maryland's wrongful death statute, Md. Code (1974, 1995 Repl.Vol., 1996 Supp.) § 3-901, et seq., of the Courts and Judicial Proceedings Article provides in pertinent part:
§ 3-904. Action for wrongful death.
* * * * * *
(e) Damages if unmarried child, who is not a minor, dies.For the death of an unmarried child, who is not a minor child, the damages awarded under subsection (c) are not limited or restricted by the "pecuniary loss" or "pecuniary benefit" rule but may include damages for mental anguish, emotional pain and suffering, loss of society, companionship, comfort, protection, care, attention, advice, counsel, training, or guidance where applicable if:
*504 (1) The child is 21 years or younger; or
(2) A parent contributed to more than 50 percent or more of the child's support.
On the date of the accident, the decedent was approximately nineteen and one half years old. He held a full-time job as a parts delivery person, was living in his parents' home, and had been paying them $150.00 in monthly rent. In addition to his full-time job, the decedent performed various household services for his parents, e.g., lawn maintenance, auto repair, etc. During the direct examination of the decedent's father, the jury heard the following testimony:
[COUNSEL FOR APPELLANTS]: Did your son make contributions around the home?
[MR. BEYNON]: Yes, he did.
[COUNSEL FOR APPELLANTS]: Can you tell us about those?
[MR. BEYNON]: Wewe had tried to instill a sense of responsibility in him. We had required that he pay us $150 a month for rent. He did variousjust about anything I asked him around the house, routine; whether it was grass cutting, working on the automobiles. He also worked with me, helped me out on occasion install kitchens and baths and do all of the various trades that were a part of that, and he would help me out on occasion with that, too.
[COUNSEL FOR APPELLANTS]: You said your son was required to pay $150 for his room. Did he in fact pay those fees?
[MR. BEYNON]: Yes, he did.
* * * * * *
[COUNSEL FOR APPELLEES]: What type of work did your son do, when you intended for your son to work with you?
[MR. BEYNON]: ... [H]e was supposed to start working with me right after he got out of high school. He was supposed to start. And I had mixed feelings about it. I wanted him to work with me, but yet I didn't want him to be in this work 20 years down the road....
[COUNSEL FOR APPELLEES]: Did there come a time at all that you found out your son's ideas about working with you?
[MR. BEYNON]: Yes. After he passed away, [we] were going through his belongings and we found a letter that he had written to a friend back in West Virginia. And I didn't realize itI didn't realize it at the time until we read that letter ... and in it he had stated he was going to start working with me. And by the way everything was worded in it, he was really looking forward to it.
The evidence showed that the decedent's payment of rent amounted to $150.00 per month. No evidence was presented to show that the decedent planned to live in his parents' home indefinitely. Douglas Beynon, Sr. was self-employed in the contracting business at the time of his son's death. Mr. Beynon did testify that his son planned to work for the family business in the future, but no evidence was presented as to how much the decedent would earn or what portion of his earnings he would contribute to his parents. That the decedent had been paying his parents $150.00 per month in rent, and had been occasionally helping out with household chores, is insufficient to support either award of pecuniary damages.
We note that, prior to instructing the jury, the trial judge examined the proposed verdict sheet with counsel:
[THE COURT]: ... I mean, at best, it seems to me that the economic benefit thatthe evidence has been $150.00 a month, I mean, you know, and it is going to be minimal at best anyway, but this case is all about past and future mental pain and suffering.
We agree with that evaluation; the appropriate focus of the parents' damage claim was past and future mental pain and suffering, not economic damages. Therefore, we vacate the award of economic damages.
IV. & V.
To recover for negligence, a plaintiff must prove the existence of four elements: a duty owed to him, a breach of that duty, a *505 causal connection between the breach and the injury, and damages.
Southland Corp. v. Griffith, 332 Md. 704, 712, 633 A.2d 84 (1993) (citations omitted).
A. Duty
Montgomery Cable initially argues that it owed no duty to the decedent because the State Police were solely responsible for stopping traffic. That assertion ignores Montgomery Cable's explicit duty to warn oncoming motorists that the road ahead had been closed.
Section 8-204 of the Transportation Article provides that the State Highway Administration ("SHA") is the governmental entity charged with maintaining all State highways. Md.Code (1977, 1993 Repl.Vol., 1996 Supp.), § 8-204(c) of the Transportation Article (Transp.). In accordance with its authority, the SHA may issue permits allowing certain organizations, i.e., utilities, to enter or obstruct a State Highway for certain specific purposes. Transp. § 8-646(a). In 1990, Montgomery Cable was issued such a permit. That permit, however, was conditioned on the observance of certain basic safety procedures.
Subsection (3) of the permit, entitled "traffic control," provided that "[l]ights, signs, barricades, etc., shall be maintained by the Permittee [Montgomery Cable]" as per Federal Highway Administration and SHA requirements. SHA traffic control standards in place in 1990 required that road closure signs be placed intermittently, beginning at a point no closer than two miles from the designated repair site. In addition, SHA standards required the use of flag persons and flashing lights to warn oncoming motorists, and that traffic be periodically "ventilated" to prevent too long a backup. The jury was entitled to find that the specific conditions set forth in the permit explicitly imposed on Montgomery Cable a duty to the decedent at the time and location of the accident.
Montgomery Cable also contends that it had assigned its duty to the State Police. There is no merit in that contention. The State Police merely stopped traffic at the crossing site; it never undertook the responsibility to post lights, signs, markers, barriers, or other warning devices. Montgomery Cable remained responsible for alerting motorists approaching the backup.
B. Breach
The jurors were entitled to conclude that Montgomery Cable had breached its duty to the decedent by (1) failing to erect the warning devices called for in the permit, (2) assigning employees to the job site who were unfamiliar with SHA safety requirements, and (3) informing the State Police that the repairs would take only five to ten minutes.
Montgomery Cable concedes that it did not place any warning signs, lights, or markers of any sort along the roadway approaching the repair location. It simply contacted the State Police and requested that they stop traffic. Montgomery Cable employees testified that they were unfamiliar with SHA safety requirements. The following transpired during the testimony of Montgomery Cable's Director of Construction, Dennis Setting:
[COUNSEL FOR APPELLEES]: Whenever an emergency crew established a road closure on behalf of Cable TV Montgomery, if no State Police were present then Cable TV Montgomery would be responsible for controlling traffic and posting traffic control devices, is that correct?
...
[SETTING]: Sure.
[COUNSEL FOR APPELLEES]: But if the State Police showed up or were called in, then the emergency crew in the eye of Cable TV Montgomery didn't have to be concerned with the traffic control, is that right?
[SETTING]: Well, I wouldn't say not concerned, but youthe State Police took over.
[COUNSEL FOR APPELLEES]: Cable TV [Montgomery] would look to the State Police to handle the traffic control, is that right?
[SETTING]: Yes.
*506 [COUNSEL FOR APPELLEES]: And you don't know of any documents that set forth this practice, if you will, on behalf of Cable TV Montgomery do you?
[SETTING]: No, sir.
[COUNSEL FOR APPELLEES]: You don't know of any rules or regulations or procedure manuals from any governmental agency that said anything about such a practice around June of 1990, do you?
[SETTING]: No, sir, I don't.
The repairs actually took thirty to forty-five minutes. A Montgomery Cable employee informed the State Police Officers at the construction site that the necessary repairs would only warrant a five to ten minute highway closure. It is understandable that a person would have difficulty estimating how long the repairs would actually take. It is inexcusable, however, to ignore SHA requirements on the basis of such an estimate.
C. Proximate Cause
Montgomery Cable argues that, even if it did breach a duty to the decedent, any such breach could not have been the proximate cause of the accident because of two separate, intervening acts of negligence: (1) the State Police Officers' failure to stop traffic properly, and (2) the failure of Kirkland and Lee to provide for adequate lighting on the rear of their trailer.
It is generally held that negligence is the proximate cause of an injury when the injury is the natural and probable result or consequence of the negligent act or omission. The test is whether the injury sustained was that which was reasonably foreseeable, in light of the surrounding circumstances. It is equally correct, however, that proximate cause must be decided in a common-sense fashion in light of the attendant facts and circumstances, and, unless the facts are undisputed and admit of but one inference, the question is for the jury.
Medina v. Meilhammer, 62 Md.App. 239, 247, 489 A.2d 35, cert. denied, 303 Md. 683, 496 A.2d 683 (1985) (citations and internal quotations omitted); See also Bloom v. Good Humor Ice Cream Co., 179 Md. 384, 18 A.2d 592 (1941).
Montgomery Cable never told the State Police that it would be necessary to stop traffic for up to forty-five minutes. As the decedent approached the accident scene, no warning signs alerted him to the fact that traffic had been completely stopped. Gershon Alexander, an expert testifying for appellees, explained:
Looking at the situation here, as young Mr. Beynon comes around the Beltway ... he has no information related to the blockage of the freeway....
And so we don't expect, drivers don't expect freeways to be blocked....
And ... what we do expect is that when something like that will occur that we expect to be notified enough in advance so we can take effective action; either get off the highway and take another route, or start looking for a backup, or the like.
So the condition of the highway was a surprise to Mr. Beynon, would be a surprise to anyone, and the lack of information made it even more of a surprise because then he was put in a position of having to detect and recognize a situation for which he was essentially not prepared.
...
... drivers are owed an obligation by the people who are working on or adjacent to the highway to give them the information they need to avoid accidents.
...
My opinion is that the lack of appropriate advance warning played a role in the perception reaction time of Mr. Beynon and, therefore, played a role in the causation of the accident.
The evidence was more than sufficient to persuade the jury that the accident in question was the natural and probable result of Montgomery Cable's failure to do what it was obligated to do on the occasion at issue.
There is also no merit in Montgomery Cable's argument that it is relieved of liability because others committed intervening acts of negligence. In order for an intervening cause to relieve a defendant of liability, the subsequent cause must "so entirely *507 supersede[ ] the operation of the defendant's negligence [so] that it alone, without his negligence contributing thereto in the slightest degree, produces the injury." Palms v. Shell Oil Co., 24 Md.App. 540, 544, 332 A.2d 300 (1975) (citation omitted). In this case, Montgomery Cable had an express duty to act (place warning lights or signs, use flag persons, etc.), in order to warn approaching motorists of the road closure. It is obvious that such duty was not confined to the point where the two State Police Officers brought traffic to a halt. Rather, Montgomery Cable's duty to oncoming traffic extended to motorists approaching the location where the decedent struck the rear of the Kirkland vehicle. Under these circumstances, any negligent actions of the State Police or Kirkland and Lee were concurrent, not superseding, causes of the accident.[3]
The issue of Montgomery Cable's primary negligence was properly submitted to the jury, and the jury's finding is amply supported by the evidence.
VI.
Montgomery Cable argues that the trial judge committed reversible error when he instructed the jury on (1) sudden emergency, (2) the responsibility of the State Police, and (3) presumptions regarding the decedent's conduct. We are not persuaded that any error occurred.
A. Sudden Emergency
The court gave the following "sudden emergency" instruction:
When the driver of a motor vehicle is faced with a sudden and real emergency which was not created by the driver's own conduct, the driver must exercise reasonable care for his or her own safety and for the safety of others.
...
The driver is not to be held to the same coolness or accuracy of judgment which is required of a person who has an ample opportunity to fully exercise personal judgment.
Montgomery Cable contends that this instruction should not have been given because there "was no evidence that the decedent was faced with any emergency (other than the one he himself created)." There is no merit in that contention.
The jury heard testimony that the decedent was confronted with a poorly illuminated vehicle stopped in the middle of Interstate 495 at a point where no signs had been posted to alert oncoming motorists about the road closure. The jury was entitled to find that the decedent was thereby confronted with an unusual condition requiring a sudden response. See Ryan v. Thurston, 276 Md. 390, 347 A.2d 834 (1975); Warnke v. Essex, 217 Md. 183, 141 A.2d 728 (1958) ("[w]hether the operator of an automobile was confronted with an emergency, and whether he acted negligently under the circumstances, are generally questions for the jury"). The "sudden emergency" instruction, therefore, was appropriate and legally correct.
B. State Police Responsibility
Montgomery Cable also finds fault with the court's refusal to instruct the jury that the State Police had the authority to, and did in fact, stop and control traffic at the time of the accident.
While it is true that the State Police did stop traffic on the occasion at issue, the jury was entitled to conclude that Montgomery Cable had an independent duty to warn approaching motorists of the fact that traffic had been stopped. Because the proposed *508 instruction was at odds with the evidence presented regarding the existence of that independent duty, Montgomery Cable was not entitled to the requested instruction.
C. Contributory Negligence Presumptions
Montgomery Cable argues that the court should not have instructed the jury that "[t]here is a presumption that Douglas Beynon, Jr. exercised due care for his own safety[,]" in light of what Montgomery Cable views as overwhelming evidence of the decedent's own contributory negligence.
We agree with Montgomery Cable that if contributory negligence has been established as a matter of law no "due care" presumption is applicable. As we discussed previously, however, the decedent's contributory negligence was a question for the jury.
Addressing the "due care" presumption, the Court of Appeals said:
We begin with recognizing the presumption of due care existing in favor of the deceased. If there is countervailing evidence that is so slight as to be insufficient to be considered by the jury in rebuttal of the presumption, the court should grant an instruction giving full benefit of the presumption of due care to the plaintiff. On the other hand, the countervailing evidence may be so conclusive that it shifts the burden or duty of going forward with the evidence back to the plaintiff, in which event the defendant would be entitled to a directed verdict, if the plaintiff does not produce evidence in reply, unless there is already evidence in the case tending to contradict the defendant's evidence. Again, there may be times when the evidence may fall between the two categories mentioned above, in which event the issue of due care should be submitted to the jury.
Bratton v. Smith, 256 Md. 695, 703, 261 A.2d 777 (1970) (emphasis supplied). In this case, the evidence of the decedent's contributory negligence fell somewhere in between those two extremes and, therefore, the instruction was properly given.
VII.
Lumbermens argues that the court erred in refusing to allow its expert witness to testify regarding certain photographs of the accident scene. Harry Kriemelmeyer, a registered professional engineer, was qualified as an expert in accident reconstruction. During his testimony, counsel for Lumbermens asked him to interpret several photographs of the accident scene taken by the Maryland State Police. After Mr. Kriemelmeyer expressed difficulty in distinguishing lights from flashbulb glare in certain photographs, appellees' counsel moved to strike his testimony. The following transpired when the court questioned Mr. Kriemelmeyer about his expertise in the area of photography:
[THE COURT]: Tell me, sir. Is your opinion with regard to this based upon anything you can point to in terms [of] your work history and the use of photographs and the like?
[KRIEMELMEYER]: I have used photographs in probably half of the reconstruction engineering I have done.
[THE COURT]: I am sure you have. I know. But I am talking about this is something that is a little more finite than that. We are talking now about taking photographs at night of lights which are on or off, as the case may be.
Can you point to anything in your history as far as your training in this area that would put you in a category of having more knowledge of this than I, walking up and looking at it. I can tell you I have no knowledge of it.
What would make you more able than I to tell these people over here what your opinion is as to what that is?
[KRIEMELMEYER]: I have had no classes in such topics. I have used photography. I have used nighttime photography in night vision situations. I have studied reflectors, I have studied a number of trailer underride accidents using nighttime photography. If there are small yellow lights on the side, what they would look like from up the road, et cetera. I have taken pictures of trucks, lights on, lights *509 off, using flash at night and I have been there.
The court then allowed appellees' counsel to voir dire Mr. Kriemelmeyer, and the following exchange ensued:
[COUNSEL FOR APPELLEES]: We don't dispute your ability to use photographs for the court that you are doing as an accident reconstructionist, but tell me isn't it a fact that you don't have any experience as a forensic photographer?
[KRIEMELMEYER]: I think you are on a term I don't equate with. I have used pictures for forensic study and evidence in many, many cases. Because often, that is all you have.
* * * * * *
[COUNSEL FOR APPELLEES]: In your curriculum vita, you have at no point indicated that you are [an] expert in photographic examination, is that correct?
[KRIEMELMEYER]: No. That is correct.
The court then announced the following ruling:
[THE COURT]: The motion is granted. I am going to disallow any further elaboration on either of these two photographs[.] I am going to strike from the record what has been rendered thus far with regard to these photographs along this particular line.
* * * * * *
Let the record be clear on this. This is a rather critical, absolutely critical point in this case with regard to whether or not those lights were on.
* * * * * *
But the reason why I disallowed the testimony was because this guy is apparently going to come in with no background at all in analysis of photographs, and look at the photographs and say, eureka, they are on. I mean, it is startling on a critical portion of this.... And he clearly cannot, and I will not allow him to make analyses from these photographs with regard to whether or not these lights were on or off.
In Winkler v. State, 40 Md.App. 616, 622, 392 A.2d 1173 (1978), we stated:
"[T]he admissibility of expert testimony is a matter largely within the discretion of the trial court and its action will seldom constitute a ground for reversal," notwithstanding that "the trial court's determination is reviewable on appeal ... and may be reversed if it is founded on an error of law or some serious mistake, or if the trial court clearly abused its discretion."
See also Radman v. Harold, 279 Md. 167, 367 A.2d 472 (1977). In this case, Mr. Kriemelmeyer conceded that he could not differentiate between lights on the back of the Kirkland truck and glare caused by the flashbulb of the camera. Moreover, he had no special training in photographic analysis or photography. We agree with the trial judge that Mr. Kriemelmeyer's training and work experience did not qualify him to testify as an expert in the field of photography. There was no abuse of discretion in granting appellees' motion to strike Mr. Kriemelmeyer's opinion on the issue of whether the photographs showed that the lights of the Kirkland vehicle "were on or off."
VIII.
At the time of his death, the decedent was driving a vehicle owned by his employer, registered in the state of Virginia, and insured under a Lumbermens policy. When Lumbermens moved for judgment on its cross-claims at the close of evidence, the court "reserved" ruling on the motion, stating:
It presents the trial court with a real quandary. There is no question but that there is not any evidence of insurance or amounts of insurance involved in the case, and then, of course, you renewed your motion to get out of the case, Lumbermens and State Farm, and the temptation, of course, is there to allow you to get out of the case at this juncture, but then that could create ... and this is all under Virginia lawas I understand the scenario here, if the jury brings back a verdict of any proportion whatever against the two individuals, then the plaintiffs will be seeking *510 reimbursement for that amount from these two defendants.
* * * * * *
It is my firm belief, however, that if I were to let you jump off the bandwagon now that it would only gum up the whole procedure, and I am going to keep you in, but I still have an ace in the hole.
I still have my ruling on the motion depending on what the jury does; okay?
After the jury rendered its verdict, Lumbermens again moved for judgment on the cross-claims it had filed against James Kirkland and James Lee, the owner and driver of the truck involved in the accident with the decedent. The court "ordered that [the] cross-claims be dismissed without prejudice as moot." Lumbermens now argues that it is entitled to judgment on its cross-claims against James Kirkland and James Lee. We disagree.
Maryland Rule 2-503(b) vests the trial court with wide discretion to order a separate trial for any claim, cross-claim, counterclaim, or third party claim in furtherance of convenience or to avoid prejudice. The appellate court "must first determine whether the court's decision served the purpose of Rule 2-503(b) and whether appellants suffered any unfair prejudice as a result of that decision." Myers v. Celotex Corp., 88 Md.App. 442, 449, 594 A.2d 1248 (1991), cert. denied, 325 Md. 249, 600 A.2d 418 (1992). In this case, the trial judge recognized that entering judgment on the cross-claims prior to jury deliberations would potentially complicate the litigation. In "furtherance of convenience," he reserved ruling on Lumbermens' motions until after the verdict was returned. After the verdict was reached by the jury, he dismissed the cross-claims "without prejudice." We are not persuaded that appellants were unfairly prejudiced by that exercise of discretion.
JUDGMENT IN FAVOR OF JULIA D. BEYNON AS PERSONAL REPRESENTATIVE OF THE ESTATE OF DOUGLAS K. BEYNON, JR. VACATED AS TO AWARD OF DAMAGES FOR PRE-IMPACT FRIGHT AND AFFIRMED AS TO AWARD OF DAMAGES FOR FUNERAL EXPENSES.
JUDGMENTS IN FAVOR OF JULIA D. BEYNON AND DOUGLAS K. BEYNON, SR., VACATED AS TO AWARDS OF DAMAGES FOR ECONOMIC LOSSES AND AFFIRMED AS TO AWARDS OF DAMAGES FOR PAST AND FUTURE MENTAL PAIN AND SUFFERING.
COSTS TO BE PAID ONE-HALF BY APPELLANTS AND ONE-HALF BY APPELLEES.
MURPHY, Chief Justice, dissenting.
In this case, in my view, there is no question but that there had to have been absolute overwhelming mental anguish on the part of [the tort victim] between the moment that he saw the danger and the time that there actually was a crash.
With the above explanation, the able, experienced trial judge rejected appellant's contention that pre-impact fright damages are not recoverable under the facts of this case. The jury obviously agreed with that analysis. I also agree with the trial judge, and therefore dissent from the majority's decision to reduce the judgment by the amount awarded for the decedent's pre-impact fright.
A survivor's action simply does not present the danger of a spurious claim. Proof that the victim's injuries were fatal more than satisfies the "objective manifestation" requirement for awards based on the victim's fright. Moreover, pre-impact fright damages are not recoverable in such cases unless there is circumstantial evidence that the decedent made a conscious effort to avoid the collision. In this case, the circumstantial evidence proved beyond any doubt that the decedent made such an effort.
Under the circumstances of this tragic case, the pre-impact fright claim was properly submitted to the jury, and the jury's verdict should not be disturbed. The pre-impact fright award is consistent with both Court of Appeals' precedent and the survivor's action provided for by a General Assembly that recognized the unfairness in allowing *511 tortfeasors to benefit because the injuries they caused were fatal rather than serious.
NOTES
[1] At the location of the cable repair, Interstate 495 consisted of four eastbound and four westbound lanes. On 7 and 8 June 1990, because of ongoing road construction, one lane on each loop had been rendered inaccessible to vehicular traffic; those lanes were blocked with bright-colored barrels and signs.
[2] At all relevant times, Mr. Kirkland was acting as an employee of Mr. Lee's company: K & L Transportation.
[3] It is well settled that contemporaneously negligent parties can be found liable for the cumulative harm that results. See Yellow Cab Co. v. Bonds, 245 Md. 86, 225 A.2d 41 (1966). As we stated in Hartford Ins. Co. v. Manor Inn, 335 Md. 135, 642 A.2d 219 (1994),
[t]he defendant is liable where the intervening causes, acts, or conditions were set in motion by his earlier negligence, or naturally induced by such wrongful act, or omission, or ... if the intervening acts or conditions were of a nature, the happening of which was reasonably to have been anticipated....
Id. at 158, 642 A.2d 219 (quoting Pennsylvania Steel Co. v. Wilkinson, 107 Md. 574, 581, 69 A. 412 (1908)); see also Little v. Woodall, 244 Md. 620, 224 A.2d 852 (1966) (if negligent act increases the risk of damage "through the operation of another reasonably foreseeable force," defendant is still liable). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2591289/ | 38 N.Y.2d 471 (1976)
Fred Knobloch et al., Appellants,
v.
Royal Globe Insurance Company, Respondent.
Court of Appeals of the State of New York.
Argued November 20, 1975.
Decided January 6, 1976.
Bernard R. Selkowe and David Romanoff for appellants.
William F. McNulty, George S. Pickwick and Anthony J. McNulty for respondent.
Chief Judge BREITEL and Judges JASEN, GABRIELLI, WACHTLER, FUCHSBERG and COOKE concur.
*474JONES, J.
We conclude that the circumstances disclosed in this record are sufficient to sustain the jury's verdict that this insurance carrier was liable to its insureds for failure to settle a claim against them within policy limits.
The accident which was the subject of the underlying claim occurred on June 2, 1962. Fred Knobloch was driving an MGA sports car owned by his mother with John A. Wickman as his passenger. The third occupant of the vehicle, a young lady, was sitting on Wickman's lap. As the car came over a rise while traveling south on the Taconic Parkway and started down the decline, both driver and passenger Wickman observed a rough spot in the road ahead. The car left the southbound lane and overturned, in consequence of which Wickman sustained serious injuries.
In the fall of 1962 Wickman sued both Knoblochs and the East Hudson Parkway Authority, the latter on the theory that a rough section of the parkway had contributed to the accident. Their insurance carrier undertook to defend the action against the Knoblochs. An answer and demand for a bill of particulars were served in December, 1962. The report by the insurance carrier's physician of his examination of the plaintiff Wickman was received in April, 1963, and the insurance carrier had an examination before trial of Fred Knobloch, the driver, in May of 1963. The carrier was thus informed as to the details of the one-car accident and how it occurred and was aware that in consequence of the accident Wickman had sustained a subluxation involving the fifth and sixth cervical vertebrae and a compression fracture of the fourth dorsal vertebra.
Wickman's attorney had a conversation with the carrier's claim adjuster on March 19, 1964, at which time the adjuster confirmed advice previously given that the insurance coverage was limited to $10,000. Wickman's attorney then stated that he thought his client would release the Knoblochs for $9,500. *475 The adjuster responded that he would give that figure consideration and asked for particulars of Wickman's special damages.
The bill of particulars which was not furnished until June, 1965, disclosed further details with reference to the vertebral fracture and dislocation, related injuries and the medical care received, including a claim for permanent loss of approximately 33 1/3% rotation to the right of neck and head. The bill further revealed that Wickman had been confined to the hospital for 21 days and thereafter at home for approximately six weeks, that he had been involuntarily discharged from the United States Marine Corps Reserve for medical reasons, and that his special damages included hospital and medical expenses of $1,292.30 and loss of earnings totaling $7,590.
On December 15, 1965 Wickman's attorney had another conversation with the adjuster in the course of which the $10,000 policy limit was again mentioned by the adjuster, and the attorney stated that he was looking for full coverage or close to it. The adjuster this time asked for copies of hospital and medical bills and authorization to obtain hospital records.
In March and September, 1966 the adjuster made telephone calls to the attorney to obtain copies of hospital and medical bills. In February, 1967 the adjuster informed Wickman's attorney that he was taking up the question of settlement with the carrier's committee that passed on such matters and would report the best figure. Wickman's attorney testified that the first offer of settlement which he received from the adjuster came on March 10, 1967 in the amount of $6,500, in response to which the claimant's attorney restated his $9,500 demand. On February 14, 1968, Wickman's attorney returned a telephone call left by the adjuster. In the course of that conversation the attorney repeated his $9,500 demand, to which the adjuster said that he had "$8,500 possibly". The adjuster inquired about $9,000 but the attorney held fast at $9,500. There were no further settlement negotiations until the eve of trial.
Toward the end of 1968, while being interviewed by a representative of the carrier, Knobloch inquired as to demands and offers. The representative then declined to disclose this information on the ground that it was "against company policy".
On February 15, 1969, the Knoblochs retained independent counsel for their individual protection, and on February 26 *476 their counsel was furnished with copies of all pertinent papers by the insurance carrier. Trial counsel provided by the insurance company for the Knoblochs first saw the file in late February or early March, 1969. The case appeared on the day calendar for March 21, 1969. Wickman's attorney was in court and, on being informed that the Knoblochs had retained independent counsel, the attorney withdrew his settlement demand of $9,500. On April 9 trial counsel provided by the insurance company called the Knoblochs' independent counsel, told him that he was exploring settlement and that the insurance carrier would pay full policy limit. The independent counsel then stated that he was authorized to contribute an additional $2,500 towards a settlement.
The attorneys met to draw a jury on Friday, April 11, 1969. There was testimony that at that time trial counsel for the Knoblochs told Wickman's attorney that the adjuster "had foolishly been trying to save * * * a few dollars" on the case and for the first time offered Wickman's attorney "the full policy of $10,000". Wickman's attorney stated that he had withdrawn his demand and accordingly refused the $10,000 offer. On Saturday, April 12, Knobloch authorized his independent counsel to offer as much as $10,000 toward settlement, to bring the total to $20,000.
On Monday, April 14, before the case went to trial, a settlement conference was held before the Trial Judge. The insurance carrier offered its $10,000, independent counsel added $2,500, East Hudson Parkway Authority offered nothing, and Wickman's attorney then demanded $35,000.
The case went to trial and the jury returned a verdict in favor of Wickman against both the Knoblochs and East Hudson Parkway Authority in the amount of $75,383.50. That judgment, after an unsuccessful appeal (Wickman v Knobloch, 34 AD2d 617), was thereafter paid, with interest, in equal shares by the Knoblochs and the Parkway Authority, with the insurance carrier contributing $10,000 (plus interest and costs) to the Knobloch share.
The Knoblochs then instituted the present action against their insurance carrier alleging bad-faith failure on the part of the carrier to settle the Wickman action within policy limits, thereby exposing the Knoblochs to excess liability and associated expenses. After trial in this second action the jury returned a verdict in favor of the Knoblochs against the *477 insurance company in the amount of $30,236.50, representing the amount above $10,000 which the Knoblochs had been obliged to pay Wickman. The Appellate Division reversed and dismissed Knobloch's complaint. We now reinstate the jury verdict with interest.
The issue on this appeal is much narrower than might be assumed. There is no claim of evidentiary error. The Trial Judge told the jury that, "We do not have any specific definition in our law as to what indicates or evidences bad faith. * * * It would be for you as a jury panel to determine whether or not the conduct of the parties in this action indicates the presence of bad faith as alleged by the plaintiffs in failing to bring about a settlement within the policy limits". The crucial portion of the charge to the jury was as follows: "Thus, the law imposes upon the insurer in this instance, the Royal Globe Insurance Company the obligation of good faith basically, the duty to consider, in good faith, the insureds' interests as well as its own when making decisions as to settlement." No exception was taken to this charge and it thereby became the law of this case.[*] The sole issue tendered for our review, therefore, is whether there was sufficient evidence in this record, viewed most favorably to the insureds, to sustain the jury verdict in their favor i.e., was a prima facie case made out under the charge as given. There is no occasion to consider whether the standard laid down by the trial court for the determination of bad faith on the part of the carrier in failing to settle within policy limits is legally correct, and we leave that issue for address in another case, *478 intending here to intimate no view with respect to the charge given in this case.
It serves first, and in reverse chronological order, to dispose of two issues which have been pressed on us by counsel for the insurance carrier but which we conclude are immaterial in the circumstances of this case.
In the first place, it is urged that the conceded failure of the insured's independent counsel to offer the full $10,000 authorized by the insureds should be considered on the issue of bad faith. We think this contention wholly diversionary in the circumstances disclosed in this record. Even if it were to be recognized, arguendo, that it might be material on an issue of causation or of mitigation of damages to show that Wickman's claim could have been settled had the full authorized independent contribution been offered, there is here no proof or inference available that such would or even might have been the case in this instance. The record discloses only that Fred Knobloch authorized the additional $10,000 on the Saturday before trial, at which time Wickman's $9,500 demand had already been withdrawn. At the settlement conference before the Trial Judge on the following Monday morning, it is not disputed that the Wickman demand had gone to $35,000. To argue that had Knobloch's independent counsel then offered his full additional $10,000 rather than only $2,500, the case could have been settled for a total of $20,000 is only to invite the sheerest speculation.
In the second place, counsel for the insurance carrier argues vigorously that the ultimate tender of full policy limits on the eve of trial automatically insulates the carrier from any liability for bad faith failure to settle within policy limits, whatever the standard for determining bad faith. We reject any such contention. We agree that such an offer whenever made is relevant and material both to the basic issue of bad faith and as well to the question whether refusal to tender full policy coverage was the cause of the failure to settle within policy limits. We do not agree, however, that such a belated tender would always operate without more to exonerate a carrier from a pre-existing liability for bad-faith failure to settle within policy limits. Counsel for the insurance carrier invites our attention to no case which has ever so held, in our jurisdiction or elsewhere. Again here, without exception thereto being taken, the trial court, referring to the carrier's final tender of the full $10,000 on the eve of trial, charged the *479 jury specifically: "The question for you to ultimately determine is whether or not the defendant in this case evidenced bad faith in not having settled the case prior to that time within the limits of the policy." (Emphasis added.)
We turn then to what we think is the core issue of this appeal was the evidence, viewed in the light most favorable to the Knoblochs, the insureds, sufficient to sustain the jury verdict in their favor under the standard of bad faith laid down by the trial court without objection. We observe that the court did not charge the jury, for instance, that "bad faith requires an extraordinary showing of a disingenuous or dishonest failure to carry out a contract" (Gordon v Nationwide Mut. Ins. Co., 30 N.Y.2d 427, 437), nor was any such charge requested. Similarly other cases cited by counsel for the insurance carrier in which there was imposed a more stringent standard than that invoked by the trial court here are irrelevant to the disposition of this appeal.
We return to our early point of departure. Under the standard which became the law of this case, the test was whether the insurer in good faith considered "the insureds' interests as well as its own when making decisions as to settlement". We view the evidence then from that perspective.
Initially certain propositions should be stated, or restated. The fact that the demand at one time was below $10,000 and thus that there could have been a settlement within policy limits surely is not sufficient to fasten liability on the carrier. Equally obvious, we suggest, is the corollary principle that an insurance carrier is not obligated to settle within coverage limits merely because an opportunity to do so is presented. Nor was the carrier obligated to consult its insured in regard to settlement. We are of the view, however, that the carrier is obliged in most circumstances to respond accurately to requests from its insured with reference to the progress of any settlement negotiations. In this view we think the 1968 refusal of this carrier's representative, on the grounds of company policy, in response to Knobloch's direct inquiry to disclose "how much was being asked and how much was being offered" was relevant on the issue of bad faith, although we would attach little significance to it, standing alone.
The jury here was entitled, and indeed obligated, to make its own evaluation of the failure of this carrier to settle. In major part it was called on to make its own assessment of the Knobloch claims. On the issue of liability we take it that the *480 conceded facts of this one-car accident would be sufficient to warrant an expectation that in an action by a passenger any jury would be more than likely to have found negligence on the part of the driver. The only issue on this branch would be the possibility that Wickman's awareness of the speed at which the sports car was traveling and his visual perception of the rough spot in the highway immediately prior to the accident might have been the basis for a finding of contributory negligence on his part, which at the time of this trial in 1969 would have defeated his claim. In our view a finding of contributory negligence of a passenger in these circumstances could be characterized at best as highly problematical. There is no issue as to causation.
Moving from the issue of liability to that of damages, it is our view a jury would be entitled to conclude here that, if liability were found, damages would almost certainly far exceed $10,000 in the light of the serious injuries sustained by Wickman, the claim of some degree of permanence, the nature and extent of the hospital and medical care rendered, the restriction of activity, the alleged consequences of the injuries, and the amounts of special damages for hospital and medical care and for lost earnings.
We observe that no proof was offered by the carrier either of any evaluation of the case for settlement purposes on its part by its own personnel or by qualified outsiders or of any advice with reference to settlement appraisal solicited or received from counsel (cf., e.g., Gordon v Nationwide Mut. Ins. Co., supra; but cf. Decker v Amalgamated Mut. Cas. Ins. Co., 35 N.Y.2d 950).
We conclude that, under the standard for the determination of bad faith laid down by this trial court and accepted by the parties, the jury was warranted here in finding the insurance carrier liable for failure to settle the Wickman claim within policy limits. Accordingly, the order of the Appellate Division should be reversed, and the judgment of Supreme Court in favor of the insureds reinstated, with interest.
Order reversed, with costs, and judgment and order of Supreme Court, Queens County, reinstated.
NOTES
[*] Counsel for the insurance carrier did take exception to the trial court's statement that there is no legal definition of bad faith. The following colloquy then ensued: "The Court: `Can you give me the authority and the indication of where the law specifically sets forth the definition?' [counsel for the carrier]: `I am not prepared at this time to give that to your Honor.'" In addition defense counsel submitted seven written requests to charge, each of which, in our opinion, was properly denied. Only the fifth such request warrants any attention. By that request, a charge was sought in effect that bad faith does not include negligent conduct. We concur in the dispositive statement of Mr. Presiding Justice FRANK A. GULOTTA, in his dissenting opinion at the Appellate Division: "In a case where an issue as to negligence has been developed for the jury, I agree that such a request would be appropriate and proper, but in the posture of this case, where there had been no claim of negligent conduct on the part of the defendant, such as failure to properly investigate the case, or try it, or the like, but rather a deliberate decision to ignore the interests of the assured and to consider only its own, the request to charge the effect of negligence was irrelevant and was properly refused." (46 AD2d, at p 297.)
In any event, no point is made on the present appeal on behalf of the insurance carrier that the jury verdict was based on erroneous instructions by the trial court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510844/ | 64 F.2d 948 (1933)
FALBO
v.
UNITED STATES.
No. 6965.
Circuit Court of Appeals, Ninth Circuit.
May 1, 1933.
Rehearing Denied June 2, 1933.
Graham K. Betts, of Seattle, Wash., for appellant.
H. E. Ray, U. S. Atty., and Sam S. Griffin, W. H. Langroise, and Ralph R. Breshears, Asst. U. S. Attys., all of Boise, Idaho.
Before WILBUR, SAWTELLE, and MACK, Circuit Judges.
MACK, Circuit Judge.
Appeal from judgment for defendant on a directed verdict in an action on a war risk insurance certificate in force by payment of premiums until May, 1919.
1. Under our decision in Straw v. United States, 62 F.(2d) 757 (1933), jurisdiction is clear; a letter from the Bureau's general counsel advising claimant that the Director has denied his claim is prima facie proof of statutory prerequisite to suit, a disagreement as defined in the Act of July 3, 1930, c. 849, § 4, 46 Stat. 998, 38 USCA § 445.
2. The only substantial question is whether or not the court erred in directing a verdict for want of any substantial evidence that plaintiff was permanently disabled in May, 1919, when the policy would otherwise have lapsed.
The evidence may be briefly summarized as follows: Plaintiff entered the Army in June, 1918; before going overseas he was hospitalized for several weeks on account of measles. Then he spent a month or two in Belgium quartered in an old barn, "usually wet and damp." During that time he was in the front lines for several days in rainy weather, without change of clothes. From Belgium he was sent to France, thence home. While in Belgium he suffered from a painful cough, night sweats, pain across the shoulders *949 and general weakness. Since that time he has never been a well man.
After his discharge, in April, 1919, he worked for over four months for a lumber company, loading lumber; thereafter he was employed for about a year in a match factory and for another year in a sawmill. In 1922 he entered a hospital, and except for two short intervals has been in hospitals ever since. While employed he received the same pay as other men doing the same work, averaging roughly between 40 and 50 cents an hour.
Although he had a hemorrhage after a 4th of July celebration in 1919, he did not see a doctor until March, 1920. This doctor testified that he then diagnosed plaintiff's condition as acute pulmonary tuberculosis, that it was then of six to eighteen months' duration, and that the condition was progressive thereafter; further, that he had instructed plaintiff to rest, but that his economic situation prevented this.
Another physician who had treated him in a hospital in 1922 likewise testified to the tubercular condition and the strong probability that he had tuberculosis before the hemorrhage of July, 1919.
While, on this evidence, a finding of total disability in May, 1919, and of permanent disability at a much later period, would be justified, we concur in the judgment of the District Judge that it fails to show a condition of permanent disability in May, 1919, a disability then "reasonably certain to be permanent during lifetime." United States v. McCreary, 61 F.(2d) 804, 808 (C. C. A. 9, 1933). The burden of proof is on the plaintiff; "it is not carried by leaving the matter in the realm of speculation." United States v. Rentfrow, 60 F.(2d) 488, 489 (C. C. A. 10, 1932). The testimony of plaintiff's physician in answer to questions by the court indicates the speculative character of the evidence on this material point.
"Q. Suppose at that time, back in July, 1919, the Fourth, that he had taken proper treatment, hadn't worked, and followed the proper course under medical direction, is it reasonably likely that he would have recovered? A. He may have.
"Q. Is it reasonably likely he would not have? A. Well, he may have recovered and he might not have.
We concur in and deem completely applicable here the views so well expressed by Judge McDermott in the Rentfrow Case: "Such cases as these, which are as frequent as they are unfortunate, make a strong appeal to the sympathies. An incipient tubercular stands at a crossroads: If he continues his ordinary activities, his condition is a hopeless one. On the other hand, if he will follow a program of complete rest and wholesome nourishment for an indicated period, the chances are strongly in favor of an arrested condition and a substantial cure. Many times the choice is a hard one, particularly when the economic circumstances of the insured are considered. But we cannot believe that liability upon these contracts of insurance should be determined by the conduct of the insured after the policy has lapsed, nor by economic circumstances which may influence that conduct. We can find no support, in this record, for a finding that the tuberculosis with which insured was afflicted had progressed to the incurable stage when his policy lapsed. * * *"
Likewise, in this case, the record, in our judgment, does not justify a finding that in May, 1919, the total disability, due to incipient tuberculosis, was reasonably certain to be permanent that is, to continue for appellant's life; his own testimony, as well as the entire record, left the question of whether or not his disease was then incurable entirely in the realm of speculation. See, too, Eggen v. United States, 58 F.(2d) 616 (C. C. A. 8, 1932); United States v. Stack, 62 F.(2d) 1056 (C. C. A. 4, 1933); Walters v. United States, 63 F.(2d) 299 (C. C. A. 5, 1933); Wise v. United States, 63 F.(2d) 307 (C. C. A. 5, 1933).
Judgment affirmed.
SAWTELLE, Circuit Judge (dissenting).
I think there was substantial evidence tending to show total and permanent disability on May 31, 1919, when appellant's policy lapsed by reason of his discontinuance of the payment of premiums, and that the trial court erred in not submitting the case to the jury. The fact, if it be a fact, that appellant worked when he should not have done so, or that he did not take proper rest and care, has little or no bearing upon the question of total and permanent disability on the above date, and consequently upon appellant's right to recover upon the policy. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510906/ | 266 S.W.2d 875 (1954)
DEMPSEY
v.
STATE.
No. 26912.
Court of Criminal Appeals of Texas.
April 7, 1954.
*876 Stafford & Alcorn, by John M. Stafford, Kingsville, for appellant.
Wesley Dice, State's Atty., Austin, for the State.
WOODLEY, Judge.
The conviction is for murder; the punishment, 99 years in the penitentiary.
Appellant admittedly killed the deceased, Henry Stewart, by stabbing him with a knife. He testified that he acted in self-defense, believing that the deceased, who he knew had recently cut his nephew's throat, had a pistol or knife and was about to attack him.
Appellant filed an application for a suspended sentence and testified as a witness in his own behalf. His reputation was therefore put in issue. Under well-established rules of evidence the state was entitled to show that his general reputation as a peaceable and law-abiding citizen was bad, and also to prove recent convictions for felony offenses or offenses involving moral turpitude, if such proof was available.
But collateral acts of misconduct not resulting in charges filed (and under the present statute, Art. 732a, Vernon's Ann. C.C.P., in conviction), or convictions for misdemeanors not involving moral turpitude are not generally admissible. Pena v. State, Tex.Cr.App., 246 S.W.2d 478; Mitchell v. State, Tex.Cr.App., 239 S.W.2d 384; Clements v. State, 145 Tex. Crim. 428, 169 S.W.2d 190.
The state offered no proof of the bad general reputation of appellant. But on his cross-examination, appellant having admitted that he had the knife in his pocket, the state was permitted to show that after *877 he had had "previous knifing trouble" the sheriff ordered appellant not to carry a knife and he promised he would not.
Also appellant was asked and admitted that he had been finally charged, convicted and assessed a two-year term for aggravated assault upon a woman in 1950, on a plea of guilty. He was asked, also, whether another aggravated assault in 1952, "because you seriously cut another person with a knife, is still pending on the records of this county isn't it, because the trial was interrupted when you committed this murder of Henry Stewart?"
And appellant was asked if the woman almost died from his cutting her (in 1950) and "if your knife had been a little more true then you might have been up for murder then instead of now?"
Objections were offered to such testimony and after the evidence was admitted appellant asked that the jury be withdrawn, and in their absence moved for a mistrial because of such impeachment by proof of such collateral offenses.
The evidence as to the pending charge of an aggravated assault against appellant was inadmissible under Art. 732a, V.A.C.C.P. Also the state should not have been permitted to inquire as to the details of the assaults by asking "you seriously cut another person" in connection with one charge, and in the other "this woman almost died". Finch v. State, 103 Tex. Crim. 212, 280 S.W. 597.
Further, this court has not held that the offense of aggravated assault is an offense involving moral turpitude because committed upon a female. We have held that an aggravated assault by an adult male upon his wife involves moral turpitude. Lloyd v. State, 151 Tex. Crim. 43, 204 S.W.2d 633; Stewart v. State, 100 Tex. Crim. 566, 272 S.W. 202.
Appellant complains that he was not permitted to attack the character of the deceased and show his general reputation for violence and certain previous acts of misconduct.
While appellant was testifying and before the issue of self-defense had been raised or any act of aggression on the part of the deceased had been shown or suggested by the evidence, he was asked by his counsel whether, when he first met the deceased in 1951, he heard anything about his character. Appellant was not permitted to answer this question, the court ruling that he would have to "lay a foundation."
Next appellant attempted to testify as to what a switchman told him in Raymondville about the deceased, but the court ruled that some act of aggression or of violence be first shown.
Appellant contends that the trial court was in error, the evidence being admissible and relevant on the question of who was the aggressor; that is that the evidence should have been admitted, though the facts were not known or communicated to appellant, on the question of what the deceased probably did and not what appellant may have thought he was doing.
Appellant was later asked by his counsel "do you know anything about the deceased with reference to being a violent man?" The state objected that the question was not proper and the defense should be limited to proof of the general reputation of the deceased in regard to violence.
Just how appellant could testify to acts unknown to him at the time of the homicide without violating the hearsay rule is not apparent.
The defense may offer testimony as to any specific act of violence or misconduct which evidences the violent character of the deceased under the following conditions:
If offered for the purpose of showing the reasonableness of defendant's claim of apprehension of danger, it must further appear that the acts of violence or misconduct were known to the defendant at the time of the homicide.
But if offered for the purpose of showing that the deceased was in fact the aggressor (not that the defendant thought the deceased *878 was making or about to make an attack) the witness must know but it need not be shown that appellant had knowledge of the acts of violence of the deceased at the time of the homicide.
Before any evidence of deceased's character for violence becomes admissible, however, there must be evidence of some act of aggression by the deceased which the character tends to explain (such as drawing a gun or reaching for a pocket where one is usually carried).
At the time the foregoing testimony was offered, there was no evidence before the jury of any act of the deceased which was subject to being explained by the character of the deceased.
After the above-mentioned evidence had been rejected, appellant testified that a bottle was thrown; that the deceased was right on him; that he was in fear for his life because he knew the deceased had cut his nephew; that he heard the deceased mumbling and he then hit him with the dagger. He also testified that he thought the deceased had a knife or pistol; that he knew he had recently cut his nephew's throat; that he was afraid of the deceased because "he kept slipping up on me"; "he came mumbling"; that when he cut the deceased he feared that his life was in danger.
Appellant also introduced in evidence his written confession about which he had been interrogated by the attorney for the state. In the confession he said "When I saw that he had his right hand in his pocket, I immediately pulled a dagger which I had in my hip pocket and stabbed him * * *"; that after the stabbing a bottle was thrown which just missed his head.
Appellant then offered the witness R. L. Wood, Deputy Sheriff of Willacy County, for the purpose of showing the deceased had a reputation of being a violent man and to testify to various acts of violence on his part, but the court sustained the state's objection and ruled that in view of appellant having testified that there had been no previous trouble between him and the deceased, no previous acts could have caused him to have an apprehension of death or serious bodily harm.
For the purpose of appellant's bill of exceptions, Wood testified in the absence of the jury and produced a list of prior convictions and charges against the deceased in Willacy County, including a fine of $23 for disturbing the peace (being drunk and fighting) on October 7, 1946; a fine of $18 for fighting (with his wife) June 10, 1951; a fine of $14 for disturbing the peace (fighting with his wife) July 31, 1952; a fine of $400 for aggravated assault on his nephew ($50 paid on fine was returned to wife after his death).
Wood did not testify to the general reputation of the deceased as to violence, or testify that his reputation as a law-abiding citizen was bad.
Appellant testified that he knew the deceased "had just cut his nephew's throat". He should have been permitted to prove as a fact such act of violence.
It is not shown that he had heard of the three convictions for fighting and drunkenness (disturbing the peace).
Though not predicating reversal thereon, we express the view that these convictions were also admissible upon the question of what the deceased actually did or was doing at the time he was killed.
The error in admitting the foregoing testimony as to prior misconduct, charges and convictions of appellant, and the details thereof, requires that the conviction be set aside. Upon another trial appellant should be permitted to testify to any act of violence or conviction therefor against the deceased of which he had knowledge at the time of the homicide, and to any information or report of such act or conviction which had been communicated or made known to him before the killing, this evidence being admissible upon the question of his having a reasonable apprehension of death or serious bodily injury.
"The defendant's knowledge or belief of the character or disposition of the *879 deceased" is a proper matter for consideration of the jury in determining whether appellant acted upon a reasonable apprehension or fear of death or serious bodily injury when he killed the deceased, and the court's charge so instructed the jury. It follows that appellant should have been permitted to testify as to such knowledge or belief and to establish if he could the factual basis for such belief.
The judgment is reversed and the cause is remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510971/ | 247 Pa. Super. 418 (1977)
372 A.2d 895
David Michael FREED, a minor, by Agnes J. Freed, his guardian, Appellant,
v.
Robert M. PRIORE.
Superior Court of Pennsylvania.
Argued November 12, 1976.
Decided April 19, 1977.
*421 John E. Evans, Jr., Evans, Ivory & Evans, Pittsburgh, for appellant.
Bruce R. Martin, Pittsburgh, for appellee.
Before JACOBS, HOFFMAN, CERCONE, PRICE, VAN der VOORT and SPAETH, JJ.
HOFFMAN, Judge:
Appellant contends that the lower court erred in denying his motion for a new trial which he based on after-discovered evidence and improper expert testimony. We affirm the order of the lower court.
Appellant, David Freed, a minor, through his mother, Agnes Freed, brought this action in trespass to recover damages for negligently inflicted injuries. Appellant suffered injuries during his delivery, at birth, by the appellee-obstetrician, Robert Priore, on May 25, 1971, in Pittsburgh, Allegheny County.
Appellant's theory for recovery, presented through his expert, Dr. Paxson, is based upon Dr. Priore's failure to realize that the baby was in a breech position[1] until one *422 hour prior to his delivery. Appellant asserts that Dr. Priore's administration of the drug spartocin[2] to Mrs. Freed and use of a spinal anesthesia created an emergency situation in the delivery room. Appellant also contends that Dr. Priore erred by performing a total breech extraction rather than a partial breech extraction[3] and in improperly applying forceps to the child.
Appellee and his expert witness, Dr. Hayashi, presented a completely different statement of facts, and a different medical analysis. Appellee stated that it is very common to be unable to ascertain whether a child is in a vertex or breech presentation until after the amniotic sac bursts.[4] In the instant case the doctor made a breech diagnosis after the sac burst. Appellee stated that spartocin and spinal anesthesia are used without complication in partial breech extractions. Appellee and his expert testified that the Freed delivery was a partial breech extraction not a total extraction and that the use of forceps was required in order to deliver the child immediately. Appellee's expert also testified that the Freed baby was an intrauterine growth retarded (hereinafter IUGR) baby,[5] which complicated the delivery further.
*423 The jury resolved the conflict in testimony in favor of appellee, Dr. Priore. On May 28, 1975, appellant filed timely motions for a new trial. On October 14, 1975, appellant filed supplemental reasons for a new trial and attached a copy of an article published in a medical journal in support of his motion. The court, en banc, denied the motion for a new trial. This appeal followed.
Appellant first contends that he was deprived of a fair trial because appellee's expert testified falsely. During the trial, appellant did not realize that Dr. Hayashi's testimony was inaccurate. After the trial, appellant found the article upon which Dr. Hayashi based his questioned testimony. As a result of this after-discovered evidence, appellant moved for a new trial. The alleged false testimony of Dr. Hayashi occurred on redirect examination:
"Q. Now, Mr. Evans [appellant's counsel] put some figures on the board there for the length and head size; right?
"A. Yes.
"Q. Do those figures include the figures that are on the paper? Do they include the figure that was critical in determining that this was an intrauterine growth retarded baby?
"A. No. The most critical measurement is left out of there. The most important measurement is the weight, 2500 grams.
Now, to us, in the last couple years, we are more and more concerned with the baby who is at term and who is small in many respects. When the baby is less than 2500 grams, beyond 37 weeks, by Dr. Yerushalmy's classification, there is almost a 95 per cent perinatal loss.[6] If it's above 2500 grams, its got about a seven per cent perinatal loss. In other words, this baby is in a group where you have a high death rate. It is not a healthy, normal situation, when you have an intrauterine growth retardation *424 at 37 weeks plus. In this case, it was 40 weeks, and the baby is 2500 grams or less. It is in a dangerous position, a high in fact, the New York Mortality Report was 59 per cent of the babies in this group died that were less than 2500 grams. This is not a health situation. I'm pointing out, intrauterine growth retardation, as we are studying more and more of this problem, is a serious problem for the obstetrician."
Appellee apparently concedes that the 95% and 59% mortality figures used by Dr. Hayashi are not accurate. The article to which Dr. Hayashi referred was written by Dr. J. Yerushalmy on the subject of intrauterine growth retarded babies and was published in March, 1970, by Clinical Obstetrics and Gynecology, a medical journal. Appellant asserts that at trial he had no knowledge nor means of knowing of the statistics presented by Dr. Hayashi. He alleges that four months after the trial he discovered the article upon which this false testimony was based.
Initially, we note that a motion for a new trial based on after-discovered evidence is committed to the sound discretion of the court below and we will not reverse unless there is a clear abuse of discretion. Higbee v. Koziol, 383 Pa. 116, 117 A.2d 707 (1955); Meholiff v. River Transit Co., 342 Pa. 394, 20 A.2d 762 (1941); Suravitz v. Prudential Ins. Co., 261 Pa. 390, 104 A. 754 (1918).
To secure a new trial on the ground of discovery that false testimony was given at trial, the complaining party must be able to meet the general test applied to applications for a new trial on the ground of after-discovered evidence. Limper v. Phila. Electric Co., 297 Pa. 204, 146 A. 574 (1929); Suravitz v. Prudential Ins. Co., supra. "The law is clear that in order to justify the grant of a new trial on the basis of after-discovered evidence, the evidence must have been discovered after the trial and must be such that it could not have been obtained at the trial by reasonable diligence, must not be cumulative or merely impeach credibility and must be such as would likely compel a different result." Townsend Will, 436 Pa. 185, 190, 258 A.2d 518, 520 (1969); Limper v. *425 Phila. Electric Co., supra; Hydro-Flex, Inc. v. Alter B. Co. Inc., 223 Pa.Super. 228, 296 A.2d 874 (1972).
In appellee's pre-trial report, filed February 28, 1975, Dr. Hayashi indicated several problems attendant to the delivery of an IUGR baby in a breech position. Thus, appellant was aware two and one-half months prior to trial that intrauterine growth retardation would be an issue raised by appellee's expert. The article by Dr. Yerushalmy, which analyzed the New York Mortality Reports, had been published five years prior to the time of the instant trial. It is obvious that if appellant had used due diligence he could have discovered the article in question prior to, or at the time of trial.
Moreover, appellant's after-discovered evidence does not meet the other standards for granting a new trial. It is clear that the mortality rates from the article in question would only be used to impeach appellee's expert and cast doubt upon his credibility because the testimony does not concern any material fact relating to appellee's conduct during delivery. Finally, the article is not such evidence as would be likely to result in a different verdict. The inaccurate statements of Dr. Hayashi were not relevant to the negligence of Dr. Priore, nor were these mortality figures relevant to the Freed baby's situation because he survived delivery and the neonatal period. Therefore, new testimony on IUGR mortality rates would not result in a different verdict. We conclude that the trial court did not abuse its discretion in refusing to grant a new trial based upon after-discovered evidence.
Appellant also contends that the lower court erred in permitting appellee's expert to testify, over objection, on an ultimate issue of fact. The questioned testimony occurred on redirect examination of Dr. Hayashi:
"Q. Doctor, in your examination of this case, have you found anything which had any adverse effect on this mother or child, which the standards of the profession required Dr. Priore to do, which he did not do, or which he failed to do that he should have done?
*426 "MR. EVANS: I object to that as going way beyond the qualifications of the Doctor.
"THE COURT: The objection is overruled.
"A. I have carefully looked at the records. I consider that Dr. Priore administered quality obstetrical care to Mrs. Freed during her pregnancy and labor. Unfortunately, modern obstetrics being what it is, hasn't solved all the questions. This is one of the unresolved problems in modern obstetrics. I don't see any part in his treatment of Mrs. Freed where I could call it mistreatment or bad management. He administered quality obstetrical care.
"MR. MARTIN: That's all I have."
In a medical malpractice case in Pennsylvania it is necessary that expert medical testimony be introduced to establish that a defendant has negligently carried out his professional duties and departed from the standard of care exercised by other physicians. Chandler v. Cook, 438 Pa. 447, 265 A.2d 794 (1970); Lambert v. Soltis, 422 Pa. 304, 221 A.2d 173 (1966); Ragan v. Steen, 229 Pa.Super. 515, 331 A.2d 724 (1974).[7] Further, when an expert witness states his opinion, this testimony is to be received by the jury just as any other opinion testimony. The court and jury are not bound by an opinion of an expert. Expert testimony, if believed, merely proves, that, in light of the expert's general experience and his observations of plaintiff, he had reached the conclusions announced. These opinions are to be considered with the other evidence; they may be rejected in whole or in part; the weight to be given them is for the jury. Cooper v. Metropolitan Life Ins. Co., 323 Pa. 295, 186 A. 125 (1936); Baur v. Mesta Machine Co., 195 Pa.Super. 22, 168 A.2d 591 (1961).
In the instant case, Dr. Hayashi testified extensively on direct and cross-examination. His testimony involved a multitude of extremely complex medical explanations for *427 Dr. Priore's actions. The opinion that he gave on redirect examination was merely a summary of his prior testimony which stated his overall opinion of Dr. Priore's conduct. Both appellant and appellee presented comprehensive expert testimony over a period of several days; it is hard to conceive that one sentence made by one expert would have such an overwhelming influence on the jury as to cause them to abandon their own judgment for that of Dr. Hayashi.[8] Further, the court gave a comprehensive charge to the jury on opinion testimony and appellant did not object to the court's instruction. This expert opinion could be received by the jury along with the remainder of the expert testimony to be evaluated and weighed by them and accepted or rejected. We find no abuse of discretion by the lower court in admitting the opinion of Dr. Hayashi.
Order affirmed.
JACOBS and VAN der VOORT, JJ., concur in the result.
SPAETH, J., files a dissenting opinion.
WATKINS, President Judge, absent.
SPAETH, Judge, dissenting:
I find no basis in the record for the majority's statement that "[i]t is obvious that if appellant had used due diligence he could have discovered the article in question prior to, or at the time of trial." Majority opinion 247 Pa.Super. at 425, 372 A.2d at 899. The article was five years old; it had not been mentioned in Dr. Hayashi's pretrial report (R. 220a-221a), or otherwise pretrial. Nor can I accept the majority's statement that "[i]t is clear that . . . the article . . . *428 would only be used to impeach appellee's expert . . . . [T]he article is not such evidence as would be likely to result in a different verdict." Id. As the majority acknowledges, majority opinion 247 Pa.Super. at 423, n. 6, 372 A.2d at 898, n. 6, Dr. Hayashi testified that according to the article ("by Dr. Yerushalmy's classification") the baby had only a 5% chance of living. To me it seems quite possible that the jury accepted this, and decided that since despite such odds the baby had lived, appellee must not have been negligent.
Appellant has reproduced what appears to be the article, at pages 224a-246a of the record. From this it appears that in fact "by Dr. Yerushalmy's classification" the baby had a very high chance of living (about 26 deaths per thousand, or a 2.6% death rate), which would mean that the testimony at trial was a gross misstatement.
In refusing to grant a new trial because of this misstatement the lower court said:
First, we are on an excursion outside the record in determining the content of the article . . . . Additionally, there is the question whether the article . . . is in fact the correct article. Thirdly, the subject matter . . necessarily requires the assistance of expert testimony to establish its meaning and significance. Finally, there is the question . . . whether they [the doctor's statements] played any part in procuring the verdict . . .. Record at 4a.
With respect to the last of these reasons: As I have already stated, to me it seems quite possible that the jury was affected by the doctor's statements. With respect to the other three reasons: These reasons would support the conclusion that a new trial should not be awarded now. The lower court, however, used them to support the conclusion that a new trial should not be awarded ever, and with that conclusion I disagree. There is at least a possibility that the verdict was the result of demonstrably untrue testimony. Given that possibility, in my opinion the lower court should have conducted a post-trial hearing to determine whether in fact there is any question about the identity and content of *429 the article, and (availing itself of expert testimony) whether the article was as grossly misstated as appellant asserts. Then the lower court would be able to engage in a sound exercise of its discretion in deciding whether to grant a new trial.
Granted that any trial is to some extent an imperfect event, still, a distinction is to be drawn between imperfections attributable to lack of skill or preparation, and imperfections attributable to disregard for the truth. When considering the former, it may be reasonable for a court to deny a new trial; life must go on, and other cases are waiting. When considering the latter, however, a court should be quick to act; the purity of its own process is at issue.
I would remand for further proceedings.
NOTES
[1] In a breech delivery, the baby's buttocks are delivered first, the head last; whereas in a normal vertex delivery the head is first. The risk of injury to a child in a breech delivery is significantly greater than in a normal vertex delivery. Because the buttocks are smaller than the head, they do not provide a sufficient driving wedge to fully dilate the cervix and allow the head to pass through the cervix.
[2] Appellant contends that spartocin speeds up uterine contractions which is undesirable in a breech delivery; appellee contends that spartocin does not speed up uterine contractions, but makes them more efficient.
[3] In a total breech extraction no part of the baby's body has emerged through the cervix and the doctor must manually pull the child through the cervix. In a partial breech extraction the baby's body will have partially emerged through the cervix, the doctor will only have to assist in the extraction of a part of the body, usually the head and arms.
[4] The child, while in the uterus lives in a sac of fluid known as the amniotic sac. This sac bursts just prior to birth.
[5] An IUGR baby is one which has been carried in the uterus the full gestational period or longer, yet which has a relatively low birth weight. Characteristically, an IUGR baby has wasted, flacid buttocks but a normal sized head. Studies indicate that they have a fairly high mortality rate and, in those that survive, there is an increased risk of neurological abnormalities.
[6] Perinatal refers to the time when a baby is in the uterus and immediately after it is born. Dr. Hayashi was stating that, of the IUGR babies which weigh less than 2500 grams and have a gestation period of more than 37 weeks, there is a 95% mortality rate.
[7] "The only exception to the requirement that expert testimony be produced is `where the matter under investigation is so simple, and the lack of skill or want of care so obvious, as to be within the range of ordinary experience and comprehension of even nonprofessional persons.'" Smith v. Yohe, 412 Pa. 94, 99, 194 A.2d 167, 170 (1963).
[8] Since 1942, there has been a trend to abandon the rule that witnesses would not be permitted to give their opinions or conclusions upon an ultimate issue of fact. See McCormick on Evidence, "This change in judicial opinion has resulted from the fact that the rule excluding opinion on ultimate facts in issue is unduly restrictive, pregnant with close questions of application and the possibility of misapplication, and often unfairly obstructive to the presentation of a party's case, to say nothing concerning the illogic of the idea that these opinions usurp the jury function." McCormick on Evidence, pp. 27-28. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510987/ | 266 S.W.2d 393 (1953)
SHEPARD
v.
WESSON.
No. 6355.
Court of Civil Appeals of Texas, Amarillo.
December 21, 1953.
*394 LaFont, Tudor & Tunnell, Plainview, Swaim Burkett, Dimmett, for appellant.
Cowsert & Bybee, Hereford, for appellee.
MARTIN, Justice.
This is an appeal from a judgment granting recovery of a real estate sale commission in the amount of $3,387.50. A jury in the trial court found "that N. L. Wesson, through his associates, was the procuring cause of the sale by F. L. Shepard of his land to R. J. James and E. M. James for $200 per acre and on the terms of the sale as made." The controlling issue on appeal is whether the evidence in the cause is sufficient to support this finding of the jury.
Appellee, N. L. Wesson, was a licensed real estate broker in Hereford, Texas, and his associate there was Glen Williams. Walter J. Smith, a licensed real estate agent of Dawson County, brought to Hereford, Texas, Wayne Maner who was interested in the purchase of land. Smith and Williams took Wayne Maner to Castro County and showed him the land belonging to appellant and priced it to him at $210 per acre. At the time of showing the land, Maner told Smith and Williams that if he could get help from his brother-in-law or father he was interested in buying land. At such time Maner also stated that his brother-in-law was interested in buying a piece of land.
Appellant was not at home the day the land was shown to Maner but Maner shortly thereafter brought his brother-in-law, R. J. James, to view the tract of land. It is appellant's theory, supported by testimony, that James merely came to advise Maner as to the elimination of Johnson-grass on the farm. After looking over the land with R. J. James, Maner told appellant that he was going to the mountains for a few days' vacation and would let him know about buying the farm on his return. R. J. James and Maner discussed the tract of land while they were on this short vacation trip in New Mexico. It is not revealed that the discussion was concerned solely with elimination of Johnson-grass on the farm. Following the short vacation trip Maner sent no word to the appellant but R. J. James and his brother, E. M. James, contacted the appellant at his farm and purchased the same for the sum of $200 per acre. Appellee claimed a commission alleging that his agency was the procuring cause of this sale to the James brothers. When the commission was not paid appellee entered suit which resulted in a judgment on his behalf in the amount above shown.
Appellee's theory as to his right to recover the commission from appellant is illustrated by the following testimony of his associate, W. J. Smith: "I showed Maner for him and his father and his brother-in-law, according to his words, he said they were interested." Although the material issues are controverted, appellant supported by testimony of his associates the fact that Maner was shown the land and at the time of the initial showing asserted that he would have to have his father or brother-in-law interested in the sale and that his brother-in-law was interested in the purchase of a piece of land. It is undisputed that R. J. James was the brother-in-law of Maner and that he went with Maner and looked the land over shortly after the same was shown to Maner. James testified that he did not know of the tract of land belonging to appellant and that he received all his information as to such tract of land being for sale through his brother-in-law, Maner, and that he went with Maner to look at the tract of land in regard to Johnson-grass thereon. James also went with Maner on the vacation trip to the mountains and there further discussed appellant's tract of land. At that time James had already heard the price and terms of sale discussed between Maner and the appellant. A disinterested witness, George Warner, testified that while he was looking at the land as a prospective purchaser appellant told him, "somebody else had been there and looked at it and was going to bring some relatives of his back in the next few days and that he felt sure that they would buy it." Maner testified *395 that he was to let the appellant know about the sale on his return from the short vacation trip. On return from the trip, Maner did not contact appellant but R. J. James and his brother, E. M. James, went immediately to the farm of the appellant and purchased the tract of land. In drawing up the contract of sale the James brothers agreed to the contract provision in which they warranted "that no agent was involved or is involved in connection with this contract or the purchase of this land in any manner and agrees to save sellers harmless from any and all persons who might claim to be agents in the procuring cause of this sale".
Without further reviewing the lengthy statement of facts it is ruled that the evidence in the cause supports the jury finding that appellee, through his associates, was the procuring cause of the sale of appellant's land to R. J. and E. M. James. From the inception of the sale transaction, when Maner told appellee's associates that he would have to have his father or brother-in-law interested with him and that his brother-in-law was interested in buying land, until the final consummation of the sale by appellant to the James brothers, there is not a single intervening act or agency between the original showing of the land to Maner and the sale thereof some ten days later to Maner's brother-in-law.
The issue as to procuring cause does not rest solely on the fact that James went with Maner and looked over the land and that he received his information as to the land being for sale from no other source. The issue of procuring cause must rest on the proposition, as supported by evidence in the cause, that Maner, in looking at the land with appellee's associates, was not entering into the sale transaction wholly on his own behalf but that it was contemplated and understood between the parties that his brother-in-law was an interested party in the showing and sale of the land. "`* * * it is not necessary that the broker should negotiate the sale, when he has found, or procured, or if he has introduced, or given the name of, a purchaser who is able, and ready, and willing to purchase the property upon the terms named by the principal and the principal has entered into negotiations with such purchaser, and concluded a sale with him; * * *.'" Keener v. Cleveland, Tex.Com. App., 250 S.W. 151, 152; Settegast v. Timmins, Tex.Civ.App., 6 S.W.2d 425, writ refused; Schebesta v. Stewart, Tex.Civ.App., 37 S.W.2d 781; Masters v. Hunt, Tex.Civ. App., 197 S.W. 219; Cruz v. Perkins, Tex. Civ.App., 21 S.W.2d 1078; Duncan v. Stevenson, Tex.Civ.App., 120 S.W.2d 305.
Appellant's points of error are overruled and the judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1510976/ | 266 S.W.2d 181 (1953)
COE et al.
v.
CITY OF DALLAS et al.
No. 4970.
Court of Civil Appeals of Texas, El Paso.
December 16, 1953.
*182 McKool & Bader, Dallas, for appellants.
W. M. Parks, Asst. City Atty., W. R. Allen, Asst. City Atty., H. P. Kucera, City Atty., Dallas, Gragg, King & Storey, Dallas, for intervenors.
FRASER, Justice.
This is a suit for a mandamus against the City of Dallas, to compel its city council to issue a building permit for the purpose of constructing a church. The various agencies of the City of Dallas, including the city council, refused to issue the building permit applied for by appellants. A hearing was held and certain surrounding property owners objected to the proposed building, intervened in the application of appellants for the mandamus, and testified at length against the issuance of the mandamus. Trial was to the court without a jury and the decision of the court was that of denial of the mandamus. From this decision appellants have appealed.
Without itemizing the various points presented by appellants and the counterpoints of appellees, it seems to us that this case rests upon three main issues: First, whether the trial court was in error in not granting appellees' motion to dismiss the application of appellants for mandamus; second, whether the Dallas city council was within its rights and powers in holding that the proposed building was not in fact a church, or in other words did not contemplate a use permitted by the zoning ordinance; and third, whether or not the Dallas city council was within its rights and powers in finding that the proposed use was a probable nuisance.
The proposed site of the building lies in an area under temporary zoning. The permanent zoning ordinances of the City of Dallas do not forbid the building of a church. The provisions of the ordinances regulating the areas under temporary zoning provide that no building may be erected except a single family home and its accessories, without the express permission of the City of Dallas.
With regard to the first point it seems to us that the trial court should have granted appellees' motion to dismiss the suit. This was an application for mandamus to compel the city council to issue a building permit for a building described as a "church"; this proposed building was in newly annexed and temporarily classified territory, controlled by the ordinance which stipulates that any proposed building must be through a permit unless it is a single family dwelling. It must be noted here that appellant is asking the court to set aside findings of the city council by a mandamus. He does not seek to enjoin the enforcement of any regulations. These ordinances provide that the city council may grant or deny a permit such as this "as the facts may justify". There are many cases which hold that mandamus will not lie to direct or control agencies or individuals who have the responsibility of discretion and official judgment. While mandamus may issue to require public officials or agencies to act, it does not issue for the purpose of stating how they shall act, where their duty involves the exercise of judgment or discretion. King v. Guerra, Tex.Civ.App., 1 S.W.2d 373, wr. ref.; Meyer v. Carolan, 9 Tex. 250; Arberry v. Beavers, 6 Tex. 457; Riggins v. Richards, *183 Tex.Civ.App., 79 S.W. 84; Riggins v. City of Waco, 100 Tex. 32, 93 S.W. 426.
It has been established that if there exists any reasonable doubt or in other words, if there is evidence on both sides requiring the exercise of judgment by the individual or agencies there can be no mandamus. The functions of these boards or individuals are discretionary and cannot be attacked by mandamus on the mere sufficiency or insufficiency of the evidence. Examination of the record here shows much evidence on both sides, and that a genuine controversy existed. The court would therefore have been justified in dismissing the application for mandamus, and was therefore correct in denying same. Sansom v. Mercer, 68 Tex. 488, 5 S.W. 62.
With regard to the second issue, the city council found that the proposed building was not in fact a church, and the trial court found that the proposed building would be used more for healing and would not in fact be a church, that the use of the premises in 1952 (when tent services were conducted) disturbed the peace and quiet of the neighborhood and that the city council did not abuse its discretion in finding that the proposed building was not a church and the proposed use of same would constitute a nuisance.
There is much evidence in the record to justify the finding that the proposed building was not to be a church. The plat or sketch submitted showed some 2,400 square feet devoted to healing rooms or prayer rooms, and only 600 square feet for the auditorium or church proper. Although appellant testified that there would be only from thirty to a hundred people at services, still he claimed a membership of from 700 to 1100. His own testimony showed a history and practice of healing and tent services with loud speakers and Hammond organ. He admitted parking his five or six big trailers on the premises. Appellant here is a corporation composed of Rev. Coe, his wife, and his sister as the incorporators, and including De Cordova, described as a business manager. We feel therefore that the city council was within its authority in its finding that this proposed building was not a church and that the trial court had ample grounds for its findings to the same effect. The building not being a church there was no question of the council's authority to refuse the permit under the zoning ordinance provisions.
With regard to the third issue, again the record shows much evidence that proposed use of premises would be a nuisance and contrary to the comfort and welfare of the neighbors.
In addition to what has been said in the preceding paragraph, there was evidence that Rev. Coe and his organization had ambulances coming and going during services, large numbers of cars congesting the streets, that he had 135 radio broadcasts a week, and answered some 6,000 letters a week, that the children quartered on the premises as orphans had been heard screaming and praying. So all in all it seems clear that the proposed use would not be that of a building dedicated primarily to worship, but, based on the evidence of the 1952 use of the premises, the fact that this petition was not presented by a denomination or congregation but by a corporation, and the admitted practices and methods of Rev. Coe, his organization and associates, would in fact be a healing center and very likely a nuisance. The Dallas city council has adequate power under its police powers to determine whether the proposed use of premises is calculated to be a nuisance and injurious to the comfort and welfare of the community, and so to prevent such from happening. The police power of a city is broad and can always be used to protect its people, their comfort, health and welfare. This seems not to be a congregation seeking a place to worship, but an individual and a corporation seeking a location to practice their particular method of healing. Waggoner v. Floral Heights Baptist Church, 116 Tex. 187, 288 S.W. 129; Assembly of God Church of Tahoka v. Bradley, Tex. Civ.App., 196 S.W.2d 696; Edge v. City of Bellaire, Tex.Civ.App., 200 S.W.2d 224, wr. ref.; Corporation of Presiding Bishop of Church of Jesus Christ of Latter Day *184 Saints v. City of Porterville, 90 Cal. App. 2d 656, 203 P.2d 823; City of Dallas v. Meserole, Tex.Civ.App., 155 S.W.2d 1019.
Summing up, there was evidence to support the trial court in its findings and they therefore must be upheld. Landwer v. Fuller, Tex.Civ.App., 187 S.W.2d 670 (Civ.App. wr. ref. w. m.); Gulf Oil Corp. v. Vestal, Tex.Civ.App., 231 S.W.2d 523.
Appellants' points are all overruled and the decision of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511004/ | 266 S.W.2d 174 (1953)
DAVIS
v.
STATE.
No. 26650.
Court of Criminal Appeals of Texas.
December 2, 1953.
On Rehearing February 17, 1954.
Ray Martin, Wichita Falls, for appellant.
Wesley Dice, State's Atty., of Austin, for the State.
BELCHER, Commissioner.
The indictment charges appellant under Art. 567b, Vernon's Ann.P.C., with giving a check of over the amount of $50, without sufficient funds and, for the purpose of enhancing the punishment, two prior convictions for felonies less than capital were also alleged. Upon conviction, his punishment was assessed at life imprisonment.
Ward Phenix testified that on November 1, 1952, he sold appellant a 1950 Ford automobile for $1,500, and the appellant gave him the check described in the indictment in the sum of $500 drawn on the First National Bank of Gainesville, Texas, in part payment therefor which the appellant signed in his presence; that appellant told him at the time of the sale and delivery of the automobile that he had sufficient funds in said bank to take care of the check. He further testified that he found the next day that no such bank existed and also found that appellant did not have an account with any bank in Gainesville. He further testified that appellant gave Gainesville as his address and, upon investigation, no such person was known at the given address.
The check was admitted in evidence; the alleged prior convictions were properly shown; and appellant did not testify.
We find the evidence sufficient to support the conviction.
Appellant contends that the court erred in overruling his motion for a new trial, the ground being that the jury considered as a circumstance against him his failure to testify in his own behalf.
Appellant offered the testimony of four jurors as follows: Juror Duncan testified that before the jury reached a verdict, the failure of the appellant to testify about the two prior convictions was mentioned, and then the foreman admonished the jury not to mention or consider same, but that it was mentioned again later. Juror Hall testified that the failure of the appellant to testify was mentioned by from "three to five" of the jurors before they reached a verdict, and that he cautioned them that it was improper, and that it wasn't brought up again. Juror Reed testified that the subject of the appellant's failure to testify "came up several times and it was more *175 than once it was talked about whether we were supposed to consider it or not," and that they then read in the court's charge that they were not to consider it; that they were admonished by the foreman not to consider the appellant's failure to testify, but that it was later mentioned. Juror Dickerson testified, in substance, as the above jurors.
Five of the jurors testified for the state as follows:
Juror Clemons, the foreman of the jury, testified that one of the jurors said "Well if he wasn't guilty why didn't he take the stand why wasn't he put on the stand" and I said "That's not to be discussed at all in this case, it is none of our business why he wasn't put on the stand or wasn't used, as a witness;" that this matter was dropped and he didn't hear it mentioned again. Juror Hilley testified that he heard one juror mention the failure of the appellant to testify, then the foreman admonished the jury not to refer to it and he heard no more about it. Three other jurors were offered by the state and each testified, in substance, as the above jurors.
The testimony of the above jurors upon the hearing of the motion for a new trial developed a conflict of evidence. It appears that the failure of the appellant to testify was referred to, however, the mere mention of such failure not followed by any discussion warrants the finding by the trial court that appellant's failure to testify was not considered by the jury as a circumstance against him. Henry v. State, 141 Tex. Crim. 486, 149 S.W.2d 115. The trial judge heard the evidence on the motion for a new trial, and there being a conflict in the testimony as to whether the jury discussed or considered appellant's failure to testify as a circumstance against him, his action in refusing a new trial will not be disturbed unless he abused his discretion in reaching his decision. Graham v. State, 123 Tex. Crim. 121, 57 S.W.2d 850; Scrivnor v. State, 121 Tex. Crim. 565, 50 S.W.2d 329; Lacy v. State, 124 Tex. Crim. 362, 61 S.W.2d 845.
We conclude that the evidence fails to show that the trial court abused his discretion in refusing the motion for a new trial.
The judgment of the trial court is affirmed.
Opinion approved by the Court.
On Motion for Rehearing
MORRISON, Judge.
We have re-examined the statement of facts on motion for new trial and have concluded that we were in error in our original opinion. We find that the question of the appellant's failure to testify was discussed several times by the jury during their deliberations and that at one stage thereof the jurors were not in accord among themselves as to whether this question was a proper subject of discussion and that some jurors continued to bring up the matter. Where there is evidence of repeated discussions, we think that the trial court was unwarranted in reaching the conclusion that the appellant's failure to testify was not taken as a circumstance against him. This is what the statute denounces.
Appellant's motion for rehearing is granted; the judgment of affirmance is set aside, and the judgment is now reversed and the cause remanded.
On Appellant's Motion for Rehearing
WOODLEY, Judge (dissenting).
I am unable to agree with my brethren that appellant's motion for rehearing should be granted and state my reasons therefor.
The amended motion for new trial and the juror's affidavit made a part thereof by reference alleged that the jury was guilty of misconduct because they "discussed at length" the fact that the defendant did not take the stand in his own behalf.
Art. 710, C.C.P., reads as follows:
"Any defendant in a criminal action shall be permitted to testify in his own *176 behalf therein, but the failure of any defendant to so testify shall not be taken as a circumstance against him, nor shall the same be alluded to or commented on by counsel in the cause; provided, that where there are two or more persons jointly charged or indicted, and a severance is had, the privilege of testifying shall be extended only to the party on trial."
As pointed out in Stewart v. State, 151 Tex. Crim. 164, 206 S.W.2d 88, the italicized portion of this statute applies to the jury in their deliberation, but the remaining portions apply only to the prosecuting attorney.
This court has held that the motion for new trial must specifically allege the matter or error relied upon. Art. 756, C.C.P.; Harvey v. State, 150 Tex. Crim. 332, 201 S.W.2d 42; Slaughter v. State, 154 Tex. Crim. 460, 231 S.W.2d 657; 4 Tex.Jur. 106.
There was no allegation that the jury considered appellant's failure to testify as a circumstance against him.
As to the testimony on the motion for new trial, it is shown without dispute that the jury's discussion as to appellant's failure to testify did not occur until after they had agreed upon his guilt of the present crime.
It remained only for them to determine the historical fact that appellant had been twice previously convicted of a felony, as charged in the indictment, otherwise they were to assess his punishment as a first offender.
Joe E. McLean, Ft. Worth attorney, testified that he was First Assistant District Attorney and was present when the Tarrant County case was tried. This is the conviction first described in the portion of the indictment alleging former convictions. McLean identified appellant as the defendant who was convicted and sentenced in that case for forgery. The conviction was for an offense committed on November 4, 1950.
Chester Kernan, detective with the New Orleans Police Department, testified that he was present when appellant pleaded guilty to the offense of forgery in the Louisiana conviction alleged. He was positive in his identification of appellant and produced pictures and fingerprints taken of him. He was the officer who investigated the case.
A finding by the jury to the effect that appellant had not been previously convicted as alleged would necessarily have been an arbitrary one. There is nothing in the record from which they might reasonably have concluded that he was not in fact the person previously convicted in the cases alleged, and nothing before us suggests that he was not so convicted.
Under the facts the trial court was warranted in concluding that the failure of appellant to testify was not considered by the jury in determining that appellant was a third offender as alleged in the indictment. At most, an issue was raised and the trial court found that the jury did not consider appellant's failure to testify as a circumstance against him.
The jury did not assess the punishment, and were not required to do so.
For the reasons stated, I respectfully enter my dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511005/ | 372 A.2d 975 (1977)
STATE
v.
Anthony W. MANFREDI.
No. 76-259-C.A.
Supreme Court of Rhode Island.
April 25, 1977.
Julius C. Michaelson, Atty. Gen., Judith Romney Wegner, Sp. Asst. Atty. Gen., for plaintiff.
William F. Reilly, Public Defender, Barbara Hurst, John A. MacFadyen, III, Asst. Public Defenders, for defendant.
OPINION
PAOLINO, Justice.
This is an appeal from a judgment of conviction following a jury verdict of guilty *976 on four counts of an indictment[1] charging the defendant with robbery.
All counts arose from the robbery of a Cumberland Farms Store on Buttonwoods Avenue in Warwick on January 15, 1974. At about 7:30 p. m. on that date four men wearing masks and armed with a pistol and a sawed-off shotgun entered the store. Already present in the store were the store's manager, Albert Walsh, Sr., his helper, Armand J. DiNofrio III, and a number of customers. These individuals were held at gunpoint while the robbers took money from the safe and cash register. The wallets and watches of the store's manager and customers were also taken; nothing was taken from the 13-year-old helper. Because three of the robbers' faces were covered by ski masks and the fourth by a Frankenstein mask, none of the victims could give more than a general description of the robbers.
Frederick Clarence Bailey, Heribert Hartl and Raymond "Sully" DeBarros were indicted along with defendant. Since the others pleaded nob contendere and were sentenced on the charges, defendant was tried alone in the Superior Court before a trial justice and jury between March 11 and March 16, 1976.
At trial the store clerk testified for the state. In the course of cross-examination by defense counsel the following exchange took place:
"Q What did they do to Mr. Walsh?
"A They took his watch and his wallet off him, and then they hit him in the back with the gun.
"Q Who hit him?
"A Frankenstein.
"Q How did he hit him?
"A With the butt end of the gun and made him fall on the floor.
"Q Where did he hit him?
"A In the back.
"Q Did he yell?
"A I don't remember.
"Q Did he fall?
"A Yes.
"Q How old was Mr. Walsh?
"A He would have been thirty-six.
"Q Pardon?
"A He would have been thirty-six. That whack is what killed him."
Defense counsel moved to pass the case, stating that he had not elicited the remark concerning the death of Walsh and that the remark would be prejudicial to defendant. The trial justice denied the motion to pass, stating that he thought the answer was responsive and followed from a series of defense counsel's questions. He then issued the following cautionary instruction to the jury:
"Whether Mr. Walsh is or is not deceased, and whether or not this man this witnessthinks that that striking with the gun had anything to do with his death is immaterial to the issues that we are trying here."[2]
Bailey and Hartl, in consideration for leniency in sentencing for their part in the robbery, also testified for the state later in the trial. Both identified Bailey as the man wearing the Frankenstein mask and testified that defendant had participated in the robbery. The defendant took the stand and denied any knowledge of or participation in the crime.
The jury began deliberations midday on March 16, 1976. After receiving a supplemental charge from the trial justice on the following morning, the jury returned a verdict finding defendant guilty as charged at 2 p. m. on March 17, 1976.
The defendant filed a motion for a new trial. Along with that motion was the affidavit of one juror which defendant sought to introduce in order to impeach the verdict of the jury. The trial justice declined to *977 consider the proffered affidavit and subsequently denied defendant's motion.
The defendant rests his appeal on the claim of three reversible errors at trial. The first error claimed is that the trial justice abused his discretion by giving to the jury a supplemental Allen-type[3] charge prior to an indication of deadlock and that the charge was in itself coercive. The defendant also claims error in the trial justice's denial of his motion to pass the case when reference was made to the death of Mr. Walsh; defendant argues that this was an irrelevant and prejudicial remark violating his right to due process and not purged by what he characterized as the weak cautionary instruction given to the jury. Lastly, defendant claims error in the refusal of the trial justice to consider, on defendant's motion for a new trial, the juror affidavit offered by defendant to impeach the verdict.
We address ourselves first to defendant's argument that reference to the death of Mr. Walsh required granting of defendant's motion to pass the case. The question on appeal is "whether in the context of the facts in this case, the trial justice exercised proper discretion in refusing to pass the case." State v. Sfameni, 115 R.I. 18, 22, 339 A.2d 742, 745 (1975).
Reference to the death of Mr. Walsh was irrelevant in the trial of defendant on robbery charges. This was noted by the trial justice when he ordered the jury to disregard it. As this court has said, "[w]hether a particular statement is prejudicial cannot be determined by a fixed formula." State v. Pugliese, R.I., 362 A.2d 124, 126 (1976). We have also noted that "it is the rule that in the trial of a criminal offense evidence of other and distinct criminal acts is generally prejudicial." State v. Colangelo, 55 R.I. 170, 173, 179 A. 147, 149 (1935). The underlying considerations of this general rule have been set forth by this court in State v. Wright, 70 R.I. 39, 45-46, 36 A.2d 657, 660 (1944), and restated with approval recently in State v. Beaulieu, R.I., 359 A.2d 689, 691 (1976). In the instant case the most pressing consideration is that:
"[T]he rule tends to insulate the jury from prejudice against a criminal defendant and from confusion growing out of any unnecessary multiplication or obfuscation of the issues." 359 A.2d at 691.
We note that mention of Mr. Walsh's death was made early in the trial. It was not until much later in the state's case that it was brought out in the testimony of both Hartl and Bailey that the latter was wearing the Frankenstein mask. During that interval, and depending on the credibility accorded their testimony by the jury, perhaps longer, the jurors may well have thought it possible that defendant was the robber who hit Mr. Walsh and possibly caused his death. An unexplained and unrelated reference to the death of a young man in the course of or as a result of a robbery may well inflame the prejudices of the jurors sitting on a case. When, as here, the trial justice acknowledges the extraneous nature of a statement made in front of the jury and attempts to avoid prejudicial effect by giving a cautionary instruction, the question before us remains whether that instruction can fairly be said to have achieved that goal and erased consideration of the statement from the jury's mind. State v. Costa, 111 R.I. 602, 609-10, 306 A.2d 36, 40 (1973).
Regardless of our inability to know the precise effect of the reference on each juror or on the ultimate verdict of the jury, there is the possibility that there was in this case an "unnecessary multiplication or obfuscation of the issues." State v. Beaulieu, supra, 359 A.2d at 691. We cannot say the instruction given by the trial justice was sufficient to remove the taint of the statement. Where, as here, doubt exists as to the propriety of the trial justice's refusal to pass the case, such doubt is to be resolved in the defendant's favor. Since we cannot be certain that the jury was not prejudiced by the reference to Walsh's *978 death, we hold that the denial of the motion to pass was reversible error. State v. Werner, 87 R.I. 314, 140 A.2d 502 (1958). As this holding is dispositive of the appeal before us, we do not reach the question of other errors claimed by the defendant.
The defendant's appeal is sustained, the judgment of conviction is vacated, and the case is remanded to the Superior Court for a new trial.
JOSLIN, Justice, with whom KELLEER, Justice, joins, dissenting.
The single, isolated reference in this case to the death of the manager of the Cumberland Farms Store came when a witness for the state, during cross-examination, said, "That whack is what killed him [the store manager]." The majority say that the prejudicial effect of that evidence was so pronounced that even an appropriate cautionary instruction, promptly given, could not eradicate the taint and that consequently the defendant is entitled to a new trial. I disagree.
The only issue before the jury in this case was whether defendant was one of the four robbers. I am at a loss to understand how the majority can find that the lone remark challenged here could have either obscured that issue, thus confusing and misleading the jury, State v. Wright, 70 R.I. 39, 42, 36 A.2d 657, 658 (1944), or otherwise caused any "unnecessary multiplication or obfuscation of the issues," State v. Beaulieu, R.I., 359 A.2d 689, 691 (1976), quoted ante at 977. The mere fact that the testimony was irrelevant to any issue in the case does not necessarily mean that it created a danger of jury confusion. Even if it did, I cannot believe that the jurors were incapable of complying with the trial justice's prompt instruction to ignore it.[1] I remain unwilling, as I said in State v. Sfameni, 115 R.I. 18, 26, 339 A.2d 742, 746 (1975) (Joslin, J., dissenting), to join those who lack confidence in the intelligence and fairness of juries. I am certainly unwilling to doubt the ability of the jurors in so simple a case as this to comply with an instruction to disregard a single irrelevant remark.
Alternatively, the majority say that the witness' opinion tended so to arouse and inflame the passions and prejudices of the jurors as to deprive defendant of a fair and impartial trial. If that were its effect, then, of course, there would be grounds for reversal. State v. Werner, 87 R.I. 314, 318-19, 140 A.2d 502, 504-05 (1958). The majority's thesis would be tenable had the witness implicated defendant in the store manager's death; but the uncontroverted testimony is that it was Bailey, not defendant, who struck the allegedly fatal blow. The defendant denied participating in the robbery; it was no reflection on him that an admitted participant in that robbery committed an assault and battery with a deadly weapon in the course of it. Cf. State v. Gancarelli, 43 R.I. 374, 375, 113 A. 5, 6 (1921). I cannot comprehend how this evidence of that participant's further misdeeds could have made the jury more likely to find defendant guilty; as to him, the evidence was simply irrelevant. Consequently, there is manifestly no logical basis for the majority's conclusion that the witness' opinion about the cause of the store manager's death inflamed and aroused the passions and prejudices of the jury against defendant. Indeed, the authorities seem to hold that evidence concerning the criminal conduct of an accused's codefendants, associates, or alleged accomplices is not prejudicial to the accused and that any error in the *979 admission of such evidence is therefore harmless.[2]
Even assuming, arguendo, that the challenged remark, standing alone, either confused and misled the jurors or aroused their passions and prejudices against defendant, the trial justice's cautionary instruction was clearly sufficient to disabuse their minds of any prejudicial effect. In State v. Scott, 114 R.I. 132, 330 A.2d 66 (1974), a unanimous court apparently felt as I do, for it held a substantially similar instruction[3] sufficient to cure any prejudice resulting from the prosecutor's statement that two of the defendant's alleged accomplices had been charged with misprision of a felony. Id. at 140, 330 A.2d at 71.
Nobody questions the right of a criminal defendant to a fair and impartial trial; but he is not entitled, constitutionally or otherwise, to a perfect one. Lutwak v. United States, 344 U.S. 604, 619, 73 S. Ct. 481, 490, 97 L. Ed. 593, 604-05 (1953). In my opinion, it defies common sense as well as logic and precedent to hold that the witness' irrelevant remark in this case prejudiced the defendant in any way; thus, he was not deprived of a fair and impartial trial. Accordingly, I respectfully dissent.[4]
NOTES
[1] Motion for a new trial on a fifth count of robbery, which also resulted in a verdict of guilty against the defendant, was granted, subsequently nol-prossed, and is not before us.
[2] Mr. Albert Walsh, Sr. was deceased at the time of the trial, but there is nothing in the record, other than the testimony of the store clerk, which indicates that his death was connected to the robbery.
[3] See Allen v. United States, 164 U.S. 492, 17 S. Ct. 154, 41 L. Ed. 528 (1896).
[1] The full text of the cautionary instruction is as follows:
"Ladies and gentlemen, a statement has come out on the record concerning this witness' opinion as to Mr. Walsh that that is what killed Mr. Walsh, or that is why he died.
"That is not involved in this case. He is a young man who has given an opinion. That is not before you. That is not what we are here to try, and I charge that you disregard the statement.
"Whether Mr. Walsh is or is not deceased, and whether or not this manthis witness thinks that that striking with the gun had anything to do with his death is immaterial to the issues that we are trying here."
[2] Thomas v. United States, 162 F.2d 301, 303 (5th Cir. 1947) (in prosecution for violation of Marihuana Tax Act, admission of evidence of subsequent marihuana convictions of defendants' alleged supplier, who was not on trial, was not prejudicial); McGuire v. United States, 152 F.2d 577, 580 (8th Cir. 1945) (in Mann Act prosecution, evidence of relations between appellant's codefendants and prosecuting witnesses was not prejudicial to appellant); Grell v. United States, 112 F.2d 861, 873 (8th Cir. 1940) (in mail fraud prosecution, admission of testimony that reflected unfavorably on one defendant was not prejudicial to other defendants); Reeves v. State, 78 Ga.App. 126, 132, 50 S.E.2d 640, 644 (1948) (in separate prosecutions of two brothers for assault with intent to rape, error, if any, in admission of evidence concerning conduct of each defendant during other's absence was harmless because " * * the jury in each case would necessarily understand that the defendant on trial was not connected with the conduct of the other brother which occurred in his absence"); People v. Tobin, 2 Ill.App.3d 538, 542, 276 N.E.2d 828, 830 (1971) (in burglary prosecution, admission of evidence of arrest of person who was carrying a loaded gun and who was found asleep in car driven by defendant before the burglary was, at worst, harmless error); State v. Hume, 146 Me. 129, 136-37, 78 A.2d 496, 501 (1951) (in breaking and entering prosecution, error, if any, in admitting evidence of a different breaking and entering committed on the same night by defendant's alleged accomplice was harmless); accord, United States v. Johnson, 337 F.2d 180, 203 (4th Cir. 1964), aff'd in part, 383 U.S. 169, 86 S. Ct. 749, 15 L. Ed. 2d 681, cert. denied in part, 385 U.S. 846, 87 S. Ct. 44, 17 L.Ed.2d 77-78, and 385 U.S. 889, 87 S. Ct. 134, 17 L. Ed. 2d 117 (1966); United States v. Rappaport, 292 F.2d 261, 263 (3d Cir.), cert. denied, 368 U.S. 827, 82 S. Ct. 48, 7 L. Ed. 2d 31 (1961); People v. Montgomery, 47 Cal. App. 2d 1, 20-21, 117 P.2d 437, 449 (1941); Miller v. People, 141 Colo. 576, 580-81, 349 P.2d 685, 687, cert. denied, 364 U.S. 851, 81 S. Ct. 97, 5 L. Ed. 2d 75 (1960); Fible v. Commonwealth, 461 S.W.2d 553, 555 (Ky.1970).
[3] "`Ladies and Gentlemen, a preliminary instruction, I have stricken from the record a remark, a statement, made by Mr. Thovmasian just prior to the morning recess. Whether or not any charges were brought against individuals not on trial here is in no way relevant to this proceeding, and may in no way be considered by you people as evidence in the case. In any event, the remark has been stricken from the record and the jury is instructed to disregard it.'"
State v. Scott, 114 R.I. 132, 140, 330 A.2d 66, 71 (1974); compare note 1 supra.
[4] Inasmuch as the majority opinion pretermits any discussion of the defendant's remaining assignments of error, I likewise express no opinion thereon. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511034/ | 266 S.W.2d 723 (1954)
STATE ex rel. MOORE et al.
v.
MORANT et al.
No. 28877.
St. Louis Court of Appeals. Missouri.
May 18, 1954.
*725 Silas E. Garner, St. Louis, for appellants.
Lynch & McMillian, Alphonse J. Lynch, Curtis C. Crawford, St. Louis, for respondents.
HOUSER, Commissioner.
This is an action for damages against a constable and the surety on his official bond for making a false return. A trial jury rendered a verdict for relators for $1,250. From the judgment rendered thereon defendants have perfected their appeal to this court.
The petition alleged as a breach of the condition of the bond that in a suit wherein Curry's Clothing Company was plaintiff and relators were defendants a summons was issued directed to the constable commanding him to summon relators to answer the complaint; that a deputy constable made a false return to the summons reciting the execution thereof upon relators by delivering the same to a member of relators' family; that neither the constable nor any of his deputies served said writs upon relators nor on any members of their family nor in any manner and that the return was false; that final judgment was rendered in favor of Curry's Clothing Company and against relators for $324.38 and costs, of which they had no knowledge until after the judgment had been entered; that relators had a good and legal defense to the suit and that no judgment would have been rendered against them if they had been afforded the opportunity of defending the suit. Both defendants filed general denials.
On March 2, 1950 Curry's Clothing Company sued Louis and Josephine Moore in the magistrate court in the City of St. Louis. The return of service, executed by the constable by and through his deputy Edward White showed that on March 3, 1950 relators were served with process at their usual place of abode by leaving a copy of the summons with a member of the family over the age of 15 years. Default judgment against relators for $324.38 was rendered in the magistrate court on July 18, 1950. An execution was issued, the wages of relators were garnished, and on August 15, 1951 for a consideration of $225 the judgment creditor settled with relators and released them of all liability on account of the judgment.
On March 3, 1950 relators' family consisted of themselves and two children of Josephine's by a former marriage, They were Augustine, born January 25, 1937 and Willie, born January 5, 1936, so that on March 3, 1950 the girl was 13 years, 1 month and 6 days old, and Willie was 14 years, 1 month and 29 days old. Relator Josephine Moore at first testified that the boy was 15 years of age. Later in her testimony, however, she stated that this was merely a "rough guess;" that he was "probably 14 or 15 years," and that she had their birth certificates. The birth *726 certificates, produced, revealed the birth dates as above stated. Relators had no knowledge of the filing of a suit against them until their wages were garnished. Neither of the children testified.
The deputy constable testified that after making three or four unsuccessful attempts to find someone at the home of relators and at about 7:30 a. m. on March 3, 1950, he knocked on the door, and a young gentleman, a boy, came to the door. The deputy asked for Mr. Moore. The boy said that Mr. Moore was not there. The deputy asked the boy if he was a relative, a son of Mr. Moore's. The boy said "Yes." Then the deputy asked him how old he was and the boy said "15," whereupon he handed the papers to the boy and told him to give them to his father or mother "when they come."
On this appeal it is urged that the petition does not state a cause of action either against the constable or against the surety; that relators did not make a submissible case; that the court erred in giving Instructions Nos. 1, 2 and 5 and in refusing to strike certain testimony; and the excessivess of the verdict.
The petition states a claim upon which relief can be granted. State, to Use of Wolff v. Finn, 13 Mo.App. 285, 80 C.J.S., Sheriffs and Constables, § 114, page 322, et seq.
Relators made a submissible case. The petition alleged that the return was false. A false return is a return to a writ made by a ministerial officer in which is stated a fact contrary to the truth and injurious to a party having an interest in it. State ex rel. McLain v. Jenkins, 170 Mo. 16, 70 S.W. 152. The return in this case recited constructive service of process under the usual place of abode provision of the statute, by leaving the summons "with some person of his or her family over the age of 15 years." Willie's birth certificate, and oral evidence of his mother's, showed that he was only 14 years of age at the time of the alleged service upon him. The return, therefore, did not speak the truth and on the basis of that false return a judgment was rendered against relators. Relators made a prima facie case by showing the non-age of the person upon whom the constable claimed to have served the process, the making of a return falsely stating that the person upon whom the service was made was of the statutory age, and injury. State ex rel. Polster v. Miles, 149 Mo.App. 638, 129 S.W. 731.
Appellants ask whether a constable in undertaking to make service of process under the usual place of abode provision of the statute, Section 506.150 RSMo 1949, V.A.M.S., must go armed with birth records and affidavits establishing the age and kinship of the members of the defendants' family. The answer is that a constable must ascertain at his peril the age of the person served and his membership in the family of the defendant before making a return showing service under this provision of the statute. The integrity of the whole judicial establishment depends upon the accuracy and reliability of returns of service of process. A constable's return, like that of a sheriff's, is conclusive upon the parties to the suit. Its truth cannot be controverted by parol evidence when the effect will be to set aside a judgment based thereon. Majewski v. Bender, Mo.App., 237 S.W.2d 235, and cases cited. The public is entitled to rely upon the faithful performance of official duty and consequently the law is strict in holding officers to a high degree of accountability for the efficient and true service of process. State ex rel. Polster v. Miles, supra; State ex rel. Armour Packing Co. v. Dickmann, 146 Mo.App. 396, 124 S.W. 29, 80 C.J.S., Sheriffs and Constables, § 52, page 227. See State ex rel. Rice v. Harrington, 28 Mo.App. 287, for another instance in which we held that an officer acts at his peril in making a return of process.
Appellants complain that the main verdict-directing Instruction No. 1 was erroneous in that it did not contain a requirement of a finding of wilfulness, negligence or intentional bad faith. There was no error in this connection. The gravamen *727 of an action for damages for the making of a false return is the breach of official duty imposed by law to make a true return. Upon the occurrence of the breach and consequent injury a case is made for at least nominal damages, State ex rel. Armour Packing Co. v. Dickmann, supra, whether or not the breach was occasioned by wilful or intentional misconduct on the part of the officer. Failure to require a finding of wilfulness or intentional bad faith would be relevant only in cases in which punitive damages were sought. In the case at bar the constable was not charged with wilful or intentional misconduct and no effort was made to recover punitive damages. Instruction No. 1 required the jury to find that the deputy constable "did not serve summons upon a member of relators' family as stated in his return to said Magistrate Court * * *" and Instruction No. 5 required a finding that the return was "untrue and false." In State, to Use of Wolff, v. Finn, supra, we approved an instruction in a similar factual situation in which there was no requirement of a finding of wilfulness, bad faith or negligence but a mere finding that "Mina Wolff was not served with a copy of the writ and petition in the case of Patrick Staed v. Mina Wolff." We conclude that there was no error in Instruction No. 1 as claimed.
Appellants next complain of the inclusion in Instruction No. 5 of several items of damages which the jury was allowed to take into consideration.
The jury was authorized by the instruction to consider "The amount expended by relators, if any, to hire counsel in said Magistrate Court matter, not exceeding Sixty Dollars ($60.00)." The evidence showed that following the entry of the judgment a writ of garnishment issued and was served. Thereupon Louis Moore hired lawyers in an effort to have the garnishment "set aside" and to settle with the judgment creditor for a smaller sum than the amount of the judgment. For these services the Moores paid an attorneys' fee of $100. In the absence of statute attorneys' fees are not ordinarily recoverable. Leslie v. Carter, 268 Mo. 420, 187 S.W. 1196. Where, however, the natural and proximate result of a wrong or breach of duty is to involve the wronged party in collateral litigation, reasonable attorneys' fees necessarily and in good faith incurred in protecting himself from the injurious consequence thereof are proper items of damages. 25 C.J.S., Damages, § 50 c., page 534; Myers v. Adler, 188 Mo.App. 607, 176 S.W. 538. In the case at bar the constable's bond stood good as an indemnity against all of the natural and proximate consequences of a breach of the duty which the constable owed relators. Attorneys' fees expended in an effort to remove or minimize the injurious consequences of the act of the deputy constable were legitimate items of recovery. See State ex rel. Patterson v. Tittmann, 134 Mo. 162, 35 S.W. 579, for a comparable situation.
The instruction authorized the jury to consider "The mental anguish, pain and suffering which you believe from the evidence relators have sustained as a direct result of relators' injuries, if any, and in consequence thereof." In order to recover damages from mental pain and suffering as a result of the acts of a constable, in the absence of a physical injury, there must have been wilful or intentional misconduct, fraud, malice or other aggravating circumstances, none of which appear in the case at bar. 80 C.J.S., Sheriffs and Constables, § 164, page 388. It was error to submit this item of damages.
The instruction further authorized the jury to consider "The loss of income, if any, from their jobs as a result of the act of the defendant Morant, acting through his duly appointed deputy." We have searched the record in vain for evidence to support this item of recovery. There was both a failure to plead and a failure to prove loss of income or wages. It is reversible error to include loss of income or earnings as an item of recovery in a damage instruction where that item is not specially pleaded, Hicks v. Shanabarger, Mo.App. 236 S.W.2d 49, or where *728 that item is not supported by evidence. Vogelgesang v. Waelder, Mo.App., 238 S.W.2d 849.
Appellants claim that the court erred in refusing to strike that part of Josephine Moore's testimony in which she stated that she knew there was no service of process upon her son for the reason that if there had been, the boy would have given her the papers. While the motion should have been sustained it was harmless error for the reason that relators, in submitting their case to the jury, abandoned the charge that there was no service whatever and went on the theory that there was no service in the manner reported, viz. upon a member of the family over the age of 15 years.
The complaint that the verdict is excessive need not be considered, in view of the necessity of a remand.
For error in Instruction No. 5, as noted, the judgment should be reversed and the cause remanded. Since the submission on the merits was free of error the new trial should be confined to the question of the amount of damages to be allowed. Section 512.160, subd. 3 RSMo1949, V.A. M.S. The Commissioner therefore recommends that the judgment be reversed and the cause remanded with directions to the trial court to try only the issue of the amount of actual damages, if any, sustained by relators, and if any actual damages be found, to enter judgment against defendants therefor, and if no actual damages be found, to enter judgment against defendants for nominal damages.
PER CURIAM.
The foregoing opinion of HOUSER, C., is adopted as the opinion of the court.
The judgment of the circuit court is, accordingly, reversed and the cause remanded with directions to the trial court to proceed in accordance with the opinion of the court.
ANDERSON, P. J., BENNICK, J., and ADAMS, Special Judge, concurs. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511030/ | 247 Pa. Super. 348 (1977)
372 A.2d 861
COMMONWEALTH of Pennsylvania ex rel. Herman SIMPSON, Appellant,
v.
Louis AYTCH, Superintendent of Philadelphia Prisons.
Superior Court of Pennsylvania.
Submitted October 8, 1976.
Decided April 19, 1977.
*350 Jonathan W. Miller, Assistant Public Defender, Philadelphia, for appellant.
Deborah E. Glass and Steven H. Goldblatt, Assistant District Attorney, Philadelphia, for appellee.
Before WATKINS, President Judge, and JACOBS, HOFFMAN, CERCONE, PRICE, VAN der VOORT and SPAETH, JJ.
WATKINS, President Judge:
Appellant was charged with murder in North Carolina and was arrested in Philadelphia, Pennsylvania. Extradition proceedings were held, and appellant filed a petition for a writ of habeas corpus challenging his extradition to North Carolina. After a hearing before Judge Doty, the petition was denied.
Extradition should be ordered if: (1) the extradition papers are in order; (2) the subject of the extradition is charged with a crime in the demanding state; (3) the subject is a fugitive from the demanding state; and (4) the subject was in the demanding state at the time that the crime was committed. Commonwealth ex rel. Banks v. Hendrick, 430 Pa. 575, 243 A.2d 438 (1968). The court below found that all of the requirements for extradition were met and we affirm.
An indictment did not accompany the warrants of extradition, and the arrest warrant was issued about two weeks prior to the date when the affidavit was sworn to before a magistrate. The Uniform Criminal Extradition Act, 19 P.S. § 191.3 requires that the demand for extradition must be *351 "accompanied by a copy of an indictment found or by information supported by affidavit in the state having jurisdiction of the crime or by a copy of an affidavit made before a magistrate there, together with a copy of any warrant which was issued thereupon . . ."
Although the warrant in this case was issued prior to the affidavit taken before the magistrate, there was sufficient compliance with § 191.3 of the Uniform Criminal Extradition Act. See Commonwealth ex rel. Hernandez v. Price, 385 Pa. 44, 122 A.2d 206 (1956). While it is preferable that the affidavit be filed prior to the issuance of the warrant, failure to do so is not fatal to the extradition proceedings.
Appellant contends that the documents requesting his extradition are legally insufficient as his arrest on the governor's warrant was not supported by probable cause. However, probable cause for arrest in the demanding state need not be demonstrated in the asylum state before extradition may be granted and the papers accompanying the governor's warrant need not show probable cause for arrest. Commonwealth ex rel. Lattimore v. Gedney, 240 Pa.Super. 226, 233, 363 A.2d 786 (1976). Nevertheless, in the circumstances of this case, we find that there was probable cause for the defendant's arrest in Pennsylvania. The record established that a murder occurred in Fayetteville, North Carolina, on March 21, 1976. On the date of the homicide, a call was placed from the decedent's residence at 8:12 a.m. to a telephone number in Philadelphia, Pennsylvania. The Philadelphia police were requested by North Carolina authorities to assist them in running down the phone number and to interview the person having the phone number in Philadelphia to ascertain what he or she knew about the call. The Philadelphia phone number was traced to a residence in Philadelphia, and Philadelphia detectives went to the address listed for the number. One of the residents, a Mrs. Smith, told the police that Herman Simpson (the appellant) had telephoned her daughter on the date in question at about 9 a.m. and had talked to her for quite a period of *352 time. On the basis of this information, Philadelphia police arrested the appellant, and we believe the arrest was based on probable cause.
Appellant further contends that appellant's arrest on the governor's warrant was in violation of his rights under the Fourth and Fourteenth Amendments to the United States Constitution since probable cause was not shown. This argument is also without merit. As noted by JACOBS, J., in Gedney, supra, 240 Pa.Super. at pages 233-234, 363 A.2d at page 790, "the extradition statutes have as their purpose expeditious and summary executive procedures for returning fugitives to the demanding state, and the relator has every opportunity to assert his rights under the fourth and fourteenth amendments in the demanding state."
A governor's extradition warrant is prima facie evidence that all legal requirements have been met. Commonwealth ex rel. Raucci v. Price, 409 Pa. 90, 185 A.2d 523 (1962). The fact that the affidavit in this case was made and sworn to before a magistrate on April 23, 1976, and the warrant was sworn to before a magistrate on April 10, 1976, thirteen days before the affidavit, does not require us to find that the papers are not in order. The law does not require such a highly technical reading of the Uniform Criminal Extradition Act.
Appellant also contends that the court below denied him the right to a complete hearing under the Uniform Criminal Extradition Act. Under the Act, 19 P.S. § 191.15, if it appears that the person held is the person charged, he may be committed for such time, not exceeding 30 days, as will enable the arrest of the accused to be made under a warrant of the governor. The appellant was initially arrested on April 12, 1976, the hearing called for under § 15 of the Act was commenced on May 3, 1976, and continued to May 5, 1976, and then to May 14, 1976. The hearing was discontinued when the governor's warrants were lodged against the appellant on May 18, 1976. We find that the hearing *353 afforded the appellant was in substantial compliance with the Uniform Criminal Extradition Act.
Order affirmed.
HOFFMAN, J., files a dissenting opinion.
SPAETH, J., files a dissenting opinion.
HOFFMAN, Judge, dissenting:
I dissent because the warrant was improperly issued before the submission of an affidavit to the magistrate. This procedure violates The Act of July 8, 1941, P.L. 288, § 3; 19 P.S. § 191.3.
SPAETH, Judge, dissenting:
For the reasons discussed in my dissenting opinion in Commonwealth ex rel. Marshall v. Gedney, 237 Pa.Super. 372, 380, 352 A.2d 528, 531 (1975) (allocatur granted, January 31, 1977), it is my opinion that when a request for extradition is based on affidavits sworn to before a magistrate in another state, the affidavits must be sufficient to support a finding of probable cause.
The majority says, however, that "[n]evertheless, in the circumstances of this case, we find that there was probable cause . . .." Majority Opinion 247 Pa.Super. at 351, 372 A.2d at 862. I submit that the majority's own ensuing recitation demonstrates that there was not probable cause. All we are told is that "a Mrs. Smith" "told the police that [appellant] had telephoned her daughter . . . and had talked to her for quite a period of time." What, one is bound to ask, did Mrs. Smith say her daughter said? And, whatever Mrs. Smith said, why believe her? Put the majority's recitation in an affidavit for a search warrant, and a motion to suppress, filed on the ground that the warrant had not been issued on probable cause, would be granted. Spinelli v. United States, 393 U.S. 410, 89 S. Ct. 584, 21 L. Ed. 2d 637 (1969); Aguilar v. Texas, 378 U.S. 108 (1964).
Finally, the majority says:
A governor's extradition warrant is prima facie evidence that all legal requirements have been met. . . . The *354 fact that the affidavit in this case was made and sworn to before a magistrate on April 23, 1976, and the warrant was sworn to before a magistrate on April 10, 1976, thirteen days before the affidavit, does not require us to find that the papers are not in order. The law does not require such a highly technical reading of the Uniform Criminal Extradition Act.
Majority Opinion 247 Pa.Super. at 352, 372 A.2d at 862-863. The Act requires "a copy of an affidavit made before a magistrate . . . together with a copy of any warrant issued thereupon . . .." 19 P.S. § 191.3 "[T]hereupon" means nothing unless it means that the warrant was issued on the strength of the affidavit, i.e., after the affidavit. Here, as the majority acknowledges, the warrant was issued before the affidavit. There is nothing "highly technical" about this; it is the only possible way to read the Act. For the majority to say that it is "not require[d] to find that the papers are not in order" is equivalent to saying that it is not required to enforce the Act.
I would reverse. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1916673/ | 203 B.R. 515 (1996)
In re HEALTHCO INTERNATIONAL, INC., Debtor.
William A. BRANDT, Jr., Trustee, Plaintiff,
v.
HICKS, MUSE & CO., INCORPORATED, et al., Defendants.
Bankruptcy No. 93-41604-JFQ, Adversary No. 95-4154.
United States Bankruptcy Court, D. Massachusetts.
December 20, 1996.
J. Joseph Bainton, Jose Baez, Ross & Hardies, New York City, Michael A. Khoury, Cohn & Kelakos, Boston, MA, for William A. Brandt, Trustee.
Carl Metzger, Testa, Hurwitz & Thibeault, Boston, MA, for Wand Partners, Mercury Asset Management, Life Partners Group.
David C. Fixler, Rubin & Rudman, Boston, MA, for Robert Casey, Helen Cyker.
Daniel J. Lyne, Hanify & King, Boston, MA, for Ray Doherty.
Mike McKool, Jr., Phillip N. Smith, Jr., Jeffrey A. Carter, McKool, Smith P.C., Dallas, TX, for The Hicks, Muse Group.
Steven M. Pesner, Akin, Gump, Strauss, Hauer & Feld, New York City, for The Apollo Group.
Christian M. Hoffman, Foley, Hoag & Eliot, Boston, MA, for Coopers & Lybrand.
Michael Jankowski, Reinhart, Boerner, Van Deuren, Norris & Rieselbach, S.C., Milwaukee, WI, for Valuation Research Corp.
Arthur Steinberg, Kaye, Scholer, Fierman Hays & Handler, New York City, for Kaye, Scholer, Fierman, Hays & Handler.
William J. Hanlon, Goldstein & Manello, P.C., Boston, MA, for Conseco.
*516 John E. Tener, H. Bissell Carey III, Robinson & Cole, Boston, MA, Joseph L. Clasen, Robinson & Cole, Stamford, CT, for Chrysler Capital Corp.
Dennis E. Glazer, Davis, Polk & Wardwell, New York City, for J.P. Morgan.
Gary L. Weiner, Matthew Gluck, Fried, Frank, Harris, Shriver & Jacobson, New York City, for Vincent A. Mai, Thomas L. Kempner.
Hugh J. Gorman III, Hinckley, Allen, Snyder & Comen, Boston, MA, for Joel Lewin.
Christopher Vrountas, Cooke, Clancy & Gruenthal, Boston, MA, for Marvin Cyker.
Thomas G. Rafferty, Cravath, Swaine & Moore, New York City, for Lazard Freres & Co.
Arnold P. Messing, Choate, Hall & Stuart, Boston, MA, Lazard Freres & Co.
Edwin G. Schallert, Debevoise & Plimpton, New York City, for Chancellor Trust Co., Chancellor Capital Management.
David A. Parke, Bulkley, Richardson & Gelinas, Springfield, MA, for Cramer, Rosenthal, McGlynn.
Mark N. Parry, Moses & Singer, New York City, for Gemini Partners, Arthur M. Goldberg.
Louis Goodman, Skadden, Arps, Slate, Meagher & Flom, Boston, MA, for Skadden, Arps, Slate, Meagher & Flom.
Darragh Kasakoff, Robert Seder, Seder & Chandler, Worcester, MA, for Richards, Layton & Finger, Martineau Walker, Weil, Gotshal & Manges.
James F. Wallack, Goulston & Storrs, Boston, MA, for Morgan Stanley & Co.
Nancy Lazar, Davis, Polk & Wardwell, New York City, for J.P. Morgan & Co., Inc.
Mark D. Cress, Bulkley, Richardson & Gelinas, Springfield, MA, for Cramer, Rosenthal, McGlynn.
Kathleen Donius, Reinhart, Boerner, Van Deuren, Norris & Rieselback, Milwaukee, WI, for Valuation Research Corp.
Vincent Amoroso, Parker, Coulter, Daley & White, Boston, MA, for Robert Mulcahy III.
John Gilmore, Hill & Barlow, Boston, MA, for The Airlie Group.
DECISION ON MOTION BY GEMINI PARTNERS, L.P. AND ARTHUR M. GOLDBERG FOR PARTIAL SUMMARY JUDGMENT
JAMES F. QUEENAN, Jr., Bankruptcy Judge.
Gemini Partners, L.P. ("Gemini") and Arthur M. Goldberg ("Goldberg") move for partial summary judgment dismissing as against them Counts 15 and 16 of the Third Amended Complaint brought by the Chapter 7 trustee, William A. Brandt, Jr. (the "Trustee"). Goldberg is a principal of Gemini. Counts 15 and 16 allege Goldberg and Gemini were controlling shareholders of Healthco International, Inc. (the "Debtor") who breached their fiduciary obligations owed the Debtor by proceeding with the May 1991 leveraged buyout of the Debtor (the "LBO"). Although the motion raises collateral issues concerning director self interest and the aiding and abetting of directors in breach of their fiduciary duties, I conclude Gemini was not a controlling shareholder.
I have previously described in some detail the circumstances of the LBO. See Brandt v. Hicks, Muse & Co., Inc. (In re Healthco International, Inc.), 195 B.R. 971 (Bankr. D.Mass.1996). I here treat only those aspects relevant to the present motion.
FACTS
The documents accompanying the motion and the Trustee's opposition disclose no genuine issue of material fact. Gemini is a limited partnership whose executive general partner is ERP Capital Corporation. Emanuel R. Pearlman ("Pearlman") is the director, president and sole stockholder of ERP Capital Corporation. Gemini has three other general partners: AMG Gemini Corp., EWS Gemini Corp. and D & NM Gemini Corp. These corporations are controlled, respectively, by Goldberg, Emil W. Solomine ("Solomine") and David M. Mandelbaum ("Mandelbaum").
*517 In 1990, Gemini began acquiring shares of the Debtor's outstanding common stock. By May 3, 1990, it owned 9.96% of the shares. Soon thereafter, Gemini formed a committee, called the Committee for Maximizing Shareholder Value of Healthco International, Inc. (the "Committee"), whose members were Gemini, Pearlman, Goldberg, Solomine and Mandelbaum. The Committee solicited the Debtor's stockholders for their proxies and consents for the election of an entire new board of directors consisting of the Committee's nominees. Its nominees were Pearlman, Kenneth W. Aitchison, Bernard J. Hale, John Kenneth Looloian, Robert E. Mulcahy III, Mary Clark Webster and George A. Zurkow.
Gemini entered into a letter agreement with each of the nominees in which Gemini promised (i) if Gemini was successful in electing at least a majority of directors and the nominee was elected, to pay the nominee the difference between $24,000 and the aggregate director compensation the nominee receives during the nominee's first 18 months of service, (ii) if Gemini was successful in electing at least a majority of the board but the nominee was not elected, to pay the nominee $24,000, and (iii) if Gemini did not gain majority board representation but sold its shares of the Debtor at a profit, to pay each nominee $24,000 less any director compensation paid the nominee. According to a complaint filed by Gemini in the Court of Chancery of Delaware, the Committee succeeded in obtaining majority stockholder consent to the removal of the incumbent board and the election of the Committee's nominees.
On September 4, 1990, the Debtor executed a merger agreement (the "First Merger Agreement") with two entities controlled by the Dallas investment banking firm of Hicks, Muse & Co., Incorporated ("Hicks, Muse"). The entities were HMD Holding Corporation and its wholly owned subsidiary, HMD Acquisition Corporation. The merger agreement was part of a two-step process through which Hicks, Muse was to acquire the Debtor. HMD Acquisition Corporation would first make a tender offer to purchase all the Debtor's outstanding shares at $19.50 per share. Any shares not tendered were to be converted under the merger into cash at the same $19.50 per share price. Shares of the Debtor owned by HMD Acquisition Corporation were to remain shares of the Debtor. As a result of the merger agreement, the annual meeting of shareholders scheduled for September 6, 1990 was postponed to September 25, 1990.
On September 19, 1990, a "Settlement Agreement" was executed among Gemini, the Debtor, the Committee, the Committee's nominees, the Debtor's seven incumbent directors and seven individuals named in the Settlement Agreement to comprise the new board. In the Settlement Agreement, the parties agreed as follows:
(i) Three members of the incumbent seven-member board would resign.
(ii) Three of the Committee's nominees (Messrs. Aitchison, Looloian and Mulcahy) would take their place.
(iii) The new board as so reconstituted would hold a special meeting to nominate themselves as directors for reelection at the annual meeting.
(iv) Any future vacancy arising among the four preexisting directors would be filled by the remaining preexisting directors.
(v) Any future vacancy arising among the three new directors would be filled by the remaining Gemini nominees.
(vi) The new board would adopt a resolution (a) recognizing the existence of a Special Stockholder Committee (the "Special Committee"), consisting of Gerald C. Cramer ("Cramer") and others to be designated by Cramer, (b) authorizing a representative of the Special Committee to be present at all meetings of the board, (c) directing that the Special Committee's representative receive notice of all board meetings, (d) directing the Debtor's financial advisor to be available to consult with the Special Committee on the merger, and (e) directing the Debtor's financial advisor to inform the Special Committee and the new board members of the terms of any other takeover proposal.
(vii) If the pending merger is terminated in accordance with its terms or not consummated by February 28, 1991 (and by *518 vote of five of seven directors the Debtor does not seek an extension beyond that date), and within five business days thereafter the board does not agree to sell the Debtor to another party, the board would be increased to nine members and the additional two positions would be filled by individuals designated by the Special Committee.
(viii) The Debtor would reimburse Gemini for its out-of-pocket expenses incurred in the proxy contest, up to $2,200,000.
(ix) All litigation among the parties, which was considerable, would be terminated and mutual releases exchanged.
The parties complied with their obligations under the Settlement Agreement, and the new board took office.
Among the provisions of the First Merger Agreement was a condition that the Debtor's consolidated, audited 1990 financial statements show earnings before interest, taxes, depreciation and amortization ("EBITDA") of not less than $38 million. In February of 1991, the board received preliminary information from the Debtor's accountants indicating 1990 EBITDA would be only about $21.8 million. The Debtor informed Hicks, Muse of this. The parties then abandoned the First Merger Agreement. On March 1, 1991, Hicks, Muse proposed an acquisition of the Debtor at a revised price of $15 per share, to be effected through the same two-step process of tender offer and cash-out merger.
On March 26, 1991, by a vote of five to two, the board voted to recommend that stockholders tender their shares to HMD Acquisition Corporation at $15 per share and to approve a subsequent cash-out merger at the same price. By then, Mr. Looloian had resigned his directorship for health reasons and, through designation of the two remaining Gemini nominees, had been replaced by Goldberg. Those voting in favor of the tender and merger were Messrs. Goldberg, Mulcahy and Aitchison, plus two members of the preexisting board, Messrs. Mai and Kempner. Voting against the tender and merger were Messrs. Cyker (Marvin) and Lewin, both members of the preexisting board. The Debtor thereafter entered into another merger agreement with the same Hicks, Muse entities, this time at $15 per share (the "Second Merger Agreement").
The $15 tender offer was made. Thereafter, on or about May 22, 1991, shares not tendered were cashed out under the merger at $15 per share. The Trustee alleges this left the Debtor insolvent and with unreasonably small capital.
Gemini As Controlling Shareholder
In Count 16, the Trustee alleges Gemini was a controlling shareholder, that as such it owed fiduciary duties to the Debtor and its creditors, that in permitting the Debtor to enter into the LBO Gemini knew or should have known the LBO would render the Debtor insolvent and leave it with unreasonably small capital, and that Gemini thereby breached its fiduciary duties, causing damage to the Debtor of at least $200 million.
Gemini owned only 9.96% of the Debtor's outstanding shares of common stock. Under the law of Delaware, the state of the Debtor's incorporation, a shareholder holding less than a 50% interest is not a controlling shareholder, with the fiduciary obligations accompanying that status, unless the shareholder exercises actual control over the conduct of the corporation. E.g., Kahn v. Lynch Communication Sys., Inc., 638 A.2d 1110, 1114 (Del.1994); In re Tri-Star Pictures, Inc., Litig., 634 A.2d 319, 328-29 (Del. 1993); Gilbert v. The El Paso Company, 490 A.2d 1050, 1055 (Del.Ch.1984) aff'd, 575 A.2d 1131 (Del.1990); In re Shoe-Town Stockholders Litig., 1990 WL 13475, *6 (Del.Ch. Feb. 20, 1990); In re Sea-Land Corp. Shareholders Litig., 1988 WL 49126, *3 (Del.Ch. May 13, 1988).
Under the Settlement Agreement, Gemini designated three of the seven members of the Debtor's board, naming Messrs. Aitchison, Looloian and Mulcahy. Obviously, these three individuals were satisfactory to Gemini. And Gemini could expect that three members of the Board would always be satisfactory to it, because of the provision in the Settlement Agreement specifying that a vacancy among those three would be filled by the remaining Gemini nominees. Its expectation was realized *519 when Looloian resigned for health reasons and Goldberg was named by Aitchison and Mulcahy to succeed him. But such an expectation as to only three members of a seven-member board does not give control over the board.
The Trustee contends Gemini obtained the requisite control through the provision in the Settlement Agreement giving the Special Committee the right to name an additional two directors if (i) by February 28, 1991 the pending merger was not consummated (and the board by a vote of five members had determined not to seek an extension), and (ii) within five days thereafter the board does not agree to sell the Debtor to another party. It seems obvious that Gemini bargained for this provision and suggested Cramer as chairman of the Special Committee, with authority to name the other members. The board thus had to either sell the company by the stipulated time or be reconstituted to nine, with five members being named by Gemini or parties designated by Gemini. This, the Trustee says, gave Gemini subtle but real influence over the entire seven-member board, an influence extending beyond Gemini's role in three of them joining the board. The preexisting directors (or at least two of them) had to agree to sell the company, under the pending merger or otherwise, or become a minority on a nine-person board whose majority would be composed of either Gemini nominees or designees of Gemini nominees.
Although perhaps giving Gemini some influence over the preexisting directors, this provision in the Settlement Agreement did not give Gemini a degree of influence amounting to the power to dictate the terms of a sale, so long as the board remained at seven. The terms of the merger then pending had already been fixed without Gemini's participation. Any other acquisition had to be approved by a majority of the board. Unless and until the nine member board came into existence, Gemini could name only three directors. It did not name the other four to the board and there are no other circumstances indicating influence on its part over them. As likely as not, they would disagree with the Gemini nominees on any future sale proposal. This is demonstrated by what actually occurred. Although the initial two Gemini nominees and Goldberg voted to approve the $15 per share transaction, two of the other four members opposed the transaction.
In sum, Gemini had the ability to name, and did name, only three of seven directors. This is not control. It seems likely that these three were not disinterested directors for the purpose of determining whether the board is entitled to the benefit of the business judgment rule. See, Cede & Co. v. Technicolor, Inc., 634 A.2d 345, 362-65 (Del. 1993) (business judgment rule inapplicable if board is infected with self-interest). See also, Del.Code Ann. tit. 8 § 144 (1974) (transaction not voidable "solely" because of self-interest of some directors); Fliegler v. Lawrence, 361 A.2d 218, 222 (Del.1976) (section 144 does not sanction unfairness). There are a number of indicators that the Gemini nominees were not disinterested, not the least of which is Gemini's purpose of putting them on the board to sell its shares at a profit, as reflected in Gemini's compensation arrangement with them. And perhaps the provision in the Settlement Agreement triggering a nine-member board infected the other four board members with Gemini's self interest, aside from any self interest of their own resulting from individual stock ownership. But I need not decide these questions. Lack of disinterestedness on the part of even all seven board members does not equate to control by Gemini.
The Trustee attempts to show control on the part of Gemini through the conduct of Pearlman, owner of Gemini's managing general partner. At the request of Goldberg, Pearlman attended two board meetings in March of 1991. In private conversation, he told Goldberg and the two Gemini nominees that he favored the $15 transaction. That only goes to indicate Gemini's influence over Aitchison and Mulcahy.
Nor is the Trustee persuasive when he quotes from a statement in Pearlman's deposition referring to a discussion Pearlman had with the Debtor's president, Marvin Cyker. Pearlman said: "[w]e discussed that how the company would be run if we decided not *520 to sell the company to Hicks, Muse." The most one could reasonably infer from this use of "we" is a reference to the four holdover directors and the three new directors. The same can be said of Pearlman's use of "our" in his account of his discussions with Robert E. Mulcahy III, a new board member designated by Gemini. Pearlman stated in his deposition: "I believe the discussions occurred after the $19 deal had been terminated by the company, and we had discussions about what are [sic] our potential alternatives."
This case is quite different from In re Tri-Star Pictures, Inc., Litigation, 634 A.2d 319 (Del.1993). The court there held that Coca Cola Company, which owned a 36.8% stock interest, was a controlling shareholder. But Coca Cola had voting agreements with other minority shareholders holding an aggregate 19.8% stock interest. The parties agreed they would collectively designate eight members of a ten-member board. Those agreements thus gave the minority stockholders joint control over the entire board. There was much evidence, moreover, of Coca Cola's influence over most members of the board. In the present case, Gemini's legal rights and practical influence are much less pervasive.
Goldberg As Controlling Shareholder
Count 15 is brought against Goldberg and other directors or officers of the Debtor. It alleges Goldberg indirectly held Geminis' 9.96% stock interest and as a stockholder he exercised control over the Debtor "by virtue" of his position as a director, thereby owing the Debtor and its creditors fiduciary duties. This count thus seeks to establish Goldberg as a controlling stockholder through an amalgam of his directorship and an indirect ownership of Gemini's 9.96% stock interest.
Count 15 must fail in light if my ruling that Gemini is not a controlling shareholder. Goldberg did indeed have fiduciary obligations, but they arose from his position as a director, not as a controlling stockholder. In another count, Count 14, the Trustee alleges Goldberg and the other directors who voted in favor of the LBO breached their fiduciary obligations as directors. I have previously ruled that this count states a cause of action. See Brandt v. Hicks, Muse & Co., Inc. (In re Healthco International, Inc.), 195 B.R. 971 (Bankr.D.Mass.1996).
Cause Of Action Against Gemini For Aiding And Abetting Directors In Breach Of Their Fiduciary Duties
Although Gemini was not a controlling shareholder and hence owed the Debtor no fiduciary duties, this does not mean there is no cause of action against Gemini for aiding and abetting a breach of fiduciary duty by directors. The two causes of actions are distinct, as demonstrated by Fry v. Trump, 681 F. Supp. 252 (D.N.J.1988). In that case, Donald Trump had acquired 9.9% of the stock of Bally Manufacturing Company. Perceiving this as the beginning of a hostile takeover, Bally's board took various defensive measures, including the ingestion of "poison pills" in the form of adopting a conditional stock rights plan at 50% of market value and signing a contract to purchase a casino at an inflated price. Following litigation, Bally bought Trump's stock for much more than the stock's traded price and obtained Trump's agreement not to purchase Bally stock for ten years. Trump made $31.7 million on the deal. In a shareholder suit brought against Trump, the court ruled the allegations of the complaint were insufficient to describe Trump as a controlling shareholder. The court also held, however, the complaint stated a cause of action against Trump for aiding and abetting Bally's directors in the breach of their fiduciary duties when they paid "greenmail" to him for the purpose of entrenching themselves in office.
There may or may not be a cause of action against Gemini for aiding and abetting the Debtor's directors in breach of their fiduciary duties. That question is not before me. I do note, however, that no such cause of action is alleged. In Count 13, the Trustee alleges Hicks, Muse and certain others, but not naming Gemini, knew that the directors who voted for the LBO were thereby breaching their fiduciary duties owed the Debtor, and these named defendants "aided and abetted the consummation of the LBO." Partly because Count 13 is also brought against the directors themselves, and partly because the *521 count appears immediately after fraudulent transfer counts, it is not entirely clear that Count 13 is intended to allege a cause of action for aiding and abetting directors in the breach of their fiduciary duties. In any event, Count 13 does not name Gemini. I will accordingly entertain a motion to amend the complaint so as to allege a cause of action against Gemini (and others) for aiding and abetting the Debtor's directors in the breach of their fiduciary duties.
A separate order has issued dismissing Counts 15 and 16 as against Gemini and Goldberg. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511120/ | 88 F.2d 646 (1937)
BOGARDUS
v.
HELVERING.[*]
No. 230.
Circuit Court of Appeals, Second Circuit.
March 8, 1937.
*647 Cravath, de Gersdorff, Swaine & Wood, of New York City (Richard H. Wilmer, of Washington, D. C., and George G. Tyler and William D. Whitney, both of New York City, of counsel), for petitioner.
James W. Morris, Asst. Atty. Gen., and Sewall Key, J. Louis Monarch, and John J. Pringle, Jr., Sp. Assts. to Atty. Gen., for respondent.
Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
L. HAND, Circuit Judge.
This case involves the question whether the taxpayer, Bogardus, received "compensation for personal service" under section 22 (a) of the Revenue Act of 1928 (26 U. S.C.A. § 22 and note), when in 1931 the Unopco Corporation paid him $10,000 in the following circumstances. He had been in the employ of the Universal Oil Products Company; how long and in what capacity the record does not disclose; his salary for the year 1930 had been $6,000 and he had received a bonus of $2,000 at the end of the year. The company had been extraordinarily successful in its business, which consisted of granting licenses under patents for methods of oil refining; its revenues, beginning in 1922, had by the end of 1930 become very large, and its assets extremely valuable. Very early in the year 1931, its shareholders sold all their shares to the United Gasoline Corporation for $25,000,000, having just before withdrawn $4,100,000 from their treasury, which they transferred to a new company, organized for the purpose, and called the Unopco Corporation, whose shares they issued to themselves in the old proportions. This new company had no other assets, and its only business was to manage and invest the fund transferred. The shareholders had no interest in the United Gasoline Company, and had of course parted with all interest in the Universal Oil Products Company. The former employees of that company remained in its employ Bogardus among them. A few days after these transactions were completed the president of the Unopco Corporation at a meeting of shareholders declared that "during these years while we were struggling and moving forward, we had had the loyal support of a number of employees most particularly, and he thought it would be a nice and generous thing for us to show our appreciation and to remember them in the form of a gift or honorarium; * * * all of the stockholders acquiesced and were glad to do it; and the result was that it was understood that we would come forward and make these presents or gifts to these employees that were to be slated for it." The beneficiaries comprised patent attorneys, solicitors and experts some of them not retained since 1922 or 1923 engineers and chemists; and one was the sister of an employee who had been killed by an explosion. The resolution adopted by the board of directors was that the company "pay and distribute the said sum of Six Hundred Seven Thousand Five Hundred Dollars ($607,500) as a bonus to sixty-four (64) former employees, attorneys and experts of said Universal Oil Products Company, in recognition of the valuable and loyal services of said employees, attorneys and experts to said Universal Oil Products Company" in such sums as the directors should decide. The Unopco Corporation made no effort to deduct these payments as an expense of its business in its income tax return, and the donees did not charge themselves with what they received. The Board has held them all liable for a tax calculated upon the payments as income, and the Circuit Court of Appeals for the First Circuit has affirmed the ruling as to one, Judge Morton dissenting. Walker v. Helvering, 88 F.(2d) 61.
Such payments may be at once "gifts" under section 22, subdivision (b) (3), 26 U.S.C.A. § 22 and note, and "compensation for personal service" under subdivision (a). Subdivision (b) was indeed entitled "Exclusions," and since it declared that the prescribed items "shall be exempt *648 from taxation," it would perhaps not be unnatural to assume that, but for that exemption, they would have been within subdivision (a). Nevertheless it is evident upon reflection that some of them at least could by no possibility be "gains or profits," or among any of the specific items which that subdivision enumerated; for example, life insurance; compensation for sickness or injury; and "inheritances" as well unless in a very remote possibility. In these cases at any rate, the "exclusions" were not exceptions from gross income, and must have been included out of abundant caution. Furthermore, subdivision (b) (3) did not exempt under all conditions the specific items which it contained; for example, though a bequest or device to executors merely for qualifying is not "compensation for personal services" (United States v. Merriam, 263 U.S. 179, 44 S. Ct. 69, 68 L. Ed. 240, 29 A.L.R. 1547), it becomes such, if it is conditional on performance. Ream v. Bowers, 22 F. (2d) 465 (C.C.A.2); Rose v. Grant, 39 F. (2d) 338 (C.C.A.5). And indeed in all the cases where the taxability of bonuses and the like has been mooted, the payments have been legal gifts; except as they were, the taxpayer's position would not have been even plausible. The question has been whether, though gifts, they were also "compensation for personal services"; decisions like Old Colony Trust Co. v. Commissioner of Internal Revenue, 279 U.S. 716, 49 S. Ct. 499, 73 L. Ed. 918, proved that they could be both. When the donor is not an obligor, that is, when he is under no legal sanction to make the payment, the decision must therefore depend upon his intent perhaps more properly upon his motive and so the courts have very generally put it. Fisher v. Commissioner, 59 F.(2d) 192 (C.C.A.2); Schumacher v. United States (Ct.Cl.) 55 F.(2d) 1007, 1011; Bass v. Hawley, 62 F.(2d) 721 (C. C.A.5); Botchford v. Commissioner, 81 F.(2d) 914 (C.C.A.9).
We have, however, not found much help in learning what that intent or motive must be, and, while the issue remains unsettled, it seems scarcely profitable to catalogue the evidence; we rather need a test by which to determine what evidence is relevant. We agree that a man may make a gift to an old employee without meaning it as "compensation"; though probably such cases will be uncommon, especially if he declares that the payment is "in recognition of" past services. We will assume that the gift would be nothing more, if for instance the donor believed that what he had paid in the past was the full measure of anything that the employee was then "entitled to"; that in fairness he did not "owe" a cent; and that anything he might give was not only beyond what the law would exact, but what the employee could in justice demand. Even so the past services would be the cause of the gift in the sense that except for them the donor would never have been moved to spontaneous generosity, but the gift would not pay for the services. On the other hand, employers sometimes feel that their employees have never been paid in full; that their services deserved more than they have received; that the account between them is not quite in equitable balance. Such gifts are "compensation"; they are not only the result of the past relation, but they are a return specifically allocated to the donee's services. For example, a patient may increase his surgeon's bill; it would be "compensation," though a gift; yet, if he made him a present only because his skill, solicitude and kindness had bound them in a warm friendship, it would not be. A donor must not be moved to satisfy some uneasiness, some scruple, some sense that there is an outstanding claim which those would recognize to whose opinion he is sensitive: something which makes the payment more than an unconstrained act of affection or regard. In determining that question, the absence of any claim for deduction in the donor's tax return is of very little significance.
In the case at bar the parties have stipulated that "the payments were not made or intended to be made by said Unopco Corporation, or any of its stockholders as * * * compensation for any services rendered * * * by any of said employees * * * to said Unopco Corporation or to any of its stockholders. All of the recipients * * * were employees * * * of said Universal Oil Products Company at the time of the payment * * * or had been prior thereto." This means that the donees had not been employees of the shareholders, but it does not mean that the shareholders had not benefited by those services, as they clearly had, since nobody else could. The intent and a motive of the shareholders was necessarily that of the donor, Unopco Corporation, which could have no independent intent and motive; and that intent and motive were precisely *649 the same as though the shareholders had been the employers of the donees, which they were not. There is therefore no real difference in this regard between this case and Fisher v. Commissioner, supra, 59 F.(2d) 192. Nor is there any substantial difference in the motive which actuated that gift and these; for that decision cannot stand upon the donor's self-interest except by very strained assumptions; a bonus to a retiring president would very remotely affect the morale of the personnel at large; or even the donee's successor. The answer here is indeed doubtful, but on the whole we should have decided with the Board, had the decision been ours. The determining considerations appear to us to have been a little like those which control an award of salvage. The salaries and bonuses which had been paid while success was in doubt were fair enough as things then stood; but the highest hopes had been finally realized, and it seemed "nice and generous" to "recognize" by sharing the prize, those "loyal services" which had contributed to make them come true. The use of the words "honorarium" and "bonus" was particularly significant; shades of intent are often best seen by such unconscious choices. "Honorarium" is a word never used except to denote a compensatory payment; it is the very type of taxable transactions of this sort; and "bonus" is only a little less definite. Left to ourselves we should therefore have been disposed to say that these gifts were actuated by a sense that in fairness the donees deserved something more than they had got in the past, now that the ship had come in. But the decision is not primarily for us at all; the Commissioner had first to make his, and then the Board its own; more exactly, the taxpayer had to show the Board that the Commissioner had been wrong, and he must show us not only that the Board was wrong, but that its conclusion was beyond any reasonable inference from the evidence. We cannot go that far, whatever would have been our doubts, if we had been in its place; indeed, so impalpable are the determinants, that in such cases its conclusion will generally be final.
Nor are we embarrassed because one of the payments was to the sister of an employee who was killed in the company's service. It is quite true that the motive in that instance could not have been to compensate her for his services, but it was to compensate her for his loss nevertheless: at least it may have been. There was no inconsistency in harboring such a motive along with a desire to compensate others for their contribution to the outcome. So far as it is relevant at all, that gift tended to confirm the Board's conclusion.
Order affirmed.
SWAN, Circuit Judge (dissenting).
I cannot agree that the Board's decision, as expressed in its opinion, that the payments in question "were additional compensation in consideration of services rendered to Universal and were not tax-free gifts" is conclusively binding upon the court. The Board made no express finding that the payments were intended by Unopco or its stockholders as additional compensation for services of the recipients. Indeed, it was stipulated that "said payments were not made or intended to be made by said Unopco Corporation or any of its stockholders as payment or compensation for any services rendered or to be rendered or for any consideration given or to be given by any of said employees, attorneys or experts to said Unopco Corporation or to any of its stockholders." The evidentiary facts were undisputed, and I think the court is free to decide whether as a matter of law the payments were taxable or nontaxable. See General Utilities & Operating Co. v. Helvering, 296 U.S. 200, 206, 56 S. Ct. 185, 80 L. Ed. 154; Washburn v. Commissioner, 51 F.(2d) 949, 951 (C.C.A. 8); Burnet v. Lexington Ice & Coal Co., 62 F.(2d) 906, 909 (C.C.A. 4); Commissioner v. Bonwit (C.C.A. 2, Feb. 8, 1937) 87 F.(2d) 764.
If the question is open, I am constrained to a different conclusion from that reached by my brothers. To my mind the facts indicate that the shareholders of Unopco, by reason of selling their Universal shares for such fabulous sums, were moved to an act of "spontaneous generosity," rather than actuated by a sense of moral obligation to pay for services, inadequately compensated in the past, from which they had benefited if that distinction is to be the test between taxable and nontaxable gifts. The recipients of these payments were employees, attorneys, and experts of Universal, many of whom had had no connection with that company since 1922. There is nothing to indicate that their services had not been adequately, or even generously, paid for by Universal when they were rendered, nor *650 that any shareholder had any feeling that the accounts were not in "equitable balance" during all these years. Not until after the Universal shares had been sold and the president of Unopco suggested that it would be "a nice and generous thing" to show their appreciation in the form of a gift or honorarium was the matter of these payments ever considered. One of the recipients was the sister of an employee who had lost his life in 1919. Certainly the payment to her was purely a gift and cannot be taxed as compensation for services; yet there is nothing to indicate that the payment to her was actuated by any different motive from the payments to the others.
When an employer makes a voluntary payment to his employee, it is reasonable to infer, in the absence of very special circumstances, that it is intended as additional compensation. Fisher v. Commissioner, 59 F.(2d) 192 (C.C.A. 2). When the payment is by a stranger, the natural inference is that of a gift. Lunaford v. Commissioner, 62 F.(2d) 740 (C.C.A. 6). Stockholders of a corporate employer, though legally strangers to its employees, may make gifts intended as additional compensation. Bass v. Hawley, 62 F.(2d) 721 (C.C.A. 5). There the stock of the corporate employer was owned by a holding company, which made the payment and had an interest to be served in maintaining the loyalty and good will of the employees to their corporate employer. In the present case the stockholders of Unopco can receive no possible benefit from payments to former or present employees of Universal. The decision of the majority of the court goes further than any previous authority except Walker v. Commissioner (C.C.A. 1, Feb. 12, 1937) 88 F.(2d) 61, involving the same transaction as the case at bar. I agree with Judge Morton's dissent in that case.
NOTES
[*] Writ of certiorari granted 57 S. Ct. 790, 81 L.Ed. ___. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511085/ | 266 S.W.2d 804 (1954)
ALFORD
v.
STATE.
No. 4760.
Supreme Court of Arkansas.
March 15, 1954.
Rehearing Denied and Dissenting Opinion Filed April 26, 1954.
*805 Wiley A. Branton, Pine Bluff, for appellant.
Tom Gentry, Atty. Gen., Thorp Thomas, Asst. Atty. Gen, for appellee.
GEORGE ROSE SMITH, Justice.
The appellant was convicted of rape and was sentenced to death. In our opinion there are two errors in the record which entitle the appellant to a new trial.
Although it is contended that the evidence is insufficient to support the verdict we find this contention to be without merit. The prosecutrix, Mrs. Morman, testified that shortly after midnight on May 26, 1953, Alford entered the isolated railroad building in `which she was working as a telegrapher. When he revealed his purpose Mrs. Morman gave him her watch and money in the hope of dissuading him, but Alford threatened her with a hunting knife, dragged her from the building, and raped her. Two residents in the vicinity heard Mrs. Morman's screams. A physician who examined'her later in' the night "foVihd bruises on many parts of her body and s'emen within the vaginal tract The'watch was later found irt Alford's home. The defendant did not testify. We regard the testimony as' ample to support the conviction.
We think, however, that the court was in error in failing to inform the jury of its option to impose either the death sentence or life imprisonment. Since this option lies entirely with the jury the court is under the affirmative duty of bringing the matter to the jury's attention, even though that action is not requested by the accused. Webb v. State, 154 Ark. 67, 242 S.W.' 380; Smith v. State, 205 Ark. 1075, 172 S.W.2d 248,249.
In the case at bar the penalty for rape was not mentioned in the court's instructions. Nor is it shown that, when the forms of verdict were given to the jury by the court, any oral explanation of the forms was made. Two of these forms provided for a finding of guilty on the charge of rape, one fixing the punishment at death and the other at life imprisonment. It is of course possibleit is perhaps quite probable that the members of the jury so thoroughly discussed these forms that each juror understood his choice in the matter.' But it' is also possible that the alternative punishments were not discussed and that all the jurors did not examine the forms. ` In the latter case it might be impossible to discover the error, for jurors cannot impeach their verdict. In a matter of such grave imp6rtance we think that even the possibility of misunderstanding should be avoided. The court should explain the penalties to the jury as a whole, so that the record will disclose with certainty that the information was received by all the jurors.
Second, a Mrs. Austin was permitted to' testify that on a night during the first half' of May the defendant, by the use of a gun, forced her husband and her from their car, took her to a vacant house nearby, and attempted to rape her, although he at last yielded to her entreaties and desisted without having accomplished his purpose. The court instructed the jury, in substance, that *806 Alford could not be convicted upon Mrs. Austin's testimony, that evidence having been admitted only to show design, particular intention, knowledge, or good or bad faith. The appellant insists that the admission of this testimony was prejudicial error.-The State contends that proof of a recent offense of a similar nature is competent.
This question of introducing proof of other offenses in criminal cases has been considered by us on more than a hundred occasions. In reviewing these opinions one notices that the results reached in the various cases have been harmonious to a high degree. There have occasionally been dicta that went beyond the requirements of the case under consideration, and with so many decisions to choose from it is of course possible to pluck sentences from their factual background and in that way to advance a plausible argument supporting either the reception or the exclusion of evidence concerning almost any prior offense. But when each statement of law is weighed in its, own, setting of fact the opinions may be readily reconciled with one another.
No one doubts the fundamental rule, of exclusion, which, forbids, the prosecution, from;proving the commission of one crime; by proof of the commission of another. The State is not permitted to adduce evidence; of, other, offenses for the purpose of persuading, the jury that the accused is a criminal and is therefore likely to be guilty of the charge under investigation. In, short, proof of other crimes is never admitted when its only relevancy is to show that the prisoner is a man of bad character, addicted to crime.
The rule Itself has been announced in some fifty decisions of this court and is so familiar that we need not discuss at length the reasons for its acceptance by every English and American court. Basically, the rule rests upon that spirit of fair play which, perhaps more than anything else, distinguishes Anglo-American law from the jurisprudence of other nations. Our theory is simply that a finding of guilty should rest upon proof, beyond a reasonable doubt, that the accused committed the exact offense for which he is being tried. We do not permit the State to bolster its appeal to the jury by proof of prior convictions, with their conclusive presumption of verity, and still less is there reason to allow the jury to be prejudiced by mere accusations of earlier misconduct on the part of the defendant. If the accused has committed other crimes, each may be examined separately in a court of law, and punishment may be imposed for those established with the required certainty. In this way alone can we avoid the elements of unfair surprise and undue prejudice that necessarily attend trial by accusation in place of trial upon facts demonstrated beyond a reasonable doubt.
The rule is designed' to protect the innocent, but it is often invoked as a basis for excluding any evidence that tends to show the commission of another offense. We have repeatedly rejected unfounded appeals to the protection of the basic rule of exclusion. If other conduct on the part of the accused is independently relevant to the main issuerelevant in thcsense of tending to prove some material point rather than merely to prove that the defendant is a criminalthen evidence of that conduct may be admissible, with a proper cautionary instruction by the court. `"While the principle is usually spoken of as being an exception to the general rule, yet, as a matter of fact, it is not an exception;' for it is not proof of other crimes as crimes, but merely evidence of other acts which are from their nature `competent as showing knowledge, intent, or design, although they may be crimes, which is admitted. In other words, the fact that evidence shows the defendant was guilty of another crime does not prevent it being admissible when otherwise it would be competent on the issue under trial." State v. Dulaney, 87 Ark. 17, 112 S.W. 158, 160.
Although, as stated in the above quotation, the instances of admissibility are not really exceptions to the exclusionary principle, most courts, including this one, have often found it convenient to catalogue examples of competent testimony as exceptions to the general rule of inadmissibility. The only disadvantage in this approach is *807 the possibility that incompetent evidence may be admitted under the guise of an exception or that competent proof may be ruled out for want of an exception that seems to fit the case. Stone, The Rule of Exclusion of Similar Fact Evidence: America, Si Harv.L.Rev. 988.
The State contends that evidence of recent similar offenses is admissible in criminal cases. While that broad statement has appeared in a few opinions, it must on each occasion be read in context. Taken as a whole, our decisions do not support the view that the sole test of competency is the recency of the other offense and the similarity of its nature. Indeed, if that test were applied woodenly in each case the result would be to deprive the accused of much of the protection that the rule is intended to afford.
Superficially similar to the case at bar are those decisions holding that in trials for incest or carnal abuse the State may show other acts of intercourse between the same parties. Adams v. State, 78 Ark. 16, 92 S.W. 1123; Williams v. State, 156 Ark. 205, 246 S.W. 503, 504. But obviously such testimony is directly relevant to the question at issue. As stated in the Williams case, such prior acts of intercourse show "the relation and intimacy of the parties, their disposition and antecedent conduct towards each other," and for that reason the evidence aids the jury in determining whether the offense was committed on the particular occasion charged in the indictment.
Again, where the charge involves unnatural sexual acts proof of prior similar offenses has been received. Hummel v. State, 210 Ark. 471, 196 S.W.2d 594; Roach v. State, Ark., 262 S.W.2d 647. Such evidence shows not that the accused is a criminal but that he has "a depraved sexual instinct," to quote Judge Parker's phrase in Lovely v. United States, 4 Cir, 169 F.2d 386.
Perhaps the most frequent resort to evidence of recent similar offenses occurs in the cases involving guilty knowledge. In such cases good faith would be a defense to the charge; the vital issue is whether the defendant knew his conduct to be wrongful. For example, it is not a crime to pass a forged check in the belief that it is genuine, but the same conduct is criminal when done with knowledge that the instrument is bogus. Since it is highly improbable that an innocent man would repeatedly come into possession of forged' checks, proof of recent similar offenses bears directly on the issue of guilty knowledge. In this category fall cases involving' forgery, counterfeiting, false pretenses, knowledge that an establishment is a gambling house, and many other situations. Cain v. State, 149 Ark. 616, 233 S.W. 779; Holden v. State, 156 Ark. 521, 247 S.W. 768; Mc-Coy v. State, 161 Ark. 658, 257 S.W, 386; Norris v. State, 170 Ark. 484, 280 S.W. 398; Wilson v. State, 184 Ark. 119, 41 S.W.2d 764; Sibeck v. State, 186 Ark. 194, 53 S.W.2d 5.
We need not take the time to review in detail the cases in which proof of other recent similar offenses is competent under other so-called exceptions to the general rule, as to show motive, Shufneld v. State, 120 Ark. 458, 179 S.W. 650, to rebut the plea of an alibi, Nash v. State, 120 Ark. 157, 179 S.W. 159, to prove the transaction as a whole, Autrey v. State, 113 Ark. 347, 168 S.W. 556, and so forth. The present case centers upon proof offered to show intent; so we turn to representative decisions on that point.
The issue of intent is theoretically present in every criminal case, and for that reason it is here that we are most apt to overlook the basic requirement of independent relevancy. Professor Stone, in the article cited above, has cogently demonstrated how easy it is to reason in this manner: Evidence to prove intent is admissible, and since the present case involves intent the proof should be received. 51 Harv.L.Rev. 988, 1007. What has happened is that the emphasis has shifted from evidence relevant to prove intent to evidence offered for the purpose of proving intent, by showing that the defendant is a bad man. If this transfer of emphasis is permitted the exclusionary rule has lost its meaning. *808 Many of the cases involving intent are similar to those involving guilty knowledge, in that guilt involves a specific mental atti, tude on the: part of the defendant. For example, burglary is more than the mere breaking and entering, of the premises; the defendant must have intended to commit a felony therein. We have therefore held that, when the accused contended that his wrongful entry was a mere trespass without felonious purpose, the State could show that the defendant had on other occasions broken into the, same, store and committed larceny. Camp v. State, 144 Ark. 641 (mem.), 215 S.W. 170. The recent similar offense was directly pertinent to the issue of intent.
"Similarly, upon a charge of unlawful possession of morphine the defendant contended that she `had the drug lawfully for her own use, upon a doctor's prescription. We held that the State could show that she also-had in her possession a quantity of cocaine, as bearing upon the question of whether the morphine was being kept for her own use or for Sale or administration to others. Starr v. State, 165 Ark. 511, 265 S.W. 54. Again, where the issue was whether the accused had burned a car to collect insurance,: proof that he had burned Other insured vehicles was competent. Casteel v. State, 205, Ark. 82, 167 S.W.2d 634. The same reasoning was followed in Jenkins v. State, 191 Ark. 625, 87 S.W.2d 78.
A specific intent was involved in Davis v. State, 109 Ark. 341, 159 S.W. 1129, 1130. The statutory definition of a vagrant included a person going from place to place for the purpose of gaming. `The State was rightly'' allowed to prove that the defendant had gambled in other counties. "We think such testimony was competent, not for the purpose, of proving the commission of the same offense in another county, but to show the purpose of his wanderings, whether to pursue a lawful avocation or to habitually engage in the pursuit of gambling." The clause we have italicized states plainly enough that a recent similar offense is not for that reason alone competent.
Quite evidently this category includes the many charges of assault with intent to commit a specified crime, for here the State must prove not merely the assault but also that it was made with a certain intent. Hence, since the accused's purpose is at issue, proof of other similar offenses is independently relevant. Stone v. State, 162 Ark. 154, 258 S.W. 116;, Hearn v. State, 206 Ark. 206, 174 S.W,2d 452; Gerlach v. State, 217 Ark. 102, 229 S.W.2d 37; Wigmore on Evidence (3rd Ed.), § 357.
On the other hand, the reception of proof of recent similar offenses is prejudicial error when the evidence has no true relation to the issue of intent. In two of our cases the charge Was theft of horses, and the State was allowed to prove closely contemporaneous thefts of saddles or bridles. Both convictions were reversed and sent back for a new trial. Dove v. State, 37 Ark. 261; Endaily v. State, 39 Ark. 278. See also Mays v. State, 163 Ark. 232, 259 S.W. 398; Yelvington v. State, 169 Ark. 359, 275 S.W. 701. In Morris v. State, 165 Ark. 452, 264 S.W. 970, a conviction for assault with intent to kill was reversed because the State had been allowed to prove prior offenses by the accused, the State's theory being that these offenses tended to show the accused's motive in shooting at police officers. Judge Frank Smith put his finger on the point when he said: "There was no question about the motive of appellant in shooting at the officers."
Thus our cases very plainly support the common-sense conclusion that proof of other offenses, is competent when it actually sheds light on the defendant's intent; otherwise it must be excluded. In the case at bar it seems to us idle to contend that there was any real question about Alford's intent, concerning which the jury needed further enlightenment. See Wigmore, § 357. If Alford overpowered his victim and ravished her, it is a quibble to contend that perhaps he intended something other than rape. The jury's problem was to determine whether the acts described by the prosecutrix took place; if so, their motivation *809 is not open to doubt. The earlier attack upon Mrs. Austin could have no conceivable pertinence except to brand Alford as a criminal, which is just what the State is not allowed to do. Williams v. State, 183 Ark. 870, 39 S.W.2d 295. Nor could this deadly prejudice be removed by the instruction confining Mrs. Austin's testimony to the issue of intent. If her evidence had no permissible relevancy to that issue, and we think it had none, then the jury could obey the instruction only by disregarding the evidence altogethera result that is more surely accomplished by excluding the testimony in the first place. It is not without regret that we send this cause back for a new trial. But the issue goes to the very heart of fairness and justice in criminal trials; we cannot conscientiously sustain a verdict that may have been influenced by such prejudicial testimony.
Reversed.
GRIFFIN SMITH, C. J, and MILWEE, J., dissent.
McFADDIN, J., dissents in part. On Petition for Rehearing.
GEORGE ROSE SMITH, Justice.
In connection with a petition for rehearing the State asks leave to amend the record by showing that the trial court in fact instructed the jury with respect to the alternative penalties for the crime of rape, this instruction having been omitted from the record by error. If this were the only reason for remanding the case for a new trial a ruling upon this motion would be necessary, as in Morton v. State, 208 Ark. 492, 187 S.W.2d 335; but since a new trial is necessary in any event we find it unnecessary to pass upon the State's, motion. See Smith v. State, 205 Ark. 1075, 172 S.W.2d 248, 249.
Rehearing denied.
McFADDIN, Justice `(dissenting).
1. Failure to Instruct on Life Imprisonment
I agree that the record in this case fails to show that the Jury was instructed regarding life imprisonment; and this case, on that point, is ruled by the cases of Webb v. State, 154 Ark. 67, 242 S.W. 380, and Smith v. State, 205 Ark. 1075, 172 S.W.2d 248, 249. Therefore, I am convinced we should do here as we did in the cited cases; and this should be our direction, as quoted from Webb v. State, supra 154 Ark. 67, 242 S.W. 384:
"The sentence of death * * * will be set aside, and the sentence reduced to imprisonment for life in the state penitentiary at hard labor, unless the Attorney General elects within two weeks to have the judgment reversed' and the cause remanded for a new trial."
II.
Proof of Other Acts of a Similar Nature
But I most earnestly dissent from all that part of the majority opinion which holds that the Trial Court committed error in admitting evidence of Alford's attempt to rape Mrs. Austin. Such evidence was entirely competent under the Instruction given by the Trial Court, as hereinafter quoted.
The majority opinion correctly states that the prosecution in any criminal case cannot pr6ve the commission of the crime in question by the proof of the commission of other offenses of a similar nature; but such was not attempted to be done in the case at bar. That the evidence of the attack on Mrs. Austin was not admitted for such purpose is clearly shown by the instruction which the Trial Court gave to the Jury,'and which reads:
"The Court has admitted testimony of another offense similar to the one charged in the information. You will not be permitted to convict the defendant upon such testimony. Evidence of another similar offense, if you believe another has been proven, is admitted solely for the purpose of Showing design, *810 particular intention, knowledge, good or bad faith, and you should consider such evidence for this purpose and for this purpose alone. The defendant is not on trial for any offense except the alleged offense against Mrs. Morman and the defendant cannot be convicted on Mrs. Austin's testimony of another possible offense."
The majority opinion says: "If other conduct on the part of the accused is independently relevant to the main issuerelevant in the sense of tending to prove some material point rather than merely to prove that the defendant is a criminalthen evidence of that conduct may be admissible, with a proper cautionary instruction by the Court." The instruction copied above shows that a "proper cautionary instruction" was given in the case at bar.
The majority opinion admits that in some cases, proof of other acts of a similar nature is admissible as bearing on the "knowledge, intent, or design"; and the majority opinion cites at least eight situations in which other acts of a similar nature have been held to be admissible by our cases. I take these eight situations and cases from citations in the majority opinion:
1. "* * * in trials for incest or carnal abuse the State may show other acts of intercourse between the same parties. Adams v. State, 78 Ark. 16, 92 S.W. 1123; Williams v. State, 156 Ark. 205, 246 S.W. 503, 504."
2. "Again, where the charge involves unnatural sexual acts proof of prior similar offenses has been received. Hummel v. State, 210 Ark. 471, 196 S.W.2d 594; Roach v. State, Ark, 262 S.W.2d 647."
3. "* * * in the cases involving guilty knowledge * * * cases involving forgery, counterfeiting, false pretenses, knowledge that an establishment is a gambling house, and many other situations. Cain v. State, 149 Ark. 616, 233 S.W. 779; Holden v. State, 156 Ark. 521, 247 S.W. 768; McCoy v. State, 161 Ark. 658, 257 S.W. 386; Norris y. State, 170 Ark. 484, 280
S.W. 398; Wilson v. State, 184 Ark. 119, 41 S.W.2d 764; Sibeck v. State, 186 Ark. 194, 53 S.W.2d 5."
4. In those cases "* * * in that guilt involves a specific mental attitude on the part of the defendant * * *. Camp v. State, 144 Ark. 641 (mem.), 215 S.W. 170. The recent similar offense was directly pertinent to the issue of intent."
5. * * * possession a quantity of cocaine, as bearing upon the question of whether the morphine was being kept for her own use or for sale or administration to others. Starr v. State, 165 Ark. 511, 265 S.W. 54."
6. "Again, where the issue was whether the accused had burrted a car to collect insurance, proof that he had burned other insured vehicles was competent. Casteel v. State, 205 Ark. 82, 167 S.W.2d 634."
7. "The State was rightly allowed to prove that the defendant had gambled in other counties * * * to show the purpose of his wanderings, * * *." Davis v. State, 109 Ark. 341, 159 S.W. 1129.
8."* * * the many charges of assault with intent to commit a specified crime * * * Since the accused's purpose is at issue, proof of other similar offenses is independently relevant. Stone v. State, 162 Ark. 154, 258 S.W. 116; Hearn v. State, 206 Ark. 206, 174 S.W.2d 452; Gerlach v. State, 217 Ark. 102, 229 S.W, 2d 37".
' Now, in the above eight numbered categories, I have quoted directly from the majority opinion to show cases in which the majority opinion admits that evidence of other similar offenses was admissible in each instance. I submit that when the majority admitsas it hasthat in the eight categories above, the evidence of other similar acts was admissible, then the majority cannot be heard to saywith any degree of consistencythat the evidence of a similar attempted rape was not admissible in the case at bar.
In category 2 above, the majority admits that "where the charge involves unnatural *811 sexual acts proof of prior similar offenses has been received". I submit that rape falls in the same category as that quoted, because rape is forced sexual intercourse. In Needham v. State, 215 Ark. 935, 224 S.W.2d 785, in discussing rape and unnatural sexual intercourse, this Court (speaking through the writer of the majority opinion in the present case), said:
"The argument now is that the accused may be a sexual pervert (he was so characterized by one witness for the defense) who did not either intend or accomplish an act of intercourse. The patent answer to this suggestion is that the proof still does not show the possibility of an assault with intent to rape; for one can intend to commit rape only if he intends to have sexual intercourse with his victim."
Thus, in the Needham case, the words were "for one can intend to commit rape only if he intends to have sexual intercourse with his victim". (Italics our own.) The quoted language from the Needham case constitutes judicial recognition that intent has been recognized as being involved in the offense of rape. So, if "other acts of a similar nature" are admissible where intent is involved, then I fail to see why the attack on Mrs. Austin was not admissible in the case at bar': it was certainly another act of a similar nature to show the intent with which the appellant attacked Mrs. Morman, for which act he was being tried.
Further, I point out that when the defendant was being tried for rape in the case at bar, he was also being tried for assault with intent to rape. At defendant's request, the Court gave Instruction No. 4, which reads:
"The crime of assault with intent to rape is embraced in the information charging the crime of rape; whoever shall feloniously, wilfully, and with malice aforethought assault any person with intent to commit a rape shall on conviction thereof be imprisoned in the penitentiary not less than three nor more than twenty-one years."
Now the majority opinion says in its category 8, (supra), that in cases Of assault with intent to commit a specific crime "* * * proof of other similar offenses is independently relevant". Appellant asked the Court to instruct the Jury on the crime of assault with intent to rape. How can the majority say, in the face of appellant's requested Instruction which was given, that evidence of other similar offenses was not admissible on the issue of intent? I submit that the majority opinion shows that the testimony about the attack on Mrs. Austin was correctly admitted by the Trial Court.
Because I entertain the views herein expressed, I respectfully dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511139/ | 266 S.W.2d 284 (1954)
CLOUD OAK FLOORING CO., Inc.
v.
J. A. RIGGS TRACTOR CO.
No. 5-255.
Supreme Court of Arkansas.
April 5, 1954.
Dissenting Opinion April 12, 1954.
*285 Ben B. Williamson, Mountain View, for appellant.
Stanley E. Price and Rose, Meek, House, Barron & Nash, Little Rock, for appellee.
DAILY, Special Judge.
The appellant argues only two questions in its brief. These are the only points properly presented here. Connell v. Robinson, 217 Ark. 1, at page 4, 228 S.W.2d 475; Bowling v. Stough, 101 Ark. 398, at page 404, 142 S.W. 512; Purifoy v. Lester Mill Co., 99 Ark. 490, at page 494, 138 S.W. 995.
Stated in inverse order these are: (1) Conversion is not a proper remedy of a conditional seller against one holding under his conditional buyer; and (2) A provision in a conditional sales contract conditioning the passage of title upon the payment by the buyer of open account indebtedness due the seller for repairs to the machine sold, and in addition to the deferred installments of the purchase price, is not enforceable, after the full payment of the purchase price, against one holding under the buyer.
For the first proposition stated appellant relies on Loden v. Paris Auto Co., 174 Ark. 720, 296 S.W. 78. But the point of that case, on the question of conversion, was that a conditional buyer has an interest which he can sell or mortgage without the consent of the conditional seller, Fairbanks, Morse & Co. v. Parker, 167 Ark. 654, 269 S.W. 42, and, therefore, a purchase from the buyer, alone and of itself, does not constitute a conversion. Appellant quotes from Olson v. Moody, Knight & Lewis, 156 Ark. 319, 246 S.W. 3, 4, as follows:
"* * * This court is committed to the doctrine that a vendor who has retained the title in personal property until the payment of the purchase money has only two remedies for a breach of the contract. He may either treat the sale as canceled and bring suit in replevin for the property, or may treat the sale as absolute and sue for the unpaid purchase money and in aid thereof attach the property * * *. There is no suggestion in any of the Arkansas cases that a third remedy is open to a vendor who has conditionally sold personal property. * * *"
But there the seller sued in the Chancery Court for the debt representing the unpaid purchase price and sought to have a lien declared and foreclosed upon *286 the subject of the sale. The question before the Court was the jurisdiction of equity to create a lien in favor of the conditional seller upon the subject of the sale in an action for the balance of the purchase price. The Court held not, and added to the language above quoted:
"* * * As stated before, a vendor has an adequate remedy at law, and no necessity exists for equity to mold a remedy to preserve his rights. * * *"
Subsequently this Court has recognized and enforced the remedy of conversion in favor of conditional sellers against purchasers from the buyer under a proper showing. Wright Motor Co. v. Shaw, 171 Ark. 935, 287 S.W. 177; General Contract Purchase Corporation v. Row, 208 Ark. 951, 188 S.W.2d 507; Schwartz v. Fulmer, 214 Ark. 572, 217 S.W.2d 254; Bailey v. Tolleson, 219 Ark. 307, 241 S.W.2d 110; Strickland v. Quality Building and Security Co., 220 Ark. 708, 249 S.W.2d 557. These lay down the rule that conversion is a proper remedy of the conditional seller against one holding under the conditional buyer if such holder disposes of the subject of the sale, or withholds its possession, after notice of the seller's claim and demand for possession by the seller following the conditional buyer's default.
The appellant has brought into the transcript the testimony of its own general superintendent, in the form of his oral deposition taken by stipulation and filed with the trial Court. It conclusively shows that appellant retained and withheld possession of the tractor in controversy, having removed it out of the State, after the filing of the complaint and service of summons on appellant. The latter was full notice to the appellant of appellee's claim of title under its conditional sales contract and of the conditional buyer's default and constituted demand for possession. Therefore, all of the elements of conversion are present.
The second question presented by the appellant-validity of use of conditional sales contract to secure a subsequently incurred debt in addition to the purchase pricehas not been clearly answered in Arkansas decisions. In this case it arises under the following contract provisions:
"Title to the property aforesaid shall remain in the seller until the full purchase price thereof and all interest thereon and all reimbursable expenses incurred by seller shall have been paid in full.
* * * * * *
"Buyer agrees, during the continuance of this contract, * * * to make any and all repairs thereon which may be necessary to keep said property and its equipment in as good condition as it is now, reasonable use and wear thereof excepted; * * *
******
"Should buyer fail to do or perform any of the acts or things required to be done by him under any of the terms hereof, seller may, at its option, do and perform any of such acts or things on the buyer's behalf, and all moneys advanced or paid by seller in so doing shall be added to and be deemed a part of the balance due hereunder and bear interest at a like rate."
Pending payment of the deferred purchase price installments the conditional seller, appellee made repairs to the tractor in controversy, charging the costs of the parts and labor to the conditional buyer on open account. This open account indebtedness for repairs has never been paid and is the basis of the appellee's claim of retained title as against appellant, mortgagee of the conditional buyer.
This question is the subject of an annotation found at 148 A.L.R. page 346 following Re Halferty, 7 Cir., 136 F.2d 640, 148 A.L.R. 342. In Re Halferty the Court of Appeals for the Seventh Circuit had before it this precise question and lists the earlier decisions pro and con, including the three from Arkansas pertinent to the point and which are hereafter referred to separately. The decision in Re Halferty, upholding the validity of such contract provision as *287 against the conditional buyer's trustee in bankruptcy, is bottomed, however, upon Section 20 of the Uniform Sales Act then in force in Illinois, locus of the sale, S.H.A. ch. 12½, § 20 (Ark.Stats.1947, Section 68-1420 is the same). But when our Legislature adopted the Uniform Sales Act, Act 428 of 1941, it appended a Section 76c, Section 68-1479, not a part of the original uniform act, and this added Section expressly excepted conditional sales from the Uniform Sales Act's operation and terms in our State. Therefore, Re Halferty is not of value in determining the issue in Arkansas.
In Faisst v. Waldo, 57 Ark. 270, 21 S.W. 436, the question was mooted and avoided by employment of the principle of application of payments to effectuate the evident intent of the parties. In Augusta Cooperage Co. v. Parham, 139 Ark. 605, 213 S.W. 737, the Court assumed valid, as against a mortgagee of the conditional buyer without notice, a condition obligating payment of sums other than the purchase price, if incorporated in a title retention sale contract. But the lower court had found, on disputed testimony, that the contract was not so conditioned. The decision was merely an affirmance of this fact finding, on the ground that it was supported by substantial evidence. In Hammans Lumber Co. v. Fricker, 184 Ark. 1193, 42 S.W.2d 1001, 1002, an action of conversion by the conditional buyer against his conditional seller who had repossessed the subject of the sale, the Court approved an instruction to the effect that the conditional buyer "could not recover if he had purchased the truck at a given price * * * with the agreement that the truck with its equipment was to remain the property of [the seller] until the purchase price and repairs were paid, and that the [conditional buyer] had failed to pay such purchase money and cost of repairs." (Emphasis added.) The last two of these three Arkansas decisions are not reported in full in the official Arkansas reports, the Court concluding they were of no value as precedents.
A majority of the decisions of other jurisdictions have approved such provisions as a valid condition to be imposed by a title retention contract of sale, although some of these, like in Re Halferty, are predicated upon the Uniform Sales Act or the Uniform Conditional Sales Act, neither of which is of support here.
It is not necessary that we decide the enforceability of such a provision as against innocent third parties without notice, and thereby extend the inherent vice of secret liens, resulting from our lack of statutory requirement that title retention sale contracts be in writing and recorded or filed (motor vehicles exceptedArk. Stats.1947, 1953 Cum.Supp. Sections 75-160 and 75-161). Here the appellant had full notice of the existence of appellee's conditional sale contract and assumed and agreed to pay the installments of the purchase price due under it. The testimony of the appellant's general superintendent, referred to hereinabove, is unequivocally to this effect. In fact appellant paid or furnished the funds to pay all of the installments of the purchase price. If it never saw the contract and the provisions in it copied above, it was nevertheless charged with notice of them. One who has notice or knowledge of an instrument is charged with notice of all recitals and provisions in it, if reasonably obtainable on inquiry. Kellogg-Fontaine Lumber Co. v. Cronic, 219 Ark. 170, 240 S.W.2d 872, 39 Am.Jur., Notice and Notices, Section 22, page 246. Appellant had only to request inspection of the buyer's or the appellee's copy of their contract. The former was an employee of the appellant.
We hold the provisions of the contract herein quoted effective to condition passage of title upon payment of the repair bills incurred for the maintenance of the subject matter of the sale, and valid and enforceable against appellant, holding under the buyer, and charged, as appellant is, with notice of these provisions of the contract at the time it acquired its interest.
Affirmed.
WARD, J., dissents.
GEORGE ROSE SMITH, J., not participating.
*288 WARD, Justice (dissenting).
In disagreeing with the majority opinion in this case I am not concerned with the first question discussed in the opinion relative to conversion being the proper remedy. My dissent goes to the second question discussed which relates to the effect of the provision in the conditional sale contract whereby appellee attempted to retain what amounts to a lien on the tractor to secure it for repairs. I want to note at this time that the "repairs" with which we are concerned here had not been made at the time of the sale but that they refer to repairs which appellee contemplated it might make sometime in the future.
It is noted also that the majority opinion recognizes that the question here involved "has not been clearly answered in Arkansas decisions." This is one of the reasons why I think "the inherent vice of secret liens", as recognized in the majority opinion, should not be extended, and there are other reasons. Our statutory law provided appellee a method whereby it could perfect a lien on the tractor for the repairs which it had furnished. Ark.Stats. § 51-404 and § 51-405 allow appellee to retain possession of the tractor after the repairs have been made, in which event it would have had a lien to protect its credit. Appellee could also have perfected a lien under Sections § 51-409 and § 51-412, but in this event it would have been necessary to file a claim with the clerk within 90 days after the repairs were made. Of course appellee could also have taken a chattel mortgage on the tractor for repairs, but the mortgage would have had to be placed of record. Appellee, however, did not choose to follow any of these remedies but chose to rely on the provision in the conditional sale contract.
It seems obvious to me that if the said provision about repairs was valid it would have to be on the same basis as the provision for purchase price. The majority opinion does not choose to put both provisions on the same basis. If not on the same basis then the questioned provision in the sale contract can only be likened to a mortgage. But an unrecorded mortgage is not notice to third parties. In Leonhard v. Flood, 68 Ark. 162, 56 S.W. 781, 783, the court said: "An unrecorded mortgage, in this state, constitutes no lien as to third parties". This rule has been consistently upheld by many subsequent decisions. We also uniformly hold that an unrecorded mortgage is not good against a third party even though he has actual notice. Polster v. Langley, 201 Ark. 396, 144 S.W.2d 1063. Therefore it is my conclusion that the provision in the conditional sale contract concerning payment for repairs amounted to no more than an unrecorded mortgage.
Assuming my position thus far is not sound, there is another reason why I think the majority opinion is wrong. It is based on the proposition that appellant, in this case, had actual notice of the provision in the conditional sale contract. The opinion states: "Here the appellant had full notice of the existence of appellee's conditional sale contract * * *." Just what does this mean? This case comes to us from an order of the trial court overruling a demurrer to appellee's complaint. It must be conceded that the demurrer will be tested here by, and only by, the allegations contained in the complaint. The only allegation in the complaint relative to notice is the following: "On or about August 1, 1952 and with knowledge of the existence of the aforesaid contract of sale defendant took possession. * * *" I submit that this statement contained in the complaint is not equivalent to a statement that appellant had knowledge of the existence of the peculiar provision in the contract. The majority opinion apparently in an effort to substantiate its assertion that appellant had actual knowledge, refers to a certain deposition or stipulation which was filed in this case, but this deposition was not a part of the complaint and therefore should not be considered. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511158/ | 939 F. Supp. 319 (1996)
Daniel PICCOLO, Petitioner,
v.
Douglas LANSING, Respondent.
Civil No. 95-5953 (AET).
United States District Court, D. New Jersey.
August 15, 1996.
Daniel Piccolo, Fort Dix, NJ, Pro Se.
Irene Elaine Dowdy, United States Attorney's Office, Trenton, NJ, for Respondents.
OPINION
ANNE E. THOMPSON, Chief Judge.
This matter is before the Court on Daniel Piccolo's petition for a writ of habeas corpus. Petitioner is incarcerated at the Federal Correctional Institution at Fort Dix, New Jersey. As the proper respondent in a habeas corpus petition is the warden of the institution where the petitioner is housed, the Court will sua sponte substitute Douglas Lansing, Warden of the Federal Correctional Institution at Fort Dix, New Jersey, as the respondent in this action. The Court considered this matter without oral argument.
Background
On June 29, 1993 petitioner, a convicted felon, was arrested for possession of a .25 caliber semi-automatic handgun and a .9 millimeter semi-automatic handgun which had been modified to fire as a fully automatic weapon. Petitioner pled guilty to a violation of 18 U.S.C. § 922(g)(1), felon in possession of a firearm. On September 8, 1994 petitioner was sentenced to a term of thirty seven months incarceration and three years supervised release. His anticipated release date, including time off for good conduct, is May 10, 1997.
On November 20, 1995 petitioner instituted this action by filing a complaint pursuant to 28 U.S.C. § 1331, alleging that the defendants improperly denied him a reduction in *320 his sentence and seeking declaratory relief. In particular, he asserts that he is entitled to a reduction in his sentence pursuant to 18 U.S.C. § 3621(e)(2)(B) for successful completion of a residential drug treatment program. By order dated May 20, 1996, the Court ordered that the complaint be construed as a petition for a writ of habeas corpus.
Discussion
Pursuant to 18 U.S.C. § 3621(e)(2)(B), "The period a prisoner convicted of a nonviolent offense remains in custody after successfully completing a treatment program may be reduced by the Bureau of Prisons, but such reduction may not be more than one year from the term the prisoner must otherwise serve." Petitioner completed a residential drug treatment program on March 8, 1996. However, the Bureau of Prisons has denied his request for a reduction in his sentence on the grounds that the Bureau does not consider his offense to be a nonviolent offense. See Declaration of Alberto Munguia ¶ 5; Declaration of David DeFrancesco ¶ 5. Petitioner argues that his offense should be considered a nonviolent offense.
Neither Congress nor the Bureau of Prisons has expressly defined "nonviolent offense" as used in 18 U.S.C. § 3621(e)(2)(B). However, the Bureau of Prisons has described the term by reference to the definition of "crime of violence as defined in 18 U.S.C. § 924(c)(3)." See 28 C.F.R. § 550.58. 18 U.S.C. § 924(c)(3) defines "crime of violence" as:
an offense that is a felony and
(A) has as an element the use, attempted use, or threatened use of physical force against the person or property of another, or
(B) that by its nature involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense.
In addition, the Bureau of Prisons has issued Program Statement 5162.02 which lists numerous statutory offenses and categorizes them as either crimes of violence in all cases or crimes of violence depending on the facts in a particular case. Violations of 18 U.S.C. § 922(g)(1), felon in possession of a firearm, are listed as crimes of violence in all cases.
A district court in the Ninth Circuit has held that the Bureau of Prisons has adopted 18 U.S.C. § 924(c)(3) as the definition of crime of violence, and that in doing so the Bureau is bound by the Ninth Circuit's interpretation of the statute. See Davis v. Crabtree, 923 F. Supp. 166 (D.Ore.1996); Hines v. Crabtree, 935 F. Supp. 1104 (D.Ore., 1996). As the Ninth Circuit has held that possession of a weapon by a felon is not a crime of violence under 18 U.S.C. § 924(c)(3), see United States v. Canon, 993 F.2d 1439, 1441 (9th Cir.1993), the district court has concluded that the Bureau of Prisons lacks authority to exclude violations of 18 U.S.C. § 922(g)(1) from the definition of nonviolent offense. See Davis, 923 F.Supp. at 167; Hines, 935 F.Supp. at 1108; but see Sesler v. Pitzer, 926 F. Supp. 130 (D.Minn.1996).
The Third Circuit has not decided whether possession of a weapon by a felon is a crime of violence under 18 U.S.C. § 924(c)(3). Moreover, the Third Circuit has interpreted similar definitions of "crime of violence" as potentially including possession of a weapon by a felon, depending on the circumstances of the particular offense. See United States v. Joshua, 976 F.2d 844, 853 (3d Cir.1992). The caselaw in this Circuit therefore does not compel the conclusion that the district court reached in Davis and Hines.
In addition, we disagree with that court's interpretation of the Bureau of Prison's regulations. 28 C.F.R. § 550.58 does not define "nonviolent offense" as any offense other than "crimes of violence" under 18 U.S.C. § 924(c)(3). Rather, the regulation simply lists "inmates whose current offense is determined to be a crime of violence as defined in 18 U.S.C. § 924(c)(3)" among a number of categories of inmates who are not eligible for a reduction in sentence. We therefore conclude that the Bureau of Prison's determination that felon in possession of a weapon is not a "nonviolent offense" under 18 U.S.C. § 3621(e)(2)(B) is within the discretion Congress *321 gave the Bureau for the administration of the residential treatment program. See Reno v. Koray, ___ U.S. ___, ___, 115 S. Ct. 2021, 2027, 132 L. Ed. 2d 46 (1995).
In addition, we note that the Bureau's denial of a sentence reduction does not deprive petitioner of a liberty interest cognizable under the Due Process clause. The terms of 18 U.S.C. § 3621(e)(2)(B) only state that a sentence "may be reduced by the Bureau of Prisons." Such language does not create a liberty interest, and the Bureau's denial of a reduction is not a "dramatic departure from the basic conditions" of petitioner's sentence. See Sandin v. Conner, ___ U.S. ___, ___, 115 S. Ct. 2293, 2301, 132 L. Ed. 2d 418 (1995).
Conclusion
For the foregoing reasons, the Court will deny petitioner's application for a writ of habeas corpus. An appropriate order will be filed herewith.
ORDER
For the reasons set forth in this Court's opinion filed even date herewith;
It is on this 15th day of August, 1996;
ORDERED that Douglas Lansing be and hereby is substituted as the sole respondent in this matter; and it is further,
ORDERED that Daniel Piccolo's petition for a writ of habeas corpus be and hereby is DENIED and this case is hereby CLOSED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511141/ | 548 Pa. 286 (1997)
696 A.2d 1169
Francis SPINO and Louise Spino, h/w, Appellants,
v.
JOHN S. TILLEY LADDER COMPANY, and M.A. Buten and Son, Inc., Appellees.
Supreme Court of Pennsylvania.
Argued January 27, 1997.
Decided June 17, 1997.
*287 *288 *289 Francis X. Nolan, Gerald A. McHugh, Donald E. Matusow, Philadelphia, for Francis and Louise Spino.
Terry S. Hyman, Harrisburg, for Amicus- Pa. Trial Lawyers Assoc.
Arthur M. Toensmeier, J. Michael Doyle, Philadelphia, for John S. Tilley Ladder Co.
James M. Beck, Philadelphia, for Amicus-Product Liability.
Andrew F. Susko, Philadelphia, for Amicus-Pa. Defense Institute.
Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO and NEWMAN, JJ.
OPINION
NIGRO, Justice.
The issue before this Court is whether the trial court erred when it admitted "lack of prior claims" evidence. We conclude the Superior Court properly affirmed the trial court's decision to admit such evidence, and therefore, we affirm.
Appellants, Francis and Louise Spino ("the Spinos") purchased a type 3 ordinary household ladder in 1986 from a paint store. The ladder was manufactured by Appellee John S. Tilley Ladder Company ("Tilley") and was designed to accommodate ordinary household use restricted to a 200 pound weight bearing load.[1] Francis Spino testified that he purchased the ladder for a painting project and later used the ladder for household projects. Louise Spino testified that she used the ladder two or three times a year to wash windows or hang curtains.
In November 1986, Louise Spino brought the ladder into her kitchen, placed a bucket of water on the ladder shelf and climbed the ladder. At trial, Mrs. Spino testified that while she reached her arm up in an attempt to clean the kitchen *290 ceiling, she heard a cracking sound, the ladder shook, and the next thing she remembers she was on the floor. Mrs. Spino was then taken to the emergency room and underwent hospitalization and surgery to repair a fractured tibia and fibula.[2] As a result, the Spinos instituted a product liability action against Appellees for Louise Spino's injuries and Francis Spino's loss of consortium. It was their assertion that the ladder leg cracked since it lacked an anti-split device. The Spinos initially asserted two theories of liability, common law negligence and strict liability pursuant to § 402A, Restatement (Second) of Torts. At the outset of trial, Appellants dismissed M.A. Buten and Son, Inc. from the case and abandoned any negligence claims, proceeding against Tilley on strict liability.
Prior to trial, the Spinos filed a Motion in Limine seeking preclusion of the admission of evidence provided by Tilley's President, Robert Howland. Mr. Howland was expected to testify that there had been no similar accidents or claims with respect to this particular product in his thirty years of employment with the company and neither he, nor anyone at the company, had ever been informed of a failure similar to the one alleged by the Spinos. The Spinos maintained that allowing such evidence impermissibly injected negligence principles into a § 402A strict liability products liability action, and therefore, it is per se inadmissible. In response, Tilley maintained that the evidence was relevant to prove that the ladder had not failed as alleged and was not intended to prove that Tilley had been free of negligence in continuing to manufacture and market the type 3 ladder without providing an anti-split device.
The trial court denied the motion, finding that since this was a product design case, Mr. Howland's testimony constituted relevant rebuttal evidence to the Spinos' claim that the alleged defect was common to all type 3 household ladders manufactured by Tilley. Moreover, the trial court noted that "a *291 sufficient proffer was made during the course of trial, in camera, to satisfy the Court of the reliability of Mr. Howland's testimony." (Trial Court Opinion dated 12/5/94, p. 13).[3] After an in camera review, the trial judge found that Tilley maintained a chronological log of reported claims covering Tilley's ladder products, including the type 3 ladder. The court was satisfied that the log was an authentic business record and was "comprehensive in its recording of all reports and claims of problems which the Company had received from any source."[4]Id. None of the log entries reported a leg split of a type 3 ladder.[5]
At trial, the parties presented conflicting expert testimony. The Spinos' expert maintained that a split in the ladder leg occurring at the time of the accident caused the injuries, and further, the ladder's design was defective in its failure to include an anti-split device of the type found on Tilley's commercial and construction ladders. Furthermore, their expert testified that the lack of the anti-split device in the design of Tilley's type 3 household ladder rendered the ladder unsafe for its intended use. In contrast, Tilley's expert witness testified that the type 3 household ladder was not defectively designed, and based upon his examination of the same ladder, the crack in the ladder leg had occurred at some time prior to the accident.
At the conclusion of a three-day trial before the Honorable John W. Herron, the jury returned a verdict in favor of Tilley, *292 finding there was no defect in the ladder which made it unsafe for its intended use. Following the verdict, the Spinos filed a Motion for Post-Trial Relief which the trial court denied. On appeal, the Superior Court affirmed, finding that Howland's "no prior claims" evidence was relevant as to the issue of causation and the trial judge properly admitted such testimony. Spino v. John S. Tilley Ladder Company, 448 Pa.Super. 327, 671 A.2d 726 (1996). This Court granted the Spinos' Petition for Allowance of Appeal limited to the issue of whether the trial court erroneously allowed Tilley to introduce the "no prior claims" evidence of leg splitting.
Instantly, the Spinos argue that admission of the no prior claims testimony improperly injected negligence issues of due care into a strict liability action, warranting the award of a new trial.[6] Further, they argue that this Court should adopt a per se rule whereby absence of prior claims evidence is inadmissible in § 402A actions. In opposition, Tilley argues the lack of prior claims evidence should not be per se inadmissible as it is relevant to rebut evidence of causation. Tilley maintains that Mr. Howland's testimony was offered solely to rebut the Spinos evidence as to causation and was admissible for that purpose.
Evidence of due care by a defendant is both irrelevant and inadmissible in a products liability case since a manufacturer may be strictly liable even if it used the utmost care. see Lewis v. Coffing Hoist Division, Duff-Norton Co., Inc., 515 Pa. 334, 528 A.2d 590 (1987)(industry standards and practices are inadmissible in strict liability actions because they improperly inject negligence principles); Majdic v. Cincinnati Machine Company, 370 Pa.Super. 611, 537 A.2d 334 (1988). However, while evidence can be found inadmissible for one purpose, it may be admissible for another. Bialek v. *293 Pittsburgh Brewing Company, 430 Pa. 176, 185, 242 A.2d 231, 235 (1968).[7]
It is well-established that the concept of strict liability allows a plaintiff to recover where a product in "a defective condition unreasonably dangerous to the consumer or user" causes harm to the plaintiff. § 402(A), Restatement (Second) of Torts; see also Webb v. Zern, 422 Pa. 424, 427, 220 A.2d 853, 854 (1966). Pennsylvania law requires that a plaintiff prove two elements in a product liability action: that the product was defective, and that the defect was a substantial factor in causing the injury. Berkebile v. Brantly, 462 Pa. 83, 337 A.2d 893 (1975). Specifically, in a design defect case, the question is whether the product should have been designed more safely. Dambacher by Dambacher v. Mallis, 336 Pa.Super. 22, 485 A.2d 408 (1984), appeal denied 508 Pa. 643, 500 A.2d 428 (1985).
In a plaintiff's case-in-chief in a product liability action, our appellate courts have analyzed the admissibility of prior accidents testimony and have found such evidence relevant and admissible. In DiFrancesco v. Excam, Inc., 434 Pa.Super. 173, 185, 642 A.2d 529, 535 (1994), appeal dismissed as improvidently granted 543 Pa. 627, 674 A.2d 214 (1996), the Superior Court determined that evidence concerning other accidents involving the instrumentality that causes the present harm is relevant to show the product was unsafe, to prove causation, and/or to show that a defendant had actual or constructive knowledge of a condition that could cause harm. However, while such evidence may be admissible, the other accidents must be sufficiently similar to plaintiff's accident. *294 Lynch v. McStome & Lincoln Plaza Assoc., 378 Pa.Super. 430, 548 A.2d 1276 (1988). Similarly, in Majdic, 370 Pa.Super. at 623, 537 A.2d at 340, the Superior Court affirmed the trial court's refusal to admit into evidence prior accidents involving the product at issue since plaintiff had failed to demonstrate that those accidents were sufficiently similar to plaintiff's accident. The Majdic Court further emphasized that the admission of such evidence is "tempered by judicial concern that the evidence may raise collateral issues which confuse both the real issue and the jury." Id. at 624, 537 A.2d at 340-41. In reaching that decision, the Superior Court noted that the admission of such evidence is vested within the sound discretion of the trial court. Id. (citing Whitman v. Riddell, 324 Pa.Super. 177, 180-182, 471 A.2d 521, 523 (1984)).
While our Court has yet to directly address the admissibility of evidence of prior claims in a defendant's case-in-chief in a product liability action, in Orlando v. Herco, Inc., 351 Pa.Super. 144, 505 A.2d 308 (1986), the Superior Court addressed a related evidentiary issue. In Orlando, plaintiff brought an action based upon breach of the implied warranty of merchantability, contending that he had become ill after consuming shrimp creole at the Hotel Hershey. The trial court allowed the hotel to present evidence that they received no other complaints from the twenty other guests who had consumed the shrimp creole that day. In affirming that decision, the Superior Court indicated that while it is not necessary to establish negligence in a breach of warranty claim, "it does not follow that evidence showing the absence of a defect is inadmissible merely because it tends to show that due care was exercised in the product's preparation or manufacture." Id. at 147, 505 A.2d at 309.
Courts of other jurisdictions have squarely considered the admissibility of no known prior claims testimony in defendant's case-in-chief, rendering decisions which we find instructive. In Espeaignnette v. Gene Tierney Company, Inc., 43 F.3d 1 (1st Cir.1994), a worker who was injured using a wood saw machine brought a strict liability action against the manufacturer. The district court not only denied the worker's *295 motion to exclude evidence of the absence of comparable accidents involving the wood saw, but permitted the president of the company to testify that the company received no reports of similar accidents. The Court of Appeals for the First Circuit affirmed, finding that evidence of the absence of prior accidents tends to disprove causation and is both probative and relevant as to whether the product as designed was unreasonably dangerous. Id. at 9. In that decision, the court stressed that such evidence would not be admitted unless the offering party first establishes that the lack of accidents was in regard to products substantially identical to the one at issue and used in a setting sufficiently similar to those surrounding the product at the time of the accident. Id. (citing Klonowski v. International Armament Corp., 17 F.3d 992, 996 (7th Cir.1994)).
Similarly, in Jones v. Pak-Mor Manufacturing Company, 145 Ariz. 121, 700 P.2d 819 (1985), the Arizona Supreme Court held that in a product liability case involving a defective design claim, evidence of the existence or non-existence of prior claims is admissible provided that the offering party establishes the necessary predicate for the evidence. In reaching that conclusion, the Arizona Supreme Court recognized that evidence of a lack of prior accidents is no more than evidence that plaintiff was the first to be injured, creating the considerable risk of misleading the jury. Id. at 127, 700 P.2d at 825. As such, a defendant must create a proper foundation before such evidence is admitted, including that if there had been prior accidents, the defendant would have known about them.[8] Accordingly, the Jones Court created a rule providing for the discretionary admission of such evidence in defective design cases. Moreover, the Jones rule promotes safety in that it provides manufacturers with an incentive to acquire, record and maintain information regarding the performance of their products. Id. at 128, 700 P.2d at 826.
*296 The thrust of Espeaignnette and Jones is that lack of prior claims evidence may be admitted in a design defect product liability action if relevant to a contested issue of causation. We believe that the same reasoning should be applied in Pennsylvania, and, therefore, we hold that evidence of the non-existence of prior claims is admissible subject to the trial court's determination that the offering party has provided a sufficient foundation that they would have known about the prior, substantially similar accidents involving the product at issue. Clearly, the determination of admissibility turns upon the facts and circumstances of the particular action. As such, the trial court must assess whether the offering party lays a proper foundation by establishing the accident occurred while others were using a product similar to that which caused plaintiff's injury. See e.g., Balsley v. Raymond Corporation, 232 Ill.App.3d 1028, 175 Ill. Dec. 493, 600 N.E.2d 424 (1992), appeal denied 147 Ill. 2d 625, 180 Ill. Dec. 147, 606 N.E.2d 1224 (1992)(defendant provided insufficient foundation regarding admission of lack of prior accidents since defendant's expert failed to provide testimony that the product at issue contained no variables and was used in substantially the same manner, and therefore, other machines were not used in substantially similar manner); Klonowski v. International Armament Corporation, 17 F.3d 992 (7th Cir.1994)(since manufacturer failed to lay the proper foundation that all of the shotguns it sold since 1980 employed a trigger mechanism substantially identical to the shotgun at issue, trial court properly refused to allow defendant's expert to testify as to the number of shotguns sold without report of injury).
Instantly, Tilley introduced Robert Howland's testimony to demonstrate that over 100,000 type 3 ladders have been put into the marketplace over the last one hundred years and there were no prior similar claims for this ladder model of which Tilley was aware. The trial court ruled the testimony admissible after it had conducted an in camera review of Tilley's claims log, finding the log both comprehensive and reflective of all reports, claims or problems involving its ladders. Having determined that Tilley maintained a reliable *297 product problem log, the trial court was convinced that the ladder contained no variables which would diminish the requirement of substantial similarity. As such, the trial court had a sufficient factual basis and did not abuse its discretion in admitting the testimony at issue.[9]
In ruling that Howland's testimony was admissible, the trial court recognized that the record does not reflect how President Howland knew that no prior claims had been made (but for his position as Company President), or how long the log was maintained. However, the trial court correctly suggested that the development of further information was the responsibility of the Spinos:
Certainly, plaintiffs' counsel was at liberty during Mr. Howland's video-taped trial deposition to have explored these matters or, later, to have examined defendant's proffered witness. Instead, all that plaintiffs' counsel offered to the Court by way of argument out of hearing to the jury . . . was that Howland's `no prior claims' testimony "fails to identify (i) failures that did occur that did not result in personal injury; and (ii) failures that did occur that resulted in injury not reported, i.e. not by way of suit or claim." The Court is of the view that such argument goes to the weight of evidence rather than the reliability of the Company's claims history record-keeping data.
(trial court opinion at p. 15). As the trial court noted, the Spinos' counsel did not pursue any cross-examination of Mr. Howland concerning the reliability of the Company's log. Again, the trial court noted since the Spinos "passed" on Tilley's proffer of a witness to elaborate on the log entries, they waived claiming the log was unreliable. Id. at 14-15 (citing Dilliplaine v. Lehigh Valley Trust Co., 457 Pa. 255, 322 A.2d 114 (1974)).
*298 This Court is fully cognizant of the danger of misleading a jury and the problems of prejudice in the inability of the opposing party to meet the evidence. However, there is little logic in allowing the admission of evidence of prior similar accidents but never admitting their absence. Clearly, had the Spinos discovered other accidents involving the type 3 household ladder, such evidence would be admissible subject to the trial court's discretion concerning similarity of both product and circumstances. DiFrancesco, supra, Lynch, supra, Majdic, supra.
In adopting a rule allowing lack of prior claims evidence subject to the trial court's discretion, we are careful to note that while evidence of the absence of prior claims is admissible as relevant to the issue of causation, the evidence does not dictate an absolute finding that the product is not defective or unreasonably dangerous. As the Superior Court cogently observed:
Once the trial court determines that such assertions are relevant and admissible, the evidence must, of course, still survive the test of its weight for there are ample aspects of such evidence upon which an able cross-examiner may feast. . . . the issue here addressed defies pronouncement of a per se principle since it remains for the trial judge in each case, as the offer of proof is considered, to weigh all of the attendant factors in an assessment of the relevancy and probative value of the proffered evidence.
Spino, 448 Pa.Super. at 349, 671 A.2d at 737. Opposing counsel can, and indeed should, soundly attack any prior claims testimony. We believe it is incumbent upon the party opposing the absence of prior claims testimony to attack such evidence through cross-examination, as well as request a cautionary or limiting instruction be provided.
As we find the trial court did not abuse its discretion in admitting Robert Howland's testimony concerning absence of prior claims, the Superior Court's decision is affirmed.
CAPPY, J., files a concurring opinion.
*299 CAPPY, Justice, concurring.
I join in the result arrived at by the majority today and in its opinion insofar as it states that evidence of lack of past claims may be introduced only if relevant to the contested issue of causation. See Majority op. at 1173. I disassociate myself from this opinion, however, insofar as it could be read for the proposition that such lack of past claims evidence could be admissible for the issue of whether the product was defective. See, e.g., Majority op. at 1174 ("[W]hile evidence on the absence of prior claims is admissible as relevant to the issue of causation, the evidence does not dictate an absolute finding that the product is not defective or unreasonably dangerous.")
NOTES
[1] Appellants do not dispute the fact that Francis Spino weighed 200 pounds at the time the ladder was purchased.
[2] Emergency room records note that Mrs. Spino lost her balance and fell four feet. Further, while still hospitalized, Mrs. Spino told her husband that she did not know how the accident happened.
[3] In footnote 8, the trial court emphasized it may have improperly focused on the veracity of the "no prior claims" evidence rather than the threshold evidentiary inquiry regarding reliability.
[4] In footnote 9 on page 13 of its opinion, the trial court recalled being impressed that Tilley's log was very extensive when viewed in its entirety. Further, the trial court indicated that the Spinos' counsel had the same opportunity to view the log and never expressed any objection or reservation that the log failed to accurately reflect all reports or claims received by Tilley.
[5] Additionally, the trial court found the Spinos "passed" on Tilley's proffer of a witness to elaborate on the log entries. As a result, the Spinos waived any objection they may have asserted regarding the reliability of the company log. Id. at p. 14-15, citing Dilliplaine v. Lehigh Valley Trust Co., 457 Pa. 255, 322 A.2d 114 (1974).
[6] The "[g]rant or refusal of a new trial will not be reversed in appeal, absent an abuse of discretionor error of law which controlled the outcome of the case." Gouse v. Cassel, 532 Pa. 197, 615 A.2d 331 (1992). Further, as with any question of law, this Court's scope of review is plenary. See Phillips v. A-Best Products Co., 542 Pa. 124, 130, 665 A.2d 1167, 1170 (1995).
[7] In Bialek, plaintiff sued a brewing company for injuries alleged to have resulted from a beer bottle exploding in plaintiff's hand. The company sought to introduce evidence of its bottling process to establish that when the bottle left its control it was not defective nor unreasonably dangerous. Because that evidence also tends to show due care, plaintiff objected and maintained that it was inadmissible and would mislead the jury into believing that the plaintiff must show negligence on the part of the brewing company. In finding the evidence admissible, we noted such evidence, while inadmissible for one purpose (to demonstrate due care), was still admissible to demonstrate a lack of defect or dangerous condition.
[8] The Jones Court noted that if the evidence is no more than testimony that no lawsuits have been filed, no claims have been made or that the defendant has never heard of any accidents, the trial judge should generally refuse such evidence since it has little probative value and has a high danger of prejudice. We agree with that assessment.
[9] It is important to emphasize that the prior claims evidence produced at trial was only one aspect of Tilley's evidence in this action. This evidence was admitted to establish the lack of a defect, yet, there were other defenses which were asserted at trial as well. Tilley's expert offered evidence that the split in the back of the ladder existed prior to Mrs. Spino's injury, and an anti-split device would not have prevented this event. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511187/ | 266 S.W.2d 696 (1954)
ALLEN
v.
KELSO et al.
No. 43480.
Supreme Court of Missouri, Division No. 1.
February 8, 1954.
Rehearing Denied April 12, 1954.
*697 Farrington & Curtis, E. C. Curtis, Springfield, Paul Brackley, Buffalo, for Allen.
Don W. Owensby, Theo. G. Scott, Buffalo, for Kelso.
COIL, Commissioner.
Ray E. Allen, plaintiff below, was the husband of Frata Kelso Allen. On September 17, 1949, Ray and Frata Allen conveyed real estate held by the entirety to defendants, who are Frata's brother and his wife. On the same day, defendants conveyed the property back to Frata Allen. On June 28, 1950, Frata Allen conveyed the property to defendants reserving a life estate.
On September 17, 1949, Ray and Frata Allen also held as tenants by the entirety cash in the sum of $4,629.89, in a joint checking account. On September 20, 1949, Frata Allen withdrew the total amount from the checking account and redeposited that sum in the same bank in a checking account in her individual name. On June 26, 1950, she withdrew the then balance ($3,989.29), admittedly a part of the money which had previously been in the joint account, and redeposited that amount in a joint tenancy account in the names of herself and defendant Guy Kelso. After the death of Frata Allen on July 8, 1950, defendant Guy Kelso received the amount of $3,262.73 remaining in the joint account.
Plaintiff sued to set aside the deeds and to recover a money judgment against defendant Guy Kelso in the amount of $3,989.29. *698 on the ground that on September 17, 1949, he was insane and lacked mental capacity to execute the deed or to contract. Plaintiff alternatively sought to be declared the owner of an undivided one-half interest in the real estate and a money judgment against Guy Kelso equal to one half of the $3,989.29 joint account on the ground that the conveyances by Frata Allen to defendants, or either of them, were made in contemplation of death and without consideration, and for the purpose of defrauding plaintiff of his marital rights.
Defendants contended below that plaintiff was not insane on September 17, 1949, and had sufficient mental capacity to convey the real estate; that his conveyance of said real estate was made pursuant to an agreement with his wife whereby they would separate and divide their joint property; by the terms of which agreement his wife was to receive the real estate and the money on deposit in the joint account, and she was to release to him her interest in a certain $5,000 joint note and in the family automobile.
The trial court made neither findings of fact nor conclusions of law. Its judgment was: "(1) On Count I, Plaintiff is decreed to be the owner of an undivided one-half interest in the real estate therein described; (2) on Count II, judgment for Defendant; (3) on Count III, Judgment for Plaintiff and against Defendant in the sum of $1981.28." (Count II, seeking recovery of certain personal property, is not presently involved.).
Both parties appealed. Plaintiff-respondent-appellant contends that the court erred in refusing to declare him to be the owner in fee simple of the real estate and in failing to enter judgment against defendant Guy Kelso for $3,989.29. Defendants-respondents-appellants contend that the trial court erred in granting plaintiff any relief.
It is apparent that, as a basis for the judgment entered, the trial court necessarily found that on September 17, 1949, plaintiff possessed sufficient mental capacity to have conveyed the real estate and to have in effect conveyed the money in the bank to his wife. We, therefore, first determine whether the trial chancellor's finding on this issue may be-sustained.
The Allens were married about 1922, had lived in Iowa until the summer of 1949 when they moved to the home near Buffalo, the real estate here involved. Plaintiff had for some years "carried on an affair" "with an Iowa woman and his wife knew of this. The testimony of defendant Guy Kelso was that, shortly after the Allens came to Missouri, plaintiff became dissatisfied and desired to return to Iowa without his wife and, on several occasions during the summer of 1949, expressed to Kelso a desire to deed to his wife the property in which they lived, either give to her or permit her to use the "entirety money" in the joint account, to take the joint note above mentioned and the automobile and return to Iowa without his wife, where, he told Kelso, he had some money and other property. Apparently Allen took no affirmative action to attempt to effectuate these desires until September 17, 1949.
The events of September 17 are disclosed by summaries of the testimony of plaintiff's witnesses Owensby and Hawkins, defendants' witness Butler, and of defendant Guy Kelso.
Don W. Owensby, one of the attorneys representing defendants in the instant case, testified that on September 17 plaintiff came to his office in a nervous and excited condition and talked to him about making a deed, transferring property, making a will, and a property settlement. As the witness began to inquire about those matters, he was informed that plaintiff's wife was down on the street in an automobile and unable to come upstairs. "He (plaintiff) certainly did not have it clear in his mind the manner in which he would effect his purpose. * * * he would keep asking me hypothetical questionsif I were a married man, and if a married man would make a will and then die, what would happen; if he had a property settlement and were to die, what would happen. So, in that manner, he didn't seem clear in his mind what he was trying to say. * * * he had an *699 impaired hearing, and it made it difficult to talk with him."
"Q. * * * did you advise him that you would not draw any (deeds or other instruments), that you thought it was best that he not write any at that time? A. Yes, sir."
Allen didn't tell him his troubles but he did mention a $5,000 note and a diamond ring which he was wearing, and said that he had an automobile. "As I recall, he seemed to have in his mind the way this thing should go; it was, generally, to leave the property to his wife, * * * I told him that he should go home and talk it over with his wife and decide what he wanted to do." He said he was going to Iowa after the settlement and it was witness' impression that his wife was not to return to Iowa with him.
"Q. Your opinion was that he was not in any mental condition on September 17th, 1949, to make any transactions involving real estate, was it not? A. Well, Mr. Curtis, I did not make it; I did not draw up any papers for him. I don't believe I can testify that in my opinion it was his mental condition that prevented that. The more I inquired about his property, as Attorney, in relationship with our clients, we can read and understand them, and I could understand that he was resenting my inquiries about his property and about what "he was trying to do, and there was just something there that I never was able to break down. But I don't believe I could truthfully say it was because of his mental condition. I did observe his nervousness, and that item was probably taken into consideration in my refusing."
Glen Hawkins, in the real estate business, testified that he sold the real property to plaintiff and his wife; on September 17, 1949, plaintiff came to his office in a nervous state, extremely excited, and very emotional; paced the floor, and wanted witness to draw a deed. Plaintiff's talk was not coherent enough for witness to determine what plaintiff wanted. "He wanted me to draw a deed for him, conveying the property, the sixteen acres that they had purchased, that he and his wife had purchased, to Frata Allen, his wife; then he decided he didn't want this deed drawn like that, and changed his mind; then he decided, before he left, that he did want to draw the deed, and changed his mind again, and left." The witness refused to draw any instrument for plaintiff. Plaintiff had always been a nervous man, and the witness understood that plaintiff and his wife were having some kind of trouble and knew that she was sitting out in the car and that she was crying. He was a friend of both and didn't want to get mixed up in their affairs. In witness' opinion, plaintiff wasn't capable of making a deed at that time. That's why he didn't draw it. The witness told defendant's counsel the other day that "I couldn't say for sure whether he (plaintiff) was crazy or whether he wasn't and I am not trying to say now."
J. C. Butler, 75 years of age, was in the insurance and loan business and did notary work. He testified that on September 17, defendants (Mr. and Mrs. Kelso) and Mr. and Mrs. Allen came to his office, and "they wanted me to write a deed; they said that he was going away, or something, I don't remember now exactly what it was, and he wanted me to write a deed from him to his wife." Mrs. Kelso (defendant) introduced the matter. They were all there and heard what was being said. Witness told them they should make a deed to some third party and let the third party deed it back to Mrs Allen. He took the Allens' acknowledgments. That was the only transaction he ever had with the Allens and he had never seen plaintiff before that day. Plaintiff seemed to be all right as far as witness could tell, but he didn't pay any particular attention. Not a thing occurred which led him to believe plaintiff was insane, although he had no discussion with plaintiff at that time. Nothing was said about a property settlement. Plaintiff walked around the office part of the time.
Guy Kelso testified that on September 17 he and his wife saw the Allens on the south side of the square; that plaintiff said:
*700 "`We have come to town, and I am deeding Frata the place, and I am going on to Iowa', and he said `I am deeding it so everything will be fixed up so I can get gone', and he told me the same thing as he did before, he said `I am deeding her the place, I am going to deed her the place; the money in the bank is hers, the furniture and everything is hers', and she asked him if he wanted any of that furniture and he said `No'; he said `She has got all up there that she needs.' * * *
"Q. Did he tell you whether or not he had seen various parties that day relative to getting the papers fixed up? A. Yes.
"Q. Who did he tell you he had seen? A. He said he went in to Hawkins', and they told him that they didn't care about doing that kind of business; he told me he had been up to Don Owensby, and he asked him a few questions, and he asked him what he owed him and that he said two dollars, and he said `By God, I wouldn't go back to him'; and he said `Where do you get your business done', and I said "Usually Ted Scott or Bud Butler, most of it Bud Butler', and he said `We will go down there, then.'
"Q. Did you go with him? A. Yes.
"Q. Who all went down to Bud Butler's? A. The four of us, Frata, my wife, and he and I."
Guy Kelso further testified that he didn't remember who told Mr. Butler that they wanted the deed, that Mrs. Kelso might have asked about it; that there was nothing about the conduct of the plaintiff to lead the witness to believe he was a person of unsound mind and insane. "He was just as normal as he could be * * * just like he had always been." He said that when plaintiff didn't "get his way" he would have a tantrum every once in a while and that he was nervous.
After the execution of the two deeds, the Allens went to defendants' home where they spent the night. The next day, the Allens went to their home for the purpose of permitting plaintiff to pack his personal belongings preparatory to returning to Iowa. Some time during the afternoon, plaintiff attempted suicide by hanging and nearly succeeded in taking his life. He was removed in an unconscious condition to a hospital where he remained four days. Upon plaintiff's release from the hospital, Guy Kelso drove him from the hospital to a cabin and placed it under a 24-hour guard. On September 23 (the next day), Guy Kelso filed an information alleging that Allen was insane. On September 29, plaintiff was adjudged to be insane and ordered committed to State Hospital No. 3 at Nevada where he stayed until July 3, 1950, when he was released on "parole"; he was discharged on December 20, 1951. (It is a fair inference from the evidence that the release on "parole" on July 3 was pursuant to Frata Allen's request (who had long suffered from severe arthritis and heart condition, and who then knew that she could not live long) to again see her husband and know that he was on his way to Iowa prior to her death.)
Plaintiff was not present at the trial and his whereabouts and status at trial time are not definitely established. One witness, who resided in Iowa, testified that "He (plaintiff) is at the insane asylum, I understand."
Dr. Paul L. Barone, superintendent of State Hospital No. 3, testified that plaintiff was admitted to that hospital on September 29, 1949, by order of the probate court of Dallas County. The doctor examined plaintiff the following day and diagnosed his condition as involutional psychosis melancholia, which he explained was a form of insanity which sometimes appears following "a change of life, which also happens in men." It was the doctor's opinion that, upon admission to the hospital, plaintiff was insane. He said that this type of insanity does not come on suddenly but usually is a gradual sort of thing. (Plaintiff's Exhibits 9 to 9E, inclusive, were mailed by the doctor to Mrs. Allen on September 29 in an attempt to obtain from her background information concerning the patient, and these exhibits, to which further *701 reference will be made, were returned to the hospital by mail some days later.)
Dr. Barone said that, based upon his observation and study of plaintiff at the hospital, and assuming the truth of the statements in Exhibits 9-9E, inclusive, as to the onset of plaintiff's mental illness, and assuming that on September 17 plaintiff went to a notary's office to discuss a business transaction and was highly nervous and excitable and unable to make himself clear and contradicted himself, and assuming that on the following day he attempted suicide, it was his opinion that plaintiff was "probably" or "assumably" mentally ill and of unsound mind on September 17. He further stated that involutional psychosis melancholia does not affect the memory of a person in its early stages and that it could be possible that plaintiff knew on September 17 the extent of his property, but that the plaintiff didn't remember things "when we got him"; and that it could be that plaintiff did realize what he was doing in his attempt to transfer the home and some money to his wife and return to Iowa; that plaintiff could have known of the property he owned, the members of his family, and what disposition he wanted to make of his property; but he also said he did not mean that he did know. The witness also testified that, making the assumptions theretofore made in the hypothetical question, and taking into account the matters inquired about by defendants' counsel, he did not believe plaintiff was of sound mind and able to exercise judgment in the disposition of his property on September 17.
It is fairly established by the evidence, we think, that questions appearing on plaintiff's Exhibits 9-9E were answered by Mrs. Allen, plaintiff's wife. Among the questions and answers appearing on those exhibits are these:
"Q. Does the patient complain of any pain or particular disease?" A. He has complained of noises in his ears always saying it sounded like a band playing since his nervous breakdown six years ago."
In answer to a question which referred in point of time to the period six years ago, "What were the symtoms? A. Nervous trouble, talking, walking the floor and crying. Q. Did the patient entirely recover from this previous mental illness? If not, describe the symptoms. A. Very nervous at times."
Under the heading "Social History", the following information appears: "Danger to self. Extreme nervousness two months ago, showed loss of interests, fears, visions, talkative, sad, suicidal idea, careless personal appearance. Memory failure, ate well but restless at night. Showed much interest in another woman (named Edna Johnston of Harvard, Iowa) and didn't seem to be able to decide between us as I have been a semi-invalid for the past two & half years and being of a kind disposition his conscience seemed to (o) great and I feel in his already weakened condition helped to lead up to the present state of conditions. Should this person come to the hospital (Edna Johnston of Harvard, Iowa) please do not admit, and should any letters come from said person please don't deliver them."
The only other bits of evidence which could be said to relate to the mental capacity of plaintiff on September 17 was the testimony of Dr. Claude Gammon, who had attended Mrs. Allen on one occasion, who testified that the fact that one endeavors to take his own life indicates a "mental disturbance" but that one attempting to hang himself one day could, on the day before, have known who his wife was, whether he had children, and the value of his property; and the testimony of a neighbor of plaintiff and his wife who said that plaintiff acted normal "most of the time."
In reviewing this case, we weigh the evidence, taking into consideration the trial chancellor's position to have judged the credibility of the witnesses who appeared before him. McElroy v. Mathews, Mo.Sup., 263 S.W.2d 1. Cancellation of a deed is the exercise of one of equity's most extraordinary powers and such power *702 should be exercised only where the evidence clearly justifies it. Tweed v. Timmons, Mo.Sup., 253 S.W.2d 176, 178[1, 2]. The burden of proof was upon plaintiff to prove by clear and convincing evidence that on September 17, 1949, he lacked mental capacity to understand the nature and effect of the act in which he was engaged. Schneider v. Johnson, 357 Mo. 245, 254, 207 S.W.2d 461, 466[4]; Farr v. Lineberger, Mo.Sup., 207 S.W.2d 455, 459[2-4]. Mental weakness is not enough to justify setting aside a deed or contract, but the proof must clearly show that plaintiff did not possess sufficient mind to understand, in a reasonable manner, the nature and effect of the act in which he was engaged. Weakley v. Weakley, 355 Mo. 882, 887, 198, S.W.2d 699, 702[1,2].
We have weighed the evidence in this case. In our view, the issue does not turn upon the credibility of witnesses. The undisputed events in their chronological order, admitted by Guy Kelso and undenied by Mrs. Kelso (who, significantly, did not testify) convinces us that plaintiff did not possess sufficient mentality on September 17 either to contract with his wife to give her the money in the joint account or to execute a deed in an attempt to carry out the terms of any oral agreement he may have made with her. The evidence showed that Mrs. Allen knew that her husband was mentally ill on September 17,1949, and that one of the symptoms of his mental illness was "loss of memory." In fact, we may fairly deduce from the evidence that Mrs. Allen was attempting to go along with whatever was necessary to satisfy the whims of her mentally ill husband in the hope that he might recover or be as happy as possible. In any event, the day following the execution of the deed, plaintiff attempted suicide. Both defendants knew of this attempt and both accompanied him to a Springfield hospital where he stayed four days; and Kelso immediately placed him in a cabin and kept him under 24-hour guard. On September 23, only six days after the deed was executed, Kelso alleged that plaintiff was insane, and six days later, the probate court so adjudged him and committed him to the state hospital where he was found to be insane and to "not remember things." The superintendent of the hospital was of the opinion that if plaintiff's mental illness had had its onset two months prior to the time he examined plaintiff, as Mrs. Allen said it had, plaintiff was of unsound mind and not capable of transacting business on September 17.
The only direct testimony that plaintiff was normal on September 17 was that of Guy Kelso who said that plaintiff was "normal", just like he always was. Subsequent events, however, demonstrated that Kelso's opinion was entitled to little weight, particularly in view of his own solemn allegation a few days later that plaintiff was insane and in view of the fact that plaintiff had spent four of those six days in the hospital recovering from physical injuries inflicted by a suicide attempt.
We take cognizance of the fact that plaintiff did not testify; and that Mrs. Kelso, who apparently did most of the talking at the time the deeds were executed, did not testify. Whether plaintiff was or was not wholly or partially incompetent to testify, we need not determine. If an unfavorable inference may be drawn from his absence and his counsel's failure to offer him as a witness, irrespective of his competency, we think any such unfavorable inference is overcome by the overall factual picture which so clearly appears in the record.
We are of the opinion that plaintiff sustained his necessary burden of proof and showed by clear and convincing evidence, that on September 17, 1949, he lacked mental capacity to contract; and this whether the contract be considered as one involving "bargaining" or as one of voluntary gift. It follows that plaintiff should be declared the owner in fee simple of the real estate.
It also follows that a money judgment should be entered in favor of plaintiff against Guy Kelso; for, if plaintiff lacked mental capacity to contract, he could not validly agree to transfer to or give his wife his interest in the money in the joint account, *703 admittedly held by the Allens as tenants by the entirety. Mrs. Allen could not, by changing the "entirety" account to one in her individual name and by subsequently depositing the money in a "joint tenancy" account in hers and her brother's names, destroy plaintiff's right to the money which accrued to him by operation of law upon Mrs. Allen's death.
In Ambruster v. Ambruster, 326 Mo. 51, 72, 31 S.W.2d 28, 37, 77 A.L.R. 782, this court said, in speaking of the nature of the relationship created by a bank account owned by husband and wife as tenants by the entirety: "Taking a common sense view of the matter, if a husband and wife have a joint bank account, either or the survivor to draw, and therefrom he buys a suit of clothes or an automobile, or she a dress or some jewelry, it would seem forced and unnatural to say the purchaser becomes a trustee for the other spouse as to a joint interest in the property. An accounting of the multitude of transactions that would arise in the family relation would be complicated indeed. The very fact that each is given the separate right to draw on the account would seem equivalent to a sort of standing permission to appropriate parts of the fund from time to time, especially considering the provision in the statute giving either party the right to terminate the drawing privilege by giving notice to the bank.
"On the other hand, the arrangement is loose and affords opportunity for injustice and overreaching. And logically, if the parties have a joint interest in the bank account, they ought to have a like interest in property in which the joint funds are investednothing further appearing. In our opinion the rule announced in the New York case, Moskowitz v. Marrow, 251 N.Y. 380, 167 N.E. 506 [66 A.L.R. 870], is correct and best fits the peculiar relation created by a banking arrangement of this character. That rule is, as we have stated, that the joint form of the account, either or the survivor to draw, of itself alone raises a presumption of fact, or inference, that the joint interest of the depositors follows funds withdrawn by either and negatives the idea that such withdrawals were severed from the joint estate and appropriated by the drawer to his own use. But the presumption is a weak one and readily yields to parol proof of the real intention of the parties. And while it makes a prima facie case for the party asserting the joint interest, the burden of proof is on him to establish his title by a preponderance of all the evidence."
Defendant, Guy Kelso, relied upon an agreement which he claimed to have made with his sister on June 26, 1950, as we understand, that he would care for and support her for the remainder of her life in exchange for instant real estate and the balance which might remain in her individual account; and that pursuant thereto her individual account was changed to a joint tenancy account in the names of Mrs. Allen and Guy Kelso. It seems clear that this evidence in no way affects or overcomes the "presumption" which negatived "the idea that such withdrawals were severed from the joint estate and appropriated by the drawer to his own use." This evidence had nothing to do with, and did not tend to show, any consent by plaintiff to the appropriation of the "entirety" money to his wife's individual use. The essential fact is that plaintiff never did validly consent that his interest in the "entirety" money be extinguished. See: Feltz v. Pavlik, Mo. App., 257 S.W.2d 214.
As to the amount of the money judgment. The record shows that on September 20, 1949, when Mrs. Allen transferred the money in the "entirety" account to an account in her individual name, the amount transferred was $4,629.89; that on June 26, 1950, when her individual account was changed to a joint tenancy account in the names of Mrs. Allen and Guy Kelso, the amount on deposit was $3,989.29; that on July 8, 1950, the date of Mrs. Allen's death, the amount in the account was $3,262.73, and that Kelso received that amount. Plaintiff does not claim that he is entitled to and does not seek a judgment including the amounts withdrawn by Mrs. Allen prior to her death and used for her living expenses.
*704 There is no showing as to who withdrew the sum of $726.56, the amount withdrawn after the account became a joint tenancy account of Mrs. Allen and Kelso, or for what purpose that money was used. We, therefore, assume that this amount was withdrawn for Mrs. Allen's use and benefit. Accordingly, the money judgment in favor of plaintiff against defendant Guy Kelso should be in the sum of $3,262.73 with interest thereon at 6% per annum from July 8, 1950.
The judgment is reversed and the cause is remanded with directions to enter judgments in accordance with this opinion.
VAN OSDOL and LOZIER, C., concur.
PER CURIAM.
The foregoing opinion by COIL, C., is adopted as the opinion of the court.
All concur.
On Motion for Rehearing.
PER CURIAM.
In the motion for rehearing the question of the sanity of plaintiff has been raised. There were no suggestions of insanity made at the trial. This case has resulted in the plaintiff receiving all the relief he sought or which it was possible for him to receive. As in the case of an infant appearing by attorney, when a plaintiff is "blest by success" in maintaining his cause, the matter is on a different basis from a situation in which the result is adverse. See, Reineman v. Larkin, 222 Mo. 156, 121 S.W. 307. In an action by an insane person such a favorable judgment is not void. See, 44 C.J.S., Insane Persons, § 141, p. 303, § 151, p. 325; see also, 28 Am.Jur. 735, Sec. 103. If plaintiff now needs protection by representation or guardianship, there is ample judicial and statutory authority for providing such protection.
The motion for rehearing is overruled. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511196/ | 266 S.W.2d 564 (1954)
LANSFORD
v.
SOUTHWEST LIME CO.
No. 43721.
Supreme Court of Missouri, Division No. 1.
April 12, 1954.
*565 Roy Coyne, John R. Martin, Joplin, for appellant.
Herbert Van Fleet, Joplin, Seiler, Blanchard & Van Fleet, Joplin, of counsel, for respondent.
VAN OSDOL, Commissioner.
This is an appeal from a judgment upon verdict for plaintiff for $15,000 for the wrongful death of plaintiff's husband who was fatally injured when a truck he was driving collided with defendant's tractor-trailer.
Plaintiff-respondent has filed a motion to dismiss the appeal because of asserted failure to comply with 42 V.A.M.S. Rules of Supreme Court, rule 1.08(a). We have examined defendant-appellant's brief and plaintiff-respondent's motion. Two of defendant-appellant's four points are not developed in its brief by the citation of authorities and argument. They are deemed *566 abandoned. Merrick v. Bridgeways, Inc., 362 Mo. 476, 241 S.W.2d 1015; Crampton v. Osborn, 356 Mo. 125, 201 S.W.2d 336, 172 A.L.R. 344. The two other points and assignments of error therein stated are sufficiently developed to merit review. The motion to dismiss the appeal is overruled.
Defendant-appellant contends the testimony of plaintiff's witness, who stated his observations of the movement of defendant's tractor-trailer prior to and at the time of the collision, was unbelievable, contrary to the shown physical facts and inherently impossible, and hence afforded no substantial evidentiary basis for plaintiff's recovery. Defendant-appellant further contends that plaintiff's principal verdict-directing instruction (No. P-1) was erroneous in that the instruction "did not properly eliminate" contributory negligence of plaintiff's decedent; and that the instruction assumed and did not require the jury to find the facts necessary to plaintiff's recovery "from the evidence."
The fatal collision occurred on U. S. Highway No. 71 near the east end of an overpass or bridge over the tracks of the Missouri Pacific Railroad at a point about two miles north of Jasper. Approaching from the north, the highway, paved with concrete twenty feet wide, makes a wide sweeping turn in a southeasterly direction and goes slightly upgrade as it approaches the west end of the bridge. The highway then crosses the bridge in an approximate west-east direction. The bridge is about one hundred fifty feet long. It has concrete railings and is paved with concrete twenty feet in width. Beyond the east end of the bridge, the grade declines and the highway curves back more southwardly. Metallic rails, five or six feet from the edges of the pavement, guard the approaches to the east and west ends of the bridge.
Plaintiff's husband had been driving northwardly in a truck belonging to his employer, Smith Brothers Manufacturing Company. The tractor-trailer belonging to defendant Southwest Lime Company was being driven southwardly by defendant's employee.
One Rusco, witness for plaintiff, testified he had been driving southwardly following defendant's tractor-trailer for two or three miles in approaching the place where the collision occurred. It was misting rain. The pavement was slick. The left dual wheels of the tractor-trailer were consistently some two or three feet over in the left (northbound) lane of the pavement. The tractor-trailer was moving about fifty miles per hour. As the tractor-trailer moved up the west approach and on to the bridge, its left wheels "were in the wrong lane. * * * Every bit of two feet over the line." The witness next saw the Smith truck (described as a "bobtail" truck) "in mid-air." The truck "was sideways." It was "on its right side" of the pavement. The left wheels of defendant's tractor-trailer were still in the wrong, lane.
The Smith truck came to rest headed northwardly, its front end protruding over the north guard rail at a point eighteen feet east of the east end of the bridge. It was tilted or partially overturned to its right. The rear end was resting on the right dual wheel and the front rested on the guard rail. Photographs indicate the left front of the Smith truck was badly damaged.
The witness Rusco parked his car near the west end of the bridge and walked eastwardly across the bridge to the scene of the collision. He saw plaintiff's decedent on the pavement "beside (west of) the left rear duals (of the Smith truck)."' He did not talk to defendant's driver, nor did he talk to another truck driver who had arrived there very soon after the vehicles collided. He saw no smoke or fire. He observed debris "on the north of the center line in the north-bound lane of traffic." He wasn't there over ten minutes at the most. He drove on to Carthage and reported the accident to the employer of plaintiff's decedent.
*567 The driver of the tractor-trailer, witness for defendant, testified defendant's combination unit had the gross weight of thirty-seven thousand pounds. The witness said he was driving the unit on his right side of the pavement in approaching and moving over the bridge, and at a speed of about forty miles per hour. He saw the Smith truck "clearing the curve at the bottom from the east * * * he (the Smith truck) was more or less in the middle of the road." It was "going around fifty." Plaintiff's decedent was "trying to get his truck on the other (his own right) side of the road." The witness drove the tractor-trailer on across the bridge and pulled off on the right (south) shoulder in attempting to avoid a collision, the right wheels passing over onto the shoulder twelve, fifteen or eighteen feet east of the bridge. He said the collision occurred thirty-five or forty feet east of the bridge" It could be a little less." When the vehicles collided, the right side of the tractor-trailer "was dragging along the guard rail at the south edge of the bridge."
The tractor-trailer came to rest to some degree tilted over to its right on the outer edge of the shoulder on the south side of the pavement approximately two hundred twenty feet east of the east end of the bridge. The left end of the front bumper of the tractor-trailer was bent backwardly; the front spring and brake hose were sheared; the "arm off the steering section" was damaged; the left headlight and the left front fender were crumpled back or destroyed; and the left running board and the fuel tank on the left were torn off.
Defendant's driver further testified that gasoline from the fuel tank "sprayed" the side of the trailer and ignited, and a lot of gasoline burned "right there in the road." (Other witnesses for defendant testified of observing fire and smoke.) The witness, and other witnesses for defendant, testified that plaintiff's decedent was lying on the shoulder of the highway east of the Smith truck.
Photographs show tracks of the right wheels of the tractor-trailer along and close to the south guard rail on the east approach; and at one point, perhaps a hundred feet east of the east end of the bridge, the tractor-trailer apparently had passed closer to and scraped or pressed against the guard rail crowding it a foot or so (southwardly) out of alignment.
Defendant-appellant argues the testimony of plaintiff's witness Rusco was unbelievable. Defendant urges the conduct of the witness in making no inquiry and in making no offer of assistance was not that of a person who had just witnessed an accident and who was among the first to arrive at the scene. Defendant further reminds us that none of defendant's witnesses testified as having seen Rusco, and that several of defendant's witnesses expressly denied having seen him there at the time where and when he said he was. Defendant points out that Rusco testified of having observed no fire or smoke, and that he had said plaintiff's decedent was lying on the concrete pavement to the left or west of the Smith truck, whereas defendant's witnesses testified plaintiff's decedent was lying on the earthen shoulder partially under the right side of the Smith truck. Defendant further calls our attention to the facts that the record shows the trial court had theretofore sustained one motion (filed by defendant) for a new trial of this case on the specified ground the verdict was against the weight of the evidence, and that the trial judge (in his statement upon overruling defendant's instant motion for a new trial) said the statute "specifically provides that not more than one new trial may be granted on account of the verdict being against the weight of the evidence, so I feel I have no recourse except overruling the motion." See Section 510.330 RSMo 1949, V.A.M.S.; McFarland v. United States Mutual Accident Ass'n, 124 Mo. 204, 27 S.W. 436. Defendant also argues that it was physically impossible for the tractor-trailer to have thrown the front end of the Smith truck eight feet above the elevation of the pavement, as Rusco testified.
Defendant's driver testified that the tractor-trailer was of the gross weight *568 of thirty-seven thousand pounds. It is certainly not unreasonable to suppose it was possible that the force of the collision of the heavy combination unit with the Smith truck of lesser weight operated upon and raised the front end of the Smith truck as the witness Rusco said. It has been remarked that so frequently do unlooked-for results attend the meeting of interacting forces that courts should not indulge in arbitrary deductions from physical law and fact except when they appear to be so clear and irrefutable that no room is left for the entertainment, by reasonable minds, of any other. 10 R.C.L. 1009; Higgins v. Terminal R. R. Ass'n of St. Louis, 362 Mo. 264, 241 S.W.2d 380; Steffen v. Ritter, Mo. Sup., 214 S.W.2d 28; Settle v. Baldwin, 355 Mo. 336, 196 S.W.2d 299, and cases therein cited.
It is not contended the testimony of the witness Rusco, if believed and considered in connection with the circumstances otherwise shown in evidence, was not substantial evidence of defendant's negligence as submitted. We cannot say the testimony of the witness was contrary to the physical facts or inherently impossible, or that the inferences deducible from his testimony were so opposed to reasonable probability as to be manifestly false. Contrast Roseman v. United Rys. Co. of St. Louis, Mo.App., 251 S.W. 104, cited by defendant-appellant. We think we should not say it would have been the more natural, in the situation, for Rusco to have attempted to render assistance there at the scene than to have driven on to Carthage, as he said he did, to notify deceased's employer. Certainly such testimony of Rusco as to his stated conduct, and other asserted inaccuracies in his testimony to not compel a conclusion that he never even saw the collision, as defendant-appellant urges. In this connection, Rusco's testimony that he notified decedent's employer at Carthage (within about thirty minutes after the accident occurred) was corroborated by two witnesses. And we think the asserted failure of the witness to observe or to accurately state what he had observed, and his other testimony more positive in character and the probability or improbability of its verity in the circumstances and as compared or contrasted with the testimony of other witnesses, were matters for the jury whose province it was to judge the credibility of the witnesses and to weigh, and evaluate their testimony. When factual issues, supported by substantial evidence, are submitted to the jury and correct instructions are given advising the jury of the facts essential to their verdict, it is not the function of an appellate court to disagree with the jury's views as to what are the true facts. Higgins v. Terminal R. R. Ass'n of St. Louis, supra, and cases therein cited; Wilcox v. Coons, 362 Mo. 381, 241 S.W.2d 907. This brings us to a consideration of defendant-appellant's contention of errors in instructing the jury.
Plaintiff's principal verdict-directing instruction (No. P-1) was as follows,
"The court instructs the jury that if you find and believe from the evidence in this case that * * * plaintiff was the wife of Edwin G. Lansford; and if you further find that * * * Lansford was driving a Chevrolet truck belonging to his employer in a northerly direction along U. S. Highway 71 near Jasper * * *, and approaching an overpass over the Missouri Pacific Railroad tracks, and was at all times herein mentioned exercising the highest degree of care for his own safety; and if you further find and believe that at said time and place the defendant, through its admitted agent and servant * * * was driving a tractor with semi-trailer attached in a southeasterly direction along the same highway, was approaching the said truck being driven by * * * Lansford, and was crossing and coming off of, or was off of, said overpass; and if you further find and believe that as the two trucks approached each other and met the defendant's driver failed to keep his truck as close to its right hand side of the highway as practicable but operated the same so that a portion of it was to its left of the center line of the highway, *569 and if you find and believe that defendant's driver was so driving his truck that a portion of it was to the left of the center line of the highway and in meeting another truck driven by the said Lansford coming from the opposite direction along the same highway failed to turn his truck to its right of the center line of the highway so that the two vehicles could pass without danger of collision; and if you further find and believe that defendant's agent and servant operated defendant's truck in the respects set forth immediately above, and that in so doing said driver failed to exercise the highest degree of care in the operation of defendant's truck and was thereby negligent, and that as a direct result of such negligence, if you find he was negligent, the two trucks collided on * * * Lansford's right side of the highway and the said Lansford as a direct result thereof suffered injuries which brought about his death and that the plaintiff was damaged by reason of the death of the said Edwin G. Lansford; then you are instructed that your verdict in this case will be in favor of the plaintiff * * *."
Having read the instruction and other instructions given by the trial court, we believe defendant-appellant's contention that Instruction No. P-1 did not properly "eliminate" the contributory negligence of plaintiff's decedent is without merit. As we understand defendant-appellant's contention, it is that the instruction was so framed as to "exclude" or "eliminate," or to "preclude" the jury from a consideration of the evidence tending to support the affirmative defense of contributory negligence, and consequently the jury was not properly advised upon that issue. The jury, however, were required by the instruction to find that plaintiff's decedent "was at all times herein mentioned exercising the highest degree of care." And, at defendant's request, the trial court gave Instruction No. D-4 directing a verdict for defendant upon a finding of contributory negligence specifically as therein hypothesized. See and compare Edwards v. Woods, 342 Mo. 1097, 119 S.W.2d 359. A principle has been stated that, if a plaintiff's instruction authorizing a verdict for plaintiff submits the elements necessary to plaintiff's recovery, and defendant's instructions authorizing a verdict for defendant submit the defenses pleaded, the plaintiff's instruction cannot be condemned as erroneous in not submitting those defenses. Perry v. Missouri-Kansas-Texas R. Co., 340 Mo. 1052, 104 S.W.2d 332, and cases therein cited; Edwards v. Woods, supra; Merrick v. Bridgeways, Inc., supra.
Instruction No. P-1 discloses submission in the first clause of the instruction as follows, "that if you find and believe from the evidence in this case" that plaintiff was the wife of her decedent. In subsequent clauses the instruction said, "and if you further find and believe," and the phrase "from the evidence" was omitted. Of course, controverted essential facts should not be assumed in an instruction, nor should a jury be permitted to find an essential fact other than from the evidence introduced in the trial of the case. Now Instruction No. P-1 did not assume the facts. On the contrary, it required the jury to find the facts hypothesized. Compare Lewis v. Illinois Cent. R. Co., Mo. Sup., 50 S.W.2d 122. But, since the instruction was somewhat unnecessarily interspersed with the language, "and if you further find and believe", see Cruce v. Gulf, Mobile & Ohio R. Co., 361 Mo. 1138, 238 S.W.2d 674, it might have been better in each instance to have added the phrase "from the evidence." However considering the requirement of the first clause that the jury's finding of the fact submitted in that clause should be "from the evidence" together with the quoted language of the other clauses, we are of the opinion the instruction could not have misled the jury to defendant's prejudice; that is, we believe a jury composed of ordinarily intelligent laymen would understand, when all of the instruction, including the first clause, was read to or by them, that the *570 trial court was submitting all the facts hypothesized in the instruction for the jury's finding from the evidence.
The judgment should be affirmed.
It is so ordered.
LOZIER and COIL, CC., concur.
PER CURIAM.
The foregoing opinion by VAN OSDOL, C., is adopted as the opinion of the court.
All of the Judges concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511206/ | 266 S.W.2d 638 (1954)
BRESHEARS et al.
v.
MYERS.
No. 43532.
Supreme Court of Missouri, Division No. 1.
April 12, 1954.
George H. Miller, Royal M. Miller, Sedalia, F. M. Brady, Warsaw, for appellants.
John T. Martin, Sedalia, Martin & Gibson, Sedalia, of counsel, for respondent.
HYDE, Presiding Judge.
Plaintiff, Ada Breshears, sued for $25,000 for personal injuries, and plaintiff, Larry Breshears (her husband), sued for $5,000 medical and hospital bills, loss of services, etc. Verdict and judgment was for defendant and plaintiffs have appealed.
Mrs. Breshears, hereinafter referred to as plaintiff, was injured when the Ford she was driving was struck by defendant's Packard. The case was submitted on primary negligence and the defense was contributory negligence. Plaintiff alleges as error the refusal of instruction Pl, submitting the case on humanitarian negligence, based on defendant's ability to stop his car after plaintiff's peril arose; and in admitting in evidence a statement from a book as to the distance required to stop a car going 60 miles per hour. The decisive question is whether or not plaintiff made a submissible humanitarian negligence case.
The collision took place in front of the Dell Service Station on U. S. Highway 65 about six miles south of Warsaw. The highway runs in a general north and south direction and the station is on the east side near the top of a hill with a 5% grade. The *639 pavement was 20 feet wide and, in the center of the west half of the slab, there was a yellow line going up the hill that ended seven feet north of the center line of the main station building. The actual crest of the hill was 149 feet south of the center line of this building. The station pumps, in front of this building, were 41 feet from the east edge of the pavement; and the area, between the pumps and the pavement, was covered with gravel, which also extended to the north and south making a driveway and parking place.
Plaintiff lived near the station, was familiar with the place and had been there many times. Driving home from Warsaw, she decided to stop there to buy a loaf of bread. She slowed the Ford to about 10 miles per hour and made a left turn across the highway, starting her turn about 15 feet north of the south end of the yellow line (171 feet north of the crest of the hill). She said it was neither a long turn nor an abrupt one but somewhere in between. She said it was at an angle between 45 and 90 degrees. She also said that before turning she looked in front and in her rear view mirror and saw nothing on the highway. She looked only toward the station after making the turn. Plaintiff had no recollection of putting on the brakes and did not know whether her speed slowed in crossing the highway but when it left the highway it was "in very slow motion, ready to stop." Just after the Ford left the highway (rear wheels four to six feet off the pavement), and either stopped or in slow motion, it was struck by defendant's car. Plaintiff at no time saw defendant's car and was not aware of its approach. The front of the Packard struck the Ford at about the right front tire and knocked it back to the west side of the pavement. The Packard went sideways to the north of the station, stopping with its rear wheels 10 to 14 feet east of the pavement. The Packard left tire marks on the pavement for 145 feet. These tire marks took a gradual course to the right. The marks of the right wheels left the pavement 74 feet south of the center line of the station building and the marks of the left wheels left it 25 feet to the south. The collision was in front of the station building. Plaintiff estimated the Ford went about 35 feet from the place where she started making the turn to the point where it was struck.
Defendant said he was driving between 65 and 70 miles per hour and that when he first saw the Ford it was several hundred feet away, on the west side of the road, moving normally south and giving no indication of making a turn, but that when it was about 175 to 200 feet from him he saw the front wheels start turning across the highway. He said he immediately applied his brakes and pulled "slightly to the right and away from this car", hoping the occupants of the car would see him "and pull back to their side of the highway"; but that the Ford continued across the highway in front of him without changing course or slackening speed. Plaintiff had the evidence of a surveyor that from the point where she started the turn it was possible to see (with her eyes 4'3× above the pavement) only the top of a Packard (5'6× above the pavement) when it was 450 feet south. Beyond that point the dip in the road, south of the crest of the hill, prevented it from being seen at all. At 400 feet, the top foot and a half of the Packard would be showing. At 300 feet it could be seen "from the bumper on up" and at 250 feet there was "full vision of the car." Plaintiff also had evidence of tests in stopping a Packard of the same model as defendant's, at 60 miles per hour, showing that it was stopped in 115 feet from the time the brakes were applied, reaction time not included.
Plaintiff's theory of humanitarian negligence is as follows: "The average speed of plaintiff's automobile was about five miles per hour (from ten miles per hour to a stop or near stop), while traveling the 35 feet from where she started to turn to the point of impact. It would have taken her 4.79 seconds to travel the 35 feet at an average speed of five miles per hour. Defendant testified that he was driving 65 or 70 miles per hour as he approached the scene of the accident. At this rate of speed, defendant's automobile would have traveled 94.9 feet to 102.2 feet per second. This would have placed defendant's automobile back down *640 the road some 454 to 489 feet when Mrs. Breshears started to make her turn. Thus, by simple mathematical calculations the jury could have found that when the front wheels of plaintiff's automobile were over the center line of the pavement, defendant was over 400 feet south." However, defendant says: "At a speed of 10 miles per hour her automobile was moving 14.67 feet per second, and at such speed it would have travelled 35 feet in about 21/3 seconds. Assuming defendant's automobile approached the point of collision at a speed of 70 miles per hour or 102.69 feet per second, such automobile would have been 239.61 feet distant from plaintiff's automobile at the time her turn was commenced. In the ¾ of a second to be allowed for reaction time (Vietmeier v. Voss, Mo.Sup., 246 S.W.2d 785), defendant's automobile would have closed the distance by 77 feet, leaving an intervening distance of 162 feet."
Perhaps defendant's estimate is too long and the true time was somewhere between these two estimates. There are two weaknesses in plaintiff's contention. In the first place, plaintiff's estimate of time is speculative. See East v. McMenamy, Mo.Sup., 266 S.W.2d 728. Likewise the estimated distance of 35 feet (in a position of imminent peril) is very uncertain. But the really fatal weakness in plaintiff's case is that there was no evidence of stopping distance at the speed defendant was actually going. Plaintiff's evidence only showed stopping distance at 60 miles per hour. All the evidence showed that defendant was going faster than that. Plaintiff's own evidence showed tire marks beginning 145 feet from the place of the impact (when plaintiff's evidence was that application of the brakes for 115 feet would bring about a complete stop at 60 miles per hour) with enough momentum remaining to knock the Ford all the way across the highway. (The patrolman's testimony, defendant's witness, is consistent with this because he said he measured marks of 120 feet and it was shown the longest marks went off the pavement 25 feet from the station.) Thus plaintiff's own evidence showed a greater speed than 60 miles per hour. It is well known and must be recognized that increased speed greatly extends possible stopping distance. In Branscum v. Glaser, Mo.Sup., 234 S.W.2d 626, 628, we held no humanitarian negligence case was made where there was no evidence to show stopping distance at the speed the defendant's truck was actually going. There the plaintiff had no evidence as to the speed of the truck. (Also in the Branscum case there was no evidence as to the relative position of the vehicles.) Here there was evidence of the speed of defendant's car (defendant's testimony) but no evidence of stopping distance at that speed or at any speed indicated by the physical facts. Therefore, we cannot hold that the Court erred in refusing to submit the case on humanitarian negligence.
It is true that plaintiff's refused humanitarian instruction hypothesized in the conjunctive defendant's ability "to have stopped his car and to slacken the speed thereof and stay on the pavement." Of course, defendant did slacken speed (the instruction so stated) and also changed the course of his car to the right. As the situation developed it probably would have been better if he had changed its course to the left. However, as we said in Vietmeier v. Voss, Mo.Sup., 246 S.W.2d, loc. cit. 789, where it was contended that the defendant therein who attempted to avoid the plaintiff by swerving, should have sounded his horn: "Inasmuch as in the available time it was possible to do only one of the two things, and defendant did do one of those two things, it was not negligence for defendant not to have done the other thing." What defendant was trying to do was to stop and ability to stop was the real issue submitted by the instruction. The evidence was insufficient on that issue. We hold there was no error in refusing to give this instruction.
The admission in evidence of a statement from a chart in a book prepared by the State Highway Department as to stopping distance at 60 miles per hour (read by the patrolman) was improper as hearsay and defendant concedes this. However, under the circumstances of this case, we agree with defendant that this was not reversible *641 error, requiring remand for a new trial, especially in view of our ruling that plaintiff did not make a jury case on humanitarian negligence. The stopping distance at 60 miles per hour as shown by the chart was greater than that shown by plaintiff's tests. The patrolman (defendant's witness) who read this from the chart also said his experience showed that actual stopping distances were less than shown on the chart; and that "this chart is prepared as a minimum for safe driving." This evidence was material only on the issue of defendant's negligence and the jury found that defendant was negligent, specifically so stating in their verdict which was as follows: "We 10 members of the jury find in favor of the Defendant. Both were negligent." Furthermore, all the evidence indicates that defendant's car must have been in plain view when plaintiff made the left turn and this is conclusive evidence that plaintiff looked ahead negligently. Branscum v. Glaser, supra. We hold the admission of this evidence was not prejudicial error.
The judgment is affirmed.
All concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511208/ | 88 F.2d 952 (1937)
JOHNSON
v.
COMMISSIONER OF INTERNAL REVENUE (two cases).
Nos. 10704, 10705.
Circuit Court of Appeals, Eighth Circuit.
March 31, 1937.
*953 Justin D. Bowersock, of Kansas City, Mo. (Robert B. Fizzell and John F. Rhodes, both of Kansas City, Mo., on the brief), for petitioner.
Louise Foster, Sp. Asst. to Atty. Gen. (Robert H. Jackson, Asst. Atty. Gen., and Sewall Key and Norman D. Keller, Sp. Assts. to Atty. Gen., on the brief), for respondent.
Before STONE, SANBORN, and VAN VALKENBURGH, Circuit Judges.
SANBORN, Circuit Judge.
These are petitions to review an order of the Board of Tax Appeals redetermining deficiencies in the income taxes of W. D. Johnson for the years 1927, 1928, and 1929, which petitions have been consolidated. In determining these deficiencies, it was held that the taxpayer, in calculating the amount of his income, was not entitled to deduct, as taxable to his wife, who filed a separate return, one-half of the total income received by him from certain property which he designated in his returns as "community property."
The taxpayer, W. D. Johnson, married his wife in Texas in 1886. He then owned an interest in a mercantile business, which interest had a value of about $2,000 or $3,000. His wife had no property. They resided in Texas until 1899, where the taxpayer engaged in the mercantile business, in the cattle business, in banking, and in lending money on cattle. He removed from Texas to Missouri in 1899, where he has since resided, with the exception of about a year spent in California. The property possessed by him when he became a resident of Missouri consisted of cattle, ranches, notes and interests in the mercantile and banking enterprises, all acquired while he lived in Texas.
In 1902 the taxpayer and three others purchased 126,000 acres of Texas land at $2 an acre. They made an initial cash payment of $30,000 and gave notes for the balance, secured by a mortgage on the land. Long before 1927 this land was sold for $756,000, and the notes were paid from the proceeds of the sale.
In 1913 the taxpayer and R. M. Clayton purchased 30,720 acres of Texas land, giving cash and notes for the purchase price, and taking a deed to R. M. Clayton and the taxpayer. As partners they operated this tract as a ranch until January 1, 1928, when R. M. Clayton sold his interest in the cattle and leased his interest in the land to his son, A. M. Clayton, who then became the taxpayer's partner in the ranch operations.
Since 1914 the taxpayer and A. M. Clayton, as partners, have been operating another ranch in Texas known as the Forty-Nine Ranch. That land was also purchased with cash and notes, and was deeded to A. M. Clayton and the taxpayer.
Prior to 1928 the taxpayer and his son, as partners, operated a ranch in Texas. For about seven or eight years they owned the ranch jointly, but in 1928 the taxpayer deeded his interest to his son, retaining a half interest in the oil and minerals.
*954 During the taxable years in question, the taxpayer owned other lands in Texas and elsewhere, parts of which were used for ranching purposes. Two of these other ranches were operated during 1927, 1928, and 1929 by a Mr. Finley and a Mr. Goedeke. Prior to 1928 both Finley and Goedeke worked on a salary and profit-sharing basis; the taxpayer furnishing the cash for purchasing cattle, and Finley and Goedeke giving him notes to cover the cost. Subsequent to 1928, Finley worked on a salary basis only.
The taxpayer operated a loan company in Kansas City, Mo., known as the Western Cattle Loan Company. At different times he acted as a director of three Kansas City banks.
The taxpayer's first set of books was opened in 1908. A trial balance taken at that time showed a capital of $876,389.30 as of February 1, 1908. Since that time, as before, his extensive real estate and ranching ventures as well as his banking and money lending required the investment and reinvestment of capital. He testified that: "This capital came from the funds, nucleus or the capital we had when we came from Texas. It all grew from that source. * * * My part of the capital employed in the cattle loan business came out of my resources derived from the capital I had when I left Texas and the accumulation by use of that capital and use of my personal efforts coupled with my personal efforts since coming from Texas."
The taxpayer's books list assets of a book value of $2,123,053.53 at the end of 1927, $1,700,810.89 at the end of 1928, and $1,908,310.17 at the end of 1929. All of these assets were acquired after he moved to Missouri. The assets owned by him and his wife when they left Texas had been liquidated prior to 1927 and the proceeds invested and reinvested.
On direct examination, the taxpayer testified: "I may have borrowed money from time to time, and probably did. I had good credit, due to my showing." On recross-examination he testified that: "Some of those investments might have been made out of money that I borrowed at the bank and later paid."
As to his income from personal services the taxpayer testified: "I took compensation for some services rendered to the Western Cattle Loan Company and to the bank, but that was only where there were corporations. Nothing was deducted out of my own assets for services rendered." From 1916 to 1928 he earned salaries of $91,504.42.
The taxpayer and his wife filed joint returns for the years up to and including 1926. For the years 1927, 1928, and 1929 they filed separate returns. In his separate returns for those years the taxpayer reported as income taxable to him one-half of the amount of income received by him from "community property." In 1927 and 1928, income from community property, as shown by his returns, consisted of income derived from the Texas properties; in 1929, income from community property, as reported by him, included income received by him from all sources except from salaries.
The Commissioner determined that the entire income received from "community property" constituted income of the taxpayer in each of the taxable years in question. The Board of Tax Appeals upheld the Commissioner's determination in this respect, and found a deficiency in tax for 1927 in the amount of $19,709.37, for 1928 of $15,600.23, and for 1929 of $16,245.21.
The question presented is whether the taxpayer, in determining the amount of his income, was entitled to deduct, as taxable to his wife, one-half of the total income which he received during 1927, 1928, and 1929 from property which he listed in his tax returns as "community property."
The taxpayer contends that all assets which he and his wife owned at the time they left Texas [such assets are not specifically enumerated nor is their value shown by the evidence] were community property; that all assets held by him in 1927, 1928, and 1929 grew out of this community property and were therefore held by him as trustee for the benefit of himself and his wife in equal shares; and that one-half of the income from such assets was therefore taxable to his wife.
It is conceded by the Commissioner, as it must be, that the taxpayer's wife, under the laws of Texas, had a half interest in the property which the taxpayer acquired during marriage while a resident there. Texas Revised Civil Statutes, art. 4619; Hopkins v. Bacon, 282 U.S. 122, 51 S. Ct. 62, 75 L. Ed. 249. Her beneficial interest in such property was in all respects equal to that of the taxpayer, although he had the power of control over *955 the property as long as he discharged his obligations as the head of the family. Davis v. Davis (Tex.Civ.App.) 186 S.W. 775, 777; Burnham v. Hardy Oil Co., 108 Tex. 555, 195 S.W. 1139, 1143; Mercury Fire Ins. Co. v. Dunaway (Tex.Civ.App.) 74 S.W.(2d) 418. The taxpayer and his wife had the same equality of interest in any property deeded to him alone as in any property which may have been conveyed to them jointly, except that in the former instance her title to an undivided one-half interest was equitable only [Elliott v. Wallace (Tex.Com.App.) 59 S.W. (2d) 109; Anderson v. Gazaway (Tex.Civ. App.) 80 S.W.(2d) 481], and the taxpayer, in whom the legal title was vested, held his wife's undivided one-half interest in trust for her. Mitchell v. Schofield, 106 Tex. 512, 171 S.W. 1121, 1122; Carter v. Barnes (Tex.Civ.App.) 16 S.W.(2d) 136. However, the taxpayer's wife had no right to a partition of the community property during coverture so long as they resided in Texas. Givens v. Givens (Tex. Civ.App.) 195 S.W. 877, 879; Coleman v. Coleman (Tex.Civ.App.) 293 S.W. 695, 699.
It is also conceded by the Commissioner that the taxpayer's wife did not lose her rights in the community property when she and the petitioner removed from Texas to Missouri, where the community property law is not in force. Depas v. Mayo, 11 Mo. 314, 49 Am.Dec. 88; Edwards v. Edwards, 108 Okl. 93, 233 P. 477.
The burden was upon the taxpayer to establish error in the Commissioner's determination, by showing that some portion of the income received by him during the taxable years in question was income of his wife which was not taxable to him. Helvering v. Taylor, 293 U.S. 507, 515, 55 S. Ct. 287, 79 L. Ed. 623; Universal Steel Co. v. Commissioner of Internal Revenue (C.C.A. 3) 46 F.(2d) 908; Marquette Oil Distribution Co. v. Commissioner of Internal Revenue (C.C.A. 8) 73 F.(2d) 205, 212; Whitlow v. Commissioner of Internal Revenue (C.C.A. 8) 82 F.(2d) 569, 571.
The Board found, in effect, that while it was impossible to determine from the evidence how much of the taxpayer's income was attributable to the proceeds and increment of the original community property, more than one-half of the income attributed by the taxpayer to community property was, in fact, taxable to him. If this finding is supported by substantial evidence and justifies the conclusion reached by the Board, the decision of the Board should be affirmed. Randolph v. Commissioner of Internal Revenue (C.C.A. 8) 76 F.(2d) 472, 476; General Utilities & Operating Co. v. Helvering, 296 U.S. 200, 206, 56 S. Ct. 185, 80 L. Ed. 154; Helvering v. Rankin, 295 U.S. 123, 131, 132, 55 S. Ct. 732, 79 L. Ed. 1343; Phillips v. Commissioner, 283 U.S. 589, 600, 51 S. Ct. 608, 75 L. Ed. 1289; Twin City Tile & Marble Co. v. Commissioner (C.C.A. 8) 32 F.(2d) 229; Whitlow v. Commissioner of Internal Revenue (C.C. A. 8) 82 F.(2d) 569, 572. "And even though the evidence before the Board is undisputed, the finding of the Board will not be disturbed by this court if different inferences may reasonably be drawn from such evidence. Helvering v. Ames (C.C. A. 8) 71 F.(2d) 939, 943." Randolph v. Commissioner of Internal Revenue, supra.
The taxpayer did not attempt to trace the proceeds of the assets owned by him and his wife when they left Texas. He claims, in effect, that one-half of all of his assets must, in equity, belong to his wife because they were acquired with the proceeds or increment of community property which they owned when they came to Missouri in 1899. We think that the evidence justifies the inference that the taxpayer made profitable use of his individual credit and the $91,504.12 received by him as salaries from 1916 to 1928, and that his individual efforts, credit, and funds resulted in the acquisition of substantial assets which could not properly be regarded as trust or community property. We are therefore of the opinion that such evidence sustains the Board's finding that more than one-half of the amount of the entire income reported by the taxpayer as derived from community property was taxable to him, and that he did not sustain the burden of proving that one-half of it was taxable to his wife. It is apparent from the evidence, however, that the taxpayer and his wife owned a substantial amount of community property when they removed from Texas to Missouri in 1899. What the value of that property was cannot be determined from the evidence. One-half of it, whatever its value, the taxpayer held in trust for the use and benefit of his wife. Depas v. Mayo, 11 Mo. 314, 49 Am.Dec. 88; Edwards v. Edwards, 108 Okl. 93, 233 P. 477. Therefore, one-half of the income *956 derived from assets acquired with the proceeds or increment of the original community property was not taxable to the taxpayer, but to his wife. It cannot be said, however, that the Commissioner's determination that the income received by the taxpayer was taxable to him was arbitrary, since the taxpayer did not show what specific property or what definite portion of the entire property possessed by him in 1927, 1928, and 1929 was attributable to the original community property, and therefore failed to furnish a basis for ascertaining how much of the income received by him was trust income taxable to his wife. But it is apparent that the issue actually presented to and actually determined by the Commissioner and the Board was whether one-half of the income received by the taxpayer in the years in question was taxable to his wife, and was not whether some definite portion less than one-half of the income received by him was taxable to her. Under the peculiar circumstances of this case, we think that after the Board (which had both the right and the duty to redetermine the deficiencies assessed, if erroneous) had found that more than one-half of the entire income received by the taxpayer during those years was taxable to him, it should have afforded him an opportunity to produce evidence to show whether it would be possible to ascertain what portion of the assets possessed by him and what portion of the income received by him during the years in question were trust assets and trust income not taxable to him, and, if so, to establish the correct amount of the tax for which he was liable.
The decision of the Board of Tax Appeals in so far as it constitutes a determination that more than one-half of the income received by the taxpayer during the years 1927, 1928, and 1929 and reported by him as derived from community property, was taxable to him, is affirmed. The case is remanded to the Board of Tax Appeals, with directions to give to the taxpayer an opportunity to produce evidence to establish what portion of the income received by him during those years was taxable to him and what portion was taxable to his wife. In case evidence is produced which will enable the Board to segregate the income taxable to the taxpayer from that taxable to his wife, the Board is directed to redetermine the deficiencies assessed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511223/ | 266 S.W.2d 204 (1954)
KOSTOFF
v.
HARRIS.
No. 14792.
Court of Civil Appeals of Texas, Dallas.
February 5, 1954.
Rehearing Denied March 5, 1954.
*205 Rufus N. McKnight, Dallas, for appellant.
Roger Lewis and Otis Bowyer, Dallas, for appellee.
DIXON, Chief Justice.
This is an appeal from an order granting a temporary injunction restraining appellant from injuring appellee Harris, or from visiting appellee's place of business.
Appellant has briefed these alleged errors: (1) No injunction bond was required or filed; (2) equity powers of a civil court should not have been exercised to enjoin the commission of a crime; (3) the pleadings are insufficient; and (4) there is no evidence to support the court's order.
The trial court should have required appellee to file an injunction bond. Rule 684, Texas Rules of Civil Procedure. However the failure to do so did not render the order void, but voidable only, and subject to amendment or correction. Carleton v. Dierks, Tex.Civ.App., 195 S.W.2d 834. Since we are reversing the order on other grounds we think that the question of a bond becomes immaterial.
The record discloses that on September 9, 1953 appellant and appellee engaged in a fight on a driveway not far from appellee's place of business. On September 25, 1953 appellee was granted an ex parte restraining order, and the court set October 1, 1953 as the date for a hearing as to whether a temporary injunction should be granted.
The only witnesses who testified at the hearing on October 1, 1953 were appellant Kostoff and appellee Harris. Their testimony was in sharp conflict as to the fight of September 9, 1953. Each blamed the other as the aggressor. Each claimed injuries of such a nature as to require medical attention. Each in substance, though not in exact words, proclaimed himself a peaceful and law-abiding citizen.
In his petition appellee alleged that appellant was threatening to give trouble and to annoy and harass him and that he feared appellant.
*206 But appellee's own testimony contradicts his pleadings. We quote from appellee's testimony:
"Q. Have you talked to this defendant since this alleged occurrence? A. No, sir, I didn't.
"Q. Well, has he attempted to approach you? A. No, sir.
"Q. Well, nobody has threatened you? A. No, sir.
"Q. Nobody has told you anything? A. No, sir. I won't tell no lies."
We are aware that the granting of a temporary injunction is addressed to a trial court's sound discretion. But there are limits to such discretion, and on appeal a temporary injunction will be dissolved if it appears from the record that there was an erroneous application of law to undisputed facts. Southland Life Ins. Co. v. Egan, 126 Tex. 160, 86 S.W.2d 722 (opinion adopted by S.C.); Crouch v. Crouch, Tex. Civ.App., 164 S.W.2d 35. In this case appellee himself testified that since the fight occurred nobody has threatened him and that appellant has not talked to him or approached him. As a matter of law to warrant the issuance of a temporary injunction the facts must make it appear that an injurious wrong, irreparable in its nature, is imminently threatened. Spears v. City of South Houston, 136 Tex. 218, 150 S.W.2d 74 (opinion adopted by S.C.). "Mere uncertainty or mere apprehension of injury is not sufficient." Thomas v. Bunch, Tex.Civ.App., 41 S.W.2d 359, 362, affirmed, Bunch v. Thomas, 121 Tex. 225, 49 S.W.2d 421. "* * * an injunction will not lie to prevent an alleged threatened act, the commission of which is speculative and the injury from which is purely conjectural." Haden Employees' Ass'n v. Lovett, Tex. Civ.App., 122 S.W.2d 230, 232 (ref.). Under the undisputed facts in the case before us appellee as a matter of law was not entitled to a temporary injunction.
Further, in the absence of statutory authority, equity will not enjoin the commission of a crime unless property rights are involved. Pitman v. State, Tex.Civ. App., 234 S.W.2d 436; Lammon v. City of San Antonio, Tex.Civ.App., 223 S.W.2d 533 (ref. n. r. e.); 4 Pomeroy's Equity Jurisprudence, Fifth Ed., sec. 1347, p. 949. And this rule has been held to apply to a mere threatened physical injury, the reason being that the remedies for damages and criminal prosecution are considered adequate. 43 C.J.S., Injunctions, § 131, p. 678; Allbee v. Elms, 93 N.H. 202, 37 A.2d 790.
The order of the trial court granting a temporary injunction is reversed and the temporary injunction is dissolved. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511204/ | 150 N.J. 489 (1997)
696 A.2d 666
HARLEY DAVIDSON MOTOR COMPANY, INC., PLAINTIFF-RESPONDENT,
v.
ADVANCE DIE CASTING, INC., NORTHBROOK PROPERTY AND CASUALTY INSURANCE COMPANY, DEFENDANTS-APPELLANTS, AND ABC CORP., AND XYZ CORP., DEFENDANTS.
The Supreme Court of New Jersey.
Argued March 17, 1997.
Decided July 16, 1997.
*491 Judson L. Hand argued the cause for appellants (Bumgardner, Hardin & Ellis, attorneys; William R. Bumgardner, of counsel and Mr. Hand and Mr. Bumgardner, on the briefs).
John I. Lisowski argued the cause for respondent (Morgan, Melhuish, Monaghan, Arvidson, Abrutyn & Lisowski, attorneys; Mr. Lisowski, Robert G. Klinck and Steven F. Gooby, on the briefs).
The opinion of the Court was delivered by O'HERN, J.
*492 The question in this appeal is whether, in a consumer's products liability action, the claim by a retailer of the defective product for indemnification from a supplier of the product or a component thereof, is subject to the procedural requirements of the entire controversy doctrine. We hold that the requirements of the entire controversy doctrine apply to such claims but agree with the Appellate Division that the notice given to the supplier under N.J.S.A. 12A:2-607(5)(a) and to the courts involved in the two matters satisfied the fairness concerns of the entire controversy doctrine.
I
In June 1988, Mario DiMaria was riding his 1977 Harley Davidson (Harley) FXE 1200 Super Glide motorcycle when it was hit by a car. The ball of DiMaria's left foot was on the stationary peg attached to the aluminum front chain housing cover (the cover), which shields the clutch plate and rotating chain.[1] Upon impact, the front bumper of the car hit just behind the peg, driving DiMaria's left foot into the cover which shattered. DiMaria's heel was forced against the exposed rotating chain and clutch plate and both the skin and muscle surrounding his left heel were torn down to the bone.
In 1990, DiMaria sued the driver of the car and Harley Davidson. Against Harley, DiMaria claimed that a defect in the front chain housing cover aggravated his injuries. He alleged that the *493 housing cover had been defectively designed and defectively manufactured. (DiMaria claimed that Harley had designed the cover). The other driver died from unrelated causes while the case was pending. DiMaria settled with her estate for the $100,000 policy limit.
Advance Die Casting, Inc. (Advance) manufactured the cover. By letter dated March 1, 1993, Harley asked Advance to assume Harley's defense against DiMaria and to indemnify Harley against any judgment in the trial scheduled for July 1993. On March 25, 1993, the insurance carrier for Advance declined to assume Harley's defense or to indemnify Harley. Harley renewed its demands on July 14 and July 20, 1993, but failed to join either Advance or its insurance company in the DiMaria action.
DiMaria's trial against Harley took place in July 1993. Harley successfully moved to dismiss the design defect claim. The jury unanimously decided that the front chain housing cover had been defectively manufactured, but that the defect was not the proximate cause of DiMaria's injuries. DiMaria appealed, and on October 31, 1994, the Appellate Division affirmed the finding of a manufacturing defect, but reversed on the issues of causation and damages, and sent the case back for a new trial on these issues. Harley's petition to this Court was denied. 142 N.J. 448, 663 A.2d 1355 (1994).
In November 1994, Harley wrote to Advance and its insurance company, Northbrook Property and Casualty Insurance Company (Northbrook), and informed them of the Appellate Division's decision. Harley again demanded that Advance or Northbrook assume its defense and agree to indemnify it against any judgment. On January 4, 1995, Northbrook refused to assume the defense or indemnify Harley.
In March 1995, during the pendency of the underlying tort action, Harley filed a separate declaratory judgment action claiming that Advance and Northbrook were obliged to provide a defense for Harley and to indemnify it against any judgment. Pursuant to Rule 4:5-1(b)(2), which implements the entire controversy *494 doctrine, Harley informed the court of the underlying action by including as an exhibit in the declaratory judgment action the complaint in the underlying action, its docket number, and the pending retrial date. At no time did a party or court attempt to consolidate the two matters.
On April 28, 1995, before the retrial of DiMaria's case, counsel for Advance and Northbrook attended a settlement conference concerning the underlying claim. On May 1, 1995, attorneys for DiMaria and Harley agreed to a settlement of $150,000. Harley notified Advance of the settlement and Advance agreed that it was reasonable. At the settlement proceeding before Judge Boggia, Harley stated:
For the purposes of the record, Judge, we have also we, meaning Harley Davidson Motor Company have sued Northbrook Insurance Company as well as Advance Die Casting in another action. [Northbrook's counsel] has indicated that ... I could put on the record ... [that] the settlement is fair and reasonable under the circumstances.
In August 1995, Advance sought to dismiss the declaratory judgment action on the grounds of lack of personal jurisdiction, because Advance is incorporated and has its place of business in Wisconsin. The trial court dismissed the action on its own motion, on the basis of the entire controversy doctrine. Harley appealed. The Appellate Division reversed and remanded. 292 N.J. Super. 62, 678 A.2d 293 (App.Div.), certif. granted in part, 146 N.J. 568, 683 A.2d 1163 (1996). The court held that the entire controversy doctrine did not apply because the indemnity action had not accrued until after the settlement.
It is well settled that the entire controversy doctrine "does not apply to bar component claims [either] unknown, unarisen, or unaccrued at the time of the original action." Mystic Isle Dev. Corp. v. Perskie & Nehmad, 142 N.J. 310, 323, 662 A.2d 523 (1995). The appellate court reasoned that a cause of action for indemnification accrues when an indemnitee becomes obligated to pay the claim for which indemnification is sought. Harley Davidson, supra, 292 N.J. Super. at 68, 678 A.2d 293 (citing Holloway v. State, 125 N.J. 386, 399, 593 A.2d 716 (1991); McGlone v. Corbi, 59 *495 N.J. 86, 95, 279 A.2d 812 (1971); Adler's Quality Bakery, Inc. v. Gaseteria, Inc., 32 N.J. 55, 81, 159 A.2d 97 (1960); and Cola v. Packer, 156 N.J. Super. 77, 81 n. 2, 383 A.2d 460 (App.Div. 1977)). The court also determined that Harley's obligation to pay DiMaria arose "only after the settlement of the case," that is, after May 1, 1995, the date when the underlying action was settled. Ibid. The court further explained that a stricter interpretation "would ignore, or make mandatory, both the permissive joinder rule, R. 4:29-1(a), and the impleader (third-party practice) rule, R. 4:8-1(a)." Ibid. The panel foresaw a similar effect upon the relevant sections of the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-1 to -20, and the New Jersey Tort Claims Act, N.J.S.A. 59:9-3 and 3-1. Ibid. The court explained that
[w]here the claim against a third-party defendant is for a sequential claim such as indemnification, R. 4:8-1 is, and must remain, permissive, not mandatory, except as R. 4:28-1(a) (mandatory joinder) may apply.... [Although] this rule is open-ended in its definition of what parties must be joined, there is no blanket rule placing indemnitors in such a mandatory class.
[Id. at 68-69, 678 A.2d 293.]
The court further explained that the New Jersey Rules of Evidence support the finding that the entire controversy doctrine is inapplicable to the facts in this case. Id. at 69, 678 A.2d 293. Evidence Rule 803(c)(26) provides that an indemnitor who has notice of and an opportunity to defend the first action may be bound by an indemnitee in a second action with the judgment acquired in the first action. In addition, the panel relied on N.J.S.A. 12A:2-607(5)(a), a provision of the Uniform Commercial Code that allows a buyer to "vouch in" sellers when the buyer is sued for a product defect by a third party and permits the buyer to bind the seller to the factual determinations in the action when the seller declines to defend the buyer.[2]Ibid. The court interpreted *496 the statute and the rule as foreseeing separate indemnification actions irrespective of whether the indemnitor was joined as a party to the first action. Ibid. Because recent entire controversy doctrine opinions have not displaced the U.C.C. or the rules of evidence, the panel "assume[d] that a subsequent separate suit for indemnification is not barred by the entire controversy doctrine, at least where an indemnitor had been vouched in with notice and an opportunity to defend the underlying action." Ibid. Although it would have been more prudent had Harley joined Advance as a third-party defendant in the underlying action, the Appellate Division held that the goals of the entire controversy doctrine were ultimately satisfied through the "vouching-in" procedure. Id. at 69-70, 678 A.2d 293. The Appellate Division remanded the matter to the Law Division for certain factual inquiries concerning indemnification: (1) whether respondent satisfied the "vouching-in" requirements of N.J.R.E. 803(c)(26), and (2) whether petitioners-appellants in fact made the cover at issue. Id. at 76, 678 A.2d 293. In so doing, the court held both that the entire controversy doctrine did not bar the second action and that there was "ample basis for in personam jurisdiction." Ibid. We granted certification limited to the issue of the entire controversy doctrine. 146 N.J. 568, 683 A.2d 1163 (1996).
II
We need not review in detail the principles of the entire controversy doctrine. "The objectives behind the doctrine are threefold: (1) to encourage the comprehensive and conclusive determination of a legal controversy; (2) to achieve party fairness, including both parties before the court as well as prospective parties; and (3) to promote judicial economy and efficiency by avoiding fragmented, multiple and duplicative litigation." Mystic *497 Isle Dev. Corp., supra, 142 N.J. at 322, 662 A.2d 523. The entire controversy doctrine strives to further these objectives by requiring that, whenever possible, "the adjudication of a legal controversy should occur in one litigation in only one court." Cogdell v. Hospital Ctr., 116 N.J. 7, 15, 560 A.2d 1169 (1989). "The doctrine requires parties to a controversy before a court to assert all claims known to them that stem from the same transactional facts, even those against different parties." Joel v. Morrocco, 147 N.J. 546, 548, 688 A.2d 1036 (1997). The entire controversy doctrine fosters the "goals of efficient judicial administration and fairness" to parties. Prevratil v. Mohr, 145 N.J. 180, 187, 678 A.2d 243 (1996).
A.
The Appellate Division opinion suggests that claims for indemnity are not subject to the entire controversy doctrine because they are unaccrued. There may be a class of indemnity claims in which that will be true. See Andrew T. Berry, Application of the Entire Controversy Doctrine to Insurance Coverage Litigation: A Bridge Too Far, 28 Rutgers L.J. 41, 49-52 (1996). But we believe that in the generality of products liability cases, "upstream" claims for contribution or indemnity are within the reach of the doctrine. Promaulayko v. Johns Manville Sales Corp., 116 N.J. 505, 516, 562 A.2d 202 (1989). Under the doctrine of common-law indemnification, parties held liable for defects in products for which they had no direct responsibility may obtain redress from the culpable party. Id. at 511, 562 A.2d 202. This Court has said that:
In the absence of an express agreement between them, allocation of the risk of loss between the parties in the chain of distribution is achieved through common-law indemnity, an equitable doctrine that allows a court to shift the cost from one tortfeasor to another. The right to common-law indemnity arises "without agreement, and by operation of law to prevent a result which is regarded as unjust or unsatisfactory."
[Ibid. (quoting W. Keeton, et al., Prosser & Keeton on The Law of Torts, § 51 at 341 (5th ed. 1984)).]
Generally, common law indemnification shifts the cost of liability from one who is constructively or vicariously liable to the *498 tortfeasor who is primarily liable. Adler's Quality Bakery, Inc., supra, 32 N.J. at 80, 159 A.2d 97. This "shifting" of the risk up the distribution chain to, in most cases, the actual manufacturer of the offending product, fulfills the basic goal of distributing the risk to the party best able to bear it. Promaulayko, supra, 116 N.J. at 513, 562 A.2d 202. Thus, as a general rule, indemnification is expected to follow the chain of distribution. Ibid.
Rule 4:7-5 governs the procedure for making a cross-claim for contribution or indemnity against a co-party in a suit. In 1979, this rule was amended "in accordance with the ... [entire controversy doctrine] ... to require defendants to assert any cross-claims for contribution and indemnity which they may have against any other party in the action itself despite the fact that the cause of action for contribution and indemnity does not technically accrue until payment of the judgment by that defendant." Pressler, Current N.J. Court Rules, comment 2 on R. 4:7-5(b) (1997). Although Rule 4:7-5 applies to joinder of claims against parties already present in the action, not joinder of new parties, the analysis of accrual for purposes of the entire controversy doctrine is instructive.
The "factual circumstances giving rise to the controversy itself" are common to both claims of DiMaria and Harley. Joel, supra, 147 N.J. at 550, 688 A.2d 1036. DiMaria claims that his injuries were caused by both manufacturing and design defects. Harley claims that it is entitled to indemnity because of the defects alleged by DiMaria. DiMaria's case was tried before a jury that concluded that although a manufacturing defect existed, it was not the cause of the accident. Application of the doctrine here is consistent with Cogdell, which sets forth a test for determining when the entire controversy doctrine should apply.
Cogdell requires the parties that are to be joined to have a "material interest" in the judicial outcome of the controversy. Cogdell, supra, 116 N.J. at 23, 560 A.2d 1169. Cogdell defines "material interest" as "one that can affect or be affected by the judicial outcome of a legal controversy...." Ibid. Advance had a *499 "material interest" in the outcome of the first controversy because as Harley alleged in its second coverage complaint, Advance manufactured the clutch cover involved in that action and that Harley was a third-party beneficiary of the liability insurance policy of Northbrook issued to Advance. Defendants assert that Harley knew of its claim at the time of the underlying action; that Harley sat on its claim; and that Harley failed to join Advance and Northbrook in the underlying action or to provide the court with the opportunity to decide how to proceed with the various claims and parties. Thus, defendants argue that it is unfair to give plaintiff "a second bite at the apple." Cogdell, supra, 116 N.J. at 13, 560 A.2d 1169.
Because the party-joinder rule "tries foremost to protect an absent person from an adjudication of his or her interests [and] also protects all of society from repetitious, abortive, and wasteful litigation," id. at 17-18, 560 A.2d 1169, absent the effect of "vouching-in," party-joinder would be required in this action to satisfy the entire controversy doctrine because a jury in the second action would have had to retry the same basic facts of the manufacturing defect. In essence, there would be two trials where one would suffice. New Jersey Transit Rail Operations, Inc. v. North Jersey Cleaning Service, Inc., 277 N.J. Super. 367, 649 A.2d 908 (Law Div. 1994), does not dictate a contrary result. Harley relies on the language in New Jersey Transit Rail Operations, Inc. that states "the claim [in the second action] did not accrue until [the plaintiff] was found liable in the prior litigation." Id. at 371, 649 A.2d 908. However, the later claim for indemnification was allowed because the first court had denied the plaintiff in the first action the right to join the party secondarily liable. Id. at 372-73, 649 A.2d 908.
The proper theory for analyzing the application of the entire controversy doctrine to this case was set forth by Newmark v. Gimbel's Inc., which involved a suit by a consumer against a retailer of a defective shampoo. The Court held that the retailer of such a product has an action against the manufacturer, who is *500 primarily responsible for placing the defective product in the marketplace. 54 N.J. 585, 600-01, 258 A.2d 697 (1969). There, the Court stated:
[c]onsidering the overall problem of prosecuting products liability cases, it would seem to make sense procedurally to have the plaintiff's cause of action... adjudicated in one action against the manufacturer and retailer. If the plaintiff sues the dealer alone, the dealer in his own interest should implead the manufacturer and thus avoid circuity of action.
[Ibid.]
In fact, in this case the retailer of the motorcycle and the manufacturer of the component were more properly viewed as joint tortfeasors. The defect could have been due to a design defect or a manufacturing defect or a combination of each. A jury could have apportioned the liability between the two tortfeasors. N.J.S.A. 2A:15-5.2; Renz v. Penn Central Corp., 87 N.J. 437, 465, 435 A.2d 540 (1981).
B.
Although the principles of the entire controversy doctrine apply to upstream (and possibly downstream) claims for indemnity in products liability cases, we do agree that in the context of this case the "vouching-in" procedure was a satisfactory substitute for party-joinder since the required notice was given to the supplier pursuant to N.J.S.A. 12A:2-607(5)(a). Harley's notice to Advance on March 1, 1993, prior to the first trial, demanded that Advance
agree to immediately assume the defense of Harley-Davidson, Inc. and indemnify Harley-Davidson, Inc. for any damages, costs, fees, or judgments entered against Harley-Davidson, Inc. in this case. This case is presently scheduled for trial on May 11, 1993. Therefore, I ask that you advise of your decision in this matter as soon as possible.
The court in the underlying action (DiMaria's action) was informed, if belatedly, of Harley's claim against Advance, before the first case settled on May 1, 1995. The court in the first case did not defer the settlement of the first claim in order to consolidate the actions; the second court was informed of the first action in plaintiff's complaint filed March 10, 1995. It also took no action to consolidate the claims. The twin pillars of the entire controversy *501 doctrine, fairness to parties and fairness to the court, were satisfied by these actions of Harley.
III
Although we find that the requirements of the entire controversy doctrine were satisfied, we advert to other arguments made by the parties. Harley argues that there is an underlying inconsistency in our Rules of Civil Practice and Procedure that may have contributed to the misunderstanding of when claim preclusion occurs under the entire controversy doctrine. Rule 4:30A states: "Non-joinder of claims or parties required to be joined by the entire controversy doctrine shall result in the preclusion of the omitted claims to the extent required by the entire controversy doctrine...." (Emphasis added.) However, Rule 4:8 (third-party practice) states:
Within 90 days after the service of the original answer, a defendant, as third-party plaintiff, may file and serve a summons and third-party complaint, together with a copy of plaintiff's complaint, upon a person not a party to the action who is or may be liable to defendant for all or part of the plaintiff's claim against defendant and may also assert any claim which defendant has against the third-party defendant involving a common question of law or fact arising out of the same transaction or series of transactions as the plaintiff's claim.
[R. 4:8-1(a) (emphasis added).]
Harley emphasizes that although Rule 4:30A has preclusive effect, Rule 4:8 speaks in the permissive when it says "may join."
In contrast, Rule 4:7-5 (cross-claim rule) requires mandatory joinder of claims for indemnity against a party to an action:
A defendant shall assert a claim for contribution or indemnity against any party to the action by inserting in the answer ... a general demand for contribution or indemnity from a named party and specifying the statute under which such claim is made, but without setting forth the facts upon which the claim is based. If a claim for contribution or indemnity is made, the answer shall be served upon the parties against whom such relief is sought and no responsive pleading thereto need be filed.
[R. 4:7-5(b) (emphasis added).]
Advance argues that the Appellate Division ignored the impact of Rule 4:7-5 in determining that Harley's indemnification claim against Advance did not accrue until DiMaria and Harley settled. *502 Advance asserts that in ruling that Harley's claim was "unaccrued," the Appellate Division took the word out of its proper context. Advance argues that "[a]fter the 1979 revisions to R. 4:7-5, the fact that a claim has not `accrued,' in the technical sense of starting the statute of limitations period to run, does not affect the impact of the entire controversy doctrine upon that claim." See Bendar v. Rosen, 247 N.J. Super. 219, 237, 588 A.2d 1264 (App.Div. 1991) (stating that "[w]hile technically a right of contribution does not arise until a tortfeasor has paid more than his pro rata share, ... the entire-controversy doctrine and judicial economy militate for the claim being asserted in the underlying [] action"). This Court has stated that "[t]he accrual of a cause of action [for purposes of the entire controversy doctrine] occurs when a plaintiff knows or should know the facts underlying those elements, not necessarily when a plaintiff learns the legal consequences of those facts." Circle Chevrolet Co. v. Giordano, Halleran & Ciesla, 142 N.J. 280, 296, 662 A.2d 509 (1995).
We acknowledge that refinements in our Rules of Civil Practice and Procedure may be required to clarify the circumstances in which the entire controversy doctrine may apply. In Olds v. Donnelly, 150 N.J. 424, 696 A.2d 633 (1997), also decided today, we have referred to the Civil Practice Committee the task of reviewing the rules for application of the doctrine. We direct that committee to consider specifically whether Rule 4:8 (third-party practice rule) should be amended in light of the entire controversy doctrine.
To repeat, we do not exclude as a class all third-party claims for indemnity from the reach of the entire controversy doctrine. Some forms of indemnity will truly not have accrued until the conclusion of the underlying litigation. See generally Berry, A Bridge Too Far, supra, 28 Rutgers L.J. 41. However, in a products liability action, a claim for common-law indemnification from a third party should ordinarily be joined in the original action because of related issues of contribution. Harley's use of *503 the "vouching-in" procedure and notice to both courts satisfied the fairness requirements of the entire controversy doctrine.
The judgment of the Appellate Division is affirmed and remanded to the trial court for consideration of the remaining issues.
STEIN, J., concurring.
I concur in the judgment of the Court for the reasons stated in my separate opinion in Olds v. Donnelly, 150 N.J. 424, 696 A.2d 633 (1997), also decided today.
Justice STEIN, concurring in the result.
For affirmance and remandment Chief Justice PORITZ and Justices HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN and COLEMAN 7.
NOTES
[1] DiMaria's expert explains:
[A motorcycle's] front chain housing cover assembly, which includes the cover plate, serves several purposes. It is first a simple cover to protect the clutch plate and chain mechanism from contamination and damage from road debris and corrosion. In addition, it serves as a mounting location for the operator's foot peg through which the foot shift lever assembly penetrates the housing and as a bearing support for the starter motor jack shaft. The operator's foot peg bolts to the front chain housing cover at the elongated opening in the forward portion of the cover.
[2] N.J.S.A. 12A:2-607(5)(a) states:
(5) Where the buyer is sued for breach of a warranty or other obligation for which [the] seller is answerable over
(a) [the buyer] may give [the] seller written notice of the litigation. If the notice states that the seller may come in and defend and that if the seller does not do so [the seller] will be bound in any action against [the seller] by [the] buyer by any determination of fact common to the two litigations, then unless the seller after seasonable receipt of the notice does come in and defend [the seller] is so bound. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511209/ | 939 F. Supp. 1497 (1996)
Jim PFANNENSTIEL, Plaintiff,
v.
OSBORNE PUBLISHING CO., Sandra Trail, Floyd Bose, and City of Osborne, Kansas, Defendants.
Civil Action No. 94-1186-FGT.
United States District Court, D. Kansas.
September 19, 1996.
*1498 *1499 Caleb Boone, Hays, KS, for Jim Pfannenstiel.
Philip W. Hardman, Dietz & Hardman, Osborne, KS, for Osborne Publishing Co., Sandra Trail.
Allen G. Glendenning, Watkins, Calcara, Rondeau, Friedeman, Bleeker, Glendenning & McVay, Chtd., Great Bend, KS, for Floyd Bose, City of Osborne, Kansas.
MEMORANDUM AND ORDER
THEIS, District Judge.
This is a defamation action brought under Kansas law. Jurisdiction is based on diversity of citizenship. The defendants are Osborne Publishing Company, Inc., which publishes the weekly Osborne County Farmer, Sandra Trail, a reporter and editor of the newspaper, the City of Osborne, Kansas, and Floyd Bose, Osborne's Chief of Police. The matter is before the court on motions for summary judgment brought by the defendants.
1. Uncontroverted Facts[1]
On or about September 5, 1992, a Dodge Daytona owned by the plaintiff, Jim Pfannenstiel, was stolen from the premises of Bohm's Garage, plaintiff's place of employment. Officer Kim Rothenberger of the Osborne City Police Department investigated the theft. A Michael J. Cantrell[2] was found with the car and other stolen items in Arkansas and was arrested on previous charges arising there.
Osborne Police Chief Floyd Bose gave information concerning the theft to Sandra Trail of the Osborne County Farmer. Bose testified in deposition that he is certain he correctly told Trail that the car was stolen from Pfannenstiel. Bose testified that he did not reveal the identity of the suspect. Trail testified in deposition that she did not remember the words Chief Bose used to tell her about the automobile theft. She testified that by the end of the conversation, she was certain Pfannenstiel had stolen the car from his employer's premises. She recalled that Jim Pfannenstiel was the only name given to her and she remembered asking him about whether he was from Arkansas because Pfannenstiel is a common name in the Hays, Kansas, area.
After talking to Chief Bose, Trail wrote the following, which was printed in the September 10, 1992, issue of the Osborne County Farmer:
According to Osborne Police Chief Floyd Bose, a 1984 Dodge Daytona was apparently taken from Bohm's garage Saturday night by an employee, Jim Pfannenstiel. Also taken were a Ruger pistol, tools and $200.
The car, along with the pistol and tools, were found Monday in Fulton County, Ark., and Pfannenstiel was arrested by authorities there on previous charges. Local authorities may extradite him after he faces charges in Arkansas.
The local investigation, Bose said, was conducted by Officer Kim Rothenberger.
On the day of the publication, Trail learned of the error and a correction was placed on the Farmer's Telenews telephone line.
The front page of the next issue of the Farmer, issued on September 17, 1992, included a correction which stated, in part:
A story in last week's paper incorrectly reported the theft of a stolen car from Bohm's garage in the Industrial Park.
Instead of being stolen by Jim Pfannenstiel as stated, the car, a Dodge Daytona, was owned by Pfannenstiel. The car was located in Salem, Ark., in the possession of Michael Joe Cantrell who was taken into custody.
The Osborne County Farmer staff apologizes for the mistake and the problems it caused Pfannenstiel and anybody else involved.
*1500 The issue also contained a piece, voluntarily written by Trail, entitled "Anatomy of a Mistake." In that document Trail apologized to Pfannenstiel. Trail wrote that she had misunderstood the information presented to her by Bose, for which she took complete responsibility. Trail wrote: "Jim Pfannenstiel was put through needless pain and anxiety. I cannot forgive myself for having caused that, even if it was unintentional." She did note, however, that the mistake never would have occurred had the police department allowed her to read the police report. Apparently, the Osborne Police Department consistently denies media requests for copies of its reports.
Pfannenstiel contends he has suffered damage to his reputation and mental anguish as a result of the erroneous article. There is no evidence, however, that plaintiff has undergone any treatment for medical or mental problems related to this incident. Likewise, there is no evidence that plaintiff's employment was adversely affected. Plaintiff retained his friends and social acquaintances. He frequented the same public establishments that he had before.
Some time after the incident at issue in this case, plaintiff moved to Burlington, Colorado, and started a business in Colby, Kansas, with Gerald "Buddy" Potts.[3] Neither plaintiff nor Potts could testify to any business or customers they have lost as a result of the article.
The plaintiff listed a number of witnesses who, he said, could testify about the damage to his reputation. With certain exceptions detailed below, each of these witnesses testified that they did not believe the article when they read it, and they thought no less of plaintiff as a result of reading the article. Several testified further that they do not know of anyone who believed the article. Danny Williams testified that he did not even know whom the article was discussing, but his opinion of plaintiff was not lowered as a result of the article. Linda Streit testified that she was confused by the article, but was told within hours of reading it that it was in error. Her opinion of plaintiff did not change as a result of the article, and she does not believe his reputation in the community has been damaged.
Plaintiff's business partner testified that he believes some people think less of the plaintiff after the article was published. He was unable, however, to identify any such people. He claims to have overheard portions of other people's conversations over coffee and donuts. Potts could only name two people he heard discuss the plaintiff in connection with the article. They were Duane Spears and Bob Schellinger. However, each testified in deposition that he did not believe the article when he read it. Schellinger, in addition to some other witnesses, testified about teasing plaintiff about the article, but plaintiff was upset and did not respond with good humor.
Plaintiff testified in deposition that he had never spoken with anyone who had believed the September 10 article and had encountered no one who thought less of him because of the article. Plaintiff testified that several people mentioned the article to him in jest. Plaintiff has lost no income in the past and expects to lose no income in the future as a result of the article.
In response to the motion for summary judgment, plaintiff submitted the affidavits of five Osborne citizens. Each affidavit stated that the affiant had read the September 10 article and believed upon reading it that Pfannenstiel had stolen a car. Each affiant stated further that he/she believed substantial damage was done to plaintiff's reputation as a result of the article. However, at deposition, three of the affiants testified that they did not know plaintiff before the article was published and either did not know his reputation in the community or knew him to be of good reputation both before and after the publication. Another testified that she knew the article was in error at the time she read it. She also was unaware of Pfannenstiel's *1501 reputation in the community. Furthermore, she was aware of only one person who had believed the article, and that person did not know who Pfannenstiel was. The fifth affiant's deposition reveals that although he heard others discussing the article, he did not know whether or not they had believed it.
Plaintiff has also presented the expert testimony of Daryl Moen, a journalism professor at the University of Missouri. Professor Moen testified in deposition that Sandra Trail did not ask sufficient questions of Chief Bose to verify the information he had given her. In his opinion, she failed to follow standard journalistic practices. He opined further that this failure constitutes reckless disregard for the truth. Moen defined reckless disregard as "not following basic journalistic practices in cases where you could cause damage to a person's reputation." (Moen deposition at 19).
2. Standards for Summary Judgment
The court is familiar with the standards governing the consideration of a motion for summary judgment. The Federal Rules of Civil Procedure provide that summary judgment is appropriate when the documentary evidence filed with the motion "show[s] 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." Fed.R.Civ.P. 56(c). A principal purpose "of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses. ..." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). The court's inquiry is to determine "whether there is the need for a trial whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986).
The burden at the summary judgment stage is similar to the burden of proof at trial. The court must enter summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. at 2552. The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact on its claim(s). Rule 56, however, imposes no requirement on the moving party to "support its motion with affidavits or other similar materials negating the opponent's claim." Id. at 323, 106 S.Ct. at 2553 (emphasis in original). Once the moving party has properly supported its motion for summary judgment, the nonmoving party may not rest upon mere allegations or denials, but must set forth specific facts showing a genuine issue for trial, relying upon the types of evidentiary materials contemplated by Rule 56. Fed.R.Civ.P. 56(e). Each party must demonstrate to the court the existence of contested facts on each claim it will have to prove at trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. The court reviews the evidence on summary judgment under the substantive law and based on the evidentiary burden the party will face at trial on the particular claim. Anderson, 477 U.S. at 254, 106 S.Ct. at 2513.
3. Defamation
"The tort of defamation includes both libel and slander. The elements of the wrong include [1] false and defamatory words [2] communicated to a third person [3] which result in harm to the reputation of the person defamed. A corporation may be liable for the defamatory utterances of its agent which are made while acting within the scope of his authority." Luttrell v. United Telephone System, Inc., 9 Kan. App. 2d 620, 620-21, 683 P.2d 1292 (1984), aff'd, 236 Kan. 710, 695 P.2d 1279 (1985) (citations omitted).
Kansas no longer recognizes a cause of action for defamation per se. Rather, every claim for defamation requires proof of damage to the plaintiff's reputation. Gobin v. Globe Publ. Co., 232 Kan. 1, 6, 649 P.2d 1239 (1982). "[D]amage to one's reputation is the essence and gravamen of an action for defamation. Unless injury to reputation is shown, plaintiff has not established a valid claim for defamation, either by libel or slander, under our law." Id.
*1502 Plaintiff has claimed damage to his reputation, but there is no evidence to support the claim. Plaintiff's employment was not adversely affected. His social relationships have continued unharmed. Since this incident, plaintiff has started a new business, and there is no evidence that the erroneous newspaper article has cost him any customers.
Plaintiff named several witnesses who would testify as to the damage to his reputation. However, the depositions given by these witnesses provide no evidence to support plaintiff's claim. As stated above, nearly all these witnesses testified that plaintiff's reputation was not harmed and that they did not believe the article when they read it. One witness was confused initially, but had the matter cleared up for her in short order. The last witness, plaintiff's business partner, could testify only in a conclusory fashion that plaintiff's reputation was harmed, but could provide no factual support for his opinion. He could name only two individuals he had heard discussing the article. Both of these individuals testified in deposition that they did not believe the article when they read it, and their opinions of plaintiff were not adversely affected by the article. The testimony of these witnesses, then, does not defeat the motions for summary judgment.
In his response brief, plaintiff provided the affidavits of several other witnesses which state that the affiants believed the article when they read it. These affidavits stated that the affiants never saw a correction and/or that they believed plaintiff's reputation was substantially harmed. However, when the affiants were deposed, it became clear that they had no personal knowledge of plaintiff's reputation. Indeed, most did not know who plaintiff was at the time the article was published. The others did not believe the article when they read it. None had ever heard anything negative about plaintiff due to the article. None had any personal knowledge of damage to plaintiff's reputation. Federal Rule of Evidence 56(e) provides in part that "affidavits shall be made on personal knowledge." Because these affidavits are not based on personal knowledge, but rather on speculation, they do not create a genuine issue of material fact as to damage to plaintiff's reputation.
In response to defendants' motion for summary judgment, plaintiff for the first time contended that the City of Osborne and Chief Bose were negligent in failing to supply defendant Trail with copy of the written police report. Leaving aside the untimeliness of this claim, the court is unaware of any cause of action under Kansas law for negligent failure to provide written verification of information, although the court would agree that providing written reports would be a sound precautionary police practice to avoid mistakes such as that which occurred here.
For the foregoing reasons, the court grants the defendants' motions for summary judgment as to plaintiff's defamation claim.
4. Invasion of Privacy/False Light Publicity
Kansas recognizes an invasion of privacy action for false light publicity. Rinsley v. Frydman, 221 Kan. 297, 303, 559 P.2d 334 (1977). Unlike defamation, which addresses damage to a plaintiff's reputation, the false light claim is based on a plaintiff's mental distress. Rinsley v. Brandt, 700 F.2d 1304, 1307 (10th Cir.1983) (citing Time, Inc. v. Hill, 385 U.S. 374, 87 S. Ct. 534, 17 L. Ed. 2d 456 (1967)). Kansas has adopted Restatement (Second) of Torts § 652, which outlines the types of invasion of privacy, including false light publicity. Froelich v. Adair, 213 Kan. 357, 358, 516 P.2d 993 (1973). In Rinsley v. Frydman, 221 Kan. at 303, 559 P.2d 334, the Kansas Supreme Court cited to language from the draft version of § 652E. In final form, § 652E states:
One who gives publicity to a matter concerning another that places the other before the public in a false light is subject to liability to the other for invasion of privacy, if
(a) the false light in which the other was placed would be highly offensive to a reasonable person, and
(b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.
*1503 The Tenth Circuit has held that the Kansas courts would adopt the final version of Restatement § 652E. Rinsley, 700 F.2d 1304.
There remains a question, however, whether actual malice is an element of a false light publicity claim brought by a plaintiff who is a private individual, as opposed to a public figure. A caveat to § 652E states:
The Institute takes no position on whether there are any circumstances under which recovery can be obtained under this Section if the actor did not know of or act with reckless disregard as to the falsity of the matter publicized and the false light in which the other would be placed but was negligent in regard to these matters.
The caveat was put in place because of the unsettled state of First Amendment law on this issue. The Supreme Court held in Time, Inc. v. Hill, 385 U.S. 374, 87 S. Ct. 534, 17 L. Ed. 2d 456 (1967), that the First Amendment requires an actual malice element in all false light publicity actions in which the publication deals with a matter of public concern.[4] However, the ruling of Hill was called into doubt when the Supreme Court, in Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974), departed from precedent and decided that a private individual alleging defamation against a media defendant need not prove actual malice to satisfy the First Amendment. Since Gertz, the Supreme Court has declined opportunities to revisit the ruling in Hill. Cantrell v. Forest City Publishing Co., 419 U.S. 245, 95 S. Ct. 465, 42 L. Ed. 2d 419 (1974); Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 95 S. Ct. 1029, 43 L. Ed. 2d 328 (1975).
The Kansas courts have not expressly considered whether actual malice is always an element in a false light claim. The issue has arisen in cases brought in federal court. In Rinsley v. Brandt, 446 F. Supp. 850 (D.Kan. 1977), Judge Rogers concluded that because the false light cause of action is treated similarly to defamation, the Gertz standard would control, and only public figures need prove actual malice. In Rinsley, the court held the plaintiff was a public figure and, therefore, was required to prove actual malice. Rinsley, 446 F.Supp. at 856-58. Eventually, the statements at issue in Rinsley were found not to be false, and the Tenth Circuit court of Appeals affirmed on that basis. Rinsley v. Brandt, 700 F.2d 1304 (10th Cir.1983). Judge Saffels followed Judge Rogers' conclusion in Tomson v. Stephan, 696 F. Supp. 1407, 1413 (D.Kan.1988).
Other states have addressed this issue and have reached mixed results, although the majority of states have required proof of actual malice. See, e.g., Schifano v. Greene County Greyhound Park, Inc., 624 So. 2d 178, 180 (Ala.1993); Goodrich v. Waterbury Republican-American, Inc., 188 Conn. 107, 448 A.2d 1317, 1330 (1982); Lovgren v. Citizens First National Bank, 126 Ill. 2d 411, 418, 128 Ill. Dec. 542, 534 N.E.2d 987 (1989); Yancey v. Hamilton, 786 S.W.2d 854, 860 (Ky.1989). Some courts have held as a matter of state law that actual malice is always an element of a false light claim. E.g., Colbert v. World Pub. Co., 747 P.2d 286, 291-92 (Okla.1987). Other states have relied on Hill in holding that an actual malice requirement is constitutionally necessary. E.g., Dodrill v. Arkansas Democrat Co., 265 Ark. 628, 590 S.W.2d 840, 845 & n. 9 (1979), cert. denied, 444 U.S. 1076, 100 S. Ct. 1024, 62 L. Ed. 2d 759 (1980). Still other jurisdictions have relied on Gertz and held that a false light plaintiff need only show negligence. Wood v. Hustler Magazine, Inc., 736 F.2d 1084, 1092 (5th Cir.1984), cert. denied, 469 U.S. 1107, 105 S. Ct. 783, 83 L. Ed. 2d 777 (1985); Dresbach v. Doubleday & Co., 518 F. Supp. 1285, 1288 (D.D.C.1981); Russell v. Thomson Newspapers, Inc., 842 P.2d 896 (Utah 1992); Crump v. Beckley Newspapers, Inc., 173 W.Va. 699, 320 S.E.2d 70, 88 (1983).
This court concludes that a private individual must prove actual malice to state a claim for invasion of privacy based on false light publicity where the publication deals with a matter of public concern. The court's reasoning is two-fold. First, the court does not wish to contradict applicable Supreme Court precedent which, although questioned, has never been overturned. See Dodrill, 590 *1504 S.W.2d at 845 & n. 9. Second, the court believes the Kansas courts would join the majority of states that have considered the issue and would require a plaintiff in a case such as this to prove actual malice as a matter of state law.[5] The court relies in large part on the reluctance of the Kansas courts to create causes of action for negligently caused hurt feelings. See Colbert, 747 P.2d at 291-92 (discussing the Oklahoma Supreme Court's similar concerns). The Kansas courts have exhibited great caution in recognizing torts based on damage only to a plaintiff's emotional well-being. See Gobin, 232 Kan. at 7, 649 P.2d 1239 (holding that damages for mental anguish in defamation claim are "parasitic" in that they are available only if the plaintiff can prove damage to his/her reputation); Grube v. Union Pacific R. Co., 256 Kan. 519, 522, 886 P.2d 845 (1994) (plaintiff can recover for negligent infliction of emotional distress only if he/she can prove some physical impact/injury). Furthermore, absent an actual malice element, the false light claim becomes nothing more than defamation, but without proof of damage to the plaintiff's reputation. See Arrington v. New York Times Company, 55 N.Y.2d 433, 449 N.Y.S.2d 941, 434 N.E.2d 1319 (1982), cert. denied, 459 U.S. 1146, 103 S. Ct. 787, 74 L. Ed. 2d 994 (1983) (noting concern that false light action could potentially compromise freedom of the press by "sidestepping the safeguards which restrain the reach of traditional public defamation litigation"). The court believes the Kansas courts would not so undermine the substantive safeguards established in the defamation area.
In this case, the plaintiff alleges both that Bose intentionally, willfully and maliciously gave false information to Trail and that Bose gave Trail correct information, but Trail intentionally, willfully and maliciously reported false information. Plaintiff contends both Bose and Trail acted with reckless disregard for the truth or falsity of the matters reported. There is no evidence to support these contentions. To show reckless disregard, the plaintiff must prove that the defendant "`in fact entertained serious doubts as to the truth of [her] publication' or acted with `a high degree of awareness of probable falsity.'" Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 510, 111 S. Ct. 2419, 2429, 115 L. Ed. 2d 447 (1991) (citations omitted). Proof of mere negligence is not enough. Id. Plaintiff here relies on speculation and irrelevant expert testimony.
As for Chief Bose, the only evidence on record is that he correctly reported that plaintiff's car was stolen. At worst, he used ambiguous language, and there is nothing to suggest he did so intentionally or recklessly. Likewise, there is no evidence in the record to support the contention that Trail intentionally included false information in her article. Plaintiff also accuses Trail of reckless disregard for the truth. However, there is no evidence in the record to support a finding that Trail seriously doubted the truth of what she wrote or that she was highly aware that the information was probably false. In support of his assertion of reckless disregard, plaintiff offers the expert witness testimony of Daryl Moen. Moen testified that Trail had acted in reckless disregard, which he defined as "not following basic journalistic practices in cases where you could cause damage to a person's reputation." This expert testimony is irrelevant to the issue of reckless disregard and would be inadmissible at trial because Moen applied his own definition of the term rather than the appropriate legal standard. Therefore, it does not create a genuine issue of fact as to actual malice.
Because the court has concluded that actual malice is a necessary element of plaintiff's false light publicity claim and the plaintiff has no evidence to establish that element, the defendants are entitled to summary judgment on the invasion of privacy/false light publicity claim.
5. Intentional Infliction of Emotional Distress
Finally, the court addresses plaintiff's claim of intentional infliction of emotional distress, also known as the tort of outrage.
*1505 The cause of action requires proof of the following:
(1) The conduct of defendant must be intentional or in reckless disregard of plaintiff; (2) the conduct must be extreme and outrageous; (3) there must be a causal connection between defendant's conduct and plaintiff's emotional distress; and (4) plaintiffs emotional distress must be extreme and severe.
Anspach v. Tomkins Industries, Inc., 817 F. Supp. 1499, 1506 (D.Kan.1993), aff'd, 51 F.3d 285 (10th Cir.1995) (quoting Roberts v. Saylor, 230 Kan. 289, 292-93, 637 P.2d 1175 (1981)).
There are two threshold requirements for the court to determine as a matter of law:
(1) whether the defendant's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery; and (2) whether the emotional distress suffered by the plaintiff is in such extreme degree the law must intervene because the distress inflicted is so severe that no reasonable person should be expected to endure it.
Id. If reasonable people could differ as to whether the requirements are met, the matter is to be determined by the jury. Taiwo v. Vu, 249 Kan. 585, Syl. ¶ 3, 822 P.2d 1024 (1991). Under the first threshold requirement, liability may be found only in those cases in which the conduct has been so outrageous in character, and so extreme in degree, as to go beyond the bounds of decency, and to be regarded as atrocious and intolerable in a civilized society. Roberts v. Saylor, 230 Kan. at 293, 637 P.2d 1175. Liability does not arise "from mere insults, indignities, threats, annoyances, petty expressions, or other trivialities." Id.
The second threshold requirement is that the plaintiffs emotional distress must be sufficiently severe, genuine and extreme that no reasonable person should be expected to endure it. Id. at 293-94, 637 P.2d 1175. The required threshold is necessarily high to separate meritorious claims from those based on trivialities or hyperbole. Rupp v. Purolator Courier Corp., 790 F. Supp. 1069, 1073 (D.Kan.1992).
In this case, plaintiff has not presented any evidence from which a reasonable jury could determine either threshold has been met. Again, there is no evidence that defendant Trail knew her article was erroneous at the time she wrote it. The court concludes that regardless of whether Trail met the standards of good journalistic practices, her conduct was not so extreme and outrageous as to permit recovery. Hanrahan v. Horn, 232 Kan. 531, 536-37, 657 P.2d 561 (1983). As for Chief Bose, again, there is no evidence to support the claim that he gave incorrect information to Trail, much less that he did so intentionally or recklessly. At worst, he used ambiguous language in describing the theft, and there is no evidence that he did so with any intent to deceive. There is no basis in the evidence to support a conclusion that Bose's conduct was so extreme and outrageous as to go beyond the bounds of decency.
Plaintiff has also failed to present any evidence of the type of emotional distress which permits recovery. Plaintiff has not sought professional attention for either mental problems or physical symptoms attributable to this incident. He has not missed any work. His social relationships are unaltered. In contesting the motion for summary judgment, plaintiff relies solely on Trail's statement in "Anatomy of a Mistake" that plaintiff was "put through needless pain and anxiety." The court does not doubt that plaintiff was unhappy and upset about the mistake in the article, but there is no evidence that he suffered such genuine and extreme emotional distress that no reasonable person would be expected to endure it. On the contrary, this "outrage" claim represents precisely the type of triviality for which summary judgment is appropriate.
Because the court has determined that summary judgment is appropriate based on the matters discussed above, the court need not address the defendants' remaining arguments.
IT IS BY THIS COURT THEREFORE ORDERED that the motions for summary judgment (Doc's 23 and 26) are hereby granted.
*1506 IT IS FURTHER ORDERED that defendant's motion to dismiss (Doc. 21) is moot.
NOTES
[1] Plaintiff has attempted to controvert many of the facts in this case. However, his statements are not responsive to the statements of fact set forth by the defendant and/or are not supported by the deposition testimony and other evidence in the case. See D.Kan. Rule 56.1.
[2] Plaintiff's counsel misidentifies the suspect as Larry Joe Cantrell. (Plaintiff's Memorandum of February 29, 1995, at 5).
[3] Plaintiff originally filed his defamation action in Sedgwick County District Court. Venue was changed to Osborne County, and plaintiff dismissed without prejudice. He then moved to Burlington, Colorado, and filed the instant action in federal court. Defendants suspect the move is a sham, but have not moved for dismissal on that basis, and there is no evidence from which the court could find that defendant did not reside in Colorado at the time he filed this diversity action.
[4] There is no question that investigations of crime are matters of public concern. See Rosanova v. Playboy Enterprises, Inc., 580 F.2d 859, 861 (5th Cir.1978).
[5] The false light cause of action is controversial and has been rejected altogether by some states. See Bryan R. Lasswell, In Defense of False Light: Why False Light Must Remain a Viable Cause of Action, 34 S.Tex.L.Rev. 149, 162 (1993) and cases cited therein. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511186/ | 150 N.J. 575 (1997)
696 A.2d 709
SOUTH JERSEY CATHOLIC SCHOOL TEACHERS ORGANIZATION, AN UNINCORPORATED LABOR ORGANIZATION, PLAINTIFF-RESPONDENT,
v.
ST. TERESA OF THE INFANT JESUS CHURCH ELEMENTARY SCHOOL, SAINT BARTHOLOMEW CHURCH ELEMENTARY SCHOOL, THE CHURCH OF SAINT JUDE ELEMENTARY SCHOOL, SAINT JOSEPH PROCATHEDRAL CHURCH ELEMENTARY SCHOOL, SAINT JOSEPH CHURCH ELEMENTARY SCHOOL AND SACRED HEART CHURCH ELEMENTARY SCHOOL, DEFENDANTS-APPELLANTS.
The Supreme Court of New Jersey.
Argued March 18, 1997.
Decided July 24, 1997.
*580 James A. Serritella, a member of the Illinois bar, and Martin F. McKernan, Jr., argued the cause for appellants (McKernan, McKernan & Godino, attorneys; Mr. Serritella, Mr. McKernan, James J. Godino, Jr., Francis J. Monari, Christopher G. Martucci, James C. Geoly, a member of the Illinois bar and W. Cole Durham, Jr., a member of the Utah bar, of counsel and on the briefs).
Benjamin Eisner argued the cause for respondent (Spear, Wilderman, Borish, Endy, Spear and Runckel, attorneys).
*581 James Katz argued the cause for amicus curiae, American Civil Liberties Union of New Jersey (Tomar, Simonoff, Adourian, O'Brien, Kaplan, Jacoby & Graziano, attorneys).
The opinion of the Court was delivered by COLEMAN, J.
The issue raised in this appeal is whether lay teachers in church-operated elementary schools have an enforceable state constitutional right to unionize and to engage in collective bargaining respecting secular terms and conditions of employment without violating the Religion Clauses of the First Amendment of the United States Constitution. Plaintiff asserts that it was elected the majority representative of the lay teachers employed by defendants. The trial court refused to compel defendants to recognize and to bargain with plaintiff as the labor representative of the lay teachers on the ground that to do so would violate the Free Exercise and Establishment Clauses of the First Amendment. The Appellate Division reversed in a published opinion. 290 N.J. Super. 359, 675 A.2d 1155 (1996). We granted defendants' petition for certification. 146 N.J. 567, 683 A.2d 1162 (1996).
We now affirm and hold that the lay elementary-school teachers have a state constitutional right to unionize and to engage in collective bargaining. The scope of that negotiation, however, is limited by the Religion Clauses of the First Amendment to wages, certain benefit plans, and any other secular terms or conditions of employment similar to those that are currently negotiable under an existing agreement with high school lay teachers employed by the Diocese of Camden.
I
Defendants are elementary schools operated by the Catholic Diocese of Camden. Each of the church-operated schools employs a sizeable number of lay teachers. Plaintiff, a lay teacher organization, *582 asserts that it was elected by a majority of the lay teachers employed in each defendant school. When plaintiff sought to have defendants recognize it as the collective-bargaining representative of the lay teachers, a Board of Pastors, acting on behalf of defendants, informed plaintiff that it would be recognized only if it signed a document entitled "Minimum Standards for Organizations Wishing to Represent Lay Teachers in a Parish or Regional Catholic Elementary School in the Diocese of Camden" ("Minimum Standards"). Plaintiff was informed that the Minimum Standards were not negotiable. That document, among other things, vests in the Board of Pastors complete and final authority to dictate the outcome of any dispute; it also prohibits plaintiff from assessing dues or collecting agency fees from non-union members.
Plaintiff refused to accept the Minimum Standards, claiming that to do so would have amounted to bargaining away a number of lay teacher rights prior to certification of the union and before the collective-bargaining process had commenced. Defendants accordingly refused to recognize plaintiff or to bargain collectively. Plaintiff then instituted the present litigation to compel defendants to recognize it as the collective-bargaining representative of the lay teachers and to compel defendants to engage in collective bargaining respecting the terms and conditions of employment Plaintiff maintained that the lay teachers are private employees and sought relief based on Article I, Paragraph 19 of the New Jersey Constitution. It provides:
Persons in private employment shall have the right to organize and bargain collectively. Persons in public employment shall have the right to organize, present to and make known to the State, or any of its political subdivisions or agencies, their grievances and proposals through representatives of their own choosing.
[N.J. Const. art. I, ¶ 19.]
The trial court granted summary judgment dismissing the complaint. It concluded that granting the relief sought by plaintiff would interfere with defendants' free exercise of religion and *583 would involve an excessive entanglement between the State and the Catholic Church.
The Appellate Division found that the present case involves only a Free Exercise Clause claim rather than an Establishment Clause claim or both. Relying on the right to organize and bargain collectively established by the New Jersey Constitution, the court concluded that there is a compelling state interest in permitting plaintiff to organize and to engage in collective bargaining that outweighs the claimed burden on defendants' free-exercise rights. That compelling state interest was identified as "the preservation of industrial peace and a sound economic order." 290 N.J. Super. at 389, 675 A.2d 1155 (internal quotation marks omitted). It also found that distinctions between the levels of religious indoctrination that occur in elementary and high schools are not controlling in the present case given that the Diocese of Camden has bargained collectively over secular terms and conditions of employment in the high schools for a number of years.
II
Defendants argue that the decision in NLRB v. Catholic Bishop, 440 U.S. 490, 99 S.Ct. 1313, 59 L.Ed.2d 533 (1979), deprived the state courts of subject matter jurisdiction and dictates that defendants cannot be compelled to recognize the union and to engage in collective bargaining without violating the Religion Clauses because the controversy involves a labor and management dispute that is controlled by the National Labor Relations Act ("NLRA"), 29 U.S.C.A. §§ 151-169. States are preempted from acting on matters subject to the NLRA unless the National Labor Relations Board ("NLRB") has declined, or would decline, to assert jurisdiction. Lay Faculty Ass'n v. Roman Catholic Archdiocese, 122 N.J. Super. 260, 269, 300 A.2d 173 (App.Div. 1973). Although the United States Supreme Court in Catholic Bishop concluded that Congress did not intend that cases addressing whether lay teachers in church-operated schools have a right to unionize and to engage in collective bargaining be covered *584 by the NLRA, Catholic Bishop, supra, 440 U.S. at 504-07, 99 S.Ct. at 1320-22, 59 L.Ed.2d at 543-45, defendants nonetheless maintain that the Appellate Division should be reversed for failing to follow the Supreme Court's decision in Catholic Bishop.
Plaintiff and the American Civil Liberties Union ("ACLU"), appearing as amicus curiae, respond that defendants have misinterpreted Catholic Bishop. Plaintiff and the ACLU maintain that (1) our courts may exercise subject matter jurisdiction over the present case; and (2) defendants may be compelled to recognize the union and to bargain collectively. The ACLU also asserts that Catholic Bishop "justifies the application of [Article I, Paragraph 19]" in the present case.
Defendants' reliance on Catholic Bishop is misplaced. That case was decided strictly on statutory interpretation grounds. The Court ruled that in the absence of "an `affirmative intention of the Congress clearly expressed'" that teachers in church-operated schools should be covered by the NLRA, the NLRB did not have jurisdiction to "require church-operated schools to grant recognition to unions as bargaining agents for their teachers." Id. at 506, 99 S.Ct. at 1322, 59 L.Ed.2d at 545. The Court avoided the constitutional claims that were asserted. Even if the issues under the Religion Clauses had been reached, the present case is distinguishable from a case involving the NLRA. The regulatory scheme under the NLRA requires the NLRB to act as monitor-referee, thus causing much more entanglement of government with religion than does Article I, Paragraph 19 of the New Jersey Constitution. The NLRB maintains ongoing regulatory authority over parties engaged in collective bargaining, exercising investigatory, prosecutorial, and adjudicatory authority. 29 U.S.C.A. §§ 158-161. In the present case, there is no "leviathan-like governmental regulatory board" to monitor the parties' negotiations. 290 N.J. Super. at 391, 675 A.2d 1155.
When, as in the present case, the subject matter of a case falls outside the scope of the NLRA, "state tribunals are free to exercise jurisdiction over the subject matter." Cooper v. Nutley *585 Sun Printing Co., 36 N.J. 189, 194, 175 A.2d 639 (1961); see also Christ the King Reg'l High School v. Culvert, 815 F.2d 219, 222-23 (2d Cir.1987). Article I, Paragraph 19 was intended to protect workers who are not covered by the NLRA. George Harms Constr. Co. v. New Jersey Turnpike Auth., 137 N.J. 8, 28, 644 A.2d 76 (1994); Richard A. Goldberg & Robert F. Williams, Farmworkers' Organizational and Collective Bargaining Rights in New Jersey: Implementing Self-Executing State Constitutional Rights, 18 Rutgers L.J. 729, 742 (1987). The right of private employees to organize and to bargain collectively is so important that it has been elevated to constitutional status and is regarded as a fundamental right. George Harms, supra, 137 N.J. at 28-29, 644 A.2d 76; Lullo v. International Ass'n of Fire Fighters, Local 1066, 55 N.J. 409, 415, 262 A.2d 681 (1970). In the absence of preemption, we must decide whether enforcement of the fundamental right of the lay teachers to organize and to bargain collectively conflicts with the Religion Clauses.
III
Defendants argue that requiring the Diocese to bargain collectively with plaintiff would inhibit religion and would excessively entangle the State in religious affairs in violation of the Establishment Clause. Plaintiff and the ACLU maintain that such a requirement would not violate the Establishment Clause. As noted earlier, the Appellate Division was not persuaded that the present case implicates the Establishment Clause; the court concluded that only the Free Exercise Clause is at issue. The court reasoned that "`[g]overnment support for religion is an element of every establishment claim, just as a burden or restriction on religion is an element of every free exercise claim.'" 290 N.J. Super. at 379, 675 A.2d 1155 (quoting Douglas Laycock, Towards a General Theory of the Religion Clauses: The Case of Church Labor Relations and the Right to Church Autonomy, 81 Colum. L.Rev. 1373, 1394 (1981)). The Appellate Division stressed that the present case involves "the uniform application of a state *586 constitutional provision," and concluded that the application of Article I, Paragraph 19 to parochial schools does not constitute an establishment of religion. 290 N.J. Super. at 379-80, 675 A.2d 1155.
However, in many instances, "claims under the Establishment Clause and the Free Exercise Clause involve the same considerations and are not easily divided and put into separate pigeon holes." Catholic High School Ass'n of the Archdiocese v. Culvert, 753 F.2d 1161, 1166 (2d Cir.1985). The Religion Clauses of the United States Constitution provide that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." U.S. Const. amend I. The New Jersey Constitution also contains a Religion Clause: "There shall be no establishment of one religious sect in preference to another." N.J. Const. art. I, ¶ 4. Under both constitutions, the State and all instrumentalities of the State are prohibited from showing a preference for one religion over another because to do so would violate the establishment prong of the Religion Clauses. Tudor v. Board of Educ., 14 N.J. 31, 44, 100 A.2d 857 (1953).
Because the First Amendment has been made applicable to the states by the Fourteenth Amendment of the United States Constitution, Cantwell v. Connecticut, 310 U.S. 296, 303, 60 S.Ct. 900, 903, 84 L.Ed. 1213, 1218 (1940), and because our State Religion Clause is literally less pervasive than the First Amendment, our discussions of the Religion Clauses will be limited to the federal provisions. Clayton v. Kervick, 56 N.J. 523, 528, 267 A.2d 503 (1970), vacated on other grounds sub nom. Levine v. Clayton, 403 U.S. 945, 91 S.Ct. 2275, 29 L.Ed.2d 854 (1971). As the federal jurisprudence concerning the Religion Clauses now stands, there is no need to consider whether our State Constitution affords greater religious protection than that afforded by the First Amendment.
Half a century after the majority, concurring, and dissenting opinions were issued in Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504, 91 L.Ed. 711 (1947), the debate continues over the *587 dimensions of the "wall of separation" between church and state that the framers of the First Amendment Religion Clauses intended to erect. The present case perpetuates that old debate and raises the additional issue whether the dispute between plaintiff and defendants should be analyzed under the Establishment Clause, the Free Exercise Clause, or both. A major crack occurred in the "wall of separation" on June 23, 1997, when the United States Supreme Court decided Agostini v. Felton, ___ U.S. ___, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997). The Court overruled Aguilar v. Felton, 473 U.S. 402, 105 S.Ct. 3232, 87 L.Ed.2d 290 (1985), and held that New York City's program that sent public school teachers into parochial schools to provide remedial education to disadvantaged students pursuant to Title I of the Elementary and Secondary Education Act of 1965, 20 U.S.C.A. §§ 6301-6514, did not involve an excessive entanglement of church and state and therefore was not violative of the Establishment Clause. Agostini, supra, ___ U.S. at ___-___, 117 S.Ct. at 2015-17, 138 L.Ed.2d at 420-22.
There are cases in which the Establishment and Free Exercise Clauses should be analyzed jointly because "there has been some blurring of sharply honed differentiations" between those clauses. Catholic Bishop v. NLRB, 559 F.2d 1112, 1131 (7th Cir.1977), aff'd on other grounds, 440 U.S. 490, 99 S.Ct. 1313, 59 L.Ed.2d 533 (1979). Excessive entanglement of government with religion may be viewed both as government's sponsorship of religion and as its interference with the free exercise of religion. It must also be considered as a factor separate and apart from the effect of governmental action. Agostini, supra, ___ U.S. at ___-___, 117 S.Ct. at 2014-15, 138 L.Ed.2d at 419-20. As will be seen later, it is excessive entanglement that burdens the free exercise of religion and may, under certain circumstances trigger application of the compelling state interest standard under a Free Exercise Clause analysis. For those reasons we will analyze the present case under both of the Religion Clauses. Inquiries under both clauses are extremely fact sensitive.
*588 IV
First, we consider the claims under the Establishment Clause. In Everson, supra, 330 U.S. 1, 67 S.Ct. 504, 91 L.Ed. 711, Justice Black, in his opinion for the majority of the Court, explained the meaning of the Establishment Clause:
The "establishment of religion" clause of the First Amendment means at least this: Neither a state nor the Federal Government can set up a church. Neither can pass laws which aid one religion, aid all religions, or prefer one religion over another.
........
That Amendment requires the state to be a neutral in its relations with groups of religious believers and non-believers.
[Id. at 15, 18, 67 S.Ct. at 511, 513, 91 L.Ed. at 723, 724-25.]
The standard for conducting an Establishment Clause analysis is a three-pronged test that was articulated in Lemon v. Kurtzman, 403 U.S. 602, 612-13, 91 S.Ct. 2105, 2111, 29 L.Ed.2d 745, 755 (1971). Those elements are: "First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion; finally, the statute must not foster `an excessive government entanglement with religion.'" Ibid. (citations omitted); see also New Jersey State Bd. of Higher Educ. v. Board of Dirs. of Shelton College, 90 N.J. 470, 487, 448 A.2d 988 (1982).
For purposes of this appeal, the parties concede that Article I, Paragraph 19 of the New Jersey Constitution satisfies the first prong because it has the secular purpose of advancing the economic welfare of private-sector employees by establishing the right of private parties to organize and to bargain collectively. Defendants argue, however, that the second prong is implicated in this case because Article I, Paragraph 19 infringes upon their right to govern their educational process, thereby inhibiting religion. Although standing alone that argument sounds more like a free exercise claim, we will address it under the Establishment Clause.
*589 We are persuaded that the primary effect of that state constitutional provision is not to inhibit religion, but rather to require a private employer to enter into collective bargaining with the elected representative of its employees. See Culvert, supra, 753 F.2d at 1166 (acknowledging that only third prong was in dispute to determine whether state labor relations board could exercise jurisdiction with respect to parochial high schools and their lay teachers); see also Hill-Murray Fed'n of Teachers v. Hill-Murray High School, 487 N.W.2d 857, 863 (Minn. 1992) (stating that there was "no dispute that only the third prong is potentially implicated" by applying that state's labor relations act to the respondent high school's labor relations).
The Diocese's past history of collective bargaining with lay high-school teachers strongly suggests that bargaining over some secular terms and conditions of employment can be achieved without either advancing or inhibiting religion. Since 1984, defendants and plaintiff have negotiated a series of collective bargaining agreements concerning the lay high-school teachers employed by the Diocese of Camden. Significant provisions of the most recent agreement include:
A. The Organization is hereby recognized by the Diocese as the sole and exclusive collective bargaining agent for the following lay employees at diocesan sponsored secondary schools:
1. All full-time classroom teachers;
2. All full-time guidance counselors;
3. All full-time nurses and librarians;
4. All full-time special education teachers within the diocese;
........
Excluding all others including:
1. All principals, all vice principals appointed by the Bishop of the Diocese, and all deans of students.
........
B. The subjects covered by this Agreement are wages, benefits and other terms and conditions of employment.
C. Excluded from the scope of negotiations are the following:
1. Decisions involving educational policies and/or ecclesiastical considerations involving religious-moral qualifications.
*590 2. The administrator's right to assign, supervise, discipline and demand responsible teacher accountability in all curricular and extra curricular areas.
3. The school ratio.
........
F.... [N]othing in the agreement shall be considered as interfering in any way with the function and duties of the Diocese insofar as they are canonical or religious.
* * * * * * * *
I. The Organization recognizes the sole right and duty of the Bishop of the Diocese functioning through the Diocese to see that the schools are operated in accordance with the philosophy of Catholic education, the doctrine, the teachings, the laws and norms of the Catholic Church.
* * * * * * * *
K. The right to hire, suspend, discharge or otherwise discipline a teacher for violation of such rules or for other proper and just cause is reserved to the Diocese.
L. The Diocese retains the sole right to operate the school system and nothing shall be deemed to limit or restrict it in any way in the exercise of all its functions in management operations. This includes the right to make such rules relating to its operation as it shall deem advisable providing they are not inconsistent with the terms of the agreement.
Article XI of the agreement outlines the benefits referred to in Article I, Paragraph B. Those benefits include medical insurance, dental insurance, a prescription drug plan, life insurance, and other common benefits. The medical benefits are further described in a plan summary and are limited to individual and family coverage. No litigation has arisen out of the agreements between the lay high-school teachers and the Diocese since the first agreement was executed in 1984.
Indeed, the agreement between the Diocese and the elected representative for the lay high-school teachers preserves the Bishop's exclusive right to structure the schools and their philosophies. Thus, bargaining collectively over similar secular terms and conditions of employment for lay elementary-school teachers would not inhibit defendants' religion by interfering with issues of structure and indoctrination.
The significant issue is whether requiring collective bargaining will involve or create excessive entanglement between the State *591 and religion. When deciding whether the excessive governmental entanglement with religion prong has or will be violated, it must be remembered that such a determination properly
"rests upon the premise that both religion and government can best work to achieve their lofty aims if each is left free from the other within its respective sphere." People of Illinois ex rel. McCollum v. Board of Educ., 333 U.S. 203, 212, 68 S.Ct. 461, 465, 92 L.Ed. 649, 659 (1948). This prong most closely connects the Lemon test to Jefferson's notion of a "wall of separation" between church and state. See Reynolds v. United States, 98 U.S. 145, 164, 25 L.Ed. 244, 249 (1878) (quoting reply from Thomas Jefferson to the Danbury Baptist Association, Jan. 1, 1802). The Supreme Court has stated, "Some limited and incidental entanglement between church and state authority is inevitable in a complex modern society, ... but the concept of a `wall' of separation is a useful signpost." Larkin v. Grendel's Den, Inc., 459 U.S. 116, 123, 103 S.Ct. 505, 510, 74 L.Ed.2d 297, 305 (1982).
[Ran-Dav's County Kosher, Inc. v. State, 129 N.J. 141, 154, 608 A.2d 1353 (1992).]
Although the "wall of separation" is a useful signpost, the Lemon Court recognized that the prohibition of the state's entanglement in religion does not mean an absolute separation between Church and State. Lemon proscribes only "`excessive government entanglement with religion,'" Lemon, supra, 403 U.S. at 613, 91 S.Ct. at 2111, 29 L.Ed.2d at 755; it does not erect an impenetrable wall of separation. The Court reaffirmed that notion recently when it stated that "[n]ot all entanglements, of course, have the effect of advancing or inhibiting religion. Interaction between church and state is inevitable, and we have always tolerated some level of involvement between the two. Entanglement must be `excessive' before it runs afoul of the Establishment Clause." Agostini, supra, ___ U.S. at ___, 117 S.Ct. at 2015, 138 L.Ed.2d at 420 (citation omitted).
We are aware that generally, "church-related elementary and secondary schools have a significant religious mission[,] and ... a substantial portion of their activities is religiously oriented." Lemon, supra, 403 U.S. at 613, 91 S.Ct. at 2111, 29 L.Ed.2d at 756. In addition, "[t]he various characteristics of the schools make them a powerful vehicle for transmitting the Catholic faith to the next generation. This process of inculcating religious doctrine is, of course, enhanced by the impressionable age of the pupils, in *592 primary schools particularly." Id. at 616, 91 S.Ct. at 2113, 29 L.Ed.2d at 757 (internal quotation marks omitted).
But the agreement between the high schools and their lay teachers demonstrates that there are some secular terms such as wages and benefit plans that the Diocese can negotiate while preserving its complete and final authority over religious matters. In that context, the distinction, in terms of impressionability, between high school students and elementary school students is not constitutionally significant.
By limiting the scope of collective bargaining to secular issues such as wages and benefit plans, neutral criteria are used to insure that religion is neither advanced nor inhibited. We also perceive that the extent of the State's involvement would be minimal at most. Only excessive entanglement is proscribed and no continued state surveillance is anticipated in the present case. Id. at 619, 91 S.Ct. at 2114, 29 L.Ed.2d at 759-60; Resnick v. East Brunswick Township Bd. of Educ., 77 N.J. 88, 115-16, 389 A.2d 944 (1978). A policy under which continual entanglement between the government and religion can be anticipated would "verge on government sponsorship of religion," Resnick, supra, 77 N.J. at 115, 389 A.2d 944, and would therefore be violative of the Establishment Clause. Compelling collective bargaining over such secular terms as wages and benefits pursuant to Article I, Paragraph 19 of the New Jersey Constitution "does not include the potential for the state [either] to mandate religious beliefs []or ... [to] force the parties to agree to specific terms." Hill-Murray, supra, 487 N.W.2d at 864. Moreover, "[i]t is a fundamental tenet of the regulation of collective bargaining that government brings private parties to the bargaining table and then leaves them alone to work through their problems." Culvert, supra, 753 F.2d at 1167.
In the present case, the State would require only that the Diocese recognize the lay teachers' right to bargain collectively over wages, benefits, and any other terms and conditions required by the agreement with the lay high-school teachers. The State would not force the Diocese to negotiate terms that would affect *593 religious matters. The State would not dictate which additional terms must be negotiated, nor would it decide the specific terms of the parties' ultimate agreement. Viewed in that limited context, we are satisfied that this case does not involve the type of "comprehensive, discriminating, and continuing state surveillance," required, for instance, by the statute in Lemon that provided for state financial aid to nonpublic elementary schools for only secular subjects. Lemon, supra, 403 U.S. at 619, 91 S.Ct. at 2114, 29 L.Ed.2d at 759. Thus, we hold that requiring defendant to bargain collectively with plaintiff over the same terms and conditions as are negotiable under the high school agreement does not violate the Establishment Clause.
V
We now turn to defendants' claim that requiring them to bargain collectively with the lay teachers violates the Free Exercise Clause.[1] Defendants seek a religiously based exemption from our state constitutional requirements. They argue that mandating collective bargaining in catholic parish schools would threaten the autonomy of church bodies and would infringe impermissibly upon the relationship with the ministerial employees. Plaintiff and the ACLU disagree.
Unlike an Establishment Clause violation, an infringement of the Free Exercise Clause is based on coercion. School Dist. v. Schempp, 374 U.S. 203, 223, 83 S.Ct. 1560, 1572, 10 L.Ed.2d 844, 858 (1963). In the present case, defendants maintain that they are being forced to recognize the union and to engage in collective bargaining. The purpose of the Free Exercise Clause "is to secure religious liberty in the individual by prohibiting any invasions thereof by civil authority." Ibid. Like the rights protected by the Establishment Clause, free exercise rights are not absolute. *594 "[R]eligious institutions do not enjoy an absolute immunity from worldly burdens." Market St. Mission v. Bureau of Rooming and Boarding House Standards, 110 N.J. 335, 340, 541 A.2d 668 (1988); see also Elmora Hebrew Ctr., Inc. v. Fishman, 125 N.J. 404, 413-14, 593 A.2d 725 (1991).
Even when governmental action has a coercive effect on the free exercise of religion, it must be determined whether the impact is on beliefs or conduct. The Free Exercise Clause embraces both the "freedom to believe and freedom to act. The first is absolute but, in the nature of things, the second cannot be. Conduct remains subject to regulation for the protection of society." Cantwell, supra, 310 U.S. at 303-04, 60 S.Ct. at 903, 84 L.Ed. at 1218 (footnote omitted); see also Bowen v. Roy, 476 U.S. 693, 699, 106 S.Ct. 2147, 2152, 90 L.Ed.2d 735, 744 (1986); Reynolds v. United States, 98 U.S. 145, 166, 25 L.Ed. 244, 250 (1878).
To determine whether the government has coercively interfered with a religious belief, or has impermissibly burdened a religious practice, the so-called Sherbert/Yoder test was established. That test was subsequently modified by case law and the Congress of the United States. We generally agree with the Appellate Division's analysis of that evolving modern standard:
In Sherbert v. Verner, 374 U.S. 398, 403, 83 S.Ct. 1790, 1793, 10 L.Ed.2d 965, 970 (1963), the Court held that any incidental burden on the free exercise of religion may be justified only by a compelling state interest in the regulation of a subject that is within the State's constitutional power to regulate. "[I]n this highly sensitive constitutional area, `[o]nly the gravest abuses, endangering paramount interests, give occasion for permissible limitation.'" 374 U.S. at 406, 83 S.Ct. at 1795, 10 L.Ed.2d at 972 (quoting Thomas v. Collins, 323 U.S. 516, 530, 65 S.Ct. 315, 323, 89 L.Ed. 430, 440 (1945)). In Wisconsin v. Yoder, 406 U.S. 205, 92 S.Ct. 1526, 32 L.Ed.2d 15 (1972), the Court reiterated this test, and added:
But to agree that religiously grounded conduct must often be subject to the broad police power of the State is not to deny that there are areas of conduct protected by the Free Exercise Clause of the First Amendment and thus beyond the power of the State to control, even under regulations of general applicability....
*595 A regulation neutral on its face may, in its application, nonetheless offend the constitutional requirement for government neutrality if it unduly burdens the free exercise of religion.
[406 U.S. at 220, 92 S.Ct. at 1536, 32 L.Ed.2d at 28.]
When faced with such a claim, we must closely examine the interests the State seeks to promote and the impediments to those objectives that would flow from recognizing an exemption from a generally applicable law. Yoder, supra, 406 U.S. at 221, 92 S.Ct. at 1536, 32 L.Ed.2d at 28. The Sherbert/Yoder test is at bottom a balancing test requiring consideration of whether: (1) the claims presented were religious in nature and not secular; (2) the state action burdened the religious exercise; and (3) the state interest was sufficiently compelling to override the constitutional right of free exercise of religion. Culvert, supra, 753 F.2d at 1169.
In Employment Div. v. Smith, 494 U.S. 872, 885, 110 S.Ct. 1595, 1603, 108 L.Ed.2d 876, 889 (1990), the Court discarded the Sherbert/Yoder approach to free exercise challenges. See Diaz v. Collins, 872 F. Supp. 353 (E.D.Tex. 1994) (recognizing abrogation of Yoder). In its place, the Court held that a generally applicable and otherwise valid regulatory law which is not specifically intended to regulate religious conduct or belief and which incidentally burdens the free exercise of religion does not violate the Free Exercise Clause of the First Amendment. 494 U.S. at 878, 110 S.Ct. at 1599-1600, 108 L.Ed.2d at 885. The Court retained the compelling interest test for instances where the regulatory law impacts the Free Exercise Clause in conjunction with another constitutional protection, such as freedom of speech and of the press, or the right of parents to direct the education of their children. 494 U.S. at 881-82, 110 S.Ct. at 1601-02, 108 L.Ed.2d at 887-88.
In response to the Smith decision, the Religious Freedom Restoration Act (RFRA), 42 U.S.C.A. § 2000bb, was adopted in November 1993. Its stated purpose was to restore the compelling interest test set forth in Sherbert and Yoder, and to guarantee its application in all cases where free exercise was substantially burdened by otherwise neutral laws. 42 U.S.C.A. § 2000bb(a) and (b). RFRA further provides in pertinent part:
(a) In general. Government shall not substantially burden a person's exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b) of this section.
(b) Exception. Government may substantially burden a person's exercise of religion only if it demonstrates that application of the burden to the person
(1) is in furtherance of a compelling governmental interest; and
(2) is the least restrictive means of furthering that compelling governmental interest.
[42 U.S.C.A. § 2000bb-1.]
RFRA is applicable to all federal and state law, whether statutory or otherwise, and whether adopted before or after the enactment of the Act. 42 U.S.C.A. § 2000b-3(a).
[290 N.J. Super. at 380-81, 675 A.2d 1155.]
*596 Although cases from other jurisdictions have highlighted some confusion that has existed, before and after the enactment of RFRA, regarding "incidental" and "substantial" burdens on the free exercise of religion, distilled to essentials, the RFRA test permits a state to burden the free exercise of religion if the burden imposed is in furtherance of a compelling state interest and represents the least restrictive means of furthering that compelling state interest. The distinction between "incidental" and "substantial" burdens on the right to free exercise is not dispositive. The Appellate Division concluded that "[r]egardless of whether the burden is substantial or incidental, there still must be a determination of whether the State's interest is compelling." Id. at 383, 675 A.2d 1155.
The Appellate Division rejected a constitutional challenge to RFRA and decided the case based on that standard. The court concluded that (1) Article I, Paragraph 19 is a neutral, generally applicable civil law; (2) a compelling state interest was advanced by that law; and (3) the least restrictive means of furthering the State's interest were used by limiting the issues subject to collective bargaining.
A few days ago the United States Supreme Court held that RFRA is unconstitutional. City of Boerne v. Flores, ___ U.S. ___, 117 S.Ct. 2157, 138 L.Ed.2d 624 (1997). The Court reasoned that RFRA is a substantive law and under the Enforcement Clause of the Fourteenth Amendment, U.S. Const. amend XIV, § 5, Congress has the power to pass only remedial or preventative legislation. Flores, supra, ___ U.S. at ___-___, 117 S.Ct. at 2171-72, 138 L.Ed.2d at 647-49.
When overturning RFRA, the Court made some observations that are instructive on whether the Smith standard has been reestablished:
Requiring a State to demonstrate a compelling interest and show that it has adopted the least restrictive means of achieving that interest is the most demanding test known to constitutional law. If "`compelling interest' really means what it says . .. many laws will not meet the test.... [The test] would open the prospect of constitutionally required religious exemptions from civic obligations of almost *597 every conceivable kind." [Smith, supra, 494 U.S.,] at 888, 110 S.Ct., at 1605. Laws valid under Smith would fall under RFRA without regard to whether they had the object of stifling or punishing free exercise. We make these observations not to reargue the position of the majority in Smith but to illustrate the substantive alteration of its holding attempted by RFRA. Even assuming RFRA would be interpreted in effect to mandate some lesser test, say one equivalent to intermediate scrutiny, the statute nevertheless would require searching judicial scrutiny of state law with the attendant likelihood of invalidation. This is a considerable congressional intrusion into the States' traditional prerogatives and general authority to regulate for the health and welfare of their citizens.
The substantial costs RFRA exacts, both in practical terms of imposing a heavy litigation burden on the States and in terms of curtailing their traditional general regulatory power, far exceed any pattern or practice of unconstitutional conduct under the Free Exercise Clause as interpreted in Smith. Simply put, RFRA is not designed to identify and counteract state laws likely to be unconstitutional because of their treatment of religion.... RFRA's substantial burden test ... is not even a discriminatory effects or disparate impact test. It is a reality of the modern regulatory state that numerous state laws, such as the zoning regulations at issue here, impose a substantial burden on a large class of individuals. When the exercise of religion has been burdened in an incidental way by a law of general application, it does not follow that the persons affected have been burdened any more than other citizens, let alone burdened because of their religious beliefs. In addition, the Act imposes in every case a least restrictive means requirement a requirement that was not used in the pre-Smith jurisprudence RFRA purported to codify which also indicates that the legislation is broader than is appropriate if the goal is to prevent and remedy constitutional violations.
[Flores, supra, ___ U.S. at ___, 117 S.Ct. at 2171, 138 L.Ed.2d at 647.]
We will, therefore, apply the Smith standard in deciding whether the Free Exercise Clause has been violated. Under Smith the compelling state interest requirement does not apply unless the regulatory law impacts the Free Exercise Clause and some other constitutional protection, such as freedom of speech or freedom of the press. Nor does the Smith standard apply the Sherbert balancing test, which asks whether the law at issue substantially burdens a religious practice and, if so, whether the burden is justified by a compelling government interest.
It is beyond dispute that Article I, Paragraph 19 is a generally applicable civil law. It is also neutral in that it is not intended to regulate religious conduct or belief. Instead, it is intended to enhance the economic welfare of private-sector employees. Because the state constitutional provision is neutral and *598 of general application, the fact that it incidentally burdens the free exercise of religion does not violate the Free Exercise Clause. Smith, supra, 494 U.S. at 878-79, 110 S.Ct. at 1600, 108 L.Ed.2d at 885-86.
Defendants have proffered a hybrid argument in their briefs stating that to require them to recognize the union and to engage in collective bargaining would violate both the Free Exercise Clause and their First Amendment right to free association. Id. at 881-82, 110 S.Ct. at 1601-02, 108 L.Ed.2d at 887-88 (holding that neutral, generally applicable law must implicate some other constitutional right in addition to Free Exercise Clause before compelling state interest standard applies). Defendants, however, have not presented any argument in their briefs to support that claim. Issues that are raised but are not supported with arguments are deemed waived. See, e.g., 500 Columbia Turnpike Assocs. v. Haselmann, 275 N.J. Super. 166, 172, 645 A.2d 1210 (App.Div. 1994) (dismissing aspects of cross-appeal that were not supported by any argument in brief); Kerney v. Kerney, 81 N.J. Super. 278, 282, 195 A.2d 476 (App.Div. 1963) (appeal dismissed because appellants' brief contained no argument in support of the grounds raised in their notice of appeal); State v. Plainfield-Union Water Co., 75 N.J. Super. 571, 583, 183 A.2d 684 (App.Div. 1962) (resolving issue raised in notice of appeal, but not advancing any reasoning to support assertion, against appellant), aff'd sub nom. State v. Elizabethtown Water Co., 40 N.J. 280, 191 A.2d 457 (1963).
We have nonetheless considered the merits of the issue and conclude that employers do not have a constitutional right not to associate when employees' right to organize would be jeopardized. Texas & New Orleans R.R. Co. v. Brotherhood of Railway & Steamship Clerks, 281 U.S. 548, 571, 50 S.Ct. 427, 434, 74 L.Ed. 1034, 1046 (1930) (finding provision in Railway Labor Act stating that employees' right to designate representatives without interference, influence, or coercion did not violate employer's right to freedom of association); NLRB v. Field & Sons, Inc., 462 F.2d *599 748, 750 (1st Cir.1972) (finding that employer could not withdraw from multi-employer association and stating that "individual employer's freedom of association must ... be sacrificed"); Fort Wayne Patrolmen's Benevolent Ass'n, Inc. v. City of Fort Wayne, 625 F. Supp. 722, 728 (N.D.Ind. 1986) (finding that freedom of association does not apply to employer-employee relationships); cf. New York State Club Ass'n v. City of New York, 487 U.S. 1, 13-14, 108 S.Ct. 2225, 2234, 101 L.Ed.2d 1, 16 (1988) (holding that generally applicable anti-discrimination law affecting places of public accommodation did not violate club members' First Amendment freedom of association rights); Board of Dirs. of Rotary Int'l v. Rotary Club, 481 U.S. 537, 548-49, 107 S.Ct. 1940, 1947-48, 95 L.Ed.2d 474, 486-87 (1987) (same); Roberts v. United States Jaycees, 468 U.S. 609, 621-23, 104 S.Ct. 3244, 3251-52, 82 L.Ed.2d 462, 474-75 (1984) (same).[2] Furthermore, any infringement on associational rights is amply justified by the State's compelling interest in assuring that private-sector employees' right to unionize and to engage in collective bargaining is implemented.
In addition, defendants claim that both the right to free exercise of religion and the right of parents to control the rearing of their children are at stake. The right of parents to "direct the upbringing and education of [their] children" as enunciated in Pierce v. Society of Sisters, 268 U.S. 510, 534, 45 S.Ct. 571, 573, 69 L.Ed. 1070, 1078 (1925), clearly is not implicated in this case. Allowing lay teachers to unionize does not interfere with any parental decision making authority. We will, nonetheless, conduct the Smith "compelling state interest" analysis required for hybrid *600 claims. Smith, supra, 494 U.S. at 881-82, 110 S.Ct. at 1595, 108 L.Ed.2d at 887.
We are persuaded that the State of New Jersey has a compelling interest in allowing private employees to unionize and to bargain collectively over secular terms and conditions of employment.
We agree with the Appellate Division that
for purposes of ... defendant[s'] facial constitutional challenge on the New Jersey right to organize, we conclude that there is a compelling State interest which outweighs the claimed burden on defendants' free exercise rights. Article I, paragraph 19 is a fundamental State constitutional right guaranteed to private employees. Cooper, supra, 36 N.J. at 197, 175 A.2d 639. This constitutional provision "reaches beyond governmental action. It also protects employees against the acts of individuals who would abridge these rights." Id. at 196, 175 A.2d 639. In addition to the lay teachers' fundamental right guaranteed by the State Constitution is the fact, observed in Culvert, supra, 753 F.2d at 1171, that the State has a compelling interest in the "preservation of industrial peace and a sound economic order." Moreover, defendants' concerns over the infringement on their free exercise rights are alleviated to a great extent by the fact that New Jersey, unlike the NLRB and jurisdictions such as New York and Minnesota, does not have a labor board regulating private employees. Rather, any legal relief sought by plaintiff must come from the courts. The judiciary can avoid or prevent any undue interference in the ecclesiastical concerns of the schools through the application of "neutral principles" and insure that the "least restrictive means" are employed in the bargaining relationship. 42 U.S.C.A. § 2000bb.
A longstanding principle of First Amendment jurisprudence forbids civil courts from deciding issues of religious doctrine or ecclesiastical polity. This prohibition does not apply to civil adjudication of purely secular legal questions. Elmora Hebrew Ctr., Inc. v. Fishman, 125 N.J. 404, 413, 593 A.2d 725 (1991). Courts can decide secular legal questions in cases involving some background issues of religious doctrine, so long as they do not intrude into the determination of the doctrinal issues. Id. at 414, 593 A.2d 725. In such cases, courts must confine their adjudications to their proper civil sphere by accepting the authority of a recognized religious body in resolving a particular doctrinal question, while, where appropriate, applying neutral principles of law to determine disputed questions which do not implicate religious doctrine. Ibid. "Neutral principles" are wholly secular legal rules whose application to religious parties does not entail theological or doctrinal evaluations. Id. at 414-15, 593 A.2d 725. Our Court in Fishman pointed to the example, at issue in that case, of an orthodox rabbi the scope of whose duties only a religious authority could decide, but whose contract, or non-religious condition of employment, a civil court could determine. Nonetheless, our Court has stressed that neutral principles "must always be circumscribed carefully to avoid courts' incursions into religious questions that would be impermissible under the first *601 amendment," id. at 415, 593 A.2d 725, because "there are many cases in which court intervention is simply inappropriate because judicial scrutiny cannot help but violate the first amendment." Id. at 416, 593 A.2d 725.
Professor Laycock criticizes reliance on neutral principles in this context. In his view, such reliance ignores the church's resulting loss of autonomy and avoids the required in-depth constitutional analysis. In addition, Laycock is concerned that distinctions required by such an approach are difficult for secular courts, unversed in theological subtleties. Laycock, supra, 81 Colum. L.Rev. at 1400, 1409 n. 270.
* * * * * * * *
However, in spite of these concerns, we conclude that reliance on the doctrine of neutral principles will prove proper and efficacious. The concerns of secular intrusion expressed in Catholic Bishop are not nearly as substantial here because of the absence of a leviathan-like governmental regulatory board. Concern over a court's ability to make the necessary distinctions between the secular and the theological is, in our view, no obstacle given the anticipated nature of the collective bargaining process.... As for the concerns regarding church autonomy: while these are legitimate, they are outweighed in this situation by the compelling governmental interest expressed in our State's constitutional provision guaranteeing the rights of working men and women.
[290 N.J. Super. at 389-91, 675 A.2d 1155 (emphasis added).]
As noted by the Appellate Division, "[t]he Diocese's concern seems rooted in its objection to collective, not individual, bargaining." Id. at 394, 675 A.2d 1155. Many lay elementary-school teachers presently have individual contracts with the Diocese. The high-school-lay teachers have a collectively-negotiated contract with the Diocese. In both instances, secular issues have been negotiated without apparent fear of violating the Free Exercise Clause.
Defendants also claim that the lay teachers perform a ministerial function and that if they are forced to recognize the union and to engage in collective bargaining, that would amount to an impermissible intrusion into the "precinct" of the church. We disagree.
Ministerial employees are those whose "primary duties consist of teaching, spreading the faith, church governance, supervision of a religious order, or supervision or participation in religious ritual and worship." Welter v. Seton Hall Univ., 128 N.J. 279, 294, 608 A.2d 206 (1992) (internal quotation marks *602 omitted). The ministerial defense is raised under the Free Exercise Clause to preclude judicial resolution of an employment dispute or enforcement of an employment agreement. Id. at 294-95, 608 A.2d 206; Alicea v. New Brunswick Theological Seminary, 128 N.J. 303, 306, 608 A.2d 218 (1992). Even then, the courts should exercise jurisdiction, except "when the underlying dispute turns on doctrine or polity." Welter, supra, 128 N.J. at 293, 608 A.2d 206. Otherwise, courts should not abdicate their duty to enforce secular rights. Ibid.
The present case deals with the right to negotiate terms and conditions of employment collectively rather than the enforcement of a contract of employment. See J.I. Case Co. v. NLRB, 321 U.S. 332, 334-35, 64 S.Ct. 576, 579, 88 L.Ed. 762, 766 (1944) (stating that collective bargaining generally does not result in employment contract, but rather, sets terms for a collective bargaining agreement for current and future employees). Thus, defendants' reliance on Welter, supra, 128 N.J. 279, 608 A.2d 206, and Alicea, supra, 128 N.J. 303, 608 A.2d 218, is misplaced.
VI
In sum, we hold that requiring defendants to bargain collectively with plaintiff pursuant to Article I, Paragraph 19 of the New Jersey Constitution over the terms and conditions of employment set forth in this opinion does not violate the Religion Clauses of the United States Constitution. We remand the matter to the Chancery Division for it to order an official representational election, if same has not occurred, to determine whether plaintiff has the support of the majority of the lay teachers. If plaintiff receives that support, then the Diocese of Camden is ordered to recognize plaintiff as the lay elementary-school teachers' representative and to bargain collectively with plaintiff in accordance with this opinion.
The judgment of the Appellate Division is modified and affirmed. The complaint is reinstated and the matter is remanded *603 to the Chancery Division for further proceedings consistent with this opinion.
For modification and affirmance Chief Justice PORITZ and Justices HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN and COLEMAN 7.
NOTES
[1] For a discussion of the historical development of the Free Exercise Clause, see Michael W. McConnell, The Origins and Historical Understanding of Free Exercise of Religion, 103 Harv. L.Rev. 1409 (1990).
[2] See also Jane Rutherford, Equality as the Primary Constitutional Value: The Case for Applying Employment Discrimination Laws to Religion, 81 Cornell L.Rev. 1049, 1103 (1996) (stating that the State can infringe on employers' associational rights by requiring employers to include disfavored groups); Charles Fried, Individual and Collective Rights in Work Relations: Reflections on the Current State of Labor Law and its Prospects, 51 U. Chi. L.Rev. 1012, 1023 (1984) (stating that the NLRA, 29 U.S.C.A. §§ 151-169, protects workers' right to associate by abridging the employers' right not to associate with union members). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511227/ | 88 F.2d 68 (1937)
ROBY et al.
v.
DUNNETT et al.[*]
No. 1428.
Circuit Court of Appeals, Tenth Circuit.
January 19, 1937.
Rehearing Denied March 9, 1937.
F. E. Riddle, of Tulsa, Okl. (O. G. Rollins, of Tulsa, Okl., on the brief), for appellants.
W. V. Pryor, of Sapulpa, Okl. (Robert W. Raynolds, of Tulsa, Okl., on the brief), for appellees.
Before LEWIS, PHILLIPS, and McDERMOTT, Circuit Judges.
LEWIS, Circuit Judge.
Roby and others, as stockholders in the Operators Oil Company, a corporation, complained that Dunnett and others, also stockholders in said company, sold their stock and caused a consolidation of that company with the Sunray Oil Company. They averred that on or about the 22d day of November, 1929, the defendants herein owned or had under their control more than 60 per cent. of all the issued outstanding shares in said Operators Oil Company; that they dominated the corporation and on or about said day sold and delivered about 60,000 of said shares to the Sunray Oil Company and thus merged the two companies through collusion and fraud; that defendants were directors and officers of said Operators Company and recommended to the minority stockholders to sell and deliver their shares for a stated amount per share which would soon be offered them by the Sunray Company; that said defendants, officers, and stockholders owning a majority of said issued shares in the Operators Company sustained a fiduciary relation to plaintiffs; that defendants Dunnett, Cloud, and Wheeler wired to each of the plaintiffs that the offer of Sunray Company for their shares, of which they would be notified, would be one share of Sunray Company stock and $6 cash for each share of Operators stock; that the Sunray Company would make such offer to each of the plaintiffs by letter; that the wire sent to the plaintiffs "led the plaintiffs to believe, upon which they relied and so relying did believe, that the proposition so recommended was the same proposition upon which the defendants had sold their shares of stock to the said Sunray Oil Company." The wire so alleged to have been sent to plaintiffs said that in the opinion of the directors "the proposition is to the best interest of all stockholders." The plaintiffs in the first suit made these same allegations and were represented by the same counsel who appears for the plaintiffs in this suit.
The prayer for relief was a decree against each defendant for 75 cents a share for each share respectively owned by the complainants. That amount was ascertained by this court on a prior appeal in a cause brought by other minority stockholders in the Operators Company against these same defendants. It was the same kind of a suit as this one. Our decision in that case is to be found in Dunnett et al. v. Arn et al., 71 F.(2d) 912. We omit stating the facts in detail here and refer the reader to our opinion in the former case.
The defendants made full answers in this case as they did in the prior case. They denied all allegations of fraudulent practices. They expressly deny that any of the plaintiffs or any of the minority stockholders of the Operators Company were induced to sell their shares to the *69 Sunray Corporation by them. They deny all fraudulent intentions on their part.
Each of the five plaintiffs who recovered in the prior suit and the one who recovered in the present suit testified that in the acceptances of the offer made to them for their stock by the Sunray Company they believed from the telegram sent to them by Dunnett and Cloud and also signed by Wheeler, who was a director in the Operators Company, that Dunnett and Cloud were receiving for the 60,000 shares the same consideration per share that was offered to them for their stock, and that so believing and relying thereon they each accepted said offer. In the present case only one of the plaintiffs testified that he relied upon the representations in the telegram and acted thereon under said belief. Plaintiffs' counsel took the position in the trial court that it was not necessary that the plaintiff establish by proof said allegations of the complaint of reliance in the truthfulness of the claimed misleading statements by defendants and action thereon by plaintiffs in disposing of their stock, because he contended we had held in the former case that defendants were trustees for the minority stockholders. The District Judge disagreed with the contention and in dismissing the bill in this case stated:
"On behalf of many of the plaintiffs there was no proof offered that they sold their stock in reliance on the telegram of November 27, 1929, or that the telegram induced them to make the sale. There was no proof that they did not know of the express provisions of the contract of November 22, 1929, when they accepted the offer of the Sunray. In other words there was no proof that these plaintiffs were deceived or induced to act by anything the defendants did or failed to do."
In our opinion in the first case, 71 F. (2d) 912, 920, we said:
"Plaintiffs below, whose names appear in the second group of minority stockholders, offered no proof. The general evidence showed that the telegram and letter were sent to them, and that they sold their stock upon the basis of the offer contained in the letter. There was no proof, however, that they did not know the express provisions of the contract of November 22, 1929, when they elected to accept the offer made by the Sunray Company. Absent this proof, we conclude that as to them the court did not err in dismissing without prejudice."
True, we did not there refer to the claimed misleading and deceptive acts of defendants in both pleadings and proof, but we were reviewing the whole case as made. They were undoubtedly material circumstances connected closely with the whole transaction, an important element to our conclusion, when the weight of authority is borne in mind to the effect that every stockholder, including a majority holder, is at liberty to dispose of his shares at any time and for any price to which he may agree without being liable to other stockholders under circumstances such as we have here as long as he does not dominate, interfere with, or mislead other stockholders in exercising the same rights. We noted that rule in our former opinion. We adhere to it. Clearly if a minority stockholder who received the telegram was not misled by it to his injury and sold his stock on his own judgment, wishes, or necessities he has no ground of complaint. Many other issues of fact between the parties were debatable. The defendants now contend, and contended in the prior suit, that the minority stockholders received a better consideration for their stock than the defendants received; that they offered to sell their stock to the Sunray Company on the identical terms that were offered the minority group, but the Sunray refused them because that sort of a trade would require more ready cash than the one finally accepted by the defendants. The majority agreed in the contract set out in part in the first opinion that they would not dispose of their Sunray stock for six months thereafter. Every one knows that mining operations and the value of such property are liable to sudden fluctuations. Further, as part of the consideration they took $200,000 face value of bonds that had been theretofore issued by the Sunray and which were then purchasable at a considerable discount. They guaranteed payment of a $90,000 note payable to the Operators Company. It is true they were not thereafter required to meet their guarantee. Dunnett and Cloud testified that they traded their stock in that way because the Sunray would not give them the same terms given to the minority stockholders. The plaintiffs were not suing for property that belonged to them which they had turned over to a trustee and which the trustee was wrongfully holding and refusing *70 to redeliver, but to establish a right to property which the defendants were asserting to be their own and lawfully entitled to retain.
We affirm the action of the District Court in dismissing the bill.
On Petition for Rehearing.
Before LEWIS and PHILLIPS, Circuit Judges.
PER CURIAM.
Appellants have filed a petition for rehearing herein in which they assert that in our opinion in the instant case, in holding it was incumbent on the plaintiffs to prove deception, we departed from our earlier opinion in Dunnett v. Arn, 71 F.(2d) 912, wherein the parties plaintiff were different but the transaction involved the same as in the instant case. While the transaction was not in form a sale by the corporation of its corporate assets, we held in Dunnett v. Arn, supra, it should be so regarded as to those stockholders who were deceived by the action of Dunnett and Cloud.
However, where a stockholder, acting with full knowledge of the facts and not misled by the misrepresentations of Cloud and Dunnett, elected to make an individual sale of his stock to the Sunray Company, such sale was neither in form nor substance a corporate transaction. Hence we held proof of deception was necessary. See Dunnett v. Arn, supra (C.C.A.) 71 F.(2d) 912, at page 920. The trial court rightly denied relief as to plaintiffs who failed to make proof of deception in the instant case.
The petition for rehearing is denied.
NOTES
[*] Writ of certiorari denied 57 S. Ct. 940, 81 L.Ed. ___. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511243/ | 939 F. Supp. 1124 (1996)
Alfred M. FRANKEL, et ano., Plaintiffs,
v.
ICD HOLDINGS S.A., et al., Defendants.
No. 96 Civ. 1141 (LAK).
United States District Court, S.D. New York.
September 30, 1996.
*1125 Ira S. Sacks, Alex Lipman, Fried, Frank, Harris, Shriver & Jacobson, for Plaintiffs.
Robert A. Weiner, Y. David Scharf, McDermott, Will & Emery, for Defendants.
MEMORANDUM OPINION
KAPLAN, District Judge.
On June 10, 1996, the Court granted plaintiffs' motion for summary judgment against defendant ICD Holdings, S.A. ("Holdings") on two promissory notes and against defendants De Geus and Loeffelhardt (the "Guarantors") on their guarantees of the notes. Frankel v. ICD Holdings, S.A., 930 F. Supp. 54 (S.D.N.Y.1996) ("Frankel I"). The Guarantors subsequently moved for reargument or, alternatively, for relief from the judgment against them pursuant to FED.R.CIV.P. 60(b). The Court granted the Guarantors' motion for a stay of enforcement of the judgment pending the briefing and determination of that motion, Frankel v. ICD Holdings, S.A., 168 F.R.D. 19 (S.D.N.Y.1996) ("Frankel II"), which now is before the Court for decision. The Court assumes familiarity with Frankel I and Frankel II and therefore limits this discussion to matters essential to clear exposition.
*1126 The Motion for Reargument
A motion for reargument is appropriate where "the court overlooked controlling decisions or material factual matters that were before the court on the underlying motion." Violette v. Armonk Associates, L.P., 823 F. Supp. 224, 226 (S.D.N.Y.1993). Its office is "to correct mistakes made because relevant information was disregarded." Morin v. Trupin, 823 F. Supp. 201, 205 (S.D.N.Y.1993). No affidavits or new material may be submitted. S.D.N.Y.CIV.R. 3(j). Thus, such a motion is limited to the record that was before the Court on the original motion.
The Guarantors contend that the Court overlooked no less than nine "facts" which, they contend, demonstrate that summary judgment should not have been granted. (Def.Mem. 3-4) Five of the nine "facts" allegedly overlooked are varying formulations of a single proposition: that the Court mistakenly believed that the Preliminary Balance Sheet prepared by Eisner accounted for the so-called "open items"[1] or, to put it another way, mistakenly concluded that defendants failed to adduce sufficient evidence to support their contention that it did not.[2]Frankel I, however, clearly stated that the Court assumed in deciding the motion for summary judgment that Eisner did not account for the open items. 930 F.Supp. at 66.[3] The basis for the Court's decision instead was that "there is no legally sufficient basis for concluding that their inclusion [i.e., inclusion of the `open items'] would have made any material difference." Id.
The remaining facts allegedly overlooked by the Court all go to defendants' assertion that the omission of the "open items" resulted in an $8.7 million overstatement of the purchase price. As is perfectly obvious from a review of defendants' memorandum and the opinion in Frankel I, none of them was overlooked. Indeed, the two most prominent bits of evidence the Moret reports were discussed extensively in the decision.
Defendants devote several pages of their memorandum to demonstrating the extent of the work that Moret did in order to render the November 1995 and March 1996 reports and its familiarity with the accounting records and corporate structure of the ICD entities, to rearguing the significance of the statements and disclaimers in the Moret reports, and other such matters. (Def.Mem. 4-10) To a substantial extent, this discussion is based on affidavits submitted in support of defendants' Rule 60(b) motion that were not before the Court on the motion for summary judgment and that therefore are not properly considered on the motion for reargument. But the result would not change even if the evidence concerning the extent of Moret's efforts in preparing the November 1995 and March 1996 reports were considered, because it would be quite immaterial. The Court relied upon the contents of the reports in reaching its decision, not upon an assumption as to how many or few hours of work went into their preparation. Hence, while the Court's comments characterizing the amount of effort devoted by Moret to its activities, considered in light of the materials newly submitted after the decision was rendered, are broader than now seems appropriate, those comments were not material to the result, and the new information would warrant no change.
The motion for reargument is denied.
The Motion to Vacate the Judgment
Defendants seek to vacate the previous judgment on the basis of an affidavit of one of the Moret accountants and a new Moret *1127 report, dated shortly after the Court rendered its decision. They claim that the recent report is "newly discovered evidence" within the meaning of FED.R.CIV.P. 60(b)(2). Moreover, they have submitted with their reply papers on this motion still another report, this one from Price Waterhouse & Co., which they commissioned after the Court rendered its decision.
As Rule 60(b) "allows extraordinary judicial relief, it is invoked only upon a showing of exceptional circumstances." Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir.1986). It is not "a substitute for a timely appeal," and it cannot be used to overcome counsel's tactical judgments about what evidence to offer. Id. at 61, 63; Martin v. Chemical Bank, No. 89 Civ. 3946 (LAK), 1996 WL 527336, at *1-2, 940 F. Supp. 56, ___ - ___ (S.D.N.Y.1996). With these principles in mind, there is no basis for relief under Rule 60(b)(2).
The recent Moret report said to constitute newly discovered evidence is dated June 19, 1996. (Goedkoop Aff.Ex. 1) It contains a more detailed statement of what Moret did in order to render the November 1995 and March 1996 reports. It argues that the conclusions of those reports were justified. It argues also, at some length, with the conclusions set forth in the Court's opinion. Nonetheless, it is crystal clear that all of the factual information contained in the new report as distinguished from Moret's rejoinder to the Court's opinion existed at the time the motion for summary judgment was briefed and argued. There is no suggestion that new facts had come to light or that Moret had done any work between the time of the Court's decision on June 10 and the issuance of the new report on June 19 that added anything of substance to what had been done before.
Rule 60(b) may not be used to "relitigate matters settled by the original judgment." Donovan v. Sovereign Security, Ltd., 726 F.2d 55, 60 (2d Cir.1984). In order to gain relief under Rule 60(b)(2), the movant must demonstrate that (1) the newly discovered evidence was of facts that existed at the time of trial or other dispositive proceeding, (2) the movant must have been justifiably ignorant of them despite due diligence, (3) the evidence must be admissible and of such importance that it probably would have changed the outcome, and (4) the evidence must not be merely cumulative or impeaching. E.g., Weissmann v. Freeman, 120 F.R.D. 474, 476 (S.D.N.Y.1988); 11 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D §§ 2808, 2859 (1995).
Here, all of the material facts in the new Moret report were in existence at the time the original motion was litigated. The facts were known to the defendants, but defendants chose to rely upon the November 1995 and March 1996 Moret reports rather than have Moret prepare a fuller version comparable to the new report. Indeed, as defendants' counsel stated during the argument of the stay motion, defendants' counsel simply concluded that they had enough to defeat summary judgment without doing so. (Tr., June 25, 1996, at 22) In these circumstances, granting relief under Rule 60(b)(2) would be an open invitation for litigants to relitigate matters ad infinitum.
While the foregoing is sufficient to warrant denial of defendants' motion, the Court bears fully in mind the injunction that the Federal Rules should be construed to secure the just as well as the speedy and inexpensive determination of litigation. In consequence, a few words concerning the merits, in light of the newly proffered evidence, are appropriate.
The parties closed this multimillion dollar acquisition, and the Guarantors guaranteed the notes, on a Preliminary Balance Sheet as at September 30, 1993 that was prepared by Eisner after the execution of the purchase agreement, which, as explained below, obliged them to do so before the Preliminary Balance Sheet even existed. The only defense that the Guarantors advance is fraud[4] which, for the reasons explained in Frankel I, required them to come forward with admissible evidence sufficient to raise a triable *1128 issue as to the proposition that the Balance Sheet as at that date would have been materially different had the "open items" principally the Russian subsidiaries been accounted for.[5] 930 F.Supp. at 64-65.
The Court assumed in deciding the original motion that the Eisner-prepared balance sheet did not reflect the equity value of the Russian entities. That omission, assuming it occurred, would have been to the defendants' disadvantage only if the equity value as at September 30, 1993 was negative in an aggregate amount material to the overall transaction.[6] The evidence they offered was the following:
The assertion of Mr. De Geus, which was based upon the Moret reports of November 1995 and March 1996. (De Geus Aff., Mar. 13, 1996, ¶¶ 16, 21, 24, 26)
The November 1995 Moret report. (Id. Ex. K)
The March 1996 Moret report. (Id. Ex. O)
Mr. De Geus' affidavit was insufficient because he manifestly was not competent to testify to the conclusion that the result of the alleged omission of the equity value of the Russian subsidiaries resulted in any overstatement of the purchase price, let alone a material overstatement. That conclusion, and especially any conclusion as to amount, rested solely on Moret.
The first Moret report reflected estimated net negative equity values for Hisparus and AOZT, the two Russian companies, as at September 30, 1996 of $3,844,370 and $827,090, respectively. (Id. Ex. K and Exhibit 1 thereto) These were not figures derived by Moret, however. Rather, the report clearly stated that they were the product of a calculation by defendants' financial department made to approximate the September 30, 1993 equity values.[7] (Id. at 2) The second Moret report used identical figures, except that it added an additional $3,293,280 to the negative equity value of AOZT.[8] (Id. Exs. O, M[9])
What is critical, however, is what Moret did and did not say about the defendants' calculations. While Moret said in the first report that the procedures used by defendants, "given the circumstances, [were] acceptable" (id. Ex. K, at 2), it said also that it *1129 did "not express an opinion" and that it made "no representations regarding the sufficiency of the foregoing procedures for [defendants'] purposes (id at 2-3)." There is no suggestion that the data and assumptions to which defendants' procedures were applied were complete, accurate or reliable. The only reasonable construction of this language is that Moret was not prepared to say that, in its opinion, the result of management's calculations was a fair approximation of the equity values of the subsidiaries as of the relevant date.
Both the accuracy of this construction and the reasons for it are crystal clear from Moret's second report. Moret there said, among other things, that (1) its work was "designed to be responsive to management's objectives ...," (2) it had "no opinion" as to whether its procedures were adequate for management's purposes, which were in relevant part to establish the equity value of the Russian subsidiaries at the relevant date, (3) it would "not express an opinion on the completeness and correctness of the calculation underlying the draft settlement," which set forth these figures, and (4) it did "not express an audit opinion" as to the figure used for the negative equity value of AOZT.[10] (Id. Ex. O) (emphasis added) Hence, whatever the meaning of the word "acceptable" in Moret's report, which in any case applied only to the procedures used and not to the end result, nowhere in the record on the original motion was there any opinion by a competent witness in admissible form as required by FED.R.CIV.P. 56 as to the dollar amount, if any, by which the Balance Sheet overstated the book value of the relevant assets or the purchase price.
The submissions in support of the Rule 60(b) motion, all of which could have been made before the summary judgment motion was decided,[11] do add a bit but only a bit to the defendants' position.[12] They include another affidavit from Mr. Goedkoop, the Moret accountant, which conspicuously fails to give any opinion as to what the purchase price, computed in accordance with the contract, should have been. And they undercut defendants in another, most important respect.
Whereas the calculation prepared by defendants and reviewed by Moret attributed a total negative equity value to AOZT of $4,120,370 ($827,090 plus the $3,293,280 addition attributed to the allegedly worthless account payable to the Buyer), Price Waterhouse came up with a total figure of $826,800, none of it attributable to the allegedly uncollectible account. (Piantidosi Reply Decl.Ex. A, at 5-9) The result of this and other, far less significant, differences between Price Waterhouse and the defendants' figures that were reviewed by Moret is that the total alleged overstatement, according to Price Waterhouse, was $5.4 million $3.3 million less than defendants originally claimed in this action. And this difference is extremely important.
It must be borne in mind that defendants' fraud theory is not simply that the Balance Sheet in some sense was incorrect or, indeed, that it was off by an amount that would be significant to most people. While such an error might well give defendants a claim for a refund of part of the purchase price, the Guarantors can avoid their guarantees of the notes only if they can establish *1130 that they would not have signed the guarantees if they had known the true state of affairs.[13] And on this point, the structure of the contract is critical.
The purchase agreement, dated January 4, 1994, provided for the purchase of the company for Book Value less $900,000,[14] the price payable in the form of (1) guaranteed notes aggregating $5 million, and (2) cash for the difference. Any variation in the Book Value thus would have resulted in a change only in the cash paid at the closing, the Estimated Cash Purchase Price not in the amount of the notes. The notes and guarantees could have been affected only in one way: the purchase agreement gave both sides the right to call off the deal before the notes and guarantees were signed if the Estimated Cash Purchase Price the book value shown on the Preliminary Balance Sheet less the $900,000 contractual discount less the $5 million in notes varied by more than 10 percent from $67.8 million. Frankel I, 930 F.Supp. at 56-57. Thus, if the book value shown on the Preliminary Balance Sheet minus $5.9 million was less than $61.02 million or greater than $74.58 million, the Buyers could have walked away. Otherwise, Holdings was obliged to sign the notes and the Guarantors to sign the guarantees. Hence, any overstatement of less than $6.78 million would have been immaterial to the contractual obligations of Holders and the Guarantors to execute and guarantee the notes, respectively.
This is confirmed by Mr. De Geus in his original papers in opposition to the motion for summary judgment. He there asserted that the importance of the alleged overstatement of the book value lay in Buyers' ability to cancel the deal if the Estimated Cash Purchase Price dropped beneath the contractual floor. Because the defendants' calculation at that time purported to show an $8.7 million overstatement, which was well over 10 percent of $67.8 million, Mr. De Geus argued that disclosure of the true state of affairs would have resulted in the defendants declining to proceed and thus declining to execute the notes and guarantees. (De Geus Aff., Mar. 13, 1996, ¶¶ 11, 16-17, 22, 26; De Geus Reply Aff., Apr. 4, 1996, ¶¶ 3-4)
The foregoing demonstrates that plaintiffs would be entitled to summary judgment even if the Price Waterhouse report were properly considered "newly discovered evidence" under Rule 60(b)(2) and is competent and admissible for summary judgment purposes. The amount of the overstatement Price Waterhouse alleges is too low to have been material to the notes and guarantees.
This, of course, is not to say that the Guarantors have no forum or remedy for the alleged overpayment. They already have brought an independent action seeking to recover the alleged overpayment.[15] And it is important to emphasize that there is no inequity in enforcing the guarantees and thereby requiring the payment of disputed sums pending the outcome of the defendants' affirmative claim.
As the Court has commented previously, acquisitions and dispositions of businesses for prices that depend on the results of accounting procedures are fraught with the risk of post-closing disagreements about accounting matters. Where part of the price is to be paid after the closing, the seller almost invariably must contemplate the risk that the buyer will claim that the price should be adjusted and seek to withhold any unpaid portion. The buyer, for exactly the same reason, must contemplate the possibility that the seller will demand payment of any unpaid portion of the purchase price notwithstanding the buyer's view that it has paid too much *1131 already or, at any rate, that the seller is not entitled to the balance.
Attorneys who represent parties to such transactions have a variety of means at their disposal to protect the conflicting interests of buyers and sellers in this respect, assuming of course that their respective clients are successful in securing the agreement of their opposite numbers. At one end of the spectrum, a contract may provide that the buyer's obligation to pay any balance due after closing arises only after authoritative resolution of any dispute as to the price, whether by litigation or arbitration. At the other end of the spectrum would be a contract that provided that the buyer would pay all amounts claimed by the seller immediately, subject to the buyer's right to sue for a refund. See Frankel I, 930 F.Supp. at 61 & n. 7 (citing cases). There is a myriad of techniques that fall between these poles, including the method agreed upon here guaranteed promissory notes in which the maker, but not the guarantors, waived substantially all defenses.
The effect of the maker's waiver, as the Court held in Frankel I, was unequivocally to require that Holdings pay the $5 million principal amount of the notes irrespective of any dispute as to the price. While the Guarantors did not waive defenses, the very fact that they guaranteed notes for liquidated amounts materially affected their right to withhold payment pending resolution of this dispute. The plaintiffs, as holders of the notes, were able to make out their case in chief by proving the notes, the guarantees, and the fact of non-payment. At that point, the burden shifted to the Guarantors, for reasons explained in Frankel I, to adduce competent and admissible evidence raising a genuine issue of fact as to a material misrepresentation, a burden they did not carry.
The situation of course would have been quite different if the deal had been structured otherwise. The contract might have provided that the buyers would pay a fixed sum at closing and make a post-closing payment equal to the difference between the purchase price and the amount paid at the closing. In those circumstances, the plaintiffs would have borne the burden of proving the purchase price as that term was defined in the contract. The defendants' ability to demonstrate the existence of genuine issues of material fact as to the purchase price would have been appreciably greater than their ability to defeat a summary judgment motion on the guarantees. But that is not the deal the parties made. It would be entirely inappropriate for the Court to rewrite the bargain particularly where, as here, the transaction involved a $400 million a year business and the parties were sophisticated and had access to competent counsel.
Conclusion
For the foregoing reasons, the motions are denied in all respects. Moreover, in view of the protean nature of defendants' claims as to the extent of the alleged overstatement, the fact that the Guarantors were involved intimately in this business prior to the buy out, the fact that the Guarantors are foreign nationals whose assets are not readily reachable to satisfy a judgment in the event plaintiffs ultimately prevail, the dependence of all of defendants' accountants on subjective representations of the defendants as to matters affecting the amount of any claimed overstatement,[16] and that Price Waterhouse's work depends upon the parent company's "shadow bookkeeping," the Court would exercise its power under Rule 60(b) to impose conditions on any exercise of its power to vacate the judgment. Specifically, it would condition vacatur of the judgment as to the Guarantors upon the Guarantors posting a bond or giving other security approved by the Court in the principal amount of the Notes plus all interest accrued thereon to date plus an additional 15 percent. See First Fidelity Bank, N.A. v. The Government of Antigua and Barbuda Permanent Mission, 877 F.2d 189 (2d Cir.1989) (conditioning vacatur of judgment on posting security); Sales *1132 v. Republic of Uganda, 828 F. Supp. 1032 (S.D.N.Y.1993) (same).
SO ORDERED.
NOTES
[1] The first three and the final two of the nine "facts" listed at pages 3-4 of defendants' memorandum fall into this category.
[2] Defendants complain that plaintiffs failed to demonstrate that Eisner did account for the "open items." That of course is accurate but immaterial. Plaintiffs sued on promissory notes and guarantees. Once they established the lack of a triable issue of fact as to the elements of their case in chief the execution and authenticity of the instruments sued upon and nonpayment, none of which was contested the burden shifted to the defendants to adduce admissible evidence sufficient to raise a triable issue as to their affirmative defense. Frankel I, 930 F.Supp. at 64-65. Plaintiffs never bore the burden, on the underlying motion, as to what Eisner did or did not account for.
[3] The Court reiterated the point at the argument of the stay motion. (Tr., June 25, 1996, at 5)
[4] They rely also on failure of consideration. As explained in Frankel I, however, there is no material difference in this case between fraud and failure of consideration. 930 F.Supp. at 64 n. 9.
[5] In fact, it now appears that Moret was incorrect in characterizing the alleged failure to reflect the equity value of the Russian subsidiaries, the principal bone of contention here, in the Balance Sheet as a failure to account for "open items" as that term was used in the Agreement. (See De Geus Aff., Mar. 13, 1996, Exs. D § 6.03(4), E) Rather, their equity should have been consolidated into the Balance Sheet because they were Retained Businesses as that term was defined in the Agreement. (Id. Ex. D §§ 1.03(a), 1.04(a), 1.06 & Ex. 1.06 thereto; accord, Piantidosi Reply Decl. ¶ 3 & Ex. A, at 1, 3-11, 15) It has been clear throughout, however, that the defendants' principal difficulty with the Balance Sheet was its alleged failure to reflect the equity value of the Russian subsidiaries. Hence, it is of no significance whether it should have done so because they were Retained Businesses or "open items."
[6] If the equity value was positive, the failure to reflect that value in the balance sheet would have resulted in an underpayment by the Buyers.
[7] The defendants' calculations, which are attached to the first Moret report, show that the negative equity value attributed to Hisparus was principally the sum of (1) a provision (i.e., downward adjustment in equity) for Russian value added tax ("VAT"), and (2) the estimated loss for the period January 1 through September 30, 1993. (Id. Ex. 1) They show also that the negative equity value attributed to AOZT was almost entirely attributable to a provision for VAT. (Id. Ex. 2) Moreover, the defendants' calculations show on their face that the loss attributed to Hisparus for the first nine months of 1993 is simply nine-twelfths of the loss for the entire year as distinguished from a true profit and loss calculation for the nine month period, which would match revenues and expenses to that period as distinct from the rest of the year. The recent (post-decision) Moret report makes clear that the reason for the lack of true profit and loss figures for the nine month period is the inability to establish an accounting cutoff as of September 30, 1993.
[8] This figure, also prepared by the defendants, was derived by (1) taking as a given a $31,835,000 account payable by AOZT to the Buyer as of November 30, 1995, and (2) allocating 3/29ths of that total to the period through September 30, 1993 on the theory that 3/29ths of entire duration of AOZT's existence occurred during that period.
[9] Defendants' counsel has represented that Exhibit M to the De Geus affidavit is the "draft settlement" referred to in the second Moret report, Exhibit O. (Def.Mem. 4) This appears to be undisputed.
[10] In view of these statements in the Moret reports, Mr. Goedkoop's assertion in his affidavit in support of the present motion that Moret was not unwilling to render an opinion (Goedkoop Aff., June 19, 1996, ¶ 17) is incomprehensible. Moreover, the fact that Eisner disclaimed opinions in rendering the Preliminary and Closing Balance Sheets, a fact relied upon by defendants, is a red herring. Eisner's work product was not obliged to meet the standard required of evidence offered to defeat a well grounded motion for summary judgment.
[11] Indeed, there is no reason that Price Waterhouse could not have been retained and its report generated prior to decision on the motion. Certainly it did not rely on facts or evidence that did not exist in that time period.
[12] In this category are the newly expressed opinions of both Moret and Price Waterhouse that the allocation of half of AOZT's 1993 loss to the period ending September 30, 1993 AOZT functioned during 1993 only from July 1 through December 31 was appropriate in the circumstances. (Goedkoop Aff., June 19, 1996, Ex. 1, at 5; De Geus Aff., Mar. 13, 1996, Ex. K Ex. 2; Piantidosi Reply Decl. Ex. A, at 6)
[13] E.g. Sheffield Comm. Corp. v. Clemente, 792 F.2d 282, 285 (2d Cir.1986); United States ex rel. Roman v. Schlesinger, 404 F. Supp. 77, 85 (E.D.N.Y.1975); Jones v. Title Guar. & Trust Co., 277 N.Y. 415, 419, 14 N.E.2d 459 (1938); First Nationwide Bank v. 965 Amsterdam, Inc., 212 A.D.2d 469, 623 N.Y.S.2d 200, 201-02 (1st Dept. 1995).
[14] The Book Value was subject also to certain adjustments, which also affected the purchase price. The amount of those adjustments is not material in this case. The Court therefore refers to the purchase price as Book Value less $900,000 for ease of expression.
[15] The amount of the alleged overpayment actually made to date of course is $5 million less than it will be when the notes are paid. Defendants doubtless will be permitted to supplement their complaint to seek recovery of the full amount of any alleged overpayment.
[16] These include representations, for example, as to the collectibility of alleged overpayments of Russian VAT, the allocation of losses to particular accounting periods and the fact that AOZT did not maintain accounting records that manifestly would be material here. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3117398/ | Order entered January 28, 2013
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-00027-CV
LAZARUS IROH, ANDREW OKAFOR, LUI AKWURUOHA, CALEB OKEKE, AND
HENRY NNABUGWU, Appellants
V.
EMMANUEL IGWE, Appellee
On Appeal from the County Court at Law No. 4
Dallas County, Texas
Trial Court Cause No. CC-11-07596-D
ORDER
This case is appropriate for mediation pursuant to Chapter 154 of the Texas Civil Practice
and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 154.001-.073 (West 2011).
Mark Whittington shall serve as mediator. Any objection to this Order must be filed and
served upon all parties and the mediator within 10 days from the date of this Order; an objection
that is neither timely filed nor ruled upon before the scheduled mediation may be waived.
Mediation is a mandatory but nonbinding settlement conference, conducted with the
assistance of the mediator. Mediation is private, confidential and privileged. After mediation,
the mediator will advise the Court only that the case did or did not settle.
Unless the mediator agrees to mediate without fee according to section D(3) of the
Court’s ADR Procedures, the mediator will negotiate a reasonable fee with the parties, which
shall be divided and borne equally by the parties unless agreed otherwise, paid by parties directly
to the mediator, and taxed as costs. If the parties do not agree upon the fee requested by the
mediator, the Court will set a reasonable fee, which shall be taxed as costs. All parties and their
counsel are bound by the mediation rules attached to this order and shall complete the
information forms furnished by the mediator.
Before the first scheduled mediation session, all parties shall provide the mediator and all
attorneys of record with an information sheet setting forth their positions about the issues that
need to be resolved. At or before the first session, all parties shall produce all information
necessary for the mediator to understand the issues presented. The mediator may require any
party to supplement the information provided.
Named parties shall be present during the entire mediation process and each corporate
party must be represented by an executive officer with authority to settle. Mediation shall take
place at a time to be agreed by the parties and the mediator, but no later than 45 days after
appellant’s brief is filed. This order does not toll any appellate time period or portion thereof.
Failure or refusal to attend the mediation as scheduled may result in the imposition of
sanctions, as permitted by law. The mediator shall notify the Court about the outcome of the
mediation within 10 days of the conclusion of the mediation session pursuant to Fifth District
Court of Appeals Local Rule 3.
/s/ MARY MURPHY
JUSTICE
RULES FOR MEDIATION
1. Definition of Mediation. Mediation is a process under which an impartial person, the
mediator, facilitates communication between the parties to promote reconciliation,
settlement or understanding among them. The mediator may suggest ways of resolving
the dispute, but may not impose the mediator’s own judgment on the issues for that of the
parties.
2. Conditions Precedent Serving as Mediator. The mediator shall not serve as a mediator
in any dispute in which he or she has any financial or personal interest in the result of the
mediation. Prior to accepting an appointment, the mediator shall disclose any
circumstance likely to create a presumption of bias or prevent a prompt meeting with
parties.
3. Authority of Mediator. The mediator does not have the authority to decide any issue for
the parties, but will attempt to facilitate the voluntary resolution of the dispute by the
parties. The mediator is authorized to conduct joint and separate meeting with the parties
and to offer suggestions to assist the parties achieve settlement. If necessary, the
mediator may also obtain expert advice concerning technical aspects of the dispute,
provided that the parties agree and assume the expenses of obtaining such advice.
Arrangements for obtaining such advice shall be made by the mediator or the parties, as
the mediator shall determine.
4. Parties Responsible for Negotiating Their Own Settlement. The parties understand
the mediator will not and cannot impose a settlement in their case. The mediator, as an
advocate for settlement, will use every effort to facilitate the negotiations of the parties.
The mediator does not warrant or represent that settlement will result from the mediation
process.
5. Authority of Representatives. Party representatives must have authority to settle and all
persons necessary to the decision to settle shall be present. The names and addresses of
such persons shall be communicated in writing to all parties and the mediator.
6. Time and Place of Mediation. The mediator shall fix the time of each mediation
session. The mediation shall be held at the office of mediator, or at any other convenient
location agreeable to the mediator and the parties, as the mediator shall determine.
7. Privacy. Mediation sessions are private. The parties and their representatives may
attend mediation sessions. Other persons may attend only with the permission of the
parties and with the consent of the mediator.
8. Confidentiality and Privilege. Confidential information disclosed to a mediator by the
parties or by witnesses in the course of the mediation shall not be divulged by the
mediator. All records, reports or other documents received by a mediator while serving
in that capacity shall be confidential. The mediator shall not be compelled to divulge
such records or to testify in regard to the mediation in any adversary proceeding or
judicial forum. Any party that violates this order shall pay all reasonable fees and
expenses of the mediator and other parties, including reasonable attorneys fees, incurred
in opposing the efforts to compel testimony or records from the mediator.
9. No Stenographic Record. There shall be no stenographic record of the mediation
process and no person shall tape record any portion of the mediation session.
10. No Service of Process at or near the site of the Mediation session. No subpoenas,
summons, complaints, citations, writs or other process may be served upon any person at
or near the site of any mediation session upon any person entering, attending or leaving
the session.
11. Termination of Mediation. The mediation shall be terminated: A) By the execution of a
settlement agreement by the parties; B) By declaration of mediator to the effect that
further efforts at mediation are no longer worthwhile; or, C) after the completion of one
full mediation session, by a written declaration of a party or parties to the effect that the
mediation proceedings are terminated.
12. Interpretation and Application of Rules. The mediator shall interpret and apply these
rules.
13. Fees and Expenses. The mediator’s daily fee, if agreed upon prior to mediation, shall be
paid in advance of each mediation day. The expenses of witnesses for either side shall be
paid by the party producing such witnesses. All other expenses of the mediation,
including fees and expenses of the mediator, and the expenses of any witness and the cost
of any proofs or expert advice produced at the direct request of the mediator, shall be
borne equally by the parties unless they agree otherwise. | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1511201/ | 88 F.2d 208 (1937)
BADGER et al.
v.
HOIDALE et al. (two cases).
Nos. 10722, 10723.
Circuit Court of Appeals, Eighth Circuit.
February 18, 1937.
*209 Loring M. Staples, of Minneapolis, Minn. (Armin M. Johnson and Cobb, Hoke, Benson, Krause & Faegre, all of Minneapolis, Minn., on the brief), for appellants.
Karl H. Covell, of Minneapolis, Minn. (Charles B. Carroll, of Minneapolis, Minn., on the brief), for appellees.
Before GARDNER, THOMAS, and FARIS, Circuit Judges.
GARDNER, Circuit Judge.
These are two appeals from orders which adjudged a 100 per cent. stockholders' liability assessment against the stockholders of two Minnesota corporations. The questions presented are stated by counsel for appellants as follows: First, were the stockholders of the Down Town Realty Company relieved of an additional liability as stockholders by the adoption of the constitutional amendment; and, second, did the mere adoption of the constitutional amendment prior to any legislation authorized thereby, prevent the stockholders of the corporation from becoming liable for the superadded liability when the corporation assumed all the liabilities of the company on December 19, 1930?
The pertinent facts chronologically stated are as follows: On May 20, 1920, the Down Town Realty Company was incorporated under the laws of the State of Minnesota. At that time the Constitution of Minnesota provided for a so-called double liability or stockholders' liability of such a corporation. On November 24, 1930, an amendment was adopted which, among other things, provided that "the Legislature shall have power from time to time to provide for, limit and otherwise regulate the liability of stockholders." Const.Minn. art. 10, § 3. On April 18, 1931, the Legislature passed a statute which in effect provided that no stockholders of any corporation (of the kind here involved) should be liable for any debts of such corporation, but with a saving clause as to any existing liability. Laws Minn.1931, c. 210. On March 15, 1928, the Down Town Realty Company incurred indebtedness to certain creditors whose claims are yet unpaid.
On December 17, 1930, the Down Town Realty Corporation was incorporated under the laws of Minnesota, and two days thereafter it took over all the assets and assumed all the liabilities of the Down Town Realty Company, some of which liabilities have not yet been paid. To avoid confusion, we shall refer to the Down Town Realty Company as the old company, and the Down Town Realty Corporation as the new company.
In June, 1935, creditors of the old company whose obligations were incurred in 1928, brought separate suits in the United States District Court against each company, asking for the appointment of a receiver on the ground that each defendant was insolvent, and asking that the receiver be directed to enforce the liability of the stockholders of each corporation. Each company defended on the ground that an amendment to the Minnesota Constitution had repealed the prior existing stockholders' liability. The answers also challenged the authority and right of a receiver to enforce the liability. The new company alleged that it was organized after the *210 amendment took effect, and hence was not liable.
The court appointed a receiver with the usual powers of a receiver, to take over the property and collect and administer the assets, and in addition the order provided that, "said receiver is hereby authorized and empowered to enforce by appropriate action the constitutional liability of the holders of its capital stock and to administer and dispose of the proceeds and avails thereof, under the direction of this court for the benefit of the complainants and all others similarly situated, etc." The receiver then instituted proceedings against the stockholders of each corporation to recover an assessment in the amount of 100 per cent. of the par value of each share of stock of the corporation of which the stockholder was the record owner. Upon trial of these proceedings the court entered orders against the stockholders of each corporation, and the present appeals are from those orders.
Section 3 of article 10 of the Constitution of Minnesota, prior to November 24, 1930, contained provision that: "Each stockholder in any corporation, excepting those organized for the purpose of carrying on any kind of manufacturing or mechanical business, shall be liable to the amount of stock held or owned by him."
At the 1930 election, the voters of Minnesota adopted a constitutional amendment that had been duly submitted for their approval or rejection. This submission was in the following language.
"Section 1. Amendment proposed. The following amendment to Section 3, of Article 10, of the Constitution of the State of Minnesota, as hereby proposed to the people of the State for their approval or rejection, which amendment, when so adopted, shall read as follows:
"`Sec. 3. The Legislature shall have power from time to time to provide for, limit and otherwise regulate the liability of stockholders or members of corporations and co-operative corporations or associations, however organized. Provided every stockholder in a banking or trust corporation or association shall be individually liable in an amount equal to the amount of stock owned by him for all debts of such corporation contracted prior to any transfer of such stock and such individual liability shall continue for one year after any transfer of such stock and the entry thereof on the books of the corporation or association.'" Laws Minn.1929, c. 429.
On November 24, 1930, the Governor of Minnesota by proclamation announced that the amendment had been approved and adopted.
The new company was organized after the adoption of the amendment. The stockholders of each of the companies were by the order entered held liable to creditors on the theory that the Constitution as it existed prior to the date of the adoption of the amendment continued to provide for a stockholders' liability until the Legislature by enactment abolished such liability, because the amendment was not self-executing and did not effect a repeal of the old section 3, article 10 of the Constitution.
Appellants seek a reversal of these orders on the grounds that (1) the constitutional liability was abolished by the amendment of November 24, 1930; (2) such abolition violated no constitutional rights; and (3) the appellee as receiver cannot enforce the liability if it exists.
It has been authoritatively determined that the constitutional provision for stockholders' liability as it existed in the Constitution of Minnesota prior to the amendment of 1930 was self-executing. Way v. Barney, 116 Minn. 285, 133 N.W. 801, 38 L.R.A.(N.S.) 648, Ann.Cas.1913A, 719; Converse v. Hamilton, 224 U.S. 243, 32 S. Ct. 415, 56 L. Ed. 749, Ann.Cas.1913D, 1292.
It seems quite clear that the 1930 amendment was not entirely self-executing. It empowered the Legislature to provide for, limit, and otherwise regulate the liability of stockholders or members of corporations or co-operative associations. That was an authorization to the Legislature, but the question with which we are confronted is not whether it is self-executing, but whether its adoption had the effect of repealing the provisions of section 3, article 10, as they existed before the adoption of the amendment.
In Saetre v. Chandler (C.C.A.8) 57 F. (2d) 951, 959 (decided April 25, 1932), in an opinion by Judge Van Valkenburgh, it is said: "The constitutional amendment relied upon does not purport to be self-enforcing, nor itself to alter the terms of existing constitutional provisions, in advance of action by the Legislature upon which it conferred power to provide for, limit, and *211 otherwise regulate the liability of stockholders."
At that time the Supreme Court of Minnesota had had no occasion to speak upon this question, but in an opinion handed down August 11, 1933, in Sweet v. Richardson, 189 Minn. 489, 250 N.W. 46, 49, the Supreme Court of Minnesota, referring to the amendment, said: "The Legislature, having in mind that by the November, 1930, election the amendment of section 3 of article 10 of the Constitution was adopted, doing away with the so-called stockholders' double liability in corporations organized under the laws of this state, except as to stockholders in banking or trust corporations, no doubt enacted chapter 205 for the commendable purpose of speeding up the settlement of the liability hanging over many stockholders in insolvent corporations." (Italics supplied)
This was probably dictum. But the interpretation and construction of the Constitution of a state is peculiarly within the province of the highest court of the state, and its construction will be followed by the national courts. Blue Valley Creamery Co. v. Consolidated Products Co. (C.C.A.8) 81 F.(2d) 182. Considered dictum of that court should not be ignored when a federal court is attempting to construe or ascertain the meaning of the local law, whether it be the state statute or the State Constitution. Blue Valley Creamery Co. v. Consolidated Products Co., supra; Hawks v. Hamill, 288 U.S. 52, 53 S. Ct. 240, 77 L. Ed. 610. Rules applicable to the construction of a statute are equally applicable to the construction of a Constitution. Taylor v. Taylor, 10 Minn. 107 (Gil. 81). It may be conceded that as a general rule an amended Constitution must be read as a whole as if every part of it had been adopted at the same time and as one law. Still the question may remain whether the particular amendment was intended to supersede existing provisions in the Constitution before amendment. People v. Angle, 109 N.Y. 564, 17 N.E. 413. If the constitutional amendment covers the same subject as the original, indicating an intent to substitute it in lieu of the original, the doctrine of implied repeal, though not favored, will be applied, and the original enactment will be superseded. Popfinger v. Yutte, 102 N.Y. 38, 6 N.E. 259; Babb v. City of El Dorado, 170 Ark. 10, 278 S.W. 649; Vincent v. State (Tex. Com.App.) 235 S.W. 1084.
While the Supreme Court of Minnesota has not authoritatively passed upon the question, it has held that rules governing the construction of statutes are applicable to the construction of the Constitution. It has also recognized the doctrine of implied repeal by substitution in statutory construction, having held that although not in express terms repugnant, and though the subsequent statute contained no repealing clause, yet if the subsequent statute was clearly intended to prescribe the only governing rule, it repealed by implication the original act. Nicol v. City of St. Paul, 80 Minn. 415, 83 N.W. 375; School Dist. v. Eckert, 84 Minn. 417, 87 N.W. 1019; Clark v. Baxter, 98 Minn. 256. 108 N.W. 838; Board of Education v. Borgen, 192 Minn. 367, 256 N.W. 894.
It seems clear that the amendment was intended to be substituted in lieu of section 3 as it existed prior to the adoption of the amendment. A complete section 3 was submitted to the electors. There could properly be only one such section. If by this amendment it was intended to retain the provisions of the original with permission to the Legislature to enact different legislation, this could readily have been expressed by embodying the original provision in the proposed amendment. As a further indication of what was intended by this amendment, it is observed that the Attorney General of Minnesota, in an opinion to the Commissioner of Securities (Report of Attorney General of Minnesota, 1932, p. 239), concluded that the amendment superseded and therefore repealed the prior section 3 of article 10. This opinion is, of course, not binding on this court, but it is entitled to great respect and should not be departed from lightly. Standard Computing Scale Co. v. Farrell (D.C.) 242 F. 87.
The procedure for the adoption of a constitutional amendment in Minnesota included the furnishing by the Attorney General of a statement of the purpose and effect of the amendment proposed, showing clearly the purpose and effect of the existing section as it would read if amended. The Secretary of State was required to give three weeks' published notice of such statement prior to election in all legal newspapers of the state. Copies were also required to be furnished to county auditors and town, village, and city clerks for posting. Mason's Minnesota Statutes 1927, § 46. Pursuant to the provisions of this *212 statute, the Attorney General rendered an opinion to the Secretary of State. In this opinion he said: "The effect of the proposed amendment, if adopted, will be to abrogate the present fixed rule of stockholders' liability prescribed by the constitution, except in the case of stockholders in banks or trust companies * * *."
This statement, furnished by the Attorney General in the performance of his public duty, is entitled to consideration. Yosemite Lumber Co. v. Industrial Acc. Comm., 187 Cal. 774, 204 P. 226, 20 A. L.R. 994; Beneficial Loan Society v. Haight, 215 Cal. 506, 11 P.(2d) 857; Bearden v. Collins, 220 Cal. 759, 32 P.(2d) 604.
We conclude that with the adoption of this amendment, the original section 3 of article 10 was repealed.
The liability of stockholders to creditors under section 3, article 10, before the 1930 amendment, was contractual. Hanson v. Davison, 73 Minn. 454, 76 N.W. 254; State ex rel. Hilton v. Mortgage Security Co., 154 Minn. 453, 192 N.W. 348; Crowley v. Goudy, 173 Minn. 603, 218 N.W. 121. The liability of stockholders in the old company antedated the repeal of section 3, article 10, and hence could not be impaired by the repeal. Coombes v. Getz, 285 U.S. 434, 52 S. Ct. 435, 76 L. Ed. 866; Converse v. Hamilton, 224 U.S. 243, 32 S. Ct. 415, 56 L. Ed. 749, Ann.Cas.1913D, 1292.
It is finally urged that the receiver could not maintain the actions to recover assessments of stockholders' liability. Sections 8025 to 8031, Mason's Minnesota Statutes 1927, provides for proceedings by the receiver to recover the assessments, but it is contended that the corporations here involved were not subject to those statutes because they came under the provisions of Mason's Minnesota Statutes Supp.1936, §§ 7492-61a and 7492-62. The propriety of the order of appointment is not otherwise assailed. The contention in effect is that the order of appointment included property not subject to the possession and control of the receiver. But the appeals here are from the orders assessing the stockholders, not from the order appointing receiver. The court had jurisdiction of the corporations and the subject-matter, and that being true, it had jurisdiction to enter a right order or a wrong order; but whether the order so entered be right or wrong, it is not subject to collateral attack. Vallery v. Denver & R. G. R. Co. (C.C.A.8) 236 F. 176. The order, even if erroneous, was not void, and hence not subject to collateral attack. The personal presence of stockholders was not essential to the jurisdiction of the court in the original suit appointing a receiver. They were so far in privity with the corporation as to be represented by it. The order appointing a receiver has the attributes of a judgment of a court having jurisdiction of the subject-matter, and hence is not subject to collateral attack. Greenfield v. Hill City Land, Loan & Lumber Co., 141 Minn. 393, 170 N.W. 343; McCandless v. Furlaud, 293 U.S. 67, 55 S. Ct. 42, 79 L. Ed. 202. The record does not indicate that any contention was made in the lower court of the lack of authority of the receiver to sue, or that the order granting him power to collect from the stockholders was irregular or void. This contention is not tenable, and we are of the view that the receiver had the right to maintain these proceedings.
The order levying assessments upon the stockholders of the new company is therefore reversed, and the order levying assessments upon the stockholders of the old company is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511240/ | 88 F.2d 817 (1937)
HUGHES et al.
v.
MAGNOLIA PETROLEUM CO.[*]
No. 8249.
Circuit Court of Appeals, Fifth Circuit.
March 17, 1937.
Frank H. Booth, of San Antonio, Tex., for appellants.
Frank E. Paige and Arthur E. Paige, both of Philadelphia, Pa., and J. Vincent Martin, of Houston, Tex., for appellee.
Before SIBLEY, HUTCHESON, and HOLMES, Circuit Judges.
HUTCHESON, Circuit Judge.
The suit was against defendant as an infringer of letters patent, No. 1,379,690, for an improvement in oil pumps. The prayer was for a decree establishing plaintiff's right under the patent, and enjoining and restraining defendant from using or in any way dealing with it, for injunction, for profits, for actual and statutory damages, and for general relief. There was a decree adjudging that the patent was valid but not infringed, and dismissing the bill. Appellants complain of the finding as based upon an erroneous construction of the patent as for a combination claim, confined without benefit of equivalence, to the identical form disclosed. They insist that this is to misread the proceedings in the patent office as the file discloses them, and the claim of the patent itself; and that to thus unduly limit it is in effect to destroy it. They admit that defendant's accused device exhibits some differences in the arrangement of its parts. They insist that these differences are not material. They insist that these, though devised with the customary cunning of the infringer to provide equivalence in fact while avoiding equivalence in law, do not succeed in doing so.
Appellee, not to be outdone in plain spokenness urges upon us that with a "complete lack of understanding of the fundamentals of patent law" appellants have relied for their proof of infringement upon a comparison of defendant's pump with the broad description of the patent specification rather than with plaintiff's *818 device as actually narrowed in the allowed claim. It turns to the patent office file for emphasis upon this point. Citing Sears, Roebuck & Co. v. Valjean (C.C.A.) 76 F.(2d) 592, it calls to our attention how greatly plaintiff's original claims were limited, reduced, and confined by successive rejections and amendments. It points out how, in order to obtain the patent at all for a device "an essential feature of which was a connection of a rack at one end with the pump rod, and slidably disposing the other end against the exterior of the cylinder," appellant was finally compelled to whittle it down almost to the vanishing point. To the point indeed of maintaining that appellant's contribution to the art was, the connecting of the upper end of the rack bar with the piston rod, and the disposing of the lower end of the bar in slidable engagement with the exterior of the cylinder. It points out that appellants finally prevailed and secured a patent only on the argument that the patentable novelty of the invention resided in the particular means employed. In further support of the dismissal of the bill, appellee insists that it should have been dismissed, not alone for infringement, but for want of a valid patent also. It points not only to the patents cited in the patent office proceedings as anticipations but to others overlooked there, particularly the Children patent No. 1,185,059, issued in 1916, for improvements in pumps for transferring oils from a barrel. Appellants counter these contentions by insisting that the failure of appellee to cross-appeal has made binding on it, the finding and decree below that the letters patent were valid. They insist that it may not now attack the decree with a view of enlarging its own rights or lessening the rights of its adversary, it may only support the decree. U. S. v. American Railway Express Company, 265 U.S. 425, 44 S. Ct. 560, 68 L. Ed. 1087; Morley Construction Company v. Maryland Casualty Company, 57 S. Ct. 325, 81 L. Ed. ___, February, 1937. The validity of the patent being established by the decree below, say appellants, this court is confined to considering whether there was infringement, and if appellants prevail on this issue, the decree of dismissal must be reversed. Appellee on its part insists, citing Ottenheimer Brothers v. Libuwitz (C.C.A.) 74 F.(2d) 858, that if there should be a reversal of the decree, the whole matter would stand opened up anew. We need not determine where the right of this contention lies for, while we have the gravest doubts whether appellants' patent is valid at all, we are quite sure that it is so only as to the combination as it is precisely and definitely set out in the allowed claim, and that as so limited appellee's device does not infringe it. The patent claim in suit is as to a device so elemental and so simple, so related to, if not identical with other devices in the same art, that it is difficult to see how patentable invention may be ascribed to it in any form. But we are in no doubt that if there is any invention in it it is entitled to protection only within the narrowest limits, and when confined precisely to the form claimed. Patents on simple combinations should be, they are difficult to obtain. If sustained, they should be, they are confined strictly to the particular combination claimed. Dry Hand Mop Co. v. Squeez-Ezy Mop Co. (C.C.A.) 17 F.(2d) 465. Such patents are not easily infringed for while in principle the doctrine of equivalence is applicable to them, it is only so when most narrowly circumscribed. Shepard v. Carrigan, 116 U.S. 593, 6 S. Ct. 493, 29 L. Ed. 723; Sears, Roebuck & Co. v. Valjean, supra; Edwards v. Johnston Formation Testing Corporation (D.C.) 44 F.(2d) 607.
Affirmed.
NOTES
[*] Rehearing denied April 19, 1937. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511267/ | 88 F.2d 545 (1937)
BRANCH
v.
CAHILL.
No. 8160.
Circuit Court of Appeals, Ninth Circuit.
February 23, 1937.
George R. Andersen, of San Francisco, Cal., for appellant.
H. H. McPike, U. S. Atty., and Robert L. McWilliams, Asst. U. S. Atty., both of San Francisco, Cal. (Arthur J. Phelan, U. S. Immigration and Naturalization Service, of San Francisco, Cal., on the brief), for appellee.
Before MATHEWS and HANEY, Circuit Judges, and NETERER, District Judge.
HANEY, Circuit Judge.
Appellant has appealed from an order denying a petition for a writ of habeas corpus filed in his behalf.
Appellant is a subject of Great Britain, and was admitted to the United States in 1923.
8 U.S.C.A. § 137 provides for the exclusion of certain classes of aliens, including, "(e) Aliens who are members of or affiliated with any organization, association, society, or group, that writes, circulates, distributes, prints, publishes, or displays * * * any written or printed matter of the character described in paragraph (d)."
The matter described in paragraph (d) is "* * * any written or printed matter * * * advising, advocating, or teaching: (1) the overthrow by force or violence of the Government of the United States."
Paragraph (g) provides for deportation of "any alien who, at any time after entering the United States, is found to have been at the time of entry, or to have become thereafter, a member of any one of the classes of aliens enumerated in this section."
On October 5, 1934, the district director of the Immigration and Naturalization Service recommended that the Secretary of Labor issue his warrant for the arrest of *546 appellant on the ground that appellant had violated the above statutes. Warrant was issued on October 30, 1934, and ordered that appellant be given a fair hearing. Appellant was arraigned on November 17, 1934. After the hearing, the immigrant inspector who had conducted the hearing recommended deportation. The Board of Review on May 29, 1935, recommended deportation of appellant on the ground "that he has been found in the United States in violation of the Act of Oct. 16, 1918, as amended by the Act of Oct. 16, 1918, as amended by the Act of June 5, 1920, in that he is affiliated with an organization, association, society and group that writes, circulates, distributes, prints, publishes, and displays printed matter advising, advocating, and teaching the overthrow by force and violence of the government of the United States."
On June 17, 1935, Assistant to the Secretary of Labor ordered deportation. Thereafter the petition in the present proceeding was filed.
Appellant contends that the evidence is insufficient to show that he was affiliated with an organization which believes in the overthrow of the government by force and violence.
In such a proceeding the order denying the petition must be affirmed if there is any evidence from which the conclusion of the administrative tribunal could be deduced. United States ex rel. Vajtauer v. Com'r of Immigration, 273 U.S. 103, 106, 47 S. Ct. 302, 303, 71 L. Ed. 560.
1. There is ample evidence to show that appellant was "affiliated" with the Communist Party. He was employed as managing editor of the "Western Worker" which is, as stated in the paper, "published on the 1st and 15th of every month by the Communist Party, U. S. A." Appellant was instructor and had been a director in the "San Francisco Workers School," the nature of which is explained by the following excerpt from an announcement of courses:
"It is necessary to state that the Workers School is the only school in San Francisco which authoritatively bases its education on the theory of Marxism-Leninism under the official guidance and leadership of the Communist Party of the U. S. A. and the Communist International."
One of the courses offered by the school was "Agitation and Propaganda Methods" which, as stated by the announcement, was "limited to members of the Communist Party." There was evidence that appellant taught one of such classes. There was evidence that appellant addressed a meeting at Oakland, Cal., on June 16, 1934, and at that time solicited funds for the support of the Communist Party. Other evidence was before the administrative tribunal, but the foregoing is sufficient to show that appellant was "affiliated" with the Communist Party, within the definition as stated by this court in Wolck v. Weedin, 58 F. (2d) 928, 930.
2. There is likewise ample evidence to show that the Communist Party advocates "the overthrow by force or violence of the Government of the United States."
The "Communist Manifesto" states:
"The Communists disdain to conceal their views and aims. They openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions. Let the ruling classes tremble at a Communist revolution."
Although many quotations could be made from the evidence in the proceeding, there are many in "Toward Soviet America" by Foster, which was introduced by appellant. It is said therein, p. 212:
"By the term `abolition' of capitalism we mean its overthrow in open struggle by the toiling masses, led by the proletariat. Although the world capitalist system constantly plunges deeper into crisis we cannot therefore conclude that it will collapse of its own weight. On the contrary, as Lenin has stated, no matter how difficult the capitalist crisis becomes, `there is no complete absence of a way out' for the bourgeoise until it faces the revolutionary proletariat in arms."
"It is the historical task of the proletariat to put a last end to war. Nevertheless, the working class cannot itself come into power without civil war. * * *" P. 213.
In this connection, see Kenmotsu v. Nagle (C.C.A.9) 44 F.(2d) 953, 955; Ex parte Vilarino (C.C.A.9) 50 F.(2d) 582, 583, 586.
There is evidence that appellant shared the view. In a speech at a street demonstration he stated, according to one witness, that "they would change the capitalistic *547 war into a civil war and overthrow this government." In a conversation with another witness he said, according to the witness, "they were forced to use violence and force and that is the way they intended to do it."
The order is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511315/ | 88 F.2d 175 (1937)
NUVEEN
v.
BOARD OF PUBLIC INSTRUCTION OF GADSDEN COUNTY, FLA., et al.[*]
No. 8253.
Circuit Court of Appeals, Fifth Circuit.
February 16, 1937.
*176 H. M. Taylor, of Quincy, Fla., and C. L. Waller and Claude Pepper, both of Tallahassee, Fla., for appellant.
Wm. J. Oven and W. J. Oven, Jr., both of Tallahassee, Fla., for appellees.
Before FOSTER, SIBLEY, and HOLMES, Circuit Judges.
*177 SIBLEY, Circuit Judge.
John Nuveen's bill in equity was dismissed on a motion asserting it to be without equity and barred by laches and by a previous election of inconsistent remedies. The District Judge sustained the first two grounds and ignored the last. Having concluded that the bill ought to be entertained, we will deal with all three in order.
The bill presents an unusual situation. In 1907 (Acts Fla.1907, c. 5844) a new legislative charter was granted the city of Quincy, in Gadsden county, Fla., which expressly authorized it to issue bonds for the purpose of erecting a schoolhouse and maintaining a system of public education. An election was held in 1909 which authorized such bonds. At that time there was no statute for the validation of bonds, and to quiet some question the Legislature on May 10, 1909, made a special act (Acts Fla.1909, c. 6095) that the bonds "be and the same are, hereby declared legal and valid, * * * and all the defects or other irregularities in such proceedings * * * are hereby cured and the issuing and sale of said bonds as provided for by said ordinance, are hereby authorized and permitted." Among the bonds provided for by the ordinance were included, "for the purpose of erecting a school-house and maintaining a system of public education in said city $10,000." Nuveen in good faith bought this $10,000 of bonds for a little less than par in October, 1909. We shall speak of his payment as $10,000. The bonds were negotiable, and contained the usual recitals of legality. Meanwhile, on August 21, 1909, the city of Quincy had entered into a contract with the Board of Public Instruction of Gadsden county, whereby the former leased to the latter for fifty years a described lot owned by the city, the board agreeing to pay $8,000 in installments toward the erection thereon of a school building to cost not less than $17,000, which the city agreed to build at once. The board covenanted to keep the building in repair and insured, and to run a public high school in it for the period of the lease, the lease to be forfeited on failure to run the school for two years. The city put the money got from Nuveen and that supplied by the board into a separate fund and used all of it to erect the building, which still stands in good repair. The city paid the interest on Nuveen's bonds until January 1, 1914. In 1911 the Supreme Court of Florida in Brown v. City of Lakeland, 61 Fla. 508, 54 So. 716, held that while the Florida Constitution authorized the Legislature to incorporate municipalities and to prescribe their jurisdiction and powers, in view of other provisions about a uniform system of free schools, a city could not issue bonds to erect a schoolhouse and maintain a system of public education in the municipality, and it enjoined the issue of such bonds. A taxpayer of the city of Quincy in turn sought and obtained an injunction against the collection of further taxes to pay these school bonds, final judgment being given in 1916. Munroe, City Treasurer, v. Reeves, 71 Fla. 612, 71 So. 922. The Board of Public Instruction of Gadsden county then called an election to authorize it to issue $12,000 of bonds "for acquiring, erecting and furnishing present school building and grounds, and for purchase, redemption and cancellation of present bonded obligation standing against present school building, etc." The vote was more than three to one to issue the new bonds. On a validation proceeding, then authorized by statute, it was objected that the school district could not properly make restitution to Nuveen for the city, especially as the city's bonds had been declared void. Validation was refused. On May 3, 1920, the city officials met with the Board of County Commissioners and the Board of Public Instruction of Gadsden county and they adopted a joint resolution reciting the history of this matter, that the community had a burden both legal and moral to pay the bonds, since the proceeds were in good faith used by the community, and that they favored an election for the issuance by the school district of $17,500 of bonds to buy the school building from the city and to enable the city to pay its old bonds. The Legislature in 1921 passed a special act (Sp.Acts Fla.1921, c. 9057) authorizing the city "to restore and repay the consideration" of the bonds, and especially empowering it "to make such repayment from the proceeds of any sale it may make of the school property acquired in part by the proceeds of the said bonds." At about this same time, however, a new contract of lease was made between the city and the board which extended the term to eighty-eight years and added to the burdens of the board as lessee the assessments for constructing and paving some adjacent sidewalks and streets. The proposed bond election was duly called and held July 25, 1922, and resulted in a tie vote. In another election in August following a majority voted against the bonds. Nuveen knew of these efforts to pay him, and had delayed *178 to take any legal action at the request both of the city and the public school officials. On January 25, 1923, he filed a petition for mandamus to require the city to levy taxes to pay him, esteeming that since he had not been a party to previous litigation his rights as a bondholder were not controlled thereby. The Supreme Court gave final judgment against him on December 20, 1924, State ex rel. Nuveen v. Greer, 88 Fla. 249, 102 So. 739, 742, 37 A.L.R. 1298. The court, however, said: "Here the bonds are invalid, and there is no duty to pay the bonds. But there would be a legal duty to pay a judgment duly obtained for the return of the money with appropriate interest, that was received and used by the municipality. * * * Chapter 9057, Sp.Acts of 1921, appears to be designed to authorize the municipality, notwithstanding the lapse of time, to return with interest thereon the money received by the city for the bonds in question, though there appears to be a clerical error in the date of the bonds named in the act." Encouraged by the quoted remarks, Nuveen promptly sued the city for the return of his money. The city pleaded the statute of limitations. After delays whose cause does not appear, the Supreme Court finally upheld that defense July 26, 1934. Nuveen & Co. v. City of Quincy, 115 Fla. 510, 156 So. 153. The following December the present bill in equity was filed against the city and the board and the trustees of the school district. Thus detailing the facts, the bill prayed that the city be decreed a trustee of the school building as to the proportion of its value due to the investment of Nuveen's money in it, the lot being alleged to be of the value of $2,000, Nuveen's contribution $10,000, and the board's $8,000; that an account be taken of the fair rentals due to Nuveen for its use; that necessary deeds be made to Nuveen to express his interest in the property; that a partition be made by sale if necessary; and in the alternative that Nuveen's contribution be charged as a lien on the building and that it be sold to pay the lien if not otherwise discharged; and there was a prayer for general relief.
Putting aside for the present the questions of laches and election of remedies, and considering the transaction as recent, we are of opinion that there is equity in the bill. The respondent appellees are all creatures of the Florida Legislature whose rights and duties as public corporations are largely in legislative control. The Legislature joined with the city in holding out the bonds as good and valid before they were sold, and in 1921 joined the city and the board in recognizing the right of Nuveen to his money and the justice of recognizing in him some claim in and to the building, and of selling it to pay him. We accept the decisions of the Supreme Court that the city had no power and the Legislature could give it none to have a school building, and that no valid debt to be paid by city taxation could be created to build one, the issued bonds being mere nullities. That being true, the money paid to the city officers for that purpose was never the money of the city but remained the money of Nuveen. If the city had kept it or had used it for some proper municipal purpose, Nuveen could have recovered it at law. But the city officers did not put it to any proper municipal use but put it into this building along with other money contributed by the board. Thereafter the city could not be held liable to repay it, because if its officers could not make the express promise in the bonds they could not raise a valid implied promise to pay by using the money for this same improper purpose. Cities cannot so easily evade the constitutional limits of their power. For this reason, independently of the plea of limitation on which Nuveen was defeated in his effort to hold the city as for money had and received to his use, he must have failed on the merits of his claim so soon as it appeared that the city no longer held his money and had not used it for a proper municipal purpose but had applied it to this unauthorized use. City of Litchfield v. Ballou, 114 U.S. 190, 5 S. Ct. 820, 29 L. Ed. 132. Nuveen's true right and his only effective remedy was, recognizing the invalidity of his bond contract and abandoning any effort to hold the city to repay his money as a debt, to follow it into its investment in this building. Equity by treating the money as a trust will assist him in so doing. There would be little difficulty if the city with his money alone had bought the lot and building. The difficulty comes because the city previously and we suppose rightfully owned the lot, and because the Board of Public Instruction contributed $8,000. But there happens to be no doubt that all of Nuveen's money went into the building, and that his money and the $8,000 from the board produced the building without being commingled with any tax raised money of the city. The city contributed only the lot. It is abundantly clear that the city, the board, and Nuveen *179 all acted in good faith, believing that what was done was valid. There was no purpose to mislead or deceive on the city's part, if indeed its misrepresentations of law could be deceit. All having been honestly mistaken, there is no reason why one should lose its contribution rather than the others. The indivisible thing that was produced ought equitably to be shared in proportion to their several contributions toward it. The equity of the situation is no different from what it would have been if they had paid $2,000, $10,000, and $8,000 to buy the lot and schoolhouse ready built, putting the title into the city for a use that failed. Equity will declare a constructive trust in proportion to the contributions of purchase money. On the statements of the bill Nuveen equitably owns a one-half interest in the house and the ground on which it stands.
He is not entitled to charge his contribution to the building as a lien and to have the building sold to satisfy it. When an individual has wrongfully mingled another's funds with his own, a lien may be a proper remedy, but to grant it here would give Nuveen a priority over these public bodies who only shared in a general mistake, and through a sale they might lose their investments. It would be in substance to give Nuveen a secured claim affecting the city in a way too nearly like the establishment of a debt against it. Equity will not give a lien against public property when the law prohibits a debt. City of Litchfield v. Ballou, supra. Some of the cases deny not only a lien but any relief, but they will be found to involve either a positive prohibition of law making a case of par delictum or an inextricable commingling with tax money of the municipality, neither of which circumstances obtains here.
The leases between the city and the board ought not to control the equities of the parties. According to them, the board paid its $8,000 for the use of the building during the lease, the board claiming no further interest in it. But these leases were not authorized by Nuveen and bring in no income to him. They ought not to bind him. Indeed they are part and parcel of the city's ultra vires effort to own a school building. If the city is not able to tax to build it, it certainly should not be able to take a stranger's money for that use, keeping both the money and the building. The leases being set aside, the board ought to be remitted to its equity of sharing with Nuveen and the city; leaving the way clear for such adjustments among themselves as equitable co-owners, whether by way of sale or rental, as may be within their several powers. The city apparently has power under the special act of 1921 to sell the property, or certainly its interest in it, to settle this controversy. A court of equity after decreeing the interests of the several parties can order a sale for partition, but should do so only after a reasonable opportunity for the parties so to adjust their rights as to avoid embarrassment to the public school.
Our conclusion that there is general equity in the bill is not without support in the authorities. Some of them are collected and commented on in Shaw v. Board of Education, 38 N.M. 298, 31 P.(2d) 993, where a similar relief under like circumstances was granted. A special relief touching a public construction adapted to the circumstances was upheld by this court recently in Crisp County v. S. J. Groves & Sons, 73 F.(2d) 327, 96 A.L.R. 391.
We do not think that Nuveen is chargeable with such laches as ought to defeat him. The Florida limitation statutes refer to actions at law. There is in equity no limitation statute, but only the doctrine of laches. Hayes v. Belleaire Development Co., 120 Fla. 326, 162 So. 698. Legal limitations are, of course, applied in equity to rights which are legal or which optionally might have been asserted in a law court. Webb v. Powell (C.C.A.) 87 F.(2d) 983. But in a case of pure equity laches is not a mere matter of lapse of time, but requires a consideration of the relations of the parties and the circumstances of the case. It is that delay and neglect which renders it difficult or dangerous to make inquiry or inequitable to permit relief. Oliver v. Piatt, 3 How. 333, 11 L. Ed. 622; Tampa Water Works v. Wood, 104 Fla. 306, 139 So. 800; Fort Pierce Bank & Trust Co. v. Sewall, 113 Fla. 811, 152 So. 617. In this case the time has been long, but there has been neither quiescence nor acquiescence on Nuveen's part. No one suspected the invalidity of the bonds until 1914. In 1916 at the suit of a taxpayer the Supreme Court of Florida held them invalid. But Nuveen was encouraged by the city and the board to believe his rights would be protected, and was requested to defer action. The plan of having the board, which could own a school building, to buy it seemed practicable and was encouraged by the special act of 1921 authorizing the city to sell the property and pay Nuveen. But the electorate voted *180 against it. Nuveen thinking that by reason of the contract clause of the Federal Constitution the decision in the taxpayer's suit would not prevail against him litigated this question disastrously. As we now know, he should then have filed the present bill but, misled by expressions of the Florida court, he sought a remedy by a suit on an implied promise to repay him his money. The only delay that is subject to criticism and not explained is the long pendency of that suit. But with a suit in court Nuveen can hardly be said to be asleep. No third party has become involved, no loss of evidence or doubtfulness of the truth has arisen. The same parties with the same rights in this building persist, all fully aware of the entire facts and not disputing them. Equity will not consider as laches a delay due to a bona fide effort to assert a right at law the failure of which really established the right to go into equity. Williams v. Neely (C. C.A.) 134 F. 1, 69 L.R.A. 232; Southern Pac. Co. v. Bogert, 250 U.S. 483, 484, 39 S. Ct. 533, 63 L. Ed. 1009. If Nuveen could have gotten his money back from the city, he should not be allowed in equity to take the public school building.
It is also urged that the statutory limitation on suits to recover real estate ought to be applied. We think no title should accrue that way to the city or the board, nor their possession be so defended. The board has never claimed possession except as the tenant of the city, bound to use the property for school purposes only. The city has successfully asserted that it has no right to have a school or a school house. How can it get rights by such a possession forbidden to it by law? Both the city and the board by solemn joint resolution in 1920 elaborately set forth the rights of Nuveen in this building, urging new bonds to pay the old ones "that the claims and obligations because thereof standing against the present school building, furniture and grounds shall be fully and promptly paid and satisfied." The city since 1924 has consistently resisted being made to pay Nuveen any money, but the record does not show that either it or the board ever denied his having a right in the building until the present bill was answered.
Nevertheless, lapse of time ought to count against Nuveen's claim for an account of past use and occupation. His allowing this claim to accumulate for so long a period without any insistence on payment would put a serious and unjust burden on the board, which had other arrangements for the use of the building and had no part in the original dealings with Nuveen. And the use for a school forbidden to the city ought not to be made the basis of a burden on it, certainly not beyond its interest in this property which the Legislature seems to have made salable for the adjustment of this whole matter. In making this account, the court should consider whether ordinary periods of limitation ought not to apply, or some relieving principle of equity. This particular question not having been argued before us, we will not more definitely decide it.
Lastly, there has been no such election by Nuveen as should destroy his equitable right. There is much learning in the books about the election of remedies which precludes a second choice. Some of it is of a piece with the choice which was once forced on a litigant between demurring and pleading: if he mistook the law, he lost his right to try the facts. An election of remedies may be spoken of when the true right of the litigant is plain and he is making a choice of paths to reach it; but what is most frequently called an election of remedies is really an election or choice of rights, language becoming confused by the ancient practice in the law of testing all rights by the forms of remedy. The doctrine of election has been said not to be a favorite of equity, Friederichsen v. Renard, 247 U.S. 207, 38 S. Ct. 450, 62 L. Ed. 1075, and it should not be when it sacrifices the true right to a mistake. In the cited case the plaintiff sought to rescind a contract for fraud, but was found to have so altered the property involved that he had no right to rescind, but he was allowed in the same suit to enforce the contract by recovering damages for the fraud. In Henderson Tire & Rubber Co. v. Gregory (C.C.A.) 16 F.(2d) 589, 49 A.L.R. 1503, the question was whether an unsuccessful suit to reform a contract barred one to recover damages for breach of it, the answer being no. It seems to us that there was no great room for argument, but a good discussion and citation of authorities was made. Robb v. Vos, 155 U.S. 13, 15 S. Ct. 4, 39 L. Ed. 52, held that where an unauthorized person assumed to act for another, and the other knowing the facts sued to enforce rights under the unauthorized act, he ratified it and could not afterwards repudiate it. The same result would have followed any other form of unequivocal ratification, but if the principal *181 had at first resisted the contract as unauthorized and had lost on that issue, we see no reason why he could not afterward assert any right the contract gave him. A choice between rights is often presented with varying results as to finality. Thus if property be converted by a sale to a third person the owner may sue the buyer for his property, or the seller for the conversion, or may waive the tort and sue the seller for the price received. If he does the last, he can never do either of the former, but if he sues the buyer for the property and is defeated on some ground other than his want of title, he ought to have his remedy against the seller. So in case of a transaction claimed to be voidable for fraud, if the person defrauded with knowledge affirms the contract either by suing on it or otherwise, he cannot afterwards repudiate it; but if he is defeated in his contention of fraud, the contract being held good, it would be unreasonable to hold that he cannot enforce it in the same suit or in some other suit if estoppel by judgment does not prevent. Yet again, if the beneficiary of a trust conceives that the trustee has made a wrong use of the fund, he may follow the fund or he may hold the trustee for a devastavit. To do the former would in some circumstances be a waiver of any right against the trustee; but if the trustee were sued and should prove that it was no devastavit but a proper investment the beneficiary would not lose his right to the investment; and if he first elected to follow the fund but failed because of a defense of bona fide purchaser, should he be defeated in a subsequent effort to charge the trustee? The only case we find in which the federal Supreme Court seems to have cut off a substantial right by applying a so-called election of remedies is United States v. Oregon Lumber Co., 260 U.S. 290, 43 S. Ct. 100, 67 L. Ed. 261. We understand and appreciate more readily what is said on that subject in the dissenting than in the majority opinion. We believe the case should rest properly on the idea that the previous judgment estopped against the reassertion of the very same acts of fraud. In the case before us Nuveen thought he had a right to recover money from the city, and tried out two causes of action of that sort. He had no such right. But the city's success in maintaining that it could not borrow his money established that the money had not ceased to be his own. It is the very basis of his right in equity to follow it into the building which it helped to produce. He has made a long and costly search for a true remedy, but he has made no choice which the city ought to be heard to say has lost him his true right. The judgment is reversed and the cause remanded for further proceedings not inconsistent herewith.
HOLMES, Circuit Judge, (dissenting).
Aside from the defenses of laches, limitations, election of remedies, and no lien where there is no debt, I think there was a failure to trace the money of appellant into the school building until it had become so intermingled with the property of others as to render identification impossible and effort at restoration inequitable. The city owned the lot before the bond issue; the county contributed $8,000. The Supreme Court of Florida has held that the bonds are void because issued in violation of the Constitution of the state. It has further held that the debt is barred by the statute of limitations.
The taxpayers and patrons of the school district are the ones who will suffer if the city loses its lot and the county its money. They are the beneficiaries intended to be protected by state constitutional provisions restricting the borrowing powers of cities. We must enforce the Constitution of the state as construed by its court of last resort, provided it does not contravene any provision of the Federal Constitution. That the bond issue was void and the debt is barred have been finally adjudicated. It is equally certain that there can be no lien without a debt and no trust without a res. The res must be identifiable and in a form susceptible of reclamation without impairing the rights of others. The effect of the opinion of the court is to make appellant a tenant in common of the school property, but it draws back from the logic of the decision and denies any return thereon for over twenty years. The county board holds the property under an eighty-eight-year lease.
This case is different from Chapman v. Board of County Com'rs of Douglas County, 107 U.S. 348, 2 S. Ct. 62, 27 L. Ed. 378, in which the res was traceable directly into the possession of the county, and was easily identified, being land which it acquired by deed from the plaintiff. Furthermore, the county was authorized to acquire the land and its contract was held illegal solely because it undertook to pay for the same in an unauthorized manner. In the case at bar, the city of Quincy had and has no power *182 to expend money for the purpose of public education. Munroe v. Reeves, 71 Fla. 612, 71 So. 922; State ex rel. Nuveen v. Greer, 88 Fla. 249, 102 So. 739, 37 A.L.R. 1298.
This case is apposite to City of Litchfield v. Ballou, 114 U.S. 190, 5 S. Ct. 820, 822, 29 L. Ed. 132, in which funds acquired by a bond issue, void because in excess of a constitutional limitation on indebtedness, had been used in the erection of a water works plant on lands already owned by the city. The court held that inasmuch as the city was not liable on its express contract, as evidenced by the bonds, it could not be held liable for the same debt on an implied contract; that the constitutional inhibition was as "binding in a court of chancery as a court of law"; that "equity will no more raise a resulting trust in favor of the bondholders than the law will raise an implied assumpsit against a public policy so strongly declared." Continuing, the court said:
"If the complainants are after the money they let the city have, they must clearly identify the money or the fund, or other property which represents that money, in such a manner that it can be reclaimed and delivered without taking other property with it, or injuring other persons or interfering with others' rights."
Finally, when the appellant here was before the Supreme Court of Florida in Nuveen v. City of Quincy, 115 Fla. 510, 156 So. 153, 158, that court said:
"In this case there was no authorized purchase of property or sale of bonds by the city and no misapplication of the funds of the plaintiff. There was an intentional purchase of city bonds, the possible inherent or latent constitutional or fundamental infirmities of which bonds were in law conclusively presumed to be known to all parties, the bonds not having been adjudged to be valid under the Constitution; and the subsequent adjudication of their illegality does not operate to raise a trust out of the transaction in favor of the party who has paid for the bonds he intended to buy, when the city cannot pay the bonds because forbidden to do so by the paramount law. * * *
"The consideration that should the bonds be adjudged to be illegal and void, the city may legally return the money it received for the bonds and used for a city purpose, does not create a trust against the city and in favor of those who bought city bonds which were issued and bought in good faith, but which in law are legally unauthorized and void because issued in violation of the Constitution, though the illegality was not known until the validity of the bonds was duly put in issue and adjudicated; all parties being in law held to know that an adjudication of an issue of validity or invalidity is a legal condition on which all municipal bonds are issued."
I think the decision of the District Court should be affirmed.
NOTES
[*] Writ of certiorari denied 57 S. Ct. 794, 81 L.Ed. ___. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511351/ | 595 S.W.2d 220 (1980)
Byron CULPEPPER, Appellant,
v.
STATE of Arkansas, Appellee.
No. CR 80-35.
Supreme Court of Arkansas.
March 17, 1980.
*221 John W. Achor, Public Defender by William H. Patterson, Jr., Chief Appellate Atty., Little Rock, for appellant.
Steve Clark, Atty. Gen. by Ray Hartenstein, Asst. Atty. Gen., Little Rock, for appellee.
STROUD, Justice.
Appellant entered a plea of guilty on January 22,1979, to the charge of burglary. The court sentenced appellant to "five (5) years suspended with three (3) years probation; all conditioned on good behavior, steady employment and support of his family," as reflected by judgment entered on the same date. Four months after appellant was sentenced, the State petitioned the court to revoke his probated sentence on the grounds that he had violated the terms of his probation by committing the offense of aggravated robbery. On June 6, 1979, the court granted the petition to revoke the suspended and probated sentence entered on January 22 and sentenced appellant to 15 years imprisonment. Alleging that the trial court erred in increasing his sentence from 5 years to 15 years, appellant brings this appeal.
The appellant alleges that the law is unclear and confusing concerning sentencing since the Criminal Code was adopted and that he was denied due process by failure of the trial court to adequately advise him of the potential maximum sentence if he violated the terms of his suspended sentence or probation. We acknowledge that when the Criminal Code became effective on January 1, 1976, the failure of the Act to expressly repeal conflicting previous statutes has led to considerable confusion in this area of our criminal law. Prior to the adoption of the Criminal Code, the trial court, in addition to authority to place a defendant on probation, clearly had authority to either:
(1) Suspend execution of jail sentences pursuant to Ark.Stat.Ann. § 43-2326 (Repl.1977):
Hereafter, all courts of record in this State shall have the authority to suspend the execution of jail sentences or the imposition of fines, or both, in all criminal cases, pending before said courts.
or
(2) Postpone pronouncement of final sentence and judgment pursuant to Ark. Stat.Ann. § 43-2324 (Repl.1977):
Whenever, in criminal trials in all courts of record, a plea of guilty shall have been accepted or a verdict of guilty shall have been rendered, the Judge trying the case shall have authority, if he shall deem it best for the defendant and not harmful to society, *222 to postpone the pronouncement of final sentence and judgment upon such conditions as he shall deem proper and reasonable as to probation of the person convicted, the restitution of the property involved, and the payment of the costs of the case. Such postponement shall be in the form of a suspended sentence for a definite number of years, running from the date of the plea or verdict of guilty and shall expire in like manner as if sentence had been pronounced; provided however, the Court having jurisdiction may at any time during the period of suspension revoke the same and order execution of the full sentence.
In Canard v. State, 225 Ark. 559, 283 S.W.2d 685 (1955), the court construed these two statutes and pointed out that although previous decisions had sometimes made distinctions:
no distinction need now be made, and that it is immaterial whether the trial court actually (a) postpones the pronouncement of the sentence or (b) postpones the execution of the sentence already pronounced.
Ark.Stat.Ann. § 43-2331 (Repl.1977) adopted by the legislature in 1973 also made no distinction:
Upon entering a judgment of conviction of any offense not punishable by death or life imprisonment, the circuit court in which such judgment is entered, when satisfied that the ends of justice and the best interest of the public, as well as the defendant, will be served thereby . . ., the court may suspend the imposition or execution of sentence and place the defendant on probation for such period and upon such terms and conditions as the court deems best. (Emphasis added.)
A distinction does now exist, however, due to the adoption of the Criminal Code, a portion of which provides in Ark.Stat.Ann. § 41-803 (Repl.1977) as follows:
(1) No defendant convicted of an offense shall be sentenced otherwise than in accordance with this Article [§§ 41-801 41-1309].
(4) If a defendant pleads or is found guilty of an offense other than capital murder, the court may suspend imposition of sentence or place the defendant on probation, in accordance with Chapter 12 [§§ 41-1201-41-1211] of this Article [emphasis added].
All sentences are controlled by its provisions and, therefore, any provisions of the prior law that are inconsistent are repealed by implication. Inasmuch as the statute only authorizes the court to suspend imposition of sentence or place the defendant on probation, the suspension of the execution of sentence is no longer authorized and § 43-2326 is repealed by implication. Ark.Stat.Ann. § 43-2324 has been superseded by recodification into several different parts of the new Criminal Code and is also repealed by implication. Finally, § 43-2331, insofar as it conflicts with the provisions of the Criminal Code and specifically insofar as it authorizes the suspension of the execution of sentence is repealed by implication.
We agree with appellant that he is entitled to know the effect of his sentence. This is clearly the spirit of the Code which now requires in Ark.Stat.Ann. § 41-1203(4) (Repl.1977) that the defendant be given a written statement explicitly setting forth the terms of the suspension of imposition of sentence or probation; and whereas trial courts have typically used the phrase "on good behavior" in the past, § 41-1203(1) requires as an express condition of every suspension or probation that the defendant "not commit an offense punishable by imprisonment during the period of suspension or probation." The Criminal Code did not repeal Ark.Stat.Ann. § 43-2305 (Repl.1977) which provides:
The law in relation to the punishment, pains and penalties of all persons when convicted, so far as to relates to them, and the sentence, shall be read to each convict, and the consequences fully declared to him, so that such person so convicted and sentenced, shall in no instance be deemed ignorant of the sentence pronounced on him. *223 There is a substantial difference between advising a defendant that he is sentenced to 5 years suspended subject to certain behavioral requirements and in advising a defendant that the imposition of sentence will be suspended or postponed for 5 years conditioned on the same behavioral requirements. If the appellant had been sentenced in compliance with § 41-803 by the suspension of the imposition of sentence, rather than by the suspension of the execution of sentence, the trial court could have sentenced him to 15 years imprisonment upon revocation of the suspension, as is authorized by Ark.Stat.Ann. § 41-1208(6):
If the court revokes a suspension or probation, it may enter a judgment of conviction and may impose any sentence on defendant that might have been imposed originally for the offense of which he was found guilty
We should, however, acknowledge that § 41-1208(6) was partially repealed by implication in 1979. The legislature amended Ark.Stat.Ann. § 43-2332 (Repl.1977) which otherwise deals with the duties, authority and salaries of a probation officer and limited the sentence authorized upon revocation of probation:
Thereupon the court may revoke the probation and require him to serve the sentence imposed, or any lesser sentence which might have been originally imposed. (Emphasis added.)
In an effort to further clarify the confusion between the Criminal Code and previous statutes, we point out that the suspension of imposition of sentence and probation, as was apparently intended by the trial court, is at variance with the Code. Reference is made throughout the Code to suspending imposition of sentence or placing the defendant on probation, but in no instance do we find provision for both.[1] Both terms are defined in Ark.Stat.Ann. § 41-801(1) and (2), and although both definitions require that the defendant be released "by the court without pronouncement of sentence" (in contradistinction to the actions of the trial court in this case), the two cannot occur simultaneously, as the former is "without supervision" and the latter requires "supervision of a probation officer."
The decision of the trial court is accordingly modified and the sentence of appellant is reduced from 15 years to 5 years.
NOTES
[1] The reference in Ark.Stat.Ann. § 41-1206(2) (Repl.1977) to "multiple periods of suspension or probation" is applicable only to multiple offenses. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511358/ | 595 S.W.2d 907 (1980)
Jane JACKSON et al., Appellant,
v.
CITY OF HOUSTON, Appellee.
No. B2297.
Court of Civil Appeals of Texas, Houston (14th Dist.).
March 5, 1980.
Rehearing Denied April 2, 1980.
Mark Vela, Stanley G. Schneider, Doherty, Vela, Poser & Collins, Houston, for appellant.
Robert M. Collie, Jr., City Atty., Dennis C. Gardner, Sr., John J. Hightower, Asst. City Attys., Houston, for appellee.
Before COULSON, JUNELL and MILLER, JJ.
*908 JUNELL, Justice.
Eighty-six members of the Airport Police brought this action against the City of Houston for declaratory relief alleging that they are "Policemen" within the meaning of the Texas Civil Service Statute, Tex.Rev. Civ.Stat.Ann. art. 1269m, § 2 (Vernon 1963),[1] and thus entitled to all benefits thereunder. The trial court found that the positions held by plaintiffs are not within the purview of the Civil Service Act. Plaintiffs appeal claiming that the trial court incorrectly interpreted the statute. We agree with the interpretation by the trial court and affirm the judgment.
The Civil Service Statute applies to designated persons in cities over 10,000 which have adopted it. It defines "Policeman," for purposes of civil service benefits, as "... any member of the Police Department appointed to such position in substantial compliance with the provisions of Sections 9, 10 and 11 of this Act, or entitled to Civil Service Status under Section 24 of this Act." Section 9 describes examinations a candidate must pass to qualify for the eligibility list. Section 10 describes the method of filling positions in the Department by appointment from the Police Commission's eligibility lists. Section 11 describes the procedure for maintaining records of persons certified to fill vacancies, and Section 24 is the "grandfather clause," allowing Civil Service Status to those already members of the Department at the time of passage of the statute.
The Civil Service Statute, article 1269m, by its terms applies only to members of the police department or fire department who fit the further qualification of having been appointed to that position by a designated process. Appellants in their answer to the City's request for admissions admitted that while employed as Airport Police they were not members of the Houston Police Department, but rather the department of aviation. They provided no proof that the further qualifications of Sections 9, 10 and 11 had been met for their employment as Airport Police. Thus, the statute by its terms does not apply to appellants.
Appellants contend that in construing the Civil Service Statute to exclude airport security personnel, who are peace officers, the court has allowed the City to illegally limit the authority of peace officers within the meaning of Tex.Rev.Civ. Stat.Ann. art. 4413 (29aa) (Vernon 1976).[2] That statute establishes the Commission on Law Enforcement Officer Standards and Education which administers the employment and certification of peace officers in Texas. Peace officers are individuals who meet specified statutory requirements and are certified as such by the Commission pursuant to article 4413 (29aa). Their duties are defined in Tex.Code Crim.Pro. Ann. art. 2.13 (Vernon 1977) as preserving the peace within their jurisdiction using all lawful means.
We hold that the City of Houston did not limit the statutory jurisdiction of a state certified peace officer by adopting the Civil Service Act. Article 1269m contains no provisions regarding duties, responsibility or authority of employees; it deals with benefits allowed civil service personnel. To get the benefits of the statute, appellants must fall within it. Appellants' attack on article 1269m is unfounded. If the City has in any way illegally restricted the statutory jurisdiction of a peace officer, that issue is not before this court, and is not reached. The only point raised on appeal concerns the trial court's interpretation of the Civil Service Act to exclude appellants; thus, that is the only issue addressed. As appellants have failed to show that the Act applies to them, the court below committed no error; thus, appellants' point is overruled.
Affirmed.
NOTES
[1] Amended with no pertinent changes: Tex. Rev.Civ.Stat.Ann. art. 1269m, § 2 (Vernon Supp.1980).
[2] Subsequently amended: Tex.Rev.Civ.Stat. Ann. art. 4413 (29aa) (Vernon Supp.1980). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511379/ | 939 F. Supp. 160 (1996)
Frederick PESCE, as Guardian of the Person and Property of Joan Pesce, a person alleged to be incapacitated, Plaintiff,
v.
GENERAL MOTORS CORPORATION, Defendant.
No. 94-CV-211.
United States District Court, N.D. New York.
August 13, 1996.
*161 Office of John Scarzafava, Oneonta, NY, for Plaintiffs, John Scarzafava, Elizabeth Little, of counsel.
Thorn and Gershon, Albany, NY, for Defendant, Arthur Thorn, Nancy Nicholson Bogan, of counsel.
MEMORANDUM-DECISION AND ORDER
HURD, United States Magistrate Judge.
Presently before the court are numerous motions filed by both parties, as outlined below. Oral arguments by the parties were heard by the court on June 13, 1996, in Utica, New York.
BACKGROUND
The plaintiff, Frederick Pesce, filed this diversity action on behalf of his wife Joan Pesce alleging that she was very seriously injured while driving her 1990 Chevrolet Berretta manufactured by defendant General Motors Corporation ("GM"). The claims include defective design and manufacture, breach of implied and express warranties, negligence, and strict products liability, seeking compensatory and punitive damages. Plaintiff also alleges a consequent loss of companionship and the services of his wife. The defendant denies the material allegations in the complaint and alleges various affirmative defenses.
FACTS
On February 4, 1992, Joan Pesce was driving her car within the Town of Hartwick, New York, west on County Route 11 which was partially snow covered. Mrs. Pesce approached the vehicle traveling in front of her, which was traveling at a slower rate of speed, and applied her brakes. She then skidded into the oncoming lane of traffic, and her vehicle was struck by a 1977 Oldsmobile being driven by a Gary Harrington.
Mrs. Pesce suffered severe permanent injuries, including brain damage. Many of the specific facts as to the causes of her injuries are hotly contested by the parties. The issue of how Mrs. Pesce sustained her injuries has partially to do with the manner in which the vehicles interacted during the crash sequence, which is also contested by the parties and the experts they have retained. Mrs. Pesce was unquestionably wearing her seat belt at the time of the incident. Plaintiff alleges that the seat belt in the Pesce vehicle manufactured by defendant GM failed to protect his wife. Several weeks after her injury *162 and during her hospitalization, Mr. Pesce received in the mail a recall notice from GM pertaining to the seat belts in Mrs. Pesce's Chevrolet. GM had discovered a manufacturing defect in vehicles like the 1990 Chevrolet Beretta, which potentially would render the front seat belts inoperative.
At some point after the collision, but before the beginning of litigation, the driver's shoulder belt "D" ring and shoulder belt retractor were "chiseled" out of the vehicle and are now missing and unaccounted for. GM contends that without the missing items to examine, there is no direct evidence of the failure of the seat belt to protect Mrs. Pesce.
DISCUSSION
A. Defendant's Motion for Summary Judgment
Summary judgment must be granted when the pleadings, depositions, answers to interrogatories, admissions and affidavits show that there is no genuine issue as to any material fact, and that the moving party is entitled to summary judgment as a matter of law. Fed.R.Civ.P. 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S. Ct. 2505, 2509, 91 L. Ed. 2d 202 (1986); Lang v. Retirement Living Pub. Co., 949 F.2d 576, 580 (2d Cir.1991). The moving party carries the initial burden of demonstrating an absence of a genuine issue of material fact. Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986); Thompson v. Gjivoje, 896 F.2d 716, 720 (2d Cir.1990). Facts, inferences therefrom, and ambiguities must be viewed in a light most favorable to the nonmovant. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1355, 89 L. Ed. 2d 538 (1986); Project Release v. Prevost, 722 F.2d 960, 968 (2d Cir.1983).
When the moving party has met the burden, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., 475 U.S. at 586, 106 S.Ct. at 1355. At that point, the nonmoving party "must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56; Liberty Lobby, Inc., 477 U.S. at 250, 106 S.Ct. at 2511; Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. at 1356. To withstand a summary judgment motion, sufficient evidence must exist upon which a reasonable jury could return a verdict for the nonmovant. Liberty Lobby, Inc., 477 U.S. at 248-49, 106 S.Ct. at 2510-11; Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. at 1356.
In a diversity action, the court must apply the substantive law of New York. Caiazzo v. Volkswagenwerk A.G., 647 F.2d 241, 243 (2d Cir.1981). The New York Court of Appeals has extended liability to vehicle manufacturers in matters often referred to as "second collision" cases. Tiner v. General Motors Corp., 909 F. Supp. 112, 116 (N.D.N.Y.1995). These cases involve defects which the plaintiff does not claim caused the accident itself, but rather enhanced or aggravated plaintiff's injuries. Bolm v. Triumph Corp., 33 N.Y.2d 151, 159, 350 N.Y.S.2d 644, 305 N.E.2d 769 (1973). Such cases involve incidents where a driver and possibly a passenger of a vehicle are involved in a collision with another vehicle or object during which time, as a result of the initial collision, the occupants of the vehicle move about and hit interior portions of the cabin or are ejected from the vehicle and injured. Caiazzo, 647 F.2d at 243 n. 2.
"In a products liability case it is now established that, if plaintiff has proven that the product has not performed as intended and excluded all causes of the accident not attributable to defendant, the fact finder may, even if the particular defect has not been proven, infer that the accident could only have occurred due to some defect in the product...." Halloran v. Virginia Chemicals Inc., 41 N.Y.2d 386, 388, 393 N.Y.S.2d 341, 361 N.E.2d 991 (1977); see also Codling v. Paglia, 32 N.Y.2d 330, 337-338, 345 N.Y.S.2d 461, 298 N.E.2d 622 (1973) (jury could correctly find that defendant was liable without direct proof of a malfunction, through inference); Fogal v. Genesee Hosp., 41 A.D.2d 468, 477-478, 344 N.Y.S.2d 552 (4th Dep't 1973) (while evidence in case was circumstantial, it was sufficient to affix liability to manufacturer).
*163 General Motors moves for summary judgment, and doing so, claims that having come forward, it meets the burden of proof necessary to establish that there is no genuine issue of material fact. GM argues that it is incumbent upon the plaintiff to come forward because "then the burden shifts to the nonmovant to proffer evidence demonstrating that a trial is required because a disputed issue of material fact exists." Weg v. Macchiarola, 995 F.2d 15, 18 (2d Cir.1993). Defendant contends that because the shoulder belt retractor and "D" ring are missing, and because the retractor is the allegedly defective item, that there can be no direct proof of the failure of the seat belt to protect plaintiff from enhanced injury during the collision.
Under such circumstances, GM argues that direct proof of the defect is not possible, and plaintiffs must circumstantially establish that the evidence excludes all explanation for the occurrence other than that the seat belt was defective and significantly enhanced Mrs. Pesce's injuries.
General Motors argues that it has, through the examination of evidence by several experts, established that the cause of Joan Pesce's injuries was in fact, not the failure of the seat belt retractor to lock, but rather the manner in which the Pesce vehicle and the other vehicle collided. An expert retained by defendant, Dr. Murray MacKay ("MacKay"), examined the injury pattern of the plaintiff and determined that in his expert opinion, the evidence appeared to be that the seat belt did lock, and therefore, there was no malfunction of the allegedly defective retractor. MacKay based his opinion upon several interpretations of evidence. First, MacKay opined that the right lower rib fractures of Joan Pesce are conclusive of the seat-belt locking. This opinion was buttressed with the fact that the lap portion of the seat belt, containing an "energy management loop," or webbing stitching designed to tear under direct pressure, was not torn. MacKay claimed that only direct pressure would tear the lap belt stitching. Because the direct pressure was allegedly absorbed by the shoulder belt, it was to be expected that the lap belt stitching would not be torn. Further, MacKay opined that the intrusion of the other vehicle into Mrs. Pesce's car, after impact, was twenty-seven inches. MacKay claimed this intrusion, which pushed the passenger-side door inwards twenty-seven inches, was what Joan Pesce hit her head upon, and claimed that there is a "witness" mark on the door from where she hit.
Another expert employed by defendant GM, Ms. Pamela Oviatt, conducted an engineering test called a "sled" test, to explain how under GM's theory Mrs. Pesce moved not forward, but to the side, to hit her head on the intruding door. The sled test consisted of a partially cut-away 1990 Chevrolet Berretta with a seat-belted "dummy" of the same size and weight as Mrs. Pesce. In a simulated accident, the cut-away vehicle with the "dummy" in place, was struck by crash-like forces from arguably the same angle as Mrs. Pesce's vehicle was struck. The defendant claims that the sled test conclusively showed that when a 1990 Berretta is hit from the same angle as that from which Mrs. Pesce's car was struck, the seat-belted driver moves laterally to the right, slipping out from under the shoulder belt and striking her head upon the passenger-side door. Thus, GM argues, it would not matter whether the seat belt was operative or not, as in either scenario, according to its experts, the seat belt would be ineffective at protecting an occupant in such a collision.
It is the position of GM that it is not only the burden of plaintiff to come forward and establish existence of issues of fact, but also his burden of excluding the possibility of other causes of the injury to Mrs. Pesce, as suggested by defendant.
Plaintiff's experts, Mr. John Marcosky ("Marcosky") and Dr. Ronald Huston ("Huston"), countered every interpretation of evidence by the defendant's experts. Plaintiff's experts stated in numerous affidavits that it is their expert opinions that rather than the ribs breaking from the locking of the shoulder belt, Mrs. Pesce's ribs were broken because the shoulder belt failed to lock, and because of the failure, she struck the center console of her vehicle. Plaintiff's experts found that had the shoulder belt actually locked, there would have been "load" marks, or permanent stretching of the webbing of *164 the shoulder belt from the weight put upon the locked belt in a rapid deceleration such as from a vehicular collision. No such "load" marks were found on the Pesce seat belt webbing.
The court notes that defendant failed to address the direct evidence from witnesses on the scene, three of whom in deposition testified that when they found Mrs. Pesce after the accident, she was lying in a position with the shoulder belt remaining upon her shoulder "spooled out." Based upon the post-accident descriptions of Mrs. Pesce wearing her "spooled out" shoulder belt, her injury pattern, and flesh and blood found in the vehicle, plaintiff's experts stated that they have concluded that the shoulder belt retractor failed to lock, independent of knowledge about a recall. Both experts noted that the defective condition they have determined to have existed with Mrs. Pesce's shoulder belt appears to be identical to the defective condition described in the recall letter that was sent to the Pesce residence to notify them of the recall.
Plaintiff's experts stated that Mrs. Pesce's injury pattern appeared not from contact with the second vehicle and a passenger door intrusion, but from forward movement which caused Mrs. Pesce to strike her head around the front dashboard and radio area. An emergency medical technician (EMT), Mr. Christian Reller, observed blood and flesh on the vehicle's radio located in the dashboard. The experts stated that this is extremely strong evidence that Mrs. Pesce moved forward, striking her head upon the dashboard/radio area, rather than as defendant's experts assert. Further, Marcosky, plaintiff's expert accident reconstructionist, denied the existence of a "witness" mark that defendant's experts claim was left when Mrs. Pesce purportedly struck the intruding passenger door.
Unlike the defendant's experts, Huston contended that the intact stitching on the lap portion of Mrs. Pesce's seat belt is consistent with the shoulder belt's failure to lock. Huston opined that in a collision of the magnitude of Mrs. Pesce's, the majority of the force from her body would be directed in a manner which would have caused the lap belt stitching to tear if the shoulder belt had in fact locked.
Plaintiff has come forward and not only met his burden of demonstrating to the court that several issues of fact exist, but also offers evidence which refutes the test which defendant claims illustrates a cause of Mrs. Pesce's injury not attributable to itself. Plaintiff's experts stated that GM's "sled" test is inaccurate and does not fairly replicate the conditions that were present at the time of the actual collision. Plaintiff's experts contend that because the position of the driver's seat and the driving position of the "dummy" were different, and because the defendant's "sled" test ended with the impact of the two vehicles without simulating the spinning of the vehicles after collision, the lateral movement of Mrs. Pesce that GM argues occurred in the collision is incorrect.
The court finds that in viewing the submissions in opposition to the motion most favorably, the plaintiff has met his burden of coming forward to establish existence of material issues of fact. He has both set forth a prima facie case and excluded causes of Mrs. Pesce's injuries not attributable to G.M. Summary judgment is therefore inappropriate.
B. Defendant's Motion for Preclusion of Evidence
Defendant has moved under Federal Rule of Civil Procedure 37(d) to preclude evidence or testimony that GM removed or destroyed any component of the Pesce vehicle, evidence or testimony regarding performance of the allegedly defective shoulder belt retractor, and evidence or testimony of the recall of the Pesce vehicle.
1. Preclusion of evidence of GM tampering
Defendant's motion to preclude evidence of GM's possible tampering or removal of the missing shoulder belt retractor and "D" ring is uncontested by plaintiff. Therefore, GM's Rule 37(d) preclusion motion is granted insofar as it pertains to any evidence or testimony regarding GM's involvement in the disappearance of the retractor and the "D" ring.
*165 2. Preclusion of evidence pertaining to defect of missing seat belt assembly
The defendant argues that the plaintiff's failure to preserve the shoulder belt retractor and "D" ring constitutes spoliation, and that the court should therefore preclude evidence pertaining to these items. Because plaintiff alleges that the seat belt was defective and the actual allegedly defective item is missing, an order precluding any testimony or evidence of the retractor being defective would necessarily preclude plaintiff from being able to present a prima facie case. Thus, the order to preclude evidence pertaining to the defectiveness of the retractor would act in effect as a dismissal.
"`Destruction of potentially relevant evidence obviously occurs along a continuum of fault ranging from innocence through the degrees of negligence to intentionality. The resulting penalties vary correspondingly.'" Beil v. Lakewood Eng'g and Mfg. Co., 15 F.3d 546, 552-553 (6th Cir.1994) (quoting Welsh v. United States, 844 F.2d 1239, 1246 (6th Cir.1988)); see also Alexander v. National Farmers Org., 687 F.2d 1173, 1205-06 (8th Cir.1982) (severe sanction of dismissal would have been proper given outrageous destruction of documents, but not abuse of discretion to fail to do so), cert. denied, 461 U.S. 937, 103 S. Ct. 2108, 77 L. Ed. 2d 313 (1983); In re Grace Line Inc., 517 F.2d 404, 409 (2d Cir.1975) (no negative inference may be drawn from failure to produce evidence absent showing of control at the time of disappearance or trial). "Some courts assign no adverse evidentiary consequences to destruction of evidence that is unintentional or satisfactorily explained." Beil, 15 F.3d at 552-53 (citing INA Aviation Corp. v. United States, 468 F. Supp. 695, 700 (E.D.N.Y.), aff'd mem., 610 F.2d 806 (2d Cir.1979)); see also In re Grace Line Inc., 517 F.2d at 409 (cannot draw negative inference where there is no proof of how evidence disappeared).
In this case, a review of the submissions demonstrates that plaintiff's alleged failure to preserve the seat belt components must be characterized as innocent. It would certainly not justify the drastic sanction of preclusion which would be tantamount to dismissal of the action. Moreover, a negative inference cannot be drawn from plaintiff's failure to produce the missing seat belt components, due to the lack of any showing of how the components disappeared. See In re Grace Line Inc., 517 F.2d at 409.
3. Preclusion of evidence pertaining to the recall of the Pesce vehicle
GM contends that plaintiff has no independent proof that the shoulder belt retractor in the Pesce vehicle was defective. Defendant argues that the only basis for plaintiff's experts' opinions is the recall letter which describes the condition that plaintiff's experts state existed.
Before a recall letter can be admitted into evidence, the plaintiff must lay a proper foundation, independent of the recall itself, establishing that a defect existed in the vehicle. Calhoun v. Honda Motor Co., 738 F.2d 126, 133 (6th Cir.1984); Farner v. Paccar Inc., 562 F.2d 518, 525-526 (8th Cir.1977).
Plaintiff has independently established that the seat belt was defective. As noted above, many witnesses testified by deposition that Mrs. Pesce was wearing her seat belt, that the shoulder belt was "spooled out," that Mrs. Pesce was lying forward when she was found, and that blood and flesh appeared on the dashboard. Both of the plaintiff's experts maintain that short of shoulder belt retractor failure, Mrs. Pesce would not have been found in the position she was in, or with the injuries that she sustained.
Interestingly, the defendant, in moving to preclude evidence of the recall, failed to address the information and descriptions given by these witnesses, and did not attempt to explain why it would not be possible for this information to be sufficient independent grounds for the plaintiff's experts' opinions.
The plaintiff has proffered evidence of the defective seat belt retractor independent of the recall letter. The defendant's motion to preclude admission of the recall letter is denied, without prejudice to renew should plaintiff fail to lay a proper foundation at trial.
*166 C. Plaintiffs' Cross Motion to Amend Punitive Damages Clause
Plaintiff seeks to amend the punitive damages clause of the complaint against defendant from $10 million to $30 million.
Federal Rule of Civil Procedure 15(a) states that once a pleading has been served upon the court and the opposing party, the party may only amend its pleading "by leave of the Court or by written consent of the adverse party." Id. When written consent of the adverse party is not secured, and leave of the Court is sought, "[it] shall be freely given when justice so requires." Id. Reasons for a proper denial of leave to amend include undue delay, bad faith, futility of the amendment, and resulting prejudice to the opposing party. Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230, 9 L. Ed. 2d 222 (1962); State Teachers Retirement Bd. v. Fluor Corp., 654 F.2d 843, 856 (2d Cir.1981). Absent such a showing, leave to amend should be granted in the court's discretion. Tokio Marine & Fire Ins. Co. v. Employers Ins. of Wausau, 786 F.2d 101, 103 (2d Cir. 1986). Leave to amend was proper where "[t]he amended claim was obviously one of the objects of discovery and related closely to the original claim...." State Teachers Retirement Bd., 654 F.2d at 856.
In the cross motion, plaintiff claims he has discovered new information about defendant's conduct which would entitle him to a higher punitive damage award. Plaintiff claims that the deposition of Mr. Kevin O'Neil ("O'Neil"), an employee of GM quality assurance division, has established that defendant not only knew about the defective shoulder belt retractors for at least one year prior to the recall being instituted, but in addition, even after the recall had begun, the Pesces received tardy notice, about three weeks after Mrs. Pesce had her near fatal collision.[1]
None of the factors discussed in Foman are present. First, there has been no undue delay in plaintiff's motion for this amendment. The deposition of O'Neil took place during the week of January 8, 1996, after the original and amended complaints had been filed and served. Stipulation to the amendment was sought, and was denied by the defendant. Second, there have not been repeated failures to cure deficiencies in this case pertaining to the punitive damages clause. Third, there is no latent futility of the amendment proposed. It is within the realm of possibility that a jury could find that GM was either wanton and reckless, or willful in withholding notice to consumers about defective safety systems in their vehicles for at least one year, and that a jury might desire to punish and/or deter such conduct through an award of punitive damages in excess of the amount originally sought by plaintiff. Fourth, it does not appear that plaintiff has sought the amendment due to bad faith, nor has the defendant at any time stated that plaintiff was acting in bad faith.
Finally, the court finds that the defendant would not be unduly prejudiced by the amendment. Purely monetary increase of exemplary, or punitive damages, is not in itself considered prejudicial to the nonmoving party. Loomis v. Civetta Corinno Constr. Corp., 54 N.Y.2d 18, 20, 444 N.Y.S.2d 571, 429 N.E.2d 90 (1981); Zieziula v. Loblaws, Inc., 91 A.D.2d 1198, 1199, 459 N.Y.S.2d 336 (4th Dep't 1983). "Prejudice, of course, is not found in the mere exposure of the defendant to greater liability. Instead there must be some indication that the defendant has been hindered in the preparation of [its] case or has been prevented from taking some measure in support of his position." Loomis, 54 N.Y.2d at 23, 444 N.Y.S.2d 571, 429 N.E.2d 90.
It is clear that no prejudice exists to defendant beyond exposure to greater liability. GM has been aware of plaintiff's claim for $10 million in punitive damages since the inception of this litigation. Further, defendant has failed to specify why it would sustain any undue prejudice from the increased punitive damages claim. Accordingly, leave to amend the complaint is granted.
*167 CONCLUSION
Therefore, it is
ORDERED, that
1. Defendant's motion for summary judgment is DENIED;
2. Defendant's motion to preclude any evidence suggesting the removal of the seat belt assembly from the Pesce vehicle by GM is GRANTED;
3. Defendant's motion to preclude evidence pertaining to the shoulder belt retractor and "D" ring is DENIED;
4. Defendant's motion to preclude evidence of the recall and recall letter pertaining to the Pesce vehicle is DENIED; and
5. Plaintiff's cross motion to amend the punitive damages clause of the complaint from $10 million to $30 million is GRANTED.
IT IS SO ORDERED.
NOTES
[1] "QUESTION: Do you recall what the date of [the defective retractor] report was?
ANSWER: It was somewhere between [19]86 and 90 I would guess, but I don't remember specifically what the date was." (O'Neill dep. p. 27 ¶ 3-7.) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511453/ | 696 A.2d 285 (1997)
Richard G. CRIBB et al.
v.
Peter AUGUSTYN.
No. 95-573-Appeal.
Supreme Court of Rhode Island.
June 3, 1997.
*286 Daniel P. McKiernan, for Plaintiff.
Edward P. Sowa, Providence, for Defendant.
Before WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS and GOLDBERG, JJ.
OPINION
PER CURIAM.
This matter came before a panel of this Court pursuant to an order directing the defendant, Peter Augustyn (Augustyn) to appear and show cause why the issues raised in this appeal should not be summarily decided. Augustyn appeals from a final judgment entered in the Providence Superior Court in favor of the plaintiffs, Richard G. and Jacqueline Cribb, (the Cribbs). The Superior Court jury awarded the Cribbs $64,062.97 plus interest and costs in a civil action against Augustyn. After reviewing the memoranda submitted and hearing oral arguments thereon, we conclude that cause has not been shown. The appeal is hereby denied and dismissed, the judgment appealed from is affirmed, and the papers are remanded to the Superior Court.
The pertinent facts are as follows. The Cribbs are Rhode Island residents and the owners of a ski chalet in Bartlett, New Hampshire. In January 1987 the Cribbs agreed to rent their chalet to Augustyn, also a Rhode Island resident, for a weekend of skiing. The rental agreement was both negotiated and entered into in Rhode Island. Unfortunately, before that weekend rental was over, the chalet was damaged by a fire that the Cribbs alleged was caused by the negligence of Augustyn. To recover for their loss, the Cribbs filed a civil negligence action on March 21, 1991, against Augustyn in the Providence County Superior Court in which they sought damages for the destruction of *287 their chalet. Service on Augustyn, in Rhode Island, was made on March 26, 1991.
In his answer to the Cribbs' complaint Augustyn denied all allegations of any negligence on his part and in special defense to the action gave notice of intention to rely upon the law of New Hampshire where, accordingly, the Cribbs' action was time barred. The Cribbs moved to strike the statute of limitations defense. After hearing in the Superior Court, the Cribbs's motion was granted. Augustyn sought review of the decision granting the motion to strike by petition for certiorari here in this Court. That petition was denied, and the case later proceeded to trial before a jury in the Superior Court.
The trial evidence indicates that Augustyn went to the chalet on January 9, 1987, with a group of friends and that during the following evening, on January 10, 1987, they decided at about 7 p.m. to light a fire in the chalet fireplace. Augustyn testified that when the group later retired for the night, the wood embers in the fireplace were still glowing. He further testified that during the night the fire had apparently burned itself out and that the following morning he cleaned out the fireplace. In doing so, he used a cardboard box to transport the wood ashes out of the chalet and he put them into the snow. He said that he then placed the empty cardboard box on a pile of firewood that was stacked against the outer wall of the chalet and left to go skiing for the day with the rest of the group. Augustyn also testified that he did not see any glowing wood embers when he swept the ashes into the cardboard box but that he did not look inside the box to check for any burning embers remaining in the box when he placed it on the wood pile.
Later in the day, one member of the ski group, Nancy Nelson, returned to the chalet early. She testified that while inside the chalet she heard a crackling sound and went outside to investigate. She discovered that a fire had started on the wood pile in the area where the cardboard box had been placed, and she immediately proceeded to telephone the fire department. Alexander Patton, Ph.D. (Patton), a mechanical engineer, was called to testify during the trial for the Cribbs for the purpose of offering expert opinion testimony regarding the cause and the origin of the fire. On the basis of deposition testimony and the pertinent fire reports that he reviewed prior to trial, he opined that a live ember from the fireplace had remained in the cardboard box and ignited the box and eventually the wood pile, causing the fire that damaged the chalet. He rejected any theory that the fire had been caused by faulty electrical wiring or by a leaking propane tank.
Roger Labbe (Labbe), the fire chief of Bartlett, New Hampshire, and the individual in charge of the firefighters when they extinguished the blaze at the Cribbs' chalet, also testified as a witness for the Cribbs. He opined on the basis of the burn pattern he observed, that the blaze originated from the woodpile. It was also through Labbe that the Cribbs introduced the report of Darwin Lewis (Lewis), an investigator from the State of New Hampshire Fire Marshal's Office, who died sometime prior to the time of trial. Lewis's report indicated that the origin of the fire was the woodpile.
The jury returned a verdict in favor of the Cribbs and awarded them damages in the amount of $64,062.97. Augustyn's motion for a new trial was denied; final judgment was entered on the jury's verdict, and Augustyn claimed his appeal to this Court.
Augustyn raises three issues for our consideration. He first asserts that the trial justice erred in granting the Cribbs' motion to strike the statute of limitations defense. He contends that New Hampshire's statute of limitations that would have barred the Cribbs' action should have been applied to the case rather than Rhode Island's. Second, Augustyn asserts that the trial justice erred in admitting the fire inspection report by Lewis, the deceased investigator for the New Hampshire Fire Marshal's office. Third, he contends that the jury was improperly permitted to render a verdict based upon a pyramiding of inferences.
In addressing the statute of limitations question, we note that under New Hampshire law the applicable statute of limitations would have required the Cribbs to have commenced *288 their action within three years of the date of the fire. The fire occurred on January 11, 1987. The Cribbs' action, filed on March 21, 1991, would then have been time barred had New Hampshire law applied. Under Rhode Island law, G.L.1956 § 9-1-13(a), the applicable statute of limitations is ten years, and the Cribbs' action would not thus be time barred.
We take up first Augustyn's contention that the trial justice erred in striking his statute of limitations defense based upon New Hampshire law and in then applying the Rhode Island statute of limitations to plaintiffs' claim. His contention appears grounded in what is known as the lex loci delicti conflict of law doctrine. In this jurisdiction we do not follow that doctrine or rule, having abandoned it some many years ago in Woodward v. Stewart, 104 R.I. 290, 299, 243 A.2d 917, 923, cert. denied, 393 U.S. 957, 89 S. Ct. 387, 21 L. Ed. 2d 371 (1968). We follow instead the interest-weighing approach. In so doing, we look at the particular case facts and determine therefrom the rights and liabilities of the parties "in accordance with the law of the state that bears the most significant relationship to the event and the parties." Pardey v. Boulevard Billiard Club, 518 A.2d 1349, 1351 (R.I.1986), see also Putnam Resources v. Pateman, 958 F.2d 448, 464 (1st Cir.1992); Blais v. Aetna Casualty & Surety Co., 526 A.2d 854, 856-57 (R.I. 1987); Brown v. Church of the Holy Name of Jesus, 105 R.I. 322, 252 A.2d 176 (1969). That approach has sometimes been referred to as a rule of "choice-influencing considerations." See Robert A. Leflar, Choice-Influencing Considerations in Conflicts Law, 41 N.Y.U. L.Rev. 267, 282 (1966).
In applying the interest-weighing or choice-influencing considerations, we consider as noted in Pardey, 518 A.2d at 1351:
"(1) predictability of result;
"(2) maintenance of interstate and international order;
"(3) simplification of the judicial task;
"(4) advancement of the forum's governmental interests; and
"(5) application of the better rule of law."
We also consider the particular factors pertaining in each case setting as noted in Woodward and Brown as well as in Restatement (Second) Conflict of Laws, § 145(2) at 414 (1971) which provides:
"(a) the place where the injury occurred,
"(b) the place where the conduct causing the injury occurred,
"(c) the domicile, residence, nationality, place of incorporation
and place of business of the parties, and
"(d) the place where the relationship, if any, between the parties is centered."
In this case the fire and damages resulting to plaintiffs occurred in New Hampshire. Thus the (a) and (b) factors would weigh in favor of the application of the New Hampshire law. However, the (c) and (d) factors favor application of Rhode Island law. All the parties are domiciled residents of Rhode Island, and the contractual relationship between the parties was negotiated and consummated here in Rhode Island. In addition, at the time of the filing of the instant action, all the parties were still domiciled, living and employed in Rhode Island. In Brown, 105 R.I. at 326-27, 252 A.2d at 179, we stated that in situations in which the factors (a) and (b) are the only ones pointing to the law of another state and factors (c) and (d) point strongly to applying Rhode Island law, the latter two factors trump the earlier two, and Rhode Island law is applied. The trial justice did not err in applying the Rhode Island statute of limitations to the Cribbs' claim and action.
We believe, in so concluding, that we further this forum's law because Rhode Island, rather than New Hampshire, has the greater interest in determining the time period in which Rhode Island residents may sue or be sued for tort claims arising out of a contractual relationship that had its origins in this state. Furthermore, because we do not believe New Hampshire has any real interest in this dispute, we conclude that our decision will not offend the maintenance of interstate order. Finally, we believe that the parties would have expected Rhode Island law to apply in resolving their dispute, and thus our decision advances the predictability of judicial determinations.
*289 The next contention advanced by Augustyn involves the admission by the trial justice of the report prepared by Lewis. Over Augustyn's hearsay objection, the trial justice admitted the report under Rule 803(8)(C) of the Rhode Island Rules of Evidence, which permits the admission of "factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness."
Augustyn contends that the factual findings in Lewis's report indicate a lack of trustworthiness by virtue of the fact that the report included the following statement:
"Entries contained in this report are intended for the sole use of the State Fire Marshal. Estimations and evaluations made herein represent `most likely' and `most probable' cause and effect. Any representation as to the validity or accuracy of reported conditions outside the State Fire Marshal's Office is neither intended nor implied."
He also contends that the report does not fall within the exception created by Rule 803(8)(C) because it contains opinion in addition to bare facts. We are not persuaded by either contention.
Rather, we conclude, as did the Supreme Court of the United States, that the phrase contained in Rule 803(8)(C) "factual findings" encompasses more than a recitation of facts. Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 164, 109 S. Ct. 439, 447, 102 L. Ed. 2d 445, 459 (1988). Had the rules of evidence intended to limit this exception to include reports reciting only facts it would have stated so. However, it employs a term that includes "conclusions or opinions that flow from a factual investigation." Id. The report in question, with its opinions based upon the investigator's factual investigation, falls within the exception created by Rule 803(8)(C).
Turning to the question of trustworthiness, we begin by considering the four trustworthiness factors proposed by the Advisory Committee of the Rhode Island Rules of Evidence. These factors include (1) the timeliness of the investigation upon which the report is based, (2) the skill and the experience of the investigating official, (3) the question of whether any hearing was held, and (4) the possible bias of the investigator. See R.I. R. Evid. Adv. Committee Notes to Rule 803(8)(C) at 997.
In the instant case those factors suggest only the conclusion that Lewis's report is trustworthy. All that might serve to undermine the accuracy of his report is a preprinted statement contained on the report that belies the accuracy of the report for use beyond the fire marshal's office. Even though the reason for the limited disclaimer statement is not explained, we believe that this statement merely suggests that it was prepared primarily for the use of the fire marshal's investigation and its office report procedure, but that limitation fails to expressly affect its reliability when viewed beyond the fire marshal's office. Considering Lewis's experience and skill, and the timeliness with which his report was prepared, we are persuaded that the trial justice did not abuse his discretion in admitting the report.
With respect to Augustyn's final contention concerning pyramiding of inferences, we have previously held that a jury's inference of negligence must rest upon more than mere "conjecture, speculation, or surmise," Montuori v. Narragansett Electric Co., 418 A.2d 5, 9 (R.I.1980), and that it is improper to draw an inference based upon an inference. Waldman v. Shipyard Marina, Inc., 102 R.I. 366, 230 A.2d 841 (1967). However, in this case we conclude that the jury could properly conclude that the fire had been caused by the negligence of Augustyn without improperly "pyramiding inferences." Unlike the case facts in Montuori, the expert testimony here indicated that the fire was "most probably" caused by hot ashes left in the cardboard box. Additionally, expert testimony excluded electrical wiring or a leaky propane tank as a possible source of the fire. The jury's determination in regard to causation deriving from live embers in the cardboard box could properly be drawn, based upon the totality of the trial evidence.
For the foregoing reasons the defendant's appeal is denied and dismissed, and the final judgment appealed from is affirmed. The *290 papers of the case are remanded to the Superior Court.
FLANDERS and GOLDBERG, JJ., did not participate. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511623/ | 595 S.W.2d 653 (1980)
Daniel Albert DAIGGER, Donna Sue Daigger, and David Burl Taylor, Appellants,
v.
STATE of Arkansas, Appellee.
No. CR 80-31.
Supreme Court of Arkansas.
March 17, 1980.
Rehearing Denied April 14, 1980.
McArthur & Lassiter, P. A., Little Rock, for appellants.
Steve Clark, Atty. Gen. by Dennis R. Molock, Asst. Atty. Gen., Little Rock, for appellee.
HICKMAN, Justice.
Daniel Albert Daigger, Donna Sue Daigger, and David Burl Taylor were convicted in Pulaski County Circuit Court of delivering LSD. Daniel Albert Daigger received a ten-year sentence. Donna Sue Daigger and Taylor received ten-year sentences with five years suspended. Their appeal raises three issues. First, they argue the trial *654 court should have granted them a continuance so they could find and call as a witness, Jimmy Cahill, a police informant. Second, appellants argue the police illegally searched both the Daigger vehicle and Taylor. Third, Taylor alleges there was not enough evidence to convict him.
On appeal, the facts are not seriously disputed. Cahill introduced police undercover agents to Taylor at a bowling alley. The officers tried to buy some LSD from Taylor, but they could not agree on a price. Taylor took them to the Daiggers. A sale was made. Each of the Daiggers received $20.00. In response to a radio message from the officers making the purchase, another officer in the area arrested and searched Taylor shortly after the Daiggers left. In the meantime, a call was made to other policemen to stop the Daiggers' vehicle and arrest the Daiggers. They were arrested and their vehicle was searched. A search of Mrs. Daigger's purse, which was found between the front seats of the vehicle, uncovered LSD.
On the day the trial began, the appellants made an oral motion for a continuance to allow the State to furnish them Cahill's address. The trial judge denied the motion. We affirm his decision. A continuance need only be granted upon a showing of good cause. Rules of Crim.Proc, Rule 27.3. A denial of a continuance will not be reversed absent a clear abuse of discretion. Russell & Davis v. State, 262 Ark. 447, 559 S.W.2d 7 (1977). We find none here. The appellants knew Cahill's name and had ample opportunity, either through their own investigation or a specific discovery request, to find him before the trial began.
Neither do we believe the trial judge erred in admitting evidence, specifically the contents of Donna Sue Daigger's purse, found in the search of her vehicle. This kind of search is authorized by Rules of Crim.Proc., Rule 12.4:
(a) If, at the time of the arrest, the accused is in a vehicle or in the immediate vicinity of a vehicle of which he is in apparent control, and if the circumstances of the arrest justify a reasonable belief on the part of the arresting officer that the vehicle contains things which are connected with the offense for which the arrest is made, the arresting officer may search the vehicle for such things and seize any things subject to seizure and discovered in the course of the search,
(b) The search of a vehicle pursuant to this rule shall only be made contemporaneously with the arrest or as soon thereafter as is reasonably practicable.
The appellants, citing Sanders v. State, 262 Ark. 595, 559 S.W.2d 704 (1977) aff'd 442 U.S. 753, 99 S.Ct. 2586, 61 L.Ed.2d 235 (1979), argue the search of the purse violated the Fourth Amendment's prohibition of unreasonable searches and seizures. In Sanders we held a suitcase, which was seized from the locked trunk of a taxicab could not be searched. Sanders is not directly on point. The search here was of a purse found between the two front seats inside the vehicle. We compare this search favorably with a search which we upheld in the case of Sumlin v. State, 266 Ark. 709, 587 S.W.2d 571. More importantly, we believe this particular search, conducted immediately after the Daiggers had made an illegal drug sale to the officers, and made contemporaneously with their arrest, was not unreasonable.
We do not decide the propriety of the search of Taylor. The conduct ascribed to him simply cannot, under our cases, be considered delivery of LSD. We held in Bowles v. State, 265 Ark. ___, 579 S.W.2d 596 (1979), that a man who simply introduced the buyer to the seller was not guilty of delivery. The middleman must take a more active part to be a principal or even an accomplice. For example, in Curry v. State, 258 Ark. 528, 527 S.W.2d 902 (1975), the conviction of such an individual was upheld. There Curry took the money and returned with the drugs. Here we affirm the Daiggers' conviction but reverse Taylor's and dismiss the charges against him.
Affirmed in part.
Reversed in part.
*655 PURTLE, J., concurs.
FOGLEMAN, C. J., and MAYS, J., concur in part and dissent in part.
PURTLE, Justice, concurring.
I concur with the majority completely as to the opinion as it relates to appellant, David Burl Taylor. I concur with the result as to the Daiggers but wish to state my reasons in slightly different terms.
First, the majority properly cites and interprets the Rules of Crim.Proc, Rule 12.-4(a) and (b), for convenience to the reader is set out as follows:
(a) If, at the time of the arrest, the accused is in a vehicle or in the immediate vicinity of a vehicle of which he is in apparent control, and if the circumstances of the arrest justify a reasonable belief on the part of the arresting officer that the vehicle contains things which are connected with the offense for which the arrest is made, the arresting officer may search the vehicle for such things and seize any things subject to seizure and discovered in the course of the search.
(b) The search of a vehicle pursuant to this rule shall only be made contemporaneously with the arrest or as soon thereafter as is reasonably practicable.
Daigger was in apparent control of the vehicle. The officers had reasonable belief that the vehicle contained things connected with the offense for which the arrest was made. The officers had paid for the LSD with marked bills, and they were in sight of the Daiggers until the arrest. The purse was in the passenger compartment of the vehicle in plain view of the arresting officers, and the search was made contemporaneously with the arrest. These facts fit squarely into the plain wording of the above rule.
In Sanders v. State, 262 Ark. 595, 559 S.W.2d 704 (1977) aff'd 442 U.S. 753, 99 S.Ct. 2586, 61 L.Ed.2d 235 (1979), the suitcase searched was found in the trunk of the vehicle after the vehicle was parked. I believe both this Court and the United States Supreme Court held such a search was not a "vehicle exception" search. We recently reached the same result in Moore v. State, Ark., 594 S.W.2d 245 (March 3, 1980), wherein we held a shaving kit located in a hidden place, which took about 20 minutes to locate, was not a search within the "automobile exception." In Moore the vehicle had been secured, and the accused was handcuffed and was in another vehicle at the time of the search. There were no exigent circumstances in either Sanders or Moore.
In the present case, the officers had concrete facts to base their belief that this vehicle contained not only the marked money but also additional LSD. The present case is similar to the fact situation in Sumlin v. State, 266 Ark. 709, 587 S.W.2d 571 (1979), in which there was a very dangerous fact situation confronting the officers. Also, the purse was in the passenger compartment of the vehicle in plain view of the officers.
It appears to me when the search of an automobile is contemporaneous with the arrest and the arresting officers have facts upon which to reasonably believe things connected with the offense are contained in the passenger compartment of the vehicle, the officers are authorized to look into the vehicle. If the things which they have probable cause, based upon facts known to them, to believe are in the vehicle are seen by them, the search is reasonable. However, when the vehicle is secured or the container to be searched is within the exclusive control of the arresting authorities and there are no exigent circumstances and no danger of harm to anyone or loss of the items sought, a warrant is required. If this reasoning is applied, I do not see any conflict between Sanders, supra, Moore, supra, and the case before us.
For the above reasons I concur with the majority opinion.
FOGLEMAN, Chief Justice (concurring in part, dissenting in part).
It is extremely hard to have any sympathy for a "dope peddler." That is not what is involved here. The very foundation of *656 this nation rests upon the theory of equality before the law. This theory has been engraved in our constitutions. Constitution of the United States, Amendment Fourteen; Constitution of Arkansas, Art. 2, §§ 2 and 3. The principle was stated in our constitution of 1868, which became effective before the Fourteenth Amendment to the United States Constitution was declared to have been ratified. If equality before the law is to be meaningful, or actually if it is to be preserved, the "dope peddler" must be afforded the same constitutional protections available to citizens in the highest and most respected positions. Otherwise, erosion will wash the principle away, just as it will eventually wash away the hardest stone.
A basic constitutional right is the right to be free from unreasonable searches and seizures. Constitution of the United States, Amendment Four; Constitution of Arkansas, Art. 2, § 15. The provisions are stated in identical language, i. e., "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated,. ." It is notable that the right is not restricted to some people or to law-abiding people. It is also significant that all people, including law violators, have the same right to be secure in their effects as they have in their persons and in their homes. See State v. Porter, 53 Ohio Misc. 25, 373 N.E.2d 1296 (1977). Donna Sue Daigger had the right to be secure in her person and effects against an unreasonable search. And the Fourth Amendment protection is broad enough to afford protection to contraband. United States v. Peisner, 311 F.2d 94, 5 A.L.R.3d 1196 (4 Cir., 1962).
There is a rebuttable presumption that a search without a warrant is an unreasonable search. Sanders v. State, 262 Ark. 595, 559 S.W.2d 704, aff'd. sub nom. Arkansas v. State, 442 U.S. 753, 99 S.Ct. 2586, 61 L.Ed.2d 235. The burden is upon the state to show that a search without a warrant was reasonable. Rowland v. State, 262 Ark. 783, 561 S.W.2d 304; Asher v. City of Little Rock, 248 Ark. 96, 449 S.W.2d 933. This means that the state must show by a preponderance of the evidence that the facts and circumstances surrounding the search brought it within the scope of a recognized exception to the requirement of a warrant for a search or seizure. See Rowland v. State, supra. The majority seeks to justify this search as a lawful search incident to an arrest, equating it with an automobile search. It was not an automobile search. The only question before us is the validity of the search of Donna Sue Daigger's purse. Sanders v. State, supra. In Sanders, we said:
To paraphrase the United States Supreme Court's observation in United States v. Chadwick, [433 U.S. 1, 97 S.Ct. 2476, 53 L.Ed.2d 538 (1977)] supra, the factors which diminish the privacy aspects of an automobile do not apply to appellant's suitcase. Luggage contents are not open to public view, except as a condition to a border entry or common carrier travel; nor is luggage subject to regular inspections and official scrutiny on a continuing basis. Unlike an automobile, whose primary function is transportation, luggage is intended as a repository of personal effects. In sum, a person's expectations of privacy in personal luggage are substantially greater than in an automobile.
Nor does the suitcase's mobility justify dispensing with the added protections of the Warrant Clause. Once the Little Rock police had seized appellant's suitcase from the trunk of the taxicab and had the suitcase under their exclusive control, there was not the slightest danger that the suitcase or its contents could have been removed before a valid search warrant could be obtained. The initial seizure of appellant's suitcase, the validity of which appellant does not contest, was sufficient to guard against any risk that evidence might be lost. With the suitcase safely immobilized, it was unreasonable to undertake the additional and greater intrusion of a search without a warrant.
Detectives Sylvester and Hutchinson stopped the Daigger vehicle, at the behest of Detective Fulks, at or near the Crestwood Apartments in Little Rock. Although *657 there was some pretense of arresting Fulks and Detective Lowery, they were present at the scene of the arrest. The vehicle was a van. Sylvester searched both Daiggers. In searching the vehicle, Sylvester found Mrs. Daigger's pocketbook or wallet. It was lying on the console between the driver's seat and the passenger's seat. He took some money, the serial numbers of which corresponded with that used by Fulks and Lowery in making the purchase from the Daiggers. He took some LSD from the wallet. According to Sylvester, the Daiggers "were clearly under police control" at the time he searched the van. There was simply no evidence of any exigent circumstances.
Neither the existence of probable cause nor the reasonableness of the search itself is a substitute for a warrant where a reasonable expectation of privacy is invaded by the search, at least in the absence of exigent circumstances. Arkansas v. Sanders, 442 U.S. 753, 99 S.Ct. 2586, 61 L.Ed.2d 235. See also, Freeman v. State, 258 Ark. 617, 527 S.W.2d 909. The basic and essential purpose of the requirement of a search warrant is to protect the individual against unreasonable governmental intrusions into his privacy, whenever and wherever his expectation of privacy is legitimate. Hosto v. Brickell, 265 Ark. 147, 577 S.W.2d 401. One of the most important factors to be considered in determining the reasonableness of a search is the existence, extent and legitimacy of the citizen's right to privacy under the circumstances. Hosto v. Brickell, supra.
We have recognized Chimel v. California, 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685, rehearing denied, 396 U.S. 869, 90 S.Ct. 36, 24 L.Ed.2d 124 (1969), as the leading guideline provided by the United States Supreme Court on the permissible scope of a search incident to a lawful arrest. See Steel v. State, 248 Ark. 159, 450 S.W.2d 545. According to that guideline, the search incident to a lawful arrest cannot go beyond that area from which the arrested persons might have obtained a weapon or destructible evidence. Freeman v. State, 258 Ark. 617, 527 S.W.2d 909; Steel v. State, supra; Moore v. State, 261 Ark. 274, 551 S.W.2d 185. In Shingleton v. State, 39 Md.App. 527, 387 A.2d 1134 (1978), a case strikingly similar to both this case and Sanders, the Maryland court put the impact of United States v. Chadwick, 433 U.S. 1, 97 S.Ct. 2476, 53 L.Ed.2d 538 (1977) in proper perspective. That court said:
When the van was stopped by the police, the occupants were removed from the vehicle and placed under arrest. A quick warrantless search was conducted on the spot. The State Police discovered the briefcase and opened it. As we read Chadwick, the contents of the brief case were protected by the cloak of the Fourth Amendment. Plainly, a briefcase is more like luggage, about which Chadwick holds that one has a right of expectation of privacy, than like a motor vehicle, a highly mobile object, usually open to view and in which one may reasonably expect less privacy. Moreover, there is no testimony of any emergency requiring the warrantless search of the briefcase. The officers did not express any fear or apprehension over weapons or explosives. The only remaining justification for the intrusion into the briefcase was the possibility that the contents would be destroyed by the two (2) appellants who were arrested at the scene. Those two (2), Martin and Shingleton, were in custody and, inferentially, unable or incapable of destroying the briefcase's contents. The sum and substance of the facts being that, in this case, no justification existed for the warrantless search of the briefcase. Chadwick v. United States, supra; Preston v. United States, 376 U.S. 364, 84 S.Ct. 881, 11 L.Ed.2d 777 (1964).
We are mindful of a number of cases seeming to justify such a search as that present in this matter on the theorem of search incident to an arrest. Cady v. Dombrowski, 413 U.S. 433, 93 S.Ct. 2523, 37 L.Ed.2d 706 (1973); Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971); Chambers v. Maroney, [399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419] supra; Chimel v. California, 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685 *658 (1969). See also Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968); Mobley v. State, 270 Md. 76, 310 A.2d 803 (1973), affd. King v. State, 16 Md.App. 546, 298 A.2d 446 (1973). The rationale for upholding warrantless searches made incident to arrest is the safeguarding of the arresting officers or preventing the loss of evidence. That proposition evaporates in view of the separation of the briefcase from the arrestees. Because, in the case sub judice, the clear and present danger to the police and the likelihood of destruction of the evidence were dispelled by the separation of the appellants, Martin and Shingleton, from the van and, obviously, from the brief case, there was no need for a warrantless search of the briefcase. United States v. Chadwick, supra; Preston v. United States, supra.
Under the circumstances of this case, the police should have obtained a search warrant before opening and searching the briefcase, and the trial court erred in admitting the contents of the case into evidence.
Although there was ample authority, as Mr. Justice Blackmun observed in his dissent in Chadwick, for the position that a briefcase in a car may be searched as part of the "automobile exception" expounded by Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925); see e. g., United States v. Tramunti, 513 F.2d 1087 (2d Cir. 1975) (suitcase in back seat of a car); United States v. Issod, 508 F.2d 990 (7th Cir. 1974) cert, denied, 421 U.S. 916, 95 S.Ct. 1578, 43 L.Ed.2d 783 (1975) (trunk in railroad station); United States v. Soriano, 497 F.2d 147 (5th Cir. 1974) (en banc) (suitcases in trunk of taxicab); United States v. Evans, 481 F.2d 990 (9th Cir. 1973) (footlocker in trunk of automobile), nevertheless, to the extent those cases conflict with Chadwick, they are implicitly laid to rest. The law is not clear that the police, having gained "exclusive control" of the briefcase and eliminated by space and time any possibility of the arrestee's "gain[ing] access to the property to seize a weapon or destroy evidence," may not then conduct a warrantless search of that property under the guise of a search incident to the arrest. United States v. Chadwick, 433 U.S. at 15, 97 S.Ct. at 2485, 53 L.Ed.2d at 551; Preston v. United States, supra. Hence, the briefcase and its contents should have been suppressed and it is reversible error for the trial judge not to have excluded that illegally seized evidence.
This case is virtually identical to Sanders v. Arkansas, supra, affd. as Arkansas v. Sanders, supra, in that the police were in control of the automobile and its occupants and there was no danger that the pocketbook (rather than suitcase) or its contents would be rendered unavailable to due legal process. Here, as there, the police were justified in stopping the automobile, searching it and seizing the pocketbook. The question here, as there, was whether the police, rather than searching the pocketbook without a warrant, should have taken it to the police station, where they were taking the persons arrested anyway, and there obtained a warrant to search it. The pocketbook was in the exclusive control of the police. Its mobility was destroyed by its seizure. The appellants had only a slightly better chance of retrieving the pocketbook and destroying the incriminating evidence than any member of this court did.
Any person who has ever observed or participated in the emptying of a pocketbook could not escape the conclusion that the expectation of privacy in that personal effect was very great indeed. In Sanders, the United States Supreme Court had this to say on the subject:
Not all containers and packages found by police during the course of a search will deserve the full protection of the Fourth Amendment. Thus, some containers (for example a kit of burglar's tools or a gun case) by their very nature cannot support any reasonable expectation of privacy because their contents can be inferred from their outward appearance. * * *
We have heretofore recognized that there are containers in which the owner does not *659 have an expectation of privacy when we held that a toolbox was one, because it is not a repository of personal effects. Wyss v. State, 262 Ark. 502, 558 S.W.2d 141. There is a lot of difference between a toolbox and a pocketbook. It seems to me that one would expect more privacy in his pocketbook than in either his luggage or his toolbox. Certainly a pocketbook is a repository of personal effects.
I distinguish the circumstances here from those in Sumlin v. State, 266 Ark. 709, 587 S.W.2d 571. Ruth Sumlin had effected a jailbreak at 10:00 p. m. one evening, forcing a jailer to release five prisoners, among which was her husband, at the point of two weapons, a pistol and a knife. Thus, it was known that she was armed. She later fired a weapon at two of the escapees who had left the jail with her and her husband. She surrendered to the police by leaving the automobile her husband was driving and running to a police car. Her purse was seized at the time of her arrest and taken to the jail where she was held. Both the policeman arresting Ruth Sumlin and the Chief of the Fordyce Police in whose custody she was placed, looked in the purse for weapons. Sheriff Joe Pennington, to whose custody she was transferred early in the morning after the escape, properly inventoried the contents of the purse. He found a knife, the murder victim's billfold and an incriminating letter. The knife had apparently been found by the police officers who first looked into the purse, and it was readily visible and its presence known. The sheriff opened the letter in order to try to get information concerning the whereabouts of the other escapees.
The lone police officer who made the arrest there did not have control of the situation as the police did here. As a matter of fact, Ruth Sumlin's husband tried to escape after the vehicle he was driving had been stopped by the police officer. He rammed the policeman's car with the stolen automobile he was driving and had to be subdued. The officer's opening the purse to search for weapons was, under the circumstances, an act of wisdom and justified as incident to the arrest. It must be remembered that three of the escapees were unaccounted for after the Sumlins had been arrested. A search of the purse for weapons at the Fordyce jail where she was taken was proper, even if the chief of police did not make an inventory. The sheriff was much concerned about the whereabouts of the other escapees and was justified in considering the situation as an emergency. When the circumstances of the arrest, the taking of custody at places of incarceration, the propriety of an inventory by the sheriff and the exigencies of the situation are considered, the search of the purse there was justified. None of these conditions existed in this case.
I would reverse the judgment as to Donna Sue Daigger, but I agree that the judgment should be affirmed as to Daniel Albert Daigger and reversed as to Taylor.
I am authorized to state that MAYS, J., joins in this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511626/ | 939 F.Supp. 1363 (1996)
Annie Laurie GAYLOR; Anne Nicol Gaylor; Dan Barker; Shelly Johnson; and Freedom From Religion Foundation, Inc., Plaintiffs,
v.
Tommy THOMPSON, Individually and as Governor of the State of Wisconsin; James R. Klauser, Individually and as Secretary of the Department of Administration of the State of Wisconsin; and Michael C. Metcalf, Individually and as Chief, Wisconsin Capitol Police, Defendants.
No. 96-C-47-C.
United States District Court, W.D. Wisconsin.
September 13, 1996.
*1364 *1365 *1366 Bryon J. Walker, Attorney at Law, Madison, WI, for plaintiffs Annie Laurie Gaylor, Freedom From Religion Foundation, Anne Nicol Gaylor, Dan Barker, Shelly Johnson.
John J. Glinski, Asst. Attorney General, Madison, WI, for defendants Tommy Thompson, James R. Klauser, Michael C. Metcalf.
OPINION AND ORDER
CRABB, District Judge.
Plaintiffs Annie Laurie Gaylor, Anne Nicol Gaylor, Dan Barker, and Shelly Johnson are members of plaintiff Freedom From Religion Foundation, Inc., an organization that advocates the separation of church and state. On November 21, 1995, plaintiffs applied for a permit to display a large banner proclaiming "State/Church Keep Them Separate" in the Wisconsin State Capitol. Acting pursuant to Wis.Stat. § 16.845 and Wis.Admin.Code § Adm. 2.04, defendant Michael Metcalf, Chief, Wisconsin Capitol Police, granted the permit. On November 30, 1995, plaintiffs placed the banner in the capitol rotunda. On December 18, 1995, two weeks before plaintiffs' permit was due to expire, state officials amended plaintiffs' permit to allow them to display only a much smaller banner. State employees took down plaintiffs' banner and plaintiffs did not replace it with a smaller display.
Shortly thereafter, plaintiffs filed this civil action seeking declaratory, monetary and injunctive relief and alleging that defendants Tommy Thompson, James R. Klauser and Michael Metcalf violated plaintiffs' constitutional rights when Thompson and Klauser ordered Metcalf to amend plaintiffs' permit and to take down plaintiffs' banner. The case is presently before the court on the parties' cross-motions for summary judgment. Plaintiffs level a series of challenges at Wis.Admin.Code § Adm. 2.04, contending that it is an invalid time, place and manner restriction, that it constitutes a prior restraint on free speech and that it is unconstitutionally vague and overbroad. Plaintiffs maintain also that defendants violated both the establishment and free exercise clauses of the First Amendment by allowing a Christmas tree and menorah to remain in the capitol rotunda after defendants had amended plaintiffs' permit. Finally, plaintiffs argue that defendants' actions denied plaintiffs due process and equal protection of the law in violation of the Fourteenth Amendment and that defendants engaged in a conspiracy to deprive them of their constitutional rights. I conclude that plaintiffs have failed to adduce evidence sufficient to raise a genuine issue of material fact as to any of their claims and that defendants have shown that they are entitled to judgment as a matter of law. Accordingly, defendants' motion for summary judgment will be granted.
From the parties' proposed findings of fact, I find the following facts to be undisputed.
UNDISPUTED FACTS
Plaintiff Freedom From Religion Foundation, Inc. is a Wisconsin corporation that seeks to maintain the separation of church and state. Plaintiff Anne Nicol Gaylor is the foundation's president. Plaintiff Annie Laurie Gaylor is employed by the foundation as editor of the newspaper Freethought Today. Plaintiff Shelly Johnson is the assistant editor of Freethought Today. Plaintiff Dan Barker is an employee of the foundation.
*1367 Defendant Tommy Thompson is Governor of the state of Wisconsin. Defendant James R. Klauser is Secretary of the Wisconsin Department of Administration. Defendant Michael C. Metcalf is the Chief of the Capitol Police Department, an office of the Division of Buildings and Police Services within the Department of Administration. Defendant Metcalf is responsible for reviewing applications and granting permits for use of the capitol building and grounds for public meetings or displays.
In December 1993, after receiving a permit from the capitol police, plaintiff Freedom from Religion Foundation, Inc. displayed in the capitol rotunda a banner 9½ feet by 2 feet 4 inches reading "State/Church Keep Them Separate." On November 21, 1995, plaintiff Shelly Johnson submitted a request on behalf of plaintiff foundation for a permit to display this same banner in the capitol rotunda from November 30 to December 30, 1995. Johnson indicated the size of the banner in the permit application. Defendant Metcalf signed the permit form on December 7, 1995 pursuant to Wis.Admin.Code § Adm. 2.04, although he granted verbal approval to the foundation a week earlier. On November 30, 1995, plaintiffs Annie Laurie Gaylor, Dan Barker and Shelly Johnson placed the banner in the capitol rotunda after receiving defendant Metcalf's verbal approval. During much of December 1995, a Christmas tree approximately 30 feet high, a sign describing the tree, a menorah larger than plaintiffs' banner and a sign next to the menorah explaining the significance of Chanukah to the Jewish faith were on display in the capitol rotunda as symbols of the winter holiday season.
On December 5, 1995, an organization named Citizens Concerned for Our Community submitted a request for a permit to display a banner of approximately the same size as plaintiff foundation's, with the competing inscription "Separation Does Not Mean Divorce," and a quotation from Thomas Jefferson. Defendant Metcalf approved the application and granted the organization a permit to display the banner from December 13, 1995 to January 5, 1996.
At some point during December 1995, defendant Governor Thompson noticed plaintiffs' banner in the capitol rotunda. Defendant Thompson believed that the banner was not appropriate to the physical context of the capitol and discussed this concern with defendant Klauser on the morning of December 18, 1995. (Whether the banner of Citizens Concerned for Our Community was displayed at the time of defendant Thompson's conversation with defendant Klauser is in dispute. Defendants claim that defendant Thompson viewed both banners and found them to have similar problems before speaking with defendant Klauser. Plaintiffs contend that the Citizens' banner was not displayed until 10:30 A.M. on December 18, several hours after defendant Thompson's discussion with defendant Klauser. The parties dispute also whether defendant Thompson gave defendant Klauser any instructions concerning the banner or banners.)
Defendant Klauser agreed with the governor that plaintiffs' banner was not appropriate to the physical context of the building. Following his conversation with the governor, Klauser directed Thomas Krauskopf, Deputy Administrator of the Division of Buildings and Police Services of the Department of Administration, to notify plaintiffs that their permit was being amended to allow only a smaller sign (30" by 40", the same size as the signs describing the menorah and tree) and that the larger banner needed to be removed by noon that day. Defendant Klauser had no further involvement in the matter. Krauskopf telephoned defendant Metcalf at approximately 9:00 A.M. that morning to tell him that defendant Klauser had asked to have plaintiff's banner taken down by noon and that plaintiffs should be informed of the amendment to their permit. Defendant Metcalf directed Sue Barica, a program assistant in the capitol police office, to call plaintiff foundation, request the removal of the banner by noon and inform the foundation of the permit amendments. Between 9:30 A.M. and 10:00 A.M., Barica contacted both plaintiffs and Rev. Richard Prichard of Citizens Concerned For Our Community to advise them that their permits were being amended to *1368 limit the size of the display to 30" by 40".[1] Approximately fifteen minutes later, Barica received a call from plaintiff Anne Nicol Gaylor, who wanted to discuss the banner situation. Plaintiff Gaylor was not content with the response Barica provided and explained that she would try to contact defendant Metcalf. Shortly thereafter, plaintiff Annie Laurie Gaylor arrived at Barica's office and demanded an explanation why defendants were changing the terms of the permit. Barica explained that because many groups would be requesting display space at the same time, the capitol police needed to regulate the size of banners. At 10:30 A.M., Marvin Munyon raised the banner of Citizens Concerned for Our Community in the capitol rotunda.
At noon, Krauskopf and John Marx, Administrator of the Division of Building & Police Services of the Wisconsin Department of Administration, went to the capitol rotunda to see whether plaintiffs' banner had been removed and discovered that it had not. At approximately 12:30 P.M., defendant Metcalf telephoned Dale Dumbleton, Director of the Bureau of Building Management-Capitol of the Wisconsin Department of Administration, to inform him of the banner situation. Dumbleton and William Beckman, Grounds Manager for the Bureau of Building Management Capitol, investigated the matter and saw that the banners were still in place. Shortly thereafter, Metcalf met with Marx, Krauskopf, Dumbleton and Beckman and the group decided that the banners should be removed by capitol grounds crew employees. Defendant Metcalf ordered that both banners be removed and taken to a basement storage area for safekeeping until they were claimed by their owners. Beckman assigned Timothy Bennett and Timothy Heibel to this job and they completed it. Plaintiff Annie Laurie Gaylor was present when Bennett and Heibel took down plaintiffs' banner and display frame but did not ask them to give the items to her. Plaintiff Dan Barker came to the capitol between 2:00 and 2:30 that afternoon and Beckman returned the foundation's banner and display frame to him.
On that same day, Citizens Concerned for Our Community replaced its banner with a sign 30" by 40". Sue Barica noticed that plaintiff foundation had in place a sign consisting of a piece of cardboard approximately 8" by 10" with a bumper sticker containing the same slogan found on the larger banner. Defendants left the Christmas tree and menorah in the capitol rotunda.
The authority to grant display permits in the capitol has been delegated to the capitol police, a subdivision of the Department of Administration. The capitol police evaluate these display permit applications pursuant to the factors contained in Wis.Admin.Code § Adm. 2.04. The capitol police average approximately 400 applications per year for display permits for all state government buildings administered by the Department of Administration. Permits for displays are denied rarely, although they may be denied if there is not adequate space or if the display would interfere with pedestrian traffic. During the ten years defendant Metcalf has been considering applications and the four years that Sue Barica has been handling them, permits to put up a display have never been denied on the basis of content and have been denied for space or interference reasons only four or five times.
William S. Reid, Policy Advisor to the Governor's Office, sent a number of letters to plaintiff foundation's supporters that included the statement:
*1369 The removal of the two banners was made at the request of Governor Thompson. Request for additional banners were expected and the Governor concluded that too many competing banners would further clutter the Rotunda.
This statement concerning the governor's involvement in the matter was not based on Reid's personal knowledge but instead was an assumption unsupported by any information given to him.
John Marx sent a letter dated January 16, 1996 to Anne Nicol Gaylor stating:
The Department of Administration concluded that your banner and a competing banner nearby were unsightly. Requests for additional banners were expected and the department concluded that too many banners would further clutter the rotunda to the disappointment of thousands of people who visit the Capitol during the holiday season....
The permit you received to place the banner in the Capitol was issued in accordance with Wisconsin Administrative code section 2.04 which allows the Department of Administration to exercise judgment and discretion in issuing permits for the use of state buildings. The department may set limits on permits and may refuse to issue a permit if the proposed use is not "appropriate to the physical context of the building or facility...."
The terms of your permit (and that of the competing organization) were changed....
Other displays have been reviewed and are not affected by this decision. There are no other hand-painted banners in the Rotunda. The other displays have been reviewed and, in the context of section 2.04, are found to be appropriate for the building.
During June 1996, the capitol rotunda housed an exhibit concerning the contribution of German immigrants to American agriculture that included over 40 display panels and several flags measuring approximately six feet by three feet each.
OPINION
I. First Amendment Principles
The First Amendment of the United States Constitution provides in part:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech....
Two freedoms central to American democracy are contained in the First Amendment's brief text: freedom of speech and freedom of religion. This case involves both of those essential liberties. Plaintiffs assert that defendants violated their free speech rights by taking down the banner in which plaintiffs proclaimed a central tenet of their political philosophy. In addition, plaintiffs contend that the government violated the First Amendment's guarantee of freedom of religion by allowing a Christmas tree and menorah to remain standing in the capitol rotunda after plaintiffs' banner had been removed. As plaintiffs recognize, however, "[t]he speech issue is the heart of this matter," Pl.'s Brief, dkt. # 44, at 15, and this case turns primarily on the First Amendment principles applicable to freedom of speech, not freedom of religion.
Defendants' response to plaintiffs' claims begins with the proposition that plaintiffs' banner is not constitutionally protected expression because it was a "communicative structure." Such an argument misconstrues the scope of protection offered by the First Amendment. A significant political message does not lose First Amendment protection because it is written on a banner rather than spoken by its proponent. If that were the case, political discourse would be severely curtailed. Even messages that make their point through symbolic appeal rather than words may be entitled to the First Amendment's shield. See Capitol Square Review and Advisory Bd. v. Pinette, ___ U.S. ___, ___, 115 S.Ct. 2440, 2446, 132 L.Ed.2d 650 (1995) (Ku Klux Klan's white cross is religious display entitled to constitutional protection); Grossbaum v. Indianapolis-Marion Bldg. Authority, 63 F.3d 581, 586 (7th Cir.1995) (display of religious symbols is protected by First Amendment). Contrary to *1370 defendants' exhortations, the decisions reached by the Court of Appeals for the Seventh Circuit in Lubavitch Chabad House, Inc. v. City of Chicago, 917 F.2d 341 (7th Cir.1990) (no constitutional right to erect a menorah in public forum) and Graff v. City of Chicago, 9 F.3d 1309 (7th Cir.1993) (no constitutional right to erect a newsstand on public sidewalk), cert. denied, ___ U.S. ___, 114 S.Ct. 1837, 128 L.Ed.2d 464 (1994) do not hold otherwise. Those cases hold that individuals cannot erect a menorah or a newsstand on public property without first seeking the government's permission to do so. They also make clear that the government does not have to allow its citizens to construct whatever they desire on public property. Plaintiffs are not contending that they should be able to display their banner without government permission or that they have an unfettered constitutional right to erect a display in the capitol rotunda. Instead, they allege merely that the defendants' actions regarding their banner should be assessed pursuant to First Amendment principles. Although the First Amendment does not grant plaintiffs carte blanche to raise a banner in the state capitol, it does impose certain limits on defendants' actions and is applicable to this case.
II. Public Forum and Time, Place and Manner Restrictions
Plaintiffs' right to use government property to display its banner is not unlimited. Grossbaum, 63 F.3d at 586. Such a right depends on whether the property where plaintiffs would like to place the banner is considered a public forum, a place that "by long tradition or by government fiat [has] been devoted to assembly and debate.'" Id. (quoting Perry Education Ass'n v. Perry Local Educators' Ass'n, 460 U.S. 37, 45, 103 S.Ct. 948, 954-55, 74 L.Ed.2d 794 (1983)). In this instance, the state of Wisconsin has opened the capitol rotunda to a variety of displays and exhibits and must be considered a public forum for the purpose of First Amendment analysis. However, that decision does not mean that the state is prohibited from imposing certain regulations on the time, place and manner of the displays. The state can implement such restrictions provided they "are justified without reference to the content of the regulated speech, that they are narrowly tailored to serve a significant governmental interest, and that they leave open ample alternative channels for communication of the information." Ward v. Rock Against Racism, 491 U.S. 781, 791, 109 S.Ct. 2746, 2753, 105 L.Ed.2d 661 (1989) (citations omitted).
A. Significant Governmental Interest and Narrowly Tailored Means
There is little question that the state of Wisconsin has a significant governmental interest in keeping the capitol rotunda free from visual clutter. The building is an important monument and source of historic pride for the citizens of this state. The state is and should be concerned with maintaining the capitol's appearance. See City Council v. Taxpayers for Vincent, 466 U.S. 789, 805, 104 S.Ct. 2118, 2128-29, 80 L.Ed.2d 772 (1984) (state can use its police powers to advance aesthetic values). The United States Supreme Court has recognized on numerous occasions that the state has a significant interest in protecting the appearance of its public property from the visual degradation caused by an accumulation of signs on that property. See Vincent, 466 U.S. at 807, 104 S.Ct. at 2130; Metromedia, Inc. v. San Diego, 453 U.S. 490, 507-08, 101 S.Ct. 2882, 2892-93, 69 L.Ed.2d 800 (1981); Lehman v. City of Shaker Heights, 418 U.S. 298, 302-03, 94 S.Ct. 2714, 2716-17, 41 L.Ed.2d 770 (1974); see also City of Ladue v. Gilleo, 512 U.S. 43, ___, 114 S.Ct. 2038, 2047, 129 L.Ed.2d 36 (1994) (decision that city cannot ban almost all residential signs "by no means leaves the City powerless to address the ills that may be associated with residential signs"); Chicago Observer, Inc. v. City of Chicago, 929 F.2d 325, 328 (7th Cir.1991) (government may curtail visual clutter for aesthetic and safety reasons).
The size restriction imposed on plaintiffs by the amendment to their permit is narrowly tailored to serve the state's significant interest in protecting the capitol from visual degradation. The smaller size leaves the capitol open for plaintiffs and other groups to communicate their messages, even if the *1371 signs are not as conspicuous as their larger counterparts. Although defendants might have been able to accommodate a larger sign while still protecting the visual character of the capitol rotunda, it is not this court's prerogative to articulate the optimal size of a visual display in the state's most significant governmental facility. The fact that state officials permitted plaintiffs to hang the same banner in 1993 does not prevent defendants from making a different decision with respect to that banner in 1995, especially if the state anticipated additional applications for display permits.
Contrary to plaintiffs' assertions, the analysis is not affected by the state's decision to leave in place a Christmas tree and a menorah that were much larger than 30" by 40". The Christmas tree and menorah are entirely different in aesthetic character from hand-painted banners. The state does not have a constitutional duty to require that each of the displays it allows is exactly the same size. For the same reason, the amended size limitation on plaintiffs' banner is not made suspect by the June 1996 exhibition concerning German immigrants' contribution to American agriculture, which took up more space inside the capitol rotunda than plaintiffs' hand-painted banner.
B. Alternative Channels of Communication
Plaintiffs do not contend that the state has closed its alternative channels of communication. Plaintiffs publish a newspaper propounding their views and are free to spread their message elsewhere.
C. Content of the Regulated Speech
The more difficult question raised by defendants' amended restriction on the size of plaintiffs' banner is whether defendants took down the banner and amended the permit because they disagreed with the content of plaintiffs' display. If the facts supported such a conclusion, defendants' amendment to plaintiffs' permit would constitute an invalid time, place and manner restriction and an illegal content-based discriminatory act in violation of plaintiffs' First Amendment rights. However, plaintiffs have failed to adduce sufficient facts from which an inference could be drawn that defendants' actions were motivated by their disdain for the message contained in plaintiffs' display.
The fact that the Christmas tree and menorah were left standing after the banners were taken down does not prove any content-based discrimination. If defendants had amended the permits of plaintiffs and Citizens Concerned for our Community to forbid the display of any banners, defendant's decision to leave the tree and menorah on display might raise questions about the content-neutrality of their application of Wis.Admin.Code § Adm. 2.04, but defendants did not impose such a blanket prohibition on displays. Rather they amended the permitted size of the displays and allowed plaintiffs to continue to express their message in the capitol rotunda, albeit with a smaller display.
In addition, whether or not Governor Thompson knew of the opposing banner when he spoke with defendant Klauser on the morning of December 18th, the undisputed fact is that plaintiffs' banner was not the only one taken down. Defendants took down the Citizens' banner and amended its display permit in the same way as plaintiffs'. Both groups were allowed to continue to express their sentiments; they merely had to do so with smaller displays.
A finding that no content discrimination occurred does not mean that Governor Thompson and defendant Klauser may not have overstepped the limits of their role under state administrative law in granting or denying display permits. The letters of William Reid raise the question whether Thompson was directly involved in ordering the removal of the banners. However, whether defendants violated the state's administrative code is a question of state law that the parties have not briefed and that I will not address in this opinion. See 28 U.S.C. § 1367(c) (district court may decline to exercise supplemental jurisdiction over state law claims if it has dismissed all claims over which it has original jurisdiction).
III. Prior Restraint
Plaintiffs contend that the permit system imposed pursuant to Wis.Admin.Code § Adm. 2.04 is an impermissible prior restraint *1372 on free speech. It is true that defendants' system imposes limits on plaintiffs' ability to disseminate their message. Persons seeking to hold a meeting or place a display in the capitol rotunda must seek prior approval. However, not all licensing or permit systems constitute unlawful prior restraints. Such systems will be considered prior restraints if they place "unbridled discretion in the hands of a government official or agency." FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 225-26, 110 S.Ct. 596, 605, 107 L.Ed.2d 603 (1990) (citing Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 757, 108 S.Ct. 2138, 2144, 100 L.Ed.2d 771 (1988)). Plaintiffs contend that § Adm. 2.04 grants state officials such unbridled discretion because the provision does not set forth any neutral criteria on which permit decisions must be based. Plaintiffs focus primarily on § Adm. 2.04(1)(e), which allows state officials to grant display permits only if they are "appropriate to the physical context of the building or facility." Plaintiffs argue that the subsection grants state officials too much discretion and therefore must be ruled unconstitutional because the risk of content-based censorship runs too high.
Defendant Metcalf and the capitol police implement the permit application process pursuant to Wis.Stat. § 16.845 (managing authority of any facility owned by state may permit facility to be used for free discussion of public issues) and Wis.Admin.Code § Adm. 2.04(1), which directs that the public should be permitted to use the capitol for public meetings or for activities of a broad public purpose if such use:
(a) Does not interfere with the prime use of the building or facility.
(b) Does not unduly burden the managing authority.
(c) Is not a hazard to the safety of the public or state employes; nor detrimental to the building or facility.
(d) Does not expose the state to the likelihood of expenses and/or damages which cannot be recovered.
(e) And is appropriate to the physical context of the building or facility.
Wis.Admin.Code § Adm. 2.08 pertains specifically to interior displays and decorations and requires individuals to receive the express written authorization of the Department of Administration before mounting any such items.
Wisconsin Admin.Code § Adm. 2.04(5) forbids any discrimination because of religious viewpoint in the granting of display privileges. Although this factor would not restrain state officials bent on discriminating against certain groups from actually doing so, it does make clear the state's policy that such decisions should not take religious viewpoint into consideration. In and of itself, § Adm. 2.04(5) is not an adequate bulwark against unbridled administrative discretion. However, the factors set out in § Adm. 2.04(1) are. Undoubtedly, these guidelines leave defendant Metcalf and the capitol police with some discretion in granting display permits. But the retention of some discretion is not a valid reason for ruling the provision unconstitutional. See Chicago Observer, Inc., 929 F.2d at 329 (making discretionary decisions is "business of government"). Rather than providing defendants unbridled authority, the regulations contained in § Adm. 2.04 require the granting of a permit unless the activity would disrupt the functioning of the state government.
In this instance, the facts reveal that defendants relied on Wis.Admin.Code § Adm. 2.04(1)(e) when they amended plaintiffs' permit. Defendants determined that the size of plaintiffs' and Citizens' banners were not "appropriate to the physical context" of the capitol. Plaintiffs grab the word "appropriate" from § Adm. 2.04(1)(e) and run with it, contending that any guideline that requires state officials to determine what is "appropriate" cannot pass constitutional muster. See Cohen v. California, 403 U.S. 15, 91 S.Ct. 1780, 29 L.Ed.2d 284 (1971); Milwaukee Mobilization For Survival v. Milwaukee County Park Commission, 477 F.Supp. 1210, 1217-18 (E.D.Wis.1979); Swearson v. Meyers, 455 F.Supp. 88 (D.Kan.1978).
In Cohen, 403 U.S. 15, 91 S.Ct. 1780, the Supreme Court held unconstitutional a law that prohibited "maliciously and willfully disturb[ing] the peace ... by offensive conduct" as applied to a young man wearing a leather *1373 jacket in the Los Angeles County Courthouse that bore the message "Fuck the Draft." Cohen may be an interesting and laudable example of the Court's First Amendment jurisprudence, but it is not applicable to this case. The word "appropriate" is nowhere to be found in the statutory language ruled unconstitutional. See id. at 16 n. 1, 91 S.Ct. at 1783 n. 1 (citing statutory language in full). In Cohen, the Court held that the state could not prohibit Cohen from wearing a message on his jacket conveying his profane but distinct sentiments concerning the draft merely because unwilling viewers might find it shocking or distasteful. Id. at 21, 91 S.Ct. at 1786. The Court said nothing about what the state could have done if Cohen had plastered a number of flyers containing the same or a different message on the courthouse walls. Later cases make clear that the government is on firm constitutional ground when it regulates visual displays so as to protect the aesthetic character of a given area. See supra § II.
Whatever the persuasive value of the other cases plaintiffs cite, Milwaukee Mobilization, 477 F.Supp. 1210, and Swearson, 455 F.Supp. 88, the United States Supreme Court has held permissible a guideline requiring City of New York officials to "insure appropriate sound quality balanced with respect for nearby residential neighbors...." Ward, 491 U.S. at 794, 109 S.Ct. at 2755 (emphasis added). In Ward, the Court explained that "[w]hile these standards are undoubtedly flexible, and the officials implementing them will exercise considerable discretion, perfect clarity and precise guidance have never been required even of regulations that restrict expressive activity." Id.
The Court of Appeals for the Seventh Circuit reached a similar conclusion in Graff v. City of Chicago, 9 F.3d 1309 (7th Cir.1993). There, the court determined that a Chicago ordinance setting out guidelines by which city officials would decide whether to grant permission to construct a newsstand did not constitute a prior restraint. Id. at 1314. The criteria gave specific and adequate guidance to the official making permit decisions. Id. at 1318. The guidelines included in Wis.Admin.Code § Adm. 2.04 are similarly sufficient. The undisputed facts make clear that very few permit applications are denied. Those that are denied are denied because of lack of space or traffic flow problems. These reasons fit well within the § Adm. 2.04(1) guidelines and are legitimate reasons for amending plaintiffs' permit. Section Adm. 2.04(1) provides a constitutionally sufficient bulwark against unbridled administrative discretion. Whether defendants overstepped this discretion by amending the display permits once they were granted is a question of state law that I will not reach.
IV. Void for Vagueness and Overbreadth
Plaintiffs contend that Wis.Admin.Code § Adm. 2.04 is both unconstitutionally vague and overbroad. However, neither the void for vagueness nor the overbreadth doctrine provide a basis for the relief plaintiffs seek. An overbroad statute is one that is designed to burden or punish activities that are not constitutionally protected, but that includes within its scope activities that are protected by the First Amendment. Ronald D. Rotunda & John E. Nowak, Treatise on Constitutional Law Substance and Procedure § 20.8 (2d ed. 1992). Courts will strike down such a statute even when the speech of the party before the court is not entitled to First Amendment protection because of the concern that the law might chill other individuals from engaging in protected speech that the statute appears to curtail. Id. Although a statute might be constitutional as applied to the party before the court, that party can argue that the statute cannot be applied because it is unconstitutional on its face. To make an overbreadth argument in this instance, plaintiffs might contend that § Adm. 2.04 places permissible limitations on their speech but imposes impermissible burdens on the free speech rights of others and therefore should be ruled unconstitutional. I do not understand plaintiffs to be making such an argument. Rather, plaintiffs contend that § Adm. 2.04 is unconstitutional as applied to them because it places too much discretion in the hands of state officials. Such an argument is just a variant of plaintiffs' prior restraint argument that I have rejected already. Plaintiffs have challenged § Adm. 2.04 as it applies to them *1374 directly and have no need to employ the overbreadth doctrine.
The void for vagueness doctrine is closely related to the overbreadth doctrine and seeks to guarantee that laws are clear enough to give fair notice to the public as to what activities will be considered criminal. Rotunda & Nowak, supra, § 20.9. People are entitled to be well aware of precisely what expression is considered criminal so that they can engage in protected expression without fear of criminal prosecution. The doctrine insures that law enforcement officials are limited by clear guidelines and do not have unlimited discretion to enforce statutes on a selective basis. Id. The first basis for the void for vagueness doctrine is not implicated here. Plaintiffs do not have to fear that their speech will get them in trouble under § Adm. 2.04. If anything, § Adm. 2.04 works merely to limit plaintiffs' free expression in state-owned facilities. It does not impose an impermissible "chilling effect" on free speech. Everyone is free to file for a permit without fear that such an application will bring about punitive criminal consequences.
The second basis of the void for vagueness doctrine, that official decision-making should be limited by clear guidelines, merely allows plaintiffs to reiterate the argument they raised under the label of prior restraint that Wis.Admin.Code § Adm. 2.04 gives state officials "unbridled discretion." I have addressed and rejected this same argument already and see nothing in the void for vagueness doctrine that would change my analysis of that question.
V. Establishment and Free Exercise Clauses
Plaintiffs argue that defendants violated both the establishment and free exercise clauses of the First Amendment by allowing a Christmas tree and menorah to remain in place in the capitol rotunda after they amended plaintiffs' banner permit. Plaintiffs' free exercise clause claim is groundless. Defendants did not prevent plaintiffs from exercising their religion in any way by amending the permit and requiring plaintiffs to reduce the size of their display.
Plaintiffs' establishment clause claim is foreclosed by Allegheny County v. Greater Pittsburgh ACLU, 492 U.S. 573, 109 S.Ct. 3086, 106 L.Ed.2d 472 (1989), in which the Supreme Court held that a county's placement of an 18-foot menorah and small sign saluting liberty next to a 45-foot Christmas tree outside a city-county building did not violate the establishment clause. The Christmas tree, menorah and sign in the capitol rotunda had a size ratio similar to the display in Allegheny County. The only relevant distinction plaintiffs attempt to point out is a difference in the messages of the signs associated with the displays. The placard next to the Christmas tree in Allegheny County focused on American liberty and freedom while the sign next to the menorah in the capitol rotunda explained the significance of Chanukah to the Jewish faith. Plaintiffs overemphasize the importance of the sign in the Allegheny County decision. It was not the sole item that saved the Allegheny County display from an establishment clause violation as plaintiffs would have the court believe. Rather, it confirmed only "what the context [of the display] already reveal[ed]: that the display of the menorah is not an endorsement of religious faith but simply a recognition of cultural diversity." Id. at 619, 109 S.Ct. at 3114-15. The sign next to the menorah in the capitol did not change the fact that the Christmas tree and menorah as a unit would not be considered an endorsement of any faith and therefore would not be an establishment of religion.
VI. Fourteenth Amendment Due Process and Equal Protection
Plaintiffs contend that defendants' actions violated their rights to due process and equal protection of the law under the Fourteenth Amendment. Although plaintiffs do not develop either of these claims extensively in their briefs, I will address them as I understand them. It seems that plaintiffs are asserting two due process claims. The first appears to be nothing more than a repetition of plaintiffs' argument that the court should strike down Wis.Admin.Code § Adm. 2.04 because it is unconstitutionally vague. It is true that the due process clause may provide the textual basis for finding a *1375 vague statute unconstitutional, see Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 2298-99, 33 L.Ed.2d 222 (1972), but I have dismissed plaintiffs' void for vagueness argument already and there is no need to discuss it any further.
Plaintiffs' second due process claim rests on their assertion that defendants deprived them of their property without due process of law when they removed plaintiffs' banner and stored it in the capitol basement for several hours. Plaintiffs are not entitled to any relief on such a claim. As long as state remedies are available to plaintiffs to pursue post-deprivation remedies, neither intentional nor negligent deprivation of property gives rise to a constitutional violation. Daniels v. Williams, 474 U.S. 327, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986); Hudson v. Palmer, 468 U.S. 517, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984). The State of Wisconsin provides several post-deprivation procedures for challenging the taking of property. According to Article I, § 9 of the Wisconsin Constitution,
Every person is entitled to a certain remedy in the laws for all injuries, or wrongs which he may receive in his person, property, or character; he ought to obtain justice freely, and without being obliged to purchase it, completely and without delay, conformably to the laws.
Sections 893 of the Wisconsin Statutes contains provisions concerning tort actions to recover damages for wrongfully taken or detained personal property. The state has not refused to provide plaintiffs with a post-deprivation remedy and the existence of these remedies defeats any claim they might have that defendants deprived them of their property without due process of law. In any case, plaintiffs' due process claim is exceedingly weak. Plaintiffs were without the banner for only two hours and likely could have had it back sooner had they asked for it. Such a claim trivializes the important protections the due process clause provides.
Plaintiffs' equal protection claim seems to be that Governor Thompson has never intervened in the display permit process before and that by engaging himself in the process with respect to plaintiffs' banner, he has treated plaintiffs differently from other similarly situated permit applicants. Plaintiffs may be claiming that the governor singled them out for unfair and unequal treatment in violation of the equal protection clause because of their views on the separation of church and state. Unfair and purposefully discriminatory treatment by the governor would state an equal protection claim. See, e.g., Esmail v. Macrane, 53 F.3d 176 (7th Cir.1995). However, plaintiffs have not raised a genuine dispute of material fact with respect to such unequal treatment. Plaintiffs have not shown how they were similarly situated to previous applicants or that they were the only ones treated differently than previous applicants. Citizens Concerned for Our Community had its display permit amended too.
VII. Conspiracy
Plaintiffs allege that defendants engaged in a conspiracy to deprive them of their constitutional rights, although they do not elaborate on this claim in their briefs and admit that "[i]t matters not whether the wrong is deemed a conspiracy." Pl.'s Brief, dkt. # 44 at 7. To establish a claim of civil conspiracy, petitioner must show "a combination of two or more persons acting in concert to commit an unlawful act, or to commit a lawful act by unlawful means, the principal element of which is an agreement between the parties `to inflict a wrong against or injury upon another,' and `an overt act that results in damage.'" Kunik v. Racine County, 946 F.2d 1574, 1580 (7th Cir.1991) (quoting Rotermund v. United States Steel Corp., 474 F.2d 1139 (8th Cir.1973)). Claims of conspiracies to effect deprivations of civil or constitutional rights may be brought in federal court under 42 U.S.C. § 1983 or § 1985(3). Section 1983 requires proof of a conspiracy by state actors to deprive a petitioner of a constitutional right. Hampton v. Hanrahan, 600 F.2d 600, 622-23 (7th Cir. 1979), rev'd in part on other grounds, 446 U.S. 754, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980). Section 1985(3) requires proof of a racial or otherwise class-based discriminatory animus behind the conspirators' actions. Griffin v. Breckenridge, 403 U.S. 88, 91 S.Ct. 1790, 29 L.Ed.2d 338 (1971); Hampton, 600 *1376 F.2d at 623; Munson v. Friske, 754 F.2d 683, 694 (7th Cir.1985).
Nothing in the undisputed facts permits an inference to be drawn that the alleged conspiracy was motivated by a racial or class-based discriminatory animus. Thus, the only possible manner in which plaintiffs can state a valid conspiracy claim is pursuant to § 1983. However, plaintiffs' failure to state a cause of action with respect to any of their constitutional claims is dispositive of their conspiracy claim. Without deprivation of a constitutional right, plaintiffs cannot succeed on a § 1983 conspiracy claim.
I conclude as a matter of law that plaintiffs cannot succeed on their claim that their constitutional rights were violated by the amendment of their permit requiring them to replace a large banner with a smaller one.
ORDER
IT IS ORDERED that the motion of defendants Tommy Thompson, James Klauser and Michael Metcalf for summary judgment is GRANTED. The clerk of court is instructed to enter judgment for defendants and close this case.
NOTES
[1] Plaintiffs have tried to place into dispute whether they were informed that their permit was being amended. See Pl.'s response to Def.'s Proposed Findings of Fact and Conclusions of Law, # 24, dkt. # 52. Plaintiffs contend that they were not advised that their permits were being amended or that their banner had to be removed by noon on December 18, 1995. Id. In support of this assertion, plaintiffs cite paragraph two of the supplemental affidavit of Shelly Johnson, dkt. # 56. Although Johnson does state that she was not told that the banner needed to be removed by noon, she makes no mention of not being told about the amendment to the permit. I can find no other documents putting into dispute plaintiffs' awareness of and the existence of the amendment to their display permit. In fact, Johnson states specifically in paragraph seven of her original affidavit, dkt. # 39, that she was told that displays would now have to be no larger than 30" to 40". Accordingly, I have accepted as undisputed defendants' proposed fact that defendants amended plaintiffs' permit and that they informed plaintiffs of this amendment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511639/ | 939 F.Supp. 1157 (1996)
UNITED STATES of America, Plaintiff,
and
New Jersey Department of Environmental Protection, Plaintiff-Intervenor,
v.
ROHM AND HAAS COMPANY, et al., Defendants,
v.
John CUCINOTTA, et al., Third Party Defendants.
Civil Action No. 85-4386.
United States District Court, D. New Jersey.
September 27, 1996.
*1158 Faith S. Hochberg, United States Attorney, Dorothy Donnelly, Dolmar Karlen, United States Department of Justice, Trenton, NJ, Joseph E. Hurley, Peter M. Flynn, Daniel C. Beckhard, Environmental Enforcement Section, United States Department of Justice, Lois J. Schiffer, Assistant Attorney General, Environment & Natural Resources Division, United States Department of Justice, Washington, DC, Frank A. Fritz, III, Patricia Hick, United States Environmental Protection Agency, Region II, New York City, for Plaintiff.
Frank X. Cardiello, John F. Dickinson, Anthony T. Drollas, Jr., State of New Jersey, Dept. of Environmental Protection, Trenton, NJ, for Plaintiff-Intervenor.
Frank E. Ferruggia, Glen P. Callahan, Joseph M. Aronds, McCarter & English, Newark, NJ, for Defendant, Owens-Illinois, Inc.
OPINION
RODRIGUEZ, District Judge.
This matter is before the court on plaintiff-intervenor State of New Jersey Department of Environmental Protection's ("NJDEP") motion for summary judgment dismissing the counterclaim of defendant, Owens-Illinois, Inc. ("Owens-Illinois"). The court, having considered the submissions of the parties, and for the reasons set forth below, grants plaintiff-intervenor's motion and dismisses the counterclaim.
BACKGROUND
The Lipari landfill occupies approximately six acres in Mantua Township. Toxic wastes, in both solid and liquid forms, were dumped there beginning in 1958 and ending in 1971 when the site was closed by the State of New Jersey. The site is currently listed on the National Priorities List ("NPL") promulgated by the Environmental Protection Agency ("EPA") pursuant to section 105 of CERCLA, 42 U.S.C. § 9605.
Pursuant to section 107 of CERCLA, 42 U.S.C. § 9607, the EPA initiated suit on September 10, 1985 to recover the costs of implementing these clean-up efforts. In January of 1986, NJDEP intervened pursuant to Section 104(c) of CERCLA, 42 U.S.C. § 9604. An amended complaint was filed by NJDEP on December 28, 1990.
In its answer to NJDEP's amended complaint, Owens-Illinois included a counterclaim against NJDEP for recoupment of
any of the response costs incurred by the State in the past or in the future ... pursuant to CERCLA, the New Jersey Comparative Negligence Act, N.J.S.A. 2A:15-5.1 et seq., the Uniform Contribution Among Joint Tortfeasor Act, N.J.S.A. 2A:53A-3 et seq., federal common law, or *1159 by way of restitution or other equitable relief, for any judgment entered against Owens-Illinois....
Owens-Illinois Answer to NJDEP First Am. Compl. at 18. NJDEP, in its answer to the counterclaim, denied any liability to Owens-Illinois. NJDEP also stated that the counterclaim failed to state a claim upon which relief can be granted, and, in the alternative, was barred under the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 et seq. NJDEP Answer to Owens-Illinois Countercl. at 2. Subsequently, in February of 1996, NJDEP filed a motion for summary judgment, claiming that Owens-Illinois' counterclaim was not only baseless and unsupported by both law and fact, but barred by the Eleventh Amendment, New Jersey law, and concepts of sovereign immunity. NJDEP Br. in Supp. of Mot. for Summ. J. at 1-2. It is this motion which is presently before the court.
DISCUSSION
A. Standard of Review for Summary Judgment
The entry of summary judgment is appropriate only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c). An issue is "genuine" if it is supported by evidence such that a reasonable jury could return a verdict in the non-moving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A fact is "material" if, under the governing substantive law, a dispute about it might affect the outcome of the suit. Id. In determining whether a genuine issue of material fact exists, the court must view the facts and all reasonable inferences drawn from those facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).
The moving party has the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Once the moving party has met this burden, the non-moving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. at 324, 106 S.Ct. at 2553. The non-moving party may not rest upon mere allegations or denials of its pleadings. Id. "[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. at 2552.
However, in deciding the motion, the court does not "weigh the evidence and determine the truth of the matter, but [instead] determine[s] whether there is a genuine issue for trial." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. If the non-movant has provided evidence exceeding the "mere scintilla" threshold in demonstrating a genuine issue of material fact, the court cannot weigh the evidence and credit the movant's interpretation of the evidence. This is so even if the movant's evidence far outweighs the nonmovant's evidence. Credibility determinations are the province of the fact-finder. Big Apple BMW, Inc. v. BMW of North America, 974 F.2d 1358, 1363 (3d Cir.1992), cert. denied, 507 U.S. 912, 113 S.Ct. 1262, 122 L.Ed.2d 659 (1993).
B. Viability of Counterclaim
1. Contribution Under CERCLA
In its counterclaim against NJDEP, Owens-Illinois appears to state a claim for contribution under CERCLA.[1] Such claims are *1160 governed by CERCLA § 113(f), 42 U.S.C. § 9613(f), which states that "[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title [CERCLA § 107(a)]...."
CERCLA § 107(a) provides liability for any (1) current owner or operator of a facility, (2) owner or operator of a facility at the time hazardous substances were disposed there, (3) person who arranged for disposal or arranged for the transport of hazardous substances for disposal, or (4) any person who accepts any hazardous substances for transport or disposal, 42 U.S.C.A. § 9607(a) (West 1995), but only if (1) they are also found to have disposed of the hazardous substances at a "facility"[2], (2) there is a "release"[3] or threatened release of the hazardous substances from the facility, and (3) the release causes the incurrence of "response" costs.[4]Id.; United States v. Alcan Aluminum Corp. (Alcan-Butler Tunnel), 964 F.2d 252, 258-59 (3d Cir.1992).
This court has found, in another order signed today, that the Lipari Landfill is a facility, from which there was a release or threatened release of hazardous substances that caused the incurrence of response costs within the meaning of CERCLA. Therefore, for NJDEP to be a liable or potentially liable party under CERCLA § 107(a), and thus allow Owens-Illinois' claim for contribution from NJDEP under CERCLA § 113(f), Owens-Illinois must show that NJDEP was either a (1) current owner or operator of Lipari, (2) owner or operator of Lipari at the time hazardous substances were disposed there, (3) person who arranged for disposal or arranged for the transport of hazardous substances for disposal at Lipari, or (4) a person who accepted any hazardous substances for transport or disposal at Lipari.
It is clear that Owens-Illinois has not carried this burden. Indeed, they do not even appear to have alleged NJDEP's liability under CERCLA § 107(a). Nonetheless, NJDEP was not the owner or operator of Lipari during its duration as an active landfill. The only actions Owens-Illinois attributes to NJDEP within the relevant time period with respect to the Lipari Landfill were to approve its use as a landfill, inspect its operations periodically, and ultimately shut it down in 1971. Such actions are not sufficient to create owner or operator liability under CERCLA § 107(a). Accord United States v. New Castle County, 727 F.Supp. 854, 864-70 (D.Del.1989).
Similarly, NJDEP cannot be the current owner or operator of Lipari simply by means of the removal action. Courts faced with a similar claim based on similar facts have come to the same conclusion. See, e.g., United States v. American Color & Chemical Corp., 885 F.Supp. 111 (M.D.Pa.1995) (holding that Commonwealth of Pennsylvania could not be considered an owner/operator of Superfund site based upon principles of sovereign immunity explicitly enumerated in CERCLA); see also 42 U.S.C. § 9607(d)(2) (affording state and local governments immunity for costs or damages resulting from response actions absent gross negligence or intentional misconduct). Still, this point seems moot, as the facts indicate that NJDEP was involved in the remediation of Lipari in only an advisory and cost sharing role NJDEP has not actively participated in the removal and clean-up of the Lipari site. See Decl. of Ferdinand C. Cataneo, attached as Ex. 2 to NJDEP Reply Br., at 5 ¶ 13. Instead, the United States Environmental Protection Agency, in cooperation with the Army Corps of Engineers, has performed all the governmental remedial actions with respect to Lipari.
*1161 Nonetheless, it is clear that neither EPA nor NJDEP could be held liable under such a theory. As the court in United States v. Atlas Minerals & Chemicals, Inc., 797 F.Supp. 411, 419 (E.D.Pa.1992), states:
The defendants' counterclaims, in a nutshell, allege that, when the EPA took over the landfill in order to initiate a cleanup pursuant to [CERCLA § 104], the EPA became an "owner or operator" within the meaning of CERCLA, and is therefore subject to liability for any releases of hazardous substances which occurred during its tenure....
. . . . .
Although this court is both aware, and appreciative, of the need for zealous advocacy, the court believes that it is time for the environmental defense bar to stop filing CERCLA counterclaims against the EPA for actions undertaken by the EPA in conjunction with cleanup activities. Such counterclaims are clearly barred.
Because there are no allegations that NJDEP ever disposed of hazardous substances at the Lipari Landfill, NJDEP's possible liability as a generator, transporter, or disposer can easily be rejected as well. As a result, the failure of Owens-Illinois to carry its burden on establishing NJDEP as a liable or potentially liable party under CERCLA § 107(a) forecloses the possibility of success of any contribution claim under CERCLA § 113(f). Accordingly, NJDEP's summary judgment on this prong of the counterclaim will be granted.
2. Contribution Restitution and Other Equitable Relief Under State Tort Law
In its answer to NJDEP's amended complaint, Owens-Illinois also appears to state counterclaims for contribution, restitution, or other equitable relief against NJDEP. See Owens-Illinois Answer to NJDEP First Am. Compl. at 18. However, Owens-Illinois seems to have abandoned these claims in their opposition to NJDEP's motion for summary judgment. They do not address nor refute NJDEP's contentions that the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 et seq., and principles of sovereign immunity require that these counterclaims be dismissed. Therefore, we will consider NJDEP's arguments unopposed, and since no genuine issue of fact has been created, NJDEP's motion for summary judgment on these counterclaims will be granted as well.
3. Counterclaim for Recoupment
Owens-Illinois also states a counterclaim for recoupment against NJDEP. See Owens-Illinois Answer to NJDEP First Am. Compl. at 18. NJDEP claims that such a counterclaim is barred by the Eleventh Amendment and the New Jersey Tort Claims Act. Owens-Illinois responds that NJDEP's participation in the current action constituted a waiver of their sovereign and Eleventh Amendment immunities, thereby allowing the recoupment claim.
Admittedly, the law on the issue of recoupment under CERCLA appears to be in a state of flux. Owens-Illinois cites cases such as Livera v. First National State Bank, 879 F.2d 1186 (3d Cir.), cert. denied sub nom., Livera v. Small Business Administration, 493 U.S. 937, 110 S.Ct. 332, 107 L.Ed.2d 322 (1989), United States v. Shaner, 1992 WL 154652 (E.D.Pa. June 15, 1992), and United States ex rel. Department of Fish & Game v. Montrose, 788 F.Supp. 1485 (C.D.Cal.1992), to support its contention that recoupment claims are viable in the context of CERCLA. NJDEP, on the other hand, cites cases such as United States v. Iron Mountain Mines, Inc., 881 F.Supp. 1432 (E.D.Cal.1995), and United States v. Keystone Sanitation Co., 867 F.Supp. 275 (M.D.Pa.1994), to support its view that recoupment claims are not permissible under CERCLA. We find that those cases which do not allow recoupment within the context of CERCLA are the more well reasoned decisions, and thus grant NJDEP's motion for summary judgment.
In Keystone Sanitation, the EPA brought a cost recovery action under CERCLA against various defendants as potentially responsible parties ("PRPs"). Defendants counterclaimed with, among other things, claims against the Commonwealth of Pennsylvania for recoupment. Keystone Sanitation, 867 F.Supp. at 279. In addressing the recoupment issue, the court noted that recoupment *1162 was a "common law, equitable doctrine that permits a defendant to assert a defensive claim aimed at reducing the amount of damages recoverable by a plaintiff." Id. at 282. Although the court noted that other courts allowed recoupment counterclaims in CERCLA actions, it was not persuaded that such claims were proper. Id.
Indeed, the court finds recoupment a rather tortured concept in the context of a CERCLA § 107 cost recovery action.... [R]ecoupment claims are counterclaims for damages caused by the EPA when it has acted in its sovereign capacity in cleaning up the site, and to allow the claim to go forward requires a waiver of immunity.... [A]lthough the court agrees with the case law citing the general rule that the government's institution of a lawsuit is a sufficient waiver of sovereign immunity in some circumstances, ... there is no authoritative precedent stating that it is a sufficient waiver in the context of CERCLA's very unique and restrictive statutory scheme.
Indeed, it seems inconsistent with the statutory scheme and the case law pertinent to other CERCLA pleading limitations to say that the waiver requirement for a recoupment claim is satisfied because the government instituted a CERCLA action. If that is the rationale, should other equitable counterclaims be permitted as well? What happens, then, to the settled law pertinent to defensive pleading, which recognizes only a few limited defenses to liability and costs, and does not permit counterclaims that attempt to subvert these limitations.
Id. at 282-83. After analyzing the different rationales used by courts which allowed recoupment claims in CERCLA actions, the Keystone Sanitation court noted that relief sought through recoupment was no different from that sought under the "inconsistency with the NCP" defense. Therefore, the court deferred on the issue in the hope that the Third Circuit would address it.
Although the Third Circuit has not addressed the issue at this time, the Eastern District of California did in Iron Mountain Mines, where the EPA and State of California brought a cost recovery action under CERCLA against various defendants. Once again, the defendants raised recoupment claims against the State. Although the Iron Mountain Mines court recognized that recoupment claims had been allowed by other courts, including that very court in a prior order in the same case, the court cited Keystone Sanitation with approval in determining that the concept of recoupment was not appropriate under CERCLA. Iron Mountain Mines, 881 F.Supp. at 1453-54.
If the theory of recoupment is adopted in the context of a CERCLA action, the rather extraordinary exposure that results to governmental entities is evident.... A state entity would be exposed through recoupment to suit in federal court for state law claims that would normally be barred by the Eleventh Amendment and state sovereign immunity law. The same inconsistency with standards set out in CERCLA could well arise. See 42 U.S.C. § 9607(d)(2) (state government liable in an emergency only for gross negligence). Although CERCLA waives sovereign immunity for actions against governmental agencies who are responsible for environmental injury, and subjects them as well to claims for contribution, there is nothing in CERCLA that addresses a recoupment remedy or suggests that by bringing a CERCLA action a government agency exposes itself to claims under other state or federal statutory and common law schemes as to which it would otherwise be immune from suit. Can this far reaching result have been intended by Congress in the enactment of CERCLA?
Id. at 1454 (footnote omitted). The court then considered the development of recoupment jurisprudence, concluded that extension of that doctrine to CERCLA was inappropriate, and dismissed the recoupment claims.
We are persuaded that the rationale behind Keystone Sanitation and Iron Mountain Mines soundly supports our decision today. As both decisions make clear, Congress enacted CERCLA to be its own statutory framework. As both cases point out, allowing recoupment claims in effect allows remnants of the common law to infect what *1163 Congress meant to establish with CERCLA the otherwise abolishment of common law doctrine with respect to clean-up of hazardous waste sites. Additionally, since CERCLA provides Owens-Illinois with clear statutory relief similar to that which they seek, it is reasonable to conclude, especially in light of recoupment's common law origins and history, that the doctrine not be applicable in the CERCLA context.
Additionally, we are guided by Judge Fisher's decision in United States v. Wheaton Industries, 1991 WL 208877 (D.N.J. Oct. 8, 1991), for the proposition that no waiver of sovereign or Eleventh Amendment immunities has occurred. In Wheaton, the EPA brought a cost recovery action under CERCLA, claiming that Wheaton was a responsible party. Wheaton, 1991 WL 208877 at *1. In its answer, Wheaton filed a third party complaint against NJDEP. Id. Subsequently, NJDEP intervened in the action. Id. With respect to whether NJDEP had waived its Eleventh Amendment immunity, Judge Fisher noted that although a state, in availing itself of the federal court system to secure affirmative relief, effectively waives Eleventh Amendment immunity for counterclaims which arise from the same events underlying the State's claims, the Eleventh Amendment immunity had not been voluntarily waived because NJDEP's intervention as a plaintiff in the case was defensive. Id. at *3. If NJDEP had not intervened, Wheaton could invoke the doctrines of res judicata and collateral estoppel to preclude relitigation of issues decided against EPA. Id.
The cases cited by Owens-Illinois in its opposition do not sway our conclusion. For instance, Livera, although involving a claim for recoupment, does not do so within the context of CERCLA. Therefore, Owens-Illinois' claims that Third Circuit precedent permits CERCLA defendants to maintain recoupment counterclaims is erroneous. Keystone Sanitation clearly states that the Third Circuit has not decided this issue. Other cases cited by Owens-Illinois which allow recoupment in CERCLA actions based upon waiver of immunity are distinguishable. It is clear in Montrose, Shaner, and United States v. Mottolo, 605 F.Supp. 898 (D.N.H.1985), that the governments acted voluntarily as plaintiffs. Here it is equally clear, in light of Wheaton and NJDEP's position as plaintiff-intervenor, that NJDEP did not act voluntarily. Moreover, none of these cases view CERCLA, as Keystone Sanitation and Iron Mountain Mines correctly do, as having its own, independent statutory framework which limits counterclaims to those authorized by CERCLA. See also Pennsylvania v. Union Gas Co., 491 U.S. 1, 109 S.Ct. 2273, 105 L.Ed.2d 1 (1989) (finding that Congress, through the Commerce Clause, abrogated state immunity from liability under CERCLA by including states in the definitions of "persons" and "owners or operators").
Recoupment doctrine, with its tenuous basis in the common law, cannot serve as a substitute for a clearly expressed congressional intent to subject [NJDEP] to state or non-CERCLA federal law counterclaims, as to which they would otherwise be immune, in the context of a CERCLA action, when CERCLA itself expressly limits its waiver of sovereign immunity to CERCLA counterclaims.
Iron Mountain Mines, 881 F.Supp. at 1456 (footnote omitted). Accordingly, we will grant NJDEP's summary judgment on Owens-Illinois' counterclaim for recoupment.
Regardless of the waiver and immunity issues, Owens-Illinois recoupment counterclaim would be unsuccessful. In its opposition brief, Owens-Illinois states several bases for recoupment against NJDEP: (1) NJDEP's knowledgeable failure to take action to prevent background sources of contamination from polluting the off site areas; (2) NJDEP's remedial actions themselves causing a release of hazardous substances;[5] (3) Rohm & Haas, Inc.'s "legacy" of dumping hazardous materials at the Lipari site and NJDEP's subsequent failure to stop it; and (4) the existence of fraud perpetrated by government contractors. We will discuss the *1164 validity of each of these stated bases for recoupment in turn.
First, Owens-Illinois claims that NJDEP failed to prevent background areas of pollution from contaminating the off-site areas, even though they had knowledge of the occurrence. However, this claim is unavailing. The New Jersey Tort Claims Act, N.J.S.A. 59:1-1 et seq., supports this conclusion. As NJDEP points out, it is undisputed that there are over 6,000 known contaminated hazardous waste sites in the State of New Jersey.[6] The cleanup and containment of any one of these sites is a daunting task, so the mind boggles when considering that a lone State agency such as NJDEP, even when working in conjunction with the EPA, has responsibility for all of them. Clearly, all the resources at NJDEP's disposal could not remediate all of these sites at the same time. The New Jersey legislature recognized this predicament in enacting the Tort Claims Act:
The Legislature recognizes the inherently unfair an inequitable results which occur in the strict application of the traditional doctrine of sovereign immunity. On the other hand the Legislature recognizes that while a private entrepreneur may readily be held liable for negligence within the chosen ambit of his activity, the area within which the government has the power to act for the public good is almost without limit and therefore government should not have the duty to do everything that might be done. Consequently, it is hereby declared to be the public policy of this State that public entities shall only be liable for their negligence within the limitations of this act and in accordance with the fair and uniform principles established herein. All of the provisions of this act should be construed with a view to carry out the above legislative declaration.
N.J.S.A. § 59:1-2 (West 1992). Under the Tort Claims Act, immunity is the rule; liability is the exception. See N.J.S.A. 59:2-1 (stating that "[e]xcept as otherwise provided ..., a public entity is not liable for an injury, whether such injury arises out of an act or omission of a public entity").
Specifically, the Tort Claims Act provides NJDEP with immunity for these alleged actions. Under N.J.S.A. 59:2-3, NJDEP has immunity arising from the exercise of judgment or discretion vested in them, which includes the provision of adequate government services. Additionally, N.J.S.A. 59:2-4 provides NJDEP with immunity for failing to enforce any law. Similarly, N.J.S.A. 59:2-6 provides NJDEP with immunity for failure to inspect or negligent inspection of property.
Clearly, Owens-Illinois' allegations are that NJDEP failed to provide the resources necessary to prevent further contamination of the Lipari site. As such, they necessarily claim that NJDEP failed to use proper discretion in enforcing the state and federal environmental laws. In light of the Tort Claims Act, this stated basis for recoupment is clearly insufficient. Under a similar rationale, Owens-Illinois' second and third bases for recoupment must also be eliminated. Although Montrose held that similar provisions in the California Tort Claims Act did not afford immunity, that case is distinguishable in that the California Tort Claims Act consists of provisions for liability which the New Jersey Tort Claims Act does not contain. See Montrose, 788 F.Supp. at 1494.
At this point, only the fourth stated basis for recoupment, the alleged fraud perpetrated by government contractors, remains. Although the Tort Claims Act does not appear to provide immunity here, such is irrelevant. The fraud alleged by the government contractors was in the sampling done in the off-site areas. As such, the costs are not the subject of any prior consent decree and remain unrecovered. However, the costs of the additional testing done by these contractors was fully borne by the EPA NJDEP incurred no costs in association with this testing. See Decl. of Ferdinand C. Cataneo, attached as Ex. 2 to NJDEP Reply to Owens-Illinois Opp. to Mot. for Summ. J., at 4-5 ¶ 12. Therefore, NJDEP is not seeking recovery *1165 from Owens-Illinois for any of the costs associated with this fraud. Therefore, this fourth basis for Owens-Illinois' claim for recoupment must fail as well.
As a result, NJDEP's motion for summary judgment will be granted, and Owens-Illinois' counterclaims are dismissed.
An appropriate order will be entered.
NOTES
[1] Owens-Illinois does not explicitly state that they are seeking contribution under CERCLA. In their answer to NJDEP's amended complaint, Owens-Illinois states a claim for "recoupment pursuant to CERCLA," and demands judgment against the State for "recoupment and contribution of all sums that it may be compelled to pay...." Both NJDEP and this court interpret these statements as an attempt to state a counterclaim under CERCLA § 113(f), 42 U.S.C. § 9613(f).
[2] A facility is defined under CERCLA as:
(A) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consume product in consumer use or any vessel.
42 U.S.C.A. § 9601(9) (West 1995).
[3] See id. § 9601(22).
[4] See id. § 9601(25).
[5] Owens-Illinois claims that because remedy discovery has been stayed in this matter until a later stage of the proceedings, NJDEP's motion for summary judgment is premature. However, as previously discussed, such event has no effect on the ultimate disposition of the motion.
[6] NJDEP Reply to Owens-Illinois' Opp'n to Mot. for Summ. J. at 2 (citing New Jersey Department of Environmental Protection Site Remediation Program, Known Contaminated Sites in New Jersey (1994)). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511767/ | 502 F.Supp.2d 719 (2007)
John DOE, Plaintiff,
v.
SEXSEARCH.COM, et al., Defendants.
No. 3:07 CV 604.
United States District Court, N.D. Ohio, Western Division.
August 22, 2007.
*720 *721 Brandie L. Hawkins, Lima, OH, Dean M. Boland, Lakewood, OH, for Plaintiff.
Scott R. Torpey, William D. Adams, Jaffe, Raitt, Heuer & Weiss, Southfield, MI, Max Kravitz, Michael D. Dortch, Kravitz, Dortch & Brown, Columbus, OH, Gary J. Kaufman, Dana Milmeister, Kaufman Law Group, Los Angeles, CA, for Defendants.
MEMORANDUM OPINION AND ORDER
ZOUHARY, District Judge.
This matter is before the Court on Defendants' Motion to Dismiss pursuant to Rule 12(b)(6) (Doc. No. 123) and Plaintiffs Motion to. Strike Defendants' Joint Reply (Doc. No. 149). The Court has jurisdiction *722 over this matter pursuant to 28 U.S.C. § 1332. For the reasons detailed below, Defendants' Motion is granted, and Plaintiffs Motion is denied.
BACKGROUND
Sexsearch.com (SexSearch) is a website offering an online adult dating service which encourages its members to meet and engage in sexual encounters (Complaint ¶¶ 53, 96). Members are permitted to provide information for a profile, which consists of a list of responses to specific questions posed by the website. Members may also upload photographs and video content to their profile (Complaint ¶¶ 121-22, 149, 151).
Plaintiff John Doe became a gold member of SexSearch in October 2005 (Complaint ¶ 173). Shortly thereafter, Plaintiff located Jane Roe's profile, which contained the following information: Birthdate June 15, 1987; Age 18; an authentic image of Jane Roe at her then-current age; and the statement that her ideal match included a male "who could last for a long time" (Complaint ¶¶ 198, 205).
Plaintiff began chatting online through SexSearch with Jane Roe, and the two eventually decided to schedule a sexual encounter to take place at Jane Roe's home on November 15, 2005. The meeting went as planned, and Plaintiff and Jane Roe engaged in consensual sexual relations (Complaint ¶¶ 219, 222). However, as it turned out, Jane Roe was not actually 18, but a 14-year-old child.
On December 30, 2005, Plaintiffs home was surrounded by law enforcement officers, and he was arrested and charged with three separate counts of engaging in unlawful sexual conduct with a minor, all felonies of the third degree (Complaint ¶¶ 226-33). As a result of the charges, Plaintiff could face fifteen (15) years in prison, and a classification that might include lifetime registration as a sex offender (Complaint ¶¶ 235-36).
Procedural Posture
On March 1, 2007, Plaintiff filed this Complaint, naming as Defendants the owners of SexSearch, which include: Sexsearch.com; Sexsearchcom.com; Cyber Flow Solutions, Inc.; Manic Media, Inc.; Stallion.com FSC Limited; DNR; Experienced Internet, Inc.; Fiesta Catering International, Inc.; Adam Small; Camelia Francis; Damian Cross; Ed Kunkel; Mauricio Bedoya; Patricia Quesada; and Richard Levine (Defendants) (Complaint ¶¶ 115-33, 40). Defendants contend Defendant/Intervenor Cytek, Ltd. is the true owner of the SexSearch website and business, and thus is the only proper party.
The Court initially granted Plaintiff an Ex-Parte Temporary Restraining Order on March 2, 2007 (Doc. No. 11), which was extended on March 13, 2007 after Defendants failed to appear at a Preliminary Injunction Hearing (Doc. Nos. 25, 26). After Defendants retained counsel and entered appearances, the Court held a Preliminary Injunction Hearing on April 16, 2007. At this hearing, the Court denied Plaintiffs Motion for a Preliminary Injunction and vacated the existing TRO (Doc. No. 130).
Defendants have filed individual Motions to Dismiss, both on the merits (pursuant to Rule 12(b)(6)) and for lack `of personal jurisdiction (pursuant to Rule 12(b)(2)) (Doc. Nos. 113, 117, 118, and 123). For the sake of judicial economy, Defendant/Intervenor Cytek, Ltd. agreed to enter an appearance and waive all service of process and personal jurisdiction issues, allowing the Court to consider a Rule 12(b)(6) motion to dismiss on the merits before undertaking the weighty task of evaluating personal jurisdiction for each of the sixteen remaining Defendants (Doc. No. 110). Defendants' Motions to Dismiss on Personal Jurisdiction Grounds were *723 held in abeyance pending the outcome of their Motion on the merits (Doc. No. 142).
Plaintiff's Claims
Plaintiff alleges that upon becoming a member of SexSearch, he reviewed SexSearch's warranties, and agreed to SexSearch's Terms and Conditions and profile guidelines (Complaint ¶¶ 173-78). He contends Defendants warranted "all persons within this site are 18 +" (Complaint ¶ 186). It is also alleged SexSearch's contractual agreement included the Terms and Conditions, in which Defendants promised to review, verify and approve all profiles on its website and remove materials depicting minors (Complaint ¶¶ 188-92). Plaintiff alleges the following fourteen claims:
1. Count One alleges SexSearch breached its contract by permitting minors to become paid members, and by delivering a minor to Plaintiff for the purpose of sexual relations (Complaint ¶¶ 295-97).
2. Count Two alleges Defendants engaged in fraud by representing that all persons on its site were over the age of 18, but allowed a minor to become a member and failed to remove her profile (Complaint ¶¶ 301, 303-04).
3. Count Three alleges Defendants negligently inflicted emotional distress by failing to remove the profile of a minor from its website, and by delivering a minor to Plaintiff for the purpose of engaging in sexual relations (Complaint ¶ 307).
4. Count Four alleges negligent misrepresentation because Defendants promised all members were adults, 11. but failed to remove the profile of a minor (Complaint ¶ 316).
5. Count Five alleges breach of warranty because Defendants Warranted all paid members were persons 18 years of age or older but delivered a minor to Plaintiff for the purpose of engaging in sexual relations (Complaint ¶¶ 323, 325).
6. Counts Six alleges Defendants committed a deceptive trade practice in violation of the Ohio Consumer Sales Practices Act by falsely warranting that no members were under the age of 18 (Complaint ¶¶ 342-43).
7. Counts Seven alleges Defendants committed unfair and deceptive acts in violation of the Ohio Consumer Sales Practices Act by falsely representing that no members were under the age of 18 (Complaint ¶ 354).
8. Count Eight alleges unconscionability in violation of the Ohio Consumer Sales Practices Act by incorporating into the contract a clause limiting damages to the amount of the contract (Complaint ¶ 358).
9. Count Nine alleges unconscionability in violation of the Ohio Consumer Sales Practices Act by incorporating into the contract a clause allowing the supplier to unilaterally cancel the contract after the consumer's three (3) day right to cancel has passed without allowing the consumer the option (Complaint ¶ 362).
10. Count Ten alleges unconscionability in violation of the Ohio Consumer Sales Practices Act by including clauses in the contract that are substantially one-sided (Complaint ¶ 366).
11. Count Eleven alleges unconscionability by requiring Plaintiff to agree to terms and conditions that contained no guarantee Defendants would or could perform their contractual promises (Complaint ¶ 370).
*724 12. Count Twelve alleges unconscionability by including a limitation on liability that was unreasonably favorable to Defendants (Complaint ¶¶ 375-78).
13. Count Thirteen alleges unconscionability by including a clause in the contract disclaiming all liability (Complaint ¶ 383).
14. Count Fourteen alleges Defendants failed to warn that minors may be members of the website (Complaint ¶¶ 393-95).
These fourteen causes of action essentially boil down to either (a) Defendants failed to discover Jane Roe lied about her age to join the website, or (b) the contract terms are unconscionable.
STANDARD OF REVIEW
When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the function of the Court is to test the legal sufficiency of the Complaint. In scrutinizing the Complaint, the Court is required to accept the allegations stated in the Complaint as true, Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984), while viewing the Complaint in a light most favorable to the Plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Westlake v. Lucas, 537 F.2d 857, 858 (6th Cir.1976). The Court is without authority to dismiss the claims unless it can be demonstrated beyond a doubt that Plaintiff can prove no set of facts which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Westlake, 537 F.2d at 858. See generally 2 JAMES W. MOORE, MOORE'S FEDERAL. PRACTICE, § 12.34[1] (3d ed.2003).
DISCUSSION
Immunity under the Communications Decency Act
Defendants first argue they are immune from most of Plaintiffs claims by the Communications Decency Act (CDA), 47 U.S.C. § 230. More specifically, they contend an interactive computer service cannot be held liable on any state or federal claim which would render that service liable for content provided by third parties, and thus the CDA bars Plaintiffs claims based on the purported failure of the website to prevent Jane Roe from misrepresenting her age. These claims are: (1) breach, of contract (First cause of action); (2) fraud (Second cause of action); (3) negligent infliction of emotional distress (Third cause of action); (4) negligent misrepresentation (Fourth cause of action); (5) breach of warranty (Fifth cause of action); (6) violation of the Ohio Consumer Sales Practices Act (Sixth and Seventh causes of action); and (7) failure to warn (Fourteenth cause of action) (Def.Reply, p. 4).
Plaintiff responds that because SexSearch reserves the right to modify the content of profiles when they do not meet the profile guidelines, they are an information content provider and thus not immune under the CDA. In the alternative, Plaintiff argues the CDA only preempts claims relating to defamation (Pl.Opp., p. 5).
Section 230 of the CDA states "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider," 47 U.S.C. § 230(c)(1), and "[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section." Id. at § 230(e)(3). Thus, Defendants are immune from liability from state law claims if: (1) SexSearch is a "provider or user of an interactive computer service"; (2) the claim is based on "information provided by another information content provider"; and (3) the claim would treat SexSearch "as publisher or speaker" of that information. *725 Universal Commun. Sys., Inc. v. Lycos, Inc., 478 F.3d 413, 418 (1st Cir. 2007).
Although the Sixth Circuit has yet to interpret this section, "[n]ear-unanimous case law holds that Section 230(c) affords immunity to [interactive computer services (ICSs)] against suits that seek to hold an ICS liable for third-party content." Eckert v. Microsoft Corp., No. 06-11888, 2007 U.S. Dist. LEXIS 15295, at *6 (E.D.Mich. Jan. 8, 2007) (quoting Chi. Lawyers' Comm. for Civ. Rights Under the Law, Inc. v. Craigslist, Inc., 461 F.Supp.2d 681, 688 (N.D.Ill.2006)).
"Interactive Computer Service" Provider
The statute defines interactive computer service as "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer, server, including specifically a service or system that provides access to the Internet." 47 U.S.C. § 230(f)(2). Here, there is no question (and Plaintiff does not argue otherwise) that SexSearch is an interactive computer service, as the website "functions as an intermediary by providing a forum for the exchange of information between third party users." Doe v. MySpace, Inc., 474 F.Supp.2d 843, 849 (W.D.Tex.2007).
"Information Provided by Another"
The statute defines information content provider to be "any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service." 47 U.S.C. § 230(f)(3). Here, Plaintiff alleges SexSearch is an information content provider because the website "reserves the right, and does in fact, modify the content of profiles when they do not meet the profile guidelines and as such they are responsible in whole or part for the creation or development of the information" (Pl.Opp., p. 5).
In support of this contention, Plaintiff cites Anthony v. Yahoo! Inc., 421 F.Supp.2d 1257 (N.D.Cal.2006), in which the court found an online dating service not immune under Section 230 from claims it deliberately "create[d] false profiles." Id. at 1262. The CDA clearly does not immunize a defendant from allegations that it created tortious content by itself, as the statute only grants immunity when the information that forms the basis for the state law claim has been provided by "another information content provider." 47 U.S.C. § 230(c)(1) (emphasis added); Universal Commun. Sys., 478 F.3d at 419-20.
Although the court in Anthony noted that a website such as SexSearch may simultaneously be both an interactive computer service and an information content provider, the critical issue is whether SexSearch "acted as an information content provider with respect to the information that [Plaintiff] claim[s] is false." 421 F.Supp.2d at 1263, n. 6; Carafano v. Metrosplash.com, Inc., 339 F.3d 1119, 1123 (9th Cir.2003) ("an `interactive computer service' qualifies for immunity so long as it does not also function as an `information content provider' for the portion of the statement or publication at. issue"). While SexSearch may have reserved the right to modify the content of profiles in general, Plaintiff does not allege SexSearch specifically modified Jane Roe's profile, and is thus not an information content provider in this case. See Ben Ezra, Weinstein & Co. v. America Online, Inc., 206 F.3d 980, 986 (10th Cir.2000) (upholding immunity for the on-line provision of stock information even though AOL communicated frequently with the stock quote providers and had occasionally deleted stock symbols and other information from its database in an effort to correct errors). Additionally, the *726 mere fact SexSearch provided the questionnaire Jane Doe answered falsely is not enough to consider SexSearch the developer of the false profile. See Carafano, 339 F.3d at 1124-25.
Treatment "as the Publisher"
The last prong of Section 230 provides that SexSearch will be immune from liability if the state law claims would involve treating the website "as the publisher" of the false information. 47 U.S.C. 230(c)(1).
Plaintiff contends the CDA only applies to defamation cases, and hence is inapplicable to the present action. However, of the courts that have reviewed Section 230, there seems to be a consensus that its grant of immunity is broad and far reaching. E.g., Universal Commun. Sys., 478 F.3d at 418 ("[t]he other courts that have addressed these issues have generally interpreted Section 230 immunity broadly"); Carafano, 339 F.3d at 1123 ("reviewing courts have treated [Section 230] immunity as quite robust"). In fact, several courts have expressly held that the CDA's immunity is not limited only to claims of defamation. See Beyond Sys. v. Keynetics, Inc., 422 F.Supp.2d 523, 536 (D.Md.2006) (applying Section 230 to a claim under the Maryland Commercial Electronic Mail Act); Universal Commun. Sys., 478 F.3d at 421 (applying Section 230 to a claim under a Florida securities law and cyber-stalking law); Novak v. Overture Services, Inc., 309 F.Supp.2d 446 (E.D.N.Y.2004) (applying Section 230 to a claim of tortious interference with prospective economic advantage); Noah v. AOL Time Warner, Inc., 261 F.Supp.2d 532, 538 (E.D.Va.2003) (applying Section 230 to a claim based on Title II of the Civil Rights Act of 1964).
In Carafano, a case in which the plaintiff unsuccessfully attempted to hold an online dating service liable for a third party's creation of a false profile that eventually led to the plaintiff receiving highly-threatening and sexually-explicit messages, the court explained the policy reasons underlying the CDA as follows:
Congress made a policy choice . . . not to deter harmful online speech through the separate route of imposing, tort liability on companies that serve as intermediaries for other parties' potentially injurious messages . . . The specter of tort liability in an area of such prolific speech would have an obvious chilling effect. It would be impossible for service providers to screen each of their millions of postings for possible problems. Faced with potential liability for each message republished by their services, interactive computer service providers might choose to severely restrict the number and type of messages posted. Congress considered the weight of the speech interests implicated and chose to immunize service providers to avoid any such restrictive effect.
Carafano, 339 F.3d at 1123-24 (quoting Zeran v. America Online, Inc., 129 F.3d 327, 330-31 (4th Cir.1997) (holding AOL immune under Section 230 from claims it failed to remove a false advertisement after specific notice of its falsity)). Moreover, another important purpose of Section 230 is to remove "the disincentives of self-regulation that would otherwise result if liability were imposed on intermediaries that took an active role in screening content." Universal Commun. Sys., 478 F.3d at 419 (citing Zeran, 129 F.3d at 331).
While both Carafano and Zeran speak only in terms of tort liability, as there was no occasion to address non-tort claims in those cases, their reasoning does not preclude Section 230 immunity from extending to Plaintiffs non-tort claims. Indeed, the plain language of Section 230 does not limit its grant of immunity to tort claims: "No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with *727 this section." 47 U.S.C. at § 230(e)(3) (emphasis added). Further, the legislative history demonstrates Congress intended to extend immunity to all civil claims: "This section provides `Good Samaritan' protections from civil liability for providers or users of an interactive computer service for actions to restrict or to enable restriction of access to objectionable online material." 142 Cong. Rec. H1078 (1996) (emphasis added).
Thus, the CDA grants immunity from all civil liability, except for the few exceptions expressly laid out in the statute: (1) federal criminal law; (2) intellectual property law; (3) State law that is consistent with this section; and (4) the Electronic Communications Privacy Act of 1986. 47 U.S.C. § 230(e). In fact, several courts have specifically applied Section 230 to breach of contract claims. Jane Doe One v. Oliver, 46 Conn.Supp. 406, 755 A.2d, 1000, 1002, 1004 (2000); Schneider v. Amazon.com, Inc., 108 Wash.App. 454, 464, 31 P.3d 37 (Wash.Ct.App.2001); Green v. America Online, 318 F.3d 465, 471 (3d Cir.2003) (holding AOL did not waive Section 230 immunity by the terms of its membership contract).
Therefore, in determining whether to apply the CDA, the Court should not ask what particular form the plaintiff's claim takes whether it sounds in tort or specifically alleges defamation (if such were the case, plaintiffs could plead their way around the CDA and undermine the will of Congress) but whether the claim is directed toward the defendant in its publishing, editorial, and/or screening capacities, and seeking to hold it "liable for its publication of third-party content or harms flowing from the dissemination of that content." Doe v. MySpace, 474 F.Supp.2d at 849. See also Green, 318 F.3d at 471; Noah, 261 F.Supp.2d at 538-39;
For example, in Doe v. MySpace, the plaintiffs asserted they were not suing for Myspace's posting of content, but rather for the website's failure to keep minors off the website or to prevent sexual predators from communicating with minors. The court found the "artful pleading" to be "disingenuous," and held that the CDA immunized Myspace from liability because plaintiffs were seeking to hold Myspace liable for publishing content provided by third parties. Doe v. MySpace, 474 F.Supp.2d at 849-50 ("It is quite obvious the underlying basis of Plaintiffs' claim is that, through postings on Myspace, Pete Solis and Julie Doe met and exchanged personal information which eventually led to an in-person meeting and the sexual assault of Jane Doe. If Myspace had not published [their content], Plaintiffs assert they never would have met and the sexual assault never would have occurred").
In the present action, Plaintiff attempts to do the same thing as the plaintiffs in Doe v. MySpace and, in fact, comes right out and tells the Court his Complaint is artfully pled to avoid the CDA (Pl.Opp., p. 5) ("That is precisely why Plaintiff is asserting the content of the profiles are not at issue. It is the fact that a minor was on the SexSearch website, and not, the content of the minor's profile that is at issue").
At the end of the day, however, Plaintiff is seeking to hold SexSearch liable for its publication of third-party content and harms flowing from the dissemination of that content. The underlying basis for Plaintiff's claim is that if SexSearch had never published Jane Roe's profile, Plaintiff and Jane Roe never would have met, and the sexual encounter never would have taken place. Plaintiff thus attempts to hold SexSearch liable for "decisions relating to the monitoring, screening, and deletion of content from its network actions quintessentially related to a publisher's role." Green, 318 F.3d at 471. Section *728 230 specifically proscribes liability in such circumstances. Zeran, 129 F.3d at 332-33.
Therefore, Defendants are immune from liability with regard to Counts One through Seven and Count Fourteen, as they all hinge on SexSearch's failure to remove Jane Roe's profile, or their failure to prevent John Doe from communicating with her. Further, even if Defendants were not immune under the CDA, each of Plaintiffs individual claims fails on the merits. A discussion of these individual claims follows.
The Merits of the Individual Claims
As an antecedent matter, the Court must address Plaintiffs Motion to Strike Defendants' Joint Reply (Docket No. 149) on the grounds that it is replete with references to matters outside the pleadings (Docket No. 149, p. 3-4). The Court must determine whether it can consider the Terms and Conditions, the Privacy Policy, the WARNING, and the age-check box attached to Defendants' Motion to Dismiss.
It is well established that a Rule 12(b)(6) motion attacks the sufficiency of the pleadings, and a court ordinarily may not consider documents outside the four corners of the complaint. Weiner v. Klais & Co., 108 F.3d 86, 88 (6th Cir.1997). However, documents a defendant attaches to a motion to dismiss are considered part of the pleadings if they are (1) referred to in the plaintiffs complaint and (2) are central to his claims. Id. "Otherwise, a plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing to attach a dispositive document upon which it relied!' Id.
Here, the documents attached to Defendants' Motion to Dismiss are extensively referenced in the Complaint (see Complaint ¶¶ 106, 175-78, 182-92, 246-48, 330-35, 343, 361-89). Moreover, the documents are central to Plaintiffs claims not only does he allege Defendants breached the Terms and Conditions and the purported warranty (Complaint ¶¶ 291-96, 322-26), but six of his fourteen claims allege that clauses in the Terms and Conditions are unconscionable (Complaint ¶¶ 356-89). Therefore, the documents attached to Defendants' Motion to Dismiss may properly be considered by the Court, and Plaintiffs Motion to Strike (Docket No. 149) is denied.
Defendants have also asked the Court to take judicial notice of the fact that numerous other adult dating websites exist (Def. Req. for Jud. Not.). When deciding a Rule 12(b)(6) motion, the Court may consider materials in addition to the complaint "if such materials are public records or are otherwise appropriate for the taking of judicial notice." New Eng. Health Care Employees Pension Fund v. Ernst & Young, LLP, 336 F.3d 495, 501 (6th Cir. 2003). The Court may take judicial notice of facts "not subject to reasonable dispute" which are "either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b). The fact that numerous adult-dating websites exist is capable for ready and accurate determination and is not subject to reasonable dispute. Accordingly, the Court takes judicial notice of the existence of numerous other adult-dating websites.
Breach. of Contract
Under Ohio law, to prove breach of contract, a plaintiff must demonstrate by a preponderance of evidence that: (1) a contract existed; (2) plaintiff fulfilled his obligations; (3) defendant failed to fulfill his obligations; and (4) damages resulted from this failure. Lawrence v. Lorain Cty. Community College, 127 Ohio App.3d 546, 548-49, 713 N.E.2d 478 (1998). Therefore, the Court must first determine *729 whether a contract existed and its essential terms.
In order to gain access to SexSearch as a member, all potential members must check a box that appears on the webpage, which states: "I am over 18, I have read and, agree to the terms and conditions and the privacy policy " (Def. Mot. to Dismiss, p. 29) (emphasis in original). This type of contract is commonly referred to as a "clickwrap" agreement. "A clickwrap agreement appears on an internet webpage and requires that a user consent to any terms or conditions by clicking on a dialog box on the screen in order to proceed with the internet transaction."[1]Feldman v. Google, Inc., No. 06-2540, 2007 WL 966011, at *6, 2007 U.S. Dist. LEXIS 22996, at *17 (E.D.Pa. Mar. 29, 2007) (citing Specht v. Netscape Comms. Corp., 306 F.3d 17, 22 (2d Cir.2002)). Although they are electronic, clickwrap agreements are considered "writings" because "they are printable and storable." Id. Here, it is undisputed the contract consisted of the Terms and Conditions and the Profile Guidelines (Complaint ¶¶ 291-96; Def. Mot. to Dismiss, pp. 15-17).
Plaintiff alleges Defendants breached the contract by "permitting minors to become paid members" and by "deliver[ing] a minor to Plaintiff for the purpose of sexual relations" (Complaint ¶¶ 296-97). However, the Terms and Conditions provide that SexSearch does not "assume any responsibility for verifying[] the accuracy of the information provided by other users of the Service" (Def. Mot. to Dismiss, Ex. A, ¶ 17). Therefore, Defendants complied with the Terms and Conditions, and Plaintiffs breach of contract claim fails as a matter of law. Ohio Univ. Bd. of Trustees v. Smith, 132 Ohio App.3d 211, 221, 724 N.E.2d 1155 (Ohio Ct.App.1999) ("[w]hen the terms of a contract are unambiguous, courts look to the plain language of the document and interpret it as a matter of law").
Fraud
Plaintiff alleges in his Second cause of action that SexSearch fraudulently represented "all persons on its site are '18+' years of age," and that it "verifies all members profiles prior to posting." Plaintiff further contends he reasonably relied on these representations (Complaint ¶¶ 301-03).
The elements of a claim of fraud are:
(a) a representation . . ., (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (1) a resulting injury proximately caused by the reliance.
Orbit Electronics, Inc. v. Helm Instrument Co., Inc., 167 Ohio App.3d 301, 313-14, 855 N.E.2d 91 (2006) (citations omitted).
As a matter of law, Plaintiff could not have reasonably relied on a purported representation somewhere on the SexSearch website that all persons using the site were over the age of 18. Plaintiff, as a registered member of the site, knew the membership-registration process did not involve an age-verification procedure. But more importantly, Plaintiff cannot claim he *730 was misled or he reasonably relied on the representation that "all members are 18 +" when the Terms and Conditions clearly state the website did not guarantee (and took no responsibility for verifying) members' ages (Def. Mot. to Dismiss, Ex. A, ¶ 17). Further, the Terms and Conditions state that no "information, whether oral or written, obtained by you from SexSearch or through or from SexSearch shall create any warranty not expressly stated in the TAC." Id. at ¶ 15(d). Plaintiff specifically agreed to these Terms and Conditions when registering as a member, and acknowledges they constitute the contract between himself and SexSearch (Complaint ¶¶ 175, 182, 184). Whether he actually read the Terms and Conditions is of no consequence. ABM Farms, Inc. v. Woods, 81 Ohio St.3d 498, 503, 692 N.E.2d 574 (1998) (quoting McAdams v. McAdams, 80 Ohio St. 232, 240-41, 88 N.E. 542 (1909)). Lastly, Plaintiff clearly had the ability to confirm Jane Roe's age when he met with her in person, before they had sex, yet failed to do so. Although Plaintiffs Complaint alleges his reliance was reasonable, "conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." MacDermid v. Discover Fin. Servs., 488 F.3d 721, 733 (6th Cir.2007) (quoting Mezibov v. Allen, 411 F.3d 712, 716 (6th Cir.2005)) (holding plaintiffs conclusory allegation that the application process is "inherently deceptive" is not enough to survive a 12(b)(6) motion). Accordingly, Plaintiff's reliance upon the purported representations was not reasonable as a matter of law in light of the language in the Terms and Conditions, and his fraud claim must be dismissed.
Negligent Infliction of Emotional Distress
The Ohio Supreme Court has recognized the tort of negligent infliction of emotional distress. See Paugh v. Hanks, 6 Ohio St.3d 72, 74, 451 N.E.2d 759 (1983). However, a plaintiff may only bring a claim for negligent infliction of emotional distress where "the plaintiff is cognizant of real physical danger to himself or another." King v. Bogner, 88 Ohio App.3d 564, 569, 624 N.E.2d 364 (Ohio Ct.App.1993) (emphasis added) (citation omitted) (the plaintiff could not maintain a claim for negligent infliction of emotional distress where she was not cognizant of any physical danger resulting from a slanderous statement); Heiner v. Moretuzzo, 73 Ohio St.3d 80, 86-87, 652 N.E.2d 664 (1995) (Ohio courts have limited "recovery for negligent infliction of emotional distress to instances where the plaintiff has either witnessed or experienced a dangerous accident or appreciated the actual physical peril").
Although Plaintiffs arrest and criminal indictment certainly may have caused him emotional distress, he was in no physical peril. Further, in his Complaint, Plaintiff does not allege he was cognizant of any physical danger to himself or others (see Complaint ¶¶ 306-313). Therefore, this is simply not a case in which Plaintiff can recover for negligent infliction of emotional distress. See Wigfall v. Society Nat'l Bank, 107 Ohio App.3d 667, 670, 676, 669 N.E.2d 313 (1995) (where the plaintiff was falsely accused of robbing a bank and was subsequently arrested, fingerprinted, interrogated by FBI agents, and his picture was published in the newspaper and broadcast on television, his negligent infliction of emotional distress claim was denied because the defendant's negligence produced no actual threat of physical harm to him or any other person); see also Reeves v. Fox TV Network, 983 F.Supp. 703, 707, 711 (N.D.Ohio 1997) (plaintiff could not maintain a claim of negligent Infliction of emotional distress resulting from the videotaping and broadcast of his arrest).
*731 Negligent Misrepresentation
Plaintiff next alleges Defendants made a negligent misrepresentation by promising all members were adults (Complaint ¶ 316).
A defendant is liable for negligent misrepresentation if he: (1), supplies false information; (2) for the guidance of others in their business transactions; (3) causing pecuniary loss to the plaintiff; (4) while the plaintiff justifiably relied upon the information; (5) and the defendant failed to exercise reasonable care or competence in obtaining or communicating the information. Delman v. City of Cleveland Heights, 41 Ohio St.3d 1, 4, 534 N.E.2d 835 (1989). Further, this Court has recognized that "[a] core requirement in a claim for negligent misrepresentation is a special relationship under which the defendant supplied information to the plaintiff for the latter's guidance in its business transaction." Ziegler v. Findlay Indus., 464 F.Supp.2d 733, 738 (N.D.Ohio 2006) (quoting Hayes v. Computer Assoc. Inc., No. 03:02 CV 7452, 2003 WL 21478930, 2003 U.S. Dist. LEXIS 10712 (N.D. Ohio June 24, 2003)). "Usually the defendant is a professional (e.g., an accountant) who is in the business of rendering opinions to others for their use in guiding their business, and the plaintiff is a member of a limited class. This `special relationship' does not exist in ordinary business transactions." Id.
The transaction in the instant case is not the type of "special relationship" required to state a claim for negligent misrepresentation. Further, the Complaint does not allege that such a special relationship exists here. Accordingly, Plaintiffs negligent misrepresentation claim must be dismissed.
Breach of Warranty
The only apparent basis for Plaintiffs breach of warranty claim is Ohio Rev.Code § 1302.26, which provides in pertinent part:
(A) Express warranties by the seller are created as follows:
(1) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
This Section clearly states that it applies only to the sale of goods. A membership to SexSearch is a service, not goods, and therefore Plaintiff cannot maintain a claim for breach of warranty under this statute. Brown v. Christopher Inn Co., 45 Ohio App.2d 279, 283, 344 N.E.2d 140 (1975) (Section 1302.26 does not apply where there has been no sale of goods as defined under the Uniform Commercial Code, U.C.C. § 2-105) ("`Goods' means all things . . . which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in action.").
Plaintiff cites Litehouse Products, Inc. v. A.M.I. International Ltd., No. 46834, 1984 WL 4539, at *3 (Ohio Ct.App. Mar. 8, 1984), for the proposition that Section 1302.26 applies to products and services (131.Opp., p. 9). However, that case did not involve services, and nowhere in the opinion did the court mention Section 1302.26 applies to services. Litehouse Products, 1984 WL 4539, at *1, 3. Accordingly, Plaintiffs breach of warranty claim fails.
Violations of the Ohio Consumer Sales Practices Act
Plaintiff alleges numerous violations of the Ohio Consumer Sales Practices Act (OCSPA). Causes of action Six and Seven allege Defendants engaged in deceptive trade practices in violation of Ohio Rev.Code §§ 1345.02(B)(10) and 1345.02(A) by warranting that no member *732 of the SexSearch website was a minor (Complaint ¶¶ 1343, 354). Causes of action Eight through Ten allege Defendants incorporated unconscionable clauses into the Terms and Conditions in violation of Ohio Rev.Code §§ 1345.02(A) and 1345.03, including a clause limiting damages for its breach to the amount of the contract and a clause allowing the supplier to unilaterally cancel the contract after the consumer's three (3) day right to cancel has passed without allowing the consumer the same option (Complaint ¶¶ 358, 362, 366).
Before reaching the merits of these claims, Defendants argue the OCSPA is inapplicable because the sale of a SexSearch membership is not a "consumer transaction" within the meaning of the OCSPA (Def. Mot. to Dismiss, pp. 24-25).
"Whether the parties have engaged in a consumer transaction is a question of law for the court to determine." Riley v. Supervalu Holdings, Inc., No. C-040668, 2005 WL 3557395, *2, 2005 Ohio 6996, at ¶ 10, 2005 Ohio App. LEXIS 6318, at *7 (Ohio Ct.App. Dec. 30, 2005). Under the OCSPA, a consumer transaction is defined as "a sale . . . of goods, a service, . . . or an intangible, to an individual for purposes that are primarily personal, family, or household." Ohio Rev.Code § 1345.01(A). Defendants argue the membership is not a "service" within the meaning of the OCPA because services are defined as the "performance of labor for the benefit of another" (emphasis added). They cite Hoang v. E*Trade Group, 151 Ohio App.3d 363, 372, 784 N.E.2d 151 (2003), in which the court held "the common ordinary meaning of the word `labor' implies work performed with some physical exertion," and "[s]ervices provided electronically do not require any physical exertion and therefore do not require any `labor.'" Id.
However, this position is at odds with common sense. First, the OCSPA is a remedial law which must be liberally construed in favor of the consumer; yet the court in Hoang gives a hyper-technical definition of the word "labor" which, in effect, denies consumers protection with regard to virtually all internet transactions. Einhorn v. Ford Motor Co., 48 Ohio St.3d 27, 29, 548 N.E.2d 933 (1990); Whitaker v. M.T. Auto., Inc., 111 Ohio St.3d 177, 185, 855 N.E.2d 825 (2006). Secondly, courts have specifically found a website membership to be a service. Bosley v. Wildiwett.com, 310 F.Supp.2d 914, 921 (N.D.Ohio 2004). In this case, the service rendered by SexSearch is, among other things, the delivery of communications among members via the internet (see Complaint ¶ 213). Merely because the communications are delivered electronically does not alter the fact that a service has been performed. The only difference here is that the service is performed by computers acting on behalf of actual people. There is no reason why this distinction alone should render Ohio's consumer protection legislation inapplicable to transactions over the internet. Therefore, the sale of a SexSearch membership is a "consumer transaction" within the meaning of the OCSPA.
Deceptive Acts
With regard to the Sixth and Seventh causes of action, when determining whether an act or practice is deceptive, the Court must view the incident from the consumer's standpoint. Chesnut v. Progressive Cas. Ins. Co., 166 Ohio App.3d 299, 307, 850 N.E.2d 751 (2006). "The basic test is one of fairness; the act need not rise to the level of fraud, negligence, or breach of contract." (citation omitted). Id. "A deceptive act has the likelihood of inducing a state of mind in the consumer that is not in accord with the facts.'" (quoting McCullough v. Spitzer Motor Ctr., No. 64465, 1994 WL 24281, at *8 (Ohio Ct.App. Jan. 27, 1994)). Id.
*733 In this case, there was nothing deceptive with regard to the WARNING language on SexSearch that "all persons within this site are 18+." Plaintiff was not an unsuspecting consumer. He was aware the SexSearch membership registration process did not include an age-verification procedure. As noted above, Plaintiff specifically agreed to Terms and Conditions which stated that SexSearch did not guarantee or verify any information provided by users of the website, and nothing outside of the Terms and Conditions creates warranties (Def. Mot. To Dismiss, Ex. A, ¶¶ 17, 15(d)). This WARNING language is not deceptive because the parties contracted that no warranties could be created outside the Terms and Conditions. See, e.g., Rusk Industries v. Alexander, No. L-01-1328, at ¶ 46, 2002 WL 850232, at *7 (Ohio Ct.App. May 3, 2002) ("the Consumer Sales Practices Act was not promulgated as a panacea by which any consumer would be able to avoid unpleasant contractual obligations"). Accordingly, causes of action Six and Seven fail.
Unconscionable Acts
Plaintiff also alleges Defendants committed unconscionable acts in violation of Ohio Rev.Code § 1345.03 because the contract (a) limited damages to the amount of the contract and (b) provided Defendants a unilateral right to cancel the contract (causes of action Eight through Ten).
Ohio Rev.Code § 1345.03 provides:
(A) No supplier shall commit an unconscionable act or practice in connection with a consumer transaction. Such an unconscionable act or practice by a supplier violates this section whether it occurs before, during, or after the transaction
(B) In determining whether an act or practice is unconscionable, the following circumstances shall be taken into consideration:
(5) Whether the supplier required the consumer to enter into a consumer transaction on terms the supplier knew were substantially one-sided in favor of the supplier.
"In order to recover under Section 1345.03, a consumer must show that a supplier acted unconscionably and knowingly." Karst v. Goldberg, 88 Ohio App.3d 413, 418, 623 N.E.2d 1348 (1993). While proof of intent is not required to prove deception under Section 1345.02, proof of knowledge is a requirement to prove an unconscionable act under Section 1345.03. Suttle v. DeCesare, No. 81441, 2003 WL 21291053, at *6 (Ohio Ct.App. June 5, 2003) (citing Karst, 88 Ohio App.3d at 418, 623 N.E.2d 1348). "Knowledge," under Section 1345.01(E), "means actual awareness, but such actual awareness may be inferred where objective manifestations indicate that the individual involved acted with such awareness." Id.
While viewed critically by the courts, limitation of liability clauses may be freely bargained for in Ohio, and "[a]bsent important public policy concerns, unconscionability, or vague and ambiguous terms, [such] provisions will be upheld. . . ." Nahra v. Honeywell, Inc., 892 F.Supp. 962, 969 (1995) (citations omitted) (quoting Collins v. Click Camera & Video, Inc., 86 Ohio App.3d 826, 832, 621 N.E.2d 1294 (Ohio Ct.App.1993)). For example, in Motorists Mut. Ins. Co. v. ADT Sec. Systems, 1995 WL 461316 (Ohio Ct.App. Aug. 4, 1995), where the limitation on damages clause was disproportionate to the actual damages suffered by the plaintiffs, but not disproportionate to the contract price, the court held the contract was not substantially one-sided and unconscionable because the defendants "could reasonably take the position that it could not afford to undertake a potential liability greater than $1,000 in view of the price it was charging for its [alarm] system," which was an annual *734 fee of $1,033, for a period of five years. Id. at *7
The instant action is analogous to Motorists Mut. Ins. Co. Not only is the limitation on damages here the same as the contract price (Def. Mot. to Dismiss, Ex. A, ¶), but given the nature of Defendants' adult dating website (i.e., SexSearch cannot control its member's actions when they meet), the extent of potential liability is unpredictable and potentially astronomical. See Collins, 86 Ohio App.3d at 834-35, 621 N.E.2d 1294. A SexSearch gold membership costs $29.95 per month, and a basic membership is free (Complaint ¶¶¶ 113, 116). In this case, a limitation on damages clause is commercially reasonable to avoid the specter of potential liability which far exceeds the meager price paid, if any, for membership. Collins, 86 Ohio App.3d at 835, 621 N.E.2d 1294; Royal Indem. Co. v. Baker Protective Services, Inc., 33 Ohio App.3d 184, 186, 515 N.E.2d 5 (1986) (citations omitted) ("Ohio courts have held the concept of `freedom of contract' to be fundamental to our society," and "an important function of contract law is to enforce the parties' agreed-upon allocation of risk"). Therefore, the limitation on damages clause here is not substantially one-sided.
With regard to the provision in the contract providing SexSearch a unilateral right to cancel the contract after the consumer's three (3) day right to cancel has passed without allowing the consumer the same option does not render the contract substantially one-sided and unconscionable. In fact, this provision is intended to protect members by allowing SexSearch to monitor and remove members that harass each other, post advertisements, or otherwise violate the Terms and Conditions. Moreover, even if the website cancels the membership, the member will receive a pro-rata refund (Def. Mot. to Dismiss, Ex. A, ¶ 3). Thus, this clause is entirely reasonable and not substantially one-sided. Moreover, Plaintiff provides no legal support for this claim. Plaintiff's Eighth, Ninth, and Tenth causes of action fail and must be dismissed.
Unconscionability
Plaintiff's causes of action Eleven, Twelve, and Thirteen allege common-law claims based on alleged unconscionability of the Terms and Conditions. Specifically, Plaintiff claims (1) the limitation of liability and the disclaimer of warranties were misleading, and he was not provided a meaningful choice with regard to accepting those terms; and (2) the Terms and Conditions provide no guarantee Defendants would or could perform their contractual promises (Complaint ¶¶ 368-389).
Unconscionability is a question of law, and "is generally recognized to include an absence of meaningful choice on the part of one of the parties to a contract, combined with contract terms that are unreasonably favorable to the other party." Collins, 86 Ohio App.3d at 834, 621 N.E.2d 1294; Ins. Co. of N. Am. v. Automatic Sprinkler Corp. of Am., 67 Ohio St.2d 91, 98, 423 N.E.2d 151 (1981). Thus, Ohio's unconscionability doctrine consists of two prongs: (1) procedural unconscionability, and (2) substantive unconscionability. Dorsey v. Contemporary Obstetrics & Gynecology, Inc., 113 Ohio App.3d 75, 80, 680 N.E.2d 240 (Ohio Ct.App.1996). A contract is unconscionable only if it meets both tests. Collins, 86 Ohio App.3d at 834, 621 N.E.2d 1294.
Procedural unconscionability involves factors relating to the "relative bargaining position of the contracting parties, e.g., `age, education, intelligence, business acumen and experience, relative bargaining power, who drafted the contract, whether the terms were explained to the weaker *735 party, whether alterations in the printed terms were possible, and whether there were alternative sources of supply for the goods in question.'" Id. (quoting Johnson v. Mobil Oil Corp., 415 F.Supp. 264, 268 (E.D.Mich.1976))
Here, Plaintiff does not allege lack of education, intelligence, or business experience. Rather, he claims he was not provided any meaningful choice with regard to accepting the Terms and Conditions, and he was not represented by counsel at the time (Complaint ¶¶ 376, 397, 386, 387).
Even assuming Plaintiff could not have bargained with SexSearch to alter the terms, "this inability alone is insufficient to establish procedural unconscionability." Collins, 86 Ohio App.3d at 835, 621 N.E.2d 1294 (citing Richard A. Berjian, D. 0., Inc. v. Ohio Bell Tel. Co., 54 Ohio St.2d 147, 157, 375 N.E.2d 410 (1978)). Further, "there were alternative sources of supply for the goods in question;" specifically, numerous other, adult-dating websites exist, from which Plaintiff could have received the same service if he did not agree with SexSearch's Terms and Conditions.[2]Collins, 86 Ohio App.3d at 834, 621 N.E.2d 1294 (citation omitted). Thus, the fact that Plaintiff "was not provided any meaningful choice" regarding the wording of the Terms and Conditions did not constitute procedural unconscionability here.
Moreover, although the Court should consider whether Plaintiff was represented by counsel at the time the contract was executed, the crucial question is whether "each party to the contract . . . [had] a reasonable opportunity to understand the terms of the contract, or were the important terms hidden in a maze of fine print?" Post v. ProCare Automotive Serv. Solutions, No. 87646, 2007 WL 1290091, at *4 (Ohio Ct.App. May 3, 2007) (citations omitted); Collins, 86 Ohio App.3d at 835, 621 N.E.2d 1294 (the court should consider whether the terms were explained, or otherwise brought to Plaintiffs attention). Here, Plaintiff had an adequate opportunity to read the Terms and Conditions, and there is no allegation that a time limitation was placed on Plaintiffs opportunity to read them. Therefore, the fact Plaintiff was not represented by counsel does not create procedural, unconscionability in this case. Anderson v. Delta Funding Corp., 316 F.Supp.2d 554, 565 (N.D.Ohio 2004).
Additionally, the limitation of liability and the disclaimer of warranties were not hidden from Plaintiff or in fine print, but were sufficiently conspicuous. See Hubbert v. Dell Corp., 359 Ill.App.3d 976, 987, 296 Ill.Dec. 258, 835 N.E.2d 113 (Ill.Ct. App.2005) (terms in a clickwrap agreement were sufficiently conspicuous where the website had hyperlinks for the Terms and Conditions in contrasting blue colors, the clauses in question were partially in capital letters, and the beginning of the terms were in bold, capital letters); Anderson, 316 F.Supp.2d at 565 (holding no unconscionability where the language was not particularly complex and the terms were not typed in abnormally fine print). Here, the terms are highlighted in bold, capital letters and with hyperlinks to highlight some of the more important terms (Def. Mot. to Dismiss, ¶¶ 12, 15). Therefore, there was no procedural unconscionability in the execution of the contract in this case.
The second element of unconscionability is substantive unconscionability. "Substantive unconscionability involves those factors which relate to the contract terms themselves and whether they are commercially reasonable." Collins, *736 86 Ohio App.3d at 834, 621 N.E.2d 1294. "Because the determination of commercial reasonableness varies with the content of the contract terms at issue in any given case, no generally accepted list of factors has been developed for this category of unconscionability." Id.
For the reasons discussed above, the limitation of liability clause was commercially reasonable based on the small contract price and the extent and unpredictability of future liability. Thus, the limitation of liability clause is not substantively unconscionable. With regard to the disclaimer of warranties (and although Defendants provided no support why the disclaimer of warranties is commercially reasonable), because the Court does not find procedural unconscionability, it is unnecessary for the Court to address the issue of substantive unconscionability. Ball v. Ohio State Home Servs., Inc., 168 Ohio App.3d 622, 629, 861 N.E.2d 553 (2006). Accordingly, Plaintiffs Twelfth and Thirteenth causes of action fail to state a claim for unconscionability and must be dismissed.
Lastly, Plaintiff's Eleventh cause of action alleges the Terms and Conditions provide no guarantee Defendants would or could perform their contractual promises, and therefore, the terms are unconscionable (Complaint ¶ 370). This claim is wholly without merit.
It is axiomatic that a contract is "a promise or a set of promises for the breach of which the law gives a remedy." Rasnick v. Tubbs, 126 Ohio App.3d 431, 434, 710 N.E.2d 750 (Ohio Ct.App.1998) (emphasis added) (citation omitted). In order for a contract to be binding, there must be a "manifestation of mutual assent," which requires that each party "either make a promise or begin or render a performance" (citation omitted). Id.; Westfield Ins. Co. v. HULS Am., Inc., 128 Ohio App.3d 270, 291, 714 N.E.2d 934 (1998). Thus, a contract is nothing other than a party's promise to perform its agreed upon obligations, and nowhere does the law require a party to guarantee it will perform its contractual obligations. If the Court were to hold a contract unconscionable merely because one of the parties did not guarantee it would perform as promised, the Court would implicitly be adding an additional requirement to the formation of a contract; i.e., one which requires the parties to guarantee performance. The Court declines to change the time-tested rule that a contract is a promise, not a guarantee. Accordingly, Plaintiffs Eleventh cause of action fails to state a claim upon which relief may be granted, and therefore must be dismissed
Failure to Warn
Plaintiffs final cause of action alleges Defendants failed to warn Plaintiff that a minor may be a member of SexSearch (Complaint ¶ 393).
A failure to warn claim consists of the following elements: (1) there was a duty to warn, (2) that duty was breached, and (3) injury proximately resulted from the breach. See Freas v. Prater Constr. Corp., 60 Ohio St.3d 6, 8-9, 573 N.E.2d 27 (1991). However, where the danger is open and obvious, there is no duty to warn of the danger. Livengood v. ABS Contrs. Supply, 126 Ohio App.3d 464, 466, 710 N.E.2d 770 (Ohio Ct.App.1998). "Where only one conclusion can be drawn from the established facts, the issue of whether a risk was open and obvious may be decided by the court as a matter of law." Klauss v. Glassman, No. 84799, 2005 WL 678984, at *3 (Ohio Ct.App. Mar. 24, 2005) (citations omitted).
In the instant action, Defendants had no duty to warn Plaintiff because the danger here was open and obvious. It is common knowledge that "young children all over America use the Internet." U.S. v. Rice, 61 Fed.Appx. 14, 19 (4th Cir.2003). Moreover, *737 given the "anonymity of the Internet," the danger that a minor might enter an adult-only website was open and obvious, as persons wishing to gain access merely had to click a box stating they were above 18 years of age. See, e.g., U.S. v. Mitchell 353 F.3d 552, 553 (7th Cir.2003) ("[t]he Internet has opened the doors for many to transact business and personal affairs with almost complete anonymity"). Defendants had no duty to warn Plaintiff that an anonymous internet poster might post false content, as internet anonymity is an open and obvious danger. See, e.g., Gawloski v. Miller Brewing Co., 96 Ohio App.3d 160, 163, 644 N.E.2d 731 (1994) ("brewers and distributors of alcoholic beverages do not have a duty to warn consumers of the dangers inherent in the excessive or prolonged use of alcohol because those dangers are within the body of knowledge common to the community"). Further, even if Defendants were under a duty to warn, the Terms and Conditions contain the following warning: "We cannot guarantee, and assume no responsibility for verifying, the accuracy of the information provided by other users of the Service" (Def. Mot. to Dismiss, Ex. A, ¶ 17). Thus, even if Defendants had a duty to warn Plaintiff, they satisfied this duty by including a warning in the Terms and Conditions. Accordingly, Plaintiff's failure-to-warn claim fails as a matter of law.
CONCLUSION
Plaintiff employed a double-barreled shotgun approach in this case, but failed to hit a claim upon which relief may be granted. Accordingly, Defendants' Motion to Dismiss (Doc. No. 123) is granted, and Plaintiff's Motion to Strike (Doc. No. 149) is denied.
IT IS SO ORDERED.
NOTES
[1] "Clickwrap" agreements are different than "browsewrap" agreements. A "browsewrap" agreement "allow[s] the user to view the terms of the agreement, but do[es] not require the user to take any affirmative action before the Web site performs its end of the contract." James J. Tracy, Case Note, Legal Up-date: Browsewrap Agreements: Register.com, Inc. v. Verio, Inc., 11 B.U.J. SCI. & TECH. L 164, 164-65 (2005).
[2] As noted above, the Court takes judicial notice of the existence of numerous other adult-dating websites. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511449/ | 150 N.J. 395 (1997)
696 A.2d 619
BERTHA BROOKS AND JOHN L. BROOKS, HER HUSBAND, PLAINTIFFS-RESPONDENTS,
v.
WILLIE MAE ODOM AND NEW JERSEY TRANSIT BUS OPERATIONS, INC., DEFENDANTS-APPELLANTS, AND PORT AUTHORITY OF NEW YORK AND NEW JERSEY, DEFENDANT.
The Supreme Court of New Jersey.
Argued April 28, 1997.
Decided July 15, 1997.
*397 Jeffrey A. Miller, Assistant Attorney General argued the cause for appellants (Peter Verniero Attorney General of New Jersey, attorney; Mary C. Jacobson, Deputy Attorney General, of counsel; Valerie L. Egar, Deputy Attorney General, on the brief).
Eric G. Kahn argued the cause for respondents (Javerbaum Wurgaft & Hicks, attorneys).
The opinion of the Court was delivered by POLLOCK, J.
This appeal presents two issues. The first issue is what constitutes a "permanent loss of a bodily function" under the New Jersey Tort Claims Act ("The Act" or "The Tort Claims Act"), N.J.S.A. 59:9-2(d). Second, we must decide whether plaintiff, Bertha Brooks ("plaintiff"), may recover from defendants Willie Mae Odom and New Jersey Transit Corporation ("New Jersey Transit") (jointly described as "defendants") her co-payments and deductible amounts under her health insurance policy.
*398 The Law Division granted summary judgment for defendants. It held that plaintiff's injuries did not constitute a permanent loss of a bodily function and that plaintiff could not recover her out-of-pocket medical expenses. In an unreported opinion, the Appellate Division reversed. We granted defendants' petition for certification, 147 N.J. 260, 686 A.2d 762 (1996). We reverse the judgment of the Appellate Division, and reinstate that of the Law Division.
I.
This matter arises on defendants' motion for summary judgment. Consequently, we assume the truth of plaintiff's version of the facts, giving plaintiff the benefit of all favorable inferences that version supports. Brill v. Guardian Life Ins. Co. of America, 142 N.J. 520, 523, 666 A.2d 146 (1995); Dairy Stores, Inc. v. Sentinel Publishing Co., 104 N.J. 125, 135, 516 A.2d 220 (1986). On November 18, 1991, plaintiff's car was parked on Clinton Place, Newark. As plaintiff entered her car, a New Jersey Transit bus driven by Odom struck the car door, knocking plaintiff into the car. An ambulance drove plaintiff to the emergency room at Newark Beth Israel Hospital, where she complained of pain in her neck, back, and head. The hospital took X-rays (all of which were normal except for "degenerative changes at C5-C6"), prescribed medication, fitted plaintiff with a cervical collar, and released her.
Plaintiff next consulted Dr. Jack Siegel. After Dr. Siegel administered twelve heat treatments to plaintiff's back, she stopped seeing him because the treatments were ineffective. On July 8, she consulted Dr. Anthony Keiser.
In August 1992, plaintiff started treatment with Sall/Myers Associates at their Irvington office. She complained of headaches, dizziness, blurred vision, pain and stiffness in her neck, upper and lower back, pain radiating in her left shoulder, and increased discomfort on a change in the weather. Dr. Myers's examination of her neck and back revealed mild flattening of the curve, tenderness and hardness, and decreased motion. He diagnosed *399 plaintiff's condition as "residual of post-traumatic myositis and fibromyositis of the cervicodorsal and lumbosacral region and post-traumatic headache syndrome." Myositis is the "inflammation of muscle tissue." Clayton L. Thomas, ed., Taber's Cyclopedic Medical Dictionary 1091 (15th ed. 1985). Fibromyositis is "characterized by pain, tenderness, and stiffness of joints, capsules, and adjacent structures." Id. at 618.
Dr. Myers treated plaintiff with physical therapy and a TENS (transcutaneous electrical nerve stimulation) unit, which applies mild electrical stimulation to an affected area. X-rays revealed small marginal spurs in the upper lumbar vertebra and disc space narrowing at C5-C6 and C6-C7, with reversal of curvature of the spine.
Dr. Peter M. Crain, a neurologist and psychiatrist, diagnosed plaintiff as suffering from post-traumatic headaches. An electro-myogram ("EMG") reflected elevations in activity in the muscles on both sides of the face and neck with significant elevations at the T1 (thoracic) paraspinal sites.
Notwithstanding several months of therapy, plaintiff's neck and back pain continued. On December 10, 1992, Dr. Myers performed thermograms on her neck and back. The lumbar thermogram revealed L4 and L5 fiber irritation and pelvic lean. The cervical and thoracic thermogram was "[a]bnormal with thermographic diagnoses of bilateral cervical and thoracic trapezius myositis with trigger point formation, myositis of the sternal muscles, costochondritis and trigger point formation in the right anterior deltoid and right pectoralis." A CAT scan was normal.
In his final report, dated February 2, 1993, Dr. Myers noted residual complaints of recurring discomfort in plaintiff's neck, upper, mid and lower back, as well as occasional headaches. Her physical examination revealed straightening of the cervical curve; diffuse tenderness in the posterior cervical area evidenced by muscle spasms; spasm of the posterior and lateral cervical musculature; and a decreased range of motion on flexion and rotation. The examination of her dorsal spine revealed paravertebral *400 spasms with tenderness in the trapezoid muscles, and a decreased range of motion of flexion. In plaintiff's lower lumbar area, Dr. Myers detected a palpable muscle spasm and a decreased range of motion.
Dr. Myers's discharge diagnosis was residuals of post-traumatic headaches, residuals of flexion/extension injury of the cervical dorsal and lumbar spine with post-traumatic myositis and fibro-myositis. He concluded that there was a direct causal relationship between plaintiff's condition and the accident. His objective findings were hardness, spasm, and tenderness with secondary scar tissue formation. Dr. Myers concluded that plaintiff had sustained a significant and permanent loss of function with chronic pain that was exacerbated by the usual activities of daily living. He further concluded that plaintiff's overall prognosis for significant improvement was poor.
After the accident, plaintiff missed eight days of work and stayed at home for two weeks. She has since returned to work as a teacher's aide, but claims she cannot sit or stand for long without experiencing pain. She still suffers from headaches, dizziness, and severe lower back pain that radiates into her left leg. Finally, she has difficulty in performing household chores, including vacuuming, carrying groceries, or other activities that require lifting or bending. Plaintiff seeks recovery for her pain and suffering. Her husband, John Brooks, asserts a derivative claim for loss of her services.
II.
The initial issue is whether plaintiff has suffered a "permanent loss of a bodily function" within the meaning of N.J.S.A. 59:9-2(d). That statute provides in relevant part:
No damages shall be awarded against a public entity or public employee for pain and suffering resulting from any injury; provided, however, that this limitation on the recovery of damages for pain and suffering shall not apply in cases of permanent loss of a bodily function.
[N.J.S.A. 59:9-2(d).]
*401 Although plaintiff originally joined the Port Authority of New York and New Jersey as a defendant, she has never served it with a summons and complaint. The Law Division granted defendants' motion for summary judgment, concluding that the Act imposes a stricter threshold than the verbal threshold in the No-Fault Law, N.J.S.A. 39:6A-1 to -35. The court reasoned that even under the No-Fault Act, plaintiff could not recover. Finally, the court ruled that plaintiff could not recover her deductible or co-payment expenses.
The Appellate Division reversed. It found that evidence of muscle spasm, loss of spinal curvature, and marginal spurs constituted objective evidence of plaintiff's injury. Significantly, the court further found that the evidence established that plaintiff's injuries were permanent. The court noted that plaintiff was "unable to sit or stand for long periods of time without experiencing pain," and that she encountered continuing difficulty in "performing [her] daily household chores, including vacuuming, carrying groceries and anything which requires lifting or bending." It also ruled that plaintiff could recover her deductible and co-payment amounts.
This appeal raises an issue of statutory interpretation. When construing a statute, the judicial role is to give effect to the legislative intent. State v. Madden, 61 N.J. 377, 389, 294 A.2d 609 (1972). Sometimes, a court need look no further than the statutory language. Munoz v. New Jersey Automobile Full Ins. Underwriting Ass'n, 145 N.J. 377, 384, 678 A.2d 1051 (1996). When, however, the statutory language is ambiguous, a court generally turns to the legislative history, statutory purpose, and related legislation. MCG Assocs. v. DEP, 278 N.J. Super. 108, 119-20, 650 A.2d 797 (App.Div. 1994) (citations omitted). Even with the help of canons of statutory construction, legislative intent can be elusive.
On this appeal, our task is to ascertain the legislative intent in the provision in N.J.S.A. 59:9-2(d) against recovery for pain and suffering except "in cases of permanent loss of a bodily function." We read the provision in the light of the general legislative intent *402 in the Act to establish immunity as the general rule and to subject a public entity for liability only as the Act provides. N.J.S.A. 59:2-1.
The Act does not define the terms "permanent," "loss," "bodily," or "function." In the absence of statutory definitions, dictionaries can shed light on the presumed intent of the legislature. "Function" means "[t]he action performed by any structure. In a living organism this may pertain to a cell or part of a cell, tissue, organ or system of organs." Taber's, supra, at 651. "Loss" means "the act of losing possession" and the "decrease in amount, magnitude or degree." Webster's New Collegiate Dictionary 675 (1987). Finally, "bodily" is defined as "pertaining to or concerning the body; of or belonging to the physical constitution." Black's Law Dictionary 159 (5th ed. 1991). Those definitions, although helpful, are not dispositive.
Hence, we turn to the Act's history and purpose. The purpose of the Act was to reestablish the general rule of the immunity of public entities from liability for injuries to others. Pane, New Jersey Practice, Local Government Law § 589 at 17 (stating Act's purpose was to stabilize constant erosion of sovereign immunity by judicial decisions). Underlying the reenactment of immunity was the Legislature's concern about that liability on the public coffers. Report of the Attorney General's Task Force on Sovereign Immunity 10 (1972) ("Task Force").
As the Task Force stated:
The limitation on the recovery of damages in subparagraph (d) reflects the policy judgment that in view of the economic burdens presently facing public entities a claimant should not be reimbursed for non-objective types of damages, such as pain and suffering, except in aggravated circumstances.
[Comment, N.J.S.A. 59:9-2.]
Both the history and purpose of the Act suggest that the Legislature intended a chary interpretation of a public entity's exposure to liability.
To recover under the Act for pain and suffering, a plaintiff must prove by objective medical evidence that the injury is *403 permanent. Temporary injuries, no matter how painful and debilitating, are not recoverable. Further, a plaintiff may not recover under the Tort Claims Act for mere "subjective feelings of discomfort." Ayers v. Township of Jackson, 106 N.J. 557, 571, 525 A.2d 287 (1987). Judicial and secondary authority interpreting the phrase "permanent loss of a bodily function" is scant. One recognized text states "[t]o be considered permanent within the meaning of the subsection, an injury must constitute an `objective' impairment, such as a fracture." Harry A. Margolis & Robert Novack, Claims Against Public Entities 159 (1996). Absent such an objective abnormality, a claim for permanent injury consisting of "impairment of plaintiff's health and ability to participate in activities" merely iterates a claim for pain and suffering. Ibid.
According to the Appellate Division, a claim for emotional distress is recoverable if it results "in permanent physical sequelae such as disabling tremors, paralysis or loss of eyesight." Srebnik v. State, 245 N.J. Super. 344, 351, 585 A.2d 950 (App.Div. 1991). Consistent with Srebnik, one part of the Appellate Division found that a chronic lumbo-sacral sprain with a fifteen percent permanent disability did not constitute sufficient objective evidence to survive the defendants' motion for summary judgment. Thorpe v. Cohen, 258 N.J. Super. 523, 610 A.2d 878 (App.Div. 1992). By comparison, another part has ruled that a plaintiff could survive a motion for summary judgment when her complaints included total loss of taste and smell, as well as constant headaches, daily dizziness, acute pain in her skull, facial twitching, an inability to eat hard foods, ringing in her ears, and the inability to bend or walk for longer than twenty minutes. Mack v. Passaic Valley Water Comm'n, 294 N.J. Super. 592, 684 A.2d 77 (App.Div. 1996). As those cases indicate, permanent loss of eyesight, taste and smell satisfy the statutory standard.
In concluding plaintiff has sustained a permanent loss of a bodily function under the Tort Claims Act, the Appellate Division in the present case relied on decisions interpreting the No-Fault Act. In some respects the threshold issue in actions against public *404 entities is similar to the verbal-threshold issue in no-fault cases. Thorpe, supra, 258 N.J. Super. at 526, 610 A.2d 878. Under both statutes, a plaintiff must adduce objective evidence of claimed injuries. Oswin v. Shaw, 129 N.J. 290, 314, 609 A.2d 415 (1992) (stating under No-Fault Act plaintiff must show "material disputed fact by credible objective medical evidence"); Mack, supra, 294 N.J. Super. at 598, 684 A.2d 77 (stating in Tort Claims Act case "the critical question is whether plaintiff has presented objective and credible medical evidence if believed by a factfinder, of a permanent loss of bodily function").
The substantive standards in the two statutes, however, differ. The Tort Claims Act limits recovery for pain and suffering to incidents in which the plaintiff has sustained either "[(1)] permanent loss of a bodily function; [(2)] permanent disfigurement; or [(3)] dismemberment." N.J.S.A. 59:9-2(d).
By comparison, the No-Fault Act permits recovery in cases involving:
[(1)] death;
[(2)] dismemberment;
[(3)] significant disfigurement;
[(4)] a fracture;
[(5)] loss of a fetus;
[(6)] permanent loss of the use of a body organ, member, function or system;
[(7)] permanent consequential limitation of use of a body organ or member;
[(8)] significant limitation or use of a body function or system; or
[(9)] a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute that person's usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury or impairment.
[N.J.S.A. 39:6A-8(a).]
Thus, the No-Fault Act contains nine categories or standards under which a plaintiff may seek recovery. Generally speaking, the categories start with more serious injuries and proceed to less serious ones. Under the relevant section of the Tort Claims Act, in contrast, a plaintiff may recover only if he or she suffers a "permanent loss of a bodily function." The most comparable *405 standard in the No-Fault Act is "permanent loss of the use of a body organ, member, function or system" (category six), a standard that requires more serious injuries than do categories seven, eight and nine.
Under the No-Fault Act, moreover, a plaintiff may merge the requirements of one category into another. See, e.g., Jefferson v. Freeman, 296 N.J. Super. 54, 60-61, 685 A.2d 1357 (App.Div. 1996) (examining whether plaintiff's injuries fit into verbal threshold categories seven, eight or nine); Pickett v. Bevaqua, 273 N.J. Super. 1, 3, 640 A.2d 1173 (App.Div. 1994) (examining whether plaintiff's injuries fit into verbal threshold categories eight or nine); Polk v. Daconceicao, 268 N.J. Super. 568, 570, 634 A.2d 135 (App.Div. 1993) (examining whether plaintiff's injuries fit into verbal threshold categories six, seven or eight); Phillips v. Phillips, 267 N.J. Super. 305, 308, 631 A.2d 564 (App.Div. 1993) (examining whether plaintiff's injuries fit into verbal threshold categories six, seven or eight); Dabal v. Sodora, 260 N.J. Super. 397, 400, 616 A.2d 1297 (App.Div. 1992) (examining whether plaintiff's injuries fit into verbal threshold categories six, seven or eight); Levine v. Miller, 272 N.J. Super. 512, 515, 517, 640 A.2d 363 (Law Div. 1993) (examining whether plaintiff's injuries fit into verbal threshold categories four or six).
We cannot find any reported case, and counsel has not cited any, considering recovery under category six alone. Apparently, plaintiffs seeking to recover under category six also seek recovery under other categories. See Siriotis v. Gramuglia, 254 N.J. Super. 223, 231, 603 A.2d 154 (Law Div. 1991) (referring in case asserting claims under categories six, seven and eight to "the lack of case law interpreting a Type 6 injury in New Jersey"). In effect, a plaintiff seeking to recover under the No-Fault Act may recover not only for "a permanent loss of the use of a body organ, member, function or system" (category six), but also for the "permanent consequential limitation of use" of any such organ or member (category seven), or the "significant limitation or use of a body function or system" (category eight). Under the No-Fault Act, therefore, a claimant may recover for a permanent injury that *406 merely imposes a limitation on the use of his or her back. The No-Fault Act manifests legislative recognition that something less than a "permanent loss of the use of a body organ, member, function or system" would satisfy the verbal threshold.
In the Tort Claims Act, however, the Legislature did not modify the requirement of a "permanent loss of a bodily function" by stating that a mere limitation on a bodily function would suffice. Although the legislative intent in the Tort Claims Act is not completely clear, we believe that the Legislature intended that a plaintiff must sustain a permanent loss of the use of a bodily function that is substantial. A total permanent loss of use would qualify. We doubt, however, that the Legislature intended that a claimant could recover only for losses that were total. As the Workers' Compensation Act demonstrates, the Legislature is aware of the distinction between permanent injuries that are total and those that are partial. N.J.S.A. 34:15-12(b) & (c). In the Tort Claims Act, however, the Legislature did not specify that the right to recover was limited to injuries that were total. We conclude that under that Act plaintiffs may recover if they sustain a loss that is substantial.
In reviewing the sufficiency of plaintiff's case, we accept that she experiences pain and that the limitation of motion in her neck and back is permanent. Still, she can function both in her employment and as a homemaker. In brief, she has not sustained "a permanent loss of a bodily function" within the meaning of N.J.S.A. 59:9-2(d).
III.
The remaining issue is whether plaintiff may recover from defendants her out-of-pocket expenses for co-payments and deductibles under her Personal Injury Protection ("PIP") coverage. The Law Division denied recovery, but the Appellate Division reversed. Under the No-Fault statute, a plaintiff may not recover such out-of-pocket expenses. Roig v. Kelsey, 135 N.J. 500, 641 A.2d 248 (1994). The underlying policy consideration is that allowing recovery for such claims would clog the court system with *407 minor claims for reimbursement. Id. at 514, 641 A.2d 248. The same consideration applies to suits against public entities under the Act. We reach this conclusion notwithstanding the comment in the Task Force Report favoring reimbursement of claimants for full net economic losses. Task Force, supra, at 16. Given the general legislative intent in the Act to immunize public entities from liability, it would be contradictory to allow a plaintiff to recover against a public entity when he or she could not recover against a private party. We do not reach the question whether uninsured claimants who may not recover for pain and suffering under N.J.S.A. 59:9-2(d) may nonetheless recover the cost of their medical expenses.
The judgment of the Appellate Division is reversed, and the judgment of the Law Division dismissing the complaint is reinstated.
For reversal and reinstatement Chief Justice PORITZ, and Justices HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN and COLEMAN 7.
Opposed None. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511652/ | 595 S.W.2d 873 (1980)
In re B. B. F. a Minor Child, Appellant.
No. 16341.
Court of Civil Appeals of Texas, San Antonio.
February 6, 1980.
*874 Rudolph Georges, Hope, Henderson, Hohman & Georges, San Antonio, for appellant.
Jesse B. Campos, Hernandez & Campos, San Antonio, for appellee.
OPINION
MURRAY, Justice,
On March 29, 1979, appellant, natural mother of a minor child, executed an Affidavit of Relinquishment of Parental Rights. The affidavit contained a waiver of the right to service of process in any suit to terminate the parent-child relationship. Later, that same day, the appellees filed an original petition praying for termination of the rights of the natural parents of the child and for adoption of the child. Thereafter without notice to appellant, a decree was signed by the trial court terminating the parent-child relationship between appellant and her natural son. From this decree, an appeal by writ of error has been perfected.
Appellant initially contends that the trial court erred in rendering the decree of termination because the waiver of citation was void since it was executed prior to the filing of suit. We disagree with this contention.
Generally, a waiver of the issuance and service of process is proper only if executed after suit is brought. See Tex. Rev.Civ.Stat.Ann. art. 2224 (Vernon 1971); Tex.R.Civ.P. 119. Section 15.02 of the Texas Family Code provides that a court may grant a petition requesting termination of the parent-child relationship if the parent has "executed before or after the suit is filed an unrevoked or irrevocable affidavit of relinquishment of parental rights as provided by Section 15.03 of this code ...." Tex.Fam.Code Ann. § 15.02(1)(K) (Vernon Supp. 1980). Section 15.03 provides in pertinent part that this affidavit may include "a waiver of process in a suit to terminate the parent-child relationship brought under Section 15.02(1)(K) ...." Id. § 15.03(c)(2). Since execution of an affidavit of relinquishment of parental rights is a proper basis for terminating those rights in a subsequent suit to terminate the parent-child relationship, and a waiver of process may be included in the affidavit, it is clear that a waiver of citation may be signed prior to the filing of suit. Thus, the Family Code provides an exception to the general rule that a waiver of citation is proper only if executed after suit is brought. See Smith, The Texas Family Code Symposium Parent and Child, 5 Tex.Tech.L.Rev. 389, 443 (1974). There is a sound reason for this exception. After executing an unrevoked or irrevocable affidavit of relinquishment of parental rights, a natural parent is no longer an interested party in a suit to terminate the parent-child relationship. Consequently, neither due process nor logic require that a person who has voluntarily relinquished parental rights and waived service of citation be given notice of a subsequent suit to terminate the parent-child relationship.[1]
By her second point of error appellant contends that the affidavit of relinquishment is fatally defective because it did not affirmatively show the credibility of the *875 attesting witnesses. We overrule this point of error.
There is no requirement in Section 15.03 or anywhere else that an affidavit of relinquishment affirmatively show the credibility of the attesting witnesses. Moreover, an affidavit of relinquishment of parental rights, in proper form, is prima facie evidence of its validity. Cf. Gasaway v. Nesmith, 548 S.W.2d 457, 458 (Tex.Civ.App. Houston [1st Dist.] 1977, writ ref'd n.r.e.) (self-proving affidavit in proper form is prima facie evidence of validity of will). Thus, it is not necessary for a proponent of an affidavit to offer direct testimony that the attesting witnesses are credible. We hold that the affidavit of relinquishment met the requirements of Section 15.03.
For the above-stated reasons the judgment of the trial court is affirmed.
NOTES
[1] Statutes providing for waiver of notice prior to the filing of suit have been upheld despite arguments that they violate the due process clause of the fourteenth amendment. See D. H. Overmyer Co. v. Frick Co., 405 U.S. 174, 183-87, 92 S. Ct. 775, 781-83, 31 L. Ed. 2d 124 (1972); Myers v. Patton, 543 S.W.2d 22, 25 (Tex.Civ. App.Texarkana 1976, no writ). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511656/ | 595 S.W.2d 193 (1980)
Anthony G. RIDDLESPERGER et al., Appellants,
v.
CRESLENN RANCH COMPANY et al., Appellees.
No. 1295.
Court of Civil Appeals of Texas, Tyler.
February 7, 1980.
Rehearing Denied March 14, 1980.
*194 Willis D. Moore, Moore, Bateman & George, Athens, Stephen E. Stein, Dallas, Fred A. Lange, Houston, for appellants.
Fred N. Diem, Kilgore & Kilgore, Dallas, Guy L. Nevill, James W. McCartney, Ben H. Rice, III, Vinson & Elkins, Houston, for appellees.
MOORE, Justice.
This is an appeal from a summary judgment. Appellant, Anthony G. Riddlesperger and others similarly situated, instituted this declaratory judgment action against appellees, Creslenn Ranch Company and the Dow Chemical Company, seeking a judgment declaring appellants to be the owners of the coal and lignite in and under a 261. 75-acre tract of land situated in Henderson County, Texas. Appellants alleged that they acquired title to the coal and lignite under the terms of a 1958 deed in which their predecessors in title made the following mineral reservation:
... all of the oil, gas, uranium, and other minerals and gravel in, on and under said land, together with full rights of ingress and egress to, from and over said land, or any part thereof, for the purpose of exploring for mining, producing, developing or removing any or all of said minerals on, under or from any part of said land ...
Appellants contend that even though the reservation did not specifically mention coal and lignite, those substances are minerals and are therefore reserved to their predecessors in title under the clause "other minerals." Appellees, Creslenn Ranch Company, the owner of the surface estate, and its coal and lignite lessee, Dow Chemical Company, answered with a general denial. Thereafter, appellants Riddlesperger and others filed a motion for summary judgment under Rule 166-A of the Texas Rules of Civil Procedure, alleging that under the reservation in the deed they should be held to own the title to the coal and lignite as a matter of law. Appellees also filed a motion for summary judgment, alleging that the reservation in the 1958 deed should not be construed to include the coal and lignite. They contended that the parties did not contemplate the destruction of the surface estate and therefore title to the coal and lignite remains in the appellees' predecessor in title, because the undisputed summary judgment proof showed that (1) the coal and lignite were not specifically reserved; (2) the minerals were so near the surface of the land that they could only be produced or recovered by strip mining; and (3) there was nothing in the 1958 deed indicating that the parties intended that the grantor could extract the coal and lignite by strip-mining methods. Relying on the decision in Acker v. Guinn, 464 S.W.2d 348 (Tex.1971) and Reed v. Wylie, 554 S.W.2d 169 (Tex. 1977), appellee Creslenn Ranch, the present owner of the surface estate, and its coal and lignite lessee, Dow Chemical, contended that they should be declared the owners of the coal and lignite. After a hearing, the trial court denied appellants' motion for summary judgment and entered a summary judgment in favor of appellees, Creslenn Ranch and Dow Chemical Company, thereby declaring Creslenn Ranch and Dow Chemical to be the fee simple owners of the coal and lignite on and under the 261.75-acre tract in question. Appellants, Anthony *195 G. Riddlesperger and others, the mineral estate owners, perfected this appeal.
We affirm.
It is conceded by both parties that there is no genuine issue as to any material fact. In addition to the facts herein above delineated, the undisputed summary judgment proof shows that on December 11, 1958, Mary Flagg and Pearl Gentry conveyed the 261.75-acre tract in question to T. H. Shipp by a warranty deed. The deed reserved to Mrs. Flagg and Mrs. Gentry the above described mineral estate. Thereafter appellants acquired the reserved mineral interest held by Mrs. Flagg and Mrs. Gentry; appellee, Creslenn Ranch Company, subsequently acquired the surface estate interest held by Mr. Shipp. When Creslenn Ranch Company later executed a coal and lignite lease to the Dow Chemical Company, appellants filed this suit.
The location of the coal and lignite under the 261.75-acre tract in question is not in dispute. The affidavit testimony of Winston M. Sahinen, a registered mining engineer, shows that extensive core testing was done to locate the depth and a real extent of the lignite. It was found to be located in two seams or layers at a depth ranging from twenty feet to fifty-eight feet below the surface of the land. The seams are separated by an interval of approximately three to six feet. The thickness of the lignite in these seams vary from five to ten feet. Consequently, the summary judgment proof establishes that at least part of the lignite is so near the surface that it cannot be removed without destroying a substantial part of the surface estate. Sahinen further testified that sixty percent of the lignite underlying the land in question is directly overlain by loose sand and gravel. The remaining lignite is directly overlain by marginally suitable roof material in the form of dark gray claystone. Only the lignite overlain by the claystone is capable of being mined by underground mining methods. In 1958, such a method of mining in that area would recover only thirty-four percent of the lignite. However, an operator who chose to surface mine the same area would recover eighty-five percent of the lignite. In the entire area, an operator, who in 1958, surface mined this property would recover eighty-five percent of the lignite. In comparison, an operator who elected to conduct underground mining operations in 1958 could do so only in the area containing marginally suitable roof material and would recover only fourteen percent of the total lignite underlying the land in question. Consequently, in 1958, seventy-one percent of the lignite underlying this tract could only have been recovered by surface mining.
Appellants assert under their first point of error that the trial court erred in denying their motion for summary judgment and in granting appellees' motion for summary judgment, because there were no facts at issue and the inclusion of "gravel" and "uranium" as reserved substances in the 1958 deed "affirmatively and fairly expressed" the intention of the parties that the utility of the surface for agricultural or grazing purposes would be destroyed or substantially impaired by the removal of the reserved substances. Appellants say that it is common knowledge that gravel is mined by surface-mining methods and the summary judgment proof shows that uranium is also mined by the same method. Hence, they argue that since gravel and uranium are substances that must be mined by methods that will destroy the surface, the deed affirmatively shows that the parties intended that the surface estate could be destroyed by the removal of all reserved substances, including coal and lignite. Therefore they contend that they own the title to the coal and lignite. Under the ruling made by our supreme court in Acker v. Guinn and Reed v. Wiley, we have concluded that appellants' contention is without merit and must therefore be overruled.
Although coal and lignite were not specifically reserved in the 1958 deed, it is generally recognized that such substances are minerals. In the instant case, coal and lignite would ordinarily be reserved to the mineral interest owners by virtue of the language contained in the reservation reserving *196 "other minerals." Reed v. Wylie, supra, at 172. The question is whether the parties, at the time of the execution of the 1958 deed containing the reservation of "other minerals," intended to include mineral substances lying so near the surface that the extraction thereof would result in a destruction of the surface estate.
In Acker v. Guinn, the question was whether an interest in iron ore passed to the grantees in a 1941 deed which conveyed "an undivided ½ interest in and to all of the oil, gas and other minerals in and under, and that may be produced from" a certain tract of land. The iron ore deposits in the area ranged in depth from outcroping on the surface to as much as fifty feet below surface, and its extraction would have resulted in the destruction of the surface estate. The court, after holding that iron ore was a mineral, then proceeded to construe the 1941 deed containing the mineral reservation. The court wrote that a general intent of the parties rather than a specific intent should be the inquiry where the instrument itself expresses no specific intent with regard to the removal of near surface minerals. The general intent of a grant or reservation of minerals by a fee owner was to create an estate in the mineral owner in the valuable substances usually removed from the ground by means of wells or mine shafts but not by a method that would destroy or deplete the surface. The court then declared that the following rule was to be applied in determining whether an interest in the iron ore was conveyed by the deed in that case: "[u]nless the contrary intention is affirmatively and fairly expressed, therefore, a grant or reservation of `minerals' or `mineral rights' should not be construed to include a substance that must be removed by methods that will, in effect, consume or deplete the surface estate." The court went on to explain that although a grant or reservation of minerals by the fee owner affects a horizonal severance and the creation of two separate and distinct estates, it is not ordinarily contemplated by the parties at the time of the execution of the grant or reservation that the utility of the surface for agricultural or grazing purposes will be destroyed or substantially impaired. In essence, the court in that case held that unless the contrary intention is affirmatively and fairly expressed, those substances that can be extracted only by the substantial destruction of the surface are owned by the surface owner and are not included in the grant or reservation. The same principle was reaffirmed in Reed v. Wylie, supra, wherein the court stated: "[t]he substance which can be extracted only by substantial destruction of the surface is owned by the surface owner." (Emphasis supplied)
In the instant case, the undisputed summary judgment proof shows that as of the date of the 1958 deed, if the coal and lignite situated under the tract in question had been extracted, the extraction would necessarily have consumed or depleted the surface estate. Because the 1958 reservation did not mention coal or lignite and nothing in the instrument shows that the grantor expressly reserved all minerals, including those minerals that must be produced by open pit or strip mining, the deed shows no specific intent of the parties to include coal and lignite as reserved substances. Also, because it is not expected that the parties to the instrument would have intended the destruction of the surface by the mineral owner for coal and lignite in the absence of an expression of that intention, their use of the phrase "other minerals" in the instrument is not construed to include the near surface substance. Reed v. Wylie, supra. Upon construing the instrument in this manner, the contested substanceat whatever depthis not a "mineral," and the title to the contested substance remains in the surface owner. Upon applying the foregoing rules to the facts of this particular case, we hold that the 1958 mineral reservation did not include any of the coal and lignite situated on or under the land in question, and therefore the trial court properly disposed of the cause by rendering a summary judgment in favor of appellees, the surface owners.
Appellants contend that the summary judgment cannot be sustained on the basis *197 of the holdings in Acker and Reed, because the reservation in the instant case is substantially different from the reservations in those cases. They point out that the reservation in this case specifically reserves two substances, gravel and uranium, that can only be removed by substantially impairing or destroying the utility of the surface for agricultural or grazing purposes. It is their contention that since the mineral estate owners specifically reserved uranium and gravel, the recovery of which would have resulted in the destruction of the surface, the general intent of the parties must have been that the mineral estate owners would be permitted to destroy the surface estate in the extraction of any "other minerals," including coal and lignite. Therefore, they say that the holdings in Acker and Reed are not applicable to the facts and may not be utilized to deprive them of the title to the coal and lignite. We are not in accord with this proposition.
Appellants argue first that the reservation of gravel shows a general intent to allow the mineral owner to destroy the surface. Appellants state that it is common knowledge that the substance known as "gravel" can only be recovered by pit or strip-mining methods. Consequently, they take the position that since the title to the gravel, which could only be extracted by strip mining, was specifically reserved to the grantor, the parties fairly and affirmatively expressed an intent to permit other mineral substances such as coal and lignite to be extracted by pit- or strip-mining methods. We do not agree. Gravel is not a mineral within the ordinary and natural meaning of the word. Heinatz v. Allen, 147 Tex. 512, 217 S.W.2d 994, 997 (1949); San Jacinto Co. v. Southwestern Bell Telephone Co., 426 S.W.2d 338, 346 (Tex.Civ.App. Houston [14th Dist.] 1968, writ ref'd n. r. e.), cert. denied, 393 U.S. 1027, 89 S. Ct. 622, 21 L. Ed. 2d 570 (1969); Watkins v. Certain-Teed Products, Corp., 231 S.W.2d 981, 985 (Tex.Civ.App.Amarillo 1950, no writ). Inasmuch as gravel is not generally considered a mineral, the reservation of this particular substance does not shed any light on whether the parties intended to include or exclude a particular mineral substance within the reservation of "other minerals."
Appellants make the same argument with regard to the intent of the parties based on the specific reservation of the mineral, uranium. They take the position that if uranium is a substance that must be strip mined by methods that will destroy the surface, and if uranium is named as a reserved substance, then the deed shows on its face that the parties intended that the surface could be destroyed by mining an unnamed mineral substance, such as coal and lignite. In an effort to establish that at the time of the execution of the 1958 deed, the parties intended that the destruction of the surface would not be a barrier to the grantor's title to the coal and lignite, appellants offered summary judgment proof showing that uranium sometimes was found to outcrop in the general area where the land in question was situated. They also offered summary judgment proof that the only known method used in Texas in extracting uranium in 1958 was by strip-mining methods. No summary judgment proof was offered showing that the land in question contained uranium lying so near the surface that it could only be extracted by strip-mining methods. Thus, appellants' proof fails to support their contention that the specific reservation of uranium shows that the parties intended that the surface could be destroyed in the extraction of any other mineral substance.
Even if appellants' summary judgment proof shows that uranium must be produced by surface-destructive methods, we do not believe that this is a material issue in this case.
In this case, as in Acker v. Guinn and Reed v. Wylie, the court is confronted with the problem of construing a written instrument in order to determine title to the contested mineral substance. This, of course, involves an inquiry into the intent of the parties at the time the instrument was executed. Once the question of title is settled, the right or lack of right to extract the contested substances by pit or strip mining will naturally follow.
*198 In the instant case it is clear that the parties to the 1958 deed intended that the title to the uranium was to remain in the grantor since the parties specifically named that substance as being reserved to the grantor. It therefore follows that the grantor, as the owner of the title, would have the right to go on the land and recover the uranium in any manner deemed necessary, including pit or strip mining. It does not necessarily follow, however, that merely because the parties intended for the title to the uranium to remain in the grantor that they intended that the title to other unnamed minerals was also to remain in the grantor. In order to determine the intent of the parties with regard to whether they intended for the title to other unnamed mineral substances to remain in the grantor by virtue of the "other minerals" reservation, it becomes necessary to construe the 1958 deed in accordance with the principals laid down in Acker and Reed. The inquiry thus becomes whether the parties intended to include or exclude title to the particular substance in question. What they intended with regard to some specifically named substance or what legal rights may have accrued to the grantor as the holder of the title to a named substance, would not be indicative of what the parties intended with regard to the passage of title to the particular substance in question. The title to the contested substance must be determined in accordance with the rules of construction laid down in Acker and Reed. Upon applying those rules, it is clear, as we have heretofore pointed out, that the 1958 deed should not be construed as reserving title to the coal and lignite. For the foregoing reasons, we cannot agree with appellants' contention that the specific reservation of uranium was sufficient to fairly and affirmatively express an intention to reserve to the grantor an interest in any mineral substance to be found at or near the surface of the land.
Under their second and final point of error, appellants contend that the trial court erred in denying their motion for summary judgment and in granting appellees' motion for summary judgment, because there were no facts at issue and the inclusion of "uranium" as a reserved mineral in the 1958 deed reserved all minerals, including coal and lignite.
In support of the foregoing proposition, appellants rely on the holding in Cain v. Neumann, 316 S.W.2d 915 (Tex.Civ.App. San Antonio 1958, no writ). In that case the court held that uranium was included under a lease reciting the conveyance of "all of the oil, gas, coal and other minerals." Appellants argue that Cain stands for the proposition that an instrument reserving oil, gas, a dissimilar mineral, and other minerals reserve all minerals, whether named or not. Consequently, they contend that since the instrument in the present case reserves oil, gas, a dissimilar mineral (uranium), and other minerals, the reservation should be construed to reserve all minerals including coal and lignite. While the holding in Cain seems to support appellants' contention, it is noted that the case was decided long before the decisions of our supreme court in Acker and Reed. In discussing Cain, the Acker court stated that the question was not briefed by the appellees, who were contending that the lease did not cover uranium, and it did not appear that the case involved any question of open-pit mining. Acker, supra, at 351.
In view of the distinction pointed out by the Acker court, and in view of the substantial changes made in this area of the law by the holdings in Acker and Reed, we do not consider Cain to be authoritative or controlling under the facts presented here. Appellants' second point of error is overruled.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511372/ | 696 A.2d 940 (1997)
In re CHRISTOPHER H. et al.
No. 96-234-Appeal.
Supreme Court of Rhode Island.
June 3, 1997.
Frank P. Iacono, Jr., Anthony E. Angeli, Jr., John J. O'Brien, III, Providence, for Plaintiff.
Paula Rosin, Providence, for Defendant.
Before WEISBERGER, C.J., and LEDERBERG, BOURCIER and FLANDERS, JJ.
OPINION
PER CURIAM.
This matter came before this Court pursuant to an order directing the respondent to appear and show cause why the issues raised *941 in this appeal should not be summarily decided. The respondent, Marina Harris (Harris), appeals from an order of the Family Court granting the petition of the Department of Children, Youth and Families (DCYF) to terminate Harris's parental rights to her minor children Christopher, Randy, Courtney, and Daquan. Upon review of the briefs of Harris, DCYF, and the children's guardian ad litem and after hearing oral arguments thereon, we conclude that cause has not been shown. The appeal is denied and dismissed, the order terminating parental rights is sustained, and the papers are remanded to the Family Court.
The Family Court order terminating Harris's parental rights was premised upon the then-applicable G.L.1956 § 15-7-7(1)(b)(iii)[1] that permitted termination for the reason that excessive use of drugs made Harris unfit to provide proper care for her children. The Family Court also terminated Harris's parental rights under § 15-7-7(1)(c) because the children had been in the care of DCYF for more than six months and it was improbable that Harris's conduct would change in the foreseeable future so that the family could be reunited. Harris now asserts that the order of the Family Court should be vacated because (1) DCYF did not make reasonable efforts to encourage and strengthen the parental relationship prior to the filing of its petition for termination of parental rights as required under § 15-7-7(2)(a), (2) the Family Court failed to properly consider the best interest of the children, (3) the Family Court improperly found that her drug use made her unfit to provide proper care for her children; and (4) the Family Court improperly admitted hearsay evidence during hearings in that court. We find no merit in any of those contentions.
DCYF's involvement with the Harris family is a long one. According to the findings made by the Family Court justice who presided over the trial below, it apparently began in 1991 after the birth of Harris's second child, Christopher, who was born drug positive. At that time, DCYF attempted to allow Harris to remain with her newly born child, Christopher, and her child Randy. The department, along with Harris, then created a plan to keep the family together, while providing for drug treatment for Harris in order for her to both learn effective parenting procedures and to remain drug free.
The evidence adduced at the trial hearings, however, clearly demonstrated that Harris was unwilling to meet the objectives proposed by the DCYF plan and to end her drug use. Because of her failure to keep appointments and her failure of drug tests over the next several years, Harris was discharged from various drug-treatment centers proposed by DCYF, including Talbot Detox, Talbot Women's Day, the Junction Program, and Project Link. In examining Harris's efforts to break her chronic addiction, the trial justice found that Harris "yo-yo'd from one program to another" and that she repeatedly rejected alternative programs devised to assist her as being "too hard" or "too long."
During the period in which DCYF was attempting to assist Harris with her self-destructive behavior, she gave birth to two additional children, Courtney and Daquan. Despite the arrival of those infant children into her family unit, Harris continued her drug abuse. Ultimately, by 1993 she admitted to the neglect of her children Courtney, Randy, Christopher, and Daquan because of her chronic drug abuse, and each child was then committed to the care and control of DCYF.[2]
The trial justice found that in 1993, DCYF referred Harris for a psychological evaluation with John Parsons, Ph.D. Dr. Parsons testified as a psychological expert at the trial and opined on the basis of his several personal evaluations of Harris, that she suffered from chronic, mild depression; that she had experienced one major episode of depression, and that her cognitive abilities were limited. He further testified that in light of Harris's drug dependency and depression, her children were at high risk. He questioned Harris's ability to effectively care for them. In response to Dr. Parsons's evaluation, DCYF *942 attempted to arrange for Harris to meet with a therapist. Harris, however, neglected to ever contact the therapist to arrange for any meeting.
On June 21, 1994, DCYF filed a petition for the involuntary termination of Harris's parental rights to Courtney, Randy, Christopher, and Daquan, pursuant to § 15-7-7(1)(b)(iii) and (1)(c). Relying upon the trial evidence previously noted and our decision In re Antonio G., 657 A.2d 1052 (R.I.1995), the trial justice ordered termination of Harris's parental rights. Harris then filed this appeal.
In reviewing the ruling of the Family Court, we point out that the findings of a trial justice are accorded great weight and will not be disturbed unless the findings are clearly wrong or the trial justice has overlooked or misconceived material evidence. In re Kristen B., 558 A.2d 200, 204 (R.I. 1989).
In this case we cannot say from our review of the trial record that the trial justice's findings made in favor of the parental-termination petition were clearly wrong. With respect to Harris's contention that DCYF did not fulfill its prepetition obligation to make reasonable efforts to reunite the family, the trial justice, in rejecting that contention, noted the numerous efforts on the part of DCYF case workers to arrange for drug-treatment programs that would allow Harris to remain with her children or that would provide babysitting for her in order to permit her to attend planned programs. Such efforts by DCYF spanned several years and encompassed numerous planned drug-treatment programs. In addition to those planned drug-treatment programs, DCYF attempted to also provide psychological counseling for Harris, but she effectively refused all offers of help. We are satisfied that DCYF more than met its obligation as required under Kristen B.
Nonetheless, Harris contends now that there was insufficient information presented at the hearings to prove by clear and convincing evidence that her drug abuse rendered her incapable of properly caring for her children. We do not agree. We are persuaded, as was the trial justice, by the expert testimony of Dr. Parsons who not only questioned the parenting abilities of Harris but also testified that Harris's drug abuse put her children at high risk. In addition, we are persuaded that the trial justice properly found that Harris "yo-yo'd" from treatment program to treatment program and that her efforts at reform were perennially marred by missed appointments and failed drug tests. Finally, the record disclosing that DCYF was initially put in contact with Harris because her child Christopher had been born drug positive and that Harris herself tested positive for drugs just two days prior to giving birth to another of her children, Daquan, cannot be ignored. Such egregious behavior would certainly serve to threaten the health and future well-being of respondents' children, and only convinces us that the trial justice's finding that Harris was an unfit parent because of her chronic drug use was correct and that her parental rights were properly terminated.
Harris's contention that the trial justice improperly considered hearsay evidence in determining whether her drug abuse made her an unfit parent is without merit. She points to the testimony of DCYF witness Muriel Palumbo, a social worker, who at one point during trial testified concerning conversations that a DCYF student intern had had with Harris regarding the drug-treatment program Project Connect. We respond to her contention by reiterating that the admission of hearsay evidence does not automatically require reversal. State v. Burns, 524 A.2d 564, 568 (R.I.1987). Rather, we examine the hearsay testimony to determine the probable impact that it may have had upon the factfinder. Id. In this case we are convinced that the effect of this challenged evidence would have been simply negligible in view of the abundant and clear testimony concerning Harris's chronic drug addiction. Thus, even assuming that the hearsay evidence was improperly admitted, its admission would amount to nothing more than harmless error in the context of the overall trial evidence.
*943 We also reject Harris's contention that the termination of her parental rights was not in the best interest of the children. It is true that under § 15-7-7(3) the Family Court must "give primary consideration to the physical, psychological, mental, and intellectual needs of the child." It is also true that the evidence below suggested that some of Harris's children still have deep affection for her. However, in view of Harris's recalcitrant, self-centered attitude with respect to her chronic drug addiction and the expert testimony suggesting that the children in this appeal were at high risk, we are not persuaded by our review of the trial record that the trial justice either misconceived or overlooked any material evidence regarding the best interests of these children.
For the foregoing reasons, Harris's appeal is denied and dismissed, the parental termination order is affirmed, and the papers in this case are remanded to the Family Court.
NOTES
[1] This case was tried under the law as it existed prior to the 1994 amendment.
[2] A fifth child, Rhaneisha, was born April 7, 1995, but is not a subject in this appeal. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511359/ | 136 F.2d 98 (1943)
WESTERN FRUIT GROWERS, Inc., et al.
v.
GOTFRIED et al.
No. 10181.
Circuit Court of Appeals, Ninth Circuit.
May 27, 1943.
G. V. Weikert, of Los Angeles, Cal., for appellants.
*99 Leo V. Silverstein, U. S. Atty., and James L. Crawford and Wm. W. Worthington, Asst. U. S. Attys., all of Los Angeles, Cal., for the United States.
Before WILBUR, MATHEWS, and STEPHENS, Circuit Judges.
STEPHENS, Circuit Judge.
Appellees filed a debtor's petition in accordance with § 75 of the Bankruptcy Act, 11 U.S.C.A. § 203. During the course of the proceedings the District Court adjudged appellants guilty of contempt for violating an order of the Conciliation Commissioner to whom the matter had been referred. They appeal from the judgment of contempt.
Alleging that they were co-partners operating as general farmers, appellees Gotfreid and Cruce filed a debtor's petition under § 75 of the Bankruptcy Act on March 9, 1942. An unsecured claim owed to appellant Western Fruit Growers, Inc. (hereinafter called Western), for equipment, supplies and machinery, was listed as the only debt of the partnership. Four pieces of land on which appellees were tenant farmers, equipment, supplies, machinery, trade-marks and a credit from Western were scheduled as assets. All the assets were claimed to be exempt. The matter was referred to a Conciliation Commissioner, who, on the day the petition was filed, entered an order restraining Western from interfering with the debtors' property until further order of the court. Western filed a petition to dismiss the farmer-debtor proceeding on the ground that the District Court had no jurisdiction thereof.
Appellees filed an amended petition pursuant to which the District Court adjudged them bankrupts under § 75, sub. s, of the Bankruptcy Act, and enjoined creditors from interfering by any judicial or official proceedings.
The record and briefs of the parties indicate the following facts. Several years ago, in 1940, Gotfried and Western entered into an oral agreement by the terms of which the former was to farm lands on which Western held leases, and the latter to finance the undertaking, furnish the necessary equipment, sell the crops, and make advances to Gotfried of $200.00 per month. After deducting all payments and expenses, any profits or losses remaining were to be divided equally between the two parties. If a sufficient profit resulted to Gotfried, Western agreed to sell the equipment to Gotfried at cost. Western invested over $30,000.00 in equipment, leased two packing houses in its own name, and also paid rents, bills and monthly advances to Gotfried.
About February 20, 1942, and less than a month before debtor's petition was filed, Gotfried and Cruce formed the co-partnership, which is the debtor in the proceedings under § 75. The equipment and machinery listed as assets in the debtor's petition were the same as that furnished to Gotfried by Western under the oral agreement. Some of it was in a packing house in Colton leased by Western and not listed in the debtor's schedule of assets. Some of it was moved to Vista in San Diego County.
After filing their petition, appellees continued to use the packing house in Colton and to harvest crops. Unable to obtain any relief from the Conciliation Commissioner, Woodall and Wright, appellants herein and employees of Western, about March 29, 1942, took possession of the Colton packing house and of all the equipment therein. Cruce promptly prayed for, and the Conciliation Commissioner issued, an order, directed to Western and others, including its employees Woodall and Wright, directing them to surrender possession of the warehouse in Colton, and the properties therein, to appellees or to show cause why they should not be certified to the District Court in contempt proceedings, and enjoining them from removing any personal property from the warehouse or interfering with any properties of Gotfried and Cruce. About April 9, 1942, Woodall and other Western employees took possession of the equipment in Vista. Thereafter, the Conciliation Commissioner adjudged Western and the six individuals guilty of contempt and ordered them to appear before the District Court to be punished. The order was based on conclusions of law to the effect that the debtor was entitled to the possession of and the court had exclusive jurisdiction of the property at Colton and at Vista. Except for four of the individuals, the District Court found in accord with the Commissioner; it adjudged Western and the two employees Woodall and Wright, guilty of contempt and fined them $1.000.00, $500.00 and $250.00 respectively. The contemners appeal.
The argument has been advanced that the District Court could make no valid order the disobedience of which would constitute contempt because it had no jurisdiction over the property to which its order referred.
*100 That it is not contempt to disobey a void mandate, order, judgment, or decree, or one issued by a court without jurisdiction of the parties involved and of the subject matter has been frequently decided. Ex parte Fisk, 113 U.S. 713, 5 S. Ct. 724, 28 L. Ed. 1117; Ex parte Rowland, 104 U.S. 604, 26 L. Ed. 861; Beauchamp v. United States, 9 Cir., 76 F.2d 663. However, if a court has jurisdiction over both the parties and the subject matter, an order must be obeyed so long as it remains the order of the court. Howat v. Kansas, 258 U.S. 181, 42 S. Ct. 277, 66 L. Ed. 550; United States v. Shipp, 203 U.S. 563, 27 S. Ct. 165, 51 L. Ed. 319, 8 Ann.Cas. 265; Brougham v. Oceanic Steam Navigation Co., 2 Cir., 205 F. 857. The court below sitting in bankruptcy had jurisdiction over the subject matter, that is, it had the power to act in the bankruptcy proceedings as § 75, sub. n, provides that the filing of a debtor's petition subjects "the farmer and all his property" to the "exclusive jurisdiction" of the court. Similarly, the court had jurisdiction of the appellants as Western voluntarily appeared and questioned the debtor's petition in the bankruptcy proceeding, and as Western acted through its employees Woodall and Wright. Therefore, they were obligated to conform to the court's orders.
Appellants contend that the dismissal of the bankruptcy case in the District Court, in Re Gotfried, 45 F. Supp. 939, necessitates the dismissal of the ancillary contempt proceedings. Such a result occurs only in cases of civil contempt where the disposal of the original cause settles the rights of the parties, and the complainant is entitled to no further relief through punishment for contempt. In a proceeding for criminal contempt to vindicate the authority of the court, the outcome of the main case does not affect the conviction for contempt. Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 31 S. Ct. 492, 55 L. Ed. 797, 34 L.R.A.,N.S., 874; Worden v. Searls, 121 U.S. 14, 7 S. Ct. 814, 30 L. Ed. 853; Salvage Process Corp. v. Acme Tank Cleaning Process Corp., 2 Cir., 86 F.2d 727; Eustace v. Lynch, 9 Cir., 80 F.2d 652.
Despite the fact that disobedience of the order would constitute contempt, the procedure below will not support a criminal judgment. § 41 of the Bankruptcy Act, 11 U.S.C.A. § 69, provides that in proceedings before a referee a person shall not disobey any lawful order, that if he does, the referee shall certify the facts to the judge and shall serve upon the person an order to show cause, and that the judge shall, "in a summary manner," hear evidence and punish the person "in the same manner and to the same extent as for a contempt committed before him."
Both appellants and appellees agree herein that criminal contempt is involved. The district judge stated that the question involved the vindication of the process of the court and not of the rights of the farmer-debtor. Furthermore, the fines imposed upon the contemners indicate the punitive rather than the remedial, nature of the punishment. Fox v. Capital Co., 299 U.S. 105, 57 S. Ct. 57, 81 L. Ed. 67; Michaelson v. United States, 266 U.S. 42, 65, 45 S. Ct. 18, 69 L. Ed. 162, 35 A.L.R. 451; McCrone v. United States, 9 Cir., 100 F.2d 322, affirmed 307 U.S. 61, 59 S. Ct. 685, 83 L. Ed. 1108. However, the procedure required in a criminal prosecution was not followed.
Conformance with certain rules of practice in a criminal contempt proceeding is essential, even if it be conceded that the court had summary jurisdiction. In Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 444, 31 S. Ct. 492, 499, 55 L. Ed. 797, 34 L.R.A.,N.S., 874, discussing a violation of an injunction restraining the publication of any statement concerning the existence of a boycott, the court remarked: "* * * it is certain that in proceedings for criminal contempt the defendant is presumed to be innocent, he must be proved to be guilty beyond a reasonable doubt, and cannot be compelled to testify against himself." In accord: Michaelson v. United States, 266 U.S. 42, 66, 45 S. Ct. 18, 69 L. Ed. 162, 35 A.L.R. 451; and McIntosh v. United States, 9 Cir., 73 F.2d 908, 909 (contempt in a bankruptcy matter). In a summary proceeding against a witness for giving evasive answers and concealing facts before a bankruptcy referee, the court discussed criminal contempt and stated, In re Eskay, 3 Cir., 122 F.2d 819, 822: "Where the contempt has not been committed in the presence of the court and evidence must be taken to establish the contempt, the court's summary powers have been curtailed to the extent that the accused must be presumed to be innocent, need not testify against himself and must be found guilty beyond a reasonable doubt."
The prosecution should be conducted on behalf of the United States by the district attorney or on behalf of the court by *101 an attorney selected by it. In McCann v. New York Stock Exchange, 2 Cir., 80 F.2d 211, 214, the court declaring that the reason for observing the proper practice is to inform the respondent at the outset of the criminal nature of the matter, remarked that if an attorney of a party was selected the character of the suit might be equivocal, and concluded: "This can be made plain if the judge enters an order in limine, directing the attorney to prosecute the respondent criminally on behalf of the court, and if the papers supporting the process contain a copy of this order or allege its contents correctly. We think that unless this is done the prosecution must be deemed to be civil and will support no other than a remedial punishment." The principle is reiterated in Re Eskay, 3 Cir., 122 F.2d 819, 823; and in Federal Trade Commission v. A. McLean & Son, 7 Cir., 94 F.2d 802, 804.
In the instant case the contempt action was instituted by an affidavit of appellee Cruce, dated March 29, 1942, setting out the acts complained of and concluding as follows: "Wherefore, your affiant prays that an order be made and issued in the above entitled proceedings requiring said John Doe and Richard Roe [Western's two employees who personally took possession of the property] to deliver possession of said warehouse located at 55 South Eighth Street, Colton, California, to Morris A. Gotfried and Lawrence Cruce, a copartnership, forthwith, or upon their failure to do, for Western Fruit Growers, Inc., a corporation, T. H. Peppers, L. J. Colton, G. V. Weikert, Joseph P. Frushone, John Doe and Richard Roe to appear before the Honorable Fred Duffy at a time and place certain and show cause, if any they have, why they should not be certified to the United States District Court in contempt proceedings." (Italics ours.) On the same day the Conciliation Commissioner ordered with reference to the same group that possession of the warehouse and its contents be surrendered to appellees or cause be shown why they should not be certified to the District Court in contempt proceedings. In the initial stages of the proceeding, then, a remedial direction was prayed for and given, that is, that the property be returned to appellees.
The record shows that the district judge from the bench labeled the matter as one in criminal contempt, a fact which would serve to inform appellants of its nature. However, the hearings before both District Court and Commissioner were prosecuted by the attorneys for the appellees. Not until the trial in the District Court was actually in progress were the appellants definitely notified that the contempt was criminal in character. Therefore, the contemners were not aware at the outset of the criminal nature of the proceeding.
Furthermore, no attempt was made to prove appellants guilty beyond a reasonable doubt. At one point in the hearing before the District Court, appellants' attorney moved for an order directing the Conciliation Commissioner to certify to the court the entire record before him, the motion was denied on the ground that the Commissioner had filed his certificate, which was sufficient to warrant the statements contained in it unless impeached, and that therefore the burden of preparing the record was on the contemners not on the Commissioner (R. 157f).
At another time the trial judge declared: "I think the record is such as to require the corporate respondent, and the respondents Colton, Frushone, and Weikert, to make some showing on the order to show cause as to whether they should not be adjudged in contempt of court with respect to taking possession of certain properties scheduled in the bankruptcy schedule as being property of the estate of the alleged farmer-debtors." To this statement the attorney for contemners observed: "* * * as to that I think we would be willing to submit it on the transcript before the Conciliation Commissioner, because I know of nothing further that could be added," (R. 201). These comments indicate that the burden was placed on the contemners to exonerate themselves of the contempt charge, contrary to the general rule herein discussed.
It is true that the corporation conceded that it took possession of property in the Colton warehouse, but it contended that it did not thereby violate the order restraining interference with the property of Gotfried and Cruce, as it merely took into custody its own property. Under such circumstances "the burden of establishing * * * guilt beyond a reasonable doubt lay with the prosecution." In re McIntosh, 9 Cir., 73 F.2d 908, 910.
The power to punish for contempt should be exercised sparingly. We believe that the judgment of the court below cannot be upheld in view of the irregularities in the proceedings.
Reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511475/ | 165 N.J. Super. 294 (1979)
398 A.2d 123
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
GEORGE BELLUCCI, DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Argued December 4, 1978.
Decided January 18, 1979.
*295 Before Judges CONFORD and KING.
*296 Mr. Harold J. Cassidy argued the cause for appellant (Messrs. Krivit, Miller & Galdieri, attorneys).
Mr. Blair R. Zwillman, Deputy Attorney General, argued the cause for respondent (Mr. John J. Degnan, Attorney General of New Jersey, attorney; Edwin H. Stern, Deputy Attorney General, on the brief).
The opinion of the court was delivered by CONFORD, P.J.A.D., Retired (temporarily assigned).
Defendant was indicted with Primas Johnson, Mildred Commandatore and Anthony Commandatore for various violations of the criminal statutes pertaining to the operation of a lottery. The Commandatores pleaded guilty immediately prior to the beginning of the trial of Bellucci and Johnson under circumstances material to the determination of this appeal, later to be recounted. Bellucci and Johnson were both convicted of working for a lottery and possession of lottery paraphernalia. Bellucci appeals on various grounds of which only two have merit. One is conflict of interest on the part of his trial counsel, and it will compel a reversal and new trial. We deal with the other grounds first.
On December 13, 1973 a raiding party of undercover detectives attached to the New Jersey State Police Gambling Unit converged on 16-18 Beacon Avenue in Jersey City. The premises were suspected of housing an illegal lottery operation and had been under surveillance for some time.
At approximately 4:30 P.M. the detectives observed Mildred Commandatore and Primas Johnson in the driveway of 18 Beacon Avenue. They were apprehended after police observed Johnson passing a paper bag to Commandatore. The bag contained lottery slips and $1280.50 in cash. Immediately thereafter, pursuant to a search warrant, the officers entered the kitchen of the premises at 18 Beacon Avenue. Defendant was observed seated at the kitchen table with slips of paper in front of him and a red pen in his hand. In close proximity to defendant on the table was an adding machine, a cellophane bag containing slips *297 of paper and scattered slips of paper with names and amounts of money written on them. Sixteen slips of paper containing numbers and initials were seized from the table at which defendant was sitting. Seized from the table was $450, and $456 was taken from defendant's person. The police placed defendant under arrest.
An expert witness for the State testified that much of the evidence seized in the raid on 18 Beacon Street was unlawful lottery paraphernalia. The witness opined that 18 Beacon Avenue was "being used as an office in the illegal lottery operation" and that defendant was "an employee of the illegal lottery operation."
At trial defendant disclaimed any connection with the lottery operation, although he was familiar with it, explaining he was present at the time of the raid only as a visitor to Mrs. Commandatore preliminary to an intended call on his friend, Mrs. Commandatore's brother, who was a patient at a nearby hospital. She had been sitting with him at the table, but had excused herself momentarily just before the police entered the room. There was copious evidence of Johnson's participation in the operation of the lottery along with the Commandatores.
I
Defendant urges that the prosecutor made improper and prejudicial remarks in his summation which deprived him of a fair trial. The comments here objected to concern (1) the prosecutor's reference to the "classic Hudson County defense" and (2) his observations respecting the trial tactics of counsel for codefendant Johnson.
In summation, the prosecutor stated:
The defense in this case when you look at it is really in two parts * * * we can call the first part your basic and your classic Hudson County defense. It consists of this: * * * it consists of this as being brought out with regard to each of the Defendants, with regard to Mr. Bellucci that he lived in Hudson County his entire life *298 but for two days, * * *. Sympathy or belief that these people are from Hudson County; these are our buddies. He pointed out I'm from Hudson County, I live in Jersey City. We're all Hudson County people here. It's a certain image, a certain view that a lot of people do like to have about Hudson County and maybe you believe it. Maybe you believe the view that because these people are from Hudson County and the State Troopers are not, therefore, three people can go on violating the law. * * *
Later in his summation the prosecutor again referred to Hudson County. He stated:
I asked you as people who have taken an oath to make a determination on the facts, to have the intelligence to be able to see what's going on in this courtroom, to have the pride in your county not to believe that simply because people come from Hudson County that they can go around committing crimes and that is an image you want and to have the self respect for yourselves and for the oath you took to make a proper determination on the facts of whether a crime was actually committed.
Counsel for the defendant objected to these comments at side bar and demanded either a mistrial or a curative instruction. The court denied defendant's motion for mistrial but indicated that it would "take care of the Hudson County crack." Although the court said nothing to the jury in reference to these allusions beyond remarking "there's only two people on trial here and not Hudson County," we do not regard the prosecutor's remarks, although inappropriate, as warranting reversal. In effect, he was saying nothing more than that the jury should not acquit defendants merely because they and the jurors were fellow citizens of Hudson County. Cf. State v. Kenny, 128 N.J. Super. 94 (App. Div. 1974), aff'd 68 N.J. 17 (1975).
Complaint is also registered to the prosecutor's references to the "theatrical" defense of the codefendant Johnson by his counsel Mr. McAlevy. Again, we find the comments not exemplary, but also not prejudicial, particularly since they did not concern this defendant.
*299 II
Defendant objects to interjections by the court and the prosecutor during his cross-examination of the State's investigating officer which he claims left the implication that defendant was involved in a similar offense on a subsequent occasion. The assertion is ill-founded. The interjections were appropriate, being prompted by defendant's examining the officer as to whether he had "ever in [his] life" seen defendant write or take a numbers bet, receive money, etc. The episode did not remotely warrant a mistrial, as requested by defendant.
III
During the cross-examination of a state trooper testifying for the State regarding the undercover surveillance of codefendant Johnson, the latter's counsel requested permission for all counsel and the witness to visit one of the surveillance sites in Jersey City in order to take photographs. The request was unopposed by the State and joined in by counsel for defendant. Absent an objection by the State, the court permitted this "novel" procedure and excused the jury for the weekend. Defendant now contends that the court's sanction of this procedure was plain error in that it distracted the jury from the central issue in the case, i.e., the guilt or innocence of defendant.
We discern no error whatsoever, plain or otherwise, especially since defendant's counsel joined in the request and must have thought the procedure would be helpful to defendant at the time.
IV
Prior to trial defendant moved pursuant to R. 3:15-2(b) for severence of his trial from that of his coindictees. It was contended that the surveillance evidence, which would be highly probative of the guilt of defendant's coindictees, *300 would prejudice his defense as he was not involved in the surveillance. The State countered with the fact that defendant was found at the time of the raid seated at the kitchen table surrounded by assorted lottery paraphernalia. It argued that in the interest of economy and efficiency these jointly indicted defendants should be tried together. The court agreed and held that the particular circumstances of this case did not warrant a severance. Defendant now contends that the denial of severance constituted reversible error.
It is well settled that the grant or denial of a motion for severance is entrusted to the sound discretion of the trial court. R. 3:15-2; State v. Manney, 26 N.J. 362, 368 (1958); State v. Whipple, 156 N.J. Super. 46, 51 (App. Div. 1978). Denial of such a motion will not result in a reversal unless there is a showing of prejudice or a mistaken exercise of the trial court's discretion. State v. Morales, 138 N.J. Super. 225, 229 (App. Div. 1975); State v. Moriarty, 133 N.J. Super. 563, 569 (App. Div. 1975), certif. den. 68 N.J. 172 (1975). Here the substantive offenses charged against the codefendants all arose out of the same criminal transaction and the initial joinder was proper. State v. Tapia, 113 N.J. Super. 322, 328 (App. Div. 1971); State v. Kropke, 123 N.J. Super. 413, 418 (Law Div. 1973). The issue therefore is whether defendant was prejudiced by the joinder.
It has been recognized that where a significant portion of evidence to be adduced at a joint trial is admissible only as to one defendant, the probability of harm to the other may be so great that the trial judge should, as a matter of fair practice, exercise his discretion in favor of a severance. State v. Hall, 55 N.J. Super. 441, 451 (App. Div. 1959). In the present case there was considerable testimony concerning the undercover surveillance conducted by the State Police which had no probative weight as to defendant's guilt, thus raising the possibility of the jurors inferring defendant's guilt by association. However, this is a hazard inhering in all joint trials and is therefore not in itself sufficient to justify a severance, *301 provided that by proper instructions to the jury the separate status of the codefendants can be maintained. State v. Freeman, 64 N.J. 66, 68 (1973). Here the trial court repeatedly instructed the jurors to consider the evidence as to defendant separately in passing upon guilt. There is no reason to believe the jury did not comply with these instructions. Moreover, the potential harm to defendant was substantially reduced by the elimination of the Commandatores as defendants at trial by virtue of their pleas of guilty. See State v. Mayberry, 52 N.J. 413, 421-423 (1968), cert. den. sub nom. Mayberry v. New Jersey, 393 U.S. 1043, 89 S.Ct. 673, 21 L.Ed.2d 593 (1969).
We find no basis to conclude that the denial of the motion to sever was reversible error.
V
Defendant now asserts, for the first time, that his conviction of possession of lottery memoranda (count three) merged with the conviction of working for an illegal lottery (count two), and that it was error for the trial judge to sentence defendant separately on both convictions. He asks this court to vacate the judgment of conviction and sentence on count three. We agree.
In State v. Snow, 77 N.J. 459, 466 (1978), it was held that when "the very same lottery slips as [support]" a charge of possession of lottery slips "[form] the basis" for a charge of working for a lottery, a conviction of the former is to be merged into a conviction of the latter. We regard the principle of the Snow decision as applicable here. When apprehended, defendant was found in constructive possession of lottery slips and memoranda as well as other implements of an ordinary lottery enterprise. Conviction of working for a lottery obviously depended to a substantial degree upon the evidence of possession of the lottery papers. Consequently the lottery possession offense should be regarded as "an integral part" of the scheme of conducting, or "working for," *302 a lottery, and should merge into the latter offense. Cf. State v. Best, 70 N.J. 56, 63 (1976).
For purposes of any further prosecution of defendant after the reversal ordered hereinafter, defendant may be convicted of only one of the offenses (working for a lottery or possession of lottery slips) if the proofs at a new trial are as presented at this trial.
VI
Defendant contends that he was denied the effective assistance of counsel in that his trial attorney and the trial attorney for codefendant Johnson were partners in the practice of law. On our own motion, we have expanded this point to consider the effect of the circumstance that John P. Russell, Esq., defendant's attorney, was also the attorney for the coindictees Anthony and Mildred Commandatore immediately prior to their entering pleas of guilty and had advised them with respect to that step (although substituted counsel appeared for them at the taking of the pleas). Counsel have been afforded an opportunity to argue to the point. We conclude that all of these circumstances, taken together, amount to a case of conflict of interest on the part of Mr. Russell which requires the reversal of defendant's convictions.
At the trial herein the codefendant Johnson was represented by Dennis McAlevy, Esq., law partner of Mr. Russell. The fact of the partnership of the lawyers was mentioned before the jury in the course of colloquy over an objection to evidence being offered by the State. As indicated above, there was plenary evidence of Johnson's guilt. In defendant's case there was only his presence at the table in the kitchen on the isolated occasion of the raid. The jury might well have surmised, to defendant's detriment, that he would not have engaged a partner of the lawyer who was representing the apparently guilty codefendant Johnson if defendant were innocent of criminal association with the latter. While this *303 circumstance alone might not warrant a reversal, taken in combination with the other aspect of conflict of interest on the part of Mr. Russell, it produces an aggregate of potentiality of prejudice to defendant which commands reversal. State v. Land, 73 N.J. 24 (1977); State v. Boone, 154 N.J. Super. 36, 39 (App. Div. 1977); State v. Ebinger, 97 N.J. Super. 23 (App. Div. 1967). Although he was represented on the plea proceedings by James A. Galdieri, Esq., the latter referred to a conference preceding the plea proceedings he had had with Mr. Russell whom he identified "as Mr. Commandatore's attorney." It was made clear that Mr. Russell had reprepresented and advised Mr. Commandatore in reference to attempted plea negotiations and generally as to the advisability of pleading guilty. On February 1, 1977 Mildred Commandatore, the other coindictee, also pleaded guilty, being also then represented on the record by Mr. Galdieri. Again, it was brought out that this indictee had consulted with and been advised by Mr. Russell in reference to the matter of pleading guilty. Neither of the Commandatores was sentenced prior to the conclusion of the instant trial. Nor did either testify at the trial.
The potentiality for less than thoroughly faithful and undivided attention to defendant's interests at the trial on the part of Mr. Russell is obvious. Defendant's explanation of his presence at the Commandatore home on the incriminating occasion (which for present purposes must be assumed to have been truthful) could have been supported by calling Mrs. Commandatore, and his innocence of any connection with the lottery operation by calling both Commandatores, as witnesses. But Mr. Russell, as their prior attorney, had a conflicting interest in not calling them, as such testimony, favorable to this defendant, might have been deemed harmful to their interests in relation to their impending sentencing. Compare the closely analogous situation which impelled a reversal of a conviction in State v. Ebinger, supra (opinion by Justice, then Judge, Sullivan). Cf. In re Cipriano, 68 N.J. 398 (1975).
*304 There is nothing in this record to indicate, or any claim by the State, that defendant was advised before trial of the conflicting interests of himself and defendant Johnson and of himself and coindictees Commandatore, and, in consequence, of the conflict of interest on the part of Mr. Russell and its potential for prejudicing his defense. See State v. Land, supra, 73 N.J. at 34, 35; State v. Green, 129 N.J. Super. 157, 164 (App. Div. 1974).
The rule now clearly established in this State, and adumbrated as long ago as 1967 in the Ebinger case, supra, 97 N.J. Super. at 27, is that in the absence of waiver, if a potential conflict of interest exists, prejudice will be presumed resulting in a determination of violation of the State constitutional provision guaranteeing the assistance of counsel. N.J. Const. (1947), Art. I, par. 10. State v. Land, supra, 73 N.J. at 35. If there is to be a retrial in this case, either defendant must be advised by counsel and the trial court of the hazards of representation by Mr. Russell and consent thereto obtained or he must be represented by by different counsel. Ibid.
Reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511477/ | 136 F.2d 873 (1943)
TRAVELERS INS. CO. et al.
v.
BRANHAM, Deputy Commissioner, United States Employees Compensation Commission, et al.
No. 5069.
Circuit Court of Appeals, Fourth Circuit.
May 21, 1943.
Leon T. Seawell, of Norfolk, Va., for appellants.
Braden Vandeventer, and Russell T. Bradford, Asst. U. S. Atty., both of Norfolk, Va. (Sterling Hutcheson, U. S. Atty., of Norfolk, Va., and Ward E. Boote, Chief Counsel, U. S. Employees' Compensation Commission, and Herbert P. Miller, Associate Counsel, both of Washington, D. C., on the brief), for appellees.
Before PARKER, DOBIE, and NORTHCOTT, Circuit Judges.
DOBIE, Circuit Judge.
This is an appeal from a decree of the United States District Court affirming a decision by Charles Branham, Deputy Commissioner, United States Employees Compensation Commission, Fifth District (hereinafter called the Commissioner), and awarding to Florence Phillips, a widow of Albert Phillips, the compensation allowed *874 by the Commission under the provisions of the Longshoremen's and Harbor Workers' Compensation Act (hereinafter called the Act), 33 U.S.C.A. Chapter 18, Section 901 et seq. The only question presented for our decision is whether the accident resulting in the death of Albert Phillips, came within the ambit of the Act. The specific provision of the Act, relative to coverage, with which we are particularly concerned, is Section 2(4), 33 U.S.C.A. § 902(4):
"The term `employer' means an employer any of whose employees are employed in maritime employment, in whole or in part, upon the navigable waters of the United States (including any dry dock)."
The Commissioner made the following findings of fact:
"That on the 1st day of May, 1941, Albert J. Phillips was in the employ of the employer above named at Portsmouth in the State of Virginia, in the Fifth Compensation District, established under the provisions of the Longshoremen's and Harbor Workers' Compensation Act, and that the liability of the employer for the payment of compensation under said Act was insured by The Travelers Insurance Company; that on said day the said Albert J. Phillips, while performing service for said employer upon the navigable waters of the United States, sustained personal injury which arose out of and in the course of his employment and resulted in his death, while employed as a general labor foreman, engaged in the construction of a dry dock located adjacent to the Elizabeth River at the Norfolk Navy Yard, Portsmouth, Virginia; that on said day the said Phillips accidentally fell from the gangplank of a tremie barge, a distance of about 14 feet, landing on the ground below, and resulting in fracture of the fifth cervical vertebra, with displacement, causing paralysis of the lower portion of the body, from which he died on May 7, 1941; that at the time of the accident the said employer was engaged in the construction of a dry dock for the United States Navy, the dimensions of which are 1,100 feet long, 150 feet wide, and 50 feet deep; that there was used in connection with the construction of said dry dock a so-called tremie barge, located upon the navigable waters of the United States, which was about 300 feet long and about 35 feet wide, and which was originally a railroad car float; that the employer constructed thereon eight towers to handle concrete and a system of hoppers to control the movement of concrete; that a gangway extended from the barge to the shore trestle; that the barge operated inside the dry dock, and was shifted up and down therein by means of winches on the deck and cables extending to the shore; that the barge had no propulsion power of its own; that it was towed into the dry dock by a tugboat; that it was moved to new locations within the dry dock every eight or ten hours;
"That at the time of the accident the principal work consisted of underwater concreting known as `tremie' concreting; that the concrete was distributed from a concrete plant located on the shore through iron pipes extending over the trestle, the gangplank and onto the barge, from whence it was poured through hoppers into pipes leading to the underwater forms on the floor of the dry dock; that the gangplank was 59 feet long and 14½ feet wide, was made fast to the barge by a series of pins and was raised and lowered by means of a hoist on the barge which was operated by steam; that the gangplank was a part of the barge's equipment;
"That just before the accident the pipes had been disconnected, the gangplank raised, and the barge moved to a new position; that the said Phillips, decedent, was at that time engaged in supervising work in connecting the pipes to the barge at the new location; that while so engaged he was seen by a co-worker, one A. S. Kohl, leaving the barge and walking toward the shore trestle and, while on the gangplank of the barge, inside the dry dock, he accidently fell from the gangplank to the ground below, resulting in the injuries which caused his death; that the place where he landed was within the range of mean low tide and mean high tide; that the accident occurred at low tide and the ground underneath the gangplank was damp from the receding tide; that at high tide the water would have been about 18 inches deep at the place where decedent landed;
"That the said dry dock was being constructed exclusively for the repair and other work about ships; that it is designed solely as an aid to navigation, and has no relation to land commerce; that decedent was engaged in a maritime operation and enterprise, and his employment was maritime; that his death occurred on the navigable waters of the United States *875 and is within the purview of the said Longshoremen's Act."
There was also in the record uncontroverted evidence that at certain places within the uncompleted dry dock the water, flowing in from the Elizabeth River, reached a depth of more than 50 feet, and that, in the conversion of the car-float into a tremie barge for pouring concrete under water, no important changes were made in the hull, so that the barge was still clearly a vessel, within the admiralty meaning of that term, which was capable of engaging in maritime navigation. Cf. Butler v. Robins Dry Dock & Repair Co., 240 N.Y. 23, 147 N.E. 235.
Counsel for appellants, in seeking a reversal of the decree below, urge:
(1) The accident did not occur upon navigable waters of the United States;
(2) The accident did not occur upon a dry dock;
(3) The deceased was not engaged at the time of the accident in any maritime employment;
(4) In any event, the matter is one of purely local concern.
In connection with the second of these contentions, appellants argue that the language of the Act contemplates a completed structure, a finished dry dock, and not, as here, an unfinished structure on which only about one-twentieth of the work had been actually completed. Appellants insist upon the analogy of the building of a ship and cite the recent decision of our Court in Frankel v. Bethlehem-Fairfield Shipyard, 4 Cir., 132 F.2d 634. That case is not in point here, for what was there held was that Frankel was not a "seaman", as that term is used in the Jones Act, 46 U.S.C.A. § 688. In the Raithmoor, 241 U.S. 166, 36 S. Ct. 514, 60 L. Ed. 937 (though the facts in the Raithmoor case and the instant case are different) Chief Justice Hughes (241 U.S. at pages 175-177, 36 S.Ct. at page 516, 60 L. Ed. 937) used language indicating that such an analogy is not a happy one. Cf. Merritt-Chapman & Scott Corporation v. Bassett, 50 F. Supp. 488, decided April 8, 1943, by the United States District Court for the Western District of Michigan, Northern Division. See, also, The Blackheath, 195 U.S. 361, 25 S. Ct. 46, 49 L. Ed. 236; United States v. Bruce Dry Dock Co., 5 Cir., 65 F.2d 938.
As to whether the employment of Phillips was maritime in nature, and as to whether the accident occurred on navigable waters, see John Baizley Iron Works v. Span, 281 U.S. 222, 50 S. Ct. 306, 74 L. Ed. 819; The Admiralty Peoples, 295 U.S. 649, 55 S. Ct. 885, 79 L. Ed. 1633; Minnie v. Port Huron Co., 295 U.S. 647, 55 S. Ct. 884, 79 L. Ed. 1631; South Chicago Coal & Dock Co. v. Bassett, 309 U.S. 251, 60 S. Ct. 544, 84 L. Ed. 732; Diomede v. Lowe, 2 Cir., 87 F.2d 296; Butler v. Robins Dry Dock & Repair Co., 240 N.Y. 23, 147 N.E. 235.
The Act, as a remedial statute, must be liberally construed. Baltimore & Philadelphia Steamboat Co. v. Norton, 284 U.S. 408, 52 S. Ct. 187, 76 L. Ed. 366; DeWald v. Baltimore & Ohio Railway Co., 4 Cir., 71 F.2d 810. Since the enactment of the Act, the United States Supreme Court, in this particular connection, has certainly given a restricted application to the doctrine of local concern, when the application of that doctrine would deny a remedy under the Act. Parker v. Motor Boat Sales Co., 314 U.S. 244, 62 S. Ct. 221, 86 L. Ed. 184; Davis v. Department of Labor, 317 U.S. 249, 63 S. Ct. 225, 87 L. Ed. ___. See, also, Robinson on Admiralty, p. 122. And compare the opinion of Mr. Justice Rutledge in Aguilar v. Standard Oil Co., 63 S. Ct. 930, 87 L. Ed. ___, decided by the United States Supreme Court April 19, 1943. It would seem that Congress, in the Act, intended to exercise to the fullest extent all the power and jurisdiction it possessed over the subject matter. Crowell v. Benson, 285 U.S. 22, 52 S. Ct. 285, 76 L. Ed. 598; Continental Casualty Co. v. Lawson, 5 Cir., 64 F.2d 802. Then, there is the very strong language of Mr. Justice Black in Davis v. Department of Labor, 317 U.S. 249, 63 S. Ct. 225, 229, 87 L. Ed. ___:
"Where there has been a hearing by the federal administrative agency entrusted with broad powers of investigation, fact finding, determination, and award, our task proves easy. There we are aided by the provision of the federal act, 33 U.S.C. § 920, 33 U.S.C.A. § 920, which provides that in proceedings under that act, jurisdiction is to be `presumed, in the absence of substantial evidence to the contrary'. Fact findings of the agency, where supported by the evidence, are made final. Their conclusion that a case falls within the federal jurisdiction is therefore entitled to great weight and will be rejected only in cases of apparent error."
*876 Attention is also called to the language of this same Justice in Parker v. Motor Boat Sales Co., 314 U.S. 244, 62 S. Ct. 221, 86 L. Ed. 184.
Here we have the precise findings of the Commissioner, which were affirmed by the United States District Court. In the light of the whole picture, we cannot say, as to the instant case, there is any "apparent error" in either the findings of fact or in the finding that this case falls within the ambit of the Act.
We, accordingly, affirm the decree of the District Court.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511505/ | 165 N.J. Super. 258 (1978)
398 A.2d 106
MILDRED KELLER AND GEORGE KELLER, HER HUSBAND, PLAINTIFFS-APPELLANTS,
v.
FRANK KULL, INC., A CORPORATION, ISRAL RUBIN AND/OR SAV-MOR CO., (SAV-MOR CO. #11), JOINTLY, SEVERALLY AND IN THE ALTERNATIVE, DEFENDANTS-RESPONDENTS.
Superior Court of New Jersey, Appellate Division.
Argued October 24, 1978.
Decided November 15, 1978.
*260 Before Judges CRANE and HORN.
Mr. John A. Yacovelle argued the cause for appellants.
Mr. F. Herbert Owens, III, argued the cause for respondent Frank Kull, Inc. (Messrs. Montano, Summers, Mullen & Manuel, attorneys).
Mr. Robert Brooks argued the cause for respondent Sav-Mor Co. (Messrs. Martin, Crawshaw & Mayfield, attorneys; Mr. G. Paul Crawshaw on the brief).
PER CURIAM.
Plaintiffs instituted an action for personal injuries sustained by Mrs. Keller (hereinafter individually designated as plaintiff) arising out of an accident which occurred on December 15, 1972. Mr. Keller joined in the action per quod. Following a trial the jury returned a verdict against them through written answers to interrogatories. R. 4:39-2. This appeal followed.
The evidence adduced at the trial tended to establish that on the above date plaintiff operated a beauty shop in premises rented by her at 795 Emerson Avenue, Lindenwold, New Jersey. Her shop was in the third store from the corner of Gibbsboro Road in a line of stores under common ownership[1] and leased to different parties. The first store, situate at approximately the corner of Gibbsboro Road and Emerson *261 Avenue, was a drugstore operated by defendant Rubin under the name "Sav-Mor Drug Store." Between plaintiff's store and the drugstore was a gift shop operated by a third person. Leading from the front door of the stores was a parking area. Each store had a back door opening onto a walkway and drainage area.
Plaintiff had become a tenant in said store about two weeks before the date of the accident. During that interval she had gone out the back door once or twice and had noticed a dumpster[2] located back of the Sav-Mor Drug Store. Defendant Frank Kull, Inc., which operated a trash removal business, had placed the container behind the drugstore under contract with Rubin.
Plaintiff testified that on the day of the accident she had placed some used towels in a covered plastic container behind her store. Later she noticed they were gone, but was too busy to investigate the incident at the time. About 9:30 P.M., when the drugstore was closed, she went out her front door and proceeded around the drugstore to the rear of it, because it was too dark to go out the back door. She approached the dumpster for the purpose of ascertaining whether her towels were in it. Although it was dark and she could not see inside, she opened the lid of the dumpster about one-half or three-quarters of the way up, from front to back, when the dumpster fell on her, causing personal injuries for which she and her husband sought to recover.
Although she believed the dumpster was community property, she admitted no one had verbally told her that it was, nor did anyone notify her of restrictions on her use of the rear sidewalk or the dumpster. Additional facts are discussed hereinafter.
Plaintiffs raise three grounds as bases for reversal:
Point I The court erred in refusing to instruct the jury
on the doctrine of res ipsa loquitur.
*262
Point II The court erred in failing to strike the defense
of contributory negligence and in submitting the
issue to the jury.
Point III The court erred in charging the jury on the
applicability of the law of trespass to the case
as a whole and to these defendants in particular.
We take up each of them in the stated order.
I
After all the testimony was introduced by all parties during the trial, plaintiffs' attorney moved for a directed verdict in favor of plaintiffs "for this reason, that this is essentially similar to a Res Ipsa Loquitur case." The judge declined to grant the motion and did not instruct the jury as to the doctrine of res ipsa loquitur. No objection was made to the charge on this ground. Nonetheless, plaintiffs contend under their first point that the judge erred in failing to so charge. We disagree.
No written request was submitted by plaintiffs to charge the doctrine, as required by R. 1:8-7. Although a judge should instruct the jury on basic questions of law arising out of the facts, even without a request to do so, Grammas v. Colasurdo, 48 N.J. Super. 543 (App. Div. 1958), in the context of the evidence adduced in the instant case the doctrine of res ipsa loquitur did not apply. Accordingly, there was no duty to instruct it even if requested.
The dumpster was not in the exclusive possession of either defendant. It could not be said that the injury was not the result of plaintiff's own conduct. Kahalili v. Rosecliff Realty, Inc., 26 N.J. 595, 606 (1958). It fell only after plaintiff endeavored to open the lid. Although she testified that is all she did, the jury could have properly inferred differently in view of the darkness and the fact that she would be compelled to grope through the interior of the dumpster to locate her towels. Ferdinand v. Agricultural Ins. Co. of *263 Watertown, N.Y., 22 N.J. 482 (1956); State v. Talbot, 135 N.J. Super. 500, 508 (App. Div. 1975) aff'd 71 N.J. 160 (1976); Corcoran v. Hartford Fire Ins. Co., 132 N.J. Super. 234, 243-244, (App. Div. 1975).
II
The second point that contributory negligence was not an issue is without merit. Also, apart from plaintiff's failure to object to the charge on this issue, it was clearly an appropriate one for the jury's consideration. Contributory negligence consists of the failure of a plaintiff to use such care for his own safety as an ordinarily prudent person in similar circumstances would use. Hendrikson v. Koppers Co., 11 N.J. 600 (1953). In the case presented to the jury, the jury could have well found that plaintiff, undertaking to ascertain whether her towels were in the dumpster under the circumstances related above, was contributorily negligent.
III
Finally, defendant asserts that the judge erred in charging as to the applicability of the law of trespass. The case was obviously tried on the theory of plaintiff's status with respect to both the premises and the dumpster when the accident occurred. Plaintiff's attorney argued at the close of the evidence, in response to defendants' motions for judgment, that "[t]he cases that I mentioned * * * show clearly that both issues of status of the plaintiff and thus the duty owed and the foreseeability of the happening of the accident are questions for the jury * * *." Not until after the judge had charged the jury did plaintiffs' attorney claim that the jury could not find that plaintiff was a trespasser. It was then too late to claim that the issue was not properly in the case. Cartan v. Cruz Constr. Co., 89 N.J. Super. 414, 422 (App. Div. 1965).
*264 Nonetheless, we are satisfied that the question of plaintiff's status was properly placed before the jury. Assuming that plaintiff was authorized to use the rear of the drugstore premises, the scope of her invitation was an issue for the jury. It could validly determine that she exceeded that invitation in going to the location of the dumpster on the evening in question. Giangrasso v. Dean Floor Covering Co., 51 N.J. 80 (1968); Hendrikson v. Koppers Co., supra; Williams v. Morristown Memorial Hosp., 59 N.J. Super. 384 (App. Div. 1960); Nary v. Parking Auth., 58 N.J. Super. 222 (App. Div. 1960).
The jury could have decided, as it apparently did, that plaintiff knew she had no right to use the dumpster for her own purposes and had no more right to open it to see if her property was in it than she had the right to open the closed drugstore to see if her property was contained therein. The duty of defendant Kull, as owner of the dumpster, was no greater under the circumstances than that of defendant Rubin. Gudnestad v. Seaboard Coal Dock Co., 15 N.J. 210 (1954); Kafton v. Wickberg, 120 N.J.L. 417, 418 (Sup. Ct. 1938), aff'd o.b. 121 N.J.L. 586 (E. & A. 1938); Prosser, Law of Torts, § 58 at 367 (1964).
In view of our determination that the issue as to plaintiff's status was correctly submitted to the jury, we need not consider plaintiffs' argument that one may not be a trespasser upon personal property. However, see Faggioni v. Weiss, 99 N.J.L. 157 (E. & A. 1923); Glowacky v. Sheffield Farms Co., 4 N.J. Misc. 849 (Sup. Ct. 1926), aff'd 103 N.J.L. 697 (E. & A. 1927); Rose v. Squires, 101 N.J.L. 438 (Sup. Ct. 1925), aff'd without opinion, 102 N.J.L. 449 (E. & A. 1926). See also, Cohen v. Kaminsky, 36 N.J. 276 (1961), wherein our Supreme Court distinguished the duty owed by an owner of an automobile to his social guest from the duty owed by him to a trespasser therein. See also, Mondshour v. Moore, 256 Md. 617, 261 A. 2d 482 (Ct. App. 1970). In 57 Am. Jur.2d, Negligence, § 116 at 468, it is stated:
*265 * * * If the person injured was a trespasser on the defendant's premises, or was a trespasser by virtue of making use of the personal effects of the defendant without his consent, the liability of the defendant as the owner or possessor of a dangerous instrumentality depends upon whether he had or had not discharged the duty of care which he owed to trespassers of the plaintiff's class. [footnotes omitted]
Since we find no merit in any of the grounds raised by plaintiffs, the judgment is affirmed.,
NOTES
[1] The owner of the premises was not named as a defendant.
[2] Described as a trash container on wheels weighing about 200 pounds net, about four feet high. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511522/ | 939 F. Supp. 476 (1996)
Anthony BAZILLA, et al., Plaintiffs,
v.
BELVA COAL CO., et al., Defendants.
No. 2:96-0348.
United States District Court, S.D. West Virginia, Charleston Division.
September 13, 1996.
*477 Michael F. Niggemyer, Charleston, WV, Warren R. McGraw, II, Beckley, WV, for plaintiffs.
Carl J. Roncaglione, Jr., Daniels Law Firm, Charleston, WV, for Belva Coal Company, Belva Acquisition, Inc., Charles Steven Robinson, Ross Kegan, individually and as partners and/or officers/owners of Madison Branch Management, Inc., Rich Creek Mining Contractors, Inc., Belva Coal Company and/or Golden Oak Mining, L.P.
D.C. Offutt, Jr., Offutt, Eifert, Fisher, Duffield & Nord, Huntington, WV, for Golden Oak Mining, L.P.
Sheryl S. Mahaney, Richard J. Bolen, Huddleston, Bolen, Beatty, Porter & Copen, Huntington, WV, for William B. Sturgill.
MEMORANDUM OPINION AND ORDER
HADEN, Chief Judge.
Pending are Defendants' Motions to Dismiss and Plaintiffs' Motion to Remand. Also pending is Defendants' Belva Coal, Belva Acquisition, and Charles Stevens Robinson's Motions to Adopt. The Court GRANTS Plaintiff's Motion to Remand and DENIES Defendants' motions without prejudice.
Originally, the Complaint was filed in the Circuit Court of Logan County. It named the following defendants: Paul Sturgill, William B. Sturgill, Charles Steven Robinson, Ross Kegan, Belva Coal Co., Belva Coal Acquisitions Inc., and Golden Oak Mining.
Paul Sturgill was served with the Complaint on January 12, 1996. Defendants Belva Coal Co. and Belva Coal Acquisition were served on March 8. On April 16, Belva Coal, Belva Acquisitions and Charles Steven Robinson, who had not yet been served, removed the case to this Court.
Defendants Golden Oak Mining and William B. Sturgill were served with the Complaint on May 28. Defendant Charles Steven Robinson appears to have been served on June 8. On June 20, Defendant William B. Sturgill timely filed a notice of removal in this Court. His notice of removal was joined, in writing, by counsel for all defendants. Jurisdiction to remove was based on Defendants' allegation that Plaintiffs' state law claims were pre-empted by ERISA and by Section 301 of the Labor Management Relations Act.
Plaintiffs countered that Defendants' removal procedure was defective and that the case must, therefore, be remanded. 28 U.S.C. § 1446(b) provides:
The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based ...
Section 1447(c) specifies two grounds for remand, one of which is a "defect in the removal procedure." An untimely removal notice or any "[f]ailure to comply with the requirements of § 1446(b) constitutes a `defect in removal procedure.'" Page v. City of Southfield, 45 F.3d 128, 131 (6th Cir.1995) (citations omitted).
On more than one occasion this Court has recognized that that "[r]emoval statutes must be strictly construed against removal. Any doubts concerning the propriety of removal must be resolved in favor of retained state court jurisdiction." Scott v. Greiner, 858 F. Supp. 607, 610 (S.D.W.Va. 1994) (Haden, C.J.) (citations omitted). "As a creature of statute, removal comes with statutory procedures and requirements that are mandatory in nature." Henderson v. Holmes, 920 F. Supp. 1184, 1186 (D.Kan. 1996). Our Court of Appeals has observed:
the burden of establishing federal jurisdiction is placed upon the party seeking removal. Because removal jurisdiction raises significant federalism concerns, we must strictly construe removal jurisdiction.
Mulcahey v. Columbia Organic Chemicals Co., Inc., 29 F.3d 148, 151 (4th Cir.1994) (citations omitted).
While the removal statute does not require expressly, it is well established that "all defendants must join in the petition for removal." Gibson v. Tinkey, 822 F. Supp. 347, 348 (S.D.W.Va.1993); Means v. G & C Towing, Inc., 623 F. Supp. 1244 (S.D.W.Va. 1986). Here, all defendants purported to *478 join in William Sturgill's June 20 removal petition, which was filed within thirty days after he was served. It also appears Defendants Charles Steven Robinson, Golden Oak Mining, and Charles Steven Robinson joined in the William Sturgill removal petition within thirty days of service upon them. The Court has not been able to determine the date of service, if any, upon Ross Kegan. The three remaining defendants, however, did not remove, consent or join in a removal petition within thirty days of service upon them.
The question to be decided is whether the three defendants, who ignored the time limitations of 28 U.S.C. § 1446(b), can preserve this removal by joining in the removal notice of the last served defendant, who abided by the statute. The Court holds they cannot and remand is required.
There is a split among the circuits about when the § 1446 clock starts ticking for removal in multi-defendant actions. Our Court of Appeals, in determining whether the thirty day limit on removal begins to run with the first service in a case in which there are defendants served on different days, stated:
The issue is whether B has thirty days from the time he himself is served to join the removal petition, or must join within thirty days of A's service.
McKinney v. Bd. of Trustees of Mayland Community College, 955 F.2d 924, 926 (4th Cir1992) (citation omitted). The majority of courts have found "the thirty day period for removal commences for all defendants when service is accomplished on the first-served defendant." Henderson v. Holmes, supra, 920 F.Supp. at 1188 n. 3. Our Court of Appeals, however, rejected this "first served controls" rule.
The Fourth Circuit "to be fair to both plaintiffs and defendants alike," McKinney, 955 F.2d at 927, adopted the reasoning of the district court:
[U]nder the [first served controls rule], the rights of the defendants generally could rather easily be overcome by tactical maneuvering by plaintiffs. Suppose, for example, plaintiff serves defendant A, thus starting the thirty day period running, and then maneuvers to serve defendant B late on the thirtieth day. Obviously B is unlikely to rush to the courthouse door before it closes to file his joinder of A's removal petition; he is unlikely to even realize what is happening to him before it is too late.... This cannot be what Congress had in mind.
Id. at 928. The Court of Appeals pointed out that Congress amended § 1446(a) in 1988 to make removal petitions subject to Rule 11 of the Federal Rules of Civil Procedure:
As amended, section 1446(a) is further reason to allow all defendants a full thirty days to investigate the appropriateness of removal. Otherwise later served defendants will either have to forgo removal or join hurriedly in a petition for removal and face possible Rule 11 sanctions. Congress surely did not intend to impose such a Hobson's choice on later served defendants.
Id.
Although the Fourth Circuit rejected the "first served controls" rule, it clearly did not go so far as to adopt the still more liberal rule suggested by Defendants, which would allow parties who missed their opportunities to file notices of removal then to join in a later served defendant's timely removal.[1] Indeed, the plain language of McKinney's holding precludes such a result:
[W]e hold that under 28 U.S.C. § 1446(b), individual defendants have thirty days from the time they are served with process or with a complaint to join in an otherwise valid removal petition.
Id.[2] The only court in the Fourth Circuit to interpret McKinney in a case analogous to *479 this one found that a later joined defendant is bound by the inaction of previously served defendants. Beasley v. Goodyear Tire & Rubber Co., 835 F. Supp. 269, 273 (D.S.C. 1993). In Beasley, the issue was whether the original defendant's:
failure to remove within the statutory time period bound the added defendant, thereby preventing the removal of this case. As seen below, this court determines that the failure of [the original defendant] to remove during the original thirty day time period is deemed a waiver of the right of removal which is binding on [the added defendant].
Id. at 271. Relying on McKinney, the Beasley Court found that since the original defendant "did not petition for removal within the statutory thirty day period, the case may not be removed." Id. at 272.
That holding not only follows the clear language of McKinney, but it is also consistent with McKinney's concern for fairness to defendants. A central concern of the McKinney Court was that the majority rule, the so-called "first served controls" rule, creates a situation in which tactical maneuvering by Plaintiff may be able to defeat defendants' right of removal. Under a strict application of the first served rule, a plaintiff could thwart a subsequently served defendant's right of removal by delaying service of additional defendants until more than thirty days after service of the previously served defendant. Under that rule, a subsequently served defendant cannot join in a removal petition more than thirty days after the first served defendant is served, even if the first served defendant timely removed the case. The Beasley Court's ruling will not allow such maneuvering to defeat any defendants' right of removal because, under Beasley, each defendant has the right to file a notice of removal within thirty days of being served. By allowing each defendant thirty days to decide whether to remove, the Beasley decision also satisfies McKinney's Rule 11 concerns because no defendant is forced, under Beasley, to join hurriedly in a removal petition.
Thus, according to Fourth Circuit precedent, each of the seven defendants in the instant action was accorded the opportunity to remove within thirty days of service, but, at best, only four of them filed, joined or consented to timely removal notices. Consequently, the three defendants who did not file timely notices of removal may not join now in William B. Sturgill's removal petition after failing to act seasonably themselves. Accordingly, the action is REMANDED pursuant to 28 U.S.C. § 1447(c) because of a defect in the removal procedure.
The Clerk is directed to send a copy of this Memorandum Opinion and Order to counsel of record and to the Clerk of the Circuit Court of Logan County, West Virginia.
NOTES
[1] It appears the only court to reach such a conclusion is a California district court which held that although a defendant who fails to remove a case within thirty days of service "may have waived its right to do so, there is no compelling reason for precluding it from joining in or consenting to another defendant's removal." Ford v. New United Motors Mfg., Inc., 857 F. Supp. 707, 710-11 (N.D.Cal.1994). That holding, however, is in direct conflict with Fourth Circuit law.
[2] An Illinois District Court noted the majority of courts "have adopted the single date of removal rule, with Section 1446(b)'s 30-day time clock beginning to run with the service of the first defendant entitled to remove." Scialo v. Scala Packing Co., Inc., 821 F. Supp. 1276, 1277 (N.D.Ill.1993). The Scialo Court based its rejection of the majority rule on the Fourth Circuit's McKinney opinion, and observed that although McKinney disagreed with the strict application of the "first served controls" rule:
it did not approve what has been tried by the Commonwealth here the starting up of an entirely new time clock by a previously unserved defendant well after the time for removal had lapsed as to numerous other defendants. Instead McKinney permitted an eleventh defendant one who had been served less than a week before the initial 30-day period ran out to join an otherwise timely notice of removal by ten other defendants.
Id. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511521/ | 595 S.W.2d 434 (1980)
L. S. DOUGLAS, Plaintiff-Appellant,
v.
Harold W. HOEH, Sheriff of St. Louis County, and Reliance Insurance Companies, Defendants-Respondents.
Nos. 39983, 39984.
Missouri Court of Appeals, Eastern District, Division Four.
February 19, 1980.
*435 Raymond Howard, Jr., St. Louis, for appellant Douglas in Case No. 39983 and for respondent Douglas in Case No. 39984.
Don R. Williams, Associate County Counselor, Thomas W. Wehrle, St. Louis County Counselor, Clayton, for appellants Hoeh and Reliance Ins. Co. in Case No. 39984.
*436 SATZ, Judge.
This is an action for damages against a sheriff and the surety on his bond for the making of a false return.
In Count I of a two Count petition, plaintiff L. S. Douglas sued defendant Harold W. Hoeh, for actual and punitive damages on the alleged grounds that defendant Hoeh, as Sheriff of St. Louis County, had made a false return to the service of summons and petition in another lawsuit, which caused a default judgment to be entered in that suit against plaintiff, without notice to him. In Count II, plaintiff alleged defendant Reliance Insurance Companies[1] was Sheriff Hoeh's bonding company and, thus, was vicariously liable for the acts of the Sheriff. Plaintiff obtained a jury verdict for actual damages in the amount of $10,000.00 against both defendants. In their joint motion for a new trial, defendants asserted, among other things, that the verdict was against the weight of the evidence and that the verdict directing instruction against each defendant was prejudicially erroneous. The trial court sustained defendants' motion for a new trial on the grounds that the verdict as to damages was against the weight of the evidence, granted a new trial on the issue of damages only and overruled defendants' motion in all other respects.
Plaintiff appeals, contending, in several different arguments, that the trial court erred in setting aside the verdict as to damages. Defendants also appeal, contending, among other things, that plaintiff's verdict directing instructions were prejudicially erroneous. Finding defendants' arguments against plaintiff's verdict directing instructions to have merit, we reverse and remand on that ground and, thus, do not reach plaintiff's arguments against the trial court's order granting a new trial on damages only. We discuss those facts pertinent to our decision and we discuss such other points raised that are likely to arise on retrial.
According to plaintiff's evidence, he and a Sonja Douglas were married in 1960, and they were divorced in 1972. In April, 1975, a default judgment was entered against plaintiff and Sonja in the Magistrate Court of St. Louis County. The return to the summons in that case showed that a deputy sheriff employed by defendant Hoeh had served plaintiff by leaving a copy of the summons at plaintiff's "usual place of abode . . . with a member of his family over the age of fifteen years, . . . his mother-in-law . . .". That service was obtained at 10631 Linnell, St. Louis County, the home of plaintiff's ex-mother-in-law. However, plaintiff's evidence showed that, at the time of the service of summons, he was living at his home in the City of St. Louis, that he was on unfriendly terms with his ex-mother-in-law and that he had never lived at or even been inside the Linnell residence of his ex-mother-in-law. In addition, plaintiff's ex-mother-in-law did not recall being served with a summons, for either her daughter, Sonja, or plaintiff.
Basing his theory of recovery on the filing of a false return, plaintiff's verdict director against defendant Hoeh, Instruction No. 3, required a finding for plaintiff, if the jury believed:
"First, a Sheriff's deputy did not serve a summons upon plaintiff or a member of his household, and
Second, a Sheriff's deputy made a false return, and
Third, plaintiff was thereby damaged."
Plaintiff's verdict director against defendant Reliance Insurance Company, Instruction No. 4, was identical to Instruction No. 3 with the added finding:
"Fourth, defendant Reliance Insurance Company was the holding company of defendant Hoeh."
Defendants contend these instructions do not properly submit the ultimate facts upon which the jury could find the return in issue to be false. Stated otherwise, defendants argue that these instructions fail to give *437 the jury any real direction but, on the contrary, give the jury a "roving commission" to speculate and determine, on their own, why and in what manner the return was false. We agree.
There is no applicable MAI instruction for the charge of a false return, and, thus, a verdict directing instruction must be drafted in compliance with Rule 70.02(e), which provides that such "an instruction shall be simple, brief, impartial, free from argument, and shall not submit to the jury or require findings of detailed evidentiary facts". In general, the instructions in question meet these requirements. However, the instructions still must be unambiguous and clear to a reasonably intelligent jury, e. g., Wims v. Bi-State Development Agency, 484 S.W.2d 323, 325 (Mo. banc 1972), and the instructions still must tell the jury what ultimate facts have to be determined in order for the jury to return its verdict. See e. g., R-Way Furniture Co. v. Powers Interiors, Inc., 456 S.W.2d 632, 639 (Mo.App.1970). The instructions in question fail to meet the latter requirements.
As noted, plaintiff's theory of recovery was based upon the filing of a false return. A false return has been defined as "a return to a writ made by a ministerial officer in which is stated a fact contrary to the truth and injurious to a party having an interest in it". State v. Morant, 266 S.W.2d 723, 726 (Mo.App.1954). Thus, a cause of action based upon a false return has three basic elements: (1) the true facts, (2) a misstatement of those facts in the return, and (3) injury resulting from the misstatement of the true facts. A proper verdict directing instruction must, at least, submit the ultimate facts which define these elements. Applying this pattern to the instant case, the plaintiff's verdict directing instructions must, at least, require the jury to find first, the deputy sheriff did not serve summons in a defined manner,[2] (the "true" facts according to plaintiff's evidence), and, second, the deputy sheriff made a return that he did serve summons in the manner defined in the first paragraph (a misstatement of facts in the return contrary to the "true" facts) and, third, plaintiff was thereby damaged. See Moore v. Securities Credit Co., 475 S.W.2d 430, 433 (Mo.App.1971). Under such a submission, if the jury finds the return describes conduct contrary to the conduct that it finds actually took place, the jury is compelled to conclude the return was false. Obviously, a finding of what conduct was stated in the return is an essential pre-requisite to a determination of whether that conduct differed from the conduct that actually took place. But plaintiff's instructions failed to submit this essential finding to the jury and, thus, the instructions failed to instruct the jury on the ultimate facts essential to the jury in reaching its verdict. Without this submission, the jury was given no effective direction, but, rather, was given a roving commission to consider whatever facts they pleased in order to reach their determination that the return was false. Therefore, we find plaintiff's verdict directing instructions to be erroneous. E. g., Vasquez v. Village Center Inc., 362 S.W.2d 588, 595-6 (Mo.1962); Moore v. Quality Dairy Co., 425 S.W.2d 261, 266 (Mo.App.1968).
To counter this reasoning, plaintiff contends that in State v. Morant, supra, we approved an instruction similar to the present instructions. Plaintiff's reliance on the Morant case is misplaced. In Morant, a *438 deputy constable stated in his return that he served a summons on a member of plaintiff's family over the age of fifteen years, but plaintiff's evidence showed that the member of the family served, a son, was fourteen years old. Plaintiff's verdict director required the jury to find, among other facts, that the deputy constable "did not serve summons upon a member of [plaintiff's] family as stated in his return to said Magistrate Court" (emphasis added). Id. at 727. Thus, as can easily be seen, this instruction is similar to the form of instruction previously discussed in this opinion and it differs from plaintiff's verdict directing instructions because it properly requires the jury to determine, as one of its findings, what manner of service was reported in the return.
Plaintiff also argues that to cure the defect in issue would require him to submit detailed evidentiary facts contrary to Rule 70.02(e). In addition, plaintiff argues there was no need to define "false return" because "the jury was fully informed as to what a sheriff's return is" and "false" is a commonly understood word; or, alternatively, plaintiff argues that if the term "false return" required greater definition, defendants were required to offer an appropriate definition instruction.
These arguments misconceive the defect in issue. The instructions in question were not insufficient in detail or in definition of terms. For example, there was no need, and it may well have been improper, for plaintiff to submit specific facts pertaining to his divorce or his unfriendly relationship with his ex-mother-in-law as a pre-requisite finding to a finding that service was not had on a "member of [plaintiff's] household". Moreover, there was no real need for plaintiff to use the term "false return" in his verdict directing instructions. As can be seen from our previous discussion of an acceptable form of instruction, the term "false return", in and of itself, is not essential and, perhaps, may not even be necessary to a proper submission and, thus, that term need not be used in the instructions. What was needed and what plaintiff failed to submit to the jury was the description of the conduct reflected in the return. Such a submission would not be a submission of unnecessary evidentiary detail; rather, on the present record, it would be a submission of an ultimate fact. Admittedly, our courts have been unable to fashion precise, universally applicable definitions which explicitly differentiate evidentiary facts from ultimate facts and, thus, on a case by case basis, we determine "what [are ultimate facts] which must be submitted in a verdict directing instruction and what are evidentiary facts which, in detailed fashion, are not to be included . . .". Penberthy v. Penberthy, 505 S.W.2d 122, 130 (Mo.App.1973). In the instant case, our analysis of plaintiff's theory and his instructions demonstrates that the deputy sheriff's conduct as described in the summons is an essential ultimate fact which must be submitted to the jury. Plaintiff's failure to submit this essential ultimate fact made his instructions erroneously misleading, and defendants had no duty to correct plaintiff's erroneous and misleading instructions in order to preserve their objections. Van Brunt v. Meyer, 422 S.W.2d 364, 369 (Mo.App.1967).
Since there is no applicable MAI instruction for a false return, the error in the instructions in question is not presumptively prejudicial as it would be if the instructions had deviated from an applicable MAI instruction. Cf. Brown v. St. Louis Public Service Co., 421 S.W.2d 255, 259 (Mo. banc 1967); see also, Rule 70.02(c). Rather, the general rule controls, which places the burden of showing prejudice upon defendants. Nibler v. Coltrane, 275 S.W.2d 270, 277 (Mo.1955); Van Dyke v. Major Tractor & Equipment Co., 557 S.W.2d 11, 13 (Mo.App.1977). Defendants carried this burden. The instructions in question gave the jury a roving commission. Without direction, these instructions were, at best, misleading and confusing and, therefore, prejudicial. E. g., Todd v. Watson, 501 S.W.2d 48, 49-50 (Mo.1973); Dick v. Scott Const. Co., 539 S.W.2d 688, 691 (Mo.App.1976); Moore v. Quality Dairy Co., supra at 266. Accordingly, we reverse and remand.
*439 Having disposed of plaintiff's arguments,[3] we now discuss those issues which may come up again on retrial.
Section 506.150 RSMo 1978 defines the proper method for serving summons and a petition, and this statute requires that service be had on a defendant personally or by leaving a copy of the summons and petition at the defendant's "dwelling house or usual place of abode with some person of his family over the age of fifteen years . . ." (emphasis added). In the instructions in question, plaintiff uses the phrase "a member of his household" rather than "some person of his family". Defendants argue this substituted phrase incorrectly advised the jury as to what constitutes valid service of process and, therefore, the instruction misled the jury.
The word "family", as used in the predecessor statute to § 506.150 RSMo 1978, has been defined as "a collective body of persons who live in one house, under one head or manager, including parents, children, and servants, and, as the case may be, lodgers or boarders" (emphasis added), Colter v. Luke, 129 Mo.App. 702, 108 S.W. 608, 609 (Mo.App.1908), and this definition has not been changed. Arguably, under this definition, to permit service of process on "a member of the household" may more accurately reflect the real meaning of the statute than literal compliance with the statute which would permit service on "some person of [the] family", even though that person did not live in the household. For example, if a relative while temporarily visiting your home were served with process intended for you, the service would be proper under a literal interpretation of the statute, but, under the meaning given to the term "family" by the court in the Luke case, this service would be improper. L. J. Mueller Furnace Co. v. Dreibelbis, 229 S.W. 240, 242 (Mo.App.1921). Thus, on the facts of the instant case, it may not have been error to use the phrase "member of the household". However, in actions based upon a statutory violation, like the instant case, we believe it better practice to couch the verdict directing instruction in the language of the statute as much as sense and reason permits. See Rooney v. Lloyd Metals Products Co., 458 S.W.2d 561, 570 (Mo.1970); Miles v. Gaddy, 357 S.W.2d 897, 902 (Mo. banc 1962).
Defendants next complain that plaintiff added a paragraph to his punitive damage instruction, Instruction No. 6, in which the word "malice" is defined for the jury. Instruction No. 6 was patterned after MAI 10.01 and reads:
"If you find the issues in favor of plaintiff, and if you believe the conduct of defendant as submitted in Instruction Nos. 3 and 4 was willful, wanton, or malicious, then in addition to any damages to which you find plaintiff entitled under Instruction No. 5, you may award plaintiff an additional amount as punitive damages in such sum as you believe will serve to punish defendant and to deter him and others from like conduct.
The word `malice' as used in this instruction, does not mean hatred, spite, and ill will, as commonly understood, but means the doing of a wrongful act intentionally without just cause or excuse."
Contrary to defendants' complaint, it was proper to add the definition of "malice" to this instruction, where, as here, that term is used only in that instruction. Notes on Use, MAI 16.01.
Defendants also contend that it was improper for plaintiff to refer to both verdict directing instructions, Instructions No. 3 and 4, in this one punitive damage instruction. Defendants' arguments in support of this contention are neither clear nor explicit. However, we are aware that in Breece v. Jett, 556 S.W.2d 696, 711 (Mo.App.1977), *440 in which the defendant was charged in two separate counts with seduction and conversion, we stated that it was error to submit one punitive damage instruction on both counts because the jury may have found the defendant's conduct malicious on only one of the two counts. In the present case, Instruction No. 6, plaintiff's punitive damage instruction, does refer to two different verdict directing instructions and, thus, indirectly does refer to two different Counts. But plaintiff's instruction differs from the instruction in the Jett case because plaintiff's instruction refers to only one course of conduct, and the instruction in the Jett case refers to two separate and distinct courses of conduct. Nonetheless, plaintiff's instruction may be somewhat confusing because it simply refers to the "conduct of the defendant". Since the specific conduct in issue is the conduct of a deputy sheriff, who is not a defendant and, in addition, since there are two defendants in this case, the plaintiff, on retrial, should more precisely define whose conduct is being referred to in his punitive damage instruction.
We point out one other matter which was only indirectly referred to by defendants. Various verdict forms were given to the jury, and, without reciting their content, the forms, as submitted, permit the jury to return a verdict for punitive damages against defendant Reliance Insurance Companies without returning a verdict for punitive damages against defendant Hoeh. The present record would not support such a verdict.
The order of the trial court denying defendants' motion on the issue of improper verdict directing instructions is reversed and the cause remanded.
DOWD, P. J., and CRIST, J., concur.
NOTES
[1] This corporate defendant is referred to throughout the entire record by all parties, interchangeably, as "Reliance Insurance Companies" and/or "Reliance Insurance Company".
[2] As previously noted, plaintiff elicited testimony from the deputy sheriff that he had served the summons and petition on plaintiff's ex-mother-in-law at her Linell address, but plaintiff, also, elicited testimony from his ex-mother-in-law that she had not been served any summons at all. Plaintiff's verdict directing instructions can be sensibly read to encompass the testimony of either or both of these witnesses, i. e., that the return states a fact contrary to the truth because (1) there was no service in the manner reported or (2) there was no service at all. Thus, these instructions do not specifically indicate which of the two factual bases plaintiff actually chose to submit to the jury in support of his theory. Defendants do not complain about this apparent inconsistent testimony nor do they suggest a choice had to be made between these two set of facts. Thus, we do not comment on the questions which may have been raised about these circumstances.
[3] In the instant case, plaintiff's failure to submit essential ultimate facts cannot be cured by implying those facts from other required findings, see e. g., Milliken v. Trianon Hotel, 364 S.W.2d 71, 75 (Mo.App.1962), nor by reference to evidence in the record supporting such a finding, Vasquez v. Village Center, Inc., 362 S.W.2d 588, 595-596 (Mo.1962), nor by argument of counsel, Snyder v. Chicago Rock Island & Pacific Railroad Co., 521 S.W.2d 161, 165 (Mo.App.1973). Understandably, plaintiff did not raise these arguments. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511499/ | 484 Pa. 240 (1979)
398 A.2d 1359
COMMONWEALTH of Pennsylvania
v.
Samuel CAIN, Appellant.
Supreme Court of Pennsylvania.
Argued November 14, 1978.
Decided March 14, 1979.
*241 *242 David Rudovsky, Philadelphia, for appellant.
Robert B. Lawler, Chief, Appeals Div., Gaele McLaughlin Barthold, Philadelphia, for appellee.
Before EAGEN, C.J., and O'BRIEN, ROBERTS, NIX, MANDERINO and LARSEN, JJ.
OPINION OF THE COURT
NIX, Justice.
Appellant, Samuel Cain, was arrested, indicted and charged with murder, voluntary manslaughter, involuntary manslaughter and various weapons offenses arising out of the fatal shooting of Jerome Moody, and the wounding of Anthony McFadden on Christmas Eve of 1974. Following a jury trial, appellant was convicted of murder of the first degree for the death of Mr. Moody and sentenced to life imprisonment. This direct appeal followed.[1]
*243 After review of the various contentions raised, we are satisfied that at least one of these objections requires the reversal of the judgment of sentence and necessitates the grant of a new trial. That assignment of error involves an instruction given by the trial court to the jury as to the nature of the state of mind required to establish the crime of voluntary manslaughter as defined in Section 2503(b) of the Crimes Code. 18 Pa.C.S.A. § 2503(b). Appellant's objection was addressed to the following statements by the court on the subject:
THE COURT: Now, do any of you have any questions? It is an area that lawyers have taken a long time to study and puzzle out. We're just asking you to certainly in addition to following the law, also to use your common sense, as I've stated before, as to what you think really happened here. You are to determine the facts.
JUROR NO. 11 (Indicating)
THE COURT: Yes.
JUROR NO. 11: Your Honor, the second part of the definition of voluntary manslaughter
THE COURT: Yes.
JUROR NO. 11: to my understanding it means that a person does not necessarily have to be in a state of rage. He can might appear calm cool and collected and still be unreasonable in his beliefs and therefore, commit voluntary manslaughter, am I right? In other words, does it have to follow immediately on the heels
THE COURT: I see your question very well, but it would be hard to justify, being calm, cool and collected and justify a killing under just because a person felt that a certain set of circumstances
MR. RUDOVSKY: May we see your Honor in chambers on that point?
THE COURT: Yes.
*244 After an extensive side bar discussion, the following statements were made:[2]
THE COURT: To answer your question directly, Mrs. Morrison.
The jury has to determine the circumstances as to whether they're reasonable or not and to whether there was any justification on the part of the defendant.
Now, for me it would be difficult for me to understand circumstances where somebody could cool and collectedly do something without showing rage, passion or something else. . . . I'm not telling you what it is but for it to be voluntary manslaughter, the second part that I've given you and I will read it again, still has to be connected with provocation, some and the response to the provocation. Somebody's provoked into doing something because of some reason that the jury may find and as a result of that, they become they're in such a rage the result is that they in such a state of rage or passion without time to cool, which places the accused beyond the control of his reason and impells him to do the deed.
*245 That's part of voluntary manslaughter the state of mind in which somebody would do something calm and collectedly, in my opinion, would be a state of malice that I've described before state of mind of malice. . . .
The traditional definition of voluntary manslaughter has required that the slaying spring from passion generated by legal provocation. Commonwealth v. Nau, 473 Pa. 1, 8 n. 5, 373 A.2d 449, 452 n. 5 (1977); Commonwealth v. Harris, 472 Pa. 406, 408-09, 372 A.2d 757, 758-59 (1977); Commonwealth v. Light, 458 Pa. 328, 326 A.2d 288 (1974); Commonwealth v. McCusker, 448 Pa. 382, 292 A.2d 286 (1972); Commonwealth v. Komatowski, 347 Pa. 445, 453, 32 A.2d 905, 908 (1943); Commonwealth v. Jennings, 442 Pa. 18, 274 A.2d 767 (1971); Commonwealth v. Flax, 331 Pa. 145, 200 A. 632 (1938); Commonwealth v. Miller, 313 Pa. 567, 569, 170 A. 128 (1934); Commonwealth v. Principatti, 260 Pa. 587, 104 A. 53 (1918); Commonwealth v. Colandro, 231 Pa. 343, 80 A. 571 (1911). We have also long recognized that a killing is not a malicious one when it is accomplished without malice, but rather inspired because of a mistaken belief that facts of justification existed. See Commonwealth v. Nau, supra; Commonwealth v. Mitchell, 181 Pa.Super. 225, 124 A.2d 407 (1956). The common element under either theory is the absence of malice. In the former instance, the finder of fact must conclude that the passion was the motivating force and in the latter, the act is impelled by the mistaken perception of the situation. Under either theory, the jury must be satisfied that the death was not a consequence of the actor's hardness of heart or a careless disregard of human life. Commonwealth v. Drum, 58 Pa. 9 (1868).
Voluntary manslaughter often so nearly approaches murder, it is necessary to distinguish it clearly. The difference is this: manslaughter is never attended by legal malice or depravity of heart that condition or frame of mind before spoken of, exhibiting wickedness of disposition, recklessness of consequence or cruelty. Being sometimes a wilful act (as the term voluntary denotes) it is necessary that the circumstances should take away *246 every evidence of cool depravity of heart or wanton cruelty.
Id. at 17.
Where an accused seeks to reduce the crime from murder to manslaughter under the theory of a mistaken belief of the existence of facts that would have justified the killing had those facts actually existed, the critical question for the jury to decide is whether the facts as perceived by the accused in fact would have provided justification for the use of deadly force. To meet this requirement the mistaken belief must justify the conclusion that the actor is in imminent danger of death and that there is a necessity to use the deadly force in order to save himself. Commonwealth v. Light, 458 Pa. 328, 326 A.2d 288 (1974); Commonwealth v. Pride, 450 Pa. 557, 301 A.2d 582 (1973); Commonwealth v. Zapata, 447 Pa. 322, 290 A.2d 114 (1972).
In this case, appellant argued alternatively that the facts, as he perceived them, justified the use of deadly force in the defense of his own life. In determining the applicability of section 2503(b) to such a situation, the jury was required to examine the appellant's alleged perception of the facts in light of the standard provided by Chapter 5 of the Crimes Code and, specifically, section 505, 18 Pa.C.S. § 505 (1972).[3] There is nothing in the criteria announced under § 505 or generally in Chapter 5 which requires that the actor be motivated by passion. A response involving deadly force is justified where the actor reasonably believes that he is in imminent danger of death and concludes that such force is necessary to protect himself from it. Commonwealth v. Cropper, 463 Pa. 529, 345 A.2d 645 (1975); Commonwealth v. Bamber, 463 Pa. 216, 344 A.2d 799 (1975); Commonwealth v. Mahoney, 460 Pa. 201, 331 A.2d 488 (1975); Commonwealth v. Wrona, 442 Pa. 201, 275 A.2d 78 (1971); Commonwealth v. Roundtree, 440 Pa. 199, 269 A.2d 709 (1970); Commonwealth *247 v. Johnston, 438 Pa. 485, 263 A.2d 376 (1970); Commonwealth v. Capalla, 322 Pa. 200, 185 A. 203 (1936).[4] The only difference in the case of 2503(b) is that the belief is not a reasonable one. In neither case is there an additional requirement that the actor must act out of passion.
We believe that the court's instruction on this point was fatally erroneous because it could have been reasonably interpreted as requiring a showing that the impending threat against the life of the actor generated a passion within the actor and that the slaying resulted from this passion. To the contrary, all the law requires is that the slaying be in response to the impending threat and in an effort to thwart it. The confusion exhibited in the trial judge's response resulted from the failure to distinguish between an emotion and the passion that may be engendered by the presence of that emotion. While we have frequently framed the test for justification in terms of an emotion such as fear or apprehension of imminent danger of death or great bodily harm, we have never intended to indicate thereby that the emotion must be so compelling that the mind is incapable of reason. However, passion, as we have used it in this context, requires not only the presence of the emotion but also requires that it reach such an intensity that the mind is rendered incapable of cool reflection. Commonwealth v. Harris, supra, 472 Pa. at 408-09, 372 A.2d at 759:
Passion includes any emotions of the mind known as anger, rage, sudden resentment or terror, rendering the mind incapable of cool reflection. See Commonwealth v. McCusker, 448 Pa. 382, 292 A.2d 286 (1972); Commonwealth v. Jennings, 442 Pa. 18, 274 A.2d 767 (1971); *248 Commonwealth v. Flax, 331 Pa. 145, 200 A. 632 (1938); Commonwealth v. Colandro, 231 Pa. 343, 80 A. 571 (1911).
The gravamen of the error in the trial judge's instruction was that the test he provided to the jury required not only that the actor possess the emotion of fear or apprehension but also required a finding that, that fear or apprehension reach such an intensity as to block cool reflection. In so doing, he removed the distinction between voluntary manslaughter as defined under section 2503(a) and that defined under section 2503(b). Restated, under the trial court's formulation requiring the act to result from the passion, there would be no need for the legislature to have set forth section 2503(b). Obviously, if the facts as perceived would have provided justification for the use of deadly force, it certainly would have met the test of sufficient provocation under section 2503(a). Therefore, if we required slayings under both section 2503(a) and 2503(b) to result from passion, section 2503(b) is rendered superfluous. The legislature cannot be deemed to intend that language used in a statute shall be superfluous and without import. See Masland v. Bachman, 473 Pa. 280, 291, 374 A.2d 517, 522 (1977); Daly v. Hemphill, 411 Pa. 263, 273, 191 A.2d 835, 842 (1963); St. Joseph Lead Co. v. Potter Tp., 398 Pa. 361, 157 A.2d 638 (1960); 1 Pa.C.S.A. § 1922(2) (Supp. 1976).
"It is an elementary rule of construction that effect must be given, if possible, to every word, clause and sentence of a statute." A statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant, and so that one section will not destroy another unless the provision is the result of obvious mistake or error.
Sutherland Statutory Construction, § 46.06 (4th ed. 1973) (Footnote omitted).
The distinction between section 2503(a) and section 2503(b) stems from the fact that although the actor is responding to the apprehension of or fear of the impending harm, the defense is not required to show that the degree of *249 intensity of that emotion rendered the mind incapable of cool reflection.
The fact that the court here read the statutory language of § 2503(b) to the jury did not correct the prejudice created by the court's confused response to the juror's request for additional instructions. It has long been the law of this Commonwealth that, although an instruction to the jury be correct in the abstract, if the instruction is misleading because of the manner in which the ideas are couched, the judgment may be reversed. See Pistorius v. Commonwealth, 84 Pa. 158, 161-62 (1877). Where a court gives two instructions, one erroneous and prejudicial and the other correct, reversible error occurs. Commonwealth v. Deitrick, 221 Pa. 7, 13-14, 70 A. 275 (1908); Commonwealth v. Gerade, 145 Pa. 289, 298, 22 A. 464 (1891); Rice v. Commonwealth, 100 Pa. 28, 32 (1882). Furthermore, the error committed by the court's response to the juror's request for additional instructions concerned a critical part of the case and cannot be disposed of as a matter of harmless error. See Chapman v. California, 386 U.S. 18, 87 S. Ct. 824, 17 L. Ed. 2d 705 (1967); Commonwealth v. Story, 476 Pa. 391, 383 A.2d 155 (1978). Here, the defense consisted of two alternative arguments: (1) that the killing was justifiable because appellant had the complete defense of self-defense, or (2) that appellant had an imperfect defense, i.e., the killing amounted to no more than voluntary manslaughter, because appellant killed the decedent under an unreasonable belief. Clearly, appellant's ability to prevail on the latter claim was compromised substantially as a result of the confused and incorrect instructions of the court.
Judgment of sentence is reversed and a new trial awarded.
POMEROY, former J., did not participate in the consideration or decision of this case.
LARSEN, J., notes his dissent.
NOTES
[1] Jurisdiction for this appeal is provided pursuant to Section 202(1) of the Appellate Court Jurisdiction Act of 1970. Act of July 31, 1970, P.L. 673, No. 223 art. II, § 202(1). 17 P.S. § 211.202(1) (Supp.) 1978-79. The non-homicide charges are not before us in this appeal.
[2] The following excerpts from the remarks of the trial court during the side bar conference reflect his confusion in this area:
THE COURT: I think you're Mr. Rudovsky, I think you're giving us a situation of a psychopathic personality who figures out very cooly that this is the right thing to do under the circumstances. And that would then make it voluntary manslaughter. I would say that that's sort of activity would would be should be brought up as part of the an insanity defense, I would say.
But I cannot conceive under voluntary manslaughter there being no provocation and no rage or passion. That's the essence of voluntary manslaughter. . . .
* * * * * *
THE COURT: Why the Legislature had to add that section and make it something that was never in the law before to make it completely idiotic I don't know. . . .
* * * * * *
THE COURT: I wish you success on appeal. I'm sure there are Justices in the Supreme Court that would understand the level that you think at that I do not. I have not risen that high yet. I'm still in I'm going to read that over again and tell them in my opinion that I feel that provocation and the response to it which would be rage or passion is also present in the reasonableness of the belief as to the circumstances which is something for the jury to determine if it's present or not . . . .
[3] We have previously noted that § 505 of the Crimes Code is substantially a codification of the common law of self defense as it has existed in this Commonwealth. See Commonwealth v. Walley, 466 Pa. 363, 367 n. 3, 353 A.2d 396, 398 n. 3 (1976); Commonwealth v. Cropper, 463 Pa. 529, 345 A.2d 645, 647 (1975).
[4] Of course, self defense is also dependent upon a finding that the slayer has been free from fault in provoking or continuing the encounter which resulted in the killing and that the slayer has not violated any duty to retreat or avoid the danger. See § 505(b), 18 Pa.C.S. § 505 (1972); Commonwealth v. Cropper, supra, 463 Pa. at 534 n. 3, 345 A.2d 645 and accompanying text. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511531/ | 595 S.W.2d 922 (1980)
TRANS-NEBRASKA CORPORATION et al., Appellants,
v.
CUMMINGS INCORPORATED, Appellee.
No. A2306.
Court of Civil Appeals of Texas, Houston (14th Dist.).
March 19, 1980.
Paul J. McConnell, III, DeLange, Hudspeth & Katz, Houston, for appellants.
William A. Petersen, Jr., Lapin, Totz & Mayer, Houston, for appellee.
Before BROWN, C. J., and MILLER and PRESSLER, JJ.
PAUL PRESSLER, Justice.
This is an appeal from a judgment granting $10,000.00 damage for the conversion of appellee's sign by appellants.
On or about April 17, 1973, appellee entered into a Display Lease Agreement with Century II, a general partnership. Pursuant thereto, appellee agreed to construct, install, and maintain a double-faced, two-pole pylon advertising display sign for Century II and to lease it to them. Appellee executed two financing statements on the sign naming Cummings & Company as the secured party and Century II as the debtor. One financing statement was filed in the UCC Records of Harris County, Texas, and the other in the Secretary of State's office of the state of Texas, pursuant to Tex.Bus. *923 & Com.Code Ann. § 9.401(a) (Tex.UCC) (Vernon 1968) (the Code) which was then in effect. The signs described in the Display Lease Agreement were then erected. On May 6, 1975, Houston Citizens Bank and Trust Company foreclosed its lien on the real estate upon which the sign was located. At the foreclosure sale this bank acquired title to the real estate. In July 1975, appellant Trans-Nebraska Corporation, as general partner for the other appellant, Continental America, R. E. Ltd. (both defendants below), entered into an agreement to purchase the real estate from the bank. On October 3, 1975, the purchase was completed and a deed was recorded. The sign was in place at the time of this sale. In November of 1976, appellee brought suit for conversion of the sign. The case was heard without a jury. The trial court concluded that title had not passed to appellants upon their purchase of the realty and appellants had, therefore, converted appellee's sign to their own use. The court awarded ownership of the sign to appellants and damages to appellee. The court then entered findings of fact and conclusions of law at the request of appellants in which it found that appellants were purchasers of the real estate for value, that appellants did not receive actual notice of appellee's interest in the signs until July 1975, and that the advertising display was fixed to the real property in question but could be removed easily. Based on these findings, appellants contest the court's judgment, contending that 1) the advertising display was in fact a fixture, as that term was used in § 9.313 of the Code, 2) the financing statements, therefore, did not comply with § 9.402(a) of the Code and were invalid, 3) as the financing statements were invalid, appellee failed to perfect its security interest in the advertising display, and 4) as appellants were subsequent purchasers for value of the realty and the sign had become part of the realty, their lien had priority over appellee's according to § 9.313(d) of the Code, and title to the advertising display thus passed to appellants along with title to the real estate.
Appellants contend that "fixed" means "permanently affixed" and, therefore, pursuant to Finding of Fact No. 16, the sign had become a fixture. This interpretation would constitute a conclusion of law and such a conclusion was not made by the court. More than the mere annexing of personalty to realty is necessary to convert personalty to a fixture. "Fixed" in this context means merely that the sign was connected to the realty. The use of the word "fixed" does not, therefore, decide the question of whether the sign became a fixture. In their Motion for Additional Findings of Fact and Conclusions of Law, appellants requested the trial court to conclude that "[t]he sign in question was, at all relevant times, a fixture." The court failed to respond to this request, but appellants did not assign such failure as a point of error. Appellee contends that this failure to respond implies that the opposite proposition is true. Sauer v. Johnson, 520 S.W.2d 438 (Tex.Civ.App.Austin 1975, writ ref'd n. r. e.). We do not believe that this is the only fair conclusion to be drawn from such failure to respond.
It is well established that where a finding of fact is made on one or more of the elements of an ultimate issue, the failure of the court to make findings on the remaining elements does not require reversal of the judgment if there is sufficient evidence to support the omitted findings. In the case before us, the court found that the sign could be easily removed. The removability of an item has been held to be one of the facts which must be weighed in determining whether an item is a fixture. Bub Davis Packing Company, Inc. v. ABC Rendering Company of San Antonio, Inc., 437 S.W.2d 634 (Tex.Civ.App.Austin 1969, no writ).
The intent of the annexing party is the preeminent factor in determining whether personalty has become a fixture. Fenlon v. Jaffee, 553 S.W.2d 422 (Tex.Civ. App.Tyler 1977, writ ref'd n. r. e.). It is clear from the language of the Display Lease Agreement entered into by appellee and Century II that appellee intended the sign to remain personalty.
*924 The court concluded that appellee had properly perfected its security interest in the sign as personalty. Therefore, appellants had constructive notice of appellee's interest and claim.
Since the court had concluded that appellants converted the sign, its conclusion that appellee should recover $10,000.00 in damages was supported by the evidence.
Appellant next attacks the judgment on the basis of a letter written by the trial judge to the attorneys which stated as follows:
After listening to the evidence, reviewing the authorities, the Court is of the opinion that the Plaintiffs should recover on a quantum meruit theory of $10,000.00 for its sign, but the sign remains fixed to the property and title to said sign will pass to the defendants upon the payment of the judgment to be rendered in favor of the Plaintiffs.
Counsel will prepare the appropriate order for entry by the Court.
As appellee did not plead quantum meruit as a theory of recovery and no evidence was adduced at trial in support of certain elements of that theory, appellant argues that the judgment was improper as it was allegedly founded upon quantum meruit. However, the judgment itself makes no reference to quantum meruit, and it is the final judgment which is binding, not the letter, Dikeman v. Snell, 490 S.W.2d 183 (Tex.1973). The trial judge's letter falls into the same category of writings as an entry on a docket sheet which "cannot be used to contradict or prevail over a final judicial order." N-S-W Corporation v. Snell, 561 S.W.2d 798, 799 (Tex.1977). As the court concluded that appellants had converted the sign and such conclusion is supported by the evidence, the judgment is properly construed as resting on the theory of conversion.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511527/ | 136 F.2d 368 (1943)
STALEY
v.
COMMISSIONER OF INTERNAL REVENUE.
No. 10606.
Circuit Court of Appeals, Fifth Circuit.
June 15, 1943.
Rehearing Denied July 17, 1943.
*369 Charles C. Le Forgee, of Decatur, Ill., for petitioner.
Joseph M. Jones, Sewall Key, and J. Louis Monarch, Sp. Assts. to the Atty. Gen., Samuel O. Clark, Jr., Asst. Atty. Gen., and J. P. Wenchel, Chief Counsel, and Bernard D. Daniels, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., for respondent.
Before HUTCHESON, HOLMES, and WALLER, Circuit Judges.
HOLMES, Circuit Judge.
This petition brings for review a decision of the Board of Tax Appeals sustaining a deficiency assessment made with respect to the 1935 fiduciary income tax return of the executor of the A. E. Staley estate. The question for decision is whether the sum of $150,000, which was paid to Staley during the tax year from the income of certain trust estates created by him, was income or was a return of capital.
In 1934 Staley, who was chairman of the board of the A. E. Staley Manufacturing Company and owned over 80% of its common stock, created a trust for each of his five children and conveyed to each trust 6,000 shares of common stock and 2,000 shares of preferred stock of the corporation. It was Staley's intention to make an outright gift of the securities, but he discovered that the sum of the gift taxes to be incurred in connection with the gifts would exceed by approximately $150,000 the amount of cash he would have to pay such taxes. After considering several means by which he could secure this additional sum, he decided upon a plan to have each of the five trusts pay over to him, out of the trust income earned prior to the next succeeding tax-payment date, all of such income remaining after paying the operating expenses and trustee's fees, but such payment not to exceed $30,000. In the event that the income of the respective trusts should be inadequate to pay the full $30,000 prior to March 15, 1935, it was provided that such deficiencies should be made up out of the trust income earned thereafter.
This purpose was accomplished by inserting in each trust instrument a provision reciting that the use benefits under the trust were conveyed in consideration of the sum of $30,000, to be paid to the donor as mentioned. It is petitioner's contention that, by reason of this provision, the conveyances were not gifts but were sales of the securities for a purchase price of $150,000.
It is significant that in the trust instrument Staley referred to himself as the donor, and that, as found by the Board, he knew at the time the trusts were created that sufficient dividends would be declared upon the stock within the five months intervening before the succeeding March 15th to cover the $30,000 payments to him for each trust. The trusts were created on October 18, 1934, and the entire $150,000 in fact was paid over to the donor by March 4, 1935. Moreover, Staley filed a gift-tax return in connection with the transaction, paying a tax computed upon the full value of the securities transferred less the value of the withheld right to receive $150,000 of the income.
It is elementary that artificial language in an instrument of conveyance does not suffice to alter the tax significance of the substance of the transaction.[1] The realities of this arrangement are not difficult to ascertain. This was no sale for an inadequate consideration; it was intended to be, and actually was, a gift of the entire corpus and of all the income except *370 an amount necessary to assist in paying the gift taxes.[2] Expressed differently, it was an outright transfer for no consideration, but with a reservation to the donor of a portion of the income. It is immaterial for present purposes whether the transactions are regarded as gifts of all the corpus and all the income in excess of $150,000, or whether they are deemed to be gifts in trust with a reservation to the donor of a specified portion of the income. The substance is the same, and in either event the entire $150,000 was income taxable to the donor.[3] The Board of Tax Appeals reached this result, and its decision is
Affirmed.
WALLER, Circuit Judge (dissenting).
It seems to me that a father could make a partial sale and gift to his child with the understanding that the sale price could be paid out of the revenue from the property given and sold without it being said that he "retained the income" from the property, when the record shows that he did not retain it but conveyed it to the trustee who was required to collect the income and pay a portion as consideration for the sale and gift. For instance, a man might own real estate of the value of $10,000.00, against which there was an indebtedness of $1,000.00, which real estate he desired his son to have. I see no reason why he could not lawfully say to his son: "I will convey this property to you provided you pay the $1,000.00 indebtedness out of the first rents you receive from the property." The fact that the seller-donor of the property knew that the property was rented and would produce income sufficient to pay the indebtedness would not make him liable for the income therefrom merely because a debt was to be paid out of it especially when the income is devoted to the use and benefit of the cestui que trust in paying an indebtedness against his property.
In the case here under consideration the right to collect the income from the stock was not retained in the seller-donor but it was to be collected by the trustee and used to pay the $30,000.00 which was a part of the consideration for the gift and sale. The $30,000.00 which the trustee collected from the income of the trust estate was used for the purpose of clearing the indebtedness against the property of the cestuis que trust, and since the income was applied to the benefit of the cestuis que trust he should be charged with the tax thereon, and the seller-settlor should only be charged with the sum of $30,000.00 received in the disposition of a capital asset.
Entertaining these views, I respectfully dissent from the holding of the majority.
NOTES
[1] Lucas v. Earl, 281 U.S. 111, 50 S. Ct. 241, 74 L. Ed. 731; Minnesota Tea Co. v. Helvering, 302 U.S. 609, 58 S. Ct. 393, 82 L. Ed. 474; Griffiths v. Commissioner, 308 U.S. 355, 60 S. Ct. 277, 84 L. Ed. 319; Helvering v. Clifford, 309 U.S. 331, 60 S. Ct. 554, 84 L. Ed. 788; Helvering v. Horst, 311 U.S. 112, 61 S. Ct. 144, 85 L. Ed. 75, 131 A.L.R. 655.
[2] Cf. Griffiths v. Commissioner, 308 U.S. 355, 60 S. Ct. 277, 84 L. Ed. 319.
[3] Bettendorf v. Commissioner, 8 Cir., 49 F.2d 173; White v. Rose, 5 Cir., 73 F.2d 236; Fay v. Commissioner, 34 B.T.A. 662; Sec. 22(a), Revenue Act of 1934, 26 U.S.C.A. Int.Rev.Acts, page 669; Sec. 166, Revenue Act of 1934, 26 U.S.C.A. Int.Rev.Acts, page 727. Cf. Harrison v. Schaffner, 312 U.S. 579, 61 S. Ct. 759, 85 L. Ed. 1055. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511619/ | 939 F.Supp. 1115 (1996)
Barbara ANNIS, Plaintiff,
v.
COUNTY OF WESTCHESTER, Anthony M. Mosca and Ernest J. Colaneri, Defendants.
No. 93 Civ. 3487 (WCC).
United States District Court, S.D. New York.
September 5, 1996.
*1116 *1117 Lovett & Gould, White Plains, NY (Jonathan Lovett, of counsel), for Plaintiff.
Marilyn J. Slaatten, Westchester County Attorney, White Plains, NY (Theresa A. O'Rourke, Asst. County Attorney, of counsel), for Defendants County of Westchester and Ernest J. Colaneri.
Goodrich and Bendish, White Plains, NY (Bruce P. Bendish, of counsel), for Defendant Anthony M. Mosca.
*1118 OPINION AND ORDER
WILLIAM C. CONNER, Senior District Judge.
Following trial of the above-captioned case, the jury returned a verdict for plaintiff. Defendants Anthony M. Mosca ("Mosca"), former Commissioner of Westchester County Department of Public Safety (the "Department" or the "Westchester County Department"); Ernest J. Colaneri ("Colaneri"), present Commissioner of the Department; and the County of Westchester (the "County") have moved for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b), or for a new trial pursuant to Fed.R.Civ.P. 59, or for a remittitur. Plaintiff has applied for an award of attorney's fees and costs pursuant to 42 U.S.C. § 1988. For reasons discussed below, we deny defendants' motion[1] for judgment as a matter of law. We grant their motion for a new trial, solely on the issue of damages, unless plaintiff accepts a remittitur. Plaintiff's application for attorney's fees and costs is granted as modified below.
BACKGROUND
Plaintiff, a police officer employed by the County, commenced this lawsuit under 42 U.S.C. § 1983 claiming, inter alia, that defendants discriminated against her because of her gender in violation of her right to equal protection under the Fourteenth Amendment. Plaintiff's claims against defendant Mosca can be traced to the time that she was employed as a police officer by the Mount Vernon Police Department prior to joining the Westchester County Department. While plaintiff was a police officer at Mount Vernon, defendant Mosca was appointed Commissioner of that police department. Plaintiff left Mount Vernon in 1984, partly in order to distance herself from Mosca, and accepted employment with the Westchester County Department. Soon thereafter, Mosca became the Commissioner of the Westchester County Department and once again assumed a position of authority over plaintiff. According to plaintiff, the discriminatory practices committed by Mosca began at the time he became Commissioner of the Mount Vernon Police Department in 1981 and ran continuously through his tenure as Commissioner of the Westchester County Department. Mosca has since retired and was succeeded by defendant Colaneri, who presently holds that post. Plaintiff, currently a Lieutenant in the Department, alleged that (1) Mosca discriminated against her continuously from the time that she and Mosca were employed by Mount Vernon through the time that they served in the Westchester County Department, (2) Colaneri discriminated against her based on her gender during the time that she was employed by the County, and (3) the County caused discrimination to be committed against her by having a policy and practice of discrimination based on gender.
Following trial, the jury found for plaintiff, and awarded compensatory damages of $216,000 against the County, $1 against Colaneri, and $50,000 against Mosca, and punitive damages of $25,000 against Colaneri and $250,000 against Mosca.
DISCUSSION
On the instant motion, defendants seek three types of relief: judgment as a matter of law under Rule 50(b), a new trial under Rule 59, or a remittitur. The court may grant a motion for judgment as a matter of law where "there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue...." Fed. R.Civ.P. 50. "The standard for granting a motion for judgment [as a matter of law] pursuant to Rule 50(b) is whether the evidence, viewed in the light most favorable to the non-movants without considering credibility or weight, reasonably permits only a conclusion in the movants' favor." Jund v. Town of Hempstead, 941 F.2d 1271, 1290 (2d Cir.1991) (internal quotations omitted). A judgment as a matter of law is proper if "(1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer *1119 surmise and conjecture, or (2) there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded men could not arrive at a verdict against him." Id. In other words, judgment as a matter of law is reserved for the rare occasions when there is a complete absence of evidence to support the jury's verdict or the evidence is so overwhelming that a reasonable person could only have reached the opposite result. Sorlucco v. New York City Police Dept., 971 F.2d 864, 871 (2d Cir.1992).
The standard for granting a motion for a new trial is less stringent. Katara v. D.E. Jones Commodities, Inc., 835 F.2d 966, 970 (2d Cir.1987). "The district court ordinarily should not grant a new trial unless it is convinced that the jury has reached a seriously erroneous result or that the verdict is a miscarriage of justice." Smith v. Lightning Bolt Prods., Inc., 861 F.2d 363, 370 (2d Cir. 1988); see also Sorlucco, 971 F.2d at 875.
Defendants' third alternative request for relief is for a remittitur, which is "the process by which a court compels a plaintiff to choose between reduction of an excessive verdict and a new trial." Earl v. Bouchard Transp. Co., 917 F.2d 1320, 1328 (2d Cir.1990). On a motion for a remittitur, the standard is "whether the award is so high as to shock the judicial conscience and constitute a denial of justice." Ismail v. Cohen, 899 F.2d 183, 186 (2d Cir.1990). This standard applies to damage awards, whether compensatory or punitive. Id. If the district court elects to order a remittitur, it "should remit the jury's award only to the maximum amount that would be upheld by the district court as not excessive." Earl, 917 F.2d at 1330.
I. Judgment as a Matter of Law
Defendants seek judgment as a matter of law on the ground that there is no evidentiary basis on which a reasonable jury could conclude that (1) defendants violated plaintiff's right to equal protection, (2) plaintiff suffered any compensable injury, or (3) defendants Mosca and Colaneri acted with sufficient recklessness to warrant an award of punitive damages.[2]
A. Liability
Judgment as a matter of law is not warranted on the issue of liability because there is evidence to support the jury's finding that defendants violated plaintiff's constitutional right to equal protection. The evidence adduced at trial indicated that Mosca held a certain animus towards women in the police force. For example, plaintiff testified that he called her a "f_cking c__t," that he stated he was not "afraid of this women liberation s__t, or liberation bulls__t," and that he commented that he "never really believed in women being cops or women being in police work." Tr. 1428-1429. Plaintiff further testified that, during the seven years she served on the Mount Vernon Police Department, she was never taken off walking posts and placed in car posts for permanent assignments, even though male officers junior to her had been taken off walking posts and received permanent assignments. Tr. 1445-1446. She testified that she had complained about her walking post assignments to Mosca when he was Commissioner of the Mount Vernon Police Department to no avail. Id.
Plaintiff further testified that after leaving the Mount Vernon Police Department and joining the Westchester County Department, *1120 she was relegated to the sex crimes unit and prevented from working in other units within the Department. See Tr. 1477, 1499-1502. As a detective, she was trained in fingerprinting by practicing on dead bodies in the morgue, rather than on live bodies. Tr. 1765-1768. Plaintiff claimed that, while employed by the County, her name was unfairly removed from a promotion list for sergeant. Tr. 1509. When plaintiff eventually was promoted to sergeant, over four years after joining the Department, plaintiff still had not received her uniform, and had to wear a dress when she was sworn in, and during the first week of her training. Tr. 1513-1514, 1577. The County's failure to provide plaintiff with a police uniform for over four years also prevented plaintiff from participating in official overtime assignments. Tr. 1477. Also, plaintiff testified that Commissioner Mosca, and later Commissioner Colaneri, ignored her complaints of sexual harassment by others in the Department. See, e.g., Tr. 1531-1533.
There is also evidence in the record that plaintiff was singled-out in the Department because she is a woman. For example, plaintiff's initial request to work "sweep detail" at the Department a program for detectives to go out and pick up people for whom warrants were outstanding was denied. Tr. 1478-1480. Her rejection was accompanied by the statement "[n]o girls allowed." Tr. 1480. Also, in 1990 Colaneri (then-Deputy Commissioner of the Department) initiated an internal investigation against her for failing to salute him, even though male subordinates were not reprimanded when they failed to salute him. See Tr. 1489-1496, 1530, 1540-1542. Finally, plaintiff testified that she alone was prohibited from eating in the radio room at police headquarters in the Department. See Tr. 1524-1525, 1873. We believe that the evidence adduced at trial supports a finding by the jury that defendants discriminated against plaintiff because she is a female police officer. We therefore deny defendants' motion for judgment as a matter of law on the issue of liability.
B. Compensatory Damages
There is also evidence to support the jury's finding that plaintiff suffered emotional harm due to defendants' conduct. For example, plaintiff testified that she was "angry" and "humiliated" and "very upset" after being called a "f_cking c__t" and being told by Mosca not to "give any of this women's liberation s__t." Tr. 1428-1429. She further testified that she was "very angry and very humiliated" when she was ordered to have a desk sergeant put up her hair because she was unable to do so herself due to a broken hand. Tr. 1462-1463. Furthermore, while at Mount Vernon, the evidence supported a finding that, by order of Mosca, plaintiff was assigned the worst post available as a matter of practice. See Tr. 1467. In addition, plaintiff testified that in 1992, while employed by the County, her request for personal time off was cancelled at the last minute after being previously approved. See Tr. 1558. She was also unfairly deprived of one day of bereavement leave after the death of her grandfather. See Tr. 1566-1568, 1654-1660. Even after plaintiff became a lieutenant, she was "humiliated" and felt "degraded" by assignments to Yonkers Social Services, a position that had always been a sergeant's position. Tr. 1509.
Plaintiff did not seek medical or psychiatric treatment, but did seek, and continued to seek as of the time of trial, counseling to discuss her emotional distress. See Tr. 1871, 1930-1931. Based on the evidence adduced at trial, a reasonable fact finder could conclude that plaintiff suffered mental anguish and humiliation due to defendants' violation of her equal protection right guaranteed under the Constitution.
In sum, the evidence supports a finding that Colaneri and Mosca treated plaintiff differently because she is a woman and that they and the County caused injury to plaintiff by permitting discriminatory practices to be committed. Therefore, judgment as a matter of law is not warranted on the issue of compensatory damages.
C. Punitive Damages
Punitive damages may be awarded in a section 1983 case "when the defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless *1121 or callous indifference to the federally protected rights of others." Smith v. Wade, 461 U.S. 30, 56, 103 S.Ct. 1625, 1640, 75 L.Ed.2d 632 (1983). Viewed in the light most favorable to plaintiff without considering credibility or weight, Jund, 941 F.2d at 1290, the evidence adduced at trial supports a finding that Colaneri and Mosca acted with reckless or callous indifference to plaintiff's right to equal protection. The jury, in response to a question on the special verdict form, found that the conduct of defendants Colaneri and Mosca was sufficiently wanton, reckless or callous that punitive damages should be awarded. Under these circumstances, we cannot conclude that the evidence permitted a conclusion only in defendants' favor on this issue. Hence, defendants Colaneri and Mosca are not entitled to judgment as a matter of law that punitive damages are unwarranted in this case.
II. New Trial or Remittitur
Defendants also seek a new trial on the issue of damages, or, in the alternative, a remittitur of the damages award, on the ground that the amount awarded by the jury is excessive.
A. Compensatory Damages
"While a jury has broad discretion in measuring damages, it may not abandon analysis for sympathy for a suffering plaintiff and treat an injury as though it were a winning lottery ticket." Scala v. Moore McCormack Lines, Inc., 985 F.2d 680, 684 (2d Cir.1993). We conclude that the compensatory damage award in this case ($266,001) is so excessive that it shocks the judicial conscious. The amount of compensatory damages awarded by the jury far exceeds plaintiff's actual damages, and to uphold such an award would be a miscarriage of justice. The overcompensation would result in the payment by defendants of exemplary damages, and receipt by plaintiff of a windfall.
Plaintiff's sole claim for compensatory damages rested on her claim for emotional suffering. Although there is evidence to support the jury's finding that plaintiff was humiliated and embarrassed, and therefore suffered emotional and mental distress, an award of $266,001 clearly exceeds plaintiff's actual damages. We conclude that a compensatory damage award greater than $100,001 would be excessive, and therefore grant defendants' motion for a new trial on the issue of compensatory damages unless plaintiff agrees to remit the amount of compensatory damages to $100,001.
As for apportionment of liability among defendants for these damages, we conclude that the County and Mosca contributed in roughly equal shares, with Colaneri contributing nominally to plaintiff's actual damages. Therefore, if plaintiff accepts remittitur, we apportion $50,000 to the County and $50,000 to Mosca, and allow the $1 awarded against Colaneri to stand.
B. Punitive Damages
The purpose of punitive damage awards is to punish the defendant and to deter the defendant and others from engaging in similar conduct in the future. See Smith, 461 U.S. at 54, 103 S.Ct. at 1639. The decision to award punitive damages is a discretionary moral judgment made by the jury. See id. at 52, 103 S.Ct. at 1638. "Nevertheless, the amount of punitive damages should not be greater than the amount reasonably necessary to fulfill the purposes of punishment and deterrence or the punitive damage award becomes, in part, a windfall to the individual litigant." Niemann v. Whalen, 928 F.Supp. 296, 300 (S.D.N.Y.1996) (Conner, J.) (citing Aldrich v. Thomson McKinnon Securities, Inc., 756 F.2d 243, 249 (2d Cir. 1985)).
We believe that the jury's award of $25,000 in punitive damages against Colaneri is not so great as to shock the judicial conscience. Nor do we believe the award to constitute a windfall for plaintiff. Therefore, we will not disturb the jury's award of punitive damages as against Colaneri.
The jury's award of $250,000 in punitive damages against Mosca, however, is so great as to "shock the judicial conscience and to constitute a denial of justice," Ismail, 899 F.2d at 186, as well as a windfall for plaintiff, Aldrich, 756 F.2d at 249. This amount is well in excess of the figure reasonably necessary *1122 to punish Mosca and to deter him and others from similar conduct. Therefore, we will order a new trial on the issue of punitive damages against Mosca unless plaintiff agrees to accept a remittitur.
While we consider Mosca's conduct in this case to be a serious breach of plaintiff's Constitutional right to equal protection, the punitive damage award against him far surpasses the amount necessary to punish him for his conduct and to deter him and others from engaging in similar conduct in the future. Indeed, because Mosca has retired from the police force, there is little or no chance that he will be again in a position of authority over a police officer such as plaintiff.
We believe that an award of $100,000 in punitive damages against Mosca would adequately serve the goals of punishment and deterrence. This figure represents the maximum amount of punitive damages that we would uphold as not excessive.
It should be noted that counsel for neither Mosca nor Colaneri requested a hearing on defendants' financial condition. Defendants therefore cannot complain that a $100,000 punitive damage award against Mosca and a $25,000 punitive damage award against Colaneri violate due process. "[I]t is the defendant[s'] burden to show that [their] financial circumstances warrant a limitation of the [punitive damages] award." Lightning Bolt, 861 F.2d at 373. Defendants failed to request a special hearing on the ground that they did not believe that punitive damages were warranted. Counsels' wishful thinking is no excuse for what appears to have been an ill-advised gamble, and Mosca and Colaneri cannot now complain that punitive damages of $100,000 and $25,000, respectively, are excessive.
Plaintiff argues that defendants' failure to request a hearing on Mosca's financial condition warrants denial of his motion for a new trial on, or remittitur of, punitive damages. However, we take judicial notice of the fact that a commissioner of a county police department receives only limited financial compensation for his or her services. Based on representation of counsel at a post-trial conference, we believe that defendant Mosca is neither extremely wealthy nor destitute. To uphold a punitive damage award of $250,000 against Mosca on the ground that the court lacks any guidance regarding his financial condition would be draconian and possibly violative of due process. In any case, we conclude that that amount far exceeds the amount necessary to punish Mosca and to deter him and others from future similar conduct.
Therefore, we will grant defendants' motion for a new trial on the issue of compensatory and punitive damages unless plaintiff consents to remit the compensatory damage award to $50,000 against the County, and the punitive damage award to $100,000 against Mosca. If plaintiff accepts remittitur, she will receive a judgment totalling $225,001 in compensatory and punitive damages against defendants.
III. Attorney's Fees and Costs
Section 1988 of Title 42 provides that, in a section 1983 action, "the court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee as part of the costs." A prevailing plaintiff "should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust." Hensley v. Eckerhart, 461 U.S. 424, 429, 103 S.Ct. 1933, 1937, 76 L.Ed.2d 40 (1983). Hensley instructs that the starting point for determining a reasonable attorney's fee is the "lodestar" amount, or the product of the hours reasonable expended multiplied by a reasonable hourly rate. A party advocating a departure from the lodestar calculation then bears the burden of establishing that an adjustment is necessary to reach a reasonable fee. United States Football League v. National Football League, 887 F.2d 408, 413 (2d Cir.1989), cert. denied, 493 U.S. 1071, 110 S.Ct. 1116, 107 L.Ed.2d 1022 (1990). As required by Hensley, plaintiff has submitted schedules that detail the amount of time spent by numerous attorneys on various aspects of this case and the amount charged per hour. Jonathan Lovett, plaintiff's trial attorney, seeks an upward adjustment in his hourly fee from $250 per hour to $300 per hour. Defendants, on the other *1123 hand, argue that a downward adjustment of fees is warranted because the hourly rate sought by Mr. Lovett and his associate, Kim Berg, and the amount of time spent by all counsel for plaintiff are not reasonable.
A. Hourly Rates
We conclude that the complexity of this case and the degree of success achieved do not warrant an upward adjustment from Mr. Lovett's regular hourly fee. Therefore, we calculate the award of fees to which plaintiff is entitled based on an hourly rate for Mr. Lovett of $250. Defendants' contention that Mr. Lovett's fee should be reduced to $200 per hour is without merit.
In addition, we disagree with defendants that a rate of $125 per hour charged for Ms. Berg, an associate of Mr. Lovett's firm, is excessive. Despite Ms. Berg's recent admission to the bar, she has extensive experience in civil rights litigation for a first year associate, and we conclude that a rate of $125 per hour is reasonable.
Defendants contend summarily that the hourly rate charged by George J. Calganini, plaintiff's attorney prior to trial in this case, is excessive.[3] We find no merit in this conclusory assertion. Finally, defendants do not seriously challenge the hourly rate charged by Frank Prete, Jr., an attorney who assisted Mr. Calganini prior to Mr. Lovett's appearance.
Therefore, we apply the following hourly rates for work performed by the following attorneys:
Mr. Lovett $250 per hour
Ms. Berg $125 per hour
Mr. Calganini $200 per hour ($225 per hour after 9/1/93)
Mr. Prete $150 per hour
B. Reasonable amount of time spent
We reject defendants' assertion that Mr. Calganini spent an unreasonable amount of time litigating this case. However, defendants' contention that they should not be required to pay for the amount of time that it took Mr. Lovett to familiarize himself with this case merits some discussion.
Plaintiff originally had retained Mr. Calganini in this case, and, after Mr. Calganini argued summary judgment motions to the district court and an appeal to the Second Circuit, Mr. Lovett was retained for trial. In preparation for trial, Mr. Lovett spent approximately forty-five hours familiarizing himself with the case, some of which was duplicative of the work that had already been conducted by Mr. Calganini. Plaintiff should not recover full fees for this duplicative work, since it was her decision to replace counsel during the course of this litigation. We recognize that even if Mr. Lovett had been involved in this case from its inception, it would have been reasonable for him to spend some time reviewing the files in preparation for trial. Thus, in order to strike an appropriate balance, we reduce the number of hours reasonably charged by Mr. Lovett by twenty hours.
Therefore, we conclude that the following number of hours were reasonably spent by the following attorneys in litigating this action:
Mr. Lovett 269.0 hours[4]
Ms. Berg 55.5 hours
Mr. Calganini 244.15 hours
Mr. Prete 45.3 hours
C. Adjustments
Based on the reasonable number of hours spent and hourly rates charged, we conclude that plaintiff is entitled to the following attorney's fee:
Mr. Lovett $ 67,250
Ms. Berg 6,937.50
Mr. Calganini 53,570
Mr. Prete 6,795
___________
Total $134,552.50
In addition, we award $5,677.02 in costs,[5] which represents expenses plaintiff has proved she incurred in this action (exclusive *1124 of the $1,020.10 incurred in the surveillance of defendant Mosca during the weekend prior to commencement of trial[6]). Neither party has convinced us that any further adjustment is warranted. We therefore conclude that plaintiff is entitled to $140,229.52 in attorney's fees, including $5,677.02 in costs.
CONCLUSION
For the foregoing reasons, defendants' motion for judgment as a matter of law is denied. Defendants' motion for a new trial on the issue of compensatory and punitive damages is granted unless plaintiff accepts a remittitur reducing the judgment as follows:
Compensatory Damages Punitive Damages
County $50,000[7]
Mosca $50,000[8] $100,000[9]
Colaneri $ 1[10] $ 25,000[11]
If plaintiff accepts remittitur, she shall send a written acceptance to the court by September 25, 1996.
In any case, we amend the judgment in the record, dated June 12, 1996, with the attached amended order of judgment by striking all references to pre-judgment interest, to which plaintiff is not entitled, and by delineating the amount of compensatory damages and punitive damages awarded as follows:
County compensatory damages of $216,000
Mosca compensatory damages of $50,000 and
punitive damages of $250,000
Colaneri compensatory damages of $1 and punitive
damages of $25,000
Plaintiff's motion for attorney's fees and costs is granted, as modified above, in the amount of $140,229.52, including $5,677.02 in costs.
SO ORDERED.
NOTES
[1] Although defendant Mosca filed submissions separately, he takes the same position and furthers the same arguments as the other defendants, and we therefore address all defendants' motions as one.
[2] We reject plaintiff's contention that the court lacks jurisdiction to consider defendant Mosca's motion as untimely. Plaintiff argues that (1) Mosca's papers were served after the expiration of the ten-day window under Rules 50 and 59, and (2) no notice of motion was served. See Rodick v. City of Schenectady, 1 F.3d 1341, 1346 (2d Cir.1993). We agree with plaintiff that a court may not grant an extension of time beyond the ten days allotted in which to file a motion under Rules 50 and 59. See id. However, such extension was neither requested nor granted in this instance. Although plaintiff may have received copies of Mosca's motion papers after the expiration of the ten-day period, even prior to entry of judgment in this case, defendants sought permission at a post-trial conference to make the instant motion. Mosca's motion was therefore timely. See Meriwether v. Coughlin, 879 F.2d 1037, 1041 (2d Cir.1989) ("[Oral] statement `I would ... like to ... note that defendants wish to move' was a motion [under Rule 50 and not a request for an extension of time in which to file a motion.]"); cf. U.S. East Telecommunications, Inc. v. U.S. West Information Systems, Inc., 15 F.3d 261, 262 (2d Cir.1994).
[3] Mr. Calganini's hourly rate was $200 per hour prior to September 1, 1993, and $225 per hour thereafter.
[4] This figure includes 25.4 hours submitted in Mr. Lovett's Supplemental Affirmation in Support of Motion for an Award of Attorney's Fees, but, for reasons discussed above, excludes 20.0 hours from the 263.6 hours submitted in Lovett's Affirmation in Support of Motion for Award of Attorney's Fees.
[5] $5,197.93 from Mr. Lovett, and $479.09 from Mr. Calganini.
[6] Due to Mosca's health condition, the court granted a one week adjournment of trial. Apparently, plaintiff believed that Mosca may have been trying to delay trial, and thus hired an investigator to observe Mosca during the weekend prior to the adjourned trial date. In light of the fact that the court had decided upon careful consideration that Mosca was indeed unfit to attend trial, plaintiff may not recover for expenses incurred for his surveillance.
[7] Reduction from $216,000.
[8] No reduction.
[9] Reduction from $250,000.
[10] No reduction.
[11] No reduction. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511621/ | 136 F.2d 968 (1943)
UNITED STATES
v.
VON CLEMM et al.
No. 161.
Circuit Court of Appeals, Second Circuit.
July 14, 1943.
Corbin & Bennett, of New York City (Harold H. Corbin and Edward J. Bennett, both of New York City, of counsel), for appellants.
Mathias F. Correa, U. S. Atty., of New York City (John F. Sonnett, Executive Asst. U. S. Atty., and Bruno Schachner, Asst. U. S. Atty., both of New York City, of counsel), for appellee.
Before L. HAND, SWAN, and FRANK, Circuit Judges.
SWAN, Circuit Judge.
The appellants were convicted under 18 U.S.C.A. § 88 of engaging in an unlawful conspiracy. Each was fined $10,000 and the individual appellant was sentenced to imprisonment for two years. The indictment contained but a single count. In brief, it charged that the appellants, and other defendants as to whom a severance was had at the opening of the trial, conspired to bring to this country diamonds that were cut in Holland or Belgium under false declarations that they were cut in Germany, which would be in violation of 18 U.S.C.A. § 80 and 19 U.S.C.A. § 1591, and to cause the diamonds to be paid for without securing the requisite license therefor, which would be in violation of 12 U.S. C.A. § 95a and Executive Order May 10, 1940, No. 8405, 12 U.S.C.A. § 95 note. Von Clemm took the stand and testified at great length in his own defense. It took the jury only an hour to reach their verdict finding both defendants guilty. The appellants present as their principal contentions the insufficiency of the evidence and the unconstitutionality of Executive Order No. 8405 and the legislation pursuant to which it was issued. Alleged errors in the conduct of the trial are also urged.
Appellant Von Clemm, a native of Germany, is a naturalized citizen of the United *969 States who has resided here since 1922. After a variety of business ventures he organized in 1938, under the laws of New York, the corporate appellant. His purpose was to import goods from Germany and thereby find a profitable way to use "blocked funds," which under German exchange regulations could be used to pay in part for goods to be exported. The stock of Pioneer was issued to International Mortgage & Investment Corporation, a Maryland corporation, which had large holdings of German blocked funds and put up 100,000 blocked marks as its contribution to the enterprise. Von Clemm advanced cash for Pioneer's working capital. He was its president and managed its business in this country. Pioneer's purchasing agent in Germany was International Mortgage Handelsgesellschaft, G.m.b.H., for brevity called Imico.[1] Shortly before the war broke out Von Clemm went to Germany and secured from a German official named Cremer, mentioned as a coconspirator in the indictment, permits for the exportation of several kinds of merchandise, including synthetic and semi-precious stones. By March, 1940, the British blockade made virtually impossible the shipment of bulky merchandise. In April, 1940, Von Clemm was sounded out by his brother, writing from Europe, with reference to handling diamonds. He responded asking for more details, and on May 21st wrote to his brother that "The recent Rotterdam developments should make it interesting for us to enter the diamonds picture * * * Please discuss with Cremer."[2] June 3rd Pioneer cabled Imico for quotations on "Rotterdam diamonds." In response Imico sent a list of diamonds and asked Pioneer to get in touch with the trade and give prices. The letter stated that "The Reichs Economics Ministry and The Stone Control Board want to do business with us and you." There was also enclosed in Imico's letter a communication addressed to Werner Senn in Milwaukee, which identified the owner of the listed diamonds as "a very large Dutch concern." After further correspondence the appellants received a packet of diamonds which they entered at the customs as of German origin. Their offer of $42,000 for the diamonds was accepted by the Reichs Economics Ministry and they paid this sum to the Guaranty Trust Company for credit to the account of Reichs-Kredit-Gesell-schaft A.G., Berlin. Subsequently Von Clemm took elaborate precautions to destroy or conceal evidence tending to prove that these diamonds were of Dutch origin. He mutilated and falsified his files and enlisted the ready cooperation of his German associates to supply untrue information regarding missing correspondence. His efforts were fully exposed at the trial and the jury was properly instructed with respect to destruction or fabrication of evidence as indicative of guilt.[3]
Other evidence tended to prove the charge of conspiracy with respect to Belgian diamonds, although no actual shipment to the appellants was shown. In the autumn of 1940 Von Clemm talked with the witness Granovsky about a letter the latter had received from an Antwerp diamond dealer. Von Clemm told Granovsky that the diamonds could be sent to Germany and shipped from there. In reporting this interview to Imico Von Clemm wrote: "We would not dare to make anything but a German declaration. The other would undoubtedly be subject to license. It is essential that your diamond invoices show the notation `cut in Germany.'" The office copy of this memorandum was destroyed and an innocuous substitute placed in Pioneer's files, but a copy of the original intercepted by British censors served to expose the substitution. Other witnesses testified to interviews with Cremer in Antwerp which tended to implicate the appellants circumstantially. Thus a Belgian diamond dealer named Klein was ordered by Cremer to get in touch with his American connections to negotiate sales which would be handled through Imico. And a Mrs. Rubin who desired to ship diamonds from Antwerp to her husband in the United States was instructed by Cremer to cable the husband for payment. Her cable was brought to Von Clemm's office, and the payment requested was made by *970 Pioneer to Imico. The code designation used by Pioneer in making payment was the same as that which Cremer had ordered Mrs. Rubin to put upon the package in Antwerp, implying prearranged collaboration. Evidence was also given of the following somewhat similar transaction: In December, 1940, Von Clemm was requested to offer Antwerp diamonds to a New York diamond merchant, a partial advance payment being required. Von Clemm had Pioneer make the advance payment personally and cabled Imico to "rush all available diamonds" to Pioneer.
In the light of the evidence above summarized it seems little short of effrontery for the appellants to argue that the jury's verdict is not supportable. Rarely have we seen a case where an illegal conspiracy was so clearly inferable from proven facts or where the accused were so completely enmeshed in a web of their own making. Von Clemm's concealment and fabrication of evidence can leave no doubt whatever of his guilt.
We pass now to the constitutional question raised by the appellants with respect to Executive Order 8405 and the legislation pursuant to which it was issued. This order amended Executive Order No. 8389, dated April 10, 1940, 12 U.S.C.A. § 95 note, which prohibited, except under licenses issued by the Secretary of the Treasury, transactions in foreign exchange involving property of Norway or Denmark or any national of either after those countries were invaded by Germany. The amendment extended the same prohibition to Holland, Belgium and Luxembourg and their nationals on or after May 10, 1940. The appellants contend that the statutes under which the orders were issued constitute an illegal delegation of authority to the President. It is true that the statute, 12 U.S.C.A. § 95a, in effect when the first "freezing" order of April 10, 1940 was issued, gave the Executive unlimited discretion during any "period of national emergency declared by" him to regulate or prohibit transactions in foreign exchange. As no standard was prescribed to guide him in the exercise of the power delegated, the appellants urge that the test established in Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 and Schechter Poultry Corp. v. United States, 295 U. S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A. L.R. 947, was not met. When Order No. 8405 of May 10, 1940 was issued Congress had passed the Joint Resolution of May 7, 1940, 54 Stat. 179, section 2 of which provided: "Executive Order Numbered 8389 of April 10, 1940, and the regulations and general rulings issued thereunder by the Secretary of the Treasury are hereby approved and confirmed."
Before considering specifically what effect should be accorded this congressional approval and confirmation of the first freezing order, we note that the constitutionality of Executive Orders under these statutes has often been assumed by courts of the highest authority. Perry v. United States, 294 U.S. 330, 335, 55 S.Ct. 432, 79 L.Ed. 912, 95 A.L.R. 1335; Norman v. Baltimore & O. R. Co., 294 U.S. 240, 295, 55 S.Ct. 407, 79 L.Ed. 885, 95 A.L.R. 1352; Commission of Polish Relief v. Banca Nationala a Rumaniei, 288 N.Y. 332, 336, 43 N.E.2d 345. The legislation has twice come before this court without its constitutionality being questioned. Uebersee Finanz-Korporation v. Rosen, 2 Cir., 83 F.2d 225, 228; British Am. Tobacco Co. v. Federal Reserve Bank, 2 Cir., 104 F.2d 652, 653, on rehearing 2 Cir., 105 F.2d 935, certiorari denied 308 U.S. 600, 60 S.Ct. 131, 84 L.Ed. 502. And the same argument now made by the appellants was rejected by Judge Woolsey in Campbell v. Chase Nat. Bank, D.C., S.D.N.Y., 5 F.Supp. 156, 172, affirmed, 2 Cir., 71 F.2d 669, certiorari denied 293 U.S. 592, 55 S.Ct. 108, 79 L.Ed. 686. Moreover, there is much persuasive force in the appellee's argument that the power exerted by the Executive with regard to property of foreign nationals in a time of proclaimed emergency falls within the sphere of foreign relations and is thus free from the limitations imposed on delegated authority. See Hamilton v. Dillin, 88 U.S. 73, 22 L. Ed. 528; United States v. Belmont, 301 U. S. 324, 57 S.Ct. 758, 81 L.Ed. 1134; United States v. Curtis-Wright Export Corp., 299 U.S. 304, 57 S.Ct. 216, 81 L.Ed. 255; United States v. Pink, 315 U.S. 203, 62 S. Ct. 552, 86 L.Ed. 796. But whatever the result might be in the absence of section 2 of the Act of May 7, 1940, we hold that this retroactive approval and confirmation of the President's order removed all question of improper delegation with regard to Order 8389 and provided an adequate standard and guide for his exercise of discretion in Order No. 8405. The latter merely extended to new subject matter, upon facts warranting the extension, a set of regulations already approved by Congress. A clearer example of that guidance *971 required by the Panama and Schechter cases would be difficult to imagine.
The remaining questions raised by the appellants require but brief discussion. Complaint is made that the witnesses Rubin and Klein were permitted to testify as to conversations and dealings with Cremer in Antwerp. The competency of Cremer's declarations depends upon whether, independently of them, there was evidence from which the trial judge could conclude that Von Clemm and Cremer were acting in concert for the importation of diamonds. Such evidence was ample. The first communication about diamonds from Von Clemm's brother mentioned that Cremer "wishes you to handle the diamonds line." Von Clemm's letter of May 21 requested the brother to discuss "the diamond picture" with Cremer. Five months later Cremer attached to Klein's letter to Elkon a tissue slip directing payment to be made to Imico and giving as the cable address Pioneer's Berlin office. These documents can leave little doubt that when Cremer directed the transaction to be cleared through the appellants, he did so with their consent. In passing upon whether a sufficient showing has been made to render competent the acts and declarations of a coconspirator, the trial court has much discretion and its rulings are not to be lightly disturbed. Delaney v. United States, 263 U.S. 586, 590, 44 S.Ct. 206, 68 L.Ed. 462; Wiborg v. United States, 163 U.S. 632, 658, 16 S.Ct. 1127, 1197, 41 L.Ed. 289. We see no reason to doubt their correctness in the case at bar.
Error is assigned to the court's refusal to postpone the trial until after termination of the war. The argument proceeds upon the assumption that evidence may be available in Germany which would be favorable to the accused if it could be found and produced. The recognition of such a doctrine would mean that every violator of our laws whether he be an alien or a naturalized citizen like Von Clemm would be immune from prosecution during time of war by merely asserting that witnesses abroad could prove his innocence of the charge. A mere statement of the proposition shows the impossibility of its acceptance. Nor in the case at bar is it likely that any evidence could be produced of a character to change the verdict; for the readiness of Von Clemm's German associates to fabricate evidence was so thoroughly established that any testimony they might give would probably be discredited by the jury.
As to errors assigned in respect to the charge and refusal of requests to charge it will suffice to say that we find them without merit.
Judgment affirmed.
NOTES
[1] Imico's manager was Carlos Hoepfner, named as a co-defendant in the indictment; he was a vice-president of Pioneer until 1941. Another defendant, Carl Von Clemm, who is a brother of the appellant Werner Von Clemm, was also connected with Imico.
[2] The Lowlands were invaded by Germany on May 10, 1940. Cremer became Commissioner for Belgian Diamond Export.
[3] See Wilson v. United States, 162 U. S. 613, 621, 16 S.Ct. 895, 40 L.Ed. 1090; Hodgskin v. United States, 2 Cir., 279 F. 85, 93; United States v. Graham, 2 Cir., 102 F.2d 436, 442. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511711/ | 131 F.2d 470 (1942)
MURRAY
v.
NOBLESVILLE MILLING CO.
No. 7996.
Circuit Court of Appeals, Seventh Circuit.
November 25, 1942.
*471 *472 Warren W. Gardner, of Washington, D. C., Frank J. Delany, of Chicago, Ill., and Irving J. Levy, Acting Sol., Mortimer B. Wolf, Asst. Sol., Edward J. Fruchtman, and George W. Crockett, Jr., all of Washington, D. C., Attys., United States Department of Labor, amici curiae.
Harvey J. Elam, Howard S. Young, and Irving M. Fauvre, all of Indianapolis, Ind., for appellant.
Francis E. Thomason and Clarence B. Ullum, both of Indianapolis, Ind., for appellee.
Before EVANS, SPARKS, and KERNER, Circuit Judges.
KERNER, Circuit Judge.
This was an action brought by plaintiff as agent for and on behalf of twenty-four former employees of the defendant to recover unpaid compensation alleged to be due under § 7(a) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., and an equal amount as liquidated damages and reasonable attorney's fees. The case was tried without a jury. The District Court found for the plaintiff and rendered judgment for $5,997.56 for wages, together with a like sum for the use of the former employees as liquidated damages, and the sum of $1,000 as attorney's fees. To reverse the judgment, defendant appeals.
The complaint alleged that defendant and the employees were engaged in the production of goods for commerce and that the employees had performed overtime work for which they had received no extra compensation. Defendant admitted coverage of all but two of the employees but denied liability, claiming an agreement with the employees which provided for an hourly rate of pay in excess of the statutory minimum for the first 40 hours of the workweek and time and one-half that rate of pay for each hour thereafter.
The court found that prior to October 18, 1938, the defendant had an agreement with its employees to pay a stated sum per hour as wages for work to be performed, and that it was the practice of the defendant to have its employees work more than 44 hours a week. On October 18, the defendant called a meeting of its employees at which it advised them that it was not willing to pay overtime compensation based upon their present rate, but that it would not reduce their pay in respect to the total amount earned each week. The defendant proposed that for an average week of 60 hours an employee previously engaged at 40¢ an hour, be paid for the first 40 hours at 34¢ an hour, and for the remaining 20 hours, as his overtime compensation, at 51¢ an hour.
Since this method yielded only $23.80 as compared with $24 per week under the old rate of pay, the defendant promised to add a bonus of 20¢ to equal the old rate. Thereafter the defendant put the plan into effect, revised its bookkeeping system to reflect it, and the employees continued to work for the defendant until it closed its plant on or about March 10, 1941.
The court also found that the new pay arrangement was not a bona fide contract and that the employees never knew exactly how to figure their pay after October 18, 1938, but considered that it (original contract of employment) remained unchanged.
If this were an original proposition, our holding would be that this contract does not comply with the law, and that the "regular rate" must be calculated according to the formula stated in Overnight Motor Transportation Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682.
There can no longer be any question that Congress has the constitutional power to regulate hours even though they are not patently burdensome to health, that the method adopted by Congress was constitutional, and that the purpose of the overtime provisions of § 7 was to apply financial pressure upon the employer to reduce hours of work and spread employment. Missel case, supra. Where Congress has chosen a constitutional method to effect a purpose within its constitutional power, it is not our function to re-examine the wisdom of adopting maximum hour legislation. The duty of the court in this situation is one of statutory construction to interpret the language of the statute so as to effectuate the intent of Congress.
Underlying the Fair Labor Standards Act is the proposition that two separate and distinct factors may influence agreements on wages and hours made between *473 employers and employees employee bargaining power, and the requirements of the law. Resting on this proposition, the Act has two major purposes: (1) to reinforce employee bargaining power concerning hourly wages by prohibiting wage rates below a certain level, and (2) to reinforce employee bargaining power concerning hours of labor by exerting financial pressure upon the employer to limit hours to a certain level.
In the instant case, the contract of employment contravenes the second of these purposes. So far as the employer is concerned, the contract is in practical effect a contract to pay 40 cents an hour for the first 60 hours of work in a week, and 51 cents an hour thereafter. Instead of financial pressure being exerted upon the employer after the statutory maximum number of hours of work, the pressure of increased wages is exerted only after a certain number of hours chosen by the employer himself 60 hours. Because there is no increase of labor cost between the statutory maximum and the hours guaranteed, the employer has a financial inducement to require hours beyond the statutory maximum. Is this the result intended by Congress? Such a contract complies with the provision of § 7 only in form, and even then only if "regular rate" is given the definition contended for by defendant. It is the substance of the contract, rather than its mere form, which should determine whether it complies with the Act.
To hold that this contract is sufficient under the Act is to render wholly ineffective (except in the unusual case in which the stated hourly rate is the statutory minimum) the method adopted by Congress to regulate hours of work. It is to construe the Act as though Congress had not enacted a separate section dealing with maximum hours, but had enacted § 7 as a part of § 6, intending the time and one-half provisions to influence only minimum wages, not maximum hours. The control of hours of work is once again dependent solely upon employee bargaining power, as it was before the Act was passed. It can be said that all the employees needed to do, if they did not want to work as much as 60 hours to receive $24, was to bargain for a higher stated hourly rate. But this is exactly what the situation was before Congress enacted § 7.
It is clear in the instant case that our holding makes the number of hours of work dependent solely on the strength of employee bargaining power. What of the case in which employees are not paid as they are here but are paid by the hour? It is true there as well, for it is only employee bargaining power which would bar such an employer from changing his employees to the type of contract present in this case, if he so desired.
The employees' desire to receive a weekly salary regular in amount would not be defeated by holding contracts such as the 60 hour contract in this case contrary to the law. Employees could still enter into contracts guaranteeing them the statutory maximum number of hours each week. If this did not provide them with as large a guaranteed weekly salary as they formerly received, any change in that situation was left by Congress to be effected through the exercise of employee bargaining power the Act does not purport to fix weekly wages. The intent of Congress was that both employee bargaining power and the Act should influence hours of work, but that only employee bargaining power should influence wages so long as they were equal to or above the statutory minimum.
It has been argued that the courts should not attempt to define the term "regular rate" because the possibilities of variation in contracts are too great. However, it is impossible for a court, in passing upon a specific case, to avoid defining "regular rate" for that particular case. To hold that the contract before us complies with the Act is to give the term "regular rate" one meaning; to hold that such a contract is insufficient to comply with the Act is to give it another.
It has also been argued that the courts must give effect to the intention of the parties with respect to the regular rate of pay. However, our duty is to give effect to the intention of the parties only insofar as that intention complies with the law. In many familiar situations the intention of the parties is not permitted to defeat the announced policy of the legislature. Regardless of the intention of the borrower, money may not be loaned at a usurious rate of interest; regardless of the intention of the employee, an employer may not pay him wages less than the applicable minimum wage; regardless of a woman employee's intention, an employer may not require her to work more than the number of hours set by state statute. The *474 intention of the parties here should not be allowed to defeat the obvious intent of Congress in enacting the Fair Labor Standards Act.
We have already been told, however, in a case involving a contract which was in substance equivalent to the contract in this case, that "nothing in the [Fair Labor Standards] Act bars an employer from contracting with his employees to pay them the same wages they received previously, so long as the new rate equals or exceeds the minimum required by the Act." Walling v. Belo Corporation, 316 U.S. 624, 62 S.Ct. 1223, 1226, 86 L.Ed. 1716. This decision of the Supreme Court we must follow. The determinative question therefore is whether the old employees agreed to the abrogation of their existing contracts and entered into new ones, and also whether five new employees agreed to work for the new rates, rather than for a basic rate of 40¢ an hour.
In support of the judgment, the plaintiff calls attention to Rule 52(a) of the Rules of Civil Procedure, 28 U.S.C.A. following § 723, which provides that findings of fact shall not be set aside unless clearly erroneous.
To be sure, where the finding of fact is supported by evidence and is not clearly erroneous, it must be accepted by us, but the rule does not operate to entrench with like finality the inferences or conclusions drawn by the trial court from its fact findings and we are free to draw the ultimate inferences and conclusions which the findings reasonably induce, and where the evidentiary facts are not in conflict or dispute, the conclusions to be drawn therefrom are for the appellate court upon review. Kuhn v. Princess Lida of Thurn & Taxis, 3 Cir., 119 F.2d 704.
In the instant case, the essential facts, as to whether the employees in fact agreed to the abrogation of their existing contracts and the consummation of new ones, agreeing to work for the new rates rather than for a basic rate of 40¢ an hour, are not in dispute.
The evidence shows that prior to the effective date of the Fair Labor Standards Act, 17 of the defendant's employees were being paid 40¢ per hour, usually averaging 60 hours per week. On October 18, 1938, after the passage but before the effective date of the Act, defendant convened a meeting of its employees for the purpose of figuring out a plan, by which it could adjust its compensation system to meet the requirements of the Act. At this meeting defendant's secretary-treasurer advised the employees that he had worked out an arrangement whereby they could continue to work substantially 60 hours per week and receive a weekly wage of $24, but that in order to do so, it was necessary, in case of a 40¢ an hour man, to calculate his hourly rate on a basis of 34¢ in keeping with the law, and pay him for all hours over the maximum provided for in the Act at 51¢ per hour, which would approximate the same weekly wage he was receiving prior to the passage of the Act if he worked the full average workweek of 60 hours; that under the proposed plan an employee would receive $23.80 for 60 hours of work to which defendant would add a bonus of 20¢, thus bringing his pay to what it would have been under the old rate.
After this explanation, a motion was made that the employees in favor of letting the secretary-treasurer take care of it, "stand up." All the employees, with the exception of one absent employee, arose. Thereafter there was entered upon the defendant's books a notation that the basic rates of pay had been reduced in accordance with the understanding reached at the meeting, its records were revised to reflect the payment of the employee's compensation at the new rates, and for two and one-half years thereafter all the employees received their pay each week accordingly.
The evidence in this case shows that the employees understood the meeting of October 18 was called for the purpose of figuring out a plan by which the defendant could adjust its compensation system to meet the requirements of the Act, and that, in order to conform to the Act without increasing the base pay, the defendant was forced to reduce the base rate of pay to 34¢ an hour and pay its employees for all hours over the maximum provided for in the Act at 51¢ an hour.
We think a similar situation existed in Walling v. Belo Corporation, supra, in which the Supreme Court affirmed the Circuit Court of Appeals in holding that the contracts were actual bona fide contracts of employment and that they were intended to, and did, really fix the regular rates at which each employee was employed. In that case the employer, prior to the effective date of the Act, October 24, 1938, had been paying its employees more than the minimum wage required by the Act. *475 After the enactment of the Act but before its effective date, the employer endeavored to adjust its compensation system to meet the requirements of the Act by negotiating a contract with each of its employees which provided that from and after October 24, the employee's basic pay would be 67¢ an hour (for example) for the first forty-four hours each week, and that for time over forty-four hours each week, the employee would receive for each hour of work not less than one and one-half times such basic rate, with a guaranty that the employee would receive weekly, for "regular time and for such overtime * * * a sum not less than $40."
Concerning employees Reddick and Passwater, it was stipulated that no change was made in the terms of their employment at the time the Act went into effect and that they continued to be paid at a straight time hourly rate, because the defendant held the view that they were retail salesmen and were not employees within the meaning of the Act. It was further stipulated that defendant's business, to a considerable extent, involved the interstate shipment of flour and grain.
There was evidence, and the court found, that these employees purchased for defendant wheat which farmers brought to the elevator from nearby points in Indiana. This wheat was received at elevator "A" and sent by Reddick and Passwater in a conveyor system to elevator "B", where it was prepared for milling and reconveyed to elevator "A", and from there Reddick and Passwater sent it to the flour mill where it was used in milling flour. In addition, there was evidence that these employees kept the machinery in defendant's plant oiled and in running condition.
The court concluded as a matter of law that Reddick and Passwater were engaged during their employment by the defendant in commerce within the meaning of the Act. We think the court was right.
The defendant contends that these employees were not within the Act, and its counsel points to § 13 of the Fair Labor Standards Act of 1938 which provides that "the provisions of sections 206 and 207 * * * shall not apply with respect to * * * any employee engaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce." With this contention we do not agree.
To be within the Act, employees must be engaged in commerce or in "any process or occupation necessary to the production" of goods for commerce, as is evident by § 6 of the Act, since it applies to every employee "who is engaged in [interstate] commerce or in the production of goods for [such] commerce." Section 7 provides that "no employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce" longer than a certain period of each week. Section 3(j) provides that "for the purposes of this chapter [Act] an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, * * * handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any State."
Under the state of the record in this case, it is clear that the activities of these employees brought them directly within the provisions of the Act, since they were engaged in occupations "necessary to the production" of goods for commerce. Kirschbaum v. Walling, 316 U.S. 517, 62 S. Ct. 1116, 86 L.Ed. 1638, and Warren-Bradshaw Drilling Co. v. Hall, 63 S.Ct. 125, 87 L.Ed. ___, decided by the Supreme Court, November 9, 1942.
The court also found as a fact that on various dates after October 18, 1938, defendant employed Lorin Beauchamp, Carroll Guilkey, Clifford G. Hiatt, Worth Hiatt, and Albert Shoof, and that at the time they were engaged, they were advised by the defendant that their rate of pay would be 40¢ an hour. As to Lorin Beauchamp and Clifford Hiatt, there was competent evidence to sustain the finding. There was no evidence to sustain the finding as to Carroll Guilkey, Worth Hiatt, and Albert Shoof.
The judgment is affirmed in part and in part reversed, and the case is remanded for further proceedings in conformity with this opinion.
SPARKS, Circuit Judge, concurs in the result. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511730/ | 761 S.W.2d 398 (1988)
Paul AVILA, Appellant,
v.
HAVANA PAINTING COMPANY, INC., Appellee.
No. C14-87-633-CV.
Court of Appeals of Texas, Houston (14th Dist.).
October 13, 1988.
Rehearing Denied November 10, 1988.
*399 Paul Avila, Houston, for appellant.
L.T. Bradt, Houston, for appellee.
Before JUNELL, SEARS and CANNON, JJ.
OPINION
JUNELL, Justice.
This is a dispute over attorney's fees. Appellee, Havana Painting Company ("Havana"), brought suit against its attorney, Paul Avila, for funds collected by Avila on behalf of Havana. Avila filed a counterclaim asserting his right to attorney's fees expended in the defense of Havana's lawsuit. The case was tried to the court and the trial judge ordered that Avila take nothing and Havana recover actual and exemplary damages. While Avila brings four specific points of error, we have encountered difficulty understanding his contentions. We have determined, however, from the briefs and the record, that his primary contention is that the evidence at trial was insufficient to support the trial court's award of actual and punitive damages. We affirm.
In March, 1981 Roberto Mesa, president of Havana, hired Avila to collect several past due accounts. Mesa first paid Avila approximately $400 for his services. Avila then filed suit against one of Havana's accounts, the Woodland Oaks Apartments. Claiming difficulty in obtaining service on Woodland Oaks Apartments, Avila asked Mesa for another $250. Mesa paid Avila $250 with a check and noted on the check, "Full Payment Woodland Oak Apts." Avila received and cashed both checks. When Avila received $8,755 from the Woodland Oaks Apartments in settlement of the lawsuit, he refused to tender it to Havana. Avila claimed Havana still owed him forty-five percent of the recovery. Havana then brought suit against Avila alleging breach of fiduciary duty and conversion. Avila answered, asserting that a fee of forty-five percent of the recovery was still due, and that the $650 Havana had already paid was merely a retainer.
On November 11, 1981 the trial court ordered that the $8755 in checks Avila received from Woodland Oaks Apartments be deposited in the registry of the court pending further order of the court or final trial. On November 17, 1981 an agreed order was signed permitting Havana to withdraw $4815.25 from the $8755 and ordering that $3939.75, representing the forty-five percent Avila claimed, remain in the court's registry. On January 9, 1987, trial was had to the court and the court ordered that Avila take nothing and that he be divested of any interest in the $3939.75. The trial court awarded the amount in the court's registry to Havana as actual damages. The trial court also assessed exemplary damages in the amount of $3600 against Avila for his breach of fiduciary duty.
Avila's points of error present two issues: (1) whether the evidence was sufficient to support the trial court's award of actual damages to Havana, and (2) whether the actual damage award will support the trial court's assessment of punitive damages. We conclude there is sufficient evidence of actual damages suffered by Havana, and that the trial court's award of actual damages supports its assessment of punitive damages.
In its original petition Havana pled two causes of action alleging Avila breached his fiduciary duty to his client, Havana, and that Avila converted funds which belonged *400 to Havana. The trial court's judgment does not specify under which theory actual damages were awarded. We conclude the evidence is sufficient to support an award of actual damages for breach of fiduciary duty.
The relationship between an attorney and client is a fiduciary one and their dealings are subject to the same scrutiny as a trustee and a cestui que trust. Archer v. Griffith, 390 S.W.2d 735, 739 (Tex. 1965). The Code of Professional Responsibility requires that an attorney promptly pay or deliver to the client all funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive. Supreme Court of Texas, Rules Governing the State Bar of Texas art. XII, sec. 8 (Code of Professional Responsibility) DR 9-102(B) (1973). A breach of the duty under DR 9-102(B) gives rise to a cause of action sounding in tort, not an action for breach of the representation contract. Nolan v. Foreman, 665 F.2d 738, 743 (5th Cir.1982) (applying Texas law).
At trial, Havana presented evidence that Avila received funds from Woodland Oaks Apartments which Havana was entitled to receive and that Avila refused to deliver those funds to Havana until Havana sued Avila and requested an injunction to compel Avila to release the funds. Havana also presented evidence that it was necessary to hire an attorney to bring suit against Avila to collect the money to which Havana was entitled. Findings of fact and conclusions of law were neither requested nor filed. Therefore, all questions of fact are presumed found in support of the judgment, and we must affirm the judgment if it can be upheld on any legal theory with support in the evidence. Lassiter v. Bliss, 559 S.W.2d 353, 358 (Tex.1977). The evidence at trial was sufficient to show a breach of fiduciary duty. Therefore, the trial court's actual damage award is affirmed.
Avila next contends that the evidence was insufficient to support the trial court's assessment of punitive damages. Punitive damages may be assessed when a tort is committed with malice, Ledisco Financial Services, Inc. v. Viracola, 533 S.W.2d 951, 957 (Tex.Civ.AppTexarkana 1976, no writ), and actual damages are awarded as a result of the tort. Bellafonte Underwriters Ins. Co. v. Brown, 704 S.W. 2d 742, 745 (Tex.1986). In Bellafonte the plaintiff brought suit under a breach of contract theory and under a tortious interference with a contract theory. The jury awarded the plaintiff actual damages for the breach of contract, but failed to award damages for the tort cause of action. The jury also awarded punitive damages to the plaintiff. The Court held that the plaintiff was not entitled to punitive damages because he had not shown that he suffered actual damages as a result of the tort claim. Id.
In the instant case, unlike Bellafonte, the trial judge found Havana suffered actual damages as a result of an independent tort. We have found the evidence sufficient to support the award of actual damages under the theory of breach of fiduciary duty which is a tort action. Furthermore, we find the evidence sufficient to support the trial court's implied finding that Avila acted intentionally and knowingly in breaching his fiduciary duty to his client. Therefore, we conclude that the trial court properly assessed punitive damages. Avila's four points of error are overruled.
Havana files two cross-points of error in which it claims: (1) the trial court failed to award damages as mandated by article 317 of the Texas Revised Civil Statutes Annotated (Vernon 1973); and (2) Avila's appeal is frivolous and Avila should be taxed costs, including attorney's fees, for this appeal. We agree with Havana's second cross-point and assess damages against Avila for filing this appeal for delay purposes only.
Article 317, now section 82.063 of the Texas Government Code Annotated (Vernon 1988), states:
(a) A person may bring an action against the person's attorney if the attorney receives or collects money for the person *401 and refuses to pay the money to the person on demand.
(b) To recover under this section the person must file a motion with a district court in either the county in which the attorney usually resides or the county in which the attorney resided when the attorney collected or received the money.
(c) Notice of the motion and a copy of the motion shall be served on the attorney not later than the fifth day before the trial.
(d) If the motion is sustained, judgment shall be rendered against the defendant for the amount collected or received and at least 10 percent but not more than 20 percent damages on the principal sum.
While the Code provides for the recovery requested, we find that Havana failed to file a motion with the district court requesting relief, and, therefore, is not entitled to recover the damages specified by section 82.063. Havana's first cross-point of error is overruled.
In its second cross-point of error Havana asserts that Avila's appeal is frivolous. Although we cannot assess attorney's fees as Havana requests, under Texas Rule of Appellate Procedure 84 we may assess ten percent (10%) of the trial court's judgment as damages for bringing a frivolous appeal. We can and do exercise our discretionary authority under Rule 84 and assess against Avila an additional ten percent (10%) of the $3600 punitive damage award as damages for filing this appeal for purposes of delay only. Such an assessment is authorized where the appeal is less than meritorious and the statutory post-judgment interest fails to adequately compensate the appellee for the delay caused by appeal. Texas Employers' Ins. Ass'n v. Dempsey, 508 S.W.2d 858, 861 (Tex.Civ. App.Houston [1st Dist.] 1974, writ ref'd n.r.e.).
In this case, Havana has waited seven years since Avila collected the funds from Woodland Oaks Apartments and still has not received all of the money to which it is entitled. More than thirteen months have elapsed since Havana obtained a final judgment. Although Avila perfected his appeal, filed his brief, and appeared for oral argument, the points of error presented were, without exception, lacking in merit. We find that the post-judgment interest in this case does not adequately compensate Havana for the delay caused by the appeal. The judgment of the trial court is accordingly modified to include an additional ten percent (10%) of the punitive damage award as damages. All costs are assessed against Avila.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511746/ | 41 Md. App. 667 (1979)
398 A.2d 1244
WILLIAM OSCAR McCOY AND LUTHER ROBINSON
v.
STATE OF MARYLAND.
LEROY GAULT
v.
STATE OF MARYLAND.
Nos. 813, 1003, September Term, 1978.
Court of Special Appeals of Maryland.
Decided March 9, 1979.
*668 The cause was argued before THOMPSON, MASON and MACDANIEL, JJ.
Nancy Louise Cook, Assistant Public Defender, with whom was Alan H. Murrell, Public Defender, on the brief, for appellants.
Kathleen M. Sweeney, Assistant Attorney General, with whom were Stephen H. Sachs, Attorney General, Sandra A. O'Connor, State's Attorney for Baltimore County, and Richard McAllister, Assistant State's Attorney for Baltimore County, on the brief, for appellee.
MACDANIEL, J., delivered the opinion of the Court.
Following a non-jury trial on August 2, 1978, in the Circuit Court for Baltimore County, co-defendants Leroy Gault (appellant Gault), William Oscar McCoy (appellant McCoy), and Luther Robinson (appellant Robinson) were convicted of larceny to the value of $100 or more. Appellants McCoy and Robinson filed a joint appeal to this Court (September Term, 1978, No. 813), and appellant Gault filed a separate appeal (September Term, 1978, No. 1003). These appeals have been consolidated and will be addressed together in this opinion.
Vernon Payne, a night manager, testified in the court below that he left the premises of Beverage Capital, Inc. around 1:00 a.m. on April 13, 1978. As he was leaving, he saw a cream-colored van with two persons inside enter the lot of the plant. He had previously locked the only two gates to the plant. Mr. Payne called the police from a gas station across the street. When he returned to the plant, he saw appellant Robinson hauling skids with a tow motor loaded with cases of soft drinks. He observed the van backed up to the loading *669 dock, and the doors were open. There were cases of soda both inside the van and on the loading dock.
On cross-examination by counsel for appellant Gault, Mr. Payne stated that appellant Robinson was an employee of Beverage Capital but that he did not deal with soft drinks as part of his employment. Appellant Robinson had no reason to be on the premises at that time.
Officer Miller pursued a subject running from the van and subsequently apprehended appellant Gault. Another officer found appellant McCoy crouched in the van, which belonged to appellant Gault. Appellant Robinson was later apprehended walking in the vicinity of the Beverage Capital building. When asked what he was doing there, he replied, according to Officer Kroner, that "he worked there and was just coming out for a breath of air."
There were 115 cases of soft drinks inside the van and 103 cases on the loading dock.
The appellants, as named below, make the following arguments:
1. That the lower court failed to follow the proper procedures relating to the waiver of a jury trial. (All three appellants.)
2. That Mr. Payne was not competent to testify regarding the value of the property allegedly stolen. (All three appellants.)
3. That the lower court erred in admitting against them evidence solicited on re-direct examination following cross-examination only by appellant Gault. (Appellants McCoy and Robinson.)
4. That, assuming, arguendo, proof of value, the evidence was insufficient to sustain a guilty verdict. (Appellant Robinson.)
I.
The appellants contend that their convictions must be reversed because the trial court failed to comply with *670 Maryland Rule 735, Election of Court or Jury Trial, effective July 1, 1977, which provides:
"a. How Made.
Subject to section e of this Rule, a defendant shall elect to be tried by a jury or by the court. The election shall be made pursuant to section b of this Rule and shall be filed within the time for filing a plea pursuant to Rule 731 (Pleas). If the defendant elects to be tried by the court, the State may not elect a jury trial. After an election has been filed, the court may not permit the defendant to change his election except upon motion made prior to trial and for good cause shown. In determining whether to allow a change in election, the court shall give due regard to the extent, if any, to which trial would be delayed by the change.
b. Form of Election.
An election of a court or jury trial shall be in writing, signed by the defendant, witnessed by his counsel, if any, and filed with the clerk of the court in which the case is pending. It shall be substantially in the following form:
(caption of the case)
Election of Court Trial or Jury Trial
I know that I have a right to be tried by a jury of 12 persons or by the court without a jury. I am aware that before a finding of guilty in a jury trial all 12 jurors must find that I am guilty beyond a reasonable doubt. I am aware that before a finding of guilty in a court trial the judge must find that I am guilty beyond a reasonable doubt.
I hereby elect to be tried by: .... ...
(insert "the court" or "a jury")
I make this election knowingly and voluntarily and with full knowledge that I *671 may not be permitted to change this election.
Witness:
. . . . . . . . . . . . . . . .
Signature of Counsel Signature of
Defendant
Date: . . . . .
c. When No Election Filed.
If the election is not filed within the time provided by this Rule, the court, on its own motion or upon the motion of the State's Attorney, may require the defendant, together with his counsel, if any, to appear before the court for the purpose of making the election in open court. If the defendant fails or refuses to make an election after being advised by the court on the record that his failure or refusal will constitute a waiver of his right to a trial by jury and if the court determines that the defendant knowingly and voluntarily is waiving his right with full knowledge of it, the defendant may then be tried by the court.
d. When Court Trial Elected.
If the defendant files an election to be tried by the court, the trial of the case on its merits before the court may not proceed until the court determines, after inquiry of the defendant on the record, that the defendant has made his election for a court trial with full knowledge of his right to a jury trial and that he has knowingly and voluntarily waived the right. If the court determines otherwise, it shall give the defendant another election pursuant to this Rule.
e. Causes From District Court.
Where the defendant has a right to a jury trial and his cause has been transferred from the District Court because he has demanded a jury trial, he shall be tried by a jury and may not elect a court trial *672 except with leave of court for good cause shown."[1] (Emphasis supplied.)
The record fails to show any election, under section b, of a court or jury trial by the appellants prior to the day of trial. At the trial, the following exchange took place:
"THE COURT: Now, you have a right to a trial by jury. What's the choice
there?
MR. WHITE: As to Mr. Gault, Your Honor, he is aware that he has a right
to a jury and he understands what a jury is, 12 people
selected to hear this case. In which case they must return a
unanimous verdict of guilt, either guilty or not guilty. He
elects to waive that right and be tried by the court.
THE COURT: Very well. Mr. McCoy?
MR. GOODMAN: Yes, sir. As far as Mr. McCoy's concerned, court trial, Your
Honor. Waiver of jury trial, the same as Mr. White just
explained to his client.
THE COURT: Mr. Robinson?
MR. SHUMAN: Your Honor, Mr. Robinson's waiving his right to a jury trial
and will take a court trial. He has been fully advised that,
of his Constitutional right to a trial by a jury comprised
of 12 people. And knowing that
*673 right he is waiving his Constitutional right to a jury
trial.
THE COURT: Very well then."
Relying on this Court's ruling in Biddle v. State, 40 Md. App. 399, 407, 392 A.2d 100, 104 (1978), the appellants argue that:
"... the trial court [may not] proceed with trial on the merits until there has been compliance with Rule 735 d, i.e., a determination on the record of a knowing and intelligent waiver of the right to a trial by jury. Cf. Davis v. State, 278 Md. 103, 361 A.2d 113 (1976). A waiver of a constitutional right must appear affirmatively in the record, Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969)...."
They contend that the record in the case sub judice fails to show a determination by the lower court
"after inquiry of the defendant on the record, that the defendant has made his election for a court trial with full knowledge of his right to a jury trial and that he has knowingly and voluntarily waived the right." Md. Rule 735 d.
We disagree.
The present case is factually different from the Biddle case, supra, where this Court held that the record unequivocally showed non-compliance with section d. In that case the record failed to show that the court gave any explanation of his rights. In the present case, the court informed the appellants that they had a right to a trial by jury and asked each of them whether it was waived. In response, each of the attorneys explained his client's understanding of his right and indicated that it was waived.
*674 In Countess v. State, 41 Md. App. 649, 398 A.2d 806 (1979), we said:
"There is no `magic litany' which must take place in the courtroom to demonstrate an effective waiver of the constitutional right to a jury trial. Although Rule 735 d now requires inquiry by the court of the defendant, the exact questions are not mandated. Rather, compliance with this rule must be determined by this Court from a review of the record in each case."
In addition, while the decision to waive the right to a jury trial must be made by the defendant, it may be voiced by his counsel. In Miller v. Warden, 16 Md. App. 614, 623-24, 299 A.2d 862, 868 (1973),[2] we said:
"... it is settled that the decision of the accused in this regard, albeit of necessity made by him, need not be `announced' by him.... It is sufficient that the decision, even though announced by counsel, have been in fact made or acquiesced in by the accused."
Similarly, counsel's explanation of his client's understanding of his rights acts as the client's own explanation provided that the client acquiesces.
A review of the record in this case convinces us that the mandatory requirements of Rule 735 d have been met. As indicated above, counsel for each appellant announced the waiver of a jury trial and explained his client's understanding of his right. At no time did the appellants, all of whom were present, voice any objection. Indeed, prior to the commencement of the State's case, each appellant indicated that he was satisfied with the services of his attorney. Together, all of this shows that each appellant made his election of a court trial with full knowledge of his right to a *675 jury trial and each knowingly and voluntarily waived the right.
II
Mr. Payne, the night manager of Beverage Capital, testified that the average value of a case of soft drinks was $2.88,[3] thereby establishing that the value of the goods stolen was over $100. The appellants argue that, because Mr. Payne was not competent to testify as to value, the lower court erred in allowing this testimony. This argument has no merit.
The night manager possessed the necessary knowledge of value of the goods stolen to support his testimony. Mr. Payne oversaw the stock of Beverage Capital as part of his general duties, and he had knowledge of the general sales prices of the items sold.
In addition, Mr. Payne, or, for that matter, the court itself, could easily infer that the value of each of the 218 cases of drinks involved need only be 50¢ for the total to exceed $100. Without any doubt, goods of a value in excess of $100 actually were stolen. See Shipley v. State, 220 Md. 463, 467, 154 A.2d 708, 710 (1959).
III
Appellants Robinson and McCoy argue, next, that the lower court erred in admitting against them evidence elicited on re-direct examination following cross-examination of Mr. Payne by appellant Gault only. With respect to their cases, they argue, there could be no re-direct examination. We disagree. As we said in Murray v. State, 35 Md. App. 612, 616, 371 A.2d 719, 722 (1977):
"That the indisputably competent testimony happened to come through the medium [of a co-defendant's case] at a joint trial has no influence upon the overriding consideration that the testimony was competent and that the appellant had no right to be shielded from it. Poff v. State, 3 Md. App. 289, 292, 239 A.2d 121."
*676 IV
Appellant Robinson argues, finally, that, assuming, arguendo, no other errors, there was insufficient evidence with respect to him to sustain the guilty verdict. We disagree. As we stated in Jones v. State, 11 Md. App. 468, 475, 275 A.2d 508, 511 (1971):
"Under the law of this State the test to be applied by this Court in reaching a determination of the sufficiency of the evidence in a non-jury case is whether the evidence either shows directly or supports a rational inference of the facts to be proved, from which the lower court could fairly be convinced, beyond a reasonable doubt, of the defendant's guilt of the offense charged, Williams and McClelland v. State, 5 Md. App. 450; Jones v. State, 5 Md. App. 180; Roeder v. State, 4 Md. App. 705; and the judgment of the lower court will not be set aside unless clearly erroneous. Maryland Rule 1086."
The fact of appellant Robinson's employment by Beverage Capital does not make it impossible for him to have committed a trespassory taking and, hence, be guilty of larceny. Mr. Payne, as indicated above, testified that the appellant Robinson did not deal with soft drinks in his employment. In addition, the premises were locked for the night and Robinson had no reason to be on the premises at the time of the larceny. This evidence is sufficient under the above test, and the trial judge was not clearly erroneous in finding that Robinson had committed the crime with which he was charged.
Judgments affirmed.
Costs to be paid by appellants.
NOTES
[1] Effective January 1, 1979, various changes have been made in Rule 735. None of the changes would result in a different outcome in the present case.
[2] In Biddle, supra, it is stated at 407 [104]:
"One effect of Rule 735 is to make out holding in Miller v. Warden, supra, no longer viable. It is, therefore, expressly overruled."
The overruling of Miller was on other grounds not applicable here.
[3] Although on several occasions, objections to this testimony were sustained, on other occasions the testimony was allowed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511881/ | 502 F. Supp. 1326 (1980)
ZEIGLER COAL COMPANY, Plaintiff,
v.
F. Ray MARSHALL, Secretary of Labor, et al., Defendants.
Civ. No. 80-4494.
United States District Court, S. D. Illinois.
December 16, 1980.
*1327 Charles D. Winters and John S. Brewster, Winters, Brewster, Brown & Permar, Marion, Ill., Alvin J. McKenna and D. Michael Miller, Alexander, Ebinger, Fisher, McAlister & Lawrence, Columbus, Ohio, J. Halbert Woods and John J. Adams, Zeigler Coal Co., Des Plaines, Ill., for plaintiff.
James R. Burgess, Jr., U. S. Atty., East St. Louis, Ill., Frederick W. Moncrief, U. S. Dept. of Labor, Arlington, Va., for defendants.
ORDER
FOREMAN, Chief Judge:
Plaintiff, Zeigler Coal Company, has brought this action seeking a preliminary injunction or in the alternative, a temporary restraining order. The basis of Zeigler's claim for relief lies in its allegations of due process deprivations and the constitutional invalidity of 30 U.S.C. § 815(c), if not facially, at least as applied to Zeigler. These contentions are more fully developed below.
I.
The relevant facts are as follows:
1. Plaintiff, Zeigler Coal Company, is an Illinois corporation engaged in the business of underground mining operations. The mine here involved is its No. 11 Mine in Randolph County, Illinois.
2. On or about December 21, 1979, defendant Gene Hand, who was, prior to that date, a full-time employee of Zeigler, was discharged for insubordination and poor work performance.
3. Mr. Hand soon thereafter filed a complaint with the Mine Safety and Health Administration[1] (hereinafter MSHA) alleging that his firing was discriminatory, and, therefore, unlawful. In support of this averment, Hand offered his account of the incidents which he felt contributed to his termination.[2]
*1328 4. By letter dated February 19, 1980, MSHA advised Zeigler of Hand's claim. This letter also stated that MSHA had commenced investigation of the claim as required by statute.[3]
5. On May 19, 1980, the Secretary of Labor filed an application for temporary reinstatement of Gene Hand in the position from which he was terminated by Zeigler. The application contained a finding by MSHA for the Secretary of Labor that Hand's claim was "not frivolously brought."[4] Defendant James A. Broderick, who is the Chief Administrative Law Judge (hereinafter, the "ALJ") for the U. S. Department of Labor, entered an order on May 20, 1980, temporarily reinstating Hand, effective immediately. The ALJ's order noted that the Secretary's finding was not facially arbitrary or capricious.
6. Zeigler then requested hearing on the reinstatement, as was its right pursuant to 29 C.F.R. § 2700.44 (Revised as of July 1, 1979).[5]
7. The hearing requested by Zeigler was convened on June 9, 1980, in St. Louis, Missouri, Judge Broderick presiding. The *1329 ALJ concluded that the Secretary's decision regarding the frivolousness of Hand's complaint was not arbitrarily or capriciously made.
In addition to the above mentioned motion for injunctive relief filed by Zeigler, the following issues are before the Court for disposition:
A. Zeigler's assertion that defendants are without jurisdiction to consider Hand's claim of discrimination because Hand is not a "miner" within the meaning of 30 U.S.C. § 815(c).
B. Defendants' claim that this Court is without jurisdiction to decide Zeigler's request for injunctive relief. This is contained in defendant Federal Mine Safety and Health Commission's Motion to Dismiss.
The latter mentioned disputes will be addressed prior to proceeding to Zeigler's request for injunctive relief.
II.
A. Defendants' jurisdiction to consider Hand's claim of discrimination.
30 U.S.C. § 815(c) protects "[a]ny miner or applicant for employment or representative of miners ..." who believes he has been discharged or reprimanded in violation of the Act. Zeigler has maintained that Hand, who is admittedly a section foreman,[6] is not a "miner" as contemplated by the Act and as such has no right to redress through its provisions.
The law is clear that a determination regarding Mr. Hand's status as a "miner" envisioned by the Act is properly left to agency expertise. In the Matter of Sauget Industrial Research and Treatment Association, 477 F. Supp. 88, 90 (S.D.Ill.1979). Following MSHA's investigation of Hand's complaint, an application for his temporary reinstatement was submitted. Paragraph 3 of that application contains the administrative finding that Hand was a "miner" as defined in Section 3(g) of the Act, 30 U.S.C. § 802(g).
Even if this Court felt the administrative characterization of Hand as a "miner" within the purview of the Act was so arbitrarily made as to require reversal, it would be precluded from disturbing the agency ruling by 30 U.S.C. § 816(a)(1). That subsection specifically designates review of factual determinations to the Court of Appeals for the district in which the violation is alleged to have occurred or in the U. S. Court of Appeals for the District of Columbia. A person aggrieved by an MSHA Review Commission ruling has 30 days in which to file its objections in the appropriate Court of Appeals. In view of this Court's inability to comment on Hand's status as a "miner" and the passage of more than 30 days since MSHA's findings, it can only be concluded that the defendants' jurisdiction to consider Hand's complaint is unassailable.
B. Defendants' claim that this Court lacks jurisdiction to decide Zeigler's Motion for Injunctive Relief.
As noted above, § 816(a)(1) mandates that review of MSHA orders is solely with Circuit Courts of Appeal. Defendants suggest, therefore, that Zeigler's only forum in this matter would have been the Court of Appeals for the Seventh Judicial Circuit. This Court does not agree with defendants.
The intent embodied in the legislative history of MSHA[7] viewed in conjunction with restraints generally placed upon the scope of an administrative body's adjudicatory functions compels determination that jurisdiction to decide Zeigler's due process allegations lies properly in this Court.
Under § 816(a)(1), appellate courts are limited in their scope of review to those determinations of the Commission which appear of record. Even then, a court of appeals may not interpose its own judgment regarding the facts presented, but is *1330 restricted to ruling whether the Commission's decision is based upon substantial evidence of the record as a whole. The case of Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S. Ct. 456, 95 L. Ed. 456 (1950), is cited as a guideline. It appears to this Court that the restrictions on judicial review were not implemented for any reason other than to foster two paramount tenets of MSHA; those being minimal judicial interference with the administrative fact finding process and expeditious handling of claims under the Act. To hold that Zeigler's due process claims are within the restrictions of § 816(a)(1) would be wholly inconsistent with MSHA's expressed purposes.
In addition, a curious situation would develop if the Court were to rule with defendants on the issue of jurisdiction. It is well established that as a general rule, federal administrative agencies have no power to pass upon the constitutionality of administrative or legislative action. Spiegel, Inc. v. F. T. C., 540 F.2d 287, 294 (7th Cir. 1976). Resolution of Zeigler's due process claim would then be first dealt with in the Seventh Circuit Court of Appeals. This is, of course, untenable as it violates both the letter and intent of MSHA. Under the Act, judicial review of Commission rulings is restricted to the record. When judicial review of agency action is statutorily created, the court's jurisdiction with respect to such review extends as far and no further than the statute authorizes. S. E. C. v. Louisiana Public Service Commission, 353 U.S. 368, 77 S. Ct. 855, 1 L. Ed. 2d 897 (1957); Martin Marietta Corporation v. FTC, 376 F.2d 430 (7th Cir. 1967).
Accordingly, this Court knows of no reason why it should not entertain Zeigler's due process claim.
III.
As noted above, Zeigler's motion for injunctive relief is predicated upon assertions that it was denied fundamental due process at various stages of the Commission investigation and hearings regarding Mr. Hand's claim that he was terminated in violation of 30 U.S.C. § 815(c)(1). It is important to note at this juncture that a final decision on the merits of Mr. Hand's claim has not been conducted. That is scheduled for February, 1981. Zeigler's protest centers on the ex parte nature of Hand's temporary reinstatement pursuant to § 815(c) and the manner in which the post-reinstatement hearing held pursuant to 29 C.F.R. § 2700.44, transpired.
The Court does not feel a lengthy reiteration of the facts will be necessary or helpful.
Since the Court has detected no substantial deviations from statutory mandate committed by defendants in the processing to date of Mr. Hand's claim, such scrutiny would obfuscate the real issue. That issue is whether the temporary reinstatement procedures and subsequent review hearings created by 30 U.S.C. § 815(c) violate the due process requirements of the Fifth Amendment to the United States Constitution. This Court thinks not.
To understand properly the problem at hand, it is necessary to examine the legislative history of the Federal Mine Safety and Health Act of 1977 in conjunction with the concept of due process.
The mining of coal and other minerals as well as its concomitant hazards have long been the subjects of legislative concern. The Federal Mine Safety and Health Act Amendments Act of 1977 ["the Act"] represents the latest congressional reaction to the series of tragic disasters which have occurred annually in our nation's mines. A primary objective of the Act is to facilitate claims against noncompliant mine operators and encourage individual miners to aid the enforcement of safety regulations without fear of reprisal. The provision of which Zeigler complains, 30 U.S.C. § 816(c), is so designed.
The thrust of § 816(c) is clear to this Court. An individual miner may freely demand compliance with safety regulations in the mine secure in the knowledge that any actions against him affecting his job security which even suggest retaliation will be *1331 dealt with on an expedited, informal basis, and most importantly, he will be restored to his livelihood pending final hearing of the matter.
The mine operator is afforded some protection in that a miner will not be reinstated until there is a determination that his claim of discrimination was "not frivolously brought." The respondent mine operator may also request a hearing pursuant to 29 C.F.R. § 2700.44 at which a determination must be made by an administrative law judge that the "not frivolously brought" finding was not in itself arbitrary and capricious.
Zeigler contends that procedural due process requires a full evidentiary hearing prior to issuance of a temporary reinstatement order. Zeigler also feels that due process was further denied at the June 9, 1980 hearing to challenge Hand's reinstatement. More specifically, Zeigler complains of the limited scope of the hearing at which defendant Chief Administrative Law Judge Broderick continued the reinstatement order. It must be emphasized at this point that the Court's ruling on these matters is strictly limited to the due process aspects of Zeigler's claims. To consider a broader range of issues is prohibited by the jurisdictional grant to courts of appeal in § 816(a)(1).
This Court has previously held that due process is a flexible concept with its requirements depending on competing interests. Bono v. Saxbe, 450 F. Supp. 934 (Ce.D. Ill.1978); citing, Wolff v. McDonnell, 418 U.S. 539, 94 S. Ct. 2963, 41 L. Ed. 2d 935 (1974). Broadly stated, the competing interests here are Zeigler's right to operate its business free from unnecessary and arbritrary government interference and the governmental objective of enforcing the provisions of the Federal Mine Safety and Health Act of 1977. A narrower issue embracing Zeigler's grievances regarding the timing and scope of hearings to review Commission orders is also presented.
Both the United States Supreme Court and Seventh Circuit Court of Appeals have confirmed that "Congress has broad latitude to readjust the economic burdens of the private sector in furtherance of a public purpose. Only if Congress legislates to achieve its purpose in an `arbitrary and irrational way' is due process violated." Nachman Corp. v. Pension Benefit Guarantee Corp., 592 F.2d 947, 958 (7th Cir. 1979); citing, Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15, 96 S. Ct. 2882, 2892, 49 L. Ed. 2d 752 (1976); and, Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 98 S. Ct. 2620, 57 L. Ed. 2d 595 (1978). The Seventh Circuit, in Nachman, went on to outline factors which should guide courts in assessing the "rationality" standard in cases such as now before the Court. It stated:
"Rationality must be determined by a comparison of the problem to be remedied with the nature and scope of the burden imposed to remedy that problem. In evaluating the nature and scope of the burden, it is appropriate to consider the reliance interests of the parties affected, Allied Structural Steel Co., 438 U.S. 234, 98 S. Ct. 2716 [57 L. Ed. 2d 727]; Adams Nursing Home of Williamstown, Inc. v. Mathews, 548 F.2d 1077, 1080-81 (1st Cir. 1977); whether the impairment of the private interest is effected in an area previously subjected to regulatory control, Allied Structural Steel Co., 438 U.S. 234, 98 S. Ct. 2716 [57 L. Ed. 2d 727]; Federal Housing Administration v. The Darlington, Inc., 358 U.S. 84, 91, 79 S. Ct. 141 [146], 3 L. Ed. 2d 132 (1958); the equities of imposing the legislative burdens, Alton Railroad, 295 U.S. [330] at 354, 55 S. Ct. 758 [at 764, 79 L. Ed. 1468]; Turner Elkhorn Mining, 428 U.S. [1] at 19, 96 S. Ct. 2882 [at 2894, 49 L. Ed. 2d 752], and the inclusion of statutory provisions designed to limit and moderate the impact of the burdens. W. B. Worthen Co., 292 U.S. [426] at 434, 54 S. Ct. 816 [at 819]; Allied Structural Steel Co., 438 U.S. 234, 98 S. Ct. 2716 [57 L. Ed. 2d 727]. It must be emphasized that although these factors might improperly be used to express merely judicial approval or disapproval of the balance struck by Congress, they *1332 must only be used to determine whether the legislation represents a rational means to a legitimate end."
Nachman v. Pension Benefits Guaranty Corp., supra, at 960.
There appears to be little question that encouraging miners to report without hesitation unsafe conditions in the mines is a legitimate governmental goal. The Court is also satisfied that the procedures complained of by Zeigler are a rational means of achieving that goal.
The government's power to order temporary reinstatement is not carte blanche. Although a petitioner for reinstatement is not faced with a difficult burden of proof, he must nevertheless state a claim from which a reasonable inference of discrimination may be made. This is entirely consistent with the legislative purpose interpreted by this Court.
The respondent coal company is not left totally in the cold. It is fully advised of a miner's claims at the inception of MSHA's investigation. If reinstatement is ordered, the coal company may request a hearing pursuant to 29 C.F.R. § 2700.44. That the hearing does not occur until after reinstatement does not, as Zeigler contends, require a finding of constitutional infirmity in light of the valid governmental interests at stake. Navato v. Sletten, 560 F.2d 340, 345 (8th Cir. 1977); citing, Board of Regents v. Roth, 408 U.S. 564, 570 n.7, 92 S. Ct. 2701, 2705 n.7, 33 L. Ed. 2d 548 (1972).
Zeigler's challenges to the narrow scope of the post-reinstatement hearing also raise no issues of grave constitutional concern. To hold otherwise would unduly frustrate the legislative purpose and be inconsistent with the Court's reasoning heretofore advanced. In addition, a full hearing on the merits of this matter is scheduled for February 1981.
In conclusion, this Court finds that Zeigler has not made an adequate showing that its due process claim will succeed on the merits. It is, in fact, quite doubtful. Accordingly, Zeigler's Motion for Preliminary Injunctive Relief is hereby DENIED.
IT IS SO ORDERED.
NOTES
[1] Mr. Hand's complaint was filed pursuant to Section 105(c) of the Federal Mine Safety and Health Act of 1977; 30 U.S.C. § 801, et seq.
[2] The following letter was submitted and bears Mr. Hand's signature:
I was employed as a miner at the Zeigler No. 11 Mine, Zeigler Coal Company as a foreman. On November 5, 1979, I was put in charge of recovery work of getting machinery out of a squeezed section at Zeigler No. 11 Mine on the second shift. I had four men assigned to me to do this work. We were on this recovery work weekends and holidays and overtime up to four hours every night for two weeks. Upon completion of the job the stress and strain of this hazardous work put me under a doctor's care from December 3rd to December 9th, 1979. I am still taking medication from this condition resulting from this stress and strain. I had certain procedures to abide by from the Federal and State agencies on this recovery work. After completing this work, the Federal and State agencies were pleased with the job I did. On December 21, 1979, I was in charge of Unit 3, 1st West off Main South crew. There were 14 men in this crew. This section was having problems with short roof bolting and torqueing below and above normal range. I had a safety meeting with the crew on this condition. The section had just been bolted up on the second shift of December 20, 1979. Several bolts were short pinned and under torque range and the crew was upset with me over this condition. My main concern was complying with the approved roof control plan and the safety of the miners. I instructed the roof bolters as to where and how this affected area was to be supported and the procedure that was to be followed. This work was in progress when the Mine Superintendent came on my working section. Several miners approached him (the superintendent) on the torqueing of the roof bolts. After this meeting with the miners, he (the superintendent) gave me an order to assign one man to torque the roof bolts. This caused confusion among all the miners on the section. This section had had two massive falls above the anchorage zone of the roof bolts and the Mine Safety and Health Administration was raising hell with the operator for improper short bolting. I was trying to prevent this and make sure all roof bolts used for roof support were in adequate anchorage. I told the Superintendent that I had signed the preshift examiners report and that I was responsible for the safety of the miners on this working section. Since the torqueing of the roof bolts was the roof bolter's and my responsibility, I felt that by assigning any unqualified miner to this task would be a violation of our approved roof control plan. I then asked the Superintendent to leave the section. The roof control was very poor at this mine. The roof bolters continually installed short roof bolts for permanent supports and did not anchor in the strongest strata. This practice has caused several roof falls making miners feel unsafe with roof bolting as roof support. The Superintendent interfered with my safety as well as other miners on the section. The miners on the section notified him of this danger. I instructed the roof bolters to anchor bolts in at least 12 inches of limestone. He still maintained this wasn't necessary. When the shift was completed, I was summoned to the Superintendent's office and discharged for insubordination. I feel like I have been discriminated against by trying to comply with Federal Laws and Regulations. Therefore, I am asking to be reinstated to my Forman position and to be made whole. Since my discharge I have tried to gain employment with other coal companies. I know by my contacts that I have been blackballed by officers of Zeigler Coal Company and discriminated against. (Emphasis original)
[3] 30 U.S.C. § 815(c)(2) states in pertinent part: "Upon receipt of such complaint, the Secretary shall forward a copy of the complaint to the respondent and shall cause such investigation to be made as he deems appropriate."
[4] 30 U.S.C. § 815(c)(2) states in pertinent part: "... if the Secretary finds such complaint was not frivolously brought, the Commission, on an expedited basis upon application of the Secretary, shall order the immediate reinstatement of the miner pending final order on the complaint."
[5] 29 C.F.R. § 2700.44 states in part: "If the person against whom relief is sought requests a hearing on the order, a Judge shall, within 5 days after the request is filed, hold a hearing to determine whether the Secretary's finding was arbitrarily or capriciously made. The Judge may then dissolve, modify or continue the order."
[6] See Mr. Hand's letter which is set out in footnote 2 of this opinion.
[7] See, 3 U. S. Code Congressional and Administrative News, 3401, et seq. (95th Congress, 1st Session, 1977). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511760/ | 761 S.W.2d 800 (1988)
SPT FEDERAL CREDIT UNION, Appellant,
v.
BIG H AUTO AUCTION, INC., Appellee.
No. 01-87-00715-CV.
Court of Appeals of Texas, Houston (1st Dist.).
October 13, 1988.
Rehearing Denied December 1, 1988.
Michael T. Neville, Eikenburg & Stiles, Houston, for appellant.
William T. Green, Green, Patterson & Schultz, Houston, for appellee.
*801 Before WARREN, DUGGAN and LEVY, JJ.
LEVY, Justice.
This is an appeal of a judgment based on a directed verdict. Appellant, SPT Federal Credit Union ("SPT"), repossessed a shrimp boat rig from one of its members when the member became unable to make the payments on the boat rig. SPT delivered the rig to appellee, Big "H" Auto Auction ("Big H"), an auction house, for sale at public auction, with instructions not to accept a bid lower than $3,800. Big H subsequently sold the boat rig for $700.
SPT sued Big H for damages resulting from this sale, predicated on breach of contract and deceptive trade practices. At the conclusion of SPT's case-in-chief, Big H moved for a directed verdict on the ground that SPT failed to prove any alleged damages. The trial court granted the motion and rendered judgment for Big H that SPT take nothing.
While SPT urges the theory of conversion in its appeal, this theory was not pleaded below nor was it urged at trial, and therefore is not properly before us on appeal.
SPT asserts in its first point of error that the trial court erred in granting Big H's motion for instructed verdict because SPT's presentation of evidence of damages should have precluded such a directed verdict. SPT urges in its second point of error that the trial court erred in excluding expert witness Robert W. Armstrong's opinion testimony as to the fair market value of the shrimp boat rig. SPT avers that Armstrong qualified as an expert and that a proper foundation for his opinion had been laid. We agree with this point and reverse.
The standard of review for an instructed verdict is set forth in Ortiz v. Santa Rosa Medical Center, 702 S.W.2d 701, 703-704 (Tex.App.San Antonio 1985, writ ref'd n.r.e.):
The standard by which this Court reviews instructed verdicts is well known. We will view the evidence in the light most favorable to the non-moving party and will indulge him with every reasonable inference that properly may be drawn from the evidence. [citations omitted] All contrary evidence and inferences must be disregarded. Henderson v. Travelers Ins. Co., 544 S.W.2d 649, 650 (Tex.1976).
The appellant has the burden of establishing on appeal that he has presented some evidence on each and every element of his cause of action and that the instructed verdict cannot be supported on any grounds set forth in the appellee's motion. Guynn v. Corpus Christi Bank & Trust, 589 S.W.2d 764 (Tex.Civ.App. Corpus Christi 1979, writ dism'd). We will affirm the granting of the motion only where the evidence establishes the movant's right to an instructed verdict with such certainty that reasonable minds could not differ as to his entitlement to it. Corbin v. Safeway Stores, Inc., 648 S.W.2d 292, 295 (Tex.1983).
Upon Big H's motion for instructed verdict, the trial court entered its judgment on the theory that there was not enough evidence in the case to submit it to the jury.
SPT contends that Big H moved for the instructed verdict on the ground that SPT had failed to prove any alleged damages, but Big H claims that its motion was premised on SPT's failure to submit any competent evidence of damages. SPT urges that the public sale at auction of the shrimp boat for $700 represented some evidence of the boat's fair market value, precluding the trial court's directed verdict.
Actual sale price is not prima facie evidence of market value where something indicates that the sale is out of the ordinary in some way. Gulf, Colorado & Santa Fe Ry. v. Hillis, 320 S.W.2d 687, 691 (Tex.Civ. App.Waco 1959, no writ). In the case at bar, the boat was reclaimed by the credit union after the boat's owner defaulted on a loan made by SPT to him for its purchase. SPT then turned the boat over to the Big H for sale in an attempt to recover the money it had originally loaned for its purchase. This does not constitute an "ordinary" sale. Additionally, "evidence of what property sold for at a foreclosure sale is not competent *802 evidence of its fair market value, since the transaction is not a free one between a willing seller and a willing buyer." Price v. Gulf Atl. Life Ins. Co., 621 S.W.2d 185, 187 (Tex.Civ.App.Texarkana 1981, writ ref'd n.r.e.).
Accordingly, the trial court did not err in concluding that evidence showing that the boat sold at auction for $700 was not sufficient to show the boat's fair market value.
Gladys Walther, an employee of SPT, testified without objection that in her opinion the boat had a fair market value of between $4,500 and $4,800. However, on cross-examination she admitted that her opinion was based on the value of the boat when the loan for its purchase was made in 1982, and not on the boat's value in May, 1984, when it was delivered to Big H. It was not, therefore, competent evidence of the boat's fair market value at the time of the boat's sale by Big H.
James M. Burrell, another SPT employee, testified that he thought the boat should have brought at least $3,800. Burrell testified that SPT had financed the boat for $3,900 in 1982 and that SPT had hoped to recover $3,800 on the boat when it authorized Big H to sell it. There is no evidence that Burrell was familiar with the value of any type of boat, or that his testimony stemmed from anything other than his employer's desire to recover its loan.
We conclude that the trial court was correct in finding that Walther's and Burrell's testimony was not expert or competent evidence of the boat's fair market value. Appellant's first point of error is overruled.
We now turn to the preferred expert testimony of Robert W. Armstrong, which was excluded from evidence, and which forms the basis of appellant's second point of error.
Tex.R.Civ.Evid. 702 provides that:
[i]f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.
This Court has held that "[a]s a general rule, the question of whether a person is qualified to give opinion testimony in a given area is a matter within the judicial discretion of the trial court and will be overturned only for abuse." Southwestern Bell Tel. Co. v. Sims, 615 S.W.2d 858, 862 (Tex.Civ.App.Houston [1st Dist.] 1981, no writ) (cites omitted). In Texas it is well settled that a witness testifying to an item's value
must also have a knowledge of the particular thing to be valued, where its value depends upon something peculiar to itself, such as physical condition, individual qualities or particular uses. Here, again the sufficiency of the witness' acquaintance with the thing to be valued must be left to the trial judge.
Bell v. Bradshaw, 342 S.W.2d 185, 191 (Tex.Civ.App.Dallas 1960, no writ). "Once a person is qualified as an expert he may give his opinion on any matter within the realm of his expertise, so long as the facts upon which his opinion is based either are within his personal knowledge or otherwise are properly in evidence." Southwestern Bell Tel., 615 S.W.2d at 862 (cites omitted).
Armstrong, an independent marine surveyor, was highly experienced in appraising the value of boats. He testified that in arriving at the shrimp boat's value a number of factors needed to be considered such as, "[h]ull condition, compartition, structure, equipmentthe electronics, specifically; on a fishing boat the block, trawl winch, fishing gear; the electrical wiring protection, fire breakers, all electronics; as far as equipment, machinery, the main propulsion, firefighting and life-saving equipment."
Armstrong testified that he had never inspected or viewed the shrimp boat in question. His opinion as to its value was based on what he had been told about the boat through a hypothetical question and on "a couple of pictures." No testimony was offered at trial concerning the numerous *803 factors listed by Armstrong as being important in determining the value of the shrimp boat. Although Armstrong could not base his testimony on personal observation, this disability would go only to the weight of his testimony, not to its admissibility. His expert testimony as to value was highly pertinent and predicated adequately upon the earlier testimony of James M. Burrell. It is well established that an expert witness may give an opinion based on a hypothetical question containing facts previously admitted into evidence. See MJW Producing Co. v. Sparkman, 655 S.W.2d 286, 290 (Tex.AppCorpus Christi 1983, no writ); Classified Parking Sys. v. Kirby, 507 S.W.2d 586, 589 (Tex.Civ.App. Houston [14th Dist.] 1974, no writ); Tex.R. Civ.P. 703. We conclude that the trial court erred in refusing to allow Armstrong to testify as an expert concerning the shrimp boat rig's fair market value, which he assessed in SPT's offer of proof at $6,000.
Appellant's second point of error is sustained.
Appellant contends in his third and final point of error that the trial court erred in admitting, over objection, evidence of a settlement offer from SPT to Big H. We need not discuss this point because of our disposition of STP's second point of error, but would briefly mention Tex.R.Civ.Evid. 408, which restricts evidence of compromise negotiations and conduct,[1] including settlement offers.
The judgment of the trial court is reversed, and the cause is remanded.
NOTES
[1] Tex.R.Civ.Evid. 408 provides in relevant part: Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount is not admissible to prove liability for, or invalidity of, the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2857562/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-92-178-CR
DONNIE RAY HOODYE,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF BASTROP COUNTY, 21ST JUDICIAL DISTRICT
NO. 7594, HONORABLE H.R. TOWSLEE, JUDGE PRESIDING
PER CURIAM
A jury found appellant guilty of forgery. Tex. Penal Code Ann. § 32.21 (West
1989 & Supp. 1993). The district court assessed punishment, enhanced by two previous felony
convictions, at imprisonment for twenty-five years.
Appellant contends in his first point of error that the court erred by admitting
evidence of extraneous offenses when there was no proof that he was the perpetrator of those
offenses. In his second point of error, appellant contends that the probative value of the
extraneous offenses was outweighed by their unfair prejudice.
The Charged Offense
In July 1991, checkbooks belonging to Benton Eskew were stolen from a house in
Bastrop. The accounts for which these checks were printed had been closed before the theft. On
July 18, one of the stolen checks was cashed by the clerk at a small Bastrop grocery store. The
check purported to be signed by Eskew and authorized payment of $50 to appellant, who endorsed
it in the clerk's presence. The check bore a notation that it was in payment for "mech," and
appellant told the clerk that he had been given the check after he did some work on Eskew's car.
Eskew testified that he did not know appellant, did not hire him to work on his car, and did not
sign the check in question.
The Extraneous Conduct Evidence
Ed Salmela's Testimony. Bastrop police officer Ed Salmela investigated the
charged offense. During his testimony, he was questioned by the prosecutor as follows:
Q. Now before we come back and talk about that actual transaction that we're
here for, let me get some other things at least talked about in brief. Now what I'm
going to ask you about is to give the jury some sort of background about whether
or not there has been indeed more than one forgery that's taken place in Bastrop
County, and what I'm talking about here are the activities of completely separate
individuals from this defendant.
Okay, so just a general question, have you worked four forgeries along about
that same time in this county?
A. Yes, sir, I have.
Q. Okay. And just in general, do those forgeries appear to be related, and by
that I mean are there some common characteristics of those forgeries?
A. Yes, sir.
MR. DUCLOUX [Defense counsel]: Objection, your Honor, relevancy.
MR. SANDERSON [Prosecutor]: Your Honor, we're trying to, obviously,
establish --
THE COURT: I'll overrule the objection.
The officer went on to testify, without further objection, that in each of the forgery cases he had
investigated, the forged check had been made payable to the person who presented the check for
payment, the payee had properly identified himself, and the endorsement was in handwriting
different from that on the face of the check. The latter fact led the officer to believe that more
than one person was involved in the criminal activity.
The prosecutor continued to question the officer about the other forgeries, prompting
appellant's next objection:
Q. Is Mr. Eskew the only person who had their checks stolen and had those
checks forged?
A. No.
Q. Within this forgery ring in which you have been working?
A. No, no. No, sir, I have other checks also.
Q. Okay, and who else do we have besides Benton Eskew?
A. I have Gladys Aldrich. Ms. Aldrich was basically done the same way, she
was placed into a nursing home within the city limits of Bastrop and, again, she
had her checkbooks and checks at her house and someone broke into her residence
and stole approximately a box of checks.
MR. DUCLOUX: I need to object, your Honor, I'm not sure exactly what the
idea is here but this is highly inflammatory to the defendant and it's hard for him
to defend himself against every forgery that's ever taken place in the County of
Bastrop.
MR. SANDERSON: Your Honor, we're not making that allegation.
THE COURT: Pardon me?
MR. SANDERSON: We're not making that allegation that this defendant is in any
way involved in these other forgeries, all we're trying to do is establish his link
with this ring of forgeries which occurred all at the same time, all by people who
knew one another, and they were all done in the same way. And there was only
three -- we will show three or four, perhaps, different victims. And by "victims"
I mean persons who has had their checkbooks stolen.
THE COURT: Are you offering it to prove intent?
MR. SANDERSON: To prove intent and knowledge.
THE COURT: Do you want to comment on that?
MR. DUCLOUX: Your Honor, there hasn't been any evidence put on by the
defendant to effect the rebutting of -- there hasn't been any defense of the theory
of "no intent" at this time.
THE COURT: I'll overrule the objection, you may go forward with the evidence.
The officer went on to testify, in answer to questions by the prosecutor, that fifteen checks stolen
from Gladys Aldrich had been forged and passed, that one check stolen from Austin Trailer Sales
and been forged and passed, and that two checks stolen from Earnest Caro had been forged and
passed. Salmela named ten people other than appellant who he believed were involved in this
"forgery ring," and described the status of the various charges brought against them. Two of
these persons, Verlie Davis and Dondus Green (the latter man believed by Salmela to be the "ring
leader") had criminal records which the officer related. The officer testified that these individuals
had passed the forged checks at numerous locations in Bastrop beginning in March 1991. In each
instance, the forged check had been made payable to the wrongdoer, who in turn made no effort
to disguise his or her identity.
Except as quoted above, appellant voiced no pertinent objections to Salmela's
testimony. Appellant did object when the State offered in evidence exhibits five, six, and seven,
large sheets of paper on which the prosecutor wrote the names of the victims and suspects as the
officer testified. Appellant urged that the exhibits were irrelevant, inflammatory, and evidence
of extraneous offenses. See Tex. R. Crim. Evid. 402, 403, 404. These objections were
overruled.
Gordon Lunsford's Testimony. Department of Public Safety trooper Gordon
Lunsford testified that, in August 1991, he went to a Bastrop grocery store in response to a report
that Verlie Davis, a man for whom there was an outstanding arrest warrant, was attempting to
pass a forged check. Lunsford arrested Davis and seized the check. The check, for $150, was
drawn on another account belonging to Benton Eskew, was made payable to Davis, and was
purportedly signed by Eskew. Like the check passed earlier by appellant, this check bore a
notation that it was in payment for "mech." Although Eskew was not shown this check and did
not expressly state that it was a forgery, he did testify that he did not write any check to Verlie
Davis. The jury could reasonably infer from the circumstances that this check was another of the
checks stolen from Eskew.
At the time of his arrest, Davis had two other checks belonging to Eskew, both for
the same account as the check he had attempted to pass. One of these checks was blank, the other
was made out for $160 payable to Larry Brown, was purportedly signed by Eskew, and bore the
notation that it was for "mech." As with the check Davis attempted to pass, Eskew did not
expressly identify either of these checks as among those stolen from him, but he did testify that
he had never written a check to Larry Brown. Again, the jury could reasonably infer from the
circumstances that these checks were among those stolen from Eskew.
Lunsford testified that Davis had driven to the grocery store in a car with two other
persons. One of these persons was appellant, who waited in the car as Davis attempted to pass
the forged check. Knowing that an arrest warrant had also been issued for appellant, Lunsford
arrested him after taking Davis into custody.
Appellant did not object to Lunsford's testimony describing Davis's attempt to pass
Eskew's check and Davis's possession of the other checks belonging to Eskew. Appellant
objected only to the admission of the checks themselves in evidence, asserting that the exhibits
were irrelevant and that any relevance they might have was outweighed by their unfair prejudice.
See Tex. R. Crim. Evid. 402, 403. These objections were overruled.
Discussion
Forgery is not a strict liability offense. In order to convict appellant, the State was
required to prove that he passed the forged check with intent to defraud another. This, in turn,
required the State to prove that appellant knew the check was forged. Pfleging v. State, 572
S.W.2d 517, 519 (Tex. Crim. App. 1978); Stuebgen v. State, 547 S.W.2d 29, 32 (Tex. Crim.
App. 1977). The check in question was made payable to appellant and appellant did not
misrepresent himself to the clerk to whom he presented the check. There is no evidence that
appellant stole the checks from Eskew or that appellant signed Eskew's name to the check. The
State argues that, under the circumstances, evidence that appellant was a member of a "forgery
ring" operating in Bastrop was admissible to prove appellant knew the check he passed was
forged. Whether the challenged evidence in this cause in fact demonstrated the existence of such
a ring and appellant's involvement in it, or was otherwise admissible to prove appellant's intent
to defraud, is a question we need not decide, because appellant failed to preserve his points of
error for review.
Error in the admission of evidence must be preserved by timely objection at trial.
Tex. R. App. P. 52(a); Tex. R. Crim. Evid. 103(a)(1). This means that a party must either object
each time inadmissible evidence is offered, obtain a "running objection," or object outside the
jury's presence in the manner prescribed by rule 52(b). Ethington v. State, 819 S.W.2d 854, 858-59 (Tex. Crim. App. 1991). Appellant did none of these things. After voicing the two early
objections quoted above, appellant made no further objection to Salmela's testimony. Appellant
never objected to Lunsford's testimony. Although appellant objected to the admission of several
exhibits, the substance of the exhibits had been testified to without objection before the exhibits
were offered in evidence. Any error in the admission of evidence is cured if the same evidence
comes in elsewhere without objection. Id. Points of error one and two are overruled.
The judgment of conviction is affirmed.
[Before Chief Justice Carroll, Justices Jones and Kidd]
Affirmed
Filed: December 23, 1992
[Do Not Publish] | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2857580/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-92-493-CV
CHARLES T. CONAWAY,
APPELLANT
vs.
JOSE LOPEZ,
APPELLEE
FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY,
NO. 212,467, HONORABLE STEVE RUSSELL, JUDGE PRESIDING
PER CURIAM
Appellant Charles T. Conaway seeks to appeal from a default judgment rendered
by the county court at law of Travis County in favor of appellee Jose Lopez. Lopez has filed a
motion to dismiss the appeal for lack of jurisdiction. We will grant the motion and dismiss the
appeal for want of jurisdiction.
The trial court rendered judgment on May 26, 1992; therefore, a motion for new
trial was due no later than June 25, 1992. Tex. R. Civ. P. 329b(a). Conaway, however, filed
a sworn motion for new trial on July 27, 1992, asserting that he and his attorney first received
notice of the May 26th judgment on July 10, 1992. See Tex. R. Civ. P. 306a(4); Tex. R. App.
P. 5(b)(4). The trial court held a hearing on the motion for new trial and signed an order
overruling it on August 10, 1992.
Conaway then filed his cost bond on appeal on August 24, 1992. See Tex. R. App.
P. 41(a). The Clerk of this Court received the transcript on September 21, 1992, and the
statement of facts on September 24, 1992. See Tex. R. App. P. 54(a). The procedural history
of the proceeding is set out in the appendix. Conaway timely filed the motion for new trial and
cost bond, and timely tendered the transcript and statement of facts only if he complied with the
requisites of Rules 306a and 5 to establish July 10th as the date on which he or his attorney
received notice of the judgment. Memorial Hosp. v. Gillis, 741 S.W.2d 364, 365 (Tex. 1987);
Thermex Energy Corp. v. Rantec Corp., 766 S.W.2d 402, 405 (Tex. App.--Dallas 1989, no writ)
(compliance with Rule 306a is jurisdictional).
The appellate timetable runs from the date an adversely affected party or the
attorney receives notice or acquires actual knowledge of the signing of the judgment if, within
twenty days after a judgment is signed, the party or the attorney has not received notice from the
trial-court clerk or acquired actual knowledge of the judgment. Tex. R. Civ. P. 306(a)(4); Tex.
R. App. P. 5(b)(4); Hot Shot Messenger Serv. Inc. v. State, 798 S.W.2d 413, 414 (Tex.
App.--Austin 1990, writ denied). To benefit from these provisions, Conaway had to prove in the
trial court the date on which he or his attorney first received notice or acquired actual knowledge
of the signing of the judgment and that the date was more than twenty days after the judgment was
signed. Tex. R. Civ. P. 306a(5); Tex. R. App. P. 5(b)(5); Sur v. R.W. Otts, Inc., 800 S.W.2d
647, 648 (Tex. App.--Houston [14th Dist.] 1990, writ denied); Sabine Towing & Transp. Co. v.
Evans, 709 S.W.2d 783 (Tex. App.--Beaumont 1986, writ ref'd n.r.e.).
The order overruling the motion for new trial does not include a finding regarding
the date of notice. Conaway had the burden to secure such a finding or to bring the omission to
the attention of the trial court. See Tex. R. App. P. 5(b)(s). On October 19, 1992, Conaway
obtained a finding from a different trial judge that Conaway and his attorney first received notice
of the judgment on July 10, 1992. Lopez argues that this finding does not establish this Court's
jurisdiction over the appeal because the trial court filed the finding after the expiration of its
plenary power over the cause. See Tex. R. Civ. P. 329b(e).
Rule 306a affords a party who did not have notice or actual knowledge of a
judgment thirty days from the date he acquired such notice or knowledge to invoke the trial
court's plenary jurisdiction. Gillis, 741 S.W.2d at 365; see Pope v. Moore, 729 S.W.2d 125, 126
(Tex. App.--Dallas 1987, writ ref'd n.r.e.); Mori Seiki Co. v. Action Mach. Shop, Inc., 696
S.W.2d 414, 415 (Tex. App.--Houston [14th Dist.] 1985, no writ). In the instant cause, the trial
court had no jurisdiction to consider the motion for new trial unless Conaway established that he
first received notice of judgment on July 10, 1992. Tex. R. Civ. P. 306a(4),(5), 329b(d).
Assuming that Conaway successfully met his burden under Rule 306a, the trial court's plenary
power expired on September 9, 1992, thirty days after the court overruled Conaway's motion for
new trial.
Conaway has not, however, met his burden to obtain the requisite finding, pursuant
to Rule 5. Texas R. App. P. 5(b)(5) (1) provides, "The trial court shall find the date upon which
the party or his attorney first either received a notice of the judgment or acquired actual
knowledge of the signing of the judgment at the conclusion of the hearing and include this finding
in the court's order." (Emphasis added). By not obtaining a finding until October 19, 1992,
Conaway has not complied with Rule 5 which governs the extension of the appellate time limits.
Tex. R. App. P. 5(b)(1); cf. Tex. R. Civ. P. 306a(1). Accordingly, we conclude that Conaway
did not perfect an appeal timely.
For the preceding reasons, we grant Lopez's motion to dismiss the appeal for want
of jurisdiction. The appeal is dismissed for want of jurisdiction.
[Before Chief Justice Carroll, Justices Jones and Kidd]
Appeal Dismissed
Filed: December 9, 1992
[Publish]
APPENDIX
May 26, 1992 Honorable Steve Russell, Judge of the County Court at Law No. 2 of
Travis County renders a default judgment against Conaway.
July 7, 1992 County clerk sends notice of the judgment.
July 27, 1992 Conaway files a motion for new trial asserting, in pertinent part,that he or
his attorney first received notice of judgment on July 10, 1992.
August 10. 1992 Judge Russell hears the motion for new trial and signs an order overruling
the motion. The statement of facts from this hearing does not include
evidence as to the date of notice of judgment. The motion for new trial is,
however, verified.
August 24, 1992 Conaway files his cost bond on appeal.
September 21, 1992 This Court receives the transcript which does not show the date on which
Conaway filed his motion for new trial. The Clerk of the Court does not
file the transcript because it does not indicate whether Conaway timely
perfected the appeal.
October 12, 1992 This Court receives a supplemental transcript containing a copy of the
motion for new trial that shows the date of filing.
October 13, 1992 The Clerk of the Court sends notice that the supplemental transcript was
"received" and that the record cannot be filed because the transcript does
not include an order regarding the date on which Conaway or his attorney
first received notice of the judgment.
October 19, 1992 The Honorable J. David Phillips, Judge of the County Court at Law No.
1 of Travis County, signs an order finding that Conaway and his attorney
received notice of the judgment on July 10, 1992. The order refers to the
hearing on the motion for new trial on August 10, 1992.
October 21, 1992 This Court receives the supplemental transcript containing the order signed
on October 19, 1992.
October 22, 1992 Lopez files a motion to dismiss the appeal for lack of jurisdiction.
1. The Supreme Court of Texas added the quoted language to Rule 5 by order of April
24, 1990, effective September 1, 1990. The court did not similarly amend Rule 306a. Tex.
R. App. P. 5, 53 Tex. B.J. 607 (Tex. 1990). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1511478/ | 398 A.2d 297 (1979)
In re Grievance of Dianna Nagley GAGE.
No. 133-78.
Supreme Court of Vermont.
February 6, 1979.
Alan S. Rome, Vermont State Employees' Association, Inc., Montpelier, for plaintiff.
*298 M. Jerome Diamond, Atty. Gen., Louis P. Peck, Chief Asst. Atty. Gen. and Jeffrey L. Amestoy, Asst. Atty. Gen., Montpelier, for defendant.
Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.
LARROW, Justice.
The State of Vermont, as employer, appeals from an amended order of the Vermont Labor Relations Board, setting aside the discharge from state employment of claimant Gage and ordering back pay. Four questions were certified, all involving the meaning of the concept of "just cause" for discharge. Essentially this was the subject matter of our recent opinion in In re Grievance of Brooks, 135 Vt. 563, 382 A.2d 204 (1977). Our disposition of the instant case renders full recital of these questions unnecessary; a fortuitous result in that they were certified by a chairman of the Board whose predecessor, rather than himself, presided over the hearing and issued the findings and conclusions. In our view, compliance with V.R.A.P. 13(d) requires such certification by the "presiding officer" who in fact presided.
The parties concede that the principles which we enunciated in Brooks are controlling here. The grievant seeks to distinguish the cases on their facts. The Board also recognized the applicability of our holding in Brooks. In an attempt to conform to that opinion, the Board amended its previously issued order, in effect changing the bulk of its orders to recommendations and suggestions. These included provisions that the State offer counselling, impose an additional 120 day probationary period, require medical justification for sick leave, and require that requests for annual leave be in writing and be made well in advance. The claimant contends that these revisions save the decision below from reversal under Brooks. She argues that the Board conclusion of no just cause for termination is supported by the evidence, particularly since the notice of termination specifies only failure to timely return from maternity leave. The State contends that, despite revisions of form, the Board's conclusions are based upon its position, repudiated in Brooks, that "step discipline" and counselling are mandatory. It says that, as in Brooks, the whole record compels a finding that, as a matter of law, just cause for termination existed. We agree with the State, and reverse.
As Mr. Justice Billings clearly pointed out in Brooks, jurisdiction of the Board in grievance proceedings is governed by the definition of the term grievance in 3 V.S.A. § 902(14). In these circumstances, that jurisdiction is limited to determining whether there was just cause for the dismissal of the grievant under the collective bargaining agreement. Brooks, supra, 135 Vt. at 570, 382 A.2d at 208-09. The just cause clause in a bargaining agreement extinguishes the right to fire an employee arbitrarily. Just cause means some substantial shortcoming detrimental to the employer's interests which the law and sound public opinion recognize as a good cause for dismissal. Instances of repeated conduct insufficient in themselves may accumulate so as to provide just cause for dismissal. Id. at 568, 382 A.2d at 207. The changes which the Board made in its findings and conclusions, after receiving our opinion in Brooks, did remove some objectionable aspects of its original order, and did expressly state that it found no just cause to have existed for discharging the grievant. But they left unchanged in one essential the Board's concept of its role. The findings are long and intricate, as are the conclusions, but a fair reading discloses that the essence of the Board's order is that it disagrees with the action taken by the employer. They stated that discharge should be a last resort, that there was no prior suspension or discipline, no counselling, and that numerous warnings were rendered "somewhat meaningless and fruitless by a failure to follow through" with advice and suggestions. The Board then concluded, in the same paragraph, that the grievant was discharged without just cause.
*299 It is thus apparent that the underlying philosophy of the Board's conclusion, despite subtle alterations in language, is still the reasoning that we struck down in Brooks, i. e., that step or progressive discipline is an inherent element of discharge procedures, and that failure to resort to less severe measures than discharge is, in effect, a waiver of what might otherwise be good cause. Thus, the Board still misconstrues its function. Its duty is to decide whether there was, in law, just cause for the action taken, not whether it agrees or disagrees with that action. It has power to police the exercise of discretion by the employer and to keep such actions within legal limits. But the Board is not given, by the statute or by the agreement, any authority to substitute its own judgment for that of the employer, exercised within the limits of law or contract.
Viewed in this light, the Board's conclusions are erroneous and are unsupported by its own findings, many of which are challenged by the State in any event. They show a job history at times satisfactory, and at other times unsatisfactory as to work habits, particularly because of excessive absenteeism. A warning period was imposed shortly before the failure to report after maternity leave, which was the specified ground of dismissal. The grievant admittedly secured no extension of that leave from her supervisor, and made only one attempt to contact that supervisor, through a phone call to a co-worker. She claimed difficulty in weaning her baby as the reason for her nonreturn, and took a vacation during the period of her self-extended leave. As the Board summarized the problem:
She had a serious problem, there is no doubt, even a mental block, if you will, feeling it necessary to absent herself quite frequently from work on a pay basis as well as a non-pay basis. The circumstances of her Thanksgiving holiday absence are still unclear. We know that she did not return to work on the 29th, as ordered, but it is not quite clear why she did not or what attempts she made to reach her supervisor, except through Mrs. Fadden.
As in Brooks, we find from the record before us, that just cause for dismissal existed as a matter of law. Previously placed on probationary status and warned of dismissal as a possible consequence of continuing her habitual absences, the employee nonetheless extended her maternity leave without securing advance approval. The casual manner in which she did this, despite repeated prior warnings, was in itself just cause for dismissal; the previous incidents, not specified as the ground for termination, nonetheless color the particular act upon which the discharge was based. The "substantial shortcoming detrimental to the employer's interest" of which we spoke in Brooks was clearly manifested here by the employee's continued course of conduct, and the Board's reinstatement order was in error.
Reversed; the order of the Vermont Labor Relations Board is vacated, and the dismissal is reinstated. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511658/ | 136 F.2d 585 (1943)
NATIONAL LABOR RELATIONS BOARD
v.
J. G. BOSWELL CO. et al.
No. 10148.
Circuit Court of Appeals, Ninth Circuit.
May 24, 1943.
Rehearing Denied June 18, 1943.
*586 *587 *588 Robert B. Watts, Gen. Counsel, Ernest A. Gross, Howard Lichtenstein, and Malcolm F. Halliday, Associate Gen. Counsels, and Louis Libbin and William Strong, Attys., N.L.R.B., all of Washington, D. C., for petitioner.
Sidney J. W. Sharp and M. Wingrove, both of Hanford, Cal., for respondents.
Before DENMAN, MATHEWS, and STEPHENS, Circuit Judges.
DENMAN, Circuit Judge.
Petitioner, herein called the Board, seeks our decree enforcing its order against J. G. Boswell Company, herein called the Boswell Company, and Corcoran Telephone Exchange, herein called the Exchange, with respect to their treatment of their respective employees and two labor organizations, Cotton Products and Grain Workers Union, Local 21798, herein called the Federal, and J. G. Boswell Company Employees' Association of Corcoran and Tipton, California, herein called the Association.
Federal filed with the Board the charges against the Boswell Company and the Exchange required for the making of the Board's complaint. Margaret A. Dunn, not a member of any union, also filed charges against her employer, the Exchange, concerning her discharge.[1] The Association was served with a copy of the complaint, and notice of the hearing, and thus became subject to the Board's jurisdiction in the proceeding, though it did not appear therein. National Labor Relations Board v. Sterling Electric Motors, Inc., 9 Cir., 109 F.2d 194, 210.
A. Jurisdictional Facts. Boswell Company, a California corporation, is engaged in California and Arizona in the business of growing and processing cotton and of manufacturing cotton seed products. Of the products manufactured and processed during the period from July 1, 1937, to June 30, 1938, at its Corcoran, California, plant, where the unfair labor practices occurred, respondent shipped to points outside California all the bales of cotton owned by it, numbering over 40,000, approximately 860 bales of linters, and 60 tons of cottonseed cake; during the same period it used at its Corcoran plant approximately 52,000 jute "patterns" imported from India and steel bands received from Alabama.
Upon the foregoing facts stipulated by counsel, the applicability of the Act *589 to Boswell Company is not open to question. N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S. Ct. 615, 81 L. Ed. 893, 108 A.L.R. 1352; Santa Cruz Fruit Packing Co. v. N.L.R.B., 303 U.S. 453, 58 S. Ct. 656, 82 L. Ed. 954; N.L.R.B. v. Fainblatt, 306 U.S. 601, 59 S. Ct. 668, 83 L. Ed. 1014; N.L.R.B. v. Grower-Shipper Vegetable Ass'n, 9 Cir., 122 F.2d 368, 371. There is no merit in Boswell Company's contention that the charged unfair labor practices began in July just after the period for which the volume of interstate commerce was stipulated. It is elementary that the Board could infer that what had continued until June 30th would not cease in the following month.
The Exchange, a California corporation, is engaged in the telephonic communications business in Corcoran, California, where it provides to residents and business establishments the only available telephone service. Long distance calls to or from points outside the city of Corcoran or the State of California are effectuated through the joint facilities of the Exchange and the Pacific Telephone and Telegraph Company, a directly controlled subsidiary of American Telephone and Telegraph Company, which, pursuant to an agreement with the Exchange, maintains a cable of telephone wires connected to the Exchange's switchboard in Corcoran. At least three of the Exchange's subscribers Boswell Company, Western Union Telegraph Company, and the Atchison, Topeka and Santa Fe Railroad are engaged in interstate commerce. During 1938 the Exchange handled over 35,000 toll calls through the facilities of the Pacific Telephone and Telegraph Company; of this number there were 77 outgoing calls to points outside California and an undisclosed number of incoming calls from points outside the State.
The Exchange contends that its interstate communications are too small to confer jurisdiction upon the Board. Its position is without merit. The facilities of the Exchange are an integral part of the vast network of telephone lines which cover the entire nation. While these lines are owned by a large number of small telephone companies, such as the Exchange, they are operated as a unified system by virtue of physical connection of the lines and such operating agreements as are here involved. The Exchange's facilities and lines are admittedly available and used for the transmission of interstate messages, both those originating and terminating within the Exchange's system. The Exchange is thus an instrumentality of interstate commerce, and as such is clearly subject to Federal regulation, irrespective of any showing as to the amount of interstate traffic actually using its facilities. Associated Press v. N.L.R.B., 301 U.S. 103, 128, 57 S. Ct. 650, 81 L. Ed. 953; Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1, 9, 24 L.Ed 708; N.L.R.B. v. Central Missouri Telephone Co., 8 Cir., 115 F.2d 563; The Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 390, 33 S. Ct. 729, 57 L. Ed. 1511, 48 L.R.A.,N.S., 1151, Ann.Cas.1916A, 18. Moreover, respondent's interstate aspects assume greater importance by virtue of the fact that the Exchange furnishes the only medium of telephonic communication available to the business establishments of Corcoran, California. The Act "cannot be applied by a mere reference to percentages" (Santa Cruz Fruit Packing Co. v. N.L.R.B., 303 U.S. 453, 467, 58 S. Ct. 656, 661, 82 L. Ed. 954); it is applicable even though the interstate business "involve[s] but a small part of the entire service rendered by the" Exchange. Consolidated Edison Co. v. N.L.R.B., 305 U.S. 197, 221, 59 S. Ct. 206, 213, 83 L. Ed. 126; N.L.R.B. v. Fainblatt, 306 U.S. 601, 307 U.S. 609, 59 S. Ct. 668, 83 L. Ed. 1014. Later in this opinion is considered the conduct of the Exchange as affecting interstate commerce, even though not engaged in such commerce.
B. The Briefs. As required by our rule 20, the Board's brief presents a statement of the facts supporting its findings with page references to the transcript, here consisting of seven volumes of 3343 pages. Our examination shows a meticulous accuracy in the correspondence of the record with the statement required by the rule and, because of its accurate and compact form, this opinion adopts such of its language as is pertinent.
All that the Act requires to sustain the Board's findings is that they be supported by substantial evidence.[2] Our rule 20 simplifies the presentation of the respondents' case, both for the respondents and the court. If the Board's statement of *590 fact is not sufficient to sustain the findings, the respondents' brief, in effect, may demur to it. If sufficient, it may be attacked by a showing that the portions of the record referred to do not support the Board's statement. All of the respondents' 250-page brief which presents evidence contra to that supporting the findings, and upon which we are asked to "pass upon the credibility of witnesses and the weight" of their testimony, is unnecessary and surplusage.
C. The Unfair Labor Practices. The Board found that respondent Boswell Company, in violation of Section 8(3) of the Act, 29 U.S.C.A. § 158(1), evicted seven employees from its plant and thereafter refused to reinstate them because of their membership and activities in Federal; that it dominated, interfered with, and assisted the formation and administration of the Association, in violation of Section 8(2); and that by the foregoing action and various anti-union conduct of its supervisory employees, the Boswell Company interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act, 29 U.S.C.A. § 157, thereby violating Section 8(1).
The Board further found that respondent Corcoran Telephone Exchange violated Section 8(3) and (1) of the Act by discriminating in the hire and tenure of employment of Margaret A. Dunn.
In addition to the usual cease and desist and posting provisions, the Board's order directed Boswell Company to offer reinstatement with back pay to the employees discriminated against, to place certain other employees upon a preferential hiring list, to afford all employees reasonable protection in the plant, and to refuse to recognize the Association as the collective bargaining representative of any of its employees. The order also directs the Exchange to reinstate with back pay Margaret A. Dunn.
The findings of a series of unfair labor practices by the Boswell Company are clearly supported by substantial evidence. From the many prohibited acts of Boswell Company so in evidence, some are hereafter stated. In this connection we find no support in the testimony for respondents' charge that the trial examiner failed to conduct an impartial hearing. His exclusion of certain evidence is not shown to have caused prejudice.
C (1). The Boswell Company's coercion against the organizing activities of Federal. Federal, in July, 1938, through Organizer Prior, was continuing its attempt to organize the Boswell Company employees. After an organizational meeting, Tom Hammond, who supervised the operations of the gins and mill, and occasionally laid off and reemployed employees, bluntly informed Employee Andrade that Boswell Company would never tolerate or recognize a union, warned that Boswell Company would shut the mill in the event that a union gained a foothold, and pointedly inquired whether the Federal would feed Andrade if the mill closed. Joe Hammond had a similar supervisory position. Both Hammonds, in wholesale fashion, questioned employees about their union affiliations, the Federal, and its membership; advised them to seek employment elsewhere if they wanted to join a union; warned that union members would not be reemployed at the termination of the approaching seasonal lay-offs; and threatened to "lock up and shut the door" if Federal succeeded in organizing the plant.
On complaint to Gordon Hammond, the Superintendent over the entire plant, he refused to permit the posting of a notice in the plant to the effect that respondent Boswell Company would not discriminate against employees who wished to join the Federal.
These statements and conduct of Boswell Company's supervisory employees constitute well recognized forms of interference, restraint, and coercion in violation of Section 8(1) of the Act, and the Board properly so found. See e.g., International Ass'n of Machinists v. N.L.R.B., 311 U.S. 72, 76-80, 61 S. Ct. 83, 85 L. Ed. 50; H. J. Heinz Co. v. N.L.R.B., 311 U.S. 514, 518, 61 S. Ct. 320, 85 L. Ed. 309; N.L.R.B. v. Sunshine Mining Co., 9 Cir., 110 F.2d 780, 786; North Whittier Heights Citrus Ass'n v. N.L.R.B., 9 Cir., 109 F.2d 76, 78; N.L.R.B. v. Pacific Gas & Electric Co., 9 Cir., 118 F.2d 780, 788.
C (2). The Boswell Company's evictions and refusals to reinstate members of Federal. On the morning of November 18, 1938, Spear, Martin, Farr, Andrade, Wingo, Briley, and Powell, the officers and only active Federal members then employed by Boswell Company, appeared for work displaying their union buttons for the first time. At 10 a. m., Supervisor Bill Robinson suddenly turned off the power driving the gins, announcing that "We are going to shut the gin down for a little meeting outside." In response to queries from Farr and Martin *591 concerning the nature of the meeting, Robinson explained that "it is about the union * * * we are going * * * to see whether we are going to have this union or not. We want everybody to go out there * * *."
In the presence of Supervisor Tom Hammond, Joe Hammond, Bill Robinson, Kelly Hammond, Oscar Busby, and Rube Lloyd,[3] the assembled employees in the yard staged an anti-union demonstration against Federal and its members. One employee proclaimed to Farr, "the company doesn't want your union here. I don't see why you fellows should turn agin' the company you are working for." Supervisor Lloyd shouted, "throw them [the union men] out." With the rallying cry that "the company is behind us," Lloyd's proposal was first echoed by another employee, and then acted upon by three men who seized Spear while he was explaining the purposes of Federal, and, accompanied by the remainder of the mob and supervisors, forcibly propelled him across the highway to Boswell Company's offices where they loudly demanded that the Federal men be discharged. General Manager Louis Robinson thereupon appeared and ordered the employees to return to work, promising to "straighten the matter out" presently.
Upon returning to their posts at the plant, the Federal members were prevented from working by the supervisors who shut off the independently controlled motors on their machines and directed them not to start operations. Farr's appeal for assistance to Tom Hammond, supervisor of the gins, fell on deaf ears. Finally, Supervisor Robinson, remarking that "it seems like either the union men run this or the non-union," advised the Federal members to leave; whereupon the members working in the gins left the plant and went to Farr's home, where the latter called General Manager Robinson to inform him of what had transpired. In reply to Farr's inquiry as to whether the men should return to work, Robinson stated that he would think the matter over and let them know.
Immediately upon their departure, Powell, the only Federal member employed in the yard, was called into the plant and ordered by Supervisors Robinson and Hammond to operate machines left vacant by the other Federal members, an assignment which he declined on the ground that he would be "scabbing on the Union." Bill Robinson thereupon warned Powell to remove his union button before the other employees noticed it and "scattered up the ground with him." Confronted with the alternative of renouncing his membership in Federal and "scabbing" or of being manhandled, Powell left the plant and joined the other members at Farr's home.
Without disputing the foregoing facts, Boswell Company seeks to evade responsibility for the evictions on the inconsistent grounds (1) that the Federal members acted unreasonably in voluntarily leaving the plant without consulting General Manager Robinson, and (2) that the men were ousted by the non-union employees, without authority from the company, because of resentment against their union activities. Both contentions are without merit.
After having been confronted with a show of force and prevented from working with the approval and assistance of the supervisors, Bill Robinson's "suggestion" to leave the plant must necessarily have been interpreted, as the Board states, "as a threat that further interference with their work, if not actual assaults, would ensue if they failed to comply therewith." Under such circumstances, the men clearly acted reasonably in avoiding further disturbances and possible bodily injuries by leaving the plant and immediately appealing to Manager Robinson. As the latter admitted in his report to Boswell Company's president, the Federal members were "run off the job."[4]
*592 Respondent Boswell Company's contention finds no support in the record.[5] On the contrary, the undisputed evidence above outlined amply warrants the Board's findings that "representatives of the company initiated, led, and countenanced the entire anti-union demonstration" and were the "principal molestors of the Federal members."
There is abundant evidence of the failure to reinstate the evicted men. On being pressed to reinstate one of them, Superintendent Hammond stated to him, "Now, Lonnie, [Spear] you see what this union business has led to. You can't hope to put it over * * * if you will drop this union business you can come back to work." To another, whose place was vacant, he stated, "We can't use you at this time." To another, reinstatement was offered as soon as he, Powell, discovered that Federal was "all hooey" and "a bunch of fellows claiming something they couldn't back up." With the exception of Briley, none of the ousted employees, members of Federal, had been reinstated at the time of the Board hearing.
Another employee, Elgin Ely, joined Federal on November 11, 1938. The next day he discovered that his rate of pay had been reduced. When he asked his superior, Tom Hammond, the reason for the reduction, Hammond replied, "Maybe the union had something to do with it * * *. Maybe you should get your committee together and go up to the office and see if they couldn't find out something about it." On November 16th, Ely was excused from work because of an injured thumb which had become infected. Thereafter, he received a registered letter from Boswell Company, dated November 28th, to the effect that his machine had been shut down on November 26th and that his "employment by this Company terminated at that time." Because of the contents of this letter, Ely did not apply for reinstatement when he was released for work by his physician on December 2nd.
The registered letter was identical with that sent about the same time to the ousted employees. The medium of registered mail had never before been used by Boswell Company to notify an employee absent because of illness that he was being laid off or discharged. Moreover, the primary reason advanced by Boswell Company for sending such registered letters to the evictees, i. e., to notify them that the checks which they had been receiving while not performing any work would be discontinued, did not exist in the instant case since Ely's last pay check was for the week ending November 17th. The foregoing facts plainly indicate that Boswell Company considered Ely to be in the same class with the ousted Federal members and to merit the same discriminatory treatment.
Boswell Company's contention that no finding of discrimination against Ely may be made because he would in any event have been laid off on November 26th due to seasonal slack, is without merit. The record shows that in previous seasonal lay-offs, the men, including Ely, were reemployed upon application when their operations resumed. The unusual medium employed by Boswell Company to notify Ely of the termination of his job evidences a purpose to deprive him of his normal expectancy of reemployment after a seasonal lay-off. The Board properly concluded that, "in view of the entire background, the Company's acts of discrimination against the ousted employees, and its general antipathy to the Federal," Boswell Company intended by its registered letter to convey to Ely the impression that, as a member of Federal, the termination of his employment was final, and to "deter him from seeking reinstatement, upon recovering from his injury. The letter had this effect." By such conduct, whether characterized as a discharge or a lay-off, Boswell Company discriminated with respect to the hire and tenure of Ely's employment in violation of Section 8(3) and (1) of the Act.[6]
*593 C (3). Boswell Company's formation and domination of a union of its employees. Within a few hours after the eviction of the Federal members on November 18th, a group of employees, including Supervisors Lloyd and Busby, journeyed on company time to a neighboring city to secure information about the procedure for forming a union solely of company employees as a bulwark against an outside organization. That afternoon the supervisors reported their progress on this project to General Manager Robinson, informing him of their intention to hold a meeting at the plant that evening. Robinson tacitly approved their activities, "suggested" the procedure to be followed at the meeting, and delegated to its organizers full authority to prescribe the conditions for the return of the ousted Federal members.
About fifty employees and six supervisors attended the meeting held that evening at Boswell Company's office building. Supervisor Tom Hammond told at least one of his subordinates to be present. Supervisor Busby addressed the employees, stating that there was no reason why a "company union" would not "work" at the plant. After some discussion, blank sheets of paper were circulated and signed by employees and supervisors.[7]
Formal organization of the Association was perfected at a meeting held on November 28th, and attended by the same supervisors, at least four of whom signed the constitution. Supervisors Busby and Lloyd were elected vice president and a member of the labor relations committee, respectively. The remaining offices were filled by employees who, while not strictly speaking supervisors, held positions which identified them clearly with the management of Boswell Company rather than its ordinary plant employees.[8] Notices of Association meetings were freely circulated in the plant during working hours and at least one employee was warned by Supervisor Tom Hammond to attend the meeting "if you want to keep on working."
The Association presents the anomaly, according to its constitution, of existing for the purpose of collective bargaining with the Boswell Company in respect to all matters and "to not interfere with the right of any member or members to present grievances individually to the management." Association membership was limited to employees of thirty days' continuous service; membership on minor committees to employees of at least six months' service; and eligibility to office or to serve on the labor relations committee to those of at least one year's continuous service. Since the rank and file are seasonal employees, control of the Association's affairs, which was vested in a governing board comprised of the officers and members of the labor relations committee, was assured to the supervisors and those closely allied with the management.
Although claiming to represent 95 percent of the employees, the Association never requested exclusive recognition, never sought to bargain with the Boswell Company, and never attempted to secure a collective agreement; in fact, it did not even appoint the representatives empowered by the bylaws to discuss such matters with the Boswell Company. The only recorded request ever made by the Association occurred on April 5, 1939, after the bylaws were amended to provide that membership in the Association constituted a repudiation *594 of membership in any other labor organization. At that time Boswell Company was informed by letter that the Association had a number of unemployed members and was requested to "get in touch" with the Association when laborers were required. The association pointed out, however, that this was "merely a request" and that they were not "agitating for a closed shop."[9]
The Board's findings concerning the illegality of the Association and Boswell Company's conduct with respect thereto cannot be seriously challenged. Boswell Company's open campaign of interference and intimidation against Federal which culminated in the eviction of its officers and active members, contrasted with its subsequent acquiescence in the activities of the Association promoters on company time and property, reasonably indicated to the employees, as respondent admittedly intended it should, that the company was backing the project as a further counter measure against Federal. Moreover, the initiation and promotion of the Association by the same supervisors who took an active part in the campaign of intimidation against Federal, General Manager Robinson's participation in the preliminary plans and decisions, the use of company time and property, the participation as officers and members of supervisors and those reasonably regarded by the employees as representing the management, the presence of restrictive provisions in the constitution and bylaws, and the Association's complete inactivity as a bargaining agency, all these constitute well recognized indicia and forms of domination and support.
In sum, formed under "conditions or circumstances which the employer created or for which he was fairly responsible and as a result of which it may reasonably be inferred that the employees did not have that complete and unfettered freedom of choice which the Act contemplates" (N.L.R.B. v. Link-Belt Co., 311 U.S. 584, 588, 61 S. Ct. 358, 361, 85 L. Ed. 368), the Association was "not a real bargaining agent or indeed an independent representative of the employees in any respect." N.L.R.B. v. American Mfg. Co., 2 Cir., 106 F.2d 61, 64, affirmed 309 U.S. 629, 60 S. Ct. 612, 84 L. Ed. 988. See also N.L.R.B. v. American Potash & Chemical Corp., 9 Cir., 98 F.2d 488, 494, 495, certiorari denied 306 U.S. 643, 59 S. Ct. 582, 83 L. Ed. 1043; N.L.R.B. v. Tovrea Packing Co., 9 Cir., 111 F.2d 626, certiorari denied 311 U.S. 668, 61 S. Ct. 28, 85 L. Ed. 429; H. J. Heinz Co. v. N.L.R.B., supra, 311 U.S. at pages 517-519, 522, 61 S. Ct. 320, 85 L. Ed. 309; Machinists case, supra, 311 U.S. at pages 75-78, 61 S. Ct. 83, 85 L. Ed. 50.
C (4). The Exchange's discriminatory discharge of Mrs. Dunn and its coercive effect on Federal in seeking to organize the Boswell Company's employees. The coercive anti-union acts of the Boswell Company created a general and disturbing interest in the town of Corcoran. That company financed one C. H. Glenn, who operated a 5200-acre grain and cotton farm. Glenn was president of the Exchange, having the only telephone plant serving Corcoran. On March 1, 1939, in the course of the Boswell Company labor troubles, Mrs. Dunn had been employed by the Exchange for fifteen years, the last thirteen as head telephone operator. The Board found that the Exchange discharged Mrs. Dunn in response to pressure of "a group of local citizens who sought Mrs. Dunn's discharge because of her alleged union sympathies and activity," thereby violating Section 8 (1) and (3) of the Act. There is evidence warranting the facts found by the Board, as follows:
Early in February 1939, Mrs. Dunn's daughter, Dorothy, was observed speaking to Federal members who were picketing the Boswell Company's plant in protest against its unfair labor practices; on subsequent occasions during the month, Dorothy and her sister, Margaret, were also seen talking to Federal Organizer Prior. The Dunn family soon began to receive information from local citizens that Dorothy was "in the wrong" with the people of Corcoran, particularly with Boswell Company's president, because she had been seen on the picket line, and that a petition was being circulated in Corcoran to induce the Exchange to discharge Mrs. Dunn because her daughters had been seen on the picket line and because of a belief that Mrs. Dunn was conveying to the pickets, through her daughters, information overheard at the Exchange's office. About February 15th, Mrs. Dunn, who was not a member of any *595 labor organization and had not transmitted messages to the pickets, questioned the president of the Exchange, Mr. C. H. Glenn, about the petition for her discharge. Glenn thereupon assured Mrs. Dunn that he had no intention of discharging her, that her work had been satisfactory for fifteen years, and that he was certain the charges against her were without basis. Perturbed by additional rumors to the same effect, Mrs. Dunn discussed the matter again with Glenn a few days later. On this occasion Glenn wanted to know whether it was true that her daughters "were going out with any of the men," referring to the Federal members.
On March 1st Glenn suddenly demanded Mrs. Dunn's resignation because "pressure was being brought to bear too heavily on him" and he "just couldn't stand what was being said * * * they were certainly awful." To Mrs. Dunn's inquiries as to whether these "awful" things reflected on her personal character or her work, Glenn replied, "absolutely not," and then asked whether her daughter Margaret was "keeping company" with Organizer Prior. Mrs. Dunn refused to resign.
Late that afternoon Mrs. Dunn's husband called upon Glenn and asked what he had against the Dunn family. Glenn, having his 5200-acre farm, first told Dunn about the "labor trouble" at the Boswell plant, explaining that this was the first step in an effort to organize all agricultural labor in the vicinity; he then pointed out that this "labor trouble" and Mrs. Dunn's discharge "all ties in together," that the Dunn girls had been seen speaking to the Federal pickets at the Boswell plant, that people were saying the girls were carrying messages from their mother, that "they" were very angry and were threatening to ruin Glenn's business unless he discharged Mrs. Dunn. Mr. Dunn thereupon accused Glenn of succumbing to community pressure because of his interests as a farmer.
The next morning, March 2nd, Glenn discharged Mrs. Dunn, informing her that she was ill, too old for the work, and that "there had been complaints made about the service." Realizing that he had previously made damaging admissions to Mr. Dunn respecting the true reasons for the discharge, Glenn then sought out Mr. Dunn and attempted to persuade him that his wife was discharged for the reasons assigned to her and not for those advanced the preceding day. During the conversation, however, Glenn admitted that nine men had called upon him and demanded the discharge of Mrs. Dunn.
At the hearing the Exchange contended that Mrs. Dunn was discharged because of (1) her physical condition, (2) her alleged habit of drinking wine while at work, (3) her alleged dissension with other employees, and (4) alleged complaints from subscribers about her work. In view of the fact that Glenn had been aware of Mrs. Dunn's physical condition for a long time without commenting thereon, that Glenn recognized that whatever dissension existed among the operators was probably due to his failure to instruct them clearly as to which one had supervisory authority, that he had received complaints about all the operators and recognized that faulty equipment was a chief cause of unsatisfactory service at that time, that he admitted in February and March, 1939, that Mrs. Dunn's work was satisfactory, and that he had first decided upon her discharge after her daughters' visits to the picket line, the Board was entitled to reject respondent Exchange's defenses as being without merit. Cf. N.L. R.B. v. Bank of America, 9 Cir., 130 F.2d 624, 628, certiorari denied April 19, 1943, 63 S. Ct. 992, 87 L.Ed. ___.
"The explanation of the discharge offered by respondent did not stand up under scrutiny. This fact in itself strengthens the inference drawn by the Board from the other facts in the case" (N.L.R.B. v. Abbott Worsted Mills, 1 Cir., 127 F.2d 438, 440), that in response to "pressure," the Exchange discharged Mrs. Dunn because of her alleged union sympathies and activities. A discharge of a non-union employee because of a mistaken belief that he was sympathetic to, or active in, a union violates Section 8(1) and (3). N.L.R.B. v. Link-Belt Co., 311 U.S. 584, 589, 590, 61 S. Ct. 358, 85 L. Ed. 368; N.L.R.B. v. Remington Rand, Inc., 2 Cir., 94 F.2d 862, 871, certiorari denied 304 U.S. 576, 58 S. Ct. 1046, 82 L. Ed. 1540. The fact that the alleged union activity extends "outside his own employment," is immaterial. Fort Wayne Corrugated Paper Co. v. N.L.R.B., 7 Cir., 111 F.2d 869, 874.
Nor is it material that there was no independent evidence to show that Mrs. Dunn was either discouraged (or encouraged) from joining a labor organization. The Board expressly found that Mrs. Dunn's discharge did discourage "membership *596 in the Federal as well as in labor organizations generally." Such discrimination necessarily discourages union membership at the very least that of the discharged employees and that therefore such discharge is ipso facto a violation of Section 8(3). Associated Press v. N.L.R.B., 301 U.S. 103, 129, 57 S. Ct. 650, 81 L. Ed. 953; N.L.R.B. v. Fansteel Metallurgical Corp., 306 U.S. 240, 255, 59 S. Ct. 490, 83 L. Ed. 627, 123 A.L.R. 599; Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, 61 S. Ct. 845, 85 L. Ed. 1271, 133 A.L.R. 1217; N.L.R. B. v. Link-Belt Co., 311 U.S. 584, 589, 598, 600, 603, 61 S. Ct. 358, 85 L.Ed 368.
We hold that, even if the Exchange were not engaged in interstate commerce or an instrument thereof, nevertheless the Board was entitled to infer and hold that Mrs. Dunn's discharge was an unfair labor practice so affecting interstate commerce, in its purposefully discouraging effects on Federal's organization of the employees of the Boswell Company.
D. The Board's Order. The Board ordered the Boswell Company to "(a) Afford all its employees at all times reasonable protection in its plant in Corcoran, California, from physical interruption of their work and physical assaults or threats thereof directed at discouraging membership in or activities on behalf of Cotton Products and Grain Mill Workers Union Local No. 21798, A. F. L., or any other labor organization." Such a provision requiring Boswell Company to afford its employees reasonable protection in its plant from physical interruption of their work and physical assaults or threats thereof directed at discouraging union membership, is "adapted to the situation which calls for redress" (N.L.R.B. v. Mackay Radio & Telegraph Co., 304 U.S. 333, 348, 58 S. Ct. 904, 912, 82 L. Ed. 1381); it is plainly necessary to expunge the effects of Boswell Company's unfair labor practices and to "assure to [its] employees the rights which the statute undertakes to safeguard." Republic Steel Corp. v. N.L.R.B., 311 U.S. 7, 12, 61 S. Ct. 77, 80, 85 L. Ed. 6; International Ass'n of Machinists v. N.L.R.B., 311 U.S. 72, 82, 61 S. Ct. 83, 85 L. Ed. 50; N.L.R.B. v. Link-Belt Co., 311 U.S. 584, 600, 61 S. Ct. 358, 85 L. Ed. 368; Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, 193-195, 61 S. Ct. 845, 85 L. Ed. 1271, 133 A.L.R. 1217; N.L. R.B. v. Hudson Motor Co., 6 Cir., 128 F.2d 528, 533. A similar provision was enforced in N.L.R.B. v. Ford Motor Co., 5 Cir., 119 F.2d 326, 328.
The Board also ordered the Boswell Company to "(d) Place James Gilmore, Boyd Ely, Walter Winslow, W. R. Johnston, Stephen J. Griffin, and Eugene Clark Ely upon a preferential list of its employees who are temporarily laid off, following a system of seniority to such extent as has heretofore been applied in the conduct of said respondent's business, and offer employment to them in their former or substantially equivalent positions, as such employment becomes available and before hiring other persons for such work."
These men were all members of Federal. In view of Boswell Company's multiple violations of the Act and strenuous hostility toward the Federal and its members, the Board properly concluded that there is grave danger that the employees in question may be refused reemployment so long as they remain members of Federal even if their former or substantially equivalent positions are available. This requirement is valid as a reasonable exercise of the Board's "informed discretion" as to the appropriate remedy necessary to expunge the effects of prior unfair labor practices. Phelps Dodge Corp., Machinists, cases, supra; N.L.R.B. v. Pennsylvania Greyhound Lines, Inc., 303 U.S. 261, 265, 58 S. Ct. 571, 82 L. Ed. 831, 115 A.L.R. 307. As the Eighth Circuit stated in upholding an identical provision in N.L.R.B. v. C. Nelson Mfg. Co., 120 F.2d 444, 447: "* * * We think that the Board was justified in holding as it did, that the respondent had engaged in some unfair labor practices. The Board exonerated the respondent from some of the charges but not all of them. Whether the requirement as to continuing the nineteen men [as to whom the Board had dismissed the complaint] on the preferential list would or would not `effectuate the policies of the Act' was a matter peculiarly within the province of the Board to determine."
Boswell Company also contends that some of the employees are not entitled to reinstatement because they obtained substantially equivalent employment. Aside from the fact that the Board found upon substantial evidence that the new employment was not substantially equivalent to the old, respondent's contention is foreclosed by Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, 196, 61 S. Ct. 845, 85 L. Ed. 1271, 133 A.L.R. 1217. In accordance with *597 the ruling in the Phelps Dodge case, the Board has exercised its discretion on this question.
Respondents assert that the Board is guilty of "nonfeasance and neglect of duty," and that the order is void, because the Board failed to introduce evidence and make findings on the question of whether any of the employees made "any reasonable effort to obtain other employment." While it is true that the Board should order deductions from back pay on account of "clearly unjustifiable refusal to take desirable new employment," the matter of showing a basis for such deductions is an affirmative defense which must be put in issue by respondents and is in no sense a part of the Board's case. Phelps Dodge, supra, 313 U.S. at pages 199, 200, 61 S. Ct. 845, 85 L. Ed. 1271, 133 A.L.R. 1217. Respondents do not contend that they were at any point precluded from "going to proof on this issue." No such issue was raised affirmatively by respondents either in their pleadings, at the hearing before the Board, in their exceptions to the Trial Examiner's intermediate report which recommended reinstatement with back pay, or in their briefs in support of said exceptions. Although the Phelps Dodge decision was rendered approximately six months before that in the instant case, respondents at no time contended before the Board that any employee had wilfully incurred losses which should be deducted. Not having objected on this ground when the matter was before the Board, respondents are now barred by Section 10(e) of the Act from raising the point. N.L.R.B. v. Bradford Dyeing Ass'n, 310 U.S. 318, 341, 60 S. Ct. 918, 84 L. Ed. 1226; N.L.R.B. v. National Motor Bearing Co., 9 Cir., 105 F.2d 652, 662; N.L.R.B. v. Grower-Shipper Vegetable Ass'n, 9 Cir., 122 F.2d 368, 378; N.L.R.B. v. Sunshine Mining Co., 9 Cir., 110 F.2d 780, 790, certiorari denied 312 U.S. 678, 61 S. Ct. 447, 85 L. Ed. 1118.
Respondent Boswell Company contends that it should not be required to reinstate Powell, even though he may have been discriminatorily discharged, because of his conviction for two felonies prior to his discharge. The record however shows that Powell's criminal record "was common knowledge among the people here, and everybody in the county knew about" it. In fact respondent Boswell Company was well aware of it as early as the Spring of 1938; yet it chose to retain him in its employ until the evictions in November 1938. Under these circumstances, Boswell Company cannot in good faith now urge Powell's earlier misconduct as a basis for its refusal to reinstate him. Stewart Die Casting Corp. v. N.L.R.B., 7 Cir., 114 F.2d 849, 855, 856, certiorari denied 312 U.S. 680, 61 S. Ct. 449, 85 L. Ed. 1119; N.L.R.B. v. Gamble Robinson Co., 8 Cir., 129 F.2d 588, 592.
Respondents complain of delay of the Board in consideration of the case and seeking enforcement of its order as affecting the accumulating back pay obligations. There is no showing whether the delay was caused by the Board's attorneys or those of respondents in securing extensions of time in preparing briefs or postponements of hearings. There is a presumption that the Board performed its duty. So far as concerns the Board's delay in seeking enforcement, respondents could have avoided their accumulating liabilities by petitioning this court under Sec. 10(f) of the National Labor Relations Act. Delays occur in court procedure, but interest is not denied on that ground. There is no merit in this contention of the respondents.
We decree the enforcement of the Board's order as prayed for.
MATHEWS, Circuit Judge (dissenting in part).
I agree that, in so far as it relates to J. G. Boswell Company, the order should be enforced, but think that, in so far as it relates to Corcoran Telephone Exchange, it should be set aside.
NOTES
[1] Sec. 10 (b) of the National Labor Relations Act, 29 U.S.C.A. § 160 (b), provides that the Board may issue its complaint "Whenever it is charged" that anyone is engaged in an unfair labor practice affecting interstate commerce. The Board's regulations, Art. II, sec. 1, provides the charge may be filed "by any person or labor organization." The charged offense against interstate commerce is a matter of public concern and the Board's regulations properly recognizes the right of any person so to initiate proceedings to prevent its continuance. National Labor Relations Board v. Indiana & Michigan Electric Co., 318 U.S. 9, 63 S. Ct. 394, 87 L.Ed. ___.
[2] National Labor Relations Board v. Bradford Dyeing Ass'n, 310 U.S. 318, 342, 60 S. Ct. 918, 84 L. Ed. 1226, and a score of other cases.
[3] Kelly Hammond was the supervisor in charge of the night shift in the mill. Oscar Busby, the "foreman" in the machine shop, had from three to five subordinates and was regarded by General Manager Robinson as the top ranking employee in the shop. Rube Lloyd, the "building superintendent," supervised the work of the carpenters and construction employees to whom he gave working orders. Both Busby and Lloyd were salaried employees.
[4] Powell was similarly justified in departing from the plant under threat of physical harm if he did not disassociate himself from Federal, a plainly illegal condition. Compare N. L. R. B. v. National Motor Bearing, 9 Cir., 105 F.2d 652, 658-659; N. L. R. B. v. Sunshine Mining Co., 9 Cir., 110 F.2d 780, 792, certiorari denied 312 U.S. 678, 61 S. Ct. 447, 85 L. Ed. 1118; Rapid Roller Co. v. N. L. R. B., 7 Cir., 126 F.2d 452, 460, 461. Thereafter, both Boswell Company and Federal regarded Powell as being in the same category as the other evictees.
[5] While it is true that Federal had requested Boswell Company to shorten the hours from 12 to 8 per day so as to spread the available work and thereby forestall further lay-offs, and that Boswell Company had apparently acceded to this request "to provide employment as long as possible," there is no evidence that non-union employees resented this fact.
[6] In view of respondent Boswell Company's practice of reemploying its workers after seasonal lay-offs, there is no merit in respondent's further contention that Ely's employee status had been severed upon the cessation of his work on November 26th. North Whittier Heights Citrus Ass'n v. N. L. R. B., 9 Cir., 109 F.2d 76, 82, certiorari denied 310 U.S. 632, 60 S. Ct. 1075, 84 L. Ed. 1402. The contention is in any event pointless since the Act prohibits discrimination against non-employees as well as those who are employees. Phelps Dodge Corp. v. N. L. R. B., 313 U.S. 177, 61 S. Ct. 845, 85 L. Ed. 1271, 133 A.L.R. 1217.
[7] One employee was accosted outside the meeting room in the presence of Superintendent Hammond with the suggestion that he "go in the office and sign that paper to keep this God damned A. F. of L. union out of here."
[8] President Hubbard was respondent's "farm adviser," with an office in the building housing other company officials. Performing no functions in connection with the operations of the plant, Hubbard's primary duty was to instruct foremen and contractors in farming operations. Treasurer Brenes was the Boswell Company's cashier and head bookkeeper with supervision over at least one assistant. Secretary Roberson was a clerical employee. The remaining two members of the important labor relations committee were McKeever and Willoughby, the former an agronomist engaged in crop raising experiments, the latter the plant storekeeper. Like the supervisors and company officials, all received monthly salaries and were listed on respondent's Los Angeles pay roll as distinguished from the ordinary employees who received an hourly wage and were carried on the local pay roll.
[9] It is significant that the only former Federal members who were employed after the evictions of November 18th were persons who joined the Association. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511687/ | 595 S.W.2d 912 (1980)
SPEEDI LUBRICATION CENTERS, INC., Appellant,
v.
ATLAS MATCH CORPORATION, Appellee.
No. 18201.
Court of Civil Appeals of Texas, Fort Worth.
March 6, 1980.
*913 Winstead, McGuire, Sechrest & Trimble and Jay Madrid, Dallas, for appellant.
Ungerman, Hill, Ungerman, Angrist, Dolginoff, Teofan & Vickers, and Jeffry R. Davis, Fort Worth, for appellee.
OPINION
HUGHES, Justice.
Speedi Lubrication Centers, Inc. has appealed a final judgment in favor of Atlas Match Corporation which had sued it for breach of contract. Jury was waived. No findings of fact or conclusions of law were requested or made.
We affirm.
Speedi and Atlas entered into a contract which provided for Speedi to buy 400,000 advertising matchbooks from Atlas, to be paid for within 30 days of delivery of each shipment. First delivery was to be made when Atlas was given the various addresses of the lubrication centers of Speedi.
On February 25, 1977 Atlas shipped 22 cases of the matchbooks to Speedi at 3 of its locations. The matches were received by Speedi with an invoice showing $2,167.34 as "total amount due." Terms on the invoice were "1-10 NET 30." Atlas did not receive any payment until June 1, 1977 (more than 60 days), at which time it received $1,000.00 from Speedi. Atlas by letter of August 4, 1977, declared Speedi to be in default for not paying within 30 days. No other payment was received within 10 days of the date of such letter, but Speedi did later receive a check for $1,167.00 which was returned for non-sufficient funds and subsequently replaced with a cashier's check. Mr. Morehead, assistant treasurer of Atlas, testified that, to his knowledge, Atlas had never accepted any check from Speedi in full accord and satisfaction of the contract here involved. He also stated that had it occurred he would have had to authorize any settlement. Atlas did admit to receiving the two checks for the amount of the invoice.
Speedi, in its three points of error, claims that the trial court erred in rendering judgment for Atlas because: 1. The liquidated damages provision in the contract is, in fact, a penalty; 2. Atlas failed to delivery or tender delivery of the matchbooks as required in § 2-507 of the Uniform Commercial Code; and, 3. Atlas, by accepting payments from Speedi, waived its right to bring this action against it.
Paragraph 6 of the contract here involved provides in part:
"6The following shall be deemed material breaches of this agreement:
"A. Purchaser's failure to accept any shipment of matchbooks and/or packaging delivered pursuant hereto.
"B. Purchaser's failure to make any payment pursuant hereto when due.
"C. The failure of Purchaser to give Atlas written notice of any sale, merger, termination or other disposition of Purchaser's business at least thirty (30) days prior to any such event.
"D. Any oral or written repudiation of this Agreement or any part hereof by Purchaser. In the event of any such material breach, Atlas shall be entitled to pursue any and all remedies available to it pursuant to the Texas Business and Commerce Code or any other applicable statute or rule of law for any and all amounts due Atlas from Purchaser pursuant to this Agreement.
"In addition to any other such remedy, it is specifically agreed that Atlas shall be entitled to accelerate the terms of payment as set forth on the reverse side hereof to payment in full in advance for the entire undelivered balance of matchbooks and packaging ordered hereby. Upon receipt of full payment in advance, Atlas shall ship to Purchaser the undelivered balance of matchbooks and packaging ordered hereby, either at once, or according to *914 the delivery schedule set forth in the reverse side hereof, at the option of Atlas.
"Atlas shall have the right to recover from Purchaser the price of all matchbooks and packaging delivered and/or identified to this agreement at the time of Purchaser's breach hereof and shall be additionally entitled to recover fifty percent (50%) of the contract price of matchbooks and/or packaging ordered hereby, but not delivered or identified to this Agreement at the time of Purchaser's breach, as liquidated damages, it being agreed by Purchaser that, with respect to matchbooks and/or packaging not delivered or identified to this Agreement at the time of such breach, the actual damages, in the form of lost profits, which will be sustained by Atlas by reason of Purchaser's breach will be uncertain and difficult, if not impossible, to ascertain due to the fact that Atlas utilizes a `process-cost system' of accounting in determining the production costs of matchbooks and packaging and cannot determine the actual costs of producing particular orders of matchbooks and/or packaging and cannot therefore, compute its profits on the match-books and/or packaging ordered hereby but not delivered or identified to this agreement due to Purchaser's breach. Purchaser agrees that the percentage as specified hereinabove, of the contract price of the matchbook and/or packaging ordered hereby, but not delivered or identified to this agreement at the time of Purchaser's breach, will be reasonable and just compensation for such breach, and Purchaser hereby promises to pay such sum as liquidated damages, not as penalty in the event of any such breach.
"...."
"Liquidated damages or a penalty?" is the question here. Is the stipulation for 50% of contract price as liquidated damages reasonable and are "the actual damages... uncertain and difficult ... to ascertain due to the fact that Atlas utilizes a `process-cost system' of accounting in determining the production costs of matchbooks... and cannot determine the actual cost of producing particular orders..."?
It was provided in the contract that the 50% of contract price "will be reasonable and just compensation for a breach." However, Chief Justice Hickman in Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484, (1952) said, in effect, "it ain't necessarily so." That case enunciated as a rule for enforceable liquidated damage clauses that "the damages must be uncertain and the stipulation must be reasonable." In the Stewart case it was concluded that "since the contract provided the same reparation for the breach of each and every covenant, and since it would be unreasonable and a violation of the principle of just compensation to enforce it as to some of them, the provision for stipulated damages should be treated as a penalty." (Emphasis ours.)
Paragraph 6 of the contract here at issue specifically deems the following as material breaches:
1. Failure to accept shipment of matchbooks;
2. Failure to make payment;
3. Failure of purchaser to give Atlas 30 days' notice of sale, sale, termination or other disposition of its business, and
4. Any oral or written repudiation of the agreement or any part of it.
Trial court here evidently concluded that each of the four stipulated breaches above listed were not unreasonable and a violation of just compensation. Unlike the contract in Oetting v. Flake Uniform & Linen Service, 553 S.W.2d 793, (Tex.Civ.App.Fort Worth 1977, no writ) where the only provision for termination of contract was "failure to pay," the case at hand has the four mentioned.
Since there are no findings of fact or conclusions of law filed in this case, if there is any legal evidence on which to affirm, we must do so. Smitheal v. Smitheal, 518 S.W.2d 842 (Tex.Civ.App.Fort Worth 1975, error dism'd), cert. den., 423 U.S. 928, 96 S. Ct. 277, 46 L. Ed. 2d 256.
*915 The only testimony about the 50% liquidated figure came from Mr. Morehead, assistant treasurer of Atlas. He testified that commissions, art work, and plate production were "heavy", "up front" costs that could not be "broken down" because of Atlas' process cost system with all jobs being run through as average cost. He also testified that lost profits are liquidated damages in this case. Further, he said that factors for art work and other overhead matters were uncertain and those used for Speedi were not the same for any other customer of Atlas in 1976.
We hold that trial court was correct in not finding the liquidated damages clause a penalty and overrule the first point of error.
Speedi urges that, since Atlas failed to deliver or tender delivery of the rest of the matchbooks, section 2.507 of the Texas Business and Commerce Code, it was barred from recovery. We agree with Atlas that Section 1.102c does provide that provisions of the Uniform Commercial Code may be varied by agreement. Section 2.507 also provides that "tender of delivery is a condition to the buyer's duty to accept the goods and, unless otherwise agreed, to his duty to pay for them."
The contract here involved does "otherwise agree" and does provide for delivery of the matchbooks after the acceleration to full payment for the undelivered books. No payment in full (or in part) was made after Atlas' notice to Speedi of default and acceleration on any undelivered matchbooks. We hold delivery or tender of delivery unnecessary in the circumstances here and overrule the second point of error.
We do not agree that Atlas waived its right to action on breach of contract by accepting payment late for matches previously delivered. Atlas declared default and acceleration the same day it accepted the $1,000.00 first payment and Speedi later sent the balance overdue on the previously delivered matchbooks anyway. Atlas did not waive its right to sue on breach of contract for a payment accepted for a past consideration. Liberty Sign Company v. Newsom, 426 S.W.2d 210 (Tex.1968 Reh. denied). We overrule the third point of error.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511686/ | 131 F.2d 292 (1942)
EARP
v.
JONES, Collector of Internal Revenue.
No. 2553.
Circuit Court of Appeals, Tenth Circuit.
October 30, 1942.
Rehearing Denied December 10, 1942.
Writ of Certiorari Denied February 15, 1943.
Streeter B. Flynn, of Oklahoma City, Okl. (R. M. Rainey, R. M. Rainey, Jr., and Rainey, Flynn, Green & Anderson, all of Oklahoma City, Okl., on the brief), for appellant.
Earl C. Crouter, Sp. Asst. to Atty. Gen. (Samuel O. Clark, Jr., Asst. Atty. Gen., Sewall Key and Samuel H. Levy, Sp. Assts. to Atty. Gen., and Charles E. Dierker, U. S. Atty., and George H. McElroy, Asst. U. S. Atty., both of Oklahoma City, Okl., on the brief), for appellee.
Before PHILLIPS, HUXMAN, and MURRAH, Circuit Judges.
HUXMAN, Circuit Judge.
Appellant paid deficiency assessments on his income tax returns for 1937 and 1938 under protest, and then instituted this action to recover the same. He has appealed from an adverse ruling.
On December 1, 1937, by written deed of gift, appellant conveyed to his wife a one-half interest in his insurance business which he had been conducting in Oklahoma City as sole owner, under the name of Ancel Earp and Company. In consideration of the gift, she released her claim to any or all of his estate at the time of his death, and agreed that he might dispose of it as he saw fit. On the same day, he and his wife then entered into a written partnership agreement under which they became copartners in the business under the same firm name. The old agency contracts were canceled and new ones were executed with the partnership. Partnership books were opened and kept, reflecting the interests of the two partners.
The government's position is that the partnership arrangement effected no substantial *293 change in appellant's status within the meaning of the provisions of the applicable revenue statute and that therefore he is chargeable with the entire taxable income from the business.
It may be conceded that the arrangement is sufficient to constitute a legal partnership under Oklahoma law. It remains only to inquire if it is sufficient to effect a change in appellant's economic status for income tax purposes under the federal income tax law.
Section 181 of the Revenue Act of 1936, 49 Stat. 1648, 1709, 26 U.S.C.A. Int.Rev. Code § 181, provides that: "Individuals carrying on business in partnership shall be liable for income tax only in their individual capacity."
The Supreme Court has quite clearly laid down the principles which must guide us in the determination of this question. In Harrison v. Schaffner, 312 U.S. 579, 61 S. Ct. 759, 85 L. Ed. 1055, in considering a gift of income by assignment, the court held that the operation of the taxing statute was not controlled by attenuated subtleties, but rather by the import and reasonable construction of the Act; that the court was not so much concerned with the refinements of title as with the command over the income. Concerning attempts to avoid the effect of a taxing statute by various devices, the court held that one having the right to enjoy income could not escape the tax by any kind of anticipatory arrangement, however skilfully devised, by which he procured payment to another. In Burnet v. Leininger, 285 U.S. 136, 52 S. Ct. 345, 76 L. Ed. 665, one partner conveyed one-half of his interest in an existing partnership to his wife. In upholding the right of the government to tax the entire income of his share to him, the court stressed the fact that there was no readjustment of rights in the partnership property and management.
In Lucas v. Earl, 281 U.S. 111, 50 S. Ct. 241, 74 L. Ed. 731, the court stressed the power to tax income to him who earns it, and stated that no anticipatory arrangement, no matter how skilfully devised, can avoid this. The court said that the fruit must be attributed to the tree on which it grew. In Gregory v. Helvering, 293 U.S. 465, 55 S. Ct. 266, 79 L. Ed. 596, 97 A.L.R. 1355, the court held that while a taxpayer was free to choose any organization for the conduct of his business, the government was not bound thereby; that it could look to the actualities and that if it found the form for doing business unreal or a sham, it was free to disregard the effect of the fiction as best served the purpose of the tax statute. In Helvering v. Clifford, 309 U.S. 331, 60 S. Ct. 554, 84 L. Ed. 788, the court held that multiplying one economic unit into two or more by devices, although valid under state law, would not be conclusive on the federal government under the federal income tax law.
A careful examination of the record leads us to conclude that no substantial change was effected by these arrangements. For all practical purposes appellant surrendered nothing. It is urged that after forming the partnership his rights in the property were different; that his wife had the right to demand an accounting or even a dissolution of the partnership and a division of the property. But these rights were more fanciful than real, for while the partnership agreement gave her full rights of management and control with him, it was not intended that she should have any voice in the business. No license to sell insurance was issued to her, because, as appellant testified, "We didn't intend for her to have one." The purpose of the partnership was not to create and carry on a new joint enterprise or to unite their joint efforts and substance in a new undertaking. She took no part in its management or affairs. She was a housewife who had devoted her life to her house and her family. This she continued to do thereafter. She contributed nothing of her own to the partnership. All she contributed was the one-half of the insurance business which she had that day received as a gift from the owner of the business for the purpose of placing it back in the business in the form of a partnership. It is argued that she was entitled to and received her share of the profits. The undisputed facts show that prior to the partnership arrangement, appellant had provided her with $400 per month for the support of the family. These payments were continued after the partnership. But apparently all sums credited to her during 1938 as her share of the profits were used by her for the same purposes. During 1938 she was charged on the partnership books with the sum of $5,299.84. Of this sum, $3,950 was borrowed by appellant. *294 This money which he borrowed was not even deposited in her account. He testified that he took it out of the business the same way that he took money out of the business prior to December 1, 1937. Apparently she was not consulted either about the sums that were charged to her or the loans that were made in her name. It is doubtful if she knew that she was receiving the money or that the loans were being made. He simply took the money, gave her a note, and charged her with it on the books of the company.
While she purported to release her right to inherit his estate at his death and granted him the right to dispose of the estate as he saw fit, it clearly appears that the parties did not contemplate that this would be done. Prior to these transactions, they both had made wills in which they had named the other as the sole beneficiary of all the estate. No doubt to remove any uncertainty as to the effect of the deed of gift and the partnership agreement on these wills, they redrew and re-executed them after the execution of the partnership agreement, again naming each other as the sole beneficiary in their wills; so that if she survived appellant she would still inherit all his property, the same as before.
The apparent purpose of the partnership was not the creation and carrying on of a new joint enterprise or uniting their joint efforts or substance in a new undertaking. The real purpose of the partnership was to minimize income taxes. It is well settled that it is not unlawful to avoid the attachment of taxes. When a new tax comes into existence one is free to arrange or change his method or mode of operation to avoid the attachment of the tax or minimize the effect thereof. The change must, however, be real and substantial. One may not merely change the form but do business in substantially the same way. An essentially new and different economic unit must be formed. This appellant failed to do. All he did was to clothe himself in the cloak of a partnership, but when the cloak was removed, there stood the same individual, doing business in substantially the same way, and, for all practical purposes, unimpeded or unhindered by any restriction which usually flows from a partnership relation. For all practical purposes, he surrendered nothing. He still was monarch of all he surveyed.
Our attention is called to the case of Ledbetter v. Commissioner, decided January 19, 1942, where a contrary decision was reached by the Board of Tax Appeals on what is claimed to be an identical state of facts. We have examined the Ledbetter case, and in the interest of brevity, it is sufficient to say that in our view the facts there are distinguishable from the facts we have before us here.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511761/ | 484 Pa. 85 (1979)
398 A.2d 955
COMMONWEALTH of Pennsylvania
v.
James SISCO, Appellant.
Supreme Court of Pennsylvania.
Submitted January 9, 1979.
Decided March 14, 1979.
*86 *87 William J. Manfredi, Philadelphia, for appellant.
Robert B. Lawler, Chief, Appeals Div., James Garrett, Philadelphia, for appellee.
Before EAGEN, C.J., and O'BRIEN, ROBERTS, NIX, MANDERINO and LARSEN, JJ.
OPINION OF THE COURT
O'BRIEN, Justice.
Appellant, James Sisco, was convicted in the Court of Common Pleas of Philadelphia of murder of the third degree and possession of instruments of crime. He was sentenced to imprisonment for eight to twenty years for murder and one to five years for possession of instruments of crime, the sentences to run concurrently. He has appealed the judgment of sentence for murder to this court and the judgment of sentence for possession of instruments of crime to the Superior Court, which certified that appeal to this court.
Appellant was charged in connection with the killing of Anthony Wilson in Philadelphia on July 9, 1975. The testimony shows that during the late afternoon of that day, the decedent and several friends were on the street in the vicinity of the adjoining residences of appellant and his grandmother. Appellant was also in the street but was not with decedent's party. Appellant and decedent got into a fist fight and the others present broke it up. They got into another fist fight, which was also broken up. Appellant then shot and killed decedent. Several of decedent's companions testified for the Commonwealth that after the fist fights, appellant went into his grandmother's house, came out with a gun, and fired at decedent. Appellant claimed to have acted in self defense. He testified that the decedent accused him of stealing his mother's pocketbook and started *88 the fist fight. Appellant said that decedent did the same thing after he came out of his grandmother's house and that the entire group followed him and threatened him as he tried to retreat. He claimed that he shot because he feared for his life and that he always carried the gun because of fear of crime. Leona Gross, an eyewitness, testified in rebuttal. She said that appellant came up to her and said, "I got the joint for you." She said she did not want it. Appellant expressed annoyance at that and then approached decedent. Appellant said, "I heard you said I stole your mother's pocketbook," and struck the decedent. According to Gross, appellant was the aggressor.
Appellant argues on appeal that the trial court erroneously prevented him from cross-examining Commonwealth witnesses by confronting them with allegedly inconsistent testimony of previous witnesses. We find no error. The scope and manner of cross-examination are within the discretion of the trial judge. Commonwealth v. Bailey, 450 Pa. 201, 299 A.2d 298 (1973). The court's decision is not reversible unless there is an abuse of discretion or error of law. Commonwealth v. Schmidt, 437 Pa. 563, 263 A.2d 382 (1970). That is not present here. See Commonwealth v. Holland, 480 Pa. 202, 389 A.2d 1026 (1978), where we found no abuse of discretion in refusing to allow the defense to ask a Commonwealth witness whether he knew that another had identified someone other than the defendant as the perpetrator of the crime.
Another of appellant's contentions is that the trial court improperly refused to grant a mistrial because Leona Gross referred to crimes he allegedly committed other than those he was being tried for. He complains of her references to his having a joint and being accused of stealing decedent's mother's pocketbook. It is normally not permissible to introduce evidence of crimes distinct from those that are the subject of the trial, Commonwealth v. Groce, 452 Pa. 15, 303 A.2d 917 (1973), but appellant cannot complain in this case. He had already referred to the accusation of the pocketbook theft in his own testimony. Gross referred to his having a joint on direct examination without objection. *89 There was no objection until she mentioned it on cross-examination. There was no harm to appellant because no new evidence was being conveyed. Commonwealth v. Slaughter, 482 Pa. 538, 394 A.2d 453 (1978).
Appellant also alleges that the court erred in refusing his request that the jury be instructed that if two witnesses gave conflicting testimony, it could choose to believe neither. This claim is meritless. The judge told the jury that it was the sole judge of credibility. He said that it was up to the jury to resolve conflicts in testimony and that the jury could believe all, part, or none of the testimony of any witness. He stated the law correctly. Commonwealth v. Kearney, 459 Pa. 603, 331 A.2d 156 (1975); Commonwealth v. Hornberger, 441 Pa. 57, 270 A.2d 195 (1970). A court may use its own language in charging the jury rather than that proposed by counsel if the issue is adequately, accurately and clearly presented. Commonwealth v. Harris, 479 Pa. 131, 387 A.2d 869 (1978). The instructions in this case met that test.
Having considered all arguments, we find no merit to this appeal.
The judgments of sentence are affirmed.
NIX and MANDERINO, JJ., concur in the result. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511765/ | 264 Pa. Superior Ct. 21 (1979)
398 A.2d 1036
COMMONWEALTH of Pennsylvania
v.
Dennis Eugene KLINGER, Appellant.
Superior Court of Pennsylvania.
Argued September 12, 1978.
Decided February 23, 1979.
*23 William C. Costopoulos, Lemoyne, for appellant.
Donald L. Reihart, Special Assistant Attorney General, for the Commonwealth and with him C. Joseph Rehkamp, District Attorney, Perry County, submitted a brief on behalf of the Commonwealth, appellee.
Before PRICE, HESTER and HOFFMAN, JJ.
*24 HESTER, Judge:
On June 7, 1976, the lifeless body of Hazel Pulaski was discovered in a remote, mountainous region known as Lambs Gap, in Perry County. She had been missing for ten days and was the object of an intensive search by family, friends, and police. Her son, appellant Dennis Klinger, was formally charged with her murder and, following an eight day jury trial, during which over 30 witnesses testified, including appellant, he was found not guilty. Eight months later, the Perry County District Attorney charged appellant with various counts of perjury, false swearing, and conspiracy[1] relative to appellant's trial testimony. At a preliminary hearing on June 20, 1977, appellant was ordered held for court on four counts of perjury and one count each of false swearing and conspiracy. A motion to dismiss, contending the prosecution is barred by double jeopardy and collateral estoppel, was denied. This appeal followed.[2]
Whether a prosecution is barred by a former verdict of acquittal on a different charge is determined by Section 110 of the Crimes Code, 18 C.P.S.A. §§ 110. That section provides in pertinent part:
§ 110. When prosecution barred by former prosecution for different offense
Although a prosecution is for a violation of a different provision of the statutes than a former prosecution or is based on different facts, it is barred by such former prosecution under the following circumstances:
* * * * * *
(2) The former prosecution was terminated, after the indictment was found, by an acquittal or by a final order or *25 judgment for the defendant which has not been set aside, reversed or vacated and which acquittal, final order or judgment necessarily required a determination inconsistent with a fact which must be established for conviction of the second offense.
We have recognized that Sec. 110(2), although a "cumbersome statute", does no more than codify settled principles of collateral estoppel in criminal cases: That once a former prosecution necessarily establishes an ultimate fact in favor of a defendant, then a subsequent prosecution depending upon a contrary finding must be barred. Commonwealth v. Shelhorse, 252 Pa.Super. 475, 381 A.2d 1305, 1308 (1977).[3] In Ashe v. Swenson, 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 409 (1970), the Supreme Court found the collateral estoppel doctrine is embraced by the federal constitutional proscription against double jeopardy and stated the reviewing court's approach as follows:
"Collateral estoppel" is an awkward phrase, but it stands for an extremely important principle in our adversary system of justice. It means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit.
The federal decisions have made clear that the rule of collateral estoppel in criminal cases is not to be applied with the hypertechnical and archaic approach of a 19th century pleading book, but with realism and rationality. Where a previous judgment of acquittal was based upon a general verdict, as is usually the case, this approach requires a court to "examine the record of a prior proceeding, taking into account the pleadings, evidence, charge, and other relevant matter, and conclude whether a rational jury could have grounded its verdict upon an issue other than that which the defendant seeks to foreclose from *26 consideration." The inquiry "must be set in a practical frame and viewed with an eye to all the circumstances of the proceedings." Sealfon v. United States, 332 U.S. 575, 579, 68 S.Ct. 237, 240, 92 L.Ed. 180. Any test more technically restrictive would of course, simply amount to a rejection of the rule of collateral estoppel in criminal proceedings, at least in every case where the first judgment was based upon a general verdict of acquittal. [Footnote omitted].
397 U.S. at 443-4, 90 S.Ct. at 1194; Commonwealth v. Grazier v. Studebaker, 481 Pa. 622, 393 A.2d 335; See also Commonwealth v. Campana (I), 452 Pa. 233, 304 A.2d 432, vacated, 414 U.S. 808, 94 S.Ct. 73, 38 L.Ed.2d 44 (1973), reinstated, 455 Pa. 622, 314 A.2d 854 (Campana II), cert. den., 417 U.S. 969, 94 S.Ct. 3172, 41 L.Ed.2d 1139 (1974). Commonwealth v. DeVaughn, 221 Pa.Super. 410, 292 A.2d 444 (1972).[4] Accordingly, we now turn to a consideration of appellant's murder trial. We will then construe each perjury charge to determine if the general verdict of acquittal in the murder trial will necessarily foreclose any issues sought to be proven in the perjury trial.
The commonwealth's case against appellant was entirely circumstantial, as there were no eyewitnesses to the killing. Undisputed testimony showed that on Friday, May 28, 1976, at approximately 7:20 A.M., appellant walked into the West Shore Youth Counseling Center in Camp Hill, Pa., and was met by Vincent O'Reilly, a counselor. Appellant informed O'Reilly that he wanted to "turn himself in" to his parole officer because he had been in violation of his parole conditions.[5] Appellant called his mother from O'Reilly's office and asked her to pick him up at a nearby shopping center *27 and to drive him to his parole officer. The deceased, Hazel Pulaski, was seen meeting appellant in her brown Pinto at the shopping center about 7:40 A.M., and the two drove away. Appellant was not seen again by a Commonwealth witness until 9:00 or 9:15 A.M. the same morning at the home of his friend Carol Durkin, in Camp Hill. Appellant at that time was driving the Pinto and was not accompanied by his mother. Mrs. Pulaski was not seen alive again. The critical time period, then, was between 7:40 A.M. and 9:15 A.M. on May 28, 1976. It was stipulated by counsel, and the jury was advised, that if appellant murdered his mother, it had to have occurred within that time slot. (Trans., 10/12/76, Daytime, p. 31). The events transpiring within that gap were much in dispute.
The Commonwealth proceeded on the theory that appellant drove his mother from the Camp Hill shopping center to a damp, wooded area known as Lambs Gap, where he killed her[6] and left her face down near a small stream.[7] Appellant then proceeded to Carol Durkin's home, in whose company he spent the remainder of the morning. Friday evening, appellant took his girlfriend Allyson Weiss, to the Maryland shore, where the two remained until Monday evening, May 31. By that time, intensive search efforts had been launched for Mrs. Pulaski and suspicion of foul play had centered on appellant. He eluded authorities until his arrest on Wednesday, June 2.
Much of the Commonwealth's evidence focused on appellant's motive and opportunity to kill his mother. It was shown Mrs. Pulaski had recently preferred charges against her son for forging and cashing her checks and that appellant was bitter toward her for refusing to post bail for him *28 on several occasions. Further, the Commonwealth established appellant was very familiar with the Lambs Gap region, having travelled there "every weekend" with friends. (Trans. 10/13/76, Daytime, pp. 57-8). Commonwealth evidence also stressed appellant's weekend flight to the shore following his mother's disappearance and his furtive activity up to the day of his arrest.
The defense presented a different version of the events of May 28. Appellant stated he was not in the Lambs Gap area that morning, but drove his mother to a site some 3¼ miles distant therefrom, a region known as Millers Gap. There, appellant requested his mother's aid in locating camping equipment he had left there the previous day.[8] Appellant parked the car and he and his mother walked along a fire trail for some distance before splitting up, at appellant's behest, to search the area for the equipment. Once appellant lost sight of his mother, he doubled back to the car and drove away. Appellant explained this deceit by stating he needed his mother's car to spend "one last weekend" with Allyson Weiss before he went to jail for parole violations.[9] (Trans. 10/11/76, Evening, p. 47). Appellant was confident his mother could seek refuge at Tillie Miller's, whose home was in Millers Gap.
As he drove from Millers Gap that morning, appellant made a brief detour up Lambs Gap road in an effort to locate two individuals from whom he wished to purchase marijuana.[10] He spotted and waved to these two along the side of the road, but did not stop since there was traffic behind him. Appellant then proceeded to Carol Durkin's home.
He returned Monday night from Maryland and soon learned his mother was missing and that he was the focus of *29 investigation. He eluded authorities until June 2, he explained, because he had heard the police would shoot him.
The defense repeatedly stressed that appellant's version of the events of May 28 and the period thereafter remained consistent from the day of his arrest to the time of trial and that he was, in large part, corroborated by Commonwealth witnesses. The defense also attempted to divert suspicion to the deceased's husband, Robert, appellant's stepfather. It was shown Robert Pulaski was continually upset with Hazel for her refusal to amend the deed on the house to include his (Robert's) name. Further, cross-examination of Mr. Pulaski elicited several inconsistencies in what he was doing and where he was the morning of his wife's disappearance.
Commonwealth and defense witnesses both testified to "timed runs" they had made, tracing the alleged routes of appellant the morning of the 28th. The conclusion was drawn that appellant could have travelled from Camp Hill to either Lambs or Millers Gap, and then to Carol Durkin's home, consistent with the 7:40 A.M.-9:15 A.M. framework.
The court's charge to the jury properly stressed the Commonwealth's burden of proof and mentioned specifically several factors for the jury to consider: whether another person may be responsible for the death, whether the killing occurred in an area other than where the body was found (see n. 7., supra), the effect of prior inconsistent and consonant statements, and how the jury should construe evidence of motive and flight.
We will now turn to the specific perjury crimes, all of which emanated from appellant's trial testimony. Count I charges appellant lied when he stated on cross-examination that he did not kill his mother and does not know who killed his mother, the count averring that appellant did kill his mother. Count II charges appellant lied when he stated on direct that he saw and waved to Christ and Duncan on Lambs Gap road after leaving Millers Gap, the count averring he never saw them that morning. Count III charges appellant lied when he stated on direct that the last time he *30 saw his mother was when he lost sight of her on Millers Gap and doubled back to the car, the count averring that the last time he saw his mother was when he struck her. Count V[11] charges appellant lied when he stated on cross that one Nielson was the first person to whom he related the events of Millers Gap,[12] the count averring that appellant had earlier told one Sue Ann Guise that he had struck his mother and left her on the mountain. Count VI charges appellant lied when he detailed the route taken with his mother from Camp Hill to the mountain, the count averring the two had stopped at a manufacturing plant to ask about employment. Count VII charges appellant conspired with his defense attorney to commit the foregoing crimes of perjury.
Following a plenary review of the proceedings below, we are of the opinion that only the ultimate fact of Count I is barred from being litigated again. Whatever else the jury may have decided by its general verdict of acquittal, it is clear that it necessarily determined appellant did not murder his mother. To hold otherwise would distort the plain meaning of the jury's "not guilty" verdict. Hence, appellant cannot be tried for falsely denying he killed his mother, the jury having clearly resolved that question in his favor.
Counts II through VII, however, deal with collateral portions of appellant's testimony which, although important for the jury to consider, were not necessarily passed upon in reaching the verdict. The jury was not required to believe, for example, that appellant did see Christ and Duncan on the mountain (Count II). A rational jury could find appellant did not kill his mother and then saw no one at all on his route to Miss Durkin's. Nor was the jury required to find appellant never struck his mother or never told anyone he struck his mother (Counts III and V). Thus, the jury could find appellant struck his mother, out of hostility proven at trial, but did not kill her. Further, a verdict of not guilty does not also require a finding that appellant pursued the *31 course to Millers Gap to which he testified (Count VI). The Commonwealth made repeated attempts to shake this portion of appellant's testimony and a rational jury could find appellant not guilty of murder without also deciding he took this route or that. Finally, the conspiracy charge (Count VII) was not conclusively determined by the jury.[13]
We think it clear that, based upon this voluminous record and the large number of factual issues submitted, a "rational jury could have grounded its verdict upon [issues] other than [those] which the defendant seeks to foreclose from consideration." Ashe, supra. A general finding of not guilty of murder is not "inconsistent with . . . fact[s] which must be established for conviction" of the perjury counts. Sec. 110(2).
Our Court has, on two prior occasions, considered the question of perjury prosecutions following acquittal[14] and, in each case, found the charges permissible since "the acquitting fact-finder was not required to rule upon the truth or falsity of the challenged statement in order to reach the verdict." Commonwealth v. Rose, supra, reversed in other grounds, 437 Pa. 30, 261 A.2d 586 (1970). And in Commonwealth v. Mervin, 230 Pa.S. 552, 326 A.2d 602 (1974), we said, "[I]t is manifestly clear that the ultimate issues of fact involved in the two proceedings [assault v. perjury] were entirely different, thus precluding the applicability of collateral estoppel . . . To sustain appellant's argument. . . would be to allow the concept of collateral estoppel, *32 which is designed to protect an accused from prosecutorial harassment to be used as a shield to insulate a defendant from his own wrongdoing in fraudulently obtaining a favorable result in a criminal case." id., 230 Pa.Super. at 560, 326 A.2d at 606-7.[15]
As this case illustrates, collateral estoppel, because of its "inherent limitations" affords only limited protection to a defendant from successive prosecution. See Campana I, 452 Pa. at 246-7, 304 A.2d at 438. Where a jury has a multitude of issues to consider in its deliberations and the verdict on its face does not reflect on what the decision is based, the court cannot say with certainty that any one issue is conclusively adjudicated. Simply stated, neither the Double Jeopardy Clause nor Sec. 110(2) provide appellant the relief he seeks. See also, Commonwealth v. Hogan, 482 Pa. 333, 393 A.2d 1133.
Accordingly, we reverse that portion of the lower court's order which directs appellant to be tried on Count I and that part of Count VII relating to Count I. In all other respects we affirm and remand for trial.
Affirmed in part and reversed in part.
HOFFMAN, J., files a dissenting opinion.
*33 HOFFMAN, Judge, dissenting:
I agree with the majority that all Counts except the first are not barred under Section 110(2) of the Crimes Code, because, as the opinion demonstrates, none of the Commonwealth's averments here were "necessarily" determined in appellant's favor by the general verdict of acquittal at his murder trial.
However, the majority opinion has not distinguished in fact has lumped together state statutory collateral estoppel (Section 110) and the Fifth Amendment constitutional requirements of collateral estoppel found in the double jeopardy clause, Ashe v. Swenson, 397 U.S. 443, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970). While our statute permits a collateral estoppel defense only when the prosecution seeks to re-litigate facts "necessarily" decided in a defendant's prior trial, "[t]he federal decisions have made clear that the rule of collateral estoppel in criminal cases is not to be applied with the hypertechnical and archaic approach of a 19th century pleading book, but with realism and rationality. . . . The inquiry must be set in a practical frame and viewed with an eye to all the circumstances of the proceedings." Ashe v. Swenson, supra at 444, 90 S.Ct. at 1194. Indeed, the federal decisions indicate that constitutional collateral estoppel is not limited to ultimate issues of fact necessarily decided at a prior trial, but also extends to evidentiary facts which are litigated, when the evidence presented in both trials will be substantially the same. "[T]he Government. . . may not in a second trial relitigate an issue of either ultimate fact or evidentiary fact upon which the defendant was acquitted in an earlier trial." U.S. v. Gurney, 418 F.Supp. 1265, 1268 (M.D.Fla. 1966). See also Wingate v. Wainwright, 464 F.2d 209, 213 (5th Cir. 1972) (government may not charge second offense after acquittal on first which would force a defense against the same factual allegations, even though they are only evidentiary).
As the Court in U.S. v. Drevetzski, 338 F.Supp. 403, 409 (N.D.Ill. 1972) said in barring a perjury prosecution after the defendant's acquittal in his previous trial: "While `if at first *34 you don't succeed try, try again' may be a lofty and worthy ideal for the general public it has no place in the area of criminal prosecution where that first attempt at success has fully and completely adjudicated the issues and where the second prosecution merely rehashes old evidence." Undoubtedly the reason for this Fifth Amendment protection is that "[f]or whatever else that constitutional guarantee may embrace, . . . it surely protects a man who has been acquitted from having to `run the gantlet' a second time." Ashe v. Swenson, supra at 445, 90 S.Ct. at 1195. The federal courts have therefore been cognizant of the potential danger of subsequent perjury prosecutions allowing abusive and vindictive prosecutors taking a second shot at acquitted defendants with the same evidence. See Adams v. U.S., 287 F.2d 701, 703 (5th Cir. 1961). See also, Toll, Pennsylvania Crimes Code Annotated 537.
As the majority's recitation of the facts indicates, the Commonwealth showed that appellant had a motive and an opportunity to commit the murder. Looking at the trial "in a practical frame," and "with an eye to all the circumstances," I would say that the jury most likely acquitted appellant because they believed his testimony and found his alibi credible. That being the case, I would not permit the Commonwealth a second chance to prove that appellant's testimony was false in any of its evidentiary details. All that their case-in-chief can possibly do is re-hash all the old evidence surrounding the details of appellant's alibi in hope that a second jury will now disbelieve him in whole or part when the first jury found him credible. However, this is precisely that Ashe and the other federal cases cited here forbid, on constitutional grounds.
Moreover, a review of the averments in the Commonwealth's information, when compared to the evidence produced at the murder trial, indicates that the Commonwealth has an extremely weak perjury case, even though the majority allows it to be tried.
For instance, Count II charges that appellant lied when he said he saw two friends on Lambs Gap Road when he was *35 returning to Camp Hill on the day in question. The Commonwealth does not contend that appellant was not on the road, or that the two friends were not on the road at the same time. (In fact, the Commonwealth called these two individuals at the murder trial and proved their presence on the road). Apparently somehow the Commonwealth intends to prove that while the two friends were on the road and appellant had an opportunity to see them, he did not in fact see them! Bringing a perjury charge on these averments can be described as childish.
Count III avers that the appellant lied when he said that the last time he saw his mother was when he deserted her at Millers Gap, because actually the last time he saw her was when he struck her. Since the jury acquitted appellant of murder, the Commonwealth will thus have to prove that appellant delivered some non-lethal blow to his mother on the day in question at a place other than Millers Gap and then deserted her. We can by mental gymnastics conjure up this possibility, but how can the Commonwealth possibly prove this averment? Since there were no eyewitnesses, the Commonwealth has no chance unless the appellant himself changes his testimony and inculpates himself.
Count IV charges that appellant lied when he stated that he didn't think he had told anybody of his mother's whereabouts up to a certain time, when in fact he earlier told one Sue Ann Guise that he had struck his mother and left her on the mountain. First of all, appellant was uncertain at this point of his testimony. Secondly, the Commonwealth will have to prove a conversation in which appellant confesses to a crime which the murder jury said he did not commit. Lastly, since it is not alleged that anyone overheard this alleged admission to Ms. Guise, the two witness rule appears to be a difficult obstacle to the Commonwealth in proving this averment, unless they induce appellant to change his testimony and inculpate himself.
Count VI charges that appellant lied when he recounted his route taken to Miller Gap, because he omitted making a stop at the Valk Manufacturing Company. In the murder *36 trial, three witnesses testified, and the Commonwealth therefore stipulated, that a round trip from Camp Hill to either Millers Gap or Lambs Gap took a full hour and a half, the time elapsed between appellant's departure and his return when seen at Carol Durkin's house. For the Commonwealth to prove an additional excursion five to ten minutes out of the way, to a place where they allegedly stayed ten to fifteen minutes, puts an unbearable strain on the stipulated time framework of the events in question.
Because of the extreme weakness of the Commonwealth's case, I think it is questionable whether the information here is brought in good faith.[1] It is my view that the Fifth Amendment, as construed by Ashe v. Swenson, supra, protects the appellant from having to endure the hardship of defending criminal charges a second time.
I would reverse the order below and dismiss the information.
NOTES
[1] Act of Dec. 6, 1976, P.L. 1482, No. 334, §§ 1, 18 C.P.S.A. §§ 4902, 4902, 903, respectively.
[2] Jurisdiction rests in this Court pursuant to the Appellate Court Jurisdiction Act, 17 P.S. §§ 211.302. Denial of a pre-trial application seeking discharge on double jeopardy grounds is a "final order" for purpose of §§ 211.302 and is thus appealable prior to trial. Commonwealth v. Bronson, 482 Pa. 207, 393 A.2d 453; Commonwealth v. Bolden, 472 Pa. 602, 373 A.2d 90 (1977); Commonwealth v. Haefner, 473 Pa. 154, 373 A.2d 1094 (1977).
[3] Courts of this Commonwealth applied collateral estoppel in the criminal context long before the enactment of Sec. 110(2). See e.g. Dinkey v. Commonwealth, 17 Pa. 126 (1851). More recently, see Commonwealth v. Rose, 214 Pa.Super. 50, 251 A.2d 815 (1969), reversed on other grounds, 437 Pa. 30, 261 A.2d 586 (1970).
[4] The Double Jeopardy Clause is applicable to the states through the Due Process Clause of the Fourteenth Amendment. Benton v. Maryland, 395 U.S. 784, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969). Grazier, supra. Pennsylvania's double jeopardy clause is found in Art. 1, Sec. 10, and differs "only stylistically" from the parallel federal provision. Campana I, supra.
[5] Appellant had served four months in jail for forging several of his mother's checks and had been paroled in April, 1976.
[6] Cause of death was determined to be asphyxia. The victim had inhaled a large quantity of foreign material, principally sand, gravel, small twigs, and plants. It was not disputed that cause of death and the pathologist's findings were consistent with a homicide.
[7] The Commonwealth's case left open the possibility that Mrs. Pulaski was killed somewhere else, and then taken to Lambs Gap. There was conflicting testimony on whether the foreign material found in her lungs came from Lambs Gap or from some nearby region.
[8] Appellant admitted at trial there was in fact no camping equipment at Millers Gap, as he had removed it the day before.
[9] Appellant stated he thought he had violated his parole by failing to keep steady employment.
[10] These two fellows later turned out to be, apparently, Christ and Duncan.
[11] Count IV was dismissed at the preliminary hearing.
[12] Nielson was an Outreach worker at the West Shore Youth Center.
[13] Count VII alleges appellant conspired to lie about all the issues in Counts I through VI. Since we hold the fact sought to be proven in Count I is now foreclosed, appellant may not be tried for conspiracy as to Count I.
[14] Other jurisdictions have likewise confronted the problem and have undertaken an analysis similar to ours. Because each case turns on an examination of the former proceeding, the results go both ways. See, U.S. v. Williams, 341 U.S. 58, 71 S.Ct. 595, 95 L.Ed. 747 (1950) (perjury prosecution not barred); U.S. v. Gugliaro, 501 F.2d 68 (2nd Cir., 1974) (perjury prosecution not barred); Adams v. U.S., 287 F.2d 701 (5th Cir., 1961) (not barred); U.S. v. Drevetzki, 338 F.Supp. 403 (N.D.Ill. 1972) (barred); State v. DeSchepper, 304 Minn. 399, 231 N.W.2d 294 (1975) (not barred); People v. Houseman, 44 Cal.App.2d 619, 112 P.2d 944 (1941), cert. den. 314 U.S. 660, (1941) (not barred).
[15] "Double jeopardy does not bar the perjury prosecution since the offenses are different and honest testimony under oath must be insisted upon even in the case of persons defending themselves against charges of crime . . . In such a situation [estoppel v. perjury], one may legitimately prefer to preserve the sanction against perjury, which is always an evil, rather than be moved by the mere opportunity for abuse, which conscientious prosecutors would reject. [R]arely, if ever, does a general verdict of not guilty `necessarily require a determination' on any particular fact asserted by the defendant". Comments, Model Penal Code, Tent. Draft No. 6 (1956), p. 122-3. We also reject the notion that a verdict of acquittal means the jury believed all of a defendant's testimony and that of his witnesses. "The theory that when a jury acquits a defendant in a criminal proceeding, it thereby finds to be true the testimony of all witnesses called upon his behalf is not supported by reason or the common knowledge of mankind." People v. Houseman, supra, 44 Cal.App.2d 619, 623, 112 P.2d 944, 947, (1941), cert. den. 314 U.S. 660, 62 S.Ct. 114, 86 L.Ed. 529 (1941).
[1] The judge at appellant's murder trial, the Hon. Keith B. Quigley, learning of the District Attorney's intent to charge appellant with perjury, requested the D.A. to submit his case to the Attorney General for an impartial review. The case was assigned to Deputy Attorney General Bernard L. Seigel, who reviewed the evidence and concluded that appellant should not be prosecuted. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511885/ | 502 F. Supp. 42 (1980)
CPG PRODUCTS CORPORATION, Plaintiff,
v.
MEGO CORPORATION et al., Defendants.
No. C-1-79-582.
United States District Court, S. D. Ohio, W. D.
July 7, 1980.
*43 A. Ralph Navaro, Jr., Cincinnati, Ohio, for plaintiff.
James Liles, Cincinnati, Ohio, Bertram Frank, Vincent M. Fazzari, New York City, for defendants.
MEMORANDUM DECISION ON MOTION FOR TEMPORARY RESTRAINING ORDER
SPIEGEL, District Judge:
This is a civil action for patent infringement under Title 35, U.S.C. and for unfair competition under the common law of the United States and the State of Ohio. Jurisdiction of these matters is based on Title 28 U.S.C. § 1400(b) and Title 28 U.S.C. § 1338(b), respectively. Plaintiff's motion for a temporary restraining order which came on for hearing on July 1 and 2, 1980, concerns only the claim of unfair competition.
FINDINGS OF FACT
Plaintiff, CPG Products Corporation, (CPG) is a Delaware corporation having its principal place of business in Minneapolis, Minnesota. With respect to the subject matter of this litigation, CPG has acted primarily through its Kenner Products Division which is headquartered in Cincinnati.
Defendant, Mego Corporation, (Mego) is a New York corporation with its principal place of business in New York.
The patent infringement action concerns CPG's Patent No. 4,169,336, issued on October 2, 1979, on a stretchable toy figure consisting of an elastic skin filled with a viscous fluid and currently marketed as Stretch Armstrong and Stretch Monster. The toy figures are produced at CPG's plant located in this District. In conjunction with the patent infringement claim, CPG also alleges that Mego engaged in acts of unfair competition arising from its alleged misappropriation of confidential information concerning CPG's manufacturing process for its stretchable toy figures.
This matter had been before the Court on CPG's motion to compel a principal officer of Mego to answer questions propounded to him in his deposition, which questions concerned Mego's exportation of the technology *44 it uses in its manufacturing process for stretchable toy figures strikingly similar to CPG's. The Court granted this motion on July 1, and Mego's officer was immediately deposed.
The motion for the temporary restraining order to bar Mego from exporting such information came on for hearing thereafter on the testimony of Mego's officer, Mr. Martin B. Abrams, numerous affidavits of witnesses, exhibits, excerpts from discovery depositions, and extensive arguments of counsel.
The findings are, of course, preliminary in the sense that they are made on the evidence producible and produced at the hearing. Because of the nature of the relief requested by CPG, it was essential that the motion for a temporary restraining order be heard quickly. Thus, both sides were necessarily limited and it may well be that important evidence will take considerably more time to produce.
However, on the evidence presented, the Court finds that CPG's methods of production, the design of the production line for the stretchable toy figure, the combination of various pieces of equipment for use on the production line, the sources of such equipment, and related cost factors, were all considered confidential by CPG and represent a substantial investment in time, effort, and money. The Court further finds that these rise to the level of trade secrets as defined by Ohio law and are worthy of protection. Kewanee Oil Company v. Bicron Corporation, 416 U.S. 470, 94 S. Ct. 1879, 40 L. Ed. 2d 315 (1974) at pp. 474, 475, 94 S.Ct. at pp. 1882, 1883.
Further, the evidence presented shows that a substantial portion of CPG's confidential information relating to the manufacture of its stretchable toy figures was misappropriated by former and currently employed personnel of CPG's Kenner Division. This information included methods and equipment used in producing the stretchable toy figures and related cost information, and this misappropriated confidential information was acquired by Mego for a consideration with knowledge that it had been improperly disclosed as stated, and was used by Mego in the establishment of its production line of its stretchable toy figures marketed in competition with CPG's stretchable toy figures.
Moreover, the evidence disclosed that Mego is currently in the process of negotiations with a Mexican firm concerning the production of and sales in Mexico of the stretchable toy figures under a license from Mego, and that Mego is willing to transfer the technical information used by it in its manufacturing process to its Mexican concern, which is likely to include confidential trade secrets of CPG. Finally, the testimony developed that the Mexican firm plans to begin test marketing the toy in late 1980 with full production beginning in 1981.
Counsel for both parties concede that there is no remedy in Mexico for misappropriation of trade secrets. Should Mego transfer said technical information to Mexico, such information would then be in the public domain for anyone's use. Thus, irreparable injury would be incurred by CPG if trade secrets developed by it and utilized by Mego are exported to Mexico.
On the other hand, the evidence shows that it is unlikely that Mego would suffer serious harm should the temporary restraining order be granted, barring it from exporting its technical information. Mego is still in negotiations with its Mexican affiliate and the Mexican venture is aimed for a date five or six months in the future.
Finally, the evidence does not indicate that the public interest will be disserved by the granting of a temporary restraining order. To the contrary, Ohio law actively discourages unauthorized use of trade secrets by those to whom the secrets have been confided by making such activity criminal. Ohio Revised Code §§ 1333.51, 1333.99. On the basis of these facts, it is the opinion of the Court that CPG is entitled to immediate relief.
CONCLUSIONS OF LAW
The standard which the Court uses in making this determination, is that set out in *45 Roth v. Bank of The Commonwealth, 583 F.2d 527 (6th Cir. 1978), at pp. 537, 538. That is, it has assessed CPG's likelihood of success on the merits and considered the irreparability of any harm to CPG, the balance of injury as between the parties, and the impact of the ruling on the public interest.
Clearly, the degree of injury CPG will suffer, absent a temporary restraining order, is great while any injury to Mego by the imposition of such a restraint will be minimal. Moreover, this is a complex case in which CPG has raised questions going to the merits which are serious and substantial and present fair grounds for litigation. Hamilton Watch Co. v. Benrus Watch Co., 206 F.2d 738 (2d Cir. 1953), cited with approval in Roth, supra. The Court, therefore, declines to determine more from the limited evidence produced than that CPG has presented evidence that CPG has a good likelihood of success on the merits of its claim of unfair competition, which calls for more deliberate investigation. See Emery Industries, Inc. v. Cottier, 202 U.S.P.Q. 829 (S.D.Ohio, 1978) at p. 834.
In this regard, the Court notes that there is pending a motion to dismiss this case for lack of jurisdiction. Mego has requested oral argument on this motion which will be set for hearing shortly. However, the Court has considered the question of jurisdiction as one element of CPG's likelihood of success. In that context and for the purposes of this motion for a temporary restraining order only, the Court finds that there is sufficient evidence now in the record to indicate that if there was faulty service, which is the basis for Mego's assertion of lack of jurisdiction, it was waived; however, the Court is not finally ruling on that issue at this time.
Consequently, having weighed CPG's likelihood of success with all the other factors to be considered in determining whether a temporary restraining order should be granted, the Court finds that immediate relief is indicated.
Further, under all the circumstances of this case, it appears to the Court that CPG reasonably should be required, as a condition of the temporary restraining order, to give bond in the amount of Ten Thousand ($10,000) Dollars.
A temporary restraining order consistent with the foregoing has been entered this date.
So ordered. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511786/ | 761 S.W.2d 269 (1988)
SOUTHERN CROSS LUMBER & MILLWORK COMPANY, Plaintiff-Respondent,
v.
James B. BECKER, Defendant-Appellant.
No. 54326.
Missouri Court of Appeals, Eastern District, Division Two.
November 29, 1988.
*270 Robert E. Jones, St. Louis, for defendant-appellant.
David V. Collignon, Clayton, for plaintiff-respondent.
GRIMM, Presiding Judge.
In this bench-tried case, James Becker, d/b/a Becker Escrow Service, appeals from a judgment entered in favor of plaintiff Southern Cross Lumber and Millwork Company for damages resulting from a breach of fiduciary duty. We affirm.
There are three allegations of error. First, that the trial court erred in overruling Becker's motion to dismiss because Southern's cause of action was barred by the five-year statute of limitations, § 516.120, RSMo 1986. We disagree, because Southern filed its suit within five years after its damages were capable of ascertainment. Second, that the trial court erred in determining that Becker owed a duty to Southern not to deliver Southern's mechanic's lien waiver without first disbursing full payment to Southern. We disagree, because Becker, as escrow agent, had a duty not to release the lien waiver unless Southern received payment.
The third and final allegation is that the trial court erred in determining that Becker was indebted to Southern in the amount of $7,432.92 because Southern clearly acknowledged, by delivery of its lien waiver to Becker on March 27, 1981, that it was paid in full. We disagree, because there was sufficient evidence for the trial court to find that Southern had not actually received payment.
A review of the facts in the light most favorable to the verdict reveals that, beginning in 1980, Southern provided materials to David Guthrel Development Company for improvements on several lots. The lot involved here was lot 4, Oak Post Lane in Chesterfield. Lumber and materials valued at $15,026.78 were sent to lot 4.
Guthrel had a construction loan for this lot from South Side National Bank. The bank required that funds be disbursed through an escrow agency, here James Becker, d/b/a Becker Escrow Services. Becker's procedures, according to his manager, are the same as those "used by every escrow disbursing company in the city."
Pursuant to the escrow agreement, Guthrel, after receiving materials from Southern, was to send Southern a signed voucher indicating the amount to be paid Southern. Southern then must send the voucher, along with a statement of account and an executed lien waiver, to Becker. Becker then was to process the voucher. If sufficient funds were available, Becker countersigned the voucher, making it negotiable. The voucher was then to be sent back to Southern to endorse and deposit like a check.
After the above procedure was followed, on January 14, 1981, Southern received $7,593.86. On March 27, 1981, Southern received a voucher from Guthrel for $7,432.92; the remaining balance due. Southern, on the same day, sent Guthrel's *271 voucher to Becker, along with a statement of account and a signed lien waiver, for $7,432.92.
After not receiving payment of the $7,432.92, Southern filed a mechanic's lien and petition to enforce the lien. On December 9, 1985, a circuit court found that Southern was not entitled to a mechanic's lien because of Southern's signed lien waiver dated March 27, 1981. On January 21, 1987, Southern filed its petition against Becker for breach of fiduciary duty.
Becker first alleges that the trial court erred in overruling his motion to dismiss because Southern's cause of action was barred by the five-year statute of limitations, § 516.120, RSMo 1986.
Becker argues that the applicable statute of limitations began to run on either March 28, 1981, (when he allegedly wrongfully delivered Southern's lien waiver to Guthrel) or on March 28, 1981, if not earlier (when he failed to pay Southern fully for the materials delivered). He claims that Southern's suit had to be brought by March 28, 1986, pursuant to the five-year statute of limitations, § 516.120, RSMo 1986. Thus, Southern's suit filed January 21, 1987, was untimely and consequently, barred.
Southern, on the other hand, contends that the statute of limitations did not begin to run until December 9, 1985. This is the date when Southern's signed lien waiver was used in circuit court to defeat its claim for a mechanic's lien. Thus, according to Southern, its suit was brought within five years, as § 516.120, RSMo 1986 requires.
Section 516.100 provides in pertinent part:
Civil actions, other than those for the recovery of real property, can only be commenced within the periods prescribed in the following sections, after the causes of action shall have accrued; provided, that for the purposes of sections 516.100 to 516.370, the cause of action shall not be deemed to accrue when the wrong is done or the technical breach of contract or duty occurs, but when the damage resulting therefrom is sustained and is capable of ascertainment,....
Thus, § 516.100 requires that the resulting damage be "capable of ascertainment" before the applicable statute of limitations, here § 516.120, begins to run. "Capable of ascertainment" refers to the fact of damage rather than the precise amount. Title Insurance Company of Minnesota v. Construction Escrow Service, Inc., 675 S.W.2d 881, 885 (Mo.App.E. D.1984). It has been consistently held that the time under the statute of limitations begins to run only after the right to bring and prosecute a suit to a successful conclusion has arisen. Id. at 887; Beckers-Behrens-Gist Lumber Company v. Adams, 311 S.W.2d 70, 74 (Mo.App.E.D.1958). It does not necessarily begin to run when the liability is created. Construction Escrow Service, Inc. at 887.
From the evidence, we conclude that Southern did not actually sustain damage which was "capable of ascertainment" until December 9, 1985, when its lien waiver was used to defeat its claim for a mechanic's lien. The liability arose when Becker breached his duty and wrongfully released the lien waiver without first countersigning the voucher so Southern could be paid. However, the cause of action against Becker did not accrue until December 9, 1985, when Southern's damage was actually sustained and able to be ascertained. The statute of limitations, then, did not begin to run until December 9, 1985.
We find further support for denying this point. It has long been the rule that the burden of establishing the defense of statue of limitations is upon the party who relies on it. Section 516.100, Note 23, V.A. M.S. Although the evidence indicates that Southern gave the lien waiver to Becker on March 27, 1981, Becker produced no evidence as to when he released the lien waiver. All that is known is that it was presented by South Side National Bank in a court proceeding on December 9, 1985. Thus, Becker's statute of limitations defense fails for lack of proof.
The trial court correctly held that Southern's suit was not barred since the suit was brought within the applicable time period. Point denied.
*272 Becker's next point is that the trial court erred in determining that he "owed a duty to [Southern] not to deliver [Southern's] mechanic's lien waiver without disbursing to [Southern] the full payment as specified in the lien waiver." He contends that an escrow agent cannot be charged with such a duty.
Becker misconstrues the ruling of the trial court. The duty, which Becker breached, was the release of the lien waiver from his control without fulfilling the corresponding duty to countersign the voucher. If Becker could not countersign the voucher due to a lack of sufficient construction funds, he had no duty to do so. In such a situation, however, he had a duty not to release the signed lien waiver.
An escrow agent is charged with the performance of an express trust governed by the escrow agreement with duties to perform for each of the parties, which neither can forbid without the other's consent. Nash v. Normandy State Bank, 201 S.W.2d 299, 301 (Mo.Div. 1 1947). When a person acts as the depository in escrow, the person is absolutely bound by the terms and conditions of the deposit and charged with a strict execution of the duties voluntarily assumed. Marvel Industries, Inc. v. Boatmens' Nat. Bank of St. Louis, 362 Mo. 8, 239 S.W.2d 346, 351 (Div. 1 1951).
Further, a fiduciary relationship is created by the escrow agreement. Eastern Atlantic Transportation and Mechanical Engineering, Inc. v. Dingman, 727 S.W.2d 418, 423 (Mo.App.W.D.1987). An escrow agent's failure to strictly follow the terms of the escrow agreement is a breach of his fiduciary duty. The breach of such duty constitutes a tort. Id.
Becker breached his fiduciary duty to Southern when he did not comply with a term of the escrow agreement; he released Southern's signed lien waiver before Southern was actually paid. Point denied.
Becker's final point is that the trial court erred in determining that he was indebted to Southern in the amount of $7,432.92 because Southern clearly acknowledged, by delivery of its lien waiver to him on March 27, 1981, that it was paid in full.
In determining the sufficiency of the evidence, we must consider the evidence most favorable to the plaintiff and give to that evidence the benefit of any favorable inferences which may be reasonably drawn therefrom, while at the same time, we disregard any contradictory evidence. Southgate Bank and Trust Co. v. May, 696 S.W.2d 515, 519 (Mo.App.W.D.1985).
Here, Southern's vice-president and treasurer testified that Southern was not paid the $7,432.92 due it. That officer also stated that he never received a countersigned voucher after he submitted the requisite lien waiver. Although Becker contends that Southern's lien waiver indicates Southern was paid, Becker's manager testified that he did not know if Southern was actually paid.
The judge in a bench-tried case can believe all, part, or none of the testimony of a witness, and on appeal we must give due regard to the opportunity of the trial court to have judged the credibility of the witnesses. Id.; Rule 73.01(c).
There was sufficient evidence for the trial judge to find that Southern had not been paid $7,432.92. Southern was entitled to recover damages it sustained as a result of Becker's unwarranted act. See Collier v. Smith, 308 S.W.2d 779, 784 (Mo.App.S.D. 1958). Point denied.
The judgment is affirmed.
GARY M. GAERTNER and KAROHL, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511840/ | 761 S.W.2d 384 (1988)
Carlotta ALLEN, Appellant,
v.
The STATE of Texas, Appellee.
No. B14-86-101-CR.
Court of Appeals of Texas, Houston (14th Dist.).
September 22, 1988.
*385 Bobbi L. Blackwell, Houston, for appellant.
John B. Holmes, Jr., Cathleen Herasimchuk, Houston, for appellee.
Before PAUL PRESSLER, MURPHY and ELLIS, JJ.
OPINION
ELLIS, Justice.
Appellant, Carlotta Allen, appeals her conviction for the offense of attempted murder. Tex.Penal Code Ann. § 15.01 (Vernon Supp.1988). The jury rejected appellant's not-guilty plea and assessed punishment at ten (10) years confinement in the Texas Department of Corrections. We affirm.
On April 30, 1987, this court reversed the conviction in accordance with article 32A.02 of the Texas Code of Criminal Procedure ("the Speedy Trial Act"). Allen v. State, 730 S.W.2d 831 (Tex.App.-Houston [14th Dist.] 1987). On June 29, 1988, the Court of Criminal Appeals remanded the case to this court for re-consideration of this issue in light of Meshell v. State, 739 S.W.2d 246 (Tex.Crim.App.1986), as well as consideration of appellant's other points of error. Allen v. State, 753 S.W.2d 404 (Tex.Crim. App.1988).
Appellant presents four points of error. In the first point, appellant maintains that the case should have been dismissed because the State violated the provisions of the Speedy Trial Act. In points of error two and three, appellant contends that article 37.07 of the Texas Code of Criminal Procedure violates the separation of powers doctrine and denies her due process. In points of error four and five, appellant argues that the testimony given by her ex-husband cannot be used to support the conviction.
Viewed in the light most favorable to the verdict, the facts show that on July 22, 1984, the complainant, a Houston Metro bus operator, was given a ride to work by her supervisor and appellant's then husband, Lenton Allen. As the two were driving down the highway, appellant came up behind them in another car containing several people. The complainant noticed a car tailing them and discovered that appellant was in the backseat of that car. Appellant and the complainant looked at each other for a brief moment, then appellant pointed a gun at the complainant. Several shots were fired, one bullet actually hit the complainant and pierced her lung.
In point of error one, appellant argues that the trial court committed reversible error in overruling her motion to dismiss under the Speedy Trial Act. In Meshell, the court held that the Speedy Trial Act was unconstitutional. Meshell, 739 S.W.2d at 258. An unconstitutional statute is void from its inception and cannot provide a basis for any right or relief. Jefferson v. State, 751 S.W.2d 502 (Tex.Crim. App.1988); Reyes v. State, 753 S.W.2d 382 (Tex.Crim.App.1988). But see, Rose v. State, 752 S.W.2d 529, 553 fn. 4 (Tex.Crim. App.1988); Stevenson v. State, 751 S.W.2d 508 (Tex.Crim.App.1988) (Miller, J. concurring and Duncan, J. dissenting). Appellant did not raise State or Federal constitutional speedy trial claims. Thus, appellant's contention, based only upon the Speedy Trial Act, is now moot. Point of error one is overruled.
In points of error two and three, appellant contends that article 37.07, section 4, of the Texas Code of Criminal Procedure violates the separation of powers doctrine and due process of law under the State and Federal Constitutions. The court in Rose v. State, 752 S.W.2d 529 (Tex.Crim. App.1988), recently held that Article 37.07, section 4(a), was unconstitutional under the Texas Constitution for these reasons. On rehearing, the court in Rose changed the *386 standard of review from a two-tier, objected-to and unobjected-to harm analysis to an across the board "statutory" analysis under Rule 81(b)(2) of the Texas Rules of Appellate Procedure. Pursuant to Rule 81(b)(2), if the record reveals error, the judgment shall be reversed unless such error was harmless beyond a reasonable doubt.
Appellant was convicted of and sentenced for attempted murder. After reading the statutory parole instruction, the trial judge also read to the jury the following instruction:
You are not to discuss among yourselves how long the Defendant would be required to serve the sentence that you impose. Such matters come within the exclusive jurisdiction of the Board of Pardons and Paroles and the Governor of the State of Texas.
In the absence of proof to the contrary, it is presumed that a jury follows the instructions given by the judge. Gardner v. State, 730 S.W.2d 675 (Tex.Crim.App.), cert. denied, ___ U.S.___, 108 S.Ct. 248, 98 L.Ed.2d 206 (1987); Cobarrubio v. State, 675 S.W.2d 749 (Tex.Crim.App. 1983). Appellant does not demonstrate that the jury failed to follow this instruction. The fact that appellant's sentence was actually lower than the punishment requested by the State during jury argument indicates that the jury obeyed the trial court's admonition that such matter is not within their province.
The facts of this case militate in favor of the assessed punishment. The evidence shows that appellant previously confronted the complainant and had made threatening phone calls. On the day of the shooting, appellant followed her then husband and the complainant as they were riding in his car. When appellant caught up with the husband's car, she shot at the complainant and shattered out the glass in the front passenger window where the complainant was sitting. Appellant's next bullet entered the complainant's back, pierced her lung, and exited through her chest. The complainant and the ex-husband stated when they saw appellant in the car which was tailing them, appellant's expression was angry and wild looking. The complainant testified that she thought she was going to die. The State did not mention the statutory parole instruction nor encourage consideration of the parole law in assessing the punishment. The foregoing demonstrates that the erroneous instruction did not affect appellant's sentence. The error in submitting the instruction was harmless beyond a reasonable doubt, and it made no contribution to the punishment assessed. Tex.R.App.P. 81(b)(2). Appellant's remaining claim that the parole instruction is infirm under the Federal Constitution is also without merit. The United States Supreme Court has previously held that informing the jury about the defendant's chances for parole or clemency "did not render [such instruction] constitutionally infirm." See California v. Ramos, 463 U.S. 992, 1013, 103 S.Ct. 3446, 3460, 77 L.Ed.2d 1171 (1983). Points of error two and three are overruled.
In point of error four, appellant complains that the trial court erred in allowing her ex-husband to testify against her over her objection. Because appellant's trial commenced on January 27, 1986, former article 38.11 of the Texas Code of Criminal Procedure applies. Willard v. State, 719 S.W.2d 595, 600 (Tex.Crim.App.1986). Former article 38.11 provides in part:
Neither husband nor wife shall, in any case, testify as to communications made by or to the other while married. Neither husband nor wife shall, in any case, after the marriage relation ceases, be made witnesses as to any communication made while the marriage relation existed except in a case where one or the other is on trial for an offense and a declaration or communication made by the wife to husband or by the husband to the wife goes to extenuate or justify the offense. The husband and wife may, in all criminal actions, be witnesses for each other, but except as hereinafter provided, they shall in no case testify against each other in a criminal prosecution.
Former article 38.11, contains an absolute disqualification of one spouse as a witness against the other in a criminal *387 case. It also creates a privilege which can be waived by the party entitled to the same. Thus, as to the absolute disqualification under article 38.11, it is reversible error for the State to call the accused's spouse as a witness and force the accused to object in the presence of the jury. Stewart v. State, 587 S.W.2d 148 (Tex.Crim.App.1979); Johnigan v. State, 482 S.W.2d 209 (Tex.Crim. App.1972). The absolute prohibition against adverse spousal testimony, given while the parties are married, could not be waived by failure to object. Johnigan, 482 S.W.2d at 210.
Once the marital relationship is terminated by divorce, the absolute disqualification of a spouse is no longer applicable. He or she then becomes a competent witness against the other except that there remains a privilege available to the accused as to communications made while the marriage relationship existed. Bear v. State, 612 S.W.2d 931 (Tex.Crim.App.1981); Bruni v. State, 669 S.W.2d 829 (Tex.Crim.App. Austin 1984, no pet.). Therefore, a divorced husband may testify to any matters which are not confidential communications and the mere fact that he was the husband of the accused when the matter sought to be elicited occurred would not prima facie make such matters privileged. Curd v. State, 217 S.W. 1043 (Tex.Crim.App.1920); Bruni, 669 S.W.2d at 834.
In this instance, appellant and her ex-husband were divorced at the time of trial. Thus, the ex-husband was fully competent to testify as to the events surrounding the alleged offense. Robinson v. State, 487 S.W.2d 757 (Tex.Crim.App.1972); Bear v. State, 612 S.W.2d at 932.
Appellant also contends that her ex-husband's testimony regarding a letter she had written violated article 38.11. Appellant held the privilege to exclude the letter's admission into evidence as a confidential communication but chose not to exercise it. Appellant did not object to the letter's admission. In fact, appellant specifically agreed to the admission of the letter and the reading of its contents to the jury. Having waived the privilege, appellant cannot now complain. Johnson v. State, 95 Tex.Cr.R. 483, 255 S.W. 416, 417 (1923); Bruni, 669 S.W.2d at 835. Point of error four is overruled.
In point of error five, appellant complains about the admission of her ex-husband's testimony regarding her previous use and possession of a .38 pistol. The record reveals that this same evidence was elicited by the appellant during cross-examination of the ex-husband as well as the complainant. Further, this same evidence was repeated without objection during the State's re-direct examination of these witnesses. When the accused offers the same testimony as that objected to, or the same evidence is introduced from another source, without objection, the accused is not in a position to complain on appeal. Maynard v. State, 685 S.W.2d 60, 65 (Tex.Crim.App. 1985); Womble v. State, 618 S.W.2d 59, 62 (Tex.Crim.App.1981).
Appellant next argues that this testimony was highly prejudicial and served no purpose except to show that appellant was a criminal in general. On cross-examination, appellant raised the defensive theory that she was not the trigger person. Having raised the issue of identity it was proper for the State to show that appellant carried and exhibited a .38 pistol and that such a pistol was found to have been used in the shooting. Siqueiros v. State, 685 S.W.2d 68, 71 (Tex.Crim.App.1985); Williams v. State, 662 S.W.2d 344, 345-346 (Tex.Crim.App.1983); Jones v. State, 587 S.W.2d 115, 119 (Tex.Crim.App.1978); Tex. R.Crim.Evid. 404(b). Point of error five is overruled.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511843/ | 761 S.W.2d 103 (1988)
Linda JONES, Appellant,
v.
DALLAS COUNTY CHILD WELFARE UNIT, Appellee.
No. 05-86-01159-CV.
Court of Appeals of Texas, Dallas.
November 4, 1988.
Rehearing Denied December 15, 1988.
*104 Maxine T. McConnell, Stefan H. Krieger, Valli Joe Rowley, Joe F. Kolb and Layne Jackson, John M. Frick, Dallas, for appellant.
Timothy B. Counch, Terese M. Easter, Guardian Ad Litem, Dallas, for appellee.
Before WHITHAM, BAKER and KINKEADE, JJ.
KINKEADE, Justice.
Linda Jones appeals from the trial court's judgment terminating her parental rights to her sons, W___and J___P___Jones. Although the judgment terminated the parental rights of both Mrs. Jones and her husband, Bruce Jones, Mr. Jones failed to perfect his appeal. Therefore, Mr. Jones is not a party to this appeal. In four points of error, Mrs. Jones asserts that the evidence was insufficient to support the verdict, that the trial court erred in refusing to submit a question to the jury on the efforts made by the Department of Human Services (DHS) to return the children to their parents, and that there was insufficient evidence that the DHS made reasonable efforts to make it possible for the children to return home. We disagree and, accordingly, affirm the trial court's judgment.
Involuntary termination of parental rights is governed by section 15.02 of the Texas Family Code. Section 15.02 provides in pertinent part:
A petition requesting termination of the parent-child relationship with respect to a parent who is not the petitioner may be granted if the court finds that: (1) the parent has:
* * * * * *
(D) knowingly placed or knowingly allowed the child to remain in conditions *105 or surroundings which endanger the physical or emotional well-being of the child; or
(E) engaged in conduct or knowingly placed the child with persons who engaged in conduct which endangers the physical or emotional well-being of the child;
* * * * * *
and in addition, the court further finds that
(2) termination is in the best interest of the child.
TEX.FAM. CODE ANN. § 15.02 (Vernon 1986). In order to terminate parental rights under section 15.02, there must be both a finding that the parent has committed one of the enumerated acts under section 15.02(1), and a finding that termination is in the best interest of the child. Richardson v. Green, 677 S.W.2d 497, 499 (Tex. 1984). Termination of the parent-child relationship involves fundamental constitutional rights. Wetzel v. Wetzel, 715 S.W.2d 387, 388 (Tex.App.Dallas 1986, no writ). Therefore, the judgment must be based upon clear and convincing evidence. Richardson, 677 S.W.2d at 500. Clear and convincing evidence has been defined as "that measure or degree of proof which will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established." In re S.H.A., 728 S.W.2d 73, 85 (Tex.App. Dallas 1987, no writ).
In reviewing the evidence, the appellate court must determine whether the trier of fact could reasonably conclude that the existence of the fact is highly probable. Wetzel v. Wetzel, 715 S.W.2d 387, 388 (Tex. App.Dallas 1986, no writ). Mrs. Jones's points of error challenge the factual sufficiency of the evidence; therefore, we must consider all of the evidence to ascertain whether the clear and convincing standard has been met. See In re S.H.A., 728 S.W. 2d at 86.
The record reflects that, in November of 1984, when the DHS first became involved in the case, Mr. and Mrs. Jones and their two children, W___and J___P___, were living in Grand Prairie, Texas. Mrs. Jones and the children lived in a rent house while Mr. Jones usually stayed in a travel trailer which was kept in the yard. The Dallas County Child Welfare Unit of the DHS first contacted the Jones family in November of 1984. The school which W___and J___P___, attended made a referral call to the DHS, expressing concern for the boys' nutrition, hygiene, and medical needs. J___P___had been soiling himself two to three times a day. The school reported that it had received little cooperation from Mrs. Jones on these matters. On November 28, 1984, DHS intake case worker Cari Williams talked to W___and J___P___ at school. Williams and Ruth Woods, the school nurse, visited the Jones's house and discovered malodorous living conditions, including piles of garbage, dirty clothes, dirty dishes, and broken toys strewn everywhere. Several neighbors and social workers testified that the house was filthy, smelling of mold and urine. Leaves were several inches thick on the floor. Old newspapers, boxes and clothes were strewn around. Throughout the house, empty food containers, rusty cans and garbage were piled everywhere. At the time of William's visit, there was no edible food in the refrigerator; she found only molded containers which exuded a bad stench. Several windows were broken and, because it was wintertime, the house was freezing. The yard was cluttered with rusted tools and debris.
Woods testified, "I've done public health for thirty years, and I don't believe I have ever been in a more filthy home." Williams, who had visited over three hundred homes, testified that she had never come across a home that was so devastating, professionally and personally. Williams spoke to Mrs. Jones about the condition of the house and J___ P___'s need for medical attention regarding his soiling problem. Mrs. Jones, however, failed to follow any of Williams' suggestions for immediate improvement.
DHS ongoing case worker Greta Morgan made a home visit on January 22, 1985. Morgan found the house in the same deplorable condition as it had been the previous *106 November. She testified that the septic system was not working and the toilet was filled with feces. Ms. Morgan made seven unsuccessful attempts to contact Mrs. Jones, by phone and in person, in January. The situation did not improve and, on March 28, 1985, the DHS filed a suit seeking to be appointed temporary managing conservator of W___and J___ P___.
During the trial, witnesses testified that the children were often dressed inadequately for the weather. They also stated that the children wore dirty clothes, that they had a very bad body odor, and that their hair was matted with dirt. In addition to the physical problems, witnesses said that the children also exhibited severe behavioral problems. W___, a nine-year old whose intelligence level was above average, refused to do his school work. He often fought with other children and was withdrawn, depressed, and angry. W___had expressed that at times he wanted to kill himself.
J___ P___, who was seven years old, behaved like a much younger child. His first-grade teacher testified that, because of his low self-esteem, he refused to even attempt school work. J___ P___ was much less verbal than other children his age. In class, he would become so angry and frustrated that he would throw things to the floor and cry a great deal. J___ P___soiled his pants two to three times a day, which required that the school nurse or secretary take him, clean him up, and give him fresh clothes supplied by the school. A physician who had examined J___ P___testified that the soiling had no physical cause, but was probably due to emotional problems.
Mrs. Jones testified that she loved her children, but felt overwhelmed by the responsibilities of working, keeping house, and caring for her family. She stated that her husband neither worked nor helped her with the house or the children. In Mrs. Jones's own words, she failed to keep her house clean herself because she is "lazy." She claimed not to have sufficient financial resources to provide her children with proper food, clothing or medical care, while at the same time she included in her list of fixed expenses money for dog food and rabbit food. When asked if she had sought medical help for J___P___'s severe soiling problem, she replied in the negative and stated that it was not a priority of hers. Mrs. Jones admitted that she often became hysterical in front of her children, screaming and flapping her arms, and threatening to beat them to a pulp, or to kill them and herself.
In her efforts to retain the children, Mrs. Jones offered evidence that she worked full time delivering auto parts while she lived in Grand Prairie. Although she did not have a car, she voluntarily enrolled J___P___ in a Headstart program and biked him to his class eight miles a day. When W___ made failing marks in the fourth grade, she insisted he repeat the grade, although the teachers would have allowed him to pass on to the fifth grade.
Although Mr. Jones is not a party to this appeal, he is still married to, and living with, Mrs. Jones. If the children are returned to Mrs. Jones, Mr. Jones will have a continuing influence and effect on W___ and J___P___. Therefore, we must consider Mr. Jones's conduct.
Mr. Jones had previously served several tours of duty in the Army where he was trained as a mechanic. Despite his training, Mr. Jones was unemployed for about two years while living in Grand Prairie. Although Mr. Jones was home during the day, DHS caseworkers often found the children alone in the house. Mr. Jones would either not come out from his trailer when caseworkers visited the house or would simply walk away when questioned. Several witnesses testified that Mr. Jones did not interact with his children, but remained aloof. Mr. Jones's disciplinary methods were described by neighbors as brutal. Neighbors testified that they had observed one incident when Mr. Jones beat W___ with a belt. On another occasion, the school nurse discovered a large bruise on W___'s shoulder which W___ said was the result of punishment by his father.
*107 Mr. Jones exhibited certain bizarre personality traits demonstrated by the letters he wrote to the DHS and to his sons. Several letters were written in what Mr. Jones claims is an American Indian language; others were written in Morse Code. In one letter to a DHS case worker, Mr. Jones responded to her report on the conditions of the Jones house and the family's situation as follows:
So it was douring [sic] that time that we had no food, few cloths [sic], and bearly [sic] shelter. Since we had to eat we started hunting small rodents, birds, frogs, and what ever else we could eat. It was then I rembered [sic] that rodents thrived under the right conditions so I decided to create these conditions. Now after 2 years we aquired [sic] quite a taste for rodent and various birds. So even though we do not have to eat them any more we eat them becuse [sic] we like them. Now your repert [sic] stated there was no food in the house. Well there was plenty of food in the house you were just too unobservent [sic] to see it.
Expert testimony reveals that Mr. Jones's personality would not create a loving, nurturing environment for his children. As demonstrated by the testimony of his psychologist, Dr. Carl Newman, Mr. Jones perceived the world as "a threatening place and other people as being pretty hostile and punitive toward him." He was withdrawn, depressed and pessimistic. Because of his tendency to remain detached and separated, Mr. Jones's ability to attend to the needs of his children was impaired. As Dr. Newman testified, Mr. Jones viewed the random behavior of the children as hostile and reacted to the children in a punitive manner. At a court hearing, Mr. Jones stated that he did not want custody of his children, and that they would be safer if the DHS took them.
The testimony of the psychologists who tested the family shows a causal connection between the home environment and the abnormalities exhibited by the children. Dr. Jan Segal tested W___ and subsequently engaged him in therapy. Dr. Segal stated that W___ had displayed aggressive behavior, was sad and depressed, and had low self-esteem. For a time, W___ received medication to control his depression. Karen Fulbright, who worked with W___and J___P___in sibling therapy, observed that W___ acted in the role of parent towards J___P___, taking care of J___P___'s needs before his own. Fulbright stated that such behavior is typical of neglected children. W___'s foster mother, Betty Jane Collins, testified that W___had improved greatly in her home. She stated that W___was more relaxed, happier, and was getting along with the other children. He was finally able to discontinue his anti-depression medication. However, Fulbright testified that W___ needs a consistent, nurturing family life in order to maintain his progress.
Fulbright was the primary psychologist who worked with J___P___. Fulbright testified that J___P___was emotionally and intellectually delayed. He has a basic lack of trust in others, which is probably related to an impairment in his early attachment and relationship with his parents. While J___P___has the capacity to function normally, he needs a stable, structured, nurturing environment in order to develop optimally. J___ P___'s present foster mother, Virginia Lawson, testified that, since he has been in her home, J___ P___has become loving and affectionate. He talks constantly and gets along with the other children in the home. The soiling problems have almost disappeared and the behavior of J___P___has become more appropriate for a child his age.
Although Linda Jones said that she wanted her children, she was unwilling or unable to properly care for W___ and J___P___while they were in her custody. Psychological tests show that she suffers from a severe paranoid schizophrenic personality disorder, which one psychologist, Nancy Hoke, determined may be untreatable. Hoke, who examined Mrs. Jones, testified that this personality disorder caused Mrs. Jones to be "extremely socially withdrawn and isolated. Personal relationships are often tinged with resentment, hostility, suspiciousness. Her behavior may be unpredictable." Mrs. Jones has *108 a difficult time attending to the needs or concerns of others because she is intensely self-focused. She blamed her problems on the outside world and took no responsibility for them herself. Hoke testified that a personality like Mrs. Jones's would exhibit poor parenting skills which would be very difficult to improve. Considering W___'s and J___P___'s needs for a stable, nurturing environment, Hoke stated that Mrs. Jones would not be able to provide for them on a consistent basis.
During June and July of 1985, Morgan, the DHS ongoing caseworker, visited the Jones home several times. Morgan consistently found the children and the house in the same filthy condition. Morgan encouraged Mrs. Jones to apply for HUD housing, to seek protective day care for the children, and to attend psychological therapy. Mrs. Jones stated that she was not interested in HUD housing because she could not take her dogs. Mrs. Jones took advantage of the daycare, but the children had to discontinue their attendance because J___ P___'s soiling was disrupting the facility. In July of 1985, conditions at the Jones home worsened in that Mr. Jones was threatening to leave, and, in front of the children, Mrs. Jones was threatening to kill herself. At a hearing on July 25, 1985, Mrs. Jones had an hysterical outburst in court when Mr. Jones passed out and fell to the floor. Anne Packer, the Master at the hearing, testified that Mr. Jones had closed his eyes, and was moving his eyes back and forth under his eyelids, as if he was trying to put himself in a trance. At that time, the court ordered that the DHS take emergency possession of W___ and J___ P___. From then to the time of trial, the boys remained in separate foster homes.
In September of 1985, Mr. and Mrs. Jones moved to Garrison, Texas, near Nacogdoches, while the children remained in Dallas. They lived in their travel trailer on some property near Mrs. Jones's family. Mrs. Jones testified that she began psychological therapy in Nacogdoches, got on a waiting list for HUD housing, and began searching for parenting and homemaking classes. Carolyn Rawlings, a case worker for the Nacogdoches DHS, stated that the Jones's trailer was clean on each of her several unannounced visits to the trailer.
While living in Grand Prairie, Mrs. Jones refused to cooperate with the DHS in improving her living situation or seeking psychological help. After the children were removed and Mr. and Mrs. Jones moved to Garrison, Mrs. Jones began attending therapy sessions. Her therapist, Sherry Hawthorne, testified that Mrs. Jones was making progress and could, with continued help, be a good parent. Despite this testimony, the evidence also shows that Linda Jones attended the therapy sessions sporadically. In July of 1986, a jury trial was held. A unanimous jury terminated Mr. and Mrs. Jones's parental rights to their sons.
In her first point of error, Mrs. Jones asserts that there was insufficient evidence that she exposed her children to dangerous conditions. A unanimous jury verdict found that Mrs. Jones had placed or allowed the children to remain in conditions which would endanger them physically or emotionally. The evidence in this case supports the jury's finding. Mrs. Jones stated that she loved her children, but her actions often failed to show that concern in that she refused to correct dangerous conditions affecting the children. She chose to continue the unsanitary conditions in the house and ignore the children's lack of proper hygiene. She failed to provide adequate clothing or heat during the winter, and left J___P___'s medical problems untreated. The record reflects that these conditions did endanger the physical and emotional well-being of W___and J___P___. We hold that the evidence is sufficient to support the jury's findings. Mrs. Jones' first point of error is overruled.
In her second point of error, Mrs. Jones claims that there was insufficient evidence that she engaged in conduct or knowingly placed her children with persons who engaged in conduct which endangered the physical or emotional well-being of her children. "Endanger" as used in the statute means "to expose to loss or injury; to jeopardize." Texas Department of Human *109 Services v. Boyd, 727 S.W.2d 531, 533 (Tex.1987). The conduct creating the endangerment, however, need not be directed at the individual child. See Ziegler v. Tarrant County Child Welfare Unit, 680 S.W.2d 674, 678 (Tex.App.Fort Worth 1984, writ ref'd n.r.e.). That conduct does not necessarily have to occur in the child's presence in order to endanger the child. Clark v. Clark, 705 S.W.2d 218, 219 (Tex. App.Dallas 1985, writ dism'd).
The evidence shows that Mrs. Jones often became hysterical; this conduct occurred in the courtroom, at her therapist's office, and in front of the children on several occasions. While the children were present, she threatened to kill herself and the children. Mrs. Jones's omissions regarding her failure to keep the house and the children clean are also evidence of conduct which endangers. She stated to a DHS worker that taking her children to the doctor when needed was not one of her priorities. Furthermore, Mrs. Jones allowed the children to remain alone in the house while she and Mr. Jones stayed in the trailer. Leaving two children under the age of nine alone overnight endangers their well-being.
Mr. Jones's erratic and dangerous conduct could also jeopardize the children. The evidence shows that he was brutal in his discipline and left bruises on W___'s body. By his own admission, the children were not safe with Mr. Jones. Aside from physical abuse, expert testimony shows that Mr. Jones's detachment from his children caused emotional problems for W___ and J___ P___. Any interaction Mr. Jones may have had with his children was likely to be inappropriate, as evidenced by the bizarre content of his letters to them and to the DHS. Mrs. Jones knew of Mr. Jones's undesirable conduct with the children and yet allowed them to remain alone with Mr. Jones. We hold that the evidence is sufficient to support the jury's verdict. Mrs. Jones's second point of error is overruled.
In her third point of error, Mrs. Jones argues that the trial court should have submitted a question to the jury regarding the reasonableness of the DHS's efforts to make it possible for the Jones children to return home. In point of error four, she questions the sufficiency of the evidence that DHS made reasonable efforts to make it possible for the children to return home.
Section 15.02 of the Texas Family Code sets out the requirements for involuntary termination of parental rights. Section 15.02 does not require any efforts toward reunification of the family. The statute requires only proof of one of the statutory acts and proof that termination is in the best interests of the child. TEX.FAM. CODE ANN. § 15.02 (Vernon 1986). The plaintiff in an involuntary termination case is not required to make any attempt to help the parents or to ensure that the children can return home. Allred v. Harris County Child Welfare Unit, 615 S.W.2d 803, 807 (Tex.App.Houston [1st Dist.] 1980, writ ref'd n.r.e.); Moreland v. State, 531 S.W.2d 229, 235 (Tex.Civ.App.Houston [1st Dist.] 1975, no writ).
It is unclear whether the Dallas County Child Welfare Unit has a policy of providing services to a family to try to facilitate the return of the children. Even if this policy exists, however, it does not modify the requirements of the Texas Family Code nor create a condition precedent to the involuntary termination of parental rights. For these reasons, the trial court was correct in refusing to submit the requested jury question.
The DHS did provide the Jones family with a written service plan of improvement for the Jones family in September of 1985. This plan outlined the goals which Mr. and Mrs. Jones were to accomplish in order to secure the return of their children. Mrs. Jones, however, could not have acquired any substantive rights as a result of the proffered service plan because she and Mr. Jones refused to sign it. Once Mr. and Mrs. Jones rejected the offer of service, they could no longer complain that those services were never rendered.
*110 The evidence shows that Mr. and Mrs. Jones refused most of the services that were offered to them by the Dallas DHS, such as psychological therapy and parenting classes. Mrs. Jones began attempting to comply with the service plan requirements only after her children were taken away and she moved to Nacogdoches. Furthermore, the evidence which was presented at trial regarding the services offered, and how Mrs. Jones responded to those offers of services, were before the jury under the issue submitted as to the best interests of the children. Points three and four are overruled and the trial court's judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1644641/ | 4 So.3d 587 (2007)
JERRY CALDWELL
v.
STATE.
No. CR-05-1803.
Court of Criminal Appeals of Alabama.
January 12, 2007.
Decision of the alabama court of criminal appeals without opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/481635/ | 809 F.2d 125
Francisco CHEVERAS PACHECO, et al., Plaintiffs, Appellees,v.Juan M. RIVERA GONZALEZ, et al., Defendants, Appellants.
No. 86-1428.
United States Court of Appeals,First Circuit.
Submitted Oct. 10, 1986.Decided Jan. 13, 1987.
Pedro Juan Perez Nieves, Hector Rivera-Cruz, Secretary of Justice, Com. of Puerto Rico, Rafael Ortiz-Carrion, Sol. Gen., Com. of Puerto Rico, San Juan, P.R., and Saldana, Rey, Moran & Alvarado, (Santurce, P.R., on brief, for defendants, appellants.
Before COFFIN, BOWNES and BREYER, Circuit Judges.
COFFIN, Circuit Judge.
1
Plaintiff, contending he had been discharged from government employment, brought the present section 1983 action seeking damages and reinstatement. Essentially, he claims 1) that the discharge was done without prior notice or hearing in violation of his right to procedural due process and 2) that he was discharged because of his affiliation with the political party defeated in Puerto Rico's 1984 elections in violation of his first amendment rights. Defendants moved for summary judgment on the damages claim on the theory that they had not violated clearly established law and that hence they were entitled to qualified immunity. Defendants' motion was denied without opinion, and they have now appealed. See Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985) (allowing immediate appeal from an order denying qualified immunity claims). Defendants claim they did not discharge plaintiff at all. Rather, they say, plaintiff was a "transitory" employee, that is, one appointed for a fixed term, and they simply refused to give plaintiff a new appointment once his fixed term had expired.
2
1. Procedural due process. With respect to plaintiff's procedural due process claim, defendants' position is that it was not clearly established law at the time of plaintiff's job termination that an employee with a contractually fixed term of employment had a property interest in employment beyond the specified term and hence had a constitutional right to notice or a hearing. In general, defendants are correct. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972) (professor with one year term of appointment has no property interest in renewal of his appointment and no right to notice or hearing concerning the reasons for nonrenewal). Property interests may be created, however, not only by explicit contractual provisions but also by an implied contract or officially sanctioned rules of the work place. Perry v. Sindermann, 408 U.S. 593, 601-02, 92 S.Ct. 2694, 2699-2700, 33 L.Ed.2d 570 (1972).
3
Plaintiff alleges in his complaint and affidavit that, although he was classified as a transitory government employee, he always understood his position to be permanent in nature. He had been employed in a transitory capacity for nearly six years before his discharge without notice or hearing. What plaintiff does not allege, however, is a basis for his "understanding" that his position was, in effect, permanent and thus not governed by Puerto Rico law providing that a transitory employee "may be removed from service at anytime during the term of his appointment." 3 L.P.R.A. Sec. 1336(9) (Supp.1985). See Perry v. Sindermann, 408 U.S. at 602 n. 7, 92 S.Ct. at 2700 n. 7, ("If it is the law of Texas that a teacher in the respondent's position has no contractual or other claim to job tenure, the respondent's claim would be defeated.") He does not describe any promises or representations made that might give rise to a property interest in employment beyond the expiration date of his appointment. Thus, plaintiff has so far alleged only "a mere subjective 'expectancy' " that his job would continue indefinitely. See Perry v. Sindermann, 408 U.S. at 603, 92 S.Ct. at 2700. Without more, he has no property interest in his employment.
4
Defendants view plaintiff's failure to plead the basis of his claim to a permanent position as proof that there is no genuine issue of material fact that his employment was for anything other than a fixed term. Thus, defendants argue, they are entitled to summary judgment. This argument, focusing on whether facts are disputed, is not a proper subject of our review as part of an interlocutory appeal on the issue of qualified immunity. Bonitz v. Fair, 804 F.2d 164, 166-67, 175-76 (1st Cir.1986). We specifically indicated in Bonitz that we do not " 'consider the correctness of the plaintiff's facts, nor even determine whether the plaintiff's allegations actually state a claim,' " but limit our inquiry to " 'whether the legal norms allegedly violated by the defendant were clearly established at the time of the challenged actions.' " Id. at 166 (quoting Mitchell v. Forsyth, 105 S.Ct. at 2816 & n. 9). It therefore is beyond our jurisdiction to consider the state of the factual record in order to determine whether defendants are entitled to summary judgment on the merits.
5
The qualified immunity question in this case is whether it was clearly established in 1985 that a transitory employee with only a subjective expectation of permanent employment was entitled to the protections of due process. Under Perry v. Sindermann, such an employee has no procedural due process rights, and thus it was not clearly established in 1985 that plaintiff was entitled to the protections of due process. Therefore, on the basis of the allegations before us, defendants are entitled to qualified immunity.
6
2. First amendment claim. Defendants' first amendment argument is not that they are entitled to qualified immunity because political affiliation was an "appropriate" requirement for plaintiff's particular position, thus justifying their failure to reappoint him. See Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980); Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976). Indeed, there is no indication of the nature of plaintiff's job duties. Rather, defendants' argument is that, in contrast to the career or permanent positions at issue in Elrod and Branti, it was not clearly established at the time of plaintiff's termination that a "transitory" employee whose term had expired was protected from a politically based non-renewal.
7
We disagree. Despite defendants' attempts to distinguish the termination of plaintiff's job from the "discharges" covered by Elrod and Branti, we find ample evidence in Supreme Court cases that there is no practical difference between these two categories for first amendment purposes. In Perry v. Sindermann, 408 U.S. at 593, 92 S.Ct. at 2695, the Court held that the nonrenewal of a college professor's contract would violate the first amendment if it were based on his protected free speech--even if the professor lacked a property interest in continued employment.
8
For at least a quarter-century, this Court has made clear that even though a person has no " 'right' " to a valuable governmental benefit and even though the government may deny him the benefit for any number of reasons, there are some reasons upon which the government may not rely.
9
Id. at 597, 92 S.Ct. at 2697. Moreover, in Elrod, the Court considered whether "conditioning the retention of public employment on the employee's support of the in-party" would survive constitutional challenge. 427 U.S. at 363, 96 S.Ct. at 2685 (emphasis added). And in Branti, the Court observed that, "[a]fter Elrod, it is clear that the lack of a reasonable expectation of continued employment is not sufficient to justify a dismissal based solely on an employee's private political beliefs." 445 U.S. at 512 n. 6, 100 S.Ct. at 1291.
10
We think these cases make it clear that Elrod and Branti apply generally to an employee's right to retain his public employment, and they do not distinguish between employees discharged from a permanent position and those who fail to receive a new appointment. Accord McBee v. Jim Hogg County, Tex., 730 F.2d 1009, 1015 (5th Cir.1984) (en banc). This distinction is particularly invalid in the case of an employee like the plaintiff here who has long been employed in a supposedly transitory position.1 Any other result would seriously undermine Elrod and Branti because local governments could pass laws providing that the jobs of nonpolicymaking employees extend only from election to election, and that the new officeholder is entitled to make all new appointments. See, e.g., McBee, 730 F.2d at 1009 n. 2. (Texas law provides that "deputy sheriffs are the creatures of the sheriff, serving at his pleasure and departing with him at the end of his term."); Tanner v. McCall, 625 F.2d 1183 (5th Cir.1980) (Florida law provides that appointment as deputy sheriff ends when power of appointing sheriff ends); Mele v. Fahy, 579 F.Supp. 1576 (D.N.J.1984) (statute provides that municipal department heads "shall serve during the term of office of the mayor appointing him"); Bavoso v. Harding, 507 F.Supp. 313 (S.D.N.Y.1980) (city counsel reappointed every year by city council). We think it was made clear in Elrod and Branti that technical niceties are not to be relied upon to avoid application of the principles stated in those cases. See Branti, 445 U.S. at 512 n. 6, 100 S.Ct. at 1291 n. 6; Elrod, 427 U.S. at 359-60 n. 13, 96 S.Ct. at 2683 n. 13.2
11
A case relied upon by defendants, Messer v. Curci, 610 F.Supp. 179 (E.D.Ky.1985), is not to the contrary. In that case, plaintiffs were two seasonal maintenance workers who had been employed for eight years and three years, respectively, from the period of mid-March through mid-November. They alleged that they were not rehired in March 1984 because they had failed to work in the 1983 election campaign of Governor Martha Layne Collins. Messer is distinguishable, however, because the relevant Kentucky statute limited plaintiffs' employment to eleven months in duration, causing plaintiffs to file new applications for employment each year. As a result, the court concluded that the case should be treated as a failure to hire. Those circumstances are significantly different from this case, where plaintiff remained an employee until the allegedly unconstitutional act dismissing him. See Elrod, 427 U.S. at 374, 96 S.Ct. at 2690 (Stewart, J., concurring) ("This case does not require us to consider the ... constitutional validity of a system that confines the hiring of some governmental employees to those of a particular political party....") (emphasis added).
12
In rejecting defendants' claim of qualified immunity on the first amendment issue, we again emphasize that defendants may well be entitled to summary judgment on other grounds. Even though plaintiff was on sick leave when defendants took office, defendants extended his appointment from January 31, 1985, to March 31, 1985, and during that period conducted an evaluation of the need for the approximately 700 transitory positions in the Department of Labor and Human Resources. It was only after this evaluation that plaintiff's position was terminated. Thus, it is possible that plaintiff will be unable to meet his burden of showing that the dismissal would not have occurred but for his political affiliation. See Jimenez Fuentes v. Gaztambide, 807 F.2d 236 (1st Cir.1986). In addition, we have no evidence before us concerning the nature of plaintiff's job, and thus do not consider whether that position is one for which political affiliation is an appropriate requirement. Id.
13
Our holding on the first amendment issue, therefore, is a narrow one. We conclude only that defendants are not entitled to summary judgment on the basis of qualified immunity because it was clearly established at the time of plaintiff's termination that even a "transitory" employee like plaintiff who had been employed for nearly six years enjoyed the protections described in Elrod and Branti.
14
For the foregoing reasons, the judgment of the district court is affirmed so far as it denied summary judgment on the ground of qualified immunity on the first amendment claim. The judgment of the district court on the due process claim is reversed, and the case is remanded with instructions to enter summary judgment on that issue for defendants on the basis of qualified immunity.
1
We find no significance in the line defendants attempt to draw between a transitory employee appointed to a pre-existing or permanent position and an employee who was appointed to a position that was specifically created for a fixed period. It may be that such a distinction would make a difference when the "fixed period" had not continuously been extended, and the employee had been appointed only once for a brief period of time in a position whose duties naturally terminated at the end of that period
2
In Garretto v. Cooperman, 510 F.Supp. 816, 818 n. 1 (S.D.N.Y.1981), aff'd, 794 F.2d 676 (2d Cir.1984) the court described as an open question whether Elrod and Branti "apply to a case of failure to reappoint." In support of this observation, it cited footnote six in Branti, which we cited in part above, and Bavoso v. Harding, 507 F.Supp. 313 (S.D.N.Y.1980), which applied Elrod-Branti principles to a failure to reappoint case. Presumably, the court construed the Branti footnote to indicate that failure to reappoint does not fall within the case's holding. We read that language differently and, for the reasons described above, disagree with the Garretto court's conclusion | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1511889/ | 398 A.2d 280 (1979)
PIKE INDUSTRIES, INC.
v.
MIDDLEBURY ASSOCIATES et al.
No. 57-78.
Supreme Court of Vermont.
January 11, 1979.
Motion for Reargument Denied February 7, 1979.
McKee, Giuliani & Cleveland, David A. Kelley (on the brief), Montpelier, for plaintiff.
John A. Kelley, Middlebury, and Philip B. Abramowitz and Robert Feldman (on the brief), of Gross, Shuman, Brizdle, Laub, David & Gilfillan, Buffalo, N. Y., for Middlebury Associates and Middlebury Developers, Inc.
John H. Carnahan, of Fitts & Olson, Brattleboro, for R. E. Bean Constr. Co.
Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.
BARNEY, Chief Justice.
All parties to this litigation concede that the plaintiff, Pike Industries, Inc., has not been paid for paving work done as a subcontractor on a shopping center construction project. The lack of payment, according to the findings, is not based on any challenge as to the quality of the plaintiff's work. The key question relates to determining which party is responsible for making payment to the plaintiff, the general contractor, R. E. Bean Construction Company, or the owner developer, a pair of companies, Middlebury Associates, and Middlebury Developers, Inc. These parties are all defendants in the action. Middlebury Associates contracted with the Bean company, and was the equitable owner of the property. Middlebury Associates also contracted with a related company, Middlebury Developers, *281 Inc., with respect to financing, and that corporation held legal title to the premises. For the purposes of this appeal we will treat them as they treated themselves, as a single entity, referred to as Middlebury.
The Bean company entered into a contract with Middlebury to construct a shopping center for a price guaranteed not to exceed $1,045,000.00, subject to any increases based on change orders. Middlebury's cost for the project was to be determined by Bean's "cost of the work" as defined in the contract, plus a fee of $41,800.00 to Bean. There was a date of December, 1973, for one part and May 31, 1974, for the balance by which time Bean was to "attempt" to complete the project.
The plaintiff, Pike, did not enter the picture until sometime in July, 1974, when it engaged with Bean by oral subcontract to do the paving work required by the contract with Middlebury. This work it carried on continuously until October 18, 1974. At that time, fifty-one per cent of the paving work had been accomplished, but Pike had received no payment from any source for its work. As a result, a tentative decision to cease operations was made.
On that same day, according to the evidence, Pike's representative was called by an agent of one of the principal tenants advising of the need to finish the paving so that the tenant could assume occupancy. On being told of the decision to stop work because of lack of payment, the tenant's agent indicated that there would be a call from the owner/developer, Middlebury.
Such a call came about. Pike's representative was urged by Middlebury's agent to not only continue the paving, but expedite it. Authorization to work overtime was orally given and a representation made which, although the matter was disputed, the trial court found to be a guarantee by Middlebury to Pike of payment. A confirmatory telegram was sent from Middlebury to Pike which read as follows:
Regarding Middlebury Shopping Center persuant [sic] to our telephone conversation you are directed to bill Middlebury Developers, Inc. directly for the work performed and you are further authorized to perform all necessary overtime to complete your work by Sunday, Oct. 20, 1974.
The paving work was in fact completed November 6, 1974. The lower court found that no loss or prejudice resulted from the postponed completion. At the completion of the paving a billing invoice was sent to Bean, with copies to Middlebury and others showing an amount due of $115,651.13. On November 11, 1974, according to the testimony, Middlebury advised Bean that Middlebury was terminating the contract and taking over construction. This action purported to be in accordance with a right of termination given the owner under the master contract with Bean. The findings do not reflect that the terminating action was initiated by Middlebury, but it is not a matter of dispute. The only controversy about it is whether or not the termination by Middlebury was based on justifiable cause within the provisions of the contract.
The pertinent provisions of the master contract, in evidence as an exhibit, gave to the owner, Middlebury, the right to terminate on seven days' notice if certain circumstances, such as receivership, bankruptcy or failure to pay subcontractors, among others, pertain. In such a case, the owner may go ahead and complete the construction and recover from the contractor, Bean, any costs over the contract price. At the same time, the owner engages to become liable for obligations, commitments and unsettled claims already incurred in good faith by the contractor.
Middlebury did, in fact, proceed to complete the project. The result was that a dispute arose between it and Bean concerning termination and the attempt by Middlebury to assess the cost overruns against Bean. This led to the arbitration proceedings whose relevance to the litigation now before us was contested by Middlebury.
In the meantime, Pike, still having had no pay for the work it had done, filed a mechanic's lien under 9 V.S.A. § 1921 on December 11, 1974. On March 6, 1975, this *282 action was brought to comply with 9 V.S.A. § 1924. The original complaint alleged direct contracts with Bean and with Middlebury Developers, Inc., that corporation having legal title to the premises at the time the lien was filed. The complaint was amended to include an allegation of direct contract between Pike and Middlebury Associates and a count that asserted that Middlebury Developers, Inc. had guaranteed payment to Pike for all indebtedness to it incurred by Bean or by Middlebury Associates. The Middlebury answer included two cross-claims: one against Bean for $600,000 damages based on breaches of the contract between Bean and Middlebury; the second, a claim against Bean for any amounts found owing from Middlebury to Pike. The answers also raised affirmative defenses based on the Statute of Frauds and lack of consideration as to any alleged agreement between Middlebury and Pike.
It was a separate suit by Bean against Middlebury arising out of this same construction project that gave rise to the arbitration proceedings already noted. The award in favor of Bean, which is still under appeal in state court, specifically omitted any consideration of the Pike claim and its allocation between the parties. All of the litigation was delayed while the arbitration award was tested in federal court. That action was dismissed.
Although the litigation arises from a complex state of facts, the issues on appeal involve only a few aspects of the whole relationship. In defense against the judgment in favor of Pike, Middlebury acknowledges that it made a contract directly with Pike. But Middlebury views that contract as only involving the authorization of and payment for overtime necessary under the arrangement evidenced by the telegram of October 18, 1974, already quoted. It is standing on its Statute of Frauds defense because of its claim that there was no intention of making an indemnity contract involved in the October, 1974 transaction.
Taking as the first issue the sufficiency of the telegram put into evidence as the writing to satisfy the requirements of the Statute of Frauds, we find none of the parties strongly arguing its adequacy. Most of the briefing concerns itself with reasons in support of the nonapplication of the Statute of Frauds. Our examination of the case and the exhibits confirms that, under our law, satisfaction of the requirements of the Statute of Frauds was not demonstrated. Although the Statute is merely a rule of evidence, litigants who timely raise it are entitled to its enforcement. Troy v. Hanifin, 132 Vt. 76, 80, 315 A.2d 875 (1974); McDonald v. Place, 88 Vt. 80, 83, 90 A. 948 (1914).
The Statute of Frauds, 12 V.S.A. § 181, in subsection (2) applies to a "special promise to answer for the debt, default or misdoings of another." It requires that the agreement upon which such action is brought, or a memorandum thereof, be in writing, signed by the party to be charged, or by his lawfully authorized agent. Both the fact of signature and evidence of the authority of an agent to sign have been held essential in our law. Courture v. Lowery, 122 Vt. 239, 244, 168 A.2d 295 (1961).
In this case there has been introduced no such signed document. The telegram contains no actual signature. The evidence does not disclose whether it was dispatched by telephone, or by submission of a written text. If the latter, no signed version has been introduced, if one exists, nor any signed authority of the sending agent. Therefore the Statute of Frauds bars use of the telegram as written evidence of an indemnity contract, and we so hold.
Disposition of the Statute of Frauds issue is required not only by the pleadings, but by the decision of the trial court. The judgment order below found Bean and Middlebury jointly and severally liable to the plaintiff for the full amount of the paving contract. Since the order seeks to impose liability on both Bean and Middlebury, however phrased, the trial court must have determined it to be a contract of indemnity with Middlebury in the posture of surety. But, as we have just determined the Statute of Frauds bars such a result here.
*283 On the other hand, the conclusions of the trial court speak of a separate contractual arrangement between Middlebury and Pike. Such a contract, in cases such as this, may not be subject to the Statute of Frauds. Enos v. Owens Slate Co., 104 Vt. 329, 333, 160 A. 185 (1932). As is pointed out in that case, the issue of whether or not a promise is original and not under the Statute, or collateral, is usually a factual issue. The new promise is original if it contemplates a discharge of the first contracting party and the substitution of the party involved in the new contract.
The trial court's award of judgment against Bean for the full obligation runs counter to any inferences in its findings and conclusions of any separate, original contract between Pike and Middlebury. Nor is there any factual finding making any allocation of the costs of paving between Bean and Middlebury. Thus, neither the findings nor the judgment order in their present form support recovery against Middlebury on the theory of a separate, original contractual undertaking. The Statute of Frauds bars recovery on an indemnity theory. In the ordinary situation, this would be dispositive of the whole litigation in Middlebury's favor. It does not do so here.
Middlebury has acknowledged from the outset its separate obligation to Pike for the overtime work referred to in the October, 1974 telegram. This obligation as one applying to Middlebury and not to Bean has had no recognition in the allocation of contractual liability. Unresolved is the further issue of whether this original contract applied to all work done after the telegram, or to the total performance of Pike, or merely to the overtime wages. With the Statute of Frauds barring the result reached by the trial court, these issues require resolution. Since they are questions of fact, Pocket v. Almon, 90 Vt. 10, 14, 96 A. 421 (1916), and are nowhere answered, we cannot achieve a final result in this Court. The matter must be remanded. Presumably, on remand, the other issues urged as being undisposed of will be dealt with consistent with the state of facts arrived at on retrial. This includes any determination of Bean's liability to Middlebury, if any, for payments Middlebury may be required to make to Pike.
Judgment reversed and cause remanded for rehearing consistent with the views expressed in the opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1512115/ | 761 S.W.2d 575 (1988)
TRANS-CONTINENTAL FINANCE CORPORATION, Appellant,
v.
SUMMIT NATIONAL BANK, Appellee.
No. 2-88-101-CV.
Court of Appeals of Texas, Fort Worth.
December 7, 1988.
*576 Don Busby, Busby & Associates, Temple, for appellant.
J. Craig Anderson, Shannon, Gracey, Ratliff & Miller, Fort Worth, for appellee.
Before FENDER, C.J., and FARRIS and KELTNER, JJ.
OPINION
FENDER, Chief Justice.
Appellant, Trans-Continental Finance Corporation (Trans-Continental), allegedly defaulted on a promissory note owed to appellee, Summit National Bank (Summit). Summit brought suit on the note and filed a motion for summary judgment. The trial judge granted the motion and Trans-Continental appeals.
We affirm and assess damages for the appeal.
Summit originally brought suit to recover on two notes totaling $139,402.45 principal plus interest and attorney's fees. Later Summit amended its petition to recover $132,950.95 principal plus interest and attorney's fees on a single $165,000.00 note. Trans-Continental answered with a general denial. Summit filed a motion for summary judgment which was granted by the trial court. The trial judge rendered judgment in the amount of $132,950.95 plus interest and attorney's fees.
In its sole point of error, Trans-Continental argues that the granting of the summary judgment was improper as there was a genuine issue of material fact. By cross point Summit asks us to assess damages for delay under TEX.R.APP.P. 84.
In a summary judgment case, the issue on appeal is whether the movant met his burden for summary judgment by establishing that there exists no genuine issue of material fact and that he is entitled to judgment as a matter of law. City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex.1979); TEX.R. CIV.P. 166a. The burden of proof is on the movant, and all doubts as to the existence of a genuine issue as to a material fact are resolved against him. Great American R. Ins. Co. v. San Antonio Pl. Sup. Co., 391 S.W.2d 41, 47 (Tex.1965). Therefore, we must view the evidence in the light most favorable to the non-movant. See id. In deciding whether there is a material fact issue precluding summary judgment, all conflicts in the evidence will be disregarded and the evidence favorable to the non-movant will be accepted as true. Montgomery *577 v. Kennedy, 669 S.W.2d 309, 311 (Tex. 1984); Farley v. Prudential Insurance Company, 480 S.W.2d 176, 178 (Tex.1972). Every reasonable inference from the evidence must be indulged in favor of the non-movant and any doubts resolved in his favor. Montgomery, 669 S.W.2d at 311. Evidence which favors the movant's position will not be considered unless it is uncontroverted. Great American, 391 S.W. 2d at 47. The summary judgment will be affirmed only if the record establishes that the movant has conclusively proved all essential elements of his cause of action or defense as a matter of law. City of Houston, 589 S.W.2d at 678.
Attached to its motion for summary judgment, Summit filed two sworn affidavits. The first was of James L. Murray, an authorized agent of Summit. He swore that the bank was the holder of the note, that Trans-Continental executed the note, that Trans-Continental defaulted on the note, and that there was currently due and owing $132,950.95 principal (plus interest, costs and attorney's fees) on the note. He further swore that it was necessary to engage the services of an attorney to collect on the note and attached a copy of the note. The second sworn affidavit was of Summit's attorney and covered the reasonable fees necessary for collection. These facts include the necessary elements to recover in a suit on a note. Clark v. Dedina, 658 S.W.2d 293, 295-96 (Tex.AppHouston [1st Dist.] 1983, writ dism'd).
In its response to the summary judgment motion Trans-Continental attached an affidavit of Jack Munden, the sole stockholder and officer of Trans-Continental. He swore that he had viewed a list of credits provided by Summit that indicated at various times a principal balance greater than $132,950.95. Munden further swore that he had received a letter from Summit indicating a larger balance than alleged here, and that in another suit a representative of Summit alleged a larger balance on this note than Summit sought here. We note that all of these balances Munden alleged were from 1984 and 1985. He also swore that "[he did] not believe all credits [had] been accounted for" on the note.
We find that Summit conclusively established an amount owing of $132,950.95 on the note. Its summary judgment proof was properly sworn to and presented facts as to the amount owing. Trans-Continental's proof merely showed at certain times it had owed more than the $132,950.95 that Summit was currently seeking. At no time does Trans-Continental's proof show that it owed less than the judgment amount. Further, Munden stated that he did not "believe all credits have been accounted for." The belief of an affiant is insufficient to defeat a summary judgment motion. Instead, the statements contained within the affidavit must be so direct and unequivocal that perjury can be assigned against the affiant if the statement is false. See Burke v. Satterfield, 525 S.W.2d 950, 955 (Tex.1975). Trans-Continental had no other evidence to show that there may have been additional credits to which it was entitled. Under these circumstances we find that there was no genuine issue of material fact and the granting of the motion for summary judgment was proper. The appellant's point of error is overruled.
In its cross point, Summit urges us to assess damages against Trans-Continental because the appeal was designed to delay or harass. See TEX.R.APP.P. 84. The applicable rule 84 reads in part:
In civil cases where the court of appeals shall determine that an appellant has taken an appeal for delay and without sufficient cause, then the court may, as part of its judgment, award each prevailing appellee an amount not to exceed ten percent of the amount of damages awarded to such appellee as damages against such appellant.
Id. Trans-Continental cites several cases in its supplemental brief for the proposition that damages should not be assessed unless there was a showing that appeal was taken for delay purposes and without sufficient grounds, Aetna Casualty and Surety Company v. Curlee, 416 S.W.2d 890 (Tex. Civ.App.Fort Worth 1967, no writ), or that the record clearly shows that appellant *578 had no reasonable grounds to believe the judgment would be reversed. Beago v. Ceres, 619 S.W.2d 293 (Tex.Civ.App Houston [1st Dist.] 1981, no writ).
In GTE Directories Corp. v. McKinnon, 734 S.W.2d 429 (Tex.App Fort Worth 1987, no writ) this court held that sanctions would not be granted on appeal if the appellant's brief was well researched and presented arguable points of error. Id. at 432. Here we find appellant's brief to be merely a synopsis of summary judgment law with little or no application to the specific facts of the present case. Further, we find the point of error to be without merit and not even arguable. We believe an intent to delay is demonstrated in a case like this when no evidence is presented as to credits allegedly owed on a note at the trial level and an appeal is taken on this ground. The sole purpose for such an appeal can only be to delay the collection of money owed. We find damages of $5,000.00 to be appropriate under rule 84. Appellee's cross point is granted to this extent.
The judgment of the trial court is affirmed and the appellant is ordered to pay an additional $5,000.00 damages in this appeal. | 01-03-2023 | 10-30-2013 |
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